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 September 30, 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 October 31, 2010, there were 101,560,186 outstanding shares of the registrant's common stock, $0.001 par value per share.


Table of Contents














TABLE OF CONTENTS





Page No.PART I – FINANCIAL INFORMATIONItem 1.  Financial Statements

1Item 2.  Management's Discussion and Analysis

9Item 3.Quantitative and Qualitative Disclosures About Market Risk

14Item 4T.  Controls and Procedures

14PART II– OTHER INFORMATIONItem 1.  Legal Proceedings

13Item 1A.  Risk Factors

13Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

18Item 3.  Defaults Upon Senior Securities

18Item 4.  Submission of Matters to a Vote of Security Holders

18Item 5.  Other Information

18Item 6.  Exhibits

19











Table of Contents


PART I – FINANCIAL INFORMATION


Item 1.  Financial Statements.


TREMONT FAIR, INC.CONSOLIDATED BALANCE SHEETS(unaudited)September 30,


December 31,2010


2009ASSETSCURRENT ASSETSCash and cash equivalents

$
14,699


$
17,522Accounts receivable-related parties


-



12,664Prepaid expenses


4,307



18,839Total current assets


19,006



49,025Property and equipment, net of accumulated depreciation of $474and $93, respectively


2,107



2,488Other assets


2,565



2,565TOTAL ASSETS

$
23,678


$
54,078LIABILITIES AND SHAREHOLDERS’ DEFICITCURRENT LIABILITIESAccounts payable and accrued liabilities

$
26,167


$
78,442Advances from third party


293,000Advances from related party


51,000



187,565Notes payable


100,000



-Note payable-related party


-



100,000TOTAL CURRENT LIABILITIES


470,167



366,007SHAREHOLDERS’ DEFICITPreferred 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,101,560,186 and 97,402,665 shares issued and outstanding, respectively


101,560



97,402Paid-in capital deficit


(291,823
)


(513,915
)Retained earnings (accumulated deficit)


(256,226
)


104,584Total shareholders’ deficit


(446,489
)


(311,929
)TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT

$
23,678


$
54,078See notes to consolidated financial statements.





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


Successor


PredecessorFor the Three


For Inception


For the PeriodMonths Ended


(July 27, 2009) to


July 1, 2009 toSeptember 30, 2010


September 30, 2009


August 31, 2009REVENUE

$
38,325


$
10,235


$
22,801OPERATING EXPENSESSelling, general and administrative expense


111,458



49,276



13,450Depreciation expense


127



1,493



-Total operating expenses


111,585



50,769



13,450Net operating profit (loss)


(73,260
)


(40,534
)


9,351OTHER INCOME (EXPENSE)Gain on settlement of debt


-



370,000



-Interest expense


(1,250
)


(916
)


-Net income (loss)

$
(74,510
)

$
328,550


$
9,351Basic and diluted net income (loss) per share

$
(0.00
)

$
0.00


$
0.00Weighted average common shares outstanding-basic and diluted


101,060,185



95,829,257



80,000,000














See notes to consolidated financial statements.


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


Successor


PredecessorFor the Nine


For Inception


For the PeriodMonths Ended


(July 27, 2009) to


January 1, 2009 toSeptember 30, 2010


September 30, 2009


August 31, 2009REVENUE

$
120,221


$
10,235


$
237,136OPERATING EXPENSESSelling, general and administrative expense


476,900



49,276



45,397Depreciation expense


381



1,493



-Total operating expenses


477,281



50,769



45,397Net operating profit (loss)


(357,060
)


(40,534
)


191,739OTHER INCOME (EXPENSE)Gain on settlement of debt


-



370,000



-Interest expense


(3,750
)


(916
)


-Net income (loss)

$
(360,810
)

$
328,550


$
191,739Basic and diluted net income (loss) per share

$
(0.00
)

$
0.00


$
0.00Weighted average common shares outstanding-basic and diluted


99,292,922



95,829,257



80,000,000











See notes to consolidated financial statements.


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TREMONT FAIR, INC.CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT(unaudited)RetainedPaid-in


EarningsPreferred Stock


Common Stock


Capital


(AccumulatedShares


Amount


Shares


Amount


Deficit


Deficit)


TotalBalances, December 31, 2009


-


$
-



97,402,665


$
97,402


$
(513,915
)

$
104,584


$
(311,929
)Stock issued for:Cash


-



-



2,500,000



2,500



47,500



-



50,000Services


-



-



1,657,521



1,658



44,592



-



46,250Contributed capital


-



-



-



-



130,000



-



130,000Net loss


-



-



-



-



-



(360,810
)


(360,810
)Balances, September 30, 2010


-


$
-



101,560,186


$
101,560


$
(291,823
)

$
(256,226
)

$
(446,489
)








See notes to consolidated financial statements.





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


Successor


PredecessorFor the Nine


For Inception


For the PeriodMonths Ended


(July 27, 2009)


January 1, 2009September 30,


to September


to2010



30, 2009


August 31, 2009Cash flows from operating activities:Net income (loss)

$
(360,810
)

$
328,550


$
191,739Adjustments to reconcile net income (loss) to netcash from operating activities:Depreciation and amortization


381



1,493



-Stock-based compensation


46,250



3,333



-Gain on settlement of debt


-



(370,000
)


-Changes in operating assets and liabilitiesAccounts receivable-related parties


12,664







-Prepaid expenses


14,532



559



-Accounts payable and accrued liabilities


77,725



(68,482
)


-Accounts payable – related party






(15,399
)Net cash provided by (used in ) operating activities


(209,258
)


(119,947
)


191,739Cash flows from investing activities:Net cash received in merger


-



361



-Purchase of property, plant & equipment


-



(50,345
)


-Payment of security deposit


-



(2,565
)


-Net cash provided by (used in) investing activities


-



(52,549
)Cash flows from financing activities:Proceeds from issuance of common stock


50,000



-



-Proceeds from related party advances


156,435



112,714



-Proceeds from issuance of debt to related party


-



100,000



-Repayments of debt






(15,000
)Payments to Creekstone Equity Management


-



-



(191,739
)Net cash provided by (used in) financing activities


206,435



197,714



(191,739
)Net decrease in cash and cash equivalents


(2,823
)


25,218



-Cash and cash equivalents, at beginning of period


17,522



-



-Cash and cash equivalents, at end of period

$
14,699


$
25,218


$
-Supplemental cash flow information:Cash paid for interest

$
3,750


$
916


$
-Income taxes paid in cash

$
-


$
-


$
-Non-cash investing and financing activities:Forgiveness of debt - contributed capital

$
130,000


$
-


$
-Transfer of note payable and advances to third party


393,000



-



-Common stock issued for settlement of debt






50,000See 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.


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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 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 September 30, 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


7
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considered in the computation.  As of September 30, 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.





2.  GOING CONCERN





The Company has a working capital deficit at September 30, 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. No assurance can be made that these related parties will continue to fund the Company’s operating expenses or provide additional capital.  In the event such funds are ot available, the Company would be required to seek outside financing. 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. (“Cumbria”) in exchange for cash proceeds of $100,000. The promissory note bears interest at 5% per annum and originally matured on July 28, 2010. The original note was extended to mature on July 28, 2011. Cumbria 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.  This note was sold by Cumbria to a third party in the third quarter of 2010.





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 nine months ended September 30, 2010, the Company received cash advances aggregating $156,435.  Advances of $293,000 were sold by a related party to an unaffiliated party in July 2010, with the outstanding balance of advances from related parties being $51,000 as of September 30, 2010.





5.  EQUITY





On August 19, 2009, as part of the Company’s settlement with its former President, David Kittrell, the Company issued 500,000 shares of restricted common stock at fair value which totaled $50,000, or $0.10 per common share, in satisfaction of accrued but unpaid employment compensation due to David Kittrell of $420,000 and recorded a gain of $370,000 on settlement of debt.





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 each paid $2,000 in cash and shares of our common stock with a value equal to $5,000 per quarter.  On March 31, 2010, the Company issued 500,000 common


8
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shares valued at $10,000 based on fair market value using quoted market prices on the date of grant, to our two independent directors for services rendered.  On June 30, 2010, the Company issued 243,902 common shares valued at $10,000 based on fair market value using quoted market prices on the date of grant, to our two independent directors for services rendered. On September 30, 2010, the Company issued 333,334 common shares valued at $10,000 based on fair market value using quoted market prices on the date of grant, to our two independent directors for services rendered.





On March 31, 2010, the Company 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 June 30, 2010, the Company issued 121,951 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 September 30, 2010, the Company issued 166,167 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 May 19, 2010, the Company issued 2,500,000 common shares to an outside investor for $50,000 in cash.





As of September 30, 2010, the Company’s President and CEO has elected to forgive his accrued and unpaid salary in the amount of $130,000, which has been recorded as contributed capital.




6.  SUBSEQUENT EVENTS




On October 31, 2010, one of the properties that the Company manages was sold.  Consequently, our management contract with the previous owner ended.  However, we continue to manage the property on similar terms for the new owner, under a new one-year contract, with automatic annual extensions thereafter unless canceled in advance by either party.





As a result of the sale, the Company received an incentive fee of $63,500 per the terms of its management agreement.





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.


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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 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 September 30, 2010, our working capital deficit of $451,161 was comprised of total current assets of $19,006 consisting of cash and cash equivalents of $14,699 and prepaid expenses of $4,307 and total current liabilities of $470,167 comprised of accounts payable and


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accrued liabilities of $26,167, advances from a third party of $293,000, advances from a related party of $51,000, and note payable to third 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 and unrelated parties.  We anticipate that we will need to obtain additional funds of approximately $250,000 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 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.





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 three months ended September 30, 2010, the Company received cash advances of $51,000. Cumbria sold all of its debts through June 30, 2010 to a third party on July 1, 2010.  As of September 30, 2010, the outstanding balance of advances and loans from related and unrelated parties was $444,000.





Net cash used in operating activities was $209,258 for the nine months ended September 30, 2010, with net loss of $360,810, adjustments for depreciation and amortization of $381 along with stock-based compensation of $46,250 and  a decrease in accounts receivable of $12,664, a non-cash compensation expense of $90,000, an decrease in prepaid expenses of $14,532 and a decrease in accounts payable and accrued expenses of $77,725.





Net cash provided by financing activities for the nine months ended September 30, 2010, was $206,435.  We received cash advances of $51,000 from a related party in the third quarter.





Results of Operations





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.





Three Months Ended September 30, 2010 compared to Three Months Ended September 30, 2009


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For comparison purposes the predecessor and successor were combined for the three months ended September 30, 2009..





Successor


PredecessorFor Inception


For the Period


Total for the(July 27, 2009) to


July 1, 2009 to


Three Months EndedSeptember 30, 2009


August 31, 2009


September 30, 2009REVENUE

$
10,235


$
22,801


$
33,036OPERATING EXPENSESSelling, general and administrative expense


49,276



13,450



62,726Depreciation expense


1,493



-



1,493Total operating expenses


50,769



13,450



64,219Net operating profit (loss)


(40,534
)


9,351



(31,183
)OTHER INCOME (EXPENSE)Gain on settlement of debt


370,000



-



370,000Interest expense


(916
)


-



(916
)Net income (loss)

$
328,550


$
9,351


$
337,901





Revenues.  For the three months ended September 30, 2010, total revenues were $38,325, an increase of 16% from the comparable three months ended September 30, 2009, during which total revenues were $33,036.   This was due primarily to a change in fee structure effective September 1, 2009.





Selling General and Administrative Expenses (“SG&A”).  Our SG&A expenses for the three months ended September 30, 2010 of $111,458 were significantly higher than the $62,726 of SG&A expenses reported for the comparable three months ended September 30, 2009.  The increase in SG&A expenses is due primarily to the cost of being a public company in 2010, which led to increased costs for legal and accounting services, investor relations expense, insurance and non-cash share-based compensation.  The company also had office rent expense in 2010, while office rent was paid by an affiliate company until September 1, 2009.





Net Income (Loss).  We had a net loss for the three months ended September 30, 2010 of $74,510 compared to a $337,901 profit reported for the three months ended September 30, 2009. The prior year period was affected by a one-time gain of $370,000 from the extinguishment of debt, while the current-year period had higher SG&A expenses as mentioned above.





Nine Months Ended September 30, 2010 compared to Nine Months Ended September 30, 2009





For comparison purposes the predecessor and successor were combined for the nine months ended September 30, 2009.


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Successor


PredecessorFor Inception


For the Period


Total for the(July 27, 2009) to


January 1, 2009 to


Nine Months EndedSeptember 30, 2009


August 31, 2009


September 30, 2009REVENUE

$
10,235


$
237,136


$
247,371OPERATING EXPENSESSelling, general and administrative expense


49,276



45,397



94,673Depreciation expense


1,493



-



1,493Total operating expenses


50,769



45,397



96,166Net operating profit (loss)


(40,534
)


191,739



151,205OTHER INCOME (EXPENSE)Gain on settlement of debt


370,000



-



370,000Interest expense


(916
)


-



(916
)Net income (loss)

$
328,550


$
191,739


$
520,289





Revenues.  For the nine months ended September 30, 2010, total revenues were $120,221, of which property management fees were $113,667 and other fees were $6,554.  This total is approximately 51% less than the comparable nine months ended September 30, 2009, during which total revenues were $247,371.  Increased property management revenues were more than offset by a decline in construction management revenues from the prior-year period, as all property rehab had essentially ended in 2009.





Selling General and Administrative Expenses (“SG&A”).  Our SG&A expenses for the nine months ended September 30, 2010 of $476,900 were significantly higher than the $94,673 in SG&A expenses reported for the comparable nine months ended September 30, 2009.  This increase in SG&A expenses is due primarily to the cost of being a public company in 2010, which led to increased legal costs for legal and accounting services, investor relations expense, insurance and non-cash share-based compensation.  The company also had office rent expense in 2010, while office rent was paid by an affiliate company until August 31, 2009.





Net Income (Loss).  We had a net loss for the nine months ended September 30, 2010 of $360,810 compared to a $520,289 profit reported for the predecessor company for the nine months ended September 30, 2009. The increase in loss arises from the higher SG&A expenses and gain in 2009 from the extinguishment of debt, 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


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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 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 September 30, 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 September 30, 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 nine months ended September 30, 2010 has not substantially changed since the report of our independent accountants.  From inception (July 27, 2009) to September 30, 2010, we had a cumulative net loss of $256,225.  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 September 30, 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.




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.






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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 September 30, 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. If we are unable to maintain the effectiveness of our controls 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 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











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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 September 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 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








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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 and Use of Proceeds





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 September 30, 2010, the Company had accrued $8,333 cash compensation and issued 333,334 common shares valued at $10,000 based on fair market value using quoted market prices on the date of grant.





During the quarter ended September 30, 2010, the Company accrued $2,000 cash compensation and issued 166,667 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.




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 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.





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Item 6. Exhibits.





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





Item No.
Description3.1
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*
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: November 19, 2010
By: /s/ Cyrus Boga

Name: Cyrus Boga

Title: President and Chief Executive Officer





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