Delaware
|
20-1915083
|
(State
of incorporation)
|
(IRS
Employer Identification No.)
|
7030
Hayvenhurst Avenue, Van Nuys, CA
|
91406
|
(Address
of principal executive offices)
|
(Zip
Code)
|
TABLE
OF CONTENTS
|
||
|
|
|
|
|
|
|
|
|
PART
I Financial
Information
|
|
|
|
|
|
Item
1
|
2
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
|
|
Item
2
|
18
|
|
|
|
|
Item
3
|
29
|
|
|
|
|
PART
II Other
Information
|
|
|
|
|
|
Item
1
|
30
|
|
|
|
|
Item
2
|
30
|
|
|
|
|
Item
3
|
30
|
|
|
|
|
Item
4
|
30
|
|
|
|
|
Item
5
|
30
|
|
|
|
|
Item
6
|
30
|
|
Page
|
|
Consolidated
financial statements
|
|
Consolidated
Balance Sheet (Unaudited)
|
2
|
Consolidated
Statements of Operations (Unaudited)
|
3
|
Consolidated
Statements of Cash Flows (Unaudited)
|
4
|
Notes
to consolidated financial statements (Unaudited)
|
5 -
17
|
LandBank
Group, Inc. and Subsidiary
|
||||
As
of March 31, 2007
(Unaudited)
|
||||
ASSETS
|
||||
Current
assets
|
||||
Cash
& cash equivalents
|
$
|
439,251
|
||
Inventory
- land parcels
|
2,956,908
|
|||
Other
receivable
|
3,807
|
|||
Prepaid
expenses
|
189,279
|
|||
Total
current assets
|
3,589,245
|
|||
Property
& equipment, net
|
17,325
|
|||
Total
assets
|
$
|
3,606,570
|
||
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
||||
Current
liabilities
|
||||
Accounts
payable
|
$
|
94,906
|
||
Due
to related parties
|
|
2,767,987
|
||
Accrued
expenses
|
322,721
|
|||
Loan
payable - current portion
|
43,183
|
|||
Deferred
income
|
758,511
|
|||
Total
current liabilities
|
3,987,308
|
|||
Loan
payable - non-current portion
|
460,262
|
|||
Shareholders'
deficit
|
||||
Common
stock, 100,000,000 shares authorized; $0.0001
|
||||
par
value; 9,835,331 issued and outstanding
|
984
|
|||
Additional
paid in capital
|
413,461
|
|||
Accumulated
deficit
|
(1,255,445
|
)
|
||
Total
shareholders' deficit
|
(841,000
|
)
|
||
Total
liabilities and shareholders' deficit
|
$
|
3,606,570
|
Landbank
Group Inc. and Subsidiary
|
|||||||
For
The Three Month Periods Ended March 31, 2007 and 2006
(Unaudited)
|
|||||||
2007
|
2006
|
||||||
Revenue,
net
|
$
|
901,707
|
$
|
1,657,341
|
|||
Cost
of revenue
|
|||||||
Direct
selling expenses
|
494,507
|
939,865
|
|||||
Royalty
to related party
|
142,520
|
251,117
|
|||||
Total
cost of sales
|
637,027
|
1,190,982
|
|||||
Gross
profit
|
264,680
|
466,359
|
|||||
Operating
expenses
|
|||||||
Rent,
related party
|
5,556
|
5,553
|
|||||
Professional
fees, related parties
|
5,383
|
30,700
|
|||||
Professional
fees
|
28,759
|
91,310
|
|||||
Legal
fees
|
63,777
|
71,703
|
|||||
Directors
and officers compensation
|
41,344
|
-
|
|||||
General
& administrative expenses
|
204,884
|
90,070
|
|||||
Total
operating expenses
|
349,703
|
289,336
|
|||||
Income
(loss) from operations
|
(85,023
|
)
|
177,023
|
||||
Other
expenses
|
|||||||
Merger-related
costs
|
-
|
(140,000
|
)
|
||||
Interest
expenses - bank
|
(12,411
|
)
|
(14,830
|
)
|
|||
Interest
expenses - related parties
|
(39,714
|
)
|
(18,549
|
)
|
|||
Total
other expenses
|
(52,125
|
)
|
(173,379
|
)
|
|||
Income
(loss) before income taxes
|
(137,148
|
)
|
3,644
|
||||
Provision
for income taxes
|
1,600
|
-
|
|||||
Net
income (loss)
|
$
|
(138,748
|
)
|
$
|
3,644
|
||
*Basic
and diluted weighted average number
|
|||||||
of
common stock outstanding
|
9,835,331
|
9,630,538
|
|||||
Basic
and diluted net income (loss) per share
|
$
|
(0.01
|
)
|
$
|
0.00
|
LandBank
Group, Inc. and Subsidiary
|
|||||||
For
the Three Month Periods Ended March 31, 2007 and 2006
(Unaudited)
|
|||||||
|
|
||||||
2007
|
2006
|
||||||
Cash
flows from operating activities:
|
|
|
|||||
Net
income (loss)
|
$
|
(138,748
|
)
|
$
|
3,644
|
||
Adjustments
to reconcile net income (loss) to net cash
|
|||||||
Provided
by (used in) operating activities:
|
|||||||
Depreciation
- capital equipment
|
3,464
|
-
|
|||||
Options
granted to Directors & Officers
|
13,844
|
-
|
|||||
Changes
in current assets and liabilities:
|
|||||||
(Increase)
decrease in current assets
|
|||||||
Inventory
- land parcels
|
280,355
|
346,740
|
|||||
Other
receivable
|
4,736
|
-
|
|||||
Prepaid
expenses
|
24,896
|
196,557
|
|||||
Increase
(decrease) in current liabilities
|
|||||||
Accounts
payable
|
(39,297
|
)
|
43,466
|
||||
Accrued
expenses
|
(7,726
|
)
|
2,536
|
||||
Deferred
income
|
(36,156
|
)
|
(849,535
|
)
|
|||
Total
adjustments
|
244,116
|
(260,236
|
)
|
||||
Net
cash provided by (used in) operating activities
|
105,368
|
(256,592
|
)
|
||||
Cash
flows from investing activities
|
|||||||
Equipment
purchases
|
(20,789
|
)
|
-
|
||||
Cash
flows from financial activities
|
|||||||
Due
to related parties
|
98,138
|
(177,581
|
)
|
||||
Repayment
of loans
|
(9,436
|
)
|
(32,800
|
)
|
|||
Net
cash provided by (used) in financial activities
|
88,702
|
(210,381
|
)
|
||||
Net
increase (decrease) in cash and cash equivalents
|
173,281
|
(466,973
|
)
|
||||
Cash
and cash equivalents - beginning balance
|
265,970
|
631,425
|
|||||
Cash
and cash equivalents - ending balance
|
$
|
439,251
|
$
|
164,452
|
|||
Supplemental
disclosure of cash flows information:
|
|||||||
Taxes
paid
|
$
|
1,600
|
$
|
-
|
|||
Interest
paid
|
$
|
12,411
|
$
|
14,830
|
1. |
A
brief description of the provisions of this Statement
|
2. |
The
date that adoption is required
|
3. |
The
date the employer plans to adopt the recognition provisions of this
Statement, if earlier.
|
As
of March 31, 2007
|
As
of March 31, 2006
|
||||||||||||||||||
Principal
|
Interest
|
Total
|
Principal
|
Interest
|
Total
|
||||||||||||||
John
Beck's Amazing Profits, LLC
|
$
|
543,773
|
$
|
-
|
$
|
543,773
|
$
|
(3,222
|
)
|
$
|
(3,849
|
)
|
$
|
(7,071
|
)
|
||||
Mentoring
of America, LLC
|
54,928
|
7,523
|
62,451
|
41,333
|
3,201
|
44,534
|
|||||||||||||
HG,
Inc.
|
1,546,679
|
130,067
|
1,676,746
|
467,405
|
18,672
|
486,077
|
|||||||||||||
HG
Marketing, LLC
|
382,606
|
75,330
|
457,936
|
582,606
|
36,721
|
619,327
|
|||||||||||||
Family
Products, LLC
|
-
|
2,393
|
2,393
|
-
|
2,393
|
2,393
|
|||||||||||||
Gaytan,
Baumblatt, Leevan
|
24,688
|
-
|
24,688
|
-
|
-
|
-
|
|||||||||||||
$
|
2,552,673
|
$
|
215,313
|
$
|
2,767,987
|
$
|
1,088,122
|
$
|
57,138
|
$
|
1,145,260
|
Deferred
revenue
|
$
|
758,511
|
||
Direct
costs:
|
||||
Land
|
380,708
|
|||
Royalty
to affiliated party
|
65,282
|
|||
Processing
fees
|
42,950
|
|||
Merchant
fees
|
18,276
|
|||
Sales
commissions
|
29,433
|
|||
Total
direct costs
|
536,649
|
|||
Gross
profit
|
$
|
221,862
|
||
As
a % of net revenue
|
29.2
|
%
|
Years
ended
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2008
|
|
$
|
40,183
|
2009
|
|
|
44,391
|
2010
|
|
|
49,039
|
2011
|
|
|
54,174
|
2012
|
|
|
59,847
|
Thereafter
|
255,811
|
||
Total
|
503,445
|
||
Current
portion
|
43,183
|
||
Long-term
portion
|
$
|
460,262
|
As
of 3/31/07
|
|||
Rent
|
2,368
|
||
Insurance
|
7,970
|
||
Audit
fees
|
22,500
|
||
Travel
advance
|
500
|
||
Merchant
fees
|
18,276
|
||
Sales
commissions
|
29,433
|
||
Royalties
to an affiliate
|
65,282
|
||
Processing
fees
|
42,950
|
||
189,279
|
Post-Split
|
|
Pre-Split
|
||||
Par
Value
|
$
|
0.0001
|
$
|
0.00001
|
||
Authorized
number of shares
|
100,000,000
|
1,000,000,000
|
||||
Shares
issued and outstanding
|
9,206,597
|
92,052,000
|
2007
|
2008
|
2009
|
||||||||
Arizona
Office
|
$
|
22,224
|
$
|
1,852
|
$
|
-
|
||||
Alameda
Office
|
12,623
|
14,196
|
1,183
|
|||||||
Total
|
$
|
34,847
|
$
|
16,048
|
$
|
1,183
|
As
of March 31, 2007, the Company had paid PPH the above mentioned $10,000
advance for legal services and an additional $70,000 advance towards
fees
incurred by PPH in relation to their services provided to the Company.
The
remaining $155,000 owed to PPH was recorded as an accrued liability
as of
March 31, 2007.The entire $235,000 owed to PPH was expensed during
the
Company’s fiscal year 2006, which ended December 31,
2006.
|
Options
outstanding
|
Weighted
Average Exercise Price
|
Aggregate
Intrinsic Value
|
|||||||
Outstanding,
December 31, 2006
|
1,400,000-
|
-
|
-
|
||||||
Granted
|
100,000
|
-
|
-
|
||||||
Forfeited
|
-
|
-
|
-
|
||||||
Exercised
|
-
|
||||||||
Outstanding
March 31, 2007
|
1,500,000
|
$
|
0.02
|
-
|
Outstanding
Options
|
Exercisable
Options
|
||||||||||||||
|
|
||||||||||||||
Exercise
Price
|
Number
|
Average
Remaining Contractual Life
|
Average
Exercise Price
|
Number
|
Average
Exercise Price
|
||||||||||
$0.0001
|
1,200,000
|
|
|
4.86
|
|
$
|
0.0001
|
|
|
240,000
|
|
$
|
0.0001
|
||
$0.12
|
|
|
200,000
|
|
|
4.99
|
|
$
|
0.12
|
|
|
-
|
|
$
|
0.12
|
$0.02
|
|
|
100,000
|
|
|
3.95
|
|
$
|
0.02
|
|
|
-
|
|
$
|
0.02
|
1. |
Hired
additional Land Acquisition Specialists to help acquire more properties,
as well as a more diversified mix of properties, that will allow
the
Company to increase sales volume while minimizing the risk of saturating
a
particular market, or geographic location, and thereby adversely
affecting
the ability of the Company’s customers to resell their properties at a
profit.
|
2. |
Hired
consultants to assist the Company in securing additional financing
(see
note 13).
|
Three
Months Ended March 31,
|
||||||||||||
2007
|
2006
|
|||||||||||
Units
|
Revenue
(000s)
|
Units
|
Revenue
(000s)
|
|||||||||
Arizona
|
4
|
$
|
6.2
|
-
|
$
|
-
|
||||||
Colorado
|
7
|
56.3
|
-
|
-
|
||||||||
Florida
|
(1
|
)
|
(9.5
|
)
|
-
|
-
|
||||||
New
Mexico
|
(1
|
)
|
(6.1
|
)
|
-
|
-
|
||||||
Oklahoma
|
8
|
5.3
|
251
|
421.3
|
||||||||
Pennsylvania
|
172
|
482.8
|
842
|
70.8
|
||||||||
Texas
|
199
|
366.7
|
38
|
1,165.2
|
||||||||
388
|
$
|
901.7
|
1,131
|
$
|
1,657.3
|
Three
Months Ended March 31,
|
||||||||||||
2007
|
2006
|
|||||||||||
Total
(000s)
|
Per
lot average
|
Total
(000s)
|
Per
lot average
|
|||||||||
Land
cost
|
$
|
370.8
|
$
|
956
|
$
|
737.3
|
$
|
652
|
||||
Processing
fees
|
51.7
|
133
|
73.4
|
65
|
||||||||
Merchant
fees
|
31.9
|
82
|
42.7
|
38
|
||||||||
Royalty
to related party
|
142.5
|
367
|
251.1
|
222
|
||||||||
Sales
commissions
|
40.1
|
103
|
61.9
|
55
|
||||||||
Dues
& taxes
|
-
|
-
|
24.5
|
22
|
||||||||
$
|
637.0
|
$
|
1,642
|
$
|
1,190.9
|
$
|
1,053
|
Three
Months Ended March 31,
|
||||||
2007
|
2006
|
|||||
Salaries
& related
|
$
|
148.9
|
$
|
59.9
|
||
Directors
& Officers compensation
|
41.3
|
-
|
||||
Legal
fees
|
63.8
|
71.7
|
||||
Accounting/audit
fees
|
15.0
|
3.0
|
||||
Investor
relations
|
9.3
|
7.6
|
||||
Professional
fees
|
4.3
|
111.4
|
||||
Office
rent
|
7.9
|
5.6
|
||||
Travel
|
15.5
|
20.5
|
||||
Insurance
|
14.0
|
-
|
||||
Depreciation
|
1.7
|
-
|
||||
Other
|
28.0
|
9.6
|
||||
$
|
349.7
|
$
|
289.3
|
Cash
as of 12/31/06
|
$
|
265,970
|
||
Net
loss for three months ended 3/31/07
|
(138,748
|
)
|
||
Add
back depreciation - capital equipment
|
3,464
|
|||
Add
back amortization - options
|
13,844
|
|||
Less
cash used to pay down accounts
|
||||
payable
and accrued expenses
|
(47,023
|
)
|
||
Less
reduction in deferred revenue
|
(36,156
|
)
|
||
Less
principal payments on bank loan
|
(9,436
|
)
|
||
Less
capital equipment purchases
|
(20,789
|
)
|
||
Add
cash from inventory sold
|
280,355
|
|||
Add
cash borrowed from related parties
|
98,138
|
|||
Add
cash from reduction in prepaid expenses
|
24,896
|
|||
Add
cash from reduction in other receivables
|
4,736
|
|||
Cash
provided during three months ended 3/31/07
|
173,281
|
|||
Cash
as of 3/31/07
|
$
|
439,251
|
Actively
marketed
|
Being
prepared for marketing
|
Total
|
|||||||
Arizona
|
26,973
|
-
|
26,973
|
||||||
Colorado
|
269,861
|
-
|
269,861
|
||||||
Florida
|
23,574
|
-
|
23,574
|
||||||
Michigan
|
17,347
|
-
|
17,347
|
||||||
Mexico
|
-
|
298,348
|
298,348
|
||||||
Nevada
|
-
|
859,072
|
859,072
|
||||||
New
Mexico
|
61,910
|
-
|
61,910
|
||||||
Oklahoma
|
17,499
|
-
|
17,499
|
||||||
Pennsylvania
|
252,338
|
66,353
|
318,691
|
||||||
Texas
|
1,062,133
|
1,500
|
1,063,632
|
||||||
1,731,635
|
1,225,273
|
2,956,908
|
Prepaid
Expenses as of March 31, 2007
|
|||
|
(000s)
|
||
Accounting/audit
fees
|
$
|
22.5
|
|
Rent
- Alameda office
|
2.4
|
||
Travel
advance
|
0.5
|
||
Insurance
|
8.0
|
||
Processing
fees
|
42.9
|
||
Merchant
fees
|
18.3
|
||
Royalty
to related party
|
65.3
|
||
Sales
commissions
|
29.4
|
||
$
|
189.3
|
Current
Liabilities as of March 31, 2007
|
|||
|
(000s)
|
||
Accounts
payable
|
$
|
94.9
|
|
Due
to related parties (principal & accrued interest)
|
2,768.0
|
||
Accrued
expenses
|
266.9
|
||
Accrued
payroll
|
55.8
|
||
Bank
loan - current portion
|
43.2
|
||
Deferred
revenue
|
758.5
|
||
$
|
3,987.3
|
· |
changes
in general or local economic
conditions;
|
· |
changes
in supply of or demand for similar or competing properties in the
area;
|
· |
bankruptcies,
financial difficulties or lease defaults by
customers;
|
· |
changes
in interest rates and availability of permanent mortgage financing
that
may render the sale of a property difficult or unattractive or otherwise
reduce the returns to stockholders;
|
· |
changes
in governmental rules, regulations, and fiscal policies, including
changes
in tax, real estate, environmental, and zoning
laws;
|
· |
periods
of high interest rates and tight money
supply.
|
No.
|
Description
|
|
|
|
|
31.1
|
Certification
of Principal Executive Officers Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
31.2
|
Certification
of Principal Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.1
|
Certification
of Principal Executive Officers Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
32.2
|
Certification
of Principal Financial Officers Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
||
|
|
|
Date: May
15, 2007
|
By:
|
/s/
Doug
Gravink
|
|
Doug
Gravink
Chief
Executive Officer
|
|
|
|
Date: May
15, 2007
|
By:
|
/s/
Gary
Hewitt
|
|
Gary
Hewitt
President
|