ITEM 1.    DESCRIPTION OF BUSINESS

Our History.

We started business as E Signs Plus.com, LLC, a Florida limited liability company on June 20, 2000.  We were engaged in the business of manufacturing and selling signage of all types.  We were also in the business of selling advertising space on the sides of trucks.  We would rent space on the sides of trucks and sell that space to other businesses that wished to advertise their products in that manner (“third party advertising”).  We also printed the advertising materials (“graphics”).  At that time we were purchasing truck side mounting systems from third parties to attach to the truck sides in which to insert the graphics.

It soon became apparent that the third party advertising business would not be profitable if we had to purchase mounting systems from third parties.  In August of 2001, we began developing our own proprietary truck side mounting systems for the display of graphics on the sides of trucks.  We also determined that there was another market for our mounting systems and graphics; businesses that wished to advertise their products on their own fleet of trucks.  At that time we decided to limit our business to developing, manufacturing and marketing mobile billboard mounting systems which are primarily mounted on trucks, to printing the graphics that are inserted into the mounting systems and to third party advertising.  On August 27, 2001, we changed E Signs Plus.com’s name to GO! Agency, LLC.

On January 28, 2002, we incorporated Sign Media Systems, Inc. in the State of Florida.  GO! Agency continued in the business of marketing its proprietary truck side mounting systems, the sale of third party advertising and the printing and sale of graphics.  Sign Media Systems engaged the business of developing, manufacturing and marketing the mounting systems.

In December, 2002, we determined that it would be in our best interest to operate the truck side mounting system, third party advertising and graphics business through one entity rather than two entities.  Therefore, effective January 1, 2003, GO! Agency contributed all of its assets to Sign Media Systems, in exchange for Sign Media Systems common stock and Sign Media Systems became a subsidiary of GO! Agency.  GO! Agency owns 97% of our shares of common stock.  At that time, GO! Agency ceased conducting the truck side mounting system, third party advertising and graphics business and all of those business activities are conducted through Sign Media Systems.  Both GO! Agency and Sign Media Systems are “small business issuers” as that term is defined in Section 228.10 of Regulation S-B promulgated by the Securities and Exchange Commission.  Please refer to Note 1 of the Consolidated Financial Statements contained in Part F/S hereof and to Item 7, Certain Relationships and Related Transactions for more information concerning our relationship with GO! Agency.

Antonio F. Uccello, III, is the manager and the 51% owner, the control person and promoter of GO! Agency formerly known as E Signs Plus.com and, therefore, pursuant the terms of GO! Agency’s Operating Agreement, has the sole power, subject to his fiduciary duties to the other GO! Agency members, to vote, or dispose of or direct the disposition of all the shares of Sign Media System’s common stock beneficially owned by GO! Agency.  Antonio F. Uccello, III, has absolute control of us by virtue of his voting control of 7,960,000 shares of our common stock.

On November 17, 2003, we entered into a merger agreement with American Powerhouse, Inc., a Delaware corporation and its wholly owned subsidiary, Sign Media Systems Acquisition Company, Inc., a Florida corporation.  Pursuant to the merger agreement, we merged with Sign Media Systems Acquisition Company.  The merger was completed on December 8, 2003 with the filing of Articles of Merger with the State of Florida at which time Sign Media Systems Acquisition ceased to exist and we became the surviving corporation.  Some time prior to the merger, American Powerhouse had acquired certain technology for the manufacture of a water machine in the form of a water cooler that manufactures water from ambient air.  American Powerhouse was not engaged in the business of manufacturing and distributing the water machine but was engaged in the licensing of that right to others.  Prior to the merger, American Powerhouse granted a license to Sign Media Systems Acquisition to use that technology and to manufacture and sell the water machines.  The acquisition of this license was the business purpose of the merger.  The license agreement is attached hereto as Exhibit 10.5. Material terms of the license agreement include the following:

·	We have right to utilize certain proprietary technology for the manufacture, design, creation, sale or use of a water cooler (“Water Machine”) which manufactures distilled water from ambient air;

·	The term of the license is in perpetuity;

·	The territory in which we are allowed to exploit the license is all countries in the world;

·	The license in non-exclusive; and

·	We do not have the right to sublicense the technology to others.

As consideration for the merger, we issued 300,000 shares of our common stock to American Powerhouse.  The 300,000 shares of stock were valued at $1.50 per share based on recent private sales of our stock.  There were no other material costs of the merger.  Please refer to Note 1 of the Notes to Consolidated Financial Statements for December 31, 2003 and 2002 contained elsewhere herein for more information on the merger.  Due to problems with our plans for marketing and distribution of the water machine subsequent to the merger, the license has no carrying or book value for the year ended December 31, 2003 in our Consolidated Financial Statements for December 31, 2004 and 2003. There was and is no relationship between American Powerhouse and either Sign Media Systems or GO! Agency.  To the best of our knowledge, the only control person of American Powerhouse is Robert F. Rood.

On October 16, 2007 the Company changed its name to International Consolidated Companies.

 

Our Business.

 

As of year ending December 31st, 2007 we are in the business of developing, manufacturing and marketing mobile billboard mounting systems which are mounted primarily on truck sides, rear panels and breaking panel roll up doors.  We also produce digitally created outdoor, full color vinyl images (“graphics”) which are inserted into the mounting systems and displayed primarily on trucks.  We have developed mounting systems which allow graphics to easily slide into an aluminum alloy extrusion with a cam-lever that snaps closed stretching the image tight as a drum, and that also easily opens to free the image for fast removals and change outs without damaging the truck body or the graphics.  We are also in the business of selling third party advertising on truck sides utilizing our mounting systems.

 

In November, 2003, we acquired a license to certain proprietary technology for the manufacture, design, creation, sale or use of a water cooler which manufactures distilled water from ambient air.  It was our intent to sell this product in Central and South America.  At that time we were in negotiations with independent dealers in Central America who sold United States products in Central and South America who expressed a desire to market this product in that territory.  Ultimately, we were unable to come to a satisfactory agreement with these dealers for the sale of this product.  Accordingly, we are not currently engaged in the business of manufacturing and sale of this product.  We will not become engaged in the business of manufacturing and selling this product until we can identify and come to a satisfactory agreement with an independent dealer or dealers in that territory for the sale of this product.  We cannot currently predict when or if we will identify and come to a satisfactory agreement with an independent dealer or dealers in this territory for the sale of this product.

 

Our Products and Services.

 

We currently have five mounting systems; two for the sides of truck bodies and trailers of all sizes, one for the rear of side roll up beverage body trailers, one for the rear garage style roll up doors of trailers and one for the sides of commercial cargo vans.  Our “Profile I” mounting system utilizes our proprietary Cam Lever technology to evenly tension images across wide surface areas and allows graphics to be inserted on both sides of truck bodies and trailers of all sizes.  Our “Profile II” mounting system utilizes our proprietary Omega Lock and Insert technology combined with our grommeted floating rail/zip tie technology to evenly tension images across wide surface areas and allows graphics to be inserted on both sides of truck bodies and trailers of all sizes.  Our Hotswap Lite mounting system evenly tensions images across small surface areas and allows graphics to be inserted on the rear panels of side roll up beverage trucks and trailers.  Our Hotswap Stretch mounting system utilizes our proprietary stretch technology to evenly tension images across breaking panel garage type roll up doors, seamlessly allowing images to roll up with those doors and allows graphics to be changed and reused.  Our VanGo mounting system utilizes our proprietary cap and insert technology to evenly tension images on curved surfaces such as the sides of commercial cargo van bodies.

 

With five products to cover key visible surface areas of trucks and trailers, we offer economical and easy image change-outs for semi and beverage trailers, urban box trucks, and cargo vans.

 

We are also in the digital printing and graphic design business, which allows us not only to market our mounting systems, but also to design and produce the graphics which are inserted in mounting systems.  Graphics are high-resolution full digital color prints, produced in heavy weight outdoor vinyl.  They are mounted on truck sides, rear panels and roll-up doors utilizing our mounting systems.  Whether a customer’s advertising campaign reaches from coast to coast, or changes seasonally, our mounting systems will allow the customer to exchange and reuse images over and over again. Images can be “swapped” for a fraction of what it costs to remove, paint, and apply pressure sensitive adhesive vinyl to truck sides, with downtime measured in minutes, rather than days.  Downtime for trucks is an extremely important consideration as the trucks generate no revenue and provide no services when not on the road.

 

We are also in the business of selling third party advertising on truck sides utilizing our mounting systems and graphics.

 

 

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Our Target Markets and Marketing Strategy.

 

Currently, we have three primary sources of revenue: (i) the sale and installation of our mounting systems, (ii) third party advertising; and (iii) the printing of graphics to be inserted on trucks utilizing our mounting systems

 

Our Mounting Systems.

According to Fleet Owner magazine, the commercial trucking market consists of more than 10 million vehicles - trucks, tractors, and trailers - of all types and sizes, from light to heavy duty, serving all segments of the nation’s economy.  Commercial trucking fleets in the U.S. operate more than 7 million trucks and 3.4 million trailers. Trucking is a large and diverse business.  It hauls roughly 80% of America’s freight and serves virtually every sector of the nation’s economy.  Truckers fall into two basic categories: for-hire carriers and private fleets. For-hire truckers haul freight and provide transportation services for others. Trucking is their primary business. Private fleets, on the other hand, are the proprietary transport, distribution, or service arms of companies that are not in the trucking business.  A private fleet’s primary function is to haul its own company’s goods or perform a service in support of its company’s main business. Private fleets make up over two-thirds of the trucking market. In the trucking industry, fleets are defined as trucking operations of five or more vehicles.  The “5+” truck-fleet segment is the heart of the trucking market, accounting for close to 80% of the total commercial vehicle population.  The private fleet one the market where we are initially focused.

We are focusing on three primary channels for distribution of our mounting systems to the private fleet market: (i) developing a nation wide dealer base; (ii) strategic alliances with reselling partners, including truck body and trailer manufacturers, truck dealers and the traditional retail sign industry; and (iii) direct sales to existing fleets.  We believe these three channels of distribution offer the opportunity for future growth and expansion.

Third Party Advertising.

Private fleets also offer a third source of revenue; third party advertising.  We identify fleet owners who are willing to lease space on their trucks for advertising from third parties.  We enter into a lease agreement with a fleet owner for truck side space that provides that so long as there is third party advertising on that space, we will pay the fleet owner a monthly lease fee.  We identify third parties who wish to advertise their good or services in the area in which the fleet owners utilize their fleets and sell the third party advertiser space on the truck sides.  We obtain revenue from the graphics we produce for the advertising and from the advertising fee. In this segment of our business, we do not sell the mounting systems and therefore derive no revenue from a sale of the mounting systems.

We are focusing on three primary channels for third party advertising: (i) developing a nation wide dealer base; (ii) alliances with advertising agencies; and (iii) direct sales to third parties seeking advertising space using our sales and marketing staff.

Graphics.

We believe that sales of graphics will be made in conjunction with sales of our mounting systems and sales of third party advertising.

 

Date	Name	Number of Shares	Consideration in Dollars
January 10, 2007	Marcus Faller	150,000	Services $75,000
January 12, 2007	Henry Plantagenet, LLC	2,000,000	Services $1,000,000
February 8, 2007	Evelyn P. Silva	300,000	Services $90,000
July 12, 2007	Colby Butcher	14,706	$10,000
July 23, 2007	Scott Dyer	36,765	$25,000
July 31, 2007	The Thomas F. Pepin Pension Limited Partnership	110,294	$75,000
August 13, 2007	John Burden	73,529	$50,000
August 16, 2007	Clif Mitchell	148,897	$101,250
August 17, 2007	North America Life Insurance	148,897	$101,250
November 17, 2007	Richard Dorfman	73,529	$50,000
December 13, 2007	Kenneth Davidson	300,000	Services $180,000
December 21, 2007	James Kordomenos	110,294	$50,000
December 27, 2007	Michael Caruana	55,555	$25,000

All of the above purchasers, and all of the purchasers referred to in footnote (1) immediately above, were Accredited Investors at the time of the sale of shares of stock to the purchasers listed in the foregoing table, we provided all of the with our non-financial statement and financial statement information described in Section 502(b)(2) of Regulation D promulgated by the Securities and Exchange Commission.  None of the offers or sales to these purchasers involved any form of general solicitation or general advertising.  Prior to each sale, each of these purchasers was afforded the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain additional information we possessed or could acquire without unreasonable effort or expense to verify the accuracy of the information provided them pursuant to Section502 (b)(2).  We took reasonable care to insure that the shares of stock sold to these purchasers could not be resold without registration under the Securities Act of 1933 (the “Act”) or an exemption there from and that these purchasers were not underwriters under that Act and in connection there with: (a) made reasonable inquiry to insure that these purchasers were acquiring the shares of stock for themselves and not for any other persons; (b) provided written disclosure to each purchaser that the shares of stock had not been registered under the Act and therefore could not be resold unless registered under the Act or unless an exemption from registration is available; and (c) placed a restrictive legend on the shares of stock stating that they had not been registered under the act and setting forth restrictions on their transferability and sale.  Finally, we made reasonable inquiry to insure that each of these purchasers had such knowledge and experience in financial and business matters that each purchaser was capable of evaluating the merits and risks of investment in the shares of stock and of making an informed investment decision with respect thereto or had consulted with advisors who possess such knowledge and experience.

 

 

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ITEM 6.                      MANAGEMENT’S DISCUSSION AND ANALYSIS

Management Discussion Snapshot.

The following table sets forth certain of our summary selected operating and financial data. The following table should be read in conjunction with all other financial information and analysis presented herein including the Audited Financial Statements for the Years Ended December 31, 2007 and 2006.

Summary Selected Statements of Profits and Losses and

Financial Data which is Derived from Our Audited Financial Statements

		2007				2006
REVENUE			24,784				726,812
COSTS OF GOODS SOLD			3,446				189,131
GROSS PROFIT			21,338				537,681
OPERATING EXPENSES
Professional fees and administrative payroll			1,519,013				146,262
General and administrative expenses			211,501				83,679
Bad debt expense			382,525				-
Inventory impairment			-				-
Depreciation			58,693				58,693
			2,171,732				288,634
INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE)			(2,150,394	)			49,047
OTHER INCOME (EXPENSE)
Interest income			8,818				7,503
Other income			-				-
Interest expense			(5,103	)			(505	)
			23,715				26,998
INCOME BEFORE INCOME (LOSS) TAXES			(2,126,679	)			276,045
Provision for income taxes			-				45,007
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES		$	(2,126,679	)		$	231,038
NET INCOME (LOSS) PER BASIC AND DILUTED SHARES		$	(0.18	)		$	0.03
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING			11,628,563				8,508,606

Revenue and Expenses.

For the year ended December 31, 2006, we had total revenue of $726,812 total costs of goods sold of $189,131, gross profit of $537,681, net income applicable to common shares of $231,038 and net income per basic and diluted shares of $0.03 based on a weighted average of 8,508,606 common shares outstanding.

For the year ended December 31, 2007, we had total revenue of $24,784, total costs of goods sold of $3,446, gross profit of $21,338, net income (loss) applicable to common shares of ($2,126,679), and net income (loss) per basic and diluted shares of ($0.18) based on a weighted average of 11,628,563 common shares outstanding.

 

FOR THE YEARS ENDED DECEMBER 31:		2007				2006
Net cash provided by/(used in):
Operating activities		$	(604,315	)		$	(110,434	)
Investing activities			(203,677	)			422,157
Financing activities			512,913				(9,848	)
Net increase (decrease) in cash and cash equivalents		$	(295,079	)		$	301,875

AT DECEMBER 31:		2007				2006
Non-current assets		$	616,527			$	511,602

FOR THE YEARS ENDED DECEMBER 31:		2007				2006
Net cash provided by/(used in):
Operating activities		$	(604,315	)		$	(110,434	)
Investing activities			(203,677	)			422,157
Financing activities			512,913				(9,848	)
Net increase (decrease) in cash and cash equivalents		$	(295,079	)		$	301,875

 

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INTERNATIONAL CONSOLIDATED COMPANIES, INC.
(FORMELY KNOWN AS SIGN MEDIA SYSTEMS, INC.)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2007 AND 2006
      

 

(2) The Estate of Salvatore Uccello was established due to his passing in February of 2007.