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EX-31.2 - EXHIBIT 31.2 - Demand Pooling, Inc.demand06302013form10qex312.htm
EX-31.1 - EXHIBIT 31.1 - Demand Pooling, Inc.demand06302013form10qex311.htm
EX-32.1 - EXHIBIT 32.1 - Demand Pooling, Inc.demand06302013form10qex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2013.

or

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 000-53394

 

Demand Pooling, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   26-2517798
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
12720 Hillcrest Road, Suite 1060    
Dallas, TX   75230
(Address of principal executive offices)   (Zip Code)

 

(972) 388-1973

(Registrant’s telephone number, including area code)

 

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 No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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). Yes No

 

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 of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer  Accelerated filer
Non-accelerated filer 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 No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class of common stock   Outstanding as of August 15,  2013  
Par value $0.0001 per share   31,187,585  

 
 

 

DEMAND POOLING, INC.

A Development Stage Company

 

- INDEX -

      Page(s)
PART I – FINANCIAL INFORMATION:    
Item 1. Financial Statements (unaudited):    
  Balance Sheets as of June 30, 2013 and December 31, 2012   3
  Statements of Operations for the three and six months ended June 30, 2013 and June 30, 2012 and for the Cumulative Period from Inception (April 29, 2008) to June 30, 2013   4
  Statements of Cash Flows for the six months ended June 30, 2013, June 30, 2012 and for the Cumulative Period from Inception (April 29, 2008) to June 30, 2013   5
  Notes to Financial Statements   6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations   9
Item 3. Quantitative and Qualitative Disclosures About Market Risk   11
Item 4. Controls and Procedures   12
PART II – OTHER INFORMATION:    
Item 1. Legal Proceedings   12
Item 1A Risk Factors   12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   12
Item 3. Defaults Upon Senior Securities   13
Item 4. Mine Safety Disclosures   13
Item 5. Other Information   13
Item 6. Exhibits   13
Signatures   13

 

 

 
 

DEMAND POOLING, INC.

A Development Stage Company

FINANCIAL INFORMATION

BALANCE SHEETS

 

    June
30,
  December 31,
    2013   2012
    (unaudited)   (audited)
ASSETS                
CURRENT ASSETS:              
Cash   $ 85     $ 69  
TOTAL CURRENT ASSETS AND ASSETS   $ 85     $ 69  
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY                
CURRENT LIABILITIES                
Accrued expenses   $ 13,176     $ 13,176  
Shareholder advances     42,815       42,610  
TOTAL CURRENT LIABILITIES AND TOTAL LIABILITIES   $ 55,991     $ 55,786  
STOCKHOLDERS’ DEFICIENCY                
Preferred stock, $.0001 par value; 10,000,000 shares authorized; none issued and outstanding     —         —    
Common stock, $.0001 par value; 100,000,000 shares authorized; 31,187,585 issued and outstanding at June 30, 2013 and December 31, 2012, respectively     3,119       3,119  
Additional paid-in capital     86,294       86,294  
Deficiency accumulated during development stage     ( 142,506  )     (142,317 )
Stock subscription receivable     (2,813  )     (2,813 )
TOTAL STOCKHOLDERS’ DEFICIENCY     (55,906  )     (55,717 )
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY   $ 85     $ 69  

 

 

3
 

 

DEMAND POOLING, INC.

A Development Stage Company

FINANCIAL INFORMATION

STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended  Six Months Ended   April 29, 2008 (inception) through (inception)
   June 30, 2013  June 30, 2012  June 30, 2013  June 30, 2012  June 30, 2013
                
Revenues  $—     $—     $—     $—     $—   
Operating Expenses                         
General & Administrative   91    1,137    189    5,036    142,506 
Net Operating Expenses   91    1,137    189    5,036    142,506 
Net Loss   (91)    (1,137)    (189)    (5,036)    (142,506) 
Basic (loss) per share -- Basic and Diluted   0.00    0.00    0.00    0.00    0.00 
Weighted average number of common shares outstanding   31,187,585    31,187,585    31,187,585    31,187,585      

 

 

4
 

DEMAND POOLING, INC.

A Development Stage Company

FINANCIAL INFORMATION

STATEMENTS OF CASH FLOWS

(Unaudited)

 

      Six Months Ended June 30, 2013       Six Months Ended June 30, 2012       April 28, 2008 (inception) through June 30, 2013  
CASH FLOWS FROM OPERATING ACTIVITIES:                           
Net (loss)   $ (189 )   $ (5,036 )   $ (142,506 )
Increase (decrease) in accounts payable     0       (4,812 )     13,176  
Net cash used by operating activities     (189 )     (9,848 )     (129,330 )
CASH FLOWS FROM FINANCING ACTIVITIES:                        
Proceeds from the sale of common stock     —         —         86,660  
Shareholder Advances     205       9,825       42,815  
Net cash provided by financing activities     16       9,825       129,415  
NET (DECREASE) INCREASE IN CASH     (16 )     (23 )     85  
Cash at beginning of period     69       127       —    
CASH AT END OF PERIOD     85       104       85  

 

 

5
 

 

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

(a) Organization and Business:

 

DEMAND POOLING, Inc. (“the Company”) was incorporated in the state of Delaware on April 29, 2008 for the purpose of raising capital that is intended to be used in connection with its business plan which may include a possible merger, acquisition or other business combination with an operating business. The Company is currently in the development stage. All activities of the Company to date relate to its organization, initial funding, share issuances and regulatory compliance. The Company’s registration statement on Form S-1 was declared effective by the Securities and Exchange Commission in July 2011.

 

(b) Basis of Presentation

 

The accompanying Interim Financial Statements have been prepared in accordance with accounting principles generally accepted for financial statement presentation and in accordance with the instructions to Regulations S-K.

 

(c) Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which assumes the Company will realize its assets and discharge its liabilities in the normal course of business. As reflected in the accompanying financial statements, the Company has a deficit accumulated during the development stage of $142,506 used cash from operations of $129,330 since its inception, and has a working capital deficit of $55,906 at June 30, 2013. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company’s ability to continue as a going concern is also dependent on its ability to find a suitable target company and enter into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing through a reverse merger transaction and/or related party advances, however there is no assurance of additional funding being available. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.

 

(d) Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

(e) Income Taxes:

 

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting basis and the tax basis of the assets and liabilities and are measured using enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely than not, that such tax benefits will not be realized.

 

(f) Loss per Common Share:

 

Basic loss per share is calculated using the weighted-average number of common shares outstanding during each reporting period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period. The Company does not have any potentially dilutive instruments for this reporting period.

6
 

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON’T):

 

(h) Fair Value of Financial Instruments:

 

We adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and long term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of obseverable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

NOTE 2 - CAPITAL STOCK:

 

The total number of shares of capital stock which the Company has authority to issue is one hundred ten million (110,000,000). These shares are divided into two classes with 100,000,000 shares designated as common stock at $.0001 par value (the “Common Stock”) and 10,000,000 shares designated as preferred stock at $.0001 par value (the “Preferred Stock”). The Preferred stock of the Company shall be issued by the Board of Directors of the Company in one or more classes or one or more series within any class and such classes or series shall have such voting powers, full or limited, or no voting powers, and such designations, preferences, limitations or restrictions as the Board of Directors of the Company may determine, from time to time.

 

Holders of shares of Common stock shall be entitled to cast one vote for each share held at all stockholders’ meetings for all purposes, including the election of directors. The Common Stock does not have cumulative voting rights. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock of any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.

 

As of June 30, 2013, the Company has no shares of Preferred Stock outstanding and 31,187,585 shares of Common Stock issued and outstanding.

 

NOTE 3 - INCOME TAXES:

 

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

 

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

 

The federal net operating loss carryforwards expire in the tax years 2029 and 2030. Federal tax laws impose significant restrictions on the utilization of net operating loss carryforwards and research and development credits in the event of a change in ownership of the Company, as defined by the Internal Revenue Code Section 382. The Company’s net operating loss carryforwards and research and development credits may be subject to the above limitations. The relevant FASB standard resulted in no adjustments to the Company’s liability for unrecognized tax benefits. As of both the date of adoption and as of December 31. 2010 there were no unrecognizable tax benefits. Accordingly, a tabular reconciliation from beginning to ending periods is not provided. The Company will classify any future interest and penalties as a component of income tax expense if incurred. To date, there have been no interest or penalties charged or accrued in relation to unrecognized tax benefits. The Company is subject to federal and state examinations for the year 2008 forward. There are no tax examinations currently in progress.

7
 

NOTE 4 - RECENT ACCOUNTING PRONOUNCEMENTS:

 

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and case flows when implemented.

 

NOTE 5- MATERIAL CONTRACTS:

 

Effective as of April 2, 2010, (a) Richard K. Aland (“Purchaser”) agreed to acquire 23,907,138 shares of the Company’s common stock par value $0.0001 for a price of $0.0001 per share and (b) Donald Kelly agreed to acquire 4,218,907 shares of the common stock par value $0.0001 (collectively, the “Shares”) for a price of $0.0001 per share. At the same time, Accelerated Venture Partners, LLC agreed to tender 1,979,760 of its 5,000,000 shares of the Company’s common stock par value $0.0001 for cancellation. This transaction was consummated on April 2, 2010.

 

On April 15, 2010, the Company entered into a Licensing Agreement (“Licensing Agreement”) with Demand Pooling Global Services, LLC (“Licensor”), a related party, pursuant to which the Company was granted a, non-transferrable license for certain territories (an exclusive license for North America and a non-exclusive license for all markets outside of North America) for certain intellectual property developed by Licensor, principally comprising a business concept and related technology which has, as its core product, the aggregation of demand for high-ticket capital equipment and selected commodities to facilitate cooperative purchases of similar products by a significant number of large end-users (the “Technology”). The Technology would also permit and facilitate pooled financing for such purchases in a manner which permits greater financial flexibility for the end-users. Finally, the Technology permits and facilitates the disposal of older equipment and commodities by end-users in order to improve the cost recovery on disposal of surplus or dated equipment and commodities.

 

Except for the rights granted under the License Agreement, Licensor retains all rights, title and interest to the Technology and any improvements thereto—although the License includes the Company’s right to utilize such improvements.

 

The term of the License commences the date of execution of the Licensing Agreement (“Execution Date”) and continues for a term of twenty (20) years, ending on the twentieth anniversary of the Execution Date. In addition to other requirements, the continuation of the license is conditioned on the Company generating net revenues in excess of expenses in the normal course of operations or the funding by the Company of a minimum of $10,000,000 for "qualifying research, development and commercialization expenses" in accordance with the following schedule:

 

  (a) a minimum of US$1,000,000 during the period commencing upon the Execution Date and ending on the first anniversary of the Execution Date; or

 

  (b) a minimum of US$4,000,000 during the period commencing upon the Execution Date and ending on the second anniversary of the Execution Date; or

 

  (c) a minimum of US$10,000,000 during the period commencing upon the Execution Date and ending on the third anniversary of the Execution Date

 

The Licensing Agreement also calls for royalties payable by the Company to the Licensor of ten percent (10%) of all gross revenues resulting from the use of the Technology by the Company and twenty-five percent (25%) of all royalties and fees received from third party sublicensees.

 

The license is also terminatable upon the occurrence of certain events of default specified in the Licensing Agreement.

 

The ownership of the intellectual property necessary for development and modification of the electronic platform resides with the Licensor and becomes a part of the exclusive North American and non-exclusive worldwide (outside North America) License.

 

On June 30, 2013, the Company amended its Licensing Agreement by deleting Article 3 – Research, Development and Commercialization Funding Requirements, and Article 4 – Licensee’s Commercialization Obligations, in their entirety. The Amendment to the Licensing Agreement eliminated the condition of the Company to generate net revenues in excess of expenses in the normal course of business operations or the funding by the Company of a minimum of $10,000,000. As a result of deleting Article 3, the Company no longer has an obligation to fund the research, development and commercialization of the Technology required in Article 4 of the Licensing Agreement.

 

On April 29, 2010, the Company entered into a Consulting Services Agreement with Accelerated Venture Partners LLC (“AVP”), a company controlled by Timothy J. Neher. The agreement requires AVP to provide the Company with certain advisory services that include reviewing the Company’s business plan, identifying and introducing prospective financial and business partners, and providing general business advice regarding the Company’s operations and business strategy in consideration of (a) an option granted by the company to AVP to purchase 3,235,971 shares of the company’s common stock at a price of $0.0001 per share (the “AVP Option”). The AVP Option was immediately exercised by the holder, subject to a repurchase option (“Repurchase Option”) granted to the Company to repurchase the shares at a price of $0.0001 per share upon the occurrence of certain events of default.

 

While the actual Consulting Services Agreement is dated April 29, 2010, the terms of the Agreement were previously agreed and the Agreement was part and parcel of the stock sale which was consummated on April 2, 2010. In fact, the terms of the entire transaction had been the subject of an oral agreement between the parties which was confirmed by the parties in the 4th quarter of 2009. The transaction which was finalized on April 2, 2010 therefore had three components—(1) Sale of 28,126,045 shares to Messrs. Aland and Kelly at a price of $0.0001 per share, (2) AVP’s agreement to reduce his holdings in the Company from 5,000,000 shares to 3,020,240 shares and the option for AVP to acquire 3,235,971 shares at the same $0.0001 per share price. At the time these transactions took place, the Company was a shell with no business (and minimal value), therefore the Company valued all shares issued at the time at par value ($0.0001).

 

On February 22, 2011, the Company received a letter from AVP giving notice of its termination of the Consulting Services Agreement (“Termination Letter”). The Company believes that AVP failed to perform the agreed services under the Consulting Services Agreement. Since AVP did not meet the milestones required in the Consulting Services Agreement, the Company does not believe that it is obligated to pay any amounts to AVP under the terms of the Consulting Services Agreement. The Company exercised the Repurchase Option with respect to the 3,235,971 shares of Company Common Stock which was issued to AVP under the Consulting Services Agreement at a price of $0.0001 per share. The Company’s management believes that the termination of the Consulting Services Agreement will have no impact whatsoever on its plan of operation, principally because AVP was not actively involved in the Company’s operations prior to such termination.

 

NOTE 6 - SHAREHOLDER ADVANCES:

 

Richard Aland and Don Kelly, officers, directors and shareholders of the Company, have advanced to the Company a total of $41,260, which is payable on demand and non-interest bearing. Mr. Kelly resigned as an Officer and Director of the Company in May 2012.

 

NOTE 7 - NOTE RECEIVABLE:

 

In 2010, the Company advanced $7,627 to Demand Pooling Global Services, LLC, a related party, which was payable on demand and non-interest bearing. The advance was repaid in 2011.

8
 

 

NOTE 8 - RELATED PARTY TRANSACTIONS:

 

  1) Richard Aland and Don Kelly advanced to the Company an aggregate of $41,260 (see Note 6 Shareholder Advances)

 

  2) Richard Aland is a 37% owner and a managing member of Demand Pooling Global Services, LLC, a related party, with which the Company has entered into the Licensing Agreement (see Note 5 Material Contracts, above).

 

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

 

Plan of Operations

 

From inception (April 29, 2008), Accelerated Acquisitions V, Inc. was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation.

 

On April 29, 2008, the Registrant sold 5,000,000 shares of Common Stock to Accelerated Venture Partners, LLC for an aggregate investment of $4,000.00. These shares were issued immediately following the incorporation of the Company and were “founder’s shares”. There were no written or oral agreements between the parties relevant to the purchase of the founder’s shares and the purchaser became the sole shareholder of the Company (which at the time was a “shell” corporation. The Registrant sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act.

 

On March 22, 2010 Richard K. Aland (“Purchaser”) agreed to acquire 23,907,138 shares of the Company’s common stock par value $0.0001 for a price of $0.0001 per share and Donald Kelly agreed to acquire 4,218,907 shares of the common stock par value $0.0001 for a price of $0.0001 per share at the same time, Accelerated Venture Partners, LLC agreed to tender 1,979,760 of its 5,000,000 shares of the Company’s common stock par value $0.0001 for cancellation. The entire transaction was consummated on April 2, 2010.

 

The transaction was the subject of an oral agreement between the parties which designated the applicable share amounts and share price and was one integrated transaction. There was no specific consideration allocated to any of its elements; i.e. there was no specific consideration for the tender of shares apart from the overall consideration paid by Messrs. Aland and Kelly for their concurrent purchase of their interest in the Company. By letter dated March 25, 2010, AVP tendered 1,979,760 shares of its stock to the Company for cancellation.

 

Messrs. Aland and Kelly subsequently made gifts of 136,000 and 110,000 shares, respectively, to an aggregate of ten donees. All gifted shares were donated prior to April 2, 2010.

 

Following these transactions, Mr. Aland owned 69.12% and Mr. Kelly owned 11.94% of the Company’s 34,391,506 issued and outstanding shares of common stock par value $0.0001 and the interest of Accelerated Venture Partners, LLC was reduced to approximately 9.69% of the total issued and outstanding shares. Simultaneously with the share purchase, Timothy Neher resigned from the Company’s Board of Directors and Messrs. Aland and Kelly were simultaneously appointed to the Company’s Board of Directors. Such action represents a change of control of the Company. Mr. Kelly resigned as an Officer and Director of the Company in May 2012.

9
 

 

Prior to the purchase of the shares, the Purchasers were not affiliated with the Company. However, the Purchasers will be deemed affiliates of the Company after the share purchase as a result of their stock ownership interest in the Company. The purchase of the shares by the Purchasers was completed pursuant to written Subscription Agreements with the Company. The purchase was not subject to any other terms and conditions other than the sale of the shares in exchange for the cash payment.

 

On April 15, 2010, the Company entered into a Licensing Agreement (“Licensing Agreement”) with Demand Pooling Global Services, LLC (“Licensor”), a related party, pursuant to which the Company was granted a, non-transferrable license for certain territories (an exclusive license for North America and a non-exclusive license for all markets outside of North America) for certain intellectual property developed by Licensor, principally comprising a business concept and related technology which has, as its core product, the aggregation of demand for high-ticket capital equipment and selected commodities to facilitate cooperative purchases of similar products by a significant number of large end-users (the “Technology”). The Technology would also permit and facilitate pooled financing for such purchases in a manner which permits greater financial flexibility for the end-users. Finally, the Technology permits and facilitates the disposal of older equipment and commodities by end-users in order to improve the cost recovery on disposal of surplus or dated equipment and commodities. The License also provides for the use of a datacenter through a third-party provider. The senior manager of both firms is the same, Richard Aland.

 

On June 30, 2013, the Company amended its Licensing Agreement by deleting Article 3 – Research, Development and Commercialization Funding Requirements, and Article 4 – Licensee’s Commercialization Obligations, in their entirety. The Amendment to the Licensing Agreement eliminated the condition of the Company to generate net revenues in excess of expenses in the normal course of business operations or the funding by the Company of a minimum of $10,000,000. As a result of deleting Article 3, the Company no longer has an obligation to fund the research, development and commercialization of the Technology required in Article 4 of the Licensing Agreement.

 

Except for the rights granted under the License Agreement, Licensor retains all rights, title and interest to the Technology and any improvements thereto—although the License includes the Company’s right to utilize such improvements.

 

The ownership of the intellectual property necessary for development and modification of the electronic platform resides with the Licensor and becomes a part of the exclusive North American and non-exclusive worldwide (outside North America) License.

 

In order to implement and operate a pool, the Company does not currently need additional hardware or software beyond that which it has licensed from the Licensor and infrastructure that it leases on an oral month-to-month basis from Databank, LLC. The server capacity is not currently stressed and one standby server provides redundancy for the platform application. The Company does not anticipate a number of user accesses (“hits” to its system) that would be typical for consumer-oriented applications that might achieve accesses of hundreds of thousands or even millions of hits during a 24-hour period. It is likely that the Company’s website would only achieve hundreds of hits or thousands of hits during a 24 hour period, which does not stress the capacity of the existing servers. To double the capacity, the Company could convert its redundant server to an application server or add additional servers, as needed for new products. The current cost of new servers, configured as believed to be necessary for the Company’s foreseeable needs, is approximately $4,000-$5,000 each and it is anticipated that new servers, if needed, will be purchased and owned by the Company or leased from the server manufacturers.

 

No authorizations are needed to launch, implement and operate pooled transactions. The Company determines when pools are to be launched and how potential users are to be addressed. Currently, its marketing approach is through a direct email campaign based upon contacts which the Company has identified. Most of these contacts, which now number fewer than 10,000 out of the estimated 87,000 state and local government entities, have been obtained by the Company investigating state and local government websites (cities, counties, states, airports, transit agencies, school and hospital districts and higher education facilities) and trade organization websites. The Company intends to continue and to expand its email notification activities and, if funding becomes available and/or net revenue generation is sufficient, to investigate the affordability of implementing advertising and public relations campaigns.

 

The Licensing Agreement calls for royalties payable by the Company to the Licensor of ten percent (10%) of all gross revenues resulting from the use of the Technology by the Company and twenty-five percent (25%) of all royalties and fees received from third party sublicensees.

 

The license is terminatble upon the occurrence of certain events of default specified in the License Agreement.

 

On July 2, 2010, the Company completed an offering of our common shares under the provisions of the Delaware securities laws and under an exemption from the federal securities laws. We sold a total of 9,250 common shares at a price of $2.00 per share to a total of thirty-five investors. We raised a total of $18,500 in this offering.

10
 

 

Results of Operations

 

For the three months ending June 30, 2013 and 2012, the Company had no revenues and incurred minimal general and administrative expenses.

 

For the period from inception (April 29, 2008) through June 30, 2013, the Company had no activities that produced revenues from operations and had a net loss of ($142,506) due to legal, accounting, audit and other professional service fees incurred in relation to the formation of the Company and the filing of the Company’s Registration Statement on Form 10 filed in August 2008, the Company’s registration statement on Form S-1 and other SEC-related compliance matters.

 

Liquidity and Capital Resources

 

As of June 30, 2013, the Company had cash on hand of $85 and total current liabilities of $55,991 Management believes that the Company will need to raise approximately $1,500,000 in the next 12 months in order to meet the requirements of its Business Plan and achieve its growth targets. In July 2010, we sold a total of 9,250 common shares at a price of $2.00 per share, which netted the Company a total of $18,500. On September 1, 2011, 3 shareholders converted their loans of $64,100 to 32,050 shares at $2.00 per share.

 

The Company’s net losses to date are primarily attributable to pre-launch salaries and costs of general business model implementation. The Company believes that these results will not be characteristic of the Company’s operating results once it launches pooled purchases. Until recently, the Company had only conducted extensive beta testing in order to gather information for improving the performance and scope of the platform. Beta testing included execution of a series of sequential pooled purchases for which no fees were charged. The Company has multiple pools in progress for a variety of products including, transit rail cars, police vehicles, motor fuels, water treatment of drinking and waste water, and will be charging its full fees for successful operation of the pools. The Company also believes that the results of these pooled purchases will be instrumental in facilitating additional funding for the Company. It is expected that the Company will remain substantially dependent upon platform development by the Licensor, although the Company may seek platform enhancements from other sources or may enhance its application internally.

 

The Company has nominal assets and has generated no revenues since inception. The Company is also dependent upon the receipt of capital investment or other financing to fund its ongoing operations and to execute its business plan of seeking a combination with a private operating company. If continued funding and capital resources are unavailable at reasonable terms, the Company may not be able to implement its plan of operations.

 

Off-Balance Sheet Arrangements

 

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “Smaller Reporting Company” as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K.

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Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

The Company maintains a wet of disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

The Chief Executive Officer/Chief Financial Officer of the Company has evaluated the effectiveness of our disclosure controls and procedures as required by the Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer/Chief Financial Officer has concluded that these disclosure controls and procedures are effective. There were no changes in our internal controls over financial reporting during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Changes in Internal Control over Financial Reporting

 

No changes in the Company’s internal control over financial reporting have come to management’s attention during the Company’s last fiscal quarter that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.

 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

To the best knowledge of the Company’s management, the Company is not a party to any legal proceeding or litigation.

 

Item 1A. Risk Factors.

 

There have been no material changes to our Risk Factors disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None

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Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures

 

None

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

Exhibit

No.

  Description
 31.1   Certification of the Company’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
 31.2   Certification of the Company’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
 32.1   Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  DEMAND POOLING, INC.
   
Dated: August 19, 2013  By: /s/ Richard K. Aland
   

Richard K. Aland
Chairman and Chief Executive Officer and

Chief Financial Officer

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