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EX-32.1 - HPIL HOLDINGexhibit321-quarterlyreport00.htm
EX-32.2 - HPIL HOLDINGexhibit322-quarterlyreport00.htm
EX-31.2 - HPIL HOLDINGexhibit312-quarterlyreport00.htm
EX-31.1 - HPIL HOLDINGexhibit311-quarterlyreport00.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2011

 

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to ______________

 

Commission File Number: 333-121787

 

TRIM HOLDING GROUP

 (Exact name of registrant as specified in its charter)

 

Nevada

 

20-0937461

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

300 Center Ave. Ste. 202 Bay City, MI 48708


(Address of principal executive offices)

 

(989) 509-5954


(Registrant’s telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ¨

 

Indicated by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ¨ No ¨

 

Check whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer                    ¨

 

Accelerated Filer                    ¨

 

 

 

Non-accelerated Filer                       ¨

 

Smaller Reporting Company x

 

Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨    No  x

 

As of May 23, 2011, there were 2,255,000 shares of common stock, par value $0.0001, issued and outstanding.

 

                                                                       


 

 

TRIM HOLDING GROUP

FORM 10-Q

INDEX

 

 

 

 

 

  

Page

PART I – FINANCIAL INFORMATION

  

 

 

 

Item 1 Financial Statements

  

3

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

3

Item 3 Quantitative and Qualitative Disclosures About Market Risk

  

4

Item 4 Controls and Procedures

  

4

 

 

PART II – OTHER INFORMATION

  

 

 

 

Item 1 Legal Proceedings

  

5

Item 1A Risk Factors

  

5

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

  

5

Item 3 Defaults Upon Senior Securities

  

6

Item 4 Removed and Reserved

  

6

Item 5 Other Information

  

6

Item 6 Exhibits

  

6

SIGNATURES

  

7

 

 

 

 

 

 

2


 

 

PART I---FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

3


 

 

 

TRIM HOLDING GROUP

 

 

 

(formerly TNT Designs, Inc.)

 

 

 

(A Development Stage Company)

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

AS OF MARCH 31, 2011 AND DECEMBER 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

 

 

 

 

 

 

2011

 

2010

 

 

 

ASSETS

 

 

 

Current Assets:

 

 

 

 

 

Cash

$

               3,669

 $

               5,736

 

 

 

 

Prepaid expense

 

             16,106

 

             16,106

 

 

 

Total Current Assets

 

             19,775

  

             21,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

             19,775

 $

             21,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

  

 

 

 

 

Accounts payable

$

             67,083

 $

             60,919

 

 

 

 

Advances from stockholder

 

            353,039

 

            338,039

 

 

 

 

Notes payable

 

               2,344

 

               8,578

 

 

 

Total Current Liabilities

 

            422,466

 

            407,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

Preferred stock, series 1, class P-1 par value $8.75;

 

 

 

 

 

 

 

 

 

25,000,000 shares authorized; 22,000 issued and

 

 

 

 

 

 

 

 

 

outstanding on December 31, 2010, 2010 and December 31, 2009

            192,500

 

            192,500

 

 

 

 

Preferred stock, series 2, class P-2 par value $7.00;

 

 

 

 

 

 

 

 

 

75,000,000 shares authorized; Nil issued and

 

 

 

 

 

 

 

 

 

outstanding on December 31, 2010 and December 31, 2009,

 

 

 

 

 

 

 

 

 

net of discount

 

                    -  

 

                    -  

 

 

 

 

Common stock par value $0.0001; 400,000,000 shares

 

 

 

  

 

 

 

 

 

authorized; 2,260,000 and 2,262,500 issued and outstanding on

 

 

 

 

 

 

 

 

 

December 31, 2010 and December 31, 2009, respectively

 

                  226

 

                  226

 

 

 

 

Additional paid-in capital

 

            139,182

 

            139,182

 

 

 

 

Deficit accumulated during the development stage

 

          (734,599)

 

          (717,602)

 

 

 

Total Stockholders' (Deficit) Equity

 

          (402,691)

 

          (385,694)

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders'  (Deficit) Equity

$

             19,775

 $

             21,842

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

4


 

 

 

TRIM HOLDING GROUP

 

(formerly TNT Designs, Inc.)

 

(A Development Stage Company)

 

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

For the Period

 

 

 

 

 

 

 

 

 

From Inception

 

 

 

 

 

 

For the Three

 

For the Three

 

(February 17,

 

 

 

 

 

 

Months Ended

 

Months Ended

 

2004) to

 

 

 

 

 

 

March 31,

 

March 31,

 

March 31,

 

 

 

 

 

 

2011

 

2010

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

Sales

$

                   -

$

                   -

$

             42,021

 

 

Cost of Goods Sold

 

                   -

 

                   -

 

             36,419

 

 

Gross Profit

 

                   -

 

                   -

 

               5,602

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

General and administrative

 

          16,997

 

        371,146

 

           556,558

 

 

Total Operating Expenses

 

          16,997

 

        371,146

 

           556,558

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations

 

         (16,997)

 

       (371,146)

 

          (550,956)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Discontinued Operations

 

                   -

 

                   -

 

          (183,718)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

$

         (16,997)

$

       (371,146)

$

          (734,674)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per Weighted Number of Shares

 

 

 

 

 

 

 

 

Outstanding - Basic and Diluted

$

            (0.01)

$

            (0.16)

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares

 

 

 

 

 

 

 

 

Outstanding - Basic and Diluted

 

2,260,000

 

2,265,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

5


 

 

 

TRIM HOLDING GROUP

 

 

(formerly TNT Designs, Inc.)

 

 

(A Development Stage Company)

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Period

 

 

 

 

 

 

 

 

 

 

 

 

 

From Inception

 

 

 

 

 

 

 

 

 

For the Three

 

For the Three

 

(February 17,

 

 

 

 

 

 

 

 

 

Months Ended

 

Months Ended

 

2004) to

 

 

 

 

 

 

 

 

 

March 31,

 

March 31,

 

March 31,

 

 

 

 

 

 

 

 

 

2011

 

2010

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net loss

 

$

              (16,997)

 $

         (371,146)

 $

               (734,674)

 

 

 

Adjustment for non-cash item:

 

 

 

 

 

 

 

 

 

 

Common stock issued for services

 

                        -

 

                         -

 

                  10,000

 

 

 

Adjustments for changes in working capital:

 

 

 

 

 

 

 

 

 

 

Prepaid expenses

 

                        -

 

                  1,000

 

                 (16,106)

 

 

 

 

Accounts payable and accrued expenses

 

                 6,164

 

             (22,130)

 

                  67,083

 

 

CASH USED IN OPERATING ACTIVITIES

 

              (10,833)

 

           (392,276)

 

               (673,697)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

                        -

 

                        -

 

                  19,450

 

 

 

Advances from stockholder

 

               15,000

 

                65,625

 

                353,039

 

 

 

Advances from officers forgiven

 

                        -

 

                         -

 

                109,958

 

 

 

Stock issued in settlement of debt

 

                        -

 

                         -

 

                192,500

 

 

 

Deferred stock offering expenses

 

                        -

 

                         -

 

                           -

 

 

 

Proceeds from issuance of stock for patents

 

                        -

 

              306,312

 

                           -

 

 

 

Proceeds from notes payable

 

                (6,234)

 

                         -

 

                    2,344

 

 

CASH PROVIDED BY FINANCING ACTIVITIES

 

                 8,766

  

              371,937

  

                677,366

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH

 

                (2,067)

  

             (20,339)

  

                    3,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH - BEGINNING OF YEAR

 

                 5,736

 

                29,289

 

                           -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH - END OF YEAR

$

                 3,669

 $

                  8,950

 $

                    3,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

6


 

 

TRIM HOLDING GROUP

(formerly TNT Designs, Inc.)

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010

 

NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

 

Nature of Operations

 

Trim Holding Group (formerly TNT Designs, Inc.) (“Trim”) was incorporated on February 17, 2004 in the state of Delaware.  A substantial part of the Company’s activities were involved in developing a business plan to market and distribute scarves, handbags and other products.

 

On June 16, 2009, the majority interest in Trim was purchased in a private agreement by Louis Bertoli, an individual, with the objective to acquire and/or merge with other businesses.

 

On October 7, 2009, Trim merged with and into Trim Nevada, Inc., which became the surviving corporation.  The merger did not result in any change in the Company’s management, assets, liabilities, net worth or location of principal executive offices.  However, this merger changed the legal domicile from Delaware to Nevada where Trim Nevada, Inc. was incorporated.  Each outstanding share of TNT Designs, Inc. were automatically converted into one share of the common stock of Trim Nevada, Inc.

 

Pursuant to the merger, Trim changed its name from TNT Designs, Inc. to Trim Holding Group and announced the change in Trim’s business focus to health care and environmental quality sectors.

 

Trim’s wholly-owned subsidiaries Trim Investments Corp (“Investments”) and Trim Trade Corp (“Trade”) and 95% owned subsidiary Trim Inventions Corp (“Inventions”) were formed on December 14, 2009. Investments will hold the various investment activities that Trim plans to become involved with.  Trade will be the corporation that Trim’s goods are sold through. Inventions will hold the patents and other inventions that Trim will acquire for production.

 

In December 2010, the Company re-evaluated its plans and decided to terminate its arrangements with Allkey Limited by cancelling the patent and funding agreements.  In addition the Company determined it no longer needed its subsidiaries, and as such, all three subsidiaries were dissolved.

 

At March 31, 2011, the Company had not yet commenced operations.  Expenses incurred from February 17, 2004 (date of inception) through March 31, 2011 relate to the Company’s formation and general administrative activities.

 

Basis of Presentation

 

The accompanying consolidated financial statements (“Financial Statements”) have been prepared by management in accordance with U.S. generally accepted accounting principles (“GAAP”).

 

NOTE 2 – GOING CONCERN

 

Certain principal conditions and events are prevalent which indicate that there could be substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. These include:

 

1)            Recurring operating losses

2)            Stockholders’ deficiency

3)            Working capital deficiency

4)            Adverse key financial ratios

 

The continuation of the Company as a going concern is dependent upon its ability to raise additional financing and ultimately attain and maintain profitable operations from commercialization of its intellectual property.

 

 

7


 

 

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

Development Stage Company

 

The Company is a development stage company. The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not yet commenced, but are planned to commence in the next twelve months. All losses accumulated, since inception, have been considered as part of the Company’s development stage activities.

 

Use of Estimates

 

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from these estimates.

 

Impairment of Long-lived Assets

 

Long-lived assets are evaluated for impairment when events occur or circumstances indicate that the remaining estimated useful lives may warrant revision or that the remaining balances may not be recoverable. When this occurs, an estimate of undiscounted cash flows is used to determine if the remaining balances are recoverable.

 

Income Taxes

 

The Company accounts for income taxes under the asset and liability method, where deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

 

At March 31, 2011, there were no uncertain tax positions that required accrual.

 

Net Loss per Share

 

Basic loss per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period.  Diluted loss per share is computed by dividing net income, or loss, by the weighted average number of shares of common stock outstanding for the period and the number of shares of common stock issuable upon assumed exercise of preferred stock and warrants.

 

For the three months ended March 31, 2011 there were no outstanding instruments having a dilutive effect.

 

Recently Issued Accounting Pronouncements

 

Management has reviewed recently issued accounting pronouncements and determined that none of the recent pronouncements affect the Company.

 

NOTE 4 – INTANGIBLE ASSETS OF DISCONTINUED OPERATIONS

 

On December 31, 2009, the Company entered into a patent agreement with Allkey, Ltd. to obtain the full and exclusive right, title and interest in patents for a personal massaging device. Affiliates of Chief Executive Officer, majority shareholder and director, Louis Bertoli, own a minority interest of Allkey, Ltd. The patents purchased are for the United States, Canada and Mexico. In consideration for such patent rights, the Company issued 3,750,000 shares of Series 2 Class P-2 preferred stock (each $7.00 par value) of the Company. Additionally, the Company acquired the option to acquire the exclusive patent rights in 46 other countries.

 

8


 

 

 

The Company has the right to repurchase some or all of the shares for $7.00 per share ($26,250,000 for all the Series 2 Class P-2 preferred shares) on or before December 31, 2012. If the Company chooses not to repurchase the shares by such date, Allkey, Ltd. has the right to sell the shares to a third-party, subject to the Company’s right of first refusal. If the proceeds from such third-party sale are less than $26,250,000, then the Company is obligated to pay the difference to Allkey, Ltd.

 

The patent rights and preferred stock issued were recorded at their estimated fair value as determined using the “relief from royalty” valuation model that takes into account, among other items, projected future revenue of products covered by the patent rights, an assumed royalty rate that the Company would pay if it had licensed the technology covered by the patents, and an appropriate discount rate based on the Company’s estimated cost of capital. The initial fair value of the patent rights was determined to be $12,252,500 at December 31, 2009. As a result, the Series 2, Class P-2 Preferred stock has been recorded net of a discount of $13,997,500 to its par value of $7.00 per share as of September 30, 2010 and December 31, 2009.  Series 2, Class P-2 Preferred stock would be converted to common stock in the ratio of 1:1.

 

In December 2010, the Company terminated its relationship with Allkey Limited, therefore terminating its patent rights.  The patents were removed from the books along with the deprecation.

 

NOTE 5 – NOTE PAYABLE

 

During the year ended December 31, 2010 the Company entered into an agreement with a financing company to finance the cost of D&O executive and organization liability insurance premium. The insurance policy is effective until July 30, 2011 and the unexpended portion of the premium was $8,578 as of December 31, 2010 which is included in prepaid expenses as of that date.

 

Payments under the financing agreement are due in monthly installments of $2,344 including interest at 9.33% through April 30, 2011. The balance payable under the financing agreement was $2,344 and $9,376 at March 31, 2011 and December 31, 2010, respectively.

 

NOTE 6 – CAPITAL STOCK

 

On October 7, 2009, the Company approved increasing the number of authorized shares of common stock from 30,000,000 to 400,000,000 with no change in par value of $0.0001 per share.

 

On October 7, 2009, the Company approved the designation of two classes of preferred stock totaling 100,000,000 shares.  The first class is called Series 1, Class P-1 consisting of 25,000,000 authorized shares with a par value of $8.75 per share; each share will have voting rights equal to 100 shares of common stock; each share will be convertible into 1.25 shares of common stock at the discretion of the shareholder. The second class is called Series 2, Class P-2 consisting of 75,000,000 authorized shares with a par value of $7.00 per share; each share will have the voting rights equal to 1 share of common stock; each share will be convertible into one share of common stock at shareholder's discretion.

 

On December 4, 2009, we issued 22,000 shares of Series 1, Class P-1 preferred stock to Mr. Louis Bertoli in consideration for satisfaction of an outstanding debt incurred from a cash loan of $192,500 provided to the Company by Mr. Bertoli.

 

On December 31, 2009, the Company entered into a patent agreement with Allkey, Ltd. to obtain the patents for a personal massaging device. In consideration for such patent rights, the Company contracted to pay $26,500,000 to Allkey, Ltd., payable by issuing and delivering to them 3,750,000 Series 2, Class P-2 preferred shares (each $7.00 par value) of the Company.

 

The Company has the right to repurchase some or all of the shares for $26,250,000 on or before December 31, 2012. If the Company chooses not to repurchase all of the shares by such date, Allkey, Ltd. has the right to sell the shares to a third-party (subject to the Company's right of first refusal).  If the proceeds from such third-party sale are less than $26,250,000, then the Company is obligated to pay the difference to Allkey, Ltd.

 

9


 

 

 

On May 27, 2010, the Board approved cancellation of 2,500 common shares, which were returned to the Company’s transfer agent.

 

On August 6, 2010, the Company entered into a purchase agreement with Allkey Ltd, where Allkey would purchase 6,000,000 shares of the Company’s common stock with 1.5 warrants attached to each share.  The warrants issued with the common stock can be converted into 9,000,000 share of Common Stock if all warrants are exercised. Allkey is obligated to pay $7.00 per share for a total price of $42,000,000 payable in 7 tranches, the first one being due 30 days from the date of the SEC approval of the Company’s registration statement, S-1 originally filed August 25, 2010. As a result of this stock issuance the controlling interest in the company changed, with Allkey owning 73% of all issued and outstanding shares.

 

On October 13, 2010, we filed an amendment to the registration statement with the SEC, which updates the purchase price of the 6,000,000 shares and 9,000,000 warrants from $7.00 to $10.20 per share.

 

On December 7, 2010, we entered into a rescission agreement with Allkey whereby the parties agreed to mutually rescind the patent and purchase agreements. As a result of the rescission agreement, the 3,750,000 Series 2, Class P-2 preferred shares and 6,000,000 common shares that were issued to Allkey were returned to the Company’s transfer agent, and the 9,000,000 warrants were cancelled.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

The current majority shareholder loaned the Company $338,039 during the year ended December 31, 2010 to be used for working capital. These advances are unsecured, non-interest bearing and due on demand.

 

In 2009, the Company issued 22,000 shares of Series 1, Class P-1 preferred stock (par value $8.75 per share) to Louis Bertoli (director and officer of the Company) in settlement of amounts owed to Mr. Bertoli totaling $192,500.  Series 1, Class P-1 preferred stock can be converted to common stock in the ratio of 1.25:1.

 

On July 20, 2009, the Company entered into a two-year consulting agreement with Amersey Investment Holding LLC, a company controlled by a director (“Amersey”).  Amersey will provide office space, office identity and assist the Company with corporate, financial, administrative and management records.  For the three months ended March 31, 2011 and the year ended December 31, 2010, the Company incurred expenses of $15,000 and $60,000, respectively, in relation to these services.

 

The Company uses Bay City Transfer Agency & Registrar Inc. (“BCTAR”) to do its stock transfers. BCTAR is a company controlled by a director.  For the three months ended March 31, 2011 and the year ended December 31, 2010, the Company incurred expenses of $2,250 and $11,190, respectively, in relation to these services.

 

A patent was purchased December 31, 2009 from a related party, as described in detail in Note 5, and terminated in December 2010.

 

NOTE 8 – SUBSEQUENT EVENTS

 

Events that have occurred subsequent March 31, 2011 have been evaluated through the date of this audit report. There have been no subsequent events that occurred during such period that would require disclosure in these consolidated financial statements or would be required to be recognized in the consolidated financial statements as of or for the three months ended March 31, 2011.

 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operation.

Forward Looking Statements

                Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These forward-looking statements generally are identified by the words “believes”, “project”, “expects”, “anticipates”, “estimates”, “intends”, “strategy”, “plan”, “may”, “will”, “would”, “will be”, “will continue”, “will likely result”, and similar expressions.  We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements.  Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.  Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles.  These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.  Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

 

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Overview

(a)

Business Background.

 

Trim Holding Group (“we”, “us”, “our”, and the “Company”) is a development stage company originally incorporated on February 17, 2004 in the state of Delaware under the name TNT Designs, Inc. (“TNT”). At the time of our inception, we were engaged in the business of marketing and distributing scarves, handbags and other products from India.  On October 7, 2009, we merged with and into Trim Nevada, Inc., a Nevada corporation, for the purpose of changing our domicile from Delaware to Nevada. As part of the merger, we changed our name to Trim Holding Group.   Following the merger, we also changed our business and we now intend to engage in designing, marketing, and selling products in the Health Care and Environmental Quality sectors.

 

(b)

Recent Transactions.

 

On December 31, 2009, we entered into a patents assignment agreement (the “Patent Agreement”) with Allkey, Ltd., a United Kingdom registered entity (“Allkey”) whereby we obtained the full and exclusive right, title, and interest in patents for a personal massaging device in consideration for the payment of USD $26,250,000 to Allkey payable by issuing and delivering to them 3,750,000 Series 2, Class P-2 preferred shares.  The patents purchased were for the United States, Canada, and Mexico.  Additionally, we acquired the option to acquire the exclusive patent rights in 46 other countries.

 

                On August 6, 2010, we entered into a purchase agreement ( the “Purchase Agreement”) with Allkey, together with a registration rights agreement (the “Registration Rights Agreement”), whereby within ten (10) days of the execution date of the Purchase Agreement, we agreed to sell to Allkey and Allkey agreed to purchase from us, at the price of US $7.00 per share, Six Million (6,000,000) shares of common stock (the “Shares”) and Nine Million (9,000,000) warrants (the “Warrants”) with each Warrant entitling Allkey the option to purchase one (1) share of our common stock at an exercise price of US $7.00 per share.  Under the terms of the Purchase Agreement, the Warrants were to expire two years from the date of issuance, and the total purchase price for the Shares and Warrants would be Forty Two Million and No/100 dollars (US $42,000,000.00), payable in periodic tranches as directed by the Company over the course of a maximum seven month period.

 

                On August 25, 2010, we filed a registration statement on Form S-1 (the “Registration Statement”) with the Securities and Exchange Commission (“SEC”).  On October 13, 2010, we filed Pre-Effective Amendment No. 1 to the Registration Statement (“Amendment No. 1”) with the SEC.  Amendment No. 1 covers the resale by Allkey of up to 6,000,000 shares of our common stock at a fixed price of $10.20 per share for a period not to exceed 180 days from the effective date of the registration statement.  However, on November 24, 2010, we filed a Form RW with the SEC to withdraw the Registration Statement as amended by Amendment No. 1 as we believe that withdrawal of the Registration Statement is consistent with the public interest and the protection of investors.

 

 

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                On December 7, 2010, we entered into a rescission agreement (the “Rescission Agreement”) with Allkey whereby the Parties agreed to mutually rescind the Purchase Agreement and Registration Rights Agreement.  As a result of the Rescission Agreement, the Six Million (6,000,000) shares that were issued to Allkey were returned to the Company’s transfer agent, and the Nine Million (9,000,000) warrants that were issued to Allkey were cancelled.

 

                On December 9, 2010, we entered into a Redemption and Assignment Agreement (the “Assignment Agreement”) with Allkey whereby the parties agreed to terminate the Patent Agreement, as well as the options granted therein to acquire patent rights in certain other countries.  As a result of the termination of the Patent Agreement, the three million seven hundred fifty thousand (3,750,000) Series 2, Class P-2 preferred shares that were issued to Allkey in consideration for the assignment of the patent rights were redeemed by the Company, and the patent rights acquired by the Company under the Patent Agreement were assigned back to Allkey.

 

(c)

Business of Issuer.

Following the execution and consummation of the transactions contemplated by the Rescission Agreement and Assignment Agreement, we are now focused on acquiring new products and businesses in the Health Care and Environmental Quality sectors; however, as we are presently in the process of identifying products and sub markets, our business plan is subject to change.  We have not identified manufacturing processes, sales and distribution strategies, personnel needs or any related costs.  

Liquidity and Capital Resources

 

We are a development stage company focused on developing our business in the Health Care and Environmental Quality sectors.  Our principal business objective for the next twelve (12) months will be to continue to develop our business plan in these sectors. As we have not commenced material operations, we have not earned any revenues. 

As of May 23, 2011, we had cash on hand of $1,910.63 and current liabilities of $468,315.39.  We do not have sufficient capital to operate our business and will require additional funding to sustain operations through December 2011.  There is no assurance that we will be able to achieve revenues sufficient to become profitable.

We have incurred losses since inception and our ability to continue as a going‑concern depends upon our ability to develop profitable operations and to continue to raise adequate financing.  We are actively targeting sources of additional financing to provide continuation of our operations. In order for us to meet our liabilities as they come due and to continue our operations, we are solely dependent upon our ability to generate such financing.

                There can be no assurance that the Company will be able to continue to raise funds, in which case we may be unable to meet our obligations and we may cease operations.

 

Results of Operations

 

As we are a development stage company, we are not yet operational; therefore, we do not have any operations to report at this time. Our focus has been on the development of our business plan. All expenses to date have related to the development of our business plan and other expenses related to the daily operations of a public company.

 

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.

 

Inflation

 

We do not believe that inflation has had in the past or will have in the future any significant negative impact on our operations.

 

 

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

                As we are a smaller reporting company, we are not required to provide the information required by this item.

 

Item 4.  Controls and Procedures.

 

(a) 

Evaluation of disclosure controls and procedures.

 

We maintain disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) that are designed to assure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. As required by Exchange Act Rule 13a-15(b), as of the end of the period covered by this report, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures and concluded that our disclosure controls and procedures are ineffective as of the date of filing this Form 10-Q due to limited accounting and reporting personnel and a lack of segregation of duties due to limited financial resources and the size of our company.  We will need to adopt additional disclosure controls and procedures prior to commencement of material operations. Consistent therewith, on an on-going basis we will evaluate the adequacy of our controls and procedures.

 

(b) 

Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting during the last fiscal quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

 

PART II---OTHER INFORMATION

 

Item 1.  Legal Proceedings.

 

                There are no legal proceedings that have occurred within the past five years concerning our directors or control persons which involved a criminal conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities or banking industries, or a finding of securities or commodities law violations.

 

Item 1A.  Risk Factors.

 

                As we are a smaller reporting company, we are not required to provide the information required by this item.

 

 

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

 

(a)           Unregistered Sales of Equity Securities.

 

None.

 

(b)           Use of Proceeds.

 

                Not Applicable.

 

(c)           Affiliated Purchases of Common Stock.

 

 

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                None.    

 

Item 3.  Defaults Upon Senior Securities.

 

                None.

 

 

Item 4.  (Removed and Reserved).

 

 

Item 5.  Other Information.

 

                None.

 

Item 6. Exhibits.

                                               

 

INDEX TO EXHIBITS

 

 

Exhibit

 

Description

 

 

 

*3.1

 

Articles of Incorporation

 

 

 

*3.2

 

By-laws

 

 

 

*10.1

 

Patents Assignment Agreement, by and between Trim Holding Group and Allkey, Ltd., entered into on December 31, 2009

 

 

 

*10.2

 

Purchase Agreement, by and between Trim Holding Group and Allkey, Ltd., entered into on August 6, 2010

 

 

 

*10.3

 

Registration Rights Agreement, by and between Trim Holding Group and Allkey, Ltd., entered into on August 6, 2010

 

 

 

*10.4

 

Rescission Agreement, by and between Trim Holding Group and Allkey, Ltd., entered into on December 7, 2010

 

 

 

 

*10.5

 

Redemption and Assignment Agreement, by and between Trim Holding Group and Allkey, Ltd., entered into on December 9, 2010

 

 

 

31.1

 

Certification of our Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

 

 

 

31.2

 

Certification of our Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

 

 

 

32.1

 

Certification of our Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 

 

 

32.2

 

Certification of our Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002

 

*

Included in previously filed reporting documents.

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Trim Holding Group

 

 

 

Dated: May 23, 2011

By:

/s/  Louis Bertoli

 

 

Louis Bertoli

 

 

President, Chief Executive Officer

Chief Financial Officer

Chairman of the Board of Directors

 

 

 

 

 

 

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