10KSB/A 1 b414563_10ksba.txt 10KSB/A ------------------------------- | | | 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/A (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 May 1, 2005 to April 29, 2006 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) PART I Item 1. Description of Business Prevention Insurance.com was incorporated in Nevada in 1975 under the name Vita Plus, Inc. Later we changed our name to Vita Plus Industries Inc. and in 1999 again changed it to Prevention Insurance.com. Historical Operations. In 1983 we made a public offering of 700,000 shares of our common stock for our own account. We registered the stock under the Securities Act of 1933. Upon completion of that offering, we registered the stock under Section 12 (g) the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). However, in 1989 we terminated the registration of our stock under Section 12(g) of the Act because our total assets had decreased to less than $3,000,000 and we were no longer required to file reports with the Securities and Exchange Commission. Our stock was then no longer quoted on NASDAQ. From inception until early 1999, our principle business engagement had been the sale and distribution of its own formulations of specific vitamins and nutritional supplements, and of various other health and personal care products. We sold our products through traditional methods: we employed a force of salespersons at our headquarters in Las Vegas, Nevada and compensated them on a commission basis: we also sold through a network of independent brokers. Our sales were made primarily to drug stores and other large retailers. Beginning in 1983, we also manufactured some of our products. However, after a period of approximately eight years, we stopped the manufacturing activity because it did not prove to be profitable. In 1981 we were licensed in Nevada as an agent for health and life insurance. Historically since 1991 we have not derived any significant income from sales of insurance policies. During the mid 1990s we developed the concept of reducing insurance costs for both health and life insurance through prevention measures, that is by emphasizing the maintenance of good health by members of the insured population. Subsequently, we began the development of hybrid insurance products incorporating preventive features with traditional health and life insurance products. Specifically, we developed two specially formulated preparations of vitamins and nutritional supplements: Nutra-Prevention Formula and Nutra-Protection. Those are formulations that emphasize health maintenance by providing multiple vitamins and a wide range of additional nutritional supplements for daily consumption, and which we believe provide optimal nutrition necessary for good health. We had planned to commence negotiations for joint venture arrangements with insurance companies using those two formulations to offer low-cost, preventive nutritional products combined with reduced premium rates for specialty insurance policies, but to date we have not entered into any such joint ventures. Effective March 15, 1999, we sold for cash substantially all of our assets associated with the traditional distribution of vitamin and dietary supplement formulations, including all inventory of vitamins and nutritional supplements and substantially all of our furniture and fixtures, and terminated all business activities associated with the distribution of individual vitamins and dietary supplements. However, we did retain our accounts receivable, our insurance agency license, our newly developed Prevention Insurance website and the ownership rights in the trademarks for Nutra-Prevention and Nutra-Protection formulas. Except for the collection of accounts receivable for sales made before March 15, 1999, we have had no business activities until this fiscal year, primarily due to ATM sales. Our activities have mainly been devoted to the planning and development of new insurance business. Presently our only employee is the President, who is a full-time employee, and the Secretary-Treasurer, two additional independent sales personnel, both of whom serve part-time. We now lease office facilities, approximately 1500 square feet, at 2770 S. Maryland Parkway, Suite 416, Las Vegas, NV 89109. Our telephone number is (702) 732-2758. New Business. We have become aware that in many instances individual agents, or sometimes entire agencies, desire to sell their existing books of business. These desires may arise because an agent wishes to diversify his assets to increase his return on equity, or wishes to retire or enter some other business, or no longer wishes to be required to devote time to administrative duties, or the insurance company for which the agent sells (perhaps as a captive agent) changes the arrangements under which the agents operate, or for other reasons. In any of these events, it is often possible for a third person to purchase the agent's book of business, provided that the purchase can provide a satisfactory arrangement for the continuing administration of the book. The acquisition and administration of books of existing business from insurance agents would provide us with a source of revenues that would be reasonably predictable (based on such factors as the kinds of policies, the length of time they have been in effect, the persistency of the business and the collection experience), if we would make arrangements for effective continuing administration. We think this could be done at reasonable cost, either by making arrangements for the administration with another existing agency that is administering similar business, or directly by employing personnel already experienced in those administrative activities. If we were to engage directly in these activities, we could be required to obtain licenses in states other than Nevada and hire employees who are licensed in Nevada and other states. We are acquiring agencies by using our stock as the main currency to affect a purchase. At the present time we do not have adequate resources to purchase for cash any books of insurance business that might be available. We intend to use exemptions from the registration provisions of the Securities Act of 1933, as amended, including those provided in Regulation D adopted there under, to raise cash to be used in such acquisitions and to offer shares of our common stock, or other securities, in exchange for such books of business. In this connection, we expect that in the case of any acquisitions of existing books, the purchase price, either in cash, securities or a combination thereof, will be negotiated based upon the mix of policies constituting the books and the history of their administration, among other things. If we are successful in purchasing agencies and their books, in some instances we may be able to make arrangements with another existing agency to administer one or more books for a percentage of the renewal commissions earned in respect of the policies constituting the books. In any such event, we would have obtained an income source without the need to incur corresponding operational costs or overhead expenses. If we are successful in acquiring a sufficient number of agencies and their books of business, we could be in a position to negotiate with the insurance companies that are the issuers of the policies to increase the amounts of renewal commissions on the policies. The success of any such negotiations will depend in part upon the identity of the insurance company that is the policy issuer, the kinds of policies and the amount of business in the books. We also intend to offer additional insurance products to the owners of policies constituting the books that are acquired and to prospective new clients. We would offer those products by traditional means directly as agent, or through agencies administering books for us, and also by telephone using an 800 number, and through an Internet web page that we intend to establish. Finally, we expert that through the acquisition of books of existing business we will be able to make contacts with potential purchasers of specialty insurance products that we could market in combination with our nutritional products, Nutra Prevention and Nutra-Protection. Item 2. Description of Property. At the present time we do not own any real property and have only an insignificant amount of furniture and equipment. We lease our office space, which we consider to be adequate for our present needs. Item 3. Legal Proceedings/ There are no pending legal proceedings to which are a party. Item 4. Submission of Matters to a Vote of Security Holders. None. PART II Item 5. Market for Common Equity and Related Stockholder Matters. (a) Market Information. During the past year, we have been trading on the NASDAQ BB. Any trading has been sporadic and there has been no meaningful trading volume. There are no outstanding warrants or options to purchase our common stock or any security convertible into shares of the class. (b) Holders of the Company's Securities. April 30, 2005, there were 476 holders of record of shares of the common stock. (c) Dividends. We have never paid any cash dividends on common stock and do not contemplate the payment of cash dividends in the foreseeable future. Item 6. Management's Discussion and Analysis of Operations. MANAGEMENT DISCUSSION FEBRUARY 1, 2006 APRIL 29th, 2006 Health Imaging was not able to provide proof of funding in time allotted. It was decided to pursue other opportunities within the Imaging and Healthcare space. We have decided to initiate a transaction on our own, in that regard we have made an offer to purchase a national chain of 18 free standing MRI Centers. The centers produce revenues in excess of 20 mi1lion US Dollars and approximately 3 million in EBITDA. We feel this acquisition would provide a platform with which to build a larger multi-modality imaging business on. We have secured LOI that gives us an exclusive right to purchase the chain within certain time period 90 days from delivering a term sheet that shows our ability to provide sufficient funding, we are currently in negotiations with several funding sources and feel we can secure the commitments necessary to close the transaction within the allotted time frame. PREVENTION INSURANCE Due to the proposed acquisition of the chain of 'imaging centers and the desire of the underwriting insurance company to take more time in evaluating its interest in marketing low cost healthcare policies on television due to underwriting changes and licencing of sales agents in each area that policies would be written it was decided to put the test on hold and review again in 2007. QUICK PAY ATM Quick pay ATM sales continue to increase due to an effective mail out and follow up sales call that has improved Quick Pay's reach and improved contact and closing ratios Quick Pay continues to pay the bulk of overhead for Prevention Insurance while it pursues its acquisition strategy. FINANCIAL CONDITION We are still undercapitalized but are current with all vendors due to ATM revenue and a small amount of 144 stock sales we anticipate a capital and stock restructure upon completion of the proposed acquisition and the accompanying financing. Item 7. Financial Statements. See attached. Item 8. Changes in and disagreements With Accounts and Financial Disclosure. PART III Item 9. Directors, Executive Officers, Promoters and Control persons: Compliance with Section 16(a) of the Exchange Act. The following table sets forth certain information concerning our officers and directors. Name Age Position Scott C. Goldsmith 57 President/CEO George T. Nasser 60 Director Scott C. Goldsmith founded the company in 1975 and has been the President and Chairman of the Board since that time. In 1986 he completed a three-year course in Harvard University's OPM (Owner, President, Manager) Program. Mr. Goldsmith's business experience has been entirely in sales and administration for over twenty-five years. He has been a licensed insurance agent in Nevada since 1994. Following our sale of assets associated with our former business, Mr. Goldsmith was employed by the purchaser to operate the business conducted with those assets and was able to devote only part of his time to developing new business operations. He continued in that capacity until Sept. 18, 2000 when he began to devote full time to our new business operations. Richard W. Peterson is engaged in the private practice of counseling psychology with professionals and executives and consulting with law firms on banking matters and small businesses on management and marketing matters. He is also a faculty member at the University of Phoenix at its San Diego, California, campus and its Online Campus in San Francisco, California. Mr. Peterson was the Chief Executive Officer and Vice Chairman of the Board of Directors of the Continental Bank, Las Vegas, Nevada, from 1982 until 1987, when he retired to pursue his doctoral studies. He has served on ad hoc business development committees for the governors of Arizona and Nevada, and has written a book and several articles on the psychological effect of combat on soldiers and prisoners of war. George T. Nasser is acting as a health insurance consultant to various companies in the insurance industry. For a number of years he served as Vice President of Marketing for Standard Life of Indiana in charge of Sales and Product Development and as Vice President for Golden Rule Insurance for fifteen years. In those capacities, his responsibilities included developing health insurance products and directing national sales forces. The members of the Audit Committee of the Board of Directors are Goldsmith, Peterson and Nasser. The members of the Nominating Committee are Mr. Goldsmith, Ms. Goldsmith and Mr. Nasser. Item 10. Executive Compensation. The following table sets forth certain information concerning the annual compensation paid to our executive officers during our last three fiscal years. We have not paid or awarded any long-term compensation to any person during the past three years, and we have no long-term incentive plans. Name & Principal Other Annual Position Year Salary Bonus Compensation Scott C. Goldsmith 2004 $111,845 President/CEO 2003 $ 68,305 2002 $ 61,382 2001 $ 6,340 We have formulated no plans as to the amounts of future cash compensation. We intend to use the services of agents whose books of business are acquired. Any additional personnel required would have salaries negotiated. Item 11. Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information as of April 30, 2003, concerning the beneficial ownership of our common stock by each of our executive officers and directors, all directors and officers as a group, and each person who owns 5% or more of our outstanding common stock. Unless otherwise indicated, each person names has sole voting and investment power over the shares indicated. Name Shares Beneficially % Outstanding Owned Scott C. Goldsmith 2,482,500 13.815 Aleene Goldsmith 100,054 155.7 George Nasser 95,000 .528% Item 12. Exhibits and Reports on Form 8-K Included with this report. Signatures In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 15, 2006 Prevention Insurance.com By: /s/ Scott Goldsmith --------------------- Scott Goldsmith, President PREVENTION INSURANCE.COM FINANCIAL STATEMENTS APRIL 29, 2006 TABLE OF CONTENTS -------------------------------------------------------------------------------- INDEPENDENT AUDITOR'S REPORT F-1 -------------------------------------------------------------------------------- FINANCIAL STATEMENTS BALANCE SHEET F-2 STATEMENTS OF OPERATIONS F-3 STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) F-4 STATEMENTS OF CASH FLOWS F-5 NOTES TO THE FINANCIAL STATEMENTS F-6-9 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 F-1 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 F-2 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 F-3 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 F-4 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 F-5 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. F-6 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. F-7 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. F-8 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. F-9