CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30
|
|
March 31,
|
|
|
|
|
|
|
2007
|
|
2007
|
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash in Bank
|
|
|
$
|
1,662
|
$
|
1,401
|
|
Accounts Receivable, net of
|
|
|
|
|
|
|
allowance for doubtful accounts of $ 1,782
|
|
18,760
|
|
15,587
|
|
|
|
|
|
|
----------------
|
|
----------------
|
|
Total Current Assets
|
|
|
|
20,422
|
|
16,988
|
|
|
|
|
|
|
|
|
|
Fixed Assets
|
|
|
|
|
|
|
|
|
Equipment
|
|
|
|
|
63,057
|
|
63,057
|
|
Accumulated Depreciation
|
|
|
(24,862)
|
|
(18,609)
|
|
|
|
|
|
|
----------------
|
|
----------------
|
|
Total Fixed Assets
|
|
|
|
38,195
|
|
44,448
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
Rent Deposit
|
|
|
|
5,408
|
|
5,408
|
|
|
|
|
|
|
----------------
|
|
----------------
|
|
Total Other Assets
|
|
|
|
5,408
|
|
5,408
|
|
|
|
|
|
|
----------------
|
|
----------------
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
64,025
|
$
|
66,844
|
|
|
|
|
|
|
========
|
|
========
|
The accompanying notes are an integral part of the financial statements.
PACIFIC LAND AND COFFEE CORPORATION.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
LIABILITIES & STOCKHOLDER'S DEFICIT
|
|
|
|
|
|
|
|
|
September 30
|
|
March 31,
|
|
|
|
|
|
|
2007
|
|
2007
|
|
|
|
|
|
|
(Unaudited)
|
|
(Audited)
|
Current Liabilities
|
Account Payable
|
|
|
$
|
41,276
|
$
|
31531
|
|
Credit Line
|
|
|
|
|
24,953
|
|
24,966
|
|
Payroll & Excise Taxes Payable
|
|
|
2,307
|
|
1,990
|
|
Advances by Officer
|
|
|
|
11,521
|
|
5,961
|
|
Note Payable - Related Party
|
|
|
43,254
|
|
18,141
|
|
Current Portion of Long Term Debt
|
|
|
12,628
|
|
11,334
|
|
|
|
|
|
|
----------------
|
|
---------------
|
|
Total Current Liabilities
|
|
|
|
135,939
|
|
93,923
|
|
|
|
|
|
|
|
|
|
Long Term Liabilities
|
Note Payable - net of current portion
|
|
|
28,976
|
|
35,081
|
|
|
|
|
|
|
----------------
|
|
---------------
|
|
Total Long Term Liabilities
|
|
|
28,976
|
|
35,081
|
|
|
|
|
|
|
----------------
|
|
---------------
|
|
|
TOTAL LIABILIITIES
|
|
|
164,915
|
|
129,004
|
|
|
|
|
|
|
|
|
|
Stockholder's Deficit
|
Preferred Stock - 1,000,000 shares authorized;
|
|
|
|
|
|
Par value of $.001 per share; 900,000 and 0 shares issued and outstanding at September 30, 2007 and March 31, 2007, respectively
|
|
900
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock - 50,000,000 shares authorized;
|
|
|
|
|
|
Par value of $.001 per share; 3,802,634 shares issued and outstanding
|
|
3,803
|
|
3,803
|
|
Capital in excess (deficit) of par value
|
|
|
84,935
|
|
3,677
|
|
Deficit accumulated during the development stage
|
|
(190,528)
|
|
(69,640)
|
|
|
|
|
|
|
----------------
|
|
---------------
|
|
Total Stockholder's Deficit
|
|
|
(100,890)
|
|
(62,160)
|
|
|
|
|
|
|
----------------
|
|
---------------
|
|
TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT
|
$
|
64,025
|
$
|
66,844
|
|
|
|
|
|
|
========
|
|
========
|
The accompanying notes are an integral part of the financial statements.
PACIFIC LAND AND COFFEE CORPORATION
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended September 30, 2007 and 2006
and for the Period from Inception (February 14, 2003) through September 30, 2007
From Inception
through
For the Three
For the Three
For the Six
For the Six
February 14
Months
Months
Months
Months
2003 through
September 30,
September 30,
September 30,
2007
2006
2007
2006
2007
Revenues
Sales
$
59,737
$
5,270
$
115,417
$
9,460
$
324,448
Total Revenues
59,737
5,270
115,417
9,460
324,448
Cost of Sales
30,618
4,743
56,600
8,279
216,517
Gross Profit
29,119
527
58,817
1,181
107,931
General & Administrative
Expenses
120,675
5,440
172,563
6,826
274,486
Bad Debt Expense
419
0
727
0
11,106
Net Loss from Operations
(91,975)
(4,913)
(114,473)
(5,645)
(177,661)
Other Income (Expense):
Interest Expense
(3,573)
(204)
(6,415)
(386)
(12,867)
Total Other Income (Expense)
(3,573)
(204)
(6,415)
(386)
(12,867)
Net Loss before Income Taxes
$
(95,548)
$
(5,117)
$
(120,888)
$
(6,031)
$
(190,528)
Provision for Income Taxes
$
0
$
0
$
0
$
0
$
0
Net Loss
(95,548)
(5,117)
(120,888)
(6,031)
(190,528)
Net Loss per Share
$
(0.03)
$
(0.01)
$
(0.04)
$
(0.01)
$
(0.06)
Weighted Average Shares
Outstanding
3,532,276
3,333,333
3,433,348
3,333,333
3,287,923
The accompanying notes are an integral part of the financial statements.
|
|
|
PACIFIC LAND & COFFEE CORPORATION
|
|
|
|
|
|
|
(A Development Stage Company)
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
For the Six Months Ended September 30, 2007 and 2006
|
|
|
|
and for the Period from Inception (February 14, 2003) Through September 30, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six
|
|
For the Six
|
|
February 14,
|
|
|
|
|
|
Months Ended
|
|
Months Ended
|
|
2003 through
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
2007
|
|
2006
|
|
2007
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
Net Loss
|
|
|
$
|
(120,888)
|
$
|
(6,031)
|
$
|
(190,528)
|
Adjustments to reconcile net loss to net cash provided by
|
|
|
|
|
|
operating activities
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
6,254
|
|
---
|
|
11,281
|
|
Bad Debt
|
|
|
|
727
|
|
---
|
|
11,106
|
|
Stock issued for directors and consulting fees
|
82,158
|
|
--
|
|
82,158
|
|
Contributed Capital - noncash fair market value of start-up and organization services and costs
|
|
---
|
|
---
|
|
1,000
|
|
(Increase) Decrease in accounts receivable
|
|
(3,900)
|
|
(1,147)
|
|
1,775
|
|
(Increase) Decrease in related party receivable
|
---
|
|
---
|
|
1,039
|
|
(Increase) Decrease in rent deposit
|
|
---
|
|
---
|
|
(2,252)
|
|
Increase (Decrease) in bank overdraft
|
|
---
|
|
584
|
|
6,303
|
|
Increase (Decrease) in accounts payable
|
|
9,745
|
|
60
|
|
32,459
|
|
Increase (Decrease) in payroll and excise tax payable
|
317
|
|
(8)
|
|
2,142
|
|
Increase (Decrease) in accrued interest
|
|
1,100
|
|
386
|
|
2,741
|
|
|
|
|
|
------------------
|
------------------
|
------------------
|
|
Net Cash Used by Operating Activities
|
|
(24,487)
|
|
(6,156)
|
|
(47,079)
|
Cash Flow from Investing Activities
|
|
|
---
|
|
---
|
|
---
|
|
Net Cash Used by Investing Activities
|
|
---
|
|
---
|
|
---
|
Cash Flow from Financing Activities
|
|
|
|
|
|
|
|
Proceeds from credit line
|
|
|
---
|
|
---
|
|
498
|
Proceeds from the sale of stock/contributed cash
|
---
|
|
---
|
|
6,480
|
Proceeds from notes payable - related party
|
|
24,000
|
|
7,600
|
|
42,200
|
Proceeds from advances from officer
|
|
11,960
|
|
---
|
|
9,056
|
Repayments of long term note payable
|
|
(4,812)
|
|
---
|
|
(9,211)
|
Repayments of note payable - related party
|
|
(6,400)
|
|
(1,700)
|
|
(1,700)
|
|
|
|
|
|
------------------
|
------------------
|
------------------
|
|
Net Cash Provided by Financing Activities
|
|
24,748
|
|
5,900
|
|
47,323
|
Net Increase (Decrease) in Cash
|
|
|
261
|
|
(256)
|
|
244
|
Beginning Cash Balance
|
|
|
1,401
|
|
256
|
|
---
|
Cash acquired in merger with Coscina Brothers Coffee Co.
|
---
|
|
---
|
|
1,418
|
|
|
|
|
|
------------------
|
------------------
|
------------------
|
Ending Cash Balance
|
|
|
1,662
|
|
---
|
|
1,662
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
Cash paid during the year for interest
|
|
6,415
|
|
386
|
|
|
|
Cash paid during the year for income taxes
|
|
---
|
|
---
|
|
|
The accompanying notes are an integral part of the financial statements.
PACIFIC LAND AND COFFEE CORPORATION
(A Development Stage Company)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 2007
Note 1
Interim Financial Statements
The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, the accompanying unaudited financial statements contain all necessary adjustments for fair presentation, consisting of normal recurring adjustments as of September 30, 2007, and the results of operations and cash flows for the three and six months ended September 30, 2007 and 2006 and for the period from inception thru September 30, 2007.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The information included in this Form 10-QSB should be read in conjunction with Managements Discussion and Analysis the financial statements and notes thereto included in the Companys March 31, 2007, Form 10-KSB filed with the Securities and Exchange Commission. The results of operations for the three and six months ended September 30, 2007, are not necessarily indicative of the results of operations to be expected for the full fiscal year.
Note 2
Going Concern
The Company has limited operating capital with limited revenue from operations. Realization of a major portion of the assets is dependent upon the Companys ability to meet its future financing requirements, and the success of future operations. These factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Note 3
Related Party Transactions
During the quarter ended September 30, 2007, an officer of the Company advanced $10,285 to the Company to assist in meeting routine cash needs. He is being repaid in increments of $100, with no interest, on a weekly basis. At September 30, 2007, the Company owed him $11,521.
As of September 30, 2007, the Company has notes payable to two related parties for $35,500 and $5,000, respectively. The notes and interest are due and payable on demand. The notes bear an interest rate of 8.5% per annum. As of September 30, 2007, the Company has accrued interest of $2,754.
Note 4
Equity
On August 22, 2007, the Company amended its Articles of Incorporation with the State of Delaware wherein the number of authorized common stock increased from 20,000,000 shares to 50,000,000 shares.
The Company authorized the issuance of 445,967 shares of common stock at $0.02 per share to the members of our Board of Directors for compensation of $26,758. The Company also authorized the issuance of 923,333 shares of common stock at $0.02 per share to consultants to compensate the individuals for $55,400 in consulting fees.
The Company entered into an agreement to effect a re-capitalization of its outstanding common stock in the form of a pro rata one for three reverse split.
The Company also authorized the issuance of 1,000,000 shares of preferred stock. 900,000 shares of the preferred stock were exchanged for 900,000 post-split shares of common stock by two of the officers of the Company.
The amended Articles of Incorporation, the issuance of common stock for directors fees and consulting fees, the reverse stock split, and the authorization of the preferred stock were unanimously adopted by our Board of Directors, on August 22, 2007. The common stock numbers presented in these financial statements are shown on a post reverse split basis.
Note 5
Letter of Intent
On June 18, 2007 the Company entered into a letter of intent to acquire Integrated Coffee Technologies, Inc. a developer of genetically enhanced coffee plants. The letter of intent will be affected by the issuance of a number of shares equal to approximately 70% of the outstanding shares after giving effort to their issuance. This agreement is still pending and the target date to close the deal sometime during November 2007
tem 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Managements experience in the coffee industry is that as typical for coffee brokerage and small specialty coffee sales, we do not have long term sales contracts. We do not have any written contracts for the sale of our product. We produce and ship as purchase orders are received. We must wait for future purchase orders to make sales in the future. Because coffee prices are variable and demand can also be variable, we believe that selling under long term contracts would not be practicable in our industry. Our invoices are due net 30 days, but currently we are receiving payment immediately on shipment. The sales in the six months ended September 30, 2007 were $115,417, compared to $9,460 for the same period in 2006, an increase caused by the acquisition of Coscina Brothers Coffee on November 2, 2006. The gross margin as a percentage of sales improved from 12% to 51% due to the acquisition of Coscina Brothers Coffee in 2006. Our general and administrative expenses primarily consisted of legal and professional fees related to our status as a public company. These expenses increased in 2007 primarily due to the general and administrative costs of Coscina Brothers Coffee, and secondarily due to higher costs associated with our public company status. Our net loss from operations was $114,473 and our net loss in total was $120,888 for the six months ended September 30, 2007.
Our plan of operation for fiscal 2008 will depend on whether we obtain outside funding. If we do not receive outside funding, our plan of operations will be simple. Based entirely on our communications with our primary customer, management believes, and has no reason to doubt, that we will continue to achieve the current level of sales without any significant marketing expenditures. However, we cannot be certain of any future sales. Management is confident that Pacific Land and Coffee can continue to enjoy at least its
limited level of sales. Yet we are still developing our planned principal operations. Management will use its current business contacts to attempt to achieve additional sales. In particular, Mr. Coscina has 28 years experience in the coffee industry. There are no contingencies or conditions to the above sales other than our performance under purchase orders. We will not require any outside funding to accomplish these sales, nor will we need to make any capital expenditures or hire employees and expect that we will slowly obtain additional specialty coffee orders and green bean brokerage transactions. Business expenses will be advanced by the officers. Its very difficult for management to project our sales for fiscal 2008. Management is hopeful that sales will gradually increase but cannot guarantee sales will remain at current levels, sales will not decrease, nor that any increase will occur.
We hope to be able to expand our operations if we can receive significant outside funding. We are seeking $500,000 in funding for 12 months of our business plan as follows:
Marketing
$200,000
General and Administration
$280,000
Research and Development
$ 20,000
Upon receipt of the full amount of the funding Pacific Land and Coffee will commence marketing primarily of our specialty coffee and green bean brokerage services. We will develop proprietary coffee blends from research and development funds. We believe we can develop several blends and attractive packaging with such amount. Marketing expenses will be comprised of printing of marketing materials and media costs, and salaries for sales representatives or sales associates. General and administrative costs include salaries estimated at an aggregate of $10,000 per month for 12 months, lease expense, telephone and travel expense. In the event we obtain such funding we believe that lead time will be 2-3 months from funding until the commencement of increased sales. With full funding we will be able to hire sales assistants and to undertake marketing via tradeshows and advertisements in industry publications. If we receive less than the full $500,000 we need, we will not be able to complete this plan in full. If we receive $100,000 in funding, most of this amount will be used for salaries of sales associates or sales representatives. The receipt of $200,000 will enable us to advertise, to utilize trade shows and conventions, to market as well as direct mail, but we will not be able to pay management salaries.
We do not have any agreements or understandings with respect to sources of capital. We have not identified any potential sources. Investors cannot expect that we will be able to raise any funds whatsoever. Even if we are able to find one or more sources of capital, its likely that we will not be able to raise the entire amount required initially, in which case our development time will be extended until such full amount can be obtained. Even if we are successful in obtaining the required funding, we probably will need to raise additional funds at the end of 12 months.
Information included in this report includes forward looking statements, which can be identified by the use of forward-looking terminology such as may, will, expect, anticipate, believe, estimate, or continue, or the negative thereof or other variations thereon or comparable terminology. The statements in "Risk Factors" and other statements and disclaimers in this report constitute cautionary statements identifying important factors, including risks and uncertainties, relating to the forward-looking statements that could cause actual results to differ materially from those reflected in the forward-looking statements.
Since we have not yet generated significant and consistent revenues, we are a development stage company as that term is defined in paragraphs 8 and 9 of SFAS No. 7. Our activities to date have been limited to seeking capital; seeking supply contracts and development of a business plan. Our auditors have included an explanatory paragraph in their report on our financial statements, relating to the uncertainty of our business as a going concern, due to our lack of operating history or current revenues, its nature as a start up business, management's limited experience and limited funds. We do not believe that conventional financing, such as bank loans, is available to us due to these factors. We have no bank line of credit available to us. Management believes that it will be able to raise the required funds for operations from one or more future offerings, in order to effect our business plan. Management has refrained from discussions regarding specific equity or debt offerings commencing on the filing of a pending Registration Statement. However, prior to such filing management found significant interest from individual investors in making investments in Pacific Land and Coffee provided that a listing on a public market was obtained. No terms have been discussed, and we cannot predict the price or terms of any offering nor the amount of dilution existing shareholders may experience as a result of such offering.
Forward looking information
Our future operating results are subject to many factors, including:
O
the impact of rapid and persistent fluctuations in the price of coffee beans;
O
fluctuations in the supply of coffee beans;
O
general economic conditions and conditions which affect the market for coffee;
O
our success in implementing our business strategy or introducing new products;
O
our ability to attract and retain customers;
O
the effects of competition from other coffee manufacturers and other beverage alternatives;
O
changes in tastes and preferences for, or the consumption of coffee;
O
our ability to obtain additional financing; and
O
other risks which we identify in future filings with the SEC.
In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "predict," "potential," "continue," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate" and similar expressions (or the negative of such expressions). Any or all of our forward looking statements in this report and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward looking statement can be guaranteed. In addition, we undertake no responsibility to update any forward-looking statement to reflect events or circumstances which occur after the date of this report.
Item 3.
Controls and Procedures.
(a) Evaluation of disclosure controls and procedures. The Companys principal executive officer and its principal financial officer, based on their evaluation of the Companys disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d -14 (c) as of a date within 90 days prior to the filing of this Quarterly Report on Form 10QSB, have concluded that the Companys disclosure controls and procedures are adequate and effective for the purposes set forth in the definition in Exchange Act rules.
(b) Changes in internal controls. There were no significant changes in the Companys internal controls or in other factors that could significantly affect the Companys internal controls subsequent to the date of their evaluation.