SECURITIES AND EXCHANGE COMMISSION

WASHINGTON , D.C.   20549

FORM 10-Q

 

 

[ x ]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

             SECURITIES EXCHANGE ACT OF 1934

             For the quarterly period ended December 31, 2008

 

[   ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 

             SECURITIES EXCHANGE ACT OF 1934 for the transition period from

             ____________   to   ______________

 

             Commission File Number 0-30595

         

 

PACIFIC LAND & COFFEE CORPORATION

(Exact Name of small business issuer as specified in the charter)

 

 

                                Delaware                                                                               33-0619256

                        (State or other Jurisdiction of                                                                ( IRS Employer Identification No.)

                              Incorporation or Organization)

 

500 Alakawa St. #220C , Honolulu, HI  96817

(Address of Principal Executive Offices)

 

(808) 478-9894

(Issuer’s Telephone Number, including Area Code)

 

     Indicate by check mark whether the Registrant (i) 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 shorter period that the Registrant was required to file such reports) and (ii) has been

     Subject to such filing requirements for the past 90 days.

 

Yes  [X]    No  [   ]

 

     Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the 

     Exchange Act).

 

Yes  [   ]    No  [X]

 

    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer (Do not check if a smaller reporting company)
o
Smaller reporting company
þ
 
Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of

     the latest practicable date.

 

     Common Stock, $.001 par value                                                                                                                                                                   12,760,433

     Title of Class                                                                                                                                                                            Number of Shares outstanding

                                                                                                                                                                                                               at December 31, 2008

 

 

 

 

 


 

 

 

PACIFIC LAND & COFFEE   CORPORATION

 

 

 

 

      (A Development Stage Company)

 

 

 

 

     CONSOLIDATED BALANCE SHEET

 

 

 

 

 

     (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

                       ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Dec. 31,

March 31,

 

 

 

 

 

 

        2008

2008

 

 

 

 

 

 

                Unaudited

Audited

Current Assets

 

 

 

 

 

 

Cash in Bank

 

 

 

                     4,871

18,542

 

Accounts receivable less allowance for doubtful accounts of $6,016 and $8,373

 

                    22,003

19,591

 

Other   Receivable

 

 

 

                    29,600

29,600

 

Income Tax Receivable

 

 

                                                   0

44,880

 

 

 

 

 

 

    ----------------

---------------

 

     Total Current Assets

 

 

                    56,474

112,613

 

 

 

 

 

 

    ----------------

  --------------

 

 

 

 

 

 

 

 

Fixed Assets

 

 

 

 

 

 

 

Equipment

 

 

 

                   189,157

191,689

 

Leasehold Improvements

 

 

                       9,316

   9,316

 

Less: Accumulated Depreciation

 

                    (131,664)

(110,910)

 

 

 

 

 

 

                             ----------------

  ---------------

 

      Total Fixed Assets

 

 

                     66,809

  90,095

 

 

 

 

 

 

                          ----------------

  ---------------

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

Rent Deposit

 

 

 

                    12,908

12,908

 

P    Patents, net of   amortization

 

 

 

 

 

    of $605,747 and $537,989

 

 

493,479

561,237

 

Research/License Agreement

 

 

170,000

170,000

 

 

 

 

 

 

    ----------------

   ----------------

 

       Total Other Assets

 

 

676,387

  744,145

 

 

 

 

 

 

    ----------------

   ----------------

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

799,670

   946,853

 

 

 

 

 

 

    ========

    ========

 

 

 

 

 

 

 

 

                 The accompanying notes are an integral part of the financial statements


                                                                                                 2

 

 

 

LIABILITIES & STOCKHOLDER'S DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec. 31

March 31,

 

 

 

 

 

 

2008

2008

 

 

 

 

 

 

Unaudited

Audited

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts Payable

 

 

 

   370,220

299,868

 

Credit Line

 

 

 

     24,690

  19,953

 

Payroll & Excise Taxes Payable

 

 

       8,612

    3,371

 

Accrued Interest

 

 

 

      63,258

  63,258

 

Note Payable - Jones Day

 

 

    145,980

  145,980

 

Current Portion of Long Term Debt - Note

 

       13,492

  13,177

 

Shareholder Advances

 

 

     178,500

          0

 

 

 

 

 

 

    ----------------

   ----------------

 

     Total Current Liabilities

 

 

      804,752

545,607

 

 

 

 

 

 

    ----------------

   ----------------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Term Liabilities

 

 

 

 

 

 

Note Payable - net of current portion - Note

      12,316

  23,190

 

 

 

 

 

 

    ----------------

    ---------------

 

     Total Long Term Liabilities

 

 

      12,316

   23,190

 

 

 

 

 

 

    ----------------

    ---------------

 

 

 

 

 

 

 

 

Non-Controlling Interest

 

 

 

                                  

      72,428

  103,304

 

 

 

 

 

 

 

 

Stockholder's Deficit

 

 

 

 

 

 

Preferred Stock - 1,000,000 shares authorized;

 

 

 

  Par value of $.001 per share; 900,000 shares

 

 

 

  issued and outstanding

 

 

                               

         900

       900

 

Common Stock - 50,000,000 shares authorized;

 

 

 

  Par value of $.001 per share; 12,760,433 shares

 

 

 

  issued and outstanding

 

 

                             

         12,760

   12,514

 

Capital in excess of par value

 

   

                                 

   623,519

  659,226

 

Deficit accumulated during the development stage

      (727,005)

   (397,888)

 

 

 

 

 

  

   ---------------

    --------------

 

    Total Stockholder's Deficit

 

 

                                 (89,826)

  274,752

 

 

 

 

 

 

  ----------------       

    --------------

 

   TOTAL LIABILITIES & STOCKHOLDER'S DEFICIT

                            799,670

946,853

 

 

 

 

 

 

                                 ========

    =======

                             The accompanying notes are an integral part of the financial statements

                                                                                                   3


 

 

 

                (A Development Stage Company)

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF OPERATION

 

 

 

 

 

                   For the Three and Nine Months Ended December 31, 2008 and 2007

 

 

 

 

 

  and for       the Period from Inception (February 14, 2003) Through September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 14,

 

 

 

 

 

For the Three Months Ended

           December 31,  

 

  For the Nine Months Ended

              December 31

 

2003

Through

Dec. 31

 

 

 

 

 

2008

 

2007

 

2008

 

2007

 

2008

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 

$

77,411

$

   97,671

$

225,605

$

213,088

$

706,230

 

 

 

 

 

  ------------

 

-----------

 

-------------

 

----------

 

  --------------

 

   Total Revenues

 

 

77,411

 

   97,671

 

225,605

 

213,088

 

706,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Sales

 

 

 

46,111

 

    56,752

 

137,985

 

113,352

 

455,190

 

 

 

 

 

  ------------

 

  ------------

 

  -------------

 

-----------

 

  --------------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

31,300

 

    40,919

 

87,620

 

  99,736

 

251,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General & Administrative Expenses

121,555

 

  119,712

 

481,093

 

  293,002

 

  1,118,374

 

 

 

 

 

  --------------

 

  ------------

 

  --------------

 

-----------

 

  ---------------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss from Operations

 

(90,255)

 

  (78,793)

 

(393,473)

 

(193,266)

 

   (867,334)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

 

 

   Interest Expense

 

 

(101)

 

    (6,653)

 

   (1,580)

 

  (13,068)

 

     (26,263)

 

 

 

 

 

  ------------------

 

  -------------

 

    -------------

 

-------------

 

  ---------------

 

   Total Other Income (Expense)

(101)

 

    (6,653)

 

  (1,580)

 

  (13,068)

 

(26,263)

 

 

 

 

 

  ------------------

 

  --------------

 

   -------------

 

  -------------

 

  ---------------

Net Loss before

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlling interest

 

       (90,356)

 

  (85,446)

 

(395,053)

 

(206,334)

 

(893,597)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Controlling Interest

 

         18,475

 

    26,655

 

  65,936

 

    26,655

 

121,712

 

 

 

 

 

  ------------------

 

  ------------

 

    --------------

 

  -------------

 

  ----------------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before Income Tax

 

(71,881)

 

   (58,791)

 

(329,117)

 

(179,679)

 

     (771,885)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Income Tax (Benefit)

       0

 

  0

 

           0

 

  0

 

   (44,880)

 

 

 

 

 

  ------------------

 

  --------------

 

  ---------------

 

  --------------

 

  ------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

$

(71,881)

$

    (58,791)

$

(329,117)

$

  (179,679)

$

(727,005)

 

 

 

 

 

  ============

 

  =========

 

    ==========

 

  =========

 

    ==========

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss per Share

 

$

   (0.01)

$

(0.01)

$

      (0.03)

$

  (0.05)

$

      (0.01)

 

 

 

 

 

  ============

 

  =========

 

    ==========

 

  =========

 

    ==========

Weighted Average Shares

 

 

 

 

 

 

 

 

 

 

                                 Outstanding

12,760,420

 

4,882,785

 

12,651,301

 

3,918,251

 

    4,951,260

 

 

 

 

 

  ============

 

  ============

 

  ============

 

  ============

 

  ============

 

 

                                                                              4


 

 

 

 

 

 

 

 

     PACIFIC LAND & COFFEE CORPORATION

 

 

 

 

 

 

           (A Development Stage Company)

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

   For the Nine Months Ended December 31, 2008 and 2007

 

 

 

 

        and for the Period from Inception (February 14, 2003) Through December 31, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 14,

 

 

 

 

 

 

                For the Nine Months Ended

 

2003 through

 

 

 

 

 

 

                      December 3111

 

 

 

Dec. 31

 

 

 

 

 

 

2008

 

      2007

 

              2008

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

Net Loss

 

 

         $

  (329,117)

$

(179,679)

$

     (727,005)

 

Adjustments to reconcile net loss to net cash provided by

 

 

 

 

 

 

operating activities

 

 

 

 

 

 

 

 

 

Non-controlling interest income adjustment

 

(65,936)

 

    (26,655)

 

(121,712)

 

 

Depreciation & amortization

 

 

93,000

 

      11,506

 

141,437

 

 

Bad Debt

 

 

 

  (2,357)

 

           725

 

 14,613

 

 

Stock Issued for payment of fees

 

 

0

 

      82,158

 

128,783

 

 

Contributed Capital - noncash fair market value of start-up

 

 

 

 

 

 

 

   and organization services and costs

 

---

 

          ---

     

   1,000

 

 

(Increase) Decrease  in accounts receivable

 

(2,412)

 

      (15,302)

 

   (7,333)

 

 

(Increase) Decrease  in short-term advances

0

 

         8,246

 

   1,039

 

 

(Increase) Decrease  in income tax receivables

44,880

 

0

 

          0

 

 

(Increase) Decrease  in rent deposit

 

               ---

 

           ---

 

   (2,252)

 

 

Increase( Decrease)  in bank overdraft

 

               ---

 

           ---

 

                     ---

 

 

Increase (Decrease) in accounts payable

 

70,352

 

     (174,650)

 

(122,379)

 

 

Increase (Decrease) in payroll and excise tax payable

5,241

 

         21,852

 

   8,334

 

 

Increase (Decrease) in accrued interest

 

0

 

           1,993

 

   4,648

 

 

 

 

 

 

 ------------------

 

 ---------------

 

            -------------

 

 

  Net Cash Used by Operating Activities

 

(186,349)

 

      (269,806)

 

(680,827)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Investing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 

0

 

0

 

0

 

 

 

 

 

 

 ------------------

 

  ---------------

 

        ----------------

 

 

  Net Cash Used by Investing Activities

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Flow from Financing Activities

 

 

 

 

 

 

 

 

 

Net proceeds from credit line

 

 

4,737

 

        (13)

 

   222

 

 

Proceeds from the sale of stock/contributed cash

0

 

445,000

 

             471,480

 

 

Proceeds from notes payable - related party

 

0

 

  31,500

 

49,700

 

 

Proceeds from advances from officer (net)

 

178,500

 

  11,010

 

              213,040

 

 

Repayments of long term note payable

 

(10,559)

 

   (7,430)

 

(25,006)

 

 

Repayments of note payable - related party

 

0

 

   (6,400)

 

                     0

 

 

Repayments of other liabilities

 

 

                0

 

 (326,608)

 

            (328,278)

 

 

 

 

 

 

 ------------------

 

 ------------------

 

         ---------------

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided (Used) by Financing Activities

172,678

 

147,059

 

381,158

 

 

 

 

 

 

 

 

 

 

 

 

Net Increase (Decrease) in Cash

 

 

(13,671)

 

(122,747)

 

(299,669)

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Cash Balance

 

 

18,542

 

   1,401

 

0

 

Cash acquired in merger with Coscina Brothers Coffee Co.

0

 

0

 

  1,418

 

Cash acquired in merger with Integrated Coffee Technologies

0

 

303,123

 

303,122

 

 

 

 

 

 

 ------------------

 

 ------------------

 

        ---------------

 

 

 

 

 

 

 

 

 

 

 

 

Ending Cash Balance

 

$

4,871

$

181,777

 

4,871

 

 

 

 

 

 

 ============

 

 ============

 

          =========

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure of Cash Flow Information

 

 

 

 

 

 

 

Cash paid during the year for interest

 

 

 

 

 

 

 

 

Cash paid during the year for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Acquisitions

 

 

 

 

 

 

 

 

 

Fair value of assets acquired

$

 

$

 

$

1,275,343

 

 

Issuance of debt/assumption of liabilities

 

 

 

 

(1,170,013)

 

 

Common Stock issued at Acquisition

 

 

 

 

 

(76,441)

 

 

Non-Controlling Interest

 

 

 

 

 

 

(28,889)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the financial statements

 

 

5

 


Pacific Land and Coffee Corporation

(A Development Stage Company)

Notes to Condensed Financial Statements

 

December 31,  2008

 

 

Note 1       Interim Financial Statements

  

                  The accompanying financial statements have been prepared by the Company without audit.           

      In the opinion of management, all adjustments (which include normal recurring adjustments)

      necessary to present fairly the financial position as of December 31, 2008, and the results     

      of operations and cash flows for the nine months ended December 31, 2008, and for the period 

      from inception thru December 31, 2008.

 

      Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  It is

      suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s March 31, 2008 audited financial statements.  The results of operations for the nine months ended December 31, 2008, 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 Company’s ability to meet its future financing requirements, and the success of future operations.  These factors raise substantial doubt about the Company’s 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       Property and Equipment

         

            Property and equipment is carried at cost and summarized as follows:

 

                                                                                            Accumulated

                                                                  Cost                     Depreciation       Net                       

      Equipment                                            $ 189,157            $ (122,348)            $  66,809

                  Leasehold Improvements                  9,316                 (  9,316)                      -0- 

 

                      Total                                    $ 198,473           $ (131,664)            $  66,809

 

      For the nine months ended December 31, 2008,  depreciation expense is $ 23,286.  The equipment was part of the assets consolidated into the Company and the current statements only reflect a portion of the total depreciation expense on the equipment for the current year.  Of the $63,057 property and equipment account $ 60,557 has been capitalized under a capital lease discussed below.  As of December 31, 2008 the total accumulated depreciation associated with the capital lease was $ 38,681.

                                                                           6


 

    Note 4       Intangible Assets

                  

                      Patents and licenses are carried at cost and summarized as follows:

 

                                                                                                           Accumulated

                                                                               Cost                    Amortization              Net           

 

                      Patents                                      $ 1,099,226             $   531,936                 $  567,290

                      Licenses                                           170,000                    73,811                       96,189

 

                      Total                                          $ 1,269,226             $   605,747                  $ 663,479

 

 

Note 5       Long Term Debt

 

                  The Company has a capital lease due to a finance company with interest at 10% due in monthly installments of $1,289, through October, 2010.  This note is secured by the Company’s equipment.

 

                  Maturities of long- term debt are as follows:

 

                                                        Year Ending

                                                                          Dec. 31,

2009                       $ 13,492

2010                          12,316

2011                             -0-

-----------  

                                                     Total                              $ 25,808

 ======

 

Note 6       Related Party Transactions

 

                  One officer of the Company has advanced personal funds to the Company to assist in               

                  meeting operating cash needs.  There are no stated terms for these advances, and it is anticipated at a future date that the advances will be converted to shares of common stock, though the timing and amount of such conversion is indeterminable at this time.  At December 31, 2008, the Company owed him $ 178,500.

 

 

 

Note 7            Recent Accounting Pronouncements

 

               In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (“FAS 141R”) and Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51” (“FAS 160”). These new standards are the U.S. GAAP outcome of a joint project with the International Accounting Standards Board (“IASB”). FAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and will significantly change the accounting for business combinations in a number of areas, including the treatment of contingent consideration, acquisition costs, intellectual property, research and development, and restructuring costs. FAS 160 establishes reporting requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The Company is currently evaluating the impact of adopting FAS 141R and FAS 160 on its Consolidated Financial Statements which are effective for the Company at the beginning of its fiscal year 2010.

                                                                      7


In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“FAS 161”), which requires enhanced disclosures about a company’s derivative and hedging activities. The Company currently is evaluating the impact of the adoption of the enhanced disclosures required by FAS 161 which is effective for the Company at the beginning of its fiscal year 2010.

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles (“FAS 162”). The new standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with generally accepted accounting principles (“GAAP”) for nongovernmental entities in the United States. FAS 162 is effective 60 days following SEC approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” The Company is currently evaluating the impact, if any, of adopting FAS 162, on its Consolidated Financial Statement

In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts – an Interpretation of FASB Statement No. 60 (“SFAS 163”).  SFAS 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claim liabilities.  This Statement also requires expanded disclosures about financial guarantee insurance contracts.  SFAS 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years.  The Company does not expect that the adoption of SFAS 163 will have a material impact on its financial statements.

   

 

Item 2          MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

    

We did not receive revenues from operations in our specialty coffee segment until the quarter ended September 30,2003.  We sell roasted blends to various customers and we broker green bean orders as well.  With respect to coffee brokerage orders, we do not take ownership of the green beans, but only receive a commission on the sale. This contrasts with the sales of roasted blend, in which we purchase the materials and resell to the purchaser. 
 
Management’s experience in the coffee industry is typical of coffee brokerage and small specialty coffeeoperations, 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 quarter and for the nine months ended December 31, 2008 were $ 77,411 and $ 225,605, respectively, compared to $ 97,671 and $ 213,088 for the same periods in 2007.  The gross margin as a percentage of sales decreased from 47% to 39% due to a cost increases from suppliers not passed on. Our general and administrative expenses primarily consisted of legal and professional fees related to our status as a public company.   These expenses increased in 2008 primarily due to higher costs associated with our public company status.
 

 

                       Our tropical plant segment has not yet realized significant revenues.  Our   

                        nematode resistant variety is ready for sales but the genetically modified coffee

                        plants will not be ready for sale during the next 12 months.  We anticipate the

                        need for about $2 million in funding to complete  development of the tropical

                        plant varieties and to increase marketing of our coffee blends.  We received

                        $37,000 in advances from an officer during the quarter and $ 5,000 subsequent to

                        the end of the period. 

                                                                         8


 

           We are seeking $2 million in funding for 12 months of our business plan as follows:

 

                        Marketing                                    $    200,000

                        General and Administration        $    400,000

                        Research and Development         $ 1,400,000

 

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, it’s 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 for the year ended March 31, 2008, 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.  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.   No terms have been discussed, and we can neither predict the price or terms of any offering nor the amount of dilution existing shareholders may experience as a result of such offering.

 

                                                                              9



 

Forward looking information

 

            Our future operating results are subject to many factors, including:

 

                        œ           our ability to complete development of our tropical plant varieties;

 

                        œ           the impact of rapid and persistent fluctuations in the price of coffee beans; 

 

œ           general economic conditions and conditions which affect the market for coffee and coffee producers;

 

                        œ           our success in implementing our business strategy or introducing new products;

 

                        œ           our ability to attract and retain customers;

 

                        œ           the effects of competition from other coffee manufacturers and other beverage alternatives;

 

                        œ           changes in tastes and preferences for, or the consumption of, coffee;

 

                        œ           our ability to obtain additional financing; and

 

                        œ           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 annual 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.

 

Critical Accounting Policies

 

Our discussion and analysis of results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis, including those related to provisions for uncollectible accounts receivable, inventories, valuation of intangible assets and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The accounting policies that we follow are set forth in Note 1 to our financial statements. These accounting policies conform to accounting principles generally accepted in the United States, and have been consistently applied in the preparation of the financial statements. 

Off-Balance Sheet Arrangements

 

We have no off balance sheet arrangements.

 

Recently Enacted Accounting Pronouncements

 

                                                                                     10


 

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (“FAS 141R”) and Statement of Financial Accounting Standards No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51” (“FAS 160”). These new standards are the U.S. GAAP outcome of a joint project with the International Accounting Standards Board (“IASB”). FAS 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 and will significantly change the accounting for business combinations in a number of areas, including the treatment of contingent consideration, acquisition costs, intellectual property, research and development, and restructuring costs. FAS 160 establishes reporting requirements that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. The Company is currently evaluating the impact of adopting FAS 141R and FAS 160 on its Consolidated Financial Statements which are effective for the Company at the beginning of its fiscal year 2010.

 

 

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“FAS 161”), which requires enhanced disclosures about a company’s derivative and hedging activities. The Company currently is evaluating the impact of the adoption of the enhanced disclosures required by FAS 161 which is effective for the Company at the beginning of its fiscal year 2010.

 

 

In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162, “The Hierarchy of Generally Accepted Accounting Principles (“FAS 162”). The new standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with generally accepted accounting principles (“GAAP”) for nongovernmental entities in the United States. FAS 162 is effective 60 days following SEC approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.” The Company is currently evaluating the impact, if any, of adopting FAS 162, on its Consolidated Financial Statements

 

In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts – an Interpretation of FASB Statement No. 60 (“SFAS 163”).  SFAS 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claim liabilities.  This Statement also requires expanded disclosures about financial guarantee insurance contracts.  SFAS 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years.  The Company does not expect that the adoption of SFAS 163 will have a material impact on its financial statements.

 

Effect of Inflation and Foreign Currency Exchange

 

The Company has not experienced any effect of inflation in the price of its products. Nor has it experienced unfavorable profit reductions due to currency exchange fluctuations or inflation with its foreign customers.  All sales transactions to date have been denominated in U.S. Dollars.

 

Accounts Receivable and Allowance for Doubtful Accounts

 

Trade and other accounts receivable are reported at face value less any provisions for uncollectible accounts considered necessary. The Company estimates doubtful accounts on an item-to-item basis and includes over-aged accounts for any trade receivable as part of allowance for doubtful accounts, which are generally accounts that are ninety-days or more overdue. When accounts are deemed uncollectible, the account receivable is charged off and the allowance account is reduced accordingly.

 

Revenue Recognition

 

The Company recognizes revenues in accordance with the Securities and Exchange Commission, Staff Accounting Bulletin (SAB) number 104, Revenue Recognition .  SAB 104 clarifies application of U.S. generally accepted accounting principles to revenue transactions.

 Revenue on coffee and accessory sales is recognized as products are delivered to the customer or retailer.  That is, the arrangements of the sale are documented, the product is delivered to the customer or retailer, the pricing becomes final, and collectability is reasonably assured.  The Company may also recognize revenue from brokered coffee sales.  This revenue is recognized when the transaction is completed based on the contract terms.  Brokered coffee sales shall be recorded as the net commission recognizable to the Company.

                                                                                            11


                                    

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.    As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item. 

 

Item 4T . Controls and Procedures.   Disclosure Controls and Procedures Evaluation of disclosure controls and procedures.

 

 The Company's principal executive officer and its principal financial officer, based on their evaluation of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d -14 (c) as of June 30, 2008. , Based on this evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to management, including our principal executive officer/principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.                                                                 

 

Changes in internal controls . There were no significant changes in the Company's internal controls or in other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation.      

 

                 PART II. OTHER INFORMATION

 

Item 1. LEGAL PROCEEDINGS - None

 

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS - None

 

Item 3. DEFAULTS UPON SENIOR SECURITIES - None

 

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None

 

Item 5. OTHER INFORMATION - None

 

Item 6. EXHIBITS

 

Exhibits

31. Certifications, John Hales and Tyrus C. Young, Chairman of  

       the Board and CFO respectively.            

32. Certification pursuant to 18 U.S.C. Section 1350 of John Hales and Tyrus C. Young

 

 

                                                               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.

 

 

                                                                                    PACIFIC LAND AND

                                                                                           COFFEE CORPORATION

 

 

Date:    February 13, 2009                                           By: /s/ Tyrus C. Young                

                                                                                           Tyrus C. Young

                                                                                           Chief Financial Officer

                                                                                           (chief financial officer

                                                                                           and accounting officer and

                                                                                           duly authorized officer)

 

      

                 

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