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TTHX > SEC Filings for TTHX > Form 10-Q on 20-May-2014All Recent SEC Filings

Show all filings for TRAIN TRAVEL HOLDINGS, INC.

Form 10-Q for TRAIN TRAVEL HOLDINGS, INC.


20-May-2014

Quarterly Report


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

GENERAL

This report on Form 10-Q and other reports filed by Train Travel Holdings, Inc. ("TTHX", " we," "us," "our," or the "Company") from time to time with the U.S. Securities and Exchange Commission (collectively, the "Filings") contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, the Company's management as well as estimates and assumptions made by Company's management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions as they relate to the Company or the Company's management identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks contained in elsewhere in this report, relating to the Company's industry, the Company's operations and results of operations, and any businesses that the Company may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. The Company was incorporated under the laws of the State of Nevada on September 7, 2012. Our registration statement has been filed with the Securities and Exchange Commission on January 30, 2013 and has been declared effective on July 5, 2013.

PLAN OF OPERATION

COFFEE OPERATIONS

Through December 31, 2013, we were an El Salvador based corporation that provided consulting services in commercial cultivation and processing of coffee in El Salvador.

We are a development stage company. From inception through December 2013 our business operations were limited primarily to, the development of a business plan, the completion of private placements for the offer and sale of our common stock, discussing the offers of consulting services with potential customers, and the signing of the service agreement with Finca La Esmeralda, a private El-Salvadorian company. From inception through December 31, 2013, the Company realized $8,870 in consulting fees pursuant to the signed service agreement. We discontinued our coffee business on January 23, 2014.

ENTERTAINMENT TRAIN OPERATIONS

Commencing January 23, 2014, our business changed to the acquisition and operation of Entertainment Train companies. We also manage and provide consulting services to Entertainment Train companies. We believe that there are several Entertainment Train companies that may be targeted for acquisition. Any acquisition will be contingent on our ability to obtain the necessary funding for such acquisition, as well as the acquisition candidate having audited financial statements.


RESULTS OF OPERATION

We are a development stage company with limited operations since Inception on September 7, 2012 through March 31, 2014. As of March 31, 2014, we had total assets of $29,679 and total liabilities of $315,497.We anticipate that we will continue to incur losses in the next 12 months while we acquire entertainment trains and until they generate positive cash flow. We expect we will require additional capital to meet our short term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Three Month Period Ended March 31, 2014 Compared to the Three Month Period Ended March 31, 2013

Our net loss for the three month period ended March 31, 2014 was $576,792 compared to a net loss of $3,323 for the three months ended March 31, 2013. During the three month period ended March 31, 2014, we generated revenues of $0.
Revenues of $2,470 were generated for the three months ended March 31, 2013.

During the three month period ended March 31, 2014, we incurred general and administrative expenses and professional fees of $576,792 compared to $5,793 incurred for the three months ended March 31, 2013. General and administrative and professional fee expenses incurred during the three month period ended March 31, 2014 were generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting, developmental costs associated with the acquisition and operation of Entertainment Trains, and marketing expenses. For the three months ended March 31, 2014 the Company a) put in place an operating structure for the identification and evaluation of Entertainment Train assets. This structure included management and operation specialists in the Entertainment Train industry, 2) set up a centralized reservation system for uniform reservation for all current and future Entertainment Train assets and 3) set up a centralized marketing team. During the three months ended March 31, 2014 The Company has an agreement for the purchase of the Columbia Star Dinner Train, located in Columbia, Mo. and signed a letter of intent to purchase the Dinner Trains of New England and is currently in the due diligence phase of the process. The Company signed a letter of intent to acquire the Napa Valley Wine Train. Through the Company's due diligence process it was determined that the purchase price needed to be adjusted downward and we were unable to close on the transaction.

The weighted average number of shares outstanding was 19,400,000 for the three month periods ended March 31, 2014 and 2013, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2014

As at March 31, 2014 our current assets were $29,679 compared to $2,178 in current assets at December 31, 2013. As of March 31, 2014 our current liabilities were $315,497. Current liabilities were mainly comprised of $312,303 in advance from Train Travel Holdings - Florida. Stockholders' equity (deficit) decreased from $(26) as of December 31, 2013 to $(285,818) as of March 31, 2014 primarily due to the loss from operations for the three months ended March 31, 2014.

Cash Flows from Operating Activities

For the three month period ended March 31, 2014, net cash flows provided by operating activities was $10. Net cash flows used in operating activities was $3,323 for the three months ended March 31, 2013.

Cash Flows from Investing Activities

We neither generated or used funds from investing activates during the three months ended March 31, 2014 or 2013.

Cash Flows from Financing Activities

. For the three month period ended March 31, 2014, we used $10 in financing activities in repaying a bank overdraft. For the three months ended March 31, 2013, we neither generated nor used funds from financing activities.


PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities for the short term until acquisition are identified and in place generating positive cash flow. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of inventory; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses (iv) acquiring existing entertainment train operations.. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet short-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

GOING CONCERN

As a result of our net loss from operations, net cash used in operations, deficit accumulated as of March 31, 2014, our ability to continue as a going concern is in substantial doubt. Our ability to continue as a going concern is subject to the ability of the Company to generate profits from operations and/or obtaining the necessary funding from outside sources. Management's plan to address the Company's ability to continue as a going concern includes (i) obtaining funding from private placement sources; (ii) obtaining additional funding from the sale of the Company's securities; and (iii) obtaining loans from shareholders as necessary, (iv) acquiring existing entertainment trains to generate cash flow from operations. Although management believes that it will be able to obtain the necessary funding and acquisitions to allow the Company to remain a going concern, and to pursue its' acquisition strategy through the methods discussed above, there can be no assurances that such methods will prove successful.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or results of its operations as reported in its financial statements

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

USE OF 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 the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION

The Company followed the guidance of the Securities and Exchange Commission's Staff Accounting Bulletin No. 104 for revenue recognition. The Company records revenue when all of the following have occurred; (1) persuasive evidence of an arrangement exists, (2) product delivery has occurred, (3) the sales price to the customer is fixed or determinable, and (4) collectability is reasonably assured. Revenue is recognized at point of sale.

The Company reported revenue net of sales and use taxes collected from customers and are remitted to governmental taxing authorities.


SHARE BASED PAYMENTS

Generally, all forms of share-based payments, including stock option grants, restricted stock grants and stock appreciation rights, are measured at their fair value on the awards' grant date, and based on the estimated number of awards that are ultimately expected to vest. Share-based payment awards issued to non-employees for services rendered are recorded at either the fair value of the services rendered or the fair value of the share-based payment, whichever is more readily determinable. The expense resulting from share-based payments are recorded as a component of general and administrative expense.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

ITEM 3.

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