U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2005
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
-------------- ------------------
Commission File No.
0-51638
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
-----------------
(Address of Principal Executive Office)
Issuer's Telephone Number, including Area Code: (801) 231-1121
(Former Name or Former Address, if changed since last Report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1) Yes X No (2) Yes No X
---- ---- ---- ----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
None, Not Applicable;
1
APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares
outstanding of each of the Registrant's classes of common stock, as of the
latest practicable date:
January 4, 2006
1,200,000
PART I - FINANCIAL INFORMATION
Item 1.Financial Statements.
The Financial Statements of the Registrant required to be filed with this
10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management, the
Financial Statements fairly present the financial condition of the Registrant.
The Financial Statements are on file with the Company's Auditor.
2
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Balance Sheet
As of December 31, 2005
and September 30, 2005
12/31/05 09/30/05
----------- --------
[Unaudited] [Audited]
ASSETS
Assets
Current Assets
Cash $ 20,222 $ 22,914
Accounts Receivable 995 0
----------- --------
Total Currnet Assets 21,217 22,914
----------- --------
Property and Equipment (net) 2,573 2,860
----------- --------
Total Assets $ 23,790 $ 25,774
=========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Franchise Taxes Payable 200 200
Accrued Liabilities (Note 3) 4,744 4,061
----------- --------
Total Current Liabilities 4,944 4,261
----------- --------
Total Liabilities $ 4,944 $ 4,261
=========== ========
Stockholders' Equity [Note 4]
Preferred stock; par value ($0.01);
Authorized 5,000,000 shares
none issued or outstanding 0 0
Common stock; par value ($0.01);
authorized 50,000,000 shares; issued
and outstanding 1,200,000 12,000 12,000
Paid-in Capital 24,237 24,237
Deficit accumulated during the development stage (17,391) (14,724)
----------- --------
Total Stockholders' Equity 18,846 21,513
----------- --------
Total Liabilities and Stockholders' Equity $ 23,790 $ 25,774
=========== ========
3
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Statements of Operations
For the Three Month Periods Ended December 31, 2004 and 2005
and for the period from inception through December 31, 2005
For the
Period from
For the For the Inception
Three Months Three Months [12/12/03]
Ended Ended through
12/31/04 12/31/05 12/31/05
--------- --------- -----------
Revenues $ 2,407 $ 929 $ 8,969
Cost of Sales $ 2,391 $ 675 7,536
-------- --------- -----------
Gross Margin 16 254 1,433
General and Administrative Expenses 1,476 2,818 18,243
-------- --------- -----------
Operating Loss (1,460) (2,564) (16,810)
Interest Expense 0 103 381
-------- --------- -----------
Net Loss Before Income Taxes (1,460) (2,667) (17,191)
Provision for Income Taxes 0 0 200
-------- --------- -----------
Net Loss (1,460) (2,667) (17,391)
======== ========= ===========
Loss Per Share $ (.01) $ (.01) $ (.03)
======== ========= ===========
Weighted Average Shares Outstanding 1,200,000 1,200,000 1,200,000
======== ========= ===========
4
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Statements of Cash Flows
For the Three Month Periods Ended December 31, 2004 and 2005
and for the period from inception through December 31, 2005
For the
Period from
For the For the Inception
Three Months Three Months [12/12/03]
Ended Ended through
12/31/04 12/31/05 12/31/05
--------- -------- -----------
Cash Flows Provided by/(Used for)
Operating Activities
- ---------------------------------
Net Loss (1,460) (2,667) (17,391)
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase/(Decrease) in accounts receivables (395) (995) (995)
Increase/(Decrease) in current liabilities 207 683 4,944
Depreciation 243 287 1,749
--------- --------- --------
Net Cash Provided by/(Used for) in Operating Activities (1,407) (2,692) (11,693)
Cash Flows Provided by Investing Activities
Purchase of equipment (2,822) 0 (2,822)
--------- --------- --------
Net Cash Used by Investing Activities (2,822) 0 (2,822)
Cash Flows Provided by Financing Activities
Issued stock for cash 0 0 34,737
Loan to a shareholder 0 0 0
Proceeds from repayment from shareholder 0 0 0
--------- --------- --------
Net Cash Provided by Financing Activities 0 0 34,737
Net Increase(decrease) in Cash (4,229) (2,692) 20,222
Beginning Cash Balance 31,976 22,914 0
--------- --------- --------
Ending Cash Balance $ 27,748 20,222 $ 20,222
========= ========= ========
5
Plan A Promotions, Inc.
[fka Lostwood Professional Services, Inc.]
[A Development Stage Company]
Notes to the Interim Financial Statements
NOTE 1- BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Plan A
Promotions, Inc. have been prepared in accordance with generally
accepted accounting principles and the rules of the Securities and
Exchange Commission ("SEC"), and should be read in conjunction with
the audited financial statements and notes thereto contained in the
Company's Registration Statement. In the opinion of management these
interim financial statements contain all adjustments necessary for a
fair presentation of financial position. The results of operations for
the interim period are not necessarily indicative of the results to be
expected for the full year.
NOTE 2- LIQUIDITY/GOING CONCERN
The Company has accumulated losses since inception, has minimal
assets, and has a net operating loss of (2,667) for the three months
ended December 31, 2005. At December 31, 2005, the Company had total
current assets of $20,222 and total liabilities of $4,944. These
obligations are expected to increase by $250 per month due to accrued
salaries payable owed to the Company's executive officer. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
NOTE 3- OFFICER COMPENSATION EXPENSES
The total expense for the Company's President is $250 per month, and
all is recorded as an accrued liability on the Company's balance
sheet. It is included in the general and administrative expenses on
the Company's income statement. As of December 31, 2005, the officer
is owed $4,679 in accrued compensation and interest.
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 $32,220.
At inception, an owner of the company contributed a computer valued at
$1,500.
6
Item 2.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, as 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. 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.
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 has begun
marketing its products and services nationwide. The Company has targeted its
marketing efforts particularly on small businesses, non-profit organizations and
school associations. The Company believes that by focusing on smaller clients it
can establish a sizable market share within this targeted customer base, because
it feels that smaller customers are often times neglected by the Company's
competition, who focus on larger clients. The Company seeks to develop these
smaller organizations into a loyal customer base. The Company also believes that
it provides a high level of professional customer service and maintains that
superior service will allow the Company to retain and attract customers not
solely through price.
7
MARKETING AND ADVERTISING
The Company markets its products and services through the use of a direct
mail campaign, word of mouth, and through 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. 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.
The Company's website is an additional marketing tool used to attract
customers. Current and future clients can access products, services and
information regarding the Company via www.planapromotions.com.
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.
8
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.
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. For the foreseeable future the
Company plans on paying Ms. Anthony $250 per month for compensation of services
performed. 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.
COMPANY HEADQUARTERS
The Company's office is located at 3010 Lost Wood Drive, Sandy, Utah 84092.
The Company's office is provided by the Company's President at no cost. If
necessary, the Company will lease an office to accommodate future growth. The
Company's computers and phones are also provided by the Company's President at
no cost to the Company.
At some point in the future, depending on the Company's growth and demanded
space requirements, the Company will look to lease an office. Anticipated rent
including utilities will range between $500 and $750 per month.
9
RESULTS OF OPERATIONS
---------------------
The Company has not generated a profit since inception. The Company
generated a net loss of ($2,667) on revenue of $929 for the quarter ended
December 31, 2005, compared to a net loss of ($1,460) on revenue of $2,407 for
the quarter ended December 31, 2004. The increase in the loss during the quarter
ended December 31, 2005, was primarily attributable to the lack of revenue
generated in the quarter ended December 31, 2005. The Company's marketing
efforts, which primarily began in the fourth quarter of 2005, has yet to
generate new business in the first quarter of 2006. The Company will continue to
advertise and market to generate new clients, as well as market and directly
contact its previous clients to generate revenue.
The Company's plans for future growth are to continue to focus on the
Company's primary market, within the greater Salt Lake City, Utah area. In
addition the Company will continue to add to its primary market by utilizing the
Company's website to market nationwide. The Company will further continue to
pursue opportunities to market its website with the use of banner ads and search
engine placement campaigns.
LIQUIDITY
During the quarter ended December 31, 2005, the Company generated no
revenue. There were no accounts receivable outstanding at December 31, 2005.
Furthermore the Company had no inventory at the end of the quarter ended
December 31, 2005.
Future cash flow from operations is anticipated to cover the Company's
general expenses of operation. Currently, the Company does not anticipate any
additional short term or long term capital requirements for operational
expenses. If Company deems additional funds are needed for purchase orders, the
Company's management will advance the Company monies not to exceed $20,000, as
loans to the Company, to help the Company acquire inventory. 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 two 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 $32,220.
10
Item 3.Controls and Procedures
An evaluation was performed under the supervision and with the
participation of the Company's management, including the CEO and CFO, regarding
the effectiveness of the design and operation of the Company's disclosure
controls and procedures within 90 days before the filing date of this quarterly
report. Based on that evaluation, the Company's management, including the CEO
and CFO, concluded that the Company's disclosure controls and procedures were
effective. There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal controls
subsequent to their evaluation.
PART II - OTHER INFORMATION
Item 1.Legal Proceedings.
None; not applicable.
Item 2.Changes in Securities.
None; not applicable
Item 3.Defaults Upon Senior Securities.
None; not applicable.
Item 4.Submission of Matters to a Vote of Security Holders.
None; not applicable
Item 5.Other Information.
None; applicable
Item 6.Exhibits and Reports on Form 8-K.
None; not applicable
(b)Reports on Form 8-K.
None; Not Applicable.
11
CERTIFICATION 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 Plan A Promotions, Inc.,(the
"Company") on Form 10-QSB for the quarter ended December 31, 2005, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Alycia Anthony, Chief Executive Officer and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 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 result of operations of the
Company.
Date: 2/10/06 /S/ALYCIA ANTHONY
Alycia Anthony, Chief Executive Officer and
Chief Financial Officer
12
CERTIFICATION
I, Alycia Anthony, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Plan A Promotions,
Inc.;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my 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
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers 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 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
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly 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 officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
functions):
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 officers and I have indicated in this
quarterly 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: 02/10/06 /S/ALYCIA ANTHONY
--------------------------------------------
Alycia Anthony, Chief Executive Officer and
Chief Financial Officer
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Plan A Promotions, Inc.
Date: 02/10/06 /S/ALYCIA ANTHONY
Alycia Anthony, President and Director
14