- Quarterly Report (10-Q)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED

June 30, 2010

Commission file number: 000-26971

	TRIMOL GROUP, INC.
	(Exact Name of Small Business Issuer as it appears in its charter)

DELAWARE

(State or other Jurisdiction of Incorporation or Organization)

13-3859706

(I.R.S. Employer Identification No.)

1221 Avenue of the Americas, Suite 4200

New York, New York 10020

(Address of principal executive offices)

212. 554.4394

(Issuer’s Telephone Number)

Indicate by check mark whether the Registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yes x No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. Large accelerated filer o Accelerated filer o Non-accelerated filer o Small reporting company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.

Yes o No x

As of August 13, 2010, there were 100,472,328 issued and outstanding shares of the Registrant’s common stock.

TRIMOL GROUP, INC.

FORM 10-Q

QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2010

TABLE OF CONTENTS

	PART I - FINANCIAL INFORMATION

ITEM 1	FINANCIAL STATEMENTS	3

	CONSOLIDATED BALANCE SHEET	4
	CONSOLIDATED STATEMENT OF OPERATIONS	5
	CONSOLIDATED STATEMENT OF CASH FLOWS	6
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7

ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11

ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	13

ITEM 4	CONTROLS AND PROCEDURES	13


	PART II - OTHER INFORMATION

ITEM 1	LEGAL PROCEEDINGS	14

ITEM 1A	RISK FACTORS	15

ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	15

ITEM 3	DEFAULTS UPON SENIOR SECURITIES	15

ITEM 4	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	15

ITEM 5	OTHER INFORMATION	15

ITEM 6	EXHIBITS	16

SIGNATURES		17

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1 .

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2010

Table of Contents

TRIMOL GROUP, INC.

CONSOLIDATED BALANCE SHEET

	June 30, 2010			December 31, 2009
	(Unaudited)			(Audited)


ASSETS

Current assets:
Cash	$	7,000		$	13,000

TOTAL CURRENT ASSETS		7,000			13,000

TOTAL ASSETS	$	7,000		$	13,000


LIABILITIES

Current liabilities:
Due to related parties	$	4,120,000		$	3,680,000
Accrued expenses		1,009,000			954,000

TOTAL CURRENT LIABILITIES		5,129,000			4,634,000

SHAREHOLDERS’ DEFICIENCY		(5,122,000	)		(4,621,000	)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIENCY	$	7,000		$	13,000

The accompanying notes are an integral part of the financial statements

Table of Contents

TRIMOL GROUP, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	SIX MONTHS ENDED						THREE MONTHS ENDED
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009


REVENUES	$	-		$	-		$	-		$	-


OPERATING EXPENSES		501,000			470,000			236,000			263,000


NET LOSS	$	(501,000	)	$	(470,000	)	$	(236,000	)	$	(263,000	)


Net loss per share (basic and diluted)		(.005	)		(.006	)		(.002	)		(.003	)


WEIGHTED AVERGE NUMBER OF SHARES OUTSTANDING		92,280,020			79,472,328			100,472,328			79.482,328

The accompanying notes are an integral part of the financial statements

Table of Contents

TRIMOL GROUP, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	2010			2009


CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(501,000	)	$	(470,000	)

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH USED IN OPERATING ACTIVITIES:

Accrued expenses to related parties		198,000			198,000


CHANGES IN ASSETS AND LIABILITIES:
Accrued expenses		55,000			-

NET CASH USED IN OPERATING ACTIVITIES		(248,000	)		(272,000	)


CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds of loans from related parties		242,000			271,000

NET CASH PROVIDED BY FINANCING ACTIVITIES		242,000			271,000


INCREASE (DECREASE) IN CASH		(6,000	)		(1,000	)

CASH – BEGINNING OF PERIOD		13,000			4,000

CASH – END OF PERIOD	$	7,000		$	3,000

The accompanying notes are an integral part of the financial statements

Table of Contents

TRIMOL GROUP, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X relating to smaller reporting companies. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010.

The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission.

NOTE 2 – GOING CONCERN

The accompanying unaudited consolidated interim financial statements have been prepared in conformity with GAAP, which contemplate our continuation as a going concern.

As of June 30, 2010, the Company does not have any current operations that generate revenue and has not generated any revenue since April 2006. Further, as shown on the accompanying balance sheet, the Company’s liabilities exceeded its assets by approximately $5,122,000. These circumstances, among others, raise substantial doubt about its ability to continue as a going concern. The unaudited consolidated interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3 – OPERATIONS

The Company owns all of the outstanding shares of Intercomsoft Limited (“Intercomsoft”) a company which, until April 2006, was engaged in the operation of a computerized photo identification and database management system utilized in the production of secure essential government identification documents such as passports, drivers’ licenses, national identification documents and other forms of essential personal government identification. As more detailed in Note 5, the Company is pursuing certain legal action related to the operation of Intercomsoft and since April 2006 has not generated any revenue from business operations.

Table of Contents

NOTE 4 – TERMINATION AGREEMENT

The Company entered into a termination agreement in May 2008 (the “Termination Agreement”) with Aluminum Power Inc. (API), an entity which is beneficially owned and controlled by the Company’s Chairman of the Board. The Termination Agreement terminated the Technology Acquisition Agreement and the Research and Development Agreement entered into by the Company and API in 2001.

In consideration of the Termination Agreement, as amended, Royal HTM Group, Inc, a company also beneficially owned and controlled by the Company’s Chairman of the Board, cancelled $400,000 of the Company’s indebtedness to it. In further consideration, API transferred 21,000,000 shares of the Company’s common stock owned by it to the Company, to be utilized by the Company solely in connection with certain acquisitions that the Company was exploring. In the event that the Company did not conclude any such acquisitions within a contractually specified period, API had the right to require the Company to reconvey such 21,000,000 shares to it (the “Call Right”) for an aggregate purchase price of $1,000.

On March 12, 2010, the Company received a notice from Royal HTM Group wherein it advised the Company that on March 4, 2010, API had assigned to Royal HTM Group the Call Right granted to it under the Termination Agreement, as amended. On March 12, 2010 Royal HTM Group exercised the Call Right and the Company issued to it the 21,000,000 shares of common stock.

NOTE 5 – LEGAL PROCEEDINGS

In the normal course of business, the Company may become subject to lawsuits and other claims and proceedings. Such matters are subject to uncertainty and outcomes are not predictable with assurance. Management is not aware of any pending or threatened lawsuits or proceedings which would have a material effect on the Company’s financial position, liquidity, or results of operations other than as follows:

On March 25, 2009, Intercomsoft commenced an action in the court of first instance in Geneva Switzerland for the appointment of an arbitration tribunal in connection with its claims against the Ministry of Economics of the Republic of Moldova and the Government of the Republic of Moldova (the “Moldovan Defendants”) seeking damages of approximately $41 million for breach of contract and an injunction prohibiting Moldova from producing further essential government documents pursuant to the terms of the ten year Supply Agreement under which Intercomsoft had produced essential government documents for the Republic of Moldova including passports, driver’s licenses, permits and national identification documents.

The Swiss court granted Intercomsoft’s request to establish an ad hoc arbitration panel to hear the merits of its claims in such proceeding. Two members of such panel have been appointed. To date, the Government of Moldova has failed to appear in such action and is currently in default with respect to its rights to appoint one of the three members of the ad hoc arbitration panel established by the Swiss court.

Table of Contents

The Moldovan Defendants had previously commenced a proceeding before the International Commercial Court of Arbitration of the Chamber of Commerce and Industry of the Republic of Moldova entitled Ministry of Economics of the Republic of Moldova, Ministry of Internal Affairs of the Republic of Moldova, Ministry of Information Development of the Republic of Moldova and State Enterprise “REGISTRU” of the Republic of Moldova vs Intercomsoft, Ltd. , claiming that such court in Moldova is the proper court to administer any arbitration between the parties in connection with the Supply Agreement. Intercomsoft objected to the jurisdiction of the Moldovan Arbitration Court. On July 16, 2010, Intercomsoft was notified that the pending arbitration proceeding in Moldova was dismissed, without prejudice.

There can be no assurance as to the outcome of the Swiss proceeding initiated by Intercomsoft.

NOTE 6 - RELATED PARTY TRANSACTIONS AND BALANCES

Transactions

	Six Months Ended June 30,
	2010		2009

Compensation and related expenses to Chairman (1)	$	148,000	$	149,000

Cash advance from Royal HTM Group (2)		128,000		54,000

Cash advances in the form of direct payment of expenses by Royal HTM Group (2)		104,000		217,000

Business development services (2)		60,000		60,000

	$	440,000	$	480,000

Boris Birshtein serves as the Company’s Chairman of the Board of Directors (the “Chairman”) and its Chief Executive Officer on a month-to-month basis.

The Company has engaged Royal HTM Group, Inc., a Canadian company beneficially owned and controlled by the Chairman, and the Company’s majority shareholder, to render certain business development services to the Company. Royal HTM Group has also advanced money to the Company to fund its on-going operational expenses.

Table of Contents

Balances

As of June 30, 2010 payables to related parties consist of the following:

Amount due to the Chairman and a company owned and controlled by such individual.	$	2,817,000

Accrued compensation due to the Chairman.		1,303,000
	$	4,120,000

These amounts are non-interest bearing and due on demand.

NOTE 7 - STOCK COMPENSATION PLANS

As of June 30, 2010, the Company does not have any options to purchase its common stock issued or outstanding.

Table of Contents

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following management's discussion and analysis of financial condition and results of operation should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2009, as well as our unaudited consolidated financial statements and notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those described. We expressly disclaim any obligation or undertaking to update these statements in the future.

OPERATIONS

Business Development

We are not currently engaged in any business operations, but continue to seek business opportunities.

RESULTS OF OPERATIONS

General

During the three month period ended June 30, 2010, our operations consisted solely of administrative activities, activities surrounding exploration of certain acquisitions and those related to pursuing breach of contract claims against the Republic of Moldova as more fully described in Part II Item 1 herein.

Comparison of Three Month Period Ended June 30, 2010 to June 30, 2009

During the three months ended June 30, 2010, we generated no revenues from operations and similarly generated no revenues in the comparable period in 2009.

Total expenses for the three months ended June 30, 2010, were approximately $236,000, and were $263,000 in the comparable period in 2009, all of which consisted of general corporate and administrative expenses.

Table of Contents

We had a net loss from operations of approximately $236,000 for the three month period ended June 30, 2010, as compared to a net loss of approximately $263,000 for the same period in 2009.

Comparison of Six Month Period Ended June 30, 2010 to June 30, 2009

During the six months ended June 30, 2010, we generated no revenues from operations and similarly generated no revenues in the comparable period in 2009.

Total expenses for the six months ended June 30, 2010, were approximately $501,000, and were $470,000 in the comparable period in 2009, all of which consisted of general corporate and administrative expenses.

We had a net loss from operations of approximately $501,000 for the six month period ended June 30, 2010, as compared to a net loss of approximately $470,000 for the same period in 2009.

Liquidity & Capital Resources

We have not generated any revenue since the first quarter 2006 and have funded our limited operations through loans and advances from our Chairman of the Board and companies owned or controlled by him.

Our assets are nominal and our liabilities currently exceed our assets by approximately $5,122,000. These circumstances, among others, raise substantial doubt about our ability to continue operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Stock Compensation Plans

There were no options to purchase shares of our common stock issued or exercised during the three and month period ended June 30, 2010. As of April 1, 2010, there were a total of 3,000,000 shares of our common stock reserved for issuance under outstanding options, all of which expired on such date. As of June 30, 2010, we have no options to purchase shares of our common stock issued or outstanding.

Available information

Reports Filed with the Securities and Exchange Commission

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, in accordance therewith, file reports, proxy and information statements and other information with the Securities and Exchange Commission (the “SEC”).

All reports filed by us with the SEC are available free of charge via EDGAR through the SEC web site at www.sec.gov . In addition, the public may read and copy materials we file with the SEC at the public reference facilities maintained by the SEC at its public reference room located at 100 F Street, N.E. Washington, D.C. 20549. We will also provide copies of such material to investors upon written request.

No person has been authorized to give any information or to make any representation other than as contained or incorporated by reference in this Quarterly Report and, if given or made, such information or representation must not be relied upon as having been authorized by us.

Table of Contents

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, as defined in Rule 13a-15(f) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 15d-15(e) under the Exchange Act. 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.

As of the end of the period covered by this Quarterly Report, we carried out, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures to ensure that information required to be disclosed by us in this Quarterly Report was recorded, processed, summarized and reported within the required time periods. In carrying out that evaluation, management identified a material weakness (as defined in Public Company Accounting Oversight Board Standard No. 2) in our internal control over financial reporting regarding a lack of adequate segregation of duties. Accordingly, based on their evaluation of our disclosure controls and procedures as of June 30, 2010, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of that date, our controls and procedures were not effective for the purposes described above.

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the period ended June 30, 2010, that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

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. We have assessed the effectiveness of those internal controls as of June 30, 2010, using the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control – Integrated Framework as a basis for our assessment.

Table of Contents

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects our ability to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of our annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified a material weakness in our internal control over financial reporting. This material weakness consisted of inadequate staffing and supervision within the bookkeeping and accounting operations of our company. The relatively small number of individuals who have bookkeeping and accounting functions prevents us from segregating duties within our internal control system. The inadequate segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure matters or could lead to a failure to perform timely and effective reviews.

As we are not aware of any instance in which we failed to identify or resolve a disclosure matter or failed to perform a timely and effective review, we determined that the addition of personnel to our bookkeeping and accounting operations is not an efficient use of our very limited resources at this time and not in the interest of our shareholders.

This Quarterly Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Quarterly Report.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Table of Contents

There can be no assurance as to the outcome of the Swiss proceeding initiated by Intercomsoft.

Item 1A.

RISK FACTORS

For information regarding factors that could affect the Company’s results of operations, financial condition or liquidity, see the risk factors as disclosed in the Company’s most recent Annual Report on Form 10-K. There have been no material changes from the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

Related Party Transactions

Table of Contents

As of June 30, 2010, Boris Birshtein, the Chairman of our Board of Directors and our Chief Executive Officer, beneficially owned or controlled approximately 68% of the shares of our common stock, on a fully diluted basis. During the six month period ended June 30, 2010, we accrued an aggregate of $138,000 ($23,000 per month) in compensation and $10,800 ($1,800 per month) in expenses due to Mr. Birshtein related to his performance as our Chairman of the Board and our Chief Executive Officer.

Royal HTM Group, Inc., our majority shareholder and a company beneficially owned and controlled by Mr. Birshtein, renders certain business development services to us on an on-going basis. During the six month period ended June 30, 2010 we accrued an aggregate of $60,000 ($10,000 per month) of consulting fees due to Royal HTM Group for such services.

During the six month period ended June 30, 2010, we borrowed an aggregate of approximately $232,000 from Mr. Birshtein and Royal HTM Group to meet on-going operational expenses. Such amount is non-interest bearing and is due on demand.

In May 2008, we entered into an agreement, (the “Termination Agreement”) with Aluminum Power Inc. (API), an entity which is beneficially owned and controlled by Mr. Birshtein, terminating the Technology Acquisition Agreement and the Research and Development Agreement entered into by the Company and API in 2001. In partial consideration of the Termination Agreement, as amended, API transferred to us 21,000,000 shares of the Company’s common stock owned by it, to be utilized by us solely in connection with certain acquisitions that we were exploring. In the event that we did not conclude any such acquisitions within a contractually specified period, API had the right to require us to reconvey to it such 21,000,000 shares to it (the “Call Right”) for an aggregate purchase price of $1,000.

On March 12, 2010, we received a notice from Royal HTM Group advising us that on March 4, 2010, API had assigned to Royal HTM Group the Call Right granted to it under the Termination Agreement, as amended. On March 12, 2010 Royal HTM Group exercised the Call Right and on March 15, 2010 we issued to it the 21,000,000 shares of common stock.

ITEM 6.

EXHIBITS

The exhibits listed below are filed as part of this Quarterly Report for the period ended June 30, 2010:

Exhibit No.

Document

31.1

Chief Executive Officer Certification pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Chief Financial Officer Certification pursuant Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Chief Executive Officer Certification pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Chief Financial Officer Certification pursuant Section 906 of the Sarbanes-Oxley Act of 2002.

Table of Contents

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.

	TRIMOL GROUP, INC.


Date: August 16, 2010	By: /s/ Boris Birshtein
	Name: Boris Birshtein
	Title: Chief Executive Officer


	By: /s/ Jack Braverman
	Name: Jack Braverman
	Title: Chief Financial Officer