UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-1
Registration Statement Under the Securities Act of 1933
TRI-MARK MFG, INC.
(Exact Name of Registrant As Specified In Its Charter)
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California 20-8069359
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification
organization) Code Number) Number)
Barry Sytner
643 S. Olive Street, Suite 777 643 S. Olive Street, Suite 777
Los Angeles, CA 90014 Los Angeles, CA 90014
Telephone (213) 689-9300 Telephone (213) 689-9300
(Address, and telephone number (Name, address and telephone number
of principal executive offices) of agent for service)
Copies to:
Ms. Jody Walker ESQ.
7841 South Garfield Way
Centennial, CO 80122
Phone 303-850-7637 Fax 303-482-2731
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box [ ]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
[ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerate filer, a non-accelerated filer, or a smaller
reporting company.
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Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE TO BE MAXIMUM MAXIMUM REGISTRATION
REGISTERED REGISTERED OFFERING PRICE AGGREGATE FEE
PER SHARE OFFER PRICE
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Common Stock 1,000,000 $1.00 $1,000,000 $39.30
--------- ---------- -------
Total 1,000,000 $1,000,000 $39.30
The Registrant amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall hereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933, or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to Section 8(a), may determine.
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Preliminary Prospectus Dated February 25, 2008. SUBJECT TO COMPLETION
$1,000,000
Up to a maximum of 1,000,000 Common Shares at $1.00 per Common Share
Tri-Mark MFG, Inc.
Tri-Mark is registering 1,000,000 common shares at the purchase price
of $1.00 per common share for the aggregate offering price of
$1,000,000.
The offering will commence on the effective date of this prospectus and
will terminate on or before June 30, 2009.
Our common stock is currently not listed on the NASD Over-The-Counter
Bulletin Board.
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our common
shares using our best efforts and no one has agreed to buy any of our
common shares. There is no minimum amount of common shares we must
sell so no money raised from the sale of such common shares will go
into escrow, trust or another similar arrangement.
Consider carefully the risk factors beginning on page 6 in this
prospectus.
Neither the SEC nor any state securities commission has approved these
common shares or determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
Proceeds of the Offering
Per Common Share Total
Offering Price $1.00 $1,000,000
Proceeds to Tri-Mark, before expenses $1.00 $1,000,000
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TABLE OF CONTENTS
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Prospectus Summary 5
Risk Factors 6
Forward Looking Statements 12
Use of Proceeds 12
Plan of Distribution 13
Business Operations 14
Dilution 27
Dividend Policy 28
Determination of Offering Price 29
Management's Discussion and Analysis of Financial
Condition and Results of Operations 29
Directors, Executive Officers Control Persons 30
Security Ownership of Certain Beneficial Owners
and Management 33
Certain Relationships and Related Transactions 34
Description of Capital Stock 34
Shares Eligible for Future Sale 35
Disclosure of Commission Position on Indemnification 36
for Securities Act liabilities
Market for Common Stock and Related Stockholder
Matters 36
Experts 37
Legal Proceedings 37
Legal Matters 37
Where You Can Find More Information 37
Financial Statements 38
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PROSPECTUS SUMMARY
To understand this offering fully, you should read the entire
prospectus carefully, including the risk factors beginning on page 6
and the financial statements.
General
- ------- Tri-Mark MFG, Inc. was incorporated in the
State of California on December 18, 2006. Our
principal executive offices are located at 643
S. Olive Street, Suite 777, Los Angeles, CA
90014. Our telephone number is (213) 689-9300
and facsimile number is (213) 689-9304.
Operations
- ---------- Tri-Mark is a designer, marketer, and
manufacturer of affordable branded jewelry in
the United States. We sell our jewelry to
jewelry chain stores, discount stores,
department stores, television home shopping
networks, and wholesalers.
We offer our customers a large selection of
jewelry styles, consistent product quality, and
prompt delivery of product orders. Our
principal product line is a wide assortment of
earrings, pendants, and rings. Our jewelry is
targeted towards the middle market, which
generally retails between $19.99 to $49.99. We
offer over 2,000 styles of earrings, pendants,
and rings.
Our products are sold in retail locations and
through home shopping networks.
Common stock
outstanding
- ------------ 8,000,000
Common shares being
sold in this offering
- ---------------------- 1,000,000
Termination of the
Offering
- ------------------ The offering will commence on the effective
date of this prospectus and will terminate on
or before June 30, 2009.
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Market for our
common stock
- -------------- Our common stock is not listed on the NASD
Over-The-Counter Bulletin Board. We can
provide no assurance that there will be an
active market for our common stock.
RISK FACTORS
Tri-Mark's business is subject to numerous risk factors, including the
following.
1. We cannot offer any assurance as to our future financial results.
You may lose your entire investment.
We have not received substantial income from operations to date and
future financial results are uncertain. We cannot assure you that Tri-
Mark can operate in a profitable manner. We have an accumulated
deficit of $(27,119) as of December 31, 2007. Even if we obtain future
revenues sufficient to expand operations, increased production or
marketing expenses would adversely affect liquidity of Tri-Mark. In
their opinion on our financial statements as of and for the year ended
December 31, 2007, our auditors have indicated that there is
substantial doubt about our ability to continue as a going concern.
2. We do not have a public market in our securities. If our common
stock has no active trading market, you may not be able to sell your
common shares at all.
We do not have a public market for our common shares. Our securities
are not traded on any exchange. We cannot assure you that an active
public market will ever develop. Consequently, you may not be able to
liquidate your investment in the event of an emergency or for any other
reason.
3. We do not meet the requirements for our stock to be quoted on
NASDAQ, American Stock Exchange or any other senior exchange and the
tradability in our stock will be limited under the penny stock
regulation.
The liquidity of our common stock is restricted as Tri-Mark's common
stock falls within the definition of a penny stock.
Under the rules of the Securities and Exchange Commission, if the price
of the company's common stock on the OTC Bulletin Board is below $5.00
per share, the company's common stock will come within the definition
of a "penny stock." As a result, Tri-Mark's common stock is subject to
the "penny stock" rules and regulations. Broker-dealers who sell penny
stocks to certain types of investors are required to comply with the
Commission's regulations concerning the transfer of penny stock. These
regulations require broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
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- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell
the company's common stock, and may affect the ability to resell the
company's common stock.
4. We are dependent on Barry Sytner and key management personnel. The
failure to attract and retain the necessary personnel could have a
materially adverse effect on our business, operations and financial
condition.
Our success is dependent upon, among other things, the services of Dan
Barry Sytner, chief executive officer. The loss of Mr. Sytner's
services could have a material adverse effect on our business,
operations and financial condition. We do not have key-man life
insurance policy for Mr. Sytner. Our CEO, Barry Sytner has held
management positions within the jewelry industry for over thirty-five
years. Our President, Eugene Brennan has held senior management
positions with major corporations for the past thirty years. Thus, our
management has substantial experience in related industries and has
demonstrated success within these industries; however, there can be no
assurance that they will be able to duplicate that success in this
company and in this rapidly developing market and industry.
The expansion of our business will place further demands on existing
management and future growth. Profitability will depend, in part, on
our ability to hire and retain the necessary personnel to operate our
business. There is no certainty that we will be able to identify,
attract, hire, train, retain and motivate other highly skilled
technical, administrative, managerial, marketing and customer service
personnel. Competition for such personnel is intense and there is no
certainty that we will be able to successfully attract, integrate or
retain sufficiently qualified personnel. The failure to attract and
retain the necessary personnel could have a materially adverse effect
on our business, operations and financial condition.
5. Our success may depend on the ability of our distributors to
implement viable marketing initiatives.
We offer the majority of our products through a network of independent
distributors. Our success is dependent upon the ability of these
distributors to implement viable marketing initiatives. Many of these
distributors may carry products from several different companies.
There is a risk that these distributors will give priority to the
products of other suppliers. The reduction or loss in sales by one or
more of our key distributors, or the inability to attract new
distributors, could have a material adverse effect on our business.
Risks Related to our Industry
6. As most jewelry purchases are discretionary in nature, a downturn
in general economic conditions may cause our revenues to decline.
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Jewelry purchases are discretionary for consumers and may be
particularly affected by adverse trends in the general economy. The
success of our operations depends to a significant extent upon a number
of factors relating to discretionary consumer spending, including
economic conditions that affect disposable consumer income such as:
employment; wages and salaries; business conditions; interest rates;
availability of credit; and taxation for the economy as a whole and in
regional and local markets where we operate. There can be no assurance
that consumer spending will not be adversely affected by general
economic conditions and negatively impact our results of operations or
financial conditions. Any significant deterioration in general
economic conditions or increases in interest rates may inhibit
consumers' use of credit and cause a material adverse affect on our net
sales and profitability. Furthermore, any downturn in general or local
economic conditions in the markets in which we operate could materially
adversely affect our collection of outstanding customer accounts
receivables.
7. Adverse economic cycles and retail industry conditions may result
in a decline in our revenues.
Our business is subject to economic cycles and retail industry
conditions. Purchases of discretionary fashion accessories such as
jewelry tend to decline when there is a decline in consumer confidence
or employment levels, or when disposable income is low and consumers
are hesitant to use available credit. Although we believe that our
lower-priced jewelry may sell better than higher-priced jewelry in a
recessionary period, any significant decline in general economic
conditions or uncertainties regarding future economic prospects that
affect consumer spending habits could in turn harm our operating
results.
We sell our merchandise primarily to mass-market retailers and
independent jewelry shops across the United States, and we extend
credit based on an evaluation of each of the customer's ability to pay,
usually without requiring collateral. While in the past few years
various retailers, including some of our customers, have experienced
financial difficulties, thereby increasing the risk of extending
credit to such retailers, our losses due to bad debts have been
limited. In the future, however, financial difficulties of a customer
could cause us to curtail sales to such customer. Our inability to
collect on amounts owed to us by our customers could have a material
adverse affect on our business.
8. If we are unable to anticipate consumer preferences, we may not
become profitable.
Our success depends upon our ability to anticipate and respond to
changing consumer preferences in a timely manner. Although we attempt
to stay abreast of emerging fashion preferences affecting the jewelry
industry, any failure by us to identify and respond to changing
consumer tastes could hurt our sales. If we misjudge the market for
our products, we may be faced with unsold inventory.
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9. We may not be able to compete in the highly competitive jewelry
industry and may never become profitable.
The jewelry industry is highly competitive. We compete with a large
number of established jewelry manufacturers and importers that
have significantly greater experience than us in designing,
developing, marketing and distributing such products, and who have
significantly greater financial, distribution, advertising and
marketing resources than we do. Increased competitive pressures from
current and future competitors could have a material adverse affect on
our business.
10. The loss of our single customer could negatively impact our
operating results.
We are dependent on one large customer and the loss or a reduction of
purchases by this customer could hurt our operating results.
Risks Related to Our Business
11. We have only operated for a short period, so we have only a
limited operating history upon which you can evaluate our business and
prospects.
You should consider our prospects in light of the risks, expenses, and
difficulties those companies in their earlier stage of development
encounter. Our success depends upon our ability to address those risks
successfully, which includes, among other things:
- Whether we will be able to assemble and maintain the
necessary resources, including financial resources, that we will
need to implement our business plan;
- Whether we can continue to build and maintain a strong
management team that can develop and execute our business
strategy;
- Whether we will be successful in establishing and
maintaining the strategic associations necessary to implement our
business strategy; and
- Whether we will be successful in implementing our sales and
marketing strategy.
If we do not succeed in addressing these risks, our business will
likely be materially and adversely affected.
We forecast our future expense levels based on our operating plans and
our estimates of future revenues. If our revenues grow at a slower
rate than we anticipate, or if our spending levels exceed our
expectations or cannot be adjusted to reflect slower revenue growth, we
may not generate sufficient revenues to achieve or sustain
profitability. In this case, the value of your investment could be
reduced or lost. We expect to continue to incur losses for the
immediate future as we build our infrastructure, continue our sales and
marketing efforts, and continue development of additional products.
Even if we do achieve profitability, we may not sustain or increase
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profitability on a quarterly or annual basis. Failure to achieve or
maintain profitability will materially and adversely affect the market
price of our common stock.
12. Our Quarterly Results Could Fluctuate
Our quarterly operating results in the future may vary significantly,
depending on factors such as revenue from our sales of jewelry the
timing of our new product and service announcements and launches,
market acceptance of new and enhanced versions of our products (if
any), changes in our operating expenses, failure to effectively manage
our inventory levels, changes in our business strategy, and general
economic factors. We have limited or no control over many of these
factors. Our quarterly revenues will also be difficult to forecast
because the markets for our products and services are evolving and our
revenues in any period could be significantly affected by new product
announcements and product launches by our competitors, as well as by
alternative technologies. Variations in timing of sales may cause
significant fluctuations in future operating results. In addition,
because a significant portion of our business may be derived from
orders placed by a limited number of large customers, the timing of
such orders can also cause significant fluctuations in our operating
results. Anticipated orders from customers may fail to materialize.
Delivery schedules may be deferred or cancelled for a number of
reasons, including changes in specific customer or international
economic conditions. The adverse impact of a shortfall in our revenues
may be magnified by our inability to adjust spending to compensate for
such shortfall. As a result of these factors and other factors, it is
likely that in some future period our operating results will be below
the expectations of securities analysts or investors, which would
likely result in a significant reduction in the market price of our
stock. Period-to-period comparisons of our results of operations will
not necessarily be meaningful for the foreseeable future.
13. Delays in prompt payments from our customers or disputes may
adversely affect our business.
We are dependent upon reasonably prompt payments from our customers to
include large commercial businesses, government bodies and other
contracted parties. Delays or disputes may materially affect our cash
flow and place our operations in substantial jeopardy. We are not
certain we can obtain bank lines of credit for financing receivables,
if needed, or that the terms of such credit would be reasonable or
affordable.
14. Our insurance may not cover all of our future liabilities.
We intend to carry commercial, general liability, and comprehensive
insurance on our operations, including fire, liability, extended
coverage, other casualty insurance and key man insurance. There may be
risks that are uninsurable on terms that we believe to be economic. In
addition, losses may exceed amounts on the policies.
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15. If we are unable to manage future growth effectively, our
business, results of operations and financial condition could be
materially adversely affected.
We hope and expect to grow rapidly, both in the rate of our sales and
operations and the number and complexity of our products, product
distribution channels, and product development activities. Several
members of our key management team only recently joined us, and
integration of those persons into a cohesive management unit may be
problematic. Our growth, coupled with the rapid evolution of our
markets, has placed, and is likely to continue to place, significant
strains on our administrative, operational, technical and financial
resources and increase demands on our internal management systems,
procedures and controls. If we are unable to manage future growth
effectively, our business, results of operations and financial
condition could be materially adversely affected.
16. Tri-Mark May Be Subject To Foreign Currency Exchange Rate Risks
Tri-Mark may outsource a significant portion of the production of its
jewelry to companies outside the United States, particularly in Asia.
Although Tri-Mark plans to transact its business in U.S. dollars, the
Company cannot assure investors that future fluctuations in the value
of the U.S. dollar would not affect the costs of these services and the
ability of Tri-Mark to secure such services. The Company cannot
estimate the effect that an immediate 10% change in foreign currency
exchange rates would have on the Company's future operating results or
cash flows as a direct result of changes in exchange rates. However,
the Company does not believe that it currently has any significant
direct foreign currency exchange rate risk and has not hedged exposures
denominated in foreign currencies or any derivative financial
instruments.
17. We May Be Subject to Risks Associated with Global Operations
We only recently began to concentrate on developing international
sales. As a result, we could derive substantial portions of our
revenues from customers outside the United States. International
operations are subject to a number of risks, including costs of
localizing products and services for international markets, dependence
on independent resellers, multiple and conflicting regulations
regarding communications, restrictions on use of data and internet
access, longer payment cycles, unexpected changes in regulatory
environments, import and export restrictions and tariffs, difficulties
in staffing and managing international operations, greater difficulty
or delay in accounts receivable collection, potentially adverse tax
consequences, the burden of complying with a variety of laws outside
the United States, the impact of possible recession prone environments
and economies outside the United States and political and economic
instability. Furthermore, we expect that our export sales would be
denominated predominately in United States dollars. Therefore, an
increase in the value of the United States dollar relative to other
currencies could make our products and services more expensive and
potentially less competitive in international markets.
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FORWARD LOOKING STATEMENTS
The statements contained in this prospectus that are not historical
fact are forward-looking statements which can be identified by the
use of forward-looking terminology such as "believes," "expects,"
"may," "should," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. We have made the
forward-looking statements with management's best estimates prepared
in good faith.
Because of the number and range of the assumptions underlying our
projections and forward-looking statements, many of which are
subject to significant uncertainties and contingencies that are
beyond our reasonable control, some of the assumptions inevitably
will not materialize and unanticipated events and circumstances may
occur subsequent to the date of this prospectus.
These forward-looking statements are based on current expectations,
and we will not update this information other than required by law.
Therefore, the actual experience of Tri-Mark, and results achieved
during the period covered by any particular projections and other
forward-looking statements should not be regarded as a
representation by Tri-Mark, or any other person, that we will
realize these estimates and projections, and actual results may vary
materially. We cannot assure you that any of these expectations
will be realized or that any of the forward-looking statements
contained herein will prove to be accurate.
USE OF PROCEEDS
Any proceeds received from the sale of our common shares or from the
exercise of warrants will be deposited directly into the operating
account of Tri-Mark. We will be attempting to raise up to $1,000,000,
minus expenses of $34,039, from the sale of our common shares. These
proceeds will be used as follows:
Gross Proceeds $1,000,000 $500,000
Expenses 34,039 34,039
---------- --------
Equipment and Hardware $250,000 $125,000
Sales and Marketing 500,000 250,000
Legal and Accounting 50,000 25,000
Working Capital 165,961 65,961
-------- --------
Net Proceeds $965,961 $465,961
Gross Proceeds $250,000 $125,000
Expenses 34,039 34,039
---------- --------
Equipment and Hardware $ 65,000 $ 50,000
Sales and Marketing 100,000 15,000
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Legal and Accounting 25,000 15,000
Working Capital 25,961 10,961
-------- --------
Net Proceeds $215,961 $ 90,961
Working capital may also consist of income taxes, interest expense,
jewelry sales commissions and administrative expenses
In the event we are not successful in selling all of the securities to
raise $1,000,000, we would give priority to allocating capital to the
purchase of equipment and hardware and launching marketing and sales
initiatives to develop sales in the industries we are currently working
in. Any remaining capital would be used to fund our working capital
needs.
PLAN OF DISTRIBUTION
This prospectus relates to the sale of 1,000,000 common shares.
We will sell the common shares ourselves and do not plan to use
underwriters or pay any commissions. We will be selling our common
shares using our best efforts and no one has agreed to buy any of our
common shares. There is no minimum amount of common shares we must
sell so no money raised from the sale of our common shares will go into
escrow, trust or another similar arrangement.
The common shares are being offered by Barry Sytner and Eugene V.
Brennan, officers and directors of Tri-Mark. Messrs. Sytner and
Brennan will be relying on the safe harbor in Rule 3a4-1 of the
Securities Exchange Act of 1934 to sell the common shares. No sales
commission will be paid for common shares sold by Messrs. Sytner and
Brennan. Messrs. Sytner and Brennan are not subject to a statutory
disqualification and are not associated persons of a broker or dealer.
Additionally, Messrs. Sytner and Brennan primarily perform substantial
duties on behalf of Tri-Mark otherwise than in connection with
transactions in securities. Neither Mr. Sytner nor Mr. Brennan were a
broker or dealer or an associated person of a broker or dealer within
the preceding 12 months and they have not participated in selling an
offering of securities for any issuer more than once every 12 months
other than in reliance on paragraph (a)4(i) or (a)4(iii) of Rule 3a4-1
of the Securities Exchange Act of 1934.
The offering shall terminate on June 30, 2009.
These are no finders.
Under the rules of the Securities and Exchange Commission, our common
stock will come within the definition of a "penny stock" because the
price of our common stock on the OTC Bulletin Board is below $5.00 per
share. As a result, our common stock will be subject to the "penny
stock" rules and regulations. Broker-dealers who sell penny stocks to
certain types of investors are required to comply with the Commission's
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regulations concerning the transfer of penny stock. These regulations
require broker-dealers to:
- Make a suitability determination prior to selling penny stock to
the purchaser;
- Receive the purchaser's written consent to the transaction; and
- Provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker/dealers to sell
our common stock, and may affect the ability to resell our common
stock.
BUSINESS OPERATIONS
Overview
- --------
Tri-Mark is a designer, marketer, and manufacturer of affordable
branded jewelry in the United States. We sell our jewelry to jewelry
chain stores, discount stores, department stores, television home
shopping networks, and wholesalers.
We are a low-cost and high-volume manufacturer in the value priced
jewelry market. We believe our primary competitive advantage is our
manufacturing methods, which allow for substantially reduced costs per
unit, provide substantial capacity and better quality, and require
minimal skilled labor. Our merchandising strategy also involves the
design of products that we believe will continually appeal to the mass
market. We also assist our customers in creatively merchandising our
jewelry to encourage impulse purchases.
We offer our customers a large selection of jewelry styles, consistent
product quality, and prompt delivery of product orders. Our principal
product line is a wide assortment of earrings, pendants, and rings.
Our jewelry is targeted towards the middle market, which generally
retails between $19.99 to$49.99. We offer over 2,000 styles of
earrings, pendants, and rings. Our products are intended to appeal to
consumers who are fashion conscious.
Our products are sold in retail locations and through home shopping
networks.
We plan to focus our efforts on increasing our customer base through
expansion of our product line and customer base through selective
acquisitions of other concerns that distribute complementary jewelry
products. If we identify such an acquisition we intend to finance it
using, internally generated funds, borrowing under credit facilities
or, if necessary, issuance of our securities.
Business Strategy
- -----------------
Our business strategy is to offer custom designed and manufactured
jewelry products to a wide array of customers.
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We believe that we have pleased our existing customers with our designs
and quality workmanship such that we intend to start offering our
design and manufacturing services to other customers. We believe that
we now have a portfolio of custom jewelry designs that is sufficient to
demonstrate our abilities to other customers with a view to entering
into arrangements with them of a similar nature to our current clients,
providing them with custom jewelry designs and products. We also
believe that our existing customers will provide us with references,
which we will be able to use to solicit and secure additional business
from new clients. We believe that we have the ability to leverage our
expertise and existing customers to potentially increase sales.
Our primary business strategies are as follows:
- Capitalize on Our Manufacturing Processes - Our manufacturing
process allows us to produce mass quantities of value priced
jewelry. We are able to offer quality products to our customers at
prices that are competitive with or lower than our competitors
offering similar goods, while maintaining adequate profit margins.
Management believes that our manufacturing process produces goods
that are superior to comparably priced goods produced by
competitors. We believe that these advantages will allow for
continued growth in market share of value priced jewelry.
- Maintain a Broad Product Mix - We maintain a broad product mix
so that we can meet the varying needs of our customers. This also
enables us to supply each customer with a number of different styles
of each product, which jewelry retailers generally like to have in
stock. We currently offer our customers approximately 2,000 styles
of earrings, pendants, and rings.
- We attempt to provide our customers with earrings and other
jewelry products that incorporate traditional styles and designs.
While we regularly update our product lines and offer new
products, we seek to avoid designs incorporating fashion trends
that are expected to have short life cycles. This approach
enables us and our customers to avoid accumulating obsolete
inventory.
- Additionally, we can create specially designed products in
response to requests or pictures submitted to us by our
customers. This variety and flexibility allows us to meet a wide
variety of our customers' jewelry needs.
Products
- --------
Tri-Mark offers a broad selection of stainless steel and silver
jewelry. We provide our customers with a broad selection of jewelry
products that incorporate traditional styles and designs. We avoid
designs incorporating fashion trends, which are expected to have short
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life cycles. This approach enables us to avoid accumulating obsolete
inventory. Additionally, by producing a greater quantity of a
particular product, our manufacturing process is more efficient.
We regularly update our product lines and offer new products. We
maintain a staff of model makers/designers who develop new designs
based on research of the market and surveying stores, catalogues, and
industry publications to determine current trends. Additionally, we
can create specially designed products in response to requests or
pictures submitted to us by our customers. New product design
prototypes are created, and after evaluation, the final product design
is produced.
A principal goal of our design program is to maximize the perceived
value of our products through design and manufacturing innovations that
enhance the appearance of the jewelry without causing corresponding
increases in product costs. This design approach assists us in
producing quality products reflecting general consumer tastes. Tri-
Mark seeks products, not as fashion leaders or faddish styles, but of
enduring styles that encourage moderately priced impulse purchases.
We design and manufacturer virtually all kinds of modern jewelry for
which prices are determined on an individual piece-by-piece basis
depending on the intricacy of the design and manufacture process and
the selection of materials to be used in creating each piece.
Once a client makes a request for a piece of jewelry to be made, we
assist them in the design of the piece and the selection of the type of
precious metal and precious stone(s) for their piece. We then acquire
the raw materials in sufficient quantity to make the specific piece of
jewelry. In normal course business, we do not carry inventories of raw
materials.
We believe that our future success will depend, in part, on our ability
to enhance existing product lines and develop new styles and products
to meet an expanding range of customer requirements.
Earrings
We manufacture earrings, pendants and certain jewelry components. Many
of these products are manufactured through our manufacturing process,
which allows us to produce these items at costs, which are competitive
with, or less than our competitors. We also design earrings and
pendants to match some of our rings so that the products can be sold as
a set.
Pendants
Tri-Mark manufactures an extensive selection of pendants including
religious symbols; popular sayings; sport themes and team logos; animal
motifs; nautical, seashore, western, musical, zodiac, and other
thematic figures; initials; and abstract artistic creations.
17
Pricing
- -------
Tri-Mark's pricing model was arrived using both bottom-up and top-down
analysis. Costs associated with the raw materials, manufacturing, and
shipping were budgeted and added to costs associated with customer
acquisition and retention, continued product development, and overhead
and management. Contingencies were allowed for as deemed necessary.
Then market pricing was reviewed based on current competitors' prices,
along with a market survey of the satisfaction with these prices and
the associated products and services.
Our prices are generally set based upon the cost of the precious
metals, the cost of the contract craftsperson's labor, and thereafter a
general mark-up.
Suppliers
- ---------
We purchase our supplies and raw materials from a variety of suppliers
and we do not believe the loss of any of the suppliers would have a
material effect on our business. Alternative sources of supply for raw
materials for production of jewelry are reaprocess. A complete audited
physical inventory taken at our manufacturing and administrative
facilities on an annual basis, in addition to other physical
inventories during the year.
We have no continuing contracts with any of our suppliers and our
relationship with them may be terminated by either party at any time.
We are not dependent upon any particular supplier for its raw
materials. We have not encountered and do not envisage in the future,
any difficulty in obtaining sufficient raw materials for our needs.
We generally lessen the risk of market fluctuations in the price of
silver by either using the price we pay for the silver to determine the
prices we charge to our customers for finished products incorporating
the silver or by maintaining appropriate forward contracts for the
purchase of silver which protects us against fluctuations in the price
of silver between the order date and the date of sale.
We do not currently do not have any patents, trademarks, licenses,
franchises, concessions, royalty agreements or labor contracts at this
time.
Manufacturing
- -------------
Our manufacturing facilities are located in Los Angeles, CA. We
utilize manufacturing processes that combine modern technology and
mechanization with hand craftsmanship to produce fashionable and
affordable jewelry.
Our manufacturing process combines modern technology, mechanization,
and hand craftsmanship to produce fashionable and moderately priced
jewelry. Our manufacturing operations involve combining various metals
18
to produce cast jewelry, and finishing operations such as cleaning,
polishing, diamond-cutting, engraving, plating and other jewelry work.
We utilize the lost-wax/cast-in-place method of jewelry manufacturing
to produce high-quality gold rings, earrings, pendants, bracelets and
brooches. This is based on an investment casting process used in the
jewelry manufacturing industry. It entails creating wax duplicates of
the items that are encased in a plaster mold. The plaster is hardened
in an oven while the heat melts away the wax, leaving a hollow mold
pre-set with stones in place. The mold is injected with metal, in
effect reverse mounting the stones in the jewelry.
In addition, we utilize the carbide, or Swiss-cutting, manufacturing
operation. This method uses ring blanks of various widths and
dimensions, which have been cut from tubes of karat gold in a lathing
process.
The blanks are then placed on a cutting machine, which is set up to cut
designs into the ring using diamond tipped or carbide tipped tools.
Tri-Mark utilizes CAD/CAM (computer aided design/computer aided
manufacturing) technology to enhance our design, modeling, and
production capabilities. The equipment is utilized for the design of
Tri-Mark's new products and for modifying the scale of existing designs
whenever possible. Tri-Mark obtains proprietary protection for its
products and designs. Tri-Mark updates its product offerings
periodically by adding new designs and eliminating less popular styles.
Many of our manufacturing personnel are paid on a piecework basis.
Management believes this basis provides incentive to maximize
productivity while at the same time, it provides us accuracy in cost
accounting. Our strict quality control guidelines ensure that quality
is not sacrificed for productivity. We use a bar-coded tracking system
for all inventories in process. When a job bag is transferred from one
employee to another, it is automatically electronically "wanded" (UPC
bar coded for number of units, style, and other pertinent customer
information) into that employee's custody. This has the effect of
assigning responsibility for the inventory. It also causes the
recipient employee to verify quality of the product prior to
his or her commencement of work, in effect, policing the prior
person's work product. If the previous employee's work product was
substandard, the recipient would return the job to production control
that would require the previous employee to correct the work product
with no compensation. Otherwise, the recipient would have to correct
the product at no additional compensation and would further make the
recipient's work more difficult as well as delaying his or her
production. Therefore, the system is self-policing.
These significant savings allow us to produce jewelry that previously
did not warrant large labor costs and, accordingly have not been
produced by anyone else. These products sell in a range from $19.99 to
$49.99 retail, and project a quality and perceived value of several
19
times that amount. Management believes the jewelry industry has
avoided producing this type of product since values did not warrant
increased labor costs.
Tri-Mark does not believe the loss of any supplier would have a
material adverse effect on its business. Alternative sources of supply
for the goods purchased by Tri-Mark are readily available.
We believe that our manufacturing capabilities distinguish us from most
of our competitors and enable us to produce very competitively priced,
quality, and consistent products satisfying our customers' demands for
mass merchandising.
Marketing
- ---------
We market and sell our jewelry primarily through our in-house cross-
functional sales and marketing team from our showroom in our Los
Angeles, CA facility, through direct presentations at customer's
locations and through the use of catalogues and trade show exhibitions.
Utilizing this structure, Tri-Mark believes it is able to be more
responsive to trends in the marketplace.
Our marketing efforts emphasize maintaining and building upon our
relationship with existing customers. We believe that providing
exceptional customer service is a key element of our marketing program.
We maintain an adequate inventory of finished goods which, coupled with
our manufacturing capabilities, enables us to rapidly fill customer
orders. Additionally, we emphasize our ability to fill orders in a
prompt and reliable fashion. In addition to prompt and reliable order
fulfillment, we offer a wide variety of customer support services
designed to meet the individual needs of our customers. For many of
our retail customers, we prepackage, price-tag and bar code individual
pieces of jewelry, and then ship an assortment of many prepackaged
items to individual retail locations.
Our marketing strategy is to increase brand recognition of the Tri-Mark
name. This includes advertising in consumer magazines and other
publications of many of America's finest retailers. We believe that
there is growing brand recognition of the Tri-Mark name with consumers
and that this recognition has enhanced sales of our products.
A variety of strategies will be used to generate placements for Tri-
Mark in magazines, daily newspapers, online publications, and vertical
outlets, including, but not limited to the following:
- Media Relations - Newsworthy press releases will be
strategically disseminated and followed up. The PR team will
communicate with editors at top target outlets by telephone, in
person, and through e-mail. To complement the media relations
activities, the PR team will perform news monitoring and advise
Company executives with regards to media exclusives.
20
- Proactive Media Outreach - The PR team will develop a variety
of timely and compelling story angles and contact reporters. The PR
team will also disseminate white papers and bylined articles from
Company executives and spokespersons.
- Editorial Calendar Opportunities - These are stories planned
weeks and months in advance, will be presented to appropriate news
outlets for inclusion in these planned articles.
- Product Launches - The Company PR team will strategize with the
executive team regarding all new product launches.
- One-on-One Press Visits - When appropriate, individual meetings
with selected journalists will be arranged to help them research
stories and familiarize them with the Company.
- Press Releases - The PR team will be responsible for press
releases communicating information about client successes, new
technologies, partnerships, and important details about Tri-Mark's
executives and products.
- Industry and Competitive News - The PR team will monitor
industry news as well as keep Company executives abreast of
developments on perceived competitors.
- Investor Materials - The PR team will help to insure that all
investor communication documents consistently convey Tri-Mark's
message and branding across all avenues.
- Conference and Trade Show Support - Influential trade shows and
conferences will be identified in order for Tri-Mark to pursue new
business development and networking. A Company trade show booth
will be created and the media will be pitched prior to trade shows.
- Positioning and Key Message Refinement - Tri-Mark's positioning
will be reviewed and refined to ensure consistent communication with
all media and audiences. Messages will be refined regularly as
warranted by changing market conditions and feedback from the media
and analysts.
- Media Training - The PR team will be responsible for working
with Company executives on overall interview skills, understanding
the media and their approaches, and providing creative tips and
techniques for bringing the written word to life using visuals and
real-world examples.
- White Papers and Bylined Article Development - White papers and
bylined articles are an excellent medium to educate target audiences
and present a detailed overview of the market and Tri-Mark. Tri-
Mark will work to source, develop, and place bylined articles and
white papers from Tri-Mark. Articles may be bylined by company
spokespersons, industry consultants, or customers. We will work
with target publications in the technology and vertical segments to
secure placements and shape article content.
Advertising
- -----------
We advertise in industry trade journals and participate with customers
in cooperative advertising programs. There are also ads appearing in
the promotional advertising pieces of our customers, which are paid for
by our customers.
21
Tri-Mark plans to add marketing staff to develop advertising and public
relations campaigns, in addition to developing Tri-Mark's collateral
material. Tri-Mark plans to support its sales staff by implementing
strategic advertising campaigns focused on brand name recognition.
Advertising campaigns will generally focus on print media, using
industry publications, although other means of advertising will also be
considered and implemented by our Marketing Department. Tri-Mark also
plans to use its website as a means of advertising and as an electronic
brochure for generating sales leads and increasing market awareness.
Tri-Mark is implementing certain policies and procedures to control
advertising or promotions that will be utilized by its marketing
representatives and in its strategic alliances. These policies and
procedures are necessary to assure the proper representation of Tri-
Mark at all times and include the pre-approval of all advertising
material and restrictions on how representatives can advertise. A
representative's failure to follow these rules can result in
termination.
Promotion
- ---------
Products are promoted using catalogues, flyers, advertisements in trade
publications, trade show exhibitions, and cooperative advertising
allowances with certain customers.
Target Market and Channels of Distribution
- ------------------------------------------
Tri-Mark distributes its products through
- mass merchandisers
- department stores
- home shopping networks
- jewelry stores (ranging from the independent store with one
location to the large national chains)
- large retailers
- discount stores
- warehouse clubs
- catalog showrooms
- national and regional jewelry chains
- large regional wholesalers.
We assist our customers in allocating their purchasing budget among the
items in the various product lines. We advise them of items having
higher consumer demand as determined by Tri-Mark's computerized market
analysis. Prices vary on the basis of service required by customers.
Customer Profile
- ----------------
We categorize our customers into four (4) major jewelry segments:
- mass merchandisers such Wal-Mart.
- department stores such as Sears and K-Mart
22
- home shopping networks, such as QVC
- jewelry chain stores such as Zales Corporation
We generally do not sell pursuant to any formal or long-term contracts,
although we do have a long-term supply agreement and a contract with a
major television shopping network.
Customer Service
- ----------------
To better meet our customers' needs, we have a wide range of customer
service programs:
- inventory management assistance through electronic data
interchange;
- customized packaging and bar coding; and
- computerized analysis of sales and marketing trends.
Our vertical integration and customer service programs enable us to be
responsive to our customers' needs. We manufacture and deliver most
orders on a timely and more cost-effective basis than many of our
competitors.
Competition
- -----------
The jewelry industry is highly competitive, both in the United States
and on a global basis. Tri-Mark encounters competition primarily from
manufacturers with national and international distribution capabilities
and, to a lesser extent, from small regional suppliers of jewelry. Our
competitors include domestic and foreign jewelry manufacturers,
wholesalers, and importers who may operate on a national, regional, and
local scale.
The principal competitive factors in the industry are price, quality,
and design and customer service. Our specialized customer service
programs are important competitive factors in sales to nontraditional
jewelry retailers, including television-shopping networks. The recent
trend towards consolidation at the retail level in the jewelry industry
and low labor costs outside of the United States may increase the level
of competition facing Tri-Mark.
The diverse distribution channels in which we market our products
frequently involve different competitive factors. The ability to
provide specialized services is a particularly important competitive
factor in our sales to certain large retailers such as mass
merchandisers, discount stores, and warehouse clubs. Product
availability and the ability to offer consistent product quality at
competitive prices tend to be the key competitive factors to the
customer segments that we serve. Some of our competitors may
specialize in sales to particular distribution channels and may have
relationships with customers in those distribution channels that make
23
competition by us more difficult. We believe that the recent trend
towards consolidation at the retail level in the jewelry industry will
increase the level of competition in the markets in which we compete.
We believe that we are well positioned in the industry and have a
reputation for responsive customer service, high quality, and well-
designed jewelry with broad consumer appeal.
We believe that the principal competitive factors in our market
include:
- service functionality, quality and performance;
- ease of use, reliability, scalability and security of services;
customer service and support;
- establishing a significant base of customers and distribution
partners;
- ability to introduce new services to the market in a timely
manner;
- ability to integrate with third-party offerings and services;
and
- pricing.
Many of our current and potential competitors have longer operating
histories, significantly greater financial, technical, and other
resources and greater name recognition than we have. Our current and
future competitors may be able to respond more quickly to new or
emerging technologies and changes in customer requirements. Some of
these competitors have dominant positions in other markets and may seek
to leverage those positions to expand their presence, which may make it
more difficult for others to compete. In addition, current and
potential competitors have established, and may in the future
establish, cooperative relationships with third parties and with each
other to increase the availability of their products and services to
the marketplace. Competitors may introduce products or services that
have better capabilities or performance, lower prices, or broader
distribution or market acceptance, which could cause us to lose
customers, lose revenue and earnings, lose market share or require us
to increase expenses or reduce the price of our services, any of which
could harm our business and operating results.
Sales
- -----
We offer our customers a large selection of jewelry styles, consistent
product quality, and prompt delivery of product orders. Sales are made
by our sales personnel primarily at our showroom in Los Angeles, CA and
direct presentations at customers' locations.
We have an in-house sales force and do not employ outside regional
sales offices, and does not supply outside salespersons with samples.
This sales structure enables management to control our selling
operation more effectively as well as to deal directly with our
customers and be readily accessible to them. We supplement these sales
24
efforts through attendance at major industry trade shows. We update
our product catalogue each year by adding new designs and eliminating
less popular styles. We assist our customers in allocating their
purchasing budgets among the different items offered by us and monitor
retail sales in order to assess customer response to our products.
Tri-Mark's sales staff provides quick reaction to customer pricing and
design requirements. Tri-Mark utilizes computerized databases and
electronic data interfaces which assist these customers by providing
information that may be used in marketing, merchandising, and inventory
management.
An increasing portion of retail sales in the fine jewelry industry is
being made through discount department stores, warehouse clubs, and
television shopping networks. These customers are particularly
interested in unique designs, volume production, and price and credit
terms.
We ship our products in bulk to wholesale distributors. For certain
retail jewelry chains, we prepackage and price tag most items. We then
ship an order of many different items to distribution centers and
stores in the chain. We provide additional services to certain
customers to meet their specific marketing needs, such as tagging,
boxing, and point-of-sale displays.
We also ship our jewelry to a limited number of customers on a
consignment basis. Through these arrangements, we deliver our products
on consignment, and when sold to consumers, the retailer pays Tri-Mark
for the consigned merchandise. Consigned merchandise is subject to our
own consignment arrangements with our gold lenders.
We reduce gross sales by the amount of returns and discounts to
determine net sales each month. Each month we establish a reserve for
returns based on our historical experience, the amount of gross sales
and the customer base.
We have no contracts with any of our customers other than the orders
for made-to-order products and our relationships with them may be
terminated by either party at any time.
International
- -------------
Tri-Mark's products are also sold internationally by Tri-Mark's
marketing groups and are exhibited at the major international jewelry
trade fairs.
Tri-Mark intends to continue to explore new market opportunities
through product development, strategic partnering, acquisitions, the
creation of new companies or divisions, and the use of
partnership/distributor relationships that will provide increased
market penetration in international markets.
25
Seasonal Nature of Business
- ---------------------------
Retail sales of jewelry are generally weighted to the fourth quarter.
While our sales are subject to seasonal fluctuations, these
fluctuations are mitigated to a degree by the early placement of orders
by many of our customers, particularly for the Christmas holiday
season. For most manufacturers these sales patterns reflect a business
that tends to fall one-third in the first half of the year with the
remaining two-thirds in the second half of the year.
Further, management believes that our sales and those of our customers
are not as seasonally affected as most competitors' sales because many
of our products are lower priced goods designed for mass merchandising,
which generate year round impulse purchases.
Sales by Internet retailers, who generally lug their product to the
consumer (as opposed to retail stores), have their revenues generally
less weighted for Christmas due primarily to the consumer's fear of
late delivery, and because of the consumer's likelihood to be in the
Internet shopping mall during that key shopping season. In addition,
these retailers generally benefit in the key winter months when the
consumer is more likely to order from home. As a result, we do not
expect to be as affected because of our revenues from alternative
customers such as television shopping networks and sales over the
Internet.
Tri-Mark has experienced a seasonal pattern in its operating results
with the third and fourth quarters typically having the highest sales.
This fluctuation is mitigated to a degree by the early placement of
orders by many of our customers, particularly for the Christmas holiday
season. In addition, we market birthday, anniversary, holiday, and
seasonal products year round for such occasions as Mother's Day,
Valentine's Day, Father's Day, religious holidays, and school
graduations.
Revenue Sources
- ---------------
Revenues are acquired through, but not limited to the following:
- customers which management has strategic relationships;
- purchasing under performing competitors with current clients;
and through
- execution of our marketing plan.
Strategic Partners and Alliances
- --------------------------------
Tri-Mark will leverage sales and delivery alliances with companies
whose capabilities complement its own by enhancing the Tri-Mark brand
and extending our sales to new geographies. By combining alliance
partners' products and services with Tri-Mark's capabilities and
expertise, Tri-Mark will create innovative, high-value products for our
clients. Some alliances will be specifically aligned with Tri-Mark's
26
products, thereby adding skills, technology and insights that are
applicable across the jewelry industry. Tri-Mark also plans to work
with strategic partners to promote the Tri-Mark brand.
In addition, Tri-Mark plans to continue to develop solutions that
address specific market needs, are affordable, and can be easily
integrated with the products we currently have in place. Tri-Mark
intends to continue to explore new market opportunities through product
development, strategic partnering, acquisitions, the creation of new
companies or divisions, and the use of partnership/distributor
relationships that will provide increased market penetration in
international markets.
Patents, Trademarks, Intellectual Property, and Proprietary Protection
- ----------------------------------------------------------------------
Tri-Mark does not own or license any patents, trademarks, or service
marks that are material to its business.
Insurance
- ---------
We maintain primary all-risk insurance, with coverage in excess of our
current inventory levels (including consigned gold), to cover thefts
and damage to inventory located on our premises and insurance on Tri-
Mark goods in transit. We also maintain insurance covering theft and
damage to inventory at our suppliers' locations. The amount of
coverage available under such policies is limited and may vary by
location, but generally is in excess of the value of the gold held by a
particular supplier. Additional insurance coverage is provided by some
of Tri-Mark's suppliers. We also maintain fidelity insurance, which is
insurance providing coverage against theft or embezzlement by our
employees.
Environmental Matters
- ---------------------
Tri-Mark believes it is in material compliance with all relevant
federal, state, and local environmental regulations, and does not
expect to incur any significant costs to maintain compliance with the
regulations in the foreseeable future.
Extensive environmental laws and regulations and various other federal,
state and local laws and regulations regarding health and safety
matters affect our operations. Since our manufacturing operations
routinely use materials regulated by the environmental laws we may
incur material liabilities if any claims are brought against us in
connection with these operations. We have an ongoing compliance
program to ensure that our manufacturing processes are in compliance
with environmental rules and regulations. We have taken steps to
reduce the environmental risks associated with our operations and
believe that we are currently in substantial compliance with all
environmental laws.
27
Employees
- ---------
We presently have two full-time employees, eight independent
contractors employees and no part-time employee.
Reports to Security Holders
We intend to become a fully reporting company under the requirements of
the Exchange Act, and will file the necessary quarterly and other
reports with the Securities and Exchange Commission. Although we will
not be required to deliver our annual or quarterly reports to security
holders, we intend to forward this information to security holders upon
receiving a written request to receive such information. The reports
and other information filed by us will be available for inspection and
copying at the public reference facilities of the Securities and
Exchange Commission located at 450 Fifth Street, N. W., Washington,
D.C. 20549.
Copies of such material may be obtained by mail from the Public
Reference Section of the Securities and Exchange Commission at 450
Fifth Street, N. W., Washington, D.C. 20549, at prescribed rates.
Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330. In addition, the
Commission maintains a World Wide Website on the Internet at:
http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Securities and Exchange Commission.
Properties
- -----------
Our corporate and manufacturing offices are located at 643 S. Olive
Street, Suite 777, Los Angeles, CA 90014. Our telephone number is
(213) 689-9300 and facsimile number is (213) 689-9304. These offices
consist of 800 square feet which are leased on a month to month basis
for $700.00 per month.
DILUTION
Assuming completion of the offering, there will be up to 9,000,000
common shares outstanding. The following table illustrates the per
common share dilution as of February 15, 2008 that may be experienced
by investors at various funding levels.
Funding Level $1,000,000 $500,000 $250,000 $125,000
---------- -------- -------- --------
<s> <c> <c> <c> <c>
Offering price $1.00 $1.00 $1.00 $1.00
Net tangible book
value per common
share before offering (.002) (.002) (.002) (.002)
28
Increase per common
share attributable to
investors .107 .055 .026 .009
----- ----- ----- -----
Pro forma net tangible
book value per
common share after
offering .105 .053 .024 .007
----- ----- ----- ------
Dilution to investors .895 .947 .976 .993
Dilution as a
percentage of
offering price 89.5% 94.7% 97.6% 99.3%
Based on 1,000 common shares outstanding as of December 31, 2007 and
total stockholder's deficit of $(17,119) utilizing audited December
31, 2007 financial statements.
Since inception, the officers, directors, promoters and affiliated
persons have paid an aggregate average price of $.0001 per common share
in comparison to the offering price of $1.00 per common share.
Further Dilution
- ----------------
Tri-Mark may issue equity and debt securities in the future. These
issuances and any sales of additional common shares may have a
depressive effect upon the market price of Tri-Mark's common shares and
investors in this offering.
DIVIDEND POLICY
We have never declared or paid any dividends. In addition, we
anticipate that we will not declare dividends at any time in the
foreseeable future.
Instead, we will retain any earnings for use in our business. This
policy will be reviewed by our board of directors from time to time in
light of, among other things, our earnings and financial position.
No distribution may be made if, after giving it effect, we would not be
able to pay its debts as they become due in the usual course of
business; or the corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation
permit otherwise) the amount that would be needed, if we were to be
dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are
superior to those receiving the distribution. The board of directors
may base a determination that a distribution is not prohibitive either
on financial statements prepared on the basis of accounting practices
and principles that are reasonable in the circumstances or on a fair
valuation of other method that is reasonable in the circumstances.
29
DETERMINATION OF OFFERING PRICE
The offering price of the common shares was arbitrarily determined by
Tri-Mark based on the financial needs of Tri-Mark without regard to the
book value or market value, if any, of our common shares.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations for the years ended December 31, 2007 and 2006.
The net loss of $(24,869) for the year ended December 31, 2007
increased compared to last year due to commencement of operations.
Revenues
- --------
Revenues of $25,100 for the year ended December 31, 2007 increased from
$0 for the year ended December 31, 2006. This increase can also be
attributed to commencement of operations.
Cost of Revenues
- ----------------
Cost of Revenues of $20,063 for the year ended December 31, 2007
compared to $0 for the previous year. The increase in Cost of Revenues
is attributed to sales levels.
Selling, general and administrative expense
- -------------------------------------------
For the year ended December 31, 2007, general, administrative and
selling expenses of $29,906 increased from $650 for the year ended
December 31, 2007 due to the commencement of operations. Selling,
general and administrative expenses will continue to increase as we
implement sales and marketing initiatives.
Liquidity and Capital Resources
- -------------------------------
During the year ended December 31, 2007, net cash used by investing
activities of $111,000 compared to $0 for the year ended December 31,
2006. Cash used by investing activities resulted from our purchase of
property and equipment. We have no commitments for future purchases of
capital assets.
During the year ended December 31, 2007, net cash provided by financing
activities was $129,521 from proceeds of an officer loan compared to
$11,450 from proceeds from an officer loan of $1,450 and the issuance
of common stock of $10,000 for the year ended December 31, 2006. .
We are currently not aware of any trends that are reasonably likely to
have a material impact on our liquidity. Our current cash balance is
estimated to be sufficient to fund our current operations for two
months. We are attempting to increase the sales to raise much needed
30
cash for the remainder of the year, which will be supplemented by our
efforts to raise cash through the issuance of equities securities. It
is our intent to secure a market share in the livestock and inanimate
identification industry which we feel will require additional capital
over the long term to undertake sales and marketing initiatives,
further our research and development, and to manage timing differences
in cash flows from the time product is manufactured to the time it is
sold and cash is collected from the sale. Our capital strategy is to
increase our cash balance through financing transactions, including the
issuance of debt and/or equity securities.
Plan of Operations
- ------------------
Tri-Mark will rely upon both internal development and upon acquisitions
for its growth. Tri-Mark believes that it can respond more quickly to
market requirements by acquiring complementary products or technology,
and intends to continue to evaluate opportunities to acquire new
products or technology in the future.
The internal growth objective is to position Tri-Mark as a leading
jewelry manufacturer and distributor, with the following key strategic
elements:
- Leveraging the Customer Base - Tri-Mark believes significant
opportunities exist to leverage its customer base by selling other
products and services to customers who utilize less than the full
complement of Tri-Mark's products and services, as well as by
expanding Tri-Mark's offerings.
- Offering Services to Other Segments of the Jewelry Industry -
Tri-Mark's Management believes that the need for and interest in
other market segments can provide opportunities to develop Tri-
Mark's product and services.
- Strategic Acquisitions Will Allow Expansion of Solutions and
Customer Base - Management will endeavor to increase Tri-Mark's
anticipated variety of products and believes the industry presents
substantial growth opportunities for companies with access to
capital and the ability to implement a disciplined
acquisition/investment program, while effectively integrating and
operating acquired companies. Management also believes there may be
opportunities to expand prospective product offerings and/or
anticipated customer base through strategic acquisitions.
DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS
Our bylaws provide that the number of directors who shall constitute
the whole board shall be such number as the board of directors shall at
the time have designated. We confirm that the number of authorized
directors has been set at five pursuant to our bylaws. Each director
shall be selected for a term of one year and until his successor is
elected and qualified. Vacancies are filled by a majority vote of the
31
remaining directors then in office with the successor elected for the
unexpired term and until the successor is elected and qualified. The
directors, officers and significant employees are as follows:
NAME AND ADDRESS AGE POSITIONS HELD SINCE
<s> <c> <c> <c>
Barry Sytner 54 CEO, Director Inception
470 S. Bedford Drive to present
Beverly Hills, CA 90212
Eugene V. Brennan 66 VP of operations Inception
1 Scenic Drive to present
Unit 609
Highlands, NJ 07732
Betty Soumekh 53 CFO, Secretary Inception
470 S. Bedford Drive Director to present
Beverly Hills, CA 90212
Business Experience
- -------------------
Barry Sytner, CEO and Director, has been in the Jewelry industry since
1972. He founded Tri-Mark Manufacturing in 2006 to design and
manufacture jewelry for Department stores, Wholesalers and Television.
These designs can be found in major retailers in the United States and
Canada. Prior to Tri-Mark, Mr. Sytner was C.E.O. of Trimline creations
for 10 years, distributing promotional diamond jewelry. From 1985 to
1995, Mr. Sytner was CEO of Flash Designs, manufacturing and selling
diamond accent jewelry. In 1972, Mr. Sytner founded Stuart Findings,
which helped to revolutionize the Jewelry industry with new lines of
die-struck lightweight jewelry giving retailers the ability to promote
affordable items. Mr. Sytner has served on committees for the
Manufacturing Jewelers and Silversmiths of America.
Eugene V. Brennan,V.P President of sales, has held executive positions
with major corporations for the past 30 years. Since 2006, he has been
President of Tri-Mark Inc, developing sales with national wholesalers
and retailers such as Zales corporation and QVC. Prior to joining Tri-
Mark, Mr. Brennan was Principal of E.V. Brennan & Associates where he
increased the profits of Rockwell Salvage by 700% over a two year
period, was instrumental in the launching of Celebrity Shopping
Network, created a Financial Services company. From 1977 to 1982, Mr.
Brennan was Executive Vice President and Director at F.W. Woolworth
responsible for Jewelry and Watch Departments taking sales to close to
$40 million. Mr. Brennan has been on the Board of Directors of two
Chambers of Commerce, as well as Board member of Shopping Center
Associations and Merchants Associations in four cities.
Betty Soumekh, CFO, Secretary and Director of Tri-Mark Inc since its
inception and has brought a wealth of experience to Tri-Mark. She
consulted with Edison International for two years as part of an
executive team overseeing a $9 billion modernization initiative. From
32
1994 to 2004, Ms Soumekh developed and implemented organizational
effectiveness strategies for AT&T, Blue Cross, British Telecom, the
Canadian Imperial Bank of Commerce, Kimberly Clark, Vanguard Financial
group. From 1991 to 1994, she was Director of Organizational
Development with Dylex, a $3 billion retail chain headquartered in
Toronto. Ms Soumekh worked with the French Ministry of Finance and
Trade from 1982 to 1986 to promote Export Credit programs for
corporations with international operations. Ms Soumekh holds an
international MBA from the C.E.C.E, France
The above named directors will serve in their capacity as director
until our next annual shareholder meeting to be held within six months
of our fiscal year's close. Directors are elected for one-year terms.
Code of Ethics Policy
- ---------------------
We have not yet adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting
officer or controller or persons performing similar functions.
Corporate Governance
- --------------------
There have been no changes in any state law or other procedures by
which security holders may recommend nominees to our board of
directors. In addition to having no nominating committee for this
purpose, we currently have no specific audit committee and no audit
committee financial expert. Based on the fact that our current
business affairs are simple, any such committees are excessive and
beyond the scope of our business and needs.
Family Relationships
- --------------------
Barry Sytner, an officer and director is married to Betty Soumekh, an
officer and director.
Involvement in Certain Legal Proceedings
- ----------------------------------------
None of our directors, executive officers and control persons have been
involved in any of the following events during the past five years:
- Any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that time,
- Any conviction in a criminal proceeding or being subject to any
pending criminal proceeding (excluding traffic violations and other
minor offenses);
- Being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise
limiting his or her involvement in any type of business, securities or
banking activities,; or
33
- Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.
Executive Compensation
- ----------------------
We may elect to award a cash bonus to key employees, directors,
officers and consultants based on meeting individual and corporate
planned objectives.
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name Annual Restricted LTIP Other
and Compen- Stock Options/ Pay- Compen-
Principal Salary Bonus sation Awards SARs Outs sation
Position Year ($) ($) ($) ($) ($) ($) ($)
<s> <c> <c> <c> <c> <c> <c> <c> <c>
Barry Sytner
Chief Executive Officer 2007 - - - - - - -
2006 - - - - - - -
Betty Soumekh
Chief Financial Officer 2007 - - - - - - -
2006 - - - - - - -
We do not have any standard arrangements by which directors are
compensated for any services provided as a director. No cash has been
paid to the directors in their capacity as such.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 15, 2008, the number and
percentage of outstanding shares of Tri-Mark common stock owned by (i)
each person known to us to beneficially own more than 5% of its
outstanding common stock, (ii) each director, (iii) each named
executive officer and significant employee, and (iv) all officers and
directors as a group.
Percentage
Name Amount Percentage After Offering
- ---- ------ ---------- --------------
Barry Sytner 8,000,000 100% 88.89%
Eugene V. Brennan 0 0% 0%
Betty Soumekh 0 0% 0%
Officers and Directors
As a group (3 persons) 8,000,000 100% 88.9%
34
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Director Independence
- ---------------------
Tri-Mark's board of directors consists of Barry Sytner and Betty
Soumekh. They are not independent as such term is defined by a
national securities exchange or an inter-dealer quotation system.
During the year ended December 31, 2007, there were no transactions
with related persons other than as described below.
Related Party Loan
- ------------------
At December 31, 2007 and 2006, Barry Sytner, an officer and director
made loans to Tri-mark in the amounts of $130,971 and $1,450,
respectively.
DESCRIPTION OF CAPITAL STOCK
The following statements constitute brief summaries of Tri-Mark's
certificate of incorporation and bylaws, as amended.
Common Shares
- -------------
Tri-Mark's articles of incorporation authorize it to issue up to
25,000,000 common shares and no preferred shares, $0.0001 par value per
common share. On February 15, 2008, Tri-Mark effectuated an 8,000 to 1
forward stock split.
Liquidation Rights
- ------------------
Upon liquidation or dissolution, each outstanding common share will be
entitled to share equally in the assets of Tri-Mark legally available
for distribution to shareholders after the payment of all debts and
other liabilities.
Dividend Rights
- ---------------
There are no limitations or restrictions upon the rights of the board
of directors to declare dividends out of any funds legally available
therefore. Tri-Mark has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future.
The board of directors initially may follow a policy of retaining
earnings, if any, to finance the future growth of Tri-Mark.
Accordingly, future dividends, if any, will depend upon, among other
considerations, Tri-Mark's need for working capital and its financial
conditions at the time.
Voting Rights
- -------------
Holders of common shares of Tri-Mark are entitled to voting rights of
one hundred percent. Holders may cast one vote for each share held at
all shareholders meetings for all purposes.
35
Other Rights
- ------------
Common shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
common shares. Common Shares do not have cumulative voting features.
Our bylaws allow action to be taken by written consent rather than at a
meeting of stockholders with the consent of the holders of a majority
of shares entitled to vote.
Transfer Agent
- --------------
Upon completion of the offering, Olde Monmouth Stock Transfer will act
as Tri-Mark's transfer agent.
SHARES ELIGIBLE FOR FUTURE SALE
Upon the date of this prospectus, there are 8,000,000 shares of our
common stock outstanding of which no common shares may be freely traded
without restriction.
Upon the effectiveness of this registration statement and subsequent
exercise of the warrants, up to an additional 9,591,251 common shares
may be issued and will be eligible for immediate resale in the public
market. The remaining common shares will be restricted within the
meaning of Rule 144 under the Securities Act, and are subject to the
resale provisions of Rule 144.
In general, under Rule 144, a person who has beneficially owned, for at
least one year, shares of common stock that have not been registered
under the Securities Act or that were acquired from an affiliate of
Tri-Mark is entitled to sell within any three-month period the number
of shares of common stock that does not exceed the greater of:
- one percent of the number of then outstanding shares of common
stock, or
- the average weekly reported trading volume during the four
calendar weeks preceding the sale.
Sales under Rule 144 are also subject to notice and manner of sale
requirements and to the availability of current public information and
must be made in unsolicited brokers' transactions or to a market maker.
A person who is not an affiliate of Tri-Mark under the Securities Act
during the three months preceding a sale and who has beneficially owned
such shares for at least two years is entitled to sell the shares under
Rule 144 without regard to the volume, notice, information and manner
of sale provisions. Affiliates must comply with the restrictions and
requirements of Rule 144 when transferring restricted shares even after
the two year holding period has expired and must comply with the
restrictions and requirements of Rule 144 in order to sell unrestricted
shares.
36
No predictions can be made of the effect, if any, that market sales of
shares of common stock or the availability of such shares for sale will
have on the market price prevailing from time to time. Nevertheless,
sales of significant amounts of our common stock could adversely affect
the prevailing market price of the common stock, as well as impair our
ability to raise capital through the issuance of additional equity
securities.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer as provided in the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the
small business issuer in the successful defense of any action, suit or
proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
- ------------------
Our common stock is not traded over the counter and is quoted by the
Over The Counter Bulletin Board (OTCBB).
Holders
- -------
As of February 15, 2008, there was only one shareholder of Tri-Mark.
Dividends
- ---------
We have not declared any cash dividends on our common stock since our
inception and do not anticipate paying any dividends in the foreseeable
future. We plan to retain any future earnings for use in our business.
Any decisions as to future payment of dividends will depend on our
earnings and financial position and such other factors as the board of
directors deems relevant.
37
EXPERTS
The financial statements of Tri-Mark appearing in this registration
statement have been audited by Spector & Wong, LLP, independent
auditors and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
LEGAL PROCEEDINGS
We are not a party to any legal proceedings the outcome of which, in
the opinion of our management, would have a material adverse effect on
our business, financial condition, or results of operation.
LEGAL MATTERS
The validity of the common shares being offered hereby will be passed
upon by Jody M. Walker, Attorney At Law, Centennial, Colorado.
WHERE YOU CAN FIND MORE INFORMATION
At your request, we will provide you, without charge, a copy of any
document filed as exhibits in this prospectus. If you want more
information, write or call us at:
Tri-Mark MFG, Inc.
643 South Olive St. #777
Los Angeles, CA 90014
Telephone (213) 689-9300
Fax (213) 689-9304
Attention: Barry Sytner, Chief Executive Officer
Our fiscal year ends on December 31st. We are a reporting company and
file annual, quarterly and current reports with the SEC. You may read
and copy any reports, statements, or other information we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington D.C.
20549. You can request copies of these documents, upon payment of a
duplicating fee by writing to the SEC. Please call the SEC at 1-800-
SEC-0330 for further information on the operation of the public
reference rooms. Our SEC filings are also available to the public on
the SEC Internet site at http:\\www.sec.gov.
38
FINANCIAL STATEMENTS
The following financial statements required by Item 310 of Regulation
S-B are furnished below:
Report of Independent Registered Public Accounting Firm dated January
28, 2008.
Balance Sheets,
As of December 31, 2007 and December 31, 2006
Statements of Operations and Comprehensive Loss
for the years ended
December 31, 2007 and 2006
Statements of Cash Flows for the
years ended December 31, 2007
and 2006 (unaudited)
Notes to financial statements
39
[Letterhead of SPECTOR & WONG, LLP]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Tri-Mark MFG, Inc.
We have audited the accompanying balance sheets of Tri-Mark MFG, Inc.
as of December 31, 2007 and 2006, and the related statements of
operations, stockholders' deficit, and cash flows for each of the years
ended December 31, 2007 and 2006. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (Unites States). Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial positions of Tri-Mark
MFG, Inc. as of December 31, 2007 and 2006, and the results of its
operations and its cash flows for each of the years ended December 31,
2007 and 2006 in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. As discussed in Note 2
to the financial statements, the company's operation losses and working
capital deficiency raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those
matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/s/Specdtor & Wong, LLP
Spector & Wong, LLP
Pasadena, California
January 28, 2008
40
TRI-MARK MFG, INC.
BALANCE SHEETS
- -----------------------------------------------------------------------
As of
-------------------------
December 31, December 31
2007 2006
Audited Audited
------------ -----------
ASSETS
CURRENT ASSETS:
Cash $ 52 $ 10,000
Accounts Receivable 25,000 -
---------- ----------
Total current assets 25,052 10,000
Property and equipment, net of accumulated
depreciation of $22,200 and none for
2007 and 2006, respectively 88,800 -
---------- ----------
TOTAL ASSETS $ 113,852 $ 10,000
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes payable - related parties $ 130,971 $ 1,450
---------- ----------
Total current liabilities 130,971 1,450
---------- ----------
TOTAL LIABILITIES 130,971 1,450
----------
Stockholders' Deficit:
Common stock, $1 par value; 1,000 shares
authorized; 1,000 shares issued and
outstanding for both years 1,000 1,000
Paid-in capital 9,000 9,000
Accumulated deficit (27,119) (1,450)
---------- ----------
Total stockholders' equity (17,119) 8,550
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 113,852 $ 10,000
========== ==========
See notes to audited financial statements.
41
TRI-MARK MFG, INC.
STATEMENTS OF OPERATIONS
For years ended
December 31,
------------------------
2007 2006
---------- ----------
Revenues $ 25,100 $ -
Cost and Expenses
Cost of revenue 20,063 -
Selling, general and administrative expenses 29,906 650
---------- ----------
49,969 650
Operating income (loss) (24,869) (650)
Other Income (Expenses):
Interest and Other Income - -
Interest and Other Expenses - -
---------- ----------
Total Other Income (Expenses) - -
---------- ----------
Net income (loss) before Income Taxes $ (24,869) $ (650)
========== ==========
Provision for Taxes 800 800
---------- ----------
Net Income (Loss) $ (25,669) $ (1,450)
========== ==========
Net loss per share, Basic and Diluted $(25.67) $(1.45)
Weighted Average Number of Shares 1,000 1,000
See notes to audited financial statements.
42
TRI-MARK MFG, INC.
STATEMENT OF STOCKHOLDERS' DEFICIT
Common Stock Paid -in Accumulated
Shares Amounts Capital Deficit Total
---------------- ---------- ----------- -------
<s> <c> <c> <c> <c> <c>
BALANCE, December 15, 2006
(Inception) - $ - $ - $ - $ -
Issuance of Common Stock for cash 1,000 1,000 9,000 $ - 10,000
Net Loss for the year ended
December 31, 2006 (1,450) (1,450)
---------------------------------------------------
Balance at December 31, 2006 1,000 1,000 9,000 (1,450) 8,550
===================================================
Net Loss for the year ended
December 31, 2007 - - - (25,669) (25,669)
---------------------------------------------------
Balance at December 31, 2007 1,000 $ 1,000 $ 9,000 (27,119) (17,119)
===================================================
See notes to audited financial statements
43
TRI-MARK MFG, INC.
STATEMENTS OF CASH FLOWS
Year Ended Year Ended
December 31, December 31,
2007 2006
------------ ------------
Cash Flow from Operating Activities:
Net loss $ (25,669) $ (1,450)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 22,200 -
Increase in Accounts receivable (25,000) -
---------- ----------
Net Cash used by Operating Activities (28,469) (1,450)
---------- ----------
Cash Flow from Investing Activities:
Purchase of property and equipment (111,000) -
---------- ----------
Net Cash used by Investing Activities (111,000) -
---------- ----------
Cash Flow from Financing Activities:
Proceeds from Officer Loan 129,521 1,450
Proceeds from issuance of stock - 10,000
---------- ----------
Net Cash provided by Financing Activities 129,521 11,450
---------- ----------
Net Increase (Decrease) in Cash (9,948) 10,000
Cash Balance, beginning of period 10,000 -
---------- ----------
Cash Balance at end of period $ 52 $ -
========== ==========
Supplemental Disclosures:
Taxes Paid $ - $ -
See notes to audited financial statements
44
TRI-MARK MFG, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Business: Tri-Mark MFG, Inc. ("Tri-Mark") was incorporated
in the state of California on December 15, 2006. Tri-Mark designs and
manufactures low end jewelry which are marketed, wholesale and retail,
domestically.
The accompanying financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of
America (GAAP).
Use of estimates: The preparation of the accompanying financial
statements in conformity with accounting principles generally accepted
in the United States requires management to make certain estimates and
assumptions that directly affect the results of reported assets,
liabilities, revenue, and expenses. Actual results may differ from
these estimates.
Revenue recognition: The Company generally recognizes product revenue
when persuasive evidence of an arrangement exists, delivery has
occurred, the fee is fixed or determinable, and collectibility is
probable. In instances where the final acceptance of the product is
specified by the customer, revenue is deferred until all acceptance
criteria has been met. Customers' prepayments are deferred until
products are shipped and accepted by the customers.
Allowance for Doubtful Accounts: Management of the Company makes
judgments as to its ability to collect outstanding receivables and
provide allowances for the portion of receivables when collection
becomes doubtful. Provisions are made based upon a specific review of
all outstanding invoices. The Company has no bad debt expenses for the
years ended December 31, 2007 and 2006.
Cash Equivalents: For purposes of the statements of cash flows, the
Company considers all highly liquid debt instruments with an original
maturity of three months or less to be cash equivalents.
Fair Value of Financial Instruments: The carrying amounts of the
financial instruments have been estimated by management to approximate
fair value.
Property and Equipment: Property and Equipment are valued at cost.
Maintenance and repair costs are charged to expenses as incurred.
Depreciation is computed on the straight-.line method based on the
following estimated useful lives of the assets: 3 to 4 years for
computer, software and office equipment, and 5 to 7 years for furniture
and fixtures.
45
TRI-MARK MFG, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
Income Taxes: Income tax expense is based on pretax financial
accounting income. Deferred tax assets and liabilities are recognized
for the expected tax consequences of temporary differences between the
tax bases of assets and liabilities and their reported amounts.
Initially, the Company elected to be taxed under the provisions of
Subchapter S of the Internal Revenue Code. Under those provisions, the
Company has no federal income tax liability. Instead, the stockholder
is liable for individual income taxes on the respective share of the
Company's taxable income.
Net Loss Per share: Basic net loss per share includes no dilution and
is computed by dividing net loss available to common stockholders by
the weighted average number of common stock outstanding for the period.
Diluted net loss per share does not differ from basic net loss per
share since potential shares of common stock are anti-dilutive for all
periods presented.
New Accounting Standards: In June 2006, the Financial Accounting
Standards Board (FASB") issued Interpretation No. 48, Accounting for
Uncertainty in Income Taxes, ("FIN 48"). This Interpretation clarifies
the accounting for uncertainty in income taxes recognized in an
enterprise's financial statements in accordance with FASB Statement No.
109, Accounting for Income Taxes. This Interpretation prescribes a
recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. This Interpretation also
provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition.
FIN 48 is effective for fiscal years beginning after December 15, 2006.
The Company does not expect the adoption of FIN 48 to have a material
impact on its financial statements.
In September 2006, the FASB issued Financial Accounting Standards
(FAS") No. 157, Fair Value Measurements. FAS No. 157 defines fair
value, establishers a framework for measuring fair value in generally
accepted accounting principles, and expands disclosures about fair
value measurements. This statement addresses how to calculate fair
value measurements required or permitted under other accounting
pronouncements. Accordingly, this statement does not require any new
fair value measurements. However, for some entities, the application
of the statement will change current practice. FAS No. 157 is
effective for the Company beginning January 1, 2008. The Company is
currently evaluating the impact of this standard.
In September 2006, the Securities and Exchange Commission ("SEC") staff
issued Staff Accounting Bulletin No. 108 ("SAB 108"), Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in
46
TRI-MARK MFG, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Current Year Financial Statements. The stated purpose of SAB 108 is to
provide consistency between how registrants quantify financial
statement misstatements.
Prior to the issuance of SAB 108 there have been two widely-used
methods, known as the "roll-over" and "iron curtain" methods, of
quantifying the effects of financial statement misstatements. The
roll0over method quantifies the amount by which the current year income
statement is misstated while the iron curtain method quantifies the
error as the cumulative amount by which the current year balance sheet
is misstated. Neither of these methods considers the impact of
misstatements on the financial statements as a whole.
SAB 108 established an approach that requires quantification of
financial statement misstatements based on the effects of the
misstatement on each of the Company's financial statements and the
related financial statement disclosures. This approach is referred to
as the "dual approach" as it requires quantification of errors under
both the roll-over and iron curtain methods.
SAB 108 allows registrants to initially apply the dual approach by
either retroactively adjusting prior financial statements as if the
dual approach had always been used, or by recording the cumulative
effect of initially applying the dual approach as adjustments to the
carrying values of assets and liabilities as of January 1, 2006 with an
offsetting adjustment recorded to the opening balance of retained
earnings.
The Company will initially apply SAB 108 using the cumulative effect
transition method in connection with the preparation of the annual
financial statements for the year ending December 31, 2006. The
Company does not believe the adoption of SAB 108 will have a
significant effect on its financial statements.
The FASB has also issued FAS 155, Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140,
FAS 156, Accounting for Servicing of Financial Assets - an amendment of
FASB Statement No. 140, and FAS 158, Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans, but they will not be
applicable to the current operations of the Company. Therefore, a
description and the impact on the Company's operations and financial
position for each of the pronouncements above have not been disclosed.
47
TRI-MARK MFG, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 2 - GOING CONCERN
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. In the near term, the Company expects operating costs to
continue to exceed funds generated from operations. As a result, the
Company expects to continue to incur operating losses and may have
insufficient funds to grow its business in the near future. The
Company can give no assurance that it will achieve profitability or be
capable of sustaining profitable operations. As a result, operations
in the near future are expected to continue to use working capital.
Management of the Company is actively increasing marketing efforts to
increase revenues. The ability of the Company to continue as a going
concern is dependent on its ability to meet its financing arrangement
and the success of its future operations. The financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
NOTE 3 - MAJOR CUSTOMERS
During the year ended December 31, 2007, the Company had one customer
which accounted for $25,100, or 100% of its revenue.
During the period ended December 31, 2006, the Company had no customers
and no revenue.
NOTE 4 - NOTES PAYABLE TO RELATED PARTIES
Notes Payable to related parties at December 31, 2007, and 2006
consists of loans from the CEO of the Company in the amounts of
$130,971 and $1,450, respectively.
NOTE 5 - NET LOSS PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
For years ended December 31,
2007 2006
----------------------------
Numerator:
Net Loss $ (25,669) $ (1,450)
Denominator:
Weighted Average Number of Shares 1,000 1,000
---------- ----------
Net loss per share - Basic and Diluted $ (25.67) $ (1.45)
========== ==========
48
TRI-MARK MFG, INC.
NOTES TO AUDITED FINANCIAL STATEMENTS
- -----------------------------------------------------------
NOTE 6 - STOCKHOLDERS' EQUITY
As of December 31, 2007, there were 1,000 shares of common stock issued
and outstanding. All stocks were issued to the Company's sole
shareholder and the CEO.
NOTE 7 - GUARANTEES
The Company from time to time may enter into certain types of contracts
that contingently require the Company to indemnify parties against
third-party claims. These contracts primarily relate to: (i)
divestiture agreements, under which the Company may provide customary
indemnifications to purchasers of the Company's businesses or assets;
and (ii) certain agreements with the Company's officers, directors and
employees, under which the Company may be required to indemnify such
persons for liabilities arising out of their employment relationship.
The terms of such obligations vary. Generally, maximum obligation is
not explicitly stated. Because the obligated amounts of these types of
agreements often are not explicitly stated, the overall maximum amount
of the obligation cannot be reasonably estimated. Historically, the
Company has not been obligated to make significant payments for these
obligations, and no liabilities have been recorded for these
obligations on its balance sheet as of December 31, 2007.
NOTE 8 - SEGMENT INFORMATION
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that a publicly traded company must disclose
information about its operating segments when it presents a complete
set of financial statements. Since the Company has only one segment;
accordingly, detailed information of the reportable segment is not
presented.
NOTE 10 - SUBSEQUENT EVENT
The Company is in the process of terminating its Subchapter S election
of the Internal Revenue Code.
49
Up to a Maximum of 1,000,000 Common Shares at $1.00 per Common Share
Prospectus
Tri-Mark MFG, Inc.
February 25, 2008
YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND
SEEKING OFFERS TO BUY, COMMON SHARES ONLY IN JURISDICTIONS WHERE OFFERS
AND SALES ARE PERMITTED.
Until __________________2008, all dealers that effect transactions in
these securities, whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
50
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered.
The registrant shall pay the expenses.
SEC Registration Fee . . . . . . $ 39.30
Printing and Engraving Expenses 1,500.00
Legal Fees and Expenses . . . . 25,000.00
Accounting Fees and Expenses. . 5,000.00
Miscellaneous . . . . . . . . . 2,500.00
----------
TOTAL . . . . . . . . . . . . . $34,039.30
==========
Item 14. Indemnification of Directors and Officers
- ---------------------------------------------------
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the small business issuer as provided in the foregoing provisions, or
otherwise, the small business issuer has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities,
other than the payment by the small business issuer of expenses
incurred or paid by a director, officer or controlling person of the
small business issuer in the successful defense of any action, suit or
proceeding, is asserted by such director, officer or controlling person
in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
Item 15. Recent Sales of Unregistered Securities
- -------------------------------------------------
In December 2006, Tri-Mark issued Barry Sytner, an officer and
director, 1,000 common shares for cash of $10,000.
The above securities issued in 2006 were issued pursuant to an
exemption from registration under Section 4(2) of the Securities Act of
1933 to sophisticated investors.
51
Item 16. Exhibits and Financial Statement Schedules
- ---------------------------------------------------
INDEX TO EXHIBITS
Exhibit Number and Identification of Exhibit
(3) Articles of Incorporation, By-Laws
(i) Articles of Incorporation.
(ii) By-Laws.
(iv) Instruments defining common stock.
(5) Consent and opinion of Jody M. Walker, Attorney At Law.
(10) Material Contracts.
(11) Statement of Computation of Per Share Earnings
This Computation appears in the Financial Statements.
(23) Consent of Certified Public Accountant.
Item 17. Undertakings
- ----------------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
i. To include any prospectus required by Section 10(a)(3) of
the Securities Act;
ii. Reflect in the prospectus any facts or events arising after
the effective date of which, individually or together, represent a
fundamental change in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered, if the total dollar value of securities offered
would not exceed that which was registered and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC in accordance
with Rule 424(b) of this chapter, if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
iii. Include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered, and
the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
52
(4) That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser in the initial distribution of
the securities: The undersigned registrant undertakes that in a
primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method
used to sell the securities to the purchase, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchase and will be considered to offer or sell such securities to
such purchaser:
i. Any preliminary prospectus or prospectus of the
undersigned small business issuer relating to the offering required to
be filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or
referred to by the undersigned registrant;
iii. The portion of any other free writing prospectus
relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and
iv. Any other communication that is an offer in the offering
made by the undersigned registrant to the purchaser.
(5) Insofar as indemnification for liabilities arising under the
Securities Act (the "Act") may be permitted to directors, officers and
controlling persons of the registrant as provided in the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of
Los Angeles, State of California, on February 25, 2008.
Tri-Mark MFG, Inc.
By: /s/ Barry Sytner
----------------
Barry Sytner, CEO
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
By: /s/ Barry Sytner By: /s/Betty Soumekh
Barry Sytner, CEO Betty Soumekh, CFO,
Director Controller Director
February 25, 2008 February 25, 2008