UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
Form
10-SB/A
Amendment
No. 8
General
Form for Registration of Securities of Small Business Issuers
Under
Section 12(b) or (g) of the Securities Exchange Act of 1934
The
Tradeshow Marketing Company, Ltd.
(Exact
name of small business issuer as specified in its charter)
|
Nevada
|
06-1754875
|
|
(State
of incorporation)
|
(IRS Employer ID
Number)
|
4550
East Cactus Rd, Suite 220 Phoenix, Arizona
(Address
of principal executive offices)
1-
800 585-8762
(Registrant's
telephone number)
Securities
to be registered under Section 12(b) of the Exchange Act:
None
Securities
to be registered under Section 12(g) of the Exchange Act: COMMON
STOCK
THE
TRADESHOW MARKETING COMPANY, LTD.
TABLE
OF CONTENTS
PART
I
CAUTION
REGARDING FORWARD-LOOKING INFORMATION
All
statements contained in this Form 10-SB, other than statements of historical
facts, that address future activities, events or developments are
forward-looking statements, including, but not limited to, statements containing
the words "believe," "anticipate," "expect" and words of similar import. These
statements are based on certain assumptions and analyses made by us in light
of
our experience and our assessment of historical trends, current conditions
and
expected future developments as well as other factors we believe are appropriate
under the circumstances. However, whether actual results will conform to the
expectations and predictions of management is subject to a number of risks
and
uncertainties that may cause actual results to differ
materially.
Such
risks include, among others, the following: international, national and local
general economic and market conditions: our ability to sustain, manage or
forecast our growth; raw material costs and availability; new product
development and introduction; existing government regulations and changes in,
or
the failure to comply with, government regulations; adverse publicity;
competition; the loss of significant customers or suppliers; fluctuations and
difficulty in forecasting operating results; changes in business strategy or
development plans; business disruptions; the ability to attract and retain
qualified personnel; the ability to protect technology; and other factors
referenced in this and previous filings.
nsequently,
all of the forward-looking statements made in this Form 10-SB are qualified
by
these cautionary statements and there can be no assurance that the actual
results anticipated by management will be realized or, even if substantially
realized, that they will have the expected consequences to or effects on our
business operations.
As
used
in this Form 10-SB, unless the context requires otherwise, “Tradeshow” or
“Tradeshow Marketing” or "we" or "us" or the "Company" means The Tradeshow
Marketing Company, Ltd.
ITEM
1.
A. Description
of Business
The
Tradeshow Marketing Company, Ltd. (or the "Registrant", or the "Company," each
of which terms, when used herein, refer to The Tradeshow Marketing Company,
Ltd.) was incorporated under the laws of the State of Nevada, USA, on December
03, 2003.
The
Company was listed on the Over-the-Counter Pink Sheets in November 2004.
Our
securities trade on the Over-the-Counter market (pink sheets) under the trading
symbol “TSHO.PK”. We intend to list the Securities of the Company on the
NASDAQ Over the Counter Bulletin Board. We are currently making an
application to the NASD.
Tradeshow
Marketing Company, Ltd.’s head office is located at 4550 East Cactus Rd, Suite
220 Phoenix, Arizona where the Company also operates one of its retail Sandstrom
OnTV stores. A company representative can be reached at: +1-800 585-TSMC
(8762), Fax +1 (604) 269-3620; Website
http://www.tsmc.ca/
The contents
of this site are not incorporated into this filing. Further, the Company's
references to the URLs for these are intended to be inactive textual
references.
The
Tradeshow Marketing Company commenced business operations on December 03,
2003. Tradeshow Marketing is a product development and consumer specialty
retail company that markets and sells proprietary and private label products
for
the home and office environments. The Company was formed to market specialty
products at trade shows, mall-based specialty product shops and kiosks.
Tradeshow Marketing sells popular “as seen on TV” products, which are currently
or have been advertised on TV. The products that the Company sells are
functional have a broad appeal and retail at affordable price points. The
Company’s merchandise categories include specialty household, beauty and
fitness, home and garden, and small ticket electronics products.
B. Business
of the Issuer
Tradeshow
Marketing Company, Ltd. (“Tradeshow Marketing”, “Tradeshow” the “Company”) is a
marketing and direct sales company focused on the development and distribution
of a wide range of products for the home and office environments. The Company’s
merchandise categories include specialty household, beauty and fitness, home
and
garden and small ticket electronics products.
For
the
past twenty years, Tradeshow’s demonstration professionals and management have
worked in the direct sales industry marketing a variety of products directly
to
consumers at trade shows, malls (kiosks), fairs and exhibitions throughout
Canada and the United States. Prior to the incorporation of the Company on
December 03, 2003, the two principals of the Company, Bruce Kirk and Marion
Huff
worked in the direct sales industry as a partnership under the name “Kirk-Huff
Marketing”.
Kirk-Huff
Marketing was an unincorporated entity operating as an unregistered partnership.
In order to attract investment and build itself as a corporate entity, the
principals decided to incorporate the Company, December 03, 2003, as the
Tradeshow Marketing Company, Ltd.
During
the past twenty years, Tradeshow’s professional sales staff has engaged in
product demonstration, sales and marketing for trade shows, as well as training
and consulting on “direct sell” retail and wholesale strategies for companies
seeking to market their products directly to consumers. The venues that the
Company uses for trade show demonstrations includes trade shows and annual
exhibitions such as home, garden, boat and auto shows, as well as provincial,
state and county fairs.
Management
plans to place emphasis on and to allocate financial and human resources to
the
development of our direct sales business. The Company plans to increase the
amount of direct sales business that it presently transacts. The recent
acquisition by Tradeshow of two mall-based retail stores in Phoenix, Arizona,
exemplifies our commitment to the growth of our product sales strategy (see
“Current and Proposed Operations”, Sandstrom On TV Retail Stores,
below).
Market
Overview
Venues
for the demonstration of direct sales include mall-based kiosks, retail stores
and sales demonstrations at trade shows. There is an added advantage that arises
from the Company’s tradeshow demonstration activity, as consumers who see
products demonstrated and branded at these shows may make subsequent and
additional product purchases from the Company’s recently acquired mall based
stores in Phoenix, Arizona, and the Company’s e-commerce website.. The contents
of this site are not incorporated into this filing. Further, the Company's
references to the URLs for these are intended to be inactive textual references
only.
Tradeshow
earns revenue directly from the sale of the products that it sources from a
number of different suppliers. To date, the Company has generated sales at
trade
shows, malls and other high traffic consumer venues, such as public fairs and
exhibitions. The Company began to generate revenue from operations during
its 2004 fiscal year, which commenced June 01, 2004.
Direct
Sales at Tradeshows -- A Current Operation.
Over
the
past 20 years Tradeshow’s principals have appeared consistently, year after
year, in tradeshows, malls, fairs and exhibitions in cities in Western Canada
and the United States. Since incorporation, The Company has attended trade
shows
in the following cities: Canada: Vancouver, Abbotsford, Victoria, Nanaimo,
Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto (every second year);
United States: Puyallup, WA, Tacoma, WA, Pomona, CA, Phoenix, AZ. The Company
has consistently generated revenue by attending tradeshows, malls, fairs and
exhibitions in these markets and locales.
Tradeshow
focuses on the development, direct sales and distribution of a wide range of
products for the home and office environments. Tradeshow utilizes a direct
sales
strategy, by marketing a variety of products directly to consumers via sales
presentations, with the goal to brand and sell products at trade shows, malls,
fairs and exhibitions.
Many
of
the items that the Company features in its stores and at trade shows, malls
(kiosks) fairs and exhibitions may be categorized as “as seen on TV” because
they are currently advertised or have been advertised on TV. Examples of
suppliers and the products that we sell include:
|
·
|
Ontel
Products: “as seen on TV” products that include the Swivel Sweeper, Glass
Wizard and AB Master;
|
|
·
|
American
Direct (TriStar): product supplied includes the Lateral Thigh Trainer
and
Jack Lalanne’s Power Juicer;
|
|
·
|
Cava
Industries: supplies the Cold Heat Soldering Tool and Smart Spin
containers;
|
|
·
|
ITW
Space Bags: supplies Space Bags for
storage;
|
|
·
|
Orange
Glow International: suppliers of cleaning products OxiClean, Orange
Glo,
and Kaboom, among others;
|
|
·
|
Overbreak:
supplies toys that include Hover Disc, Hover Copter and Rainbow
Art.
|
When
possible and advantageous, Tradeshow works to secure territorial exclusivity
for
products that it sells. Notably, the absence of product exclusivity has not
impaired past business performance because the Company merchandises and sells
a
broad selection of popular and contemporary products form multiple suppliers
and
wholesalers, thereby ensuring its ability to remain competitive. On occasion,
suppliers will approach the Company to demonstrate and sell their products
on
their behalf.
Tradeshow
also intends to sell its own private label products. In part, the Company plans
to source products upon which they can affix their own label and market as
a
private label brand. Management believes that private label merchandise will
strengthen the Company’s ability to brand and, hence, compete against retail
competitors.
The
Company also plans to increase the number of sales channels – trade show venues
- that it employs. In doing so, the Company will continue to utilize the same
successful direct sales strategy it has used, in the past, to develop these
new
sales channels. Tradeshow plans to develop these new sales channels, to increase
sales in busy metropolitan markets within Canada and the continental United
States (with a continued focus on those markets in Western Canada, Washington
State and California, which the Company currently serves) with the intent to
brand and sell the same type of products that it currently sells at tradeshow
venues. The Company also intends to offer franchised retail stores and an
eCommerce online store. To this end, our e-Commerce website will allow the
Company to (1) target a younger customer base with lower price items; (2)
promote sales and increase product branding through Internet advertising; (3)
cross sell products featured in other sales channels.
CURRENT
AND PROPOSED OPERATIONS
Sandstrom
OnTV Retail Stores -- A Current Operation.
Tradeshow
recently acquired the assets and sub-leases of two retail stores in Phoenix,
Arizona called “As Seen On TV”. The two stores are located in the Arrowhead Mall
and the Paradise Valley Mall in Phoenix. The store in the Arrowhead Mall has
been operating as “As Seen On TV” since 1997 and the store in the Paradise
Valley Mall as “As Seen On TV” since 1999.
The
two
stores that we acquired are “turnkey” and fully operational as both retail
businesses are staffed (4 full-time employees) and open for business during
regular mall hours. The Company acquired $30,149 dollars of stock and equipment
in the acquisition. The assets acquired included an inventory of “as seen
on TV Products” valued at the time of the transaction at $20,149 (based on the
products wholesale prices; the retail value is approximately double that
figure), and store fixtures, such as shelving, displays casing video
surveillance equipment, computers, a cash register and a credit card machine,
the value of which was deemed to be $10,000.
There
are
10 full-time employees.
The
approximate square footage for the Arrowhead Mall is 574 square feet and the
Paradise Valley Mall is 536 square feet.
Tradeshow
acquired sub-leases for both store locations. The Arrowhead Mall lease expires
Dec 2009 (in the Company’s 2010 fiscal year) and Paradise Valley Mall lease
expires Dec 2012 (in the Company’s 2013 fiscal year).
Name
Change: Following the acquisition, Tradeshow changed the name of the two Phoenix
stores to “Sandstrom On TV”. The Company’s Sandstrom OnTV stores feature the
same unique and diverse mix of innovative consumer products that the Company
demonstrates and sells at tradeshows.
Tradeshow’s.ontvco
e-Commerce Website -- A Current Operation.
The Company has launched an
e-Commerce website. The Company’s e-Commerce website features a mix of the small
ticket consumer products that the Company sells at its trade show demonstrations
and the products that the Company plans to feature in its land based retail
operations. Our e-Commerce website allows the Company to target a younger
customer base and to complement our marketing and branding initiatives in the
aforementioned cities where the Company has attended trade shows, malls, fairs
and exhibitions.
Our
ecommerce website implements a broad array of scalable site management, search,
customer interaction and distribution services systems that are intended to
be
used to display products, process customer orders and payments. These proposed
services and systems use a combination of commercially available, licensed
technologies, which have been customized and integrated to provide the platform
for the online store. The Company has brought on Seattle based Internet
Technologies specialist Luniel de Beer as the companies Chief Technical Officer
.The Company obtains consulting, programming, service and support in respect
of
the development and hosting of its computer hardware and managing of its online
stores.
Management
believes that the breadth and depth of its online store's product selection,
together with the flexibility of the ecommerce model will enable the Company
to
develop a significant, additional sales and marketing channel that will benefit
the Company’s overall retail strategy. Unlike store-based retail formats, the
Company's online store is expected to provide it with significant flexibility
with regard to the organization and presentation of product selection. To
encourage purchases, management intends to feature exclusive online promotions,
on a rotating basis, and to continually update merchandise recommendations.
Management intends to actively create and maintain pages that are designed
to
highlight certain products and brands, including merchandising strategies that
emphasize featured products, product bundling and special promotions.
Tradeshow’s
online store is intended to provide convenient and useful services that enhance
the shopping experience. The Company intends to strive to make its customers'
experience informative, efficient and intuitive by constantly updating and
improving its store format and features. The Company's online store intends
to
incorporate "point and click" options, supported by technical enhancements
including easy-to-use search capabilities. These features are intended to make
shopping at the store entertaining and informative and encourage purchases
and
repeat visits.
Sandstrom
OnTV Corporate Stores and The Sandstrom Franchise Strategy -- A Proposed
Operation
The
acquisition of the two Sandstrom OnTV stores in Phoenix, AZ, marks the beginning
of Tradeshow’s plan to (1) operate corporate stores and (2) to offer a
franchised retail business on a ‘stand-alone” basis or as a bundle of franchised
stores that are exclusive to a specific region. The Company’s two Sandstrom OnTV
stores will serve as the model for its franchise retail
offering.
Sandstrom
store expansion plans: Desired locations for additional corporate owned and
franchise stores include malls and highly visible, highly trafficked street
addresses. Based on managements’ twenty years of experience in the direct
selling industry, extensive product and franchising knowledge, management
believes that it can successfully devise a franchise strategy for the Company’s
store concept and sell franchise rights to its stores.
To
implement our franchise concept and strategy in Canada, we engaged Franchise
101
Incorporated to create an area franchising development strategy for the
Company’s Sandstrom stores. Mr. Norm Friend, President and sole shareholder of
Franchise 101 Incorporated, has written several books on franchising and
wrote
the Company’s manuals for franchise offerings. The manuals and the franchise
plans for Canada were completed and submitted to the Company on November
3,
2005.
We
have
retained Tim McCarthy to provide franchise consulting services in the United
States. Mr. McCarthy’s agreement is attached herewith as Exhibit 10.12, and
incorporated by reference herein.
About
Franchising
Franchising
is a popular and growing business model because it is an assembly of business
relationships that allow people to share brand identification, a proven method
of doing business and a successful marketing and distribution system. The
advantage of franchising is that the franchisee’s assets are put into a proven
business, allowing the franchisee to quickly start up their business, to
develop
a customer base faster, and to potentially experience profitability with
less
risk.
With
a
franchise business come pros and cons. The pros of the franchise are: (1)
the
business model is a based on a formula that can be demonstrated, (2) owner
transition and training is available, and (3) it is possible to review past
records and company history. The cons of franchises are: (1) purchase financing
may be difficult to find and obtain; (2) there can be significant contractual
obligations that may be difficult to meet; (3) it may be difficult to find
the
right franchise opportunity.
Private
Label Brands - A Proposed Operation
Tradeshow
is a product development and consumer specialty retail company whose mandate
is
to develop proprietary and private label products that have mass appeal at
popular price points. Initially, Tradeshow intends to market products that
are
readily available via the supply channels that it has used since the Company’s
inception in December 03, 2003; the very same supply channels that management
has developed over the past twenty years. Tradeshow intends to source products
that it can affix “Sandstrom” labels to and distribute under the Sandstrom name,
the brand name of the Company’s retail stores in Phoenix, AZ, to ensure better
quality and higher profits for the Company.
Our
philosophy is to sell products that are quality-manufactured to our
specifications. To execute our planned strategy, we will engage the services
of
industry experts who can source and supply products that Tradeshow can market
as
“private label”, that is, products to which the Company can affix its own brand
labels. The Company plans to utilize said “experts” to advise the Company about
how to obtain the best combination of price and quality for the proposed private
label branded products. The Company is currently investigating and qualifying
the manufacturing details for a number of private label products that it intends
to sell in the coming months.
The
Company believes that addition of private label brands is a direct way to
improve product offerings and increase bottom line revenues. Management believes
that many organizations with business plans that are similar to the Company’s
disregarded this important and potentially profitable strategy of the
merchandising and direct sell process. Management believes that private label
merchandise offers greater pricing power, which can be diminished by lower
sales
margins typically available from highly popular and competitively priced
products.
Tradeshow’s
Marketing Plan
The
Company’s product categories include specialty household, beauty and fitness,
home and garden, and electronics products. These products are generally small
ticket items, have universal appeal, are innovative and are desired by the
target audience. Price points for our products typically start in the $50 range.
Tradeshow’s average target demographic is in the $50,000 - $100,000 annual
income range.
Since
our
inception in 2003, Tradeshow has established a prominence in Western Canada,
and
a foothold in the US Pacific Northwest, California and Arizona, expanding its
market reach via trade show demonstrations. In each of these markets, Tradeshow
plans to market proprietary and private label products through the Company’s
current and proposed sales channels. Tradeshow plans to source its own private
label brands for distribution to improve product quality and to potentially
generate higher profits for the Company.
Our
marketing strategy is designed to help us to continue to establish our business
in Western Canada, Washington State, California and Arizona, and to help us
grow
our consulting and marketing initiatives through the participation of
businesses, large and small, which are based in these regional markets.
Part
of
Tradeshow’s strategy is to manage low cost, effective sales organizations that
can distribute product as efficiently as possible through the regional trade
show marketplace. This will be accomplished through commission incentives to
our
marketing team. Sales demonstrators can also be used as a referral point of
contact, thereby guiding new clients to the Company’s head office. Management
will also promote the Company’s marketing services and direct sales expertise to
large national firms, to aid them with their sales and marketing agendas at
the
trade show level.
In
conjunction with our attendance at trade shows, malls and fairs, Tradeshow
will
increasingly employ the Internet to establish the Company’s brand and create
greater awareness about its line of products and consulting services.
Management’s objective is to grow the Company's market position and expand its
customer base through superior merchandising, targeted marketing and strong
relationships with leading manufacturers, distributors and suppliers. We plan
to
increasingly use the Internet in the development and expansion of the Company’s
business operations. To this end, we have launched our ecommerce web
site.
Our
financially prudent, management intends to constantly expand brand name product
offerings to create a brand driven destination for quality, unique products.
Management believes that by offering a broader selection of private label,
brand
name products the Company may be better positioned to increase sales, encourage
repeat purchases and expand its customer base.
Management
will focus the Company’s branding campaign on selection, convenience, value,
trust and service and brand products according to these features by employing
targeted marketing, such as magazine ads, Internet mail and direct mail drops.
Management will also seek to provide leading manufacturers and distributors
with
a powerful new distribution channel that is consistent with their brand identity
via the direct sales channel at trade shows.
Tradeshow’s
goal is to be the retailer of choice for leading manufacturers, distributors
and
suppliers. The Company strives to create, maintain and strengthen relationships
with manufacturers and suppliers as it continues to increase the number of
products that it offers. To this end, management continues to add new product
categories, increase product selection, add new customers, promote repeat
purchases and develop new sales opportunities. In addition, management continues
to pursue new market opportunities by establishing strategic alliances via
the
acquisition of complementary businesses, products and technologies, in order
to
grow and strengthen their business.
Marketing
Strategies
Management
will continue to develop a targeted marketing and promotion strategy to build
brand recognition in the US and Canada, increase customer traffic, promotion
of
new products, encourage repeat purchases and build strong customer loyalty.
The
Company's marketing and promotional activities target customer demographics
that
are more likely to buy product at tradeshow demonstrations. These strategies
include both offline (advertising in traditional media) and online (Internet
based) advertising.
Management
intends to establish agreements for targeted banner advertisements with major
Internet content and service providers for the promotion of trade show
activities and the Company’s e-Commerce website. We also intend to optimize our
e-Commerce website with the latest search engine optimization (SEO) strategies
to ensure top keyword positioning in popular search engines.
Also
known as pay for performance or search advertising, pay per click advertising
enables advertisers’ adverts to appear on a search engine’s “results pages”. The
position of the adverts is decided on a bidding system with advertisers paying
more to be positioned at the top of the page. The higher the bid per key word,
the higher the ranking the Company can get on a page, which allows users to
view
product from our site more frequently. Payment is then made at this rate every
time someone clicks on the link in the advert, when it takes them through to
the
advertiser's website. In other words, you only pay if a person clicks on a
link
or banner and lands on your site.
Management
plans to use direct marketing via the Internet to promote new client
acquisitions, product demonstrations and sales. Management will strive to
deliver meaningful offers to customers via e-mail. In addition, management
intends to publish an opt-in online newsletter delivered by e-mail to
subscribers in which will highlight new product developments, special
promotions, sales items and product promotions.
Trade
Show proposes to brand its name worldwide using an innovative email technique.
Viral marketing describes any strategy that encourages individuals to pass
on a
marketing message to others, creating the potential for exponential growth
in
the message's exposure and influence. This strategy takes advantage of rapid
multiplication to explode the message to thousands and possibly
millions.
Tradeshow
proposes to use affiliate partner marketing programs to attract traffic to
its
website. An affiliate is a person or entity that places a banner or text link
on
their site directing visitors to the Tradeshow website. As a visitor
clicks-through, a cookie (a small text file containing the referring affiliate's
identification number assigned by Tradeshow) will be placed on the visitor's
browser. If the visitor purchases product or services from Tradeshow’s website,
the ordering system and affiliate's software work together to attach the
referring affiliate's identification number held in the cookie to the sale,
and
uses that information to credit the affiliate with the proper commission for
the
referral.
The
Company employs offline advertising to promote both brand and specific
merchandising opportunities. The Company's plan is to continue to utilize cost
effective forms of traditional offline advertising, including magazine
advertising and direct mail drops, to build brand recognition.
Editorial
articles in magazines and newspapers that cater to home, garden, boat and auto
shows, state and county fairs, and annual exhibitions, can expose the Company
to
a wider audience. The Company plans to use print media for advertising in
local communities where target demographics are appropriate and demand for
the
type of products that the Company sells is strong.
The
Company plans to use targeted mail lists and direct mail drops to advertise
its
services and products.
Competitive
Business Conditions and Competitors
The
direct sales market is new, rapidly evolving and intensely competitive.
Management expects to face stiff competition in every product category. Barriers
to entry are minimal and current and new competitors, who may have greater
expertise and greater resources, can start competitive business operations
at a
relatively low cost.
Management
potentially will compete with a variety of competitors, including the
following:
|
·
|
Traditional
retailers of proprietary and private label products for the home
and
office environments, who may compete with both an online and offline
presence;
|
|
·
|
Manufacturers
of proprietary and private label products for the home and office
environments that decide to sell directly to end-customers, either
through
physical retail outlets or through an online
store;
|
|
·
|
Other
online retailers proprietary and private label products for the
home and
office environments, including online service providers that feature
shopping services; and
|
|
·
|
The
catalog, direct mail and multi-level marketing retailers of proprietary
and private label products for the home and office environments.
|
There
are
two public companies that have built large and profitable companies in a market
niche that is similar to Tradeshow’s. Tradeshow’s two leading competitors are
Brookstone Inc. and Sharper Image.
Brookstone
Inc. –(formerly public under Symbol - BKST: NASDAQ) Brookstone, Inc. is a
retailer that operates over 275 Brookstone brand stores nationwide and in Puerto
Rico. Stores are typically located in high-traffic regional shopping malls,
lifestyle centers and airports. The Company also operates three stores under
the
Gardeners Eden brand, and a Direct-Marketing business that consists of three
catalog titles -- Brookstone, Hard-to-Find-Tools and Gardeners
Eden.
The
Sharper Image - Symbol - SHRP: NASDAQ Sharper Image is a specialty retailer
with
over 180 Sharper Image specialty stores throughout the United States. The
Company's principal selling channels include; stores, a monthly catalog and
its
primary Website. The Company also sells its products through its own
online auction Website and an online Outlet store to help manage refurbished
and
close out inventory. The Company also has business-to-business sales teams
for
marketing its products for corporate incentive and reward
programs.
Management
believes that the following are the principal competitive factors in the
Company's proposed market: brand recognition; selection; convenience; order
delivery performance; customer service; site features, content; price and
quality.
Many
potential competitors can devote substantially more resources to business
development than can the Company. In addition, larger, well-established and
well-financed entities may acquire, invest in or form joint ventures with other
competitors.
Certain
of the Company's competitors may be able to secure products from vendors on
more
favorable terms, fulfill customer orders more efficiently and adopt more
aggressive pricing or inventory availability policies than can the Company.
Given
the
fact that the Company has a limited operating history, many of the Company's
competitors have significantly greater experience in the retail of proprietary
and private label products for the home and office environments.
The
Company's online competitors are particularly able to use the Internet as a
marketing medium to reach significant numbers of potential customers. Finally,
new technologies and the expansion of existing technologies, such as price
comparison programs that select specific titles from a variety of websites
may
direct customers to competitor sites.
Principal
Suppliers
Tradeshow
features over 150 products that it sources from a long list of suppliers and
wholesalers. Trade Show does not rely solely on one supplier or wholesaler
to
source our products. Rather, the Company sources product from many different
suppliers. Our strategy is to purchase our products from many different name
brand suppliers who manufacturer or contract out the manufacture of their own
products to ensure quality and a wide variety of product choice. Examples of
suppliers and the product that we sell include:
|
·
|
Ontel
Products: “As Seen On TV” products that include the Swivel Sweeper, Glass
Wizard and AB Master;
|
|
·
|
American
Direct (TriStar): product supplied includes the Lateral Thigh Trainer
and
Jack Lalanne’s Power Juicer;
|
|
·
|
Cava
Industries: supplies the Cold Heat Soldering Tool and Smart Spin
containers;
|
|
·
|
ITW
Space Bags: supplies Space Bags for
storage;
|
|
·
|
Orange
Glow International: suppliers of cleaning products OxiClean, Orange
Glo,
and Kaboom, among others;
|
|
·
|
Overbreak:
supplies toys that include Hover Disc, Hover Copter and Rainbow
Art.
|
Tradeshow
has a history of selling products from these suppliers. Our objective is to
continue to acquire products that are both contemporary and popular, via our
network of wholesalers and exclusive distributors, and resell them at
competitive prices with the intent to generate a profit.
The
Company obtains its products from brand suppliers, and a network of
distributors, manufacturers, brokers and wholesalers. Management's efforts
are
ongoing to expand the number of direct relationships with manufacturers,
suppliers, brokers, distributors and wholesalers in all relevant product
categories. The Company does not have written agreements in place with any
distributors that guarantee a discount or pricing preference.
Although
we source and buy product from more than one supplier, we still rely on a finite
number of suppliers to make the products that we sell available to us, at our
request and on relatively short notice. As such, our supply chain is potentially
subject to disruptions, which could cause a cessation in our business. Delays
and disruptions due to supply problems could impair our ability to satisfy
customers, generate revenue and conduct our business.
Moreover,
we do not have exclusive rights for the products that we sell and so we face
competition across all categories and are potentially vulnerable to supply
shortages that could result therefrom. Our inability to hold sole or exclusive
distribution rights for our products could potentially lead to supply shortages
of the products that we sell and could impair our ability to satisfy our
customers, generate revenue and conduct our business.
Tradeshow
does not directly manufacture any of the products that the Company sells.
Because we generate our revenue from the sales of goods via direct sell
marketing, we do not need to purchase raw materials for the manufacture of
the
products we sell. As such, we depend on our suppliers to stock the products
that
we sell.
Customers
As
a
specialty product branding and retail company, Tradeshow does not depend on
one
or a few major customers to sustain or grow its business. Tradeshow sells
products to a growing and diversified range of clientele. As such,
Tradeshow is not sensitive to the loss of a few customers or any one specific
customer; yet, the Company continually strives to establish strong customer
relations and complete client satisfaction. As a part of its long-term business
strategy, the Company plans to execute a comprehensive marketing and sales
strategy so that it may continue to add to build its client base and grow
revenues. (see “Marketing Strategy” above)
We
acknowledge that our success is substantially dependent on the establishment
of
new customers and the growth of our customer base. Accordingly, we recognize
that our ability to attract new customers will depend on a variety of factors,
including the quality and affordability of the products and services we offer,
as well as our ability to effectively market our products and services. If
we
fail to increase our customer base and generate repeat and expanded business
from our current customers, our business and operating results would be
seriously harmed.
Trademarks,
Copyrights, Patents
All
source materials on Tradeshow’s planned Internet e-Commerce website will be
copyrighted content. Unauthorized use of the content found on Trade Show’s
website is prohibited.
The
Company recognizes that the legal protection afforded by a copyright or
registered trademark is limited. Despite our efforts to protect our proprietary
rights, unauthorized parties may attempt to copy aspects of our products or
to
obtain and use our proprietary information. Litigation may be necessary to
enforce our intellectual property rights, to protect our trade secrets and
to
determine the validity and scope of the proprietary rights of others. Such
litigation could result in substantial costs and diversion of resources and
could significantly harm our business and operating results.
Management
has engaged trademark, copyright and patent experts and attorneys regarding
products it intends to develop, but is not certain how its business may be
affected by the application of existing laws governing issues such as property
ownership, copyrights, trademarks and other intellectual property issues of
its
Internet operations. The vast majority of these laws were adopted prior to
the
advent of the Internet. As a result, they do not contemplate or address the
unique issues of the Internet and related technologies. Changes in laws that
are
intended to address these issues could create uncertainty in the Internet market
place. This uncertainty could reduce demand for the Company's services or its
cost of doing business may increase as a result of litigation costs or increased
service delivery costs. (See additional “RISK” factors below)
Governmental
Approval
At
present, Tradeshow does not need to obtain governmental approval to market
and
sell products, including the Company’s plan to sell products at tradeshows, mall
and over the Internet. Trade show marketing and sales, and e-Commerce and
Internet retail is not a government regulated industry, but is subject to the
laws and regulations generally applicable to businesses and directly applicable
to offline and online commerce. Notably, Tradeshow promotes best practices
and
ethical business conduct in relation to the Company’s corporate culture and its
day-to-day operations.
Tradeshow
is not currently subject to direct federal, state or local regulation other
than
regulations applicable to businesses generally and directly applicable to
businesses and online commerce. However, when the Company initiates sales via
its e-Commerce Internet site, and as Internet use gains popularity, it is
possible that a number of laws and regulations may be adopted with respect
to
the Internet, which may cover issues such as user privacy, freedom of
expression, pricing, content and quality of products and services, taxation,
advertising, intellectual property rights and information security. Furthermore,
the growth of online commerce may prompt calls for more stringent consumer
protection laws.
Management
does not contemplate providing personal information regarding the Company's
customers to third parties. However, the adoption of additional consumer
protection laws could create uncertainty in Web usage and reduce the demand
for
the Company's products and services.
Management
is not certain how its business may be affected by the application of existing
laws governing issues such as property ownership, copyrights, encryption and
other intellectual property issues, taxation, libel and export or import
matters. The vast majority of these laws were adopted prior to the advent of
the
Internet. As a result, they do not contemplate or address the unique issues
of
the Internet and related technologies. Changes in laws that are intended to
address these issues could create uncertainty in the Internet market place.
This
uncertainty could reduce demand for the Company's services or its cost of doing
business may increase as a result of litigation costs or increased service
delivery costs.
In
addition, because the Company's services are intended to be made available
over
the Internet in multiple states and foreign countries, other jurisdictions
may
claim that the Company is required to qualify to do business in that state
or
foreign country. The Company's failure to qualify in a jurisdiction where it
is
required to do so could subject it to taxes and penalties. It could also hamper
the Company's ability to enforce contracts in these jurisdictions. The
application of laws or regulations from jurisdictions whose laws do not
currently apply to the business could have a material adverse effect on the
business, results of operations and financial condition.
Business
Development Costs
Management
intends to recoup business development costs over the normal course of future
business activity.
Compliance
with Environmental Laws
Tradeshow
is not impacted by the costs and effects of compliance with environmental laws,
other than the laws and regulations generally applicable to businesses.
Tradeshow operates with a high level
of
respect for and promotes the protection of the environment, and is not aware
of
circumstances that would create any significant financial responsibility for
environmental matters.
Employees
We
do not
expect significant changes in the number of people we employ over the next
twelve months. The Company currently has 4 full-time employees who work in
the
Company’s two retail stores in Phoenix, Arizona, and 3 full-time consultants.
The Company plans to hire additional staff, on an as needed basis, in the event
that the Company acquires additional corporate owned retail stores. However,
in
the event that we do not acquire additional corporate stores, then we will
not
be hiring additional employees. The Company plans to hire individuals on a
consultancy basis to oversee the Company’s Sandstrom franchise operations, on an
as needed basis, provided the level of sales of franchises warrants the hire
of
consultants. Franchisees will be responsible for the hire of their own sales
staff.
Reports
to Security Holders
We
are
not currently required to deliver an annual report to security holders.
None will be provided until such time as one is required.
The
Company has not previously filed reports with the Securities and Exchange
Commission, nor with any other securities regulator.
Copies
of
this, and all future reporting materials filed with the SEC may be obtained
at
the SEC's Public at 100 F Street, N.E., Washington, D.C. 20549 and/or obtain
information on the operation of the Public Reference Room by calling the SEC
at
1-800-SEC-0330. In addition, the Company intends to be an electronic filer
and
as such, all items filed by the Company are available through an Internet site
maintained by the SEC which contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the SEC,
which site is available at
http://www.sec.gov
. The contents of these are
not incorporated into this filing. Further, the Company's references to the
URLs
for these are intended to be inactive textual references only.
RISKS
The
Company has a limited operating history upon which to base an evaluation of
the
business and prospects. Our business and prospects must be considered in light
of the risks, expenses and difficulties frequently encountered by companies
in
an early stage of development, particularly companies in new and rapidly
evolving markets, including online commerce. As a result of our limited
operating history, it is difficult to accurately forecast net sales and
management has limited historical financial data upon which to base planned
operating expenses. Management based our current and future expense levels
on
operating plans and estimates of future net sales. Sales and operating results
are difficult to forecast because they generally depend on the volume and timing
of the orders received, which is uncertain. As a result, management may be
unable to adjust its spending in a timely manner to compensate for any
unexpected revenue shortfall. This inability could cause potential losses from
operations for a given period to be greater than expected.
There
is
a possibility that FUTURE LOSSES AND NEGATIVE CASH FLOW MAY OCCUR, WHICH
MAY
LIMIT OR DELAY THE ABILITY TO BECOME PROFITABLE. Since incorporation, the
Company has expended resources on technology, website development, hiring
of
personnel and startup costs. Because the Company expects to incur additional
costs and expenses related to: brand development, marketing and other
promotional activities; the expansion of fulfillment operations, which includes
supply procurement, order receipt, packaging and shipment; the continued
development of the website, systems and staff; the expansion of product
offerings and website content; and development of relationships with strategic
business partners. The Company's ability to be profitable depends on its
ability
to generate sufficient net sales while maintaining reasonable expense levels.
The Company cannot be certain that it will be able to sustain net sales at
the
level required to achieve profitability on a quarterly or annual basis in
the
future.
FLUCTUATIONS
IN NET SALES CAN CAUSE QUARTERLY RESULTS TO FLUCTUATE AND COULD CAUSE ANNUAL
RESULTS TO BE BELOW EXPECTATIONS. A number of factors will cause gross margins
to fluctuate in future periods, including the combinations of products sold,
marketing and supply decisions, inbound and outbound shipping and handling
costs, the level of product returns and the level of discount pricing and
promotional coupon usage. Any change in one or more of these factors could
reduce gross margins in future periods. Management expects to experience
fluctuations in net sales that will cause quarterly fluctuations in operating
results. Due to the fact that the Company has a limited operating history,
it is
always difficult to predict the future sales patterns. If net sales are below
expectations during any given quarter, annual operating results could be below
the expectations of securities analysts and investors. In the event this occurs,
the trading price of the common stock may decline
significantly.
INABILITY
TO OBTAIN SUFFICIENT QUANTITIES OF KEY PRODUCTS, NET SALES COULD DECREASE.
If
the Company is not able to offer its customers a sufficient supply and selection
of products in a timely manner, it could lose customers and net sales could
be
below expectations. Success depends on the ability to purchase products in
sufficient quantities at competitive prices. As is common in the industry,
the
Company expects not to have long-term or exclusive arrangements with any
manufacturer, distributor or broker that guarantee the availability of products
for resale. From time to time, the Company may have trouble obtaining sufficient
allocations of key products. In addition, key suppliers may have established
and
may expand their own retailing efforts, which may impact the ability to get
sufficient product allocations from suppliers. Therefore, there is no
predictable or guaranteed supply of products.
OUR
ABILITY TO COMPETE SUCCESSFULLY AGAINST CURRENT AND FUTURE COMPETITORS. The
tradeshow industry is new, rapidly evolving and intensely competitive.
Management expects competition to intensify in the future because barriers
to
entry are low, and current and new competitors can enter the market at a
relatively low cost and with little difficulty. Increased competition is likely
to result in price pressure, reduced gross margins and loss of market share,
any
of which could seriously harm net sales and operating results. The Company
potentially competes with a variety of other companies, including: traditional
retailers, which may compete with both an online and offline presence
Many
of
the competitors have longer operating histories, larger customer or user bases,
greater brand recognition and significantly greater financial, marketing and
other resources than does the Company. Many of these current and potential
competitors can devote substantially more resources to marketing, merchandising
and systems development than can the Company. In addition, larger,
well-established and well-financed entities may acquire, invest in or form
joint
ventures with our competitors.
INABILITY
TO BUILD AWARENESS OF THE TradeShow Marketing Company Ltd.’S BRAND MAY PROHIBIT
THE COMPANY FROM COMPETING EFFECTIVELY AGAINST COMPETITORS WHO HAVE GREATER
NAME
RECOGNITION AND SALES COULD BE ADVERSELY AFFECTED. If the Company is unable
to
economically achieve or promote and maintain its brand, its business, results
of
operations and financial condition could suffer. Management believes that the
importance of brand recognition will increase as more companies engage in
commerce over the Internet. Development and awareness of our brand will depend
largely on the Company's success in increasing its customer base. If the leading
brands do not perceive the Company as an effective marketing and sales channel
for their merchandise, or consumers do not perceive the Company as offering
a
desirable way to purchase merchandise, the Company may be unsuccessful in
promoting and maintaining its brand. Furthermore, in order to attract and retain
customers and to promote and maintain its brand in response to competitive
pressures, management plans to gradually increase the Company's marketing and
advertising budgets and otherwise to increase substantially its financial
commitment to creating and maintaining brand loyalty among vendors and
consumers.
INTELLECTUAL
PROPERTY CLAIMS AGAINST THE COMPANY CAN BE COSTLY AND COULD IMPAIR BUSINESS.
Other parties may assert infringement or unfair competition claims against
the
Company in the event the Company unintentionally sells a product that is a
“knock off” (an unauthorized copy or imitation of a product) or manufactures a
private label product, and unintentionally infringes on the intellectual
property of another company, organization or individual. Management cannot
predict whether we will do so, or whether any future assertions or prosecutions
will harm the business. If the Company is forced to defend against any
infringement claims, whether they are with or without merit or are determined
in
the Company's favor, then the Company may face costly litigation, diversion
of
technical and management personnel, or product shipment delays. Further, the
outcome of a dispute may be that management would need to enter into royalty
or
licensing agreements. Royalty or licensing agreements, if required, may be
unavailable on terms acceptable to management, or may just be unavailable.
Our
policy is to ensure that all of the products that we sell are original and
do
not infringe on a copyright or a trademark. We will not knowingly sell an
unauthorized copy or imitation of a product. Despite our efforts and diligence,
there is a possibility that we may unknowingly, unwittingly and unintentionally
feature and sell a product that infringes on a copyright or patent. Management
cannot predict whether we will do so, or whether any future assertions or
prosecutions will harm the business.
IF
THE
PROTECTION OF PROPOSED TRADEMARKS AND PROPRIETARY RIGHTS IS INADEQUATE, BRAND
AND REPUTATION COULD BE IMPAIRED AND CUSTOMERS COULD BE LOST. The Company
intends to take steps to protect proprietary rights, which steps may be
inadequate. Management regards copyrights, service marks, trademarks, trade
dress, trade secrets and similar intellectual property as critical to its
success. The Company intends to rely heavily on trademark and copyright law,
trade secret protection and confidentiality or license agreements with our
employees, customers, partners and others to protect proprietary rights.
Effective trademark, service mark, copyright and trade secret protection may
not
be available in every country in which the Company intends to sell its products
and services online. Furthermore, the relationship between regulations governing
domain names and laws protecting trademarks and similar proprietary rights
is
unclear. Therefore, the Company may be unable to prevent third parties from
acquiring domain names that are similar to, infringe upon or otherwise decrease
the value of intended trademarks and other proprietary
rights.
THE
LOSS
OF THE SERVICES OF ONE OR MORE OF OUR KEY PERSONNEL, OR A FAILURE TO ATTRACT,
ASSIMILATE AND RETAIN OTHER HIGHLY QUALIFIED PERSONNEL IN THE FUTURE, COULD
DISRUPT OPERATIONS AND RESULT IN LOSS OF NET SALES. The Company's future
performance will depend on the continued services of its management and key
personnel and the ability to attract additional management and key personnel.
The loss of the services of one or more of the key personnel could seriously
interrupt business. Management depends on the continued services and performance
of the senior management and other key personnel. The future success also
depends upon the continued service of the executive officers and other key
sales, marketing and support personnel.
OUR
DEPENDENCE ON INCREASING USE OF THE INTERNET AND ON THE GROWTH OF ONLINE
COMMERCE. The Company's future revenues substantially depend upon the increased
acceptance and use of the Internet and other online services as a medium of
commerce. Rapid growth in the use of the Internet and online commerce is a
recent phenomenon. As a result, acceptance and use may not continue to develop
at historical rates and a sufficiently broad base of customers may not adopt,
and/or continue to use, the Internet and online services as a medium of
commerce. Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty and there
exist few proven services and products.
In
addition, the Internet may not be accepted as a viable long-term commercial
marketplace for a number of reasons, including potentially inadequate
development of the necessary network infrastructure or delayed development
of
enabling technologies and performance improvements. If the Internet continues
to
experience significant expansion in the number of users, frequency of use or
bandwidth requirements, the infrastructure for the Internet may be unable to
support the demands placed upon it. In addition, the Internet could lose its
viability as a commercial medium due to delays in the development or adoption
of
new standards and protocols required to handle increased levels of Internet
activity, or due to increased governmental regulation. Changes in, or
insufficient availability of, telecommunications services to support the
Internet also could result in slower response times and adversely affect usage
of the Internet generally.
The
Company's business, financial condition and results of operations would be
seriously harmed if: use of the Internet and other online services does not
continue to increase or increases more slowly than expected; the infrastructure
for the Internet and the Company’s systems infrastructure does not effectively
support expansion that may occur; the Internet and other online services do
continue to be a viable commercial marketplace; or traffic to the website
decreases or fails to increase as expected or if management spends more than
was
expected to attract visitors to the website.
REQUIREMENTS
TO CHANGE THE MANNER IN WHICH THE COMPANY CONDUCTS BUSINESS IF GOVERNMENT
REGULATION INCREASES. The adoption or modification of laws or regulations
relating to the Internet could adversely affect the manner in which the Company
proposes to conduct its business. In addition, the growth and development of
the
market for online commerce may lead to more stringent consumer protection laws,
both in the United States and abroad, that may impose additional burdens on
the
Company. Laws and regulations directly applicable to communications or commerce
over the Internet are becoming more prevalent. The United States Congress has
enacted Internet laws regarding children's privacy, copyrights, taxation and
the
transmission of sexually explicit material. The European Union recently enacted
its own privacy regulations. Laws regulating the Internet, however, remain
largely unsettled, even in areas where there has been some legislative action.
It may take years to determine whether and how existing laws such as those
governing intellectual property, privacy, libel, and taxation apply to the
Internet.
In
order
to comply with new laws regulating online commerce, the Company may need to
modify the manner in which it proposes to do business, which may result in
additional expenses. For instance, new laws may require that the Company modify
or change the way it represents and/or advertises products on its eCommerce
web
site to comply with the applicable new laws. The Company may need to spend
time
and money revising the process by which it intends to fulfill customer orders
to
ensure that each shipment complies with the applicable new laws. The Company
may
need to hire additional personnel to monitor compliance with the applicable
new
laws. The Company may also need to modify its software to further protect
customers' personal information
LIABILITY
FOR THE INTERNET CONTENT THAT IS PUBLISHED. As a publisher of online content,
the Company faces potential liability for defamation, negligence, copyright,
patent or trademark infringement, or other claims based on the nature and
content of materials that it publishes or distributes. If the Company faces
liability, then its reputation and its business may suffer. In the past,
plaintiffs have brought these types of claims and sometimes successfully
litigated them against online companies. In addition, the Company could be
exposed to liability with respect to the unauthorized duplication of content.
Although the Company intends to carry general liability insurance, such
insurance may not cover claims of these types. The Company cannot be certain
that it will be able to obtain insurance to cover the claims on reasonable
terms
or that it will be adequate to indemnify the management or the Company for
all
liability that may be imposed. Any imposition of liability that is not covered
by our insurance or is in excess of insurance coverage could harm the business.
in the event the Company unintentionally uses a registered name or other
copyrighted or trademarked material, such as the unauthorized or unintentional
duplication of content.
INABILITY
TO MEET FUTURE CAPITAL REQUIREMENTS. The Company cannot be certain that
additional financing will be available on favorable terms when required, or
at
all. If the Company raises additional funds through the issuance of equity,
equity-related or debt securities, the securities may have rights, preferences
or privileges senior to those of the rights of the common stock and those
stockholders may experience additional dilution. Management currently
anticipates that the private financing done to date, together with expected
revenues, will be sufficient to meet anticipated needs for working capital
and
capital expenditures through at least the next 12 months. After that, the
Company may need to raise additional funds.
THE
COMMON STOCK PRICE MAY BE VOLATILE, WHICH COULD RESULT IN SUBSTANTIAL LOSSES
FOR
INDIVIDUAL STOCKHOLDERS. The market price for the Company's common stock is
likely to be highly volatile and subject to wide fluctuations in response to
factors including the following, some of which are beyond the Company's control:
actual or anticipated variations in the quarterly operating results;
announcements of technological innovations or new products or services by the
Company or its competitors; changes in financial estimates by securities
analysts; conditions or trends in the Internet and/or online commerce
industries; changes in the economic performance and/or market valuations of
other online commerce or retail companies; announcements by management or
competitors of significant acquisitions, strategic partnerships, joint ventures
or capital commitments; additions or departures of key personnel; and potential
litigation.
In
addition, the stock market has from time to time experienced extreme price
and
volume fluctuations. These broad market fluctuations may adversely affect
the
market price of the Company's common stock.
DUE
TO
STOCK PRICE VOLATILITY, THE COMPANY COULD FACE A SECURITIES CLASS ACTION
LAWSUIT. In the past, following periods of volatility in the market price
of
their stock, many companies have been the subject of securities class action
litigation. If the Company was sued in a securities class action, it could
result in substantial costs and a diversion of management's attention and
resources and would cause the stock price to fall.
The
decision to pay dividends, if any, will be at the discretion of the Company’s
Board of Directors. YOU MAY HAVE TO LOOK TO PRICE APPRECIATION ALONE
FOR ANY RETURN ON YOUR INVESTMENT. Some investors
favor companies that pay dividends, particularly in general downturns in
the
stock market. We have not declared or paid any cash dividends on our
common stock. We currently intend to retain any future earnings for
funding growth, and we have no immediate plans at this time to pay a dividend.
Because we may not pay dividends, your return on this investment likely
depends
on your selling our stock at a profit.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. We are currently not exposed
to
any significant financial market risks from changes in foreign currency
exchange
rates or changes in interest rates and do not use derivative financial
instruments. All of our revenue and capital spending is transacted in U.S.
and
Canadian dollars. However, in the future, we may enter into transactions
in
other currencies. An adverse change in exchange rates would result in a
decline
in income before taxes, assuming that each exchange rate would change in
the
same direction relative to the U.S. and Canadian dollars. In addition to
the
direct effects of changes in exchange rates, such changes typically affect
the
volume of sales or foreign currency sales price as competitors' products
become
more or less attractive.
Shares
of
our common stock may be "penny stocks”. Risks Associated with Penny Stock
Classification: The Company’s stock is subject to
"penny stock" rules as defined in 1934 Securities and
Exchange Act rule 3151-1. The Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks".
Penny
stocks are generally equity securities with a price of less than $5.00
(other
than securities registered on certain national securities exchanges or
quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange
or
system).
The
penny
stock rules require a broker-dealer, prior to a transaction in a penny
stock not
otherwise exempt from those rules, deliver a standardized risk disclosure
document prepared by the Commission, which (i) contained a description
of the
nature and level of risk in the market for penny stocks in both public
offerings
and secondary trading; (ii) contained a description of the broker's or
dealer's
duties to the customer and of the rights and remedies available to the
customer
with respect to violation to such duties or other requirements of Securities'
laws; (iii) contained a brief, clear, narrative description of a dealer
market,
including "bid" and "ask" prices for penny stocks and significance of the
spread
between the "bid" and "ask" price; (iv) contains a toll-free telephone
number
for inquiries on disciplinary actions; (v) defines significant terms in
the
disclosure document or in the conduct of trading in penny stocks; and (vi)
contains such other information and is in such form (including language,
type,
size and format), as the Commission shall require by rule or regulation.
The
broker-dealer also must provide, prior to effecting any transaction in
penny
stock, the customer (i) with bid and offer quotations for the penny stock;
(ii)
the compensation of the broker-dealer and its salesperson in the transaction;
(iii) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market
for
such stock; and (iv) month account statements showing the market value
of each
penny stock held in the customer's account.
In
addition, the penny stock rules require that prior to a transaction in
a penny
stock not otherwise exempt from those rules, the broker-dealer must make
a
special written determination that the penny stock is a suitable investment
for
the purchaser and receive the purchaser's written acknowledgment of the
receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitably statement.
These
disclosure requirements may have the effect of reducing the trading activity
in
the secondary market for a stock that becomes subject to the penny stock
rules.
If any of the Company's securities become subject to the penny stock rules,
holders of those securities may have difficulty selling those securities.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Nature
of Business
The
Tradeshow Marketing Company (“Tradeshow”) commenced business operations on
December 03, 2003. The Company conducts all operations through its
wholly owned subsidiary, Sandstrom ONTV Company, which was incorporated
under
the laws of the State of Nevada on March 15, 2007.
Over
the
past twenty years, Tradeshow’s management team and demonstration professionals
have worked in the direct sales industry, directly marketing a variety
of
products to consumers at trade shows, malls (kiosks), fairs and exhibitions
throughout Canada and the United States. The Company’s product categories
include specialty household, beauty and fitness, home and garden and electronics
products. The products we retail are generally small ticket items, are
innovative, and desired by the target audience. Price points for our products
typically start in the $50 range and our target demographic is in the $50,000
-
$100,000 annual income range.
Products
from various suppliers that we have sold in the past
included:
|
·
|
Ontel
Products: “As Seen On TV” products that include the Swivel Sweeper, Glass
Wizard and AB Master;
|
|
·
|
American
Direct (TriStar): product supplied includes the Lateral Thigh Trainer
and
Jack Lalanne’s Power Juicer;
|
|
·
|
Cava
Industries: supplies the Cold Heat Soldering Tool and Smart Spin
containers;
|
|
·
|
ITW
Space Bags: supplies Space Bags for
storage;
|
|
·
|
Orange
Glow International: suppliers of cleaning products OxiClean, Orange
Glo, and Kaboom, among
others;
|
|
·
|
Overbreak:
supplies toys that include Hover Disc, Hover Copter and Rainbow
Art.
|
Sales
volumes for products fluctuate. No one particular product represents a material
portion of our revenues for the entire fiscal year. Rather, annual gross
sales
are derived from numerous products, with eight to ten feature products, on
average, being the biggest sellers.
For
the
period ended May 31, 2006 the bulk of our sales revenue (79%) came from our
retail stores. Our Internet sales commenced in February 2006 and have
experienced moderate growth, comprising 11% of total sales for the 4
month period from Feb 1, 2006 to May 31, 2006. Sales from tradeshows have
remained fairly similar to the previous year and comprised 10% of total sales
for 2006.
Measures
Tradeshow has taken to build infrastructure
To
date,
Tradeshow has sold product at a number of venues that includes trade shows,
malls (kiosks) fairs, exhibitions in the following cities: Canada: Vancouver,
Abbotsford, Victoria, Nanaimo (includes mall kiosks), Calgary, Edmonton, Regina,
Saskatoon, Winnipeg, Toronto (every second year); United States: Puyallup,
WA,
Tacoma, WA, Pomona, CA, Phoenix AZ
On
July
20, 2005, Tradeshow acquired the assets and sub-leases of two retail stores
in
the Arrowhead and Paradise Valley Malls in Phoenix, Arizona. Following the
acquisition, the Company changed the name of the two stores to “Sandstrom OnTV”.
The Company’s Sandstrom OnTV stores feature a unique and diverse mix of
innovative consumer products, which includes the same merchandise that the
Company demonstrates and sells at tradeshow venues, and on the company
website.
Acquisition
of productive assets
The
acquisition of the two retail stores was an acquisition of productive assets,
as
the Company purchased the assets of, and assumed the sub-leases for, both
retail businesses. The Company also received the rights to use the “As Seen On
TV” trade name for the stores, but has decided to use the name Sandstrom OnTV”
instead. The Company acquired $30,149 dollars of inventory and equipment in
the
acquisition. The assets acquired included an inventory of “as seen on TV”
like products valued at the time of the transaction at $20,149 (based on the
products wholesale prices; the retail value is approximately double that
figure), and store fixtures, such as shelving, displays casing video
surveillance equipment, computers, a cash register and a credit card machine,
the value of which was deemed to be $10,000.
Currently,
each store is fully operational and is open for business during regular mall
hours. Both stores are staffed. There are ten full-time employees (as at
June
15, 2007).
The
approximate square footage of each store is 530 sq feet.
The
Company has two operating subleases for retail outlets located in the Arrowhead
and Paradise Valley Malls, Arizona with aggregate monthly payment of $8,045
or
$96,450 per year. The lease on Paradise Valley store expires in December
2009,
and the lease on Arrowhead store expires in December 2012. The numbers shown
below assume that the Company will be able to renew its lease or sublease
and
continue to operate these facilities at the current
rate:
|
|
Year
1
|
Year
2
|
Year
3
|
Year
4
|
Year
5
|
|
Retail
Outlets
|
$96,450
|
$96,450
|
$96,450
|
$96,450
|
$96,450
|
Tradeshow
assumed the sub- leases for both store locations. The Arrowhead Mall lease
expires Dec 2009 (in the Company’s 2010 fiscal year) and Paradise Valley Mall
lease expires Dec 2012 (in the Company’s 2013 fiscal
year).
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
Our
financial statements are based on accounting principles generally accepted
in
the United States of America, many of which require management to make
significant estimates and assumptions. We believe that the following are some
of
the more critical judgment areas in the application of our accounting policies
that currently affect our financial condition and results of operation.
Revenue
recognition
.
We recognize revenue at the point of sale at
our retail stores, at our tradeshows and over the Internet. We do not carry
any
accounts receivable and all sales are final. No warranties are expressed or
offered on any goods except that of the manufacturer, which they support
directly.
Merchandise
inventories
.
We record inventory at lower of cost
(first-in, first-out method) or market value. We reduce the carrying value
of
our inventory for estimated obsolescence or unmarketable inventory by an amount
equal to the excess of the cost of inventory over the estimated market value
based upon assumptions about future demand and market conditions. If actual
market conditions are less favorable than those projected by management,
additional reserves may be required.
Income
taxes
. The provision for income taxes is the total of the current
taxes payable and the net of the change in the deferred income taxes. Provision
is made for the deferred income taxes where differences exist between the period
in which transactions affect current taxable income and the period in which
they
enter into the determination of net income in the financial
statements.
Stock
Based Compensation:
The Company accounts for its stock based
compensation based upon provisions in SFAS No. 123,
Accounting for
Stock-Based Compensation
. In this statement stock based compensation
is divided into two general categories, based upon who the stock receiver is,
namely: employees/directors and non-employees/directors. The
employees/directors category is further divided based upon the particular stock
issuance plan, namely compensatory and non-compensatory. The
employee/directors non-compensatory securities are recorded at the sales price
when the stock is sold. The compensatory stock is calculated and recorded
at the securities’ fair value at the time the stock is given. SFAS 123
also provides that stock compensation paid to non-employees be recorded with
a
value which is based upon the fair value of the services rendered or the value
of the stock given, whichever is more reliable. The Company has selected
to utilize the fair value of the stock issued as the measure of the value of
services obtained.
Operations
for the Next Twelve Months
The
acquisition of the two mall-based stores in Phoenix, AZ, may bolster the
Company’s potential ability to generate revenue, as the acquisition shares
synergies with Tradeshow’s overall business model and revenue objectives; and
(2) each store location is a turnkey operation in trafficked malls that are
open
seven days a week. In addition, the Company changed the name of the stores,
with
the intention to (1) reflect a change in ownership and management; (2) to
establish the “Sandstrom” name as a recognizable retail destination and a
proprietary private label brand; and (3) to establish a platform from which
to
launch its franchise concept.
Sandstrom
OnTV Corporate Stores and the Sandstrom Franchise model
The
acquisition of the two Sandstrom stores in Phoenix, AZ, marks the beginning
of
Tradeshow’s plan to (1) operate corporate stores and (2) to offer a franchised
retail business on a “stand-alone” basis or as a bundle of franchised stores
that are exclusive to a specific region or territory. The Company’s two
Sandstrom stores will serve as the model for its franchise retail offering.
Management plan to streamline the operating procedures of the existing Phoenix
stores, as well as to improve the look and feel of these stores, as they will
serve as a model for future franchisees. Management anticipates that they
will bundle and offer the rights to multiple store franchises based on
territorial exclusivity.
To
implement our franchise concept and strategy, we engaged Norm Friend, a
franchising expert, to create an area franchising development strategy for
the
Company’s Sandstrom stores. Mr. Friend has written several books on franchising
and wrote the Company’s manuals for franchise offerings. The manuals and the
franchise plan were completed and submitted to the Company November 3, 2005.
Since
the
start of the fiscal 2004 year, on June 01, 2004, the Company’s principals have
attended trade shows in the following cities: Canada: Vancouver, Abbotsford,
Victoria, Nanaimo, Calgary, Edmonton, Regina, Saskatoon, Winnipeg, Toronto
(every second year); United States: Puyallup, WA, Tacoma, WA, Phoenix, AZ.
Examples
of products sold to generate revenue at these shows included:
|
·
|
Ontel
Products: “as seen on TV” products that include the Swivel Sweeper, Glass
Wizard and AB Master;
|
|
·
|
American
Direct (TriStar): product supplied includes the Lateral Thigh
Trainer and
Jack Lalanne’s Power Juicer;
|
|
·
|
Cava
Industries: supplies the Cold Heat Soldering Tool and Smart Spin
containers;
|
|
·
|
ITW
Space Bags: supplies Space Bags for
storage;
|
|
·
|
Orange
Glow International: suppliers of cleaning products OxiClean, Orange
Glo, and Kaboom, among others;
|
|
·
|
Overbreak:
supplies toys that include Hover Disc, Hover Copter and Rainbow
Art.
|
Over
the
next twelve months, the Company will continue to introduce and sell a diverse
mix of innovative merchandise directly to consumers via tradeshows, malls
(kiosks), fairs, and exhibitions. Tradeshow will also sell the same merchandise
as part of its offerings in its two new mall-based stores.
In
addition, the Company has developed an e-commerce website so that it may offer
the latest products to consumers online, promote the Company’s sales channels,
and increase its marketing reach. The Company’s e-commerce website features the
same products that the Company demonstrates at trade shows and in its mall-based
retail stores.
The
Company has sufficient cash on hand to finance operations for the next twelve
months. Management anticipates that it may raise additional capital, ad hoc,
from individuals who are keen to invest in the Company. Management will use
any
funds raised to execute and fulfill the business objectives as outlined above,
namely, for franchise development and expansion, for the possible addition
of
corporate stores, and for the further development of the Company’s e-commerce
website.
The
combination of existing cash, expected revenues and possible debt and/or equity
financing, is intended to provide the Company with sufficient operating capital
for the coming twelve months, to May 31, 2007. In the event that management
does
raise additional capital, it will do so through the issuance of additional
financings via private placements and/or related party advances. To the extent
that additional capital is raised through the sale of equity or equity-related
securities, the issuance of such securities could result in dilution for our
stockholders. There can be no assurance that additional funding will be
available on favorable terms. If adequate funds are not available within the
next twelve months, we may be required to further curtail or suspend operations.
In the alternative, we may seek funding through arrangements with collaborative
partners or others that may require us to relinquish rights that we would not
otherwise relinquish.
RESULTS
OF OPERATIONS
A
summary
of our operating results is presented below. This discussion includes our
results presented on the basis required by Generally Accepted Accounting
Principles.
|
|
|
Year
ended May 31
|
|
|
|
|
2006
|
|
|
2005
|
|
|
Percentage
of Total Revenues
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Net
store sales
|
|
|
79
|
%
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Net
Internet sales
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Tradeshow Sales
|
|
|
10
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Costs
and Expenses:
|
|
|
|
|
|
|
|
|
|
Cost
of products
|
|
|
56.1
|
|
|
|
33.4
|
|
|
General and Administrative
|
|
|
100.1
|
|
|
|
93.1
|
|
|
Professional Fees
|
|
|
36.1
|
|
|
|
147.1
|
|
|
Officer Compensation
|
|
|
6.7
|
|
|
|
0.8
|
|
|
Other Income
|
|
|
2.8
|
|
|
|
7.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before income tax benefit
|
|
|
(96.2
|
)
|
|
|
(166.6
|
)
|
|
Income
tax benefit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(96.2
|
)%
|
|
|
(166.6
|
)%
|
|
|
|
|
|
|
For
year ended
|
|
|
|
|
May
31 2006
|
|
|
May
31 2005
|
|
|
Revenues
|
|
|
|
|
|
|
|
Net
store sales
|
|
$
|
290,284
|
|
|
|
|
|
Net
internet sales
|
|
|
38,500
|
|
|
|
|
|
Net
tradeshow sales
|
|
|
36,779
|
|
|
|
33,801
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenues
|
|
$
|
365,563
|
|
|
$
|
33,801
|
|
Revenues
The
following discussion is based on our consolidated financial
statements:
The
Company generated revenue of $33,801 from operations for the fiscal year that
commenced June 01, 2004 and ended May 31, 2005. For the fiscal year that began
on May 31, 2005 and ended on May 31, 2006, we generated revenue of $365,563,
an
increase of 982% over the previous fiscal year. Contributing greatly to the
increase of sales has been the acquisition of the stores and the launch of
the web. For fiscal 2006, direct sales from home and tradeshows comprised
10% of total sales revenue. This is a decrease of $928 or 2.5% for
fiscal 2006 from fiscal 2005. This decrease was due primarily to a decrease
in
the number of shows attended , as sales efforts were being focused on the retail
and internet channels. For fiscal 2006, 79 % of the total sales were
generated by sales from the retail outlets. Revenue from the retail outlets
commenced in August of 2005. In fiscal 2005, the stores had not yet been
acquired. For fiscal 2006, Internet sales from our website, which
was launched on December 23, 2005, comprised 11% of total sales revenue.
Approximately, 95% of internet sales were of two products- The
Blendy Pens and The Smart Heat Saunas.
Cost
of
products for fiscal 2006 increased $188,000, or 159%, from fiscal 2005. This
increase is due to purchase of products for re-sale through our Internet and
retail distribution channels. For fiscal 2006, the gross margin rate for each
one of the three distribution channels is approximately 44%. For fiscal
2005, the gross margin rate for the tradeshow channel was approximately 66.0%.
The decrease in the gross margin rate was a result of a combination of higher
unit costs for certain products, increases in promotional activities and product
markdowns.
Tradeshows
are not expected to generate significant revenues and should remain a small
portion of sales revenues as they are primarily used as a channel to prove
salability and develop out product demonstration scripts,. Even with
limited operational history, management anticipates that Store Sales should
continue to be one of the largest and most consistent portions of revenue.
Growth in Internet Sales has convinced management to seriously consider
investing further in developing out this sales channel, although management
will
not pursue this until there is a product that is worthy of being promoted in
concert with a direct response television marketing effort. Management has
not yet experienced sales revenues from the Wholesale or Direct Response
Television channels. A concerted investment effort will be made once
management feels they have the right product to promote via these
channels.
For
each
of the fiscal years ended May 31, 2005 and May 31, 2006, we recognized losses
from operations. Net loss from operations for the twelve months ended May 31,
2005 was $58,941. Net loss from operation for the twelve months ended May 31,
2006, was $361,973. The increase in operating loss of $ 303,032 between
the fiscal years ended in May 31, 2005 and May 31, 2006 was due to increased
general and administrative expenses of $ 334,513 and increased professional
expenses of $ 82,264. For the twelve month period that ended May 31, 2006,
officer compensation increased by $24,226, from $274 in 2005 to $24,500 in
2006.
As a measure to conserve cash for the fiscal years ended May 31, 2005 and May
31, 2006, the Company chose to increase the payment to executives in stock
and
to decrease the payment in cash.
General,
administrative and professional expenses for fiscal 2006 increased to 365,977
in
2006 from 31,464 in 2005. The increase in operating loss of $ 303,032 between
the fiscal years ended in May 31, 2005 and May 31, 2006 was due to increased
general and administrative expenses of $ 334,513. The general and administrative
fees include accounting and legal fees of 69,529, resulting from Sarbanes-Oxley
compliance. Also included in this amount are operating expenses including
facility rental and payroll expense for operation of the retail stores and
subcontract fees for investor relations purposes. The professional fees include
web development consulting fees.
As
at May
31, 2005, we had $86,876 in cash. On May 31, 2006, we had $43,538 in cash,
representing a year over year decrease of $43,338 or 50%. At May 31, 2005,
we
had total current assets of $92,930 that consisted of cash, cash equivalents
and
inventory, and total current liabilities of $39,171 that consisted of accounts
payable, shareholder loan and the current portion of a vehicle loan of
$5,484. At May 31, 2006, we had total current assets of $79,974 and total
current liabilities of $80,580 with total current assets exceeding total current
liabilities by $606. The increase in current liabilities for the twelve-month
period ended May 31, 2006 was due to an increase in accounts payable of $27,736
and an increase in the shareholder loan of $13,673 over the previous fiscal
year. The current portion a vehicle loan remained the same at $5,
484.
Cash
received from financing for the fiscal year ended May 31, 2005, was $76,716.
For
the fiscal year, which ended on May 31, 2006 cash received from financing was
$325,941. Cash utilized in operations for the fiscal year that ended on May
31,
2005 was $31,210. Cash utilized in operations for the fiscal year, which ended
on May 31, 2006, was $300,262 an increase of $ 269,052, which was due to
increases in accounts payable, as well as increased consulting and professional
services. As at May 31, 2006, the Company had an ending cash balance of $43,538.
Capital
Structure and Financings
Common
Stock
The
Company is authorized to issue 50,000,000 common shares with a $0.0001 par
value.
On
June
15, 2007, the Company had approximately 20,342,523 shares outstanding. To
date,
our principal capital resources have been acquired through a combination
of
short-term debt and the issuance of capital stock.
NOTES
PAYABLE
Following
are the notes payable as of May 31, 2006 and 2005 the Current portion of vehicle
loan is estimated using the $CDN payment times the 2006 average exchange rate
to
$US:
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
Installment
note on vehicle,
|
|
|
|
|
|
|
|
$457
($USD) payment for 60 months,
|
|
|
|
|
|
|
|
Annual
interest rate at 7.39%
|
|
$
|
18,553
|
|
|
$
|
21,502
|
|
|
Less:
Current Portion
|
|
|
(5,484
|
)
|
|
|
(5,484
|
)
|
|
Long-Term
Portion
|
|
|
13,069
|
|
|
|
16,018
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
note, non-interest,
|
|
|
|
|
|
|
|
|
|
Shareholder
|
|
|
28,673
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable
|
|
$
|
41,742
|
|
|
$
|
31,018
|
|
Leases
The
Company has two operating leases for retail outlets located in the Arrowhead
and
Paradise Valley Malls in Phoenix, Arizona with aggregate monthly payment
of
$9,830 or $117,969 per year. These leases expire in December 2008 and
December 2011 respectively. The Company also has lease for office space in
the
Scottsdale Airpark. The monthly payment is $5,432 or $65,184 per year. The
lease
expires in February 2010 with an option for a 2 year renewal. The numbers
shown
below assume that the company will be able to renew its leases e and continue
to
operate these facilities at the current rate:
|
|
Year
1
|
Year
2
|
Year
3
|
Year
4
|
Year
5
|
|
Retail
Outlets
|
$117,969
|
$117,969
|
$117,969
|
$117,969
|
$117,969
|
|
Office
Space
|
$65,184
|
$65,184
|
$65,184
|
$65,184
|
$65,184
|
The
Company has no other contingencies.
Basis
of Presentation
The
accompanying financial statements that have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of financial statements in conformity with 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. The estimates and critical accounting
policies that are most important in fully understanding and evaluating our
financial statements and results of operations are discussed
below.
We
are
currently recognizing revenue in accordance with Securities and Exchange
Commission Staff Accounting Bulletin No. 104 ("SAB 104"), "Revenue Recognition
in Financial Statements." Revenue is recognized only when the price is fixed
or
determinable, persuasive evidence of an arrangement exists, the service is
performed, and collectibility is reasonably assured.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has sustained a loss in the
periods ended May 31, 2006and May 31, 2005. This raises substantial doubt about
the Company’s ability to continue as a going concern. The financial statements
do not include any adjustments that might result from this
uncertainty.
Management
will continue to seek funding, primarily on an ad hoc basis, from its
shareholders and other qualified investors to pursue its business plan of
developing and selling franchise outlets.
Our
independent auditors have issued a going concern opinion on our consolidated
financial statements that raises substantial doubt about our ability to continue
as a going concern.
We
have
not been profitable and have experienced negative cash flow from our operations
due to our on-going investment in development efforts and expenditures to build
the appropriate infrastructure to support our growth. Consequently, we have
been
dependent on private placements of equity to fund cash
requirements.
|
ITEM
3.
|
DESCRIPTION
OF PROPERTY.
|
The
Company’s head office is located at 4550 East Cactus Rd, Suite 220 Phoenix,
Arizona where the Company also operates one of its retail Sandstrom On TV
stores. The Company believes its existing facilities will be adequate to
meet its anticipated needs for the foreseeable future.
Tradeshow
recently acquired the assets and sub-leases of two “As Seen On TV” retail stores
in Phoenix, Arizona. The Company changed the name of the stores to Sandstrom
OnTV.
The
aggregate monthly payment for both leases is $ $9,830 or $117,969 per
year. The lease on the Paradise Valley store expires in December 2009, and
the lease on the Arrowhead store expires in December 2011. The Company also
leases office space in the Scottsdale Airpark. The monthly payment is $5,432
or
$65,184 per year. The office lease expires in February 2010 with an option
for a
2 year renewal. The Company’s wholly owned subsidiary, Sandstrom ONTV Company,
is the named tenant on each of such leases.
|
ITEM
4.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
|
|
a.
|
The
following table sets forth certain information regarding the beneficial
ownership of the Company's common stock by each stockholder known
by the
Company to be the beneficial owner of more than 5% of the Company's common
stock:
|
|
(1)
|
(2)
|
(3)
|
(4)
|
|
Title
of Class
|
Name
and
Address
of Beneficial Owner
|
Amount
and
Nature
of Beneficial Owner
|
Percent
of Class
|
|
Common
|
Bruce
Kirk
72
Strickland St.
Nanaimo,
BC
V9R
4R9
|
10,020,000
|
49.2
|
|
Common
|
Julia
Sol
1
20789-38
Avenue
Langley,
B.C. V3A 2V3
Canada
Beneficiary:
Mrs. Julia Sol
1
Mrs. Julia Sol k is the
adult daughter of Mr. Bruce Kirk
|
1,000,000
|
5%
|
|
Common
|
All
beneficial owners as a group (2 persons)
|
TOTAL
= 11,020,000
|
54.2%
|
(b)
The
following table sets forth certain information regarding the beneficial
ownership of the Company's common stock by each director and executive officer
of the Company.
|
|
(2)
|
(3)
|
(4)
|
|
Title
of Class
|
Name
and
Address
of Beneficial Owner
|
Amount
and
Nature
of Beneficial Owner
|
Percent
of Class
|
|
Common
|
Bruce
Kirk
72
Strickland St.
Nanaimo,
BC
V9R
4R9
|
10,020,000
|
49.2%
|
|
Common
|
Marion
Huff
2
72
Strickland St.
Nanaimo,
BC
V9R
4R9
|
50,000
|
0.25%
|
|
Common
|
Peggie-Ann
Kirk
3
1002
- 5805 Balsam Street
Vancouver,
B.C.
V6M
4B8
|
200,000
|
0.98%
|
|
Common
|
Robert
Detwiler
1002
- 5805 Balsam Street
Vancouver,
B.C.
V6M
4B8
|
210,000
|
1.03%
|
|
Common
|
Norm
Friend
(Franchise
101 Inc.)
425
Southborough Drive
West
Vancouver, B.C.
V7S
1M3
|
48,592
|
0.24%
|
|
Common
|
Hashem
Sharifi
As
Seen on TV Store ,Hawaii 1050 Ala Moana Blvd., Honolulu, HI
96814
|
75,000
|
0.20%
|
|
Common
|
Luniel
De Beer
648
237th PL SE Sammamish, WA 98074-3632, USA
|
200,000
|
0.98%
|
|
Common
|
All
of our directors and executive officers as a group (7
persons)
|
TOTAL
=10,903,592
|
53.6%
|
________________________
1
Mrs. Julia Sol is
the adult daughter of Mr. Bruce Kirk
2
Ms. Marion Huff is the common-law spouse of Mr. Bruce Kirk
3
Peggie-Ann
Kirk is the sister of Mr. Bruce Kirk
|
ITEM
5.
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
|
Directors’
terms: As is set forth in the Company’s Bylaws, Directors are elected at the
annual meeting of the stockholders. Each Director holds office until a successor
is elected and qualified, or until his death, retirement, resignation or
removal. If an election is not held, a Director will continue to hold office.
Annual
meetings are held on a date designated by the Board of
Directors.
In
the
event that an annual meeting is not held on a date designated by the Board
of
Directors, the annual meeting may be held on the written call of the
shareholders owning a majority of the entire capital stock of the Corporation
issued, outstanding, and entitled to vote. To date, none of the shareholders
owning a majority of the entire capital stock of the Corporation has issued
a
written call.
The
Board
of Directors waived notice and holding of the annual meeting for the last
five
years for each of the years from 2001 to 2006, respectively.
The
Company's Directors and Executive Officers are as follows:
Mr.
Bruce Kirk (President & CEO) Age: 63
Mr.
Kirk
has acted as the President of the Company since its inception in December 03,
2003. Prior to this, he was a partner in Kirk-Huff Marketing, the
unincorporated precursor of the Company. Mr. Kirk has been in private
business and direct sales for more than 35 years. His experience includes owning
his own real estate sales firm, a direct sales and distribution company, and
for
the last twenty years demonstration sales at home shows and trade shows. Mr.
Kirk studied and received his undergraduate in Psychology from the University
of
British Columbia.
Mr.
Kirk
has acted as the President of the Company since its inception in December 03,
2003 to the present. Mr. Kirk spends approximately 10 hours per week researching
the market and managing the company’s affairs.
From
January 1, 1990 to December 2, 2003, he was a partner in Kirk-Huff Marketing,
the unincorporated precursor of the Company.
Mr.
Kirk
offers part-time services to the Company.
Mr.
Kirk
allocates all opportunities to the Company.
Ms
Marion Huff (COO) Age: 51
Ms.
Huff
has acted as the COO of the Company since its inception in December 03,
2003. Prior to this, she was a partner in Kirk-Huff Marketing, the
unincorporated precursor of the Company. Ms. Huff has an extensive
background of team building, consulting and training. After completing her
BSC
in Home Economics and studies in Sociology and Psychology at the University
of
Alberta, Ms. Huff worked with the Government of Alberta in youth and childcare
programs, training, supervising and motivating staff. Later Marion worked with
other Alberta based companies in human resource capacities responsible for
hiring, supervision, scheduling and overseeing. For the past fifteen years
Ms.
Huff has been working in the direct sales industry as a professional sales
demonstrator, staff recruiter, trainer and motivator.
Ms.
Huff
has acted as the COO of the Company since its inception in December 03, 2003
to
the present.
From
January 1, 1990 to Dec 2, 2003, she was a partner in Kirk-Huff Marketing, the
unincorporated precursor of the Company.
Ms.
Huff
offers part-time services to the Company.
Ms
Peggie-Ann Kirk (CFO) Age: 61
Ms.
Kirk
has operated her own accounting services company for the previous 25 years.
Ms.
Kirk has been in the accounting field for 27 years. Ms. Kirk has a Bachelor
of
Arts degree from Simon Fraser University, a Bachelor of Education degree from
the University of New Brunswick and has done graduate work at McGill University.
Ms. Kirk worked as a municipal clerk-treasurer and has been self-employed as
an
accountant for over 25 years.
Ms.
Kirk
has acted as the CFO of the Company since its inception in December 03, 2003
to
the present.
From
Jan
1, 1980 to the present she has been the sole proprietor of PK Bookkeeping and
Accounting Services.
Ms.
Kirk
offers part-time services to the Company.
Mr.
Norm Friend (Head of International Franchise Development) Age:
50
Norm
Friend is widely recognized as an expert in expansion strategies, franchise
development and franchisee recruitment with over 20 years experience in all
aspects of franchising. Friend is co-author of the two best-selling franchise
books --
"The Complete Canadian Franchise Guide"
(hard cover), and
"So You Want to Buy a Franchise"
. He also wrote the original text for
the Canadian Franchise Association's publication
"Investigate Before You
Invest"
. He has contributed numerous articles on franchising and business
to various publications, been interviewed extensively by the media and presented
numerous seminars and keynote talks to business organizations, universities,
colleges, professional associations and financial institutions throughout North
America.
Mr.
Friend has acted as the Head of International Franchise Development for the
Company since April 15, 2005.
Norm
Friend has served on the Board of Directors since April 15, 2005 to the present
date. At present, Mr. Friend plans to continue as a member of our Board of
Directors. Each of our directors is elected at the annual meeting of the
stockholders and each director holds office until his successor is elected
and
qualified or until his death, retirement, earlier resignation or
removal.
Mr.
Friend offers part-time services to the Company.
Mr.
Luniel de Beer (CTO) Age: 36
Mr.
De
Beer has acted as the Chief Technology Officer of the Company from September
1,
2005 to the present, offering full-time services to the
Company.
Previously
from 2004 to 2005, Luniel worked with Ekaria LLP to create and manage the
Operations group responsible for managing the daily operations of the American
Express corporate procurement solution and the American Express Membership
Rewards eCommerce solution, named ShopAmex. During this time, Luniel’s
group was responsible for streamlining corporate operations, defining partner
requirements, managing customer relations, and managing the design and
implementation of new process- and software solutions, both internal and
external to Ekaria LLP and American Express.
From
2000
to 2004, Luniel specialized in building out software build labs at Microsoft
Corporation in Redmond Washington. During that time, he built acted either
as a contracted consultant or a fulltime consultant in various groups within
the
organization, architecting the hardware, software, automation, and human
resources aspects of software build labs. More
specifically:
|
·
|
From
2000 to 2001, he consulted to Microsoft through his own consulting
firm,
where he established and maintained the build lab for the Microsoft
Learning Technologies group.
|
|
·
|
From
2001 to 2002, he worked as a fulltime Microsoft employee, where he
pioneered, developed, and maintained the build and test labs for
the
Microsoft Mobile Information Server
group.
|
|
·
|
From
2002 to 2003, he worked as a fulltime Microsoft employee, assisting
the
Microsoft Exchange Server group in streamlining software build lab
operations.
|
|
·
|
During
2003, he consulted to Microsoft through Volt Technologies, where
he
pioneered and developed the build lab for the Information Worker
New
Markets group.
|
|
·
|
From
2003 to 2004, he consulted to Microsoft through Volt Technologies,
consulting to the Information Worker New Markets group on Software
Release
Management.
|
Luniel
de
Beer has been architecting technology solutions for over 17 years, with software
development and product management experience in several countries including
South Africa, Taiwan, and the USA. He has focused his career on solving
technology solutions through the creative streamlining of operations and process
flow, the cross-training and cross-utilization of existing corporate resources,
and finally the innovative integration of state-of-the-art technology. Luniel's
most recent enterprise architecting experience has been on a high-profile
E-Commerce solution where he streamlined corporate operations, defined partner
requirements, owned customer relations, and managed the design and
implementation of new process- and software solutions, both internal and
external.
Mr.
De
Beer offers full-time services to the Company.
Mr.
Hashem Sharifi (Director) Age: 55
Mr.
Sharifi presently owns and operates a ``As Seen On TV'' store in Honolulu,
Hawaii. He also wholesales products to major local department stores and is
present at large tradeshows and retail events throughout the Islands. Hashem
received an M.A. degree in business from Marywood University in Scranton, Penn.
From 1984-1990, Hashem worked with a company in Boston, Mass. He was responsible
for both wholesale and retail in home shows and exhibitions. Hashem formed
his
own company, Pioneer Promotions, in 1990 based out of Seattle, Wash. Mr. Sharifi
eventually moved his headquarters to Hawaii, where he presently
resides.
Mr.
Sharifi has acted as Director to the Company from July 19, 2005 to the
present.
From
July
1, 1990 to the present he has been the President of Pioneer Promotions Inc.
a
specialty retail company based in Honolulu Hawaii.
From
1984-1990, Hashem worked with a company in Boston, Mass. He was responsible
for
both wholesale and retail in home shows and exhibitions.
Mr.
Sharifi offers part-time services to the Company.
Robert
Detwiler (Director) Age: 36
Mr.
Detwiler has acted as Director to the Company from August 01, 2005 to the
present.
From
1989
to the present, Robert has been President of Desert Island Businesses LLC.
specializing in Direct Sales consulting.
Mr.
Detwiler has been instrumental in helping develop several start-up companies
through his consulting, designing and constructing of sales systems. Robert
has
owned and operated a direct sales company that did business in 40 countries
world wide and has worked with a multi-billion dollar Japanese company where
he
helped market, train, and educate over a 1000 sales consultants, resulting
in
record growth and revenues. Robert has attended and helped organize motivation,
inspirational, investment and mind-set coaching seminars and conferences around
the USA and in the South Pacific region.
Mr.
Detwiler offers part-time services to the Company.
Mr
Tim McCarthy (Director) Age 45
Mr.
McCarthy is currently Vice President of Franchise Development for Sandstrom
ONTV
Company and has served in that role since Sandstrom's inception. Mr. McCarthy
comes to Sandstrom with a long and very successful track record in the franchise
industry. He served as Director of Franchise Development for Mail
Boxes Etc/UPS Stores in Central and northern Arizona from January 1998 until
August of 2002. From August of 2002 until November of 2005 Mr. McCarthy served
as Senior Development Manager for Cold Stone Creamery. Mr. McCarthy then went
on
to serve as Director of Franchise Development for Dermacare laser and Skin
Care
Clinics from November of 2005 until October of 2006. In November of 2006 Mr.
McCarthy accepted his current position with Sandstrom ONTV Company in order
to
develop their franchise
concept.
Mr.
McCarthy offers full-time services to the Company
INVOLVEMENT
IN CERTAIN MATERIAL LEGAL PROCEEDINGS DURING THE PAST FIVE YEARS
|
1.
|
No
director, officer, significant employee or consultant has been convicted
in a criminal proceeding, exclusive of traffic violations or is subject
to
any pending criminal proceeding.
|
|
2.
|
No
bankruptcy petitions have been filed by or against any business or
property of any director, officer, significant employee or consultant
of
the Company nor has any bankruptcy petition been filed against a
partnership or business association where these persons were general
partners or executive officers.
|
|
3.
|
No
director, officer, significant employee or consultant has been permanently
or temporarily enjoined, barred, suspended or otherwise limited from
involvement in any type of business, securities or banking
activities.
|
|
4.
|
No
director, officer or significant employee has been convicted of violating
a federal or state securities or commodities
law.
|
ITEM
6. EXECUTIVE COMPENSATION.
Currently,
most officers and directors of the Company do not require more than forty
hours
per month to adequately manage the affairs of the Company. Time per week
spent
on business:
|
·
|
Mr.
Bruce Kirk (President & CEO spends forty hours or less per month to
adequately manage the affairs of the Company.
|
|
·
|
Ms
Marion Huff (COO) spends forty hours or less per month to adequately
manage the affairs of the Company.
|
|
·
|
Ms
Peggie-Ann Kirk (CFO) spends forty hours or less per month to
adequately manage the affairs of the Company.
|
|
·
|
Mr.
Norm Friend (Consultant - Head of International Franchise Development)
spends forty hours or less per month to adequately manage the
affairs of
the Company.
|
|
·
|
Luniel
de Beer (CTO) spends more than forty hours per month to adequately
manage
the affairs of the Company.
|
|
·
|
Hashem
Sharifi (Director) spends forty hours or less per month to adequately
manage the affairs of the Company.
|
|
·
|
Mr.
Robert Detwiler (Director) spends forty hours or less per month
to
adequately manage the affairs of the
Company.
|
|
·
|
Mr.
Tim McCarthy (VP of Franchise Division) works full-time for the
Company.
|
The
following details the compensation agreement Tradeshow Marketing has in
place
for officers and directors for their management and consulting services
as
outlined in the Company’s “Engagement Agreement”:
Compensation
Executive Officers of the Company
Summary
Compensation Table
(All
figures are in US dollars)
Summary
Compensation Table
The
following table sets forth the overall compensation earned over each of
the past
three fiscal years ending May 31, 2007 by (1) each person who served
as the principal executive officer of the Company during fiscal year 2006;
(2)
the Company’s most highly compensated executive officers as of May 31, 2007 with
compensation during fiscal year 2007 of $100,000 or more; and (3) those
individuals, if any, who would have otherwise been in included in section
(2)
above but for the fact that they were not serving as an executive of the
Company
as of May 31, 2007.
|
Name and
Principal
Position
|
|
Fiscal
Year
|
|
Salary ($)
|
|
Bonus
($)
|
|
Stock
Awards
|
|
Options
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
|
All Other
Compensation
Compensation
($)
|
|
|
Bruce
Kirk
|
|
2007
|
|
|
4,000
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
5,000(7)
|
|
|
CEO
& President
|
|
2006
|
|
|
20,500
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
2005
|
|
|
20,500
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Marion
Huff
|
|
2007
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Operating Officer
|
|
2006
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,000(1)
|
|
|
|
|
2005
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Peggie-Ann
Kirk
|
|
2007
|
|
|
19,300
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000(8)
|
|
|
Chief
Financial Officer
|
|
2006
|
|
|
12,000
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,000(2)
|
|
|
|
|
2005
|
|
|
5,000
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Norm
Friend
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500(9)
|
|
|
|
|
2006
|
|
|
7,007
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
13,507.20(3)
|
|
|
|
|
2005
|
|
|
6,500
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Luniel
de Beer
|
|
2007
|
|
|
56,740
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000(10)
|
|
|
Chief
Technology Officer
|
|
2006
|
|
|
64,000
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
10,000(4)
|
|
|
|
|
2005
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Hashem
Sharifi
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
2006
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,500(5)
|
|
|
|
|
2005
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Robert
Detwiler
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
2006
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,000(6)
|
|
|
|
|
2005
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Timothy
McCarthy
|
|
2007
|
|
|
32,216
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000(11)
|
|
|
VP
of Franchise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
50,000
shares @ .10/share
|
|
(2)
|
100,000
shares @ .10/share
|
|
(3)
|
38,592
Shares @ .35/share
|
|
(4)
|
100,000
Shares @ .10 /share
|
|
(5)
|
35,000
Shares @ .10 /share
|
|
(6)
|
10,000
Shares @.10/share
|
|
(7)
|
20,000
Shares @ .25/share
|
|
(8)
|
100,000
Shares@ .25/share
|
|
(9)
|
10,000 Shares@
.25/share
|
|
(10)
|
100,000
Shares@ .25/share
|
|
(11)
|
100,000
Shares@ .25/share
|
Reason
for changes to executive compensation:
|
1.
|
Luniel
DeBeer was granted 100,000 shares in exchange for services not
50,000. Also Mr De Beer received compensation of $64,000 in total
for services rendered in connection with the development of the
website.
This amount was mistakenly not shown as executive compensation
in the June
filing of the 10-SB12G/A.
|
|
2.
|
The
10, 000 director shares for Robert Detwiler were excluded in
error in the
June filing of the 10-SB12G/A.
|
|
3.
|
The
table concerning Kita-Kaine Investment Holdings was not related
to
executive compensation and should not have been included in the June
filing of the 10-SB12G/A.
|
|
4.
|
Bruce
Kirk’s 10 Million founders shares were mistakenly excluded from the
June
filing of the 10-SB12G/A, and subsequently added to the amended
filing.
|
Compensation
for officers and directors
Director’s
fee: To date, executives have been compensated with stock and the Company has
not paid cash to executives as compensation. For all services rendered by the
Director under this Agreement, the Company shall pay the Director a one-time
base fee of between 10,000 and 100,000 shares issued from treasury of the
Company; (2) Incentives/Bonuses: In addition to the fee set forth above, the
Director shall be compensated from time to time for the raising of capital
for
the Company, the introduction of private placements to the Company, or any
such
other event that encourages investment in and/or improves the operability of
the
Company; and (3) Expenses Reimbursement: The Company will reimburse the Director
for the costs of all travel to meetings where attendance has been specifically
requested by the Company.
Benefits
If
the
Director becomes eligible therefore, the Company shall provide the Director
with
the right to participate in and to receive benefits from all insurance and
all
similar benefits made available generally to employees of the Company, as
determined by the Board of Directors of the Company. Notwithstanding the
foregoing provisions of this section, the amount and extent of any benefits
to
which the Director may be entitled shall be governed by the provisions of any
employee benefit plans adopted by the Company, as amended from time to
time.
At
present, the Company has no stock option, retirement, pension, or profit-sharing
programs for the benefit of directors, officers or other employees, but the
Board of Directors may recommend adoption of one or more such programs in the
future.
In
future
periods, the Company may elect to use cash to compensate executives and that
may
have a negative affect on the Company’s liquidity. Currently there are no plans
to make any changes to officer compensation.
Stock
issued to executives, as compensation for services rendered should be accounted
for at the fair value of the services performed, if determinable, or the value
of the shares issued. As a final resort, a valuation of the stock issued
can be made by the Board of Directors (FASB APB 29).
Material
Terms of Consulting Agreements
Executives
who act in a consulting capacity to the Company, have been compensated
for their
services to the Company, as follows:
Bruce
Kirk, our CEO, was paid $2000 CDN per month from December 01, 2003 – March 31,
2006, for management services and demonstration work at tradeshows. From
January
06-, We do not have a written agreement with Mr. Kirk.
Peggie-Ann
Kirk,our CFO was paid $500 CDN per month starting January, 01, 2004, to
May 01, 2005, $1000 CDN per month from June 01, 2005 –January 31,2007 and $2,500
USD per month from February 2007 to the present as compensation for
bookkeeping and accounting services. We do not have a written agreement
with Ms Kirk.
Luniel
de
Beer has been paid $8000 USD per month from Oct 1, 2005 to November 30,
2006 for
web development and consulting services, We do not have a written
agreement with Mr DeBeer.
Norm
Friend was paid $13,507 USD for consulting services concerning developing
the
franchise model for Canada. Mr. Friend’s consultancy agreement extended from
April 15, 2005 to July 31,2005. Mr. Friend’s Consultancy Agreement is no longer
in effect. Mr. Friend’s Engagement Agreement as a Director is in effect and is
automatically renewed each year.
Tim
McCarthy was paid $5,833 USD per month from January 1, 2007 to the present
for
consulting services concerning developing the franchise model for the
USA. His consultancy agreement commenced January 1, 2007 and has no
fixed date of expiry.
These
are
the only Company executives to receive compensation for consultancy services.
In
determining the value of the stock issued in lieu of payment for services,
the
shares were issued in fair value of the services performed. In addition,
the valuation of the stock issued was made by the Board of Directors of the
Company in every issuance.
ITEM
7. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.
Subscriptions
by Related Parties
On
July
8, 2004, the Company issued 666,667 common shares in a private placement at
$0.15 per share to Kita-Kane Investment Holdings, Inc. for a total of $100,000
cash less $89,264 subscription deposits previously received. The Company relied
upon the exemption from registration contained in Section 4(2) of the Securities
Act of 1933. The Company raised capital through private placements with friends
and family, and not through transactions that involved a public offering. Kita-
Kane Investment Holdings Inc, the beneficiary of whom is John Kirk, the adult
son of the CEO, Mr. Bruce Kirk.
Kita-Kane
made several payments totaling $89,264 during the fiscal year ended May 31,
2004
with the balance of $10,736 paid when the stock was issued on July 8,
2004. The son of the CEO is the primary stock holder of
Kita-Kane.
|
|
Kita-Kane
Investment Holdings, Inc.
|
|
|
|
|
|
TOTAL
|
|
|
666,667
|
|
b)
During
the period ended May 31, 2006, 295,000 common shares at $0.10 per share were
issued to five directors as a recruiting incentive. The Company relied upon
the
exemption from registration contained in Section 4(2) of the Securities Act
of
1933. The Company raised capital through private placements with friends and
family, and not through transactions that involved a public offering. Two
of the Directors, Ms. Marion Huff and Ms. Peggie-Ann Kirk are related. Ms.
Marion Huff is the common-law spouse of the CEO, Mr. Bruce Kirk,
and Peggie-Ann Kirk is the sister of the CEO, Mr. Bruce
Kirk.
c)
At
inception the Company Issued 51,000,000 million shares to the founder for an
investment of $5,100. After year end the founder returned and the Company
cancelled 41,000,000 common shares leaving a net of 10,000,000 for the founder.
The Company relied upon the exemption from registration contained in Section
4(2) of the Securities Act of 1933. The Company raised capital through private
placements with friends and family, and not through transactions that involved
a
public offering.
|
|
Bruce
Kirk (founder)
|
|
|
51,000,000
|
|
|
|
TOTAL
|
|
|
51,000,000
|
|
Investor
Relations
On
May
12, 2005, the Company announced that it had retained Excel Relations to carry
on
its investor relations program. Excel Relations is the investor relations
arm of the Company. Excel Relations addresses investor inquiries by phone
and by mail.
John
Kirk, the proprietor of Excel Relations is the adult son of Bruce Kirk. Excel
Relations has been compensated $5,000 per month from May 12, 2005 to the
present date for investor relations consulting services.
The
consulting agreement with Excel Relations is attached as an exhibit.
The
Company has not signed any agreements for promotion with third party
members.
Notes
Payable
Kita-
Kane Investment Holdings Inc, the beneficiary of whom is John Kirk, the adult
son of the CEO, Mr. Bruce Kirk has provided financing to the company in
the form of demand notes with no fixed or determinable repayment dates.
The amounts are recorded as short-term shareholder loans with the balance as
of
May 31, 2006 and May 31, 2005 of $28,673 and $15,000
respectively.
The
Company purchased a vehicle in July 2004 and commenced payments for it
in August 2004
.
Under this agreement, the Company is to
pay $537.95 per month for a period of 60 months commencing in August 2004
with a final payment due on July 2009. The demand note payable is held by
Kita-Kaine Investment Holdings Inc. It is dated from June 2004. The note is
open-ended, non-interest bearing, and is payable as Tradeshow is able. As such,
the Company has elected to treat this note as a long-term liability. There
is no
other agreement related to settling out this demand note. John Kirk, the adult
son of Bruce Kirk, is the beneficiary of Kita-Kane Investment
Holdings.
Following
are the notes payable as of August 31, 2006 and May 31, 2006. The Current
portion of vehicle loan is estimated using the $CDN payment times the 2006
average exchange rate to $US:
|
|
|
31-Aug-06
|
|
|
31-May-06
|
|
|
Installment
note on vehicle,
|
|
|
|
|
|
|
|
$537
($CDN) payment for 60 months,
|
|
|
|
|
|
|
|
Annual
interest rate at 7.39%
|
|
$
|
16,992
|
|
|
$
|
18,553
|
|
|
Less:
Current Portion
|
|
|
(5,739
|
)
|
|
|
(5,484
|
|
|
Long-Term
Portion
|
|
|
11,253
|
|
|
|
14,253
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
note, non-interest,
|
|
|
|
|
|
|
|
|
|
Shareholder
|
|
|
62,083
|
|
|
|
28,673
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable
|
|
$
|
73,336
|
|
|
$
|
41,742
|
|
ITEM
8. DESCRIPTION OF SECURITIES.
The
authorized capital stock of the Company consists of 50,000,000 shares of common
stock, $0.0001 par value per share, of which there are 17,869,283 shares issued
and outstanding. The Company is not authorized to issue any shares of Preferred
Stock. The following summarizes the important provisions of the Company's
capital stock.
COMMON
STOCK
Holders
of shares of common stock are entitled to one vote for each share on all matters
to be voted on by the stockholders; have no preemptive rights; have no
conversion or redemption rights or sinking fund; do not have cumulative voting
rights; and share ratably in dividends, in the event that dividends are
declared. The adoption of a dividend plan, if any, will be at the discretion
of
the Company’s Board of Directors. To date, the Company has not paid any
dividends. In the event of a liquidation, dissolution or winding up of the
Company, the holders of common stock are entitled to share pro rata all assets
remaining after payment in full of all liabilities. All of the outstanding
shares of common stock are fully paid and non-assessable.
From
the
Articles of Incorporation:
With
respect to Article 3 of the Form, the following provisions are
added:
Section
3.1.
All of the shares of stock shall be of the same class, without
preference or distinction.
Section
31. The capital stock of
the
Corporation, after the
amount of capital has been paid in money, property or services, as the board
of
directors shall determine, shall not be subject to assessment to pay the debts
of the Corporation, nor for any other purpose, and no stock issued as
fully paid shall ever be assessable or assessed and the articles
of incorporation shall not be amended in this respect.
Section
33. Cumulative voting by any shareholder is denied.*
Section
3.4.
No shareholder shall, by reason of holding shares of any class of
stock, have any preemptive or preferential right to purchase or subscribe for
any shares of any class of stock now or hereafter authorized or any notes,
debentures or bonds convertible into or carrying options or warrants to
purchase shares of any class of stock now or hereafter authorized, whether
or
not the issuance of any shares, notes, debentures or bonds would adversely
affect the dividend or voting rights of the shareholder.
As
per
section 8 of the bylaws of the Company, cumulative voting is permitted with
reference to the election of directors, but in no other corporate action
requiring a shareholder vote.
The
Company’s Articles of Incorporation state that, “cumulative voting by any
shareholder is denied.” In the Company’s Bylaws it states that, “Unless
otherwise provided in the Articles of Incorporation…” that cumulative voting is
possible. Accordingly, the Company’s Articles of Incorporation supersede
the Company’s Bylaws.
DIVIDENDS:
The adoption of a dividend plan, if any, will be at the discretion of the
Company’s Board of Directors. Dividends, if any, will be contingent upon the
Company's revenues and earnings, if any, and capital requirements and financial
conditions. The payment of dividends, if any, will be at the discretion of
the
Company's Board of Directors. The Company presently intends to retain all
earnings, if any, and accordingly the Board of Directors does not anticipate
declaring any dividends.
TRADING
OF SECURITIES IN SECONDARY MARKET
The
Company presently has 17,869,283 shares of common stock issued and outstanding.
Our stock is traded on the Over-the-Counter Pink Sheets and price quotations
for
our stock reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.
TRANSFER
AGENT
Our
independent stock transfer agent is Holladay Stock Transfer, Inc. located in
Scottsdale, Arizona. U.S.A. The mailing address and telephone number is: 2939
North 67
th
Place, Scottsdale, Arizona 85251; (480)481-3940.
PART
II
ITEM
1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
MARKET
INFORMATION
The
Company's Common stock is quoted on the OTC Pink Sheets under the symbol
"TSHO".
|
|
|
High*
|
|
|
Low*
|
|
|
Quarter
ended August 31, 2004
|
|
(did
not trade till November 2004)
|
|
|
(did
not trade till November 2004)
|
|
|
Quarter
ended November 30, 2004
|
|
|
0.15
|
|
|
|
0.12
|
|
|
Quarter
ended February 28, 2005
|
|
|
0.15
|
|
|
|
0.097
|
|
|
Quarter
ended May 31, 2005
|
|
|
-0.49
|
|
|
|
0.13
|
|
|
Quarter
ended August 31, 2005
|
|
|
0.50
|
|
|
|
0.25
|
|
|
Quarter
ended November 30, 2005
|
|
|
0.50
|
|
|
|
-0.32
|
|
|
Quarter
ended February 28, 2006
|
|
|
0.45
|
|
|
|
0.28
|
|
|
Quarter
ended May 31, 2006
|
|
|
0.43
|
|
|
|
0.19
|
|
|
Quarter
ended August 31, 2006
|
|
|
0.24
|
|
|
|
0.20
|
|
|
Quarter
ended November 30, 2006
|
|
|
0.24
|
|
|
|
0.12
|
|
|
Quarter
ended February 28, 2007
|
|
|
0.38
|
|
|
|
0.20
|
|
*Our
stock is traded on the Over-the-Counter Pink Sheets and these quotations
reflect
inter-dealer prices, without retail mark-up, mark-down or commission and
may not
represent actual transactions.
HOLDERS
There
are
currently 39 holders of the Company's common stock.
ITEM
2. LEGAL PROCEEDINGS.
The
Company is not a party to any legal proceeding. No property of the Company
is
the subject of a pending legal proceeding.
ITEM
3. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS.
There
has
been no change in or disagreements with Accountants.
ITEM
4. RECENT SALES OF UNREGISTERED SECURITIES. USE OF PROCEEDS FROM
REGISTERED SECURITIES.
The
Company is authorized 50,000,000 common shares with a $0.0001 par
value.
Outstanding
Shares
On
May
31, 2006, the Company had approximately 17,869,283 shares outstanding. To date,
our principal capital resources have been acquired through a combination of
short-term debt and the issuance of capital stock.
Period
Ended March 31, 2007
On
June
1, 2006 the Company recorded $14,141 contributed capital to eliminate the
accumulated foreign currency translation balance.
On
August
30, 2006 the Company issued 20,000 common shares at a price of $0.50 per share
in a private placement for cash in the amount of $10,000. The Company
relied upon the exemption from registration contained in Section 4(2) of the
Securities Act of 1933. The Company raised capital through private placements
with friends and family, and not through transactions that involved a public
offering.
|
|
Marvin
& Geraldine Eppes
|
|
|
20,000
|
|
|
|
TOTAL
|
|
|
20,000
|
|
On
October 15, 2006 the Company issued 25,750 shares of its common stock to
two
consultants for services valued at $12,875. The services performed by
the consultants involved accounting and management services, for the
period from June 06 to Oct 06.
|
|
Ericka
Montalban
|
|
|
10,000
|
|
|
Shareholder
|
Don
Meyers
|
|
|
15,750
|
|
|
|
TOTAL
|
|
|
25,750
|
|
On
December 30, 2006 the Company issued 200,000 common shares for consulting
services valued at $50,000 or $0.25 per share. The nature of the services
performed involved accounting and consulting and management, and the services
were rendered from January 1,2007 to December 31,2007.
|
|
Peggie-Ann
Kirk
|
|
|
100,000
|
|
|
Shareholder
|
Tim
McCarthy
|
|
|
100,000
|
|
|
|
TOTAL
|
|
|
200,000
|
|
On
January 15, 2007 the Company issued 714,000 common shares at a price of
$0.25
per share in a private placement for cash in the amount of $178,500. The
Company
relied upon the exemption from registration contained in Section 4(2) of
the
Securities Act of 1933. The Company raised capital through private placements
with friends and family, and not through transactions that involved a public
offering.
|
|
Peter
Hall
|
|
|
250,000
|
|
|
Shareholder
|
Wayne
Hine
|
|
|
80,000
|
|
|
Shareholder
|
Dean
Jacobson
|
|
|
40,000
|
|
|
Shareholder
|
Gus
Pusateri
|
|
|
20,000
|
|
|
Shareholder
|
Tim
McCarthy
|
|
|
40,000
|
|
|
Shareholder
|
Dale
Bruemmer
|
|
|
20,000
|
|
|
Shareholder
|
Gallagher
Family Trust
|
|
|
20,000
|
|
|
Shareholder
|
Chad
Olson
|
|
|
200,000
|
|
|
Shareholder
|
Ed
Taylor
|
|
|
20,000
|
|
|
Shareholder
|
James
McCarthy
|
|
|
24,000
|
|
|
|
TOTAL
|
|
|
291,400
|
|
On
January 15, 2007 the Company issued 320,000 common shares at a value of
$0.25
for the conversion of a total of $80,000 to retire a shareholders loan. The
Company relied upon the exemption from registration contained in Section
4(2) of
the Securities Act of 1933.
|
|
Abe
Zieff
|
320,000
|
|
|
TOTAL
|
320,000
|
On
July
20, 2005 the Company acquired the sub-leases and purchased the assets of two
“As
Seen On TV” stores in Phoenix valued at $30,149 thru the payment of $15,149 cash
issued 15,000 common shares at $1.00 per share or $15,000. The company
acquired $20,149 in inventory and $10,000 of equipment.
|
|
Sammi
Salibi
|
15,000
|
|
|
Total
acquisition
|
15,000
|
Pursuant
to Schedule A of the agreement, the shares were payable as
follows:
“$15,000
USD shall be payable in the common shares of The Tradeshow Marketing Company
Ltd. (the “Shares”). The Shares shall be issued to the Vendor and/or his assign
at a deemed price of $1.00 per share. If however, the share price is below
$1.00
per share at the end of twelve (12) months from the date of this Agreement,
then
the Purchaser shall issue additional shares to the Vendor to ensure that the
Shares issued under this have an aggregate market value of at least $15,000USD.
“
On
April
17, 2007, the Company issued an additional 47,500 common shares based upon
the
formula below in order to complete on the terms of the agreement:
|
·
|
Date
of original agreement: July 20,
2005
|
|
·
|
Share
price 12 months later at July 20, 2006:
$0.24
|
|
·
|
Value
of 15,000 previously issued shares at July 20, 2006 was
$3,600.
|
|
·
|
Amt
owing to vendor is $11,400 ($15,000. less
$3,600)
|
|
·
|
Shares
ordered from Treasury 47,500 ($11,400 at $0.24 per
share)
|
The
Company relied upon the exemption from registration contained in Section 4(2)
of
the Securities Act of 1933.
Year
Ended May 31, 2006
During
July 2005 the Company received $87,527 cash payments on subscriptions
receivable.
On
July
15, 2005, the Company issued 291,400 common shares at $0.15 per share in a
private placement for cash in the amount of $43,710. The Company relied upon
the
exemption from registration contained in Section 4(2) of the Securities Act
of
1933. The Company raised capital through private placements with friends and
family, and not through transactions that involved a public offering.
|
|
Olympia
Capital Inc (accredited investor)
|
266,400
|
|
Shareholder
|
James
Steward
|
25,000
|
|
|
TOTAL
|
291,400
|
On
July
20, 2005 the Company acquired the sub-leases and purchased the assets of two
“As
Seen On TV” stores in Phoenix valued at $30,149 thru the payment of $15,149 cash
issued 15,000 common shares at $1.00 per share or $15,000. The company
acquired $20,149 in inventory and $10,000 of equipment.
|
|
Sami
Salibi
|
15,000
|
|
|
Total
acquisition
|
15,000
|
Between
August 15 and August 30, 2005 the Company issued 420,000 common shares at $0.25
per share in a private placement for cash in the amount of $105,000. The Company
relied upon the exemption from registration contained in Section 4(2) of the
Securities Act of 1933. The Company raised capital through private placements
with friends and family, and not through transactions that involved a public
offering.
|
|
Rob
Detwiler
|
200,000
|
|
Shareholder
|
Theodore
Botter
|
20,000
|
|
Shareholder
|
Dave
Detwiler
|
80,000
|
|
Shareholder
|
Joel
Franklin (contractor/friend)
|
100,000
|
|
Shareholder
|
Marvin
& Geraldine Eppes
|
20,000
|
|
|
TOTAL
|
420,000
|
During
the period ended May 31, 2006, the Company issued 295,000 common shares at
$0.10
per share for recruiting incentive for its board $29,500 and based on agreements
put in place during the company’s first fiscal year. The Company relied
upon the exemption from registration contained in Section 4(2) of the Securities
Act of 1933.
During
the period ended May 31, 2006 the Company issued and aggregate of 295,000 common
shares at $0.10 per share among five directors as a recruiting incentive.
The number of shares to be issued and the price per share was agreed to during
the company’s first fiscal year. One individual is both the CFO and the
sister of the CEO and received 100,000 shares. When the agreements were
reached no stock had been sold and no valid market for shares existed. The
company based its value on what it considered to be the fair value recruiting
its board.
The
Company relied upon the exemption from registration contained in Section 4(2)
of
the Securities Act of 1933. The Company raised capital through private
placements with friends and family, and not through transactions that involved
a
public offering.
|
|
Director
|
|
|
|
Luneil
deBeer
|
100,000
|
|
|
Rob
Detwiler
|
10,000
|
|
|
Marion
Huff
|
50,000
|
|
|
Peggie-Ann
Kirk
|
100,000
|
|
|
Hashem
Sharifi
|
35,000
|
|
|
TOTAL
|
295,000
|
On
December 1, 2005 the Company issued 275,920 common shares at $0.25 per share
in
a private placement for $68,980 cash. The Company relied upon the exemption
from
registration contained in Section 4(2) of the Securities Act of 1933. The
Company raised capital through private placements with friends and family,
and
not through transactions that involved a public offering.
|
|
Elmer
Detwiler
|
80,000
|
|
Shareholder
|
Olympia
Capital Inc
|
195,920
|
|
|
TOTAL
|
275,920
|
On
February 20, 2006 the Company issued 20,000 common shares at $0.50 per share
in
a private placement for $10,000 cash. The Company relied upon the exemption
from
registration contained in Section 4(2) of the Securities Act of 1933. The
Company raised capital through private placements with friends and family,
and
not through transactions that involved a public offering.
|
|
Soonman
Kwon (friend)
|
10,000
|
|
Shareholder
|
John
Mele (friend)
|
10,000
|
|
|
TOTAL
|
20,000
|
On
February 28, 2006 the Company received and cancelled 200,000 common shares
that
were mistakenly included in the 504 offering. In February 2006 it was discovered
that 200,000 shares were mistakenly included in this offering and subsequently
cancelled. The mistake occurred because 5,300,000 shares were issued instead
of
5,100,000. We did not receive consideration for the shares. We discovered the
mistake when we reviewed the shareholder list and found that it did not balance.
The 200,000 shares were returned to the Company and the Company cancelled the
shares via a return to treasury order.
Year
Ended May 31, 2005
Outstanding
Shares
On
May
31, 2006, the Company had approximately 16,751,963 shares outstanding. To date,
our principal capital resources have been acquired through a combination of
short-term debt and the issuance of capital stock.
On
July
8, 2004, the Company issued 666,667 common shares in a private placement at
$0.15 per share to Kita-Kane Investment Holdings, Inc. for a total of $100,000
cash less $89,264 subscription deposits previously received. The Company relied
upon the exemption from registration contained in Section 4(2) of the Securities
Act of 1933. The Company raised capital through private placements with friends
and family, and not through transactions that involved a public offering.
Kita-Kane
made several payments totaling $89,264 during the fiscal year ended May 31,
2004
with the balance of $10,736 paid when the stock was issued on July 8,
2004. The son of the CEO is the primary stock holder of
Kita-Kane.
|
|
Kita-Kane
Investment Holdings, Inc.
|
|
|
|
TOTAL
|
666,667
|
On
August
1, 2004, the Company recorded the issue of 5,300,000 common shares under a
previously committed Regulation D 504 offering and raised $5,000. These
funds were used to pay legal fees. In February 2006 it was discovered that
200,000 shares were mistakenly included in this offering and subsequently
cancelled. The mistake occurred because 5,300,000 shares were issued instead
of
5,100,000. We did not receive consideration for the shares. We discovered the
mistake when we reviewed the shareholder list and found that it did not balance.
The 200,000 shares were returned to the Company and the Company cancelled the
shares via a return to treasury order.
|
|
Crimson
City Holdings, Inc.
|
|
|
|
TOTAL
|
5,100,000
|
On
August
1, 2004, the Company received and cancelled 41,000,000 common shares from its
founder.
On
April
30, 2005, the Company issued 38,592 common shares for consulting services valued
at
$13,507
or $0.35 per share.
|
|
Franchise
101
|
38,592
|
|
|
TOTAL
|
38,592
|
On
May
31, 2005, the Company issued 746,704 common shares at $0.15 per share in a
private placement and received $28,578 cash and $83,427 subscriptions Receivable
for a total of $112,005. The Company relied upon the exemption from registration
contained in Section 4(2) of the Securities Act of 1933. The Company raised
capital through private placements with friends and family, and not through
transactions that involved a public offering.
|
|
Anthony
Birkin
|
80,000
|
|
Shareholder
|
Olympia
Capital Inc (accredited investor)
|
290,003
|
|
Shareholder
|
Patrick
Chen
|
10,000
|
|
Shareholder
|
Sevco
Hajic
|
10,000
|
|
Shareholder
|
Margaret
Kirk
|
6,667
|
|
Shareholder
|
James
Steward
|
10,000
|
|
Shareholder
|
Duane
Ford
|
70,000
|
|
Shareholder
|
Peter
Hall
|
200,000
|
|
Shareholder
|
Joel
Franklin
|
46,667
|
|
Shareholder
|
June
Powdrill
|
6,667
|
|
Shareholder
|
Megan
Powdrill
|
3,333
|
|
Shareholder
|
Graham
Mason
|
13,367
|
|
|
TOTAL
|
746,704
|
Year
Ended May 31, 2004
At
inception the Company Issued 51,000,000 million shares to the founder for an
investment of
$5,100.
After year end the founder returned and the Company cancelled 41,000,000 common
shares leaving a net of 10,000,000 for the founder. The Company relied upon
the
exemption from registration contained in Section 4(2) of the Securities Act
of
1933. The Company raised capital through private placements with friends and
family, and not through transactions that involved a public offering.
|
|
Bruce
Kirk (founder)
|
51,000,000
|
|
|
TOTAL
|
51,000,000
|
During
the year ended May 31, 2004 cash deposits on private placement stock
subscriptions in the amount of $89,264 were received the stock was not issued
until July 8, 2004.
Table:
Aggregate Share Issuances
|
|
Tradeshow
Marketing Recent Sales of Unregistered Securities
|
|
|
|
|
|
|
|
|
Date
|
Fiscal
Year Ended
|
Name
of Shareholder
and
Details
|
Shares
|
Exemption
|
Consideration
Paid
|
Total
Dollar Value
|
Total
Shares Issued and outstanding
|
Relationship
|
|
3-Dec-03
|
31-May-04
|
Bruce
Kirk
|
51,000,000
|
Section
4(2)
|
$0.001
|
$5,100
|
51,000,000
|
executive
officer, director
|
|
8-Jul-04
|
31-May-05
|
Kita
Kaine Investment Holdings Ltd
|
666,667
|
Section
4(2)
|
$0.15
|
$100,000
|
51,666,667
|
family
of director
|
|
1-Aug-04
|
31-May-05
|
Crimson
City Holdings, Inc.
|
5,300,000
|
Regulation
D
|
$0.00094
|
$5,000
|
56,966,667
|
accredited
investor
|
|
1-Aug-04
|
31-May-04
|
Bruce
Kirk Cancelled Shares
|
-41,000,000
|
N/A
|
$0.001
|
$4,100
|
15,966,667
|
executive
officer, director
|
|
30-Apr-05
|
31-May-05
|
Franchise
101
|
38,592
|
Section
4(2)
|
$0.35
|
$13,507
|
16,005,259
|
executive
officer
|
|
15-Feb-05
|
31-May-05
|
A
Birkin
|
80,000
|
Section
4(2)
|
$0.15
|
$12,000
|
16,085,259
|
friend
of director
|
|
9-May-05
|
31-May-05
|
Olympia
Capital Inc
|
290,003
|
Section
4(2)
|
$0.15
|
$43,500
|
16,375,262
|
accredited
investor
|
|
31-May-05
|
31-May-05
|
Patrick
Chen
|
10,000
|
Section
4(2)
|
$0.15
|
|
16,385,262
|
friend
of director
|
|
31-May-05
|
31-May-05
|
Sevco
Hajic
|
10,000
|
Section
4(2)
|
$0.15
|
$15,000
|
16,395,262
|
friend
of director
|
|
31-May-05
|
31-May-05
|
Margaret
Kirk
|
6,667
|
Section
4(2)
|
$0.15
|
1,000
|
16,401,929
|
family
of director
|
|
31-May-05
|
31-May-05
|
James
Stuard
|
10,000
|
Section
4(2)
|
$0.15
|
$1,500
|
16,411,929
|
accredited
investor
|
|
16-May-05
|
31-May-05
|
Duane
Ford
|
70,000
|
Section
4(2)
|
$0.15
|
$10,500
|
16,481,929
|
accredited
investor
|
|
16-May-05
|
31-May-05
|
Peter
Hall
|
200,000
|
Section
4(2)
|
$0.15
|
$30,000
|
16,681,929
|
accredited
investor
|
|
16-May-05
|
31-May-05
|
Joel
Franklin
|
46,667
|
Section
4(2)
|
$0.15
|
$7,000
|
16,728,596
|
friend
of director
|
|
26-May-05
|
31-May-05
|
June
Powdrill
|
6,667
|
Section
4(2)
|
$0.15
|
$1,000
|
16,735,263
|
family
of director
|
|
26-May-05
|
31-May-05
|
Megan
Powdrill
|
3,333
|
Section
4(2)
|
$0.15
|
$500
|
16,738,596
|
family
of director
|
|
31-May-05
|
31-May-05
|
Graham
Mason
|
13,367
|
Section
4(2)
|
$0.15
|
$2,005
|
16,751,963
|
friend
of director
|
|
28-Feb-06
|
31-May-06
|
555
Holdings Cancelled Shares
|
-200,000
|
N/A
|
$0.00094
|
$188
|
16,551,963
|
accredited
investor
|
|
15-Jul-05
|
31-May-05
|
Olympia
Capital Inc
|
266,400
|
Section
4(2)
|
$0.15000
|
$39,960
|
16,818,363
|
accredited
investor
|
|
15-Jul-05
|
31-May-05
|
James
Stuard
|
25,000
|
Section
4(2)
|
$0.15000
|
$3,750
|
16,843,363
|
accredited
investor
|
|
15-Aug-05
|
31-May-05
|
Rob
Detwiler
|
200,000
|
Section
4(2)
|
$0.25000
|
$50,000
|
17,043,363
|
director
|
|
30-Aug-05
|
31-May-05
|
Theodore
Botter
|
20,000
|
Section
4(2)
|
$0.25000
|
$5,000
|
17,063,363
|
accredited
investor
|
|
30-Aug-05
|
31-May-05
|
Dave
Detwiler
|
80,000
|
Section
4(2)
|
$0.25000
|
$20,000
|
17,143,363
|
family
of director
|
|
30-Aug-05
|
31-May-05
|
Joel
Franklin
|
100,000
|
Section
4(2)
|
$0.25000
|
$25,000
|
17,243,363
|
friend
of director
|
|
30-Aug-05
|
31-May-05
|
Marvin
and Geraldine Eppes
|
20,000
|
Section
4(2)
|
$0.25000
|
$5,000
|
17,263,363
|
accredited
investor
|
|
30-Apr-05
|
31-May-05
|
Luniel
de Beer
|
50,000
|
Section
4(2)
|
$0.10000
|
$5,000
|
17,313,363
|
director,
executive officer
|
|
15-Aug-05
|
31-May-05
|
Rob
Detwiler
|
10,000
|
Section
4(2)
|
$0.10000
|
$1,000
|
17,323,363
|
director
|
|
1-Sep-04
|
31-May-04
|
Marion
Huff
|
50,000
|
Section
4(2)
|
$0.10000
|
$5,000
|
17,373,363
|
executive
officer, director
|
|
1-Sep-04
|
31-May-04
|
Peggie-Ann
Kirk
|
100,000
|
Section
4(2)
|
$0.10000
|
$10,000
|
17,473,363
|
executive
officer, director
|
|
1-Jun-05
|
31-May-05
|
Hashem
Sharifi
|
35,000
|
Section
4(2)
|
$0.10000
|
$3,500
|
17,508,363
|
director
|
|
28-Sep-05
|
31-May-05
|
Luniel
de Beer
|
50,000
|
Section
4(2)
|
$0.10000
|
$5,000
|
17,558,363
|
executive
officer, director
|
|
1-Aug-05
|
31-May-05
|
Sammi
Salibi
|
15,000
|
Section
4(2)
|
$1.00000
|
$15,000
|
17,573,363
|
friend
of director
|
|
1-Nov-05
|
31-May-05
|
Elmer
Detwiler
|
80,000
|
Section
4(2)
|
$0.25000
|
$20,000
|
17,653,363
|
family
of director
|
|
1-Dec-05
|
31-May-05
|
Olympia
Capital Inc
|
195,920
|
Section
4(2)
|
$0.25000
|
$48,970
|
17,849,283
|
accredited
investor
|
|
20-Feb-06
|
31-May-06
|
Soonman
Kwon
|
10,000
|
Section
4(2)
|
$0.50000
|
$5,000
|
17,859,283
|
friend
of director
|
|
20-Feb-06
|
31-May-06
|
John
Mele
|
10,000
|
Section
4(2)
|
$0.50000
|
$5,000
|
17,869,283
|
friend
of director
|
Pursuant
to the Company’s bylaws, the Company may indemnify any person made or threatened
to be made a party to any action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that that person is
or
was a director, officer or employee of our Company.
Insofar
as indemnification for liabilities arising under the Securities Act, as amended,
may be permitted for directors, officers and controlling persons of our company
under our bylaws or under any contract, arrangement, statute, or otherwise,
we
have been advised that in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
PART
F/S
THE
TRADESHOW MARKETING COMPANY LTD.
CONSOLIDATED
FINANCIAL STATEMENTS
May
31, 2006 and 2005
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
MOORE
& ASSOCIATES, CHARTERED
ACCOUNTANTS
AND ADVISORS
PCAOB REGISTERED
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the
Board of Directors
The
Tradeshow Marketing Company Ltd
Las
Vegas, Nevada
We
have
audited the accompanying restated balance sheet of The Tradeshow Marketing
Company Ltd as of May 31, 2005 and 2006, and the related restated statements
of
operations, stockholders’ equity and cash flows for the years ended May 31, 2005
and 2006. These restated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. 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
audits provide a reasonable basis for our opinion.
In
our
opinion, the restated financial statements referred to above present fairly,
in
all material respects, the financial position of Tradeshow Marketing Company
Ltd
as of May 31, 2005 and 2006 and the results of its operations and its cash
flows
for the years ended May 31,2005 and 2006, in conformity with accounting
principles generally accepted in the United States of America.
The
accompanying restated financial statements have been prepared assuming that
the
Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company’s net losses and accumulated deficit of
$449,972 since inception which raises substantial doubt about its ability to
continue as a going concern. Management’s plans concerning these matters are
also described in Note 9. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/
Moore
& Associates, Chartered
Moore
& Associates Chartered
Las
Vegas, Nevada
February
06, 2007
2675
S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7511 Fax (702)
253-7501
THE
TRADESHOW MARKETING COMPANY LTD.
BALANCE
SHEET
(Restated)
|
|
|
May
31,
|
|
|
May
31,
|
|
|
|
|
2006
|
|
|
2005
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
43,538
|
|
|
$
|
86,876
|
|
|
Inventory
|
|
|
36,436
|
|
|
|
6,054
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
79,974
|
|
|
|
92,930
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Assets
|
|
|
|
|
|
|
|
|
|
Equipment
- Net
|
|
|
28,805
|
|
|
|
5,399
|
|
|
Vehicles
- Net
|
|
|
14,305
|
|
|
|
17,999
|
|
|
Network
Infrastructure & Software
|
|
|
43,763
|
|
|
|
-
|
|
|
Other
Assets
|
|
|
3,673
|
|
|
|
7,574
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Long Term Assets
|
|
|
90,546
|
|
|
|
30,972
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
170,520
|
|
|
$
|
123,902
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
46,423
|
|
|
$
|
18,687
|
|
|
Shareholder
Loan - Related Party
|
|
|
28,673
|
|
|
|
15,000
|
|
|
Current
Portion - Vehicle Loan
|
|
|
5,484
|
|
|
|
5,484
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
80,580
|
|
|
|
39,171
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Loan
|
|
|
13,069
|
|
|
|
16,018
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
93,649
|
|
|
|
55,189
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, authorized
|
|
|
|
|
|
|
|
|
|
50,000,000
shares, par value $0.0001,
|
|
|
|
|
|
|
|
|
|
issued
and outstanding on February
|
|
|
|
|
|
|
|
|
|
28,
2006 and May 31, 2005
|
|
|
|
|
|
|
|
|
|
is
17,869,283 and 16,751,963
|
|
|
|
|
|
|
|
|
|
respectively
|
|
|
1,789
|
|
|
|
1,676
|
|
|
Paid
in Capital
|
|
|
510,913
|
|
|
|
238,836
|
|
|
Subscription
Receivable
|
|
|
-
|
|
|
|
(87,527
|
)
|
|
Accumulated
Currency Translation
|
|
|
14,141
|
|
|
|
3,727
|
|
|
Accumulated
Deficit
|
|
|
(449,972
|
)
|
|
|
(87,999
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
76,871
|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$
|
170,520
|
|
|
$
|
123,902
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
THE
TRADESHOW MARKETING COMPANY LTD.
Statements
of Operations
(Restated)
|
|
|
For
the Year Ended
|
|
|
|
|
May
31,
|
|
|
May
31,
|
|
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
365,563
|
|
|
$
|
33,801
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
205,069
|
|
|
|
11,278
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
160,494
|
|
|
|
22,523
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
365,977
|
|
|
|
31,464
|
|
|
Professional
Fees
|
|
|
131,990
|
|
|
|
49,726
|
|
|
Officer
Compensation
|
|
|
24,500
|
|
|
|
274
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
522,467
|
|
|
|
81,464
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
|
(361,973
|
)
|
|
|
(58,941
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income / (Loss)
|
|
|
|
|
|
|
|
|
|
Currency
Translation
|
|
|
10,414
|
|
|
|
2,612
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
|
$
|
(351,559
|
)
|
|
$
|
(56,329
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted
|
|
|
|
|
|
|
|
|
|
(Loss)
per Share
|
|
$
|
(0.02
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average
|
|
|
|
|
|
|
|
|
|
Number
of Shares
|
|
|
17,640,886
|
|
|
|
15,145,325
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
The
Tradeshow Marketing Company, Ltd.
Statements
of Stockholders’ Equity
(Restated)
December
05, 2003 (inception) to May 31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid
in
|
|
|
Subscriptions
|
|
|
Currency
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Receivable
|
|
|
Translation
|
|
|
Deficit
|
|
|
Equity
|
|
|
Shares
Issued to Founders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.0001 per share
|
|
|
51,000,000
|
|
|
$
|
5,100
|
|
|
$
|
4,900
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
10,000
|
|
|
Deposits
received for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock
subscriptions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
89,264
|
|
|
|
|
|
|
|
|
|
|
|
89,264
|
|
|
Currency
Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,115
|
|
|
|
|
|
|
|
1,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(29,058
|
)
|
|
|
(29,058
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
May 31, 2004
|
|
|
51,000,000
|
|
|
|
5,100
|
|
|
|
4,900
|
|
|
|
89,264
|
|
|
|
1,115
|
|
|
|
(29,058
|
)
|
|
|
71,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
Issued for Cash at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.15
per share
|
|
|
666,667
|
|
|
|
67
|
|
|
|
99,933
|
|
|
|
(89,264
|
)
|
|
|
|
|
|
|
|
|
|
|
10,736
|
|
|
Shares
Issued for Cash at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.001
per share
|
|
|
5,300,000
|
|
|
|
530
|
|
|
|
4,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
Founders
Shares Cancelled
|
|
|
(41,000,000
|
)
|
|
|
(4,100
|
)
|
|
|
4,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
Shares
Issued for Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.35 per share
|
|
|
38,592
|
|
|
|
4
|
|
|
|
13,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,507
|
|
|
Shares
Issued for Cash and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
subscriptions
receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.15 per share
|
|
|
746,704
|
|
|
|
75
|
|
|
|
111,930
|
|
|
|
(87,527
|
)
|
|
|
|
|
|
|
|
|
|
|
24,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,612
|
|
|
|
|
|
|
|
2,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(58,941
|
)
|
|
|
(58,941
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
May 31, 2005
|
|
|
16,751,963
|
|
|
|
1,676
|
|
|
|
238,836
|
|
|
|
(87,527
|
)
|
|
|
3,727
|
|
|
|
(87,999
|
)
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Received on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription
Receivable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,527
|
|
|
|
|
|
|
|
|
|
|
|
87,527
|
|
|
Shares
Issued for Cash for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.15
per share
|
|
|
291,400
|
|
|
|
29
|
|
|
|
43,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,710
|
|
|
Shares
issued for Acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$1.00 per share
|
|
|
15,000
|
|
|
|
2
|
|
|
|
14,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
Shares
Issued for Cash for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.25
per share
|
|
|
420,000
|
|
|
|
42
|
|
|
|
104,958
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,000
|
|
|
Shares
issued for Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.10 per share
|
|
|
295,000
|
|
|
|
30
|
|
|
|
29,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,500
|
|
|
Shares
Issued for Cash at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.25
per share
|
|
|
275,920
|
|
|
|
28
|
|
|
|
68,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,980
|
|
|
Shares
Issued for Cash at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.50
per share
|
|
|
20,000
|
|
|
|
2
|
|
|
|
9,998
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
Shares
returned and Cancelled
|
|
|
(200,000
|
)
|
|
|
(20
|
)
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
Currency
Translation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,414
|
|
|
|
|
|
|
|
10,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(361,973
|
)
|
|
|
(361,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
May 31, 2006
|
|
|
17,869,283
|
|
|
$
|
1,789
|
|
|
$
|
510,913
|
|
|
$
|
-
|
|
|
$
|
14,141
|
|
|
$
|
(449,972
|
)
|
|
$
|
76,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
The
Tradeshow Marketing Company, Ltd.
Statements
of Cash Flows
(Restated)
|
|
|
|
|
|
|
|
|
|
|
For
The Year Ended
|
|
|
|
|
May
31,
|
|
|
May
31,
|
|
|
|
|
2006
|
|
|
2005
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
$
|
(361,973
|
)
|
|
$
|
(58,941
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Transactions
|
|
|
|
|
|
|
|
|
|
Stock
issued for service
|
|
|
29,500
|
|
|
|
13,507
|
|
|
Stock
issued to acquire inventory
|
|
|
5,000
|
|
|
|
|
|
|
Depreciation
/ Amortization Expense
|
|
|
15,542
|
|
|
|
4,038
|
|
|
Foreign
Currency Translation
|
|
|
10,414
|
|
|
|
2,612
|
|
|
Changes
in Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
(Increase)/Decrease
in Inventory
|
|
|
(30,382
|
)
|
|
|
(4,038
|
)
|
|
(Increase)/Decrease
in Other Assets
|
|
|
3,901
|
|
|
|
(7,075
|
)
|
|
Increase/(Decrease)
in Payables
|
|
|
27,736
|
|
|
|
18,687
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) by Operating Activities
|
|
|
(300,262
|
)
|
|
|
(31,210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Activities
|
|
|
|
|
|
|
|
|
|
Purchase
of Network Infrastructure
|
|
|
(52,029
|
)
|
|
|
-
|
|
|
Equipment
Purchase
|
|
|
(16,988
|
)
|
|
|
(24,745
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Used by Investment Activities
|
|
|
(69,017
|
)
|
|
|
(24,745
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Shareholder Loans
|
|
|
13,673
|
|
|
|
15,000
|
|
|
Proceeds/(Payments)
- Equipment Financing
|
|
|
(2,949
|
)
|
|
|
21,502
|
|
|
Proceeds
from Subscriptions Receivable
|
|
|
87,527
|
|
|
|
|
|
|
Proceeds
from sale of Common Stock
|
|
|
227,690
|
|
|
|
40,214
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided by Financing Activities
|
|
|
325,941
|
|
|
|
76,716
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase / (Decrease) in Cash
|
|
|
(43,338
|
)
|
|
|
20,761
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
Beginning of Period
|
|
|
86,876
|
|
|
|
66,115
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
End of Period
|
|
$
|
43,538
|
|
|
$
|
86,876
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
|
Interest
Paid
|
|
$
|
11,620
|
|
|
$
|
1,190
|
|
|
Income
Taxes Paid
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Transactions:
|
|
|
|
|
|
|
|
|
|
The
company issued common stock thru issue of subscription
receivable:
|
|
|
|
|
|
|
|
|
|
|
|
$
|
87,527
|
|
|
$
|
89,264
|
|
|
The
company issued 15,000 common shares to acquire the
following:
|
|
|
|
|
|
|
|
|
|
Equipment
|
|
$
|
10,000
|
|
|
|
|
|
|
Inventory
|
|
$
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
THE
TRADESHOW MARKETING COMPANY INC
NOTES
TO RESTATED FINANCIAL STATEMENTS
NOTE
1.
GENERAL
ORGANIZATION AND
BUSINESS
The
Tradeshow Marketing Company, Inc. (the Company) was organized in the state
of
Nevada on December 3, 2003. The Company was formed to marketing specialty
products at tradeshows, and specialty product shops and kiosks in malls. The
Company through May 31, 2006 has only been selling at tradeshows on-line and
in
malls.
On
July
20, 2005, the Company purchased the inventory and executed a sublease agreement
with two small retail stores in the Arrowhead and Paradise Valley Malls in
Phoenix, Arizona.
The
Company operates on a May 31 fiscal year end.
NOTE
2.
SUMMARY
OF SIGNIFICANT
ACCOUNTING PRACTICES
The
relevant accounting policies and procedures are listed below.
Accounting
Basis
The
statements were prepared following generally accepted accounting principles
of
the United States of America consistently applied.
Cash
and Cash Equivalents
Cash
and
cash equivalents consist of cash and deposits in transit.
Dividends
The
Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
Use
of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and 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.
Translation
of Currency
The
company’s headquarters were in Canada through May 31, 2006 and maintains it
financial records in $CDN. For the sake of reporting the Balance Sheet, amounts
were converted to United States dollars using the exchange rate at the end
of
each period. Income statement amounts were converted using an average rate
for
the period resulting in a translation gain or loss for each period shown. All
amounts reported in the accompanying financial statements are expressed in
$US.
Inventory
The
company inventories finished products it has purchased for resale.
Revenue
Recognition and Accounts Receivable
All
the
sales for the Company are on a point of sale/cash and carry basis. The Company
does not carry receivables for any sales. All sales are final. Revenue is
recognized when a sale is made. No warranties are expressed or offered on any
goods except that of the manufacturer, which they support directly.
Advertising
Expense
Advertising,
promotion and marketing costs are expensed as incurred. Advertising expense
for
the period ended May 31, 2006 and 2005 was $4,327 and $448
respectively.
Income
Taxes
The
provision for income taxes is the total of the current taxes payable and the
net
of the change in the deferred income taxes. Provision is made for the deferred
income taxes where differences exist between the period in which transactions
affect current taxable income and the period in which they enter into the
determination of net income in the financial statements.
Equipment
Equipment
is stated at cost. Depreciation is computed using the straight-line method
over
the assets useful lives, which are 5 year to 7 years. Maintenance and repairs
are charged to expense as incurred.
|
May
31,
|
|
2006
|
|
|
2005
|
|
|
Equipment
|
|
$
|
48,145
|
|
|
$
|
6,651
|
|
|
Accumulated
Depreciation
|
|
|
(9,387
|
)
|
|
|
(1,252
|
)
|
|
Equipment
- Net
|
|
$
|
14,305
|
|
|
$
|
5,399
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
|
$
|
24,041
|
|
|
$
|
21,175
|
|
|
Accumulated
Depreciation
|
|
|
(9,736
|
)
|
|
|
(3,176
|
)
|
|
Vehicle
- Net
|
|
$
|
14,305
|
|
|
$
|
17,999
|
|
|
|
|
|
|
|
|
|
|
|
|
Network
Infrastructure
|
|
$
|
52,028
|
|
|
|
|
|
|
Accumulated
Depreciation
|
|
|
(8,265
|
)
|
|
|
|
|
|
Network
Infrastructure - Net
|
|
$
|
43,763
|
|
|
|
|
|
The
difference in the value of the vehicle is reflective of the change in the
foreign currency rate
Stock
Based Compensation
The
Company accounts for its stock based compensation based upon provisions in
SFAS
No.
123,
Accounting for Stock-Based Compensation
. In this statement stock based
compensation is divided into two general categories, based upon who the stock
receiver is, namely: employees/directors and non-employees/directors. The
employees/directors category is further divided based upon the particular stock
issuance plan, namely compensatory and non- compensatory. The employee/directors
non-compensatory securities are recorded at the sales price when the stock
is
sold. The compensatory stock is calculated and recorded at the securities’ fair
value at the time the stock is given. SFAS 123 also provides that stock
compensation paid to non-employees be recorded with a value which is based
upon
the fair value of the services rendered or the value of the stock given,
whichever is more reliable. The Company has selected to utilize the fair value
of the stock issued as the measure of the value of services
obtained.
Earnings
per Share (EPS)
The
basic
earnings (loss) per share are calculated by dividing the Company’s net income
available to common shareholders by the weighted average number of common shares
during the year. The diluted earnings (loss) per share are calculated by
dividing the Company’s net income (loss) available to common shareholders by the
diluted weighted average number of shares outstanding during the year. The
diluted weighted average number of shares outstanding is the basic weighted
number of shares adjusted as of the first of the year for any potentially
dilutive debt or equity.
The
Company has not issued any options or warrants since inception, or other
dilutive securities. The numerators and denominators used in the computations
of
basic and diluted EPS are presented in the following table:
|
May
31,
|
|
2006
|
|
|
2005
|
|
|
Numerators
for Basic and Diluted EPS
|
|
|
|
|
|
|
|
Net
income/ (loss) to common shareholders
|
|
$
|
(351,559
|
)
|
|
$
|
(56,329
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Denominators
for Basic and Diluted EPS
|
|
|
|
|
|
|
|
|
|
Weighted
average of shares outstanding
|
|
|
17,640,886
|
|
|
|
15,145,325
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted Earnings/ (Loss) Per Share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.00
|
)
|
NOTE
2.
RESTATEMENT
OF
FINANCIALS
Restatement
Adjustments for year Ended May 31, 2005 follows:
|
|
|
Reported
|
|
|
Error
|
|
|
|
|
|
Restated
|
|
|
|
|
31-May-05
|
|
|
Adjustment
|
|
|
|
|
|
31-May-05
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
86,876
|
|
|
|
|
|
|
|
|
$
|
86,876
|
|
|
Inventory
|
|
|
6,054
|
|
|
|
|
|
|
|
|
|
6,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
92,930
|
|
|
|
|
|
|
|
|
|
92,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
- Net
|
|
|
23,398
|
|
|
|
(17,999
|
)
|
|
|
(1)
|
|
|
|
5,399
|
|
|
Vehicles
- Net
|
|
|
-
|
|
|
|
17,999
|
|
|
|
(1)
|
|
|
|
17,999
|
|
|
Other
Assets
|
|
|
7,754
|
|
|
|
|
|
|
|
|
|
|
|
7,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Long Term Assets
|
|
|
30,972
|
|
|
|
|
|
|
|
|
|
|
|
30,972
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
123,902
|
|
|
$
|
0.00
|
|
|
|
|
|
|
$
|
123,902
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
18,687
|
|
|
|
|
|
|
|
|
|
|
$
|
18,687
|
|
|
Shareholder
Loans - Related Party
|
|
|
-
|
|
|
|
15,000
|
|
|
|
(2)
|
|
|
|
15,000
|
|
|
Current
Portion - Vehicle Loan
|
|
|
-
|
|
|
|
5,484
|
|
|
|
(3)
|
|
|
|
5,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
18,687
|
|
|
|
|
|
|
|
|
|
|
|
24,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Loan
|
|
|
21,502
|
|
|
|
(5,484
|
)
|
|
|
(3)
|
|
|
|
16,018
|
|
|
Loan
from Shareholder
|
|
|
15,000
|
|
|
|
(15,000
|
)
|
|
|
(2)
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
55,189
|
|
|
|
|
|
|
|
|
|
|
|
55,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
1,675
|
|
|
|
1
|
|
|
|
(4)
|
|
|
|
1,676
|
|
|
Paid
in Capital
|
|
|
146,410
|
|
|
|
92,426
|
|
|
|
(4)(5)(6)
|
|
|
|
238,836
|
|
|
Subscriptions
Receivable
|
|
|
(87,527
|
)
|
|
|
|
|
|
|
(4)(6)
|
|
|
|
(87,527
|
)
|
|
Accumulated
Currency Translation
|
|
|
3,727
|
|
|
|
|
|
|
|
|
|
|
|
3,727
|
|
|
Accumulated
Deficit
|
|
|
(83,099
|
)
|
|
|
(4,900
|
)
|
|
|
(5)
|
|
|
|
(87,999
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders’ Equity
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
68,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
$
|
123,902
|
|
|
$
|
0.00
|
|
|
|
|
|
|
$
|
123,902
|
|
Adjustments:
(1)
Restated
to provide detail of
previously reported Equipment category.
(2)
Restated
to reclassify short-term
related party shareholder loans and current liabilities.
(3)
Restated
to display current portion of
the Vehicle loan.
(4)
Restated
to correct rounding
error.
|
(5)
The
issuance of 51,000,000 shares
of stock to the founders in 2004 was incorrectly recorded for
services of
$5,100 instead of $10,000 and the 2004 financials have been restated
to
record the $4,900 increase to Paid in Capital and the corresponding
expense of $4,900. In early 2005 the founder returned and the
company
cancelled 41,000,000 shares leaving a net of 10,000,000 shares
issued to
the founder.
|
|
(6)
The
aggregate adjustments to the
Equity accounts include an increase in common stock issued of
33 shares; a
net increase of $12,801 for common stock issued for services;
a net
decrease in common stock issued for cash of $12,801; and an increase
in
paid in capital of $87,527 with a corresponding increase in subscriptions
receivable of $87,527 as detailed
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Issued
for Cash
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid
in
|
|
|
Subscription
|
|
|
Cash
|
|
|
Stock Issued
|
|
|
|
|
REF
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Receivable
|
|
|
Purchase
|
|
|
for Service
|
|
|
Balance
May 31, 2004
|
|
|
|
|
|
51,000,000
|
|
|
$
|
5,100
|
|
|
$
|
4,900
|
|
|
$
|
89,264
|
|
|
$
|
-
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Before
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restatement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Founders
Stock
|
|
|
|
|
|
(41,000,000
|
)
|
|
|
(4,100
|
)
|
|
|
4,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
for Cash
|
|
|
a
|
|
|
|
5,300,000
|
|
|
|
530
|
|
|
|
4,770
|
|
|
|
|
|
|
|
5,300
|
|
|
|
|
|
|
Stock
for Cash
|
|
|
b
|
|
|
|
666,667
|
|
|
|
67
|
|
|
|
124,912
|
|
|
|
(77,264
|
)
|
|
|
47,715
|
|
|
|
|
|
|
Stock
for Services
|
|
|
c
|
|
|
|
150,000
|
|
|
|
15
|
|
|
|
135
|
|
|
|
|
|
|
|
|
|
|
|
150
|
|
|
Stock
for Service
|
|
|
c
|
|
|
|
123,592
|
|
|
|
12
|
|
|
|
112
|
|
|
|
|
|
|
|
|
|
|
|
124
|
|
|
Stock
for Service
|
|
|
c
|
|
|
|
431,671
|
|
|
|
43
|
|
|
|
389
|
|
|
|
|
|
|
|
|
|
|
|
432
|
|
|
Stock
for Cash e
|
|
|
c
|
|
|
|
80,000
|
|
|
|
8
|
|
|
|
11,992
|
|
|
|
(12,000
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
May 31, 2005
|
|
|
|
|
|
|
16,751,930
|
|
|
|
1,675
|
|
|
|
151,310
|
|
|
|
-
|
|
|
|
53,015
|
|
|
|
10,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
for
Cash
|
|
|
a
|
|
|
|
|
|
|
|
|
|
(300
|
)
|
|
|
|
|
|
(300
|
)
|
|
Stock
for
Cash
|
|
|
b
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(24,979
|
)
|
|
|
(12,000
|
)
|
|
|
(36,979
|
)
|
|
Stock
for Service
|
|
|
c
|
|
|
|
(150,000
|
)
|
|
|
(15
|
)
|
|
|
(135
|
)
|
|
|
|
|
|
|
|
|
(150
|
)
|
|
Stock
for Service
|
|
|
c
|
|
|
|
(123,592
|
)
|
|
|
(12
|
)
|
|
|
(112
|
)
|
|
|
|
|
|
|
|
|
(124
|
)
|
|
Stock
for Service
|
|
|
c
|
|
|
|
(431,671
|
)
|
|
|
(43
|
)
|
|
|
(389
|
)
|
|
|
|
|
|
|
|
|
(432
|
)
|
|
Stock
for Cash
|
|
|
c
|
|
|
|
(80,000
|
)
|
|
|
(8
|
)
|
|
|
(11,992
|
)
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
Stock
for Service
|
|
|
d
|
|
|
|
38,592
|
|
|
|
4
|
|
|
|
13,503
|
|
|
|
|
|
|
|
|
|
|
13,507
|
|
|
Stock
for Cash
|
|
|
e
|
|
|
|
746,704
|
|
|
|
75
|
|
|
|
111,930
|
|
|
|
(87,527
|
)
|
|
|
24,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
of Restatement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
f
|
|
|
|
33
|
|
|
|
1
|
|
|
|
87,526
|
|
|
|
(87,527
|
)
|
|
|
(12,801
|
)
|
|
|
12,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated
Equity:
|
|
|
|
|
|
|
16,751,963
|
|
|
$
|
1,676
|
|
|
$
|
238,836
|
|
|
$
|
(87,527
|
)
|
|
$
|
40,214
|
|
|
$
|
23,507
|
|
|
|
a.
|
The
issue of 5,300,000 common shares for cash was incorrectly reported
during
2005 at $5,300 and corrected to $5,000 in the restatement resulting
in a
decrease in paid in capital of $300 and a corresponding decrease
in cash
received of $300.
|
|
|
b.
|
The
sale of 666,667 common shares
at $0.15 per share was incorrectly reported as an increase in
common stock
of 67, an increase in paid in capital of 124,912 and a decrease
in
Subscriptions receivable of $77,264.
The 666,667
common shares were
sold at $0.15 per share for a total of $100,000 with $89,264
having been
prepaid as subscriptions during 2004. The resulting adjustment
is a
decrease in paid in capital of $24,979, a decrease in subscriptions
receivable of $12,000 and a decrease in cash received of
$36,979.
|
|
|
c.
|
The
Company incorrectly recorded the issue of 150,000, 123,592, and
431,671
common shares issued for service for a total of $706 and 80,000
common
shares issued for $12,000 from prepaid subscriptions. These issues
had
been incorrectly classified and adjustments include a reversal
of these
transactions.
|
|
|
d.
|
The
Company issued 38,592 common shares for services valued at $0.35
per share
a total of $13,507.
|
|
|
e.
|
The
Company issued 746,704 common shares in a private offering at
$0.15 per
share for $112,005 with $87,527 subscription receivable and $24,478
cash.
|
|
|
f.
|
The
aggregate decrease in stock issued for cash of $12,801 was offset
by the
increase in stock issued for services. This adjustment resulted
in a
reclassification of expenses with a $12,801 decrease in general
and
administrative expense and an increase in professional
fees.
|
The
Statement of Operation has been restated as follows:
|
|
|
Reported
|
|
Error
|
|
|
Restated
|
|
|
|
|
31-May-05
|
|
Adjustment
|
|
|
31-May-05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
33,801
|
|
|
|
|
$
|
33,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
11,278
|
|
|
|
|
|
11,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
22,523
|
|
|
|
|
|
22,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
31,464
|
|
|
|
|
|
31,464
|
|
|
Professional
Fees
|
|
|
49,726
|
|
|
|
|
|
49,726
|
|
|
Officer
Compensation
|
|
|
274
|
|
|
|
|
|
274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
81,464
|
|
|
|
|
|
81,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
|
(58,941
|
)
|
|
|
|
|
(58,941
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Comprehensive Income / (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
Currency
Translation
|
|
|
|
|
2,612
|
(1)
|
|
|
2,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
Income
|
|
$
|
(58,941
|
)
|
$2,612
|
|
|
$
|
(56,329
|
)
|
|
(1)
|
Restated
to provide visibility of Other Comprehensive Income in the form of
Currency Translation.
|
The
Statement of Cash Flows has been restated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Error
|
|
|
|
|
|
Restated
|
|
|
|
|
|
31-May-05
|
|
|
Adjustment
|
|
|
|
|
|
31-May-05
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
|
$
|
(58,941
|
)
|
|
$
|
-
|
|
|
|
|
|
$
|
(58,941
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for service
|
|
|
|
5,574
|
|
|
|
7,933
|
|
|
|
(1)
|
|
|
|
13,507
|
|
|
Stock
issued to acquire inventory
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Depreciation
/ Amortization Expense
|
|
|
|
4,038
|
|
|
|
-
|
|
|
|
|
|
|
|
4,038
|
|
|
Foreign
Currency Translation
|
|
|
|
2,612
|
|
|
|
-
|
|
|
|
|
|
|
|
2,612
|
|
|
Changes
in Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)/Decrease
in Inventory
|
|
|
|
(4,038
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(4,038
|
)
|
|
(Increase)/Decrease
in Other Assets
|
|
|
|
(7,075
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(7,075
|
)
|
|
Increase/(Decrease)
in Payables
|
|
|
|
18,687
|
|
|
|
-
|
|
|
|
|
|
|
|
18,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) by Operating Activities
|
|
|
|
(39,143
|
)
|
|
|
7,933
|
|
|
|
|
|
|
|
(31,210
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of Network Infrastructure
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
Equipment
Purchase
|
|
|
|
(24,745
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(24,745
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Used by Investment Activities
|
|
|
|
(24,745
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(24,745
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Shareholder Loans
|
|
|
|
15,000
|
|
|
|
-
|
|
|
|
|
|
|
|
15,000
|
|
|
Proceeds/(Payments)
- Equipment Financing
|
|
|
|
21,502
|
|
|
|
-
|
|
|
|
|
|
|
|
21,502
|
|
|
Proceeds
from Subscriptions Receivable
|
|
|
|
(89,264
|
)
|
|
|
89,264
|
|
|
|
(2)
|
|
|
|
|
|
|
Proceeds
from sale of Common Stock
|
|
|
|
142,985
|
|
|
|
(102,771
|
)
|
|
|
(2)
|
|
|
|
40,214
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided by Financing Activities
|
|
|
|
90,223
|
|
|
|
(13,507
|
)
|
|
|
|
|
|
|
76,716
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase / (Decrease) in Cash
|
|
|
|
26,335
|
|
|
|
(5,574
|
)
|
|
|
|
|
|
|
20,761
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
Beginning of Period
|
|
|
|
66,115
|
|
|
|
-
|
|
|
|
|
|
|
|
66,115
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
End of Period
|
|
|
$
|
92,450
|
|
|
$
|
(5,574
|
)
|
|
|
|
|
|
$
|
86,876
|
|
|
(1)
|
The
Company incorrectly reported the issue of $5,474 for services. Actual
issues for services were for $13,507 as reported in the restated
statement
of stockholders equity.
|
|
(2)
|
The
Company incorrectly reported a subscription receivable of $89,264
and cash
received from sale of stock of $142,985. The net cash proceeds from
the
sale of stock is $40,214 ($10,736+$5,000+$24,478) as reported in
the
restated statement of stockholders'
equity.
|
Restatement
Adjustments for year Ended May 31, 2006 follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
|
Error
|
|
|
|
|
|
Restated
|
|
|
|
|
31-May-06
|
|
|
Adjustment
|
|
|
|
|
|
31-May-06
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
43,538
|
|
|
|
|
|
|
|
|
|
|
|
$
|
43538
|
|
|
Inventory
|
|
|
36,436
|
|
|
|
|
|
|
|
|
|
|
|
|
36,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
79,974
|
|
|
|
|
|
|
|
|
|
|
|
|
79,
97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment
- Net
|
|
|
18,805
|
|
|
|
|
|
|
10,000
|
|
|
|
(1
|
)
|
|
|
28,805
|
|
|
Vehicles
- Net
|
|
|
14,305
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,305
|
|
|
Network
Infrastructure & Software
|
|
|
43,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43,763
|
|
|
Other
Assets
|
|
|
3,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Long Term Assets
|
|
|
80,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
160,520
|
|
|
$
|
|
|
|
$
|
10,000
|
|
|
|
|
|
|
$
|
170,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
46,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
46,423
|
|
|
Shareholder
Loans - Related Party
|
|
|
|
|
|
|
|
|
|
|
28,673
|
|
|
|
(2
|
)
|
|
|
28,673
|
|
|
Current
Portion - Vehicle Loan
|
|
|
5,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
51,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Loan
|
|
|
13,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,069
|
|
|
Loan
from Shareholder
|
|
|
28,673
|
|
|
|
|
|
|
|
(28,673
|
)
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
93,649
|
|
|
|
|
|
|
|
93,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
1,788
|
|
|
|
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
1,789
|
|
|
Paid
in Capital
|
|
|
497,414
|
|
|
|
|
|
|
|
13,499
|
|
|
|
(1
|
)
|
|
|
510,913
|
|
|
Subscriptions
Receivable
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
Accumulated
Currency Translation
|
|
|
14,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,141
|
|
|
Accumulated
Deficit
|
|
|
(446,472
|
)
|
|
|
|
|
|
|
(3,500
|
)
|
|
|
(1
|
)
|
|
|
(449,972
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders’ Equity
|
|
|
66,871
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
|
|
|
76,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
$
|
160,520
|
|
|
|
|
|
|
$
|
10,000
|
|
|
|
|
|
|
$
|
170,520
|
|
Adjustments:
|
|
(1)
|
On
July 20, 2005 the Company acquired the sub-leases and purchased the
assets
and equipment of two As Seen On TV Stores for an adjusted value of
$30,149. The Company received Inventory valued at $20,149 and equipment
and fixtures valued at $10,000. The agreed price was payable with
$15,149
cash and 15,000 common shares valued at $1.00 per share. The Company
reported the cash payment of $15,149 as purchase of inventory and
the
issue of 15,000 shares of common stock as consulting services of
$1,500
but failed to record the additional
$5,000
inventory and $10,000 equipment and fixtures as part of the asset
purchase.
|
The
Company restated its May 31, 2006 financials by reversing the original issue
of
15,000 shares of stock for $1,500 consulting services and then recorded the
issue of 15,000 shares of common stock for the purchase of $10,000 equipment
and
the purchase $5,000 inventory to cost of sales.
|
|
(2)
|
Restated
to reclassify short-term (less than 12 months) related party operational
loans as current liabilities rather than notes
payable.
|
Statement
of Operations
|
|
|
Reported
|
|
Error
|
|
|
|
Restated
|
|
|
|
|
31-May-06
|
|
Adjustments
|
|
|
|
31-May-06
|
|
|
Revenue
|
|
$
|
65,563
|
|
$
|
-
|
|
|
|
|
$
|
65,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
200,069
|
|
|
5,000
|
|
|
(1)
|
|
|
205,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
165,494
|
|
|
(5,000
|
)
|
|
|
|
|
160,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
365,977
|
|
|
-
|
|
|
|
|
|
365,977
|
|
|
Professional
Fees
|
|
|
133,490
|
|
|
(1,500
|
)
|
|
(1)
|
|
|
131,990
|
|
|
Officer
Compensation
|
|
|
24,500
|
|
|
-
|
|
|
|
|
|
24,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
523,967
|
|
|
(1,500
|
)
|
|
|
|
|
522,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
|
(358,473
|
)
|
|
(3,500
|
)
|
|
|
|
|
(361,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The
Company restated its May 31, 2006 financials by reversing the original
issue of 15,000 shares of stock for $1,500 consulting services and
then
recorded the issue of 15,000 shares of common stock for the purchase
of
$10,000 equipment and the purchase $5,000 inventory which was subsequently
issued and charged to cost of
sales.
|
Statement
of Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid
in
|
|
|
Stock
Issued
|
|
|
Stock
Issued
|
|
|
|
|
REF
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
For
Cash
|
|
|
For
Service
|
|
|
Reported
Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May
31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
for Cash
|
|
|
|
|
|
291,400
|
|
|
|
29
|
|
|
|
43,681
|
|
|
|
43,710
|
|
|
|
|
|
Stock
for Cash
|
|
|
|
|
|
420,000
|
|
|
|
42
|
|
|
|
104,958
|
|
|
|
105,000
|
|
|
|
|
|
Stock
for Service
|
|
|
(1
|
)
|
|
|
310,000
|
|
|
|
31
|
|
|
|
30,969
|
|
|
|
|
|
|
|
31,000
|
|
|
Stock
for Cash
|
|
|
|
|
|
|
275,920
|
|
|
|
28
|
|
|
|
68,952
|
|
|
|
68,980
|
|
|
|
|
|
|
Stock
for Cash
|
|
|
|
|
|
|
20,000
|
|
|
|
2
|
|
|
|
9,998
|
|
|
|
10,000
|
|
|
|
|
|
|
Stock
Cancelled
|
|
|
|
|
|
|
(200,000
|
)
|
|
|
(20
|
)
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
1,117,320
|
|
|
|
112
|
|
|
|
258,578
|
|
|
|
227,690
|
|
|
|
31,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated
Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May
31, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
for Cash
|
|
|
|
|
|
|
291,400
|
|
|
|
29
|
|
|
|
43,681
|
|
|
|
43,710
|
|
|
|
|
|
|
Stock
for Acquisition
|
|
|
(1
|
)
|
|
|
15,000
|
|
|
|
2
|
|
|
|
14,998
|
|
|
|
|
|
|
|
15,000
|
|
|
Stock
for Cash
|
|
|
|
|
|
|
420,000
|
|
|
|
42
|
|
|
|
104,958
|
|
|
|
105,000
|
|
|
|
|
|
|
Stock
for Service
|
|
|
(1
|
)
|
|
|
295,000
|
|
|
|
30
|
|
|
|
29,470
|
|
|
|
|
|
|
|
29,500
|
|
|
Stock
for Cash
|
|
|
|
|
|
|
275,920
|
|
|
|
28
|
|
|
|
68,952
|
|
|
|
68,980
|
|
|
|
|
|
|
Stock
for Cash
|
|
|
|
|
|
|
20,000
|
|
|
|
2
|
|
|
|
9,998
|
|
|
|
10,000
|
|
|
|
|
|
|
Stock
Cancelled
|
|
|
|
|
|
|
(200,000
|
)
|
|
|
(20
|
)
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
|
|
|
|
1,117,320
|
|
|
|
113
|
|
|
|
272,077
|
|
|
|
227,690
|
|
|
|
44,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May
31, 2006
|
|
|
|
|
|
|
16,751,963
|
|
|
|
1,676
|
|
|
|
238,836
|
|
|
|
217,005
|
|
|
|
23,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May
31, 2006
|
|
|
|
|
|
|
17,869,283
|
|
|
$
|
1,789
|
|
|
$
|
510,913
|
|
|
$
|
444,695
|
|
|
$
|
68,007
|
|
|
(1)
|
The
Company restated its May 31, 2006 financials by reversing the original
issue of 15,000 shares of stock for $1,500 consulting services and
then
recorded the issue of 15,000 shares of common stock for the purchase
of
$10,000 equipment and the purchase $5,000 inventory which was subsequently
issued and charged to cost of
sales.
|
Cash
Flow Statement
|
|
|
Reported
|
|
|
|
|
|
|
|
|
Restated
|
|
|
|
|
May
31,
|
|
|
Error
|
|
|
|
|
|
May
31,
|
|
|
|
|
2006
|
|
|
Adjustment
|
|
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
$
|
(358,473
|
)
|
|
$
|
(3,500
|
)
|
|
|
(1
|
)
|
|
$
|
(361,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for service
|
|
|
31,000
|
|
|
|
(1,500
|
)
|
|
|
(1
|
)
|
|
|
29,500
|
|
|
Stock
issued to acquire inventory
|
|
|
-
|
|
|
|
5,000
|
|
|
|
(1
|
)
|
|
|
5,000
|
|
|
Depreciation
/ Amortization Expense
|
|
|
15,542
|
|
|
|
-
|
|
|
|
|
|
|
|
15,542
|
|
|
Foreign
Currency Translation
|
|
|
14,514
|
|
|
|
(4,100
|
)
|
|
|
(3
|
)
|
|
|
10,414
|
|
|
Changes
in Assets and Liabilities
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
(Increase)/Decrease
in Inventory
|
|
|
(30,382
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(30,382
|
)
|
|
(Increase)/Decrease
in Other Assets
|
|
|
3,901
|
|
|
|
-
|
|
|
|
|
|
|
|
3,901
|
|
|
Increase/(Decrease)
in Payables
|
|
|
27,736
|
|
|
|
-
|
|
|
|
|
|
|
|
27,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) by Operating Activities
|
|
|
(296,162
|
)
|
|
|
(4,100
|
)
|
|
|
|
|
|
|
(300,262
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of Network Infrastructure
|
|
|
(52,029
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(52,029
|
)
|
|
Equipment
Purchase
|
|
|
(16,988
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(16,988
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Used by Investment Activities
|
|
|
(69,017
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(69,017
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Shareholder Loans
|
|
|
13,673
|
|
|
|
-
|
|
|
|
|
|
|
|
13,673
|
|
|
Proceeds/(Payments)
- Equipment Financing
|
|
|
(2,949
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(2,949
|
)
|
|
Proceeds
from sale of Common Stock
|
|
|
311,117
|
|
|
|
4,100
|
|
|
|
(3
|
)
|
|
|
315,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided by Financing Activities
|
|
|
321,841
|
|
|
|
4,100
|
|
|
|
|
|
|
|
325,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase / (Decrease) in Cash
|
|
|
(43,338
|
)
|
|
|
-
|
|
|
|
|
|
|
|
(43,338
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
Beginning of Period
|
|
|
86,876
|
|
|
|
|
|
|
|
|
|
|
|
86,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
End of Period
|
|
$
|
43,538
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
43,538
|
|
|
(1)
|
See
net adjustment in the restated statement of
operations.
|
|
(2)
|
The
Company restated its May 31, 2006 financials by reversing the original
issue of 15,000 shares of stock for $1,500 consulting services and
then
recorded the issue of 15,000 shares of common stock for the purchase
of
$10,000 equipment and the purchase $5,000 inventory which was subsequently
issued and charged to cost of
sales.
|
|
(3)
|
The
company incorrectly classified $4,100 as an increase in foreign currency
translation that was actually proceeds from the sale of
stock.
|
NOTE
3.
ACQUSITION
OF
ASSETS
On
July
20, 2005 the Company acquired the sub-leases and completed the purchase of
the
purchase two As Seen On TV Stores in Phoenix Arizona for the original amount
of
$35,000 which was revaluated to $30,149. The company acquired the rights to
use
the “As Seen on TV” trade name for the two stores, inventory of $20,149 and
equipment in the form of store fixtures, shelving, display cases, video
surveillance equipment, computers, cash register and credit card machine valued
at $10,000. The Company also assumed responsibility for two operating leases
for
the store locations. The purchase was completed by the payment of $15,149 cash
and the issue of 15,000 common shares valued at $15,000.
NOTE
4.
RELATED
PARTY
TRANSACTIONS
At
inception the Company Issued 51,000,000 million shares to the founder for
services valued at $10,000. After fiscal year end the founder returned and
the
Company cancelled 41,000,000 common shares leaving a net of 10,000,000 shares
with the founder and CEO.
On
July
8, 2004 the Company issued 666,667 common shares in a private placement to
Kita-
Kane Investment Holdings, Inc. for an investment of $100,000. Kita-Kane made
several payments totaling $89,264 during the fiscal year ended May 31, 2004
with
the balance of $10,736 paid when the stock was issued on July 8, 2004. The
son
of the CEO is the primary stock holder of Kita-Kane.
During
the period ended May 31, 2006 the Company issued and aggregate of 295,000 common
shares at $0.10 per share among five directors as a recruiting incentive. The
number of shares to be issued and the price per share was agreed to during
the
company’s first fiscal year. One individual is both the CFO and the sister of
the CEO and received 100,000 shares. When the agreements were reached no stock
had been sold and no valid market for shares existed. The company based its
value on what it considered to be the fair value recruiting its
board.
A
related
party has provided financing to the company in the form of demand notes with
no
fixed or determinable repayment dates. The amounts are recorded as short-term
shareholder loans with the balance as of May 31, 2006 and May 31, 2005 of
$28,673 and $15,000 respectively.
NOTE
5.
STOCKHOLDERS’
EQUITY
Common
Stock
The
Company is authorized 50,000,000 common shares with a $0.0001 par
value.
Year
Ended May 31, 2004
At
inception the Company Issued 51,000,000 million shares to the founder for
services valued at $10,000. After year end the founder returned and the Company
cancelled 41,000,000 common shares leaving a net of 10,000,000 shares with the
founder.
During
the year ended May 31, 2004 cash deposits on private placement stock
subscriptions in the amount of $89,264 were received the stock was not issued
until July 8, 2004.
Year
Ended May 31, 2005
On
July
8, 2004, the Company issued 666,667 common shares in a private placement at
$0.15 per share for a total of $100,000 cash less $89,264 subscription deposits
previously received.
On
August
1, 2004, the Company recorded the issue of 5,300,000 common shares under a
previously committed Regulation D 504 offering and raised $5,000. These funds
were used to pay legal fees. In February 2006 it was discovered that 200,000
shares were mistakenly included in this offering and subsequently
cancelled. The mistake occurred because 5,300,000 shares were issued
instead of 5,100,000. We did not receive consideration for the shares. We
discovered the mistake when we reviewed the shareholder list and found that
it
did not balance. The 200,000 shares were returned to the Company and the Company
cancelled the shares via a return to treasury order.
On
August
1, 2004, the Company received and cancelled 41,000,000 common shares from its
founder.
On
April
30, 2005, the Company issued 38,592 common shares for consulting services valued
at $13,507 or $0.35 per share.
On
May
31, 2005, the Company issued 746,407 common shares at $0.15 per share in a
private placement and received $24,478 cash and $87,527 subscriptions Receivable
for a total of $112,005.
Year
Ended May 31, 2006
During
July 2005 the Company received $87,527 cash payments on subscriptions
receivable.
On
July
15, 2005, the Company issued 291,400 common shares at $0.15 per share in a
private placement for cash in the amount of $43,710.
On
July
20, 2005 the Company acquired the assets of two Sandstrom Stores in Phoenix
valued at $30,149 thru the payment of $15,149 cash issued 15,000 common shares
at $1.00 per share or $15,000. The company acquired $20,149 in inventory and
$10,000 of equipment.
Between
August 15 and August 30, 2005 the Company issued 420,000 common shares at $0.25
per share in a private placement for cash in the amount of
$105,000.
During
the period ended May 31, 2006, the Company issued 295,000 common shares at
$0.10
per share for recruiting incentive for its board $29,500 and based on agreements
put in place during the company’s first fiscal year.
On
December 1, 2005 the Company issued 275,920 common shares at $0.25 per share
in
a private placement for $68,980 cash.
On
February 20, 2006 the Company issued 20,000 common shares at $0.50 per share
in
a private placement for $10,000 cash.
On
February 28, 2006 the Company received and cancelled 200,000 common shares
that
were mistakenly included in the 504 offering.
NOTE
6.
NOTES
PAYABLE
Following
are the notes payable as of May 31, 2006 and 2005 the Current portion of vehicle
loan is estimated using the $CDN payment times the 2006 average exchange rate
to
$US:
|
May
31,
|
|
2006
|
|
|
2005
|
|
|
Installment
note on vehicle,
|
|
|
|
|
|
|
|
$537
($CDN) payment for 60 months,
|
|
|
|
|
|
|
|
Annual
interest rate at 7.39%
|
|
$
|
18,553
|
|
|
$
|
21,502
|
|
|
Less:
Current Portion
|
|
|
(5,484
|
)
|
|
|
(5,484
|
)
|
|
Long-Term
Portion
|
|
$
|
13,069
|
|
|
$
|
16,018
|
|
NOTE
6.
PROVISION
FOR INCOME
TAXES
The
Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, Accounting for Income Taxes. SFAS No. 109 requires the use
of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates
in
effect when these differences are expected to reverse.
SFAS
No.
109 requires the reduction of deferred tax assets by a valuation allowance
if,
based on the weight of available evidence, it is more likely than not that
some
or all of the deferred tax assets will not be realized. The total deferred
tax
asset is $98,994, as of May 31, 2006, which is calculated by multiplying a
22%
estimated tax rate by the cumulative NOL of $449,973. The total valuation
allowance is a comparable $98,994.
The
provision for income taxes is comprised of the net changes in deferred taxes
less the valuation account plus the current taxes payable as shown in the chart
below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May
31,
|
|
2006
|
|
|
2005
|
|
|
Net
changes in Deferred Tax Benefit
|
|
$
|
79,634
|
|
|
$
|
12,967
|
|
|
Valuation
account
|
|
|
(79,634
|
)
|
|
|
(12,967
|
)
|
|
Current
Taxes
Payable
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Provision for Income Taxes
|
|
$
|
0
|
|
|
$
|
0
|
|
Below
is
a chart showing the estimated federal net operating losses and the years in
which they will expire.
|
Year
|
|
Amount
|
|
Expiration
|
|
2004
|
|
$
|
29,058
|
|
2024
|
|
2005
|
|
|
58,941
|
|
2025
|
|
2006
|
|
|
361,973
2026
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
449,972
|
|
|
NOTE
7.
OPERATING
LEASES AND OTHER
COMMITMENTS:
The
Company has two operating subleases for retail outlets located in the Arrowhead
and Paradise Valley Malls in Phoenix, Arizona with aggregate monthly payment
of
$8,045 or $96,450 per year. The Arrowhead Mall lease expires Dec 2006 (in the
Company’s 2007 fiscal year) and Paradise Valley Mall lease expires Dec 2008(in
the Company’s 2009 fiscal year). The numbers shown below assume that
the company will be able to renew its lease or sublease and continue to operate
these facilities at the current rate:
|
|
Year
1
|
Year
2
|
Year
3
|
Year
4
|
Year
5
|
|
Retail
Outlets
|
$96,450
|
$96,450
|
$96,450
|
$96,450
|
$96,450
|
NOTE
8.
GOING CONCERN
The
accompanying financial statements have been prepared assuming that the company
will continue as a going concern. The Company has accumulated a total loss
of
$449,972 since inception. This raises substantial doubt about the Company’s
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from this uncertainty.
Management
continues to seek funding from its shareholders and other qualified investors
to
pursue its business plan of developing specialty retail products, purchasing
retail stores in malls.
NOTE
9.
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Below
is
a listing of the most recent accounting standards SFAS 150-154 and their effect
on the Company.
Statement
No.
150
Accounting
for Certain Financial
Instruments with Characteristics of both Liabilities and Equity (Issued
5/03)
This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity.
Statement
No.
151
Inventory
Costs-an amendment of ARB
No. 43, Chapter 4 (Issued 11/04)
This statement
amends the guidance in
ARB No. 43, Chapter 4,
Inventory Pricing
,
to clarify the accounting for
abnormal amounts of idle facility expense, freight, handling costs, and wasted
material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that
“…under some circumstances, items such as idle facility expense, excessive
spoilage, double freight and re- handling costs may be so abnormal as to require
treatment as current period charges….” This Statement requires that those items
be recognized as current-period charges regardless of whether they meet the
criterion of “so abnormal.” In addition, this Statement requires that allocation
of fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities.
Statement
No.
152
Accounting
for Real Estate
Time-Sharing Transactions (an amendment of FASB Statements No. 66 and
67)
This
Statement amends FASB Statement No. 66,
Accounting for Sales of Real
Estate
, to reference the financial accounting and reporting guidance for
real estate time-sharing transactions that is provided in AICPA Statement of
Position (SOP) 04-2,
Accounting for Real Estate Time-Sharing
Transactions
.
This
Statement also amends FASB Statement No. 67, Accounting
for Costs and
Initial Rental Operations of Real Estate Projects
, states that the guidance
for (a) incidental operations and (b) costs incurred to sell real estate
projects does not apply to real estate time-sharing transactions. The accounting
for those operations and costs is subject to the guidance in SOP
04-2.
Statement
No.
153
Exchanges
of Non-monetary Assets
(an amendment of APB Opinion No.29)
The
guidance in APB Opinion No. 29,
Accounting for Non-monetary
Transactions
, is based on the principle that exchanges of non-monetary
assets should be measured based on the fair value of the assets exchanged.
The
guidance in that Opinion, however, includes certain exceptions to the principle.
This Statement amends Opinion 29 to eliminate the exception for non-monetary
exchanges of similar productive assts and replaces it with a general exception
for exchanges of non-monetary assets that do not have commercial substance.
A
non-monetary exchange has commercial substance if the future cash flows of
the
entity are expected to change significantly as a result of the
exchange.
Statement
No.
154
Accounting
Changes and Error
Corrections (a replacement of APB Opinion No. 20 and FASB Statement No.
3)
This
Statement replaces APB Opinion No. 20,
Accounting Changes,
and FASB
Statement No. 3,
Reporting Accounting Changes in Interim Financial
Statements,
and changes the requirements for the accounting for and
reporting of a change in accounting principle. This Statement applies to all
voluntary changes in accounting principle. It also applies to changes required
by an accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. When a pronouncement includes
specific transition provisions, those provisions should be
followed.
The
adoption of these new Statements is not expected to have a material effect
on
the Company’s current financial position, results or operations, or cash
flows.
PART
III.
ITEM
2. INDEX TO EXHIBITS.
|
Exhibit
Number
|
Description
of Exhibits*
|
|
Exhibit
3.1
|
Articles
of Incorporation*
|
|
Exhibit
3.2
|
Bylaws,
as amended*
|
|
Exhibit
10.2
|
Asset
Purchase Agreement****
|
|
Exhibit
10.3
|
Engagement
Agreement with Marion Huff*
|
|
Exhibit
10.4
|
Engagement
Agreement with Bruce Kirk*
|
|
Exhibit
10.5
|
Engagement
Agreement with Luniel de Beer*
|
|
Exhibit
10.6
|
Engagement
Agreement with Peggie-Ann Kirk*
|
|
Exhibit
10.7
|
Consulting
Agreement with Norm Friend/Franchise 101**
|
|
Exhibit
10.8
|
Engagement
Agreement with Hashem Sharifi*
|
|
Exhibit
10.9
|
Engagement
Agreement with Norm Friend***
|
|
Exhibit
10.10
|
Engagement
Agreement with Robert Detwiler***
|
|
Exhibit
10.11
|
Consulting
Agreement with Excel Relations***
|
|
Exhibit
10.12
|
Consulting
Agreement with Tim McCarthy ****
|
|
Exhibit
10.13
|
Lease
Agreement ****
|
|
Exhibit
10.14
|
Lease
Agreement ****
|
|
Exhibit
10.15
|
Amendment
to Agreement with Franchise 101
|
|
Exhibit
10.16
|
Amendment
to Agreement with Tim McCarthy
|
|
Exhibit
10.17
|
Lease
Agreement
|
|
Exhibit
21.1
|
List
of Subsidiaries
|
|
Exhibit
23.1
|
Consent
of Auditor
|
*
Incorporated by reference to form 10-SB 12(B) filed with the commission on
January 3, 2006
**
Incorporated by reference to form 10-SB 12(G) filed with the commission on
November 15, 2006
***
Incorporated by reference to form 10-SB 12(G) filed with the commission on
February 15, 2007
****
Incorporated by reference to form 10-SB 12(G) filed with the commission on
July 20, 2007
SIGNATURES
In
accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the
undersigned, thereunto duly authorized.
|
|
Tradeshow
Marketing
Company, Inc. (Registrant
)
|
|
|
|
|
|
|
|
September
20,
2007
|
By:
|
/s/ BRUCE
KIRK
|
|
|
|
|
Mr.
Bruce Kirk
|
|
|
|
|
President
&
CEO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ PEGGIE-ANN
KIRK
|
|
|
|
|
Ms.
Peggie-Ann Kirk
|
|
|
|
|
Chief
Financial
Officer
|
|
|
|
|
|
|
67
Tradeshow Marketing (CE) (USOTC:TSHO)
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