Edgar Filing: Tremont Fair, Inc.

f10q_tremontfair.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ______

Commission File Number 333-107179 & 000-51210

TREMONT FAIR, INC.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	980380519 (I.R.S. Employer Identification No.)

10497 Town & Country Way, Suite 214, Houston, TX 77024 (Address of principal executive offices) (Zip Code)

(713) 785-4411 (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] Smaller reporting company [X]

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

Yes [ ] No [X]

As of May 10, 2010, there were 98,194,332 outstanding shares of the registrant's common stock, $0.001 par value per share.

TABLE OF CONTENTS

	Page No.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements		1
Item 2. Management's Discussion and Analysis		9
Item 3. Quantitative and Qualitative Disclosures About Market Risk		12
Item 4T. Controls and Procedures		12
PART II – OTHER INFORMATION
Item 1. Legal Proceedings		13
Item 1A. Risk Factors		13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3. Defaults Upon Senior Securities		18
Item 4. Submission of Matters to a Vote of Security Holders		18
Item 5. Other Information		18
Item 6. Exhibits		18

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TREMONT FAIR, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)

	March 31,			December 31,
	2010			2009
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	7,777		$	17,522
Accounts receivable-related parties		12,693			12,664
Prepaid expenses		14,052			18,839
Total current assets		34,522			49,025

Property and equipment, net of accumulated depreciation of $220
and $93, respectively		2,361			2,488

Other assets		2,565			2,565

TOTAL ASSETS	$	39,448		$	54,078


LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	127,667		$	78,442
Accounts payable-related party		8,278			-
Advances from related party		259,655			187,565
Note payable-related party		100,000			100,000
TOTAL CURRENT LIABILITIES		495,600			366,007

SHAREHOLDERS’ DEFICIT
Preferred stock, $0.001 par value; 20,000,000 shares authorized,
no shares issued and outstanding		-			-
Common stock, $0.001 par value; 200,000,000 shares authorized,
98,194,332 and 97,402,665 shares issued and outstanding, respectively		98,194			97,402
Paid-in capital deficit		(498,457	)		(513,915	)
Retained earnings (accumulated deficit)		(55,889	)		104,584
Total shareholders’ deficit		(456,152	)		(311,929	)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	39,448		$	54,078
See notes to consolidated financial statements.

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TREMONT FAIR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

	Successor			Predecessor

	For the Three			For the Three
	Months Ended			Months Ended
	March 31,			March 31,
	2010			2009

REVENUE	$	44,523		$	90,677

OPERATING EXPENSES
Selling, general and administrative expense		203,619			48,145
Depreciation expense		127			-
Total operating expenses		203,746			48,145

Net operating profit (loss)		(159,223	)		42,532

OTHER INCOME (EXPENSE)
Interest expense		(1,250	)		-

Net income (loss)	$	(160,473	)	$	42,532


Basic and diluted net income per share	$	0.00		$	0.00

Weighted average common shares outstanding-basic and diluted		97,428,128			80,000,000



See notes to consolidated financial statements.

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TREMONT FAIR, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT
(unaudited)
												Retained
									Paid-in			Earnings
	Preferred Stock				Common Stock				Capital			(Accumulated
	Shares		Amount		Shares		Amount		Deficit			Deficit)			Total

Balances, December 31, 2009		-	$	-		97,402,665	$	97,402	$	(513,915	)	$	104,584		$	(311,929	)

Stock issued for:
services		-		-		791,667		792		15,458			-			16,250

Net loss													(160,473	)		(160,473	)


Balances, March 31, 2010		-	$	-		98,194,332	$	98,194	$	(498,457	)	$	(55,889	)	$	(456,152	)

See notes to consolidated financial statements.

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TREMONT FAIR, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Successor			Predecessor

	For the Three			For the Three
	Months Ended			Months Ended
	March 31,			March 31,
	2010			2009
Cash flows from operating activities:
Net income (loss)	$	(160,473	)	$	42,532

Adjustments to reconcile net income (loss) to net
cash from operating activities:
Depreciation and amortization		127			-
Stock-based compensation		16,250			-
Changes in operating assets and liabilities
Accounts receivable-related parties		(29	)		-
Prepaid expenses		4,787			-
Accounts payable and accrued liabilities		49,226			-
Accounts payable-related party		8,278			-
Net cash provided by (used in ) operating activities		(81,834	)		42,532

Cash flows from financing activities:
Net proceeds from related party advances		72,089			-
Payments to Creekstone Equity Management		-			(42,532	)
Net cash provided by (used in) financing activities		72,089			(42,532	)

Net decrease in cash and cash equivalents		(9,745	)		-
Cash and cash equivalents, at beginning of period		17,522			-
Cash and cash equivalents, at end of period	$	7,777		$	-

Supplemental cash flow information:
Cash paid for interest	$	1,250		$	-
Income taxes paid in cash	$	-		$	-


See notes to consolidated financial statements.

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TREMONT FAIR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Tremont Fair, Inc. ("the Company") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Tremont’s annual report filed with the SEC on Form 10-K for the year ended December 31, 2009. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent year 2009 as reported in Form 10-K have been omitted.

Reverse Merger

On July 29, 2009, the Board of Directors and a majority of the shareholders agreed to amend and restate, in its entirety, the Articles of Incorporation and Bylaws of the Company. The restated Articles of Incorporation provides, among other things, for an increase in the authorized shares of the Company from 110,000,000 to 220,000,000, with 200,000,000 constituted as common stock and 20,000,000 constituted as preferred stock. The restated Articles of Incorporation also changed the name of the Company from Cancer Detection Corporation to Tremont Fair, Inc. On July 29, 2009, pursuant to the restatement of the Company’s Bylaws, the Board of Directors agreed to change the Company’s fiscal year end from May 31 to December 31.

On July 31, 2009, Tremont Fair, Inc. entered into an agreement to acquire all the outstanding shares of Tremont Fair Holdings, Inc., a Texas corporation, in exchange for eighty million (80,000,000) shares of restricted common stock of Tremont Fair, Inc. There were 16,503,128 shares of common stock outstanding for Cancer Detection Corporation. Tremont Fair Holdings, Inc. seeks to capitalize on the real estate opportunities resulting from the dislocation in the credit markets, by acquiring, rehabilitating, stabilizing and selling distressed multifamily properties in south-central United States, predominantly in Texas and Arizona. Prior to the Acquisition, Tremont Fair Holdings, Inc. was wholly-owned by Cumbria Capital, L.P., a Texas limited partnership that is owned and controlled by Cyrus Boga, an executive officer and director of Tremont Fair, Inc.

The acquisition of Tremont Fair Holdings, Inc. by Tremont Fair, Inc. represents a reverse merger with the shareholder of Tremont Fair Holdings, Inc. assuming control and responsibilities for the Company’s activities. Tremont Fair Holdings, Inc. is the accounting acquirer. For accounting purposes, the date of inception for the Company is July 27, 2009, the date that Tremont Fair Holdings, Inc. was incorporated.

Basis of Presentation-Predecessor

Effective September 1, 2009, Tremont Fair Holdings, Inc. acquired two property management agreements from Creekstone Equity Management, a company controlled by Cyrus Boga (the “Management Agreements”). Successor references herein are referring to the consolidated information pertaining to Tremont Fair, Inc. and its wholly owned subsidiary Tremont Fair Holdings, Inc. Predecessor references herein relate to the property management operations of the two agreements previously owned by Creekstone Equity Management.

These financial statements include the accounts of the Predecessor for the Management Agreements. Historically, financial statements have not been prepared for the Management Agreements as it had no

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separate legal status of existence. The accompanying carve-out financial statements have been prepared to present the statements of operations and cash flows of the Management Agreements for purposes of complying with the rules and regulations of the Securities and Exchange Commission as required by S-X Rule 8-02. These statements include only those related operations of the two property management agreements as historically incurred by the Creekstone Equity management and exclude all other operations of Creekstone Equity Management. The accompanying carve-out financial statements have been prepared in accordance with accounting principles generally accepted using management Agreements-specific information where available and allocations and estimates where data is not maintained on a Management Agreements-specific basis within its books and records. Due to the amount of allocations and estimates used to prepare these carve-out financial statements, they may not reflect the results of operations and cash flows of the Management Agreements in the future or what its operations and cash flows would have been had the Management Agreements been operating on a stand-alone basis during the periods presented.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and financial instruments which mature within three months of the date of purchase.

Fair Value of Financial Instruments

As at March 31, 2010, the fair value of cash and accounts payable approximate carrying values because of the short-term maturity of these instruments.

Revenue Recognition

Revenue from management services is recognized when service is completed.

Stock-Based Compensation

The Company sometimes grants shares of stock for services. These grants are accounted for based on the grant date fair values.

Earnings per Share of Common Stock

Basic net income per share calculations are determined by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted net income per share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. During the reporting period when they are anti-dilutive, common share equivalents, if any, are not considered in the computation. As of March 31, 2010, the Company had no dilutive common shares equivalents outstanding.

Recent Accounting Pronouncements

Recently issued or adopted accounting pronouncements are not expected to have, or did not have, a material effect on our financial position or results of operations.

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2. GOING CONCERN

The Company has a working capital deficit at March 31, 2010 and has not established a recurring source of revenues sufficient to cover its operating costs. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon its ability to obtain capital through the sales of equity and attaining additional profitable operations. Currently the Company is receiving cash advances from related parties, including stockholders and their affiliates, to cover operating expenses. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

3. NOTE PAYABLE – RELATED PARTY

On July 29, 2009, the Company issued a promissory note to Cumbria Capital, L.P. in exchange for cash proceeds of $100,000. The promissory note bears interest at 5% per annum and matures on July 28, 2010. Cumbria Capital, L.P. is a Texas limited partnership that is owned and controlled by Cyrus Boga, an executive officer, director, and a beneficial holder of a majority of the voting shares of the Company.

4. ADVANCES FROM RELATED PARTY

From time to time, the Company receives cash advances from related parties, including stockholders and their affiliates, to cover operating expenses. The advances do not bear interest and are due upon demand. During the three months ended March 31, 2010, the Company received cash advances aggregating $72,089. As of March 31, 2010, the outstanding balance of advances from related party was $259,655.

5. COMMON STOCK

On February 23, 2010, the Company issued 41,667 common shares valued at $1,250, based on fair market value using quoted market prices on the date of grant, to our former Chief Financial Officer for services rendered

Our two independent directors are paid $2,000 in cash and shares of our common stock with a value equal to $5,000 per quarter. As of March 31, 2010, the Company had accrued $4,333 cash compensation and issued 500,000 common shares valued at $10,000 based on fair market value using quoted market prices on the date of grant.

On March 31, 2010, the Company had accrued $4,000 cash compensation and issued 250,000 common shares valued at $5,000, based on fair market value using quoted market prices on the date of grant, to an Advisory Board member for services rendered

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This report contains forward-looking statements that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual results are likely to differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in the Risk Factors section included in this Report on Form 10-Q.

Plan of Operation

Prior to July 31, 2009, we were a development stage company named “Cancer Detection Corporation” which sought to provide research and development to potential cancer and related pathogen vaccines. This business was discontinued in July 2009, when we reorganized the business as a real estate services company as described herein.

On July 31, 2009, we entered into an agreement to acquire all of the outstanding shares of Tremont Fair Holdings, Inc., a Texas corporation (hereafter, “TF-Texas”), in exchange for eighty million (80,000,000) shares of our restricted common stock (such transaction is hereafter referred to as the “Acquisition”). TF-Texas was organized to capitalize on the real estate opportunities resulting from the dislocation in the credit markets, and by extension, the multifamily housing market, by acquiring, rehabilitating, stabilizing and selling distressed multifamily properties in the southern United States. Prior to the Acquisition, TF-Texas was wholly-owned by Cumbria Capital, L.P., a Texas limited partnership that is owned and controlled by Cyrus Boga.

On July 29, 2009, the Board of Directors and a majority of our shareholders agreed to amend and restate, in its entirety, the Articles of Incorporation. The restated Articles of Incorporation provide, among other things, for an increase in the authorized shares from 110,000,000 to 220,000,000, with 200,000,000 constituted as common stock and 20,000,000 constituted as preferred stock. The shares of preferred stock are considered “blank check” preferred shares, inasmuch as the Board of Directors may designate the rights, preferences, and privileges of such preferred shares and any classes thereof. The restated Articles of Incorporation also changed the name of the Company from Cancer Detection Corporation to Tremont Fair, Inc.

Pursuant to the acquisition of TF-Texas described above, our business plan consisted of identifying, acquiring, rehabilitating and renovating value-added multifamily properties in southern United States, and eventually refinancing and/or selling these properties once they are stabilized and cash flowing. These purchases may be direct acquisitions of the property or via purchase of the first liens on such properties, after which we would foreclose on such properties.

Our President and the new employees added to the Company in September 2009 have successfully pursued this business model in recent years as part of other organizations which

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served as general partner to property-oriented limited partnerships, as well as the management and construction management company to these limited partnerships. In the 12 months previous to the Acquisition, this team facilitated the purchase, rehabilitation, and stabilization of almost 1,000 apartment units. The efforts of our new team have been a result of a proprietary turnaround model, and has benefited from their relationships with lenders, vendors and property brokers.

By consolidating both control of the property (via a general partner stake) and the construction and property management functions within the Company, we believe the Company can offer investors who participate in these projects a stake in all aspects of the value-added chain for distressed properties and a benefit to the Company from its participation in providing services relating thereto. We believe the current economic environment offers exceptional opportunities to continue implementing this business model, principally because there appears to be a large and growing supply of distressed properties available for purchase, and a shrinking number of stabilized properties available for sale.

We believe our timing is advantageous to acquire quality multifamily properties with a reduction in new apartment construction, lending institutions eager to remove real estate assets off their books, interest rates at near historical lows and less competition today for the acquisition of distressed assets. In the long term, we believe our business plan will improve our operating cash flows as multifamily fundamentals strengthen from a reduction in new supply, declining homeownership, population growth and economic growth.

Liquidity and Capital Resources

As of March 31, 2010, our working capital deficit of $476,078 was comprised of total current assets of $34,522 consisting of cash and cash equivalents of $7,777, accounts receivable of $12,693 and prepaid expenses of $14,052 and total current liabilities of $510,600 comprised of accounts payable and accrued liabilities of $150,945, advances from a related party of $259,655 and note payable to a related party of $100,000. We continued to consume working capital in the pursuit of our business plan utilizing proceeds from notes payable and advances from related parties. We anticipate that we will need to obtain additional funds of approximately $500,000 to fund our operations for the next 12 months.

Management does not believe that the Company’s current capital resources will be sufficient to fund its operating activity and other capital resource demands during the next year. Our ability to continue as a going concern is contingent upon our ability to obtain capital through the sale of equity or issuance of debt, joint venture or sale of assets, and ultimately attaining profitable operations. There is no assurance that we will be able to successfully complete any one of these activities.

We are presently seeking additional debt and equity financing to provide sufficient funds for payment of obligations incurred and to fund our ongoing business plan.

We expect to generate revenue pursuant to our new business plan as a real estate services provider and expect to rely on equity and debt financings to fund our capital resources requirements. We will be dependent on additional debt and equity financing to develop our new business.

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Our ability to pay accounts payable and accrued expenses and repay borrowings is dependent upon receipt of new funding from related parties, private placements or debt financing. Cumbria Capital LP, our largest shareholder, has periodically advanced funds to us to meet our working capital needs. Cumbria is under no obligation to continue these advances. During the quarter ended March 31, 2010, the Company received cash advances of $72,089. As of March 31, 2010, the outstanding balance of advances from related party was $259,655 and the note payable to related party was $100,000.

Net cash used in operating activities was $81,834 during the quarter ended March 31, 2010, with a net loss of $160,473, adjustments for depreciation and amortization of $127 along with share-based compensation of $16,250, an increase in accounts payable and accrued expenses of $57,504 and an decrease in prepaid expenses of $4,787 which was offset by an increase in accounts receivable of $29.

Net cash provided by financing activities during the quarter ended March 31, 2010, was $72,089, consisting of cash advances from related party.

Results of Operations – For the Three Months Ended March 31, 2010 Compared to the Three Months Ended March 31, 2009

Until the reorganization of the Company in July 2009, we were considered a development stage company for accounting purposes, since we had not yet received any revenues from operations. Effective September 1, 2009, Tremont Fair Holdings, Inc. acquired two property management agreements from Creekstone Equity Management, a company controlled by Cyrus Boga (the “Management Agreements”). Successor references herein are referring to the consolidated information pertaining to Tremont Fair, Inc. and its wholly owned subsidiary Tremont Fair Holdings, Inc. Predecessor references herein relate to the property management operations of the two agreements previously owned by Creekstone Equity Management.

Revenues

For the three months ended March 31, 2010, total revenues were $44,523, of which property management fees were $37,969 and construction management fees were $6,554. This total is approximately 51% less than the comparable three months ended March 31, 2009, during which total revenues were $90,667, of which property management fees were $24,000 and construction management fees were $66,667. This decrease in revenues is due to construction management fees being higher in 2009 due to increased construction work.

Selling General and Administrative Expenses (“SG&A”)

Our SG&A expenses for the three months ended March 31, 2010 of $203,619 were significantly higher than the $48,145 SG&A expenses reported for the predecessor company for the comparable three months ended March 31, 2009. The $155,474 increase in SG&A expenses is due primarily to increased professional fees resulting from our being a publicly traded, fully listed company.

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Net Income (Loss)

We had a net loss for the three months ended March 31, 2010 of $160,473 compared to a $42,532 profit reported for the predecessor company for the three months ended March 31, 2009. The $203,005 increase in loss arises from the higher SG&A expenses as mentioned above.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of any contingent assets and liabilities. We base our estimates on various assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. On an on-going basis, we evaluate our estimates. Actual results may differ from these estimates if our assumptions do not materialize or conditions affecting those assumptions change.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Revenue Recognition

Revenue from management services is recognized when service is completed.

Stock-Based Compensation

The Company sometimes grants shares of stock for services. These grants are accounted for based on the grant date fair values.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Required.

Item 4T. Controls and Procedures.

(a) We maintain a system of controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities

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Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2010, under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective.

As permitted by applicable SEC rules, this report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

(b) There were no changes in our internal control over financial reporting during the quarter ended March 31, 2010 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on our properties, results of operation, or financial condition. Nor, to the best of our knowledge, are any of our officers or directors involved in any legal proceedings in which we are an adverse party.

Item 1A. Risk Factors

This report, including Management’s Discussion and Analysis of Financial Condition and Results of Operation, contains forward-looking statements that may be materially affected by several risk factors, including those summarized below:

Risks Relating to Our Company

Since we are a new business, investors have no basis to evaluate our ability to operate profitably. We were originally organized in 2002 and have had limited revenues from operations since our inception. As a small real estate services firm, we face all of the risks commonly encountered by other new businesses, including the lack of an established operating history, need for additional capital and personnel, and intense competition. There is no assurance that our business plan will be successful.

The report of our independent accountants on our financial statements for the period from Inception (July 27, 2009) to December 31, 2009 included in our annual report on Form 10-K includes a “going concern” qualification, meaning that there is substantial doubt about our ability to continue in operation. The report cited the following factors in support of our accountant’s conclusion: (i) the operating loss we incurred for the period from inception (July 27, 2009) to December 31, 2009; (ii) our lack of substantial operating revenue; and (iii) our dependence on loans and the sale of equity securities and receipt of capital from outside sources to continue in operation. Our operating results and financial condition during the quarter ended March 31, 2010 has not substantially changed since the report of our independent accountants. From inception (July 27, 2009) to March 31, 2010, we had a cumulative net loss of $55,889. If we are unable to obtain additional financing or eventually produce revenue, we may be forced to sell our assets, curtail or cease operations. In any event, investors in our common stock could lose all or part of their investment.

We are dependent upon receipt of additional working capital to fund our business plan. Our working capital at March 31, 2010 was insufficient to fund our business plan. We will require additional capital to continue our business operations. We will need to obtain additional financing from outside sources within the next 12 months in order to continue to fund our business needs. There is no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to us. If we are unsuccessful in addressing these needs, we may cease our business activities. As a result, investors may lose all or a part of their investment.

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Governmental laws and regulations may add to our costs or limit our activities. Our operations are affected from time to time in varying degrees by governmental laws and regulations. We may be required to make significant capital expenditures to comply with governmental laws and regulations. It is also possible that these laws and regulations may in the future add significantly to our operating costs or may significantly limit our activities.

Competition is intense, and we have limited financial and personnel resources with which to compete. We expect to be at a disadvantage when competing with many firms that have substantially greater financial and management resources and capabilities.

Lack of Diversification. Our limited financial resources limit our ability to diversify our operations. The inability to diversify activities into more than one area will subject us to economic fluctuations within a particular business or industry and therefore increase the risks associated with our operations.

Dependence upon Management. We are heavily dependent upon the skills, talents, and abilities of Cyrus Boga, our current President, and Secretary, to implement our new business plan. The loss of the services of Mr. Boga would have a material adverse effect upon our business and financial condition.

Dependence upon Outside Advisors. To supplement the business experience of our employees, we employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. The selection of any such advisors will be made by us without any input from stockholders. Furthermore, it is anticipated that such persons may be engaged on an “as needed” basis without a continuing fiduciary or other obligation to us or the shareholders. In the event we consider it necessary to hire outside advisors, we may elect to hire persons who are affiliates, if they are able to provide the required services.

While we presently believe that we have adequate internal controls over financial reporting, we will be required to evaluate our internal controls under Section 404 of the Sarbanes-Oxley Act of 2002 annually and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have a material adverse effect on the price of our common stock. Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we have furnished a report by our management on internal controls for the fiscal quarter ended March 31, 2010. Such a report contains, among other matters, our assessment of the effectiveness of our internal controls over financial reporting, including a statement as to whether or not our internal controls are effective. This assessment must include disclosure of any material weakness in our internal controls over financial reporting identified by our management. While we believe our internal controls over financial reporting are effective as of the date of this report, there is no assurance that we can retain that control in the future, as our business expands. In addition, our evaluation of the effectiveness of our internal controls will be subject to audit by our independent registered accountants in the future and there is no assurance that they will agree with our assessment. If we are unable to maintain the effectiveness of our controls, or if our accountants do not agree with our assessment in the future, investors could lose confidence in our financial reports and our stock price may decline.

Because we do not have an audit or compensation committee, shareholders will have to rely on our Board of Directors, a member of which is also an executive officer and as such is

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not “independent” as defined by a national securities exchange, to perform these functions. We do not have an audit or compensation committee. These functions are performed by our Board of Directors as a whole and one of the members of our Board does not meet the definition of “independent” under the rules of any national securities exchange. Since our current Board members include members of management, there is a potential conflict where this individual participates in discussions concerning management compensation and audit issues that may affect management decisions.

Indemnification of Officers and Directors. The Nevada Business Corporation Act provides for the indemnification of directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers employees, or agents, upon such person’s promise to repay the Company therefore if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us.

Director’s Liability Limited. The Nevada Business Corporation Act excludes personal liability of directors for monetary damages for breach of fiduciary duty except in certain specified circumstances. Accordingly, we will have a much more limited right of action against directors than otherwise would be the case. This provision does not affect the liability of any directors under federal of applicable state securities laws.

Risks Related to Our Common Stock

A small number of existing shareholders own a significant amount of our common stock, which could limit your ability to influence the outcome of any shareholder vote. Our executive officers and directors beneficially own approximately 75% of our common stock as of April 30, 2010. Under our Articles of Incorporation, the vote of a majority of the shares outstanding is generally required to approve most shareholder action. As a result, these individuals will be able to control the outcome of shareholder votes for the foreseeable future, including votes concerning the election of directors, amendments to our Articles of Incorporation or proposed mergers or other significant corporate transactions. Shareholders should be aware that they may have limited ability to influence the outcome of any vote in the future.

Since there is presently a limited trading market for our common stock, purchasers of our common stock may have difficulty selling their shares, should they desire to do so. Due to a number of factors, including the lack of listing of our common stock on a national securities exchange, the trading volume in our common stock is limited. As a result, the sale of a significant amount of common stock by the selling shareholders may depress the price of our common stock and you may lose all or a portion of your investment.

Since our common stock is not presently listed on a national securities exchange, trading in our shares will likely be subject to rules governing “penny stocks,” which will impair trading activity in our shares. Our common stock may be subject to rules adopted by the SEC regulating broker-dealer practices in connection with transactions in penny stocks. Those disclosure rules applicable to penny stocks require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized disclosure document

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required by the SEC. These rules also require a cooling off period before the transaction can be finalized. These requirements may have the effect of reducing the level of trading activity in any secondary market for our common stock. Many brokers may be unwilling to engage in transactions in our common stock because of the added disclosure requirements, thereby making it more difficult for stockholders to dispose of their shares.

Issuances of our stock in the future could dilute existing shareholders and adversely affect the market price of our common stock. We have the authority to issue up to 200,000,000 shares of common stock, 20,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of our common stock without stockholder approval. Because our common stock is not currently listed on a national securities exchange, we are not required to solicit shareholder approval prior to issuing large blocks of our stock. These future issuances could be at values substantially below the price paid for our common stock by our current shareholders. In addition, we could issue large blocks of our common stock to fend off unwanted tender offers or hostile takeovers without further stockholder approval. Because there is presently no trading market for our common stock, the issuance of our stock may have a disproportionately large impact on its price compared to larger companies.

We have never paid dividends on our common stock and we do not anticipate paying any in the foreseeable future. We have not paid dividends on our common stock to date, and we may not be in a position to pay dividends for the foreseeable future. Our ability to pay dividends will depend on our ability to successfully develop our business plan and generate revenue from operations. Further, our initial earnings, if any, will likely be retained to finance our operations. Any future dividends will depend upon our earnings, our then-existing financial requirements and other factors, and will be at the discretion of our Board of Directors.

Item 2. Unregistered Sales of Equity Securities

Our two independent directors are paid $2,000 in cash and shares of our common stock with a value equal to $5,000 per quarter. As of March 31, 2010, the Company had accrued $4,333 cash compensation and subsequently issued 500,000 common shares valued at $10,000 based on fair market value using quoted market prices on the date of grant.

On March 31, 2010, the Company had accrued $4,000 cash compensation and subsequently issued 250,000 common shares valued at $5,000, based on fair market value using quoted market prices on the date of grant, to an Advisory Board member for services rendered

On January 15, 2010, the Company issued 41,667 common shares valued at $1,250 based on fair market value using quoted market prices on the date of grant, to our former Chief Financial Officer for services rendered

Exemption From Registration Claimed

All of the sales by the Company of its unregistered securities were made by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”). All of the individuals and/or entities listed above that purchased the unregistered securities were all known to the Company and its management, through pre-existing business relationships. All purchasers were provided access to all material information, which they requested, and all

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information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

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.

The following exhibits are filed with or incorporated by referenced in this report:

Item No.	Description
3.1	Amended and Restated Articles of Incorporation (incorporated by reference from our report on form 8-K filed on August 4, 2009).
3.2	Amended and Restated Bylaws (incorporated by reference from our report on form 8-K filed on August 4, 2009).
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Cyrus Boga.
32*	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Cyrus Boga.

* filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TREMONT FAIR, INC.
Date: May 12, 2010	By: /s/ Cyrus Boga Name: Cyrus Boga Title: President and Chief Executive Officer

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