ITEM
1.
FINANCIAL STATEMENTS
|
|
|
November
30,
|
|
|
May
31,
|
|
|
|
|
2007
|
|
|
2007
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$
|
54,427
|
|
|
$
|
136,815
|
|
|
Merchant
Service Holdbacks
|
|
|
4,000
|
|
|
|
5,257
|
|
|
Prepaid
Expenses
|
|
|
26,794
|
|
|
|
17,645
|
|
|
Inventory
|
|
|
26,173
|
|
|
|
36,041
|
|
|
Total
Current Assets
|
|
|
111,394
|
|
|
|
195,758
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Assets
|
|
|
|
|
|
|
|
|
|
Furniture
& Equipment - Net
|
|
|
78,000
|
|
|
|
31,877
|
|
|
Vehicles
- Net
|
|
|
5,554
|
|
|
|
8,426
|
|
|
Network
Infrastructure & Software - Net
|
|
|
27,639
|
|
|
|
33,704
|
|
|
Leasehold
Improvements
|
|
|
5,640
|
|
|
|
-
|
|
|
Other
Assets
|
|
|
7,553
|
|
|
|
7,553
|
|
|
Total
Long Term Assets
|
|
|
124,386
|
|
|
|
81,560
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
235,780
|
|
|
$
|
277,318
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
10,752
|
|
|
$
|
28,277
|
|
|
Accrued
Liabilities
|
|
|
44,135
|
|
|
|
-
|
|
|
Loan
Payable - Related Party
|
|
|
128,803
|
|
|
|
88,818
|
|
|
Current
Portion - Vehicle Loan
|
|
|
5,484
|
|
|
|
5,484
|
|
|
Total
Current Liabilities
|
|
|
189,174
|
|
|
|
122,579
|
|
|
|
|
|
|
|
|
|
|
|
|
Vehicle
Loan
|
|
|
3,406
|
|
|
|
6,564
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
192,580
|
|
|
|
129,143
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock, authorized 50,000,000
|
|
|
|
|
|
|
|
|
|
shares,
par value $0.0001, 22,269,323 and
|
|
|
|
|
|
|
|
|
|
20,342,533
issued and outstanding at
|
|
|
|
|
|
|
|
|
|
November
30, 2007 and May 31, 2007
|
|
|
2,234
|
|
|
|
2,037
|
|
|
Paid
in Capital
|
|
|
1,634,431
|
|
|
|
1,142,681
|
|
|
Accumulated
Deficit
|
|
|
(1,593,465
|
)
|
|
|
(996,543
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
43,200
|
|
|
|
148,175
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$
|
235,780
|
|
|
$
|
277,318
|
|
The
accompanying notes are an integral part of these
statements
The
Tradeshow
Marketing Company, Ltd.
Statments
of
Operations
(unaudited)
|
|
|
Six Months
Ended
|
|
|
Three
Months Ended
|
|
|
|
|
November
30,
|
|
|
November
30,
|
|
|
November
30,
|
|
|
November
30,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
154,791
|
|
|
$
|
198,697
|
|
|
$
|
64,896
|
|
|
$
|
66,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
79,673
|
|
|
|
117,279
|
|
|
|
29,302
|
|
|
|
38,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
75,118
|
|
|
|
81,418
|
|
|
|
35,594
|
|
|
|
27,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
586,908
|
|
|
|
195,095
|
|
|
|
337,798
|
|
|
|
111,503
|
|
|
Professional
Fees
|
|
|
85,132
|
|
|
|
29,053
|
|
|
|
51,620
|
|
|
|
25,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
672,040
|
|
|
|
224,148
|
|
|
|
389,418
|
|
|
|
137,234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(596,922
|
)
|
|
$
|
(142,730
|
)
|
|
$
|
(353,824
|
)
|
|
$
|
(109,667
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per Share
|
|
$
|
(0.03
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Shares
|
|
|
20,663,028
|
|
|
|
17,885,810
|
|
|
|
20,502,563
|
|
|
|
17,885,810
|
|
The
accompanying notes are an integral
part of these statements
The
Tradeshow Marketing Company, Ltd.
Restated
Statements of
Stockholders' Equity
(unaudited)
For
the Year Ended May 31, 2007 and the Six Months Ended November 30,
2007
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
|
|
|
Paid
in
|
|
|
Currency
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Translation
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance,
May 31, 2006
|
|
|
17,869,283
|
|
|
|
1,789
|
|
|
|
510,913
|
|
|
|
14,141
|
|
|
|
(449,972
|
)
|
|
|
76,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
Capital
|
|
|
|
|
|
|
|
|
|
|
14,141
|
|
|
|
(14,141
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale
of common stock
|
|
|
1,740,000
|
|
|
|
174
|
|
|
|
439,826
|
|
|
|
|
|
|
|
|
|
|
|
440,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for Services
|
|
|
365,750
|
|
|
|
37
|
|
|
|
97,838
|
|
|
|
|
|
|
|
|
|
|
|
97,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for Conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
Debt at $0.25 per share
|
|
|
320,000
|
|
|
|
32
|
|
|
|
79,968
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
per adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
provision
of prior acqusition
|
|
|
47,500
|
|
|
|
5
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(546,571
|
)
|
|
|
(546,571
|
)
|
|
Balance,
May 31, 2007
|
|
|
20,342,533
|
|
|
|
2,037
|
|
|
|
1,142,681
|
|
|
|
-
|
|
|
|
(996,543
|
)
|
|
|
148,175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for Services
|
|
|
147,750
|
|
|
|
16
|
|
|
|
41,922
|
|
|
|
|
|
|
|
|
|
|
|
41,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale
of common stock
|
|
|
1,673,600
|
|
|
|
170
|
|
|
|
423,479
|
|
|
|
|
|
|
|
|
|
|
|
423,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of
debt
|
|
|
105,440
|
|
|
|
11
|
|
|
|
26,349
|
|
|
|
|
|
|
|
|
|
|
|
26,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(596,922
|
)
|
|
|
(596,922
|
)
|
|
Balance,
November 30, 2007
|
|
|
22,269,323
|
|
|
$
|
2,234
|
|
|
$
|
1,634,431
|
|
|
$
|
-
|
|
|
$
|
(1,593,465
|
)
|
|
$
|
43,200
|
|
The
accompanying notes are an integral
part of these statements
The
Tradeshow Marketing Company, Ltd.
Statements
of Cash Flows
(unaudited)
|
|
|
Six
Months
Ended
|
|
|
|
|
November
30,
|
|
|
November
30,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(596,922
|
)
|
|
$
|
(142,730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-Cash
Transactions
|
|
|
|
|
|
|
|
|
|
Stock
issued for service
|
|
|
41,938
|
|
|
|
12,875
|
|
|
Depreciation
/ Amortization Expense
|
|
|
19,575
|
|
|
|
8,567
|
|
|
Changes
in Assets and
Liabilities
|
|
|
|
|
|
|
|
|
|
(Increase)/Decrease
in Inventory
|
|
|
9,868
|
|
|
|
13,332
|
|
|
(Increase)/Decrease
in Merchant
|
|
|
|
|
|
|
|
|
|
Service
Holdbacks
|
|
|
1,257
|
|
|
|
(20,017
|
)
|
|
(Increase)/Decrease
in Other Assets
|
|
|
(5,640
|
)
|
|
|
20
|
|
|
(Increase)/Decrease
in Prepaid Expense
|
|
|
(9,149
|
)
|
|
|
-
|
|
|
Increase/(Decrease)
in Accrued Expense
|
|
|
44,135
|
|
|
|
-
|
|
|
Increase/(Decrease)
in Payables
|
|
|
(17,525
|
)
|
|
|
(45,654
|
)
|
|
Net
Cash Used by Operating
Activities
|
|
|
(512,463
|
)
|
|
|
(173,607
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Investment
Activities
|
|
|
|
|
|
|
|
|
|
Purchase
of Network
Infastructure
|
|
|
-
|
|
|
|
(2,072
|
)
|
|
Equipment
Purchase
|
|
|
(56,761
|
)
|
|
|
5,727
|
|
|
Net
Cash Provided (Used) by
Investing Activities
|
|
|
(56,761
|
)
|
|
|
3,655
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
|
|
Proceeds
from Loan Payable -
Related Party
|
|
|
66,345
|
|
|
|
138,016
|
|
|
Proceeds/(Payments)
- Equipment
Financing
|
|
|
(3,158
|
)
|
|
|
(3,272
|
)
|
|
Proceeds
from sale of Common
Stock
|
|
|
423,649
|
|
|
|
10,000
|
|
|
Cash
Provided by Financing
Activities
|
|
|
486,836
|
|
|
|
144,744
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Increase (Decrease) in
Cash
|
|
|
(82,388
|
)
|
|
|
(25,208
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
Beginning of
Period
|
|
|
136,815
|
|
|
|
43,538
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
End of
Period
|
|
$
|
54,427
|
|
|
$
|
18,330
|
|
The
accompanying notes are an integral
part of these statements
THE
TRADESHOW MARKETING COMPANY INC
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
NOTE
1.
GENERAL
ORGANIZATION
AND BUSINESS
The
Tradeshow Marketing Company, Inc. (the Company) was organized in the state
of
Nevada on December 3, 2003. The Company was formed to
market specialty products via tradeshows, infomercials, specialty
product shops and kiosks in malls.
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, 2007 and 2006 audited financial statements.
NOTE
2.
SUMMARY
OF
SIGNIFICANT ACCOUNTING PRACTICES
The
relevant accounting policies and procedures are listed below.
Accounting
Basis
The
statements were prepared following generally accepted accounting principles
of
the United States of America consistently applied.
Cash
and Cash
Equivalents
Cash
and
cash equivalents consist of cash and deposits in transit.
Dividends
The
Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
Use
of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
Translation
of
Currency
The
company’s headquarters were in Canada through May 31, 2006 and 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. Inventory
is
carried at the lower of cost of market.
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.
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 3 year to 7 years. Maintenance and repairs
are charged to expense as incurred.
|
|
|
Six
Months Ended
|
|
|
Year
Ended
|
|
|
|
|
November
30, 2007
|
|
|
May
31, 2007
|
|
|
Furniture
& Equipment
|
|
$
|
96,108
|
|
|
$
|
39,345
|
|
|
Vehicles
|
|
|
23,906
|
|
|
|
23,906
|
|
|
Network
Infrastructure & Software
|
|
|
54,100
|
|
|
|
54,100
|
|
|
Leasehold
Improvements
|
|
|
5,640
|
|
|
|
-
|
|
|
|
|
|
179,754
|
|
|
|
117,351
|
|
|
Accumulated
Depreciation
|
|
|
(62,921
|
)
|
|
|
(43,345
|
)
|
|
Net
Property & Equipment
|
|
$
|
116,833
|
|
|
$
|
74,006
|
|
Earnings
per Share
(EPS)
Basic
loss per share of common stock was computed by dividing the net loss by the
weighted average number of shares of common stock outstanding during the
period.
Diluted
loss per share is computed based on the weighted average number of shares of
common stock and dilutive securities outstanding during the period.
Dilutive securities are options and warrants that are freely exercisable into
common stock at less than the prevailing market price. Dilutive securities
are
not
included
in the weighted average number of shares when inclusion would increase the
earnings per share or decrease the loss per share. As of May 31, 2007 and
November 30, 2007, the Company does not have any dilutive
securities.
NOTE
3.
SEGMENT INFORMATION
The
Company operates in two reportable business segments: Retail and
Franchise Sales. The Retail segment is principally engaged in the
operation of two retail outlets specializing in “As Seen on TV”
products. On March 15, 2007 the Company organized the Sandstrom OnTV
Company (Sandstrom) as a wholly-own subsidiary. Sandstrom was
organized to sell unit franchises that operate retail stores under the tradename
“Sandstrom OnTV.” The following table presents segment activity for
the six months ended November 30, 2007:
|
|
|
As
Seen
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On
TV
|
|
|
Sandstrom
|
|
|
Tradeshow
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
154,729
|
|
|
$
|
-
|
|
|
$
|
62
|
|
|
$
|
154,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
79,673
|
|
|
|
-
|
|
|
|
-
|
|
|
|
79,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
75,056
|
|
|
|
-
|
|
|
|
62
|
|
|
|
75,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
142,976
|
|
|
|
332,604
|
|
|
|
142,232
|
|
|
|
617,812
|
|
|
Marketing
Advertising
|
|
|
77
|
|
|
|
23,210
|
|
|
|
1,900
|
|
|
|
25,187
|
|
|
Professional
Fees
|
|
|
-
|
|
|
|
17,989
|
|
|
|
11,052
|
|
|
|
29,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
143,053
|
|
|
|
373,803
|
|
|
|
155,184
|
|
|
|
672,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(67,997
|
)
|
|
$
|
(373,803
|
)
|
|
$
|
(155,122
|
)
|
|
$
|
(596,922
|
)
|
NOTE
4.
STOCKHOLDERS’
EQUITY
Common
Stock
The
Company is authorized 50,000,000 common shares with a $0.0001 par
value.
Year
Ended May 31,
2007
On
June
1, 2006 the Company recorded $14,141 contributed capital to eliminate the
accumulated foreign currency translation balance.
During
the year ended May 31, 2007, the Company issued 1,740,000 common shares in
a
private placement for $440,000.
During
the year ended May 31, 2007, the Company issued 365,750 common shares for
services at $97,875.
During
the year ended May 31, 2007the Company issued 320,000 common shares at $0.25
for
the conversion of $80,000 shareholders loan.
On
May
11, 2007 the Company issued 47,000 common shares
related to the July
20,
2005 purchase of the assets of Sandstrom stores in Phoenix wherein the Company
issued 15,000 shares at a stated value of $1.00 per share. The
additional 47,000 shares issued adjusts the value of the total shares issued
to
the fair value of $0.24 per share.
Six
Months Ended November
30, 2007
During
the six months ended November 30, 2007, the Company issued 147,700 common shares
for services valued at $41,938.
During
the six months ended November 30, 2007, the Company issued 1,673,000 common
shares in a private placement for $423,649.
During
the six months ended November 30, 2007, the Company issued 105,440 common shares
for the conversion of $26,360 of shareholder loans.
NOTE
5.
LOANS
PAYABLE -
RELATED PARTY
During
the six months ended November 30, 2007, shareholders have provided operational
financing to the company on unsecured, non-interest bearing, demand loans in
the
amount of $66,345. The amount due to shareholders on demand notes at November
30, 2007 is $128,803.
NOTE
6.
GOING
CONCERN
The
accompanying financial statements have been prepared assuming that the company
will continue as a going concern. The Company has accumulated a total loss
of
approximately $1,593,000 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.
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
This
discussion and analysis should be read in conjunction with the accompanying
Consolidated Financial Statements and related notes. Our discussion and analysis
of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of financial statements in conformity with accounting principles generally
accepted in the United States of America requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of any contingent liabilities at the financial statement date and
reported amounts of revenue and expenses during the reporting period. On an
on-going basis we review our estimates and assumptions. Our estimates were
based
on our historical experience and other assumptions that we believe to be
reasonable under the circumstances. Actual results are likely to differ from
those estimates under different assumptions or conditions, but we do not believe
such differences will materially affect our financial position or results of
operations. Our critical accounting policies, the policies we believe are most
important to the presentation of our financial statements and require the most
difficult, subjective and complex judgments, are outlined below in‘‘—Critical
Accounting Policies,’’ and have not changed significantly.
In
addition, certain statements made in this report may constitute “forward-looking
statements”. These forward-looking statements involve known or unknown risks,
uncertainties and other factors that may cause the actual results, performance,
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements. Specifically, 1) our ability to obtain necessary regulatory
approvals for our products; and 2) our ability to increase revenues and
operating income, is dependent upon our ability to develop and sell our
products, general economic conditions, and other factors. You can identify
forward-looking statements by terminology such as “may,” “will,” “should,”
“expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” “continues” or the negative of these terms or other
comparable terminology. Although we believe that the expectations reflected-in
the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance or achievements.
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.
On
March
15, 2007 the Company organized the Sandstrom OnTV Company (Sandstrom) as a
wholly-own subsidiary. Sandstrom was organized to sell unit
franchises that operate retail stores under the tradename “Sandstrom
OnTV.” As of November 30, 2007, there have been no franchise
sales.
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 November 30, 2007 the bulk of our sales revenue has come from
our
retail stores. The sales from our stores are experiencing moderate
growth. Internet sales have declined as Management has focused their
capital resources on the franchise sales division, as opposed to marketing
the
Company’s website sales. Our business model contemplates the sale of franchises
and increased revenues as a means to generate revenues, as needed, for our
retail store operations.
Acquisition
of
productive assets
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 buy
the
companies Chief Technical Officer and orders are fulfilled thru the Paradise
Valley retail store in Phoenix Arizona.
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.
The
approximate square footage of each store is 530 sq feet.
The
Company has two operating leases for retail outlets located in the Arrowhead
and
Paradise Valley Malls in Phoenix, Arizona with aggregate monthly payment of
$9,830 or $117,960 per year. These leases expire in December 2008 and
December 2011 respectively. The Company also has a lease for office
space in the Scottsdale Airpark. The monthly payment is $5,432 or
$65,184 per year. The lease expires in February 2010 with an option
for a 2 year renewal. The numbers shown below assume that the company
will be able to renew its leases e and continue to operate these facilities
at
the current rate:
|
|
|
Year
1
|
|
|
Year
2
|
|
|
Year
3
|
|
|
Year
4
|
|
|
Year
5
|
|
|
Retail
Outlets
|
|
$
|
117,960
|
|
|
$
|
117,960
|
|
|
$
|
117,960
|
|
|
$
|
117,960
|
|
|
$
|
117,960
|
|
|
Office
Space
|
|
$
|
65,184
|
|
|
$
|
65,184
|
|
|
$
|
65,184
|
|
|
$
|
65,184
|
|
|
$
|
65,184
|
|
Results
of
Operations
Three
Months Ended November 30, 2007 Compared to the Three Months Ended November
30,
2006
The
following overview provides a summary of key
information concerning our financial results for the second quarter of our
fiscal year ending May 31
st
,
2008:
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
November
30,
|
|
November
30,
|
|
|
Increase
|
|
|
|
|
2007
|
|
2006
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
64,896
|
|
|
$
|
66,157
|
|
|
$
|
(1,261
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
29,302
|
|
|
|
38,590
|
|
|
|
(9,288
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
35,594
|
|
|
|
27,567
|
|
|
|
8,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
337,798
|
|
|
|
111,503
|
|
|
|
226,295
|
|
|
Professional
Fees
|
|
|
51,620
|
|
|
|
25,731
|
|
|
|
25,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
389,418
|
|
|
|
137,234
|
|
|
|
252,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(353,824
|
)
|
|
$
|
(109,667
|
)
|
|
|
(244,157
|
)
|
Revenue
Revenue
for the second quarter of fiscal year 2008 decreased by $1,261. The decrease
in
sales is attributable to a decline in website sales as a result of Management’s
decision not to focus marketing efforts on their website sales, instead focusing
on our franchise sales division.
Expenses
There
was
an increase of $226,295 in general and administrative expenses for the second
quarter of fiscal year 2008 compared to the second quarter of fiscal year 2007.
The increase in general and administrative expense is due an increase in
salaries, and other costs associated with the franchise sales division.
Professional fees also increased by $25,889. This increase is due to legal
and
other professional fees associated with our franchise sales
division.
Net
Loss
Our
net
loss for the second quarter of 2007 was $(353,824) as compared to $(109,667)
for
the comparable prior year quarter, an increase in net loss of
$244,157.
Results
of Operations for the Six months ended November 30, 2007 compared to the Six
Months ended November 30, 2006
The
following overview provides a summary of key information concerning our
financial results for the first six months of our fiscal year ending May 31
st
,
2008
and compared to the first six moths of fiscal year 2007:
|
|
|
Six
Months Ended
|
|
|
|
|
|
|
|
|
November
30,
|
|
|
November
30,
|
|
|
Increase
|
|
|
|
|
2007
|
|
|
2006
|
|
|
(Decrease)
|
|
|
Revenue
|
|
$
|
154,791
|
|
|
$
|
198,697
|
|
|
$
|
(43,906
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
79,673
|
|
|
|
117,279
|
|
|
|
(37,606
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
75,118
|
|
|
|
81,418
|
|
|
|
(6,300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and Administrative
|
|
|
586,908
|
|
|
|
195,095
|
|
|
|
391,813
|
|
|
Professional
Fees
|
|
|
85,132
|
|
|
|
29,053
|
|
|
|
56,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
672,040
|
|
|
|
224,148
|
|
|
|
447,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$
|
(596,922
|
)
|
|
$
|
(142,730
|
)
|
|
$
|
(454,192
|
)
|
Revenue
The
Company generated revenue of $154,791 from operations for the six months ended
November 30, 2007 as compared to revenue of $198,697 for the six months ended
November 30, 2006, a decrease of $43,906. The decrease in sales is attributable
to a decline in website sales as a result of Management’s decision not to focus
marketing efforts on their website sales, instead focusing on our franchise
sales division.
Expenses
There
was
an increase of $391,813 in general and administrative expenses for the first
six
months of fiscal year 2008 as compared to the first six months of fiscal year
2007, and also an increase of $56,079 for professional fees. The increase in
general and administrative expenses and the professional fees are due to an
increase in wages and salaries, and in legal and accounting fees related to
the
opening of the franchise sales division.
Net
Loss
Our
net
loss for the six months ended November 30, 2007 and 2006 was $(596,922) and
$
(142,730) respectively , an increase in net loss of $454,192. The increase
in
net loss was due to the addition of our franchise sales division, Sandstrom,
and
the related costs and a decrease in revenues.
Limited
Operating History; Need for
Additional Capital
There
is
no historical financial information about the Company upon which to base an
evaluation of our performance. The Company is a development stage corporation
and has not generated any revenues from operations. 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 “Item
1. Description of Business - Risk Factors”.
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 $54,427 as of November 30, 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. 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
Annual 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 has an accumulated deficit of approximately $1,593,000 at November
30,
2007. Our net loss for the three and six months ended November 30,
2007 were $353,824 and $596,922 as compared to a losses of $109,667 and
$142,730, respectively for the three and six months ended November 30, 2006.
The
current period 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 develop and promote our franchise sales
effort.
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 direction for the business, we face a high risk of business
failure due to our inability to predict the success of our business
The
Company has just begun the initial stages of our new business, and thus we
have
no way to evaluate the likelihood that we will be able to operate the business
successfully. The Company was incorporated on December 3, 2003, and to date
has
been involved primarily in the sale of a diverse mix of innovative merchandise
via tradeshows, malls (kiosks), fairs, exhibitions. Tradeshow will also sell
the
same merchandise as part of its offerings in its two new mall-based
stores.
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
The
statements contained in this
Quarterly Report on Form 10-QSB that are not historical fact are forward-looking
statements (as such term is defined in the Private Securities Litigation Reform
Act of 1995), within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. The forward-looking statements contained herein are based on
current expectations that involve a number of risks and uncertainties.
These statements can be identified by the use of forward-looking terminology
such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the
negative thereof or other variations thereon or comparable terminology, or
by
discussions of strategy that involve risks and uncertainties. The Company
wishes to caution the reader that these forward-looking statements that are
not
historical facts are only predictions. No assurances can be given that the
future results indicated, whether expressed or implied, will be achieved.
While sometimes presented with numerical specificity, these projections and
other forward-looking statements are based upon a variety of assumptions
relating to the business of the Company, which, although considered reasonable
by the Company, may not be realized. Because of the number and range of
assumptions underlying the Company’s projections and forward-looking statements,
many of which are subject to significant uncertainties and contingencies that
are beyond the reasonable control of the Company, some of
the assumptions inevitably
will not
materialize, and unanticipated events and circumstances may occur subsequent
to
the date of this report. These forward-looking statements are based on
current expectations and the Company assumes no obligation to update this
information. Therefore, the actual experience of the Company and the
results achieved during the period covered by any particular projections or
forward-looking statements may differ substantially from those projected.
Consequently, the inclusion of projections and other forward-looking statements
should not be regarded as a representation by the Company or any other person
that these estimates and projections will be realized, and actual results may
vary materially. There can be no assurance that any of these expectations
will be realized or that any of the forward-looking statements contained herein
will prove to be accurate.
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 prior year, a substantial portion of our total revenues and all or most
of our earnings came in the third quarter ending February 28. The results of
operations for this quarterly period are not necessarily indicative of the
results for the full fiscal year.