UNITED STATES


SECURITIES AND EXCHANGE COMMISSION





Washington, D.C. 20549





FORM 10-K





[X]

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the year ended  December 31, 2010[   ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from              to


Commission file number: 333-107179 and 000-51210





TREMONT FAIR, INC.


(Exact name of registrant as specified in its charter)





Nevada

98-0380519(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)10497 Town and Country Way, Suite 214, Houston, TX

77024(Address of principal executive offices)

(Zip Code)





(832) 519-9282


(Registrant’s telephone number, including area code)





Securities registered pursuant to Section 12(b) of the Act:





None

N/ATitle of each class

Name of each exchange on which registered





Securities registered pursuant to Section 12(b) of the Act: None





Securities registered pursuant to Section 12(g) of the Act: None








Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o  No ý





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o  No ý





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





Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in








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definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o





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  o                                                      Accelerated filer  o





Non-accelerated filer  o                                                        Smaller reporting company ý





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o  Yes    ý  No





Based on the closing price of our common stock as listed on the Electronic Bulletin Board, the aggregate market value of the common stock of Tremont Fair, Inc. held by non-affiliates as of June 30, 2010 was $1,210,467.





As of April 15, 2011 there were 115,413,520 shares of common stock outstanding.





DOCUMENTS INCORPORATED BY REFERENCE:  None.











Table of Contents


TABLE OF CONTENTS




PART I



4ITEM 1.

BUSINESS

4ITEM 1A.

RISK FACTORS

7ITEM 1B.

UNRESOLVED STAFF COMMENTS

7ITEM 2.

PROPERTIES

7ITEM 3.

LEGAL PROCEEDINGS

7ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

7PART II



9ITEM 5

MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES

9ITEM 6.

SELECTED FINANCIAL DATA

11ITEM 7.

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

11ITEM 7B.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

16ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

17ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

30ITEM 9A(T)

CONTROLS AND PROCEDURES

30ITEM 9B.

OTHER INFORMATION

30PART III



31ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

32ITEM 11.

EXECUTIVE AND DIRECTOR COMPENSATION

32ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

35TEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

36ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

37PART IV



37ITEM 15.

EXHIBITS

37SIGNATURES



38





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS




Please see the note under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation,” for a description of special factors potentially affecting forward-looking statements included in this report.




Table of Contents







PART I






ITEM 1.    BUSINESS.




Company History




The Company was incorporated in the State of Nevada on September 5, 2002.




Prior to July, 2009, the Company had operated under the name of “Cancer Detection Corporation” and had been primarily engaged in the development of technology acquired under license for detection of cancer tumors.  The Company had not generated any revenues under this business model and, in July 2009, the Company underwent a reorganization to change its business model and management as further described herein.




On July 31, 2009, the Company 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 restricted common stock of the Company (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, predominantly in Texas and Arizona.  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, an executive officer and director of the Company.


On July 29, 2009, the Board of Directors and a majority of the shareholders of the Company agreed to amend and restate, in its entirety, the Articles of Incorporation of the Company.  The restated Articles of Incorporation provide, 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 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.




Core Business




Generally.  We are a real estate investment services and management company focusing on distressed multifamily properties in select U.S. markets.  We manage limited partnerships that invest in residential multifamily real property in the southern United States and we receive management fees and carried interests from the operations, sale or refinancing of these properties.  We also manage the tenancy, redevelopment, and repairs of these properties through the Company or an affiliate from which we also receive fees and other compensation.




Structure.  We attract private investors in limited partnerships that we form and manage.  A wholly-owned subsidiary of the Company serves as the general partner and manager of these partnerships.  Our limited partnerships are structured either as single-asset entities that hold one multifamily property that we have prescreened and on which we have performed our due diligence, or as blind pools that do not have identified property interests and are established




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instead to take advantage of opportunities that are presented from time to time that usually have a narrow time availability on the market but also possess excellent value and appreciation potential.




Revenue Model.  We have a multifaceted revenue model which derives cash flows from a variety of activities.  Not all of the following income streams apply to each property or investment structure.




·
Share of Operating Profits.  We typically receive approximately 20% of the operating profits from those properties in limited partnerships where we serve as the general partner





·
Capital Gains Carried Interest.  Following a sale or refinancing, we receive approximately 20% of the realized increase in value of the properties we manage.





·
Partnership Management Fees.  We charge 1% to 2% per year of the net asset value, in each limited partnership we manage, paid on a quarterly basis.





·
Property Management Fees.  To the extent that we or an affiliated company manage the tenancy of a property, we charge competitive property management rates for such services.





·
Construction Management Fees.  In the case of renovations, remodeling, or other capital improvements and repairs to our managed properties that are handled by the Company, we or an affiliate charges each such project a construction management fee which is generally equivalent to 10% of the overall construction bid.





·
Condominium Owners Association Management Fees.  From time to time, we may serve as the manager of a condominium association for a property we have acquired through one of our limited partnerships.  The fee for management of the condo owners’ association is in line with industry norms for the location and class of property.




Market




Credit and Economic Crisis.  Certain macroeconomic factors and developments in credit markets have combined to have a significant negative effect upon residential real estate values, including in the southern United States where we operate.  Many real estate projects financed in recent years at aggressive valuations and with relatively easy credit are unable to secure refinancing without significant equity infusions which, if not a compulsory contribution from the project’s equity holders, often means a substantial devaluation if any such equity is contributed, if indeed at all.  Moreover, of the decreasing number of institutions that finance multifamily housing in the U.S., tighter underwriting and lending standards have shut many retail purchasers out of the market, thus driving down demand further.  The result has been increased foreclosure on existing properties and considerable writedowns to enable quick liquidations.




Management Failures.  Until the economic and credit contraction described above, a common phenomenon witnessed in recent years was the increased purchase of properties by out-of-state or financial buyers who were unfamiliar with local markets, particularly in respect of




5
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“Class B” or “Class C” properties.  This has led to a misalignment of the financial interests of the




companies managing such properties with its owners and, combined with the downturn in real estate values generally, has culminated in a growing number of apartment and partially finished and/or occupied condominium foreclosures.




Opportunity. According to a December 2009 report in the National Real Estate Investor, the inventory of identified distressed multifamily properties nationwide stands at over $28 billion out of a total of $189 billion in overall distressed commercial real estate, with a large number of distressed properties in Texas, Arizona and Florida. In addition, there is well over $1 trillion in commercial real estate that must be refinanced over the next 24 months, of which a significant portion is multifamily properties.




We believe that there are a substantial number of distressed properties that are unreported and therefore the actual number may be considerably higher than in the report.  Nevertheless, we consider this data and the circumstances described above as evidence of a unique opportunity in the next two years to purchase and manage quality multifamily real estate assets considerably below replacement costs and at acquisition prices that may not be reflective of even a moderately healthy real estate market.  Together with our management, selection, operational, rehabilitative and turnaround expertise in the multifamily real estate sector, we believe the Company is well positioned to capitalize on this tremendous opportunity.




Strategy




We typically look to acquire (through our limited partnerships), rehab and manage two types of distressed multifamily properties.




Financially Distressed Properties.  These are generally newer properties that usually have little to no deferred maintenance.  These properties are in financial distress because of excessive leverage or the inability of the owners to finance an existing expiring mortgage loan.  In addition, the properties may be underperforming due to mismanagement or insufficient capitalization of its owners.  We require that such properties be within areas of stable or growing renter demand, which usually means close proximity to large fixed asset employers or institutions.




Physically Distressed Properties.  We seek older as well as newer properties that are physically distressed because of our expertise in rehabilitating and renovating a variety of property types, and the concomitant fee income and appreciation that can result from our involvement.  As with financially distressed properties, we look for locations within stable or growing renter demand areas.  Importantly, we endeavor to reposition the renovated property as part of a good or improving submarket.




Competition




The real estate industry is highly competitive.  Our competitors and potential competitors include major real estate companies and independent developers and operators of varying sizes.  Most of our competitors have greater resources than we do and therefore have greater leverage




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with respect to acquiring and developing prospects.  We believe a high degree of competition in this industry will continue for the foreseeable future.




Employees




As of December 31, 2010, we had 27 employees.  Although national unemployment rates remain high relative to historical averages, there exists a significant amount of competition for skilled personnel in the real estate services industry, and in the Houston metropolitan area in particular.  Nevertheless, we expect to be able to attract and retain such additional employees as are necessary, commensurate with the anticipated future expansion of our business.  Further, we expect to continue to use consultants, contract labor, attorneys and accountants as necessary.






ITEM 1A.  RISK FACTORS.




Since we are a smaller reporting company, we are not required to supply the information required by this Item 1A.






ITEM 1B.UNRESOLVED STAFF COMMENTS.




None.







ITEM 2.   PROPERTIES.




Office Facilities





On August 12, 2009, Poseidon Partners, LLC, a Texas limited liability company controlled by Cyrus Boga, an executive officer, director, and the beneficial holder of a majority of the Company’s shares, assigned its office lease to the Company.  The lease provides for the use of 2,372 square feet of office space located at 10497 Town & Country Way, Suite 214, Houston Texas.  The monthly lease rate is approximately $2,454,  until the lease expires on July 31, 2011. We do not own any real property.







ITEM 3.   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 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.




Reverse Split





On September 12, 2008, we filed a definitive Information Statement on Schedule 14C where we informed our shareholders that a majority of our shareholders had approved two


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resolutions by written consent in lieu of a shareholder meeting.  The shareholders approved a 1 for 20 reverse split of the Company’s common stock.





Changes to Charter and Bylaws





On August 3, 2009, we filed a notice to non-consenting stockholders that holders of a majority of the outstanding shares had approved a restatement of the Company’s Articles of Incorporation and its Bylaws.  The amended and restated Articles of Incorporation provided for the following changes:





Name Change.  We changed the name of the Company from Cancer Detection Corporation to Tremont Fair, Inc.





Authorized Shares.  We increased the number of authorized shares of capital stock of the Company from 110,000,000 shares to 220,000,000 shares.





Common and Preferred Stock.  Of the Company’s authorized shares, 200,000,000 are characterized as common stock, with the same rights, preferences, and privileges as are now held by the Company’s common stockholders, and 20,000,000 are characterized as preferred stock, with such rights, preferences, and privileges (including but not limited to seniority to other classes of capital stock, dividend and distribution rights) as may be subsequently determined by the Company’s Board of Directors.





Appointment of Directors.  The number of members of the Board of Directors may be increased by a majority vote of the directors then in office, and the open positions so created by the increase may be filled by a majority vote of the incumbent directors.  Previously, the Company’s shareholders were required to consent to the appointment of directors following an expansion of the Board of Directors.





Changes to Bylaws.  The Board of Directors is expressly authorized to amend or repeal the Bylaws of the Company.  Previously, the Company’s shareholders were required to approve any such changes.


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PART II






ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES.




Market Information




Our common stock trades on the OTC:BB under the symbol “TMTF.OB”  The range of high and low  quotations for the common stock by fiscal quarter within the last two fiscal years, as reported by the National Quotation Bureau Incorporated, was as follows:





High


LowYear ended December 31, 2010First quarter

$
0.06


$
0.01Second quarter

$
0.10


$
0.02Third quarter

$
0.04


$
0.03Fourth quarter

$
0.05


$
0.02Year ended December 31, 2009First quarter

$
0.05


$
0.03Second quarter

$
0.25


$
0.05Third quarter

$
0.14


$
0.06Fourth quarter

$
0.16


$
0.06




The above quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.




Number of Holders




As of March 14, 2011, there were approximately 125 record holders of our common stock, not counting shares held in “street name” in brokerage accounts which is unknown. As of March 14, 2011, there were 115,413,520 shares of common stock outstanding on record with the stock transfer agent.




Transfer Agent




We have appointed Holladay Stock Transfer, Inc. (HST) as the transfer agent for our common stock.  The principal office of HST is located at 2939 North 67th Place, Suite C, Scottsdale, AZ  85251 and its telephone number is (480) 481-3940.




Sales of Unregistered Securities




Our independent directors and our former advisory board member were each paid for each quarter of service in shares of our common stock with a value equal to $5,000 per quarter.  Since 2009, we have issued 2,202,891 common shares to our independent directors and our former advisory board member.





Our independent directors and our former advisory board member are also paid a cash payment for each quarter of service.  For the year ended December 31, 2010 and continuing into


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January 2011, we had collectively accrued $26,333 in cash for these obligations, which was subsequently converted into an aggregate of 1,253,334 shares of our restricted common stock that was issued to these persons on February 8, 2011.





On March 2, 2011, we converted certain notes issued by the Company into an aggregate of 10,000,000 shares of our common stock.





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.




Penny Stock Rules




Due to the price of our common stock, as well as the fact that we are not listed on a national securities exchange, our stock is characterized as “penny stocks” under applicable securities regulations.  Our stock will therefore be subject to rules adopted by the SEC regulating broker-dealer practices in connection with transactions in penny stocks.  The broker or dealer proposing to effect a transaction in a penny stock must furnish his customer a document containing information prescribed by the SEC and obtain from the customer an executed acknowledgment of receipt of that document.  The broker or dealer must also provide the customer with pricing information regarding the security prior to the transaction and with the written confirmation of the transaction.  The broker or dealer must also disclose the aggregate amount of any compensation received or receivable by him in connection with such transaction prior to consummating the transaction and with the written confirmation of the trade.  The broker or dealer must also send an account statement to each customer for which he has executed a transaction in a penny stock each month in which such security is held for the customer's account. The existence of these rules may have an effect on the price of our stock, and the willingness of certain brokers to effect transactions in our stock.




Dividend Policy





We have never declared or paid dividends on our common stock. Payment of future dividends, if any, will be at the discretion of our Board of Directors after taking into account various factors, including the terms of any credit arrangements, our financial condition, operating results, current and anticipated cash needs and plans for expansion. At the present time, we are not party to any agreement that would limit our ability to pay dividends.





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ITEM 6. SELECTED FINANCIAL DATA.





Not required.








ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.








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 Annual Report on Form 10-K.





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.





Other Matters





On September 10, 2008, the Board of Directors of the Company approved a reverse stock split of the common stock in the ratio of 1 for 20 and the name change from Xpention Genetics, Inc. to Cancer Detection Corporation.  The resolutions became effective September 17, 2008, when the State of Nevada issued a Certificate of Amendment to the Company’s Articles of Incorporation.  Stockholders holding a majority of outstanding shares approved the reverse split and the name change amendment on July 25, 2008, by written consent in lieu of a meeting of stockholders.  As a result of the Company’s name change, its trading symbol on the Over-the-Counter Bulletin Board was changed to “CCDC”.





During 2008, the Company was informed that the staff of the SEC intended to recommend that a civil injunctive action be commenced against the Company for alleged violations of the Securities Act of 1933.  The alleged violations occurred in 2005 in connection with proceeds from the sale of stock.  On January 30, 2009, the Company submitted an Offer of Settlement without admitting or denying the SEC findings.  On March 9, 2009, the SEC accepted the Offer of Settlement and imposed an order under which the Company agreed to cease and desist from committing or causing any violations and any future violations of Sections 5(a) and 5(c) of the Securities Act.





Liquidity and Capital Resources





As of December 31, 2010, our working capital deficit of $402,885 was comprised of total current assets of $55,457 consisting of cash and cash equivalents of $39,196, accounts receivable from a related party of $13,806 and prepaid expenses of $2,455 and total current liabilities of $444,536 comprised of accounts payable and accrued liabilities of $344,537 and a note payable to


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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.





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 of these activities.





The independent registered public accounting firm’s report on our financial statements as of December 31, 2010, includes a “going concern” explanatory paragraph that describes substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to the factors prompting the explanatory paragraph are discussed below and also in Note 3 to the financial statements.





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.





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 period ended December 31, 2010, the Company received net cash advances aggregating $105,435. During the period ended December 31, 2010, Cumbria transferred both the advances and the note payable to a third party. As of December 31, 2010, the outstanding balance of advances was $293,000 and the note payable was $100,000.





Net cash used in operating activities was $158,761 during the year ended December 31, 2010, with net loss of $362,356, adjustments for depreciation and amortization of $508 along with share-based compensation of $59,750, an increase in accounts payable and accrued expenses of $128,095, a decrease in accounts receivable of $12,664, and an decrease in prepaid expenses of $16,384, offset by an increase in accounts receivable from related parties of $13,806.





During 2010, net cash used in investing activities was $0.





Net cash provided by financing activities during the year ended December 31, 2010, was $180,435, of which $75,000 was from the sale of common stock to an unrelated entity and $105,435 was from related party advances.





Results of Operations





Year Ended December 31, 2010 Compared to the Twelve Months Ended December 31, 2009





Until the reorganization of the Company in July 2009, we were considered a development


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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. For comparison purposes the predecessor and successor were combined for the twelve months ended December 31, 2009.





Successor


PredecessorFor Inception (July 27, 2009) to December 31, 2009


For the Period January 1, 2009 to August 31, 2009


Total For the Twelve Months Ended December 31, 2009REVENUE

$
47,638


$
181,521


$
229,159OPERATING EXPENSESSeSelling, general and administrative expenses


310,795



125,701



436,496Depreciation expense


93



-



93Total operating expenses


310,888



125,701



436,589Net operating profit (loss)


(263,250
)


55,820



(207,430
)OTHER INCOME (EXPENSE)Interest expense


(2,166
)


-



(2,166
)Gain on settlement of debt


370,000



-



370,000Net income

$
104,584


$
55,820


$
160,404





Revenues.  Revenue for year ended December 31, 2010 was $234,038, all of which was attributed to property management and construction management fees.  For the twelve months ended December 31, 2009, total revenues were $229,159, of which property management fees were $111,639 and construction management fees were $117,520.   This increase in revenues is due to 2009 only having four months worth of revenues.





Selling General and Administrative Expenses (“SG&A”).  Total selling, general and administrative expense for the year ended December 31, 2010 of $589,636 consisted primarily of payroll related expense of $175,474,  professional and consulting fees of $257,729, share based compensation of $31,250 and rent expense of $44,084.  Our SG&A expenses for the twelve months ended December 31, 2009 was $436,496.  The $153,140 increase in SG&A expenses is due primarily to increased personnel costs, and professional fees resulting from our being a publicly traded, fully listed company since mid 2009.





Other Income (Expense).  Other income and expense for year ended December 31, 2010 consisted primarily of interest expense of $6,250 related to the promissory note.  Interest expense was $2,166 for the twelve months ended December 31, 2009 and we recorded a gain on settlement of debt.


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Net Income (Loss).  Net loss for the year ended December 31, 2010 was $362,356 compared to net income of $160,404 for the twelve months ended December 31, 2009.  The $522,760 increase in loss arises from the higher SG&A expenses and the gain on settlement recorded in 2009 as mentioned above.





Off-Balance Sheet Arrangements





We do not have any off-balance sheet arrangements.





Critical Accounting Policies





We believe the following more critical accounting policies are used in the preparation of our financial statements:





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 amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.  On a periodic basis, management reviews those estimates, including those related to valuation allowances, loss contingencies, income taxes, and projection of future cash flows.




Recent Accounting Pronouncements




There were various accounting standards and interpretations recently issued, none of which are expected to a have a material impact on the Company's consolidated financial position, operations or cash flows.





Forward-Looking Statements





This report contains or incorporates by reference forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 concerning our future business plans and strategies, the receipt of working capital, future revenues and other statements that are not historical in nature.  In this report, forward-looking statements are often identified by the words “anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like.  These forward-looking statements reflect our current beliefs, expectations and opinions with respect to future events, and involve future risks and uncertainties which could cause actual results to differ materially from those expressed or implied.





Other uncertainties that could affect the accuracy of forward-looking statements include:





•         the worldwide economic situation;


•         any changes in interest rates or inflation;


•         the willingness and ability of third parties to honor their contractual commitments;


our ability to raise additional capital, as it may be affected by current conditions in the stock market and competition for risk capital;





•         our capital expenditures, as they may be affected by delays or cost overruns;







•         our ability to identify, finance and integrate any future acquisitions; and


•         the volatility of our common stock price.






15
 Table of Contents





This list is not exhaustive of the factors that may affect any of our forward-looking statements. You should read this report completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements represent our beliefs, expectations and opinions only as of the date of this report. We do not intend to update these forward looking statements except as required by law. We qualify all of our forward-looking statements by these cautionary statements.







ITEM 7B.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK






Not Applicable.




16
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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.











Index to Financial Statements:Management’s Report on Internal Controls over Financial Reporting
18Report of Independent Registered Public Accounting Firm
19Consolidated Balance Sheets at December 31, 2010 and 2009
20Consolidated Statements of Operations for the period from Inception (July 27, 2009 to December 31, 2009 and period January 1, 2009 to August 31, 2009, and for the year ended December 31, 2010
21Consolidated Statements of Changes in Stockholders’ Equity  for the year ended December 31, 2010 and the period from Inception (July 27, 2009) to December 31, 2009
22Consolidated Statements of Cash Flows for the period from Inception (July 27, 2009 to December 31, 2009 and period January 1, 2009 to August 31, 2009, and for the year ended December 31, 2010
23Notes to Consolidated Financial Statements
24
















17
 Table of Contents




MANAGEMENT’S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING







Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) under the Exchange Act.





Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:





-
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of assets;




-
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and




-
Provide reasonable assurance regarding prevention and timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.




Internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems that are determined to be effective provide only reasonable assurance with respect to financial statement preparation and presentation.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





Management assessed the effectiveness of our internal control over financial reporting based on criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission as determined to apply to a company our size.





Based on its assessment, management concluded that we maintained effective internal control over financial reporting as of December 31, 2010.









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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM











To the Board of Directors


Tremont Fair, Inc.


Houston, Texas








We have audited the accompanying balance sheets of Tremont Fair, Inc. as of December 31, 2010 and 2009 and the related statements of operations, changes in shareholders’ deficit and cash flows for the year ended December 31, 2010 and the period from inception (July 27, 2009) to December 31, 2009 and the period from January 1, 2009 to August 31, 2009.  These financial statements are the responsibility of Tremont’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tremont Fair, Inc. as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the periods described above in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming that Tremont Fair, Inc. will continue as a going concern.  As discussed in Note 3 to the financial statements, Tremont Fair, Inc. suffered recurring losses from operations and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans regarding those matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.








/s/ GBH CPAs, PC





GBH CPAs, PC


www.gbhcpas.com


Houston, Texas





April 14, 2011








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TREMONT FAIR, INC.


CONSOLIDATED BALANCE SHEET











December 31,


December 31,2010


2009ASSETSCURRENT ASSETSCash and cash equivalents

$
39,196


$
17,522Accounts receivable


-



12,664Accounts receivable – related party


13,806



-Prepaid expenses


2,455



18,839Total current assets


55,457



49,025Property and equipment, net of accumulated depreciation of $508 and $93, respectively


1,980



2,488Other assets


2,565



2,565TOTAL ASSETS

$
60,002


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


51,537


$
78,442Advances from third party


293,000



-Advances from related party


-



187,565Note payable


100,000



-Note payable – related party


-



100,000TOTAL CURRENT LIABILITIES


444,537



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;104,360,185 and 97,402,665 shares issued and outstanding,     respectively


104,361



97,402Paid-in capital (deficit)


(231,124
)


(513,915
)Retained earnings (accumulated deficit)


(257,772
)


104,584Total shareholders’ deficit


(384,535
)


(311,929
)TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT

$
60,002


$
54,078














See notes to financial statements.


20
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TREMONT FAIR, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS











Successor


PredecessorFor the Year Ended December 31, 2010


For Inception (July 27, 2009) to December 31, 2009


For the Period January 1, 2009

to August 31, 2009REVENUE

$
234,038


$
47, 638


$
181,521OPERATING EXPENSESSelling, general and administrative expenses


589,636



310,795



125,701Depreciation expense


508



93



-Total operating expenses


590,144



310,888



125,701Net operating profit (loss)


(356,106
)


(263,250
)


55,820OTHER INCOME (EXPENSE)Interest expense


(6,250
)


(2,166
)


-Gain on settlement of debt


-



370,000



-Net income (loss)

$
(362,356
)

$
104,584


$
55,820Basic and diluted net income per share

$
0.00


$
0.00


$
0.00Weighted average common shares outstanding – basic and diluted


99,956,043



96,536,638



80,000,000














See notes to financial statements.





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TREMONT FAIR, INC.


CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT


For Inception (July 27, 2009) to December 31, 2010











Preferred Stock


Common Stock


Paid-in Capital


RetainedShares


Amount


Shares


Amount


Deficit


Earnings


TotalBalances, July 27, 2009


-


$
-



80,000,000


$
80,000


$
(80,000
)

$
-


$
-Stock issued for:Reverse merger


-



-



16,503,128



16,503



(508,099
)


-



(491,596
)Debt conversion


-



-



500,000



500



49,500



-



50,000Services


-



-



399,537



399



24,684



-



25,083Net income


-



-



-



-



-



104,584



104,584Balances, December 31, 2009


-


$
-



97,402,665


$
97,402


$
(513,915
)

$
104,584


$
(311,929
)Balances, January 1, 2010


-


$
-



97,402,665


$
97,402


$
(513,915
)

$
104,584


$
(311,929
)Stock issued for:Cash


-



-



5,000,000



5,000



70,000



-



75,000Services


-



-



1,957,520



1,959



57,791



-



59,750Contributed Capital


-



-



-



-



155,000



-



155,000Net income (loss)


-



-



-



-



-


$
(362,356
)


(362,356
)Balances, December 31, 2010


-


$
-



104,360,185


$
104,361


$
(231,124
)

$
(257,772
)

$
(384,535
)











See notes to financial statements.


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TREMONT FAIR, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS








Successor


PredecessorFor the Year

Ended

December 31, 2010


For Inception (July 27, 2009) to

December 31, 2009


For the Period January 1, 2009

to August 31, 2009Cash flows from operating activities:Net loss

$
(362,356
)

$
104,584


$
55,820Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization


508



93



-Stock based compensation


59,750



25,083



-Gain on settlement of debt


-



(370,000
)


-Changes in operating assets and liabilitiesAccounts receivable


12,664



(12,664
)


-Accounts receivable - related party


(13,806
)


-



-Prepaid expenses


16,384



(5.662
)


-Accounts payable and accrued liabilities


128,095



23,708



-Accounts payable-related party


-



(15,400
)


-Net cash provided by (used in ) operating activities


(158,761
)


(250,258
)


55,820Cash flows from investing activities:Net cash received in reverse merger


-



361



-Purchase of property and equipment


-



(2,581
)


-Payment of security deposit


-



(2,565
)


-Net cash used in investment activities






(4,785
)


-Cash flows from financing activities:Proceeds from sale of common stock


75,000



-



-Net proceeds from related party advances


105,435



187,565



-Proceeds from issuance of debt to related parties


-



100,000



-Repayment of debt


-



(15,000
)


-Payments (to) from Creekstone Equity Management


-



-



(55,820
)Net cash provided by (used in) financing activities


180,435



272,565



55,820Net increase in cash and cash equivalents


21,674



17,522



-Cash and cash equivalents, at beginning of period


17,522



-



-Cash and cash equivalents, at end of period


39,196



17,522



-Supplemental cash flow information:Cash paid for interest

$
3,750


$
2,166


$
-Income taxes paid in cash

$
-


$
-


$
-Noncash financing activities:Reverse merger

$
-


$
491,596


$
-Common stock issued for conversion of debt

$
-


$
50,000


$
-Forgiveness of debt – contributed capital

$
155,000


$
-


$
-Transfer of note payable and advances to third party

$
393,000


$
-


$
-











See notes to consolidated financial statements.





23
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TREMONT FAIR, INC.


NOTES TO FINANCIAL STATEMENTS





1.      ORGANIZATION AND BASIS OF PRESENTATION





The accompanying 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. 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 periods presented have been reflected herein.





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 provide, 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 the southern United States. 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.





As a result of the reverse merger, acquired assets and assumed liabilities were as follows:





Cash

$
361Prepaid expenses


13,177Total assets

$
13,538Accounts payable and accrued expenses

$
474,734Accounts payable to related party


15,400Convertible debt


15,000Total liabilities

$
505,134





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


24
 Table of Contents





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 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 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.





2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





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





Furniture and Office Equipment





Furniture and office equipment are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of five to seven years.





Income Taxes





Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and accrued tax liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.


25
 Table of Contents




In accordance with FIN 48(effective June 1, 2007), which clarifies FAS 109, the Company evaluated all tax positions to determine if any are more-likely-than-not to sustain audit by a tax authority.  The Company has determined that there is no liability to be recorded for FIN 48.





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 December 31, 2010, the Company had no dilutive common shares equivalents outstanding.





Revenue Recognition





Revenue from management services is recognized when service is completed and collection is reasonably assured .





Subsequent Events





The Company evaluated events occurring between the end of our fiscal year, December 31, 2010 and the date when the financial statements were issued.





Recent Accounting Pronouncements





There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our consolidated financial position, operations or cash flows.





3.      GOING CONCERN





The Company has a working capital deficit at December 31, 2010 and does not expect current financial resources to meet its financial requirements over the next twelve months. 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. Historically, the Company has received cash advances from related parties, including stockholders and their affiliates, to cover operating expenses. The Company is seeking additional debt and equity financing to provide sufficient funds for payment of obligations incurred and to fund our ongoing business plan.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.





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4.      PROPERTY AND EQUIPMENT





Property and equipment as of December 31, 2010 and 2009 consisted of the following:


2010


2009Equipment

$
2,488


$
2,581Less accumulated depreciation


(508
)


(93
)Property and equipment, net

$
1,980


$
2,488





5.      ACCOUNTS PAYABLE AND ACCRUED LIABILITIES





Accounts payable and accrued liabilities as of December 31, 2010 and 2009 consisted of the following:





2010


2009Accounts payable

$
23,703


$
29,006Accrued interest payable


2,500



2,083Accrued compensation


26,333



47,333Total accounts payable and accrued liabilities

$
51,536


$
78,442





6.      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. As of December 31, 2010, the outstanding balance of advances from the related party was $0, due to the sale of the related party advances to a non-related party.  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 $0 as of December 31, 2010.





7.      CONVERTIBLE DEBT





In connection with the reverse merger, the Company assumed a convertible debenture with a principal amount of $15,000. On August 20, 2009, the Company repaid the debt holder the outstanding principal balance of $15,000 plus accrued interest of $2,880 and the debentures were retired by the Company.





8.      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 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 shares valued at $10,000 based on the 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 December 31, 2010, the company issued 200,000 common shares valued at $9,000 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


27
 Table of Contents





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 December 31, 2010, the company issued 100,000 common shares valued at $4,500, 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.





On December 20, 2010, the Company issued 2,500,000 common shares to an outside investor for $25,000 in cash.





As of December 31, 2010, the Company’s President and CEO elected to forgive his accrued and unpaid salary in the amount of $155,000, which has been recorded as contributed capital.





Our sole independent director is paid $2,000 in cash and shares of our common stock with a value equal to $5,000 per quarter. On February 7, 2011, the cash obligation to our sole independent director for services rendered up to December 31, 2010 was converted into 253,334 shares of common stock valued at $15,200 based on fair market value using quoted market prices on the date of grant.





On February 7, 2011, the Company converted $20,000 in cash payment obligations to a former director and a member of our advisory board for services rendered, into 800,000 common shares valued at $48,000, based on fair market value using quoted market prices on the date of issuance.





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 realized gain of $370,000 on settlement of debt.





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 December 31, 2009, the Company had accrued $5,333 cash compensation and issued 203,704 common shares valued at $13,333 based on fair market value using quoted market prices on the date of grant.





On December 31, 2009, the Company accrued $2,000 cash compensation and issued 83,333 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 December 31, 2009, the Company issued 112,500 common shares valued at $6,750, based on fair market value using quoted market prices on the date of grant, to our former Chief Financial Officer for services rendered.


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9.      INCOME TAXES





The provision for income taxes differs from the amount computed by applying the statutory income tax rate to the income from continuing operations for the years ended December 31, 2010 and 2009:


2010


2009Expected federal income tax (benefit) at 34%

$
(123,201
)

$
35,559Permanent differences


79



203Realized gain on debt settlement






(125,800
)Change in valuation allowance


123,122



90,038Provision for income taxes

$
-


$
-





Deferred tax assets and liabilities represent the estimated future impact of temporary differences between the financials statement and tax bases of assets and liabilities.  Components of deferred tax assets and liabilities at December 31, 2010 and 2009 were as follows:





Deferred tax assets:

2010


2009Organizational costs

$
11,156


$
11,978Accrued compensation


10,653



16,093Net operating loss carryforward


175,309



61,967Total deferred tax assets


197,119



90,038Valuation allowance


(197,119
)


(90,038
)Net deferred tax asset

$
-


$
-





At December 31, 2010, the Company had a federal tax net operating loss carryforwards of about $516,000 that expires in years 2029 to 2030.  The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realization of the deferred tax assets such that a valuation allowance has been recorded against such assets.





10.      COMMITMENTS AND CONTINGENCIES





On August 12, 2009, Poseidon Partners, LLC, a Texas limited liability company controlled by Cyrus Boga, an executive officer, director and the beneficial holder of a majority of the Company’s shares, assigned its office lease to the Company.  The lease concerns the use of 2,372 square feet of office space located at 10497 Town & Country Way, Suite 214, Houston, Texas.  The monthly lease rate is approximately $2,454 until the lease expires on July 31, 2011.  Future minimum rental payments by year and in aggregate under the lease are as follows:




Year Ending December 31,2011

$
17,178





11.       INCENTIVE FEE





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.


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 Table of Contents








12.       SUBSEQUENT EVENTS





On February 7, 2011, the cash obligation to our sole independent director for services rendered up to December 31, 2010 was converted into 253,334 shares of common stock valued at $15,200 based on fair market value using quoted market prices on the date of grant.





On February 7, 2011, the Company converted $20,000 in cash payment obligations to a former director and a member of our advisory board for services rendered, into 800,000 common shares valued at $48,000, based on fair market value using quoted market prices on the date of issuance.





On March 2, 2011, the Company converted $25,000 in notes payable into 10,000,000 shares of common stock.





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ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.




There have been no changes in our accountants during the last two fiscal years, and we have not had any disagreements with our existing accountants during that time.





ITEM 9A(T).  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 December 31, 2009, 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. Management’s report, which is included in Item 8 above, was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.





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





ITEM 9B.   OTHER INFORMATION.





None.


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PART III





ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





Directors and Executive Officers





The following individuals presently serve as our officers and directors(1):





Name

Age

Positions With the Company

Board Position Held SinceCyrus Boga (1)

43

President, Secretary, Treasurer, Principal Financial Officer, and Director

2008John D. Thomas (2)

38

Director

2009





(1)  Mr Boga was appointed President, Secretary, Treasurer and Principal Financial Officer on July 30, 2009.


(2)  Mr. Thomas was appointed to the Board of Directors on July 30, 2009.





Each of our existing directors is serving a term which expires at the next annual meeting of shareholders and until his successor is elected and qualified or until he resigns or is removed. Our officers serve at the will of our Board of Directors. There are no family relationships among our officers or directors.





The following information summarizes the business experience of each of our current officers and directors for at least the last five years:




Cyrus Boga.  Mr. Boga has been a member of the board of directors of the Company since October 2008.  Since February 2003, he has been the managing member of Poseidon Partners, LLC, a Texas-based company that purchases, rehabilitates and stabilizes distressed multifamily properties in Texas.  Since 2007, he has served as President of Creekstone Equity Management, Inc., a Houston-based property management company. From 2005 to 2007, Mr. Boga was the President of Armil Properties, LLC, a Houston-based property management company.  Mr. Boga has been involved in a variety of commercial roles involving multifamily properties, including property management, finance and marketing.  His earlier experience included corporate finance and equity research at various investment banks, including Merrill Lynch and Bear Stearns. Mr. Boga holds dual M.A. Degrees in International Economics and International Relations from the Paul H. Nitze School of Advanced International Studies of Johns Hopkins University, and completed PhD coursework at Yale University.




John D. Thomas, J.D.  Mr. Thomas is the President and Chief Operating Officer of Acadia Group, Inc., an international corporate finance advisory firm, specializing in reverse takeovers, mergers and acquisitions, and general corporate matters for a variety of small public and private companies in the United States, United Kingdom, and Germany. Since August 2009 Mr. Thomas has been a member of the board of directors of London Pacific & Partners, Inc. (OTC: LDPP), a Los Angeles and London-based investment and advisory firm specializing in healthcare and hospitality finance.  From May 2006 to October 2009 he was the director of the microcap division for small public company listings for MCC Global NV (FSE:IFQ2) an international financial services and investment conglomerate based in London and traded on the Geregeltermarkt of the Frankfurt Stock Exchange.  Since December 2008, Mr. Thomas has served as a member of the board of directors of Bayhill Capital, Inc. (BYHL.OB), a filer of reports pursuant to 13(a) and 15(d) of the Securities Exchange Act


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of 1934.  Mr. Thomas has served as corporate counsel for SportsNuts, Inc. (SPCI.OB), a filer of reports pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, since January, 2005 and has served as its CEO and sole director since August 2007.  Mr. Thomas has also practiced general corporate law for various clients from May 2003 until the present and from November 1999 until August 2002. Mr. Thomas holds a Juris Doctor degree from Texas Tech University School of Law and is licensed to practice law in Texas and Utah.  In August, 2009, Mr. Thomas entered into a settlement with the Commodity Futures Trading Commission wherein Mr. Thomas consented to an order of permanent injunction from his future involvement in commodity pools trading and commodities operations.





Section 16(a) Beneficial Ownership Reporting Compliance





During 2010, neither Mr. Thomas, a current member of the Board of Directors, nor Mr. Rob Condon, a former member of the Board of Directors, filed a report on Form 4 in connection with his receipt of shares of common stock as partial payment of his fees as a director of the Company.  To our knowledge, during the fiscal year ended December 31, 2010, based solely upon a review of such materials as are required by the Securities and Exchange Commission, no other officer, director or beneficial holder of more than ten percent of our issued and outstanding shares of Common Stock failed to timely file with the Securities and Exchange Commission any form or report required to be so filed pursuant to Section 16(a) of the Exchange Act of 1934.





Code of Ethics





We have not yet adopted a written Code of Ethics; however, we believe our executive officers conduct themselves honestly and ethically with respect to our business affairs.  As the Company is still in the process of organizing its formal corporate governance structure, we plan to adopt a formal Code of Ethics in the near future.




Changes in Procedures by which Security Holders May Recommend Nominees to the Board




Any security holder who wishes to recommend a prospective director nominee should do so in writing by sending a letter to the Board of Directors.  The letter should be signed, dated and include the name and address of the security holder making the recommendation, information to enable the Board to verify that the security holder was the holder of record or beneficial owner of the company’s securities as of the date of the letter, and the name, address and résumé of the potential nominee.  Specific minimum qualifications for directors and director nominees which the Board believes must be met in order to be so considered include, but are not limited to, management experience, exemplary personal integrity and reputation, sound judgment, and sufficient time to devote to the discharge of his or her duties.  There have been no changes to the procedures by which a security holder may recommend a nominee to the Board during our most recently ended fiscal year.


Audit Committee





Presently, we have no standing audit committee or designated audit committee financial expert.





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ITEM 11.   EXECUTIVE AND DIRECTOR COMPENSATION.




The following table summarizes the total compensation for the two fiscal years ended December 31, 2010 of our executive officers at the end of our last fiscal year (the “Named Executive Officers”).  Our company did not award cash bonuses, stock awards, stock options or non-equity incentive plan compensation to any Named Executive Officer during the past two fiscal years, thus these items are omitted from the table below:




Summary Compensation Table





Name and

Principal Position

Year

Salary

Stock

Awards

All

Other

Compensation

TotalCyrus Boga

2010

$ —

$ —

$ —

$ —President, Secretary,

2009

$ 40,000

$ —

$ —

$ 40,000Treasurer, andPrincipal Financial    Officer (1)Todd Graff

2010

$ —

$ ___

$ —

$ —Principal Financial

2009

$ 16,385

$ 6,750

$ —

$ 16,385Officer (2)David Kittrell

2010

$ —

$ —

$ —

$ —President(3)

2009

$ 20,000 (4)

$ 50,000 (4)

$ —

$ 70,000


(1) Appointed July 30, 2009.


(2) Appointed October 12, 2009. Dismissed on January 15, 2010.


(3) Resigned July 29, 2009.


(4) Represents $20,000 in cash and stock and property valued at $50,000 which Mr. Kittrell received in settlement in conjunction with his resignation from the Company.


(5) Amounts accrued pursuant to an employment agreement. No amounts were actually paid to Mr. Kittrell in 2008.




Mr. Boga is subject to an employment agreement entered into as of August 18, 2009, wherein the Company is obligated to pay Mr. Boga a salary and discretionary bonus.  During 2010 and 2009, $120,000  and $40,000, respectively, in salary and bonus was accrued to Mr. Boga. However, Mr. Boga forgave the accrued 2010 compensation, which was added to Contributed Capital.




Until his resignation on July 29, 2009, David Kittrell served pursuant to a five year employment agreement (from November 1, 2004) at $8,000 per month.  On August 19, 2009, the Company and Mr. Kittrell entered into a settlement agreement in satisfaction of all amounts due to Mr. Kittrell in connection with his employment as described in footnote (4) above.




Other than the foregoing, there is no other arrangement or understanding between the directors and officers of the Company and any other person pursuant to which any director or officer was or is to be selected as a director or officer.




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Outstanding Equity Awards at Fiscal Year-End




Our Named Executive Officers did not have any unexercised options or stock awards that have not vested outstanding at the end of our last fiscal year.  We did not grant any equity awards to our Named Executive Officers or directors during 2010.




Director Compensation




Each of our independent directors receive a cash fee of $2,000 per quarter and shares of our common stock with a value equal to $5,000, calculated as of the last day of the quarter.  If we retain additional independent directors in the future, we reserve the right to compensate them in accordance with industry standards as may be determined by our Board of Directors.  All directors are reimbursed for reasonable and necessary expenses incurred in their capacities as such.





ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.





As of March 14, 2011, there are a total of 115,413,520 shares of our common stock outstanding, our only class of voting securities currently outstanding. The following table describes the ownership of our voting securities by: (i) each of our officers and directors; (ii) all of our officers and directors as a group; and (iii) each shareholder known to us to own beneficially more than 5% of our common stock.  Unless indicated otherwise, the address for each officer, director, and 5% shareholder is c/o the Company, 10497 Town and Country Way, Suite 214, Houston, Texas 77024.




Shares Beneficially OwnedName of Beneficial Owner
Number
Percent of Class(1)Cumbria Capital, L.P.(2)
70,798,500
61.34%Cyrus Boga(3)
70,798,500
61.34%John D. Thomas(4)
1,012,323
0.88%Tucker Financial Services, Inc.(5)
10,000,000
8.66%All directors and officers as a group

(2 persons)
71,810,823
62.22%





(1) For each shareholder, the calculation of percentage of beneficial ownership is based upon 115,413,520 shares of common stock outstanding as of March 14, 2011, and shares of common stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights.  The percentage ownership of any shareholder is determined by assuming that the shareholder has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised such rights.  Except as otherwise indicated below, the persons and entity named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to applicable community property laws.





(2) Principal shareholder of the Company.  Includes 70,798,500 shares of common stock held directly.





(3) Chief Executive Officer, Secretary, and Treasurer of the Company.  Includes 70,798,500 shares of common stock held directly by Cumbria Capital, L.P., a Texas limited partnership owned and controlled by Cyrus Boga.





(4) Independent Director of the Company.  Includes 1,012,323 shares of common stock held directly by Mr. Thomas.





(5) Shareholder of the Company.  Includes 10,000,000 shares of common stock held directly.





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Changes in Control




On July 31, 2009, the Company 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 restricted common stock of the Company (such transaction is hereafter referred to as the “Acquisition”).  Prior to the Acquisition, TF-Texas was wholly-owned by Cumbria Capital, L.P. (“Cumbria”), a Texas limited partnership that is owned and controlled by Cyrus Boga, an executive officer, director, and substantial shareholder of the Company.  The Acquisition gave Mr. Boga voting control of the Company.  Together with all other shares of the Company in which Mr. Boga holds a beneficial interest (and taking into account recent dispositions by Cumbria), Mr. Boga beneficially holds 70,798,500 shares of the Company’s common stock, representing 61.34% of all common shares outstanding as of March 14, 2011.




Securities Authorized for Issuance Under Equity Compensation Plans




None.







ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.




Certain Relationships and Related Transactions




On July 31, 2009, the Company 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 restricted common stock of the Company (such transaction is hereafter referred to as the “Acquisition”).  Based upon the closing price of the Company’s shares on July 30, 2009, the transaction was valued at $4,800,000.  The Acquisition was approved by a majority of disinterested members of the Company’s Board of Directors.  Prior to the Acquisition, TF-Texas was wholly-owned by Cumbria Capital, L.P. (“Cumbria”), a Texas limited partnership that is owned and controlled by Cyrus Boga, an executive officer, director, and a holder of a substantial beneficial interest in the voting shares of the Company.  The Acquisition gave Mr. Boga voting control of the Company.  Together with all other shares of the Company in which Mr. Boga holds a beneficial interest (and taking into account recent dispositions by Cumbria), Mr. Boga beneficially holds 72,190,500 shares of the Company’s common stock, representing 61.34% of all common shares outstanding as of March 14, 2011.




On July 29, 2009, the Company issued a promissory note (“Note”) to Cumbria in exchange for cash proceeds of $100,000.  The Note bears interest at 5% per annum and matures on July 28, 2010.  The Company has also received loans from Cumbria in the principal amount of $293,000 (collectively, “Loans”).  Issuance of the Note and receipt of the Loans was approved by a majority of disinterested members of the Company’s Board of Directors.  The Company has not adopted any policies regarding related party transactions.




Director Independence




On July 30, 2009, the Board of Directors appointed John Thomas as a member of the Company’s Board of Directors.  Mr. Thomas is considered by the Company to be “independent” inasmuch as he is not an executive officer of the Company, does not hold a beneficial interest in more than 10% of the Company’s voting securities, and is not related to any executive officer or director of the Company.  We have not established any board committees.  We hope in the future to add at least one independent director and establish one or more board committees, especially an audit committee.




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ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.





The following table sets forth fees paid to our independent registered accounting firm, [GBH] for the last two fiscal years:





2010


2009Audit Fees

$
42,500


$
20,550Audit Related Fees


-0-



-0-Tax Fees


-0-



-0-All Other Fees


-0-



-0-Total Fees

$
42,500


$
20,550




It is the policy of the Board of Directors, which presently completes the functions of the Audit Committee, to engage the independent accountants selected to conduct our financial audit and to confirm, prior to such engagement, that such independent accountants are independent of the company.  All services of the independent registered accounting firm reflected above were pre-approved by the Board of Directors.




PART IV





ITEM 15.   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).31.1*
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





In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





TREMONT FAIR, INC./s/ Cyrus BogaDated: April 15, 2011
By: Cyrus Boga, President, Secretary, Treasury, Chief Financial Officer and Director











In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.











/s/ Cyrus Boga

President, Secretary,
April 15, 2011Cyrus Boga
Treasurer, Chief Financial Officer and Director/s/ John D. Thomas

Director
April 15, 2011John D. Thomas





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