EMARINE GLOBAL INC. - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - EMARINE GLOBAL INC.	Financial_Report.xls
EX-31.1 - EXHIBIT 31.1 - EMARINE GLOBAL INC.	ex311.htm
EX-32.1 - EXHIBIT 32.1 - EMARINE GLOBAL INC.	ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2013

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

For the transition period from _______________ to _______________.

Commission file number: 000-49933

Pollex, Inc.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	95-4886472 (I.R.S. Employer Identification No.)

2005 De La Cruz Blvd. Suite 235 Santa Clara, CA (Address of principal executive offices)	95050 (Zip Code)

Registrant’s telephone number, including area code (408) 350-7340

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes □ No.

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

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o	Smaller reporting company x

(Do not check if a smaller reporting company)

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

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 14, 2013, there were 5,121,688 shares of common stock, par value $0.001, issued and outstanding.

POLLEX, INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		Page

ITEM 1	Financial Statements	3

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	10

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	14

ITEM 4	Controls and Procedures	14

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	15

ITEM 1A	Risk Factors	15

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	15

ITEM 3	Defaults Upon Senior Securities	15

ITEM 4	Mine Safety Disclosures	15

ITEM 5	Other Information	15

ITEM 6	Exhibits	16

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PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition or Plan of Operation.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

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ITEM 1 Financial Statements

POLLEX, INC.

BALANCE SHEETS

	June 30,			December 31,
	2013			2012
	(Unaudited)

ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	23,000		$	3,836
Accounts receivable, net allowance for doubtful
accounts of $126,352 and $97,842 at June 30, 2013
and December 31, 2012, respectively		-			-
Total current assets		23,000			3,836

Property and equipment, net of accumulated
depreciation of $9,739 and $8,475 at June 30, 2013 and
December 31, 2012, respectively		740			2,004

License agreements, net of accumulated
amortization of $41,566 and $25,108, at June 30, 2013
and December 31, 2012, respectively		110,934			127,392

OTHER ASSETS:
Prepaid royalty		10,000			10,000
Deposits		1,300			1,300
Total other assets		11,300			11,300

Total Assets	$	145,974		$	144,532

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Accrued expenses and accounts payable	$	847,415		$	833,691
Amounts due to affiliate under service agreement		687,950			567,950
Advances from affiliate		228,556			134,556
Loans payable		1,299,300			1,299,300

Total Current Liabilities		3,063,221			2,835,497

Stockholders' Deficit
Common stock, authorized 300,000,000 shares;
par value $0.001; 5,121,688 issued and outstanding
at June 30, 2013 and December 31, 2012, respectively		5,120			5,120
Additional paid-in capital		136,874,861			136,874,861
Accumulated deficit		(139,797,228	)		(139,570,946	)

Total Stockholders’ Deficit		(2,917,247	)		(2,690,965	)

Total Liabilities and Stockholders’ Deficit	$	145,974		$	144,532

See accompanying notes to financial statements.

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POLLEX, INC.

STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended						For the six months ended
	June 30,						June 30,
	2013			2012			2013			2012

REVENUES	$	44,051		$	17,172		$	77,749		$	35,092

COSTS AND EXPENSES
Cost of goods sold		14,491			-			23,827			-
Selling, general and administrative		47,448			49,343			75,313			128,183
Related party service agreement		60,000			60,000			120,000			120,000
Bad debt expense		16,841			-			28,510			-
Depreciation and amortization		8,620			4,103			17,722			8,206
Total Costs and Expenses		147,400			113,446			265,372			256,389

OPERATING LOSS		(103,349	)		(96,274	)		(187,623	)		(221,297	)

OTHER INCOME (EXPENSE)
Gain on license termination		-			-			-			5,000
Interest expense		(19,437	)		(18,765	)		(38,659	)		(35,622	)
Total Other Expense		(19,437	)		(18,765	)		(38,659	)		(30,622	)

LOSS BEFORE INCOME TAXES		(122,786	)		(115,039	)		(226,282	)		(251,919	)

PROVISION FOR INCOME TAXES		-			-			-			-

NET LOSS	$	(122,786	)	$	(115,039	)	$	(226,282	)	$	(251,919	)

NET LOSS PER COMMON SHARE
(Basic and Diluted)	$	(0.02	)	$	(0.02	)	$	(0.04	)	$	(0.05	)

WEIGHTED AVERAGE SHARES
OUTSTANDING		5,121,688			5,121,688			5,121,688			5,121,688

See accompanying notes to financial statements.

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POLLEX, INC.

STATEMENTS OF CASH FLOWS

(Unaudited)

	For the year ended
	June 30,
	2013			2012

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(226,282	)	$	(251,919	)
Adjustments to reconcile net loss to net cash
used in continuing operating activities:
Gain on license termination		-			(5,000	)
Depreciation and amortization		17,722			8,206
Bad debt expense		28,510			-
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(28,510	)		(4,452	)
Increase (decrease) in accrued expenses		13,724			63,365
Increase (decrease) in amounts due affiliate under service agreement		120,000			70,500

Net cash used in operating activities		(74,836	)		(119,300	)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from termination of license agreement		-			35,000
Acquisition of license agreements		-			(40,000	)

Net cash used in investing activities		-			(5,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Advance from affiliate		94,000			20,000
Loan proceeds		-			117,500
Repayment of loan		-			(4,434	)

Net cash provided by financing activities		94,000			133,066

Net increase in cash		19,164			8,766

CASH AT BEGINNING OF PERIOD		3,836			5,415

CASH AT END OF PERIOD	$	23,000		$	14,181

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest	$	-		$	-
Cash paid for taxes	$	-		$	-

See accompanying notes to financial statements.

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POLLEX, INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2013

(UNAUDITED)

NOTE A – BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the financial statements not misleading have been included. Results for the three and six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. For further information, refer to the consolidated financial statements and footnotes thereto included in the Pollex, Inc. annual report on Form 10-K for the year ended December 31, 2012.

NOTE B – GOING CONCERN

As shown in the accompanying financial statements, the Company incurred net losses of $226,282 and $251,919 for the six months ended June 30, 2013 and 2012, respectively, and has an accumulated deficit of $139,797,228 at June 30, 2013. In order to fund future operations, the Company will need to raise capital through the equity markets and generate revenue through its license agreements. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE C – LICENSE AGREEMENTS

The Company began operating the online game, The Great Merchant, in open beta testing in January 2010. During the six months ended June 30, 2013 and 2012, the Company generated revenues of $48,891 and $35,092, respectively, from this beta testing.

The Company has a total of 5 active license agreements that were acquired for use in South Korea. These agreements called for a total of $152,500 in license fees and $10,000 in nonrefundable royalty prepayments. Each license also has a royalty fee which varies for each license. Future royalties will be offset against the $10,000 prepayment. The licenses have terms of 2 to 3 years, beginning when they are launched commercially.

The Company engaged a Korea-based service provider to support and maintain the online game, and collect payments from customers. Under this agreement the service provider is required to pay the Company 29% of gross sales. For the six months ended June 30, 2013, the Company billed such 29%, or $28,510. The Company paid the licensor $23,827 on these games.

Amortization expense related to those licenses was $16,458 and $6,460 for the six months ended June 30, 2013 and 2012, respectively.

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POLLEX, INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2013

(UNAUDITED)

NOTE D – LOANS PAYABLE

The loans payable consists of borrowings from two individual noteholders. The term of each promissory note is one year and such notes bear interest at an annual rate of 6% and are unsecured. The notes may be repaid at any time prior to their due date without a prepayment penalty. During the six months ended June 30 2012, the Company received proceeds of $117,500 from these borrowings and repaid $4,434 of these borrowings. During the six months ended June 30, 2013, no amounts were borrowed or repaid.

NOTE E – RELATED PARTY TRANSACTIONS

Certain expenses have been paid on behalf of the Company by Joytoto Co., Ltd (“Joytoto Korea”), of which we are a majority owned subsidiary. The Company has recognized the expenses and corresponding payable to Joytoto Korea as due to affiliate. The advances are non-interest bearing and have no specific repayment date. During the six months ended June 30, 2013 and 2012, the Company received proceeds of $94,000 and $20,000, respectively, from these borrowings. No amounts were repaid during these periods.

The Company has entered into a Service Agreement with Gameforyou, Incorporated, a wholly-owned subsidiary of Joytoto Korea. Under this agreement, Gameforyou, Incorporated provides translation, customer support, and system operations and maintenance. The Company is required to pay Gameforyou, Incorporated $10,000 in cash and $10,000 in cash or stock each month. Any issuance of stock will be at the market value or at a price determined and agreed to by both parties. For the six months ended June 30, 2013 and 2012, $120,000 and $120,000, respectively, were recognized in the Statement of Operations under this agreement. At June 30, 2013 and December 31, 2012, $687,950 and $567,950, respectively were due to Gameforyou, Incorporated.

NOTE F- EMPLOYMENT AGREEMENTS

On March 21, 2011, the Company entered into a three year employment agreement with Seong Sam Cho to serve as Chief Financial Officer. On December 4, 2012, Seong Sam Cho was appointed as the Company’s Chief Executive Officer, President and Chairman. Pursuant to the term of the employment agreement, Mr. Seong Sam Cho receives an annual salary of $1.00. The employment agreement runs through March 21, 2014.

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POLLEX, INC.

NOTES TO FINANCIAL STATEMENTS

June 30, 2013

(UNAUDITED)

NOTE G – WARRANTS

Warrant activity for the six months ended June 30, 2013 is as follows:

	Shares		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2013		946,667	$	41.46
Granted		-		-
Forfeited		-		-
Expired		-		-
Exercised		-		-
Outstanding, June 30, 2013		946,667	$	41.46

The weighted average remaining contractual life and exercise price of the warrants outstanding and exercisable at June 30, 2013 was 1.34 years and $4.95, respectively. The intrinsic value of the warrants outstanding and exercisable at June 30, 2013 was $0 as the exercise price exceeded the stock price.

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ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include, but are not limited to, international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

Pollex, Inc., formerly Joytoto USA, Inc., formerly BioStem, Inc. (the “Company,” “we,” and “us”) was incorporated on November 2, 2001, in the State of Nevada, under the name “Web Views Corporation”.

We are a majority owned subsidiary of Joytoto Co., Ltd. (“Joytoto Korea”). We are determined to focus our efforts on our Online Games business by acquiring new game licenses and making such games commercially available in South Korea and the United States.

Our operations are focused on Online Games. We have acquired licenses from various online game developers to use in South Korea. Our Online Games business segment has generated $44,051 and $77,749 for the three and six months ended June 30, 2013, respectively.

As of June 30, 2013, the Company entered into license agreements for 15 games for use in South Korea. These agreements allow the Company to release and service these games in South Korea. The Company opened one of these games in South Korea under open beta testing on March 16, 2011. Open Beta testing allows users and players to test the game while not implementing the full revenue generating service of the game. One of the games was launched commercially in July 14, 2012. The remainder of the games are expected to be launched in consecutive succession in the fourth quarter of 2013.

The Company engaged a Korea-based service provider to support and maintain the online game and collect payments from customers. Under this agreement, the service provider is required to pay the Company 29% of gross sales. For the three and six months ended June 30, 2013, the Company billed 29%, or $28,510 and $16,841, respectively. The remaining revenues were generated from the Company's online game, the Great Merchant, which has been in beta testing since 2010.

Revenues, Expenses and Loss from Operations

Three months ended June 30, 2013 compared to three months ended June 30, 2012

Our revenues, selling, general and administrative expenses, depreciation, amortization, total costs and expenses, and net loss for the three months ended June 30, 2013 and for the three months ended June 30, 2012 are as follows:

	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012

Revenue	$	44,051	$	17,172
Cost of services		14,491		-
Selling, general and administrative		47,488		49,343
Related party service agreement		60,000		60,000
Bad debt expense		16,841		-
Depreciation and amortization		8,620		4,103
Total costs and expenses		147,400		113,446
Other expense - interest expense		19,437		18,765
Net Loss	$	122,786	$	115,039

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For the three months ended June 30, 2013, we generated $44,051 in revenue compared to $17,172 for the three months ended June 30, 2012. The increase of $26,879 or 157% was primarily due to an increase in online game revenue from the Great Merchant.

The costs of services represent the Company's payments to the licensor for the online games which are active. These games began operating in the third quarter of 2012.

For the three months ended June 30, 2013, our selling, general and administrative expenses of $47,488 consisted primarily of $33,910 in professional fees and $3,788 in rental expense. For the three months ended June 30, 2012, our selling, general and administrative expenses of $49,343 consisted primarily of $31,245 in professional fees and $9,036 in rental expense. The decrease of $1,895 or 3.8% was primarily due to decrease in rental expenses.

The related party service agreement are for services provided by a related party for game translation, customer support, and system operations and maintenance. The Company is required to pay $10,000 in cash and $10,000 in cash or stock each month.

The allowance for doubtful accounts represents management’s best estimate of the amount of probable credit losses. The Company has determined that all amounts billed to the game service provider are uncollectible as none of the amounts had been paid, the Company has granted extended payment terms, and the ultimate collection of the receivables is not certain.

Depreciation is of computers and other office furniture and equipment. The amortization relates to the in service license agreements. The impairment of the license agreements relates to the cancellation of the game licenses discussed above.

For the three months ended June 30, 2013, we had $147,400 in total costs and expenses compared to $113,446 for the three months ended June 30, 2012. The increase of $33,954 or 30% was primarily due to increases in cost of goods sold and bad debt expense.

Other Expenses for the three months ended June 30, 2013 consisted of $19,437. Other Expenses for the three months ended June 30, 2012 consisted of $18,765. The increase of $672 or 4% was primarily due to increase in interest expense on loans.

Net Loss

Our Net Loss for the three months ended June 30, 2013 was $122,786 compared to $115,039 for the three months ended June 30, 2012. The increase of $7,747 or 7% was primarily due to increase in total costs and expenses in cost of goods sold and bad debt expense offset by an increase in revenue.

Six months ended June 30, 2013 compared to six months ended June 30, 2012

Our revenues, selling, general and administrative expenses, depreciation, amortization, total costs and expenses, and net loss for the six months ended June 30, 2013 and for the six months ended June 30, 2012 are as follows:

	Six Months Ended June 30, 2013		Six Months Ended June 30, 2012

Revenue	$	77,749	$	35,092
Cost of services		23,827		-
Selling, general and administrative		75,313		128,183
Related party service agreement		120,000		120,000
Bad debt expense		28,510		-
Depreciation and amortization		17,722		8,206
Total costs and expenses		265,372		256,389
Other income - gain on license termination		-		5,000
Other expense - interest expense		38,659		35,622
Net Loss	$	226,282	$	251,919

For the six months ended June 30, 2013, we generated $77,749 in revenue compared to $35,092 for the six months ended June 30, 2012. The increase of $42,657 or 122% was primarily due to increase in revenue from our online game, The Great Merchant.

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For the six months ended June 30, 2013, our selling, general and administrative expenses of $75,313 consisted primarily of $52,596 in professional fees and $7,586 in rental expense. For the six months ended June 30, 2012, our selling, general and administrative expenses of $128,183 consisted primarily of $51,350 in professional fees, $22,481 in travel expense and $21,388 in rental expense.. The decrease of $52,870 or 41% was primarily due to decrease in travel to South Korea in 2013 and the termination of one of the Company's leases in 2013.

For the six months ended June 30, 2013, we had $265,372 in total costs and expenses compared to $256,389 for the six months ended June 30, 2012. The increase of $8,983 or 4% was primarily due to increase in bad debt expense and cost of services offset by a decrease in selling, general and administrative expenses.

Other Expenses for the six months ended June 30, 2013 consisted of $38,659. Other Expenses for the six months ended June 30, 2012 consisted of interest expense of $35,622 and a gain on license termination of $5,000. The decrease of $8,037or 26% was primarily due to a gain of $5,000 on the termination of a license in 2012.

Net Loss

Our Net Loss for the six months ended June 30, 2013 was $226,282 compared to $251,919 for the six months ended June 30, 2012. The decrease of $25,637 or 10% was primarily due to increase in revenue.

Liquidity and Capital Resources

Introduction

Our primary assets are cash and the online game license agreements.

During the six months ended June 30, 2013, our online games business segment generated $77,749 in total revenues while in its open beta testing and commercial service. We have begun to generate revenue from our other license agreements.

Our cash requirements have been relatively small up to this point, but we anticipate that our cash needs will increase dramatically. We anticipate satisfying these cash needs through the sale of our common stock until we can generate enough revenue to sustain our operations.

	As of June 30, 2013		As of December 31, 2012		Change
Cash	$	23,000	$	3,836	$	19,164
Accounts receivable, net of allowance for doubtful accounts of $126,352 and $97,842		-		-
Total current assets		23,000		3,836		19,164
Property and equipment, net of accumulated depreciation of $9,739 and $8,475		740		2,004		(1,264)
License Agreements, net of accumulated amortization of $41,566 and $25,108		110,934		127,392		(16,458)
Prepaid Royalties		10,000		10,000		0
Deposits		1,300		1,300		0
Total assets		145,975		144,532		1,442
Accrued expenses and accounts payable		847,415		833,691		13,724
Due to affiliate		687,950		567,950		120,000
Advances from affiliate		228,556		134,556		94,000
Loans payable		1,299,300		1,299,300		0
Total Current Liabilities		3,063,221		2,835,497		227,724

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Cash Requirements

As stated above, we anticipate that our cash requirements will increase substantially as we begin to increase operations to generate revenue from our license agreements.

Sources and Uses of Cash

Operations

For the six months ended June 30, 2013 we had a net loss of $226,282 compared to $251,919 for the six months ended June 30, 2012. This was offset by depreciation and amortization of $17,722, an increase in accrued expenses of $13,724, an increase in amounts due to affiliate under service agreement of $120,000 for total cash used in our operating activities of $74,836.

Investments

We had $0 invested in cash used in investment activities for the three and six months ended June 30, 2013.

We had $5,000 invested in cash used in investment activities for the six months ended June 30, 2012, which relates to the proceeds from termination of a license agreement of $35,000 and the acquisition of a new license agreement of $40,000.

Financing

For the six months ended June 30, 2013, our cash flows from financing activities totaled $94,000 from an advance from an affiliate of $94,000.

For the six months ended June 30, 2012, our cash flows from financing activities totaled $133,066 from an advance from an affiliate of $20,000, loan proceed s of $117,500, offset by loan repayments of $4,434..

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Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our board of directors, we have identified the following accounting policies that we believe are key to an understanding of our financial statements. These are important accounting policies that require management’s most difficult, subjective judgments.

Valuation of License Agreements

As of June 30, 2013, the Company has entered into license agreements for 15 games for use in South Korea. These agreements allow the Company to release and service these games in South Korea. The Company opened one of these games in South Korea under open beta testing on March 16, 2011. Open Beta testing allows users and players to test the game while not implementing the full revenue generating service of the game. One of the games was launched commercially in July 14, 2012. The remainder of the games are expected to be launched in consecutive succession in the fourth quarter of 2013.

For the game licenses, the Company was required to pay aggregate license fees of $152,500, ranging from $0 to $30,000 per game. For one of the games, the Company was required to prepay $10,000 in non-refundable deposits which can be used for future commission payments. For one game, the Company was required to make a $5,000 non-refundable deposit.

Revenue Recognition

Revenues are recognized when all of the following criteria have been met: persuasive evidence for an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is deemed by our management to be material to investors.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

ITEM 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, with the participation of our Chief Executive Officer, who is also our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of June 30, 2013 to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities Exchange Commission's rules and forms, including to ensure that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer concluded that as of June 30, 2013, our disclosure controls and procedures were not effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1

Legal Proceedings

None.

ITEM 1A

Risk Factors

There are no material changes to the risk factors in our most recent Annual Report on Form 10-K.

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3

Defaults Upon Senior Securities

None.

ITEM 4

Mine Safety Disclosures.

Not applicable.

ITEM 5

Other Information

None.

ITEM 6

Exhibits

31.1		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer and Principal Financial and Accounting Officer

32.1		Principal Executive Officer and Principal Financial and Accounting Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101**		The following materials from Pollex, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Cash Flow, (iii) the Consolidated Balance Sheets, and (iv) Notes to Consolidated Financial Statements tagged as blocks of text.

EX-101.INS		XBRL INSTANCE DOCUMENT

EX-101.SCH		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT

EX-101.CAL		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE

EX-101.DEF		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE

EX-101.LAB		XBRL TAXONOMY EXTENSION LABELS LINKBASE

EX-101.PRE		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

** In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Table of Contents

SIGNATURES

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

	Pollex, Inc.

August 14, 2013
	By:	/s/Seong Sam Cho
		Seong Sam Cho
		Its: President, Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)

EMARINE GLOBAL INC. - FORM 10-Q - August 14, 2013

Attached files

EMARINE GLOBAL INC. Reports