##### Table of Contents



UNITED STATES
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 AND EXCHANGE ACT OF 1934
 For Quarterly Period Ended March 31, 2004
 [   ]
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
 Commission File Number: 0-26804 PLANET POLYMER 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
    
    92131(Address of principal executive offices)
    
    (Zip Code)
 (619) 291-5694   Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 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
    
    [   ] NO
 Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date: Class
    
    Outstanding at March 31, 2004Common Stock, no par value
    
    
    6,257,884




---

\

INDEX  
 Page
No.PART I  Financial InformationItem 1
    
    Condensed Balance Sheet (Unaudited)
March 31, 2004
    
    
    2Condensed Statements of Operations (Unaudited)
Three Months Ended March 31, 2004 and 2003
    
    
    3Condensed Statement of Shareholders Equity (Unaudited)
Three Months Ended March 31, 2004
    
    
    4Condensed Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2004 and 2003
    
    
    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
    
    
    11PART
II  Other InformationItem 1
    
    Legal Proceedings
    
    
    11Item 2
    
    Changes in Securities
    
    
    11Item 3
    
    Defaults upon Senior Securities
    
    
    11Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    11Item 5
    
    Other Information
    
    
    11Item 6
    
    Exhibits and Reports on Form 8-K
    
    
    11SIGNATURES
    
    
    
    
    12EXHIBIT 31.1EXHIBIT 32.1




---



##### Table of Contents



PLANET POLYMER TECHNOLOGIES, INC.  
 CONDENSED BALANCE SHEET (UNAUDITED)
 March 31,2004ASSETSCurrent assets:Cash
    
    $
    44,320Note receivable
    
    
    152,387Prepaid expenses
    
    
    6,878Total current assets
    
    
    203,585Patents, trademarks and license agreements, net of accumulated amortization of $81,685
    
    
    149,651Deferred acquisition costs
    
    
    121,602Note Receivable
    
    
    22,800Total assets
    
    $
    497,638LIABILITIES AND SHAREHOLDERS EQUITYCurrent
liabilities - accounts payable
    
    $
    187,708Commitments and contingenciesShareholders equity:Preferred Stock, no par value
4,250,000 shares authorized,
no shares issued or outstanding
    
    
    Series A Convertible Preferred Stock, no par value
750,000 shares authorized,
no shares issued or outstanding
    
    
    Common Stock, no par value,
20,000,000 shares authorized,
6,257,884 shares issued and outstanding
    
    
    11,651,991Additional paid-in capital
    
    
    3,000,000Accumulated deficit
    
    
    (14,342,061
    )Total shareholders equity
    
    
    309,930Total liabilities and shareholders equity
    
    $
    497,638
 SEE NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 2




---



##### Table of Contents



PLANET POLYMER TECHNOLOGIES, INC.  
 CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
 Three months ended March 31,2004
    
    2003Revenues
    
    $
    57,444
    
    
    $
    155,620Operating expenses:Cost of revenues
    
    
    922
    
    
    
    1,221General and administrative
    
    
    60,150
    
    
    
    162,617Total operating expenses
    
    
    61,072
    
    
    
    163,838Loss from operations
    
    
    (3,628
    )
    
    
    (8,218
    )Other income, net
    
    
    1,183
    
    
    
    8,940Net income (loss) applicable to common shareholders
    
    $
    (2,445
    )
    
    $
    722Net income (loss) per share applicable to common shareholders (basic and diluted)
    
    $
    (0.00
    )
    
    $
    0.00Weighted average shares outstanding used in per share computations
    
    
    6,214,477
    
    
    
    9,207,884
 SEE NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 3




---



##### Table of Contents



PLANET POLYMER TECHNOLOGIES, INC.  
 CONDENSED STATEMENTS OF SHAREHOLDERS EQUITY (UNAUDITED)
  Common StockAdditional
    
    AccumulatedShares
    
    Amount
    
    Paid-in Capital
    
    Deficit
    
    TOTALBalance at January 1, 2004
    
    
    6,207,884
    
    
    $
    11,648,991
    
    
    $
    3,000,000
    
    
    $
    (14,339,616
    )
    
    $
    309,375Exercise of stock options
    
    
    50,000
    
    
    
    3,000
    
    
    
    
    
    
    
    
    
    
    
    3,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,445
    )
    
    
    (2,445
    )Balance at March 31, 2004
    
    
    6,257,884
    
    
    $
    11,651,991
    
    
    $
    3,000,000
    
    
    $
    (14,342,061
    )
    
    $
    309,930
 4




---



##### Table of Contents



PLANET POLYMER TECHNOLOGIES, INC.  
 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Three months ended March 31,2004
    
    2003Cash flows from operating activities:Net income (loss)
    
    $
    (2,445
    )
    
    $
    722Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:Depreciation and amortization
    
    
    3,689
    
    
    
    1,194Bad debts
    
    
    2,881
    
    
    
    Gain on sale of property and equipment
    
    
    
    
    
    
    (1,300
    )Changes in assets and liabilities:Accounts receivable
    
    
    13,626
    
    
    
    (129,632
    )Prepaid expenses and other assets
    
    
    (2,998
    )
    
    
    3,327Accounts payable
    
    
    119,208
    
    
    
    82,105Accrued expenses
    
    
    
    
    
    
    (2,417
    )Net cash provided by (used in) operating activities
    
    
    133,961
    
    
    
    (46,001
    )Cash flows from investing activities:Proceeds from the sale of property and equipment
    
    
    
    
    
    
    1,300Proceeds from notes receivable
    
    
    10,417
    
    
    
    39,872Cost of patents and other assets
    
    
    
    
    
    
    3,690Deferred acquisition costs
    
    
    (121,602
    )
    
    
    Net cash provided by (used in) investing activities
    
    
    (111,185
    )
    
    
    44,862Cash flows
from financing activities - Proceeds from exercise of stock options
    
    
    3,000
    
    
    
    Net increase (decrease) in cash
    
    
    25,776
    
    
    
    (1,139
    )Cash at beginning of period
    
    
    18,544
    
    
    
    14,781Cash at end of period
    
    $
    44,320
    
    
    $
    13,642
 SEE NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS 5




---



##### Table of Contents



Planet Polymer Technologies, Inc. 
 NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS 1. Basis of Presentation In managements opinion, the accompanying unaudited financial statements
of Planet Polymer Technologies, Inc. (Planet or the Company) have been
prepared in accordance with the interim reporting requirements of Form 10-QSB,
pursuant to the rules and regulations of the Securities and Exchange
Commission. However, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. In managements opinion, all adjustments (consisting of only normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 2004, are not
necessarily indicative of results that may be expected for the year ending
December 31, 2004. For additional information, refer to the Companys
financial statements and notes thereto for the year ended December 31, 2003,
contained in the Companys Form 10-KSB for the fiscal year ended December 31,
2003. Certain prior period amounts have been reclassified to conform to the
current period presentation. 2. Liquidity and Capital Resources The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the ordinary course of business. For the three months ended
March 31, 2004 the Company incurred a loss of $2,445. As of March 31, 2004,
the Company had an accumulated deficit of $14,342,061. These matters raise
substantial doubt about the Companys ability to continue as a going concern.
The Company does not believe that its existing sources of liquidity and
anticipated revenue will be adequate to satisfy the Companys projected working
capital and other cash requirements through September 30, 2004, to continue as
a public reporting company without raising additional capital or consummating a
merger (see below). For the three months ended March 31, 2004 the Company had
no employees and did not conduct any research or development. The Companys
future capital requirements will be dependent upon many factors, including, but
not limited to, costs associated with the continued support of licenses on the
Companys proprietary polymer materials, costs associated with the enforcement
of the Companys patents, and costs associated with the administration of the
Company. Although possible, it is unlikely that the Company will be able to
generate positive cash flow and show a profit through December 31, 2004. The Company, on March 18, 2004 entered into an Asset Purchase Agreement
(Agreement) with Allergy Free, LLC, a California limited liability company
(Allergy Free). Allergy Free is engaged in the business of designing,
manufacturing, selling and distributing consumer products for use by allergy
sensitive persons. If the acquisition is approved by Planets shareholders and
completed as contemplated by the Agreement, Planet, through personnel and
facilities acquired from Allergy Free, will continue Allergy Frees business
activities and seek to incorporate Planets polymer technologies and know-how
into developing new products for the Allergy Free business (Proposed
Acquisition). Investors are encouraged to review our report on Form 8-K filed
with the Securities and Exchange Commission on March 23, 2004, which discusses
more thoroughly the terms of the proposed acquisition and which is available
through EDGAR at www.sec.gov, and when available, the Companys Proxy Statement
which will also be available through EDGAR. 6




---



##### Table of Contents



Planet Polymer Technologies, Inc. NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 3. Earnings (Loss) Per Share Earnings (loss) per share is computed using the weighted average number of
shares of common stock outstanding and is presented for basic and diluted
earnings (loss) per share. Basic earnings (loss) per share is computed by
dividing net income (loss) by the weighted average number of common shares
outstanding for the period. Diluted earnings per share is computed by dividing
net income by the weighted average number of common shares outstanding during
the period increased to include, if dilutive, the number of additional common
shares that would have been outstanding if the potential common shares had been
issued. Dilutive potential common shares consist of the incremental common
shares issuable upon conversion of the convertible preferred stock (using the
if converted method) and exercise of stock options and warrants (using the
treasury stock method) for all periods. The Company has excluded all convertible preferred stock and outstanding
stock options and warrants from the calculation of diluted loss per share for
the three months ended March 31, 2004 and March 31, 2003, because all such
securities are either anti-dilutive for those periods or their impact was
insignificant. Accordingly, diluted loss per share equals basic loss per
share. The total number of potential common shares excluded from the
calculation of diluted loss per share for the three months ended March 31, 2004
was 1,316,625. 4. Income Taxes As the ultimate realization of the potential benefits of the Companys net
operating loss carryforwards is considered unlikely by management, the Company
has offset the deferred tax assets attributable to those potential benefits
through valuation allowances and, accordingly, the Company did not recognize
any benefit for income taxes in the accompanying condensed statements of
operations to offset its pre-tax losses. 5. Stock-Based Compensation As explained in Note 10 in the Form 10-KSB, the Company accounts for stock
options granted to employees based on their intrinsic values under the
recognition and measurement principles of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and Related Interpretations, and has adopted the
disclosure-only provisions of Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation, and the provisions
of Statement of Financial Accounting Standards No. 148 Accounting for
Stock-Based Compensation  Transition and Disclosure-an Amendment of FASB
Statement No. 123. Since the exercise price of all of the options granted by
the Company to its employees has been equal to or greater than fair value, the
Company has not recognized any earned or unearned compensation costs in its
financial statements in connection with those options. The Companys
historical net income (loss) per share and pro forma net income (loss) per
share for the three months ended March 31, 2004, and March 31, 2003, assuming
compensation cost had been determined based on the fair value of all options at
the respective dates of grant determined using a pricing model consistent with
the provisions of SFAS 123 are set forth below: 7




---



##### Table of Contents



Planet Polymer Technologies, Inc. NOTES TO UNAUDITED CONDENSED
FINANCIAL STATEMENTS Three Months Ended March 312004
    
    2003Net income (loss), as reported
    
    $
    (2,445
    )
    
    $
    722Stock-based employee compensation expense
assuming a fair value based method had been
used for all awards
    
    
    (11,447
    )
    
    
    (13,400
    )Net income (loss), pro forma
    
    $
    (13,892
    )
    
    $
    (12,678
    )Basic earnings (loss) per share, as reported
    
    $
    (0.00
    )
    
    $
    (0.00
    )Basic earnings (loss) per share, pro forma
    
    $
    (0.00
    )
    
    $
    (0.00
    )
 6. Ryer Enterprises, LLC Forbearance Agreement During the three months ended March 31, 2004, the Company agreed to
forbear the February and March installment payments due from Ryer Enterprises
in exchange for a two (2) month extension of the installment payments plus an
additional installment payment of $4,600. Subsequent to March 31, 2004, the
Company has received payments for the April and May 2004 installments due from
Ryer Enterprises. 8




---



##### Table of Contents



PART 1  FINANCIAL INFORMATION 
 Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations
 Planet Polymer 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, 2003. OVERVIEW Since Planet Polymer Technologies, Inc. (Planet or the Company) was
founded in 1991 substantially all of the Companys resources have been devoted
to the development and commercialization of its technologies and products.
This has included the expenditure of funds to develop the Companys corporate
infrastructure and support the Companys research and development of products,
marketing, licensing of products to third parties and corporate administration.
For the three month period ended March 31, 2004 the Company did not engage in
any research and development and did not incur any employee expense. Planet had an accumulated deficit as of March 31, 2004 of approximately
$14.3 million. The Companys only anticipated source of revenues is from
royalties from BASF, Alltech, and Ryer Enterprises, LLC, which are not expected
to be sufficient to result in a net profit through December 31, 2004. RESULTS OF OPERATIONS The net loss for the three months ended March 31, 2004, was $2,445
compared to a net income of $722 for the three month period ended March 31,
2003. The Companys revenues decreased to $57,444 for the three months ended
March 31, 2004 from $155,620 for the same period in 2003 as a result of the
Company having received a one time payment of $130,000 in license revenue from
Agway, Inc. in the first quarter of 2003. Effective January 15, 2004, Agway entered into an agreement to sell all of
the assets of its FreshSeal® business, which include the fruit/produce patent
rights assigned by the Company, to BASF. Also, in January 2004, Agway sold all
of its right and interest to Optigen® to Alltech. Management cannot assure
that the Company will receive significant, if any, royalties and monies under
these Sale and Licensing Agreements. The Company is hopeful BASF and Alltech
will continue to commercialize the intellectual property and provide future
royalty revenue streams to the Company. In April 2003 the Company recovered the assets sold to Ryer Industries,
LLC, and by agreement dated as of May 1, 2003, resold the assets to Ryer
Enterprises, LLC (Ryer Enterprises), a newly formed entity which intends to
continue the commercial employment of the AQUAMIM® products. Pursuant to said
agreement, the Company has licensed to Ryer Enterprises, the patent rights
relating to the AQUAMIM® products for royalties which are payable monthly
forty-five days after the close of each month for 8 years after which Planet
has agreed to transfer the patents to Ryer Enterprises, provided it is not in
default. Subsequent to December 31, 2003, the Company agreed to forbear the
February and March royalty payment from Ryer Enterprises in exchange for a two
(2) month extension to the monthly installment payments plus one additional
installment payment of $4,600. Subsequent to March 31, 2004, 9




---



##### Table of Contents



PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations Planet Polymer Technologies, Inc. the Company has received monthly installment payments for April and May
2004, paid for Ryer Enterprises by a third party interested in acquiring the
assets and liabilities of Ryer Enterprises, including those rights of Ryer
Enterprises to the AQUAMIM® products. Cost of revenues decreased to $922 for the three months ended March 31,
2004, from $1,221 for the same period in 2003, reflecting the decrease in
revenues. Total operating expenses decreased to $61,072 for the three months ended
March 31, 2004, from $163,838 for the same period in 2003. This decrease was
primarily attributable to higher legal expenses incurred in the three months
ended March 31, 2003, due to the bankruptcy of Agway, Inc., the restructuring
of agreements with Agway, and the default by Ryer Industries, LLC, in its
remaining obligations to purchase the Companys AQUAMIM® assets. Similar to the first quarter of 2003, the Company incurred no research and
development expenses. Unless and until the Proposed Acquisition is completed,
the Company anticipates limited or no further research and development
activities on new products. Other income, net decreased from $8,940 for the three months
ended March 31, 2003, to $1,183 for the same period in 2004, which primarily
reflects interest earned on cash balances. LIQUIDITY AND CAPITAL RESOURCES The Company had net cash provided by operating activities of $12,359 for
the three months ended March 31, 2004. The Company does not believe that its existing sources of liquidity and
anticipated revenue will be adequate to satisfy the Companys projected working
capital and other cash requirements through September 2004 to continue
operations as a public reporting company without raising additional capital or
consummating a merger (see below). The Company, on March 18, 2004 entered into an Asset Purchase Agreement
(Agreement) with Allergy Free, LLC, a California limited liability company
(Allergy Free). Allergy Free is engaged in the business of designing,
manufacturing, selling and distributing consumer products for use by allergy
sensitive persons. If the acquisition is approved by Planets shareholders and
completed as contemplated by the Agreement, Planet, through personnel and
facilities acquired from Allergy Free, will continue Allergy Frees business
activities and seek to incorporate Planets polymer technologies and know-how
into developing new products for the Allergy Free business (Proposed
Acquisition). Investors are encouraged to review our report on Form 8-K filed
with the Securities and Exchange Commission on March 23, 2004, which discusses
more thoroughly the terms of the proposed acquisition and which is available
through EDGAR at www.sec.gov, and when available, the Companys Proxy Statement
which will also be available through EDGAR. If the transaction is completed, immediately prior to the closing, Planet
will distribute to a trustee for the benefit of Planet shareholders of record
as of April 15, 2004 (Trust), the right to receive all 10




---



##### Table of Contents



PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations Planet Polymer Technologies, Inc. royalties payable to Planet pursuant to the Sale and Licensing Agreements
between Planet and Agway, Inc., relating to Planets FreshSeal® and Optigen®
technology and the certain Purchase, Sale and License Agreement between Planet
and Ryer Enterprises, LLC, relating to Planets AQUAMIM® technology. 
 ITEM 3. CONTROLS AND PROCEDURES The Companys management, with the participation of the Companys Chief
Executive Officer who is also the Chief Financial Officer, has evaluated the
effectiveness of the Companys disclosure controls and procedures as of March
31, 2004. Based on this evaluation, the Companys Chief Executive Officer and
Chief Financial Officer concluded that the Companys disclosure controls and
procedures are effective for gathering, analyzing and disclosing the
information the Company is required to disclose in the reports it files under
the Securities and Exchange Act of 1934, within the time periods specified in
the Securities and Exchange Commissions rules and forms. During the fiscal three months ended March 31, 2004, there were no
significant changes in the Companys internal control over financial reporting
that materially affected, or is reasonably likely to materially affect, the
Companys internal control over financial reporting. 
 PART II  OTHER INFORMATION 
 Item 1  Legal Proceedings: None 
 Item 2  Changes in Securities: None 
 Item 3  Defaults upon Senior Securities: None 
 Item 4  Submission of Matters to a Vote of Security Holders: None 
 Item 5  Other Information: None 
 Item 6  Exhibits and Reports on Form 8-K  (a)
    
    Exhibits 11




---



##### Table of Contents



PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis of Financial
Condition and Results of Operations Planet Polymer Technologies, Inc. Exhibit 31.1 Certification of Principal Executive Officer and
Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act
of 2002. Exhibit 32.1 Certification of Principal Executive Officer and
Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act
of 2002.  (b)
    
    Reports on Form 8-K Form 8-K filed March 30, 2004 which attached the Companys news release
dated March 19, 2004, as Exhibit 99.4 describing the Companys Year-End 2003
revenues and expenses, and also attached the Asset Purchase Agreement entered
into by the Company and Allergy Free on March 18, 2004 as Exhibit 2.1. 
 SIGNATURES In accordance with the requirements of Exchange Act, the Registrant has duly
caused this report on Form 10-QSB to be signed on its behalf by the
undersigned, thereunto duly authorized. Date: May 13, 2004
    
    Planet Polymer Technologies, Inc./s/ H. M. BusbyH. M. BusbyChief Executive Officer(On behalf of Registrant and as Registrants Principal
Financial and Accounting Officer)
 12