10KSB/A 1 m10ksba043005.txt PREVENTION INSURANCE 04-30-05 10-KSB/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB/A [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED: For the fiscal year ended April 30, 2005 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________. Commission File No. 000-32389 PREVENTION INSURNACE.COM ---------------------------------------------- (Name of small business issuer in its charter) NEVADA 88-0126444 ----------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2770 SOUTH MARYLAND PARKWAY, SUITE 416 LAS VEGAS, NEVADA 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: None. Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.01 par value per share ----------------------------------------- (Title of Class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the small business issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of small business issuer's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- KSB or any amendment to this Form 10-KSB. [ ] State issuer's revenues for its most recent fiscal year. $-0- State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) $-0- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 19,719,362 shares of Common Stock, par value $.01 per share, as of October 31, 2006. DOCUMENTS INCORPORATED BY REFERENCE None. Transitional Small Business Disclosure Format (Check one): Yes[ ] No[X] PART I CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This report and other reports, as well as other written and oral statements made or released by us, may contain forward looking statements. Forward looking statements are statements that describe, or that are based on, our current expectations, estimates, projections and beliefs. Forward looking statements are based on assumptions made by us, and on information currently available to us. Forward-looking statements describe our expectations today of what we believe is most likely to occur or may be reasonably achievable in the future, but such statements do not predict or assure any future occurrence and may turn out to be wrong. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. The words "believe," "anticipate," "intend," "expect," "estimate," "project", "predict", "hope", "should", "may", and "will", other words and expressions that have similar meanings, and variations of such words and expressions, among others, usually are intended to help identify forward-looking statements. Forward-looking statements are subject to both known and unknown risks and uncertainties and can be affected by inaccurate assumptions we might make. Risks, uncertainties and inaccurate assumptions could cause actual results to differ materially from historical results or those currently anticipated. Consequently, no forward-looking statement can be guaranteed. The potential risks and uncertainties that could affect forward looking statements include, but are not limited to increased competition, extent of the market demand for and supply of goods and services of the types provided by the Company, governmental regulation, performance of information systems, and the ability of the Company to hire, train and retain qualified employees. In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects have been and may further be described in the Company's prior and future filings with the Securities and Exchange Commission and other written and oral statements made or released by the Company. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this document. The information contained in this report is current only as of its date, and we assume no obligation to update any forward-looking statements. ITEM 1. DESCRIPTION OF BUSINESS. Prevention Insurance.com (the "Company") was incorporated in the State of Nevada on May 7, 1975, to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. The Company was originally incorporated under the name Vita Plus, Inc. later we changed our name to Vita 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 insurance agency license, our newly developed Prevention Insurance website and the ownership rights in the trademarks for Nutra-Prevention and Nutra-Protection formulas. Plan of Operation: We registered our common stock on a Form 10-SB registration statement filed pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 12(g) thereof. We intend to file with the Securities and Exchange Commission periodic and episodic reports under Rule 13(a) of the Exchange Act, including quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. We will attempt to locate and negotiate with a business entity for the merger of that target business into the Company. In certain instances, a target business may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that we will be successful in locating or negotiating with any target business. Management believes that there are perceived benefits to being a reporting company with a class of registered securities. These are commonly thought to include (1) the ability to use registered securities to make acquisition of assets or businesses; (2) increased visibility in the financial community; (3) the facilitation of borrowing from financial institutions; (4) improved trading efficiency; (5) stockholder liquidity; (6) greater ease in subsequently raising capital; (7) compensation of key employees through stock options; (8) enhanced corporate image; and (9) a presence in the United States capital market. A business entity, if any, which may be interested in a business combination with us may include (1) a company for which a primary purpose of becoming public is the use of its securities for the acquisition of assets or businesses; (2) a company which is unable to find an underwriter of its securities or is unable to find an underwriter of securities on terms acceptable to it; (3) a company which wishes to become public with less dilution of its common stock than would occur normally upon an underwriting; (4) a company which believes that it will be able to obtain investment capital on more favorable terms after it has become public; (5) a foreign company which may wish to gain an initial entry into the United States securities market; (6) a special situation company, such as a company seeking a public market to satisfy redemption requirements under a qualified Employee Stock Option Plan; or (7) a company seeking one or more of the other perceived benefits of becoming a public company. Management will continue to seek a qualified company as a candidate for a business combination. We are authorized to enter into a definitive agreement with a wide variety of businesses without limitation as to their industry or revenues. It is not possible at this time to predict which company, if any, we will enter into a definitive agreement or what will be the industry, operating history, revenues, future prospects or other characteristics of that company. We may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. Our management, which in all likelihood will not be experienced in matters relating to the business of a target business, will rely upon its own efforts in accomplishing our business purposes. The analysis of new business opportunities will be undertaken by, or under the supervision of our officer and director, who is not a professional business analyst. In analyzing prospective business opportunities, management may consider such matters as: * the available technical, financial and managerial resources; * working capital and other financial requirements; history of operations, if any; * prospects for the future; * nature of present and expected competition; * the quality and experience of management services which may be available and the depth of that management; * the potential for further research, development, or exploration; * specific risk factors not now foreseeable but which then may Be anticipated to impact our proposed activities; * the potential for growth or expansion; * the potential for profit; * the perceived public recognition or acceptance of products, services, or trades; name identification and; * other relevant factors. Management does not have the capacity to conduct as extensive an investigation of a target business as might be undertaken by a venture capital fund or similar institution. As a result, management may elect to merge with a target business which has one or more undiscovered shortcomings and may, if given the choice to select among target businesses, fail to enter into an agreement with the most investment-worthy target business. Following a business combination we may benefit from the services of others in regard to accounting, legal services, underwritings and corporate public relations. If requested by a target business, management may recommend one or more underwriters, financial advisors, accountants, public relations firms or other consultants to provide such services. A potential target business may have an agreement with a consultant or advisor providing that services of the consultant or advisor be continued after any business combination. Additionally, a target business may be presented to us only on the condition that the services of a consultant or advisor be continued after a merger or acquisition. Such preexisting agreements of target businesses for the continuation of the services of attorneys, accountants, advisors or consultants could be a factor in the selection of a target business. In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, it is likely that our present management and stockholder will no longer be in our control. In addition, it is likely that our officer and director will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors. It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances however, as a negotiated element of its transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after we have entered into an agreement for a business combination or have consummated a business combination and we are no longer considered a blank check company. The issuance of additional securities and their potential sale into any trading market which may develop in our securities may depress the market value of our securities in the future if such a market develops, of which there is no assurance. While the terms of a business transaction to which we may be a party cannot be predicted, it is expected that the parties to the business transaction will desire to avoid the creation of a taxable event and thereby structure the acquisition in a tax-free reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended. With respect to any merger or acquisition negotiations with a target business, management expects to focus on the percentage of the Company which target business stockholder would acquire in exchange for their shareholdings in the target business. Depending upon, among other things, the target business's assets and liabilities, our stockholder will in all likelihood hold a substantially lesser percentage ownership interest in the Company following any merger or acquisition. Any merger or acquisition effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our stockholder at such time. No assurances can be given that we will be able to enter into a business combination, as to the terms of a business combination, or as to the nature of the target business. As of the date hereof, management has not made any final decision concerning or entered into any written agreements for a business combination. When any such agreement is reached or other material fact occurs, we will file notice of such agreement or fact with the Securities and Exchange Commission on Form 8-K. Persons reading this Form 10-KSB are advised to determine if we have subsequently filed a Form 8-K. We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes (but has not conducted any research to confirm) that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, and providing liquidity for stockholder and other factors. Business opportunities may be available 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. 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. To date, the Company has not been successful in its efforts. To defray expenses during the year ended April 30, 2005, the Company received commissions as a dealer representative for the sale of ATM machines. Our activities have mainly been devoted to the planning and development of new insurance business. Presently our only employees are the President, who is a full-time employee, and the Secretary-Treasurer and one additional employee, 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. ITEM 2. DESCRIPTION OF PROPERTY. We have no properties and at this time have no agreements to acquire any properties. We currently use the offices of management at no cost to us. Management has agreed to continue this arrangement until we complete an acquisition or merger. ITEM 3. LEGAL PROCEEDINGS. There are no legal proceedings against us and we are unaware of such proceedings contemplated against us. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. (a) Market Information. Our Common Stock is traded on the over-the- counter securities market through the National Association of Securities Dealers Automated Quotation Bulletin Board System, under the symbol "LRMT". 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 OR PLAN OF OPERATION. A. Plan of Operations for the Coming Year. We were formed to engage in a merger with or acquisition of an unidentified foreign or domestic company which desires to become a reporting ("public") company whose securities are qualified for trading in the United States secondary market. We will not acquire or merge with any entity which cannot provide audited financial statements at or within a reasonable period of time after closing of the proposed transaction. We are subject to all the reporting requirements included in the Exchange Act. Included in these requirements is our duty to file audited financial statements as part of our Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a merger or acquisition, as well as our audited financial statements included in our annual report on Form 10-K (or 10-KSB, as applicable). If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of the Exchange Act, or if the audited financial statements provided do not conform to the representations made by the target business, the closing documents may provide that the proposed transaction will be voidable at the discretion of our present management. We will not restrict our search for any specific kind of businesses, but may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its business life. It is impossible to predict at this time the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which we may offer. A business combination with a target business will normally involve the transfer to the target business of the majority of our common stock, and the substitution by the target business of its own management and board of directors. The Board of Directors has passed a resolution which contains a policy that we will not seek an acquisition or merger with any entity in which our officer, director, stockholder or his affiliates or associates serve as officer or director or hold more than a 10% ownership interest. We have made good progress in completing our marketing plan. We will utilize this plan to acquiring insurance wholesalers in the senior market. We plan to finalize our first acquisitions in the coming year. We are going to capitalize the Prevention Insurance division through a mezzanine round of financing the exact amount is not determined at this time. Prevention Insurance's primary focus will be to merge or acquire private insurance wholesalers that market senior products either regionally or nationally. Their products are targeted to baby boomers age 50 and over. Their primary products are annuities, fixed and variable as well as a wide selection of life insurance products and long term care insurance. Our goal is to acquire 2-4 profitable companies by the end of our fiscal year which is April 30, 2006. B. Discussion of Financial Condition and Results of Operations. We have, and will continue to have, no capital with which to provide the owners of business opportunities with any cash or other assets. However, management believes we will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. Our officer and director have not conducted market research and are not aware of statistical data to support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. Our audit reflects the fact that we have no current source of income. Further, that without realization of additional capital, it would be unlikely for the Company to continue as a going concern. Our stockholder has agreed that they will advance any additional funds which we need for operating capital and for costs in connection with searching for or completing an acquisition or merger. Such advances will be made without expectation of repayment unless the owners of the business which we acquire or merge with agree to repay all or a portion of such advances. There is no minimum or maximum amount such stockholder will advance to us. We will not borrow any funds for the purpose of repaying advances made by such stockholder, and we will not borrow any funds to make any payments to our promoters, management or their affiliates or associates. Our condition is at present under-capitalized. We have basically been able to pay off all of our payables as agreed. Revenue to date has been provided by our ATM equipment sales division, Quick Pay that is selling ATM machines to retail outlets around the U. S. We have also received a small amount of capital from existing shareholders through periodic stock sales. We will also be seeking out private equity capital or a strategic partner as possible sources of financing. QUICK PAY ATM DIVISION Our ATM division is growing. Our average number of ATM placement has increased from 2 - 3 per month to 6-10 per month. Revenue is projected next year at $200,000 or more in sales. We anticipate opening an additional sales office to boost sales further. We have recently started marketing a new ATM insurance policy that insures the machine as well as the cash inside for a nominal premium. With hundreds of thousands of ATM machines out in the market this should prove to be a lucrative and profitable niche for us. We have sold our first policies and intend to expend the effort this year. ITEM 7. FINANCIAL STATEMENTS. PREVENTION INSURANCE.COM FINANCIAL STATEMENTS APRIL 30, 2005 TABLE OF CONTENTS ----------------------------------------------------------------------- F-1 INDEPENDENT AUDITOR'S REPORT ----------------------------------------------------------------------- FINANCIAL STATEMENTS F-2 BALANCE SHEET F-3 STATEMENTS OF OPERATIONS F-4 STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) F-5 STATEMENTS OF CASH FLOWS F-6-7 NOTES TO THE FINANCIAL STATEMENTS 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, 2005, and the related statements of operations, changes in stockholders' equity and cash flows for the years ended April 30, 2005 and 2004. 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 provide 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, 2005, and the results of its operations and its cash flows for the years ended April 30, 2005 and 2004, 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 July 22, 2005 F-1 PREVENTION INSURANCE.COM BALANCE SHEET APRIL 30, 2005

ASSETS ------------------------------------------------------------------------- Current assets: Cash $ 2,330 --------- --------- TOTAL CURRENT ASSETS $ 2,330 ========= LIABILITIES AND STOCKHOLDERS' (DEFICIT) ------------------------------------------------------------------------- Current liabilities: Accounts payable $ 3,428 --------- TOTAL CURRENT LIABILITIES $ 3,428 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, 17,969,918 shares issued and outstanding 179,714 Additional paid in capital 3,537,811 Accumulated (deficit) (3,664,169) --------- 53,356 Less: Treasury stock, at cost (52,954) Less: Stock Subscriptions Receivable (1,500) --------- Total Stockholder's (Deficit) (1,098) --------- Total Liabilities and Stockholder's Equity $ 2,330 =========

SEE NOTES TO FINANCIAL STATEMENTS F-2 PREVENTION INSURANCE.COM STATEMENTS OF OPERATIONS FOR THE YEARS ENDED APRIL 30,

2005 2004 --------------------------------- Commission income $ 165,807 $ 123,800 General and administrative 269,356 161,251 --------------------------------- (Loss) from operations (103,549) (37,451) Interest expense -- -- (Loss) before income taxes (103,549) (37,451) Income taxes -- -- --------------------------------- Net (loss) $(103,549) $ (37,451) ================================= (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, 2005 AND 2004

Preferred Stock Common Stock ---------------- -------------------------- Additional Accumulated Treasury Stock Number Par Value Number Par Value Paid In Capital Deficit Stock Subscriptions Total ================= =========================== =============== ============ ============ ============= ============ Balance May 1, 2003 - - 9,240,817 $ 92,408 $ 453,019 $(3,523,169) $ (52,954) $ - $ (30,696) ================= =========================== =============== ============ ============ ============= ============ Shares issued for cash - - 2,142,500 21,425 10,200 - - - 31,625 Shares issued for services - - 665,000 6,665 3,310 - - - 9,975 Net (loss) for the year - - - - - (37,451) - - (37,451) ================= =========================== =============== ============ ============ ============= ============ 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)

F-4 PREVENTION INSURANCE.COM STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED APRIL 30,

2005 2004 =========== =========== Cash flows from operating activities: Net loss $ (103,549) $ (37,451) 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 59,758 9,975 Increase / (Decrease) in accounts payable (1,747) (2,012) Increase / (Decrease) in accounts payable - related party (21,372) (2,137) ----------- ----------- Net cash used by operating activities (66,910) (31,625) 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 69,240 31,625 ----------- ----------- Net cash provided by financing activities 69,240 31,625 ----------- ----------- Net increase in cash 2,330 - Cash, beginning of period - - ----------- ----------- Cash, end of period $ 2,330 $ - =========== =========== Non Cash Investing and Financing Activities Issuance of Common Stock to reduce Debt $ 17,612 $ - Issuance of Common Stock for Services $ 42,146 $ 9,975

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, 2005, 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. 1. 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 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, 2005, and 2004. 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, 2005 and April 30, 2004 was 15,330,961 and 10,624,567, 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, 2005 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, 2005 and 2004, were $2,125 and $0, respectively.. RESEARCH AND DEVELOPMENT The Company expenses its research and development in the periods incurred. As of April 30, 2005, 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, 2005, 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, 2005, the Company issued 5,921,601 shares of stock for cash of $66,240 ( 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. During the year ended April 30, 2004, the Company issued 2,142,500 shares of stock for cash of $31,625 ( an average of approximately $. 015 per share). Additionally, during the year ended April 30, 2005, the Company issued 665,000 shares of stock for services. The cash price per share was used to value the services at $9,975. 4. RELATED PARTY TRANSACTIONS The Company's president and shareholder has advanced monies to the Company. No advances as of April 30, 2005 have been made. The total advances at April 30, 2004 are $21,372, and have been satisfied as of the current period. Total compensation to Scott Goldsmith, the President of the Company, amounted to $111,845 and $67,884 for the year ended April 30, 2005, and 2004, respectively. 5. LOSS PER SHARE Loss per share is calculated based on the weighted average number of shares outstanding during the year (15,330,961 shares for the year ended April 30, 2005 and 10,624,567 for the year ended April 30, 2004) 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 April 30, 2006 with minimum rent payable for the year of $4,500. 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 $3,600,000 available to offset future taxable income, if any. The loss carryover expires through 2022. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. There were no changes in or disagreements with accountants on accounting and financial disclosure for the period covered by this report. ITEM 8A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls We evaluated the effectiveness of our disclosure controls and procedures as of April 30, 2005, the end of the fiscal period covered by this Annual Report on Form 10-KSB. This evaluation was made under the supervision of our principal executive officer and principal financial officer. We reviewed and evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as of the end of the fiscal year covered by this report, as required by Securities Exchange Act Rule 13a-15, and concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, is accumulated and communicated to management on a timely basis, including our principal executive officer and principal financial officer. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of such period, our disclosure controls and procedures are effective to ensure that we record, process, summarize, and report information required to be disclosed in the reports we filed under the Securities Exchange Act of 1934 within the time periods specified by the Securities and Exchange Commission's rules and regulations. During the year ended April 30, 2005, there have been no changes in our internal control over financial reporting, or to our knowledge, in other factors, that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control framework and processes were designed to provide reasonable assurance to management and our Board of Directors regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that: - pertain to the maintenance of records, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; - 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 our management and our Board of 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 our financial statements. Because of its inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Further, because of changing conditions, effectiveness of internal control over financial reporting may vary over time. Thus, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. Even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Our principal executive officer and principal accounting officer assessed the effectiveness of our internal control over financial reporting as of April 30, 2005. In making this assessment, we have taken into account the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control - Integrated Framework in formulating our internal controls. Management reviewed the results of its assessment with our Audit Committee and the Board of Directors of the Company. Based upon its assessment, management believes that we maintained effective internal control over financial reporting as of April 30, 2005. 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 56 President/CEO George T. Nasser 59 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. Other than those mentioned above, we have no employees and do not anticipate hiring any in the future until we successfully implemented our business plan described herein. None of our directors, executive officers, promoters or control persons has been involved in any legal proceedings material to the evaluation of the ability or integrity of any of the aforementioned persons. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's executive officers and directors and persons who own more than 10% of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (hereinafter referred to as the "Commission") initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership, of Common Stock and other equity securities of the Company on Forms 3, 4, and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by Commission regulations to furnish the Company with copies of all Section 16(a) reports they file. To the Company's knowledge, all of the Company's executive officers, directors and greater than 10% beneficial owners of its common Stock, have complied with Section 16(a) filing requirements applicable to them during the Company's most recent fiscal year. 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 2005 $111,845 President/CEO 2004 $ 68,305 2003 $ 61,382 2002 $ 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 AND RELATED STOCKHOLDER MATTERS. The following table sets forth each person known by us to be the beneficial owner of five percent or more of our common stock, all directors individually and all our directors and officers as a group. Except as noted, each person has sole voting and investment power with respect to the shares shown. Amount and Nature of Name and Address of Beneficial Percent of Title of Class Beneficial Owner (1) Ownership Class (2) -------------- ------------------------ ---------- ---------- Common Stock Scott C. Goldsmith 2,482,500 13.815% Common Stock Aleene Goldsmith 100,054 .557% Common Stock George Nasser 95,000 .528% (1) Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act and unless otherwise indicated, represents securities for which the beneficial owner has sole voting and investment power. (2) Based upon 17,969,918 shares issued and outstanding. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Total compensation to Scott Goldsmith, the President of the Company, amounted to $111,845 for the year ended April 30, 2005. ITEM 13. 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 small business issuer caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. Date: December 18, 2006 Prevention Insurance.com By: /s/ Scott Goldsmith --------------------- Scott Goldsmith, President