UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

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

 

For the quarterly period ended March 31, 2014

 

or

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION FROM ______ TO ______.

 

Commission File Number: 000-54418

 

 

NETWORKING PARTNERS, INC.

 (Exact name of registrant as specified in its charter)

 

Nevada		45-0921541
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
857 Sarno Road Melbourne, Florida		32935
(Address of principal executive offices)		(Zip code)

 

Registrant’s telephone number: (321) 984-8858

 

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 [X]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.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 [X] 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 the 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 [X]

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

 

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [  ] No [  ]

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of August 25, 2014, there were 15,445,484 outstanding shares of the Registrant’s Common Stock, $.001 par value.

 

 

 

INDEX

 

		Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements		F-1
Consolidated Balance Sheets at March 31, 2014 (unaudited) and December 31, 2013		F-1
Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and 2013 and for the Period November 2, 2010 (inception) through March 31, 2014 (unaudited)		F-2
Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2014 and for the Period November 2, 2010 (inception) through March 31, 2014 (unaudited)		F-3
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013 and for the Period November 2, 2010 (inception) through March 31, 2014 (unaudited)		F-4
Notes to Consolidated Financial Statements – March 31, 2014 (unaudited)		F-5
Item 2. Management’s Discussion and Analysis of Financial Condition and Plan of Development Stage Activities		3
Item 3. Quantitative and Qualitative Disclosures about Market Risk		5
Item 4. Controls and Procedures		5
PART II – OTHER INFORMATION
Item 1. Legal Proceedings		6
Item 1.A. Risk Factors		6
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		6
Item 3. Defaults Upon Senior Securities		6
Item 4. Mine Safety Disclosures		6
Item 5. Other Information		6
Item 6. Exhibits		7
SIGNATURES		8

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

Consolidated Balance Sheets

 

		March 31, 2014				December 31, 2013
		(unaudited)
ASSETS
Current Assets
Prepaid expenses		$	3,000			$	-
Total Current Assets			3,000				-
Total Assets		$	3,000			$	-
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable		$	58,089			$	55,089
Due to related-party			3,119				3,119
Advances payable			36,160				36,160
Notes payable			43,000				40,000
Accrued interest			10,078				9,073
Total Liabilities			150,446				143,441
Commitments and Contingencies (See Note 7)
Stockholders’ Equity (Deficit)
Common stock: 95,000,000 shares authorized; $0.001 par value, 15,445,484 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively			15,445				15,445
Preferred stock: 5,000,000 shares authorized; $0.001 par value, no shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively			-				-
Additional paid In capital			3,791,874				3,791,874
Deficit accumulated during the development stage			(3,954,765	)			(3,950,760	)
Total Stockholders’ Equity (Deficit)			(147,446	)			(143,441	)
Total Liabilities and Stockholders’ Equity (Deficit)		$	3,000			$	-

 

See accompanying unaudited notes to the unaudited consolidated financial statements

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

Consolidated Statements of Operations

(unaudited)

 

										For the Period
										from
										November 2, 2010
		For the Three Months Ended								(inception)
		March 31,								through
		2014				2013				March 31, 2014
Revenues		$	-			$	-			$	1,812
Cost of Sales			-				-				239
Gross Profit			-				-				1,573
Operating Expenses
General and Administrative			2,000				14,536				107,347
Impairment of Web Sites			-				-				3,731,183
Professional Services			1,000				3,300				104,539
Total Operating Expenses			3,000				17,836				3,943,069
Other Expenses
Interest Expense			(1,005	)			(1,000	)			(13,269	)
Total Other Expenses			(1,005	)			(1,000	)			(13,269	)
Net Loss		$	(4,005	)		$	(18,836	)		$	(3,954,765	)
Basic and Diluted Loss per Share		$	(0.00	)		$	(0.00	)		$	(0.26	)
Basic and Diluted Weighted Average Number of Shares Outstanding			15,445,484				15,445,484				14,977,328

 

See accompanying unaudited notes to the unaudited consolidated financial statements

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

Consolidated Statement of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2014 and for the Period from November 2, 2010 (inception) to March 31, 2014

(unaudited)

 

														Deficit
														Accumulated
										Additional				during the				Total
		Common Stock								Paid-in				Development				Stockholders’
		Shares				Amount				Capital				Stage				Equity (Deficit)
Balance at inception November 2, 2010			-			$	-			$	-			$	-			$	-
Common stock subscribed			7,556,327				7,556				-				-				7,556
Net loss for the period from November 2, 2010 (inception) through December 31, 2010			-				-				-				(3,500	)			(3,500	)
Balance December 31, 2010			7,556,327				7,556				-				(3,500	)			4,056
Common stock issued for asset acquisition			7,260,000				7,260				3,622,740				-				3,630,000
Common stock issued for debt conversions			629,157				629				169,134				-				169,763
Net loss for the year ended December 31, 2011			-				-				-				(140,834	)			(140,834	)
Balance December 31, 2011			15,445,484				15,445				3,791,874				(144,334	)			3,662,985
Net loss for the year ended December 31, 2012			-				-				-				(3,749,031	)			(3,749,031	)
Balance December 31, 2012			15,445,484				15,445				3,791,874				(3,893,365	)			(86,046	)
Net loss for the year ended December 31, 2013			-				-				-				(57,395	)			(57,395	)
Balance December 31, 2013			15,445,484				15,445				3,791,874				(3,950,760	)			(143,441	)
Net loss for the three months ended March 31, 2014			-				-				-				(4,005	)			(4,005	)
Balance March 31, 2014			15,445,484			$	15,445			$	3,791,874			$	(3,954,765	)		$	(147,446	)

 

See accompanying unaudited notes to the unaudited consolidated financial statements

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(unaudited)

 

										For the Period
										from
										November 2, 2010
		For the Three Months Ended								(inception)
		March 31,								through
		2014				2013				March 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(4,005	)		$	(18,836	)		$	(3,954,765	)
Adjustments to reconcile net loss to net cash used in operating activities:
Intangible asset impairment			-				-				3,731,183
Changes in operating assets and operating liabilities:
Prepaids			(3,000	)			-				(3,000	)
Accounts payable			3,000				(13,324	)			73,089
Accrued interest			1,005				1,000				13,236
Net Cash Used In Operating Activities			(3,000	)			(31,160	)			(140,257	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Intangible asset - Koiniclub.com (Beta v2)			-				-				(101,183	)
Net Cash Used In Investing Activities			-				-				(101,183	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Stock subscriptions			-				-				7,556
Proceeds from advances payable			-				31,160				36,160
Proceeds from related parties			-				-				3,119
Proceeds from notes payable			3,000				-				194,605
Net Cash Provided By Financing Activities			3,000				31,160				241,440
NET CHANGE IN CASH			-				-				-
CASH AT BEGINNING OF PERIOD			-				-				-
CASH AT END OF PERIOD		$	-			$	-			$	-
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest		$	-			$	-			$	3,190
Cash paid for taxes		$	-			$	-			$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued in asset acquisition		$	-			$	-			$	3,630,000
Common stock issued upon conversion of notes payable and accrued interest		$	-			$	-			$	154,763
Common stock issued upon conversion of accounts payable		$	-			$	-			$	15,000

 

See accompanying unaudited notes to the unaudited consolidated financial statements

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(unaudited)

 

NOTE 1 - ORGANIZATION, BUSINESS AND OPERATIONS

 

Networking Partners, Inc. (the “Company”) was organized under the laws of the State of Nevada on November 2, 2010. The Company’s business is based on developing tools and technology in connection with the acquisition of the same, and partnering with compatible businesses for in-house developed projects aimed at developing networking systems.

 

On November 5, 2010, the Company created a wholly owned foreign subsidiary named Koini, Inc., (“Koini”), a Canadian corporation located on Prince Edward Island, Canada. Koini was setup as a special purpose company to manage and continually develop koini.com and koiniclub.com, two fully functional social networking web-sites purchased from a third party on December 21, 2010. The websites were purchased by the Company to have Koini run and manage. Koini.com and “koiniclub.com’s” target market was to be young people between the ages of 7 and 13. The functionality of the websites was to be comparable to the combination of Facebook, Twitter and Myspace’s networking applications. The websites’ customizable profiles and pages provided a Myspace feel and the functionality of its “Friending” and “Groups” provided a Facebook feel.

 

On August 20, 2011 the board of directors decided to change the legal name of Koini Inc. (Canada) to Networking Partners Canada Inc.

 

During 2012, management impaired the cost of the websites due to the inability of raising capital and the lack of revenue. The Company ceased operations in the Canadian subsidiary named Koini, Inc., in 2013.

 

Management has been actively pursuing, and has accelerated its efforts, to evaluate emerging technologies and acquire complimentary operational assets in emerging markets, with a primary focus on technology and technology delivery, marketing and marketing solutions, on which to base the Company’s future business activities. Management is seeking to acquire assets and technology with high potential for immediate growth which will generate revenue and have complimentary and synergistic business models to further the Company’s Plan of Operations, in exchange for the Company’s securities. The Company has not realized any revenues as of yet from its plan of operations.

 

NOTE 2 - BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2014 are not indicative of the results that may be expected for the year ending December 31, 2014 or for any other future period. These unaudited consolidated financial statements and the unaudited notes thereto should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on July 14, 2014 (our “10-K”).

 

The Company is in the development stage as defined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage Entities. As such, the Company is presented as in the development stage from November 2, 2010 through March 31, 2014. During the development stage the Company was primarily engaged in the development of social media platforms. The initial focus of the Company’s research and development efforts was the generation of products and services for web-sites geared toward the children’s market. The production and marketing of the Company’s web-sites and its ongoing research and development activities will be subject to extensive review by the Company’s management and Board of Directors. The Company’s success will depend in part on its ability to generate advertising sales. There can be no assurance of the Company’s successful efforts. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company’s financial needs.

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(unaudited)

 

NOTE 2 - BASIS OF PRESENTATION (continued)

 

There was no revenue for the three months ended March 31, 2014 and for the years ended December 31, 2013 and 2012. The accompanying consolidated financial statements for the three months ended March 31, 2014 have been prepared assuming the Company will continue as a going concern. (See Note 3)

 

NOTE 3 - 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 consolidated financial statements, the Company had an accumulated deficit of $3,954,765 at March 31, 2014. For the three months ended March 31, 2014 the Company had a net loss of $4,005 and net cash of $3,000 used in operations. The Company had a working capital deficiency of $147,446 at March 31, 2014.

 

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 accompanying 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 from the possible inability of the Company to continue as a going concern.

 

During the fiscal year 2014, management intends to raise additional debt and/or equity financing to fund future operations and to acquire assets and technology with high potential for immediate growth which will generate revenue and provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company’s financial needs.

 

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation - The consolidated financial statements include the accounts of Networking Partners, Inc. and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

Management’s Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying unaudited consolidated financial statements include the valuation allowance on deferred tax assets.

 

Cash and Cash Equivalents - For purposes of the Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.

 

Net Income per Common Share - Net loss per common share is computed pursuant to section 260-10 of the FASB Accounting Standards Codification. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of March 31, 2014.

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(unaudited)

 

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Fair Value for Financial Assets and Financial Liabilities - We measure our financial assets and liabilities in accordance with United States generally accepted accounting principles. For certain of our financial instruments, including cash and cash equivalents, accounts payable and accrued and other liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, also approximate fair value because current interest rates available to us for debt with similar terms and maturities are substantially the same.

 

The Company follows 825-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

 

Level 1:	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2:	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3:	Pricing inputs that are generally observable inputs and not corroborated by market data.

 

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at March 31, 2014, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the three months ended March 31, 2014.

 

Segment Reporting - In June, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 131,“Disclosures about Segments of an Enterprises and Related Information”. This Statement requires companies to report information about operating segments in interim and annual financial statements. It also requires segment disclosures about products and services, geographic areas, and major customers. The Company determined that it did not have any separately reportable operating segments as of March 31, 2014.

 

Recent Accounting Pronouncements

 

Financial Accounting Standards Board, Accounting Standard Updates which are not effective until after March 31, 2014 are not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

 

NOTE 5 - DEBT

 

Due to related-party - consisted of the following at March 31, 2014 and December 31, 2013,

 

		March 31, 2014				December 31, 2013
Due to related-party		$	3,119			$	3,119

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(unaudited)

 

NOTE 5 - DEBT (continued)

 

As of December 31, 2012, the Company held a receivable from a Canadian entity, Anne’s Diary Inc., in the amount of $5,300 in relation to the purchase of the social networking websites. During 2013, this receivable was assigned by Anne’s Diary to Enzo Taddei, the Company’s sole officer and director, and is netted in the Due to related-party amount of $3,119 as of December 31, 2013, which also includes non-interest bearing advances to the Company from our former President, Pino G. Baldassarre during 2011, that were assigned by the former president to Enzo Taddei, the Company’s sole officer and director and $5,264 of non-interest bearing advances to the Company by Mr. Taddei during the third quarter of 2013 in the form of payments made by Mr. Taddei on behalf of the Company for its operating expenses.

 

Advances payable - consisted of the following at March 31, 2014 and December 31, 2013,

 

		March 31, 2014				December 31, 2013
Advances payable		$	36,160			$	36,160

 

Advances payable represents non-interest bearing advances to the Company during 2013, from a non-affiliated third party individual, utilized for payments to service providers.

 

Notes Payable and Accrued interest - consisted of the following at March 31, 2014 and December 31, 2013,

 

		March 31, 2014				December 31, 2013
Notes payable		$	43,000			$	40,000
Accrued interest		$	10,078			$	9,073

 

During September and October of 2011 the Company executed Promissory Notes with three unaffiliated individuals for an aggregate amount of $40,000 loaned to the Company for working capital purposes. Each Promissory Note bears interest at the rate of 10% and has a term of eighteen months. To date, the above-mentioned three note holders have verbally agreed to renew and extend the Promissory Notes each month until the Company has the available funds to repay the principal and interest: a $5,000 note was issued September 1, 2011 and was initially due February 28, 2013; a $15,000 note was issued September 1, 2011 and was initially due March 18, 2013; and a $20,000 note was issued October 11, 2011 and was initially due April 10, 2013. In addition, the Company executed a Promissory Note with an unaffiliated individual for an aggregate amount of $3,000 loaned to the Company for working capital purposes on March 25, 2014 bearing interest at the rate of 10% with a term of one year and maturity date of March 25, 2015. The Promissory Notes are presented on the Company’s financial statements in the amount of $43,000 and $40,000 at March 31, 2014 and December 31, 2013, respectively. Interest expense relating to the Promissory Notes was $1,005 for the three months ended March 31, 2014 and accrued interest relating to the Promissory Notes was $10,078 and $9,073 at March 31, 2014 and December 31, 2013, respectively.

 

NOTE 6 - STOCKHOLDERS EQUITY (DEFICIT)

 

A) Common Stock

 

The Company had 15,445,484 issued and outstanding common stock shares as of March 31, 2014. No shares of common stock were issued during the three months ended March 31, 2014 or fiscal 2013 and 2012.

 

 

NETWORKING PARTNERS, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(unaudited)

 

NOTE 6 - STOCKHOLDERS EQUITY (DEFICIT) (continued)

 

B) Preferred Stock

 

The company’s Articles of Incorporation authorize the issuance of 5,000,000 preferred shares at $0.001 par value per share. The Board of Directors has the power to designate the rights and preferences of the preferred stock and issue the preferred stock in one or more series.

 

No preferred shares have been issued since inception through March 31, 2014.

 

NOTE 7 - COMMITMENTS AND CONTINGENCIES

 

Legal Matters

 

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of March 31, 2014, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

Since inception, the Company has conducted transactions with officers. See Note 5 for details of these transactions.

 

NOTE 9 - SUBSEQUENT EVENTS

 

On April 22, 2014, Networking Partners, Inc. (“Company”) entered into a definitive Asset Purchase Agreement with Mr. Chad Steinhart (“Steinhart”), pursuant to which the Company would acquire certain assets from Mr. Steinhart. The closing of the asset acquisition is anticipated to occur in August 2014.

 

The assets to be acquired include, among other things, a proprietary integration code for web development and software for voice over internet protocol (“VoIP”) integration. This works together to form a total solution resulting in an internet telephony service provider (“ITSP”) platform that allows hosted private branch exchange (“PBX”) in the cloud and other telecom features. This platform integrates several types of telecommunications carrier grade class 4 and class 5 soft-witches from an open source framework by Digium, Inc. to licensed software and equipment and infrastructure providers, Telinta, Inc. and PortaOne, Inc. This allows the convergence around a carrier grade billing platform including soft-switches as media applications for voice and video calls, conferencing, interactive voice response (“IVR”) applications and unified messaging applications integrated into one simple web portal. This integration is being purchased and allows the end using businesses that pay for service to have a robust PBX phone system including phone lines hooked to the Cloud. The integrations include the code, infrastructure and equipment allowing the soft-switches and web development to operate in a simple interface that uses the technology just mentioned and hosts the integration portal on the domains www.SonantTelecon.com and www.SonantTelecom.net. This Agreement includes all the code, web development integrations and an infrastructure to facilitate being an ITSP. It also includes all of Steinhart’s vendor relationships and the lists of businesses that have utilized the technology on a test basis or are currently using the technology on a trial basis and are willing to enter into formal agreements to continue using the technology which will generate monthly residual revenues to the owner.

 

The purchase consideration to be paid at the closing shall be 625,000 shares of Series “A” Convertible Preferred Stock. Each share of Series “A” Convertible Preferred Stock shall have 100 votes per share and shall be convertible into 100 shares of the Company’s common stock, such conversion right shall be exercisable on or after the second anniversary of the closing of the asset acquisition.

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Plan of Development Stage Activities.

 

Cautionary Forward - Looking Statement

 

The following discussion and analysis of the results of operations and financial condition of Networking Partners, Inc. should be read in conjunction with the unaudited financial statements, and the related notes. References to “we,” “our,” or “us” in this section refers to the Company and its subsidiaries. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions.. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

 

Certain matters discussed herein may contain forward-looking statements that are subject to risks and uncertainties.

 

Such risks and uncertainties include, but are not limited to, the following:

 

	●	the volatile and competitive nature of our industry,
	●	the uncertainties surrounding the rapidly evolving markets in which we compete,
	●	the uncertainties surrounding technological change of the industry,
	●	our dependence on its intellectual property rights,
	●	the success of marketing efforts by third parties,
	●	the changing demands of customers and
	●	the arrangements with present and future customers and third parties.

 

Should one or more of these risks or uncertainties materialize or should any of the underlying assumptions prove incorrect, actual results of current and future operations may vary materially from those anticipated.

 

Overview

 

On November 5, 2010, the Company created a wholly owned foreign subsidiary named Koini, Inc., (“Koini”), a Canadian corporation located on Prince Edward Island, Canada. Koini was setup as a special purpose company to manage and continually develop koini.com and koiniclub.com, two fully functional social networking web-sites purchased from a third party on December 21, 2010. The websites were purchased by the Company to have Koini run and manage. Koini.com and “koiniclub.com’s” target market was to be young people between the ages of 7 and 13. The functionality of the websites was to be comparable to the combination of Facebook, Twitter and Myspace’s networking applications. The websites’ customizable profiles and pages provided a Myspace feel and the functionality of its “Friending” and “Groups” provided a Facebook feel.

 

On August 20, 2011 the board of directors decided to change the legal name of Koini Inc. (Canada) to Networking Partners Canada Inc.

 

During 2012, management impaired the cost of the websites due to the inability of raising capital and the lack of revenue. The Company ceased operations in the Canadian subsidiary named Koini, Inc., in 2013.

 

Management has been actively pursuing, and has accelerated its efforts, to evaluate emerging technologies and acquire complimentary operational assets in emerging markets, with a primary focus on technology and technology delivery, marketing and marketing solutions, on which to base the Company’s future business activities. Management is seeking to acquire assets and technology with high potential for immediate growth which will generate revenue and have complimentary and synergistic business models to further the Company’s Plan of Operations, in exchange for the Company’s securities. The Company has not realized any revenues as of yet from its plan of operations.

 

 

Business Development

 

We are a development stage corporation and have recently started our business operations, and have generated minimal revenues.

 

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 had an accumulated deficit of $3,954,765 at March 31, 2014. There was no revenue for the three months ended March 31, 2014 and the Company had a working capital deficiency of $147,446 at March 31, 2014.

 

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 accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. It is our belief that if we become current with our regulatory filings and raise a sufficient amount of capital, such monies will last twelve months and will allow us to fully implement our business plan.

 

Results and comparison of the three month periods ended March 31, 2014 and 2013:

 

The Company had no revenue for the three months ended March 31, 2014 and 2013.

 

Operating expenses were $3,000 and $17,836 for the three months ended March 31, 2014 and 2013, respectively. For the three months ended March 31, 2014, operating expenses consisted of $1,000 of legal and auditing professional services and $2,000 of general and administrative expenses. For the three months ended March 31, 2013, operating expenses consisted of $3,300 of legal and auditing professional services and $14,536 of general and administrative expenses which included $10,000 of consulting expenses and $3,500 of filing expenses related to Company becoming current with its regulatory filings.

 

The Company incurred interest expense of $1,005 and $1,000 for the three months ended March 31, 2014 and 2013, respectively.

 

The Company had net losses of $4,005 and $18,836 for the three months ended March 31, 2014 and 2013, respectively.

 

Based on 15,445,484 weighted average shares outstanding for the three months ended March 31, 2014, the loss per share was $0.00.

 

Liquidity and Capital Reserves:

 

For the three months ended March 31, 2014, we had no income and our operating expenses of $3,000 consisted primarily of legal and auditing professional services and $2,000 of general and administrative expenses.

 

As of March 31, 2014, the Company had no cash and a working capital deficit of $147,446.

 

The Company withdrew its offering to raise additional capital in the amount of $2,500,000 on September 25, 2013 and the Company’s intention is to seek additional capital through other means that we are currently investigating. The Company is currently paying for certain operating expenses with funds that are paid directly to service providers on behalf of the Company by the Company’s sole officer and director. During the three month period ended March 31, 2014, the Company executed a Promissory Note with an unaffiliated individual for an aggregate amount of $3,000 loaned to the Company for working capital purposes on March 25, 2014 bearing interest at the rate of 10% with a term of one year and maturity date of March 25, 2015. The loaned funds are recorded on the Company’s books as part of Notes payable. Depending upon market conditions, the Company may not be successful in raising sufficient additional capital for it to achieve its business objectives. In such event, the business, prospects, financial condition, and results of operations could be materially adversely affected.

 

 

The Company’s address for correspondence is 857 Sarno Road, Melbourne, Florida 32935.

 

There is no guarantee that the Company will be successful in its attempt to raise capital sufficient to meet its cash requirements for the next twelve months. If the Company is not successful in its effort to raise sufficient capital to meet its cash requirements, the business will fail and the Company will cease to do business.

 

Item 3. Quantitative and Qualitative Disclosure about Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

(a)	Evaluation of disclosure controls and procedures.

 

Our management carried out an evaluation, with the participation of our Principal Executive Officer and Principal Financial Officer, required by Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on their evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under SEC rules and forms and is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. These controls were ineffective due to material weaknesses in our internal control over financial reporting discussed below.

 

Our management, our Chief Executive Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes policies and procedures that:

 

	(1)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
	(2)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
	(3)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of our assets that could have a material effect on our financial statements.

 

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design safeguards to reduce, though not eliminate, this risk.

 

Our management used the framework set forth in the report entitled, “Internal Control — Integrated Framework” published by the Committee of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over financial reporting. Based on this assessment, our management concluded that our internal control over financial reporting was not effective at March 31, 2014 due to the existence of material weaknesses in our internal controls.

 

 

A material weakness is a control deficiency, or a combination of control deficiencies, that results in a more than remote likelihood that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

 

As of March 31, 2014, our management had identified the following material weaknesses which still exist through the date of this report:

 

As of March 31, 2014 and as of the date of this report, we did not maintain effective controls over the control environment. Specifically, the Board of Directors does not currently have a director who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. Also, because of the size of the Company’s administrative staff, controls related to the segregation of certain duties have not been developed and the Company has not been able to adhere to them. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. Additionally, we have identified a material weakness relating to our lack of expertise in accounting for equity based transactions.

 

We are actively seeking to remediate these material weaknesses in the following manner:

 

(1)

We are currently seeking additional, independent directors to join our board of directors. The addition of such board members would provide us with independent directors who would be monitoring the actions of our top management. Our efforts to do so have been hindered substantially by the fact that we do not have a directors and officers insurance policy in place. Because such policies are very expensive, we believe it is in our best interest to forego the purchase of such a policy and instead focus the use of our financial resources on our development and growth.

 

Notwithstanding the existence of these material weaknesses in internal controls, we believe that our consolidated financial statements fairly present, in all material respects, our consolidated balance sheets at March 31, 2014 and our consolidated statements of operations, stockholders’ deficit and cash flows for the three months ended March 31, 2014 in conformity with GAAP.

 

(b)

Changes in Internal Control over Financial Reporting

 

During the three months ended March 31, 2014, we did not make any changes in our internal controls over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company is not aware of any threatened or pending litigation against the Company.

 

Item 1A. Risk Factors.

 

Not applicable.

 

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

 

Not applicable.

 

Item 3. Defaults upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

 

Item 6. Exhibits.

 

See Exhibit Index below for exhibits required by Item 601 of regulation S-K.

 

EXHIBIT INDEX

 

List of Exhibits attached or incorporated by reference pursuant to Item 601 of Regulation S-K:

 

Exhibit		Description
31.1*		Certification under Section 302 of Sarbanes-Oxley Act of 2002
31.2*		Certification under Section 302 of Sarbanes-Oxley Act of 2002
32.1*		Certification under Section 906 of Sarbanes-Oxley Act of 2002
32.2*		Certification under Section 906 of Sarbanes-Oxley Act of 2002
101*		Interactive Data Files pursuant to Rule 405 of Regulation S-T

 

* Filed herewith.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

	NETWORKING PARTNERS, INC.
Date: August 27, 2014	/s/ Enzo Taddei
	Enzo Taddei
	Chief Executive Officer
	(Principal Executive Officer)
	Chief Financial Officer
	(Principal Accounting and Financial Officer)