UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




FORM 10-Q




x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the Quarterly Period Ended March 31, 2011




OR




 ̈
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




For the Transition Period From                      to




Commission File Number:000-30872




TRYCERA FINANCIAL, INC.


(Exact name of registrant as specified in its charter)








Nevada
33-0910363(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification No.)18200 Von Karman Ave, Suite 850, Irvine, California
92612(Address of principal executive offices)
(Zip Code)




(949) 263-1800


(Registrant’s telephone number, including area code)





5230 E. Hunter Avenue,  Anaheim, California, 92807


(Former name, former address and former fiscal year, if changed since last report)







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    (Do not check if a smaller reporting company)                                                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




At May 12, 2011, there were 456,701,446 shares of the registrant’s Common Stock outstanding, par value $0.001 per share.







TRYCERA FINANCIAL, INC.IndexPAGEPART I FINANCIAL INFORMATION
4Item 1.
Financial Statements (Unaudited)
4Balance Sheets
4Statements of Operations
5Statements of Cash Flows
6Notes to Financial Statements
7Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
8Item 3.
Quantitative and Qualitative Discussion About Market Risk
13Item 4T.
Controls and Procedures
13PART IIOTHER INFORMATION
13Item 1.
Legal Proceedings
13Item 1A.
Risk Factors
14Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
14Item 3.
Defaults Upon Senior Debt
14Item 4.
(Removed and Reserved)
14Item 5.
Other Information
14Item 6.
Exhibits
14SIGNATURE PAGE
15
  2


FORWARD-LOOKING STATEMENTS





This report contains certain forward-looking statements and information that are based on assumptions made by management and on information currently available.  When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” and similar expressions, as they relate to our company or its management, are intended to identify forward-looking statements.  These statements reflect management’s current view of the company concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others the following:  changes in federal, state or municipal laws governing the distribution and performance of financial services; a general economic downturn; our startup phase of operations; reliance on third party processors and product suppliers; the inability to locate suitable acquisition targets; and other risks and uncertainties.  Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected.





Unless otherwise provided in this report, references to “we”, “us”, “our” and “Company” refer to Trycera Financial, Inc.


3


PART I


FINANCIAL INFORMATION





Item 1.  Financial Statements




Trycera Financial, Inc.Balance SheetsMarch 31,


December 312011


2010(unaudited)AssetsCurrent AssetsCash

$
27,932


$
15,800Prepaid expenses and other current assets


165,701



227,463Total Current Assets


193,633



243,263Property & Equipment, net


12,740



13,271Total Fixed Assets


12,740



13,271Other AssetsDeposits


6,711



6,711Definite life intangible assets


146,368



55,680Total Other Assets


153,079



62,391Total Assets

$
359,452


$
318,925Liabilities & Stockholders’ DeficitCurrent LiabilitiesAccounts payable

$
472,423


$
319,018Accounts payable - related parties


116,426



277,062Portfolio reserves


34,774



34,774Accrued expenses


733,911



539,594Unsecured notes


62,448



62,448Senior secured notes


77,500



77,500Debt conversion liability


328,716



328,498Total Current Liabilities


1,826,198



1,638,894Long-term Liabilities10% unsecured convertible notes


319,803



173,649Total Long-term Liabilities


319,803



173,649Total Liabilities


2,146,001



1,812,543Commitments


-



-Stockholders’ DeficitPreferred stock, 20,000,000 shares authorized, $.001 par value; none issued and outstanding


-



-Common stock, 2,000,000,000 shares authorized at $.001 par value; 456,701,446 and 455,201,446 shares  issued and outstanding, respectively


456,701



455,201Additional paid in capital


7,190,990



6,988,282Prepaid stock compensation


(175,003
)


(204,565
)Accumulated deficit


(9,259,237
)


(8,732,536
)Total Stockholders’ Deficit


(1,786,549
)


(1,493,618
)Total Liabilities & Stockholders’ Deficit

$
359,452


$
318,925




The accompanying notes are an integral part of these financial statements.
 4
  Trycera Financial, Inc.Statements of Operations(unaudited)For the 3 Months EndedMarch 31,


March 31,2011


2010RevenuesStored value

$
112


$
150112



150Cost of Sales


1,845



161Gross Profit


(1,733
)


(11
)ExpensesSalaries and wages


164,142



129,230Stock based compensation


129,208



-Professional fees


6,350



35,261General & administrative


189,175



607,882Total Expenses


488,875



772,373Loss from Operations


(490,608
)


(772,384
)Other Income (Expense)Interest expense


(36,092
)


(4,124
)Other income (expense)


-



40,000Total Other Income (Expense)


(36,092
)


35,876Loss before tax


(526,700
)


(736,508
)Income tax


-



-Net Loss

$
(526,700
)

$
(736,508
)Basic loss Per Share:Loss

$
(526,700
)

$
(736,508
)Net Loss Per Share

$
(0.00
)

$
(0.00
)Weighted Average Shares


455,494,779



204,763,111
  The accompanying notes are an integral part of these financial statements.
 5
 Trycera Financial, Inc.Statements of Cash Flows(unaudited)For the Years EndedMarch 31,


March 31,2011


2010Cash Flows from Operating ActivitiesNet Loss

$
(526,700
)

$
(736,508
)Adjustments to reconcile net loss to net cashused by operations;Depreciation and amortization


531



-Amortization of prepaid stock compensation


29,562



30,333Amortization of discount on note payable


16,372



226Stock issued for services


15,000



767,050Stock options and warrants


129,208



-Changes in operating assets and liabilities;(Increase) decrease in prepaid and other current assets


61,762



(6,553
)Increase (decrease) in accounts payable


(7,232
)


(8,961
)Increase (decrease) in accrued expenses


194,317



(132,514
)Net Cash Used by Operating Activities


(87,180
)


(86,927
)Cash Flows from Investing ActivitiesPayments for definite life intangible assets


(90,688
)


-Net Cash Provided by Investing Activities


(90,688
)


-Cash Flows from Financing ActivitiesProceeds from the sale of common stock


40,000



-Proceeds from issuance 10% Convertible notes


-



100,000(Increase) decrease in bank overdraft


-



(1,144
)Proceeds from issuance of unsecured notes


150,000



4,000Payment of unsecured note


-



(7,500
)Net Cash Provided by Financing Activities


190,000



95,356Net Increase (Decrease) in Cash and Cash Equivalents


12,132



8,429Cash and Cash Equivalents at Beginning of Period


15,800



-Cash and Cash Equivalents at End of Period

$
27,932


$
8,429Cash Paid For:Interest

$
-


$
-Income Taxes

$
-


$
-Non-Cash Financing Activities:Common stock/options issued for services and deferred compensation

$
122,563


$
767,050Promissory notes issued for accounts payable

$
-


$
73,948


The accompanying notes are an integral part of these financial statements.
 6
 Trycera Financial, Inc.
 Notes to Consolidated Financial Statements
 March 31, 2011
 NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
  General
 The accompanying condensed financial statements of the Company have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations.  These condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) that, in the opinion of management, are necessary to present fairly the results of operations of the Company for the periods presented.  These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Form 10-K for the year ended December 31, 2010.  The results of operations for the three months ended March 31, 2011, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011.
 
 NOTE 2 – GOING CONCERN
 
 The Company has had recurring operating losses since inception and is dependent upon financing to continue operations.  These factors indicate that the Company may be unable to continue in existence should immediate and short term financing options not be available.  These financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue its existence.  These financial statements do not include any adjustments that might result from the outcome of this uncertainty.  Currently the Company has minimal cash on hand and few material assets.  In addition, the Company has not established nor maintained a recurring source of revenues to sufficiently cover or offset any current, anticipated or planned operating costs to allow it to continue as a going concern.  It is the intent of the Company to find additional capital funding, grow revenues organically through new program launches and marketing campaigns and/or a profitable business venture to acquire or merge.
 
 NOTE 3 – SIGNIFICANT TRANSACTIONS
 
 On March 30, 2011, the Company entered into a new financial commitment agreement with a private equity group. The group has agreed in principle to commit $2,500,000 over eight (8) quarters, beginning in the second quarter of 2011. As part of the commitment, the Company with expand the Board of Directors to four (4) members and the private equity group will hold one (1) seat.   As a precursor to entering into this new financial commitment agreement, on March 29, 2011, the Company unilaterally terminated the subscription agreement dated August 17, 2010 between the Company and another private equity partner.  The agreement committed the private equity partner to deliver $2,500,000 in funding within 45 days of August 17, 2010, which would have been October 1, 2010.  However, the Company detrimentally relied on such funding and as of the date of termination, the private equity partner had invested a total of $157,500 or 6.3% of the committed funding amount.
  NOTE 4 – SUBSEQUENT EVENTS
 
 Pursuant to FASB ASC 855-10-50-1, the Company has evaluated subsequent events through May 13, 2011, the date these financial statements were available to be issued.
  7
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 The following discussion should be read in conjunction with our financial statements and related notes thereto as filed with the Securities and Exchange Commission.
 
 Overview
 
 From 2004 until 2008 the Company was in the business of developing, deploying and marketing semi-custom and customized branded prepaid and prepaid card solutions.  Due to continued losses from operations during 2009, the Company began winding down its principal business operations and commenced a search for a new business venture.  The Company has no material assets and significant liabilities. Former board members and management were unsuccessful in securing a new business venture for the Company and on January 22, 2009, transferred control of the Company to Ronald N. Vance, former company counsel, to seek for and, if possible, locate a suitable operating business venture willing to take control of the Company.
 
 On August 12, 2009, the Company changed its status from shell Company to operating Company.  Pursuant to business operations established in the second quarter, the Company has begun operations.  The core focus of the restarted operations is marketing prepaid card products, payment reporting products and a suite of financial products and services.  As a result, and at this time, the Company does not plan to reinstate its previous program management status, and will instead rely on third party processors, program managers and banks to coordinate, issue and manage prepaid card portfolios on behalf of the Company.  The Company will focus on the marketing of network branded third party card programs that can adopt our payment reporting platform within their technical infrastructure.  By leveraging existing card platforms and portfolios, we should be able to aggregate more payment reporting customers. The Company has also begun negotiations to engage businesses in the sales process.  The targeted focus of the Company is to partner with businesses which deliver non-bank personal and financial services such as insurance agencies, micro-loan centers, rent to own, local/regional credit unions and check cashing businesses.   As of the date of this report, the Company has begun negotiations for various arrangements and agreements.  While new agreements are in place, it is indeterminable how restarting operations may positively or adversely affect the business.  As a result, the Company, while attempting to create newfound revenue streams, will continue seeking opportunities for outside business ventures and raising funds to aid in launching new opportunities, work to begin generating organic revenues and developing strategic alliances and payment reporting partnerships.
 
 Recent Developments
 
 For the first quarter ending March 31, 2011, all primary operational efforts have been prioritized and focused on finalizing the technical infrastructure for the planned rollout of the Company’s payment reporting engines.  In conjunction with the technical build out, the Company has continued entering into new distribution, strategic partnerships and operating agreements in support of  the prepaid card business that is the backbone of the payment reporting business.  Throughout the first quarter, the Company made limited progress in marketing the primary products and services in support of continued operations.  In continuing with the direction outlined throughout 2010, the Company continued to focus on developing marketing partnerships to facilitate the distribution of prepaid debit cards, personal financial services and payment reporting services, all of which are designed to assist consumers in managing individual personal finances, including spending, budgeting and financial awareness.  Last year,  the Company executed agreements to operate under a new banking partnership, a new processor relationship and a leading retail load network.  As part of the roadmap to further solidify the Company’s payment reporting efforts, the Company subsequent, to the first quarter has provided Central National Bank a request for a customized network branded card program.
 
 The Company believes that this new card program will be able to offer a predictable low cost model that will provide our customers and strategic distribution partners the flexibility of working with wide reaching portfolio program channels and will better align cardholders with a suite of financial tools that include personal budgeting tools, online card balance viewing, bill payment, convenient reloading options online or at retail and a financial management spending analysis tool.  We anticipate launching this program in the late part of the second quarter of 2011 or early in the third quarter.
   8
  In conjunction with continuing efforts to expand the operations, the Company spent time in the first quarter on aligning the payment reporting business with key industry associations, industry experts and governmental agencies in order to foster long term alliances.
 
 In addition, a number of initiatives undertaken during the first quarter by the Company have taken longer than expected or anticipated.  Capital constraints coupled with key management time constraints, increasing regulatory requirements, lengthening approval timeframes and vendor payment shortfalls all contributed to slower than planned marketing as well as delays in generating organic revenues in the first quarter.  The Company expects that organic revenues will be generated in the coming quarters to allow the Company to hire third parties to staff and support the program development and primary growth objectives.
 
 In further support of continued operations, the company made a number of material changes to its operations in the first quarter of 2011:
 
 On March 30, 2011, the Company entered into a new financial commitment agreement with a private equity group. The group has agreed in principle to commit $2,500,000 over eight (8) quarters, beginning in the second quarter of 2011. As part of the commitment, the Company with expand the Board of Directors to four (4) members and the private equity group will hold one (1) seat.
 
 On March 30, 2011, the Company entered into a consulting agreement with Mannon Walters. The agreement calls for performing certain obligations for specific consideration in cash and Company equity.
 
 On March 29, 2011, the Company unilaterally terminated the subscription agreement dated August 17, 2010 between the Company and a private equity partner.  The agreement committed the private equity partner to deliver $2,500,000 in funding within 45 days of August 17, 2010, which would have been October 1, 2010.  However, the Company detrimentally relied on such funding and as of the date of termination, the private equity partner had invested a total of $157,500 or 6.3% of the committed funding amount.
 
 On February 16, 2011, the Company filed a provisional patent application related to the technology and processes used with respect the Company’s alternative credit reporting platform. The Company remains underway with a complete process and technology compilation in order to file further patents regarding this function of the business.
 
 On February 4, 2011, Reiner Vanooteghem, the Company’s Vice President of Sales resigned to pursue other opportunities.
  Throughout the first quarter of 2011, the Company was contacted by several vendors demanding payment for prior services.  The Company, as of the date of this report, is underfunded and is nearly insolvent.  The new financial commitment entered into on March 30, 2011 shall provide improved funding over the coming quarters and is expected to allow the Company to remain focused on the delivery of the payment reporting and prepaid card businesses.  The Company continues to negotiate with new vendors, key vendors and prior service providers.  Key management personnel have accrued wages and continue to accrue wages and accept partial payments for services.  It is anticipated that key management personnel and key vendors and prior service providers shall be reimbursed accordingly once additional working capital is invested.  A continued and substantial backlog of liabilities remains on the records of the Company, but management remain confident that those liabilities will be paid, negotiated, reduced or addressed in the coming quarters.  Of the major items outstanding, the single largest are the lapsed settlement agreements with former directors Knitowski, Dang and their related parties, Dang, Ecewa, Curo and Sagoso.  The Company has been in contact with certain principals as listed above during the first quarter.  It is expected that cash payments or alternative arrangements will be made in the second quarter of 2011 to mitigate any languishing liabilities to those particular parties.
   9
 
 Key Accounting Policies
 
 Key accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions.  There were no changes to our key accounting policies for the quarter ended March 31, 2010.
 
 Results of Operations
 
 For the three months ended March 31, 2011
 
 In the first quarter of 2011 we were focused on the technical infrastructure and executing distribution, marketing and strategic agreements. Delays in delivering marketing and services coupled with delayed vendor payments caused us to miss the opportunity to generate any material revenues during the quarter.  As a result there was minimal revenue for both the first quarter 2011 and the comparable period.
 
 Revenue
 
 Revenue from continuing operations was $112 and $150 for the quarters ended March 31, 2011 and 2010, respectively, representing a decrease of $38 or effectively 25%.  As previously discussed, delays in delivering marketing and services coupled with delayed vendor payments caused us to miss the opportunity to generate any material revenues during the quarter.
 
 Cost of Sales and Gross Profit
 
 Cost of sales was $1,845 and $161 for the quarters ended March 31, 2011 and 2010, respectively, representing an increase of $1,684 or 1045%.  The increase was attributed to the typical costs associated with the commencement of programs and operations.
 
 The resulting gross profit (loss) was ($1,733) and ($11) for the quarters ended March 31, 2011 and 2010, respectively.  Management expects gross profit margin to remain unpredictable and volatile as the new operations begin.  Fluctuations can be anticipated due to uncertainties in accessing markets coupled with higher product costs mixed with the volatility of entering markets where products have been commoditized.  Management believes that by eliminating previously high fixed processing and banking costs associated with program management, the Company can focus on improving margins by delivering organic revenues through new marketing partnerships and alliances.
 
 Operating Expenses
 
 Operating expenses were $488,875 and $772,373 for the quarters ended March 31, 2011 and 2010, respectively, representing a decrease of $283,498 or 37%.  The key components of our first quarter 2011 operating expense are salaries and wages (34%) stock based compensation (26%) and general and administrative (39%).
 
 Salaries and wages expense were $164,142 and $129,230 for the quarters ended March 31, 2011 and 2010, respectively, representing an increase of $34,912 or 27%. The increase results from the increase in the number of employees from 2 for the three months ended March 31, 2010 to 4.3 full time equivalents for the three months ended March 31, 2011.
 
 General and administrative expenses were $189,175 and $607,882 for the quarters ended March 31, 2011 and 2010, respectively, representing a decrease of $418,707 or 69%.  The decrease resulted largely from the fact the Company has paid several vendors $564,300 in the form of stock, such stock being valued at $.011 and $.035 per share for the three months ended March 31, 2010.
  10
 
 Other income
 
 Other income was $0 and $40,000 for the quarters ended March 31, 2011 and 2010, respectively.  As previously stated, on February 25, 2010, the Company had resolved an outstanding $40,000 arbitration debt under a debt conversion agreement with Triple Crown.  Under this agreement, the arbitration award was paid jointly to the recipient (Transfers4Less) by Triple Crown and the Company’s insurance provider.  The Company had shown the insurance settlement as other income for which there is no comparable for 2011.
 
 Net loss
 
 We incurred net losses of $526,700 and $736,508 for the quarters ended March 31, 2011 and 2010, respectively, representing an increase in net loss of $209,808 or 28%.  As we continue our general business operations, organic growth in conjunction with strategic alliances and acquisition or merger opportunity, we expect to improve on net losses when 2011 is compared to 2010.
 
 Liquidity and Capital Resources
 
 As of March 31, 2011, cash totaled $27,932 as compared with $15,800 at December 31, 2010, resulting in an increase of $12,132 in cash and cash equivalents.  The increase in cash and cash equivalents was attributed to funding the operational expenses and cost of goods sold with new convertible debt.  In the three months ended March 31, 2011, we used $87,180 of cash in operations.  For the comparable period in the prior year we used $86,927 of cash in operations.
 
 Working capital was ($1,632,565) at March 31, 2011, as compared with working capital of ($1,395,631) at December 31, 2010.  This decrease in working capital was a result of using new funds and accounts payable to fund operations and related expenses.
 
 The Company is currently being funded through a mix of equity investments and convertible note instruments to supply working capital for operations.  The Company has a substantial backlog of liabilities and will need to negotiate and reduce liabilities in order to remain on a viable business path.  If vendors, agents, suppliers and third parties are unwilling to agree to terms more favorable to the Company, there is a likelihood that the liabilities could materially and adversely affect day to day operations.  The funds invested and committed are primarily focused on driving business growth and not specifically earmarked to extinguish large tranches of debt or the backlog of liabilities. In event that the Company is unable to mitigate the affects of the liabilities, the Company may seek any and all necessary protections afforded under various state and federal laws.  The Company plans to continue to collect equity investments and debt instruments for the remainder of 2011 in order to finance continued operations and to finance potential merger and/or acquisition investments.
 
 Off-Balance Sheet Arrangements
 
 During the quarter ended March 31, 2011, we did not engage in any off-balance sheet arrangements.
 
 Stock-Based Compensation
  "On June 30, 2009, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles-a replacement of FASB Statement No. 162. On the effective date of this standard, FASB Accounting Standards CodificationTM (ASC) became the source of authoritative U.S. accounting and reporting standards for nongovernmental entities, in addition to guidance issued by the Securities and Exchange Commission (SEC). FASB ASC significantly changes the way financial statement preparers, auditors, and academics perform accounting research."
  11
  "This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.  If an accounting change results from the application of this guidance, an entity should disclose the nature and reason for the change in accounting principle in their financial statements.  This new standard flattens the GAAP hierarchy to two levels: one that is authoritative (in FASB ASC) and one that is non-authoritative (not in FASB ASC). Exceptions include all rules and interpretive releases of the SEC under the authority of federal securities laws, which are sources of authoritative GAAP for SEC registrants, and certain grandfathered guidance having an effective date before March 15, 1992. This standard creates Topic 105, Generally Accepted Accounting Principles, in FASB ASC."
  "FASB Statement No. 168 is the final standard that will be issued by FASB in that form.  It was added to FASB ASC through Accounting Standards Update No. 2009-02 on June 30, 2009.  There will no longer be, for example, accounting standards in the form of statements, staff positions, Emerging Issues Task Force (EITF) abstracts, or AICPA Accounting Statements of Position.  Instead, FASB will issue Accounting Standards Updates.  FASB will not consider Accounting Standards Updates as authoritative in their own right.  Instead, they will serve only to update FASB ASC, provide background information about the guidance, and provide the basis for conclusions on changes made to FASB ASC."
  "FASB ASC is a major restructuring of accounting and reporting standards designed to simplify user access to all authoritative U.S. generally accepted accounting principles (GAAP) by providing the authoritative literature in a topically organized structure.  FASB ASC disassembled and reassembled thousands of nongovernmental accounting pronouncements (including those of FASB, the EITF, and the AICPA) to organize them under approximately 90 topics and include all accounting standards issued by a standard setter within levels A-D of the current U.S. GAAP hierarchy.  FASB ASC also includes relevant portions of authoritative content issued by the SEC, as well as selected SEC staff interpretations and administrative guidance issued by the SEC; however, FASB ASC is not the official source of SEC guidance and does not contain the entire population of SEC rules, regulations, interpretive releases, and staff guidance. Moreover, FASB ASC does not include governmental accounting standards.  FASB ASC is not intended to change U.S. GAAP or any requirements of the SEC."
  Subsequent Events
 
 The following material events occurred subsequent to the quarter ended March 31, 2011:
 
 On May 2, 2011, Sheppard, Mullin, Richter & Hampton referred the Company to another firm for handling future legal matters.  The small nature of the Company’s business and legal proceedings was identified as a primary driver for the referral.
 
 On April 27, 2011, Trycera Financial, Inc. executed and alliance agreement with the National Credit Reporting Association.  The alliance is aimed at leveraging the Equal Credit Opportunity Act, Regulation B (ECOA Reg B) with the key purpose of the agreement focused on establishing terms by which NCRA members will verify and report consumers' rental, utilities, and other recurring bill payment information to a Trycera customer's file.
 
 On April 11, 2011, the Company filed a Form8-K disclosing a change of auditor.  The Company now works with Morrill & Associates, a PCAOB certified firm based in Utah.
 
 On April 5, 2011, the Company re-filed the corrected Form 12b-25 with the Securities and Exchange Commission (SEC).  The date on the initial form was erroneously dated 03/31/2011, and the resulting error caused the Company stock to be traded on both the Over the Counter Bulletin Board (OTCBB) and Pinksheets (PK).  The corrected form has remedied the dual exchange issue and the Company remains active with the OTCBB.
  
 12
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
 As a smaller reporting company, we have elected not to provide the disclosure required by this item.
 
 Item 4T.Controls and Procedures
 
 Controls and Procedures
 
 Any control system, no matter how well designed and operated, can provide only reasonable (not absolute) assurance that its objectives will be met.  Furthermore, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.
 
 Disclosure Controls and Procedures
 
 The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s “disclosure controls and procedures”, as such term is defined in Rules 13a — 15(e) and 15d — 15(e) of the Securities Exchange Act of 1934 (“Exchange Act”) as of the end of the period covered by the report.
 
 Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2011, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that (i) the information required to be disclosed by us in this Report was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
 Internal Control Over Financial Reporting
 
 With the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company also conducted an evaluation of the Company’s internal control over financial reporting to determine whether any changes occurred during the Company’s fiscal quarter ended March 31, 2011, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.  Based on such evaluation, management concluded that, as of the end of the period covered by this report, there have not been several changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
 Specific changes include (but are not limited to):
 
 §
Addition of independent Board Member for oversight and independence;
 §
Planned addition of personnel when Company expands;
 §
Re-implementation of Company audit committee.
 
 PART II
 OTHER INFORMATION
 
 ITEM 1.    Legal Proceedings
 The Company continues to receive demands for payments from creditors.  The Company has insufficient funds to defend these actions or to pay the creditors.  However, management has been proactive to reach out to most creditors in an attempt to negotiate or resolve outstanding debt.  In addition, the Company is proactively working with interested third parties to convert debt on behalf of the Company.  Converted debt notifications will be filed on Form 8-K with the Securities and Exchange Commission.
 
 The Company has received erroneous demands from certain individuals related to compensation and shareholder interests.  As a result, the company has retained a law firm to protect our various interests and authorized various cease and desist orders to halt the dissemination of false and misleading information.
   13
 ITEM 1A.   Risk Factors
 
 In addition to the other information set forth in this report, you should carefully consider the factors discussed under the caption “Risk Factors” in Part I, "Item 1. Description of Business" in our Annual Report on Form 10-KSB for the year ended December 31, 2010 which could materially affect our business prospects, financial condition or future results. There have been no other material changes during the three months ended March 31, 2011 to the risk factors discussed in the periodic report noted above.
 
 ITEM 2. Unregistered Sales Of Equity Securities and Use of Proceeds
 
 On March 30, 2011, we entered into a Subscription Agreement with Legacy Resources Development LLC (Legacy Resources),whereby Legacy Resources has agreed to purchase 50,000,000 shares of our common stock at $.05 per share for an aggregate purchase price of $2,500,000.  The Company received $100,000 on April 21, 2011 from a Legacy Resources principal, representing the initial payment for the shares.  The Company anticipates that it will receive the balance of the funds from Legacy Resources within the next one hundred and eighty (180) days.  The shares will be issued  in reliance upon the exemptions from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(2) of the Act.  The certificates evidencing the above mentioned shares contain a legend (1) stating that the shares have not been registered under the Act and (2) setting forth or referring to the restrictions on transferability and sale of the shares under the Act.
 
 ITEM 3. Defaults Upon Senior Debt
 None
 
 ITEM 4. (Removed and Reserved)
 
 
 ITEM 5.Other Information
 None
 
 
 ITEM 6.    Exhibits
 Exhibit No.

Description31.1

Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Principal Executive Officer.31.2

Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 of the Chief Financial Officer.32.1

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal Executive Officer.32.2

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Principal Financial Officer.
 
 SIGNATURE PAGE FOLLOWS
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 SIGNATURES
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
   Trycera Financial, Inc.Date: May 16, 2011
By:
/s/ Ray SmithRay Smith, President(Principal Executive Officer)Date: May 16, 2011
By:
/s/ Bryan KenyonBryan Kenyon, Chief Financial Officer(Principal Financial Officer)
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