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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1998
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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Commission file number 1-13271
800 TRAVEL SYSTEMS, INC.
(Exact name of Small Business Issuer as specified in its charter)
Delaware 59-3343338
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4802 Gunn Highway
Tampa, Florida 33624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 908-0903
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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 preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes |X| No |_|
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 7,508,427 shares of Common
Stock, $.01 par value, were outstanding, as of March 31, 1998.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
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<PAGE>
Form 10-QSB
INDEX
Page
Number
PART 1. FINANCIAL INFORMATION .......................................... 1
Item 1. Financial Statements ........................................... 1
Balance Sheets (Assets) ................................... 1
Statements of Operations .................................. 3
Statements of Stockholders' Equity ........................ 4
Statements of Cash Flows .................................. 5
Notes to Financial Statements ............................. 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations ................................................ 9
PART 2. OTHER INFORMATION .............................................. 13
Item 6. Exhibits, Lists and Reports on Form 8-K ........................ 13
(a) Exhibits .............................................. 13
(b) Reports on Form 8-K ................................... 14
SIGNATURES .............................................................. 15
<PAGE>
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements
800 TRAVEL SYSTEMS, INC.
BALANCE SHEETS
ASSETS
March 31, December 31,
1998 1997
----------- -----------
CURRENT ASSETS
Cash $ 1,765,445 $ 18,710
Commissions Receivable 704,083 553,358
Prepaids 166,500 16,617
----------- -----------
TOTAL CURRENT ASSETS 2,636,028 588,685
----------- -----------
LEASEHOLD IMPROVEMENTS AND EQUIPMENT 843,681 450,667
Less Accumulated Depreciation (143,296) (110,104)
----------- -----------
Net Leasehold Improvements and Equipment 700,385 340,563
----------- -----------
EXCESS OF COST OVER FAIR VALUE OF NET
ASSETS ACQUIRED
Less accumulated amortization of $142,979 and
$93,126, respectively 4,842,426 1,024,385
----------- -----------
DEFERRED OFFERING COSTS -- 1,408,573
----------- -----------
OTHER ASSETS
Trademarks, net of accumulated amortization of
$36,534 and $29,616, respectively 378,466 185,384
Related Party Receivables 321,175 308,425
Bonds, Security Deposits and Other Assets 320,955 37,824
Merger Deposits and Deferred Acquisition Costs -- 416,671
Prepaid Rent 65,000 68,000
----------- -----------
TOTAL OTHER ASSETS 1,085,596 1,016,304
----------- -----------
TOTAL ASSETS $ 9,264,435 $ 4,378,510
=========== ===========
The accompanying notes are an integral
part of these financial statements.
(Continued)
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<PAGE>
800 TRAVEL SYSTEMS, INC.
BALANCE SHEETS
(Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1998 1997
------------ ------------
CURRENT LIABILITIES
Note Payable $ -- $ 50,000
Current Maturities of Long-Term Debt -
Related Parties 213,333 260,000
Accounts Payable 532,406 1,830,652
Accrued Liabilities 448,765 479,670
------------ ------------
TOTAL CURRENT LIABILITIES 1,194,504 2,620,322
DEFERRED RENT 143,640 138,228
LONG-TERM DEBT - Excluding Current Maturities -- 50,000
------------ ------------
TOTAL LIABILITIES 1,338,144 2,808,550
------------ ------------
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' EQUITY
Preferred Stock, $.01 par value, 1,000,000
shares authorized; none issued -- --
Common stock, $.01 par value, 10,000,000
shares authorized; 7,508,427 and
5,959,709 shares issued and
outstanding, respectively 75,084 59,597
Additional Paid-in-Capital 11,807,376 5,297,424
Stock Subscriptions Receivable (21,547) (21,547)
Retained Deficit (3,934,622) (3,765,514)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 7,926,281 1,569,960
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 9,264,435 $ 4,378,510
============ ============
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended
March 31,
-----------------------------
1998 1997
----------- -----------
REVENUES
Commissions $ 1,558,915 $ 1,339,985
Ticket delivery and service fees 519,468 300,261
----------- -----------
Total Revenues 2,078,383 1,640,246
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OPERATING EXPENSES
Payroll, commissions and
employee benefits 1,066,446 848,243
Telephone 325,673 267,114
Ticket delivery expense 167,251 178,967
Advertising 48,610 45,545
General and administrative 660,913 633,665
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TOTAL OPERATING EXPENSES 7,288,893 1,973,534
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(LOSS) BEFORE OTHER INCOME (190,510) (333,288)
OTHER INCOME AND (EXPENSE)
Interest Income 27,247 2,480
Interest Expense (7,410) (6,349)
Other 1,565 165
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NET (LOSS) $ (169,108) $ (336,992)
=========== ===========
(LOSS) PER COMMON SHARE $ (.02) $ (.06)
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 7,213,555 5,955,459
=========== ===========
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Additional Stock
--------------------------- Paid-in Subscriptions Retained
Shares Amount Capital Receivable Deficit Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 5,951,209 $ 59,512 $ 4,976,259 $ (32,296) $ (3,503,009) $ 1,500,466
Issuance of common stock in
connection with debt issuance
and services 8,500 85 21,165 -- -- 21,250
Issuance of stock options to
Directors -- -- 300,000 -- -- 300,000
Payment of stock subscription -- -- -- 10,749 -- 10,749
Net loss, year ended
December 31, 1997 -- -- -- -- (262,505) (262,505)
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 5,959,709 $ 59,597 $ 5,297,424 $ (21,547) $ (3,765,514) $ 1,569,960
Sale of Common Stock and
Warrants net of issuance
expenses of $2,252,602 1,350,000 13,500 4,872,024 -- -- 4,885,524
Joseph Stevens Group, Inc. Merger 383,333 3,833 1,944,082 -- -- 1,947,915
Purchase of 184,615 Shares (184,615) (1,846) (306,154) -- -- (308,000)
Net (Loss) -- -- -- -- (169,108) (102,194)
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, MARCH 31, 1998 7,508,427 $ 75,084 $ 11,807,376 $ (21,547) $ (3,934,622) $ 7,993,205
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) $ (169,108) $ (336,992)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and Amortization 89,964 27,473
Stock, options and warrants issued for
expenses and debt redemption -- --
Prepaid Rent Amortization 3,000 3,000
Changes in operating assets and liabilities,
net of effects of acquisition:
(Increase) in receivables (150,725) (109,234)
(Increase) decrease in prepaids and
other assets (433,015) 5,262
Increase in related party receivables (12,750) --
Increase in deferred rent liability 5,412 36,123
Increase (decrease) in accounts payable and
accrued expenses (1,228,874) 86,209
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NET CASH PROVIDED BY
OPERATING ACTIVITIES (1,896,097) (288,159)
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CASH FLOW FROM INVESTING ACTIVITIES
Purchase of leasehold improvements and equipment (199,269) (46,703)
Merger deposits and deferred acquisition costs (144,053) 52,676
----------- -----------
NET CASH FLOW USED BY
INVESTING ACTIVITIES (343,322) 5,973
----------- -----------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
(Continued)
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<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
(Continued)
Three Months Ended
March 31,
--------------------------
1998 1997
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CASH FLOW FROM FINANCING ACTIVITIES
Deferred offering cost $(1,194,305) $ (63,054)
Proceeds from borrowings, net 100,000 --
Principal payments on debt (1,749,667) --
Issuance of common stock 7,138,126 --
Purchase of Common Stock (308,000) --
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NET CASH FLOW (USED IN) PROVIDED BY
FINANCING ACTIVITIES 3,986,154 (63,054)
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NET INCREASE (DECREASE) IN CASH 1,746,735 (345,240)
CASH AT THE BEGINNING OF PERIOD 18,710 588,960
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CASH AT THE END OF PERIOD $ 1,765,445 $ 243,720
=========== ===========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION
Cash paid during the period for:
Interest Expense $ 6,000 $ --
=========== ===========
The accompanying notes are an integral
part of these financial statements.
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<PAGE>
800 TRAVEL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulations S-X. They do not include all information and
notes required by generally accepted accounting principals for complete
financial statements. However, except as disclosed, there has been no
material change in the information disclosed in the notes to consolidated
financial statements included in the Annual Report on Form 10-K of 800
Travel Systems, Inc. for the year ended December 31, 1997. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 1998, are not
necessarily indicative of the results that may be expected for the year
ending December 31, 1998.
NOTE 2: SALE OF COMMON STOCK
In January 1998, the Company sold 1,350,000 shares of Common Stock ($5.00)
and 3,105,000 Warrants ($.125). The following summarize the transactions:
Proceeds:
Common Stock $6,750,000
Warrants 388,125
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7,138,125
Expenses:
Underwriter commissions and expenses 927,956
Printing 226,000
Other 1,098,645
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Net Proceeds $4,885,524
==========
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<PAGE>
800 TRAVEL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
MARCH 31, 1998 AND 1997
NOTE 3: ACQUISITION
In January 1998, the Company acquired selected assets and assumed selected
liabilities of Joseph Stevens Group, Inc. in exchange for the issuance of
383,733 shares of its common stock, issuance of 250,000 warrants to
purchase common stock and the payment of $1,578,000 purchase acquisition
note. The following summarizes the transaction:
Purchase Price:
Note $1,578,000
Common Stock 1,916,665
Warrants 31,250
Cash Deposit 46,665
Acquisition Expenses 345,314
Stock Price Guarantee Payment 250,000
----------
$4,167,894
==========
Assets Acquired:
Office Equipment $ 100,000
Trademarks 200,000
Goodwill 3,867,894
----------
$4,167,894
==========
In March 1998, the Company entered into an agreement with the previous
stockholders of Joseph Stevens Group, Inc. to purchase a telephone switch,
184,615 shares of the Company common stock and to release the Company from
its guaranty of the future value of the Company's common stock issued to
the principal stockholder of Joseph Stevens Group, Inc. for payments
totaling $798,000.
-8-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
The Company operates as a telemarketing travel agency, providing air
transportation reservation services for domestic and international travel to
customers through its easy to remember, toll-free numbers. The Company was
formed in November 1995 to acquire certain assets of and assume certain
liabilities of 1- 800-Low Airfare, Inc. (the "Predecessor Business"). The
acquisition was consummated on December 1, 1995. To expand its operations, in
November 1996 the Company entered into a Merger Agreement with the Joseph
Stevens Group, Inc. ("Stevens") and its sole shareholder, Joseph Stevens Group,
LLC ("JSG"). Prior to the consummation of the merger with Stevens (the "Stevens
Merger"), Stevens operated as an independent travel agency specializing in the
telemarketing of airline tickets. Pursuant to the Merger Agreement,
simultaneously with the closing of the Company's initial public offering on
January 21, 1998, Stevens was merged with and into the Company, with the Company
as the surviving corporation.
The Company's operating revenues presently consist, and for the immediate
future will continue to consist, principally of (i) commissions on air travel
tickets; (ii) override commissions on air travel tickets booked on airlines with
which the Company has override agreements; (iii) segment incentives under the
Company's agreement with SABRE; (iv) co-op promotions with suppliers of travel
related products and services; and (v) service fees charged to customers.
The Company's revenues are a function of the number and price of the
tickets its sells and the percentage of the price of such tickets it retains as
commissions and override commissions, as well as on the service charge imposed
on customers. Although the Company entered into its first override agreement in
December 1995, it only began to achieve the volume necessary to benefit from
these agreements in the third quarter of 1996. The Company entered into an
agreement with a consolidator that sells tickets on TWA at a discount (the "TWA
Discounter") on March 1, 1996. As a result of its override agreements and its
agreement with the TWA Discounter, the Company is able to charge its customers a
$10 or $20 service charge, depending on the price of the ticket, while still
offering low priced tickets. The Company only began to impose this service
charge in January 1997.
The Company anticipates that as the volume of tickets sold increases and
the proportion of tickets sold which are subject to an override agreement
increases, the percentage of the price of the tickets sold retained by the
Company will increase. The Company's operating expenses include primarily those
items necessary to advertise its services, maintain and staff its travel
reservation centers, including payroll, commissions and benefits; telephone;
general and administrative expenses, including rent and computer maintenance
fees; and, to date, interest, fees and expenses associated with the Company's
financing activities. Set forth below for the periods indicated are the gross
dollar amounts of reservations booked, revenues and revenues as a percentage of
reservations, the gross dollar amount of expenses, expenses as a percentage of
revenues, net loss as a percentage of revenues and changes therein for the three
month period ended March 31, 1998 compared to the three month period ended March
31, 1997.
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<PAGE>
<TABLE>
<CAPTION>
Three Three
Months Ended Months Ended
March 31, 1998 % March 31, 1997 % Change %
-------------- --- -------------- --- ------ --
<S> <C> <C> <C> <C> <C> <C>
Gross Reservations......... 15,150,399 12,158,999 2,991,406 25
Revenues
(including override
and service charges).... 2,078,383 14* 1,640,246 13* 438,137 27*
OPERATING
EXPENSES:
Employee
Costs................... 1,066,466 51** 848,243 52** 218,223 26
Telephone................ 325,673 16 267,114 16 58,559 22
Ticket
Delivery................ 167,251 8 178,967 11 (11,716) (7)
Advertising.............. 48,610 2 45,545 3 3,065 7
General and
Administrative......... 660,913 32 633,665 39 27,248 4
Total Operating
Expenses.............. 2,268,893 109 1,973,534 120 295,359 15
Net (Loss)................. (169,108) 8 (336,992) 21 167,884 50
========= === ========= === ======= ==
</TABLE>
- ----------
* Revenues as a percentage of gross reservations.
** Expenses as a percentage of revenues.
Results of Operations
In connection with the Stevens Merger, the Company and Stevens entered
into an Interim Operating Agreement pursuant to which the Company operated
Stevens' business for the account of the Company effective January 1, 1997
through the closing of the Stevens Merger. The numbers in the table above and in
the discussion below for the three months ended March 31, 1997 ("First Quarter
'97") and the period in the first quarter of 1998 ("First Quarter `98") prior
to the merger include the operations of Stevens.
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997
Revenues for the First Quarter '98, increased 27% to $2,078,383 compared
to $1,640,246 for First Quarter '97. The increased revenues reflect the 25%
increase in gross reservations booked in First Quarter '98 ($15,150,399) as
compared to First Quarter '97 ($12,158,999). The gross reservation increase and
the resulting revenue increase is largely attributable to the increase in the
volume of calls handled at the Company's reservation centers as a result of
increases in the number of reservation agents and certain operating
efficiencies. The Company employed approximately 148 reservation agents and
supervisors as of March 31, 1997 as compared to 169 reservation agents and
supervisors employed as of March 31, 1998. As a percentage of gross
reservations, revenues increased to 13.7% of gross reservations during First
Quarter '98 from 13.4% of gross reservations during First Quarter '97.
Operating expenses for First Quarter '98 increased 15% to $2,268,893
compared to $1,973,534 for First Quarter '97. Operating expenses did not
increase proportionate to the increase in revenues due to the fact that many
expenses (office rent, utilities, management wages, etc.) remain relatively
constant over a broad range of revenues. The increase in operating expenses
resulted primarily from an increase
-10-
<PAGE>
in the Company's payroll, commissions and employee benefits expenses, which
increased 26% to $1,066,466 in First Quarter '98 from $848,243 in First Quarter
'97. The increase in payroll expenses reflects the increase in the number of
reservation agents which occurred at both reservation centers, the commencement
of the payment of monthly fees to the Company's directors and the amortization
of the expense related to the shares issued to the Company's President pursuant
to his Employment Agreement. Consistent with the increase in the volume of
tickets sold by the Company, the Company also recorded increases in its
telephone and ticket delivery expenses, though these increases were not
proportional with the increase in the Company's volume. Also contributing to the
increase in operating expenses was an increase in the Company's advertising
expense of 7% to $48,610 in First Quarter '98 from $45,545 in First Quarter '97
as the Company increased the number of yellow page directories in which it
advertises and absorbed the cost of advertising its and Stevens' toll free
numbers. The Company's general and administrative costs increased 4% to $660,913
in First Quarter '98 compared to $633,665 in First Quarter '97. Despite the
increase in general and administrative expenses over the two periods, general
and administrative expenses decreased as a percentage of revenues to 32% in
First Quarter '98 as compared to 39% in First Quarter '97. The increase in the
foregoing operating expenses was offset, in part, by an increase in interest and
other income, on a net basis, to $21,402 in First Quarter '98, from a net
expense of ($3,704) in First Quarter '97.
During First Quarter '98 the Company's operating loss was ($190,510), a
reduction of 43% from the operating loss of ($333,288) incurred during First
Quarter '97. The reduction in the Company's operating loss reflects the
substantial increase in revenues, plus the net changes in operating expenses
outlined above.
Liquidity and Capital Resources
The Company commenced operations in December 1995 upon the acquisition of
certain assets of the Predecessor Business for $1,407,008 of which $10,000 was
paid in cash, $90,000 was paid by the delivery of the Company's Promissory Note;
$720,480 was satisfied through the issuance of 600,400 shares of the Company's
Common Stock and $586,528 was satisfied through the assumption of certain
liabilities of the Predecessor Business. Of the 600,400 Shares issued, 300,000
shares were to be issued to creditors of the Predecessor Business which elected
to convert their claims against the Predecessor Business into stock at the rate
of $10.00 per share. Pursuant to this agreement, during First Quarter '97 the
Company issued 153,934 shares of Common Stock to creditors of the Predecessor
Business and 146,066 shares of its Common Stock to the Predecessor Business.
Prior to completion of its initial public offering in January 1998, the
Company financed its operations from capital contributions, net of related
expenses, in the amount of $2,455,902; loans in the amount of $460,750; and
through services provided by certain vendors to be paid out of future revenues.
In January 1998 the Company completed its initial public offering of its
securities from which it derived net proceeds of $4,885,000. A portion of such
proceeds was used to satisfy liabilities accrued prior to completion of the
offering.
The Company, used $1,896,097 for operating activities in First Quarter '98
as compared to $288,159 used in operating activities in First Quarter '97. The
use of cash during the First Quarter '98 reflects the substantial reduction
($1,222,874) in the Company's accounts payable and accrued expenses, and an
increase of $433,015 in prepaid assets.
During First Quarter '98 the Company's capital expenditures were
approximately $199,269 primarily for leasehold improvements, computers and other
operating equipment purchased out of the proceeds of the Company's initial
public offering.
In First Quarter '98, the Company completed an initial public offering of
its Common Stock and Redeemable Common Stock Purchase Warrants from which it
derived net proceeds of approximately
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<PAGE>
$2,993,000 after payments to JSG in connection with the Stevens Merger. Of such
amount, $1,000,000 will be applied to recruiting and training reservation
agents; $500,000 will be used to expand the Company's marketing activities, at
least $250,000 will be used to purchase capital equipment and the balance,
approximately $1,243,000, will be available for working capital. The Company
projects that if its revenues continue to grow as they did during First Quarter
'98 it will generate positive cash flow from operations, enabling it to preserve
its working capital or apply it as it determines appropriate. For example, in
March 1998 the Company used $558,000 to redeem 184,615 shares issued to JSG in
connection with the Stevens Merger and to obtain the release of the Make-Whole
Rights granted to JSG in the Merger Agreement.
PART 2
OTHER INFORMATION
Item 6. Exhibits, Lists and Reports on Form 8-K.
(a) Exhibits.
Exhibit Description
2.2 -- Amended and Restated Agreement and Plan of Merger dated November 1,
1996 among the Company, Joseph Stevens Group, Inc. and Joseph
Stevens Group, LLC (the "Merger Agreement") (1)
2.3 -- Amended and Restated Interim Operating Agreement between the Company
and Joseph Stevens Group, Inc. (1)
2.4 -- Form of Indemnity and Release Agreement among the Company, Joseph
Stevens Group, Inc., Joseph Stevens Group, LLC, Steve Rohrlick, Joe
Elizondo, MOHS, Inc. and WH/JSG LLC (Exhibit C to the Merger
Agreement, Exhibit 2.2 herein) (1)
2.5 -- Form of Mutual Release Agreement (Exhibit D to Merger Agreement,
Exhibit 2.2 herein) (1)
2.6 -- Form of Promissory Note from Joseph Stevens Group, Inc. to Joseph
Stevens Group, Inc. LLC (Exhibit E to the Merger Agreement, Exhibit
2.2 herein) (1)
2.7 -- Form of Escrow Agreement among the Company, Joseph Stevens Group,
Inc. and Vincent, Berg, Stalzer, Menendez, P.C. (Exhibit F to the
Merger Agreement, Exhibit 2.2 herein) (1)
2.8 -- First Amendment dated September 9, 1997 to the Merger Agreement (1)
2.9 -- Second Amendment dated 17, 1997 to the Merger Agreement (1)
2.10 -- Third Amendment dated October 29, 1997 to the Merger Agreement (1)
2.11 -- Fourth Amendment dated December 16, 1997 to the Merger Agreement (1)
3.1 -- Amended and Restated Certificate of Incorporation (1)
3.2 -- Amended and Restated Bylaws (1)
10.1 -- Form of Registrant's 1997 Stock Option Plan (1)
10.4 -- Redemption Agreement between the Company and Michael Cantor (1)
10.5 -- Form of Redemption Agreement between the Company and Jose Colon (1)
10.6 -- Agreement between the Company and Perry Trebatch (1)
10.27 -- Amended Release and Redemption Agreement, dated September 4, 1997,
between the Company and Michael Cantor (amending the agreement
listed as Exhibit 10.4 above (1)
10.28 -- Amended Release and Redemption Agreement, dated September 4, 1997,
between the Company and Jose Colon (amending the agreement listed as
Exhibit 10.5 above) (1)
10.29 -- Form of Amendment to Agreement, dated September __, 1997, between
the Company and Perry Trebatch (amending the agreement listed as
Exhibit 10.6 above) (1)
10.30 -- Form of Amendment to Agreement, dated November __, 1997, between the
Company and Perry Trebatch (amending the agreement listed as Exhibit
10.6 above, as amended by the agreement listed as Exhibit 10.29
above) (1)
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<PAGE>
10.31 -- Amended and Restated Release and Redemption Agreement, dated
November __, 1997, between the Company and Michael Cantor (amending
the agreement listed as Exhibit 10.4 above, as amended by amended
agreement listed as Exhibit 10.27 above) (1)
10.32 -- Amended and Restated Release and Redemption Agreement, dated
November __, 1997, between the Company and Jose Colon (amending the
agreement listed as Exhibit 10.5 above, as amended by amended
agreement listed as Exhibit 10.28 above) (1)
10.33 -- Agreement dated March 20, 1998 between the Company and Joseph
Stevens Group, LLC (2)
10.34 -- Pledge Agreement dated March 22, 1998 between the Company, Joseph
Stevens Group, LLC and Phillips Nizer Benjamin Krim & Ballon LLP (2)
27.1 -- Financial Data Schedule (4)
- ----------
(1) Incorporated by reference to the Company's Registration Statement on Form
SB-2 No. 333-28237.
(2) Incorporated by reference to the Company's Report on Form 8-K filed March
30, 1998.
(3) Incorporated by reference to the Company's Report on Form 10-KSB filed
March 31, 1998.
(4) Filed herewith.
* Portions of this exhibit are subject to confidential treatment.
(b) Reports on Form 8-K.
On March 27, 1998, the Company filed a Report on Form 8-K with respect to
the Company's agreement with The Joseph Stevens Group, LLC ("JSG") pursuant to
which JSG forfeited its Make-Whole Rights and returned 184,615 shares of Common
Stock to the Company for $558,000. In addition, under such agreement, the
Company concurrently agreed to close on the purchase of certain equipment
located in the office of The Joseph Stevens Group, Inc. and assume certain
equipment leases for an additional $240,000. As part of the agreement, the
Company obtained JSG's agreement not to sell on the open market any of its
shares of the Company's Common Stock prior to January 1, 1999.
-13-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: May 15, 1998
800 TRAVEL SYSTEMS, INC.
(Registrant)
By: /s/ Mark D. Mastrini
-------------------------------
Mark D. Mastrini, President and
Chief Operating Officer
-14-
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