UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2006
[ ]
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ________________
Commission File Number: 333-133427
PLASMATECH, INC.
(Name of small business issuer in its charter)
Nevada 56-2474226
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. mployer Identification No.)
incorporation or organization)
2764 Lake Sahara Drive, Suite 111
Las Vegas, Nevada 89117
(Address of principal executive offices)
(702) 851-1330
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act: None
----
Securities registered under Section 12(g) of the Exchange Act: Common Stock
------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities 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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. X
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State issuer's revenues for its most recent fiscal year: Nil
---
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) The most recent sales of the Company's common shares
via a private placement offering of the common equity were $7,000 on September
15, 2005, $14,000 on September 23, 2005 and $50,500 on September 1, 2006, with
an aggregate value of $71,500.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of the fiscal year ended December
31, 2006, the Company had 11,820,000 shares of common shares, $0.001 par value,
issued and outstanding.
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
TABLE OF CONTENTS PAGE
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PART I
Item 1. Description of Business........................................... 2
Item 2. Description of Property........................................... 2
Item 3. Legal Proceedings................................................. 2
Item 4. Submission of Matters to a Vote of Security Holders............... 2
PART II
Item 5. Market for Common Equity and Related Stockholder Matters........ 3
Item 6. Management's Discussion and Analysis or Plan of Operation....... 3
Item 7. Financial Statements............................................ 5
Balance Sheet............................................. 8
Statements of Operations.................................. 9
Statements of Stockholders' Equity........................ 10
Statements of Cash Flows.................................. 11
Notes to Financial Statements............................. 12
Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure............................ 14
Item 8A. Controls and Procedures........................................... 14
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons...... 15
Item 10. Executive Compensation............................................ 16
Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters................... 17
Item 12. Certain Relationships and Related Transactions.................... 17
Item 13. Exhibits.......................................................... 17
Item 14. Principal Accountant Fees and Services............................ 18
Signatures.................................................................. 18
FORWARD LOOKING STATEMENTS
Statements made in this Form 10-KSB that are not historical or current facts are
"forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We intend that
such forward-looking statements be subject to the safe harbors for such
statements. We wish to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. Any
forward-looking statements represent management's best judgment as to what may
occur in the future. However, forward-looking statements are subject to risks,
uncertainties and important factors beyond our control that could cause actual
results and events to differ materially from historical results of operations
and events and those presently anticipated or projected. We disclaim any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.
Available Information
PlasmaTech, Inc. files annual, quarterly, current reports, proxy statements, and
other information with the Securities and Exchange Commission (the
"Commission"). You may read and copy documents referred to in this Annual Report
on Form 10-KSB that have been filed with the Commission at the Commission's
Public Reference Room, 450 Fifth Street, N.W., Washington, D.C. You may obtain
information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. You can also obtain copies of our Commission
filings by going to the Commission's website at http://www.sec.gov.
PART I
Please note that throughout this Annual Report, and unless otherwise noted, the
words "we", "our" "us", the "Company", or "PlasmaTech", refer to PlasmaTech,
Inc.
Item 1. Description of Business.
Business Development: PlasmaTech, Inc. is a development stage company, organized
on July 14, 2004, in the State of Nevada, to enter into the design and sale of
illuminated signboard products using a plasma lighting technology produced in
China under a patented manufacturing process.
Since inception, we have not been involved in any bankruptcy, receivership or
similar proceeding nor has we been engaged in any material reclassification,
merger, consolidation or purchase or sale of any of our assets not in the
ordinary course of business.
The Company's principal business is the design and marketing of illuminated
signboards using plasma lighting technology. Plasma lighting technology enables
the reproduction of brightly illuminated, photo-quality images onto thin
plastic. Plasma light has the capability of competing in many markets currently
dominated by incandescent, fluorescent and neon lighting. We intend to secure
the exclusive North American and South American marketing rights for this plasma
lighting technology from the agent representing the Chinese patent holder of the
manufacturing process.
The Company's plasma products will compete with traditional signboard lighting
products. Our plasma products provide bright light applications while consuming
only a fraction of the energy required by conventional light sources. The
patented process used to manufacture our plasma products creates a plastic that
is thinner than a credit card but, when powered, illuminates to a brilliance
that is two and a half times brighter than neon lights. We will initially market
this technology to the trade show industry and focus on signage applications in
industrial trade show exhibits and displays such as illuminated banners and wall
displays. Future applications may include general promotional products and
safety products.
The Company is operated by its sole officer and director and does not have any
employees.
Item 2. Description of Property.
The Company's principle address is Suite 111, 2764 Lake Sahara Drive, Las Vegas,
Nevada, 89117. We rent shared office space. This property arrangement satisfies
our current needs and will be adequate up to the point that the Company begins
operations. At that point, we may be required to rent or lease commercial
property that is capable of providing adequate storage and office space. We
anticipate rent on a per month basis for adequate commercial space will cost the
Company approximately $1,500. This estimate is based upon local commercial
spaces with approximately 2,000 - 3,000 square feet of storage capability and
500 to 1,000 square feet of office space. However, we plan to continue to
utilize the current premises until that space is no longer adequate. Currently,
commercial property has not been secured by the Company and there can be no
assurance that adequate space will be found when needed or if adequate space can
be found at the price we have estimated.
Item 3. Legal Proceedings.
The Company is not a party to any pending legal proceedings and no such
proceedings are known to be contemplated.
No director, officer, or affiliate of the Company and no owner of record or
beneficial owner of more than 5.0% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
Item 4. Submission of Matters to a Vote of Security Holders.
There have been no matters submitted to the security holders for a vote.
-2-
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Currently, the Company's common shares are not listed on any exchange nor are
its common shares quoted on any public medium. There can be no assurance that
our common stock will ever be listed or quoted in the future or ever have a
market develop for its common stock.
As of the fiscal year ended December 31, 2006, the Company had thirty-six (36)
active shareholders of record. The Company has not paid cash dividends and has
no outstanding options.
Item 6. Management's Discussion, Financial Condition or Plan of Operation.
Plan of Operation
The Company has not yet generated any revenue from its operations. As of the
fiscal year ended December 31, 2006, the Company had $17,133 of cash. We
anticipate that our current cash holdings and cash generated from operations
will not be sufficient to satisfy our liquidity requirements over the next 12
months and we will seek to obtain additional funds. We will require working
capital to support our marketing campaigns, such as attendance at trade shows to
demonstrate its products, and pay legal and accounting fees. We anticipate
raising additional capital through the sale of our common stock, debt securities
or will seek alternative sources of financing.
If we are unable to obtain this additional financing, we may be required to
reduce the scope of our planned sales and marketing efforts, which could harm
the Company's financial condition and operating results. In addition, we may
require additional funds in order to fund a more rapid expansion, to develop new
or enhanced services or products or invest in complementary businesses,
technologies, services or products. This additional funding may not be available
on favorable terms, if at all.
There can be no assurance that we will be successful in raising additional
equity financing, and, thus, be able to satisfy the future cash requirements,
which primarily consist of working capital directed towards the development of
the website and marketing campaigns, as well as legal and accounting fees. The
Company depends upon capital to be derived from future financing activities such
as subsequent offerings of our shares. Management believes that if subsequent
private placements are successful, the Company will be able to generate revenue
from sales of the products and achieve liquidity within the following twelve to
fourteen months thereof. However, investors should be aware that this is based
upon speculation and there can be no assurance that we will ever be able reach a
level of profitability.
During the fiscal year ended December 31, 2006, the Company was primarily
focused on market research and customer identification. We also completed and
filed a registration statement so as to become a reporting issuer with the
Commission and we have maintained our filings since our Form SB-2 was approved
and became effective on June 2, 2006 at approximately 5:00 PM EST.
As of fiscal year ended December 31, 2006, the Company has not received any
orders for its product.
We intend to proceed with securing exclusive marketing rights for our plasma
products for North and South America. We estimate that these rights will require
a one time fee of approximately $10,000 and will require minimal annual sales
quotas.
We plan to continue our marketing activities during the next twelve months by
initiating the development of our website and by direct email and telephone
marketing activities directed at trade show design companies who may be
-3-
interested in purchasing or licensing our products. We estimate that it will
cost $10,000 to develop the website and $4,000 for direct email and telephone
marketing.
We anticipate visiting up to ten high profile trade show design companies to
solicit product orders from qualified customers. We estimate the travel cost to
attend these shows will be $20,000. After obtaining product orders from at least
ten "flagship" customers, we plan to obtain further financing, conduct more
extensive marketing activities, and solicit product orders from major trade show
design companies across North America. We intend to hire a commission sales
person to promote our product line within our primary market which is the trade
show management and promotions industry. We anticipate the sales cycle (the
length of time between initial customer contact and the completion of the sale)
will be a minimum of 90 days.
We also plan to design and order additional samples of our plasma lighting
products. We will purchase additional samples from various manufacturers in
China and refine our technical requirements, specifications and pricing based on
customer needs as determined from our marketing activities. We estimate that
these samples will cost $22,000. We will also continue to identify a company or
companies in China that will be able to manufacture and supply the illuminated
signboards according to our specifications and standards. We anticipate that it
will be necessary to travel to China in order to finalize contractual terms and
conditions with a chosen sign supplier(s). While in China, we will also initiate
arrangements for the shipping and distribution of our products from the factory
in China to our customers in North America. The cost of securing product and
arranging delivery is expected to total $7,000.
The Company does not expect the purchase or sale of any significant equipment
and has no current material commitments, nor has it generated any revenue since
its inception.
We have no current plans, preliminary or otherwise, to merge with any other
entity.
As the Company expands its business, it will likely incur losses. We plan on
funding these losses through revenues generated through our marketing
activities. If we are unable to satisfy our capital requirements through our
revenue production or if we are unable to raise additional capital through the
sale of our common shares, we may have to borrow funds in order to sustain our
business. There can be no assurance or guarantee given that we will be able to
borrow funds because we are a new business and the future success of the Company
is highly speculative.
Off Balance Sheet Arrangement
As of the date of this Form 10-KSB, the current funds available to the Company
will not be sufficient to continue maintaining a reporting status. The cost to
maintain the reporting status of the Company for the next twelve months has been
estimated at $15,000. Our officer and director, Christopher Brough, has
indicated to us that he may be willing to provide the funds required to maintain
the reporting status in the form of a non-secured loan for the next twelve
months as the expenses are incurred, if no other proceeds are obtained by the
Company. However, there is no contract in place or written agreement securing
this agreement.
Other than the above described situation, the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. The term
"off-balance sheet arrangement" generally means any transaction, agreement or
-4-
other contractual arrangement to which an entity unconsolidated with the Company
is a party, under which the Company has (i) any obligation arising under a
guarantee contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.
Item 7. Financial Statements.
-5-
PlasmaTech, Inc.
(A Development Stage Company)
FINANCIAL STATEMENTS
DECEMBER 31, 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.................... 7
BALANCE SHEETS............................................................. 8
STATEMENTS OF OPERATIONS................................................... 9
STATEMENT OF STOCKHOLDERS' EQUITY.......................................... 10
STATEMENTS OF CASH FLOWS................................................... 11
NOTES TO FINANCIAL STATEMENTS.............................................. 12
-6-
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Stockholders and Board of Directors of PlasmaTech, Inc.
We have audited the accompanying balance sheets of PlasmaTech, Inc. (a
development stage company) as of December 31, 2006 and 2005, and the statements
of operations, stockholders' equity and cash flows and for the years ended
December 31, 2006 and 2005 and for the period from July 14, 2004 (inception)
through December 31, 2006. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2006 and
2005, and the results of its operations and its cash flows and for the years
ended December 31, 2006 and 2005 and for the period from July 14, 2004
(inception) through December 31, 2006 in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company is in the development stage and has incurred
losses since inception and has limited working capital available raising
substantial doubt about the Company's ability to continue as a going concern.
The ability of the Company to continue as a going concern is dependent on
raising capital to fund its business plan and ultimately to attain profitable
operations. Management's plans in regard to these matters are also described in
Note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
"DMCL"
DALE MATHESON CARR-HILTON LABONTE LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
March 8, 2007
-7-
PLASMATECH, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, December 31,
2006 2005
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 17,133 $ 14,197
Prepaid 604 --
----------- -----------
$ 17,737 $ 14,197
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 8,243 $ 7,192
Due to related party (Note 4) 2,704 2,904
----------- -----------
10,947 10,096
----------- -----------
STOCKHOLDERS' EQUITY
Capital stock (Note 3)
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
11,820,000 shares of common stock (2005 - 9,800,000) 11,820 9,800
Additional paid-in capital 59,680 11,200
Share subscription receivable --
(7,000)
Deficit accumulated during the development stage (64,710) (9,899)
----------- -----------
6,790 4,101
----------- -----------
$ 17,737 $ 14,197
=========== ===========
The accompanying notes are an integral part of these financial statements
-8-
PLASMATECH, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative
results of
perations from
Year ended July 14, 2004
---------------------------- (inception) to
December 31, December 31, December 31,
2006 2005 2006
------------ ------------ ------------
EXPENSES
Office and general $ 8,251 $ 1,715 $ 10,766
Consulting fees 28,700 -- 28,700
Professional fees 17,860 6,235 25,244
------------ ------------ ------------
NET LOSS $ (54,811) $ (7,950) $ (64,710)
============ ============ ============
BASIC AND DILUTED NET LOSS PER SHARE $ (0.00) $ (0.00)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 10,475,178 2,811,507
============ ============
The accompanying notes are an integral part of these financial statements.
-9-
PLASMATECH, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM JULY 14, 2004 (INCEPTION) TO DECEMBER 31, 2006
Deficit
Accumulated
Common Stock Additional Share During the
----------------------- Paid-in Subscription Development
Shares Amount Capital Receivable Stage Total
---------- ---------- ---------- ---------- ---------- ----------
Balance, July 14, 2004 -- $ -- $ -- $ -- $ -- $ --
Net loss -- -- -- -- (1,949) (1,949)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 2004 -- -- -- -- (1,949) (1,949)
---------- ---------- ---------- ---------- ---------- ----------
Common stock issued for cash at $0.001 per
share - September 15, 2005 7,000,000 7,000 -- -- -- 7,000
Common stock issued for cash at $0.005 per
share - September 23, 2005 2,800,000 2,800 11,200 -- -- 14,000
Share subscription receivable -- -- -- (7,000) -- (7,000)
Net loss -- -- -- -- (7,950) (7,950)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 2005 9,800,000 9,800 11,200 (7,000) (9,899) 4,101
---------- ---------- ---------- ---------- ---------- ----------
Share subscription receivable -- -- -- 7,000 -- 7,000
Common stock issued for cash at $0.025 per
share - September 1, 2006 2,020,000 2,020 48,480 -- -- 50,500
Net loss -- -- -- -- (54,811) (54,811)
---------- ---------- ---------- ---------- ---------- ----------
Balance, December 31, 2006 11,820,000 $ 11,820 $ 59,680 $ -- $ (64,710) $ 6,790
========== ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements
-10-
PLASMATECH, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Cumulative
results
of operations
from
Year ended July 14, 2004
-------------------------- (inception) to
December 31, December 31, December 31,
2006 2005 2006
----------- ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (54,811) $ (7,950) $ (64,710)
Changes in operating assets and liabilities
Accounts payable and accrued liabilities 1,051 7,192 8,243
Prepaid (604) -- (604)
Due to related party (200) 955 2,704
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (54,564) 197 (54,367)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 57,500 14,000 71,500
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 57,500 14,000 71,500
----------- ----------- -----------
NET INCREASE IN CASH 2,936 14,197 17,133
CASH, BEGINNING 14,197 -- --
----------- ----------- -----------
CASH, ENDING $ 17,133 $ 14,197 $ 17,133
=========== =========== ===========
Supplemental cash flow information:
Cash paid for:
Interest $ -- $ -- $ --
=========== =========== ===========
Income taxes $ -- $ -- $ --
=========== =========== ===========
The accompanying notes are an integral part of these financial statements
-11-
PLASMATECH, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2006
-------------------------------------------------------------------------------
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
--------------------------------------------------------------------------------
PlasmaTech, Inc. (the "Company") is in the initial development stage and has
incurred losses since inception totaling $64,710. The Company was incorporated
on July 14, 2004 in the State of Nevada. The Company was organized to enter into
the design and sale of illuminated signboard products. The Company intends to
enter into the production of photo quality images on plastic that light up in a
pre-programmed animated series, requiring minimal amounts of electricity. The
Company's initial market focus of this technology will be for trade show exhibit
and installation designers within North and South America. To date the Company
has had no business operations.
The ability of the Company to continue as a going concern is dependent on
raising capital to fund its business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
Company's ability to continue as a going concern. The Company is funding its
initial operations by way of issuing Founders' shares and entering into a
private placement offering for up to 10,000,000 common shares at $0.005 per
share. As of December 31, 2006, the Company had sold 11,820,000 shares in
aggregate, of which 7,000,000 founders' shares were issued at $0.001 per share
for proceeds of $7,000 and 2,800,000 shares were issued at $0.005 per share for
net proceeds of $14,000 pursuant to the private placement offering. An
additional 2,020,000 shares were issued at $0.025 per share for net proceeds of
$50,500 pursuant to a secondary private placement offering.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
Basis of Presentation
These financial statements are presented in United States dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Income Taxes
The Company follows the liability method of accounting for income taxes in
accordance with Statements of Financial Accounting Standards ("SFAS") No.109,
"Accounting for Income Taxes." Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax balances. Deferred tax assets and
liabilities are measured using enacted or substantially enacted tax rates
expected to apply to the taxable income in the years in which those differences
are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
-12-
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
--------------------------------------------------------------------------------
Stock-based Compensation
The Company has not adopted a stock option plan and has not granted any stock
options. Accordingly no stock-based compensation has been recorded to date.
Recent Accounting Pronouncements
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized gains and losses on items for which the fair value option has been
elected are reported in earnings. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company is currently assessing the impact
of SFAS No. 159 on its financial position and results of operations.
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans." This Statement requires
an employer to recognize the over funded or under funded status of a defined
benefit post retirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position, and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income. SFAS No. 158 is effective for fiscal years ending after December 15,
2006.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measures". This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (GAAP), expands disclosures about
fair value measurements, and applies under other accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 does not require any new
fair value measurements. However, the FASB anticipates that for some entities,
the application of SFAS No. 157 will change current practice. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, which for the Company would be the fiscal year beginning
January 1, 2008. The Company is currently evaluating the impact of SFAS No. 157
but does not expect that it will have a material impact on its financial
statements.
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108,
"Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements." SAB No. 108 addresses how
the effects of prior year uncorrected misstatements should be considered when
quantifying misstatements in current year financial statements. SAB No. 108
requires companies to quantify misstatements using a balance sheet and income
statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006.
NOTE 3 - CAPITAL STOCK
--------------------------------------------------------------------------------
The Company's authorized capitalization is 75,000,000 common shares with a par
value of $0.001 per share. No preferred shares have been authorized or issued.
As of December 31, 2006, the Company has not granted any stock options and has
not recorded any stock-based compensation.
During the period ended December 31, 2005, a director purchased 7,000,000 shares
of common stock in the Company at $0.001 per share with proceeds to the Company
totalling $7,000. As at December 31, 2005 the proceeds were outstanding and were
reflected as subscription receivable. On January 19, 2006 the funds were paid by
the director to the Company.
Private Placement
On August 10, 2005, the Company authorized a private placement offering of up to
10,000,000 shares of common stock at a price of $0.005 per share. The total
amount raised in this financing was $50,000.
-13-
NOTE 3 - CAPITAL STOCK (continued)
--------------------------------------------------------------------------------
On September 1, 2006, the Company issued 2,020,000 shares of common stock at a
price of $0.025 per share to a number of shareholders through a secondary
private placement offering. The Company received $50,500 in proceeds from the
sale of its stock.
As of December 31, 2006, the Company had issued 11,820,000 common shares and had
received $71,500 in proceeds from the sale of its stock.
NOTE 4 - RELATED PARTY TRANSACTIONS
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The Company has received advances from a director of the Company to pay for
operating costs. The amounts due are unsecured and non-interest bearing with no
set terms of repayment. The amount outstanding as of December 31, 2006 was
$2,704 (December 31, 2005 - $2,904).
NOTE 5 - INCOME TAXES
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As of December 31, 2006, the Company had net operating loss carry forwards of
approximately $65,000 that may be available to reduce future years' taxable
income and will expire commencing in 2024. Availability of loss usage is subject
to change of ownership limitations under Internal Revenue Code 382. Future tax
benefits which may arise as a result of these losses have not been recognized in
these financial statements, as their realization is determined not likely to
occur and accordingly, the Company has recorded a full valuation allowance for
the deferred tax asset relating to these tax loss carryforwards.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.
None.
Item 8A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our chief executive officer and chief financial officer, Christopher Brough,
conducted an evaluation of the effectiveness of the design and operation of the
Company's disclosure controls and procedures, as defined in Rules 13a-15(e) and
Rule 15d-15(e) under the Exchange Act. Based upon his evaluation as of December
31, 2006, he concluded that those disclosure controls and procedures are
effective.
Internal Control over Financial Reporting
There have been no changes in the Company's internal control over financial
reporting during the fiscal year ended December 31, 2006 that have materially
affected, or are reasonably likely to affect, the Company's internal control
over financial reporting.
Management's Report on Internal Control over Financial Reporting
The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rule 13a-15(f)
under the Exchange Act. Our internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
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United States of America. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.
We have assessed the effectiveness of the Company's internal control over
financial reporting as of the fiscal year ended December 31, 2006. In making the
assessment, we used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in "Internal Control-Integrated
Framework." Based on that assessment, we have concluded that, as of the fiscal
year ended December 31, 2006, our internal control over financial reporting is
effective based on those criteria.
Our assessment of the effectiveness of our internal control over financial
reporting as of the fiscal year ended December 31, 2006 has been audited by Dale
Matheson Carr-Hilton Labonte LLP, Chartered Accountants, an independent
registered accounting firm, as stated in their report, which is included herein.
PART III
Item 9. Directors, Executive Officers, Promoters, and Control Persons.
Identification of Directors and Executive Officers
Our directors and executive officers, their ages and term served are as follows:
Name Age Term Served Title
---- --- ----------- -----
Christopher J. Brough 63 Since inception President, Secretary Treasurer,
Principal Executive Officer,
Principal Financial Officer
and sole member of the Board of Directors
There are no other persons nominated or chosen to become directors or executive
officers, nor do we have any employees other than above mentioned officer and
director.
Our directors hold office until the next annual meeting of shareholders and the
election and qualification of their successors. Directors receive no
compensation for serving on the board of directors other than reimbursement of
reasonable expenses incurred in attending meetings. Officers are appointed by
the board of directors and serve at the discretion of the board.
Officer and Director Background:
Christopher J. Brough, President, CEO, Director, Secretary/Treasurer
Christopher Brough is a globally recognized award-winning leader and innovator
in the fields of advertising campaigns and film and television production. Mr.
Brough's vast experience led him to co-found three of Canada's largest and most
prolific television production companies: Mainframe Entertainment, the world's
first computer animated television studio, producing such hits as ReBoot,
Transformers, Barbie and others, BLT Productions Ltd, producer of the long
running sci-fi hit Andromeda, and the Sextant Entertainment Group. Mr. Brough
has been nominated for seven Gemini awards, won five, and was inducted into the
Smithsonian Institute's CyberWorld Hall of Fame by Microsoft's Bill Gates. Mr.
Brough was also responsible for producing prime-time series and animated
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specials such as Teddy Ruxpin, which he co-created. Teddy Ruxpin held six top
positions on Billboard's Home Video Sales Charts for over 12 months, and won a
USDA Award for Best Non-Movie Children's Program in 1987, selling in excess of
10 million video units worldwide. He currently serves on the Board of Governors
for the Emily Carr Institute of Art and Design, and was the founding President
and Board Director of New Media BC, representing over two hundred technology
companies throughout British Columbia.
Mr. Brough started his career in advertising as a commercial producer/director
working with globally recognized clients, such as Clairol, Canada Dry and
Anhauser Busch. His activities over the last five years include the executive
production of the award winning series Aaagh! It's the Mr. Hell Show for the
Comedy Network and the BBC in the United Kingdom, and the YTV/Granada Television
series production of Big Teeth Bad Breath.
Mr. Brough is not a director of any other reporting company.
Significant Employees
The Company does not, at present, have any employees other than the current
officer and director. We have not entered into any employment agreements, as we
currently do not have any employees other than the current officer and director.
Family Relations
There are no family relationships among the directors and officers of the
Company.
Involvement in Legal Proceedings
No executive officer or director of the Company has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding that is currently pending.
No executive officer or director of the Company is the subject of any pending
legal proceedings.
No executive officer or director of the Company is involved in any bankruptcy
petition by or against any business in which they are a general partner or
executive officer at this time or within two years of any involvement as a
general partner, executive officer, or director of any business.
Item 10. Executive Compensation.
Our current executive officer and director does not receive any compensation and
have not received any restricted shares awards, options, or any other payouts.
As such, we have not included a Summary Compensation Table.
There are no current employment agreements between the Company and our executive
officer or director. Our executive officer and director has agreed to work
without remuneration until such time as we receive sufficient revenues necessary
to provide proper salaries to the officer and compensate the director for
participation. Our executive officer and the board of directors have the
responsibility to determine the timing of remuneration for key personnel based
upon such factors as positive cash flow to include shares sales, product sales,
estimated cash expenditures, accounts receivable, accounts payable, notes
payable, and a cash balance of not less than $50,000 at each month end. When
positive cash flow reaches $15,000 at each month end and appears sustainable,
the board of directors will re-address compensation for key personnel and enact
a plan at that time which will benefit the Company as a whole. At this time, we
cannot accurately estimate when sufficient revenues will occur to implement this
compensation, or the exact amount of compensation.
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There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Company in the event of retirement at
normal retirement date pursuant to any presently existing plan provided or
contributed to by the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management Related
Shareholder Matters.
The following table sets forth certain information with respect to the
beneficial ownership of our common shares as it relates to our named director
and executive officer, and each person known to the Company to be the beneficial
owner of more than five percent (5%) of said securities, and all of our
directors and executive officers as a group:
Name and Position Shares Percent Security
----------------- ------ ------- --------
Christopher J. Brough
President and Director 7,000,000 59.2% Common
================================================================================
Officers and Directors as
a Group (1) 7,000,000 59.2% Common
The address for Christopher J. Brough is 4643 Caulfeild Drive, West Vancouver,
BC, Canada V7W 1E9
The above referenced common shares were paid for and issued in September 2005,
for consideration of $0.001 per share total consideration of $7,000.
Item 12. Certain Relationships and Related Transactions.
Currently, there are no contemplated transactions that the Company may enter
into with our officers, directors or affiliates. If any such transactions are
contemplated, we will file such disclosure in a timely manner with the
Commission on the proper form making such transaction available for the public
to view.
The Company has no formal written employment agreement or other contracts with
our current officer and there is no assurance that the services to be provided
by him will be available for any specific length of time in the future. Mr.
Brough anticipates devoting, at a minimum, ten to fifteen percent of his
available time to the Company's affairs. The amounts of compensation and other
terms of any full time employment arrangements would be determined, if and when,
such arrangements become necessary.
Item 13. Exhibits.
The following exhibits are incorporated into this Form 10-KSB Annual Report:
Exhibit
No. Description
-------- -----------
3.1 Articles of Incorporation (1)
3.2 Bylaws of PlasmaTech, Inc. (2)
31.1 Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange Act of 1934.
31.2 Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange Act of 1934.*
32.1 Certification of Chief Executive Officer Under Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2 Certification of Chief Financial Officer Under Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.**
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(1) Incorporated by reference from the Company's Form SB-2 filed with the
Commission on April 20, 2006.
(2) Incorporated by reference from the Company's Form SB-2 filed with the
Commission on April 20, 2006.
* Included in Exhibit 31.1
** Included in Exhibit 32.1
Item 14. Principal Accounting Fees and Services.
During the fiscal year ended December 31, 2006, we incurred approximately
$13,000 in fees to our principal independent accountant for professional
services rendered in connection with the audit of our financial statements for
the fiscal year ended December 31, 2006 and for the review of our financial
statements for the quarters ended March 31, 2006, June 30, 2006 and September
30, 2006.
During the fiscal year ended December 31, 2006, we did not incur any other fees
for professional services rendered by our principal independent accountant for
all other non-audit services which may include, but not limited to, tax-related
services, actuarial services or valuation services.
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PlasmaTech, Inc.
Dated: April 12, 2007 By: /s/ Christopher J. Brough
---------------------------------------------
Christopher J. Brough
President, Secretary Treasury,
Principal Executive Officer and
Principal Financial Officer and Sole Director
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