10QSB 1 p-q63003.txt 10QSB-6-3-2003 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 OR [ ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934 From the transition period from ___________ to ____________. Commission File Number 000-24723 ------- PSPP HOLDINGS INC (FORMERLY PITTS & SPITTS, INC) ----------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 88-0393257 -------------------------------- -------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 3435 Ocean Park Blvd. #107 Santa Monica, Ca 90405 ------------------------------------------ (Address of principal executive offices) (310)-207-9745 -------------- (Issuer's telephone number) Formerly: PITTS & SPITTS, INC. 14221 Eastex Freeway, Houston, Texas 77032 (281) 442-5013 -------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 [ ] No [ x ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under plan confirmed by a court. Yes ____ No ____ APPLICABLE ONLY TO CORPORATE ISSUERS The aggregate number of shares issued and outstanding of the issuer's common stock as of June 30, 2003 was: 61,761,530 SHARES and at January 17, 2007 was: 55,499,364.00 shares at $0.001 par value. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [X] No [ ] PSPP HOLDINGS, INC (FORMERLY PITTS & SPITTS, INC) FORM 10-QSB JUNE 30, 2003 INDEX PART I Item 1. Financial Statements 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II Item 1. Legal Proceedings 10 Item 2. Changes in Securities and Use of Proceeds 10 Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures 10 PART I. FINANCIAL INFORMATION Item 1. Financial Statements PSPP HOLDINGS, INC. (FORMERLY-PITTS AND SPITTS, INC.) CONDENSED CONSOLIDATED BALANCE SHEET June 30, 2003 ---------------- (Unaudited) ASSETS $ - ================ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable and accrued liabilities $ 38,000 Loans payable 1,063,508 Convertible debt 271,208 Advances payable 66,511 ---------------- ---------------- Total 1,439,227 ---------------- Total current liabilities 1,439,227 Stockholders' equity (deficit): Preferred stock, $.001 par value, 10,000,000 shares authorized, 1,000,000 shares issued and outstanding Common stock, $.001 par value, 80,000,000 shares authorized: 61,760,530 shares issued and outstanding: - Preferred Stock 300,000 Common Stock 61,762 Additional paid in capital 4,007,447 Special warrant proceeds - Accumulated deficit (5,508,436) ---------------- (4,381,643) Less: Investments ---------------- Oxford Knight (300,000) Dream Investments TV - ---------------- Total stockholders' equity (deficit) $ (1,439,227) ---------------- $ - ================
See accompanying notes to interim condensed financial statements. 3 PSPP HOLDINGS, INC. (FORMERLY-PITTS AND SPITTS, INC.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Six months ended June 30, June 30, -------- -------- 2003 2002 2003 2002 ------------ ------------- ------------- ------------- Revenues $ - $ - $ - $ - Expenses: Interest 23,346 23,697 46,692 47,460 Consulting and management - - - - Depreciation and amortization - - - - Office and general - - - - Professional fees 19,000 38,000 38,000 48,000 Salaries and benefits - - - - Other general and administrative - - 7,795 7,795 ------------- -------------- -------------- ------------- Total expenses 42,346 61,697 84,692 103,255 ------------- -------------- -------------- ------------- Net income (loss) $ (42,346) $ (61,697) $ (84,692) $ (103,255) ============= ============== ============= ============= Basic and diluted income (loss) per common share $(0.0) $(.65) $(0.0) $(1.43) ============= ============== ============== ============= Weighted average shares outstanding 61,760,530 95,307,000 61,760,530 72,435,000 ============= ============== ============== =============
See accompanying notes to interim condensed financial statements. 4 PSPP HOLDINGS, INC. (FORMERLY-PITTS AND SPITTS, INC.) CONDENSED CONSOLDIATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, ------------------------------- 2003 2002 --------- ------------- Cash flows from operating activities: Net loss $ (42,346) $ (103,255) Adjustments to reconcile net income to net cash used in operating activities: Accts. Payable (Increase) 19,000 - Accts. Payable (Decrease) - - Depreciation and amortization - - Accrued interest expense - 47,460 Non-cash consulting fees - - Non-cash finance fees - - Bad debts - - Changes in operating assets and liabilities - 4,407 Net changes in non-cash working capital - 48,000 ------------- ------------ Total 19,000 - Net cash used in operating activities (23,346) (3,388) ------------- ------------ Cash flows from investing activities: Additional Paid in Capital - - Common Stock - - Capital expenditures - - ------------- ------------ Total (23,346) - Cash flows from financing activities: Advances to related parties - - Deferred financing fee - - Special warrant proceeds - - Proceeds from convertible debentures 2,973 - Loans 20,373 - ------------- ------------ Total 23,346 - ------------- ------------ Effect of exchange rate changes on cash - - Net increase (decrease) in cash and cash equivalents - (3,388) Cash and cash equivalents at beginning of period - 3,388 ------------- ------------ Cash and cash equivalents at end of period $ - $ - ============= ============
See accompanying notes to interim condensed financial statements. 5 PSPP HOLDINGS, INC (FORMERLY PITTS & SPITTS, INC) NOTES TO FINANCIAL STATEMENTS June 30, 2003 NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION In July of 2002 the Company changed its name from Urbana.ca, Inc. to Pitts & Spitts, Inc. On April 11, 2003 the Company changed its name to PSPP Holdings, Inc. Urbana.ca, Inc. ("the Company") was organized on February 23, 1993 under the laws of the State of Delaware and October 30, 1997, changed its jurisdiction of incorporation to Nevada. On April 15, 1999 a wholly-owned subsidiary, U.R.B.A. Holdings, Inc. ("URBA") was incorporated under the laws of British Columbia to facilitate acquisitions in Canada. During January, 2000, URBA, 100% of the outstanding shares of Urbana.ca Enterprises Corp. ("Urbana.ca Enterprises"), E-Bill Direct Inc. ("E-Bill"), and Enersphere.com, Inc. ("Enersphere"), which are in the business of developing and marketing Internet-based products and services through the licensing of LocalNet portals and distribution of set-top boxes. Effective March 10, 2000, Urbana.ca Enterprises, Enersphere and E-Bill were amalgamated under the statutory laws of the Province of Ontario into a new company named Urbana Enterprises Corp. (Urbana Enterprises"). In March 2002, Urbana Enterprises, a subsidiary of Urbana.ca, Inc., filed for bankruptcy under Chapter 7. Its operations are terminated and it's remaining assets and liabilities are controlled by a trustee. The Corporation's subsidiary filed bankruptcy in March 2002 and the Corporation had no operations.As a result of the bankruptcy $ 3,357,861 of debt was relieved and the subsidiary was dissolved. The Corporation entered into an Exchange Agreement with Oxford Knight International, Inc. in October 2002 whereby the Corporation agreed to issue 1,970,000 shares of common stock to Oxford Knight International in consideration for 100% of the issued and outstanding shares of common stock of Fabricating Solutions, Inc., a Texas corporation, and Pitts and Spitts, Inc., a Texas corporation. Pitts and Spitts, Inc. and Fabricating Solutions, Inc. were engaged in the sale of barbeque pits and fabricating solutions, respectively. The Exchange Agreement was subject to the approval of the Oxford shareholders.In July 2002, the Corporation changed its name to Pitts and Spitts, Inc. Basis of Presentation These financial statements are expressed in US dollars and have been prepared in accordance with accounting principles generally accepted in the United States. Use of Estimates and Assumptions Preparation of the Company's financial statements in conformity with generally accepted accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 6 Goodwill The company records goodwill at cost less accumulated amortization taken on a straight-line basis over five years. Management reviews the value of goodwill regularly to determine if impairment has occurred. Furniture and Equipment Furniture and equipment are recorded at cost. Depreciation is calculated by using the straight-line method for financial reporting and accelerated methods for income tax purposes. The useful life of the assets range from 24 to 60 months. Financial Instruments The fair value of the Company's financial assets and financial liabilities approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Net Loss per Common Share Basic loss per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. The accompanying presentation is only of basic loss per share as the potentially dilutive factors are anti-dilutive to basic loss per share. 7 Stock-based Compensation The Company accounts for stock-based compensation using the intrinsic value based method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees ("APB No. 25"). APB No. 25 requires that compensation cost be recorded for the excess, if any, of the quoted market price of the common stock over the exercise price at the date the options are granted. In addition, as required by SFAS No. 123, the company provides pro-forma disclosure of the impact of applying the fair value method of SFAS No. 123. Recent accounting pronouncements The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position or cash flow. NOTE 2 - FINANCIAL CONDITION AND GOING CONCERN For the QUARTER ENDED, the Company incurred losses totalling $42,346.00. Because of these recurring losses, the Company will require additional working capital to develop and/or renew its business operations. The Company is identifying merger and/or acquisition candidates. As of year end no acquisition or merger agreements have been closed. There are no assurances that the Company will be able to identify a merger candidate and if adequate working capital is not available the Company may not renew its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. NOTE 3 - ACQUISITIONS Urbana.ca Enterprises Corp. In 2002 the subsidiary,Urbana.ca Enterprises Corp., filed for bankruptcy and was subsequently dissolved. NOTE 4 - LOANS PAYABLE The Company has outstanding loans AND ADVANCES PAYABLE totalling $1,396,881.00 8 NOTE 5 - CAPITAL STOCK During the period the Company completed the following Capital Stock transactions: During the year ended December 31, 2002 the Company issued 22,314,258 shares of common stock and 1,000,000 shares of Preferred stock. During the quarter ended there were no stock issuances. Stock Option and Incentive Plans The Company has a Stock Option Plan to issue up to 2,000,000 common shares of the Company for its employees, officers and directors. The Company also adopted a Stock Incentive Plan, which will provide for the granting of options to employees and officers. The maximum number of shares of common stock of the Company that may be issued pursuant to the Stock Incentive Plan is 4,400,000 shares. The exercise price of options granted pursuant to both plans will be equal to the market price of the common stock on the date of grant. As of December 31, 2001, no stock-based compensation cost has been recorded for any period and no stock options or awards have been issued under either of these plans. NOTE 6 - INCOME TAXES The Company has net operating loss carry-forwards which, result in deferred tax assets. These carryforwards will expire; it not utilized, commencing in 2005. The realization of the benefits from these deferred tax assets appears uncertain due to the Company's limited operating history and continuing losses. Accordingly, a full-deferred tax asset valuation allowance has been provided and no deferred tax asset benefit has been recorded. NOTE 7 - OPERATIONS The Company's ability to commence operations is contingent upon its ability to identify a prospective target business. NOTE 8 - SUBSEQUENT EVENTS In April 2002, Oxford Knight International, Inc. ("Oxford Knight") agreed to transfer 10,000,000 shares of its common stock in exchange for 1,000,000 shares of Urbana Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock allows Oxford Knight to vote 2/3 of the vote on all shareholder matters. In addition, the Series A Convertible Preferred Stock are convertible into 51% of the issued and outstanding shares of Urbana following conversion. Oxford Knight intends to merge Urbana with an operating entity. Subsequent to the exchange agreement, in April 2002, David Groves resigned as the Chief Executive Officer of Urbana. Paul C. Syracuse was appointed as the new Chief Executive Officer and President and before year end Paul syracuse resigned as Presidnet after appointing Ed Litwak as Presidnet and Director. On April 11, 2003 the Company changed its name to PSPP Holdings, Inc. On April 16, 2003, PSPP Holdings, Inc. executed a promissory note to Eric L. Goldstein in the amount of $200,000.00 (Two Hundred Thousand Dollars).The loan was going to fund the purchase and or the operations of the high-end barbeque manufacturing division. PSPP Holdings, Inc. defaulted on the note and Eric L. Goldstein effected his right to take possession of his collateral which was 30,000,000 shares of common post roll back stock, and 1,000,000 shares of preferred stock that Oxford Knight International, Inc. held. The shares were delivered pursuant to the escrow agreement and the note was discharged. Subsequent to the Goldstein agreement, Piedmont Properties, Inc. and Ararat,LLC negotiated the purchase of all the rights, title and interest to Goldstein's 30,000,000 shares of common and Oxford Knights 1,000,000 shares of preferred that Goldstein had acquired pursuant to the April 2003 Goldstein contract. With the failure to fund the barbrque manufacturing division the Company ceased operations. The Company actively sought acquistion candidates subsequent to 2002.The Company planned to locate and consummate a reverse merger or reverse acquisition with an unidentified private entity. The Company's ability to commence operations was contingent upon its ability to identify a prospective target business. In the first quarter of 2005 Mr. Litwak resigned as presidnet and Director after appointing Kyle Gotshalk as President and Director. In 2005 the company acquired all the shares of Dream Apartments TV for $58,100.00. Dream Apartments has not launched its programming to date and still intends to produce DVD's for apartment house applicants in the San Diego area initially and regionally in Southern California when fully developed. The Company has made arrangements with Maximum Impact productions of Carlsbad, California for the DVD sales and distribution. On April 10, 2006, PSPP Holdings, Inc. acquired 100% of Esafe, Inc., a debit card issuer. The company issued 22,890,936 shares of common stock to UCHUB as part of the purchase price and agreed to fund $200,000.00 (Two Hundred Thousand Dollars) of working capital to Esafe. Esafe's web site is Eluxe Financial.com. Upon the acquisition of ESAFE, Inc. as a wholly owned subsidiary Cherish ADams was appointed as the Company's Secretary and Treasurer and a Director and Larry Wilcox was appointed as a Director. 9 ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS THE cOMPANY CEASED ALL BUSINESS ACTIVITIES. The Company was actively seeking an acquisition or merger candidate. Please see "Subsequent Events" above for the current status of the Company. ITEM 3. CONTROLS AND PROCEDURES (a) As of the end of the period covered by this report, the Chief Executive Officer and the Chief Financial Officer made an evaluation of the company's disclosure controls and procedures (as defined in ss.240.13a-15(e) or 240.15d-15(e) of the Securities Exchange Act). Based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or 15d-15 under the Exchange Act, in his opinion, the disclosure controls and procedures are effective. (b) During the most recent fiscal year, there have not been any significant changes in our internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. PART II - OTHER INFORMATION ITEM 1: Legal Proceedings None. Item 2. Changes in Securities and Use of Proceeds NONE. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the security holders during the quarter. Item 5. Other Information None. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits None b) Reports on Form 8-K None SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PSPP HOLDINGS, INC. FORMERLY PITTS & SPITTS, INC. Date: January 17, 2007 By: /s/ Ed Litwak ------------------- Ed Litwak President,CEO and Director 10