UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q/A
(Mark
One)
x
QUARTERLY REPORT UNDER
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For
Quarterly Period Ended September 30, 2008
or
o
TRANSITION REPORT UNDER
SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the
Transition period from _______________ to ______________
|
Commission
File Number: 000-10210
|
|
|
|
|
|
TREE
TOP INDUSTRIES, INC.
|
|
|
(Exact
name of registrant as specified in its charter)
|
|
|
|
|
NEVADA
|
|
83-0250943
|
(State or
other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
|
|
|
|
264
SOUTH LA CIENEGA BOULEVARD, SUITE 1010,
BEVERLY
HILLS, CALIFORNIA 90211
|
|
|
(Address
of principal executive offices) (Zip Code)
|
|
|
|
|
|
(310)
601-4595
|
|
|
Registrant's
telephone number, including area code
|
|
|
|
|
|
|
|
|
(Former
name, former address and former fiscal year,
if
changed since last report)
|
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
proceeding 12 months (or for such shorter period that the
registrant was required to file
such reports), and (2)
has been subject to
such filing
requirements
for the past 90 days.
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and
“smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
One).
|
Large
accelerated filer
|
o
|
Accelerated
filer
|
o
|
|
Non-accelerated
filer
|
o
|
Smaller
reporting company
|
x
|
|
(Do
not check if a smaller reporting company)
|
|
|
|
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Indicate
the number of shares outstanding of each of the issuer's classes of common stock
as of the latest practicable date.
As of
September 30, 2008 the number of shares outstanding of the registrant's
class of
common stock was 47,328,400.
|
TABLE
OF CONTENTS
|
|
|
|
PAGES
|
PART
I.
|
FINANCIAL
INFORMATION
|
1
|
|
|
|
Item
1.
|
Financial
Statements (Unaudited)
|
1
|
|
Consolidated
Balance Sheets at September 30, 2008 (Unaudited) and
December
31, 2007 (Audited)
|
1
|
|
Consolidated
Statements of Operations for the Three Months Ended
September
30, 2008, the Nine Months Ended September 30, 2008, from
Inception,
August 1, 2007, through September 30, 2007, and from I
nception,
August 1, 2007, through September 30, 2008
(Unaudited)
|
2
|
|
Consolidated
Statements of Stockholders' Equity (Deficit) from I
nception
through September 30, 2008 (Unaudited)
|
3
|
|
Consolidated
Statements of Cash Flows for the Nine Months Ended
September
30, 2008, from Inception, August 1, 2007, through
September
30, 2007, and from Inception, August 1, 2007,
through
September 30, 2008 (Unaudited)
|
4
|
|
Notes
to Consolidated Financial Statements
|
6
|
|
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and
Results
of Operations.
|
9
|
|
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
11
|
|
|
|
Item
4T.
|
Controls and
Procedures
|
12
|
|
|
|
PART
II.
|
OTHER
INFORMATION
|
14
|
|
|
|
Item
1.
|
Legal
Proceedings
|
14
|
|
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
14
|
|
|
|
Item
3.
|
Defaults Upon
Senior Securities
|
14
|
|
|
|
Item
4.
|
Submission of
Matters to a Vote of Security Holders
|
14
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|
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|
Item
5.
|
Other
Information
|
14
|
|
|
|
Item
6.
|
Exhibits
|
14
|
|
|
|
|
SIGNATURES
|
15
|
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
TREE TOP INDUSTRIES, INC.
(A Development Stage Company)
Consoldiated Balance Sheets
ASSETS
|
|
|
|
September 30,
2008
|
|
|
December
31,
2007
|
|
|
|
(unaudited)
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash
|
|
$
|
144,076
|
|
|
$
|
435,858
|
|
Employee
advances
|
|
|
367
|
|
|
|
6,400
|
|
Total
Current Assets
|
|
|
144,443
|
|
|
|
442,258
|
|
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET
|
|
|
128,228
|
|
|
|
71,973
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
Security
deposit
|
|
|
12,424
|
|
|
|
12,424
|
|
Total
Other Assets
|
|
|
12,424
|
|
|
|
12,424
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
285,095
|
|
|
$
|
526,655
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
412,212
|
|
|
$
|
363,451
|
|
Accrued
expenses
|
|
|
371,443
|
|
|
|
344,591
|
|
Accrued
interest payable
|
|
|
48,158
|
|
|
|
45,560
|
|
Due
to officers and directors
|
|
|
15,122
|
|
|
|
170,367
|
|
Notes
payable
|
|
|
113,000
|
|
|
|
113,000
|
|
Total
Current Liabilities
|
|
|
959,935
|
|
|
|
1,036,969
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.001 par value, 50,000 shares authorized, -0- shares issued and
outstanding
|
|
|
-
|
|
|
|
-
|
|
Common
stock, $0.001 par value, 350,000,000 shares authorized 48,828,400 and
72,327,791 shares issued and outstanding
|
|
|
4,883
|
|
|
|
7,233
|
|
Additional
paid-in capital
|
|
|
7,040,213
|
|
|
|
5,139,775
|
|
Deficit
accumulated during the development stage
|
|
|
(7,719,936
|
)
|
|
|
(5,657,322
|
)
|
Total
Stockholders’ Equity (Deficit)
|
|
|
(674,840
|
)
|
|
|
(510,314
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABLITIES & STOCKOLDERS’ EQUITY
|
|
$
|
285,095
|
|
|
$
|
526,655
|
|
The
accompanying notes are an integral part of these consoldiated financial
statements.
TREE TOP
INDUSTRIES, INC.
(A
Development Stage Company)
Consolidated Statements of Operations
(unaudited)
|
|
For
the Three Months Ended September 30,
2008
|
|
|
From Inception
on
August 1,
2007
through September 30,
2007
|
|
|
For
the Nine Months Ended September 30,
2008
|
|
|
From
Inception
on
August 1,
2007
through September 30,
2007
|
|
|
From
Inception
on
August 1,
2007
through September 30,
2008
|
|
REVENUES,
net
|
|
$
|
2,967
|
|
|
$
|
-
|
|
|
$
|
2,967
|
|
|
$
|
-
|
|
|
$
|
2,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF SALES, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
2,967
|
|
|
|
-
|
|
|
|
2,967
|
|
|
|
-
|
|
|
|
2,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
396,294
|
|
|
|
5,826
|
|
|
|
894,848
|
|
|
|
5,826
|
|
|
|
3,515,944
|
|
Officer
compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
313,491
|
|
|
|
-
|
|
|
|
2,841,201
|
|
Professional
fees
|
|
|
45,909
|
|
|
|
-
|
|
|
|
841,143
|
|
|
|
-
|
|
|
|
1,347,281
|
|
Depreciation
|
|
|
3,920
|
|
|
|
-
|
|
|
|
12,158
|
|
|
|
-
|
|
|
|
13,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
446,123
|
|
|
|
5,826
|
|
|
|
2,061,640
|
|
|
|
5,826
|
|
|
|
7,718,193
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(443,156
|
)
|
|
|
(5,826
|
)
|
|
|
(2,058,673
|
)
|
|
|
(5,826
|
)
|
|
|
(7,715,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(1,716
|
)
|
|
|
-
|
|
|
|
(3,941
|
)
|
|
|
-
|
|
|
|
(4,710
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expenses)
|
|
|
(1,716
|
)
|
|
|
-
|
|
|
|
(3,941
|
)
|
|
|
-
|
|
|
|
(4,710
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE INCOME TAXES
|
|
|
(444,872
|
)
|
|
|
(5,826
|
)
|
|
|
(2,062,614
|
)
|
|
|
(5,826
|
)
|
|
|
(7,719,936
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME
TAX EXPENSE
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(444,872
|
)
|
|
$
|
(5,826
|
)
|
|
$
|
(2,062,614
|
)
|
|
$
|
(5,826
|
)
|
|
$
|
(7,719,936
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
NET LOSS PER SHARE
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
|
|
|
48,828,400
|
|
|
|
68,000,000
|
|
|
|
56,600,297
|
|
|
|
68,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consoldiated financial
statements.
TREE TOP
INDUSTRIES, INC.
(A
Development Stage Company)
Consolidated Statements of Stockholders' Equity
(Deficit)
(unaudited)
|
|
Preferred
Stock
|
|
|
Common Stock
|
|
|
Additional
Paid-In
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
August
1, 2007 (inception)
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of founder shares at
inception
at $0.007 per share
|
|
|
-
|
|
|
|
-
|
|
|
|
68,000,000
|
|
|
|
68,000
|
|
|
|
432,000
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issue in recapitalization
|
|
|
-
|
|
|
|
-
|
|
|
|
987,791
|
|
|
|
988
|
|
|
|
(988
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options issued for services
at
$0.74 per share
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,494,298
|
|
|
|
-
|
|
|
|
1,494,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options issued for cash at
$0.10
per share
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
200,000
|
|
|
|
-
|
|
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options issued for services
at
$0.85 per share
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
126,210
|
|
|
|
-
|
|
|
|
126,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
of stock options at $0.25
per
share
|
|
|
-
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
500
|
|
|
|
124,500
|
|
|
|
-
|
|
|
|
125,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services at
$0.85
per share
|
|
|
-
|
|
|
|
-
|
|
|
|
2,590,000
|
|
|
|
2,590
|
|
|
|
2,198,910
|
|
|
|
-
|
|
|
|
2,201,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services at
$2.00
per share
|
|
|
-
|
|
|
|
-
|
|
|
|
250,000
|
|
|
|
250
|
|
|
|
499,750
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
in par value to $0.001
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(65,095
|
)
|
|
|
65,095
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year ended
December
31, 2007
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,657,322
|
)
|
|
|
(5,657,322
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December
31, 2007
|
|
|
-
|
|
|
|
-
|
|
|
|
72,327,791
|
|
|
|
7,233
|
|
|
|
5,139,775
|
|
|
|
(5,657,322
|
)
|
|
|
(510,314
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fractional
shares
|
|
|
-
|
|
|
|
-
|
|
|
|
609
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
of stock options at $0.25
per
share
|
|
|
-
|
|
|
|
-
|
|
|
|
1,100,000
|
|
|
|
110
|
|
|
|
724,890
|
|
|
|
-
|
|
|
|
725,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock cancelled
|
|
|
-
|
|
|
|
-
|
|
|
|
(24,600,000
|
)
|
|
|
(2,460
|
)
|
|
|
2,460
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options issued for services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,173,088
|
|
|
|
-
|
|
|
|
1,173,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the nine months
ended September
30, 2008
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,062,614
|
)
|
|
|
(2,062,614
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
September 30,
2008
|
|
|
-
|
|
|
$
|
-
|
|
|
|
48,828,400
|
|
|
$
|
4,883
|
|
|
$
|
7,040,213
|
|
|
$
|
(7,719,936
|
)
|
|
$
|
(674,840
|
)
|
The
accompanying notes are an integral part of these consoldiated financial
statements.
TREE TOP
INDUSTRIES, INC.
(A
Development Stage Company)
Consolidated Statements of Cash Flows
(unaudited)
|
|
For
the Nine Months Ended September 30,
2008
|
|
|
From
Inception
on
August 1,
2007
through
September
30,
2007
|
|
|
From
Inception
on
August 1,
2007
through
September
30,
2008
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(2,062,614
|
)
|
|
$
|
(5,826
|
)
|
|
$
|
(7,719,936
|
)
|
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
12,158
|
|
|
|
-
|
|
|
|
13,767
|
|
Stock
options and warrants granted for services rendered
|
|
|
1,173,088
|
|
|
|
-
|
|
|
|
2,793,596
|
|
Changes
in operating assets and liabilities:
|
|
|
-
|
|
|
|
-
|
|
|
|
2,701,500
|
|
(Increase)
Decrease in employee advances
|
|
|
6,033
|
|
|
|
-
|
|
|
|
(367
|
)
|
(Increase)
Decrease in security deposits
|
|
|
-
|
|
|
|
(12,424
|
)
|
|
|
(12,424
|
)
|
Increase
(Decrease) in accounts payable and accrued expenses
|
|
|
78,211
|
|
|
|
-
|
|
|
|
732,948
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Operating Activities
|
|
|
(793,124
|
)
|
|
|
(18,250
|
)
|
|
|
(1,490,916
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
received in acquisition
|
|
|
-
|
|
|
|
-
|
|
|
|
44,303
|
|
Cash
paid for property and equipment
|
|
|
(68,413
|
)
|
|
|
(6,036
|
)
|
|
|
(141,995
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Used in Investing Activities
|
|
|
(68,413
|
)
|
|
|
(6,036
|
)
|
|
|
(97,692
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment
of related party loans
|
|
|
(193,365
|
)
|
|
|
-
|
|
|
|
(253,120
|
)
|
Cash
received from issuance of common stock
|
|
|
725,000
|
|
|
|
500,000
|
|
|
|
1,550,000
|
|
Cash
received from related party loans
|
|
|
38,120
|
|
|
|
-
|
|
|
|
435,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
569,755
|
|
|
|
500,000
|
|
|
|
1,732,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH
|
|
|
(291,782
|
)
|
|
|
475,714
|
|
|
|
144,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AT BEGINNING OF PERIOD
|
|
|
435,858
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AT END OF PERIOD
|
|
$
|
144,076
|
|
|
$
|
475,714
|
|
|
$
|
144,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these consoldiated financial
statements.
TREE TOP
INDUSTRIES, INC.
(A
Development Stage Company)
Consolidated
Statements of Cash Flows (Continued)
(unaudited)
|
|
For
the Nine Months Ended September 30,
2008
|
|
|
From
Inception
on
August 1,
2007
through September 30,
2007
|
|
|
From
Inception
on
August 1,
2007
through September 30,
2008
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
CASH
PAID FOR
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
567
|
|
|
$
|
-
|
|
|
$
|
567
|
|
Income
Taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON
CASH TRANSACTIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock issued for services
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,701,500
|
|
The
accompanying notes are an integral part of these consoldiated financial
statements.
TREE
TOP INDUSTRIES, INC.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
INTERIM PRESENTATION
Initially, we
reported the transaction between Tree Top Industries, Inc. (the “Company”) and
Ludicrous, Inc. (“Ludicrous”) as a purchase. Subsequently, the Company, along
with the independent auditors and legal counsel, determined that such
transaction should instead be treated as a reverse merger. The financial
statements were restated to account for the change in treatment. The
December 31, 2007 balance sheet data was derived from audited financial
statements but does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, the accompanying unaudited
financial statements contain all normal and recurring adjustments necessary to
present fairly the financial position of the Company as of September 30, 2008,
its results of operations for the three months and nine months ended September
30, 2008 and 2007 and its cash flows for the nine months ended September 30,
2008 and 2007. The statements of operations for the three months and nine months
ended September 30, 2008 and 2007 are not necessarily indicative of the results
for the full year.
While the
Company believes that the disclosures presented are adequate to make the
information not misleading, these financial statements should be read in
conjunction with the financial statements and accompanying notes included in the
Company's annual Report on Form 10-KSB for the year ended December 31,
2007.
2. GOING
CONCERN
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. The Company has incurred accumulated losses
totaling $7,719,936, has a working capital deficit of $815,492 and is in default
on several notes payable (see Note 5).
Since
inception (August 1, 2007) through September 30, 2008, the Company has not
generated any significant business. Through the date of these financial
statements viable operations have not been achieved and the Company has been
unsuccessful in raising all the capital that it requires. Revenues have been
minimal and the Company continues to require substantial financing. Most of the
financing has been provided by David Reichman, the present Chief Executive
Officer, Chairman and President. The Company is dependent upon his ability and
willingness to continue to provide such financing which is required to meet
reporting and filing requirements of a public company.
In order for
the Company to remain a going concern, it will need to continue to receive funds
from the exercise of outstanding warrants and options or through other equity or
debt financing. There can be no assurance that the Company will continue to
receive any proceeds from the exercise of warrants or options or that the
Company will be able to obtain the necessary funds to finance its operations.
These conditions raise substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
3.
SIGNIFICANT ACCOUNTING POLICIES
Please refer
to the Company's Form 10-KSB for the year ended December 31, 2007 for its
significant accounting policies.
4.
EARNINGS (LOSS) PER SHARE
The Company
computes earnings or loss per share in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS 128), "Earning per Share". Basic earnings per
share are computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding. Diluted earnings per share
reflect the potential dilution that could occur insecurities 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, which includes
convertible debentures, stock options and warrants. The calculation of basic and
diluted income (loss) per share for the three months and six months is as
follows:
TREE
TOP INDUSTRIES, INC.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
|
|
September
30,
|
|
|
|
2008
|
|
|
2007
|
|
Net
income (loss)
|
|
$
|
(2,062,614
|
)
|
|
$
|
(5,826
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding - basic
|
|
|
56,600,297
|
|
|
|
68,000,000
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) - per share - basic
|
|
$
|
(0.04
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding - basic
|
|
|
|
|
|
|
|
|
Dilutive
options
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding - diluted
|
|
|
56,600,297
|
|
|
|
68,000,000
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) - per share - diluted
|
|
$
|
(0.04
|
)
|
|
$
|
(0.00
|
)
|
5. NOTES
PAYABLE
Notes payable
consist of various notes bearing interest at rates from 5% to 7%, all with
original due dates between August 2000 and September 2002. All of the notes are
unpaid to date and are in default.
At September
30, 2008, notes payable amounted to $113,000. The notes payable were assumed in
the acquisition of Tree Top.
At September
30, 2008, accrued interest on the notes was $48,158. Interest expense on the
notes amounted to $3,941 for the nine months ended September 30,
2008.
6.
RELATED PARTY TRANSACTIONS
Due to
officers and directors consists of advances primarily from David Reichman, CEO,
President and Chairman of the Company. The advances are due on demand and do not
bear interest. The balance owing to Mr. Reichman is $12,225 at September 30,
2008.7.
7. STOCKHOLDERS'
EQUITY
On December
26, 2007, the Company's Board of Directors approved for issuance 250,000 stock
options to each of its four directors, to be issued effective January 1, 2008,
with an exercise price of $4.50 per share, expiring October 8, 2008. The options
vest 1/24th upon grant and then 1/24th each subsequent month. The fair value of
the options as calculated under the Black-Scholes model totaled $1,993,000. For
the nine months ended September 30, 2008, the Company recognized $498,250 of
compensation expense related to these options. The fair value of these options
was determined using the following assumptions: risk free rate of 3.39%, no
dividend yield, an expected life of five years and a volatility factor of
271.7%. During the nine months ended September 30, 2008, the Company recorded
the value of 1,000,000 stock options issued to a shareholder with an at an
exercise price of $1.00 per share, expiring October 8, 2998. The fair value of
the options as calculated under the Black-Scholes model totaled $548,628 which
was recorded as compensation expense. The fair value of these options was
determined using the following assumptions: risk free rate of 4.33%, no dividend
yield, an expected life of five years and a volatility factor of
275.6%.
TREE
TOP INDUSTRIES, INC.
NOTES
TO FINANCIAL STATEMENTS
(Unaudited)
The Company
also recorded $126,210 of compensation expense relating to the amortization of
the October 1, 2007 options issued to David Reichman under his employment
contract.
During the
nine months ended September 30, 2008, 1,100,000 shares of the Company’s common
stock were issued in exchange for the exercise of stock options:
DATE
|
|
OPTIONS
EXERCISED
|
|
|
PROCEEDS
|
|
January
16, 2008
|
|
|
250,000
|
|
|
$
|
62,500
|
|
March
26, 2008
|
|
|
250,000
|
|
|
|
62,500
|
|
March
26, 2008
|
|
|
600,000
|
|
|
|
600,000
|
|
Total
|
|
|
1,100,000
|
|
|
$
|
725,000
|
|
8. RECENT
PRONOUNCEMENTS
In May 2008,
the Financial Accounting Standards Board ("FASB") issued SFAS No. 163,
“ACCOUNTING FOR FINANCIAL GUARANTEE INSURANCE CONTRACTS-AND INTERPRETATION OF
FASB STATEMENT NO. 60". SFAS No. 163 clarifies how Statement60 applies to
financial guarantee insurance contracts, including the recognition and
measurement of premium revenue and claims liabilities. This statement also
requires expanded disclosures about financial guarantee insurance contracts.
SFAS No. 163 is effective for fiscal years beginning on or after December 15,
2008, and interim periods within those years. SFAS No. 163 has no effect on the
Company’s financial position, statements of operations, or cash flows at this
time.
In May 2008,
the Financial Accounting Standards Board ("FASB") issued SFAS No. 162, "THE
HIERARCHY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES". SFAS No. 162 sets forth
the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES--AN AMENDMENT OF
FASB STATEMENT NO. 133. This standard requires companies to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c)how derivative instruments
and related hedged items affect an entity's financial position, financial
performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. The Company has not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a material impact on
its consolidated financial position, results of operations or cash
flows.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
This
Quarterly Report on Form 10-Q for the period ended September 30, 2008 (the “Form
10-Q/A”), was initially amended in order to conform to changes made to the
Quarterly Report on Form 10-Q for the periods ended March 31, 2008 and June 30,
2008 of Tree Top Industries, Inc. (“TTI”) in response to comments from the
Securities and Exchange Commission (“SEC”). This Form 10-Q/A has been
amended further in order to more fully and accurately disclose the information
required by the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), including the disclosure related to our internal controls and procedures
and controls over financial reporting.
CAUTIONARY
STATEMENTS
This Form
10-Q/A may contain "forward-looking statements," as that term is used in federal
securities laws, about TTI's financial condition, results of operations and
business. These statements include, among others:
-
statements
concerning the potential benefits that TTI (also, the "Company")
may experience from its business activities and certain transactions it
contemplates or has completed; and
-
statements of TTI's expectations, beliefs, future plans and
strategies, anticipated developments and other matters that are not
historical facts. These statements may be made expressly in this Form 10-Q/A.
You can find many of these statements by looking for words such as "believes,"
"expects," "anticipates," "estimates," "opines," or similar expressions used
in this Form 10-Q/A. These forward-looking statements are subject to numerous
assumptions, risks and uncertainties that may cause TTI's actual results to be
materially different from any future results expressed or implied by TTI in
those statements. The most important facts that could prevent TTI from
achieving its stated goals include, but are not limited to, the
following:
(a)
|
volatility or
decline of TTI's stock price;
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|
|
(b)
|
potential
fluctuation of quarterly results;
|
|
|
(c)
|
failure of TTI
to earn revenues or profits;
|
|
|
(d)
|
inadequate
capital to continue or expand its business, and inability to raise
additional capital or financing to implement its business
plans;
|
|
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(e)
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failure to
commercialize TTI's technology or to make sales;
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(f)
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decline in
demand for TTI's products and services;
|
|
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(g)
|
rapid adverse
changes in markets;
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(h)
|
litigation
with or legal claims and allegations by outside
parties
against TTI, including but not limited to challenges
to
TTI's intellectual property rights;
|
|
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(i)
|
insufficient
revenues to cover operating costs;
|
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(j)
|
failure of
NetThruster.com(R) to acquire or develop and
profitably
operate a new business to replace its old content
delivery
business model, which is no longer being implemented,
and
|
|
|
(k)
|
competition
from other businesses and technologies that
materially
adversely impacts TTI's operations, financial c
ondition
and business performance.
|
There is no
assurance that TTI will be profitable, TTI may not be able to successfully
develop, manage or market its products and services, TTI may not be able to
attract or retain qualified executives and technology personnel, TTI may not be
able to obtain customers for its products or services, TTI's products and
services may become obsolete, government regulation may hinder TTI's business,
additional dilution in outstanding stock ownership may be incurred due to the
issuance of more shares, warrants and stock options, or the exercise of
outstanding warrants and stock options, and other risks inherent in TTI's
businesses.
Because the
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by the forward-looking statements.
TTI cautions you not to place undue reliance on the statements, which speak only
as of the date of this Form 10-Q/A. The cautionary statements contained or
referred to in this section should be considered in connection with any
subsequent written or oral forward-looking statements that TTI or persons acting
on its behalf may issue. TTI does not undertake any obligation to review or
confirm analysts' expectations or estimates or to release publicly any revisions
to any forward-looking statements to reflect events or circumstances after the
date of this Form 10-Q/A, or to reflect the occurrence of unanticipated
events.
CURRENT
OVERVIEW
Our business
is operated through Ludicrous. Ludicrous was formed on August 1, 2007 to
engage in the installation and operation of its network for commercialization of
its proprietary technology for content delivery for the telecommunications
industry. The new content delivery network developed by Ludicrous is called
NetThruster.com®. NetThruster is a content delivery network for Internet
distribution of video, music, games and downloads. NetThruster’s advanced
network is designed to provide media companies with high-performance,
cost-effective delivery of high bandwidth media and software via the Internet.
We are in the process of reevaluating and reorienting our business. With
NetThruster, Ludicrous has successfully broadcast live streaming video of events
pursuant to event based contracts resulting in minimal revenue to date.
This capability may be used by another TTI subsidiary, MLN,Inc., a Delaware
corporation(“MLN”), in the operation of MLN's new Internet website.
NetThruster also has worked out the necessary hardware equipment designs to
support the Internet background logistics of MLN’s coming website, My Lord’s
Network. NetThruster may be employed to implement and maintain the website's
operational equipment.
The operation
of this website is the primary business of MLN. MLN has completed the research
and planning necessary to create the website and its supporting business. The
focus of the website is the worldwide Christian community but with the initial
enrollment emphasis on Christians in the United States. The website is designed
to facilitate interaction between enrolled individual members and, in addition,
provide information about Christian churches, both their location and events.
MLN plans to contract for creation of the initial website and expects to make
its revenues through the ongoing operation of the website (through subscriptions
fees and advertising).
My Lord’s
Network will be designed to bring together members of the Christian community in
an arena that provides an opportunity for online social networking and
information about church activities across the community. It will strive to
provide up-to-date information from its church and ministry members to the
individual members. It plans to offer Christian-oriented contemporary news as
well.
The primary
business model is a content-based Internet website. Individual members will join
for free and receive the basic website services. Individual members may enroll
with optional yearly fees for additional premium website services. Individual
churches will pay a yearly membership fee for services that will enable a church
to upload and update church information including a current event schedule and,
for an additional amount, weekly videos of the pastor's sermon. There are
several sources for the site's actual content. Some sources are simple
information pages plus there may be on-demand video downloads. The website plans
to have three basic kinds of information pages: each enrolled individual will
have his/her own page; each enrolled church will have its own page; and each
enrolled ministry will have its own page. The information contained on each type
of page is unique. If a sufficient number of people have joined, it will become
profitable to sell advertising since a guaranteed audience will exist.
Advertising may be either nationwide (or even worldwide) or local since the
website will have geographical information about its members and can target
advertising based upon that information.
Each church
page will have location and activity information for that church. Each church
has the ability to continually update its activity or event schedule so that
when its page is visited, the information will be topical. Each enrolled church
will be able to continuously update the church's web page with topical
information. The ministry pages will be customized for each ministry and feature
information unique to each particular ministry. Many ministries sell products
such as books and videos on their own websites and My Lord's Network plans to
offer these same products on its site. Advertising revenues can be realized once
a sufficient number of individuals have joined the site and provided their
demographic information.
CRITICAL
ACCOUNTING POLICIES
Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. We
monitor our estimates on an on-going basis for changes in facts and
circumstances, and material changes in these estimates could occur in the
future. Changes in estimates are recorded in the period in which they become
known. We base our estimates on historical experience and other assumptions that
we believe to be reasonable under the circumstances. Actual results may differ
from our estimates if past experience or other assumptions do not turn out to be
substantially accurate.
Certain of
our accounting policies are particularly important to the portrayal and
understanding of our financial position and results of operations and require us
to apply significant judgment in their application. As a result, these policies
are subject to an inherent degree of uncertainty. In applying these policies, we
use our judgment in making certain assumption and estimates. Our critical
accounting policies are described in our Annual Report on Form10-KSB for the
year ended December 31, 2007. There have been no material changes to our
critical accounting policies as of September 30, 2008 and for the six months
then ended.
RESULTS
OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO FROM
INCEPTION THROUGH SEPTEMBER 30, 2007
We had
revenue in the first nine months of 2008 of $2,967 compared to $0 in 2007. The
increase in revenue is due to the Company becoming a software development
company for which no revenue has yet been generated.
Our operating
expenses increased from $5,826 in 2007 to $2,061,640 in the same period of 2008,
primarily due to an increase in stock based compensation expense to officers,
directors and a shareholder aggregating $1,173,088 in 2008, and the ramp up of
the Company's software development
business and
associated general and administrative expenses. Our net loss was $2,062,614 in
the first nine months of 2008 compared to net loss of $5,826 in the same period
of 2007.
LIQUIDITY
AND CAPITAL RESOURCES
The Company's
cash position was $144,076 at September 30, 2008 compared to $435,858 at
December 31, 2007. The decrease in cash is attributable to cash proceeds from
the exercise of stock options of $725,000, offset by repayments of officer's
loans and cash utilized in operating activities.
As of
September 30, 2008, the Company had current assets of $144,443and current
liabilities of $959,935. Net cash used in operating activities amounted to
$948,369 for the nine month period ended September 30, 2008, as compared to
$16,554 of net cash provided by operations from inception through September 30,
2007. The primary reason for the higher utilization of cash in 2008 was to fund
the new software development business of the Company. Net cash provided by
financing activities amounted to a $725,000 and $500,000 for the nine months
ended September 30, 2008 and 2007, respectively. The increase in 2008 resulted
from the exercise of stock options. The Company had net repayments of officers'
loans of $155,245.
The Company
does not have sufficient capital to meet its current cash needs, which include
the costs of compliance with the continuing reporting requirements of the
Securities Exchange Act of 1934, as amended. The Company intends to seek
additional capital and long-term debt financing to attempt to overcome its
working capital deficit. The Company will need between $150,000 and $200,000
annually to maintain its reporting obligations. If a financing option is
available to the Company, it is expected that it would primarily be through a
private placement of stock to prospective investors or future strategic
partners. The Company will seek to raise sufficient capital to market
NetThruster.com and to sustain monthly operations. There is no assurance,
however, that the available funds will be available or adequate. Its need for
additional financing is likely to persist.
GOING
CONCERN QUALIFICATION
The
Company has incurred significant losses from operations, and such losses are
expected to continue. The Company’s auditors have included a "Going Concern
Qualification" in their report for the year ended December 31, 2007. In
addition, the Company has limited working capital. The foregoing raises
substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans include seeking additional capital and/or debt financing.
There is no guarantee that additional capital and/or debt financing will be
available when and to the extent required, or that if available, it will be on
terms acceptable to the Company. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty. The "Going
Concern Qualification” may make it substantially more difficult to raise
capital.
OFF-BALANCE
SHEET ARRANGEMENTS
We have
no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Not
Applicable.
ITEM 4T. CONTROLS AND
PROCEDURES
EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES
As
required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, we carried out
an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this Quarterly
Report. This evaluation was carried out under the supervision and with the
participation of our Chief Executive Officer and our Principal Accounting
Officer.
We
maintain a set of disclosure controls and procedures designed to ensure that
information required to be disclosed by TTI in reports filed under the
Securities Exchange Act of 1934 as amended, is recorded, processed, summarized
and reported within the time periods specified by the SEC's rules and forms.
Disclosure controls are also designed with the objective of ensuring that
this information is accumulated and communicated to our management,
including our Chief Executive Officer and Principal Accounting Officer, as
appropriate, to allow timely decisions regarding required
disclosure.
Based
upon his evaluation as of the end of the period covered by this report, our
Chief Executive Officer and Principal Accounting Officer concluded that our
disclosure controls and procedures are not effective to ensure that information
required to be included in our periodic filings with the SEC are recorded,
processed, summarized, and reported within the time periods specified in the SEC
rules and forms, due to certain weaknesses in the internal control over our
financial reporting.
INTERNAL
CONTROL OVER FINANCIAL REPORTING
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Exchange Act). Our internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes of
accounting principles generally accepted in the United States. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives.
At the
end of 2007, Section 404 of the Sarbanes-Oxley Act required our management to
provide an assessment of the effectiveness of our internal control over
financial reporting, and at the end of 2009, our independent registered public
accountants will be required to audit management's assessment. We completed our
assessment for the fiscal year ended December 31, 2007 and identified the
following material weaknesses which continued to exist at the end of our third
fiscal quarter ending September 30, 2008:
-
We have been deficient in our
interpretation of generally accepted accounting principles ("GAAP") and in
verifying our interpretations by conferring with additional qualified outside
consultants, as well as our independent certified public accountants. In
particular, we were deficit in our interpretation of the application of
GAAP to our business combination with Ludicrous, Inc. (now
NetThruster, Inc.), our wholly owned subsidiary, and the effect of
our voting trust agreements on the manner in which we would report
that business combination under GAAP.
Because
of the material weaknesses noted above, management concluded that we did not
maintain effective internal control over financial reporting as of December 31,
2007, based on INTERNAL CONTROL OVER FINANCIAL REPORTING -GUIDANCE FOR SMALLER
PUBLIC COMPANIES issued by ("COSO"). Accordingly, the Company has restated its
financial statements for the fiscal quarter ending September 30, 2008, as
contained in this Amended Quarterly Report.
We are in
the process of implementing remediation efforts with respect to the material
weaknesses which include:
-
We have
established a system of external verification of our interpretations of GAAP
with respect to all of our financial reporting obligations, by retaining and
conferring with our private certified public accountant, who is now an outside
consultant to the Company, in conjunction with ongoing consultation
with our independent certified public accounting firm that performs
the audit of our financial statements.
We
believe the foregoing efforts will enable us to improve our internal control
over financial reporting. Management is committed to continuing efforts aimed at
improving the design adequacy and operational effectiveness of its system of
internal controls. The remediation efforts noted above will be subject to our
internal control assessment, testing and evaluation process.
In
connection with the filing of this first amended Quarterly Report on Form
10-Q/A, we have modified our internal controls over financial reporting to
establish a verification procedure, including conferring with qualified outside
professional consultants, to verify our ongoing interpretation of GAAP to our
financial reporting requirements.
CHANGES
IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
Other
than the modification to our internal controls over financial reporting which
established a verification procedure, including conferring with qualified
outside professional consultants, to verify our ongoing interpretation of GAAP,
as described above, there have been no changes in our internal controls over
financial reporting during the most recent fiscal quarter that have materially
affected, or are reasonable likely to materially affect, our internal controls
over financial reporting.
INHERENT
LIMITATIONS ON EFFECTIVENESS OF CONTROLS
TTI’s
management does not expect that its disclosure controls or its internal control
over financial reporting will prevent or detect all error and all fraud. A
control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system’s objectives will be
met. The design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered
relative to their costs. Further, because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance
that misstatements due to error or fraud will not occur or that all control
issues and instances of fraud, if any, within TTI have been detected. These
inherent limitations include the realities that judgments in decision making can
be faulty and that breakdowns can occur because of simple error or mistake.
Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or management override of the
controls. The design of any system of controls is based in part on certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Projections of any evaluation of controls effectiveness to
future periods are subject to risks. Over time, controls may become
inadequate because of changes in conditions or deterioration in the degree of
compliance with policies or procedures.
Our
disclosure controls and procedures are designed to provide reasonable assurance
of that our reports will be accurate. Our Chief Executive Officer and
Principal Accounting Officer concludes that our disclosure controls and
procedures were ineffective at that reasonable assurance level, as of the end of
the period covered by this Form 10-Q/A. Our future reports shall also indicate
that our disclosure controls and procedures are designed for this reason and
shall indicate the related conclusion by the Chief Executive Officer and
Principal Accounting Officer as to their effectiveness.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
TTI’s
shareholders have harassed the Company both in private and in public, as well as
its officers and the officers of one of the Company’s subsidiaries, in an
apparent attempt to civilly extort money from the Company. To address the
allegedly libelous claims made by the shareholder, TTI has filed suit in United
States District Court. The suit seeks redress in the form of enjoining the
shareholder from any further harassment and in the form of damages from the
shareholder and others who have allegedly abetted the shareholder’s actions. TTI
is confident of prevailing in this suit although there is no assurance regarding
the results of litigation.
ITEM 1A.-RISK FACTORS
WE DID
NOT TIMELY FILE WITH THE SEC OUR FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER
31, 2007. AS A RESULT OF THIS DELAYED FILING, WE ARE CURRENTLY INELIGIBLE TO USE
FORM S-3 TO REGISTER SECURITIES WITH THE SEC IN CAPITAL-RAISING TRANSACTIONS,
WHICH MAY ADVERSELY AFFECT OUR COST OF FUTURE CAPITAL.
We did
not timely file with the SEC our Form 10-KSB for the fiscal year ended December
31, 2007. Although the filing of this Amended Quarterly Report on Form 10-Q/A
will bring us current in our filings with the SEC, because our Form 10-KSB was
not filed within the deadline promulgated by the SEC, the filing was not timely
under applicable SEC rules. As a result of the delayed filing of our Form
10-KSB, we are ineligible to use a "short form" registration statement on Form
S-3 to register securities for sale by us or for resale by other security
holders, in capital raising transactions, until we have timely filed all
periodic reports under the Securities Exchange Act of 1934 for at least 12
calendar months. In the meantime, for capital raising transactions, we would
need to use Form S-1 to register securities with the SEC, or issue such
securities in a private placement, which could increase the time and resources
required to raise capital during this period.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not
Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Not
Applicable.
ITEM 5. OTHER INFORMATION
Not
Applicable.
ITEM 6. EXHIBITS
EXHIBIT
NO.
|
|
DESCRIPTION
|
|
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Section 302
Certification of Chief Executive Officer
|
|
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Section 302
Certification of Chief Financial Officer
|
|
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Section 906
Certification of Chief Executive Officer
|
|
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Section 906
Certification of Chief Financial Officer
|
(b)
The following is a
list of Current Reports on Form 8-K filed by the Company during and subsequent
to the quarter for which this report is filed.
None
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
|
TREE TOP INDUSTRIES,
INC.
|
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Dated:
April 9, 2009
|
By:
|
/s/ David
Reichman
|
|
|
|
David
Reichman
|
|
|
|
Chief
Executive Officer
and
Chairman (Principal Executive Officer)
|
|
|
|
|
|
Pursuant to
the requirements of the Securities Exchange Act of 1934, as amended, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By:
|
/S/
David Reichman
|
|
|
|
David
Reichman, Chairman of the Board,
Chief
Executive Officer, President
Chief
Financial Officer, and Secretary
|
|
Date:
April 9, 2009
|
|
|
|
|
|
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|
|
By:
|
/S/
Frank Benintendo
|
|
Date:
April 9, 2009
|
|
Frank
Benintendo, Director
|
|
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|
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|
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By:
|
/S/
Michael Valle
|
|
Date:
April 9, 2009
|
|
Michael
Valle, Director
|
|
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|
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By:
|
/S/
Don Gilbert
|
|
Date:
April 9, 2009
|
|
Don
Gilbert, Director
|
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By:
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/S/
Christopher Cecil
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Date:
April 9, 2009
|
|
Christopher
Cecil
|
|
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