10KSB 1 b414563_10ksb.txt FORM 10KSB ------------------------------- | | | OMB APPROVAL | | OMB Number: 3235-0420 | | Expires: April 30, 2003 | | Estimated average burden | | hours per response: 294.00 | | | ------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------------------------------- FORM 10-KSB (MARK ONE) |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED April 29th, 2006 |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission File Number _________________________________ PREVENTION INSURANCE.COM -------------------------------------------------- (Name of small business issuer in its charter) NEVADA 88-0126444 -------------- -------------- (State or other jurisdiction of incorporation or (I.R.S. Employer organization) Identification No.) 2770 S. Maryland Pkwy. #416 Las Vegas, NV 89109 -------------- -------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number (702) 732-2758 Securities registered under Section 12(b) of the Exchange Act: Title of each class Name of each exchange on which registered ------------------------------- ----------------------------------------- ------------------------------- ----------------------------------------- Securities registered under Section 12(g) of the Exchange Act: Common Stock, Par Value $.01 per share -------------------------------------------------------------------------------- (Title of class) REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------------------------------------------------------------- To the Board of Directors of Prevention Insurance.Com 2770 S. Maryland Pkwy., #416 Las Vegas, Nevada 89109 We have audited the accompanying balance sheet of Prevention Insurance.Com as of April 30, 2006, and the related statements of operations, changes in stockholders' equity and cash flows for the years ended April 30, 2006 and 2005. 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 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 balance sheets 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 audit 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheets. 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, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 30, 2006, and the results of its operations and its cash flows for the years ended April 30, 2006 and 2005, in conformity with U.S. generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note1 to the financial statements, the Company currently does not have any continuing sources of revenue. These conditions raise substantial doubt about its ability to remain as a going concern. Management's plans regarding those matters are also described in Note 1. The financial statements do not include any adjustments that might result from this uncertainty. /s/Beadle, McBride, Evans & Reeves, LLP Las Vegas, Nevada August 9, 2006 PREVENTION INSURANCE.COM BALANCE SHEETS APRIL 30, 2006 ASSETS ----------- Current assets: Cash $ -- ----------- ----------- TOTAL CURRENT ASSETS $ -- =========== LIABILITIES AND STOCKHOLDERS' (DEFICIT) ----------- Current liabilities: Accounts payable $ 9,999 Bank Overdraft 2,432 ----------- TOTAL CURRENT LIABILITIES 12,431 Commitments Stockholders' (deficit): Preferred stock, par value $ .01, 2,000,000 shares authorized, no shares issued or outstanding -- Common stock, $.01 par value, 100,000,000 shares authorized, 19,229,362 shares issued and outstanding 192,308 Additional paid in capital 3,581,842 Accumulated (deficit) (3,733,627) ----------- 40,523 Less: Treasury stock ( 24,233 share), at cost (52,954) Less: Stock Subscriptions Receivable -- ----------- Total Stockholder's (Deficit) (12,431) ----------- Total Liabilities and Stockholder's Equity $ 0 =========== SEE NOTES TO FINANCIAL STATEMENTS PREVENTION INSURANCE.COM STATEMENTS OF OPERATIONS FOR THE YEARS ENDED APRIL 30, 2006 2005 --------- --------- Commission income $ 158,580 $ 165,807 Cost of Goods Sold 12,532 General and administrative expenses 215,497 269,356 --------- --------- (Loss) from operations (69,449) (103,549) Interest expense 9 -- --------- --------- (Loss) before income taxes (69,458) (103,549) Income taxes -- -- --------- --------- Net (loss) $ (69,458) $(103,549) ========= ========= --------- --------- (Loss) per share $ (0.01) $ (0.01) ========= ========= SEE NOTES TO FINANCIAL STATEMENTS PREVENTION INSURANCE.COM STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) FOR THE YEARS ENDED APRIL 30, 2006 AND 2005

Preferred Stock Common Stock Additional Stock Par paid in Accumulated Treasury Subscri- Number value Number Par value capital deficit stock ptions Total ------------------------------------------------------------------------------------------------------- Balance April 30, 2004 - - $ 12,048,317 $ 120,498 $ 3,466,529 $ (3,560,620) $ (52,954) $ - $ (26,547) Shares issued for cash - - 4,330,750 43,308 25,933 - - 69,240 Shares issued for services - - 1,215,851 12,159 29,988 - - 42,146 Shares issed to reduce debt 300,000 3,000 14,612 - - 17,612 Shares issed for receivable 75,000 750 750 - - (1,500) - Net (loss) for the year - - (103,549) (103,549) ------------------------------------------------------------------------------------------------------- Balance April 30, 2005 $ - $ - 17,969,918 $ 179,714 $ 3,537,811 $ (3,664,169) $ (52,954) $ (1,500) (1,098) - Shares Issued for cash 1,234,444 12,344 44,031 56,375 Shares Issued for services 25,000 250 - 250 Payment of stock subscription receivable 1,500 1,500 Net (loss) (69,458) (69,458) ------------------------------------------------------------------------------------------------------- Balance April 30, 2006 $ - $ - 19,229,362 $ 192,308 $ 3,581,842 $ (3,733,627) $ (52,954) $ - $ (12,431) =======================================================================================================

SEE NOTES TO FINANCIAL STATEMENTS PREVENTION INSURANCE.COM STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED APRIL 30,

2006 2005 --------- --------- Cash flows from operating activities: Net loss $ (69,458) $(103,549) Adjustments to reconcile net loss to net cash used by operating activities: Changes in operating assets and liabilities: Stock issued for services and to settle debt 250 42,146 Increase / (Decrease) in accounts payable 6,571 (1,747) Increase / (Decrease) in accounts payable - related party -- (3,760) --------- --------- Net cash used by operating activities (62,637) (66,910) Cash flows from investing activities: Purchase of property and equipment -- --------- --------- Net cash used by investing activities -- -- Cash flows from financing activities: Proceeds from issuance of common stock 56,375 69,240 Proceeds from stock subscription receivable 1,500 -- Bank Overdraft 2,432 -- --------- --------- Net cash provided by financing activities 60,307 69,240 --------- --------- Net increase in cash (2,330) 2,330 Cash, beginning of period 2,330 --------- --------- Cash, end of period $ -- $ 2,330 ========= ========= Supplemental schedule of noncash activities: Stock issued to settle debt $ -- $ 17,612

SEE NOTES TO FINANCIAL STATEMENTS PREVENTION INSURANCE.COM NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND NATURE OF BUSINESS : The summary of significant accounting policies is presented to assist in the understanding of the financial statements. The financial statements and notes are the representation of management. These policies conform to accounting principles generally accepted in the United States of America and have been consistently applied. NATURE OF BUSINESS Prevention Insurance.Com (the Company) was incorporated under the laws of the State of Nevada in 1975 as Vita Plus Industries, Inc. In March 1999, the Company sold its remaining inventory and changed its name to Prevention Insurance.Com. The Company is attempting to organize select independent insurance agencies to create a nationwide cooperative group of health, life and casualty insurance companies with the ability to negotiate fees with national insurance companies. Additionally, the co-op would benefit from national negotiations of advertising and product development. The Company would receive fees from this group of agencies for its coordination of activities. To date, the Company has not been successful in its efforts. To defray expenses during the year ended April 30, 2006, the Company received commissions as a dealer representative for the sale of ATM machines. GOING CONCERN ISSUES As discussed above, the companies financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a "going concern", which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company has no continuing source of revenues and its ability to remain a going concern is subject to its ability to raise capital either from equity or debt and/or its successful operations as a long term solution to its lack of resources. To date, management has demonstrated the ability to raise sufficient capital to continue its limited operations. ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results may differ from these estimates. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: BASIS OF PRESENTATION The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and losses are expected to continue into the near future. The Company has no continuing source of revenues and its ability to remain a going concern is subject to its ability to raise capital CASH AND CASH EQUIVALENTS Cash and cash equivalents include highly liquid, temporary cash investments with an original maturity of three months or less from the date of purchase. BASIS OF ACCOUNTING The Company's policy is to prepare the financial statements on the accrual basis of accounting. The fiscal year end is April 30. RECENT PRONOUNCEMENTS In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." The Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires than an issuer classify a financial instrument that is within its scope as a liability ( or an asset in some circumstances ). The provisions of SFAF 150 are effective for financial instruments entered into or modified after May 31, 2003. The Company does not believe adopting this standard will have a material impact to its financial statements. In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4. SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handing costs, and spoilage. This statement requires that those items be recognized as current period charges regardless of whether they meet the criterion of "so abnormal" which was the criterion specified in ARB No. 43. In addition, this Statement requires that allocation of fixed production overheads to the cost of production be based on normal capacity of the production facilities. This pronouncement is effective for the Company beginning April 30, 2006. The Company does not believe adopting this new standard will have a material impact to its financial statements. In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment, which is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. The new standard will be effective for the Company in the first interim or annual reporting period beginning after December 15, 2005. The Company expects the adoption of this standard will have a material impact on its financial statements assuming employee stock options are granted in the future. In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 "effective for nonmonetary asset exchanges occurring in the fiscal year beginning January 1, 2006. SFAS No. 153 requires that exchanges of productive assets be accounted for at fair value unless fair value cannot be reasonably determined or the transaction lacks commercial substance. SFAS No. 153 is not expected to have a material effect on the company's Consolidated Financial Statements. In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections - a Replacement of APB Opinion No. 20 and FASB Statement No. 3". SFAS 154 requires retrospective application to prior period financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS 154 also redefines "restatement" as the revising of previously issued financial statements to reflect the correction of an error. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not believe that the adoption of SFAS 154 will have a significant impact on the financial statements. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of cash and cash equivalents, accounts payable payables approximates the carrying amount of these financial instruments due to their short maturity. COMPREHENSIVE INCOME Statements of Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130), requires that total comprehensive income be reported in the financial statements. The Company does not have any items considered to be other comprehensive income for the years ended April 30, 2006, and 2005. NET LOSS PER SHARE CALCULATION Basic net loss per common share ("EPS") is computed by dividing income available to commons stockholders by the weighted-average number of common shares outstanding for the period. The weighted-average number of common shares outstanding for computing basic EPS for the year ended April 30, 2006 and April 30, 2005 was 18,599,640 and 15,330,961, respectively. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. As of April 30, 2006 the Company had no outstanding securities that could have a dilutive effect on the outstanding common stock. ADVERTISING Advertising and marketing costs are expensed when incurred. Advertising expenses for the years ended April 30, 2006 and 2005 were $2,745 and $2,125, respectively. RESEARCH AND DEVELOPMENT The Company expenses its research and development in the periods incurred. As of April 30, 2006, there have been no research and development costs. CONCENTRATIONS OF CREDIT RISK Credit risk represents the accounting loss that would be recognized at the reporting date if counter parties failed completely to perform as contracted. Concentrations of credit risk (whether on or off balance sheet) that arise from financial instruments exist for groups of customers or counter parties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions described below. As of April 30, 2006, the company does not have any significant operations in any specific industry. REVENUE RECOGNITION Commission income from the sale of ATM machines and the related costs of these sales are recognized at the time of sale. STOCK BASED COMPENSATION The Company accounts for stock based awards to employees in accordance with Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, and has adopted the disclosure only alternative of SFAS No. 123, Accounting for Stock-Based Compensation. Options granted to consultants, independent representatives and other non-employees are accounted for using the fair value method as prescribed by SFAS No. 123. 3. STOCKHOLDER'S EQUITY During the year ended April 30, 2006, the Company issued 1,234,444 shares of stock for cash of $56,375 (an average of approximately $. 04 per share). ). Additionally, during the year ended April 30, 2006, the Company issued 25,000 shares of stock for services. The cash price per share was used to value the services at $250. During the year ended April 30, 2005, the Company issued 4,330,750 shares of stock for cash of $69,240 ( an average of approximately $. 011 per share). Additionally, during the year ended April 30, 2005, the Company issued 1,215,851 shares of stock for services. The market price per share was used to value the services at $42,147. As of July 2004 the Company issued 300,000 shares to satisfy an outstanding debt valued at $17,612. 4. RELATED PARTY TRANSACTIONS The Company's president and shareholder has advanced monies to the Company. The total advances at April 30, 2006 are $34,775. Total compensation to Scott Goldsmith, the President of the Company, amounted to $98,544 and $111,845 for the year ended April 30, 2006, and 2005, respectively. 5. LOSS PER SHARE Loss per share is calculated based on the weighted average number of shares outstanding during the year (18,599,640 shares for the year ended April 30, 2006 and 15,330,961 for the year ended April 30, 2005). 6. COMMITMENTS The Company leases office space under a non-cancelable operating lease. The lease requires minimum monthly payments of approximately $500 per month. The lease expires January 31, 2008 with minimum rent payable for the years ended 2006 and 2005 of $6,216 and 4,662, respectively. . 7 INCOME TAX MATTERS The Company accounts for income taxes using the asset and liability approach required by SFAS No. 109. The asset and liability approach requires the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts of and the tax basis of the Company's assets and liabilities. Future income tax benefits attributable to temporary differences are recognized to the extent that realization of such benefits is more likely than not. These future tax benefits are measured by applying currently enacted tax rates. The Company has a net operating loss carryover of approximately $3,700,000 available to offset future taxable income, if any. The loss carryover expires through 2023. A valuation allowance equal to 100% of the deferred tax assets has been established because of the uncertainty of realization of the deferred tax asset due to lack of earning history.