Item 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Plan of Operation
We are a "blank check" company formed on January 28, 2000, to effect a
combination with a yet unidentified operating business which we expect to have
significant growth potential. To date, our efforts have been limited to
organizational activities. We have no plans, arrangements or understandings with
any prospective business combination candidates and have not targeted any
business for investigation and evaluation nor are there any assurances that we
will find a suitable business with which to combine. The implementation of our
business objectives is wholly contingent upon a business combination and/or the
successful sale of our securities. We intend to utilize the proceeds of any
offering, any sales of equity securities or debt securities, bank and other
borrowings or a combination of those sources to effect a business combination
with a target business which we believe has significant growth potential.
A common reason for a target company to enter into a merger with a blank check
company is the desire to establish a public trading market for its shares. Such
a company would hope to avoid the perceived adverse consequences of undertaking
a public offering itself, such as the time delays and significant expenses
incurred to comply with the various Federal and state securities law that
regulate initial public offerings.
Effective as of January 8, 2004, TPL acquired substantially all of the equity
securities of Twin Lakes for $32,000 through the purchase of an aggregate of
2,940,000 shares of common stock of representing 98% of the then outstanding
common stock, and Class A warrants to acquire 1,000,000 shares of Twin Lakes'
common stock from four founding shareholders who retained approximately 2% of
Twin Lakes' then outstanding common stock. Effective upon the closing, Arnold P.
Kling joined Twin Lakes as president, treasurer and chairman of the board of
directors, and Kirk M. Warshaw was appointed chief financial officer.
Simultaneously, Johnny R. Thomas resigned as president, chairman and treasurer.
Our officers are only required to devote a small portion of their time (less
than 10%) to our affairs on a part-time or as-needed basis. We expect to use
outside consultants, advisors, attorneys and accountants as necessary, none of
which will be hired on a retainer basis. We do not anticipate hiring any
full-time employees so long as we are seeking and evaluating business
opportunities.
As a result of our limited resources, unless and until the warrants are
exercised or additional financing is obtained, we expect to have sufficient
proceeds to effect only a single business combination. Accordingly, the
prospects for our success will be entirely dependent upon the future performance
of a single business. Unlike certain entities that have the resources to
consummate several business combinations or entities operating in multiple
industries or multiple segments of a single industry, we will not have the
resources to diversify our operations or benefit from the possible spreading of
risks or offsetting of losses. A target business may be dependent upon the
development or market acceptance of a single or limited number of products,
processes or services, in which case there will be an even higher risk that the
target business will not prove to be commercially viable.
We expect our present management to play no managerial role in Twin Lakes
following a business combination. Although we intend to scrutinize closely the
management of a prospective target business in connection with our evaluation of
a business combination with a target business, our assessment of management may
be incorrect. We cannot assure you that we will find a suitable business with
which to combine.
Three months ended March 31, 2006 compared to three months ended March 31, 2005
Because we currently do not have, nor have we ever had since inception, any
business operations, we had no revenues during the three months ended March 31,
2006 and the three months ended March 31, 2005. Total expenses for the three
months ended March 31, 2006 increased to $7,363 as compared to $2,574 for the
2005 period. These expenses constituted
8
professional and filing fees and were more than the professional and filing fees
incurred during the 2005 period because of the aforementioned activity regarding
Twin Lakes' debt and capital structure.
Liquidity and Capital Resources
Twin Lakes' principal source of operating capital recently has been provided in
the form of loans and capital contributions from shareholders. Twin Lakes does
not have any revenues from any operations absent a merger or other combination
with an operating company and no assurance can be given that such a merger or
other combination will occur or that Twin Lakes can engage in any public or
private sales of Twin Lakes' equity or debt securities to raise working capital.
Twin Lakes is dependent upon future loans from its present stockholders or
management and there can be no assurances that its present shareholders or
management will make any loans to Twin Lakes. At March 31, 2006, Twin Lakes had
cash of $2,093 and negative working capital of $4,114.
Twin Lakes' present material commitments are professional and administrative
fees and expenses associated with the preparation of its filings with the
Securities and Exchange Commission and other regulatory requirements. In the
event that Twin Lakes engages in any merger or other combination with an
operating company, it will have additional material commitments, although Twin
Lakes presently is not engaged in any discussions regarding any merger or other
combination with an operating company and cannot offer any assurances that it
will engage in any merger or other combination with an operating company within
the next twelve months.
Commitments
We do not have any commitments which are required to be disclosed in tabular
form as of March 31, 2006.
Item 3. Controls and Procedures.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Our management, with the
participation of the President and chief financial officer, carried out an
evaluation of the effectiveness of our "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules
13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report
(the "Evaluation Date"). Based upon that evaluation, the President and chief
financial officer concluded that, as of the Evaluation Date, our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act (i)
is recorded, processed, summarized and reported, within the time periods
specified in the SEC's rules and forms and (ii) is accumulated and communicated
to our management, including our President and chief financial officer, as
appropriate to allow timely decisions regarding required disclosure.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING. There were no changes in
our internal controls over financial reporting that occurred during our fiscal
first quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We currently are not a party to any legal proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
On January 9, 2006, Turquoise Partners, LLC, our then principal
shareholder, converted $32,163 of debt into 9,459,706 shares of our
Common Stock pursuant to an Agreement dated January 9, 2006.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
EXHIBIT NO. DESCRIPTION
----------- -----------
4.6 Convertible Grid Note Conversion Agreement dated January 9,
2006(1)
31.1 Certification of the President pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of the President pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(1) Filed as an Exhibit with the same number in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 2005 and incorporated herein by
reference.
10
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Twin Lakes, Inc.
Dated: May 10, 2006 /s/ Arnold P. Kling
--------------------------------------------
Arnold P. Kling, President
(Principal Executive Officer)
Dated: May 10, 2006 /s/ Kirk M. Warshaw
--------------------------------------------
Kirk M. Warshaw, Chief Financial Officer
(Principal Financial and Accounting Officer)
11
EXHIBIT 31.1
CERTIFICATION
I, Arnold P. Kling, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Twin Lakes, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the small business issuer as of, and for, the periods presented in this
report;
4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the small business issuer and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer is made known to us by others within those
entities, particularly during the period in which this report is
being prepared;
b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter
(the small business issuer's fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably
likely to materially affect, the small business issuer's internal
control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the small
business issuer's ability to record, process, summarize and
report financial information; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: May 10, 2006
/s/ ARNOLD P. KLING
--------------------
Arnold P. Kling
President
EXHIBIT 31.2
CERTIFICATION
I, Kirk M. Warshaw, certify that:
6. I have reviewed this quarterly report on Form 10-QSB of Twin Lakes, Inc.;
7. Based on my knowledge, this report does not contain any untrue statement of
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
8. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the small business issuer as of, and for, the periods presented in this
report;
9. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the small business issuer and have:
d) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer is made known to us by others within those
entities, particularly during the period in which this report is
being prepared;
e) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
f) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter
(the small business issuer's fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably
likely to materially affect, the small business issuer's internal
control over financial reporting; and
10. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):
c) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the small
business issuer's ability to record, process, summarize and
report financial information; and
d) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: May 10, 2006
/s/ KIRK M. WARSHAW
--------------------
Kirk M. Warshaw
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Twin Lakes, Inc. (the
"Company") on Form 10-QSB for the period ending March 31, 2006 as filed with the
Securities and Exchange Commission (the "Report"), I, Arnold P. Kling, President
of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to
ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
/s/ Arnold P. Kling
----------------------------
Arnold P. Kling
President
May 10, 2006
A signed original of this certification has been provided to the Company and
will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Twin Lakes, Inc. (the
"Company") on Form 10-QSB for the period ending March 31, 2006 as filed with the
Securities and Exchange Commission (the "Report"), I, Kirk M. Warshaw, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and result of
operations of the Company.
/s/ Kirk M. Warshaw
-----------------------------------
Kirk M. Warshaw
Chief Financial Officer
May 10, 2006
A signed original of this certification has been provided to the Company and
will be retained by the Company and furnished to the Securities and Exchange
Commission or its staff upon request.
Next Section
Previous Section