U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Mark One 

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

 

For the quarterly period ended September 30, 2014

 

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

 

For the transition period from ___________ to ___________

 

Commission File No. 333-162518

 

SECURE LUGGAGE SOLUTIONS INC.

(Name of small business issuer in its charter)

 

Delaware		68-0677444
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

2375 East Camelback Road, 5th Floor Phoenix, Arizona 85016

(Address of principal executive offices)

(602) 387-4035

(Issuer’s telephone number)

n/a

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

 

Securities registered pursuant to Section 12(b) of the Act:		Name of each exchange on which registered:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001
(Title of Class)

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

 

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

 

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

 

Class		Outstanding as of November 18, 2014
Common Stock, $0.001		20,677,000

 

 

 

SECURE LUGGAGE SOLUTIONS INC.

FORM 10-Q

FOR THE PERIOD ENDED SEPTEMBER 30, 2014

 

INDEX

 

			Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS				3
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements			4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			11
Item 3.	Qualitative and Quantitative Disclosures About Market Risk			14
Item 4.	Controls and Procedures			14
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings			16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			16
Item 3.	Defaults Upon Senior Securities			16
Item 4.	Mine Safety Disclosure			16
Item 5.	Other information			16
Item 6.	Exhibits			17
SIGNATURES				18

 

2

Forward-Looking Information

 

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

 

3

 

ITEM 1. FINANCIAL STATEMENTS

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

BALANCE SHEETS

 

		September 30,				December 31,
		2014				2013
Assets:
Current assets
Cash		$	430			$	430
Total current assets			430				430
Prepayment			-				-
Total Assets		$	430			$	430
Liabilities:
Current Liabilities
Accounts payable and accrued expenses		$	85,028			$	88,028
Convertible Note			3,000				-
Total current liabilities			88,028				88,028
Total liabilities			88,028				88,028
STOCKHOLDERS' DEFICIT
Common Stock, authorized 100,000,000 par value $0.001 issued 20,677,000 respectively			20,707				20,707
Preferred Stock authorized 20,000,000 par value $0.001 0 issued			-				-
Shares to be issued for services			-				-
Stock subscription receivable			-				-
Additional paid-in capital			991,903				987,239
Deficit Accumulated During the Development Stage			(1,100,208	)			(1,095,544	)
Total Stockholders' Deficit			(87,598	)			(87,598	)
Total Liabilities and Stockholders' Deficit		$	430			$	430

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

 

4

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

 

																		From inception
																		(December 4,
		For the Three Months Ended								For the Nine Months								2008) to
		September 30,				September 30,				September 30,				September 30,				September 30,
		2014				2013				2014				2013				2014
Revenues		$	-			$	-			$	-			$	-			$	-
Cost of Services			-				-				-				-				-
Gross Margin			-				-				-				-				-
Operating Expenses:
Professional Fees			-				460				920				1,379				731,353
General and Administrative Expenses			-				1,877				3,744				5,631				134,793
Total Operating Expenses			-				2,337				4,664				7,010				866,146
Operating Loss			-				(2,337	)			(4,664	)			(7,010	)			(866,146	)
Other (Income) Expenses
Interest Expense																			1,145
Impairment			-								-								242,917
Total Other Expenses			-								-								244,062
Net Loss Before Income Taxes			-				(2,337	)			(4,664	)			(7,010	)			(1,110,208	)
Income Tax			-				-				-				-				-
Net Loss		$	-			$	(2,337	)		$	(4,664	)		$	(7,010	)		$	(1,110,208	)
Loss per Share, Basic & Diluted		$	-			$	0.00			$	(0.00	)		$	0.00
Weighted Average Shares Outstanding			20,677,000				20,677,000				20,677,000				20,677,000

 

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

 

5

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

 

										From inception
										(December 4, 2008)
		For the Nine Months								through
		September 30,				September 30,				September 30,
		2014				2013				2014
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss for the period		$	0			$	(7,010	)		$	(1,100,208	)
Adjustments to reconcile net loss from operations:
Shares to be ussed and issued for services			-				-				114,000
Interest			-				-				729
Depreciation and Amortization			-				-				22,083
Impairment			-				-				242,917
Forgiveness of Shareholder loan			-				-				222,322
Prepayment			-				-
Change in Operating Assets and Liabilities:
Prepaid Costs			-				-
Accounts Payable			-				-				88,028
Due to Related Parties							7,010				4,674
Increase (decrease) in accounts payable- related party			-				-
Increase (decrease) in debt			-				-				-
Net cash used in Operating Activities			-				-				(405,455	)
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Assets			-				-				(30,000	)
Net Cash used in Investing Activities			-				-				(30,000	)
CASH FLOW FROM FINANCING ACTIVITIES:
Share subscriptions received			-				-				231,000
Repayment shareholder loan			-				-				(56,000	)
Proceeds from issuance of common stock			-				-				260,885
Proceeds from subscriptions receivable			-				-				-
Net Cash provided by Financing Activities			-				-				435,885
Net Increase (Decrease) in Cash			0				0				430
Cash at Beginning of Period			430				430				-
Cash at End of Period		$	430			$	430			$	430
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest		$	0			$	-			$	-
Cash paid for franchise and income taxes		$	-			$	-			$	-

 

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

 

6

 

SECURE LUGGAGE SOLUTIONS, INC 

(A Development Stage Company) 

Notes to Financial Statements 

September 30, 2014

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

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

 

Basis of Presentation

 

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

 

NOTE 2 – GOING CONCERN

 

The Company’s financial statements as of September 30, 2014 have been prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company has incurred a cumulative net loss from inception December 4, 2008 through September 30,2014 of $1,100,208.

 

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

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Cash and cash equivalents

 

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

 

Net Loss per Share

 

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

 

7

 

Use of Estimates

 

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

 

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

 

Reclassifications

 

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

 

Revenue Recognition

 

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

 

Fair value of financial instruments

 

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

 

Stock-based compensation

 

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

 

Recently Issued Accounting Principles

 

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

 

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

 

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

 

8

 

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

 

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

 

NOTE 4 – IMPAIRMENT-LICENSE USE RIGHT

 

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

 

NOTE 5 – EQUITY

 

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

 

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

 

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

  

NOTE 6 – RELATED PARTY TRANSACTIONS

 

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

 

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

 

In 2013 the officers paid for expenses of the company of $9,347. This amount was later forgiven and charged to paid in capital.

 

At June 30, 2014 the officers forgave $4,664 of debt.

 

NOTE 7 – CONVERTIBLE NOTE

 

In August of 2014 the company entered into an agreement for debt of $3,000 to be converted into stock @.001 or 3,000,000 shares. As there is no market for the stock and it has never traded the derivative calculation is not present.

 

9

 

NOTE 8 – INCOME TAX

 

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

 

Net deferred tax assets consist of the following components as of December 31, 2013 and 2012:

 

		December 31, 2013				December 31, 2012
Deferred Tax Assets – Non-current:
NOL Carryover		$	290,381			$	281,034
Payroll Accrual			-				-
Less valuation allowance			(290,381	)			(281,034	)
Deferred tax assets, net of valuation allowance		$	-			$	-

  

The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the period ended December 31, 2013 and 2012 due to the following:

 

		2013				2012
Book Income		$	(9,347	)		$	(17,357	)
Meals and Entertainment			-				-
Stock for Services			-				6,000
Other			-				-
Valuation allowance			9,347				11,357
		$	-			$	-

 

At December 31, 2013, the Company had net operating loss carry forwards of approximately $281,034 that may be offset against future taxable income from the year 2012 to 2027 No tax benefit has been reported in the December 31, 2013 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

 

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

 

NOTE 9 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the filing date of these financial statements and has disclosed that there are no such events that are material to the financial statements to be disclosed:

 

10

 

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

 

BACKGROUND

 

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

 

Change in Control

 

On August 14, 2014, our sole officer and director, Donald E. Bauer ("Bauer"), entered into that certain stock and debt purchase agreement dated August 14, 2014 (the "Stock & Debt Purchase Agreement") with World Financial Holdings Group ("World Financial"). In accordance with the terms and provisions of the Stock & Debt Purchase Agreement, Bauer sold an aggregate 17,487,000 shares of common stock held of record to World Financial and 1,802,000 shares of Regulation S restricted stock, representing an aggregate equity interest of 93.28% equity interest. In accordance with the terms and provisions of the Stock & Debt Purchase Agreement, the Stock & Debt Purchase Agreement shall be consummated, the shares shall be transferred to World Financial and Bauer shall tender his resignation as the President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and sole director after the Company brings current its filings under the Securities Exchange Act of 1934, as amended, and effects the name change and reverse stock split with FINRA. The debt purchased was $3,000 debt previously incurred by us January 22, 2012 and evidenced by that certain promissory note dated August 13, 2014 (the "Promissory Note").

 

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

Name Change Amendment/Reverse Stock Split

 

On August 18, 2014, the majority shareholder of the Company approved a reverse stock split of one for five hundred (1:500) of the Company's total issued and outstanding shares of common stock (the “Stock Split”) and a change in the name of the Company from "Secure Luggage Solutions Inc." to " Kun De International Holdings Inc." (the "Name Change"). Pursuant to the Company's Bylaws and the Delaware Revised Statutes, a vote by the holders of at least a majority of the Company’s outstanding votes is required to effect the Stock Split and the Name Change. The Company’s articles of incorporation does not authorize cumulative voting. As of the record date of August 18, 2014, the Company had 20,677,000 voting shares of common stock issued and outstanding. The consenting stockholders of the shares of common stock are entitled to 17,487,000 votes, which represents approximately 93.28% of the voting rights associated with the Company’s shares of common stock. The consenting stockholders voted in favor of the Stock Split and the Name Change described herein in a unanimous written consent dated August 18, 2014.

  

The Board of Directors had previously considered factors regarding their approval of the Stock Split including, but not limited to: (i) current trading price of the Company’s shares of common stock on the OTC QB Market and potential to increase the marketability and liquidity of the Company’s common stock; (ii) possible reluctance of brokerage firms and institutional investors to recommend lower-priced stocks to their clients or to hold in their own portfolios; (iii) desire to meet future requirements of per-share price and net tangible assets and shareholders’ equity relating to admission for trading on other markets; and (iv) posturing the Company and its structure in favorable position in order to effectively negotiate with potential acquisition candidates. The Board of Directors of the Company approved the Name Change and the Stock Split and recommended the majority shareholders of the Company review and approve the Name Change and the Stock Split.

 

11

 

The Stock Split will be effected based upon the filing of appropriate documentation with FINRA. The Stock Split will decrease the Company's total issued and outstanding shares of common stock from approximately 20,677,000 shares to 41,354 shares of common stock. The common stock will continue to be $0.001 par value. The trading symbol of the Company will have a "D" placed on the ticker symbol for twenty business days from the effective date of the Stock Split. After twenty business days has passed from the effective date, the Company's trading symbol will change and there will be a new cusip number.

 

The Name Change was effected to better reflect the future business operations of the Company.

 

Amendment to Articles of Incorporation

 

On August 18, 2014, the Board of Directors of the Company and the majority shareholders of the Company approved an amendment to the articles of incorporation to change the name of the Company to "Kun De International Holdings Inc." (the “Name Change Amendment”). The Amendment was filed with the Secretary of State of Delaware on August 21, 2014 changing the name of the Company to "Kun De International Holdings Inc." (the "Name Change"). The Name Change was effected to better reflect the future business operations of the Company.

 

RESULTS OF OPERATIONS

 

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

 

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

 

SUMMARY COMPARISON OF OPERATING RESULTS
		Nine Month Period Ended September 30
		2014				2013
Revenues, net		$	-0-			$	-0-
Operating Expenses			4,664				4,674
Loss from Operations			(4,664	)			(4,674	)

 

Nine Month Period Ended September 30, 2014 Compared to Nine Month Period Ended September 30, 2013

 

During the nine month periods ended September 30, 2014 and September 30, 2013, we did not generate any revenue. During the nine month period ended September 30, 2014, we incurred operating expenses of $4,664 compared to $7,010 incurred during the nine month period ended September 30, 2013, a decrease of $2,346. Operating expenses generally consisted of: (i) professional fees of $920 (2013: $1,379); and (ii) general and administrative of $3,744 (2013: $5,631). The decrease in operating expenses was primarily attributable to the decrease in professional fees based on the decreased scale and scope of our business operations. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

 

After deducting operating expense, we realized a net loss for the nine month period ended September 30, 2014 of ($4,664) compared to a net loss of ($7,010) during the nine month period ended September 30, 2013, a decrease of $2,346 due to the factors discussed above. The weighted average number of shares outstanding was 20,677,000 for the nine month periods ended September 30, 2014 and September 30, 2013.

 

12

 

Three Month Period Ended September 30, 2014 Compared to Three Month Period Ended September 30, 2013

 

During the three month periods ended September 30, 2014 and September 30, 2013, we did not generate any revenue. During the three month period ended September 30, 2014, we incurred operating expenses of $-0- compared to $2,337 incurred during the three month period ended September 30, 2013, a decrease of $2,337. Operating expenses generally consisted of: (i) professional fees of $-0- (2013: $460); and (ii) general and administrative of $-0- (2012: $2,337). The decrease in operating expenses was primarily attributable to the decrease in professional fees based on the decreased scale and scope of our business operations until the Stock & Debt Purchase Agreement is consummated. General and administrative expenses generally include corporate overhead, financial and administrative contracted services, marketing, and consulting costs.

 

After deducting operating expense, we realized a net loss for the three month period ended September 30, 2014 of ($-0-) compared to a net loss of ($2,337) during the three month period ended September 30, 2013, a decrease of $2,337 due to the factors discussed above. The weighted average number of shares outstanding was 20,677,000 for the three month periods ended September 30, 2014 and September 30, 2013.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Nine Month Period Ended September 30, 2014

 

As of September 30, 2014, our current assets were $430 and our current liabilities were $88,028, which resulted in a working capital deficit of $87,598. As of September 30, 2014, current assets were comprised of $430 in cash and our current liabilities were comprised of $88,028 in accounts payable and accrued expense.

 

There was no decrease or increase in total assets during the nine month period ended September 30, 2014 from fiscal year ended December 31, 2013.

 

There was no decrease or increase in total liabilities during the nine month period ended September 30, 2014 from fiscal year ended December 31, 2013.

 

Cash Flows from Operating Activities

 

For the nine month periods ended September 30, 2014 and September 30, 3013, net cash flows used by operating activities was $-0- . During the nine month period ended September 30, 2014, net cash flows used in operating activities consisted primarily of a net loss of $-0- (2013: $7,010), which was changed by an increase of ($-0-) (2014: $7,010) in accounts payable -related party.

 

Cash Flows from Investing Activities

 

For the nine month periods ended September 30, 2014 and September 30, 2013, net cash flows used in investing activities was $-0-.

 

Cash Flows from Financing Activities

 

For the nine month periods ended September 30, 2014 and September 30, 2013, net cash flows from financing activities was $-0-.

 

MATERIAL COMMITMENTS

 

On January 22, 2012, we received a loan of $3,000 from Raoul Taylor for working capital purposes. We have memoralized the loan in a convertible promissory note dated August 13, 2014 (the "Convertible Note"), which Convertible Note was acquired pursuant to the terms and provisions of the Stock & Debt Purchase Agreement. The Convertible Note is convertible into shares of our common stock at a conversion price of $0.001 per share.

 

PURCHASE OF SIGNIFICANT EQUIPMENT

 

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

 

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OFF-BALANCE SHEET ARRANGEMENTS

 

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

 

GOING CONCERN

 

The independent auditors' report accompanying our December 31, 2013 and December 31, 2012 financial statements contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business. We have suffered recurring losses from operations, have a working capital deficit and are currently in default of the payment terms of certain note agreements. These factors raise substantial doubt about our ability to continue as a going concern.

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 

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

 

OFF-BALANCE SHEET ARRANGEMENTS.

 

We have no off-balance sheet arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

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

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures.

 

We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.

 

Management’s report on internal control over financial reporting.

 

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

 

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·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
·	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and
·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

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

 

Based on our assessment, our chief executive officer and our chief financial officer believe that, as of September 30, 2014, our internal control over financial reporting is not effective based on those criteria, due to the following:

 

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

 

●

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

 

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

 

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

 

Changes in internal control over financial reporting.

 

There were no significant changes in our internal control over financial reporting during the fourth quarter ended September 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

AUDIT COMMITTEE

 

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

 

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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

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

 

ITEM 1A. RISK FACTORS

 

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

 

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

 

No unregistered shares were sold during the nine months ended September 30, 2014.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No senior securities were issued and outstanding during the nine months ended September 30, 2014.

 

ITEM 4. MINE SATEFY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

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ITEM 6. EXHIBITS

 

The following exhibits are filed as part of this Quarterly Report

 

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a)	Financial Statements.

 

(b)	Exhibits required by Item 601.

 

10.01		Convertible Promissory Note dated August 13, 2014 between Secure Luggage Solutions Inc. and Raoul Taylor.
31.1		Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act*
31.2		Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act*
32.1		Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act*

 

101.INS **		XBRL Instance Document
101.SCH **		XBRL Taxonomy Extension Schema Document
101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB **		XBRL Taxonomy Extension Label Linkbase Document
101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

_________

* Filed herewith.

 

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

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

 

	SECURE LUGGAGE SOLUTIONS, INC.
November 19, 2014	By:	/s/ Don Bauer
		Don Bauer
	Its:	CEO (Principal Executive Officer)
November 19, 2014	By:	/s/ Don Bauer
		Don Bauer
	Its:	Chief Financial Officer, Secretary, Treasurer (Principal Financial and Accounting Officer)

 

 

 

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