10KSB/A 1 l10ksba043007.txt PREVENTION INSURANCE.COM FORM 10-KSB/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB/A Amendment No. 2 [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, 2007 [ ] 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 INSURANCE.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, NV89109 -------------------------------------------------------------- (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: $612,343 as of August 31, 2007. State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 22,679,362 shares of Common Stock, par value $.01 per share, as of August 31, 2007. DOCUMENTS INCORPORATED BY REFERENCE None. Transitional Small Business Disclosure Format (Check one):Yes[ ] No[X] EXPLANATORY NOTE *EXPLANATORY NOTE- Following the intial filing of the Form 10-KSB/A ("Amendment No. 1"), the Company discovered that it had inadvertently included incorrect versions of the auditor's consent which did not correspond to the auditor's opinion for the fiscal year ended April 30, 2007. The Company is filing this Amendement No. 2 to Form 10-KSB/A to amend its Annual Report on Form 10-KSB/A for the fiscal year ended April 30, 2007 in order to remove the auditor's consent as it is not required for filing. The Company previously filed the Amendment No. 1 to Form 10-KSB to amend its Annual Report on Form 10-KSB ("the Original Filing") for the fiscal year ended April 30, 2007 in order to amend and restate the financial statements and related disclosures for matters related to the Company discovering that it had erroneously overstated the cash and cash equivalent account balance by $3,623. This Amendment No. 2 hereby supersedes and amends the Form 10-KSB/A with respect to Exhibit 23.1 and 23.2. In addition, in accordance with Rule 12b-15 promulgated under the Securities and Exchange Act of 1934, as amended, this Amendment No. 1 also includes updated certifications from our President/Chief Executive Officer as Exhibits 31.1 and 32.1. Except as required to reflect the effects of the items described above, no additional modifications or updates to the Form 10-KSB/A have been made. Information not relating to the restatement remains unchanged and reflects the disclosures made at the time of the Original Filing. Within four days of the error being determined, we have filed this Form 10- KSB/A Amendment No. 2 without the issuance of an 8-K as a result of the timely correction of the financial statements and related disclosures for the Annual Report on Form 10-KSB/A for the fiscal year ended April 30, 2007. 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. BUSINESS DEVELOPMENT & BUSINESS OVERVIEW 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. 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 our 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 1991 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 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. In 2005, the Company added a second line of business and has been focused on its development of its ATM machine sale operations. The Company has been keeping its focus on the second line of business of ATM machine sales for more than two years. Management does not feel we have re-entered the development stage as we are continuing to receive revenue from our ATM machine sale operations. 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. While the insurance license has been retained, the Company's main focus has been the ATM machine sales lines of business. Should an opportunity arise where the Company is able to capitalize on its experience in insurance we will benefit, but at this stage the focus of the company is solely on the further expansion of the line of business devoted to ATM machine sales. PLAN OF OPERATION Along with our insurance and ATM sales 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 have received $22,000 related to a potential merger candidate and have booked this as an acquisition liability on our balance sheet. The final terms and requisite due diligence have not yet been completed and should the merger not go through, the $22,000 will convert to a short term note payable. 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 stockholders 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. Depending upon, among other things, the target business's assets and liabilities, our stockholders 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 stockholders at such time. We have received $22,000 related to a potential merger candidate and have booked this as an acquisition liability on our balance sheet. The final terms and requisite due diligence have not yet been completed and should the merger not go through, it will convert to a short term note payable. No assurances can be given that we will be able to finalize any 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. 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. EXISTING VENTURES 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 continually attempting to acquire 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 is established. Finally, we expect 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 find an acquisition candidate or develop its insurance line of business. The Company is continuing with its planned expansion of its ATM machine sales division and generating commissions as a dealer representative and to build that business further. Our activities have been devoted to the planning and expansion of our ATM machine sale operations. Management does not feel we have re-entered the development stage as we are continuing to receive revenue from our ATM machine sale operations. Presently our only employees are the President, who is full-time, and the Secretary-Treasurer and one additional employee, all of whom serve as contract labor. ITEM 2. DESCRIPTION OF PROPERTY. We have no properties and at this time have no agreements to acquire any properties. 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 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 "PVNC". Any trading has been sporadic and there has been no meaningful trading volume. The only outstanding warrants or options to purchase our common stock or any security convertible into shares of the class are 2,000,000 warrants issued to Scott Goldsmith on November 6, 2006 for an exercise price of $0.10 and term of 5 years. Additionally, Mr. Goldsmith was awarded Convertible Preferred Shares, which are convertible into two (2) common shares of stock for every one (1) preferred share. Mr. Goldsmith is 100% owner of these shares. (b) Holders of the Company's Securities. April 30, 2007, 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. PLAN OF OPERATION. FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS. This Report contains forward- looking statements. Such forward-looking statements include statements regarding, among other things, (a) our projected sales and profitability, (b) our growth strategies, (c) anticipated trends in our industry, (d) our future financing plans, (e) our anticipated needs for working capital, (f) our lack of operational experience, and (g) the benefits related to ownership of our common stock. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," as well as in this Report generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will in= fact occur as projected. A. Plan Of Operations for the Coming Year We were formed to engage in a merger 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-KSB/A. 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, stockholders or his affiliates or associates serve as officer or director or hold more than a 10% ownership interest. 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. 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 do not have sufficient revenue to cover expenses. Further, that without realization of additional capital, it would be unlikely for the Company to continue as a going concern; we have sustained ourselves through commission income of ATM machine sales. Our stockholders have 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 stockholders 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 Quick Pay ATM sales continue to increase due to an effective mail out campaign and follow up sales calls that have 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. We 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 intend to expend the effort in fiscal year 2008. ITEM 7. FINANCIAL STATEMENTS. PREVENTION INSURANCE.COM FINANCIAL STATEMENTS APRIL 30, 2007 TABLE OF CONTENTS ----------------------------------------------------------------------- F-1 INDEPENDENT AUDITOR'S REPORT - 2007 F-1.1 INDEPENDENT AUDITOR'S REPORT - 2006 F-2 BALANCE SHEETS 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 ----------------------------------------------------------------------- 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, 2007, and the related statement of operations, changes in stockholders' deficit and cash flows for the year ended April 30, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit 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, 2007, and the results of its operations and its cash flows for the year ended April 30, 2007, 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 Note 2. 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 2. The financial statements do not include any adjustments that might result from this uncertainty. /s/Lynda R. Keeton CPA, LLC --------------------------- Las Vegas, Nevada August 28, 2007, except for Note 3, which is dated September 13, 2007 F-1 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 statement of operations, changes in stockholders' equity and cash flows for the year ended April 30, 2006. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our 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 sheet. 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, 2006, and the results of its operations and its cash flows for the year ended April 30, 2006, 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 Note 1. 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-1.1 PREVENTION INSURANCE.COM BALANCE SHEETS

APRIL 30, ---------------------------- 2007 2006 ------------- ------------ (As restated, see note 3) ASSETS Current assets: Cash and cash equivalents $ 16,685 $ -- Accounts receivable 5,228 -- ------------- ------------ Total current assets $ 21,913 $ -- ============= ============ LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities: Accounts Payable $ 33,010 $ 9,999 Bank overdraft -- 2,432 Acquisition liability 22,000 -- ------------- ------------ Total current liabilities 55,010 12,431 ------------- ------------ Stockholders' (deficit): Preferred stock, par value $0.01; authorized 10,000,000 shares; 1,000,000 and 0 shares issued 10,000 -- Common stock, par value $0.01; authorized 100,000,000 shares; 21,719,362 and 19,229,362 shares 217,194 192,308 issued Treasury stock, 24,142 and 24,142 shares, at cost (52,954) 52,954) Additional paid-in capital 3,687,682 3,581,954 Accumulated (deficit) (3,895,019) (3,733,739) ------------- ------------ Total stockholders' (deficit) (33,097) (12,431) ------------- ------------ Total liabilities and stockholders' (deficit) $ 21,913 $ - ============= ============

The accompanying notes are an integral part of these financial statements. F-2 PREVENTION INSURANCE.COM STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED APRIL 30, ---------------------------- 2007 2006 ----------- ----------- (As restated, see note 3) Commissions $ 154,729 $ 146,048 ----------- ----------- Total income 154,729 146,048 ----------- ----------- Operating costs and expenses: General and administrative 191,939 116,953 Officers compensation 124,177 98,544 ----------- ----------- Total Operating costs and expenses 316,116 215,497 ----------- ----------- Loss from Operations (161,387) (69,449) Other income (expense): Interest expense (5) (9) ----------- ----------- Net Loss $ (161,392) $ (69,458) =========== =========== Earnings per common share: Basic and diluted $ (0.01) $ (0.01) =========== =========== Weighted average common shares outstanding: Basic and diluted 19,892,969 18,599,640 =========== ===========

The accompanying notes are an integral part of these financial statements. F-3 PREVENTION INSURANCE.COM STATEMENTS OF STOCKHOLDERS' (DEFICIT)

Preferred Common Additional Stock Stock Par Paid in Treasury Stock Accumulated Number Par Value Number Value Capital Stock Subscriptions Deficit Total --------- ---------- ---------- --------- ---------- ---------- ------------- ----------- --------- BALANCE APRIL 30, 2005 - $ - 17,969,918 $ 179,714 $3,537,811 $ (52,954) $ (1,500) $(3,664,169) (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 $ (52,954) $ - $(3,733,627) $ (12,431) ========= ========== ========== ========= ========== ========== ============= =========== ========= Stock issued for cash 1,890,000 18,886 7,990 26,876 Stock issued for services 600,000 6,000 23,500 29,500 Issuance of preferred shares 1,000,000 10,000 30,000 40,000 Issuance of warrants to officers 44,350 44,350 Net (loss) (161,392) (161,392) --------- ---------- ---------- --------- ---------- ---------- ------------- ----------- --------- BALANCE, APRIL 30, 2007 1,000,000 $ 10,000 21,719,362 $ 217,194 $3,687,682 $ (52,954) - $(3,895,019) $ (33,097) ========= ========== ========== ========= ========== ========== ============= =========== =========

The accompanying notes are an integral part of these financial statements. F-4 PREVENTION INSURANCE.COM STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED APRIL 30, ---------------------------- 2007 2006 ------------- ----------- (As restated, see note 3) Cash flows from operating activities: Net loss $ (161,392) $ (69,458) ------------- ----------- Adjustments to reconcile net income to net cash provided by operating activities: Stock issued for services and officer payable 69,500 250 Warrants issued to officers 44,350 -- Changes in assets and liabilities: Accounts receivable (5,228) -- Accounts payable 23,012 6,751 Bank overdraft (2,432) 2,432 ------------- ----------- Total adjustments 129,202 9,253 ------------- ----------- Net cash provided by operating activities (32,190) (60,205) ------------- ----------- Cash flows from investing activities: -- -- Net cash provided by investing activities -- -- Cash flows from financing activities: Proceeds from issuance of common stock 26,875 56,375 Proceeds from stock subscription receivable -- 1,500 Increase in acquisition liability 22,000 -- ------------- ----------- Net cash provided by financing activities 48,875 57,875 ------------- ----------- Cash and cash equivalents: Increase in cash and cash equivalents 16,685 (2,330) Balance, beginning of year -- 2,330 ------------- ----------- Balance, end of year $ 16,685 $ -- ============= =========== Supplemental cash flow disclosures: Interest paid $ 5 $ 9 Taxes paid $ 0 $ 0

The accompanying notes are an integral part of these financial statements. F-5 PREVENTION INSURANCE.COM NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION 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. Since 2005, the Company has additionally focused on a second line of business and has been focused on the development of its ATM machine sale operations. The Company has been keeping its focus on the second line of business of ATM machine sales for more than two years. Management does not feel we have re-entered the development stage as we are continuing to receive revenue from our ATM machine sale operations. The Company is continually 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, this 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. The Company is continuing with its planned expansion of its ATM machine sales division and generating commissions as a dealer representative and to build that business further. Basis of Presentation 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. 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. In the opinion of management, all adjustments necessary in order to make the financial position, results of operations and changes in financial position at April 30, 2007, and for all periods presented not misleading have been made. Use of 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 assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Because of the use of estimates inherent in the financial reporting process, actual results may differ significantly from those estimates. Reclassifications Certain amounts in the April 30, 2006 financial statements have been reclassified to conform to the April 30, 2007 presentation. These reclassifications had no effect on the previously reported net loss. The reclassifications were attributable to combining cost of goods sold amounts with the respective revenue to show the corrected amount of revenues as previously it was reported as two separate line items, when in actuality it was a refund due to the payor. Cash and cash Equivalents The Company maintains cash balances in a non-interest bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of April 30, 2007 and 2006 Fair Value of Financial Instruments The fair value of cash and cash equivalents and accounts payables approximates the carrying amount of these financial instruments due to their short maturity. Net Loss Per Share Calculation In February 1997, the FASB issued SFAS No. 128, "Earnings per Share." 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. Diluted earnings per shares is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Since the fully diluted loss per share for 2007 and 2006 was anti-dilutive, basic and diluted losses per share are the same. The weighted-average number of common shares outstanding for computing basic EPS for the year ended April 30, 2007 and April 30, 2006 were 19,892,969 and 18,599,640 respectively. Advertising Advertising and marketing costs are expensed when incurred. Advertising expenses for the years ended April 30, 2007 and 2006 were $390 and $2,745, respectively. Revenue Recognition Commission income from the sale of ATM machines is recognized at the time of sale. Stock Based Compensation In December 2004, SFAS No. 123 (revised 2004), "Share-Based Payment"("SFAS 123(R)") was issued. The Company applies SFAS 123R in accounting for stock options issued to employees. For stock options and warrants issued to non- employees, the Company applies SFAS No. 123R, Accounting for Stock-Based Compensation, which requires the recognition of compensation cost based upon the fair value of stock options at the grant date using the Black-Scholes option pricing model. During the fiscal year ended April 30, 2007, 2,000,000 warrants were issued to officers with a $0.10 exercise price, 5 year term, with an applied 297% volatility based on historical data, which resulted in the Black Scholes calculated value of $44,350 as expense during the year in accordance with SFAS 123R. The Company used a 2.5 year term for purposes of calculating the Black Scholes value. There were no options issued as stock based compensation to any officers, directors, or non-employees for the period ended April 30, 2007 or 2006. Recently Issued Accounting Pronouncements In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109" (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that we recognize in our financial statements the benefit of a tax position if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 become effective as of the beginning of our 2008 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. We are currently evaluating the impact that FIN 48 will have on our financial statements. In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements" (FAS 157), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The provisions of FAS 157 become effective as of the beginning of our 2009 fiscal year. We do not expect the adoption of SFAS No. 157 to have a material impact on it consolidated financial position, results of operations or cash flows. In September 2006, the FASB issued Statement No. 158, "Employer's Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)" (FAS 158). FAS 158 requires that employers recognize the funded status of their defined benefit pension and other postretirement plans on the balance sheet and recognize as a component of other comprehensive income, net of tax, the plan-related gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost. We do not feel the implementation of this will effect our financial statements. In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" (SAB 108), which addresses how to quantify the effect of financial statement errors. The provisions of SAB 108 become effective as of the end of our 2007 fiscal year. We do not expect the adoption of SAB 108 to have a significant impact on our financial statements. In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115" (FAS 159). FAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The provisions of FAS 159 become effective as of the beginning of our 2009 fiscal year. We are currently evaluating the impact that FAS 159 will have on our financial statements. 2. GOING CONCERN The Companys 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's only source of revenue is via commissions from the sale of ATM machines 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. As shown in the accompanying financial statements, the Company has incurred a net loss of $161,392 for the year ended April 30, 2007 and has reported an accumulated deficit of $3,895,019. The Company is continuing in its plans to further expand its ATM machine sales division and anticipates the ability to continue to grow this line of business. NOTE 3 - CORRECTION OF ERRORS The Company has restated its previously issued April 30, 2007 financial statements for matters related to the following previously reported item: the Company discovering that it had erroneously overstated the cash and cash equivalent account balance by $3,623. The accompanying financial statements for the fiscal year ended April 30, 2007 have been restated to reflect the corrections in accordance with SFAS No. 154, "Accounting Change and Error Correction". The following is a summary of the restatements for April 30, 2007: Increase (decrease) of previously reported cash and cash equivalents: - decrease of cash in bank (3,623) -------- Total increase in previously reported cash and cash equivalents (3,623) -------- Increase of previously reported stockholder's (deficit): - total increase in net loss due to correction of errors (3,623) -------- Total increase in previously reported stockholders' equity (3,623) -------- Effects of above referenced adjustments on net loss: Decrease of previously reported General and Administrative Expenses: (3,488) Decrease of previously reported Officers Compensation: (135) -------- Total increase in net loss $ (3,623) ======== The effect on the Company's previously issued April 30, 2007 financial statements are summarized as follows: Balance Sheet as of April 30, 2007 Previously Net Reported Change Restated ------------ --------- ------------ Assets Current assets Cash and cash equivalents $ 20,308 (3,623) $ 16,685 Accounts receivable 5,228 - 5,228 ------------ --------- ------------ Total current assets 25,536 (3,623) 21,913 ------------ --------- ------------ Total Assets $ 25,536 $ (3,623) $ 21,913 ============ ========= ============ Current liabilities Accounts Payable 33,010 - 33,010 Bank Overdraft - - - Acquisition Liability 22,000 - 22,000 ------------ --------- ------------ Total current liabilities 55,010 55,010 ------------ --------- ------------ Total liabilities 55,010 - 55,010 ------------ --------- ------------ Stockholders' deficit Preferred stock 10,000 - 10,000 Common Stock 217,194 - 217,194 Treasury Stock (52,954) - (52,954) Additional paid-in capital 3,687,682 - 3,687,682 Accumulated (deficit) (3,891,396) (3,623) (3,895,019) ------------ --------- ------------ Total stockholders' (deficit) (29,474) (3,623) (33,097) ------------ --------- ------------ Total Liabilities & Stockholders' (deficit) $ 25,536 $ (3,623) $ 21,913 ============ ========= ============ Statement of Operations for the fiscal year Ended April 30, 2007 Previously Net Reported Change Restated ------------ --------- ------------ Commissions $ 154,729 - $ 154,729 ------------ --------- ------------ Total Income 154,729 - 154,729 Operating Costs and Expenses General and administrative 188,451 3,488 191,939 Total Operating Costs and Expenses 124,042 135 124,177 ------------ --------- ------------ 312,493 3,623 316,116 Loss from Operations (157,764) (3,623) (161,387) Other Income (Expense): Interest expense (5) - (5) ------------ --------- ------------ Total other income (expense) (5) - (5) ------------ --------- ------------ Net Income (Loss) $ (157,769)$ (3,623)$ (161,392) ============ ========= ============ Earnings per Common Share: Basic and Diluted $ (0.01) - $ (0.01) ============ ========= ============ Weighted Average Common Shares Outstanding: Basic and Diluted 19,892,969 19,892,969 ============ ========= ============ Statement of Cash Flows for the fiscal year Ended April 30, 2007 As Previously As Restated Reported ------------- ----------- Statement of Cash Flows Cash flows used in operating activities $ (28,567) $ (32,190) Cash flows provided by investing activities - - Cash flows provided by financing activities 48,875 48,875 4. STOCKHOLDERS' EQUITY The authorized common stock of the Company consists of 100,000,000 shares of Common stock with a par value of $0.01 and 10,000,000 shares of Preferred stock with a par value of $0.01. During the year ended April 30, 2007, the Company issued 1,000,000 shares of Preferred stock valued at $40,000 to Scott Goldsmith. The shares are convertible into two shares of common stock. During the year ended April 30, 2007, the Company issued 1,890,000 shares of stock for cash of $26,876 (an average of approximately $0.01 per share). Additionally, during the same period, the Company issued 600,000 shares of stock for services valued at $29,500 (average price per share of $0.05). 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. 5. RELATED PARTY TRANSACTIONS The Company's President and shareholder had advanced monies to the Company. The total advances at April 30, 2007 are $0. Total compensation to Scott Goldsmith, the President of the Company, amounted to $124,177 and $98,544 for the year ended April 30, 2007, and 2006, respectively. Included in Mr. Goldsmith's compensation were the preferred shares and warrants issued to him which were valued at $44,350 for the warrants and then the preferred shares of which $3,800 was for prior services and $36,200 was to reduced a due to shareholder loan. 6. COMMITMENTS & CONTINGENCIES The Company leases office space under a non-cancelable operating lease. The lease requires minimum monthly payments of approximately $500 per month and expires in January 31, 2008. Rent expense was $6,571 and $6,216 as of April 30, 2007 and 2006. 7. INCOME TAXES At April 30, 2007 and 2006, the Company had a federal operating loss carryforward of approximately $578,400 and $494,400, respectively, which expires through 2027. Components of net deferred tax assets, including a valuation allowance, are as follows (numbers are tax effected) APRIL 30, -------------------- 2007 2006 --------- --------- Deferred tax assets: Net operating loss carryforward $ 202,400 $ 173,000 Stock-based compensation 100 26,000 Total deferred tax assets 228,400 173,100 Less: Valuation Allowance (228,400) (173,100) --------- --------- Net Deferred Tax Assets $ -- $ -- ========= ========= The valuation allowance for deferred tax assets as of April 30, 2007 and 2006 was $228,400 and $173,100, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of April 30, 2007 and 2006, and recorded a full valuation allowance. Reconciliation between the statutory rate and the effective tax rate is as follows: APRIL 30, APRIL 30, -------- -------- 2007 2006 -------- -------- Federal statutory tax rate (35.0)% (35.0)% Change in valuation allowance 35.0% 35.0% -------- -------- Effective tax rate 0.0% 0.0% ======== ======== 8. WARRANTS AND OPTIONS The Company has adopted FASB No. 123R and accounts for stock issued for services , stock options, and warrants for compensation under the fair value method. As discussed in Note 1, 2,000,000 warrants were issued to an officer with a $0.10 exercise price, a 5 year term, with an applied 297% volatility based on historical data, which resulted in the Black Scholes calculated value of $44,350 as expense during the year in accordance with SFAS 123R. The Company used a 2.5 year term for purposes of calculating the Black Scholes value. There were no other options granted or exercised by the directors and executive officers outstanding as of April 30, 2007. The following is a schedule of the activity relating to the Company's warrants. Year Ended Year Ended April 30, 2007 April 30, 2006 ------------------ ----------------- Weighted Avg. Weighted Avg. Shares Exercise Shares Exercise Price Price --------- -------- -------- --------- Warrants outstanding at beginning of year - $ - - $ - Granted: Warrants 2,000,000 $ 0.10 - $ - Exercised - $ - - $ - Expired: Warrants (-) $ - - $ - --------- -------- -------- --------- Warrants outstanding and exercisable at end of period 4/30/07 2,000,000 $ 0.10 - $ - ========= ======== ======== ========= Weighted average fair value of warrants granted during the year $44,350 The following table summarizes information about the Company's stock options and warrants outstanding at April 30, 2007, all of which are exercisable. Weighted Average Range of Number Remaining Weighted Average Exercise Prices Outstanding Contractual Life Exercise Price -------- ------- ----------- ---------------- ------------------- $ 0.10 0.10 2,000,000 5 years $ 0.10 9. ACQUISITION LIABILTIY We have received $22,000 related to a potential merger candidate and have booked this as an acquisition liability on our balance sheet. The final terms and requisite due diligence have not yet been completed and should the merger not go through, it will convert to a short term note payable. 10. SUBSEQUENT EVENTS The Company sold 960,000 shares of common stock for approximately $15,500 during the months of June and August. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. On June 10, 2007 the audit committee (the "Audit Committee") of the Directors of Prevention Insurance.com (the "Company") approved and accepted the resignation letter of Beadle, McBride, Evans and Reeves, LLP ("BME&R") as the Company's independent registered public accounting firm, dated April 30, 2007. The audit reports of BME&R on the Company's consolidated financial statements as of and for the years ended April 30, 2006 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended April 30, 2006 and 2005 there were (1) no disagreements with BME&R on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, witch disagreements, if not resolved to the satisfaction of BME&R, would have caused BME&R to make reference to the subject matter of the disagreement in connection with its reports on the Company's financial statements for such periods, and (2) no reportable events as defined in item 304(a)(1)(v) of Regulation S-K. On July 18, 2007 the audit committee of the Company appointed Lynda R. Keeton CPA, LLC as the Company's new independent registered public accounting firm beginning with the fiscal years and through July 18, 2007 the Company did not consult with Lynda R. Keeton CPA, LLC regarding either (1) The application of accounting principles to any specific completed or proposed transaction, (2) The type of audit opinion that might be rendered on the Company's financial statements or (3) any matters or reportable events as set forth in Item 304(a)(1)(iv) and (v) of Regulation S-K. ITEM 8A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls We evaluated the effectiveness of our disclosure controls and procedures as of April 30, 2007, 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 inffective 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 were inffective 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, 2007, 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. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the initiation, authorization, recording, processing or reporting of reliable financial data. Because of the significant deficiencies described below, management concluded that our internal control over financial reporting was not effective as of April 30, 2007. INEFFECTIVE CONTROLS RELATED TO THE FINANCIAL CLOSING PROCESS The Company's design and operation of controls with respect to the process of preparing and reviewing the annual and interim financial statements are ineffective. Deficiencies identified include the inadequate segregations of duties, lack of controls over procedures used to enter transactions into the general ledger, and lack of appropriate review of the reconciliations and supporting workpapers used in the financial close and reporting process. While these deficiencies did not result in a material misstatement of the financial statements, due to the potential pervasive effect on the financial statement account balances and disclosures and the importance of the annual and interim financial closing and reporting process, in the aggregate, management has concluded that there is more than a remote likelihood that a material misstatement in our annual or interim financial statements could occur and would not be prevented or detected. Management intends on discussing this issue with its outside consultants to develop controls which are better applicable to its industry and size. 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 Richard Peterson, 56 Director 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 further develop 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 2007 $ 124,177 President/CEO 2006 $ 98,544 2005 $ 111,845 2004 $ 68,305 2003 $ 61,382 2002 $ 6,340 We have formulated no plans as to the amounts of future cash compensation. Any additional personnel required would have salaries negotiated. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. Security Ownership of Management and Certain Beneficial Owners The following table sets forth information as of the date of this Form 10KSB certain information with respect to the beneficial ownership of the Common Stock of the Company concerning stock ownership by (i) each director, (ii) each executive officer, (iii) the directors and officers of the Company as a group, (iv) and each person known by the Company to own beneficially more than five (5%) of the Common Stock. Unless otherwise indicated, the owners have sole voting and investment power with respect to their respective shares. Beneficial ownership is determined under the rules of the Securities and Exchange Commission. In general, these rules attribute beneficial ownership of securities to persons who possess sole or shared voting power and/or investment power with respect to those securities and includes, among other things, securities that an individual has the right to acquire within 60 days. Unless otherwise indicated, the stockholders identified in the following table have sole voting and investment power with respect to all shares shown as beneficially owned by them. Name of Beneficial Percent Title of Class Beneficial Owner Ownership Class (1) -------------- -------------------- ---------- ---------- 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) Based upon 21,719,362 shares issued and outstanding. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. There have been no material transactions, series of similar transactions or currently proposed transactions to which the Company or any officer, director, their immediate families or other beneficial owner is a party or has a material interest in which the amount exceeds $50,000. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS. The following documents are included as exhibits to this report: EXHIBIT 23.CONSENT OF EXPERTS AND COUNSEL 23.1 Consent of Beadle, McBride, Evans and Reeves, LLP Certified Public Accounts. 23.2 Consent of Lynda R. Keeton, CPAs. EXHIBIT 27. FINANCIAL DATA SCHEDULE 27.1 Financial Data Schedule EXHIBIT 31. CERTIFICATIONS REQUIRED BY RULE 13A-14(A) OR RULE 15D-14(A) 31.1 Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.ss.1850 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. EXHIBIT 32. CERTIFICATIONS REQUIRED BY RULE 13A-14(B) OR RULE 15D-14(B) AND SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350. 32.1 Certification of Chief Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.ss.1850 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K Prevention Insurance report on Form 8-K dated June 15, 2007 On June 15, 2007, Registrant filed a Current Report on Form 8-K notifying shareholders that on June 10, 2007 the audit committee (the "Audit Committee") of the Directors of Prevention Insurance.com (the "Company") approved and accepted the resignation letter of Beadle, McBride, Evans and Reeves, LLP ("BME&R") as the Company's independent registered public accounting firm, dated April 30, 2007. Prevention Insurance report on Form 8-K dated July 25, 2007 On June 25, 2007, Registrant filed a Current Report on Form 8-K notifying shareholders that On July 18, 2007 the audit committee of the Company appointed Lynda R. Keeton CPA, LLC as the Company's new independent registered public accounting firm beginning with the fiscal years and through July 18, 2007 the Company did not consult with Lynda R. Keeton CPA, LLC regarding either (1) The application of accounting principles to any specific completed or proposed transaction, (2) The type of audit opinion that might be rendered on the Company's financial statements or (3) any matters or reportable events as set forth in Item 304(a)(1)(iv) and (v) of Regulation S-K. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees For the fiscal years ended April 30, 2007, the Company's principal accountant billed $6,928, for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-QSB filings. For the fiscal years ended April 30, 2006, the Company's prior accountant billed $8,875, for the audit of the Company's annual financial statements and review of financial statements included in the Company's Form 10-QSB filings. Audit-Related Fees For the fiscal years ended April 30, 2007 and 2006, the Company's principal accountant and prior accountant billed $850 and $0, respectively, for assurance and6related services that were reasonably related to the performance of the audit or review of the Company's financial statements outside of those fees disclosed above under "Audit Fees". Tax Fees For the fiscal years ended April 30, 2007 and 2006, the Company's principal accountant and prior accountant billed $1,997 and $0, respectively, for tax compliance, tax advice, and tax planning services. All Other Fees For the fiscal years ended April 30, 2007 and 2006, the Company's principal accountant and prior accountant billed $0 and $0, respectively, for products and services other than those described above. Pre-approval Policies and Procedures Prior to engaging the Company's accountants to perform a particular service, the Company's board of directors obtains an estimate for the service to be performed. The board of directors, in accordance with procedures for the Company, approved all of the services described above prior to the services being performed. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: September 14, 2007 Prevention Insurance.com By: /s/ Scott Goldsmith ------------------------ Scott Goldsmith, President 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: September 14, 2007 Prevention Insurance.com By: /s/ Scott Goldsmith ------------------------ Scott Goldsmith, President