form10ksb.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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FORM
10-KSB
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ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended: December 31, 2007
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from: _____________ to
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Timeshare
Holdings, Inc.
(Name of
small business issuer in its charter)
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Nevada
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333-145409
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88-0476779
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(State
or Other Jurisdiction
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(Commission
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(I.R.S.
Employer
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of
Incorporation)
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File
Number)
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Identification
No.)
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2350
S. Jones Blvd., Ste. 101
Las
Vegas, NV 89146
(Address
of Principal Executive Office) (Zip Code)
(702)
215-5830
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
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Securities
registered pursuant to Section 12(b) of the
Act: None
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Title
of each class
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Name
of each exchange on which registered
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Securities
registered pursuant to Section 12(g) of the Act:
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Common
Stock, par value $.001
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(Title
of Class)
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Check
whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to
file such reports), and
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(2)
has been subject to such filing requirements for the past 90
days.
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X
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Yes
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No
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Check
if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant’s knowledge, in definitive proxy or
information statements
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incorporated
by reference in Part III of this Form 10-KSB or any amendment to this Form
10-KSB.
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Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act).
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X
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Yes
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No
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State
issuer’s revenue for its most recent fiscal year December 31, 2007 was $
0
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The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity,
as of April 8, 2008 was approximately
$2,549,000.
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Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:
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30,339,331 shares issued
and outstanding as of April 8, 2008.
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Transitional
Small Business Disclosure Format (Check one):
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Yes
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X
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No
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INDEX
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Page
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PART I
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| Item
1. Description of
Business. |
4 |
| Item
2. Description of
Property. |
16 |
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Item
3. Legal
Proceedings.
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17 |
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Item
4. Submission of Matters to a
Vote of Security Holders.
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17 |
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PART II
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Item
5. Market for Common Equity and
Related Stockholder Matters and Small Business Issuer Purchases
of Equity Securities.
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17 |
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Item
6. Managements’ Discussion and
Analysis or Plan of Operation.
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20 |
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Item
7. Financial
Statements.
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23 |
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Item
8. Changes in and Disagreements
With Accountants on Accounting and Financial
Disclosure.
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24 |
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Item
8A. Controls and
Procedures.
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24 |
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Item
8B. Other
Information.
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25 |
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PART III
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Item
9. Directors, Executive
Officers, Promoters, Control Persons and Corporate Governance; Compliance With Section 16(a)
of the Exchange Act.
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25 |
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Item
10. Executive
Compensation.
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26 |
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Item
11. Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder
Matters.
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27 |
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Item
12. Certain Relationships and
Related Transactions, and Director
Independence.
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28 |
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Item
13. Exhibits.
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29 |
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Item
14. Principal Accounting Fees and
Services.
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30 |
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SIGNATURES
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31 |
FORWARD
LOOKING STATEMENTS
In this
annual report, references to “Timeshare Holdings,” “Timeshare,” “the Company,”
“we,” “us,” and “our” and, where applicable, “TimeShareLoans” refer to
Timeshare Holdings, Inc.
This
Annual Report on Form 10-KSB (including the section regarding Management's
Discussion and Analysis or Plan of Operation) contains forward-looking
statements regarding our business, financial condition, results of operations
and prospects. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and similar expressions or variations of such
words are intended to identify forward-looking statements, but are not deemed to
represent an all-inclusive means of identifying forward-looking statements as
denoted in this Annual Report on Form 10-KSB. Additionally,
statements concerning future matters are forward-looking
statements.
Although
forward-looking statements in this Annual Report on Form 10-KSB reflect the good
faith judgment of our Management, such statements can only be based
on facts and factors currently known by us. Consequently, forward-looking
statements are inherently subject to risks and uncertainties and actual results
and outcomes may differ materially from the results and outcomes discussed in or
anticipated by the forward-looking statements. Factors that could cause or
contribute to such differences in results and outcomes include, without
limitation, those specifically addressed under the heading "Risks Related to Our
Business" below, as well as those discussed elsewhere in this Annual Report on
Form 10-KSB. Readers are urged not to place undue reliance on these
forward-looking statements, which speak only as of the date of this Annual
Report on Form 10-KSB. We file reports with the Securities and Exchange
Commission ("SEC"). We will make available on our website under "Investor
Relations/SEC Filings," free of charge, our annual reports on Form 10-KSB,
quarterly reports on Form 10-QSB, current reports on Form 8-K and amendments to
those reports as soon as reasonably practicable after we electronically file
such materials with or furnish them to the SEC. Our website address is
www.timeshareloans.com. You can also
read and copy any materials we file with the SEC at the SEC's Public Reference
Room at 100 F Street, NE, Washington, DC 20549. You can obtain
additional information about the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
site (www.sec.gov) that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC,
including us.
We
undertake no obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
Annual Report on Form 10-KSB, except as required by law. Readers are urged to
carefully review and consider the various disclosures made throughout the
entirety of this Annual Report, which are designed to advise interested parties
of the risks and factors that may affect our business, financial condition,
results of operations and prospects.
PART
I
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ITEM
1.
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DESCRIPTION
OF BUSINESS.
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Our
Business
Our
business focuses on the market niche in the vacation ownership financing
business segment. Our business was established to provide financing for
consumers wishing to purchase and/or refinance vacation ownership intervals in
the secondary, or resale market or elsewhere. We intend to focus on originating
short-term, high-yield consumer notes. Both fee simple and non-fee simple
licensed timeshare interests collateralize the notes.
Timeshare
Holdings, Inc.’s principal executive offices are located at 2350 South Jones
Boulevard, Suite 101, Las Vegas, Nevada 89146 and its California office is
located at 16842 Von Karman Avenue, Building. 400, Second Floor, Irvine,
California 92606. Our telephone number in Nevada is (877) 220-6404 and its
telephone number in California is (800) 882-4524. Our website address is
www.timeshareloans.com. Our website and the information contained on our
website are not incorporated into this prospectus or the registration statement
of which it forms a part. Further, our references to the URLs for these websites
are intended to be inactive textual references only.
About
Us
On March
9, 2007 we acquired TimeShareLoans.com, Inc. by entering into an Agreement and
Plan of Reorganization (the “Agreement”) with TimeShareLoans.com, Inc. Pursuant
to the terms of the Agreement, the respective shareholders of
TimeShareLoans.com, Inc. exchanged their outstanding shares in
TimeShareLoans.com, Inc. for shares in Timeshare Holdings (the “business
combination”). As a result of the business combination as set forth in the
Agreement, Timeshare Holdings became the parent company of TimeShareLoans.com,
Inc. and we took over all the business operations of TimeShareLoans.com, Inc.
Upon the closing of the business combination, a total of 1,182,680 shares of
TimeShareLoans.com, Inc. common stock were exchanged for 29,991,000 shares of
common stock in Timeshare Holdings.
As a
result of the transaction outlined above, the operations of the Company are
comprised of the operations of Timeshare and TimeshareLoans.com,
Inc.
We intend
to focus on originating short-term, high-yield consumer notes. Both fee simple
and non-fee simple licensed timeshare interests collateralize the notes. Fee
simple projects are substantially similar to condominiums in which purchasers
obtain a true ownership interest in real property, with a deed, title insurance
and other indicia of real estate ownership. A declaration of covenants,
conditions and restrictions establishing the vacation ownership regime is
recorded in the local real property records; such a declaration resembles a
condominium declaration, which is also recorded among the local land records.
Purchases of intervals are completed in generally the same manner as
condominiums. Individual purchasers execute purchase agreements for intervals.
At closing, purchasers obtain deeds to their interval that are recorded among
the local land records, and the purchasers give security to their lenders in the
form of mortgages or security interests which operate as first liens against the
respective intervals. Typically the purchasers will have a real property
interests in the resort and the deeds will provide that the purchasers may or
may not give up the right to use the specific unit, but will instead abide by
the resort reservation system unless otherwise provided for by the timeshare
regime. Within a specified period of time each year or otherwise, owners will
have the right to reserve their contractual occupancy rights in the
same type of unit, according to a first come, first served system. Purchasers
also have the ability to trade their interval through an exchange organization
such as Interval International or Resort Condominium International, amongst
others, based upon their resort’s affiliation.
The
timeshare non-fee simple license product provides a recorded ownership interest
in a period of time or a formula based upon a system of points, but the
underlying real estate does not pass to the purchaser. Purchasers of non-fee
simple licensed product may accumulate their points to trade for a larger or
smaller guest room unit, or a different season at another resort that recognizes
their non-fee simple licensed timeshare product program. Timeshare interests
involve a use right in a specific type of unit (i.e. a studio, one bedroom, two
bedroom, etc.) for a specific period of time. Purchasers of timeshare non-fee
simple licensed products may grant security to their lenders in the form of
personal loans or security interest which operate as liens against their non-fee
simple licensed timeshare product.
Historically
the purchasers of vacation ownership interests or timeshare interests typically
finance 90% of the purchase price through financing offered by the resort
developer. In the secondary market there is limited financing available due to
the non-involvement of a developer entity, nor traditional lending sources such
as banks or credit unions. We intend to fill that void by offering credit
financing to qualified buyers. The resulting notes are then sold or pledged as
security with financial institutions specializing in this type of financing.
Typical rates intended to be charged by Timeshare Holdings to the consumer will
be 12.95% to 19.95% and typical rates from the institutions to Timeshare
Holdings are 8% to 12%. Historical Timeshare Industry default rates for these
notes average 4% to 5% with an average CPR of 4%. Typical terms vary from 24
months to 120 months with the majority of vacation ownership and Timeshare
Interests being financed for a period of 84 months.
Timeshare
Holdings, Inc. through its subsidiary TimeShareLoans.com, Inc, is currently
licensed, has commenced the licensing process, been approved to do
business or arranged to do business with a licensed broker through a Net Branch
agreement in states representing sixty-five percent (65%) of the retail
timeshare sales market, including California, Hawaii, Florida, Nevada, Texas,
Virginia and North Carolina. Our licensing status is a major asset since all
secondary market financing is subject to the mortgage banking regulations and or
consumer finance regulations of the individual states where licensing is
required.
Timeshare
Holdings’ loan application process will generally be conducted over the Internet
and telephone with applications intended to be received at our centralized
processing facility in Irvine, California. Upon receipt of an application, the
information will be entered into our system and processing will begin. Our
employees will analyze all loan applications individually. We have developed a
proprietary credit index profile as a statistical credit based tool to predict
likely future performance of a borrower. A significant component of this
customized system is the credit evaluation score methodology developed by the
credit reporting agencies (FICO). This component is used in creating predictive
default models. The other components that we will rely upon are income analysis,
employment stability, residence stability and debt to income analysis. By
utilizing this scoring model, all applicants will be considered on the basis of
their ability to repay the loan obligation while allowing us to maintain our
risk based pricing for each loan.
Prior to
entering into a loan transaction with a borrower, we will require the borrower
to complete a credit application. Approvals of borrower’s electronically filed
loan applications will be processed quickly upon the receipt of a completed
application by using our internet based software systems and our propriety
credit scoring matrix. Upon the receipt of the loan documentation from the
borrower, and a phone interview with a loan processor, escrow will be opened and
the loan is funded, upon approval. As with all timeshare purchases, the borrower
has a statutory rescission period to cancel the purchase of their timeshare
interest, usually between 3 to 10 days depending on state regulations. Once the
rescission period has expired, the loan transaction is completed.
It is
noteworthy that real estate brokers and homeowners associations will qualify to
participate in our programs only after a review by our management of their
individual expertise and reputations, including a review of business practices,
financial information, and consumer complaints, perhaps including a site visit
from a representative of Timeshare Holdings. It is intended to be our policy to
review, on a regular basis, the performance of each of the participants in our
broker network.
None of
our arrangements with real estate broker participants is on an exclusive basis.
It is anticipated that each relationship is documented by marketing and
remarketing agreement. The commission that the broker earns for a sales
transaction is borne by the purchaser or the seller, not by Timeshare
Holdings.
Our
Business Model
Marketing. The unique concept
being marketed by Timeshare Holdings is twenty-four hours per day, seven days
per week Internet based, state-of-the-art application process to provide
financing for purchase and/or refinancing of timeshare intervals in the
secondary market. We have structured our financial model based on providing
credit facilities to individuals with FICO scores of a minimum of 590 or higher,
amongst other criteria and providing loan approvals to these purchasers quickly.
Loans typically range from $4,000 to $40,000.
Our
strategic plan is to introduce our lending operations while maintaining our
credit quality. Our strategies include: offering the borrower new loan products
through the internet, direct mail and referrals; expanding our network of
correspondent real estate brokers; introduction of our programs and products to
Homeowners Associations that have been abandoned by the project developers or
been left on their own due to the completion of sales by the project developers;
entering geographic markets where there is an abundance of timeshare projects
and owners; realizing operational efficiencies through economies of scale; and
utilizing securitizations to sell higher volumes of loans on terms that are more
favorable than hypothecation. By offering a diversified product line of
financing options hereto for not widely available to the consumer, and
maintaining its high level of service, we anticipate a level of acceptance that
will allow us to grow our portfolio of receivables on a consistent growth
pattern.
Expansion
of Broker Network. We
intend to originate loans from select real estate brokers, specializing in sales
of timeshare intervals in the secondary market. We will structure our product
line to meet the needs of this important network of brokers. We have established
relationships with many proven timeshare resale companies that are active in the
secondary market. Stroman Realty, Resort Management Company (RMC) and All Island
Timeshare are specific entities that specialize in timeshare sales in the
secondary market. We also plan to aggressively seek establishing relationships
with other brokers, large and small, that will benefit from our
programs.
To
accomplish the expansion of our broker network, we will participate in trade
shows, both regionally and nationally, where our programs will be showcased.
Additionally, Management will leverage its networking capabilities within
American Resort Development Association ("ARDA") to bring attention and
exposure of our programs to industry insiders. Finally, we will attempt to
provide face-to-face explanation, instruction and demonstration of the products
and programs directly to brokers at their place of business as part of our
comprehensive business development approach. To provide for the success of these
relationships, we will attempt to provide to our broker network ongoing support
and training.
Network
of Homeowners’ Associations. A long-neglected, yet vitally important,
component of the timeshare industry is the Homeowners’ Association that is
created along with a timeshare project. Its purpose is to manage and
administrate a project on behalf of the owners once the developer of the project
has sold a substantial number of interests in the project, or for whatever
reason is no longer associated with or has abandoned the project. To fund its
operations, the Association has the authority to assess maintenance fees or
association assessments that cover upkeep of the project, fund reserves for
capital improvements and insurance. As a result of this authority, it may be
necessary for the Association to enforce its collection of these fees or
assessments by placing liens, or ultimately foreclosing on the timeshare
intervals owned by non-paying timeshare owners.
Upon
foreclosure, the Association faces the dilemma of carrying a non-liquid asset on
its balance sheet in the form of the foreclosed upon interval. Many of these
Associations, unless supported by a large development company such as Marriott,
do not have the expertise or wherewithal to convert this non-performing asset
into cash. We recognize the needs of these Associations as an important avenue
to building our loan portfolio by assisting them with the financing necessary to
convert dormant intervals to cash through a sales transaction.
To
accomplish this, we intend to follow a program of business development similar
to the approach used with our broker network. By showcasing our products in
periodicals geared to the consumer, attending functions and seminars directed
towards Associations and most importantly, by participating in American
Resort Development Association-Resort Owners Coalition ("ARDA -ROC"), the
arm of the American Resort Development Association that acts as the ombudsman
and advocate of individual timeshare owners and associations, we intend to
provide a lifeline for this very large and underserved segment of the industry.
The potential exists that this market could eclipse the loan originations
generated by the broker network in the opinion of management. The development of
the association network will require direct hands on education of the managers
of various associations as well as ongoing support and training.
Loan
Origination Through the Internet. As
consumers have become more educated regarding the timeshare concept, astute
purchasers have come to realize that timeshare intervals may be acquired through
alternatives that allow them to bypass the traditional sales seminars sponsored
by developers. By investigating purchase options through the Internet, in a
manner similar to the way that many consumers now book travel arrangements, they
have found a means of acquiring the type of timeshare that appeals to them,
often at discounted prices, from the comfort of their homes and without the
pressure associated with a traditional timeshare presentation. Many of these
purchasers are existing timeshare owners looking to purchase additional
intervals. A strong secondary market has developed, supported by the
proliferation of web sites catering to those needs. The brokers mentioned
earlier sponsor many of these web sites, which will list intervals from willing
sellers and match those sellers with willing buyers. In most cases, transactions
between buyers and sellers are conducted on an all cash basis, or involve seller
financing, due to the lack of a comprehensive financing program that could be
taken advantage of by those on either side of the transaction.
For those
consumers doing business with the brokers that we have established relationships
with, it is intended that a link will be provided from their web site to that of
TimeShareLoans.com, Inc. (www.timeshareloans.com)
where the consumer will be provided information regarding the type of financing
available. A credit application can also be completed. A testimonial and
recommendation will be provided to the consumer from the broker or its
representative to explore this option. By having a financing program available,
the broker benefits by being able to discuss an expanded list of product, the
seller benefits by realizing a higher price for the interval and the purchaser
benefits by being able to finance the purchase rather than having to “front” the
entire purchase price in cash. With the rapid approval process developed by
Timeshare Holdings, the number of sales being written by these brokers should
expand as well as the corresponding loan origination.
For every
consumer that chooses to work through a broker-affiliated web site, there are
consumers that will choose to follow other paths within the web to acquire their
intervals. For some, a simple Internet search identifying timeshare intervals
will lead them to those seeking to sell their intervals through chat rooms or
consumer blogs, auction sites such as Ebay, sites specializing in rental of
timeshares, or exchange companies. In those instances our strategy is to make
our products and programs known through banner ads. Others will seek intervals
through the major exchange companies, or sites such as Redweeks.com, offering
rentals as a means of attracting potential buyers. The two main exchange
companies serving the timeshare industry are Resorts Condominium International
and Interval International. We will attempt to purchase advertising space on
their web sites and will provide the exchange companies with articles for their
periodic magazines, which are mailed to each of their existing members
bases.
For those
consumers doing Internet searches for timeshare financing, we have registered
key domain names and will work with search engines to make those names the most
visible choices for those seeking that information.
To avoid
the appearance of deceptive trade practices, the Company will also publish and
provide an “opt in” electronic newsletter that will allow the company to capture
names-email addresses, and phone numbers for its database.
Loan
Origination through Other Media Outlets. In addition to providing
information to the exchange companies for publication in their periodic
magazines, we intend to provide press releases and articles for publication in
all of the trade journals associated with the timeshare industry, such as
Developments, The Trades, and Timesharing Today amongst others. Eventually, as
Timeshare Holdings grows, we will attempt to develop a media campaign similar to
the Di-Tech model or Timeshares Only model that will run on cable television
outlets in selected markets throughout the country.
Competition
and Competitive Advantages
The
Company faces intense and increasing competition. Potential
competitors range from traditional mortgage lenders, such as commercial banks,
finance companies, saving and loan associations, credit unions and internet
based lending companies, as well as “branded” development companies such as
Marriott. Many of these competitors such as Tamac Financial and First
Again LLC are larger than we are, have better name recognition that we do and
have greater financial resources than us. In order to compete
effectively, it is our intent to offer a high level of customer service,
personal involvement in the development and success of lending transactions,
competitive rates and a broad range of products that appeals to a broader base
of consumers.
Government
Regulation
The
Company must comply with numerous state and federal
regulations. These regulations range from how and where a timeshare
interval may be sold to the regulations pertaining to the way it may be
financed. In most states, the sale of a timeshare interval must be
conducted by a licensed sales person following whatever real estate or timeshare
regulations that have been enacted in the state where the project is
located. Prior to funding a loan, the Company must be satisfied that
the sales transaction being financed meets all state and federal regulations
pertaining to its sale and that all statutory rescission periods have
expired.
Similarly,
the Company must also comply with all state and federal regulations established
to protect consumers through banking, truth in lending, and state licensing
requirements. These regulations can be extensive. In
order to insure compliance, the Company will establish a management position of
Compliance Officer whose sole responsibility to ensure that all loans funded by
the Company are in compliance with all state and federal
regulations.
Recently,
legislation was introduced in the United States Senate entitled the Foreclosure
Prevention Act of 2008, (H.R.3221). If passed this legislation would
expand the Truth-In-Lending Act (TILA) requirements to all
“dwellings”. This proposal, if enacted, would require the Timeshare
Industry to provide potential buyers with TILA disclosure no later than 7
business days before the date of consummation of the transaction. The
impact of this legislation on the timeshare industry could be dramatic, creating
an unwieldy and unworkable requirement that has the potential of creating
enormous hardship on the industry. The industry national trade
association, ARDA, has taken a strong position against the proposed legislation
and is taking an active role along with ARDA’s membership in opposing this
legislation.
Employees
We
currently have three (3) employees, all of which are employed on a fulltime
basis. We anticipate increasing our employee base from three employees to an
anticipated twelve (12) employees in 2008.
RISK
FACTORS
You
should carefully consider the following risk factors in evaluating our business
before you buy any of our common stock. Buying our common stock is speculative
and involves many risks. You should not buy our common stock unless you can
afford to lose the entire amount of your investment.
Risks related to Timeshare’s
financial results:
Our independent
auditors have expressed substantial doubt about our ability to continue as a
going concern, which may hinder our ability to obtain future financing and which
may force us to cease operations. In their report
dated April 11, 2008 our independent auditors stated that our financial
statements for the year ended December 31, 2007 were prepared assuming
that we would continue as a going concern. Our ability to continue as a going
concern is an issue raised as a result of recurring losses from operations and
cash flow deficiencies since our inception. We continue to experience net
losses. Our ability to continue as a going concern is subject to our ability to
generate a profit and/or obtain necessary funding from outside sources,
including obtaining additional funding from the sale of our securities,
increasing sales or obtaining loans and grants from various financial
institutions where possible. If we are unable to continue as a going concern,
you may lose your entire investment.
Timeshare
Holdings is at an early stage of development and has a limited operating
history. Timeshare Holdings subsidiary, TimeShareLoans.com., through
which it primarily conducts its operations, was formed in 2005 operating as a
private company formed under the laws of the state of Nevada. As such, it
has a limited operating history upon which you can base an evaluation of its
business and prospects. As a start-up company in the early stage of development,
there are substantial risks, uncertainties, expenses and difficulties Timeshare
Holdings is subject to. You should consider an investment in Timeshare Holdings
in light of these risks, uncertainties, expenses and difficulties. To address
these risks and uncertainties, Timeshare Holdings must do the
following:
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Successfully
execute its business strategy;
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Respond
to competitive developments; and
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Attract,
integrate, retain and motivate qualified
personnel.
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Timeshare
Holdings may be unable to accomplish one or more of these objectives, which
could cause its business to suffer. In addition, accomplishing one or more of
these objectives might be very expensive, which could harm its financial
results.
We
have a history of losses since our inception which may continue, and which may
result in our inability to fund any of our sales and marketing and research and
development activities. As a result we maybe forced to cease our operations and
cause investors to lose this entire investment.
We have incurred a net loss of $6,564,852 from July 12, 2005
(inception) through December 31, 2007. As of December 31, 2007 we had working
capital deficiency of $466,446. Because of these conditions, we will require
working capital to develop our business operations. We have not achieved
profitability and we can give no assurances that we will achieve profitability
within the foreseeable future, as we fund operating and capital expenditures, in
such areas as sales and marketing and research and development. We cannot assure
investors that we will ever achieve or sustain profitability or that our
operating losses will not increase in the future. If we continue to incur
losses, we will not be able to fund any of our sales and marketing and research
and development activities, and we may be forced to cease our operations. If we
are forced to cease operations, investors will lose the entire amount of their
investment.
Risks related to Our
Business:
Timeshare
Holdings will need to increase the size of its organization, and may experience
difficulties in managing growth. Timeshare Holdings is a small company
with minimal employees as of December 31, 2007. Timeshare Holdings expects to
experience a period of significant expansion in headcount, facilities,
infrastructure and overhead and anticipates that further expansion will be
required to address potential growth and market opportunities. Future growth
will impose significant added responsibilities on members of management,
including the need to identify, recruit, maintain and integrate managers.
Timeshare Holdings’ future financial performance and its ability to compete
effectively will depend, in part, on its ability to manage any future growth
effectively.
We are subject to
compliance with securities law, which exposes us to potential liabilities,
including potential rescission rights. We have offered and sold our
common stock to investors pursuant to certain exemptions from the registration
requirements of the Securities Act of 1933, as well as those of various state
securities laws. The basis for relying on such exemptions is factual; that is,
the applicability of such exemptions depends upon our conduct and that of those
persons contacting prospective investors and making the offering. We have not
received a legal opinion to the effect that any of our prior offerings were
exempt from registration under any federal or state law. Instead, we have relied
upon the operative facts as the basis for such exemptions, including information
provided by investors themselves.
If any
prior offering did not qualify for such exemption, an investor would have the
right to rescind its purchase of the securities if it so desired. It is possible
that if an investor should seek rescission, such investor would succeed. A
similar situation prevails under state law in those states where the securities
may be offered without registration in reliance on the partial preemption from
the registration or qualification provisions of such state statutes under the
National Securities Markets Improvement Act of 1996. If investors were
successful in seeking rescission, we would face severe financial demands that
could adversely affect our business and operations. Additionally, if we did not
in fact qualify for the exemptions upon which it has relied, we may become
subject to significant fines and penalties imposed by the SEC and state
securities agencies.
The availability
of a large number of authorized but unissued shares of common stock may, upon
their issuance, lead to dilution of existing stockholders. We are
authorized to issue 300,000,000 shares of common stock, $0.001 par value per
share, of which, as of December 31, 2007, 30,167,000 shares of common stock were
issued and outstanding. These shares may be issued by our Board of Directors
without further stockholder approval. The issuance of large numbers of shares,
possibly at below market prices, is likely to result in substantial dilution to
the interests of other stockholders. In addition, issuances of large numbers of
shares may adversely affect the market price of our common stock.
We may need
additional capital that could dilute the ownership interest of investors.
We require substantial working capital to fund our business. If we raise
additional funds through the issuance of equity, equity-related or convertible
debt securities, these securities may have rights, preferences or privileges
senior to those of the rights of holders of our common stock and they may
experience additional dilution. We cannot predict whether additional financing
will be available to us on favorable terms when required, or at all. Since our
inception, we have experienced negative cash flow from operations and expect to
experience significant negative cash flow from operations in the future. The
issuance of additional common stock by our management, may have the effect of
further diluting the proportionate equity interest and voting power of holders
of our common stock, including investors in this offering.
If we are unable
to sell or hypothecate a significant portion of our mortgages and personal
loans, our earnings would decrease. We earn income on our mortgages and
personal loans when they are sold or hypothecated to other financial
institutions, as well as earning income based upon our positive interest spread,
(arbitrage), the difference between our interest income and our interest
expense. Market and other considerations could affect the timing of the sale or
hypothecation of our mortgage and personal loans. If we are not able to sell or
hypothecate all of the mortgage and personal loans that we make during the
quarter in which the loans are made, we would be less likely to be profitable
for that quarter.
Changes in the
volume and cost of our credit financing and loans may decrease our loan
production and decrease our earnings. Our earnings and financial
condition could be hurt by a decrease in volume or an increase in the cost of
the loans that we fund and are able to sell or hypothecate to other financial
institutions. A decrease in volume or an increase in the cost of our self-funded
loans could result from the competition from our own lenders and the financial
institutions to which we sell or hypothecate the mortgage and personal loan
notes.
We may be
required to replace or repurchase mortgage or personal loans or indemnify
investors if we breach representations and warranties or if the borrower
defaults, which would hurt our earnings. We make representations and
warranties to the lenders advancing funds against our portfolio of receivables
and purchasers of our mortgage and personal loans regarding compliance with
laws, regulations and programs standards and the accuracy of information. We are
required to repurchase or replace mortgage and personal loans which do not
conform to the representations and warranties made at the time of sale. If these
representations and warranties are breached, we would be subject to the risk
that a loan source will not have the financial capacity to repurchase loans. We
would also be subject to a risk that the loan source will not otherwise respond
to our demands. We could then become liable for damages or be required to
replace or repurchase a loan if there has been a breach of these representations
or warranties. In addition, we may be obligated to replace or buy back mortgage
and personal loans if the borrower defaults on the first payment of principal
and interest due. Such replacement or repurchase obligations could hurt our
earnings and have a material adverse effect on our financial
position.
The subprime loan
market is currently experiencing significant disruption which may have an
indirect impact on our business. Recently due to a number of
market factors, including increased delinquencies on mortgage loans and the
failure of certain subprime mortgage companies and hedge funds, there has been
extreme uncertainty and disruption in the subprime mortgage industry as a whole.
As a result, there has been an overall tightening of credit and credit
underwriting policies of residential mortgage lenders which may have an indirect
impact on our business.
While
Timeshare Holdings, Inc. intends to uphold its credit underwriting criteria,
offering its products only to those borrowers who qualify with above average
FICO/credit scores, amongst other criteria, the sources of capital to fund those
qualified borrowers may become more scarce and more expensive due to the lenders
aversion to risk in the current economic conditions. The Company
relies on this availability of capital to achieve its business plan goals;
without it, the Company may be hampered in its ability to fund all of the
prospective borrowers interested in its product. We are watching
developments in our business and the subprime industry closely and we will
consider all necessary or appropriate changes and strategies. There can be no
assurances that if this disruption continues that we will be able to operate our
business as we have historically.
We may not have
adequate cash to fund our operations. Our business operations
require continued access to adequate cash to offer credit financing to qualified
timeshare buyers and to then sell or hypothecate the notes to financial
institutions specializing in timeshare financing and other mortgages.
A period of
rising interest rates, an economic slowdown or a recession could reduce the
demand for mortgages or personal loans. Rising interest rates affecting
the timeshare industry generally reduce the demand for consumer credit,
including mortgage and personal loans. Interest rates have been generally
ranging from 12.95% to 18.95% for timeshare mortgages and/or personal loans. In
an economic slowdown or recession, real estate values and secondary or vacation
home sales decline and the number of borrowers defaulting on their loans
increases. In a period of rising interest rates or an economic slowdown, we will
originate and sell or hypothecate fewer loans and could be required to replace
or repurchase more of the loans we have sold or hypothecated as a result of
early payment defaults by borrowers. Accordingly, a period of rising interest
rates, an economic slowdown or a recession would adversely affect our business
and results of operations.
An increase in
interest rates could reduce the value of our loan inventory. The value of
our loan inventory is based, in part, on market interest rates. Accordingly, we
may experience losses on loan sales or hypothecations if interest rates change
rapidly or unexpectedly. If interest rates rise after we fix a price for a loan,
but before we sell or hypothecate that loan, the value of that loan may
decrease. If the amount we receive from selling or hypothecating the loan is
less than our cost of originating the loan, we may incur net losses, and our
business and operating results could be adversely affected.
The loss of key
purchasers or financial institutions willing to advance funds through
hypothecation of our loans or a reduction in prices paid could adversely affect
our financial condition. We sell or hypothecate substantially all of the
mortgages and personal loans we originate to institutional investors or
financial institutions willing to advance funds through hypothecation. If these
banks or any other significant purchaser or lender of our loans cease to buy or
hypothecate our loans and equivalent purchasers or lenders cannot be found on a
timely basis, then our business and results of operations could be materially
adversely affected. Our results of operations could also be affected if these
banks or other purchasers or lenders lower the price they pay or advance to us
or adversely change the material terms of their loan purchases from
us.
The
prices at which we sell our loans vary over time. A number of factors determine
the price we receive for our loans. These factors include:
|
§
|
The
number of institutions that are willing to buy our
loans;
|
|
§
|
The
amount of comparable loans available for
sale;
|
|
§
|
The
levels of prepayments of, or defaults on,
loans;
|
|
§
|
The
types and volume of loans we sell;
|
|
§
|
The
level and volatility of interest rates;
and
|
|
§
|
The
quality of our loans.
|
The
advance rates offered by lenders willing to hypothecate our mortgages and
personal loans vary from time to time. Factors that may determine the advance
rate we receive from our loans could include:
|
§
|
The
credit worthiness of the borrower
|
|
§
|
The
performance of our portfolio of
loans
|
If we are unable
to implement our Internet strategy successfully our growth would be
limited. A substantial portion of our planned future growth depends on
our ability to originate loans on the Internet. Our Internet success will
depend, in part, on the development and maintenance of the Internet's
infrastructure and consumer acceptance of the Internet as a distribution channel
for mortgages and personal loans. Internet-based mortgage lending is relatively
new, and we cannot assure you that consumers will increase their use of the
Internet for obtaining mortgage and/or personal loans. Our ability to
significantly increase the number of loans we originate over the Internet and to
continue to originate loans profitably over the Internet remains
uncertain.
The success of
our online business depends on system integrity and security. The performance of our Web
site and the Web sites in which we participate is important to our reputation,
our ability to attract customers and our ability to achieve market acceptance of
our services. Any system failure that causes an interruption or an increase in
response time of our services could result in fewer loan applications through
our Web site. System failures, if prolonged, could reduce the attractiveness of
our services to borrowers and clients. Our operations are susceptible to outages
due to fire, floods, power loss, telecommunications failures, break-ins and
similar events. In addition, despite our implementation of network security
measures, our servers are vulnerable to computer viruses, break-ins and similar
disruptions from unauthorized tampering with our computer systems. We do not
carry sufficient insurance to compensate for losses that may occur as a result
of any of these events.
A
significant barrier to online commerce is the secure transmission of
confidential information over public networks. We rely on encryption and
authentication technology licensed from third parties to effect secure
transmission of confidential information, such as that required on a mortgage
loan application. Advances in computer capabilities, new discoveries in
cryptography or other developments may result in a breach of the algorithms we
use to protect customer data. If any compromise of our security occurs, it would
injure our reputation, and could adversely impact the success of our
business.
Our online
success depends on our ability to adapt to technological changes. The
market for Internet products and services is characterized by rapid
technological developments, evolving industry standards and frequent new
products and enhancements. As technological advances occur, and consumer
expectations increase, we may be required to make significant changes to the
design and content of our Web site to compete effectively. As the number of Web
pages and users increases, we will need to modify our Internet infrastructure
and our Web site to accommodate increased traffic. If we cannot modify our
Internet systems, we may experience:
|
§
|
impaired
quality and speed of application processing;
and
|
|
§
|
delays
in reporting accurate interest rate
information.
|
If
we fail to effectively adapt to increased usage of the Internet or new
technological developments, our business will be adversely affected.
We
face unknown risks associated with the establishment of our business segments
that we intend to build around the development of resale broker network and a
network specifically for Homeowner Associations and Property Management
companies.
These
risks are difficult to quantify, however, it is our judgment that we may
face:
|
·
|
Potential
for Developers to create their own resale outlet with their own
financing
|
|
·
|
The
ability to replace defaulted
contracts
|
|
·
|
Business
concentration located in areas where the Company is not licensed to do
business
|
|
·
|
The
impact on our program that may result of factors outside of our control
such as general economic conditions, changes in traveling or vacationing
habits or trends amongst consumers, or the impact of Association
assessments and/or special
assessments.
|
If we
fail to effectively establish new business segments such as resale broker
network and Homeowner Associations and Property Management companies, our
business will be adversely affected by negatively impacted
revenues.
We face intense
and increasing competition that could adversely impact our market share and our
revenues. We face
increasing competition from Internet-based lending companies and other timeshare
mortgage lenders participating on Web sites, as well as from traditional
mortgage lenders, such as commercial banks, savings and loan associations and
other finance and mortgage banking companies. Entry barriers in the mortgage
industry are relatively low and increased competition is likely. As we seek to
expand our business, we will face a greater number of competitors, many of whom
will be well-established in the vacation ownership and timeshare markets we seek
to penetrate. Many of our potential competitors are much larger than we are,
have better name recognition than we do and have far greater financial and other
resources. We cannot assure you we will be able to effectively compete against
them or any future competitors.
Competition
may lower the rates we are able to charge borrowers, thereby potentially
lowering the amount of premium income on future loan sales. Increased
competition also may reduce the volume of our loan originations and loan sales.
We cannot assure you that we will be able to compete successfully in this
evolving market.
Changes in the
timeshare industry could affect our operations. We operate within the
timeshare industry. Our results of operations and financial position could be
negatively affected by any of the following events:
|
·
|
An
oversupply of timeshare units;
|
|
·
|
A
reduction in demand for timeshare
units;
|
|
·
|
Changes
in travel and vacation patterns; such as travel costs of fuel for both
ground and air transportation
|
|
·
|
Negative
publicity about the timeshare
industry
|
We may be
impacted by general economic conditions. Our customers may be more
vulnerable to deteriorating economic conditions than those in the luxury or
upscale timeshare markets. An economic slowdown in the United States could
depress consumer spending for vacation intervals. Further, during an economic
slowdown we could experience increased delinquencies in the payments of notes
owed to us.
We are at risk
for defaults by our customers. We offer financing to the
buyers of vacation intervals. We focus on originating short-term, high-yield
consumer notes. We bear the risk of default on these notes. When a buyer of a
Vacation Interval defaults, we may have recourse against a Vacation Interval
buyer for the unpaid price, but certain states have laws that limit our ability
to recover personal judgments against customers who have defaulted on their
loans. Accordingly we may chose to restate the terms of the loan obligation,
and/or foreclose on a loan obligation secured by a deeded vacation interval, and
will always pursue a vigorous collection effort on each and every delinquent
consumer to prevent an event of default.
We must comply
with numerous government regulations and we are subject to changes in law that
could increase our costs and adversely affect our business. Our business is subject to
the laws, rules and regulations of various federal, state and local government
agencies regarding the origination, processing, underwriting, sale and servicing
of mortgage loans. These laws, rules and regulations, among other things, limit
the interest rates, finance charges and other fees we may charge, require us to
make extensive disclosure, prohibit discrimination and impose qualification and
licensing obligations on us. They also impose on us various reporting and net
worth requirements. We also are subject to inspection by these government
agencies. Our failure to comply with these requirements could lead to, among
other things, the loss of approved status, termination of contractual rights
without compensation, demands for indemnification or mortgage loan repurchases,
class action lawsuits and administrative enforcement actions.
The
timeshare and vacation ownership industry is regulated by both state and federal
agencies. It is imperative that a timeshare company stay well-informed of new
regulations, proposed regulations and general trends within the industry and
regulation agencies. For example, in each timeshare transaction, the borrower
has a statutory rescission period during which he or she may cancel the
transaction. This statutory waiting period varies from state to state, and we
cannot complete the loan transaction until the statutory rescission period has
lapsed. Changes to a state’s rescission period, such as an increase in the
waiting time required, could potentially harm our business by creating
additional administrative burdens.
We face risks in
regard to geographic expansion. We intend to expand our reach throughout
the country by registering as a Mortgage Banker and completing the licensing
requirements in States where there is a preponderance of timeshare projects and
timeshare owners. We believe that this expansion will extend into new markets,
and also enhance the existing markets in which we are licensed to do business.
Our strategy involves focusing on geographic areas that we currently feel are
under-served and tailoring our loan programs to better service existing
markets.
If we lose any
member of our senior management team and are unable to find a suitable
replacement, we may not have the depth of senior management resources required
to efficiently manage our business and execute our growth strategy. We
depend on the continued contributions of our senior management and skilled
employees. We do not maintain key person life insurance policies on any of our
officers. There is a risk that the loss of a significant number of key personnel
could have negative effects on our results of operations. We may not be able to
attract and hire highly skilled personnel to replace lost employees necessary to
carry out our business plan. There is also a risk that management may not be
able to adopt an organizational structure that meets its objectives, including
managing costs and attracting and retaining key employees.
We also
need to hire additional members of senior management to adequately manage our
growing business. We may not be able to identify and attract additional
qualified senior management. Competition for senior management in our industry
is intense. Qualified individuals are in high demand, and we may incur
significant costs to attract them. If we are unable to attract and retain
qualified senior management we may not be able to implement our business
strategy effectively and our revenue may decline. Our success will be
substantially dependent on the performance of our executive officers and key
employees. Given our early stage of development, we are dependent on our ability
to retain and motivate high quality personnel. An inability to engage qualified
personnel could materially adversely affect our ability to market our timeshare
loan services. The loss of one or more of our key employees or our inability to
hire and retain other qualified employees could have a material adverse effect
on our business. See “Management.”
Risks related to Timeshare’s
common stock and its market value:
The market for
these shares is slow to develop, so you may not be able to re-sell
them. Our stock is traded on the Over the Counter Bulletin Board
exchange. The Company is currently classified as a shell company which places
additional restrictions on an investors ability to buy and sell shares of our
common stock. There is no guarantee that a vigorous public market will develop.
Due to the lack of a public market, the limited number of investors in our stock
and the significant restrictions on the transferability of our common stock, you
may not be able to re-sell your shares for money, ever.
Our stock
is subject to the Penny Stock rules, which impose significant
restrictions on broker-dealers and may affect the resale of our
stock. A penny
stock is generally a stock that:
|
§
|
is
not listed on a national securities exchange or NASDAQ,
|
|
§
|
is
listed in the "pink sheets" or on the NASD OTC Bulletin
Board,
|
|
§
|
has
a price per share of less than $5.00 and
|
|
§
|
is
issued by a company with net tangible assets less than $5
million.
|
The penny
stock trading rules impose additional duties and responsibilities upon
broker-dealers and salespersons effecting purchase and sale transactions in
common stock and other equity securities, including:
-
determination of the purchaser's investment suitability,
-
delivery of certain information and disclosures to the purchaser,
and
- receipt
of a specific purchase agreement before effecting the purchase
transaction.
Many
broker-dealers will not effect transactions in penny stocks, except on an
unsolicited basis, in order to avoid compliance with the penny stock trading
rules. In the event our common stock becomes subject to the penny stock trading
rules,
- such
rules may materially limit or restrict the ability to resell our common stock,
and
- the
liquidity typically associated with other publicly traded equity securities may
not exist.
Because
of the significant restrictions on trading penny stocks, a public market may
never emerge for our securities. If this happens, you may never be able to
publicly sell your shares.
|
ITEM
2.
|
DESCRIPTION
OF PROPERTY.
|
Our
principal executive office is located in Las Vegas, Nevada, where we have a
month-to-month office services agreement to utilize a space of 150 square feet
for $650 per month. We believe that our space will be adequate for our needs and
that suitable additional or substitute space in the future will be available to
accommodate the foreseeable expansion of our operations. We also lease 4,624
square feet of office space in Irvine, California for $8430 per month. This
lease is for 40 months, expiring on October 31, 2010. This space will allow for
the anticipated growth in our California workforce for the foreseeable
future.
|
ITEM
3.
|
LEGAL
PROCEEDINGS.
|
The
Company is not currently a party to, nor is any of its property currently the
subject of, any pending legal proceedings
that will have a material adverse affect on its business. None of the Company’s
directors, officers or
affiliates is involved in a proceeding adverse to our business or has a material
interest adverse to its business.
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
|
None.
PART
II
|
ITEM 5.
|
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY
SECURITIES |
Market
Information
As of
March 11, 2008, the Company’s common stock has been quoted on the OTC
Bulletin Board under the symbol “TMSH.OB”
During
2007, the Company filed a request for clearance of quotations on the OTC
Bulletin Board under SEC
Rule 15c2- 11, Subsection (a)(5) with
NASD Regulation Inc.
The
following table sets forth, for the calendar periods indicated, the range of the
high and low last reported bid and ask prices of the Company’s common stock from
March 11, 2008 through April 4, 2008, as reported by the OTC Bulletin
Board. The quotations represent inter-dealer prices without retail
mark-ups, mark-downs or commissions, and may not necessarily represent actual
transactions. The quotations may be rounded for presentation.
|
Period
|
|
High*
|
|
|
Low*
|
|
|
March
11, 2008 – April 14, 2008
|
|
$ |
.25 |
|
|
$ |
.15 |
|
On April
14, 2008, the last price of the Company’s common stock as reported on the
OTC Bulletin Board was $0.20 per share.
As of the
date of this Report, we have approximately 73 shareholders of record.
Certain of the shares of common stock are held in “street” name and may be held
by numerous beneficial owners.
Penny
Stock Regulations
The SEC
has adopted regulations which generally define "penny stock" to be an equity
security that has a market price of less than $5.00 per share. Our common stock,
falls within the definition of penny stock and subject to rules that impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000, or annual incomes
exceeding $200,000 or $300,000, together with their spouse).
For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of such securities and have received
the purchaser's prior written consent to the transaction. Additionally, for any
transaction, other than exempt transactions, involving a penny stock, the rules
require the delivery, prior to the transaction, of a risk disclosure document
mandated by the SEC relating to the penny stock market. The broker-dealer also
must disclose the commissions payable to both the broker-dealer and the
registered representative, current quotations for the securities and, if the
broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Finally, monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks.
Consequently, the "penny stock" rules may restrict the ability of broker-dealers
to sell the Compamy’s Common Stock and may affect the ability of investors to
sell their Common Stock in the secondary market.
Dividends
The
Company’s board of directors has not declared a dividend on our common stock
during the last two fiscal years and we do not anticipate the payments of
dividends in the near future as we intend to reinvest our profits to grow
operations.
Recent
Sales of Unregistered Securities
On March
9, 2007, TimeShareLoans.com and Timeshare Holdings Inc., entered into an
agreement and plan of reorganization whereby Timeshare Holdings acquired
TimeShareLoans.com in exchange for 29,991,000 restricted common shares of
Timeshare Holdings.
From
February 10, 2007 to April 2, 2007, we entered into subscription agreements with
the following investors for the issuance of common stock in the aggregate amount
of $7,600.00.
|
Last
Name
|
First
Name
|
Subscription
Date
|
Amount
in Dollars
|
|
Hull
|
Alan
M.
|
02/10/07
|
$100
|
|
Hull
|
Diane
L.
|
02/10/07
|
$100
|
|
Brundage
|
Margaret
|
02/12/07
|
$100
|
|
Brundage
|
Richard
|
02/12/07
|
$100
|
|
Brinegar
|
Aubrey
|
02/14/07
|
$100
|
|
Brinegar
|
Brian
|
02/14/07
|
$100
|
|
Hull
|
Ashley
|
02/14/07
|
$100
|
|
Hull
|
Bryant
|
02/14/07
|
$100
|
|
Hull
|
Jason
|
02/14/07
|
$100
|
|
Hull
|
Sarah
|
02/14/07
|
$100
|
|
Klosterman
|
Jack
|
02/15/07
|
$100
|
|
Smith
|
Brenda
|
02/15/07
|
$100
|
|
Smith
|
James
|
02/15/07
|
$100
|
|
Conti
|
John
& Marcia
|
02/16/07
|
$100
|
|
Jackson
|
Richard
& Trudy
|
02/20/07
|
$100
|
|
Hidalgo
|
David
|
02/21/07
|
$100
|
|
Hidalgo
|
Kathy
|
02/21/07
|
$100
|
|
Munley
|
Gerald
& Barbara
|
02/24/07
|
$500
|
|
Barton
|
Patricia
|
03/01/07
|
$100
|
|
Barton
|
Sterling
|
03/01/07
|
$100
|
|
Kessler
|
Paige
|
03/03/07
|
$100
|
|
Hidalgo
|
Trista
|
03/09/07
|
$100
|
|
Skorka
|
Mark
|
03/09/07
|
$100
|
|
Couch
|
Carol
|
03/11/07
|
$100
|
|
Denton
|
Aleatha
Lynn
|
03/11/07
|
$100
|
|
Denton
|
Autumn
|
03/11/07
|
$100
|
|
Denton
|
Natalie
|
03/11/07
|
$100
|
|
Moseley
|
Michael
|
03/11/07
|
$100
|
|
Moseley
|
Steven
|
03/11/07
|
$100
|
|
Rens
|
Douglas
|
03/11/07
|
$100
|
|
Rens
|
Jane
|
03/11/07
|
$100
|
|
Yach
|
Richard
& Teresa
|
03/20/07
|
$100
|
|
Cook
|
Darlene
|
03/21/07
|
$100
|
|
Erickson
|
Rae
|
03/21/07
|
$200
|
|
Ewert
|
Arline
|
03/21/07
|
$200
|
|
Giorgione
|
Steven
& Nancy
|
03/21/07
|
$500
|
|
Zuckerman
|
Janice
|
03/21/07
|
$100
|
|
Brundage
|
Daniel
K.
|
03/22/07
|
$100
|
|
Brundage
|
Diane
L.
|
03/22/07
|
$100
|
|
Brundage
|
James
M.
|
03/22/07
|
$100
|
|
Brundage
|
James
M. II
|
03/22/07
|
$100
|
|
Cook
|
Donald
|
03/22/07
|
$100
|
|
Guerra
|
Jan
C
|
03/23/07
|
$100
|
|
Guerra
|
Michael
|
3/23/2007
|
$100
|
|
Andrews
|
Catherine
|
03/25/07
|
$200
|
|
Andrews
|
Jerome
|
03/25/07
|
$100
|
|
|
Jerome
|
03/26/07
|
$100
|
|
Bland
|
Robert
& Katherine
|
03/27/07
|
$1000
|
|
Griffith
|
Bonnie
|
03/28/07
|
$100
|
|
Casamento
|
Laura
|
3/29/2007
|
$100
|
|
Manhardt
|
Amy
|
04/02/07
|
$100
|
|
St.
Clair
|
Cory
|
04/13/07
|
$500
|
|
|
|
Total
|
$7,600
|
During the year ended December 31, 2007 the Company issued 152,213 (post
merger) shares of common stock for cash at a per share price of
$0.79. Also, the Company issued an aggregate 126,844 (post merger)
common shares of the Company for services rendered on behalf of the
Company. These shares were valued at a per share price of
$0.71.
On May
18, 2007 The Company entered into a subscription agreement with LEA Management
Group, LLC for the issuance of 100,000 shares of common stock, at a price of
$.50 per share in the amount of $50,000.
All of
the above offerings and sales were deemed to be exempt under rule 506 of
Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No
advertising or general solicitation was employed in offering the securities. The
offerings and sales were made to a limited number of persons, all of whom were
accredited investors, business associates of Timeshare or executive officers of
Timeshare, and transfer was restricted by Timeshare in accordance with the
requirements of the Securities Act of 1933. In addition to representations by
the above-referenced persons, we have made independent determinations that all
of the above-referenced persons were accredited or sophisticated investors, and
that they were capable of analyzing the merits and risks of their investment,
and that they understood the speculative nature of their investment.
Furthermore, all of the above-referenced persons were provided with access to
our Securities and Exchange Commission filings. Except as expressly set forth
above, the individuals and entities to whom we issued securities as indicated in
this section of the registration statement are unaffiliated with
us.
Additionally,
in March of 2008 the Company had effectively registered or “Blue Skied”
10,000,000 shares of its common stock for sale in the state of California
through a Private Placement. The state of California requires
investors to meet or exceed “Super Suitability” standards and places additional
restrictions on the trading of those shares. The potential net proceeds of this
offering will be up to $5,000,000.
Equity
Compensation Plan Information
As of the
date of this report, the Company neither has any securities authorized for
issuance under any equity compensation plans nor does it have any equity
compensation plans.
Purchases
of Equity Securities by the Small Business Issuer and Affiliated
Purchasers
None.
|
ITEM
6.
|
MANAGEMENTS’
DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.
|
Overview
You
should read the following discussion and analysis of our financial condition and
results of operations together with our financial statements and the related
notes appearing in this Report. Some of the information contained in
this discussion and analysis or set forth elsewhere in this Report, including
information with respect to our plans and strategy for our business and related
financing, includes forward-looking statements that involve risks and
uncertainties. You should review the “Risk Factors” section of this
Report for a discussion of important factors that could cause actual results to
differ materially from the results described in or implied by the
forward-looking statements contained in the following discussion and
analysis.
TimeShareLoans.com,
Inc. was incorporated on July 12, 2005 to provide financing for consumers
wishing to purchase and/or refinance vacation ownership intervals in the
secondary, or resale market, or elsewhere. Timeshare Holdings Inc. was
incorporated in Nevada on January 30, 2007 with the intent of merging with
TimeShareLoans.com, Inc.
On March
9, 2007 we acquired TimeShareLoans.com, Inc. by entering into an Agreement and
Plan of Reorganization (the “Agreement”) with TimeShareLoans.com, Inc. Pursuant
to the terms of the Agreement, the respective shareholders of
TimeShareLoans.com, Inc. exchanged their outstanding shares in
TimeShareLoans.com, Inc. for shares in Timeshare Holdings (the “business
combination”). As a result of the business combination as set forth in the
Agreement, Timeshare Holdings became the parent company of TimeShareLoans.com,
Inc. and we took over all the business operations of TimeShareLoans.com, Inc.
Upon the closing of the business combination, a total of 1,182,700 shares of
TimeShareLoans.com, Inc. common stock were exchanged for 29,991,000 shares of
common stock in Timeshare Holdings.
As a
result of the transaction outlined above, the operations of the Company are
comprised of the operations of Timeshare and TimeshareLoans.com,
Inc.
Plan
of Operations
Upon
commencement of offering our loan products to the public, our Plan of Operations
for the first twelve months is to introduce our lending operations through a
variety of marketing programs over a wide geographic area, while maintaining our
credit quality. By offering a diversified product line of financing options
heretofore not widely available to the consumer, and maintaining a high level of
service, the Company anticipates a level of acceptance that will allow it to
grow its portfolio of receivables on a consistent growth pattern.
To
accomplish this strategic plan, the Company will implement its core marketing
programs, as discussed in detail in our Business Model section, which will allow
it to offer new loan products through the internet, direct mail and referral
programs, expansion of its network of correspondent real estate brokers as well
as the introduction of its programs and products to homeowners associations that
have been abandoned by project developers or been left on their own due to the
completion of the developers’ sales efforts.
Simultaneously,
the Company will expand its geographic diversity by finalizing its licensing
requirements in eighteen States throughout the Country that represent locations
accounting for approximately sixty five (65) percent of the timeshare projects,
and consumer residences that currently own vacation intervals.
To manage
this growth, the Company will need to attract qualified personnel for key
managerial as well as operational positions. During the next twelve months, the
Company will employ an additional twelve people that will be joining the Company
on a phased basis as the Company’s operations expand. Our strategic plan is to
fill one managerial and three operational positions at the onset of full scale
operations. The Company will also add two outside directors to its Board for
governance.
During
the next twelve months, the company will require funding to supplement our
anticipated revenues and fund our continuing operations. Resultantly, Company
officials will be developing additional sources of capital to fuel its loan
originations of non-deeded vacation interval product that supplement its loan
originations of deeded timeshare intervals, as well as the sale of its stock to
the public to cover operational shortfalls and start up costs.
The
following is a synopsis of management’s forecast for the first twelve months of
full operations. This forecast was built upon our good faith estimates,
conservatively cast, and assuming a successful initial public
offering:
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Loans Originated
|
|
|
878
|
|
|
Personal
Loans Originated
|
|
|
263
|
|
|
Total
Loans Originated
|
|
|
1141
|
|
|
|
|
|
|
|
|
Funding:
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Loans
|
|
$
|
8,780,000
|
|
|
Personal
Loans
|
|
|
2,630,000
|
|
|
Total
Funding
|
|
$
|
11,410,000
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Fee,
Interest,
|
|
|
|
|
|
And
service fee income
|
|
$
|
1,624,000
|
|
|
|
|
|
|
|
|
Operational
Expenses
|
|
$
|
2,587,000
|
|
|
|
|
|
|
|
|
Loss
from Operations
|
|
$
|
963,000
|
|
Trends
in Our Industry and Business
A number
of trends in our industry and business have a significant effect on our
operations and our financial results. These trends include:
The growth of secondary market
sales. Our market research has shown that the secondary-financing niche
is currently underserved . The vacation ownership
industry has continued to grow year after year and currently industry sales are
estimated to be in excess of $10 Billion annually. Based on industry data, it is
estimated that 40% of vacation ownership owners wish to acquire additional
intervals or use periods. At the same time, approximately 25% of owners will at
any given time wish to sell their interval. Currently, the American Resort
Development Association (ARDA) estimates that approximately 4.4 Million US
resident households own vacation ownership. Utilizing an average secondary
market price of $4,500 per interval the potential market for secondary market
sales is approximately $4 Billion and growing each year. The primary impediment
to the actual growth of secondary market sales has been a lack of consumer
financing. Despite the lack of financing the secondary market for vacation
ownership sales is approaching $1,000,000,000 annually.
The continued popularity and growth
of vacation ownership. Over the past 10 years, vacation ownership has
been one of the fastest growing sectors of the vacation and real estate
industries. Current sales levels are estimated to be about $10 billion annually
at resorts located within the United States alone. Estimated International sales
exceed $2 billion. Growth of the industry has been rapid. Current annual United
States sales volume is estimated to be more than 400,000 vacation ownership
weeks. Just 10 years ago, total volume (intervals sold) was only 29,000 weeks.
The total number of vacation ownership resorts within the United States has
increased during the last 10 years from 1,000 to over 1,600 (of all sizes and
status) and, during the past decade, over one-half of all households in the
country who have purchased resort properties have purchased a vacation ownership
interest.
The continued success in the travel
and tourism industries. Vacation ownership is also an increasingly
important element in the travel industry. Besides high sales volume, vacation
ownership offers many cost and operational advantages over other forms of
vacation accommodation. According to economic impact studies conducted by Ragatz
Associates, vacation ownership resorts experience an average annual occupancy
rate of about 85% with minimal seasonal fluctuations. By comparison, the average
resort hotel experiences about 60% occupancy and, often, extreme
seasonality.
Continued confidence in the economy
and consumer spending on travel. Depending upon location, vacation
ownership owners spend about $170 per day per visitor party in the local resort
area, primarily in eating and drinking establishments. This is 1.3 to 1.6 times
as much as the average spent by all visitor parties in the same areas. vacation
ownership development generates (directly and indirectly) about one job per
vacation ownership unit, and produces 2.5 to 7.5 times as much local government
revenue as it consumes. These figures do not include construction, maintenance,
or travel services expenditures, which add significantly to the total economic
impact of vacation ownership. Because of the growing impact of vacation
ownership, interest in this sector by the travel industry and others is growing.
A number of major hotel chains have become involved in vacation ownership
development, and increasingly, travel products specifically intended to serve
the vacation ownership owner are being provided.
Results
of Operations
Year
Ended December 31, 2007 as compared to Year Ended December 31, 2006
Revenues
remained at $0 for the year ended December 31, 2007 compared to $0 for the year
ended December 31, 2006. There has been no increase or decrease to
Revenues.
Cost of
sales remained at $0 for the year ended December 31, 2007 compared to $0 for the
year ended December 31, 2006. There has been no increase or decrease to Cost of
Sales.
Operating
Expenses decreased 93 % to $ 389,048 for the year ended December 31,
2007 compared to $ 5,960,672 for the year ended December 31,
2006. This decrease is attributable primarily to a reduction in the
level of start up costs.
Interest
expenses increased 46% to $ 27,312 for the year ended December 31, 2007 compared
to $ 18,724 of interest expense for the year ended 30, 2006. The increase in
interest expenses is attributable to increased borrowing to fund start up
expenses.
Net loss
decreased 93% to $ 402,509 for the year ended December 31, 2007
compared to $ 5,979,396 for the year ended December 31, 2006 as a direct result
of lower levels of start up costs.
Liquidity
and Capital Resources
Our total
current assets at December 31, 2007, comprised of cash, receivables, and prepaid
expenses were $12,570. Additionally, we had shareholder equity/(deficit) in the
amount of ($466,446) at December 31, 2007. This difference was attributable to
the sum of fixed assets, $15,910 and other assets of $9,127 less current
liabilities of $504,053.
Our cash
on hand increased to $ 2,191 as of December 31, 2007 compared to $
225 as of December 31, 2006.
Our
receivables at December 31, 2007 were $ 5,323. This is attributable to
sub-tenant rental revenues from our California office location.
As of
December 31, 2007 we had a working capital deficiency of $ 491,483. A
major portion of our debt is attributed to consulting fees, accounting fees,
attorney fees, and public company start up expenses. We plan to
reduce these debts with proceeds generated from normal operational cash flow as
well as the issuance of company stock.
The
current portion of long-term debt at December 31, 2007 was $ 277,060. We expect
to pay off the entire $277,060 by year-end 2009. We plan to pay this with
proceeds from private placement stock offering.
At
December 31, 2007 we had $0 bank debt.
We do not
have any off balance sheet arrangements that are reasonably likely to have
current or future effect on our financial condition, revenues, result of
operations, liquidity or capital expenditures.
Critical
Accounting Policies
Our
financial statements are prepared in accordance with accounting principles
generally accepted in the United States, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, the disclosure of
contingent assets and liabilities and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. The critical accounting policies that affect our more significant
estimates and assumptions used in the preparation of our financial statements
are reviewed and any required adjustments are recorded on a monthly
basis.
STATEMENTS
AND SUPPLEMENTARY DATA.
INDEX
TO FINANCIAL STATEMENTS
|
|
Page
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
|
Consolidated
Balance Sheet as of December 31, 2007
|
F-3
– F-4
|
|
Consolidated
Statements of Operations for the Period From
December
31, 2006 through December 31, 2007
|
F-5
|
|
Consolidated
Statements of Shareholders' Equity for the Period From December 31, 2006
through December 31, 2007
|
F-6
|
|
Consolidated
Statements of Cash Flows for the Period From
December
31, 2006 through December 31, 2007
|
F-7
– F-9
|
|
Notes
to Consolidated Financial Statements
|
F-10
– F-22
|
|
|
|
|
|
|
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Board of
Directors and Stockholders
Timeshare
Holdings, Inc.
Las
Vegas, Nevada
We have
audited the accompanying balance sheet of Timeshare Holdings, Inc. (a
development stage company) as of December 31, 2007 and the related statements of
operations, stockholders' equity and cash flows for the periods ended December
31, 2007 and 2006, and for the period July 12, 2005 (inception) through December
31, 2007. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We
conducted our audits in accordance with standards of the PCAOB (United States).
Those standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. The Company has determined that it is not required to have, nor
were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company's internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Timeshare Holdings, Inc. as of
December 31, 2007 and the results of its operations and cash flows for the years
ended December 31, 2007 and 2006, and for the period July 12, 2005 (inception)
through December 31, 2007 in conformity with accounting principles generally
accepted in the United States.
The
accompanying financial statements have been prepared assuming that Timeshare
Holdings, Inc. will continue as a going concern. As discussed in Note 2 to the
financial statements, Timeshare Holdings, Inc. has suffered recurring losses,
negative cash flows from operations, and has working capital deficiencies during
the periods presented which raises substantial doubt about the company's ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/Chisolm, Bierworld &
Nilson LLC
Chisholm,
Bierwolf & Nilson LLC
Bountiful,
Utah
April 11,
2008
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Balance Sheet
|
ASSETS
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash
|
|
$ |
2,191 |
|
|
Receivable
|
|
|
5,323 |
|
|
Prepaid
Expense
|
|
|
5,056 |
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
12,570 |
|
| |
|
|
|
|
|
Fixed
Assets
|
|
|
|
|
|
Furniture,
Fixture & Equipment (Net)
|
|
|
15,910 |
|
|
|
|
|
|
|
|
Total
Fixed Assets
|
|
|
15,910 |
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
Deposit
|
|
|
9,127 |
|
|
|
|
|
|
|
|
Total
Other Assets
|
|
|
9,127 |
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$ |
37,607 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
(DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
Payable
|
|
$ |
136,843 |
|
|
Accrued
Interest
|
|
|
38,774 |
|
|
Accrued
Expenses
|
|
|
51,376 |
|
|
Note
Payable- Related Party
|
|
|
277,060 |
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
504,053 |
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
504,053 |
|
|
|
|
|
|
|
|
Commitments
|
|
|
- |
|
|
|
|
|
|
|
|
Stockholders'
(Deficit)
|
|
|
|
|
|
Common
stock – December 31, 2007: 300,000,000 Shares Authorized
|
|
|
|
|
|
at
$0.001 Par Value; 30,167,000 Issued and Outstanding;
|
|
|
30,167 |
|
|
|
|
|
|
|
|
Additional
Paid-In-Capital
|
|
|
6,068,239 |
|
|
Deficit
accumulated during the Development Stage
|
|
|
(6,564,852 |
) |
|
|
|
|
|
|
|
Total
Stockholders' (Deficit)
|
|
|
(466,446 |
) |
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
|
|
$ |
37,607 |
|
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Statements
of Operations
|
|
|
|
|
|
|
|
|
Accumulated
from
|
|
|
|
|
|
|
|
|
|
|
July
12, 2005
|
|
|
|
|
|
|
|
|
|
|
(inception)
through
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues,
Net
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries
|
|
|
49,289 |
|
|
|
76,336 |
|
|
|
184,533 |
|
|
Compensation
Cost
|
|
|
90,059 |
|
|
|
5,542,247 |
|
|
|
5,632,306 |
|
|
Professional
Fees
|
|
|
125,655 |
|
|
|
190,887 |
|
|
|
316,542 |
|
|
General
& Administrative
|
|
|
124,045 |
|
|
|
151,202 |
|
|
|
399,286 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses
|
|
|
389,048 |
|
|
|
5,960,672 |
|
|
|
6,532,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
From Operations
|
|
|
(389,048 |
) |
|
|
(5,960,672 |
) |
|
|
(6,532,667 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income
|
|
|
13,851 |
|
|
|
0 |
|
|
|
13,851 |
|
|
Interest
Expense
|
|
|
(27,312 |
) |
|
|
(18,724 |
) |
|
|
(46,036 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
|
|
(13,461 |
) |
|
|
(18,724 |
) |
|
|
(32,185 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
Before Income Taxes
|
|
|
(402,509 |
) |
|
|
(5,979,396 |
) |
|
|
(6,564,852 |
) |
|
Income
Tax Expense
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss
|
|
$ |
(402,509 |
) |
|
$ |
(5,979,396 |
) |
|
$ |
(6,564,852 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and fully diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per share
|
|
$ |
(0.01 |
) |
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
|
|
30,112,526 |
|
|
|
24,962,066 |
|
|
|
|
|
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Statements
of Stockholders Equity
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
| |
|
Common
Stock
|
|
|
|
|
|
Accumulated
|
|
|
Stockholders'
|
|
| |
|
Shares
|
|
|
Amount
|
|
|
Paid
in Capital
|
|
|
Deficit
|
|
|
Equity
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
July 12, 2005
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for Founders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.01 |
|
per
share
|
|
|
21,563,483 |
|
|
|
21,564 |
|
|
|
(13,064 |
) |
|
|
|
|
|
|
8,500 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.79 |
|
per
share
|
|
|
253,688 |
|
|
|
254 |
|
|
|
199,746 |
|
|
|
|
|
|
|
200,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
for the period ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| December
31,2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(182,947 |
) |
|
|
(182,947 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
December 31, 2005
|
|
|
21,817,171 |
|
|
|
21,818 |
|
|
|
186,682 |
|
|
|
(182,947 |
) |
|
|
25,553 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.79 |
|
per
share
|
|
|
88,791 |
|
|
|
88 |
|
|
|
69,912 |
|
|
|
|
|
|
|
70,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.71 |
|
per
share
|
|
|
7,805,981 |
|
|
|
7,806 |
|
|
|
5,534,441 |
|
|
|
|
|
|
|
5,542,247 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
for the year ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,979,396 |
) |
|
|
(5,979,396 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
December 31, 2006
|
|
|
29,711,943 |
|
|
|
29,712 |
|
|
|
5,791,035 |
|
|
|
(6,162,343 |
) |
|
|
(341,596 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.79 |
|
per
share
|
|
|
152,213 |
|
|
|
152 |
|
|
|
119,848 |
|
|
|
|
|
|
|
120,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.71 |
|
per
share
|
|
|
126,844 |
|
|
|
127 |
|
|
|
89,932 |
|
|
|
|
|
|
|
90,059 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued pursuant to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a
Private Placement for cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.10 |
|
per
share
|
|
|
76,000 |
|
|
|
76 |
|
|
|
7,524 |
|
|
|
|
|
|
|
7,600 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed
Capital
|
|
|
- |
|
|
|
- |
|
|
|
10,000 |
|
|
|
|
|
|
|
10,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
issued for cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
|
$ |
0.50 |
|
per
share
|
|
|
100,000 |
|
|
|
100 |
|
|
|
49,900 |
|
|
|
|
|
|
|
50,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
for the yea ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(402,509 |
) |
|
|
(402,509 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
December 31, 2007
|
|
|
30,167,000 |
|
|
$ |
30,167 |
|
|
$ |
6,068,239 |
|
|
$ |
(6,564,852 |
) |
|
$ |
(466,446 |
) |
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Statements
of Cash Flows
|
|
|
|
|
|
|
|
|
Accumulated
from
|
|
|
|
|
|
|
|
|
|
|
July
12, 2005
|
|
|
|
|
Year
Ended
|
|
|
Year
Ended
|
|
|
(inception)
through
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2007
|
|
|
2006
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss)
|
|
$ |
(402,509 |
) |
|
$ |
(5,979,396 |
) |
|
$ |
(6,564,852 |
) |
|
Common
stock issued for services
|
|
|
90,059 |
|
|
|
5,542,247 |
|
|
|
5,640,806 |
|
|
Depreciation
& Amortization
|
|
|
3,624 |
|
|
|
3,016 |
|
|
|
7,027 |
|
|
Changes
in Operating Assets and Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase)
Decrease in Accounts Receivable
|
|
|
(5,323 |
) |
|
|
|
|
|
|
(5,323 |
) |
|
(Increase)
Decrease in Deferred Financing
|
|
|
25,000 |
|
|
|
- |
|
|
|
- |
|
|
(Increase)
Decrease in Prepaid Expense
|
|
|
(5,056 |
) |
|
|
- |
|
|
|
(5,056 |
) |
|
Increase
(Decrease) in Accounts Payable
|
|
|
14,156 |
|
|
|
122,687 |
|
|
|
136,843 |
|
|
Increase
(Decrease) in Accrued Interest
|
|
|
26,880 |
|
|
|
11,563 |
|
|
|
38,774 |
|
|
Increase
(Decrease) in Accrued Liabilities
|
|
|
51,376 |
|
|
|
|
|
|
|
51,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) by Operating Activities
|
|
|
(201,793 |
) |
|
|
(299,883 |
) |
|
|
(700,405 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
(9,127 |
) |
|
|
|
|
|
|
(20,347 |
) |
|
Purchase
of Property and Equipment
|
|
|
(527 |
) |
|
|
(11,190 |
) |
|
|
(22,937 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash (Used) by Investing Activities
|
|
|
(9,654 |
) |
|
|
(11,190 |
) |
|
|
(43,284 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from Stock Issuances
|
|
|
177,600 |
|
|
|
70,000 |
|
|
|
447,600 |
|
|
Capital
Contributed
|
|
|
10,000 |
|
|
|
|
|
|
|
10,000 |
|
|
Proceeds
from Notes Payable - Related Party
|
|
|
69,006 |
|
|
|
236,747 |
|
|
|
320,253 |
|
|
Repayment
of Notes Payable - Related Party
|
|
|
(43,193 |
) |
|
|
|
|
|
|
(43,193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided by Financing Activities
|
|
|
213,413 |
|
|
|
306,747 |
|
|
|
734,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
(Decrease) in Cash
|
|
|
1,966 |
|
|
|
(4,326 |
) |
|
|
(9,029 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents at Beginning of Period
|
|
|
225 |
|
|
|
4,551 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and Cash Equivalents at End of Period
|
|
$ |
2,191 |
|
|
$ |
225 |
|
|
$ |
(9,029 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Paid for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$ |
432 |
|
|
$ |
6,381 |
|
|
$ |
6,813 |
|
|
Income
Taxes
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non
cash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock issued for services
|
|
$ |
90,059 |
|
|
$ |
5,542,247 |
|
|
$ |
5,640,806 |
|
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 1 –
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a.
Organization
The
consolidated financial statements presented are those of Timeshare Holdings,
Inc., (“THoldings”) and its wholly-owned subsidiary, Timeshareloans.Com, Inc.,
(“TSL”), a development stage company. The consolidated entity
presented herewith utilizes the financial history of TSL prior to the merger,
more fully described in the following paragraphs. Collectively, they are
referred to herein as the "Company".
TSL was
incorporated in Nevada on July 12, 2005 with the goal of providing consumer
financing for those individuals and entities seeking to acquire, dispose or
refinance timeshare intervals or equivalents through a secondary or resale
market. Pursuant to Statement of Financial Accounting Standard No.7,
“Accounting and Reporting by Development Stage Enterprises”, the Company is
classified as a development stage company.
The
Company is headquartered in Las Vegas, Nevada and also maintains an office in
Irvine, California.
b. Basis of
Presentation and Accounting Method
The
accompanying consolidated financial statements have been prepared in accordance
with the rules and regulations of the United States Securities and Exchange
Commission, (“SEC”) for the presentation of financial
information. These consolidated financial statements, in the opinion
of management, include all adjustments necessary to present fairly the
consolidated balance sheet, consolidated operating results and consolidated cash
flows for the period presented in accordance with accounting principles
generally accepted in the United States of America (“GAAP”).
The
Company recognizes income and expense on the accrual basis of
accounting. The Company has elected a December 31 year
end.
c. The Principles of
Consolidation
The
consolidated financial statements include the accounts of Timeshare Holdings,
Inc. and its wholly owned subsidiary, TimeShareLoans.com, Inc. All
material inter-company accounts and transactions have been eliminated in the
consolidation.
d.
Revenue Recognition
The
Company applies the provisions of SEC Staff Accounting Bulletin No. 104,
"Revenue Recognition in Financial Statements" ("SAB 104"), which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC. SAB 104 outlines the basic criteria that must be
met to recognize revenue and provides guidance for disclosure related to revenue
recognition policies. In general, the Company recognizes revenue related to the
origination of short term, high yield consumer loans. The Company has
three main revenue streams that are: origination fees, interest spread and
servicing fees.
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 1 –
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
The
Company's revenues are generated from the sale of its loan products, and
performance of professional services regarding the origination and servicing of
consumer loans.
Origination
Fees – Origination fees are fees that the Company charges to approved
borrowers. These fees range from $899 to $1999 based upon the
underlying loan amount of the vacation interval product being purchased or
re-financed that secures the loan facility. These fees are earned and
collected from the borrower at the close of escrow of each consumer loan
transaction, and may be changed from time to time based on market
conditions.
Interest
Spread – The Interest Spread (the difference between the Company’s cost of
funds, interest expense, and the interest income that the Company earns from its
consumer loan facilities) is estimated at an arbitrage factor of 6%. The Company
accrues interest income as it is earned and interest expense as it is
incurred.
Servicing
fees- The Company will assess a servicing fee of $6.00 per month on all active
loan receivables. These fees will be billed to the loan obligor
monthly and collected along with the monthly mortgage payments of pricipal and
interest. These fees will be used to offset the servicing software
costs incurred by the Company. Net income per month is projected to
be $.75 per active loan. The Company recognizes servicing fee income on a cash
basis.
e. Cash
and Cash Equivalents
The
Company considers all highly liquid investments with maturities of three months
or less to be cash equivalents. This amount is expected to be received with the
first ____ months of 2008.
f.
Receivables
The
company establishes provisions for losses on accounts receivable if it
determines that it will not collect all or part of the outstanding
balance. The Company regularly reviews collectibility and establishes
or adjusts the allowance as necessary using the specific identification method.
As a development stage company, the Company has not yet commenced operations;
therefore there were no consumer accounts receivable at December 31, 2007 or at
December 31, 2006.
The
Company booked a receivable resulting from sub-tenants occupancy of space at the
Company’s Irvine office. These amounts are expected to be received during the
first and second quarters of 2008.
g.
Property & Equipment
Property
and equipment are recorded at cost. Depreciation is recorded using
the straight line method over the estimated useful lives of between 3 and 7
years.
Maintenance
and repairs are charged to expense as incurred; major renewals and betterments
are
capitalized. When items of property and equipment are sold or
retired, the related cost and accumulated depreciation is removed from the
accounts and any gain or loss is included in the results of
operations. Depreciation expense for the period ended December 31,
2007 and December 31, 2006 was $ 3,624 and $ 3,016 respectively.
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 1 –
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Property
and equipment consist of the following:
|
|
|
December 31, 2007
|
|
|
December 31, 2006
|
|
|
|
|
|
|
|
|
|
|
Furniture
and Equipment
|
|
$ |
22,937 |
|
|
$ |
22,410 |
|
|
Less
Accumulated Depreciation
|
|
|
(7,027 |
) |
|
|
(3,403 |
) |
|
Total
Property & Equipment
|
|
$ |
15,910 |
|
|
$ |
19,007 |
|
The
Company accounts for its long-lived assets in accordance with SFAS No.144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the historical cost carrying value of an
asset may no longer be appropriate. The Company assesses
recoverability of the carrying value of an asset by estimating the future net
cash flows expected to result from the asset, including eventual
disposition. If the future net cash flows are less than the carrying
value of the asset, an impairment loss is recorded equal to the difference
between the asset's carrying value and fair value or disposable
value.
h.
Offering Costs
The
Company capitalizes syndication costs, consisting of items incurred for the
packaging and promotion of syndicating the Company. These include
printing and preparation costs, legal costs, and tax opinions associated with
the marketing of the offering. These costs will be offset against the
offering proceeds upon its completion.
i.
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
j. Earnings
Per Share
Basic
earnings per share excludes dilution and is computed by dividing net income
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to insure
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that shared in the earnings of the Company. The Company
did not have any outstanding common stock equivalents at December 31, 2007 and
December 31, 2006.
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 1 –
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
Earnings per share is calculated as follows:
|
Basic
and fully diluted earnings per share:
|
|
December 31,2007
|
|
|
December 31,2006
|
|
|
Net
loss
|
|
|
(402,509 |
) |
|
|
(5,979,396 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares
|
|
|
30,112,526 |
|
|
|
24,962,066 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per share
|
|
$ |
(0.01 |
) |
|
$ |
(0.24 |
) |
k. Capital
Structure and Security Rights
Common
stock – The Company is authorized to issue three hundred million (300,000,000)
shares of common stock, par value $0.001 per share, of which thirty million, one
hundred sixty-seven thousand (30,167,000) shares have been issued. All common
shares are equal to each other with respect to voting, and dividend rights, and
are equal to each other with respect to liquidation rights.
l.
Recently Enacted Accounting Standards
In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS
160”). SFAS 160 will change the accounting and reporting for minority
interests, which will be recharacterized as noncontrolling interests and
classified as a component of equity. This new consolidation method will
significantly change the accounting for transactions with minority interest
holders. SFAS 160 is effective for us on January 1, 2009, and is not
expected to have a material effect on our consolidated financial
statements.
In
December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
141(R), “Business Combinations” (“SFAS 141R”). SFAS 141R establishes
the principles and requirements for how an acquirer recognizes and measures in
its financial statements the identifiable assets acquired, the liabilities
assumed, any noncontrolling interest in the acquiree, and the goodwill
acquired. SFAS 141R also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination. SFAS 141R is effective for us on January 1, 2009, and is
not expected to have a material effect on our consolidated financial
statements.
In
February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial
Assets and Financial Liabilities, including an amendment of FASB Statement No.
115” (“SFAS 159”). SFAS 159 permits companies to choose to measure
many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value, and establishes presentation
and disclosure requirements designed to facilitate comparisons between companies
that choose different measurement attributes for similar types of assets and
liabilities. SFAS 159 is effective for us on January 1, 2008, and is
not expected to have a material effect on our consolidated financial
statements.
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
Note 1-
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 158, "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
No. 87, 88, 106 and 132R" ("SFAS 158"). SFAS 158 requires employers that sponsor
defined benefit pension and post retirement plans to recognize previously
unrecognized actuarial losses and prior service costs in the statement of
financial position and to recognize future changes in these amounts in the year
in which changes occur through comprehensive income. As a result, the statement
of financial position will reflect funded status of those plans as an asset or
liability. Additionally, employers are required to measure the funded status of
a plan as of the date of their year-end statements of financial position and
provide additional disclosures. SFAS 158 is effective for financial statements
issued for fiscal years ending after December 15, 2006 for companies whose
securities are publicly traded. The Company does not expect the adoption of SFAS
158 to have a significant effect on its financial position or results of
operation. In September 2006, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 157, "Fair Value Measurements"
("SFAS 157"), which defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles ("GAAP"), and expands
disclosures about fair value measurements. Where applicable, SFAS 157 simplifies
and codifies related guidance within GAAP and does not require any new fair
value measurements. SFAS 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. Earlier adoption is encouraged. The Company does not expect the
adoption of SFAS 157 to have a significant effect on its financial position or
results of operation.
In June
2006, the Financial Accounting Standards Board issued FASB Interpretation No.
48, "Accounting for Uncertainty in Income Taxes – an interpretation of FASB
Statement No. 109" ("FIN 48"), which prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. FIN 48 also
provides guidance on de-recognition, classification, interest and penalties,
accounting in interim periods, disclosure and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. The Company does not expect
the adoption of FIN 48 to have a material impact on its financial reporting, and
the Company is currently evaluating the impact, if any, the adoption of FIN 48
will have on its disclosure requirements.
In March
2006, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 156, "Accounting for Servicing of Financial Assets --
an Amendment of FASB Statement No. 140 ("SFAS 156")." This statement requires an
entity to recognize a servicing asset or servicing liability each time it
undertakes an obligation to service a financial asset by entering into a
servicing contract in any of the following situations: a transfer of the
servicer's financial assets that meets the requirements for sale accounting; a
transfer of the servicer's financial assets to a qualifying special-purpose
entity in a guaranteed mortgage securitization in which the transferor retains
all of the resulting securities and classifies them as either available-for-sale
securities or trading securities; or an acquisition or assumption of an
obligation to service a financial asset that does not relate to financial assets
of the servicer or its consolidated affiliates. The statement also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value, if practicable, and permits an entity to choose either
the amortization or fair value method for subsequent measurement of each class
of servicing assets and liabilities. The
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
Note 1-
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)
statement
further permits, at its initial adoption, a one-time reclassification of
available-for-sale securities to trading securities by entities with recognized
servicing rights, without calling into question the treatment of other
available-for-sale securities under Financial Accounting Standards Board
Statement No. 115, provided that the available-for-sale securities are
identified in some manner as offsetting the entity's exposure to changes in fair
value of servicing assets or servicing liabilities that a servicer elects to
subsequently measure at fair value and requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the statement of financial position and additional disclosures for all
separately recognized servicing assets and servicing liabilities. SFAS 156 is
effective for fiscal years beginning after September 15, 2006, with early
adoption permitted as of the beginning of an entity's fiscal year. Management
believes the adoption of
SFAS 156
will have no immediate impact on the Company's financial condition or results of
operations.
In
February 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 155, "Accounting for Certain Hybrid Financial
Instruments – an amendment of FASB Statements No. 133 and 140" ("SFAS 155"), to
(a) permit fair value re-measurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require bifurcation, (b)
clarify which interest-only strip and principal-only strip are not subject to
the requirements of Statement 133, (c) establish a requirement to
evaluate
interests in securitized financial assets to identify interests that are
freestanding derivatives or that are hybrid financial instruments that contain
an embedded derivative requiring bifurcation, (d) clarify that concentrations of
credit risk in the form of subordination are not embedded derivatives, and (e)
amend Statement 140 to eliminate the prohibition on a qualifying special-purpose
entity from holding a derivative financial instrument that pertains to a
beneficial interest other than another derivative financial instrument. This
statement is effective for financial statements for fiscal years beginning after
September 15, 2006. Earlier adoption of SFAS 155 is permitted as of the
beginning of an entity's fiscal year, provided the entity has not yet issued any
financial statements for that fiscal year. Management believes SFAS 155 will
have no impact on the financial statements of the Company once
adopted.
The
implementation of the provisions of these pronouncements is not expected to have
a significant effect on the Company's consolidated financial statement
presentation.
m. Fair
Value of Financial Instruments
The fair
value of the Company’s cash and cash equivalents, receivables, accounts payable
and notes payable approximate carrying value based on their effective interest
rates compared to current market prices.
NOTE 2 –
GOING CONCERN
The
accompanying Financial Statements have been prepared assuming that the company
will continue as a going concern. The company has recurring net
losses, negative working capital and negative cash flow from operations,
and is dependent upon raising capital to continue operations. Our
ability to continue as a going concern is subject to our ability to generate a
profit and/or obtain necessary funding from outside sources, including obtaining
additional funding from the sale of our securities, increasing sales or
obtaining loans and grants from
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 2 –
GOING CONCERN (continued)
various
financial institutions where possible. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty. It is Management’s plan to generate additional working
capital from an Initial Public Offering to investors, as more fully discussed in
the following paragraphs, and then begin offering a new and better way to
accommodate purchases and re-finances of resale timeshares by
consumers.
NOTE 3 -
INCOME TAXES
The
Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax
assets in future years. Due to the uncertainty as to the utilization
of net operating loss carry forwards an evaluation allowance has been made to
the extent of any tax benefit that net operating losses may
generate. No provision for income taxes has been recorded due to the
net operating loss carry forward that will be offset against further
taxable income. No tax benefit has been reported in the financial
statements.
Deferred
tax assets and the valuation account as of December 31, 2007 is as
follows:
|
Deferred
tax asset:
|
|
December 31, 2007
|
|
|
December 31, 2006
|
|
|
Net
operating loss carry forward
|
|
|
2,232,050 |
|
|
|
2,095,197 |
|
|
Valuation
allowance
|
|
|
(2,232,050 |
) |
|
|
(2,095,197 |
) |
|
|
|
|
0 |
|
|
|
0 |
|
The
components of income tax expense are as follows:
|
|
|
December 31, 2007
|
|
|
December 31, 2006
|
|
|
Current
Federal Tax
|
|
|
|
|
|
|
|
Current
State Tax
|
|
|
|
|
|
|
|
Change
in NOL Benefit
|
|
|
136,853 |
|
|
|
2,032,995 |
|
|
Valuation
allowance
|
|
|
(136,853 |
) |
|
|
(2,032,995 |
) |
|
|
|
|
0 |
|
|
|
0 |
|
The
Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These
losses are as follows:
|
Year/Period
of Loss
|
|
Amount
|
|
Expiration
Date
|
|
December
31, 2005
|
|
$ |
182,947
|
|
2025
|
|
December
31, 2006
|
|
$ |
5,979,396 |
|
2026
|
|
|
|
$ |
402,509 |
|
2027
|
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 4 -
RELATED PARTY TRANSACTIONS (NOTE PAYABLE RELATED PARTY)
The
Company has issued Promissory Notes to corporate officers, directors and
investors that are also shareholders of Timeshare Holdings, Inc. The Notes are
unsecured, bare interest at rates of 9.5%-12% per annum and are due on demand.
Accrued interest as of December 31, 2007 was $ 38,774.
The
Company’s President funded the Company with Loans for $7,500 at an interest rate
of 12% in 2005, and also funded th Company with loans for $45,190, at an
interest rate of 10% and $40,493, at an interest rate of 12% in 2006. In 2007,
the President funded Loans in the amount of $30,898 at an interest rate of 12%.
The Company has repaid $ 43,193 of those loans in 2007. All notes are due on
demand. The Company’s President indirectly owns 10,311,000 shares,
34.4%, of the total issued and outstanding shares of the Company through a
family trust. Accrued interest as of December 31, 2007 was $12,515.
The
Company’s Chief Financial Officer funded the Company with Loans of $158,064, at
an interest rate of 12% in 2006. In 2007, the Chief Financial Officer, funded
the Company with Loans totaling $8,108, at an interest rate of 12%. All notes
are due on demand. The Company’s Chief Financial Officer indirectly owns
6,514,000 shares, 21.7%, of the total issued and outstanding shares of the
Company through a family trust. Accrued interest as of December 31, 2007 was $
25,304.
The
Company issued Promissory Notes in the amount of $ 30,000 to investors that are
also shareholders of Timeshare Holdings, Inc. for loans made to the company made
in 2007. The Promissory Notes bare interest at a rate of 9.5% per annum, are
unsecured and are due upon demand. Accrued interest as of December
31, 2007 was $ 955.
NOTE 5 -
COMMITMENTS AND CONTINGENCIES
Litigation
The
Company is currently not a party to any pending litigation, and is not aware of
any threatened litigation that has not been addressed and/or
resolved.
Operating
Leases
The
Company currently leases space for its Irvine, California office, consisting of
approximately 4,624 square feet of office space, located at 16842 Von Karman
Ave, Bldg. 400, 2nd Floor, Irvine, California. Monthly lease payments
are $8,430 and the lease expires on June 30, 2010.
The
Company's administrative staff and headquarters are located in Las Vegas,
Nevada. The office space is located at 2350 S Jones Blvd, Ste. 101,
Las Vegas, Nevada, 89146. The monthly lease payment of the location is $650 per
month, for approximately 150 square feet. The term of the Office Services
Agreement is determined on a month-to-month basis. The Company
anticipates increasing square footage as needed, and rent increasing to $1250
per month in 2008, and $1500 per month by 2009.
The
Company follows the guidance in the FASB Technical Bulletin No. 85-3 “Accounting
for Operating Leases with Scheduled Rent Increases” and records rent expense
using straight-line over the life of each lease.
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
|
Total
Lease Commitments
|
Year
|
|
December
31,
|
|
|
|
2008
|
|
|
94,474 |
|
|
|
2009
|
|
|
94,474 |
|
|
|
2010
|
|
|
78,729 |
|
|
|
Thereafter
|
|
|
- |
|
|
|
Total
|
|
$ |
267,677 |
|
Rent
Expense for the period ended December 31, 2007 and December 31, 2006 was $97,437
and $ 52,380, respectively.
NOTE 6 –
SUBSEQUENT EVENTS
In March
of 2008 the Company had effectively registered or “Blue Skied” 10,000,000 shares
of its common stock for sale in the state of California through a Private
Placement. The state of California requires investors to meet or
exceed “Super Suitability” standards and places additional restrictions on the
trading of those shares. The potential net proceeds of this offering will be up
to $5,000,000. As of April 7, 2008 the Company has sold 172,331
shares of common stock to eight investors for $26,000.
NOTE 7 –
STOCKHOLDERS’ (DEFICIT)
As a
result of the Agreement, dated March 9th 2007,
as described above, THoldings issued 29,991,000 shares of common stock to the
shareholders of TSL in exchange for the 1,182,700 shares of common stock of TSL,
a Development Stage Company, which is reflected in our financial presentation as
a forward split. The transaction represented an exchange of 100% of the
outstanding and issued common shares of TSL, a Development Stage
Company. The existing Shareholders of TSL, exchanged their
shares desiring that the transaction be qualified as a tax free reorganization
under Section 368 (a)(1)(B) of the Internal Revenue Code of 1968, as
amended. The Internal Revenue Service, “IRS”, has not ruled on this
transaction.
During
the first and second quarter of 2007, THoldings issued and sold for cash 76,000
shares of its common stock at a price of $0.10 to qualified investors through a
private placement which was exempt from the registration and prospectus delivery
requirements of the Securities Act of 1933, as amended.
During
the first quarter of 2007, the Company issued 152,213 (post merger) shares of
common stock for cash at a per share price of $0.79. Accordingly,
common stock and additional paid-in-capital have been charged $152 and $119,848.
Also during the first quarter of 2007, the Company issued an aggregate 126,844
(post merger) common shares of the Company for services rendered on behalf of
the Company. The shares were valued at a per share price of
$0.71.
During
the second quarter of 2007, the Company issued 100,000 shares of common stock
for cash at a price of $.50 per share. Accordingly, common stock and
additional paid in capital have been charged $100 and $49,900
respectively.
TIMESHARE
HOLDINGS, INC.
(A
Development Stage Company)
Notes to
the Consolidated Financial Statements
December
31, 2007 and 2006
NOTE 7 –
STOCKHOLDERS’ (DEFICIT) (continued)
The
Company did not sell nor issue shares for services during the third and fourth
quarter of 2007. The balance of authorized and issued shares of
Timeshare Holdings, Inc. common stock as of December 31, 2007 is 30,167,000
shares.
During
2006, the Company issued a total of 7,805,981 (post merger) shares of common
stock for services rendered on behalf of the Company. The shares were
valued at $0.71 per share.
During
the years ended December 31, 2005 and 2006, the Company issued 253,688 and
88,791 (post merger) shares of common stock for cash. The shares were
issued at a price of $0.79 per share. Accordingly, common stock and
additional paid-in-capital have been charged $254 and $199,746, and $88 and
$69,912, respectively.
During
the year ended December 31, 2005, the Company issued 21,563,483 (post merger)
shares to certain individuals as founder shares. These shares were
valued at $0.01 per share. Accordingly, common stock has been
credited in the amount of $21,564 and additional paid-in-capital has been
debited $13,064 to properly reflect the transaction subsequent to the merger and
plan of reorganization.
|
ITEM
8.
|
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
|
None.
|
ITEM
8A.
|
CONTROLS
AND PROCEDURES.
|
Evaluation
of Disclosure Controls and Procedures
The
Company maintains a set of disclosure controls and procedures designed to ensure
that information required to be disclosed by the Company in the reports filed
under the Securities Exchange Act, 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 the Company's management,
including the Company's chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required
disclosure.
Based
upon their evaluation as of the end of the period covered by this report, the
Company's chief executive officer and chief financial officer concluded that,
the Company's disclosure controls and procedures are effective to ensure that
information required to be included in the Company's periodic SEC filings is
recorded, processed, summarized, and reported within the time periods specified
in the SEC rules and forms.
Management’s
Report on Internal Control over Financial Reporting
The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting. The Company’s internal control system
was designed to provide reasonable assurance to our management and Board of
Directors regarding the preparation and fair presentation of published financial
statements.
The
Company’s management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2007. In making this assessment, it used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control—Integrated
Framework Based on its
assessment the Company’s management believes that, as of December 31, 2007, the
Company’s internal control over financial reporting is effective based on those
criteria.
This
annual report does not include an attestation report of the Company’s registered
accounting firm regarding internal control over financial
reporting. The management’s report was not subject to attestation by
the Company’s registered public accounting firm pursuant to temporary rules of
the Securities and Exchange Commission.
Changes
in Internal Control over Financial Reporting
No
changes in the Company's internal control over financial reporting have come to
management's attention during the Company's last fiscal quarter that have
materially affected, or are likely to materially affect, the Company's internal
control over financial reporting.
Limitations
on Controls
Management
does not expect that our disclosure controls and procedures or our internal
control over financial reporting will prevent or detect all error and fraud. Any
control system, no matter how well designed and operated, is based upon certain
assumptions and can provide only reasonable, not absolute, assurance that its
objectives will be met. Further, 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 the Company have
been detected.
|
ITEM
8B.
|
OTHER
INFORMATION.
|
None
PART
III
|
ITEM
9.
|
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.
|
Set forth
below is certain information regarding our directors and executive
officers. There are no family relationships between any of our directors
or executive officers. Each of our directors is elected to serve until the
next annual meeting of our shareholders and until his successor is elected and
qualified or until such director’s earlier death, removal or
termination.
The
following table sets forth certain information with respect to our directors and
executive officers.
The
directors and executive officers serving the Company are as
follows:
|
Name
|
|
Age
|
|
Position
|
|
|
|
|
|
|
|
Paul
Kenneth Thompson
|
|
60
|
|
Chief
Executive Officer and Chairman of the Board
|
|
|
|
|
|
|
|
Frederick
Henry Conte
|
|
56
|
|
President,
Chief Financial Officer, Director
|
|
|
|
|
|
|
|
Lynn
Denton
|
|
48
|
|
Secretary,
Vice President, Director of Loan
Administration
|
Paul Kenneth
Thompson has served as a Director and as the Chief Executive Officer and
President of TimeShareLoans.com, Inc. since July 22, 2005. Mr. Thompson is also
co-founder of Timeshare Holdings and has served as a Director and Chief
Executive Officer since its inception in January 2007. Mr. Thompson holds his
Real Estate Broker License in the State of California and is a licensed loan
officer in the State of North Carolina and Virginia. Since 1997,
Mr. Thompson is founder and has served as President of National Mortgage
Lending, Inc. or NMLI, a residential mortgage lender doing business in 40
states. In 1996 he served as a principle for a SEC Investment company, Catalina
Capital Management, Inc. Mr. Thompson has spent the last twenty years in
founder, executive and broker positions. Mr. Thompson attended UCLA, has been a
member of American Resort Development Association (ARDA) since 1999, and served
on the ARDA Finance Committee for 7 years.
Frederick Henry
Conte has served as co-founder, Treasurer, Chief Financial Officer and
Director of TimeShareLoans.com, Inc. since 2005. Mr. Conte has also served as a
founder, President and Chief Financial Officer of Timeshare Holdings’ and a
director since its inception in January 2007. Prior to joining Timeshare
Holdings, Mr. Conte served in various executive leadership positions with
several land development timeshare and resort companies. Mr. Conte is the
founder of FAVA Enterprises, LLC, a real estate consulting firm. Mr. Conte
received his Bachelor’s Degree from Syracuse University, and has earned the
designation of Registered Resort Professional (RRP) by the American Resort
Development Association (ARDA), sat on several ARDA committees and was member of
the ARDA Board of Directors for many years.
Lynn
Denton has served as co-founder, Secretary and a Director of
TimeShareLoans.com, Inc. since October 2005. Ms. Denton also has served as
Timeshare Holdings’ founder, Secretary and Director since its inception in
January 2007. For twenty-three years prior to joining Timeshare Holdings, Inc.,
Ms. Denton served in various management and loan administration positions at
Cendant Timeshare Resort Group. As Director for Cendant Timeshare Resort Group
she established an in-house collection operation to support Property Owner
Associations with collection of defaulted annual Maintenance Fees. She grew the
business by over 200% in the first 4 years. Ms. Denton developed and implemented
the Cendant Timeshare Resort Groups’ business plan to service and collect on
their portfolio of over $1,5MM in open receivables within acceptable currency
standards. Ms. Denton attended the University of Central Arkansas, and has
successfully passed the requirement of the American Resort Development
Association’s (ARDA) AIF Qualification (ARDA International Foundation) test
demonstrating her commitment to quality, industry knowledge, integrity and
pledge to adhere to ARDA’s Code of Standards and Ethics.
To our
knowledge, during the last five years, none of our directors and executive
officers (including those of our subsidiaries) has:
|
|
·
|
Had
a bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of
the bankruptcy or within two years prior to that
time.
|
|
|
·
|
Been
convicted in a criminal proceeding or been subject to a pending criminal
proceeding, excluding traffic violations and other minor
offenses.
|
|
|
·
|
Been
subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking
activities.
|
|
|
·
|
Been
found by a court of competent jurisdiction (in a civil action), the SEC,
or the Commodities Futures Trading Commission to have violated a federal
or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
|
Audit
Committee
We have
not yet appointed an audit committee, and our board of directors currently acts
as our audit committee. At the present time, we believe that the members of
board of directors are collectively capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. Our company, however, recognizes the importance of good
corporate governance and intends to appoint an audit committee comprised
entirely of independent directors, including at least one financial expert,
during our 2008 fiscal year.
|
ITEM
10.
|
EXECUTIVE
COMPENSATION.
|
The
following table sets forth information concerning the total compensation that we
have paid or that has accrued on behalf of our Chief Executive Officer and other
executive officers during the year ended December 31, 2007.
Summary Compensation
Table
The
following is a summary of the compensation paid by us to the individuals who
have served as our CEO and any executive officers who have received compensation
in excess of $100,000 for the years ended December 31, 2007 and
2006:
Summary
Compensation Table
|
Name
and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Option
Awards
|
|
Non-Equity
Incentive Plan Compensation
|
|
Change
in Pension Value and Non-Qualified Deferred Compensation Earnings
($)
|
|
All
other Compensation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
Kenneth Thompson
Chief
Executive Officer
|
|
|
2007
2006
|
|
$0
$10,716
|
|
|
- 0
-
|
|
- 0
-
|
|
|
- 0
-
-0-
|
|
- 0
-
-0-
|
|
|
- 0
-
-0-
|
|
$_0_
$10,716
|
Outstanding
Equity Awards at Fiscal Year-End
As of our
fiscal years ended December 31, 2007 and 2006, we did not have any stock option
plan or stock incentive plan and there were no outstanding equity awards as of
our fiscal years ended December 31, 2007 and 2006. No equity awards were granted
during the year ended December 31, 2007.
Currently,
we do not offer any annuity, pension or retirement benefits to be paid to any of
our officers, directors or employees. There are also no compensatory plans or
arrangements with respect to any individual named above which results or will
result from the resignation, retirement or any other termination of employment
with our company, or from a change in our control.
Employment Contracts and Termination
of Employment and Change-In-Control Arrangements
We do not
have any written employment agreements.
Director
Compensation
We do not
compensate our directors for their time spent on our behalf. The Company has no
standard arrangement for compensating the directors of the Company for their
attendance at meetings of the Board of Directors.
|
ITEM
11.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.
|
The
following table lists stock ownership of our common stock as of April 8,
2008. The information includes beneficial ownership by (i) holders of more
than 5% of our common stock, (ii) each of our current directors and executive
officers and (iii) all of our directors and executive officers as a
group. .
The
information is determined in accordance with Rule 13d-3 promulgated under the
Exchange Act based upon information furnished by the persons listed or contained
in filings made by them with the Commission. Except as noted below,
to our knowledge, each person named in the table has sole voting and investment
power with respect to all shares of our common stock, beneficially owned by
them.
|
|
|
Number
of Shares
|
|
|
|
|
|
Name
and Title of Beneficial Owner
|
|
Beneficially
Owned(1)
|
|
|
Percentage
Ownership
|
|
|
|
|
|
|
|
|
|
|
Paul
Kenneth Thompson
|
|
|
10,311,000
|
(2)
|
|
|
34.1
|
%
|
|
Chairman,
|
|
|
|
|
|
|
|
|
|
Chief
Executive Officer, and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frederick
Henry Conte
|
|
|
6,514,000
|
(3)
|
|
|
21.7
|
%
|
|
Chief
Financial Officer, President and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynn
Denton
|
|
|
751,000
|
|
|
|
2.5
|
%
|
|
Secretary
and VP, Director of Loan Admin.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors
and executive officers
|
|
|
17,576,000
|
|
|
|
58.2
|
%
|
|
as
a group (3 persons)
|
|
|
|
|
|
|
|
|
|
(1)
|
Unless
otherwise indicated and subject to applicable community property laws, to
our knowledge each stockholder named in the table possesses sole voting
and investment power with respect to all shares of common stock, except
for those owned jointly with that person’s spouse.
|
|
(2)
|
Includes
10,311,000 shares indirectly owned by Mr. Thompson through the Thompson
Family Trust.
|
|
(3)
|
Includes
6,514,000 shares indirectly owned by Mr. Conte through the Frederick H.
Conte and Bernadette R. Conte Family
Trust.
|
|
ITEM
12.
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
|
LEA
Management Group, LLC. and our Company
In
December 2006, LEA Management Group, LLC, or LEA, and the Company entered into
an Agreement for Services. Pursuant to the Agreement for Services, LEA agreed to
restructure TimeShareLoans.com, Inc. through the creation of a holding company,
Timeshare Holdings, Inc. and facilitate the business combination described
elsewhere in this report form 10-KSB. As payment for the services rendered by
LEA, TimeShareLoans.com, Inc. agreed to pay LEA according to the following
timeline and amount:
|
·
|
Fifteen
percent of Timeshare Holdings, Inc.’s common stock (4,500,000 shares) are
to be placed in escrow and a portion of those shares are to be released to
LEA upon acceptance of Timeshare Holdings, Inc. as an OTCBB listed company
by the NASDAQ. Twenty-five percent of the shares shall remain in escrow
for eighteen months;
|
|
·
|
$100,000
due in three equal payments before the Company is accepted as a public
company with the SEC; of which two payments of $33,333 each have already
been made to LEA Management Group.
|
|
·
|
Thirteen
percent of Timeshare Holdings, Inc’s common stock (3,900,000 shares) are
to be placed in escrow and a portion of these shares are to be delivered
to The Research Evaluation Center upon acceptance of Timeshare Holdings,
Inc. as an OTCBB listed company by NASDAQ. Twenty-five percent of the
shares shall remain in escrow for eighteen months or until released by
Timeshare Holdings Inc.; and
|
|
·
|
Twelve
percent of Timeshare Holdings, Inc’s common stock (3,600,000 shares) are
to be placed in escrow and delivered to a mutually acceptable PR/IR firm
upon acceptance of Timeshare Holdings, Inc. as an OTCBB listed company by
NASDAQ, as required to fund PR/IR activities. These shares
are registered.
|
National
Mortgage Lending, Inc. and our Company
National
Mortgage Lending, Inc., (“NMLI”), is wholly owned by Paul Kenneth Thompson, the
CEO, President and Director of the Company. On February 1, 2006,
TimeShareLoans.com, Inc. and NMLI entered into a Service Agreement whereby NMLI
agreed to assist TimeShareLoans.com, Inc. in resolving any serious delinquency
or default on any timeshare loans. The term of the Services Agreement is five
years, and will be automatically renewed every year thereafter unless proper
notice is given. Pursuant to the Services Agreement, NMLI is entitled to receive
collection fees from each borrower to whom NMLI provides refinancing
assistance.
Upon
finalization of the new lease discussed elsewhere, NMLI has become a sub-tenant
for the space in Irvine, California leased by the Company, as described in
“Leases.”
The
Company has issued Promissory Notes to corporate officers and directors and
investors who are shareholders of the company. The Notes are unsecured, bare
interest at rates of 9.5%-12% per annum and are due on demand. Accrued interest
as of December 31, 2007 was $38,774.
The
Company’s CEO funded the Company with loans for $45,190 at an interest rate of
10% and $40,493 at an interest rate of 12% in 2006. In 2007, the CEO
funded loans in the amount of $30,898 at an interest rate of 12%. The
Company has repaid $43,193 of those loans in 2007. All notes are due
on demand. The Company’s CEO indirectly owns 10,311,000 shares,
34.1%, of the total issued and outstanding shares of the Company through a
family Trust.
The
Company’s President and CFO funded the Company with loans of $158,064 at an
interest rate of 12% in 2006. In 2007, the President and CFO funded
the Company with loans of $8,108 at an interest rate of 12%. All
notes are due on demand. The Company’s President and CFO indirectly
owns 6,514,000 shares 21.6%, of the total issued and outstanding shares of the
Company through a family Trust.
Director
Independence
The
Company currently does not have a director that qualifies as an “independent”
director as that term is defined under the National Association of Securities
Dealers Automated Quotation system. Our company, however, recognizes
the importance of good corporate governance and intends to appoint an audit
committee comprised entirely of independent directors, including at least one
financial expert, during our 2008 fiscal year.
Exhibits:
|
Exhibit No.
|
Description of Exhibit
|
|
2.1
|
Agreement
and Plan of Reorganization between Timeshare Holdings Inc. and
TimeShareLoans.com, dated March 9, 2007 (Incorporated by reference to Form
SB-2 (File No. 333-145409), filed with the Securities and Exchange
Commission on August 13, 2007)
|
|
3.1
|
Articles
of Incorporation (Incorporated by reference to Form SB-2 (File No.
333-145409), filed with the Securities and Exchange Commission on August
13, 2007)
|
|
3.2
|
By-laws
(Incorporated by reference to Form SB-2 (File No. 333-145409), filed with
the Securities and Exchange Commission on August 13,
2007)
|
|
10.1
|
Service
Agreement entered into with LEA Management Group, date December 6, 2006
(Incorporated by reference to Form SB-2 (File No. 333-145409), filed with
the Securities and Exchange Commission on August 13,
2007)
|
|
10.2
|
Service
Agreement entered into with National Mortgage Lending Inc., dated February
1, 2006 (Incorporated by reference to Form SB-2 (File No. 333-145409),
filed with the Securities and Exchange Commission on August 13,
2007)
|
|
10.4
|
Subscription
Agreements (Incorporated by reference to Form SB-2 (File No. 333-145409),
filed with the Securities and Exchange Commission on August 13,
2007)
|
|
10.5
|
Escrow
Agreement to be filed by amendment
|
|
10.6
|
Waiver
Agreement, dated July 20, 2007 (Incorporated by reference to Form SB-2
(File No. 333-145409), filed with the Securities and Exchange Commission
on August 13, 2007)
|
|
21.1
|
List
of Subsidiaries of the Company (Incorporated by reference to Form SB-2
(File No. 333-145409), filed with the Securities and Exchange Commission
on August 13, 2007)
|
|
23.1
|
Report
of Independent Registered Public Accounting Form (Chisolm Bierwolf &
Nielsen LLP) (filed herewith). |
|
31.1
|
Certification
by Chief Executive Officer pursuant to Sarbanes Oxley Act of 2002 Section
302. |
|
31.2
|
Certification
by Chief Financial Officer pursuant to Sarbanes Oxley Act of 2002 Section
302. |
|
32.1
|
Certification
by Chief Executive Officer pursuant to Sarbanes-Oxley Act of 2002 Section
906. |
|
32.2
|
Certification
by Chief Financial Officer pursuant to Sarbanes-Oxley Act of 2002 Section
906. |
|
ITEM
14.
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES.
|
Audit
Fees. The aggregate fees incurred by the Company’s independent registered public
accounting firms, for professional services rendered for the audit of our annual
financial statements for the year ended December 31, 2007, and for the reviews
of the financial statements included in our Quarterly Reports on Form 10-QSB
during those fiscal years were approximately $ 2,270.
Audit-Related
Fees. The aggregate fees incurred by the Company’s independent registered public
accounting firms were $ 36,071 for audit-related services during the year ended
December 31, 2007.
Tax Fees.
The aggregate fees incurred by the Company’s independent registered public
accounting firms were $ 0 for tax compliance or tax consulting services during
the years ended December 31, 2007 and December 31, 2006.
All Other
Fees. The Company did not incur any other fees from its independent registered
public accounting firms for services rendered to the Company, other than the
services covered in "Audit Fees" for the fiscal year ended December 31,
2007.
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date:
April 15, 2008
|
|
TIMESHARE
HOLDINGS, INC.
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
Paul Kenneth Thompson
|
|
|
|
Paul
Kenneth Thompson
|
|
|
|
Chief
Executive Officer
|
In
accordance with the Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
|
Name
|
|
Title
|
|
Date
|
| |
|
|
|
|
|
/s/Paul
Kenneth Thompson
|
|
Chief
Executive Officer and Chairman of the Board of
|
|
April
15, 2008
|
|
Paul
Kenneth Thompson
|
|
Directors |
|
|
| |
|
|
|
|
|
/s/
Frederick Henry Conte
|
|
President
and Chief Financial Officer (principal financial
|
|
April
15, 2008
|
|
Frederick
Henry Conte
|
|
and
accounting officer) and Director |
|
|
| |
|
|
|
|
|
/s/
Lynn Denton
|
|
Secretary
and Director
|
|
April15,
2008
|
|
Lynn
Denton
|
|
|
|
|
31