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PLANTATION LIFECARE DEVELOPERS, INC - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
(Edgar Glimpses Via Acquire Media NewsEdge) FORWARD LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements that involve risks and
uncertainties. You can identify these statements by the use of forward-looking
words such as "may," "will," "expect," "anticipate," "estimate," "continue," or
other similar words. You should read statements that contain these words
carefully because they discuss our future expectations, contain projections of
our future results of operations or financial condition or state other
"forward-looking" information. We believe that it is important to communicate
our future expectations to our investors. However, there may be events in the
future that we are unable to accurately predict or control. Those events as well
as any cautionary language in this Form 10-Q provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements. You should
be aware that the occurrence of the events described in this Form 10-Q could
have a material adverse effect on our business, operating results and financial
condition.
BASIS OF PRESENTATION
The unaudited financial statements of Plantation Lifecare Developers Inc., a
Delaware corporation ("PLD", "the Company", "our", or "we"), should be read in
conjunction with the notes thereto. In the opinion of management, the unaudited
financial statements presented herein reflect all adjustments (consisting only
of normal recurring adjustments) necessary for fair presentation. Interim
results are not necessarily indicative of results to be expected for the entire
year.
We prepare our financial statements in accordance with U.S. generally accepted
accounting principals, which require that management make estimates and
assumptions that affect reported amounts. Actual results could differ from these
estimates.
Certain statements contained below are forward-looking statements (rather than
historical facts) that are subject to risks and uncertainties that could cause
actual results to differ materially from those described in the forward-looking
statements.
DESCRIPTION OF BUSINESS
We (or the "Company") were incorporated as "Continental Exchange Corporation" in
the State of Delaware on October 26, 1927.
Later that year, we changed our name to "Northern Exchange Corporation". Our
original purpose was to use our acquired capital to merge with or acquire any
other lawful business or enterprise, the nature of which was left
unstated. Being unable to achieve this intended purpose, we ceased operations
and became dormant in 1943, having no assets or liabilities.
We remained in this condition until, December 30, 1980, when we were reinstated
in the State of Delaware and our corporate name was changed to "Everest
International Incorporated". In 1988, our name was once again changed to
"Comstock Resources Corporation" and then to "Comstock International, Inc.". In
2000, our name was changed to "Copernicus International, Inc.".
On October 29, 2001, pursuant to an Agreement of Merger we merged into
Plantation Lifecare Developers, Inc., a Delaware developing stage company, with
the surviving corporation being Plantation Lifecare Developers, Inc.
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On November 8, 2001, a Certificate of Merger and Amended and Restated
Certificate of Incorporation were filed with the State of Delaware. We intended
to construct and operate life care communities which combine modern, specially
designed resort villas, access to assisted-care living and modern skilled
nursing hospitals in the Caribbean and South America. Since 2001, we had not
commenced planned principal operations.
On October 29, 2008 a Certificate of Revival and Renewal was filed with the
State of Delaware.
On April 14, 2009 the Company filed a Registration Statement to become a
reporting company. For the past 28 years, we have been dormant company, and
accordingly, a development stage company, having not attained any significant
revenue or operations.
On September 1, 2010 the Company's President contributed payphones and payphone
equipment.
The company is now primarily in the business of providing the use of outdoor
payphones, and providing telecommunication services.
We are presently seeking a merger, acquisition or other business combination
transaction with a privately owned entity seeking to become a publicly owned
entity. Our current principal business activity is to seek a suitable
acquisition candidate through acquisition, merger, reverse merger or other
suitable business combination method.
We have very limited capital, and it is unlikely that we will be able to take
advantage of more than one such business opportunity. We intend to seek
opportunities demonstrating the potential of long-term growth. Now, we have not
yet identified any business opportunity that we plan to pursue, nor have we
reached any agreement or definitive understanding with any person concerning an
acquisition.
On April 14, 2009, we filed a Registration Statement on Form 10SB (File No.:
0-52269), or the Registration Statement, with the Securities and Exchange
Commission, or the SEC, to register our common stock under Section 12(g) of the
Securities Exchange Act of 1934, as amended, or the Exchange Act. The
Registration Statement went effective by operation of law in 60 days on June 13,
2009, or the Effective Date. Since the Effective Date of the Registration
Statement, we have become a reporting company under the Securities Exchange Act
and are responsible for preparing and filing periodic and current reports under
the Exchange Act with the SEC.
SERVICES AND PRODUCTS
We own, operate and manage privately owned public payphones in the State of New
York. As of September 1, 2010, we own, operate, and manage 58 payphones. The
Company does not have any long-term agreements with the customers of these
payphones and they may terminate their contract at will. We may pay site owners
a commission based on a flat monthly rate or on a percentage of sales. Some of
the businesses include, but are not limited to, retail stores, convenience
stores, bars, restaurants, gas stations, colleges and hospitals. In the
alternative, our agreement with business owners may be to provide the
telecommunications services without the payment of any commissions.
The local telephone switch controls the traditional payphone technology. The
local switch does not provide any services in the payphone that can benefit the
owner of the phone. When we purchase phones from other companies, they come with
"smart card" payphone technology. These phones have a circuit board with
improved technology. The "smart card" technology allows us to determine the
operational status of the payphone. It also tells us when the coins in the phone
have to be collected, the number and types of calls that have been made from
each phone, as well as other helpful information that helps us provide better
service to our payphone using public. This upgrade of the phones reduces the
number and frequency of service visits due to outages and other payphone-related
problems and, in turn, reduces the maintenance costs. Other companies
manufacture the components of the payphones for the industry, including
Universal Communications and TCI, which provides handsets, key pads, totalizers,
and relays.
Payphone users can circumvent the usual payment method and avoid inserting a
coin by using an access code or 800 number provided by a long distance carrier.
These "dial-around" numbers, while convenient for users, leave
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payphone service providers uncompensated for the call made. The Federal
Communications Commission, or the FCC, as instructed by Congress in the
Telecommunications Act of 1996, created regulations to ensure that payphone
service providers receive compensation for these "dial-around" calls.
The FCC requires the sellers of long distance toll free services to pay the
payphone owner $0.494 cents per call. These funds are remitted quarterly through
a service provided by the American Public Communication Council (APCC).
Our installed payphone base generates revenue from two principal sources:
coin-calls and non-coin calls.
Coin calls:
Coin calls represent calls paid for by customers who deposit coins into the
payphones. Coin call revenue is recorded as the actual amount of coins collected
from the payphones.
Non-Coin calls:
Non-coin revenue includes commissions from operator service telecommunications
companies and a "dial-around" commission of $0.494 per call that the FCC
requires sellers of long distance toll free services to pay payphone owners. The
commissions for operator services are paid 45 days in arrears. These funds are
remitted quarterly through a service provided by the American Public
Communication Council (APCC).
Seasonality
Our revenues from payphone operation are affected by seasonal variations,
geographic distribution of payphones and type of location. Because we operate in
the northeastern part of the country with many of the payphones located outdoor,
weather patterns affect our revenue streams. Revenues drop off significantly
during winter and conversely show an increase in the spring and summer. Revenues
are generally lowest in the first quarter and highest in the third quarter.
Significant Customers
We do not rely on a major customer for our revenue. We have a variety of small
single businesses as well as some small chain stores that we service. We do not
believe that we would suffer dramatically if any one customer or small chain
decided to stop using our phones.
Significant Vendors
We must buy dial tone for each payphone from the local exchange carrier. As long
as we pay the carrier bill, it is required to provide a dial tone. As a
regulated utility, the exchange carrier may not refuse to provide us service.
Alternate service exists in certain areas where Verizon competitors are located.
We use alternate local service providers when we can get a better price for the
service. We use long distance providers on all the payphones.
Government Regulation:
We are subject to varying degrees of regulation by federal, state, local and
foreign regulators. The implementation, modification, interpretation and
enforcement of these laws and regulations vary and can limit our ability to
provide many of our services. Our ability to compete in our target markets
depends, in part, upon favorable regulatory conditions and the favorable
interpretations of existing laws and regulations.
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FCC Regulation and Interstate Rates:
Our services are subject to the jurisdiction of the Federal Communications
Commission (FCC) with respect to interstate telecommunications services and
other matters for which the FCC has jurisdiction under the Communications Act of
1934, as amended.
Payphone users can circumvent the usual payment method and avoid inserting a
coin by using an access code or 800 number provided by a long distance carrier.
These "dial-around" numbers, while convenient for users, leave payphone service
providers uncompensated for the call made. The Federal Communications
Commission, as instructed by Congress in the Telecommunications Act of 1996,
created regulations to ensure that payphone service providers receive
compensation for these "dial-around" calls.
The FCC requires the sellers of long distance toll free services to pay the
payphone owner $0.494 cents per call. These funds are remitted quarterly through
a service provided by the American Public Communication Council (APCC). If the
FCC regulation requiring sellers of long distance toll free services to pay
payphone owners $0.494 per call is reduced or repealed, it could have a negative
effect upon our revenue stream. We have no control over what rules and
regulations the state and federal regulatory agencies require us to follow now
or in the future. It is possible for future regulations to be so financially
demanding that they cause us to go out of business. We are not aware of any
proposed regulations or changes to any existing regulations.
Telecommunications Act of 1996
The Telecommunications Act of 1996, regulatory and judicial actions and the
development of new technologies, products and services have created
opportunities for alternative telecommunication service providers, many of which
are subject to fewer regulatory constraints. We are unable to predict
definitively the impact that the ongoing changes in the telecommunications
industry will ultimately have on our business, results of operations or
financial condition. The financial impact will depend on several factors,
including the timing, extent and success of competition in our markets, the
timing and outcome of various regulatory proceedings and any appeals, and the
timing, extent and success of our pursuit of new opportunities resulting from
the Telecommunications Act of 1996 and technological advances.
Research and Development
We have not expended any money in the last two fiscal years on research and
development activities.
Employees
The company does not have any employees. Joseph Passalaqua is our President and
Chief Executive Officer and Ray Willenberg Jr. is our Secretary and Chief
Financial Officer, neither of whom have employment agreements.
Any person or entity may read and copy our reports with the Commission at the
Commission's Public Reference Room at 100 F Street N.E., Washington, D.C. 20549.
The public may obtain information on the operation of the Public Room by calling
the Commission toll free at 1-800-SEC-0330. The Commission also maintains an
Internet site at http://www.sec.gov where reports, proxies and other disclosure
statements on public companies may be viewed by the public.
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GOING CONCERN QUALIFICATION
Several conditions and events cast substantial doubt about the Company's ability
to continue as a going concern. The Company has incurred net losses of
approximately $1,073,540 for the period from January 1, 2001 to September 30,
2010, has no revenues and requires additional financing in order to finance its
business activities on an ongoing basis. The Company's future capital
requirements will depend on numerous factors including, but not limited to,
continued progress in finding a merger candidate and the pursuit of business
opportunities. The Company is actively pursuing alternative financing and has
had discussions with various third parties, although no firm commitments have
been obtained. In the interim, shareholders of the Company have committed to
meeting its minimal operating expenses. Management believes that actions
presently being taken to revise the Company's operating and financial
requirements provide them with the opportunity to continue as a going
concern. At December 31, 2009, we had $289 cash on hand, and an accumulated
deficit of $1,057,649. At September 30, 2010, we had $564 cash on hand, and an
accumulated deficit of $1,073,540. See "Liquidity and Capital Resources."
COSTS RELATED TO OUR OPERATION
The principal costs related to the ongoing operation of our payphones include
telecommunication costs, commissions and depreciation. Telecommunication
expenses consist of payments made by us to local exchange carriers and long
distance carriers for access to and use of their telecommunications networks and
service and maintenance costs. Commission expense represents payments to owners
or operators of the premises at which a payphone is located.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2010, we had $564 cash on hand and an accumulated deficit of
$1,073,540. Our primary source of liquidity for the current quarter has been
from borrowing from a Joseph C. Passalaqua, a principal stockholder. As of
September 30, 2010 we have notes payable to Joseph C. Passalaqua in the amount
$44,285. These notes bear a simple interest rate of 18% per annum and are
payable upon demand. As of September 30, 2010 the accrued interest on these
notes was $4,694.
Net cash used in operating activities was $8,955 during the nine-month period
ended September 30, 2010.
Net cash provided by investing activities was $0 during the nine-month period
ended September 30, 2010.
Net cash provided by financial activities was $9,230 during the nine-month
period ended September 30, 2010.
Our expenses to date are largely due to professional fees that include
accounting and legal fees.
To date, we have had minimal revenues; and we require additional financing in
order to finance our business activities on an ongoing basis. Our future capital
requirements will depend on numerous factors including, but not limited to,
continued progress in finding a merger candidate and the pursuit of business
opportunities. We are actively pursuing alternative financing and have had
discussions with various third parties, although no firm commitments have been
obtained to date. In the interim, shareholders of the Company have committed to
meet our minimal operating expenses. We believe that actions presently being
taken to revise our operating and financial requirements provide them with the
opportunity to continue as a "going concern," although no assurances can be
given.
NET LOSS FROM OPERATIONS
The Company has a cumulative net loss of $1,073,540 as of September 30, 2010.
The company had net loss of $15,891 for nine months ended September 30, 2010 as
compared to a net loss of $13,846 for the nine months ended September 30, 2009.
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CASH FLOW
Our primary source of liquidity has been cash from shareholder loans.
WORKING CAPTIAL
We had current assets of $289 and current liabilities of $21,474 resulting in a
working capital deficit of $21,185 for the year ended December 31, 2009. We had
current assets of $564 and current liabilities of $57,307, which results in
working capital deficit of $37,076 for the nine months ended September 30, 2010.
THREE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2009
REVENUES
Our total revenue increased by $521, from $0 for the three months ended
September 30, 2009 to $521 for the three months ended September 30, 2010.
Our coin call revenue was $0 for the three months ended September 30, 2009 and
$521 for the three months ended September 30, 2010.
Our non-coin call revenue, or commission income, which is comprised primarily of
"dial around" revenue, star 88 commission revenue and operator service revenue
was $0 for the three months ended September 30, 2009 and $0 for the three months
ended September 30, 2010. The FCC requires the sellers of long distance toll
free services to pay the payphone owner $0.494 cents per "dial-around" call.
These funds are remitted quarterly through a service provided by the American
Public Communication Council (APCC).
Our local service revenue which is comprised primarily of service for payphone
customers was $0 for the three months ended September 30, 2009 and $0 for the
three months ended September 30, 2010. This is the revenue from monthly invoices
billed to payphone customers in which the Company owns the payphone and provides
service to operate the payphone on the premises. As of September 30, 2010 eight
customers made up the local service revenue:
Avotus Corporation (Hannaford Brothers) - New York
Berlin Central School - New York
Coxsackie Correctional Facility - New York
Grafton Lake State Park - New York
Greene Correctional Facility - New York
NYS Office of Parks and Recreation - New York
NYS Park Alegany Region - New York
Taconic Hills Central School District - New York
COST OF SALES
Our overall cost of services increased by $333, from $0 in the three months
ended September 30, 2009, to $333 in the three months ended September 30, 2010.
The principal costs related to the ongoing operation of our payphones will
include telecommunication costs and depreciation.
Telecommunication costs consist of payments made by us to local exchange
carriers and long distance carriers for access to, use of their
telecommunications networks and service and maintenance costs. It also includes
APCC commission fees related to "dial-around" processing, and payphone coin
collection expenses or repair.
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Depreciation expense is the quarterly depreciation of the payphone equipment,
which is valued at $20,000. The company uses the straight line method, with a
useful life of 5 years with $0 salvage value. The payphone equipment was
acquired by the company on September 1, 2010.
Telecommunication costs were $0 in the three months ended September 30, 2009 and
$0 in the three months ended September 30, 2010. Depreciation expense was $0 in
the three months ended September 30, 2009 and $333 in the three months ended
September 30, 2010.
OPERATING AND ADMINISTRATIVE EXPENSES
Operating expenses decreased by $3,526, from $4,239 in the three months ended
September 30, 2009 to $713 in the three months ended September 30, 2010.
Operating expenses primarily consist of other general and administrative
expenses (G&A), outside services, and professional fees. Other G&A expenses,
made up primarily of office expense and postage and delivery expenses and
franchise tax, decreased by $496, from $496 in the three months ended September
30, 2009 to $0 in the three months ended September 30, 2010. Professional fees,
made up of accounting and legal fees decreased by $2,787, from $3,500 in the
three months ended September 30, 2009 to $713 in the three months ended
September 30, 2010. These are fees we pay to accountants and attorneys
throughout the year for performing various tasks. Outside services, made up
primarily of stock transfer company fees and incorporating services expenses,
decreased by $243, from $243 in the three months ended September 30, 2009 to $0
in the three months ended September 30, 2010. The bulk of the increase in
expense was due to the Company's accounting fees in 2010, when comparing the
same three month period in 2009.
NINE MONTHS ENDED SEPTEMBER 30, 2010 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 2009
REVENUES
Our total revenue increased by $521, from $0 for the nine months ended September
30, 2009 to $521 for the nine months ended September 30, 2010.
Our coin call revenue was $0 for the nine months ended September 30, 2009 and
$521 for the nine months ended September 30, 2010.
Our non-coin call revenue, or commission income, which is comprised primarily of
"dial around" revenue, star 88 commission revenue and operator service revenue
was $0 for the nine months ended September 30, 2009 and $0 for the nine months
ended September 30, 2010. The FCC requires the sellers of long distance toll
free services to pay the payphone owner $0.494 cents per "dial-around" call.
These funds are remitted quarterly through a service provided by the American
Public Communication Council (APCC).
Our local service revenue which is comprised primarily of service for payphone
customers was $0 for the nine months ended September 30, 2009 and $0 for the
nine months ended September 30, 2010. This is the revenue from monthly invoices
billed to payphone customers in which the Company owns the payphone and provides
service to operate the payphone on the premises. As of September 30, 2010 eight
customers made up the local service revenue:
Avotus Corporation (Hannaford Brothers) - New York
Berlin Central School - New York
Coxsackie Correctional Facility - New York
Grafton Lake State Park - New York
Greene Correctional Facility - New York
NYS Office of Parks and Recreation - New York
NYS Park Alegany Region - New York
Taconic Hills Central School District - New York
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COST OF SALES
Our overall cost of services increased by $333, from $0 in the nine months ended
September 30, 2009, to $333 in the nine months ended September 30, 2010. The
principal costs related to the ongoing operation of our payphones will include
telecommunication costs and depreciation.
Telecommunication costs consist of payments made by us to local exchange
carriers and long distance carriers for access to, use of their
telecommunications networks and service and maintenance costs. It also includes
APCC commission fees related to "dial-around" processing, and payphone coin
collection expenses or repair.
Depreciation expense is the quarterly depreciation of the payphone equipment,
which is valued at $20,000. The company uses the straight line method, with a
useful life of 5 years with $0 salvage value. The payphone equipment was
acquired by the company on September 1, 2010.
Telecommunication costs were $0 in the nine months ended September 30, 2009 and
$0 in the nine months ended September 30, 2010. Depreciation expense was $0 in
the nine months ended September 30, 2009 and $333 in the nine months ended
September 30, 2010.
OPERATING AND ADMINISTRATIVE EXPENSES
Operating expenses decreased by $540, from $12,986 in the nine months ended
September 30, 2009 to $12,446 in the nine months ended September 30, 2010.
Operating expenses primarily consist of other general and administrative
expenses (G&A), outside services, and professional fees. Other G&A expenses,
made up primarily of office expense and postage and delivery expenses and
franchise tax, increased by $73, from $807 in the nine months ended September
30, 2009 to $880 in the nine months ended September 30, 2010. Professional fees,
made up of accounting and legal fees increased by $124, from $10,450 in the nine
months ended September 30, 2009 to $10,574 in the nine months ended September
30, 2010. These are fees we pay to accountants and attorneys throughout the year
for performing various tasks. Outside services, made up primarily of stock
transfer company fees and incorporating services expenses, decreased by $737,
from $1,729 in the nine months ended September 30, 2009 to $992 in the nine
months ended September 30, 2010. The bulk of the increase in expense was due to
the Company's accounting fees in 2010, when comparing the same six month period
in 2009.
COMMON STOCK
Our board of directors is authorized to issue 250,000,000 shares of common
stock, with a par value of $0.0004. There are an aggregate of 35,000,000 shares
of Common Stock issued and outstanding, which are held by 268 stockholders as of
the date of this Quarterly Report. All shares of our common stock have one vote
per share on all matters, including election of directors, without provision for
cumulative voting. The common stock is not redeemable and has no conversion or
preemptive rights. The common stock currently outstanding is validly issued,
fully paid and non-assessable. In the event of liquidation of the Company, the
holders of common stock will share equally in any balance of the Company's
assets available for distribution to them after satisfaction of creditors and
preferred stockholders, if any. The holders of our common stock are entitled to
equal dividends and distributions per share with respect to the Common Stock
when, as and if, declared by the board of directors from funds legally
available.
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PREFERRED STOCK
Our Original Certificate of Incorporation did not provide for the issuance of
Preferred Stock. On November 8, 2001, a Certificate of Amendment was filed with
the State of Delaware that stated that the Corporation shall have the authority
to issue 350,000,000 shares of capital stock, of which 100,000,000 shares are
authorized as Preferred Stock with the par value of $0.0004 per share. There are
an aggregate of 0 shares of Preferred Stock issued and outstanding as of the
date of this Quarterly Filing.
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