Plasticon International, Inc. (fka PLNIQ)

[rrm_bcnu]

The Trustee filing speaks to the following:

"As set forth in detail in the facts above, this case is replete with examples of at best, incompetence or gross mismanagement, and at worst with fraud and dishonesty. First, Plasticon’s incurrence of more than $70 million in expenses when it earned no revenue in 2004, followed by an incurrence of an additional $31 million in expenses on revenues of only $65,000 during 2005, provides the simplest “bottom line” evidence of gross mismanagement or incompetence. Turek cannot justify these outlays as a capital investment because the overwhelming majority of these outlays went toward compensation for services."

A. Before looking into the document we need to understand paid in capital:


Share Capital / Paid In Capital Defined -

Funds raised by issuing shares in return for cash or other considerations. The amount of share capital a company has can change over time because each time a business sells new shares to the public in exchange for cash, the amount of share capital will increase. Share capital can be composed of both common and preferred shares.

Also known as "equity financing".

The amount of share capital a company reports on its balance sheet only accounts for the initial amount for which the original shareholders purchased the shares from the issuing company. Any price differences arising from price appreciation/depreciation as a result of transactions in the secondary market are not included.

http://www.investopedia.com/terms/s/sharecapital.asp

B. Data From The 2004 10-K Filing

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, 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 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. (SEE NOTE 1 BELOW)

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. The common shares were previously considered subscribed (not issued) by the Company as of December 31, 2003 in the amount of $64,133.
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1,402,629,771 - 873,777,544 - 464,719,539 - 64,132,688 = ZERO
(The above numbers represent all shares issued in 2004. Only 1,402,629,771 - 1,344,693,154 = 57,936,617 shares were Free Trading, non-restricted shares)

873,777,544 - 758,833,001 = 114,944,543
(The number of shares that were not issued to Turek but used for conversion and/or satisfaction of debt.)

464,719,539 + 114,944,543 = 579,664,082
(The total number of shares issued for services, and conversion and/or satisfaction of debt.)

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.
Page F-10

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.
Page F-10

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.
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579,664,082 - 8,000,000 - 2,000,000 - 2,000,000 = 567,664,082
(The number of shares issued to satisfy services debt.)

The 2004 10-K records this number of shares as $567,664 (Amount), $71,910,964(Paid In Capital), and $72,478,628 (Total Stockholders deficit).


If 1,344,693,154 of the 1,402,629,771 shares issued were RESTRICTED STOCK, then how could this $72,478,628 of Stockholders deficit have been sold for cash without being annotated for release? That is the question we longs have been asking for over two years now. Also, it apparently wasn't issued to Turek per the 10-K, so why the innuendo that it was to his benefit in the 156 document? It is time for the answers to be given to the shareholders.

rrm



NOTE 1:
"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, 2004 and 2003 the aggregate amounts owed to the Company’s president was $430,992 and $2,139,122 respectively."

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http://www.sec.gov/Archives/edgar/data/318262/000133118606000023/plni0410k.htm