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TTHX > SEC Filings for TTHX > Form 10-Q on 14-Aug-2014All Recent SEC Filings

Show all filings for TRAIN TRAVEL HOLDINGS, INC.

Form 10-Q for TRAIN TRAVEL HOLDINGS, INC.


14-Aug-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 January 23, 2014, 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 January 2014 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 January 23, 2014, 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 expect to 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 June 30, 2014. As of June 30, 2014, we had total assets of $114,634 and total liabilities of $353,276. We anticipate that we will continue to incur losses in the next 12 months while we acquire Entertainment Trains and 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. However, we do not have any firm commitments for any additional capital and there are no assurances that we will be able to raise equity or debt capital upon terms and conditions which are acceptable to us, if at all.

Three and Six Month Periods Ended June 30, 2014 Compared to the Three and Six Month Periods Ended June 30, 2013

During the three month period ended June 30, 2014, we generated revenues of $0. Revenues of $2,000 were generated for the three months ended June 30, 2013.

Our net loss for the three month period ended June 30, 2014 was $265,127 compared to a net loss of $2,975 for the three months ended June 30, 2013.

During the six month period ended June 30, 2014, we generated revenues of $0. Revenues of $4,470 were generated for the six months ended June 30, 2013.

Our net loss for the six month period ended June 30, 2014 was $841,919 compared to a net loss of $6,298 for the six months ended June 30, 2013

Operating Expenses

During the three month period ended June 30, 2014, we incurred general and administrative expenses and professional fees of $265,127 compared to $4,975 incurred for the three months ended June 30, 2013. During the six month period ended June 30, 2014, we incurred general and administrative expenses and professional fees of $841,919 compared to $10,768 incurred for the six months ended June 30, 2013. General and administrative and professional fee expenses incurred during the 2014 periods 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. During the 2014 periods the Company a) continued to 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) continued developing a centralized reservation system for uniform reservation for all current and future Entertainment Train assets and 3) continued to set up a centralized marketing team. During the 2014 periods the Company has a agreement for the purchase of the Columbia Star Dinner Train, located in Columbia, Mo. The agreement is subject to completion of an audit of Columbia Star Dinner Train financial statements and finalization of certain terms and conditions. The Company has 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 closing of any acquisition is subject to a number of conditions precedent, including our ability to raise any capital necessary for the transaction. Accordingly, investors should not place undue reliance on these letters of intent and we may never consummate any of these prospective transactions.


LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2014

As at June 30, 2014 our current assets were $114,634 compared to $2,178 in current assets at December 31, 2013. As of June 30, 2014 our current liabilities were $636,262 as compared to $2.204 at December 31, 2013. Current liabilities at June 30, 2014 mainly comprised of $662,278 in advances from Train Travel Holdings - Florida. Stockholders' equity (deficit) decreased from $(26) as of December 31, 2013 to $(521,628) as of June 30, 2014 primarily due to the loss from operations for the six months ended June 30, 2014 and the issuance of common stock for related party advances. We do not have working capital sufficient to pay our operating expenses and satisfy our obligations as they become due. If we are unable to raise capital as necessary to fund our current operations and implement our acquisition strategy, we may be unable to develop our business as currently planned. If we are unable to develop our business to a level to generate revenues sufficient to pay our operating expenses and satisfy our obligations, we may be unable to continue as a going concern.

Cash Flows from Operating Activities

For the six month period ended June, 2014, net cash flows provided used in operating activities was $151,585. Net cash flows used in operating activities was $11,976 for the six months ended June 30, 2013.

Cash Flows from Investing Activities

We neither generated or used funds from investing activates during the six months ended June 30, 2014 or 2013.

Cash Flows from Financing Activities

For the six month period ended June 30, 2014, we generated $151,585 from financing activities largely by way of advances from related parties. For the six months ended June 30, 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 issuances of securities for the short term and advances from a related party 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; (iii) marketing expenses; and (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.


GOING CONCERN

As a result of our net loss from operations, net cash used in operations, deficit accumulated as of June 30, 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; (iii) obtaining loans from shareholders as necessary; and (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 is in the development stage as defined under the then current Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 915-205 "Development-Stage Entities," and among the additional disclosures required as a development stage company are that our financial statements were identified as those of a development stage company, and that the statements of operations, stockholders' deficit and cash flows disclosed activity since the date of our inception (June 15, 2011) as a development stage company. Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has not elected to early adopt these provisions and consequently these additional disclosures are included in these financial statements.

The Company does not believe that other than disclosed above, recently issued, but not yet adopted, accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 1 to our unaudited financial statements appearing elsewhere in this report.

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.

ITEM 3.

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