UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON, D.C.
20549
  FORM
10-KSB
  (Mark
One)
  ANNUAL REPORT UNDER SECTION 13 or
15(d) OF THE SECURITIES EXCHANGE ACT OF
 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007.
  TRANSITION REPORT UNDER SECTION 13
or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR
THE TRANSITION PERIOD FROM ________ TO ________
  COMMISSION
FILE NO. 000-31763
  DNC
MULTIMEDIA
CORP.
 (Exact
name of issuer as specified in its charter)
 
 GEORGIA
              58-2466623(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)11050
      Regal Forest Drive, Suwanee, Georgia
              30024(Address
      of principal executive offices)
              (Zip
      Code)
  Registrant's
telephone number, including area code: (770) 476-7903
  Securities
registered under
 Section
12(b) of the Exchange Act: NONE.
  
  Securities
registered under
 Section
12(g) of the Exchange Act: COMMON STOCK, PAR VALUE $0.001 PER
SHARE.
 (Title of
class)
  Check
whether the issuer is not required to file reports pursuant to Section
13
 or 15(d)
of the Exchange Act. 
  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 twelve months (or 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. Yes  No 
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. 
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 Yes  No

  State
issuer's revenues for its most recent fiscal year: $116,839
 
 As of
July 1, 2008, the aggregate market value of the issuer's common stock held by
non-affiliates was $95,346.80 (based on the closing price of $0.0009 per share
of common stock on July 1, 2008, as reported by the Over-the-Counter Bulletin
Board).
  State the
number of shares outstanding of each of the issuer's classes of common stock as
of July 1, 2008: 119,131,763
  Documents
incorporated by reference: None.
  2
  PLANETLINK COMMUNICATIONS, INC.
 FORM
10-KSB
 
 TABLE
OF CONTENTS
  PAGE
      NO.PART I
              
              4ITEM
      1.
              DESCRIPTION OF BUSINESS.
              5ITEM
      2.
              DESCRIPTION OF PROPERTY.
              14ITEM
      3.
              LEGAL PROCEEDINGS.
              15ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITYHOLDERS.
              15PART II
              
              15ITEM
      5.
              MARKET
      FOR COMMON EQUITY AND RELATEDSTOCKHOLDER
      MATTERS.
              15ITEM
      6.
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OFOPERATION.
              17ITEM
      7.
              FINANCIAL STATEMENTS.
              F1-23ITEM
      8.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTSON
      ACCOUNTING AND FINANCIAL DISCLOSURE.
              28ITEM
      8A.
              CONTROLS AND PROCEDURES.
              29ITEM
      8B.
              OTHER INFORMATION.
              30PART III
              
              30ITEM
      9.
              DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS ANDCONTROL
      PERSONS AND CORPORATE GOVERNANCE;COMPLIANCE
      WITH SECTION 16(a) OF THE EXCHANGE ACT.
              30ITEM
      10.
              EXECUTIVE COMPENSATION.
              35ITEM
      11.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERSAND
      MANAGEMENT AND RELATED STOCKHOLDERMATTERS.
              36ITEM
      12.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS,AND
      DIRECTOR INDEPENDENCE.
              37ITEM
      13.
              EXHIBITS.
              39ITEM
      14.
              PRINCIPAL ACCOUNTANT FEES AND SERVICES.
              40
  3
 Table of Contents
  PART I
  FORWARD
LOOKING STATEMENTS DISCLAIMER
 
 This
report contains forward-looking statements that involve risks and uncertainties.
We generally use words such as "believe," "may," "could," "will," "intend,"
"expect," "anticipate," "plan," and similar expressions to identify
forward-looking statements. You should not place undue reliance on these
forward-looking statements. Our actual results could differ materially from
those anticipated in the forward-looking statements for many reasons, including
the risks described below in our “Risk Factor” section, elsewhere in this report
and in our SEC filings from time to time. Although we believe the expectations
reflected in the forward-looking statements are reasonable, they relate only to
events as of the date on which the statements are made, and our future results,
levels of activity, performance or achievements may not meet these expectations.
We do not intend to update any of the forward-looking statements after the date
of this document to conform these statements to actual results or to changes in
our expectations, except as required by law.
  ITEM 1. DESCRIPTION OF BUSINESS
  HISTORICAL
DEVELOPMENT
  The
Company was incorporated in May 1999 under the laws of the State of Georgia for
the purpose of providing international telecommunications and wireless services.
In 2004, the Company phased out of the satellite television services business.
The Company developed the TransTRAK product line that utilizes Global
Positioning Systems ("GPS") technology for vehicle tracking and fleet
management. TransTRAK is a web-based turnkey solution for real-time, mobile
asset management.
  4
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  In April
2004, the Company formed a wholly-owned subsidiary, PlanetTRAKS, for the purpose
of introducing TransTRAK to the satellite-based mobile asset management market.
In the fourth quarter of 2006, the Company determined to wind down its
PlanetTRAKS operations due to lack of capital. As a result, at June 30, 2007,
the Company was no longer seeking new accounts.  As of September 30,
2007, the company discontinued the service to its existing portfolio of
accounts.
 
 In
September 2006, the Company formed a new subsidiary, Coin Wash Associates, Inc.,
a Florida corporation, in order to diversify its business portfolio and enter
the coin laundry market that has traditionally had very strong cash flow.
Coin Wash Associates was incorporated to acquire coin laundry facilities in
the southeastern part of the United States. The acquisition of Heavenly Suds, a
coin laundry facility in Oakland Park, Florida was accomplished with cash. The
transaction closed on November 15, 2006. In an agreement dated August 20, 2007,
the Company agreed to transfer to Sean Fulda, a majority shareholder of the
Company, all rights in Coin Wash Associates, Inc., including all of the assets
and liabilities, with an effective date of April 1, 2007, in exchange for a
general release from all claims or potential claims Mr. Fulda may have had
against the Company.
  On
October 19, 2007, the Company’s subsidiary, PlanetTRAKS acquired Pluginz Inc., a
Florida corporation, and Plugin Stores, Inc., a Delaware corporation. Pluginz,
LLC (the “Seller”), sold 100% of the capital stock in each of the companies,
Pluginz, Inc. and Plugin Stores, Inc. in exchange for: (a) a promissory note for
$75,000.00 to be paid to the Seller within 180 days of the Closing and (b)
1,700,000,000 shares of the Registrant’s common stock.
 
 On
November 27, 2007, the Company’s subsidiary, PlanetTRAKS acquired DnC
Multimedia, Inc., a Delaware corporation (“DnC”), Pluginz, LLC (the “Seller”),
sold 100% of the capital stock in DnC in exchange for 250,000,000 shares of the
Registrant’s common stock and 1,250,000 shares of the Registrant’s Series A
preferred stock.  Pursuant to the agreement M. Dewey Bain continued to
serve as a member of the Registrant’s board of directors.  Upon the
closing, the Registrant appointed Hanseo Park, Chris Piercy, Robert Lott and
Robert Lau to the Registrant’s board of directors.  Chris Piercy was
appointed to be the Registrant’s chairman of the board.
 
 INDUSTRY
OVERVIEW
  The
Company is in the consumer electronics industry, focused primarily on portable
devices, which represents one of the most competitive media technology
markets.
  5
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  Portable
devices have largely fallen into one of two categories for the last decade:
cellular phones and music players (mp3).  Within the 15-35 year old
demographic, both cellular phones and mp3 players have transitioned from a
nice-to-have to a need-to-have product.  This demand has partially
fueled a trend toward incorporating multiple functions within a single device,
thereby merging the competitive landscapes for cellular phones and mp3 players.
The Apple iPhone is the dominant example of this trend.  However, for
several years many cellular phones have functioned as mp3 players, among other
things; and there have been a number of products directly competing with the
iPhone since its initial launch.
 
 In spite
of the trend toward cellular phone-media player convergence, it is likely that
the markets for separate devices will remain strong for several
reasons:  1) storage capacity in a multi-media phone is relatively
limited to that of a non-phone media player; 2) form factor options vary between
phones and players; and 3) some cellular phone market segments prefer to keep
their phone and media devices separate, e.g. business consumers who may prefer
Blackberry type devices and may not want their personal media stored on a
company-owned phone.  The Apple product line is a perfect example of
this.  Apple has continued to offer a variety of versions of the iPod,
even though its iPhone is generally capable of replacing the iPod.
  OUR
PRODUCTS
  In
January 2008 the Company unveiled its portable media player (PMP) that uses
Microsoft Sideshowä
technology (our “Sideshow PMP”).  DnC developed this product under
license agreements with nVidia and Microsoft to develop portable devices enabled
to access the new Sideshow feature in PCs that run Microsoft’s Windows
Vista.  Sideshow enables files on a Windows Vista-enabled PC to be
accessed by a portable device via Bluetooth even when the PC is turned
off.
 
 DNC
Multimedia plans to offer three models of Mobile Digital TV
devices.  The first model has been launched in the Japan market by our
channel partner, Trywin, and offers support for the Japanese 1seg broadcast
standard. This device supports ISDB-T (1seg) Standard Mobile TV, Built-in AM/FM
Radio, Audio/Video Player & Photo Viewer, and features a 2.8” WQVGA screen,
SD, and USB capability. The second model will support DVB-T Standard Mobile TV,
Built-in FM Radio, Audio/Video Player & Photo Viewer, Touch Screen, USB
Support, and features a 2.7” WQVGA. The third device will offer PDA Function
based on Windows CE 6.0, T-DMB Standard Mobile TV, Built-in FM Radio, an
Audio/Video Player & Photo Viewer, SD, USB Support, and features a large
4.3” WQVGA Touch Screen display.
 
 DNC
Multimedia plans to offer three models of GPS navigation devices. The first
model is a High Quality Navigation device that offers a high quality 4.3” TFT
LCD screen and supports PIP (Navigation + Multi-media), AV in/out (Support Dual
Monitor Out), Music/Video Player, and Photo/Text Viewer and Windows
Applications. The second model is a cost effective lower cost navigation device
that offers a 3.5” TFT LCD screen and supports Navigation or Multi-media
playback, Music / Video Player, and Photo / Text Viewer and Windows Applications
support. The 3rd Model will be a High Quality Navigation and Mobile TV device.
This product offers a high quality 4.3” TFT LCD screen and supports PIP
(Navigation + Multi-media), AV in/out (Support Dual Monitor Out), Music/Video
Player, and Photo/Text Viewer and Windows Applications and additionally supports
Mobile TV (T-DMB, DVB-T (H), ISDB-T (1seg) standard).
  6
 Table of Contents
  DNC
Multimedia offers a Hearing Aid MP3 player with a patented “WiseAudio” feature
for enhanced noise cancellation and audio quality. The device offers a“Sonic
Gatherer” function that gather sound energy and Amplifies and Modulates sounds
for the wearer. The product features support for Noise reduction Filter,
Built-in FM Radio (Option), Audio/Video Player and Photo Viewer, "WiseAudio"
Technology Support that allows Sound tuning technology based on the individual’s
audibility through Simple and Easy Self Test Function. This allows for maximal
hearing ability while protecting the individual’s hearing. The product will be
focused on the elderly market and enterprise customers such as telephone call
centers.
 
 The
Company’s subsidiary, Pluginz, business provides online electronic software
distribution of high-end after market components (mostly software) for the film,
broadcast and graphic design industries, and serves a community of digital
artists that consists of over 12,000 registered members.
  STRATEGIC
ALLIANCES
  Our
operations depend largely upon strategic alliances with three
companies.
  nVIDIA
provides the chipset for our Sideshow PMP that enables wireless interaction with
a computer using Microsoft’s Windows Vista operating system.  nVIDIA
also provides a software development kit (SDK) with which the Company was able
to develop its Sideshow PMP.
  Microsoft
provides the Sideshow technology on which our Sideshow PMP is based. Our current
agreement with Microsoft permits the Company to develop portable devices using
the Microsoft Sideshow technology.
  Trywin
Co., Ltd. is our distributor for the Japan markets. We have a distribution
agreement with Trywin for the sale of our 1-Seg portable television. The current
agreement estimates sales of 30,000 units in 2008.
  7
 Table of Contents
  CUSTOMERS
 
 For our
Sideshow PMP and other consumer electronic products, the Company is targeting
retail chain stores such and established consumer brands with whom we can serve
as an OEM (original equipment manufacturer) partner.  The 1-Seg
portable television product is exclusive to the Japanese market because of the
bandwidth requirements of the device.  The Company is targeting the
Japanese market through its distribution partner, Trywin Co., Ltd.
 
 Purchasers
of products sold through the Pluginz websites are generally independent digital
artists or companies in the business of creating digital media content, such as
film, television, graphic design, video games, websites and music.
  SALES
AND MARKETING
  Our
hardware business associated with the Korean operations has engaged primarily in
business-to-business sales.  As an OEM partner to brand name
companies, the Company has not had to engage in consumer level marketing
campaigns.  Our sales and marketing activities are primarily focused
on selling our products to brand name consumer electronics companies, who will
then sell the products in the retail market under their brand name.
 
 Marketing
for the Pluginz business is largely based on the application of search engine
optimization (SEO) techniques to attract more customers to our websites based on
key word searches at leading search engines, such as Google and
Yahoo.  The Pluginz business also uses its regular newsletters to
offer discounts and promotions to our existing registered members.
 
 EMPLOYEES
 
 As of
December 31, 2008, the Company had two full-time employees, and had retained
fourteen independent contractors on a full time basis.
  COMPETITION
 
 The
market for mp3 and other portable media products is competitive. Existing and
potential competitors can be grouped as follows:
  8
 Table of Contents
  1.
Companies with purchasing power on memory chips - Because of their ability to
purchase memory chips and other components in large volumes, they can have
competitive prices relative to the rest of the industry (Examples: Samsung
Electronics, SanDisk, Dell, and Apple).
 
 2.
Contents providers - Content providers such as Napster have the ability to
aggregate music (and other media) offerings to deliver over the
Internet.  (Examples: Napster, Yahoo, www.raphsody.com, Apple
iTunes)
 
 3.
Traditional home audio makers - Traditional home audio makers have existing
brand value and experience in manufacturing.  (examples: Sony,
Bose)
 
 4. Major
Retailer private label products - Retailers such as Wal-Mart have the advantage
of promoting their own brands directly to customers within their stores.
(examples: Best Buy, Wal-Mart, Radio Shack)
 
 5.
Emerging digital audio brands - Existing digital audio brands have the
experience in MP3 player market. (Examples: Creative, RIO)
  RISK
FACTORS
  RISKS
RELATING TO OUR BUSINESS
  WE ARE
NOT CURRENTLY PROFITABLE AND IF WE DO NOT OBTAIN ADDITIONAL OPERATING CAPITAL
OUR BUSINESS WILL FAIL.
 
 Due to
lack of capital, we have stopped making payments to employees and independent
contractors. If we are not able to resume making such payments to our key
people, our business will fail.
  WE NEED
ADDITIONAL CAPITAL TO GROW AND SUPPORT OUR LONG TERM BUSINESS PLAN AND, IF WE
CAN NOT OBTAIN SUCH CAPITAL, WE MAY BE REQUIRED TO CHANGE OUR BUSINESS
PLAN.
 
 We need
additional capital to facilitate our business plan. It is likely we will have to
seek additional financing through future public or private sales of our
securities, including equity securities. Such funds may not be available
when needed, or on terms acceptable to us, or at all. Additionally, any issuance
of equity securities will result in dilution to existing stockholders. If
adequate funds are not available, we may be required to change our future
strategies and our business may fail.
  9
 Table of Contents
  OUR
INDEPENDENT AUDITORS HAVE STATED THAT THERE IS SUBSTANTIAL DOUBT THAT WE CAN
CONTINUE AS A GOING CONCERN AND IF WE DO NOT CONTINUE AS A GOING CONCERN YOU
COULD LOSE PART OR ALL OF YOUR INVESTMENT.
  Our
independent auditors have included a going concern opinion and related
discussion in the notes to our financial statements for the fiscal year ended
December 31, 2007. The auditors have included the going concern provision
because we have incurred significant and recurring losses and have a large
working capital deficit that the auditors believe raises substantial doubt about
our ability to continue as a going concern. Until such time that we receive
additional debt or equity financing, there is a risk that our auditors will
continue to include a going concern provision in the notes to our financial
statements.
  We expect
to incur significant capital expenses in pursuing our development and
acquisition strategy plans to increase sales volume, expanding our product lines
and obtaining additional financing through stock offerings, or licensing
agreements or other feasible financing alternatives. In order for us to continue
our operations, we will require additional funds in the near future. While we
hope we will be able to generate funds necessary to maintain our operations,
without additional funds there will be a limitation to the number of new
projects that we could take on, which may have an effect on our ability to
maintain our operations. Additional financing may not be available on terms
favorable to us, or at all. If additional funds are not available, we may not be
able to execute our business model plan or take advantage of business
opportunities. Our ability to obtain such additional financing and to achieve
our operating goals is uncertain. In the event that we do not obtain additional
capital or are not able to increase cash flow through the increase of revenues,
there is a substantial doubt of our being able to continue as a going
concern.
  THE
COMPANY’S SUCCESS OR FAILURE IS BASED LARGELY ON THE CONTIBUTIONS OF CERTAIN KEY
PEOPLE.
 
 In the
event our chief technology officer and President of Asian Operations, Hans Park,
were to leave the Company, there is a high probability that the business will
fail.
  WE ARE IN
DEFAULT OF OUR REPAYMENT OBLIGATIONS WITH TRAFALGAR CAPITAL, WHICH MAY RESULT IN
THE FORFEITURE OF THE COMPANY’S ASSETS.
  10
 Table of Contents
  On May 7,
2008, we received a notice of default from Trafalgar Capital pursuant to our
obligations from the convertible debenture financing provided by Trafalgar
Capital to the Company on November 30, 2008.  Under the terms of our
agreements with them and the filing of a UCC financing statement, Trafalgar
Capital has the right to seize the Company’s assets at any time.  In
the event Trafalgar Capital exercises its right to seize the Company’s assets,
the business will fail.
 
 RISKS
RELATING TO OUR STOCK
  OUR
COMMON STOCK HAS EXPERIENCED IN THE PAST, AND IS EXPECTED TO EXPERIENCE IN THE
FUTURE, SIGNIFICANT PRICE AND VOLUME VOLATILITY, WHICH SUBSTANTIALLY INCREASES
THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT OR ABOVE THE PRICE THAT
YOU PAY FOR THE SHARES.
  Because
of the limited trading market for our common stock, and because of the possible
price volatility, you may not be able to sell your shares of common stock when
you desire to do so. The inability to sell your shares may substantially
increase your risk of loss because of such illiquidity since the price for our
common stock may suffer greater declines due to its price
volatility.
  The price
of our common stock that will prevail in the market may be higher or lower than
the price you pay. Certain factors, some of which are beyond our control, that
may cause our share price to fluctuate significantly include, but are not
limited to, the following:
  o
              Variations in our quarterly
      operating results;
 
 o
              The development of a market in
      general for our products and
services;
 
 o
              Changes in market valuations of
      similar companies;
 
 o
              Announcement by us or our
      competitors of significant contracts, acquisitions, strategic
      partnerships, joint ventures or capital
  commitments;
  11
 Table of Contents
  o
              Loss of a major customer or
      failure to complete significant
  transactions;
 
 o
              Additions or departures of key
      personnel; and
 
 o
              Fluctuations in stock market
      price and volume.
  Additionally,
in recent years the stock market in general, and the OTC Bulletin Board and Pink
Sheets in particular, have experienced extreme price and volume fluctuations. In
some cases, these fluctuations are unrelated or disproportionate to the
operating performance of the underlying company. These market and industry
factors may materially and adversely affect our stock price, regardless of our
operating performance.
  Over the
past few months, there have been periods of significant increases in trading
volume of our common stock during which the price of our stock has both
increased and decreased. The historical trading of our common stock is not
necessarily an indicator of how it will trade in the future and our trading
price as of the date of this Annual Report does not necessarily portend what the
trading price of our common stock might be in the future.
  Moreover,
class action litigation has often been brought against companies following
periods of volatility in the market price of the common stock of those
companies. If we become involved in this type of litigation in the future, it
could result in substantial costs and diversion of management’s attention and
resources, which could have a further negative effect on your investment in our
stock.
  OUR
DIRECTORS HAVE THE RIGHT TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK AND
ADDITIONAL SHARES OF OUR COMMON STOCK WHICH MAY CAUSE YOUR SHARES TO BE DILUTED
AND LOSE VALUE.
  Our
directors, within the limitations and restrictions contained in our articles of
incorporation and without further action by our stockholders, have the authority
to issue shares of preferred stock from time to time in one or more series and
to fix the number of shares and the relative rights, conversion rights, voting
rights, and terms of redemption, liquidation preferences and any other
preferences, special rights and qualifications of any such series. Should we
issue additional shares of our common stock at a later time, each investor's
ownership interest in our stock would be proportionally reduced. No investor
will have any preemptive right to acquire additional shares of our common stock,
or any of our other securities. If we issue more equity securities, your shares
may be diluted and, as a result, the share prices of our common stock may
decline.
  12
 Table of Contents
  BECAUSE
THE COMPANY DID NOT REMAIN CURRENT ON ITS REPORTING REQUIREMENTS, THE COMPANY
WAS REMOVED FROM THE OTC BULLETIN BOARD WHICH WILL LIMIT THE ABILITY OF
BROKER-DEALERS TO SELL OUR SECURITIES AND THE ABILITY OF STOCK HOLDERS TO SELL
THEIR SHARE IN THE SECONDARY MARKET.
 
 On April
25, 2008 the Company’s common stock was removed from listing on the OTC Bulletin
Board for having been late with three previous filings during a two-year period,
and is now listed on the Over the Counter “Pink Sheets.”  The Company
will not be eligible for re-listing on the OTC Bulletin Board for a period of at
least one year from the date that the Company becomes current with its reporting
obligations.  As a result, the market for our stock may be limited and
you may find it more difficult to sell your shares.
 
 "PENNY
STOCK" RULES MAY MAKE BUYING OR SELLING OUR SECURITIES DIFFICULT WHICH MAY MAKE
OUR STOCK LESS LIQUID AND MAKE IT HARDER FOR INVESTORS TO BUY AND SELL OUR
SHARES.
 
 The
Securities and Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in "penny stocks." Penny stocks
generally are equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on
NASDAQ, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system. Prior to
a transaction in a penny stock, a broker-dealer is required to: deliver a
standardized risk disclosure document prepared by the SEC; provide the customer
with current bid and offers quotations for the penny stock; explain the
compensation of the broker-dealer and its salesperson in the transaction;
provide monthly account statements showing the market value of each penny stock
held in the customer's account; make a special written determination that the
penny stock is a suitable investment for the purchaser and receives the
purchaser's; and provide a written agreement to the transaction. These
requirements may have the effect of reducing the level of trading activity in
the secondary market for our stock. Because our shares are subject to the penny
stock rules, you may find it more difficult to sell your shares.
  ITEM 2. DESCRIPTION OF PROPERTY
  On
September 30, 2006 we moved our offices to premises owned and controlled by our
President & Chief Financial Officer, M. Dewey Bain. There is no charge to
the Company to use this space.
  13
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  Additionally,
between the months of December 2007 and April 2008 we subleased an office in
Menlo Park, California from Knowledge Market, Inc. at a cost of $3,721.86 per
month.  Knowledge Market, Inc. is an affiliate of the Company, and is
controlled and majority-owned by the Company’s chief executive officer, Robert
Lott and the Company’s chairman, Chris Piercy.  The Company
discontinued its sublease with Knowledge Market, Inc. at the end of April
2008.  Knowledge Market, Inc. did not charge rent from the Company for
the month of May, and the Company vacated this office at the end of
May.
 
 ITEM 3. LEGAL PROCEEDINGS
 
 In the
ordinary course of business, we may be involved in legal proceedings from time
to time. Although occasional adverse decisions or settlements may occur, we
believe that the final disposition of such matters will not have material
adverse effect on our financial position, results of operations or liquidity. We
will seek to minimize disputes with our customers but recognize the
inevitability of legal action in today's business environment as an unfortunate
price of conducting business.
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
  On March
5, 2007, we held our annual meeting of shareholders in Atlanta,
Georgia.  At that meeting, M. Dewey Bain, James T. Crane, and Amy M.
Trombly were elected to be Directors.  (On October, 12, 2007, James T.
Crane and Amy M. Trombly resigned as Directors).  Also at that
meeting, the number of authorized shares were changed to 5,000,0000,000 total
shares, of which 150,000,000 were designated as preferred stock, and
4,850,000,000 were designated as common shares. The other item approved at that
meeting was the authorization of a reverse split in the range of 50:1 to
150:1.
 
 PART II
  ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
  Market
Information
  Our
common stock is quoted on the Pink Sheets under the symbol "DCNM.PK." Our stock
was not actively traded until August 2002, and the following table sets forth,
for the fiscal quarters indicated, the high and low sales prices. These
quotations reflect inter-dealer prices, without mark-up, mark-down or
commission, and may not represent actual transactions.
  14
 Table of Contents
  STOCK
      PRICE TABLE
              
              HIGH
              
              
              LOW2007
      FISCAL YEARFirst
      Quarter
              
              $
              0.0013
              
              
              $
              0.0007Second
      Quarter
              
              $
              0.001
              
              
              $
              0.0004Third
      Quarter
              
              $
              0.005
              
              
              $
              0.002Fourth
      Quarter
              
              $
              0.94
              
              
              $
              0.0012006
      FISCAL YEARFirst
      Quarter
              
              $
              0.0076
              
              
              $
              0.0029Second
      Quarter
              
              $
              0.0045
              
              
              $
              0.0003Third
      Quarter
              
              $
              0.0044
              
              
              $
              0.0012Fourth
      Quarter
              
              $
              0.0016
              
              
              $
              0.0005
  Dividends
  Since our
inception, we have not paid dividends on our common stock. We do not expect to
pay dividends on our common stock in the foreseeable future; rather we intend to
retain any earnings for use in our business activities.
  Holders
 
 As of
March 31, 2008 there were approximately 116 stockholders of record of our common
stock. The number of record holders was determined from the records of our
transfer agent and does not include beneficial owners of common stock whose
shares are held in the names of various security brokers, dealers, and
registered clearing agencies.
 
 SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
 
 None.
  15
 Table of Contents
  RECENT
SALES OF UNREGISTERED SECURITIES
  The
Company engaged in two transactions involving sales of unregistered securities
during the fourth quarter of the year ended December 31, 2007, pursuant to the
acquisitions of Pluginz, Inc., Plugin Stores, Inc. and DnC Multimedia,
Inc.
 
 On
October 19, 2007, the Company, through its wholly-owned subsidiary PlanetTRAKS,
closed a stock purchase agreement with Pluginz, LLC to purchase Pluginz Inc., a
Florida corporation, and Plugin Stores, Inc., a Delaware corporation in exchange
for a promissory note of $75,000 and 1,700,000,000 shares of the Company’s
common stock.  Pursuant to the agreement, Pluginz, LLC sold to the
Company all of the capital stock that Pluginz, LLC owned in Pluginz, Inc. and
Plugin Stores, Inc.
 
 On
November 27, 2007, the Company, through its wholly-owned subsidiary PlanetTRAKS,
closed a stock purchase agreement with Pluginz, LLC to purchase DnC Multimedia,
Inc., a Delaware corporation (“DnC”), in exchange for 250,000,000 shares of the
Company’s common stock and 1,250,000 shares of the Company’s Series A preferred
stock.  Pursuant to the agreement, Pluginz, LLC sold to the Company
all of the capital stock that Pluginz, LLC owned in DnC.
  ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
  BASIS
OF PRESENTATION
 
 The
accompanying consolidated financial statements, included elsewhere in this
Annual Report on Form 10-KSB, have been prepared in conformity with accounting
principles generally accepted in the United States of America, which contemplate
continuation as a going concern. We incurred a net loss of $2,557,079 and
$2,436,483 for the years ended December 31, 2007 and 2006, respectively. As of
December 31, 2007, we had a working capital deficit of $639,943 as compared to a
working capital deficit of $477,043 as of December 31, 2006. In addition, as of
December 31, 2007, we had not yet developed a substantial revenue stream to meet
our ongoing cash flow needs.
  These
conditions raise substantial doubt as to our ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty. The financial statements do not
include any adjustments relating to the recoverability and classification of
recorded asset amounts, or amounts and classification of liabilities that might
be necessary if we are unable to continue as a going concern.
  16
 Table of Contents
  CRITICAL
ACCOUNTING POLICIES
 
 Principles
of Consolidation
  The
consolidated financial statements present the results of DnC Multimedia
Corporation and its wholly-owned subsidiary, PlanetTRAKS, Inc.  The
wholly-owned subsidiaries of PlanetTRAKS include DnC Multimedia, Inc., Pluginz,
Inc. and Plugin Stores, Inc.  All inter-company balances and
transactions have been eliminated in consolidation.
 
 Reclassifications
  Certain
reclassifications have been made to the 2006 financial statements to conform to
classifications used in the 2007 financial statements.
  Revenue
Recognition
  The
Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”)
No. 104, Revenue
Recognition. SAB No. 104 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services have been rendered; (3) the
selling price is fixed and determinable; and (4) collectability is reasonably
assured. Provisions for discounts and rebates to customers, estimated returns
and allowances, and other adjustments are provided for in the same period the
related sales are recorded. The Company defers any revenue for which the product
has not been delivered or is subject to refund until such time that the Company
and the customer jointly determine that the product has been delivered or no
refund will be required.
  Cash
and Cash Equivalents
 
 The
Company considers all highly liquid debt securities purchased with original or
remaining maturities of three months or less to be cash equivalents. The
carrying value of cash equivalents approximates fair value.
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. Estimates and assumptions are periodically reviewed and the effects
of revisions are reflected in the consolidated financial statements in the
period they are determined to be necessary.
  17
 Table of Contents
  Accounts
Receivable
 
 The
Company’s accounts receivable consist of sales to distributors and end users
which are usually paid by credit card per each transit. Judgments are made with
respect to the collectability of account receivable based on historical
experience and current economic trends.  The Company considers all
accounts receivable fully collectible; therefore no allowance for doubtful
accounts has been made as of December 31, 2007 and 2006.
 
 Property
and Equipment
  Property
and equipment are stated at cost and depreciated over estimated useful lives of
three years using the straight-line method. Leasehold improvements are amortized
on a straight-line basis over the lease term.
 
 Property
and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated economic lives of the assets which range
from three to seven years. Leasehold improvements are amortized on a
straight-line basis over the lease term.  The Company leases assets to
its customers. Leased assets are amortized on a straight-line basis over a
three-year period. As discussed in Note 4 to the financial statements, the
Company has recorded a loss on disposal of fixed assets as of December 31, 2007,
on the internally developed software costs of $85,486 due to obsolescence. The
Company determined an impairment loss existed when the Company’s board of
directors determined it would permanently suspend further expansion of its GPS
subsidiary in January 2007.
  The
Company's leasing operations consist of leasing GPS devices which operate in
conjunction with its proprietary software to provide fleet management services
to its customers. The operating leases are written for periods ranging from
three to four years.
  Research
and Development Costs
 
 Development
costs which meet certain specific conditions such as new product development,
technological feasibility, marketability and usefulness are deferred and
amortized over ten years, while all research and ordinary development costs are
expensed as incurred. Amortization of deferred development costs commences when
the related revenue or benefit is first realized.
  18
 Table of Contents
  The
amortization of capitalized development costs and the expenses for research and
ordinary development costs are classified as manufacturing or selling, general
and administrative expenses depending on their nature.
 
 When the
recoverable amount is significantly less than the carrying value of capitalized
development costs, the difference between the recoverable amount and the
carrying value is recorded as impairment loss in the current
operations.
 
 Goodwill
 
 Goodwill,
including intellectual property, was acquired in acquisitions in 2007. Statement
of Financial Accounting Standards No. 142, Goodwill and Other Intangible
Assets, or SFAS No. 142, requires goodwill to be tested for impairment on
an annual basis and between annual tests in certain circumstances, and written
down when impaired. We perform this analysis during the fourth quarter of each
year. An impairment loss on Goodwill was recorded in the amount of
$1,807,229.
 
 Long-Lived
Assets
  The
Company has adopted Statement of Financial Accounting Standards No. 144 Accounting for the Impairment or
Disposal of Long-Lived Assets, ("SFAS 144"). The Statement requires that
long-lived assets and certain identifiable intangibles held and used by the
Company be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Events
relating to recoverability may include significant unfavorable changes in
business conditions, recurring losses, or a forecasted inability to achieve
break-even operating results over an extended period. The Company evaluates the
recoverability of long-lived assets based upon forecasted undiscounted cash
flows. Should an impairment in value be indicated, the carrying value of
intangible assets will be adjusted, based on estimates of future discounted cash
flows resulting from the use and ultimate disposition of the asset. SFAS No. 144
also requires assets to be disposed of be reported at the lower of the carrying
amount or the fair value less costs to sell.
  In 2007,
the Company recorded a loss on disposal of fixed assets on internally developed
software of $85,486 due to obsolescence. The impairment loss was triggered when
the Company’s board of directors determined it would permanently suspend further
expansion of its GPS subsidiary in January 2007.
 
 Fair
Value of Financial Instruments
  Statement
of Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments," requires disclosure of the fair value of certain
financial instruments. The carrying value of cash and cash equivalents, accounts
receivable, accounts payable and short-term borrowings, as reflected in the
balance sheets, approximate fair value because of the short-term maturity of
these instruments.
  19
 Table of Contents
  Concentrations
of Credit Risk
  Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash. The Company places its
cash and temporary cash investments with credit quality institutions. At times,
such investments may be in excess of the FDIC insurance limit. The Company
periodically reviews its trade receivables in determining its allowance for
doubtful accounts.
  Income
Taxes
 
 The
Company uses the asset and liability method of accounting for income taxes. The
asset and liability method accounts for deferred income taxes by applying
enacted statutory rates in effect for periods in which the difference between
the book value and the tax bases of assets and liabilities are scheduled to
reverse. The resulting deferred tax asset or liability is adjusted to reflect
changes in tax laws or rates. The Company records a valuation allowance for any
deferred tax allowance that it believes will not be realized.
  Internal
Use Software Costs
  Internal
use software costs include expenses incurred by the Company for research, design
and development of the Company's proprietary technology.
  Net
Loss per Common Share
 
 The
Company utilizes SFAS No. 128, “Earnings per Share” to calculate earnings/loss
per share. Basic earnings/loss per share is computed by dividing the
earnings/loss available to common stockholders (as the numerator) by the
weighted-average number of common shares outstanding (as the denominator).
Diluted earnings/loss per share is computed similar to basic earnings/loss per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if all potential
common stock (including common stock equivalents) had all been issued, and if
such additional common shares were dilutive. Under SFAS No. 128, if the
additional common shares are dilutive, they are not added to the denominator in
the calculation. Where there is a loss, the inclusion of additional common
shares is anti-dilutive (since the increased number of shares reduces the per
share loss available to common stock holders).
  20
 Table of Contents
  Stock-Based
Compensation
  In
December 2004, FASB issued Statement No. 123(R),Share-Based Payment, which
establishes accounting standards for transactions in which an entity receives
employee services in exchange for (a) equity instruments of the entity or
(b) liabilities that are based on the fair value of the entity’s equity
instruments or that may be settled by the issuance of equity instruments.
Effective July 1, 2005, SFAS 123(R) the Company adopted SFAS 123(R), which
requires the Company to recognize the grant-date fair value of stock options and
equity based compensation issued to employees in the statement of operations.
The statement also requires that such transactions be accounted for using the
fair-value-based method, thereby eliminating use of the intrinsic method of
accounting in APB No. 25,Accounting for Stock Issued to Employees, which was permitted under
Statement 123, as originally issued.
 
 New
Accounting Pronouncements
 
 In
February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments, which allows the preparer of financial statements
to elect fair value measurement of a financial instrument at time of
acquisition, issuance, or a remeasurement event so that similar instruments are
accounted for similarly regardless of their form.  This applies to all
financial instruments acquired or issued by the entity beginning with fiscal
year 2007. The Company does not expect this accounting pronouncement will have a
material effect on its financial statements.
 
 In March
2006, the FASB issued SFAS No. 156, Accounting for Servicing of
Financial Assets,which requires all separately recognized servicing
assets and servicing liabilities be initially measured at fair value, if
practicable.  This applies to any future servicing assets and servicing
liabilities beginning fiscal year 2007. The Company does not expect this
accounting pronouncement will have a material effect on its financial
statements.
 
  In July
2006, FASBissued FASB
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (FIN 48). FIN 48 clarifies when tax benefits should be recorded in
financial statements, requires certain disclosures of uncertain tax matters and
indicates how any tax reserves should be classified in a balance sheet. The
Company adopted the provisions of FIN 48 effective January 1, 2007. No
cumulative adjustment to accumulated deficit was required upon
adoption.
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
whose purpose is to increase consistency and comparability of fair value
estimates by defining fair value, establishing a framework for measuring fair
value and expanding disclosure of fair value measurements. The pronouncement
applies to other accounting pronouncements that require or permit fair value
measurements. The statement emphasizes that fair value is a market based
measurement other than an entity based. This applies to all financial
instruments acquired or held by the Company beginning in fiscal 2008. The
Company does not expect this accounting pronouncement will have a material
effect on its financial statements.
 
 In
September 2006, the FASB issued SFAS No. 158, Employer’s Accounting for Defined
Benefit Pension and Other Postretirement Plan, whose purpose is to
improve financial reporting by requiring an employer to recognize the overfunded
or underfunded status of a defined benefit postretirement plan (other than a
multi-employer plan) as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in which the
changes occur. The statement also requires employers to measure the funded
status of a plan as of the date of its year-end statement of financial position,
with limited exception. An employer with publicly traded equity securities is
required to initially recognize the funded status of a defined benefit
postretirement plan and to provide the required disclosures as of the end of the
fiscal year ending after December 15, 2006. The Company does not expect this
accounting pronouncement to have a material effect on its financial
statements.
  21
 Table of Contents
  On February 15, 2007, the FASB
issued SFAS No. 159,The Fair
Value Option for Financial Assets and Financial Liabilities—Including an
Amendment of FASB Statement No. 115(“SFAS 159”). This standard permits an entity to
measure financialinstruments and certain other items at estimated fair value. Most of the
provisions of SFAS No. 159 are elective; however, the amendment to SFAS
No. 115,Accounting for
Certain Investments in Debt and Equity Securities,applies to all entities that own
trading and
available-for-sale securities. The fair value option created by SFAS No. 159
permits an entity to measure eligible items at fair value as of specified
election dates. The fair value option (a) may generally be applied
instrument by instrument, (b) is irrevocable unless a new
election date occurs, and (c) must be applied to the entire instrument and
not to only a portion of the instrument. SFAS No. 159 is effective as of the
beginning of the first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the
beginning of the previous fiscal year provided that the entity (i) makes
that choice in the first 120 days of that year, (ii) has not yet
issued financial statements for any interim period of such year, and
(iii) electsto apply the provisions of SFAS No. 157.The adoption of SFAS No. 159 is not expected to have a material effect on
its financial position, results of operations or cash flows.
  In December 2007, the FASB issued SFAS
No. 141(R),Business
Combinations.  This statement replaces the
original SFAS No. 141 and retains the fundamental requirements in SFAS
No. 141 that require the acquisition method of accounting (which SFAS No.
141 called thepurchase
method) be used for all
business combinations and for an acquirer to be identified for each business
combination. The objective of SFAS No. 141(R) is to improve the relevance and
comparability of the information that a reporting entity provides in its
financial reports about a business combination and its effects. To accomplish
that, SFAS No. 141(R) establishes principles and requirements for how the
acquirer:
  a.           Recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree.
  b.           Recognizes and measures the goodwill
acquired in the business combination or a gain from a bargain
purchase.
  c.           Determines what information to disclose
to enable users of the financial statements to evaluate the nature and financial
effects of the business
combination.
  This
statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 and may not be applied before
that date. The Company is unable at this time to determine the effect that its
adoption of SFAS No. 141(R) will have on its consolidated results of operations
and financial condition.
  22
 Table of Contents
  In December 2007, the FASB issued SFAS
No. 160,Noncontrolling
Interests in Consolidated Financial
Statements, an amendment of Accounting Research Bulletin No 51(SFAS No. 160). SFAS No. 160
establishes accounting and reporting standards for ownership interests in
subsidiaries held by parties other than the parent, changes in a
parent’s ownership of a noncontrolling
interest, calculation and disclosure of the consolidated net income attributable
to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent
retains its controlling financial interest and fair value measurement of any
retained noncontrolling equity investment. SFAS No. 160 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. Early adoptionis prohibited.The adoption of
SFAS No. 160 is not expected to have a material effect on the Company’s
financial position, results of operations or cash flows.
  In
February 2008, the FASB issued Staff Position (“FSP”) No. 157-2, Effective Date of FASB Statement
No. 157, which delays the effective date of SFAS No. 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years. The impact of adoption is not expected to have a
material effect on the Company’s financial condition or results of
operations.
  In April
2008, the FASB issued FSP SFAS No. 142-3, Determination of the Useful Life of
Intangible Assets, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under SFAS No. 142, Goodwill and Other Intangible
Assets.  The intent of FSP SFAS No. 142-3 is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
No. 142 and the period of the expected cash flows used to measure the fair value
of the asset under SFAS No. 141(R) and other U.S. generally accepted accounting
principles. The Company is currently evaluating the potential impact of FSP SFAS
No. 142-3 on its consolidated financial statements.
  In March
2008, the FASB issued SFAS No. 161, Disclosure about Derivative
Instruments and Hedging Activities, an amendment of SFAS No. 133, (SFAS
No. 161). This statement requires that objectives for using derivative
instruments be disclosed in terms of underlying risk and accounting designation.
The Company is required to adopt SFAS No. 161 on January 1, 2009. The Company is
currently evaluating the potential impact of SFAS No. 161 on the Company’s
consolidated financial statements.
   RESULTS
OF OPERATIONS
  COMPARISON
OF THE YEAR ENDED DECEMBER 31, 2007 TO THE YEAR ENDED DECEMBER 31,
2006
  Operations:
In 2007, we had $116,839 of revenue with associated costs of goods sold of
$137,207 resulting in a gross loss of $20,368. In 2006, we had $280,741 of
revenue with associated costs of goods sold of $200,042 resulting in a gross
profit of $80,699.   Accordingly, our revenue in 2007 was 68%
less than our revenue in 2006.  Our gross profit in 2007 was 125% less
than our gross profit in 2006. The decrease in 2007 was solely attributable to
the decision to close down the GPS business in 2007 because of a lack of capital
and negative cash flow.
  23
 Table of Contents
  Selling
and administrative expenses: Our selling and administrative expenses in 2007
totaled $529,911 as compared to $568,660 in 2006. The decrease in 2007 was
solely attributable to the decision to close down the GPS business in 2007
because of a lack of capital and negative cash flow.
 
 Stock-based
compensation: Total stock-based compensation was $0.00 in 2007 as compared to
$1,370,323 in 2006. We paid for the majority of our marketing resources through
the issuance of our common stock to consultants for services rendered and for
employees, as part of an incentive-laden marketing plan.
 
 Depreciation
and amortization expense: Depreciation, which is inclusive of amortization
expense, totaled $67,915 in 2007 as compared to $162,275 in 2006.
  Interest
expense: We incurred $108,899 and $68,119 of interest expense during the years
ended December 31, 2007 and 2006, respectively. The significant decrease in
interest expense in 2007 over 2006 was a result of the fact that the majority of
our convertible debentures and the associated beneficial conversion features
were issued in 2006. As a result of the decreased debt balance, there was less
interest expense in 2007. Also, in 2006, upon the conversion of certain debts to
common stock, a large portion of the beneficial conversion feature associated
with those debts was classified as interest expense and was expensed entirely
upon the conversion of the debts, thus producing a larger than normal value for
interest expense for 2006. In 2007, there were some conversions of the
debentures but the effect was not as significant as in 2006.
  Net loss:
Our net loss for the year ended December 31, 2007 and 2006 was $2,557,079 and
$2,436,483, respectively. Our net loss per common share (basic and diluted) was
$0.00 and $0.00 for the years ended December 31, 2007 and 2006, respectively.
Marketing-related expenses in 2007 were not as significant as they were in 2006,
which greatly reduced the net loss for 2007.
  The
weighted average number of outstanding shares was 1,456,971,431 and 920,164,219
for the years ended December 31, 2007 and 2006, respectively.
  24
 Table of Contents
  LIQUIDITY
AND CAPITAL RESOURCES
  As of
December 31, 2007, we had a working capital deficit of $639,943 as compared to
$477,043 as of December 31, 2006. We used $349,450 and $355,203 in cash flows
used in operations in 2007 and 2006, respectively. Although net cash used in
operating activities remained relatively flat year over year the focus of uses
was not. Primarily offsetting the 2006  net loss of $2,436,483 was
$1,370,323 for stock based compensation and stock option expenses and $312,742
for an impairment loss. Primarily offsetting the 2007 net loss of $2,557,079,
the gain on extinguishment of debt of $389,063 and the decrease in accounts
payable of $172,860 was $1,807,229 for an impairment loss, $278,217 for
amortization of preferred stock discount and an increase of $474,685 in accrued
expenses.
 
 Cash
flows used in investing activities totaled $41,820 and $53,670 for the years
ended December 31, 2007 and 2006, respectively.  In 2007 the Company
paid $41,820 in the acquisition of property and equipment.  In 2006 we
utilized $48,117 to acquire the assets included within the Coin Wash Associates,
Inc. subsidiary. We also purchased several GPS units in early
2006.
 
 In 2007
we met our cash requirements through the following:  (1) loans from
related parties totaling $126,167, and (2) a convertible debenture financing
from Trafalgar Capital, which provided proceeds to the company of
$485,626.  We met our cash requirements during 2006 through proceeds
from the exercise of employee stock options to purchase common stock of
$332,000, and proceeds from the purchase of preferred stock of $100,000, which
resulted in net cash provided by financing activities of $432,000.
  While we
have raised capital to meet our working capital and financing needs in the past,
additional financing is required in order to meet our current and projected cash
flow deficits from operations and development.
  We have
currently curtailed our operations due to a lack of capital. We are seeking new
capital.  However, our ability to succeed in raising capital is
substantially diminished by the fact that we are in default of our repayment
obligations to Trafalgar Capital pertaining to the convertible debenture
financing we received from Trafalgar in December 2007.  If we cannot
raise capital in the immediate future, our business may fail.
  OFF-BALANCE
SHEET ARRANGEMENTS
  At
December 31, 2007 we do not have any off-balance sheet
arrangements.
  25
 Table of Contents
  ITEM 7. FINANCIAL STATEMENTS.
 
 DNC
MULTIMEDIA CORPORATION
 
 CONSOLIDATED
FINANCIAL STATEMENTS
 
 YEARS
ENDEDDECEMBER 31,
2007and
2006
 
 
 Table of
Contents
 
 
 Report
      of Independent Certified Public Accountants
              F –
      2Consolidated
      Balance Sheets
              F –
      3Consolidated
      Statements of Operations
              F –
      4Consolidated
      Statements of Changes in Shareholders’ Deficit
              F –
      5Consolidated
      Statements of Cash Flows
              F –
      6Notes
      to Consolidated Financial Statements
              F –
      7-23
  F-1
 Table of Contents
  Report of Independent
Registered Public Accounting Firm
 
 To the
members and board of directors of
 DnC
Multimedia Corporation:
 
 We have
audited the accompanying consolidated balance sheet of DnC Multimedia
Corporation, previously known as Plantetlink Communications, Inc., as of
December 31, 2007, and the related consolidated statement of operations,
statement of changes in shareholders’ deficit and cash flows for the year then
ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.  The financial statements of Planetlink
Communications, Inc. as of December 31, 2006 were audited by other auditors
whose report dated April 26, 2007, expressed an unqualified opinion on those
statements.  We did not audit the financial statements of DnC Tech,
Inc., a wholly-owned subsidiary of DnC Multimedia, Inc., as of December 31,
2007.  Those statements were audited by other auditors whose report
has been furnished to us, and our opinion, insofar as it relates to the amounts
included for DnC Tech, Inc., is based solely on the report of the other
auditors.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provided a reasonable basis
for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of DnC Multimedia Corporation
as of December 31, 2007, and the results of its operations and its cash flows
for the period then ended in conformity with accounting principles generally
accepted in the United States of America.
 
 The
accompanying financial statements referred to above have been prepared assuming
that the Company will continue as a going concern.  As more fully
described in Note 1, the Company’s need to seek new sources or methods of
financing or revenue to pursue its business strategy, raise substantial doubt
about the Company’s ability to continue as a going
concern.  Management’s plans as to these matters are also described in
Note 1.  The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
 
 
 Hollywood,
Florida,
 June 12,
2008
  F-2
 Table of Contents
  DNC
MULTIMEDIA CORPORATION
 CONSOLIDATED
BALANCE SHEETS
 AS OF
DECEMBER 31, 2007 and 2006
 
 2007
              
              
              2006ASSETSCURRENT
      ASSETSCash
      and cash equivalents
              
              $
              271,432
              
              
              $
              50,909Accounts
      receivable, net
              
              
              1,744
              
              
              
              10,222Other
      receivable
              
              
              -
              
              
              
              1,425Deposits
              
              
              2,000
              
              
              
              -TOTAL
      CURRENT ASSETS
              
              
              275,176
              
              
              
              62,556Property
      and equipment, net
              
              
              138,559
              
              
              
              120,448Intangible
      assets, net
              
              
              739,732
              
              
              
              -Assets
      held for sale
              
              
              -
              
              
              
              48,117TOTAL
      ASSETS
              
              $
              1,153,467
              
              
              $
              231,121LIABILITIES
      AND SHAREHOLDERS' DEFICITCURRENT
      LIABILITIESAccounts
      payable
              
              $
              5,359
              
              
              $
              178,219Accrued
      expenses
              
              
              474,686
              
              
              
              -Convertible
      debenture-current portion-related party
              
              
              233,907
              
              
              
              -Loan
      payable-related party
              
              
              126,167
              
              
              
              -Loan
      payable-officer
              
              
              -
              
              
              
              361,380Related
      party note payable
              
              
              75,000
              
              
              
              -TOTAL
      CURRENT LIABILITIES
              
              
              915,119
              
              
              
              539,599Convertible
      debenture-related party
              
              
              251,719
              
              
              
              -TOTAL
      LIABILITIES
              
              
              1,166,838
              
              
              
              539,599Commitments
      and contingenciesSHAREHOLDERS'
      DEFICITPreferred
      stock:  $1.00 par value; 150,000,000 authorized; 25,000 shares
      issued and outstanding at Decenber 31, 2007 and 2006,
      respectively.
              
              
              25,000
              
              
              
              25,000Preferred
      stock: Series A $.001 par value; 50,000,000 shares authorized; 3,833,334
      and 2,583,334 shares issued and outstanding at December 31, 2007 and 2006
      respectively
              
              
              3,833
              
              
              
              2,583Preferred
      stock discount
              
              
              -
              
              
              
              (278,217
              )Common
      stock: $.001 par value; 5,000,000,000 shares authorized; 3,043,683,760 and
      1,093,683,760 shares issued and outstanding at December 31, 2007 and 2006
      respectively
              
              
              3,043,684
              
              
              
              1,093,684Additional
      paid-in capital
              
              
              17,842,441
              
              
              
              17,219,722Accumulated
      deficit
              
              
              (20,928,329
              )
              
              
              (18,371,250
              )TOTAL
      SHAREHOLDERS' DEFICIT
              
              
              (13,371
              )
              
              
              (308,478
              )TOTAL
      LIABILITIES AND SHAREHOLDERS' DEFICIT
              
              $
              1,153,467
              
              
              $
              231,121
  F-3
 Table of Contents
  DNC
MULTIMEDIA CORPORATION
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 FOR THE
YEARS ENDED DECEMBER 31, 2007 and 2006
 
 2007
              
              
              2006Revenues
              
              $
              116,839
              
              
              $
              280,741Cost
      of sales
              
              
              137,207
              
              
              
              200,042GROSS
      PROFIT (LOSS)
              
              
              (20,368
              )
              
              
              80,699OPERATING
      EXPENSES:General
      and administrative
              
              
              529,911
              
              
              
              568,660Stock
      based compensation
              
              
              -
              
              
              
              1,370,324Depreciation
      and amortization
              
              
              67,915
              
              
              
              162,275597,826
              
              
              
              2,101,259TOTAL
      LOSS FROM OPERATIONS
              
              
              (618,194
              )
              
              
              (2,020,560
              )OTHER
      INCOME (EXPENSES):Impairment
      of goodwill
              
              
              (1,807,229
              )
              
              
              -Gain
      on extinguishment of debt
              
              
              389,063
              
              
              
              684Interest
      expense
              
              
              (108,899
              )
              
              
              (68,119
              )Foreign
      currency transactions
              
              
              -
              
              
              
              -Impairment
      loss on internal software
              
              
              -
              
              
              
              (312,742
              )Loss
      on disposal of subsidary
              
              
              (48,117
              )
              
              
              -Amortization  of
      preferred stock discount
              
              
              (278,217
              )
              
              
              -Interest
      income
              
              
              -
              
              
              
              -Loss
      on disposal of assets
              
              
              (85,486
              )
              
              
              (35,746
              )TOTAL
      OTHER EXPENSE
              
              
              (1,938,885
              )
              
              
              (415,923
              )NET
      LOSS
              
              $
              (2,557,079
              )
              
              $
              (2,436,483
              )WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDING BASIC AND DILUTED
              
              
              1,456,971,431
              
              
              
              920,164,219EARNINGS
      (LOSS) PER SHARE - basic and diluted
              
              $
              -
              
              
              $
              -
  F-4
 Table of Contents
 
 Preferred
      Stock
                150,000,000
      shares authorized
              
              
              Series
      A
                Preferred
      Stock
                50,000,000
      shares authorized
              
              
              Common
      Stock
                5,000,000,000
      shares authorized
              
              
              Preferred
                Stock
              
              
              Additional
                Paid-in
              
              
              AccumulatedShares
              
              
              Par $1.00
              
              
              Shares
              
              
              Par $.001
              
              
              Shares
              
              
              Par $.001
              
              
              Discount
              
              
              Capital
              
              
              Deficit
              
              
              TotalBALANCE
      - DECEMBER 31, 2005
              
              
              25,000
              
              
              $
              25,000
              
              
              
              -
              
              
              $
              -
              
              
              
              586,504,078
              
              
              $
              586,504
              
              
              $
              -
              
              
              $
              15,175,761
              
              
              $
              (15,772,984
              )
              
              $
              14,281Issuance
      of common stock for compensation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              242,627,150
              
              
              
              242,627
              
              
              
              -
              
              
              
              550,620
              
              
              
              -
              
              
              
              793,247Issuance
      of common stock for conversion of debt
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              116,552,532
              
              
              
              116,553
              
              
              
              -
              
              
              
              114,847
              
              
              
              -
              
              
              
              231,400Exercise
      of common stock options
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              148,000,000
              
              
              
              148,000
              
              
              
              -
              
              
              
              184,000
              
              
              
              -
              
              
              
              332,000Stock
      option expense
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              577,077
              
              
              
              -
              
              
              
              577,077Issuance
      of preferred stock for cash
              
              
              -
              
              
              
              -
              
              
              
              2,083,334
              
              
              
              2,083
              
              
              
              -
              
              
              
              -
              
              
              
              (400,000
              )
              
              
              497,917
              
              
              
              -
              
              
              
              100,000Issuance
      of preferred stock for conversion of debt
              
              
              -
              
              
              
              -
              
              
              
              500,000
              
              
              
              500
              
              
              
              -
              
              
              
              -
              
              
              
              (40,000
              )
              
              
              119,500
              
              
              
              -
              
              
              
              80,000Amortization
      of preferred stock discount
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              161,783
              
              
              
              -
              
              
              
              (161,783
              )
              
              
              -Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (2,436,483
              )
              
              
              (2,436,483
              )BALANCE
      - DECEMBER 31, 2006
              
              
              25,000
              
              
              $
              25,000
              
              
              
              2,583,334
              
              
              $
              2,583
              
              
              
              1,093,683,760
              
              
              $
              1,093,684
              
              
              $
              (278,217
              )
              
              $
              17,219,722
              
              
              $
              (18,371,250
              )
              
              $
              (308,478
              )Issuance
      of common stock for the purchase of Pluginz, Inc. and Pluginz
      Stores
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,700,000,000
              
              
              
              1,700,000
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,700,000Issuance
      of common and preferred stock for the purchase of DnC Multimedia,
      Inc.
              
              
              -
              
              
              
              -
              
              
              
              1,250,000
              
              
              
              1,250
              
              
              
              250,000,000
              
              
              
              250,000
              
              
              
              -
              
              
              
              622,719
              
              
              
              -
              
              
              
              873,969Amortization
      of preferred stock discount
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              278,217
              
              
              
              -
              
              
              
              -
              
              
              
              278,217Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (2,557,079
              )
              
              
              (2,557,079
              )BALANCE
      - DECEMBER 31, 2007
              
              
              -
              
              
              $
              25,000
              
              
              
              3,833,334
              
              
              $
              3,833
              
              
              
              3,043,683,760
              
              
              $
              3,043,684
              
              
              $
              -
              
              
              $
              17,842,441
              
              
              $
              (20,928,329
              )
              
              $
              (13,371
              )
  F-5
 Table of Contents
  DNC
MULTIMEDIA CORPORATION
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 
 2007
              
              
              2006Cash
      flows from operating activities:Net
      loss
              
              $
              (2,557,079
              )
              
              $
              (2,436,483
              )Adjustment
      to reconcile net loss to net cash used in operations:Stock
      - based compensation
              
              
              -
              
              
              
              793,246Stock
      option expenses
              
              
              -
              
              
              
              577,077Gain
      on extinguishment of debt
              
              
              (389,063
              )
              
              
              -Impairment
      loss
              
              
              1,807,229
              
              
              
              312,742Loss
      on disposal of assets
              
              
              85,486
              
              
              
              35,746Loss
      on disposal of subsidiary
              
              
              48,117
              
              
              
              -Bad
      debt expense
              
              
              -
              
              
              
              3,000Amortization
      of deferred financing costs
              
              
              -
              
              
              
              32,805Amortization
      of beneficial coversion feature
              
              
              -
              
              
              
              42,406Amortization
      of preferred stock discount
              
              
              278,217
              
              
              
              -Depreciation
      and amortization
              
              
              67,915
              
              
              
              129,470Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              8,478
              
              
              
              12,834Other
      assets
              
              
              -
              
              
              
              (1,425
              )Other
      receivable
              
              
              1,425
              
              
              
              -Deposits
              
              
              (2,000
              )
              
              
              -Accounts
      payable
              
              
              (172,860
              )
              
              
              54,168Accrued
      expenses
              
              
              474,685
              
              
              
              -Officer
      note payable
              
              
              -
              
              
              
              91,786Customer
      deposits
              
              
              -
              
              
              
              (2,575
              )Net
      cash used in operating activities
              
              
              (349,450
              )
              
              
              (355,203
              )Cash
      flows from investing activities:Assets
      held for sale
              
              
              -
              
              
              
              (48,117
              )Acquisition
      of property and equipment
              
              
              (41,820
              )
              
              
              -Capital
      expenditures
              
              
              -
              
              
              
              (5,553
              )Net
      cash used in investing activities
              
              
              (41,820
              )
              
              
              (53,670
              )Cash
      flows from financing activities:Proceeds
      from loan payable-related party
              
              
              126,167
              
              
              
              -Proceeds
      from convertible debenture
              
              
              485,626
              
              
              
              -Proceeds
      from the exercise of stock options held by contractors
              
              
              -
              
              
              
              332,000Proceeds
      from purchase of preferred stock
              
              
              -
              
              
              
              100,000Net
      cash  provided by financing activities
              
              
              611,793
              
              
              
              432,000NET
      INCREASE (DECREASE) IN CASH
              
              
              220,523
              
              
              
              23,127CASH
      AT BEGINNING OF YEAR
              
              
              50,909
              
              
              
              27,782CASH
      AT END OF PERIOD
              
              $
              271,432
              
              
              $
              50,909Supplemental
      disclosure of  information:Cash
      paid  for interest
              
              $
              5,299
              
              
              $
              -Cash
      paid for taxes
              
              $
              -
              
              
              $
              -Supplemental
      disclosure of non-cashinvesting and  financing
      activities:Issuance
      of common stock for conversion of debt
              
              $
              -
              
              
              $
              231,400Issuance
      of preferred stock for conversion of debt
              
              $
              -
              
              
              $
              80,000Goodwill
      in conjuction with an acqusition
              
              $
              1,807,229
              
              
              $
              -Issuance
      of notes payable in conjunction with an acqusition
              
              $
              (75,000
              )
              
              $
              -Issuance
      of common stock in conjunction with an acqusition
              
              $
              (1,700,000
              )
              
              $
              -Acquisition
      of property and equipment
              
              $
              134,237
              
              
              $
              -Acquisition
      of intangible assets
              
              $
              739,732
              
              
              $
              -Issuance
      of common stock in conjunction with an acqusition
              
              $
              (250,000
              )
              
              $
              -Issuance
      of preferred stock in conjunction with an acqusition
              
              $
              (1,250
              )
              
              $
              -Additional
      paid in capital in conjunction with an acqusition
              
              $
              (622,719
              )
              
              $
              -
  F-6
 Table of Contents
  DNC
MULTIMEDIA CORPORATION
 NOTES TO
THE FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 NOTE
1 – DESCRIPTION OF BUSINESS
  Nature
of Business
  DnC
Multimedia Corporation (the “Company”), previously known until December 12,
2007, as Planetlink Communications, Inc.,  was incorporated in May
1999 under the laws of the State of Georgia for the purpose of providing
international telecommunications and wireless services. In 2004, the Company
phased out of the satellite television services business and through its
wholly-owned subsidiary, PlanetTRAKS, Inc. (“PlanetTRAKS”) developed a product
line known as TransTRAK that utilizes Global Positioning Systems ("GPS")
technology for vehicle tracking and fleet management. TransTRAK is a web-based
turnkey solution for real-time, mobile asset management.  In the
fourth quarter of 2006, the Company began winding down its PlanetTRAKS
operations due to lack of capital. As a result, at June 30, 2007, the Company
was no longer seeking new accounts. However, the Company continues to service
its existing portfolio of accounts.
  Acquisitions
During 2007
 
 During
2007 the Company moved forward with certain acquisition activity that would take
advantage of technologies, markets and geographic synergies.
 
 On
October 19, 2007, the Company, through its wholly-owned subsidiary PlanetTRAKS,
closed a stock purchase agreement with Pluginz, LLC to purchase Pluginz, Inc., a
Florida corporation, and Plugin Stores, Inc., a Delaware corporation, in
exchange for a promissory note of $75,000 and 1,700,000,000 shares of the
Company’s common stock.  Pursuant to the agreement, Pluginz, LLC sold
to the Company all of the capital stock that Pluginz, LLC owned in Pluginz, Inc.
and Plugin Stores, Inc.  This transaction resulted in the recognition
of $1,807,229 for goodwill.  Subsequent to the acquisition and as of
December 31, 2007 an impairment of the goodwill was recorded for the full
amount.  With this transaction, the Company acquired approximately
$57,000 of assets and approximately $155,000 of liabilities was assumed as a
result of the Company’s acquisition of 100% of Pluginz, Inc., and Plugin Stores,
Inc. common stock. Prior to the stock transaction, Pluginz, Inc. and Plugin
Stores, Inc. had recorded approximately $286,000 in combined revenue for the
period of January 1, 2007 through October 18, 2007.
 
 The
primary business of these Pluginz, Inc. and Plugin Stores, Inc. is the operation
of a network of websites (the “Pluginz Network”) that provide community
resources and the sale of a broad range of third party software (i.e. plug-ins)
and other after market tools for the creative industries, such as film,
television, graphic design, and video game development.  The Pluginz
Network consists of their flagship website, Pluginz.com, in addition to a number
of niche specific websites designed to cater to the needs of specific types of
creative professionals and non-professional enthusiasts.  Additionally,
each website utilizes a sophisticated product classification scheme designed to
make a large catalog of products navigable by relevance to the specific needs of
creative professionals.  Many of the products offered are delivered to
customers as digital downloads.  However, software, training materials,
media content and hardware products that are delivered via physical shipment are
also offered.
  F-7
 Table of Contents
  On
November 27, 2007, the Company, through its wholly-owned subsidiary PlanetTRAKS,
closed a stock purchase agreement with Pluginz, LLC to purchase DnC Multimedia,
Inc., a Delaware corporation (“DnC”), in exchange for 250,000,000 shares of the
Company’s common stock and 1,250,000 shares of the Company’s Series A Preferred
Stock.  Pursuant to the agreement, Pluginz, LLC sold to the Company
all of the capital stock that Pluginz, LLC owned in DnC.  With this
transaction, the Company acquired approximately $134,000 of property and
equipment and approximately $743,000 of intangible assets as a result of the
Company’s acquisition of 100% of DnC’s common stock.  Prior to the
stock transaction, DnC Tech, Inc. of South Korea and DnC had recorded
approximately $3,341,000 in combined revenue for the period of January 1, 2007
through November 26, 2007.
 
 DnC was
formed through a purchase of the assets of DnC Tech, Inc. of South Korea in
August 2007.  DnC is a designer, manufacturer and marketer of a broad
range of digital media technology products, high-end encoding technology and
creative software.  The Company has developed portable media players
(“MP3”), audio and video codes and digital rights management (“DRM”) technology
as well as other key technologies.
 
 With the
above mentioned stock purchase agreements, Pluginz, LLC now holds 70.14% of the
outstanding votes of the Company due to the combination of the following: (1)
Pluginz, LLC holds a total of 1,950,000,000 shares, or 64.07%, of the Company’s
common stock, and (2) Pluginz, LLC holds 1,250,000 shares, or 32.6%, of the
Company’s Series A Preferred stock. This change in stock ownership resulted in a
change in control of the Company.
 
 The
Company in now headquartered in Palo Alto, California and maintains engineering
facilities in Seoul, South Korea.
 
 Going
Concern
 
 These
financial statements have been prepared assuming that the Company will continue
as a going concern. The Company has operating and liquidity concerns, current
liabilities exceeded current assets by $639,943 at December 31, 2007, a net loss
of $2,557,079 was recorded for 2007 and net cash of $379,296 was used in
operations during 2007. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of these
uncertainties.
  
 The
Company’s continued existence is dependent upon its ability to successfully
execute its business plan. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of liabilities that may result from the outcome of this
uncertainty.
  F-8
 Table of Contents
  NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES
  Principles
of Consolidation
  The
consolidated financial statements present the results of DnC Multimedia
Corporation and its wholly-owned subsidiary, PlanetTRAKS.  The
wholly-owned subsidiaries of PlanetTRAKS include DnC, Pluginz, Inc., and Plugin
Stores, Inc.  All inter-company balances and transactions have been
eliminated in consolidation.
 
 Reclassifications
  Certain
reclassifications have been made to the 2006 financial statements to conform to
classifications used in the 2007 financial statements.
  Revenue
Recognition
  The
Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”)
No. 104, Revenue
Recognition. SAB No. 104 requires that four basic criteria must be met
before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred or services have been rendered; (3) the
selling price is fixed and determinable; and (4) collectability is reasonably
assured. Provisions for discounts and rebates to customers, estimated returns
and allowances, and other adjustments are provided for in the same period the
related sales are recorded. The Company defers any revenue for which the product
has not been delivered or is subject to refund until such time that the Company
and the customer jointly determine that the product has been delivered or no
refund will be required.
  Cash
and Cash Equivalents
 
 The
Company considers all highly liquid debt securities purchased with original or
remaining maturities of three months or less to be cash equivalents. The
carrying value of cash equivalents approximates fair value.
 
 Use
of Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and
 
 disclosure
of contingent assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates. Estimates and
assumptions are periodically reviewed and the effects of revisions are reflected
in the consolidated financial statements in the period they are determined to be
necessary.
  F-9
 Table of Contents
  Accounts
Receivable
 
 The
Company’s accounts receivable consist of sales to distributors and end users
which are usually paid by credit card per each transit. Judgments are made with
respect to the collectability of accounts receivable based on historical
experience and current economic trends.  The Company considers all
accounts receivable fully collectible. Therefore, no allowance for doubtful
accounts has been recorded as of December 31, 2007.
 
 Property
and Equipment
  Property
and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated economic lives of the assets which range
from three to seven years. Leasehold improvements are amortized on a
straight-line basis over the lease term. Leased assets are amortized on a
straight-line basis over a three-year period.
  The
Company's leasing operations consist of leasing GPS devices which operate in
conjunction with its proprietary software to provide fleet management services
to its customers. The operating leases are written for periods ranging from
three to four years.
 
 Research
and Development Costs
 
 Development
costs which meet certain specific conditions such as new product development,
technological feasibility, marketability and usefulness are capitalized and
amortized over ten years, while all research and ordinary development costs are
expensed as incurred. Amortization of capitalized development costs commences
when the related revenue or benefit is first realized.
 
 The
amortization of capitalized development costs and the expenses for research and
ordinary development costs are classified as manufacturing or selling, general
and administrative expenses depending on their nature.
 
 When the
recoverable amount is significantly less than the carrying value of capitalized
development costs, the difference between the recoverable amount and the
carrying value is recorded as impairment loss in current
operations.
 
 In 2007
the Company acquired intangible assets, in the form of internally developed
software, resulting in a fair value of $739,732. The Company accounts for
intangible assets in accordance with Statement of Financial Accounting Standards
(“SFAS”) No. 142, Goodwill and Other Intangible
Assets or (SFAS No. 142). The intangible assets are being amortized
over the remaining useful lives of the assets at an assigned value less any
residual value.
 
 There
were no research and development expense for the years ended December 31,
2007 and 2006, respectively.
 
 Goodwill
 
 Goodwill,
including intellectual property, was acquired in the fourth quarter of 2007.
SFAS No. 142 requires goodwill to be tested for impairment on an annual
basis and between annual tests in certain circumstances, and written down when
impaired. The Company performs this analysis annually during the fourth
quarter.  An impairment loss for goodwill was recorded in the amount
of $1,807,229.
  F-10
 Table of Contents
  Long-Lived
Assets
  The
Company has adopted SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. The Statement requires that long-lived
assets and certain identifiable intangibles held and used by the Company be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Events relating to
recoverability may include significant unfavorable changes in business
conditions, recurring losses, or a forecasted inability to achieve break-even
operating results over an extended period. The Company evaluates the
recoverability of long-lived assets based upon forecasted undiscounted cash
flows. Should impairment in value be indicated, the carrying value of intangible
assets will be adjusted, based on estimates of future discounted cash flows
resulting from the use and ultimate disposition of the asset. SFAS No. 144 also
requires assets to be disposed of be reported at the lower of the carrying
amount or the fair value less costs to sell.
  In 2007,
the Company recorded a loss on disposal of fixed assets on internally developed
software of $85,486 due to obsolescence. The impairment loss was triggered when
the Company’s board of directors determined it would permanently suspend further
expansion of its GPS subsidiary in January 2007.
  Fair
Value of Financial Instruments
  SFAS No.
107, Disclosures About Fair
Value of Financial Instruments, requires disclosure of the fair value of
certain financial instruments. The carrying value of cash and cash equivalents,
accounts receivable, accounts payable and short-term borrowings, as reflected in
the balance sheets, approximate fair value because of the short-term maturity of
these instruments.
 
 Concentrations
of Credit Risk
  Financial
instruments and related items, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash. The Company places its
cash and temporary cash investments with credit quality institutions. At times,
such investments may be in excess of the FDIC insurance limit. The Company
periodically reviews its trade receivables in determining an allowance for
doubtful accounts.
  Income
Taxes
 
 The
Company uses the asset and liability method of accounting for income taxes. The
asset and liability method accounts for deferred income taxes by applying
enacted statutory rates in effect for periods in which the difference between
the book value and the tax bases of assets and liabilities are scheduled to
reverse. The resulting deferred tax asset or liability is adjusted to reflect
changes in tax laws or rates. The Company records a valuation allowance for any
deferred tax allowance that it believes will not be realized.
  F-11
 Table of Contents
  Internal
Use Software Costs
  Internal
use software costs include expenses incurred by the Company for research, design
and development of the Company's proprietary technology.
  Net
Loss per Common Share
 
 The
Company utilizes SFAS No. 128, Earnings per Share, to
calculate earnings/loss per share. Basic earnings/loss per share is computed by
dividing the earnings/loss available to common stockholders (as the numerator)
by the weighted-average number of common shares outstanding (as the
denominator). Diluted earnings/loss per share is computed similar to basic
earnings/loss per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if all
potential common stock (including common stock equivalents) had all been issued,
and if such additional common shares were dilutive. Under SFAS No. 128, if the
additional common shares are dilutive, they are not added to the denominator in
the calculation. Where there is a loss, the inclusion of additional common
shares is anti-dilutive (since the increased number of shares reduces the per
share loss available to common stock holders).
  Stock-Based
Compensation
 
 In
December 2004, the Financial Accounting Standards Board (“FASB”) issued
SFAS No. 123(R),Share-Based Payment, which establishes accounting standards for
transactions in which an entity receives employee services in exchange for
(a) equity instruments of the entity or (b) liabilities that are based
on the fair value of the entity’s equity instruments or that may be settled by
the issuance of equity instruments. In 2006, the Company adopted SFAS No.
123(R), which requires the Company to recognize the grant-date fair value of
stock options and equity based compensation issued to employees in the statement
of operations. The statement also requires that such transactions be accounted
for using the fair-value-based method, thereby eliminating use of the intrinsic
method of accounting in APB No. 25,Accounting for Stock Issued to
Employees, which was permitted under SFAS No. 123, as originally
issued.
 
 NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS
 
 In
February 2006, FASB issued SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments, which allows the preparer of financial statements
to elect fair value measurement of a financial instrument at time of
acquisition, issuance, or a remeasurement event so that similar instruments are
accounted for similarly regardless of their form.  This applies to all
financial instruments acquired or issued by the entity beginning with fiscal
year 2007. The Company does not expect this accounting pronouncement will have a
material effect on its financial statements.
 
 In March
2006, the FASB issued SFAS No. 156, Accounting for Servicing of
Financial Assets,which requires all separately recognized servicing
assets and servicing liabilities be initially measured at fair value, if
practicable.  This applies to any future servicing assets and servicing
liabilities beginning fiscal year 2007. The Company does not expect this
accounting pronouncement will have a material effect on its financial
statements.
  F-12
 Table of Contents
  In July
2006, FASBissued FASB
Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (FIN 48). FIN 48 clarifies when tax benefits should be recorded in
financial statements, requires certain disclosures of uncertain tax matters and
indicates how any tax reserves should be classified in a balance sheet. The
Company adopted the provisions of FIN 48 effective January 1, 2007. No
cumulative adjustment to accumulated deficit was required upon
adoption.
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
whose purpose is to increase consistency and comparability of fair value
estimates by defining fair value, establishing a framework for measuring fair
value and expanding disclosure of fair value measurements. The pronouncement
applies to other accounting pronouncements that require or permit fair value
measurements. The statement emphasizes that fair value is a market based
measurement other than an entity based. This applies to all financial
instruments acquired or held by the Company beginning in fiscal 2008. The
Company does not expect this accounting pronouncement will have a material
effect on its financial statements.
 
 In
September 2006, the FASB issued SFAS No. 158, Employer’s Accounting for Defined
Benefit Pension and Other Postretirement Plan, whose purpose is to
improve financial reporting by requiring an employer to recognize the overfunded
or underfunded status of a defined benefit postretirement plan (other than a
multi-employer plan) as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in which the
changes occur. The statement also requires employers to measure the funded
status of a plan as of the date of its year-end statement of financial position,
with limited exception. An employer with publicly traded equity securities is
required to initially recognize the funded status of a defined benefit
postretirement plan and to provide the required disclosures as of the end of the
fiscal year ending after December 15, 2006. The Company does not expect this
accounting pronouncement to have a material effect on its financial
statements.
  On February 15, 2007, the FASB
issued SFAS No. 159,The Fair Value Option
for Financial Assets and Financial Liabilities—Including an
Amendment of FASB Statement No. 115(“SFAS 159”). This standard permits an entity to
measure financial instruments and certain other items at estimated fair value.
Most of the provisions of
SFAS No. 159 are elective; however, the amendment to SFAS
No. 115,Accounting for
Certain Investments in Debt and Equity Securities,applies to all entities that own
trading and available-for-sale securities. The fair value option createdby SFAS No. 159 permits an
entity to measure eligible items at fair value as of specified election dates.
The fair value option (a) may generally be applied instrument
by instrument, (b) is irrevocable unless a new election date occurs,
and (c) must be applied to the entire instrument and not to
only a portion of the instrument. SFAS No. 159 is effective as of the beginning
of the first fiscal year that begins after November 15, 2007. Early
adoption is permitted as of the beginning of the previous fiscal year provided that the entity
(i) makes that choice in the first 120 days of that year,
(ii) has not yet issued financial statements for any interim period of such
year, and (iii) elects to apply the provisions of SFAS No. 157.The
adoption of SFAS No. 159 is not expected to have a material effect on its
financial position, results of operations or cash flows.
  F-13
 Table of Contents
  In December 2007, the FASB issued SFAS
No. 141(R),Business
Combinations.  This statement replaces the
original SFAS No. 141 and retains the fundamental requirements in SFAS
No. 141 that require the acquisition method of accounting (which SFAS No.
141 called thepurchase
method) be used for all
business combinations and for an acquirer to be identified for each business
combination. The objective of SFAS No. 141(R) is to improve the relevance and
comparability of the information that a reporting entity provides in its
financial reports about a business combination and its effects. To accomplish
that, SFAS No. 141(R) establishes principles and requirements for how the
acquirer:
  ·
              Recognizes and measures in its
      financial statements the identifiable assets acquired, the liabilities
      assumed, and any noncontrolling interest in the
      acquiree.
  ·
              Recognizes and measures the
      goodwill acquired in the business combination or a gain from a
      bargain
      purchase.
  ·
              Determines what information to
      disclose to enable users of the financial statements to evaluate the
      nature and financial effects of the business
      combination.
  This
statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008 and may not be applied before
that date. The Company is unable at this time to determine the effect that its
adoption of SFAS No. 141(R) will have on its consolidated results of operations
and financial condition.
  In December 2007, the FASB issued SFAS
No. 160,Noncontrolling
Interests in Consolidated Financial Statements, an amendment of Accounting
Research Bulletin No 51(SFAS No. 160).SFAS No.
160 establishes accounting and reporting standards for ownership interests in
subsidiaries held by parties other than the parent, changes in a
parent’s ownership of a noncontrolling
interest, calculation and disclosure of the consolidated net income attributable to the parent and the
noncontrolling interest, changes in a parent’s ownership interest while the parent
retains its controlling financial interest and fair value measurement of any
retained noncontrolling equity investment. SFAS No. 160 iseffective for financial statements
issued for fiscal years beginning after December 15, 2008, and interim periods
within those fiscal years. Early adoption is prohibited.The adoption of
SFAS No. 160 is not expected to have a material effect on the Company’s
financial position, results of operations or cash flows.
  In
February 2008, the FASB issued Staff Position (“FSP”) No. 157-2, Effective Date of FASB Statement
No. 157, which delays the effective date of SFAS No. 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods
within those fiscal years. The impact of adoption is not expected to have a
material effect on the Company’s financial condition or results of
operations.
  In April
2008, the FASB issued FSP SFAS No. 142-3, Determination of the Useful Life of
Intangible Assets, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under SFAS No. 142, Goodwill and Other Intangible
Assets.  The intent of FSP SFAS No. 142-3 is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
No. 142 and the period of the expected cash flows used to measure the fair value
of the asset under SFAS No. 141(R) and other U.S. generally accepted accounting
principles. The Company is currently evaluating the potential impact of FSP SFAS
No. 142-3 on its consolidated financial statements.
  F-14
 Table of Contents
  In March
2008, the FASB issued SFAS No. 161, Disclosure about Derivative
Instruments and Hedging Activities, an amendment of SFAS No. 133, (SFAS
No. 161). This statement requires that objectives for using derivative
instruments be disclosed in terms of underlying risk and accounting designation.
The Company is required to adopt SFAS No. 161 on January 1, 2009. The Company is
currently evaluating the potential impact of SFAS No. 161 on the Company’s
consolidated financial statements.
   NOTE
4 - PROPERTY AND EQUIPMENT
   Property
and equipment at December 31, 2007 and 2006 consists of the
following:
  2007
              
              
              2006Internal use
      software
              
              $
              5,043
              
              
              $
              104,248Leased
      equipment
              
              
              89,810
              
              
              
              89,810Equipment
              
              
              123,393
              
              
              
              -Furniture and
      Fixtures
              
              
              43,076
              
              
              
              -Accumulated
      depreciation
              
              
              (122,763
              )
              
              
              (73,610
              )Property and equipment,
      net
              
              $
              138,559
              
              
              $
              120,448
 
 Depreciation
and amortization expense for the years ended December 31, 2007 and December 31,
2006 was $67,915, and $162,275, respectively.  Loss on disposal of
fixed assets years ended December 31, 2007 and December 31, 2006 was $85,486,
and $35,746 respectively.
 
 NOTE
5 - LONG-TERM DEBT
 
 Convertible Debenture and
Warrants
 Effective November
30, 2007, the Company closed on a financing transaction with a group of private
investors totaling $500,000. The financing consisted of two components: (a) a
secured convertible debenture in the principal aggregate amount of $500,000
and (b) warrants registered in the name of each investor to purchase an
aggregate of up to one percent (1%) of the one percent (1.0%) of the fully
diluted outstanding shares of common stock upon exercise.  The
debentures are due in May, 2010. The debentures are convertible into shares of
the Company's common stock at a per share conversion price of the lesser of
(a) an amount equal to 120% of the fixed conversion price of $.0031 per
share, the “fixed price”, or (b) an amount equal to eighty-five
percent (85%) of the lowest daily closing bid price of the Company’s
common stock, as quoted by Bloomberg, LP, for the ten (10) trading days
immediately preceding the conversion date. The debentures shall accrue interest
on the principal amount of the debentures at a rate of twelve and one-half
percent (12.5%) per annum compounded monthly and shall be payable, in arrears,
subject to the terms and conditions of the debentures. The debenture is secured
by all of the assets and property of the Company in accordance with a security
agreement between the Company and the investors.
  F-15
 Table of Contents
  The
warrants expire on December 7, 2012. The exercise price to acquire a share of
common stock is $.0001 per share to permit the purchase up to one percent (1%)
of the fully diluted outstanding shares of Common Stock upon
exercise.
 
 Terms of
the promissory note in the amount of $500,000 includes a 12.5% interest rate per
annum, with principal and interest payments being made on a monthly basis,
beginning December 31, 2007.
 
 The
balances of the notes at December 31, 2007 were as follows:
 
 Convertible
      debentures
              
              $
              485,626Less:  current
      portion
              
              
              (233,907
              )Long-term
      portion
              
              $
              251,719
 
 Payments
of principal and interest are due on these notes as follows for the next five
years:
  2008
              
              $
              233,9062009
              
              
              233,9062010
              
              
              97,338Total
              
              $
              565,150
 
 
 NOTE
6 - INCOME TAXES
 
 The
Company applies the asset and liability method of accounting for income taxes.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of “temporary differences” by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax basis of existing assets and
liabilities.  The Company has applied an estimated combined federal
and state corporate tax rate of 40%.
  The
Company’s net deferred tax asset as of December 31, 2007, and 2006 consisted of
the following:
 
 
 2007
              
              
              2006Net
      operating loss carryforward
              
              $
              8,371,332
              
              
              $
              7,348,500Valuation
      allowance
              
              
              (8,371,332
              )
              
              
              (7,648,500
              )Net
      deferred tax asset
              
              $
              -
              
              
              $
              -
  The
components of income tax expense (benefit) as of December 31, 2007 and 2006,
respectively, are as follows:
  F-16
 Table of Contents
  2007
              
              
              2006Current
      federal and state tax benefit
              
              $
              -
              
              
              $
              -Deferred
      federal and state tax benefit
              
              
              (1,022,832
              )
              
              
              (974,593
              )Change
      in valuation allowance
              
              
              1,022,832
              
              
              
              974,593Income
      tax expense
              
              $
              -
              
              
              $
              -
  The
Company has a net operating loss carryforward of approximately $21 million
available to offset future taxable income with various expirations through
2027.
 
 In
accordance with IRC Section 382, the Company may be limited in its ability to
recognize the benefit of future net operating loss carry-forwards. Consequently,
the Company did not include a benefit from operating loss carry
forwards.
  NOTE
7 - RELATED PARTY TRANSACTIONS
  Related Party Note
Payable
 On
October 19, 2007, in connection with the acquisition of Pluginz, Inc. and Plugin
Stores, Inc., the Company delivered a promissory note for $75,000 to be paid
within 180 days of the Closing of the acquisition.  Balance as of
December 31, 2007 was $75,000.
 
 Related Party Loan
Payable
 On
November 8, 2007, the Company received a loan from a Preferred Series A Stock
shareholder in the amount of $50,000.  The note incurs interest of 15% per
annum and principal and interest is due in full on May 8, 2008.  The
balance on the note as of December 31, 2007, including unpaid interest, was
$51,282.
 
 On
November 8, 2007 the Company received a loan from an officer of the Company in
the amount of $38,024.  The note incurs interest of 12% per annum and
principal and interest is due in full on May, 8, 2008.  The balance on the
note as of December 31, 2007 was $38,024.
 
 On
November 12, 2007 the Company received a loan from an officer and director of
the Company in the amount of $50,000.  The note incurs interest of 15% per
annum and principal and interest is due in full on May, 12, 2008.  The
balance on the note as of December 31, 2007 was $30,989.
 
 On
November 15, 2007 the Company received a loan from a related party in the amount
of $5,480.  The note incurs interest of 10% per annum and principal and
interest is due in full on May, 15, 2008.  The balance on the note as of
December 31, 2007 was $5,872.
 
 Loan
Payable-Officer
 The loan
payable-officer balance was satisfied as per terms of the DnC acquisition
agreement.  A gain on extinguishment of debt for $389,063 was recorded
in 2007.
 
 Sub-Lease
  F-17
 Table of Contents
  The
Company sub-leases office space from a Company in which a director and chief
executive officer are primary shareholders.  The rental payment is
$3,722 per month beginning December 1, 2007 and is on a month to month
basis.
 
 Rental
expense charged to operations amounted to $4,329 and $18,496 for the years ended
December 31, 2007 and 2006.
 
 Consulting
 Four
separate directors of the Company perform services as independent contractors
for the mergers and acquisitions support, arrangements for interim and long term
financing for the corporation and other various duties.  Three of
these directors of the Company receive $12,000 per month and the fourth director
receives $11,111 per month. Payments began in December 2007 and the independent
contractor arrangement will continue until employment agreements have been
finalized.
 
 Agreement with Two Preferred
Series A Shareholders
 On
November 8, 2007 the Company entered into an agreement with two Series A
Preferred shareholders (“Member or Members’”) to limit the conversion rights of
the Members’ preferred stock.  Each Member holds 1,041,667 shares of
Series A Preferred stock.  The terms of the agreement are as follows:
(a) Notwithstanding the conversion and anti-dilution rights associated with the
preferred shares, it is hereby agreed that the conversion rights and
anti-dilution rights associated with each Member’s preferred shares of stock
that have not been converted before the time the Company receives at least
$1,000,000 in funding, shall be limited to a maximum of 4.95% of the total
outstanding shares of the Company’s fully diluted common stock at that time,
regardless of any reverse splits of the Company’s common stock prior to
conversion of the preferred shares to common stock. Each Member’s preferred
shares shall be converted to common stock within 30 (thirty) days of the Company
receiving the $1,000,000 in funding, (b) upon the closing of the Company or one
of its subsidiaries acquiring DnC, the voting preference associated with the
preferred shares shall be terminated, (c) in the event that the acquisition of
DnC by the Company does not occur within sixty days of this agreement, all
limitations on voting rights and conversion percentages shall be null and
void.
 
 On March
29, 2007 the Company transferred to a related party all rights in its coin wash
subsidiary, Coin Wash Associates, Inc., including all of the assets and
liabilities.  The Company recorded a loss on disposal of subsidiary of
$48,117.
 
 NOTE
8 - STOCKHOLDERS’ DEFICIT
  The
Company, a Georgia corporation, is authorized to issue 5,000,000,000 shares of
common stock with a par value of $0.001 per share. As of December 31, 2007, the
Company has 3,043,683,760 shares of common stock issued and outstanding. The
Company is authorized to issue 150,000,000 shares of preferred stock with a par
value of $1.00 per share and 50,000,000 Series A Preferred stock with a par
value of $0.001. As of December 31, 2007 there were 25,000 shares of preferred
stock outstanding and 3,833,334 shares of Series A Preferred
stock.  Each share of Series A Preferred stock carries with it voting
rights equal to that of 500 shares of common stock.  One share of
Series A Preferred stock can be converted into 100 shares of common stock at the
holder’s discretion, and as adjusted accordingly. The conversion of Series A
Preferred stock into common stock was not effective to shareholders until after
August 15, 2007.  For the year ended December 31, 2007, there were no
conversions of Series A Preferred stock into common stock.
  F-18
 Table of Contents
  During
the year ended December 31, 2007, the Company recorded the following
transactions within its stockholders’ equity accounts:
  Acquisitions with
Stock
 The
Company issued 1,700,000,000 shares of the Company’s common stock, valued at
$1,700,000 for the purchase of Pluginz, Inc. and Plugin Stores.
  The
Company issued 250,000,000 shares of the Company’s common stock, valued at
$250,000 for the purchase of DnC Multimedia, Inc. Additionally, the Company
issued 1,250,000 shares of Series A Preferred stock valued at $1,250 for the
purchase of DnC Multimedia, Inc.
  Convertible Debenture and
Warrants
 Effective November
30, 2007, the Company closed on a financing transaction with a group of private
investors totaling $500,000. The financing consisted of two components: (a) a
secured convertible debenture in the principal aggregate amount of $500,000
and (b) warrants registered in the name of each investor to purchase an
aggregate of up to one percent (1%) of the one percent (1.0%) of the fully
diluted outstanding shares of common stock upon exercise. The debentures are due
in May, 2010. The debentures are convertible into shares of the Company's common
stock  at a per share conversion price of the lesser of (a) an
amount equal to 120% of the fixed conversion price of $.0031 per share, the
“fixed price”, or (b) an amount equal to eighty-five percent (85%) of
the lowest daily closing bid price  of the Company’s common stock, as
quoted by Bloomberg, LP, for the ten (10) trading days immediately preceding the
conversion date. The debentures shall accrue interest on the principal amount of
the debentures at a rate of twelve and one-half percent (12.5%) per annum
compounded monthly and shall be payable, in arrears, subject to the terms and
conditions of the debentures. The debenture is secured by all of the assets and
property of the Company in accordance with a security agreement between the
Company and the investors.
 
 The
warrants expire in December 7, 2012. The exercise price to acquire a share of
common stock is $.0001 per share to permit the purchase up to one percent (1%)
of the fully diluted outstanding shares of common stock upon
exercise.
 
 Preferred Stock
Transactions
 During
2006 the Company issued 2,083,334 shares of Series A Preferred stock for
$100,000 in cash.
  During
2006 the Company issued 500,000 shares of Series A Preferred stock to convert
$80,000 in debt owed under the loan payable - officer.
  The
Company recorded a $440,000 Series A Preferred stock discount as of August 21,
2006, in connection with the issuance of the Series A Preferred stock. This
value represents the beneficial conversion feature derived upon the issuances of
the Series A Preferred stock on August 21, 2006. The beneficial conversion
feature was calculated as the difference between the fair market value of the
common stock into which the Series A Preferred stock was convertible less the
amount paid by the holders to acquire the Series A Preferred stock. The value
was carried in the stockholders’ equity portion of the balance sheet in
accordance with EITF Issue No. 98-5, Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios. Amortization was recorded over the period of time
through the earliest possible conversion date, August 15, 2007. Amortization was
recorded as an adjustment against accumulated deficit. The beneficial conversion
feature was considered to be a form of dividends paid to the holders of the
Series A Preferred stock. Amortization recorded in 2006 amounted to $161,783
leaving a balance of $278,217.  During 2007 the remaining balance was
fully amortized.
  F-19
 Table of Contents
  NOTE
9 - STOCK OPTIONS
 
 The
Company adopted SFAS No. 123(R) in 2006. SFAS No. 123(R) provides for mandatory
expensing of the estimated value of stock options granted to the Company’s
employees over the period of time the stock options vest. The Company measures
the total cost of each stock option grant at the date of grant using the
Black-Scholes option trading model. The Company recognizes the cost of each
stock option on a straight line basis over the applicable vesting
period.
 
 The
Company does not have a formal stock option plan. However, the Company has, from
time to time, offered its employees and contractors stock
options.  During 2007 no options were issued to employees or
contractors and no stock option expense was recorded.  During 2006,
the Company issued options to purchase 187,500 shares of its unregistered common
stock to certain employees and contractors.  The Company used the
Black-Scholes option pricing model and recorded a stock option expense of
$577,077. The stock options vested incrementally over a 5 month
period.
 
 The
estimated value of the compensatory warrants granted to non-employees in
exchange for services in 2006 was determined using the Black-Scholes option
pricing model and the following assumptions: expected term of 1 year, risk free
interest rate of 4.25%, dividend yield of 0% and volatility of 40%.  All
valuations of common stock and equity issued for services were based upon value
of the services rendered, which did not differ materially from the fair value of
the Company's common stock during the period the services were
rendered.
 
 The
following table summarizes stock options activity for the years ended December
31, 2007 and 2006:
 
 Shares
      subject to option
              
              
              Exercise
      priceBalance
      at December 31, 2005
              
              
              40,000,000
              
              
              $
              .0100Stock
      options granted
              
              
              187,500,000
              
              
              $
              .0020-.0025Stock
      options exercised
              
              
              (148,000,000
              )
              
              $
              .0020-.0025Stock
      options terminated
              
              
              (79,500,000
              )
              
              $
              .0025Balance
      at December 31, 2006
              
              
              -
              
              
              $
              -Stock
      options granted
              
              
              -
              
              
              $
              -Stock
      options exercised
              
              
              -
              
              
              $
              -Stock
      options terminated
              
              
              -
              
              
              $
              -Balance
      at December 31, 2007
              
              
              -
              
              
              $
              -
  F-20
 Table of Contents
  NOTE
10 - EARNINGS PER SHARE
 
 The
Company utilizes SFAS No. 128, Earnings per Share, to
calculate earnings/loss per share. Basic earnings/loss per share is computed by
dividing the earnings/loss available to common shareholders (as the numerator)
by the weighted-average number of common shares outstanding (as the
denominator). Diluted earnings/loss per share is computed similar to basic
earning/loss per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if all
potential common stock (including common stock equivalents) had all been issued,
and if such additional common shares were dilutive.
  Under
SFAS No. 128, where there is a loss, the inclusion of additional common shares
is anti-dilutive (since the increased number of shares reduces the per share
loss available to common stock holders), and if the additional common shares are
anti-dilutive, they are not added to the denominator in the calculation. For
periods, where the additional common shares are anti-dilutive, the following
common stock equivalents have been excluded from the calculation of diluted loss
per share:
 
 
 2007
              
              
              2006Convertible
      debentures
              
              $
              12,899,382
              
              
              $
              -Warrants
              
              
              2,585,047
              
              
              
              -Total
              
              $
              15,484,429
              
              
              $
              -
 
  NOTE
11 – LOSS ON DISPOSAL OF SUBSIDIARY
  On March
29, 2007, the Company relinquished control of the assets of Coin Wash
Associates, Inc., which consisted entirely of laundry facilities such as washers
and dryers.  The Company recorded a loss on disposal of subsidiary of
$48,117.
  NOTE
12 – SUBSEQUENT EVENT
 
 On November 26, 2007, the Company
authorized a 150:1 reverse stock split effective as of January 10,
2008.
 
 On April
25, 2008, the Company was removed from the OTC Bulletin Board for having been
late with three previous filings during a two-year period.  The
Company will not be eligible for re-listing on the OTC Bulletin Board for a
period of at least one year from the date that the Company becomes current with
its reporting obligations.
 
 On May 7,
2008, the Company received a notice of default from Trafalgar Capital pursuant
to its obligations from the convertible debenture financing provided by
Trafalgar Capital to the Company on November 30, 2008.  Under the
terms of the transaction agreements and the filing of a UCC financing statement,
Trafalgar Capital has the right to seize the Company’s assets at any
time.
  F-21
 Table of Contents
  ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
  On November 20, 2007, Chisholm, Bierwolf
& Nilson, LLC (the “Chisholm, Bierwolf”) resigned as independent auditor of
Planetlink Communications, Inc. (the “Registrant”). Chisholm, Bierwolf’s report on the Registrant’s financial statements for the past two
years contained an adverse opinion with respect to the Registrant’s ability to continue as a going
concern. There were no disagreements between the Registrant and Chisholm,
Bierwolf on any matter of accounting principlesor practices, financial statement
disclosure, or auditing scope or procedure.  However, the Registrant
mistakenly filed its Form 10-QSB for the fiscal quarter ended September 30, 2007
without the consent of the principal accountant.  As a result,
Chisholm, Bierwolf notified the Registrant that
it has resigned as independent auditor of the Registrant. The board of directors
of the Registrant discussed the desire to resign with Chisholm, Bierwolf and
reluctantly accept such resignation.
 
 On November 26, 2007, the Company
engaged Jewett, Schwartz & Associates ("Jewett, Schwartz") as the
Registrant's successor independent auditor.  The Company has not
consulted Jewett, Schwartz regarding the application of accounting principles to
a specific completed or contemplated transaction, or the type of audit opinion
that might be rendered on the Registrant's financial
statements.  Consequently, no written or oral advice was provided by
Jewett, Schwartz that was an important factor considered by the Company in
reaching a decision as to an accounting, auditing or financial reporting
issue.
 
 ITEM 8A. CONTROLS AND PROCEDURES.
 
 EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES
  Based upon an evaluation of the
effectiveness of the Company's disclosure controls and procedures performed by
the Company's management, with participation of the Company's Chief Executive
Officer, Chief Operating Officer, and its Chief Accounting Officer as of the end
of the period covered by this report, the Company's Chief Executive Officer,
Chief Operating Officer, and its Chief Accounting Officer concluded that the
Company's disclosure controls and procedures have been effective in ensuring
that material information relating to the Company, including its consolidated
subsidiary, is made known to the certifying officers by others within the
Company and the Bank during the period covered by this
report.
 
 As used herein, "disclosure controls and
procedures" mean controls and other procedures of the Company that are designed
to ensure 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
Commission's rules and forms.  Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Securities Exchange Act is accumulated and communicated to
the Company's management, including its principal executive and principal
financialofficers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosure.
  26
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  MANAGEMENT’S REPORT ON INTERNAL CONTROLS
OVER FINANCIAL REPORTING
 
 Management is responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Exchange Act Rule 13a-15(f) under the Securities
Exchange Act of 1934.  Under the supervision and with the
participation of the Chief Executive Officer, the Chief Operating Officer and
the Chief Accounting Officer, we conducted an evaluation of the effectiveness of
our control over financial reporting based on the framework in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission ("COSO").  Based on our evaluation under
the framework, management has concluded that our internal control over financial
reporting was effective as of December 31, 2007.
 
 This annual report does not include an
attestation report of the Company's registered public accounting firm regarding
internal control over financial reporting.  Management's report was
not subject to attestation by the Company's registered public accounting firm
pursuant to temporary rules ofthe Securities and Exchange Commission
that permit the Company to provide only management's report in this annual
report.
 
 CHANGES
IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
  There have not been any changes in the
Company's internal controls or in other factors that occurred during the
Company's last fiscal quarter ended December 31, 2007 that have materially
affected or are reasonably likely to materially affect the Company's internal
control over financial reporting.
  ITEM 8B OTHER INFORMATION.
 
 None.
  PART III
  ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.
  The
following table sets forth the name, age, positions, and offices or employments
for the past five years as of December 31, 2007, of our executive officers and
directors. Members of the Board are elected and serve for one year terms or
until their successors are elected and qualify. Our Board of Directors appoints
our executive officers. There are no family relationships among our Directors
and executive officers.
  27
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 NAME
              
              AGE
              
              POSITION
              Director
      SinceChris
      Piercy
              
              45
              
              Chairman
      of the Board of Directors
              2007Robert
      Lott
              
              40
              
              Chief
      Executive Officer and Director
              2007M.
      Dewey Bain
              
              57
              
              Chief
      Financial Officer, President and Director
              2002Hans
      Park
              
              43
              
              Chief
      Technology Officer, President of Asian Operations and
    Director
              2007Robert
      Lau
              
              71
              
              Director
              2007
  M. DEWEY
BAIN was elected to our Board of Directors in August 2002 and appointed
President and Interim Chief Financial Officer in October 2002. In March 2003,
Mr. Bain also was appointed Treasurer. Prior to joining PlanetLink, Mr. Bain was
the principal partner of Independent Trust Administrators. Mr. Bain was a trial
attorney for the Texas Department of Public Welfare and the City of San Antonio,
Texas. Mr. Bain also served in the Judge Advocate General Corps (J.A.G.) of the
United States Army Reserves for 10 years. Mr. Bain graduated from David Lipscomb
College in 1971 with a Bachelor of Arts degree and earned his Juris Doctor
degree from the University of Texas in 1975. Other than as noted above, Mr. Bain
has not held any position in a reporting public company during the last five
years.
  ROBERT
LOTT was elected to our Board of Directors and appointed Chief Executive Officer
in November 2007.  From November 2006 to present, Mr. Lott has served
as president of Pluginz, Inc.; from July 2005 to present Mr. Lott has served as
director and chief operating officer of Knowledge Market, Inc.; from January
2005 to present Mr. Lott has served as general counsel to Guardian Advisors,
LLC; from January 2005 to November 2006 Mr. Lott has served as vice president of
Visual Media, Inc.; from August 2003 to January 2005 Mr. Lott has served as
managing director of Atherton Advisors, LLC; from July 2003 to December 2004 Mr.
Lott has served as chief executive officer of Editing Utopia, LLC; from July
2004 to January 2005 Mr. Lott has served as in-house counsel to SVIC, LLC; from
September 2002 to September 2003 Mr. Lott has served as managing partner of
Knowledge Market, LLC; and from April 2000 to August 2002 Mr. Lott has served as
venture associate to SVIC, LLC.  Mr. Lott has a B.A. from Stetson
University and a J.D. from Pepperdine University School of Law.
 
 CHRIS
PIERCY is an experienced entrepreneur, researcher and technology developer. He
has gone through the IPO and post IPO phase of a number of successful NASDAQ and
LSE technology companies. Recently, Mr. Piercy was Vice President of Business
Development at ClearSpeed Technology, a London Stock Exchange listed
semiconductor firm. Prior to that he: founded and managed Atherton Consulting,
an IP commercialization firm with clients in Asia, Europe, and the US; was a
managing partner at Knowledge Market, LLC, a Silicon Valley technology transfer
and venture development consulting firm, funded by Silicon Valley Innovation
Company (“SVIC”), a venture capital firm; was a founder and CEO of Immune
Source, a molecular diagnostics biotechnology manufacturer; was a founder and
manager at Connetics, (NASDAQ "CNCT") - a biopharmaceutical company and, his
team was spun out to form Intermune (NASDAQ “ITMN”); a founder of Coleman
Consulting (a management consulting group for the global Fortune 500; a
researcher at Cetus Corporation (now Chiron; NASDAQ "CHIR"); and others. Mr.
Piercy serves or has served as an Advisory board member of NASA Ames Institute
of Science and Technology (NAIST); the University of California Center for
Adaptive Optics; the National Science Foundation Center for Biophotonics Science
and Technology (CBST), the Silicon Valley Technology Convergence Consortium,
NASA Tech Briefs and NASA Nano Tech Briefs, National Science Foundation,
National Nanotechnology Initiative Regional Nanotechnology Coordination
Committee, and is Chairman of the Northern California Nanotechnology Initiative.
Mr. Piercy’s inventions and scientific work (at UC Berkeley, Stanford
University, the Human Genome Project, and for the biopharmaceutical industry)
have contributed to the development of a number of novel therapeutic drugs, AIDS
and cancer diagnostics, and medical products. His work has been published in
such leading journals as Nature, Science, Proceedings of the
National Academy of Sciences, etc.He studied Molecular Genetics and
History at U.C. Berkeley and business at Harvard Business School & the
Stanford Business School Advanced Management Program.
  28
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  ROBERT
LAU has been an active member of the investment industry for over 44
years.  He has been engaged in a broad range of securities activities,
including retail and institutional brokerage, investment management, investment
banking and securities research.  Mr. Lau’s experience in the
investment business began in 1962 with his training as an account executive at
Merrill Lynch in New York. Since then, he has held numerous top management
positions at major NYSE member firms.  Mr. Lau was Director of Sales
Development and Training at The Robinson-Humphrey Company,
Atlanta.  He managed the Atlanta office of E.F. Hutton & Company,
where he supervised the Southeastern Regional Office and headed retail,
institutional and futures sales units.  Mr. Lau became a Certified
Financial Planner (CFP) in 1974, and later served on the Board of Regents and
Faculty of the College for Financial Planning. He trained over 500 Certified
Financial Planners in all parts of the CFP curriculum.  Mr. Lau was
engaged as a financial planning marketing and training consultant by leading
NYSE firms, including Merrill Lynch, Shearson American Express and Prudential
Securities. He was National Sales Manager at Thomson McKinnon Securities in New
York, and as an officer at Oppenheimer & Company in New York, was involved
in structuring and marketing privately placed and publicly offered venture
capital, real estate, and energy investments. He has headed his own securities
and investment advisory firms since 1988, involved in investment banking,
institutional sales, investment management and investment
research.  He holds NASD Series 4 (Options Principal), 7 (Registered
Representative), 8 (Branch Manager), 24 (General Principal), 27 (Financial
Principal), 63 (Uniform State), 65 (Investment Advisory), and 87 (Research
Analyst) Securities Licenses, and a Florida Life, Variable Annuity and Health
Insurance Licenses. Mr. Lau is engaged as a securities expert in securities
arbitration and litigation and is a member of the NASD Board of
Arbitrators.  Mr. Lau has served as Chief Executive Officer of
Clayton, Dunning Group Inc. since it’s founding, is presently the Financial and
Operations Principal of its Broker Dealer subsidiary, and is President of its
affiliate, Clayton Global Partners LLC, a financial advisory firm. He holds a
B.A. from Yale University and has graduate training in
Economics.
  29
 Table of Contents
  HANSEO
PARK founded and served as Chief Executive Officer of DNC TECH., INC.
(predecessor to DnC Multimedia, Inc.), from January 1998 until its merger with
Pluginz to become DnC Multimedia, Inc.  Previously, Mr. Park was a
director of Menix Co., Ltd. from 1996 to 1997. Mr. Park provided development and
research services as a senior engineer of TriGem Computer, Inc. from 1990 to
1996. Mr. Park served as an engineer for UNSUNG Computer, Ltd., PALLET SYSTEM
CO., LTD. and LOTUS SYSTEM CO., LTD. from 1987 to 1990. Mr. Park focuses his
time and efforts on IT business, developing multimedia technology products and
marketing multimedia products. Mr. Park graduated DONG-U COLLEGE in
1987.
 
 INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS
 
 We are
not aware of any material legal proceedings that have occurred within the past
five years concerning any director, director nominee, or control person which
involved a criminal conviction, a pending criminal proceeding, a pending or
concluded administrative or civil proceeding limiting one's participation in the
securities or banking industries, or a finding of securities or commodities law
violations.
  SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
 Section
16(a) of the Exchange Act requires our directors, executive officers and persons
who beneficially own more than 10 percent of a registered class of our equity
securities, file with the SEC initial reports of ownership and reports of
changes in ownership of our equity securities. Officers, directors and greater
than 10 percent stockholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file.
 
 Section
16(a) of the Exchange Act requires our directors, executive officers and persons
who beneficially own more than 10 percent of a registered class of our equity
securities, file with the SEC initial reports of ownership and reports of
changes in ownership of our equity securities. Officers, directors and greater
than 10 percent stockholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file.
  Based
solely upon a review of copies of such forms filed on Forms 3, 4, and 5, we are
aware of seven persons who during the year ended December 31, 2007, were
directors, officers, or beneficial owners of more than ten percent of our common
stock, and who failed to file, on a timely basis, reports required by Section
16(a) of the Securities Exchange Act of 1934 during such fiscal year as
follows:
  30
 Table of Contents
  oOn August 29, 2007,
1,375,000,000 shares of the Company’s restricted common stock was issued to Amy
M. Trombly.  Ms. Trombly filed a Form 4 pursuant to this stock
issuance on September 17, 2007, 19 days after the event requiring such
filing.  However, this stock issuance was subsequently
rescinded.
 
 oOn August 29, 2007,
1,375,000,000 shares of the Company’s restricted common stock was issued to
James T. Crane.  Mr. Crane filed a Form 4 pursuant to this stock
issuance on September 17, 2007, 19 days after the event requiring such
filing.  However, this stock issuance was subsequently
rescinded.
  oRobert Lau became a 10% stockholder on
October 19, 2007 and filed Form 3 on January 30, 2008, which was 103 days after
the event requiring such filing.
 
 oRobert Lott became a 10% stockholder on
October 19, 2007 and filed Form 3 on November 9, 2007, which was 23 days after
the event requiring such filing.
 
 oChris Piercy became a 10% stockholder on
October 19, 2007 and filed Form 3 on December 31, 2007, which was 73 days after
the event requiring such filing.
 
 oPluginz, LLC became a 10% stockholder on
October 19, 2007 and filed From 3 on November 5, 2007, which was 17 days after
the event requiring such filing.
 
 oHanseo Park was appointed
to the Board of Directors on November 27, 2007 and has not yet filed a Form
3.
 
 CODE
OF ETHICS
  We have
adopted a code of ethics that applies to our principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The code of ethics is designed to deter
wrongdoing and to promote:
  oHonest and ethical
conduct, including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships;
  oFull, fair, accurate,
timely, and understandable disclosure in reports and documents that we file
with, or submit to, the SEC and in other public communications made by
us;
  oCompliance with applicable
governmental laws, rules and regulations;
  31
 Table of Contents
  oThe prompt internal
reporting of violations of the code to an appropriate person or persons
identified in the code; and
  oAccountability for
adherence to the code.
  A copy of
our code of ethics that applies to our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions was attached as an exhibit to our amended Annual
Report for the fiscal year ended December 31, 2003, filed with the Commission on
February 28, 2005.
  PROCEDURE
FOR NOMINATING DIRECTORS
  There
have been no material changes to the procedures by which security holders may
recommend nominees to our Board of Directors.
 
 COMMITTEES
OF THE BOARD OF DIRECTORS
 
 The Board
of Directors has the responsibility for establishing broad corporate policies
and reviewing our overall performance rather than day-to-day operations. The
Board's primary responsibility is to oversee management of our company and, in
so doing, serve the best interests of our company and our shareholders. Our full
Board of Directors performs all of the functions normally designated to an Audit
Committee, Compensation Committee and Nominating Committee.
 
 Audit
Committee
 
 Although
our Board does not have a separately-designated standing Audit Committee, our
full Board of Directors performs the functions usually designated to an Audit
Committee. As of December 31, 2007, Robert Lau was designated as the Board's
"audit committee financial expert" as defined in Item 407(d)(3) of Regulation
S-B. Mr. Lau is a licensed financial advisor and has served with a number of
broker dealer firms. As of May 2, 2008, Mr., Lau resigned as the Company’s chief
financial officer and was replaced by M. Dewey Bain.  At such time Mr.
Bain assumed the role of the Board's "audit committee financial expert" as
defined in Item 407(d)(3) of Regulation S-B. Mr. Bain’s experience and
background has provided him with an understanding of accounting principles
generally accepted in the United States of America and financial statements
prepared thereon. Mr. Bain has experience preparing, auditing, analyzing and
evaluating financial statements that present a breadth and level of complexity
of accounting issues comparable to the issues that can reasonably be expected to
be raised by our financial statements. Mr. Bain has an understanding of audit
committee functions. As of December 31, 2007, we were traded on the Over the
Counter Bulletin Board which does not have a requirement of director
independence; however, Mr. Bain is not independent.
  32
 Table of Contents
  ITEM 10. EXECUTIVE COMPENSATION.
  SUMMARY
COMPENSATION
  Although
the Company did not pay executive compensation in 2007, including but not
limited to cash payments, stock, benefits or perquisites, certain directors were
separately compensated for services rendered as independent
contractors.  Each of Piercy, Lott and Bain received 12,000 as
independent contractors in 2007.  Also, Hans Park received $11,111 as
an independent contractor in 2007.  Mr. Bain received compensation of
$93,000 in 2006 for services rendered as an independent contractor.
  EMPLOYMENT
AGREEMENTS OF EACH NAMED EXECUTIVE OFFICER
 
 We do not
have written or oral employment agreements with our named executive
officers.
 
 OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
 
 As of
December 31, 2007, the last day of our fiscal year, there were no outstanding
equity awards owned by our named executive officer named in the Summary
Compensation Table.
 
 Retirement
Benefits
 
 We do not
have any qualified or non-qualified defined benefit plans.
 
 Nonqualified
Deferred Compensation
 
 We do not
have any nonqualified defined contribution plans or other deferred compensation
plans.
 
 Potential
Payments Upon Termination or Change of Control
 
 None.
  DIRECTOR
COMPENSATION
  33
 Table of Contents
  No Board
of Directors fees were paid to directors in either cash or stock during the year
ended December 31, 2007.
 
 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
 
 SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
 The
following table sets forth certain information as of December 31, 2007,
regarding the beneficial ownership of our common stock held by each of our
executive officers and directors, individually and as a group and by each person
who beneficially owns in excess of five percent of our common stock. In general,
beneficial ownership includes those shares that a person has the power to vote,
sell, or otherwise dispose. Beneficial ownership also includes that number of
shares which an individual has the right to acquire within 60 days of the date
this table was prepared (such as stock options). Two or more persons may be
considered the beneficial owner of the same shares. The inclusion in this
section of any shares deemed beneficially owned does not constitute an admission
by that person of beneficial ownership of those shares.
 
 NAME
      OF BENEFICIAL OWNERShares of Common Stock
              
              
              Shares of Preferred StockM.
      Dewey Bain
              
              
              119,485
              
              
              
              500,000Robert
      Lott
              
              
              1,111,259
              
              
              
              359,031Chris
      Piercy
              
              
              1,111,259
              
              
              
              359,031Hanseo
      Park
              
              
              1,148,686
              
              
              
              -Robert
      Lau
              
              
              805,177
              
              
              
              260,141All
      officers and directors (5 persons)
              
              
              4,295,866
              
              
              
              1,478,203
  (1)
Unless otherwise indicated, the address for each of these stockholders is c/o
DnC Multimedia Corporation, 11050 Regal Forest Drive, Suwanee, Georgia 30024.
Also, unless otherwise indicated, each person named in the table above has the
sole voting and investment power with respect to the shares of common stock
beneficially owned.
  (2)
Beneficial ownership is determined in accordance with the rules of the SEC based
on 44,965,063 shares of common stock issued and outstanding on March 31,
2008.
  34
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  (3)
Amounts of shares are stated in post-reverse split numbers.
 
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.
 
 Related Party Note
Payable
 On
October 19, in connection with the acquisition of Pluginz, Inc. and Plugin
Stores, Inc., (see Note 1) the Company delivered a promissory note for $75,000
to be paid within 180 days of the Closing of the acquisition.  Balance
as of December 31, 2007 is $75,000.
 
 Related Party Loan
Payable
 On
November 8, 2007, the Company received a loan from a Preferred Series A Stock
shareholder in the amount of $50,000.  The note incurs interest of 15%
per annum and principal and interest is due in full on May 8,
2008.  The balance on the note as of December 31, 2007 including
unpaid interest is $51,282.
 
 On
November 12, 2007 the Company received a loan from an officer and director of
the Company in the amount of $50,000.  The note incurs interest of 15%
per annum and principal and interest is due in full on May, 12,
2008.  The balance on the note as of December 31, 2007 is
$30,989.
 
 On
November 15, 2007 the Company received a loan from a related party in the amount
of $5,480.  The note incurs interest of 10% per annum and principal and
interest is due in full on May, 15, 2008.  The balance on the note as of
December 31, 2007 was $5,872.
 
 Loan
Payable-Officer
 The loan
payable officer balance was satisfied as per terms of the DNC Multimedia, Inc.
acquisition/merger agreement.  A gain on extinguishment of debt of
$389,063 has been recorded.
 
 Sub-Lease
 The
Company sub-leases office space from a Company in which a Director and Chief
Executive Officer are primary shareholders.  The rental payment is
$3,721.86 per month beginning December 1, 2007 and is on a month to month
basis.
 
 Rental
expense charged to operations amounted to $4,329 and $18,496 for the years ended
December 31, 2007 and 2006.
 
 Consulting
 Four
separate Directors of the Company perform services to the Company as independent
contractors.  Three of these Directors of the Company receive $12,000
per month and the fourth director receives $11,111 per month. Each of these four
Directors of the Company received one monthly payment during the year ending
December 31, 2007.  This independent contractor arrangement will
continue until employment agreements have been finalized.
 
 Agreement with two Preferred
Series A Shareholders
 On
November 8, 2007 the Company entered into an agreement with two Preferred Series
A shareholders (“Members’”) to limit the conversion rights of the Members’
Preferred Stock.  Each Member holds 1,041,667 shares of Series A
Preferred Stock.  The terms of the agreement are as follows
(a)Notwithstanding the conversion and anti-dilution rights associated with the
Preferred Shares, it is hereby agreed that the conversion rights and
anti-dilution rights associated with each Member’s Preferred Shares of stock
that have not been converted before the time the company receives at least
$1,000,000 (One Million US Dollars) in funding, shall be limited to a maximum of
4.95% of the total outstanding shares of the Company’s fully diluted common
stock at that time, regardless of any reverse splits of the Company’s common
stock prior to conversion of the Preferred Shares to common stock. Each Member’s
Preferred Shares shall be converted to common stock within 30 (thirty) days of
the company receiving the $1,000,000 (One Million US Dollars) in funding.
(b)Upon the closing of the Company or one of its subsidiaries acquiring DnC, the
voting preference associated with the Preferred Shares shall be
terminated.  (c)In the event that the acquisition of DnC by the
Company does not occur within sixty days of this agreement, all limitations on
voting rights and conversion percentages shall be null and
void.
  35
 Table of Contents
  The
Company agreed to transfer to Sean Fulda, all rights in its coin wash
subsidiary, Coin Wash Associates, Inc., including all of the assets and
liabilities within 30 days from closing.
 
 DIRECTOR
INDEPENDENCE
  As of
December 31, 2007, M. Dewey Bain, Robert Lott, Hanseo Park, Robert Lau and Chris
Piercy served as our directors. As of December 31, 2007, we were traded on the
Over-the-Counter Bulletin Board or OTCBB. The OTCBB does not require that a
majority of the board be independent.
 
 ITEM 13. EXHIBITS.
 
 EXHIBIT
      NO.
              
              IDENTIFICATION
      OF EXHIBIT3.1
              
              Articles
      of Incorporation (included as Exhibit 3(ii) to the Registration Statement
      on Form 10-SB/12g filed October 12, 2000 and incorporated herein by
      reference).3.2
              
              Amended
      and Restated Articles of Incorporation (included as Exhibit 3.1 (I) on
      Form 8-K filed January 11, 2006 and incorporated herein by
      reference).3.3
              
              By-laws
      (included as Exhibit 3(i) to the Registration Statement on Form 10-SB/12g
      filed October 12, 2000 and incorporated herein by
    reference).3.4
              
              Amended
      and Restated By-laws (included as Exhibit 3.1 (I) to the Form 8-K filed
      January 11, 2006 and incorporated herein by reference).3.5
              
              Articles
      of Amendment of the Company, dated January 11, 2006 (included as Exhibit
      3.1 to the Form 8-K filed August 29, 2006 and incorporated herein by
      reference).
  36
 Table of Contents
  3.6
              
              Articles
      of Amendment of the Company, effective March 14, 2007 (included as Exhibit
      3.1 to the Form 8-K filed April 3, 2007 and incorporated herein by
      reference).21.1
              
              List
      of Subsidiaries (filed herewith).31.1
              
              Certification
      of Robert Lott, Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
              
              Certification
      of M. Dewey Bain, Chief Financial Officer, pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
  AUDIT
FEES
 
 There was
$26,000 in audit fees billed by Jewett, Schwartz, Wolfe & Associates for
professional services rendered for the audit of our annual financial statements
for fiscal years ended December 31, 2007.
 
 AUDIT-RELATED
FEES
  There
were no aggregate audit-related fees billed by Chisholm, Bierwolf & Nilson
LLP for professional services rendered for the audit of our annual financial
statements for fiscal years ended December 31, 2007. There were no aggregate
audit-related fees billed by Jewett, Schwartz, Wolfe & Associates for
professional services rendered for the audit of our annual financial statements
for fiscal years ended December 31, 2007. There was $15,000 in aggregate
audit-related fees billed by Choongjung Accounting Corp. for professional
services rendered for the audit of our annual financial statements for fiscal
years ended December 31, 2007.
  ALL
OTHER FEES
  There
were no other fees billed by Chisholm, Bierwolf, & Nilson LLP for
professional services rendered, other than as stated under the captions Audit
Fees. There were no other fees billed by Jewett, Schwartz, Wolfe &
Associates for professional services rendered, other than as stated under the
captions Audit Fees. There were no other fees billed by Choongjung Accounting
Corp. for professional services rendered, other than as stated under the
captions Audit Fees.
  37
 Table of Contents
  THE
BOARD OF DIRECTORS PRE-APPROVAL POLICY AND PROCEDURES
  We do not
have a separate Audit Committee. Our full Board of Directors performs the
functions of an Audit Committee. During fiscal year 2004, the Board of Directors
adopted policies and procedures for the pre-approval of audit and non-audit
services for the purpose of maintaining the independence of our independent
auditors. We may not engage our independent auditors to render any audit or
non-audit service unless either the service is approved in advance by the Board
of Directors or the engagement to render the service is entered into pursuant to
the Board of Director's pre-approval policies and procedures. On an annual
basis, the Board of Directors may pre-approve services that are expected to be
provided to us by the independent auditors during the following 12 months. At
the time such pre-approval is granted, the Board of Directors must (1) identify
the particular pre-approved services in a sufficient level of detail so that
management will not be called upon to make judgment as to whether a proposed
service fits within the pre-approved services and (2) establish a monetary limit
with respect to each particular pre-approved service, which limit may not be
exceeded without obtaining further pre-approval under the policy.
  The Board
has considered whether the provision of the services described above under the
caption "All Other Fees" is compatible with maintaining the auditor's
independence.
  38
  SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cumming, State of Georgia
on the 2nd day of July, 2008.
 
 
 
 Dated:
July 2, 2008.
 
 
 By
              /s/
      Robert LottRobert
      Lott, Chief Executive Officer/s/
      M. Dewey BainM.
      Dewey BainPrincipal
      Financial and Accounting Officer
 
 
 In
accordance with the requirements of the Exchange Act, this report has been
signed by the following persons on behalf of the registrant and in the
capacities and on July 2, 2008:
 
 
 /s/Chris PiercyBy:
      Chris PercyDirector/s/Robert LottBy:
      Robert LottChief
      Executive officer/s/M. Dewey BainBy.
      M. Dewey BainPrincipal
      Financial and Accounting Officer/s/ Hans ParkBy:
      Hans ParkDirector/s/Robert LauBy:
      Robert LauDirector.
 
  39