Trunkbow International Holdings (NASDAQ:TBOW)

TRUNKBOW INTERNATIONAL HOLDINGS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Management Discussion and Analysis

Net revenues were $19.86 million for the year ended December 31, 2013, compared to $34.77 million for the year ended December 31, 2012. The decrease in net revenue was $14.91 million or 42.9%, mainly caused by the reduction of software sales and system integration. Software sales decreased $11.15 million, or 44.5%, from $25.04 million for the year ended December 31, 2012 to $13.90 million for the year ended December 31, 2013, due to the decrease in MVAS related to phone call and SMS management and mobile business card and decrease in MPS software sales. System integration revenues decreased $2.62 million, from $5.90 million for the year ended December 31, 2012 to $3.27 for the year ended December 31, 2013, due to decrease in MVAS systems related to mobile newspaper, phone call and SMS management. Shared revenue decreased $1.34 million, or 33.3%, from $4.01 million for the year ended December 31, 2012 to $2.68 million for the year ended December 31, 2013, caused by less revenue shared from mobile payment. Maintenance service revenue decreased $0.13 million, or 26.4%, from $0.51 million for the year ended December 31, 2012 to $0.37 million for the year ended December 31, 2013, mainly due to less services provided to the carrier on network maintaining.

Revenue from MVAS decreased $9.25 million or 42.7% to $12.39 million for the year ended December 31, 2013, compared with $21.64 million from the year ended December 31, 2012. The decrease in MVAS revenue was primarily caused by the reduction on MVAS software sales related to phone call and SMS management and mobile business card. Revenue from our MPS offerings decreased 43.3% to $7.83 million for the year ended December 31, 2013, compared with $13.82 million for the year ended December 31, 2012. The decrease in MPS revenue was caused by the MPS software sales. For the year ended December 31, 2013, MVAS and MPS accounted for 61.3% and 38.7% of gross revenues, respectively, compared to 61.0% and 39.0% for the year ended December 31, 2012.

BEIJING, April 15, 2014 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of mobile payment solutions and mobile value added services in the PRC, today announced the completion of the merger (the "Merger") contemplated by the previously announced Agreement and Plan of Merger (the "Merger Agreement"), dated December 10, 2013, by and among the Company, Trunkbow Merger Group Limited ("Parent") and Trunkbow International Merger Sub Limited ("Merger Sub"). As a result of the Merger, Merger Sub merged with and into the Company, with the Company continuing as the surviving company after the Merger as a wholly owned subsidiary of Parent.

Under the terms of the Merger Agreement, which was approved by the Company's stockholders at a special meeting held on April 14, 2014, at the effective time of the Merger (the "Effective Time"), each share of Company common stock issued and outstanding immediately prior to the Effective Time was converted into the right to receive US$1.46 in cash without interest, except for the shares of Company common stock (i) held by the Company as treasury stock or (ii) owned directly or indirectly by Parent, Merger Sub or any wholly owned subsidiary of the Company immediately prior to the Effective Time, including each share of Company common stock contributed to Parent by Dr. Wanchun Hou and Mr. Qiang Li in accordance with a contribution agreement entered into by Parent, Dr. Wanchu Hou and Mr. Qiang Li, which were cancelled without receiving any consideration.

Stockholders entitled to the merger consideration will receive a letter of transmittal and instructions on how to surrender their stock certificates in exchange for the merger consideration, and should wait to receive the letter of transmittal before surrendering their stock certificates.

The Company requested that trading of its shares of common stock on NASDAQ Stock Market LLC (the "NASDAQ") be suspended and that the NASDAQ file a Form 25 with the Securities and Exchange Commission (the "SEC") to delist and deregister the shares of Company common stock. The Company intends to terminate its reporting obligations under the Securities Exchange Act of 1934, as amended, by promptly filing a Form 15 with the SEC. The Company's obligation to file with the SEC certain reports and forms will be suspended immediately as of the filing date of the Form 15 and will cease once the deregistration becomes effective.

INTRODUCTORY NOTE

On April 14, 2014, Trunkbow International Holdings Limited (the “Company”), completed its merger (the “Merger”) with Trunkbow International Merger Sub Limited (“Merger Sub”), a Nevada corporation and a wholly owned subsidiary of Trunkbow Merger Group Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands (“Parent”), pursuant to the terms of the previously announced Agreement and Plan of Merger, dated December 10, 2013 (the “Merger Agreement”), by and among the Company, Parent and Merger Sub. As a result of the Merger, the Company becomes a wholly owned subsidiary of Parent.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information in Item 5.01 below is incorporated herein by reference.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On April 14, 2014, in connection with the completion of the transactions contemplated by the Merger Agreement, including the Merger, the Company notified NASDAQ Stock Market LLC (the “NASDAQ”) of its intent to remove the shares of Company common stock from listing and requested the filing of a delisting application on Form 25 with the Securities and Exchange Commission (the “SEC”) in order to delist and deregister the shares of Company common stock. The Company will file with the SEC a Form 15 under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), requesting the deregistration of the shares of Company common stock and the suspension of the Company’s reporting obligations under Sections 13 and 15(d) of the Exchange Act.

Item 3.03 Material Modification to Rights of Security Holders.

At the effective time of the Merger (the “Effective Time”), each share of Company common stock issued and outstanding immediately prior to the Effective Time was converted into the right to receive US$1.46 in cash without interest, except for the shares of Company common stock (i) held by the Company as treasury stock or (ii) owned directly or indirectly by Parent, Merger Sub or any wholly owned subsidiary of the Company immediately prior to the Effective Time, including each share of Company common stock contributed to Parent by Dr. Wanchun Hou and Mr. Qiang Li (collectively, the “Rollover Shares”) in accordance with a contribution agreement entered into by Parent, Dr. Wanchu Hou and Mr. Qiang Li, which were cancelled without receiving any consideration.

Item 5.01 Changes in Control of Registrant.

The information contained in the Introductory Note and Item 5.02 below is incorporated herein by reference.

On April 14, 2014, Parent consummated the acquisition of 100% of the outstanding shares of Company common stock through the Merger. The Company is the surviving corporation in the Merger and is a wholly owned subsidiary of Parent.

The aggregate consideration paid in connection with the Merger was approximately US$53.74 million. The consideration was funded through a combination of (i) the contribution of 16,156,983 Rollover Shares (valued at approximately US$23.59 million based on the merger consideration) and (ii) the equity financing of US$30.15 million provided by Dr. Wanchu Hou and Mr. Qiang Li.

The description of the Merger or the Merger Agreement contained in this Current Report does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement. A copy of the Merger Agreement was attached as Exhibit 2.1 to a Current Report on Form 8-K filed with SEC on December 10, 2013 and is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Agreements of Certain Officers.

In accordance with the terms of the Merger Agreement and effective as of April 14, 2014, Dr. Kokhui Tan, Dr. Tingjie Lv, Mr. Zhaoxing Huang, Mr. Jihong Bao, Mr. Xin Wang, Mr. Regis Kwong, Ms. Iris Geng and Mr. Dong Li resigned as members of the board of directors of the Company. As of the Effective Time, Dr. Wanchun Hou and Mr. Qiang Li remain as the directors of the Company.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

In connection with the consummation of the Merger, the Company’s Articles of Incorporation and Bylaws were amended, effective April 14, 2014. Copies of the Company’s Amended Articles of Incorporation and Bylaws are attached as Exhibit 3.1 and 3.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

BEIJING, April 14, 2014 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of mobile payment solutions and mobile value added services in the PRC, today announced that, at a special meeting of the stockholders of the Company held today, the Company's stockholders voted in favor of the proposal to adopt the previously announced Agreement and Plan of Merger (the "Merger Agreement"), dated December 10, 2013, by and among the Company, Trunkbow Merger Group Limited ("Parent") and Trunkbow International Merger Sub Limited ("Merger Sub"), pursuant to which Merger Sub will be merged with and into the Company, with the Company continuing as the surviving company after the merger as a wholly owned subsidiary of Parent (the "Merger"). The Merger Agreement was approved by approximately 81.7% of the outstanding shares of Company common stock and approximately 67.5% of the outstanding shares of Company common stock (excluding the shares of Company common stock held by Dr. Wanchun Hou and Mr. Qiang Li and their respective affiliates), satisfying the voting requirements to adopt the Merger Agreement.

The parties currently expect to complete the Merger as soon as possible, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement. If completed, the Merger will result in the Company becoming a privately-held company and the common stock of the Company will no longer be listed on the NASDAQ Global Market.

Item 5.07 Submission of Matters to a Vote of Security Holders.

On April 14, 2014, Trunkbow International Holdings Limited (the “Company”) convened its special meeting of stockholders (the “Special Meeting”). The purposes of the Special Meeting, as described in detail in the Company’s definitive proxy statement dated March 10, 2014, as supplemented by a supplement dated April 7, 2014, (the “Proxy Statement”), were to consider proposals (i) to adopt the Agreement and Plan of Merger, dated as of December 10, 2013 (as it may be amended from time to time, the “Merger Agreement”), among the Company, Trunkbow Merger Group Limited, a business company with limited liability incorporated under the laws of the British Virgin Islands (“Parent”), and Trunkbow International Merger Sub Limited, a Nevada corporation and a wholly owned subsidiary of Parent (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Parent (such proposal, the “Merger Proposal”); and (ii) to approve the adjournment of the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement (such proposal, the “Adjournment Proposal”).

The total number of shares of Company common stock present in person or by proxy was equal to approximately 82.7% of the outstanding shares of Company common stock entitled to vote, thereby constituting a quorum for the purpose of the Special Meeting.

The results of the vote for each proposal were as follows:

Proposal 1 – the Merger Proposal

The votes in favor of the Merger Proposal were sufficient to approve the Merger Proposal.

Proposal 2 – the Adjournment Proposal

The votes in favor of the Adjournment Proposal were sufficient to approve the Adjournment Proposal.

BEIJING, March 10, 2014 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of mobile payment solutions and mobile value added services in the PRC, today announced that it has called a special meeting of its stockholders (the "Special Meeting"), to be held on April 14, 2014, at 10:00 a.m.(Beijing time), at the Company's executive offices, Unit 1217-1218, 12F of Tower B, Gemdale Plaza No. 91 Jianguo Road, Chaoyang District, Beijing, People's Republic of China, to consider and vote on the proposal to adopt the previously announced Agreement and Plan of Merger (the "Merger Agreement"), dated December 10, 2013, by and among the Company, Trunkbow Merger Group Limited ("Parent") and Trunkbow International Merger Sub Limited ("Merger Sub").

Pursuant to the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Company with the Company as the surviving corporation and becoming a wholly owned subsidiary of Parent (the "Merger"). If completed, the Merger will result in the Company becoming a privately held company and the shares of common stock of the Company will no longer be listed on the NASDAQ Global Market. The Company's board of directors, acting upon the unanimous recommendation of the special committee, approved the Merger Agreement and the Merger and resolved to recommend that the Company's stockholders vote to adopt the Merger Agreement.

BEIJING, Dec. 10, 2013 /PRNewswire-FirstCall/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that it expects net income for the full year of 2013 to be in the range of $7.2 million to $7.8 million, with the second half of 2013 representing a substantial turnaround as compared to the first half of 2013

BEIJING, Dec. 10, 2013 /PRNewswire-FirstCall/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of mobile payment solutions and mobile value added services in the PRC, today announced that it has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Trunkbow Merger Group Limited ("Parent"), a business company with limited liability incorporated under the laws of the British Virgin Islands and wholly owned by Dr. Wanchun Hou, chairman of our board of directors, and Mr. Qiang Li, our chief executive officer and director, and Trunkbow International Merger Sub Limited ("Merger Sub"), a Nevada corporation and a wholly owned, direct subsidiary of Parent, pursuant to which Parent will acquire the Company for US$1.46 per share of the Company's common stock (a "Share") without interest (the "Merger Consideration"). The Merger Consideration represents a 24.8% premium over the closing price on November 1, 2012, the last trading day prior to the Company's announcement on November 2, 2012 that it had received a "going private" proposal, and a 48.6% premium over the 30-trading day volume weighted average price as of the same date.

Pursuant to the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Company with the Company as the surviving corporation and becoming a wholly owned subsidiary of Parent (the "Merger"). At the effective time of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive US$1.46 in cash without interest, except for the Shares (i) held by the Company as treasury stock or (ii) owned directly or indirectly by Parent, Merger Sub or any wholly owned subsidiary of the Company immediately prior to the time at which the Merger becomes effective, including each Share to be contributed to Parent by Dr. Wanchun Hou and Mr. Qiang Li (collectively, the "Rollover Shares") in accordance with a contribution agreement entered into by Parent, Dr. Wanchu Hou and Mr. Qiang Li, which will be cancelled without receiving any consideration.

Dr. Wanchun Hou and Mr. Qiang Li currently beneficially own approximately 43.9% of the Company's Shares. Following the effective time of the Merger, Parent will be beneficially owned by the Dr. Wanchun Hou and Mr. Qiang Li.

The Company's board of directors, acting upon the unanimous recommendation of the special committee, approved the Merger Agreement and the Merger and resolved to recommend that the Company's stockholders vote to adopt the Merger Agreement and approve the Merger. The special committee, which is comprised solely of independent directors unrelated to any of Parent, Merger Sub, Dr. Wanchun Hou and Mr. Qiang Li or any of the management members of the Company, negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

The Merger contemplated by the Merger Agreement is subject to customary closing conditions, including, but not limited to, adoption of the Merger Agreement by the affirmative vote of both (i) the holders of a majority of the Shares and (ii) holders of a majority of the Shares (excluding the Rollover Shares).

Parent has delivered to the Company an executed equity commitment letter pursuant to which Dr. Wanchun Hou and Mr. Qiang Li have committed, on a joint and several basis, to invest or cause to be invested, in Parent the cash amount of US$30,150,000. Parent and Merger Sub agreed to cause Dr. Wanchun Hou and Mr. Qiang Li to deposit US$30,150,000 (the "Escrow Amount") in cash into a designated interest-bearing escrow account within two months after the date of the Merger Agreement, which will be jointly controlled by the Company, Parent, Dr. Wanchun Hou and Mr. Qiang Li until the earlier of the closing date of the Merger and the date on which the Merger Agreement is validly terminated. At or prior to the effective time of the Merger, the Escrow Amount shall be used to fund the equity financing pursuant to the terms and conditions of the equity commitment letter and released into the account of an exchange agent for the benefit of the Company's stockholders.

The Company will call a meeting of its stockholders for the purpose of voting on the adoption of the Merger Agreement as soon as practicable. If completed, the Merger will, under laws of the State of Nevada, result in the Company becoming a privately held company and the Shares would no longer be listed on the NASDAQ Global Market.

Third Quarter 2013 Financial Results

• Gross revenues were $6.2 million, compared with $9.0 million in the third quarter of 2012.
• Net income was $4.1 million, or $0.11 per basic and diluted share, compared with $3.2 million, or $0.09 per basic and diluted share in the third quarter of 2012.

To date, no decisions have been made with respect to the Company's response to the going-private proposal previously announced on November 2, 2012. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company will provide relevant updates with respect to the going-private transaction or any other transaction as appropriate.

Second Quarter 2013 Financial  Results

• Gross revenue in the second quarter of 2013 was $6.3 million, compared with gross revenue of $6.0 million in the same period a year ago.
• Gross profit in the second quarter of 2013 totaled $3.0 million, compared with $5.1 million in the second quarter of 2012. As a percentage of net revenue, gross margin was 48.7% in the second quarter of 2013, compared with 87.5% in the year-ago period.
• Net loss attributable to Trunkbow was $(1.4) million in the second quarter of 2013, compared with net income of$2.3 million in the second quarter of 2012. Loss per basic and diluted share in the second quarter of 2013 was$(0.04), based on basic and diluted shares outstanding of 36.8 million. This compares with earnings per basic and diluted share of $0.06, based on basic and diluted shares outstanding of 36.8 million in the year-ago period.

BEIJING, July 2, 2013 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that on June 28, 2013, it received a letter from the Nasdaq Stock Market stating that, based upon the closing bid price for the previous 30 consecutive business days, the Company no longer meets the requirement set forth in Nasdaq Rule 5550(a)(2), which requires listed securities to maintain a bid price of $1.00 per share (the "Minimum Bid Price Rule") .

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided with a period of 180 calendar days, or until December 26, 2013, to regain compliance with the Minimum Bid Price Rule. The Company may regain compliance with the Minimum Bid Price Rule if the bid price of its common shares closes at or above $1.00 per share for a minimum of ten consecutive business days at any time prior to December 26, 2013.

The Company intends to evaluate available options to resolve the deficiency and regain compliance with the Minimum Bid Price Rule.

First Quarter 2013 Fincancial Results

• Gross revenue in the first quarter of 2013 was $1.1 million, compared with gross revenue of $6.8 million in the same period a year ago.
• Gross profit in the first quarter of 2013 totaled $0.2 million, compared with $5.3 million in the first quarter of 2012. As a percentage of net revenue, gross margin was 22.6% in the first quarter of 2013, compared with 80.0% in the year-ago period.
• Net loss attributable to Trunkbow was $(1.5) million in the first quarter of 2013, compared with net income of $2.2 million in the first quarter of 2012. Earnings (loss) per basic and diluted share in the first quarter of 2013 were $(0.04) each, based on basic and diluted shares outstanding of 36.8 million. This compares with $0.06 per basic and diluted share, based on basic and diluted shares outstanding of 36.8 million in the year-ago period.

BEIJING, May 7, 2013 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that the Company received a notice from the NASDAQ Stock Market, Inc. ("NASDAQ") indicating that the Company has regained compliance with the NASDAQ Listing Rule 5250(c)(1) following the filing of its Annual Report on Form 10-K for the year ended December 31, 2012 (the "Annual Report") with the U.S. Securities & Exchange Commission ("the SEC") on May 2, 2013.

Additionally, the Company was informed that it has satisfied NASDAQ's request for additional information with respect to the Company's auditing issues related to customer confirmations, inventory and equipment and its shares resumed trading today on the NASDAQ Capital Market.

"We are pleased that we have completed the filing of our 2012 Annual Report, regained compliance with NASDAQ's continued listing requirements and satisfied their request for additional information, allowing for the resumption of trading in our shares," said Mr. Qiang Li, Chief Executive Officer of Trunkbow. "I would like to thank the members of our finance team and our audit partners for their efforts to resolve these matters quickly and with no disruption to our business, and we look forward to updating the investment community on our business development efforts when we report first quarter 2013 results."

BEIJING, April 22, 2013 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that on April 18, 2013, the Company received a notice (the "Notice") from the NASDAQ Stock Market, Inc. ("NASDAQ") indicating that the Company is no longer in compliance with the NASDAQ Listing Rule 5250(c)(1) due to the Company's inability to timely file its Annual Report on Form 10-K for the year ended December 31, 2012 (the "Annual Report") with the U.S. Securities & Exchange Commission ("the SEC"). NASDAQ had previously halted trading in the Company's shares, on April 17, 2013.

The trading halt relates to NASDAQ's request for further information regarding the Company's inability to timely file its Annual Report on Form 10-K (with the U.S. Securities & Exchange Commission for the year ended December 31, 2012. On April 2, 2013, the Company filed a notification of late filing pursuant to Rule 12b-25 with the SEC, giving the Company until April 16, 2013 to file its Annual Report. However, the Company was unable to file its Annual Report during the 12b-25 extension period.

Following the imposition of the trading halt, NASDAQ elected to exercise its discretionary authority under the Listing Rule 5101 to require the Company to submit a plan of compliance regarding the filing of its Annual Report by May 2, 2013. In connection with the trading halt, NASDAQ has requested the Company to provide certain information with respect to the Company's auditing issues related to customer confirmations, inventory and equipment. The Company intends to submit such information and its plan of compliance by May 2, 2013. Upon receipt of this plan, NASDAQ may, at its discretion, grant the Company a further extension to complete the filing of its Annual Report and regain compliance with continued listing requirements.

Fourth Quarter 2012 Results

Gross revenue in the fourth quarter of 2012 was $13.6 million, an increase of 40.2% year-over-year, compared with gross revenue of $9.7 million in the same period a year ago. The increase in gross revenue was primarily attributable to the growth of software sales. Revenue from MVAS increased $4.5 million, or 302.1%, to $6.0 million for the fourth quarter of 2012, compared with $1.5 million in the same period of 2011. The increase in MVAS revenue was primarily driven by the growth on MVAS software sales related to phone call and SMS management, mobile business card, color numbering and number change notification. Revenue from the Company's MPS offerings decreased 6.9% to $7.7 million for the fourth quarter of 2012, compared with $8.2 million in the same period of 2011. The decrease in MPS revenue was attributable to reduction of the MPS software sales.

Cost of revenue in the fourth quarter of 2012 was $1.1 million, compared with $1.3 million in the same period of 2011. The decrease in cost of revenue was primarily attributed to reduction in the system integration, which consumed significant hardware costs.

Gross profit in the fourth quarter of 2012 totaled $12.2 million, compared with $8.3 million in the fourth quarter of 2011. As a percentage of net revenue, gross margin was 91.5% in the fourth quarter of 2012, compared with 86.7% in the year-ago period. The year-over-year improvement in gross margin was attributable to the increase of software sales and decrease of revenues from system integration, which involves significantly higher hardware costs.

Net income attributable to Trunkbow was $5.0 million in the fourth quarter of 2012, compared with $4.8 million in the fourth quarter of 2011. Earnings per basic and diluted share in the fourth quarter of 2012 were $0.14 each, based on basic and diluted shares outstanding of 36.8 million. This compares with $0.13 per basic and diluted share based on basic and diluted shares outstanding of 36.8 million and 37.0 million, respectively, in the year-ago period.

BEIJING, November 2, 2012 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that its board of directors has received a preliminary non-binding proposal letter, dated November 2, 2012, from Hou Wanchun, Chairman of the board of directors of the Company, and Li Qiang, Chief Executive Officer and a director of the Company (together, the "Consortium Members"), that proposes a "going-private" transaction involving the acquisition of all of the outstanding shares of the Company's common stock (the "Shares") not beneficially owned by the Consortium Members at a price of US$1.46 per Share in cash (the "Acquisition").

According to the proposal letter, the Acquisition is intended to be financed with a combination of debt and equity capital. A copy of the proposal letter is attached hereto as Exhibit A.

The Company's board of directors has formed a special committee of independent directors (the "Special Committee") consisting of Dr. Tan Kokhui, Dr. Lv Tingjie, and Mr. Huang Zhaoxing to consider the Acquisition. The Special Committee intends to retain financial, legal and other advisors to assist it in its review of the Acquisition.

The Company cautions its shareholders and others considering trading in its securities that the board of directors has just received the non-binding proposal from the Consortium Members and no decisions have been made with respect to the Company's response to the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to the Acquisition or any other transaction, except as required under applicable law.

BEIJING, October 24, 2012 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that it has revised its full-year 2012 net income guidance to approximately $17.0 million from $23.0 million due to the revised timing of customer orders that are now expected to be completed in the first half of 2013.

"Our business remains strong and we are confident in our growth prospects. The second phases of two large-scale cloud computing projects, which we had expected to recognize in the fourth quarter of 2012, have been temporarily delayed due to our customers' internal timeline adjustments. We now expect to realize these projects in the first half of 2013," said Mr. Qiang Li, CEO of Trunkbow. "In addition to our cloud computing projects, we expect a significant ramp in MPS activity as we leverage our first-mover advantage and technological superiority to capture new opportunities in the nascent mobile payment market in China.

"We are making important progress in our merchant and subscriber acquisition initiatives and continue to strengthen the foundation for growth over the long-term by transitioning from an infrastructure developer to a full solutions provider and transaction processor. Recent product development initiatives have gained us entry into new market segments, including banking and credit cards, location-based mobile couponing and hosted services. These service portfolio enhancements have helped us build upon the core value of MPS as a simple, convenient payment method and turn it into an important customer engagement tool for merchants. We are also increasing the value proposition for consumers as we make the technology into a platform through which consumers can not only make purchases, but safely and effectively manage their digital lives," Mr. Li concluded.

BEIJING, October 4, 2012 /PRNewswire/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Services ("MVAS") in the PRC, today announced that on October 2, 2012, it received a letter from the Nasdaq Stock Market stating that, based upon the closing bid price for the previous 30 consecutive business days, the Company no longer meets the requirement set forth in Nasdaq Rule 5550(a)(2), which requires listed securities to maintain a bid price of $1.00 per share (the "Minimum Bid Price Rule"). The Nasdaq letter has no immediate effect on the listing of the Company's common shares.

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided with a period of 180 calendar days or until April 1, 2013, to regain compliance with the Minimum Bid Price Rule. The Company may regain compliance with the Minimum Bid Price Rule if the bid price of its common shares closes at least $1.00 per share or more for a minimum of ten consecutive business days at any time prior to April 1, 2013.

The Company intends to evaluate available options to resolve the deficiency and regain compliance with the Minimum Bid Price Rule.

"We expect to continue to ramp our merchant acquisition efforts and expand our relationships with financial and mobile industry leaders to solidify our leading position in the MPS arena," said Mr. Qiang Li, CEO of Trunkbow. "Since launching our m-commerce applet with China UnionPay in January, we have signed over 130 merchants, many of whom are expected to roll out their Trunkbow-UnionPay powered mobile apps in the fourth quarter. We believe that continued adoption of our MPS technology by merchants, banks and consumers will support strong growth in both recurring revenue and profitability as we shift to a transaction-centric model, which we expect will provide us with greater visibility and significantly improve our operating cash flow over the long-term."

Second Quarter and Recent Financial and Business Highlights

• Gross revenue was $6.0 million, compared with $9.1 million in the second quarter of 2011.
  • MPS gross revenue more than doubled, from $0.5 million in the second quarter of 2011 to $1.2 million in the second quarter of 2012.
  • MVAS gross revenue declined to $4.8 million, compared with $8.6 million a year ago.
• Gross profit for the quarter was $5.1 million, compared with $5.9 million in the second quarter of 2011; quarterly gross margin improved to 87.5%, compared with 66.1% in the second quarter of 2011.
• Net income totaled $2.3 million, or $0.06 per diluted share, compared with $8.0 million, or $0.21 per diluted share in the second quarter of 2011. Net income for the three months ended June 30, 2011 included government grants totaling approximately $4.7 million, compared with $0.1 million in government grant income in the second quarter of 2012.
• As of June 30, 2012, cash and cash equivalents totaled $1.8 million.
• Collected approximately $3.4 million of outstanding accounts receivable as of August 14, 2012.
• Reiterated full-year 2012 net income guidance of $23 million, representing 36% growth over 2011.
• Signed approximately 100 merchants for implementation of Trunkbow-UnionPay mobile applet system. Mobile apps containing this payment functionality are expected to launch in the second half of 2012.
• Completed development of Online-to-Offline Payment System with China UnionPay and began rolling out the platform to merchants in Shandong Province.
• Began development of cloud-based MPS services through partnership with experienced operators to offer hosted mobile payment services for small- and medium-sized businesses.
  • Signed partnership with Shanghai Telecommunications Engineering to construct and operate a cloud data center located in Shanghai, China.
  • Signed framework agreement with China Communications Services Corporation to construct and operate a cloud data center located in Guangzhou, China.

"The second quarter was highlighted by the significant year-over-year growth in our MPS business, as we began transitioning our business model from one-time, platform-centric sales to recurring revenue based on revenue sharing and transaction processing," said Mr. Qiang Li, Chief Executive Officer of Trunkbow. "We currently have over 4,700 merchant partners using our POS-based MPS solution, and continue aggressively marketing our technology in an effort to expand that merchant base. Moreover, our cooperation with China UnionPay, which we launched at the start of the year, is accelerating. Through the first half of 2012, approximately 100 merchants signed on to use the Trunkbow-UnionPay MPS applet, with these Trunkbow-powered mobile apps scheduled to launch beginning in the third quarter. This early success, coupled with the successful merchant acquisition efforts through our carrier partners, positions us for a significant second half increase in shared revenue.

"In addition to the immediate impact of this business model transition, we are creating longer-term value for merchants through the expansion of our technology portfolio. Our recent partnerships in connection with the cloud data center business will substantially expand our addressable market through the offering of a cost effective, customizable, off-the-shelf MPS solution for online and offline transactions. This partnership will bring our MPS technology to a much larger universe of small- and medium-sized retailers, enabling us to quickly expand our transaction processing business, while also providing an immediate and predictable revenue stream through shared hosting fees. Construction on the facility is underway and we expect to commence operations in Guangzhou by the end of this year. With an estimated 56 million small- and medium-sized merchants in China, we believe that the hosted services model has tremendous growth potential. We have invested a great deal of time and effort in the development of our MPS technology, and I am pleased that we are beginning to see the results of this work."

BEIJING, July 6, 2012 /PRNewswire-Asia/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in China, today announced that the independent registered public accounting firm Holtz Rubenstein Reminick LLP ("HRR") has completed its review and audit of the Company's consolidated financial statements for the year ended December 31, 2009. Trunkbow has filed an amended 2010 annual report on Form 10-K/A with the U.S. Securities and Exchange Commission (the "SEC") containing HRR's audit report for the year ended December 31, 2009. There were no significant changes to the financial statements originally audited by the Company's outside auditors, Bernstein & Pinchuk LLP ("B&P").

In reviewing the Company's Annual Report on Form 10-K for the year ended December 31, 2010, the SEC informed the Company that because its Chief Financial Officer, Ms. Alice Ye, was previously employed by B&P, and had performed more than 10 hours of work on the Trunkbow audit for the year ended December 31, 2008, it did not consider B&P "independent" as defined in the SEC's rules regarding auditor independence. The Company disagreed, arguing that the hiring of Ms. Ye was in accordance with an exemption for such situations involving emergency or unusual circumstances approved by the Company's board of directors or audit committee, and noting the limited work performed by Ms. Ye and her status as a non-partner in B&P at the time.

In the interests of investor transparency and to avoid a complicated on-going regulatory process in recognition of the SEC Staff's position on this matter, the Company engaged HRR to review and issue a new audit report on its consolidated financial statements for the year ended December 31, 2009.

"With our business positioned for significant growth in the second half of 2012, we have placed a great emphasis on transparency and credibility to both our shareholders and U.S. regulators," said Mr. Qiang Li, CEO of Trunkbow. "This was a simple disagreement between our Company and the SEC on the technical application of independence requirements. We are pleased that the re-audit by HRR was completed without the need for any restatements or financial adjustments. There was no disruption to our business or our progress toward Trunkbow's long-term strategic objectives. We have a number of compelling growth initiatives planned for the remainder of 2012 and are excited by what the future holds for our Company, and for the MPS market as a whole.

On March 21, 2012, the Company announced that it has engaged the independent registered public accounting firm Holtz Rubenstein Reminick LLP (“HRR”) to review and issue a new audit report regarding its consolidated financial statements for the year ending December 31, 2009 because the SEC did not consider B&P “independent” as defined in the SEC’s rules regarding auditor independence.

Even though the Company disagreed, for the interests of investor transparency and to avoid a complicated on-going regulatory process, on March 20, 2012 the Company engaged HRR to review and issue a new audit report regarding its consolidated financial statements for the year ended December 31, 2009. The amendments to Items 7 and 8 are being made to reflect that the financial statements for the 2009 fiscal year have now been audited by HRR, the report of which firm is included together with such financial statements under Item 8.

BEIJING, June 21, 2012 /PRNewswire-Asia/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in China, today announced that its operating subsidiary in China has entered into a cooperation agreement with Shanghai Telecommunication Engineering Co., Ltd ("STE") (Hong Kong Stock Exchange: 0552.HK) for the construction, management and operation of a cloud data center to be located in Shanghai, China. This data center will allow Trunkbow to extend its industry-leading MPS and MVAS services to the cloud, enabling small- and medium-sized businesses ("SMB") to utilize the Company's technology under Software application as Service ("SaaS") and Platform application as Service ("PaaS") models, further expanding the reach of its MPS solutions to a broader range of potential merchant customers.

Under the agreement, Trunkbow will invest approximately RMB180 million (US$28 million) in the 8,262 square meter data center, with STE to provide design and construction services during the initial phase of development. The Company has applied for a government-backed bank loan to finance the construction. Once complete, STE will operate the facility and provide maintenance services through a partnership with China Telecom, with hosting fees to be shared between STE and Trunkbow. We expect to offer a comprehensive suite of Trunkbow-powered, cloud-based services that will provide a hosted MPS solution for both M-commerce and point of sale-based transactions through the data center. This solution will target small- and medium-sized businesses, and will be marketed as an attractive, low-cost option enabling merchants to accept mobile payments online and offline.

"This partnership with STE represents another important step in our efforts to build Trunkbow's MPS presence among merchants and consumers in China. The shared hosting fees will provide an immediate, predictable revenue contribution, while the suite of services offered through this data center will markedly improve our merchant acquisition capabilities, particularly among the SMB market," said Mr. Qiang Li, CEO of Trunkbow. "While the benefits of MPS are clear, small businesses sometimes lack the resources necessary to develop and implement a dedicated M-commerce solution or roll out MPS-enabled terminals at brick-and-mortar locations. This new, hosted solution will make the process of deploying and managing the MPS capability significantly more cost effective, easier to deploy, manage and expand through the addition of both back-end tools and consumer-centric features such as targeted promotions and location-based services. Along with STE, we are dramatically expanding the addressable market among merchants by providing a highly customizable, off-the-shelf MPS solution that will allow them to begin offering customers the pay-by-phone option without a significant long-term commitment or sizeable upfront investment."

Trunkbow expects to begin construction of the new data center in Shanghai in the third quarter of 2012, subject to approval by Trunkbow of the construction budget, and expect to complete the facility within twelve months. Under the revenue sharing agreement with STE, Trunkbow will receive a fixed percentage of the hosting fees paid by merchants for use of the cloud services, with minimum revenue guarantees provided by STE of RMB 304.3 million (US$47.9 million) over the initial ten-year contract term. In addition, Trunkbow will receive transaction fees directly from merchants as they begin using the hosted services.

First Quarter Results

• Gross revenue increased 33.2% year-over-year to $6.8 million, from $5.1 million in the first quarter of 2011.
  • MVAS gross revenue decreased to $2.4 million, compared with $3.7 million a year ago.
  • MPS gross revenue totaled $4.4 million, compared with $1.4 million in the first quarter of 2011.
• Gross profit increased 20.6% year-over-year to $5.3 million, from $4.4 million in the first quarter of 2011; gross margin was 80.0%, compared with 88.9% in the first quarter of 2011.
• Net income decreased 34.2% year-over-year to $2.2 million, or $0.06 per diluted share, compared with $3.4 million, or $0.09 per diluted share in the first quarter of 2011. The year-over-year decline in net income was attributable to a $1.3 million refund of value-added tax ("VAT") refund received in the first quarter of 2011, compared to no such refund in the first quarter of 2012. The Company received a VAT refund of approximately $1.0 million in April 2012, which it expects to recognize in the current fiscal quarter.
• As of March 31, 2012, cash and cash equivalents totaled $6.1 million, unchanged from the level as ofDecember 31, 2011.
• Extended its cooperation with China Unicom through the deployment of a new terminal-based MPS platform in Sichuan and Heilongjiang Province.
• Partnered with the Shandong branch of China UnionPay for the development and deployment of a new online-to-offline payment system.
• Reiterated full-year 2012 net income guidance of $23 million, representing 36% growth over 2011.

"Our first quarter operational performance has Trunkbow firmly on-track to meet our 2012 objectives with respect to overall growth and the continued development of our emerging MPS segment. We achieved solid growth over the first quarter of last year, with gross revenue up more than 30% in addition to gains in both gross profit and operating income. The year-over-year decline in net income was primarily caused by the timing of receipt of our VAT refund, which was recognized in the first quarter of 2011, but it expects to record in the second quarter this year," said Mr. Qiang Li, Chief Executive Officer of Trunkbow. "Our most notable accomplishment in the first quarter was the growth of our mobile payments business, in which we increased revenue more than three-fold on a year-over-year basis with shared revenue growing over 100% from the level we achieved in the first quarter of 2011. We continued increasing the reach of our technology through expansion of our partnerships with China Unicom and China UnionPay, which have strengthened our nationwide merchant acquisition efforts, which are critical to Trunkbow's long-term success and the continued advancement of our business model."

"Through our growing collaboration with China's Big 3 telecom carriers, our terminal-based MPS systems are being marketed to corporations and academic institutions as a SAAS and enterprise automation tool, giving us access to another potentially lucrative end market in addition to the traditional contactless payment functionality. Bestpay, our proprietary app developed with China Telecom, has been activated on over 600,000 mobile handsets to-date. In addition, our partnership with China UnionPay has progressed well in its early stages, as the Trunkbow-UnionPay mobile applet is being used to power a growing number of web and app-based mobile storefronts, while our new online-to-offline payment system has generated significant interest from merchants and consumers alike. Our strong start to 2012 has set the stage for important near- and longer-term success for Trunkbow, and we look forward to the opportunities that lie ahead."

Business Outlook

Trunkbow reaffirmed its 2012 financial guidance, which calls for approximately $23 million in net income, representing 36% growth over 2011. The Company expects that this growth will be largely the result of the continued expansion of its MPS business, as it continues to develop its merchant network, broadens its presence in new provinces, increases its penetration withinChina's leading mobile carriers and launches its technology in strategically targeted international markets.

Mr. Li concluded, "We are proud of what we have accomplished in the first quarter with regard to the ongoing development of our MPS operations and our efforts to migrate this segment of the business from a model focused on one-time platform installations to one that is built upon a solid foundation of recurring revenue from transaction processing and shared services. Our efforts last year were centered around the development of infrastructure needed to support a concentrated merchant acquisition and consumer engagement program. With these resources in place nationwide, we are working closely with our carrier partners and China UnionPay to build awareness of the benefits of MPS among merchants and mobile subscribers to make the technology more prevalent in the market. Our ultimate goal is to help make the mobile phone as synonymous with payments as cash, credit and debit cards. We not only believe that this goal can be accomplished, but that 2012 will be a transformational year for the MPS industry and our Company, in which substantial progress can be made toward this objective."

BEIJING, April 19, 2012 /PRNewswire-Asia/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in China, today announced that it has extended its cooperation with China Unicom through the deployment of a new terminal-based MPS platform in Heilongjiang Province. Installation is expected to begin in the second quarter, with services scheduled to launch in the second half of 2012.

"We are pleased to extend our MPS footprint into Heilongjiang Province and bring this technology to China Unicom's 5.7 million subscribers in the region. This represents a sizeable opportunity, as we will simultaneously roll out user authentication and payment processing services, making the solution more attractive to end-users and increasing the value proposition for retailers, enterprise and institutional users," said Mr. Qiang Li, CEO of Trunkbow. "Similar to our efforts in Sichuan Province, we are working closely with our partners at China Unicom to build awareness of the significant benefits of MPS technology among merchants and corporate IT executives, with a goal of evangelizing the technology and supporting broad adoption of MPS for multiple applications. Handset technology and wireless network infrastructure are improving rapidly, and we are confident that this ongoing mobile revolution will help drive mass-market usage of MPS as we enhance the solution through the addition of new features and functionalities."

Under the agreement, Trunkbow will receive recurring revenue payments based on a percentage of monthly function fees and transactions processed using the MPS platform. Trunkbow and China Unicom plan to jointly market this MPS technology to retailers for phone-based payments at the point-of-sale, and to corporations, academic institutions and other organizations as a SAAS and enterprise automation tool for user authentication and internal payment capabilities.

This platform will allow China Unicom's 5.7 million subscribers in Heilongjiang province to make purchases at retail locations using their mobile phones at the point-of-sale, and will function as a convenient, secure electronic identification card for students and employees at schools and other locations that adopt the technology.

Full Year 2011 Financial Highlights

• Gross revenue increased 19.6% year-over-year to $29.7 million, compared with $24.8 million in 2010.
  • MVAS gross revenue grew 37.7% to $17.4 million
  • MPS gross revenue grew 0.8% to $12.3 million
• Gross profit increased 17.9% year-over-year to $22.9 million, compared with $19.5 million in 2010.
• Net income increased 25.1% year-over-year to $16.9 million, or $0.47 per diluted share. This compared with net income of $13.5 million, or $0.44 per diluted share, in 2010.
• As of December 31, 2011, cash and cash equivalents totaled $6.1 million, compared with $10.3 million as ofDecember 31, 2010.
• Introduced full-year 2012 guidance of approximately $23 million in net income, representing 36% growth compared with 2011.

"2011 began with our initial public offering on the Nasdaq, and throughout the year we made progress against our key strategic growth objectives while generating record full-year revenue, gross profit and net income. We significantly expanded our geographic presence with wireless carriers, finishing the year with 27 platform installations in 19 provinces nationwide and signed two important software partnerships, with China Telecom and China UnionPay, which will greatly increase our subscriber penetration and position us well to ramp our merchant acquisition efforts in the new year," said Mr. Qiang Li, Chief Executive Officer of Trunkbow." Through the end of 2011, approximately 1 million mobile users had made a purchase using our physical Point-of-Sale or software-based MPS technology, a number that we expect to increase dramatically in 2012 as we continue to grow our merchant network through new POS terminal installations and application partnerships.

"We believe that MPS adoption presents a compelling value proposition for merchants both online and off-line, and is an important tool that can be used for customer engagement and to improve the overall purchasing experience. By integrating features such as loyalty and rewards programs, location-based services, mobile couponing and handset-based alerts, we believe that MPS can simplify consumers' lives while helping merchants attract new shoppers and retain existing customers. We expect that the recurring revenue generated by the shift in our MPS business will provide a solid foundation for our expected 20% top-line growth in 2012. We are well positioned to build upon our leadership position in the world's largest mobile phone market, not only growing our business, but helping drive the growth of this emerging industry."

Business Outlook

Trunkbow introduced 2012 financial guidance, which calls for approximately $23 million in net income, representing 36% growth over 2011. The Company expects that this growth will be largely the result of the continued expansion of the MPS and MVAS markets, as it develops its merchant network, broadens its presence in new provinces, increases its penetration within China's leading mobile carriers and launches its technology in strategically targeted international markets.

Mr. Li concluded, "Our accomplishments in 2011 included strong double-digit growth across each of our key operating metrics. Looking ahead, as we execute on our merchant acquisition strategy and shift the mix of MPS sales form one-time system installations toward a recurring revenue model driven by function fees and transaction-based revenue, we expect to see greater top-line stability and a steadier revenue ramp. Mobile phones are already an integral part of consumers' lives, and their importance is increasing every day through enhancements and the addition of new functionalities. One such functionality is the use of the handset as a payment method, something that Chinese consumers are just beginning to adopt. We expect to see rapid growth in end-user uptake as more merchants implement MPS to give their customers a new, simple and secure payment alternative. Through our partnerships withChina's three mobile carriers and its dominant financial clearing house, our technological leadership and concentrated growth strategy, Trunkbow is poised to lead the MPS revolution in China, and we look forward to the opportunities that lie ahead."

BEIJING, March 28, 2012 /PRNewswire-Asia/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in the PRC, today announced that it has entered into a partnership agreement with the Shandong branch of China UnionPay ("UnionPay"), China's leading bankcard association, for the development and deployment of a new online-to-offline payment system. This system will launch in Shandong Province, one of the country's most popular tourist destinations in the second quarter of 2012, and will be deployed with the Shandong Tourist Administration to enable the purchase of admission tickets to various points of interest throughout the province.

"We are delighted to further expand our relationship with China UnionPay to include this new mobile payment solution, which provides further evidence of our technological leadership and important first-mover advantage in the market. The convergence of online and offline transactions represents an exciting breakthrough in MPS technology, and one that we believe will significantly increase end-user adoption of the technology," said Mr. Qiang Li, CEO of Trunkbow. "In addition to prepayment and redemption functionality, we believe that the potential exists for additional applications to enhance the value proposition for merchants by enabling new customer engagement tools. With approximately 150,000 UnionPay POS terminals deployed in Shandong Province, this represents a sizeable launch market for the technology, particularly given Shandong's popularity as a tourist destination. We believe that this new application will be well-received by brick-and-mortar retailers and consumers and look forward to further collaboration with China UnionPay in other regions and other segments of the market."

Under the agreement, Trunkbow and China UnionPay will jointly deploy this new payment system, which supports the purchase of event and attraction tickets, as well as physical goods in a variety of retail locations. The application will enable consumers to purchase products or services via a smartphone browser or dedicated app, with proof of purchase delivered to a customer's handset in the form of a digital voucher or scannable code. The purchase is verified and completed when the subscriber inputs or scans this code on a China UnionPay Point-of-Sale terminal at the merchant location, and payment is processed through the China UnionPay clearing system at the time of redemption. Trunkbow will receive sales commission, transaction fees, as well as advertising revenue from this system and related apps.

BEIJING, March 22, 2012 /PRNewswire-Asia/ -- Trunkbow International Holdings Limited (NASDAQ: TBOW) ("Trunkbow" or the "Company"), a leading provider of Mobile Payment Solutions ("MPS") and Mobile Value Added Solutions ("MVAS") in China, today announced that it has engaged the independent registered public accounting firm Holtz Rubenstein Reminick LLP ("HRR") to review and issue a new audit report regarding its consolidated financial statements for the year ended December 31, 2009. Trunkbow expects to file amended documents with the U.S. Securities and Exchange Commission ("SEC") upon the completion of their work.

In reviewing the Company's Annual Report on Form 10-K for the year ended December 31, 2010, the SEC informed the Company that because its Chief Financial Officer was previously employed by Bernstein and Pinchuk LLP ("B&P"), the Company's outside auditors, and had performed more than 10 hours on the Trunkbow audit for the year ended December 31, 2009, it did not consider B&P "independent" as defined in the SEC's rules regarding auditor independence. The Company disagreed, arguing that the hiring of Ms. Alice Ye was in accordance with an exemption for such situations involving emergency or unusual circumstances approved by the Company's board of directors or audit committee, and noting the limited work performed by Ms. Ye and her status as a non-partner in B&P at the time. The SEC disagreed, indicating that they believe such exemption is to be relied upon only in very rare circumstances and that Trunkbow's situation was not consistent with their views of the scope of the exemption.

In the interests of investor transparency and to avoid a complicated on-going regulatory process, on March 20, 2012 the Company engaged HRR to review and issue a new audit report regarding its consolidated financial statements for the year ended December 31, 2009. The SEC has not raised any other issues with the B&P audit and the Company has no reason to believe that the HRR audit will result in a report different from the report that followed the B&P audit, subject to the full scope of review being solely within HRR's professional determination. The Company expects the re-audit to proceed as quickly as possible.

"Since our initial public offering in February 2011, we have taken steps to ensure maximum transparency and accountability to our shareholders and U.S. regulators," said Mr. Qiang Li, CEO of Trunkbow. "The effectiveness of our accounting controls and policies are extremely important, and while the SEC and the Company disagree on the technical application of their independence rules to Trunkbow's situation, the SEC has no outstanding questions related to our business or actual results. We will work closely with the team at Holtz Rubenstein Reminick to complete the re-audit process in a timely manner."

After various submissions to and discussions with the Staff of the SEC, and in recognition of the Staff's position with respect to this matter, management and the Audit Committee of the Company's Board of Directors determined that it was necessary to have the Company's consolidated financial statements as of and for the year ended December 31, 2009 reviewed and reported on by an independent publicly registered independent accounting firm. The 2009 financial statements were previously included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, as well as in Trunkbow's registration statements filed with the SEC regarding its initial public offering in 2011. As a result, on March 16, 2012, the Audit Committee met and concluded that the 2009 Financial Statements should no longer be relied upon.

Management is in the process of evaluating the effect, if any, of the matters discussed above on the Company's prior conclusions with respect to the effectiveness of its internal control over financial reporting and disclosure controls and procedures as of the end of December 31, 2009. If the Company determines that a revision of any disclosures pertaining to such prior conclusion is appropriate, such revision will be included in the revised filings, which will be made upon the conclusion of the re-audit.

Third Quarter 2011 Results

First Quarter Results:

Fourth Quarter Results:

• Net revenue increased 200.3% year-over-year to $13.7 million
• Gross profit increased 127.8% year-over-year to $10.1 million
• Net income increased 154.1% year-over-year to $8.2 million, or $0.25 per diluted share vs. $0.16 the year before.
• MPS gross revenue grew 487.1% to $7.0 million
• MVAS gross revenue grew 105.3% to $6.9 million

"We are extremely pleased with our results in the quarter that close a year of many important achievements.  We delivered strong growth in revenue and net income in 2010, and we continued to make progress in the roll-out of our MPS solutions," said Mr. Qiang Li, Trunkbow's Chief Executive Officer. "Subsequent to the end of the quarter we completed our initial public offering on the NASDAQ Global Market and raised $20 million in gross proceeds to fund the aggressive deployment of our MPS solution in 2011. We expect our growth momentum to continue as we expand into new provinces and reach agreements with additional carriers, and we look forward to reporting on our progress as we reach important milestones."

"In 2011, we expect to grow revenues and net income 30%," continued Mr. Li

In February 2010 Trunkbow International Holdings Limited became a public company via a reverse merger transaction.

Note that shares have yet to be assigned a trading symbol

Company Snapshot:

A leading and innovative mobile application enabler, offering telecom operators in China application platforms on which to offer Mobile Value Added Solutions (“MVAS”) to subscribers.

Industry Snapshot:

The Chinese Telecom Market

In terms of the mobile phone industry, China has the fastest growing mobile subscriber base in the world and has become the largest mobile phone market in the world. The country had 610 million mobile subscribers in 2008 and increased to 747 million mobile subscribers by end of 2009. Based on figures released by the Ministry of Industry and Information Technology (“MIIT”) for January to April 2010, the wireless subscriber base could reach an estimated 864 million by the end of 2010, representing a six year CAGR of 14%. Similarly the MIIT data indicate that total revenue for the telecom sector in China could grow to approximately $425 billion for 2010. 3G deployment in China, which officially began in 2009, will act as a catalyst for continued growth in the telecom industry in China. Overall, the positive mobile phone industry trends in China are driven by the increasing affluence of the middle class, a growing subscriber base and increasing per subscriber spend.

The Chinese Mobile Payment Market

Based on China Computer World (“CCW”) research projections, by 2009 Chinese mobile payment users will reach 108 million, and is expected to nearly double by 2011. According to China Mobile’s 2009 Annual Report, China Mobile will be operating in 238 cities by the end of 2009, providing service to 70% of urban populations in the PRC, and approaching 100% of urban populations in the PRC by the end of 2011. According to China Telecom’s 2009 Annual Report, China Telecom expects to provide services to 98% of urban populations in the PRC and 93% of rural populations in the PRC by the close of 2009. According to China Unicom’s 2009 Annual Report, China Unicom expects to provide services to 282 cities in the PRC by end of 2009 and 75% of the total population of the PRC by the end of 2011. As with the rollout of any new technology, there is a period of time known as “end user adoption” where a customer first receives marketing contact by a supplier (in this case, China Telecom, China Mobile and China Unicom) followed by early adopters where the technically savvy will be the first to use a new technology, then followed by mass adoption where the public accepts the technology and rapidly employs the technology. The PRC cellular carriers target 2010-2011 as significant growth windows where marketing efforts should generate desired results.

Post Merger Share Calculation:

•      241,017: Pre reverse merger outstanding shares and after two reverse splits. 
• 19,562,888: Newly issued shares of Common Stock
•   2,774,500: Warrants exercised by shell company. 
•   8,447,575: Shares associated with private placement
•   1,689,515: Shares from warrants associated with private placement. Exercise price is @ $2.00.
•      554,900: Shares from warrants associated with the shell. Exercise price is @ $2.00.
•      561,900: Warrants issued to financial advisors. Exercise price is @ $2.00.

GeoTeam® best effort calculation of total post reverse merger shares assuming full conversions:  33,832,295

Financial Snapshot:

We have experienced strong revenue growth and profitability over the last two years driven by customer additions and the introduction of innovative products and services.  Positive macro economic trends, strong consumer demand and our suite of unique platform solutions present us with the opportunity to expand sales rapidly and increase market share.

• Our revenues increased to $13.5 million in 2009 from $12.9 million in 2008
• Net income to $8.3 million in 2009, from $5.1 million in 2008.

Special Note:  We found it interesting that a reputable company has invested in this deal.

Concurrently with the Closing, we entered into a master engagement agreement  with VeriFone, Inc. to be its exclusive provider of point of sale hardware, software and services that are purchased or deployed by the Company and its affiliates and has agreed to use its best efforts to ensure that VeriFone will receive at least 80% of the orders for point of sale systems placed by the Company’s mobile operator partners. Pursuant to the terms of the VeriFone Agreement, we submitted a binding, non-cancellable purchase order to VeriFone covering an initial order of $5 million of VeriFone’s point of sale systems for deployment in China as part of its rollout. The full amount of the purchase order was paid upon submission to VeriFone. Additionally, the Master Engagement Agreement contains a non-binding deployment schedule covering a total of 125,000 point of sale systems to be supplied by VeriFone through the end of 2012.

VeriFone invested $5 million in the February 2010 Offering. We have granted VeriFone the ability to name one of the directors on our Board of Directors so long as it beneficially owns at least 4.99% of our outstanding Common Stock

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