This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6
of the Securities Act of 1934, as amended, that involve substantial risks and
uncertainties. These forward-looking statements are not historical facts, but
rather are based on current expectations, estimates and projections about our
industry, our beliefs and our assumptions. Words such as "anticipate,"
"expects," "intends," "plans," "believes," "seeks" and "estimates" and
variations of these words and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of future
performance and are subject to risks, uncertainties and other factors, some of
which are beyond our control and difficult to predict and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this Form 10-
Overview
The Company is currently focused on designing and developing biometric locking wallets and related physical, personal security products, and providing consulting services in connection with protective wallets and other personal security products.
The Company's fiscal year end is
The Company was previously a public company required to file reports with the
Description of Business
We are a designer and developer of innovative, physical, personal security
products that incorporate security and communication technologies to protect
against identity, personal and financial information theft. iWallet is a
registered trademark in
We are based in
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subject to completion of our product redesign during that time period. We also currently provide consulting services to other companies in the industry.
We are currently improving our designs and seeking manufacturers to launch our products back into the market, and we are not currently engaged in any product sales. We are currently redesigning the original iWallet with current technology as follows:
a.Add facial recognition vs. the original fingerprint scanner in the original iWallet design.
b.Add GPS tracking vs. the original alarm going off when the iWallet was separated from the linked mobile device.
c.Use flexible case material vs. the original hard case to house wallet electronics.
d.Add ability to download credit card numbers to its built-in memory vs. the original non capability.
This new technology is currently being designed to be implemented with various portable containers like wallets, passport holders and hand bags. We are in the initial stages of product redesign, and we are currently conducting tests with electronic components from different suppliers to see which ones work more efficiently. Once we know which ones work to our satisfaction, we plan to make 3D prototypes to show to our consulting customers that already have relationships with for their feedback and approval. Due to the revamping of our line of products, we have discontinued manufacturing the original iWallet since we consider the prior iWallet technology outdated.
The Company is currently working with engineers regularly to reach the aforementioned four technology feature milestones described above, and the Company is also meeting regularly with potential clients that show interest in this new technology and might be willing to either purchase product or designs, including gauging interest in potential white (private) labeling for large name brands like Dunhill with which we have relationships.
We have accumulated a database of customers through tradeshows like the Consumer
Electronics Show-CES, where iWallet won an innovation award that created a
substantial interest in our products throughout many industries like automotive
(General Motors,
We anticipate that we will be ready to launch our redesigned products with
updated technological features within the next 12 months, although the timeline
may be delayed due to the continuing effects of the COVID-19 pandemic and the
worldwide shortage in electronic components, resulting in part from Chinese
supply chain interruptions and
Products and Technology
We are redesigning our original product, which will be marketed as the "iWallet 2.0," to have the following features:
·Sleek, compact industrial design with
·Pairs with the owner's cellular phone via bluetooth technology
·Patented, exclusive tamper resistant locking mechanism utilizes innovative fingerprint biometric reader for unlocking
·Unique latch control that only consumes power during latching hence providing extended battery life
·RFID blocking capability for enhanced wireless protection
·Speaker providing audible feedback
·GPS tracking capabilities
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We also intend to bring the following additional products to market:
·Leather wallets with a GPS module built-in
·Storage devices with co-branding luxury partners
·A secure passport case called the iPassport
·A secure mobile personal safe to store pharmaceuticals in
·A smart "padlock" with a biometric reader for gym lockers and other personal areas that require security
We hold over twenty patents and patent applications filed in various countries
around the world. Our products are manufactured under contract by a manufacturer
based in Zhuhai,
We hold both utility and design patents and patent applications. All of our
current utility patents will remain in effect until
Canada June 10, 2023 Europe December 9, 2036 Japan May 18, 2032 Russia December 13, 2036 Singapore December 9, 2026 Taiwan December 9, 2023 Services Offered
We are currently providing project management services to companies interested
in the research, development (such as feasibility study, source codes, gerber
files, apps, etc.), manufacturing (molds, PCB boards, etc.), materials (such as
We consider ourselves to be at the forefront of the industry with the expertise, knowledge, resources and commitment to perform beyond our clients' expectations with expertise in the field of portable containers that we dub "Techcessories," and our commitment is to get their products out in the market as soon as possible to manage efficiently their product's life cycles and replace their aging products with updated technology. We also plan to offer all of the aforementioned processes to companies on a partnership basis, whereby we would reduce the prices we charge to our customers (which reduction would reflect a portion of our cost of development, manufacturing, inventory and marketing) in exchange for being paid commissions by the customers in the future from new product sales or potentially receiving partial ownership in their new product offerings in the future, in order to provide a more affordable option to the client. We do not yet have any customers engaged on this basis, nor are we dependent on this structure.
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Market and Competition Overview
Our primary target demographic is consumers who are in the market for high-end luxury storage cases and similar accessories. We do not believe that the $200+ approximate retail price to the customer for many of our planned products will be an obstacle for our initial target demographic.
We have previously competed with luxury brands such as Cartier, Salvatore
Ferragamo,
·Ekster: Parliament Wallet - integrated RFID blocking technology. GPS tracking available as an addon.
·Nomad:
·Zitahli: Mens Wallet with
We believe the security, high technology, slim design, and
Sales, Distribution and Growth Strategy
Our current sales strategy is focused on developing and introducing a new
flexible wallet made out of leather instead of
We plan to private label our product designs for well-established global brands that we already have a business relationship with (described below) through our first and second generation wallets, unlike our competitors that only promote their brands.
As funds permit, we plan to attend domestic consumer electronics trade shows, personal accessories trade shows, vacation trade shows, and luggage related trade shows to promote our line of unique products that we call "Techcessories." The Company has been working with Global Marketing Strategies in order to explore creative strategies, advertising concepts, consumer opinions, existing distribution and sales channels to determine the best path for sales and distribution of the Company's product and services offerings.
Our established distribution channels for the original iWallet products include the following, which we believe will be available for the Company's future product offerings.
·Neiman Marcus in
·Harrods in
·NeedItWantItGadgets in
The following are current prospective sales channels:
·Private branding for well-established global brands: Dunhil of
·Dufry, a global duty-free company with 1,100 locations in 45 countries.
·Touch of Modern. ·Skymall. ·Travelsmith. ·Hammacher Schlemmer. ·Zero Halliburton.
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Employees
We have no employees except for our CEO,
Environmental Laws
We have not incurred and do not anticipate incurring any expenses associated with environmental laws.
Reports to Security Holders
The Company intends to furnish its stockholders with annual reports containing
financial statements audited by its independent registered public accounting
firm and to make available quarterly reports containing unaudited financial
statements for each of the first three quarters of each year. The Company files
Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports
on Form 8-K with the
The public may read and copy any materials that the Company files with the
Available Information
All reports of the Company filed with the
Results of Operations
The following summary of our results of operations should be read in conjunction
with our financial statements for the three and nine months ending
Our financial statements are stated in
Going Concern Qualification
Several conditions and events cast substantial doubt about the Company's ability
to continue as a going concern. The Company has incurred cumulative net losses
of
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Results of Operations for the nine months ended
Revenues
We generated revenues of
Cost of Sales
Cost of sales decreased to
Operating Expenses
Operating expenses, which consisted solely of general and administrative
expenses, decreased to
Other Income (Expense)
We incurred interest expense of
Net Loss
The Company had a net loss of
Results of Operations for the three months ended
Revenues
We generated revenues of
Cost of Sales
Cost of sales remained constant at
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Operating Expenses
Operating expenses, which consisted solely of general and administrative
expenses, decreased to
Other Income (Expense)
We incurred interest expense of
Net Loss
The Company had a net loss of
Liquidity and Capital Resources
At
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financial activities was
Our expenses to date are largely due to professional fees that include accounting, audit and legal fees. To date, we have had minimal revenues, and we require additional financing in order to finance our business activities on an ongoing basis.
Cash Flow
Our primary source of liquidity during the three months ended
Working Capital
We had current assets of
Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
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Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity
with
Management believes the Company's critical accounting policies and estimates are those related to revenue recognition, intangible assets, and income taxes. Management considers these policies critical because they are both important to the portrayal of the Company's financial condition and operating results, and they require management to make judgments and estimates about inherently uncertain matters. The Company's management has reviewed these critical accounting policies and related disclosures.
Revenue Recognition
The Company's business plan is to derive revenue primarily from the sale and engraving of its wallets and consulting services within the smart wallet sector. Revenue is recognized in accordance with ASC 606, Revenue from Contracts with Customers. The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under ASC 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
Intangible Assets
Patents and trademarks are measured at cost. Legal fees associated with patents and trademarks, which are expected to be issued, are recorded as patents and trademarks on the balance sheets. Upon approval by the relevant patent office, the patents and trademarks are amortized over their respective expected lives. Patent and trademark costs associated with patents or trademarks which are not approved or are abandoned, are expensed in the period in which such patents are not approved.
The Company expects to maintain patents for up to 20 years from the effective date and the trademark registrations for as long as the trademarks remain in use and the required filings are made to keep them in use. However, based on the Company's assessment of potential innovation or other competing technological developments a useful life of ten years has been assessed for both the patents and the trademarks.
Software consists of costs relating to the development of the software behind the biometric scanning and the other security programs involved in the wallets. Costs relating to the development of this software are capitalized and amortized over its estimated useful life of ten years.
Website development costs relating to website and mobile application and software development are also capitalized and amortized over its estimated useful life of three years.
ASC 350-20,
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Income Taxes
Income taxes are computed in accordance with the provisions of ASC 740, Income Taxes, which requires, among other things, a liability approach to calculating deferred income taxes. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in its financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The Company is required to make certain estimates and judgments about the application of tax law, the expected resolution of uncertain tax positions and other matters. In the event that uncertain tax positions are resolved for amounts different than the Company's estimates, or the related statutes of limitations expire without the assessment of additional income taxes, the Company will be required to adjust the amounts of the related assets and liabilities in the period in which such events occur. Such adjustments may have a material impact on the Company's income tax provision and results of operations.
Recently Issued Accounting Pronouncements
We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our net results of operations, financial position, or cash flows.
Seasonality
We do not expect our sales to be impacted by seasonal demands for our products and services.
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