SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended June 30, 2010
- -OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________
Commission File Number 333-150462
TRI-MARK MFG, INC.
(Exact name of registrant in its charter)
California 20-8069359
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
643 S. Olive Street, Suite 777
Los Angeles, CA 90014
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (213) 689-9300
Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):
Large accelerated filer [ ] Non-accelerated filer [ ]
Accelerated filer [ ] Smaller reporting company [x]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [x]
The number of outstanding shares of the registrant's common stock,
August 15, 2010:
Common Stock - 9,000,700
2
TRI-MARK MFG, INC.
FORM 10-Q
For the quarterly period ended June 30, 2010
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 11
Item 4T. Controls and Procedures 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 1A. Risk Factors 12
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security
Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
SIGNATURES
3
PART I
Item I - FINANCIAL STATEMENTS
TRI-MARK MFG, INC.
BALANCE SHEETS (Unaudited)
June 30, December 31
2010 2009
------------ -----------
ASSETS
CURRENT ASSETS:
Cash $ 5,924 $ 83,994
Accounts receivable 2,923 8,158
Inventory 12,976 -
---------- ----------
Total current assets 21,823 92,152
---------- ----------
Property and equipment 175,244 121,900
---------- ----------
TOTAL ASSETS $ 197,067 $ 214,052
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,969 $ 8,187
Accrued expenses 9,400 6,100
Advances from officer 74,272 63,412
---------- ----------
Total current liabilities 89,641 77,699
---------- ----------
TOTAL LIABILITIES 89,641 77,699
---------- ----------
Stockholders' Equity:
Common stock, $0.001 par value; 25,000,000
shares authorized; 9,000,700 shares issued
and outstanding at June 30, 2010 and
December 31, 2009 9,001 9,001
Additional paid-in capital 251,174 251,174
Accumulated deficit (152,749) (123,822)
---------- ----------
Total Stockholders' Equity 107,426 136,353
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 197,067 $ 214,052
========== ==========
See notes to interim unaudited financial statements.
4
TRI-MARK MFG, INC.
STATEMENTS OF OPERATIONS (Unaudited)
For the three months ended For the six months ended
-------------------------- ------------------------
June 30, June 30,
2010 2009 2010 2009
---------- ---------- ---------- ----------
<s> <c> <c> <c> <c>
Sales $ 23,709 $ - $ 50,991 $ -
Cost of sales 9,230 - 34,250 -
---------- ---------- ---------- ----------
Gross profit 14,479 - 16,741 -
Selling, general and administrative 24,977 8,050 44,868 15,550
---------- ---------- ---------- ----------
Operating loss (10,498) (8,050) (28,127) (15,550)
Interest and other expenses - - - -
---------- ---------- ---------- ----------
Net loss before income taxes (10,498) (8,050) (28,127) (15,550)
Provision for income taxes - - 800 800
---------- ---------- ---------- ----------
Net Loss $ (10,498) $ (8,050) $ (28,927) $ (16,350)
========== ========== ========== ==========
Net loss per share, Basic and
Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
Weighted Average Number of Shares, 9,000,700 8,000,000 9,000,700 8,000,000
Basic and diluted ========== ========== ========== ==========
See notes to interim unaudited financial statements.
5
TRI-MARK MFG, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
For the six months ended
June 30,
---------------
2010 2009
---- ----
<s> <c> <c>
Cash Flow from Operating Activities:
Net loss $ (28,927) $ (16,350)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 26,656 11,100
(Increase) Decrease in operating assets:
Accounts Receivable 5,235 -
Inventory (12,976) -
Increase (Decrease) in operating
liabilities:
Accounts payable and accrued expenses 1,082 1,750
--------- ---------
Net cash used in operating activities (8,930) (3,500)
Cash Flow from Investing Activities:
Purchase of property and equipment (80,000) -
--------- ---------
Net Cash used by Investing Activities (80,000) -
Cash Flow from Financing Activities:
Proceeds from officer advances 13,160 3,500
Repayments of advance from officer (2,300) -
---------- --------
Net Cash provided by Financing
Activities 10,860 3,500
---------- --------
Net Increase (Decrease) in Cash (78,070) -
Cash Balance at beginning of period 83,994 106
---------- --------
Cash Balance at end of period $ 5,924 $ 106
========== ========
Supplemental Disclosures of Cash Flow
Information:
Taxes Paid $ - $ -
Interest Paid $ - $ -
See notes to interim unaudited financial statements
6
TRI-MARK MFG, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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 is marketed, wholesale and retail,
domestically.
Presentation of Interim Information: The financial information at June
30, 2010 and for the three and six months ended June 30, 2010 and 2009
is unaudited, but includes all adjustments (consisting only of normal
recurring adjustments) that the Company considers necessary for a fair
presentation of the financial information set forth herein in
accordance with accounting principles generally accepted in the United
States of America ("U.S. GAAP") for interim financial information, and
with the instructions to Form 10-Q. Accordingly, such information does
not include all of the information and footnotes required by U.S. GAAP
for annual financial statements. For further information, refer to the
financial statements and footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2009.
The balance sheet as of December 31, 2009 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by U.S. GAAP for complete
financial statements.
The results for the three and six months ended June 30, 2010 may not be
indicative of results for the year ending December 31, 2010 or any
future periods.
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.
7
TRI-MARK MFG, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES - continued
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 collection is probable.
In instances where the final acceptance of the product is specified by
the customer, revenue is deferred until all acceptance criteria have
been met. Customers' prepayments are deferred until products are
shipped and accepted by the customers.
Accounts receivable: Management believes accounts receivable to be
fully collectible; therefore, no allowance for doubtful accounts has
been established at June 30, 2010 and December 31, 2009.
Fair value of financial instruments: Management measures the financial
assets and liabilities in accordance with the requirements of FASB ASC
825 "Financial Instruments". The carrying values of accounts
receivable, accounts payable, accrued expenses, and advances from
officer approximate fair value due to the short-term maturities of
these instruments.
Inventory: Inventory, consisting entirely of finished goods, is valued
at the lower of cost or market (first-in, first-out) or net realizable
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
estimated useful lives of the assets, generally 5 to 7 years.
Depreciation expense for the three and six months ended June 30, 2010
was $13,425 and $26,656, respectively. Depreciation expense for the
three and six months ended June 30, 2009 was $5,550 and $10,100,
respectively.
Earnings (loss) per share: Basic earnings (loss) per share is computed
by dividing net loss available to common stockholders by the weighted
average number of common stock outstanding for the period. Diluted
earnings (loss) per share is computed similar to basic earnings (loss)
per share except that the denominator is increased to include
additional common shares available upon exercise of stock options and
warrants using the treasury stock method, except for periods for which
no common share equivalents are included because their effect would be
anti-dilutive. 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. For the three and six months ended
June 30, 2010 and 2009, there were no potentially dilutive securities
excluded from the computation because they are anti-dilutive.
8
TRI-MARK MFG, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Concentrations: During the three and six months ended June 30, 2010,
approximately 59% and 61% of sales were from one customer. The entire
accounts receivable balance at June 30, 2010 was due from this
customer.
New Accounting Pronouncement: Tri-Mark MFG, Inc. does not believe
newly issued accounting pronouncements will have any material impact on
its financial statements.
NOTE 2 - GOING CONCERN
The Company has incurred substantial losses and has limited revenue.
These matters raise substantial doubt about the Company's ability to
continue as a going concern. The Company incurred net losses of
$28,927 and $16,350 for the six months ended June 30, 2010 and 2009,
respectively. The Company had an accumulated deficit of $152,749 as of
June 30, 2010.
Management of the Company is attempting to obtain an infusion of
capital through either a public or private investment. The ability of
the Company to continue as a going concern is dependent on its ability
to meet its financial obligations 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 - BALANCE SHEETS DETAILS
As of
June 30, December 31,
2010 2009
---- ----
Property and equipment, net
Molds $111,000 $111,000
3D Mold and Jewelry Software 157,500 77,500
Less: accumulated depreciation (93,256) (66,600)
-------- --------
Property and equipment, net $175,244 $121,900
======== ========
Accrued expenses:
Accrued professional fees $ 7,000 $ 4,500
Other accrued expenses 2,400 1,600
-------- --------
Total accrued expenses $ 9,400 $ 6,100
======== ========
9
TRI-MARK MFG, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 4 - ADVANCES FROM OFFICERS
As of June 30, 2010 and December 31, 2009, the Company owed $74,272 and
$63,412, respectively, to an officer of the Company. The advances are
unsecured, due on demand and have no interest provisions. Management
expects to repay the full amount during the year ended December 31,
2010; therefore, it is classified as current on the balance sheet.
NOTE 5 - EARNINGS (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted net
loss per share:
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
---- ---- ---- ----
Numerator:
Net Loss $ (10,498) $ (8,050) $ (28,927) $ (16,350)
========== ========== ========== ==========
Denominator:
Basic loss per share
Weighted Average
Number of Shares 9,000,700 8,000,000 9,000,700 8,000,000
Effect of dilutive
securities:
Stock options and
warrants - - - -
---------- ---------- ---------- ----------
Diluted loss per share
adjusted weighted
average shares 9,000,700 8,000,000 9,000,700 8,000,000
========== ========== ========== ==========
Basic loss per share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
Diluted loss per share$ (0.00) $ (0.00) $ (0.00) $ (0.00)
========== ========== ========== ==========
NOTE 6 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through August 18, 2010, the
date which the financial statements were issued. There were no
subsequent events that require adjustment to or disclosure in these
financial statements.
10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Results of Operations for the three months ended June 30, 2010 and 2009
We earned revenue of $23,709 for the three months ended June 30, 2010.
Cost of sales was $9,230 for the three months ended June 30, 2010
resulting in gross profit of $14,479. For the three months ended June
30, 2010, we had a net loss of $10,498. This loss was due to selling,
general and administrative expenses of $24,977 that included costs of
being a reporting company. Selling, general and administrative
expenses will continue to increase as we implement sales and marketing
initiatives.
We did not earn any revenue for the three months ended June 30, 2009.
Cost of sales was $0 for the three months ended June 30, 2009 resulting
in gross profit of $0. The net loss of $(8,050) for the three months
ended June 30, 2009. This loss was due to selling, general and
administrative expenses of $8,050 that included costs of being a
reporting company. Selling, general and administrative expenses will
continue to increase as we implement sales and marketing initiatives.
Results of Operations for the six months ended June 30, 2010 and 2009
We earned revenue of $50,991 for the six months ended June 30, 2010.
Cost of sales was $34,250 for the six months ended June 30, 2010
resulting in gross profit of $16,741. For the six months ended June
30, 2010, we had a net loss of $28,927. This loss was due to selling,
general and administrative expenses of $44,868 that included costs of
being a reporting company. Selling, general and administrative
expenses will continue to increase as we implement sales and marketing
initiatives.
We did not earn any revenue for the six months ended June 30, 2009.
Cost of sales was $0 for the six months ended June 30, 2009 resulting
in gross profit of $0. The net loss was $(16,350) for the six months
ended June 30, 2009. This loss was due to selling, general and
administrative expenses of $15,550 that include costs of being a
reporting company. Selling, general and administrative expenses will
continue to increase as we implement sales and marketing initiatives.
Liquidity and Capital Resources
- -------------------------------
During the six months ended June 30, 2010, we purchased new jewelry
molds in the amount of $80,000. During the six months ended June 30,
2009, we did not have any investing activities.
During the six months ended June 30, 2010, we received proceeds from an
officer loan of $13,160 and repaid officer loans of $2,300 resulting in
net cash used in financing activities of $10,860.
During the six months ended June 30, 2009, we received proceeds from an
officer loan of $3,500 resulting in net cash used in financing
activities of $3,500.
11
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
cash for the remainder of the year, which will be supplemented by our
efforts to raise cash through the issuance of equity securities.
Plan of Operations
- ------------------
Our main focus in the next twelve months is to increase our marketing
efforts to increase sales of our jewelry. However, subsequent to the
quarter ended June 30, 2010, certain selling shareholders arranged for
the sale of their common shares. Upon completion of the proposed sale,
there will be a change in control of Tri-Mark and the new management
will determine the plan of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable to smaller reporting companies.
Item 4T. Controls and Procedures.
During the three months ended June 30, 2010, there were no changes in
our internal controls over financial reporting (as defined in Rule 13a-
15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we
conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as
of June 30, 2010. Due to the fact that the Tri-Mark has limited
personnel resources, there was a lack of segregation of duties, which
management identified as a material weakness. Based on this
evaluation, our chief executive officer and chief principal financial
officer have concluded such controls and procedures are not effective
as of June 30, 2010 to ensure that information required to be disclosed
by the issuer in the reports that it files or submits under the Act is
recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms and to ensure that
information required to be disclosed by an issuer in the reports that
it files or submits under the Act is accumulated and communicated to
the issuer's management, including its principal executive and
principal financial officers, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None.
Item 1A. Risk Factors. None.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None
Item 3. Defaults Upon Senior Securities. None.
Item 4. (Removed and reserved)
Item 5. Other Information. None.
Item 6. Exhibits
Exhibit 31 - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32 - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: August 18, 2010
TRI-MARK MFG, INC.
By: /s/Barry Sytner
- ---------------------------
Barry Sytner, Chief Executive Officer
By: /s/Betty Soumekh
- ---------------------------
Betty Soumekh, Chief Financial Officer