Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 2013, for IIM Global Corporation (formerly Silverwood Acquisition Corporation). The Company is a Delaware corporation focused on handheld identification and mobile payment technologies. In August 2013, IIM Global acquired Innovation in Motion Inc. in a reverse merger (stock-for-stock transaction), making Innovation in Motion a wholly-owned subsidiary. Prior to this acquisition, IIM Global had no ongoing operations. The Company's technology was previously utilized in the Ghana 2012 election process. As of the reporting date, the Company had not generated revenues in 2013 and is classified as a smaller reporting company.
Key Financial Metrics
| Metric | 2013 | 2012 |
|---|---|---|
| Total Revenues | $0 | $7,695,067 |
| Net Loss | $(976,238) | $192,313 (Income) |
| Accumulated Deficit | $(1,490,734) | $(514,496) |
| Total Assets | $548,506 | $379,317 |
| Cash and Cash Equivalents | $5,349 | $17,568 |
| Total Liabilities | $291,300 | $103,608 |
| Operating Expenses | $971,455 | $1,002,559 |
| Shares Outstanding | 160,623,289 | 1,500,000 (Restated) |
Note: 2012 financial data has been retroactively restated to reflect the reverse merger exchange ratio.
Material Changes vs. Prior Period
- Revenue Collapse: The Company reported zero revenue in 2013 compared to approximately $7.7 million in 2012. The 2012 revenue was derived entirely from a single project (Ghana 2012 Election) which concluded in that year.
- Profitability Shift: The Company swung from a net income of $192,313 in 2012 to a net loss of $976,238 in 2013 due to the cessation of revenue and continued operating expenses.
- Capital Structure: Following the reverse merger, the number of outstanding shares increased significantly from 1.5 million (restated) to over 160 million.
- Debt Increase: Current liabilities increased from $103,608 to $291,300, driven primarily by the issuance of $224,615 in promissory notes to related parties in late 2013.
- Asset Composition: Intangible assets increased to $393,146 (from $184,333) due to the acquisition of patent rights and software, while cash reserves decreased.
Outlook, Risks, and Management Commentary
- Going Concern Warning: Independent auditors have issued a report raising substantial doubt about the Company's ability to continue as a going concern. Continuation depends on obtaining equity financing, financial support from stockholders, or successful business combinations.
- Financing Activities: The Company filed a Form S-1 in February 2014 for the sale of approximately 58.7 million shares at $0.60 per share (not yet effective). Additionally, a $600,000 bridge loan was secured in March 2014 (subsequent event).
- Strategic Plans: Management is in discussions regarding the potential acquisition of an AFIS (Biometric Software Solutions) company and partnerships with ID Card Solutions providers to expand revenue streams.
- Market Status: There is currently no public market for the Company's securities. The Company intends to seek quotation on the OTC Bulletin Board upon approval of its S-1 filing.
- Compensation: Executive compensation was reduced to $1.00 per year for the CEO effective July 2013, with plans to resume competitive salaries upon successful public offering or profitability.
Investor Verification Checklist
- Going Concern Status: Verify the Company's ability to secure the necessary equity financing to sustain operations given the accumulated deficit of nearly $1.5 million and minimal cash on hand ($5,349).
- Revenue Sustainability: Confirm if the Company has secured new contracts to replace the one-time Ghana election revenue that drove 2012 performance.
- Related Party Transactions: Review the $224,615 in promissory notes issued to related parties and the terms of the office lease purchase option ($430,000) to assess potential conflicts of interest and cash outflow obligations.
- Stock Liquidity: Investigate the status of the Form S-1 filing and the likelihood of the stock being quoted on the OTC Bulletin Board, as there is currently no public market.
- Intellectual Property: Validate the value and commercial viability of the intangible assets (HDR and SRIO patents) which comprise the majority of the Company's asset base.