As filed with the Securities and Exchange Commission on Registration No._333-193924

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Amendment No. 1

FORM S-1

 

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

 

IIM GLOBAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware   7375   46-2069547
State or other jurisdiction   Primary Standard Industrial   (I.R.S. Employer
incorporation or organization   Classification Code Number)   Identification Number)

 

160 E. Lake Brantley Drive

Longwood, Florida 32779

(407) 674-2651

(Address, including zip code, and telephone number, including area code

of registrant’s principal executive offices)

 

David S. Jones

160 E. Lake Brantley Drive

Longwood, Florida 32779

(815) 353-9434

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

 

with copies to

Lee W. Cassidy, Esq.

Anthony A. Patel, Esq.

Cassidy & Associates

9454 Wilshire Boulevard

Beverly Hills, California 90212

(202) 387-5400 (949) 673-4525 (fax)

 

Approximate Date of Commencement  of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions “large accelerated filer,”“accelerated file,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

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

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said section 8(a), may determine.

 

CALCULATION OF REGISTRATION FEE

 

        Proposed     Proposed        
    Amount   Maximum     Maximum     Amount of  
Title of Each Class of   to be   Offering Price     Aggregate     Registration  
Securities to be Registered   Registered   Per Unit (1)     Offering Price     Fee (2)  
Common Stock held by Selling Shareholders   50,573,987 shares   $ 0.60     $ 30,344,392     $ 3,909  

 

(1)               There is no current market for the securities and the price at which the Shares are being offered has been arbitrarily determined by the Company and used for the purpose of computing the amount of the registration fee in accordance with Rule 457 under the Securities Act of 1933, as amended.

(2)               $4,534 previously paid by electronic transfer.

 

EXPLANATORY NOTE

 

This registration statement and the prospectus therein covers the registration of 50,573,987 shares of common stock offered by the holders thereof.

 

 
 

 

The information contained in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and these securities may not be sold until that registration statement becomes effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

 

PROSPECTUS Subject to Completion, Dated ______, 2014

 

IIM GLOBAL CORPORATION

50,573,987 shares of Common Stock offered by selling shareholders at $0.60 per share

 

This prospectus relates to the offer and sale of 50,573,987 shares of common stock (the “Shares”) of IIM Global Corporation (the “Company”), $0.0001 par value per share, offered by the holders thereof (the “Selling Shareholder Shares”), who are deemed to be statutory underwriters. The selling shareholders will offer their shares at a price of $0.60 per share, until the Company's common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker's transactions, privately-negotiated transactions or through sales to one or more dealers for resale.

 

The maximum number of Shares that can be sold pursuant to the terms of this offering by the selling shareholders is (in aggregate) 50,573,987. Funds received by the selling shareholders will be immediately available to such selling shareholders for use by them. The Company will not receive any proceeds from the sale of the Selling Shareholder Shares.

 

The offering will terminate twenty-four (24) months from the date that the registration statement relating to the Shares is declared effective, unless earlier fully subscribed or terminated by the Company. The Company intends to maintain the current status and accuracy of this prospectus and to allow selling shareholders to offer and sell the Shares for a period of up to two (2) years, unless earlier completely sold, pursuant to Rule 415 of the General Rules and Regulations of the Securities and Exchange Commission. All costs incurred in the registration of the Shares are being borne by the Company.

 

Prior to this offering, there has been no public market for the Company’s common stock. No assurances can be given that a public market will develop following completion of this offering or that, if a market does develop, it will be sustained. The offering price for the Shares has been arbitrarily determined by the Company and does not necessarily bear any direct relationship to the assets, operations, book or other established criteria of value of the Company. The Shares will become tradable on the effective date of the registration statement of which this prospectus is a part.

 

Neither the Company nor any selling shareholders has any current arrangements nor entered into any agreements with any underwriters, broker-dealers or selling agents for the sale of the Shares. If the Company or selling shareholders can locate and enter into any such arrangement(s), the Shares will be sold through such licensed underwriter(s), broker-dealer(s) and/or selling agent(s).

 

  Assumed Price
  To Public
Per Common Stock Share Offered $0.60 per share

 

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act.

 

These securities involve a high degree of risk. See “RISK FACTORS” contained in this prospectus beginning on page 6.

 

IIM Global Corporation

160 E. Lake Brantley Drive

Longwood, Florida 32779

(407) 674-2651

 

Prospectus dated __________________, 2014

 

2
 

 

TABLE OF CONTENTS

 

Prospectus Summary 4
Risk Factors 6
Forward-Looking Statements 11
Determination of Offering Price 12
Dividend Policy 12
Selling Shareholders Sales 12
Plan of Distribution 12
Description of Securities 13
The Business 14
The Company 18
Plan of Operation 23
Management's Discussion and Analysis of Financial Condition and Results of Operations 24
Management 26
Executive Compensation 28
Security Ownership of Certain Beneficial Owners and Management 30
Certain Relationships and Related Transactions 30
Selling Shareholders 30
Shares Eligible for Future Sales 32
Legal Matters 32
Experts 33
Disclosure of Commission Position of Indemnification for Securities Act Liabilities 33
Financial Statements F-1

 

 

 

3
 

 

PROSPECTUS SUMMARY

 

This summary highlights some information from this prospectus, and it may not contain all the information important to making an investment decision. A potential investor should read the following summary together with the more detailed information regarding the Company and the common stock being sold in this offering, including “Risk Factors” and the financial statements and related notes, included elsewhere in this prospectus.

 

The Company

 

History

 

IIM Global Corporation, a Delaware corporation (the “Company”), provides innovative technology solutions. The Company operates in two technology fields: the handheld identification market and mobile payment market. The Company was incorporated in the State of Delaware in September 2011, and was formerly known as Silverwood Acquisition Corporation (“Silverwood” or “Silverwood Acquisition”).

 

In December 2012, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the Company changed its name from Silverwood Acquisition Corporation to IIM Global Corporation.

 

On August 12, 2013, the Company acquired Innovation in Motion Inc., a Florida corporation (“Innovation in Motion”), in a stock-for-stock transaction (the “Acquisition”). The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities. Innovation in Motion was formed in April 2009 in the State of Florida.

 

Prior to the Acquisition, Silverwood had no ongoing business or operations and was established for the purpose of completing a business combination with target companies, such as Innovation in Motion. As a result of the Acquisition, Innovation in Motion became a wholly owned subsidiary of the Company. The Company, as the sole shareholder of Innovation in Motion, has taken over the operations and business plans of Innovation in Motion.

 

The Company is located at 160 E. Lake Brantley Drive, Longwood, Florida 32779. The Company’s main phone number is (407) 674-2651.

 

Business

 

The Company provides handheld mobile biometric devices which are used primarily by government and law enforcement agencies to capture and process the unique characteristics of individuals to verify their identities. Additionally, the Company has recently introduced a new highly secured biometric wallet device to store personal data including credit card and banking information to be used in a variety of transactions.  The Company has a business focus in the identification, security and mobile payment businesses, and it had its technology used during the election process in Ghana, Africa. The Company has a range of state-of-the-art products in these fields and has built a series of strategic partnerships. The Company intends to expand its sales and marketing penetration through its existing relationships, as well as the development and implementation of a marketing strategy.

 

Risks and Uncertainties facing the Company

 

The Company did not earn revenues during the three months ended March 31, 2014 or the year ended December 31, 2013, respectively, and the Company may experience losses in the near term. The Company needs to maintain a steady operating structure, ensuring that expenses are contained such that profits are consistently achieved. In order to expand the Company’s business, the Company would likely require additional financing. As an early-stage company, management of the Company must continually develop and refine its strategies and goals in order to execute the business plan of the Company on a broad scale and expand the business.

 

One of the biggest challenges facing the Company will be in securing adequate capital to continue to expand its business and build a larger scale and more efficient set of operations. Secondarily, an ongoing challenge remains the maintenance of an efficient operating structure and business model. The Company must keep its expenses and the costs of employees at a minimum in order to generate a profit from the revenues that it receives. Third, in order to expand, the Company will need to continue implementing effective sales, marketing and distribution strategies to reach the intended end customers. The Company has devised its initial sales, marketing and advertising strategies, however, the Company will need to continue refinement of these strategies and also skillfully implement these plans in order to achieve ongoing and long-term success in its business. Fourth, the Company must continuously identify, attract, solicit and manage employee talent, which requires the Company to consistently recruit, incent and monitor various employees.

 

4
 

 

Due to financial constraints and the early stage of the Company’s life, the Company has to date conducted limited advertising and marketing to reach customers. In addition, the Company has not yet located the sources of funding to develop the Company on a broader scale through acquisitions or other major partnerships. If the Company were unable to locate such financing and/or later develop strong and reliable sources of potential customers and a means to efficiently reach buyers and customers, it is unlikely that the Company could develop its operations to return revenue sufficient to further develop its business plan.

 

Due to these and other factors, the Company’s need for additional capital, the Company’s independent auditors have issued a report raising substantial doubt of the Company’s ability to continue as a going concern.

 

Trading Market

 

Currently, there is no trading market for the securities of the Company. The Company intends to work with market-makers for its securities that will apply for quotation of its common stock on the OTC Bulletin Board. However, the Company does not know if any such application will be made and whether it will be successful if made, how long such application will take, or, that if successful, that a market for the common stock will ever develop or continue on the OTC Bulletin Board. There can be no assurance that the Company will qualify for quotation of its securities on the OTC Bulletin Board. See “RISK FACTORS” and “DESCRIPTION OF SECURITIES”.

 

The Offering

 

The maximum number of Shares that can be sold pursuant to the terms of this offering is 50,573,987. The offering will terminate twenty-four (24) months from the date of this prospectus unless earlier fully subscribed or terminated by the Company.

 

This prospectus relates to the offer and sale by certain shareholders of the Company of up to 50,573,987 Shares (the “Selling Shareholder Shares”). The selling shareholders, who are deemed to be statutory underwriters, will offer their shares at a price of $0.60 per share, until the Company's common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker's transactions, privately-negotiated transactions or through sales to one or more dealers for resale

 

Common stock outstanding before the offering     160,623,289  
         
Common stock for sale by selling shareholders     50,573,987  
         
Common stock outstanding after the offering     160,623,289  
         
Offering Price     $0.60 per share  
         
Proceeds to the Company   $ 0  

 

(1) Based on number of shares outstanding as of the date of this prospectus.

 

Summary Financial Information

 

The Company had no operations or specific business plan until the Acquisition. As the Company had no operations or specific business plan until the Acquisition, the information presented below is with respect to Innovation in Motion, which was acquired by the Company in August 2013 as a result of the Acquisition.

 

The statements of operations data for the years ended December 31, 2013 and December 31, 2012, respectively, and the balance sheet data as of December 31, 2013 and at December 2012, respectively, are derived from the audited financial statements of the Company and related notes thereto included herewith. The statement of operations data for the three months ended March 31, 2014 provided below is derived from the unaudited financial statements of the Company and related notes thereto included elsewhere in this prospectus.

 

    Three months ended     Year ended     Year ended  
    March 31, 2014     December 31, 2013     December 31, 2012  
    (unaudited)              
Statement of operations data                        
Revenue   $ 0     $ 0     $ 7,695,067  
Gross profit   $ 0     $ 0     $ 1,194,872  
Income (Loss) from operations   $ (112,274 )   $ (971,455 )   $ 192,313  
Net income (loss)   $ (121,824 )   $ (976,238 )   $ 192,313  

 

5
 

 

    At March 31, 2014     At December 31, 2013     At December 31, 2012  
Balance sheet data                        
Cash   $ 221,351     $ 5,349     $ 17,568  
Other assets   $ 531,522     $ 543,157     $ 361,749  
Total assets   $ 752,873     $ 548,506     $ 379,317  
Total liabilities   $ 617,491     $ 291,300     $ 103,608  

Total stockholders’ equity (deficit)

  $ 135,382     $ 257,206     $ 275,709  

 

RISK FACTORS

 

A purchase of any Shares is an investment in the Company’s common stock and involves a high degree of risk. Investors should consider carefully the following information about these risks, together with the other information contained in this prospectus, before the purchase of the Shares. If any of the following risks actually occur, the business, financial condition or results of operations of the Company would likely suffer. In this case, the market price of the common stock could decline, and investors may lose all or part of the money they paid to buy the Shares.

 

The Company has generated revenues, but limited profits, to date .

 

The Company has generated limited profits to date. The business model of the Company involves significant costs, resulting in a low margin on revenues. Coupling this fact with operating expenses incurred by the Company, the Company has only generated a small amount of total profits in the past. The Company hopes that as its business expands that the scale of the enterprise would result in a higher gross margin and net margin.

 

There can be no assurance that the Company will successfully commercialize its product or sustain market acceptance.

 

There is no assurance that the Company will ever successfully commercial its product or that the Company will experience a positive market reception. There is no assurance that the Company’s products or solutions will continue to meet with market acceptance. Moreover, there is no assurance that these products and solutions will continue to have any competitive advantages. There can be no guarantee that the Company will not lose business to its existing or potential new competitors.

 

The Company’s independent auditors have issued a report raising a substantial doubt of the Company’s ability to continue as a going concern.

 

The Company’s independent auditors have issued a comment that unless the Company is able to generate sufficient cash flows from operations and/or obtain additional financing, there is a substantial doubt as to its ability to continue as a going concern.

 

The Company is an early-stage company with a limited operating history, and as such, any prospective investor may have difficulty in assessing the Company’s profitability or performance.

 

Because the Company is an early-stage company with a limited operating history, it could be difficult for any investor to assess the performance of the Company or to determine whether the Company will meet its projected business plan. The Company has limited financial results upon which an investor may judge its potential. As a company still in the early stages of its life, the Company may in the future experience under-capitalization, shortages, setbacks and many of the problems, delays and expenses encountered by any early-stage business. An investor will be required to make an investment decision based solely on the Company management’s history, its projected operations in light of the risks, the limited operations and financial results of the Company to date, and any expenses and uncertainties that may be encountered by one engaging in the Company’s industry.

 

The Company is an early-stage company and has little experience in being a public company.

 

The Company is an early-stage company and as such has little experience in managing a public company. Such lack of experience may result in the Company experiencing difficulty in adequately operating and growing its business. Further, the Company may be hampered by lack of experience in addressing the issues and considerations which are common to growing companies. If the Company’s operating or management abilities consistently perform below expectations, the Company’s business is unlikely to thrive.

 

6
 

 

Reliance on third party agreements and relationships is necessary for development of the Company's business.

 

The Company will need strong third party relationships and partnerships in order to develop and grow its business. The Company will be substantially dependent on these strategic partners and third party relationships.

 

The Company expects to incur additional expenses and may ultimately never be profitable.

 

The Company is an early-stage company and has a limited history of its operations. The Company will need to continue generating revenue in order to maintain sustained profitability. Ultimately, in spite of the Company’s best or reasonable efforts, the Company may have difficulty in generating revenues or remaining profitable.

 

The Company’s officers and directors beneficially own a majority of the Company’s common stock and, as a result, can exercise control over stockholder and corporate actions.

 

The officers and directors of the Company currently beneficially own more than a majority of the Company’s outstanding common stock. As such, they control most matters requiring approval by stockholders, including the election of directors and approval of significant corporate transactions. This concentration of ownership may also have the effect of delaying or preventing a change in control, which in turn could have a material adverse effect on the market price of the Company’s common stock or prevent stockholders from realizing a premium over the market price for their Shares.

 

The Company depends on its management team to manage its business effectively.

 

The Company's future success is dependent in large part upon its ability to understand and develop the business plan and to attract and retain highly skilled management, operational and executive personnel. In particular, due to the relatively early stage of the Company's business, its future success is highly dependent on its officers, to provide the necessary experience and background to execute the Company's business plan. The loss of any officer’s services could impede, particularly initially as the Company builds a record and reputation, its ability to develop its objectives, and as such would negatively impact the Company's possible overall development.

 

Government regulation could negatively impact the business.

 

The Company’s business segments may be subject to various government regulations in the jurisdictions in which they operate. Due to the potential wide scope of the Company’s operations, the Company could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. The Company may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply. The Company’s operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to its business or industry.

 

The Company may face significant competition from companies that serve its industries.

 

The Company may face competition from other companies that offer similar solutions. Some of these potential competitors may have longer operating histories, greater brand recognition, larger client bases and significantly greater financial, technical and marketing resources than the Company possesses. These advantages may enable such competitors to respond more quickly to new or emerging trends and changes in customer preferences. These advantages may also allow them to engage in more extensive market research and development, undertake extensive far-reaching marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to potential customers, employees and strategic partners. The Company believes that its current and anticipated solutions are, and will be, sufficiently different from existing competition, and that there is limited to no competition in its local area. However, it is nevertheless possible that potential competitors may have or may rapidly acquire significant market share. Increased competition may result in price reductions, reduced gross margin and loss of market share. The Company may not be able to compete successfully, and competitive pressures may adversely affect its business, results of operations and financial condition.

 

No formal market survey has been conducted .

 

No independent marketing survey has been performed to determine the potential demand for the Company’s products over the longer term. The Company has conducted no marketing studies regarding whether its business would continue to be marketable. No assurances can be given that upon marketing, sufficient customer markets and business segments can be developed to sustain the Company's operations on a continued basis.

 

7
 

 

The Company does not maintain certain insurance, including errors and omissions and indemnification insurance.

 

The Company has limited capital and, therefore, does not currently have a policy of insurance against liabilities arising out of the negligence of its officers and directors and/or deficiencies in any of its business operations. Even assuming that the Company obtained insurance, there is no assurance that such insurance coverage would be adequate to satisfy any potential claims made against the Company, its officers and directors, or its business operations. Any such liability which might arise could be substantial and may exceed the assets of the Company. The certificate of incorporation and by-laws of the Company provide for indemnification of officers and directors to the fullest extent permitted under Delaware law. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons, it is the opinion of the Securities and Exchange Commission that such indemnification is against public policy, as expressed in the Act, and is therefore, unenforceable.

 

Intellectual property and/or trade secret protection may be inadequate .

 

The Company has applied for intellectual property and trade secret protection in aspects of its business. There can be no assurance that the Company can obtain effective protection against unauthorized duplication or the introduction of substantially similar solutions and services. Further, there is no guarantee that current patents and other intellectual property adequately protect the Company or its business and operations.

 

The Company is subject to the potential factors of market and customer changes that could adversely affect the Company .

 

The business of the Company is susceptible to rapidly changing preferences of the marketplace and its customers. The needs of customers are subject to constant change, as technology needs are as quick to change as are the businesses of customers. Although the Company intends to continue to develop and improve its services to meet changing customer needs of the marketplace, there can be no assurance that funds for such expenditures will be available or that the Company's competition will not develop similar or superior capabilities or that the Company will be successful in its internal efforts. The future success of the Company will depend in part on its ability to respond effectively to rapidly changing trends, industry standards and customer requirements by adapting and improving the features and functions of its services. In the Company’s industry, failure by a business to adapt to the changing needs and demands of customers is likely to render the business obsolete.

 

The Company plans to issue convertible preferred stock designated by the board of directors which will have substantial rights and preferences that are senior to and above the common stock of the Company

 

At present, the board of directors has approved a plan to issue convertible preferred stock to certain shareholders. Each share of preferred stock is entitled to 100 votes on all matters on which shareholders are entitled to vote. While there is no fixed time when the designated shares of preferred stock will be issued, the Company currently anticipates that it will issue these shares to its current officers and directors promptly (i.e. within 90 days after the instant registration statement becomes effective).

 

Except as required by law, the affirmative vote of shareholders of a majority of the issued and outstanding shares of the preferred stock shall decide any matter submitted to such holders, including with respect to amending the certificate of incorporation, a merger of the Company or disposing of the Company’s assets. The preferred stock will rank senior and above the common stock of the Company with respect to payment of dividends, redemption payments and rights upon liquidation, dissolution or winding up of the Company. The board of directors may, at its discretion, vote to declare dividends to holders of the preferred stock at a rate and at a time to be fixed by the board of directors. In the event of any liquidation, dissolution or winding up of the Company, the holders of preferred stock will be entitled to receive a pro rata distribution of the Company’s funds or assets based upon voting rights of each such shares held by holders of the preferred stock and any other capital stock of the Company.

 

The contemplated preferred stock is designed to give voting control over the Company to its affiliates, officers and directors, at the discretion of the Company’s board of directors.

 

The Company anticipates issuing preferred stock to its affiliates, officers and directors in order to retain voting control of the Company. The Company’s board of directors has the ability to give itself and the Company’s officers and affiliates voting control over the Company through any such issuances of preferred stock.

 

The Company is an early-stage organization and has a correspondingly small financial and accounting organization. Being a public company may strain the Company's resources, divert management’s attention and affect its ability to attract and retain qualified officers and directors.

 

The Company is an early-stage company with no developed finance and accounting organization and the rigorous demands of being a public company require a structured and developed finance and accounting group. As a reporting company, the Company is already subject to the reporting requirements of the Securities Exchange Act of 1934. However, the requirements of these laws and the rules and regulations promulgated thereunder entail significant accounting, legal and financial compliance costs which may be prohibitive to the Company as it develops its business plan, services and scope.. These costs have made, and will continue to make, some activities more difficult, time consuming or costly and may place significant strain on its personnel, systems and resources.

 

8
 

 

The Securities Exchange Act requires, among other things, that companies maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain the requisite disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight are required. As a result, management’s attention may be diverted from other business concerns, which could have a material adverse effect on the development of the Company's business, financial condition and results of operations.

 

These rules and regulations may also make it difficult and expensive for the Company to obtain director and officer liability insurance. If the Company is unable to obtain adequate director and officer insurance, its ability to recruit and retain qualified officers and directors, especially those directors who may be deemed independent, will be significantly curtailed.

 

There is no assurance that the Company will be able to establish or expand its market presence through successful acquisitions.

 

The ability of the Company to grow through acquisitions (as planned) will depend on a number of factors, including competition for acquisitions, the availability of capital and other resources to consummate acquisitions, and the ability to successfully integrate and train additional staff, including the staff of an acquired company. There can be no assurance that the Company will continue to be able to establish and expand its market presence or to successfully identify suitable acquisition candidates and complete acquisitions on favorable terms.

 

In addition to facing competition in identifying and consummating successful acquisitions, such acquisitions could involve significant risks, including:

 

-difficulties in the assimilation of the operations, services, and corporate culture of acquired companies, and higher-than-anticipated costs associated with such assimilation;

 

-over-valuation of acquired companies or delays in realizing or a failure to realize the benefits, revenues, cost savings, and synergies that were anticipated;

 

-difficulties in integrating the acquired business into information systems, controls, policies, and procedures;

 

-failure to retain key personnel, business relationships, reputation, or clients of an acquired business;

 

-the potential impairment of acquired assets;

 

-diversion of management’s attention from other business activities;

 

-insufficient indemnification from the selling parties for legal liabilities incurred by the acquired companies prior to acquisition;

 

-the assumption of unknown liabilities and additional risks of the acquired business; and

 

-unforeseen operating difficulties that require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of existing operations.

 

In addition, future acquisitions could materially and adversely affect the Company’s business, financial condition, results of operations, and liquidity. Possible impairment losses on goodwill and intangible assets, or restructuring charges could occur. These risks could have a material adverse effect on the business because they may result in substantial costs to the Company and disrupt its business.

 

9
 

 

There has been no prior public market for the Company’s securities and the lack of such a market may make resale of the stock difficult.

 

No prior public market has existed for the Company’s securities and the Company cannot assure any investor that a market will develop subsequent to this offering. An investor must be fully aware of the long-term nature of an investment in the Company. The Company intends to work with market-makers for its securities that will apply for quotation of its common stock on the OTC Bulletin Board.. However, the Company does not know if any such application will be made and whether it will be successful if made, how long such application will take, or, that if successful, that a market for the common stock will ever develop or continue on the OTC Bulletin Board. If for any reason the common stock is not listed on the OTC Bulletin Board or a public trading market does not otherwise develop, investors in the offering may have difficulty selling their common stock should they desire to do so. If the application for quotation on the OTC Bulletin Board is not successful, the Company may seek to have its securities quoted by the Pink OTC Markets, Inc., real-time quotation service for over-the-counter equities.

 

Shares of common stock in the Company are subject to resale restrictions imposed by Rule 144 of the Securities and Exchange Commission .

 

The shares of common stock held by current shareholders are “restricted securities” subject to the limitations of Rule 144 under the Securities Act. In general, securities can be sold pursuant to Rule 144 after being fully-paid and held for more than 12 months. Shares of the Company’s common stock are subject to Rule 144 resale restrictions, and accordingly, investors are subject to such resale limitations.

 

The Company does not intend to pay dividends to its stockholders, so investors will not receive any return on investment in the Company prior to selling their interest in it.

 

The Company does not project paying dividends but anticipates that it will retain future earnings for funding the Company’s growth and development. Therefore, investors should not expect the Company to pay dividends in the foreseeable future. As a result, investors will not receive any return on their investment prior to selling their Shares in the Company, if and when a market for such Shares develops. Furthermore, even if a market for the Company’s securities does develop, there is no guarantee that the market price for the shares would be equal to or more than the initial per share investment price paid by any investor. There is a possibility that the Shares could lose all or a significant portion of their value from the initial price paid in this offering.

 

The Company’s stock may be considered a penny stock and any investment in the Company’s stock will be considered a high-risk investment and subject to restrictions on marketability.

 

If the Shares commence trading, the trading price of the Company's common stock may be below $5.00 per share. If the price of the common stock is below such level, trading in its common stock would be subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as amended. These rules require additional disclosure by broker-dealers in connection with any trades generally involving any non-NASDAQ equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Such rules require the delivery, before any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith, and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally institutions). For these types of transactions, the broker-dealer must determine the suitability of the penny stock for the purchaser and receive the purchaser’s written consent to the transactions before sale. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in the Company’s common stock which could impact the liquidity of the Company’s common stock.

 

The Company's election not to opt out of JOBS Act extended accounting transition period may not make its financial statements easily comparable to other companies.

 

Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company's financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

The recently enacted JOBS Act will also allow the Company to postpone the date by which it must comply with certain laws and regulations intended to protect investors and to reduce the amount of information provided in reports filed with the SEC.

 

The recently enacted JOBS Act is intended to reduce the regulatory burden on “emerging growth companies. The Company meets the definition of an emerging growth company and so long as it qualifies as an “emerging growth company,” it will, among other things:

 

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-be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting;

 

-be exempt from the “say on pay” provisions (requiring a non-binding shareholder vote to approve compensation of certain executive officers) and the “say on golden parachute” provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements for certain executive officers in connection with mergers and certain other business combinations) of the Dodd-Frank Act and certain disclosure requirements of the Dodd- Frank Act relating to compensation of its chief executive officer;

 

-be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934 and instead provide a reduced level of disclosure concerning executive compensation; and

 

-be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report on the financial statements.

 

Although the Company is still evaluating the JOBS Act, it currently intends to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. (See “Jumpstart Our Business Startups Act” contained in this prospectus beginning on page 22, for a description of when a company may lose “emerging growth company” status.) The Company has elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Among other things, this means that the Company's independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of the Company's internal control over financial reporting so long as it qualifies as an emerging growth company, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an emerging growth company, the Company may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers that would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidence in the Company and the market price of its common stock may be adversely affected.

 

The offering price of the Shares has been arbitrarily determined by the Company and such offering should not be used by an investor as an indicator of the fair market value of the Shares .

 

Currently there is no public market for the Company’s common stock. The offering price for the Shares has been arbitrarily determined by the Company and does not necessarily bear any direct relationship to the assets, operations, book or other established criteria of value of the Company. Thus an investor should be aware that the offering price does not reflect the fair market price of the Shares.

 

The Company may complete a primary public offering (or private placement) for Shares in parallel with or immediately following this offering .

 

The Company may conduct a primary public offering (or private placement) for Shares to raise proceeds for the Company. Such an offering may be conducted in parallel with or immediately following this offering. Sales of additional Shares will dilute the percentage ownership of shareholders in the Company.

 

 

Forward-Looking Statements

 

This prospectus contains, in addition to historical information, certain information, assumptions and discussions that may constitute forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially than those projected or anticipated. Actual results could differ materially from those projected in the forward-looking statements. Although the Company believes its assumptions underlying the forward-looking statements are reasonable, the Company cannot assure an investor that the forward-looking statements set out in this prospectus will prove to be accurate. The Company’s businesses can be affected by, without limitation, such things as natural disasters, economic trends, international strife or upheavals, consumer demand patterns, labor relations, existing and new competition, consolidation, and growth patterns within the industries in which the Company competes and any deterioration in the economy may individually or in combination impact future results.

 

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DETERMINATION OF OFFERING PRICE

 

There is no public market for the Company’s common stock and the price at which the Shares are being offered has been arbitrarily determined by the Company. This price does not necessarily bear any direct relationship to the assets, operations, book or other established criteria of value of the Company but represents solely the arbitrary opinion of management of the Company.

 

DIVIDEND POLICY

 

The Company does not anticipate that it will declare dividends in the foreseeable future but rather intends to use any future earnings for the development of its business.

 

SELLING SHAREHOLDER SALES

 

This prospectus relates to the sale of 50,573,987 outstanding shares of the Company’s common stock by the holders of those shares. The selling shareholders, who are deemed to be statutory underwriters, will offer their shares at a price of $0.60 per share, until the Company's common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker's transactions, privately-negotiated transactions or through sales to one or more dealers for resale

 

Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the selling shareholders in connection with sales of the common stock. The selling shareholders may from time to time offer their shares through underwriters, brokers-dealers, agents or other intermediaries. The distribution of the common stock by the selling shareholders may be effected in one or more transactions that may take place through customary brokerage channels, in privately negotiated sales; by a combination of these methods; or by other means. The Company will not receive any portion or percentage of any of the proceeds from the sale of the Selling Shareholders’ Shares.

 

PLAN OF DISTRIBUTION

 

The Company and the selling shareholders are seeking an underwriter, broker-dealer or selling agent to sell the Shares. Neither the Company nor the selling shareholders have entered into any arrangements with any underwriter, broker-dealer or selling agent as of the date of this prospectus. At the time of this prospectus, neither the Company nor the selling shareholders has located a broker-dealer or selling agent to sell the Shares. If, and when, a suitable broker-dealer, underwriter or selling agent is located, the Company would plan to disclose the same in this prospectus through an amendment to its Form S-1 registration statement to include such information herein.

 

The Company intends to maintain the currency and accuracy of this prospectus and to permit offers and sales of the Shares for a period of up to two (2) years, unless earlier completely sold, pursuant to Rule 415 of the General Rules and Regulations of the Securities and Exchange Commission.

 

The offering will terminate 24 months following the date of the initial effectiveness of the registration statement to which this prospectus relates, unless earlier closed.

 

Resales of the Securities under State Securities Laws

 

The National Securities Market Improvement Act of 1996 ("NSMIA") limits the authority of states to impose restrictions upon resales of securities made pursuant to Sections 4(1) and 4(3) of the Securities Act of companies which file reports under Sections 13 or 15(d) of the Securities Exchange Act. Resales of the Shares in the secondary market will be made pursuant to Section 4(1) of the Securities Act (sales other than by an issuer, underwriter or broker). The resale of such Shares may be subject to the holding period and other requirements of Rule 144 of the General Rules and Regulations of the Securities and Exchange Commission.

 

Selling Shareholders

 

The selling shareholders will offer their shares at a price of $0.60 per share, until the Company's common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker's transactions, privately-negotiated transactions or through sales to one or more dealers for resale. The distribution of the Selling Shareholder Shares may be effected in one or more transactions that may take place through customary brokerage channels, in privately-negotiated sales, by a combination of these methods or by other means. The selling shareholders may from time to time offer their shares through underwriters, brokers-dealers, agents or other intermediaries. Usual and customary or specifically negotiated brokerage fees or commissions may be paid by the selling shareholders in connection with sales of the Shares. The Company will not receive any portion or percentage of any of the proceeds from the sale of the Selling Shareholders' Shares.

   

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DESCRIPTION OF SECURITIES

 

Capitalization

 

The Company is authorized to issue 300,000,000 shares of common stock, par value $0.0001, of which 160,623,289 shares are outstanding as of the date of the registration statement, of which this prospectus is a part.

 

The Company is not currently authorized to issue any shares of preferred stock. However, the board of directors of the Company has approved a plan to issue convertible preferred stock. The preferred stock will be issued once the Company’s certificate of incorporation is amended to allow for the authorization of shares of preferred stock. Currently, the Company contemplates issuing Series A convertible preferred stock in the near future (i.e. within 90 days after the instant registration statement becomes effective), which will be redeemable over the course of three years. The convertible preferred stock will be convertible at the ratio of 1 share of preferred stock into 100 shares of common stock of the Company. Holders of the convertible preferred stock will be able to vote together with the common stock on an as-converted basis and not as a separate class. Each share of the preferred stock will be automatically be converted into shares of the common stock in the event of the Company being acquired.

 

The following statements relating to the capital stock set forth the material terms of the securities of the Company, however, reference is made to the more detailed provisions of the certificate of incorporation and the by-laws, copies of which are filed as exhibits to this registration statement.

 

Common Stock

 

The Company is registering up to 50,573,987 shares of common stock for sale to the public by the holders thereof at a price of $0.60 per Share. The Company is not directly offering any Shares for sale.

 

Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of common stock do not have cumulative voting rights.

 

Subject to preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by the board of directors in its discretion from funds legally available therefor.

 

Holders of common stock have no preemptive rights to purchase the Company’s common stock. There are no conversion or redemption rights or sinking fund provisions with respect to the common stock. The Company may issue additional shares of common stock which could dilute its current shareholder's share value.

 

Preferred Stock

 

The Company has approved plans to authorize the issuance of preferred stock. A description of the expected terms of the preferred stock is discussed below.

 

Shares of preferred stock may be issued from time to time in one or more series as may be determined by the board of directors. The board of directors may fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof without any further vote or action by the stockholders of the Company, except that no holder of preferred stock shall have preemptive rights. Any shares of preferred stock so issued would typically have priority over the common stock with respect to dividend or liquidation rights. Any future issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of the Company without further action by the stockholders and may adversely affect the voting and other rights of the holders of common stock.

 

The additional issuance of shares of preferred stock, or the issuance of rights to purchase such shares, could be used to discourage an unsolicited acquisition proposal. For instance, the issuance of a series of preferred stock might impede a business combination by including class voting rights that would enable the holder to block such a transaction, or facilitate a business combination by including voting rights that would provide a required percentage vote of the stockholders. In addition, under certain circumstances, the issuance of preferred stock could adversely affect the voting power of the holders of the common stock.

 

Although the Company’s board of directors is required to make any determination to issue such preferred stock based on its judgment as to the best interests of the stockholders of the Company, the board of directors could act in a manner that would discourage an acquisition attempt or other transaction that some, or a majority, of the stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then market price of such stock. The board of directors does not at present intend to seek stockholder approval prior to any issuance of currently authorized stock, unless otherwise required by law or otherwise.

 

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Admission to Quotation on the OTC Bulletin Board

 

If the Company meets the qualifications, it intends to work with market-makers for its securities that will apply for quotation of its common stock on the OTC Bulletin Board. However, the Company does not know if any such application will be made and whether it will be successful if made, how long such application will take, or, that if successful, that a market for the common stock will ever develop or continue on the OTC Bulletin Board.

 

The OTC Bulletin Board differs from national and regional stock exchanges in that it (1) is not situated in a single location but operates through communication of bids, offers and confirmations between broker-dealers and (2) securities admitted to quotation are offered by one or more broker-dealers rather than the "specialist" common to stock exchanges. To qualify for quotation on the OTC Bulletin Board, an equity security must have one registered broker-dealer, known as the market maker, willing to list bid or sale quotations and to sponsor the company listing. In addition, the Company must make available adequate current public information as required by applicable rules and regulations.

 

In certain cases the Company may elect to have its securities initially quoted in the Pink Sheets published by Pink OTC Markets Inc. In general there is greater liquidity for traded securities on the OTC Bulletin Board, and less through quotation on the Pink Sheets. It is not possible to predict where, if at all, the securities of the Company will be traded following the effectiveness of this registration statement.

 

Transfer Agent

 

It is anticipated that Globex Transfer, LLC of Deltona, Florida will act as transfer agent for the common stock of the Company.

 

Penny Stock Regulation

 

Penny stocks generally are equity securities with a price of less than $5.00 per share other than securities registered on national securities exchanges or listed on the Nasdaq Stock Market, provided that current price and volume information with respect to transactions in such securities are provided by the exchange or system. The penny stock rules impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the transaction, of a disclosure schedule prescribed by the SEC relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent price information on the limited market in penny stocks. Because of these penny stock rules, broker-dealers may be restricted in their ability to sell the Company’s common stock. The foregoing required penny stock restrictions will not apply to the Company’s common stock if such stock reaches and maintains a market price of $5.00 per share or greater.

 

Dividends

 

The Company has not paid any dividends to date. The Company intends to employ all available funds for the growth and development of its business, and accordingly, does not intend to declare or pay any dividends to common stockholders in the foreseeable future. However, the board of directors may, at its discretion, vote to declare dividends to holders of the preferred stock at a rate and at a time to be fixed by the board of directors.

 

THE BUSINESS

 

Background

 

Innovation in Motion commenced operations out of a desire of its founders to offer cutting-edge, innovative technology solutions and services to customers.

 

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Summary

 

Prior to the Acquisition, the Company had no significant business, operations or plan. Accordingly, the business of the Company below is that of Innovation in Motion, which the Company acquired in the Acquisition.

 

The Company has developed a highly cost effective and unique handheld “Configurable Intelligent Accessory” platform called HDR for the identification market. This platform is designed to compliment, not replace, existing communications and computing products utilized in this market by providing a configurable machine-readable input and secure data processing and storage intelligent accessory. By being an open platform solution and not a closed architecture product the HDR Accessory becomes the enabling platform for thousands of applications and applications developers. The currently developed platform supports the following operating systems: Windows CE; and Linux.

 

The Company’s platform also contains the back-end software solutions to provide direct interfaces to customer AFIS (Automatic Fingerprint Identification Systems) and various other demographic databases. In addition, the Company has developed an HDR asset manager software solution that allows for the management of the HDR pairing and end user issuance process from small to nationwide institutions or organizations. The two software elements developed are: gateway server; and asset manager server.

 

One of the biggest advantages of this platform approach is that a single product can support a wide variety of vertical markets, such as border control, public safety, enterprise security and asset management, sea ports, small business inventory management, military and banking (identity verification). The product development strategy is two-prong in nature: to develop platforms not products that support open standards for application content; and to facilitate continuous improvement in quality and reduced manufacturing cost.

 

In 2012, the Company added the capabilities to support a color display and optical fingerprint scanner. In the future, the Company plans to leverage its new and previous platforms in the development of the HDR+, the world’s first fully Android OS powered Intelligent Accessory used for machine readable input and secure data processing and storage.

 

The Company’s Presence in the Market

 

The Company plans to grow organically through sales and marketing of its products and development of new and improved products. In addition, the Company plans to explore acquisition opportunities as a means to foster and accelerate its growth.

 

The Company has developed a highly cost effective and unique handheld “Configurable Intelligent Accessory” platform called HDR for the identification market. This platform is designed to compliment not replace existing communications and computing products utilized in this market by providing a configurable machine-readable input and secure data processing and storage intelligent accessories. By being an open platform solution and not a closed architecture product the HDR Accessory becomes the enabling platform for thousands of applications and applications developers.

 

The platform contains the back-end software solutions to provide direct interfaces to customer AFIS (Automatic Fingerprint Identification Systems) and various other demographic databases. In addition, the Company has developed an HDR Asset Manager software solution that allows for the management of the HDR pairing and end user issuance process from small to nationwide institutions or organizations. The two software elements developed are gateway server and asset manager server.

 

Being a “Configurable” platform the HDR can be purchased with the following combination of machine-readable inputs:

· OCR Swipe (Passports, ID Cards, etc…)
· 1D and 2D Barcode
· Contactless RFID
· Contact Chip Reader
· Single Finger Scanner (Silicon or Optical Configurations)
· Camera
· License Plate Recognition
· Magnetic Strip Reader

 

One of the biggest advantages of this platform approach is that a single product can support a wide variety of vertical markets, such as:

 

· Border Control
· Public Safety
· Enterprise Security and Asset Management
· Seaports

 

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· Small Business Inventory Management
· Military
· Banking (Identity Verification)

 

Governmental Regulations

 

The Company does not need or require any approval from government authorities or agencies in order to operate its regular business and operations. However, it is possible that any proposed expansion to the Company’s business and operations in the future would require government approvals.

 

Due to the security applications and biometric technology associated with the Company’s products, the activities and operations of the Company could become subject to license restrictions and other regulations, such as (without limitation) export controls and other security regulation by government agencies.

 

Products

 

Being a “Configurable” platform, the HDR can be purchased with a varying and customized combination of machine-readable inputs and features, including the following:

 

· OCR Swipe (Passports, ID Cards, etc.)
· 1D and 2D Barcode
· Contactless RFID
· Contact Chip Reader
· Single Finger Scanner (Silicon or Optical Configurations)
· Camera
· License Plate Recognition
· Magnetic Strip Reader

 

In addition to the HDR+ platform, the Company has completed the engineering design requirements documentation and engineering feasibility analysis for its Biometric Wallet platform called SRIO. The SRIO is a small, Android OS powered biometric wallet that is a standalone device capable of meeting PCI compliance requirements for the secure storage and processing of credit card transactions using NFC technology coupled with the fingerprint authentication of the user. The Company is in the process of bringing this product to market. Once introduced into the market, the Company is hopeful that the SRIO will be successful in facilitating fast mobile payments.

 

The SRIO can be utilized in open and closed payment platforms, and there is no need to partner with mobile operators, phone manufacturers or others in order to implement the solutions. The SRIO also stores all credit/loyalty/membership/cards on the device, so a user’s information is readily accessible at all times. With use of the SRIO, a user can instantly and conveniently make payments on-the-go.

 

Pricing

 

The Company believes that it maintains competitive pricing for its products. The expected retail list price for HDR products range from $850 to $1,850 based on the configuration of the features and functionality of the product. The expected retail list price for SRIO products are expected to be $100 or less.

 

Competition

 

The technology industry is characterized by rapid change and new entrants. The Company needs to consistently develop and improve products in order to remain competitive in the technology industry.

 

Several product competitors exist for the Company’s products, including Morphoident, Cogent Bluecheck II, Cogent MI2, Crossmatch Rapid ID and others. In general, these products compete with HDR+ and are twice as expensive as the price point for the Company’s HDR+ product. In the SRIO product line, the closest competitor is Google Nexus 4, which is three times or more the cost of the Company’s product.

 

In general, the technology industry is characterized by rapid change and product development. While the Company will take steps to protect and maintain its intellectual property, there is no guarantee that such intellectual property protection can safeguard against changes and innovation that characterize the high-technology industry.

 

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In addition, it is possible that larger technology companies could develop competing technology and products. These larger organizations typically have larger budgets, more resources and the ability to quickly hire talented personnel to develop and commercialize new products.

 

Strategic Partners and Suppliers

 

The Company believes that strategic partnerships will be a major component of the Company’s operating strategy and path to success. The Company hopes to work with several strategic partners in important areas of its business and operations. Currently, the Company has several strategic partners (noted below) and hopes to foster additional such relationships. The Company believes that the most important strategic partnerships will be expanded relationships that it can form with its existing customers. The Company’s management believes that adding more value to existing clients is the most efficient and useful route to building the Company’s business in a very competitive industry.

 

A key supplier of the Company is Flextronics, an outsourced contract manufacturer. Pursuant to the Company’s relationship with Flextronics, the Company is able to obtain assembly and manufacturing of parts and products via Flextronics’ manufacturing capabilities.

 

The Company has a relationship with Coppernic SAS based in France. The parties began their relationship in July 2012 through entry into a supply contract whereby the Company supplied biometric verification devices to Coppernic SAS for the 2012 Ghana election.

 

The Company has a relationship with CenPos, Inc. related to payment processing gateway technology and services. The parties entered an agreement in November 2009 pursuant to which the Company utilizes certain services and functions provided by CenPos, Inc.

 

The Company is a party to a joint development agreement with Multipolaris Trading and Manufacturing Limited (“Multipolaris”) of Budapest, Hungary. Pursuant to the joint development agreement, the Company and Multipolaris will develop technology and solutions together on an equal basis.

 

In the area of quality processing and control, the Company has developed a strong relationship with CMTEC Solutions of Singapore. Pursuant to the agreement of the parties in January 2010, CMTEC Solutions provides manufacturing and engineering quality control and oversight for the assembly of the Company’s products. The agreement has a term of 12 months that renews each year, unless one of the parties terminates prior to renewal. Under the agreement, CMTEC Solutions receives a minimum fee of $2,500 per month from the Company, plus has eligibility to receive bonuses and commissions.

 

The Company has partnered with two firms with respect to accounting and finance services. First, the Company entered into an arrangement with nperspective to provide finance and CFO services to the Company. This agreement was executed in October 2012 and expires one year from then. Second, the Company entered into an accounting and business consulting services agreement with IN2IT Advisors in January 2013. Per this agreement, the Company receives such services from IN2IT Advisors at the rate of $150.00 per hour.

 

Sales and Distribution Agreements

 

The Company works with sales agents, distribution partners and others to promote and sell its products worldwide. The following are among the Company’s significant sales and distribution partners (with whom the Company has agreements):

 

-Acumen Telecommunicacionies S.A. de C.V.; located in Mexico; relationship since October 2010

-AITS and Biometrics Consulting, Inc.; relationship since August 2011

-Artemis; located in France; relationship since December 2011

-Artemis; located in South America; relationship since November 2011

-Best Tech Link, S.L.; located in Madrid, Spain

-Llacom S.A. de CV; located in Mexico

-Ofimarket LTDA; located in Columbia; relationship since March 2011

-Peter Gonzalez; located in Costa Rica; relationship since May 2011

-Preferred IT Service, S.A.; located in Costa Rica; relationship since July 2011

-Richard Gallano; located in Spain; relationship since May 2011

-Security Printing Consulting AG; Switzerland; relationship since December 2010

-Smart Identity Devices Private Limited; located in India; relationship since June 2011

 

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Marketing and Sales

 

The Company has conducted limited advertising and marketing to date to reach new clients. The Company has, however, given substantial attention to constructing the marketing strategy and plans that it will use in order to grow its business and expand its customers. The Company eventually anticipates a significant budget and need for marketing activities. The primary focus of marketing campaigns will be designed to help the Company find new customers and to increase awareness of the Company’s products and platform.

 

The Company expects that its sales team will work closely with the marketing team to convert prospects into new customers. The sales team will be structured to align with target markets based on territory and customer patterns.

 

Research and Development

 

On April 1, 2013, the Company entered into an engineering contract for the hardware and software development of its next generation HDR device called the HDR+.  The device is to be used by government and enterprise customers to capture all forms of machine readable data as well as the facial and fingerprint biometric information of persons. The total development costs for HDR+ will amount to $430,000. As of December 31, 2013, the Company has paid $44,000 in cash which has been recorded as research and development expense.

 

Revenues and Losses

 

The Company had no revenues during the three months ended March 31, 2014, as compared to no revenues in the three months ended March 31, 2013. The Company had no revenues during the year ended December 31, 2013, as compared to revenues of $7,695,067 in the year ended December 31, 2012.

 

The Company had a net loss of $121,824 during the three months ended March 31, 2014, as compared to net losses of $299,009 in the three months ended March 31, 2013. The Company had a net loss of $976,238 during the year ended December 31, 2013, as compared to net income of $192,313 in the year ended December 31, 2012.

 

Equipment Financing

 

The Company has no existing equipment financing arrangements.

 

THE COMPANY

 

Change of Control

 

The Company was incorporated in the State of Delaware in September 2011, and was formerly known as Silverwood Acquisition Corporation. In December 2012, the Company implemented a change of control by issuing shares to new shareholders, redeeming shares of existing shareholders, electing new officers and directors and accepting the resignations of its then existing officers and directors. In connection with the change of control, the Company changed its name from Silverwood Acquisition Corporation to IIM Global Corporation.

 

The Acquisition

 

On August 12, 2013, IIM Global Corporation, a Delaware corporation (the “Company”), acquired Innovation in Motion Inc., a Florida corporation (“Innovation in Motion”), in a stock-for-stock transaction (the “Acquisition”). The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities.

 

The Acquisition was effected by the Company through the exchange of each of the outstanding shares and interests of Innovation in Motion for 1.6 shares of common stock of the Company. As a result, in the Acquisition, 97,970,562 shares and interests of common stock of Innovation in Motion were exchanged for, and converted into, 156,752,899 shares of common stock of the Company.

 

Prior to the Acquisition, Silverwood had no ongoing business or operations and was established for the purpose of completing a business combination with target companies, such as Innovation in Motion. As a result of the Acquisition, Innovation in Motion became a wholly owned subsidiary of the Company. The Company, as the sole shareholder of Innovation in Motion, has taken over the operations and business plans of Innovation in Motion.

 

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Relationship with Tiber Creek Corporation

 

In November 2012, the Company (through Innovation in Motion) entered into an engagement agreement with Tiber Creek Corporation, a Delaware corporation (“Tiber Creek”), whereby Tiber Creek would provide assistance to the Company in effecting transactions for the Company to combine with a public reporting company, including: transferring control of such reporting company to Innovation in Motion; preparing the business combination agreement; effecting the business combination; causing the preparation and filing of forms, including a registration statement, with the Securities and Exchange Commission; assist in listing its securities on a trading exchange; and assist in establishing and maintaining relationships with market makers and broker-dealers.

 

Under the agreement, Tiber Creek is entitled to receive cash fees from the Company of $100,000 for its services, payable as follows: $40,000 due immediately, and then $15,000 per month until the balance is paid in full. In addition, the Company’s then-current shareholders, Tiber Creek and MB Americus, LLC, a California limited liability company (“MB Americus”), were permitted to retain the aggregate total of 500,000 shares. The engagement agreement also provides that the shares held by Tiber Creek and MB Americus shall be included in the registration statement filed by the Company, however, 80% of these shares held by Tiber Creek and MB Americus will not be sold or transferred for nine months following the effective date of the registration statement.

 

In general, Tiber Creek holds interests in inactive Delaware corporations which may be used by issuers (such as the Company) to reincorporate their business in the State of Delaware and capitalize the issuer at a level and in a manner (i.e. the number of authorized shares and rights and preferences of shareholders) that is appropriate for a public company. Otherwise, these corporations, such as Silverwood Acquisition Corporation (the former name of the Company), are inactive, and Tiber Creek does not conduct any business in such corporations.

 

James Cassidy and James McKillop (who is the sole owner of MB Americus, an affiliate of Tiber Creek) serve only as interim officers and directors of these corporations (such as Silverwood Acquisition Corporation) until such time as the changes of control in such corporations are effectuated to the ultimate registering issuers. As the role of Tiber Creek is essentially limited to preparing the corporate structure and organizing the Company for becoming a public company, the roles of Mr. Cassidy and Mr. McKillop are generally limited to facilitating such change of control and securities registration transactions.

 

Promissory Note

 

The Company issued a promissory note to Penn Investments Inc. in the amount of $600,000 on March 31, 2014. The promissory note accrues interest at 15% per annum until paid. The principal and interest due under the note are payable in full on September 30, 2014.

 

In April 2014, the Company entered into a short term promissory note for $310,000 with another entity owned by a related party for the purpose of purchasing the building at 160 E. Lake Brantley Drive, Longwood, FL 32779.

 

Intellectual Property

 

The Company licenses certain technology for use in its products and business. A key arrangement is the license of materials from Apple, Inc. The license, executed in October 2009, provides the Company with the ability use certain Apple, Inc. materials in the Company’s own products.

 

The Company also holds numerous patents and intellectual property as a result of an assignment of the same to the Company in November 2012 by Thomas Szoke, Daniel Fozzati and Andras Vago. Each of these individual assignors now beneficially own shares of common stock in the Company (as a result of the Acquisition, since these individuals were formerly shareholders of Innovation in Motion).

 

The following is a summary of the patents and patent applications as well as the trademarks that the Company has filed throughout the world:

 

HDR PCT Filing#: WO2011/019996A1 (applied in US, Canada, Europe, China, India, Brazil, Russia, Colombia, Mexico, South Africa, and Australia)
SRIO PCT Filing#: WO2011/028874A1 (applied in US, Canada, Europe, Japan, China, India, Brazil, Mexico, South Korea, and Australia)
HDR Design US Patent#: D649548 (also obtained in Europe, Japan, China, Switzerland, Mexico, Brazil, Singapore, Argentina, Colombia, and Venezuela)
SRIO & HDR Trademark filed in United States, Europe, Switzerland, Brazil, Mexico, Colombia, Singapore, and Australia

 

The HDR PCT Filing is a utility patent that focuses on the creation of an “Intelligent Configurable Accessory” and how this accessory can be utilized with a Bluetooth wireless connection and still provide not only data security but maintain an overall network security by ensuring the accessory is seen as a trusted element in the network.

 

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The SRIO PCT Filing is a utility patent that provides for the creation of an “Intelligent Accessory” utilized in NFC payment systems both open and closed architecture. The patent provides the means to create a secure environment, which can not only house the sensitive credit card information of the user but also allow its NFC chipset to emulate any of the cards stored on it for a transaction. Today all NFC devices have single credit card information hard coded into its chipset and are recharged from users cards that are stored on web based platforms.

 

The HDR Design Patent protects the shape and ergonomics of the HDR product. The size and shape of the HDR product is unique for being able to house 7 unique machine-readable technologies in a single integrated unit the size of a smartphone.

 

The following is the exhaustive list of the all of the Company’s patents, filings, and trademarks for each country:

 

Title - INTELLIGENT PERIPHERAL DEVICE (HDR - Design)

 

Country   Application/Patent No.   Status
         
United States   D649,548 S   Issued
         
China   ZL 201130084031.7   Issued
         
Switzerland   137932   Issued
         
European Community   001270177   Issued
         
Argentina   DI 82259   Issued
         
Brazil   DI 7101457-8   Issued
         
Columbia   11-120885-00000-0000   Pending
         
Mexico   MX/f/2011/001192   Allowed
         
Singapore   D2011/472/Z   Issued
         
Japan   1423506   Issued

 

Title - AN INTELLIGENT PERIPHERAL DEVICE AND SYSTEM FOR THE AUTHENTICATION AND VERIFICATION OF INDIVIDUALS AND/OR DOCUMENTS THROUGH A SECURE MULTIFUNCTIONAL AUTHENTICATION SERVICE WITH DATA STORAGE CAPABILITY (HDR -Utility)

 

Country   Application/Patent No.   Status
         
United States   13/390,113   Pending
         
Australia   2010282394   Pending
         
Mexico   MX/a2012/001768   Pending
         
Columbia   12 043.697   Pending
         
Brazil   BR 11 2012 003212 7   Pending
         
Russia   2012108483   Pending
         
India   2027/DELNP/2012   Pending
         
South Africa   2012/1728   Allowed
         
China   201080046324.9   Pending
         
Canada   2,770,406   Pending
         
Europe   10808809.7   Pending

 

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Title - A PERSONALIZED MULTIFUNCTIONAL ACCESS DEVICE POSSESSING AN INDIVIDUALIZED FORM OF AUTHENTICATING AND CONTROLLING DATAEXCHANGE (SRIO-Utility)

 

Country   Application/Patent No.   Status
         
United States   13/393,852   Pending
         
Australia   2010289507   Pending
         
South Korea   10-2012-7008685   Pending
         
India   2431/DELNP/2012   Pending
         
Mexico   MX/a2012/002553   Pending
         
Brazil   BR 11 2012 004791.4   Pending
         
Canada   2,772,213   Pending
         
Japan   2012-528037   Pending
         
China   201080047050.5   Pending
         
Europe   10814477.5   Pending

 

Employees and Organization

 

The Company presently has approximately three employees and approximately five full-time consultants.

 

Employees do not receive benefits at this time. However, the Company may offer additional fringe and welfare benefits in the future as the Company’s profits grow and/or the Company secures additional outside financing.

 

Property

 

The Company’s headquarters are located in Longwood, Florida. The location consists of over 3,500 square feet. The facility is fully furnished with computers, phone systems, Internet, and break rooms to accommodate up to 25 employees.

 

On October 23, 2013 the Company entered into an office building lease with purchase option, the lease is for the Company’s corporate office in Longwood, Florida. The Company has the option to purchase the building at the end of the 6 months lease term for a total purchase price of $430,000 less the non-refundable deposit that was paid on the lease initiation. The amount of the deposit and prepaid lease amounted to $103,000 and $112,000 as of March 31, 2014 and December 31, 2013, respectively.

 

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Subsidiaries

 

Currently, the Company has one subsidiary – Innovation in Motion (which was acquired in the Acquisition). The Company is the sole shareholder of Innovation in Motion.

 

Jumpstart Our Business Startups Act

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

 

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

 

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

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

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

(iii) executive compensation only needs to be presented in the limited format now required for smaller reporting companies.

(A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)

 

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. The Company is a smaller reporting company. Currently a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Reports to Security Holders

 

The Company has filed a registration statement on Form S-1, under the Securities Act of 1933, with the Securities and Exchange Commission with respect to the shares of its common stock. This prospectus is filed as a part of that registration statement, but does not contain all of the information contained in the registration statement and exhibits. Statements made in the registration statement are summaries of the material terms of the referenced contracts, agreements or documents of the company. Reference is made to the Company’s registration statement and each exhibit attached to it for a more detailed description of matters involving the Company. A potential investor may inspect the registration statement, exhibits and schedules filed with the Securities and Exchange Commission, along with any other filings of the Company, as described below.

 

In November 2011, the Company (as Silverwood Acquisition Corporation) filed a Form 10-12G general registration of securities pursuant to the Securities Exchange Act of 1934 and is a reporting company pursuant such Act and files with the Securities and Exchange Commission quarterly and annual reports and management shareholding information. The Company intends to deliver a copy of its annual report to its security holders, and will voluntarily send a copy of the annual report, including audited financial statements, to any registered shareholder who requests the same.

 

The Company's documents filed with the Securities and Exchange Commission may be inspected at the Commission's principal office in Washington, D.C. Copies of all or any part of the registration statement may be obtained from the Public Reference Section of the Securities and Exchange Commission, 100 F Street N.E., Washington, D.C. 20549. Call the Commission at 1-800-SEC-0330 for further information on the operation of the public reference rooms. The Securities and Exchange Commission also maintains a web site at http://www.sec.gov that contains reports, proxy statements and information regarding registrants that file electronically with the Commission. All of the Company’s filings may be located under the CIK number 0001534154.

 

PLAN OF OPERATION

 

Business Plan

 

The Company’s plan is to develop, market and sell cost effective and unique technology solutions based on its platform.

 

The Company is also focused on ongoing investments in product development. The product development strategy is two prong in nature:

• Develop platforms not products that support open standards for application content

• Continuous improvement in quality and reduced manufacturing cost

 

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In 2012, the Company developed the Linux version of its HDR platform as well as added the capabilities to support a color display and optical fingerprint scanner. Going forward, the Company is leveraging its new and previous platforms in the development of the HDR+, the world’s first fully Android OS powered Intelligent Accessory used for machine readable input and secure data processing and storage.

 

In addition to the HDR+ platform, the Company has completed the engineering design requirements documentation and engineering feasibility analysis for its Biometric Wallet platform called SRIO. The SRIO is the smallest and only Android OS powered biometric wallet that is a standalone device capable of meeting PCI compliance requirements for the secure storage and processing of credit card transactions using NFC technology coupled with the fingerprint authentication of the user.

 

Potential Revenue

 

The Company expects to earn potential revenue from sales of its products, as it continues to commercialize its products.

 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

 

The Company was incorporated in the State of Delaware in September 2011, and was formerly known as Silverwood Acquisition Corporation (“Silverwood” or “Silverwood Acquisition”). On August 12, 2013, the Company acquired Innovation in Motion Inc., a Florida corporation (“Innovation in Motion”), in a stock-for-stock transaction (the “Acquisition”). Innovation in Motion was formed in April 2009 in the State of Florida.

 

The Company’s independent auditors have expressed substantial doubt as to the ability of the Company to continue as a going concern. Unless the Company is able to generate sufficient cash flow from operations and/or obtain additional financing, there is a substantial doubt as to the ability of the company to continue as a going concern.

.

Revenues and Losses

 

The Company had no revenues during the three months ended March 31, 2014, as compared to no revenues in the three months ended March 31, 2013. The Company had no revenues during the year ended December 31, 2013, as compared to revenues of $7,695,067 in the year ended December 31, 2012.

 

The Company had a net loss of $121,824 during the three months ended March 31, 2014, as compared to net losses of $299,009 in the three months ended March 31, 2013. The Company had a net loss of $976,238 during the year ended December 31, 2013, as compared to net income of $192,313 in the year ended December 31, 2012.

 

Equipment Financing

 

The Company has no existing equipment financing arrangements.

 

Pricing

 

The Company believes that it maintains competitive pricing for its products. The expected retail list price for HDR products range from $850 to $1,850 based on the configuration of the features and functionality of the product. The expected retail list price for SRIO products are expected to be $100 or less.

 

Potential Revenue

 

The Company expects to earn potential revenue from sales of its products, as it continues to commercialize its products.

 

Alternative Financial Planning

 

The Company has no alternative financial plans at the moment. If the Company is not able to successfully raise monies as needed through a private placement or other securities offering (including, but not limited to, a primary public offering of securities), the Company’s ability to expand its business plan or strategy over the next two years will be jeopardized.

 

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Critical Accounting Policies

 

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Pursuant to the JOBS Act of 2012, as an emerging growth company the Company can elect to opt out of the extended transition period for any new or revised accounting standards that may be issued by the PCAOB or the SEC. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the standard for the private company. This may make comparison of the Company's financial statements with any other public company which is not either an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible as possible different or revised standards may be used.

 

Although the Company is still evaluating the JOBS Act, it currently intends to take advantage of some or all of the reduced regulatory and reporting requirements that will be available to it so long as it qualifies as an “emerging growth company”. The Company has elected not to opt out of the extension of time to comply with new or revised financial accounting standards available under Section 102(b) of the JOBS Act. Among other things, this means that the Company's independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of the Company's internal control over financial reporting so long as it qualifies as an emerging growth company, which may increase the risk that weaknesses or deficiencies in the internal control over financial reporting go undetected. Likewise, so long as it qualifies as an emerging growth company, the Company may elect not to provide certain information, including certain financial information and certain information regarding compensation of executive officers that would otherwise have been required to provide in filings with the SEC, which may make it more difficult for investors and securities analysts to evaluate the Company. As a result, investor confidence in the Company and the market price of its common stock may be adversely affected.

 

Capital Resources

 

As of March 31, 2014, the Company had cash available of $221,351.

 

The Company’s proposed business plans over the next two years will necessitate additional capital and financing. Accordingly, the Company plans to raise some outside funding in the next one year, for the purposes of funding its business and plans.

 

There can be no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash on hand, the Company will be unable to implement its contemplated business plans and operations unless it obtains additional financing or otherwise is able to generate sufficient revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans.

 

To date, the Company has not suffered from a significant liquidity issue.

 

The Company anticipates a significant budget for sales and marketing activities as the Company expands and rolls out its products to broader market segments.

 

Discussion of the Three Months ended March 31, 2014

 

For the three months ended March 31, 2014, the Company generated no revenues and had a loss from operations of $112,274.

 

General and administrative expenses decreased by $189,973, to $98,176 for the three months ended March 31, 2014, from $288,149 for the three months ended March 31, 2013. The main components of general and administrative expenses during the three months ended March 31, 2014 were $49,850 in professional fees, $16,959 in salaries. The main components of general and administrative expenses during the three months ended March 31, 2013 were $168,650 in professional fees, $75,760 in salaries. The main reason for the decrease in general and administrative expenses was more professional fees incurred in the first quarter of 2013 due to preparation the reverse merger transaction between the private operating company and the public shell which occurred in the third quarter of 2013..

 

As of March 31, 2014, the Company had total current assets of $324,351 and we had total current liabilities of $617,491. Operating activities used $150,383 in cash for the three months ended March 31, 2014, as compared to using $19,718 in cash for the three months ended March 31, 2013. The Company’s net loss of $121,824 for the three months ended March 31, 2014, decrease in accounts receivable and other current liabilities, primarily accounted for the increase in our negative operating cash flow. Financing activities during the three months ended March 31, 2014 generated $375,375 in net cash after repayments of $349,425 of related party notes.

 

As of March 31, 2014, the Company has insufficient cash to operate its business at the current level for the next twelve months and insufficient cash to achieve its business goals. The success of the Company’s business plan is contingent upon it obtaining additional financing. The Company intends to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital, or other cash requirements. The Company does not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to the Company on acceptable terms, or at all. The Company’s failure to obtain financing would have a material adverse effect on its business.

 

Discussion of the Year ended December 31, 2013

 

The Company generated no revenues during the year ending December 31, 2013.

 

The Company had an operating loss and net loss during the year ending December 31, 2013 of $971,455 and $976,238, respectively.

 

For the year ended December 31, 2013, the Company used $900,592 of cash in its operations.

 

The Company did not incur any capital expenditures during the year ended December 31, 2013. However, the Company incurred cash outflows from investment in intangible assets in the amounts of $231,860 during the year ending December 31, 2013.

 

The Company does not anticipate that it will generate revenue sufficient to cover its planned operating expenses, and the Company must obtain additional financial in order to develop and implement its business plan and proposed operations. If the Company is not successful in generating sufficient revenues and/or obtaining additional funding to develop its business plan and proposed operations, this could have a material adverse effect on its business, results of operations liquidity and financial condition.

 

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Discussion of the Year ended December 31, 2012

 

The Company generated revenues of $7,695,067 during the year ended December 31, 2012.

 

During the year ended December 31, 2012, the Company posted operating income and net income, respectively, of $192,313, and 192,313.

 

For the year ended December 31, 2012, the Company generated $180,202 of cash in its operations.

 

The Company incurred expenditures from investments in intangibles during the year ended December 31, 2012 in the amount of $102,203.

 

The Company does not anticipate that it will generate revenue sufficient to cover its planned operating expenses, and the Company must obtain additional financial in order to develop and implement its business plan and proposed operations. If the Company is not successful in generating sufficient revenues and/or obtaining additional funding to develop its business plan and proposed operations, this could have a material adverse effect on its business, results of operations liquidity and financial condition.

 

MANAGEMENT

 

The following table sets forth information regarding the members of the Company’s board of directors and its officers:

 

Name   Age   Position   Year Commenced
             
David S. Jones   59   President and CEO, Secretary, Treasurer and Director   2012
Douglas Solomon   58   COO and Director   2013
Thomas Szoke   50   CTO and Director   2013
Andras Vago   63   Director   2013
Haraldo Artmann   57   Director   2013

 

David S. Jones

 

David S. Jones serves as Chief Executive Officer, President, Secretary and Treasurer of the Company, and is a Director of the Company. Mr. Jones has been in global business management in all regions of the world including global management of company personnel and contractor/partner relationships. He has served as a board member on joint ventures operating in Beijing, China, Bangalore, India and Perth, Australia. He has served and managed sales, field service, managed service, systems integration and professional service, marketing, finance, engineering, business development and other areas with a particular expertise in global services, strategic partnerships and joint venture management. From 1986 through 2007, Mr. Jones worked for Motorola, Inc. with various systems, operations and development positions retiring as Vice President for Global Service Delivery Operations responsible for the global delivery of all technical call centers, network operations centers, secure operation center, technical training and services business development. He served as a board member for the joint venture between Motorola and WiPro in Bangalore, India, Motorola and ERG in Perth, Australia and Motorola and a Local Manufacturer in Beijing, China. From 2007 to 2010, Mr. Jones was Vice President and General Manager for Intermec Technologies, Inc.’s Global Services Division in Everett, Washington. Mr. Jones was responsible for Intermec's global services business including margin improvement and revenue growth, sales, third party services, marketing, finance, call centers, parts sales and professional services. From 2010 to 2011, Mr. Jones served in a consultant capacity to large and small manufacturers trying to enter or improve their services position in the market. And in 2011 Mr. Jones joined Innovation in Motion Inc. as President & CEO, which has grown from a start-up in 2009 to a pre-tax revenue of $7.7 million. Mr. Jones received his Bachelor of Science degree in Civil Engineering from Rose Hulman Institute of Technology in Terre Haute, Indiana and his Masters in Business Administration degree from Baldwin Wallace College in Berea, Ohio.

 

Douglas Solomon

 

Douglas Solomon serves as Chief Operating Officer and a Director of the Company. Mr. Solomon is the co-founder of ID Solutions Inc., and has over 30 years of hands-on experience in the management and operations of high-tech international corporations and their subsidiaries. His experience includes over 18 years in international sales and marketing within the high-tech industry. Prior to founding ID Solutions, Douglas held various positions as President and/or CEO of various US-based and international companies. His experience and responsibilities include every aspect of running a business, people management, financial controls, resource planning and expansion/growth strategy of the company and its stakeholders. As a graduate of the University of the Witwatersrand, he started his career with Hewlett Packard in South Africa in 1979 and in 1985 left HP to start one of the largest HP OEM’s in Africa, under the banner of the then publicly traded “Square One Solutions Group”. In partnership with various local and international companies, Douglas has been instrumental in establishing a beach-head for numerous new ventures in a variety of high-tech focused opportunities.

 

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Thomas Szoke

 

Thomas R. Szoke serves as Chief Technology Officer and a Director of the Company. Mr. Szoke has over 25 years of engineering, global sales and operations management as well as extensive field experience and is one of the founding members of Innovation In Motion, Inc., founded in April of 2009, and was the Chief Operating Officer of Innovation In Motion Inc, which was merged into IIM Global Corporation in August of 2013. Tom pioneered the concept and development and is the inventor of IIM Global Corps HDR and HDR+ product line, which was the technological basis for IIM Global Corps Inventory Control Handheld (ICH) and Handheld Voter Registration Device used in the Ghana elections in 2012. He is also the visionary behind the tested concept of IIM Global Corps SRIO Mobile Payment Solution.

 

Mr. Szoke is recognized as an expert and visionary in his field. He is one of a kind when it comes to navigating and dealing with the complexities between technology, new product development and business. Tom has over 25 years in the high tech industry with a variety of technology companies, over 21 years of global business operations experience and global sales experience and over 5 years of experience in small business management.

 

Mr. Szoke spent 23 years with Motorola, Inc. gaining experience in field and product engineering, systems integration, program management and sales. Mr. Szoke was the Country Manager for Hungary for all of Motorola, Inc. Mr. Szoke also possesses 10 years of experience in the Biometrics Industry in management, sales, partnership development and technology/engineering development. Mr. Szoke is a degreed Electrical Engineer and is fluent in English and Hungarian.

 

Andras Vago

 

Andras Vago is a Director of the Company. Since 1989, Mr. Vago has been the Founder, CEO and Managing Director of Multipolaris, based in Budapest, Hungary. Mr. Vago was also one of the Founders of Innovation In Motion, Inc. which was merged into IIM Global Corp in August 2013. Mr. Vago has over 30 years of technical system development, technical system deployment and global executive management experience. His areas of expertise include manufacturing, delivery and installation of digital telephone and complex nation-wide information systems. Mr. Vago is an experienced systems integrator and provides the planning, development, supply, operation, servicing, maintenance and training on complex IT and communication networks and the integration of special surveillance systems.

 

Mr. Vago also focuses on the technology for the development and production of plastic or paper based security documents such as passports, national ID cards and personal and identification control mediums. Since 1997 Multipolaris has produced more than 130 million security documents including ID cards and passports. In 2004 Mr. Vago started a subsidiary company, Multicard Ltd., which is 100% owned by Multipolaris, and manufactures a wide variety of plastic cards including bank cards, club, loyalty, traveler, membership, customer, access control, ID, VIP motorway tool and chip cards.

 

Mr. Vago also possesses knowledge in Marketing from the Hungarian Aluminum Industry Trust. He also possesses a background in Import/Export knowledge and experience during his career at the Machine Export Company, the Chemical Machine and Equipment Export and Import Company and was head of exporting at Chemical Machine and Equipment Export and Import Company, “Chemocomplex”.

 

Mr. Vago is a degreed Engineer graduating from the College Faculty of Metallurgy of the Technical University of Heavy Industry in Miskolc. Mr. Vago also possesses a degree in the Economic Expert Branch of the Faculty of International Economic Relations from the University of Economics “Karl Marx” in Budapest, Hungary. Mr. Vago is fluent in Hungarian, German, Italian and English.

 

Haraldo Artmann

 

Mr. Artmann serves as a Director of the Company. He is a successful entrepreneur and a lawyer with extensive knowledge and experience in the Government and Private Sector in Brazil and other South American countries. He is the founder and President of Audifone Brazil, a electronic company established in 1988 that specializes in the manufacturing and distribution of hearing aids in Brazil and throughout South America With over 70 employees and an extensive Affiliate distribution network including several company owned retail stores the company achieved annual sales in excess of $15 million US dollars.

 

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Haraldo currently is expanding his Brazilian private sector business into the United States. He is in the process of developing a distribution network for his highly successful battery product line “WPOWER” of alkaline batteries, hearing aids batteries and Lithium batteries. In 1983 he graduated with a Law Degree from the Universade Sao Francisco de Assis in Brazil, becoming an active Lawyer in the areas of Commerce, Bankruptcy, and Real Estate Law and continues to remain a registered member of the Brazilian Lawyers Bar Association. He also holds a Degree in International Commerce and diplomatic relationship from Faculdade de Comercio Exterior in Curitiba, Brazil and as a member of the Rotary Club he was involved in many humanitarian activities throughout Brazil. As a hobby Haraldo enjoys flying his own plane and holds a Commercial Pilots License in Brazil and is currently working on his USA license. Haraldo and his family reside in the Orlando area.

 

Director Independence

 

Pursuant to Rule 4200 of The NASDAQ Stock Market one of the definitions of an independent director is a person other than an executive officer or employee of a company. The Company's board of directors has reviewed the materiality of any relationship that each of the directors has with the Company, either directly or indirectly. Based on this review, the board has determined that there are two (2) independent directors.

 

Committees and Terms

 

The Board of Directors (the “Board”) has not established any committees.

 

Legal Proceedings

 

There are currently no pending, threatened or actual legal proceedings of a material nature in which the Company is a party.

 

EXECUTIVE COMPENSATION

 

Remuneration of Officers: Summary Compensation Table

 

Description of Compensation Table

  

                      Aggregate                              
          Annual     Annual     Accrued                     All     Annual  
          Earned     Payments     Salary Since         Stock and     Compensation     Other     Compensation  
Name/Position   Year     Salary     Made     Inception     Bonus     Options     Plans     Compensation     Total  
                                                       
David Jones     2013     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
CEO and Director     2012     $ 189,961     $ 189,961     $ 0     $ 0     $ 0     $ 0     $ 12,000     $ 201,961  
                                                                         
Douglas Solomon     2013     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
COO and Director     2012     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0  
                                                                         
Thomas Szoke     2013     $ 0     $ 0     $ 0     $ 0     $ 196,932     $ 0     $ 35,000     $ 231,932  
CTO and Director     2012     $ 0     $ 0     $ 0     $ 0     $ 0     $ 0     $ 122,500     $ 122,500  

 

The compensation shown above is presented for the calendar/fiscal year 2013 and 2012, respectively, and represents salaries and compensation payable to the officers noted above in connection with their services for the Company.

 

As of December 31, 2013, there was no accrued compensation that was due to the Company’s employees or officers. Upon successful completion by the Company of a primary public offering in the future (or the completion of other financing or funding), however, the Company may compensate officers and employees as is discussed below in “Anticipated Officer and Director Remuneration.” At present, all salary that is payable to Mr. Jones has been deferred.

 

Each of the officers has received certain shares of common stock in the Company in connection with the change of control of the Company and/or the Acquisition. Accordingly, the Company has not recorded any compensation expense in respect of any shares issued to the officers as such shares do not represent compensation that was paid to any officer.

 

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There are no current plans to pay or distribute any cash or non-cash bonus compensation to officers of the Company, until such time as the Company is profitable, experiences positive cash flow or obtains additional financing. However, the Board of Directors may allocate salaries and benefits to the officers in its sole discretion. No officer is subject to a compensation plan or arrangement that results from his or her resignation, retirement, or any other termination of employment with the Company or from a change in control of the company or a change in his or her responsibilities following a change in control. The members of the Board of Directors may receive, if the Board so decides, a fixed fee and reimbursement of expenses, for attendance at each regular or special meeting of the Board, although no such program has been adopted to date. The Company currently has no retirement, pension, or profit-sharing plan covering its officers and directors; however, the Company plans to implement certain such benefits after sufficient funds are realized or raised by the Company (see “Anticipated Officer and Director Remuneration” below.)

 

Employment Agreements

 

David S. Jones, the CEO of the Company, has an employment agreement with the Company, originally entered into in October 2011 (and subsequently amended in August 2012). Pursuant to this agreement, Mr. Jones (as the CEO) is entitled to a base salary of $210,000, plus eligibility for performance bonuses and other perquisites. Mr. Jones also receives an automobile allowance of $1,000 per month from the Company. The employment agreement with Mr. Jones has a term of five years, thus expiring in 2016, and is subject to renewal at such time for an additional period of two years. The employment agreement was amended as of July 1, 2013 to reflect a total compensation of $1.00 per year for the executive from that date onward. Thereafter, the agreement with Mr. Jones was cancelled, and the Company and Mr. Jones entered into another executive employment agreement, as of February 27, 2014. Pursuant to the agreement, Mr. Jones will receive a base salary of $60,000 per year. Mr. Jones is also eligible for vacation and sick leave. The term of the employment agreement is from March 1, 2014 to February 28, 2017.

 

The Company entered into an executive employment agreement with Douglas Solomon, as of February 27, 2014. Pursuant to the agreement, Mr. Solomon will receive a base salary of $60,000 per year. Mr. Solomon is also eligible for vacation and sick leave. The term of the employment agreement is from March 1, 2014 to February 28, 2017.

 

The Company entered into an executive employment agreement with Thomas Szoke, as of February 27, 2014. Pursuant to the agreement, Mr. Szoke will receive a base salary of $60,000 per year. Mr. Szoke is also eligible for vacation and sick leave. The term of the employment agreement is from March 1, 2014 to February 28, 2017.

 

The Company has certain key personnel consulting arrangements of note:

 

The Company previously retained Thomas Szoke PA, LLC (“Szoke LLC”) as a long-term contractor for the Company since May 2009. Szoke LLC is involved in all key aspects of the Company, including corporate strategy, product development, intellectual property and marketing planning. The firm is a key advisor and consultant for the board of directors and senior management of the Company. The contractor agreement originally had a term of 5 years, and is set to expire by May 2014. However, in June 2012, the Company and Szoke LLC amended the original agreement, and the newly amended agreement expires 5 years from the date of the amendment. The amended agreement increases the scope of Szoke LLC’s services to include sales support, technology planning and other operational duties. The amended agreement provides that Szoke LLC will receive a consulting fee of $25,000 per month, subject to increase by ten percent (10%) each year. In November 2012, the parties again amended the agreement, so that Szoke LLC could also provide technical support for the Company’s patenting process relating to HDR and SRIO solutions. In consideration of these additional services, Szoke LLC was granted equity awards in the Company. This agreement with Szoke LLC expired in October 2013, and the Company has not renewed it.

 

The Company entered a technical consulting engagement with Andras Vago in November 2012. Pursuant to the agreement, Mr. Vago provides technical consulting with respect to the Company’s intellectual property and product development. The term of the agreement is 12 months, subject to extension by mutual agreement of the parties. In exchange for his services, Mr. Vago received equity awards from the Company. This agreement was not renewed.

 

The Company has a consulting agreement with Platinum Bay, located in Florida, for senior management advice and consultative assistance. Under this agreement (which was amended and restated in November 2012), Platinum Bay receives a flat amount of $2,100 per week for its services to the Company. The agreement expires at the end of October 2014. This agreement was cancelled and renegotiated on April 10, 2014.

 

Beginning in 2011, the Company also has formed a consulting relationship with John Seno with respect to SRIO development and services. This agreement expired in 2011 and was not renewed.

 

In March 2014, the Company entered into a consulting agreement with Jamie White an independent contractor hired to provide Mechanical Design services for the development of the Company’s new products. The agreement is a month to month agreement at a rate of $1200/week.

 

In April 2014, the Company entered into a consulting agreement with a stockholder whereby the stockholder provides consulting services to the Company. The Company agreed to pay a monthly fee of $8,000 per month for 160 hours of consulting per month. Additional hours incurred by the consultant is charged to the Company at an agreed upon rate. The Company agreed to pay a $30,000 non-refundable retainer.

 

In April 2014, the Company entered into a consulting agreement with James Fegan an independent contractor hired to provide specialized embedded software and hardware design services for the development of the Company’s new products. The agreement is valued at a maximum of $88,000 at a rate of $8000/bi-weekly.

 

Anticipated Officer and Director Remuneration

 

The Company pays reduced levels of compensation to its director at present. The Company intends to pay regular, competitive annual salaries to all its officers and directors and will pay an annual stipend to its directors when, and if, it completes a primary public offering for the sale of securities and/or the Company reaches greater profitability, experiences larger and more sustained positive cash flow and/or obtains additional funding. At such time, the Company anticipates offering additional cash and non-cash compensation to officers and directors. In addition, the Company anticipates that its officers and directors will be provided with benefits.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information as of the date of this regarding the beneficial ownership of the Company’s common stock by each of the Company’s executive officers and directors, individually and as a group and by each person who beneficially owns in excess of five percent of the common stock after giving effect to any exercise of warrants or options held by that person.

 

                    Percent of Class  
              Percent of     After  
        Number of Shares of     Class Before     Offering  
Name   Position   Common Stock     Offering (1)     (2)  
                       
David S. Jones   President, CEO and Director     20,434,549       13 %     8 %
                             
Andras Vago   Director     54,400,000 (3)     34 %     24 %
                             
Thomas Szoke   CTO and Director     33,315,940 (4)     21 %     15 %
                             
Douglas Solomon   COO and Director     1,500,000       1 %     *  
                             
Daniel Fozzati   5% shareholder     14,400,000 (5)     9 %     6 %
                             
Rick Antunes   5% shareholder     33,262,800       21 %     15 %
                             
Total owned by officers and directors     109,650,489     68 %     47 %

 

* Less than 1%

 

(1) Based upon 160,623,289 shares outstanding as of the date of this prospectus.

(2) Assumes sale of all 50,573,987 Shares offered, and 160,623,289 shares outstanding following the offering.

(3) Includes 3,200,000 shares held by Multipolaris Corporation, 32,000,000 shares held by Interpolaris Pte. Ltd. and 19,200,000 held by MP Informatikai Kft. Mr. Vago is an officer and principal of each of these entities, and he may be deemed the beneficial owner or the shares held by such entities.

(4) Includes 1,315,940 shares held by Thomas Szoke LLC. Mr. Szoke is an officer and principal of the entity, and he may be deemed the beneficial owner or the shares held by such entity.

(5) Includes 14,400,000 shares held by Walk Think LLC. Mr. Fozzati is an officer and principal of the entity, and he may be deemed the beneficial owner or the shares held by such entity.

 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

James Cassidy, a partner in the law firm which acts as counsel to the Company, is the sole owner and director of Tiber Creek Corporation which owns 250,000 shares of the Company's common stock. Tiber Creek is entitled to receive consulting fees of $100,000 from the Company and also holds shares of common stock in the Company. Tiber Creek and its affiliate, MB Americus LLC, a California limited liability company, each currently hold 250,000 shares in the Company.

 

James Cassidy and James McKillop, who is the sole officer and owner of MB Americus, LLC, were both formerly officers and directors of the Company. As the organizers and developers of Silverwood, Mr. Cassidy and Mr. McKillop were involved with the Company prior to the Acquisition. In particular, Mr. Cassidy provided services to the Company without charge, including preparation and filing of the charter corporate documents and preparation of the registration statement for the Company.

 

In February 2014 the Company assigned Douglas Solomon Power of Attorney to represent and work with appropriate parties to complete the closing of the office building located at 160 E. Lake Brantley Drive, Longwood, FL 32779.

 

In April 2014, the Company entered into a short term promissory note for $310,000 with another entity owned by a related party for the purpose of purchasing the building at 160 E. Lake Brantley Drive, Longwood, FL 32779.

 

SELLING SHAREHOLDERS

 

The Company is registering for offer and sale by existing holders thereof 50,573,987 shares of common stock held by such shareholders. The Company will not receive any proceeds from the sale of the Selling Shareholder Shares. The selling shareholders have no agreement with any underwriters with respect to the sale of the Selling Shareholder Shares. The selling shareholders, who are deemed to be statutory underwriters, will offer their shares at a price of $0.60 per share, until the Company's common stock is listed on a national securities exchange or is quoted on the OTC Bulletin Board (or a successor); after which, the selling shareholders may sell their shares at prevailing market or privately negotiated prices, including (without limitation) in one or more transactions that may take place by ordinary broker's transactions, privately-negotiated transactions or through sales to one or more dealers for resale

 

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The selling shareholders may from time to time offer the Selling Shareholder Shares through underwriters, dealers or agents, which may receive compensation in the form of underwriting discounts, concessions or commissions from them and/or the purchasers of the Selling Shareholder Shares for whom they may act as agents. Any agents, dealers or underwriters that participate in the distribution of the Selling Shareholder Shares may be deemed to be "underwriters" under the Securities Act and any discounts, commissions or concessions received by any such underwriters, dealers or agents might be deemed to be underwriting discounts and commissions under the Securities Act.

 

The following table sets forth ownership of shares held by each person who is a selling shareholder.

 

    Shares Owned Before Offering (1)     Offered Herein     Shares Owned After Offering (2)  
Name   Number     Percentage     Number     Number     Percentage  
                               
David S. Jones                                        
CEO and Director     20,434,549       13 %     6,830,365       13,604,184       8 %
                                         
Douglas W. Solomon     1,500,000       1 %     1,500,000       0       *  
COO and Director                                        
                                         
Thomas Szoke     32,000,000       20 %     9,600,000       22,400,000       14 %
CTO and Director                                      
                                         
Rick Antunes     33,262,800       21 %     9,978,840       23,283,960       15 %
                                         
Luis Barroso     60,000       *       60,000       0       *  
                                         
James Cassidy (3)     250,000       *       250,000       0       *  
                                         
Interpolaris Pte. Ltd. (4)     32,000,000       20 %     9,600,000       22,400,000       14 %
                                         
Danny Katz     60,000       *       60,000       0       *  
                                         
Eric Katz     40,000       *       40,000       0       *  
                                         
James McKillop (5)     250,000       *       250,000       0       *  
                                         
Jon Melzer     250,000       *       250,000       0       *  
                                         
Melba Liliana Gonzalez Molina     2,400,000       1 %     720,000       1,680,000       1 %
                                         
MP Informatikai Kft. (6)     19,200,000       12 %     5,760,000       13,440,000       8 %
                                         
Multipolaris Corporation (7)     3,200,000       2 %     960,000       2,240,000       2 %
                                         
Thomas Szoke LLC (8)     1,315,940       1 %     394,782       921,158       1 %
                                         
WalkThink LLC (9)     14,400,000       9 %     4,320,000       10,080,000       6 %

 

* Less than 1%

 

(1) Based upon 160,623,289 shares outstanding as of the date of this prospectus.

(2) Assumes sale of all 50,573,987 Shares offered, and 160,623,289 shares outstanding following the offering.

(3) Includes 250,000 shares held by Tiber Creek Corporation, a Delaware corporation, which provided certain services to the Company as discussed herein. Mr. Cassidy is the president and sole shareholder of Tiber Creek Corporation.

 

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(4) Mr. Andras Vago is an officer and principal of each of Interpolaris Pte. Ltd, and he may be deemed the beneficial owner of the shares held by this entity.

(5) Includes 250,000 shares held by MB Americus, LLC, a California limited liability company. Mr. McKillop also works with Tiber Creek Corporation from time to time. Mr. McKillop is an officer and the sole shareholder of MB Americus, LLC.

(6) Mr. Andras Vago is an officer and principal of each of MP Informatikai Kft, and he may be deemed the beneficial owner of the shares held by this entity.

(7) Mr. Andras Vago is an officer and principal of each of Multipolaris Corporation, and he may be deemed the beneficial owner of the shares held by this entity.

(8) Mr. Thomas Szoke is an officer and principal of Thomas Szoke LLC, and he may be deemed the beneficial owner or the shares held by such entity.

(9) Mr. Daniel Fozzati is an officer and principal of Walk Think LLC, and he may be deemed the beneficial owner or the shares held by such entity.

 

SHARES ELIGIBLE FOR FUTURE SALE

 

As of the date of this prospectus, there are 160,723,289 shares of common stock outstanding of which 109,650,489 shares are owned by officers and directors of the Company.

 

The shares of common stock held by current shareholders are considered “restricted securities” subject to the limitations of Rule 144 under the Securities Act. In general, securities may be sold pursuant to Rule 144 after being fully-paid and held for more than 12 months. While affiliates of the Company are subject to certain limits in the amount of restricted securities they can sell under Rule 144, there are no such limitations on sales by persons who are not affiliates of the Company. In the event non-affiliated holders elect to sell such shares in the public market, there is likely to be a negative effect on the market price of the Company's securities. However, at present, due to the Company’s previous status as a shell company, shareholders cannot currently rely upon Rule 144 for resales of the Company’s securities (pursuant to Rule 144(i)).

 

Rule 144 establishes specific criteria for determining whether a person is not engaged in a distribution of securities. Among other things, Rule 144 creates a safe harbor whereby a person satisfying the applicable conditions of the Rule 144 safe harbor is deemed not to be engaged in a distribution of the securities and therefore not an underwriter of the securities. If a purchaser of securities is unable to rely upon Rule 144 to sell securities (due to Rule 144(i)), then the securities must be registered or another exemption from registration must be found in order for the distribution of securities to be made. In the event that the securities are not registered or another exemption is not found, a purchaser of securities cannot sell or transfer the shares of common stock in the Company since the Company does not meet the requirements of Rule 144(i)(2).

 

Pursuant to Rule 144(i), reliance upon Rule 144 is typically available for the resale of restricted or unrestricted securities that were initially issued by a reporting or non-reporting shell company (or an issuer that has been at any time previously a reporting or non-reporting shell company) only if the following conditions are met:

· The issuer of the securities that was formerly a reporting or non-reporting shell company has ceased to be a shell company;
· The issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934;
· The issuer of the securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and
· At least one year has elapsed from the time that the issuer filed current Form 10 type information with the Commission reflecting its status as an entity that is not a shell company.

 

LEGAL MATTERS

 

Cassidy & Associates, Beverly Hills, California (“Cassidy & Associates”), has given its opinion as attorneys-at-law regarding the validity of the issuance of the Shares offered by the Company. A member of the law firm of Cassidy & Associates is an officer and director of Tiber Creek Corporation and may be considered the beneficial owner of the 250,000 shares of common stock of the Company owned by Tiber Creek Corporation.

 

Interest of Counsel

 

Cassidy & Associates, counsel for the Company, who has given an opinion upon the validity of the securities being registered and upon other legal matters in connection with the registration or offering of such securities, had, or is to receive in connection with the offering, a substantial interest in the Company and was connected with the Company through Silverwood Acquisition. James Cassidy, a partner of Cassidy & Associates, was a director and officer of Silverwood Acquisition prior to its change of control and subsequent business combination with Innovation in Motion.

 

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EXPERTS

 

Anton & Chia, LLP, an independent registered public accounting firm, has audited the balance sheets of IIM Global Corporation as of December 31, 2013 and December 31, 2012, respectively, and the related statements of operations, changes in members’ equity (deficit), and cash flows for the years ended December 31, 2013 and December 31, 2012, respectively. The Company has included such financial statements in the prospectus and elsewhere in the registration statement in reliance on the report of April 14, 2014, given their authority as experts in accounting and auditing.

 

DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION

FOR SECURITIES ACT LIABILITIES

 

The Company’s certificate of incorporation includes an indemnification provision that provides that the Company shall indemnify directors against monetary damages to the Company or any of its shareholders or others by reason of a breach of the director’s fiduciary duty or otherwise, except under certain limited circumstances.

 

The certificate of incorporation does not specifically indemnify the officers or directors or controlling persons against liability under the Securities Act. However, the indemnification provided in the certificate of incorporation is broad and should be considered to be of a broad scope and wide extent.

 

The Securities and Exchange Commission’s position on indemnification of officers, directors and control persons under the Securities Act by the Company is as follows:

 

INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS AND CONTROLLING PERSONS OF THE SMALL BUSINESS ISSUER PURSUANT TO THE RULES OF THE COMMISSION, OR OTHERWISE, THE SMALL BUSINESS ISSUER HAS BEEN ADVISED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS, THEREFORE, UNENFORCEABLE.

 

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FINANCIAL STATEMENTS  
   
Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013 F-2
   
Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and 2013 (unaudited) F-3
   
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013 (unaudited) F-4
   
Not Notes to Financial Statements (unaudited) F-5 - F-10

 

F- 1
 

 

IIM GLOBAL CORP.

(FORMERLY: SILVERWOOD ACQUISITION CORPORATION)

CONDENSED CONSOLIDATED BALANCE SHEETS

 

             
ASSETS                
    March 31,     December 31,  
    2014     2013  
    (unaudited)        
Current Assets                
Cash   $ 221,351     $ 5,349  
Deposits     103,000       112,000  
Total Current Assets     324,351       117,349  
                 
Property and equipment, net     32,640       38,011  
Intangible, net     395,882       393,146  
                 
Total Assets   $ 752,873     $ 548,506  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current Liabilities                
Accounts payable and accrued expenses   $ 16,531     $ 50,500  
Related party payables     960       16,175  
Promissory notes-related party     600,000       224,625  
Total Current Liabilities     617,491       291,300  
                 
Total Liabilities     617,491       291,300  
                 
                 
Stockholder's Equity                
Common stock, 300,000,000 shares authorized                
  $0.0001 par value, 160,623,289 shares issued and outstanding                
   at March 31, 2014 and December 31, 2013, respectively     16,062       16,062  
Additional paid-in capital     1,731,878       1,731,878  
Accumulated deficit     (1,612,558 )     (1,490,734 )
                 
Total  Stockholder's Equity     135,382       257,206  
                 
Total Liabilities and Stockholders' Equity   $ 752,873     $ 548,506  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

F- 2
 

 

IIM GLOBAL CORP.

(FORMERLY:SILVERWOOD ACQUISITION CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

  

    For the three months ended March 31,  
    2014     2013  
Revenues:                
Product revenues   $ -     $ -  
Support and maintenance revenues     -       -  
Total Revenues     -       -  
                 
Cost of Goods Sold     -       -  
                 
Gross Profit     -       -  
                 
Operating Expenses                
Depreciation and amortization     11,624       10,860  
Research and development     2,474       -  
General and administrative     98,176       288,149  
      112,274       299,009  
                 
Loss from operations     (112,274 )     (299,009 )
                 
Other Income                
Interest income     -       -  
Interest expense     (9,550 )     -  
      (9,550 )     -  
                 
Loss before income taxes     (121,824 )     (299,009 )
                 
Income taxes     -       -  
                 
Net loss   $ (121,824 )   $ (299,009 )
                 
Loss per share - basic and diluted   $ (0.00 )   $ (0.00 )
Weighted average shares - basic and diluted     160,623,289       97,200,000  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

  

F- 3
 


IIM GLOBAL CORP.

(FORMERLY:SILVERWOOD ACQUISITION CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

    For the three months ended March 31,  
    2014     2013  
OPERATING ACTIVITIES:                
Net loss   $ (121,824 )   $ (299,009 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization expense     11,625       10,859  
Changes in assets and liabilities:                
Accounts receivable     -       117,924  
Other assets     9,000       -  
Accounts payable and accrued expenses     (33,969 )     150,508  
Due to related parties     (15,215 )     -  
                 
Net cash used in operating activities     (150,383 )     (19,718 )
                 
INVESTING ACTIVITIES:                
Investment in intangibles     (8,990 )     (9,903 )
                 
Net cash used in investing activities     (8,990 )     (9,903 )
                 
FINANCING ACTIVITIES:                
Proceeds from issuance of related party promissory notes     724,800       -  
Payment of related party promissory notes     (349,425 )     -  
Additional contributed capital     -       16,776  
                 
Net cash provided by financing activities     375,375       16,776  
                 
Net (decrease)/increase in cash     216,002       (12,845 )
                 
CASH AT BEGINNING OF PERIOD     5,349       17,568  
                 
CASH AT END OF PERIOD   $ 221,351     $ 4,723  
                 
Supplmental Disclsoures of cash flow information                
Cash paid for interest   $ 9,550     $ -  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

F- 4
 

 

IIM GLOBAL CORPORATION
Notes to the Consolidated Financial Statements

 

NOTE 1 – DESCRIPTION OF BUSINESS AND MERGER

 

IIM Global Corporation (formerly Silverwood Acquisition Corporation) ("IIM Global" or the "Company") was incorporated on September 21, 2011 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. IIM Global has been in the developmental stage since inception. In addition to a change in control of its management and shareholders, the Company's operations to date have been limited to issuing shares and filing a registration statement on Form 10 pursuant to the Securities Exchange Act of 1934. IIM Global was formed to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.

 

On December 20, 2012, the shareholders of the Corporation and the Board of Directors unanimously approved the change of the Registrant's name to IIM Global Corporation and filed such change with the State of Delaware. The registrant redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $0.0001 per share for an aggregate redemption price of $1,950. The current officers and directors resigned, and a new officer/director was appointed and elected resulting in the change of control of the Company.

 

On August 12, 2013, IIM Global acquired Innovation in Motion Inc., a Florida corporation (“Innovation in Motion”), in a stock-for-stock transaction (the “Acquisition”). The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities.

 

The Acquisition was effected by the Company through the exchange of each of the outstanding shares and interests of Innovation in Motion for 1.6 shares of common stock of the Company. As a result, in the Acquisition, 97,970,562 shares and interests of common stock of Innovation in Motion were exchanged for, and converted into, 156,752,899 shares of common stock of the Company.

 

 Innovation in Motion was formed in April 2009 in the State of Florida, and was a private company operating in two technology fields: the handheld identification market and mobile payment market. Since its inception, Innovation in Motion has provided handheld mobile biometric devices which are used primarily by government and law enforcement agencies to capture and process the unique characteristics of individuals to verify their identities. Additionally, the Company has recently introduced a new highly secured biometric wallet device to store personal data including credit card and banking information to be used in a variety of transactions.  The Company has a business focus in the identification, security and mobile payment businesses, and it had its technology used during the election process in Ghana, Africa. The Company has a range of state-of-the-art products in these fields and has begun serious market penetration with the sale and placement of units.

 

As a result of the Acquisition, Innovation in Motion became a wholly owned subsidiary of the Company. The Company, as the sole shareholder of Innovation in Motion, has taken over the operations and business plans of Innovation in Motion.

 

Reverse Merger Accounting

 

Since former Innovation in Motion security holders owned, after the merger, the majority of IIM Global shares of common stock, and as a result of certain other factors, including that all members of the Company’s executive management are from Innovation in Motion,  Innovation in Motion is deemed to be the acquiring company for accounting purposes and the merger was accounted for as a reverse merger and a recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). These condensed consolidated financial statements reflect the historical results of Innovation in Motion prior to the merger and that of the combined Company following the merger, and do not include the historical financial results of IIM Global prior to the completion of the merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the merger.

 

Going Concern

 

The Company has an accumulated deficit of $1,612,558 as of March 31, 2014. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.

 

F- 5
 

 

These unaudited condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues.

 

Management and shareholders used their personal funds to pay for certain expenses incurred by the Company in 2014. There is no assurance that the Company will ever be profitable. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Condensed Consolidated Financial Statements

 

The accompanying unaudited condensed consolidated financial statements primarily reflect the financial position, results of operations and cash flows of Innovation in Motion (as discussed above). The accompanying unaudited condensed consolidated financial statements of Innovation in Motion have been prepared in accordance with GAAP for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other period.

 

Use of Estimates

 

In preparing these condensed consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments.

 

Concentration of Credit Risk

 

The Company’s financial instruments that potentially expose the Company to a concentration of credit risk consist of cash, accounts payable, accrued expense and a related party payable. The Company’s cash is deposited at a financial institution and insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times during the year, the Company may have exceeded this amount insured by the FDIC.

 

Income Taxes

 

The Company accounts for income taxes under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740 “ Income Taxes.”  Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

 

Property and Equipment, net

 

Property and equipment consisted of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated service lives of three years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property equipment are recorded upon disposal. All property and equipment were purchased by one of the Company’s officers and shareholder and were recorded as additional capital contribution in the accompanying balance sheet. Depreciation expense amounted to $5,371 for the three month periods ended March 31, 2014 and 2013.

 

F- 6
 

 

Intangible Assets

 

Acquired intangible assets are amortized over their useful lives unless the lives are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. Amortization of finite-lived intangible assets is computed over the useful lives of the respective assets. The Company amortizes intangible assets over ten years. Amortization expense amounted to $6,254 and $5,490 for the three month periods ended March 31, 2014 and 2013, respectively.

 

Impairment of Long-Lived Assets

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

 

If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. For the three month periods ended March 31, 2014 and 2013, there were no impairment charges.

 

Revenue Recognition

 

We recognize revenue for our services when each of the following four criteria is met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the seller’s price to the buyer is fixed or determinable; and collectability is reasonably assured. There were no revenues recognized during the three months ended March 31, 2014 and 2013.

 

Net Loss per Common Share

 

The Company computes net loss per share in accordance with ASC 260, " Earnings per Share ". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

Fair Value Measurements

 

ASC 820, “ Fair Value Measurements ”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company had no assets or liabilities required to be recorded at fair value on a recurring basis at March 31, 2014 and December 31, 2013.

 

Share-Based Payment Arrangements

 

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on the estimated number of awards that are ultimately expected to vest. Share-based compensation awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expenses resulting from share-based payments are recorded in operating expenses in the statement of operations.

 

F- 7
 

 

Recent Accounting Pronouncements

 

Adopted

 

In February 2013, FASB issued ASU 2013-04,  Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.   The objective of the amendments in this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for those obligations addressed within existing guidance in U.S. GAAP.  The amendment requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and an additional amount the reporting entity expects to pay on behalf of its co-obligors.  The entity is required to disclose the nature and amount of the obligation as well as other information about those obligations.  The Company adopted this ASU as of January 1, 2014.  This adoption did not have an effect on our financial statements.

 

 Not Adopted

 

In April 2014, the FASB issued ASU 2014-08,  Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity  to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014. The Company currently has operations that are reported as discontinued operations and does not expect the adoption of this guidance to have a material effect on its financial position, results of operations, or cash flows.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

NOTE 3 – INTANGIBLE ASSETS

 

Intangible assets consist of the following:

 

    March 31,
2014
    December 31,
2013
 
    (Unaudited)        
             
HDR   $ 155,045     $ 146,706  
SRIO     102,910       102,259  
Software     200,000       200,000  
      457,955       448,965  
Less amortization     (62,073 )     (55,819 )
                 
    $ 395,882     $ 393,146  

 

Intangible assets consist of legal and global patent registration costs related to the Company’s technology HDR (Handheld biometric mobile devices) and SRIO (Biometric wallet devices).

 

NOTE 4 - DEPOSITS

 

On October 23, 2013, the Company entered into an office building lease with purchase option, the lease is for the Company’s corporate office in Longwood, Florida. The company has the option to purchase the building at the end of the lease for a total purchase price of $430,000 less the non-refundable deposit of $100,000. The remaining $3,000 is for prepaid rent for the remaining term.

 

 

F- 8
 

 

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following:

 

    March 31,
2014
    December 31,
2013
 
    (unaudited)        
             
Accounts payable   $ 8,000     $ 19,638  
Payroll related liabilities     4,707       26,069  
Other current liabilities     3,824       4,803  
                 
    $ 16,531     $ 50,510  
                 
Due to Related Parties   $ 960     $ 16,175  

 

NOTE 6 – PROMISSORY NOTES – RELATED PARTY

 

Promissory notes – related party totaled $600,000 and $224,615 as of March 31, 2014 and December 31, 2013, respectively, as described below:

 

    March 31,
2014
    December 31,
2013
 
    (Unaudited)        
Promissory note issued to a company owned by one of the stockholders in October 2013 with a term of six months and bear interest at the rate of 15%. The proceeds from the note were used to pay the deposit to purchase the Company’s building located in Longwood, Florida. In March 2014 the Company paid the promissory note balance of $120,000.   $     $ 120,000  
                 
Promissory notes issued to two directors in October 2013, in place of the Company’s expense reimbursement, the notes have a term of six months and bear interest at the rate of 15%. In March 2014 the Company paid the promissory notes in the amount of $62,125.           62,125  
                 
Promissory note issued to a stockholder in November 2013 with a term of six months and bear interest at the rate of 15%. In March 2014 the Company paid the promissory note in the amount of $20,000.           20,000  
                 
Promissory note issued to a stockholder in December 2013 with a term of six months and bear interest at the rate of 15%. In March 2014 the Company paid the promissory note in the amount of $22,500.           22,500  
                 
Promissory note issued to a company owned by one of the stockholders in March 2014, due on demand and bear interest at the rate of 15% per annum.     600,000        
    $ 600,000     $ 224,625  

 

F- 9
 

 

NOTE 7 – RESEARCH AND DEVELOPMENT

 

On April 1, 2013, the Company entered into an engineering contract for the hardware and software development of our next generation HDR device called the HDR+.  The device is to be used by government and enterprise customers to capture all forms of machine readable data as well as the facial and fingerprint biometric information of persons. The total development costs for HDR+ will amount to $430,000 which will be financed through equity and debt financing. As of March 31, 2014, the Company has paid $2,474 in cash which has been recorded as research and development expense.

 

NOTE 8 –  STOCK OPTIONS

 

There were no unvested compensation or new stock options granted, exercised or expired during the period ended March 31, 2014.

 

NOTE 9 STOCKHOLDER’S EQUITY (DEFICT)

 

In April 2013, the Company entered into various stockholder subscription agreements with 5 private investors in order to provide working capital for the Company. The agreements stipulate that the shares of common stock will not be issued to the investors until the execution of the reverse merger agreement and subsequent Initial Public Offering. The Company raised $515,000 in cash from the stockholder subscription agreements for the purchase of 1,910,000 shares of common stock. These shares were issued during the quarter ended September 30, 2013.

 

On June 30, 2013, the Company issued 670,562 pre-merger common shares to two officers in settlement of $167,640 of accrued payroll liabilities at a conversion price of $0.25 per share. Additionally, 100,000 pre-merger common shares were issued to one officer in connection with a deferred payment agreement and were recorded as share based compensation under general and administrative expenses in the accompanying statement of operations.

 

On August 12, 2013, IIM Global acquired Innovation in Motion Inc., in a stock-for-stock transaction. The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities.

 

The Acquisition was effected by the Company through the exchange of each of the outstanding shares and interests of Innovation in Motion for 1.6 shares of common stock of the Company. As a result, in the Acquisition, 97,970,562 shares and interests of common stock of Innovation in Motion were exchanged for, and converted into, 156,752,899 shares of common stock of the Company.

 

On September 30, 2013, the Company issued a total of 460,390 common shares to two shareholders to settle approximately $115,000 of accrued liabilities that was owed to these shareholders.

 

NOTE 10 COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leases its building under a six months term lease with an option to buy at the end of the term. During the lease term, the Company is required to make a monthly lease payment of $3,000 per month. Rent expense amounted to $9,000 and $15,281 during the three month periods ended March 31, 2014 and 2013, respectively and ends on May 31, 2014 at which time the Company will purchase the building.

 

Executive Compensation

 

On June 30, 2013, the Company officer agreed to forgive his deferred and accrued salary amounted to $128,456 that was entitled to him under the employment agreement for the period from January to June 2013 and was subsequently included into additional paid in capital because he was a shareholder.

 

On July 1, 2013, the Company’s President and CEO, David Jones, agreed to adjust his total compensation to $1.00 per year and will not receive any other benefits or other forms of compensation which shall be paid by the Company. On February 2014 the Company executed a new Employment Agreement with David Jones, at an annual Salary of $60,000 per year and to include all benefits as offered to any other employee at the time.

 

F- 10
 

 

In February 2014 the Company hired Thomas Szoke and Douglas Solomon to join the company as acting Chief Technology Officer and Chief Operating Officer respectively, at an annual rate of $60,000 per year to include all benefits as offered to any other employee at the time. Votes will be taken at the next full Board of Directors meeting for the appointment of each to the post permanently.

 

Legal Matters

 

From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties and unfavorable outcomes could occur, such as monetary damages, fines, penalties or injunctions prohibiting the Company from selling one or more products or engaging in other activities. The occurrence of an unfavorable outcome in any specific period could have a material adverse effect on the Company’s results of operations for that period or future periods. The Company is not presently a party to any pending or threatened legal proceedings.

 

NOTE 11 SUBSEQUENT EVENTS

 

In March 2014, the Company entered into a consulting agreement with Jamie White an independent contractor hired to provide Mechanical Design services for the development of the company’s new products. The agreement is a month to month agreement at a rate of $1200/week.

 

In April 2014, the Company entered into a consulting agreement with a stockholder whereby the stockholder provides consulting services to the Company. The Company agreed to pay a monthly fee of $8,000 per month for 160 hours of consulting per month. Additional hours incurred by the consultant is charged to the Company at an agreed upon rate. The Company agreed to pay a $30,000 non-refundable retainer.

 

In April 2014, the Company entered into a consulting agreement with James Fegan an independent contractor hired to provide specialized embedded software and hardware design services for the development of the company’s new products. The agreement is valued at a maximum of $88,000 at a rate of $8000/bi-weekly.

 

In February 2014 the Company assigned Douglas Solomon Power of Attorney to represent and work with appropriate parties to complete the closing of the office building located at 160 E. Lake Brantley Drive, Longwood, FL 32779. In April 2014, the Company entered into a short term promissory note for $310,000 with another entity owned by a related party for the purpose of purchasing the building at 160 E. Lake Brantley Drive, Longwood, FL 32779.

 

F- 11
 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders of IIM Global Corporation

 

We have audited the accompanying consolidated balance sheets of IIM Global Corporation (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for each of the years ended December 31, 2013 and 2012. The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2013 and 2012 in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying consolidated financial statements are presented assuming the Company will continue as a going concern. As more fully described in Note 1 to the consolidated financial statements, the Company has sustained accumulated losses from operations totaling approximately $1,491,000 and $515,000 at December 31, 2013 and 2012, respectively. All revenues recognized in 2012 are generated from one project - “Ghana 2010 Election” and are expired after December 31, 2012. These conditions, among others, raise substantial doubt about its ability to continue as a going concern. Management's plans to address these conditions are also set forth in Note 1 to the consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments which might be necessary if the Company is unable to continue as a going concern.

 

/s/ Anton & Chia, LLP

 

Newport Beach, California

 

April 14, 2014

 

F- 12
 

 

IIM GLOBAL CORP.

 

(FORMERLY:SILVERWOOD ACQUISITION CORPORATION)

 

CONSOLIDATED BALANCE SHEETS

 

ASSETS

 

    December 31,     December 31,  
    2013     2012  
Current Assets                
Cash   $ 5,349     $ 17,568  
Accounts receivable     -       117,924  
Other current assets     112,000       -  
Total Current Assets     117,349       135,492  
                 
Property and equipment, net     38,011       59,492  
Intangible, net     393,146       184,333  
                 
Total Assets   $ 548,506     $ 379,317  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Current Liabilities                
Accounts payable and accrued expenses   $ 50,510     $ 90,048  
Related party payables     16,175       13,560  
Promissory notes-related party     224,615       -  
Total Current Liabilities     291,300       103,608  
                 
Total Liabilities     291,300       103,608  
                 
Stockholder's Equity                
Common stock, 300,000,000 shares authorized                
$0.0001 par value, 160,623,289 and 1,500,000 shares issued and outstanding                
at December 31, 2013 and 2012 (*), respectively     16,062       150  
Additional paid-in capital     1,731,878       790,055  
Accumulated deficit     (1,490,734 )     (514,496 )
Total Stockholder's Equity     257,206       275,709  
                 
Total Liabilities and Stockholders' Equity   $ 548,506     $ 379,317  

  

* The December 31, 2012 capital accounts of the Company have been retroactively restated to reflect the equivalent number of common shares based on the exchange ratio of the merger transaction. See Note 2.

 

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

 

F- 13
 

 

IIM GLOBAL CORP.

 

(FORMERLY:SILVERWOOD ACQUISITION CORPORATION)

CONSOLIDATED STATEMENTS OF OPERATIONS

 

    December 31,  
    2013     2012  
Revenues:                
Product revenues   $ -     $ 7,695,067  
Support and maintenance revenues     -       -  
Total Revenues     -       7,695,067  
                 
Cost of Goods Sold     -       6,500,195  
                 
Gross Profit     -       1,194,872  
                 
Operating Expenses                
Depreciation and amortization     44,530       42,014  
Research and development     44,000       -  
General and administrative     882,925       960,545  
      971,455       1,002,559  
                 
(Loss)/Income from operations     (971,455 )     192,313  
                 
Other Income                
Interest income     20       -  
Interest expense     (4,803 )     -  
      (4,783 )     -  
                 
(Loss)/income before income taxes     (976,238 )     192,313  
                 
Income taxes     -       -  
                 
Net (loss)/Income   $ (976,238 )   $ 192,313  
(Loss)/earnings per share - basic and diluted   $ (0.02 )   $ 0.01  
Weighted average shares - basic and diluted (*)     63,650,780       19,439,726  

 

 

* The capital accounts of the Company have been retroactively restated to reflect the equivalent number of common shares based on the exchange ratio of the merger transaction in determining the basic and diluted weighted average shares. See Note 2

 

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

 

F- 14
 

 

IIM GLOBAL CORP.

 

(FORMERLY:SILVERWOOD ACQUISITION CORPORATION)

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

 

                Common     Additional           Total  
    Common Stock     Stock     Paid-In     Accumulated     Stockholders'  
    Shares     Amount     Subscribed     Capital     Deficit     Equity  
Balance December 31, 2011     20,000,000       2,000       -       1,052,159       (708,309 )     345,850  
                                                 
Issuance of shares upon exercise of stock options     9,000,000       900       -       (100 )     -       800  
                                                 
Issuance of shares for cash     1,000,000       100       -       -       -       100  
                                                 
Redemption of common stock     (19,500,000 )     (1,950 )     -       -       -       (1,950 )
                                                 
Additional contributed capital     -       -       -       (262,854 )     -       (262,854 )
                                                 
Recapitalization     (9,000,000 )     (900 )     -       850       1,500       1,450  
                                                 
Net income     -       -       -       -       192,313       192,313  
                                                 
Balance-December 31, 2012 *     1,500,000     $ 150     $ -     $ 790,055     $ (514,496 )   $ 275,709  
                                                 
Issuance of shares to settle liabilities     460,390       46       -       115,051       -       115,097  
                                                 
Debt forgiven by related parties                             128,456               128,456  
                                                 
Issuance of shares for cash     1,910,000       191       (515,000 )     514,809       -       -  
                                                 
Common stock subscribed     -       -       515,000       -       -       515,000  
                                                 
Stock issued upon reverse merger     156,752,899       15,675       -       183,507       -       199,182  
                                                 
Net loss     -       -       -       -       (976,238 )     (976,238 )
                                                 
Balance-December 31, 2013     160,623,289     $ 16,062     $ -     $ 1,731,878     $ (1,490,734 )   $ 257,206  

 

* The December 31, 2012 capital accounts of the Company have been retroactively restated to reflect the equivalent number of common shares based on the exchange ratio of the merger transaction. See Note 2.

 

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

 

F- 15
 

 

IIM GLOBAL CORP.

 

(FORMERLY:SILVERWOOD ACQUISITION CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    December 31,  
OPERATING ACTIVITIES:   2013     2012  
Net (loss)/income   $ (976,238 )   $ 192,313  
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization expense     44,530       42,014  
Changes in assets and liabilities:                
Accounts receivable     117,924       (117,924 )
Other assets     (112,000 )     -  
Accounts payable and accrued expenses     (39,538 )     50,239  
Due to related parties     64,730       13,560  
                 
Net cash (used in)/provided by operating activities     (900,592 )     180,202  
                 
INVESTING ACTIVITIES:                
Loan receivable     -       (245,865 )
Investment in intangibles     (231,860 )     (102,203 )
                 
Net cash used in investing activities     (231,860 )     (348,068 )
                 
FINANCING ACTIVITIES:                
Proceeds from issuance of common stock     515,000       800  
Proceeds from issuance of promissory notes     162,500       -  
Issuance of common stock to settle liabilities     115,097       -  
Debt forgiven by related parties     128,456       -  
Shares issued upon reverse merger     199,180       -  
Additional contributed capital     -       180,230  
Net cash provided by financing activities     1,120,233       181,030  
Net (decrease)/increase in cash     (12,219 )     13,164  
CASH AT BEGINNING OF PERIOD     17,568       4,404  
CASH AT END OF PERIOD   $ 5,349     $ 17,568  
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES:                
Stock issued to settle consulting fees   $ 115,098     $ -  
Stock issued to effect reverse merger   $ -     $ -  

 

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

 

F- 16
 

  

1. OVERVIEW

 

Description of business and merger

 

IIM Global Corporation (formerly Silverwood Acquisition Corporation) ("IIM Global" or the "Company") was incorporated on September 21, 2011 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. IIM Global has been in the developmental stage since inception. In addition to a change in control of its management and shareholders, the Company's operations to date have been limited to issuing shares and filing a registration statement on Form 10 pursuant to the Securities Exchange Act of 1934. IIM Global was formed to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934.

 

On December 20, 2012, the shareholders of the Corporation and the Board of Directors unanimously approved the change of the Registrant's name to IIM Global Corporation and filed such change with the State of Delaware. The registrant redeemed an aggregate of 19,500,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $0.0001 per share for an aggregate redemption price of $1,950. The current officers and directors resigned, and a new officer/director was appointed and elected resulting in the change of control of the Company.

 

On August 12, 2013, IIM Global acquired Innovation in Motion Inc., a Florida corporation (“Innovation in Motion”), in a stock-for-stock transaction (the “Acquisition”). The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities.

 

The Acquisition was effected by the Company through the exchange of each of the outstanding shares and interests of Innovation in Motion for 1.6 shares of common stock of the Company. As a result, in the Acquisition, 97,970,562 shares and interests of common stock of Innovation in Motion were exchanged for, and converted into, 156,752,899 shares of common stock of the Company.

 

Innovation in Motion was formed in April 2009 in the State of Florida, and was a private company operating in two technology fields: the handheld identification market and mobile payment market. Since its inception, Innovation in Motion has provided handheld mobile biometric devices which are used primarily by government and law enforcement agencies to capture and process the unique characteristics of individuals to verify their identities. Additionally, the Company has recently introduced a new highly secured biometric wallet device to store personal data including credit card and banking information to be used in a variety of transactions.  The Company has a business focus in the identification, security and mobile payment businesses, and it had its technology used during the election process in Ghana, Africa. The Company has a range of state-of-the-art products in these fields and has begun serious market penetration with the sale and placement of units.

 

As a result of the Acquisition, Innovation in Motion became a wholly owned subsidiary of the Company. The Company, as the sole shareholder of Innovation in Motion, has taken over the operations and business plans of Innovation in Motion.

  

F- 17
 

 

1. OVERVIEW ( continued )

 

Reverse Merger Accounting

 

Since former Innovation in Motion security holders owned, after the merger, the majority of IIM Global shares of common stock, and as a result of certain other factors, including that all members of the Company’s executive management are from Innovation in Motion,  Innovation in Motion is deemed to be the acquiring company for accounting purposes and the merger was accounted for as a reverse merger and a recapitalization in accordance with generally accepted accounting principles in the United States (“GAAP”). These consolidated financial statements reflect the historical results of Innovation in Motion prior to the merger and that of the combined Company following the merger, and do not include the historical financial results of IIM Global prior to the completion of the merger. Common stock and the corresponding capital amounts of the Company pre-merger have been retroactively restated as capital stock shares reflecting the exchange ratio in the merger.

 

Going Concern

 

The Company has an accumulated deficit of $1,490,734 as of December 31, 2013. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.

 

These financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations, successfully locating and negotiating with other business entities for potential acquisition and /or acquiring new clients to generate revenues.

 

Management and shareholders used their personal funds to pay for certain expenses incurred by the Company in 2013. There is no assurance that the Company will ever be profitable. These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The summary of significant accounting policies presented below is designed to assist in understanding the Company’s consolidated financial statements. Such consolidated financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) in all material respects, and have been consistently applied in preparing the accompanying consolidated financial statements.

 

Use of Estimates

 

In preparing these consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates and assumptions included in our consolidated financial statements relate to the valuation of long-lived assets, accruals for potential liabilities, and valuation assumptions related to equity instruments and share based payments.

 

F- 18
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( continued )

 

Fair Value Measurements

 

ASC 820, “ Fair Value Measurements ”, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, inputs other than level one that are either directly or indirectly observable such as quoted prices for identical or similar assets or liabilities on markets that are not active; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company had no assets or liabilities required to be recorded at fair value on a recurring basis as of December 31, 2013 and 2012.

 

Cash and Cash Equivalents

 

The Company considers all highly-liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of December 31, 2013 and 2012.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit.

 

Concentration of Revenues and Accounts Receivables

 

In 2012, one customer accounted for 100% of revenues and accounts receivable and one vendor accounted for 100% of cost of sales and purchases. There was no sales activity for the year ended December 31, 2013.

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.  During the second half of fiscal year 2012, the Company entered into an agreement to provide biometric verification solutions for the “Ghana 2012 Election”, in connection with this agreement, the Company entered into another agreement to outsource the manufacturing of the hardware component (handheld devices). The manufacturer of the handheld devices also covers the warranty on any defective units for a period of twelve months. All services requested under the Ghana 2012 Election project were delivered and accepted in 2012 and management does not expect any future commitment or involvement and accordingly all revenues and related costs related to this agreement were recorded during the first half of the year ended December 31, 2012. There were no revenues generated during the year ended December 31, 2013.

 

F- 19
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Income Taxes

 

Under ASC 740, "Income Taxes", deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2013 and 2012, there were no deferred taxes.

 

Share Based Compensation

 

The Company applies ASC 718, Shares-Based Compensation to account for its service providers’ share-based payments.  Common stock of the Company was given to service providers to retain their assistance in becoming a U.S. public company, assistance with public company regulations, investors’ communications and public relations with broker-dealers, market makers and other professional services.

 

In accordance with ASC 718, the Company determines whether a share payment should be classified and accounted for as a liability award or equity award.  All grants of share-based payments to service providers classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using historical pricing.  The Company has elected to recognize compensation expense based on the criteria that the stock awards vest immediately on the issuance date.  ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent period if actual forfeitures differ from initial estimates.  There were no forfeitures of share based compensation.

 

Net Income (Loss) per Common Share

 

The Company computes net income (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings (loss) per share on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

Property and Equipment, net

 

Property and equipment consisted of furniture and fixtures and computer equipment, and are stated at cost. Property and equipment are depreciated using the straight-line method over the estimated service lives of three years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of property equipment are recorded upon disposal. All property equipment were purchased by one of the Company’s officers and shareholder and were recorded as additional capital contribution in the accompanying balance sheet. Depreciation expense amounted to $21,482 for each of the years ended December 31, 2013 and 2012.

 

F- 20
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Intangible Assets

 

Acquired intangible assets are amortized over their useful lives unless the lives are determined to be indefinite. Acquired intangible assets are carried at cost, less accumulated amortization. Amortization of finite-lived intangible assets is computed over the useful lives of the respective assets. The Company amortizes intangible assets over ten years. Amortization expense amounted to $23,074 and $20,532 for the years ended December 31, 2013 and 2012, respectively.

 

Impairment of Long-Lived Assets

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset.

 

If the carrying amount of an asset exceeds its undiscounted estimated future cash flows, an impairment review is performed. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. For the years ended December 31, 2013 and 2012, there were no impairment charges.

 

Recent Accounting Pronouncements

 

Adopted

 

Effective January 2013, we adopted FASB ASU No. 2011-11, Balance Sheet (Topic 210):  Disclosures about Offsetting Assets and Liabilities (ASU 2011-11).  The amendments in ASU 2011-11 require the disclosure of information on offsetting and related arrangements for financial and derivative instruments to enable users of its financial statements to understand the effect of those arrangements on its financial position.  Amendments under ASU 2011-11 will be applied retrospectively for fiscal years, and interim periods within those years, beginning after January 1, 2013.  The adoption of this update did not have a material impact on the consolidated financial statements.

 

Effective January 2013, we adopted FASB ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02).  This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI).  The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income.  However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto.  Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail.  This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012.  The adoption of this update did not have a material impact on the consolidated financial statements.

 

Not Adopted

 

In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this Update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendment in this standard is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-04 will have on our consolidated financial statements.

 

F- 21
 

  

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (continued)

   

Not Adopted ( continued )

 

In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. We are evaluating the effect, if any, adoption of ASU No. 2013-07 will have on our consolidated financial statements.  

 

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Top 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The objective of ASU No. 2013-11 is to provide guidance on the financial statement presentation of an unrecognized tax benefit when a net loss carryforward, similar tax loss, or tax credit carryforward exists. The amendments in this standard is effective for all entities that have unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists for fiscal years, and interim periods beginning after December 15, 2013. We are evaluating the effect, if any, adoption of ASU No. 2013-11 will have on our consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

3. OTHER CURRENT ASSETS

 

On October 23, 2013 the Company entered into an office building lease with purchase option, the lease is for the Company’s corporate office in Longwood, Florida. The Company has the option to purchase the building at the end of the 6 months lease term for a total purchase price of $430,000 less the non-refundable deposit that was paid on the lease initiation. The amount of the deposit and prepaid lease amounted to $112,000 as of December 31, 2013.

 

4. PROPERTY & EQUIPMENT

 

Property and equipment consist of the following as of December 31, 2013 and 2012:

 

    2013     2012  
             
Computer   $ 32,035     $ 32,035  
Furniture     54,016       54,016  
      86,051       86,051  
Less depreciation     (48,040 )     (26,559 )
                 
    $ 38,011     $ 59,492  

 

F- 22
 

 

5. INTANGIBLE ASSETS

 

Intangible assets consist of the following as of December 31, 2013 and 2012:

 

    2013     2012  
             
HDR   $ 146,706     $ 130,432  
SRIO     102,259       86,673  
Software     200,000       -  
      448,965       217,105  
Less amortization     (55,819 )     (32,772 )
                 
    $ 393,146     $ 184,333  

 

Intangible assets consist of legal and global patent registration costs related to the Company’s technology HDR (Handheld biometric mobile devices) and SRIO (Biometric wallet devices).

 

In April 2013, the Company purchased software from an unrelated third party for $200,000 in cash. The software purchased is an Android platform application which provides the capability to make NFC type of payment transactions on Point of Sale terminals.  The Company plans to incorporate this software into our SRIO product to be sold along with the actual device.

 

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

Accounts payable and accrued expenses consist of the following as of December 31, 2013 and 2012:

 

    2013     2012  
             
Accounts payable   $ 19,638     $ 67,403  
Payroll related liabilities     26,069       5,869  
Other current liabilities     4,803       16,776  
                 
Total Accrued Payable and Accrued Expenses   $ 50,510     $ 90,048  
                 
Due to Related Parties   $ 16,175     $ 13,560  

  

On January 2, 2013 the Company entered into a deferred payment agreement with two Company officers, under the terms of the deferred payment agreement the two officers agreed to defer their monthly compensation payments including expenses for a period of up to six months from the date of the agreement. As an incentive to the two officers to enter into this agreement, the Company agreed to issue the first officer 100,000 of the Company’s pre-merger common shares which were issued on June 30, 2013 and recoded as share based compensation, additionally, the Company granted the second officer the right to convert any and all amounts owed to him under this agreement into the Company’s common shares at a conversion rate of $0.25 per share. Total amount deferred under this agreement was $296,096 as of June 30, 2013.

 

On June 30, 2013, the Company entered into a new agreement with the two officers whereby an amount of $167,640 of the deferred payment liability was converted to Company’s common stock at a price of $0.25 which resulted in the issuance of 670,562 pre-merger common shares. Additionally, one officer forgave the remaining portion of his deferred payment of $128,456 which resulted in the Company recording additional paid in capital for the amount forgiven in the accompanying balance sheet for the year ended December 31, 2013 because this officer was a shareholder.

 

F- 23
 

 

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Continued)

 

On September 30, 2013, the Company issued a total of 460,390 common shares to two shareholders to settle approximately $115,000 of accrued liabilities that was owed to these shareholders.

 

7. RESEARCH AND DEVELOPMENT

 

On April 1, 2013, the Company entered into an engineering contract for the hardware and software development of our next generation HDR device called the HDR+.  The device is to be used by government and enterprise customers to capture all forms of machine readable data as well as the facial and fingerprint biometric information of persons. The total development costs for HDR+ will amount to approximately $430,000. As of December 31, 2013, the Company has paid $44,000 in cash which has been recorded as research and development expense.

 

8. PROMISSORY NOTES – RELATED PARTY

 

Promissory notes – related party totaled $240,790 and $0 as of December 31, 2013 and 2012, respectively, as described below:

 

    2013     2012  
             
Promissory note issued to a company owned by one of the stockholders in October 2013 with a term of six months and bear interest at the rate of 15%. The proceeds from the note were used to pay the deposit to purchase the Company’s building located in Longwood, Florida (see Note 3)   $ 120,000     $ -  
                 
Promissory notes issued to two directors in October 2013, in place of the Company’s expense reimbursement, the notes have a term of six months and bear interest at the rate of 15%.     62,125       -  
                 
Promissory note issued to a stockholder in November 2013 with a term of six months and bear interest at the rate of 15%.     20,000       -  
                 
Promissory note issued to a stockholder in December 2013 with a term of six months and bear interest at the rate of 15%.     22,500       -  
                 
    $ 224,625     $ -  

  

F- 24
 

  

9. STOCK OPTIONS

 

There was no unvested compensation as of December 31, 2013 and 2012. The Company granted 0 and 4,000,000 stock options to Directors during the years ended December 31, 2013 and 2012, respectively. Compensation expense related to stock options granted was insignificant during the year ended December 31, 2012. Stock options exercised were 0 and 4,000,000 (pre-stock split) during the years ended December 31, 2013 and 2012, respectively.

 

There were no stock options granted during 2013. For the year ended December 31, 2012, the fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Because the Black-Scholes option valuation model incorporate ranges of assumptions for inputs, those ranges are disclosed. Expected volatilities are based on historical volatilities of the comparable publicly traded companies. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted is derived from estimates and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

 

    December 31, 2012  
Expected Volatility     75 %
Expected dividends     −%  
Expected terms (in years)     1  
Risk-free rate     0.16 %
Forfeiture rate     −%  

 

A summary of (pre-stock split) option activity as of December 31, 2012 and changes during the year then ended is presented below:

 

    Options     Weighted-
Average
Exercise
Price
    Average
Remaining
Contractual
Life (Years)
    Aggregate
Intrinsic
Value
 
Outstanding at December 31, 2011     -     $ -       -     $ -  
Granted     4,000,000       0.0002       1.00       -  
Exercised     (4,000,000 )     0.0002       1.00       -  
Forfeited or expired     -       -       -       -  
                                 
Outstanding at December 31, 2012     -     $ -       -     $ -  
                                 
Exercisable at December 31, 2012     -     $ -       -     $ -  

 

There was no stock option activity for the year ended December 31, 2013.

 

F- 25
 

  

10. INCOME TAXES

 

Our provisions for income taxes for the years ended December 31, 2013 and 2012, respectively, were as follows (using our blended effective Federal and State income tax rate of 35.0%):

 

    2013     2012  
             
Current Tax Provision:                
Federal and state                
Taxable income   $ -     $ -  
Total current tax provision   $ -     $ -  
                 
Deferred Tax Provision:                
Federal and state                
Net loss carryforwards   $ (1,491,000 )   $ (514,000 )
Change in valuation allowance     1,491,000       514,000  
Total deferred tax provision   $ -     $ -  

  

Deferred tax assets at December 31, 2013 and 2012 consisted of the following:

 

    2013     2012  
Deferred tax assets:                
Net operating loss carryforwards   $ 522,000     $ 180,000  
                 
Valuation allowance     (522,000 )     (180,000 )
                 
Net deferred tax assets   $ -     $ -  

 

Internal Revenue Code Section 382 and similar California rules place a limitation on the amount of taxable income that can be offset by net operating loss carryforwards (“NOL”) after a change in control (generally greater than a 50% change in ownership). Transactions such as planned future sales of our common stock may be included in determining such a change in control. These factors give rise to uncertainty as to whether the net deferred tax assets are realizable. We have approximately $1,491,000 in NOL at December 31, 2013 that will begin to expire in 2029 for federal and state purposes and could be limited for use under IRC Section 382. We have recorded a valuation allowance against the entire net deferred tax asset balance due because we believe there exists a substantial doubt that we will be able to realize the benefits due to our lack of a history of earnings and due to possible limitations under IRC Section 382. A reconciliation of the expected tax benefit computed at the U.S. federal and state statutory income tax rates to our tax benefit for the years ended December 31, 2013 and 2012 is as follows:

 

F- 26
 

 

10. INCOME TAXES ( continued )

 

    Years ended December 31,  
    2013     2012  
                   
Federal income tax rate at 35%   $ (522,000 )     35.0 %   $ (180,000 )     35.0 %
State income tax, net of federal benefit     -       -  %       -       -  %  
Change in valuation allowance     522,000       (35.0 )%     180,000       (35.0 )%
                                 
Benefit for income taxes   $ -       -  %     $ -       -  %  

 

We file income tax returns in the U.S. with varying statutes of limitations. Our policy is to recognize interest expense and penalties related to income tax matters as a component of our provision for income taxes. There were no accrued interest and penalties associated with uncertain tax positions as of December 31, 2013 and 2012. We have no unrecognized tax benefits and thus no interest or penalties included in the financial statements.

 

11. STOCKHOLDER’S EQUITY

 

During the year ended December 31, 2012, the Company issued 9,000,000 shares to three officers and directors related to exercise of their stock options at an exercise price of $0.0002 per share.

 

On December 20, 2012, the Company redeemed an aggregate of 19,500,000 of the outstanding stock at a redemption price of $0.0001 per share for an aggregate redemption price of $1,950.

 

On December 21, 2012, the Company issued 1,000,000 shares to an officer of the company at $0.0001.

 

In April 2013, the Company entered into various stockholder subscription agreements with 5 private investors in order to provide working capital for the Company. The agreements stipulate that the shares of common stock will not be issued to the investors until the execution of the reverse merger agreement and subsequent Initial Public Offering. The Company raised $515,000 in cash from the stockholder subscription agreements for the purchase of 1,910,000 shares of common stock. These shares were issued during the quarter ended September 30, 2013.

 

On August 12, 2013, IIM Global acquired Innovation in Motion Inc., in a stock-for-stock transaction. The purpose of the Acquisition was to facilitate and prepare the Company for a registration statement and/or public offering of securities. The Acquisition was effected by the Company through the exchange of each of the outstanding shares and interests of Innovation in Motion for 1.6 shares of common stock of the Company. As a result, in the Acquisition, 97,970,562 shares and interests of common stock of Innovation in Motion were exchanged for, and converted into, 156,664,943 shares of common stock of the Company.

 

On September 30, 2013, the Company issued a total of 460,390 common shares to two shareholders to settle approximately $115,000 of accrued liabilities that was owed to these shareholders.

  

F- 27
 

 

12. COMMITMENTS AND CONTINGENCIES

 

Operating Leases

 

The Company leases its building under a six months term lease with an option to buy at the end of the term (see Note 3). During the lease term, the Company is required to make a monthly lease payment of $3,000 per month. Rent expense amounted to $62,084 and $8,680 during the years ended December 31, 2013 and 2012, respectively.

 

Executive Compensation

 

On October 1, 2011, an employment agreement was executed with a Company officer for a base salary of $210,000 per year. The officer is also entitled to an annual bonus which is based on performance and attaining certain operational milestones.

 

On June 30, 2013, the Company officer agreed to forgive his deferred and accrued salary amounted to $128,456 that was entitled to him under the employment agreement for the period from January to June 2013 (see Note 6) and was subsequently included into additional paid in capital because he was a shareholder.

 

On July 1, 2013, the Company officer agreed to adjust his total compensation to $1.00 per year and will not receive no other benefits or other forms of compensation which shall be paid by the Company.

 

13. SUBSEQUENT EVENTS

 

On February 13, 2014 the Company filed a registration statement on Form S-1 for the offer and sale by certain shareholders of 58,673,987 shares of common stock held by those shareholders at a price of $0.60. The registration statement is not effective at the time of filling this Report and no sales can be made there from.

 

On March 31, 2014 IIM Global was able to raise $600,000.00 in capital as a six month bridge loan from Penn Investments Inc.

 

F- 28
 

 

PART II

 

Item 13. Other expenses of Issuance and Distribution

 

The following table sets forth the Company’s expenses in connection with this registration statement. All of the listed expenses are estimates, other than the filing fees payable to the Securities and Exchange Commission.

 

Registration Fees   $ 4,534  
State filing fees   $ 3,000  
Edgarizing fees   $ 2,500  
Transfer agent fees   $ 5,000  
Accounting fees   $ 35,000  
Legal fees   $ 100,000  
Printing   $ 1,000  

 

Item 14. Indemnification of Directors and Officers

 

The Company's certificate of incorporation, by-laws and other contracts provide for indemnification of its officers, directors, agents, fiduciaries and employees. These provisions allow the Company to pay for the expenses of these persons in connection with legal proceedings brought because of the person's position with the Company. The Company does not believe that such indemnification affects the capacity of such person acting as officer, director or control person of the Company.

 

Item 15. Recent Sales of Unregistered Securities

 

The Company has issued the following securities in the last three (3) years. All such securities were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, as a transaction by an issuer not involving any public offering, as noted below. Each of these transactions was issued as part of a private placement of securities by the Company in which (i) no general advertising or solicitation was used, and (ii) the investors purchasing securities were acquiring the same for investment purposes only, without a view to resale. Furthermore, no underwriters participated or effectuated any of the transactions specified below. Also, no underwriting discounts or commissions applied to any of the transactions set forth below. All potential investors were contacted personally and possessed at the time of their investment bona fide substantive, pre-existing business relationships with the Company and/or its officers, directors and affiliates. No potential investors were contacted through other means, and no general advertising or general solicitation was used to solicit any investors.

 

(1) On September 21, 2011, 10,000,000 shares of common stock were issued to Tiber Creek Corporation for total consideration paid of $1,000.00. Subsequently, on December 20, 2012, the Company redeemed an aggregate of 9,750,000 of these shares for the redemption price of $975.00

 

On September 21, 2011, 10,000,000 shares of common stock were issued to MB Americus, LLC for total consideration paid of $1,000.00. Subsequently, on December 20, 2012, the Company redeemed an aggregate of 9,750,000 of these shares for the redemption price of $975.00

 

(2) On December 21, 2012, 1,000,000 shares of common stock were issued by the Company to David S. Jones pursuant to a change of control in the Company.

 

(3) On August 12, 2013, the Company issued 156,603,323 shares of common stock in connection with the Acquisition, as follows:

 

Shareholder Name   Number of Shares  
       
Multipolaris Corporation     3,200,000  
Interpolaris Pte. Ltd.     32,000,000  
MP Informatikai Kft.     19,200,000  
Thomas Szoke     32,000,000  
Thomas Szoke LLC     923,323  
WalkThink LLC     14,400,000  
Rick Antunes     33,120,000  
David S. Jones     19,360,000  
Melba Liliana Gonzalez Molina     2,400,000  

 

34
 

 

(4) In connection with the Acquisition, the Company issued in September 2013 a total of 149,576 shares in aggregate to David S. Jones and Thomas Szoke, LLC relating to previous shares to be provided to these holders in settlement of accrued payroll liabilities from June 2013.

 

(5) On September 30, 2013, the Company issued a total of 460,390 common shares to two people to settle approximately $115,000 of accrued liabilities.

 

(6) From September 30, 2013, the Company issued a total of 1,910,000 shares of common stock, as follows:

 

Shareholder Name   Number of Shares  
       
Jon Melzer     250,000  
Eric Katz     40,000  
Danny Katz     60,000  
Luis Barroso     60,000  
Douglas W. Solomon     1,500,000  

 

Item 16. Exhibits and Financial Statement Schedules.

 

EXHIBITS

 

2.1++   Agreement and Plan of Reorganzation
3.1+   Certificate of Incorporation
3.2+   By-laws
5.1**   Opinion of Counsel on legality of securities being registered
10.1+++   Assignment of Patents
10.2+++   Assignment of Patents
10.3+++   Assignment of Patents
10.4   Employment Agreement of David Jones
10.5   Employment Agreement of Douglas Solomon
10.6   Employment Agreement of Thomas Szoke
10.7   Promissory Note
10.8   Flextronics Manufacturing Services Agreement
23.1   Consent of Accountants
23.4**   Consent of Attorney (as part of Exhibit 5.1)

  

 

** To be filed

+ Previously filed on Form 10-12G on November 9, 2011 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.
++ Previously filed on Form 8-K on August 13, 2013 (File No.: 000-54545) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.
+++ Previously filed on Form S-1 on February 13, 2014 (File No.: 333-193924) as the same exhibit number as the exhibit number listed here, and incorporated herein by this reference.

 

Item 17. Undertakings

 

The undersigned registrant hereby undertakes:

1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i. To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

 

35
 

 

iii. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. 

4. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

36
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized on May 20, 2014.

 

    IIM GLOBAL CORPORATION
     
  By: /s/ David S. Jones
    Title: President (Principal Executive Officer)
     
  By: /s/ David S. Jones
    Title: Treasurer (Principal Financial Officer)
     
  By: /s/ David S. Jones
    Title: Treasurer (Principal Accounting Officer)

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons, constituting all of the members of the board of directors, in the capacities and on the dates indicated.

 

Signature   Capacity   Date
         
/s/ David S. Jones   Director   May 20, 2014
         
/s/ Douglas Solomon   Director   May 20, 2014
         
/s/ Andras Vago   Director   May 20, 2014
         
/s/ Thomas Szoke   Director   May 20, 2014
         
/s/ Haraldo Artmann   Director   May 20, 2014

 

37

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (hereinafter the ''Agreement") is made and entered into on February 27, 2014 with a start date of March 1, 2014 between IIM Global Corporation, a Delaware corporation, (the "Company''), whose principal place of business is 160 E. Lake Brantley Drive, Longwood, Florida 32779, and David S. Jones an individual (the "Executive") whose address is 6709 Oakwood Manor Drive, Crystal Lake, IL 60012 USA.

 

RECITALS:

 

a. The Company provides government and commercial identification security and mobile wallet technology design, manufacturing, sale and installation/support services ("The Business").

 

b. The Executive has extensive experience in the industry and The Company wishes to employ the executive based on the terms and title listed below.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements here in made, the Company and the Executive hereby agree as follows:

 

1. EMPLOYMENT.

 

The Company hereby agrees to initially employ the Executive and the Executive hereby accepts such employment in his capacity of President and CEO (Chief Executive Officer) of IIM Global Corporation. According to the terms and conditions of this Agreement.

 

a) Duties.

The Executive shall report directly to the Board of Directors of IIM Global Corporation. The duties of the Executive shall include the performance of all of the duties typical of the office held by Executive and such other duties that may be assigned by the board of directors of the Company.

 

Executive shall devote his entire productive time, ability and attention to the business of the Company and shall perform all duties in a professional, ethical and business like manner.

 

Executive will not during the term of this Agreement, directly or indirectly engage in any other business, either as an employee, employer, consultant, principal, officer, director, advisor or in any other capacity, either with or without compensation, without the prior written consent of Company.

 

 
 

 

2. COMPENSATION/BENEF1TS.

 

a. Salary. The Company shall pay Executive a base salary (the "Base Salary") of $60,000.00 (sixty thousand) US Dollar per year, payable according to the Company's regular payroll schedule. The base salary shall be adjusted at the end of each year of employment at the discretion of the board of directors.

 

b. Performance Bonus: Based on the Executive's performance The Board of Directors of the Company at its own discretion may award the Executive quarterly and/or annual bonuses

 

c. Employee Benefits: The Executive shall be entitled to participate in all benefit programs of the Company currently existing or hereafter made available to executives and/or other executive employees, subject to the eligibility requirements, restrictions and limitations of any such programs.

 

d. Vacation: The Executive shall be entitled to ten days (2 weeks) of vacation. lf the vacation time is accrued but not taken within 2 months after the end of the fiscal year (December 31), it may not be carried over into the remaining portion of the next fiscal year and the company shall have no obligation for the payment of any monies for any accrued but unused vacation. If it is Management may at its own discretion allow the Executive to carry forward to the following year any remaining.

 

e. Sick Leave. Executive shall be entitled to sick leave and emergency leave according to the regular policies and procedures of Company. Additional sick leave or emergency leave over and above paid leave provided by the Company, if any, shall be unpaid and shall be granted at the discretion of the board of directors.

 

f. Expense Reimbursement. Executive shall be entitled to reimbursement for all reasonable expenses, including travel and entertainment, incurred by Executive in the performance of Executive’s duties. Executive will maintain records and written receipts as required by the Company pol icy and reasonably requested by the board of directors to substantiate such expenses. All expense repayments must be submitted within 45 days of expenses being incurred.

 

g. Equipment. The Executive will be provided upon employment, with a portable cellular telephone, and laptop computer.

 

2
 

 

3. TERM

 

Notwithstanding anything to the contrary herein, the term of employment under this Agreement will commence on March 1, 2014, and end three (3) years thereafter on February 28, 2017 (the "TERM"), unless terminated sooner pursuant to Section 4 of this Agreement or unless the Agreement is terminated or extended based on mutual agreement of the Executive and the Company.

 

4. DEATH, DISABILITY AND TERMINATION.

 

a. Death. In the event of the death of the Executive during the Term of the agreement, any accrued but unpaid salary, vacation and/or expense reimbursements shall be paid to the Executive' s designated beneficiary, or in the absence of such designation, of the estate or other legal representative of the Executive. Other death benefits will be determined in accordance with the terms of the Company's benefit programs and plans.

 

b. Termination by the Company for Cause

 

i. Nothing herein shall prevent the Company from terminating Executive’s employment "For Cause" as hereinafter defined. Should Executive's employment be terminated for Cause, Executive shall only be entitled to his Base Salary through the date of termination and the Executive shall immediately forfeit his right to any other compensation.

 

ii. "For Cause,'' as determined in good faith by the Board of the Company, shall mean: (a) The Executive has breached any of the terms and conditions of this Agreement; (b) The Executive's failure to adhere to any written Company policy or procedure, standards. Work rules, or regulations established from time to time; (c) The Executive fails or is unable to diligently and satisfactorily perform the essential functions of his job; (d) The appropriation (or attempted appropriation) of a material business Opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company not properly disclosed to the Board; (e) The misappropriation (or attempted misappropriation) of any of the Company's funds or property; (f) Any action by the Executive that adversely affects the property, reputation or good will of the Company; or (g) The conviction of, the plea of no contest with respect to, a felony, or the equivalent thereof, or any other crime with respect to which imprisonment is a possible punishment. Notwithstanding the foregoing, if the Company, in its sole discretion, determines that the Executive's failure to adhere to any written Company policy or procedure is of such magnitude that it warrants immediate termination of employment, then the Company shall have the sole and unfettered discretion to make such determination and to terminate this Agreement for Cause.

 

3
 

  

c. Termination by the Company Other than for Cause. The foregoing notwithstanding, the Company may elect to terminate the Executive's employment at any time during the Term or any Renewal Term without cause; provided, however, that in the event such termination is not For Cause, the Company shall be obligated as severance to pay the Executive 2 (two) months of the employees base salary.

 

d. Voluntary Termination. This Agreement may be terminated by Executive at Executive's discretion by providing at least thirty (30) days prior written notice to Company. I n the event of termination by Executive pursuant to this subsection, Company may immediately relieve Executive of all duties and immediately terminate this Agreement, provided that Company shall pay Executive at the then applicable base salary rate to the termination date included in Executive's original termination notice.

 

e. Termination Following the Acquisition of the Company. In the event Company is acquired, or is the non-surviving party in a merger, or sells all or substantially all of its assets> this Agreement shall not be terminated and Company agrees to use its best efforts to ensure that the transferee or surviving company is bound by the provisions of this Agreement.

 

5. COVENANT NOT TO COMPETE. Executive acknowledges and recognizes the highly competitive nature of the Company's business, the goodwill and business strategy of the Company and the continued patronage from its consumers constitute a substantial asset of the Company. Executive further acknowledges and recognizes that during the course of Executive's employment with the Company, Executive will receive specific and proprietary knowledge concerning the Company's business, access to trade secrets and other confidential information (as defined in Section 6), participate in business acquisitions and other corporate business decisions. and that the provisions of this Section 5 are reasonably necessary to protect the Company's business interest. Executive acknowledges that Company is without an adequate remedy at law in the event this covenant is violated. Executive further acknowledges that this covenant not to compete is an independent covenant within this Agreement. This covenant shall survive this Agreement and shall be treated as an independent covenant for the purposes of enforcement. The Executive recognizes that the terms of this covenant are reasonable and necessary for the protection of the Company's business because his association with the Company will enhance the value of Executive services. Accordingly, Executive agrees to the following:

 

4
 

 

(i) that for a period of two years after termination of the Executive's employment under this Agreement or any renewal or extension thereof (the Restricted Period'), and regardless of the reasons for Executive's termination, Executive will not individually or in conjunction with others, directly or indirectly engage in any business activities, whether as an officer, director, proprietor, employer, employee, partner, independent contractor, investor (other than as a holder of less than five percent (5%) of the outstanding capital stock of a publicly traded corporation), consultant, advisor, agent or otherwise, whose products or activities compete in whole or in part with the products or activities of the Company or any of its affiliates anywhere within the United States, Canada or the countries comprising the European Union.

 

(ii) that during the Restricted Period, Executive will not, indirectly or directly, solicit, induce or influence any of the Company's customers that have or had a business relationship with the Company at any time during Executive's employment with the Company; to discontinue or reduce the extent of such business relationship with the Company.

 

(iii) that during the Restricted Period, Executive will not on his own behalf or by way of any other person (a) directly or indirectly solicit or recruit any employee of the Company to discontinue such employment relationship with the Company, or (b) employ or seek to employ, or cause any business which competes directly or indirectly with the business of the Company to employ or seek to employ any person who is or was employed by the Company at any time during Executive's employment or who is or was employed by the Company during the Restrictive Period.

 

(iv) that during the Restricted Period , Executive will not interfere with, disrupt, or attempt to disrupt any past or present relationship, contractual or otherwise, between the Company and any the Company's employees.

 

5
 

 

6. NON-DISCLOSURE OF CONFIDENTIAL LNFORMATION.

 

d. Confidential Information. Executive acknowledges that the Company's trade secrets, private or secret processes, methods and ideas, as they exist from time to time and information concerning the Company's services, business records and plans, inventions, acquisition strategy, price structure and pricing, discounts, costs. Computer programs and listings, source code and/or subject code, copyright trademark proprietary information, formulae, protocols, fom1s, procedures, training methods, development technical information, know-how, show-how, new product and service development, advertising budgets, past, present or planned marketing, activities and procedures, method for operating the Company's business, credit and financial data concerning the Company's customers, and marketing; advertising, promotional and sales strategies, sales presentations , research information , revenues, acquisitions, practices and plans and information which is embodied in written or otherwise recorded form, and other information of a confidential nature not known publicly or by other companies selling to the same markets and specifically including information which is mental not physical (collectively, the "Confidential Information") are valuable, special and unique assets of the Company, access to and knowledge of which have been provided to Executive by virtue of Executive's employment with the Company. [n light of the highly competitive nature of the industry in which the Company's business is conducted, Executive agrees that all Confidential Information obtained by Executive as a result of Executive's employment with the Company shall be considered as proprietary and confidential.

 

e. Non-Disclosure. The Executive agrees that the Executive shall (i) hold in confidence and not disclose or make available to any third party any such Confidential Information obtained directly or indirectly from the Company, unless so authorized in writing by the Company; (ii) exercise all reasonable efforts to prevent third parties from gaining access to the Confidential Information; (iii) restrict the disclosure or availability of the Confidential Information to those individuals who the Company has authorized access to such Confidential Information and who have a need to know the Confidential Information in order to achieve the business purposes of the Company; and (iv) not copy, duplicate by any means whatsoever or modify any Confidential Information without prior written consent of the Company; provided , however, that such copy, duplication or modification of any Confidential Information does not include any copying, duplication or modifications which would otherwise prevent the Executive from performing his duties and responsibilities to the Company; and (v) take such other protective measures as may be reasonably necessary lo preserve the confidentiality of the Confidential Information.

 

6
 

 

f. Inventions. Executive further agrees (i) that Executive shall promptly disclose in writing to the Company all ideas, inventions, improvements and discoveries which may be conceived. Made or acquired by Executive as the direct or indirect result of the disclosure by the Company of the Confidential Information to Executive; (ii) that all such ideas, inventions, improvements and discoveries conceived, made or acquired by Executive, alone or with the assistance of others, shall be the sole property of the Company and that Executive shall not acquire any intellectual property rights under this Agreement except the limited right to use set forth in this Agreement; (iii) that Executive shall assist in the preparation and execution of all applications, assignments and other documents which the Company may deem necessary to obtain patents, copyrights and the like in the United States and in jurisdictions foreign thereto, and to otherwise protect the Company.

 

g. Exceptions. Excluded from the Confidential Information, and therefore not subject to the provisions of this Agreement, shall be any information which the Executive can show (i) at the time of disclosure, is in the public domain through no actions of the Executive; or (ii) was acquired from a third party who received it from the Company, and who had the right to disclose the information without any obligation to hold such information confidential. The foregoing exceptions shall apply only from and after the date that the information becomes generally available to the public or is disclosed to the Executive by a third party, respectively. Specific information shall not be deemed to be within the foregoing exceptions merely because it is embraced by more general information in the public domain. Additionally, any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features arc in the public domain. If the Executive intends to avail himself of any of the foregoing exceptions, the Executive shall notify the Company in writing of his intention to do so and the basis for claiming the exception.

 

a. Return of Materials. Upon written request of the Company, Executive shall return to the Company all written materials and electronic media containing the Company's Confidential Information along with any Company issued equipment including, but not limited lo, any cell phone or laptop computer. Executive shall also deliver to the Company a written statement signed by Executive certifying all materials have been returned within five (5) days of receipt of such request from the Company.

 

7
 

  

7. AMENDMENTS. This Agreement shall not be modified or amended except by a written instrument duly executed by the parties hereto.

 

8. HEA DINGS. All sections and descriptive headings of this Agreement are inserted for convenience only, and shall not affect the construction or interpretation hereof.

 

9. COUNTERPARTS. Tb.is Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original but all counterparts shall together constitute one and the same instrument

 

10. ENTIRE AGREEMENT. This Agreement hereto constitutes the entire understanding between the panics. Nothing in this Agreement will prevent or restrict Executive from serving on the Board of Directors of public or private companies and receive compensation from such service so long as such service does not impact Executive's requirement that he devote all of his full-time business efforts, attention, energy and skill to the performance of his employment to furthering the interest of the Company.

 

11. GOVERNING LAW. This Amendment is to be construed and enforced according to the laws of the State of Florida.

 

12. CONSTRUCTION. This Agreement shall not be construed more strictly against one party than the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Company and Executive have contributed substantially and materially to the negotiation and preparation of this Agreement.

 

13. VENUE. Venue in any action arising from this Agreement shall be in Orange County in the State of Florida.

 

14. SEVERABILITY. Inapplicability or unenforceability of any provision of this Agreement shall not limit or impair the operation or validity of any other provision of this Agreement or any such other instrument.

 

15. NON-ASSIGNABILITY. This Agreement is personal in nature and not assignable by any party hereto.

 

16. BINDING EFFECT. This Amendment shall be binding upon and inure to the benefit of the parties its’ successors, transferees and assigns.

 

17. CONSTRUCTION. In constructing this Amendment the singular shall include the plural and the plural shall include the singular, and the use of any gender shall include every other and all genders.

 

8
 

  

18. NOTICES. Any notice required by this Agreement or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or by certified mail, postage prepaid, or recognized overnight delivery services;

 

If to the Company:

 

IIM Global Corporation

160 E, Lake Brantley Drive

Longwood Florida 32779

 

If to the Executive:

 

Mr. David S. Jones

6709 Oakwood Manor

Crystal Lake, IL 60012

 

19. COMPLETE UNDERSTANDING OF PARTIES. Executive and the Company understand and agree that the terns and conditions of this Amendment constitute the full and complete understandings, agreements and promises of the Parties, and that there are no oral or written understandings, agreements, promises, or inducements made or offered other than those set forth, in writing, in this Agreement.

 

20. WAIVER. The rights and remedies of the Parties co this Amendment are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Amendment will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right power, or privilege will preclude any other or further exercise of such right power, or privilege or the exercise of any other right, power, or privilege. To the maxi mum extent permitted by applicable law, (a) no claim or right arising out of this Amendment can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party: (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Amendment.

 

9
 

 

21. SURVIVAL. Not withstanding anything to the contrary in this Agreement, the provisions of Sections 5 and 6(a) and (b) shall survive and remain in effect beyond the execution and/or termination of this Agreement in accordance with their respective terms or duration.

 

22. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO H ER E BY WAIVE A RIGHT TO J U RY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AMENDMENT.

 

IN W ITN ESS WHEREOF the parties have executed this Agreement as of the date first above written.

 

IIM Global Corporation

 

By:

 

/s/ Thomas Szoke

 

Thomas Szoke

 

Title: Director & CTO

 

By:

 

/s/ David S. Jones

 

David S. Jones

 

The Executive

 

10

 

EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (hereinafter the ''Agreement") is made and entered into on February 27, 2014 with a start date of March 1, 2014 between IIM Global Corporation, a Delaware corporation, (the "Company''), whose principal place of business is 160 E. Lake Brantley Drive, Longwood, Florida 32779, and Douglas Solomon an individual (the "Executive") whose address is 5301 Bacara Cove, Lake Mary FL 32746 USA.

 

RECITALS:

 

a. The Company provides government and commercial identification security and mobile wallet technology design, manufacturing, sale and installation/support services ("The Business").

 

b. The Executive has extensive experience in the industry and The Company wishes to employ the executive based on the terms and title listed below.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements here in made, the Company and the Executive hereby agree as follows:

 

1. EMPLOYMENT.

 

The Company hereby agrees to initially employ the Executive and the Executive hereby accepts such employment in his capacity of COO (Chief Operating Officer) of IIM Global Corporation. According to the terms and conditions of this Agreement.

 

a) Duties.

The Executive shall report directly to the President & CEO of IIM Global Corporation. The duties of the Executive shall include the performance of all of the duties typical of the office held by Executive and such other duties and projects as may be assigned by the President & CEO of the Company, if any, or the board of directors of the Company.

 

Executive shall devote his entire productive time, ability and attention to the business of the Company and shall perform all duties in a professional, ethical and business like manner.

 

Executive will not during the term of this Agreement, directly or indirectly engage in any other business, either as an employee, employer, consultant, principal, officer, director, advisor or in any other capacity, either with or without compensation, without the prior written consent of Company. The Executive is expected to work closely with the President & CEO of IIM Global Corporation and other Executives and Staff in the Company's ongoing pursuit of excellence, growth and profitability.

  

 
 

  

2. COMPENSATION/BENEF1TS.

 

a. Salary. The Company shall pay Executive a base salary (the "Base Salary") of $60,000.00 (sixty thousand) US Dollar per year, payable according to the Company's regular payroll schedule. The base salary shall be adjusted at the end of each year of employment at the discretion of the board of directors.

 

b. Performance Bonus: Based on the Executive's performance The Board of Directors of the Company at its own discretion may award the Executive quarterly and/or annual bonuses

 

c. Employee Benefits: The Executive shall be entitled to participate in all benefit programs of the Company currently existing or hereafter made available to executives and/or other executive employees, subject to the eligibility requirements, restrictions and limitations of any such programs.

 

d. Vacation: The Executive shall be entitled to ten days (2 weeks) of vacation. lf the vacation time is accrued but not taken within 2 months after the end of the fiscal year (December 31), it may not be carried over into the remaining portion of the next fiscal year and the company shall have no obligation for the payment of any monies for any accrued but unused vacation. If it is Management may at its own discretion allow the Executive to carry forward to the following year any remaining.

 

e. Sick Leave. Executive shall be entitled to sick leave and emergency leave according to the regular policies and procedures of Company. Additional sick leave or emergency leave over and above paid leave provided by the Company, if any, shall be unpaid and shall be granted at the discretion of the board of directors.

 

f. Expense Reimbursement. Executive shall be entitled to reimbursement for all reasonable expenses, including travel and entertainment, incurred by Executive in the performance of Executive’s duties. Executive will maintain records and written receipts as required by the Company pol icy and reasonably requested by the board of directors to substantiate such expenses. All expense repayments must be submitted within 45 days of expenses being incurred.

 

g. Equipment. The Executive will be provided upon employment, with a portable cellular telephone, and laptop computer.

 

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3. TERM

 

Notwithstanding anything to the contrary herein, the term of employment under this Agreement will commence on March 1, 2014, and end three (3) years thereafter on February 28, 2017 (the "TERM"), unless terminated sooner pursuant to Section 4 of this Agreement or unless the Agreement is terminated or extended based on mutual agreement of the Executive and the Company.

 

4. DEATH, DISABILITY AND TERMINATION.

 

a. Death. In the event of the death of the Executive during the Term of the agreement, any accrued but unpaid salary, vacation and/or expense reimbursements shall be paid to the Executive' s designated beneficiary, or in the absence of such designation, of the estate or other legal representative of the Executive. Other death benefits will be determined in accordance with the terms of the Company's benefit programs and plans.

 

b. Termination by the Company for Cause

 

i. Nothing herein shall prevent the Company from terminating Executive’s employment "For Cause" as hereinafter defined. Should Executive's employment be terminated for Cause, Executive shall only be entitled to his Base Salary through the date of termination and the Executive shall immediately forfeit his right to any other compensation.

 

ii. "For Cause,'' as determined in good faith by the Board of the Company, shall mean: (a) The Executive has breached any of the terms and conditions of this Agreement; (b) The Executive's failure to adhere to any written Company policy or procedure, standards. Work rules, or regulations established from time to time; (c) The Executive fails or is unable to diligently and satisfactorily perform the essential functions of his job; (d) The appropriation (or attempted appropriation) of a material business Opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company not properly disclosed to the Board; (e) The misappropriation (or attempted misappropriation) of any of the Company's funds or property; (f) Any action by the Executive that adversely affects the property, reputation or good will of the Company; or (g) The conviction of, the plea of no contest with respect to, a felony, or the equivalent thereof, or any other crime with respect to which imprisonment is a possible punishment. Notwithstanding the foregoing, if the Company, in its sole discretion, determines that the Executive's failure to adhere to any written Company policy or procedure is of such magnitude that it warrants immediate termination of employment, then the Company shall have the sole and unfettered discretion to make such determination and to terminate this Agreement for Cause.

 

3
 

 

c. Termination by the Company Other than for Cause. The foregoing notwithstanding, the Company may elect to terminate the Executive's employment at any time during the Term or any Renewal Term without cause; provided, however, that in the event such termination is not For Cause, the Company shall be obligated as severance to pay the Executive 2 (two) months of the employees base salary.

 

d. Voluntary Termination. This Agreement may be terminated by Executive at Executive's discretion by providing at least thirty (30) days prior written notice to Company. I n the event of termination by Executive pursuant to this subsection, Company may immediately relieve Executive of all duties and immediately terminate this Agreement, provided that Company shall pay Executive at the then applicable base salary rate to the termination date included in Executive's original termination notice.

 

e. Termination Following the Acquisition of the Company. In the event Company is acquired, or is the non-surviving party in a merger, or sells all or substantially all of its assets> this Agreement shall not be terminated and Company agrees to use its best efforts to ensure that the transferee or surviving company is bound by the provisions of this Agreement.

 

5. COVENANT NOT TO COMPETE. Executive acknowledges and recognizes the highly competitive nature of the Company's business, the goodwill and business strategy of the Company and the continued patronage from its consumers constitute a substantial asset of the Company. Executive further acknowledges and recognizes that during the course of Executive's employment with the Company, Executive will receive specific and proprietary knowledge concerning the Company's business, access to trade secrets and other confidential information (as defined in Section 6), participate in business acquisitions and other corporate business decisions. and that the provisions of this Section 5 are reasonably necessary to protect the Company's business interest. Executive acknowledges that Company is without an adequate remedy at law in the event this covenant is violated. Executive further acknowledges that this covenant not to compete is an independent covenant within this Agreement. This covenant shall survive this Agreement and shall be treated as an independent covenant for the purposes of enforcement. The Executive recognizes that the terms of this covenant are reasonable and necessary for the protection of the Company's business because his association with the Company will enhance the value of Executive services. Accordingly, Executive agrees to the following:

 

4
 

 

(i) that for a period of two years after termination of the Executive's employment under this Agreement or any renewal or extension thereof (the Restricted Period'), and regardless of the reasons for Executive's termination, Executive will not individually or in conjunction with others, directly or indirectly engage in any business activities, whether as an officer, director, proprietor, employer, employee, partner, independent contractor, investor (other than as a holder of less than five percent (5%) of the outstanding capital stock of a publicly traded corporation), consultant, advisor, agent or otherwise, whose products or activities compete in whole or in part with the products or activities of the Company or any of its affiliates anywhere within the United States, Canada or the countries comprising the European Union.

 

(ii) that during the Restricted Period, Executive will not, indirectly or directly, solicit, induce or influence any of the Company's customers that have or had a business relationship with the Company at any time during Executive's employment with the Company; to discontinue or reduce the extent of such business relationship with the Company.

 

(iii) that during the Restricted Period, Executive will not on his own behalf or by way of any other person (a) directly or indirectly solicit or recruit any employee of the Company to discontinue such employment relationship with the Company, or (b) employ or seek to employ, or cause any business which competes directly or indirectly with the business of the Company to employ or seek to employ any person who is or was employed by the Company at any time during Executive's employment or who is or was employed by the Company during the Restrictive Period.

 

(iv) that during the Restricted Period , Executive will not interfere with, disrupt, or attempt to disrupt any past or present relationship, contractual or otherwise, between the Company and any the Company's employees.
5
 

 

6. NON-DISCLOSURE OF CONFIDENTIAL LNFORMATION.

 

d. Confidential Information. Executive acknowledges that the Company's trade secrets, private or secret processes, methods and ideas, as they exist from time to time and information concerning the Company's services, business records and plans, inventions, acquisition strategy, price structure and pricing, discounts, costs. Computer programs and listings, source code and/or subject code, copyright trademark proprietary information, formulae, protocols, fom1s, procedures, training methods, development technical information, know-how, show-how, new product and service development, advertising budgets, past, present or planned marketing, activities and procedures, method for operating the Company's business, credit and financial data concerning the Company's customers, and marketing; advertising, promotional and sales strategies, sales presentations , research information , revenues, acquisitions, practices and plans and information which is embodied in written or otherwise recorded form, and other information of a confidential nature not known publicly or by other companies selling to the same markets and specifically including information which is mental not physical (collectively, the "Confidential Information") are valuable, special and unique assets of the Company, access to and knowledge of which have been provided to Executive by virtue of Executive's employment with the Company. [n light of the highly competitive nature of the industry in which the Company's business is conducted, Executive agrees that all Confidential Information obtained by Executive as a result of Executive's employment with the Company shall be considered as proprietary and confidential.

 

e. Non-Disclosure. The Executive agrees that the Executive shall (i) hold in confidence and not disclose or make available to any third party any such Confidential Information obtained directly or indirectly from the Company, unless so authorized in writing by the Company; (ii) exercise all reasonable efforts to prevent third parties from gaining access to the Confidential Information; (iii) restrict the disclosure or availability of the Confidential Information to those individuals who the Company has authorized access to such Confidential Information and who have a need to know the Confidential Information in order to achieve the business purposes of the Company; and (iv) not copy, duplicate by any means whatsoever or modify any Confidential Information without prior written consent of the Company; provided , however, that such copy, duplication or modification of any Confidential Information does not include any copying, duplication or modifications which would otherwise prevent the Executive from performing his duties and responsibilities to the Company; and (v) take such other protective measures as may be reasonably necessary lo preserve the confidentiality of the Confidential Information.

 

6
 

f. Inventions. Executive further agrees (i) that Executive shall promptly disclose in writing to the Company all ideas, inventions, improvements and discoveries which may be conceived. Made or acquired by Executive as the direct or indirect result of the disclosure by the Company of the Confidential Information to Executive; (ii) that all such ideas, inventions, improvements and discoveries conceived, made or acquired by Executive, alone or with the assistance of others, shall be the sole property of the Company and that Executive shall not acquire any intellectual property rights under this Agreement except the limited right to use set forth in this Agreement; (iii) that Executive shall assist in the preparation and execution of all applications, assignments and other documents which the Company may deem necessary to obtain patents, copyrights and the like in the United States and in jurisdictions foreign thereto, and to otherwise protect the Company.

 

g. Exceptions. Excluded from the Confidential Information, and therefore not subject to the provisions of this Agreement, shall be any information which the Executive can show (i) at the time of disclosure, is in the public domain through no actions of the Executive; or (ii) was acquired from a third party who received it from the Company, and who had the right to disclose the information without any obligation to hold such information confidential. The foregoing exceptions shall apply only from and after the date that the information becomes generally available to the public or is disclosed to the Executive by a third party, respectively. Specific information shall not be deemed to be within the foregoing exceptions merely because it is embraced by more general information in the public domain. Additionally, any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features arc in the public domain. If the Executive intends to avail himself of any of the foregoing exceptions, the Executive shall notify the Company in writing of his intention to do so and the basis for claiming the exception.

 

a. Return of Materials. Upon written request of the Company, Executive shall return to the Company all written materials and electronic media containing the Company's Confidential Information along with any Company issued equipment including, but not limited lo, any cell phone or laptop computer. Executive shall also deliver to the Company a written statement signed by Executive certifying all materials have been returned within five (5) days of receipt of such request from the Company.
7
 

  

7. AMENDMENTS. This Agreement shall not be modified or amended except by a written instrument duly executed by the parties hereto.

 

8. HEA DINGS. All sections and descriptive headings of this Agreement are inserted for convenience only, and shall not affect the construction or interpretation hereof.

 

9. COUNTERPARTS. Tb.is Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original but all counterparts shall together constitute one and the same instrument

 

10. ENTIRE AGREEMENT. This Agreement hereto constitutes the entire understanding between the panics. Nothing in this Agreement will prevent or restrict Executive from serving on the Board of Directors of public or private companies and receive compensation from such service so long as such service does not impact Executive's requirement that he devote all of his full-time business efforts, attention, energy and skill to the performance of his employment to furthering the interest of the Company.

 

11. GOVERNING LAW. This Amendment is to be construed and enforced according to the laws of the State of Florida.

 

12. CONSTRUCTION. This Agreement shall not be construed more strictly against one party than the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Company and Executive have contributed substantially and materially to the negotiation and preparation of this Agreement.

 

13. VENUE. Venue in any action arising from this Agreement shall be in Orange County in the State of Florida.

 

14. SEVERABILITY. Inapplicability or unenforceability of any provision of this Agreement shall not limit or impair the operation or validity of any other provision of this Agreement or any such other instrument.

 

15. NON-ASSIGNABILITY. This Agreement is personal in nature and not assignable by any party hereto.

 

16. BINDING EFFECT. This Amendment shall be binding upon and inure to the benefit of the parties its’ successors, transferees and assigns.

 

17. CONSTRUCTION. In constructing this Amendment the singular shall include the plural and the plural shall include the singular, and the use of any gender shall include every other and all genders.

 

8
 

 

18. NOTICES. Any notice required by this Agreement or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or by certified mail, postage prepaid, or recognized overnight delivery services;

 

If to the Company:

 

IIM Global Corporation

160 E, Lake Brantley Drive

Longwood Florida 32779

 

If to the Executive:

 

Mr. Douglas W. Solomon

5301 Bacara Cove

Lake Mary FL 32746

 

19. COMPLETE UNDERSTANDING OF PARTIES. Executive and the Company understand and agree that the terns and conditions of this Amendment constitute the full and complete understandings, agreements and promises of the Parties, and that there are no oral or written understandings, agreements, promises, or inducements made or offered other than those set forth, in writing, in this Agreement.

 

20. WAIVER. The rights and remedies of the Parties co this Amendment are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Amendment will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right power, or privilege will preclude any other or further exercise of such right power, or privilege or the exercise of any other right, power, or privilege. To the maxi mum extent permitted by applicable law, (a) no claim or right arising out of this Amendment can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party: (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Amendment.

 

9
 

 

21. SURVIVAL. Not withstanding anything to the contrary in this Agreement, the provisions of Sections 5 and 6(a) and (b) shall survive and remain in effect beyond the execution and/or termination of this Agreement in accordance with their respective terms or duration.

 

22. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO H ER E BY WAIVE A RIGHT TO J U RY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AMENDMENT.

  

IN W ITN ESS WHEREOF the parties have executed this Agreement as of the date first above written.

  

IIM Global Corporation

 

By:

 

/s/ David S. Jones

 

David S. Jones

 

Title: Director, President & CEO

  

By:

 

/s/ Douglas W. Solomon

 

Douglas W. Solomon

 

The Executive

 

10
 

EXECUTIVE EMPLOYMENT
AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (hereinafter the ''Agreement") is made and entered into on February 27, 2014 with a start date of March 1, 2014 between IIM Global Corporation, a Delaware corporation, (the "Company''), whose principal place of business is 160 E. Lake Brantley Drive, Longwood, Florida 32779, and Thomas Szoke an individual (the "Executive") whose address is 921 Parkside Pointe Blvd. Apopka FL 32712 USA.

 

RECITALS:

 

a. The Company provides government and commercial identification security and mobile wallet technology design, manufacturing, sale and installation/support services ("The Business").

 

b. The Executive has extensive experience in the industry and The Company wishes to employ the executive based on the terms and title listed below.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements here in made, the Company and the Executive hereby agree as follows:

 

1. EMPLOYMENT.

 

The Company hereby agrees to initially employ the Executive and the Executive hereby accepts such employment in his capacity of CTO (Chief Technology Officer) of IIM Global Corporation. According to the terms and conditions of this Agreement.

 

a) Duties.

The Executive shall report directly to the President & CEO of IIM Global Corporation. The duties of the Executive shall include the performance of all of the duties typical of the office held by Executive and such other duties and projects as may be assigned by the President & CEO of the Company, if any, or the board of directors of the Company.

 

Executive shall devote his entire productive time, ability and attention to the business of the Company and shall perform all duties in a professional, ethical and business like manner.

 

Executive will not during the term of this Agreement, directly or indirectly engage in any other business, either as an employee, employer, consultant, principal, officer, director, advisor or in any other capacity, either with or without compensation, without the prior written consent of Company. The Executive is expected to work closely with the President & CEO of IIM Global Corporation and other Executives and Staff in the Company's ongoing pursuit of excellence, growth and profitability.

 

 
 

  

2. COMPENSATION/BENEF1TS.

 

a. Salary. The Company shall pay Executive a base salary (the "Base Salary") of $60,000.00 (sixty thousand) US Dollar per year, payable according to the Company's regular payroll schedule. The base salary shall be adjusted at the end of each year of employment at the discretion of the board of directors.

 

b. Performance Bonus: Based on the Executive's performance The Board of Directors of the Company at its own discretion may award the Executive quarterly and/or annual bonuses

 

c. Employee Benefits: The Executive shall be entitled to participate in all benefit programs of the Company currently existing or hereafter made available to executives and/or other executive employees, subject to the eligibility requirements, restrictions and limitations of any such programs.

 

d. Vacation: The Executive shall be entitled to ten days (2 weeks) of vacation. lf the vacation time is accrued but not taken within 2 months after the end of the fiscal year (December 31), it may not be carried over into the remaining portion of the next fiscal year and the company shall have no obligation for the payment of any monies for any accrued but unused vacation. If it is Management may at its own discretion allow the Executive to carry forward to the following year any remaining.

 

e. Sick Leave. Executive shall be entitled to sick leave and emergency leave according to the regular policies and procedures of Company. Additional sick leave or emergency leave over and above paid leave provided by the Company, if any, shall be unpaid and shall be granted at the discretion of the board of directors.

 

f. Expense Reimbursement. Executive shall be entitled to reimbursement for all reasonable expenses, including travel and entertainment, incurred by Executive in the performance of Executive’s duties. Executive will maintain records and written receipts as required by the Company pol icy and reasonably requested by the board of directors to substantiate such expenses. All expense repayments must be submitted within 45 days of expenses being incurred.

 

g. Equipment. The Executive will be provided upon employment, with a portable cellular telephone, and laptop computer.

 

2
 

 

3. TERM

 

Notwithstanding anything to the contrary herein, the term of employment under this Agreement will commence on March 1, 2014, and end three (3) years thereafter on February 28, 2017 (the "TERM"), unless terminated sooner pursuant to Section 4 of this Agreement or unless the Agreement is terminated or extended based on mutual agreement of the Executive and the Company.

 

4. DEATH, DISABILITY AND TERMINATION.

 

a. Death. In the event of the death of the Executive during the Term of the agreement, any accrued but unpaid salary, vacation and/or expense reimbursements shall be paid to the Executive' s designated beneficiary, or in the absence of such designation, of the estate or other legal representative of the Executive. Other death benefits will be determined in accordance with the terms of the Company's benefit programs and plans.

 

b. Termination by the Company for Cause

 

i. Nothing herein shall prevent the Company from terminating Executive’s employment "For Cause" as hereinafter defined. Should Executive's employment be terminated for Cause, Executive shall only be entitled to his Base Salary through the date of termination and the Executive shall immediately forfeit his right to any other compensation.

 

ii. "For Cause,'' as determined in good faith by the Board of the Company, shall mean: (a) The Executive has breached any of the terms and conditions of this Agreement; (b) The Executive's failure to adhere to any written Company policy or procedure, standards. Work rules, or regulations established from time to time; (c) The Executive fails or is unable to diligently and satisfactorily perform the essential functions of his job; (d) The appropriation (or attempted appropriation) of a material business Opportunity of the Company, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company not properly disclosed to the Board; (e) The misappropriation (or attempted misappropriation) of any of the Company's funds or property; (f) Any action by the Executive that adversely affects the property, reputation or good will of the Company; or (g) The conviction of, the plea of no contest with respect to, a felony, or the equivalent thereof, or any other crime with respect to which imprisonment is a possible punishment. Notwithstanding the foregoing, if the Company, in its sole discretion, determines that the Executive's failure to adhere to any written Company policy or procedure is of such magnitude that it warrants immediate termination of employment, then the Company shall have the sole and unfettered discretion to make such determination and to terminate this Agreement for Cause.

 

3
 

 

c. Termination by the Company Other than for Cause. The foregoing notwithstanding, the Company may elect to terminate the Executive's employment at any time during the Term or any Renewal Term without cause; provided, however, that in the event such termination is not For Cause, the Company shall be obligated as severance to pay the Executive 2 (two) months of the employees base salary.

 

d. Voluntary Termination. This Agreement may be terminated by Executive at Executive's discretion by providing at least thirty (30) days prior written notice to Company. I n the event of termination by Executive pursuant to this subsection, Company may immediately relieve Executive of all duties and immediately terminate this Agreement, provided that Company shall pay Executive at the then applicable base salary rate to the termination date included in Executive's original termination notice.

 

e. Termination Following the Acquisition of the Company. In the event Company is acquired, or is the non-surviving party in a merger, or sells all or substantially all of its assets> this Agreement shall not be terminated and Company agrees to use its best efforts to ensure that the transferee or surviving company is bound by the provisions of this Agreement.

 

5. COVENANT NOT TO COMPETE. Executive acknowledges and recognizes the highly competitive nature of the Company's business, the goodwill and business strategy of the Company and the continued patronage from its consumers constitute a substantial asset of the Company. Executive further acknowledges and recognizes that during the course of Executive's employment with the Company, Executive will receive specific and proprietary knowledge concerning the Company's business, access to trade secrets and other confidential information (as defined in Section 6), participate in business acquisitions and other corporate business decisions. and that the provisions of this Section 5 are reasonably necessary to protect the Company's business interest. Executive acknowledges that Company is without an adequate remedy at law in the event this covenant is violated. Executive further acknowledges that this covenant not to compete is an independent covenant within this Agreement. This covenant shall survive this Agreement and shall be treated as an independent covenant for the purposes of enforcement. The Executive recognizes that the terms of this covenant are reasonable and necessary for the protection of the Company's business because his association with the Company will enhance the value of Executive services. Accordingly, Executive agrees to the following:

 

4
 

 

(i) that for a period of two years after termination of the Executive's employment under this Agreement or any renewal or extension thereof (the Restricted Period'), and regardless of the reasons for Executive's termination, Executive will not individually or in conjunction with others, directly or indirectly engage in any business activities, whether as an officer, director, proprietor, employer, employee, partner, independent contractor, investor (other than as a holder of less than five percent (5%) of the outstanding capital stock of a publicly traded corporation), consultant, advisor, agent or otherwise, whose products or activities compete in whole or in part with the products or activities of the Company or any of its affiliates anywhere within the United States, Canada or the countries comprising the European Union.

 

(ii) that during the Restricted Period, Executive will not, indirectly or directly, solicit, induce or influence any of the Company's customers that have or had a business relationship with the Company at any time during Executive's employment with the Company; to discontinue or reduce the extent of such business relationship with the Company.

 

(iii) that during the Restricted Period, Executive will not on his own behalf or by way of any other person (a) directly or indirectly solicit or recruit any employee of the Company to discontinue such employment relationship with the Company, or (b) employ or seek to employ, or cause any business which competes directly or indirectly with the business of the Company to employ or seek to employ any person who is or was employed by the Company at any time during Executive's employment or who is or was employed by the Company during the Restrictive Period.

 

(iv) that during the Restricted Period , Executive will not interfere with, disrupt, or attempt to disrupt any past or present relationship, contractual or otherwise, between the Company and any the Company's employees.
5
 

 

6. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.

 

d. Confidential Information. Executive acknowledges that the Company's trade secrets, private or secret processes, methods and ideas, as they exist from time to time and information concerning the Company's services, business records and plans, inventions, acquisition strategy, price structure and pricing, discounts, costs. Computer programs and listings, source code and/or subject code, copyright trademark proprietary information, formulae, protocols, fom1s, procedures, training methods, development technical information, know-how, show-how, new product and service development, advertising budgets, past, present or planned marketing, activities and procedures, method for operating the Company's business, credit and financial data concerning the Company's customers, and marketing; advertising, promotional and sales strategies, sales presentations , research information , revenues, acquisitions, practices and plans and information which is embodied in written or otherwise recorded form, and other information of a confidential nature not known publicly or by other companies selling to the same markets and specifically including information which is mental not physical (collectively, the "Confidential Information") are valuable, special and unique assets of the Company, access to and knowledge of which have been provided to Executive by virtue of Executive's employment with the Company. [n light of the highly competitive nature of the industry in which the Company's business is conducted, Executive agrees that all Confidential Information obtained by Executive as a result of Executive's employment with the Company shall be considered as proprietary and confidential.

 

e. Non-Disclosure. The Executive agrees that the Executive shall (i) hold in confidence and not disclose or make available to any third party any such Confidential Information obtained directly or indirectly from the Company, unless so authorized in writing by the Company; (ii) exercise all reasonable efforts to prevent third parties from gaining access to the Confidential Information; (iii) restrict the disclosure or availability of the Confidential Information to those individuals who the Company has authorized access to such Confidential Information and who have a need to know the Confidential Information in order to achieve the business purposes of the Company; and (iv) not copy, duplicate by any means whatsoever or modify any Confidential Information without prior written consent of the Company; provided , however, that such copy, duplication or modification of any Confidential Information does not include any copying, duplication or modifications which would otherwise prevent the Executive from performing his duties and responsibilities to the Company; and (v) take such other protective measures as may be reasonably necessary lo preserve the confidentiality of the Confidential Information.

 

6
 

 

f. Inventions. Executive further agrees (i) that Executive shall promptly disclose in writing to the Company all ideas, inventions, improvements and discoveries which may be conceived. Made or acquired by Executive as the direct or indirect result of the disclosure by the Company of the Confidential Information to Executive; (ii) that all such ideas, inventions, improvements and discoveries conceived, made or acquired by Executive, alone or with the assistance of others, shall be the sole property of the Company and that Executive shall not acquire any intellectual property rights under this Agreement except the limited right to use set forth in this Agreement; (iii) that Executive shall assist in the preparation and execution of all applications, assignments and other documents which the Company may deem necessary to obtain patents, copyrights and the like in the United States and in jurisdictions foreign thereto, and to otherwise protect the Company.

 

g. Exceptions. Excluded from the Confidential Information, and therefore not subject to the provisions of this Agreement, shall be any information which the Executive can show (i) at the time of disclosure, is in the public domain through no actions of the Executive; or (ii) was acquired from a third party who received it from the Company, and who had the right to disclose the information without any obligation to hold such information confidential. The foregoing exceptions shall apply only from and after the date that the information becomes generally available to the public or is disclosed to the Executive by a third party, respectively. Specific information shall not be deemed to be within the foregoing exceptions merely because it is embraced by more general information in the public domain. Additionally, any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features arc in the public domain. If the Executive intends to avail himself of any of the foregoing exceptions, the Executive shall notify the Company in writing of his intention to do so and the basis for claiming the exception.

 

a. Return of Materials. Upon written request of the Company, Executive shall return to the Company all written materials and electronic media containing the Company's Confidential Information along with any Company issued equipment including, but not limited lo, any cell phone or laptop computer. Executive shall also deliver to the Company a written statement signed by Executive certifying all materials have been returned within five (5) days of receipt of such request from the Company.

 

7
 

  

7. AMENDMENTS. This Agreement shall not be modified or amended except by a written instrument duly executed by the parties hereto.

 

8. HEA DINGS. All sections and descriptive headings of this Agreement are inserted for convenience only, and shall not affect the construction or interpretation hereof.

 

9. COUNTERPARTS. Tb.is Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original but all counterparts shall together constitute one and the same instrument

 

10. ENTIRE AGREEMENT. This Agreement hereto constitutes the entire understanding between the panics. Nothing in this Agreement will prevent or restrict Executive from serving on the Board of Directors of public or private companies and receive compensation from such service so long as such service does not impact Executive's requirement that he devote all of his full-time business efforts, attention, energy and skill to the performance of his employment to furthering the interest of the Company.

 

11. GOVERNING LAW. This Amendment is to be construed and enforced according to the laws of the State of Florida.

 

12. CONSTRUCTION. This Agreement shall not be construed more strictly against one party than the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Company and Executive have contributed substantially and materially to the negotiation and preparation of this Agreement.

 

13. VENUE. Venue in any action arising from this Agreement shall be in Orange County in the State of Florida.

 

14. SEVERABILITY. Inapplicability or unenforceability of any provision of this Agreement shall not limit or impair the operation or validity of any other provision of this Agreement or any such other instrument.

 

15. NON-ASSIGNABILITY. This Agreement is personal in nature and not assignable by any party hereto.

 

16. BINDING EFFECT. This Amendment shall be binding upon and inure to the benefit of the parties its’ successors, transferees and assigns.

 

17. CONSTRUCTION. In constructing this Amendment the singular shall include the plural and the plural shall include the singular, and the use of any gender shall include every other and all genders.

 

8
 

 

18. NOTICES. Any notice required by this Agreement or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or by certified mail, postage prepaid, or recognized overnight delivery services;

 

If to the Company:

 

IIM Global Corporation

160 E, Lake Brantley Drive

Longwood Florida 32779

 

If to the Executive:

 

Mr. Thomas R. Szoke

921 Parkside Pointe Blvd

Apopka FL 32712

 

19. COMPLETE UNDERSTANDING OF PARTIES. Executive and the Company understand and agree that the terns and conditions of this Amendment constitute the full and complete understandings, agreements and promises of the Parties, and that there are no oral or written understandings, agreements, promises, or inducements made or offered other than those set forth, in writing, in this Agreement.

 

20. WAIVER. The rights and remedies of the Parties co this Amendment are cumulative and not alternative. Neither the failure nor any delay by either party in exercising any right, power, or privilege under this Amendment will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right power, or privilege will preclude any other or further exercise of such right power, or privilege or the exercise of any other right, power, or privilege. To the maxi mum extent permitted by applicable law, (a) no claim or right arising out of this Amendment can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party: (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Amendment.

 

9
 

 

21. SURVIVAL. Not withstanding anything to the contrary in this Agreement, the provisions of Sections 5 and 6(a) and (b) shall survive and remain in effect beyond the execution and/or termination of this Agreement in accordance with their respective terms or duration.

 

22. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO HERE BY WAIVE A RIGHT TO JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AMENDMENT.

  

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written.

  

IIM Global Corporation

 

By:

 

/s/s David S. Jones

 

David S. Jones

 

Title: Director, President & CEO

  

By:

 

/s/ Thomas R. Szoke

 

Thomas R. Szoke

 

The Executive

 

10
 

PROMISSORY NOTE

 

AMOUNT:  $600,000.00 March 31, 2014

 

FOR VALUE RECEIVED, IIM Global Corporation (hereinafter refer lo as the, ·'Borrower"), promises to pay Penn Investments Inc (hereafter refer to as the "Lender"), at 5301 Bacara Cove, Lake Mary, Florida 32746, or at such other place as holder hereof may from time to time designate in writing, the principal sum of Six Hundred Thousand Dollars ($600,000.00); with interest accruing on the unpaid principal at the rate of fifteen percent (15%) per annum from March 31, 20 14 until paid. The aforementioned principal sum represents monies loaned to IIM Global Corporation by Penn Investments Inc. The principal and interest under this Promissory Note is payable in full at the end of 6 (six) months September 30, 2014. This Promissory Note may, in whole or in part, be prepaid without penalty before the maturity date hereof.

 

Should the "Borrower " default under or otherwise breach this Promissory Note and not cure said default or breach on or before the tenth (10th) day after the Lender gives the Borrower written notice thereof, by personal delivery or certified mailing, all principal remaining unpaid and interest accruing thereon shall, at the option of the lender, become immediately due and payable to the Lender. Notice shall be deemed given on the date of personal delivery or date of mailing, whichever applies. No delay or failure in giving notice of said default or breach shall constitute a waiver of the right of the Lender to exercise said right in the event of a subsequent or continuing default or breach. Furthermore, in the event of such default or breach, the Borrower promises to pay the Lender all collection and/or litigation costs incurred, including reasonable attorney fees and court costs, whether judgment is rendered or not.

 

This Promissory Note has been entered into and shall be performed in Seminole County, Florida, and shall be construed in accordance with the laws of Florida and any applicable federal statutes or regulations of the United States. Any claims or disputes concerning this Note shall be adjudicated in Seminole County, Florida.

 

IN WlTNESS WHEREOF, this Agreement was executed as of the date first above written.

 

UM Global Corporation   Penn Investments Inc.
     
 
Signed on behalf of IIM Global Corporation   Signed on behalf of Penn Investments Inc
By David S.Jones, President & CEO.   By Douglas Solomon, President & CEO

 

 

 

FLEXTRONICS CONFIDENTIAL

 

Flextronics Manufacturing Services Agreement

 

This Flextronics Manufacturing Services Agreement ("Agreement") is entered into this 18th day of May 2012 (the "Effective Date") by and between Innovation in Motion, Inc. having its place of business at 525 Technology Park, Suite 165, Lake Mary, Florida 32746, USA ("Customer") and Flextronics Industrial, Ltd. having its place of business at Level 3, Alexander House, 35 Cybercity, Ebene, Mauritius ("Flextronics").

 

Customer desires lo engage Flextronics to perform manufacturing services as further set forth in this Agreement. The parties agree as follows:

 

I. DEFINITIONS

 

Flextronics and Customer agree that capitalized terms shall have the meanings set forth in this Agreement and Exhibit I attached hereto and incorporated herein by reference.

 

2. MANUFACTURING SERVICES

 

2.1.         Work . Customer hereby engages Flextronics to perform the work (hereinafter "Work"). "Work'' shall mean to procure Materials and to manufacture, assemble, and test products (hereinafter "Product(s)") pursuant to detailed written Specifications. The "Specifications" for each Product or revision thereof, shall include but are not limited lo bill of materials, designs, schematics, assembly drawings, process documentation, test specifications, current revision number, and Approved Vendor List. The Specifications as provided by Customer and included in Flextronics 's production document management system and maintained in accordance with the terms of this Agreement are incorporated herein by reference as Exhibit 2.1. This Agreement does not include any new product introduction (NPI) or product prototype services related to the Products. In the event that Customer requires any such services, the parties will enter in to a separate agreement. In case of any conflict between the Specification s and this Agreement, this Agreement shall prevail.

 

2.2.         Engineering Cha nges. Customer may request that Flextronics incorporate engineering changes in to die Product by providing Flextronics with a description of the proposed engineering change sufficient to permit Flextronics to evaluate its feasibility and cost. Flextronics will proceed with engineering changes when the parties have agreed upon the changes to the Specifications, delivery schedule and Product pricing and the Customer has issued a purchase order for the implementation costs.

 

2.3.         Tooling; Non -Recurring Expenses; Software . Customer shall pay for or obtain and consign to Flextronics any Product-specific tooling, equipment or software and other reasonably necessary non-recurring expenses, lo be set forth in Flextronics's quotation described in Exhibit 2.3. Customer may request Flextronics to apply commercially reasonable efforts to mark such Product-specific tooling or equipment per Customer 's reasonable instructions. All software that Customer provides to Flextronics or any test software that Customer engages Flextronics to develop is and shall remain the property of Customer.

 

2.4.         Cost Reduction Projects . Flextronics agrees to seek ways to reduce the cost of manufacturing Products by methods such a elimination of Materials, redefinition of Specifications and re-design of assembly or test methods. Upon implementation of such ways that have been initiated by Flextronics and approved by Customer, Flextronics will receive 50% of the demonstrated cost reduction for six months. Customer will receive 100% of the demonstrated cost reduction upon implementation of such ways initiated by Customer.

 

3. FORECASTS; ORDERS; FEES; PAYMENT

 

3.1.         Forecast . Customer shall provide Flextronics, on a monthly basis, a rolling twelve ( 12) month forecast indicating Customer's monthly Product requirements. The first ninety (90) days of the forecast will constitute Customer's written purchase order for all Work to be completed within the first ninety (90) day period. Such purchase orders will be issued in accordance with Section 3.2 below.

 

3.2.         Purchase Orders; Precedence . Customer may use its standard purchase order form for any notice provided for hereunder; provided that all purchase orders must reference this Agreement and the applicable Specifications. The parties agree that the terms and condition s contained in this Agreement shall prevail over any terms and conditions of any such purchase order, acknowledgment form or other instrument.

 

3.3.         Purchase Order Acceptance . Purchase orders shall normally be deemed accepted by Flextronics, provided however that Flextronics may reject any purchase order: (a) that is an amended order in accordance with Section 5.2 below because the purchase order is outside of the Flexibility Table; (b) if the fees reflected in the purchase order are inconsistent with the parties' agreement with respect lo the fees; (c) if the purchase order represents a significant deviation from the forecast for the same period, unless such deviation is within the parameters of the Flexibility Table; or (d) if a purchase order would extend Flextronics's liability beyond Customer 's approved credit line. Flextronics shall notify Customer of rejection of any purchase order within five (5) business days of receipt of such purchase order.

 

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FLEXTRONICS CONFIDENTIAL

 

3.4. Fees; Changes; Taxes .

 

(a)         The fees will be agreed by the parties and will be indicated on the purchase orders issued by Customer and accepted by Flextronics. The initial fees shall be as set forth on the Fee List attached hereto and incorporated herein as Exhibit 3.4 (the "Fee List"). If a Fee List is not attached or completed, then the initial fees shall be as set forth in purchase orders issued by Customer and accepted by Flextronics in accordance with the tem1s of this Agreement.

 

(b)         Customer is responsible for additional fees and costs due to: (a) changes to the Specification s; (b) failure of Customer or its subcontractor to timely provide sufficient quantities or a reasonable quality level of Customer Controlled Materials where applicable to sustain the production schedule; and (c) any pre-approved expediting charges reasonably necessary because of a change in Customer's requirements.

 

(c)         The fees may be reviewed periodically by the parties. Any changes and timing of changes shall be agreed by the parties, such agreement not lo be unreasonably withheld or delayed. By way of example only. the fees may be increased if the market price of fuels, Materials, equipment, labor and other production costs, increase beyond nom1al variations in pricing or currency exchange rates as demonstrated by Flextronics. As an additional example, fees may be reduced due to cost reductions as described in section 2.4 above.

 

(d)         All fees are exclusive of federal, state and local excise, sales, use, VAT, and similar transfer taxes, and an y duties, and Customer shall be responsible for al l such items. This subsection (d) does not apply to taxes on Flextronics's net income.

 

(e)         Fees are exclusive of shipping costs. All shipping costs will be quoted and mutually agreed upon by the parties based on the ship from and ship to locations.

 

(t)         The Fees List will be based on the exchange rate(s) for converting the purchase price for Inventory denominated in the Parts Purchase Currency(ies) into the Functional Currency. The fees will be adjusted, on a monthly basis based on changes in the Exchange Rate(s) as reported on the last business day of each month for the following month to the extent that such Exchange Rates change more than /- 0.75% from the prior month (the "Currency Window "). "Exchange Rate(s)" is defined as the closing currency exchange rate(s) as reported on Reuters' page FIX on the last business day of the current month prior to the following month. "Functional Currency" means the currency in which al l payments are to be made pursuant to Section 3.5 below. "Parts Purchase Currency(ies)" means U.S. Dollars, Japanese Yen and/or Euros to the extent such currencies are different from the Functional Currency and are used to purchase Inventory needed for the performance of the Work forecasted to be completed during the applicable month.

 

3.5.         Payment . The parties agree that, until such a time as Flex Ironies, in its sole reasonable judgment, shall issue written credit approval for Customer, payment shall be made in advance and Work shall not commence until payment for the corresponding Work to be performed is received and is cleared by Flextronics. After such credit approval from Flextronics, the parties may mutually agree whether the fees for Work are pa id for by installment payments over a defined term or some other applicable method of payment: such applicable method of payment shall be set out in the Fee List. Customer agrees to pay all invoices in U.S. Dollars with in thirty (30) days of the date of the invoice.

 

3.6.         Late Payment . Customer agrees to pay one and one-half percent ( 1 .5%) monthly interest on al l late payments. Furthem1ore, if Customer is late with payments, or Flextronics has reasonable cause to believe Customer may not be able lo pay, Flextronics may (a) slop all Work under this Agreement until assurances of payment satisfactory to Flextronics are received or payment is received:(b) demand prepayment for purchase orders; (c) delay shipments; and (d) to the ex tent that Flextronics's personnel cannot be reassigned to other billable work during such stoppage and/or in die event restart cost are incurred, invoice Customer for additional fees before the Work can resume. Customer agrees to provide all necessary financial information required by Flextronics from time to time iJ1 order to make a proper assessment of the crcditword1iness of Customer.

 

3.7.        Letter of Credit or Esc row Account . Upon Flextronics's request at any time during the term of this Agreement, Customer agrees to obtain and maintain a stand-by letter of credit or escrow account on behalf of Flextronics to minimize the financial risk to Flextronics for its performance of the Work under this Agreement. The stand-by letter of credit or escrow account shall be for a minimum period of time of six (6) months and shall be for a total amount that is equal to the total value of the risks associated with Inventory, Special Inventory, and the accounts receivable from Customer. The calculation shat I be based upon the forecast provided by Customer pursuant to Section 3. I . The draw down procedures under the stand-by letter of credit or the escrow account shall be determined solely by Flextronics. Flextronics will, in good faith, review Customer's credit worthiness periodically and may provide more favorable terms once it feels it is prudent to do so.

 

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FLEXTRONICS CONFIDENTIAL
4. MATERIALS PROCUREMENT; CUSTOMER RESPONSIBILITY FOR MATERIALS

 

4.1.       Authorization to Procure Materials, Inventory and Special Inventory . Customer's accepted purchase orders and forecast will constitute authorization for Flextronics to procure, without Customer's prior approval, (a) Inventory to manufacture the Products covered by such purchase orders based on the Lead Time and (b) certain Special Inventory based on Customer's purchase orders and forecast as follows: Long Lead-Time Materials as required based on the Lead Time when such purchase orders arc placed and Minimum Order Inventory as required by the supplier. Flextronics will only purchase Economic Order Inventory with the prior approval of Customer.

 

4.2.       Customer Controlled Materials . Customer may direct Flextronics to purchase Customer Controlled Materials in accordance with the Customer Controlled Materials Terms. Customer acknowledges that the Customer Controlled Materials Terms will directly impact Flextronics's ability to pcrfom1under this Agreement and to provide Customer with the flexibility Customer is requiring pursuant to the terms of this Agreement. In the event that Flextronics reasonably believes that Customer Controlled Materials Terms will create an additional cost that is not covered by this Agreement, then Flextronics will notify Customer and the parties will agree to either (a) compensate Flextronics for such additional costs, (b) amend this Agreement to conform to the Customer Controlled Materials Terms or (c) amend the Customer Controlled Materials Terms to conform to this Agreement, in each case at no additional charge to Flextronics. Customer agrees to provide copies to Flextronics of all Customer Controlled Materials Terms upon the execution of this Agreement and promptly upon execution of any new agreement with suppliers. Customer agrees not to make any modifications or additions to the Customer Controlled Materials Terms or enter into new Customer Controlled Material Terms with suppliers that will negatively impact Flextronics's procurement activities.

 

4.3.       Preferred Supplier . Customer shall provide to Flextronics and maintain an Approved Vendor List. Flextronics shall purchase from vendors on a current AYL the Materials required to manufacture the Product. Customer shall give Flextronics every opportunity to be included on AVLs for Materials that Flextronics can supply, and if Flextronics is competitive with other suppliers with respect to reasonable and unbiased criteria for acceptance established by Customer. Flextronics shall be included on such AVLs. If Flextronics is on an AVL and its prices and quality are competitive with other vendors, Customer will raise no objection to Flextronics sourcing Material s from itself. For purposes of this Section 4.3 only, the term "Flextronics" includes any companies affiliated with Flextronics.

 

4.4.       Customer Responsibilitv for Inventorv and Special Inventory . Customer is responsible under the conditions provided in this Agreement for all Materials, Inventory and Special Inventory purchased by Flextronics under this Section 4.

 

4.5.       Materials Warranties . Flextronics shall endeavor to obtain and pass through to Customer the following warranties with regard to the Materials (other than Production Materials): (i) conformance of the Materials with the vendor's specifications and/or with the Specifications; (ii) that the Materials will be free from defects in workmanship; (iii) that t11e Materials will comply with Environmental Regulations; and (iv) that the Materials will not infringe the intellectual property rights of third parties.

 

4.6.       Con signed Materials . In the event Customer consigns components, materials, or supplies to be used by Flextronics in the manufacture of the Product ("Con signed Materials"), Customer agrees to consign adequate quantities to timely manufacture Products and agrees to compensate Flextronics to the extent that Flextronics's personnel cannot be reassigned to other billable work during any Work stoppage and cover any production-related attrition at Customer's sole expense. Title to Consigned Materials remains at all times with Customer and Flextronics has no obligation to purchase the Consigned Material s. Flextronics shall ensure that such Consigned Materials will be allocated part numbers to indicate Customer's ownership. Flextronics will bear responsibility for any damage or loss of Consigned Materials related to nonproduction causes while they are on the premises of Flextronics. Upon reasonable notice to Flextronics and mutual agreement between the parties, Customer may observe the warehouse space in which the Consigned Materials are stored.

 

5. SHIPMENTS, SCHEDULE CHANGE, CANCELLATION, STORAGE

 

5.1.       Shipments . All Products delivered pursuant Lo the terms of this Agreement shall be suitably packed for shipment in accordance with the Specifications and marked for shipment to Customer's destination specified in the applicable purchase order. Shipments will be made EXW (Ex works, Incoterms 2010) Flextronics's facility, a t which time risk of loss and title will pass to Customer. Customer shall be the importer of record. All freight, insurance and other shipping expenses, as well as any special packing expenses not included in the original quotation for the Products, will be paid by Customer. In the event Cu5.1omer designates a freight carrier to be utilized by Flextronics, Customer agrees to designate only freight carriers that are currently in compliance with all applicable laws relating to anti-terrorism security measures and to adhere to the C-TPAT (Customs-Trade Partnership Against Terrorism) security recommendations and guidelines as outlined by the United States Bureau of Customs and Border Protection and to prohibit the freight carriage to be sub-contracted to any carrier that is not in compliance with the C-TPAT guidelines.

 

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FLEXTRONICS CONFIDENTIAL

 

5.2. Quantity In creases and Shipment Schedule Changes .

 

(a) For any accepted purchase order, Customer may (i) increase the quantity of Products or (ii) reschedule the quantity of Products and their shipment date as provided in the flexibility table below (the "Flexibility Table''):

 

Maximum Allowable Variance From Accepted Purchase Order Quantities /Shipment Dates

 

# of days before   Allowable     Maximum     Maximum
Shipment Date   Quantity     Reschedule     Reschedule
on Purchase Order   Increases     Quantity     Period
0-14     0 %     0 %   0
15-30     10 %     0 %   0
31 -60     20 %     10 %   30 days
61 -90     30 %     20 %   30 days

 

Any decrease in quantity is considered a cancellation, unless the decreased quantity is rescheduled for delivery at a later date in accordance with the Flexibility Table. Quantity cancellations are governed by the tem1s of Section 5.3 below. Any purchase order quantities increased or rescheduled pursuant to this Section 5.2 (a) may not be subsequently increased or rescheduled.

 

(b) All reschedules to push out delivery dates outside of the table in subsection (a) require Flextronics's prior written approval, which, in its sole discretion, may or may not be granted. If Customer does not request prior approval from Flextronics for such reschedules, or if Customer and Flextronics do not agree in writing to specific terms with respect to any approved reschedule, then Customer will pay Flextronics the Monthly Charges for any such reschedule, calculated as of the first day after such reschedule for any Inventory and/or Special Inventory that was procured by Flextronics to support the original delivery schedule that is not used to manufacture Product pursuant to an accepted purchase order with in thirty (30) days of such reschedule. In addition, if Flextronics notifies Customer that such Inventory and/or Specia 1 Inventory has remained in Flextronics's possession for more than ninety (90) days since such reschedule, then Customer agrees to immediately purchase any elected Inventory and/or Special Inventory upon receipt of the notice by paying the Affected Inventory Costs. In addition, any finished Products that have already been manufactured to suppo1i the original delivery schedule will be treated as cancelled as provided in Sections 5.3 and 5.4 below.

 

(c) Flextronics w ill use reasonable commercial efforts to meet any quantity increases, which are subject to Materials and capacity availability. All reschedules or quantity increases outside of the table in subsection (a) require Flextronics's approval, which, in its sole discretion, may or may not be granted. If Flextronics agrees to accept a reschedule to pull in a delivery date or an increase in quantities in excess of the flexibility table in subsection (a) and if there are extra costs to meet such reschedule or increase, Flextronics will inform Customer for its acceptance and approval in advance.

 

(d) Any delays in the normal production or interruption in the workflow process caused by Customer's changes to the Specifications or failure to provide sufficient quantities or a reasonable quality level of Customer Controlled Material s where applicable to sustain the production schedule, will be considered a reschedule of any affected purchase orders for purposes of this Section 5 .2 for the period of such delay. In addition, Customer shall be responsible for costs related to adjusting foreign currency hedging contracts due to changes in cash flows resulting from such delays.

 

(e) For purpose ·of calculating the amount of inventory and Special Inventory subject to subsection (b), the "Lead Time" shall be calculated as the Lead Time at the time of procurement of the Inventory and Special Inventory.

 

5.3. Cancellation of Orders and Customer Responsibility for Inventory

 

(a) Customer may not cancel all or any portion of Product quantity of an accepted purchase order without Flextronics's prior written approval, which, in its sole discretion may or may not be granted. If Customer does not request prior approval, or if Customer and Flextronics do not agree in writing to specific teams with respect to any approved cancellation, then Customer will pay Flextronics Monthly Charges for any such cancellation, calculated as of the first day after such cancellation for any Product or Inventory or Special Inventory and/or Special Inventory has remained in Flextronics's possession for more than thirty (30) days since such cancellation, then Customer agrees to immediately purchase from Flextronics such Product, Inventory and/or Special Inventory by paying the Affected Inventory Costs. In addition, Flextronics shall calculate the cost or gain of unwinding any currency hedging contracts entered in to by Flextronics to support the cancelled purchase order(s). Should the unwinding result in a loss to Flextronics, Customer agrees to cover such loss amount for Flextronics immediately upon receipt of an invoice for such amount. Should the unwinding result in a gain to Flextronics, a credit note will be immediately issued to Customer.

 

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FLEXTRONICS CONFIDENTIAL

 

 

(b) If the forecast for any period is less than the previous forecast supplied over the same period. that amount will be considered canceled and Customer will be responsible for any Special Inventory purchased or ordered by Flextronics to support the forecast.

 

(c) Products that have been ordered by Customer and that have not been picked up in accordance with the agreed upon shipment dates shall be considered cancelled and Customer will be responsible for such Products in the same manner as set forth above in Section 5.3(a).

 

(d) For purposes of calculating the amount of Inventory and Special Inventory subject to subsection (a), the "Lea d Time" shall be calculated as the Lead Time at the time of (i) procurement of the Inventory and Special Inventory; (ii) cancellation of the purchase order or (iii) termination of this Agreement, whichever is longer.

 

5.4.           Mitigation of inventory and Special Inventory Prior to invoicing Customer for the amounts due pursuant to Sections 5.2 or 5.3, Flextronics will use reasonable commercial efforts for a period of thirty (30) days, to return unused Inventory and Special Inventory and to cancel pending orders for such inventory, and to otherwise mitigate the amounts payable by Customer. Customer shall pay amounts due under this Section 5 with in ten ( 10) days of receipt of an invoice. Flextronics will hip the Inventory and Special Inventory paid for by Customer under this Section 5.4 to Customer promptly upon said payment by Customer. In the event Customer does not pay within ten (I 0) days, Flextronics will be entitled to dispose of such Inventory and Special Inventory in a commercially reasonable manner and credit to Customer any monies received from third parties. Flextronics shall then submit an invoice for the balance amount due and Customer agrees to pay said amount within ten (10) days of its receipt of the invoice.

 

5.5.           No Waiver. For the avoidance of doubt, Flextronics's failure to invoice Customer for any of the charges set forth in this Section 5 does not constitute a waiver of Flextronic s right to charge Customer for the same event or other similar events in the future.

 

6. PRODUCT ACCEPTANCE AND EXPRESS LIMITED WARRANT Y

 

6.1.           Product Acceptance . The Products delivered by Flextronics will be inspected and tested as required by Customer within ten ( I 0) days of receipt at the "ship to" location on the applicable purchase order. If Products do not comply with the ex press limited warranty set forth in Section 6.2 below, Customer has the right to reject such Products during said period. Products not rejected during said period will be deemed accepted. Customer may return defective Products, freight collect after obtaining a return material authorization number from Flextronics to be displayed on the ·hipping container and completing a failure report. Rejected Products will be promptly repaired or replaced, at Flextronics 's option, and returned freight prepaid . Customer shall bear all of the risk, and all costs and expenses, associated with Products that have been returned to Flextronics for which there is no defect found.

 

6.2.           Express Limited Warrant y. This Section 6.2 set<; forth Flextronics's sole and exclusive warranty and Customer's sole and exclusive remedies with respect to a breach by Flextronics of such warranty.

 

(a)   Flextronics warrants that the Products will have been manufactured in accordance with the applicable Specifications and will be free from defects in workmanship for a period of twelve (12) months from the date of shipment. In addition, Flextronics warrants tl1at Production Materials are in compliance with Environmental Regulations.

 

(b)   Notwithstanding anything else in this Agreement, this express limited warranty does not apply to, and Flextronics makes no representations or warranties whatsoever with respect to: (i) Materials and/or Customer Controlled Materials and/or Consigned Materials; (ii) defects resulting from the Specifications or the design of the Products: (iii) Product that has been abused, damaged , altered or misused by an y person or entity after title passes to Customer; (iv) first articles, prototypes, pre production units, test units or other similar products: (v) defects resulting from tooling, designs or instructions produced or supplied by Customer, or (vi) the compliance of Materials or Products with any Environmental Regulations. Customer shall be liable for costs or expenses incurred by Flextronics related to the foregoing exclusions to Flextronics's ex press limited warranty.

 

(c)   Upon any failure of a Product to comply with this ex press limited warranty, Flextronics's sole obligation, and Customer's sole remedy, is for Flextronics, at its option, to promptly repair or replace such unit and return it to Customer freight prepaid. Customer shall return Products covered by this warranty freight prepaid after completing a failure report and obtaining a return material authorization number from Flextronics to be displayed on the shipping container. Customer shall bear all of the risk, and all costs and expenses, associated with Products that have been returned to Flextronics for which there is no defect found.

 

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FLEXTRONICS CONFIDENTIAL

 

(d)    Customer will provide its own warranties directly to any of its end users or other third parties. Customer will not pass d1rough to end users or other third parties the warranties made by Flextronics under this Agreement. Furthermore. Customer will not make any representations to end users or other third parties on behalf of Flextronics, and Customer will expressly indicate that the end users and third parties must look solely to Customer in connection with any problems, warranty claim or other matters concerning the Product.

 

6.3.         No Representation s or Other Warranties . FLEXTRONICS MAKES NO REPRESENTATIONS AND NO OTHER WARRANTI ES OR CONDITIONS ON THE PERFORMANCE OF THE WORK, OR THE PRODUCTS , EXPRESS, IMPLI ED, STATUTORY , OR IN ANY OTHER PROVISION Of THIS AGREEMENT OR COMMUNICATION WITH CUSTOMER, AND FLEXTRONICS SPECIFICA LLY DISCLAIMS ANY IMPLIED WARRANTY OR CONDITION OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRING EMENT .

 

7. L TELLECTUAL PROPERTY LICENSES

 

7. I . Licenses . Customer hereby grants Flextronics a non-exclusive license during the term of this Agreement to use Customer's patents, trade secrets and other intellectual property as necessary to perform Flextronics's obligations under this Agreement.

 

7.2. No Other Licenses . Except as otherwise specifically provided in this Agreement, each party acknowledges and agrees that no licenses or rights under any of me intellectual property rights of the other party are given or intended to be given to such other party.

 

8. TERM AND TERMINATION

 

8.1. Term . The term of this Agreement shall commence on the dale hereof above and shall continue for three (3) years thereafter until terminated as provided in Section 8.2 (Termination) or 10.8 (Force Majeure). After the expiration of the initial term hereunder (unless this Agreement has been terminated), this Agreement shall be automatically renewed for separate but successive one-year terms unless either party provides written notice to the other party that it does not intend to renew this Agreement ninety (90) days or more prior to the end of any term.

 

8.2. Termination . This Agreement may be terminated by either party (a) for convenience upon ninety (90) days written notice to the other party, or (b) if the other party defaults in any payment to the tem1inating party and such default continues without a cure for a period of fifteen (15) days after the delivery of written notice thereof by the terminating party to d1e od1er party, (c) if the other party defaults in the performance of any other material term or condition of this Agreement and such default continues without remedy for a period of thirty (30) days after the delivery of written notice thereof by the terminating party to the other party; or (d) pursuant to Section I 0.8 (Force Majeure).

 

8.3. Effect of Expiration or Termination . Expiration or termination of this Agreement under any of the foregoing provisions: (a) shall not affect the amounts due under this Agreement by either party that exist as of the date of expiration or termination, and (b) as of such date the provisions of Sections 5.2, 5.3, and 5.4 shall apply with respect to payment and shipment to Customer of finished Products, Inventory, and Special Inventory in existence as of such date, and (c) shall not affect Flextronics's express limited warranty in Section 6.2 above. Termination of this Agreement, settling of accounts in the manner set forth in the foregoing sentence shall be the exclusive remedy of the parties for breach of this Agreement except for breaches of Section 6.2, 9.1, 9.2, or I 0.1 . Sections l , 3.5, 3.6, 3.7, 4, 5.2, 5.3, 5.4 , 6.2.6.3, 7, 8, 9, and 10 shall be the only terms that shall su1vive any termination or expiration of this Agreement.

 

9. INDEMNIFICATION; LIABILITY LIMITATION

 

9.1. Indemnification by Flextronics . Flextronics agrees to defend, indemnify and hold harmless, Customer and all directors, officers, employees, and agents (each, a "Customer Indemnitee") from and against all claims, actions, losses, expenses, damages or other liabilities, including reasonable attorneys' fees (collectively. "Damages") incurred by or assed against any of the foregoing, but solely to the extent the same arise out of third-party claims relating to:

 

(a) any actual or threatened injury or damage to any person or property caused, or alleged to be caused, by a Product sold by Flextronics to Customer hereunder, but solely to the ex tent such injury or damage has been caused by the breach by Flextronics of its ex press limited warranties related to Flextronics's workmanship and manufacture in accordance with the Specification s only as further set forth in Section 6.2;

 

(b) any infringement of the intellectual property rights of any third party but solely to the ex tent that such infringement is caused by a process that Flextronics uses to manufacture, assemble and Core test the Products; provided that Flextronics shall not have any obligation to indemnify Customer if such claim would not have arisen but for Flextronics's manufacture, assembly or test of the Product in accordance with the Specifications; or

 

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FLEXTRONICS CONFIDENTIAL

 

(c) noncompliance with any Environmental Regulations but solely to the ex tent that such non-compliance is caused by a process or Production Materials that Flextronics uses to manufacture the Products: provided that, Flextronics shall not have any obligation to indemnify Customer if such claim would not have arisen but for Flextronics's manufacture of the Product in accordance with the Specifications.

 

9.2. Indemnification by Customer . Customer agrees to defend, indemnify and hold harmless, Flextronics and it affiliates, and a l l directors, officers, employees and agents (each, a "Flextronics Indemnity") from and against all Damages incurred by or assessed against an y of the foregoing to the ex tent the same arise out of, are in connection with, are caused by or arc related to third -party claims relating to:

 

(a) any failure of any Product (and Material s contained therein) sold by Flextronics hereunder to comply with any safety standards and/or Environmental Regulations to the extent that such failure has not been caused by Flextronics's breach of its express limited warranties set forth in Section 6.2 hereof;

 

(b) any actual or threatened injury or damage to any person or property caused, or alleged to be caused, by a Product, but only to the extent such injury or damage has not been caused by Flextronics's breach of its express limited warranties related to Flextronics's workmanship and manufacture in accordance with the Specifications only as further set forth in Section 6.2 hereof, or

 

(c) any infringement of the intellectual property rights of any third party by any Product except to the extent such infringement is the responsibility of Flextronics pursuant to Section 9 .1 (b) above.

 

9.3. Procedures for Indemnification . With respect to any third-party claims, either party shall give the other party prompt notice of any third-party claim and cooperate with the indemnifying party at its expense. The indemnifying party shall have the right to assume the defense (at its own expense) of any such claim through cow1sel of its own choosing by so notifying the party seeking indemnification within thirty (30) calendar days of the first receipt of such notice. The party seeking indemnification shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the indemnifying party. The indemnifying party shall not, without the prior written consent of the indemnified party, agree to the settlement , compromise or discharge of such third-party claim.

 

9.4. Sale of Products En joined . Should the use of an y Product be enjoined for a cause stated in Section 9. l(b) or 9.2( c) above, or in the event the indemnifying party desires lo minimize its l iabilities under th is Section 9, in addition to its indemnification obligations set forth in this Section 9, the indemnifying party's sole responsibility is lo either substitute a full y equivalent Product or process (as applicable) not subject to such injunction, modify such Product or process (as applicable) so that it no longer is subject to such injunction. or obtain the right to continue using the enjoined process or Product (as applicable). In the event that any of the foregoing remedies cannot be effected on commercially reasonable terms, then, all accepted purchase orders and the current forecast will be considered cancelled and Customer shall purchase all Products, Inventory and Special Inventory as provided in Sections 5.3 and 5.4 hereof Any changes to any Products or process must be made in accordance with Section 2.2 above. Notwithstanding the foregoing, iJ1 the event that a third party makes an infringement claim, but does not obtain an injunction, the indemnifying party shall not be required to substitute a fully equivalent Product or process (as applicable) or modify the Product or process (as applicable) if the indemnifying party obtains an opinion from competent patent counsel reasonably acceptable to the other party that such Product or process is not infringing or that the patents alleged to have been infringed are invalid.

 

9.5. No Other Liability . EXCEPT WITH REGARD TO A BREACH OF SECTIONS 9.1 AND 9.2 ABOVE OR SECTION 10.1 BELOW, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY "COVER" DAMAGES (INCLUDING INTERNAL COVER DAMAGES WHICH THE PAR TIES AGREE MAY NOT BE CONSIDERED "DIRECT'' DAM AGES), OR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE SALE OF PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE.

 

THE FOREGOING SECTION 9 STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER CONCERNING INFRINGEMENT OF PATENT, COPYR IGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RJGHTS.

 

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FLEXTRONICS CONFIDENTIAL

  

10. MISCELLANEOUS

 

10.1. Confidentiality . Each party shall refrain from using any and all Confidential information of the disclosing party for any purposes or activities other than those specifically authorized in this Agreement. Except as otherwise specifically permitted herein or pursuant to written permission of the party to this Agreement owning the Confidential Information , no party shall disclose or facilitate disclosure of Confidential In formation of the disclosing party to anyone without the prior written consent of the disclosing party except to its employees, consultants, parent company, and subsidiaries of its parent company who need to know such in formation for carrying out the activities contemplated by this Agreement and who have agreed in writing to confidentiality terms that are no less restrictive than the requirements of this Section. Not withstanding the foregoing, the receiving party may disclose Confidential Information of the disclosing party pursuant to a subpoena or other court process only (i) after having given the disclosing party prompt notice of the receiving party's receipt of such subpoena or other process and (ii) after the receiving party has given the disclosing party a reasonable opportunity to oppose such subpoena or other process or to obtain a protective order. Confidential Information of the disclosing party in the custody or control of the receiving party shall be promptly returned or destroyed upon the earlier of (i) the disclosing party's written request or (ii) termination of this Agreement. Confidential Information disclosed pursuant to this Agreement shall be maintained confidential for a period of three (3) years after the disclosure thereof. The existence and terms of this Agreement shall be confidential in perpetuity.

 

10.2. Use of Flextronics Name is Prohibited . The existence and terns of this Agreement are Confidential Information and protected pursuant to Section I 0.1 above. Accordingly, Customer may not use Flextronics's name or identity or any other Confidential Information in any adve1tisiJ1g, promotion or other public announcement without the prior express written consent of Flextronics.

 

103. Entire Agreement; Severability . This Agreement constitutes the entire agreement between the Parties with respect to the transactions contemplated hereby and supersedes all prior agreement<; and understandings between the parties relating to such transactions. If the scope of any of the provisions of this Agreement is too broad in any respect whatsoever to permit enforcement to its full extent, then such provisions shall be enforced to the maxi mum extent permitted by law, and the parties hereto consent and agree that such scope may be judicially modified accordingly and that the whole of such provisions of this Agreement shall not thereby fail, but that the scope of such provisions shall be curtailed only to the extent necessary to conform to law.

 

10.4. Amendments; Waiver . This Agreement may be amended only by written consent of both parties. The failure by either party to enforce any provision of this Agreement will not constitute a waiver of future enforcement of that or any other provision. Neither party will be deemed to have waived any rights or remedies hereunder unless such waiver is in writing and signed by a duly authorized representative of the party against which such waiver is asserted.

 

10.5. Independent Contractor . Neid1er party shall, for any purpose, be deemed to be an agent of the other party and the relationship between the parties shall only be that of independent contractors. Neither party shall have any right or authority to assume or create an y obligations or to make any representations or warranties on behalf of any other party, whether express or implied, or to bind the other party in any respect whatsoever.

 

10.6. Expenses . Each party shall pay its own expenses in coru1ection with the negotiation of this Agreement. In the event a dispute between the parties hereunder with respect to this Agreement must be resolved by litigation or other proceeding or a party must engage an attorney to enforce its right hereunder, the prevailing party shall be entitled to receive reimbursement for all associated reasonable costs and expenses (including, without limitation, attorneys fees) from the other party.

 

10.7. Insurance . Flextronics and Customer agree to maintain appropriate insurance to cover their respective risks under this Agreement with coverage amounts commensurate with levels in their respective markets. Customer specifically agrees to maintain insurance coverage for any finished Products or Materials the title and risk of loss of which passes to Customer pursuant to this Agreement.

 

10.8. . Force Majeu re. In the event that either party is prevented from performing or is unable to perform any of its obligation s under this Agreement (other than a payment obligation) due to any act of God, acts or decrees of governmental or military bodies, fire, casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of production facilities, riot, insurrection Materials unavailability, or any other cause beyond the reasonable control of the party invoking this section (collectively, a "Force Majeure"), and if such party shall have used its commercially reasonable efforts to mitigate its effects, such party shall give prompt written notice to the other party, its performance shall be excused , and the time for the performance shall be extended for the period of delay or inability to perform due to such occurrences. Regardless of the excuse of Force Majeure, if such party is not able to perform with in ninety (90) days after such event, the other party may terminate the Agreement.

 

10.9 . Successors, Assignment . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives. Neither party shall have the right to assign or otherwise transfer its rights or obligations under this Agreement except with the prior written consent of the other party, not to be unreasonably withheld. Not withstanding the foregoing, Flextronics may assign some or all of its rights and obligations under this Agreement to an affiliated Flextronics entity.

 

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FLEXTRONICS CONFIDENTIAL

 

10.10. Notices . All notices required or permitted under this Agreement will be in writing and will be deemed received (a) when delivered personally; (b) when sent by confirmed facsimile; (c) five (5) days after having been sent by registered or certified mail return receipt requested, postage prepaid; or (d) one ( I ) day after deposit with a commercial overnight carrier. All communication will be sent to the addresses set forth above or to such other address as may be designated by a party by giving written notice to the other party pursuant to this section.

 

10.1l. Governing Law; Disputes Resolution; Waiver of Jury Trial .

 

(a) This Agreement shall be governed by and interpreted in accordance with the laws of the state of New York and the parties hereby consent to the personal and exclusive jurisdiction and venue of the New York state courts and the Federal courts located in New York. Not with standing the foregoing except with respect to enforcing claims for injunctive or equitable relief. an y dispute, claim or controversy arising from or related in any way to this Agreement or the interpretation, application . breach, termination or validity thereof, including any claim of inducement of this Agreement by fraud will be submitted for resolution by binding arbitration in accordance with the rules of the American Arbitration Association . The arbitration w ill be held in New York , New York and it shall be conducted in the English language. Judgment on any award in arbitration may be entered in any court of competent jurisdiction. Not withstanding the above, each party shall have recourse to any court of competent jurisdiction to enforce claims for injunctive and other equitable relief.

 

(b) IN THE EVENT OF ANY DISPUTE BETWEEN THE PARTIES. WHETHER IT RESULTS IN PROCEEDINGS IN ANY COURT IN ANY JURISDICTION OR IN ARBITRATION , THE PARTIES HEREBY KNOWINGLY ANO VOLUNTA RI LY, AND HAYING HAO AN OPPORTUNITY TO CONSULT WITH COUNSEL, WAIVE ALL RIGHTS TO TRIAL BY JURY, AND AGREE THAT ANY AND ALL MATTERS SHALL BE DECIDED BY A JUDGE OR ARBITRATOR WITHOUT A JURY TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW. To the extent applicable, in the event of any lawsuit between the parties arising out of or related to this Agreement, the parties agree to prepare and to timel y file in the applicable court a mutual consent to waive any statutory or other requirementS for a trial by jury .

 

10.12. Even-Handed Construction . The tern1s and conditions as set forth in this Agreement have been arrived at after mutual negotiation, and it is the intention of the parties that its tem1s and conditions not be construed against any party merely becau se it was prepared by one of the parties.

 

10.13.  Controlling Language . This Agreement is in English only, which language shall be controlling in all respects. AU documents exchanged under this Agreement shall be in English .

 

10.14. Counterparts . This Agreement may be executed in counterparts.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized representatives as of the Effective Date.

 

Innovation Jn Motion, Inc.:   Flextronics Industrial, Ltd .:
     
     
By: David S. Jones   By: Mann y Marimuthu
Title: President ru1d CEO   Title: Director

 

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FLEXTRONICS CONFIDENTIAL

 

EXHIBIT 1

 

DEFINITIONS

 

" Affected Inventory Costs'' shall mean :(i ) 1 10% of the Cost of all affected Inventory and Special Inventory in Flextronics's possession and not returnable to the vendor or reasonably usable for other customers, whether in raw form or work in process, less the salvage value thereof, (ii) 105% of tJ1c Cost of all affected Inventory and Special Inventory on order and not cancelable, (iii) any vendor cancelation charges incurred with respect to the affected Inventory and Special Inventory accepted for cancellation or return by the vendor, (iv) the then current fees for any affected Product, and (v) expenses incu1Ted by Flextronics related to labor and equipment specifically put in place to suppo1 i the purchase orders and forecasts that are affected by such reschedule or cancellation (as applicable).
   
''Approved Vendor List" or "AVL " shall mean the list of suppliers currently approved to provide the Materials specified in the bill of materials for a Product.
   
" Confidential Information" shall mean (a) the existence and terms of this Agreement and all information concerning the unit number and fees for Products and Inventory/Special Inventory and (b) any other information that is marked "Confidential" or the like or, if delivered verbally, confirmed in writing to be "Confidential" within 30 days of the initial disclosure. Confidential information does not include information that (i) the receiving party can prove it already knew at the time of receipt from the disclosing party; or (ii) has come into the public domain without breach of confidence by the receiving party; (iii) was received from a third party without restrictions on its use; (iv) the receiving party can prove it independently developed without use of or reference to the disclosing party's data or information; or (v) the disclosing party agrees in writing is free of such restrictions.
   
" Cost " shall mean the cost represented on the bill of material supporting the most current fees for Products at the time of cancellation , expiration or termination,as applicable.
   
"Customer Controlled Materials" shall mean those Materials provided by Customer or by suppliers with whom Customer has a commercial contractual or non- contractual relationship.
   
" Customer Controlled Materials Terms" shall mean the terms and conditions that Customer has negotiated with its suppliers for the purchase of Customer Controlled Materials.
   
"Customer Indemnities " shall have the meaning set forth in Section 9. I .
   
" Damages'' shall have the meaning set forth in Section 9.I.
   
" Economic Order Inventory" shall mean Materials purchased in quantities, above the required run out for purchase orders, in order to achieve price targets for such Materials.
   
"Environmental Regulations" shall mean any hazardous substance content laws and regulations including, without l imitation , those related to the EU Directive 2002/95/EC about the Restriction of Use of Hazardous Substances (Ro HS).
   
" Fee List" shall have the meaning set forth in Sect ion 3.4.
   
"Flexibility Table" shall have the meaning set forth in Section 5.2.

 

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FLEXTRONICS CONFIDENTIAL

 

"Flextronics indemnity" shall have the meaning set forth in Section 9.2.
   
"Force Majeure"' shall have the meaning set forth in Section I 0.8.
   
"Inventory" shall mean any Materials that are used to manufacture Products that are ordered pursuant to a purchase order from Customer.
   
"Lead Time(s)" shall mean the Materials Procurement Lead Time plus the manufacturing cycle time required from the delivery of the Materials at Flextronics's facility to the completion of the manufacture , assembly and test processes.
   
"Long Lead Time Materials'' shall mean Materials with Lead Times exceeding the period covered by the accepted purchase orders for the Products.
   
"Materials'' shall mean components, parts and subassemblies that comprise the Product and that appear on the bill of materials for the Product.
   
''Materials Procurement Lead Time" Shall mean with respect to any particular item of Materials, the longer of (a) lead time to obtain such Materials as recorded on Flextronics's M RP system or (b) the actual leadtime, if a supplier has increased the lead time but Flextronics has not yet updated its MRP system.
   
''Minimum Order Inventory" shall mean Materials purchased in excess of requirements for purchase orders because of minimum lot sizes avail able from the supplier.
   
"Monthly Charges" shall mean a finance carrying charge of one and one-half percent ( 1.5%) and a storage and handling charge of one-half of one percent (0.5%). in each case of the Cost of the Inventory and/or Special Inventory and/or of the fees for the Product affected by the reschedule or cancellation (as applicable) per month until such Inventory and/or Special Inventory and/or Product is returned to the vendor, used to manufacture Product or is otherwise purchased by Customer.
   
"Product" shall have the meaning set forth in Section 2.1.
   
" Production Materials" shall mean Materials that are consumed in the production processes to manufacture Products including without limitation, solder, epoxy, cleaner solvent, labels, flux , and glue. Production Materials do not include any such production materials that have been specified by the Customer or any Customer Controlled Material s.
   
"Special Inventory" shall mean any Long Lead Time Materials and/or Minimum Order Inventory and/or Economic Order Inventory.
   
"Specifications" shall have the meaning set forth in Section 2.1.
   
" Work " shall have the meaning set forth in Section 2.1.

 

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EXHIBIT 2.1

 

SPECIFICATIONS

Incorporated by reference only.

 

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EXHIBIT 2.3

 

TOOLING; NON -RECURRING EXPENSES; SOFTWARE

 

To be attached or incorporated by reference.

 

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FLEXTRONICS CONFIDENTIAL

 

EXHIBIT 3.4

 

FEE USD

 

To be attached or incorporated by reference.

 

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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors

 

IIM Global Corporation

 

We consent to the inclusion in the foregoing Registration Statement on Form S-1 of our report dated April 14, 2014, relating to our audits of the consolidated balance sheets of IIM Global Corporation as of December 31, 2013 and 2012, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2013. Our report dated April 14, 2014, related to these financial statements, included an emphasis paragraph regarding an uncertainty as to the Company’s ability to continue as a going concern.

 

We also consent to the reference to us under the caption “Experts” in the Registration Statement.

 

/s/ Anton & Chia, LLP

 

Newport Beach, California

May 22, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

4400 MacArthur Blvd. Suite 970 Newport Beach, CA 92660 Tel. 949.769.8905 Fax: 949.623.9885 info@ancsecservices.com