ONE GROUP HOSPITALITY, INC.
10-Ks and 10-Qs
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U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-K
(Mark
One)
x
ANNUAL REPORT UNDER
SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended December 31, 2009
o
TRANSITION REPORT UNDER
SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from ______________ to ______________
Commission
File Number 000-52651
PLASTRON
ACQUISITION CORP. II
(Exact
name of registrant as specified in its charter)
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Delaware
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14-1961545
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(State
or other jurisdiction of
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(I.R.S.
Employer
|
|
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incorporation
or organization)
|
Identification
No.)
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c/o
Michael Rapp, 712 Fifth Avenue, New York, NY, 10019
(Address
of principal executive offices)
(212)
277-5301
(Registrant’s
telephone number, including area code)
Securities
registered under Section 12(b) of the Exchange Act:
None.
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, $0.0001 par value per share
(Title of
Class)
Check
whether the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act. Yes
o
No
x
Check
whether the registrant is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act.
o
Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes
x
No
o
Check
whether the registrant has submitted electronically and posted on its corporate
website, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files). Yes
o
No
o
Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
o
Check
whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Accelerated
Filer
o
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Non-accelerated
Filer
o
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Smaller
Reporting Company
x
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(Do
not check if a smaller reporting company.)
Check
whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes
x
No
As of
December 31, 2009, there were no non-affiliate holders of common stock of the
Company.
APPLICABLE ONLY TO
CORPORATE REGISTRANTS
As of
April 14, 2010, there were 2,061,856 shares of common stock, par value $.0001,
outstanding.
FORWARD-LOOKING
STATEMENTS
Certain
statements made in this Annual Report on Form 10-K are “forward-looking
statements” (within the meaning of the Private Securities Litigation Reform Act
of 1995) regarding the plans and objectives of management for future operations.
Such statements involve known and unknown risks, uncertainties and other factors
that may cause actual results, performance or achievements of Plastron
Acquisition Corp. II (the “Company”) to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. The forward-looking statements included herein are
based on current expectations that involve numerous risks and uncertainties. The
Company's plans and objectives are based, in part, on assumptions involving the
continued expansion of business. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
Company. Although the Company believes its assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance the forward-looking
statements included in this Report will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
2
Plastron
Acquisition Corp. II (“we”, “us”, “our”, the "Company") was incorporated in the
State of Delaware on January 24, 2006 and maintains its principal executive
office at c/o Michael Rapp, 712 Fifth Avenue, New York, NY 10019. The
Company was formed as a vehicle to pursue a business combination through the
acquisition of, or merger with, an operating business. The Company filed a
Registration Statement on Form 10-SB with the U.S. Securities and Exchange
Commission (the “SEC”) on May 15, 2007, and since its effectiveness, the Company
has focused its efforts to identify a possible business
combination. The business purpose of the Company is to seek the
acquisition of, or merger with, an existing company. The Company
selected December 31 as its fiscal year end.
The
Company is currently considered to be a "blank check" company. The U.S.
Securities and Exchange Commission (the “SEC”) defines those companies as "any
development stage company that is issuing a penny stock, within the meaning of
Section 3 (a)(51) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that has no specific business plan or purpose, or has
indicated that its business plan is to merge with an unidentified company or
companies." Under SEC Rule 12b-2 under the Exchange Act, the Company also
qualifies as a “shell company,” because it has no or nominal assets (other than
cash) and no or nominal operations. Many states have enacted
statutes, rules and regulations limiting the sale of securities of "blank check"
companies in their respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in our securities, either
debt or equity, until we have successfully concluded a business combination. The
Company intends to comply with the periodic reporting requirements of the
Exchange Act for so long as it is subject to those requirements.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. The Company’s principal business objective
for the next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict its potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
The analysis of new business
opportunities will be undertaken by or under the supervision of the sole
officers and director of the Company. As of this date, the Company
has not entered into any definitive agreement with any party, nor have there
been any specific discussions with any potential business combination candidate
regarding business opportunities for the Company. The Company has
unrestricted flexibility in seeking, analyzing and participating in potential
business opportunities. In its efforts to analyze potential acquisition targets,
the Company will consider the following kinds of factors:
(a) Potential
for growth, indicated by new technology, anticipated market expansion or new
products;
(b) Competitive
position as compared to other firms of similar size and experience within the
industry segment as well as within the industry as a whole;
(c) Strength
and diversity of management, either in place or scheduled for
recruitment;
(d) Capital
requirements and anticipated availability of required funds, to be provided by
the Company or from operations, through the sale of additional securities,
through joint ventures or similar arrangements or from other
sources;
3
(e) The
cost of participation by the Company as compared to the perceived tangible and
intangible values and potentials;
(f) The
extent to which the business opportunity can be advanced;
(g) The
accessibility of required management expertise, personnel, raw materials,
services, professional assistance and other required items; and
(h) Other
relevant factors.
In
applying the foregoing criteria, no one of which will be controlling, management
will attempt to analyze all factors and circumstances and make a determination
based upon reasonable investigative measures and available data. Potentially
available business opportunities may occur in many different industries, and at
various stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Company's limited capital available for investigation,
the Company may not discover or adequately evaluate adverse facts about the
opportunity to be acquired.
FORM OF
ACQUISITION
The
manner in which the Company participates in an opportunity will depend upon the
nature of the opportunity, the respective needs and desires of the Company and
the promoters of the opportunity, and the relative negotiating strength of the
Company and such promoters.
It is
likely that the Company will acquire its participation in a business opportunity
through the issuance of common stock or other securities of the Company.
Although the terms of any such transaction cannot be predicted, it should be
noted that in certain circumstances the criteria for determining whether or not
an acquisition is a so-called "tax free" reorganization under Section 368(a)(1)
of the Internal Revenue Code of 1986, as amended (the "Code") depends upon
whether the owners of the acquired business own 80% or more of the voting stock
of the surviving entity. If a transaction were structured to take advantage of
these provisions rather than other "tax free" provisions provided under the
Code, all prior stockholders would in such circumstances retain 20% or less of
the total issued and outstanding shares of the surviving entity. Under other
circumstances, depending upon the relative negotiating strength of the parties,
prior stockholders may retain substantially less than 20% of the total issued
and outstanding shares of the surviving entity. This could result in substantial
additional dilution to the equity of those who were stockholders of the Company
prior to such reorganization.
The
present stockholders of the Company will likely not have control of a majority
of the voting securities of the Company following a reorganization transaction.
As part of such a transaction, all or a majority of the Company's directors may
resign and one or more new directors may be appointed without any vote by
stockholders.
In the
case of an acquisition, the transaction may be accomplished upon the sole
determination of management without any vote or approval by stockholders. In the
case of a statutory merger or consolidation directly involving the Company, it
will likely be necessary to call a stockholders' meeting and obtain the approval
of the holders of a majority of the outstanding securities. The necessity to
obtain such stockholder approval may result in delay and additional expense in
the consummation of any proposed transaction and will also give rise to certain
appraisal rights to dissenting stockholders. Most likely, management will seek
to structure any such transaction so as not to require stockholder
approval.
4
It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation might not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
to the Registrant of the related costs incurred.
We
presently have no employees apart from our sole officer and
director. Our sole officer and director is engaged in outside
business activities and anticipate that they will devote to our business very
limited time until the acquisition of a successful business opportunity has been
identified. We expect no significant changes in the number of our employees
other than such changes, if any, incident to a business
combination.
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
The
Company neither rents nor owns any properties. The Company utilizes the office
space and equipment of its management at no cost. Management estimates such
amounts to be immaterial. The Company currently has no policy with
respect to investments or interests in real estate, real estate mortgages or
securities of, or interests in, persons primarily engaged in real estate
activities.
To the best knowledge of our officers
and directors, the Company is not a party to any legal proceeding or
litigation.
None.
Common
Stock
Our
Certificate of Incorporation authorizes the issuance of up to 75,000,000 shares
of common stock, par value $.0001 per share (the “Common Stock”). The
Common Stock is not listed on a publicly-traded market. As of April
14, 2010, there were 4 holders of record of the Common Stock.
5
Preferred
Stock
Our
Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
of preferred stock, par value $.0001 per share (the “Preferred
Stock”). The Company has not yet issued any of its preferred
stock.
Dividend
Policy
The
Company has not declared or paid any cash dividends on its common stock and does
not intend to declare or pay any cash dividend in the foreseeable future. The
payment of dividends, if any, is within the discretion of the Board of Directors
and will depend on the Company’s earnings, if any, its capital requirements and
financial condition and such other factors as the Board of Directors may
consider.
Securities
Authorized for Issuance under Equity Compensation Plans
The
Company does not have any equity compensation plans or any individual
compensation arrangements with respect to its common stock or preferred stock.
The issuance of any of our common or preferred stock is within the discretion of
our Board of Directors, which has the power to issue any or all of our
authorized but unissued shares without stockholder approval.
Recent
Sales of Unregistered Securities
The
Company did not sell any equity securities that were not registered under the
Securities Act during the quarter ended December 31, 2009.
On May
14, 2009, the Company sold 61,856 shares of Common Stock to Charles
Allen. The Company sold such shares of Common Stock to Mr. Allen, for
an aggregate purchase price equal to $927.84. The Company sold these
shares of Common Stock to both Mr. Allen under the exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”) and Regulation D promulgated thereunder.
No
securities have been issued for services. Neither the Registrant nor any person
acting on its behalf offered or sold the securities by means of any form of
general solicitation or general advertising. No services were performed by any
purchaser as consideration for the shares issued.
Issuer
Purchases of Equity Securities
None.
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide this information.
The
Company was organized as a vehicle to investigate and, if such investigation
warrants, acquire a target company or business seeking the perceived advantages
of being a publicly held corporation. Our principal business objective for the
next 12 months and beyond such time will be to achieve long-term growth
potential through a combination with a business rather than immediate,
short-term earnings. The Company will not restrict our potential candidate
target companies to any specific business, industry or geographical location
and, thus, may acquire any type of business.
6
The Company currently does not engage
in any business activities that provide cash flow. During the next
twelve months we anticipate incurring costs related to:
(i)
filing Exchange Act reports,
and
(ii) investigating,
analyzing and consummating an acquisition.
We believe we will be able to meet
these costs through use of funds in our treasury, through deferral of fees by
certain service providers and additional amounts, as necessary, to be loaned to
or invested in us by our stockholders, management or other
investors.
The Company may consider acquiring a
business which has recently commenced operations, is a developing company in
need of additional funds for expansion into new products or markets, is seeking
to develop a new product or service, or is an established business which may be
experiencing financial or operating difficulties and is in need of additional
capital. In the alternative, a business combination may involve the acquisition
of, or merger with, a company which does not need substantial additional capital
but which desires to establish a public trading market for its shares while
avoiding, among other things, the time delays, significant expense, and loss of
voting control which may occur in a public offering.
Any target business that is selected
may be a financially unstable company or an entity in its early stages of
development or growth, including entities without established records of sales
or earnings. In that event, we will be subject to numerous risks inherent in the
business and operations of financially unstable and early stage or potential
emerging growth companies. In addition, we may effect a business combination
with an entity in an industry characterized by a high level of risk, and,
although our management will endeavor to evaluate the risks inherent in a
particular target business, there can be no assurance that we will properly
ascertain or assess all significant risks.
The Company anticipates that the
selection of a business combination will be complex and extremely risky. Because
of general economic conditions, rapid technological advances being made in some
industries and shortages of available capital, our management believes that
there are numerous firms seeking even the limited additional capital which we
will have and/or the perceived benefits of becoming a publicly traded
corporation. Such perceived benefits of becoming a publicly traded corporation
include, among other things, facilitating or improving the terms on which
additional equity financing may be obtained, providing liquidity for the
principals of and investors in a business, creating a means for providing
incentive stock options or similar benefits to key employees, and offering
greater flexibility in structuring acquisitions, joint ventures and the like
through the issuance of stock. Potentially available business combinations may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Liquidity
and Capital Resources
As of December 31, 2009, the Company
had assets equal to $6,559, comprised exclusively of cash and cash
equivalents. This compares with assets of $582, comprised exclusively
of cash and cash equivalents, as of December 31, 2008. The Company’s
current liabilities as of December 31, 2009 totaled $55,412, comprised
exclusively of notes payable, accrued interest and accounts
payable. This compares with current liabilities equal to $25,390,
comprised exclusively of notes payable, accrued interest and accounts payable as
of December 31, 2008.
The Company can provide
no assurance that it can continue to satisfy its cash requirements for at least
the next twelve months.
7
The following is a summary of the
Company's cash flows provided by (used in) operating, investing, and financing
activities for the years ended December 31, 2009 and 2008 and for the cumulative
period from January 24, 2006 (Inception) to December 31, 2009.
|
Fiscal Year
Ended
December 31,
2009
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Fiscal Year
Ended
December 31,
2008
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For the
Cumulative
Period from
Inception
(January 24,
2006) to
December 31,
2009
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||||||||||
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Net
Cash (Used in) Operating Activities
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$ | (21,451 | ) | $ | (11,262 | ) | $ | (73,369 | ) | |||
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Net
Cash (Used in) Investing Activities
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- | - | - | |||||||||
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Net
Cash Provided by Financing Activities
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$ | 27,428 | $ | 10,000 | $ | 79,928 | ||||||
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Net
Increase (Decrease) in Cash and Cash Equivalents
|
$ | 5,977 | $ | (1,262 | ) | $ | 6,559 | |||||
The
Company has nominal assets and has generated no revenues since inception. The
Company is also dependent upon the receipt of capital investment or other
financing to fund its ongoing operations and to execute its business plan of
seeking a combination with a private operating company. In addition, the Company
is dependent upon certain related parties to provide continued funding and
capital resources. If continued funding and capital resources are unavailable at
reasonable terms, the Company may not be able to implement its plan of
operations.
Results
of Operations
The
Company has not conducted any active operations since inception, except for its
efforts to locate suitable acquisition candidates. No revenue has been
generated by the Company from Inception (January 24, 2006) to December 31,
2009. It is unlikely the Company will have any revenues unless it is
able to effect an acquisition or merger with an operating company, of which
there can be no assurance. It is management's assertion that these
circumstances may hinder the Company's ability to continue as a going
concern. The Company’s plan of operation for the next twelve months shall
be to continue its efforts to locate suitable acquisition
candidates.
For the
fiscal years ended December 31, 2009 and 2008, the Company had a net loss of
$24,973 and $13,201 consisting of legal, accounting, audit, and other
professional service fees incurred in relation to the preparation and filing of
the Company’s periodic reports.
For the
cumulative period from Inception (January 24, 2006) to December 31, 2009, the
Company had a net loss of $79,781 comprised exclusively of legal, accounting,
audit, and other professional service fees incurred in relation to the formation
of the Company, the filing of the Company’s Registration Statement on Form 10-SB
in May of 2007, and the filing of the Company’s periodic reports.
Off-Balance
Sheet Arrangements
The Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company’s financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to
investors.
8
Contractual
Obligations
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.
As a “smaller reporting company” as
defined by Item 10 of Regulation S-K, the Company is not required to provide
this information.
Audited financial statements begin on
the following page of this report.
9
INDEX
TO FINANCIAL STATEMENTS
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Page
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Report
of Independent Registered Public Accounting Firm
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F-2
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Financial
Statements:
|
|
|
Balance
Sheets
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F-3
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|
Statements
of Operations
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F-4
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|
Statement
of Changes in Stockholders' Equity (Deficit)
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F-5
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Statements
of Cash Flows
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F-6
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Notes
to Financial Statements
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F-7
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F-1
De
Joya Griffith & Company, LLC
CERTIFIED
PUBLIC ACCOUNTANTS & CONSULTANTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders
Plastron
Acquisition Corp II
New York,
New York
We have
audited the accompanying balance sheets of Plastron Acquisition Corp II (A
Development Stage Company) as of December 31, 2009 and 2008, and the related
statements of operations, stockholders’ deficit, and cash flows for the years
then ended and from inception (January 24, 2006) through December 31,
2009. 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 audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).
Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
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 audit provides a reasonable basis
for our opinion.
In our
opinion, based on our audit, the financial statements referred to above present
fairly, in all material respects, the financial position of Plastron Acquisition
Corp II (A Development Stage Company) as of December 31, 2009 and 2008, and the
results of its operations and cash flows for the years then ended and from
inception (January 24, 2006) through December 31, 2009 in conformity with
accounting principles generally accepted in the United States.
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 has suffered losses from operations and
current liabilities exceed current assets, all of which raise substantial doubt
about its ability to continue as a going concern. Management’s plans
in regards 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.
De Joya
Griffith & Company, LLC
/s/ De
Joya Griffith & Company, LLC
Henderson,
Nevada
April 9,
2010
F-2
Plastron
Acquisition Corp. II
A
Development Stage Company
BALANCE
SHEETS
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As of
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As of
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|||||||
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December 31,
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December 31,
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|||||||
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2009
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2008
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|||||||
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(Audited)
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(Audited)
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|||||||
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ASSETS
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||||||||
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CURRENT
ASSETS:
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||||||||
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Cash
and cash equivalents
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$ | 6,559 | $ | 582 | ||||
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Total
current assets
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6,559 | 582 | ||||||
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TOTAL
ASSETS
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$ | 6,559 | $ | 582 | ||||
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LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
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CURRENT
LIABILITIES:
|
||||||||
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Accounts
payable
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$ | 1,735 | $ | 854 | ||||
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Accrued
interest - related party
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4,677 | 2,036 | ||||||
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Note
payable - related party
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49,000 | 22,500 | ||||||
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Total
current liabilities
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55,412 | 25,390 | ||||||
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TOTAL
LIABILITIES
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55,412 | 25,390 | ||||||
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STOCKHOLDERS’
DEFICIT:
|
||||||||
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Preferred
stock, $.0001 par value; 10,000,000 shares authorized; 0 issued and
outstanding
|
- | - | ||||||
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Common
stock, $.0001 par value; 75,000,000 shares authorized; 2,061,856 and
2,000,000 shares issued and outstanding
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206 | 200 | ||||||
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Additional
paid-in capital
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30,722 | 29,800 | ||||||
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Deficit
accumulated during the development stage
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(79,781 | ) | (54,808 | ) | ||||
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TOTAL
STOCKHOLDERS’ DEFICIT
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(48,853 | ) | (24,808 | ) | ||||
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TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$ | 6,559 | $ | 582 | ||||
The
accompanying notes are an integral part of the financial
statements.
F-3
Plastron
Acquisition Corp. II
A
Development Stage Company
STATEMENTS
OF OPERATIONS
|
January 1, 2009
to
December 31,
2009
(Audited)
|
January 1, 2008
to
December 31,
2008
(Audited)
|
Inception
(January 24,
2006) to
December
31, 2009
(Audited)
|
||||||||||
|
REVENUE
|
$ | - | $ | - | $ | - | ||||||
|
OPERATING
EXPENSES:
|
||||||||||||
|
General
and administrative expenses
|
22,331 | 12,116 | 75,103 | |||||||||
|
LOSS
FROM OPERATIONS
|
(22,331 | ) | (12,116 | ) | (75,103 | ) | ||||||
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OTHER
(EXPENSE)
|
||||||||||||
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Interest
expense - related party
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(2,642 | ) | (1,085 | ) | (4,678 | ) | ||||||
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Total
other (expense)
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(2,642 | ) | (1,085 | ) | (4,678 | ) | ||||||
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NET
LOSS
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$ | (24,973 | ) | $ | (13,201 | ) | $ | (79,781 | ) | |||
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BASIC
NET LOSS PER SHARE
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$ | (0.01 | ) | $ | (0.01 | ) | ||||||
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WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC
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2,039,317 | 2,000,000 | ||||||||||
The
accompanying notes are an integral part of the financial
statements.
F-4
Plastron
Acquisition Corp. II
A
Development Stage Company
STATEMENT OF STOCKHOLDERS’
DEFICIT
From
January 24, 2006 (Inception) to December 31, 2009
|
Preferred
Stock
|
Common
Stock
|
Additional
Paid-in
|
Deficit
Accumulated
During
the
Development
|
Total
Stockholders'
|
||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Stage
|
Deficit
|
||||||||||||||||||||||
|
BALANCE
AT JANUARY 24, 2006, (INCEPTION)
|
- | $ | - | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
|
Issuance
of common stock for cash at $.015 per share
|
- | - | 2,000,000 | 200 | 29,800 | - | 30,000 | |||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | (12,951 | ) | (12,951 | ) | |||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2006
|
- | - | 2,000,000 | 200 | 29,800 | (12,951 | ) | 17,049 | ||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | (11,777 | ) | (11,777 | ) | |||||||||||||||||||
|
BALANCES
AT JUNE 30, 2007
|
- | - | 2,000,000 | 200 | 29,800 | (24,728 | ) | 5,272 | ||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | (16,879 | ) | (16,879 | ) | |||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2007
|
- | - | 2,000,000 | 200 | 29,800 | (41,607 | ) | (11,607 | ) | |||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | (13,201 | ) | (13,201 | ) | |||||||||||||||||||
|
BALANCE
AT December 31, 2008 (Audited)
|
- | - | 2,000,000 | 200 | 29,800 | (54,808 | ) | (24,808 | ) | |||||||||||||||||||
|
Issuance
of common stock for cash at $.015 per share
|
- | - | 61,856 | 6 | 922 | - | 928 | |||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | (24,973 | ) | (24,973 | ) | |||||||||||||||||||
|
BALANCE
AT December 31, 2009 (Audited)
|
- | $ | - | 2,061,856 | $ | 206 | $ | 30,722 | $ | (79,781 | ) | $ | (48,853 | ) | ||||||||||||||
The
accompanying notes are an integral part of the financial
statements.
F-5
Plastron
Acquisition Corp. II
A
Development Stage Company
STATEMENTS OF CASH
FLOWS
|
Inception
|
||||||||||||
|
January 1, 2009
to
|
January 1, 2008
to
|
(January 24, 2006)
to
|
||||||||||
|
December 31, 2009
|
December 31, 2008
|
December 31, 2009
|
||||||||||
|
(Audited)
|
(Audited)
|
(Audited)
|
||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net
loss
|
$ | (24,973 | ) | $ | (13,201 | ) | $ | (79,781 | ) | |||
|
Changes
in operating assets and liabilities:
|
||||||||||||
|
Increase
in accrued liabilities
|
2,641 | 1,085 | 4,677 | |||||||||
|
Increase
in accounts payable
|
881 | 854 | 1,735 | |||||||||
|
Net
cash used in operating activities
|
(21,451 | ) | (11,262 | ) | (73,369 | ) | ||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Proceeds
from issuance of common stock
|
928 | - | 30,928 | |||||||||
|
Proceeds
from note payable - related party
|
26,500 | 10,000 | 49,000 | |||||||||
|
Net
cash provided by financing activities
|
27,428 | 10,000 | 79,928 | |||||||||
|
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
5,977 | (1,262 | ) | 6,559 | ||||||||
|
Cash
and cash equivalents at beginning of period
|
582 | 1,844 | - | |||||||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 6,559 | $ | 582 | $ | 6,559 | ||||||
The
accompanying notes are an integral part of the financial
statements.
F-6
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
|
|
(a)
|
Organization
and Business:
|
Plastron
Acquisition Corp. II (the “Company”) was incorporated in the state of Delaware
on January 24, 2006 for the purpose of raising capital that is intended to be
used in connection with its business plans which may include a possible merger,
acquisition or other business combination with an operating
business.
The
Company is currently in the development stage as defined in ASC Topic 915. All
activities of the Company to date relate to its organization, initial funding
and share issuances.
Going
Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. The Company has not begun generating
revenue, is considered a development stage company, has experienced recurring
net operating losses, had an accumulated deficit of ($79,781) and had a working
capital deficiency of ($48,853) as of December 31, 2009. These factors raise
substantial doubt about the Company’s ability to continue as a going concern.
Management plans to issue more shares of common stock in order to raise funds.
These financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might result from this
uncertainty.
|
|
(b)
|
Basis
of Presentation:
|
The
accompanying unaudited financial statements have been prepared in accordance
with Securities and Exchange Commission requirements for financial
statements.
The
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States.
|
|
(c)
|
Use
of estimates:
|
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the balance sheet and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
F-7
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
NOTE 1 -
ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued):
|
|
(d)
|
Cash
and cash equivalents:
|
For
purposes of the statement of cash flows, the Company considers highly liquid
financial instruments purchased with a maturity of three months or less to be
cash equivalents.
|
|
(e)
|
Income
taxes:
|
The
Company follows ASC Topic 740 for recording the provision for income taxes.
Deferred tax assets and liabilities are computed based upon the difference
between the financial statement and income tax basis of assets and liabilities
using the enacted marginal tax rate applicable when the related asset or
liability is expected to be realized or settled. Deferred income tax expenses or
benefits are based on the changes in the asset or liability each period. If
available evidence suggests that it is more likely than not that some portion or
all of the deferred tax assets will not be realized, a valuation allowance is
required to reduce the deferred tax assets to the amount that is more likely
than not to be realized. Future changes in such valuation allowance are included
in the provision for deferred income taxes in the period of change.
Deferred
income taxes may arise from temporary differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or non-current, depending on
the classification of assets and liabilities to which they relate. Deferred
taxes arising from temporary differences that are not related to an asset or
liability are classified as current or non-current depending on the periods in
which the temporary differences are expected to reverse.
The
Company applies a more-likely-than-not recognition threshold for all tax
uncertainties. ASC Topic 740 only allows the recognition of those tax benefits
that have a greater than fifty percent likelihood of being sustained upon
examination by the taxing authorities. As of December 31, 2009, the Company
reviewed its tax positions and determined there were no outstanding, or
retroactive tax positions with less than a 50% likelihood of being sustained
upon examination by the taxing authorities, therefore this standard has not had
a material effect on the Company.
The
Company does not anticipate any significant changes to its total unrecognized
tax benefits within the next 12 months.
The
Company classifies tax-related penalties and net interest as income tax expense.
As of December 31, 2009 and 2008, no income tax expense has been
incurred.
|
|
(f)
|
Loss
per common share:
|
Basic
loss per share is calculated using the weighted-average number of common shares
outstanding during each reporting period. Diluted loss per share includes
potentially dilutive securities such as outstanding options and warrants, using
various methods such as the treasury stock or modified treasury stock method in
the determination of dilutive shares outstanding during each reporting period.
The Company does not have any potentially dilutive
instruments.
F-8
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
NOTE 1 -
ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued):
|
|
(g)
|
Fair
value of financial instruments:
|
The
carrying value of cash equivalents and accrued expenses approximates fair value
due to the short period of time to maturity.
|
|
(h)
|
New
accounting pronouncements:
|
In
February 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various
Topics. This amendment eliminated inconsistencies and outdated
provisions and provided the needed clarifications to various topics within Topic
815. The amendments are effective for the first reporting period
(including interim periods) beginning after issuance (February 2, 2010), except
for certain amendments. The amendments to the guidance on accounting
for income taxes in a reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. For those reorganizations reflected in interim financial
statements issued before the amendments in this Update are effective,
retrospective application is required. The clarifications of the
guidance on the embedded derivates and hedging (Subtopic 815-15) are effective
for fiscal years beginning after December 15, 2009, and should be applied to
existing contracts (hybrid instruments) containing embedded derivative features
at the date of adoption. The Company does not expect the provisions
of ASU 2010-08 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-07 (ASU 2010-07), Not-for-Profit Entities (Topic 958):
Not-for-Profit Entities: Mergers and Acquisitions. This amendment to
Topic 958 has occurred as a result of the issuance of FAS 164. The
Company does not expect the provisions of ASU 2010-07 to have a material effect
on the financial position, results of operations or cash flows of the
Company.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value
Measurements. This amendment to Topic 820 has improved disclosures
about fair value measurements on the basis of input received from the users of
financial statements. This is effective for interim and annual
reporting periods beginning after December 15, 2009, except for the disclosures
about purchases, sales, issuances, and settlements in the roll forward of
activity in Level 3 fair value measurements. Those disclosures are
effective for fiscal years beginning after December 15, 2010, and for interim
periods within those fiscal years. Early adoption is
permitted. The Company does not expect the provisions of ASU 2010-06
to have a material effect on the financial position, results of operations or
cash flows of the Company.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic
718). This standard codifies EITF Topic D-110 Escrowed Share
Arrangements and the Presumption of Compensation.
F-9
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
NOTE 1 -
ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued):
|
|
(h)
|
New
accounting pronouncements:
|
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical
Corrections to SEC Paragraphs.
In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic
932): Oil and Gas Reserve Estimation and Disclosures. This amendment
to Topic 932 has improved the reserve estimation and disclosure requirements by
(1) updating the reserve estimation requirements for changes in practice and
technology that have occurred over the last several decades and (2) expanding
the disclosure requirements for equity method investments. This is
effective for annual reporting periods ending on or after December 31,
2009. However, an entity that becomes subject to the disclosures
because of the change to the definition oil- and gas- producing activities may
elect to provide those disclosures in annual periods beginning after December
31, 2009. Early adoption is not permitted. The Company
does not expect the provisions of ASU 2010-03 to have a material effect on the
financial position, results of operations or cash flows of the
Company.
In
January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of a
Subsidiary. This amendment to Topic 810 clarifies, but does not
change, the scope of current US GAAP. It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP. An entity will
be required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities
that have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December 15,
2009. The amendments should be applied retrospectively to the first period that
an entity adopted FAS 160. The Company does not expect the provisions
of ASU 2010-02 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In
January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic
505): Accounting for Distributions to Shareholders with Components of Stock and
Cash (A Consensus of the FASB Emerging Issues Task Force). This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit on
the amount of cash that will be distributed is not a stock dividend for purposes
of applying Topics 505 and 260. Effective for interim and annual periods ending
on or after December 15, 2009, and would be applied on a retrospective
basis. The Company does not expect the provisions of ASU 2010-01 to
have a material effect on the financial position, results of operations or cash
flows of the Company.
F-10
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
NOTE 1 -
ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued):
|
|
(h)
|
New
accounting pronouncements:
|
In
December 2009, the FASB issued Accounting Standards Update 2009-17,
Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities. This Accounting Standards
Update amends the FASB Accounting Standards Codification for Statement 167. (See
FAS 167 effective date below)
In
December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers
and Servicing (Topic 860): Accounting for Transfers of Financial
Assets. This Accounting Standards Update amends the FASB Accounting
Standards Codification for Statement 166. (See FAS 166 effective date
below)
In
October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance
or Other Financing. This Accounting Standards Update amends the FASB
Accounting Standard Codification for EITF 09-1. (See EITF 09-1
effective date below)
In
October 2009, the FASB issued Accounting Standards Update 2009-14, Software
(Topic 985): Certain Revenue Arrangements That Include Software
Elements. This update changed the accounting model for revenue
arrangements that include both tangible products and software
elements. Effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or after June 15,
2010. Early adoption is permitted. The Company does not
expect the provisions of ASU 2009-14 to have a material effect on the financial
position, results of operations or cash flows of the Company.
In
October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue
Arrangements. This update addressed the accounting for
multiple-deliverable arrangements to enable vendors to account for products or
services (deliverables) separately rather than a combined unit and will be
separated in more circumstances under existing US GAAP. This
amendment has eliminated that residual method of
allocation. Effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or after June 15,
2010. Early adoption is permitted. The Company does not expect the
provisions of ASU 2009-13 to have a material effect on the financial position,
results of operations or cash flows of the Company.
In
September 2009, the FASB issued Accounting Standards Update 2009-12, Fair Value
Measurements and Disclosures (Topic 820): Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent). This update
provides amendments to Topic 820 for the fair value measurement of investments
in certain entities that calculate net asset value per share (or its
equivalent). It is effective for interim and annual periods ending
after December 15, 2009. Early application is permitted in financial
statements for earlier interim and annual periods that have not been issued. The
Company does not expect the provisions of ASU 2009-12 to have a material effect
on the financial position, results of operations or cash flows of the
Company.
F-11
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
NOTE 1 -
ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued):
|
|
(h)
|
New
accounting pronouncements:
|
In July
2009, the FASB ratified the consensus reached by EITF (Emerging Issues Task
Force) issued EITF No. 09-1, (ASC Topic 470) “Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance” (“EITF
09-1”). The provisions of EITF 09-1, clarifies the accounting
treatment and disclosure of share-lending arrangements that are classified as
equity in the financial statements of the share lender. An example of
a share-lending arrangement is an agreement between the Company (share lender)
and an investment bank (share borrower) which allows the investment bank to use
the loaned shares to enter into equity derivative contracts with
investors. EITF 09-1 is effective for fiscal years that beginning on
or after December 15, 2009 and requires retrospective application for all
arrangements outstanding as of the beginning of fiscal years beginning on or
after December 15, 2009. Share-lending arrangements that have
been terminated as a result of counterparty default prior to December 15, 2009,
but for which the entity has not reached a final settlement as of December 15,
2009 are within the scope. Effective for share-lending arrangements
entered into on or after the beginning of the first reporting period that begins
on or after June 15, 2009. The Company does not expect the provisions
of EITF 09-1 to have a material effect on the financial position, results of
operations or cash flows of the Company.
In June
2009, the FASB issued SFAS No. 167 (ASC Topic 810), “Amendments to FASB
Interpretation No. 46(R) (“SFAS 167”). SFAS 167 amends the
consolidation guidance applicable to variable interest entities. The provisions
of SFAS 167 significantly affect the overall consolidation analysis under FASB
Interpretation No. 46(R). SFAS 167 is effective as of the beginning
of the first fiscal year that begins after November 15, 2009. SFAS 167 will be
effective for the Company beginning in 2010. The Company does not expect the
provisions of SFAS 167 to have a material effect on the financial position,
results of operations or cash flows of the Company.
In June
2009, the FASB issued SFAS No. 166, (ASC Topic 860) “Accounting for Transfers of
Financial Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The
provisions of SFAS 166, in part, amend the derecognition guidance in FASB
Statement No. 140, eliminate the exemption from consolidation for qualifying
special-purpose entities and require additional disclosures. SFAS 166 is
effective for financial asset transfers occurring after the beginning of an
entity’s first fiscal year that begins after November 15, 2009. The Company does
not expect the provisions of SFAS 166 to have a material effect on the financial
position, results of operations or cash flows of the Company.
F-12
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
|
|
(h)
|
New
accounting pronouncements:
|
In June
2009, the FASB issued SFAS No. 165, (ASC Topic 855) “Subsequent Events,” (“SFAS
No. 165”). SFAS 165 establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. SFAS 165 applies
to both interim financial statements and annual financial statements. SFAS 165
is effective for interim or annual financial periods ending after June 15, 2009.
SFAS 165 does not have a material impact on our financial
statements.
On March
9, 2007, the Company entered into a loan agreement with Broadband Capital
Management, LLC (“BCM”), pursuant to which the Company agreed to repay $12,500
on or before the earlier of (i) December 31, 2012 or (ii) the date that the
Company (or a wholly owned subsidiary of the Company) consummates a merger or
similar transaction with an operating business (the “Maturity Date”). BCM had
previously advanced the $12,500 on behalf of the Company. Interest shall accrue
on the outstanding principal balance of this loan on the basis of a 360-day year
daily from January 24, 2006, the effective date of the loan, until paid in full
at the rate of four percent (4%) per annum. Clifford Chapman, our
director, Michael Rapp, our President and director, and Philip Wagenheim, our
Secretary and director, all serve as management of BCM, a registered
broker-dealer.
On April
15, 2008, Michael Rapp, the President and a director of the Company, Philip
Wagenheim, the Secretary and a director of the Company, and Clifford Chapman, a
director of the Company, loaned the Company $5,000, $3,000 and $2,000,
respectively. The Company issued promissory notes (each the “April 15 Note” and
together, the “April 15 Notes”) to
Messrs Rapp, Wagenheim
and Chapman, pursuant to which the principal amounts thereunder shall accrue
interest at an annual rate of 8.25%, and such principal and all accrued interest
shall be due and payable on or before the earlier of (i) the fifth anniversary
of the date of the Note or (ii) the date the Company consummates a business
combination with a private company in a reverse merger or reverse takeover
transaction or other transaction after which the company would cease to be a
shell company.
On March
16, 2009, the Company entered into a loan agreement with Broadband Capital
Management, LLC (“BCM”), pursuant to which the Company agreed to repay $14,500
on or before the earlier of (i) March 16, 2014 or (ii) the date that the Company
(or a wholly owned subsidiary of the Company) consummates a merger or similar
transaction with an operating business (the “Maturity
Date”). Interest shall accrue on the outstanding principal balance of
this loan at an annual rate of 8.25%. Clifford Chapman, our director, Michael
Rapp, our President and director, and Philip Wagenheim, our Secretary and
director, all serve as management of BCM, a registered
broker-dealer.
F-13
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
On August
12, 2009, the Company entered into a loan agreement with Broadband Capital
Management, LLC (“BCM”), pursuant to which the Company agreed to repay $12,000
on or before the earlier of (i) August 12, 2013 or (ii) the date that the
Company (or a wholly owned subsidiary of the Company) consummates a merger or
similar transaction with an operating business (the “Maturity
Date”). Interest shall accrue on the outstanding principal balance of
this loan at an annual rate of 8.25%. Clifford Chapman, our director, Michael
Rapp, our President and director, and Philip Wagenheim, our Secretary and
director, all serve as management of BCM, a registered
broker-dealer.
For the
years ended December 31, 2009 and 2008, interest expense was $2,642 and $1,085,
respectively.
The
Company is authorized by its Certificate of Incorporation to issue an aggregate
of 85,000,000 shares of capital stock, of which 75,000,000 are shares of common
stock, par value $.0001 per share (the “Common Stock”) and 10,000,000 are shares
of preferred stock, par value $.0001 per share (the “Preferred
Stock”).
All
outstanding shares of Common Stock are of the same class and have equal rights
and attributes. The holders of Common Stock are entitled to one vote per share
on all matters submitted to a vote of stockholders of the Company. All
stockholders are entitled to share equally in dividends, if any, as may be
declared from time to time by the Board of Directors out of funds legally
available. In the event of liquidation, the holders of Common Stock are entitled
to share ratably in all assets remaining after payment of all liabilities. The
stockholders do not have cumulative or preemptive rights.
On March
1, 2006, the Company issued 1,000,000, 600,000, and 400,000 shares to Michael
Rapp, Philip Wagenheim, and Clifford Chapman, respectively, for total cash
consideration of $30,000 or $.015 per share.
On May
14, 2009, the Company issued 61,856 shares to Charles Allen, for total cash
consideration of $927.84 or $.015 per share.
As of
December 31, 2009, 2,061,856 shares of Common Stock were issued and
outstanding.
F-14
PLASTRON
ACQUISITION CORP. II
(A
Development Stage Company)
NOTES TO FINANCIAL
STATEMENTS
(Audited)
At
December 31, 2009 and 2008, the Company had a federal operating loss
carryforward of approximately $79,781 and $54,808 respectively, which begins to
expire between 2026 and 2029.
Components
of net deferred tax assets, including a valuation allowance, are as follows at
December 31:
|
2009
|
2008
|
|||||||
|
Deferred
tax assets:
|
||||||||
|
Net
operating loss carryforward
|
$ | 79,781 | $ | 54,808 | ||||
|
Total
deferred tax assets
|
27,923 | 19,183 | ||||||
|
Less:
Valuation Allowance
|
(27,923 | ) | (19,183 | ) | ||||
|
Net
Deferred Tax Assets
|
$ | — | $ | — | ||||
The
valuation allowance for deferred tax assets as of December 31, 2009 and 2008 was
$27,923 and $19,183, respectively. In assessing the recovery of the
deferred tax assets, management considers whether it is more likely than not
that some portion or all of the deferred tax assets will not be
realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income in the periods in which
those temporary differences become deductible. Management considers
the scheduled reversals of future deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this
assessment. As a result, management determined it was more likely
than not the deferred tax assets would not be realized as of December 31, 2009
and 2008, and recorded a full valuation allowance.
Reconciliation
between the statutory rate and the effective tax rate is as follows for the
years ended December 31:
|
2009
|
2008
|
|||||||
|
Federal
statutory tax rate
|
(35.0 | )% | (35.0 | )% | ||||
|
Change
in valuation allowance
|
35.0 | % | 35.0 | % | ||||
|
Effective
tax rate
|
0.0 | % | 0.0 | % | ||||
The
Company has evaluated subsequent events through April 9, 2010, the date which
the financial statements were available to be issued, no events have been
noted.
F-15
There are
not and have not been any disagreements between the Company and its accountants
on any matter of accounting principles, practices or financial statement
disclosure.
Evaluation of Disclosure
Controls and Procedures
The
Company’s management is responsible for establishing and maintaining a system of
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act) that is designed to ensure that information required to
be disclosed by the Company in the reports that the Company files or submits
under the Exchange Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission’s rules and
forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by an issuer in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the issuer’s management,
including its principal executive officer or officers and principal financial
officer or officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
In
accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
completed under the supervision and with the participation of the Company’s
management, including the Company’s President, Principal Financial Officer and
Secretary, of the effectiveness of the design and operation of the Company’s
disclosure controls and procedures as of the end of the period covered by this
Annual Report. Based on that evaluation, the Company’s management
including the President, Principal Financial Officer and Secretary, concluded
that the Company’s disclosure controls and procedures were effective in
providing reasonable assurance that information required to be disclosed in the
Company’s reports filed or submitted under the Exchange Act was recorded,
processed, summarized, and reported within the time periods specified in the
Commission’s rules and forms.
Evaluation of Internal
Controls and Procedures
Our
management is also responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.
Our
internal control over financial reporting includes those policies and procedures
that:
|
|
·
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
|
|
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being
made only in accordance with authorizations of the Company’s management
and directors; and
|
|
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on the financial
statements.
|
As of
December 31, 2009, we carried out an evaluation of the effectiveness of our
internal control over financial reporting based on the framework in “Internal
Control-Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on our evaluation, our
management concluded that our internal control over financial reporting was
effective as of December 31, 2009.
24
This
annual report does not include an attestation by the Company’s registered public
accounting firm regarding internal controls over financial reporting.
Management’s report was not subject to attestation pursuant to the temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management’s report in the annual report.
Changes in Internal Controls
over Financial Reporting
There
have been no significant changes to the Company’s internal controls over
financial reporting that occurred during our last fiscal quarter of the year
ended December 31, 2009, that materially affected, or were reasonably likely to
materially affect, our internal controls over financial reporting.
None.
(a) Identification
of Directors and Executive Officers. The following table sets forth
certain information regarding the Company’s directors and executive
officers:
|
Name
|
Age
|
Position
|
Term
|
|||
|
Michael
Rapp
|
43
|
President
and Director
|
March
1, 2006 thru Present
|
|||
|
Philip
Wagenheim
|
39
|
Secretary
and Director
|
March
1, 2006 thru Present
|
|||
|
Clifford
Chapman
|
|
41
|
|
Director
|
|
March
1, 2006 thru Present
|
The
Company’s officers and directors are elected annually for a one year term or
until their respective successors are duly elected and qualified or until their
earlier resignation or removal.
Michael Rapp
is the Company’s
President and a director. Mr. Rapp has over eighteen years of
experience in the financial industry and is currently the co-founder and
chairman of BCM. BCM is a boutique investment bank and a NASD
broker-dealer focused on financing, strategic advisory services and sales and
trading. BCM has specialized in advising its clients on accessing the
capital markets through non-traditional methods such as SPACs and reverse
mergers. BCM has underwritten initial public offerings including
Services Acquisition Corp. International which merged with Jamba Juice Inc. (and
changed its name to Jamba Inc.), Endeavor Acquisition Corporation, which has a
pending merger with American Apparel, and Great Wall Acquisition Corporation,
which merged with ChinaCast Communication Holdings Ltd. Prior to
co-founding BCM in 2000, Mr. Rapp was a managing director and co-founder of
Oscar Gruss & Son’s Private Client Group in 1997. From 1994
through 1997, Mr. Rapp worked at PaineWebber serving as a senior vice president
of investments. From 1990 -1994, Mr. Rapp worked at Prudential
Securities serving as a senior vice president of investments. Mr. Rapp received
his Bachelor of Arts degree in psychology from the University of Michigan-Ann
Arbor in 1989.
Philip Wagenheim
is the
Company’s Secretary and a director. Mr. Wagenheim has over fifteen
years of experience in the financial industry and is currently the vice chairman
of BCM. Prior to co-founding BCM in 2000, Mr. Wagenheim was a
managing director and co-founder of Oscar Gruss & Son’s Private Client Group
in 1997. From 1994-1997, Mr. Wagenheim worked at PaineWebber and from
1992-1994, Mr. Wagenheim worked at Prudential Securities. Mr. Wagenheim received
his degree in Business Administration from the University of Miami in
1992.
25
Clifford Chapman
, is a
director of the Company. Mr. Chapman has served as head of investment
banking at BCM from September 2005 to January 2009 where he was responsible for
the banking, structuring, and due diligence for all of BCM’s
transactions. From January 2001 to the present, Mr. Chapman has been
the managing director of Early Stage Associates LLC, a consulting company
focused on helping businesses in capital formation and executive
management. From January 2001 to the present, Mr. Chapman has also
served as the managing director of ChapRoc Capital LLC, a company which invests
in technology and business services companies. From June 2002 until
March 2004, Mr. Chapman served as chief executive officer for Mindshift
Technologies Inc., a managed services provider focused on IT outsourcing for
small and medium enterprises. From 1999 through 2000, Mr. Chapman served as the
vice president of best practices for AppNet, a full-service internet
professional services and managed hosting company, where he led the integration
of twelve acquired companies. AppNet consummated its initial public
offering in July 1999 and was subsequently acquired by CommerceOne in September
2000. From 1995 to 1998, Mr. Chapman acted as chief operating officer
of NMP, an internet business consulting services company that he co-founded and
sold to AppNet in October 1998. Prior to NMP, Mr. Chapman worked in
the commercial practice of Booz Allen & Hamilton and as a consultant for
Andersen Consulting in their Advanced Systems Group. Mr. Chapman
presently serves as the sole officer and director of International Cellular
Accessories (OTCBB: ICLA). Mr. Chapman received a Masters of Business
Administration with Honors from Columbia Business School and a Bachelors Degree
in Computer Engineering from Lehigh University.
(b) Significant
Employees.
As of the date hereof, the Company has
no significant employees.
(c) Family
Relationships.
There are no family relationships among
directors, executive officers, or persons nominated or chosen by the issuer to
become directors or executive officers.
(d) Involvement
in Certain Legal Proceedings.
There
have been no events under any bankruptcy act, no criminal proceedings and no
judgments, injunctions, orders or decrees material to the evaluation of the
ability and integrity of any director, executive officer, promoter or control
person of Registrant during the past five years.
Compliance
with Section 16(a) of the Exchange Act
Section 16(a)
of the Exchange Act requires the Company’s directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company’s equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based
solely on the Company’s review of the copies of the forms received by it during
the fiscal year ended December 31, 2009 and written representations that no
other reports were required, the Company believes that no person who, at any
time during such fiscal year, was a director, officer or beneficial owner of
more than 10% of the Company’s common stock failed to comply with all
Section 16(a) filing requirements during such fiscal
years.
26
Code
of Ethics
Nominating
Committee
We have not adopted any procedures by
which security holders may recommend nominees to our Board of
Directors.
Audit
Committee
The Board of Directors acts as the
audit committee. The Company does not have a qualified financial expert at this
time because it has not been able to hire a qualified candidate. Further, the
Company believes that it has inadequate financial resources at this time to hire
such an expert. The Company intends to continue to search for a
qualified individual for hire.
The
following table sets forth the cash and other compensation paid by the Company
to its President and all other executive officers who earned annual compensation
exceeding $100,000 for services rendered during the fiscal year ended December
31, 2009 and December 31, 2008.
|
Name and Position
|
Year
|
Cash Compensation
|
Other Compensation
|
|||
|
Michael
Rapp, President and Director
|
2009
|
None
|
None
|
|||
|
2008
|
None
|
None
|
||||
|
Philip
Wagenheim, Secretary and Director
|
2009
|
None
|
None
|
|||
|
2008
|
None
|
None
|
||||
|
Clifford
Chapman, Director
|
2009
|
None
|
None
|
|||
|
|
2008
|
|
None
|
|
None
|
Director
Compensation
We do not currently pay any cash fees
to our directors, nor do we pay directors’ expenses in attending board
meetings.
Employment
Agreements
The
Company is not a party to any employment agreements.
(a) The
following tables set forth certain information as of April 14, 2010, regarding
(i) each person known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of Common Stock, (ii) each director, nominee and
executive officer of the Company and (iii) all officers and directors as a
group.
27
|
Name and Address
|
Amount and Nature of Beneficial
Ownership
|
Percentage of Class
|
||||||
|
Clifford
Chapman (1)
712
Fifth Avenue
New
York, New York 10019
|
400,000 | 19.4 | % | |||||
|
Michael
Rapp (2)
712
Fifth Avenue
New
York, New York 10019
|
1,000,000 | 48.5 | % | |||||
|
Philip
Wagenheim (3)
712
Fifth Avenue
New
York, New York 10019
|
600,000 | 29.1 | % | |||||
|
All
Directors and Officers as a Group
(3
individuals)
|
2,000,000 | 97 | % | |||||
|
(1)
|
Clifford
Chapman is a director of the
Company.
|
|
(2)
|
Michael
Rapp is President and a director of the
Company.
|
|
(3)
|
Philip
Wagenheim is Secretary and a director of the
Company.
|
|
(b)
|
The
Company currently has not authorized any compensation plans or individual
compensation arrangements.
|
On March
9, 2007, the Company entered into a loan agreement with Broadband Capital
Management LLC (“BCM”), pursuant to which the Company agreed to repay $12,500 on
or before the earlier of (i) December 31, 2012 or (ii) the date that the Company
(or a wholly owned subsidiary of the Company) consummates a merger or similar
transaction with an operating business (the “Loan”). BCM had previously advanced
the $12,500 on behalf of the Company. Interest shall accrue on the outstanding
principal balance of the Loan on the basis of a 360-day year daily from January
24, 2006, the effective date of the Loan, until paid in full at the rate of four
percent (4%) per annum.
On April
15, 2008, Michael Rapp, the President and a director of the Company, Philip
Wagenheim, the Secretary and a director of the Company, and Clifford Chapman, a
director of the Company, loaned the Company $5,000, $3,000 and $2,000,
respectively. The Company issued promissory notes (each the “April 15 Note” and
together, the “April 15 Notes”) to
Messrs Rapp, Wagenheim
and Chapman, pursuant to which the principal amounts thereunder shall accrue
interest at an annual rate of 8.25%, and such principal and all accrued interest
shall be due and payable on or before the earlier of (i) the fifth anniversary
of the date of the Note or (ii) the date the Company consummates a business
combination with a private company in a reverse merger or reverse takeover
transaction or other transaction after which the company would cease to be a
shell company.
On March
16, 2009, the Company entered into a loan agreement with BCM in the amount of
$14,500. The Company issued a promissory note (the “Note”) to BCM,
pursuant to which the principal amounts thereunder shall accrue interest at an
annual rate of 8.25%, and such principal and all accrued interest shall be due
and payable on or before the earlier of (i) March 16, 2014 or (ii) the date the
Company consummates a business combination with a private company in a reverse
merger or reverse takeover transaction or other transaction after which the
company would cease to be a shell company (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended). Clifford Chapman,
our director, Michael Rapp, our President and director, and Philip Wagenheim,
our Secretary and director, all serve as management of BCM, a registered
broker-dealer.
28
Under the Note, it shall be deemed an
“Event of Default” if the Company shall: (i) fail to pay the entire principal
amount of the Note when due and payable, (ii) admit in writing its inability to
pay any of its monetary obligations under the Note, (iii) make a general
assignment of its assets for the benefit of creditors, or (iv) allow any
proceeding to be instituted by or against it seeking relief from or by
creditors, including, without limitation, any bankruptcy
proceedings. In the event that an Event of Default has occurred, the
holder of the Note may, by notice to the Company, declare the entire Note to be
immediately due and payable. In the event that an Event of Default
consisting of a voluntary or involuntary bankruptcy filing has occurred, then
the entire Note shall automatically become due and payable without any notice or
other action by BCM. Commencing five days after the occurrence of any
Event of Default, the interest rate on the Note shall accrue at the rate of 18%
per annum.
On August
12, 2009, the Company entered into a loan agreement with Broadband Capital
Management, LLC (“BCM”), pursuant to which the Company agreed to repay $12,000
on or before the earlier of (i) August 12, 2013 or (ii) the date that the
Company (or a wholly owned subsidiary of the Company) consummates a merger or
similar transaction with an operating business (the “Maturity
Date”). Interest shall accrue on the outstanding principal balance of
this loan at an annual rate of 8.25%. Clifford Chapman, our director, Michael
Rapp, our President and director, and Philip Wagenheim, our Secretary and
director, all serve as management of BCM, a registered
broker-dealer.
The
Company utilizes the office space and equipment of its management at no
cost. Management estimates such amounts to be
immaterial.
Except as otherwise indicated herein,
there have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 405 of Regulation
S-X.
Director
Independence
The Company is not a listed issuer
whose securities are listed on a national securities exchange, or an
inter-dealer quotation system which has requirements that a majority of the
board of directors be independent. Under NASDAQ Rule 5605(a)(2)(A), a
director is not considered to be independent if he or she also is an executive
officer or employee of the corporation. Under such definition,
Michael Rapp and Philip Wagenheim, our directors, would not be considered
independent as they also serve as executive officers of the
Company. Clifford Chapman would be considered
independent.
De Joya
Griffith & Company, LLC (“DJGC”) is the Company's independent registered
public accounting firm.
Audit
Fees
The
aggregate fees billed by DJGC for professional services rendered for the audit
of our annual financial statements and review of financial statements included
in our quarterly reports on Form 10-Q or services that are normally provided in
connection with statutory and regulatory filings were $7,600
for the fiscal year
ended December 31, 2009 and $9,500 for the fiscal year ended December 31,
2008.
29
Audit-Related
Fees
There
were no fees
billed
by DJGC for assurance and related services that are reasonably related to the
performance of the audit or review of the Company’s financial statements for the
fiscal years ended December 31, 2009 and for the fiscal year ended December 31,
2008.
Tax
Fees
There
were fees of $400 billed by DJGC for professional services for tax compliance,
tax advice, and tax planning for the fiscal year ended December 31, 2009 and no
fees for tax compliance, tax advice, and tax planning for the fiscal year ended
2008.
All
Other Fees
There
were no fees billed by DJGC for other products and services for the fiscal years
ended December 31, 2009 and
2008.
Audit
Committee’s Pre-Approval Process
The Board of Directors acts as
the audit committee of the Company, and accordingly, all services are approved
by all the members of the Board of Directors.
(a) We
set forth below a list of our audited financial statements included in Item 8 of
this annual report on Form 10-K.
|
Statement
|
Page*
|
|
|
Index
to Financial Statements
|
F-1
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
|
Balance
Sheets
|
F-3
|
|
|
Statements
of Operations
|
F-4
|
|
|
Statement
of Stockholders’ Deficit
|
F-5
|
|
|
Statements
of Cash Flows
|
F-6
|
|
|
Notes
to Financial Statements
|
F-7
|
*Page F-1
follows page 10 to this annual report on Form 10-K.
(b) Index
to Exhibits required by Item 601 of Regulation S-K.
30
|
Exhibit
|
Description
|
|
|
*3.1
|
Certificate
of Incorporation
|
|
|
*3.2
|
By-laws
|
|
|
**14.1
|
Code
of Ethics
|
|
|
31.1
|
Certification
of the Company’s Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Annual
Report on Form 10-K for the year ended December 31,
2009
|
|
|
31.2
|
Certification
of the Company’s Principal Executive Officer and Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with
respect to the registrant’s Annual Report on Form 10-K for the year ended
December 31, 2009
|
|
|
32.1
|
Certification
of the Company’s Principal Executive Officer pursuant to 18 U.S.C. Section
1350,
|
|
|
as
adopted pursuant to Section 906 of the Sarbanes Oxley Act of
2002
|
||
|
32.2
|
Certification
of the Company’s Principal Financial Officer pursuant to 18 U.S.C. Section
1350,
|
|
|
|
as
adopted pursuant to Section 906 of the Sarbanes Oxley Act of
2002
|
|
*
|
|
F
iled as an
exhibit to the Company's registration statement on Form 10-SB, as filed
with the Securities and Exchange Commission on May 15, 2007 and
incorporated herein by this
reference.
|
|
**
|
|
Filed
as an exhibit to the Company’s Form 10-KSB filed with the Securities
Exchange Commission on
February
25, 2008 and incorporated herein by this
reference.
|
31
SIGNATURES
In accordance with Section 13 or 15(d)
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.
| PLASTRON ACQUISITION CORP. II | ||
|
Dated:
April 14, 2010
|
By:
|
/s/ Michael Rapp
|
|
Michael
Rapp
|
||
|
President
and Director
|
||
|
Principal
Accounting Officer
|
||
|
Principal
Financial Officer
|
||
|
Principal
Executive Officer
|
||
|
Dated:
April 14, 2010
|
By:
|
/s/ Philip Wagenheim
|
|
Philip
Wagenheim
|
||
|
Secretary
and Director
|
||
|
Dated:
April 14, 2010
|
By:
|
/s/ Clifford Chapman
|
|
Clifford
Chapman
|
||
|
Director
|
||
In accordance with Section 13 or 15(d)
of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
Title
|
Date
|
||||
|
/s/ Michael
Rapp
|
President
and Director
|
April
14, 2010
|
|||
|
Michael
Rapp
|
|||||
|
/s/ Philip
Wagenheim
|
Secretary
and Director
|
April
14, 2010
|
|||
|
Philip
Wagenheim
|
|||||
|
/s/ Clifford
Chapman
|
Director
|
April
14, 2010
|
|||
|
Clifford
Chapman
|
|
|
32
TABLE OF CONTENTS
Part IItem 1. Description Of BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. Description Of PropertyItem 3. Legal ProceedingsItem 4. Submission Of Matters To A Vote Of Security HoldersPart IIItem 5. Market For Common Equity, Related Stockholder Matters and Small Business Issuer Purchases Of Equity SecuritiesItem 6. Selected Financial DataItem 7. Management S Discussion and Analysis Of Financial Condition and Results Of OperationItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataNote 1 - Organization and Summary Of Significant Accounting Policies:Note 1 - Organization and Summary Of Significant Accounting Policies (continued):Note 2 - Note Payable Related Party:Note 2 - Note Payable Related Party (continued):Note 3 - Stockholders Deficit:Note 4 - Income Taxes:Note 5 - Subsequent Events:Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9a(t). Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) Of The Exchange ActItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accounting Fees and ServicesPart IVItem 15. Exhibits, Financial Statement Schedules