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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
 For Quarterly Period Ended June 30, 2005
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
 Commission File Number: 0-26804
 PLANET TECHNOLOGIES, INC.
 
 CALIFORNIA
    
    33-0502606(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)6835 Flanders Drive, Suite 100, San Diego, California
    
    92121(Address of principal executive offices)
    
    (Zip Code)(858) 457-4742(Issuers telephone number, including area code)
  þ YES
    
    o NO
  Class
    
    Outstanding at June 30, 2005Common Stock, no par value
    
    
    2,280,368




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Page No.PART I  Financial StatementsItem 1
    
    Condensed Balance Sheet (Unaudited) June 30, 2005
    
    
    2Condensed Statements of Operations (Unaudited)
Three and Six Months Ended June 30, 2005 and 2004
    
    
    3Condensed Statement of Shareholders Deficiency (Unaudited)
Six Months Ended June 30, 2005
    
    
    4Condensed Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 2005 and 2004
    
    
    5Notes to Unaudited Condensed Financial Statements
    
    
    6Item 2
    
    Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    9Item 3
    
    Controls and Procedures
    
    
    13PART II  Other InformationItem 1
    
    Legal Proceedings
    
    
    13Item 2
    
    Changes in Securities and Use of Proceeds
Unregistered Sales of Securities and Use of Proceeds
    
    
    13Item 3
    
    Defaults upon Senior Securities
    
    
    13Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    13Item 5
    
    Other Information
    
    
    13Item 6
    
    Exhibits
    
    
    13SIGNATURES
    
    
    14EXHIBIT 31.1EXHIBIT 32.1
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PLANET TECHNOLOGIES, INC.
 
 CONDENSED BALANCE SHEET (UNAUDITED)
 June 30, 2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    139,937Accounts receivable, less allowance for doubtful accounts of $5,500
    
    
    160Inventory
    
    
    11,921Other current assets
    
    
    59,305Total current assets
    
    
    211,323Property and equipment, net
    
    
    69,288Total
    
    $
    280,611LIABILITIES AND SHAREHOLDERS DEFICIENCYCurrent liabilities:Current portion of convertible notes payable to shareholder
    
    $
    138,215Advance from related party
    
    
    85,000Accounts payable
    
    
    109,903Accrued expenses
    
    
    339,769Interest payable
    
    
    2,931Total current liabilities
    
    
    675,818Convertible notes payable to shareholder, net of current portion
    
    
    48,227Total liabilities
    
    
    724,045Commitments and contingenciesShareholders deficiency:Preferred stock, no par value, 4,250,000 shares authorized,
no shares issued or outstandingSeries A convertible preferred stock, no par value, 750,000 shares
authorized, no shares issued or outstandingCommon stock, no par value, 20,000,000 shares authorized,
2,280,368 shares issued and outstanding
    
    
    3,728,296Accumulated deficit
    
    
    (4,171,730
    )Total shareholders deficiency
    
    
    (443,434
    )Total
    
    $
    280,611
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PLANET TECHNOLOGIES, INC.
 
 CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
 Three months ended June 30,
    
    
    Six months ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Sales
    
    $
    220,735
    
    
    $
    339,176
    
    
    $
    442,261
    
    
    $
    720,438Cost of sales
    
    
    85,582
    
    
    
    105,880
    
    
    
    161,087
    
    
    
    251,895Gross profit
    
    
    135,153
    
    
    
    233,296
    
    
    
    281,174
    
    
    
    468,543Operating expenses:Selling
    
    
    166,724
    
    
    
    168,292
    
    
    
    327,918
    
    
    
    340,050General and administrative
    
    
    191,026
    
    
    
    208,898
    
    
    
    410,011
    
    
    
    458,870Total operating expenses
    
    
    357,750
    
    
    
    377,190
    
    
    
    737,929
    
    
    
    798,920Loss from operations
    
    
    (222,597
    )
    
    
    (143,894
    )
    
    
    (456,755
    )
    
    
    (330,377
    )Other expenses
    
    
    (1,354
    )
    
    
    (3,703
    )
    
    
    (3,303
    )
    
    
    (7,544
    )Interest expense
    
    
    (4,054
    )
    
    
    (52,605
    )
    
    
    (8,976
    )
    
    
    (104,391
    )Net loss
    
    $
    (228,005
    )
    
    $
    (200,202
    )
    
    $
    (469,034
    )
    
    $
    (442,312
    )Net loss per share, basic and diluted
    
    $
    (0.10
    )
    
    $
    (0.12
    )
    
    $
    (0.21
    )
    
    $
    (0.27
    )Weighted average shares used in
computing net loss per share  basic and
diluted
    
    
    2,214,427
    
    
    
    1,661,428
    
    
    
    2,187,344
    
    
    
    1,658,631
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PLANET TECHNOLOGIES, INC.
 
 CONDENSED STATEMENT OF SHAREHOLDERS DEFICIENCY (UNAUDITED)
 Six Months Ended June 30, 2005
 Common Stock
    
    
    Accumulated
    
    
    TotalShares
    
    
    Amount
    
    
    DeficitBalance at January 1,
2005
    
    
    2,068,361
    
    
    $
    3,198,296
    
    
    $
    (3,702,696
    )
    
    $
    (504,400
    )Issuance of common
stock for cash
    
    
    212,007
    
    
    
    530,000
    
    
    
    
    
    
    
    530,000Net loss
    
    
    
    
    
    
    
    
    
    
    (469,034
    )
    
    
    (469,034
    )Balance at June 30, 2005
    
    
    2,280,368
    
    
    $
    3,728,296
    
    
    $
    (4,171,730
    )
    
    $
    (443,434
    )
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PLANET TECHNOLOGIES, INC.
 
 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Six Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2004Operating activities:Net loss
    
    $
    (469,034
    )
    
    $
    (442,312
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    31,782
    
    
    
    46,856Changes in operating assets and liabilities:Accounts receivable
    
    
    2,916
    
    
    
    (602
    )Inventory
    
    
    7,091
    
    
    
    62,260Other assets
    
    
    (4,444
    )
    
    
    (24,085
    )Interest payable
    
    
    (5,612
    )
    
    
    95,372Accounts payable
    
    
    (114,617
    )
    
    
    141,319Accrued expenses
    
    
    (13,994
    )
    
    
    55,905Net cash used in operating activities
    
    
    (565,912
    )
    
    
    (65,287
    )Investing activities:Proceeds from sale of property and equipment
    
    
    
    
    
    
    2,364Capitalized costs associated with purchase of a business
    
    
    (32,759
    )Net cash provided by (used in) investing activities
    
    
    (32,759
    )
    
    
    2,364Financing activities:Advance from related party
    
    
    
    
    
    
    70,000Repayments of advances to related party
    
    
    (100,000
    )Principal payment on notes payable
    
    
    
    
    
    
    (162,219
    )Principal payments on convertible notes payable to shareholder
    
    
    (66,315
    )Proceeds from issuance of investors notes payable
    
    
    
    
    
    
    75,000Proceeds from stock sales
    
    
    530,000Net cash provided by (used in) financing activities
    
    
    363,685
    
    
    
    (17,219
    )Net decrease in cash and cash equivalents
    
    
    (234,986
    )
    
    
    (80,142
    )Cash and cash equivalents, beginning of period
    
    
    374,923
    
    
    
    128,005Cash and cash equivalents, end of period
    
    $
    139,937
    
    
    $
    47,863Supplementary disclosure of cash flow data:Cash paid for interest
    
    $
    14,588
    
    
    $
    7,624
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PLANET TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 1. Basis of Presentation
   2. Liquidity and Capital Resources
   -6-




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PLANET TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 Determining Whether a Nonmonetary Transaction Involves
Receipt of Productive Assets or of a Business
    www.sec.gov
 3. Loss Per Share
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PLANET TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
  4. Stock-Based Compensation
    th
 th
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PLANET TECHNOLOGIES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
  Three Months Ended June 30
    
    
    Six Months Ended June 302005
    
    
    2004
    
    
    2005
    
    
    2004Net loss, as reported
    
    $
    (228,005
    )
    
    $
    (200,202
    )
    
    $
    (469,034
    )
    
    $
    (442,312
    )Stock-based employee compensation expense
assuming a fair value based method had
been used for all awards
    
    
    (46,000
    )
    
    
    (11,447
    )
    
    
    (92,000
    )
    
    
    (22,894
    )Net loss, pro forma
    
    $
    (274,005
    )
    
    $
    (211,649
    )
    
    $
    (561,034
    )
    
    $
    (465,206
    )Basic net loss per share, as reported
    
    $
    (.10
    )
    
    $
    (0.12
    )
    
    $
    (0.21
    )
    
    $
    (0.27
    )Basic net loss per share, pro forma
    
    $
    (0.12
    )
    
    $
    (0.13
    )
    
    $
    (0.26
    )
    
    $
    (0.28
    )
  5. Operating lease
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PART 1  FINANCIAL INFORMATION
 
 Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations
 Planet Technologies, Inc.
 Except for the historical information contained herein, the discussion in this report contains
forward-looking statements that involve certain risks and uncertainties. The Companys actual
results could differ materially from those discussed in this report. Factors that could cause or
contribute to such differences include, but are not limited to those discussed below and in the
Companys Form 10-KSB for the fiscal year ended December 31, 2004.
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PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations
 Planet Technologies, Inc.
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PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations
 Planet Technologies, Inc.
        www.sec.gov
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PART 1  FINANCIAL INFORMATION
 Planet Technologies, Inc.
 
    
 PART II  OTHER INFORMATION
 
   
   
   
   
   
   
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Planet Technologies, Inc.
  
   Date: August 3, 2005
    
    Planet Technologies, Inc./s/ Scott L. GlennScott L. Glenn
Chief Executive Officer/s/ Leslie WhiteLeslie White
Chief Financial Officer and
Chief Accounting Officer
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