trist-10q03312008.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
Quarterly Period Ended March 31, 2008
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 small business issuer as specified in its charter)
Delaware
|
|
20-1915083
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
7030 Hayvenhurst
Avenue, Van Nuys, CA 91406
|
(Address
of principal executive offices)
|
|
Registrant’s
phone number, including area code (818)
464-1614
|
|
Former
name, former address and former fiscal year, if changed since last
report:
|
|
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 x
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 x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes x No o
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
Class
|
|
Outstanding
at May 8, 2008
|
Common
Stock, $.001 par value
|
|
89,239,920
|
TRIST
HOLDINGS, INC.
|
|
Page
|
PART
I
|
|
3
|
ITEM
1.
|
|
3
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
ITEM
2
|
|
10
|
ITEM
3.
|
|
13
|
ITEM
4.
|
|
13
|
|
|
|
PART
II
|
|
13
|
ITEM
6. |
Exhibits |
13
|
(FORMALLY
KNOWN AS LANDBANK GROUP, INC. AND SUBSIDIARY)
BALANCE
SHEETS
|
|
March
31,
2008
|
|
|
December
31,
2007
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash
& cash equivalents
|
|
$ |
5,000 |
|
|
$ |
5,000 |
|
Prepaid
expenses and other current assets
|
|
|
3,506 |
|
|
|
3,741 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$ |
8,506 |
|
|
$ |
8,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Notes
payable to related party
|
|
$ |
563,689 |
|
|
$ |
500,000 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT:
|
|
|
|
|
|
|
|
|
Common
stock, 2,000,000,000 shares authorized;
$0.0001,
par
value; 89,239,920 issued and outstanding
at
March
31,2008
and December 31, 2007
|
|
|
8,924 |
|
|
|
8,924 |
|
Additional
paid in capital
|
|
|
1,754,394 |
|
|
|
1,754,394 |
|
Accumulated
deficit
|
|
|
(2,318,501 |
) |
|
|
(2,254,577 |
) |
Total
stockholders’ deficit
|
|
|
(555,183 |
) |
|
|
(491,259 |
) |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
$ |
8,506 |
|
|
$ |
8,741 |
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to unaudited consolidated financial statements.
(FORMERLY
KNOWN AS LANDBANK GROUP, INC. AND SUBSIDIARY)
STATEMENTS
OF OPERATIONS
(UNAUDITED)
|
|
For
the Three Months Periods
Ended
March 31,
|
|
|
|
2008
|
|
|
2007
|
|
REVENUES,
NET
|
$ |
—
|
|
$ |
—
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
Professional
fees
|
|
—
|
|
|
—
|
|
Directors
and officers compensation
|
|
46,125
|
|
|
41,344
|
|
General
and administrative expenses
|
|
6,723
|
|
|
18,810
|
|
Total
operating expenses
|
|
52,848
|
|
|
60,154
|
|
|
|
|
|
|
|
|
LOSS
FROM OPERATIONS
|
|
(52,848
|
) |
|
(60,154
|
) |
|
|
|
|
|
|
|
OTHER
EXPENSE
|
|
|
|
|
|
|
Interest
expense
|
|
(10,276
|
) |
|
—
|
|
|
|
|
|
|
|
|
NET
LOSS BEFORE INCOME TAXES
|
|
(63,124
|
) |
|
(60,154
|
) |
|
|
|
|
|
|
|
Provision
for income taxes
|
|
800
|
|
|
800
|
|
|
|
|
|
|
|
|
NET
LOSS FROM CONTINUING OPERATIONS
|
|
(63,924
|
) |
|
(60,954
|
) |
|
|
|
|
|
|
|
Loss
from discontinued operations
|
|
—
|
|
|
(77,794
|
) |
|
|
|
|
|
|
|
NET
LOSS
|
$ |
(63,924
|
) |
$ |
(138,748
|
) |
|
|
|
|
|
|
|
NET
LOSS PER SHARE FROM CONTINUING OPERATIONS
|
$ |
(0.00
|
) |
$ |
(0.01
|
) |
NET
LOSS PER SHARE FROM DISCONTINUED OPERATIONS
|
$ |
(0.00
|
) |
$ |
(0.01
|
) |
BASIC
& DILUTED NET LOSS PER SHARE
|
$ |
(0.00
|
) |
$ |
(0.02
|
) |
WBASIC
& DILUTED WEIGHTED AVERAGE SHARES
o
OUTSTANDING*
|
|
89,239,920
|
|
|
9,835,331
|
|
|
|
|
|
|
|
|
See
accompanying notes to unaudited consolidated financial statements.
*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.
(FORMERLY
KNOWN AS LANDBANK GROUP, INC. AND SUBSIDIARY)
STATEMENTS
OF CASH FLOWS
(UNAUDITED)
|
|
For
the Three Months Periods Ended
March
31,
|
|
|
|
2008
|
|
|
2007
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net
Loss
|
|
$ |
(63,924 |
) |
|
$ |
(138,748 |
) |
Adjustments
to reconcile net loss to net cash provided by ( used in) operating
activities :-
|
|
|
|
|
|
|
|
|
Changes
in current assets and current liabilities :-
|
|
|
|
|
|
|
|
|
Prepaid
expenses
|
|
|
235 |
|
|
|
— |
|
Interest
payable
|
|
|
10,276 |
|
|
|
— |
|
Net
cash used in operating activities from continuing
operations
|
|
|
(53,413 |
) |
|
|
— |
|
Net
cash provided by operating activities from discontinued
operations
|
|
|
— |
|
|
|
244,116 |
|
Net
cash provided by / (used in) operating activities
|
|
|
(53,413 |
) |
|
|
105,368 |
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities from continuing
operations
|
|
|
— |
|
|
|
— |
|
Net
cash used in investing activities from discontinuing
operations
|
|
|
— |
|
|
|
(20,789 |
) |
Net
cash used in investing activities
|
|
|
— |
|
|
|
(20,789 |
) |
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net
proceeds from issuance of note
|
|
|
53,413 |
|
|
|
88,702 |
|
Net
cash provided by financing activities from continuing
operations
|
|
|
53,413 |
|
|
|
88,702 |
|
Net
cash provided by financing activities from discontinuing
operations
|
|
|
— |
|
|
|
— |
|
Net
cash provided by financing activities
|
|
|
53,413 |
|
|
|
88,702 |
|
|
|
|
|
|
|
|
|
|
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
|
|
— |
|
|
|
173,281 |
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, Beginning of period
|
|
|
5,000 |
|
|
|
265,970 |
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, End of period
|
|
$ |
5,000 |
|
|
$ |
439,251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
— |
|
|
$ |
(12,411 |
) |
Income
taxes paid
|
|
$ |
— |
|
|
$ |
(1,600 |
) |
See
accompanying notes to unaudited 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. The Company 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. The Company 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,
the Company filed a Certificate of Amendment and the Company's 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, the Company 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) the Company transferred ownership ofLLC
to Investor (the “LLC Transfer”), (2) the Company 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 Company for LLC’s prior operations and liabilities, (4) LLC
assigned $500,000 in debt to Company 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) the
Company retained approximately $5,000 in cash for the Company’s 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 the Company changed
its 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 the Company
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 the Company’s
Annual Report on Form 10-KSB. The results of the three months periods ended
March 31, 2008 are not necessarily indicative of the results to be expected for
the full year ending December 31, 2008.
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 the Company's financial statements as substantially all of
the Company's 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 the Company 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.
NOTE
2 - Discontinued operations
On
December 31, 2007, the Company 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 the Company’s outstanding capital
stock.
Pursuant
to the Agreement, the following transactions occurred at the
closing: (1) the Company transferred ownership of LLC to Investor,
(2) the Company 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 Company for LLC’s prior operations
and liabilities, (4) LLC assigned $500,000 in debt to Company 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) the Company
retained approximately$5,000 in cash for the Company’s working
capital.
In
connection with the Note Transfer, the Company 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 the
Company’s Certificate of Incorporation to change the name of the Company 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 three months ended March 31, 2007 are shown below.
|
Three
months periods ended
March
31, 2007
|
|
|
|
|
|
Revenue,
net
|
|
$
|
901,707
|
|
|
|
|
|
|
Cost
of revenue
|
|
|
637,027
|
|
|
|
|
|
|
Gross
profit
|
|
|
264,680
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Professional
fees
|
|
|
97,919
|
|
General
& administrative expenses
|
|
|
191,630
|
|
Total
operating expenses
|
|
|
289,549
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(24,869
|
)
|
|
|
|
|
|
Non-operating
expenses
|
|
|
|
|
Other
income
|
|
|
|
|
Interest
expense
|
|
|
(52,125
|
)
|
|
|
|
|
|
Net
loss before income tax
|
|
|
(76,994
|
)
|
|
|
|
|
|
Provision
for income taxes
|
|
|
800
|
|
|
|
|
|
|
Net
Loss from Discontinued Operations
|
|
$
|
(77,794
|
)
|
NOTE
3 - Note Payable to Related Party
On
December 31, 2007, the Company 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. The Company
recorded an interest expense of $10,276 for the three months period ended March
31, 2008.
Effective
September 24, 2007, the Board of Directors (the “Board”) of 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 then-current Chief Financial Officer’s
resignation.
On
September 27, 2007, the Company entered into a Consulting, Confidentiality and
Proprietary Rights Agreement with Venor, 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
The
Company has 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, the Company granted an option to its prior Chief Financial Officer
(“CFO”) to purchase 100,000 shares of the Company’s 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. The Company expensed the entire $2,000
value of the option during the three month period ended March 31,
2007.
On August
10, 2007, the Company terminated all of its option grants, which consisted of
grants to four (4) of the Company’s 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, the Company has an accumulated deficit of
$2,318,501as of March 31, 2008. The Company’s total liabilities exceeded its
total assets by $555,183 as of March 31, 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 continued
operations of the Company, which in turn is dependent upon the Company’s
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 the Company 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 the Company and committed to doing so
into the future. To the extent it is unwilling to provide working capital, the
Company 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. The Company 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. The Company 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,
the Company filed a Certificate of Amendment and the Company's name was formally
changed from Camryn Information Services, Inc. to iStorage Networks, Inc. Such
change became effective on November 8, 2004. The Company subsequently changed
its name to Landbank Group, Inc., on January 27, 2006, following the acquisition
of Landbank, LLC, a California limited liability company (“LLC”). The
Company 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, the Company 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. The
Company is seeking out suitable candidates for a business combination with a
private company.
Critical Accounting Policies
and Estimates
The
Company accounts for its 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.
The
Company assesses 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.
The
Company bases its 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 Quarter Ended March
31, 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 $52,848 and $60,154 for the quarters ended March 31, 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 $77,794 for the quarter ended
March 31, 2007. The subsidiary was divested on December 31,
2007.
Interest
Expense and Other
Interest
expenses were $10,276 and zero for the quarters ended March 31, 2008 and
2007, respectively, an increase of $10,276.
Liquidity
and Capital Resources
Net cash
used in operating activities was $53,413 and $105,368 in the quarters ended
March 31, 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 $53,413 and $88,702 in the quarters
ended March 31, 2008 and 2007, respectively. These funds were
borrowed from the Company’s divested subsidiary.
The
Company has suffered recurring losses from operations and has an accumulated
deficit of $2,318,501 at March 31, 2008. Currently, we are a
non-operating public company. The Company is 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 the Company during the past five years. Seasonality has
not been material to the Company.
Recent
Accounting Pronouncements
FASB
141(revised 2007) - Business Combinations
In
December 2007, the FASB issued FASB Statement No. 141 (revised 2007), Business
Combinations. This Statement replaces FASB Statement No. 141,
Business Combinations. This Statement retains the fundamental
requirements in Statement 141 that the acquisition method of accounting (which
Statement 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's scope
is broader than that of Statement 141, which applied only to business
combinations in which control was obtained by transferring
consideration. By applying the same method of accounting—the
acquisition method--to all transactions and other events in which one entity
obtains control over one or more other businesses, this Statement improves the
comparability of the information about business combinations provided in
financial reports.
This
Statement requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any non-controlling interest in the acquiree at the acquisition
date, measured at their fair values as of that date, with limited exceptions
specified in the Statement. That replaces Statement 141's
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.
This
Statement applies to all transactions or other events in which an entity (the
acquirer) obtains control of one or more businesses (the acquirer), including
those sometimes referred to as "true mergers" or "mergers of equals" and
combinations achieved without the transfer of consideration, for example, by
contract alone or through the lapse of minority veto rights. This
Statement applies to all business entities, including mutual entities that
previously used the pooling-of-interests method of accounting for some business
combinations. It does not apply to: (a) The formation of a joint venture, (b)
The acquisition of an asset or a group of assets that does not constitute a
business, (c) A combination between entities or businesses under common control,
(d) A combination between not-for-profit organizations or the acquisition of a
for-profit business by a not-for-profit organization.
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. An entity may not
apply it before that date. Management believes this Statement will
have no impact on the financial statements of the Company once
adopted.
FASB
160 - Non-controlling Interests in Consolidated Financial
Statements – an amendment of ARB No. 51
In
December 2007, the FASB issued FASB Statement No. 160 -
Non-controlling Interests in Consolidated Financial Statements - an amendment of
ARB No. 51. This Statement applies to all entities that prepare consolidated
financial statements, except not-for-profit organizations, but will affect only
those entities that have an outstanding non-controlling interest in one or more
subsidiaries or that deconsolidate a subsidiary. Not-for-profit
organizations should continue to apply the guidance in Accounting Research
Bulletin No. 51, Consolidated Financial Statements, before the amendments made
by this Statement, and any other applicable standards, until the Board issues
interpretative guidance.
This
Statement amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. Before
this Statement was issued, limited guidance existed for reporting
non-controlling interests. As a result, considerable diversity in practice
existed. So-called minority interests were reported in the
consolidated statement of financial position as liabilities or in the mezzanine
section between liabilities and equity. This Statement improves comparability by
eliminating that diversity.
A
non-controlling interest, sometimes called a minority interest, is the portion
of equity in a subsidiary not attributable, directly or indirectly, to a parent.
The objective of this Statement is to improve the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require: (a) The ownership interests in subsidiaries held by
parties other than the parent be clearly identified, labeled, and presented in
the consolidated statement of financial position within equity, but separate
from the parent's equity, (b) The amount of consolidated net income attributable
to the parent and to the non-controlling interest be clearly identified and
presented on the face of the consolidated statement of income, (c) Changes in a
parent's ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently. A parent's
ownership interest in a subsidiary changes if the parent purchases additional
ownership interests in its subsidiary or if the parent sells some of its
ownership interests in its subsidiary. It also changes if the
subsidiary reacquires some of its ownership interests or the subsidiary issues
additional ownership interests. All of those transactions are
economically similar, and this Statement requires that they be accounted for
similarly, as equity transactions, (d) When a subsidiary is deconsolidated, any
retained non-controlling equity investment in the former subsidiary be initially
measured at fair value. The gain or loss on the deconsolidation of
the subsidiary is measured using the fair value of any non-controlling equity
investment rather than the carrying amount of that retained investment, (e)
Entities provide sufficient disclosures that clearly identify and distinguish
between the interests of the parent and the interests of the non-controlling
owners.
This
Statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008 (that is, January 1, 2009, for
entities with calendar year-ends). Earlier adoption is
prohibited. This Statement shall be applied prospectively as of the
beginning of the fiscal year in which this Statement is initially applied,
except for the presentation and disclosure requirements. The
presentation and disclosure requirements shall be applied retrospectively for
all periods presented. Management believes this Statement will have
no impact on the financial statements of the Company once adopted.
Other
accounting standards that have been issued
or proposed by the FASB or other standards-setting bodies
that do not require adoption until a future date are
not expected to have
a material impact on
the consolidated financial statements upon
adoption.
FASB
161 - Disclosures about Derivative Instruments and Hedging Activities
-
Issued
March 2008
Management
does not believe that this standard will have a material effective on the
accompanying financial statements once effective.
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.
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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 and Chief Financial 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
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.
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TRIST
HOLDINGS, INC.
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Date:
May 8, 2008
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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
Exhibit
|
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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|
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32
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Certification
of the Company’s Chief Executive Officer and Chief Financial 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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