U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from.......... to..........
Commission File No. 0-25357
SENTRY ACCOUNTING, INC.
-----------------------
(Name of Small Business Issuer in Its Charter)
Florida 59-3391244
------- ----------
(State of Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
321 N. Kentucky Avenue, Suite 2, Lakeland, FL 33801
- --------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(941) 683-5523
--------------
(Issuer's Telephone Number, Including Area Code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last year.)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of July 19, 1999, Sentry
Accounting, Inc. had 2,941,000 shares of Common Stock outstanding, no par value.
Form 10-QSB Report for period ended March 31, 1999 Page 1
<PAGE>
SENTRY ACCOUNTING, INC.
UNAUDITED BALANCE SHEET
ASSETS
------
March 31, 1999
--------------
Current Assets:
Cash $ 7
Prepaid expenses 625
--------
Total current assets 632
Other Assets:
Other assets 2,708
--------
TOTAL ASSETS $ 3,340
========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Other current liabilities $ 300
Stockholders' Equity:
Common stock, no par value; 50,000,000 shares authorized;
2,491,000 shares issued and outstanding
Accumulated deficit 85,500
(82,460)
--------
TOTAL STOCKHOLDERS' EQUITY 3,040
--------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 3,340
========
See notes to financial statements.
Form 10-QSB Report for period ended March 31, 1999 Page 2
<PAGE>
SENTRY ACCOUNTING, INC.
UNAUDITED STATEMENTS OF OPERATIONS
Three Months Ended
--------------------------
3/31/99 3/31/98
------- -------
Revenues $ 0 $ 5,950
General Expense 3,194 1,879
------- -------
Net Income/(Loss) (3,194) 4,071
Income Tax/(Benefit) (1,214) 1,547
------- -------
Net Income/(Loss) $(1,980) $ 2,524
======= =======
See notes to financial statements.
Form 10-QSB Report for period ended March 31, 1999 Page 3
<PAGE>
SENTRY ACCOUNTING, INC.
UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock
------------------------ Accumulated
Shares $ Deficit
------ ----- -------
Balance, December 31, 1996 1,000 $ 100 $ 3,503
Net Loss 0 0 (7,669)
--------- --------- ---------
Balance, December 31, 1997 1,000 100 (4,166)
Private sale of shares: 2,000,000 68,600
Reg. D, Rule 504 offering:
For services rendered 120,000 3,600
For shares sold 370,000 13,200
Net loss 0 0 (76,314)
--------- --------- ---------
Balance, December 31, 1998 2,491,000 $ 85,000 (80,480)
Net loss 0 0 (1,980)
--------- --------- ---------
Balance, March 31, 1999 2,491,000 $ 85,500 $ (82,460)
========= ========= =========
See notes to financial statements.
Form 10-QSB Report for period ended March 31, 1999 Page 4
<PAGE>
SENTRY ACCOUNTING, INC.
STATEMENT OF CASH FLOWS
Three Months Twelve Months
Ended Ended
3/31/99 12/31/98
------- --------
Operating Activities:
Cash received from clients $ 0 $ 24,050
Cash paid to:
Supplies and employees (982) (36,425)
Lenders 0 (65)
-------- --------
Net cash used in operating activities (982) (12,400)
-------- --------
Financing Activities:
Sale of capital stock 0 13,400
-------- --------
Net cash provided by financing activities 0 13,400
-------- --------
Net increase (decrease) in cash (982) 960
Cash at Beginning of period 989 29
-------- --------
Cash at end of period $ 7 $ 989
======== ========
See notes to financial statements.
Form 10-QSB Report for period ended March 31, 1999 Page 5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - GENERAL
- ----------------
The financial statements as of March 31, 1999 and for the three months then
ended are unaudited and, in the opinion of Sentry Accounting, Inc. ("Sentry"),
reflect all adjustments necessary for a fair presentation of such data, and have
been prepared on a basis consistent with the December 31, 1998 Audited Financial
Statements. All such adjustments made were of a normal recurring nature.
Sentry's significant accounting policies are described in the notes to the
December 31, 1998 Audited Financial Statements and there have been no material
changes in significant accounting policies from those described therein.
NOTE B - ORGANIZATION AND HISTORY
- ---------------------------------
Sentry, a Florida corporation, was incorporated on June 21, 1996 by Donald R.
Mastropietro, its sole shareholder. Sentry, formerly known as Sentry
Communication Services, Inc., was formed for the purpose of selling telephone
calling cards and other similar products. In October 1996, it was determined
that the telephone calling card business would not be a successful endeavor. In
light of this fact, Sentry changed its name and focus and began providing
accounting and financial services to various private and public companies. From
October 1996 until the present, Sentry's sole form of revenue has been derived
from providing accounting services. In September 1998, Sentry issued 2,000,000
shares of its common stock in exchange for $200 to TBC Investments, Inc.
NOTE C - COMMON & PREFERRED STOCK
- ---------------------------------
Sentry has 50,000,000 shares of common stock authorized with no par value, of
which 2,491,000 shares have been issued as of March 31, 1999.
The stockholders' equity section reflects the initial issuance of 1,000 shares
of common stock, which were issued to Donald R. Mastropietro for a consideration
for $100. On September 30, 1998, 2,000,000 shares of common stock were sold to
TBC Investments, Inc. at a substantial discount for $200 and $68,400
representing the discount was recorded to compensation expense for 1998.
In October and November 1998, Sentry conducted two stock offerings covered under
Regulation D, Rule 504. The first offering, which took place during the period
from October 16 through October 28, 1998, consisted of 340,000 shares of common
stock at $0.03 per share totaling $10,200. The second offering, which took place
during the period from November 2 through November 10, 1998, consisted of 30,000
shares of common stock at $0.10 per share totaling $3,000.
Form 10-QSB Report for period ended March 31, 1999 Page 6
<PAGE>
On October 15, 1998, Sentry entered into a consulting agreement with Progressive
Ventures International, Inc. ("Progressive"), whereby Progressive would perform
certain consulting services for Sentry in exchange for a fee of $4,600. Payment
for said fee was made by the payment of $1,000 in cash and the issuance of
120,000 shares of common stock at $0.03 per share, issued pursuant to Regulation
D, Rule 504. Said issuance was made as a part of Sentry's first offering which
took place during the period from October 16 through October 28, 1998. Of the
$3,600, $3,275 had been invoiced by Progressive by March 31, 1999, leaving a
prepaid expense balance of $325 as reflected on the accompanying Balance Sheet.
NOTE D - PROPOSED MERGER WITH TRAVELNOW.COM INC.
- ------------------------------------------------
Sentry has been negotiating the terms of an Agreement and Plan of Reorganization
(the "Agreement") to acquire (the "Acquisition") 100% of the issued and
outstanding common stock of TravelNow.com Inc. for an aggregate of 1,475,533
shares of common stock of Sentry. Sentry anticipates that the Acquisition will
close on or before July 30, 1999. Pursuant to the Agreement, Sentry will issue
an aggregate 1,475,533 shares of Common Stock to the TravelNow.com Inc.
shareholders and retire certain shares owned by present management. Accordingly,
assuming the closing of the Acquisition, the new combined entity will have
approximately 1,966,533 shares issued and outstanding. Based on the negotiations
to date, upon the closing of the Acquisition, the shareholders of TravelNow.com
Inc. will own approximately 75% of the outstanding Common Stock of Sentry and
will be able to elect new directors and officers either at a meeting of
shareholders or by written consent.
In connection therewith, an Information Statement was mailed to Sentry's
shareholders of record as of July 2, 1999, in connection with a proposed action
by written consent to authorize and approve: Amendment to Sentry's Certificate
of Incorporation to (a) change the name to "TravelNow.com Inc."; and (b) to
authorize a class of Preferred Stock, consisting of 25,000,000 authorized
shares, no par value and to authorize the Board of Directors to issue such
Preferred Stock in one or more series, without further approval of stockholders
of Sentry and permit the Board of Directors to establish the attributes of any
series of Preferred Stock prior to the issuance of any such series. Members of
the Board of Directors and officers own or have voting authority for 2,001,000
shares of Common Stock. These shareholders represent approximately 80.2894% of
the total outstanding votes of all issued and outstanding Common Stock of Sentry
and are sufficient to take the proposed action on the record date of July 2,
1999. All members of the Board of Directors have indicated their intentions to
execute written consents in favor of the proposed action on behalf of the shares
of Sentry, which they own or for which they have voting authority. The Board of
Directors did not solicit any proxies or consents for any other shareholders in
connection with this action.
Form 10-QSB Report for period ended March 31, 1999 Page 7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- -----------------------------------------------------------------
Results of Operations
- ---------------------
During the three month period ended March 31, 1999, there was no revenue, which
was down $5,950 from the same period in 1998. The decrease was a result of
Sentry's inability to obtain new clients.
Loss before taxes for the three months ended March 31, 1998 was $3,195, which
represents a $7,266 reduction as compared to the same period in 1998. This loss
is directly related to the fact that Sentry generated no revenue in the first
quarter of 1999.
Liquidity and Capital Resources
- -------------------------------
Sentry has met its cash requirements to date through funds derived from
operations, debt and equity. Sentry has been negotiating the terms of an
Agreement to acquire 100% of the issued and outstanding common stock of
TravelNow.com Inc. for an aggregate of 1,475,533 shares of common stock of
Sentry. Sentry anticipates that the transaction will close on or before July 30,
1999, at which time the cash requirements of Sentry will be met through
revenues. However, if the closing of the proposed merger does not materialize,
Sentry will immediately initiate its original business plan that includes an
expansion of the current operations within West Central Florida. It is
anticipated that this expansion will require an additional $15,000 of additional
funds to pay for advertising and to acquire additional computer equipment. It is
anticipated that these funds will be raised through debt financing. Discussions
have been held with two potential funding sources. After completion of this debt
funding, Sentry would anticipate meeting its cash requirements from operations,
however, there can be no assurance that Sentry will be able to raise the
required funds to facilitate the expansions proposed. Sentry has no plan to
spend funds for any product research or research and development. Sentry does
not anticipate the sale or purchase of plant or significant equipment other than
the computer equipment discussed above. Sentry intends to lease its employees
from an established employee-leasing firm and does not expect to hire any
significant number of employees during the next twelve months. Based on Sentry's
financial projections, cash requirements for operational expenses and capital
acquisitions for the next twelve months are approximately $170,000.
As of March 31, 1999, Sentry had cash totaling $7. If the closing of the
proposed merger does not materialize, Sentry anticipates that over the next
twelve month period it will incur operating expenses, including salaries, of
approximately $155,000 that it believes will be provided through operational
revenue. Sentry will be required to again raise funds of approximately $25,000
as it begins its expansion outside of the West Central Florida market. Sentry
anticipates these funds to be raised through equity financing from a private
individual, although no commitment has been obtained. There can be no assurance
that funds from operations and outside sources will be sufficient in the near
term or that conditions and circumstances herein may result in additional cash
requirements by Sentry just to sustain operations. In the event of such
developments, attaining financing under such conditions may not be possible, or
even if additional capital may be otherwise available, the terms on which such
capital may be available may not be commercially feasible or advantageous.
Form 10-QSB Report for period ended March 31, 1999 Page 8
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
- --------------------------
Sentry is not a party to any legal action.
ITEM 2. CHANGES IN SECURITIES.
- ------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
- ----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
- -------------------------
None.
ITEM 6. EXHIBITS, REPORTS ON FORM 8-K
- -------------------------------------
(a) Exhibits
Exhibit # Description of Document
- --------- -----------------------
3.01 Articles of Incorporation filed June 27, 1996.(a)
3.02 Articles of Amendment to the Articles of Incorporation filed November
25, 1996.(a)
3.03 By-Laws of the Registrant as presently in effect.(a)
10.1 Consulting Agreement between Sentry Accounting, Inc. and Progressive
Ventures International, Inc. dated October 15, 1998.(a)
(b) Reports on Form 8-K
None.
- ----------
(a) Filed as an exhibit to Report on Form 10-SB/A dated May 18, 1999.
Form 10-QSB Report for period ended March 31, 1999 Page 9
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this 10-QSB report to be signed on its behalf by the undersigned thereunto duly
authorized.
SENTRY ACCOUNTING, INC.
-----------------------
(Registrant)
Date: July 20, 1999 /s/ Teresa B. Crowley
---------------------
Teresa B. Crowley
Chairman, President & CEO
Date: July 20, 1999 /s/ Donald R. Mastropietro
--------------------------
Donald R. Mastropietro
Vice President of Finance & CFO
Form 10-QSB Report for period ended March 31, 1999 Page 10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 7
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 632
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,340
<CURRENT-LIABILITIES> 300
<BONDS> 0
0
0
<COMMON> 85,500
<OTHER-SE> (82,460)
<TOTAL-LIABILITY-AND-EQUITY> 3,340
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,194)
<INCOME-TAX> (1,214)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,980)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
