ITEM
1. FINANCIAL STATEMENTS
The
Tradeshow Marketing Company, Ltd.
Balance
Sheets
(unaudited)
|
|
|
|
February 28,
2007
|
|
|
May 31,
2006
|
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
(Restated)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
127,788
|
|
$
|
43,538
|
|
|
Accounts
Receivable
|
|
|
17,884
|
|
|
-
|
|
|
Prepaid
Expenses
|
|
|
17,960
|
|
|
|
|
|
Inventory
|
|
|
56,108
|
|
|
36,436
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
219,740
|
|
|
79,974
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Assets
|
|
|
|
|
|
|
|
|
Equipment
- Net
|
|
|
21,719
|
|
|
28,805
|
|
|
Vehicles
- Net
|
|
|
11,610
|
|
|
14,305
|
|
|
Network
Infrastructure & Software
|
|
|
38,803
|
|
|
43,763
|
|
|
Other
Assets
|
|
|
3,486
|
|
|
3,673
|
|
|
|
|
|
|
|
|
|
|
|
Total
Long Term Assets
|
|
|
75,618
|
|
|
90,546
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
295,358
|
|
$
|
170,520
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
17,532
|
|
$
|
46,423
|
|
|
Shareholder
Loan - Related Party
|
|
|
95,187
|
|
|
28,673
|
|
|
Current
Portion - Vehicle Loan
|
|
|
5,739
|
|
|
5,484
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
118,458
|
|
|
80,580
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Loan
|
|
|
7,699
|
|
|
13,069
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
126,157
|
|
|
93,649
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, authorized
|
|
|
|
|
|
|
|
|
50,000,000
shares, par value $0.0001,
|
|
|
|
|
|
|
|
|
issued
and outstanding on February 28 ,
|
|
|
|
|
|
|
|
|
2007
and May 31, 2006 is 19,149,033
|
|
|
|
|
|
|
|
|
and
17,869,283 respectively
|
|
|
1,917
|
|
|
1,789
|
|
|
Paid
in Capital
|
|
|
856,301
|
|
|
510,913
|
|
|
Subscription
Receivable
|
|
|
-
|
|
|
-
|
|
|
Accumulated
Currency Translation
|
|
|
-
|
|
|
14,141
|
|
|
Accumulated
Deficit
|
|
|
(689,017
|
)
|
|
(449,972
|
)
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
169,201
|
|
|
76,871
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$
|
295,358
|
|
$
|
170,520
|
|
The
accompanying notes are an integral part of these statements
The
Tradeshow Marketing Company, Ltd.
Statments
of Operations
(unaudited)
|
|
|
|
Nine Months Ended
|
|
|
Three
Months Ended
February
28,
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
Revenue
|
|
$
|
344,686
|
|
$
|
246,465
|
|
$
|
145,989
|
|
$
|
168,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
152,973
|
|
|
130,664
|
|
|
35,694
|
|
|
67,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
191,713
|
|
|
115,801
|
|
|
110,295
|
|
|
101,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
331,173
|
|
|
323,734
|
|
|
136,078
|
|
|
94,953
|
|
|
Professional
Fees
|
|
|
99,585
|
|
|
63,869
|
|
|
70,532
|
|
|
2,827
|
|
|
Officer
Compensation
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
430,758
|
|
|
387,603
|
|
|
206,610
|
|
|
97,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
$
|
(239,045
|
)
|
$
|
(271,802
|
)
|
$
|
(96,315
|
)
|
$
|
3,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
per Share
|
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
(0.01
|
)
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Shares
|
|
|
18,136,177
|
|
|
17,640,886
|
|
|
18,136,177
|
|
|
17,640,886
|
|
The
accompanying notes are an integral part of these statements
The
Tradeshow Marketing Company, Ltd.
Restated
Statements of Stockholders' Equity
(unaudited)
Dec
5, 2003 (Inception) to February 28, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
Capital
|
|
|
|
|
|
|
|
|
14,141
|
|
|
|
|
|
(14,141
|
)
|
|
|
|
|
-
|
|
|
Shares
Issued for Cash at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.50
per share
|
|
|
20,000
|
|
|
2
|
|
|
9,998
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
Shares
issued for Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.10 per share
|
|
|
25,750
|
|
|
3
|
|
|
12,872
|
|
|
|
|
|
|
|
|
|
|
|
12,875
|
|
|
Shares
issued for Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.25 per share
|
|
|
200,000
|
|
|
20
|
|
|
49,980
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
Shares
issued for Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.25 per share
|
|
|
714,000
|
|
|
71
|
|
|
178,429
|
|
|
|
|
|
|
|
|
|
|
|
178,500
|
|
|
Shares
issued for Conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
Debt at $0.25 per share
|
|
|
320,000
|
|
|
32
|
|
|
79,968
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(239,045
|
)
|
|
(239,045
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
February 28, 2007
|
|
|
19,149,033
|
|
$
|
1,917
|
|
$
|
856,301
|
|
$
|
-
|
|
$
|
-
|
|
$
|
(689,017
|
)
|
$
|
169,201
|
|
The
accompanying notes are an integral part of these statements
The
Tradeshow Marketing Company, Ltd.
Statements
of Cash Flows
(unaudited)
|
|
|
|
Nine
Months Ended
February
28,
|
|
|
Three
Months Ended
February
28,
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
$
|
(239,045
|
)
|
$
|
(271,802
|
)
|
$
|
(96,315
|
)
|
$
|
3,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
issued for service
|
|
|
62,875
|
|
|
30
|
|
|
50,000
|
|
|
(20
|
)
|
|
Contributed
Capital
|
|
|
14,141
|
|
|
18,096
|
|
|
-
|
|
|
-
|
|
|
Stock
Cancelled
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Stock
Issued for Conversion of Debt
|
|
|
80,000
|
|
|
-
|
|
|
80,000
|
|
|
-
|
|
|
Subscriptions
Receivable
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
Depreciation
/ Amortization Expense
|
|
|
12,696
|
|
|
3,030
|
|
|
2,774
|
|
|
1,010
|
|
|
Foreign
Currency Translation
|
|
|
(14,141
|
)
|
|
(3,177
|
)
|
|
|
|
|
2,974
|
|
|
Changes
in Assets and Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)/Decrease
in Inventory
|
|
|
(19,672
|
)
|
|
(34,708
|
)
|
|
(33,004
|
)
|
|
(22,950
|
)
|
|
(Increase)/Decrease
in Accounts Receivable
|
|
|
(17,884
|
)
|
|
(4,846
|
)
|
|
2,133
|
|
|
17,847
|
|
|
(Increase)/Decrease
in Other Assets
|
|
|
187
|
|
|
3,759
|
|
|
167
|
|
|
150
|
|
|
(Increase)/Decrease
in Prepaid Expense
|
|
|
(17,960
|
)
|
|
-
|
|
|
(17,960
|
)
|
|
-
|
|
|
Increase/(Decrease)
in Payables
|
|
|
(28,891
|
)
|
|
8,122
|
|
|
16,763
|
|
|
25,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) by Operating Activities
|
|
|
(167,694
|
)
|
|
(281,496
|
)
|
|
4,558
|
|
|
27,534
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of Network Infastructure
|
|
|
688
|
|
|
(25,875
|
)
|
|
-
|
|
|
(25,875
|
)
|
|
Equipment
Purchase
|
|
|
1,357
|
|
|
(18,390
|
)
|
|
-
|
|
|
(6,869
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
(Used) by Investment Activities
|
|
|
2,045
|
|
|
(44,265
|
)
|
|
-
|
|
|
(32,744
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Shareholder Loans
|
|
|
66,514
|
|
|
1,359
|
|
|
(71,502
|
)
|
|
(1,160
|
)
|
|
Proceeds/(Payments)
- Equipment Financing
|
|
|
(5,115
|
)
|
|
(2,274
|
)
|
|
(2,098
|
)
|
|
(726
|
)
|
|
Proceeds
from sale of Common Stock
|
|
|
188,500
|
|
|
302,716
|
|
|
178,500
|
|
|
58,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Provided by Financing Activities
|
|
|
249,899
|
|
|
301,801
|
|
|
104,900
|
|
|
57,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase / (Decrease) in Cash
|
|
|
84,250
|
|
|
(23,960
|
)
|
|
109,458
|
|
|
51,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
Beginning of Period
|
|
|
43,538
|
|
|
86,876
|
|
|
18,330
|
|
|
11,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
End of Period
|
|
$
|
127,788
|
|
$
|
62,916
|
|
$
|
127,788
|
|
$
|
62,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
company relocated its home office to the U.S. and adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the
foreign currency translation to contributed capital:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Paid
|
|
$
|
2,156
|
|
$
|
5,371
|
|
$
|
2,156
|
|
$
|
2,381
|
|
|
Income
Taxes Paid
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these statements
THE
TRADESHOW MARKETING COMPANY INC
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
(February
28, 2007 and May 31, 2006)
|
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, infomercials, specialty product shops and kiosks in
malls. The Company through February 28, 2007 has been selling at tradeshows
and
in malls, as well as online..
On
August
31, 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.
These
statements have been adjusted to reflect the restatement of the Company’s May
31, 2006 and 2005 audited financial statements.
|
NOTE
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
PRACTICES
|
The
relevant accounting policies and procedures are listed below.
Adjustments
within Financial Statements
These
statements have been adjusted to reflect the restatement of the Company’s May
31, 2006 and 2005 audited financial statements. Please refer to the restated
financials for May 21, 1006 and 2005 for details.
The
Balance Sheet and Statement of Stockholders’ Equity for the current nine month
period ended February 28, 2007 has been adjusted to reflect the increase in
Paid
in Capital of $14,141 to eliminate the $14,141 accumulated foreign currency
translation.
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 maintained its
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.
On
June
1, 2006 the Company relocated its headquarters to Phoenix, Arizona and
established its accounts in U.S. Banks and adopted the U.S. Dollar as its
functional currency. The company has eliminated its accumulated adjustment
for
foreign currency translation to contributed capital.
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 February 28, 2007 and May 31, 2006 was $9,588, and $4,327
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.
|
|
|
|
28-Feb-
06
|
|
|
31-May-
06
|
|
|
Equipment
|
|
$
|
27,050
|
|
$
|
32,387
|
|
|
Accumulated
Depreciation
|
|
|
(5,331
|
)
|
|
(3,582
|
)
|
|
Equipment
- Net
|
|
$
|
21,719
|
|
$
|
28,805
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
|
|
$
|
23,906
|
|
$
|
24,041
|
|
|
Accumulated
Depreciation
|
|
|
(11,610
|
)
|
|
(9,736
|
)
|
|
Vehicle
- Net
|
|
$
|
12,091
|
|
$
|
14,305
|
|
|
|
|
|
|
|
|
|
|
|
Network
Infrastructure
|
|
$
|
54,100
|
|
$
|
52,028
|
|
|
Accumulated
Depreciation
|
|
|
(15,297
|
)
|
|
(8,265
|
)
|
|
Network
Infrastructure - Net
|
|
$
|
38,803
|
|
$
|
43,763
|
|
The
difference in the value of the vehicle is reflective of the change in the
foreign currency rate
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:
|
February
28,
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
Numerators
for Basic and Diluted EPS
|
|
|
|
|
|
|
|
|
Net
income/(loss) to common shareholders
|
|
$
|
(239,045
|
)
|
$
|
(271,802
|
)
|
|
|
|
|
|
|
|
|
|
|
Denominators
for Basic and Diluted EPS
|
|
|
|
|
|
|
|
|
Weighted
average of shares outstanding
|
|
|
18,136,177
|
|
|
17,640,886
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted Earnings/(Loss) Per Share
|
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
|
NOTE
3.
|
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 an
investment of $5,100. After year end the founder returned and the Company
cancelled 41,000,000 common shares leaving a net of 10,000,00 for 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 deposits previously
received.
On
August
1, 2004, the Company issued 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.
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 $28,578 cash and $83,427 subscriptions
Receivable.
Year
Ended May 31, 2006
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.
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 310,000 common shares at
$0.10
per share for director and consulting services valued at $31,000.
On
December 1, 2005 the Company issued 275,920 common shares at $0.25 per share
in
a private placement for $68,980 cash.
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 issued in error.
Period
Ended February 28, 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 con shares in a private placement for
$10,000.
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.
On
December 30, 2006 the Company issued 200,000 common shares at $0.25 per share
for services valued at $50,000.
On
January 15, 2007 the Company issued 714,000 common shares at $0.25 per share
for
$178,500 cash and 320,000 common shares at $0.25 for the conversion of $80,000
shareholders loan.
|
NOTE
4.
|
NOTES
PAYABLE - RELATED PARTY
TRANSACTION
|
Following
are the notes payable as of February 28, 2007 and May 31, 2006. The Current
portion of vehicle loan is estimated using the $CDN payment times the 2006
average exchange rate to $US:
|
|
|
|
28-Feb-
07
|
|
|
31-May-
06
|
|
|
Installment
note on vehicle,
|
|
|
|
|
|
|
|
|
$537
($CDN) payment for 60 months,
|
|
|
|
|
|
|
|
|
Annual
interest rate at 7.39%
|
|
$
|
13,438
|
|
$
|
18,553
|
|
|
Less:
Current Portion
|
|
|
(5,739
|
)
|
|
(5,484
|
)
|
|
Long-Term
Portion
|
|
|
7,699
|
|
|
14,253
|
|
|
|
|
|
|
|
|
|
|
|
Demand
note, non-interest,
|
|
|
|
|
|
|
|
|
Related
Party
|
|
|
95,187
|
|
|
28,673
|
|
|
|
|
|
|
|
|
|
|
|
Notes
Payable
|
|
$
|
102,886
|
|
$
|
41,742
|
|
A
shareholder has provided operational financing to the company on an unsecured,
non-interest bearing, demand note.
|
NOTE
5.
|
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 $151,584 as of May 31, 2006, which is calculated by multiplying a
22%
estimated tax rate by the cumulative NOL of $689,017. The total valuation
allowance is a comparable $151,584.
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
|
|
|
2007
|
|
|
239,045
|
|
|
2027
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
689,017
|
|
|
|
|
|
NOTE
6.
|
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. These leases expire in December 2008. 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
|
|
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
$689,017 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 and developing product infomercials.
|
NOTE
8.
|
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.
|
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
Nature
of Business
The
Tradeshow Marketing Company was incorporated on December 03, 2003. Over the
past
twenty years, Tradeshow’s management team and demonstration professionals 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. The Company’s product categories include specialty
household, beauty and fitness, home and garden and electronics products. The
products we retail are considered small ticket items, are innovative and are
highly 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:
a)
Ontel
Products: “As Seen On TV” products that include the Swivel Sweeper, Glass Wizard
and AB Master;
b)
American Direct (TriStar): product supplied includes the Lateral Thigh Trainer
and Jack Lalanne’s Power Juicer;
c)
Cava
Industries: supplies the Cold Heat Soldering Tool and Smart Spin
containers;
d)
ITW
Space Bags: supplies Space Bags for storage;
e)
Orange
Glow International: suppliers of cleaning products OxiClean, Orange Glo,
and Kaboom, among others;
f)
Overbreak: supplies toys that include Hover Disc, Hover Copter and Rainbow
Art.
Sales
volumes for products fluctuate increasing significantly during the holiday
season. Typically, the Company experiences the highest sales volume for products
that are demonstrated via infomercials, during those periods when the
infomercials are advertised on television. 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 February 28, 2007 the bulk of our sales revenue has come from
our
retail stores and Internet sales. Both sales channels are experiencing moderate
growth. Store sales continue to lead Internet sales.
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
August
31, 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.
On
December 23, 2005 the company announced the launch of its first eCommerce
website for ON TV products. The site, located at www.ontvco.com, offers direct
access to classic and the most popular ON TV Items. The site is managed by
the
companies Chief Technical Officer and orders are fulfilled thru the Paradise
Valley retail store in Phoenix Arizona.
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 $35,000 dollars of stock 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 $25,000 (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 four full-time employees (as at
February 28, 2007). The approximate square footage of each store is 530 sq
feet.
In
December 2006, the Company hired Timothy J.McCarthy as Vice President of
Franchise Development. .
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 leases on Paradise Valley store and the Arrowhead store
expire on December 2008. 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
|
|
Result
of Operations
Third
Quarter of 2007 Compared to Third Quarter of 2006
The
following overview provides a summary of key information concerning our
financial results for third quarter of our fiscal year ending May
31st,2007:
|
|
|
|
Three Months
Ended
February
28,
|
|
|
Increase
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
145,989
|
|
|
168,483
|
|
|
(22,494
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
35,694
|
|
|
67,247
|
|
|
(31,553
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
110,295
|
|
|
101,236
|
|
|
9,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
136,078
|
|
|
94,953
|
|
|
41,125
|
|
|
Professional
Fees
|
|
|
70,532
|
|
|
2,827
|
|
|
67,705
|
|
|
Officer
Compensation
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
206,610
|
|
|
97,780
|
|
|
108,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
|
(96,315
|
)
|
|
3,456
|
|
|
(99,771
|
)
|
Revenue
For
the
three months ended February 28, 2007 , revenues decreased by 22,494 compared
to
the three months ended February 28, 2006. The decrease was due to the fact
that
there were no sales in the Canadian market during the current fiscal year.
During this period, management decided to focus its entire effort in the
USA.
Cost
of
Sales & Gross Profit
For
the
three months ended February 28, 2007 ,cost of sales decreased by 31,553 compared
to the three months ended February 28, 2006
.The
decrease reflects the lack of activity in the Canadian market and consequent
reduction in Canadian purchases for resale as well as freight and courier
charges to Canada.
For
the
three months ended February 28, 2007 gross profit increased by $9,059 compared
to the three months ended February 28, 2006
.
This
reflects the benefit of consolidating our efforts exclusively on the US market
during this period of time.
Expenses
There
was
an increase o f $ 41,125 in general and administrative expenses for the third
quarter of 2007 compared to the third quarter of 2006. ,Additional staff
was hired for the Arizona stores ,and also employees were given incentives
in
the form of sales bonuses resulting in increased wages and employee benefits
There was an increase of $67,705 for additional consulting fees connected
with legal accounting and franchise development fees.
Net
Loss
Our
net
loss for the third quarter of 2007 was $96,315 compared to a gain of 3,456
for
the third quarter of 2006 . The loss is reflective of the increase in
professional and consulting fees as well employee wages and benefits , which
were deemed necessary by management in order to focus our sales and marketing
efforts.
Results
of Operations
First
Nine Months ended February 28, 2007 compared to First Nine Months ended
February 28, 2006
The
following overview provides a summary of key information concerning our
financial results for the first nine months of our fiscal year ending May 31st
,2007:
|
|
|
Nine
Months Ended
February
28,
|
|
Increase
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
344,686
|
|
|
246,465
|
|
|
98,221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
152,973
|
|
|
130,664
|
|
|
22,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
191,713
|
|
|
115,801
|
|
|
75,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
331,173
|
|
|
323,734
|
|
|
7,439
|
|
|
Professional
Fees
|
|
|
99,585
|
|
|
63,869
|
|
|
35,716
|
|
|
Officer
Compensation
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
430,758
|
|
|
387,603
|
|
|
43,155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Profit / (Loss)
|
|
|
(239,045
|
)
|
|
(271,802
|
)
|
|
32,757
|
|
Revenue
The
company generated revenues of $ 344,686 from operations during the first nine
months of the fiscal year ended May 31, 2007 compared to $ 246,465 for the
same
period in the previous fiscal year.
Cost
of
Sales & Gross Profit
For
the
nine months ended February 28, 2007 ,cost of sales increased by $22,309 compared
to the nine months ended February 28, 2006.The increase reflects the additional
purchase of stock and freight charges required to support the additional
sales.
For
the
nine months ended February 28, 2007 gross profit increased by $75,912 compared
to the nine months ended February 28, 2006
.
This
reflects the benefit of our increase sales efforts.
Expenses
There
was
an increase of $7,439 in general and administrative expenses for the first
nine
months of May 31, 2007 2006 compared to the first nine months of May 31,
2006.
This increase was comprised of advertising expenses in connection with promoting
the web site to drive internet sale of products. There was an increase in
professional fees of 35,716 connected with additional legal, accounting and
franchise development fees.
Net
Loss
Our
net
loss for the first nine months of the fiscal year ended May 31, 2007 was
$(239,045) compared to a net loss of $(271,802) for the first nine months of
the
fiscal year ended May 31, 2006.
Dividends
There
are
no restrictions in the Company’s articles of incorporation or bylaws that
prevent us from declaring dividends. The Nevada Revised Statutes, however,
do
prohibit the Company from declaring dividends where, after giving effect
to the
distribution of the dividend:
|
|
1.
|
The
Company would not be able to pay its debts as they become due in
the usual
course of business; or
|
|
|
|
|
|
|
2.
|
The
Company total assets would be less than the sum of its total liabilities
plus the amount that would be needed to satisfy the rights of shareholders
who have preferential rights superior to those receiving the
distribution.
|
The
Company has not declared any dividends and does not plan to declare any
dividends in the foreseeable future.
Need
for Additional Capital
We
cannot
guarantee that we will be successful in our business operations. The Company’s
business is subject to risks inherent in the establishment of a new business
enterprise. See Risk Factors below.
The
Company has no assurance that future financing will be available to us on
acceptable terms. If financing is not available on satisfactory terms, the
Company may not be unable to continue, develop or expand operations. Equity
financing could result in additional dilution to existing shareholders.
Liquidity
and Financial Condition
The
Company had cash on hand of $127,788 as of February 28, 2007. The Company
has not attained profitable operations and is dependent upon obtaining
additional financing. For these reasons our auditors have stated in their
report
that they have substantial doubt that we will be able to continue as a going
concern.
The
financial statements accompanying this quarterly report contemplate the
Company’s continuation as a going concern. However, the Company has sustained
substantial losses and is still in the development stage. Additional funding
will be necessary to continue development and marketing of our products.
The
Company intends to arrange for the sale of additional shares of our common
stock
to obtain additional operating capital for at least the next twelve months.
Off-
Balance Sheet Arrangements
The
Company has no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on the Company’s financial
condition, changes in financial condition, revenues or expenses, results
of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.
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.
Risk
Factors
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in
this
Quarterly Report before investing in our common stock. If any of the following
risks occur, our business, operating results and financial condition could
be
seriously harmed. The trading price of our common stock could decline due
to any
of these risks, and you may lose all or part of your investment.
Our
accountants believe there is substantial doubt about our ability to continue
as
a going concern.
The
Company incurred a loss in the amount of $689,017 for the period from inception
February 28, 2007.Net loss from operations for the nine months ended February
28, 2007 was $239,045.
The
decrease in operating loss of $32,757 between the nine months ended February
28,
2006 and February 28, 2007 was due to our increased revenue from internet
and
store sales; however, general and administrative expenses and professional
fees
increased by $7,439 and $35,716 respectively. The additional costs incurred
were
from development of our online business as well as our recent costs to develop
our franchise model. .
The
Company will require additional financing if the costs of our operations
are
greater than anticipated. We will also require additional financing to sustain
our business operations if we are not successful in earning revenues. We
currently do not have any arrangements for financing and we may not be able
to
obtain financing when required. The Company’s future is dependent upon our
ability to obtain financing and upon future profitable operations from the
development of our business. Obtaining additional financing would be subject
to
a number of factors. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to the Company.
Since
this is a new business, we face a high risk of business failure due to our
inability to predict the success of our business
The
Company faces a high risk of business failure because of the unique difficulties
and uncertainties inherent in new ventures.
Potential
investors should be aware of the difficulties normally encountered by commencing
a new business venture and the high rate of failure of such enterprises.
The
likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
business the Company plans to undertake.
Our
stock is a “penny stock”, with the result that trading of our common stock in
any secondary market may be impeded.
The
SEC
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, to deliver a
standardized risk disclosure document prepared by the Commission, that: (a)
contains a description of the nature and level of risk in the market for
penny
stocks in both public offerings and secondary trading; (b) contains 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 a violation to such
duties or other requirements of Securities' laws; (c) contains a brief, clear,
narrative description of a dealer market, including bid and ask prices for
penny
stocks and the significance of the spread between the bid and ask price;
(d)
contains a toll-free telephone number for inquiries on disciplinary actions;
(e)
defines significant terms in the disclosure document or in the conduct of
trading in penny stocks; and (f) 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 a penny stock, the customer with: (a) bid and offer
quotations for the penny stock; (b) the compensation of the broker-dealer
and
its salesperson in the transaction; (c) 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 (d) a monthly 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 suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock as it is subject to these
penny
stock rules. Therefore, stockholders may have difficulty selling those
securities.
FORWARD
LOOKING STATEMENTS
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.
Consequently,
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.
Employees
The
Company has 4 employees as of the date of this Quarterly Report other than
our
Directors. The Company conducts its business largely through agreements with
consultants and arms-length third parties.
Research
and Development Expenditures
The
Company has not incurred any research or development expenditures since its
incorporation.
Patents
and Trademarks
The
Company does not own, either legally or beneficially, any patent or trademark.
Seasonality
The
Companies sales are quite seasonal, increasing with the shopping trends
associated with the retail industry of sales peaking during the holiday season.
In the past year, a substantial portion of our total revenues and all or most
of
our earnings came in the first quarter ending February 28. The results of
operations for this quarterly period are not necessarily indicative of the
results for the full fiscal year.
