UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB
   

(MARK ONE)
 
x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended December 31, 2006
 
OR
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
 
For the transition period from  ______________ to ______________

COMMISSION FILE NUMBER: 000-25385

 
PURCHASE POINT MEDIA CORPORATION
(Exact name of small business issuer as specified in its charter)
 
 
 
   
MINNESOTA
 
41-1853993
(State or Other Jurisdiction of
 
(I.R.S. Employer
Incorporation or Organization)
 
Identification No.)
 
 

 
1100 Melville Street, Suite 320 Vancouver, BC Canada V6E 4A6
(Address of Principal Executive Offices)
 
 
(604) 926-7859
(Company's Telephone Number)
 
 
(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.  x Yes      o No

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:

At January 30, 2007 there were 22,378,940 shares of Common Stock, no par value, outstanding.

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

SEC 2334 (09-05) Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
 
 
 
 

     
Page
       
 
 
       
Item 1.
  
 1
       
   
2
       
   
3
       
  Statements of Stockholders' Deficiency for the Period June 28, 1996 (Date of Formation) through December 31, 2006  
4 - 6
       
   
7
       
   
8 - 10
       
Item 2.
  
10 - 13
       
Item 3.
  
14
       
Item 4.
  
14
 
      
   
       
Item 1.
  
14
       
Item 4.
  
14
       
Item 5
  
14
       
Item 6.
  
14
       
 
  
15

 
 


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that the following financial statements be read in conjunction with the year-end financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended June 30, 2006.

The results of operations for the six and three months ended December 31, 2006, are not necessarily indicative of the results to be expected for the entire fiscal year or for any other period.



























 
1
 
 

 PURCHASE POINT MEDIA CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 BALANCE SHEET
               
 ASSETS
   
 
  
 
  
 
  
   
 
  
December 31, 2006
  
June 30,
2006
  
       
(Unaudited)
      
                     
 Current Assets                    
Cash
        
$
-
  
$
-
  
                     
Total Current Assets
          
-
   
-
 
                     
Equipment-net
         
1,876
   
740
 
                     
Other Assets:
                    
Other intangibles
          
9,124
   
9,804
 
                     
TOTAL ASSETS
        
$
11,000
  
$
10,544
  
                     
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                     
Current Liabilities:
                    
Note payable to related party
        
$
867,829
  
$
848,650
  
Accrued interest payable - related parties
          
435,970
   
398,474
 
Accounts payable - related parties
          
252,000
   
216,000
 
Accounts payable
         
175,828
   
166,955
 
                     
Total Current Liabilities
          
1,731,627
   
1,630,079
 
                     
Stockholders' Deficiency:
                    
Preferred stock; no par value -
                   
authorized 50,000,000 shares; outstanding 2,000 shares, at redemption value
          
170
   
170
 
Common stock, no par value -
                    
authorized 100,000,000 shares; outstanding 22,378,940
          
1,815,983
   
1,815,983
 
Additional paid-in capital
          
136,226
   
133,528
 
 
                    
Deficit accumulated during development stage
          
(3,673,006
)
  
(3,569,216
)
                     
Total Stockholders' Deficiency
          
(1,720,627
)
  
(1,619,535
)
                     
 
                    
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY
        
$
11,000
  
$
10,544
  
 
 
 
 
2


PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(Unaudited)
                       
                   
June 28, 1996
  
   
For the Six Months Ended
  
For the Three Months Ended
 
to
  
   
December 31,
  
December 31,
  
December 31,
  
   
2006
  
2005
  
2006
  
2005
  
2006
  
Costs and Expenses:
                     
 
                      
General and administrative expenses
  
$
65,398
    
93,729
 
$
35,149
  
$
36,072
  
$
2,618,763
  
Depreciation and amortization
    
896
   
828
   
448
   
414
   
30,519
 
                                 
Net loss from operations
    
(66,294
)
  
(94,557
)
  
(35,597
)
  
(36,486
)
  
(2,649,282
)
                                 
Other expenses:
                                
Loss from theft
                            
(354,477
)
Interest
    
(37,496
)
  
(34,967
)
  
(19,115
)
  
(17,307
)
  
(669,247
)
                                 
Net loss
  
$
(103,790
)
$
(129,524
)
$
(54,712
)
$
(53,793
)
$
(3,673,006
)
                                 
 
                                
Loss per common share – basic and diluted
  
$
(0.01
)
$
(0.01
)
$
-
  
$
-
        
                                 
Average oustanding shares
                                
(stated in '000)
                                
Basic
   
22,378
   
22,153
   
22,378
   
22,379
       
Diluted
    
22,878
   
22,653
   
22,878
   
22,879
       
 
 
 
 
3
 
PURCHASE POINT MEDIA CORPORATION        
(A DEVELOPMENT STAGE COMPANY)        
STATEMENTS OF STOCKHOLDERS' DEFICIENCY        
JUNE 28, 1996 THROUGH DECEMBER 31, 2006        
(Unaudited)        
                                   
            
 Common Stock  
  
Additional
  
 Retained
      
   
Preferred 
  
Par
 
     
Stated 
 
Paid-In
  
 Earnings
      
 
  
Stock 
  
Value
 
 Shares
  
Value 
  
Capital
  
 (Deficit)
  
Total
  
 
                                  
 
                                  
Balance, June 28, 1996 (Date of Formation)
     -  
$
-
    
-
  $ -  
$
-
  
$
-
  
$
-
  
                                             
Sale of common stock (at $.009 per share)
     -    
-
   
1,175,000
    10,000    
-
   
-
   
10,000
 
                                             
Four-for-one stock split
     -    
-
   
 3,525,000
    -    
-
   
-
   
-
 
                                             
Issuance of preferred stock for consulting
                                            
services (valued at $.09 per share)
     2,000    
170
   
-
    -    
-
   
-
   
170
 
                                             
Net loss for the period ended June 30, 1996
     -    
-
   
-
    -    
-
   
(338,760
)
  
(338,760
)
 
Recapitalization for effect of reverse acquisition
    
-
   
-
   
6,675,000
   
8,500
   
-
   
-
   
8,500
 
 
                                            
Net loss for the year ended June 30, 1997
    
-
   
-
   
-
   
-
   
-
   
(99,350
)
  
(99,350
)
 
                                            
Net loss for the year ended June 30, 1998
    
-
   
-
   
-
   
-
   
-
   
(142,719
)
  
(142,719
)
 
                                            
Sale of common stock (at $7.00 per share)
    
-
   
-
   
34,571
   
241,997
   
-
   
-
   
241,997
 
 
                                            
Issuance of warrants for loan financing
                                            
(issued at $.67 per share)
    
-
   
-
   
-
   
-
   
23,104
   
-
   
23,104
 
 
                                            
Net loss for the year ended June 30. 1999
    
-
   
-
   
-
   
-
   
-
   
(458,843
)
  
(458,843
)
 
 
 
4
 
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
JUNE 28, 1996 THROUGH DECEMBER 31, 2006 (Continued)
(Unaudited)
                               
 
 
 
 
 
 
Common Stock
 
Additional
 
Retained
 
 
 
 
 
Preferred
 
Par
 
 
 
Stated
 
Paid-In
 
Earnings
 
 
 
 
 
Stock
 
Value
 
Shares
 
Value
 
Capital
 
(Deficit)
 
Total
  
                               
                               
Issuance of warrants for loan financing
                              
(issued at $ .08 per share)
    
-
   
-
   
-
   
-
   
83,738
   
-
   
83,738
 
                                             
Sale of common stock (at $1.00 per share)
    
-
   
-
   
117,665
   
117,665
   
-
   
-
   
117,665
 
                                             
Sale of common stock (at $.50 per share)
    
-
   
-
   
336,076
   
168,038
   
-
   
-
   
168,038
 
                                             
Net loss for the year ended June 30, 2000
    
-
   
-
   
-
   
-
   
-
   
(483,493
)
  
(483,493
)
                                             
Issuance of warrants for loan financing
                                           
(issued at $.08 per share)
    
-
   
-
   
-
   
-
   
21,286
   
-
   
21,286
 
                                             
Sale of common stock
                                            
(at $1.00 per share, net of issuance costs)
    
-
   
-
   
97,138
   
97,138
   
-
   
-
   
97,138
 
                                             
Net loss for the year ended June 30, 2001
    
-
   
-
   
-
   
-
   
-
   
(282,592
)
  
(282,592
)
                                             
Sale of common stock (at $.05 per share)
    
-
   
-
   
1,613,490
   
80,674
   
-
   
-
   
80,674
 
                                             
Settlement of debt
    
-
   
-
   
3,500,000
   
402,021
   
-
   
-
   
402,021
 
                                             
Net loss for the year ended June 30, 2002
    
-
   
-
   
-
   
-
   
-
   
(500,234
)
  
(500,234
)
                                             
Sale of common stock (at $.05 to $.10 per share)
    
-
   
-
   
650,000
   
39,000
   
-
   
-
   
39,000
 
                                             
Net loss for the year ended June 30, 2003
    
-
   
-
   
-
   
-
   
-
   
(92,158
)
  
(92,158
)
                                             
Sale of common stock (at $.05 per share)
    
-
   
-
   
1,360,000
   
68,000
   
-
   
-
   
68,000
 
                                             
Issuance of common stock for services
                                           
(at $.05 to $.10 per share)
    
-
   
-
   
595,000
   
29,950
   
-
   
-
   
29,950
 
                                             
Net loss for the year ended June 30, 2004
    
-
   
-
   
-
   
-
   
-
   
(223,517
)
  
(223,517
)
 
 
 
 
 
 
5
 

PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
JUNE 28, 1996 THROUGH DECEMBER 31, 2006 (Continued)
(Unaudited)
                               
 
 
 
 
 
 
Common Stock
 
Additional
 
Retained
 
 
 
 
 
Preferred
 
Par
 
 
 
Stated
 
Paid-In
 
Earnings
 
 
 
 
 
Stock
 
Value
 
Shares
 
Value
 
Capital
 
(Deficit)
 
Total
  
Issuance of common stock for costs of stock offering
    
-
   
-
   
1,000,000
   
-
   
-
   
-
   
-
 
                                           
Issuance of common stock for services at $.50 per share
    
-
   
-
   
400,000
   
200,000
   
-
   
-
   
200,000
 
                                             
Issuance of common stock for payment of debt at $.50 per share
    
-
   
-
   
190,000
   
95,000
   
-
   
-
   
95,000
 
                                             
Issuance of common stock for at $.08 per share
    
-
   
-
   
250,000
   
20,000
   
-
   
-
   
20,000
 
                                             
Issuance of common stock for services at $.50 per share
    
-
   
-
   
410,000
   
205,000
   
-
   
-
   
205,000
 
                                             
Net loss for the year ended June 30, 2005
    
-
   
-
   
-
   
-
   
-
   
(710,702
)
  
(710,702
)
                                             
Balance at June 30, 2005
    
2,000
   
170
   
21,928,940
   
1,782,983
   
128,128
   
(3,332,368
)
  
(1,421,087
)
                                             
Issuance of common stock for expenses at $.06 per share
    
-
   
-
   
250,000
   
15,000
   
-
   
-
   
15,000
 
                                             
Sale of common stock for cash at $.09 per share
    
-
   
-
   
200,000
   
18,000
   
-
   
-
   
18,000
 
                                             
Valuation of common stock options for expenses
    
-
   
-
   
-
   
-
   
5,400
   
-
   
5,400
 
                                             
Net loss for the year ended June 30, 2006
    
-
   
-
   
-
   
-
   
-
   
(236,848
)
  
(236,848
)
                                             
Balance at June 30, 2006
    
2,000
 
$
170
    
22,378,940
 
$
1,815,983
  
$
133,528
  
$
(3,569,216
)
$
(1,619,535
)
                                             
Valuation of common stock options for expenses
    
-
   
-
   
-
   
-
   
2,698
   
-
   
2,698
 
                                             
Net loss for the period ended December 31, 2006
    
-
   
-
   
-
   
-
   
-
   
(103,790
)
  
(103,790
)
                                             
Balance at December 31, 2006
    
2,000
 
$
170
    
22,378,940
 
$
1,815,983
  
$
136,226
  
$
(3,673,006
)
$
(1,720,627
)

 
 
6
 
PURCHASE POINT MEDIA CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(Unaudited)
 
          
June 28,
 
 
 
 
 
 
 
1996 to
 
 
 
For the Six Months ended
 
June 30,
 
 
 
December 31,
 
December 31,
 
 
 
2006
 
2005
 
2006
  
CASH FLOW FROM OPERATING ACTIVITIES:
              
Net loss
  
$
(103,790
)
$
(129,524
)
$
(3,673,006
)
Adjustments to reconcile net loss to net cash
                    
used in operating activities:
                    
Depreciation and amortization
    
896
   
829
   
30,520
 
Write-off of patent
 
  
-
   
-
   
4,767
 
Issuance of common and preferred stock for expenses
    
-
   
15,000
   
478,620
 
Issurance of warrants for financing
    
-
   
-
   
128,128
 
Valuation of options for financing
    
2,700
   
-
   
8,100
 
Changes in operating assets and liabilities:
                    
Increase in accounts payable
    
82,371
   
95,695
   
1,372,096
 
 
                    
Net change in cash from operations
    
(17,823
)
  
(18,000
)
  
(1,650,775
)
                     
CASH FLOW FROM INVESTING ACTIVITIES:
                    
Security deposit
    
-
   
-
   
(600
)
Acquisition of patents
    
-
   
-
   
(31,542
)
Purchase of equipment
    
(1,352
)
  
-
   
(14,145
)
                     
     
(1,352
)
  
-
   
(46,287
)
                     
                     
CASH FLOW FROM FINANCING ACTIVITIES:
                    
 
                    
Proceeds from notes payable related party
    
19,182
   
-
   
856,658
 
Payment to note payable related party
    
(7
)
  
-
   
(107
)
Proceeds from sale of common stock
   
-
   
18,000
   
840,511
 
                     
     
19,175
   
18,000
   
1,697,062
 
                     
 
Net (decrease) increase in cash
    
-
   
-
   
-
 
                     
Cash - beginning of year
    
-
   
-
   
-
 
                     
Cash - end of year
  
$
-
  
$
-
  
$
-
  
                     
NON CASH FLOWS FROM OPERATING ACTIVITIES:
                    
                     
Issuance of 2,000 preferred shares for services - 1996
              
$
170
  
                     
Issuance of 595,000 common shares for services - 2004
              
$
29,250
  
                     
Issuance of 1,000,000 common shares for services - 2005
              
$
425,000
  
                     
Issuance of 250,000 common shares for services - 2006
              
$
15,000
  
 
 
7
 
PURCHASE POINT MEDIA CORPORATION
(DEVELOPMENT STAGE COMPANY)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
December 31, 2006
1.
ORGANIZATION

The Company was incorporated under the laws of the state of Minnesota on June 28, 1996 with the name “Leghorn Inc.” with authorized common stock of 100,000,000 shares with no par value and 50,000,000 preferred shares with no par value. The terms of the preferred stock included rights to convert to common stock which has expired. No new terms have been established by the board of directors. During July 1997 the Company changed its name to “Purchase Point Media Corporation” as part of a reverse merger.

The Company is in the business of the development and marketing of advertising space to national advertisers on a patented grocery cart display devise. On the report date operations had not started and the Company is considered to be in the development stage.
 
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
ACCOUNTING METHODS

The Company recognizes income and expenses based on the accrual method of accounting.

DIVIDEND POLICY

The Company has not yet adopted a policy regarding payment of dividends.

INCOME TAXES

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to reverse. An allowance against deferred tax assets is recognized, when it is more likely that not, that such tax benefits will not be realized.

On December 31, 2006, the Company had a net operating loss carry forward of $3,673,006, however, any tax benefit from the carryforward would be substantially limited because of major ownership changes in the outstanding common stock of the Company and therefore any benefit has been fully offset by a valuation reserve. The net operating loss will expire starting in 2012 through 2026.

FOREIGN CURRENCY TRANSLATION

The functional currency for some foreign operations is the local currency. Assets and liabilities of foreign operations are translated at balance sheet date rates of exchange and income, expense and cash flow items are translated at the average exchange rate for the period. Translation adjustments in future periods will be recorded in Accumulated Other Comprehensive Income. The translation gains or losses were not material for the period ended December 31, 2006.
 
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common shares and common equivalent shares outstanding as if shares had been issued on the exercise of any common or preferred share rights unless the exercise becomes antidilutive and then only the basic per share amounts are shown in the report.

FINANCIAL AND CONCENTRATINS RISK

The Company has no financial instruments that potentially subject the Company to significant concentration of credit risk.
 
8
 
PROPERTY AND EQUIPMENT

The Company’s property and equipment consists of the following:


Office and other equipment at cost
  
$
4,901
  
Less accumulated depreciation
    
3,025
 
   
$
1,876
  

Office equipment is depreciated on the straight line method over five years.

PATENTS

Patents have been recorded at cost and are being amortized over their useful lives of 17 years as follows.

 
Patents at cost
  
$
23,743
  
Less accumulated amortization
    
14,619
 
   
$
9,124
  

Patents are being amortized at the rate of $1,361 each year.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs, including wages, supplies, and depreciation on equipment used in the research activity, are being expensed as incurred.

REVENUE RECOGNITION

Revenue will be recognized on the sale and delivery of a product or the completion of a service provided.
 
ADVERTISING AND MARKET DEVELOPMENT

The Company will expense advertising and market development costs as incurred.

EVALUATION OF LONG-LIVED ASSETS

The Company periodically reviews its long lived assets, including equipment and patents, and makes adjustments, if the carrying value exceeds the fair value.

ESTIMATES AND ASSUMPTIONS

Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.

FINANCIAL INSTRUMENTS

The carrying amounts of financial instruments, including cash and accounts payable, are considered by management to be their fair values due to their short term maturities.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.
 
3.
CAPITAL STOCK

During the year ended June 30, 2006 the Company issued 200,000 common shares as issuance costs for private placement stock sales valued at $18,000 and 250,000 private placement common shares for services valued at $15,000.

During the six months ended December 31, 2006 the Company did not issue any common stock.

4.
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

Officer-directors own 33% of the outstanding common shares of the Company and have demand, 6% notes payable due them of $867,829 plus accrued interest payable of $435,970 on December 31, 2006. An officer-director also has accrued consultant fees due him of $252,000.

On April 26, 2004, and modified during August 2005, the Company entered into a stock option agreement with a director, which provides for an option to purchase 500,000 common shares at any time after April 26, 2005, for up to five years thereafter at $.35 per share, with the condition that he remains a director of the Company. The agreement also provides for the issuance of the shares as a consulting fee if the director is able to complete a contract with a designated major food chain, to install an advertising display on their shopping cars. As of December 31, 2006, no shares have been issued.

5.
GOING CONCERN

The Company will need additional working capital for its future planned activity and to service its debt, which raises substantial doubt about its ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining sufficient working capital to be successful in that effort. The management of the Company has developed a strategy, which it believes will accomplish this objective, through additional short term loans, and equity funding, which will enable the Company to operate for the coming year.
 
Item 2. Management’s Discussion and Analysis or Plan of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report. Certain statements contained in this report, including, without limitation, statements containing the words "believes," "anticipates," "expects" and words of similar import, constitute "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, sustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

Overview

Purchase Point Media Corporation ("PPMC" or the "Company) owns a patented grocery cart advertising display device called the last word™ that attaches to supermarket shopping carts. At this time, patents have been granted in the United States, Canada, France, Germany and the United Kingdom. The last word™ is a registered trademark owned by PPMC. The Company is still in the development stage and is not an operating company. There can be no assurance that the selling of advertising space to national advertisers will be developed or that the Company will achieve a profitable level of operation.

The last word™ is a clear plastic, weatherproof, highly durable, state of the art, point-of-purchase ("POP") display device that encloses a glossy color photo insert. The panel is 1/4 inch thick, 7 inches high and 16 inches wide. The last word™ insert contains 10 three by three inch advertisement frames. The last word™ attaches to the back of the child's seat section in grocery carts, so that it is directly in front of the shopper's eyes. Management believes that the last word™ has powerful advantages over competing POP advertising media.

The development of the last word™ began in 1991 when the inventor, Albert Folsom, applied for patent protection. Subsequent to that, Amtel Communications Inc. ("Amtel") invested over $1,000,000 in the development of the last word™, which included applying for and receiving the registered trademark for the last word™. In June 1994, a Nevada corporation also called Purchase Point Media Corporation acquired the patents and the exclusive marketing rights and trademark. In April 1997, a public Minnesota corporation acquired the assets of Purchase Point Media Corporation, leaving PPMC (Minnesota) as the surviving company.

From 1993 to present, PPMC worked on development of the last word™, seeking patent protection in additional countries and setting the stage to launch a global point of purchase advertisement service company. In November 2003 PPMC contracted with SourceOne in New York City to contract with grocery chains to lease the baby seat section of grocery carts and handle ad sales. PPMC has received a proposal from Spar Inc. to install the last word™ and handle the ad changes and maintenance. Spar Inc. has 6,500 people across the United States that provide services to stores. PPMC will contract with injection molding companies to manufacture the last word™. 

 
Marketing, Sales and Operations

PPMC will rent the child seat locations on grocery carts from supermarkets for a rental rate equal to 10% of the gross advertising revenues that the Company receives. PPMC will sell the advertising for each of the ten positions on the last word™ to manufacturers of leading national brand products sold in supermarkets. Each position is priced at $2.25 per month per thousand customer checkouts at the grocery store. Advertising agencies will receive a 15% commission for all advertisements placed on behalf of their clients. This advertising will be replaced in quarterly cycles to coincide with the seasons.

Radio and TV

PPMC has entered into a joint participation agreement with CBS Radio and TV wherein CBS will offer stores free advertising and then sell Radio,TV and the last word™ advertising to product manufactures who sell their products in the stores.
 
Shelf talkers, Coupon dispensers

Through an agreement with National Hispanic Retail Networks (NHR). PPMC can offer Shelf Talkers and Coupon Dispensers to the stores carrying the last word™. NHR who has Shelf Talkers and Coupon Dispensers in 4,400 will also be able to offer the last word to their clients.
 
The Point of Purchase (POP) Market

The following discussion of the Point of Purchase (POP) market is based upon the "Supermarket Buying Habits Survey" published by The Point Of Purchase Advertising Institute, Inc. (POPAI), based in Washington DC.. Point of purchase advertising is a $17 billion business. The basis of the growth of POP advertising is its capacity to influence the buying decisions of shoppers after they enter a store. POPAI has determined that average shoppers make the decisions for choosing two thirds of their supermarket purchases after they enter a store. Other marketing professionals concur with these findings.

POPAI's research has shown that 70 manufacturer displays and 160 signs are found in an average supermarket. In addition, advertisements are found on product shelves and on shopping carts. According to research reported in Marketing Magazine, which covers marketing and sales promotion advertising, gross sales are 12% higher in stores with advertisements on product shelves than in stores without shelf advertisements. In addition, advertising panels on the front of shopping carts increase the average sales of those products by 11.5%. Other surveys show that a product advertised on a grocery cart would cause a decrease in sales of the competing product equal to 50% of the increase of the advertised product.

In-store POP advertising is effective because there are thousands of competing products. The average supermarket carries over 15,000 items and larger stores over 30,000. Each month a thousand new products fight for shelf space and the customer's attention.

The majority of shoppers are impulse buyers. Every year fewer wives stay at home and read newspaper ads to plan their grocery shopping. The increase of two-household earners means considerably less time for planning. Consequently, more and more people do their grocery shopping without a list and are more susceptible to in-store advertising.

In 1986, grocery store sales topped $300 billion. By the year 2000, supermarket customers will spend about half a trillion dollars. These figures are based on a conservative 6% annual growth rate during the 1990's.

Packaged food companies are now entering over one thousand new products into the marketplace each month. In 1970, the average supermarket featured 7,800 items. By 1990, that number had reached approximately 15,000 and some carry more than 30,000 items.

In 1965, the average trip to the grocery store lasted 28 minutes and the average weekly spending in supermarkets was $28.49. By 1990, shoppers made slightly more than two trips to the supermarket each week, spending more than $72.00 per trip. The major shopping trip now lasts nearly 50 minutes as the hurried shoppers are attempting to wrap up all of their required shopping in one trip.

The majority of shoppers are working outside of the home and have little time to plan their shopping trip, making them much more vulnerable to influence and factors that promote their purchasing decisions while shopping.
 
Competition

A number of companies compete in the point of purchase grocery cart advertising industry. The most significant competitors are Actmedia Inc. ("Actmedia") and Floor Graphics.

News Corp. acquired Actmedia Inc. of Darien, Connecticut, which was owned by Heritage Media Corp. and then changed the name to News America Marketing. News America Marketing named the grocery cart division, "Smart Source Carts" (sometimes referred to herein as Actmedia). News America Marketing is a large company, which competes in several categories of point of purchase supermarket advertising, including using grocery carts as the location for its advertising message. Actmedia pioneered grocery cart advertising and has proven that a single POP advertisement on a grocery cart can be effective and profitable.

Smart Source Carts attaches an 8-inch by 9-inch by 9-inch single advertisement panel to the front inside and front outside of shopping carts. According to Actmedia promotional literature, its clients have commissioned the research company A.C. Nielsen to conduct over 600 independent surveys on Actmedia's ad program. Nielsen's findings concluded that Actmedia's grocery cart advertising increases average sales of the advertised products by 12.6%.
 
In addition to Actmedia (News America), there are a number of other competitors in the industry. VideOcart is a shopping cart equipped with a black and white battery operated video screen, which imparts information as well as advertisements. Other competitors include shelf and aisle displays as well as a number of newer hi-tech POP displays. Various electronic in-store displays and coupon systems exist including: Aisle Vision to straddle the aisle; Market Vision, an electronic message board crawl screen; POPNET, a computerized in-store system displaying animated sequences and price promotions; Actmedia's Instant Coupon Machine, an on-shelf electronic dispensing device; and Shelf Vision, another electronic display system.

In Store Advertising has a backlit display unit with an LED read out placed above the aisle in grocery stores. Other displays include motion-activated units designed to heighten product visibility. Camtalker's sensory equipment triggers a taped message whenever a customer comes within range. Soundtron also triggers a message to potential customers as does Voice Vendor.

The Company believes that since the last word™ will be in continuous communication with each and every shopper in the store, it will be more effective than the products of its competitors.

Patent

The patent invention is a waterproof advertising display device. Broadly stated, the patent covers the combination of a telescopingly nestable shopping cart of the standard type, having a top-hinged rear gate and a rear receptacle, and an advertising holder mounted facing a user on the front wall of the rear receptacle, including a rear display plate over the advertising and a watertight seal such that liquids may not enter the advertising area.

Also protected is the above combination wherein the cover plate is attached with a quick release hinge. It also includes an optional calculator assembly supporting the calculator at an upward angle for viewing by the user.
 
Production and Manufacturing

The early stage manufacturing of the last word® has been undertaken by Lesair, Inc. in San Diego, California. The manufacturer of the final production runs has not been determined. Competitive bids are being tendered at this time.
 
Quarterly Financial Statements:

The Note 4 of the Notes to Unaudited Financial Statements accompanying this report state that substantial doubt has been raised about our ability to continue as a going concern. Our present business operations do not generate any revenue with which to cover our expenses. We will have to raise capital through the placement of our securities in order to remain viable. We are continuing to incur management and administrative costs, professional fees and other expenses. If we are unable to raise capital we will be unable to fund our plan of operations. Because we will continue to incur net losses, we may have to cease operations entirely. This factor, among others, raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to obtain funds to meet our obligations on a timely basis, obtain additional financing or refinancing as may be required, and ultimately to attain profitability. There are no assurances that we will be able to obtain any additional financing or, if we are able to obtain additional financing, that such financing will be on terms favorable to us. The inability to obtain additional financing when needed would have a material adverse effect on our operating results.

Six Months Ended December 31, 2006
Versus Six Months Ended December 31, 2005

The net loss decreased from approximately $129,525 for the six months ended December 31, 2005 to approximately $103,800 for the six months ended December 31, 2006. The items of significant decrease for the six months ended December 31, 2006 over the comparable period of the prior year was an decrease in general and administrative expense from approximately $93,730 in 2005 to approximately $65,400 for the six months ended December 31, 2006 due to a decrease in consulting expense from approximately $35,000 in 2005 to approximately $2,700 for the six months ended December 31, 2006, respectively and professional fees from approximately $22,600 in 2005 to approximately $13,500 for the six months ended December 31, 2006.

Three Months December 31, 2006
Versus Three Months Ended December 31, 2005

The net loss increased from approximately $53,800 for the three months ended December 31, 2005 to approximately $54,800 for the three months ended December 31, 2006. The items of significant increase for the three months ended December 31, 2006 over the comparable period of the prior year was a decrease in general and administrative expense from approximately $36,500 in 2005 to approximately $35,600 for the three months ended December 31, 2006 due to a decrease in consulting expense of $-0- in 2005 to approximately $1,350 for the three months ended December 31, 2006, respectively and an increase in interest expense from approximately $17,700 in 2005 to $19,100 for the three months ended December 31, 2006, respectively.
 
LIQUIDITY

We have no current operations that have generated any revenue. We must rely entirely on private placements of Company stock to pay operating expenses. At December 31, 2006 we had a working deficit of approximately $1,732,000. Since we have no source of revenue, our working capital deficit will continue to increase as we incur additional operating expenses. Presently, we have no external sources of cash and we are dependent upon private placements of our stock for funding.

In August 2004, the Company contract with Charterhouse Capital Markets, Inc. ("CCMI"), to assist the Company in securing financing to conduct a nationwide rollout program of The Lastword™.

On November 4, 2004, CCMI entered into a Memorandum of Understanding ("MOU") with Atlas E.D.C. under which CCMI and Atlas E.D.C. will issue a $100,000,000 variable rate demand note ("VRDN"). Under the terms of the MOU, Atlas E.D.C. will advance $5,000,000 into escrow which are the fees required to rate, issue and place the $100,000,000 VRDN offer.

Through the use of proceeds from the VRDN, CCMI will generate and fund on a scheduled basis, up to $25,000,000 for the national rollout of the Company's potential "The LastWord"™ advertising display device. The balance of $75,000,000 in generated funds will be directed to Atlas E.D.C. low income housing project in the State of Illinois.

CRITICAL ACCOUNTING ISSUES

The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of the financial statements, requires the Company to make estimates and judgments that effect the reported amount of assets, liabilities, and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to intangible assets, income taxes and contingencies and litigation. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
 
NEW FINANCIAL ACCOUNTING STANDARDS

In September 2006, the SEC issued Staff Accounting Bulletin (‘‘SAB’’) No. 108, ‘‘Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,’’ which provides interpretive guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. The SEC staff believes that registrants must quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in quantifying a misstatement that, when all relevant quantitative and qualitative factors are considered, is material. SAB No. 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006, with earlier application encouraged for any interim period of the first fiscal year ending after November 15, 2006, filed after the publication of SAB No. 108 (September 13, 2006). The Company is currently evaluating the impact that SAB No. 108 could have on its results of operations or financial condition.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Post Retirement Plans”, an amendment of FASB Statements No. 87, 88, 106 and 132(R). FASB 158 will require employers to recognize their defined benefit plans’ overfunded or underfunded status in their balance sheets, require employers to measure plan assets and plan obligations as of the balance sheet date, immediately recognize any remaining transition obligation currently being deferred, and recognize actuarial gains and losses through other comprehensive income. The statement is effective for fiscal years ending after December 15, 2006. The Company does not believe that SFAS No. 158 will have a material impact on its financial statements as of and for the year ended June 30, 2007.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which enhances existing guidance for measuring assets and liabilities using fair value. The new Statement provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and sets out a fair value hierarchy with the highest priority being quoted prices in active markets. Under SFAS No. 157, fair value measurements are disclosed by level within that hierarchy. While SFAS No. 157 does not add any new fair value measurements, it does change current practice. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not believe that SFAS No. 157 will have a material impact on its financial statements.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 “Accounting for Uncertainty in Income Taxes" ("FIN 48"). The interpretation requires a two step approach for recognizing and measuring tax benefits based on a recognition threshold of “more likely than not”. The FASB also requires explicit disclosures about uncertainties in tax positions including a detailed rollforward of tax benefits that do not qualify for financial statement recognition. The adoption of FIN 48 is effective for fiscal years beginning after December 15, 2006.  The implementation of FIN 48 could have a material effect on the Company’s balance sheet and statement of operations but the effect of such implementation is not determinable at this time.
 
In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets", an amendment of APB Opinion No. 29. SFAS No. 153 amends APB Opinion No. 29 by eliminating the exception under APB No. 29 for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for periods beginning after June 15, 2005. The adoption of SFAS No. 153 did not have a material effect on the Company's consolidated financial position or results of operations.
 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk Fair Value of Financial Instruments
 
The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments". The estimated fair values of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The Company has not entered into, and does not expect to enter into, financial instruments for trading or hedging purposes. The Company does not currently anticipate entering into interest rate swaps and/or similar instruments. The Company's carrying values of cash, marketable securities, accounts receivable, accounts payable and accrued expenses are a reasonable approximation of their fair value.

Item 4. Controls and Procedures

(a)
Disclosure controls and procedures. As of the end of the Company's most recently completed fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) covered by this report, the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.

(b)
Changes in internal controls over financial reporting. There have been no changes in the Company's internal controls over financial reporting that occurred during the Company's last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no legal proceedings against the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5. OTHER INFORMATION

Not applicable

ITEM 6. Exhibits and Reports on Form 8-K

Not applicable
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

     
  PURCHASE POINT MEDIA CORPORATION
 
 		  
 		  
 
Date: February 14, 2007 By:   /s/   Albert Folsom
 
Albert Folsom
  President, Chief Executive Officer, Chief Financial Officer and Director

 

 
 
 
 
15
 
 
EXHIBIT INDEX

Exhibit 31.1 - Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2 - Certification of the Director pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.