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 June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from............ to ............
Commission File No. 0-25357
TRAVELNOW.COM INC.
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(Name of Small Business Issuer in Its Charter)
Florida 59-3391244
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(State of Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
318 Park Central East, Suite 306, Springfield, MO 65806
-------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(417) 864-3600
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(Issuer's Telephone Number, Including Area Code)
SENTRY ACCOUNTING, INC.
321 N. Kentucky Avenue, Suite 1, Lakeland, FL 33801
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(Former name, former address and former fiscal year, if changed
since last year.)
Form 10-QSB Report for period ended June 30, 1999 Page 1 of 12
<PAGE>
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 August 10, 1999 TravelNow.com
Inc. had 10,324,304 shares of Common Stock outstanding, no par value.
Form 10-QSB Report for period ended June 30, 1999 Page 2 of 12
<PAGE>
FINANCIAL STATEMENTS
SENTRY ACCOUNTING, INC.
UNAUDITED BALANCE SHEET
ASSETS
------
June 30, 1999
-------------
Current Assets $ 0
--------
Other Assets:
Deferred Taxes 2,834
--------
TOTAL ASSETS $ 2,834
========
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
Current Liability $ 0
--------
Stockholders' Equity:
Common stock, no par value; 50,000,000 shares authorized;
2,491,000 shares issued and outstanding 85,500
Accumulated deficit (82,666)
--------
TOTAL STOCKHOLDERS' EQUITY 2,834
--------
TOTAL LIABILITY & STOCKHOLDERS' EQUITY $ 2,834
========
See notes to financial statements.
Form 10-QSB Report for period ended June 30, 1999 Page 3 of 12
<PAGE>
SENTRY ACCOUNTING, INC.
UNAUDITED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
-------------------- --------------------
6/31/99 6/31/98 6/31/99 6/31/98
------- ------- ------- -------
Revenues $ 0 $16,500 $ 0 $22,450
General Expense 333 12,411 3,527 14,290
------- ------- ------- -------
Net Income/(Loss) (333) 4,089 (3,527) 8,160
Income Tax/(Benefit) (127) 1,554 (1,341) 3,101
------- ------- ------- -------
Net Income/(Loss) $ (206) $ 2,535 $(2,186) $ 5,059
======= ======= ======= =======
See notes to financial statements.
Form 10-QSB Report for period ended June 30, 1999 Page 4 of 12
<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 (7,669)
--------- --------- ---------
Balance, December 31, 1997 1,000 100 (4,166)
Private sale of shares: 2,000,000 68,600 0
Reg. D, Rule 504 offering:
For services rendered 120,000 3,600 0
For shares sold 370,000 13,200 0
Net loss -- 0 (76,314)
--------- --------- ---------
Balance, December 31, 1998 2,491,000 85,500 (80,480)
Net loss -- 0 (2,186)
--------- --------- ---------
Balance, June 30, 1999 2,491,000 $ 85,500 $ (82,666)
========= ========= =========
See notes to financial statements.
Form 10-QSB Report for period ended June 30, 1999 Page 5 of 12
<PAGE>
SENTRY ACCOUNTING, INC.
STATEMENT OF CASH FLOWS
Six Months Twelve Months
Ended Ended
6/31/99 12/31/98
------- --------
Operating Activities:
Cash received from clients $ 0 $ 24,050
Cash paid to:
Supplies and employees (989) (36,425)
Lenders 0 (65)
-------- --------
Net cash used in operating activities (989) (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 (989) 960
Cash at Beginning of period 989 29
--------
Cash at end of period $ 0 $ 989
======== ========
See notes to financial statements.
Form 10-QSB Report for period ended June 30, 1999 Page 6 of 12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - GENERAL
- ----------------
The financial statements as of June 30, 1999 and for the six months then ended
are unaudited and, in the opinion of TravelNow.com Inc. ("TravelNow"), 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.
TravelNow'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
- ---------------------------------
TravelNow (f/k/a Sentry Accounting, Inc.), a Florida corporation, was
incorporated on June 21, 1996 by Donald R. Mastropietro, its sole shareholder,
under the name Sentry Communication Services, Inc. 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 and the company changed its name and focus and began providing
accounting and financial services to various private and public companies. From
October 1996 through the end of this reporting period, the company's sole form
of revenue was derived from providing accounting services. In September 1998,
2,000,000 shares of common stock were issued to TBC Investments, Inc. for $200.
Pursuant to an Agreement and Plan of Reorganization further described in Note D
herein, the name of the company was changed to TravelNow.com Inc. on July 27,
1999.
NOTE C - COMMON & PREFERRED STOCK
- ---------------------------------
Common Stock
- ------------
TravelNow has 50,000,000 shares of common stock authorized with no par value, of
which 2,491,000 shares were issued and outstanding as of June 30, 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, the company 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 June 30, 1999 Page 7 of 12
<PAGE>
On October 15, 1998, the company entered into a consulting agreement with
Progressive Ventures International, Inc. ("Progressive"), whereby Progressive
would perform certain consulting services 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 the company's first
offering which took place during the period from October 16 through October 28,
1998.
Commensurate with the closing of an Agreement and Plan of Reorganization further
described in Note D herein, an aggregate of 1,475,533 shares of restricted
common stock were issued to the shareholders of TravelNow.com Inc., a private
Missouri corporation ("TravelNow Missouri"), and 2,000,000 restricted common
shares which were controlled by Sentry's management were retired.
The Board of Directors authorized a stock dividend of 4.25 shares for each share
of common stock held by its shareholders as of the record date of July 28, 1999.
No fractional shares were issued to any shareholder. Each shareholder entitled
to receive a fractional share received a full share if the fractional share was
equal to or exceeded fifty percent (50%) and if the fractional share was less
than fifty percent (50%), the fractional share was canceled. The number of
shares issued under this stock dividend were 8,357,771 bringing the total number
of shares outstanding as of this filing to 10,324,304.
Preferred Stock
- ---------------
As of June 30, 1999 there was no preferred stock authorized. Pursuant to the
Agreement and Plan of Reorganization further described in Note D herein,
25,000,000 shares of preferred stock were authorized by the shareholders,
although no series have been designated to date and no preferred shares have
been issued.
NOTE D - SUBSEQUENT EVENT
- -------------------------
Pursuant to the terms of an Agreement and Plan of Reorganization (the
"Agreement") by and between Sentry Accounting, Inc., a public Florida
corporation ("Sentry") and TravelNow Missouri, Sentry acquired 100% of the
issued and outstanding common stock of TravelNow Missouri for an aggregate of
1,475,533 shares of common stock. The transaction closed on July 23, 1999 with
an effective date of July 27, 1999. Pursuant to the Agreement, Sentry issued an
aggregate of 1,475,533 shares of Common Stock to the TravelNow Missouri
shareholders and retired 2,000,000 shares owned by Sentry's previous management.
After giving effect to the merger, the new combined entity had 1,966,533 shares
issued and outstanding, of which 75% was owned by the shareholders of TravelNow
Missouri.
Form 10-QSB Report for period ended June 30, 1999 Page 8 of 12
<PAGE>
In connection therewith, an Information Statement was mailed to Sentry's
shareholders of record as of July 2, 1999, in connection with an action taken by
written consent to authorize and approve an 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 the company and to permit the Board of Directors to establish the attributes
of any series of Preferred Stock prior to the issuance of any such series. All
actions outlined in the Information Statement were consummated as of July 23,
1999 with an effective date of July 27, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- -----------------------------------------------------------------
Results of Operations
- ---------------------
During the six month period ended June 30, 1999, there was no revenue, which was
down $16,500 from the same period in 1998. The decrease was a result of Sentry's
inability to obtain new clients.
Loss before taxes for the six months ended June 30, 1999 was $3,527, which
represents a $11,687 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
half of 1999.
Liquidity and Capital Resources
- -------------------------------
Pursuant to the terms of the Agreement, Sentry acquired 100% of the issued and
outstanding common stock of TravelNow Missouri for an aggregate of 1,475,533
shares of common stock.
In conjunction with the Company's merger with TravelNow Missouri, the Company
transferred its accounting and financial services business to a major
stockholder of the Company in exchange for two million (2,000,000) shares of the
Company's common stock, no par value, and a cash payment of Two Thousand Dollars
($2,000.00).
TravelNow's remaining business is a proprietary online travel reservation system
that includes information on hotels, car rentals, airfares and Eurail passes.
The "TravelNow Reservation Engine" utilizes both in-house and commercial
technology to provide online travel reservation services. TravelNow has access
to 40,000 hotel properties, 60 car rental companies and 200 airlines.
As a result of the merger described elsewhere in this Form 10-QSB, TravelNow
received an equity contribution of cash in the amount of Five Hundred Thousand
Dollars ($500,000.00) The only other sources of cash were a Line of Credit of
Fifty Thousand Dollars ($50,000.00) and operating revenues. The Line of Credit
was paid off subsequent to June 30, 1999. TravelNow has no other long- or
short-term debt at the date of filing this Form 10-QSB.
Form 10-QSB Report for period ended June 30, 1999 Page 9 of 12
<PAGE>
Management of TravelNow has not sought or obtained additional equity or debt
financing as of the date of this report. Thus, all of the cash requirements of
the Company will need to be funded by the Company's operating revenues. There
can be no assurance that the operating revenues of the Company will continue to
be sufficient to fund the Company's operations during the next twelve (12)
months. In the event that operating revenues are insufficient and the Company is
unable to obtain debt or equity financing favorable to the Company, the
continued operating viability of the Company will be seriously challenged. In
such case, the Company may not be able to maintain and develop the technology
necessary for TravelNow to remain competitive as an Internet travel and
technology company.
On or before October 12, 1999, the Company must file as a part of Form 8-K-A
audited financial statements for the fiscal years ending March 31, 1998, and
March 31, 1999, and the unaudited calendar quarters ending June 30, 1998, and
1999.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
- --------------------------
TravelNow is not a party to any legal action.
ITEM 2. CHANGES IN SECURITIES.
- ------------------------------
On July 27, 1999, Articles of Amendment to the Articles of Incorporation were
filed with the Florida Department of State changing the name of the company to
"TraveNow.com Inc." and authorizing a class of Preferred Stock, consisting of
25,000,000 authorized shares, no par value and authorizing the Board of
Directors to issue such Preferred Stock in one or more series, without further
approval of the stockholders and allowing the Board of Directors to establish
the attributes of any series of Preferred Stock prior to the issuance of any
such series.
Subsequent to the Agreement discussed herein, the Board of Directors authorized
a stock dividend of 4.25 shares for each share of common stock held by its
shareholders as of the record date of July 28, 1999. No fractional shares were
issued to any shareholder. Each shareholder entitled to receive a fractional
share received a full share if the fractional share was equal to or exceeded
fifty percent (50%) and if the fractional share was less than fifty percent
(50%), the fractional share was canceled. The number of shares issued under this
stock dividend were 8,357,771 bringing the total number of shares outstanding as
of this filing to 10,324,304.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
- ----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
No matters were submitted for a vote of security holders during the period of
this report; however, after June 30, 1999, the following action was taken by
TravelNow. On July 13, 1999, an Information Statement was mailed to the
shareholders of record as of July 2, 1999, in connection with the proposed
acquisition of TravelNow Missouri and the appointment of certain persons to the
Board of Directors other than at a meeting of the shareholders to authorize and
Form 10-QSB Report for period ended June 30, 1999 Page 10 of 12
<PAGE>
approve amendments to the company'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 and permit the Board of Directors to
establish the attributes of any series of Preferred Stock prior to the issuance
of any such series. At the time of the mailing, members of the Board of
Directors and officers owned or had voting authority for 2,001,000 shares of
Common Stock. Those shareholdings represented approximately 80.2894% of the
total outstanding votes of all issued and outstanding Common Stock and were
sufficient to take the proposed action as of the record date of July 2, 1999.
Dissenting shareholders did not have any statutory appraisal rights as a result
of the action taken. All members of the Board of Directors executed written
consents in favor of the proposed action on behalf of the shares that they owned
and for which they had voting authority. The Board of Directors did not solicit
any proxies or consents from any other shareholders in connection with this
action.
Pursuant to the provisions of Florida law and the company's Certificate of
Incorporation, the amendments required the approval of a majority of such
shares. Accordingly, the vote of the Board was sufficient to approve these
matters.
ITEM 5. OTHER INFORMATION
- -------------------------
The Articles of Incorporation were amended after June 30, 1999, to provide for
twenty-five million (25,000,000) shares of Preferred Stock, no par value. The
Preferred Stock provisions give the Board of Directors broad authority to issue
shares of Preferred Stock in one or more series and to determine such matters as
the dividend rate and preference, voting rights, conversion privileges,
redemption provisions, liquidation preferences and other rights of each series.
Each share of Common Stock is entitled to one vote. The holder of any series of
Preferred Stock issued in the future will be entitled to such voting rights as
may be specified by the Board of Directors. None of the Preferred Shares has
been issued as of the date of this report, and the Company has no plans,
arrangements, understanding or commitments with respect to the issuance of such
Shares at this time.
ITEM 6. EXHIBITS, REPORTS ON FORM 8-K
- -------------------------------------
(a) Exhibits
Exhibit # Description of Document
- --------- -----------------------
2.01 Agreement and Plan of Reorganization by and between Sentry
Accounting, Inc. and TravelNow.com Inc. dated July 23, 1999.(b)
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)
3.04 Articles of Amendment to the Articles of Incorporation filed July
27, 1999.(b)
10.1 Consulting Agreement between Sentry Accounting, Inc. and
Progressive Ventures International, Inc. dated October 15,
1998.(a)
Form 10-QSB Report for period ended June 30, 1999 Page 11 of 12
<PAGE>
(b) Reports on Form 8-K
Report on Form 8-K filed August 6, 1999.
Report on Form 8-K-A filed August 10, 1999.
- ----------
(a) Filed as an exhibit to Report on Form 10-SB/A dated May 18, 1999.
(b) Filed as an exhibit to Report on Form 8-K dated August 6, 1999.
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.
TRAVELNOW.COM INC.
------------------
(Registrant)
Date: August 16, 1999 /s/ Jeff Wasson
- --------------------- ---------------
Jeff Wasson
Chairman of the Board and President
Date: August 16, 1999 /s/ Chris Noble
- --------------------- ---------------
Chris Noble
Chief Executive Officer
Form 10-QSB Report for period ended June 30, 1999 Page 12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,834
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 85,500
<OTHER-SE> (82,666)
<TOTAL-LIABILITY-AND-EQUITY> 2,834
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,527
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,527)
<INCOME-TAX> (1,341)
<INCOME-CONTINUING> (2,186)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,186)
<EPS-BASIC> (.001)
<EPS-DILUTED> (.001)
</TABLE>
