United States
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 March 31, 2007
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ___________ to ___________
Commission File Number: 0-27067
RPM ADVANTAGE, INC.
---------------------------------
(Exact name of small business issuer as
specified in its charter)
Nevada 87-0285684
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2500 South West Loop, Suite 304 Houston, Texas 77027
-----------------------------------------------------
(Address of principal executive offices)
(713) 252-9311
--------------
(Issuer's telephone number)
Not Applicable
---------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) Filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such
shorter period that the registrant was required to file such reports),
and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X]
No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer (as defined in
Rule 12b-2
of the Exchange Act):
Large Accelerated Filer Accelerated Filer Non-Accelerated Filer
X
--- ---
---
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act):
Yes No X
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date: 489,535,296 shares.
Transitional Small Business Disclosure Format (check one): Yes [ ]
No [X]
RPM ADVANTAGE, INC.
AND SUBSIDIARIES
TABLE OF CONTENTS
Consolidated Balance Sheets 3-4
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Consolidated Statements of Stockholders' Equity 7
Part I
Item 1. Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis or
Plan of Operations 8
Part II - Other Information 10
Signature 11
RPM ADVANTAGE, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAR 31 MAR 31 DEC 31
2007 2006 2006
( UNAUDITED) ( UNAUDITED) (AUDITED)
------------- ------------ ----------
Assets
Current asset:
Cash and Cash Equivalents 0 0 0
Accounts Receivables 0 0 0
Cost and Estimated Earnings
in Excess of Billings 0 0 0
Prepaid Expenses 0 0 0
Other Assets 0 0 0
Long Term Assets:
Total Fixed Assets 0 0 0
Total Assets 0 0 0
Liabilities and Stockholders'
Equity
Current Liabilites
Accounts Payable 0 0 0
Other current Liabilities 0 0 0
Long Term Liabilities
Total Long Term 0 0 0
Total Liabilities 0 0 0
Common Stock 44,535 44,535 44,535
Additional Paid In Capital 6,906,219 6,804,842 6,906,219
Accumilated Deficit (7,002,704) (6,900,327) (7,002,704)
Net Equity (51,950)
Total Liab. And Owner
Equtiy 0 0 0
RPM ADVANTAGE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
(UNAUDITED)
(MAR 30, 2007) (MAR 30 2006) (DEC 31, 2006)
REVENUE 0 0 0
COST OF SALES 0 0 0
GROSS PROFIT 0 0 0
General & Administrative
(Less: interest, taxes
and depreciation) 0 0 0
INTEREST EXPENSE 0 0 0
DEPRECIATION EXPENSE 0 0 0
TAX EXPENSE 0 0 0
TOTAL EXPENSES 0 0 102,377
NET ORDINARY INCOME 0 0 0
OTHER INCOME 0 0 0
OTHER EXPENSE 0 0 0
NET OTHER INCOME 0 0 0
Net Income 0 0 (102,377)
Net income per
share: Basic $ 0.00 $ 0.00 $ 0.00
Diluted $ 0.00 $ 0.00 $ 0.00
Weighted average
number of shares
outstanding : Basic 44,535,296 7,705,296 44,535,296
Diluted 44,535,296 7,705,296 44,535,296
RPM ADVANTAGE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the period
For the
Three Months
JAN 31 - MAR 31
Ended
MAR 31
2007
2006
(UNAUDITED)
(UNAUDITED)
------------
------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income 0 0
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 0 0
Decrease in Accounts Receivable 0 0
Increase in Prepaid Assets 0 0
Increase in Accounts Payable 0 0
Increase in Other Current Liabilities 0 0
NET CASH PROVIDED FOR OPERATING ACTIVITIES 0 0
CASH FLOWS FROM INVESTING ACTIVITIES: 0 0
NET CASH USED BY INVESTING ACTIVITIES 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Net INCREASE in long-term debt 0 0
NET CASH USED IN FINANCING ACTIVITIES 0 0
INCREASE IN CASH 0 0
CASH - BEGINNING OF PERIOD 0 0
CASH - END OF PERIOD 0 0
Supplemental disclosures of cash flows information:
Cash paid during the Period for:
Interest 0 0
Taxes 0 0
RPM ADVANTAGE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE Period JAN 1 - MAR 31, 2007
(UNAUDITED)
Total
Common Stock Additional Accumulated Stockholder
Amount Shares Paid-in Capital Deficit (Deficit)
/Equity
MAR 31, 2007 44,535 44,535,000 6,906,219 (7,002,704)
Common Stock
issued
for
acquisitions
Net Income/(Loss) 0 0
Balance
-------------------------------------------------------------------------
3/31/2007 $44,535 44,535,000 6,906,219 (7,002,704)
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ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
RPM ADVANTAGE, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 Organization, Nature of Operations and Basis of Presention
RPM Advantage, Inc., (formerly Communitronics,Inc.)
was organized in the state of Utah on September 21, 1970 and
re-incorporated in Nevada in April 2006.
The Company is a independent operator in the Exploration and Production
(E & P) segment of oil an gas industry. The Company. The focus is on
secondary recovery leases that have known proven reserves and can have
their values increased by and through the application of new and
emerging enhanced recovery technologies. The Company considers itself
to be one operating segment.
NOTE #2 Significant Accounting Policies
The significant accounting policies followed by the Company in
preparing its consolidated financial statements are set forth
in Note (2) to such consolidated financial statements included
in Form 10-K for the year ended December 31, 2006. The Company
has made no significant changes to these policies during 2007.
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the
period then the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments
that are readily convertible, within three months, to known amounts
as cash equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available
to common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares outstanding during the period. When
inclusion of the contingently issuable shares would have an
anti-dilutive effect upon earnings per share no diluted earnings per
share shall be presented.
E. Inventories: Inventories are stated at the lower of cost,
determined by the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated
over the estimated useful lives of the related Communitronics Group,
Inc. assets. The cost of leasehold improvements is amortized over the
lesser of the length of the lease of the related assets of the
estimated lives of the assets. Depreciation and amortization is
computed on the straight-line method.
G. Estimates: The preparation of the financial statements in
conformity with generally accepted accounting Principles requires
management to make estimates and Communitronics Assumptions that affect
the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
H. Cash: The company policy for any cash balances above $100,000 in any
one account is to sweep the funds into a company brokerage account,
which under the Securities Investor Protectors Corporation, insures
cash balances up to $5,000,000.
I. Impairment of Long-Lived Assets: In accordance with Statement 144,
long-lived assets, such as property, plant, and equipment, and
purchased intangible assets subject to amortization, are reviewed for
impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the
carrying amount of an asset to estimated undiscounted future cash
flows expected to be generated by the asset. If the carrying amount of an
asset exceeds its estimated future cash flows, an impairment charge
is recognized by the amount by which the carrying amount of the asset
exceeds the fair value of the asset. Assets to be disposed of would be
separately presented in the balance sheet and reported at the lower of
the carrying amount or fair value less costs to sell, and are no longer
depreciated. The assets and liabilities of a disposal group classified
as held for sale would be presented separately in the appropriate
asset and liability sections of the balance sheet.
Goodwill and intangible assets that have indefinite useful lives are
tested annually for impairment, and are tested for impairment more
frequently if events and circumstances indicate that the asset might
be impaired. An impairment loss is recognized to the
extent that the carrying amount exceeds the assets fair value.
For goodwill, the impairment determination is made at the reporting
unit level and consists of two steps. First, the Company determines
the fair value of a reporting unit and compares it to its carrying
amount.
Second, if the carrying amount of a reporting unit exceeds its fair
value, an impairment loss is recognized for any excess of the carrying
amount of the reporting units goodwill over the implied fair value of
that goodwill. The implied fair value of goodwill is determined by
allocating the fair value of the reporting unit in a manner similar
to a purchase price allocation, in accordance with FASB Statement No.
141, Business Combinations. The residual fair value after this
allocation is the implied fair value of the reporting unit goodwill.
J. Accounts receivable are recorded at the invoiced amount
and do not bear interest. Amounts collected on accounts
receivable are included in net cash provided by operating
activities in the consolidated statements of cash flows.
The allowance for doubtful accounts is the Companys best
estimate of the amount of probable credit losses in the Companys
existing accounts receivable. The Company determines the
allowance based on historical write-off experience by
industry and national economic data. Past due balances
over 90 days and over a specified amount are reviewed
individually for collectibility
K. Principles of Consolidation. The consolidated financial
statements include our accounts and those of our wholly owned
subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
NOTE #3 Income Taxes
RPM Advantage, Inc., has adopted SFAS 109 to account for income
taxes. RPM ADVANTAGE, Inc., currently has no issues that
create timing differences that would mandate deferred tax expense. Net
operating losses would create possible tax assets in future years. Due
to the uncertainty as to the utilization of net operating loss carry forwards
an evaluation allowance has been made to the extent of any tax benefit
that net-operating losses may generate. Subsequent to the report
RPM ADVANTAGE, had a change in officers and a change in control.
When control of an entity changes net operating losses generally can be used
only by the taxpayer (Officers) who sustained the losses. There can be no
assurance that the net operating losses sustained before the change in
control will be available for future benefits.
RPM ADVANTAGE, Inc., has incurred losses that can be
carried forward to offset future earnings if conditions of the Internal
Revenue Codes
are met. These losses are as follows:
Year of Loss Amount Expiration Date
2005-2006 $6,900,327 2020
Current Tax Asset Value of Net Operating Loss Carry forwards At Current
Prevailing Federal Tax Rate (33.9%) $2,277,108
Evaluation Allowance (33.9%) $2,277,108
Net Tax Asset $ -0-
Current Income Tax Expense -0-
Deferred Income Tax Benefit -0-
Note #4 Contingencies
In 2005, the Company became aware of a prior claim for services.
The Company is investigating the validity of the claim. In the process
of dealing with this claim the Company has established procedures in
handling prior claims and a reserve of $50,000 for these matters.
Note #5 Stockholders' Equity
As of March 31, 2007, there was approximately 44,535,286
of $.001 Shares of common stock outstanding. The company has no
outstanding warrants or stock based compensation to account for as of
March 31, 2007.
Note 6 Plant Property and Equipment
Property and equipment:
Property and equipment are recorded at cost.
Depreciation of property and equipment is provided
utilizing both straight line and accelerated methods over
the estimated useful lives of the respective assets.
The costs of maintenance and repairs are charged to
operations as incurred.
The estimated use full lives of property and equipment are as follows:
Equipment 7
Furniture 7
Computers 5
Computer software 5
Motor vehicle 5
Leasehold improvements 39
Note 8 Accounts Receivables
The accounts receivables for the reported periods are
MARCH 31 MARCH 31 DECEMBER 31
2007 2006 2006
(UNAUDITED) (UNAUDITED) (AUDITED)
------------- ------------ -------------
0 0 0
Note 9 Business Reorganization
Effective January 3, 2006, RPM ADVANTAGE, Inc., a Utah
corporation (the Company) entered into an Agreement and Plan of
Reorganization (the Agreement) among Resource Protection
Management, Inc., a Texas corporation (Resource Protection)
and Allen Fletcher, the majority security holder of Resource
Protection (Shareholder). Being that the company had limited
resources and limited operations at the time of the acquisition
of Resource Protection Management, LP , the combination was treated
as a reverse acquisition whereby the acquired company are treated as
the acquirer.
Upon the terms and subject to the conditions of the Agreement,
the holders of the equity interest of Resource Protection will
exchange all of Resource Protections equity interest for a
specified number of shares of the Companys common stock and
preferred stock to be issued and the Company will acquire all
of the issued and outstanding equity interest of Resource
Protection, making Resource Protection a wholly-owned subsidiary
of the Company. Being that the company had limited resources and
Limited operations at the time of the acquisition of Resource
Protection Management, LP , the combination was treated as a
reverse acquisition whereby the acquired company are treated as
the acquirer.
The officers and directors of RPM and Resource Protection agreed
on December 7, 2006 that the transaction was rescinded and reversed
and not never complete, hence never consummated as required by law,
and that the transaction, if complete in any manner, should be
deemed now fully and in all things rescinded.
We shall return to Resource Protection, immediately , all of the
partnership or membership interested of Resource Protection which
were transferred to us. In return, Resource Protection shall return
to RPM the shares of RPM restricted common stock transferred to them.
If, for any reason, the actual transfer of the subject securities,
and their return to the party which originally owned them, is not
complete within 15 days , any party not in receipt of the securities
to which it is entitled pursuant to this Agreement, is authorized to
cancel any securities which were the subject of this Agreement, with
the result that Resource Protection shall own no shares of RPM, and
RPM shall own no interest of Resource Protection.
Effective May 4, 2006, RPM Advantage, Inc. (formerly
Communitronic of America, Inc.), a Nevada corporation
(the Company) entered into an Definitive Purchase and
Sale Agreement and Plan of Reorganization (the Agreement)
with Buchanan Electric, Inc. a Massachusetts corporation
(Buchanan) and James Buchanan, the sole security holder
of Buchanan Electric, Inc. (Shareholder).
Upon the terms and subject to the conditions of the Agreement,
RPM will exchange one million (1,000,000) shares of RPM restricted
common stock for all of the outstanding common stock of Buchanan.
The Company will acquire all of the issued and outstanding equity
interest of Buchanan, making Buchanan a wholly-owned subsidiary
of the Company and operate out of RPM's new corporate headquarters
in Houston Texas and Buchanan's Offices in Uxbridge, MA.
The aggregate value of the transaction is seventeen million
dollars ($17,000,000) of RPM Advantage common stock and the
assumption of three million, three hundred thousand($3,300,000)
in debt.
By the terms of the Agreement RPM was to acquire all of the
issued and outstanding equity interest owned by Buchanan in
the company, making Buchanan Electric a wholly owned subsidiary of
the company. We have been advised that in your opinion Buchanan,
and in the opinion of Buchanan counsel, the merger agreement was
never consummated and that the shares of Buchanan Electric were
never transferred to RPM in exchange for the RPM shares pursuant
to the transaction identified, Due to the inability of the Buchanan
to be refinance and the Mr. Buchanan desire to not extend our option
time to finish the refinancing.
The officers and directors of RPM agree that the transaction was never
complete, hence never consummated as required by law, and that the
transaction, if complete in any manner, should be deemed now fully
and in all things rescinded.
We shall return to Buchanan, immediately , all of the shares of common
stock of Buchanan which were transferred to us. In return,
Buchanan shall return to RPM the 1,000,000 shares of RPM restricted
common stock transferred to Buchanan. If, for any reason, the actual
transfer of the subject securities, and their return to the party
which originally owned them, is not complete within 15 days , any
party not in receipt of the securities to which it is entitled
pursuant to this Agreement, is authorized to cancel any securities
which were the subject of this Agreement, with the result that
Buchanan shall own no shares of RPM, and RPM shall own no shares
of Buchanan.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
You should read the following discussion and analysis of financial
condition and results of operations of RPM Advantage together with the
financial statements and the notes to the financial statements which
appear elsewhere in this annual report and RPM Advantage's Form 10-KSB
for the year ended December 31, 2006 and 2005.
In the opinion of management, the accompanying unudited
consolidated financial statements include all adjustments,
necessary for a fair presentation of the financial position of
the Company as of March 31, 2007 and March 31, 2006, and the
results of its income and comprehensive income for the three
month periods ended March 31, 2007 and 2006 and cash
flows for the three months ended March 31, 2007 and 2006.
FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-KSB and the information incorporated by
reference may include Forward-Looking Statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Exchange Act of 1934.
The Company intends the Forward-Looking Statements to be covered by the
Safe Harbor Provisions for Forward-Looking Statements. All statements
regarding the Companys expected financial position and operating results,
its business strategy, its financing plans and the outcome of any
contingencies are forward-Looking Statements. The Forward-Looking
Statements are based on current estimates and projections about our
industry and our business.
Words such as anticipates, expects, intends, plans, believes, seeks,
estimates, or variations of such words and similar expressions are
intended to identify such Forward-Looking Statements. The Forward-Looking
Statements are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth or implied by any
Forward-Looking Statements. For example, the Company is highly dependent
on its Chief Executive Officer for strategic planning. If he is unable to
perform his services for any significant period of time, the Companys
ability to continue growing could be adversely affected. In addition,
factors that could cause actual results to differ materially
from the Forward-Looking Statements include, but are not limited to,
adverse tax consequences of offshore operations, distribution problems,
unforeseen environmental liabilities and the uncertain military, political
and economic conditions in the world.
We have based these forward-looking statements on our current
expectations and projections about future events. These forward-looking
statements are subject to risks, uncertainties and assumptions, which include,
among other things:
- our need for substantial capital;
- our ability to service debt;
- our history of net operating losses;
- the amortization of our intangible assets;
- our ability to integrate our various acquisitions;
- the risks associated with our ability to implement our
business strategies;
- the impact of competition and technological developments;
- subscriber turnover;
- litigation and regulatory changes;
- dependence on key suppliers; and
- reliance on key personnel.
Other matters set forth in this Quarterly Report on Form 10-QSB may
also cause actual results to differ materially from those described in
the forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed
in this Annual Report on Form 10-KSB may not occur.
OVERVIEW
The Company is a independent operator in the Exploration and Production
(E & P) segement of oil an gas industry. The Company focus is on
secondary recovery leases that have known proven reserves and can have
their values increased by and through the application of new and
emerging enchanced recovery technologies. The Company considers itself
to be one operating segment.
The Company once had a network of 14 radio towers (one tower was owned
by the Company and 13 towers were leased) to deliver wireless services
in the coastal regions of Alabama, Louisiana, Mississippi and the Florida
panhandle. The Company owned seven Certificates of Public Convenience
and Necessity issued by the Alabama Public Service Commission and 34
frequencies licensed by the Federal Communications Commission. These
certificates and licenses allowed the Company to provide wireless
messaging services in these geographic areas.
Since the start of 2006, after a period of refocusing the corporation and its
Direction, the Company has maintain a
growth strategy of making a series of acquisitions in Exploration and
Production segment of the oil and gas industry.
On April 10, 2006, the Company entered into an Agreement and Plan of
Reorganization among Resource Protection Management, Inc., a Texas
corporation and Allen Fletcher the majority security holder of
Resource Protection.
Under the terms of the conditions of the Agreement,
the holders of the equity interest of Resource Protection has
exchanged all of Resource Protections equity interest for a
specified number of shares of the Companys common stock and
preferred stock to be issued and the Company will acquire all
of the issued and outstanding equity interest of Resource
Protection, making Resource Protection a wholly-owned subsidiary
of the Company.
The officers and directors of RPM and Resource Protection agreed
on December 7, 2006 that the transaction was rescinded and reversed
and not never complete, hence never consummated as required by law,
and that the transaction, if complete in any manner, should be
deemed now fully and in all things rescinded.
We shall return to Resource Protection, immediately , all of the
partnership or membership interested of Resource Protection which
were transferred to us. In return, Resource Protection shall return
to RPM the shares of RPM restricted common stock transferred to them.
If, for any reason, the actual transfer of the subject securities,
and their return to the party which originally owned them, is not
complete within 15 days , any party not in receipt of the securities
to which it is entitled pursuant to this Agreement, is authorized to
cancel any securities which were the subject of this Agreement, with
the result that Resource Protection shall own no shares of RPM, and
RPM shall own no interest of Resource Protection.
On May 4, 2006, the Company entered into an Definitive Purchase and
Sale Agreement and Plan of Reorganization with Buchanan Electric, Inc.
a Massachusetts corporation and James Buchanan, the sole security
holder of Buchanan Electric, Inc.
Under the terms and the conditions of the Agreement, RPM has exchanged
one million (1,000,000) shares of RPM restricted common stock for all
of the outstanding common stock of Buchanan. The Company will acquire
all of the issued and outstanding equity interest of Buchanan, making
Buchanan a wholly-owned subsidiary of the Company. The aggregate value
of the transaction is seventeen million dollars ($17,000,000) of RPM
Advantage common stock and the assumption of three million, three
hundred thousand($3,300,000) in debt.
By the terms of the Agreement RPM was to acquire all of the
issued and outstanding equity interest owned by Buchanan in
the company, making Buchanan Electric a wholly owned subsidiary of
the company. We have been advised that in your opinion Buchanan,
and in the opinion of Buchanan counsel, the merger agreement was
never consummated and that the shares of Buchanan Electric were
never transferred to RPM in exchange for the RPM shares pursuant
to the transaction identified, Due to the inability of the Buchanan
to be refinance and the Mr. Buchanan desire to not extend our option
time to finish the refinancing.
The officers and directors of RPM agree that the transaction was never
complete, hence never consummated as required by law, and that the
transaction, if complete in any manner, should be deemed now fully
and in all things rescinded.
We shall return to Buchanan, immediately , all of the shares of common
stock of Buchanan which were transferred to us. In return,
Buchanan shall return to RPM the 1,000,000 shares of RPM restricted
common stock transferred to Buchanan. If, for any reason, the actual
transfer of the subject securities, and their return to the party
which originally owned them, is not complete within 15 days , any
party not in receipt of the securities to which it is entitled
pursuant to this Agreement, is authorized to cancel any securities
which were the subject of this Agreement, with the result that
Buchanan shall own no shares of RPM, and RPM shall own no shares
of Buchanan.
The Company supports its operations from its executive offices in
Houston, Texas.
The geographic areas the Company is looking to explore includes
Texas, Oklahoma, Kansas, Arkansas, Louisiana, Mississippi and all
other United States onshore leases .
Economic and Other Factors
The post September 11th era has generally been characterized by a
favorable business climate for suppliers of Oil an natural gas.
The Company believes the Exploration and Production market is
likely to continue to exhibit healthy growth, particularly
in industrial sectors, due to ongoing concerns over the adequacy
of security safeguards in Oil producing nations and a continued
world-wide demand for Energy.
Business Concentration and Credit Risk
An entity is more vulnerable to concentrations of credit risk if it is
exposed to risk of loss greater than it would have had if it mitigated
its risk through diversification of customers. Such risks of loss manifest
differently, depending on the nature of the concentration, and vary in
significance.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,2007
Sales for the three months ended March 31, 2007 remained the same
at $0 as compared to $0 for the same period a year ago.
The Company's gross profit for the three months ended March 31, 2007
remained the same $0 or as compared to $0 for the same period a year ago.
Selling, general and administrative expenses for the three months ended
March 31, 2007 remained the same at $0,as compared to $0 a year ago.
General and administrative expenses include executive management,
accounting, office telephone, repairs and maintenance, management
information systems, salaries and employee benefits.
Interest expense, net for the three months ended March 31, 2007
remained the same at $0 as compared to $0 for the same period a year ago.
Net loss remained the same at $0 or $0.00 per share for the three months
ended March 31, 2007 as compared to none or $0.00 per share for the
same period a year ago.
Liquidity and Capital Resources
During the three months ended March 31, 2007 the Company utilized all of
its cash generated from operations to purchase property, equipment and
invest in additional inventory as discussed below. The Company's
management believes that current working capital, cash flows from
operations will be sufficient to fund the Company's operations through at
least the next twelve months.
Accounts Receivable at March 31, 2007 remained the same at $0 as
compared to $0 at March 31, 2006.
As of March 31, 2007 the Company had no material commitments for capital
expenditures or inventory purchases other than purchase orders issued
in the normal course of business.
The Company's growth, whether internal or through acquisitions,
requires significant capital investment infrastructure.
For the remainder of 2007 and throughout the year 2008, the Company's
business strategy continue to focus on increasing stockholder value by
rasing capital and finding additional strategic assets to acquire, The
availability of financing and the ability to reduce the combined companies
long-term debt. Such transactions wiil result in substantial capital
requirements for which additional financing may be required. No assurance
can be given that such additional financing would be available on terms
satisfactory to the Company.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Access to Future Capital
The Company's ability to access borrowings and generate investments in
the company and to meet its debt service and other obligations will be
dependent upon its future performance and its cash flows from
operations, which will be subject to financial, business and other
factors, certain of which are beyond the Company's control, such as
prevailing economic conditions. The Company cannot assure you that, in
the event it was to require additional financing, such additional
financing would be available on terms permitted by agreements relating
to existing indebtedness or otherwise satisfactory to it.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the first quarter of 2007, the firm was informed that TD BankNorth
of Boston, MA had filed a lawsuit against Buchanan Electric,Inc. a former
merger prospect of the Company. TD BankNorth alleged that Buchanan did
not repay 3.8 million in loans personally guaranteed by Buchanan.
Buchanan Electric sued RPM Advantage as a thrid party defendent to the TD
BankNorth suit and alleged that RPM Advantage was in Breached of Contract,
and futher alleging that the damages were in excess twenty million dollars.
The Company believed that the suit was of zero true merit and defended the
actions for over three plus years, the suit was settled for the amount
of $50,000 and the case ended in the fourth quarter of 2010.
There is currently no other legal proceedings.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the security holders of the
Company during its quarter ended March 31, 2007.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Effective January 3, 2006, Communitronics of America, Inc., a Utah
corporation (the Company) entered into an Agreement and Plan of
Reorganization (the Agreement) among Resource Protection
Management, Inc., a Texas corporation (Resource Protection)
and Allen Flecther, the majority security holder of Resource
Protection (Shareholder).
Upon the terms and subject to the conditions of the Agreement,
the holders of the equity interest of Resource Protection will
exchange all of Resource Protections equity interest for a
specified number of shares of the Companys common stock and
preferred stock to be issued and the Company will acquire all
of the issued and outstanding equity interest of Resource
Protection, making Resource Protection a wholly-owned subsidiary
of the Company.
The officers and directors of RPM and Resource Protection agreed
on December 7, 2006 that the transaction was rescinded and reversed
and not never complete, hence never consummated as required by law,
and that the transaction, if complete in any manner, should be
deemed now fully and in all things rescinded.
We shall return to Resource Protection, immediately , all of the
partnership or memebership interested of Resource Protection which
were transferred to us. In return, Rsource Prtection shall return
to RPM the shares of RPM restricted common stock transferred to them.
If, for any reason, the actual transfer of the subject securities,
and their return to the party which originally owned them, is not
complete within 15 days , any party not in receipt of the securities
to which it is entitled pursuant to this Agreement, is authorized to
cancel any securities which were the subject of this Agreement, with
the result that Resource Protection shall own no shares of RPM, and
RPM shall own no interest of Resource Protection.
Effective May 4, 2006, RPM Advantage, Inc. (formerly
Communitronics of America, Inc.), a Nevada corporation
(the Company) entered into an Definitive Purchase and
Sale Agreement and Plan of Reorganization (the Agreement)
with Buchanan Electric, Inc. a Massachusettes corporation
(Buchanan) and James Buchanan, the sole security holder
of Buchanan Electric, Inc. (Shareholder).
Upon the terms and subject to the conditions of the Agreement,
RPM will exchange one million (1,000,000) shares of RPM restricted
common stock for all of the outstanding common stock of Buchanan.
The Company will acquire all of the issued and outstanding equity
interest of Buchanan, making Buchanan a wholly-owned subsidiary
of the Company. The aggregate value of the trasaction is seventeen
million dollars ($17,000,000) of RPM Advantage common stock and the
assumption of three million, three hundred thousand($3,300,000)
in debt.
By the terms of the Agreement RPM was to acquire all of the
issued and outstanding equity interest owned by Buchanan in
the company, making Buchanan Electric a wholly owned subsidiary of
the company. We have been advised that in your opinion Buchanan,
and in the opinion of Buchanan counsel, the merger agreement was
never consummated and thatthe shares of Buchanan Electric were
never transferred to RPM in exchange for the RPM shares pursuant
to the transaction identified, Due to the inabilitiy of the Buchanan
to be refinance and the Mr. Buchanan desire to not extend our option
time to finish the refinancing.
The officers and directors of RPM agree that the transaction was never
complete, hence never consummated as required by law, and that the
transaction, if complete in any manner, should be deemed now fully
and in all things rescinded.
We shall return to Buchanan, immediately , all of the shares of common
stock of Buchanan which were transferred to us. In return,
Buchanan shall return to RPM the 1,000,000 shares of RPM restricted
common stock transferred to Buchanan. If, for any reason, the actual
transfer of the subject securities, and their return to the party
which originally owned them, is not complete within 15 days , any
party not in receipt of the securities to which it is entitled
pursuant to this Agreement, is authorized to cancel any securities
which were the subject of this Agreement, with the result that
Buchanan shall own no shares of RPM, and RPM shall own no shares
of Buchanan.
Item 4.01 Changes in Registrant's Certifying Accountant
a) On May 10, 2006, the Registrant's Board of Directors engaged Pollard-Kelley
Auditing Services, Inc., of Fairlawn, Ohio to serve as the Registrant's
independent public accountants and to audit the Registrant's financial
statements for the years ended December 31, 2004 and 2005. The Registrant
does not have an Audit Committee.
On Dec 31 , 2010 the Registrant's Board of Directors dismissed
Pollard-Kelley Auditing Services, Inc. ("Pollard-Kelley") as its
independent auditors. Pollard-Kelley is no longer in existence and pursuant
to the fact that the Securities and Exchange Commission has denied Pollard
and Kelley the privilege of appearing or practicing before the Commission as
an accountant for five years from January 7, 2010.
Due to this fact on February 4, 2011, the Registrant's Board of Directors
engaged, Eugene Egeberg, CPA of Baltimore, Maryland to serve as the
Registrant's independent public accountant and to audit the Registrant's
financial statements for the years ended December 31, 2006, 2007, 2008,
2009, 2010 and 2011. The Registrant does not have an Audit Committee.
The Registrant on the date of dismissal and on the date of this 8K amendment
contact the former principals of Pollard Kelly and was informed that no
Exhibit 16.1 letter would be issued because the firm was no longer in
existence. The Registrant believes that it has done all that can be done
to receive the Exhibit 16.1 letter but it was not issued by Pollard Kelly.
During the Registrant's two prior fiscal years and the period from December 31,
2004 through the date of its dismissal, there have been no disagreements with
Pollard-Kelly on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if
not resolved to the satisfaction of Pollard Kelly would have caused it to make
reference thereto in its reports on the Registrant's financial statements.
In addition, for the same periods, there have been no reportable events (as
defined in Regulation S-K Item 304(a)(1)(v)).
Pollard-Kelley's reports on the financial statements of the Registrant for
the years ended December 31, 2004, and 2005 did not contain any adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles, except that the reports
for both years indicated that there was a substantial doubt as to the
Registrant's ability to continue as a going concern and that the financial
statements did not include any adjustments that might result from the outcome
of this uncertainty.
b) During the fiscal years of the Registrant ended December 31, 2006, 2007,
2008, 2009 and December 31, 2010 and the interim period through the date of
this Current Report on Form 8-K, the Registrant did not consult with Eugene
Egeberg, CPA regarding (i) the application of accounting principles to a
specified transaction,either completed or proposed or the type of audit
opinion that might be rendered on the Registrant's financial statements,
and either a written report was provided to the Registrant or oral advice
was provided that Eugene Egeberg, CPA concluded was an important factor
considered by the Registrant in reaching a decision as to an accounting,
auditing or financial reporting issue or (ii) any matter that was either
the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) of
Regulation S-K and the related instructions to this item) or a reportable
event (as described in paragraph 304(a)(1)(v) of Regulation S-K).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Amendment to be signed on its behalf by
the undersigned thereunto duly authorized.
RPM ADVANTAGE, Inc.
Date: APRIL 25, 2011 By: /s/ David R. Pressler
David R. Pressler
Interm President, and Chief Executive Officer
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 2007 10-QSB
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<FISCAL-YEAR-END> DEC-31-2006
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