UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1-U
CURRENT REPORT PURSUANT TO REGULATION A
Date of Report (Date of earliest event reported): June 30, 2016
POMM, INC.
(Exact name of issuer as specified in its charter)
| Nevada | 81-0795779 | |
State of other jurisdiction of | (I.R.S. Employer Identification No.) |
985 Citadel Drive N.E. Atlanta GA 30324
(Full mailing address of principal executive offices)
1-917-300-0651
(Issuer’s telephone number, including area code)
Title of each class of securities issued pursuant to Regulation A:
Common Stock, no par value
Item 9. Other Events (Quarterly Financials)
The prupose of this current report on Form 1-U for June 30, 2016, filed with the Securities and Exchange Commission on October 7, 2016 (the “Form 1-U”), is to provide the following unaudited consolidated financial information for the Six months ended June 30, 2016, for Pomm, Inc. (“we,” “us” or “our”) (the “Pomm”).
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Since our incorporation in July 15, 2015, we have been engaged primarily in developing the design of the various POMM devices and obtaining loans and funds from investors to fund the continuous marketing of our Reg. A+ offering. We are considered to be a development stage company, since we are devoting substantially all of our efforts to establishing our business and planned principal operations have not commenced. We completed the initial design for the Pomm case for the Smartphones as well as our business model.
Cash investment has totaled $3.4 million net of related expenses, from incorporation through June 30, 2016 and loans have totaled $1.1 million from incorporation through June 30, 2016.
Operating Results
We have not yet generated any revenues and do not anticipate doing so until mid-2017.
Six Months Ended June 30, 2016 Compared to June 30, 2015. Operating expenses for the Six months ended June 30, 2016 decreased by 30% over the comparable 2015 period, due to reduced general and administrative costs above the increase in engineering, research and development.
Debt Costs:
Our net loss for the nine months ended June 30, 2016 was $0.6 million, as compared to $0.8 million for the comparable 2015 period, a decrease of 30%. Our accumulated deficit was $5.3 million at June 30, 2016.
Liquidity and Capital Resources
As of June 30, 2016, we had cash of $0.1 million and a working capital deficit of $0.5 million, as compared to cash of $0.04 million and a working capital deficit of $0.2 million at June 30, 2016.
On the 27th of January 2016, we filed an offering statement pursuant to Regulation A of the Securities Act of 1933 with the Securities and Exchange Commission. Pursuant to which we are offering of 802,065 shares of common stock on a “best efforts” basis, at a price of $12.47 per share. On September 30, 2016, we had zero of deferred offering costs, which will be offset against offering proceeds upon the completion of the offering or expensed upon abandonment of the offering. The offering is still open as of now, with a total of 7,700 shares sold as of today for gross proceeds of $96,118.76. No reselling shareholder has currently resold shares.
Future Financing
To date, $3.4 million has been invested in phone case engineering and development. Funding from our Regulation A offering will be used to Manufacture and Market it. We are pursuing multiple options for such funding, rather than relying on one source. We believe funding will come from a combination of short-term and long-term sources and from one or more of the sources discussed below, as well as more traditional sources (not discussed), such as venture debt arrangements and capital leasing on equipment.
POMM INC, and OS have completed the first stage by submitting an application for a loan of approximately $50,000 with EXO Opportunity Fund LLC, the proceeds of which would be used to invest in marketing only.
| 2 |
POMM, INC.
(AN NEVADA CORPORATION)
BALANCE SHEETS
JUNE 30, 2016 AND DECEMBER 31, 2015
THOUSAND$
| Unaudited | ||||||||
| June 30, 2016 | December 31, 2015 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 110 | $ | 250 | ||||
| Restricted cash held in escrow | ||||||||
| Prepaid expenses and other current assets | 144 | 136 | ||||||
| Total Current Assets | 254 | 386 | ||||||
| Restricted cash held for customer deposits | ||||||||
| Machinery and equipment, net | 8 | 9 | ||||||
| Facility under capital sublease, net | ||||||||
| Other assets | ||||||||
| Deferred offering costs | ||||||||
| Total Assets | $ | 262 | $ | 395 | ||||
| Liabilities and Stockholders' Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 1135 | $ | 975 | ||||
| Customer deposits | ||||||||
| Advances due to related party | ||||||||
| Interest payable, current portion | ||||||||
| Note payable, net of discount | ||||||||
| Notes payable due to related party, net of discount | 1008 | 749 | ||||||
| Total Current Liabilities | 2143 | 1724 | ||||||
| Customer deposits, net of current portion | ||||||||
| Interest payable, net of current portion | ||||||||
| Convertible notes payable, net of discount | - | |||||||
| Notes payable, net of current portion and discount | ||||||||
| Notes payable due to related party, net of discount | - | |||||||
| Capital sublease obligation | ||||||||
| Total Liabilities | 2143 | 1724 | ||||||
| Commitments and contingencies (see notes to financial statements) | ||||||||
| Stockholders' deficit: | ||||||||
| Common stock, $0.00001 par value, 500,000,000 shares authorized, 1,452,521 shares issued and outstanding | 3384 | 1862 | ||||||
| Convertible share options | - | |||||||
| Accumulated deficit | (5265 | ) | (4437 | ) | ||||
| Total stockholders' deficit | (1881 | ) | (890 | ) | ||||
| Total Liabilities and Stockholders Deficit | $ | 262 | $ | 395 | ||||
See accompanying notes to financial statements
| 3 |
POMM, INC.
(AN NEVADA CORPORATION)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015 (UNAUDITED)
THOUSAND$
| Unaudited | ||||||||
| September 30, 2016 | September 30, 2015 | |||||||
| Costs and Expenses: | ||||||||
| Research and development, net | 337 | 441 | ||||||
| General and administrative | 442 | 107 | ||||||
| Loss from operations | (779 | ) | (548 | ) | ||||
| Other income (expense): | ||||||||
| Other income | ||||||||
| Interest expense | (49 | ) | (27 | ) | ||||
| Other expense | - | - | ||||||
| Total other income and expenses | (49 | ) | (27 | ) | ||||
| Net Loss | $ | (828 | ) | $ | (575 | ) | ||
| Weighted-average number of common shares outstanding | 1,650,240 | 1,272,386 | ||||||
| Basic loss per share: | $ | (0.5 | ) | $ | (0.45 | ) | ||
See accompanying notes to financial statements
| 4 |
POMM, INC.
(AN NEVADA CORPORATION)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015 (UNAUDITED)
THOUSAND$
| Six months ended June 30, | ||||||||
| 2016 | 2015 | |||||||
| Unaudited | ||||||||
| Cash flows from operating activities: | ||||||||
| Loss for the period | (828 | ) | (575 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | 341 | 343 | ||||||
| Net cash used in operating activities | (487 | ) | (232 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net cash provided by (used in) investing activities | - | - | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from long-term loans from banks | 130 | - | ||||||
| Proceeds from Shareholder`s loan | 264 | 254 | ||||||
| Repayment of Shareholder's loans | (17 | ) | (36 | ) | ||||
| Proceeds from short-term loans | - | 35 | ||||||
| Repayment of short-term loans | (35 | ) | - | |||||
| Issuance of ordinary shares | 5 | - | ||||||
| Net cash provided by financing activities | 347 | 253 | ||||||
| Increase (decrease) in cash and cash equivalents | (140 | ) | 21 | |||||
| Cash and cash equivalents at the beginning of the period | 250 | 21 | ||||||
| Cash and cash equivalents at end of the period | 110 | 42 | ||||||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||
| Six months ended June 30, | ||||||||
| 2016 | 2015 | |||||||
| Unaudited | ||||||||
| Share-based payment | 255 | 301 | ||||||
| Decrease (Increase) in other receivable | (8 | ) | 25 | |||||
| Increase (Decrease) in trade accounts payable | 33 | (2 | ) | |||||
| Increase (Decrease) in other accounts payable | 49 | (51 | ) | |||||
| Increase (Decrease) in employee accruals | (25 | ) | 4 | |||||
| Increase (Decrease) in severance pay | 8 | 68 | ||||||
| Depreciation expense | 1 | 1 | ||||||
| Finance expense, net | 28 | (3 | ) | |||||
| 341 | 343 | |||||||
See accompanying notes to financial statements
| 5 |
POMM, INC.
(AN NEVADA CORPORATION)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2016 (UNAUDITED)
The financial information presented should be read in conjunction with the entity's latest annual audited financial statements to obtain full disclosure information.
NOTE 1 BASIS OF PRESENTATION
The accompanying financial statements have been prepared by the Company, without audit, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the consolidated financial statements reflect all adjustments (of a normal and recurring nature) which are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for the entire fiscal year.
NOTE 2 ORGANIZATION AND BUSINESS ACTIVITIES
The company started manufacturing the first POMM devices and send it to its Subsidiary (OS) Europeans partners for feedback and comments. The Subsidiary reports that the EU fund project its involved is about to finish and the expected date is the 18th of November. The company expects to receive by its Subsidiary another 168K USD at the end of Q1 2017.
NOTE 3 PROPERTY AND EQUIPMENT
IP Status of OSH (OS New Horizon) – As of May 1st. 2016
| File Ref | Application No. | PATENT No. | Registration Date | Status | Action Due/Status | |||||||
| App 1. | 2799-US | 12/849,971 | 8,401,875 | 19-Mar-13 | Registered | Renewal due 19-Aug-16 | ||||||
| 2862-EP | 11752936.2 | Pending | Response to Last Office Action filed March-2016; Last Annual Renewal 10-Mar-16 | |||||||||
| 2863-IL | 2011/051002 | 22175 | Registered | Valid till 2030 | ||||||||
| 2864-CA | 2,791,348 | Pending | Before Examination last Annual Renewal 10-Mar-16 | |||||||||
| 2865-CN | 201180014831.9 | Allowed | Notification of Patent Grant 09-March-16 | |||||||||
| 2866-IN | 2376/MUMNP/2012 | Pending | Request for Examination Filed Mar 14, 2016 Awaiting Examination | |||||||||
| 2867-JP | 2012-556636 | 5659246 | 05-12-2014 | Registered | Registration Fees paid | |||||||
| 2868-KR | 10-2012-7026679 | Pending | Examination Requested 10-Mar-16 | |||||||||
| 2869-RU | 2012137172 | 2558617 | 06-07-2015 | Registered | Valid till 10-03-2031 | |||||||
| 2884-HK | 13106579.1 | Pending | Allowance expected Based on China Allowance | |||||||||
| App 2. | 2973-US | 14795108 | US Utility | US National Filed 9 -July 2015 | ||||||||
| App 3. | 2951- PC | 62/108,614 | PCT Application | PCT Application Filed on 28-Jan-16, very good examination | ||||||||
| App 4. | 2998-PC | 62/117,463 | PCT Application | PCT Application Filed on 18-Feb-16, very good examination | ||||||||
| App 5. | 2986-USP | 62/237,682 | Provisional Application | Filed on 10-Jun-15 |
| 1. | A SECURED PERSONAL DATA HANDLING AND MANAGEMENT SYSTEM |
| 2. | A METHOD AND A DEVICE TO DETECT AND MANAGE NON LEGITIMATE USE OR THEFT OF A MOBILE COMPUTERIZED DEVICE |
| 3. | A MOBILE DEVICE AND A SYSTEM TO SECURELY STORE AND MANAGE USER'S HEALTH RECORDS USING INTERNET AND CELLULAR NETWORKS |
| 4. | A MOBILE DEVICE AND SYSTEMS TO SECURELY REMOTELY ACCESS, MANAGE AND STORE AN ENTERPRISE'S DATA, USING EMPLOYEES' ADD-ON MOBILE DEVICES |
| 5. | MOBILE DEVICE AND METHOD PROVIDING SECURE DATA ACCESS, MANAGEMENT AND STORAGE OF MASS PERSONAL DATA |
Italic Green: Patents Granted
| 6 |
POMM, INC.
(AN NEVADA CORPORATION)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2016 UNAUDITED
NOTE 4 CUSTOMER DEPOSITS
No Revenues yet from customers
NOTE 5 DEFERRED OFFERING COSTS
No defer costs
NOTE 6 LONG TERM DEBT
One Long term loan of $22,000 USD
| 7 |
POMM, INC.
(AN NEVADA CORPORATION)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2016 UNAUDITED
NOTE 7 COMMITMENTS AND CONTINGENCIES
No commitments and Contingencies
NOTE 8 TRANSACTIONS AND BALANCES WITH INTERESTED AND RELATED PARTIES
A. Transactions:
| As of June 30, | |||||||||
| 2016 | 2015 | ||||||||
| USD in thousands | |||||||||
| Payroll and related expenses | 24 | 21 | |||||||
| Professional services | 30 | 15 | |||||||
| 54 | 36 | ||||||||
B. Balances:
| As of | |||||||||
June 30, 2016 | December 31, 2015 | ||||||||
| USD in thousands | |||||||||
| Employees and payroll accruals | 1 | 3 | |||||||
| Other accounts payable | 155 | 125 | |||||||
| Severance pay | 384 | 384 | |||||||
| Shareholder's loan (see also Note 6) | 1,008 | 749 | |||||||
| 1,550 | 1,261 | ||||||||
NOTE 9 SUBSEQUENT EVENTS
| 1. | On June 29, 2016 the Company signed an update to the employment agreement with it's CEO David Freidenberg. The updated included the following terms: |
| a. | David shall be entitled to an annual bonus in the amount of 10% of the Company's net profit. |
| b. | In case of any Exit Event (as defined in the agreement), and subject to a suitable resolution by the company David shall be entitled to a special bonus, that equals to 4% of the proceeds actually received by the Company or by the shareholders of the Company (as the case may be) in the course of such Exit Event. |
| c. | As of September 29, 2016, David shall be entitled to an additional 50,000 options fully vested. |
| 2. | The Company on October 5, 2016 entered into a loan agreement with EXO Opportunity Fund, LLC for $50,000 to retain a marketing Company performing the Regulation A offering. |
| 8 |
SIGNATURES
Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
POMM, INC. (Exact name of issuer as specified in its charter) | ||
| By: | /s/ David Freidenberg | |
| David Freidenberg | ||
| Chief Executive Officer | ||
| By: | /s/ Rachel Koren | |
| Chief Financial Officer | ||
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