TABLE
OF CONTENTS
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Page
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PART
I
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3
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ITEM
1.
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3
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3
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4
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5
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6
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ITEM
2
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12
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ITEM
3.
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16
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ITEM
4T.
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16
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PART
II
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16
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ITEM
6.
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16
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(Formally
Known as LandBank Group,
Inc. and Subsidiary)
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Consolidated
Balance Sheets
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June
30,
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December
31,
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2008
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2007
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(Unaudited)
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ASSETS
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Current
assets
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Cash
& cash equivalents
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$ |
5,000 |
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$ |
5,000 |
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Prepaid
expenses and other current assets
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11,506 |
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3,741 |
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Total
assets
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$ |
16,506 |
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$ |
8,741 |
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LIABILITIES
AND SHAREHOLDERS' DEFICIT
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Current
liabilities
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Note
payable to related party
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$ |
610,833 |
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$ |
500,000 |
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Shareholders'
deficit
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Common
stock, 2,000,000,000 shares authorized; $0.0001
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par
value; 89,239,920 issued and outstanding
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8,924 |
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8,924 |
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Additional
paid in capital
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1,754,394 |
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1,754,394 |
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Accumulated
deficit
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(2,357,645 |
) |
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(2,254,577 |
) |
Total
shareholders' deficit
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(594,327 |
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(491,259 |
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Total
liabilities and shareholders' deficit
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$ |
16,506 |
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$ |
8,741 |
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The
accompanying notes are an integral part of these financial
statements.
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(Formally
Known as LandBank Group, Inc. and Subsidiary)
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Consolidated
Statements of Operations
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For
theThree Month Periods and Six Month Periods Ended June 30, 2008 and
2007
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(Unaudited)
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For
the three month periods ended
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For
the six month periods ended
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June
30, 2008
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June
30, 2007
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June
30, 2008
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June
30, 2007
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Revenue,
net
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$ |
- |
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$ |
- |
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$ |
- |
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$ |
- |
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Operating
expenses:
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Directors
and officers compensation
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17,625 |
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39,344 |
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63,750 |
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80,688 |
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General
& administrative expenses
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10,330 |
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8,289 |
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17,053 |
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27,099 |
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Total
operating expenses
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27,955 |
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47,633 |
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80,803 |
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107,787 |
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Loss
from operations
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(27,955 |
) |
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(47,633 |
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(80,803 |
) |
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(107,787 |
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Other
expenses:
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Interest
expense
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(11,189 |
) |
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- |
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(21,465 |
) |
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- |
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Net
loss before Income Taxes
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(39,144 |
) |
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(47,633 |
) |
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(102,268 |
) |
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(107,787 |
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Provision
for Income Taxes
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- |
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- |
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800 |
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|
800 |
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Net
loss from continuing operations
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(39,144 |
) |
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(47,633 |
) |
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(103,068 |
) |
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(108,587 |
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Loss
from discontinued operations
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- |
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(211,234 |
) |
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- |
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(289,028 |
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Net
Loss
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$ |
(39,144 |
) |
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$ |
(258,867 |
) |
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$ |
(103,068 |
) |
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$ |
(397,615 |
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Net
Loss per share from Continuing operation
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$ |
(0.0004 |
) |
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$ |
(0.0048 |
) |
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$ |
(0.0012 |
) |
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$ |
(0.0110 |
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Net
Loss per share from Discontinued Operations
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- |
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(0.0213 |
) |
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- |
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(0.0293 |
) |
Basic
& Dilutive Loss per share
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$ |
(0.0004 |
) |
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$ |
(0.0261 |
) |
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$ |
(0.0012 |
) |
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$ |
(0.0402 |
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Basic
& Diluted weighted average shares outstanding
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89,239,920 |
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9,924,561 |
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89,239,920 |
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9,880,193 |
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*
Weighted average number of shares used to compute basic and diluted loss
per share is the same since the effect of dilutive securities is
anti-dilutive.
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The
accompanying notes are an integral part of these financial
statements.
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|
(Formally
Known as LandBank Group, Inc. and Subsidiary)
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Consolidated
Statements of Cash Flows
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For
the Six Month Periods Ended June 30, 2008 and 2007
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(Unaudited)
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2008
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2007
|
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Cash
flows from operating activities:
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Net
loss
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$ |
(103,068 |
) |
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$ |
(397,615 |
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Adjustments
to reconcile net loss to net cash
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used
in operating activities:
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Changes
in current assets and liabilities:
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Prepaid
expenses
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(7,765 |
) |
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- |
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Interest
payable
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|
21,465 |
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- |
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Net
cash used in operating activities from continuing
operations
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(89,368 |
) |
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(397,615 |
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Net
cash used in operating activities from discontinued
operations
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- |
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(132,324 |
) |
Net
cash used in operating activities
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(89,368 |
) |
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(529,939 |
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Cash
flows from investing activities :
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Net
cash used in investing activities from continuing
operations
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- |
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- |
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Net
cash used in investing activities from discontinuing
operations
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- |
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(20,789 |
) |
Net
cash used in investing activities
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- |
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(20,789 |
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Cash
flows from financial activities
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Net
proceeds from issuance of note
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89,368 |
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287,609 |
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Net
cash used in financing activities from discontinuing
operations
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- |
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- |
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Net
cash provided by financial activities
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89,368 |
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|
287,609 |
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Net
change in cash and cash equivalents
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- |
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(263,119 |
) |
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Cash
and cash equivalents - beginning balance
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|
5,000 |
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265,970 |
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Cash
and cash equivalents - ending balance
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$ |
5,000 |
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$ |
2,851 |
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Supplemental
disclosure of cash flows information:
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Cash
received/paid during the period for:
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Interest
|
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$ |
- |
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$ |
24,919 |
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Income
taxes
|
|
$ |
- |
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$ |
1,600 |
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The
accompanying notes are an integral part of these financial
statements.
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NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE
1 - Nature of business and significant accounting policies
Nature of
business
Trist
Holdings, Inc., ("Trist," "Company," “we,” “us,” or “our”) was
incorporated in the State of Delaware as Camryn Information Services, Inc., on
May 13, 1997. We operated for a brief period of time before it ceased operations
on February 25, 1999 when it forfeited its charter for failure to designate a
registered agent. We remained dormant until 2004 when it renewed its operations
with the filing of a Certificate of Renewal and Revival of Charter with the
State of Delaware on October 29, 2004. On November 3, 2004, we filed a
Certificate of Amendment and our name was formally changed from Camryn
Information Services, Inc. to iStorage Networks, Inc. Such change became
effective on November 8, 2004.
On
January 26, 2006, iStorage issued 8,200,000 shares of restricted stock
(post-split) in exchange for all of the assets and liabilities of Landbank, LLC
(“LLC”), a company organized in the State of California in December 2004, and
$140,000 in cash. iStorage changed its name to Landbank Group, Inc. on January
27, 2006. The former members of LLC became approximately 90% owners
of the Company.
The
exchange of shares with Landbank, LLC was accounted for as a reverse acquisition
under the purchase method of accounting since the stockholders of Landbank, LLC
obtained control of the consolidated entity. Accordingly, the merger of the two
companies was recorded as a recapitalization of LLC, where as LLC was treated as
the continuing entity. LLC made bulk acquisitions of parcels of
land, primarily through the real property tax lien foreclosure process. The bulk
acquisitions were then divided into smaller parcels for resale.
On
December 31, 2007, we closed the transactions with Landbank Acquisition LLC
(“Investor”) and Family Products LLC, a member of Investor. Pursuant to the
Agreement, the following transactions (the “Transactions”) occurred at the
closing: (1) we transferred ownership of LLC to Investor (the “LLC
Transfer”), (2) we issued 79,311,256 new shares of common stock to Investor to
increase Investor’s current equity holdings in Company of approximately
fifty-five percent (55%) to approximately ninety-five percent (95%) (the “Share
Issuance”), (3) Investor agreed to provide full indemnity us for LLC’s prior
operations and liabilities, (4) LLC assigned $500,000 in debt to Company
which was owed to Investor (the “Note Assignment”), (5) LLC retained
approximately $500,000 in debt owed to third parties and approximately $2.5
million in debt owed to Investor, and (6) we retained approximately $5,000 in
cash for our working capital.
As the
Transactions were among related parties, no gain or loss was recorded on the
disposal of Landbank, LLC.
Pursuant
to the Transactions, on December 31, 2007, we changed our name to ‘Trist
Holdings, Inc.’. The authorized shares capital was also increased from
100,000,000 shares to 2,000,000,000 shares.
Summary of significant
accounting policies
The
following summary of significant accounting policies used in the preparation of
these consolidated financial statements is in accordance with generally accepted
accounting principles.
Basis of
Presentation
The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of
America.
The
unaudited consolidated financial statements have been prepared by us pursuant to
the rules and regulations of the Securities and Exchange Commission. The
information furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly present the operating results for the respective periods.
Certain information and footnote disclosures normally present in annual
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
pursuant to such rules and regulations. These consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
and footnotes for the year ended December 31, 2007 included in our Annual Report
on Form 10-KSB. The results of the six months periods ended June 30, 2008 are
not necessarily indicative of the results to be expected for the full year
ending December 31, 2008.
Use of
estimates
The
process of preparing consolidated financial statements in conformity with
generally accepted accounting principles requires the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues, and
expenses. Such estimates primarily relate to unsettled transactions and events
as of the date of the financial statements. Accordingly, upon settlement, actual
results may differ from estimated amounts.
Segment
reporting
Statement
of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on our financial statements as substantially all of our
operations were conducted in one industry segment.
Fair Value of Financial
Instruments
Statement
of financial accounting standard No. 107, Disclosures about fair value of
financial instruments, requires that we disclose estimated fair values of
financial instruments. The carrying amounts reported in the statements of
financial position for assets and liabilities qualifying, as financial
instruments are a reasonable estimate of fair value.
Recently issued accounting
pronouncements
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”, which is an amendment of Accounting Research
Bulletin (“ARB”) No. 51. This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. This statement changes the way the consolidated
income statement is presented, thus requiring consolidated net income to be
reported at amounts that include the amounts attributable to both parent and the
noncontrolling interest. This statement is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. Based on current conditions, the Company does not
expect the adoption of SFAS 160 to have a significant impact on its results of
operations or financial position.
In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations.” This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
SFAS 141 that the acquisition method of accounting (which SFAS 141 called
the purchase method) be used for all business combinations and for an acquirer
to be identified for each business combination. This statement defines the
acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as the date that the
acquirer achieves control. This statement requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the statement. 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. The Company does not expect the adoption of SFAS 160 to have
a significant impact on its results of operations or financial
position.
In March,
2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows.
FASB
Statement No. 161 achieves these improvements by requiring disclosure of the
fair values of derivative instruments and their gains and losses in a tabular
format. It also provides more information about an entity’s liquidity by
requiring disclosure of derivative features that are credit risk–related.
Finally, it requires cross-referencing within footnotes to enable financial
statement users to locate important. Based on current conditions, the Company
does not expect the adoption of SFAS 161 to have a significant impact on its
results of operations or financial position.
In May 0f
2008, FSAB issued SFASB No.162, The Hierarchy of Generally Accepted Accounting
Principles. The pronouncement mandates the GAAP hierarchy reside in
the accounting literature as opposed to the audit literature. This
has the practical impact of elevating FASB Statements of Financial Accounting
Concepts in the GAAP hierarchy. This pronouncement will become
effective 60 days following SEC approval. The company does not
believe this pronouncement will impact its financial statements.
In May of
2008, FASB issued SFASB No. 163, Accounting for Financial Guarantee Insurance
Contracts-an interpretation of FASB Statement No. 60. The scope of
the statement is limited to financial guarantee insurance (and reinsurance)
contracts. The pronouncement is effective for fiscal years beginning
after December 31, 2008. The company does not believe this
pronouncement will impact its financial statements.
In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions Are Participating Securities” (FSP EITF
03-6-1). FSP EITF 03-6-1 clarified that all outstanding unvested share-based
payment awards that contain rights to nonforfeitable dividends participate in
undistributed earnings with common shareholders. Awards of this nature are
considered participating securities and the two-class method of computing basic
and diluted earnings per share must be applied. FSP EITF 03-6-1 is effective for
fiscal years beginning after December 15, 2008. The company is currently
assessing the impact of FSP EITF 03-6-1 on its consolidated financial position
and results of operations.
In June
2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity’s Own Stock” (EITF 07-5). EITF
07-5 provides that an entity should use a two step approach to evaluate whether
an equity-linked financial instrument (or embedded feature) is indexed to its
own stock, including evaluating the instrument’s contingent exercise and
settlement provisions. It also clarifies on the impact of foreign currency
denominated strike prices and market-based employee stock option valuation
instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning
after December 15, 2008. The company is currently assessing the impact of EITF
07-5 on its consolidated financial position and results of
operations.
In June
2008, the FASB ratified EITF Issue No. 08-3, “Accounting for Lessees for
Maintenance Deposits Under Lease Arrangements” (EITF 08-3). EITF 08-3 provides
guidance for accounting for nonrefundable maintenance deposits. It also provides
revenue recognition accounting guidance for the lessor. EITF 08-3 is effective
for fiscal years beginning after December 15, 2008. The company is currently
assessing the impact of EITF 08-3 on its consolidated financial position and
results of operations.
NOTE
2 - Discontinued operations
On
December 31, 2007, we closed the transactions contemplated under the Securities
Exchange Agreement dated October 31, 2007 with Landbank Acquisition LLC
(“Investor”) and Family Products LLC, a member of Investor, who is a party to
the Agreement for the limited purpose of providing indemnification to the
Company thereunder. At the time the Agreement was executed, and
immediately prior to the closing of the transaction contemplated therein,
Investor was the owner of 55% of our outstanding capital stock.
Pursuant
to the Agreement, the following transactions occurred at the
closing: (1) we transferred ownership of LLC to Investor, (2) we
issued 79,311,256 new shares of common stock to Investor to increase Investor’s
current equity holdings in Company of approximately fifty-five percent (55%) to
approximately ninety-five percent (95%), (3) Investor agreed to provide full
indemnity to us for LLC’s prior operations and liabilities, (4) LLC
assigned $500,000 in debt to Company which was owed to Investor, (5) LLC
retained approximately$500,000 in debt owed to third parties and approximately
$2.5 million in debt owed to Investor, and (6) we retained approximately$5,000
in cash for our working capital.
In
connection with the Note Transfer, we entered into a note assignment with LLC
and Investor and issued a promissory note to Investor in the principal amount of
$500,000.
Investor
and the Company also entered into a Registration Rights Agreement between them
at the closing (the “Registration Rights Agreement”) pursuant to which the
Investor received certain demand and piggyback registration rights with respect
to the shares received in the Share Issuance.
The
consummation of the Transactions was subject to the receipt of customary closing
conditions, each of which occurred prior to the closing, including approval of
the LLC Transfer by the Corporation’s stockholders and the amendment of our
Certificate of Incorporation to change our name and to increase the number of
authorized shares of Common Stock from 100,000,000 to
2,000,000,000.
The
components of loss from operations related to the entity held for disposal for
the six months ended June 30, 2007 are shown below.
|
Six
months periods ended
June
30, 2007
|
|
|
|
|
|
Revenue,
net
|
|
$
|
1,557,327
|
|
|
|
|
|
|
Cost
of revenue
|
|
|
1,149,282
|
|
|
|
|
|
|
Gross
profit
|
|
|
408,405
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
General
& administrative expenses
|
|
|
592,199
|
|
Total
operating expenses
|
|
|
(592,999
|
)
|
|
|
|
|
|
Loss
from operations
|
|
|
(184,154
|
)
|
|
|
|
|
|
Non-operating
expenses
|
|
|
|
|
Other
income
|
|
|
|
|
Interest
expense
|
|
|
(104,074
|
)
|
|
|
|
|
|
Net
loss before income tax
|
|
|
(288,228
|
)
|
|
|
|
|
|
Provision
for income taxes
|
|
|
800
|
|
|
|
|
|
|
Net
Loss from Discontinued Operations
|
|
$
|
(289,028
|
)
|
NOTE
3 - Note Payable to Related Party
On
December 31, 2007, we executed a Demand Promissory Note (the “Note”) payable to
Landbank Acquisition LLC, $500,000 with simple interest on the unpaid principal
from the date of the note at the rate of eight percent (8%) per
annum. The Note is due on demand. This Note was being delivered in
connection with the LLC Transfer as described in Note 2. We recorded
an interest expense of $11,189 and $21,465 for the three and six months period
ended June 30, 2008, respectively. The balance of the Note, including accrued
interest, at June 30, 2008 amounted to $610.833.
NOTE
4 – Related-party transactions
Effective
September 24, 2007, the Board of Directors (the “Board”) of Landbank Group, Inc.
(the "Company") appointed Eric Stoppenhagen as Interim President and Secretary
of the Company to fill the vacancies created upon the resignations of certain of
its officers effective the same date. Additionally, Mr. Stoppenhagen
was also appointed Interim Chief Financial Officer of the Company effective
November 15, 2007 in light of the current Chief Financial Officer’s
resignation.
On
September 27, 2007, the Company entered into a Consulting Agreement with Venor
Consulting, Inc. (“Venor”), a company owned by Mr. Stoppenhagen. Under the
terms of the consulting agreement, Venor will perform certain consulting
services for the Company with respect to, among other things, the provision of
executive services (including, without limitation, the services of Mr. Eric
Stoppenhagen, the Company's Interim President and Secretary) for a period of six
months. The Company will pay Venor a monthly fee for certain of the
services to be provided, with additional services to be billed at an hourly
rate.
Mr.
Stoppenhagen also serves as President and Secretary of Trestle Holdings, Inc., a
position he has held since September 2006. From June 2003 to
September 2006, Mr. Stoppenhagen served as Vice President of Finance for Trestle
Acquisition Corp. From 2001 to 2002, he served as Director of Finance
for Stromberg Consulting, Inc., a change management consulting
firm.
NOTE
5 - 2006 Stock Incentive Plan
We have
elected to adopt the detailed method provided in SFAS No. 123(R) for calculating
the beginning balance of the additional paid-in capital pool (“APIC pool”)
related to the tax effects of employee stock-based compensation, and to
determine the subsequent impact on the APIC pool and Consolidated Statements of
Cash Flows of the income tax effects of employee stock-based compensation awards
that are outstanding upon the adoption of SFAS No. 123(R).
On March
13, 2007, we granted an option to its prior Chief Financial Officer (“CFO”) to
purchase 100,000 shares of our common stock at an exercise price of $0.02 per
share. The option vests over a four (4) year period, with 25 % vesting of the
shares vesting on March 12, 2008 and the remaining shares vesting at 1/48th per
month thereafter until the option is vested and exercisable with respect to 100%
of the shares. The term of the option is ten (10) years, with an expiration date
of March 12, 2017. The option grant was valued at $2,000 as of the date of grant
using the Black-Sholes option pricing model in accordance with FAS 123R using
the following assumptions: volatility of 469.34%, Wall Street Journal prime
interest rate of 4.69%, zero dividend yield, and an expected life of four (4)
years. We expensed the entire $2,000 value of the option during the three month
period ended March 31, 2007.
On August
10, 2007, we terminated all of its option grants, which consisted of grants to
four (4) of our five (5) Board members and its Chief Financial
Officer.
NOTE
6 - Going Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
company as a going concern. However, we have an accumulated deficit of
$2,357,645 as of June 30, 2008. Our total liabilities exceeded its total assets
by $594,327 as of June 30, 2008. In view of the matters described above,
recoverability of a major portion of the recorded asset amounts shown in the
accompanying consolidated balance sheet is dependent upon our continued
operations, which in turn is dependent upon our ability to raise additional
capital, obtain financing and succeed in seeking out suitable candidates for a
business combination with a private company. 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 should we be unable to continue as a going concern.
Furthermore,
the principal shareholder, Landbank Acquisition LLC has demonstrated its ability
and willingness to lend working capital to us and committed to doing so into the
future. To the extent it is unwilling to provide working capital, we will not be
able to continue.
The
information contained in this Form 10-Q is intended to update the information
contained in our Annual Report on Form 10-KSB for the year ended December 31,
2007 and presumes that readers have access to, and will have read, the
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and other information contained in such Form 10-KSB. The
following discussion and analysis also should be read together with our
condensed consolidated financial statements and the notes to the condensed
consolidated financial statements included elsewhere in this Form
10-Q.
The
following discussion contains certain statements that may be deemed
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements appear in a number of
places in this Report, including, without limitation, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations.” These
statements are not guarantees of future performance and involve risks,
uncertainties and requirements that are difficult to predict or are beyond our
control. Forward-looking statements speak only as of the date of this
quarterly report. You should not put undue reliance on any forward-looking
statements. We strongly encourage investors to carefully read the
factors described in our Annual Report on Form 10-KSB for the year ended
December 31, 2007 in the section entitled “Risk Factors” for a description of
certain risks that could, among other things, cause actual results to differ
from these forward-looking statements. We assume no responsibility to update the
forward-looking statements contained in this quarterly report on Form 10-QThe
following should also be read in conjunction with the unaudited Consolidated
Financial Statements and notes thereto that appear elsewhere in this
report.
Overview
We were
incorporated in the State of Delaware as Camryn Information Services, Inc., on
May 13, 1997. We operated for a brief period of time before it ceased operations
on February 25, 1999 when it forfeited its charter for failure to designate a
registered agent. We remained dormant until 2004 when it renewed its operations
with the filing of a Certificate of Renewal and Revival of Charter with the
State of Delaware on October 29, 2004. On November 3, 2004, we filed a
Certificate of Amendment and our name was formally changed from Camryn
Information Services, Inc. to iStorage Networks, Inc. Such change became
effective on November 8, 2004. We subsequently changed its name to Landbank
Group, Inc., on January 27, 2006, following the acquisition of Landbank, LLC, a
California limited liability company (“LLC”). We previously engaged
in business through LLC which made bulk acquisitions of parcels of land,
primarily through the real property tax lien foreclosure process. The bulk
acquisitions were then divided into smaller parcels for resale.
On
December 31, 2007, we transferred all of its respective rights in and to LLC and
its business and changed its name to Trist Holdings, Inc. As a result of
such transfer, we are a non-operating public company and our operating results
through December 31, 2007 are not meaningful to our future results. We seek
suitable candidates for a business combination with a private
company.
Critical Accounting Policies
and Estimates
The
preparation our financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates, judgments and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of expenses during the
reporting period. On an ongoing basis, we evaluate our estimates which are based
on historical experience and on various other assumptions that are believed to
be reasonable under the circumstances. The result of these evaluations forms the
basis for making judgments about the carrying values of assets and liabilities
and the reported amount of expenses that are not readily apparent from other
sources. Actual results may differ from these estimates under different
assumptions. The following accounting policies require significant management
judgments and estimates:
We
account for our business acquisitions under the purchase method of accounting in
accordance with SFAS 141, "Business Combinations." The total cost of
acquisitions is allocated to the underlying net assets, based on their
respective estimated fair values. The excess of the purchase price over the
estimated fair value of the tangible net assets acquired is recorded as
intangibles. Determining the fair value of assets acquired and liabilities
assumed requires management's judgment and often involves the use of significant
estimates and assumptions, including assumptions with respect to future cash
inflows and outflows, discount rates, asset lives, and market multiples, among
other items.
We assess
the potential impairment of long-lived assets and identifiable intangibles under
the guidance of SFAS 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets." which states that a long-lived asset should be tested for
recoverability whenever events or changes in circumstances indicate that the
carrying amount of the long-lived asset exceeds its fair value. An impairment
loss is recognized only if the carrying amount of the long-lived asset exceeds
its fair value and is not recoverable.
We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. There can be no assurance that
actual results will not differ from these estimates.
For the Quarters and Six
Months Ended June 30, 2008 and 2007
Results
of Operations
The
information below represents our historical numbers. These numbers
are not meaningful going forward due to the transfer of all of our business
lines.
Operating
Expenses
Operating
expenses were $27,955 and $47,633 for the quarters ended June 30, 2008 and 2007,
respectively. Operating expenses were $80,803 and $107,787 for the six months
ended June 30, 2008 and 2007, respectively. The decrease in
operating expenses was primarily due to the sale of the operating
subsidiary.
Loss
from operations of divested subsidiary
The loss
from the operations of the divested subsidiary was $211,234 and $289,028 for the
quarter and six months ended June 30, 2007, respectively. The
subsidiary was divested on December 31, 2007.
Interest
Expense and Other
Interest
expenses were $11,189 and zero for the quarters ended June 30, 2008 and
2007, respectively, an increase of $11,189. Interest expenses
were $21,465 and zero for the six months ended June 30, 2008 and 2007,
respectively, an increase of $21,465. The increase is due from
increase in debt.
Liquidity
and Capital Resources
Net cash
used in operating activities was $89,368 and $529,939 in the six months ended
June 30, 2008 and 2007, respectively. The decrease was primarily due
to a decrease in loss attributable to the prior operations of the divested
subsidiary.
Net cash
provided by financing activities was $89,368 and $287,609 in the six months
ended June 30, 2008 and 2007, respectively. In 2007, these funds were
borrowed from our divested subsidiary. In 2008, these funds were borrowed from a
related party.
We have
suffered recurring losses from operations and has an accumulated deficit of
$2,357,645 at June 30, 2008. Currently, we are a non-operating public
company. We are seeking out suitable candidates for a business combination with
a private company. We anticipate that our existing cash and cash
equivalents will not be sufficient to fund our business needs. We
will rely on funding from Investor for our cash needs. Our ability to
continue may prove more expensive than we currently anticipate and we may incur
significant additional costs and expenses in connection with seeking a suitable
transaction.
Inflation and
Seasonality
Inflation
has not been material to us during the past five years. Seasonality has not been
material to us.
Recent
Accounting Pronouncements
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”, which is an amendment of Accounting Research
Bulletin (“ARB”) No. 51. This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. This statement changes the way the consolidated
income statement is presented, thus requiring consolidated net income to be
reported at amounts that include the amounts attributable to both parent and the
noncontrolling interest. This statement is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. Based on current conditions, we do not expect the
adoption of SFAS 160 to have a significant impact on its results of operations
or financial position.
In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations.” This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
SFAS 141 that the acquisition method of accounting (which SFAS 141 called
the purchase method) be used for all business combinations and for an acquirer
to be identified for each business combination. This statement defines the
acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as the date that the
acquirer achieves control. This statement requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the statement. 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. We do not expect the adoption of SFAS 160 to have a
significant impact on its results of operations or financial
position.
In March,
2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows.
FASB
Statement No. 161 achieves these improvements by requiring disclosure of the
fair values of derivative instruments and their gains and losses in a tabular
format. It also provides more information about an entity’s liquidity by
requiring disclosure of derivative features that are credit risk–related.
Finally, it requires cross-referencing within footnotes to enable financial
statement users to locate important. Based on current conditions, we do not
expect the adoption of SFAS 161 to have a significant impact on its results of
operations or financial position.
In April
2008, the FASB issued FSP 142-3, “Determination of the Useful Life of Intangible
Assets”, (FSP 142-3). FSP 142-3 amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible
Assets”. FSP 142-3 is effective for fiscal years beginning after December 15,
2008. We are currently assessing the impact of FSP 142-3 on its consolidated
financial position and results of operations.
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS No. 162). SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements. SFAS No. 162 is effective 60 days following
the SEC’s approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles”. The implementation of this standard will not
have a material impact on our consolidated financial position and results of
operations.
In June
2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted
in Share-Based Payment Transactions Are Participating Securities” (FSP EITF
03-6-1). FSP EITF 03-6-1 clarified that all outstanding unvested share-based
payment awards that contain rights to nonforfeitable dividends participate in
undistributed earnings with common shareholders. Awards of this nature are
considered participating securities and the two-class method of computing basic
and diluted earnings per share must be applied. FSP EITF 03-6-1 is effective for
fiscal years beginning after December 15, 2008. We are currently assessing the
impact of FSP EITF 03-6-1 on its consolidated financial position and results of
operations.
In June
2008, the FASB ratified EITF Issue No. 07-5, “Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity’s Own Stock” (EITF 07-5). EITF
07-5 provides that an entity should use a two step approach to evaluate whether
an equity-linked financial instrument (or embedded feature) is indexed to its
own stock, including evaluating the instrument’s contingent exercise and
settlement provisions. It also clarifies on the impact of foreign currency
denominated strike prices and market-based employee stock option valuation
instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning
after December 15, 2008. We are currently assessing the impact of EITF 07-5 on
its consolidated financial position and results of operations.
In June
2008, the FASB ratified EITF Issue No. 08-3, “Accounting for Lessees for
Maintenance Deposits Under Lease Arrangements” (EITF 08-3). EITF 08-3 provides
guidance for accounting for nonrefundable maintenance deposits. It also provides
revenue recognition accounting guidance for the lessor. EITF 08-3 is effective
for fiscal years beginning after December 15, 2008. We are currently assessing
the impact of EITF 08-3 on its consolidated financial position and results of
operations.
A smaller
reporting company is not required to provide the information required by
this Item.
EVALUATION OF DISCLOSURE CONTROLS AND
PROCEDURES. Our management, with the participation of our
president and our chief financial officer, carried out an evaluation of the
effectiveness of our "disclosure controls and procedures" (as defined in
the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(e)
and 15-d-15(e)) as of the end of the period covered by this report (the
"Evaluation Date"). Based upon that evaluation, our president and our
chief financial officer concluded that, as of the Evaluation Date, our
disclosure controls and procedures are effective to ensure that information
required to be disclosed by us in the reports that we file or submit under
the Exchange Act (i) is recorded, processed, summarized and reported,
within the time periods specified in the SEC's rules and forms and (ii) is
accumulated and communicated to our management, including our president and
our chief financial officer, as appropriate to allow timely decisions
regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER
FINANCIAL REPORTING. There were no changes in our
internal controls over financial reporting that occurred during the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.
Exhibit
|
|
Description
|
|
|
|
31
|
|
|
|
|
|
32
|
|
|
In
accordance with the requirements of the Exchange Act, the registrant has caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
TRIST
HOLDINGS, INC.
|
|
|
|
|
|
|
|
Date:
August 12, 2008
|
/s/ Eric
Stoppenhagen
|
|
|
Name:
Eric Stoppenhagen
|
|
|
Title: Interim
President
|
|
|
|
|
|
|
|
EXHIBIT
INDEX
Exhibit
|
|
Description
|
|
|
|
31
|
|
|
|
|
|
32
|
|
|