UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-Q
_________________
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: August 31, 2012
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: ______ to ______
_________________
Profit Planners Management, Inc.
(Exact name of registrant as specified in its charter)
_________________
| Nevada | 333-142076 | 90-0450030 |
| (State or Other Jurisdiction | (Commission | (I.R.S. Employer |
| of Incorporation or Organization) | File Number) | Identification No.) |
350 Madison Avenue, 8th Floor, New York, New York 10017
(Address of Principal Executive Offices) (Zip Code)
(646) 416-6802
(Registrant’s telephone number, including area code)
N/A
(Former name or former address and former fiscal year, if changed since last report)
_________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 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. Yes þ Noo
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o Noþ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
| Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of the issuer's common stock, as of the latest practical date:
As of October 12, 2012, the issuer had50,407,416outstanding shares of Common Stock
Profit Planners Management, Inc.
TABLE OF CONTENTS
PART I.
ITEM 1. FINANCIAL INFORMATION
Profit Planners Management, Inc.
Condensed Consolidated Balance Sheets
| | | (Unaudited) | | (Audited) | |
| | | August 31, 2012 | | May 31, 2012 | |
| Assets | | | | | |
| Current assets: | | | | | |
| Cash | | $ | 187,498 | | $ | 80,537 | |
| Accounts receivable | | | 25,489 | | | 77,425 | |
| Unbilled revenue | | | 22,000 | | | - | |
| Other current assets | | | 13,076 | | | 11,288 | |
| Total current assets | | | 248,063 | | | 169,250 | |
| | | | | | | | |
| Net property and equipment | | | 3,132 | | | 3,313 | |
| | | | | | | | |
| Total Assets | | $ | 251,195 | | $ | 172,563 | |
| | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable and accrued expenses | | $ | 157,574 | | $ | 141,444 | |
| Accounts payable and accrued expenses - related party | | | 33,150 | | | 33,150 | |
| Total Liabilities | | | 190,724 | | | 174,594 | |
| | | | | | | | |
| Stockholders' Equity | | | | | | | |
| Preferred stock - $.001 par value; 50,000,000 shares authorized; none issued and outstanding | | | - | | | - | |
| Common stock - $.001 par value; 500,000,000 shares authorized; 50,407,416 shares issued and outstanding | | | 50,406 | | | 50,406 | |
| Common stock - $.001 par value; 370,372 shares subscribed not issued, respectively | | | 370 | | | 370 | |
| Additional paid-in capital | | | 147,870 | | | 144,120 | |
| Less: Amount due from subscriber under subscription agreement | | | (33,334) | | | (33,334) | |
| Accumulated deficit | | | (104,841) | | | (163,593) | |
| Net Stockholders' Equity | | | 60,471 | | | (2,031) | |
| Total Liabilities And Stockholders' Equity | | $ | 251,195 | | $ | 172,563 | |
See accompanying notes to condensed consolidated financial statements.
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Profit Planners Management, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| | Three Months Ended August 31, 2012 | | Three Months Ended August 31, 2011 |
| | | | |
| Revenue | $ | 250,800 | | $ | 46,637 |
| Related parties revenue | | – | | | 3,000 |
| Total revenue | | 250,800 | | | 49,637 |
| | | | | | |
| Staff salaries – project related | | 119,110 | | | – |
| Related parties –project related | | 5,409 | | | 29,488 |
| Total cost of revenue | | 124,519 | | | 29,488 |
| | | | | | |
| Gross Profit | | 126,281 | | | 20,149 |
| | | | | | |
| Operating expenses: | | | | | |
| Officer’s compensation | | 26,287 | | | – |
Consulting & professional expenses | | 6,800 | | | 2,136 |
| Other operating expenses | | 34,441 | | | 7,680 |
| Total operating expenses | | 67,528 | | | 9,816 |
| | | | | | |
| Net Income | $ | 58,753 | | $ | 10,333 |
| | | | | | |
| Basic and diluted Net income per weighted-average shares common stock | $ | 0.00 | | $ | 0.00 |
| | | | | | |
| Weighted-average number of shares of common stock to be issued and outstanding-Basic | | 50,407,416 | | | 50,054,078 |
| | | | | | |
| Weighted-average number of shares of common stock to be issued and outstanding-Diluted | | 51,077,788 | | | 50,794,820 |
| | | | | | |
See accompanying notes to condensed consolidated financial statements.
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Profit Planners Management, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | Three Months Ended August 31, 2012 | | Three Months Ended August 31, 2011 |
| | | | | |
| Net cash provided by (used in) operating activities | | $ | 106,961 | | $ | (10,744) |
| | | | | | | |
| Net change in cash | | | 106,961 | | | (10,744) |
| Cash, beginning of period | | | 80,537 | | | 37,300 |
| Cash, end of period | | $ | 187,498 | | $ | 26,556 |
See accompanying notes to condensed consolidated financial statements
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Profit Planners Management, Inc.
Notes to Condensed Consolidated Financial Statements
August 31, 2012
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial information of Profit Planners Management, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the full year.
The condensed consolidated financial information for the three months ended August 31, 2012 include the accounts of the Company and its owned- wholly subsidiaries and all intercompany balances and transactions have been eliminated in consolidation.
The balance sheet at May 31, 2012 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
The unaudited interim financial information should be read in conjunction with the Company’s Form 10-K, which contains the audited consolidated financial statements and notes thereto, together with Management’s Discussion and Analysis, for the year ended May 31, 2012. The interim results for the period ended August 31, 2012 are not necessarily indicative of the results for the full fiscal year.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Net income (loss) per common share
Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were 185,186 and 370,371 potentially dilutive shares outstanding as of August 31, 2012 and August 31, 2011, respectively.
Reclassifications
Certain amounts in prior periods presented have been reclassified to conform to current period financial statement presentation.
NOTE 3 – GOING CONCERN
As reflected in the accompanying condensed consolidated financial statements, the Company had net income of $58,753 for the three months ended August 31, 2012; however, the Company has minimal historical evidence of positive earnings as evidenced by the accumulated deficit of $104,841 at August 31, 2012. The historical trend of losses raises substantial doubt about the Company’s ability to continue as a going concern.
Management believes that the actions presently being taken and the success of future operations will be sufficient to enable the Company to continue as a going concern. In addition, management intends to obtain capital in the near future through additional private placement offerings.
There can be no assurance that the raising of equity will be successful and that the Company’s anticipated financing will be available in the future, at terms satisfactory to the Company. Failure to achieve the equity and financing at satisfactory terms and amounts could have a material adverse effect on the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE 4 – INCOME TAXES
The Company has not recorded any income tax expense or benefit for the three months ended August 31, 2012. Any taxable income generated will be offset by net operating losses (“NOL”) generated in previous years. At the present time, management cannot determine if the Company will be able to generate sufficient taxable income to realize the benefit of the NOL carryforwards; accordingly, a valuation allowance has been established to offset the asset.
NOTE 5 – SUBSEQUENT EVENT
On September 26, 2012, the board of directors of the Company approved a stock dividend payable to the holders of its issued and outstanding common stock, par value $.001 per share (the “Stock Dividend”). Under the terms of the Stock Dividend approved by the board, the holders of the Company’s common stock as of September 28, 2012 (the “Record Date”) shall be issued one (1) share of the Registrant’s common stock for each one (1) share owned by such holders on the Record Date. The Stock Dividend shall be effective and payable on October 10, 2012, or on such other date as FINRA’s notice period for corporate actions has been satisfied for the Stock Dividend (the “Payment Date”).
As a result of the Stock Dividend, 25,203,708 shares of the Registrant’s common stock will be issued to the Registrant’s shareholders of record as of the Record Date. Upon the completion of the stock issuance for the Stock Dividend on the Payment Date, the Registrant will have 50,407,416 shares of common stock issued and outstanding.
All periods presented in the accompanying condensed consolidated financial statements have been retroactively adjusted to reflect the issuance of the stock dividend.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” “anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.
The following discussion and analysis should be read in conjunction with our accompanying financial statements and the notes to those financial statements included in this filing. The following discussion includes forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this filing.
Operation
We are a Nevada Corporation founded in January 2009 with offices in New York, California and Florida.
Over the past twelve months our operations have expanded into several business areas. Our current operations are divided into the following revenues:
| · | CFO, Accounting and Tax services; |
| · | Energy and telecom cost reduction services; |
| · | Insurance and healthcare insurance services; |
| · | Business to Business Social Media Platform |
Our CFO, Accounting and Tax services are currently the main revenue guarantor with more than 95% of our revenues. In the future, we expect this percentage to go down as our other revenues gains traction in the market place.
Marketing
Our marketing efforts are targeted to small to midsized companies that are known to, located or identified by our finders network. We also utilize our contacts with other professional service firms (law firms, investment bankers, venture capital firms and CPA audit firms) that provide services to the small and middle market sector for referrals of potential clients. We also intend to explore potential acquisitions of small accounting, or other consulting firms, to acquire their customer lists in order to expand our client base.
Currently we are operating Unified Partners as part of the marketing program for our services and products. As new users sign up for the Unified Partners interactive platform, we will use the information gathered from those users to target our marketing to companies that could benefit from our services. We believe that the benefits of Unified Partners will be as a source of potential customers for our other services and products.
Our target will be on companies that have sales of less than $100 million and are based in North America. Our industry focus is professional services and products. Although we focus on these industries we will look at opportunities in other industries if it makes economic sense.
We currently own and operate following web-sites.
- www.profitplannersmgt.com
- www.unifiedpartnersgroup.com
- www.enertelplus.com
- www.twinpeaksplus.com
We use these web-sites as part of our marketing strategy.
We believe that these strategies will provide the best results given our limited marketing budget.
Critical Accounting Policies
Accounts receivable
Accounts receivable represents open invoices from customers. The Company periodically evaluates the collectability of its accounts receivable and considers the need to record or adjust an allowance for doubtful accounts based upon historical collection experience and specific customer information. Actual amounts could vary from the recorded estimates. The Company has determined that as of August 31, 2012, no allowance for doubtful accounts was required because we believe that all receivables will subsequently be collected. The Company does not require collateral to support customer receivables.
Revenue recognition
The Company’s revenues are derived from management, financial and accounting advisory services. The Company will recognize revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when it has persuasive evidence of an arrangement that the services have been rendered to the customer, the sales price is fixed or determinable, and collectability is reasonably assured.
Net income (loss) per common share
Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during each period. There were no potentially dilutive shares outstanding as of August 31, 2012.
Results of operations
Three Months Ended August 31, 2012 and 2011
For the three months ended August 31, 2012 and 2011, we had service income of $250,800 and $49,637, respectively. Cost of revenue for the three months ended August 31, 2012 and 2011 totaled $124,519 and $29,488, respectively. Operating expenses for the three months ended August 31, 2012 and 2011 totaled $67,528 and $9,816, resulting in a net profit of $58,753 and $10,333, respectively.
Operating expenses for the three months ended August 31, 2012 was $67,528, comprised of compensation expense for our CEO, of $26,287, professional and consulting fees of $6,800, rent expense of $10,577, travel-related expenses of $5,786, and stock compensation expense of $3,750 and other expenses of $14,328. For the three months ended August 31, 2011, the operating expenses was $9,816, comprised of consulting and professional fees of $2,136 and rent expense of $2,134 and other expenses of $5,546.
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Liquidity and Capital Resources
As of August 31, 2012, we had cash of $187,498 as compared to cash of $80,537 as of May 31, 2012. Net cash provided in operating activities totaled $106,961 for the three months ended August 31, 2012. Net cash used in operating activities totaled $10,744 for the three months ended August 31, 2011.
For the three months ended August 31, 2012, net cash generated from operating activities was attributable to net income of $58,753, a non-cash adjustment for stock compensation expense of $3,750 and net decrease in operating assets and liabilities of $44,458.
For the three months ended August 31, 2011, net cash used in operating activities was attributable to a net income of $10,333, offset by a net increase of operating assets and liabilities of $21,077.
In order for us to execute our business plan we will need to raise at least $500,000 in debt or equity. The funds are needed for building out the management team, sales and marketing and working capital. There can be no assurance that we will be able to raise the funds needed to execute our business plan.
If we are unable to satisfy our cash requirements we may be unable to proceed with our plan of operations. We do not anticipate the purchase or sale of any significant equipment. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations.
We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
N/A
ITEM 4T. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures . Under the supervision and with the participation of our management, including our President, Chief Financial Officer and Secretary, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end of the period covered by this report. Based upon that evaluation, our President, Chief Financial Officer and Secretary concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Changes in Internal Control Over Financial Reporting. During the most recent quarter ended August 31, 2011, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II
ITEM 1. LEGAL PROCEEDINGS.
We were not a party to any legal proceedings as of the date of filing of this Quarterly Report.
ITEM 1A. RISK FACTORS.
Our Annual Report on Form 10K for the fiscal year ended May 31, 2012 contains a description of the risk factors relating to our operations and to an investment in our common stock.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
We did not issue or sell any equity shares during the fiscal quarter covered by this Quarterly Report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
On September 26, 2012, the board of directors of the Company approved a stock dividend payable to the holders of its issued and outstanding common stock, par value $.001 per share (the “Stock Dividend”). Under the terms of the Stock Dividend approved by the board, the holders of the Company’s common stock as of September 28, 2012 (the “Record Date”) shall be issued one (1) share of the Registrant’s common stock for each one (1) share owned by such holders on the Record Date. The Stock Dividend shall be effective and payable on October 10, 2012, or on such other date as FINRA’s notice period for corporate actions has been satisfied for the Stock Dividend (the “Payment Date”).
As a result of the Stock Dividend, 25,203,708 shares of the Registrant’s common stock will be issued to the Registrant’s shareholders of record as of the Record Date. Upon the completion of the stock issuance for the Stock Dividend on the Payment Date, the Registrant will have 50,407,416 shares of common stock issued and outstanding.
ITEM 6. EXHIBITS
Exhibit Number | | Description of Exhibit |
| | | |
| 31.1 | | Certifications required by Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | | |
| 32.1 | | Certification of Chief Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C.§ 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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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.
PROFIT PLANNERS MANAGEMENT, INC.
| | |
| | Profit Planners Management, Inc. |
| | /s/ Wesley Ramjeet |
| October 15, 2012 | Wesley Ramjeet |
| | Chief Executive Officer, Chief Financial Officer and Director |
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