SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 10-K
[x]
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended March 31, 2009
[ ]
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 AND COFFEE CORPORATION
(Exact name of small business issuer in its charter)
Delaware
33-0619256
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
500 Alakawa St. #220C
Honolulu, Hawaii
96817
(Address of principal executive offices)
(Zip Code)
Registrant's
telephone number, including area code:
(808)
847-3120
Securities
registered pursuant to Section 12(b) of the Act:
None_______
Securities
registered pursuant to Section 12(g) of the Act:
Common Stock, par
value $.001
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes _ No
X
Indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act. Yes _ No
X
Indicate by check mark whether the registrant (1) 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 (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
YES
X
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 registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [ 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.
Large
accelerated filer
___
Accelerated
filer ____
Non-accelerated filer__
(
Do not check if a smaller reporting company
) Smaller reporting company
X
State issuer's revenues for its most recent fiscal
year: $318,441
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 last sold, or the average bid and asked
price of such common equity, as of the last business day of the registrants
most recently completed second fiscal quarter: $3,707,610 based on a
closing sale price of $2.00 on that date.
The number of shares outstanding of the issuer's
classes of Common Stock as of March 31, 2009:
Common Stock, $.001 Par Value 12,744,888 shares
Preferred
Stock $.001 Par Value 900,000
DOCUMENTS INCORPORATED BY REFERENCE: NONE
0
PART I
Item 1.
BUSINESS
When used in this Form 10-K, the words expects, anticipates,
estimates and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties, including
those set forth below under Risks and Uncertainties, that could cause actual
results to differ materially from those projected. These forward-looking
statements speak only as of the date hereof. We expressly disclaim any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in the
Companys expectations with regard thereto or any change in events, conditions
or circumstances on which any statement is based. This discussion should be read
together with the financial statements and other financial information included
in this Form 10-K.
Background
On May 20, 2003, Pacific Land and Coffee Corporation, formerly
known as Back Channel Investments, Inc., a publicly reporting Delaware
corporation formed in April 1994 solely to seek for and make an acquisition,
entered into an acquisition agreement whereby it acquired all of the common
stock of Pacific Land and Coffee Corporation, a Hawaii corporation formed on
February 14, 2003. There were two officers, directors and shareholders of
the Hawaii Corporation. The acquisition was effected as a tax free share
exchange, with the two shareholders of Pacific Land and Coffee Corporation
(Hawaii) receiving 7,000,000 new shares of common stock and the existing
shareholders of the Delaware parent retaining all of their 3,000,000 shares
(after giving effect to a 3-for-1 forward stock split) of common stock, which
were originally issued in April 1994 for total consideration of $1,015 ($.0003
per share). The stockholders of Pacific Land and Coffee Corporation
(Hawaii) believed that the acquisition would enable their company to benefit
from being part of a reporting company, that the combined entity would likely be
able to become publicly trading, and that it would be better able to attract
debt or equity financing for its business. No promoter or any other person was
paid or compensated in connection with the acquisition. Jehu Hand, the
founder and former President of Back Channel is currently Pacific Lands
counsel. There was no particular value assigned to the shares of either
company since neither had any appreciable assets or history of operations.
The Delaware Corporation subsequently changed its name from Back Channel
Investments, Inc. to Pacific Land and Coffee Corporation. Unless we state
otherwise, all references to Pacific Land and Coffee refer to the combined
entity.
On November 6, 2006, Alfred Coscina, a director, officer and
shareholder, contributed 100% of his interest in Coscina Brothers Coffee, LLC to
the Company. Mr. Coscina did not receive any item of value in return for
the capital contribution. Coscina Brothers Coffee, LLC was the Companys
principal supplier and is in the same principal business as the Company. The
results of operations of the Company include the operations of Coscina Brothers
Coffee LLC from November 6, 2007.
On December 18, 2007, we acquired 70.3% of the outstanding common
stock of Integrated Coffee Technologies, Inc., a Delaware corporation herein as
(Integrated Coffee Technologies). The acquisition was effected pursuant to an
Agreement and Plan of Reorganization dated December 18, 2007. In connection with
the acquisition, the Registrant issued 7,644,149 newly authorized shares of
common stock, and reserved 4,355,850 additional shares for the acquisition of
the remaining Integrated Coffee Technologies shares. Since December 18, 2007
through March 31, 2008, an additional 892,904 shares were issued to exchanging
Integrated Coffee Technologies shareholders, bringing our ownership of
Integrated Coffee Technologies up to 75.54%. The operations of Integrated Coffee
Technologies have been suspended due to lack of capital to develop this business
and we have written off the technology associated with this business.
The executive offices of the Company are located at 500 Alakawa
St., #220C, Honolulu, Hawaii 96817. Its telephone number is (808)
847-3120.
Our
Operations
Pacific Land and Coffee Corporation's products can be divided into
these categories:
°
Branded Coffee;
°
Private Label Coffee;
°
Wholesale Green Coffee;
1
°
Coffee dyed wearing apparel; Compact commercial espresso machines.
Hot and cold coffee beverages, dried vanilla beans for coffee flavoring
extracts, and other coffee products.
We strive to conduct wholesale coffee operations in accordance
with strict freshness and quality standards. Our primary business focus is
roasting, blending, packaging and distributing coffee for sale under private
labels for companies throughout the world. We also sell unprocessed green
coffee to specialty gourmet roasters, and to distribute the espresso machines
and other coffee related products to cafes and specialty retail stores.
Industry
Overview
Almost 79% of adult-aged Americans drink some type of coffee
according to the Specialty Coffee Association of America. The United States
coffee market consists of three distinct product categories:
°
commercial ground roast, mass-merchandised coffee; and
°
specialty coffees, which include gourmet coffees (premium grade
arabica coffees sold in whole bean and ground form) and premium coffees (upscale
coffees mass-marketed by the leading coffee companies).
°
instant or freeze dried coffee.
Specialty coffee, or what is sometimes called gourmet coffee, is
coffee roasted using mainly high quality Arabica beans. The Arabica bean is
widely considered in the industry to be superior to its counterpart, the Robusta
bean, which is used mainly in non-specialty coffee. High quality Arabica beans
usually grow at high elevations, absorb little moisture and mature slowly. These
factors result in beans with a mild aroma and a bright, pleasing flavor that is
suitable for specialty coffee.
Based on estimates supplied by the Specialty Coffee Association of
America, sales of brewed, whole bean and ground specialty coffee totaled
approximately $12.7 billion in 2006 as compared to 10.9 billion in 2002 and $7.5
billion in 1999. Aiding this growth has been the increase in the number of
specialty coffee retail outlets, which grew from 1,650 units in 1991 to over
23,900 in 2006, as reported by the Specialty Coffee Association of America.
We believe that several factors have contributed to the increase
in demand for gourmet and specialty coffee including:
°
greater consumer awareness of gourmet and specialty coffee as a
result of its increasing availability;
°
increased quality differentiation over commercial grade coffees by
consumers;
°
increasing demand for all premium food products, including gourmet
and specialty coffee, where the differential in price from the commercial brands
is small compared to the perceived improvement in product quality and taste;
°
the overall low price of Arabica coffee beans, which has allowed
consumers to afford higher end specialty 100% Arabica coffees; and
°
ease of preparation of gourmet and specialty coffees resulting
from the increased use of automatic drip coffee makers and home espresso
machines.
Although the overall coffee industry is mature, the specialty
green coffee market represents the fastest growing segment of the coffee
industry, as the number of gourmet coffee houses have been increasing in all
areas of the United States. According to the Specialty Coffee Association of
America, the number of gourmet coffee houses has grown from 1,650 in 1991 to
approximately 13,500 in 2001 and is projected to increase to 18,000 by 2015.
Products
Our products can be divided into four categories:
°
Branded Coffee;
2
°
Private Label Coffee;
°
Wholesale Green Coffee; and
°
Coffee machines, coffee apparel and other related beverages and
products.
Branded Coffee. We will roast, grind and blend coffee according to
our own recipes and package the coffee at a roaster which is leased. The
lease ends in 2011. We market coffee under the Coscina Brothers label.
We plan to develop additional brands directed at different segments of the
consumer coffee market. We plan to launch a brand under the name Kona Wave
Hawaii Coffee and Coffee Works when we have sufficient funding.
Private label coffee. From our leased roaster in Honolulu, Hawaii,
and a new facility to be opened in Switzerland in 2009, we intend to roast,
blend, package and distribute coffee under private labels for companies
worldwide. Our private label coffee is distributed in foil bags and brick
packs in a variety of sizes. We produce private label coffee for customers
primarily hotels, restaurants, and retail stores who desire to sell coffee under
their own name but do not want to engage in the manufacturing process. Sellers
of private label coffee seek to achieve a similar quality at a lower cost to the
national brands representing a better value for the consumer.
Currently, we have a limited number of customers and small orders.
For larger orders that require additional production capacity, we
intend to arrange for subcontractors in strategic locations (but have not yet
made any agreements) to produce product according to our specifications.
Wholesale Green Coffee. The number of specialty coffee outlets,
such as Starbucks, Deidrichs and Seattles Best have been increasing in the
United States. Although we do not plan to sell to these large chains, the growth
in specialty coffee sales has created a marketplace for higher quality and
differentiated products which can be priced at a premium. As a
roaster/dealer of green coffee located in Hawaii, we believe we will be
favorably positioned for our specialty coffee sales of Hawaiian green
coffee.
Green gourmet coffee beans are sold as markets for Hawaiian green
coffee are growing rapidly, direct from warehouses to the small roasters and
gourmet coffee shop operators which then roast the beans themselves.
Raw
Materials
Coffee is a commodity traded on the Commodities and Futures
Exchange. Coffee prices are subject to fluctuation. Over the past five years,
the average price per pound of coffee beans ranged from approximately $.42 to
$3.18. The price for Columbian Mild Arabica coffee beans on the New York
Exchange as of June 30,2009 was $1.35 per pound.
We intend to purchase our green coffee primarily from Hawaiian
growers, but we may also purchase from dealers located within other parts of the
United States or other parts of the world.
The supply and price of coffee beans are subject to volatility and
are influenced by numerous factors which are beyond our control. Supply and
price can be affected by many factors such as weather, politics and economics in
the coffee exporting countries. Increases in the cost of coffee beans can, to a
certain extent, be passed on to our customers in the form of higher prices for
coffee beans and processed coffee. However, there can be no assurance that we
will be successful in passing coffee price increases to customers without losses
in sales volume or margin. Drastic or prolonged increases in coffee prices could
also adversely impact our business as it could lead to a decline in overall
consumption of coffee.
Similarly, rapid decreases in the cost of coffee beans could force
us to lower our sales prices before realizing cost reductions in our purchases.
In addition, a worldwide supply shortage of gourmet coffee beans could have an
adverse impact on us.
Gourmet green coffee, unlike most coffee, does not trade directly
to commodities markets. Instead, it tends to trade on a negotiated basis at a
substantial premium over commodity coffee pricing, depending on the origin,
supply and demand at the time of purchase.
From time to time, we might engage in the purchase and sale of
coffee futures and option contracts to guard against the effects of fluctuations
in the price of green coffee beans and to supplement our supply of coffee, if
necessary. Management has no experience in the coffee futures business.
We intend to use the services of John King, of Harold King Company,
a licensed commodities broker specializing in coffee futures, but we have not
entered into a contract with that firm to act for us.
3
Trademarks
We hold a license to the common law trademark Coscina Brothers
Coffee. We believe that this brand is recognizable in the marketplace and
that brand recognition will be important to the success of our branded coffee
business.
Marketing
We intend to market our private label and wholesale coffee through
trade shows, industry publications, face to face contact and through the use of
non-exclusive independent food and beverage sales brokers.
For our private label and brand coffees, we will, from time to
time in conjunction with retailers and with wholesalers, conduct in-store
promotions, such as product demonstrations, coupons, price reductions and
two-for-one.
We believe that our unique and specialized product mix will enable
us to profitably grow and endure potential commodity price volatility inherent
in the coffee futures market. We seek to achieve conservative growth by
enhancing and developing long-term relationships with our customers by expanding
our product lines to satisfy changing consumer tastes and preferences. We hope
to capitalize on our commitment to quality and service and our personal contact
with our customers. We do not intend to compete on price alone nor do we intend
to grow sales at the expense of profitability. We will continue to evaluate
opportunities for growth consistent with our business strategy.
Because we have only recently commenced operations and have
limited sources of operating capital, we believe that unless we obtain
substantial funding as set forth under Plan of Operations it will take a
significant amount of time, at least several years, before we can meet our
growth goals.
In the event we lose our current customers and do not obtain any
other customers, we will cease business operations. We have not formulated any
contingency plans to take effect in the event our business operations cease.
Competition
The coffee market is highly competitive. We will compete
with other suppliers and distributors of green coffee beans and roasted coffees.
Our products will compete directly against specialty coffees sold at
retail through supermarkets and a growing number of specialty coffee stores.
We believe, however, that we compete primarily across product lines and
that competition in regions in which we do not currently have significant market
presence does not differ significantly from competition in those markets in
which we currently do business.
Brand Competition. Our proprietary brand coffees compete and will
compete with many other branded coffees which are sold in supermarkets and
specialty stores, primarily in the United States. The branded coffee is
dominated by three large companies: Kraft General Foods, Inc., Proctor &
Gamble Co. and Sara Lee, who also market gourmet coffee in addition to
non-gourmet coffee. Our large competitors have greater access to capital than us
and have a greater ability to conduct marketing and promotions.
Private Label Competition. There are approximately four
major producers of coffee for private label sale in the United States.
Many other companies produce coffee for sale on a regional basis.
The principal competitors are E. Gavina & Sons, Kroger and the coffee
division of Sara Lee. Both Kroger and Sara Lee are larger and have more
financing and resources than we do and therefore are able to devote more
resources to product development and marketing. However, because Kroger owns the
stores in which it sells coffee and therefore competes directly with potential
purchasers of its private label coffee, many customers will not purchase private
label coffee from Kroger. Competition for the specialty types of coffees
we will sell is at the same cost level as our larger competitors. Our
ability to provide the special handling and meet the order size of customers
that buy this product can be better served, in our opinion, by a company which
in our opinion is more highly focused.
We believe that we can compete by providing a high level of
quality and customer service. This service includes ensuring that the coffee
produced for each label maintains a consistent taste and delivering the coffee
on time in the proper quantities. We also intend to provide our private label
customers with information on the coffee market on a regular basis. Private
label coffee also competes with all of the branded coffee on the market. Sara
Lee also produces branded coffees which compete directly with their private
label products.
4
Wholesale Green Coffee Competition. There are many green coffee
dealers throughout the United States. Many of these dealers have greater
financial resources than us. However, we believe that our location in Hawaii
will assist in locating good supply of Hawaiian beans. Because we are also
a roaster and packaging facility as well as a seller of green coffee, we can
provide our roasting facility as a value added service to our gourmet roaster
customers. Because the gourmet green coffee beans are sold unroasted to small
coffee shops and roasters that market their products to local gourmet customers,
we do not believe that our gourmet green coffee customers compete with our
private label or branded coffee lines of business. We believe it helps to
have this type of business to increase the awareness level and maintain
prices.
Government
Regulation
Our coffee roasting operations will be subject to various
governmental laws, regulations, and licenses relating to customs, health and
safety, building and land use, and environmental protection. Our roasting
facility is subject to state and local air-quality and emissions regulation. If
we encounter difficulties in obtaining any necessary licenses or complying with
these laws and regulations, then our product offerings could be limited.
We believe that we will be in compliance in all material respects
with all such laws and regulations and that we have obtained all material
licenses and permits that are required for the operation of our business. We are
not aware of any environmental regulations that have or that we believe will
have a material adverse effect on our operations.
Employees
We have no employees other than our officers. Upon receipt
of funding we plan to hire two persons in marketing and one in administration.
All of our employees are full time.
Item 1A.
RISK FACTORS
.
The
securities of Pacific Land and Coffee are highly speculative and very risky.
Before you buy consider the following risk factors and the rest of this
report.
We are still in the
development stage and may never be successful.
Pacific Land and Coffee's activities have been limited. We
have only a limited quantity of customers to date. Although our sales have
grown, our cumulative losses since inception to March 31, 2009 are $1,548649.
There can be no assurance that Pacific Land and Coffee will be able to
market its coffee and coffee related products, achieve a significant level of
sales or attain profitability, although Pacific Land and Coffee can continue to
exist indefinitely at its current level of sales if its officers continue to
fund its operating deficit. If we do not increase our level of sales our
common stock will not attain any value in any market that might develop, and
investors will not be able to realize any value from their ownership of
shares.
We need
funding to implement our business plan
.
Pacific Land and Coffee is in need of approximately $500,000 in
funding to carry out its business plan for the next 12 months for marketing
costs and general and administrative expenses. We have not identified any
source for this required funding. If we do not receive funding we will not
be able to market effectively to obtain new customers. If we do not obtain
new customers, our sales will not increase. If our sales do not increase,
our common stock will not attain any value in any market that might develop, and
investors will not be able to realize any value from their ownership of shares.
The first
$100,000 in funding will be used primarily for salaries
.
If we receive less than all of the $500,000 in funding we require,
most of the first $100,000 we receive will be used for salaries of sales
associates or sales representatives, but not for management. The remainder
of the first $100,000 will be used for other marketing expenses. As a
result, we will be expending these amounts and not purchasing inventory which
can be resold.
Pacific
Land and Coffee has no long term or firm contracts with customers.
5
We have only a limited number of customers, to whom we ship as
purchase orders are received. Customers are under no contractual
obligation to purchase our products. We do not have a firm contract with
any other customer. Because of our lack of history of operations and limited
sales, lack of sales in a short period of time would cause us to suspend
operations.
If our customers decided to no longer purchase from us, or
significantly reduced the quantity or frequency of orders, we would have no
sales. In that event, if we are unable to obtain one or more new
customers, we will not have any sales. If we do not have any sales we
cannot continue operations.
We
have added a website but have not significantly benefitted from the
internet for marketing.
We have established a website for informational and
sales purposes. To date, it has not generated any significant sales.
We believe that individual consumers as a whole are more interested in
price at this time and specialty coffees appeal to only a limited market.
We
presently lack full time management, which might result in a conflict of
interest.
Until such time as we obtain $500,000 in funding, management is
not devoting full time to Pacific Land and Coffees business. As a result,
management is conducting only limited marketing of our products, and we only
have a few customers. For so long as management is not full time, we
cannot anticipate any significant increases in sales. In addition, because
management is not receiving any salary, they are devoting most of their time to
other business activities. Consequently, management may have a conflict of
interest between their duties to Pacific Land and Coffee and their other
business activities.
Fluctuating Coffee Prices Can Cause Losses
The supply and price of coffee beans are subject to volatility and
are influenced by numerous factors which are beyond our control. We intend
to use short-term coffee futures and options contracts primarily for the purpose
of partially hedging and minimizing the effects of changing green coffee prices
once we have sufficient sales to justify the transaction costs of futures
trading. In the meantime we will be exposed to potential losses in the
event of unforeseen price increases in green coffee prices. The use of
these derivative financial instruments can enable us to attempt to mitigate the
effect of changing prices although it generally remains exposed to loss when
prices decline significantly in a short period of time and remain at higher
levels, preventing us from obtaining inventory at favorable prices. We
expect to be able to pass green coffee price increases through to customers,
thereby maintaining our gross profits. However, we cannot predict whether we
will be able to pass inventory price increases through to our customers.
Item
1B. Unresolved Staff Comments
Not applicable.
Item 2.
DESCRIPTION OF PROPERTY
We rent 3,000 square feet of office space under a lease expiring
in November 2009.
Item 3.
LEGALPROCEEDINGS
Pacific Land and Coffee is not a party to any pending legal
proceeding.
Item 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended March 31, 2009.
PART II
Item 5.
MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Our common stock commenced trading in the quarter ended June 30,
2005 under the symbol PLCF.OB on the OTC Bulletin Board. The symbol was
changed to PLFF.OB in September 2007 in connection with a one-for-three reverse
stock split effective
6
September 25, 2007. In the three years ended March 31, 2009
the high and low trading prices (adjusted for the reverse split) were as
follows:
Quarter Ended
High
Low
June 30, 2006
.90
.90
September 30, 2006
1.56
1.56
December 31, 2006
1.56
1.05
March 31, 2007
1.05
1.90
June 30, 2007
.90
.90
September 30, 2007
.90
.60
December 31, 2007
1.90
.60
March 31, 2008
1.82
1.01
June 30, 2008
1.75
1.55
September 30, 2008
1.55
1.55
December 31, 2008
1.55
1.55
March 31, 2009
1.55
.57
These prices
do not include retail mark up and mark down and may not represent actual
transactions.
As of March
31, 2009, there were approximately 300 record holders of common stock.
Item
6. SELECTED FINANCIAL DATA
The Registrant is not required to supply this information because
it is a smaller reporting company.
Item 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
We did not receive revenues from operations until the
quarter ended September 30, 2003. Our initial product offered is a special
roasted blend to one customer in Japan, commencing in September, 2003, and the
brokerage of two green bean orders in the quarter ended December 31, 2003. 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.
Managements 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 year ended March 31, 2009 were
$
318,441, compared to
$2
71,594
for the year ended March 31, 2008,
due to increased costs and the Company holding the line on price increases
in order to build sales. Our general and administrative expenses increased
42% over 2008 levels primarily related to the Integrated Coffee administrative
costs and developmental costs of the coffee technology.
In the 2009 fiscal year we determined to suspend further
development of our proprietary coffee and other tropical plant technology (in
our Integrated Coffee subsidiary) due to lack of funding. We wrote off the
intellectual property associated with this technology as a result of the
suspension of this part of our business. In prior years, Integrated Coffee
raised funds every year through an investment regime of the state of
Hawaii which offers favorable tax treatment for Hawaii based technology
companies. Due to the deterioration in the world economy in the latter months of
2008, the Company was unable to attract funding in order to continue the
activities of Integrated Coffee, and its personnel were laid off or resigned in
the last quarter of fiscal 2009. We cannot anticipate when we will be able
to recommence the Integrated Coffee developmental process. We have entered into
negotiations to open a roaster facility
7
in Switzerland in 2009 and market specialty coffee in Europe.
We believe we can arrange financing for this new line of business from
equity or debt financing.
Our plan of operation for fiscal 2009-10 will depend significantly
on whether we obtain outside funding. If we do not receive outside
funding, our plan of operations will be simple. Based entirely on our
communications with our primary customer, management believes, and has no reason
to doubt, that we will continue to achieve the current level of sales without
any significant marketing expenditures. However, we cannot be certain of
any future sales. Management is confident that Pacific Land and Coffee can
continue to enjoy at least its limited level of sales. Management will use
its current business contacts to attempt to achieve additional sales. In
particular, Mr. Coscina has 30 years experience in the coffee industry.
There are no contingencies or conditions to the above sales other
than our performance under purchase orders. We will not require any
outside funding to accomplish these sales, nor will we need to make any capital
expenditures or hire employees and expect that we will slowly obtain additional
specialty coffee orders and green bean brokerage transactions.
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.
Forward
looking information
Our future operating results are subject to many factors,
including:
°
the impact of rapid and persistent fluctuations in the price of
coffee beans;
°
fluctuations in the supply of coffee beans;
°
general economic conditions and conditions which affect the market
for coffee;
°
our success in implementing our business strategy or introducing
new products;
°
our ability to attract and retain customers;
°
the effects of competition from other coffee manufacturers and
other beverage alternatives;
°
changes in tastes and preferences for, or the consumption of,
coffee;
°
our ability to obtain additional financing; and
°
other risks which we identify in future filings with the SEC.
8
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.
Item 7.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of
Independent Registered Public Accounting Firm
The Board of
Directors and Shareholders
Pacific Land
and Coffee Corporation [a development stage company]:
We have
audited the accompanying consolidated balance sheet of Pacific Land and Coffee
Corporation [a development stage company] as of March 31, 2009, and
the related statements of operations, stockholders' deficit, and cash flows for
the years ended March 31, 2009 and 2008 and for the period from inception
[February 14, 2003] through March 31, 2009. 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 has determined
that it 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 Companys
internal controls 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 provides a reasonable basis for
our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Pacific Land and Coffee Corporation
[a development stage company] as of March 31, 2009, and the results of its
operations and cash flows for the years ended March 31, 2009 and 2008 and for
the period from inception [February 14, 2003] to March 31, 2009 in conformity
with accounting principles generally accepted in the United States of
America.
The
accompanying financial statements have been prepared assuming that Pacific Land
and Coffee Corporation will continue as a going concern. As discussed in
Note 2 to the financial statements, the Company has limited operating capital
with limited revenue from operations. Realization of a major portion of
the assets is dependent upon the Companys ability to meet its future financing
requirements, and the success of future operations. These factors raise
substantial doubt about the Companys ability to continue as a going concern.
Managements plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustment that might result from the
outcome of this uncertainty.
Mantyla McReynolds, LLC
Salt Lake City, Utah
July 14, 2009
9
PACIFIC LAND & COFFEE CORPORATION
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
ASSETS
March
31,
March
31,
2009
2008
Current
Assets
Cash in Bank
$
10,313
$
18,542
Accounts Receivable, net of
allowance for doubtful accounts of
$6,188
and $8,373 - Note 1(f)
26,518
19,591
Other
receivables
1,064
29,600
Income
tax receivable Note 8
30,494
44,800
Total Current Assets
68,389
112,613
Fixed
Assets
- Note 3
Equipment
189,158
191,689
Leasehold
Improvements
--
9,316
Less:
Accumulated Depreciation
(130,559)
(110,910)
Total Fixed Assets
58,599
90,095
Other
Assets
Patents
- Note 4
--
1,099,226
Licenses
Note 4
--
170,000
Less:
Accumulated Amortization
--
(537,989)
Rent Deposit
5,408
12,908
Total Other Assets
5,408
744,145
TOTAL ASSETS
$
132,396
$
946,853
LIABILITIES
& STOCKHOLDERS DEFICIT
Current
Liabilities
Accounts Payable
$
152,165
$
38,866
Credit
Line - Note 1 (j)
24,690
19,953
Payroll & Excise Taxes Payable
15,657
3,371
Payable
Jones Day - Note 5
552,505
470,240
Advances by Officer - Note 9
227,150
--
Current Portion of Long Term Debt Note 6
13,832
13,177
Total Current Liabilities
985,999
545,607
Long Term
Liabilities
Note Payable net of current portion Note 6
8,728
23,190
Total Long Term Liabilities
8,728
23,190
TOTAL LIABILITIES
994,727
568,797
Non-Controlling Interest
--
103,304
10
Stockholders Equity (Deficit)
Preferred Stock 1,000,000 shares authorized;
par value of $.001 per share; 900,000
shares
issued
and outstanding
900
900
Common Stock 50,000,000 shares authorized;
par value of $.001 per share; 12,774,888
shares
and 12,514,459 shares issued and
outstanding
12,775
12,514
Capital in excess of par value
672,643
659,226
Deficit accumulated during the development stage
(1,548,649)
(397,888)
Total Stockholders Equity (Deficit)
(862,331)
274,752
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY
(DEFICIT)
$
132,396
$
946,853
See
accompanying notes to financial statements
PACIFIC LAND & COFFEE CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATION
For the Periods Ended March 31, 2009 and 2008
And for the Period from Inception (February 14, 2003) Through March
31, 2009
February 14, 2003
Twelve Months
Through
March 31,
March 31,
2009
2008
2009
Revenues
Sales
$
318,441
$
271,594
$
799,066
Total Revenues
318,441
271,594
799,066
Cost of Sales
198,373
157,288
515,578
Gross Profit
120,068
114,306
283,488
General & Administrative Expenses
744,262
524,980
1,381,543
Definite-lived Intangible Impairment Charges
640,893
0
640,893
Total
Operating Expenses
1,385,155
524,980
2,022,436
Net Loss from Operations
(1,265,087)
(410,674)
(1,738,948)
Other Income (Expense):
Interest Expense
(12,450)
(18,230)
(37,133)
Total Other Income (Expense)
(12,450)
(18,230)
(37,133)
11
Net Loss before Non-Controlling Interest
(1,277,537)
(428,904)
(1,776,081)
Loss to Non-Controlling Interest
96,282
55,776
152,058
Provision for Income Tax Benefit Note 8
30,494
44,880
75,374
Net Loss
$
(1,150,761)
$
(328,248)
$
(1,548,649)
Basic and Dilutive Net Loss per Share
$
(0.09)
$
(0.06)
$
(.29)
Weighted Average Shares Outstanding
12,678,207
5,822,676
5,265,441
See
accompanying notes to financial statements
PACIFIC LAND & COFFEE CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended March 31, 2009 and 2008
And for the Period from Inception (February 14, 2003) Through March
31, 2009
February 14, 2003
Twelve Months
Through
March 31,
March 31,
2009
2008
2009
Cash Flows
from Operating Activities
Net Income (Loss)
$
(1,150,761)
$
(328,248)
$
(1,548,649)
Adjustments
to reconcile net income (loss) to net
cash provided by operating activities
Depreciation and amortization
121,031
43,410
169,468
Net
loss (gain) on disposal of leasehold
improvements
809
--
809
Definite-lived
intangible impairment charges
640,893
--
640,893
Non-controlling
interest income adjustment
(103,304)
(55,776)
(159,080)
Contribution
of interest on advances by officer
6,796
--
6,796
Common
stock issued for conversion of subsidiary
stock
6,881
--
6,881
12
Contributed Capital noncash fair market value of
start-up and organization services and costs
--
--
1,000
Stock issued for payment of fees
--
128,783
128,783
Change
in operating assets and liabilities
Accounts
receivable, net
(6,927)
( 4,004)
5,123
Related party receivable
--
--
1,039
Other receivables
28,536
--
28,536
Income
tax receivable
14,386
(44,880)
(30,494)
Rent
deposit
7,500
--
5,248
Accounts
payable
113,299
(215,445)
(79,432)
Jones-Day
payable
82,266
--
82,266
Payroll and excise tax payable
12,286
1,267
15,379
Accrued
interest
--
3,007
4,648
Net Cash Used by Operating Activities
(226,309)
(471,886)
(720,786)
Cash Flow from Investing Activities
--
--
--
Net Cash Used by Investing Activities
--
--
--
Cash Flow
from Financing Activities
Net proceeds from credit line
4,737
(5,013)
221
Proceeds from noted payable related party
--
31,500
49,700
Proceeds from the sale of stock/contributed cash
--
465,000
471,480
Proceeds from advances from officer
227,150
31,044
261,690
Repayments of long term note payable
(13,807)
(10,048)
(28,254)
Repayments of note payable related party
--
(326,578)
(328,278)
Net Cash Provided (Used) by Financing Activities
218,080
185,905
426,559
Net Increase (Decrease) in Cash
(8,229)
(285,981)
(294,227)
Beginning Cash Balance
18,542
1,401
0
Cash acquired
in merger with Coscina Brothers Coffee Co.
--
--
1,418
Cash acquired
in merger with Integrated Coffee
Technologies, Inc.
--
303,122
303,122
Ending Cash Balance
10,313
18,542
10,313
Supplemental
Disclosure of Cash Flow Information:
Cash paid during the year for interest
5,654
114,822
Cash paid during the year for income taxes
---
---
---
Conversion
of Debt to Equity
117,763
BUSINESS
ACQUISITIONS
Fair
Value of assets acquired
--
1,188,614
1,275,343
Assumption
of Liabilities
--
(1,083,284)
(1,170,013)
Common
Stock issued at acquisition
--
(76,441)
(76,441)
Non-Controlling
Interest
--
(28,889)
(28,889)
13
See accompanying notes to financial statements
PACIFIC LAND & COFFEE CORPORATION
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS EQUITY (Deficit)
And for the Period from Inception (February 14, 2003) Through March
31, 2009
Net
Capital
Stockholders
Preferred
Preferred
Common
Common
Addition to
Accumulated
Equity
Shares
Stock
Share
Stock
Par
Value Deficit
(Deficit)
Balance, February 14, 2003
0
$ 0
$
0
$
0
$
0
$
0
Shares issued to initial stockholders
for cash
3,333,332
3,333
(2,331)
--
1,002
Contributed Capital Corporate
Organization and Start-up Costs, at
Inception, services and Costs at
Estimated
Fair Market Value
--
--
1,000
--
1,000
Net Loss from February 14, 2003
(Inception)
to March 31, 2003
--
--
--
--
(1,195)
(1,195)
______
_______
__________
______
________
________
________
Balance, March 31, 2003
0
0
3,333,332
3,333
(1,331)
(1,195)
807
Cash
contributed for Working Capital
--
--
1,978
--
1,978
Net
Loss Year Ended March 31, 2004
--
--
--
(1,176)
(1,176)
______
_______
__________
______
________
________
________
Balance,
March 31, 2004
0
0
3,333,332
3,333
647
(2,371)
1,609
Net
Loss Year Ended March 31, 2005
--
--
--
(6,695)
(6,695)
______
_______
__________
______
________
________
________
Balance,
March 31, 2005
0
0
3,333,332
3,333
647
(9,066)
(5,086)
Net
Loss Year Ended March 31, 2006
--
--
--
(7,733)
(7,733)
______
_______
__________
______
________
________
________
Balance,
March 31, 2006
0
0
3,333,332
3,333
647
(16,799)
(12,819)
Cash
contributed by shareholders
--
--
3,500
--
3,500
Net
Loss Year Ended March 31, 2007
--
--
--
(52,841)
(52,841)
______
_______
__________
______
________
________
________
Balance,
March 31, 2007
0
0
3,333,332
3,333
4,147
(69,640)
(62,160)
Issuance
of Preferred Shares
900,000
900
(900,000)
(900)
0
Issuance
of Shares for Service
1,494,300
1,495
90,039
91,534
Conversion
of Debt for Shares
49,774
50
93,212
93,262
Issuance
of Shares for Merger
7,644,149
7,644
68,797
76,441
Adjustment
for Conversion of ICTI Stock
892,904
893
42,411
43,304
Adjustment
for ICTI stock changes
360,620
360,620
Net
Loss Year Ended March 31, 2008
(328,248)
(328,248)
______
_______
__________
______
________
________
________
14
Balance,
March 31, 2008
900,000
900
12,514,459
12,514
659,226
(397,888)
274,752
Adjustment
for Conversion of ICTI Stock
260,305
261
6,621
6,882
Contribution
of Interest earned by
Shareholder
6,796
6,796
Transfer/Conversion difference
124
--
Net Loss Year Ended March 31, 2009
(1,150,761)
(1,150,761)
______
_______
__________
______
________
________
________
Balance, March 31, 2009
900,000
900
12,774,888
12,775
672,643
(1,548,649)
(862,331)
See
accompanying notes to financial statements
Pacific
Land and Coffee Corporation
(A
Development Stage Company)
Notes to
Condensed Financial Statements
March 31,
2009
Note 1
Organization and Summary of Significant Accounting
Policies
(a)
Organization
Pacific Land and Coffee Corporation (the Company) was organized
under the laws of the State of Hawaii on February 14, 2003, and has elected a
fiscal year end of March 31
st
. The Company was organized for
the purpose of the research and development of tropical plantation plants, to
own and sell real and personal property and to sell products. Currently,
the Company is selling coffee and/or coffee related products.
On May 20, 2003, the Company combined with Back Channel
Investments, Inc., in a reverse merger pursuant to an Agreement and Plan of
Reorganization. Back Channel acquired all the outstanding shares of common
stock of the Company in exchange for 7,000,000 shares of Back Channels common
stock. The surviving entity is Pacific Land and Coffee Corporation.
Upon completion of the agreement, the combined Company essentially
re-capitalized to have 10,000,000 shares outstanding. No change in net
book value or goodwill was recognized. Subsequently, in August, 2007,
these shares were reduced to 3,333,332 shares through a reverse stock split.
The pre-merger financial statements of Pacific Land and Coffee are now the
historical financial statements of the Company.
On November 6, 2006, Alfred Coscina, a director, officer and
shareholder, contributed 100% of his interest in Coscina Brothers Coffee
Company, LLC, to the Pacific Land and Coffee Corporation. Mr. Coscina did
not receive any item of value in return for the capital contribution.
The financial statements have been presented to reflect activity
from the wholly owned subsidiary, Coscina Brothers Coffee Company consolidated
with operations of the Company for the year ended March 31, 2009.
All inter-company transactions have been eliminated.
On December 18,
2007, the Company completed the acquisition of 70.3% of the outstanding shares
of Integrated Coffee Technologies, Inc. common stock. Integrated
Technologies, Inc. was organized under the laws of the State of Delaware on June
16,1995 for the purpose of researching and developing processes related to the
coffee plant industry. The aggregate purchase price of $76,441
consisted of an aggregate of 7,644,150 shares of the Companys common stock
valued at $76,441 or $.001 per share. (See Note 11)
15
As disclosed in a
Form 8-K dated December 18, 2007, the Company acquired 70.3% of the outstanding
shares of Integrated Coffee Technologies, Inc. for 7,644,150 newly authorized
shares of common stock, and reserved 4,355,850 additional shares for the
acquisition of the remaining Integrated Coffee Technologies shares. The
Company expects that the majority, if not all, of the remaining Integrated
Coffee Technologies shareholders will elect to exchange at the same exchange
ratio of 3 Company shares for each 5 shares of Integrated Coffee Technologies.
As of the audit date, 1.922,015 shares of Integrated Coffee Technologies
shares have been converted into 1,153,209 shares of Company stock. An
additional 3,274,981 shares of Integrated Coffee Technologies shares are owned
by five investment partnerships that cannot convert into Company shares until
the tax research credits they are eligible for have expired. As all of the
partnerships are controlled by owners, directors or officers of the Company
those share are effectively controlled by the Company.
Subsequent to the
acquisition, Integrated Coffee Technologies sold 445,000 shares of Integrated
Coffee Technologies, Inc stock for cash of $445,000. at a $1 per share.
These Integrated Coffee Technologies shareholders may also in the future
have the opportunity to exchange their shares for Company shares.
The financial statements
have been presented to reflect activity from the 77.85% owned subsidiary,
Integrated Coffee Technologies, Inc. from the date of transfer, December 18,
2007 through March 31, 2009 consolidated with operations of the Company for the
year ended March 31, 2009.
The Company is considered a development stage company as defined
in Statement of Financial Accounting Standards No. 7. The Company has at
the present time, not paid any dividends and any dividends that may be paid in
the future will depend upon the financial requirements of the Company and other
relevant factors.
(b)
Principles
of Consolidation
The consolidated
financial statements include the accounts of Pacific Land & Coffee, Inc. and
its wholly-owned subsidiary Coscina Brother Coffee Company and its
majority-owned subsidiary Integrated Coffee Technologies, Inc. All intercompany
accounts and transactions have been eliminated in consolidation.
(c)
Income Taxes
The Company applies the provisions of Statement of Financial
Accounting Standards No. 109 [the Statement],
Accounting for Income
Taxes
. The Statement requires an asset and liability approach for
financial accounting and reporting for income taxes, and the recognition of
deferred tax assets and liabilities for the temporary differences between the
financial reporting basis and tax basis of the Companys assets and liabilities
at enacted tax rates expected to be in effect when such amounts are realized or
settled. Due to a loss from inception, the Company has no tax
liability.
(d)
Use of Estimates in Preparation of Financial Statements
The preparation of financial statements in conformity with U.S.
Generally Accepted Accounting Principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(e)
Basic Loss Per Common Share
Basic loss per common share has been calculated based on the
weighted average number of shares outstanding. In accordance with
Financial Accounting Standards No. 128,
Earnings Per Share
, basic loss
per common share is computed using the weighted average number of common shares
outstanding. Diluted earnings per share is computed using weighted average
number of common shares plus dilutive common shares equivalents outstanding
during the period using the treasury stock method. Because the Company
incurred losses for the years ended March 31, 2009 and 2008, the effect of any
equivalent shares for each year would be excluded from the loss per share
computation since the impact would be antidilutive. There were no common
stock equivalents outstanding at March 31, 2009.
16
(f)
Revenue Recognition
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 collectibility 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 are recorded as the net commission
recognizable to the Company.
The Company records accounts receivable for sales which have
been delivered but for which money has not been collected. The balance
uncollected as of March 31, 2009 was $32,706. At March 31, 2009, the
Company had an allowance for uncollectible accounts of $6,188. The
allowance for doubtful accounts, which is based upon managements evaluation of
numerous factors, including a predictive analysis of the outcome of the current
portfolio and prior credit loss experience, is deemed adequate to cover
reasonably expected losses inherent in the outstanding receivables. The
Company charges off uncollectible accounts when management estimates no
possibility of collecting the related receivable. For customer purchases
paid in advance, the Company records a liability until products are shipped.
There was no outstanding unearned revenue from product sales as of March
31, 2009 and 2008.
(g)
Property and Equipment
Property and equipment are stated at cost. Depreciation is
provided using the straight-line method over the useful lives (5-7 years) of the
related assets. Expenditures for maintenance and repairs are charged to
expenses as incurred.
(h)
Impairment
of Long-lived Assets
Long-lived
tangible assets, including property, plant and equipment, and definite-lived
intangible assets are reviewed for impairment whenever events or changes in
circumstances indicate that the book value of the asset or asset groups may
not be recoverable. The Company evaluates, regularly, whether
events and circumstances have occurred that indicate possible impairment and
relies on a number of factors, including operating results, business plans,
economic projections, and anticipated future cash flows. The Company uses an
estimate of the future undiscounted net cash flows of the related asset or asset
group over the remaining life in measuring whether the assets are recoverable.
Measurement of the amount of impairment, if any, is based upon the difference
between the assets carrying value and estimated fair value. See Note 4 for
information regarding the asset impairment recorded as a result of specific
events and changes in circumstances
.
(i) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers
all highly liquid investments purchased with a maturity of three months or less
to be cash equivalents.
(j)
Line of Credit
The
Company has a credit line with a commercial bank of $25,000 bearing a variable
interest rate, which was 8.125% as of the balance sheet date, and has no
stated maturity date. As of March 31, 2009, there was a balance due
on the line in the amount of $24,690.
(k) Recently
Issued Accounting Standards
In May 2008,
the FASB issued SFAS 162
The Hierarchy of Generally Accepted Accounting
Principles,
(SFAS 162). SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements that are presented in conformity with
generally accepted accounting principles. SFAS 162 is effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board
amendments to remove the hierarchy of generally accepted accounting principles
from the auditing standards. The Company does not expect the adoption of SFAS
162 to impact its results of operations, financial position or cash flows.
17
In
March 2008, the FASB issued SFAS 161,
Disclosures about Derivative
Instruments and Hedging Activities an amendment of FASB Statement
No. 133
(SFAS 161). SFAS 161 requires enhanced disclosures regarding
derivatives and hedging activities, including: (a) the manner in which an
entity uses derivative instruments; (b) the manner in which derivative
instruments and related hedged items are accounted for under SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities
; and
(c) the effect of derivative instruments and related hedged items on an
entitys financial position, financial performance, and cash flows. SFAS 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008. As SFAS 161 relates specifically to
disclosures, it will have no impact on the Companys results of operations,
financial position or cash flows.
In
December 2007, the FASB issued SFAS 141(R),
Business Combinations
(SFAS 141(R)). SFAS 141(R) establishes principles and requirements for how an
acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, the goodwill acquired, and any
noncontrolling interest in the acquiree. This statement also establishes
disclosure requirements to enable the evaluation of the nature and financial
effect of the business combination and may impact the taxes on prior
acquisitions. SFAS 141(R) is effective for acquisitions occurring in fiscal
years beginning after December 15, 2008. We expect that SFAS 141(R) will
require us to account for future acquisitions in a manner significantly
different from past acquisitions.
In
December 2007, the FASB issued SFAS 160,
Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51
(SFAS 160). SFAS 160 will revise the treatment of noncontrolling
interests in consolidated balance sheets and consolidated statements of income.
Noncontrolling interests will become a part of stockholders equity in the
consolidated balance sheets and consolidated income statements will report
income attributable to the Company and to noncontrolling interests separately.
SFAS 160 is effective for fiscal years beginning after December 15,
2008 and early adoption is prohibited. Management is currently evaluating
the impact of the adoption of SFAS 160 and expects the adoption to impact the
Companys results of operations, financial position and cash flows.
In
February 2007, the FASB issued SFAS 159,
The Fair Value Option for Financial
Assets and Financial Liabilities Including an amendment of FASB Statement
No. 115.
(SFAS 159). SFAS 159 permits entities to choose to measure
eligible items at fair value at specified election dates and report unrealized
gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. SFAS 159 is effective for fiscal
2008. The adoption of SFAS 159 did not have any effect on the Companys results
of operations, financial position and cash flows.
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 Companys ability to meet its future financing requirements, and the
success of future operations. These factors raise substantial doubt about
the Companys ability to continue as a going concern. The financial
statements do not include any adjustment that might result from the outcome of
this uncertainty.
The Company is developing its operations for the sale of coffee.
Further, efforts are being made to market the Company's business to potential
consumers. The Company is planning on obtaining additional funds through equity
financing. Should the Company fail to acquire these funds, expanding operations
will be limited. Management has agreed to advance additional funds to cover the
Companys current operations. If the Company is unsuccessful in these
efforts and cannot attain sufficient coffee sales to permit profitable
operations or if it cannot obtain a source of funding or investment, it may
substantially curtail or terminate its operations.
Note 3
Property and Equipment
Property and equipment is carried at cost and summarized as
follows:
Accumulated
Cost
Depreciation
Net
Equipment
$
189,158
$130,559
$
58,599
8
For the consolidated statements presented current
depreciation expense is $ 30,688. Of the $189,158 property and equipment
account $ 60,557 has been capitalized under a capital lease discussed below.
As of March 31, 2009 the total accumulated depreciation associated with
the capital lease was $ 41,659.
Note 4
Intangible Assets
Intangible assets included trademarks that have been registered
with the United States Patent and Trademarks office. Intangible assets
also included the closing costs for refinancing a portion of the Companys debt
with a bank. The costs of obtaining trademarks and closing costs were
capitalized as incurred and were amortized over their estimated useful lives.
As of March 31, 2009, the Company reviewed the these intangible assets to
determine if impairment had occurred and whether the economic benefit of the
asset (fair value for assets to be used and fair value less disposal costs for
the assets) justified its continued carrying value. The Company determined
that intangible assets totaling $1,269,226 less accumulated amortization of
$628,333 did not meet these standards and in accordance with Statements on
Financial Accounting Standards (SFAS) #144, have written down these assets.
The loss of $640,893 is reflected in the current year Statement of
Income.
Note 5
Payable to Jones Day
Jones
Day, our attorneys who have been lead counsel on obtaining, registering and
maintaining our patents, have accumulated billings of $552,505, including some
that were converted to a note payable and accrued interest through December 18,
2007:
Accounts
Payables through March 31, 2008
$
261,002
Billings
during the current fiscal year
82,265
Note
Payable
145,980
Accrued
Interest
63,258
------------
$
552,505
=======
Note 6
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 Companys equipment.
Maturities of long- term debt are as follows:
Year Ending
March 31
2010
$ 13,832
2011
8,728
Total
$
22,560
Note 7
Common Stock
The Company, at inception, issued 1,000 shares of common stock to
two initial stockholders at approximately $1.00 per share for a total amount of
$1,002.
On May 20, 2004, the Company combined with Back Channel
Investments, Inc., in a reverse merger pursuant to an Agreement and Plan of
Reorganization. Back Channel acquired all of the outstanding shares of
common stock of the Company in exchange for 7,000,000 shares of Back Channels
common stock. Prior to the combination, Back Channel had 1,000,000 shares
of common stock outstanding which were forward split on the basis of three for
one. The surviving entity is Pacific Land and Coffee Corporation.
Upon completion of the agreement, the combined Company essentially
re-capitalized to have 10,000,000 shares outstanding. In August, 2007,
these shares were converted to 3,333,332 shares in a reverse stock split.
19
The Company has filed a registration statement with the Securities
and Exchange Commission on Form SB-2. The offering includes 3,000,000
shares of common stock of Pacific Land & Coffee Corporation, which are
offered by the selling stockholders. Certain of the selling stockholders
which were promoters or affiliates of Pacific Land and Coffee are deemed
underwriters.
During the year ended March 31, 2007, two shareholders sold 7,000
shares at a price of $.50 per share and contributed the proceeds to the
Company.
On August 22,2007, the Company effected a one-for-three reverse
stock split of its common stock, and authorized the issuance of a class of
preferred stock (1,000,000 shares) and to increase the number of authorized
shares of common stock from 10,000,000 to 50,000,000.
Also, on August 22, 2007, the Company approved the issuance of
Company stock to officers and directors in return for services rendered.
In post-split shares, the officers and directors receiving shares were as
follows:
Alfred
Coscina (Director)
221,833
shares
Dale
Nielsen (President/Director)
224,133
Dennis
Nielsen (Director)
223,333
On March 24, 2008, the Company also issued 125,000 shares to Tyrus
C Young (Chief Financial Officer/Corporate Secretary) for services rendered.
On December 18, 2007, the Company issued 7,644,149 shares of its
common stock to a corporation holding 70.3% of the then outstanding shares of
Integrated Coffee Technologies, Inc. (See Note 1)
The Company has issued 1,153,209 shares of common stock to
non-controlling interest shareholders in exchange for 1,922,015 shares of
Integrated Coffee Technologies stock.
Effective March 28, 2008, the Company issued 49,774 shares of
common stock to extinguish all of the outstanding advances, loans and accrued
interest owed to Directors and officers as of that date.
Note 8
Income Taxes
The
provision for income taxes consists of the following:
2009
2008
Federal
Current
$
--
$
--
Deferred
--
--
State
Current
(30,494)
(44,880)
Deferred
--
--
_______
______
Total
Provision (Benefit)
$ ( 30,494)
$
(44,880)
=======
======
The following is a summary of deferred tax balances as of March
31, 2009 and 2008 with an assumed combined federal and state tax rate of
40.4%:
2009
2008
Deferred
Tax Asset:
Net
Operating Loss Carryforwards
$
420,217
$
217,243
Definite-lived
Intangibles
159,766
Accrued
Rent
5,193
_________
_______
Gross
Deferred Tax Asset
579,983
222,436
20
Less:
Valuation allowance
(
579,983)
(148,614)
Net
Deferred Tax Asset
-0-
.
73,822
Deferred
Tax Liabilities
Property
& Equipment, due to differences in
Depreciation
(63,771)
Definite-lived
Intangibles
(10,051)
_________
_______
Deferred
Tax Liability
-0-
(73,822)
_________
_______
Net
Deferred Tax Asset (Liability)
$
-0-
$
-0-
The allowance has increased $ 431,369 from $148,614 as of March
31, 2008.
Reconciliation between income taxes at the statutory rate (40.4%)
and the actual income tax provision for continuing operations follows:
2009
2008
Expected Provision/(Benefit) [based on statutory rates]
$
(417,187) $
(150,744)
Effect of:
Other, net
(14,182) 16,128
State
Refundable Credit
(
30,494)
(44,880)
Increase
in Valuation Allowance
431,369
134,616
Provision
for Income Taxes
$
( 30,494)
$
(44,880)
The Company has net operating losses totaling $376,490, which
expire through March 31, 2029. The Companys subsidiary, Integrated Coffee
Technologies, Inc. has net operating losses totaling $ 663,651 which expire
through March 31, 2029.
The Company
adopted the provisions of FIN 48 on April 1, 2007. As a result of this
adoption, we have not made any adjustments to deferred tax assets or
liabilities. We did not identify any material uncertain tax position of
the Company on returns that have been filed or that will be filed. The
Company has not had operations and is carrying a large Net Operating Loss as
disclosed above. Since it is not thought that this Net Operating Loss will
ever produce a tax benefit, even if examined by taxing authorities and
disallowed entirely, there would be no effect on the financial statements.
A reconciliation of our unrecognized tax benefits for 2008 is presented in
the table below:
2009
2008
Beginning balance
$
-0-
$
-0-
Additions based on tax positions
related to
the current year
-0-
-0-
Reductions based on tax positions
related to
prior years
-0-
-0-
Settlements with taxing authorities
-0-
-0-
Ending balance
$
-0-
-0-
The Company
has filed income tax returns in the U.S. All years prior to 2005 are
closed by expiration of the statute of limitations. The years ened
March 31, 2006, 2007, and 2008 are open for examination.
21
The Companys
policy is to recognize potential interest and penalties accrued related to
unrecognized tax benefits within income tax expenses. For the year ended
March 31, 2009 and 2008, we did not recognize any interest or penalties, nor did
we have any interest or penalties accrued as of March 31, 2009 and 2008 relating
to unrecognized benefits.
Note 9
Related Party Transactions
During the year ended March 31, 2009, an officer and director
advanced a total of $223,824 to the Company. As of March 31, 2009,
the Company accrued interest of $6,796 representing an imputed rate of 6% per
annum. The officer/director has contributed the accrued interest to
additional paid in capital.
Another officer advanced
$ 3,326 to assist with meeting operating expenses. This advance did not
accrue any interest
and will be repaid
within the subsequent year.
Note 10
Significant Concentration of Credit Risk
The Companys concentration of activities is primarily in the
State of Hawaii. The Company sells a significant amount of coffee acquired
from Hawaiian suppliers. Accordingly, should the Companys suppliers in
this region experience economic difficulties; it would be detrimental to the
Company.
As
of March 31, 2009 and 2008, the 5 largest customers in the aggregate accounted
for 45% and 45%, respectively, of
total
revenues. If one or more of the Companys significant customers were to become
insolvent or were otherwise
unable
to pay for the coffee products provided, it would have a material adverse effect
on the Companys financial
condition
and results of operations.
Note 11
Lease Obligation
The lease agreement was part of the liabilities associated with
the consolidation of Coscina Brothers Coffee, LLC that took place on ovember 6,
2006. The office lease expires on November 3, 2009 with current base monthly
rent of $4,140. Office rent expense for the year ending March 31, 2009 and 2008
was $65,152 and $47,120, respectively.
The lease agreement was part of the liabilities associated with
the consolidation of Integrated Coffee Technologies, Inc. that took place on
December 18, 2007. The office lease was scheduled to expire December 31, 2010
with current base monthly rent of $ 8,442, however, effective February 28, 2009,
by mutual agreement with the landlord, the property was relinquished.
Office rent expense for the year ending March 31, 2009 and 2008 was $
97,946 and $ 28,814, respectively.
Future minimum lease payments required by operating leases that
have initial or remaining non-cancellable lease terms extending beyond March 31,
2009, are limited to the period from April 1, 2009 through November 3,
2009 of which the minimum lease payments due total $24,840.
Item 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None; Not applicable.
Item 8A.
CONTROLS AND PROCEDURES.
As of the end of the period covered by this report, we carried out
an evaluation, under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design
22
and operation of our disclosure and procedures (as defined in
Exchange Act Rule 13a-15(e) and 15d-15(e)). Based upon that evaluation,
our Chief Executive Officer and Chief Financial Officer concluded that as of the
end of the period covered by this Annual Report on Form 10-KSB our disclosure
controls and procedures were effective to enable us to accurately record,
process, summarize and report certain information required to be included in the
Companys periodic SEC filings within the required time periods, and to
accumulate and communicate to our management, including the Chief Executive
Officer and Chief Financial Officer, to allow timely decisions regarding
required disclosure.
There were no changes in our internal control over financial
reporting that occurred during the most recent fiscal quarter that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Item 8B.
OTHER INFORMATION. Not Applicable.
PART III
Item 9.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors
and Executive Officers
The members of the Board of Directors of Pacific Land and Coffee
serve until the next annual meeting of stockholders, or until their successors
have been elected. The officers serve at the pleasure of the Board of
Directors. The following are the directors and executive officers of
Pacific Land and Coffee since its inception on February 14, 2003. They
devote substantial time to Pacific Land and Coffee.
John
L. Hales
Chief
Executive Officer and Director
Dale G. Nielsen
President and Director
Tyrus C. Young
Chief Financial Officer and Secretary
John
L. Hales, 57, has founded, managed and directed several international companies.
He has been active with Integrated Coffee Technologies for the past 11
years.
Dale G. Nielsen, 59, has been president of General Pacific, Inc.,
for more than the past five years. General Pacific, Inc. consults on real
estate, retailing and telecommunications.
Tyrus C. Young, 51, formerly owned and operated a Certified Public
Accounting firm specializing in audits of companies in regulated industries and
currently heads a business management firm in Honolulu, HI.
Code of
Ethics
Pacific Land and Coffee has not adopted a code of ethics which
applies to the chief executive officer, or principal financial and
accounting officer, because of our level of operations at this time.
Audit
Committee Financial Expert
Pacific Land
and Coffee does not have an audit committee. The entire board of directors
functions as the audit committee. Pacific Land and Coffee does not have a
financial expert on its audit committee, because of the difficulty encountered
by all small public companies in obtaining outside board members. We
cannot predict when, if ever, we will be able to attract a person to the board
of directors who is a financial expert.
Item 10.
EXECUTIVE COMPENSATION
23
The following table sets forth the cash and all other compensation
of Pacific Land and Coffee's executive officers and directors during each of the
last three fiscal years. The remuneration described in the table includes
the cost to Pacific Land and Coffee of any benefits which may be furnished to
the named executive officers, including premiums for health insurance and other
benefits provided to such individual that are extended in connection with the
conduct of Pacific Land and Coffee's business. The executive officers
named below did not receive any manner of compensation in the years set forth
below.
Until we obtain funding, officers are devoting most of their time
to other employment and are serving without compensation. Following
funding we expect that the aggregate monthly compensation for management will be
$100,000.
Summary Compensation Table
ANNUALCOMPENSATION
LONG TERM COMPENSATION
Name and
Other nnual
Awards
Payouts
All
rincipal Position
Year
Salary
Bonus
Compensation
Other
Restricted
Securities
LTIP
Compensation
Stock
Underlying
Payouts ($)
Awards
($)
Options
SARs(#)
Dale G. Nielsen
2009
$
0
0
0
0
0
0
0
President/Director
2008
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
Alfred Coscina
2009
$
0
0
0
0
0
Director
2008
0
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
John L. Hales
2009
0
0
0
0
0
0
0
Chief Executive Officer/Director
2008
0
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
Tyrus C. Young
2009
32,375
0
0
0
0
0
0
Chief Financial Officer
2008
4,200
0
0
0
0
0
0
2007
0
0
0
0
0
0
0
Back Channel Investments, which later acquired Pacific Land &
Coffee Corporation, by resolution of its Board of Directors and stockholders,
adopted a 1994 Stock Option Plan (the "Plan") on April 20, 1994. The
Plan enables the Company to offer an incentive based compensation system to
employees, officers and directors and to employees of companies who do business
with the Company.
In the discretion of a committee comprised of non-employee
directors (the "Committee"), directors, officers, and key employees or employees
of companies with which we do business become participants in the Plan upon
receiving grants in the form of stock options or restricted stock. A total
of 2,000,000 shares are authorized for issuance under the Plan, of which no
shares are issued. The Company may increase the number of shares
authorized for issuance under the Plan or may make other material modifications
to the Plan without shareholder approval. However, no amendment may change
the existing rights of any option holder.
Any shares which are subject to an award but are not used because
the terms and conditions of the award are not met, or any shares which are used
by participants to pay all or part of the purchase price of any option may again
be used for awards under the Plan. However, shares with respect to which a
stock appreciation right has been exercised may not again be made subject to an
award.
24
Stock options may be granted as non-qualified stock options or
incentive stock options, but incentive stock options may not be granted at a
price less than 100% of the fair market value of the stock as of the date of
grant (110% as to any 10% shareholder at the time of grant); non-qualified stock
options may not be granted at a price less than 85% of fair market value of the
stock as of the date of grant. Restricted stock may not be granted under
the Plan in connection with incentive stock options.
Stock options may be exercised during a period of time fixed by
the Committee except that no stock option may be exercised more than ten years
after the date of grant or three years after death or disability, whichever is
later. In the discretion of the Committee, payment of the purchase price
for the shares of stock acquired through the exercise of a stock option may be
made in cash, shares of Common Stock or by delivery or recourse promissory notes
or a combination of notes, cash and shares of the Company's common stock or a
combination thereof. Incentive stock options may only be issued to
directors, officers and employees.
Stock options may be granted under the Plan may include the right
to acquire an Accelerated Ownership Non-Qualified Stock Option ("AO"). If
an option grant contains the AO feature and if a participant pays all or part of
the purchase price of the option with shares of common stock, then upon exercise
of the option the participant is granted an AO to purchase, at the fair market
value as of the date of the AO grant, the number of shares of common stock equal
to the sum of the number of whole shares used by the participant in payment of
the purchase price and the number of whole shares, if any, withheld as payment
for withholding taxes. An AO may be exercised between the date of grant
and the date of expiration, which will be the same as the date of expiration of
the option to which the AO is related.
Stock appreciation rights and/or restricted stock may be granted
in conjunction with, or may be unrelated to stock options. A stock
appreciation right entitles a participant to receive a payment, in cash or
common stock or a combination thereof, in an amount equal to the excess of the
fair market value of the stock at the time of exercise over the fair market
value as of the date of grant. Stock appreciation rights may be exercised
during a period of time fixed by the Committee not to exceed ten years after the
date of grant or three years after death or disability, whichever is later.
Restricted stock requires the recipient to continue in service as an
officer, director, employee or consultant for a fixed period of time for
ownership of the shares to vest. If restricted shares or stock
appreciation rights are issued in tandem with options, the restricted stock or
stock appreciation right is canceled upon exercise of the option and the option
will likewise terminate upon vesting of the restricted shares.
Item 11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth information relating to the
beneficial ownership of Company common stock as of March 31, 2009 by (i)
each person known by Pacific Land and Coffee to be the beneficial owner of more
than 5% of the outstanding shares of common stock and (ii) each of Pacific
Land and Coffee's directors and executive officers. Unless otherwise noted
below, Pacific Land and Coffee believes that all persons named in the table have
sole voting and investment power with respect to all shares of common stock
beneficially owned by them. For purposes hereof, a person is deemed to be
the beneficial owner of securities that can be acquired by such person within 60
days from the date hereof upon the exercise of warrants or options or the
conversion of convertible securities. Each beneficial owner's percentage
ownership is determined by assuming that any warrants, options or convertible
securities that are held by such person (but not those held by any other person)
and which are exercisable within 60 days from the date hereof, have been
exercised.
Name and Address
Preferred Stock
Percentage
Common Stock
Percentage
Dennis
Nielsen, Chairman
--
--
1,500,000
11.74%
Dale G. Nielsen
450,000
50
%
568,600
4.5
%
Albert Coscina
450,000
50
%
568,600
4.5
%
John L. Hales
(1)
514,733
4.0
%
Tyrus C. Young (1)
125,000
.98%
All officers
and directors
as a group (4 persons)
900,000
100%
3,276,933
25.71%
25
Tahoe Investments
--
7,644,149
59.84%
Except as
otherwise noted, shares are owned beneficially and of record, and such record
shareholder has sole voting, investment, and dispositive power.
Each share of
Preferred Stock has ten voting rights but is convertible into one share of
common stock.
Shares owned
by Dennis Nielsen include 1,000,000 shares owned by Dennis Nielsen and 500,000
shares held by World Link, LLC, which is controlled by him. Dennis and
Dale Nielsen are brothers.
Shares owned
by John L. Hales include 414,425 shares held of record by Sorbus Associates, SA,
a corporation controlled by Mr. Hales.
Item 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Back Channel Investments,
Inc. was organized as a Delaware corporation on April 21, 1994 to seek out an
advantageous acquisition. On May 20, 2003, Back Channel Investments, Inc.
acquired all of the capital stock of Pacific Land and Coffee Corporation, a
Hawaii corporation, in exchange for 7,000,000 shares of newly issued common
stock of Back Channel Investments, Inc.. Prior to the exchange Back Channel
Investments, Inc. had 3,000,000 shares outstanding (after giving effect to a
three-for-one forward stock split). As a result, there are 10,000,000
shares outstanding. In August, 2007, these shares were converted to
3,333,332 shares in a reverse stock split.
Back Channel
Investments, Inc. has subsequently changed its name to Pacific Land & Coffee
Corporation, the same name as its
Hawaii
subsidiary. References to Pacific Land and Coffee Corporation in this
report are to the combined entity unless otherwise
noted. Prior to the
exchange, Back Channel Investments, Inc. and Pacific Land and Coffee Corporation
had no affiliation or prior
relationship. The terms of
the share exchange were negotiated at arm's length.
We subleased
a roaster facility in Hawaii from Coscina Brothers Coffee, LLC, a limited
liability company owned by Alfred
Coscina, an
officer and director. No usage occurred under this lease. The
sublease was terminated in November, 2006 upon the
acquisition
of Coscina Brothers. The acquisition was effected as a contribution to
capital by Mr. Coscina, no additional
consideration
being paid therefor.
During the
year ended March 31, 2007, Dale Nielsen and Alfred Coscina sold 7,000 shares at
a price of $.50 per share and
contributed
the proceeds to the Company.
On March 31,
2008, we issued restricted shares of common stock at $2.00 per share to the
following persons: 10,000 shares to Sorbus Associates, SA, an entity
controlled by Mr. Hales, for $20,000 cash; 13,450 shares to Mr. Coscina for
advances on his credit card of $26,900; 22,160 and 4,160 to Dale Nielsen and
Alfred Coscina, respectively, for notes payable of $44,324 and $8,324 including
accrued interest. On March 24, 2008, we issued 125,000 shares to Mr. Young
for services rendered valued at $9,375. These shares are believed to be
exempt under Section 4(2) in private transactions and not a public offering
because they were effected without any public solicitation and were offered and
sold exclusively to officers and directors and/or their affiliates.
PART
IV
Item 13.
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. The following exhibits of the Company are
included herein.
Exhibit No.
Document Description
2.
Agreement and Plan of Reorganization between Back Channel
Investments, Inc. and Pacific Land and Coffee Corporation
(2)
26
2.2
Board Resolution accepting the assets as a contribution to
capital. (5)
3.
Certificate of Incorporation and Bylaws
3.1.
Articles of Incorporation
(1)
3.2
Articles of Amendment
(2)
3.3
Bylaws
(1)
10.
Material Contracts
10.1 Stock Option Plan.
(1)
10.2 Sublease of Roaster Facilities
(4)
16.1
Letter regarding change in certifying accountant
(3)
21.
Subsidiaries. The Company has two subsidiaries, Pacific Land and
Coffee Corporation, a Hawaii corporation, and Coscina Brothers Coffee, LLC, a
Hawaiian LLC. No trade names are employed.
31. Chief Executive Officer and Chief Financial Officer - Rule
13a-15(e) Certification. Filed herewith.
32. Chief Executive Officer and Chief Financial Officer -
Sarbanes-Oxley Act Section 906 Certification. Filed here with
(1)
Filed with the Company's original Form 10-SB.
(2)
Filed with Registration Statement on Form SB-2, file no.
333-105564 and incorporated by reference.
(3)
Incorporated by reference to the Current Report on Form 8-K dated
September 8, 2003.
(4)
Filed with Amendment No. 1 to Registration Statement 333-105564
and incorporated by reference
(5)
Incorporated by reference to the Current Report on Form 8-K dated
November 6, 2006.
(b)
Reports on Form 8-K.- None
Item 14.
Principal Accountant Fees and Services.
Audit
Fees
Our
principal accountants, Mantyla, McReynolds LLC, billed
us $ 68,204 and $37,860 for audit fees and review of quarterly filings in
the fiscal years ended March 31, 2009 and 2008, respectively.
There were $
21,418 and $ 26,593, respectively paid in audit related fees, tax fees and all
other fees to Mantyla McReynolds, LLC during the year ended
March 31, 2009 and 2008.
27
Audit Committees pre-approval policies and procedures.
We do not
have an audit committee. Our engagement of Mantyla McReynolds LLC was
approved by the Board of Directors. No services described in Item 9(e)(2)
through 9(e)(4) of Schedule 14A were performed by our auditors.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on
July XX , YYYY
PACIFIC LAND AND COFFEE CORPORATION
By:
/s/ John L. Hales
John L. Hales
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities on June 27, 2007.
By:
/s/ John L. Hales
Chief Executive Officer and Director
John L. Hales
(principal executive officer)
By:
/s/ Tyrus C. Young
Chief Financial Officer
Tyrus C. Young
(principal financial and accounting officer)
28
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