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 December 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 February 21, 2008: 23,699,922 shares of common stock, $0.001 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 December 31, 2007, originally filed with the Securities and Exchange Commission (the "Commission") on February 14, 2008 (the "Original Filing").

We are filing this Amendment for the purpose of restating the financial statements for the quarter ended December 31, 2007 and its accompanying notes to respond the Commission's comments dated February 5, 2008. 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 February 14, 2008 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.
Statements of Financial Position (Unaudited)
(Restated)

December 31, 2007

ASSETS

CURRENT ASSETS:

Cash................................................ $ 67,095 Accounts receivable, net of allowance for doubtful accounts 270,398 Inventory........................................... 69,154 --------------- Total Current Assets........................... 406,647 Property and equipment, net......................... 165,442 Other Assets Prepaid and other assets............................ 120,545 Deferred tax assets................................. 222,579 --------------- Total Other Assets............................ 343,124 TOTAL ASSETS........................................ $ 915,213 ==============

LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)

Current Liabilities Accounts payable and accrued liabilities............ $ 204,364 Notes and interest payable.......................... 2,404,395 Advances from a customer............................ 171,440 Convertible debts................................... 142,611 Corporation income taxes payable.................... 935 Legal judgments payable............................. 381,000 ------------- Total Current Liabilities...................... 3,304,745 Indebtedness to Related Party....................... 555,188 ------------- Total Liabilities.............................. 3,859,933 Stockholders' Equity (Deficit) Common stock, $0.001 par value, 30,000,000 shares authorized, 23,699,922 shares issued and outstanding.......... 23,700 Additional paid-in capital.......................... 3,228,810 Retained earnings (deficit)......................... (6,197,230) --------------- Total Stockholders' Equity (Deficit)........... (2,944,720) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 915,213 ===============

See notes to the financial statements

TRB SYSTEMS INTERNATIONAL, INC.
Statement of Operations - Unaudited

For the Three and Six Months Ended December 31, 2007 and 2006

(Restated)

Three Months Six Months Ended Dec. 31, Ended Dec. 31, ---------------------------- ----------------------- 2007 2006 2007 2006 ---------------------------- ----------------------- Revenue Sales......................... $ 63,317 $ 113,367 $ 71,647 $ 203,353 Cost of revenue............... 48,121 85,333 54,535 153,638 -------------- ------------ ----------- ----------- Gross Profit............... 15,196 28,034 17,112 49,705 Operating Expenses: Advertising.................... 16,728 - 16,728 - Consulting..................... 4,501 - 8,662 752 Depreciation................... 1,533 1,553 2,783 3,106 Employee salaries.............. 20,538 - 35,384 17,381 Marketing and advertising...... 8,762 29,319 49,846 60,645 Meals and entertainment........ 8,450 871 11,772 2,408 Miscellaneous.................. 1,250 610 8,965 610 Office expenses................ 9,875 22,389 24,129 55,001 Overseas operating expenses.... 20,225 - 20,225 - Public company expense......... 1,500 - 1,500 - Professional fees.............. 13,074 5,911 13,074 14,642 Rents.......................... 8,015 6,396 9,104 9,696 Research and development....... 9,573 14,710 24,015 29,378 Travel......................... 5,410 23,889 9,134 43,966 -------------- ------------ ----------- ----------- Total operating costs....... 129,434 105,648 235,321 237,585 -------------- ------------ ----------- ----------- OPERATING LOSS................. (114,238) (77,614) (218,209) (187,880) OTHER INCOME (EXPENSE) Interest income................ 150 - - 918 Bad debt expense............... (1,969,369) - (1,969,369) - Foreign currency translation... - - - (918) Interest expense............... (71,251) (70,333) (145,154) (145,619) -------------- ------------- ------------ ----------- Total Other Income & Expenses (2,040,470) (70,333) (2,114,373) (145,619) NET INCOME (LOSS).............. $ (2,154,708) $ (147,947) $(2,332,582) $ (333,499) ============== ============= ============ =========== Basic and Diluted Earnings (Loss) Per Share... $ (0.09) $ (0.01) $ (0.10) $ (0.01) ============== ============= ============ =========== Weighted Average Number of Common Shares Outstanding.... 23,699,922 23,699,922 23,699,922 23,699,922 ============== ============= ============ =========== See notes to the financial statements

TRB Systems International, Inc. Statements of Cash Flow - Unaudited For the Six Months Ended December 31, 2007 and 2006

(Restated)

2007 2006 ---------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss......................................... $ (2,332,582) $ (333,499) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation & amortization..................... 2,783 3,106 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable....... 1,969,369 (193,416) (Increase) decrease in inventory................. 3,467 (36,677) (Increase) decrease in accounts payable and accrued liabilities............................ (15,755) - --------------- -------------- Net cash used in operating activities............. (372,718) (560,486) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment................ - (22,029) Increase in prepaid and other assets.............. - (17,721) Increase indebtedness of related party............ - 13,471 --------------- ------------- Net cash provided by (used in) investing activities - (26,279) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of notes payable and accrued interest deferred 146,226 338,873 (Decrease) increase in director's loans........... - 79,288 Increase in indebtness to related parties......... 254,155 - ---------------- -------------- Net cash provided by financing activities......... 400,381 418,161 ---------------- -------------- Net increase (decrease) in cash and cash equivalents 27,663 (24,192) Cash and cash equivalents, beginning.............. 39,432 33,323 ---------------- -------------- Cash and cash equivalents, ending................. $ 67,095 $ 9,131 ================ ============== SUPPLEMENTAL CASH FLOW DISCLOSURES Cash paid during year for interest................ $ 71,251 $ 144,986 ================ ============== Income taxes paid................................. $ - $ - ================ ============== See notes to the financial statements

TRB SYSTEMS INTERNATIONAL INC.

Notes to Financial Statements
December 31, 2007
(Restated)

1. NOTE 1. 2007 RESTATEMENT

On February 17, 2008, we amended TRB Systems International Inc.'s Quarterly Report in Form10-QSB for the six-months period ended December 31, 2007, to amend and restate financial statements for the period then ended with respect to the correction of errors in previously-issued financial statements.

The only errors were write-off accounts receivable from agreements from licensees and distributors and recording as bad debt in the statement of operations.

Effects of the restatements by line item follows:

Statements of Financial Position
Statements of Operations
Statements of Cash Flows

TRB SYSTEMS INTERNATIONAL INC.
Statements of Financial Position

ASSETS

As of As of December 31, 2007 December 31, 2007 --------------------- -------------------- (Restated) (Previously Filed) CURRENT ASSETS Accounts receivable, net of allowance for doubtful accounts $ 270,398 $ 2,239,769 ------------------ ------------------ Total Current Assets 406,647 2,376,016 TOTAL ASSETS $ 915,213 $ 2,884,582 ================== ================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) STOCKHOLDERS' EQUITY (DEFICIT) Retained earnings (deficit) (6,197,230) (4,227,861) ------------------ ------------------ Total Stockholders' Equity (Deficit) (2,944,720) (975,351) ------------------ ------------------ Total Liabilities and Stockholders' Equity (Deficit) $ 915,213 $ 2,884,582 ================== ==================

TRB SYSTEMS INTERNATIONAL INC.
Statements of Operations (Restated)

Three Months Six Months Ended December 31, Ended December 31, --------------------------- ---------------------------- 2007 2007 2007 2007 (Restated) (Previously Filed) (Restated) (Previously Filed) -------------- ---------------- -------------- -------------- OTHER INCOME (EXPENSES) Bad debt expense (1,969,369) - (1,969,369) - -------------- ---------------- -------------- -------------- Total Other Income (Expenses) (2,040,470) (71,101) (2,114,373) (145,004) NET LOSS $ (2,154,708) $ (185,339) $ (2,332,582) $ (363,213) ============== ================ ============== ============== Basic and Diluted Earnings (Loss) Per Share $ (0.09) $ (0.01) $ (0.10) $ (0.02) ============== =============== ============== ============== Weighted Average Number of Common Shares Outstanding 23,699,922 23,699,922 23,699,922 23,699,922 ============== =============== ============== ==============

TRB Systems International, Inc. Statements of Cash Flow - Unaudited

Six Months Ended December 31, 2007 --------------------------------------- 2007 2007 (Restated) (Previously Filed) ------------------ -------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,332,582) $ (363,213)

2. 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. For the period from its inception to date, the Company has been a development stage enterprise, and accordingly, the operations have been directed primarily toward developing business strategies, raising capital, research and development activities, conducting testing of its products, exploring marketing channels and recruiting personnel.

3. 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.

a. Liquidity

As of December 31, 2007, the Company had cash and cash equivalents totaling $67,095 as compared to $ 9,131 at December 31, 2006. As of December 31, 2007, the Company had working capital of $ (2,898,098) compared to a working capital of $ (479,535) at December 31, 2006. The Company has outstanding judgments in the amount of $ 381,000 that is unable to pay within one-year period.

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.

b. Going Concern

The Company incurred accumulated net losses of $ 6,197,230 from the period of April 11, 1997 (Date of Inception) through December 31, 2007, has recently commenced limited operations, and is rather, still in the development stages, thus raising substantial doubt about the Company's ability to continue as a going concern. The Company may seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.

The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company's plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

c. 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.

d. 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.

e. 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.

f. 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.

g. 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.

h. Inventories

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

i. 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.

j. 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.

k. 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.

l. 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.

m. 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.

n. Revenue Recognition

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

o. 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 Countries States/Counties (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 -----------------------------------------------------------------------------------

p. Research and Development

Research and product development costs are expensed as incurred. The Company incurred expense of $24,015 for the six-months period ended December 31, 2007 as compared to $ 29,378 for the same period ended December 31, 2006.

q. 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.

r. 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 e-measurement 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 beginning 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.

4. ACCOUNTS RECEIVABLE

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

12/31/2007 12/31/2006 ----------------- -------------- Accounts Receivable $ 2,614,767 $ 2,808,183 Less: Allowance for Doubtful Accounts (2,344,369) (375,000) ----------------- -------------- Net Accounts Receivable $ 270,398 $ 2,433,183 ================= ==============

5. PROPERTY AND EQUIPMENT

Fixed assets are summarized by classifications as follows:

2007 ---------------- Office Equipment $ 43,424 Tools and Machinery 79,321 Automobile 50,947 Moldings 689,061 Booth for Show 137,470 Informational tapes and other promotional materials 50,000 ------------- 1,050,223 Less: Accumulated Depreciation (929,678) ------------- $ 120,545 =============

6. RELATED PARTY TRANSACTIONS

ABL Properties, wholly owned by Byung Yim, President, CEO of TRB Systems International, Inc., and under common control with the Company, owns the patents. These patents are exclusively licensed to TRB Systems Inc, the subsidiary (TRB) for the worldwide manufacture and sale of the Transbar Power System (TPS). The timing, methodology and general details of the manufacture and sales are left to TRB, as is the design and utilization of the goods employing the technology. The rights, licensed to TRB 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 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 December 31, 2007, ABL Properties owes the Company $ 154,101 which has been offset with corresponding liabilities.

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 December 31, 2007, the outstanding amount due was $ 555,188.

7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses also include the capitalized portion of legal and consulting expenses incurred in the development of standardized contacts, promotional materials and the filling and registration of patents, and are amortized over a sixty-month period. As of December 31, 2007 the accounts payable and accrued expenses were $ 204,364 and $ 531,638, as of December 31, 2006.

8. NOTES AND INTEREST PAYABLE

Notes payable are unsecured notes to individuals. As of December 31, 2007, the Company had notes payable in the amount of $ 1,631,840 and accrued interest payable of $ 772,555. Interest expense attributable to notes payable totaled $145,154 for the six-month period ended December 31, 2007. Interest rate on the notes ranged from zero to 24%.

9. 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 in the total amount of $ 142,611. 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 December 31, 2007 the lenders have not exercised their option, management is negotiating an extension on the notes.

10. PENDING SUITS AND JUDGMENT

As of December 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

11. CAPITAL STOCK

The company is authorized to issue 30,000,000 at $0.001 par value share. As of December 31, 2007 the amount of voting common shares issued and outstanding are 23,699,922 and additional paid in capital of $ 3,228,810.

12. NET LOSS PER SHARE

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

13. INCOME TAX

The net deferred tax asset in the accompanying consolidated balance sheet includes the following components:

2007 ----------------- Net Deferred Tax Asset $ 1,384,384 Deferred Tax Asset Valuation Allowance (1,161,805) ---------------- Net Deferred Tax Asset 222,579 ---------------- Deferred Tax Benefit $ 23,792 ---------------- 14. COMMITMENTS AND CONTINGENCIES

14.1 Lease Commitments

The Company's future annual commitments at December 31 under an operating lease for office space is as follows:

Lease ------------- 2008 16,800 2009 16,800 2010 16,800 2011 16,800 2012 16,800 ------------- Total $ 84,000

Rental expense for the 6-months periods ended December 31, 2007 and 2006 are $9,104 and $9,696, respectively.

14.2 Litigation

As per the Company, as of December 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 10.

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

This quarterly report on Form 10-QSB and the materials incorporated herein by reference contain forward-looking statements that involve risks and uncertainties. We use words such as "may," "assumes," "forecasts," "positions," "predicts," "strategy," "will," "expects," "estimates," "anticipates," "believes," "projects," "intends," "plans," "potential," and variations thereof, regarding matters that are not historical facts and are forward-looking statements. Because these statements involve risks and uncertainties, as well as certain assumptions, actual results may differ materially from those expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that they are made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We conduct our business through our wholly owned subsidiary, Alenax (Tianjin) Bicycle Corp., which develops, markets, and manufactures a line of NMT-product. For the three months ended December 31, 2007 and 2006, we had product sales of $63,317 and $113,367, respectively.

In fiscal 2006, we focused our efforts on redesigning our products, improving the quality of our products, conducting product tests, including strength, durability and road tests, and focused on marketing our products. As of December 31, 2007, this process was basically completed. In fiscal first quarter of 2007, we started to market and sales of our products. We believe that we now have a modern, sophisticated, marketable, product line, which is ready for production and sale.

For the quarter ended December 31, 2007, we have completed our development of a new type of Alenax Uni-Set bicycle, on which Magnesium material is used especially designing for reducing weigh and for high-end market.

As of December 31, 2007, we have basically completed all phases of the product tests, and the quality of each of our products has been greatly improved. Accordingly, we gradually put more efforts on sales and marketing side. In October 2007, we attended The Tokyo Bike Show, and in November 2007, we attended the Shen Zhen Bike Show. The results were satisfied. All floor samples were sold.

Results of Operations

For the Three Months Ended December 31, 2007 Compared to the Same Period of
2006

Revenues

For the three months ended December 31, 2007, we have product sales of $63,317, as compared to $113,367 for the same period of the last year. The decrease in sales was that no big orders were received for the three months ended December 31, 2007.

Cost of Revenues

Cost of goods sold consists primarily of the material cost of goods sold, direct overhead, direct wages, and direct depreciation expense. For the three months ended December 31, 2007 and 2006, our cost of revenues was $48,121 and $85,333, respectively, approximately 76.0% and 75.2% of the revenues.

Operating Costs and Expenses

For the three months ended December 31, 2007, our total operating costs and expenses increased by $23,786, or approximately 22.5%, from $105,648 in 2006 to $129,434 in 2007. The increase in operating expenses was largely due to the increase in marketing and advertising, salary expenses, and professional fees.

Other Income and Expenses

Given the lack of fulfillment on the Company's part in regard to the related agreements and the substantial passage of time, in February 2008, the Company determined $1,969,369 of accounts receivable were uncollectible. Thus, for the three months ended December 31, 2007, our total other expenses were $2,047,470, of which $1,969,369 of written-off of accounts receivable to bad debt expense and $71,251 was interest expense. In the same period of the previous year, our total other expenses were $70,333, all of which was interest expense.

Net Loss

Net loss for the three months ended December 31, 2007 and 2006 were $2,154,708, or $0.09 per share, and $147,947, or $0.01 per share, respectively.

For the Six Months Ended December 31, 2007 Compared to the Same Period of
2006

Revenues

For the six months ended December 31, 2007, our product sales were $71,647, as compared to $203,343 for the same period of the last year. The decrease in sales was that no big orders were received for the six months ended December 31, 2007.

Cost of Revenues

Cost of goods sold consists primarily of the material cost of goods sold, direct overhead, direct wages, and direct depreciation expense. For the six months ended December 31, 2007 and 2006, our cost of revenues was $54,535 and $153,638, respectively, approximately 76.1% and 75.5% of the sales.

Operating Costs and Expenses

For the six months ended December 31, 2007, our total operating costs and expenses decreased by 1.0%, from $237,585 in 2006 to $235,171 in 2007. The slight decrease in our operating expenses was largely due to the decrease in travel expenses.

Other Income and Expenses

Given the lack of fulfillment on the Company's part in regard to the related agreements and the substantial passage of time, in February 2008, the Company determined $1,969,369 of accounts receivable were uncollectible. Thus, for the six months ended December 31, 2007, our total other expenses were $2,114,373, of which $1,969,369 of written-off of accounts receivable to bad debt expense and $145,154 was interest expense. In the same period of the previous year, our total other expenses were $145,619, all of which was interest expense.

Net Loss

Net loss for the six months ended December 31, 2007 and 2006 were $2,332,582, or $0.10 per share, and $333,499, or $0.01 per share, respectively.

Liquidity and Capital Resources

Since inception, our operations have been primarily funded by equity capital and unsecured short-term loans from directors and shareholders.

As of December 31, 2007, the Company's cash and cash equivalents balance was $67,095.

For the six months ended December 31, 2007, net cash was used in operating activities of $372,718, largely due to our net loss of $2,332,582, and decrease in accounts payable and accrued liabilities of $1,943,614, and partially offset by increase in depreciation of $15,533 and decrease in inventory of $3,467.

During the six-month period ended December 31, 2007, we have no investing activities. During the six-month period ended December 31, 2007, our financing activities provided us with net cash of $400,381, of which $146,226 were provided by issuance of notes and accrued interest deferred, and $254,155 were provided by the increase in indebtness to related parties.

As disclosed in note 9 of our Notes to Consolidated Financial Statements, as of December 31, 2007, we had outstanding judgment in a total of $381,000 incurred in 2000-2001. We initiated negotiations to have the amounts reduced but the outcomes of such negotiations are uncertain.

We incurred losses during the past years. We will continue to seek additional funding to finance our operations. The amount and timing of such capital transactions is not yet known and will depend largely on our operating needs. Our ability to secure additional funding is uncertain, as is the financial effect any such funding may have on our capital structure or operating results.

Off-balance Sheet Arrangements

As of December 31, 2007, there were no off-balance sheet arrangements.

ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and principal financial officer of our disclosure controls and procedures (as defined in Rule 3a-15(e) and Rule 5d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and principal financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.

(b) Changes in internal controls

There was no change in our internal controls or in other factors that could affect these controls during our last fiscal year that has materially affected, or is 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:

(a) On October 5, 2007, the Company filed a Current Report on Form 8-K, under Item 4.02, to report non-reliance on previously issued financial statements for the quarters ended December 31, 2006 and March 30, 2007.

(b) On October 5, 2007, the Company filed a Current Report on Form 8-K, under Item 4.01, to report changes in the Company's certifying accountants.

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 (Principal Executive Officer & Principal Financial Officer) Date: February 21, 2008