Trb Systems International Inc - Amended Quarterly Report of Financial Condition (10QSB/A)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB/A
Amendment No. 1

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

For the quarterly period ended March 31, 2007

( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ________________ to _________________

Commission File Number: 333-07242

TRB SYSTEMS INTERNATIONAL INC.

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(Exact name of small business issuer as specified in its charter)

Delaware 22-3522572 -------------------------------------- -------------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization)

1472 Cedarwood Drive, Piscataway, New Jersey 08854

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(Address of principal executive offices)

[phone]

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(Issuer's telephone number)

N/A

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

Check whether the issuer (1) filed all reports required to be filed by Section 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 [X] No [ ]

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

State the number of shares outstanding of each of the issuer's classes of common equity: As of May 14, 2007: 22,783,002 shares of common stock, $.001 par value.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-QSB/A (this "Amendment") amends TRB Systems International, Inc.'s (the "Company") Quarterly Report on Form 10-QSB for the quarter ended March 31, 2007, originally filed with the Securities and Exchange Commission (the "Commission") on May 15, 2007 (the "Original Filin").

We are filing this Amendment for the purpose of restating the financial statements for the quarter ended March 31, 2007 and its accompanying notes, because, as a result of a previously-announced "Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review", which was filed on a Form 8-K with the Commission on October 5, 2007. After the completion of audit reviewing those originally filed financial statements, the independent registered public accountant of the Company found them satisfactory, and no changes need to be made. Except as set forth in the immediately preceding sentence, this Amendment No. 1 does not alter or restate any of the information set forth in the Original Filing.

This Amendment No. 1 continues to speak as of the date of the Form 10-QSB filed on May 15, 2007 and we have not updated the disclosures contained herein to reflect events that have occurred since the filing of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with our other filings, if any, made with the Commission subsequent to the filing of the Original Filing.

As required, currently-dated certifications from our Principal Executive and Principal Financial Officer has been included as exhibits to this Amendment.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TRB SYSTEMS INTERNATIONAL, INC.
Consolidated Balance Sheet (Unaudited)
March 31, 2007
(Restated)

ASSETS

CURRENT ASSETS:

Cash................................................... $ 18,916 Accounts receivable, net............................... 2,433,183 Inventories............................................ 271,402 Other current assets................................... 245 ---------------- Total Current Assets.............................. 2,725,746 Indebtedness of related party.......................... 57,659 Property and equipment, net............................ 164,390 Other Assets Deferred tax assets.................................... 222,579 Other assets........................................... 145,334 ---------------- 367,913 TOTAL ASSETS........................................... $ 3,315,708 ================

LIABILITIES AND SHAREHOLDER'S EQUITY

Current Liabilities Accounts payable and accrued liabilities............... $ 531,638 Notes and interest payable............................. 2,286,006 Advances from customers................................ 161,704 Convertible debts...................................... 142,611 Other payable.......................................... 141,958 Corporation income taxes payable....................... 935 ---------------- Total Current Liabilities.......................... 3,264,852 Indebtedness to Related Party.......................... 613,363 Legal judgments payable................................ 381,000 ----------------- Total Liabilities...................................... 4,259,215

Shareholders' Equity
Common stock, $0.001 par value, 30,000,000 shares authorized,

22,783,002 shares issued and outstanding............. 22,783 Additional paid-in capital............................. 3,106,489 Deficit accumulated during development stage........... (4,072,779) ----------------- Total Shareholders' Equity (Deficit)............... (943,507) TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. $ 3,315,708 ================

See Notes to the Consolidated Financial Statements

TRB SYSTEMS INTERNATIONAL, INC.
Consolidated Statement of Operations

For the Three and Nine Months Ended March 31, 2007 and 2006

(Restated)

Three Months Nine Months Ended March 31, Ended March 31, --------------------------- -------------------------- 2007 2006 2007 2006 -------------- ------------ ------------- ------------ Operating Revenue Product sales........................... $ - $ - $ 203,343 $ - Cost of goods sold - - 153,638 - -------------- ------------ -------------- ----------- Gross Profit............................ - - 49,705 - Operating Expenses: Auto expenses........................... - - - 849 Communication........................... - - - 2,953 Consulting.............................. - - 752 - Depreciation............................ 1,553 3,300 4,659 9,745 Employee salaries....................... 12,642 3,445 30,023 17,649 Marketing and sales promotion........... 7,070 3,192 61,440 13,866 Meals and entertainment................. 1,285 14,000 3,693 23,476 Miscellaneous........................... 2,536 4,353 3,146 14,183 Office expenses......................... 13,966 12,905 68,967 24,480 Samples................................. - - - 13,655 Overseas operating expenses............. 9,510 30,587 15,785 35,724 Professional fees....................... 16,215 5,137 30,857 25,922 Rents................................... 6,158 - 15,854 9,889 Research and development................ 3,626 3,898 33,004 14,453 Travel.................................. 6,104 10,024 50,070 21,822 ------------ ------------ ------------- ----------- Total operating costs and expenses...... 80,665 90,841 318,250 228,666 ------------ ------------ ------------- ----------- NET LOSS FROM OPERATIONS................ (80,665) (90,841) (268,545) (228,666) OTHER INCOME (EXPENSE) Interest income......................... - 1,930 285 2,072 Foreign currency translation............ - - (918) (18) Interest expense........................ (71,356) (72,918) (216,342) (213,184) ------------ ------------- ------------- ---------- NET LOSS BEFORE INCOME TAX.............. (152,021) (161,829) (485,520) (439,796) INCOME TAX.............................. - - - - ------------ ------------- ------------- ---------- LOSS FROM CONTINUING OPERATIONS......... $ (152,021) $ (161,829) $ (485,520) $ (439,796) ------------ ------------- ------------- ---------- NET LOSS................................ $ (152,021) $ (161,829) $ (485,520) $ (439,796) ============ ============= ============= =========== Net Loss Per Share...................... $ (0.01) $ (0.01) $ (0.02) $ (0.02) ============ ============= ============= =========== See Notes to the Consolidated Financial Statements

TRB SYSTEMS INTERNATIONAL, INC.
Consolidated Statements of Cash Flow
For the Nine Months Ended March 31, 2007 and 2006
(Restated)

2007 2006 ---------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss......................................... $ (485,520) $ (439,796) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation & amortization..................... 4,659 9,745 Changes in operating assets and liabilities: Decrease (increase) in accounts receivable...... (193,416) - Decrease (increase) in inventories.............. (36,677) (139,139) Decrease (increase) in other current assets..... (2,245) (46,614) Decrease (increase) in deferred tax assets...... (59,279) - Increase (decrease) in accounts payable and accrued liabilities........................... 134,751 211,130 Increase (decrease) in customer advance......... 1,161 2,441 ---------------- ---------------- Net cash used in operating activities............. (636,566) (402,233) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment................ (22,029) (19,490) Decrease (increase) in other assets............... 77,425 245 Increase indebtedness of related party............ 156,714 (1,478) ---------------- ---------------- Net cash used in investing activities............. 211,930 (21,213) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of notes payable......................... 197,045 - Increase in interest payable...................... 213,184 252,638 Increase in director's loans...................... - 209,107 ---------------- --------------- Net cash provided by financing activities......... 410,229 461,745 Net increase (decrease) in cash and cash equivalents (14,407) 38,299 Cash and cash equivalents, beginning.............. 33,323 602 ---------------- ---------------- Cash and cash equivalents, ending................. $ 18,916 $ 38,901 ================ =============== SUPPLEMENTAL DISCLOSURES ON INTEREST AND INCOME TAXES PAID Interest paid..................................... $ 216,342 $ 213,184 =============== =============== Income taxes paid................................. $ - $ - =============== =============== See notes to the consolidated financial statements

TRB SYSTEMS INTERNATIONAL INC.

Notes to Consolidated Financial Statements
(Restated)

1. ORGANIZATION AND NATURE OF BUSINESS

TRB Systems International Inc. ("the Company") is a holding company incorporated in Delaware on April 11, 1997. The Company has established a new subsidiary, Alenax (Tianjing) Bicycle Corp. ("Alenax") to conduct business in China. Alenax was incorporated on February 22, 2005 under the laws of People's Republic of China or PROC.

The Company was established to produce and market bicycle, fitness and motorized two wheel transportation products in China.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant account policies of TRB Systems International, Inc., is presented to assist in understanding the Company's financial statements. The financial statements and the notes are the representation of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to U.S. generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Liquidity and Going Concern

As of March 31, 2007, the Company had cash and cash equivalents totaling $18,916 as compared to $ 38,901 at March 31, 2006. As of March 31, 2007, the Company had working capital of $(539,106) compared to a working capital of $(448,100) at March 31, 2006.

The Company has suffered recurring losses from operations and has outstanding judgments in the amount of $381,000, which according to management will not be able to pay within one-year period due to its financial position. These conditions indicate that the Company may be unable to continue as a going concern.

The Company believes its available cash, cash equivalents, in combination with additional license and distributor payments will be sufficient to meet its anticipated capital requirements. Prior to the commercialization of its products, substantial capital resources will be required to fund continuing operations related to the Company's research, development, manufacturing and business development activities. The Company believes there may be a number of alternatives available to meet the continuing capital requirements to its operations, such as public and private financings. Further, the Company placed the first order of its products and believes that will generate new license and distributor agreements. There can be no assurance that any of these findings will be consummated in the time frames needed for continuing operations or on terms favorable to the Company. If adequate funds in the future are not available, the Company will be required to significantly curtail its operating plans and may have to sell or license out significant portions of the Company's technology or potential products, and possibly cease operations.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of TRB Systems International Inc., a non-operating holding company and Alenax (Tianjin) Bicycle Corp., the operating company.

Basis of Presentation

The financial statements of TRB Systems International Inc. are prepared using the accrual basis of accounting whereas revenues are recognized when earned and expenses are recognized when incurred. This basis of accounting conforms to generally accepted accounting principles in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles 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. Estimates are used when accounting for certain items, such as allowances for doubtful accounts, depreciation and amortization, income taxes and contingencies. Actual results could differ from those estimates.

Cash and Cash equivalents

For the purpose of the statements of cash flows, the Company considers as cash equivalents: cash on hand, cash in banks, time deposits and all highly liquid short-term investments with maturity of three months or less.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is established through a charge to an expense account. The Company reserves based on experience and the risk assessed to each account.

Inventories

Inventories consist of bicycles and bicycle parts. Inventories are stated at the lower of cost or market using FIFO (First In, First Out).

Property and Equipment

Property and equipment are carried at cost. Depreciation of property and equipment is computed using the straight-line method for financial reporting purposes at rates based on the following estimated useful lives.

Machinery and equipment 3-10 Furniture and fixtures 3-10 Engineering equipment 3-10

For federal income tax purposes, depreciation is computed using the Modified Accelerated Cost Recovery System method (MACRS) therefore temporary differences exist. Expenditures for major renewals and betterment that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs as charged to expense as incurred.

Impairment of Long-Lived Assets

The Company has adopted FASB Statements No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the total fair value is less than the carrying value of the asset, a loss is recognized for the difference. Fair value is determined based on market quotes, if available, or is based on valuation techniques.

Intangible Assets

Intangible assets subject to amortization include organization costs, loan closing costs, and in-force leasehold costs. Organization costs and in-force costs are being amortized using the interest method over the life of the related loan.

Income Tax

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credits carry-forward. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is established to reduce the deferred tax asset if it is more likely than not the related tax benefits will not be realized in the future.

Comprehensive Income

The Company adopted SFAS No. 130, Reporting Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements.

Revenue Recognition

License and distributor fees are earned and recognized according to the terms of each agreement.

Research and Development

Research and product development costs are expensed as incurred. The Company incurred expense of $3,626 for the 3-month period ended March 31, 2007 as compared to $ 3,898 for the 3-month period ended March 31, 2006.

Net Operating Loss Carry-forward

Income taxes are provided for the tax effects of transactions reported in the financial statements and consists of taxes currently due plus deferred taxes for operating losses that are available to offset future taxable income.

License and Distributor Agreements

The Company's license and distributor agreements provide for compensation to be paid during the first year of the agreements and eventual royalties on the sale of the products. Terms of the agreements typically commence as of the date executed and continue for a period of three years, renewable every three years.

The Company has license agreements in the following countries: Japan, India, Nigeria & Benin, Canada, Ivory Coast, Tanzania, Brazil, Vietnam and Korea.

The Company has distributor agreements in the following states in the United States: California in Orange County and Los Angeles County, Maryland, Delaware and New York in Long Island County and Queens County.

Future Commitments Per Agreements

1st Yr 2nd Yr 3rd Yr Areas (Bikes) (Bikes) (Bikes) Total ------------------- ----------------- ------------- ----------- ----------- Japan 40,000 80,000 200,000 320,000 India 50,000 90,000 200,000 340,000 Nigeria & Benin 5,000 9,000 10,000 24,000 Tanzania 1,000 2,000 3,000 6,000 Vietnam 4,000 7,000 10,000 21,000 Korea 13,000 31,000 62,000 106,000 Distributors USA CA-Orange County 1,500 3,000 5,000 9,500 CA-LA County 3,000 5,000 7,000 15,000 Maryland & Delaware 1,000 2,000 2,840 5,840 New York Long Island/Queens 1,000 2,000 3,000 6,000 ------------------------------------------------------------------------------

Reclassification

Certain account reclassifications have been made to the financial statements of the prior year in order to conform to classifications used in the current year. These changes had no impact on previously stated financial statements of the Company.

New Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 155, "Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140" ("SFAS No. 155"). The provisions of SFAS No. 155 will be effective for all financial instruments acquired, issued, or subject to a re-measurement (new basis) event occurring after the beginning of an entity's first fiscal year that begins after September 15, 2006. The fair value election provided for in paragraph 4(c) of this Statement may also be applied upon adoption of this Statement for hybrid financial instruments that had been bifurcated under paragraph 12 of Statement 133 prior to the adoption of this Statement. Earlier adoption is permitted as of the beginning of an entity's fiscal year, provided the entity has not yet issued financial statements, including financial statements for any interim period, for that fiscal year. SFAS No. 155 amends FASB SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"), and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" ("SFAS No. 140"). SFAS No. 155 resolves issues addressed in SFAS No. 133 Implementation Issue No. D1, "Application of Statement 133 to Beneficial Interests in Securitized Financial Assets". This Statement: a) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, b) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No.133, c) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, d) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and e) amends SFAS No.140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. The Company is currently evaluating the impact of adopting SFAS No. 155.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140" ("SFAS No. 156"). An entity shall adopt this Statement as of the beginning of its first fiscal year that begins after September 15, 2006. Earlier adoption is permitted as of the beginning of an entity's fiscal year, provided the entity has not yet issued financial statements, including interim financial statements, for any period of that fiscal year. The effective date of this Statement is the date that an entity adopts the requirements of this Statement. SFAS No. 156 amends SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement: a) requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations, b) requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable, c) permits an entity to choose between two subsequent measurement methods for each class of separately recognized servicing assets and servicing liabilities, d) at its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under SFAS No. 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity's exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value, and e) requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities. The Company is currently evaluating the impact of adopting SFAS No. 156.

In July 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109". FIN 48 requires that the Company recognize in the consolidated financial statements the impact of a tax position that is more likely than not to be sustained upon examination based on the technical merits of the position. The provisions of FIN No. 48 will be effective for the Company begin in the March 2007 quarter, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company is currently evaluating the impact of adopting FIN No. 48.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"). SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. The Company is currently evaluating the impact of adopting SFAS No. 157.

In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans" ("SFAS No. 158"). SFAS No. 158 provides different effective dates for the recognition and related disclosure provisions and for the required change to a fiscal year-end measurement date. Also, the effective date of the recognition and disclosure provisions differs for an employer that is an issuer of publicly traded equity securities from one that is not. For purposes of this Statement, an employer is deemed to have publicly traded equity securities if any of the following conditions is met: a) the employer has issued equity securities that trade in a public market, which may be either a stock exchange (domestic or foreign) or an over-the-counter market, including securities quoted only locally or regionally, b) the employer has made a filing with a regulatory agency in preparation for the sale of any class of equity securities in a public market, or c) the employer is controlled by an entity covered by (a) or (b). An employer with publicly traded equity securities shall initially apply the requirement to recognize the funded status of a benefit plan and the disclosure requirements as of the end of the fiscal year ending after December 15, 2006. Application as of the end of an earlier fiscal year is encouraged; however, early application shall be for all of an employer's benefit plans. The requirement to measure plan assets and benefit obligations as of the date of the employer's fiscal year-end statement of financial position (paragraphs 5, 6, and 9) shall be effective for fiscal years ending after December 15, 2008, and shall not be applied retrospectively. Earlier application is encouraged; however, early application shall be for all of an employer's benefit plans. An employer with publicly traded equity securities shall initially apply the requirement to recognize the funded status of a benefit plan (paragraph 4) and the disclosure requirements (paragraph 7) as of the end of the fiscal year ending after December 15, 2006. The Company is currently evaluating the impact of adopting SFAS No. 158.

3. ACCOUNTS RECEIVABLE

Accounts Receivable represents the balance due from the License and Distributor agreements.

03/31/2007 03/31/2006 --------------- --------------- Accounts Receivable $ 2,808,183 $ 2,344,369 Less: Allowance for Doubtful Accounts 375,000 375,000 --------------- --------------- Net Accounts Receivable $ 2,433,183 $ 1,969,369 =============== ===============

4. PROPERTY AND EQUIPMENT

Fixed assets are summarized by classifications as follows:

03/31/2007 03/31/2006 -------------- ---------------- Office Equipment $ 94,848 $ 6,725 Tools and Machinery 79,321 79,321 Automobile 34,000 34,000 Moldings 659,916 659,916 Booth for Show 137,470 137,470 Informational tapes and other promotional materials 50,000 50,000 -------------- --------------- 1,055,555 967,432 Less: Accumulated Depreciation (891,165) (848,514) -------------- --------------- $ 164,390 $ 118,918

5. RELATED PARTIES

ABL Properties Inc. (Byung Yim, President and CEO of TRB Systems International Inc., is also the President and CEO of ABL Properties Inc.) wholly owns the patents. These patents are exclusively licensed to TRB Systems International Inc. for the worldwide manufacture and sale of the Alenax products. The timing, methodology and general details of the manufacture and sales are left to TRBI, as is the design and utilization of the goods employing the technology. The rights, licensed to TRBI by ABL Properties Company, call for a payment of $200,000 during the first year of active sales, 1% royalty on annual sales to $10,000,000, 0.75% on sales over $10,000,000 but under $20,000,000, and 0.5% on all sales thereafter. And all profits gleaned from international sales to an aggregate limit of $3,325,000. ABL Properties and the Company agreed to defer payment of the $200,000 until TRB Systems Inc has suitable cash flow to meet its current needs.

Any cost incurred by TRB Systems International Inc. to maintain the patents and that calls for reimbursement by ABL according to the agreement, will be used as a credit toward the $200,000 license fees due to ABL on the first anniversary following the commencement of active bicycle sales. As of March 31, 2007, ABL Properties owes the Company $ 57,659.

During the year Byung Yim, CEO and director of the Company made loans to the Company as the need for additional capital arose. As of March 31, 2007 the outstanding amount due was $ 613,363.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable are amounts owed to a supplier. Accrued expenses also included legal and consulting expenses incurred in the development of standardized contacts, promotional materials and the filling and registration of patents. As of March 31, 2007 the accounts payable and accrued expenses were $531,638 compared to $396,887 as of March 31, 2006.

7. NOTES AND INTEREST PAYABLE

Notes payable are unsecured notes to individuals. At of March 31, 2007 the Company had notes and interest payable in the amount of $ 2, 286,006 as compared to $2,237,959 at March 31, 2006. Interest expense attributable to notes payable totaled $71,356 for the quarter ended at March 31, 2007 as compared to $70,988 at March 31, 2006.

Interest rate on the notes ranged from 10% to 24% except for a short-term loan for $12,931 that the Company paid 20% for two months.

8. CONVERTIBLE DEBT

The Company entered into three loan agreements, two for $50,000 on February 29, 2003 and one for $ 42,611 on January 17, 2003. The notes are convertible into shares of the Company's common stock at a price of $1 per share at the lenders option on December 31, 2004. The notes may be required to be repaid if the value per share at the time of conversion falls below $1, at which time the Company will have to repay the face amount of the notes plus (10%) ten percent. As of March 31, 2007 the lenders have not exercised their option, management is negotiating an extension on the notes.

9. PENDING SUITS AND JUDGMENT

As of March 31, 2007, there are outstanding judgments in the amount of $381,000 against the Company. Management asserts that negotiations have been initiated to have the amounts reduced but the outcome of such negotiations is uncertain. Management believes the company is not in the financial position to pay these amounts within one-year period and therefore classified the legal judgments payable to long term.

The outstanding judgments consist of:

Creditors/Creditors' Attorneys 2007 2006 ---------------- --------------- David, Kessler & Associates, LLC $ 44,000 $ 44,000 Sawtooth Marketing Group 56,000 56,000 Cole, Schotz, Meiser,Forman & Leonard 89,000 89,000 Bernard & Koff 192,000 192,000 ---------------- --------------- Total $ 381,000 $ 381,000

10. CAPITAL STOCK

The company is authorized to issue 30,000,000 shares at $0.001 par value share. As of March 31, 2007 the amount of voting common shares issued and outstanding are 22,783,002 and additional paid in capital of $ 3,106,489.

11. NET LOSS PER SHARE

Net loss per common share for the periods ended March 31, 2007 and 2006 is calculated using the weighted-average number of common shares outstanding and common shares equivalents during the periods.

12. COMMITMENTS AND CONTINGENCIES

12.1 Lease Commitments

The Company's has month-to-month lease for office space at $12,000 per year.

Rental expense for the three-month ended March 31, 2007 is $6,158.

13.2 Litigation

As per the Company, as of March 31, 2007, there are no material actions, suits, proceedings or claims pending against or materially affecting the Company, which if adversely determined, would have a material adverse effect on the financial condition of TRB International Systems, Inc. other than the judgments in note 9.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

We conduct our business through our wholly owned subsidiary, Alenax (Tianjing) Bicycle Corp., which engages in the business of developing, marketing, and manufacturing a line of NMT-product. For the three and nine months ended March 31, 23007, we had sales of $-0- and $203,343, respectively.

Last year, we focused on redesigning our product lines, improvement of the quality of our products, conducting product tests, including strength, durability and road tests, and focused on marketing our products. As of March 31, 2007, this process was basically completed. We started to market and sales of our products in fiscal first quarter of this year. We believe that we now have a modern, sophisticated, marketable, product line, which is ready for production and sale.

As of March 31, 2007, we have completed all phases of the product tests, and the quality of each of our products has been greatly improved. We gradually put more efforts on sales and marketing. For the three months ended March 31, 2007, we have achieved the following:

(1) We completed a new Uni-Set development of multi-function bike parts. Now if you change a BB-Set of your conventional bike to our Uni-Set, you can ride a conventional pedaling motion along with five (5) more different pedaling motion bike;

(2) We have finished samples of a new electric bike. Currently we are conducting various tests on the electric bike;

(3) We are testing the Exercise Bike for the use of health clubs. More tests are needed;

(4) We have received initial 10 exercise bikes order from Tianjing Sports Gym, which belongs to Tianjing Sports Bureau of Tianjing City for public use. Furthermore, Tianjing Sports Gym has provided us a space (23 meter x 40 meter) to show our technology to public as soon as possible for the purpose of public health care. This is very honorable to us with good reputation;

(5) We finished samples of Spinning Bike, and we are currently conducting complete tests for such type of bike.

Results of Operations

Three Months Ended March 31, 2007 and 2006

Revenues

For the thee-month periods ended March 31, 2007 and 2006, no revenues were generated from our product sales.

Operating Expenses

For the three months ended March 31, 2007, our operating expenses were $80,665 compared with $90,841 for the same period of the prior year. This decrease in operating expenses of $10,176, or 11.2%, was a result of the following items:
(i) significant decrease in overseas operating expenses, travel and meal and entertainment; and (ii) a large increase in employee salary expenses, marketing and professional fees.

Interest Expense

During the three months ended March 31, 2007 we had interest expense of $71,356 as compared to $72,918 for the same period of the previous year.

Net Loss

For the three months ended March 31, 2007, we had net loss of $152,021, or $0.01 per share, compared with net loss of $161,829, or $0.01 per share, for the same period of the last fiscal year.

Nine Months Ended March 31, 2007 and 2006

Revenues

We started to sell our Alenax bicycles in late 2006. For the nine -month period ended March 31, 2007, the revenue from our product sales was $203,343. We had no revenues for the same period of the previous year.

Cost of Goods Sold

Cost of goods sold consists of the material cost of goods sold, direct overhead, direct wages and direct depreciation expenses. For the nine months ended March 31, 2007, our cost of goods sold was $153,638, approximately 75.5% as a percentage of sales. There was no cost of goods sold for the three months ended March 31, 2006 because there were no sales for the period.

Operating Expenses

For the nine months ended March 31, 2007, our operating expenses were $318,250 as compared to $228,666 for the same period of the prior year. The significant increase ($89,584, or 39.2%) in operating expenses was largely due to the increase in overall business activities. The big contributors to the increase of operating expenses were marketing and promotion (increased by $47,554, or 242%), employee salary expense ($12,374, or 70%), research and development ($18,551, or 128%), office expenses ($44,487, or 182%), and business travel ($28,248, or 129%).

Interest Expense

For the nine months ended March 31, 2007 we had interest expense of $216,342 as compared to $213,184 for the same period of the previous year.

Net Loss

For the nine months ended March 31, 2007, we had net loss of $485,520, or $0.02 per share, compared with net loss of $439,796, or $0.01 per share, for the same period of the last fiscal year.

Liquidity and Capital Resources

Since inception, our operations have been primarily funded by equity capital, unsecured short-term loans from our directors and other individuals. At of March 31, 2007, we had notes payable and accrued interest payable in the amount of $2,286,006, convertible debts of $142,611, and borrowing from related parties of $613,363. Interest rate on the notes ranged from 10% to 24%.

For the nine months ended March 31, 2007, our operating activities used $636,566 of net cash, largely due to net loss of $485,520 and increase in accounts receivable $193,416. During the same period, our investing activities provided us $211,930 of net cash, largely due to increase in indebtedness of related parties ($156,714), and decrease in other assets ($77,245). For the same period, the financing activities provided us with $410,229 of net cash, largely by issuance of notes payable of $197,045, and increase in interest payable of $213,184. For the nine months ended March 31, 2007, our cash and cash equivalents decreased by $14,407.

As disclosed on Note 9 of our Notes to Financial Statements, we had outstanding judgment in a total of $381,000 incurred in 2001. We initiated negotiations to have the amounts reduced but the outcomes of such negotiations are uncertain. We believe that we are not in the financial position to pay these amounts within one-year period, and accordingly, we reclassified the legal judgments payable to long-term.

Because of the overall increase in our business activities, we may need to obtain additional sources of financing over the next 12 months. We may seek financing from our officers, directors, or third party individuals, either in equity or debt. There can be no assurance that any necessary additional financing will be available to us on commercially reasonable terms, if at all.

Off-balance sheet arrangements

There were no off-balance arrangements.

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. Based on the evaluation of our disclosure controls and procedures (as defined in Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) required by Securities Exchange Act Rules 13a-15(b) or 15d-15(b), our Chief Executive Officer and Chief Financial Officer has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective.

(b) Changes in internal controls. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings: None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds: None.

Item 3. Defaults Upon Senior Securities: None.

Item 4. Submission of Matters to a Vote of Security Holders: None.

Item 5. Other Information: None.

Item 6. Exhibits and Reports on Form 8-K

Exhibits:

31. Certification of CEO and CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32. Certification of CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Reports on Form 8-K:

None.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TRB Systems International Inc.

By: /s/ Byung Yim --------------------------------- Byung Yim, President, CEO and CFO Date: October 19, 2007