ITEM 1. Business
Form and Year of Organization
The Registrant consists of TGFIN Holdings, Inc. (non-operating parent
corporation) and its sole and wholly-owned operating subsidiary,
TradinGear.Com, Incorporated (combined, the "Company"). TGFIN Holdings, Inc.
was incorporated under the laws of Delaware in March 1985 as Mark, Inc. From
March 1992 to September 12, 2002 TGFIN Holdings, Inc. was known as Digitran
Systems, Incorporated ("DSI").
On September 12, 2002 DSI acquired TradinGear.com, Incorporated in a
reverse merger whereby the shareholders of TradinGear.com, Incorporated
acquired control of DSI and (effective September 13, 2002) changed its name to
TGFIN Holdings, Inc.; at which time, TradinGear.com, Incorporated
(incorporated under the laws of the State of Delaware on July 7, 1999) became
the operating subsidiary of TGFIN Holdings, Inc. TGFIN Holdings, Inc. sold the
assets of Tradingear.com Incorporated effective March 31, 2003.
BUSINESS OF TRADINGEAR.COM, INCORPORATED: These policies were applicable to
the TradinGear.com business until its operations were discontinued on March
31, 2003 and are maintained until such time as TGFIN Holdings, Inc. merges
with another operating entity.
Principal products or services and their markets
The Company's software technology was designed to offer its customers an
on-line electronic system for securities trading. The Company originally
targeted three markets within the financial services industry and developed
core products for each: broker dealers, fund managers and exchanges. The
broker dealer and fund manager markets were targeted first due to their
comparatively more desirable market characteristics (i.e. larger market size,
more potential customers, etc.) Nevertheless, market response by the exchange
market ultimately encouraged management to favor advanced development of
exchange market products.
Marketing and Distribution methods
Located in the financial district in New York City, NY the Company
relied upon direct contact with its potential customers, and referrals
generated from those contacts, for additional potential customers. The
Company's products were always delivered directly and were not offered through
distributors or sales representatives.
Competitive business conditions
The Company competed in a market dominated by a few large, established
competitors. These competitors enjoyed the advantages of long-standing
relationships; legacy integration of, and attachment to, their systems; name
recognition and the financial resilience afforded by long-term contracts. The
Company tried to counter its competitive disadvantages by delivering products,
designed in accordance with customer specifications, more quickly than its
competitors. Nevertheless, the Company's lack of financial resources greatly
strained its ability to exploit any competitive advantage it may have gained.
Patents, Copyrights and Trademarks
The Company owned the trademark: "Trade Virtually Anywhere" and owned the
rights to its internally-developed proprietary products. Effective March 31,
2003, the Company sold the rights to its exchange trading platform "TGFIN/X".
Research and Product Development
The company spent no resources on research and project development in
2008 and 2007.
Employees
As of December 31, 2008 and 2007, the Company had one full-time employee
and two part time employees. The Company is not a party to any collective
bargaining agreements.
REPORTS TO SECURITY HOLDERS
The Company files with the SEC an annual report on Form 10-K, quarterly
reports on Form 10-Q, and information reports on Form 8-K and other reports
as required by law. The investing public may read and copy any materials the
company files with the SEC at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
The Company files its reports electronically. The SEC maintains an Internet
site that contains reports, proxy and information statements and other
information regarding issuers, such as ourselves, that file electronically
with the SEC at (http://www.sec.gov.)
ITEM 1A.
ITEM 1A. Risk Factors.
As a smaller reporting company, we are not required to provide risk factors.
ITEM 2
ITEM 2 Properties.
The company leases approximately 900 square feet of office space at 1517
North 260 East in North Logan, Utah for an annual rate of approximately
$9,840. The company has no ownership in real estate or buildings. The
company's lease is on a month-to-month basis and requires monthly lease
payments of $820.
ITEM 3
ITEM 3 Legal Proceedings.
In the normal course of business, there may be various legal
actions and proceedings pending which seek damages against the Company. As of
December 31, 2008 there were no claims asserted or threatened against
the Company.
ITEM 4
ITEM 4 Submission of Matters to a Vote of Security Holders.
None
PART II
ITEM 5
ITEM 5 Market for Registrant’s Common Equity, Related stockholder Matters and Issuer Purchases of Equity Securities.
The Company's common shares trade on the Electronic Bulletin Board of the
National Association of Securities Dealers, Inc. under the symbol "TGFN.OB".
The following table shows, for the calendar periods indicated, the range of
reported high and low bid quotations for those shares. Such prices reflect
inter dealer prices, without retail markup, mark down or commission and may
not necessarily represent actual transactions.
High Close Low Close High Close Low Close
1st Quarter .05
.03
.08 .01
2nd Quarter .05 .03 .07 .05
3rd Quarter .04 .03 .07 .04
4th Quarter .07 .01 .05 .03
Shareholders
As of December 31, 2008, the Company had 807 record holders of its
Common Stock, and 14 record holders of its Series 1, Class A 8% Cumulative
Convertible Preferred Stock (the Preferred Stock) as reflected on the books of
the Company's transfer agent.
Dividends
The Company had not paid any dividends on its Common Stock and the Board
of Directors of the Company presently intends not to declare dividends, but to
pursue a policy of retaining earnings, if any, for use in the Company's
operations and to finance expansion of its business. The declaration and
payment of dividends in the future on the Common Stock will be determined by
the Board of Directors in light of conditions then existing, including the
Company's earnings, financial condition, capital requirements and other
factors. In addition, as noted below, the Company is in arrears in the payment
of dividends on its Preferred Stock.
Holders of preferred shares are entitled to cumulative dividends of 8%
per annum on the stated value of the stock, designated at $7 per share.
Dividends are payable semi-annually on September 15 and March 15. No
dividends have been paid since March 15, 1993, resulting in dividends in
arrears at December 31, 2008 of approximately $438,340 or $8.68 per share.
Dividends are not payable on any other class of stock ranking junior to the
preferred stock until the full cumulative dividend requirements of the
preferred stock have been satisfied. There are not sufficient preferred shares
(left unconverted) to trade publicly and the financial condition of the
company has made the probability of dividend payment to preferred shareholders
unlikely.
Securities authorized for issuance under equity compensation plans.
None
Description of Securities
Common Stock
The authorized capital stock of the Company consists of 50,000,000 shares
of common stock, par value $.01 per share, of which 23,020,845 were
outstanding as of December 31, 2008. Holders of common stock are entitled to
one vote per share.
Preferred Stock
The Series 1 Class A 8% Cumulative Convertible Preferred Stock has
a par value of $0.01 per share. As of December 31, 2008 there were 50,500
shares outstanding.
The preferred stock carries a liquidation preference equal to its stated
value plus any unpaid dividends. Holders of the preferred stock are entitled
to one-tenth of a vote for each share of preferred stock held. The Company
may, at its option, redeem at any time all shares of the preferred stock or
some of them upon notice to each preferred stockholder at a per share price
equal to the stated value ($7.00) plus all accrued and unpaid dividends
thereon (whether or not declared) to the date fixed for redemption, subject to
certain other provisions and requirements. Preferred Shares may be converted
into Common Shares on a one share of Preferred Stock for two shares of Common
Stock basis.
ITEM 6.
ITEM 6. Selected Financial Data.
Not required for smaller reporting issuers.
ITEM 7.
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the
Consolidated Financial Statements and notes thereto. See "ITEM 8 FINANCIAL
STATEMENTS".
Management's Discussion and Analysis:
The following discussion should be read in conjunction with the
consolidated historical financial statements of the Company and related notes
thereto included elsewhere in this Form 10-K for the year ended December 31,
2008. This discussion contains forward-looking statements regarding the
business and industry of the Company within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based on the
current plans and expectations of the Company and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the forward-
looking statements. The information set forth and discussed below for the
years ended December 31, 2008 and December 31, 2007 was derived from the
consolidated financial statements included elsewhere herein.
RESULTS OF OPERATIONS
2008 VERSUS 2007
Operating costs for the year ended December 31, 2008 of $465,707
increased $42,089, or 10%, over those of the year ended December 31, 2007
of $423,618 due primarily to: an increase in travel and meals and entertainment expense of $31,564, or 83% in 2008 versus 2007 due to increased incidences of off-site due diligence and increased efforts to find suitable merger candidates, an increase in legal and professional expenses of $5,731, or 13.3% related to compliance with The Sarbanes-Oxley Act of 2002, and an increase in office expenses of $6,426, or 142% in 2008 due to the timing of purchases of software and hardware upgrades and supplies.
Interest income declined $14,803, or 60%, in 2008 versus 2007 due to lesser amounts invested.
Liquidity and Capital Resources:
At its current level of operations, the Company will need to begin profitable operations and or raise additional capital during the next fiscal year.
There were no capital expenditures in 2008 and none are planned for 2009
as long as the Company continues at its current level of operations. Capital
expenditures could be made in conjunction with a business combination or
investment.
CURRENT PLAN OF OPERATIONS
Management's Plans are to acquire, merge or otherwise combine with an
operating company. Management is currently seeking an entity with which to
affiliate. The Company is free to seek alternative businesses in its existing
or other industries. Management's main objective is to seek to increase
shareholder value. All viable alternatives will be evaluated, including, but
not limited to: investments, mergers, purchases, or the offering of Company
securities, etc. Alternatives that provide existing shareholders with the
greatest potential benefit will be favored.
As of the date of this report, management had carefully evaluated several
potential affiliation candidates. To date, no formal or informal agreement
has been reached with respect to any potential candidate, although some
evaluations are currently still in progress. Until a suitable business
opportunity presents itself, the Company intends for its resources to continue
to be invested primarily in interest bearing accounts.
Management encourages its shareholders to communicate directly with the
Company for its typical investor relations, including address changes and for
general corporate information by calling or writing to the Company at its
administrative offices or by posting a message to tradingear@comcast.net.
Management also encourages shareholders to keep their address current with the
Company.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This annual report includes forward looking statements which involve
risks and uncertainties. Such statements can be identified by the use of
forward-looking language such as "will likely result", "may", "are expected
to", "is anticipated", "estimate", "believes", "projected", or similar words.
All statements, other than statements of historical fact included in this
section, are forward-looking statements. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable,
it can give no assurance that such expectations will prove to have been
correct. The Company's actual results could differ materially from those
anticipated in any such forward-looking statements as a result of various
risks, including, without limitation, the dependence on a single line of
business; the failure to close proposed financing; rapid technological change;
inability to attract and retain key personnel; the potential for significant
fluctuations in operating results; the loss of a major customer; and the
potential volatility of the Company's common stock.
ITEM 7A.
ITEM 7A. Quantitative and Qualitative disclosure about Market Risk.
Not required for smaller reporting companies.
ITEM 8.
ITEM 8. Financial statements and Supplementary Data
The Consolidated Financial Statements are filed as part of this Annual
Report on Form 10-K.
TGFIN HOLDINGS, INC.
{A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008 AND 2007
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
TGFIN Holdings, Inc.
(A Development Stage Company)
North Logan, Utah
We have audited the accompanying balance sheets of TGFIN Holdings, Inc. (a development stage company) as of December 31, 2008 and 2007, and the related statements of operations, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2008, and from inception of the development stage on April 1, 2003 through December 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 TGFIN Holdings, Inc. (a development stage company) as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2008, and from inception of the development stage on April 1, 2003 through December 31, 2008, in conformity with U.S. generally accepted accounting principles.
We were not engaged to examine management's assertion about the effectiveness of TGFIN Holdings, Inc.'s (a development stage company) internal control over financial reporting as of December 31, 2008 included in “Management’s Report on Internal Control Over Financial Reporting” and, accordingly, we do not express an opinion thereon.
As discussed in Note 6 to the financial statements, the Company's recurring losses from operations raises substantial doubt about its ability to continue as a going concern. (Management's plans as to these matters are also described in Note 6.) The 2008 and 2007 financial statements do not include any adjustments that might result from the outcome of this uncertainty.
(/s/ HJ & Associates, LLC)
HJ & Associates, LLC
Salt Lake City, Utah
March 25, 2009
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
------------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 316,795 $ 767,349
Prepaid expenses 14,135 14,506
----------- ------------
Total Current Assets 339,930 781,855
Property and equipment, net - -
Deposits
------------ ------------
Total Assets $ 331,430 $ 782,355
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,380 $ 13,201
Accrued expenses - -
------------ ------------
Total Current Liabilities 5,380 13,201
------------ ------------
Stockholders' Equity:
Preferred stock ($0.01 par value
8% cumulative preferred stock,
1,000,000 shares authorized,
50,500 shares issued and
outstanding as of December 31,
and 2007 respectively) 506
Common stock ($.01 par value,
50,000,000 shares authorized,
23,020,845 and 22,720,845 shares
issued and outstanding at
December 31, 2008, and 2007
respectively) 230,208 227,208
Additional paid-in-capital 3,775,783 3,765,908
Retained deficit prior to
development stage (1,077,064) (1,077,064)
Retained deficit during
development stage (2,603,383) (2,147,404)
------------ ------------
Total Stockholders' Equity 326,050 769,154
------------ ------------
Total Liabilities and
Stockholders' Equity $ 331,430 $ 782,355
============ ============
These accompanying notes are integral part of these consolidated financial
statements.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
From
Inception
Of the
Development
For the Stage on
Years Ended April 1,
December 31, To
December 31, 2008
REVENUES $ - $ - $ -
---------- ----------- ----------
OPERATING COSTS 465,707 423,618 2,739,368
---------- ----------- ----------
OPERATING LOSS (465,707) (423,618) (2,739,368)
---------- ----------- ----------
OTHER INCOME:
INTEREST INCOME 9,728 24,530 135,985
---------- ----------- ----------
TOTAL OTHER INCOME 9,728 24,530 135,985
---------- ----------- ----------
NET LOSS $ (455,979) $ (399,088) ($2,603,383)
========== =========== ==========
BASIC AND
DILUTED LOSS
PER SHARE: $ (.02) $ (.02)
========== ===========
Weighted Average
Number of shares
Outstanding 22,878,996 22,658,790
========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Preferred Stock Common Stock
Par Value $.01 Par Value $.01
------------------------ -----------------------
Preferred Common
Number Stock Number Stock
of shares Amount of shares Amount
------------ --------- ------------ ---------
Balances April 1, 2003 50,500 $ 506 22,431,168 $ 224,312
Net loss from operations
for nine months ended
December 31, 2003 - - - -
----------- ---------- ---------- ----------
Balances December 31, 2003 50,500 506 22,431,168 224,312
Common stock issued for
accrued liabilities - - 273,010 2,730
Common stock issued
for compensation - - 200,000 2,000
Net loss from operations
for year ended December
31, 2004 - - - -
----------- ---------- ---------- ----------
Balances December 31, 2004 50,500 506 22,904,178 229,042
Common stock issued for
compensation 200,000 2,000
Retirement of shares in
settlement of countersuit (883,333) (8,834)
Net loss from operations
for year ended December
31, 2005 ------------ ---------- ----------- ---------
Balances December 31, 2005 50,500 506 22,220,845 222,208
Common stock issued for
compensation - - 175,000 1,750
Common Stock issued to
prior shareholders - - 150,000 1,500
Net loss from operations
for year ended December
31, 2006 - - - -
------------ ---------- ----------- ---------
Balances December 31, 2006 50,500 506 22,545,845 225,458
Common stock issued for
compensation - - 175,000 1,750
Net loss from operations
for year ended December
31, 2007 - - - -
------------ ---------- ----------- ---------
[Continued]
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Continued)
Additional Retained Total
Paid-in Earnings Stockholders'
Capital (Deficit) Equity
Balances April 1, 2003 $3,637,824 $(1,077,064) $ 2,785,578
Net loss from operations
for nine months ended
December 31, 2003 - (375,708) (375,708)
---------- ---------- ----------
Balances December 31, 2003 3,637,824 (1,452,772) 2,409,870
Common stock issued for
accrued liabilities 48,500 - 51,230
Common stock issued
for compensation 17,500 - 19,500
Net loss from operations
for year ended December
31, 2004 - (457,544) (457,544)
---------- ---------- ----------
Balances December 31, 2004 3,703,824 (1,910,316) 2,023,056
Common stock issued for
compensation 15,500 - 17,500
Retirement of shares in
settlement of countersuit 8,834 - -
Net loss from operations
for year ended December - (508,742) (508,742)
31, 2005
---------- --------- ----------
Balances December 31, 2005 3,728,158 (2,419,058) 1,531,814
Common stock issued for
compensation 13,000 - 14,750
Issuance of shares to
prior shareholders 15,000 - 16,500
Net loss from operations
for year ended December
31, 2006 - (406,322) (406,322)
----------- ---------- ----------
Balances December 31, 2006 3,756,158 (2,825,380) 1,156,742
Common stock issued for
compensation 9,750 - 11,500
Net loss from operations
for year ended December
31, 2007 - (399,088) (399,088)
----------- ---------- ----------
Balances December 31, 2007 3,765,908 (3,224,468) 769,154
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Preferred Stock Common Stock
Par Value $.01 Par Value $.01
------------------------ -----------------------
Preferred Common
Number Stock Number Stock
of shares Amount of shares Amount
------------ --------- ------------ ---------
Balances December 31, 2007 50,500 506 22,720,845 227,208
Common stock issued for
compensation - - 300,000 3,000
Net loss from operations
for year ended December
31, 2008 - - - -
------------ ---------- ----------- ----------
Balances December 31, 2008 50,500 $ 506 23,020,845 $ 230,208
========== ========== =========== ==========
[continued]
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Continued)
Additional Retained Total
Paid-in Earnings Stockholders'
Capital (Deficit) Equity
Common stock issued for
compensation 9,875 - 12,875
Net loss from operations
for year ended December
31, 2008 - (455,979) (455,979)
----------- ---------- ----------
Balances December 31, 2008 $ 3,775,783 $(3,680,447) $ 326,050
=========== ============ ==========
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
From
Inception
Of the
Development
For the Stage on
Years Ended April 1, 2003
December 31, To
December 31, 2008
---------- ---------- -----------
Cash Flows from
Operating activities:
Net Loss $ (455,979) $ (399,088) $ (2,603,383)
Adjustments to reconcile
Net loss to net cash
used in operating
activities:
Amortization of deferred
compensation - - 13,751
Compensation costs of
common stock issued
to employees and consultants 12,875 11,500 127,355
Cost of common stock issued
to shareholders - - 16,500
Changes in assets and
liabilities
Decrease (increase) in:
Accounts receivable - 31,250
Prepaid expenses (14,442)
Deposits - - (500)
Increase (decrease)in:
Accounts payable and
accrued expenses (7,821) 11,171 (222,113)
---------- ---------- ----------
Net cash used in Operating
Activities (450,554) (390,859) (2,636,523)
---------- ---------- ----------
Net cash provided by
investing activities - - -
---------- ---------- ----------
Net cash from financing
Activities - - -
---------- ---------- ----------
Net Decrease
in Cash and Cash
Equivalents (450,554) (390,859) (2,636,523)
Cash and Cash Equivalents,
beginning of year 767,349 1,158,208 2,953,318
---------- ---------- ----------
Cash and Cash Equivalents,
end of year 316,795 $ 767,349 $ 316,795
========== ========== ==========
These accompanying notes are an integral part of these consolidated financial
statements.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
From
Inception
Of the
Development
For the Stage on
Years Ended April 1,
December 31, To
December 31, 2008
Cash paid during
the period for:
Income Taxes $ - $ - $ 12,609
========== ========== ==========
Interest $ - $ - $ -
========== ========== ==========
Supplemental Disclosures
of Non-cash Investing and
Financing Activities:
Common stock issued
For accrued liabilities $ - $ - $ 51,230
========== ========== ==========
Common stock issued to
Prior Shareholders $ - $ 16,500 $ 16,500
========== ========== ==========
These accompanying notes are an integral part of these consolidated financial
statements.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
The Company consists of TGFIN Holdings, Inc. ("TGFIN") and its sole and
wholly-owned operating subsidiary, TradinGear.Com, Incorporated
("TradinGear"), together , the "Company". TGFIN was incorporated under the
laws of Delaware in March 1985 (originally as Mark, Inc.). TradinGear.com,
Incorporated was incorporated under the laws of the State of Delaware on July
7, 1999.
On September 12, 2002, TGFIN, formerly Digitran Systems, Incorporated
("Digitran", a publicly held Delaware corporation) acquired
TradinGear, in a reverse merger("merger"), whereby the shareholders of
TradinGear acquired control of Digitran. The provisions of the Merger included
a post-merger name change in which Digitran became TGFIN Holdings, Inc. Former
Digitran common stock shareholders exchanged their shares for TGFIN Holdings,
Inc. common stock shares on a 21-to-1 reverse split basis; former Digitran
common stock Class B shareholders exchanged their shares for TGFIN Holdings,
Inc. common stock shares on a 20-to-1 reverse split basis; and former
TradinGear.com, Incorporated common stock shareholders exchanged their shares
for TGFIN Holdings, Inc. common stock shares on a 1-to-1 basis.
Principles of Consolidation
The accompanying financial statements consolidate the accounts of the parent
company and its wholly-owned subsidiary. All significant inter-company
accounts and transactions have been eliminated in consolidation. The
financial statements reflect the consolidation of Digitran's Balance Sheet as
of September 12, 2002, the date of the merger.
Fair Value of Financial Instruments
Carrying amounts of certain of the Company's financial instruments, including
cash and cash equivalents, trade receivables, accounts payable and other
accrued liabilities, approximate fair value because of their short maturities.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Management's Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investments
The Company accounts for its investments in debt and equity securities in
accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (SFAS 115),
which requires that investments in debt securities and marketable equity
securities be designated as trading, held-to-maturity or available-for-sale.
Management determines the appropriate classification of its investments in
debt and equity securities at the time of purchase and reevaluates such
determinations at each balance sheet date. Debt securities for which the
Company does not have the intent or ability to hold to maturity are classified
as available for sale, along with any investments in equity securities.
Securities available for sale are carried at fair value, with unrealized gains
and losses, net of income taxes, reported as a separate component of
Stockholders' Equity.
Property and Equipment
Property and equipment are recorded at cost and depreciated for
financial accounting purposes on the straight-line method over their
respective estimated useful lives ranging from three to thirty-nine years.
Upon retirement or other disposition of these assets, the cost and related
accumulated depreciation are removed from the accounts and the resulting gains
or losses are reflected in the results of operations.
Expenditures for maintenance and repairs are charged to operations. Renewals
and betterments are capitalized. Depreciation of leased equipment under
capital leases is included in depreciation.
Impairment of Long-Lived Assets
The Company adopted Statement of Financial Accounting Standards No. 144 (SFAS
144), "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS
144 SFAS 144 develops one accounting model (based on the model in SFAS 121)
for long-lived assets that are to be disposed of by sale, and addresses the
principal implementation issues. SFAS 144 requires that long-lived assets that
are to be disposed of by sale be measured at the lower of book value or fair
value less cost to sell. This requirement eliminates APB30's requirement that
discontinued operations be measured at net realizable value or that entities
include under discontinued operations in the financial statements amounts for
operating losses that have not yet occurred. Additionally, SFAS 144 expands
the scope of discontinued operations to include all components of an entity
with operations that (1) can be distinguished from the rest of the entity and
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impairment of Long-Lived Assets [continued]
(2) will be eliminated from the ongoing operations of the entity in a disposal
transaction.
All long-lived assets are evaluated for impairment annually or whenever events
or changes in circumstances indicate the carrying amount may not be recoverable per SFAS 142 "Goodwill and Other Intangible Assets". Any impairment in value is recognized as an expense in the period when theimpairment occurs.
Stock-Based Compensation
The Company accounts for the issuance of stock, stock options, stock warrants and other share based payment arrangements in accordance with the provisions of SFAS No.123 (revised 2004), "Share-Based Payment". Statement 123(R) requires that we measure compensation costs related to our share-based payment transactions at fair value on the grant date and that we recognize those costs in the financial statements over the vesting period during which the employee provides service in exchange for the grant.
On January 1, April 1, August 20 and October 1, 2008, the Company issued 300,000 total shares of common stock for compensation to Directors and Officers in accordance with the terms of their respective compensation or employment agreements. The shares were valued at the market price at the date of issuance, ranging between $.035 and $.05 per share, resulting in current year compensation expense of $12,875.
On January 1, April 1 and October 1, 2007, the Company issued 175,000 total shares of common stock for compensation to Directors and Officers in accordance with the terms of their respective compensation or employment agreements. The shares were valued at the market price at the date of issuance, ranging between $.04 and $.08 per share, resulting in compensation expense of $11,500.
Earnings (Loss) Per Share
The Company computes earnings or loss per share in accordance with the Financial Accounting Standards Board Statement No. 128 "Earnings Per Share" (SFAS 128) which replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes the dilutive effects of options, warrants and convertible securities and thus is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share is similar to the previous fully diluted earnings per share. Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock were exercised or converted into common stock. Diluted earnings per share is computed based upon the weighted average number of common shares and dilutive common equivalent shares outstanding.
Common equivalent shares also include the incremental common shares issuable upon the conversion of the Preferred Stock (using the if-converted method). Common equivalent shares are excluded from the calculation if their effect is anti-dilutive.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
The Companies operations have not changed significantly compared to prior years. The Companies tax position taken in prior years for deferred income taxes have been provided by temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. To the extent allowed by GAAP, we provide valuation allowances against the deferred tax assets for amounts when the realization is uncertain. Management reviews these items regularly in light of changes in tax laws and court rulings at both federal and state levels.
The company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) on July 1, 2007. FIN 48 is an interpretation of FASB Statement No. 109, “Accounting for Income Taxes,” which seeks to standardize practices associated with certain aspects of measurement and recognition in accounting for income taxes. FIN 48 prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position taken or expected to be taken on a tax return. Additionally, FIN 48 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Under FIN 48, an entity may only recognize or continue to recognize tax positions that meet a “more likely than not” threshold. Adoption of FASB Interpretation No. 48 had no material effect upon the company’s consolidated financial statements. See Footnote No. 4, “Provision for Income Taxes,” for additional information.
The Company files income tax returns in the U.S. federal jurisdiction, and the state of Utah. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2004.
Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income.
Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes (Continued)
positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income.
Recent Accounting Pronouncements
Financial Accounting Standards No. 157, “Fair Value Measurements”
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company does not anticipate adoption of this standard will have a material impact on its consolidated financial statements.
Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115”
In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115” (“FAS No. 159”). This standard permits entities to choose to measure many financial instruments and certain other items at fair value and is effective for the first fiscal year beginning after November 15, 2007, which for the company begins with our 2008 fiscal year. The company does not expect to elect the fair value measurement option for any financial assets or liabilities at the present time.
Financial Accounting Standards No. 141 (Revised 2007), “Business Combinations”
On December 4, 2007, the FASB issued FAS No. 141 (Revised 2007), “Business Combinations” (“FAS No. 141(R)”). FAS No. 141(R) will significantly change the accounting for business combinations. Under FAS No. 141(R), an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. FAS No. 141(R) also includes a substantial number of new disclosure requirements. FAS No. 141(R) 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, which for the company begins with the 2009 fiscal year. The Company does not anticipate adoption of this standard will have a material impact on its 2007 consolidated financial statements.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
1. THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (continued)
Financial Accounting Standards No. 160, “Non-controlling Interests in Consolidated Financial Statements-an Amendment of ARB No. 51”
On December 4, 2007, the FASB issued FAS No. 160, “Non-controlling Interests in Consolidated Financial Statements-an Amendment of Accounting Research Bulletin (“ARB”) No. 51” (“FAS No. 160”). FAS No. 160 establishes new accounting and reporting standards for a non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement requires the recognition of a non-controlling interest (minority interest) as equity in the consolidated financial statements separate from the parent’s equity. The amount of net income attributable to the non-controlling interest will be included in consolidated net income on the face of the income statement. FAS No. 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss will be measured using the fair value of the non-controlling equity investment on
the deconsolidation date. FAS No. 160 also includes expanded disclosure requirements regarding the interests of the parent and its non-controlling interest. FAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, which for us begins with our 2009 fiscal year. The Company does not anticipate adoption of this standard will have a material impact on its consolidated financial statements.
Reclassifications
Certain reclassifications have been made to the prior year balances to conform
to the current year presentation.
Concentration of Credit Risk
The company maintains several accounts with financial institutions. The
accounts are insured by the Federal Deposit Insurance Corporation up to
$100,000. The company had $754,249 and $303,951 on December 31, 2007 and 2008, respectively.
2. CASH AND CASH EQUIVALENTS
The Company holds the majority of its cash in interest-bearing instruments
with short term (less than one year) maturities at several financial
institutions. Management intends to continue this practice until a suitable
investment or business combination is identified. The Company considers all
highly liquid investments with maturities of three months or less when
purchased to be a cash equivalent.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
3. PROPERTY AND EQUIPMENT
Property and equipment, at cost, and their respective useful lives consisted
of the following at:
Estimated
December 31, Useful
Lives
Computer equipment $ 10,000 $ 10,000 5
Office equipment - -
Leasehold improvements - -
-------- ---------
10,000 10,000
Less: Accumulated depreciation (10,000) (10,000)
-------- ---------
$ - $ -
======== =========
4.
PROVISION FOR INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss and tax
credit carry-forwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Net deferred tax assets consist of the following components as of
December 31, 2008 and 2007:
Deferred tax assets:
NOL Carryover $ 1,355,200 $1,187,500
Deferred tax liabilities: - -
Valuation allowance (1,355,200) (1,187,500)
----------- ---------
Net deferred tax asset $ - $ -
=========== =========
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
5.
PROVISION FOR INCOME TAXES (continued)
The income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rates of 39% to pretax income from
continuing operations for the years ended December 31, 2008 and 2007 due to
the following:
Book Income $ (177,832) $ (155,650)
Meals and Entertainment 5,507 4,080
Stock for Services 5,021 4,480
Valuation Allowance 167,754 147,090
---------- ----------
$ - $ -
========== ==========
At December 31, 2008, the Company had net operating loss carry-forwards of
approximately $3,400,000 that may be offset against future taxable income from
the year 2008 through 2028. No tax benefit has been reported in the December
31, 2008 financial statements since the potential tax benefit is offset by a
valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry-forwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net
operating loss carry-forwards may be limited as to use in future years.
5. STOCK OPTIONS AND WARRANTS
A summary of the status of the Company's outstanding stock options and
warrants (all of which were exercisable) as of December 31, 2008 and 2007 and
changes during the years then ended, is presented below:
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
Outstanding, beginning of
year - $ 0.00 - $ 0.00
Granted - - - -
Expired/Cancelled - 0.00 - 0.00
Exercised - - - -
------- ------ ------- --------
Outstanding end of year 0 $ 0.00 0 $ 0.00
======== ====== ======= ========
Exercisable $ 0.00 0 $ 0.00
======== ====== ======= ========
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
6. GOING CONCERN QUALIFICATION
The Company has been a Development Stage Company since April 1, 2003. It has continuously sought an acceptable merger or acquisition candidate since then and has incurred losses each year. For the year ended December 31, 2008 the company lost $455,979 and had a Retained Deficit of $3,680,447. The company’s cash reserves of $316,795 as of December 31, 2008 are not adequate to fund all of the anticipated expenses for the year ending December 31, 2009. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of this uncertainty.
The company plans to merge with, acquire an existing company or begin to operate during the year ending December 31, 2009. Should the acquired or merged operating entity not have sufficient resources of its own to fund the combined entity’s operations, the Company will issue stock to raise sufficient operating capital.
7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, there may be various legal actions and
proceedings pending which seek damages against the Company. As of December 31,
2008 there were no other claims asserted or threatened against the Company.
Employment Agreements
The Company entered into an employment agreement with Scott Emerson Lybbert,
the Chief Executive Officer of the Company. The agreement was for a term of
three years, with one year renewal clauses, commencing April 1, 2003 and
provided for a base annual compensation of 100,000 shares of the company's
stock, $100,000, and for bonuses as determined by the Company's Board of
Directors. The Company had previously entered into an employment agreement
with Marni Gaer, Secretary of the Board of Directors and In House counsel for
the Company. The agreement was for the term of three years, with one year
renewal clauses, commencing October 1, 2002 and provided for a base annual
salary of $100,000 and for bonuses as determined by the Company's Board of
Directors. No bonuses were authorized or paid in 2008 or 2007.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
8. CAPITAL STOCK
Common Stock
The authorized common stock of the Company consists of 50,000,000 shares, with
a par value of $.01 per share. Holders of common stock are entitled to one
vote per share.
Preferred Stock
The authorized preferred stock of the Company consists of 1,000,000 shares,
with a par value of $0.01 per share. Holders of Preferred stock are entitled
to one-tenth of a vote for each share held.
The Series 1 Class A 8% Cumulative Convertible Preferred Stock has a par value
of $0.01 per share. As of December 31, 2008, there were 50,500 shares
outstanding. Holders of preferred shares are entitled to cumulative dividends
of 8% per annum on the stated value of the stock, designated at $7 per share.
Dividends are payable semi-annually on September 15 and March 15. No dividends
have been paid since March 15, 1993, resulting in dividends in arrears at
December 31, 2008 of approximately $438,340 or $8.68 per share. Dividends are
not payable on any other class of stock ranking junior to the preferred stock
until the full cumulative dividend requirements of the preferred stock have
been satisfied. The preferred stock carries a liquidation preference equal to
its stated value plus any unpaid dividends. The Company may, at its option,
redeem at any time all shares of the preferred stock or some of them upon
notice to each preferred stockholder at a per share price equal to the stated
value ($7.00) plus all accrued and unpaid dividends thereon (whether or not
declared) to the date fixed for redemption, subject to certain other
provisions and requirements. Preferred Shares may be converted into Common
Shares on a one share of Preferred Stock for two shares of Common Stock basis.
The potential liability for dividends in arrears is contingent upon the
Company's declaration of a dividend. The Company has represented that it does
not intend to declare a dividend.
TGFIN HOLDINGS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(Continued)
9. CAPITAL STOCK (continued)
On January 1, April 1, August 20 and October 1, 2008, the Company issued 300,000 total shares of common stock for compensation to Directors and Officers in accordance with
the terms of their respective compensation or employment agreements. The shares were valued at the market price at the date of issuance, ranging between $.035 and $.05 per share, resulting in current year compensation expense of $12,875.
On January 1, April 1 and October 1, 2007, the Company issued 175,000 total shares
of common stock for compensation to Directors and Officers in accordance with
the terms of their respective compensation or employment agreements. The
shares were valued at the market price at the date of issuance, ranging
between $.04 and $.08 per share, resulting in compensation expense of $11,500.
ITEM 9.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None
ITEM 9A.
ITEM 9A. Controls and procedures
Management’s annual report on internal control over financial reporting. Section 404 of the Sarbanes-Oxley Act of 2002 requires management to include in this Annual Report on Form 10-K a report on the effectiveness of our internal control over financial reporting. The Company’s external auditors were not engaged to examine management's assertion about the effectiveness of internal control over financial reporting as of December 31, 2008 and, accordingly, they did not express an opinion thereon.
Management of TGFIN Holdings, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
·
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of TGFIN Holdings, Inc.;
·
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of TGFIN Holdings, Inc. are being made only in accordance with authorizations of management and directors of TGFIN Holdings, Inc.; and
·
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of TGFIN Holdings, Inc.’ assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control over Financial Reporting - Guidance for Smaller Public Companies.
Based on our assessment and those criteria, our management believes that TGFIN Holdings, Inc. maintained effective internal control over financial reporting as of December 31, 2008.
Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer are responsible for establishing and maintaining “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) for TGFIN Holdings, Inc. Our chief executive officer and chief financial officer, after evaluating the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, have concluded that our disclosure controls and procedures are effective to ensure that information required
to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.
There was no change in our internal control over financial reporting that occurred during the year ended December 31, 2008 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Management of TGFIN Holdings, Inc., together with its consolidated subsidiary (the Company), is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
As of the end of the Company’s 2008 fiscal year, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control Over Financial Reporting - Guidance for Smaller Public Companies issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment and those criteria, our management believes that TGFIN Holdings, Inc. maintained effective internal control over financial reporting as of December 31, 2008.
ITEM 9B.
ITEM 9B. Other Information.
None
PART III
ITEM 10.
ITEM 10. Directors, Executive Officers and Corporate Governance
Directors and executive officers
The names, ages and positions of the directors and executive officers of
the Company are as follows:
NAME AGE POSITION
S. Emerson Lybbert 51 Chairman, President
Marni Gaer Director, Secretary
Aaron Etra Director
The Company's By-laws provide that the Directors of the Company shall
serve until the next annual meeting of shareholders and until their successors
are duly appointed and qualified. All officers serve at the pleasure of the
Board of Directors. During the fiscal year ended December 31, 2008 there was
one meeting of the Board of Directors, at which all Board members were in
attendance.
S. Emerson Lybbert - Chairman of the Board, President
Scott Emerson Lybbert, 51 years old, was appointed CEO and Chairman of
TGFIN and TradinGear by the Board of Directors on April 29, 2003. From October
1, 2002 to April 2003, he had been a consultant under contract to perform and
advise the Company with respect to normal CFO duties. Mr. Lybbert held the
same position for the parent company, when it was Digitran Systems,
Incorporated ("Digitran") in Logan, Utah from March 1998 to March 1999, during
which time he also served as a Director and Corporate Secretary. From March
1999 to March 2001, he served as Chief Financial Officer and Chief Information
Officer of Reynolds Corporation, a Division of Selkirk Industries, in Lynnwood
Washington. From April 2001 until April 2003, he was a self-employed
Independent Consultant. Nevertheless, from April 2000 until the merger with
TradinGear.com, Incorporated on September 12, 2002, he had been a consultant
to Digitran on a limited, volunteer basis, which included an appointment as
Corporate Secretary in April 2001.
Mr. Lybbert graduated from the University of Utah with a Bachelors and
Masters Degree in Professional Accountancy in 1983 and 1984, respectively. He
then joined the Tampa, Florida office of Price Waterhouse until leaving in
1991 as an Audit Manager. Since then, and up until his appointment as CEO of
the Company, Mr. Lybbert had been, both a CFO and CIO for nine years;
Consultant for three years; and Investor for all twelve. He has a wide range
of experience in manufacturing, agriculture, food processing, retail,
wholesale distribution, public utilities, software, and investment fund
management. Mr. Lybbert has been a shareholder since 1991.
Marni Gaer - Director, Secretary and In House Counsel
Marni Gaer became a Director, Corporate Secretary, and In House Counsel
of TradinGear in October 1999. She was then elected to these positions for
TGFIN on September 12, 2002. Since 1992, Ms. Gaer also has been and
currently serves as Vice-President and General Counsel for International
Printing Corporation, a family business located in Queens, New York,
where her responsibilities include union and labor negotiations and general
corporate law. Ms. Gaer earned her JD from Brooklyn Law School in 1991 and
graduated from the University of Pennsylvania with a Bachelor of Arts in
Economics in 1988.
Aaron Etra - Director
Aaron Etra was appointed Director of TGFIN and TradinGear on April 29,
2003. Aaron Etra has been the President of Investors & Developers Associates,
Inc., a developer of commercial, residential and industrial property in the
U.S., since 1981 as well as Chairman of Molecular Technology Group, a
biotechnology and consumer products and research and development group of
companies since 1998. He is also a Director of ABSS Corp. Mr. Etra has been
an Attorney and a counselor at law since 1966 specializing in commercial,
corporate, tax and personal law. His professional education includes a J.D. in
Law at Columbia University in 1965, L.L.M. in Law at New York University in
1966, a B.A. in Political Science and Economics at Yale University in 1962 and
he attended the Hague Academy of International Law during the summers of 1964-
65.
Involvement in certain legal proceedings by Officers and Directors
None
Compliance with Section 16(a) of the Securities Exchange Act of 1934, as
amended.
The Company does not believe that any reporting person failed to file in
a timely fashion any report required by section 16(a) of the Securities Act of
1934, as amended, for the fiscal year ended December 31, 2007
Audit committee and Financial Expert
The Company does not have a formal Audit committee. All members of the
Board of Directors serve the functions of the audit committee, with S. Emerson
Lybbert, Chairman, CEO and CFO serving as its Chairman. S. Emerson Lybbert is
a "Financial expert" within the meaning of such phrase under applicable
regulations of the Securities and Exchange Commission, and currently is the
Board's only "financial expert," although all Board members are financially
literate. The Board members, functioning also as audit committee members,
have:
1) reviewed and discussed the audited financial statements with
management,
2) discussed with the independent auditors the matters required to be
discussed by SAS 61,
3) received the written disclosures and the letter from the
independent accountants required by Independence Standards Board
Standard No. 1, and discussed with the independent accountant the
independent accountant's independence, and
4) recommended that the audited financial statements be included in
the company's annual report 10-K.
The Board members performing the function of the audit committee are, S.
Emerson Lybbert, Marni Gaer, and Aaron Etra.
Code of Ethics
The Board of Directors has not yet adopted a Code of Ethics for its CEO
and CFO because it believes the design of, and compliance with, its controls
and procedures are sufficiently complete to mitigate such risks at its current
level of operations given the company is currently a Development Stage Company
with no operations. The Board of Directors maintains all approval authority
over significant transactions; use or commitment of company resources; and the
incurrence of debt or equity, etc.
ITEM 11.
ITEM 11. Executive Compensation
The following table sets forth certain specified information concerning
the compensation of the Chief Executive Officer of the Company and all other
officers (the Named Executive Officers):
Annual Compensation
____________________________
(a) (b) (c) (d) (e)
Long-term compensation
Name and ____(f)________(h)______
Principal Restricted Other
Position Year Salary Bonus Other Stock Awards
- - ----------- ---- -------- ----- ----- ------------------------
S. Emerson
Lybbert 2008 $100,000 -0- $ -0- $ 5,000
Chairman 2007 100,000 -0- -0- 8,000
CEO 100,000 -0- -0- 10,000
Marni Gaer 2008 $100,000 -0- -0- $ 4,000 -0-
Director, 2007 100,000 -0- -0- 2,000
Counsel 2006 100,000 -0- -0- 3,000
Aaron Etra 2008 $ -0- -0- -0- $ 3,875 -0-
Director 2007 -0- -0- 1,500 -0-
-0- -0- -0- 1,750 -0-
Other Items
There were no exercises of stock options (or tandem stock Appreciation
rights) and freestanding appreciation rights (or unexercised options or stock
appreciation rights) made during the fiscal year ended December 31, 2008 by
any Named Executive Officer.
Options and Stock Issuances
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR
VALUES
(a) (b) (c) (d) (e)
Number of Value of
Unexercised Unexercised
Options/SARs Options/SARs
at FY-End (#)at FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($) Unexercisable Unexercisable
S. Emerson Lybbert
(Chairman)
-0- 0/0 $0/0
-0- 0/0 $0/0
Marni Gaer
(Director)
-0- 0/0 $0/0
-0- 0/0 $0/0
Aaron Etra
(Director)
-0- 0/0 $0/0
-0- 0/0 $0/0
Director Compensation
At the discretion of the Board of Directors, an option exercisable for a
period of five years to acquire 10,000 shares of Common Stock at a price based
on the market value on the first trading day in January could be granted to
each currently serving Director. No options were granted to Directors or
Officers during the fiscal years ended December 31, 2008 or 2007.
The Company's Bylaws as well as Delaware corporate statutes provide for
indemnification of and advances of expenses (including legal fees) under
certain circumstances for officers and directors who are a party to or
threaten to be made a party to any proceeding by reason of the fact that they
are a director, officer or employee of the Company, against expenses and
amounts paid in settlement of such actions.
ITEM 12.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth as of December 31, 2008 the number of
shares of Common Stock, Series 1 Class A 8% Cumulative Convertible Preferred
Stock (the "Preferred Stock") owned by each person known to be the beneficial
owner of more than five percent of the outstanding shares of the Company's
Common Stock and Preferred Stock, by each director and each officer of the
Company and by all officers and directors as a group. Unless otherwise indicated, all persons have sole voting and investment power over such shares, subject to community
property laws.
Voting
Name and Number Power and
Address of of shares Percent of
Beneficial of outstanding outstanding
Owner\Identity Common Common
of Group (1) Stock Stock
Samuel Gaer 6,675,000 29.0%
North 260 East
North Logan, UT 84341
Marni Gaer (2) * 2,300,000 10.0%
North 260 East
North Logan, UT 84341
Kim Hemphill (3) 1,950,351 8.5%
East Jacobs Road
Spokane, WA 99217
Bruce Frank 1,710,584 7.5%
Christopher Street
Montclair, NJ 07043
Global Net Financial 1,338,889 5.8%
West Palmetto Pk. Rd.
Suite
Boca Raton, FL 33433
Norman Fuchs 975,689 4.2%
Flagpole Lane
East Setauket, NY 11733
S. Emerson Lybbert * 744,479 3.2%
North 260 East
North Logan, UT 84341
Aaron Etra * 273,907 1.2%
Ave of Americas
29th Floor
New York, NY 10019
All executive officers
and directors as a
group (3 persons) 3,318,386 14.4%
(1) Unless otherwise indicated, each person named in the table exercises
sole voting and investment power with respect to all shares beneficially
owned. As at the date hereof, TGFIN Holdings, Inc. had outstanding 23,020,845
shares of its common stock.
(2) Marni Gaer is the wife of Samuel Gaer. Includes 100,000 shares held in
trust for the children of Marni and Samuel Gaer, of which Marni Gaer is the
Trustee.
(3) Amount includes shares held in Trusts, for which Kim Hemphill is the
Trustee.
None of the Beneficial Owners or Groups listed above holds any other
class of shares other than common stock.
*Indicates current officer or director of the Company.
ITEM 13.
ITEM 13. Certain relationships and Related Transactions, and Director Independence
None
ITEM 14.
ITEM 14. Principal Accountant Fees and Services
AUDIT AND NON-AUDIT FEES
Aggregate fees for professional services rendered for the Company by
HJ & Associates, LLC for the years ended December 31, 2008 and 2007 are set
forth below.
YEAR 2008 YEAR 2007
AUDIT FEES $ 12,040 $ 13,890
AUDIT-RELATED FEES $ - $ -
TAX FEES $ 885 $ 570
ALL OTHER FEES $ - $ -
--------- ---------
TOTAL $ 12,925 $ 14,460
========= =========
Audit Fees for the fiscal years ended December 31, 2008 and 2007 were
for the audits of the consolidated financial statements of the Company,
quarterly review of the financial statements included in Quarterly Reports on
form 10-Q, consents, and other assistance required to complete the year end
audit of the consolidated financial statements. Amounts included are for the
respective year's audit work.
Audit-Related Fees as of the years ended December 31, 2008 and 2007 would
have been for assurance and related services reasonably related to the
performance of the audit or reviews of financial statements and not reported
under the caption Audit Fees.
Tax Fees as of the years ended December 31, 2008 and 2007 were for
professional services related to tax compliance, tax authority audit support
and tax planning. Amounts are included in the year billed.
As the company does not have a formal audit committee, the services
described above were not approved by the audit committee under the de minimus
exception provided by Rule 2-01 (c) (7) (i) (C) under Regulation S-X.
ITEM 15
ITEM 15 Exhibits and Financial Statements schedules
(a)(1)(2) Financial Statements. See our audited financial statements for the year ended December 31, 2008, contained in Part II, Item 8, above, which are incorporated by reference.
(a)(3) Exhibits: The following are filed as part of this Annual Report
Exhibit 31.1
Certification of Scott Emerson Lybbert as Chief Executive Officer,
pursuant to section 302 of the Sarbanes-Oxley act of 2002.
Exhibit 31.2 Certification of Scott Emerson Lybbert as Chief Financial Officer,
pursuant to section 301 of the Sarbanes-Oxley act of 2002.
Exhibit
Certification of Scott Emerson Lybbert, pursuant to section 906 of the
Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
TGFIN HOLDINGS, Inc.
Date:
March 30, 2009
By:
/s/ S. Emerson Lybbert
S. Emerson Lybbert, President
Principal Executive Officer,
Principal Financial Officer
Pursuant to the requirements of The Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
TGFIN HOLDINGS, Inc.
Date:
March 30, 2009
By:
/s/ S. Emerson Lybbert
S. Emerson Lybbert, President
Principal Executive Officer,
Principal Financial Officer
Date:
March 30, 2009
By:
/s/ Marni Gaer
Marni Gaer, Director
Date:
March 30, 2009
By:
/s/ Aaron Etra
Aaron Etra, Director
Exhibit 31-1
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, S. Emerson Lybbert, certify that:
1. I have reviewed this annual report on Form 10-K of TGFIN
Holdings, Inc.;
2. Based upon my knowledge, this report does not contain
any untrue statements of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly
represent in all material respects the financial condition,
results of operations and cash flows of the Registrant as of,
and for, the periods presented in this report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f))14 and 15d-14) for the registrant and have:
a) designed such disclosure controls or caused such internal
control over and procedures to be designed under out supervision,
and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures as of the end of the period covered by this
report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and to the audit committee of registrant's board of directors (or persons performing
the equivalent functions):
a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls over financial reporting.
Chairman of the Board and
/s/ S. Emerson Lybbert Chief Executive Officer
-------------------------
S. Emerson Lybbert
Exhibit 31-2
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, S. Emerson Lybbert, certify that:
1. I have reviewed this annual report on Form 10-K of TGFIN
Holdings, Inc.;
2. Based upon my knowledge, this report does not contain
any untrue statements of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly
represent in all material respects the financial condition,
results of operations and cash flows of the Registrant as of,
and for, the periods presented in this report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f))14 and 15d-14) for the registrant and have:
a) designed such disclosure controls or caused such internal
control over and procedures to be designed under out supervision,
and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures as of the end of the period covered by this
report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and to the audit committee of registrant's board of directors (or persons performing
the equivalent functions):
a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls over financial reporting.
/s/ S. Emerson Lybbert Chief Financial Officer
-------------------------
S. Emerson Lybbert
Exhibit
CERTIFICATION PURSUANT TO
18 U.S.C. Section
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of TGFIN Holdings, Inc. (the “Registrant”) on Form 10-K for the period ending december 31, 2008, as filed with the securities and exchange commission on the date hereof (the “Annual Report”), I, S. Emerson Lybbert, Chairman of the Board, Chief Executive Officer and chief Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002, that:
(1)
the Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: March 30, 2009 By: /s/ S. Emerson Lybbert
Name: S. Emerson Lybbert
Title: Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer), and
Chief Financial Officer
(Principal Financial Officer)