SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 - For the quarterly period ended June 30, 2008
[
] TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition
period from __________________ to __________________
Commission File Number 0-30595
PACIFIC LAND & COFFEE CORPORATION
(Exact
Name of small business issuer as specified in its charter)
Delaware
33-0619256
(State or other Jurisdiction
of
I.R.S. Employer Identification No.)
Incorporation or Organization
500 Alakawa Street, Suite
220C
, Honolulu,
Hawaii
96817
(Address of Principal
Executive
Offices)
(Zip Code)
(808)
371-4266
(Issuer's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) has filed all reports required
to be filed by Section 13, or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (of for such shorter period that the Registrant
was required to file such reports) and (ii) has been subject to such filing
requirements for the past 90 days. Yes
X
No
Indicate
by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes
[ ]
No [ X ]
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
|
|
|
|
|
|
|
|
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
þ
|
|
(Do not check if a
smaller reporting company)
|
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Common
Stock, $.001 par value
13,610,659
Title of
Class Number
of Shares outstanding
at August 13, 2008
Transitional
Small Business Format Yes
No
X
PACIFIC
LAND
AND
COFFEE CORPORATION.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March
31,
June 30,
2008
2008
Unaudited
Audited
Current Assets
Cash in
bank
$
13,531
$
18,542
Accounts receivable, net of allowance
for doubtful accounts of $3,879 and
$2,084
15,314
19,591
Other
Receivable
29,600
29,600
Income Tax
receivable
44,880
44,880
Total Current
Assets
103,325
112,613
Fixed
Assets
Equipment
189,157
191,689
Leasehold
Improvements
9,316
9,316
Less: Accumulated
Depreciation
(116,050)
(110,910)
Total Fixed
Assets
82,423
90,095
Other
Assets
Rent
Deposit
12,908
12,908
Patents, net of
amortization
of $ 493,122 and $
518,143
606,104
625,511
Research/License
Agreement,
Net of amortization of $67,453
and
$64,274
102,547
105,726
Total Other
Assets
721,559
744,145
TOTAL
ASSETS
$
907,307
$ 946,853
The accompanying notes are an
integral part of the financial statements.
2
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts
Payable
360,780
$ 299,868
Credit
Line
24,753
19,953
Payroll & Excise
Taxes
Payable
12,159
3,371
Accrued
Interest
63,258
63,258
Note Payable – related
Party
145,980
145,980
Current Portion of Long
Term Debt –
Note
12,840
13,177
Shareholder
Advances
20,000
0
Total Current
Liabilities
639,770
545,607
Long Term Liabilities
Note Payable – net of
current portion - Note
19,230
23,190
Total Long Term
Liabilities
19,230
23,190
TOTAL
LIABILITIES
659,000
568,797
Non-Controlling
Interest
81,132
103,304
Stockholders’ Equity (Deficit)
Preferred Stock - 1,000,000 shares
authorized;
Par value of $.001 per share; 900,000
shares
issued and
outstanding
900
900
Commo Stock - 50,000,000 shares authorized;
Par value of $.001 per share;
12,514,455
shares issued and
outstanding
12,514
12,514
Capital in excess of par
value
659,226
659,226
Deficit accumulated during the development
stage
(505,465)
(397,888)
TOTAL STOCKHOLDERS'
EQUITY
(DEFICIT)
167,175
274,752
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
(DEFICIT)
$
907,307
$ 946,853
The accompanying notes are an
integral part of the financial statements.
3
PACIFIC
LAND
AND COFFEE CORPORATION.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF
OPERATIONS
For the Periods Ended June 30,
2008 and 2007
And for the Period from Inception
(February 14, 2003) through June 30, 2008
(Unaudited)
CUMULATIVE
FROM INCEPTION
FOR THE
THREE
FOR THE THREE (FEBRUARY 14, 2003
MONTHS ENDED MONTHS
ENDED
TO
JUNE 30,
2008
JUNE 30,
2007
JUNE 30, 2008
Revenues
Sales
$
78,006
$
55,681
$ 558,631
Total
Revenues
78,006
55,681
558,631
Cost of
Sales
44,562
25,982
361,767
Gross
Profit
33,444
26,699
196,864
General and Administrative
Expenses
162,362
52,197
799,643
Net Loss from
Operations
(128,918)
(22,498)
(602,779)
Other Income (Expense):
Interest
Expense
(831)
(2,841
)
(25,514)
Total
Other Income
(Expense)
(831)
(2,841)
(25,514)
Net Loss before
Non-controlling
interest
(129,749)
(25,339)
(628,293)
Non-Controlling
Interest
22,172
--
77,948
Loss before Income
Tax
(107,577)
(25,339)
(550,345)
Provision for Income Tax
(Benefit)
--
--
(44,880)
Net
Loss
$
(107,577)
$
(25,339)
$
(505,465)
Net Loss per
Share
$
(0.01)
$
(0.01)
Weighted Average Shares
Outstanding
12,514,455
3,333,332
See accompanying Notes to Financial
Statements.
4
PACIFIC
LAND
AND
COFFEE CORPORATION.
(A Development Stage
Company)
CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the Period Ended June 30, 2008
and 2007
And for the Period from Inception
(February 14, 2003) Through June 30, 2008
(Unaudited)
CUMULATIVE
FROM INCEPTION
FOR THE
THREE
FOR THE THREE (FEBRUARY 14, 2003
MONTHS ENDED MONTHS
ENDED
TO
JUNE 30,
2008
JUNE 30, 2007
JUNE 30, 2008
Cash
Flows from Operating Activities
Net
Loss
$
(107,577)
$
(25,339)
$
(505,465)
Adjustments to reconcile net loss to net cash
provided
by operating activities
Non-controlling interest income
adjustment
(22,172)
--
(77,948)
Depreciation &
amortization
30,258
3,127
78,695
Bad
Debt
1,795
308
18,765
Stock Issed for payment of
fees
--
--
128,783
Contributed Capital – non-cash fair
market
value of start-up and
organizational
services and
costs
--
--
1,000
(Increase) Decrease in
accounts
Receivable
2,482
(3,452)
(2,439)
(Increase) Decrease in loans and
receivables
--
--
1,039
(Increase) Decrease in income
tax
Receivables
--
--
(44,880)
(Increase) Decrease in rent
deposit
--
--
(2,252)
Increase (Decrease) in bank
overdraft
--
6,303
--
Increase (Decrease) in accounts
payable
60,912
7,490
(131,819)
Increase (Decrease) in payroll and
excise
Tax
payable
8,788
2,186
11,881
Increase (Decrease) in accrued
interest
--
471
4,648
Net Cash Used by Operating
Activities
$
(25,514)
$
(8,906)
$
(519,992)
Cash Flow from Investing Activities
Net Cash Used by Investing
Activities
--
--
--
Cash Flow from Financing Activities
Net Proceeds from Credit
line
4,800
42
285
Proceeds from sale of common
stock/
contributed
cash
--
--
471,480
Proceeds from notes payable -
related
party
--
9,000
49,700
Proceeds from advances from officer
(net)
20,000
275
54,540
Repayments of long term note
payable
(4,297)
(1,812)
(18,744)
Repayments of note payable – related
party
--
--
(328,278)
Net Cash Provided (Used) by
Financing
Activities
20,503
7,505
228,983
Net Increase (Decrease) in
Cash
$
(5,011)
$
(1,401)
$
(291,009)
Beginning Cash
Balance
$
18,542
$
1,401
$
--
Cash acquired in merger with Coscina
Brothers Coffee
Co.
--
--
1,418
Cash acquired in merger with Integrated
Coffee
Technologies
--
--
303,122
Ending Cash
Balance
$
13,531
$
--
$
13,531
5
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the three months
for
interest
$
114,822
$
--
$
--
Cash paid during the three months for
income
taxes
--
$
--
$
--
Supplemental Disclosure of non-Cash Investing
And Financing Activities:
Conversion of debt to equity, including
related party debt
forgiveness
$
--
$
--
$
117,763
Business Acquisitions
Fair value of assets
acquired
$
--
$
--
$ 1,275,343
Issuance of
debt/assumption of
liabilities
--
--
(1,710,013)
Common Stock issued at
Acquisition
--
--
(76,441)
Non-controlling
Interest
--
--
(28,889)
See accompanying Notes to Financial
Statements.
6
PACIFIC
LAND
AND COFFEE
CORPORATION
(A Development
Stage Company)
NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 30,
2008
Note
1
Interim Financial Statements
The
accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all
adjustments (which include normal recurring adjustments) necessary to
present fairly the financial position as of June 30, 2008, and the results
of operations and cash flows for the three months ended June 30,
2008 and for the period from inception thru June 30, 2008.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company’s Annual Report on Form 10-KSB and the
audited financial statements for the year ended March 31, 2008 included
therein. The results of operations for the three months ended June 30,
2008, are not necessarily indicative of the results of operations to be expected
for the full fiscal year.
Note
2
Going Concern
The Company has limited operating capital with limited revenue from
operations. Realization of a major portion of the assets is dependent upon
the Company’s ability to meet its future financing requirements, and the success
of future operations. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. The financial statements
do not include any adjustment that might result from the outcome of this
uncertainty.
Note
3
Property and Equipment
Property and equipment is carried at cost and
summarized as follows:
Accumulated
Cost
Depreciation
Net
Equipment
$ 189,157 $
(106,734)
$ 82,423
Leasehold
Improvements
9,316
(9,316)
-0-
Total
$ 198,473 $
(116,050)
$ 82,423
For the consolidated statements presented current depreciation expense is $
7,672. Of the $189,157 property and equipment account $ 60,557 has
been capitalized under a capital lease discussed below. As of June 30,
2008 the total accumulated depreciation associated with the capital lease was $
32,551.
Note 4
Intangible Assets
Patents
and licenses are carried at cost and summarized as follows:
Accumulated
Cost
Amortization
Net
Patents
$
1,099,226
$
493,122
$ 606,104
Licenses
170,000
67,453
102,547
Total
$
1,269,226
$
560,575
$ 708,651
Note
5
Long Term Debt
The
Company has a capital lease due to a finance company with interest at 10% due in
monthly installments of $1,289, through October, 2010. This note is
secured by the Company’s equipment.
Maturities of long- term debt are as follows:
Year Ending
June
30,
2009
$ 12,840
2010
14,181
2011
5,049
-----------
Total $
32,070
======
Note
6
Related Party Transactions
One officer of the Company has advanced personal funds to the Company to
assist
in
meeting operating cash needs. The Company has recorded a liability of
$20,000 to a shareholder as of June 30, 2008. The unsecured loan bears no
interest and is due on demand.
7
Note 7
Subsequent Event
Subsequent to
period end, a shareholder loaned the Company $90,000, in addition to the $20,000
disclosed in note 6, on an unsecured note, bearing no interest, and due on
demand.
Also subsequent to period end, 1,096,204 shares of the Company’s subsidiary
Integrated Coffee Technologies were converted into shares of Pacific Land &
Coffee.
Note
8
Recent Accounting
Pronouncements
In
December 2007, the FASB issued Statement of Financial Accounting Standards
No. 141 (revised 2007), “Business Combinations” (“FAS 141R”) and
Statement of Financial Accounting Standards No. 160, “Noncontrolling
Interests in Consolidated Financial Statements, an Amendment of ARB No. 51”
(“FAS 160”). These new standards are the U.S. GAAP outcome of a joint
project with the International Accounting Standards Board (“IASB”).
FAS 141R applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 and will significantly
change the accounting for business combinations in a number of areas, including
the treatment of contingent consideration, acquisition costs, intellectual
property, research and development, and restructuring costs. FAS 160
establishes reporting requirements that clearly identify and distinguish between
the interests of the parent and the interests of the non-controlling owners. The
Company is currently evaluating the impact of adopting FAS 141R and
FAS 160 on its Consolidated Financial Statements which are effective for
the Company at the beginning of its fiscal year 2010.
In
March 2008, the FASB issued Statement of Financial Accounting Standards
No. 161, “Disclosures about Derivative Instruments and Hedging Activities,
an amendment of FASB Statement No. 133” (“FAS 161”), which requires
enhanced disclosures about a company’s derivative and hedging activities. The
Company currently is evaluating the impact of the adoption of the enhanced
disclosures required by FAS 161 which is effective for the Company at the
beginning of its fiscal year 2010.
In
May 2008, the FASB issued Statement of Financial Accounting Standards
No. 162, “The Hierarchy of Generally Accepted Accounting Principles
(“FAS 162”). The new standard is intended to improve financial reporting by
identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with generally accepted accounting principles (“GAAP”) for
nongovernmental entities in the United States. FAS 162 is effective
60 days following SEC approval of the Public Company Accounting Oversight
Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles.” The Company is
currently evaluating the impact, if any, of adopting FAS 162, on its
Consolidated Financial Statement
In
May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts – an Interpretation of FASB Statement No. 60 (“SFAS
163”). SFAS 163 clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement of premium
revenue and claim liabilities. This Statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those fiscal years. The Company does not expect that the
adoption of SFAS 163 will have a material impact on its financial
statements.
8
Item
2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
We did not receive revenues from operations in our specialty coffee segment until the quarter ended September 30, 2003. We sell roasted blends to various customers and we broker green bean orders as well. With respect to coffee brokerage orders, we do not take ownership of the green beans, but only receive a commission on the sale. This contrasts with the sales of roasted blend, in which we purchase the materials and resell to the purchaser.
Management’s experience in the coffee industry is that as typical for coffee brokerage and small specialty coffee sales, we do not have long term sales contracts. We do not have any written contracts for the sale of our product. We produce and ship as purchase orders are received. We must wait for future purchase orders to make sales in the future. Because coffee prices are variable and demand can also be variable, we believe that selling under long term contracts would not be practicable in our industry. Our invoices are due net 30 days, but currently we are receiving payment immediately on shipment. The sales in the quarter ended June 30, 2008 were $78,006, compared to $55,681 for the three months ended March 31, 2007. The gross margin as a percentage of sales decreased from 53% to 43% due to a cost increases from suppliers not passed on. Our general and administrative expenses primarily consisted of legal and professional fees related to our status as a public company. These expenses increased in 2008 primarily due to higher costs associated with our public company status.
Our
tropical plant segment has not yet realized significant revenues. Our
nematode resistant variety is ready for sales but the genetically modified
coffee plants will not be ready for sale during the next 12 months. We
anticipate the need for about $2 million in funding to complete development of
the tropical plant varieties and to increase marketing of our coffee blends. We
received a $20,000 advance from an officer in the quarter and $90,000 subsequent
to the end of the period. Our current liabilities exceeded our current assets as
of June 30, 2008 by $536,445. The Company faces a serious cash shortage,
but we have been able to pay the most critical payables as required from the
officer/director and shareholder advances. Management believes that it can
raise the required funds from current shareholders and from outside investors so
that the Company can continue in operations.
We are seeking $2 million in funding for 12 months of our business plan as
follows:
Marketing
$ 200,000
General and Administration $
400,000
Research and Development
$1,400,000
We
do not have any agreements or understandings with respect to sources of
capital. We have not identified any potential sources. Investors
cannot expect that we will be able to raise any funds whatsoever. Even if we are
able to find one or more sources of capital, its likely that we will not be able
to raise the entire amount required initially, in which case our development
time will be extended until such full amount can be obtained. Even if we
are successful in obtaining the required funding, we probably will need to raise
additional funds at the end of 12 months.
Information
included in this report includes forward looking statements, which can be
identified by the use of forward-looking terminology such as may, will, expect,
anticipate, believe, estimate, or continue, or the negative thereof or other
variations thereon or comparable terminology. The statements in "Risk Factors"
and other statements and disclaimers in this report constitute cautionary
statements identifying important factors, including risks and uncertainties,
relating to the forward-looking statements that could cause actual results to
differ materially from those reflected in the forward-looking statements.
Since
we have not yet generated significant and consistent revenues, we are a
development stage company as that term is defined in paragraphs 8 and 9 of SFAS
No. 7. Our activities to date have been limited to seeking capital;
seeking supply contracts and development of a business plan. Our auditors
have included an explanatory paragraph in their report on our financial
statements, relating to the uncertainty of our business as a going concern, due
to our lack of operating history or current revenues, its nature as a start up
business, management's limited experience and limited funds. We do not
believe that conventional financing, such as bank loans, is available to us due
to these factors. Management believes that it will be able to raise the
required funds for operations from one or more future offerings, in order to
effect our business plan. No terms have been discussed, and we
cannot predict the price or terms of any offering nor the amount of dilution
existing shareholders may experience as a result of such offering.
9
Forward looking information
Our future operating results are subject to many factors, including:
œ our ability to
complete development of our tropical plant varieties;
œ the impact of
rapid and persistent fluctuations in the price of coffee beans;
œ
general economic conditions and conditions which affect the market for coffee
and coffee producers;
œ our success in
implementing our business strategy or introducing new products;
œ our ability to
attract and retain customers;
œ the effects of
competition from other coffee manufacturers and other beverage alternatives;
œ changes in tastes
and preferences for, or the consumption of, coffee;
œ our ability to
obtain additional financing; and
œ other risks which
we identify in future filings with the SEC.
In
some cases, you can identify forward-looking statements by terminology such as
"may," "should," "could," "predict," "potential," "continue," "expect,"
"anticipate," "future," "intend," "plan," "believe," "estimate" and similar
expressions (or the negative of such expressions). Any or all of our forward
looking statements in this annual report and in any other public statements we
make may turn out to be wrong. They can be affected by inaccurate assumptions we
might make or by known or unknown risks and uncertainties. Consequently, no
forward looking statement can be guaranteed. In addition, we undertake no
responsibility to update any forward-looking statement to reflect events or
circumstances which occur after the date of this report.
Critical
Accounting Policies
Our
discussion and analysis of results of operations and financial condition are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We evaluate our estimates on an ongoing basis, including those
related to provisions for uncollectible accounts receivable, inventories,
valuation of intangible assets and contingencies and litigation. We base our
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.
The
accounting policies that we follow are set forth in Note 1 to our financial
statements. These accounting policies conform to accounting principles generally
accepted in the United States, and have been consistently applied in the
preparation of the financial statements.
Off-Balance
Sheet Arrangements
We
have no off balance sheet arrangements.
Recently
Enacted Accounting Pronouncements
10
In
December 2007, the FASB issued Statement of Financial Accounting Standards
No. 141 (revised 2007), “Business Combinations” (“FAS 141R”) and
Statement of Financial Accounting Standards No. 160, “Noncontrolling
Interests in Consolidated Financial Statements, an Amendment of ARB No. 51”
(“FAS 160”). These new standards are the U.S. GAAP outcome of a joint
project with the International Accounting Standards Board (“IASB”).
FAS 141R applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 and will significantly
change the accounting for business combinations in a number of areas, including
the treatment of contingent consideration, acquisition costs, intellectual
property, research and development, and restructuring costs. FAS 160
establishes reporting requirements that clearly identify and distinguish between
the interests of the parent and the interests of the non-controlling owners. The
Company is currently evaluating the impact of adopting FAS 141R and
FAS 160 on its Consolidated Financial Statements which are effective for
the Company at the beginning of its fiscal year 2010.
In
March 2008, the FASB issued Statement of Financial Accounting Standards
No. 161, “Disclosures about Derivative Instruments and Hedging Activities,
an amendment of FASB Statement No. 133” (“FAS 161”), which requires
enhanced disclosures about a company’s derivative and hedging activities. The
Company currently is evaluating the impact of the adoption of the enhanced
disclosures required by FAS 161 which is effective for the Company at the
beginning of its fiscal year 2010.
In
May 2008, the FASB issued Statement of Financial Accounting Standards
No. 162, “The Hierarchy of Generally Accepted Accounting Principles
(“FAS 162”). The new standard is intended to improve financial reporting by
identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with generally accepted accounting principles (“GAAP”) for
nongovernmental entities in the United States. FAS 162 is effective
60 days following SEC approval of the Public Company Accounting Oversight
Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly
in Conformity with Generally Accepted Accounting Principles.” The Company is
currently evaluating the impact, if any, of adopting FAS 162, on its
Consolidated Financial Statements
In
May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts – an Interpretation of FASB Statement No. 60 (“SFAS
163”). SFAS 163 clarifies how Statement 60 applies to financial guarantee
insurance contracts, including the recognition and measurement of premium
revenue and claim liabilities. This Statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those fiscal years. The Company does not expect that the
adoption of SFAS 163 will have a material impact on its financial
statements.
Effect
of Inflation and Foreign Currency Exchange
The
Company has not experienced any effect of inflation in the price of its
products. Nor has it experienced unfavorable profit reductions due to currency
exchange fluctuations or inflation with its foreign customers. All sales
transactions to date have been denominated in U.S. Dollars.
Accounts
Receivable and Allowance for Doubtful Accounts
Trade
and other accounts receivable are reported at face value less any provisions for
uncollectible accounts considered necessary. The Company estimates doubtful
accounts on an item-to-item basis and includes over-aged accounts for any trade
receivable as part of allowance for doubtful accounts, which are generally
accounts that are ninety-days or more overdue. When accounts are deemed
uncollectible, the account receivable is charged off and the allowance account
is reduced accordingly.
Revenue
Recognition
The
Company recognizes revenues in accordance with the Securities and Exchange
Commission, Staff Accounting Bulletin (SAB) number 104,
Revenue
Recognition
. SAB 104 clarifies application of U.S. generally accepted
accounting principles to revenue transactions.
Revenue
on coffee and accessory sales is recognized as products are delivered to the
customer or retailer. That is, the arrangements of the sale are
documented, the product is delivered to the customer or retailer, the pricing
becomes final, and collectability is reasonably assured. The Company may
also recognize revenue from brokered coffee sales. This revenue is
recognized when the transaction is completed based on the contract terms.
Brokered coffee sales shall be recorded as the net commission recognizable to
the Company.
11
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
As a "smaller reporting company" as defined by Item
10 of Regulation S-K, the Company is not required to provide information
required by this Item.
Item
4T
.
Controls and Procedures. Disclosure Controls
and Procedures Evaluation of disclosure controls and procedures.
The
Company's principal executive officer and its principal financial officer, based
on their evaluation of the Company's disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14(c) and 15d -14 (c) as of June 30, 2008. ,
Based on this evaluation, our principal executive officer and principal
financial officer concluded as of the Evaluation Date that our disclosure
controls and procedures were effective such that the information relating to the
Company, including our consolidated subsidiaries, required to be disclosed in
our SEC reports (i) is recorded, processed, summarized and reported within the
time periods specified in SEC rules and forms and (ii) is accumulated and
communicated to management, including our principal executive officer/principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure. Our management, including our chief executive officer and chief
financial officer, does not expect that our disclosure controls and procedures
or our internal controls will prevent all error and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints and the benefits of controls must be considered relative to
their costs. Due to the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been
detected.
Changes
in internal controls
. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
the Company's internal controls subsequent to the date of their
evaluation.
PART II. OTHER INFORMATION
Item
1.
LEGAL PROCEEDINGS
- None
Item
2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS - None
Item
3.
DEFAULTS UPON SENIOR SECURITIES
- None
Item
4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- None
Item
5.
OTHER INFORMATION
- None
Item
6.
EXHIBITS
Exhibits
31.
Certifications, John L. Hales and Tyrus C. Young, CEO and CFO
respectively.
32.
Certification pursuant to 18 U.S.C. Section 1350 of John L. Hales and Tyrus C.
Young
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PACIFIC LAND AND
COFFEE CORPORATION
Date:
August 13,
2008
By:
/s/ Tyrus C.
Young
Tyrus C. Young
Chief Financial Officer
(chief financial officer
and accounting officer and
duly authorized officer)