form10-q.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
ý QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
Quarterly Period Ended March 31, 2009
or
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the transition period from
to
Commission
File Number 000-52315
Trist
Holdings, Inc.
(Exact
name of registrant issuer as specified in its charter)
|
Delaware
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|
20-1915083
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(State
or other jurisdiction of incorporation or organization)
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|
(I.R.S.
Employer Identification No.)
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7030 Hayvenhurst
Avenue, Van Nuys, CA 91406
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(Address
of principal executive offices, including zip code)
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Registrant’s
phone number, including area code (949)
903-0468
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|
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Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES ý
NO o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer o
Accelerated Filer o
Non-accelerated Filer o Smaller reporting
company ý
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes ý No o
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
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Class
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Outstanding
at May 14, 2009
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Common
Stock, $.0001 par value
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89,239,920
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TRIST
HOLDINGS, INC.
INDEX
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PART
I
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FINANCIAL
INFORMATION
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ITEM
1.
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FINANCIAL
STATEMENTS:
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Balance
Sheets — March 31, 2009 (Unaudited) and December 31, 2008
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Statements
of Operations (Unaudited) — Quarters ended March 31, 2009 and
2008
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Statements
of Cash Flows (Unaudited) — Quarters ended March 31, 2009 and
2008
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Notes
to Financial Statements
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ITEM
2.
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MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
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ITEM
3.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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|
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ITEM
4.
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CONTROLS
AND PROCEDURES
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|
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PART
II
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OTHER
INFORMATION
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PART I -
FINANCIAL INFORMATION
TRIST
HOLDINGS, INC.
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March
31
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December
31
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2009
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2008
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ASSETS
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(Unaudited)
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CURRENT
ASSETS
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Cash
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$
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5,000
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$
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5,000
|
|
|
Prepaid
expenses and other current assets
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11,227
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|
7,798
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|
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TOTAL
CURRENT ASSETS
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$
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16,227
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$
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12,798
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|
|
|
|
|
|
|
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LIABILITIES
AND STOCKHOLDERS' DEFICIT
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CURRENT
LIABILITIES:
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|
|
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Due
to related party
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$
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266,876
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$
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195,327
|
|
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Note
payable to related party
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500,000
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|
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500,000
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TOTAL
CURRENT LIABILITIES
|
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766,876
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695,327
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|
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STOCKHOLDERS'
DEFICIT:
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Common
stock, $.0001 par value, 2,000,000,000 shares authorized, 89,239,920
issued and outstanding at March 31, 2009 and December 31,
2008
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8,924
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|
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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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|
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Accumulated
deficit
|
|
(2,513,967
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)
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(2,445,847
|
)
|
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Total
stockholders' deficit
|
|
(750,649)
|
|
|
(682,529
|
)
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
16,227
|
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$
|
12,798
|
|
The
accompanying notes are an integral part of these financial
statements.
TRIST
HOLDINGS, INC.
(UNAUDITED)
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Three
Months Ended March 31,
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2009
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2008
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REVENUES
|
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$
|
|
$
|
|
|
COST
OF SALES
|
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—
|
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—
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GROSS
PROFIT
|
|
—
|
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—
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OPERATING
EXPENSES
|
|
|
|
|
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Selling,
general and administrative expenses
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55,792
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52,848
|
|
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Total
operating expenses
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55,792
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52,848
|
|
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LOSS
FROM OPERATIONS
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|
(55,792
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)
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(52,848
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)
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Interest
expense and other, net
|
|
(12,328
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)
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(11,076
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)
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NET
LOSS
|
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$
(68,120
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)
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$
(63,924
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)
|
|
|
|
|
|
|
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NET
LOSS PER SHARE—Basic and diluted
|
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$
(0.00
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)
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$
(0.00
|
)
|
|
|
|
|
|
|
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WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING—Basic and diluted
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89,239,920
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89,239,920
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
TRIST
HOLDINGS, INC.
(UNAUDITED)
|
|
|
Three
Months Ended March 31,
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|
|
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2009
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|
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2008
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|
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OPERATING
ACTIVITIES:
|
|
|
|
|
|
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|
Net
loss
|
|
$ |
(68,120 |
) |
|
$ |
(63,924 |
) |
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Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
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Prepaid
expenses and other assets
|
|
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(3,429
|
) |
|
|
235 |
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Due
to related party
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12,328 |
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|
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10,276 |
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Net
cash used in operating activities
|
|
|
(59,221
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) |
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(53,413
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) |
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FINANCING
ACTIVITIES:
|
|
|
|
|
|
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Net
proceeds from issuance of note payable
|
|
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59,221 |
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53,413 |
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Net
cash provided by financing activities
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59,221 |
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53,413 |
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NET
INCREASE (DECREASE) IN CASH
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|
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— |
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— |
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CASH,
Beginning of period
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|
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5,000 |
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|
|
5,000 |
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CASH,
End of period
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|
$ |
5,000 |
|
|
$ |
5,000 |
|
The
accompanying notes are an integral part of these financial
statements.
TRIST
HOLDINGS, INC.
(UNAUDITED)
NOTE
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Organization
— 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 we ceased operations on February 25, 1999 when we
forfeited our charter for failure to designate a registered agent. We remained
dormant until 2004 when we renewed our 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 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. 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 to 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.
Since the
closing of the Transactions, we have been seeking suitable candidates for a
business combination with a private company. The Company’s principal
business objective for the next 12 months and beyond such time will be to
achieve long-term growth potential through a combination with an operating
business. The Company will not restrict its potential candidate target companies
to any specific business, industry or geographical location and, thus, may
acquire any type of business.
Going Concern
— The accompanying financial statements have been prepared assuming that
we will continue as a going concern. We have suffered recurring
losses from operations since our inception and have an accumulated deficit of
$2,513,967 at March 31, 2009. The financial statements do not include
any adjustments relating to the recoverability and classification of recorded
asset amounts or amounts and classifications of liabilities that might be
necessary should we be unable to continue our existence. The recovery
of our assets is dependent upon continued operations of the
Company.
In addition, our recovery is dependent
upon future events, the outcome of which is undetermined. We intend
to continue to attempt to raise additional capital, but there can be no
certainty that such efforts will be successful.
Basis of Presentation — The accompanying financial statements of Trist
Holdings, Inc. have been prepared in conformity with accounting principles
generally accepted in the United States of America (“ U.S. GAAP”) for interim
financial information and pursuant to the instructions to Form 10-Q and Article
10 of Regulation S-X of the Securities Exchange Commission. Accordingly, these
interim financial statements do not include all of the information and footnotes
required by US GAAP for annual financial statements. 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 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 financial statements should be read in conjunction with the
audited financial statements and footnotes for the year ended December 31, 2008
included in our Annual Report on Form 10-K. The results of the three month ended
March 31, 2009 are not necessarily indicative of the results to be expected for
the full year ending December 31, 2009.
Use of Estimates
— The preparation of financial statements in conformity with generally
accepted accounting principles 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 and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Cash and Cash
Equivalents — We consider investments with original maturities of
90 days or less to be cash equivalents. The Company has no significant cash
equivalents as of March 31, 2009 and December 31, 2008.
Income Taxes
—We record income taxes in accordance with the provisions of Statement of
Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income
Taxes.” The standard requires, among other provisions, an asset and
liability approach to recognize deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the financial
statement carrying amounts and tax basis of assets and
liabilities. Valuation allowances are provided if, based upon the
weight of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized.
Net Loss Per
Share — The Company computes net loss per share in accordance with SFAS
No. 128, “Earnings per Share,” and Securities and Exchange Commission (“SEC”)
Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of SFAS No.
128 and SAB 98, basic and diluted net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average
number of shares of common stock outstanding during the
period.
Concentration of
Credit Risk — Financial instruments that potentially subject the Company
to a concentration of credit risk consist of cash. The Company
maintains its cash with high credit quality financial institutions; at times,
such balances with any one financial institution may exceed FDIC insured
limits.
Fair Value of
Financial Instruments — Statement of Financial Accounting Standards
(“SFAS”) No. 107, Disclosures about Fair Value of Financial Instruments,
requires disclosure of fair value information about financial instruments when
it is practicable to estimate that value. Management believes that the carrying
amounts of the Company’s financial instruments consisting primarily of cash, due
to related party, and notes payable to related party are representative of their
fair values as of March 31, 2009 and December 31, 2008, due to their short-term
maturities.
Significant
Recent Accounting Pronouncements
In May
2008, the FASB issued FASB Staff Position (“FSP”) No. APB 14-1 entitled Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement). This FSP amends the following pronouncements (among several
others) issued by the FASB’s Emerging Issues Task Force (“EITF”): Issue
No. 98-5, Accounting for
Convertible
Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion
Ratios, and Issue No. 00-27 Application of Issue No. 98-5 to
Certain Convertible Instruments.
FSP APB
14-1 applies to convertible debt instruments that, by their stated terms, may be
settled in cash or other assets upon conversion (including partial cash
settlement), unless the embedded conversion option must be separately accounted
for as a derivative under SFAS No. 133. Convertible preferred shares that are
mandatorily redeemable financial instruments and classified as liabilities under
SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity are within the scope of FSP APB 14-1; however, convertible
preferred stock reported as equity (or temporary equity) is not within the scope
of this pronouncement. In addition, FSP APB 14-1 does not apply to convertible
debt instruments that require or permit settlement in cash (or other assets)
upon conversion when the holders of the underlying stock would receive the same
form of consideration in exchange for their shares.
FSP APB
14-1 requires that both the equity component (the conversion feature) and
liability component of convertible debt within its scope be separately accounted
for at estimated fair value in order to reflect the entity’s nonconvertible
borrowing rate when interest cost is recognized in subsequent periods. The
excess of the principal amount of the liability component over its carrying
value must be amortized to interest cost using the interest method described in
APB Opinion No. 21 Interest on
Receivables and Payables. The equity component is not re-measured as long
as it continues to meet the conditions for equity classification in EITF Issue
No. 00-19 Accounting for
Derivative Financial
Instruments Indexed to,
and Potentially Settled in, a Company’s Own Stock. FSP APB 14-1 also
provides guidance on de-recognition as it relates to modifications, exchanges
and induced conversions of debt instruments within its scope. This FSP is
effective for financial instruments issued during fiscal years beginning after
December 15, 2008, and interim periods within those years; early adoption
is not permitted. However, FSP APB 14-1 must be applied retrospectively to all
periods presented, and thus may impact instruments within its scope that were
outstanding at any time during such prior periods. Management has not determined
the effect (if any) of this FSP on the Company’s future interim and annual
financial statements.
In June
2008, the FASB ratified EITF Issue No. 07-5 entitled Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock. This
pronouncement applies to any freestanding financial instrument or embedded
feature that has all the characteristics of a derivative set forth in paragraphs
6-9 of SFAS No. 133 for purposes of determining whether such instrument or
embedded feature qualifies for the first part of the scope exception set forth
in paragraph 11(a) of SFAS No. 133. EITF Issue No. 07-5 also applies to any
freestanding financial instrument that is potentially settled in an entity’s own
stock, regardless of whether the instrument has all the characteristics of a
derivative set forth in SFAS No. 133, for purposes of determining whether the
instrument is within the scope of EITF Issue No. 00-19. EITF Issue No. 07-5 does
not apply to share-based payment awards within the scope of SFAS No. 123(R) for
purposes of determining whether such instruments are classified as liability or
equity. EITF Issue No. 01-6 (“The Meaning of ‘Indexed to a Company’s Own
Stock’”) has been superseded.
As more
fully explained below, the objective of EITF Issue No. 07-5 is to determine
whether a financial instrument or an embedded feature qualifies for the first
part of the scope exception (“indexed to its own stock”) described in paragraph
11(a) of SFAS No. 133. If so, and if the financial instrument or embedded
feature has all the characteristics described in paragraphs 6-9 of SFAS No. 133,
it must be analyzed under other GAAP [including EITF Issue No. 05-2 The Meaning of ‘Conventional
Convertible Debt Instrument’ in Issue No. 00-19 to determine whether it
is classified in stockholders’ equity - or would be if it were a freestanding
instrument. If a financial instrument is otherwise a derivative as defined by
SFAS No. 133 and does not qualify under the exception described above, it must
be reported as a derivative and accounted for at estimated fair value; whether
such an embedded feature must be separated from the host contract (and accounted
for as a derivative) is based on other criteria described in SFAS No. 133. If
the conversion feature embedded in a convertible debt instrument meets both
elements of the scope exception in paragraph 11(a) of SFAS No. 133, it would not
be separated from the host contract or accounted for as a derivative by the
issuer.
Under
EITF Issue No. 07-5, an entity must determine whether an equity-linked financial
instrument or embedded feature is indexed to its own stock by using the
following two-step approach: (1) evaluate the instrument’s contingent exercise
provisions (if any), and (2) evaluate its settlement provisions. An exercise
contingency (as defined) will not preclude an instrument or an embedded feature
from being considered indexed to an entity’s own stock provided that it is based
on either (a) an observable market other than the market for the issuer’s
capital stock or (b) an observable index other than one calculated or measured
solely by reference to the issuer’s own operations (for example, revenues or
EBITDA). If the instrument qualifies under Step 1, it is then analyzed under
Step 2. An instrument (or embedded feature) is considered indexed to an entity’s
own stock if its settlement amount will equal the difference between the
estimated fair value of a fixed number of the entity’s equity shares and either
a fixed monetary amount or a fixed amount of a debt instrument issued by the
entity. With very few exceptions - unless the only variables that could affect
the settlement amount would be inputs to the estimated fair value of a
“fixed-for-fixed” forward or option on equity shares, an instrument’s strike
price or the number of shares used to calculate the settlement are not
considered fixed if its terms provide for any potential adjustment, regardless
of the probability of the adjustment or whether any such adjustments are within
the entity’s control. As a result, standard anti-dilution clauses will
apparently preclude an instrument from being considered “indexed to its own
stock.”
EITF
Issue No. 07-5 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those years. The
guidance in such pronouncement must be applied to outstanding instruments as of
the beginning of the fiscal year in which it is adopted, with a
cumulative-effect adjustment of opening retained earnings (or other appropriate
components of equity or net assets). Management has not determined the effect
(if any) of EITF Issue No. 07-5 on the Company’s future interim and annual
financial statements.
In
February 2008, the FASB issued FASB Staff Position No. FAS 157-2
(FSP 157-2), Effective
Date of FASB
Statement
No. 157. FSP 157-2 deferred the effective date of
SFAS 157, Fair Value
Measurements, for nonfinancial assets and nonfinancial liabilities,
except for items that are recognized or disclosed at fair value in the financial
statements on a recurring basis, until fiscal years beginning after
November 15, 2008. As a result of FSP 157-2, we adopted SFAS 157
for our nonfinancial assets and nonfinancial liabilities as of the beginning of
the year ending December 31, 2009. The adoption of SFAS 157 for these assets and
liabilities did not have a material impact on our financial position, results of
operations or cash flows.
In March
2008, the FASB issued SFAS 161, Disclosures About Derivative
Instruments and Hedging
Activities — an amendment of FASB Statement No. 133.
SFAS 161 expands quarterly disclosure requirements in SFAS 133 about
an entity’s derivative instruments and hedging activities. SFAS 161 became
effective for us as of the beginning of the year ending December 31, 2009. The
adoption of SFAS 161 in the first quarter of 2009 did not have a material impact
on our financial position, results of operations or cash flows.
In
February 2009, the FASB issued FSP FAS 141R-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies. FSP FAS 141R-1 amends the
guidance in SFAS 141R about the accounting for assets acquired and liabilities
assumed in a business combination that arise from contingencies that would be
within the scope of SFAS 5 if not acquired or assumed in a business combination.
FSP FAS 141R-1 is effective for us at the beginning of our year ending December
31, 2009 and therefore will apply to any business combination that we might
enter into after December 27, 2008. We do not expect that the adoption of FSP
FAS 141R-1 will have a material impact on our financial position, results of
operations or cash flows.
In April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments. FSP FAS 107-1 and APB 28-1 amend SFAS 107,
Disclosures about Fair Value
of Financial Instruments to require disclosures about fair value of
financial instruments for interim reporting periods as well as in annual
financial statements. This FSP also amends ABP 28 to require those disclosures
in summarized financial information at interim reporting periods. We will adopt
FSP FAS 107-1 and APB 28-1 in our second fiscal quarter ending on June 30, 2009.
We do not expect that the adoption of FSP FAS 107-1 and APB 28-1 will have a
material impact on our financial position, results of operations or cash
flows.
In April
2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are not Orderly. FSP FAS
157-4 provides additional guidance for estimating fair value in accordance with
SFAS 157, Fair Value
Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. We are
required to adopt FSP FAS 157-4 in our second fiscal quarter ending on June 30,
2009. We have not yet evaluated the impact, if any, the adoption of this
Statement will have on our financial position, results of operations or cash
flows.
NOTE
2 – 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. Landbank Acquisition LLC
is related to the Company through common major shareholders. The Note is due on
demand. This Note was delivered in connection with the LLC Transfer as described
in Note 2. We recorded an interest expense of $12,328 and 11,076 for
the quarters ended March 31, 2009 and 2008, respectively. The accrued interest,
at March 31, 2009 and December 31, 2008 amounted to $58,035 and $45,707,
respectively, was included as part of amount due to related party.
NOTE
3 – 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
$2,513,967 as of March 31, 2009. Our total liabilities exceeded its total assets
by $750,649 as of March 31, 2009. In view of the matters described above,
recoverability of a major portion of the recorded asset amounts shown in the
accompanying 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-K for the year ended December 31, 2008
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-K. 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
forward-looking statements can be identified by the use of words such as
“believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,”
“projects,” “expects,” “may,” “will,” or “should” or other variations or similar
words. 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. Forward-looking statements reflect
management’s current expectations and are inherently uncertain. We
strongly encourage investors to carefully read the factors described in our
Annual Report on Form 10-K for the year ended December 31, 2008 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-Q. The following should also be
read in conjunction with the unaudited 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 we ceased operations
on February 25, 1999 when we forfeited our charter for failure to designate a
registered agent. We remained dormant until 2004 when we renewed our 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 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 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 Investor and Family Products
LLC, a member of Investor. 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.
Since the
closing of the Transactions, we have been seeking suitable candidates for a
business combination with a private company. The Company’s principal
business objective for the next 12 months and beyond such time will be to
achieve long-term growth potential through a combination with an operating
business. The Company will not restrict its potential candidate target companies
to any specific business, industry or geographical location and, thus, may
acquire any type of business.
Critical Accounting Policies
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 out 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 Ended March
31, 2009 and 2008
Results
of Operations
Selling,
General and Administrative Expenses
Selling,
general and administrative expenses were $55,792 and $52,848 for the quarters
ended March 31, 2009 and 2008, respectively.
Interest
Income, Interest Expense and Other
Interest
expense and other, net was $12,328 and $11,076 for the quarters ended March 31,
2009 and 2008, respectively, an increase in expense of $1,252. The
increase is principally due to increased debt.
Liquidity
and Capital Resources
Net cash used in operating activities
was $59,221 and $53,413 in the three months ended March 31, 2009 and 2008,
respectively.
Net cash provided by financing
activities was $59,221 and 53,413 in the three months ended March 31, 2009 and
2008, respectively. These amounts related to amounts paid on our
behalf by Investor.
We suffered recurring losses from
operations and have an accumulated deficit of $2,513,967 at March 31,
2009. Currently, we are a non-operating public company. We seek
suitable candidates for a business combination with a private
company. In the event we use all of our cash resources, Investor has
indicated the willingness to loan us funds at the prevailing market rate until
such business combination is consummated.
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
February 2009, the FASB issued FSP FAS 141R-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from Contingencies. FSP FAS 141R-1 amends the
guidance in SFAS 141R about the accounting for assets acquired and liabilities
assumed in a business combination that arise from contingencies that would be
within the scope of SFAS 5 if not acquired or assumed in a business combination.
FSP FAS 141R-1 is effective for us at the beginning of our year ending December
31, 2009 and therefore will apply to any business combination that we might
enter into after December 27, 2008. We do not expect that the adoption of FSP
FAS 141R-1 will have a material impact on our financial position, results of
operations or cash flows.
In April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value
of Financial Instruments. FSP FAS 107-1 and APB 28-1 amend SFAS 107,
Disclosures about Fair Value
of Financial Instruments to require disclosures about fair value of
financial instruments for interim reporting periods as well as in annual
financial statements. This FSP also amends ABP 28 to require those disclosures
in summarized financial information at interim reporting periods. We will adopt
FSP FAS 107-1 and APB 28-1 in our second fiscal quarter ending on June 30, 2009.
We do not expect that the adoption of FSP FAS 107-1 and APB 28-1 will have a
material impact on our financial position, results of operations or cash
flows.
In April
2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are not Orderly. FSP FAS
157-4 provides additional guidance for estimating fair value in accordance with
SFAS 157, Fair Value
Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. We are
required to adopt FSP FAS 157-4 in our second fiscal quarter ending on June 30,
2009. We have not yet evaluated the impact, if any, the adoption of this
Statement will have on our financial position, results of operations or cash
flows.
Off-Balance
Sheet Arrangements – We have no
off-balance sheet arrangements.
Risk
Factors
The following important factors, and
the important factors described elsewhere in this report or in our other filings
with the SEC, could affect (and in some cases have affected) our results and
could cause our results to be materially different from estimates or
expectations. Other risks and uncertainties may also affect our
results or operations adversely. The following and these other risks
could materially and adversely affect our business, operations, results or
financial condition.
We
have a history of net losses and may never achieve or maintain
profitability.
We have a history of incurring losses
from operations. As of March 31, 2009, we had an accumulated deficit of
approximately $2,513,967. We anticipate that our existing cash and
cash equivalents will be sufficient to fund our business 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. In the event we use all of our cash resources, Investor has
indicated the willingness to loan us funds at the prevailing market rate until
such business combination is consummated.
We
are a non-operating company seeking a suitable transaction and may not find a
suitable candidate or transaction.
We are a non-operating company and are
seeking a suitable transaction with a private company; however, we may not find
a suitable candidate or transaction. If we are unable to consummate a
suitable transaction we will be forced to liquidate and dissolve which will take
three years to complete and may result in our distributing less cash to our
shareholders. Additionally, we will be spending cash during the
winding down and may not have enough cash to distribute to our
shareholders.
We
cannot assure you of the exact amount or timing of any future distribution to
our stockholders.
The precise nature, amount and timing
of any future distribution to our stockholders will depend on and could be
delayed by, among other things, the opportunities for a private company
transaction, administrative and tax filings during or associated with our
seeking a private company transaction or any subsequent dissolution, potential
claim settlements with creditors, and unexpected or greater than expected
operating costs associated with any potential private company transaction or any
subsequent liquidation. Furthermore, we cannot provide any assurances that we
will actually make any distributions. Any amounts we actually
distribute to our stockholders may be less than the price or prices at which our
common stock has recently traded or may trade in the future.
We
will continue to incur claims, liabilities and expenses that will reduce the
amount available for distribution to stockholders.
Claims,
liabilities and expenses incurred while seeking a private company transaction or
any subsequent dissolution, such as legal, accounting and consulting fees and
miscellaneous office expenses, will reduce the amount of assets available for
future distribution to stockholders. If available cash and amounts received on
the sale of non-cash assets are not adequate to provide for our obligations,
liabilities, expenses and claims, we may not be able to distribute meaningful
cash, or any cash at all, to our stockholders.
We
will continue to incur the expenses of complying with public company reporting
requirements.
We have
an obligation to continue to comply with the applicable reporting requirements
of the Securities Exchange Act of 1934, as amended, even though compliance with
such reporting requirements is economically burdensome.
In
the event of liquidation, our Board of Directors may at any time turn management
of the liquidation over to a third party, and our directors may resign from our
board at that time.
If we are
unable to find or consummate a suitable private company transaction, our
directors may at any time turn our management over to a third party to commence
or complete the liquidation of our remaining assets and distribute the available
proceeds to our stockholders, and our directors may resign from our board at
that time. If management is turned over to a third party and our directors
resign from our board, the third party would have sole control over the
liquidation process, including the sale or distribution of any remaining
assets.
If
we are deemed to be an investment company, we may be subject to substantial
regulation that would cause us to incur additional expenses and reduce the
amount of assets available for distribution.
If we
invest our cash and/or cash equivalents in investment securities, we may be
subject to regulation under the Investment Company Act of 1940. If we are deemed
to be an investment company under the Investment Company Act because of our
investment securities holdings, we must register as an investment company under
the Investment Company Act. As a registered investment company, we would be
subject to the further regulatory oversight of the Division of Investment
Management of the SEC, and our activities would be subject to substantial
regulation under the Investment Company Act. Compliance with these regulations
would cause us to incur additional expenses, which would reduce the amount of
assets available for distribution to our stockholders. To avoid these compliance
costs, we intend to invest our cash proceeds in money market funds and
government securities, which are exempt from the Investment Company Act but
which currently provide a very modest return.
If
we fail to create an adequate contingency reserve for payment of our expenses
and liabilities, in the event of dissolution, our stockholders could
be held liable for payment to our creditors of each such stockholder’s pro rata
share of amounts owed to the creditors in excess of the contingency reserve, up
to the amount actually distributed to such stockholder.
In the event of dissolution or a
distribution of substantially all our assets, pursuant to the Delaware General
Corporation Law, we will continue to exist for three years after the dissolution
became effective or for such longer period as the Delaware Court of Chancery
shall direct, for the purpose of prosecuting and defending suits against us and
enabling us gradually to close our business, to dispose of our property, to
discharge our liabilities and to distribute to our stockholders any remaining
assets. Under the Delaware General Corporation Law, in the event we fail to
create an adequate contingency reserve for payment of our expenses and
liabilities during this three-year period, each stockholder could be held liable
for payment to our creditors of such stockholder’s pro rata share of amounts
owed to creditors in excess of the contingency reserve, up to the amount
actually distributed to such stockholder.
However, the liability of any
stockholder would be limited to the amounts previously received by such
stockholder from us (and from any liquidating trust or trusts) in the
dissolution. Accordingly, in such event a stockholder could be required to
return all distributions previously made to such stockholder. In such event, a
stockholder could receive nothing from us under the plan of dissolution.
Moreover, in the event a stockholder has paid taxes on amounts previously
received, a repayment of all or a portion of such amount could result in a
stockholder incurring a net tax cost if the stockholder’s repayment of an amount
previously distributed does not cause a commensurate reduction in taxes payable.
There can be no assurance that any contingency reserve established by us will be
adequate to cover any expenses and liabilities.
Our auditors have
expressed a going concern opinion.
Primarily as a result of our recurring
losses and our lack of liquidity, we received a report from our independent
auditors that includes an explanatory paragraph describing the substantial
uncertainty as to our ability to continue as a going concern for the year ended
December 31, 2008.
Any
future sale of a substantial number of shares of our common stock could depress
the trading price of our common stock, lower our value and make it more
difficult for us to pursue or consummate a private company
transaction.
Any sale of a substantial number of
shares of our common stock (or the prospect of sales) may have the effect of
depressing the trading price of our common stock. In addition, these sales could
lower our value and make it more difficult for us to engage in a private company
transaction. Further, the timing of the sale of the shares of our common stock
may occur at a time when we would otherwise be able to engage in a private
company transaction on terms more favorable to us.
Our
stock price is likely to be highly volatile because of several factors,
including a limited public float.
The market price of our stock is likely
to be highly volatile because there has been a relatively thin trading market
for our stock, which causes trades of small blocks of stock to have a
significant impact on our stock price. You may not be able to resell our common
stock following periods of volatility because of the market's adverse reaction
to volatility.
Other factors that could cause such
volatility may include, among other things:
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announcements
concerning our strategy;
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general
market conditions.
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Because
our common stock is considered a "penny stock" any investment in our common
stock is considered to be a high-risk investment and is subject to restrictions
on marketability.
Our common stock is currently traded on
the OTC Bulletin Board and is considered a "penny stock." The OTC Bulletin Board
is generally regarded as a less efficient trading market than the NASDAQ Capital
Market.
The SEC 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
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, to deliver a
standardized risk disclosure document prepared by the SEC, which specifies
information about penny stocks and the nature and significance of risks of the
penny stock market. The broker-dealer also must provide the customer with bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and any salesperson in the transaction, and monthly account statements
indicating the market value of each penny stock held in the customer's account.
In addition, the penny stock rules require that, prior to a transaction in a
penny stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our common stock.
Since our common stock is subject to
the regulations applicable to penny stocks, the market liquidity for our common
stock could be adversely affected because the regulations on penny stocks could
limit the ability of broker-dealers to sell our common stock and thus your
ability to sell our common stock in the secondary market. There is no
assurance our common stock will be quoted on NASDAQ or the NYSE or listed on any
exchange, even if eligible.
We
have additional securities available for issuance which if issued could
adversely affect the rights of the holders of our common stock.
Our articles of incorporation authorize
the issuance of 2,000,000,000 shares of common stock. The common
stock can be issued by our board of directors without stockholder approval.
Accordingly, our stockholders will be dependent upon the judgment of our
management in connection with the future issuance and sale of shares of our
common stock, in the event that buyers can be found therefore, any future
issuances of common stock would further dilute the percentage ownership of our
Company held by the public stockholders.
As a
“smaller reporting company” as defined by Rule 229.10(f)(1), we are not required
to provide the information required by this Item 3.
ITEM
4 - CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND
PROCEDURES. We maintain disclosure controls and procedures
that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms and that such information is accumulated
and communicated to our management, including our interim President, who serves
as our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.
Our
interim President reviewed and evaluated the effectiveness of the design and
operation of our disclosure controls and procedures (as defined by Rule
240.13a-15(e) or 15d-15(e)) of the Exchange Act Rule 13a-15 as of the end of the
period covered by this report. Based upon this evaluation, our interim
President concluded that, as of the end of such period, our disclosure controls
and procedures are effective as of the end of the quarter
covered by this Form 10-Q.
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ITEM
6.
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Exhibits
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31
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Certification
of President pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted
pursuant to section 302 of the Sarbanes-Oxley Act of
2002.
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32
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Certification
of the Company’s Chief Executive Officer, pursuant to 18 U.S.C. Section
1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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TRIST
HOLDINGS, INC.
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Date:
May 14, 2009
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/s/ ERIC STOPPENHAGEN
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Name:
Eric Stoppenhagen
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Title: Interim
President
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EXHIBIT
INDEX
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Exhibit
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Description
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31
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Certification
of President pursuant to Exchange Act Rule 13a-14 and 15d-14 as adopted
pursuant to section 302 of the Sarbanes-Oxley Act of
2002.
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32
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Certification
of the Company’s Chief Executive Officer, pursuant to 18 U.S.C. Section
1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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