Item 1.
BUSINESS
Our Background
Profit Planners Management, Inc. was incorporated pursuant to the laws of the State of Nevada on January 29, 2009.
Our Business
We are an early stage company with a very limited operating history. Over the past twelve months our operations have expanded. Our current operations are divided into four different revenue lines:
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CFO, Accounting and Tax Services;
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Insurance and Healthcare Insurance Services;
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Organic Innovations, Inc.
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Management Services
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Our CFO, Accounting and Tax Services division is currently our main revenue generator with more than 90% of our revenues coming from these services. In the future, we expect this percentage to go down as our other business divisions gain traction in the market place.
CFO, Accounting and Tax Services
Our CFO, Accounting and Financial Services division provides management, staffing, payroll, human resources, billing and tax services to our clients. We provide short-term engagements of outside management services to help companies complete certain transactions or restructurings. Additionally, we provide monthly accounting, payroll, tax and billing services to businesses that do not have those departments.
Clients are billed either on an hourly basis for the accounting and financial services we provide or under a monthly retainer, if the engagement is to be for an extended period of time. The hourly rates that we charge our clients for these services depends on the complexity of the work being done and the experience level of the persons assigned to the work.
Insurance and Healthcare Insurance Services
Our Insurance and Healthcare Insurance division
www.twinpeaksplus.com
is a licensed insurance brokerage. We offer a wide array of insurance and insurance related products such as life insurance, annuities, health insurance, healthcare discount benefit cards and programs as well as self funded health insurance accounts. Our Insurance and Healthcare Insurance division offers insurance services to our corporate clients as part of our consulting services. It also sells insurance products and services directly to individuals and companies that have not engage us for other consulting services.
We receive commission from the insurance carrier based on the premium of the product being purchased.
Organic Innovations, Inc.
We are currently incubating e-commerce concepts relating to organic, healthcare and holistic lifestyles. We believe that current trends in these sectors have created niche opportunities for us to exploit. Our first concept we expect to launch in September 2013 is
www.organicallycrafted.com
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Management Services
Our Management Services division provides budgeting and asset allocation and control advise to professional athletes and other high earning individuals. According to a study conducted by ESPN, statistically 78% of all National Football League players are bankrupt, or are in financial difficulties within two years of their retirement from professional football. It seems clear that these high earning athletes are not receiving competent advice on how to budget their earnings and expenses to provide for their financial needs over the course of their lives.
The services that our Management Services division provides include reviewing a client’s current earnings and expenses and advising on what changes need to be made to create long-term financial stability. This advice may include drafting a budget for the client and showing how expenses can be cut or earnings increased. It may also include advising the client on the use of debt and mortgages to reduce the outflow of cash for long-term asset acquisitions. The main goal of our Management Services division is to create a solid long-term financial plan for these high earning individuals and to create the budgeting discipline needed for these clients to retire comfortably.
Currently we are working with one active NFL player. The Management Services that we provide are billed either on an hourly basis or under a monthly retainer depending on the length of the engagement. We may also generate revenue from the sale of insurance products to our Management Services clients if such products are needed as part of the long-term financial plan that has been created.
Growth and Profitability Strategy
Our objective is to increase our revenue, profitability and cash flow by offering our clients a wide array of essential services in a “one-stop-shopping” framework. By doing so we can simplify the logistics of our client’s purchases of these essential services, eliminate redundant services and streamline the business operations of our corporate clients.
Marketing
Our marketing efforts are targeted to small to midsized companies that are known to, located or identified by our finders network. We also utilize our contacts with other professional service firms (law firms, investment bankers, venture capital firms and CPA audit firms) that provide services to the small and middle market sector for referrals of potential clients. We also intend to explore potential acquisitions of small accounting, or other consulting firms, to acquire their customer lists in order to expand our client base.
Our target will be on companies that have sales of less than $100 million and are based in North America. Our industry focus is professional services and products. Although we focus on these industries we will look at opportunities in other industries if it makes economic sense.
We currently own and operate the following web-sites.
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www.profitplannersmgt.com
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www.organicinnovations.com
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www.organicallycrafted.com
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www.twinpeaksplus.com
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We use these web-sites as part of our marketing strategy.
We believe that these strategies will provide the best results given our limited marketing budget.
Competition
The CFO, Accounting and Tax service industry is highly competitive. There are many firms that provide services similar to ours in this market. Among the leaders are Tatum, LLC and The CFO Connection.
In addition, many of the mid-tiered public accounting firms typically provide many of the services that we offer. Among such firms are CBIZ, Inc. and J H Cohn, Inc.
Our Management Services division competes in an industry that is highly competitive. Sports agents, financial services firms, accounting firms and insurance companies all offer competing services and products to high earning individuals and athletes.
Many of our competitors have longer operating histories, greater brand recognition, broader service lines and greater financial resources and advertising budgets than we do. Therefore, we anticipate substantial competition from other firms in our industries.
Employees
As of August 29, 2013, we had 8 employees. Our staff is available to be contracted out to clients who need our CFO, accounting, and other related services. For potential clients with larger projects, we have access to independent professionals who are available to provide services to such clients of the company on a sub-contracting basis. Eventually, we plan to employ sufficient personnel that such sub-contracting relationships will not be necessary. We believe our future success depends in large part upon the continued service of our CEO, Wesley Ramjeet.
Item 1A. RISK FACTORS
You should carefully consider each of the risks described below, together with all of the other information contained or incorporated by reference in this Annual Report. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially adversely affected and the trading prices of our common stock could decline.
Risks Relating to the Company.
Risks Related to Our Business
We Have A Limited Operating History That You Can Use To Evaluate Us, And The Likelihood Of Our Success Must Be Considered In Light Of The Problems, Expenses, Difficulties, Complications And Delays Frequently Encountered By A Small Developing Company. There Is No Assurance Our Future Operations Will Result In Profitable Revenues. If We Cannot Generate Sufficient Revenues To Operate Profitably, We Will Cease Operations
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We were incorporated in Nevada in January 2009. We have no significant financial resources and only a small amount of revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support and grow our anticipated activities.
Our ability to achieve and maintain profitability and positive cash flow is dependent upon:
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our ability to identify and pursue mediums through which we will be able to
market our products and services;
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our ability to attract and retain customers;
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our ability to generate revenues through sales of products and services; and
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our ability to manage growth by managing administrative overhead.
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Based upon current plans, we expect to incur operating losses in future periods because we will be incurring expenses and generating limited revenues. We cannot guarantee that we will be successful in generating revenues in the future. Our failure to generate increased revenues in a timely manner would have a material adverse effect on our business, operating results and financial condition.
We Will Require Financing To Achieve Our Current Business Strategy And Our Inability To Obtain Such Financing Could Prohibit Us From Executing Our Business Plan And Cause Us To Slow Down Our Expansion or Cease Our Operations.
We will seek to raise a minimum of $500,000 over the next twelve months, through either the private issuance of debt or the sale of equity, to finance the growth of our business and to execute our marketing plan. Such financing may not be available as needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. If we are unable to obtain this financing on reasonable terms, we would be unable to hire the additional employees needed to grow our business and we would be forced to delay or scale back our plans for expansion. Over an extended period, our failure to raise financing to grow our business could force us to cease operations.
Managing Growth and Expansion.
We are currently seeking to initiate a period of growth through our recent marketing and sales efforts. If such growth does occur, the resulting strain on our managerial, operational, financial and other resources could be significant. Success in managing this expansion and growth will depend, in part, upon the ability of senior management to manage effectively. Any failure to manage the anticipated growth and expansion could have a material adverse effect on our business.
We Face Intense Competition And Our Inability To Successfully Compete With Our Competitors Will Have A Material Adverse Effect On Our Results Of Operation.
The industries in which we operate are highly competitive. Many of our competitors have longer operating histories, greater brand recognition, broader service lines and greater financial resources and advertising budgets than we do. Many of our competitors offer similar services or alternatives to our services. There can be no assurance that we will procure a customer base to support the products and services we offer or allow us to seek expansion. There can be no assurance that we will be able to compete effectively in this marketplace.
If We Do Not Attract Customers On Cost-Effective Terms, We Will Not Make A Profit, Which Ultimately Will Result In A Cessation Of Operations.
Our success depends on our ability to attract customers on cost-effective terms. If we are unsuccessful at attracting a sufficient number of clients, our ability to get repeat customers and our financial condition will be harmed.
If We Do Not Make A Profit, We May Have To Suspend Or Cease Operations.
Because we are small and do not have much capital, we will not be able to finance our operations for an extended period if we do not make a profit. Unless we are able to raise additional financing, we will be limiting our marketing activities over the next twelve months. As a result, we may not be able to attract enough customers for our services and products to operate profitably. If we cannot operate profitably, we may have to suspend or cease our operations.
We rely on the services of Wesley Ramjeet, our CEO, to provide consulting services to our clients and to define our marketing strategy and the overall strategic direction of our company. The loss of Mr. Ramjeet’s services would negatively affect our operations and harm our business.
Our future success depends in large part on the continued service of our Chief Executive Officer, Wesley Ramjeet. The consulting services provided by Mr. Ramjeet to our clients currently accounts for the majority of our revenues. Mr. Ramjeet also provides the marketing strategies, services and product development planning and overall strategic direction for the Company. We have entered into an exclusive employment agreement with Mr. Ramjeet for an initial term of three years, under which Mr. Ramjeet will continue to be our CEO and President. This agreement also contains a provision prohibiting Mr. Ramjeet from competing with us. We do not currently have a key-man life insurance policy on Mr. Ramjeet. The loss of Mr. Ramjeet’s services for any reason would have an adverse effect on our business.
There Is Substantial Uncertainty That We Will Be Able to Continue Operations
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Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue in business. As such, we may have to cease operations within the next twelve months.
Mr. Ramjeet Has Effective Control of the Company's Affairs
As of August 29, 2013, Mr. Ramjeet beneficially owned 30,431,000 shares of common stock of the Company, representing approximately 59.55% of the issued and outstanding shares of common stock and approximately 59.55% of the voting power of the issued and outstanding shares of common stock of the Company. In the election of directors, stockholders are not entitled to cumulate their votes for nominees. Accordingly, as a practical matter, Mr. Ramjeet will be able to elect all of the Company's directors and otherwise direct the affairs of the Company.
Indemnification of Officers and Directors
The Company's Articles of Incorporation provide for the indemnification of our officers and directors to the fullest extent permitted by the laws of the State of Nevada. It is possible that the indemnification obligations imposed under these provisions could result in a charge against the Company's earnings and thereby affect the availability of funds for other uses by the Company.
Risks Relating To Our Common Stock
There is not now, and there may not ever be, an active market for our shares of common stock.
There can be no assurance that an active market for our common stock will develop. If an active public market for our common stock does not develop, shareholders may not be able to re-sell the shares of our common stock that they own and may lose all of their investment.
Sales of a substantial number of shares of our common stock may cause the price of our common stock to decline.
Should an active public market develop and our stockholders sell substantial amounts of our common stock in the public market, shares sold at a price below the current market price at which the common stock is trading will cause that market price to decline. Moreover, the offer or sale of a large number of shares at any price may cause the market price to fall. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.
Additional stock offerings may dilute current stockholders.
Given our plans and our expectation that we may need additional capital and personnel, we may need to issue additional shares of capital stock or securities convertible or exercisable for shares of capital stock, including preferred stock, options or warrants. The issuance of additional capital stock may dilute the ownership of our current stockholders.
Our Common Stock will be subject to the "Penny Stock" rules of the SEC.
The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
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that a broker or dealer approve a person's account for transactions in penny stocks; and
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the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
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In order to approve a person's account for transactions in penny stocks, the broker or dealer must:
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obtain financial information and investment experience objectives of the person; and
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make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
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The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:
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sets forth the basis on which the broker or dealer made the suitability determination; and
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that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
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Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
We have not paid dividends in the past and do not expect to pay dividends in the future. Any return on investment may be limited to the value of our common stock.
We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.
FINRA Sales Practice Requirements May Limit A Stockholder's Ability To Buy And Sell Our Stock.
FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity and liquidity of our common stock. Further, many brokers charge higher transactional fees for penny stock transactions. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder's ability to resell shares of our common stock.