trist10ksb123107.htm
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, DC
20549
FORM 10-KSB
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(MARK
ONE)
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x
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended December 31, 2007
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OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from ______________ to
______________
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Commission
file number: 000-52315
TRIST HOLDINGS,
INC
(Name of
small business issuer in its charter)
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Delaware
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20-1915083
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(State
of incorporation)
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(IRS
Employer Identification No.)
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7030 Hayvenhurst
Avenue, Van
Nuys, CA
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91406
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(Address
of principal executive offices)
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(Zip
Code)
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(818)
464-1614
(Registrant's
telephone number, including area code)
Landbank Group,
Inc.
(Former
name, former address and former fiscal year, if changed since last
report)
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
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Title
of each class
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Name
of each exchange on which registered
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Common
Stock, $0.0001 Par Value
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None
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Check
whether the issuer is not required to file a report pursuant to Section 13 or
15(d) of the Exchange Act: o
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes
x No o
Check
if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained,
to the best of issuer's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to the Form 10-KSB: x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes x No
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State
issuer's revenue for its most recent fiscal year: zero
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the issuer, based upon the last available reported closing
price of the issuer’s common stock by a broker-dealer on the Gray Market was
approximately $28,613 (affiliates being defined, for these purposes only, as
directors and executive officers of the issuer and holders of 5% or more of the
issuer’s outstanding common stock).
State
the number of shares outstanding of each of issuer's classes of common equity,
as of March 10, 2008: 89,239,920
Transitional
Small Business Disclosure Format (Check one): Yes o No x
DOCUMENTS
INCORPORATED BY REFERENCE
None.
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PAGE
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PART
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PART
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PART
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FORWARD-LOOKING
STATEMENTS
This report includes forward-looking
statements with-in the meaning of Section 27A of the Securities Act (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). We have based these statements on our beliefs
and assumptions, based on information currently available to us. These
forward-looking statements are subject to risks and uncertainties.
Forward-looking statements include the information concerning our possible or
assumed future results of operations, our total market opportunity and our
business plans and objectives set forth under the sections entitled "Business"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
Forward-looking statements are not
guarantees of performance. Our future results and requirements may differ
materially from those described in the forward-looking statements. Many of the
factors that will determine these results and requirements are beyond our
control. In addition to the risks and uncertainties discussed in "Business" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," investors should consider those discussed under "Risk Factors" and,
among others, the following:
Since the transfer of substantially all
of our assets, we are a non-operating company and are seeking a suitable
transaction with a private company; however we may not find a suitable candidate
or transaction. If we are unable to consummate a suitable transaction
we will be forced to liquidate and dissolve, which will take three years to
complete and may result in our distributing less cash to our
shareholders. Additionally, we will be spending cash during the
winding down of the Company and may not have enough cash to distribute to our
shareholders.
These forward-looking statements speak
only as of the date of this report. We do not intend to update or revise any
forward-looking statements to reflect changes in our business anticipated
results of our operations, strategy or planned capital expenditures, or to
reflect the occurrence of unanticipated events.
PART
I
Business
Overview
Trist
Holdings, Inc., ("Trist," "Company," “Landbank Group, Inc.,” “we,” “us,” or
“our”) was incorporated in the State of Delaware as Camryn Information Services,
Inc., on May 13, 1997. The Company operated for a brief period of time before it
ceased operations on February 25, 1999 when it forfeited its charter for failure
to designate a registered agent. The Company remained dormant until 2004 when it
renewed its operations with the filing of a Certificate of Renewal and Revival
of Charter with the State of Delaware on October 29, 2004. On November 3, 2004,
the Company filed a Certificate of Amendment and the Company's name was formally
changed from Camryn Information Services, Inc. to iStorage Networks, Inc. Such
change became effective on November 8, 2004. The Company subsequently changed
its name to Landbank Group, Inc., on January 27, 2006, following the acquisition
of Landbank, LLC, a California limited liability company (“LLC”). The
Company previously engaged in business through LLC which made bulk acquisitions
of parcels of land, primarily through the real property tax lien foreclosure
process. The bulk acquisitions were then divided into smaller parcels for
resale.
On
December 31, 2007, the Company transferred all of its respective rights in and
to LLC and its business and changed its name to Trist Holdings, Inc. (see
below). As a result of such transfer, we are a non-operating public
company and our operating results through December 31, 2007 are not meaningful
to our future results. The Company is seeking out suitable candidates for a
business combination with a private company.
Background
of the Transfer of Landbank LLC
Acquisition of Landbank, LLC
and Divestiture of Prior Operations
On
January 26, 2006, the Company acquired 100% of the membership interests in LLC,
in exchange for shares of common stock of the Company. The exchange of shares
for membership interests was treated as a reverse acquisition under the purchase
method of accounting. The shares delivered in connection with the acquisition
were transferred by the four former principal stockholders of the Company to the
members of LLC in exchange for the Company receiving all of the ownership
interests in LLC and $140,000 in cash. Concurrently with the acquisition of LLC,
the Company divested itself of its wholly owned operating subsidiary, iStorage
Networks Group, Inc. ("iSNG"). The $140,000 in cash accompanied the divestiture
of iSNG. The former members of LLC acquired approximately a 90% ownership
interest in the Company. LLC was formed in December 2004 but did not commence
operations until the second quarter of 2005. With the divestiture of iSNG and
the acquisition of LLC, the Company operated exclusively in the real estate
marketplace. The Company no longer operates its former iStorage or LLC
businesses.
From
January 2006 to December 31, 2007, the Company's sole operations consisted of
the operations of LLC. We made bulk acquisitions of parcels of land,
primarily through the real property tax lien foreclosure process. Such bulk
acquisitions were divided into smaller parcels for resale (together with the
prior sentence, the “Business”). We considered various criteria in
terms of its land acquisitions, which included but were not limited to,
location, availability of utilities, proximity to water, geographic
desirability, and proximity of significant population centers.
From May
to June 2007, our officers and directors met on several occasions and maintained
ongoing and lengthy discussions with our legal and financial advisors, including
our outside corporate counsel, regarding all potential strategic alternatives
that may be available to us, including potential transactions with our majority
stockholders, their affiliates or other third parties, including the potential
merger or acquisition of us by those holders, affiliates or third parties,
and/or their ability or interest to provide additional capital to or invest in
our company, and alliances with entities willing to manage our assets, none of
which provided a viable alternative at that time because these parties: did not
present us with any proposal for a potential transaction; subsequently retracted
their interest in us; and/or demonstrated poor historical financial performance,
or otherwise lacked established business operations or successful business
strategies, and therefore did not demonstrate to the satisfaction of the board
and officers their ability to obtain the necessary financing to complete a
transaction or to manage our assets in a manner that would increase revenues or
stockholder value in general.
In light
of our continuing operating losses and outstanding debt, our Board of Directors,
together with management, concluded that it had become necessary to redirect our
company to address a changing competitive landscape. Therefore, after
extensive discussion, the Board of Directors directed senior management to
analyze and review potential strategic transactions to raise capital, form
strategic partnerships and/or identify mutual alliances in order to preserve our
viability and to enhance stockholder value.
From June
through October 2007, the Board of Directors and officers of the Company held
informal meetings to discuss the possibility of transferring the LLC to a new
company to be formed by Messrs. Doug Gravink and Gary Hewitt, who together held
a majority of the Company’s outstanding common stock and, through their
affiliates, were the holders of a significant portion of the Company’s
debt. At the meetings, the Board of Directors and officers considered
a number of relevant financial and operational issues, including, among
others:
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a
review of our results of operations and financial condition, including our
recent operating losses;
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our
lack of any other viable financing or strategic
transactions;
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our
declining cash balances;
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the
Board of Directors’ determination of the value of the LLC and its
Business;
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the
Company and LLC’s outstanding obligations;
and
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the
general economic downturn.
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As a
result of these considerations, the Board of Directors determined that a
transaction with Messrs. Hewitt and Gravink presented the best opportunity for
us and was in the best interests of us and our
stockholders. Therefore, the Board of Directors directed senior
management to finalize the transactions.
In
anticipation of a proposed transaction, the Company undertook several management
and director changes. On June 18, 2007, Stephen Weber resigned as a
director of the Company. Mr. Weber beneficially owns 200,000 shares
of the Company’s common stock, held of record by Investment Capital Researchers,
Inc. (“ICR”).
On June
22, 2007, John Beck also resigned as a director of the Company. Mr.
Beck owns 2,733,334 shares of the Company’s common stock, held as joint tenants
with his wife. Additionally, Mr. Beck is a creditor of the LLC, which
has outstanding debts due and payable to Mr. Beck. The Company has no
outstanding debt owed to Mr. Beck.
On July
27, 2007, Gary Freeman and Lee Mendelson were both appointed as directors of the
Company, while Doug Gravink (“Gravink”) and Gary Hewitt (“Hewitt”) each resigned
as directors of the Company.
On August
10, 2007, we entered into option termination agreements with each holder of
options to purchase common stock of the Company, including Gravink, Hewitt, John
Genesi, the formerChief Financial Officer of the Company, and Ray Gaytan, a
director of the Company. Pursuant to the option termination agreements, all
outstanding option grants were terminated. At the time of
termination, no portion of any option grant had vested or been
exercised.
On
September 20, 2007, Investor entered into a Contribution Agreement (the
“Contribution Agreement”) with its members, including Gravink and Hewitt and
certain of their affiliated entities. Pursuant to the Contribution
Agreement, Gravink and Hewitt each contributed 2,733,334 shares of the Company’s
common stock (together, the “Contributed Shares”) to Investor in exchange for
membership interests in Investor. Following the closing, Investor
held a total of 5,466,668 shares of Company common stock directly, or
approximately 55.1% of our issued and outstanding shares. Gravink and
Hewitt each hold a 50% beneficial ownership interest in Investor through both
direct and indirect ownership via their affiliates. Gravink served as
our Chief Executive Officer and Hewitt served as our President and Secretary
until they each resigned on September 24, 2007.
Additionally,
as part of the Contribution Agreement certain of Messrs. Gravink and Hewitt’s
affiliates contributed promissory notes in the aggregate principal amount of
$3,032,657.47 to Investor (the “Notes”). Such promissory notes were
issued by LLC, accrue interest at a rate of 8% per annum and are payable on
demand of the holder. Investor has not engaged in any line of
business other than to hold the Contributed Shares and the Notes and had no
other assets or liabilities other than its obligations pursuant to the
Securities Exchange Agreement executed on October 31, 2007 and the expenses
incurred in connection with each of the Contribution Agreement and the
Securities Exchange Agreement.
On
September 24, 2007, we appointed Eric Stoppenhagen as our Interim President and
Secretary. On September 27, 2007 we entered into a Consulting,
Confidentiality and Proprietary Rights Agreement with Venor, Inc. (“Venor”), a
company owned by Mr. Stoppenhagen. Under the terms of the consulting
agreement, Venor will perform certain consulting services for the Company with
respect to, among other things, the provision of executive services (including,
without limitation, the services of Mr. Eric Stoppenhagen, the Company's Interim
President and Secretary) for a period of six months.
In
September and October of 2007, our legal counsel negotiated the proposed
Securities Exchange Agreement with Investor.
In
September 2007, we retained Gemini Valuation Services LLC (“GVS”) to render an
opinion to the Board of Directors that the proposed transactions (“Proposed
Transactions”) viewed together, are fair, from a financial point of view, to the
holders of our Common Stock. The Proposed Transactions called for (1) the
Company to transfer ownership of LLC to Investor, (2) the Company to issue new
shares to Investor in an amount that will increase Investor’s current equity
holdings in Company of approximately fifty-five percent (55%) to approximately
ninety-five percent (95%), (3) Investor to provide full indemnity to Company for
LLC’s prior operations and liabilities, (4) LLC to assign $500,000 in debt to
Company owed to Investor, (5) LLC to retain approximately $500,000 in debt owed
to third parties and approximately $2.5 million in debt owed to Investor, and
(6) the Company to seek to be acquired as a public shell subsequent to the
transaction.
The Board
of Directors retained GVS based upon GVS’s experience in the valuation of
businesses and their securities in connection with recapitalizations and similar
transactions. GVS is a recognized valuation firm that is continually
engaged in providing financial advisory services in connection with mergers and
acquisitions, leveraged buyouts, business and securities valuations for a
variety of regulatory and planning purposes, recapitalizations, financial
restructurings, and private placements of debt and equity
securities.
On
October 23, 2007, GVS delivered its written opinion to the Board of Directors
advising that, subject to customary limitations, the Proposed Transactions,
viewed together, are fair, from a financial point of view, to the holders of our
Common Stock.
On
October 26, 2007, the Board of Directors held a special meeting to consider the
LLC Transfer, the Securities Exchange Agreement and the transactions
contemplated thereby. In light of the Board of Directors’ earlier
considerations, and considering our continuing losses, our expected losses in
2007 and 2008 and our current cash position, our Board of Directors determined
that it would be in our best interests and in the best interests of our
stockholders to pursue a transaction that would allow us to exit the real estate
industry at a fair valuation, and provide us with the ability to successfully
operate new businesses with significantly greater growth prospects than those we
can reasonably expect from our current operations. As such, after
further negotiations and consultation with its legal and financial advisors, the
Board of Directors approved the execution of the Securities Exchange Agreement
subject to stockholder approval.
On
October 31, 2007, we and Investor entered into the Securities Exchange Agreement
which reflects the Proposed Transactions.
The
Securities Exchange Agreement
On
December 31, 2007, the Company closed the transactions contemplated under the
Securities Exchange Agreement (the “Agreement”) dated with Landbank Acquisition
LLC (“Investor”) and Family Products LLC, a member of Investor, who is a party
to the Agreement for the limited purpose of providing indemnification to the
Company there under. At the time the Agreement was executed, and
immediately prior to the closing of the transaction contemplated therein,
Investor was the owner of 55% of the Company’s outstanding capital
stock.
Pursuant
to the Agreement, the following transactions (the “Transactions”) occurred at
the closing: (1) the Company transferred ownership of LLC to
Investor; (2) the Company issued 79,311,256 new shares of common stock to
Investor to increase Investor’s current equity holdings in Company of
approximately fifty-five percent (55%) to approximately ninety-five percent
(95%) (the “Share Issuance”); (3) Investor agreed to provide full indemnity to
Company for LLC’s prior operations and liabilities; (4) LLC
assigned $500,000 in debt to Company owed to Investor (the “Note
Assignment”); (5) LLC retained approximately$500,000 in debt owed to third
parties and approximately $2.5 million in debt owed to Investor; and (6) the
Company retained approximately$5,000 in cash for the Company’s working
capital.
In
connection with the Note Transfer, the Company entered into a note assignment
with LLC and Investor and issued a promissory note to Investor in the principal
amount of $500,000.
Investor
and the Company also entered into a Registration Rights Agreement between them
at the closing (the “Registration Rights Agreement”) pursuant to which the
Investor received certain demand and piggyback registration rights with respect
to the shares received in the Share Issuance.
The
consummation of the Transactions was subject to the receipt of customary closing
conditions, each of which occurred prior to the closing, including approval of
the LLC Transfer by the Corporation’s stockholders and the amendment of the
Company’s Certificate of Incorporation to change the name of the Company to
Trist Holdings, Inc. and to increase the number of authorized shares of Common
Stock from 100,000,000 to 2,000,000,000.
Employees
The total
number of Company employees is zero.
Risk
Factors
The
following important factors, and the important factors described elsewhere in
this report or in our other filings with the SEC, could affect (and in some
cases have affected) our results and could cause our results to be materially
different from estimates or expectations. Other risks and
uncertainties may also affect our results or operations
adversely. The following and these other risks could materially and
adversely affect our business, operations, results or financial
condition.
We
have a history of net losses and will not achieve or maintain
profitability.
We have a
history of incurring losses from operations. As of December 31, 2007, we had an
accumulated deficit of approximately $2,255,000, all of which was incurred prior
to the Transactions. We anticipate that our existing cash and cash
equivalents will not be sufficient to fund our business needs. We
will rely on funding from Investor for our cash needs. Our ability to
continue may prove more expensive than we currently anticipate and we may incur
significant additional costs and expenses in connection with seeking a suitable
transaction.
We
are a non-operating company seeking a suitable transaction and may not find a
suitable candidate or transaction.
We are a
non-operating company and are seeking a suitable transaction with a private
company; however, we may not find a suitable candidate or
transaction. If we are unable to consummate a suitable transaction we
will be forced to liquidate and dissolve which will take three years to complete
and may result in our distributing less cash to our
shareholders. Additionally, we will be spending cash during the
winding down of the Company and may not have enough cash to distribute to our
shareholders.
We
cannot assure you of the exact amount or timing of any future distribution to
our stockholders.
The
precise nature, amount and timing of any future distribution to our stockholders
will depend on and could be delayed by, among other things, the opportunities
for a private company transaction, administrative and tax filings during or
associated with our seeking a private company transaction or any subsequent
dissolution, potential claim settlements with creditors, and unexpected or
greater than expected operating costs associated with any potential private
company transaction or any subsequent liquidation. Furthermore, we cannot
provide any assurances that we will actually make any
distributions. Any amounts we actually distribute to our stockholders
may be less than the price or prices at which our common stock has recently
traded or may trade in the future.
We
will continue to incur claims, liabilities and expenses that will reduce the
amount available for distribution to stockholders.
Claims,
liabilities and expenses incurred while seeking a private company transaction or
any subsequent dissolution, such as legal, accounting and consulting fees and
miscellaneous office expenses, will reduce the amount of assets available for
future distribution to stockholders. If available cash and amounts received on
the sale of non-cash assets are not adequate to provide for our obligations,
liabilities, expenses and claims, we may not be able to distribute meaningful
cash, or any cash at all, to our stockholders.
We
will continue to incur the expenses of complying with public company reporting
requirements.
We have
an obligation to continue to comply with the applicable reporting requirements
of the Securities Exchange Act of 1934, as amended, even though compliance with
such reporting requirements is economically burdensome.
In
the event of liquidation, our Board of Directors may at any time turn management
of the liquidation over to a third party, and our directors may resign from our
board at that time.
If we are
unable to find or consummate a suitable private company transaction, our
directors may at any time turn our management over to a third party to commence
or complete the liquidation of our remaining assets and distribute the available
proceeds to our stockholders, and our directors may resign from our board at
that time. If management is turned over to a third party and our directors
resign from our board, the third party would have sole control over the
liquidation process, including the sale or distribution of any remaining
assets.
If
we are deemed to be an investment company, we may be subject to substantial
regulation that would cause us to incur additional expenses and reduce the
amount of assets available for distribution.
If we
invest our cash and/or cash equivalents in investment securities, we may be
subject to regulation under the Investment Company Act of 1940. If we are deemed
to be an investment company under the Investment Company Act because of our
investment securities holdings, we must register as an investment company under
the Investment Company Act. As a registered investment company, we would be
subject to the further regulatory oversight of the Division of Investment
Management of the Securities and Exchange Commission, and our activities would
be subject to substantial regulation under the Investment Company Act.
Compliance with these regulations would cause us to incur additional expenses,
which would reduce the amount of assets available for distribution to our
stockholders. To avoid these compliance costs, we intend to invest our cash
proceeds in money market funds and government securities, which are exempt from
the Investment Company Act but which currently provide a very modest
return.
If
we fail to create an adequate contingency reserve for payment of our expenses
and liabilities, in the event of dissolution, our stockholders could
be held liable for payment to our creditors of each such stockholder’s pro-rata
share of amounts owed to the creditors in excess of the contingency reserve, up
to the amount actually distributed to such stockholder.
In the
event of dissolution or a distribution of substantially all our assets, pursuant
to the Delaware General Corporation Law, we will continue to exist for three
years after the dissolution became effective or for such longer period as the
Delaware Court of Chancery shall direct, for the purpose of prosecuting and
defending suits against us and enabling us gradually to close our business, to
dispose of our property, to discharge our liabilities and to distribute to our
stockholders any remaining assets. Under the Delaware General Corporation Law,
in the event we fail to create an adequate contingency reserve for payment of
our expenses and liabilities during this three-year period, each stockholder
could be held liable for payment to our creditors of such stockholder’s pro-rata
share of amounts owed to creditors in excess of the contingency reserve, up to
the amount actually distributed to such stockholder.
However,
the liability of any stockholder would be limited to the amounts previously
received by such stockholder from us (and from any liquidating trust or trusts)
in the dissolution. Accordingly, in such event a stockholder could be required
to return all distributions previously made to such stockholder. In such event,
a stockholder could receive nothing from us under the plan of dissolution.
Moreover, in the event a stockholder has paid taxes on amounts previously
received, a repayment of all or a portion of such amount could result in a
stockholder incurring a net tax cost if the stockholder’s repayment of an amount
previously distributed does not cause a commensurate reduction in taxes payable.
There can be no assurance that any contingency reserve established by us will be
adequate to cover any expenses and liabilities.
Our
auditors have expressed a going concern opinion.
Primarily
as a result of our recurring losses and our lack of liquidity, the Company
received a report from our independent auditors that includes an explanatory
paragraph describing the substantial uncertainty as to our ability to continue
as a going concern for the year ended December 31, 2007.
Any
future sale of a substantial number of shares of our common stock could depress
the trading price of our common stock lower our value and make it more difficult
for us to pursue or consummate a private company transaction.
Any sale
of a substantial number of shares of our common stock (or the prospect of sales)
may have the effect of depressing the trading price of our common stock. In
addition, these sales could lower our value and make it more difficult for us to
engage in a private company transaction. Further, the timing of the sale of the
shares of our common stock may occur at a time when we would otherwise be able
to engage in a private company transaction on terms more favorable to
us.
Our
stock price is likely to be highly volatile because of several factors,
including a limited public float.
The
market price of our stock is likely to be highly volatile because there has been
a relatively thin trading market for our stock, which causes trades of small
blocks of stock to have a significant impact on our stock price. You may not be
able to resell our common stock following periods of volatility because of the
market's adverse reaction to volatility.
Other factors that could cause such
volatility may include, among other things:
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announcements
concerning our strategy,
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general
market conditions.
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Because
our common stock is considered a "penny stock" any investment in our common
stock is considered to be a high-risk investment and is subject to restrictions
on marketability.
Our
common stock is currently traded on the Over-The-Counter Bulletin Board ("OTC
Bulletin Board") and is considered a "penny stock." The OTC Bulletin Board is
generally regarded as a less efficient trading market than the NASDAQ SmallCap
Market.
The SEC
has adopted rules that regulate broker-dealer practices in connection with
transactions in "penny stocks." Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system). The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from those rules, to deliver a standardized risk disclosure document prepared by
the SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. The broker-dealer also must
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer and any salesperson in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the trading activity in the secondary market for our common
stock.
Since our
common stock is subject to the regulations applicable to penny stocks, the
market liquidity for our common stock could be adversely affected because the
regulations on penny stocks could limit the ability of broker-dealers to sell
our common stock and thus your ability to sell our common stock in the secondary
market. There is no assurance our common stock will be quoted on
NASDAQ or the NYSE or listed on any exchange, even if eligible.
We
have additional securities available for issuance, including preferred stock,
which if issued could adversely affect the rights of the holders of our common
stock.
Our
articles of incorporation authorize the issuance of 2,000,000,000 shares of
common stock. The common stock and the preferred stock can be issued
by, and the terms of the preferred stock, including dividend rights, voting
rights, liquidation preference and conversion rights can generally be determined
by, our board of directors without stockholder approval. Any issuance of
preferred stock could adversely affect the rights of the holders of common stock
by, among other things, establishing preferential dividends, liquidation rights
or voting powers. Accordingly, our stockholders will be dependent upon the
judgment of our management in connection with the future issuance and sale of
shares of our common stock and preferred stock, in the event that buyers can be
found therefore. Any future issuances of common stock or preferred stock would
further dilute the percentage ownership of our Company held by the public
stockholders.
The
Company's principal office is located in Van Nuys, California. The Company
shares this address, with its approximately 21,000 square feet of office space,
at no charge to the Company with Investor. The Company estimates that it uses
approximately 100 square feet of office space at this facility, with the
estimated monthly rent value being approximately $250, which the Company does
not deem as material.
Investments in real estate or
interests in real estate: The Company does not hold any investments in
real estate or interests in real estate. Prior to the Transactions, the Company
acquired real property for immediate resale only, and not for investment
purposes. The Company purchased the properties for cash and did not operate or
mortgage any of the properties with the sole exception of land in Pershing
County, Nevada. Acquired properties were recorded at cost and treated as
inventory until sold. Properties appeared in inventory as lots or bulk tracts
depending upon the stage of development. As of the Transactions, the Company no
longer held any real property for resale. Set forth below are the
inventories (rounded to the nearest dollar) as of December 31, 2006 and December
31, 2007:
|
Period
Ended
|
|
Inventory
|
|
Inventory
Value
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,047,541 |
|
|
|
|
|
|
1,189,722 |
|
|
|
|
|
$ |
3,237,263 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0 |
|
|
|
|
|
|
0 |
|
|
|
|
|
$ |
0 |
Investment in real estate
mortgages: The Company does not invest in real estate
mortgages.
Securities of or interests in persons
primarily engaged in real estate activities: The Company does not have
any investments in securities or interests in persons primarily engaged in real
estate activities.
None.
The
stockholders of the Company approved matters by written consent on the following
dates in the fourth quarter of 2007:
On
November 16, 2007, three stockholders who own of record 8,204,681 shares of the
Company’s common stock, representing approximately 82.64% of the outstanding
shares of the Company’s common stock, executed and delivered to us a written
consent authorizing and approving the following actions:
|
1.
|
To
approve an amendment to the Company’s Certificate of Incorporation, as
previously amended, to (i) change the name of the Company to Trist
Holdings, Inc. and (ii) increase the number of shares of authorized common
stock from 100,000,000 to 2,000,000,000.
|
|
2.
|
To
approve the Securities Exchange Agreement dated as of October 31, 2007, by
and among the Company and Landbank Acquisition LLC, pursuant to which the
Company would transfer substantially all of its assets, namely its
operating subsidiary, Landbank LLC, to Landbank Acquisition LLC, its
majority stockholder.
|
PART
II
Market
Information
The
Company’s shares are presently listed for trading with the trading symbol “TRHI”
in the “Other” Over-the-Counter or “Gray Market” wherein trades are reported by
a broker-dealer to its Self-Regulatory Organization (“SRO”) which distributes
the trade data to market data vendors and financial websites. Since bids and
offers are not collected in a central location, market transparency and best
execution are more problematic. Pursuant to SEC Rule 15c2-11, a Form 211 has
been filed by a Market Maker to actively publish quotes in the Company’s stock
in the OTC Bulletin Board.
Based on
information obtained from Bloomberg, L.P., the offer and bid quotations for the
common stock for the quarter ended December 31, 2005, each quarter of the fiscal
year ended December 31, 2006 and the quarters ended March 31, 2006 and June 30,
2006 are set forth in the table below:
|
Quarter
Ended
|
|
|
Price
Range (2)
|
|
|
|
|
High($)
|
|
|
Low($)
|
|
Quarter
ended 12/31/05
|
(1) |
|
$ |
1.50 |
|
|
$ |
0.50 |
|
Quarter
ended 03/31/06
|
(1) |
|
$ |
23.00 |
|
|
$ |
0.50 |
|
Quarter
ended 06/30/06
|
(1) |
|
$ |
1.40 |
|
|
$ |
0.20 |
| |
|
|
|
|
|
|
|
|
| (1)
Quotes obtained under the symbol “LBAN” |
| (2)
All prices reflect a 1-to-10 reverse stock split effected on June 30,
2006. |
Currently,
there are no broker-dealers making an active market in the Company’s common
stock. The last reported trade occurred on February 20, 2007 at an execution
price of $0.02 per share, with the closing price remaining unchanged at $0.02
per share as of March 20, 2007. Since July 1, 2006, the stock has traded in the
“Other OTC” or “Gray Market”. Accordingly, there are no closing bid and ask
prices for the common stock subsequent to June 30, 2006. Currently,
the Company is listed under the symbol TRHI.
Holders
As of
December 31, 2007, there were 18 registered holders of record of the Company’s
Common Stock.
Dividends
The
Company has not paid any cash dividends to date, and it has no intention of
paying any cash dividends on its common stock in the foreseeable future. The
declaration and payment of dividends is subject to the discretion of the
Company’s Board of Directors and to certain limitations imposed under the
California Statutes. The timing, amount and form of dividends, if any, will
depend upon, among other things, the Company’s results of operation, financial
condition, cash requirements, and other factors deemed relevant by the Board of
Directors.
Unregistered
Sales of Equity Securities
Reference
is made to our Current Report on Form 8-K filed on January 7,
2008.
The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the notes to those
statements included elsewhere in this Form 10-KSB filing. In addition to
the historical financial information, the following discussion and analysis
contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these
forward-looking statements as a result of certain factors, including those set
forth under "Risk Factors" and elsewhere in this registration
statement.
Overview
The
Company was incorporated in the State of Delaware as Camryn Information
Services, Inc., on May 13, 1997. The Company operated for a brief period of time
before it ceased operations on February 25, 1999 when it forfeited its charter
for failure to designate a registered agent. The Company remained dormant until
2004 when it renewed its operations with the filing of a Certificate of Renewal
and Revival of Charter with the State of Delaware on October 29, 2004. On
November 3, 2004, the Company filed a Certificate of Amendment and the Company's
name was formally changed from Camryn Information Services, Inc. to iStorage
Networks, Inc. Such change became effective on November 8, 2004. The Company
subsequently changed its name to Landbank Group, Inc., on January 27, 2006,
following the acquisition of LLC. The Company previously engaged in
business through its wholly-owned subsidiary, LLC which made bulk acquisitions
of parcels of land, primarily through the real property tax lien foreclosure
process. The bulk acquisitions were then divided into smaller parcels for
resale.
On
December 31, 2007, the Company transferred all of its respective rights in and
to LLC and its business and changed its name to Trist Holdings,
Inc. As a result of such transfer, we are a non-operating public
company and our operating results through December 31, 2007 are not meaningful
to our future results. The Company is seeking out suitable candidates for a
business combination with a private company.
Fiscal Year 2007 Compared to
Fiscal Year 2006
Results
from Operations
Provided
below is a discussion of the financial condition and results of operations
relating to the Company’s past operations, which commenced in January 2006 with
the Company’s acquisition of Landbank, LLC, and concluded on December 31, 2007
with the Transactions. Since that time the Company has had no other operations.
Therefore, the financial results for the year ended December 31, 2007 mostly
represents the results of operations of Landbank, LLC. We have not included any
discussion of the results of the Company’s former operations, as we do not
believe such discussion would be meaningful.
The
information below represents our historical numbers. These numbers
are not meaningful going forward due to the transfer of our
business. For financial statement purposes, the results from LLC are
consolidated in one line entitled “Loss from discontinued
operations.”
Selling,
General and Administrative Expenses
Operating
expenses for fiscal year 2007 were $180,000, which represents a decrease of
$673,000 from the $853,000 that was incurred during fiscal year 2006. Fiscal
year 2006 operating expenses were significantly higher mainly due to stock
compensation expense which included a one-time, non-cash charge of $374,667 in
relation to the issuance of 624,445 shares of the Company’s common stock to
consultants (see note 5 of the accompanying notes to the financial
statements).
Discontinued
Operations
Loss from
discontinued operations was $875,000 and $345,000 in the years ended December
31, 2007 and 2006, respectively. The increase in loss of
$530,000 can be principally attributed to the downturn in the real estate market
in 2007.
Liquidity and Capital
Resources
Net cash
used in operating activities was $530,000 and $1,624,000 in the years ended
December 31, 2007 and 2006, respectively. The decrease of $1,094,000
in cash used in operating activities was primarily due to a decrease in net
income, and assumption of debt owed by divested subsidiary, offset by a decrease
stock compensation.
Net cash
provided by financing activities was $264,000 and $1,258,000 in 2007 and 2006,
respectively. These funds were borrowed from the Company’s divested
subsidiary.
The
Company funded the cost of the acquisition of new properties primarily from net
revenues received from sales of properties in inventory and from funds borrowed
from affiliates. The Company has not incurred any debt in order to finance its
operations, with the exception of amounts due to affiliates and mortgages taken
out for 19 sections of land acquired in Pershing County, Nevada in
2005.
From May
to June 2007, our officers and directors met on several occasions and maintained
ongoing and lengthy discussions with our legal and financial advisors, including
our outside corporate counsel, regarding all potential strategic alternatives
that may be available to us, including potential transactions with our majority
stockholders, their affiliates or other third parties, including the potential
merger or acquisition of us by those holders, affiliates or third parties,
and/or their ability or interest to provide additional capital to or invest in
our company, and alliances with entities willing to manage our assets, none of
which provided a viable alternative at that time because these parties: did not
present us with any proposal for a potential transaction; subsequently retracted
their interest in us; and/or demonstrated poor historical financial performance,
or otherwise lacked established business operations or successful business
strategies, and therefore did not demonstrate to the satisfaction of the board
and officers their ability to obtain the necessary financing to complete a
transaction or to manage our assets in a manner that would increase revenues or
stockholder value in general.
In light
of our continuing operating losses and outstanding debt, our Board of Directors,
together with management, previously concluded that it had become necessary to
redirect our company to address a changing competitive
landscape. Therefore, after extensive discussion, the Board of
Directors directed senior management to analyze and review potential strategic
transactions to raise capital, form strategic partnerships and/or identify
mutual alliances in order to preserve our viability and to enhance stockholder
value.
From June
through October 2007, the Board of Directors and officers of the Company held
informal meetings to discuss the possibility of transferring the LLC to a new
company to be formed by Messrs. Doug Gravink and Gary Hewitt, who together held
a majority of the Company’s outstanding common stock and, through their
affiliates, were the holders of a significant portion of the Company’s
debt. At the meetings, the Board of Directors and officers considered
a number of relevant financial and operational issues, including, among
others:
|
●
|
a
review of our results of operations and financial condition, including our
recent operating losses;
|
|
●
|
our
lack of any other viable financing or strategic
transactions;
|
|
●
|
our
declining cash balances;
|
|
●
|
the
Board of Directors’ determination of the value of the LLC and its
Business;
|
|
●
|
the
Company and LLC’s outstanding obligations;
and
|
|
●
|
the
general economic downturn.
|
As a
result of these considerations, the Board of Directors determined that a
transaction with Messrs. Hewitt and Gravink presented the best opportunity for
us and was in the best interests of us and our
stockholders. Therefore, the Board of Directors directed senior
management to finalize the transactions.
On
December 31, 2007, the Company closed the transactions contemplated under the
Agreement dated with the Investor and Family Products LLC, a member of Investor,
who is a party to the Agreement for the limited purpose of providing
indemnification to the Company there under. At the time the Agreement
was executed, and immediately prior to the closing of the transaction
contemplated therein, Investor was the owner of 55% of the Company’s outstanding
capital stock.
Pursuant
to the Agreement, the Transactions occurred at the closing: (1) the
Company transferred ownership of LLC, to Investor, (2) the Company issued
79,311,256 new shares of common stock to Investor to increase Investor’s current
equity holdings in Company of approximately fifty-five percent (55%) to
approximately ninety-five percent (95%), (3) Investor agreed to provide full
indemnity to Company for LLC’s prior operations and liabilities, (4) LLC
assigned $500,000 in debt to Company owed to Investor (, (5) LLC
retained approximately$500,000 in debt owed to third parties and approximately
$2.5 million in debt owed to Investor, and (6) the Company retained
approximately$5,000 in cash for the Company’s working capital.
In
connection with the Note Transfer, the Company entered into a note assignment
with LLC and Investor and issued a promissory note to Investor in the principal
amount of $500,000.
Investor
and the Company also entered into a Registration Rights Agreement between them
at the closing (the “Registration Rights Agreement”) pursuant to which the
Investor received certain demand and piggyback registration rights with respect
to the shares received in the Share Issuance.
The
consummation of the Transactions was subject to the receipt of customary closing
conditions, each of which occurred prior to the closing, including approval of
the LLC Transfer by the Corporation’s stockholders and the amendment of the
Company’s Certificate of Incorporation to change the name of the Company to
Trist Holdings, Inc. and to increase the number of authorized shares of Common
Stock from 100,000,000 to 2,000,000,000.
The
Company suffered recurring losses from operations and has an accumulated deficit
of $2,255,000 at December 31, 2007. Currently, we are a non-operating
public company. The Company is seeking out suitable candidates for a business
combination with a private company.
Critical
Accounting Estimates
The
Company's consolidated financial statements are prepared in conformity with U.S.
generally accepted accounting principles, which require the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues, and
expenses. Management bases its estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances.
The Company's estimates are based on the facts and circumstances available at
the time; different reasonable estimates could have been used in the current
period, and changes in the accounting estimates used are likely to occur from
period to period, which may have a material impact on the presentation of the
Company's financial condition and results of operations. Actual results reported
by the Company may differ from such estimates. The Company reviews these
estimates periodically and reflects the effect of revisions in the period that
they are determined. Note 1 of the Notes to our Consolidated Financial
Statements includes a summary of the accounting policies and methods used in the
preparation of our consolidated accounts.
Off-balance
Sheet Arrangements
We do not
have any off-balance sheet arrangements, as defined in Item 303 of Regulation
S-B.
See the
Company’s audited financial statements in pages 24
through 37.
Item 8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
None.
Disclosure controls and
procedures. Disclosure controls are controls and
procedures designed to reasonably assure that information required to be
disclosed in our reports filed under the Exchange Act, such as this Yearly
Report, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and forms.
Disclosure controls are also designed to reasonably assure that such information
is accumulated and communicated to our management, including the Interim
President, as appropriate to allow timely decisions regarding required
disclosure. Disclosure controls and procedures, no matter how well designed and
implemented, can provide only reasonable assurance of achieving an entity’s
disclosure objectives. The likelihood of achieving such objectives is affected
by limitations inherent in disclosure controls and procedures. These include the
fact that human judgment in decision-making can be faulty and that breakdowns in
internal control can occur because of human failures such as simple errors,
mistakes or intentional circumvention of the established processes.
At the
end of the period covered by this report and at the end of each fiscal quarter
therein, our management, with the participation of our Interim President (who is
our principal executive officer and principal financial officer), carried out an
evaluation of the effectiveness of our disclosure controls and procedures (as
defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934). Based upon that evaluation, our Interim President concluded that these
disclosure controls and procedures were effective at the reasonable assurance
level described above as of the end of the period covered in this
report.
Changes in internal controls over
financial reporting. The Interim President has
evaluated any changes in the Company’s internal control over financial reporting
that occurred during the most recent fiscal quarter. Based on that evaluation,
the Interim President has concluded that no change in our internal control over
financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange
Act of 1934) occurred during the quarter ended December 31, 2007 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
The
Company is a non-accelerated filer and is required to comply with the internal
control reporting and disclosure requirements of Section 404 of the
Sarbanes-Oxley Act for fiscal years ending on or after July 15,
2007. Although the Company is working to comply with these
requirements, the Company has only one consultant. The Company's lack of
employees is expected to make compliance with Section 404 - especially with
segregation of duty control requirements - very difficult and cost ineffective,
if not impossible. While the SEC has indicated it expects to issue
supplementary regulations easing the burden of Section 404 requirements for
small entities like the Company, such regulations have not yet been
issued.
None.
PART
III
Item 9. Directors, Executive Officers, Promoters, Control Persons and
Corporate Governance; Compliance with Section 16(a) of the Exchange
Act
Landbank
has a three person Board of Directors, none of whom are employees nor affiliates
of the Company. In addition, the Company has formed an Audit Committee,
effective July 12, 2006, comprised of Gary Freeman and Lee Mendelson, the two
non-affiliate/employee directors of the Company. Mr. Freeman serves as the audit
committee financial expert for the Committee.
|
Name
|
|
Age
|
|
Position
Held and Tenure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
since January 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President,
Secretary and Chief Financial Officer since September
2007
|
Biographical
Information
Gary Freeman, Director. Mr.
Freeman has served as a director of the Company since July 2007. Mr. Freeman is
currently a Partner in Bandari, Beach, Lim & Cleland’s Audit and Accounting
services division. In conjunction with various consulting engagements, Mr.
Freeman has assumed interim senior level management roles at numerous public and
private companies during his career, including Co-President and Chief Financial
Officer of Trestle Holdings, Inc., Chief Financial Officer of Silvergraph
International and Chief Financial Officer of Galorath Incorporated. Mr. Freeman
is currently a member of the Board of Directors of Trestle Holdings, where he
serves as its Audit Committee Chairman, and GVI Security Solutions. Mr.
Freeman’s previous experience includes ten years with BDO Seidman, LLP,
including two years as an Audit Partner.
Ray Gaytan, Director. Mr.
Gaytan has served as a director of the Company since January 2006. Since
1990, Mr. Gaytan has headed his own accounting firm, Gaytan, Baumblatt &
Leevan, LLP. Mr. Gaytan is a certified public accountant.
Lee Mendleson, Director. Mr. Mendelson has
served as a director of the Company since July 2007. Mr. Mendelson is the
Founder and Managing Attorney of Mendelson Law Group where his practice is
focused on representing creditors in retail and commercial
litigation. Mr. Mendelson is active in several commercial law
associations and publications.
Eric Stoppenhagen. Mr.
Stoppenhagen has served as President and Secretary since September 2007 and
Chief Financial Officer since November 2007. Mr. Stoppenhagen has
served in an executive capacity for several public and private companies;
including President of Trestle Holdings, Inc., and Chief Financial Officer of
Jardinier Corporation. He holds a Juris Doctorate and Masters of Business
Administration both from George Washington University.
Additionally, he holds a Bachelor of Science in Finance and a Bachelor of
Science in Accounting both from Indiana University. Mr. Stoppenhagen is a
certified public accountant
Code
of Ethics
The
Company has adopted a code of business conduct and ethics for directors,
officers (including the Company’s principal executive officer and principal
financial officer) and employees, known as the Code of Business Ethics and
Conduct.
Audit
Committee Financial Expert
The Audit
Committee includes at least one member who is determined by the Board to meet
the qualifications of an “audit committee financial expert” in accordance with
SEC rules, excluding the requirement that the person meets the relevant
definition of an “independent director.” Mr. Freeman is the director
who has been determined to be an audit committee financial expert. Stockholders
should understand that this designation is a disclosure requirement of the SEC
related to Mr. Freeman’s experience and understanding with respect to certain
accounting and auditing matters. The designation does not impose on Mr. Freeman
any duties, obligations or liability that are greater than are generally imposed
on him as a member of the Audit Committee and Board of Directors, and his
designation as an audit committee financial expert pursuant to this SEC
requirement does not affect the duties, obligations or liability of any other
member of the Audit Committee or the Board of Directors. Mr. Freeman is a
independent director.
The
following table and related footnotes show the compensation paid during the
fiscal years ended December 31, 2007 and 2006, to the Company's principal
executive officer and each of the other executive officers whose salary exceeded
$100,000 for the year ended December 31, 2007:
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
Other
|
|
|
|
|
Name
and Principal
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Option
Awards
|
|
|
Compensation
|
|
|
Total
|
|
Position
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(f)
|
|
|
(i)
|
|
|
(j)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former
Chief Executive Officer
|
|
|
|
|
-- |
|
|
|
-- |
|
|
$ |
6,818 |
(3) |
|
$ |
5,178 |
(4) |
|
$ |
11,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
$ |
|
Former
President and Secretary
|
|
|
|
|
-- |
|
|
|
-- |
|
|
$ |
6,818 |
(3) |
|
$ |
5,179 |
(4) |
|
$ |
11,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
96,250 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
$ |
96,250 |
Former
Chief Financial Officer
|
|
|
|
$ |
57,115 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
$ |
57,115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
15,167 |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
President,
Secretary and Chief Financial Officer
|
|
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
(1)
|
Joined
the Company on January 27, 2006 and resigned on September 24, 2007. All of
the Company's prior officers and directors resigned as of January 26,
2006, and received no compensation for
2006.
|
|
(2)
|
Joined
the Company on July 5, 2006 and resigned November 15, 2007. Mr. Genesi's
annual salary was $110,000.
|
|
(3)
|
On
December 28, 2006, both Messrs. Gravink and Hewitt were granted an option
to purchase 100,000 shares of common stock at an exercise price of $0.12
per share, the fair market value of our common stock on the date of grant,
in consideration of their service as a director of the company. These
options were canceled in August
2007.
|
|
(4)
|
Represents
royalty fees paid to John Beck's Amazing Profits, LLC through December 31,
2007, for leads provided to Landbank pursuant to our royalty agreement
with this company. John Beck's Amazing Profits, LLC is indirectly owned,
50% each, by Messrs. Gravink and
Hewitt.
|
| |
|
|
(5)
|
Joined
the Company in September 2007. Represents consulting fees paid to Mr.
Stoppenhagen’s company, Venor, Inc.
|
Compensation
of Directors
We
currently pay our directors $7,500 per year, $1,875 payable on the first
business day of each fiscal quarter for service on the board of
directors.
Previously,
we compensated certain of our directors with option grants under the Stock
Incentive Plan.
In August
2007, all current directors of the Company agreed to cancel all stock options
previously granted to them.
Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
The
following table sets forth information relating to the beneficial ownership of
the Company’s common stock by those persons beneficia1ly holding more than 5% of
the Company's common stock, by the Company's directors and executive officers,
and by all of the Company's directors and executive officers as a group as of
December 31, 2007.
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
Title
of Class
|
|
Name
and Address of Beneficial Owner
|
|
Amount
and Nature of Beneficial Ownership (1)
|
|
Percent
of Class (2)
|
|
Common
|
|
Landbank
Acquisition LLC (3)
7030
Hayvenhurst Ave.
Van
Nuys, CA 91406
|
|
84,777,924
|
|
95.0%
|
|
Common
|
|
Ray
Gaytan
11400
Olympic Blvd.
Los
Angeles, CA 90064
|
|
4,680
|
|
0%
|
|
Common
|
|
Directors
and Executive Officers as a
Group
(4 persons)
(4)
|
|
4,680
|
|
0%
|
|
(1)
|
"Beneficial
Owner" means having or sharing, directly or indirectly (i) voting power,
which includes the power to vote or to direct the voting, or (ii)
investment power, which includes the power to dispose or to direct the
disposition, of shares of the common stock of an issuer. The definition of
beneficial ownership includes shares, underlying options or warrants to
purchase common stock, or other securities convertible into common stock,
that currently are exercisable or convertible or that will become
exercisable or convertible within 60 days. Unless otherwise indicated, the
beneficial owner has sole voting and investment power.
|
| |
|
|
(2)
|
Percentages
are based on 89,239,920 shares of common stock issued and outstanding as
of December 31, 2007.
|
| |
|
|
(3)
|
On
September 20, 2007, Landbank Acquisition LLC entered into a Contribution
Agreement (the “Contribution Agreement”) with its members, including
Gravink and Hewitt and certain of their affiliated entities. Pursuant to
the Contribution Agreement, Gravink and Hewitt each contributed 2,733,334
shares of the Company’s common stock (together, the “Contributed Shares”)
to Investor in exchange for membership interests in Investor. Following
the closing, Investor held a total of 5,466,668 shares of Company common
stock directly, or approximately 55.1% of our issued and outstanding
shares. Gravink and Hewitt each hold a 50% beneficial ownership interest
in Investor through both direct and indirect ownership via their
affiliates.
|
| |
|
|
(4)
|
Messrs.
Freeman, Mendelson, and Stoppenhagen have no beneficial ownership in the
Company.
|
Equity
Compensation Plan Information
None.
The LLC
paid a royalty to a related company equal to 35% of gross profit received by the
LLC on each all-cash sale generated by leads provided by that related company.
Gross profit was defined as land sale revenue reduced by inventory cost, sales
commissions, credit card merchant fees, and deed of trust transfer costs. The
related company is Landbank Acquisition, LLC, a private entity owned 100% by former directors,
officers, and principal stockholders of the
Company.
John
Beck, a former director of the Company and currently a stockholder of the
Company, received a profit participation of 50% of the royalty payments received
by one of the related companies, pursuant to its royalty agreement with LLC, for
his services to that related company. During the years ended December 31, 2007
and 2006, the Subsidiary recorded royalty expense to related parties of $10,357
and $668,159, respectively.
On September
12, 2007, the Company terminated its agreement with Investment Capital
Researchers, Inc. (“ICR”), a Company owned by Stephen Weber, a former member of
the Company’s Board of Directors. Pursuant to the termination agreement, ICR
will keep the 200,000 shares (post-split) of the Company’s common stock that it
was issued on June 30, 2006 but will not be entitled to any future compensation
of any nature. In return, the Company has relieved ICR of any future obligations
relating to the original agreement dated August 1, 2005 and amended on June 27,
2006. Pursuant to the original agreement, ICR received 200,000 shares
(post-split) of the Company’s common stock on June 30, 2006 and was to receive
an additional 200,000 shares of the Company’s common stock (post-split) upon the
achievement of specified milestones. All shares issued pursuant to this
agreement were to be restricted securities. The 200,000 shares issued on June
30, 2006 were valued at $120,000 based on fair value of the shares at the time
of issuance. The Company expensed the entire $120,000 as non-cash consulting
fees during the six month period ended June 30, 2006,
The
Company shared its
principal office in Van Nuys and its offices in both American Fork and Alameda
with related parties. The Company did not pay rent for
its Van Nuys and American Fork facilities, but, if it were required to pay rent
on these facilities, the Company estimates the combined monthly rent value being
approximately $1,200, which the Company deems as not material. The related
parties are companies owned and controlled by Doug Gravink and Gary Hewitt, both
of whom are former directors and officers of the company and former principal
stockholders of the Company. The Company's office in Phoenix, Arizona was
subleased from a related company that is also owned by Doug Gravink and Gary
Hewitt. Under the terms of the sublease arrangement, the Company paid a pro-rata
share of the rent paid by the related company, based upon the portion of the
space occupied by the Company. During the years ended December, 2007 and 2006,
LLC recorded related party rent expense totaling $22,224 and $22,226,
respectively.
On
December 22, 2006, LLC entered into a lease for approximately 1,200 square feet
of office space in Alameda, California. The lease was for a term of twenty-five
(25) months, commencing January 1, 2007. Per the terms of the lease, the first
month was rent-free, with a base rent of $2,295 per month for months two (2)
through twelve (12) and $2,366 per month for months thirteen (13) through
twenty-five (25). LLC was also responsible for paying its pro-rated share of
certain expenses, such as property taxes. The monthly rent and related expenses
for the Alameda office were to be allocated to both LLC and its affiliate,
Mentoring of America, LLC (“MAC”), with each company paying 50% of the expenses
associated with maintaining this office.
A Mr.
Gaytan, a director of the Company has, through his accounting firm, provided
accounting service to LLC. The Subsidiary recorded related party accounting
expense totaling $7,483 during the year ended December 31, 2007. LLC incurred
$126,805 in related party accounting expense during the same period in fiscal
year 2006.
Director
Independence
In
conjunction with the preparation of this registration statement, using the
definition of “independence” established by the NASDAQ Stock Market, we have
evaluated all relationships between each director and the Company.
Based on
the foregoing definition, we have determined that two of our directors, Mr.
Freeman and Mr. Mendelson, currently meet the definition of an “independent”
director under the standards established by NASDAQ. We do not currently have a
nominating or compensation committee.
Our Board
of Directors will continually monitor the standards established for director
independence under applicable law or listing requirements and will take all
reasonable steps to assure compliance with those standards.
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
|
|
|
|
|
2.1
|
|
Stock
Purchase Agreement dated January 23, 2006 between iStorage Networks, Inc.
and Landbank, LLC. (1)
|
|
2.2
|
|
Stock
Purchase Agreement dated January 23, 2006 between M. Thomas Makmann and
iStorage Networks, Inc. (1)
|
|
2.3
|
|
Securities
Exchange Agreement dated November 1, 2007 between Landbank Group, Inc.,
Landbank Acquisition LLC and Family Products LLC. (2)
|
|
3.1
|
|
Certificate
of Incorporation of the Company, formerly Camryn Information Services,
Inc., dated May 13, 1997. (1)
|
|
3.2
|
|
Certificate
of Renewal and Revival of Charter dated October 29, 2004.
(1)
|
|
3.3
|
|
Certificate
of Amendment to the Certificate of Incorporation to change name to
iStorage Networks, Inc., dated November 8, 2004. (1)
|
|
3.4
|
|
Certificate
of Amendment to the Certificate of Incorporation to change name to
Landbank Group, Inc., dated January 27, 2006. (1)
|
|
3.5
|
|
Certificate
of Amendment to the Certificate of Incorporation, dated June 29, 2006,
reflecting the reverse split of the Company’s common stock.
(1)
|
|
3.6
|
|
Certificate
of Amendment to the Certificate of Incorporation, dated December 31,
2007.
|
|
3.7
|
|
Amended
and Restated By-Laws of the Company adopted November 2, 2006.
(1)
|
|
3.8
|
|
Amendment
to Amended and Restated By-Laws of the Company adopted November 2, 2006.
(3)
|
|
10.1
|
|
Agreement
with ICR dated August 1, 2005 as amended June 27, 2006.
(1)
|
|
10.2
|
|
2006
Stock Incentive Plan (1)
|
|
10.3
|
|
Form
of Stock Option Agreement under 2006 Stock Incentive Plan.
(1)
|
|
10.4
|
|
Consulting,
Confidentiality and Proprietary Rights Agreement between Landbank Group,
Inc. and Venor, Inc., dated September 27, 2007 (4)
|
| 10.5 |
|
Form
of Option Termination Agreement. (4)
|
|
10.6
|
|
Letter
of Termination, dated September 12, 2007, between Landbank Group, Inc. and
Aziz Munir and Ray Dirks (4)
|
|
10.7
|
|
Letter
of Termination, dated September 12, 2007, between Landbank Group, Inc. and
Investment Capital Researchers, Inc. (4)
|
|
10.8
|
|
Form
of Demand Promissory Note issued by Landbank, LLC. (4) |
|
10.9
|
|
Form
of Assignment of Promissory Note, agreed to by Landbank, LLC.
(4)
|
|
11
|
|
Statement
re computation of per share earnings (see Statement of Operations and
Notes to Financial Statements).
|
|
21
|
|
Subsidiaries
of the Company.
|
|
23
|
|
Consent
of Kabani & Company, Inc., independent auditors.
|
|
31
|
|
Certification
of Principal Executive Officer and Principal Financial Officer
pursuant to Securities Exchange Act Rules 13a-14(a)
and 15d-14(a) as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32
|
|
Certification of Principal Executive Officer and Principal
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to section 906 of the Sarbanes-Oxley Act of
2002.
|
|
(1)
|
Incorporated
by reference to Amendment No. 2 to the Registrant's Registration Statement
on Form 10-SB, filed with the Securities and Exchange Commission on
January 4, 2007.
|
|
(2)
|
Incorporated
by reference to Registrant’s Current Report on Form 8-K filed on November
7, 2007.
|
|
(3)
|
Incorporated
by reference to Exhibit 3.2 of Registrant’s Current Report Form 8-K filed
on November 21, 2007.
|
|
(4)
|
Incorporated
by reference to Registrant’s Quarterly Report on Form 10-QSB for the
quarter ended September 30,
2007.
|
Kabani
& Company, Inc. has audited the Company’s financial statements since fiscal
year 2005 (Kabani has audited the financial statements of Landbank, LLC since
fiscal year 2005; fiscal year 2006 will be Kabani’s first audit of the Company’s
financial statements), and the Audit Committee of the Board of Directors of the
Company has selected Kabani & Company, Inc. as the Company’s independent
auditors to audit the financial statements of the Company for the fiscal year
ending December 31, 2007.
Fees
Paid to Kabani & Company, Inc.
Audit
Fees
The
aggregate fees billed by Kabani & Company, Inc. for the audit of the
Company’s consolidated financial statements for the years ended December 31,
2007 and 2006, the reviews of the quarterly reports on Form 10-QSB for the same
fiscal years and statutory and regulatory filings were $52,500 for 2007 and
$43,252 for 2006.
Audit-Related
Fees
The
aggregate fees billed by Kabani & Company, Inc. for audit-related services
was zero and $30,000 for the 2007 and 2006 financial statements,
respectively.
Tax
Fees
During
fiscal years 2007 and 2006, the Company recorded accounting/professional fees
totaling $7,483 and $126,805, respectively, that were billed to the Company by
Gaytan, Baumblatt, & Leevan, LLP (“GBL”), which is owned by Ray Gaytan, a
Director of the Company (see note 6 of the accompanying notes to the financial
statements). These fees included tax advice and the preparation of the Company’s
annual tax returns. GBL has prepared all of the Company’s tax returns relating
to its current operations. Kabani & Company, Inc. has not provided any tax
related services to the Company.
All
Other Fees
In 2007
and 2006, Kabani & Company, Inc. did not bill the Company for professional
services other than the audit services and audit-related services described
above.
The Audit
Committee has determined that the provision of non-audit services by Kabani
& Company, Inc. is compatible with maintaining auditor
independence.
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim
President, Secretary and
|
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
|
|
|
|
|
|
|
|
|
SIGNATURE
|
TITLE
|
DATE
|
|
|
|
|
|
|
President
and Secretary
|
March
31, 2008
|
|
|
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
Chief
Financial Officer
|
March
31, 2008
|
|
|
(Principal
Financial Officer)
|
|
|
|
|
|
|
/s/ GARY
FREEMAN
|
Director
|
March
31, 2008
|
|
Gary
Freeman
|
|
|
|
|
|
|
|
/s/ RAY
GAYTAN
|
Director
|
March
31, 2008
|
|
Ray
Gaytan
|
|
|
|
|
|
|
|
/s/ LEE
MENDELSON
|
Director
|
March
31, 2008
|
|
Lee
Mendelson
|
|
|
INDEX TO
EXHIBITS
|
EXHIBIT
NUMBER
|
|
DESCRIPTION
|
|
|
|
|
|
2.1
|
|
Stock
Purchase Agreement dated January 23, 2006 between iStorage Networks, Inc.
and Landbank, LLC. (1)
|
|
2.2
|
|
Stock
Purchase Agreement dated January 23, 2006 between M. Thomas Makmann and
iStorage Networks, Inc. (1)
|
|
2.3
|
|
Securities
Exchange Agreement dated November 1, 2007 between Landbank Group, Inc.,
Landbank Acquisition LLC and Family Products LLC. (2)
|
|
3.1
|
|
Certificate
of Incorporation of the Company, formerly Camryn Information Services,
Inc., dated May 13, 1997. (1)
|
|
3.2
|
|
Certificate
of Renewal and Revival of Charter dated October 29, 2004.
(1)
|
|
3.3
|
|
Certificate
of Amendment to the Certificate of Incorporation to change name to
iStorage Networks, Inc., dated November 8, 2004. (1)
|
|
3.4
|
|
Certificate
of Amendment to the Certificate of Incorporation to change name to
Landbank Group, Inc., dated January 27, 2006. (1)
|
|
3.5
|
|
Certificate
of Amendment to the Certificate of Incorporation, dated June 29, 2006,
reflecting the reverse split of the Company’s common stock.
(1)
|
|
3.6
|
|
Certificate
of Amendment to the Certificate of Incorporation, dated December 31,
2007.
|
|
3.7
|
|
Amended
and Restated By-Laws of the Company adopted November 2, 2006.
(1)
|
|
3.8
|
|
Amendment
to Amended and Restated By-Laws of the Company adopted November 2, 2006.
(3)
|
|
10.1
|
|
Agreement
with ICR dated August 1, 2005 as amended June 27, 2006.
(1)
|
|
10.2
|
|
2006
Stock Incentive Plan (1)
|
|
10.3
|
|
Form
of Stock Option Agreement under 2006 Stock Incentive Plan.
(1)
|
|
10.4
|
|
Consulting,
Confidentiality and Proprietary Rights Agreement between Landbank Group,
Inc. and Venor, Inc., dated September 27, 2007 (4)
|
| 10.5 |
|
Form
of Option Termination Agreement. (4)
|
|
10.6
|
|
Letter
of Termination, dated September 12, 2007, between Landbank Group, Inc. and
Aziz Munir and Ray Dirks (4)
|
|
10.7
|
|
Letter
of Termination, dated September 12, 2007, between Landbank Group, Inc. and
Investment Capital Researchers, Inc. (4)
|
|
10.8
|
|
Form
of Demand Promissory Note issued by Landbank, LLC. (4) |
|
10.9
|
|
Form
of Assignment of Promissory Note, agreed to by Landbank, LLC.
(4)
|
|
11
|
|
Statement
re computation of per share earnings (see Statement of Operations and
Notes to Financial Statements).
|
|
21
|
|
Subsidiaries
of the Company.
|
|
23
|
|
Consent
of Kabani & Company, Inc., independent auditors.
|
|
31
|
|
Certification
of Principal Executive Officer and Principal Financial Officer
pursuant to Securities Exchange Act Rules 13a-14(a)
and 15d-14(a) as adopted pursuant to section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32
|
|
Certification of Principal Executive Officer and Principal
Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to section 906 of the Sarbanes-Oxley Act of
2002.
|
|
(1)
|
Incorporated
by reference to Amendment No. 2 to the Registrant's Registration Statement
on Form 10-SB, filed with the Securities and Exchange Commission on
January 4, 2007.
|
|
(2)
|
Incorporated
by reference to Registrant’s Current Report on Form 8-K filed on November
7, 2007.
|
|
(3)
|
Incorporated
by reference to Exhibit 3.2 of Registrant’s Current Report Form 8-K filed
on November 21, 2007.
|
|
(4)
|
Incorporated
by reference to Registrant’s Quarterly Report on Form 10-QSB for the
quarter ended September 30,
2007.
|
TRIST
HOLDINGS, INC.
Consolidated
Financial Statements
For
the Year Ended December 31, 2007
Table
of Contents
|
|
Page
|
|
|
25
|
|
Consolidated financial
statements :
|
|
|
|
26
|
|
|
27
|
|
|
28
|
|
|
29
|
|
|
30
|
Board of
Directors and Stockholders of Trist Holdings, Inc.
We have
audited the accompanying balance sheet of Trist Holdings, Inc. as of December
31, 2007, and the related statements of operations, shareholders’ Deficit, and
cash flows for 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 of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes 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 position of Trist Holdings, Inc. as of December
31, 2007, and the results of its operations and cash flows for the year ended
December 31, 2007 and 2006 in conformity with accounting principles generally
accepted in the United States of America.
The
Company’s financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The company has an accumulated deficit of $2,254,577 at December 31,
2007 including a net loss of $1,055,507 during the year ended December 31, 2007.
These factors as discussed in Note 9 to the financial statements, raises
substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans in regard to these matters are also described in Note 9. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/
Kabani & Company, Inc.
CERTIFIED
PUBLIC ACCOUNTANTS
Los
Angeles, California
March 28,
2008
|
|
|
|
(Formally
Known as LandBank Group,
Inc. and Subsidiary)
|
|
|
Consolidated
Balance Sheet
|
|
|
As
of December 31, 2007
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash
& cash equivalents
|
|
$ |
5,000 |
|
|
Prepaid
expenses
|
|
|
3,741 |
|
|
|
|
|
|
|
|
Total
assets
|
|
$ |
8,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Loan
payable
|
|
$ |
500,000 |
|
|
|
|
|
|
|
|
Shareholders'
deficit
|
|
|
|
|
|
Common
stock, 2,000,000,000 shares authorized; $0.0001
|
|
|
|
|
|
par
value; 89,239,920 issued and outstanding
|
|
|
8,924 |
|
|
Additional
paid in capital
|
|
|
1,754,394 |
|
|
Accumulated
deficit
|
|
|
(2,254,577 |
) |
|
Total
shareholders' deficit
|
|
|
(491,259 |
) |
|
|
|
|
|
|
|
Total
liabilities and shareholders' deficit
|
|
$ |
8,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
|
|
|
|
|
|
(Formally
Known as LandBank Group, Inc. and Subsidiary)
|
|
|
Consolidated
Statements of Operations
|
|
|
For
the Years Ended December 31, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
|
|
3,250 |
|
|
|
737,667 |
|
|
Directors
and officers compensation
|
|
|
141,053 |
|
|
|
80,934 |
|
|
General
& administrative expenses
|
|
|
35,704 |
|
|
|
34,245 |
|
|
Total
operating expenses
|
|
|
180,007 |
|
|
|
852,846 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(180,007 |
) |
|
|
(852,846 |
) |
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
800 |
|
|
|
800 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss from continuing operations
|
|
|
(180,807 |
) |
|
|
(853,646 |
) |
|
|
|
|
|
|
|
|
|
|
|
Loss
from Discontinued Operations
|
|
|
(874,700 |
) |
|
|
(345,424 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$ |
(1,055,507 |
) |
|
$ |
(1,199,070 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
Loss per share from Continuing operation
|
|
$ |
(0.02 |
) |
|
$ |
(0.09 |
) |
|
Net
Loss per share from Discontinued Operations
|
|
$ |
(0.09 |
) |
|
$ |
(0.04 |
) |
|
Basic
& Dilutive Loss per share
|
|
$ |
(0.11 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic
& Diluted weighted average shares outstanding
|
|
|
9,927,641 |
|
|
|
9,627,872 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
The
accompanying notes are an integral part of these financial
statements.
|
|
| |
|
|
*
Weighted average number of shares used to compute basic and diluted loss
per share is the same since the effect of dilutive securities is
anti-dilutive.
|
|
|
|
|
|
(Formally
Known as LandBank Group, Inc. and Subsidiary)
|
|
|
Consolidated
Statements of Shareholders' Equity (Deficit)
|
|
|
For
the Years Ended December 31, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
Retained
|
|
|
|
|
|
|
|
Common
Stock
|
|
|
Paid
in
|
|
|
Earnings
|
|
|
Shareholders'
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
(Accumulated
Deficit)
|
|
|
Equity
(Deficit)
|
|
|
Balance
as of December 31, 2005
|
|
|
8,200,000 |
|
|
$ |
820 |
|
|
$ |
(820 |
) |
|
$ |
82,373 |
|
|
$ |
82,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization
on reverse acquistion
|
|
|
1,005,200 |
|
|
|
101 |
|
|
|
(101 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued to consultants
|
|
|
624,445 |
|
|
|
62 |
|
|
|
374,605 |
|
|
|
- |
|
|
|
374,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for rounding up for split
|
|
|
5,686 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of options granted to Directors
|
|
|
- |
|
|
|
- |
|
|
|
25,934 |
|
|
|
- |
|
|
|
25,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year ended December 31, 2006
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,199,070 |
) |
|
|
(1,199,070 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as of December 31, 2006
|
|
|
9,835,331 |
|
|
|
984 |
|
|
|
399,617 |
|
|
|
(1,116,697 |
) |
|
|
(716,096 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
of options granted to Directors & Officers
|
|
|
- |
|
|
|
- |
|
|
|
29,636 |
|
|
|
- |
|
|
|
29,636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
93,333 |
|
|
|
9 |
|
|
|
83,991 |
|
|
|
- |
|
|
|
84,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divestiture
of operating subsidiary (LandBank, LLC)
|
|
|
79,311,256 |
|
|
|
7,931 |
|
|
|
1,241,150 |
|
|
|
(82,373 |
) |
|
|
1,166,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year ended December 31, 2007
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,055,507 |
) |
|
|
(1,055,507 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as of December 31, 2007
|
|
|
89,239,920 |
|
|
$ |
8,924 |
|
|
$ |
1,754,394 |
|
|
$ |
(2,254,577 |
) |
|
$ |
(491,259 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
The
accompanying notes are an integral part of these financial
statements.
|
|
|
|
|
|
(Formally
Known as LandBank Group, Inc. and Subsidiary)
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
For
the Years Ended December 31, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(1,055,507 |
) |
|
$ |
(1,199,070 |
) |
|
Adjustments
to reconcile net loss to net cash
|
|
|
|
|
|
|
|
|
|
used
in operating activities:
|
|
|
|
|
|
|
|
|
|
Amortization
of options granted to Directors & Officers
|
|
|
29,636 |
|
|
|
25,934 |
|
|
Shares
to be issued for services
|
|
|
84,000 |
|
|
|
374,667 |
|
|
Changes
in current assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid
expenses
|
|
|
(3,741 |
) |
|
|
|
|
|
Net
cash used in operating activities from continuing
operations
|
|
|
(945,612 |
) |
|
|
(798,469 |
) |
|
Net
cash provided by/(used in) operating activities from discontinued
operations
|
|
|
415,869 |
|
|
|
(825,192 |
) |
|
Net
cash used in operating activities
|
|
|
(529,743 |
) |
|
|
(1,623,661 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities :
|
|
|
|
|
|
|
|
|
|
Cash
belonging to subsidiary spun-off
|
|
|
270,790 |
|
|
|
(265,970 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financial activities
|
|
|
|
|
|
|
|
|
|
Net
borrowings from related parties
|
|
|
- |
|
|
|
418,580 |
|
|
Net
cash provided by financial activities from continuing
operations
|
|
|
- |
|
|
|
418,580 |
|
|
Net
cash provided by financial activities from discontinued
operations
|
|
|
263,953 |
|
|
|
839,626 |
|
|
Net
cash provided by financial activities
|
|
|
263,953 |
|
|
|
1,258,206 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
change in cash and cash equivalents
|
|
|
5,000 |
|
|
|
(631,425 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - beginning balance
|
|
|
- |
|
|
|
631,425 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents - ending balance
|
|
$ |
5,000 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flows information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes
paid
|
|
$ |
800 |
|
|
$ |
800 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these financial
statements.
|
|
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
1.
Nature of business and significant accounting policies:
Nature of
business:
The
Company was incorporated in the State of Delaware as Camryn Information
Services, Inc., on May 13, 1997. The Company operated for a brief period of time
before it ceased operations on February 25, 1999 when it forfeited its charter
for failure to designate a registered agent. The Company remained dormant until
2004 when it renewed its operations with the filing of a Certificate of Renewal
and Revival of Charter with the State of Delaware on October 29, 2004. On
November 3, 2004, the Company filed a Certificate of Amendment and the Company's
name was formally changed from Camryn Information Services, Inc. to iStorage
Networks, Inc. Such change became effective on November 8, 2004.
On
January 26, 2006, iStorage issued 8,200,000 shares of restricted stock
(post-split) in exchange for all of the assets and liabilities of Landbank, LLC
(“LLC), a company organized in the State of California in December 2004, and
$140,000 in cash. iStorage changed its name to Landbank Group, Inc. The former
members of Landbank, LLC became approximately 90% owners of the
Company.
The
exchange of shares with Landbank, LLC was accounted for as a reverse acquisition
under the purchase method of accounting since the stockholders of Landbank, LLC
obtained control of the consolidated entity (collectively, “the Company”).
Accordingly, the merger of the two companies was recorded as a recapitalization
of Landbank, LLC, where as Landbank, LLC was treated as the continuing
entity.
The
Company subsequently changed its name to Landbank Group, Inc., on January 27,
2006, following the acquisition of Landbank, LLC. Landbank, LLC made
bulk acquisitions of parcels of land, primarily through the real property tax
lien foreclosure process. The bulk acquisitions were then divided into smaller
parcels for resale.
On
December 31, 2007, the Company entered into an agreement and closed the
transactions with Landbank Acquisition LLC (“Investor”) and Family Products LLC,
a member of Investor. Pursuant to the Agreement, the following transactions (the
“Transactions”) occurred at the closing: (1) the Company transferred
ownershipof Landbank LLC, its operating subsidiary (“LLC”), to Investor (the
“LLC Transfer”), (2) the Company issued 79,311,256 new shares of common stock to
Investor to increase Investor’s current equity holdings in Company of
approximately fifty-five percent (55%) to approximately ninety-five percent
(95%) (the “Share Issuance”), (3) Investor agreed to provide full indemnity to
Company for LLC’s prior operations and liabilities, (4) LLC
assigned $500,000 in debt to Company owed to Investor (the “Note
Assignment”), (5) LLC retained approximately$500,000 in debt owed to third
parties and approximately $2.5 million in debt owed to Investor, and (6) the
Company retained approximately$5,000 in cash for the Company’s working
capital.
As the
LLC Transfer Transaction was between a related party, no gain or loss was
recorded on the disposal of Landbank, LLC.
Pursuant
to the LLC Transfer, on October 26, 2007 the Company changed its name to ‘ Trist
Holdings, Inc.’. The authorized shares capital was also increased from
1,000,000,000 shares to 2,000,000,000 shares.
Summary of significant
accounting policies
The
following summary of significant accounting policies used in the preparation of
these consolidated financial statements is in accordance with generally accepted
accounting principles.
Basis of Presentation and
Principles of Consolidation
The
accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America. All
significant inter-company transactions and accounts have been eliminated in the
consolidation.
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
Principles of
consolidation
The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary Landbank, LLC. All significant inter-company accounts
and transactions have been eliminated. As of December 31, 2007, the Company
divested its subsidiary. As such, activities from the divested
subsidiary are reflected in the statements of operations under “Loss from
discontinued operations.”
Cash and cash
equivalents
For
purposes of the statement of cash flows, cash equivalents include all highly
liquid debt instruments with original maturities of ninety days or less which
are not securing any corporate obligations.
Concentration
The
Company maintains its cash in bank deposit accounts, which, at times, may exceed
federally insured limits. The Company has not experienced any losses in such
accounts.
Inventory
The
Company currently does not carry inventory. Prior to December 31,
2007, the Company’s inventory consisted of land parcels that were purchased for
resale purposes, and, except for special circumstances, did not normally remain
in inventory for a prolonged period of time. The Company recorded its inventory
at the lower of cost or fair market value at the relevant balance sheet date.
The Company reviewed its inventory on a quarterly basis in an attempt to (1)
identify “problem” properties that may become impaired (difficult or impossible
to sell), and (2) identify the financial impact, or impairment, to the recorded
cost, or carrying value, of these properties. The Company attempted to measure
impairment on an item-by-item basis, but due to practical limitations, the
Company also measured impairment for a group of similar/related
properties.
Income
taxes
Income
taxes are accounted for in accordance with FASB-109 - Accounting for Income
Taxes. Deferred taxes represent the expected future tax consequences when the
reported amounts of assets and liabilities are recovered or paid. They arise
from differences between the financial reporting and tax bases of assets and
liabilities and are adjusted for changes in tax laws and tax rates when those
changes are enacted. The provision for income taxes represents the total of
income taxes paid, or payable, for the current year, plus the change in deferred
taxes during the year.
Use of
estimates
The
process of preparing consolidated financial statements in conformity with
generally accepted accounting principles requires the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues, and
expenses. Such estimates primarily relate to unsettled transactions and events
as of the date of the financial statements. Accordingly, upon settlement, actual
results may differ from estimated amounts.
Recognition of revenue and
expenses
The
Company does not have any revenues from continuing operations. As relates to the
Company’s discontinued operations, Company followed FASB 66 - Accounting for
Sales of Real Estate. Substantially all of the Company’s land sales were
all-cash transactions. The Company also had a small, insignificant number of
financing transactions through December 31, 2007. Because the Company’s policy
for the all-cash transactions was to allow the buyer 60 days to rescind his real
estate purchase, and because the Company did not issue the deed of trust on a
financing sale until the note was paid in full, the deposit method of accounting
was used. Under the deposit method, revenues and their related expenses,
including inventory, were not recognized until the end of the buyer’s 60-day
rescission period, for the all-cash sales, and at the time the note was paid in
full for the financing transaction.
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
Issuance of shares for
service
The
Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.
Segment
reporting
Statement
of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on the Company's financial statements as substantially all of
the Company's operations were conducted in one industry segment.
Impairment of Long-Lived
Assets
The Company adopted Statement of
Financial Accounting Standards No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," and the accounting and reporting
provisions of APB Opinion No. 30, "Reporting the Results of Operations for a
Disposal of a Segment of a Business." The Company periodically evaluates the
carrying value of long-lived assets to be held and used in accordance with SFAS
144. SFAS 144 requires impairment losses to be recorded on long-lived assets
used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amounts. In that event, a loss is recognized based on the
amount by which the carrying amount exceeds the fair market value of the
long-lived assets. Loss on long-lived assets to be disposed of is determined in
a similar manner, except that fair market values are reduced for the cost of
disposal. Based on its review, the Company believes that, as of December 31,
2007 and 2006, there were no significant impairments of its
long-lived assets used in operations.
In
September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This
Statement defines fair value, establishes a framework for measuring fair value
in generally accepted accounting principles (“GAAP”), and expands disclosures
about fair value measurements. This Statement applies under other accounting
pronouncements that require or permit fair value measurements, the Board having
previously concluded in those accounting pronouncements that fair value is the
relevant measurement attribute. Accordingly, this Statement does not require any
new fair value measurements. However, for some entities, the
application of this Statement will change current practice. This
Statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The management is currently evaluating the effect of this pronouncement
on the consolidated financial statements.
In
September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
employer to recognize the over funded or under funded status of a defined
benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income of a business entity or changes in unrestricted net assets of a
not-for-profit organization. This Statement also improves financial reporting by
requiring an employer to measure the funded status of a plan as of the date of
its year-end statement of financial position, with limited exceptions. An
employer with publicly traded equity securities is required to initially
recognize the funded status of a defined benefit postretirement plan and to
provide the required disclosures as of the end of the fiscal year ending after
December 15, 2006. An employer without publicly traded equity securities is
required to recognize the funded status of a defined benefit postretirement plan
and to provide the required disclosures as of the end of the fiscal year ending
after June 15, 2007. However, an employer without publicly traded equity
securities is required to disclose the following information in the notes to
financial statements for a fiscal year ending after December 15, 2006, but
before June 16, 2007, unless it has applied the recognition provisions of this
Statement in preparing those financial statements:
1. A
brief description of the provisions of this Statement
2. The
date that adoption is required
3. The
date the employer plans to adopt the recognition provisions of this Statement,
if earlier.
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
The
requirement to measure plan assets and benefit obligations as of the date of the
employer’s fiscal year-end statement of financial position is effective for
fiscal years ending after December 15, 2008. The management is currently
evaluating the effect of this pronouncement on the consolidated financial
statements.
In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities, including an amendment of FASB Statement No.
115" ("SFAS No. 159"). SFAS No. 159 permits entities to choose, at specified
election dates, to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value.
Unrealized gains and losses shall be reported on items for which the fair value
option has been elected in earnings at each subsequent reporting date. SFAS No.
159 is effective for fiscal years beginning after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year that begins on or
before November 15, 2007, provided the entity also elects to apply the
provisions of SFAS No. 157 "Fair Value Measurements" ("SFAS No. 157"). The
Company is currently assessing the impact that SFAS No. 159 will have on its
financial statements.
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”, which is an amendment of Accounting Research
Bulletin (“ARB”) No. 51. This statement clarifies that a
noncontrolling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. This statement changes the way the consolidated
income statement is presented, thus requiring consolidated net income to be
reported at amounts that include the amounts attributable to both parent and the
noncontrolling interest. This statement is effective for the fiscal
years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. Based on current conditions, the Company does not
expect the adoption of SFAS 160 to have a significant impact on its results of
operations or financial position.
In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations.” This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
SFAS 141 that the acquisition method of accounting (which SFAS 141 called
the purchase method) be used for all business combinations and for an acquirer
to be identified for each business combination. This statement defines the
acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as the date that the
acquirer achieves control. This statement requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the statement. This statement applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. The Company does not expect the adoption of SFAS 160 to have
a significant impact on its results of operations or financial
position.
In March,
2008, the FASB issued FASB Statement No. 161, “Disclosures about Derivative
Instruments and Hedging Activities”. The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The new standard also improves transparency about the location and
amounts of derivative instruments in an entity’s financial statements; how
derivative instruments and related hedged items are accounted for under
Statement 133; and how derivative instruments and related hedged items affect
its financial position, financial performance, and cash flows.
FASB
Statement No. 161 achieves these improvements by requiring disclosure of the
fair values of derivative instruments and their gains and losses in a tabular
format. It also provides more information about an entity’s liquidity by
requiring disclosure of derivative features that are credit risk–related.
Finally, it requires cross-referencing within footnotes to enable financial
statement users to locate important. Based on current conditions, the Company
does not expect the adoption of SFAS 161 to have a significant impact on its
results of operations or financial position.
2.
Discontinued operations
On
December 31, 2007, the Company closed the transactions contemplated under the
Securities Exchange Agreement dated October 31, 2007 with Landbank Acquisition
LLC and Family Products LLC, a member of Investor, who is a party to the
Agreement for the limited purpose of providing indemnification to the Company
there under. At the time the Agreement was executed, and immediately
prior to the closing of the transaction contemplated therein, Investor was the
owner of 55% of the Company’s outstanding capital stock.
Pursuant
to the Agreement, the following transactions occurred at the
closing: (1) the Company transferred ownership of LLC to Investor,
(2) the Company issued 79,311,256 new shares of common stock to Investor to
increase Investor’s current equity holdings in Company of approximately
fifty-five percent (55%) to approximately ninety-five percent (95%), (3)
Investor agreed to provide full indemnity to Company for LLC’s prior operations
and liabilities, (4) LLC assigned $500,000 in debt to Company owed to
Investor, (5) LLC retained approximately$500,000 in debt owed to third parties
and approximately $2.5 million in debt owed to Investor, and (6) the Company
retained approximately$5,000 in cash for the Company’s working
capital.
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
In
connection with the Note Transfer, the Company entered into a note assignment
with LLC and Investor and issued a promissory note to Investor in the principal
amount of $500,000.
Investor
and the Company also entered into a Registration Rights Agreement between them
at the closing (the “Registration Rights Agreement”) pursuant to which the
Investor received certain demand and piggyback registration rights with respect
to the shares received in the Share Issuance.
The
consummation of the Transactions was subject to the receipt of customary closing
conditions, each of which occurred prior to the closing, including approval of
the LLC Transfer by the Corporation’s stockholders and the amendment of the
Company’s Certificate of Incorporation to change the name of the Company and to
increase the number of authorized shares of Common Stock from 100,000,000 to
2,000,000,000.
Included
in the income/(loss) from discontinued operations for the years ended December
31, 2007 and 2006, are revenues of $2,123,080 and $4,556,266, respectively, and
net loss from discontinued operations of $874,700 and 345,424,
respectively. As the subsidiary was transferred to a related party
(Landbank Acquisition, LLC being 55% shareholder before acquisition) no gain or
loss was recorded on the disposal of Landbank, LLC.
The
components of loss from operations related to the entity held for disposal for
the year ended December 31, 2007 are shown below.
|
|
|
Years
ended December 31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
|
$ |
2,123,080 |
|
|
$ |
4,556,266 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenue
|
|
|
1,737,742 |
|
|
|
2,167,652 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
385,338 |
|
|
|
2,388,614 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Professional
fees
|
|
|
139,531 |
|
|
|
300,889 |
|
|
General
& administrative expenses
|
|
|
916,831 |
|
|
|
2,254,246 |
|
|
Total
operating expenses
|
|
|
1,056,362 |
|
|
|
2,555,134 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
|
(671,024 |
) |
|
|
(166,520 |
) |
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expenses
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
17,111 |
|
|
|
7,967 |
|
|
Interest
expense
|
|
|
(218,387 |
) |
|
|
(185,478 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss before income tax
|
|
|
(872,300 |
) |
|
|
(344,032 |
) |
|
|
|
|
|
|
|
|
|
|
|
Provision
for income taxes
|
|
|
2,400 |
|
|
|
1,392 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss from Discontinued Operations
|
|
|
(874,700 |
) |
|
|
(345,424 |
) |
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
3.
Acquisition of LandBank, LLC
On
January 26, 2006, Landbank Group, Inc. acquired all of the membership interests
in Landbank, LLC in exchange for the transfer, by certain members of the
previous management, of an aggregate of 8,200,000 shares of Landbank Group,
Inc.’s stock (post-split), in exchange for which such members of previous
management received Landbank Group, Inc.’s former wholly-owned subsidiary,
iStorage Networks Group, Inc., and $140,000 in cash. The financial statements of
the legal acquirer (the Company) are not significant; therefore, no pro forma
financial information is being submitted.
On
December 31, 2007, the Company executed a Demand Promissory Note (the “Note”)
payable to Landbank Acquisition LLC, $500,000 with simple interest on the unpaid
principal from the date of the note at the rate of eight percent (8%) per
annum. The Note is due on demand. This Note was being delivered in
connection with the LLC Transfer as described in Note 2.
5.
Stockholders’ Deficit
Common
Stock Issued
During
the year ended December 31, 2007, the Company issued 79,311,256 in connection
with the Securities Exchange Agreement dated October 31, 2007 as described in
Note 2 and 93,333 shares for service valued at $84,000 at the time of
issuance. During the year ended December 31, 2006, the Company issued
624,445 shares for service valued at $374,667 at the time of
issuance.
Common
Stock to be issued
Pursuant
to the terms of its agreement with Aurelius Consulting Group, Inc. (also see
note 8), the Company is to issue shares worth $12,000 per month to Aurelius as
compensation for services provided. During the three month period ended December
31, 2006, the Company recorded $48,000 in shares to be issued for services
provided. The additional month of expense was to reconcile the eight (8) monthly
installments with the term of the agreement, which was May 2006 through December
2006. Common stock to be issued, which totaled $84,000 as of December 31, 2006,
has been reflected as a liability in the accompanying consolidated financial
statements.
Stock
Split
On March
3, 2006, the Company obtained written consent from stockholders holding a
majority of the Company’s outstanding shares of voting securities to authorize a
reverse split of the Company’s outstanding common stock.
6.
Related-party transactions
The LLC
paid a royalty to a related company equal to 35% of gross profit received by the
LLC on each all-cash sale generated by leads provided by that related company.
Gross profit was defined as land sale revenue reduced by inventory cost, sales
commissions, credit card merchant fees, and deed of trust transfer costs. The
related company is Landbank Acquisition, LLC, a private entity owned 100% by former directors,
officers, and principal stockholders of the
Company.
John
Beck, a former director of the Company and currently a principal stockholder of
the Company, received a profit participation of 50% of the royalty payments
received by one of the related companies, pursuant to its royalty agreement with
LLC, for his services to that related company. During the years ended December
31, 2007 and 2006, the Subsidiary recorded royalty expense to related parties of
$173,338 and $ 668,158, respectively.
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
On
September 12, 2007, the Company terminated its agreement with Investment Capital
Researchers, Inc. (“ICR”), a Company owned by Stephen Weber, a former member of
the Company’s Board of Directors. Pursuant to the termination agreement, ICR
will keep the 200,000 shares (post-split) of the Company’s common stock that it
was issued on June 30, 2006 but will not be entitled to any future compensation
of any nature. In return, the Company has relieved ICR of any future obligations
relating to the original agreement dated August 1, 2005 and amended on June 27,
2006. Pursuant to the original agreement, ICR received 200,000 shares
(post-split) of the Company’s common stock on June 30, 2006 and was to receive
an additional 200,000 shares of the Company’s common stock (post-split) upon the
achievement of specified milestones. All shares issued pursuant to this
agreement were to be restricted securities. The 200,000 shares issued on June
30, 2006 were valued at $120,000 based on fair value of the shares at the time
of issuance. The Company expensed the entire $120,000 as non-cash consulting
fees during the six month period ended June 30, 2006,
The
Company shared its
principal office in Van Nuys and its offices in both American Fork and Alameda
with related parties. The Company did not pay rent for
its Van Nuys and American Fork facilities, but, if it were required to pay rent
on these facilities, the Company estimates the combined monthly rent value being
approximately $1,200, which the Company deems as not material. The related
parties are companies owned and controlled by Doug Gravink and Gary Hewitt, both
of whom are former directors and officers of the company and former principal
stockholders of the Company. The Company's office in Phoenix, Arizona was
subleased from a related company that is also owned by Doug Gravink and Gary
Hewitt. Under the terms of the sublease arrangement, the Company paid a pro-rata
share of the rent paid by the related company, based upon the portion of the
space occupied by the Company. During the years ended December, 2007 and 2006,
LLC recorded related party rent expense totaling $35,077 and $22,226,
respectively.
On
December 22, 2006, LLC entered into a lease for approximately 1,200 square feet
of office space in Alameda, California. The lease was for a term of twenty-five
(25) months, commencing January 1, 2007. Per the terms of the lease, the first
month was rent-free, with a base rent of $2,295 per month for months two (2)
through twelve (12) and $2,366 per month for months thirteen (13) through
twenty-five (25). LLC was also responsible for paying its pro-rated share of
certain expenses, such as property taxes. The monthly rent and related expenses
for the Alameda office were to be allocated to both LLC and its affiliate,
Mentoring of America, LLC (“MAC”), with each company paying 50% of the expenses
associated with maintaining this office.
A
director of the Company has, through his accounting firm, provided accounting
service to LLC. The Subsidiary recorded related party accounting expense
totaling $7,483 during the year ended December 31, 2007. LLC incurred $126,805
in related party accounting expense during the same period in fiscal year
2006.
7.
Commitments
As of
December 31, 2007, the Company does not have any future
commitments.
8.
2006 Stock Incentive Plan
On August
10, 2007, the Company terminated all of its option grants, which consisted of
grants to four (4) of the Company’s five (5) Board members and its Chief
Financial Officer. At the time of termination, none of the options had been
exercised and the Company had recorded $55,570 as compensation expense relating
to these options, of which $25,934 was recorded in fiscal year 2006 and the
remaining $29,636 during the year ended December 31, 2007. Upon the termination
of these options, the Company (1) will no longer be recording any compensation
expense relating to these options, and (2) has no other option and/or warrants
of any kind outstanding.
The
following information pertains to the above-mentioned options that were
terminated on August 10, 2007:
On
November 2, 2006, the Board of Directors adopted, by written consent, the 2006
Stock Incentive Plan (“the Plan”). On November 9, 2006, the adoption of the Plan
was approved and ratified by written consent signed by the holders of a majority
of the Company’s stock. Per the terms of the Plan, the Company is authorized to
reserve 3,000,000 shares of the Company’s authorized and unissued shares of
common stock for issuance pursuant to the Plan.
On March
13, 2007, the Company granted an option to its Chief Financial Officer (“CFO”)
to purchase 100,000 shares of the Company’s common stock at an exercise price of
$0.02 per share. The option vests over a four (4) year period, with 25 % vesting
of the shares vesting on March 12, 2008 and the remaining shares vesting at
1/48th per month thereafter until the option is vested and exercisable with
respect to 100% of the shares. The term of the option is ten (10) years, with an
expiration date of March 12, 2017. The option grant was valued at $2,000 as of
the date of grant using the Black-Sholes option pricing model in accordance with
FAS 123R using the following assumptions: volatility of 646.99%, Wall Street
Journal prime interest rate of 8.25%, zero dividend yield, and an expected life
of four (4) years. The Company expensed the entire $2,000 value of the option
during the three month period ended March 31, 2007.
TRIST
HOLDINGS, INC.
NOTES
TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND
2006
On
December 28, 2006, the Company granted options to two of its Directors, one of
whom is the Company’s Chief Executive Officer and the other the President, in
consideration of their service as Directors of the company. Each Director was
granted an option to purchase 100,000 shares of common stock at an exercise
price of $0.12 per share, the fair value of the Company’s common stock on the
date of grant, in consideration of their service as a director of the company.
Each option grant was valued at $11,681 as of the date of grant using the
Black-Sholes option pricing model in accordance with FAS 123R using the
following assumptions: volatility of 191.06%, risk free interest rate of 4.69%,
dividend yield of zero, and expected life of five (5) years. Each of the options
vests as follows: 50% of the shares subject to each option would vest upon
achievement of a specified performance goal related to the Company’s stock price
and the remainder will vest on a quarterly basis thereafter at a rate of 25% per
quarter. The options would not vest and would expire in the event that the
performance goal is not achieved within the timeframe specified by the goal. The
term of the option, and the implied service condition, was one year from the
date of grant, so the Company began expensing the value of these options, $1,948
per month ($974 per option), over the twelve-month term beginning in December
2006. Accordingly, the Company recorded $11,688 in expense relating to these
option grants during the six month period ended June 30, 2007.
On
November 9, 2006, the Company granted options to each of its two independent
directors to acquire 1,200,000 shares (600,000 shares per director) of the
Company’s common stock pursuant to the Plan. Each option grant was valued at
$59,963 ($119,926 in the aggregate) as of the date of grant using the
Black-Sholes option pricing model in accordance with FAS 123R using the
following assumptions: volatility of 125.95%, risk free interest rate of 4.60%,
dividend yield of zero, and expected life of five (5) years. The options vest as
follows: 20% of the shares subject to each option vested on December 31, 2006
and 20% of the shares subject to each option vest each year thereafter. During
the year ended December 31, 2006, the Company recorded $23,986 of compensation
based on the fair value method under FAS 123R and is expensing the remaining
value of the options at the rate of $2,000 per month until the entire $119,926
has been expensed. The Company expensed $12,000 in relation to these options
during the six month period ended June 30, 2007.
The
Company adopted SFAS No. 123-R effective November 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense recognized in the year ended December 31, 2006 includes compensation
expense for all stock-based compensation awards granted on or after
November 1, 2006, based on the grant-date fair value estimated in
accordance with the provisions of SFAS No. 123-R.
9.
Going Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
company as a going concern. However, the Company has an accumulated deficit of
$2,254,577 as of December 31, 2007, including a net loss of $1,055,507 for the
year ended December 31, 2007. The Company’s total liabilities exceeded its total
assets by $491,259 as of December 31, 2007. In view of the matters described
above, recoverability of a major portion of the recorded asset amounts shown in
the accompanying consolidated balance sheet is dependent upon the Company’s
ability to raise additional capital, obtain financing and succeed in seeking out
suitable candidates for a business combination with a private company. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.
Furthermore,
the principal shareholder, Landbank Acquisition LLC has demonstrated its ability
and willingness to lend working capital to the Company and committed to doing so
into the future. To the extent it is unwilling to provide working capital, the
Company will not be able to continue.