Attached files
file | filename |
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EX-3.(III) - EX-3.(III) - Demand Pooling, Inc. | v209042_ex3iii.htm |
EX-5.1 - EX-5.1 - Demand Pooling, Inc. | v209042_ex5-1.htm |
EX-10.3 - EX-10.3 - Demand Pooling, Inc. | v209042_ex10-3.htm |
EX-23.2 - EX-23.2 - Demand Pooling, Inc. | v209042_ex23-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1/A
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Fourth
Amendment)
ACCELERATED
ACQUISITIONS V, INC.
(Name of
small business issuer in its charter)
(Exact Name of Registrant as Specified in its Charter)
Delaware
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000-53392
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26-2517763
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||
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File
No.)
|
(I.R.S.
Employer
Identification
No.)
|
||
12720
Hillcrest Road, Suite 1045, Dallas, Texas
|
75230
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|||
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||||
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (972)
388-1973
n/a
(Former
name or former address, if changed since last report)
(Address
of Principal Offices)
(972) 388-1973
(Issuer’s
Telephone Number)
Approximate
date of proposed sale to the public: From time to time after this
Registration
Statement
becomes effective.
If any of
the securities being registered on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. ¨
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please
check the following box. ¨
CALCULATION
OF REGISTRATION FEE
Title of each
class of securities to be
registered
|
Amount to be
registered
|
Proposed maximum
offering price per
share(1)
|
Proposed maximum
aggregate offering
price
|
Amount of registration
fee
|
||||||||||||
Common
Stock, $0.0001
par value
|
255,250
|
$
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2.00
|
$
|
510,500
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$
|
59.27
|
|||||||||
Total
|
255,250
|
$
|
2.00
|
$
|
510,500
|
$
|
59.27
|
(1)
Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(e) under the Securities Act of 1933.
The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The
information in this Prospectus is not complete and may be
changed. The shareholders may not sell these securities until the
registration statement filed with the Securities Exchange Commission is
effective. This Prospectus is not an offer to sell these securities
and it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
Subject
to Completion, dated January , 2011
ACCELERATED
ACQUISITIONS V, INC.
255,250
Shares
of Common Stock
Par
Value $0.0001 Per Share
This
prospectus relates to the offering by the selling stockholders of ACCELERATED ACQUISITIONS V,
INC. of up to 255,250
shares of our common stock, par value $0.0001 per share. We will not
receive any proceeds from the sale of common stock.
The
selling stockholders have advised us that they will sell the shares of common
stock from time to time in the open market (if such market exists at the time),
at the initial offering price of $2.00 per share, which was the price they paid
for their shares, until the shares are quoted on the OTC Bulletin Board or
national securities exchange, at which point the selling securities holders may
sell the registered shares at market prices (if any) prevailing at the time
of sale, at prices related to the prevailing market prices (if any), at
negotiated prices, or otherwise as described under the section of this
prospectus titled “Plan of Distribution.”
Our
common stock does not currently trade in the public market.
You
should rely only on the information contained in this prospectus or any
prospectus supplement or amendment. We have not authorized anyone to provide you
with different information.
Investing
in these securities involves significant risks. See “Risk Factors”
commencing on page 9.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of the securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The
date of this Prospectus is January ,
2011.
The
information contained in this prospectus is not complete and may be
changed. This prospectus is included in the registration statement
that was filed by ACCELERATED ACQUISITIONS V, INC. with the Securities and
Exchange Commission. The selling stockholders may not sell these
securities until the registration statement becomes effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
2
TABLE
OF CONTENTS
PAGE
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PART
I. INFORMATION REQUIRED IN A PROSPECTUS
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ITEM
3. SUMMARY INFORMATION AND RISK FACTORS
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4
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ITEM
4. USE OF PROCEEDS
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21
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ITEM
5. DETERMINATION OF OFFERING PRICE
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21
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ITEM
6. DILUTION
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21
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ITEM
7, SELLING SHAREHOLDERS
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21
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ITEM
8. PLAN OF DISTRIBUTION
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24
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ITEM
9. DESCRIPTION OF SECURITIES TO BE REGISTERED
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24
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ITEM
10. INTERST OF NAMED COUNSEL AND EXPERT
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27
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ITEM
11. INFORMATION WITH RESPECT TO THE REGISTRANT
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27
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BACKGROUND
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LEGAL
PROCEEDINGS
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33
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DESCRIPTION
OF PROPERTY
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33
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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34
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CHANGES
AND DISAGREEMENTYS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
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40
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DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
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40
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EXECUTIVE
COMPENSATION
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42
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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42
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TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS AND DIRECTOR
INDEPENENCE
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43
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EXPERTS
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45
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WHERE
YOU CAN FIND ADDITIONAL INFORMATION
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45
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ITEM
12. INCORPORATION OF CERTAIN MATERIAL BY
REFERENCE
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45
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ITEM
12A. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
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46
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FINANCIAL
STATEMENTS
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46
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PART
II: INFORMATION NOT REQUIRED IN PROSPECTUS
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ITEM
13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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66
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ITEM
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
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66
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ITEM
15. RECENT SALES OF UNREGISTERED SECURITIES
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66
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ITEM
16. EXHIBITS
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68
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ITEM
17. UNDERTAKINGS
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68
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SIGNATURES
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71
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EXHIBIT
LIST
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72
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3
INFORMATION REQUIRED IN A
PROSPECTUS
ITEM 3. SUMMARY INFORMATION AND RISK
FACTORS
SUMMARY
The
following summary highlights selected information contained in this
prospectus. This summary does not contain all the information you
should consider before investing in the securities. Before making an
investment decision, you should read the entire prospectus carefully, including
the “Risk Factors” section, the financial statements, and the notes to the
financial statements.
For
purposes of this prospectus, unless otherwise indicated or the context otherwise
requires, all references herein to “AAV,” “the Company”, “we,” “us,” and “our,”
refer to ACCELERATED ACQUISITIONS V, INC., a Delaware corporation.
THE
COMPANY
Business
Overview
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. Our principal business objectives were to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings.
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 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. This transaction was
consummated on April 2, 2010.
At the
same time, Accelerated Venture Partners, LLC (“AVP”) agreed to tender 1,979,760
of its 5,000,000 shares of the Company’s common stock par value $0.0001 for
cancellation. Accelerated Venture Partners, LLC tendered the shares as a part of
a negotiated transaction where it agreed to transfer control of the Company to
Messrs Aland and Kelly. The agreed consideration for the transaction
was that AVP would retain 9.69% of the post-transaction shares issued and
outstanding. It was also agreed at the time that the Company would
enter into a Consulting Services Agreement with AVP (see below). The
entire 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. A copy of this letter is attached as
Exhibit 10.3.
Messrs.
Aland and Kelly subsequently made gifts of 136,000 and 110,000 shares,
respectively, to an aggregate of nine donees. All gifted shares were
donated prior to April 2, 2010. All gifts were to members of the
respective donor’s family as a part of the donor’s ongoing estate
planning. The relationships are the following: Robert and
Ronald Aland are brothers of Richard Aland; Lauren Morr and Erin Spalsbury are
daughters of Richard Aland. Chad Kelly and Jessica Kelly are children
of Don Kelly; Dominic and Wyatt Kelly are grandchildren of Don Kelly; Nina Kelly
is the mother of Jessica and Chad Kelly and is Don Kelly’s ex-wife). Following these
transactions (and the exercise of the AVP Option), Mr. Aland owned 69.12%% and
Mr. Kelly owned 11.95% of the Company’s 34,391,506 issued and outstanding shares
of common stock par value $0.0001. The interest of Accelerated
Venture Partners, LLC (including shares issued on the exercise of the AVP
Option) was reduced to approximately 18.19% 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 represented a change of control of the Company.
4
The
Company intends to file a Certificate of Amendment to its Certificate of
Incorporation with the Secretary of State of Delaware in order to change its
name to “DEMAND POOLING, INC” following the effective date of this registration
statement. A draft of the proposed Certificate of Amendment is
attached as Exhibit 3(iii).
On April
15, 2010, the Company entered into a Licensing Agreement (“Licensing Agreement”)
with Demand Pooling Global Services, LLC (“Licensor”) 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
only relationship between the Company and Licensor is that of a
licensee/licensor relationship. Licensor is the developer of the
software and the Company both markets and operates the platform. The
license is an exclusive North American license and a non-exclusive worldwide
license, permitting the licensor to offer the platform to other marketing firms
for operation of pools outside of North America. The two senior-most
managers of both firms are the same, Richard Aland and Don
Kelly.
The
Company establishes certain rules for each pool. These rules relate
primarily to the timing of the pool – when it is opened to buyer participation,
when buyer participation ends and supplier bidding commences and the time
deadline when the suppliers must submit bids. Typically, the latter
occurs at 1:59:59 PM Central time after which time, suppliers can no longer
submit bids. One second later (timed according to the U.S. Atomic
Clock), access reverts to the buyers for capturing their respective bids from
the supplier. No timing is imposed upon the buyers for evaluating
their bids and making a determination of whether to award a contract to one or
more suppliers or to reject the bids. Some may award immediately and
some may take several months to make a determination, but each buyer evaluates
its own bids and accepts or rejects them as they have in the
past.
The
Company provides no examples of IFB’s, purchase agreements or other
documentation since every state or local government must reserve the right to
employ its own documents which are uploaded onto the Company’s
platform. Suppliers must download and acknowledge receipt of those
documents before they are allowed to progress to pricing.
The
Company imposes no geographic constraints or limitations and the only bidding
process that is addressed by the platform is the traditional ‘competitive sealed bid’
process which state and local governments either require or with which they are
most familiar.
The
Company does not plan to offer opportunities for a reverse auction mechanism or
for Dutch auctions, or otherwise.
The
Company does not conduct an auction process but rather a very different and
distinct process referred to as a “competitive sealed bid”
process. Under the competitive sealed bid process, buyers seek
pricing from suppliers that are submitted in sealed envelopes, or in our case
electronically, and opened mechanically or electronically by each buyer at Bid
Opening. There is no chance, as would be the case for an auction, for
suppliers to submit one or more improved bids. The sealed pricing is
the best and final bid and no other pricing can be
considered.
5
The
Company does not trade commodities, a process, which as previously explained, is
very different from the Company’s process of providing a platform where state
and local governments can post their IFB’s seeking bid pricing for their
purchases. In fact, the Company, does not buy, sell, inventory or
trade any product.
SLG’s
do not hire us, contract with us or pay us a fee. They simply use our
platform to post their requirements through an IFB pursuant to the traditional
sealed bid process and we have not been able to identify any entity which is
unable to employ our platform.
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 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 terminated upon the occurrence of events of default specified in the
License Agreement.
The
Company played no role in the development of the Technology. The
business concept behind the Technology was developed primarily by Richard Aland,
the Company founder, although he played no role in the actual development of the
Technology. Since the Technology has never been
specifically applied commercially, the Company is unable to estimate the
commercial value of the Technology. Licensor was created for the
purpose of developing and implementing the software application necessary for
implementation of Mr. Aland’s vision of how state and local governments could
effectively generate large-scale savings on the purchase of capital assets and
certain commodities (motor fuel and water treatment
chemicals). Licensor has been in business since August, 2005
and during the time since its commencement of operations through 2009, it
developed the software application. Notwithstanding, Licensor found
that it lacked the capabilities to effectively and successfully market the
concept. Licensor therefore determined to focus solely on software
development with a strategy to sell or license the software and to provide
support for the software. To the best of the Company’s knowledge, Licensor has
never been, is not currently and has no plans in the future to engage in the
demand aggregation pools business. DPGS is strictly a software
development company which developed the electronic application or platform which
is licensed to the Company. Further, the Company believes that Licensor has no
intent to engage in a business similar to the Company in the United States
(which the Company believes would be in violation of the terms of the License).
The Company believes that Licensor has not generated any revenues to
date.
6
The
Company investigated a variety of software applications as possible alternatives
to the licensed software, but did not find any alternative software which it
viewed as being as sophisticated, scalable and flexible as the software
application licensed from Licensor.
The
Company’s application platform is fully functional in its current state and it
is currently conducting its first non-beta pooled purchase of products for state
and local governments. The subject product is motor fuel and the next
product pools will be for water treatment chemicals and police and other
vehicles. The Company is currently ascertaining the optimal timing
for the launch of pooled purchases for these products. The Company launched its
Fall Motor Fuel Pool in October 2010. All bids have been submitted
and buyers are in the process of evaluating the bids. The Winter
Motor Fuel Pool was launched during the last week in December 2010 with bids due
in early March 2011.
The
“business concept” which the Company is currently marketing to state and local
governments is a streamlined ”demand aggregation,” or “cooperative
purchasing” methodology for acquiring high-valued capital assets and selected
commodities (motor fuel and water treatment chemicals), that comprise a
significant component of most state and local government budgets as a means
for producing improved pricing (volume-discount pricing) versus the pricing that
would be achievable by individual entities in the volumes each would typically
buy. The “Technology” supporting the business concept is the actual
electronic platform that facilitates buyers seeking bid requests in a single
time window and in a single location, provided they have access to the Internet
and can login to the Company’s website. The Company’s initial target
market is considered highly fragmented, consisting of approximately 87,000 state
and local governments that do not have any natural way of leveraging their
collective buying power. These state and local governments have
common purchase needs, are non-competitive with one another and tend to employ
the same sealed bid process for obtaining competitive
bids.
In order
to market the benefits of demand aggregation (cooperative purchasing) to its
initial target market customers, and potentially to others, and to streamline
the cooperative buying process, the Company has licensed a web-based,
fully-functional electronic platform technology, developed in its entirety by
the Licensor, to automate various aspects of the business
concept. The Company does not intend to be in the software
development business or to commit the resources to creation, development or
maintenance of software, but prefers to focus its attention and resources upon
marketing its services to users that may benefit from those
services.
On April 29, 2010, the
Company entered into a Consulting Services Agreement with 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”) (which was immediately exercised
by the holder), subject to a repurchase option granted to the Company to
repurchase the shares at a price of $0.0001 per share in the event the
Company fails to complete funding as detailed in the agreement subject to the
following milestones:
|
·
|
Milestone
1 – Company’s right
of repurchase will lapse with respect to 70% of the shares upon securing
$5 million in available cash from
funding;
|
|
·
|
Milestone
2 - Company’s right
of repurchase will lapse with respect to 20% of the Shares upon securing
$10 million in available cash (inclusive of any amounts attributable to
Milestone 1);
|
|
·
|
Milestone
3 - Company’s right
of repurchase will lapse with respect to the remaining 10% of the Shares
upon securing $15 million in available cash (inclusive of any amounts
attributable to Milestones 1 or
2);
|
7
and (b)
cash compensation at a rate of $87,500 per month. The payment of such
compensation is subject to the company’s achievement of certain designated
milestones, specifically, cash compensation of $350,000 is due consultant upon
the achievement of Milestone 1, $350,000 upon the achievement of Milestone 2,
and $350,000 upon the achievement of Milestone 3. Upon achieving each Milestone,
the cash compensation is to be paid to consultant in the amount then due at the
rate of $87,500 per month. The total cash compensation to be received by the
consultant is not to exceed $1,050,000 unless the Company receives an amount of
funding in excess of the amount specified in Milestone 3. If the Company
receives equity or debt financing that is an amount less than Milestone 1, in
between any of the above Milestones or greater than the above Milestones, the
cash compensation earned by the Consultant under this Agreement will be prorated
according to the above Milestones.
The
Company also has the option to make a lump sum payment to AVP in lieu of all
amounts payable thereunder.
On May 3,
2010, the Company filed a Form 8-K Report with the United States Securities and
Exchange Commission which, among other things, included a change in the
Company’s Shell Company Status as of April 15, 2010—the date the company entered
into the License.
On July
2, 2010, the company completed a private offering of its common shares under the
provisions of the Delaware securities laws and under a Regulation D exemption
with respect to 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.
Outstanding
Shares. As of the date of this Prospectus, the Company has
34,391,506 shares of $0.0001 par value common stock issued and outstanding
to a total of 61 shareholders
Fiscal Year
End. The Company’s fiscal year end is December
31.
Website. The
Company operates a website at www.depo.org.
Personnel. At
the date of this prospectus, the Company employs four full-time and six
part-time contract employees.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements. This prospectus includes
statements regarding our plans, goals, strategies, intent, beliefs or current
expectations. These statements are expressed in good faith and based upon a
reasonable basis when made, but there can be no assurance that these
expectations will be achieved or accomplished. These forward looking statements
can be identified by the use of terms and phrases such as “believe,” “plan,”
“intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or
future-tense or conditional constructions “may,” “could,” “should,” etc. Items
contemplating or making assumptions about, actual or potential future sales,
market size, collaborations, and business opportunities also constitute such
forward-looking statements.
Although
forward-looking statements in this report reflect the good faith judgment of our
management, forward-looking statements are inherently subject to known and
unknown risks, business, economic and other risks and uncertainties that may
cause actual results to be materially different from those discussed in these
forward-looking statements. Readers are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. We assume no obligation to update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
report, other than as may be required by applicable law or regulation. Readers
are urged to carefully review and consider the various disclosures made by us in
our reports filed with the Securities and Exchange Commission which attempt to
advise interested parties of the risks and factors that may affect our business,
financial condition, results of operation and cash flows. If one or more of
these risks or uncertainties materialize, or if the underlying assumptions prove
incorrect, our actual results may vary materially from those expected or
projected.
8
CORPORATE
ADDRESS AND TELEPHONE NUMBER
The
Company maintains its designated office at 12720 Hillcrest Road, Suite 1045,
Dallas, Texas 75230. The Company’s telephone number is
972-388-1950. The Company’s fax number is 973-388-1973.
THE
OFFERING
This
Prospectus will be utilized in connection with the re-sale of 9,250 shares
issued in connection with the Company’s most recent stock offering and 296,000
shares held by other current Company shareholders. The Company will
not receive any proceeds from any sales of these shares.
Common
stock currently outstanding
|
34,391,506
shares(1)
|
|
Common
stock offered by the selling stockholders
|
255,250
shares
|
|
Use
of proceeds
|
We
will not receive any proceeds from the sale of common stock offered by
this prospectus.
|
(1) Shares
of common stock outstanding as of December 31, 2010.
9
FINANCIAL
INFORMATION
SELECTED
CONSOLIDATED FINANCIAL DATA
The
following selected consolidated statement of operations data contains
consolidated statement of operations data and consolidated balance sheet for the
fiscal years period ended December 31, 2009 and December 31, 2008. The
consolidated statement of operations data and balance sheet data were derived
from the audited consolidated financial statements. Such financial data should
be read in conjunction with the consolidated financial statements and the notes
to the consolidated financial statements and with “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.”
As of
December 31, 2009
|
As of
December 31, 2008
|
|||||||
Balance
Sheet Data:
|
||||||||
Assets
|
$
|
116
|
$
|
2,000
|
||||
Liabilities
|
$
|
6,164
|
$
|
1,256
|
||||
Accumulated
Deficit During Development Stage
|
$
|
(10,048
|
)
|
$
|
(3,256
|
)
|
||
Statement
of Operations Data
|
||||||||
Revenue
|
$
|
-
|
$
|
-
|
||||
Operating
Expenses
|
$
|
6,792
|
$
|
3,256
|
||||
Other
Expenses
|
$
|
-
|
$
|
-
|
||||
Net
Loss
|
$
|
(6,792
|
)
|
$
|
(3,256
|
)
|
||
Basis
and Diluted Loss Per Share
|
$
|
0.00
|
$
|
0.00
|
||||
Weighted
Average Number of Shares Outstanding
|
5,000,000
|
5,000,000
|
The
following selected data contains statement of operations data and balance sheet
for the three months ended September 30, 2010 and September 30, 2009. The
statement of operations data and balance sheet data were derived from the
financial statements for the periods. Such financial data should be read in
conjunction with the unaudited financial statements and the notes to the
financial statements for said periods and with “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.”
As of
September 30,
2010
|
As of
September 30,
2009
|
|||||||
Balance
Sheet Data:
|
||||||||
Assets
|
$
|
18,616
|
$
|
2,000
|
||||
Liabilities
|
$
|
28,339
|
$
|
6,345
|
||||
Accumulated
Deficit During Development Stage
|
$
|
(32,223
|
)
|
$
|
(8,345
|
)
|
||
Statement
of Operations Data (nine months)
|
||||||||
Revenue
|
—
|
—
|
||||||
Operating
Expenses
|
$
|
22,175
|
$
|
5,089
|
||||
Net
Loss
|
$
|
(22,175
|
)
|
$
|
(5,089
|
)
|
||
Basis
and Diluted Loss Per Share
|
$
|
$0.00
|
$
|
0.00
|
||||
Weighted
Average Number of Shares Outstanding
|
24,366,987
|
5,000,000
|
Blank
Check Issue
We are
not a blank check corporation. Section 7(b)(3) of the Securities Act of 1933, as
amended, defines the term “blank check company” to mean any development stage
company issuing a penny stock that “(A) has no specific plan or purpose, or (B)
has indicated that its business plan is to merge with an unidentified company or
companies.” In Securities Act Release No. 33-6932, released April 13, 1992,
which adopted rules relating to blank check offerings, the Securities and
Exchange Commission stated in section II titled “Discussion of the Rules”
subsection “A. Scope of Rule 419”, the following: “. . . start-up companies with
specific business plans are not subject to Rule 419, even if operations have not
commenced at the time of the offering.” We have a specific plan and purpose and
we have no plans to be acquired by or to merge with any unidentified company or
companies. Our business purpose and our specific plan are delineated herein in
detail.
10
RISK
FACTORS
Before
you invest in our securities, you should be aware that there are various risks.
You should consider carefully these risk factors, together with all of the other
information included in this annual report before you decide to purchase our
securities. If any of the following risks and uncertainties develop into actual
events, our business, financial condition or results of operations could be
materially adversely affected.
Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern, which may hinder our ability to continue as a going
concern and our ability to obtain future financing.
In their
report dated December 31, 2009, our independent auditors stated that our
financial statements for the period ended December 31, 2009 were prepared
assuming that we would continue as a going concern. Our ability to continue as a
going concern is an issue raised as a result of recurring losses from operations
and cash flow deficiencies since our inception. We continue to experience net
losses. Our ability to continue as a going concern is subject to our ability to
generate a profit and/or obtain necessary funding from outside sources,
including obtaining additional funding from the sale of our securities,
increasing sales or obtaining loans and grants from various financial
institutions where possible. If we are unable to continue as a going concern,
you may lose your entire investment.
We
were formed in April, 2008 and have a limited operating history and,
accordingly, you will not have any basis on which to evaluate our ability to
achieve our business objectives.
We are a
development stage company with limited operating results to date. Since we do
not have an established operating history or regular sales yet, you will have no
basis upon which to evaluate our ability to achieve our business
objectives.
The
absence of any significant operating history for us makes forecasting our
revenue and expenses difficult, and we may be unable to adjust our spending in a
timely manner to compensate for unexpected revenue shortfalls or unexpected
expenses.
As a
result of the absence of any operating history for us, it is difficult to
accurately forecast our future revenue. In addition, we have limited meaningful
historical financial data upon which to base planned operating expenses. Current
and future expense levels are based on our operating plans and estimates of
future revenue. Revenue and operating results are difficult to forecast because
they generally depend on our ability to promote and sell our services. As a
result, we may be unable to adjust our spending in a timely manner to compensate
for any unexpected revenue shortfall, which would result in further substantial
losses. We may also be unable to expand our operations in a timely manner to
adequately meet demand to the extent it exceeds expectations.
Our
limited operating history does not afford investors a sufficient history on
which to base an investment decision.
We are
currently in the early stages of developing our business. There can be no
assurance that at this time that we will operate profitably or that we will have
adequate working capital to meet our obligations as they become
due.
Investors
must consider the risks and difficulties frequently encountered by early stage
companies, particularly in rapidly evolving markets. Such risks include the
following:
|
·
|
Competition
|
11
|
·
|
ability to anticipate and adapt
to a competitive market;
|
|
·
|
ability to effectively manage
expanding operations; amount and timing of operating costs and capital
expenditures relating to expansion of our business, operations, and
infrastructure; and
|
|
·
|
dependence upon key personnel to
market and sell our services and the loss of one of our key managers may
adversely affect the marketing of our
services.
|
We cannot
be certain that our business strategy will be successful or that we will
successfully address these risks. In the event that we do not successfully
address these risks, our business, prospects, financial condition, and results
of operations could be materially and adversely affected and we may not have the
resources to continue or expand our business operations.
We
are a development stage company and are substantially dependent on a third
party
The
Company is a development stage Company and is currently substantially dependent
upon technology licensed from Demand Pooling Global Services,
LLC. Moreover, since aggregation of demand for capital equipment and
selected commodities (motor fuel and water treatment chemicals) has not, to the
Company’s knowledge, been effectively addressed by others on a nationwide basis,
Management believes, but cannot assure, that it has an opportunity and both the
capability and experience to be successful in its endeavor to generate savings
for purchasers of capital equipment and commodities in its target
markets.
We
have no profitable operating history and May Never Achieve
Profitability
From
inception (April 29, 2008) through September 30, 2010, the Company has an
accumulated deficiency during the development stage of $14,623 notwithstanding
the fact that the principals of the Company have worked without salary and the
Company has operated with minimal overhead. We are an early stage company and
have a limited history of operations and have not generated revenues from
operations since our inception. We are faced with all of the risks associated
with a company in the early stages of development. Our business is subject to
numerous risks associated with a relatively new, low-capitalized company engaged
in our business sector. Such risks include, but are not limited to, competition
from well-established and well-capitalized companies, and unanticipated
difficulties regarding the marketing and sale of our services. There can be no
assurance that we will ever generate significant commercial sales or achieve
profitability. Should this be the case, our common stock could become worthless
and investors in our common stock or other securities could lose their entire
investment.
We
have a need to raise additional capital
The
Company will require significant additional financing in order to meet the
milestones and requirements of its Business Plan and avoid discontinuation of
the License. Funding would be required for staffing, marketing,
public relations and the necessary research precedent to expanding
the scope of its offering to include commercial enterprises. The
Company intends to seek an aggregate of $15,000,000 in 2010 and 2011; however
there is no guarantee that the Company will be able to raise this or any amount
of additional capital and a failure to do so would have a significant adverse
effect on the Company’s ability, or would cause significant delays in its
ability to address the market for purchases of capital assets and selected
commodities by commercial enterprises and achieve its Business Plan.
Notwithstanding, the License is not subject to immediate discontinuation if the
initial milestone (net revenues in excess of expenses in the normal course of
operations or receive funding of at least $1 million by one year from April 15,
2010) is not achieved. The three milestones detailed in the License
are cumulative and provide that the conditions are satisfied if any one of the
three milestones is achieved. In other words, if Milestone #1 (raising $1
million or generating revenues in the amount of $1 million) is not met, the
requirement can be met by achieving Milestone #2 by the second anniversary of
the License Agreement (raising $5 million or generating $5 million in revenues)
and if neither is met, then the requirements can be satisfied by achieving
Milestone #3 by the end of the third year (raising $10 million or generating $10
million in revenues). Neither the Company nor any of its advisors or
consultants has significant experience in raising funds similar to the
$15,000,000 estimated to be required.
12
The
Company’s Management and its advisors lack meaningful experience in the
marketing of the Licensed Software
In view
of the fact that the marketing of the Company’s licensed software is a new
business and there are no known comparable models in the market, the Company
lacks the specific experience to implement its business plan. While
the Company will seek to obtain resources which will support its marketing
activities, there is no assurance that this lack of experience will not
negatively affect the Company’s implementation of its business plan and
prospects for growth and ultimate success.
Dependence
on our Management, without whose services Company business operations could
cease.
At this
time, our management is wholly responsible for the development and execution of
our business plan. Our management is under no contractual obligation to remain
employed by us, although they have no present intent to leave. If our management
should choose to leave us for any reason before we have hired additional
personnel our operations may fail. Even if we are able to find additional
personnel, it is uncertain whether we could find qualified management who could
develop our business along the lines described herein or would be willing to
work for compensation the Company could afford. Without such management, the
Company could be forced to cease operations and investors in our common stock or
other securities could lose their entire investment.
Our
officers and directors devote limited time to the Company’s business and are
engaged in other business activities
At this
time, none of our officers and directors devotes their full-time attention to
the Company’s business. Based upon the growth of the business, we would intend
to employ additional management and staff. The limited time devoted to the
Company’s business could adversely affect the Company’s business operations and
prospects for the future. Without full-time devoted management, the Company
could be forced to cease operations and investors in our common stock or other
securities could lose their entire investment.
Concentrated
control risks; shareholders could be unable to control or influence key
corporate actions or effect changes in the Company’s board of directors or
management.
Our
current officers and directors currently own 27,880,045 shares of our common
stock, representing approximately 81.07% of the voting control of the Company.
Our current officers and directors therefore have the power to make all major
decisions regarding our affairs, including decisions regarding whether or not to
issue stock and for what consideration, whether or not to sell all or
substantially all of our assets and for what consideration and whether or not to
authorize more stock for issuance or otherwise amend our charter or
bylaws.
Lack
of additional working capital may cause curtailment of any expansion plans while
raising of capital through sale of equity securities would dilute existing
shareholders’ percentage of ownership
Our
available capital resources will not be adequate to fund our working capital
requirements based upon our present level of operations for the 12-month period
subsequent to December 31, 2010. A shortage of capital would affect our ability
to fund our working capital requirements. If we require additional capital,
funds may not be available on acceptable terms, if at all. In addition, if we
raise additional capital through the sale of equity or convertible debt
securities, the issuance of these securities could dilute existing shareholders.
If funds are not available, we could be placed in the position of having to
cease all operations.
We
do not presently have a traditional credit facility with a financial
institution. This absence may adversely affect our operations
We do not
presently have a traditional credit facility with a financial institution. The
absence of a traditional credit facility with a financial institution could
adversely impact our operations. If adequate funds are not otherwise available,
we may be required to delay, scale back or eliminate portions of our operations
and product development efforts. Without such credit facilities, the Company
could be forced to cease operations and investors in our common stock or other
securities could lose their entire investment.
13
Our
inability to successfully achieve a critical mass of sales could adversely
affect our financial condition
No
assurance can be given that we will be able to successfully achieve a critical
mass of sales in order to cover our operating expenses and achieve sustainable
profitability. Without such critical mass of sales, the Company could be forced
to cease operations.
Our
success is substantially dependent on general economic conditions and business
trends, particularly in the natural products, a downturn of which could
adversely affect our operations
The
success of our operations depends to a significant extent upon a number of
factors relating to business spending. These factors include economic
conditions, activity in the financial markets, general business conditions,
personnel cost, inflation, interest rates and taxation. Our business is affected
by the general condition and economic stability of our customers and their
continued willingness to work with us in the future. An overall decline in the
demand for document formatting services could cause a reduction in our sales and
the Company could face a situation where it never achieves a critical mass of
sales and thereby be forced to cease operations.
Changes
in generally accepted accounting principles could have an adverse effect on our
business financial condition, cash flows, revenue and results of
operations
We are
subject to changes in and interpretations of financial accounting matters that
govern the measurement of our performance. Based on our reading and
interpretations of relevant guidance, principles or concepts issued by, among
other authorities, the American Institute of Certified Public Accountants, the
Financial Accounting Standards Board, and the United States Securities and
Exchange Commission, our management believes that our current contract terms and
business arrangements have been properly reported. However, there continue to be
issued interpretations and guidance for applying the relevant standards to a
wide range of contract terms and business arrangements that are prevalent in the
industries in which we operate. Future interpretations or changes by the
regulators of existing accounting standards or changes in our business practices
could result in future changes in our revenue recognition and/or other
accounting policies and practices that could have a material adverse effect on
our business, financial condition, cash flows, revenue and results of
operations.
We
will need to increase the size of our organization, and may experience
difficulties in managing growth.
We are a
small company with three full-time employees. We expect to experience a period
of significant expansion in headcount, facilities, infrastructure and overhead
and anticipate that further expansion will be required to address potential
growth and market opportunities. Future growth will impose significant added
responsibilities on members of management, including the need to identify,
recruit, maintain and integrate managers. Our future financial performance and
its ability to compete effectively will depend, in part, on its ability to
manage any future growth effectively.
We
are subject to compliance with securities law, which exposes us to potential
liabilities, including potential rescission rights.
We have
offered and sold our common stock to investors pursuant to certain exemptions
from the registration requirements of the Securities Act of 1933, as well as
those of various state securities laws. The basis for relying on such exemptions
is factual; that is, the applicability of such exemptions depends upon our
conduct and that of those persons contacting prospective investors and making
the offering. We have not received a legal opinion to the effect that any of our
prior offerings were exempt from registration under any federal or state law.
Instead, we have relied upon the operative facts as the basis for such
exemptions, including information provided by investors
themselves.
14
If any
prior offering did not qualify for such exemption, an investor would have the
right to rescind its purchase of the securities if it so desired. It is possible
that if an investor should seek rescission, such investor would succeed. A
similar situation prevails under state law in those states where the securities
may be offered without registration in reliance on the partial preemption from
the registration or qualification provisions of such state statutes under the
National Securities Markets Improvement Act of 1996. If investors were
successful in seeking rescission, we would face severe financial demands that
could adversely affect our business and operations. Additionally, if we did not
in fact qualify for the exemptions upon which it has relied, we may become
subject to significant fines and penalties imposed by the SEC and state
securities agencies.
We
incur costs associated with SEC reporting compliance.
The
Company made the decision to become an SEC “reporting company” in order to
comply with applicable laws and regulations. We incur certain costs of
compliance with applicable SEC reporting rules and regulations including, but
not limited to attorneys fees, accounting and auditing fees, other professional
fees, financial printing costs and Sarbanes-Oxley compliance costs in an amount
estimated at approximately $25,000 per year. On balance, the Company determined
that the incurrence of such costs and expenses was preferable to the Company
being in a position where it had very limited access to additional capital
funding.
The
availability of a large number of authorized but unissued shares of common stock
may, upon their issuance, lead to dilution of existing
stockholders.
We are
authorized to issue 100,000,000 shares of common stock, $0.0001 par value per
share, of which, as of August 30, 2010, 34,391,506 shares of common stock
were issued and outstanding. We are also authorized to issue 10,000,000 shares
of preferred stock, $0.0001 par value, none of which are issued and outstanding.
These shares may be issued by our board of directors without further
stockholder approval. The issuance of large numbers of shares, possibly at below
prior investment valuations, is likely to result in substantial dilution to the
interests of other stockholders. In addition, issuances of large numbers of
shares may adversely affect the value of our common stock.
We
may need additional capital that could dilute the ownership interest of
investors.
We
require substantial working capital to fund our business. If we raise additional
funds through the issuance of equity, equity-related or convertible debt
securities, these securities may have rights, preferences or privileges senior
to those of the rights of holders of our common stock and they may experience
additional dilution. We cannot predict whether additional financing will be
available to us on favorable terms when required, or at all. Since our
inception, we have experienced negative cash flow from operations and expect to
experience significant negative cash flow from operations in the future. The
issuance of additional common stock by the Company may have the effect of
further diluting the proportionate equity interest and voting power of holders
of our common stock.
We
may not have adequate internal accounting controls. While we have certain
internal procedures in our budgeting, forecasting and in the management and
allocation of funds, our internal controls may not be adequate.
We are
constantly striving to improve our internal accounting controls. While we
believe that our internal controls are adequate for our current level of
operations, we believe that we may need to employ accounting additional staff as
our operations ramp up. We do not have a dedicated full time Chief Financial
Officer, which we intend to employ within the next twelve months. Additionally,
our board of directors has not designated an Audit Committee and we do not
presently have any outside directors. We intend to attract outside
directors once the Company commences full operations, and to designate an Audit
Committee from such outside directors. There is no guarantee that such projected
actions will be adequate or successful or that such improvements will be carried
out on a timely basis. If, in the future, we do not have adequate internal
accounting controls, we may not be able to appropriately budget, forecast and
manage our funds, we may also be unable to prepare accurate accounts on a timely
basis to meet our continuing financial reporting obligations and we may not be
able to satisfy our obligations under US securities laws.
15
We
do not intend to pay cash dividends in the foreseeable future
We
currently intend to retain all future earnings for use in the operation and
expansion of our business. We do not intend to pay any cash dividends in the
foreseeable future but will review this policy as circumstances
dictate.
There
is currently no market for our securities and there can be no assurance that any
market will ever develop or that our common stock will be listed for
trading.
There has
not been any established trading market for our common stock and there is
currently no market for our securities. Even if we are ultimately approved for
trading on the OTC Bulletin Board (“OTCBB”), there can be no assurance as the
prices at which our common stock will trade if a trading market develops, of
which there can be no assurance. Until our common stock is fully
distributed and an orderly market develops, (if ever) in our common stock, the
price at which it may ultimately trade is likely to fluctuate significantly and
may not reflect the actual value of the stock.
Our common stock
is subject to the Penny Stock Regulations
Once it
commences trading (if ever) our common stock will likely be subject to the SEC's
“penny stock” rules to the extent that the price remains less than $5.00. Those
rules, which require delivery of a schedule explaining the penny stock market
and the associated risks before any sale, may further limit your ability to sell
your shares.
The SEC
has adopted regulations which generally define “penny stock” to be an equity
security that has a market price of less than $5.00 per share. Our common stock
currently has no “market price” and when and if a trading market develops, may
fall within the definition of penny stock and subject to rules that impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000, or annual incomes
exceeding $200,000 or $300,000, together with their spouse).
For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser's prior written consent to the transaction. Additionally, for any
transaction, other than exempt transactions, involving a penny stock, the rules
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the Commission relating to the penny stock market. The broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
Consequently, the `penny stock` rules may restrict the ability of broker-dealers
to sell our common stock and may affect the ability of investors to sell their
common stock in the secondary market.
Our
common stock is illiquid and may in the future be subject to price volatility
unrelated to our operations
Our
common stock has no market price and, if and when a market price is established,
could fluctuate substantially due to a variety of factors, including market
perception of our ability to achieve our planned growth, quarterly operating
results of other companies in the same industry, trading volume in our common
stock, changes in general conditions in the economy and the financial markets or
other developments affecting our competitors or us. In addition, the stock
market is subject to extreme price and volume fluctuations. This volatility has
had a significant effect on the market price of securities issued by many
companies for reasons unrelated to their operating performance and could have
the same effect on our common stock. Sales of substantial amounts of common
stock, or the perception that such sales could occur, could adversely affect the
market price of our common stock (if and when a market price is established) and
could impair our ability to raise capital through the sale of our equity
securities.
16
We
have not voluntarily implemented various corporate governance measures, in the
absence of which, shareholders may have more limited protections against
interested director transactions, conflicts of interest and similar
matters.
Recent
Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in
the adoption of various corporate governance measures designed to promote the
integrity of the corporate management and the securities markets. Some of these
measures have been adopted in response to legal requirements. Others have been
adopted by companies in response to the requirements of national securities
exchanges, such as the NYSE or the Nasdaq Stock Market, on which their
securities are listed. Among the corporate governance measures that are required
under the rules of national securities exchanges are those that address board of
directors' independence, audit committee oversight, and the adoption of a code
of ethics. We have not yet adopted any of these corporate governance
measures and, since our securities are not yet listed on a national securities
exchange, we are not required to do so. It is possible that if we
were to adopt some or all of these corporate governance measures, stockholders
would benefit from somewhat greater assurances that internal corporate decisions
were being made by disinterested directors and that policies had been
implemented to define responsible conduct. Prospective investors
should bear in mind our current lack of corporate governance measures in
formulating their investment decisions.
RISKS
RELATED TO OUR BUSINESS AND INDUSTRY
The
market for demand aggregation solutions is at an early stage of
development. If this market does not develop or develops more slowly than we
expect, our revenues may decline or fail to grow and we may incur operating
losses.
We
derive, and expect to continue to derive, substantially all of our revenues from
providing demand aggregation solutions to suppliers
and buyers. The market for demand aggregation solutions is in an early
stage of development, and it is uncertain whether these solutions will achieve
and sustain high levels of demand and market acceptance. Our success will depend
on the willingness of suppliers to accept our demand aggregation solutions as an
alternative to traditional methods of purchasing.
Some
suppliers and buyers may be reluctant or unwilling to use our demand
aggregation solutions for a number of
reasons, including existing investments in supply chain management technology.
Supply chain management functions traditionally have been performed using
purchased or licensed hardware and software implemented by each supplier.
Because this traditional approach often requires significant initial investments
to purchase the necessary technology and to establish systems that comply with
retailers’ unique requirements, suppliers may be unwilling to abandon their
current solutions for our demand aggregation solutions.
Other
factors that may limit market acceptance of our demand aggregation solutions include:
•
|
our ability to maintain high
levels of customer
satisfaction;
|
•
|
our ability to maintain
continuity of service for all users of our
platform;
|
•
|
The price, performance and
availability of competing
solutions; and
|
•
|
our ability to assuage suppliers’
confidentiality concerns about information stored outside of their
controlled computing
environments.
|
If
suppliers and buyers do not perceive the benefits of our demand aggregation solutions, or if
suppliers or buyers are unwilling to accept our platform as an alternative to
the traditional approach, the market for our solutions might not continue to
develop or might develop more slowly than we expect, either of which would
significantly adversely affect our revenues and growth
prospects.
17
Our
inability to adapt to rapid technological change could impair our ability to
remain competitive.
The
industry in which we compete is characterized by rapid technological change,
frequent introductions of new products and evolving industry standards. Our
ability to attract new customers and increase revenues from customers will
depend in significant part on our ability to anticipate industry standards and
to continue to enhance existing solutions or introduce or acquire new solutions
on a timely basis to keep pace with technological developments. The success of
any enhancement or new solution depends on several factors, including the timely
completion, introduction and market acceptance of the enhancement or solution.
Any new solution we develop or acquire might not be introduced in a timely or
cost-effective manner and might not achieve the broad market acceptance
necessary to generate significant revenues. Any delay or failure in the
introduction of new or enhanced solutions could adversely affect our business,
results of operations and financial condition.
We
may experience service failures or interruptions due to defects in the hardware,
software, infrastructure, third party components or processes that comprise our
existing or new solutions, any of which could adversely affect our
business.
Technology
solutions as complex as ours may contain undetected defects in the hardware,
software, infrastructure, third party components or processes that are part of
the solutions we provide. If these defects lead to service failures after
introduction of a solution or an upgrade to the solution, we could experience
delays or lost revenues during the period required to correct the cause
of the defects. We cannot be certain that defects will not be found in new
solutions or upgraded solutions, resulting in loss of, or delay in, market
acceptance, which could have an adverse effect on our business, results of
operations and financial condition. Because customers use our demand
aggregation solutions for critical
business processes, any defect in our solutions, any disruption to our solutions
or any error in execution could cause recurring revenue customers to cancel
their contracts with us, prevent potential customers from joining our network
and harm our reputation. Although most of our contracts with our customers limit
our liability to our customers for these defects, disruptions or errors, we
nonetheless could be subject to litigation for actual or alleged losses to our
customers’ businesses, which may require us to spend significant time and money
in litigation or arbitration or to pay significant settlements or damages. We do
not currently maintain any warranty reserves. Defending a lawsuit, regardless of
its merit, could be costly and divert management’s attention and could cause our
business to suffer.
Interruptions or
delays from third-party data centers could impair the delivery of our solutions
and our business could suffer.
We use
third-party data centers to conduct our operations. All of our solutions reside
on hardware that we own or lease and operate that may be located in third-party
locations. Our operations depend on the protection of the equipment and
information we store in these third-party centers against damage or service
interruptions that may be caused by fire, flood, severe storm, power loss,
telecommunications failures, unauthorized intrusion, computer viruses and
disabling devices, natural disasters, war, criminal act, military action,
terrorist attack and other similar events beyond our control. A prolonged
service disruption affecting our solutions for any of the foregoing reasons
could damage our reputation with current and potential customers, expose us to
liability, cause us to lose recurring revenue customers or otherwise adversely
affect our business. We may also incur significant costs for using alternative
equipment or taking other actions in preparation for, or in reaction to, events
that damage the data centers we use.
Our
demand aggregation solutions are accessed
by a large number of customers at the same time. As we continue to expand the
number of our customers and solutions available to our customers, we may not be
able to scale our technology to accommodate the increased capacity requirements,
which may result in interruptions or delays in service. In addition, the failure
of our third-party data centers to meet our capacity requirements could result
in interruptions or delays in our solutions or impede our ability to scale our
operations. In the event that our data center arrangements are terminated, or
there is a lapse of service or damage to such facilities, we could experience
interruptions in our solutions as well as delays and additional expense in
arranging new facilities and services.
18
A
failure to protect the integrity and security of our customers’ information
could expose us to litigation, materially damage our reputation and harm our
business, and the costs of preventing such a failure could adversely affect our
results of operations.
Our
business will involve the collection and use of confidential information of our
customers and their trading partners. We cannot assure you that our efforts to
protect this confidential information will be successful. If any compromise of
this information security were to occur, we could be subject to legal claims and
government action, experience an adverse effect on our reputation and need to
incur significant additional costs to protect against similar information
security breaches in the future, each of which could adversely affect our
financial condition, results of operations and growth prospects. In addition,
because of the critical nature of data security, any perceived breach of our
security measures could cause existing or potential customers not to use our
solutions and could harm our reputation. At this time, we do not have
any customers for our principal business activities.
Evolving
regulation of the Internet may increase our expenditures related to compliance
efforts, which may adversely affect our financial condition.
As
Internet commerce continues to evolve, increasing regulation by federal, state
or foreign agencies becomes more likely. We are particularly sensitive to these
risks because the Internet is a critical component of our demand
aggregation business model. For
example, we believe that increased regulation is likely in the area of data
privacy, and laws and regulations applying to the solicitation, collection,
processing or use of personal or consumer information could affect our
customers’ ability to use and share data, potentially reducing demand for
solutions accessed via the Internet and restricting our ability to store,
process and share data with our clients via the Internet. In addition, taxation
of services provided over the Internet or other charges imposed by government
agencies or by private organizations for accessing the Internet may be imposed.
Any regulation imposing greater fees for Internet use or restricting information
exchange over the Internet could result in a decline in the use of the Internet
and the viability of Internet-based services, which could harm our
business.
If we fail to
protect our intellectual property and proprietary rights adequately, our
business could be adversely affected.
We
believe that proprietary technology is essential to establishing and maintaining
our leadership position. We seek to protect our intellectual property through
trade secrets, copyrights, confidentiality, non-compete and nondisclosure
agreements, trademarks, domain names and other measures, some of which afford
only limited protection. We do not have any patents, patent applications or
registered copyrights. Despite our efforts to protect our proprietary rights,
unauthorized parties may attempt to copy aspects of our technology or to obtain
and use information that we regard as proprietary. We cannot assure you that our
means of protecting our proprietary rights will be adequate or that our
competitors will not independently develop similar or superior technology or
design around our intellectual property. In addition, the laws of some foreign
countries do not protect our proprietary rights to as great an extent as the
laws of the United States. Intellectual property protections may also be
unavailable, limited or difficult to enforce in some countries, which could make
it easier for competitors to capture market share. Our failure to protect
adequately our intellectual property and proprietary rights could
adversely affect our business, financial condition and results of
operations.
An assertion by a
third party that we are infringing its intellectual property could subject us to
costly and time-consuming litigation or expensive licenses and our business
might be harmed.
The
Internet demand aggregation,
supply chain management and technology industries are characterized by
the existence of a large number of patents, copyrights, trademarks and trade
secrets and by frequent litigation based on allegations of infringement or other
violations of intellectual property rights. As we seek to extend our solutions,
we could be constrained by the intellectual property rights of
others.
19
We might
not prevail in any intellectual property infringement litigation given the
complex technical issues and inherent uncertainties in such litigation.
Defending such claims, regardless of their merit, could be time-consuming and
distracting to management, result in costly litigation or settlement, cause
development delays, or require us to enter into royalty or licensing
agreements. If our solutions violate any third-party proprietary rights, we
could be required to withdraw those solutions from the market, re-develop those
solutions or seek to obtain licenses from third parties, which might not be
available on reasonable terms or at all. Any efforts to re-develop our
solutions, obtain licenses from third parties on favorable terms or license a
substitute technology might not be successful and, in any case, might
substantially increase our costs and harm our business, financial condition and
operating results. Withdrawal of any of our solutions from the market might harm
our business, financial condition and operating results.
20
ITEM
4. USE OF PROCEEDS
This
prospectus relates to the resale of our common stock that may be offered and
sold from time to time by the selling stockholders. We will not
receive any proceeds from the sale of shares of common stock in this
offering.
ITEM
5. DETERMINATION OF OFFERING PRICE
Since our
shares are not listed or quoted on any exchange or quotation system, the
offering price of the shares of common stock was arbitrarily determined. The
offering price was determined by the price shares were sold to our shareholders
in our last private placement which was completed on July 2, 2010 pursuant to an
exemption under Rule 506 of Regulation D.
The
offering price of the shares of our common stock has been determined arbitrarily
by us and does not necessarily bear any relationship to our book value, assets,
past operating results, financial condition or any other established criteria of
value. The facts considered in determining the offering price were our financial
condition and prospects, our limited operating history and the general condition
of the securities market. Although our common stock is not listed on a public
exchange, we will be filing to obtain a listing on the Over The Counter Bulletin
Board (OTCBB) concurrently with or shortly after the filing of this prospectus.
In order to be quoted on the Bulletin Board, a market maker must file an
application on our behalf in order to make a market for our common stock. There
can be no assurance that a market maker will agree to file the necessary
documents with the National Association of Securities Dealers, which operates
the OTC Electronic Bulletin Board, nor can there be any assurance that such an
application for quotation will be approved.
In
addition, there is no assurance that our common stock, if and when it does
trade, will trade at prices in excess of the initial public offering price as
prices for the common stock in any public market which may develop will be
determined in the marketplace and may be influenced by many factors, including
the depth and liquidity.
ITEM
6. DILUTION
The
common stock to be sold by the selling shareholders is common stock that is
currently issued or will be issued to our shareholders upon conversion or
exercise of certain Convertible Securities. Accordingly, there will be no
dilution to our existing shareholders.
ITEM
7. SELLING SHAREHOLDERS
The
following table sets forth the shares beneficially owned, as of the date of this
prospectus, by the selling stockholders prior to the offering contemplated by
this prospectus, the number of shares each selling stockholder is offering by
this prospectus and the number of shares which each selling stockholder would
own beneficially if all such offered shares are sold. None of the
selling stockholders is known to us to be a registered broker-dealer or an
affiliate of a registered broker-dealer. Each of the selling
stockholders has acquired his, her or its shares solely for investment and not
with a view to or for resale or distribution of such
securities. Beneficial ownership is determined in accordance with SEC
rules and includes voting or investment power with respect to the
securities.
21
Name(1)
|
Shares of common
stock owned prior to
the offering
|
Shares of common
stock to be sold(2)
|
Shares of common
stock owned after the
offering
|
Percentage of common
stock owned after this
offering
|
||||||||||||
Aland,
Robert
|
10,000
|
10,000
|
0
|
*
|
||||||||||||
Aland,
Ronald
|
10,000
|
10,000
|
0
|
*
|
||||||||||||
Baker,
Angus
|
100
|
100
|
0
|
*
|
||||||||||||
Camp,
James
|
300
|
300
|
0
|
*
|
||||||||||||
Carreker,
III, John
|
100
|
100
|
0
|
*
|
||||||||||||
Carrington,
Richard
|
100
|
100
|
0
|
*
|
||||||||||||
Cosgriff,
Carolyn
|
300
|
300
|
0
|
*
|
||||||||||||
Daniel,
Glenn
|
300
|
300
|
0
|
*
|
||||||||||||
Dorsey,
Timothy
|
300
|
300
|
0
|
*
|
||||||||||||
Evans,
Carole
|
300
|
300
|
0
|
*
|
||||||||||||
Fischer,
Quinn
|
300
|
300
|
0
|
*
|
||||||||||||
Fleisher,
Ethel
|
10,000
|
10,000
|
0
|
*
|
||||||||||||
Fragle,
Ronald
|
300
|
300
|
0
|
*
|
||||||||||||
Giambalvo,
Jerome
|
300
|
300
|
0
|
*
|
||||||||||||
Green,
Montgomery
|
300
|
300
|
0
|
*
|
||||||||||||
Gundy,
Richard
|
100
|
100
|
0
|
*
|
||||||||||||
Harberg,
Joseph
|
100
|
100
|
0
|
*
|
||||||||||||
Harkness,
Glenda
|
100
|
100
|
0
|
*
|
||||||||||||
Hartline,
Gregg
|
300
|
300
|
0
|
*
|
||||||||||||
Hogue,
IV, Henley Custis
|
300
|
300
|
0
|
*
|
||||||||||||
Holoman,
Richard
|
300
|
300
|
0
|
*
|
||||||||||||
Johnson,
David
|
2,500
|
2,500
|
0
|
*
|
||||||||||||
Johnson,
Lyn
|
2,500
|
2,500
|
0
|
*
|
||||||||||||
Kelly,
Chad
|
45,000
|
45,000
|
0
|
*
|
||||||||||||
Kelly,
Dominic
|
5,000
|
5,000
|
0
|
*
|
||||||||||||
Kelly,
Jessica
|
45,000
|
45,000
|
0
|
*
|
||||||||||||
Kelly,
Nina
|
10,000
|
10,000
|
0
|
*
|
||||||||||||
Kelly,
Wyatt
|
5,000
|
5,000
|
0
|
*
|
||||||||||||
Kennedy,
Jr., William
|
100
|
100
|
0
|
*
|
||||||||||||
Leon,
Larry
|
100
|
100
|
0
|
*
|
||||||||||||
Mailman,
Josh
|
100
|
100
|
0
|
*
|
||||||||||||
McElhiney,
Steven
|
100
|
100
|
0
|
*
|
||||||||||||
Meyers,
Dawn
|
300
|
300
|
0
|
*
|
22
Meyers,
III, Gerald
|
300
|
300
|
0
|
*
|
||||||||||||
Miesch,
Michael
|
100
|
100
|
0
|
*
|
||||||||||||
Morr,
Lauren
|
50,000
|
50,000
|
0
|
*
|
||||||||||||
Morrogh,
Richard
|
100
|
100
|
0
|
*
|
||||||||||||
Pope,
Patrick
|
300
|
300
|
0
|
*
|
||||||||||||
Roberts,
Richard
|
100
|
100
|
0
|
*
|
||||||||||||
Rogers,
Richard
|
100
|
100
|
0
|
*
|
||||||||||||
Scnittiker,
Reed
|
300
|
300
|
0
|
*
|
||||||||||||
Shearer,
Robert
|
250
|
250
|
0
|
*
|
||||||||||||
Shirah,
Al
|
300
|
300
|
0
|
*
|
||||||||||||
Shirah,
Andrew
|
300
|
300
|
0
|
*
|
||||||||||||
Shirah,
Nancy
|
300
|
300
|
0
|
*
|
||||||||||||
Shirah,
Philip
|
300
|
300
|
0
|
*
|
||||||||||||
Shirah,
Tova
|
300
|
300
|
0
|
*
|
||||||||||||
Shirah,
Victoria
|
300
|
300
|
0
|
*
|
||||||||||||
Silverman,
Norman
|
100
|
100
|
0
|
*
|
||||||||||||
Sleeman,
Donald
|
300
|
300
|
0
|
*
|
||||||||||||
Smith,
Pelham
|
100
|
100
|
0
|
*
|
||||||||||||
Spalsbury,
Erin
|
50,000
|
50,000
|
0
|
*
|
||||||||||||
Steudtner,
Richard Todd
|
300
|
300
|
0
|
*
|
||||||||||||
Toranto,
Richard
|
200
|
200
|
0
|
*
|
||||||||||||
Wall,
Tim
|
300
|
300
|
0
|
*
|
||||||||||||
Watkins,
James
|
300
|
300
|
0
|
*
|
||||||||||||
Wolfe,
Margaret
|
300
|
300
|
0
|
*
|
||||||||||||
Woods,
Phil
|
100
|
100
|
0
|
*
|
||||||||||||
Total
|
0
|
255,250
|
0
|
*
|
* Less
than 1%
|
(1)
|
All shares are owned of record
and beneficially unless otherwise indicated. Beneficial ownership
information for the selling stockholders is provided as of December 31,
2010, based upon information provided by the selling stockholders or
otherwise known to us.
|
|
(2)
|
Assumes the sale of all shares of
common stock registered pursuant to this prospectus. The selling
stockholders are under no obligation known to us to sell any shares of
common stock at this
time.
|
23
ITEM
8. PLAN OF DISTRIBUTION
This
offering is not being underwritten. The selling stockholders may sell or
distribute the shares, from time to time, depending on market conditions and
other factors, through underwriters, dealers, brokers or other agents, or
directly to one or more purchasers. The price of $2.00 is a fixed price at which
the selling security holders may sell their shares until our common stock is
quoted on the OTC Bulletin Board or on any stock exchange whereupon, the selling
stockholders directly, through agents designated by them from time to time or
through brokers or dealers also to be designated, may sell their shares from
time to time, in or through privately negotiated transactions, or in one or more
transactions, including block transactions, on the OTC Bulletin Board or on any
stock exchange on which the shares may be listed in the future pursuant to and
in accordance with the applicable rules of such exchange or otherwise. The
selling price of the shares may then be at market prices prevailing at the time
of sale (if, in fact, there is any established market price), at prices related
to any such prevailing market prices (if there is any market) or at negotiated
prices after the shares are quoted on the OTC Bulletin Board. To the extent
required, the specific shares to be sold, the names of the selling stockholders,
the respective purchase prices and public offering prices, the names of any such
agent, broker or dealer and any applicable commission or discounts with respect
to a particular offer will be described in an accompanying prospectus. In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
prospectus.
We will
not receive any proceeds from sales of shares by the selling stockholders.
However, if any of the selling stockholders decide to exercise or convert their
convertible security, we will receive the net proceeds of the exercise or
conversion of such security held by the selling stockholders. We intend to use
any proceeds we receive from the exercise or conversion of convertible
securities for working capital and other general corporate purposes. We cannot
assure you that any of the Convertible Securities ever be exercised or
converted.
We will
pay all expenses of registration incurred in connection with this offering
(estimated to be $13,500), but the selling stockholders will pay all of the
selling commissions, brokerage fees and related expenses.
The
selling stockholders and any broker-dealers or agents that participate with the
selling stockholders in the distribution of any of the shares may be deemed to
be “underwriters” within the meaning of the Securities Act, and any commissions
received by them and any profit on the resale of the shares purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act.
ITEM
9. DESCRIPTION OF SECURITIES TO BE REGISTERED
Our
authorized capital stock consists of 100,000,000 shares of common stock, par
value $0.0001 per share, and 10,000,000 shares of preferred stock, par value
$0.0001 per share, the rights and preferences of which may be established from
time to time by our board. As of December 31, 2010, there were
34,391,506 shares of common stock and no shares of preferred stock issued and
outstanding.
Common
Stock
Holders
of our common stock are entitled to one vote for each share on all matters voted
upon by our stockholders, including the election of directors, and do not have
cumulative voting rights. Subject to the rights of holders of any
then outstanding shares of our preferred stock, our common stockholders are
entitled to any dividends that may be declared by our board. Holders
of our common stock are entitled to share ratably in our net assets upon our
dissolution or liquidation after payment or provision for all liabilities and
any preferential liquidation rights of our preferred stock then
outstanding. Holders of our common stock have no preemptive rights to
purchase shares of our stock. The shares of our common stock are not
subject to any redemption provisions and are not convertible into any other
shares of our capital stock. All outstanding shares of our common
stock are, and the shares of common stock to be issued in the offering will be,
upon payment therefor, fully paid and nonassessable. The rights, preferences and
privileges of holders of our common stock will be subject to those of the
holders of any shares of our preferred stock we may issue in the
future.
24
Preferred
Stock
Our board
may, from time to time, authorize the issuance of one or more classes or series
of preferred stock without stockholder approval. Subject to the provisions of
our certificate of incorporation and limitations prescribed by law, our board is
authorized to adopt resolutions to issue shares, establish the number of shares,
change the number of shares constituting any series, and provide or change the
voting powers, designations, preferences and relative rights, qualifications,
limitations or restrictions on shares of our preferred stock, including dividend
rights, terms of redemption, conversion rights and liquidation preferences, in
each case without any action or vote by our stockholders. One of the effects of
undesignated preferred stock may be to enable our board to discourage an attempt
to obtain control of our company by means of a tender offer, proxy contest,
merger or otherwise. The issuance of preferred stock may adversely affect the
rights of our common stockholders by, among other things:
• Restricting
dividends on the common stock;
• diluting
the voting power of the common stock;
• impairing
the liquidation rights of the common stock; or
• delaying
or preventing a change in control without further action by the
stockholders.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Holders
As of
December 31, 2010, there were 61 holders of record of our common stock and there
were 34,391,506 shares of our common stock outstanding. No public market
currently exists for shares of our common stock. We intend to apply to have our
common stock listed for quotation on the Over-the-Counter Bulletin Board.
Please see SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
for information related to the holdings of certain beneficial owners and
management of the Company.
The
Securities Enforcement and Penny Stock Reform Act of 1990
The
Securities and Exchange Commission has also adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).
A
purchaser is purchasing penny stock which limits the ability to sell the stock.
The shares offered by this prospectus constitute penny stock under the
Securities and Exchange Act. The shares will remain penny stocks for the
foreseeable future. The classification of penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his/her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document prepared by the Commission, which:
|
·
|
contains a description of the
nature and level of risk in the market for penny stocks in both public
offerings and secondary
trading;
|
25
|
·
|
contains a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available to the customer with respect to a violation to such duties or
other requirements of the Securities Act of 1934, as
amended;
|
|
·
|
contains a brief, clear,
narrative description of a dealer market, including "bid" and "ask" prices
for penny stocks and the significance of the spread between the bid and
ask price;
|
|
·
|
contains a toll-free telephone
number for inquiries on disciplinary
actions;
|
|
·
|
defines significant terms in the
disclosure document or in the conduct of trading penny stocks;
and
|
|
·
|
contains such other information
and is in such form (including language, type, size and format) as the
Securities and Exchange Commission shall require by rule or
regulation;
|
The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, to the customer:
|
·
|
the bid and offer quotations for
the penny stock;
|
|
·
|
the compensation of the
broker-dealer and its salesperson in the
transaction;
|
|
·
|
the number of shares to which
such bid and ask prices apply, or other comparable information relating to
the depth and liquidity of the market for such stock;
and
|
|
·
|
monthly account statements
showing the market value of each penny stock held in the customer's
account.
|
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
Equity
Compensation Plan Information
We have
no outstanding stock options or other equity compensation plans.
Reports
We are
subject to certain reporting requirements and will furnish annual financial
reports to our stockholders, certified by our independent accountants, and will
furnish unaudited quarterly financial reports in our quarterly reports filed
electronically with the SEC. All reports and information filed by us can be
found at the SEC website, www.sec.gov.
Dividend
Policy
We have
not previously declared or paid any dividends on our common stock and do not
anticipate declaring any dividends in the foreseeable future. The payment of
dividends on our common stock is within the discretion of our board of
directors. We intend to retain any earnings for use in our operations and the
expansion of our business. Payment of dividends in the future will depend on our
future earnings, future capital needs and our operating and financial condition,
among other factors that our board of directors may deem relevant. We are not
under any contractual restriction as to our present or future ability to pay
dividends.
26
ITEM
10. INTEREST OF NAMED EXPERT AND COUNSEL
The Law
Offices of Robert L. B. Diener, 56 Laenani Street, Haiku, HI 96708 was retained
for the purpose of preparing this registration statement. rendering the legal
opinion, attached as an exhibit hereto, on the validity of the common stock to
be issued pursuant to this Registration Statement and for an opinion letter to
the auditor which was required to complete the audit enclosed herein. As payment
for said service, the Law Office of Robert L. B. Diener was paid a total of
$10,000.00. The Law Offices of Robert L. B. Diener is not receiving any
contingent interest, fee or shares in the Company.
The Law
Office of Robert L. B. Diener may be retained for additional legal services in
the future at fees to be agreed upon.
The
financial statements of Accelerated Acquisitions V, Inc. as provided herein,
have been audited by an independent public accountant firm approved by the
Public Company Accounting Oversight Board. The audit firm that has provided the
audited financials is Paritz & Co., P.A., 15 Warren St., Hackensack NJ
07601. Said firm has been paid the sum of $8,420 for the work
performed to date. Paritz & Co., P.A. is not receiving any
contingent interest, fee or shares in the Company.
The
Company has identified Island Capital Management, LLC. St. Petersburg, FL as the
Company’s stock transfer agent. Their address is 100 2nd Avenue
South, 300N, St Petersburg, Florida 33701. Their phone number is (727)
502-0508.
ITEM
11. INFORMATION WITH RESPECT TO THE REGISTRANT
Accelerated
Acquisitions V is an early or development stage company which has licensed its
entire technology platform from Demand Pooling Global Services, LLC (“DPGS” or
“Licensor”). The fully functional web-based platform automates the business
process for facilitating cooperative buying (“demand aggregation”) of
capital assets and a limited number of commodities (motor fuel and water
treatment chemicals) primarily among state and local governments (“SLGs”) in order to
obtain volume-discount pricing
for products that are not typically the subject of meaningful price
discounting in the volumes typically purchased by individual entities. The
Company expects to remain substantially dependent upon additional platform
development by the Licensor, although the Company may seek platform enhancements
from other sources or may enhance its application internally. The
Company does not currently have experience in developing its own software and
can provide no assurance that it will achieve this capability internally or that
it will be able to obtain qualified resources for this purpose.
To the
best of the Company’s knowledge, Licensor has never been, is not currently and
has no plans in the future to engage in the demand aggregation pooling
business. DPGS is strictly a software development company which
developed the electronic application or platform which is licensed to the
Company. Further, the Company believes that Licensor has no intent to engage in
a business similar to the Company in the United States (which the Company
believes would be in violation of the terms of the License). The Company
believes that Licensor has not generated any revenues to date.
The
Company’s initial target market is the U.S. domestic market, consisting of state
and local governments, quasi-government agencies, school and hospital districts,
transit agencies, airports and universities. To date, the Company has not
generated revenues from demand aggregation pools. Beta-testing is
complete and the Company has launched its first cooperative purchase pool from
which it expects to produce revenues. During the next 12 months, the
Company intends to schedule purchase pools for buyer participation and supplier
bidding for selected commodities (e.g., motor fuel and water treatment
chemicals) and a variety of manufactured products which have not typically been
the subject of cooperative purchases. Management believes that
cooperative purchasing will improve pricing for the participating buyers by
enabling multiple prospective purchasers (largely comprised of SLGs that have
similar purchasing needs) to join together and leverage their collective
buying power through participation in purchasing pools, conducted by the Company
on a scheduled basis, in a given “time window” which the Company
controls. Once buyers have joined the purchasing pools, uploaded or
created their IFBs using the Company’s web-based electronic platform, the
Company will then invite manufacturers/distributors/vendors/suppliers of the
specific products to submit electronic bids in a competitive sealed-bid process
that electronically emulates the traditional procurement processes most SLGs
employ for the purchase of such products. Prospective buyers then
have the opportunity to evaluate and accept or reject the supplier-submitted
bids, the pricing for which is expected to take into account the total pool
volume.
27
The
Company does establish certain rules for each pool. These rules
relate primarily to the timing of the pool – when it is opened to buyer
participation, when buyer participation ends and supplier bidding commences and
the time deadline when the suppliers must submit bids. Typically, the
latter occurs at 1:59:59 PM Central time after which time, suppliers can no
longer submit bids. One second later (timed according to the U.S.
Atomic Clock), access reverts to the buyers for capturing their respective bids
from the supplier. No timing is imposed upon the suppliers for
evaluating their bids and making a determination of whether to award or reject
the bids. Some may award immediately and some may take several months
to make a determination, but each buyer evaluates its own bids and accepts or
rejects them as they have in the past.
The
Company provides no examples of IFBs, purchase agreements or other documentation
since every state or local government must reserve the right to employ its own
documents which are uploaded onto the Company’s platform. Suppliers
must download and acknowledge receipt of those documents before they are allowed
to progress to pricing.
The
Company imposes no geographic constraints or limitations and the only bidding
process that is addressed by the platform is the traditional ‘competitive sealed
bid’ process which state and local governments either require or with which they
are most familiar.
The
Company does not plan to offer opportunities for a reverse auction mechanism or
for Dutch auctions, or otherwise.
The
Company does not conduct an auction process but rather a very different and
distinct process referred to as a “competitive sealed bid”
process. Under the competitive sealed bid process, buyers seek
pricing from suppliers that are submitted in sealed envelopes, or in our case
electronically, and opened mechanically or electronically at Bid
Opening. There is no chance, as would be the case for an auction, to
submit an improved bid. The sealed pricing is the best and final bid
and no other pricing can be considered.
The
Company does not trade commodities, a process, which as previously explained, is
very different from the Company’s process of providing a platform where state
and local governments can post their IFB’s seeking bid pricing for their
purchases. In fact, the Company, does not buy, sell, inventory or
trade any product.
SLG’s
do not hire us, contract with us or pay us a fee. They simply use our
platform to post their requirements through an IFB pursuant to the traditional
sealed bid process and we have not been able to identify any entity which is
unable to employ our platform.
The
Company’s application platform is fully functional in its current state and it
is currently in the final phase of its first non-beta pooled purchase of
products for state and local governments. The subject product is
motor fuel and the next product pools will be for water treatment chemicals and
police and other vehicles. The Company has also launched 2011 Winter
Motor Fuel Pool with bids due from suppliers in mid-March 2011.
The
Company expects the participating buyers in the first non-beta motor fuel pool
to complete the process of evaluating their bids and accepting or rejecting
those bids by mid-February, 2011, at which time the revenues achieved by the
Company from this pooled transaction should be known. Management
cannot confirm the success of this initial pooled transaction since bids are
submitted on its platform as if they were “sealed bids.” If all
buyers receive bids, there is no assurance that the bids will be accepted by the
individual buyers. If bids are evaluated by buyer and awards made by
the buyers, there is no assurance as to how long it may take the buyers to reach
contract agreement with the awarded supplier(s). It is only in the
event that contract awards are made to suppliers by the buyers that the Company
is entitled to receive compensation from the awarded
suppliers.
28
The
Company does not buy, sell, broker or inventory any product and no buyer or
seller that elects to use the Company’s platform cedes any discretion or control
to the Company. The Company remains neutral throughout the process
and offers no recommendations or advice and makes no selections or decisions on
behalf of either buyers or sellers. The Company simply operates and
markets the electronic platform under license from Licensor.
The
Company offers no financial consulting or hedge advice and does not have the
necessary skills to do so. However, we may from time-to-time, call
upon an independent consultant to keep the Company abreast of current market
trends and expertise that may be available in the market and the independent
consultant, which is unrelated to the Company, has its own consulting practice
and customers. The Company derives no recompense or financial benefit
from the independent consultant and its employee(s) are neither employees of,
nor receive compensation from, the Company.
Revenue
Model/Cash Conversion Cycle. DEPO’s primary fee income is expected to
derive from its orchestration of the cooperative buying pools for a variety of
products that are typically and repetitively purchased by SLGs and is generally
based upon a percentage of the value of the products
purchased. DEPO’s fees, which range between 1.5% and 2.0% of the
gross value of the pooled purchases, are paid by the winning
supplier(s). For a limited number of products (e.g., motor fuel),
fees are calculated upon a per unit/quantity (e.g., per contracted gallon)
basis.
The
Company intends to apply its technology to pools for a variety of products,
depending upon purchasing cycles for target market buyers. The
Company’s ability to execute these product purchase pools will depend upon the
development by the Licensor or other sources, if available, of new product
modules for the Company’s software application that expand the scope beyond the
initial 3 product categories of fuel, water treatment chemicals and police/other
vehicles. Pools for each category of product will be conducted multiple
times on an annual basis.
The
Company believes that re-launching the pools for the purchase of motor fuel can
be accomplished by the Company at no or nominal additional cost for each
successive pool and the Company intends to launch a minimum of three motor fuel
pools each year. Launching water treatment chemical pools and police
and other vehicle pools with the software licensed from the Licensor is also
currently possible and the Company is in the process of investigating the
appropriate timing for launching these pools and the number of times within a
year that each should be run. The Company believes that the cost of
launching each of these product pools is nominal, since the Licensor fully
developed the software for these three product categories, and the three
categories of products are part of the License.
Typically,
pools for various products will be scheduled and operated 1-4 times per year for
each product. If the Company is able to raise external
financing in the amount of approximately $6,350,000, management expects to have
the capability to operate 3-5 pools simultaneously within 6 months thereafter,
and up to 5-8 simultaneous pools within the following 12 months. The
timing for each category of product pools will be based upon known budget cycles for the buyers
of those products and upon surveys of buyers (as to the timing of their needs)
and suppliers (regarding the production cycle for certain
manufactured products).
Management
schedules pools to be open for approximately 30 days for buyer participation
including the posting or building of their IFBs within the DEPO
platform. At the end of this period, the pool access will be flipped
to suppliers for approximately 30 days, during which time suppliers are invited
to capture all requirements of the pool participants (buyers’ bid
requests). At the end of this second 30-day period, precisely at a
specified time established by the Company and governed by the U.S. Atomic Clock,
for accuracy, bids are due from suppliers. Immediately, thereafter,
access to suppliers is terminated and buyer access commences for capturing all
bids. State and local government buyers vary in the timing of how
long they require for evaluating and awarding contracts from immediately (solely
based upon lowest responsive bid), to as long as 30-75
days. Twenty-five percent of DEPO’s Platform Use Fee is due within 30
days of reaching contract agreement with the supplier(s) and the balance
(remaining 75%) due when the products are delivered to the
SLGs.
29
Certain
products are characterized by short pay cycles. For example, in the
fuel supply chain, bulk fuel is sold by refiners to jobbers and by jobbers to
end-user buyers. Jobbers must pay for fuel, which they purchase for
resale, within 10 days and therefore, generally require that the end-user buyers
pay within 10 days. Fuel is often delivered as frequently as twice
weekly to transit agencies, for example, but perhaps weekly or bi-weekly to
cities. There are numerous instances where fuel is delivered more
frequently, as well as less frequently, such as monthly.
Other
products such as configurable vehicles (e.g., police cars) may have delivery
schedules of several weeks to several months and both the final delivery by the
suppliers and product acceptance by the end-user buyers, governs the payment
cycle for those products.
Launching
pools for products other than motor fuel, water treatment chemicals, police,
pursuit and other vehicles will depend upon the Company’s ability to generate
funds from fund-raising activities or from the operation of prior pooled
transactions. The cost of researching, adding staffing, evaluating
purchase patterns of the Company’s target market buyers, the specifications
generally employed for those products, identifying the suppliers of those
products, pricing mechanisms, delivery terms and conditions, distribution
channels and completing catalogs that incorporate the parameters for those
products is estimated to be approximately $50,000-$100,000 for each of those
products and without additional funding or the generation of revenues from the
operation of pools for the initial 3 products (or the combination of the two),
there is no assurance that the Company will have sufficient resources to fund
these costs. The actual development of the additional software that
would enable the Company to launch pools for the purchase of products other than
the 3 product categories identified above, is substantially the responsibility
of the Licensor and becomes part of the exclusive North American license as well
as the non-exclusive license outside of North America. The Company
(Licensee) retains the right to outsource to other software development firms
other components of the Company’s offering, if it chooses to expand the scope of
its offering. If the Company chooses to outsource future development to firms
other than the Licensor, the Company will do so on a “work for hire” basis so
that the additional developed technology would belong to the
Company. However, there is no assurance that the additional
development, if outsourced to a third party, can be achieved on a “work for
hire” basis. The Licensor retains the right to offer the demand
aggregation platform, as it is currently developed and as enhanced by additional
development, to other prospective licensees outside of North
America.
THE
SLG PROBLEM AND SOLUTION
Given
current economic conditions, SLGs are today faced with greater pressures to
reduce budgets and expenditures, than has been the case in the recent
past. They have only limited tools for addressing economic
shortfalls— (i) raising taxes, (ii) curtailing services or (iii) cutting
staffing. The use of the Company’s demand aggregation platform can be of
significant benefit in achieving procurement savings, particularly for capital
assets and other large purchases that represent large components of many SLG
budgets.
THE
MARKET / SUSTAINABILITY / COMPETITION
Market.
The Company’s target market primarily includes states, counties,
provinces, parishes, cities, school and hospital districts, higher education,
airports, transit agencies and associations of governments nationwide. SLG
purchases of goods and services represent a significant portion of the Gross
Domestic Product. Product categories include, among others, mass
transit rail cars and buses, police cars, airport and building security
equipment, school buses, fire trucks, garbage trucks, lighting, traffic
signaling and other capital assets as well as for commodities such as motor
fuels, and water and waste water treatment chemicals. These types of products
are purchased
repetitively, largely irrespective of economic
conditions, since they are considered essential for the efficient operation of government. The
type of products for which pooled purchases are to be scheduled may change
numerous times in the course of a 12-month period and it is the intention of the
Company to be as responsive to buyers’ needs as possible. For
example, if a significant hurricane were to hit the Southeastern U.S., it is
likely that state and local governments would ask for us to consider running
pools for the purchase of back-up power generators to ensure that critical
operations such as “911 Service” remains fully operational. We,
therefore, will adjust the timing of when pools will open to the needs of the
buyers to the extent we have the financial flexibility to do so. In
order to achieve the financial flexibility, the Company will use its best
efforts to raise additional funding and to be successful in the operation of its
initial 3 product category pools (motor fuel, water treatment chemicals and
police and other non-pursuit automobiles). In the long term, the
Company hopes to be responsive to requests from SLG buyers for almost any
products or services where meaningful potential savings can reasonably be
achieved through cooperative buying.
30
Competition. There
are no known competitors offering true demand aggregation services on the broad
and flexible basis which the Company offers. A variety of companies
provide services to SLGs for permitting, licensing, RFP posting and surplus
equipment auctions. Other companies and associations offer
cooperative buying opportunities, including “piggyback contracting” to
SLGs, primarily for lower priced items such as office supplies, consumables and
small equipment. At least one other entity, the Houston-Galveston
Area Council, through its HGACBuy affiliate, provides cooperative buying
opportunities for high-priced capex products, but it does so by employing the
“piggyback contracting” approach. The Company is currently exploring
opportunities for sublicensing its platform to third parties as a means for more
rapidly addressing market segments not currently addressed by the
Company. Any such sublicensing agreement would incorporate provisions
for royalty payments to the Company.
Piggyback
Contracting. Most
SLGs have experienced and are familiar with the benefits of cooperative buying
through permissive “piggyback”
contracting. Under this approach, a governmental entity (typically
larger ones) will enter into a contract for the purchase of a product and then
allow other SLGs to purchase off of this pre-negotiated contract. The approach
generally produces better pricing for the smaller piggybacking SLGs than they
would obtain by purchasing on their own with their particular volumes or
quantities. However, as a downside, the piggybacking SLGs normally
are only offered the opportunity to purchase the product, configured as it was
pre-negotiated by the contracting entity, and at the price that was agreed upon
by the contracting entity, and are not allowed to configure the product
according to their own desired product specifications. Since the
additional volume each new purchaser adds to the piggyback contract is unknown
to the contracting supplier, that additional volume is, therefore, not taken into consideration
in pricing. The piggybacking participants generally are unable to
specify their own unique product configurations, whether fire trucks, police
cars or other configurable products.
E-Procurement
Reverse Auctions. One
other company, Louisville, KY based eBridge, offers SLGs the opportunity to
generate savings through reverse auction mechanisms. Under the
reverse auction approach, suppliers bid down the price in a transparent bidding
process that culminates with an award to the lowest bidder. While reverse
auctions are a viable tool in the SLG space, they have met with mixed success
since participating suppliers tend to quickly lose their incentive to
participate in subsequent reverse auctions. EBridge does not offer
aggregation as part of their business models, but rather they address the
purchase needs of single SLG
entities.
Platform
Distinguishing Features. The Company’s platform
represents true demand
aggregation, whereas piggyback purchasing does not. Under the
Company’s approach, each buyer’s incremental volume is expected to improve the
volume-discount pricing for all participants and pricing
is based upon pool
volume for nationwide buyer participation. Furthermore, the Company’s
approach is based upon the premise that each individual buyer is either
insistent upon or highly desirous of being able to maintain its own product
specifications within the cooperative buying pools. Under the piggyback
contracting approach, incremental volume is typically not considered in the bid
pricing provided by the suppliers since pricing (and product configurations) are
pre-negotiated by the original contracting buyer and additional buyers are
offered the opportunity to purchase off this pre-negotiated contract. Reverse
auctions are typically conducted on behalf of a single buyer, rather than
multiple buyers, and therefore, are not expected to benefit from volume-discount
pricing.
31
Most SLGs
are familiar with the complexities and difficulties of organizing cooperative
purchases, even at the local level. The Company’s platform removes these
difficulties and streamlines the approach for SLGs, whether on a local, regional
or national level.
PLANNED
AGGREGATION POOLS
Management
has preliminarily identified approximately 40 products which its target market
buyers typically and repetitively buy and the Company intends to be responsive
to buyers’ requests for order of priorities in addressing these products, the
“target products.” However, purchasing patterns of its target market
buyers may change from time to time and Management expects, to adjust it’s
scheduling to accommodate the changing purchasing patterns.
While the
Company has designed its platform to be flexible in this respect, there is no
assurance that the Company will have the financial capability to adjust as
quickly or as often as may be prudent for this purpose.
SYSTEM
TECHNOLOGY
Datacenter
The
Company currently outsources its data center function to Databank LLC and
intends to continue doing so, on an oral month-to-month lease arrangement
basis. Maintenance of the facilities, operation and management of the
data center is the responsibility of Databank, the owner of the data
center. This approach enables the Company to benefit from a
state-of-the art infrastructure facility, while not having to commit significant
resources, capital or human, to the build-out and ownership and maintenance of
the infrastructure. While the current lease provides excess
capacity, the ability to expand capacity and scalability requirements (space,
power, networking and redundancy capability) is virtually without limitation in
the Databank facilities. Monthly lease payments to Databank are
$800 for all subscribed data center infrastructure (other than servers), network
and other services discussed herein and required for the Company’s services
anticipated for the next 12 months’ level of operation. As additional
capacity is required, it is anticipated that the Company will acquire and own
servers which it will place in the facilities leased from
Databank. Some, but not all of the excess physical capacity leased
from Databank, will be absorbed by the addition of Company-owned servers, if
needed. Databank monthly lease charges will increase, but it is not
yet possible to identify what additional facilities, power, networking and
redundancy capability will be required from Databank until the Company makes a
determination of the number and type of additional servers it may require, if
any. The Company expects to fund the cost of additional servers from
net revenues it expects to generate from current and future product purchase
pools and from additional financing which it anticipates may be
necessary. The Company confirms that the foregoing description of the
Databank oral agreement accurately reflects such agreement.
Network
For the
Company’s Internet backbone (which are owned by and leased from Databank), the
network architecture relies upon Databank’s routers to provide a Highly
Redundant and Highly Available Multi-Homed Internet Aggregation
Hub. This coupled with Databank’s multiple 10 Gigabit IP trunks from
multiple Tier 1 Internet service providers, results in the Company having a
highly robust and scalable IP Hub, with connectivity being provided to Databank
by multiple vendors. The network infrastructure is part of the Company’s
month-to-month lease from Databank.
Application
The
Company’s system application, licensed from the Licensor, utilizes an “n-tiered”
architecture for reliability, scalability and redundancy. The system
is comprised of multiple applications which manage the functionality and
business logic between databases, Web portal and back-office
applications. The core application is developed in Java, .Net 2.0 and
utilizes various state-of-the- art tools for the Graphical User
Interface. This allows rapid development and deployment of future
enhancements.
32
LEGAL
PROCEEDINGS
None
DESCRIPTION
OF PROPERTY
The
Company maintains its designated office at 12720 Hillcrest Road, Suite 1045,
Dallas, Texas 75230. These offices, comprising 2,950 sq. ft., are
leased by Demand Pooling Global Services, LLC from St. Paul Properties for a
monthly rental of $3,900 which expires March 1, 2012. The Company
uses an undesignated portion of such space free of rent. At some time
in the future, Demand Pooling, LLC may begin charging rent to the Company for
the portion of the space which it uses. The Company’s telephone
number is 972-388-1950. The Company’s fax number is
973-388-1973.
33
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
The
following discussion of our financial condition and results of operation for the
years ended December 31, 2009 and 2008 and the three and nine month periods
ended September 30, 2010 and 2009 should be read in conjunction with the
financial statements and the notes to those statements that are included
elsewhere in this report. Our discussion includes forward-looking statements
based upon current expectations that involve risks and uncertainties, such as
our plans, objectives, expectations and intentions. Actual results and the
timing of events could differ materially from those anticipated in these
forward-looking statements as a result of a number of factors, including those
set forth under the “Risk Factors,” “Cautionary Notice Regarding Forward-Looking
Statements” and “Our Business” sections in this Form 8-K. 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.
Plan
of Operation
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. A copy of this letter is attached as Exhibit
10.3.
Messrs.
Aland and Kelly subsequently made gifts of 136,000 and 110,000 shares,
respectively, to an aggregate of nine donees. All gifted shares were
donated prior to April 2, 2010. All gifts were to members of the
respective donee’s family as a part of the donee’s ongoing estate
planning. The relationships are the following: Robert and
Ronald Aland are brothers of Richard Aland; Lauren Morr and Erin Spalsbury are
daughters of Richard Aland. Chad Kelly and Jessica Kelly are children
of Don Kelly; Dominic and Wyatt Kelly are grandchildren of Don Kelly; Nina Kelly
is the mother of Jessica and Chad Kelly is Don Kelly’s
ex-wife).
Following
these transactions, Mr. Aland owned 76.75%% and Mr. Kelly owned
13.54% of the Company’s 31,146,285 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.
34
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”) 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.
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
|
Under the
foregoing formula, the Company is not required to make any specific expenditures
if it reaches a point where revenues exceed expenses within the three-year
period. Also, the Company is not required
to pay $10,000,000 (or any other amount in excess of the annual licensing fee)
to the Licensor for any purposes—and is only required to show that it has made
the expenditures for “qualifying research, development and commercialization” if
revenues do not exceed expenses by the third anniversary of the
agreement. “Commercialization” essentially refers to marketing and
sales. If the Company does not meet the profitability test within the
three-year period and the expenditures are, in fact, required, it is anticipated
that a portion of the costs of development of the electronic platform, product
configuration catalogs and the like will be paid to the Licensor for these
purposes. Notwithstanding, the Company retains the right to engage
other contractors to develop components of the application and is not restricted
to using the Licensor as its only source for additional development
work. All payments made to third party contractors for research,
development and commercialization are included to satisfy the expenditure test.
It is anticipated that a significant portion of any expenditures by the
Company will be utilized for the Company’s own preparation and market research
for the implementation of new product pools beyond the original three product
categories, and all such expenditures also serve to satisfy the expenditure
test.
35
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 terminated upon the occurrence of events of default specified in the
License 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”) (which was immediately exercised
by the holder) subject to a repurchase option granted to the company to
repurchase the shares at a price of $0.0001 per share in the event the
Company fails to complete funding as detailed in the agreement subject to the
following milestones:
|
●
|
Milestone
1 – Company’s right
of repurchase will lapse with respect to 70% of the shares upon securing
$5 million in available cash from
funding;
|
|
●
|
Milestone
2 - Company’s right
of repurchase will lapse with respect to 20% of the Shares upon securing
$10 million in available cash (inclusive of any amounts attributable to
Milestone 1);
|
|
●
|
Milestone
3 - Company’s right
of repurchase will lapse with respect to the remaining 10% of the Shares
upon securing $15 million in available cash (inclusive of any amounts
attributable to Milestones 1 or
2);
|
36
and (b)
cash compensation at a rate of $87,500 per month. The payment of such
compensation is subject to the company’s achievement of certain designated
milestones, specifically, cash compensation of $350,000 is due consultant upon
the achievement of Milestone 1, $350,000 upon the achievement of Milestone 2,
and $350,000 upon the achievement of Milestone 3. Upon achieving each Milestone,
the cash compensation is to be paid to consultant in the amount then due at the
rate of $87,500 per month. The total cash compensation to be received by the
consultant is not to exceed $1,050,000 unless the Company receives an amount of
funding in excess of the amount specified in Milestone 3. If the Company
receives equity or debt financing that is an amount less than Milestone 1, in
between any of the above Milestones or greater than the above Milestones, the
cash compensation earned by the Consultant under this Agreement will be prorated
according to the above Milestones.
The
Company also has the option to make a lump sum payment to AVP in lieu of all
amounts payable thereunder.
On May
3, 2010, the Company filed a Form 8-K Report with the United States Securities
and Exchange Commission which, among other things, included a change in the
Company’s Shell Company Status as of April 15, 2010—the date the Company entered
into the License.
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.
Critical
Accounting Estimates
With
particular reference to the valuation of shares issued by the Company, we did
not utilize any critical accounting estimates as to fair market value of such
stock. With respect to the shares sold to Messrs. Aland and Kelly,
the Company was nothing more than a “virgin” shell company at the time of such
sale without any business or assets to value. As a result, the par
value of the stock was the only reasonable valuation basis for such
shares. The same applied to the option granted to Accelerated Venture
Partners which were agreed at the same time and as a part of the same
transaction as the stock sale to Messrs. Aland and Kelly—the Company believed
that par value was the only reasonable valuation basis. The shares
sold to investors in July 2010 were valued at the amount actually paid—$2.00 per
share.
Going
Concern
We
were a shell company from April 29, 2008 until we filed our Form 8-K Report
related to a change in shell company status on May 3, 2010 and adopted its
present Business Plan. We have incurred net losses of approximately
$32,223 since inception through September 30, 2010. At September 30,
2010 we had approximately $18,616 in cash and approximately $0 other assets and
our total liabilities were approximately $28,339. The report of our
independent registered public accounting firm on our financial statements for
the year ended December 31, 2009 contains an explanatory paragraph regarding our
ability to continue as a going concern based upon recurring operating
losses and our need to obtain additional financing to sustain
operations. Our ability to continue as a going concern is dependent
upon our ability to obtain the necessary financing to meet our obligations and
repay our liabilities when they become due and to generate sufficient revenues
from our operations to pay our operating expenses. Management
believes that the Company will need to raise approximately $6,350,000 in the 12
months commencing December 2010 and approximately $8,650,000 during the 2nd 12
months commencing December 2011 in order to meet the requirements of its
Business Plan and achieve its growth targets.
There are
no assurances that we will continue as a going concern and the Company’s
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
37
Results
of Operations
Results of Operations for
the period ended December 31, 2009
Accelerated
Acquisitions V, Inc. was incorporated on April 29, 2008, and as such had no
meaningful results of operations for the period ended December 31,
2009.
During
the period from inception (April 29, 2008) to December 31, 2009, we had no
revenues and recognized expenses of $10,048 which primarily comprised
professional and legal fees and other costs related to the start-up and
organization of our business and raising initial capital for the
Company.
Results of Operations for
the three and nine months ended September 30,
2010
For the
three months ending September 30, 2010, the Company had no revenues
and incurred general and administrative expenses of $17,600, compared to no
revenues and general and administrative expenses of $1,304 for the corresponding
period of 2009.
For the
nine months ending September 30, 2010, the Company had no revenues and incurred
general and administrative expenses of $22,175, compared to no revenues and
general and administrative expenses of $5,089 for the corresponding period of
2009.
For the
period from inception (April 29, 2008) through September 30, 2010, the Company
had no activities that produced revenues from operations and had a net loss of
$(32,223), due principally 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 and
other SEC-related compliance matters.
Liquidity
and Capital Resources
As of
September 30, 2010, the Company had cash on hand of approximately $18,616 and
had total current liabilities of $28,339. Management believes that the
Company will need to raise approximately $6,350,000 in the first 12 months
commencing December 2010 and approximately $8,650,000 during the 2nd 12 months
commencing December 2011 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.
The
Company’s net losses to date are primarily attributable to pre-launch salaries
and costs of general business model implementation, coupled with the late launch
of its first revenue-production pool which will not likely settle until the
beginning of the first quarter of 2011. The Company believes that
these results will not be characteristic of the Company’s operating results once
it launches additional pooled purchases. With respect to the funding
milestones detailed in the License, the Company is not required
to fund the $10,000,000 (for "qualifying research, development and
commercialization expenses") amount as long as it achieves gross profitability
within the first three years of the Licensing Agreement. The Company’s future
success is therefore very dependent upon its ability to achieve profitable
operations and generate cash from operating activities. There is no assurance
that the Company will be able to generate sufficient cash from operations or
raise the required capital to achieve continued existence or fund its business
model. Should the Company be unable to obtain additional funding, its
operations will be materially affected.
The
Company’s funding plans include selling additional capital stock and/or
borrowing to fund the aforementioned expenses. The Company intends to approach
Hedge Funds, Venture Capital Groups, Private Investment Groups and other
Institutional Investment Groups in its efforts to achieve future
funding.
The
Company will require significant additional financing in order to meet the
milestones and requirements of its Business Plan, including the following
estimated amounts for research, development and commercialization expenses
related to the Technology. The Company therefore intends to raise an aggregate
of $15 million in 2010 and 2011, the proceeds of which would be utilized as
follows:
38
Management,
Business Development and related expenses:
|
||||
Management 2
|
$
|
2,089,000
|
||
Business
Development 3
|
$
|
4,930,000
|
||
IT
expenditures:
|
||||
IT
Development staff 1
|
$
|
1,715,000
|
||
Software
development and Hardware 1
|
$
|
856,000
|
||
Other
expenditures:
|
||||
Advertising
and Public Relations
|
$
|
850,000
|
||
Rent
and other payables
|
$
|
403,000
|
||
License
Agreement Payments 1
|
$
|
325,000
|
||
Finance,
legal, accounting and closing costs
|
$
|
1,518,000
|
||
Increase
in Working Capital
|
$
|
2,314,000
|
||
Total
Use of Proceeds
|
$
|
15,000,000
|
(1) Qualifying expenditures under
license agreement. Additional license payments are expected to be
made from operating revenues.
(2)
Includes base compensation, benefits and expenses for director-level, and
above, domestic and international employees over a two year time frame with the
number of management team members (5) ramping up commensurate with the staff
build-up. Of the total, 65% is for base compensation, 13% for benefits and
taxes, and 22% for expenses.
(3)
Compensation for an estimated domestic and international marketing staff
ramping up to 35 full-time-equivalent (FTE) business development (marketing)
employees over a two-year time frame. Of the total, 80% is for base
compensation (average salary, $60,000); with 20% for benefits and
taxes.
The
Company’s funding plans include selling additional capital stock and/or
borrowing additional amounts to fund the aforementioned expenses. The Company’s
future success is also very dependent upon its ability to achieve profitable
operations and generate cash from operating activities. The Company intends to
approach Hedge Funds, Venture Capital Groups, Private Investment Groups and
other Institutional Investment Groups in its efforts to achieve future funding.
There is no assurance that the Company will be able to generate sufficient cash
from operations or raise the required capital to achieve continued existence or
fund its business plan. Should the Company be unable to obtain
additional funding, its operations will be materially affected.
As of the
date of this prospectus, the Company does not have any commitments for any
capital investment or off-balance sheet arrangements and similarly does not have
any commitments to make specific capital expenditures.
39
Off-Balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements.
CHANGES
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Since
inception until the present time, the principal independent accounting firm for
the Company has not resigned, declined to stand for reelection or been
dismissed. We have no disagreements with our independent registered public
accounting firm on any matter of accounting principles or with any financial
statement disclosures.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The
following individuals currently serve as our executive officers and
directors:
Name
|
Age
|
Positions
|
Period
of Service
|
|||
Richard
Aland
|
66
|
Director,
CEO, CFO, Treasurer
|
March
25, 2010-present
|
|||
Donald
Kelly
|
58
|
Director,
COO, Secretary
|
March
25, 2010-present
|
Richard
K. Aland, Chairman and Chief Executive Officer:
Mr. Aland
became CEO, Treasurer and a director of the Accelerated Acquisitions V, Inc. in
March 2010. Previously, Mr. Aland founded PurchasePooling.Com, Inc.
and was employed by the company from March 2000 to December 2000 and founded
Demand Pooling Global Services, LLC and was employed by the company from August
2005 to the present date. He served as an investment banker for 30
years specializing in solving the financial needs of state and local government
entities, including a variety of transit agency, airport, stadium, arena and
convention center projects. He has been a leader in the municipal
finance industry in creating innovative financing techniques, complex leasing
structures, and public/private partnerships. Privatization Magazine,
referred to Mr. Aland as “…one of the four leading transportation finance
specialists in the U.S.”
Previously,
he served as Managing Director for Innovative Financial Services Inc. (“IFS”)
(Nov. 1988-Apr. 1999) where he was responsible for new business development,
adapting innovative and proprietary financing concepts and creative applications
of traditional financing approaches. While at IFS he developed public/private
partnerships and private sector approaches for the financing of large scale
hotels, toll roads, stadiums, convention centers and other projects in Dallas,
Denver, Kansas City, Houston, Tampa and others. Prior to IFS, he
served as Vice President and Manager of the Southwestern U.S. Public Finance
Department for Salomon Brothers Inc. (Feb. 1981-Jan. 1986) and as
Vice President of Public Finance at Goldman, Sachs and Co. (Oct. 1977-Feb.
1981). He also was Vice President of the investment banking firms,
Kuhn, Loeb and Co. (Feb. 1975-Oct. 1977) and UBS-DB Corp. (Jan. 1970-Feb. 1975),
a Union Bank of Switzerland-Deutsche Bank joint venture where his focus was on
international corporate finance. Prior to this, Mr. Aland was in the
International Department of Smith Barney as an institutional salesman in New
York and London (Dec. 1968-Jan. 1970).
Mr. Aland
earned an M.B.A. in finance from the University of Michigan in April 1966 and
completed the coursework for a doctorate in finance and international business
at Columbia University in April 1970. He also holds a B.B.A. in finance and
accounting from the University of Michigan, which he attained in April
1965.
Don
Kelly, President and Chief Operating Officer:
40
From Oct.
1994-Oct. 1995, Mr. Kelly was General Manager of SCT, Inc., an Oracle-based
application software company. He founded Ultimate Software Company of
Texas, where he was the CEO and General Partner, from Aug. 1993-Sep. 1994 for
the Texas sales and distribution company, which was later successfully taken
Public (ULTI) in 1998. In Oct. 1988, he joined Cap Gemini America,
where, until his departure in Sep. 1993, he served on the Operating Board for
the US and a General Manager of the worldwide group. Cap Gemini, is a
multi-billion dollar management consulting and business information consulting
firm.
Mr. Kelly
began his career as a Manager of the New York Energy/Retail District for G.E.
Information Services, Co., from Nov. 1978-Nov. 1983 and later, served as
Director of the Communications Industry Division of G.E. Consulting Services
Corporation (June 1985-Oct 1988). From Nov. 1983-June 1985, he was
Manager, National Marketing for Burroughs Corporation.
Mr. Kelly
is heavily involved with various Charities, specifically, Special Care and
Career Services of Dallas and Angel Flight where he holds seats on the Board of
Governors. He has focused his energies on the care and improvement of
the quality of life for those in need.
Messrs.
Aland and Kelly each contribute in excess of 40 hours per week to the Company’s
business. At this time, no executives of the Company have entered
into any employment agreements with the Company, written or
oral.
There are
no family relationships between our officers and directors. Each
director is elected at our annual meeting of stockholders and holds office until
the next annual meeting of stockholders, or until his successor is elected and
qualified.
The board
of directors has no nominating, auditing or compensation
committees.
At the
date of this prospectus, the Company is not engaged in any transactions, either
directly or indirectly, with any persons or organizations considered promoters
other than Messrs. Aland, Neher and Kelly.
Identification
of Significant Employees
The
Company does not presently have any significant employees other than the named
officers and directors.
Directors
Compensation
Directors
are not entitled to receive compensation, either directly or indirectly, for
services rendered to the Company, or for each meeting attended except for
reimbursement of out-of-pocket expenses. There are no formal or informal
arrangements or agreements to compensate directors for services provided as a
director. The Company has not implemented a plan to award options to any
directors. There are no contractual arrangements with any member of the board of
directors.
Corporate
Code of Conduct and Ethics
As of the
present date, the Company has not adopted a Code of Conduct and Ethics, but
plans to do so in the future.
Officers
and Directors Indemnification
Under our
Certificate of Incorporation and Bylaws of the corporation, the Company may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his or her position, if he or she acted in good
faith and in a manner he or she reasonably believed to be in the Company’s best
interest. The Company may advance expenses incurred in defending a proceeding.
To the extent that the officer or director is successful on the merits in a
proceeding as to which he or she is to be indemnified, the Company must
indemnify the officer or director against all expenses incurred, including
attorney’s fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, then only by a court order. The
indemnification coverage is intended to be to the fullest extent permitted by
applicable laws.
41
Regarding
indemnification for liabilities arising under the Securities Act of 1933, which
may be permitted to officers or directors under applicable state law, the
Company is informed that, in the opinion of the Securities and Exchange
Commission, indemnification is against public policy, as expressed in the Act
and is, therefore, unenforceable.
EXECUTIVE
COMPENSATION
The
following table summarizes all compensation recorded by us in 2009 for our
principal executive officers, each other executive officer serving as such whose
annual compensation exceeded $100,000, and up to two additional individuals for
whom disclosure would have been made in this table but for the fact that the
individual was not serving as an executive officer of our Company at December
31, 2009.
None
Outstanding
Equity Awards at Fiscal Year-End
The
following table provides information concerning unexercised options, stock that
has not vested and equity incentive plan awards for each named executive officer
outstanding as of December 31, 2009 and September 30, 2010:
None
Compensation
of Directors
We have
not established standard compensation arrangements for our directors and the
compensation, if any, payable to each individual for their service on our Board
will be determined from time to time by our Board of Directors based upon the
amount of time expended by each of the directors on our behalf. None
of our directors received any compensation for their services.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT
The
following table sets forth certain information regarding beneficial ownership of
the Company's Common Stock as of December 31, 2010, by: (I) each current
director; each nominee for director, and executive officer of the Company; (ii)
all directors and executive officers as a group; and (iii) each shareholder who
owns more than five percent of the outstanding shares of the Company's Common
Stock. Except as otherwise indicated, the Company believes each of the persons
listed below possesses sole voting and investment power with respect to the
shares indicated.
42
Name and Address
|
Number of Shares
|
Percentage Owned
|
||||||
Owners
of more than five percent (5%) of outstanding shares:
|
||||||||
Accelerated
Venture Partners, LLC (3)
|
||||||||
1840
Gateway Drive, Suite 200
|
||||||||
Foster
City CA, 94404
|
6,256,211
|
18.19
|
%
|
|||||
Officers and
Directors:
|
||||||||
Richard
Aland
|
||||||||
12720
Hillcrest Road, Suite 1045
|
||||||||
Dallas,
Texas 75230
|
23,771,138
|
69.12
|
%
|
|||||
Donald
Kelly
|
||||||||
12720
Hillcrest Road, Suite 1045
|
||||||||
Dallas,
Texas 75230
|
4,108,907
|
11.95
|
%
|
|||||
All
officers and directors as a group
|
||||||||
(2
persons)
|
27,880,045
|
81.07
|
%
|
(1)
This table is based upon 34,391,506 shares issued and outstanding as of December
31, 2010.
(2)
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and includes voting and investment power with
respect to the shares. Shares of Common Stock subject to options or warrants
currently exercisable or exercisable within 60 days are deemed outstanding for
computing the percentage of the person holding such options or warrants, but are
not deemed outstanding for computing the percentage of any other
person.
(3) Timothy
J. Neher has voting and dispositive control over the shares held by Accelerated
Venture Partners, LLC.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
AND
DIRECTOR INDEPENDENCE
Related
Transactions
Licensing
Agreement.
The
Company is a party to the Licensing Agreement with Demand Pooling Global
Services LLC. Messrs. Aland and Kelly are both principals of Demand
Pooling Global Services LLC and officers, directors and majority
shareholders of the Company.
Pursuant
to the terms of the Licensing Agreement 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.
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:
43
|
(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 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 terminated upon the occurrence of events of default specified in the
License Agreement.
The
Licensing Agreement may not be an arms-length agreement as Messrs. Aland and
Kelly own 23,771,138 and 4,108,907 shares of the Company respectively,
comprising in the aggregate approximately 81% of the issued and outstanding
shares of common stock of the Company. They are also both officers
and directors of the Company.
A copy of
the Licensing Agreement is attached as Exhibit 10.1 to this
Prospectus
Consulting
Services.
The
Company is party to a Consulting Services Agreement with Accelerated Venture
Partners LLC (“AVP”), a company controlled by Timothy J. Neher. The
Consulting Services 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”) (which was immediately exercised
by the holder) subject to a repurchase option granted to the company to
repurchase the shares at a price of $0.0001 per share in the event the
Company fails to complete funding as detailed in the agreement subject to the
following milestones:
|
●
|
Milestone
1 – Company’s right
of repurchase will lapse with respect to 70% of the shares upon securing
$5 million in available cash from
funding;
|
|
●
|
Milestone
2 - Company’s right
of repurchase will lapse with respect to 20% of the Shares upon securing
$10 million in available cash (inclusive of any amounts attributable to
Milestone 1);
|
|
●
|
Milestone
3 - Company’s right
of repurchase will lapse with respect to the remaining 10% of the Shares
upon securing $15 million in available cash (inclusive of any amounts
attributable to Milestones 1 or
2);
|
and (b)
cash compensation at a rate of $87,500 per month. The payment of such
compensation is subject to the company’s achievement of certain designated
milestones, specifically, cash compensation of $350,000 is due consultant upon
the achievement of Milestone 1, $350,000 upon the achievement of Milestone 2,
and $350,000 upon the achievement of Milestone 3. Upon achieving each Milestone,
the cash compensation is to be paid to consultant in the amount then due at the
rate of $87,500 per month. The total cash compensation to be received by the
consultant is not to exceed $1,050,000 unless the Company receives an amount of
funding in excess of the amount specified in Milestone 3. If the Company
receives equity or debt financing that is an amount less than Milestone 1, in
between any of the above Milestones or greater than the above Milestones, the
cash compensation earned by the Consultant under this Agreement will be prorated
according to the above Milestones.
44
The
Company also has the option to make a lump sum payment to AVP in lieu of all
amounts payable thereunder.
The
Consulting Services Agreement may not be an arms-length
agreement. AVP was the owner of 6,256,211 shares of the Company’s
common stock at August 30, 2010 and as such controls 18.19% of the issued and
outstanding shares of common stock of the Company.
A copy of
the Consulting Services Agreement is attached as Exhibit 10.2 to this
Prospectus
Other.
The
officers and directors for the Company are involved in other business activities
and may, in the future, become involved in other business opportunities.
If a specific business opportunity becomes available, such persons may
face a conflict in selecting between the Company and their other business
interest. The Company has not formulated a policy for the resolution of
such conflicts.
Director
Independence
The
Company has no “independent” directors within the meaning of Nasdaq Marketplace
Rule 4200.
EXPERTS
Our
financial statements from inception (April 29, 2008) through December 31, 2008
and for the fiscal year ended December 31, 2009 along with the related
consolidated statements of operations, stockholders’ equity and cash flows in
this prospectus have been audited by Paritz & Co P.C., of Hackensack, New
Jersey, independent registered public accounting firm, to the extent and for the
periods set forth in their report, and are set forth in this prospectus in
reliance upon such report given upon the authority of them as experts in
auditing and accounting.
Our
filings are available to the public at the SEC’s web site at
http://www.sec.gov. You may also read and copy any document with the
SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C.
20549. Further information on the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330.
We have
filed a registration statement on Form S-1 with the SEC under the Securities Act
for the common stock offered by this prospectus. This prospectus does
not contain all of the information set forth in the registration statement,
certain parts of which have been omitted in accordance with the rules and
regulations of the SEC. For further information, reference is made to
the registration statement and its exhibits. Whenever we make
references in this prospectus to any of our contracts, agreements or other
documents, the references are not necessarily complete and you should refer to
the exhibits attached to the registration statement for the copies of the actual
contract, agreement or other document.
ITEM 12 – INCORPORATION OF
CERTAIN MATERIAL BY REFERENCE
The
Registrant does not elect to incorporate any material by reference.
45
ITEM 12A – DISCLOSURE OF
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
The
Securities and Exchange Commission’s Policy on Indemnification
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers, and controlling persons of the company
pursuant to any provisions contained in its Articles of Incorporation, Bylaws,
or otherwise, the registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of registrant’s legal counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether indemnification is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
The
following consolidated financial statements are included with this
prospectus:
a) Consolidated
Financial Statements for the Fiscal year ended December 31, 2009 and period
from inception (April 29, 2008) to December 31, 2008 (audited)
b) Interim
Consolidated Financial Statements – September 30, 2010 and September 30, 2009
(unaudited).
These
financial statements have been prepared on the basis of accounting principles
generally accepted in the United States and are expressed in US
dollars.
46
ACCELERATED
ACQUISITIONS V, INC.
CONSOLIDATED
FINANCIAL STATEMENTS
TABLE
OF CONTENTS
Page
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
48
|
CONSOLIDATED
FINANCIAL STATEMENTS – December 31, 2008 and December 31,
2009
|
|
Consolidated
balance sheets
|
49
|
Consolidated
statements of operations
|
50
|
Consolidated
statements of stockholders' equity
|
51
|
Consolidated
statements of cash flows
|
52
|
Notes
to consolidated financial statements
|
53
|
CONSOLIDATED
FINANCIAL STATEMENTS – September 30, 2010 and September 30,
2009
|
|
Consolidated
balance sheets
|
56
|
Consolidated
statements of operations
|
57
|
Consolidated
statements of stockholders' equity
|
58
|
Consolidated
statements of cash flows
|
59
|
Notes
to consolidated financial statements
|
60
|
47
Report
of Independent Registered Public Accounting Firm
Board of
Directors and Stockholders
We have
audited the accompanying balance sheets of Accelerated Acquisitions V, Inc.
(a development stage company) as of December 31, 2009 and December 31, 2008 and
the related statements of operations, stockholder's deficiency and cash flows
for the year ended December 31, 2009, the period from inception (April 29, 2008)
to December 31, 2008 and the period from inception (April 29, 2008) to December
31, 2009. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as,
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of (a development stage
company) as of December 31, 2009 and December 31, 2008 and the results of its
operations and its cash flows for the year ended December 31, 2009, the period
from inception (April 29, 2008) to December 31, 2008 and the period from
inception (April 29, 2008) to December 31, 2009 in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has incurred a loss since inception, has a net
accumulated deficit and may be unable to raise further equity. These
factors raise substantial doubt about its ability to continue as a going
concern. Management’s plans regarding those matters are also described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
/s/
Paritz & Co
Hackensack,
New Jersey
March 30,
2010
48
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
BALANCE
SHEETS
December 31
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(audited)
|
(audited)
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
|
$
|
116
|
$
|
2,000
|
||||
TOTAL
ASSETS
|
$
|
116
|
$
|
2,000
|
||||
LIABILITIES
AND STOCKHOLDER’S EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accrued
expenses
|
$
|
4,442
|
$
|
1,256
|
||||
Shareholder
advances
|
1,722
|
-
|
||||||
TOTAL
LIABILITIES
|
$
|
6164
|
$
|
1,256
|
||||
STOCKHOLDER’S
EQUITY:
|
||||||||
Preferred
stock, $.0001 par value; 10,000,000 shares authorized; none issued and
outstanding
|
-
|
-
|
||||||
Common
stock, $.0001 par value; 100,000,000 shares authorized; 5,000,000 shares
issued and outstanding at December 31, 2009 and December 31, 2008,
respectively
|
500
|
500
|
||||||
Additional
paid-in capital
|
3,500
|
3,500
|
||||||
Deficit
accumulated during the development stage
|
(10,048
|
)
|
(3,256
|
)
|
||||
TOTAL
STOCKHOLDER’S EQUITY (DEFICIT)
|
(6,048
|
)
|
744
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
|
$
|
116
|
$
|
2,000
|
See
notes to financial statements.
49
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
STATEMENTS OF
OPERATIONS
Fiscal Year
Ended
December 31,
2009
|
Fiscal Year
Ended
December 31,
2008 (*)
|
April 29, 2008
(Inception)
through
December 31,
2009
|
||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Operating
Expenses
|
||||||||||||
General
and administrative
|
6,792
|
3,256
|
10,048
|
|||||||||
Net
Operating Expenses
|
6,792
|
3,256
|
10,048
|
|||||||||
Net
Loss
|
$
|
(6,792
|
)
|
$
|
(3,256
|
)
|
$
|
(10,048
|
)
|
|||
Basic
earnings (loss) per share—Basic and Diluted
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
||||||
Weighted
average number of common shares outstanding
|
5,000,000
|
5,000,000
|
(*) Partial
year from April 29, 2008 (Date of Inception) to December 31, 2008
See
accompanying notes to financial statements
50
ACCELERATED ACQUISITIONS V,
INC.
(A
Development Stage Company)
STATEMENTS OF STOCKHOLDERS’
DEFICIENCY
|
Preferred Stock
|
Common Stock
|
Additional
Paid-in
|
(Deficit)
Accumulated
During the
Development
|
Stockholder’s
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
|||||||||||||||||||||
BALANCE
AT INCEPTION (APRIL 29, 2008)
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||
Issuance
of common stock
|
-
|
-
|
5,000,000
|
500
|
3,500
|
-
|
4,000
|
|||||||||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
-
|
-
|
(3,256
|
)
|
(3,256
|
)
|
|||||||||||||||||||
BALANCE
AT DECEMBER 31, 2008
|
-
|
$
|
-
|
5,000,000
|
$
|
500
|
$
|
3,500
|
$
|
(3,256
|
)
|
$
|
744
|
|||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
-
|
-
|
(6,792
|
)
|
(6,792
|
)
|
|||||||||||||||||||
BALANCE
AT DECEMBER 31, 2009
|
-
|
$
|
-
|
5,000,000
|
$
|
500
|
$
|
3,500
|
$
|
(10,048
|
)
|
$
|
(6,048
|
)
|
See
notes to financial statements.
51
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
STATEMENTS OF CASH
FLOWS
For the Fiscal
Year ended
December 31,
2009
|
For the Fiscal
year ended
December 31,
2008 (*)
|
For the
Cumulative
Period from
Inception
(April 29,
2008) through
December 31,
2009
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
(loss)
|
$
|
(6,792
|
)
|
(3,256
|
)
|
$
|
(10,048
|
)
|
||||
Increase
(decrease) in accounts payable
|
3,186
|
1,256
|
4,442
|
|||||||||
Net
cash used by operating activities
|
(3,606
|
)
|
(2,000
|
)
|
(5,606
|
)
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from the issuance of common stock
|
-
|
4,000
|
4,000
|
|||||||||
Shareholder
Advances
|
1,722
|
-
|
1,722
|
|||||||||
Net
cash provided by financing activities
|
1,722
|
4,000
|
5,722
|
|||||||||
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(1,884
|
)
|
2,000
|
116
|
||||||||
Cash
and cash equivalents at beginning of period
|
2,000
|
-
|
-
|
|||||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
116
|
2,000
|
$
|
116
|
(*) Partial
year from April 29, 2008 (Date of Inception) to December 31, 2008
See
notes to financial statements.
52
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
NOTES TO FINANCIAL
STATEMENTS
DECEMBER 31,
2009
NOTE 1 - ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(a) Organization
and Business:
Accelerated
Acquisitions V, 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.
(b) Basis
of Presentation
The
accompanying Interim Financial Statements are unaudited and have been prepared
in accordance with accounting principles generally accepted for interim
financial statement presentation and in accordance with the instructions to
Regulations S-K. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statement presentation. In the
opinion of management, all adjustments for a fair statement of the results and
operations and financial position for the interim periods presented have been
included. All such adjustments are of a normal recurring nature. The
financial information should be read in conjunction with the Financial
Statements and notes thereto included in the Company’s Form 10-K Annual Report
for the year ended December 31, 2009 and the Company’s Registration Statement on
Form 10.
(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 $10,048, used cash from operations of $5,606 since its inception, and has
negative working capital of $6,048 at December 31, 2009. 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) Cash
and Cash Equivalents:
For
purposes of the statement of cash flows, the Company considers highly liquid
financial instruments purchased with a maturity of three months or less to be
cash equivalents. The Company had no cash equivalents at December 31,
2009
53
ACCELERATED
ACQUISITIONS V, INC.
A
Development Stage Company
NOTES TO
FINANCIAL STATEMENTS
DECEMBER 31,
2009
NOTE 1
- ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON’T):
(f) 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.
(g) 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.
(h) Fair Value of
Financial Instruments:
The
carrying value of cash equivalents approximates fair value due to the short
period of time to maturity.
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.
On April
29, 2008, the Company issued 5,000,000 shares of Common stock at a purchase
price of $.0008 per share, for an aggregate purchase price of
$4,000.00.
54
ACCELERATED
ACQUISITIONS V, INC.
A
Development Stage Company
NOTES TO
FINANCIAL STATEMENTS
DECEMBER 31,
2009
NOTE
3 - RECENT ACCOUNTING
PRONOUNCEMENTS
Subsequent
Events (Included in ASC 855 “Subsequent Events”, previously SFAS
No. 165 “Subsequent Events”)
ASC 855
established general standards of accounting for and disclosure of events that
occur after the balance sheet date, but before the financial statements are
issued or available to be issued (“subsequent events”). An entity is required to
disclose the date through which subsequent events have been evaluated and the
basis for that date. For public entities, this is the date the financial
statements are issued. ASC 855 does not apply to subsequent events or
transactions that are within the scope of other GAAP and did not result in
significant changes in the subsequent events reported by the Company. ASC 855
became effective for interim or annual periods ending after June 15, 2009
and did not impact the Company’s consolidated financial statements. The Company
evaluated for subsequent events through March 15, 2010, the issuance date of the
Company’s financial statements.
55
ACCELERATED ACQUISITIONS V,
INC.
(A
Development Stage Company)
BALANCE
SHEETS
September
30,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents,
|
$
|
18,616
|
$
|
116
|
||||
TOTAL
ASSETS
|
$
|
18,616
|
$
|
116
|
||||
LIABILITIES
AND STOCKHOLDER’S DEFICIT
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accrued
expenses
|
$
|
10,100
|
$
|
4,442
|
||||
Shareholder
advances
|
18,239
|
1,722
|
||||||
TOTAL
LIABILITIES
|
$
|
28,339
|
$
|
6,164
|
||||
STOCKHOLDER’SDEFICIT:
|
||||||||
Preferred
stock, $.0001 par value; 10,000,000 shares authorized; none issued and
outstanding
|
-
|
|||||||
Common
stock, $.0001 par value; 100,000,000 shares authorized; 34,391,506 and
5,000,000 shares issued and outstanding at September 30, 2010 and December
31, 2009, respectively
|
3,639
|
500
|
||||||
Additional
paid-in capital
|
21,998
|
3,500
|
||||||
Deficit
accumulated during the development stage
|
(32,223
|
)
|
(10,048
|
)
|
||||
Stock
subscription receivable
|
(3,137
|
)
|
-
|
|||||
TOTAL
STOCKHOLDER’S DEFICIT
|
(9,723
|
)
|
(6,048
|
)
|
||||
TOTAL
LIABILITIES AND STOCKHOLDER’S DEFICIT
|
$
|
18,616
|
$
|
116
|
See
notes to unaudited financial statements.
56
ACCELERATED ACQUISITIONS V,
INC.
(A
Development Stage Company)
Statements
of Operations (Unaudited)
Three
Months ended
September
30
|
Nine
Months ended
September
30,
|
Cumulative
from
April
29, 2008
(Inception)
to
September 30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
Revenues
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Operating
Expenses
|
||||||||||||||||||||
General
and administrative
|
17,600 | 1,304 | 22,175 | 5,089 | 32,223 | |||||||||||||||
Net
Operating Expenses
|
17,600 | 1,304 | 22,175 | 5,089 | 32,223 | |||||||||||||||
Net
Loss
|
$ | (17,600 | ) | $ | (1,304 | ) | $ | (22,175 | ) | $ | (5,089 | ) | $ | (32,223 | ) | |||||
PER
SHARE INFORMATION:
|
||||||||||||||||||||
Basic
and diluted, net loss per share
|
$ | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) | $ | (.00 | ) | ||||||||
Basic
and diluted, weighted average shares outstanding
|
34,391,405 | 5,000,000 | 24,366,987 | 5,000,000 |
See
notes to unaudited financial statements.
57
ACCELERATED ACQUISITIONS V,
INC.
(A
Development Stage Company)
STATEMENTS OF STOCKHOLDER’S
DEFICIENCY
|
Preferred Stock
|
Common Stock
|
Additional
Paid-in
|
(Deficit)
Accumulated
During the
Development
|
Stockholder’s
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Equity
|
|||||||||||||||||||||
BALANCE
AT INCEPTION (APRIL 29, 2008)
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||
Issuance
of common stock
|
-
|
-
|
5,000,000
|
500
|
3,500
|
-
|
4,000
|
|||||||||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
-
|
-
|
(3,256
|
)
|
(3,256
|
)
|
|||||||||||||||||||
BALANCE
AT DECEMBER 31, 2008
|
-
|
$
|
-
|
5,000,000
|
$
|
500
|
$
|
3,500
|
$
|
(3,256
|
)
|
$
|
744
|
|||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
-
|
-
|
(6,792
|
)
|
(6,792
|
)
|
|||||||||||||||||||
BALANCE
AT DECEMBER 31, 2009
|
-
|
$
|
-
|
5,000,000
|
$
|
500
|
$
|
3,500
|
$
|
(10,048
|
)
|
$
|
(6,048
|
)
|
||||||||||||||
Sale
of common stock
|
-
|
-
|
28,126,045
|
2,815
|
18,498
|
-
|
21,313
|
|||||||||||||||||||||
Cancellation
of common stock
|
-
|
-
|
(1,979,760
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Issuance
of common stock on exercise of stock option
|
-
|
-
|
3,235,971
|
324
|
-
|
-
|
324
|
|||||||||||||||||||||
Stock
subscription receivable
|
-
|
-
|
-
|
-
|
-
|
-
|
(3,137
|
)
|
||||||||||||||||||||
Net
(loss)
|
-
|
-
|
-
|
-
|
-
|
(22,175
|
)
|
(22,175
|
)
|
|||||||||||||||||||
BALANCE
AT SEPTEMBER 30, 2010
|
-
|
-
|
34,391,506
|
3,639
|
21,998
|
(32,223
|
)
|
(9,723
|
)
|
See
notes to unaudited financial statements
58
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
STATEMENTS
OF CASH FLOWS
(unaudited)
For the
Nine
Months
ended
September 30,
2010 |
For the
Nine
Months
ended
September 30,
2009 |
For the
Cumulative
Period from
Inception
(April 29, 2008)
through
September 30,
2010 |
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
(loss)
|
$ | (22,175 | ) | $ | (5,089 | ) | $ | (28,248 | ) | |||
Increase
(decrease) in accounts payable
|
5,658 | 3,539 | 10,100 | |||||||||
Net
cash used in operating activities
|
(16,517 | ) | (1,550 | ) | (18,148 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from issuance of common stock
|
18,500 | - | 22,500 | |||||||||
Shareholder
advances
|
16,517 | 1,550 | 14,264 | |||||||||
Net
cash provided by financing activities
|
35,017 | 1,550 | 36,764 | |||||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
18,500 | - | 18,616 | |||||||||
Cash
and cash equivalents at beginning of period
|
116 | 2,000 | - | |||||||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 18,616 | $ | 2,000 | $ | 18,616 | ||||||
SUPPLEMENTAL
DISCLOSURES:
|
||||||||||||
Cash
paid during the period:
|
||||||||||||
Income
taxes
|
- | - | - | |||||||||
Interest
expense
|
- | - | - | |||||||||
Noncash
investing and financing activities:
|
||||||||||||
Proceeds
from the issuance of common stock
|
3,137 | - | 3,137 | |||||||||
Cancellation
of common shares
|
(198 | ) | - | (198 | ) | |||||||
Additional
paid-in capital
|
198 | - | 198 | |||||||||
Stock
subscription receivable
|
(3,137 | ) | - | (3,137 | ) |
See
notes to unaudited financial statements.
59
ACCELERATED ACQUISITIONS V,
INC.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER 30,
2010
NOTE 1
|
-
|
ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
|
(a) Organization
and Business:
Accelerated
Acquisitions V, 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 and share issuances and the
launch of the Company’s initial pooled purchase transaction which it expects to
complete in the 1st quarter of 2011.
(b) Basis
of Presentation
The
accompanying Interim Financial Statements are unaudited and have been prepared
in accordance with accounting principles generally accepted for interim
financial statement presentation and in accordance with the instructions to
Regulations S-K. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States for complete financial statement presentation. In the
opinion of management, all adjustments for a fair statement of the results and
operations and financial position for the interim periods presented have been
included. All such adjustments are of a normal recurring nature. The
financial information should be read in conjunction with the Financial
Statements and notes thereto included in the Company’s Form 10-K Annual Report
for the year ended December 31, 2009 and the Company’s Registration Statement on
Form 10. The September 30, 2010 consolidated financial statements presented
herein may not be indicative of the results of the Company for the year ending
December 31, 2010.
(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 $32,223, used cash from operations of $18,148 since its inception, and has
negative working capital of $9,723 at September 30, 2010. 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. Management’s plan includes obtaining additional funds by
equity financing 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.
60
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
NOTES TO FINANCIAL
STATEMENTS
SEPTEMBER 30,
2010
NOTE 2
|
-
|
INCOME
TAXES:
|
The
Company has incurred net operating losses since inception. The Company has not
reflected any benefit of such net operating loss carry forward in the financial
statements.
In
assessing the realization of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income.
Based on
the level of historical taxable losses and projections of future taxable income
(losses) over the periods in which the deferred tax assets can be realized,
management currently believes that it is more likely than not that the Company
will not realize the benefits of these deductible differences. Accordingly, the
Company has provided a valuation allowance against the gross deferred tax assets
as follows:
September 30, 2010
|
December 31, 2009
|
|||||||
Gross
deferred tax assets
|
9,667 | 3,400 | ||||||
Valuation
allowance
|
(9,667 | ) | (3,400 | ) | ||||
Net
deferred tax asset
|
— | — |
The
federal net operating loss carryforwards expire in the tax years 2028 and
2029.
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 September
30. 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.
NOTE 3
|
-
|
RECENT
ACCOUNTING PRONOUNCEMENTS:
|
In
February 2010, the FASB issued amended guidance on subsequent events to
alleviate potential conflicts between FASB guidance and SEC requirements. Under
this amended guidance, SEC filers are no longer required to disclose the date
through which subsequent events have been evaluated in originally issued and
revised financial statements. This guidance was effective immediately and we
adopted these new requirements for the period ended September 30, 2010. The
adoption of this guidance did not have a material impact on our financial
statements.
61
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
NOTES TO FINANCIAL
STATEMENTS
SEPTEMBER 30,
2010
NOTE 3
|
-
|
RECENT
ACCOUNTING PRONOUNCEMENTS (CON’T):
|
In
February 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various Topics.
This amendment eliminated inconsistencies and outdated provisions and provided
the needed clarifications to various topics within Topic 815. The
amendments are effective for the first reporting period (including interim
periods) beginning after issuance (February 2, 2010), except for certain
amendments. The amendments to the guidance on accounting for income
taxes in a reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. For those reorganizations reflected in interim financial
statements issued before the amendments in this Update are effective,
retrospective application is required. The clarifications of the
guidance on the embedded derivates and hedging (Subtopic 815-15) are effective
for fiscal years beginning after December 15, 2009, and should be applied to
existing contracts (hybrid instruments) containing embedded derivative features
at the date of adoption. The Company does not expect the provisions
of ASU 2010-08 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-07 (ASU 2010-07), Not-for-Profit Entities (Topic 958):
Not-for-Profit Entities: Mergers and Acquisitions. This amendment to
Topic 958 has occurred as a result of the issuance of FAS 164. The
Company does not expect the provisions of ASU 2010-07 to have a material effect
on the financial position, results of operations or cash flows of the
Company.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures
about fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual
reporting periods beginning after December 15, 2009, except for the disclosures
about purchases, sales, issuances, and settlements in the roll forward of
activity in Level 3 fair value measurements. Those disclosures are
effective for fiscal years beginning after December 15, 2010, and for interim
periods within those fiscal years. Early adoption is
permitted. The Company does not expect the provisions of ASU 2010-06
to have a material effect on the financial position, results of operations or
cash flows of the Company.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic
718). This standard codifies EITF Topic D-110 Escrowed Share
Arrangements and the Presumption of Compensation.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical
Corrections to SEC Paragraphs.
62
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
NOTES TO FINANCIAL
STATEMENTS
SEPTEMBER 30,
2010
NOTE 3
|
-
|
RECENT
ACCOUNTING PRONOUNCEMENTS (CON’T):
|
In
January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of a
Subsidiary. This amendment to Topic 810 clarifies, but does not
change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will
be required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities
that have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December 15,
2009. The amendments should be applied retrospectively to the first period that
an entity adopted FAS 160. The Company does not expect the provisions
of ASU 2010-02 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In
January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic
505): Accounting for Distributions to Shareholders with Components of Stock and
Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit on
the amount of cash that will be distributed is not a stock dividend for purposes
of applying Topics 505 and 260. Effective for interim and annual periods ending
on or after December 15, 2009, and would be applied on a retrospective
basis. The Company does not expect the provisions of ASU 2010-01 to
have a material effect on the financial position, results of operations or cash
flows of the Company.
NOTE 4
|
-
|
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 their 5,000,000 shares of the Company’s
common stock par value $0.0001 for cancellation. This
transaction was consummated on April 2, 2010. (See Form 8-K filed with the U.S.
Securities and Exchange Commission on April 2, 2010.)
On April
15, 2010, the Company entered into a Licensing Agreement (“Licensing Agreement”)
with Demand Pooling Global Services, LLC (“Licensor”) 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.
63
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
NOTES TO FINANCIAL
STATEMENTS
SEPTEMBER 30,
2010
NOTE 4
|
-
|
MATERIAL
CONTRACTS (CON’T):
|
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 terminated upon the occurrence of events of default specified in the
License 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 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.
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).
64
ACCELERATED ACQUISITIONS V,
INC.
A
Development Stage Company
NOTES TO FINANCIAL
STATEMENTS
SEPTEMBER 30,
2010
NOTE 4
|
-
|
MATERIAL
CONTRACTS (CON’T):
|
The
Company intends to calculate the Black-Scholes valuation of the option and to
commence amortization of that value in the quarter which the services, as
described in the agreement, are first rendered. As of the date of
these financial statements, no such services have been
provided.
Pursuant
to the terms of the Agreement, AVP will not receive any compensation if the
milestones specified in the Consulting Services Agreement are not met and the
option shares are subject to repurchase by the Company at the original $0.0001
sale price.
The
shares issued pursuant to the AVP Option are subject to a repurchase option
granted to the company to repurchase the shares at a price of $0.0001 per share
in the event the Company fails to complete funding as detailed in the agreement
subject to the following milestones:
|
·
|
Milestone
1 – Company’s right
of repurchase will lapse with respect to 70% of the shares upon securing
$5 million in available cash from
funding;
|
|
·
|
Milestone
2 - Company’s right
of repurchase will lapse with respect to 20% of the Shares upon securing
$10 million in available cash (inclusive of any amounts attributable to
Milestone 1);
|
|
·
|
Milestone
3 - Company’s right
of repurchase will lapse with respect to the remaining 10% of the Shares
upon securing $15 million in available cash (inclusive of any amounts
attributable to Milestones 1 or
2);
|
and (b)
cash compensation at a rate of $87,500 per month. The payment of such
compensation is subject to the company’s achievement of certain designated
milestones, specifically, cash compensation of $350,000 is due consultant upon
the achievement of Milestone 1, $350,000 upon the achievement of Milestone 2,
and $350,000 upon the achievement of Milestone 3. Upon achieving each Milestone,
the cash compensation is to be paid to consultant in the amount then due at the
rate of $87,500 per month. The total cash compensation to be received by the
consultant is not to exceed $1,050,000 unless the Company receives an amount of
funding in excess of the amount specified in Milestone 3. If the Company
receives equity or debt financing that is an amount less than Milestone 1, in
between any of the above Milestones or greater than the above Milestones, the
cash compensation earned by the Consultant under this Agreement will be prorated
according to the above Milestones.
The
Company also has the option to make a lump sum payment to AVP in lieu of all
amounts payable thereunder.
NOTE 4
|
-
|
SUBSEQUENT
EVENTS:
|
The
Company has evaluated subsequent events from the balance sheet date through
November 15, 2010 (the date the financial statements were available to be
issued) and has determined that there are no events to
disclose.
65
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other Expenses of Issuance and
Distribution
Although
we will receive no proceeds from the sale of shares pursuant to this prospectus,
we have agreed to bear the costs and expenses of the registration of the shares.
Our expenses in connection with the issuance and distribution of the securities
being registered are estimated as follows:
Nature of expense
|
Amount
|
|||
SEC
Registration fee
|
$
|
60
|
||
Accounting
fees and expenses
|
$
|
2,000
|
||
Legal
fees and expenses
|
$
|
10,000
|
||
Printing
expenses
|
$
|
1,000
|
||
Miscellaneous
|
$
|
440
|
||
TOTAL
|
$
|
13,500
|
All
amounts are estimates other than the Securities and Exchange Commission’s
registration fee. We are paying all expenses of the offering listed above
through advances to the Company by the Company’s founding shareholders. No
portion of these expenses will be borne by the selling shareholders. The selling
shareholders, however, will pay any other expenses incurred in selling their
common stock, including any brokerage commissions or costs of sale.
Messrs
Aland, Kelly and Neher have orally agreed with the Company to advance these
costs and expenses of this offering to the Company, as required, on the basis of
an interest-free loan payable on demand. The Company confirms
that the foregoing description of these oral agreements accurately reflects such
agreements. This loan will be reflected on the Company’s financials
for the 4th quarter
of 2010.
Item
14. Indemnification of Directors and
Officers
Pursuant
to our Certificate of Incorporation and By-Laws, we may indemnify an officer or
director who is made a party to any proceeding, including a lawsuit, because of
his position, if he acted in good faith and in a manner he reasonably believed
to be in our best interest. In certain cases, we may advance expenses incurred
in defending any such proceeding. To the extent that the officer or director is
successful on the merits in any such proceeding as to which such person is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The prior
discussion of indemnification in this paragraph is intended to be to the fullest
extent permitted by the laws of the State of Delaware.
Indemnification
for liabilities arising under the Securities Act of 1933, as amended, may be
permitted to directors or officers pursuant to the foregoing provisions.
However, we are informed that, in the opinion of the Commission, such
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
Item
15. Recent Sales of Unregistered Securities
Below is
a list of securities sold by us since inception which were not registered under
the Securities Act.
66
Date of Sale
|
Title of
Security
|
Amount of Securities
Sold
|
Consideration
|
|||||||||
Accelerated
Venture Partners LLC (1)
|
April
28, 2009
|
Common Stock
|
3,020,240 | $ | 4,000 | |||||||
Richard
Aland (2)
|
April
2, 2010
|
Common
Stock
|
23,907,138 | 2,391 | ||||||||
Donald
Kelly (3)
|
April
2, 2010
|
Common
Stock
|
4,218,907 | 422 | ||||||||
Accelerated
Venture Partners LLC (4)
|
April
29, 2010
|
Common
Stock
|
3,235,971 | 626 | ||||||||
Baker,
Angus
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Camp,
James
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Carreker,
III, John
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Carrington,
Richard
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Cosgriff,
Carolyn
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Daniel,
Glenn
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Dorsey,
Timothy
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Evans,
Carole
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Fischer,
Quinn
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Fragle,
Ronald
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Giambalvo,
Jerome
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Green,
Montgomery
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Gundy,
Richard
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Harberg,
Joseph
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Harkness,
Glenda
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Hartline,
Gregg
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Hogue,
IV, Henley Custis
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Holoman,
Richard
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Johnson,
David
|
July
2, 2010
|
Common
Stock
|
150 | 300 | ||||||||
Johnson,
Lyn
|
July
2, 2010
|
Common
Stock
|
150 | 300 | ||||||||
Mailman,
Josh
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
McElhiney,
Steven
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Meyers,
Dawn
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Meyers,
III, Gerald
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Miesch,
Michael
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Morrogh,
Richard
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Pope,
Patrick
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Roberts,
Richard
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Rogers,
Richard
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Scnittiker,
Reed
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Shearer,
Robert
|
July
2, 2010
|
Common
Stock
|
250 | 500 | ||||||||
Shirah,
Al
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Shirah,
Andrew
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Shirah,
Nancy
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Shirah,
Philip
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Shirah,
Tova
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Shirah,
Victoria
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Silverman,
Norman
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Sleeman,
Donald
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Smith,
Pelham
|
July
2, 2010
|
Common
Stock
|
100 | 200 | ||||||||
Steudtner,
Richard Todd
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Toranto,
Richard
|
July
2, 2010
|
Common
Stock
|
200 | 400 | ||||||||
Wall,
Tim
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Watkins,
James
|
July
2, 2010
|
Common
Stock
|
300 | 600 | ||||||||
Wolfe,
Margaret
|
July
2, 2010
|
Common
Stock
|
300 | 600 |
|
(1)
|
Accelerated Venture Partners, LLC
originally acquired 5,000,000 shares and subsequently tendered 1,979,760
of such shares for
cancellation.
|
|
(2)
|
Richard Aland subsequently made
gifts of an aggregate of 136,000 of such shares to an aggregate of 20
donees.
|
67
|
(3)
|
Donald Kelly subsequently made
gifts of 110,000 of such shares to an aggregate of five
donees
|
|
(4)
|
Shares
acquired on exercise of option in Consulting Services
Agreement
|
The
securities issued in the abovementioned transactions were issued in connection
with private placements exempt from the registration requirements of Section 5
of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(2)
of that Act and Rule 506 of Regulation D. Pursuant to the guidelines
of Rule 506, on July 2, 2010 the Company sold shares to a total of 35 investors,
16 of whom were “accredited investors” and 19 of whom are “sophisticated”
investors.
Item
16. Exhibits
Exhibit No.
|
Description
|
|
3(i)
|
Articles
of Incorporation of ACCELERATED AQUISITIONS V, INC. (previously filed with
Form 10-12G on August 28, 2008
|
|
3(ii)
|
Bylaws
of ACCELERATED AQUISITIONS V, INC. (previously filed with Form 10-12G on
August 28, 2008
|
|
3(iii)*
|
Draft
Certificate of Amendment of Certificate of
Incorporation
|
|
5.1*
|
Legal
Opinion of Legal Robert Diener, Esq.
|
|
10.1
|
License
Agreement between ACCELERATED AQUISITIONS V, INC. and DEMAND POOLING
GLOBAL SERVICES, LLC (previously filed with Form S-1/A on October 25,
2010)
|
|
10.2
|
Consulting
Agreement between ACCELERATED ACQUISITIONS V, INC. and ACCELERATED VENTURE
PARTNERS, LLC (previously filed with Form S-1/A on October 25,
2010)
|
|
10.3*
|
Letter
dated March 25, 2010 from Accelerated Venture Partners, LLC to Accelerated
Acquisitions V, Inc.
|
|
23.1*
|
Legal
Opinion of Legal Robert Diener, Esq. (included with Exhibit
5.1)
|
|
23.2*
|
Consent
of Independent Auditors
|
* Included
herewith
Item
17. Undertakings
The
undersigned registrant hereby undertakes:
1.
To file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
|
i.
|
To include any prospectus
required by section 10(a)(3) of the Securities Act of
1933;
|
|
ii.
|
To reflect in the prospectus any
facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
|
|
iii.
|
To include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; Provided however,
That:
|
68
(A)
Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the
registration statement is on Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement; and
(B)
Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if
the registration statement is on Form S-3 or Form F-3 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is part of
the registration statement.
2. That,
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
4. If the
registrant is a foreign private issuer, to file a post-effective amendment to
the registration statement to include any financial statements required by Item
8.A. of Form 20-F at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Act need not be furnished, provided that the registrant
includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information
necessary to ensure that all other information in the prospectus is at least as
current as the date of those financial statements. Notwithstanding the
foregoing, with respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if such
financial statements and information are contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Form F-3.
5.
That, for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
|
i.
|
If the registrant is relying on
Rule 430B:
|
A.
|
Each prospectus filed by the
registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part
of and included in the registration statement;
and
|
B.
|
Each prospectus required to be
filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a
registration statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act
of 1933 shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is first
used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in
Rule 430B, for liability purposes of the issuer and any person that
is at that date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the securities in
the registration statement to which that prospectus relates, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of contract
of sale prior to such effective date, supersede or modify any statement
that was made in the registration statement or prospectus that was part of
the registration statement or made in any such document immediately prior
to such effective date;
or
|
69
|
ii.
|
If the registrant is subject to
Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made
in a document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to
such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of
first use.
|
6. That,
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities: The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of
the following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
|
i.
|
Any preliminary prospectus or
prospectus of the undersigned registrant relating to the offering required
to be filed pursuant to Rule
424;
|
|
ii.
|
Any free writing prospectus
relating to the offering prepared by or on behalf of the undersigned
registrant or used or referred to by the undersigned
registrant;
|
|
iii.
|
The portion of any other free
writing prospectus relating to the offering containing material
information about the undersigned registrant or its securities provided by
or on behalf of the undersigned registrant;
and
|
|
iv.
|
Any other communication that is
an offer in the offering made by the undersigned registrant to the
purchaser.
|
70
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Dallas in the State of
Texas on the 25th day of January, 2011.
|
ACCELERATED
ACQUISITIONS V, INC.
|
|
By:
|
/s/
Richard Aland
|
|
Richard
Aland
Chief
Executive Officer and Director
|
||
By:
|
/s/
Donald Kelly
|
|
:
|
Donald
Kelly
President
and Director
|
In
accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following person in the capacities and
date stated.
/s/
Richard Aland
|
January
25, 2011
|
|
Richard
Aland
Chief
Executive Officer and Director (Principal
Executive
Officer, Principal Financial Officer,
Principal
Accounting Officer)
|
||
/s/
Donald Kelly
|
January
25, 2011
|
|
Donald
Kelly
President
and Director
|
71
EXHIBIT
LIST
Exhibit No.
|
Description
|
|
3(i)
|
Articles
of Incorporation of ACCELERATED Acquisitions V, INC. (previously filed
with Form 10-12G on August 28, 2008
|
|
3(ii)
|
Bylaws
of ACCELERATED AQUISITIONS V, INC. (previously filed with Form 10-12G on
August 28, 2008
|
|
3(iii)*
|
Draft
Certificate of Amendment of Certificate of
Incorporation
|
|
5.1*
|
Legal
Opinion of Legal Robert Diener, Esq.
|
|
10.1
|
License
Agreement between ACCELERATED AQUISITIONS V, INC. and DEMAND POOLING
GLOBAL SERVICES, LLC (previously filed with Form S-1/A on
October 25, 2010)
|
|
10.2
|
Consulting
Agreement between ACCELERATED ACQUISITIONS V, INC. and ACCELERATED VENTURE
PARTNERS, LLC (previously filed with Form S-1/A on October 25,
2010)
|
|
10.3*
|
Letter
dated March 25, 2010 from Accelerated Venture Partners, LLC to Accelerated
Acquisitions V, Inc.
|
|
23.1*
|
Legal
Opinion of Legal Robert Diener, Esq. (included with Exhibit
5.1)
|
|
23.2*
|
Consent
of Independent
Auditors
|
* Included
herewith
72