10QSB

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

(MARK ONE)

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended September 30, 2007

o TRANSITION REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT

Commission File Number: 0-26804

PLANET TECHNOLOGIES, INC.

(Exact name of small business issuer as specified in its character)

CALIFORNIA	33-0502606
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
96 Danbury Road, Ridgefield, Connecticut	06877
(Address of principal executive offices)	(Zip Code)
(800) 255-3749
(Issuer’s telephone number, including area code)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ YES o NO

Check whether the issuer is a shell company as defined in Regulation 12b-2 of the Exchange Act. o YES þ NO

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

Class	Outstanding at September 30, 2007
Common Stock, no par value	3,986,368

INDEX

		Page No.
PART I — Financial Information
Item 1	Financial Statements		2
	Condensed Consolidated Balance Sheets September 30, 2007 (Unaudited) and December 31, 2006		2
	Condensed Consolidated Statements of Operations (Unaudited) Three and Nine months ended September 30, 2007 and 2006		3
	Condensed Consolidated Statement of Shareholders' Equity (Unaudited) Nine months ended September 30, 2007		4
	Condensed Consolidated Statements of Cash Flows (Unaudited) Nine months ended September 30, 2007 and 2006		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2	Management’s Discussion and Analysis or Plan of Operation		11
Item 3A(T)	Controls and Procedures		15
PART II — Other Information
Item 1	Legal Proceedings		16
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 3	Defaults Upon Senior Securities		16
Item 4	Submission of Matters to a Vote of Security Holders		16
Item 5	Other Information		17
Item 6	Exhibits		17
SIGNATURES
EXHIBIT 10.30
EXHIBIT 31.1
EXHIBIT 32.1

1

PART 1 — FINANCIAL INFORMATION

Item 1 — Financial Statements

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30, 2007			December 31, 2006
	(unaudited)			Note 1
ASSETS
Current assets:
Cash	$	248,566		$	162,160
Accounts receivable, less allowance for doubtful accounts of $34,189		142,022			196,095
Inventory, net		282,187			486,809
Other current assets		84,090			86,809
Total current assets		756,865			931,873
Equipment and improvements, net		20,742			27,349
Intangibles, net		993,754			1,176,904
Deferred acquisition costs		93,265			—
Goodwill		1,363,025			1,363,025
Totals	$	3,227,651		$	3,499,151
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		1,389,458			1,247,685
Accrued warrant liability		66,701			49,908
Total current liabilities		1,456,159			1,297,593
Note payable to shareholder, net of current portion		500,000			500,000
Total liabilities		1,956,159			1,797,593
Commitments		—			—
Shareholders’ equity:
Preferred stock, no par value, 4,250,000 shares authorized, no shares issued or outstanding		—			—
Series A convertible preferred stock, no par value, 750,000 shares authorized, no shares issued or outstanding		—			—
Common stock, no par value, 20,000,000 shares authorized, 3,986,368 shares issued and outstanding		7,693,296			7,693,296
Additional paid-in capital		678,215			421,395
Accumulated deficit		(7,100,019	)		(6,413,133	)
Total shareholders’ equity		1,271,492			1,701,558
Totals	$	3,227,651		$	3,499,151

See notes to unaudited condensed consolidated financial statements

2

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three months ended September 30,						Nine months ended September 30,
	2007			2006			2007			2006
Sales	$	1,646,849		$	1,872,047		$	5,453,982		$	6,182,130
Cost of sales		949,127			1,142,160			3,068,794			3,672,148
Gross profit		697,722			729,887			2,385,188			2,509,982
Operating expenses:
Selling		302,716			327,523			931,593			958,244
General and administrative		764,613			830,019			2,200,187			2,605,406
Total operating expenses		1,067,329			1,157,542			3,131,780			3,563,650
Loss from operations		(369,607	)		(427,655	)		(746,592	)		(1,053,668	)
Other income		62,286			59,974			85,833			137,314
Interest expense, net		(10,015	)		(7,196	)		(26,127	)		(11,186	)
Credit (Charge) for change in derivative liability		—			(20,328	)		—			768
Net loss	$	(317,336	)	$	(395,205	)	$	(686,886	)	$	(926,772	)
Net loss per share, basic and diluted	$	(0.08	)	$	(0.10	)	$	(0.17	)	$	(0.23	)
Weighted average shares used in computing net loss per share — basic and diluted		3,986,368			3,986,368			3,986,368			3,986,368

See notes to unaudited condensed consolidated financial statements

3

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)
Nine Months Ended September 30, 2007

	Common Stock				Additional		Accumulated
	Shares		Amount		Paid-in Capital		Deficit			Total
Balance at January 1, 2007		3,986,368	$	7,693,296	$	421,395	$	(6,413,133	)	$	1,701,558
Stock options issued to non-employee for services at fair value of $2.23 per share						32,475					32,475
Stock-based compensation						224,345					224,345
Net loss								(686,886	)		(686,886	)
Balance at September 30, 2007		3,986,368	$	7,693,296	$	678,215	$	(7,100,019	)	$	1,271,492

See notes to unaudited condensed consolidated financial statements

4

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months
	Ended			Nine Months Ended
	September 30,			September 30,
	2007			2006
Operating activities:
Net loss	$	(686,886	)	$	(926,772	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		198,602			228,432
Gain on disposition of leased property		—			(2,102	)
Credit for change in fair value of derivative liability		—			(768	)
Change in fair value of warrant liability		16,793			(5,504	)
Charge for stock- based compensation		224,345			222,981
Charge for change in fair value of options granted to consultant		32,475			15,594
Changes in operating assets and liabilities:
Accounts receivable		54,073			134,163
Inventory		204,622			1,862
Other current assets		2,719			(11,072	)
Accounts payable and accrued expenses		141,773			(305,889	)
Net cash provided by (used in) operating activities		188,516			(649,075	)
Investing activities:
Deferred acquisition costs		(93,265	)		—
Purchases of property and equipment		(8,845	)		—
Cash used in investing activities		(102,110	)		—
Financing activities:
Proceeds from note payable		—			500,000
Payment of vendor promissory note		—			(4,813	)
Principal payment on notes payable		—			(88,082	)
Net cash provided by financing activities		—			407,105
Net increase (decrease) in cash		86,406			(241,970	)
Cash, beginning of period		162,160			436,844
Cash, end of period	$	248,566		$	194,874
Supplementary disclosure of cash flow data:
Cash paid for interest	$	—		$	2,829
Supplementary disclosure of non financing activities:
Termination of capital lease obligation				$	13,427

See notes to unaudited condensed consolidated financial statements

5

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Planet Technologies, Inc. and Subsidiary (“Planet” or the “Company”) have been prepared in accordance with the interim reporting requirements of Form 10-QSB, pursuant to the rules and regulations of the Securities and Exchange Commission. The December 31, 2006 balance sheet has been derived from audited financial statements at that date. However, the financial statements do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements.

In management’s opinion, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2007, are not necessarily indicative of results that may be expected for the year ending December 31, 2007. For additional information, refer to the Company’s financial statements and notes thereto for the fiscal year ended December 31, 2006 included in the Company’s most recent Annual Report on Form 10-KSB.

2. Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of its liabilities in the normal course of business. Successful transition to profitable operations is dependent upon attaining a level of sales adequate to support the Company’s cost structure. The Company has suffered recurring losses resulting in an accumulated deficit of $7,100,019 as of September 30, 2007. Management intends to finance operations primarily through cash flow from operations and by raising additional capital from the sale of its stock. On November 8, 2007, pursuant to the Planet Technologies Inc., Series B Preferred Stock Purchase Agreement, the Company issued 3,316,666 shares of Series B Preferred Stock for a total consideration of $19,900,000. (See Note 6).

3. Accounting Policies

Revenue Recognition

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB No. 101”) as amended by SEC Staff Accounting Bulletin No. 104, “Revenue Recognition”, revised and updated (“SAB No. 104”), which stipulates that revenue generally is realized or realizable and earned, once persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable and collectability is reasonably assured. The Company recognizes revenue from product sales upon shipment of goods. In addition, a provision for potential warranty claims is provided for at the time of sale, based upon warranty terms and the Company’s prior experience.

Warranty Reserve

The Company accrues an estimate of its exposure to warranty claims based on both current and historical product sales data and warranty costs incurred. The air filters produced and sold by the Company carry a ten-year warranty. Additionally, the Company has warranties on its encasing products which vary from five years to lifetime. The warranty policies for the encasings have varied over the years and the reserve reflects coverage for sales from 1993 through the current period. The Company assesses the adequacy of its recorded warranty liability quarterly and adjusts the amount as necessary. The warranty liability is included in accrued expenses in the accompanying unaudited condensed consolidated balance sheet. As of September 30, 2007, the warranty accrual was $291,399. The majority of the warranty accrual relates to products that were sold by Allergy Control Products prior to the acquisition in August of 2005.

6

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventory

Inventory consists of the following:

	September 30,			December 31,
	2007			2006
Raw materials	$	128,441		$	182,846
Finished goods		203,041			361,219
Totals		331,482			544,065
Reserve for obsolescence		(49,295	)		(57,256	)
Totals	$	282,187		$	486,809

Income Taxes

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48, “Accounting for Uncertainty in Income Taxes (as amended) — an interpretation of Statement of Financial Accounting Standards 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109, “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 did not have a significant effect on the Company’s 2007 unaudited condensed consolidated financial statements.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Our evaluation was performed for the tax years ended December 31, 2003, 2004, 2005, and 2006, the tax years which remain subject to examination by major tax jurisdictions as of September 30, 2007.

We may from time to time be assessed interest and/or penalties by major taxing jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the statement of operations as other general and administrative costs.

Loss Per Share

Net loss per share is computed using the weighted average number of shares of common stock outstanding and is presented for basic and diluted loss per share. Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period.

The Company has excluded outstanding stock options from the calculation of diluted loss per share because all such securities are considered anti-dilutive. Accordingly, diluted loss per share equals basic loss per share. The total number of potential common shares excluded from the calculation of diluted loss per share for the three and nine months ended September 30, 2007 and 2006 was 693,613 and 517,630, respectively.

7

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Stock-Based Compensation

The Company’s 2000 Stock Option Plan (“Plan”), as amended, provides for 2,000,000 shares of common stock for issuance. The Plan provides for the discretionary grant of options, stock appreciation rights (“SARs”), and stock bonuses to employees and directors of and consultants to the Company. Options granted under the Plan may be either “incentive stock options,” as defined in Section 422 of the IRS Code of 1986, as amended, or non-statutory stock options.

Under the Plan, the terms of stock options granted are determined by the Board of Directors. Stock options may be granted for periods of up to ten years at a price per share not less than the fair market value of the Company’s common stock at the date of grant for incentive stock options and not less than 85% of the fair market value of the Company’s common stock at the date of grant for non-statutory stock options. In the case of stock options granted to employees, directors or consultants who, at the time of grant of such options, own more than 10% of the voting power of all classes of stock of the Company, the exercise price shall be no less than 110% of the fair market value of the Company’s common stock at the date of grant. Additionally, the term of stock option grants is limited to five years if the grantee owns in excess of 10% of the voting power of all classes of stock of the Company at the time of grant. The vesting provisions of individual options may vary but in each case will provide for vesting of at least 20% per year of the total number of shares subject to the option.

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”), “Share-Based Payment” using the modified-prospective transition method. Under this transition method, compensation cost recognized in the first quarter of 2006 includes (a) compensation cost for all stock options granted prior to, but not yet vested as of December 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all stock options granted on or subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R. During the nine months ended September 30, 2007 and 2006, the Company recognized stock-based compensation $224,345, or $.06 per share, and $222,981, or $.06 per share, respectively.

The above stock-based compensation cost was determined under the fair value based method and was calculated using the Black-Scholes option valuation model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions, are fully transferable, and do not include a discount for large block trades. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility, expected life of the option and other estimates. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. Management believes that there will be no forfeitures and expects the options to be held until their expiration date based on the fact that they are primarily held by board members. This will be evaluated on a continuing basis.

8

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. Stock-Based Compensation (concluded)

The table below summarizes stock option activity pursuant to the Plan for the nine months ended September 30, 2007:

			Weighted		Weighted Average
			Avg		Remaining		Aggregate
	Underlying		Exercise		Contractual Life		Intrinsic
	Shares		Price		(years)		Value
Outstanding, beginning of period		569,613	$	2.86		8.51	$	—
Granted		124,000		1.06		7.72		294,862
Exercised		—		—		—		—
Forfeited/expired		—		—		—		—
Outstanding, end of period		693,613	$	2.53		7.76	$	294,862
Exercisable, end of period		321,278	$	3.19		7.86	$	—

Stock based compensation cost was determined under the fair value based method and was calculated using the Black-Scholes option valuation model. The following assumptions were used for option grants during the three and nine months ended September 30, 2007:

Volatility		319-391	%
Dividend yield		—
Risk free interest rate		4.83-4.92	%
Vesting period	4 years
Expected life	10 years

At September 30, 2007, future compensation expense related to the unvested portion of stock options outstanding totaled $495,283, which will be amortized on a straight-line basis over the remaining vesting period through September 30, 2011. In accordance with the provisions of SFAS No. 123R, all other issuances of common stock, warrants, stock options or other equity instruments to non-employees as the consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued (unless the fair value of the consideration received can be more reliably measured). Generally, the fair value of any options, warrants or similar equity investments will be estimated based on the Black-Scholes option-pricing model and adjusted at the end of each reporting period.

5. Notes payable to shareholder

On June 1 and August 7, 2006, the Company issued two uncollateralized notes payable totaling $500,000 to Windamere III, LLC (“Windamere”). The notes are interest only at 7% annually with all principal and accrued interest payable due on May 31 and August 6, 2008, respectively. From their inception through September 30, 2007, the Company recorded accrued interest of $44,032 related to these notes. Interest expense on these notes for the nine months ended September 30, 2007 and 2006 was $29,953 and $5,849, respectively. Effective, November 8, 2007, pursuant to the Planet Technologies Series B Preferred Stock Purchase Agreement and in exchange for 83,333 shares of Series B Preferred Stock and cash in the amount of the accrued and unpaid interest on the notes, the notes were deemed paid in full. The exchange was consummated at the per share value used to sell the preferred shares disclosed in Note 6.

9

PLANET TECHNOLOGIES, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. Subsequent Events

On November 8, 2007, the Company acquired 100% of the outstanding shares of Antigen Laboratories, Inc., a privately-held FDA licensed manufacturer of allergenic extracts for immunotherapy for $10,000,000 cash.

On November 8, 2007, the Company completed the sale of 3,316,667 shares of Series B preferred stock (“Preferred Stock”) for $19,900,000. The Preferred Stock is convertible into common stock at $2.25 per share for 8,444,444 shares and bears an 8% dividend. The Preferred Stock is generally not convertible until June 1, 2008.

In connection with this preferred stock financing, the Company agreed to file a Form 15 with the SEC to deregister the company’s common stock under Section 12 of the Securities Exchange Act of 1934.

10

PART 1 — FINANCIAL INFORMATION
Item 2 — Management’s Discussion and Analysis or Plan of Operation

Planet Technologies, Inc. and Subsidiary

Except for the historical information contained herein, the discussion in this report contains forward-looking statements that involve certain risks and uncertainties. The Company’s actual results could differ materially from those discussed in this report. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.

OVERVIEW

Planet Technologies, Inc. (“Planet” or the “Company”) formerly known as Planet Polymer Technologies, Inc. (“Planet Polymer”) was incorporated in August, 1991, in the State of California. In November 30, 2004, the Company acquired Allergy Free, LLC, and on August 11, 2005 the company acquired Allergy Control Products, Inc. (“ACP”). The Company is engaged in the business of designing, manufacturing, selling and distributing common products for use by allergy sensitive persons, including, without limitation, bedding, air filters, room air cleaners, and related allergen avoidance products. The business strategy is primarily based upon promotion of products through physician referrals and directly to the consumer through catalogs and web based initiatives.

Planet’s core business strategy is to supply a complete range of high quality products to physician’s patients who are allergy sufferers, as well as to previous customers. Promotion is executed through (a) distribution of catalogs to physicians’ offices, for subsequent re-distribution to patients, (b) distribution of catalogs directly to previous customers and (c) selective e-commerce marketing initiatives. Customer transactions are primarily handled through ACP’s in-bound call center and its website. In addition to this core business strategy, ACP also sells selective products on a wholesale basis to domestic retailers as well as to international distributors.

Products include ACP’s own Allergy Control^® branded bedding products, which are effective barriers to the transmission of dust mite allergen and pet dander. ACP also markets other bedding products, carpet cleaning and laundry products, vacuums, air cleaners and air filters, sinus and breathing aids, respiratory products, dehumidifiers, mold prevention and house cleaning products, pet allergy products and certain allergy-related skin and hair care products.

Market distribution channels (non-wholesale) for allergen avoidance products include: physician-directed sales, direct to consumer sales, the Internet and retail. In the physician-directed sales segment, ACP’s primary competitors are National Allergy Supply, Asthma and Allergies Technology, Allergy Solutions and Mission Allergy.

RESULTS OF OPERATIONS

Three months ended September 30, 2007 compared to three months ended September 30, 2006

The net loss for the three months ended September 30, 2007 was $317,336 compared to a net loss of $395,205 for the three months ended September 30, 2006. The Company’s sales decreased by $225,198 to $1,646,849 for the three months ended September 30, 2007 from $1,872,047 for the same period in 2006. During the period, the Company reduced its catalog distribution and focused marketing resources on a paid internet search initiative. This marketing test did not yield the anticipated results and management has decided to postpone further efforts in this area until a new website is created in early 2008. In addition, the reduction in sales was due to the elimination of the dedicated outbound call center in 2006 which generated sales of approximately $190,000, but which management determined was not generating profits for the Company.

Gross profit decreased to $697,722 for the three months ended September 30, 2007 from $729,887 for the same period in 2006, reflecting the decrease in revenues. Overall gross profit, as a percentage of sales, increased period over period to 42.3% for the three months ended September 30, 2007 from 39.0% for the same period in

11

PART 1 — FINANCIAL INFORMATION
Item 2 — Management’s Discussion and Analysis or Plan of Operation

Planet Technologies, Inc. and Subsidiary

2006. In 2006, the Company re-evaluated its source for domestically manufactured encasings and determined that they could achieve better margins by purchasing the encasings as finished goods from another source. This change has resulted in an increase in gross margins for the third quarter of 2007. In addition, inventory levels have decreased due to the reduction of carrying raw materials for use by contract sewers.

Operating expenses decreased period over period totaling $1,067,329 for the three months ended September 30, 2007 and $1,157,542 for the same period in 2006. This $90,213 decrease is primarily due to staff reductions which resulted in lower compensation expense for the period of approximately $70,000. In addition there was a decrease in legal and accounting fees in the current year of approximately $125,000.

Other expenses/income increased $19,821 to income of $52,271 for the three months ended September 30, 2007 from income of $32,450 for the same period in 2006. Of this increase, $20,328 was due to the elimination of the credit for the change in the derivative liability in 2006.

Nine months ended September 30, 2007 compared to nine months ended September 30, 2006

The net loss for the nine months ended September 30, 2007 was $686,886 compared to a net loss of $926,772 for the nine month period ended September 30, 2006. The Company’s sales decreased by $728,148 to $5,453,982 for the nine months ended September 30, 2007 from $6,182,130 for the same period in 2006. During the period, the Company reduced its catalog distribution and focused some marketing resources on a paid internet search initiative. This marketing test did not yield the anticipated results and management has decided to postpone further efforts in this area until a new website is created in early 2008. In addition, the decrease in sales was caused by the elimination of the dedicated outbound call center in 2006, which management had determined was not generating profits for the Company.

Gross profit decreased to $2,385,188 for the nine months ended September 30, 2007 from $2,509,982 for the same period in 2006, reflecting the decrease in revenues. Overall gross profit, as a percentage of sales, increased period over period to 43.7% for the nine months ended September 30, 2007 from 40.6% for the same period in 2006. In 2006, the Company reevaluated its source for domestically manufactured encasings and determined that they could achieve better margins by purchasing the encasings as finished goods from another source. This change has resulted in an increase in gross margins for the first quarter of 2007. In addition, inventory levels have decreased due to the reduction of carrying raw materials for use by contract sewers.

Operating expenses decreased period over period totaling $3,131,780 for the nine months ended September 30, 2007 and $3,563,650 for the same period in 2006. This $431,870 decrease is primarily due to staff reductions which resulted in lower compensation expense for the period of approximately $210,000. In addition there was a decrease in legal and accounting fees in the current period of approximately $125,000.

Other expenses/income decreased $67,191 to income of $59,706 for the nine months ended September 30, 2007 from income of $126,896 for the same period in 2006. Of this decrease, approximately $53,000 was due to the reduction of advertising revenue in the current year. In addition, there was the elimination of the credit for change in the derivative liability of $21,096. There also was an increase in interest expense related to loans of approximately $26,000.

12

PART 1 — FINANCIAL INFORMATION
Item 2 — Management’s Discussion and Analysis or Plan of Operation

Planet Technologies, Inc. and Subsidiary

LIQUIDITY AND CAPITAL RESOURCES

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of its liabilities in the normal course of business. Successful transition to profitable operations is dependent upon attaining a level of sales adequate to support the Company’s cost structure. The Company has suffered recurring losses resulting in an accumulated deficit of $7,100,019 as of September 30, 2007. Management intends to finance operations primarily through cash flow from operations and from debt and equity offerings. On November 8, 2007, the Company sold approximately $19,900,000 of its preferred stock to raise funds for the purchase of Antigen Laboratories, Inc., working capital and other projects. As part of the preferred stock financing, the Company agreed to file a Form 15 with the SEC to deregister the Company’s common stock under Section 12 of the Security Exchange Act of 1934. The infrequency of trading and wide fluctuations in prices have led management to believe the Company would be better situated for future opportunities as a private, non-reporting company.

Cash and cash equivalents totaled $248,566 at September 30, 2007. During the period, the Company’s operations provided cash totaling $188,516. The positive cash flow was primarily generated by the significant decrease in inventory levels as well as an increase of payables combined with a lower net loss. This was offset by deferred acquisition costs for a pending acquisition. The Company will continue to focus on these areas for the balance of the year in an effort to further improve its operational cash flows. In addition, the Company has started initiatives related to catalog sales and shipments in an effort to further improve its operating cash flows.

Inventory levels decreased $204,622 to $282,187 at September 30, 2007 from $486,809 at December 31, 2006, reflecting the Company’s continued focus on reducing finished goods to improve inventory turns and the elimination of raw materials used in domestic contract manufacturing.

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48, “Accounting for Uncertainty in Income Taxes (as amended) – an interpretation of Statement of Financial Accounting Standards 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS 109, “Accounting for Income Taxes,” and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 did not have a significant effect on the Company’s 2007 unaudited condensed consolidated financial statements.

Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Our evaluation was performed for the tax years ended December 31, 2003, 2004, 2005, and 2006, the tax years which remain subject to examination by major tax jurisdictions as of September 30, 2007.

We may from time to time be assessed interest and/or penalties by major taxing jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. In the event we have received an assessment for interest and/or penalties, it has been classified in the statement of operations as other general and administrative costs.

13

PART 1 — FINANCIAL INFORMATION
Item 2 — Management’s Discussion and Analysis or Plan of Operation

Planet Technologies, Inc. and Subsidiary

In September 2006, the FASB issued SFAS 157, “Fair-Value Measurements” (“SFAS 157”), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. Management is evaluating the impact of SFAS 157, effective for the Company on January 1, 2008, but does not currently expect the adoption of SFAS 157 to have a material impact on its consolidated statement of financial position and results of operations.

On February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits an entity to measure financial instruments and certain other items at estimated fair value. Most of the provisions of SFAS No. 159 are elective; however, the amendment to FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” applies to all entities that own trading and available-for-sale securities. The fair value option created by SFAS 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value option (a) may generally be applied instrument by instrument, (b) is irrevocable unless a new election date occurs, and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS 159 is effective for years beginning after November 15, 2007. Management is evaluating the impact of SFAS 159, effective for the Company on January 1, 2008, but does not currently expect the adoption of SFAS 159 to have a material impact on its consolidated statement of financial position and results of operations.

14

PART 1 — FINANCIAL INFORMATION

Item 3 A(T) — Controls and Procedures

Planet Technologies, Inc. and Subsidiary

Evaluation of Disclosure Controls and Procedures -

The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2007. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of the Company’s disclosure controls and procedures at the end of the period covered by this report, the Company’s chief executive officer and chief financial officer concluded that, as of such date, the Company’s disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarterly period ended September 30, 2007, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

15

PART II — OTHER INFORMATION

Planet Technologies, Inc. and Subsidiary

Item 1 – Legal Proceedings:

     None

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds:

     See Item 3.02 on Form 8-K previously filed on November 13, 2007.

Item 3 – Defaults upon Senior Securities:

     None

Item 4 – Submission of Matters to a Vote of Security Holders:

     On October 24, 2007, at the Company’s annual shareholders’ meeting, the following items were voted on and approved (Total common stock outstanding as of the Record Date: 3,986,368 total shares voted: 3,062,304, or 76.82% of the common stock authorized to vote):

     (1) The election of the following persons to serve on the Board of Directors of the Company until their successors are elected and qualified:

					Percent of			Result of
	For		Withheld		Outstanding Voted			Shares Voted
a. Scott L. Glenn		2,458,319		2		76.82	%		80.28	%
b. Eric B. Freedus		2,459,369		2		76.82	%		80.31	%
c. H.M. Busby		2,459,119		2		76.82	%		80.30	%
d. Michael Trinkle		2,459,319		2		76.82	%		80.31	%
e. Ellen Preston		2,459,369		2		76.82	%		80.31	%
f. Michael Walsh		2,459,369		2		76.82	%		80.31	%
g. Edward Steube		2,443,541		2		76.82	%		79.79	%

     Mr. Freedus, Mr. Busby, Mr. Trinkle, Ms. Preston, and Mr. Walsh resigned as directors effective November 8, 2007. See Item 5.02 on Form 8-K previously filed on November 13, 2007.

     (2) Approval of the reincorporation of the Company from California to Delaware and changing the name to Planet Biopharmaceuticals, Inc.:

					Percent of			Percent of
					Outstanding			Voting in
For	Against		Abstain		Voted			Favor
2,376,676		600,201		15,782		75.07	%		79.42	%

     The Company has elected not to immediately proceed with the reincorporation into Delaware and name change.

     (3) Ratification of the selection of J.H. Cohn as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2007.

					Percent of
					Outstanding			Percent of Voting
For	Against		Abstain		Voted			in Favor
3,060,730		350		1,224		76.82	%		99.5	%

16

PART II — OTHER INFORMATION

Planet Technologies, Inc. and Subsidiary

Item 5 — Other Information

     None

Item 6 – Exhibits:

     (a) Exhibits

Exhibit 10.30 Consulting Agreement between Ellen Preston and the Company.

Exhibit 31.1 Certification of Principal Executive and Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

Exhibit 32.1 Certification of Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

17

Planet Technologies, Inc.

SIGNATURES

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

Date: November 14, 2007	Planet Technologies, Inc.
	/s/ Edward J. Steube
	Edward J. Steube
	Chief Executive Officer
	/s/ Francesca DiNota
	Francesca DiNota
	Chief Financial Officer and Chief Accounting Officer

EX-10.30

Exhibit 10.30

Consulting Agreement

This Consulting Agreement (the “Agreement”) is effective as of August 1, 2007 (the “Effective
Date”), as entered into by and between Planet Technologies, Inc., a California corporation (the
“Company”), and Ellen Preston (“Consultant”) with respect to the following facts:

Recitals

     A. Consultant has extensive experience and know-how related to marketing consulting.

     B. The Company desires to retain Consultant to provide marketing consulting services to the Company.

     C. Consultant is willing and desires to provide the Services to the Company upon the prior authorization from the Company’s Chief Executive Officer (the “CEO”), upon the terms, covenants and conditions hereinafter set forth.

Agreement

     Now, Therefore, in consideration of the mutual terms, covenants and conditions hereinafter set forth, the parties agree as follows:

     1. Term and Amount of Service. The Company hereby retains Consultant from the Effective Date through December 31, 2007. Such Agreement until shall be automatically renewed on a monthly basis unless terminated in writing on thirty (30) days written notice by either the Company or the Consultant (the “Term”). Upon request by the CEO, and at times mutually agreed upon by the CEO and Consultant, Consultant shall devote such time as is agreed to between the CEO and Consultant. Consultation may be sought by the Company over the telephone, in person at the Consultant’s office, at the Company’s offices or another reasonable location or through written correspondence.

     2. Services to Be Provided to the Company. Consultant will provide marketing and sales consulting services to the Company.

     3. Consulting Fees. Consultant shall receive 24,000 options with 1 year vesting at a rate of 1/12 per month with an exercise price of $1.40. Additionally the Company agrees it shall pay Consultant consulting fees at a monthly rate of $2,000.

     4. Expense Reimbursement. Consultant shall be entitled to request reimbursement from the Company for expenses authorized in writing by the CEO and reasonably incurred in the course of carrying out the Services.

     5. Payment of Fees. Consulting fees and reimbursements will be paid within five (5) business days of receipt of invoice from Consultant.

     6. Independent Contractor; Withholding. Consultant will at all times be an independent contractor, and as such will not have authority to bind the Company. Consultant will not act as an agent nor shall he be deemed to be an employee of the Company for the purposes of any employee benefit program, unemployment benefits, or otherwise. Consultant recognizes that no amount will be withheld from any compensation for payment of any federal, state, or local taxes and that Consultant has sole responsibility to pay such taxes, if any, and file such returns as shall be required by applicable laws and regulations. Consultant shall not enter into any agreements or incur any obligations on behalf of the Company.

     7. Indemnification. In the event any person or entity who is not a party to this Agreement makes any claim or demand, or brings any legal action, arbitration, or other proceedings against Consultant relating

solely to Consultant’s provision of the Services during the Term, the Company hereby agrees to indemnify and hold Consultant harmless from all such third party claims, or claims by the Company for indemnity regarding such third party claims, and all damages, expenses, losses, liability, or attorneys’ fees which Consultant may incur therefrom (hereinafter collectively referred to as “liability”), except liability arising out of or in connection with any illegal acts committed by Consultant, and/or liability which results from Consultant’s negligence or Consultant’s intentional torts.

     8. Confidential Information. Consultant acknowledges that during Consultant’s employment and the Term of this Agreement, Consultant had and will have access to and became acquainted with the Company’s confidential and proprietary information, including but not limited to the Company’s products and services, confidential information regarding its customers and other compilations of information and records. In consideration of the covenants made by the Company herein, Consultant agrees that she shall not directly or indirectly disclose or otherwise use the confidential and proprietary information of the Company.

     9. Relationship of the Parties. Nothing contained herein shall be construed to place the parties in the relationship of employer/employee, partners, or joint venturers. Except as otherwise provided in this Agreement, the Company shall have no power to obligate or bind Consultant in any manner whatsoever. Consultant shall have no power to obligate or bind Company in any manner whatsoever, other than as provided by this Agreement.

     10. Benefit and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors. The rights of the Company and Consultant hereunder may not be assigned without the prior written consent of the other party.

     11. Severability. Should any provision of this Agreement or application thereof be declared invalid, void or unenforceable for any reason, the validity and binding effect of the remaining portions shall not be affected and the remaining portions of this Agreement shall remain in full force and effect as if this Agreement had been executed with the invalid, void or unenforceable provision eliminated. To this end, the provisions of this Agreement are severable.

     12. Governing Law. Except to the extent governed by the laws of the United States, this Agreement is to be governed and construed under the internal laws of the State of California and that venue shall be proper for all purposes in San Diego County, California.

     13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall be the same document. Such counterparts may be executed and delivered in person or via facsimile.

     14. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior oral or written agreements, arrangements, and understandings with respect thereto. No representation, promise, inducement, statement or intention has been made by any party hereto that is not embodied herein, and no party shall be bound by or be liable for any alleged representation, promise, inducement, or statement not set forth herein.

     15. Modification. This Agreement may not be modified, amended, superseded, or cancelled, and none of the terms, covenants, representations, warranties or conditions hereof may be waived, without a written instrument executed by the party or parties to be bound by any such modification, amendment, supersession, cancellation, or waiver.

     16. Arbitration. Except as otherwise provided by law, any controversy or claim arising out of or relating to this Agreement, the relationship created hereby, the breach or termination thereof, or otherwise, shall be settled by arbitration in San Diego County, California, in accordance with the Labor Arbitration Rules of the American Arbitration Association, wherein “collective bargaining agreement” or “submission” shall be deemed to be this Agreement, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. BY AGREEING TO ARBITRATION UNDER THIS PARAGRAPH, BOTH CONSULTANT AND THE COMPANY UNDERSTAND THAT THEY ARE AGREEING TO HAVE ANY DISPUTE RELATING TO THIS AGREEMENT DECIDED BY A NEUTRAL ARBITRATOR, AND AS TO THOSE DISPUTES DECIDED BY THE NEUTRAL ARBITRATOR, CONSULTANT AND THE

COMPANY ARE GIVING UP THEIR RIGHT TO A JURY OR COURT TRIAL AND, IN ADDITION, CONSULTANT AND THE COMPANY WAIVE ANY RIGHT TO SEEK PUNITIVE DAMAGES.

Consultant                                                         Company                      

     17. Attorneys’ Fees and Costs. In any arbitration or other action, the prevailing party shall be entitled to recover from the losing party its reasonable costs and actual attorneys’ fees. The “prevailing party” means the party determined by the arbitrator to have most nearly prevailed, even if such party did not prevail in all matters, and not necessarily the one in whose favor a judgment is rendered.

     18. Waivers; Cumulative Remedies. The failure of any party to exercise any of its rights hereunder or to enforce any of the terms or conditions of this Agreement on any occasion shall not constitute or be deemed a waiver of that party’s rights thereafter to exercise any rights hereunder or to enforce any and every term and condition of this Agreement. Any remedies provided for herein are cumulative, and not in substitution for any other remedy any party may have at law or in equity. No delay on the part of any party in exercising any right, power or privilege granted hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof.

     19. Representation. The parties hereto acknowledge each has read this Agreement, that each fully understands its rights, privileges and duties under this Agreement, and that each enters into this Agreement freely and voluntarily. Consultant further acknowledges she has had the opportunity to consult with an attorney of her choice who is completely independent of and in no way connected with the Company, to explain the terms of this Agreement and the consequences of signing it.

     20. Headings. All paragraph headings herein are inserted for convenience only and shall not modify or affect the construction or interpretation of any provision of this Agreement.

     21. Further Assurances. The parties agree that, from time to time hereafter, and upon request, each of them will execute, acknowledge and deliver such documents and other instruments and shall perform such acts and deeds as may be reasonably required or desirable to effectuate the transactions contemplated by this Agreement or to otherwise carry out the terms and conditions of this Agreement.

[Signature Page Follows Directly]

     In Witness Whereof, the parties hereto have caused this Consulting Agreement to be effective as of the date first set forth above.

CONSULTANT:
Ellen Preston
THE COMPANY: Planet Technologies, Inc.
By:
	Edward J. Steube,
	President and Chief Executive Officer

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

We, Edward J. Steube and Francesca DiNota, certify that:

1.	We have reviewed this quarterly report on 10-QSB of Planet Technologies, Inc.
2.	Based on our knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order 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 report;
3.	Based on our knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this quarterly report;
4.	We, the small business issuer’s certifying officers:

a.	are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer;
b.	have designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer and 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;
c.	have evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	have disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting.

5. We, the small business issuer’s certifying officers, have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and audit committee of the small business issuer’s board of directors (or persons performing the equivalent function);

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal controls over financial reporting

Date: November 14, 2007

/s/ Edward J. Steube  

Edward J. Steube 

Chief Executive Officer 

/s/ Francesca DiNota  

Francesca DiNota 

Chief Financial Officer 

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of Planet Technologies, Inc., a California corporation (the “Company”) on Form 10-QSB for the period ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Edward J. Steube, Chief Executive Officer of the Company, and Francesca DiNota, Chief Financial Officer of the Company, certify to the best of our knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

A signed original of this written statement required by Section 906 has been provided to Planet Technologies, Inc., and will be retained by Planet Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Date: November 14, 2007

/s/ Edward J. Steube  

Edward J. Steube 

Chief Executive Officer 

/s/ Francesca DiNota  

Francesca DiNota 

Chief Financial Officer