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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO FORM 10SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
TRAVELSHORTS.COM, INC.
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(Exact name of Company as specified in its charter)
WASHINGTON 54-0231483
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3235 W. 4th Ave., Suite 101
Vancouver, British Columbia, Canada V6K 1R8
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 604-736-4989
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
50,000,000 Shares of Common Stock
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(Title of class)
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TABLE OF CONTENTS
Page
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COVER PAGE ....................................................... 1
TABLE OF CONTENTS ................................................ 2
PART I ........................................................... 3
DESCRIPTION OF BUSINESS ..................................... 3
DESCRIPTION OF PROPERTY ..................................... 18
DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES ..... 18
REMUNERATION OF DIRECTORS AND OFFICERS ...................... 20
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN
SECURITYHOLDERS ........................................... 21
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS ... 22
SECURITIES BEING REGISTERED ................................. 22
PART II .......................................................... 24
MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS ............... 24
LEGAL PROCEEDINGS ........................................... 24
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ............... 24
RECENT SALES OF UNREGISTERED SECURITIES ..................... 24
INDEMNIFICATION OF DIRECTORS AND OFFICERS ................... 25
PART F/S ......................................................... 27
FINANCIAL STATEMENTS ........................................ 27
PART III ......................................................... 28
INDEX TO EXHIBITS ........................................... 28
SIGNATURES ....................................................... 29
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PART I
The issuer has elected to follow Form 10-SB, Disclosure Alternative 2.
Item 6. Description of Business
We are in the process of developing an Internet business that will
provide information and 360 degree panoramic photography ("Virtual
Reality" or "VR") for individual hotel clients, chains and major
internet travel booking portals. The web site can be accessed at
www.travelshorts.com using the user name "robert" and the password
"inge01" during our development period. We expect to launch our web
site in December 2000.
Incorporation
We were incorporated in Washington State on June 7, 1989 under the
name P.L.D.F.E.T., Inc. After an administrative dissolution on
September 20, 1999, we were reinstated on January 26, 2000.
Effective March 17, 2000, we changed our name from P.L.D.F.E.T.,
Inc. to Travelshorts.com, Inc. to more accurately reflect our
current business operations.
Subsidiaries
We do not have any subsidiaries.
Operations
We are in the developmental stage, conducting product development
and creating market strategies.
We have built our prototype web site and have shot VR photography
for the Westin, the Hyatt, the Pan Pacific Hotel and the Hotel
Vancouver. We do not have income producing agreements with these
hotels, but are currently soliciting their head offices for such
agreements to shoot further VR.
Intellectual Property And Other Proprietary Rights
We have no intellectual property rights, except our rights in the
Internet domain name www.travelshorts.com and the 26 VR hotel
pictures we have shot. We insist on keeping the rights to the
VR's that we shoot to create value for the company going forward.
Principal Products and Services
We will provide an Internet web site for travelers to view
potential accommodations and related amenities before they reserve
their travel plans. The web site will contain a comprehensive media
rich VR library of hotel accommodations and related amenities
(lobby's, pool, high end suites). The
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library will serve our web site as well as complement other large
online travel sites that may want to use our library instead of
spending money to develop their own. Eventually, we will produce
the VR clips with an option to hear them in other languages.
In addition to viewing accommodations, travelers will be able to
make reservations using our web site. For this service, we
currently intend to contract with an outside travel booking company
to accept travel reservations. It is intended that while viewing
our web site, a traveler will be able to reserve their chosen
accommodations by clicking an icon on their computer's screen. The
traveler would then be directly connected to the booking company.
We do not currently have a relationship with a travel-booking
company.
The following are our three expected sources of income:
1. Licensing fees from hotels and hotel chains who want their
accommodations shown on our and/or their web site;
2. Licensing fees from major Internet travel portals to use our
VR on the properties they already are displaying on their sites.
3. Fees from companies outside the hotel industry for shooting
basic VR for web sites. This is viewed as an external cash
flow generator (e.g., local travel bureaus and location
scouts).
Industry Background and Status
The emergence of the Internet has fundamentally changed how
millions of people worldwide share information, communicate and
conduct business. The growth in Internet usage is being driven by a
number of factors, including:
* A large and growing number of household personal computers;
* Easier, faster, and more reliable access to the Internet;
* Improvements in Internet security;
* The rapidly expanding availability of commercial web sites;
and
* An increasing amount of traditional (non-Internet) advertising
promoting the Internet.
Internet travel agency web sites were largely unknown in 1995.
Airlines dominate the travel industry. American, United, and Delta
built the technology systems of the modern travel industry on IBM
mainframes (computers) and dedicated direct computer connections to
its agents and affiliates in the 1960s and 1970s. The airlines
created global distribution systems (GDSs) named Sabre and Galileo
to let travel agents book seats from their own computers. Sabre and
Galileo are currently emerging as new power players because of the
role they play in collecting and offering airline, hotel, and car
rental inventory. All other players being a handful of agencies
compiling tour packages, and an extremely fragmented series of
custom tour coordinators rely on this foundation and all of these
types of companies define the travel industry.
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The travel industry's stability is shifting because the Internet is
changing patterns of demand by offering new technology that creates
a more accessible supply of information and services. Travel
booking web sites like Travelocity and Expedia took advantage of
Internet marketing and the entire industry is responding
aggressively to retain control of existing customer accounts.
Forrester Research reported in March 2000, that North American
business travelers spent US$3 billion online (through the Internet)
for airline tickets, lodging and rental cars in 1999. Forrester
predicts that this component of travelers alone will spend US$20.3
billion by 2004 on these same travel services.
Travel agency sites on the Internet are growing rapidly. The
industry is also consolidating aggressively, which means that the
significant travel booking web sites of the Internet are being
owned by fewer companies. For instance, on March 8, 2000
Travelocity announced that it merged with Previewtravel (another
major travel booking web site), and reported that they will become
the third largest ecommerce (Internet business) web site. On March
17, 2000 Expedia announced that it had acquired two other travel
booking web sites being Travelscape and Vacationspot. According to
a March 21 press release by Expedia, it was the most visited travel
web site in February 2000 with 5.3 million unique visitors.
Marketing
With the increasing competitiveness on the Internet, many firms
have found Internet marketing is not enough. We believe that the
most effective way to utilize the Internet is together with
traditional marketing methods (brochures, mail, print ads, TV,
radio). The problem is cost. Thus, we plan to utilize a mixture of
Internet and traditional marketing strategies, within our limited
budget.
There are a number of things that we are marketing.
1. Our web site. We will market our web site and attempt to bring
as many travelers in as possible. Marketing of the web site will be
done primarily through registration on search engines, strategic
partnering with other Internet sites and some broadcast emails.
2. Our service. We want to market our service to hotels so they
will display their accommodation on our web site. Marketing of our
service will generally involve direct sales made through inside and
outside sales personnel. We anticipate our fee for shooting
footage and pictures at the hotels and placing them on our website
will be US$2000. This is expected to increase to US$3000 by
December 2000. We plan to retain the rights for these VR's to
add value to the company as the inventory grows.
3. Our web site used for advertising by other companies (the Banner
Ads). We will sell advertising space on our web site to other
companies. Marketing of banner advertising will be made largely
through agreements with agencies who re-sell advertising. We also
plan to exchange banner advertising with others to market our site.
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Competition
Travelocity, the largest online travel agency, has the most
extensive video library on a major travel web site. The quality of
their video footage, however, is not consistent in showing and
comparing accommodations. Photo libraries (still pictures) that
appear on the major travel agency web sites may show a sunset,
maybe a group of people having drinks at a table or a picture of a
given hotel. There is thus a need to standardize accommodation
comparisons to allow the prospective traveler to look at
hotels/motels objectively on any of the web sites. It is our belief
that people will want to see specifics regarding the accommodations
provided in a comprehensive video that uses a standardized
approach.
We came to this conclusion after analyzing a list of the highest
rated travel agency web sites. This rating came from the Spring
2000 issue of Forbes, Best of Web. Below we provide a list of these
sites together with a brief summary of the picture and video
content provided. Web sites that did not include accommodation
booking or overviews of hotels were not included.
1. 1Travel (www.1travel.com) - no pictures and no video
2. 4allinclusives (www.4allinclusives.com) - some pictures,
but no video
3. BizTravel (www.biztravel.com) - no video and no pictures
4. Captain cook (www.800-800-cruise.com) - no video and no
pictures
5. Cheaplodging (www.cheaplodging.com) - some pictures, no video
6. Fodor (www.fodors.com) - uses Travelocity video library
7. International Travel Network (www.itn.com) - no pictures
and no video
8. Kasbah (www.kasbah.com) - some pictures, no video
9. MSN Expedia (www.expedia.msn.com) - some pictures, but no video
10. Preview Travel (www.previewtravel.com) - good photos and
large video library of destinations only (merging with
Travelocity)
11. priceline.com (www.priceline.com) - no pictures or video
12. Travelbug (www.travelbug.com) - no pictures or video
13. Travelocity (www.travelocity.com) - largest travel web
site on the Internet with destination videos and
pictures.
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14. Travelquest (www.travelquest.com) - no pictures or video
(acquired by Expedia)
15. Travelscape.com (www.travels.com) - all high end
accommodations and good pictures, no video
16. Trip.com (www.trip.com) - no pictures and no video
17. Hotelview (www.hotelview.com) - all video and audio with
link to Pegasus (a GDS as discussed above) booking
system.
Hotelview.com is the closest example of the product and service
that we are attempting to create, but it does not accomplish the
comprehensive standardized approach that we want to use.
Although there are a number of other Internet travel web sites that
use good quality video on their sites, they are not well known. We
hope to position ourselves so that other travel web sites will want
to utilize our video library for promoting their web site.
Technology
360 Degree Photography
360 degree photography is a technology that allows a web viewer to
see a 360 degree panoramic view of a given area or, in our case, an
accommodation. The user is able to interact with the panoramic
view, by choosing to pan up, down, right or left, and zoom in or
out The leading platforms for delivering these 360 degree
panoramas are LivePicture, Hot Media, IPIX, and QuickTime VR.
Download time is usually less than 10 seconds for users with
broadband connections (Cable, DSL, etc.), 10-20 seconds for 56K
modems, and 30 seconds or more for slower modems. We have chosen
to utilize the Quick Time VR platform to display VR nodes to
consumers as it is the oldest and most established VR technology on
the Internet.
360 Degree Camera Equipment
360 degree photography requires an analog camera, tripod, a 360
degree camera mount, software and experience.
Development of QuickTime VR files
Successful and efficient development of QuickTime VR files requires
a certain discipline and understanding of the overall development
process. This process can be divided into different stages, with
each stage depending on the efforts of previous stages. Invariably,
shortcuts taken during one stage will result in costly rework
processing during later stages. These stages and the process itself
can be described as follows:
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1. Story boards are produced and panorama movie specifications
are created.
2. A production timeline and budget are prepared.
3. A location is scouted to determine lighting conditions,
including sun position, whether supplemental lighting
instruments will be required, what is the power access
situation and the like.
4. Source images for panoramas are captured using the highest
quality wide angle lenses and cameras. While great advances
have been made in digital cameras, none accommodate extreme
wide angle lenses, e.g. a 16mm rectilinear lens, nor can
digital cameras render an image as accurately as today's film
stocks. Capturing images to film, scanning and archiving
images to PhotoCD currently represents the best overall image
quality. We utilize a customized Peace Rivers Studio tripod
head with a Carl Zeiss 16mm lens.
5. Once the images are photographed, Apple's QuickTime VR
Authoring Studio is used to combine and integrate the scanned
photographs into a QuickTime VR file. This stage reflects the
main computer-based tasks of QTVR production. The Authoring
Studio blends the seams between the separate photographs and
wraps the image onto a cylinder, creating a 360 degree
panorama.
6. The panorama is compressed and converted into a fully
functional QuickTime VR file. A QuickTime VR panorama can
exists as a stand alone node, providing a single 360degree
view of a location. Multiple nodes within a location is
referred to as a Scene. A Scene provides multiple views
within the location, in effect, providing the end user the
opportunity to move around the location and view it from
different angles. The QuickTime VR Authoring Studio has the
ability to link the different nodes together to create a
complete, stand-alone QTVR Scene.
7. The VR files are integrated into a website. VR files, URL's
and author defined data can be linked to different nodes to
define scenes and linked to other websites.
Our photographers capture multiple nodes within a location (e.g.
views of a room, views of a dining facility), but we will initially
only provide single views or nodes for download because of current
limitations on Internet bandwidth. These will be replaced with
Scenes containing multiple nodes as bandwidth increases. Our
database of VR files will be archived in anticipation of bandwidth
expansion.
Compatibility and Portability
Any computer with a QuickTime plug-in can view VR files. More than
eighty percent of computers in use today have a QuickTime plug-in
and are able to view VR's. End users are able to pan, rotate and
zoom the image. Film and process images are tracked precisely using
Apple Script and
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management systems integrated within the VR Authoring Studio. If an
image or set of images is updated, changed or rescaled, the management
system automatically rebuilds the nodes and scenes to accommodate the
changes. Much of the image processing and manipulation is automated,
increasing production efficiency and lowering costs.
QuickTime VR
QuickTime VR is based on QuickTime technology for dynamic data. A
VR panorama movie saved through JPEG image compression can be as
little as 50 kilobytes in size. This means that a QuickTime VR
scene can be downloaded from a web site quickly even with 28.8
connectivity. Furthermore, the latest version of QuickTime VR
introduces online streaming, i.e. VR panoramas appear as soon as
they begin to download. This is accomplished with low-resolution
preview tracks and by reordering the data in the QuickTime VR so
the separate frames can be displayed as they are downloaded. This
enables the author to use larger files than before, since the user
will have something to look at while the movie is downloading. As
the data continues to stream, the panorama increases image
resolution.
Eventually, as broadband becomes standard, the same archived VR's
can be repurposed to include higher resolution imagery, as well as,
multiple nodes (views) within a scene. Multiple nodes within a
scene allows for a virtual "walk through" allowing the end-users to
navigate with even greater freedom.
Employees
We currently have 4 full time employees and 3 part time employees.
Risk Factors
We face substantial risks in executing our business plan and
achieving revenues. The following risks are material risks that we
face. If any of the following risks occur, our business and our
operating results and financial condition could be seriously
harmed:
Limited Assets
We have limited assets and will require significant capital to
complete our research and development programs and initial
operations period. We do not know the exact specific financial
requirements of the projects, products or ventures in which we may
eventually participate, and therefore do not know what our exact
capital needs will be. In addition, we may incur substantial costs
in connection with any research and/or negotiations for business
opportunities, which may deplete our assets.
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Trademarks and Protection of Proprietary Technology
Our success may depend in part on our ability to obtain and enforce
intellectual property protection for our technology in both the
United States and other countries. To date, we have not filed any
trademark applications in the United States Trademark Office.
No assurance can be given that trademarks, when applied for, will
issue. In addition, no assurance can be given that any trademarks
acquired by us will not be challenged, invalidated or circumvented,
that the rights granted under trademarks will provide competitive
advantages to us, or that our competitors will not independently
develop or trademark products that are substantially equivalent or
superior to our products. Furthermore, the possibility exists that
we could be found to infringe on trademarks held by others. We may
have to go to court to defend our trademarks, to prosecute
infringements, or to defend ourselves from infringement claims by
others.
Trademark litigation is expensive and time-consuming, and can be
used by well-funded adversaries as a strategy for depleting the
resources of a small company such as us. There is no assurance that
we will have sufficient resources to successfully prosecute our
interests in any litigation that may be brought.
Our Short Operating History Makes Our Business Difficult to
Evaluate
We have only just begun developing our business under our current
business plan, and, accordingly, have no operating history upon
which to base an evaluation of our business and prospects.
Consequently, our business and prospects must be considered in
light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development,
particularly companies in new and rapidly evolving markets such as
the Internet. To address these risks, we must successfully
implement our business plan and marketing strategies. We may not,
however, be able to successfully implement all or some parts of our
business strategies or successfully address the risks and
uncertainties that we encounter. In such a situation, our results
of operation would be negatively effected and our business could
fail.
We Have No Revenues
We have no revenues and no products or services that we can sell at
the present time. Future revenues will depend on our ability to
develop a viable internet service and thereafter to market that
service. There is no assurance that we will meet our objectives or
earn any revenues. We are engaged in business for profit, but
cannot predict future profitability.
Operating Results Are Difficult to Predict
Our future financial results are uncertain due to a number of
factors, many of which are outside our control. These factors
include:
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* The fact that we have not finalized development of our
internet service;
* The amount and timing of costs relating to development of our
internet service;
* The announcement or introduction of competing products of
competitors; and
* The general economic conditions and economic conditions
specific to the Internet commerce industry.
Additional Financing
We will require additional financing in order to complete our
business plan. We have no agreements for additional financing and
we can provide no assurance that additional funding will be
available to us on acceptable terms in order to enable us to
complete our plan of operations.
Our capital requirements depend on numerous factors, including the
rate of market acceptance of our services, our ability to maintain
and expand our customer base, the level of resources devoted to
developing and expanding our marketing and sales organization and
our research and development activities, the availability of
hardware and software provided by third-party vendors, the rate of
expansion of our network infrastructure and other factors. The
timing and amount of such capital requirements cannot accurately be
predicted.
If capital requirements vary materially from those currently
planned, we may require additional financing. We have no
commitments for any additional financing, and there can be no
assurance that any such commitments can be obtained on favorable
terms, if at all. Any additional equity financing may dilute the
interest of our stockholders, and debt financing, if available, may
involve restrictive covenants with respect to dividends, raising
future capital and other financial and operational matters.. We
will not be able to continue operations if additional financing is
not obtained.
We Carry No Insurance Policies.
We currently carry no policies of insurance to cover any type of
risk to our business.
Liquidity
We plan to run at a loss for at least 18 months. This is not
uncommon for a startup Internet company. No major travel web sites
we have studied are profitable at this time due to heavy
infrastructure investment. This means that we will rely on our
continued fund raising efforts for an indefinite period of time.
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Government Regulation Generally
The law relating to the Internet business and operations is
evolving, and no clear precedents have been established. In
addition, a number of legislative and regulatory proposals under
consideration by federal, state, local and foreign governmental
organizations may lead to laws or regulations concerning online
content, user privacy, taxation, parental consent for access by
their minor children, access charges, liability for third-party
activities, bulk e-mail or "Spam", encryption standards, online
sales of goods and services, domain name registration and use,
copyright infringement, and other intellectual property issues, any
of which may negatively effect our business operations or results.
User Privacy Issues
Internet user privacy has become an issue both in the United States
and abroad. Some commentators, privacy advocates and government
bodies have recommended or taken actions to limit the use of
personal profiles or other personal information by those collecting
such information, particularly as it relates to children. For
example, the Children's Online Privacy Protection Act of 1998
requires, among other things, that online operators obtain
verifiable parental consent for the collection, use, or disclosure
of personal information from children. The Act further mandates
that the Federal Trade Commission publish regulations for the
collection of data from children by commercial Web-site operators.
Internet Taxation
The tax treatment of activities on or relating to the Internet is
currently unsettled. A number of proposals have been made at the
federal, state and local levels and by foreign governments that
could impose taxes on the online sale of goods and services and
other Internet activities. Recently, the Internet Tax Information
Act was signed into law, placing a three-year moratorium on new
state and local taxes on Internet commerce. However, we can provide
no assurance that future laws imposing taxes or other regulations
on commerce over the Internet would not substantially impair the
growth of Internet commerce and as a result make it cost-
prohibitive to operate our business.
Security Breach, Virus or Inappropriate Use By Internet Users
Our future success will depend, in part on the security of the
network infrastructures of our third-party telecommunications
service providers, over which we have no control. Computer viruses
or problems caused by users or other third parties could lead to
interruptions, delays, or cessation in service. Users or other
third parties could also potentially jeopardize the security of
confidential information stored in our computer systems or our
users' computer systems by their inappropriate use of the Internet,
including breaking into our computer network, which could cause us
or our users losses. Users or third parties may also potentially
expose us to liability by "identity theft", or posing as another of
our users. Unauthorized access by current and former employees or
others could also potentially jeopardize the security of
confidential information stored in our computer systems and those
of our users.
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We expect that our users will increasingly use the Internet for
commercial transactions in the future. Any network malfunction or
security breach could cause these transactions to be delayed, not
completed at all, or completed incorrectly or with compromised
security. Users or others may assert claims of liability against us
as a result of any failure to prevent these network malfunctions
and security breaches, and may deter others from using our
services. Although we intend to use Industry-standard security
measures, such measures have been circumvented in the past, and we
can provide no assurance that these measures will not be
circumvented in the future. In addition, to alleviate problems
caused by computer viruses or other inappropriate uses or security
breaches, we may have to interrupt, delay, or temporarily cease
service to our users, which could have a material adverse effect on
revenues and could also result in a decrease of users.
Potential Legal, Regulatory and/or Compliance Risk
We may be subject to United States and international laws and
regulations regarding the development, use and/or sale of the
products or services we sell. We may, with regard to governmental
and/or regulatory agencies, be required to comply with certain
regulations, and/or potential future regulations, rules, and/or
directives. Due to the nature of the industry, there is no
guarantee that certain regulations may not, in the future, be
imposed. Moreover, potential regulatory conditions and/or
compliance therewith and the effects of such on us, may have a
materially adverse affect upon us, our business operations,
prospects and/or financial condition.
Regulation could:
1. Limit our ability to generate revenues and expose us to
liability;
2. Exposed us to liability for defamation, negligence, and
infringement;
3. Make it more expensive for us to do business.
Domain Names
We will hold the web site domain name relating to our brand,
Travelshorts.com. The acquisition and maintenance of domain names
generally is regulated by governmental agencies and their
designees. The regulation of domain names in the United States and
in foreign countries is subject to change in the near future. As a
result, we may be unable to acquire or maintain relevant domain
names in the countries we conduct business or plan to conduct
business. Furthermore, the relationship between regulations
governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may be unable to
prevent third parties from acquiring domain names that are similar
to, infringe upon, dilute or otherwise decrease the value of our
trademarks and other proprietary rights.
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We Depend on Our Key Persons and/or Suppliers
Due to the highly technical nature of our business, having certain
key personnel will be essential to the web site development process
and thus to the entire business itself. Consequently, the loss of
any of those individuals once hired may have a substantial effect
on our future success or failure.
Moreover, we are dependent on the principal members of our
management personnel, the loss of any one could impair the
development of our products and projects. Our success will be
largely dependent on the decisions made by members of management.
Furthermore, we may depend on our ability to attract and retain
additional qualified personnel to manage certain business
interests. We may have to recruit qualified personnel with
competitive compensation packages, equity participation and other
benefits that may affect the working capital available for our
operation(s). Management may seek to obtain outside independent
professionals to assist them in assessing the merits and risks of
any business proposals as well as assisting in the development and
operation of any projects. No assurance can be given that we will
be able to obtain such needed assistance on terms acceptable to us.
Management of Potential Growth
To manage any future growth, we must continue to implement and
improve our operational and financial systems and to expand, train
and manage our employee base. We can provide no assurance that we
will be able to effectively manage the expansion of our operations,
or that our infrastructure, facilities, systems, procedures or
controls will be adequate to support our operations. Our inability
to effectively manage our future growth could have a material
adverse effect on our business, financial condition and results of
operations.
There can also be no assurance that our infrastructure, technical
staff and resources will be adequate to facilitate our growth. In
addition, delays may occur in establishing Internet accounts for
our customers, and customers may experience significant delays in
contacting, and in receiving responses from, our customer and
technical support personnel. We can provide no assurance that we
will be able to establish accounts or provide customer support on a
timely basis, or that any delays will not result in a loss of
customers. We believe that our ability to provide timely access for
customers and adequate customer support will largely depend on our
ability to attract, identify, train, integrate and retain qualified
personnel. Failure to provide adequate customer support services
will adversely affect our ability to increase our customer base and
establish and maintain a low customer cancellation rate, and could
therefore have a material adverse effect on our business, financial
condition and results of operations.
The sales and marketing and other costs to us of acquiring new
customers are substantial relative to the monthly fees derived from
such customers. Accordingly, our ability to establish and sustain
sufficient operating margins depends in part on our ability to
retain our existing customers, while continuing to attract new
customers. Because the Internet services market is new and the
variety of
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available services is not well understood by new and
potential customers, it is difficult, if not impossible, for us to
predict future customer retention rates.
Internet Growth
Our future success is substantially dependent on continued growth
in the use of the Internet. Rapid growth in the use of and interest
in the Internet, and in particular the World Wide Web, is a recent
phenomenon and there can be no assurance that Internet usage will
become widespread or that extensive content will continue to be
provided over the Internet. The Internet may not prove to be viable
for a number of reasons, including potentially inadequate
development of the necessary infrastructure, such as a reliable
network backbone, or timely development of performance
improvements. To the extent that the Internet continues to
experience significant growth in the number of users and level of
use, there can be no assurance that the Internet infrastructure
will be able to support the demands placed on it by such potential
growth. If use of the Internet does not continue to grow, or if
the Internet infrastructure does not effectively support growth
that may occur, our business, results of operations and financial
condition would be materially and adversely affected.
Rapid Technological Change
The market for Internet services is characterized by rapidly
changing technology, evolving industry standards, changes in
customer needs and frequent new service and product introductions.
Our future success will depend, in part, on our ability to use
leading technologies effectively, to develop our technical
expertise, to enhance our services and to develop new services that
meet changing customer needs on a timely and cost-effective basis.
There can be no assurance that we will be successful in using new
technologies effectively, developing new services or enhancing
existing services on a timely basis, or that such new technologies
or enhancements will achieve market acceptance. Any failure on our
part to use new technologies effectively, develop new services or
enhance existing services on a timely basis would have a material
adverse effect on our business, financial condition and results of
operations.
Market risks
Any time a new business is introduced into a market, there is a
substantial risk that revenues will not meet expectations or even
cover the cost of operations. General market conditions might be
such that sales will be slow or even non-existent, and/or the
product itself might not fit the needs of buyers enough to induce
sales. While we anticipate the ability to sell the services we
develop, there is no way to predict the volume of sales that will
occur or even if sales will be sufficient to support our future
operations. Numerous factors beyond our control may affect the
marketability of the products offered and developed. These factors
include consumer demand, market fluctuations, the proximity and
capacity of suppliers and government regulations, including
regulations relating to prices, taxes, royalties, importing and
exporting of products and newly legislated controls. The exact
effect of
15
<PAGE>
these factors cannot be accurately predicted, but it's
possible they may result in us not receiving an adequate return on
our invested capital.
Competitiveness of Industry
The Internet industry generally, and the travel industry
specifically, are intensely competitive. There can be no assurance
that any competitors will not develop and offer services similar,
or even superior, to the products to be developed and offered by
us. Such competitiveness is likely to bring both strong price and
quality competition to the sale of our services. This will mean ,
among others things, increased costs in the form of R&D, marketing,
manufacture and customer services, along with a reduction in
product pricing. Generally, this will have a significant negative
effect on our bottom line profits.
We believe that our ability to compete successfully in the Internet
services market depends on a number of factors, including market
presence; the adequacy of our customer support services; the
capacity, reliability and security of our network infrastructure;
the ease of access to and navigation of the Internet provided by
our services; our pricing policies, our competitors and our
suppliers; the timing of introductions of new services and products
by us and our competitors; our ability to support existing and
emerging industry standards; and industry and general economic
trends. There can be no assurance that we will have the financial
resources, technical expertise or marketing and support
capabilities to compete successfully.
We currently compete or expect to compete for users with the
following companies that provide destination viewing web sites:
1. 1Travel
2. 4allinclusives
3. BizTravel
4. captain cook
5. Cheaplodging
6. Fodor
7. International Travel Network
8. Kasbah
9. MSN Expedia
10. Preview Travel
11. priceline.com
12. Travelbug
13. Travelocity
14. Travelquest
15. Travelscape.com
16. Trip.com
17. Hotelview
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We expect that competition for users will continue to intensify for
the foreseeable future. Increased competition could result in
additional sales and marketing expenses and user-acquisition costs
and could also result in increased user turnover and decreased
advertising revenues. We may not be able to offset the effects of
these increased costs and may not have the resources to continue to
compete successfully. The ability of competitors to acquire other
destination viewing web sites or to enter into strategic alliances
or joint ventures could also put us at a significant competitive
disadvantage.
Advertising
If we are not able to demonstrate to advertisers that our
registered users are actively using our service, advertisers may
choose not to advertise with us and our advertising revenues would
be materially and adversely affected.
We may decide to generate advertising revenues from a variety of
different arrangements including sales of banner advertising,
sponsorships, performance-based arrangements and referrals to third
party web sites. We have limited experience marketing and pricing
these types of arrangements, and have limited actual experience
with respect to the performance of such arrangements. As such, we
may not know if our pricing, marketing or structuring of these
arrangements is appropriate. Our failure to appropriately price,
market or structure these arrangements could impact our ability to
enter into and perform under these arrangements, or to renew these
arrangements on similar or acceptable terms. In addition, the
success of some of these arrangements will depend on our ability to
effectively target users based on demographic and other
information. We may encounter technical and other limitations on
this ability. In light of these factors, we cannot provide any
assurance that we will be able to attract sufficient advertising
revenues to justify such operations.
In addition, competition for Internet-based advertising revenues is
intense and the amount of available standard banner advertising
space on the Internet is increasing at a significant rate. These
factors are causing Internet advertising rates to decline, and it
is possible that rates will continue to decline in the future.
Our advertising competitors will likely have longer operating
histories, greater name recognition, larger user bases,
significantly greater financial, technical, sales and marketing
resources and more established relationships with advertisers.
These advantages may allow such competitors to respond more quickly
than us to new or emerging technologies and changes in advertiser
requirements. They may also be able to devote greater resources to
develop, promote and sell their advertising space as well as
products and services. Such competitors may also engage in more
extensive research and development, undertake more far-reaching
marketing campaigns, adopt more aggressive pricing policies and
make more attractive offers to existing and potential employees,
strategic partners, advertisers and web publishers. In addition,
competitors have established or may establish cooperative
relationships among themselves or with third parties to increase
the ability of their products or services to address the needs of
prospective customers.
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We must also compete with television, radio, cable and print media
for a share of advertisers' total advertising budgets. Advertisers
may be reluctant to devote a significant portion of their
advertising budget to Internet advertising if they perceive the
Internet to be a limited or ineffective advertising medium.
Technology
We rely upon third parties to help develop technologies that
enhance our current product and service offerings. If our
relationships with these third parties are impaired or terminated,
we would have to find other developers on a timely basis or develop
necessary technology completely on our own. Failure to successfully
do so would materially effect our results of operations.
In addition, other destination viewing web sites may develop
services or technologies that render our services or technology
non-competitive or obsolete. Our ability to remain technologically
competitive may require substantial expenditures and lead time. If
we are unable to respond in a timely manner to technological
advances, we may not be able to compete effectively for users,
which would cause our revenues to decrease.
Item 7. Description of Property
We currently do not lease or own any real property.
Item 8. Directors, Executive Officers and Significant Employees
The following information sets forth the names of our officers and
directors, their present positions, ages and biographical
information.
Name Age Office(s) Held
---- --- --------------
Robert Sawatsky 34 President & CEO - Director
Secretary, Treasurer
Mr. Sawatsky holds a degree in Economics from the University of
Saskatchewan and has been a venture capitalist with North Rim
Capital for the past 5 years. Prior to that he spent 3 years as an
investment advisor and investment banker with Yorkton Securities in
Vancouver, BC. Mr. Sawatsky was also a co-founder of eShipper.com
and did much of the original investment banking work for North
American Resort & Golf, Inc. and what is now MarketU.com, a public
entity.
Our directors are appointed for one year terms to hold office until
the next annual general meeting of our shareholders or until
removed from office in accordance with our by-laws. Our officers
are appointed by our board of directors and hold office until
removed by the board.
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Significant Employees
1. Bruce Marchfelder - New Media Consultant
Mr. Marchfelder is currently training our team on how to produce
virtual reality segments, as it is a specialized art form and a key
component of the content the company is offering. He is also
overseeing the overall quality of content produced and making
recommendations on how the presentation can be improved.
Marchfelder understands how to lay the foundations of a technology
start-up thoroughly. Having studied this market informally in New
York he also has some excellent ideas on how the company should
market its service.
Now a film producer with a recent entry in the Cannes Festival, Mr.
Marchfelder previously owned a new media company in New York City
called Soho Media. He hired and trained a team of animators,
designers and programmers to develop a CD ROM/Web based quarterly
called AREA. Producing CD ROMs for more that 12 international
artists, Soho Media produced the John Lennon CD ROM (working with
Yoko Ono). In 1997, he was commission by the New York City Mayor's
Office to capture a full set of QuickTime VR panoramas of New York
City for use in the movie industry.
Marchfelder's client list has included Viacom, Nickelodeon, MTV,
HBO, the BBC, Penguin/Rough Guide Travel, Estee Lauder, and the
Guggenheim Museum. He also holds a Masters Degree from Yale
University. He is conversant and practiced in the full range of
new media software tools.
2. Duncan O'Brien - Multimedia & Marketing Project Manager
Mr. O'Brien brings us 11 years of experience as a writer,
photographer, television producer and Internet developer. His media
career began in Toronto in the mid 1980's as a writer, photographer
and editor at two national sports magazines. In 1995, he relocated
to Vancouver to start up his own multi-media business. In 1998, he
produced a sports and travel lifestyle show airing on the Outdoor
Life Network, where he coordinated P.R. and sales as well as talent
management, camera operation and digital editing. He is currently
developing web content and marketing (Internet, print, radio and
TV) for six e-commerce internet companies, and will coordinate
marketing and production for us. Mr. O'Brien's work has taken him
extensively around the world, and he has compiled a large number of
travel images that will be available to the company. He has a B.A.
in Film from Queen's University.
3. Pablo Leites - Web Designer & VR Developer / Photographer
Born in Mexico City, Mexico. Graduated from Art Center College of
Design with a Bachelor of Fine Arts in Photography in Pasadena, CA.
Upon his return to Mexico City he founded Diseo Virtual, and
implemented his photographic knowledge into 3D computer generated
imagery, which he applied in the creation of special effects,
multimedia development, and web design for a wide variety of
clients, including several international advertising agencies.
Since 1998, he has collaborated with several
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local companies creating 3D graphics and web development. Recently,
he joined Carlos Fonnegra and Paulo Alvarez to create smARTeam, a
multimedia solutions firm.
4. Paulo Alvarez - Web Developer & Designer
Born in Guadalajara, Mexico, Mr. Alvarez graduated Universidad
Autonoma de Guadalajara with a degree in Industrial Design. Mr.
Alvarez also studied Furniture and Interior Design in Florence,
Italy. Mr. Alvarez worked in Mexico for one year as an Art Director
for Ciclo-P Design. After his arrival to Vancouver, he studied
Graphic Design at Emily Carr. Together with Carlos Fonnegra
(Architect) and Pablo Leites (Photographer), he formed smARTeam,
offering a creative resource for businesses who want to attract
visual attention through Identities, Printed and Media
Communications for companies in North and South America.
5. Carlos Fonnegra - Graphics & Digital Imaging Producer
Born in Bogota, Colombia, Mr. Fonnegra graduated with honors in
Architecture at Los Andes University. He then moved to Dublin
Ireland, to further his studies in Architecture, where he obtained
first place in an architectural travel scholarship competition for
his design of a new interactive cultural center in Cork. On his
return to Colombia, he was the architect for the National Park
Service of Colombia for two years, before embarking on his career
with New Media Design as the Director of Pop Art digital imaging.
Two years later he moved to Canada, and with Paulo Alvarez and
Pablo Leites formed smARTeam design group, which specializes in the
design and creation of websites and graphic images for companies in
North, Central and South America.
Item 9. Remuneration of Directors and Officers
The following table sets forth certain information as to our three
highest paid officers and directors for the fiscal year ended March
31, 2000. No other compensation was paid to any such officer or
directors other than the cash compensation set forth below.
SUMMARY COMPENSATION TABLE
Name of Individual or Capacities in which Aggregate
Identity of Group Remuneration was Received Remuneration
--------------------- ------------------------- ------------
Robert Sawatsky Director and President $36,000
Officers and Directors Directors and Officers $36,000
as a Group
Currently, we do not pay any officers or directors any salary or
other compensation. We, however, anticipate entering into written
agreements that will provide for performance-based, incentive
compensation consisting of stock options, salary and bonuses.
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Employee Benefit and Consulting Services Compensation Plan
We have reserved for issuance up to 500,000 shares of our Common
Stock, to be issued to officers, directors, employees and
consultants pursuant to our stock option plan (the "Plan"). The
number of shares covered by the Plan may be increased by our board
of directors at any time. As of the date of this registration
statement, no options have been granted and no shares have been
issued pursuant to the Plan. Additional securities or options to
acquire securities may be issued or granted pursuant to the Plan at
any time by our board of directors, in most cases without requiring
shareholder approval
Item 10. Security Ownership of Management and Certain Security
Holders
The following table sets forth, as of September 1, 2000, the
beneficial ownership of our common stock by each of our officers
and directors, by each person known to beneficially own more than
5% of our outstanding common stock, and by the officers and
directors as a group. Except as otherwise indicated, all shares
are owned directly.
Name and address Number of Shares Percentage of
Title of class of beneficial owner of Common Stock Common Stock(1)
-------------- ------------------- ---------------- ---------------
Common Stock Robert Sawatsky 7,500,000 46.45%
Common Stock All officers and 7,500,000 46.45%
directors
------------------------------------------------------------------------
(1) Based on 5,381,833 shares of common stock issued and
outstanding on September 1, 2000
(2) In connection with our organization in 1989, we issued
2,500,000 shares of restricted common stock at par value to
James and Nancy Sanford, our founders, in consideration of
services rendered. These shares were transferred to Robert
Sawatsky on February 4, 1997. The shares were then forward split
on a three for one basis on November 19, 2000.
Share Purchase Warrants
We have not issued and do not have outstanding any warrants to
purchase shares of our common stock.
Options
We have not issued and do not have outstanding any options to
purchase shares of our common stock.
Registration Rights
None of the holders of our common stock have any right to require
us to register our common shares pursuant to the Securities Act of 1933.
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Convertible Securities
We have not issued and do not have outstanding any securities
convertible into shares of common stock or any rights convertible
or exchangeable into shares of common stock
Item 11. Interest of Management and Others in Certain Transactions
Accept as provided below, none of the following persons has any
direct or indirect material interest in any transaction to which we
are a party, or in any proposed transaction to which we are to be a
party:
1. any of our directors or officers;
2. any proposed nominee for election as a director;
3. any person who beneficially owns, directly or indirectly,
shares carrying more than 10% of the voting rights attached to
our common stock; or
4. any relative or spouse of any of the foregoing persons, or any
relative of such spouse, who has the same house as such person
or who is a director or officer of our parent or subsidiary.
Robert Sawatsky, our sole officer and director, has made a series
of unsecured, non-interest bearing demand loans to us that were
necessary to keep our operations going. These loans currently
total $16,000.
The Company currently does not have any policies about entering
into transactions with affiliated parties.
Item 12. Securities Being Registered
The securities being registered are our shares of common stock, par
value $0.001 per share. Under our articles of incorporation, the
total number of shares of all classes of stock we have authority to
issue is 50,000,000 shares of common stock, par value $0.001 per
share (the "Common Stock"). The Common Stock underwent a forward
split on a three for one basis on November 19, 2000. As of December
13, 2000, after giving effect to the forward split, a total of
16,145,499 shares of Common Stock are issued and outstanding. All
references to numbers of shares of Common Stock in this registration
statement are pre-split numbers unless the context or description
indicates otherwise.
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Common Stock
Each holder of shares of Common Stock is entitled to one vote for
each share held on all matters to be voted upon by the shareholders
generally. The shares do not have cumulative voting rights, which
means that holders of more than 50% of the shares of Common Stock
voting for the election of directors can elect all the directors,
and that in such an event the holders of the remaining shares
would not be able to elect a single director. Holders of shares of
Common Stock are entitled to receive pro-rata such dividends, if
any, as may be declared from time to time by the board of directors
out of funds legally available therefore. However, it is the
present intention of the Company not to pay any cash dividends to
holders of Common Stock but to reinvest earnings, if any, of the
Company. In the event of liquidation, dissolution or winding up of
the company the holders of shares of Common Stock are entitled to
share pro-rata in all assets remaining after payment of liabilities
and the preferences of any holders of preferred stock. Shares of
Common Stock have no pre-emptive, conversion or other subscription
rights. There are no redemption or sinking fund provisions
applicable to the Common Stock.
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PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Stockholder Matters
There is no present public market for our Common Stock. We
anticipate applying for a listing on the OTC Bulletin Board upon
effectiveness of this registration statement. There can be no
assurance, however, that a public market will materialize.
As of the date of this registration statement, we have twenty nine
(29) registered shareholders.
None of the holders of our common stock have any right to require
us to register our common shares pursuant to the Securities Act of
1933.
Holders of our common stock are entitled to receive dividends pro
rata based on the number of shares held, when, as and if declared
by our board of directors, from funds legally available therefore.
We presently plan to reinvest any future earnings in the business
and are therefore unlikely to declare any cash dividends in the
foreseeable future.
We have not paid any dividends to date. We are not currently
restricted from paying dividends provided that we do so out of
funds legally available therefore.
Item 2. Legal Proceedings
We are not currently a party to any legal proceeding that may or
could have a material adverse impact on our operations.
Item 3. Changes in and Disagreements with Accountants
We have had no changes in or disagreements with our accountants
since our incorporation.
Item 4. Recent Sales of Unregistered Securities
The Company completed the issuance of 2,500,000 common shares in
1989 to its founders James and Nancy Sanford in exchange for
services rendered. These shares were issued pursuant to Section
4(2) of the Securities Act of 1933. These shares were marked
"restricted" at the time issued.
The Company completed an offering of 2,550,000 shares of Common
Stock to 8 purchasers at a price of $0.02 per share in June 1997
pursuant to Rule 504 of Regulation D of the Act. The offering was
completed to persons known to the officers and directors of the
Company.
The Company completed an offering of 210,000 shares of Common Stock
to 2 purchasers at a price of $0.05 per share in May 1998 pursuant
to Rule 504 of Regulation D of the Act. The offering was
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completed to persons known to the officers and directors of the
Company who were already shareholders of the company.
The Company completed an offering of 49,000 shares of Common Stock
to 12 purchasers at a price of $0.50 per share in July 1999
pursuant to Rule 504 of Regulation D of the Act. The offering was
completed to persons known to the officers and directors of the
Company.
The Company completed an offering of 56,000 shares of Common Stock
to 5 purchasers at a price of $0.50 per share in April 2000
pursuant to Rule 504 of Regulation D of the Act. The offering was
completed to persons known to the officers and directors of the
Company.
The Company sold 13,333 shares of Common Stock to 2 purchasers at a
price of $0.60 per share in April and May 2000 pursuant to Rule 504
of Regulation D of the Act. The offering was completed to persons
known to the officers and directors of the Company.
The Company sold 3,500 shares of Common Stock to 1 purchaser at a
price of $0.75 per share on May 20, 2000 pursuant to Rule 504 of
Regulation D of the Act. The offering was completed to persons
known to the officers and directors of the Company.
Item 5. Indemnification of Directors and Officers
Our officers and directors are indemnified as provided by the
Washington Business Corporation Act ("WBCA") as found within the
Revised Code of Washington ("RCW") and our bylaws.
Our articles of incorporation and bylaws allow us to indemnify our
officers and directors up to the fullest extent permitted by
Washington law, but such indemnification is not automatic. Our
bylaws provide that indemnification may not be made to or on behalf
of a director or officer if a final adjudication by a court
establishes that the director or officer's acts or omissions
involved intentional misconduct, fraud, or a knowing violation of
the law and was material to the cause of action.
Section 23B.08.520 of the WBCA states that, unless limited by our
articles of incorporation (which is not the case with our articles
of incorporation) a corporation must indemnify a director who is
wholly successful, on the merits or otherwise, in the defense of
any proceeding to which the director was a party because of being a
director of the corporation against reasonable expenses incurred by
the director in connection with the proceeding. Excepted by WBCA
Section 23B.08.510 from the corporation's ability to indemnify its
officers and directors are: (a) in connection with a proceeding by
or in the right of the corporation in which the director was
adjudged to be liable to the corporation; or (b) in connection
with any other proceeding charging improper personal benefit to the
director, whether or not involving an action in the director's
official capacity, in which the director was adjudged liable on the
basis that personal benefit was improperly received by the
director. Per WBCA 23B.08.570, officers of the corporation who are
not directors are entitled to the same mandatory indemnity as
directors unless limited by the articles of incorporation (which is
not the case with our articles of incorporation) and the
corporation may reimburse officers to the same extent as
directors in all other matters for which indemnity is allowed
under law.
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Indemnification permitted under the WBCA Section 23B.08.510 in
connection with a proceeding by or in the right of the corporation
is limited to reasonable expenses incurred in connection with the
proceeding. The corporation may indemnify an individual made a
party to a proceeding because the individual is or was a director
or officer against liability incurred in the proceeding if: (a) the
individual acted in good faith; and (b) the individual reasonably
believed: (i) in the case of conduct in the individual's official
capacity with the corporation, that the individual's conduct was in
the corporation's best interests; and (ii) in all other cases, that
the individual's conduct was at least not opposed to its best
interests; and (c) in the case of a criminal proceeding, the
individual had no reasonable cause to believe the individual's
conduct was unlawful.
Under WBCA Section 23B.08.540, unless a corporation's articles of
incorporation provide otherwise (which is not the case with our
articles of incorporation), a director or officer of a corporation
who is a party to a proceeding may apply for indemnification or
advance of expenses to the court conducting the proceeding or to
another court of competent jurisdiction. The court then may order
indemnification or advance of expenses if the court determines: (1)
the officer or director is entitled to mandatory indemnification
under WBCA 23B.08.520. The corporation would then be required to
pay the reasonable expenses the officer or director incurred in
obtaining the court-ordered indemnification; (2) the officer or
director is fairly entitled to indemnification in view of all
relevant circumstances, whether or not the officer or director was
adjudged liable as described in WBCA 23B.08.510, above. However,
if the officer or director is found liable, then the
indemnification available to that individual is limited by law to
reasonable expenses unless the company's articles of incorporation,
bylaws, a contract or resolution approved by shareholders pursuant to
WBCA 23B.08.560 provide otherwise (which is not the case
with our company); or (3) in the case of an advance of expenses, the
director is entitled to reimbursement of reasonable expenses under
the corporation's articles of incorporation, bylaws, or any applicable
resolution or contract.
Our bylaws provide that in the case of item (2) in the preceding
paragraph, the person will be indemnified for such expenses as the
court deems proper. We have not altered the indemnification level
from that specified in the WBCA. Further to item (3) above, our
bylaws state that our articles of incorporation, bylaws, or
agreements made by us may provide that we must advance
the expenses of officers and directors incurred in defending a
civil or criminal action, suit, or proceeding, or as they are
incurred in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking from or on behalf of the
officer or director, to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not
entitled to be indemnified by us. Currently, we have no such
mandatory indemnification commitments.
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PART F/S
FINANCIAL STATEMENTS
Our financial statements, as described below, are attached hereto.
1. Audited financial statements for the periods ending March 31,
2000 and March 31, 1999 including:
(a) Balance Sheet; (1)
(b) Statement of Operations; (1)
(c) Statement of Cash Flows; (1)
(d) Statement of Stockholders' Equity; (1)
(e) Notes to the Financial Statements. (1)
(1) Not attached hereto as it was previously attached to the Company's Form
10-SB filed on October 3, 2000.
2. Un-audited financial statements for the six-month period
ending September 30, 2000, including:
(a) Balance Sheet;
(b) Statement of Operations;
(c) Statement of Cash Flows;
(d) Statement of Stockholders' Equity;
(e) Notes to the Financial Statements.
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<PAGE>
Travelshorts.com, Inc.
(A Development Stage Company)
Balance Sheets
As at As at
September 30, March 31,
2000 2000
(unaudited) (audited)
$ $
Assets
Current Assets
Cash and equivalents 2,213 25,099
Property, Plant and Equipment (Note 3) 9,190 -
-------- --------
11,403 25,099
======== ========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 1,413 3,000
Due to related party (Note 4) 16,070 70
Loan payable 2,000 -
-------- --------
19,483 3,070
-------- --------
Stockholders' Equity
Common Stock, 50,000,000 common shares
authorized with a par value of $.001; 5,381,833
and 5,449,000 common shares issued and
outstanding 5,382 5,449
Additional Paid in Capital 121,743 105,051
Deficit Accumulated During the Development
Stage (135,205) (88,471)
-------- --------
(8,080) 22,029
-------- --------
11,403 25,099
======== ========
Contingent Liability (Note 1)
(The accompanying notes are an integral part of the financial statements)
<PAGE>
Travelshorts.com, Inc.
(A Development Stage Company)
Statements of Operations
(unaudited)
Six months
ended September 30,
2000 1999
(unaudited)
---------------------------
$ $
Revenue - -
Expenses
General and Administrative
Accounting and legal 8,711 -
Bank charges and interest 136 (5)
Consulting (Note 5) 335 1,925
Office, rent and telephone 3,567 430
Travel and promotion - -
---------- ----------
12,749 2,350
---------- ----------
Selling and Marketing
Advertising 2,203 -
---------- ----------
Product Development
Photography 3,792 -
Depreciation 1,021 -
Consulting 26,969 -
---------- ----------
31,782 -
---------- ----------
Net Loss (46,734) (2,350)
========== ==========
Net Loss Per Share (0.009) (0.001)
========== ==========
Weighted Average Shares Outstanding 5,475,222 5,392,500
========== ==========
(The accompanying notes are an integral part of the financial statements)
<PAGE>
Travelshorts.com, Inc.
(A Development Stage Company)
Statements of Cash Flows
Accumulated
From July 6, 1989 For the six For the six
(Date of Inception) months ended months ended
to September 30, September 30, September 30,
2000 2000 1999
(unaudited) (unaudited) (unaudited)
$ $ $
Cash Flows to Operating
Activities
Net loss (135,205) (46,734) (2,350)
Adjustments to reconcile
net loss to cash
Common shares issued
for services 2,500 - -
Depreciation 1,021 1,021 -
Non-cash working capital
Item
Accounts payable 1,413 (1,587) -
-------- -------- --------
Net Cash Used in Operating
Activities (130,271) (47,300) (2,350)
-------- -------- --------
Cash Flows from Financing
Activities
Loan proceeds 2,000 2,000 -
Common shares issued 124,625 16,625 16,500
Increase in advances from a
related party 16,070 16,000 70
-------- -------- --------
Net Cash Provided by Financing
Activities 142,695 34,625 16,570
-------- -------- --------
Cash Flows to Investing
Activities
Acquisition of property,
plant and equipment (10,211) (10,211) -
-------- -------- --------
Net Cash Used In Investing
Activities (10,211) (10,211) -
-------- -------- --------
Change in cash 2,213 (22,886) 14,220
Cash - beginning of period - 25,099 -
-------- -------- --------
Cash - end of period 2,213 2,213 14,220
======== ======== ========
Non-Cash Financing Activities
2,500,000 shares were issued
for services rendered 2,500 - -
======== ======== ========
Supplemental Disclosures
Interest paid - - -
Income tax paid - - -
(The accompanying notes are an integral part of the financial statements)
<PAGE>
Travelshorts.com, Inc.
(A Development Stage Company)
Notes to the Financial Statements
(unaudited)
1. Development Stage Company
Travelshorts.com, Inc. herein (the "Company") was incorporated in
the State of Washington, U.S.A. on July 6, 1989. The Company is
in the process of developing an Internet business that will
provide information and 360 degree panoramic photography
("Virtual Reality") for the individual hotel clients, chains and
major Internet travel booking portals.
The Company is in the development stage. In a development stage
company, management devotes most of its activities in developing
a market for its products. Planned principal activities have not
yet begun. The ability of the Company to emerge from the
development stage with respect to any planned principal business
activity is dependent upon its successful efforts to raise
additional equity financing and/or attain profitable operations.
There is no guarantee that the Company will be able to raise any
equity financing or sell any of its products at a profit. There
is substantial doubt regarding the Company's ability to continue
as a going concern.
2. Summary of Significant Accounting Policies
(a) Use of Estimates and Assumptions
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the periods.
Actual results could differ from those estimates.
(b) Adjustments
These interim unaudited financial statements have been prepared
on the same basis as the annual financial statements and in the
opinion of management, reflect all adjustments, which include
only normal recurring adjustments, necessary to present fairly
the Company's financial position, results of operations and
cash flows for the periods shown. The results of operations for
such periods are not necessarily indicative of the results
expected for a full year or for any future period.
<PAGE>
PART III
INDEX TO EXHIBITS
Exhibit 3.1: Articles of Incorporation (1)
Exhibit 3.2: Certificate of Reinstatement of a Washington Corporation (1)
Exhibit 3.3: Certificate of Amendment of Articles of Incorporation (1)
Exhibit 3.4: By-Laws (1)
Exhibit 27.1: Financial Data Schedule
(1) previously filed as an exhibit to the Company's Form 10-SB on
October 3, 2000.
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<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 13, 2000.
TRAVELSHORTS.COM, INC.
/s/ Robert Sawatsky
By: _______________________________
Robert Sawatsky
Director and Chief Executive Officer
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