<DOCUMENT>
<TYPE>10KSB
<SEQUENCE>1
<FILENAME>planaksb07.txt
<DESCRIPTION>PLAN A PROMOTIONS, INC. 10KSB 2007
<TEXT>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended September 30, 2007
-----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File No.
00-51638
Plan A Promotions, Inc.
------------------------
(Name of Small Business Issuer as specified in its charter)
UTAH 16-1689008
---- -----------
(State or other jurisdiction of (Employer I.D. No.)
organization)
3010 Lost Wood Drive
Sandy, Utah 84092
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(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 231-1121
Securities Registered under Section 12(b) of the Exchange Act: None
Name of Each Exchange on Which Registered: None
Securities Registered under Section 12(g) of the Exchange Act: $0.01 par value
common stock
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Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
--- ---
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes X No
--- ---
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State Issuer's revenues for its most recent fiscal year: September 30, 2007
- $230
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
December 1, 2007 - $6,615. There are approximately 220,500 shares of common
voting stock of the Company not held by affiliates. Because there has been no
"public market" for the Company's common stock since inception, the Company has
arbitrarily valued these shares at the price of its most recent offering price
of $.03 per share.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
None, Not applicable.
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
DECEMBER 17, 2007
1,200,000
2
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DOCUMENTS INCORPORATED BY REFERENCE
A description of "Documents Incorporated by Reference" is contained in Part
III, Item 13 of this Report.
Transitional Small Business Issuer Format Yes X No
--- ---
PART I
Item 1. Description of Business.
------------------------
ORGANIZATION, CHARTER AMENDMENTS AND GENERAL HISTORY
Plan A Promotions, Inc. (the "Company" or "Plan A Promotions") was
incorporated under the laws of the State of Utah on December 12, 2003, as
"Lostwood Professional Services, Inc." On July 21, 2004, the Company changed its
name to "Plan A Promotions, Inc.," Copies of the Company's Articles of
Incorporation, Amendments to the Articles of Incorporation and Bylaws are
attached hereto and are incorporated herein by reference. See the Index to
Exhibits, Part III, Item 1.
The Company's operations during the year ended September 30, 2007, resulted
in $230 in revenue. The Company's cost of goods for the year ended September 30,
2007, was $142 and general and administrative expenses were $17,002, resulting
in an operating loss of ($16,914), and a net loss of $($18,256) after accounting
for interest expenses and franchise taxes.
The independent auditor's report issued in connection with the audited
financial statements of the Company for the period ended September 30, 2007,
expresses "substantial doubt about its ability to continue as a going concern,"
due to the Company's status as a development stage company and its lack of
significant operations.
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BUSINESS OF ISSUER
-------------------
BUSINESS OPERATIONS
Plan A Promotions is a value-added reseller, specializing in promotional
merchandise and apparel, employee recognition and incentive programs, business
gifts and marketing expertise. The Company provides its targeted customers-which
include corporations, non-profit organizations, schools, and education
associations with over 500,000 promotional and marketing products.
Plan A provides customers access to a variety of promotional products
through its relationships with wholesale distributors. The Company's
distributors offer a wide array of products, manufactured throughout the world.
A promotional product is any item imprinted with a logo or slogan and given out
to promote a company, organization, product, service, special achievement, or
event. T-shirts, mugs, pens, and key tags are popular examples. Plan A believes
promotional products are more effective than other marketing channels, in that
they often have a practical use and value for the recipient, thus increasing
their effectiveness as advertising and branding tools. Plan A's clients leverage
these products to strengthen their brand, image, customer and employee
relations, incentive programs and advertising campaigns.
The Company also provides customers with art design and consultation
services through its relationships with several art and graphic design houses,
in which the Company outsources its design work. These firms operate as
independent consultants for Plan A Promotions and charge the Company directly
for their services. The Company then marks up the design charges, and
incorporates them into the client's overall merchandising package. The Company
does not have any standing contractual relationships with any design firms;
however, existing relationships between the Company and many different graphic
design houses will allow the provision of these outsourced services to any of
the Company's customers.
Currently the Company's primary market is within the greater Salt Lake
City, Utah area. However, through the Company's website, the Company markets its
products and services nationwide. The Company has targeted its marketing efforts
particularly on small businesses, non-profit organizations and school
associations.
<PAGE>
MARKETING AND ADVERTISING
The Company markets its products and services through word of mouth and the
Company's website. The Company markets to new customers through a direct mail
campaign. The Company acquired a list of the major employers in Utah with less
than 1,000 full-time employees, from the Salt Lake City Chamber of Commerce. The
list includes approximately 600 profit companies with division or corporate
headquarters based in Utah. The Company also acquired a list, from the Salt Lake
City Chamber of Commerce, of approximately 100 non-profit organizations based in
Utah, with less than 1,000 employees. The Company has also compiled a mailing
list of all public high schools in Salt Lake City, targeting them with a direct
mail campaign and other marketing efforts. The Company also makes an effort to
attract and develop business by networking with its existing clients, and
promoting its services through word of mouth advertising.
DELIVERY AND TRANSPORTATION
The Company's suppliers can ship either directly to the client or to the
Company itself. Typically if the product is a finished product, the suppliers
ship the product directly to the client, and the Company sends a separate
invoice for the order. If the product needs screen printing, embroidery or other
finishing services, the Company delivers the product to the client upon
completion of the order. The Company has access to a variety of ground and air
shipping companies and can typically deliver the product to the client within a
few days.
PROMOTIONAL MERCHANDISE INDUSTRY
According to the Promotional Products Association International (a
non-profit association dedicated to professionals of the promotional products
industry), worldwide sales of promotional products in 2004 were approximately
$17.3 billion. Roughly 30% of overall industry sales were related to wearable
merchandise, including T-shirts, golf-shirts, aprons, uniforms, blazers, caps,
hats, headbands, jackets, neckwear, and footwear. Advertising Specialty
Institute estimates that more than 3,000 manufacturers sell their products to
nearly 20,000 value-added resellers similar to Plan A Promotions
COMPETITION
The promotional merchandise industry is highly competitive, ranging from
small start-up merchandise companies, like Plan A Promotions, to large,
well-established companies which specialize in catering to large national or
multi-national corporations. Plan A Promotions business plan positions the
Company as a supplier of products and services to the industry's smaller
customers. The Company's plan is to target small businesses and
organizations(1,000 employees or less), rather than attempt to compete for the
business of large corporations.
The Company has numerous competitors with similar marketing plans, access
to similar distributors, and similar products. The Company believes that its
success relies on its ability to establish a returning customer base by
providing quality products and a unparalleled customer service. Success is also
dependent upon expanding the Company's customer base through it marketing
efforts.
5
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EMPLOYEES
The Company's officers and Directors are the only employees. Alycia
Anthony, President and Director, is responsible for the daily operations of the
Company and Nicholl Heieren, Vice President and Director and Sharlene Doolin,
Secretary and Director, oversee strategy and development of the Company's
business plan. Ms. Anthony has been responsible for establishing the Company's
operations. She has been responsible for obtaining the appropriate licenses,
developing the marketing plan, developing relationships with distributors,
service companies and the Company's customers. The Company has been accruing Ms.
Anthony $250 per month for compensation of services performed, but in a Board of
Directors meeting held February 26, 2007, this salary was suspended effective
January 1, 2007 until the Company produces a positive operating cash flow. Ms.
Heieren and Ms. Doolin will receive compensation based on services performed.
The Company's compensation plan may change depending on the success and
profitability of its operations.
PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS
OR LABOR CONTRACTS
Other than possibly applying for a trademark on the Company's name, Plan A
Promotions, Inc., the Company does not foresee filing any applications for
patents or licenses. The Company also does not plan to execute any franchises,
concession or royalty agreements or labor contracts.
EFFECT OF EXISTING OR PROBABLE GOVERNMENTAL REGULATIONS ON THE BUSINESS
The Company is not currently subject to many direct government regulation,
other than the securities laws and the regulations thereunder applicable to all
publicly owned companies and the laws and regulations applicable to general
businesses. It is possible that certain laws and regulations may be adopted at
the local, state, national and international level that could effect the
Company's operations. Changes to such laws could create uncertainty in the
marketplace which could reduce demand for the Company's products or increase the
cost of doing business as a result of costs of litigation or a variety of other
such costs, or could in some other manner have a material adverse effect on the
Company's business, financial condition, results of operations and prospects. If
any such law or regulation is adopted it could limit the Company's ability to
operate and could force the business operations to cease, which would have a
significantly negative effect on the shareholder's investment.
6
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COMPLIANCE WITH ENVIRONMENTAL LAWS (FEDERAL, STATE AND LOCAL)
Due to the nature of the Company's operations, the Company does not believe
that compliance with environmental laws will have a material impact on the
Company or its operations.
REPORTING REQUIREMENTS
As an issuer whose securities will be registered under Section 12(g) of the
Exchange Act, the Company will be required to file periodic reports with the
Securities and Exchange Commission (the "Commission"). In addition, the National
Association of Securities Dealers, Inc. (the "NASD"), requires that all issuers
maintaining quotations of their securities on the OTC Bulletin Board file
periodic reports under the Exchange Act.
The public may read and copy any materials that the Company files with the
Commission at the Commission's Public Reference Room at 450 Fifth Street N.W.,
Washington, DC 20549. The public may obtain information on the operation of the
Public Reference Room by calling the Commission at 1-800-SEC-0330 or 1-
202-942-8090. The Commission maintains an internet site that contains reports,
proxy and information statements and other information regarding issuers that
file electronically with the Commission. The address of that site is
http://www.sec.gov.
SMALL BUSINESS ISSUER
The Commission's integrated disclosure system for small business issuers,
which was adopted in Release No. 34-30968 and became effective as of August 13,
1992, substantially modified the information and financial requirements of a
"Small Business Issuer," defined to be an issuer that has revenues of less than
$25,000,000; is a U.S. or Canadian issuer; is not an investment company; and if
a majority-owned subsidiary, the parent is also a small business issuer;
provided, however, an entity is not a small business issuer if it has a public
float (the aggregate market value of the issuer's outstanding securities held by
non-affiliates) of $25,000,000 or more. The Company is deemed to be a "small
business issuer."
7
<PAGE>
SARBANES-OXLEY ACT
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act imposes a wide variety of new regulatory
requirements on publicly-held companies and their insiders. Many of these
requirements will affect us. For example:
* Our chief executive officer and chief financial officer must now certify
the accuracy of all of our periodic reports that contain financial
statements;
* Our periodic reports must disclose our conclusions about the
effectiveness of our disclosure controls and procedures; and
* We may not make any loan to any director or executive officer and we may
not materially modify any existing loans.
The Sarbanes-Oxley Act has required us to review our current procedures and
policies to determine whether they comply with the Sarbanes-Oxley Act and the
new regulations promulgated thereunder. We will continue to monitor our
compliance with all future regulations that are adopted under the Sarbanes-
Oxley Act and will take whatever actions are necessary to ensure that we are in
compliance.
RISK FACTORS
------------
The Company's present and intended business operations are highly
speculative and involve substantial risks. Only investors who can bear the risk
of losing their entire investment should consider buying our shares. All risk
factors that you should consider are the following:
THE COMPANY IS IN AN EARLY STAGE OF DEVELOPMENT
Plan A Promotions is a development stage company. The Company has limited
assets and has had limited material operations since inception. The Company can
provide no assurance that its current and proposed business will produce any
material revenues or that will ever operate on a profitable basis.
THE COMPANY MAY EXPERIENCE LOSSES ASSOCIATED WITH START-UP
The Company has limited operating history. The Company will also experience
expenses related to the initial start-up of the business, including marketing,
selling, general and administrative expenses. The Company expects that its
initial and ongoing business expenses will result in losses early in its
development.
8
<PAGE>
THE COMPANY MAY EXPERIENCE FLUCTUATIONS IN OPERATING RESULTS
The Company's operating results are likely to fluctuate in the future as a
result of a variety of factors. Some of these factors may include economic
conditions; the amount and timing of the receipt of new business; the success of
the Company's marketing strategy; capital expenditures and other costs relating
to the expansion of operations; the ability of the Company to develop contacts
and establish a network and customer base within the promotional merchandise
industry; the cost of advertising and related media. Due to all of the foregoing
factors, the Company's operating results in any given quarter may fall below
expectations. In such an event, any future trading price of the Company's common
stock would likely be materially and adversely affected.
THE COMPANY'S BUSINESS MODEL MAY CHANGE OR EVOLVE
The Company and its prospects must be considered in light of the risks, as
identified in the Risk Factors section of this filing, expenses and difficulties
frequently encountered by companies in an early stage of development. Such risks
for the Company include, but are not limited to, an evolving business model. To
address these risks the Company must, among other things, develop strong
business practices and management activities, develop the strength and quality
of its operations, maximize the value delivered to clients, develop and enhance
the Company's brand through marketing and networking initiatives. There can be
no assurance that the Company will be successful in meeting these challenges and
addressing such risks and the failure to do so could have a material adverse
effect on the Company's business, financial condition, result of operations and
prospects.
THE INDUSTRY THAT THE COMPANY PARTICIPATES HAS RELATIVELY LOW BARRIERS TO
ENTRY AND THE COMPANY MAY FACE SIGNIFICANT COMPETITION
There are relatively low barriers to entry into the Company's industry.
Because firms such as the Company rely on the skill, knowledge and relationships
of their personnel and their ability to market and create brand awareness, they
have no patented technology that would preclude or inhibit competitors from
entering their markets. The Company started with limited capital and anyone
interested in entering the Company's business could also start with limited
capital. In addition, any large or small promotional merchandise company that
seeks to enter the industry could initiate a marketing strategy and seek to
obtain clients in the same or similar manner used by the Company, or could
obtain clients through numerous other channels.
The Company is likely to face additional competition from new entrants into
the market in the future because there are relatively low barriers to entry. The
Company will face competition from existing, established promotional
merchandising companies, in addition to the competition faced by new entrants
into the market. There can be no assurance that existing or future competitors
will not develop or offer services that provide significant performance, price,
creative or other advantages over those offered by the Company, which could have
a material adverse effect on its business, financial condition, results of
operations and prospects.
9
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AUDITOR'S OPINION EXPRESSES DOUBT ABOUT THE COMPANY'S ABILITY TO CONTINUE
AS A "GOING CONCERN"
The independent auditor's report issued in connection with the audited
financial statements of the Company for the period ended September 30, 2007,
expresses "substantial doubt about its ability to continue as a going concern,"
due to the Company's status as a development stage company and its lack of
significant operations. If the Company is unable to develop its operations, the
Company may have to cease to exist, which would be detrimental to the value of
the Company's common stock. The Company can make no assurances that its business
operations will develop and provide the Company with significant cash to
continue operations.
THE COMPANY MAY NEED FUTURE CAPITAL AND MAY NOT BE ABLE TO OBTAIN
ADDITIONAL FINANCING
The Company may need future capital and may not be able to obtain
additional financing. If additional funds are needed, funds may be raised as
either debt or equity, but management does not have any plans or relationships
currently in place to raise such funds. There can be no assurance that such
additional funding, if needed, will be available on terms acceptable to the
Company, or at all. The Company may be required to raise additional funds
through public or private financing, strategic relationships or other
arrangements. There can be no assurance that such additional funding, if needed,
will be available on terms acceptable to the Company, or at all. If adequate
funds are not available on acceptable terms, the Company may be unable to
develop or enhance its services and products, take advantage of future
opportunities or respond to competitive pressures, any of which could have a
material adverse effect on its business, financial condition, results of
operations and prospects.
FUTURE CAPITAL RAISED THROUGH EQUITY FINANCING MAY BE DILUTIVE TO
STOCKHOLDERS
Any additional equity financing may be dilutive to stockholders. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the stockholders of the Company will be reduced,
stockholders may experience additional dilution in net book value per share and
such equity securities may have rights, preferences or privileges senior to
those of the holder of the Company's common stock.
FUTURE DEBT FINANCING MAY INVOLVE RESTRICTIVE COVENANTS THAT MAY LIMIT THE
COMPANY'S OPERATING FLEXIBILITY
Furthermore, a debt financing transaction, if available, may involve
restrictive covenants, which may limit the Company's operating flexibility with
respect to certain business matters. If additional funds are raised through debt
financing, the debt holders may require the Company to make certain agreements,
covenants, which could limit or prohibit the Company from taking specific
actions, such as establishing a limit on further debt, a limit on dividends,
limit on sale of assets, or specific collateral requirements. Furthermore, if
the Company raises funds through debt financing, the Company would also become
subject to interest and principal payment obligations. In either case, if the
Company was unable to fulfill either the covenants or the financial obligations,
the Company may risk defaulting on the loan, whereby ownership of the firm's
assets could be transferred from the shareholders to the debt holders.
10
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EXECUTIVE OFFICERS HAVE LIMITED LONG-TERM EXPERIENCE WITHIN THE PROMOTIONAL
MERCHANDISE INDUSTRY
Other than Ms. Doolin's experience in the promotional merchandise industry,
the Company's officers have no specific experience in the development and
marketing of promotional materials. This lack of experience may make it more
difficult to establish the contacts and relationships necessary to successfully
market products and services. The Company is dependent to a great extent upon
the experience and abilities of Sharlene Doolin, the Company's Secretary and
Director. Ms. Doolin has over fifteen years of merchandising experience, working
with non-profit organizations and school associations. The loss of services of
Ms. Doolin could have a material adverse effect on the Company's business,
financial condition or results of operation.
THE COMPANY'S SUCCESS IS DEPENDENT ON MANAGEMENT
The Company's success is dependent, in large part, on the active
participation of the Executive Officers. The loss of their services would
materially adversely effect the Company's business and future success. The
Company does not have employment agreements with its Executive Officers. The
Company does not have key-man life insurance in effect at the present time.
THE COMPANY MAY FACE POTENTIAL LIABILITY TO CLIENTS
The Company intends to market and distribute products and services. Its
failure or inability to properly acquire and deliver its products and services
to clients could impact the Company's business reputation or result in a claim
for substantial damages, regardless of its responsibility for such failure. The
Company does not have an insurance policy covering claims of this kind, and such
claims could adversely affect the Company's business, results of operations and
financial conditions.
EXECUTIVE OFFICERS AND MAJORITY SHAREHOLDERS MAINTAIN SIGNIFICANT CONTROL
OVER THE COMPANY AND ITS ASSETS
Plan A Promotions' Executive Officers maintain control over the Company's
board of directors and also control the Company's business operations and
policies. In addition, eight shareholders, excluding the Company's Executive
Officers, control 75.3% of the Company's issued and outstanding common stock. As
a result, these majority shareholders will be able to exercise significant
influence over all matters requiring stockholder approval, including the
election of directors and approval of significant corporate transactions. Such
concentration of ownership may also have the effect of delaying or preventing a
change in control of the Company. See Part I, Item 4.
11
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THE COMPANY IS UNLIKELY TO PAY DIVIDENDS
It is unlikely that the Company will pay dividends on its common stock,
resulting in an investor's only return on an investment in the Company's common
stock being the appreciation of the per share price. The Company can make no
assurances that the Company's common stock will ever appreciate.
THE COMPANY'S SECURITIES MAY HAVE A LIMITED MARKET DUE TO RULES ASSOCIATED
WITH PENNY STOCKS
The Company's stock differs from many stocks, in that it is a "penny
stock." The Securities and Exchange Commission has adopted a number of rules to
regulate "penny stocks." These rules include, but are not limited to, Rules
3a5l-l, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities
and Exchange Act of 1934, as amended.
Because our securities constitute "penny stock" within the meaning of the
rules, the rules would apply to us and our securities. The rules may further
affect the ability of owners of our stock to sell their securities in any market
that may develop for them. There may be a limited market for penny stocks, due
to the regulatory burdens on broker-dealers. The market among dealers may not be
active. Investors in penny stock often are unable to sell stock back to the
dealer that sold them the stock. The mark-ups or commissions charged by the
broker-dealers may be greater than any profit a seller may make. Because of
large dealer spreads, investors may be unable to sell the stock immediately back
to the dealer at the same price the dealer sold the stock to the investor. In
some cases, the stock may fall quickly in value. Investors may be unable to reap
any profit from any sale of the stock, if they can sell it at all.
Stockholders should be aware that, according to the Securities and Exchange
Commission Release No. 34- 29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. These patterns include:
- Control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer;
- Manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;
- "Boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;
- Excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
- The wholesale dumping of the same securities by promoters and broker-
dealers after prices have been manipulated to a desired level, along
with the inevitable collapse of those prices with consequent investor
losses.
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Furthermore, the "penny stock" designation may adversely affect the
development of any public market for the Company's shares of common stock or, if
such a market develops, its continuation. Broker-dealers are required to
personally determine whether an investment in "penny stock" is suitable for
customers.
Penny stocks are securities (i) with a price of less than five dollars per
share; (ii) that are not traded on a "recognized" national exchange; (iii) whose
prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed
stocks must still meet requirement (i) above); or (iv) of an issuer with net
tangible assets less than $2,000,000 (if the issuer has been in continuous
operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average annual revenues of less than
$6,000,000 for the last three years.
Section 15(g) of the Exchange Act, and Rule 15g-2 of the Commission require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."
Rule 15g-9 of the Commission requires broker-dealers in penny stocks to
approve the account of any investor for transactions in such stocks before
selling any penny stock to that investor. This procedure requires the
broker-dealer to (i) obtain from the investor information concerning his or her
financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for the Company's stockholders to
resell their shares to third parties or to otherwise dispose of them.
13
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NO ASSURANCE CAN BE GIVEN THAT ANY MARKET FOR THE COMPANY'S COMMON STOCK
WILL DEVELOP OR BE MAINTAINED AND IF A MARKET DEVELOPS THE SALE OF
"UNREGISTERED" AND "RESTRICTED" SHARES BY MEMBERS OR MANAGEMENT MAY HAVE AN
ADVERSE EFFECT ON THE MARKET FOR THESE SHARES
Prior to the Company's organization, the Company authorized and
subsequently issued 126,000 shares of common stock to three individuals pursuant
to a Pre-organization Subscription Agreement. The shares were issued for cash at
$0.02 per share for a total of $2,520.
Following the Company's organization, it conducted an offering of 1,074,000
shares of common stock at a price of $0.03 per share. This offering was
conducted under Rule 504 of Regulation D of the Securities and Exchange
Commission, and the applicable provisions of Rule 144-14-25s of the Utah
Division of Securities, which provides for sales of securities by public
solicitation to "accredited" investors. The offering was subsequently closed
January 28, 2004, with the Company having received gross proceeds of $32,217.
14
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No assurance can be given that any market for the Company's common stock
will develop or be maintained. If a public market ever develops in the future,
the sale of "unregistered" and "restricted" shares of common stock pursuant to
Rule 144 of the Securities and Exchange Commission by members of management or
others may have a substantial adverse impact on any such market. The following
table discloses the date that the Company's issued shares of common stock are
available for resale:
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
ALYCIA D. ANTHONY* 12/03 60,000 $ 1,200
JAMES P. DOOLIN* 12/03 60,000 $ 1,200
NICHOLL R. HEIEREN* 12/03 6,000 $ 120
PURCHASERS UNDER** 01/04 1,074,000 $ 32,220
RULE 504 OFFERING
* The 126,000 shares that the Company issued in December, 2003, are
eligible for resale pursuant to Rule 144 of the Securities and Exchange
Commission. These persons have satisfied the "holding period" under Rule
144.
** The 1,074,000 shares that the Company issued in January 28, 2004, in
connection with the Offering are eligible for resale pursuant to Rule 144
of the Securities and Exchange Commission.
Item 2. Description of Property.
-----------------------
The Company's office is located at 3010 Lost Wood Drive, Sandy, Utah 84092.
At some point in the future, depending on the Company's growth and demanded
space requirements, the Company will look to lease a larger office. Anticipated
rent including utilities will range between $500 and $750 per month.
15
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Item 3. Legal Proceedings.
------------------
The Company is not a party to any pending legal proceeding. To the
knowledge of management, no federal, state or local governmental agency is
presently contemplating any proceeding against the Company. No director,
executive officer or affiliate of the Company or owner of record or beneficially
of more than five percent of the Company's common stock is a party adverse to
the Company or has a material interest adverse to the Company in any proceeding.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
During the fourth quarter of the year ended September 30, 2006, no matter
was submitted to a vote of the Company's securities holders, whether through the
solicitation of proxies or otherwise.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information.
-------------------
The Company shares are traded on the OTC Bulletin Board, the symbol is
PAPM. The Company shares have been quoted on the OTC Bulletin Board since
December 20, 2006. The following quotes are through the most recent year end:
CLOSING BID CLOSING ASK
HIGH LOW HIGH LOW
DEC 20, 2006 .22 .22 0 0
THRU
SEP 30, 2007 .25 .25 0 0
Holders
-------
The number of record holders of the Company's common stock as of the date
of this Report is approximately 94.
Dividends.
----------
The Company has not declared any cash dividends with respect to its common
stock and does not intend to declare dividends in the foreseeable future. The
future dividend policy of the Company cannot be ascertained with any certainty.
There are no material restrictions limiting, or that are likely to limit, the
Company's ability to pay dividends on its common stock.
16
<PAGE>
Sales of "Unregistered" and "Restricted"
Securities Over The Past Three Years.
-------------------------------------
Prior to the Company's organization on December 12, 2003, the Company
authorized and subsequently issued 126,000 shares of common stock to three
individuals pursuant to a Pre-organization Subscription Agreement. The shares
were issued for cash at $0.02 per share for a total of $2,520.
Following the Company's organization, it conducted an offering of 1,074,000
shares of common stock at a price of $0.03 per share. This offering was
conducted under Rule 504 of Regulation D of the Securities and Exchange
Commission, and the applicable provisions of Rule 144-14-25s of the Utah
Division of Securities, which provides for sales of securities by public
solicitation to "accredited" investors. The offering was subsequently closed
January 28, 2004, with the Company having received gross proceeds of $32,217.
For Further information see the following table: "Common Stock"
COMMON STOCK
Date Number of Aggregate
Name Acquired Shares Consideration
---- -------- --------- -------------
Alycia D. Anthony* 12/03 60,000 $ 1,200
James P. Doolin* 12/03 60,000 $ 1,200
Nicholl R. Heieren* 12/03 6,000 $ 120
PURCHASERS UNDER** 01/04 1,074,000 $ 32,220
RULE 504 OFFERING
* Alycia D. Anthony, James P. Doolin and Nicholl R. Heieren were all directors
and Executive Officers of the Company at the time of purchase, and as such had
access to all material information regarding the Company prior to the offer or
sale of these securities. James P. Doolin resigned as an officer and director of
the Company on July 20, 2004. The directors and Executive Officers are
"accredited investor." The offers and sales of these securities are believed to
have been exempt from the registration requirements of Section 5 of the
Securities Act of 1933, as amended, pursuant to Sections 3(b) and/or 4(2)
thereof, and from similar applicable states securities laws, rules and
regulations exempting the offer and sale of these securities by available state
exemptions from registration.
** Purchasers of the Company's securities under the Rule 504 offering were
"accredited" investors. Purchasers of the Company's securities under the Rule
504 offering were "accredited" investors. All purchasers had access to all
material information regarding the Company.
There have been no other sales of the Company's unregistered securities.
17
<PAGE>
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
PLAN OF OPERATION
The Company's plan of operation for the next 12 months is to continue with
its current business operations. However, the company has accumulated losses
since inception and has not been able to generate profits from operations.
Operating capital has been raised through the Company's shareholders.
Furthermore, the Company has not been able to generate positive cash flow from
operations since inception. These factors raise substantial doubt the Company's
ability to continue as a going concern.
RESULTS OF OPERATIONS
The Company has not generated a profit since inception. The Company
generated a net loss of ($18,256) on revenue of $230 for the fiscal year ended
September 30, 2007 and a net loss of ($21,682) on revenue of $3,770 for the
fiscal year ended September 30, 2006. The decrease in the loss during the fiscal
year ended September 30, 2007, was primarily attributable to the decrease in
general and administrative expenses, including salary, professional and legal
expenses, from $21,463 for the fiscal year ended September 30, 2006, to $17,002
for the year ended September 30, 2007.
Revenues decreased from $3,770 for the fiscal year ended September 30,
2006, to $230 for the fiscal year ended September 30, 2007. The decrease in the
Company's revenue was a result of a decrease in demand from existing customers
and a decrease in the Company's marketing efforts.
The Company's plans for operations are to continue seeking opportunities
within the promotional merchandising market. If the Company determines the
potential for revenue growth in a sector of the promotional merchandising market
the Company will develop and implement a marketing strategy to further develop
the Company's operations.
18
<PAGE>
LIQUIDITY
During the fiscal years ended September 30, 2006, and September 30, 2007,
the Company generated revenues of $3,770 and $230 respectively; there were no
accounts receivable at September 30, 2006, or September 30, 2007. Furthermore
the Company had no inventory at the end of fiscal year September 30, 2006, or
September 30, 2007.
For the next twelve months, cash flow from operations is not anticipated to
cover the Company's general expenses of operation. As additional funds are
needed to cover general expenses of operation the Company's management will
advance the Company monies not to exceed $20,000, as loans to the Company. The
loan will be on terms no less favorable to the Company than would be available
from a commercial lender in an arm's length transaction. If the Company needs
funds in excess of $20,000, it will be up to the Company's management to raise
such monies. These funds may be raised as either debt or equity, but management
does not have any plans or relationships currently in place to raise such funds.
The Company has completed the following four transactions to finance its
operation:
1) On December 12, 2003, the Company issued 126,000 shares of common stock
at $0.02 per share for total proceeds to the Company of $2,520. The shares
were issued pursuant to a Pre-organization Subscription Agreement
2) On January 28, 2004, the Company completed an offering of 1,074,000
shares of common stock at a price of $0.03 per share. This offering was
conducted under Rule 504 of Regulation D of the Securities and Exchange
Commission, and the applicable provisions of Rule 144-14-25s of the Utah
Division of Securities, which provides for sales of securities by public
solicitation to "accredited" investors. The offering was subsequently
closed and the Company received gross proceeds of $32,217.
3) During the year ended September 30, 2007 a shareholder loaned the
Company $10,000 on an unsecured debenture. The Note accrues interest at 10%
per annum and matures on February 15, 2009. The Company has accrued
interest of $583 on this note.
4) During the year ended September 30, 2007 a shareholder loaned the
Company $5,000 on an unsecured debenture. The Note accrues interest at 10%
per annum and matures on March 1, 2009. The Company has accrued interest of
$292 on this note.
19
<PAGE>
Item 7. Financial Statements.
---------------------
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Financial Statements and Report of
Independent Registered Public Accounting Firm
September 30, 2007
20
<PAGE>
<TABLE>
<CAPTION>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
TABLE OF CONTENTS
Page
<S> <C>
Report of Independent Registered Public Accounting Firm 22
Balance Sheet -- September 30, 2007 23
Statements of Operations for the years ended September 30, 2007 and 2006 and
for the period from Inception [December 12, 2003] through September 30,2007 24
Statements of Stockholders' Equity for the period from Inception
[December 12, 2003] through September 30, 2007 25
Statements of Cash Flows for the years ended September 30, 2007 and 2006 and
for the period from Inception [December 12, 2003] through September 30, 2007 26
Notes to Financial Statements 27 - 31
</TABLE>
21
<PAGE>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
Plan A Promotions, Inc. [a development stage company]
We have audited the accompanying balance sheet of Plan A Promotions [ fka
Lostwood Professional Services, Inc.] (a development stage company) as of
September 30, 2007, and the related statements of operations, stockholders'
deficit, and cash flows for the years ended September 30, 2007 and 2006 and for
the period from Inception [December 12, 2003] through September 30, 2007. 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 audit.
We conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit 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 purposes
of expressing an opinion on the effectiveness of the Company's internal controls
over financial reporting. Accordingly, we express no such opinion. An audit
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
audit provides 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 Plan A Promotions, Inc. [a
development stage company] as of September 30, 2007, and the results of
operations and cash flows for the years ended September 30, 2007 and 2006 and
for the period from Inception [December 12, 2003] through September 30, 2007,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 2 to the
financial statements, the Company has accumulated losses from operations,
minimal assets, and a net working capital deficiency that raise substantial
doubt about its ability to continue as a going concern. Management plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
/S/MANTYLA MCREYNOLDS, LLC
Mantyla McReynolds, LLC
Salt Lake City, Utah
November 26, 2007
22
<PAGE>
<TABLE>
<CAPTION>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Balance Sheet
September 30, 2007
ASSETS
--------------
--------------
Current Assets
<S> <C>
Cash 8,056
--------------
--------------
Total Current Assets 8,056
Property and Equipment (net) [Note 5] 2,160
--------------
--------------
Total Assets $ 10,216
==============
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities
Current Liabilities
Accounts Payable $ 3,889
Accrued Liabilities 801
Related Party Payable - Note 6 8.076
--------------
Total Current Liabilities 12,766
Long-Term Liabilities
Loans from Shareholder - Note 6 $ 15,000
Accrued Interest Payable - Shareholders - Note 6 875
--------------
Total Long-Term Liaibilities 15,875
--------------
Total Liabilities $ 28,641
--------------
Stockholders' Deficit [Note 4]
Preferred stock; par value ($0.01);
Authorized 5,000,000 shares
none issued or outstanding 0
Common stock; par value ($0.01);
authorized 50,000,000 shares; issued
and outstanding 1,200,000 12,000
Paid in Capital 24,237
Deficit accumulated during development stage (54,662)
--------------
--------------
Total Stockholders' Deficit $ (18,425)
--------------
--------------
Total Liabilities and Stockholders' Deficit $ 10,216
==============
See accompanying notes to financial statements.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Statements of Operations
For the years ended September 30, 2007 and 2006 and for the period
from Inception [December 12, 2003] through September 30, 2007
From Inception
[12/12/2003]
through
2007 2006 9/30/2007
--------------- --------------- ---------------
<S> <C> <C> <C>
General Revenues $ 230 $ 1,424 $ 9,694
Revenues from Related Parties - Note 6 0 2,346 2,346
--------------- --------------- ---------------
Total Revenues $ 230 $ 3,770 $ 12,040
General Cost of Goods Sold 142 1,391 8,394
Cost of Goods Sold from Related Parties - Note 6 0 2,101 2,101
--------------- --------------- ---------------
Total Cost of Goods Sold 142 3,492 10,495
--------------- --------------- ---------------
Gross Profit 88 278 1,545
General and Administrative Expenses (17,002) (21,463) (53,890)
--------------- --------------- ---------------
Net Loss from Operations (16,914) (21,185) (52,345)
--------------- --------------- ---------------
Other Income/(Expense):
Interest Expense (1,242) (397) (1,917)
--------------- --------------- ---------------
Total Other Income/(Expense) (1,242) (397) (1,917)
--------------- --------------- ---------------
Net Loss Before Income Taxes (18,156) (21,582) (54,262)
Provision for Income/Franchise Taxes (100) (100) (400)
--------------- --------------- ---------------
--------------- --------------- ---------------
Net Loss from Operations $ (18,256) $ (21,682) $ (54,662)
=============== =============== ===============
Loss Per Share - Basic and Diluted $ (0.02) $ (0.02) $ (0.05)
=============== =============== ===============
Weighted Average Shares Outstanding 1,200,000 1,200,000 1,192,269
=============== =============== ===============
See accompanying notes to financial statements.
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Statements of Stockholders' Equity/(Deficit)
For the years ended September 30, 2007 and 2006 and for the period
from Inception [December 12, 2003] through September 30, 2007
Common Common Additional Accumulated Net
Shares Stock Paid in Deficit Stockholders'
Capital Deficit
---------- ------------ -------------- ------------- --------------
---------- ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 12, 2003 0 0 0 0 0
Common stock issued for cash 1,200,000 12,000 22,737 0 34,737
Property contributed by shareholder 0 0 1,500 0 1,500
Net loss from inception on December 0 0 0 (3,400) (3,400)
12, 2003 through September 30, 2004
---------- ------------ -------------- ------------- --------------
---------- ------------ -------------- ------------- --------------
Balance, September 30, 2004 1,200,000 12,000 24,237 (3,400) 32,837
Net loss for the year ended
September 30, 2005 0 0 0 (11,324) (11,324)
---------- ------------ -------------- ------------- --------------
---------- ------------ -------------- ------------- --------------
Balance, September 30, 2005 1,200,000 12,000 24,237 (14,724) 21,513
Net loss for the year ended
September 30, 2006 0 0 0 (21,682) (21,682)
---------- ------------ -------------- ------------- --------------
---------- ------------ -------------- ------------- --------------
Balance, September 30, 2006 1,200,000 12,000 24,237 (36,406) (169)
Net loss for the year ended
September 30, 2007 0 0 0 (18,256) (18,256)
---------- ------------ -------------- ------------- --------------
---------- ------------ -------------- ------------- --------------
Balance, September 30, 2007 1,200,000 12,000 24,237 (54,662) (18,425)
========== ============ ============== ============= ==============
See accompanying notes to financial statements.
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Statements of Cash Flows
For the years ended September 30, 2007 and 2006 and for the period
from Inception [December 12, 2003] through September 30, 2007
From Inception
[12/12/2003]
through
2007 2006 9/30/2007
---------------- --------------- ----------------
Cash Flows From Operating Activities
<S> <C> <C> <C>
Net Loss $ (18,256)$ (21,682)$ (54,662)
Adjustments to reconcile net (loss) to
Net cash from operating activities:
Depreciation 2,947 2,337 6,746
Increase/(decrease) in current liabilities
Accounts Payable/Accrued Liabilities 42 8,463 12,766
Increase/(decrease) in accrued interest 875 0 875
---------------- --------------- ----------------
Net Cash From Operating Activities (14,392) (10,882) (34,275)
Cash Flows From Investing Activities
Purchase of Equipment 0 (4,584) (7,406)
---------------- --------------- ----------------
Net Cash Used by Investing Activities 0 (4,584) (7,406)
Cash Flows From Financing Activities
Stock issued for cash 0 0 34,737
Loans from Shareholders 15,000 0 15,000
---------------- --------------- ----------------
Net Cash From Financing Activities 15,000 0 49,737
Net Change in Cash 608 (15,466) 8,056
Beginning Cash Balance 7,448 22,914 0
---------------- --------------- ----------------
---------------- --------------- ----------------
Ending Cash Balance $ 8,056 $ 7,448 $ 8,056
================ =============== ================
Supplemental Disclosure Information
Cash paid during year for interest $ 0 $ 423 $ 423
Cash paid during year for income taxes $ 100 $ 200 $ 300
Property contributed by shareholder $ 0 $ 0 $ 1,500
See accompanying notes to financial statements.
</TABLE>
26
<PAGE>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Notes to Financial Statements
September 30, 2007
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
Plan A Promotions, Inc. (Company) was founded December 12, 2003 as Lostwood
Professional Services, Inc. and was organized to engage in the business of
producing and selling promotional merchandise. The Company was incorporated
under the laws of the State of Utah.
The Company is considered to be in the development stage as defined in
Financial Accounting Standards Board Statement No. 7. It has yet to
commence full-scale operations and it continues to develop its planned
principle operations.
The financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of
America. The following summarizes the more significant of such policies:
(b) Income Taxes
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences in net property and equipment and
bad debt reserve for financial and income tax reporting.
The Company complies with the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement], "Accounting for Income
Taxes." The Statement requires an asset and liability approach for
financial accounting and reporting for income taxes, and the recognition of
deferred tax assets and liabilities for the temporary differences between
the financial reporting basis and tax basis of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such amounts
are realized or settled.
(c) Net Loss Per Common Share
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings per Share," basic loss per common share is based on the
weighted-average number of shares outstanding. Diluted income or loss per
share is computed using weighted average number of common shares plus
dilutive common share equivalents outstanding during the period using the
treasury stock method. The Company does not have any potentially dilutive
common share equivalents.
27
<PAGE>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Notes to Financial Statements
September 30, 2007
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Statement of Cash Flows
For purposes of the statements of cash flows, the Company considers cash on
deposit in the bank to be cash. The Company had $8,056 and $7,448 in cash
on September 30, 2007 and 2006, respectively.
(e) Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
(f) Revenue Recognition
The Company recognizes revenue in accordance with the Securities and
Exchange Commission Staff Accounting Bulletin (SAB) number 104, which
states that revenue is generally recognized when it is realized and earned.
Specifically, the Company recognizes revenue when products are delivered
and cash collections are reasonably assured. Revenues are recorded as gross
revenues when the Company receives the product and subsequently delivers it
to a client. If the product is shipped directly to the manufacturer and the
Company does not take possession of the product, revenues are recorded as
net revenues.
(g) Advertising Costs
The company expenses advertising costs as incurred. For the year ended
September 30, 2007 and 2006, the Company expensed $0 and $167 in
advertising costs, respectively.
(h) Fair Value of Financial Instruments
The carrying value of the Company's cash and cash equivalents and accounts
payable approximate fair value.
(i) Property and Equipment
Property and equipment is stated at cost less accumulated depreciation.
Depreciation is calculated using the double-declining method over the
assets' estimated useful lives.
(j) Shipping and Handling Costs
Shipping and handling costs for the purchase of inventory are capitalized
in inventory until the products are sold at which time the costs are
expensed as part of costs of goods sold. Shipping and handling costs for
finished products are expensed in the period in which the products are
sold.
(k) Impact of New Accounting Standards
SFAS 159 The Fair Value Option for Financial Assets and Financial
Liabilities (February 2007)
SFAS 159 creates a fair value option allowing an entity to irrevocably
elect fair value as the initial and subsequent measurement attribute for
certain financial assets and financial liabilities, with changes in fair
value recognized in earnings as they occur. SFAS 159 also requires an
entity to report those financial assets and financial liabilities measured
at fair value in a manner that separates those reported fair values from
the carrying amounts of assets and liabilities measured using another
measurement attribute on the face of the statement of financial position.
Lastly, SFAS 159 requires an entity to provide information that would allow
users to understand the effect on earnings of changes in the fair value on
those instruments selected for the fair value election. SFAS 159 is
effective for fiscal years beginning after November 15, 2007 with early
adoption permitted. The Company is continuing to evaluate SFAS 159 and to
assess the impact on its results of operations and financial condition if
an election is made to adopt the standard.
28
<PAGE>
Plan A Promotions, Inc.
[A Development Stage Company]
Notes to Financial Statements
September 30, 2006
<PAGE>
NOTE 2 - LIQUIDITY/GOING CONCERN
The Company has accumulated losses from inception through September 30,
2007 amounting to $54,662 and has minimal assets and operations at
September 30, 2007. These factors raise substantial doubt about the
Company's ability to continue as a going concern.
Management plans include raising capital to commence business operations,
or seeking a well capitalized merger candidate. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
If the Company is unable to develop its operations, the Company may have to
cease to exist.
NOTE 3 - INCOME TAXES
The provision for income taxes consists of the following:
Current taxes $ 100
Deferred tax benefit (net of valuation allowance) 0
Deferred tax liability 0
-------
$ 100
=======
Below is a summary of deferred tax asset calculations on net operating loss
carry forward amounts. Loss carry forward amounts expire at various times
through 2025 and do not include accrued officer compensation. A valuation
allowance is provided when it is more likely than not that some portion of
the deferred tax asset will not be realized.
Description Amount Asset Rate
(Liability)
------------------------------ ----------- -------------- ----------
Net Operating Loss Carryforwards:
Federal $ 46,221 $ 6,933 15%
State $ 46,221 $ 2,311 5%
Non-deductible (temporary) accrued
officer salaries $ 4,803 $ 961 20%
Differences in book / tax
Depreciation $ (69) $ (14) 20%
Valuation allowance $ (10,191)
--------------
Deferred tax asset 9/30/07 $ 0
The allowance has increased $3,690 from $6,501 as of September 30, 2006.
The Company is incorporated in the State of Utah, which levies a $100
minimum tax per year on every company therein incorporated. As a result,
the Company has accrued a provision of $100 per year to account for this
tax.
Reconciliation between taxes at the statutory rates (20%) and the actual income
tax provision for continuing operations follows:
Expected provision (based on statutory rates) $(3,631)
Effect of:
Temporary differences due to accrued officer
salaries (78)
Temporary differences due to depreciation 39
Increase/(decrease) in valuation allowance 3,690
Deduction for state taxes (20)
State minimum franchise tax 100
-------
Total actual provision $ 100
=======
NOTE 4 - COMMON STOCK/PAID IN CAPITAL
On December 12, 2003, the Board of Directors authorized a stock issuance
totaling 1,200,000 shares of common stock to officers of the Company and
investors. On December 12, 2003, the Company issued 126,000 shares of
common stock at $0.02 for $2,520 in cash. On January 28, 2004, the Company
issued an additional 1,074,000 shares of common stock at $0.03 for cash
totaling $32,217. At inception, an owner of the company contributed a
computer valued at $1,500.
30
<PAGE>
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
September 30, 2006
NOTE 5 - PROPERTY
The major classes of fixed assets as of the balance sheet date are as
follows:
Accumulated Net Useful
Asset Class Cost Depreciation Book Life (Years)
--------------------------- ------------ --------------- ------- ------------
Computers and Office Equipment $4,322 ($3,292) $1,030 5
Software $4,584 ($3,454) $1,130 3
------------ --------------- -------
Total $8,906 ($6,746) $2,160
------------ --------------- -------
The assets are depreciated using the double declining balance method over
five years. Depreciation expense was $2,947 and $2,337 for the years ended
September 30, 2007 and 2006, respectively.
NOTE 6 - RELATED-PARTY TRANSACTIONS
Salaries to the President of the Company were accruing at a rate of $250
per month. As of January 1, 2007, the Company suspended all salaries until
the Company's operations generate positive cash flow. The balance payable
accrues interest at a simple interest rate of 10% annually. Salaries
expense was $750 and $3,000 for 2007 and 2006, respectively. Salaries
payable at September 30, 2007 was $8,076, including accrued interest.
During the twelve months ended September 30, 2007, the Company accrued
interest associated with the Salaries payable of $367. The balance is
unsecured and payable upon demand.
During the year ended September 30, 2007 a shareholder loaned the Company
$10,000 on an unsecured debenture. The Note accrues interest at 10% per
annum and matures on February 15, 2009. The Company has accrued interest of
$583 on this note.
During the year ended September 30, 2007 a shareholder loaned the Company
$5,000 on an unsecured debenture. The Note accrues interest at 10% per
annum and matures on March 1, 2009. The Company has accrued interest of
$292 on this note.
During July 2006, the Company made a sale to Left Lane Imports, Inc. which
is owned, in part, by James Doolin, owner of five percent (5%) of Plan A
Promotions, Inc. The amount of the sale is presented separately on the
Company's Income Statement. This sale accounted for sixty-two percent (62%)
of all revenues and sixty percent (60%) of all cost of goods sold for the
period ending September 30, 2006. Left Lane Imports, Inc., paid in full at
the time of the purchase and no balance was owed to the Company on
September 30, 2007 or 2006.
Eight shareholders, excluding the Company's Executive Officers, control
75.3% of the Company's issued and outstanding common stock. As a result,
these majority shareholders are able to exercise significant influence over
all matters requiring stockholder approval, including the election of
directors and approval of significant corporate transactions. Such
concentration of ownership may also have the effect of delaying or
preventing a change in control of the Company.
NOTE 7 - CONCENTRATIONS
The Company is a development stage company and as such, transactions are
limited with respect to the number of customers and product-types offered.
Additionally, business is currently conducted almost exclusively in the
Salt Lake City, Utah area.
31
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
------------------------------------------------------------------------
None; not applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
----------------------------------------------------------------------
IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name of the Company's current directors
and executive officers. These persons will serve until the next annual meeting
of the stockholders or until their successors are elected or appointed and
qualified, or prior resignation or termination. Their Date of Date of Positions
Election or Termination
Name Held Designation or Resignation
---- ---- ----------- --------------
Alycia D. Anthony DIRECTOR & 12/03 *
PRESIDENT
Nicholl R. Heieren DIRECTOR & 12/03 *
VICE PRESIDENT
Sharlene Doolin DIRECTOR & 07/04 *
SECRETARY
* These persons presently serve in the capacities indicated.
BUSINESS EXPERIENCE
Alycia D. Anthony, President and a director, is 33 years of age. . Ms.
Anthony graduated from the University of Utah, in Salt Lake City. She graduated
with a bachelor of science, and masters in Economics. Ms. Anthony has been
working in the public finance arena since 1996. She has worked for the
consulting firm of KPMG, Peat Marwick, Consulting, Inc. She also worked with the
Salt Lake Organizing Committee. Ms. Anthony was the Secretary and Director of
Energroup Technologies Corporation from September, 1999 through April, 2001,
during this time Energroup Technologies Corporation was a development stage
company with no significant operations. Ms. Anthony was also the President and
Director of Brenex Oil Corporation from November, 1999 through May, 2001, during
this time Brenex Oil Corporation was a development stage company with no
significant operations. In addition, Ms. Anthony served as the Secretary and
Director for Wasatch Web Advisors, Inc., from November, 1999, through October,
2003, during this time Wasatch Web Advisors, Inc., was a development stage
company providing website development services for small and middle market
companies. For over the past three years Ms. Anthony has worked within the
advertising, marketing and construction management industries.
Nicholl Heieren, Vice President and a director, is 30 years of age. Ms.
Heieren graduated from the University of Utah, in Salt Lake City, Utah. She
graduated with a bachelor of fine arts. Ms. Heieren was the Secretary and
Director of Rescon Technology Corporation from May, 1999 through April, 2001,
during this time Rescon Technology Corporation was a development stage company
with no significant operations. Ms. Heieren has also worked within the film,
fashion, and entertainment industry for the past eight years.
Sharlene Doolin, Secretary and a director, is 58 years of age. Ms. Doolin
has been involved in the promotional merchandising industry for over the past
fifteen years. Her experience within the promotional merchandise industry
primarily involves working with non-profit associations and school
organizations.
32
<PAGE>
SIGNIFICANT EMPLOYEES
The Company's Executive Officers are the only employees.
INVOLVMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:
(1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the
bankruptcy or two years prior to that time;
(2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his involvement in any type of business, securities or banking
activities; or
(4) was found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not
been reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------
Each of the Company's directors have filed a Form 3, Statement of
Beneficial Ownership, with the Securities and Exchange Commission; there have
been no changes in their beneficial ownership of shares of common stock of the
Company since the filing of their Form 3.
33
<PAGE>
Item 10. Executive Compensation.
--------------------------------
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Secur-
ities All
Name and Year or Other Rest- Under- LTIP Other
Principal Period Salary Bonus Annual ricted lying Pay- Comp-
Position Ended ($) ($) Compen -Stock Options outs ensat'n
---------------------------------------------------------------------
Alycia D. 09-30-07 $750 0 0 0 0 0 0
Anthony, 09-30-06 $3,000 0 0 0 0 0 0
Director,
President
Nicholl R. 09-30-07 0 0 0 0 0 0 0
Heieren, 09-30-06 0 0 0 0 0 0 0
Director,
Vice
President
Sharlene 09-30-07 0 0 0 0 0 0 0
Doolin, 09-30-06 0 0 0 0 0 0 0
Director,
Secretary
No deferred compensation or long-term incentive plan awards were issued or
granted to the Company's management during the year ended September 30, 2007 or
2006. However, the Company has accrued $250 per month for compensation of the
Company's President. Ms. Anthony began receiving salary as of January 1, 2005.
On January 1, 2007, the Company's Board of Directors resolved to suspend officer
and director salaries until the Company generates positive operating cash flows.
Accordingly, 3 months of salaries were recorded in the amount of $750 as of
September 30, 2007. Should operations produce positive cash flow, compensation
will resume with Alycia Anthony receiving $250 per month. No employee, director,
or executive officer have been granted any option or stock appreciation rights;
accordingly, no tables relating to such items have been included within this
Item.
STOCK OPTION PLANS
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the year ended
September 30, 2007. However, the Company has accrued $250 per month for
compensation of the Company's President for October through December 2006. Ms.
Anthony's began receiving salary as of January 1, 2005, but no cash has been
paid. On January 1, 2007, the Company's Board of Directors resolved to suspend
officer and director salaries until the Company generates positive operating
cash flows. Accordingly, 3 months of salaries were recorded in the amount of
$750 as of September 30, 2007. Should operations produce positive cash flow,
compensation will resume with Alycia Anthony receiving $250 per month.The
Company has not entered into any compensation arrangement with any of the
Company's employees as of the date of this Report. However, any of the Company's
current and/or future employees compensation will not under any circumstances
exceed the amount paid to other persons with similar experience and expertise
performing similar services in the web site design industry. No employee,
director, or executive officer have been granted any option or stock
appreciation rights; accordingly, no tables relating to such items have been
included within this Item.
34
<PAGE>
COMPENSATION OF DIRECTORS
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as a director. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from the Company, with respect to any director
or executive officer of the Company which would in any way result in payments to
any such person because of his resignation, retirement or other termination of
employment with the Company, any change in control of the Company, or a change
in the person's responsibilities following a change in control of the Company.
35
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
Security Ownership of Certain Beneficial Owners.
------------------------------------------------
The following table sets forth the share holdings of those persons who own
more than five percent of the Company's common stock as of the date hereof:
Number of Shares Percentage
Number of Shares Percentage
Name Beneficially Owned of Class
---------------- ------------------ --------
Alycia D. Anthony* 60,000 5.0%
3010 Lostwood Drive
Sandy, UT 84092
Luke H. Bradley 100,000 8.3%
2238 Catania Drive
Draper, UT 84020
Leonard W. Burningham 80,000 6.7%
455 East Fifth South #205
Salt Lake City, UT 84111
James P. Doolin* 60,000 5.0%
1704 E. Harvard Ave.
Salt Lake City, UT 84108
Michael J. Doolin* 298,500 24.9%
5 Pepperwood Drive
Sandy, UT 84092
Duane S. Jenson 100,000 8.3%
4685 South Highland Drive #202
Salt Lake City, UT 84117
Cory Powers 100,000 8.3%
864 Northcrest Ave.
Salt Lake City, UT 84103
Quad D LTD Partnership* 100,000 8.3%
5 Pepperwood Drive
Sandy, UT 84092
SCS, Inc. 75,000 6.3%
455 East Fifth South #201
Salt Lake City, UT 84111
TOTAL 973,500 81.1%
* Sharlene Doolin is deemed a beneficial owner, as she is the general partner of
Quad D LTD Partnership. Michael and Sharlene Doolin are husband and wife. James
Doolin is the son of Michael and Sharlene Doolin. Alycia Anthony is the daughter
of Michael and Sharelene Doolin.
36
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the share holdings of the Company's
directors and executive officers as of the date hereof:
Name Beneficially Owned of Class
---------------- ------------------ --------
Alycia D. Anthony* 60,000 5.0%
3010 Lostwood Drive
Sandy, UT 84092
Nicholl R. Heieren* 6,000 0.5%
1704 E. Harvard Ave.
Salt Lake City, UT 84108
Sharlene Doolin* 100,000** 8.3%
5 Pepperwood Drive
Sandy, UT 84092
TOTAL OFFICERS & DIRECTORS 166,000 13.8%
* Nicholl Heieren is Alycia Anthony's sister-in-law. James Doolin, a shareholder
of the Company, is married to Nicholl Heieren. Sharlene Doolin is the mother of
Alycia Anthony, and mother-in-law to Nicholl Heieren.
** Sharlene Doolin is an indirect owner of 100,000 shares of the Company's
common stock, because she is the general partner of Quad D LTD Partnership.
CHANGES IN CONTROL
There are no present arrangements or pledges of the Company's securities
which may result in a change in control of the Company.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Transactions with Management and Others.
----------------------------------------
For a description of transactions between members of management, five
percent stockholders, "affiliates", promoters and finders, see the caption
"Sales of 'Unregistered' and 'Restricted' Securities Over the Past Three Years"
of Item I.
37
<PAGE>
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
Reports on Form 8-K.
--------------------
None; not applicable
Item 14. Controls and Procedures
-----------------------
(a) Evaluation of Disclosure Controls and Procedures. The Company's Chief
Executive Officer and Chief Financial Officer has conducted an evaluation of the
Company's disclosure controls and procedures as of a date (the "Evaluation
Date") within 90 days before the filing of this annual report. Based on his
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
applicable Securities and Exchange Commission rules and forms.
(b) Changes in Internal Controls and Procedures. Subsequent to the
Evaluation Date, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls, nor
were any corrective actions required with regard to significant deficiencies and
material weaknesses.
Item 15. Audit Fees
----------
The following table summarizes the fees paid by the Company for audit and
other Related fees.
2007 2006
------- -------
Audit $11,268 $8,292
Audit Related $ 0 $ 0
Tax Fees $ 370 $ 375
38
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Plan A Promotions, Inc.
Date:12/17/07 /S/ALYCIA ANTHONY
Alycia Anthony
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
Plan A Promotions, Inc.
Date:12/17/07 /S/ALYCIA ANTHONY
Alycia Anthony
President and Director
Date:12/17/07 /S/NICHOLL HEIEREN
Nicholl Heieren
Vice President and Director
39
<PAGE>
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Alycia Anthony, Chief Executive Officer of Plan A Promotions, Inc., certify
that:
1. I have reviewed this Annual Report on Form 10-KSB of Plan A Promotions, Inc.;
2. Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Annual Report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this Quarterly Report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
Annual Report (the "Evaluation Date"); and
c) presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Registrant's auditors and the audit committee of
Registrant's board of directors (or persons performing the equivalent function);
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the Registrant's ability to record, process,
summarize and report financial data and have identified for the Registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal controls; and
6. The Registrant's other certifying officer and I have indicated in this Annual
Report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date:12/17/07 /S/ALYCIA ANTHONY
Alycia Anthony
Chief Executive Officer
40
<PAGE>
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBARNES OXLEY ACT OF 2002
In connection with the Annual Report of Plan A Promotions, Inc.,(the
"Registrant") on Form 10-KSB for the year ending September 30, 2007, as filed
with the Securities and Exchange Commision on the date hereof(the "Annual
Report"), I, Alycia Anthony, Chief Executive Officer, and Chief Financial
Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Annual Report fully complies with the requirments of section
13(a) or 15(d) of the Securities Exchange Act of 1934, and
(2) The information contained in the Annual Report fairly represents, in all
material respects, the financial condition and result of operations of
the Registrant.
Date:12/17/07 /S/ALYCIA ANTHONY
Alycia Anthony
Chief Executive Officer
Chief Financial Officer
41
<PAGE>
</TEXT>
</DOCUMENT>