10KSB 1 plni0510k5.htm PLNI 2005 10KSB

Securities and Exchange Commission

Washington, D.C. 20549

 

FORM 10-KSB

 

x

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the years ended December 31, 2004 and December 31, 2005

 

[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _______ to _______

 

 

COMMISSION FILE NUMBER: 000-10299  

 

PLASTICON INTERNATIONAL, INC.

(Exact name of small business issuer as specified in its charter)

 

WICKLUND HOLDING COMPANY

(Former name of small business issuer)

 

 

Wyoming

20-4263326

 

(State or other jurisdiction of

(IRS Employer identification No.)

incorporation or organization)

 

 

 

3288 Eagle View Lane, #290

 

Lexington, KY 40509

 

(Address of principal executive offices)

 

(859) 245-5252  

(Issuer's telephone number)

 

Securities registered under Section 12(b) of the Exchange Act:

 

None.

 

Securities registered under Section 12(g) of the Exchange Act:

 

Common Stock, $.001 par value

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

 

Indicate by check mark whether the small business issuer is a shell Company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

 


 

 

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or an amendment to this Form 10-KSB. x

 

State issuer's revenues for its most recent fiscal year: $0.00.

 

As of December 31, 2005, there were 3,727,740,100 common shares outstanding. The closing price of the Company’s common stock as of December 30, 2005 was $0.0044.

 

Transitional Small Business Disclosure Format (check one): Yes o No x

 

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

 

The discussion contained in this 10-KSB under the Securities Exchange Act of 1934, as amended, (the "Exchange Act") contains forward-looking statements that involve risks and uncertainties. The issuer's actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the Company believes," "management believes" and similar language, including those set forth in the discussion under "Description of Business," including the "Risk Factors" described in that section, and "Management's Discussion and Analysis or Plan of Operation" as well as those discussed elsewhere in this Form 10-KSB. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them.

 

As used in this Form 10-KSB, unless the context requires otherwise, “we” or “us” or the “Company” means Plasticon International, Inc. and its subsidiaries.

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

 

Page

 

 

PART I

4

Item 1.

Description of Business

7

Item 2.

Properties

7

Item 3.

Legal Proceedings

7

Item 4.

Submission of Matters to Vote of Security Holders

7

 

 

Part II

 

Item 5.

Market for Small business issuer’s Common Equity and Related

 

 

Stockholder Matters

7

 

Item 6.

Management’s Discussion and Analysis of Financial Condition

 

 

And Results of Operation

9

 

Item 7.

Financial Statements and Supplementary Data

19

Item 8.

Changes with and Disagreements With Accountants on

 

 

Accounting and Financial Disclosure

19

Item 8A. Controls and Procedures

19

 

 

Part III

 

Item 9.

Directors and Executive Officers of Small business issuer

21

Item 10. Executive Compensation

23

Item 11. Security Ownership of Certain Beneficial Owners and

 

Management

24

Item 12. Certain Relationship and Related Transactions

24

 

Part IV

Item 13. Exhibits, Financial Statement Schedules, and Reports on

 

Form 8-K

26

Item 14. Principal Accountant Fees and Services

27

 

 

 

 

 

 

 

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PART I

 

ITEM 1.

Description of Business

 

Plasticon International, Inc. (“Plasticon”, “we”, “us”, “our” or, “the Company”), was incorporated in Delaware in 1981 and re-domiciled in Wyoming on January 22, 2004. We are engaged in the business of designing, producing, and distributing high-quality concrete accessories (rebar supports), informational and directional signage, and plastic lumber, which are all produced from recycled and recyclable plastics.

 

We have been in the oil and recycled plastics business since 1981. The Company’s line of plastic concrete accessories has been approved or accepted in all 50 states and several foreign countries including Poland, Israel, Canada, Mexico, and Egypt. In addition, its transportation signage has received Department of Transportation (DOT) approval or acceptance in all 50 states. Specifically, the Company offers for resale:

 

1.

Rebar supports

 

2.

Plastic lumber

 

3.

Information and Directional signage (i.e.; highway and state signs, etc.)

 

4.

Impermeable concrete-like products made from recycled glass.

A unique feature of all our products is that they are of the highest quality, yet do not require virgin raw material. Using recycled materials significantly reduces the cost of manufacturing and thus, we are considered a “green Company.” Our use of environmental waste as raw material in the production of new and innovative products will continue to reduce waste since the new products are themselves, recyclable.

Our primary products (80% of revenue) are concrete accessories. Over the course of 10 years in business, the Company has focused on the development of necessary molds and has obtained approval from each of the fifty states, all U.S. territories, and the Federal DOT for use of these concrete products

Examples where these products are in place include:

 

* CLEVELAND STADIUM ®

* THE ROCK-N-ROLL HALL OF FAME ®

* TAMPA CONVENTION CENTER ®

* TAMPA THREE MILE BRIDGE ®

* NEW YORK WORLD TRADE CENTER (BOMB SITE) ® (S)

* TORONTO SKY DOME ®

* FORD HEADQUARTERS IN TORONTO ®

* IBM HEADQUARTERS IN TORONTO ®

* CHATTANOOGA AQUARIUM ®

* DISNEY ORLANDO ® (PL) (S)

* UNIVERSAL STUDIOS ORLANDO ® (PL) (S)

* RUPP CONVENTION COMPLEX EXPANSION ®\

 

 

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* TIFFANY STREET PIER (R) (PL)

* PIER 84 (PL)

* PIER 87 (PL)

* LEMMON CREEK PIER PROJECT (PL)

* NATIONAL AIRPORT (R)

* LARGEST PUBLIC WORKS PROJECT IN AMERICA (BOSTON) (R)

* DOT APPROVED OR ACCEPTED IN ALL U.S. STATES & TERRITORIES (R)

* DOT APPROVED IN ALL CANADIAN PROVIDENCES (R) (S)

* SIGNAGE IN 38 STATES AND 9 OTHER COUNTRIES (S)

* 200 + BRIDGES (R)

* 100 + HOTELS (R)

* FENCING, DECKING, DOCKS AND PIERS FROM FLORIDA TO NEW YORK TO WASHINGTON

* MAJOR AMUSEMENT PARKS (PL)

* RESTORATION PROJECTS (R) (PL)

* JACKSONVILLE NAVAL YARD (R)

* PEARL HARBOR (R)

* WRIGHT PATTERSON AIR FORCE BASE (S)

* LOS ALAMOS (R)

 

We were chosen for these showcase structures because our products are well designed and are constructed from strong, flexible, dielectric, non-corrosive, recycled and engineered plastic materials. These concrete products do not rust, do not absorb water, and avoid the chloride ion attack. The slab and beam bolster products can be snapped together easily, saving labor and material expenses. These building accessories are marketed by the Company's sales force through a distribution agreement with BlueLinx (63 nationwide locations), and PCI. The concrete construction market for Rebar supports was approximately $27 billion in 1993 (Concrete Reinforcing Steel Institute).

Growing Demand for Plastic Lumber

Plastic lumber sales in the United States are growing at 40% per year, topping 16 million board feet, or about 40 million pounds last year. That compares with 81.5 billion board feet of wood used in the United States in 1995 (National Lumber Building Material Dealers Assoc. in Washington, D.C.). The market is growing and new applications are being discovered each year. Some advantages of plastic lumber over wood are that it does not rot, crack, splinter, decompose, or degrade. Plastic lumber can withstand moisture and changes in temperature as well as attacks by insects such as termites. It is also impervious to salt water and marine infestations that will destroy wood, Plastic lumber can be drilled, nailed, sawed, and routed like wood and requires very little maintenance. It is available in a variety of colors and textures and needs no painting.

 

Our plastic signs are stronger and more durable than aluminum signs, are UV-stable, and will not sustain damage from the sun's rays. They are also unattractive to thieves who remove aluminum signs for salvage value.

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Our sales and distribution activities are managed from our Kentucky and Florida locations. The Company’s Rebar supports are manufactured at a custom molding company in St. Louis, Missouri. The Company produces plastic lumber and signage products on a contract basis according to the order’s precise specifications.

 

Growth Strategies

 

In summary, Plasticon has succeeded in establishing ourselves as one of the oldest companies in the emerging and expanding recycled plastics business. The Company wishes to build on its successful history and move to the next level by developing an aggressive marketing program. This program includes increasing inventory and working capital, expanding our marketing initiative, and acquiring additional manufacturing equipment and distribution outlets. New financing would help secure an increase in sales, and improve our net income. Since net loss carry forwards are available, this increase in income could be reinvested in the company and/or reduce debt as appropriate. These reasons mentioned here describe the need and benefits of new financing.

 

Employees

 

In the year 2005, based upon our acquisition of Pro-Mold, the company went from 6 corporate staff members to 60 full-time and contract employees.

 

Environmental Law Compliance

 

There are no current existing environmental concerns for our manufacturing or our products and services. If this changes in the future, we make every effort to comply with all such applicable regulations.

 

Effects of Inflation

 

We believe that inflation has had a negligible effect on operations since inception. The Company believes that they can offset inflationary increases in the cost of labor by increasing sales and improving operating efficiencies.

 

Competition

 

The competition for Plasticon is limited for we have received approval by the General Service Administration (GSA) for their inclusion in its catalogue of products from which all government agencies make purchases. Competitive bidding is not required. Government buyers are encouraged to support environmentally safe products.

 

 

 

 

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Reports to Security Holders

 

We have not filed timely annual reports to security holders as required but do intend to deliver such reports as soon as practicable and from this point forward all of our required information will be filed with the Securities and Exchange Commission (the "Commission"), including Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB, and Current Reports on Form 8-K. The public may read and copy any materials that are filed by us with the Commission at the Commission's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The statements and reports filed by us with the Commission have been filed electronically and are available for viewing or copy on the Commission maintained Internet site that contains reports, proxy, and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address for this site can be found at: http://www.sec.gov.

 

ITEM 2. Properties

 

We currently lease 3,775 square feet of office space at 3288 Eagle View Lane, #290, Lexington, Kentucky 40509. The terms of our lease run from January 1, 2006 through December 31, 2010, with a monthly payment of $5,662.50.

 

ITEM 3. Legal Proceedings

 

We are not a party to any legal proceedings, nor, to the best of our knowledge, are any such proceedings threatened or contemplated.

 

ITEM 4. Submission of Matters to a Vote of Security Holders

 

None.

 

PART II

 

ITEM 5. Market for the Registrant’s Common Stock and Related Security Holder Matters

 

(a)

The principal market in which our common stock traded is the Pink Sheets, under the symbol “PLNI”. The table below presents the high and low bid price for our common stock each quarter during the past two years and reflects inter-dealer prices, without retail markup, markdown, or commission, and may not represent actual transactions. We obtained the following information from BigCharts.com, an on-line source that provides historical pricing information.

 

 

Quarter Ended

Low

High

 

03/31/04

.03

.03

 

06/30/04

.018

.95

 

09/30/04

.0048

.021

12/31/04

.0034

.012

 

 

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(b) Holders. The approximate number of holders of record of the registrant's Common Stock as of December 31, 2004 was 657.

 

Quarter Ended

Low

High

 

03/31/05

.0027

.0029

06/30/05

.0125

.0123

09/30/05

.0128

.0139

12/30/05

.0044

.0051

 

Dividends:

 

We have not declared any cash dividends on our common stock since our inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business. Any decisions as to future payment of dividends will depend on our earnings and financial position and such other factors, as the Board of Directors deems relevant.

 

Dividend Policy

 

All shares of common stock are entitled to participate proportionally in dividends if our Board of Directors declares them out of the funds legally available. These dividends may be paid in cash, property or additional shares of common stock. We have not paid any dividends since our inception and presently anticipate that all earnings, if any, will be retained for development of our business. Any future dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, operating and financial condition, capital requirements, and other factors.

 

Our Shares are "Penny Stocks" within the Meaning of the Securities Exchange Act of 1934.

 

Our Shares are "Penny Stocks" within the definition of that term as contained in the Securities Exchange Act of 1934, generally equity securities with a price of less than $5.00. Our shares will then be subject to rules that impose sales practice and disclosure requirements on certain broker-dealers who engage in certain transactions involving a penny stock.

 

Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, unless the broker-dealer or the transaction is otherwise exempt, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the Registered Representative and current bid and offer quotations for the securities. In addition a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account, the account’s value and information regarding the limited market in penny stocks. As a result of these regulations, the ability of broker-

 

-8-

 

 


 

 

dealers to sell our stock may affect the ability of Selling Security Holders or other holders to sell their shares in the secondary market. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.

 

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. These additional sales practice and disclosure requirements could impede the sale of our securities, if our securities become publicly traded. In addition, the liquidity for our securities may be adversely affected, with concomitant adverse affects on the price our securities. Our shares may someday be subject to such penny stock rules and our shareholders will, in all likelihood, find it difficult to sell their securities.

 

ITEM 6.             Management’s Discussion and Analysis of Financial Condition and Result of Operations

 

The discussion contained in this prospectus contains “forward-looking statements” that involve risk and uncertainties. These statements may be identified by the use of terminology such as “believes”, “expects”, “may”, “will”, or “should”, or “anticipates”, or expressing this terminology negatively or similar expressions or by discussions of strategy. The cautionary statements made in this prospectus should be read as being applicable to all related forward-looking statements wherever they appear in this prospectus. Our actual results could differ materially from those discussed in this prospectus. Important factors that could cause or contribute to such differences include those discussed under the caption entitled “risk factors,” as well as those discussed elsewhere in this prospectus.

 

Plasticon International, Inc. (“Plasticon”, “we”, “us”, “our” or, “the Company”), was originally incorporated in Delaware in 1981. Wanting to have a name that more accurately reflected the nature of our business, on January 22, 2004, we re-domiciled to the state of Wyoming, as we were unable to use the name, “Plasticon” and maintain our status as a Delaware corporation. We finally formally changed our corporate name from Wicklund Holding Company to Plasticon International, Inc. in the third quarter of the year ended 2004.

 

We are presently engaged in the business of designing, producing, and distributing high-quality concrete accessories (rebar supports), informational and directional signage, and plastic lumber, which are all produced from recycled and recyclable plastics. The Company's line of plastic concrete accessories has been approved or accepted in all 50 states and several foreign countries including Poland, Israel, Canada, Mexico, and Egypt. In addition, our transportation signage has received DOT approval or acceptance in all 50 states.

 

We have developed a strategy to expand our operations. Currently, this business plan includes:

 

 

Increase the marketing of our products to additional geographical areas. Although we currently deliver our products on a national and international basis, we focus the majority of our marketing efforts domestically. We plan to increase our marketing efforts to other markets. For example, we have looked into marketing such areas as Canada and Japan.

 

 

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Reducing costs of sales through strategic vendor relationships. Many of our vendors have orally agreed to provide discounts or additional credit terms if our volume of buying increases. We believe an increase in our purchasing will reduce our cost of sales as a percentage of sales.

 

Obtain additional funding. Currently, our assets and income are insufficient to fund our business plan. We may need to raise capital through debt or a follow on stock offering within the next 12 months. We presently have no commitments for either of these sources of funding. Our business plan may be adversely affected if we are unable to raise additional capital.

 

After lengthy negotiations, Promotional Containers, Inc. (“PCI”), an affiliate entity, signed a purchase contract and supplier agreement with Georgia Pacific, effective date February 13, 2004. PCI then subcontracted the contractual agreement with Georgia Pacific to Plasticon. The contract calls for the distribution of the Company’s line of concrete accessories, specifically its rebar support products. James Turek, Sr., the President of Plasticon International, Inc., is also the President of Promotional Containers, Inc.

 

As a result of PCI’s agreement with Georgia Pacific, the largest supplier of building materials in the United States with 63 strategically located warehouses and numerous subsidiary warehouses throughout the country, the Company is well positioned to be one of the larger distributors of rebar support products in the United States.

 

In addition to our unique distribution position, the Company is also the first manufacturer in its sector with DOT approval or acceptance in all 50 states and territories in the U.S., all provinces in Canada, and in parts of the Caribbean. This competitive advantage gives the Company the ability to distribute its line of rebar support products that are used in the construction of bridges, highways, roads, buildings and other infrastructure.

 

Our efforts and potential for success have been predicated on the Company securing significant investment funding to carry out our business plan.

 

The initial contract with PCI, which was subcontracted to Plasticon, was for $5.3 million. We began gearing up production based on purchase order releases.

 

It was shortly after this time frame that Georgia Pacific sold its entire distribution network to a new Company called, BlueLinx Holdings, Inc. At the time of Georgia Pacific’s sale of the distribution arm to BlueLinx Holdings, we were informed that we should halt production until further notice, based on the pending sale.

 

On May 10, 2004, Georgia Pacific completed the previously announced sale of its building products distribution business to BlueLinx Holdings, Inc. At this point in time, BlueLinx informed us that the Company needed time to re-brand and redesign distribution, marketing, packaging, literature and legal materials. As a result, we halted all production until this process was completed.

 

 

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In the fall of 2004, we geared up for production on the original purchase orders regarding the aforementioned agreement between PCI and Georgia Pacific, which had been assumed BlueLinx Holdings, Inc. as a part of the sale. No sooner did this process take place than production was put on hold once again while BlueLinx Holdings, Inc. completed its initial public offering.

 

BlueLinx Holdings, Inc. requested that we should begin to expect orders early in 2005, which unfortunately now placed us one year behind on the original PCI/Georgia Pacific contract. The delay was primarily a result of the corporate sale and IPO of BlueLinx Holdings, Inc.

As we geared up for production in the first quarter of 2005, the manufactured product did not meet standards as specified in the original PCI contract with Georgia Pacific, now assumed by BlueLinx, Inc. This was a direct result of an inferior order of recycled resins, which caused further delays in the production cycle and deliveries. As a result, BlueLinx and Plasticon’s engineering staff created a whole new set of specifications and standards of quality for the manufacture and delivery of our products. Once this process was completed, a renegotiation of the purchase contract began with PCI, resulting in a newly signed agreement on October 17, 2005.

 

As part of the renegotiated purchase contract with PCI, BlueLinx Holdings, Inc., we agreed to take total control of the manufacturing process, which resulted in our acquisition of Pro Mold, Inc., now wholly owned subsidiary. We made a business decision that from that point forward that we would primarily rely on our own manufacturing facilities where we would be able to have complete oversight of all quality control issues for the manufacture and delivery of our products.

 

As a result of the lack of continuity in the production cycle during the years 2004 and 2005, revenues were unfortunately, not what the Company anticipated.

 

In December 2004, Edward J. Gartska, whose duties and responsibilities included, but were not limited to, preparing and maintaining the corporate books and records which included the in-house accounting, resigned as the CFO of the Company ostensibly to take a position with another firm.

 

On January 3, 2005, the Company entered into an agreement to purchase certain assets of Promotional Containers, Inc. The terms of the agreement included a payment of $500,000 to be paid no later than May 31, 2006 as well as the issuance of 100,000,000 shares of non-convertible preferred stock. Promotional Containers, Inc. is owned by James N. Turek Sr., the Company’s president and majority shareholder

 

On December 5, 2005, the Company entered into an agreement to purchase ProMold, a Missouri corporation, for a purchase price of $3,500,000. The terms of the agreement included a cash payment of $2,500,000 with the balance $1,000,000 in the form of a 7% promissory note, with a five year term, which was secured by the assets purchased by the Company.

 

During 2005, the Company received approximately $5,771,180 in funding from Lexreal and approximately $213,278 in funding from PCI both of which are owned by James N. Turek, Sr., the Company’s president and majority shareholder. The funds were significantly utilized to pay for expenses on behalf of the company.

 

 

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On January 3, 2006 James N. Turek Sr., the Company’s president, forgave certain liabilities, which included compensation and interest owed to him, amounting to approximately $5,800,000.

 

On January 3, 2006, James N. Turek, Jr., the son of the Company’s president, forgave certain liabilities, which included compensation and interest owed to him, amounting to approximately $344,000.

 

On January 3, 2006, James Bonn, the Company’s secretary, forgave certain liabilities, which included interest owed to him, amounting to approximately $344,000.

 

The acquisition of Pro Mold, Inc., allows the Company, for the first time in its history, to completely control the manufacturing process from procurement of the resins to production of the end user product.

 

On January 1 2006, the Company purchased the controlling shares of Semco Distribution, Inc., a Nevada corporation and Ultimate Surface LLC, a Nevada limited liability Company. The purchase was for a total sum of $2,750,000 payable as follows; $100,000 deposit, $550,000 upon completion of escrow, shares of restricted common stock with a valuation of $100,000 and $2,000,000 to be paid as cash performance payments based upon certain funding requirements. The $2,000,000 is an earn-out and capped at $2,000,000, but not a payment certain.

 

SEMCO was an attractive acquisition for the Company, because its proprietary coating products will work synergistically with the Company’s rebar support products. SEMCO’s products waterproof any surface they are being applied to and specifically would be applicable to DOT projects, such as waterproofing bridge decks and other infrastructure in the United States.

 

Due to the unique nature of SEMCO’s versatile coating products that chemically cross link to the surface they are being applied to, SEMCO’s surfacing systems allow for multiple applications and distribution in a wide variety of markets.

 

Both of these entities are now wholly owned subsidiaries of the Company.

 

As a result of our uniquely recycled plastic products, as well as our recent acquisitions, we believe that this will enable us to be an integral participant in the lucrative recycled plastics industry. The market size for rebar support products is approximately $30 billion annually, and due to exponential growth of emerging markets, is growing exponentially every year. The informational and directional signage marketplace is a $20 billion industry in the United States alone. The plastic lumber industry is approaching $1 billion in the U.S. and is rapidly gaining market share over traditional wood products. Surfacing products are a multi-billion dollar per year industry. The world flooring industry alone is a $95 billion per year industry. This represents one piece of the opportunity for a surfacing system such as SEMCO’s Ultimate Surface effects, which have applications in multiple markets, such as wall coverings, a variety of interior and exterior applications including asphalt coating, building construction, pool and deck coatings, residential and commercial applications such as bathroom and kitchen projects, and outdoor walkways, to name a few.

 

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We expect to continue to make substantial investments in R&D in order to maintain its edge as a leading innovative force in the industry. At the same time, because quality control and production issues have been essentially addressed, the Company can now turn its attention to growing sales and earnings going forward. The multi-million dollar contract with BlueLinx Holdings, Inc., the largest distributor of building materials in the U.S., gives the Company a stable sales and earnings growth for the foreseeable future and affords the Company a major competitive advantage in the industry. This uniquely positions the Company to focus on gaining market share over the next several years.

 

Given the fact that recycled plastic rebar supports have only recently begun to penetrate and gain market share in the rebar support industry, we believe we are now positioned to grow based on the following industry trends:

 

 

 

The cost of steel continues to rise and will likely continue to increase over the years due to world demand. Recycled plastic products represent a cost-competitive, effective alternative.

   

 

Environmental regulations have become increasingly strict. This trend is driving companies and government entitles to seek environmentally-friendly solutions.

   

 

The Company’s business is built on recycling and a readily abundant source of raw materials for its products.

   

 

Increased construction domestically and internationally.

 

 

If and when the Company obtains adequate financing, it expects to hire additional employees, particularly in the areas of marketing, sales and general management. Without additional financing, it is unlikely that the Company will be able to expand its work force.

 

Results of Operations for the Year Ended 2005

 

 

 

Selected financial data

 

 

Year Ended December 31, 2005  

Net Sales

$ 65,565

 

 

Net Loss

(31,659,904)

Net Loss per Common Share

(.01)

 

Weighted Average

Common Shares Outstanding

3,727,740,000

 

As of December 31, 2005

Total Assets

$ 6,293,238

 

Working Capital

(10,860,817)

Shareholders’ Equity

(Deficit)

(6,840,176)

 

 

No dividends have been declared or paid for any of the periods presented.

 

 

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Results of Operations for the Year Ended 2004

 

 

Selected financial data

 

 

Year Ended December 31, 2004  

Net Sales

$0.00

 

 

Net Loss

(73,648,555)

Net Loss per Common Share

(.05)

 

 

Weighted Average

Common Shares Outstanding

1,440,486,371

 

As of December 31, 2004

Total Assets

$

659,549

 

Working Capital

(10,524,995)

Shareholders’ Equity (Deficit)

(10,005,952)

 

 

No dividends have been declared or paid for any of the periods presented.

 

The Company had a total of $6,293,238 in assets for the year ended 2005. We incurred operating expenses, consisting of selling, general (“SG&A”) and administrative expenses in the amount of $31,958,888 for the year ended 2005, as opposed to $73,448,109 for the year ended 2004. The total other income for the year ended 2005 was $327,646. Included in general and administrative expenses for the year ended December 31, 2005 is approximately $27,336,651 of salary expense. This increase can be explained by salary and consulting expenses as well as financial service expenses. We expect increases in expenses through the year 2006 as we move towards developing our business plan. We expect the increase to be primarily in sales related expenses such as marketing, advertising and sales. Net loss for the year ended 2005 was ($31,659,904) and the basic loss per share was ($0.01) as opposed to the loss for the year ended 2004 which was ($73,648,555) and the basic loss per share was ($0.05). We will likely continue to incur losses through the year 2006. In addition, there can be no assurance that we will achieve or maintain profitability or that our revenue growth can be sustained in the future.

 

Our Total Liabilities and Stockholder’s Equity (Deficit) for year ending 2005 was $6,293,238, as opposed to $659,549 for the year ended 2004. As set forth on the Statement of Operations, the Net Sales for the company for the year ended 2005 was $65,565; The Cost of Sales for the year ended 2005 was ($94,227) and the Gross Margin was ($28,662).

 

The operating results during 2005 and 2004 were largely due to non-cash expense items and one time expenses incurred in the acquisition of companies, auditing and legal fees and that normal operating expense levels are approximately $120,000 per month.              

 

Impact of Inflation.

 

We believe that inflation has had a negligible effect on operations since inception. We believe that we can offset inflationary increases in the cost of labor by increasing sales and improving operating efficiencies.

 

 

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CRITICAL ACCOUNTING POLICIES

 

Method of Accounting

 

It is the Company’s policy to prepare its financial statements following generally accepted accounting principles of the United States of America, consistently applied. The Company’s credit risk primarily consists of accounts that are due from related parties. Its uncollectible accounts are expensed currently using the direct write-off method. Bad debt expense for the years ended December 31, 2005 was $0.

 

Revenue Recognition

 

The Company recognizes revenue when pervasive evidence of an arrangement exists, service has been rendered or products have been shipped; the price to the buyer is fixed and determinable; and collectibility is reasonably assured.

 

Fair Value of Financial Instruments

 

Financial instruments consist principally of cash and various current liabilities. The estimated fair value of these instruments approximates their carrying value.

 

Income Taxes  

 

The Company has implemented the provisions on Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires that income tax accounts be computed using the liability method. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities given the provisions of currently enacted tax laws.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ from those estimates.

 

Property and Equipment

 

Property and equipment are valued at cost. Depreciation and amortization are provided over the estimated useful lives up to twenty years using the straight-line method. The estimated service lives of property and equipment are as follows:

 

 

Manufacturing equipment

20 years

 

Tools and Molds

20 years

 

Office furniture and equipment

10 years

 

 

 

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Net Loss Per Share

 

The Company has adopted Statement of Financial Accounting Standards No. 128, “Earnings Per Share” (“SFAS 128”), specifying the computation, presentation and disclosure of earnings per share information. Basic and fully diluted loss per share have been calculated based upon the weighted average number of shares outstanding. There is no effect on earning per share for the year ended December 31, 2005 relating to the adoption of this standard.

 

Stock Based Compensation

 

On December 16, 2004, FASB published Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”). SFAS 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans.

 

The Company did not issue any share based employee compensation during the years ended December 31, 2005.

 

New Accounting Pronouncements  

 

In April 2003, the FASB issued Statement No. 149, “Amendment of Statement of 133 on Derivative Instruments and Hedging Activities”, which amends Statement 133, Accounting for Derivative Instruments and Hedging Activities. The adoption of this statement did not have a material impact on the Company’s financial position.

 

In May 2003, the FASB issued Statement No. 150, “Accounting for Certain Financial Instruments with Characteristics of both liabilities and Equity. The adoption of this statement did not have a material impact on the Company’s financial position.

 

On December 16, 2004, FASB published Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”). SFAS 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. The provisions of SFAS 123R are effective as of the first interim period that begins after June 15, 2005. Accordingly, the Company will implement the revised standard in the fourth quarter of fiscal year 2005. Currently, the Company accounts for its share-based payment transactions under the provisions of APB 25, which does not necessarily require the recognition of compensation cost in the financial statements. Management is assessing the implications of this revised standard, which may materially impact the Company’s results of operations in future periods.

 

With respect to the cash flow for financing activities, there was an increase in notes payable of $1,793,319 during the year 2005.

 

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Liquidity and Capital Resources for the Year Ended 2005

 

The net loss was ($31,659,904) for the year ended 2005. The depreciation was $53,057. The issuance of common stock for services and other expenses was $141,250. There was related parties’ forgiveness of debt of $3,575,623 an increase accounts payable accrued and other liabilities of $8,844 and an increase in advances from related parties of $501,643 resulting in the net cash used by operating activities of ($7,432,011). No shares were issued from previous subscribed stock during the year ended 2005. Conversion of notes payable from related parties was $6,526,842 yet no conversion notes payable for common stock for the year ended 2005 as opposed to $1,029,277 conversions for the year ended 2004.

 

With respect to the cash flow for financing activities, notes payable decreased by $6,526,842 for the year ended 2005.

 

On December 31, 2003, the Company declared an eight-to-one stock forward split on the shares of the Company’s common stock. Each shareholder on record at December 31, 2003 received eight shares for each share of common stock then held. All references in the financial statements to the number of shares outstanding and per share amounts have been stated to reflect the effect of the stock split for all periods presented.

 

On January 22, 2004, the Company increased its authorized shares from 10 million shares to 26 million shares and increased its par value per share from .01 to .05. On January 30, 2004, the Company increased its authorized shares of common stock to 1.25 billion. On April 15, 2004, the Company increased its authorized shares of common stock to 2 billion. For the year ending December 31, 2004, 1,402,619,771 new common stock shares were issued, of which 1,344,693,154 are considered restricted. The increases were a result of cancelling outstanding debt.

 

On January 30, 2004, the Company increased its authorized shares of preferred stock from 1,000,000 shares to 50,000,000 shares. On April 15, 2004, the Company increased its authorized shares of preferred stock to 100,000,000 shares. No preferred stock was issued by the Company during the years ended 2004 and 2003.

 

On January 22, 2004, the Company increased its authorized shares of common stock from 10,000,000 shares to 26,000,000 million shares and increased its par value per share from .01 to .05. On January 30, 2004, the Company increased its authorized shares of common stock to 1,250,000,000 shares. On April 15, 2004, the Company increased its authorized shares of common stock to 2,000,000,000 shares. As referenced in Note 12 on October 10, 2005, the Company decreased its par value from .05 to .001. The Company’s financials reflect a par value of $.001 for all periods presented.

 

For the year ended December 31, 2004, 1,402,629,771 new common stock shares were issued, of which 1,344,693,154 shares are considered restricted.

 

For the year ended December 31, 2004, the Company issued 770,833,001 shares of common stock for the conversion and/or satisfaction of debt. Of these shares issued for debt, a total of 758,833,001 shares were issued

 

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to James N. Turek, Sr., the Company’s president and a related party. The value for the consideration of the satisfaction of debt was based on the fair market value of the shares on the date of issue.

 

For the year ended December 31, 2004, the Company issued 567,664,082 shares of common stock for services received by the Company. The value of the services was based on the fair market value of the shares on the date of issue.

 

For the year ended December 31, 2004, the Company issued 64,132,688 shares of common stock in consideration for cash received by the Company from third parties as a part of a private placement completed in 1995, of which 43,904,912 shares were issued to the Company’s president and a related party. The common shares were previously considered subscribed (not issued) by the Company as of December 31, 2003, in the amount of $64,133.

 

On January 3, 2005 the Company entered into an agreement to purchase certain assets of Promotional Containers, Inc. The terms of the agreement included a payment of $500,000 to be paid no later than May 31, 2006 as well as the issuance of 100,000,000 shares of non-convertible preferred stock. Promotional Containers, Inc. is owned by James N. Turek Sr., the Company’s president and majority shareholder

 

On April 15, 2005 the company increased its authorized shares of common stock from 2,000,000,000 shares to 3,000,000,000 million shares.

 

On October 10, 2005, the Company increased its authorized shares of common stock from 3,000,000,000 shares with a par value of .05 to 5,000,000,000 shares with a par value of .001. The Company’s financials reflect a par value of .001 in-order to accurately present the current status of the Company. A par value of .001 has been reflected in all periods presented.

 

On December 5, 2005 the Company entered into an agreement to purchase ProMold, a Missouri corporation, for a purchase price of $3,500,000. The terms of the agreement included a cash payment of $2,500,000 with the balance of $700,000 in the form of a 7% percent promissory note, with a five year term, which was secured by the assets purchased by the Company.

 

Subsequent Events:

 

In January 2006, the Company acquired all the stock of SEMCO Manufacturing (SEMCO), a Nevada business that manufactures and sells concrete coating products. The purchase terms are payment of $2,650,000 consisting of $650,000 in cash and $2,000,000 in performance payments (50% of net profits as defined) plus Plasticon restricted common stock worth $100,000. Additionally, the Company will pay a royalty payment (4% of net profits as defined) for twenty years beginning after the $2,000,000 of performance payments are made. The agreement includes a five year employment agreement with a base salary and other benefits specified.

 

Management is in the process of gathering information to apply purchase accounting to the SEMCO acquisition. The operations from SEMCO will be included in the operating results of the Company starting January 1, 2006.

 

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On April 4, 2006, the Company increased authorized shares of common stock to 13,500,000,000 shares. Also, on that date the authorized shares of preferred stock increased to 6,000,000,000 shares.

 

On January 3, 2006, Jim Turek, Sr., the Company’s president and majority shareholder, forgave approximately $5,5400,000 of obligations consisting of notes payable, accrued interest, and accrued salaries and bonuses of which was all reflected as of December 31, 2005.

 

On January 3, 2006, James N. Turek, Jr., the son of the Company’s president forgave certain liabilities, which included compensation and interest owed to him, of approximately $334,034.07 which was all reflected as of December 31, 2005. On January 3, 2006, James Bonn the Company’s secretary forgave certain liabilities which included interest owned to him, of which $334,034.07 was reflected during the year ended December 31, 2005.

 

Item 7. Financial Statements and Supplementary Data

 

The Audited Financial Statements required by this Item is attached hereto at the end of this report on page F-1 through F-21 and is hereby incorporated by reference.

 

ITEM 8. Changes with and Disagreements with Accountants on Accounting and Financial

 

Disclosure

 

 

None.

 

ITEM 8A. Controls and Procedures

 

Quarterly Evaluation of Controls. As of the end of the period covered by this annual report on Form 10-KSB, we evaluated the effectiveness of the design and operation of (i) our disclosure controls and procedures ("Disclosure Controls"), and (ii) our internal control over financial reporting ("Internal Controls"). This evaluation ("Evaluation") was performed by our President, CFO and Chief Executive Officer, James Turek, Sr. In this section, we present the conclusions of our CEO and CFO based on and as of the date of the Evaluation, (i) with respect to the effectiveness of our Disclosure Controls, and (ii) with respect to any change in our Internal Controls that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect our Internal Controls.

 

CEO and CFO Certifications. Attached to this annual report, as Exhibits 31.1 and 32.1, are certain certifications of the CEO and CFO, which are required in accordance with the Exchange Act and the Commission's rules implementing such section (the Rule 13a_14(a)/15d.,14(a) Certifications). This section of the annual report contains the information concerning the Evaluation referred to in the Rule 13a_14(a)/15d,14(a) Certifications. This information should be read in conjunction with the Rule 13a_14(a)/15d.,14(a) Certifications for a more complete understanding of the topic presented.

 

Disclosure Controls and Internal Controls. Disclosure Controls are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed with the Commission under the Exchange

 

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Act, such as this annual report, is recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that material information relating to us is made known to the CEO and the CFO by others, particularly during the period in which the applicable report is being prepared. Internal Controls, on the other hand, are procedures which are designed with the objective of providing reasonable assurance that (i) our transactions are properly authorized, (ii) the Company's assets are safeguarded against unauthorized or improper use, and (iii) our transactions are properly recorded and reported, all to permit the preparation of complete and accurate financial statements in conformity with accounting principals generally accepted in the United States.

 

Limitations on the Effectiveness of Controls. Our management does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances so of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any

design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

 

Scope of the Evaluation. The CEO and CFO's evaluation of our Disclosure Controls and Internal Controls included a review of the controls' (i) objectives, (ii) design, (iii) implementation, and (iv) the effect of the controls on the information generated for use in this annual report. In the course of the Evaluation, the CEO and CFO sought to identify data errors, control problems, acts of fraud, and they sought to confirm that appropriate corrective action, including process improvements, was being undertaken. This type of evaluation is done on a quarterly basis so that the conclusions concerning the effectiveness of our controls can be reported in our quarterly reports on Form10-QSB and annual reports on Form 10-KSB. The overall goals of these various evaluation activities are to monitor our Disclosure Controls and our Internal Controls, and to make modifications if and as necessary. Our external auditors also review Internal Controls in connection with their audit and review activities. Our intent in this regard is that the Disclosure Controls and the Internal Controls will be maintained as dynamic systems that change (including improvements and corrections) as conditions warrant.

 

Among other matters, we sought in our Evaluation to determine whether there were any significant deficiencies or material weaknesses in our Internal Controls, which are reasonably likely to adversely affect our ability to record, process, summarize and report financial information, or whether we had identified any acts of fraud,

 

 

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whether or not material, involving management or other employees who have a significant role in our Internal Controls. This information was important for both the Evaluation, generally, and because the Rule 13a-14(a)/15d.14(a) Certifications, Item 5, require that the CEO and CFO disclose that information to our Board (audit committee), and to our independent auditors, and to report on related matters in this section of the annual report. In professional auditing literature, "significant deficiencies" are referred to as "reportable conditions". These are control issues that could have significant adverse affect on the ability to record, process, summarize and report financial data in the financial statements. A "material weakness" is defined in auditing literature as a particularly serious reportable condition where the internal control does not reduce, to a relatively low level, the risk that misstatement caused by error or fraud may occur in amounts that would be material in relation to the financial statements and not be detected within a timely period by employees in the normal course of performing their assigned functions.

 

We also sought to deal with other controls matters in the evaluation, and in each case, if a problem were identified, we considered what revisions, improvements and/or corrections to make in accordance with our ongoing procedures.

 

Conclusions. Based upon the Evaluation, our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives. Our CEO and CFO have concluded that our disclosure controls and procedures are effective at that reasonable assurance level to ensure that material information relating to the Company is made known to management, including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our Internal Controls are effective at that assurance level to provide reasonable

assurance that our financial statements are fairly presented inconformity with accounting principals generally accepted in the United States. Additionally, there has been no change in our Internal Controls that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to affect, our Internal Controls.

 

PART III

ITEM 9. Directors and Executive Officers of the Registrant

 

(a)

Identification of Directors

 

The following information, as of December 31, 2005, is furnished with respect to each Director and Executive Officer:

 

 

Dates of

Dir./Consultants       Age Service Position with Company

James N. Turek, Sr.

61

2005

President, Chief Executive Officer

 

The following is a summary of the business experience and other biographical information with respect to each of our officers and directors listed in the above-referenced table.

 

 

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James N. Turek, Sr., President and CEO:

 

Mr. James Turek (Jim), Sr. founded Plasticon International, Inc. (formerly Wicklund Holding

Company), approximately ten years ago and served as President and Chief Executive Officer

since inception. Jim has degrees in Public Relations and Advertising. Mr. Turek had 5 years experience with McDonnell Douglas as a cost Analyst working for the Comptroller with responsibility for Convention Marketing, film and print media including DC-10, Phantom, P15 Eagle, Holography, Voice Synthesizing, latent finger prints, Aerospace as well as, at that time, the largest computer installation in the world with responsibility for Medical Diagram, grading and bus scheduling to name a few. Jim also has worked in the hospitality industry representing corporations and association marketing for more than 10 years.

 

Key Personnel:

 

James Bonn, Director of Accounting and Administration

 

Mr. Bonn is the CPA and Attorney. James has 15 years experience working with the Company in the area of contract administration, finance, accounting, audits and legal matters with a distinguished career in accounting and law practice over the last 40 years.

Code of Ethics

 

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Such code of ethics will be provided to any person without charge, upon request, a copy of such code of ethics by sending such request to us at our principal office.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Under Section 16(a) of the Exchange Act, all executive officers, directors, and each person who is the beneficial owner of more than 10% of the common stock of a Company that files reports pursuant to Section 12 of the Exchange Act, are required to report the ownership of such common stock, options, and stock appreciation rights (other than certain cash-only rights) and any changes in that ownership with the Commission. Specific due dates for these reports have been established, and the Company is required to report, in this Form 10-KSB, any failure to comply therewith during the fiscal year ended December 2005. The Company believes that all of these filing requirements were satisfied by its executive officers, directors and by the beneficial owners of more than 10% of the Company’s common stock. In making this statement, the Company has relied solely on copies of any reporting forms received by it, and upon any written representations received from reporting persons that no Form 5 (Annual Statement of Changes in Beneficial Ownership) was required to be filed under applicable rules of the Commission.

 

Audit Committee Financial Expert

 

The Company does not have a separately designated standing audit committee. Pursuant to Section 3(a)(58)(B) of the Exchange Act, the entire Board of Directors acts as an audit committee for the purpose of overseeing the accounting and financial reporting processes, and our audits of the financial statements. The Commission

 

 

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recently adopted new regulations relating to audit committee composition and functions, including disclosure requirements relating to the presence of an "audit committee financial expert" serving on its audit committee. In connection with these new requirements, our Board of Directors examined the Commission's definition of "audit committee financial expert" and concluded that we do not currently have a person that qualifies as such an expert. Presently, there is only one (1) director serving on our Board, and we are not in a position at this time to attract, retain and compensate additional directors in order to acquire a director who qualifies as an "audit committee financial expert", but we intend to retain an additional director who will qualify as such an expert, as soon as reasonably practicable.

 

While neither of our current directors meets the qualifications of an "audit committee financial expert", each of our directors, by virtue of his past employment experience, has considerable knowledge of financial statements, finance, and accounting, and has significant employment experience involving financial oversight responsibilities. Accordingly, we believe that our current directors capably fulfill the duties and responsibilities of an audit committee in the absence of such an expert.

 

ITEM 10. Executive Compensation

 

Summary Compensation Table

 

The following table and the accompanying notes provide summary information for each of the last three fiscal years concerning cash and non-cash compensation paid or accrued by James Turek, Sr., our President and Chief Executive Officer for the past three years.

 

SUMMARY COMPENSATION TABLE

 

 

Annual Compensation

 

 

 

 

Awards

Payouts

 

Name and Principal Position

 

 

Year

 

 

Salary

($)

 

 

Bonus

($)

 

Other Annual Compensation

($)

Restricted Stock Award(s)

($)

Securities Underlying Options

SARs(#)

 

LTIP payouts

($)

 

All Other Compensation

($)

James Turek, Sr.

Chief Executive Officer

 

 

2005

2004

2003

 

 

 

 

 

633,000*

350,000

325,000

 

 

 

350,000

250,000

 

 

 

 

-

-

-

 

 

 

 

-

-

-

 

 

 

-

-

-

 

 

 

-

-

-

 

 

 

* Said salary has been deferred.

 

We have not entered into any other employment agreements with our employees, Officers or Directors. We have no standard arrangements under which we will compensate our directors for their services provided to us.

 

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ITEM 11. Security Ownership of Certain Beneficial Owners and Management

 

The following tables set forth the ownership, as of December 31, 2005, of our common stock (a) by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, and (b) by each of our directors, by all executive officers and our directors as a group. To the best of our knowledge, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted.

 

All persons known by the Company to own beneficially more than 5% of any class of the Company's outstanding stock on December 31, 2005, are listed below:

 

Title of Class

Name and Address

# Shares

Nature of Ownership

Current % Owned (w)

Common Stock, $.001 Par Value

James N. Turek, Sr.

3166 Custer Dr. Lex., KY

1,884,863,259

 

 

 

Direct

50.56%

Common Stock, $.001 Par Value

All Officers and Directors as a Group

1,884,863,259

 

50.56%

 

Security Ownership of Certain Beneficial Owners (1)(2).

 

(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as amended, beneficial ownership of a security consists of sole or shared voting power (including the power to vote or direct the voting) and/or sole or shared investment power (including the power to dispose or direct the disposition) with respect to a security whether through a contract, arrangement, understanding, relationship or otherwise. Unless otherwise indicated, each person indicated above has sole power to vote, or dispose or direct the disposition of all shares beneficially owned. We are unaware of any shareholders whose voting rights would be affected by community property laws.

 

(2) This table is based upon information obtained from the Company's stock records. Unless otherwise indicated in the footnotes to the above tables and subject to community property laws where applicable, the Company believes that each shareholder named in the above table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned.

 

ITEM 12. Certain Relationships and Related Transactions

During the years ended 1989 through 2001, James Turek, Sr., the Company’s president advanced funds to the company in the amount of $2,139,122. The promissory notes provided by the Company to James Turek, Sr. included an interest rate of ten percent (10%) per annum. Additionally the holder of the promissory note has the right to convert the notes into the Company’s common stock at the Company’s stated par value as well as to receive for every three shares converted from this note, a fourth to be issued by the Company for consideration of the note. During the year ended 2004 the Company’s president elected to convert several notes with a stated value of $1,708,130. In consideration of the conversion the Company’s president received

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758,833,001 shares of the Company’s common stock. As of December 31, 2005 and 2004 the aggregate amounts owed to the Company’s president was $924,841 and $430,992, respectively.

During the years ended 2001 through 2002, James Turek II, the company’s operation executive and the son of the Company’s president, advanced funds to the company in the amount of $130,000. The promissory notes provided by the Company to the operation executive included an interest rate of ten percent (10%) per annum. Additionally the holder of the promissory note has the right to convert the notes into the Company’s common stock at

the Company’s stated par value as well as to receive for every three shares converted from this note, a fourth to be issued by the Company for consideration of the note. There was no beneficial conversion interest as a result of this transaction. As of December 31, 2004 and 2003, the balances owed to the Company’s operation executive was $130,000, respectively.

During the years ended 2000 through 2003, James Bonn, the Company’s secretary, advanced funds to the Company in the amount of $120,000. During the year ended 2004 the Company’s secretary advanced additional fund to the Company in the amount of $50,000. The promissory notes provided by the Company to the executive during these years included an interest rate of ten percent (10%) per annum. Additionally, the holder of the promissory note has the right to convert the notes into the Company’s common stock at the Company’s stated par value as well as to receive for every three shares converted from this note, a fourth to be issued by the Company for consideration of the note. As of December 31, 2005 and 2004 the balances owed to the Company’s secretary was $120,000.

All the above notes payable are currently due at year ended December 31, 2005.

During the normal course of business, Lexreal LLC (“Lexreal”), a Kentucky limited liability company, paid for goods and service for the benefit of the Company for the years ended December 31, 2005 and 2004 in the amount of $0 and $62,408, respectively. Lexreal is owned by James N. Turek Sr., the Company’s president and majority shareholder. The Company has reflected an amount due to Lexreal LLC for the years ended December 31, 2005 and 2004 in the amount of $0 and $62,408, respectively. During 2005, the Company raised proceeds for the acquisitions and other operating needs through commitments to issue 199,464,884 free trading shares of Company stock. The proceeds received came to Lexreal so the Company recorded a due from related party of $2,645,788 during the quarter ended March 2005. Lexreal made operating and financing payments on behalf of the Company of approximately $4,100,000 during which went to reduce the due from related party amount. The financing has been converted to preferred stock commitment as of December 31, 2005. The shares will be issued in 2006. Additionally, Lexreal provided the shares of Company stock to the investors. In return, Lexreal has received a preferred stock commitment.

During the normal course of business, Promotional Containers, Inc., a Nevada corporation, paid for goods and services for the benefit of the Company for the years ended December 31, 2005 and 2004 in the amount of $501,642 and $20,222, respectively. Promotional Containers, Inc. is owned by James N. Turek, Sr., the Company’s president and majority shareholder. During the six months ended June 30, 2005 Promotional Containers, Inc. forgave balances owed by the Company in the amount of $20,222. The Company has

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reflected an amount due to Promotional Containers, Inc. for the years ended December 31, 2005 and 2004 in the amount of $501,642 and $20,222, respectively. The Company has reflected an amount due from PCI of 65,565 as of December 31, 2005.

During the normal course of business; Telco Blue, a Nevada corporation advanced funds to the Company for the years ended December 31, 2005 and 2004 in the amount of $0 and $140,507, respectively. Telco Blue is owned by James N. Turek, Sr., the Company’s president and majority shareholder. The Company has reflected an amount due to Telco Blue for the years ended December 31, 2005 and 2004 in the amount of $0 and $140,507. During 2005, the Company forgave this debt.

In January 2005, the Company obtained certain assets (molds, sales contract, customer base, and patents) from a related party, Promotional Container, Inc. (PCI). PCI is owned by James N. Turek, Sr., the Company's president and majority shareholder. Consideration to PCI consisted of a promise to exchange 100,000,000 shares of preferred stock (recorded as $360,000 of preferred stock subscribed in the accompanying balance sheet) in the Company by May 2007 and a promise to pay $500,000 (non interest bearing) by May 2006. Due to common control, paid in capital was reduced by $860,000 to record the transaction. As of December 31, 2005, the company owed a balance of $500,000 to Promotional Containers, Inc. as a result of the acquisition.

 

ITEM 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

 

 

(a)

Financial Statements

32.1 The following financial statements of Plasticon International, Inc. & Subsidiaries are included in Part II, Item 7:

 

 

Page

 

Independent Auditors’ Report...........................................

F – 1

Balance Sheet- - years ended

 

December 31, 2005 and 2004.................................

F – 2&3

 

Statements of Operations – years ended

 

December 31, 2005 and 2004..................................

F – 4

Statements of Stockholders’ Equity – years ended

 

December 31, 2005 and 2004...................................

F – 5

Statements of Cash Flows – years ended

 

December 31, 2005 and 2004...................................

F – 6&7

Notes to Financial Statements..........................................

F – 8

 

 

 

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2. Exhibits

14.1 Code of Ethics

31.1. Rule13a-14(a)/15d-14(a) Certifications of Chief Executive Officer

31.2. Rule13a-14(a)/15d-14(a) Certifications of Chief Financial Officer

32.1. Section 1350 Certifications of Chief Executive Officer

32.2. Section 1350 Certifications of Chief Financial Officer

 

 

(b)

Reports on Form 8-K

 

None.

 

 

ITEM 14.

Principal Accountant Fees and Services

 

Fees Billed For Audit and Non-Audit Services

 

The following table represents the aggregate fees billed for professional audit services rendered to the independent auditor, Mendoza Berger & Company, LLP (“Mendoza”), for our audit of the annual financial statements for the years ended December 31, 2005 and December 31, 2004. Audit fees and other fees of auditors are listed as follows:

 

 

Years Ended December 31

2005

 

2004

 

Audit Fees (1)

189,662.30

 

$

 

Audit-Related Fees (2)

--

 

--

 

Tax Fees (3)

--

 

--

 

All Other Fees (4)

--

 

--

 

Total Accounting Fees and Services

189,662.30

 

$

 

 

 

 

 

 

 

 

(1)

Audit Fees. These are fees for professional services for our audit of the annual financial statements, and for the review of the financial statements included in our filings on Form 10-QSB, and for services that are normally provided in connection with statutory and regulatory filings or engagements.

   

 

(2)

Audit-Related Fees. These are fees for the assurance and related services reasonably related to the performance of the audit or the review of our financial statements.

   

 

(3)

Tax Fees. These are fees for professional services with respect to tax compliance, tax advice, and tax planning.

   

 

(4)

All Other Fees. These are fees for permissible work that does not fall within any of the other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax Fees.

 

 

--Signature Page Follows—

 

-27-

 

 


 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the small business issuer has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

PLASTICON INTERNATIONAL, INC.

 

(Registrant)

 

 

Date: August , 2006

 

 

/s/ James N. Turek, Sr.

James N. Turek, Sr.,

President, CEO and Director

 

 

 

 

 

 

 

 

-28-

 

 

 


 

 

 

 

 

 

 

PLASTICON INTERNATIONAL, INC.

AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2005 AND 2004

 

 


 

 

TABLE OF CONTENTS

 

 

 

Report of Independent Registered Public Accounting Firm

1

 

Consolidated Balance Sheets

2

 

Consolidated Statements of Operations

4

 

Consolidated Statement of Stockholders’ Deficit

5

 

Consolidated Statement of Cash Flows

6

 

Notes to Consolidated Financial Statements

8

 

 

 

 

 

 

 

 

 


 

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Stockholders

Plasticon International, Inc. and Subsidiary

 

We have audited the accompanying consolidated balance sheets of Plasticon International, Inc. and its subsidiary (Formerly Wicklund Holding), as of December 31, 2005 and 2004, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Plasticon International, Inc. and its subsidiary as of December 31, 2005 and 2004, and the results of its consolidated operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

Mendoza Berger & Company, LLP

 

 

Irvine, California

August 18, 2006, except for footnote 13 which is dated September 1, 2006

 

 

 

 

 

F-1

 


 

 

PLASTICON INTERNATIONAL, INC. AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2005 AND 2004

 

ASSETS

 

 

2005

 

2004

Current assets:

 

 

 

 

 

 

 

 

 

Cash

 

$150

 

$-

Accounts receivable, net

 

300,281

 

-

Raw material inventories

 

295,387

 

-

Finished goods inventories

 

279,420

 

-

Due from related parties

 

170,809

 

140,506

Prepaid Deposit Equipment

 

362,000

 

-

Other current assets

 

89,024

 

-

 

 

 

 

 

Total current assets

 

1,497,071

 

140,506

 

 

 

 

 

Fixed assets, net

 

1,706,543

 

519,043

 

 

 

 

 

Other assets:

 

 

 

 

Goodwill

 

3,089,624

 

-

 

 

 

 

 

Total assets

 

$6,293,238

 

$659,549

 

 

 

 

 

 

 

 

 

 

 

F-2

 

 

 

The accompanying notes are an integral part of these financial statements

2

 


 

 

PLASTICON INTERNATIONAL, INC. AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2005 AND 2004

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

2005

 

2004

 

 

 

 

 

Current liabilities:

 

 

 

 

Bank overdraft

 

$313,264

 

$-

Accounts payable

 

528,673

 

149,158

Accrued payroll and bonuses due to related parties

 

4,165,148

 

3,031,284

Accrued Interest

 

2,105,671

 

2,126,027

Accrued Pro Mold purchase price

 

1,283,942

 

-

Notes payable, current portion

 

983,108

 

4,545,410

Notes payable, related parties

 

1,724,841

 

730,992

Lines of credit

 

342,413

 

-

Due to related parties

 

501,643

 

82,630

Other current liabilities

 

409,185

 

-

 

 

 

 

 

Total current liabilities

 

12,357,888

 

10,665,501

 

 

 

 

 

Notes payable, net of current portion

 

775,526

 

-

 

 

 

 

 

Total liabilities

 

13,133,414

 

10,665,501

 

 

3,727,740

 

1,440,486

Stockholders’ deficit:

Common stock; $0.001 par value; 5,000,000,000 shares authorized, 3,727,740,100 shares issued and outstanding as of December 31, 2005 and 1,440,486,371 shares issued and outstanding as of December 31, 2004

Preferred Shares; $1 par value; 100,000,000 shares authorized, 0 shares issued and outstanding as of December 2005 and 2004

 

-

 

-

Common stock subscribed- not issued

 

4,160,539

 

-

Preferred stock subscribed - not issued

 

360,000

 

-

Additional paid-in capital

 

103,446,627

 

75,428,740

Accumulated deficit

 

(118,535,082)

 

(86,875,178)

 

 

(6,840,176)

 

(10,005,952)

Total stockholders' deficit

Total liabilities and stockholders' deficit

 

$6,293,238

 

$659,549

 

 

 

 

F-3

 

 

 

The accompanying notes are an integral part of these financial statements

3

 


 

 

PLASTICON INTERNATIONAL, INC. AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

 

2005

 

2004

 

 

 

 

 

Revenue

 

$65,565

 

$ -

Cost of goods sold

 

94,227

 

-

Gross loss

 

(28,662)

 

-

Operating expenses:

 

 

 

 

Selling, general and administrative

 

31,958,888

 

73,448,109

Total operating expenses

 

31,958,888

 

73,448,109

Loss from operations

 

(31,987,550)

 

(73,448,109)

 

 

 

 

 

Other income (expense):

 

Interest expense

 

(73,099)

 

(200,446)

Forgiveness of debt

 

400,745

 

-

Total other income (expense)

 

327,646

 

(73,648,555)

Net loss

 

($31,659,904)

 

($73,648,555)

 

 

($0.01)

 

($0.05)

Basic and diluted loss per common share

 

 

 

2,164,757,608

 

1,440,486,371

Basic and diluted weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

F-4

 

 

The accompanying notes are an integral part of these financial statements

4

 


 

 

PLASTICON INTERNATIONAL, INC. AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

STATEMENT OF STOCKHOLDER’S DEFICIT

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

Common Stock

Common Stock

Preferred Stock

 

 

Total

 

Shares

Amount

Subscribed,

Not Issued

Subscribed,

Not Issued

Additional Paid-in-Capital

Accumulated Deficit

Stockholders' Deficit

Balance, December 31, 2003

37,856,600

    $ 37,857

     $ 64,132

          $ -

$ 1,551,202

$ (13,226,623)

$ (11,573,432)

Shares issued for previous subscribed shares

16,706,976

16,707

(16,707)

-

-

-

-

Shares issued for previous subscribed shares to related party

47,425,712

47,425

(47,425)

-

-

-

-

Shares issued for conversion of notes payable from related party

758,833,001

758,833

-

-

949,297

-

1,708,130

Shares issued for conversion of notes payable

12,000,000

12,000

-

-

1,017,277

-

1,029,277

Shares issued for services

567,664,082

567,664

-

-

71,910,964

-

72,478,628

Net loss for 2004

-

-

-

-

-                       -

(73,648,555)

(73,648,555)

Balance, December 31, 2004

1,440,486,371

1,440,486

-

-

75,428,740

(86,875,178)

(10,005,952)

Shareholder contribution to reduce notes payable

-

-

-

-

3,010,410

-

3,010,410

Related party forgiveness of debt

-

-

-

-

82,630

-

82,630

Related party contribution to remove trade payable

-

-

-

-

482,583

-

482,583

PCI asset acquisition

-

-

-

360,000

(860,000)

-

(500,000)

Conversion of related party debt to subscribed common stock

-

-

4,035,539

-

-

-

4,035,539

Conversion of related party debt to subscribed preferred stock

-

-

-

-

 

(218,357)

-

(218,357)

Pro Mold purchase

 

 

125,000

 

 

 

125,000

Issuance of common stock for:

 

 

 

 

 

 

 

Compensation

1,839,210,629

1,839,211

-

-

19,300,573

-

21,139,784

Conversion of note and interest payable to related party

438,043,100

438,043

 

 

6,088,799

 

6,526,842

Services

10,000,000

10,000

 

 

131,250

 

141,250

Net loss

-

-

-

-

-

(31,659,904)

(31,659,904)

Balance, December 31, 2005

3,727,740,100

$ 3,727,740

$ 4,160,539

$ 360,000

$ 103,446,627

$ (118,535,082))

$ (6,840,176)

 

 

F-5

 

 

 

The accompanying notes are an integral part of these financial statements

5

 


 

 

PLASTICON INTERNATIONAL, INC. AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

Cash flows from operating activities:

Net loss

 

$(31,659,904)

 

$(73,648,555)

Depreciation

 

53,057

 

57,176

Forgiveness of debt

 

3,575,623

 

-

Issuance of common stock for services and other

expenses

 

21,281,034

 

72,478,628

Increase (decrease) in assets:

 

 

 

 

Accounts receivable

Inventory

Deposit on equipment

Other assets

Due from related party

 

(300,281)

(574,807)

(362,000)

(89,024)

(30,303)

 

-

-

-

-

-

Increase (decrease) in liabilities:

 

 

 

 

Bank overdraft

Increase in accounts payable, accrued liabilities and other liabilities

Advances from related parties

Due to related party

 

164,107

 

8,844

501,643

-

 

-

 

1,028,878

-

(7,877)

Net cash used by operating activities

 

(7,432,011)

 

(91,750)

Cash flows from financing activities:

 

 

 

 

Increase in notes payable

Purchase of goodwill

Conversion of notes payable from related

parties

Common stock subscriptions

Preferred stock subscriptions

Discount liabilities for future issued shares

 

1,793,319

(3,089,624)

 

6,526,842

4,160,539

360,000

(218,357)

 

91,750

-

 

-

-

-

-

Net cash provided by financing activities

 

9,532,719

 

91,750

Cash flows from investing activities:

 

 

 

 

Purchase of Pro Mold

Purchase of PCI

 

(1,240,558)

(860,000)

 

-

-

Net cash used by investing activities

 

(2,100,558)

 

-

Net change in cash

 

150

 

-

Cash, beginning of period

 

-

 

-

Cash, end of period

 

$150

 

$ -

 

 

 

 

F-6

 

 

 

The accompanying notes are an integral part of these financial statements

6

 


 

 

PLASTICON INTERNATIONAL, INC. AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

Supplemental disclosure of cash flow info:

 

 

 

 

Conversion of notes payable from related parties

 

$6,526,842

 

$1,708,130

Conversion of notes payable for common stock

 

$ -

 

$1,029,277

Shares issued from previous subscribed stock

 

$ -

 

$64,132

Common stock subscriptions

 

$4,160,539

 

$ -

Preferred stock subscriptions

 

$360,000

 

$ -

Issuance of common stock for service

 

$141,250

 

$ -

Issuance of common stock for compensation

 

$21,139,784

 

$ -

Discount liabilities for future issued shares

 

($218,357)

 

$ -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

F-7

 

 

The accompanying notes are an integral part of these financial statements

7

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

1.

Business, Basis of Presentation

 

Nature of Business

Plasticon International, Inc. (formerly Wicklund Holdings, “the Company” or “Plasticon”), a Wyoming Corporation, designs, produces and distributes high-quality concrete accessories, transportation signage, plastic lumber and office supplies which are all produced from recycled and recyclable plastics. Plasticon is a leader, an innovator of cutting edge design, engineering and production of industrial and commercial products. Plasticon is a green company, environmentally friendly, using recycled plastics to produce its line of products.

In December 2005, the Company acquired all the stock of Pro Mold, Inc. (Pro Mold), an injection molding facility in the Midwest (see Note 3).

 

Name Change and State of Incorporation

The Company, a corporation originally organized under the laws in state of Delaware on May 23, 1997, became a domestic corporation in the state of Wyoming on January 22, 2004. The Company formally changed its corporate name form Wicklund Holding to Plasticon International, Inc. on September 8, 2004.

2. Summary of Significant Accounting Policies

 

Method of Accounting

It is the Company’s policy to prepare its financial statements following generally accepted accounting principles of the United States of America, consistently applied.

 

Concentration of Credit Risk

The Company’s credit risk primarily consists of accounts that are due from related parties. Its uncollectible accounts are expensed currently using the direct write-off method. Bad debt expense was $0 for the years ended December 31, 2005 and 2004.

 

Revenue Recognition

The Company recognizes revenue when pervasive evidence of an arrangement exists, services have been rendered or products have been shipped; the price to the buyer is fixed and determinable; and, collectibility is reasonably assured.

 

Fair Value of Financial Instruments

Financial instruments consist principally of cash and various current liabilities. The estimated fair value of these instruments approximates their carrying value.

F-8

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

2. Summary of Significant Accounting Policies, continued

 

Principles of Consolidation

The financial position of Pro Mold as of December 31, 2005 (see Note 3) has been included in the consolidated financial statements. All intercompany accounts and transactions have been eliminated. The operations of Pro Mold will be consolidated starting January 1, 2006.

Income Taxes

The Company has implemented the provisions on Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires that income tax accounts be computed using the liability method. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities given the provisions of currently enacted tax laws.

 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ from those estimates.

 

Property and Equipment

 

Property and Equipment are valued at cost. Depreciation and amortization are provided over the estimated useful lives up to twenty years using the straight line method. The estimated service lives of property and equipment are as follows:

 

 

Manufacturing equipment

20 years

 

Tools and Molds

20 years

 

Office furniture and equipment

10 years

 

Net Loss Per Share

 

The Company has adopted Statement of Financial Accounting Standards No. 128, “Earnings Per Share” (“SFAS 128”), specifying the computation, presentation and disclosure of earnings per share information. Basic earnings per share have been calculated based upon the weighted average number of shares outstanding.

 

 

F-9

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

2. Summary of Significant Accounting Policies, continued

 

Stock Based Compensation

 

On December 16, 2004, FASB published Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”). SFAS 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans.

 

Advertising

 

The Company follows the policy of charging the cost of advertising to expenses incurred. The Company has not incurred any advertising costs during the year ended December 30, 2005 or 2004.

 

New Accounting Pronouncements  

 

On December 16, 2004, FASB published Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment (“SFAS 123R”). SFAS 123R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. The provisions of SFAS 123R are effective as of the first interim period that begins after June 15, 2005. Accordingly, the Company will implement the revised standard in the fourth quarter of fiscal year 2005. Currently, the Company accounts for its share-based payment transactions under the provisions of APB 25, which does not necessarily require the recognition of compensation cost in the financial statements. Management is assessing the implications of this revised standard, which may materially impact the Company’s results of operations in future periods.

 

In March 2005, the FASB issued Interpretation 47 (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations”—an interpretation of FASB No. 143. FIN 47 clarifies that the term “conditional asset retirement obligation” as used in SFAS No. 143 refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. FIN 47 requires a liability to be recognized for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 was effective for fiscal years ending after December 15, 2005. The Company does not expect that the adoption of FIN 47 will have a material effect on the financial condition or results of operations.

 

 

F-10

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

2. Summary of Significant Accounting Policies, continued

 

In May 2005 the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.” SFAS No. 154 established new standards on accounting for changes in accounting principles. SFAS No. 154 requires all such changes to be accounted for by retrospective application to the financial statements of prior periods unless it is impracticable to do so. SFAS No. 154 is effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005. Adoption of SFAS No. 154 is not expected to have a material impact on the Company’s consolidated financial position, results of operations or cash flows.

 

3. Pro Mold Acquisition

 

The December 2005 acquisition of Pro Mold was accounted for as a purchase business combination under the provisions of the FASB’s SFAS No. 141, Business Combinations. The aggregate purchase price of $3,866,852 (including $366,852 of professional fees) was allocated to the assets acquired and liabilities assumed based on the respective fair values. The Company with the help of an independent appraiser has assessed the fair value of the property and equipment. The Pro Mold accounts receivable, inventory, accounts payable and accrued expenses and other assets and long term liabilities were estimates of management. Management is still in the process of finalizing the allocation of the purchase price, including the consideration of other intangible values. The Company will include Pro Mold in its operating results starting January 1, 2006.

 

The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of acquisition.

 

 

 

 

December 31, 2005

 

Cash

 

$149

Accounts receivable

 

405,525

Inventory

 

574,807

Other current assets

 

89,023

Property and equipment

 

1,240,558

Goodwill

 

3,089,624

Bank overdraft

 

(313,264)

Accounts payable

 

(330,914)

Debt

 

(726,048)

Other liabilities

 

(162,608)

 

Net assets acquired

 

$3,866,852

 

 

 

 

F-11

 

 

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

 

 

 

3. Pro Mold Acquisition (continued)

Funded by:

 

Related party funding in 2005 and 2006(See Note 7)

 

2,866,852

Long-term debt (See Note 6)

 

875,000

Common stock committed

 

125,000

Total

 

$3,866,852

 

As of December 31, 2005, the Company owes approximately $2,000,000 of the purchase price. The Company received related party financing in first quarter 2006 to make the remaining purchase payments. The related party financing has been converted to a preferred stock commitment

 

The unaudited pro forma information shown below assumes that the Pro Mold acquisition occurred as of January 1, 2005 and January 1, 2004. This pro forma financial statement information is presented for informational purposes only and is not necessarily indicative of the results of future operations that would have been achieved had the assets been acquired and liabilities been assumed at the beginning of 2004.

 

 

 

2005

 

2004

(unaudited)

(unaudited)

Revenue

 

$3,683,046

 

$3,015,381

Gross loss from operations

 

(4450190)

 

(1843824)

Net loss

 

(31713742)

 

(73693442)

Basic and diluted loss per share

 

($0.01)

 

($0.05)

 

4.

Property and Equipment

Major classes of property and equipment at December 31consist of the following:

 

 

2005

 

2004

Equipment and molds

 

$2,301,700

 

$1,061,142

Office furniture and equipment

 

54,923

 

54,923

 

 

2,356,623

 

1,116,065

Less accumulated depreciation

 

(650,080)

 

(597,022)

Net property and equipment

 

$1,706,543

 

$519,043

 

F-12

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

4. Property and Equipment (continued).

Depreciation expense totaled $53,058 and $57,176 for the periods ended December 31, 2005 and 2004, respectively.

 

5. Line of Credit

 

On April 30, 2005 the Company entered into an agreement for a revolving line of credit worth $400,000, with an interest rate of 7%with Unions Planters Bank to be used primarily for working capital. As of December 31, 2005 the balance due was $342,413.

 

6.

Notes Payable

 

Notes payable consist of the following as of December 31:

 

 

2005

 

2004

Note payable to First National Bank of Barnesville, Barnesville, Georgia

 

$500,000

 

$2,095,410

Notes payable to Dennis Joslin Company LLC, Dyersburg, Tennessee, personally guaranteed by majority shareholder

 

-

 

325,000

Note payable to Export Finance Network, Coral Gables, FL., personally guaranteed by majority shareholder

 

-

 

1,500,000

Note payable to Laser Engineering, Fort Lauderdale, FL., personally guaranteed by majority shareholder

 

-

 

625,000

Note payable to John P. Murphy (seller of Pro Mold, see Note 3), payable over a five year period in equal installments of $175,000 and shall bear interest at the rate of 7% per annum

 

700,000

 

-

Other notes payable, non-interest bearing notes due in 2006

 

558,634

 

-

Total notes payable

 

1,758,634

 

4,545,410

Less current portion

 

(983,108)

 

(4,545,410)

Long-term portion of notes payable

 

$775,526

 

$ -

 

 

 

 

 

F-13

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

6.

Notes Payable (continued)

 

Future obligations of long term debt are as follows:

For the Year Ended December 31

 

 

2006

 

$2,707,949

2007

 

250,526

2008

 

175,000

2009

 

175,000

2010

 

175,000

 

 

 

Total

 

$3,483,475

During 2000 the Company entered into a banking arrangement with the Bank of Barnsville. On September 10, 2004 the Company provided 8,000,000 shares of the its common stock to the Bank of Barnsville for use as a partial payment of the Company’s debt to the Bank of Barnsville. For the years ended 2005 and 2004 the Company owed a balance of $500,000 and $2,095,410, respectively to the Bank of Barnsville. The Company is currently in the process of settling the debt with the Bank of Barnesville. James N. Turek Sr. the Company’s president transferred 7,000,000 shares of his personally held Plasticon International, Inc. stock to the Bank of Barnesville in order to reduce the debt to $500,000 in 2005.

 

On September 30, 2004 the Company entered into a settlement agreement with Emerald Coast Bank / Dennis Joslin LLC for debt owed by the Company to Emerald Coast Bank / Dennis Joslin LLC in the amount of $1,319,075. In connection with the settlement agreement Emerald Coast Bank / Dennis Joslin LLC accepted to receive $275,000 in which six equal installments payments in the amount of $25,000 would be paid from the date of the agreement. Additionally, the Company provided Emerald Coast Bank / Dennis Joslin LLC 2,000,000 shares of its common stock. The common stock was originally issued to the Company’s president who in turn provided the stock to Emerald Coast Bank / Dennis Joslin LLC. The terms of the settlement agreement also specified a penalty of 100% of the amount due under the payment plan should the amount not be paid timely by the Company. As of December 31, 2004 the Company incurred a penalty of $50,000 as a result of not paying the installments in accordance to the payment plan. As of December 31, 2005 and 2004 the Company reflected a liability to Emerald Coast Bank / Dennis Joslin LLC in the amount of $0 and $325,000, respectively.

 

The Company restructured its debt with Dennis Joslin Company LLC during the quarter ended June 30, 2005. As a result of this settlement, the Company recognized income from forgiveness of debt in the amount of $65,303 during the quarter ended June 30, 2005. During 2005, the Company’s president paid off the loan.

 

F-14

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

6.

Notes Payable (continued)

On December 10, 2004 the company entered into discussions with Export Finance Network with intensions to negotiate and settle amounts due to Export Finance. As a part of the negotiations the company provided Export Finance with 2,000,000 shares of the Company’s common stock during the year ended 2004. The Company’s common stock was originally issued to the Company’s president who in turn provided the stock to Export Finance Network. As of December 31, 2005 and 2004 the Company reflected a liability to Export Financial Network in the amount of $0 and $1,500,000, respectively.

The Company restructured its debt with Export Finance Network during the quarter ended June 30, 2005. James N. Turek, Sr., the Company’s president, transferred 2,000,000 shares of his personally held Company's stock to Export Finance Network. As a part of the restructure Export Finance Network agreed to settle the balance by $1,415,000. Based on the restructure a balance of $85,000 was owed to Export Finance Network. During 2005, the Company’s president paid off the balance.

On September 24, 2002 Laser Engineering entered into a legal judgment case No. 01-2209-BKC-RBR-A against the Company for debt still owed by the Company to Laser Engineering in the amount of $625,000. As of December 31, 2005 and 2004 the Company was liable to Laser Engineering in the amounts of $0 and 625,000, respectively. During the quarter ended June 30, 2005 the Company entered into a settlement agreement with Laser Engineering whereby the Company recognized income as a result of forgiveness of debt by Laser Engineering in the amount of $440,000.

All the above notes payable described above are currently due as a result of non payment and default as of the year ended December 31, 2005.

 

 

 

 

 

 

 

 

F-15

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

7.

Related Party Transactions

 

The Company had the following related party notes payable as of December 31:

 

 

2005

 

2004

Note payable – James Turek Sr. Payable on demand, accruing interest at ten percent (10%) per annum, convertible into Plasticon International, Inc. at the discretion of the holder.

 

 

 

 

 

 

 

 

 

 

$924,841

$430,992

 

 

 

 

 

Notes payable – James Turek II Payable on demand, accruing interest at ten percent (10%) per annum, convertible into Plasticon International, Inc. at the discretion of the holder.

 

 

 

 

 

 

 

 

 

130,000

130,000

 

 

 

 

 

 

Notes payable – James Bonn Payable on demand, accruing interest at ten percent (10%) per annum, convertible into Plasticon International, Inc. at the discretion of the holder.

 

 

 

 

 

 

 

 

170,000

 

 

170,000

Note payable to PCI (see above)

 

500,000

 

-

 

 

 

 

 

Total notes payable

1,724,841

730,992

 

 

 

 

 

Less current portion

(1,724,841)

(730,992)

 

 

 

 

 

Long term portion

$ -

$ -

During the years ended 1989 through 2001, James Turek Senior, the Company’s president advanced funds to the company in the amount of $2,139,122. The promissory notes provided by the Company to the Company’s president included an interest rate of ten percent (10%) per annum. Additionally the holder of the promissory note has the right to convert the notes into the Company’s common stock at the Company’s stated par value as well as to receive for every three shares converted from this note, a fourth to be issued by the Company for consideration of the note. During the year ended 2004 the Company’s president elected to convert several notes with a stated value of $1,708,130. In consideration of the conversion the Company’s president received 758,833,001 shares of the Company’s common stock. As of December 31, 2005 and 2004 the aggregate amounts owed to the Company’s president was $924,841 and $430,992, respectively.

 

 

 

F-16

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

7.

Related Party Transactions (continued)

During the years ended 2001 through 2002, James Turek II, the company’s operation executive and the son of the Company’s president advanced funds to the company in the amount of $130,000. The promissory notes provided by the Company to the operation executive included an interest rate of ten percent (10%) per annum. Additionally the holder of the promissory note has the right to convert the notes into the Company’s common stock at the Company’s stated par value as well as to receive for every three shares converted from this note, a fourth to be issued by the Company for consideration of the note. There was no beneficial conversion interest as a result of this transaction. As of December 31, 2004 and 2003 the balances owed to the Company’s operation executive was $130,000, respectively.

During the years ended 2000 through 2003, James Bonn, the Company’s secretary advanced funds to the Company in the amount of $120,000. During the year ended 2004 the Company’s secretary advanced additional fund to the Company in the amount of $50,000. The promissory notes provided by the Company to the executive during these years included an interest rate of ten percent (10%) per annum. Additionally the holder of the promissory note has the right to convert the notes into the Company’s common stock at the Company’s stated par value as well as to receive for every three shares converted from this note, a fourth to be issued by the Company for consideration of the note. As of December 31, 2005 and 2004 the balances owed to the Company’s secretary was $120,000.

All the above notes payable are currently due at year ended December 31, 2005.

During the normal course of business, Lexreal LLC (Lexreal), A Kentucky limited liability company, paid for goods and service for the benefit of The Company for the years ended December 31, 2005 and 2004 in the amount of $0 and $62,408, respectively. Lexreal is owned by James N. Turek Sr. the Company’s president and majority shareholder. The Company has reflected an amount due to Lexreal LLC for the years ended December 31, 2005 and 2004 in the amount of $0 and $62,408, respectively. During 2005, the Company raised proceeds for the acquisitions and other operating needs through commitments to issue 199,464,884 free trading shares of Company stock. The proceeds received came to Lexreal so the Company recorded a due from related party of $2,645,788 during the quarter ended March 2005. Lexreal made operating and financing payments on behalf of the Company of approximately $4,100,000 during which went to reduce the due from related party amount. The financing has been converted to preferred stock commitment as of December 31, 2005. The shares will be issued in 2006. Additionally, Lexreal provided the shares of Company stock to the investors. In return, Lexreal has received a preferred stock commitment.

 

 

 

 

F-17

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

7.

Related Party Transactions (continued)

During the normal course of business, Promotional Containers, Inc., a Nevada corporation, paid for goods and services for the benefit of The Company for the years ended December 31, 2005 and 2004 in the amount of $501,642 and $20,222, respectively. Promotional Containers, Inc. is owned by James N. Turek Sr. the Company’s president and majority shareholder. During the six months ended June 30, 2005 Promotional Containers, Inc. forgave balances owed by the Company in the amount of $20,222. The Company has reflected an amount due to Promotional Containers, Inc. for the years ended December 31, 2005 and 2004 in the amount of $501,642 and $20,222, respectively. The Company has reflected an amount due from PCI of 65,565 as of December 31, 2005.

During the normal course of business; Telco Blue, a Nevada corporation advanced funds to the Company for the years ended December 31, 2005 and 2004 in the amount of $0 and $140,507, respectively. Telco Blue, is owned by James N. Turek Sr. the Company’s president and majority shareholder. The Company has reflected an amount due to Telco Blue for the years ended December 31, 2005 and 2004 in the amount of $0 and $140,507. During 2005, the Company forgave this debt.

In January 2005, the Company obtained certain assets (molds, sales contract, customer base, and patents) from a related party, Promotional Container, Inc. (PCI). PCI is owned by James N. Turek Sr., the Company's president and majority shareholder. Consideration to PCI consisted of a promise to exchange 100,000,000 shares of preferred stock (recorded as $360,000 of preferred stock subscribed in the accompanying balance sheet) in the Company by May 2007 and a promise to pay $500,000 (non interest bearing) by May 2006. Due to common control, paid in capital was reduced by $860,000 to record the transaction. As of December 31, 2005, the company owed a balance of $500,000 to Promotional Containers, Inc. as a result of the acquisition.

 

 

 

 

 

 

F-18

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

8. Income Taxes

 

The Company adopted Financial Accounting Standard No. 109 which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

 

For income tax reporting purposes, the Company’s aggregate unused net operating losses approximate $111,013,000 which expire in various years through 2024, subject to limitations of Section 382 of the Internal Revenue Code, as amended. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management based upon the earning history of the Company, it is more likely than not that the benefits will not be realized.

 

Components of deferred tax assets are as follows at December 31:

 

 

2005

 

2004

Non-current:

 

 

 

 

Net operating loss carryovers

 

$43,739,000

 

$32,197,000

Accrued expenses

 

3,241,000

 

2,031,000

Valuation allowance

 

(46,980,000)

 

(34,228,000)

Net deferred tax asset

 

$ -

 

$ -

Under the Tax Reform Act of 1986, the benefits from net operating losses carried forward may be impaired or limited on certain circumstances. Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. The impact of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined.

 

 

F-19

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

8. Income Taxes (continued)

Reconciliation of the differences between the statutory tax rate and the effective income tax rate is as follows:

 

 

2005

 

2004

Statutory federal tax (benefit) rate

 

(34.00)%

 

(34.00)%

Statutory state tax (benefit) rate

 

(5.40)%

 

(5.40)%

Effective tax rate

 

(39.40)%

 

(39.40)%

Valuation allowance

 

39.40%

 

39.40%

Effective income tax rate

 

0.00%

 

0.00%

 

9. Shares Subscribed, Not Issued

During the year ended December 31, 2005, the Company subscribed 221,686,027 shares of common stock. 22,221,143 of the shares had not been issued as of December 31, 2005.

The following is a summary of the subscribed common share activity:

 

Common Stock Subscribed, Not Issued (Shares)

 

Other

Total

 

 

------------

------------

 

Balance at December 31, 2004

--

--

 

Shares subscribed

221,686,027

221,686,027

 

Issuance of subscribed shares by related parties

(199,464,884)

(199,464,884)

 

 

------------

------------

 

Balance at December 31, 2005

$ 22,221,143

$ 22,221,143

 

 

=========

=========

 

 

During the year ended December 31, 2005, the Company subscribed 104,395,543

 

shares of preferred stock. The shares had not been issued as of December 31, 2005.

 

 

 

 

 

 

F-20

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

9. Shares Subscribed, Not Issued (continued)

 

 

Following is a summary of the subscribed common share activity:

 

Preferred Stock Subscribed, Not Issued (Shares)

 

 

Other

Total

 

 

------------

------------

 

Balance at December 31, 2004

--

--

 

Shares subscribed

104,395,543

104,395,543

 

Issuance of subscribed shares

--

--

 

 

------------

------------

 

Balance at December 31, 2005

104,395,543

104,395,543

 

 

=========

=========

 

10.

Preferred stock

As of December 31, 2005, the Company has commitments to provide preferred stock to PCI and Lexreal. The class B preferred stock ($1 par value) committed to Lexreal is convertible up to 7,300,000,000 shares of common stock.

On January 30, 2004 the company increased its authorized shares of preferred stock from 1,000,000 shares to 50,000,000 shares. On April 15, 2004 the company increased its authorized shares of preferred stock to 100,000,000 shares. No preferred stock was issued by the Company during the years ended 2005 and 2004.

 

11.

Common stock

On January 22, 2004 the Company increased its authorized shares of common stock from 10,000,000 shares to 26,000,000 shares and increased its par value per share from .01 to .05. On January 30, 2004 the Company increased its authorized shares of common stock to 1,250,000,000 shares. On April 15, 2004, the Company increased its authorized shares of common stock to 2,000,000,000 shares.

On April 15, 2005, the Company increased its authorized shares of common stock from 2,000,000,000 shares to 3,000,000,000 shares.

On October 10, 2005, the Company increased its authorized shares of common stock from 3,000,000 shares with a par value of .05 to 5,000,000,000 million shares with a par value of .001. All common stock activity has been adjusted to the .001 par value in the accompanying consolidated financial statements.

 

F-21

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

11. Common stock (continued)

During the year ended December 31, 2005, the Company issued 2,277,253,729 shares of new common stock to the majority shareholder and 10,000,000 shares to an outside investor. The shares were issued primarily for compensation. Included in general and administrative expenses for the year ended December 31, 2005 is approximately $27,300,000 of primarily compensation expense. The value for the consideration was based on the fair market value of the shares on the date of issue.

For the year ended December 31, 2004, 1,402,629,771 new common stock shares were issued, to which 1,344,693,154 shares are considered restricted, as follows:

For the year ended December 31, 2004, the Company issued 873,777,544 shares of common stock for the conversion and/or satisfaction of debt. Of these shares issued for debt, a total of 758,833,001 shares were issued to the majority shareholder. Included in general and administrative expense for the year ended December 31, 2004 is approximately $71,850,000 of beneficial interest relating to these share transactions. The value for the consideration was based on the fair market value of the shares on the date of issue.

For the year ended December 31, 2004, the Company issued 464,719,539 shares of common stock for services received by the Company. The value of the services was based on the fair market value of the shares on the date of issue.

For the year ended December 31, 2004, the Company issued 64,132,688 shares of common stock in consideration for cash received by the Company from third parties as a part of a private placement completed in 1995, of which 43,904,912 shares were issued to the Company’s president and a related party.

 

 

12.

Losses per Share

The following table represents the computation of basic and diluted losses per share at December 31:

 

 

2005

 

2004

 

 

 

 

 

Losses available for common shareholders

 

($31,659,904)

 

($73,648,554)

 

 

 

 

 

Weighted average common shares

 

 

 

 

outstanding

 

2,164,757,608

 

1,440,486,371

 

 

 

 

 

Basic and fully diluted loss per share

 

($0.01)

 

($0.05)

 

Net loss per share is based upon the weighted average shares of common stock outstanding.

 

F-22

 

 


PLASTICON INTERNATIONAL, INC AND SUBSIDIARY

(FORMERLY WICKLUND HOLDING)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

 

 

 

 

13.

Subsequent events

In January 2006, the Company acquired all the stock of SEMCO Manufacturing (SEMCO), a Nevada business that manufactures and sells concrete coating products. The purchase terms are payment of $2,650,000 consisting of $650,000 in cash and $2,000,000 in performance payments (50% of Net Profits as defined) plus Plasticon restricted common stock worth $100,000. Additionally, the Company will pay a royalty payment (4% of Net Profits as defined) for twenty years beginning after the $2,000,000 of performance payments are made. The agreement includes a five year employment agreement with a base salary and other benefits specified.

Management is in the process of gathering information to apply purchase accounting to the SEMCO acquisition. The operations from SEMCO will be included in the operating results of the Company starting January 1, 2006.

On April 4, 2006, the Company increased authorized shares of common stock to 13,500,000,000 shares. Also on that date the authorized shares of preferred stock increased to 6,000,000,000 shares.

On January 3, 2006, Jim Turek Sr., the Company’s president and majority shareholder, forgave approximately $5,800,000 of obligations consisting of notes payable, accrued interest, and accrued salaries and bonuses.

On January 3, 2006, James N. Turek Jr. the son of the Company’s president forgave certain liabilities, which included compensation and interest owed to him, of approximately $344,000. On January 3, 2006 James Bonn the Company’s secretary forgave certain liabilities which included interest owned to him, amounting to $344,034.

On September 1, 2006, the Company, through its subsidiary, Pro Mold, entered into a $600,000 loan agreement. The note is secured by certain assets of Pro Mold. The interest rate is 9.76% and is due on September 6, 2011.

 

 

 

F-23