-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WZVMSA2Qamrc+/V29p6AIZAIN0ZSBtL/uxHDHoUjDcmEsRNs+hmhTrVOCuVmhaoE BKppKpT8T6zxinfLlR/NLw== 0001010412-04-000385.txt : 20041026 0001010412-04-000385.hdr.sgml : 20041026 20041026150330 ACCESSION NUMBER: 0001010412-04-000385 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040930 FILED AS OF DATE: 20041026 DATE AS OF CHANGE: 20041026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TGFIN HOLDINGS INC CENTRAL INDEX KEY: 0000876134 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 720861671 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-19470 FILM NUMBER: 041096510 BUSINESS ADDRESS: STREET 1: 1517 NORTH 260 EAST STREET 2: * CITY: NORTH LOGAN STATE: UT ZIP: 84321 BUSINESS PHONE: 435-755-0188 MAIL ADDRESS: STREET 1: 1517 NORTH 260 EAST CITY: NORTH LOGAN STATE: UT ZIP: 84321 FORMER COMPANY: FORMER CONFORMED NAME: DIGITRAN SYSTEMS INC /DE DATE OF NAME CHANGE: 19930328 10QSB 1 q904.txt QUARTERLY REPORT ON FORM 10QSB FOR THE PERIOD ENDED SEPTEMBER 30, 2004 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ FORM 10-QSB __________________ [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2004 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT Commission File Number 1-11034 TGFIN HOLDINGS, INC. AND SUBSIDIARY (Exact name of registrant as specified in its charter) Delaware 13-4069968 (State or other jurisdiction of (IRS) employer incorporation or organization) identification No.) 1517 North 260 East, North Logan, Utah 84341 (Address of principal executive offices and zip code) (435) 755-0188 (Registrant's telephone number, including area code) APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS N/A Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes x No --- --- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Class Outstanding at September 30, 2004 Common stock, $.01 par value 22,831,168 Transitional Small Business Disclosure Format (Check one) Yes No X PLEASE ADDRESS ALL CORRESPONDENCE TO: Mark Gasarch, Esq. 150 East 58th Street 34th floor New York, New York 10155 (212) 956 -9595 TGFN HOLDINGS, INC. AND SUBSIDIARY TABLE OF CONTENTS PAGE PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Unaudited Condensed Consolidated Balance Sheet as of September 30, 2004 and Audited Consolidated Balance Sheet as of December 31, 2003 3 Unaudited Condensed Consolidated Statements of Operations, for the Three and Nine Month Periods Ended September 30, 2004 and 2003 4 Unaudited Condensed Consolidated Statements of Cash Flows, for the Three and Nine Month Periods Ended September 30, 2004 and 2003 5 Notes to Unaudited Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition or Plan of Operation 10 Item 3. Controls and Procedures 12 PART II. OTHER INFORMATION 13 SIGNATURES 14 2 PART I FINANCIAL INFORMATION ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS September 30, 2004
TGFIN HOLDINGS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (A Development Stage Company) September 30, December 31, 2004 2003 ------------- ------------ (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 2,127,764 $ 2,469,658 Prepaid expenses 15,121 24,003 ------------ ------------ Total Current Assets 2,142,885 2,493,661 Property and equipment, net - - Deposits 500 500 ------------ ------------ Total Assets $ 2,143,385 $ 2,494,161 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 1,234 $ 13,902 Accrued expenses 21,132 70,389 ------------ ------------ Total Current Liabilities 22,366 84,291 ------------ ------------ Stockholders' Equity: Preferred stock ($0.01 par value) 1,000,000 shares authorized, 50,500 shares issued and outstanding 506 506 Common stock ($.01 par value), 50,000,000 shares authorized, 22,831,168 and 22,431,168 issued and outstanding, respectively 228,312 224,312 Additional paid-in capital 3,677,824 3,637,824 Retained deficit prior to development stage (1,077,064) (1,077,064) Retained deficit during development stage (708,559) (375,708) ------------ ------------ Total Stockholders' Equity 2,121,019 2,409,870 ------------ ------------ Total Liabilities and Stockholders' Equity $ 2,143,385 $ 2,494,161 ============ ============
These accompanying notes are integral part of these consolidated financial statements. 3
TGFIN HOLDINGS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (A Development Stage Company) (Unaudited) From Inception Of the Development For the For the Stage on Three Months Ended Nine Months Ended April 1, 2003 September 30, September 30, To September 30, ----------------------- ---------------------- 2004 2004 2003 2004 2003 REVENUES $ - $ - $ - $ - $ - ---------- ----------- ---------- ---------- ---------- OPERATING COSTS 110,858 105,944 349,263 205,706 741,058 ---------- ----------- ---------- ---------- ---------- OPERATING LOSS (110,858) (105,944) (349,263) (205,706) (741,058) ---------- ----------- ---------- ---------- ---------- OTHER INCOME: INTEREST INCOME 5,562 7,553 16,412 10,341 32,499 NET GAIN FROM ASSET SALE (Note 2) - - - 2,841,860 - ---------- ----------- ---------- ---------- ---------- TOTAL OTHER INCOME 5,562 7,553 16,412 2,852,201 32,499 ---------- ----------- ---------- ---------- ---------- OPERATING INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS (105,296) (98,391) (332,851) 2,646,495 (708,559) ---------- ----------- ---------- ---------- ---------- DISCONTINUED OPERATIONS: NET(LOSS) FROM DISCONTINUED OPERATIONS - - - (414,258) - (Note 3) ---------- ----------- ---------- ---------- ---------- NET INCOME(LOSS)$ (105,296) $ (98,391) $ (332,851) $2,232,237 $ (708,559) ========== =========== ========== ========== ========== BASIC AND DILUTED INCOME (LOSS)PER SHARE: Continuing Operations $ (0.00) $ (0.00) $ (0.01) $ 0.12 Discontinued Operations - - - (0.02) ---------- ----------- ---------- ---------- Total $ (0.00) $ (0.00) $ (0.01) $ 0.10 ========== =========== ========== ========== Weighted Average Number of shares Outstanding 22,831,168 22,431,168 22,696,861 22,422,835
========== =========== ========== ========== The accompanying notes are an integral part of these consolidated financial statements. 4
TGFIN HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (A Development Stage Company) (Unaudited) From Inception Of the Development For The Stage on Nine Months Ended April 1, 2003 September 30, To ----------------- 2004 2003 September 30, 2004 -------- ------- ------------------ Cash Flows from Operating Activities: Net Income (Loss) $ (332,851) $2,232,237 $ (708,559) Adjustments to reconcile Net income(loss) to net cash used in operating activities: Depreciation and amortization - 11,297 - Amortization of deferred compensation - 119,405 13,751 Costs of common stock issued for compensation 15,000 - 15,000 Costs of common stock issued for services - 3,750 - Gain on sale of assets - (2,841,860) - Changes in assets and liabilities: Decrease (increase)in: Accounts receivable - 54,040 31,250 Prepaid expenses 8,882 3,239 (369) Deposits - - (500) Increase (decrease)in: Accounts payable and accrued expenses (32,925) (135,453) (176,127) ---------- ---------- ---------- Net Cash Used In Operating Activities (341,894) (553,345) (825,554) ---------- ---------- ---------- Cash Flows from Investing Activities: Sale of property and equipment - 109,279 - Sale of intellectual property - 2,890,721 - ---------- ---------- ---------- Net Cash Provided By Investing Activities - 3,000,000 - ---------- ---------- ---------- Cash Flows From Financing Activities: - - - ---------- ---------- ---------- Net Increase (Decrease) In Cash and Cash Equivalents $ (341,894) $2,446,655 $ (825,554) Cash and Cash Equivalents, Beginning of Period $2,469,658 $ 137,958 $2,953,318 ---------- ---------- ---------- Cash and Cash Equivalents, End of Period $2,127,764 $2,584,613 $2,127,764 ========== ========== ==========
These accompanying notes are an integral part of these consolidated financial statements. 5
TGFIN HOLDINGS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (A Development Stage Company) (Unaudited) From Inception Of the Development For The Stage on Nine Months Ended April 1, 2003 September 30, To --------------------- 2004 2003 September 30, 2004 ---------- ---------- ------------------ Cash Paid During the Period For: Income Taxes $ $ 1,800 $ - ========== ========== =========== Interest $ - $ - $ - ========== ========== =========== Supplemental Disclosures of Non-cash Investing and Financing Activities: Common stock issued for accrued liabilities $ 29,000 $ - $ 29,000 ========== ========== =========== Common stock issued for services $ 15,000 $ 3,750 $ 15,000 ========== ========== ===========
6 TGFIN HOLDINGS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2004 and DECEMBER 31, 2003 NOTE 1: THE COMPANY AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 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 was incorporated under the laws of the State of Delaware on July 7, 1999. TradinGear produced trading software designed for the financial services industry. The Company's software technology was designed to provide stock exchanges and broker dealers in the securities industry the ability to offer to its customers an on-line electronic system for securities trading. The operating assets of Tradingear were sold on March 31, 2003. See also NOTE 2: ASSET SALE. Condensed financial statements The accompanying financial statements have been prepared by the Company without audit, they include information of TGFIN and TradinGear. In the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at September 30, 2004 and the results of operations and cash flows for the three and nine month periods ended September 30, 2004 and 2003 have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2003 audited financial statements. The results of operations for the periods ended September 30, 2004 and 2003 are not necessarily indicative of the operating results for the respective full years. Certain prior period amounts have been reclassified to conform to current period presentation. 7 TGFIN HOLDINGS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2004 and DECEMBER 31, 2003 (Continued) NOTE 2: ASSET SALE On January 9, 2003 a Special Meeting of a majority of shareholders was held in order to approve the sale of the operating assets of TradinGear; subsequently, the shareholders were provided an Information Statement on March 4, 2003; and lastly, the transaction ("Asset Sale") was completed on March 31, 2003. The buyer received all rights to the trading platform "TGFIN/X", along with equipment and furniture with a book value of approximately $110,000. The Company received $2,900,000 in cash. The Company recorded a gain on the Asset Sale or $2,841,860. An additional $100,000 in cash was placed in escrow for possible indemnification claims until March 31, 2004. The escrowed amount was released to the Company on April 22, 2004 without offset. The escrowed amount was recorded as part of the original gain on Asset Sale with a corresponding estimated accrual for possible claims. Due to the Company's ceasing operations on March 31, 2003, effective April 1, 2003 the Company reverted back to the development stage as it seeks a merger or acquisition with an operating entity. NOTE 3: DISCONTINUED OPERATIONS The operating assets of Tradingear were sold on March 31, 2003. The following is a summary of the loss from discontinued operations resulting from the elimination of those operations. The amounts for 2003 represent operating activity prior to March 31. No tax benefit was attributed to the discontinued operations. Nine Months Ended ----------------------------- September 30, September 30, 2004 2003 ---------- ---------- REVENUES $ - $ 118,079 ---------- --------- COSTS AND EXPENSES General & administrative - 170,310 Development costs - 98,838 Consulting fees - 165,696 Deferred costs expense - 86,196 Depreciation expense - 11,297 ---------- --------- Total costs and expense - 532,337 Net Loss) before Provision for Income ---------- --------- Taxes - (414,258) Provision for Income taxes - - ---------- --------- Net Loss from discontinued $ - $(414,258) operations ========== ========= NOTE 4: COMMITMENTS AND CONTINGENCIES Litigation On December 16, 2003 Samuel H. Gaer, former President and former Director of TGFIN Holdings, Inc. (the "Company") was served with a summons and complaint in a civil action commenced in the United States District Court for the Southern District of New York by two shareholders of the Company, as plaintiffs, naming Mr. Gaer, the Company and the Company's wholly-owned subsidiary, Tradingear.com Incorporated as defendants. The lawsuit alleges that the defendants mislead and defrauded the plaintiffs into investing in the Company's common shares and seeks monetary damages of approximately $400,000 plus other unspecified damages. The Company's management believes that these allegations are without merit and intends to vigorously defend this lawsuit. In addition, the Company has brought counterclaims against the plaintiffs for breach of contract and indemnification, seeking monetary damages from the plaintiffs in excess of $150,000. The case is presently scheduled for jury trial starting on January 6, 2005, and is expected to last approximately three days. No assessment of probable loss is yet determinable or estimable, therefore, no provision for loss has been accrued. Leases The Company leases office equipment and office space under noncancellable operating leases. Commitments under these leases are as follows: December 31, ------------ 2004 $ 715 Thereafter - ------------ $ 715 ============ Even though the Company is only committed for the month of October 2004, it is likely to renew its lease for an additional six month period, for the total potential commitment of $4,350. In April 2003, TradinGear vacated its location under which it had a long-term lease obligation. Consequently, TradinGear forfeited its lease deposits. Subsequently, the space was re-leased by the Landlord to a third party. As of the date of this report, no amounts under the prior long-term lease obligation have been requested, and none is expected. The company believes it has no liability under its former long-term lease obligation. 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 commencing April 1, 2003 and provided for a base annual compensation of 100,000 shares of the company's stock, $100,000, and 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 commencing October 1, 2002 and provided for a base annual salary of $100,000 and bonuses as determined by the Company's Board of Directors. No bonuses were authorized or paid in 2003 or 2002. 401(k) Plan and Profit Sharing Plan The Company has approved a 401(k) Plan and a Profit Sharing Plan which cover full-time employees who have attained the age of 21 and have completed at least one year of service with the Company. Under the 401(k) Plan, an employee may contribute an amount up to 25% of his compensation to the 401(k) Plan, on a pretax basis not to exceed the current annual Federal limitation. Amounts contributed to the 401(k) Plan are non-forfeitable. Under the Profit Sharing Plan, a member in the plan participates in the Company's contributions to the Plan as of December 31 in any year, with allocations to individual accounts based on annual compensation. An employee does not fully vest in the plan until the completion of three years of employment. The Board of Directors will determine the Company's contributions to the plan on a discretionary basis. The Company has not made any contributions to date. 8 TGFIN HOLDINGS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2004 and DECEMBER 31, 2003 (Continued) NOTE 5: PROPERTY AND EQUIPMENT Property and equipment, at cost, and their respective useful lives consist of the following at September 30, 2004. Although the company retained and utilizes computer equipment for its accounting and financial analysis, they are fully depreciated: Estimated September 30, Useful 2004 Lives ----------- --------- Computer equipment $ 10,000 5 years Less: Accumulated depreciation (10,000) ----------- $ - =========== NOTE 6: PROVISION FOR INCOME TAXES For the period from inception (July 7, 1999) to September 30, 2004 the Company had accumulated losses from operations of $4,627,483 prior to giving effect to the Gain from Discontinued Operations of $2,841,860. No federal tax expense was reported in the financial statements due to the Asset Sale because the accumulated losses prior to the sale exceeded the gain recognized on disposition of the assets. Also, no tax benefit was reported in the financial statements due to the current uncertainty of future operations. NOTE 7: 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 September 30, 2004 and December 31, 2003 and changes during the periods then ended, is presented below: September 30, December 31, 2004 2003 ------------- ------------ Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price Outstanding, beginning of period 905,832 $ .46 910,880 $ .47 Granted - - - - Expired/Cancelled (855,832) .47 (5,048) 21.00 Exercised - - - - ------- ------ ------- -------- Outstanding end of period 50,000 $ .40 905,832 $ .46 ======== ====== ======= ======== Exercisable 50,000 $ .40 905,832 $ .46 ======== ====== ======= ======== Outstanding Exercisable ------------------------------------ --------------------- Weighted Number Average Weighted Number Weighted Outstanding Remaining Average Exercisable Average Range of at September Contractual Exercise at September Exercise Exercise Prices 30, 2004 Life Price 30, 2004 Price - ---------------- ----------- ----------- -------- ----------- ------- $ .40 50,000 .22 $ .40 50,000 $ .40 =========== ======= ====== ======== ======= ======= No options or warrants were issued during the three months ended September 30, 2004. Options and warrants to purchase 753,570 shares expired during this quarter. NOTE 8: CAPITAL STOCK 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 22,831,168 were outstanding at September 30, 2004. Preferred stock The Series 1 Class A 8% Cumulative Convertible Preferred Stock has a par value of $0.01 per share. As of September 30, 2004 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 September 30, 2004 of approximately $325,220 or $6.44 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. 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. 9 PART 1 FINANCIAL INFORMATION (Continued) ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS 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-QSB and the Annual Report on Form 10-KSB for the year ended December 31, 2003. 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 three months ended September 30, 2004 and September 30, 2003 is derived from the consolidated financial statements included elsewhere herein. The financial information set forth and discussed below is un-audited but, in the opinion of management, reflects all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of such information. The results of operations of the Company for the fiscal quarter ended September 30, 2004 may not be indicative of results expected for the entire fiscal year ended December 31, 2004. Liquidity and Capital Resources: At its current level of operations, the Company has more than adequate liquidity and capital resources for the next fiscal year. Capital expenditures planned for the current year are not expected to be significantly different than those of the previous year. Results of Operations: The results from operations for the three months ended September 30, 2004 were essentially identical to those for the three months ended September 30, 2003. Operating costs of $110,858 for the three months ended September 30, 2004 increased $4,914, or 5%, over those of the three months ended September 30, 2003 due primarily to a net increase in legal expense of approximately $5,000. Interest income of $5,562 decreased $1,991 or 26%, over that of the third quarter of 2003 because the Company had fewer resources in 2004. Gain from Asset Sale. The Gain from Asset Sale, recorded in the first quarter of 2003, consisted of the following components. Proceeds from Asset Sale: $3,000,000 Less: Fixed assets sold (109,279) Less: Reserve for Deposits ( 76,524) Less: write-off of remaining Unamortized deferred Compensation of TradinGear ( 58,219) Add: Reversal of over-accruals 85,882 ----------- Gain from Sale of Assets $2,841,860 =========== 10 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 many potential affiliation candidates. To date, no formal or informal agreement has been reached with respect to any potential candidate, although several 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. 11 DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS This quarterly 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 3: CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's required filings is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and of and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the internal controls, subsequent to the date of the completion of the Company's evaluation. 12 PART II OTHER INFORMATION ITEM 1 Legal Proceedings On December 16, 2003 Samuel H. Gaer, former President and former Director of TGFIN Holdings, Inc. (the "Company") was served with a summons and complaint in a civil action commenced in the United States District Court for the Southern District of New York by two shareholders of the Company, as plaintiffs, naming Mr. Gaer, the Company and the Company's wholly-owned subsidiary, Tradingear.com Incorporated as defendants. The lawsuit alleges that the defendants mislead and defrauded the plaintiffs into investing in the Company's common shares and seeks monetary damages of approximately $400,000 plus other unspecified damages. The Company's management believes that these allegations are without merit and intends to vigorously defend this lawsuit. In addition, the Company has brought counterclaims against the plaintiffs for breach of contract and indemnification, seeking monetary damages from the plaintiffs in excess of $150,000. The case is presently scheduled for jury trial starting on January 6, 2005, and is expected to last approximately three days. No assessment of probable loss is yet determinable or estimable, therefore, no provision for loss has been accrued. ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds None. ITEM 3 Defaults on Senior Securities Holders of Series 1 Class A 8% Cumulative Convertible Preferred Stock are entitled to receive cumulative dividends at the annual rate of $.56 per share, payable semi-annually on September 15 and March 15 of each year beginning September 15, 1992. Unpaid dividends have resulted in aggregate dividends in arrears of $325,220. The potential liability for dividends in arrears is contingent upon the Company's declaration of a dividend. The company does not plan to declare a dividend. ITEM 4 Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the quarter ended September 30, 2004. ITEM 5 Other Information. None. ITEM 6 Exhibits and Reports on Form 8-K (a) Exhibits 31.1 302 Certification 31.2 302 Certification 32 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, Section 906 of the Sarbanes-Oxley Act of 2002 13 SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: October 27, 2004 TGFIN Holdings, Inc. (Registrant) By_/s/ Scott Emerson Lybbert_ Scott Emerson Lybbert, President Principal Executive Officer, Principal Financial Officer 14 EX-31 2 ex31-1.txt 302 CERTIFICATION OF CEO Exhibit 31.1 CERTIFICATIONS I, Scott Emerson Lybbert, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of TGFIN Holdings, Inc.; 2. Based upon my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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-14 and 15d-14) for the registrant and have: a) designed such disclosure controls 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; 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; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ Scott Emerson Lybbert Chief Executive Officer -------------------------- Scott Emerson Lybbert October 27, 2004 EX-31 3 ex31-2.txt 302 CERTIFICATION OF CFO Exhibit 31.2 I, Scott Emerson Lybbert, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of TGFIN Holdings, Inc.; 2. Based upon my knowledge, this quarterly 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 quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly represent in On October 1, 2004, a Joint Pre-Trial order was filed with the US District Court; Southern District of New York. A settlement conference held earlier in the quarter was not productive. No assessment of probable loss is yet determinable or estimable. Therefore no provision for loss has been accrued. On October 1, 2004, a Joint Pre-Trial order was filed with the US District Court; Southern District of New York. A settlement conference held earlier in the quarter was not productive. No assessment of probable loss is yet determinable or estimable. Therefore no provision for loss has been accrued. all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly 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-14 and 15d-14) for the registrant and have: a) designed such disclosure controls 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 quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; 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; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ Scott Emerson Lybbert Chief Financial Officer -------------------------- Scott Emerson Lybbert October 27, 2004 EX-32 4 ex32.txt 906 CERTIFICATION Exhibit 32 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Scott Emerson Lybbert, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of TGFIN Holdings, Inc. on Form 10-QSB for the fiscal quarter ended September 30, 2004 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-QSB fairly presents in all material respects the financial condition and results of operations of TGFIN Holdings, Inc. By: /s/ Scott Emerson Lybbert Name: Scott Emerson Lybbert Title: Chief Executive Officer I, Scott Emerson Lybbert, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of TGFIN Holdings, Inc. on Form 10-QSB for the fiscal quarter ended September 30, 2004 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-QSB fairly presents in all material respects the financial condition and results of operations of TGFIN Holdings, Inc. By: /s/ Scott Emerson Lybbert Name: Scott Emerson Lybbert Title: Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----