x
|
Preliminary
Information Statement
|
|
|
o
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14c-5(d)2))
|
||
o
|
Definitive
Information Statement
|
|
|
x
|
No
fee required.
|
|
o
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
|
(2)
|
Aggregate
number of securities to which transaction
applies:
|
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is
calculated and state how it was determined):
|
|
(4)
|
Proposed
maximum aggregate value of transaction:
|
|
(5)
|
Total
fee paid:
|
|
o
|
Fee
paid previously with preliminary materials:
|
|
o
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee
was paid
previously. Identify the previous filing by registration statement
number,
or the form or schedule and the date of its filing.
|
|
(1)
|
Amount
previously paid: _________________________________
|
|
(2)
|
Form,
Schedule or Registration Statement No.:________________
|
|
(3)
|
Filing
Party: _________________
|
|
(4)
|
Date
Filed: _______________
|
1.
|
any
director or officer of our company since January 1, 2006, being the
commencement of our last completed audited financial
year;
|
||
2.
|
any
proposed nominee for election as a director of our company;
and
|
|
|
3.
|
any
associate or affiliate of any of the foregoing persons.
|
|
|
Name
of Stockholder
|
Number
of Shares of Common Stock Owned
Beneficially |
%
Outstanding Stock |
Steve
Rubakh (1)
|
60,000,000
|
60.91%
|
Folsom
Family Holdings (2)
|
3,337,500
|
3.39%
|
Amtel
Communications, Inc. (3)
|
3,337,500
|
3.39%
|
Raymond
A. Hatch (4)
|
250,000
|
.25%
|
All
Officers and Directors as a Group (5)
|
63,587,500
|
64.55%
|
(1)
|
Mr.
Rubakh’s address is c/o Power Sports Factory, Inc., 6950 Central Highway,
Pennsauken, NJ 08109. Does not include 402,800 shares of Series
B Preferred Stock also issued to Mr. Rubakh on September 5, 2007,
in
connection with the acquisition of Power Sports Factory, which shares
will
be converted into 4,028,000 shares of common stock upon the effectiveness
of the planned 1-for-20 reverse split of our common
stock.
|
(2)
|
Consists
of shares held by Folsom Family Holdings. Mr. Folsom has a 10% interest
in
such entity. Mr. Folsom's address is c/o the Company. Does not include
3,337,500 shares owned by Amtel Communications, Inc. Mr. Folsom is
an
officer of Amtel.
|
(3)
|
The
address of Amtel is c/o Martin and Associates, #2100-1066 West Hastings
Street, Vancouver, British Columbia, Canada V6E 3X2 and the principal
stockholder of Amtel is Rurik Trust, a Grand Cayman Islands Trust
formed
in 1986.
|
(4)
|
The
address of Raymond A. Hatch is c/o Corporate House, 320 1100 Melville,
Vancouver, B.C. VC64A6 Canada.
|
(5)
|
Does
not include 185,833 shares of Series B Preferred Stock issued to
Mr.
Steven A. Kempenich, our Chief Executive Officer and a Director,
on
September 5, 2007, in connection with the acquisition of Power Sports
Factory, which shares will be converted into 1,858,333 shares of
common
stock upon the effectiveness of the planned 1-for-20 reverse split
of our
common stock.
|
Title
of Security
|
Authorized
At November 30, 2007
|
Outstanding
as of November 30, 2007
|
To
Be Authorized Following
Effectiveness
of Reverse Split
|
To
Be Outstanding Following
Effectiveness
of Reverse Split
|
Common
Stock
|
100,000,000
shs.
|
98,503,940
shs.
|
100,000,000
shs.
|
27,890,957
|
Series
B Convertible Preferred Stock
|
3,000,000
shs.
|
2,296,566
shs.
|
3,000,000*
|
-0-
|
|
The
reverse stock split will have the following effects upon our common
stock:
|
|
*
|
The
number of shares owned by each holder of common stock will be reduced
twenty-fold;
|
|
*
|
The
number of shares of our common stock which will be issued and outstanding
after the Reverse Split will be reduced from 98,503,940 shares to
approximately 4,925,197 shares;
|
*
|
After
the Reverse Split, the outstanding Preferred Stock will be automatically
converted into 22,965,660 shares of common stock, which will result
in a
total of approximately 27,890,857 shares of common stock as being
issued
and outstanding following the effectiveness of the Reverse
Split.
|
|
|
*
|
The
per share loss and net book value of our common stock will be increased
because there will be a lesser number of shares of our common stock
outstanding;
|
|
*
|
The
common stock will remain no par value per
share;
|
|
*
|
All
outstanding options, warrants, and convertible securities entitling
the
holders thereof to purchase shares of common stock will enable such
holders to purchase, upon exercise thereof, 20 times fewer of the
number
of shares of common stock which such holders would have been able
to
purchase upon exercise thereof immediately preceding the reverse
stock
split, at the same aggregate price required to be paid therefor upon
exercise thereof immediately preceding the reverse stock
split.
|
Steven
A. Kempenich
|
(Signature of Authorized Person) |
|
|
|
|
PURCHASE
POINT MEDIA CORP.
|
|
|
(Exact
Name of Registrant as Specified in Charter)
|
|
|
|
|
|
|
Minnesota
|
|
000-25385
|
|
41-1853993
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
Commission
file number
|
|
(IRS
Employer
Identification
No.)
|
|
|
|
|
6950
Central Highway
Pennsauken,
NJ 08109
|
|
|
(Address
of principal executive offices)
|
|
|
|
|
|
(856)
488-9333
|
|
|
(Registrant's
telephone number)
|
|
|
|
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions:
|
|
|
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
Date
|
Title
and Amount (1)
|
Purchaser
|
Principal
Underwriter
|
Total
Offering Price/
Underwriting
Discounts
|
||||
September 5, 2007 |
Following
closing of acquisition of Power Sports Factory, Inc., 21,250
shares of
Series B Convertible Preferred Stock, convertible into common
stock at the
rate of 10 shares of common stock for each share of preferred
stock
following effectiveness of the Company’s 1-for-20 reverse split of its
common stock (the “Reverse Split”).
|
Five
employees.
|
NA
|
$63,750/NA
|
||||
September
27, 2007
|
Four
investors loaned the Company $37,500 each. A 12.0% Convertible
Note in the
principal amount of $37,500, due October 1, 2009 was issued
to each
investor. Each note is convertible into 75,000 shares of common
stock
following effectiveness of the Reverse Split.
|
Private
investors.
|
NA
|
$150,000/NA
|
||||
September
30, 2007
|
30,000
shares of Series B Convertible Preferred Stock issued to two
consultants
and one officer and director, who each converted $50,000 of
debt into
10,000 shares of Series B Convertible Preferred Stock at a
conversion rate
of $5.00 per share. The preferred stock is convertible into
300,000 shares
of common stock following the effectiveness of the Reverse
Split.
|
One
officer and director and two consultants.
|
NA
|
$150,000/NA
|
||||
October
23, 2007
|
50,000
shares of Series B Convertible Preferred Stock, convertible
into 500,000
shares of common stock following the effectiveness of the Reverse
Split.
The investor also received a warrant exercisable on or before
February 29,
2008, to purchase 50,000 shares of Series B Preferred Stock
at an exercise
price of $5.00 per share prior to the effectiveness of the
Reverse Split;
following the effectiveness of the Reverse Split, the warrant
is
exercisable to purchase 500,000 shares of common stock at a
price $.50 a
share.
|
Private
investor.
|
NA
|
$250,000/NA
|
||||
October
26, 2007
|
50,000
shares of Series B Convertible Preferred Stock as deposit to
the principal
manufacturer of the Company’s motor scooter products, such shares of
Preferred Stock being convertible into 500,000 shares of common
stock
following effectiveness of the Reverse Split.
|
Offshore
manufacturer.
|
NA
|
$250,000/NA
|
||||
November
6, 2007
|
12%
Convertible Note in the principal amount of $250,000, due April
30, 2008.
The Note is convertible into 500,000 shares of common stock
following
effectiveness of the Reverse Split.
|
Private
investor.
|
NA
|
$250,000/NA
|
|
•
|
currency
fluctuations;
|
|
•
|
changes
in tariffs and taxes;
|
|
•
|
political
and economic instability; and
|
|
•
|
disruptions
or delays in shipments.
|
Name
|
Age
|
|
Position
|
|
Steve
Rubakh
|
46
|
President,
Acting Chief Financial Officer and Director
|
||
Steven
A. Kempenich
|
36
|
Chief
Executive Officer, Acting Secretary and Director
|
||
Albert
P. Folsom
|
68
|
Director
|
||
Raymond
A. Hatch
|
72
|
Director
|
||
Michael
F. Reuling
|
63
|
Director
|
Name
and Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change
in Pension Value and Nonquali-
fied
Deferred
Compensation
Earnings
($)
|
All
Other Compen-
Sation
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d) |
(e)
|
(f) |
(g)
|
(h)
|
(i) |
(j)
|
Albert
P. Folsom, Chief Executive Officer
|
2006
|
$72,000
|
$72,000
|
||||||
Albert
P. Folsom, Chief Executive Officer
|
2007
|
$72,000
|
$72,000
|
||||||
(1) Salary
shown is accrued as of June 30, 2006 and June 30,
2007.
|
Name
of Stockholder
|
Number
of Shares of Common Stock Owned Beneficially
|
%
Outstanding Stock
|
Steve
Rubakh (1)
|
60,000,000
|
60.91%
|
Folsom
Family Holdings (2)
|
3,337,500
|
3.39%
|
Amtel
Communications, Inc. (3)
|
3,337,500
|
3.39%
|
Raymond
A. Hatch (4)
|
250,000
|
.25%
|
All
Officers and Directors as a Group (5)
|
63,587,500
|
64.55%
|
(1)
|
Mr.
Rubakh’s address is c/o Power Sports Factory, Inc., 6950 Central Highway,
Pennsauken, NJ 08109. Does not include 402,800 shares of Series
B Preferred Stock also issued to Mr. Rubakh on September 5, 2007,
in
connection with the acquisition of Power Sports Factory, which
shares will
be converted into 4,028,000 shares of common stock upon the effectiveness
of the planned 1-for-20 reverse split of our common
stock.
|
(2)
|
Consists
of shares held by Folsom Family Holdings. Mr. Folsom has a 10%
interest in
such entity. Mr. Folsom's address is c/o the Company. Does not
include
3,337,500 shares owned by Amtel Communications, Inc. Mr. Folsom
is an
officer of Amtel.
|
(3)
|
The
address of Amtel is c/o Martin and Associates, #2100-1066 West
Hastings
Street, Vancouver, British Columbia, Canada V6E 3X2 and the principal
stockholder of Amtel is Rurik Trust, a Grand Cayman Islands Trust
formed
in 1986.
|
(4)
|
The
address of Raymond A. Hatch is c/o Corporate House, 320 1100
Melville
VC64A6.
|
(5)
|
Does
not include 185,833 shares of Series B Preferred Stock issued
to Mr.
Steven A. Kempenich, our Chief Executive Officer and a Director,
on
September 5, 2007, in connection with the acquisition of Power
Sports
Factory, which shares will be converted into 1,858,333 shares
of common
stock upon the effectiveness of the planned 1-for-20 reverse
split of our
common stock.
|
POWER
SPORTS FACTORY, INC.
|
||||||||
BALANCE
SHEETS
|
||||||||
ASSETS
|
||||||||
December
31,
|
||||||||
2006
|
2005
|
|||||||
Current
Assets:
|
||||||||
Cash
|
$ |
46,740
|
40,704
|
|||||
Cash
- restricted
|
173,264
|
-
|
||||||
Accounts
receivable
|
-
|
199,680
|
||||||
Note
receivable - related party
|
166,400
|
166,400
|
||||||
Investment
|
-
|
65,000
|
||||||
Inventory
|
1,612,904
|
1,175,868
|
||||||
Prepaid
expenses
|
-
|
7,385
|
||||||
Total
Current Assets
|
1,999,308
|
1,655,037
|
||||||
Property
and equipment-net
|
57,493
|
13,518
|
||||||
Other
assets
|
13,876
|
4,000
|
||||||
TOTAL
ASSETS
|
$ |
2,070,677
|
$ |
1,672,555
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable
|
$ |
120,206
|
$ |
392,442
|
||||
Notes
payable
|
1,570,376
|
-
|
||||||
Current
portion of long-term debt
|
2,540
|
-
|
||||||
Note
payable to related party
|
54,266
|
298,341
|
||||||
Accrued
expenses
|
122,873
|
60,441
|
||||||
Income
taxes payable
|
128,032
|
425,014
|
||||||
Total
Current Liabilities
|
1,998,293
|
1,176,238
|
||||||
Long
term liabilities:
|
||||||||
Long-term
debt - less current portion
|
12,639
|
-
|
||||||
TOTAL
LIABILITIES
|
2,010,932
|
1,176,238
|
||||||
Stockholders'
Equity:
|
||||||||
Common
stock, $1.00 par value -
|
||||||||
1,500
shares authorized and outstanding, respectively
|
1,500
|
1,500
|
||||||
Retained
earnings
|
58,245
|
494,817
|
||||||
Total
Stockholders' Equity
|
59,745
|
496,317
|
||||||
TOTAL
LIABILITIES AND
|
||||||||
STOCKHOLDERS'
EQUITY
|
$ |
2,070,677
|
$ |
1,672,555
|
||||
See
Notes to Financial Statements
|
POWER
SPORTS FACTORY, INC.
|
||||||||
STATEMENTS
OF OPERATIONS
|
||||||||
Years
Ended
|
||||||||
December
31,
|
||||||||
2006
|
2005
|
|||||||
Net
sales
|
$ |
4,877,155
|
$ |
8,938,157
|
||||
Costs
and Expenses:
|
||||||||
Cost
of sales
|
4,170,525
|
6,747,550
|
||||||
Selling,
general and administrative
|
||||||||
expenses
|
1,333,788
|
1,127,603
|
||||||
5,504,313
|
7,875,153
|
|||||||
Income
(loss) from operations
|
(627,158 | ) |
1,063,004
|
|||||
Other
expenses:
|
||||||||
Interest
|
(106,396 | ) | (18,381 | ) | ||||
Earnings
(loss) before provision
|
||||||||
for
income taxes
|
(733,554 | ) |
1,044,623
|
|||||
Income
tax (benefit) provision
|
296,982
|
(409,000 | ) | |||||
Net
earnings (loss)
|
$ | (436,572 | ) | $ |
635,623
|
|||
See
Notes to Financial Statements
|
POWER
SPORTS FACTORY, INC.
|
||||||||||||||||
STATEMENTS
OF STOCKHOLDERS' EQUITY
|
||||||||||||||||
Common
Stock
|
Retained
|
|||||||||||||||
Stated
|
Earnings
|
|||||||||||||||
Shares
|
Value
|
(Deficit)
|
Total
|
|||||||||||||
Balance,
January 1, 2005
|
1,500
|
$ |
1,500
|
$ | (140,806 | ) | $ | (139,306 | ) | |||||||
Net
income for the year ended
|
||||||||||||||||
December
31, 2005
|
-
|
-
|
635,623
|
635,623
|
||||||||||||
Balance,
December 31, 2005
|
1,500
|
1,500
|
494,817
|
496,317
|
||||||||||||
Net
loss for the year ended
|
||||||||||||||||
December
31, 2006
|
-
|
-
|
(436,572 | ) | (436,572 | ) | ||||||||||
Balance,
December 31, 2006
|
1,500
|
$ |
1,500
|
$ |
58,245
|
$ |
59,745
|
|||||||||
See
Notes to Financial Statements
|
STATEMENT
OF CASH FLOWS
|
||||||||
Years
ended
|
||||||||
December
31,
|
||||||||
CASH
FLOW FROM
|
2006
|
2005
|
||||||
OPERATING
ACTIVITIES:
|
||||||||
Net
ncome (loss)
|
$ | (436,572 | ) | $ |
635,623
|
|||
Adjustments
to reconcile
|
||||||||
net
(loss) income to net cash
|
||||||||
used
in operating
|
||||||||
activities:
|
||||||||
Depreciation
and
|
||||||||
amortization
|
7,984
|
696
|
||||||
Changes
in operating assets
|
||||||||
and
liabilities
|
(746,633 | ) | (657,015 | ) | ||||
Net
cash used in
|
||||||||
operating
activities
|
(1,175,221 | ) | (20,696 | ) | ||||
CASH
FLOW FROM
|
||||||||
INVESTING
ACTIVITIES:
|
||||||||
Investment
|
65,000
|
(65,000 | ) | |||||
Purchase of
equipment
|
(36,459 | ) | (14,214 | ) | ||||
Change
in restricted cash
|
(173,264 | ) |
-
|
|||||
Net
cash used in
|
||||||||
investing
activities
|
(144,723 | ) | (79,214 | ) | ||||
CASH
FLOW FROM
|
||||||||
FINANCING
ACTIVITIES:
|
||||||||
Proceeds
from related party
|
220,000
|
333,600
|
||||||
Payment
to related party
|
(464,075 | ) | (201,659 | ) | ||||
Proceeds
from loan payable
|
2,766,734
|
-
|
||||||
Payment
on loan
|
(1,196,679 | ) |
-
|
|||||
Net
cash provided by financing activities
|
1,325,980
|
131,941
|
||||||
Net
increase in cash
|
6,036
|
32,031
|
||||||
Cash
- beginning of year
|
40,704
|
8,673
|
||||||
Cash
- end of year
|
$ |
46,740
|
$ |
40,704
|
||||
Changes
in operating assets
|
||||||||
and
liabilities consists of:
|
||||||||
Decrease
(increase) in accounts receivable
|
$ |
199,680
|
$ | (196,680 | ) | |||
Increase
in inventory
|
(437,036 | ) | (894,541 | ) | ||||
(Increase)
decrease in prepaid expenses
|
7,385
|
(7,385 | ) | |||||
Increase
in other assets
|
(9,876 | ) | (4,000 | ) | ||||
Increase
in accounts payable
|
(272,236 | ) | (32,658 | ) | ||||
(Decrease)
increase in accrued expenses
|
(234,550 | ) |
478,249
|
|||||
$ | (746,633 | ) | $ | (657,015 | ) | |||
Supplementary
information:
|
||||||||
Cash
paid during the year for:
|
||||||||
Income
taxes
|
$ |
-
|
$ |
-
|
||||
Interest
|
$ |
-
|
$ |
18,381
|
||||
See
Notes to Financial Statements
|
1.
|
Description
of Business and Summary of Significant Accounting
Policies
|
2.
|
Inventories
|
December
31,
|
|||||||
2006
|
2005
|
||||||
Finished
goods
|
$ |
1,534,314
|
$ |
1,050,641
|
|||
Parts
|
78,590
|
125,227
|
|||||
$ |
1,612,904
|
$ |
1,175,868
|
3.
|
Property
and Equipment
|
December
31,
|
|||||||
2006
|
2005
|
||||||
Equipment
|
$ |
19,204
|
7,120
|
||||
Signs
|
7,040
|
1,020
|
|||||
Software
|
15,500
|
-
|
|||||
Leasehold
improvements
|
27,609
|
9,254
|
|||||
69,353
|
17,394
|
||||||
Less:
accumulated depreciation
|
11,860
|
3,876
|
|||||
$ |
57,493
|
$ |
13,518
|
4.
|
Long-term
debt
|
Year
Ending
|
|||
December
31,
|
|||
2007
|
2,540
|
||
2008
|
2,654
|
||
2009
|
3,188
|
||
2010
|
3,828
|
||
2011
|
2,969
|
||
15,179
|
|||
Current
Portion
|
2,540
|
||
$ |
12,639
|
5.
|
Note
Payable
|
6.
|
Accrued
Expenses
|
December
31,
|
|||||||
2006
|
2005
|
||||||
Professional
fees
|
$ |
50,000
|
$ |
35,000
|
|||
Payroll
tax expense
|
28,260
|
11,667
|
|||||
Advertising
|
11,505
|
-
|
|||||
Rent
|
8,800
|
-
|
|||||
Accrued
commissions
|
7,800
|
-
|
|||||
Freight
|
-
|
9,649
|
|||||
Other
accrued expenses
|
16,508
|
4,125
|
|||||
$ |
122,873
|
$ |
60,441
|
7.
|
Note
Receivable/Note Payable - Related
Party
|
8.
|
Stockholders’
Equity
|
9.
|
Income
Taxes
|
10.
|
Commitments
and Contingencies
|
Year
Ending
|
|||
December
31 ,
|
|||
2007
|
$ |
129,568
|
|
2008
|
|
87,576
|
|
$ |
217,144
|
Year
Ending
|
|||
December
31,
|
|||
2007
|
$ |
4,769
|
|
2008
|
4,769
|
||
2009
|
4,769
|
||
2010
|
4,769
|
||
2011
|
3,974
|
||
$ |
23,050
|
11.
|
Subsequent
Events
|
a)
|
On
January 1, 2007, the Company retained a consultant to provide
advisory
services in business strategy, recapitalization, mergers and
acquisitions,
negotiation of indebtedness, licensing and other services. The
contract was for five months at a flat fee of
$150,000.
|
b)
|
Beginning
January 18, 2007, an officer and director of the Company made
working
capital available to the Company for varying purposes. The
agreement is oral, interest-free and subject to demand. On
August 13, 2007, the amount owed under this obligation was
$166,400.
|
c)
|
On
April 1, 2007, the Company hired two consultants to provide transition
management services, business planning, managerial systems analysis,
sales
and distribution assistance and inventory management systems
services. Both contracts are each $15,000 per month and can be
terminated at will when the Company decides that the services
have been
completed and/or are no longer
necessary.
|
d)
|
On
April 24, 2007, Purchase Point Media Corp. (PPMC), entered
into a Share
Exchange and Acquisition Agreement with the stockholders of
Power Sports
Factory, Inc. (“PSF”), whereby the stockholders of PSF agreed to exchange
100% of the shares of PSF for a total of 17,500,000 shares
of common stock
of PPMC, to be effective after the 1 for 20 reverse split of
the common
stock of PPMC. On May 14, 2007, the Company issued 60,000,000
shares of common stock to the major shareholder of PSF, and
on August 31,
2007, entered into an amendment to the Share Exchange and Acquisition
Agreement that provided for a completion of the acquisition
of PSF at a
closing (the “Closing”) held on September 5, 2007. The
amendment provided for an effective adjustment from 17,500,000
shares of
common stock to an aggregate of 19,500,000. At the closing the
Company issued 1,650,000 shares of a new Series B Convertible
Preferred
Stock (the “Preferred Stock”) to the shareholders of PSF, to complete the
acquisition of PSF. Each share of Preferred Stock is
convertible into 10 shares of our common stock following effectiveness
of
the reverse split, at which time, each share of Preferred Stock
is
automatically converted into 10 shares of common stock. After
the completion of the share exchange as set forth in the Share
Exchange
and Acquisition Agreement, and the effectiveness of the reverse
split, the
total number of issued and outstanding shares of PPMC will
be
approximately 25,400,000 shares of common
stock.
|
e)
|
On
May 15, 2007, the Company entered into an exclusive licensing
agreement
with Andretti IV, LLC, a Pennsylvanian limited liability company
to brand
motorcycles and scooters. Andretti IV holds and contracts the
personal name, likeness and endorsement rights of certain members
of the
Mario Andretti family. The term of the agreement is through
December 31, 2017. Royalties under the agreement are tied to
motorcycle and scooter sales branded under the “Andretti
line”. The agreement calls for a Minimum Annual
Guarantee. After Year Two of the agreement, if the Company does
not sell a certain minimum number of motorcycles and scooters
under the
“Andretti Line” it may elect to terminate the licensing
agreement. A consultant working for the company co-guaranteed
the Minimum Annual Guarantee for the first two years and receives
a
4.1667% of the license fees as a fee throughout the life of the
license
related to that work. The consultant subsequently became an officer
and
director of the company.
|
f)
|
On
May 22, 2007, PPMC made $200,000 of working capital available
to the
Company.
|
g)
|
On
June 1, 2007, the Company hired Steven A. Kempenich as its
Chief Executive
Officer and
a director of the Company. His contract is a two-year agreement
at $16,666 per month.
|
h)
|
On
June 6, 2007, one of our officers and directors made a short
term loan to
the Company in the
amount of $90,000. The loan was secured by scooter
inventory. The interest rate on the loan
was 12%. Principal of the loan was to be repaid as the
collateral was sold. The loan was
due July 15, 2007. On July 23, 2007, the outstanding balance of
the loan was paid in full
satisfactory terms of the
agreement.
|
i)
|
On
July 31, 2007, the Company borrowed $80,000 from an
investor. The note matures on January
31, 2008 at which time the principal amount plus ten percent
interest is
due. The note
also provides the Lender with the equivalent of 200,000
pre-split common
shares.
|
POWER
SPORTS FACTORY, INC.
|
||||||||
BALANCE
SHEETS
|
||||||||
ASSETS
|
||||||||
June
30,
|
December
31,
|
|||||||
2007
|
2006
|
|||||||
Current
Assets:
|
(Unaudited)
|
|||||||
Cash
|
$ |
42,167
|
$ |
46,740
|
||||
Cash
- restricted
|
-
|
173,264
|
||||||
Accounts
receivable
|
12,844
|
-
|
||||||
Note
receivable - related party
|
-
|
166,400
|
||||||
Deposit
on inventory
|
57,720
|
|||||||
Inventory
|
264,295
|
1,612,904
|
||||||
Prepaid
expenses
|
37,500
|
-
|
||||||
Total
Current Assets
|
414,526
|
1,999,308
|
||||||
Property
and equipment-net
|
30,280
|
57,493
|
||||||
Other
assets
|
9,876
|
13,876
|
||||||
TOTAL
ASSETS
|
$ |
454,682
|
$ |
2,070,677
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
payable
|
$ |
449,746
|
$ |
120,206
|
||||
Notes
payable
|
1,883
|
1,570,376
|
||||||
Current
portion of long-term debt
|
1,023
|
2,540
|
||||||
Note
payable to related party
|
266,581
|
54,266
|
||||||
Accrued
expenses
|
74,231
|
122,873
|
||||||
Income
taxes payable
|
-
|
128,032
|
||||||
Total
Current Liabilities
|
793,464
|
1,998,293
|
||||||
Long
term liabilites:
|
||||||||
Long-term
debt - less current portion
|
13,134
|
12,639
|
||||||
TOTAL
LIABILITIES
|
806,598
|
2,010,932
|
||||||
Stockholders'
Equity (Deficiency):
|
||||||||
Common
stock, $1.00 par value -
|
||||||||
1,500
shares authorized and outstanding, respectively
|
1,500
|
1,500
|
||||||
Retained
earnings (Deficit)
|
(353,416 | ) |
58,245
|
|||||
Total
Stockholders' Equity (Deficiency)
|
(351,916 | ) |
59,745
|
|||||
TOTAL
LIABILITIES AND
|
||||||||
STOCKHOLDERS'
EQUITY (DEFICIENCY)
|
$ |
454,682
|
$ |
2,070,677
|
||||
See
Notes to Financial Statements
|
POWER
SPORTS FACTORY, INC.
|
||||||||||||||||
STATEMENTS
OF OPERATIONS
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
Six
Months Ended June 30,
|
Three
Months Ended June 30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
sales
|
$ |
1,678,886
|
$ |
2,534,416
|
$ |
871,754
|
$ |
1,720,829
|
||||||||
Costs
and Expenses:
|
||||||||||||||||
Cost
of sales
|
1,373,203
|
2,123,197
|
693,529
|
1,428,007
|
||||||||||||
Selling,
general and administrative
|
||||||||||||||||
expenses
|
800,728
|
661,156
|
515,200
|
383,556
|
||||||||||||
2,173,931
|
2,784,353
|
1,208,729
|
1,811,563
|
|||||||||||||
(Loss)
from operations
|
(495,045 | ) | (249,937 | ) | (336,975 | ) | (90,734 | ) | ||||||||
Other
expenses:
|
||||||||||||||||
Interest
|
(44,648 | ) | (24,955 | ) | (11,709 | ) | (16,933 | ) | ||||||||
Loss
before provision
|
||||||||||||||||
for
(benefit from) income taxes
|
(539,693 | ) | (274,892 | ) | (348,684 | ) | (107,667 | ) | ||||||||
Income
tax (benefit) provision
|
(128,032 | ) |
-
|
(51,743 | ) |
-
|
||||||||||
Net
(loss)
|
$ | (411,661 | ) | $ | (274,892 | ) | $ | (296,941 | ) | $ | (107,667 | ) | ||||
See
Notes to Financial Statements
|
POWER
SPORTS FACTORY, INC.
|
||||||||||||||||
STATEMENTS
OF STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
Common
Stock
|
Retained
|
|||||||||||||||
Stated
|
Earnings
|
|||||||||||||||
Shares
|
Value
|
(Deficit)
|
Total
|
|||||||||||||
Balance,
January 1, 2006
|
1,500
|
$ |
1,500
|
$ |
494,817
|
$ |
496,317
|
|||||||||
Net
loss for the year ended
|
||||||||||||||||
December
31, 2006
|
-
|
-
|
(436,572 | ) | (436,572 | ) | ||||||||||
Balance,
December 31, 2006
|
1,500
|
1,500
|
58,245
|
59,745
|
||||||||||||
Net
loss for the six months ended
|
||||||||||||||||
June
30, 2007
|
-
|
-
|
(411,661 | ) | (411,661 | ) | ||||||||||
Balance,
June 30, 2007
|
1,500
|
$ |
1,500
|
$ | (353,416 | ) | $ | (351,916 | ) | |||||||
See
Notes to Financial Statements
|
STATEMENT
OF CASH FLOWS
|
||||||||
(UNAUDITED)
|
||||||||
Six
Months Ended
|
||||||||
June
30,
|
||||||||
2007
|
2006
|
|||||||
CASH
FLOW FROM
|
||||||||
OPERATING
ACTIVITIES:
|
||||||||
Net
(loss)
|
$ | (411,661 | ) | $ | (274,892 | ) | ||
Adjustments
to reconcile
|
||||||||
net
(loss) income to net cash
|
||||||||
used
in operating
|
||||||||
activities:
|
||||||||
Depreciation
and
|
||||||||
amortization
|
4,366
|
3737
|
||||||
Loss
on abandonment of
|
||||||||
leasehold
improvements
|
22,847
|
-
|
||||||
Changes
in operating assets
|
||||||||
and
liabilities
|
1,563,761
|
(765,903 | ) | |||||
Net
cash provided by (used in)
|
||||||||
operating
activities
|
1,179,313
|
(1,037,058 | ) | |||||
CASH
FLOW FROM
|
||||||||
INVESTING
ACTIVITIES:
|
||||||||
Purchase of
equipment
|
-
|
(29,522 | ) | |||||
Change
in restricted cash
|
173,264
|
(21,000 | ) | |||||
Net
cash provided by (used in)
|
||||||||
investing
activities
|
173,264
|
(50,522 | ) | |||||
CASH
FLOW FROM
|
||||||||
FINANCING
ACTIVITIES:
|
||||||||
Proceeds
from related party
|
290,000
|
-
|
||||||
Payment
to related party
|
(77,685 | ) | (159,177 | ) | ||||
Proceeds
from loan payable
|
-
|
2,437,481
|
||||||
Payment
on loan
|
(1,569,515 | ) | (1,042,802 | ) | ||||
Net
cash provided by (used in)
|
||||||||
financing
activities
|
(1,357,200 | ) |
1,235,502
|
|||||
Net
(decrease) increase in cash
|
(4,623 | ) |
147,922
|
|||||
Cash
- beginning of year
|
46,740
|
40,704
|
||||||
Cash
- end of year
|
$ |
42,117
|
$ |
188,626
|
||||
Changes
in operating assets
|
||||||||
and
liabilities consists of:
|
||||||||
Decrease
in accounts receivable
|
$ |
153,556
|
$ |
199,680
|
||||
Decrease
(increase) in inventory
|
1,348,609
|
(581,868 | ) | |||||
(Increase)
in prepaid expenses
|
(37,500 | ) |
-
|
|||||
(Increase)
deposit on bikes
|
(57,720 | ) | ||||||
Decrease
(increase) in other assets
|
4,000
|
(8,800 | ) | |||||
Increase
(decrease) in accounts payable
|
329,540
|
(390,170 | ) | |||||
(Decrease)
increase in accrued expenses
|
(176,724 | ) | (23,205 | ) | ||||
Increase
in customer deposits
|
-
|
38,460
|
||||||
$ |
1,563,761
|
$ | (765,903 | ) | ||||
Supplementary
information:
|
||||||||
Cash
paid during the year for:
|
||||||||
Income
taxes
|
$ |
-
|
$ |
-
|
||||
Interest
|
$ |
49,088
|
$ |
24,955
|
||||
See
Notes to Financial Statements
|
2.
|
Inventories
|
June
30
|
December
31
|
||||||
2007
|
2006
|
||||||
Finished
goods
|
$ |
206,745
|
$ |
1,534,314
|
|||
Parts
|
57,550
|
78,590
|
|||||
$ |
264,295
|
1,612,904
|
|||||
3.
|
Property
and Equipment
|
June
30
|
December
31
|
||||||
2007
|
2006
|
||||||
Equipment
|
$ |
19,204
|
19,204
|
||||
Signs
|
7,040
|
7,040
|
|||||
Software
|
15,500
|
15,500
|
|||||
Leasehold
improvements
|
-
|
27,609
|
|||||
47,744
|
69,353
|
||||||
Less:
accumulated depreciation
|
11,464
|
11,860
|
|||||
$ |
30,280
|
$ |
57,593
|
||||
4.
|
Long-term
debt
|
December
31,
|
|||
2007
|
$ |
1,518
|
|
2008
|
2,654
|
||
2009
|
3,188
|
||
2010
|
3,828
|
||
2011
|
2,969
|
||
14,157 | |||
1,023 | |||
$ |
13,134
|
5.
|
Note
Payable
|
6.
|
Accrued
Expenses
|
June
30,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Professional
fees
|
$ |
37,500
|
$ |
50,000
|
|||
Payroll
tax expense
|
13,694
|
28,260
|
|||||
Advertising
|
-
|
11,505
|
|||||
Rent
|
-
|
8,800
|
|||||
Accrued
commissions
|
22,035
|
7,800
|
|||||
Other
accrued expenses
|
1,002
|
16,508
|
|||||
$ |
74,231
|
$ |
122,873
|
7.
|
Note
Receivable/Note Payable - Related
Party
|
8.
|
Stockholders’
Equity
|
9.
|
Income
Taxes
|
10.
|
Commitments
and Contingencies
|
11.
|
Subsequent
Events
|
Proforma
Balance
|
||||||||||||||||||||
PPMC
|
PSF
|
Proforma
|
Balance
Sheet
|
|||||||||||||||||
6/30/2007
|
6/30/2007
|
Adustments
|
6/30/2007
|
|||||||||||||||||
Current
assets
|
$ |
201,550
|
$ |
414,526
|
(1 | ) | $ | (201,500 | ) | $ |
414,526
|
|||||||||
Equipment
|
1,661
|
30,280
|
(1 | ) | (1,661 | ) |
30,280
|
|||||||||||||
Other
assets
|
8,443
|
9,876
|
(1 | ) | (8,443 | ) |
9,876
|
|||||||||||||
Total
Assets
|
$ |
211,604
|
$ |
454,682
|
$ |
454,682
|
||||||||||||||
Liabilities
|
$ |
2,042,836
|
$ |
806,598
|
(1 | ) | $ | (2,042,836 | ) | $ |
806,598
|
|||||||||
Stockholders’
deficiency
|
(1,831,232 | ) | (351,916 | ) | (1 | )(2) | (1,831,232 | ) | (351,916 | ) | ||||||||||
Total
Liabilities and Stockholders’ deficiency
|
$ |
211,604
|
$ |
454,682
|
$ |
454,682
|
||||||||||||||
(1)
|
To
reflect spin-off of PPMC's Last Word
subsidiary.
|
(2)
|
To
reflect the recapitalization of the issuance of merger
shares.
|
PPMC
|
PPMC
|
|||||||||||||||
Historical
|
Proforma
|
|||||||||||||||
Year
Ended
|
Profoma
|
Year
Ended
|
||||||||||||||
June
30,2007
|
Adjustments
|
June
30,2007
|
||||||||||||||
Revenue
|
$ |
-
|
4,021,625
|
(1 | ) | $ |
4,021,625
|
|||||||||
Costs
and Expenses:
|
||||||||||||||||
Cost
of sales
|
-
|
3,420,531
|
(1 | ) |
3,420,531
|
|||||||||||
1,473,360
|
(1 | ) | ||||||||||||||
General
and administrative expenses
|
366,261
|
(366,261 | ) | (2 | ) |
1,473,360
|
||||||||||
366,261
|
4,893,891
|
|||||||||||||||
Net
loss from operations
|
(366,321 | ) | (872,266 | ) | ||||||||||||
(126,089 | ) | (1 | ) | |||||||||||||
Other
income (expenses)
|
(76,976 | ) |
76,976
|
(2 | ) | (126,089 | ) | |||||||||
Net
loss before provision (benefit) from income taxes
|
(443,237 | ) | (998,355 | ) | ||||||||||||
Provision
for (benefit from) income taxes
|
-
|
(425,014 | ) | (1 | ) | (425,014 | ) | |||||||||
Net
loss
|
$ | (443,237 | ) | $ | (573,341 | ) | ||||||||||
Loss
per common share -
|
||||||||||||||||
basic
and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | ||||||||||
Average
outstanding shares-
|
||||||||||||||||
basic
and diluted
|
32,290,000
|
92,290,000
|
||||||||||||||
(1)
|
To
reflect historical revenue and operation results for the period
July 1,
2006 to June 30, 2007.
|
(2)
|
To
reflect spin off of Purchase Point Media Corporation's Last Word
subsidiary subsequent to the
merger.
|
PURCHASE
POINT MEDIA CORPORATION
|
|||
Date:
November
16, 2007
|
By:
|
/s/ Steven Kempenich | |
Steven Kempenich | |||