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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
 For Quarterly Period Ended March 31, 2007
 o
    
    TRANSITION REPORT UNDER TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
 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.)96 Danbury Road, Ridgefield, Connecticut
    
    06877(Address of principal executive offices)
    
    (Zip Code)(800) 255-3749(Issuers telephone number, including area code)
  þ o
  o þ
  Class
    

Outstanding at May 14, 2007Common Stock, no par value
    
    
    3,986,368




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##### 



Page No.PART I  Financial StatementsItem 1 Condensed Consolidated Balance Sheets March 31, 2007 (Unaudited) and December 31, 2006
    
    
    2Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2007 and 2006
    
    
    3Condensed Consolidated Statement of Shareholders Equity (Unaudited) Three Months Ended March 31, 2007
    
    
    4Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2007 and 2006
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    6Item 2 Managements Discussion and Analysis or Plan of Operation
    
    
    9Item 3 Controls and Procedures
    
    
    12PART II  Other InformationItem 1 Legal Proceedings
    
    
    13Item 2 Unregistered Sales of Equity 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
  1




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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31, 2007
    
    
    December 31, 2006Unaudited
    
    
    (Note 1)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    333,664
    
    
    $
    162,160Accounts receivable, less allowance for
doubtful accounts of $34,189 in 2007 and 2006
    
    
    162,781
    
    
    
    196,095Inventory, net
    
    
    302,652
    
    
    
    486,809Other current assets
    
    
    159,607
    
    
    
    86,809Total current assets
    
    
    958,704
    
    
    
    931,873Equipment and improvements, net
    
    
    25,108
    
    
    
    27,349Intangibles, net
    
    
    1,110,654
    
    
    
    1,176,904Goodwill
    
    
    1,363,025
    
    
    
    1,363,025Totals
    
    $
    3,457,491
    
    
    $
    3,499,151LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of notes payable to shareholder
    
    $
    500,000
    
    
    $
    500,000Accounts payable and accrued expenses
    
    
    1,342,983
    
    
    
    1,247,685Accrued warrant liability
    
    
    52,250
    
    
    
    49,908Total current liabilities
    
    
    1,895,233
    
    
    
    1,797,593Commitments
    
    
    
    
    
    
    Shareholders 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, 3,986,368 shares issued and
outstanding
    
    
    7,693,296
    
    
    
    7,693,296Additional paid-in capital
    
    
    498,521
    
    
    
    421,395Accumulated deficit
    
    
    (6,629,559
    )
    
    
    (6,413,133
    )Total shareholders equity
    
    
    1,562,258
    
    
    
    1,701,558Totals
    
    $
    3,457,491
    
    
    $
    3,499,151
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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 Three months ended March 31,2007
    
    
    2006Sales
    
    $
    2,076,143
    
    
    $
    2,317,828Cost of sales
    
    
    1,200,009
    
    
    
    1,385,931Gross profit
    
    
    876,134
    
    
    
    931,897Operating expenses:Selling
    
    
    333,588
    
    
    
    369,053General and administrative
    
    
    765,280
    
    
    
    895,047Total operating expenses
    
    
    1,098,868
    
    
    
    1,264,100Loss from operations
    
    
    (222,734
    )
    
    
    (332,203
    )Other income (expense)
    
    
    14,855
    
    
    
    (2,001
    )Interest expense
    
    
    (8,547
    )
    
    
    (1,504
    )Charge for change in derivative liability
    
    
    
    
    
    
    (1,888
    )Net loss
    
    $
    (216,426
    )
    
    $
    (337,596
    )Net loss per share, basic and diluted
    
    $
    (.05
    )
    
    $
    (.08
    )Weighted average shares used in computing
net loss per share  basic and diluted
    
    
    3,986,368
    
    
    
    3,986,368
  3




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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
 (UNAUDITED)
Three Months Ended March 31, 2007
 Common Stock
    
    
    Additional
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Paid-in Capital
    
    
    Deficit
    
    

    TotalBalance at January 1, 2007
    
    
    3,986,368
    
    
    $
    7,693,296
    
    
    $
    421,395
    
    
    $
    (6,413,133
    )
    
    $
    1,701,558Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    68,706
    
    
    
    
    
    
    
    68,706Stock options issued to
non-employee for services at
fair value of $2.07 per share
    
    
    
    
    
    
    
    
    
    
    8,420
    
    
    
    
    
    
    
    8,420Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (216,426
    )
    
    
    (216,426
    )Balance at March 31, 2007
    
    
    3,986,368
    
    
    $
    7,693,296
    
    
    $
    498,521
    
    
    $
    (6,629,559
    )
    
    $
    1,562,258
  4




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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 Three Months Ended March 31,2007
    
    
    2006Operating activities:Net loss
    
    $
    (216,426
    )
    
    $
    (337,596
    )Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation and amortization
    
    
    68,491
    
    
    
    82,347Non-cash charge for change in derivative liability
    
    
    
    
    
    
    1,888Non-cash change in fair value of warrant liability
    
    
    2,342
    
    
    
    (19,898
    )Non-cash charge for stock- based compensation
    
    
    68,706
    
    
    
    55,044Non-cash charge for change in fair value of options granted to consultant
    
    
    8,420
    
    
    
    3,419Changes in operating assets and liabilities:Accounts receivable
    
    
    33,314
    
    
    
    (10,774
    )Inventory
    
    
    184,157
    
    
    
    (43,871
    )Other current assets
    
    
    (72,798
    )
    
    
    (31,860
    )Accounts payable and accrued expenses
    
    
    95,298
    
    
    
    208,471Net cash provided by (used in) operating activities
    
    
    171,504
    
    
    
    (92,830
    )Financing activities:Payment of vendor promissory note
    
    
    
    
    
    
    (1,913
    )Principal payment on notes payable
    
    
    
    
    
    
    (34,787
    )Cash used in financing activities
    
    
    
    
    
    
    (36,700
    )Net increase (decrease) in cash and cash equivalents
    
    
    171,504
    
    
    
    (129,530
    )Cash and cash equivalents, beginning of period
    
    
    162,160
    
    
    
    436,844Cash and cash equivalents, end of period
    
    $
    333,664
    
    
    $
    307,314Supplementary disclosure of cash flow data:Cash paid for interest
    
    $
    
    
    
    $
    1,532
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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
   2. Going Concern
  3. Accounting Policies
 Revenue Recognition
  Warranty Reserve
  6




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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Inventory
  March 31,
    
    
    December 31,2007
    
    
    2006Raw materials
    
    $
    131,733
    
    
    $
    182,846Finished goods
    
    
    227,308
    
    
    
    361,219Totals
    
    
    359,041
    
    
    
    544,065Less reserve for obsolescence
    
    
    56,389
    
    
    
    57,256Totals
    
    $
    302,652
    
    
    $
    486,809
 Income Tax
  Loss Per Share
   4. Stock-Based Compensation
   7




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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 4. Stock-Based Compensation (concluded)
     WeightedAverageWeighted
    
    
    Remaining
    
    
    AggregateUnderlying
    
    
    Avg Exercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Life (years)
    
    
    ValueOutstanding, beginning of period
    
    
    569,613
    
    
    $
    2.86
    
    
    
    8.51
    
    
    $
    Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited/expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding, end of period
    
    
    569,613
    
    
    $
    2.86
    
    
    
    8.26
    
    
    $
    70,850Exercisable, end of period
    
    
    264,170
    
    
    $
    3.24
    
    
    
    8.27
    
    
    $
    
  8




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PLANET TECHNOLOGIES, INC. AND SUBSIDIARY
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 5. Notes payable to related party
  9




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PART 1  FINANCIAL INFORMATION
 
 Item 2  Managements Discussion and Analysis or Plan of Operation
 Planet Technologies, Inc. and Subsidiary
 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, 2006.
       Three months ended March 31, 2007 compared to three months ended March 31, 2006
   10




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PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis or Plan of Operation
 Planet Technologies, Inc. and Subsidiary
    Off Balance Sheet Arrangements
      Recent Accounting Pronouncements
  11




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PART 1  FINANCIAL INFORMATION
Item 2  Managements Discussion and Analysis or Plan of Operation
 Planet Technologies, Inc. and Subsidiary
    12




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PART 1  FINANCIAL INFORMATION
 
 Item 3  Controls and Procedures
 Planet Technologies, Inc. and Subsidiary
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  13




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PART II  OTHER INFORMATION
 Planet Technologies, Inc. and Subsidiary
 
   
   
   
   
   
     14




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Planet Technologies, Inc.
 
   Date: May 14, 2007
    Planet Technologies, Inc./s/ Edward J. SteubeEdward J. SteubeChief Executive Officer/s/ Francesca DiNotaFrancesca DiNotaChief Financial Officer and

Chief Accounting Officer 15