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ITEM 2.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
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The following Management's
Discussion and Analysis of Financial Condition and Results of Operations, and other sections in this Quarterly Report, should be
read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2012, as well as our unaudited consolidated
financial statements and notes thereto contained elsewhere in this Quarterly Report on Form 10-Q. Such financial statements are
subject to risks and uncertainties that could cause actual results to differ materially from those described. We expressly disclaim
any obligation or undertaking to update these financial statements in the future.
Description of the Company
Although the Company is
seeking business opportunities, as of June 30, 2013, and since 2006, we did not have any business operations that generated revenue.
Intercomsoft Limited (“Intercomsoft”)
is our wholly owned subsidiary. Although its does not currently have any operations, through April 2006, pursuant to a Contract
on Leasing Equipment and Licensing Technology (the “Supply Agreement”) awarded to Intercomsoft in April 1996 by the
Ministry of Economics, Republic of Moldova, Intercomsoft provided Moldova with a National Register of Population and a National
Passport System. Under the terms of the Supply Agreement, Intercomsoft supplied all of the equipment, technology, software, materials
and consumables utilized by the Government of Moldova for the production of all national passports, drivers’ licenses, vehicle
permits, identification cards and other government authorized identification documents used in the Republic of Moldova. Moldova
asserted that the Supply Agreement expired by its terms on April 29, 2006 and was not renewed. The non-renewal of the Supply Agreement
has been disputed by Intercomsoft and is the subject of two pending legal actions. (See Part II Item 1 - Legal Proceedings).
As used in this report,
unless otherwise required by the context, Trimol Group, Inc. and its subsidiary are sometimes collectively referred to as the "Company"
or are implicit in the terms "we", "us" and "our".
RESULTS OF OPERATIONS
During the three and six
month periods ended June 30, 2013, our operations consisted solely of administrative activities, activities concerning exploration
of potential business opportunities and those activities related to pursuing breach of contract claims against the Republic of
Moldova as more fully described herein in Part II Item 1 – Legal Proceedings.
Comparison of Three and
Six Month Periods Ended June 30, 2013 and June 30, 2012
During the three and six
months ended June 30, 2013, we did not generate any revenues from operations and similarly generated no revenues in the comparable
periods in 2012.
Total operating expenses
for the three months ended June 30, 2013 were approximately $55,000, and were $167,000 in the comparable three month period in
2012. Such expenses totaled approximately $102,000 for the six months ended June 30, 2013 and $318,000 in the comparative period
in 2012. All of such expenses consisted of general corporate and administrative expenses. The reduction in operating expenses in
the three and six month periods ended June 30, 2013, as compared to the three and six months ended June 30, 2012 were the result
of a significant reduction in the compensation accrued and due to our officers as well as a reduction in the expenses related to
business development activities.
Such operating expenses
resulted in a net loss from operations of approximately $55,000 and $102,000 for the three and six month periods ended June 30,
2013, respectively, as compared to a net loss of approximately $167,000 and $318,000 for the three and six month periods ended
June 30, 2012, respectively.
Liquidity & Capital
Resources
We have not generated
any revenue since the first quarter of 2006. At June 30, 2013 our cash balance was approximately $8,000 which is not sufficient
to fund our operating expenses for the foreseeable future.
For over six years, we
have funded our operating expenses from loans and advances provided by our Chairman of the Board and Royal HTM Group, Inc., our
majority shareholder, a company owned and controlled by our Chief Executive Officer and Chief Financial Officer, who also serve
as the two members of our Board of Directors. We are dependent upon these loans and advances to fund our future operating expenses.
None of our officers,
directors or shareholders are under any obligation to provide us with any future loans or advances. However, if they do not loan
or advance us funds at a time when funds are necessary, we may be forced to suspend our limited operations.
Our assets are nominal
and our liabilities currently exceed our assets by approximately $7,114,000. These circumstances, among others, raise substantial
doubt about our ability to continue operations.
Off-Balance Sheet
Arrangements
We have no off-balance
sheet arrangements.
Stock Compensation
Plans
There were no options
to purchase shares of our common stock issued or exercised during the three and six month periods ended June 30, 2013 and as of
such date we have no options to purchase shares of our common stock issued or outstanding.
Available information
We are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, in accordance
therewith, file reports, proxy and information statements and other information with the SEC.
All reports filed by
us with the SEC are available free of charge via EDGAR through the SEC web site at
www.sec.gov
. In addition, the public
may read and copy materials we file with the SEC at the public reference facilities maintained by the SEC at its public reference
room located at 100 F Street, N.E. Washington, D.C. 20549. We will also provide copies of such material to shareholders upon written
request.
No person has been authorized
to give any information or to make any representation other than as contained or incorporated by reference in this Quarterly Report
and, if given or made, such information or representation must not be relied upon as having been authorized by us.
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ITEM 4.
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CONTROLS AND PROCEDURES
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Evaluation of Disclosure Controls and
Procedures
Our management is responsible
for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be
disclosed in our reports,
as defined in Rule 13a-15(f)
under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated
and communicated to our management to allow timely decisions regarding required disclosure based closely on the definition of “disclosure
controls and procedures” in Rule 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and
procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment
in evaluating the cost-benefit relationship of possible controls and procedures.
As of the end of the period
covered by this Quarterly Report, we carried out, under the supervision and with the participation of our Chief Executive Officer
and our Chief Financial Officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures to ensure that information required to be disclosed by us in this Quarterly Report was recorded, processed, summarized
and reported within the required time periods. In carrying out that evaluation, management identified a material weakness
(as defined in Public Company Accounting Oversight Board Standard No. 2) in our internal control over financial reporting regarding
a lack of adequate segregation of duties. Accordingly, based on their evaluation of our disclosure controls and procedures
as of June 30, 2013, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of that date, our controls
and procedures were not effective for the purposes described above.
There was no change in
our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the period
ended June 30, 2013, that has materially affected or is reasonably likely to materially affect our internal control over financial
reporting.
Management’s Report on Internal Control
over Financial Reporting
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange
Act. We have assessed the effectiveness of those internal controls as of June 30, 2013, using the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”)
Internal Control – Integrated Framework
as a basis for
our assessment.
Because of inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. 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 and procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and presentation.
A material weakness in
internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects our ability
to initiate, authorize, record, process, or report external financial data reliably in accordance with accounting principles generally
accepted in the United States of America such that there is more than a remote likelihood that a material misstatement of our annual
or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of
making our assessment of the effectiveness of internal controls over financial reporting, we identified a material weakness in
our internal control over financial reporting. This material weakness consisted of inadequate staffing and supervision
within the bookkeeping and accounting operations of our company. The relatively small number of individuals who have
bookkeeping and accounting functions prevents us from segregating duties within our internal control system. The inadequate
segregation of duties is a weakness because it could lead to the untimely identification and resolution of accounting and disclosure
matters or could lead to a failure to perform timely and effective reviews.
As we are not aware of
any instance in which we failed to identify or resolve a disclosure matter or failed to perform a timely and effective review,
we determined that the addition of personnel to our bookkeeping and accounting operations is not an efficient use of our very limited
resources at this time and not in the interest of our shareholders.