HLOC Helo Corporation (PK)

 

 

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 June 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 June 30, 2014
Common Stock, $0.001		20,677,000

 

 

 

SECURE LUGGAGE SOLUTIONS INC.

FORM 10-Q

FOR THE PERIOD ENDED JUNE 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			12
Item 3.	Qualitative and Quantitative Disclosures About Market Risk			15
Item 4.	Controls and Procedures			15
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings			18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			18
Item 3.	Defaults Upon Senior Securities			18
Item 4.	Mine Safety Disclosure			18
Item 5.	Other information			18
Item 6.	Exhibits			19
SIGNATURES				20

 

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

 

		June 30,				December 31,
Assets:		2014				2013
Current assets
Cash		$	430			$	430
Total current assets			430				430
Prepayment			-
Total Assets		$	430			$	430
Liabilities:
Current Liabilities
Accounts payable and accrued expenses		$	88,028			$	88,028
Due to Related Parties
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 Six Months Ended								2008) to
		June 30,				June 30,				June 30,				June 30,				June 30,
		2014			2013					2014				2013				2014
Revenues		$	-			$	-			$	-			$	-			$	-
Cost of Services			-				-				-				-				-
Gross Margin			-				-				-				-				-
Operating Expenses:
Professional Fees			460				460				920				920				731,353
General and Administrative Expenses			1,867				1,877				3,744				3,754				134,793
Total Operating Expenses			2,327				2,337				4,664				4,674				866,146
Operating Loss			(2,327	)			(2,337	)			(4,664	)			(4,674	)			(866,146	)
Other (Income) Expenses
Interest Expense																			1,145
Impairment			-								-								242,917
Total Other Expenses			-								-								244,062
Net Loss Before Income Taxes			(2,327	)			(2,337	)			(4,664	)			(4,674	)			(1,110,208	)
Income Tax			-				-				-				-				-
Net Loss		$	(2,327	)		$	(2,337	)		$	(4,664	)		$	(4,674	)		$	(1,110,208	)
Loss per Share, Basic & Diluted		$	(0.00	)		$	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)
		SIX MONTHS ENDED								through
		June 30,				June 30,				June 30,
		2014				2013				2014
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss for the period		$	(4,664	)		$	(4,674	)		$	(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			4,664				-				222,322
Prepayment			-				-
Change in Operating Assets and Liabilities:
Prepaid Costs			-				-
Accounts Payable			-				-				88,028
Due to Related Parties							4,674				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

June 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 June 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 June 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

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2014

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

 

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.

 

8

 

SECURE LUGGAGE SOLUTIONS, INC.

(A Development Stage Company)

Notes to Financial Statements

June 30, 2014

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

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.

 

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.

 

9

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2014

 

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– 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		$	-			$	-

 

10

 

SECURE LUGGAGE SOLUTIONS, INC

(A Development Stage Company)

Notes to Financial Statements

June 30, 2014

 

NOTE 7 – INCOME TAX (continued)

 

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 8 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events through the filing date of these financial statements and has disclosed that there are two such events that are material to the financial statements to be disclosed:

1. In 2014 the Company incurred a change of control and change in business direction.
2. In January 2012, the Company incurred debt of $3,000. This debt was evidenced by a convertible instrument dated August 13, 2014  converting such debt into common stock at a rate of $0.001 per share.

11

 

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 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.

 

12

  

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
		Six Month Period ended June 30
		2014				2013
Revenues, net		$	-0-			$	-0-
Operating Expenses			4,664				4,674
Loss from Operations			(4,664	)			(4,674	)

 

13

 

Six Month Period Ended June 30, 2014 Compared to Six Month Period Ended June 30, 2013

 

During the six month periods ended June 30, 2014 and June 30, 2013, we did not generate any revenue. During the six month period ended June 30, 2014, we incurred operating expenses of $4,664 compared to $4,674 incurred during the six month period ended June 30, 2013, a decrease of $10. Operating expenses generally consisted of: (i) professional fees of $920 (2013: $920); and (ii) general and administrative of $3,744 (2013: $3,754). 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.

 

Our net loss for the six month period ended June 30, 2014 was ($4,664) compared to a net loss of ($4,674) during the six month period ended June 30, 2013, a decrease of $10 due to the factors discussed above.

 

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

 

During the three month periods ended June 30, 2014 and June 30, 2013, we did not generate any revenue. During the three month period ended June 30, 2014, we incurred operating expenses of $2,327 compared to $2,337 incurred during the three month period ended June 30, 2013, a decrease of $10. Operating expenses generally consisted of: (i) professional fees of $460 (2011: $460); and (ii) general and administrative of $1,877 (2012: $1,877). 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.

 

Our net loss for the three month period ended June 30, 2014 was ($2,327) compared to a net loss of ($2,337) during the three month period ended June 30, 2013, a decrease of $10 due to the factors discussed above.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Six Month Period Ended June 30, 2014

 

As of June 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 June 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 six month period ended June 30, 2014 from fiscal year ended December 31, 2013.

 

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

 

Cash Flows from Operating Activities

 

For the six month periods ended June 30, 2014 and June 30, 3013, net cash flows used by operating activities was $-0- . During the six month period ended June 30, 2014, net cash flows used in operating activities consisted primarily of a net loss of $4,664 (2012: $4,674), which was changed by an increase of $4,664 (2013: $4,674) in accounts payable -related party.

 

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Cash Flows from Investing Activities

 

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

 

Cash Flows from Financing Activities

 

For the six month periods ended June 30, 2014 and June 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.

 

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

 

The Company has 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 its 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.

 

15

  

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:

 

·	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.

 

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Based on our assessment, our chief executive officer and our chief financial officer believe that, as of June 30, 2013, 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 quarter ended June 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, the Company is 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 six months ended June 30, 2014.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

No senior securities were issued and outstanding during the six months ended June 30, 2014.

 

ITEM 4. MINE SATEFY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

18

 

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.
October 21, 2014	By:	/s/ Don Bauer
		Don Bauer
	Its:	CEO (Principal Executive Officer)
October 21, 2014	By:	/s/ Don Bauer
		Don Bauer
	Its:	Chief Financial Officer, Secretary, Treasurer (Principal Financial and Accounting Officer)

 

 

 

 20

---

 

 

EXHIBIT 10.01

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

SECURE LUGGAGE SOLUTIONS INC.  

CONVERTIBLE PROMISSORY NOTE 

 

$3,000.00

August 13, 2014 Phoenix, Arizona

 

1.  Principal and Interest.

 

1.1  Secure Luggage Solutions Inc., a Delaware corporation (the "Company"), for value received, hereby promises to pay to the order of Raoul Taylor (the "Investor" or the "Holder") the sum of Three Thousand dollars ($3,000.00) at the time and in the manner hereinafter provided.

 

1.2  This Promissory Note (the "Note") shall bear no interest and is payable upon demand.

 

1.3  Upon payment in full of the principal hereof, this Note shall be surrendered to the Company for cancellation.

 

1.4  The principal of on this Note shall be payable at the principal office of the Company and shall be forwarded to the address of the Holder hereof as such Holder shall from time to time designate.

 

2.  Event of Default.  The occurrence of any one or more of the following events (regardless of the reason therefor), shall constitute an "Event of Default" hereunder:

 

(a)  The Company shall fail to make any payment of principal or any other amount owing in respect of, the Note when declared due and payable, and such failure shall have remained unremedied for a period of five (5) business days.

 

(b)  A case or proceeding shall have been commenced against the Company in a court having competent jurisdiction (i) seeking a decree or order in respect of the Company under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of the Company or of any substantial part of its properties, or (iii) ordering the winding-up or liquidation of the affairs of the Company, and any such case or proceeding shall remain undismissed or unstayed for sixty (60) consecutive days or such court shall enter a decree or order granting the relief sought in such case or proceeding.

 

(c)  The Company shall (i) file a petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable federal, state or foreign bankruptcy or other similar law, (ii) consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) of the Company or of any substantial part of its properties, or (iii) fail generally to pay its debts as such debts become due.

 

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(d)  Final judgment or judgments (after the expiration of all times to appeal therefrom) for the payment of money in excess of $1,000,000 in the aggregate shall be rendered against the Company and the same shall not (i) be fully covered by insurance or bonded over, or (ii) within thirty (30) days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or have been discharged within five (5) days after the expiration of any such stay.

 

3.  Attorney's Fees.  If the indebtedness represented by this Note or any part thereof is collected in bankruptcy, receivership or other judicial proceedings or if this Note is placed in the hands of attorneys for collection after default, the Company agrees to pay, in addition to the principal and interest payable hereunder, reasonable attorneys' fees and costs incurred by the Investor.

 

4.  Conversion.

 

4.1  Voluntary Conversion.  The Holder shall have the right, exercisable in whole or in part, to convert the outstanding principal into a number of fully paid and nonassessable whole shares of the Company's $0.001 par value common stock ("Common Stock") determined in accordance with Section 6.2 below.

 

4.2  Shares Issuable.  The number of whole shares of Common Stock into which this Note may be voluntarily converted ("Conversion Shares") shall be determined by dividing the aggregate principal amount borrowed hereunder by $0.001. (the “Note Conversion Price”).

 

4.3  Notice and Conversion Procedures.  After receipt of demand for repayment, the Company agrees to give the Holder notice at least five (5) business days prior to the time that the Company repays this Note.  If the Holder elects to convert this Note, the Holder shall provide the Company with a written notice of conversion setting forth the amount to be converted. The notice must be delivered to the Company together with this Note.  Within twenty (20) business days of receipt of such notice, the Company shall deliver to the Holder certificate(s) for the Common Stock issuable upon such conversion and, if the entire principal amount hereunder was not so converted, a new note representing such balance.  The shares of Common Stock issuable upon such conversion shall be deemed issued and outstanding upon receipt of the notice of conversion.

 

4.4  Anti-Dilution Provisions.

 

(a) Adjustments of Note Conversion Price. If the Company should at any time, or from time to time, during the term of this Note issue or sell any shares of Common Stock (other than the Conversion Shares which may be purchased upon conversion of the Notes, stock purchased pursuant to options, warrants and/or conversion rights outstanding as of the date of this Note and stock purchased pursuant to rights or options which may be granted to employees of the Company whether or not pursuant to a plan) without consideration or for a consideration per share less than the Note Conversion Price in effect immediately prior to the time of such issue or sale, then forthwith upon such issue or sale, the Note Conversion Price shall be adjusted to a price (computed to the nearest cent) determined by dividing (i) the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issue or sale multiplied by the Note Conversion Price in effect immediately prior to such issue or sale, and (y) the consideration, if any, received by the Company upon such issue or sale, by (ii) the total number of shares of Common Stock outstanding immediately after such issue or sale. For purposes of this subsection 6.4(a), the following provisions (1) to (5) shall also be applicable:

 

2

  

(1) Options.  In case at any time hereafter the Company shall in any manner grant any right to subscribe for or to purchase, or any option for the purchase of Common Stock or any stock or other securities convertible into or exchangeable for Common Stock (such convertible or exchangeable stock or securities being hereinafter referred to as “Convertible Securities") other than the Notes and other than rights or options which may be granted to employees of the Company whether or not pursuant to a plan, and the minimum price per share for which Common Stock is issuable, pursuant to such rights or options or upon conversion or exchange of such Convertible Securities (determined by dividing (i) the total amount if any, received or receivable by the Company as consideration for the granting of such rights or options, plus the minimum aggregate amount of additional consideration payable to the Company upon the exercise of such rights or options, plus in the case of such Convertible Securities, the minimum aggregate amount of additional consideration if any, payable upon the conversion or exchange thereof, by (ii) the total maximum number of shares of Common Stock issuable pursuant to such rights or options or upon the conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such rights or options) shall be less than the Note Conversion Price in effect immediately prior to the time of the granting of such rights or options, then the total maximum number of shares of Common Stock issuable pursuant to such rights or options or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such rights or options shall (as of the date of granting of such rights or options) be deemed to be outstanding and to have been issued for said price per share as so determined; provided, that no further adjustment of the Note Conversion Price shall be made upon the actual issue of Common Stock deemed to have been issued; and further provided, that, upon the expiration of such rights (including rights to convert or exchange) or options, (a) the number of shares of Common Stock deemed to have been issued and outstanding by reason of the fact that they were issuable pursuant to such rights or options (including rights to convert or exchange) were not exercised, shall no longer be deemed to be issued and outstanding, and (b) the Note Conversion Price shall forthwith be adjusted to the price which would have prevailed had all adjustments been made on the basis of the issue only of the shares of Common Stock actually issued upon the exercise of such rights or options or upon conversion or exchange of such Convertible Securities.

 

(2) Convertible Securities. In case the Company shall in any manner, subsequent to issuance of this Note, issue or sell any Convertible Securities, and the minimum price per share for which Common Stock is issuable upon conversion or exchange of such Convertible Securities (determined by dividing (i) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the Note Conversion Price in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall (as of the date of the issue or sale of such Convertible Securities) be deemed to be outstanding and to have been issued for said price per share as so determined; provided, that no further adjustment of the Note Conversion Price shall be made upon the actual issue of Common Stock so deemed to have been issued, and, further provided, that if any such issue or sale of such Convertible Securities is made upon exercise of any right to subscribe for or to purchase or any option to purchase any such Convertible Securities for which an adjustment of the Note Conversion Price has been or is to be made pursuant to other provisions of this subsection 6.4(a) no further adjustment of the Note Conversion Price shall be made by reason of such issue or sale; and, further provided. that, upon the termination of the right to convert or to exchange such Convertible Securities for Common Stock, (a) the number of shares of Common Stock deemed to have been issued and outstanding by reason of the fact that they were issuable upon conversion or exchange of any such Convertible Securities, which were not so converted or exchanged, shall no longer be deemed to be issued and outstanding, and (b) the Note Conversion Price shall forthwith be adjusted to the price which would have prevailed had all adjustments been made on the basis of the issue only of the number of shares of Common Stock actually issued upon conversion or exchange of such Convertible Securities.

 

(3) Determination of Issue Price. In case any shares of Common Stock or Convertible Securities or any rights or options to purchase any such stock or securities shall be issued for cash, the consideration received therefor, after deducting therefrom any commission or other expenses paid or incurred by the Company for any underwriting of, or otherwise in connection with, the issuance thereof, shall be deemed to be the amount received by the Company therefor. in case any shares of Common Stock or Convertible Securities or any rights or options to purchase any such stock or securities shall be issued for a consideration part or all of which shall be other than cash, then, for the purpose of this subsection 6.4 (a), the Board of Directors of the Company shall make a good faith determination of the fair value of such consideration, irrespective of accounting treatment, and such Common Stock, Convertible Securities, rights or options shall be deemed to have been issued for an amount of cash equal to the value so determined by the Board of Directors. The reclassification of securities other than Common Stock into securities including Common Stock shall be deemed to involve the issuance for a consideration other than cash of such Common Stock immediately prior to the close of business on the date fixed for the determination of security holders entitled to receive such Common Stock. In case any shares of Common Stock or Convertible Securities or any rights or options to purchase any such stock or other securities shall be issued together with other stock or securities or other assets of the Company for a consideration which includes both, the Board of Directors of the Company shall determine what part of the consideration so received is to be deemed to be consideration for the issue of such shares of such Common Stock, Convertible Securities, rights or options.

 

3

  

(4) Determination of Date of Issue. In case the Company shall take a record of the holders of any Common Stock for the purpose of entitling them (i) to receive a dividend or other distribution payable in Common Stock or in Convertible Securities, or (ii) to subscribe for or purchase Common Stock or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

(5) Treasury Shares. For the purpose of this subsection 4.4(a), shares of Common Stock at any relevant time owned or held by or for the account of the Company shall not be deemed outstanding.

 

(b) Adjustment of Number of Shares. Anything in this Section 4.4 to the contrary notwithstanding, in case the Company shall at any time issue Common Stock or Convertible Securities by way of dividend or other distribution on any stock of the Company or subdivide or combine the outstanding shares of Common Stock, the Note Conversion Price shall be proportionately decreased in the case of such issuance (on the day following the date fixed for determining shareholders entitled to receive such dividend or other distribution) or decreased in the case of such subdivision or increased in the case of such combination (on the date that such subdivision or combination shall become effective).

 

(c) No Adjustment for Small Amounts. Anything in this Section 4.4 to the contrary notwithstanding, the Company shall not be required to give effect to any adjustment in the Note Conversion Price unless and until the net effect of one or more adjustments, determined as above provided, shall have required a change of the Note Conversion Price by at least one cent, but when the cumulative net effect of more than one adjustment so determined shall be to change the actual Note Conversion Price by at least one cent, such change in the Note Conversion Price shall thereupon be given effect.

 

(d) Number of Shares Adjusted. Upon any adjustment of the Note Conversion Price, the Holder shall thereafter (until another such adjustment) be entitled to purchase, at the new Note Conversion Price, the number of shares, calculated to the nearest full share, obtained by multiplying the number of shares of Common Stock initially issuable upon conversion of this Note by the Note Conversion Price in effect on the date hereof and dividing the product so obtained by the new Note Conversion Price.

 

4.5  No Fractional Shares.  No fractional shares of Common Stock shall be issued upon conversion of this Note.  In lieu of the Company issuing any fractional shares to the Holder upon the conversion of this Note, the Company shall pay to the Holder the amount of outstanding principal and interest hereunder that is not so converted.

 

6.  Representations, Warranties and Covenants of the Company.  The Company represents, warrants and covenants with the Holder as follows:

 

(a)  Authorization; Enforceability.  All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Note and the performance of all obligations of the Company hereunder has been taken, and this Note constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

 

(b)  Governmental Consents.  No consent, approval, qualification, order or authorization of, or filing with, any local, state or federal governmental authority is required on the part of the Company in connection with the Company's valid execution, delivery or performance of this Note except any notices required to be filed with the Securities and Exchange Commission under Regulation D of the Securities Act of 1933, as amended (the "1933 Act"), or such filings as may be required under applicable state securities laws, which will be timely filed within the applicable periods therefor.

 

(c)  No Violation.  The execution, delivery and performance by the Company of this Note and the consummation of the transactions contemplated hereby will not result in a violation of its Certificate of Incorporation or Bylaws, in any material respect of any provision of any mortgage, agreement, instrument or contract to which it is a party or by which it is bound or, to the best of its knowledge, of any federal or state judgment, order, writ, decree, statute, rule or regulation applicable to the Company or be in material conflict with or constitute, with or without the passage of time or giving of notice, either a material default under any such provision or an event that results in the creation of any material lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its business or operations, or any of its assets or properties.

 

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7.  Representations and Covenants of the Holder.  The Company has entered into this Note in reliance upon the following representations and covenants of the Holder:

 

(a)  Investment Purpose.  This Note and the Common Stock issuable upon conversion of the Note are acquired for investment and not with a view to the sale or distribution of any part thereof, and the Holder has no present intention of selling or engaging in any public distribution of the same except pursuant to a registration or exemption.

 

(b)  Private Issue.  The Holder understands (i) that this Note and the Common Stock issuable upon conversion of this Note are not registered under the 1933 Act or qualified under applicable state securities laws, and (ii) that the Company is relying on an exemption from registration predicated on the representations set forth in this Section 7.

 

(c)  Financial Risk.  The Holder has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment.

 

(d)  Risk of No Registration.  The Holder understands that if the Company does not register with the Securities and Exchange Commission pursuant to Section 12 of the Securities Exchange Act of 1934 (the "1934 Act"), or file reports pursuant to Section 15(d) of the 1934 Act, or if a registration statement covering the securities under the 1933 Act is not in effect when it desires to sell the Common Stock issuable upon conversion of the Note, it may be required to hold such securities for an indefinite period.  The Holder also understands that any sale of the Note or the Common Stock which might be made by it in reliance upon Rule 144 under the 1933 Act may be made only in accordance with the terms and conditions of that Rule.

 

8.  Assignment.  Subject to the restrictions on transfer described in Section 12 below, the rights and obligations of the Company and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

9.  Waiver and Amendment.  Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.

 

10.  No Other Notes.  The parties hereto agree that this Note shall supercede any and all Notes previously issued by the Company to the Holder.

 

11.  Transfer of This Note or Securities Issuable on Conversion Hereof.  With respect to any offer, sale or other disposition of this Note or securities into which this Note may be converted, the Holder will give written notice to the Company prior thereto, describing briefly the manner thereof.  Unless the Company reasonably determines that such transfer would violate applicable securities laws, or that such transfer would adversely affect the Company's ability to account for future transactions to which it is a party as a pooling of interests, and notifies the Holder thereof within five (5) business days after receiving notice of the transfer, the Holder may effect such transfer.  Each Note thus transferred and each certificate representing the securities thus transferred shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with the 1933 Act, unless in the opinion of counsel for the Company such legend is not required in order to ensure compliance with the 1933 Act.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

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12.  Notices.  Any notice, other communication or payment required or permitted hereunder shall be in writing and shall be deemed to have been given upon delivery if personally delivered or three (3) business days after deposit if deposited in the United States mail for mailing by certified mail, postage prepaid.

 

13.  Governing Law.  This Note is being delivered in and shall be construed in accordance with the laws of the State of Delaware, without regard to the conflicts of laws provisions thereof.

 

14.  Heading; References.  All headings used herein are used for convenience only and shall not be used to construe or interpret this Note.  Except as otherwise indicated, all references herein to Sections refer to Sections hereof.

 

15.  Waiver by the Company.  The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

 

16.  Delays.  No delay by the Holder in exercising any power or right hereunder shall operate as a waiver of any power or right.

 

17.  Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision was so excluded and shall be enforceable in accordance with its terms.

 

18.  No Impairment.  The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holders of this Note against impairment.

 

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IN WITNESS WHEREOF, Secure Luggage has caused this Note to be executed in its corporate name and this Note to be dated, issued and delivered, all on the date first above written.

 

 

	SECURE LUGGAGE SOLUTIONS INC.
Date: October __, 2014	By
		Donald Bauer, President
	INVESTOR
Date: October __, 2014
		Raoul Taylor

 

 7

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EXHIBIT 31.1

 

CERTIFICATIONS

 

I, Don Bauer, certify that

 

1.	I have reviewed this quarterly report on Form 10-Q of Secure Luggage Solutions Inc.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

 

c)

evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 21, 2014	By:	/s/ Don Bauer
	Name:	Don Bauer
	Title:	Chief Executive Officer/Principal Executive Officer

 

EXHIBIT 31.2

 

CERTIFICATIONS

 

I, Don Bauer, certify that

 

1.	I have reviewed this quarterly report on Form 10-Q of Secure Luggage Solutions Inc.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

 

c)

evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 21, 2014	By:	/s/ Don Bauer
	Name:	Don Bauer
	Title:	Chief Financial Officer/Principal Financial Officer

 

EXHIBIT 32.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the accompanying Quarterly Report on Form 10-Q of Secure Luggage Solutions Inc. for the period ending June 30, 2014, I, Don Bauer, Chief Executive Officer (Principal Executive Officer/Principal Financial Officer) and Chief Financial Officer (Principal Financial Officer) of Secure Luggage Solutions Inc. hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

 

1.

Such Quarterly Report on Form 10-Q for the period ending June 30, 2014, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in such Quarterly Report on Form 10-Q for the period ending June 30, 2014 fairly presents, in all material respects, the financial condition and results of operations of Secure Luggage Solutions Inc.

 

Date: October 21, 2014	By:	/s/ Don Bauer
		Don Bauer
		President/Chief Executive Officer (Principal Executive Officer/Principal Financial Officer)
Date: October 21, 2014	By:	/s/ Don Bauer
		Don Bauer
		Chief Financial Officer (Principal Financial Officer)