UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Travco, Inc.
(Name of issuer in its charter)
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Nevada 3843 88-0473256
(State or other (Primary Standard (I.R.S.
jurisdiction Industrial Employer
of Classification Code No.) Identification
incorporation) No.)
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____________________________
9315 Horizon Vista Lane
Henderson, NV 89117
(702) 650-2050
(Address and telephone number of principal executive offices)
____________________________
Premier Corporate Services, Inc.
1000 N. Green Valley Pkwy., #440-195
Henderson, NV 89014
(702) 650-2050
(Name, address and telephone number of agent for service)
____________________________
Approximate date of proposed sale to the public: As soon as
reasonably practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis, pursuant to Rule 415
under the Securities Act of 1933 check the following box. ___
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ___
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.__
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number or the earlier
effective registration statement for the same offering. __
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. __
_________________________________
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Title of Amount to Proposed Proposed Amount of
each class be maximum maximum registratio
of registered offering aggregate n
securities (1) price per offering fee
to be share price(2)
registered
Common Stock 15,000,000 $0.02 $300,000 $79.20
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(1) In the event of a stock split, stock dividend or similar
transaction involving the common stock, in order to prevent
dilution, the number of shares registered shall be automatically
increased to cover additional shares in an indeterminate amount
in accordance with Rule 416(a) under the Securities Act of 1933,
as amended.
(2) Estimated solely for purposes of calculating registration
fee pursuant to Rule 457 under the Securities Act of 1933, as
amended.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
Travco, Inc.
15,000,000 Shares of Common Stock
Travco, Inc., a Nevada corporation (the "Company"), is hereby
offering up to 15,000,000 shares of its $0.001 par value common
stock (the "Shares"), pursuant to the terms of this prospectus
for the purpose of providing working capital for the Company. See
"Plan of Distribution" and "Use of Proceeds."
The Shares offered hereby are highly speculative and involve a
high degree of risk to public investors and should be purchased
only by persons who can afford to lose their entire investment.
See "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
TABLE OF CONTENTS
PROSPECTUS SUMMARY 1
CAUTIONARY STATEMENT REGARDING PROJECTIONS AND FORWARD LOOKING
STATEMENTS 3
RISK FACTORS 4
USE OF PROCEEDS 7
DETERMINATION OF OFFERING PRICE 7
DILUTION 7
SELLING SECURITY HOLDERS 8
PLAN OF DISTRIBUTION 8
LEGAL PROCEEDINGS 10
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT11
DESCRIPTION OF SECURITIES 12
INTEREST OF NAMED EXPERTS AND COUNSEL 13
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES 13
ORGANIZATION WITHIN THE LAST FIVE YEARS 13
DESCRIPTION OF BUSINESS 14
MANAGEMENT'S PLAN OF OPERATION 19
DESCRIPTION OF PROPERTY 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 20
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 20
EXECUTIVE COMPENSATION 22
FINANCIAL STATEMENTS 22
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE 31
AVAILABLE INFORMATION 31
PROSPECTUS SUMMARY
The Company
The Company was incorporated under the laws of the State of
Nevada on September 22, 2000 as Travco, Inc. Its principal
executive offices are located at 9315 Horizon Vista Lane, Las
Vegas, NV 89117. Under its corporate charter, the Company may
engage in any lawful business for which corporations may be
organized under the General Corporation Law of the State of
Nevada. The Company has been in the developmental stage since
inception and has no operating history other than organizational
matters.
Currently the only assets of the Company are the Licensing
Agreements and Exclusive Right to Use for each of the patents
under which the Company has the exclusive right to the use of all
the rights and privileges granted within the patents. See
"Intellectual Property."
The Company's intent is to develop and market a workable
prototype of the patented portable toothbrush and mounting stand.
The Company intends to develop relationships with major companies
to develop and market its product. See "Description of
Business."
The Offering
This is the initial public offering of common stock of Travco,
Inc., and no public market currently exists for shares of the
Company's common stock. There have been no sales of shares from
one investor to another. This is not an underwritten offering,
and the Shares are not presently traded on any recognized
exchange or market.
It is the Company's intention to apply to have the Shares listed
for trading on the National Association of Securities Dealers
("NASD") OTC Electronic Bulletin Board Market as soon as possible
after the date of this prospectus.
* The Company is offering up to 15,000,000 shares of its
common stock. If the maximum offering is achieved, there will be
18,000,000 shares of common stock outstanding.
* No sales commissions will be paid in connection with the
sales of the Shares.
* If all the Shares offered are sold, assuming they are sold
at the offering price of $.02, the net proceeds to the Company
will be $300,000 less certain costs associated with this
offering.
* The net proceeds will be used for working capital. See "Use
of Proceeds."
Liquidity of Investment
Although the Shares will be registered and "free trading," there
is no current market for the Shares. Therefore, an investor may
not be able to sell his or her Shares when he or she wishes and
may consider his or her investment to be long-term.
Investment in the Company involves risks due in part to a limited
previous financial and operating history of the Company, as well
as competition in the oral hygiene industry. Also, certain
potential conflicts of interest arise due to the relationship of
the Company to management and others.
THE SHARES ARE OFFERED BY THE COMPANY SUBJECT TO PRIOR SALE,
ACCEPTANCE OF THE SUBSCRIPTIONS BY THE COMPANY AND APPROVAL OF
CERTAIN LEGAL MATTERS BY COUNSEL TO THE COMPANY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OR OPEN OFFER TO BUY INTO SECURITIES OFFERED HEREBY
IN A STATE IN WHICH, OR TO A PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES
CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION CONTAINED HEREIN SUBSEQUENT TO THE DATE THEREOF.
HOWEVER, IF A MATERIAL CHANGE OCCURS, THIS PROSPECTUS WILL BE
AMENDED OR SUPPLEMENTED ACCORDINGLY FOR ALL EXISTING
SHAREHOLDERS, AND FOR ALL PROSPECTIVE INVESTORS WHO HAVE NOT YET
BEEN ACCEPTED AS SHAREHOLDERS IN THE COMPANY.
THIS PROSPECTUS DOES NOT INTENTIONALLY OMIT ANY MATERIAL FACT OR
CONTAIN ANY UNTRUE STATEMENT OF MATERIAL FACT. NO PERSON OR
ENTITY HAS BEEN AUTHORIZED BY THE COMPANY TO GIVE ANY INFORMATION
OR MAKE A REPRESENTATION, WARRANTY, COVENANT, OR AGREEMENT WHICH
IS NOT EXPRESSLY PROVIDED FOR OR CONTAINED IN THIS PROSPECTUS; IF
GIVEN OR MADE, SUCH INFORMATION, REPRESENTATION, WARRANTY,
COVENANT, OR AGREEMENT MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
THE COMPANY IS NOT CURRENTLY A REPORTING COMPANY, AS THAT TERM IS
DEFINED IN THE SECURITIES EXCHANGE ACT OF 1934. EACH PERSON WHO
RECEIVES A PROSPECTUS WILL HAVE AN OPPORTUNITY TO MEET WITH
REPRESENTATIVES OF THE COMPANY DURING NORMAL BUSINESS HOURS UPON
WRITTEN OR ORAL REQUEST TO THE COMPANY, IN ORDER TO VERIFY ANY OF
THE INFORMATION INCLUDED IN THIS PROSPECTUS AND TO OBTAIN
ADDITIONAL INFORMATION REGARDING THE COMPANY. IN ADDITION, EACH
SUCH PERSON WILL BE PROVIDED WITHOUT CHARGE, UPON WRITTEN OR ORAL
REQUEST, A COPY OF ANY OF THE INFORMATION THAT IS INCORPORATED BY
REFERENCE IN THE PROSPECTUS AND THE ADDRESS (INCLUDING TITLE OR
DEPARTMENT) AND TELEPHONE NUMBER TO WHICH SUCH REQUEST IS TO BE
DIRECTED.
ALL OFFEREES AND SUBSCRIBERS WILL BE ASKED TO ACKNOWLEDGE IN
WRITING THAT THEY HAVE READ THIS PROSPECTUS CAREFULLY AND
THOROUGHLY, AND UNDERSTOOD THE CONTENTS THEREOF, THEY WERE GIVEN
THE OPPORTUNITY TO OBTAIN ADDITIONAL INFORMATION, AND THEY DID SO
TO THEIR SATISFACTION.
CAUTIONARY STATEMENT REGARDING PROJECTIONS AND FORWARD LOOKING
STATEMENTS
This prospectus and documents included by reference contain
forward-looking statements within the meaning of:
1) Section 27 of the Securities Act of 1933;
2) Section 21E of the Securities Exchange Act of 1934; and
3) The Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to our future operations. They
estimate the happening of future events and are not based on
historical facts. Forward-looking statements may be identified by
terms such as:
believes predicts estimates
intends may anticipates
projects will probable
forecasts expects continue
This is not a comprehensive list. Similar terms, variations of
those terms, and the negative of those terms may also identify
forward-looking statements.
The "Risk Factors" discussed in this prospectus are cautionary
statements. They identify some of the factors that could cause
actual results to be significantly different from those predicted
in the forward-looking statements. The forward-looking statements
and documents included by reference were compiled by our
management based upon assumptions they considered reasonable.
These assumptions are subject to significant business, economic,
and competitive uncertainties and contingencies, many of which
are beyond our control. Therefore, forecasted and actual results
will likely vary and those variations may be material.
There can be no assurance that the statements, estimates, and
projections contained in this prospectus will be achieved. Thus,
we make no representation or warranty as to their accuracy or
completeness. In addition, we cannot guarantee that any
forecast in this prospectus will be achieved.
These forward-looking statements were compiled as of the date of
this prospectus or the date of the documents included by
reference, as the case may be. We do not intend to update these
statements. Therefore, you should evaluate them by considering
any changes that may have occurred after the date such forward-
looking statements appear.
We cannot guarantee that any of the assumptions relating to the
forward-looking statements or the documents included by reference
will prove to be accurate. Therefore, we urge you and your
advisors to review these forward-looking statements, to consider
the assumptions upon which they are based, and to ascertain their
reasonableness.
RISK FACTORS
THE PURCHASE OF THE SECURITIES OFFERED HEREBY INVOLVES
SIGNIFICANT RISKS. PROSPECTIVE INVESTORS SHOULD GIVE CAREFUL
ATTENTION TO THE FOLLOWING STATEMENTS RESPECTING CERTAIN RISKS
APPLICABLE TO THE OFFERING.
No operating history or revenue and minimal assets.
The Company has had no operating history and has received no
revenues or earnings from operations. The Company has no
significant assets or financial resources. The Company will, in
all likelihood, sustain operating expenses without corresponding
revenues, at least until it is able to secure financing to hire
employees who know the oral hygiene industry. This may result in
the Company incurring a net operating loss which will increase
continuously until the Company raises enough capital to start
marketing the toothbrush and mounting stand.
Significant working capital requirements.
Management believes the working capital requirements associated
with the manufacture, marketing and sale of the toothbrush and
mounting stand will be significant. The Company is not currently
generating sufficient cash flow to fund its operations and its
ability to continue its operations and implement its sales and
marketing strategy is dependent on its ability to continue to
generate proceeds from the sale of its shares. There can be no
assurance that any additional financing will be available to the
Company on a timely basis and on acceptable terms, if at all. Any
such financing may involve substantial dilution to the interests
of the Company's then existing shareholders. If the Company is
not successful in raising any additional financing necessary to
fund future working capital needs, then it might be forced to
curtail some of its operations, the exact nature of which cannot
be predicted at this time.
Competition.
The market for premium toothbrushes is intensely competitive. The
Company faces strong existing competition for similar products
and expects to face significant competition from new companies or
existing companies with new products. Many of these companies may
be better financed, have better name recognition and consumer
goodwill, have more marketing expertise and capabilities, have a
large and loyal customer base, along with other attributes that
may enable them to compete more effectively. The premium
toothbrush industry is currently dominated by four companies,
Colgate-Palmolive, Oral B, Johnson & Johnson, and Procter &
Gamble.
Additionally, purchases are often made based upon highly
subjective decisions that may be influenced by numerous factors,
many of which are out of the Company's control. Consumers'
subjective preferences are subject to rapid and unanticipated
changes. As a result, the Company expects to face substantial
competition from existing and new companies that market
toothbrushes which are perceived to enhance oral hygiene, are
visually appealing or appeal to other consumer preferences.
Further, the toothbrush industry is subject to rapid and
widespread imitation of toothbrush designs which, notwithstanding
the existence of any proprietary rights, could further hamper the
Company's ability to compete. The Company faces competition on
the basis of price, reputation and qualitative distinctions among
available products. There can be no assurances as to the market
acceptance of the toothbrush in relation to the Company's
competition.
Uncertainty of market penetration.
The oral hygiene and toothbrush industry is currently dominated
by several companies which have strong brand name recognition. As
a result, the market demand for new products from new companies
is subject to a high level of uncertainty. Achieving significant
market penetration and consumer recognition for the Company's
toothbrush and mounting stand will require significant efforts
and expenditures by the Company to inform potential customers
about its products. Although the Company intends to use a
substantial portion of its working capital for marketing and
advertising, there can be no assurance that it will be able to
penetrate existing markets for toothbrushes and related
accessories on a broad basis, position its product to appeal to a
broad base of customers, or that any marketing efforts undertaken
by it will result in any increased demand for or greater market
acceptance of its products. See "Description of Business."
Dependence on single retailing concept; limited marketing
capability and experience.
The Company intends to devote its efforts almost entirely to the
development and marketing of its toothbrush and is currently
dependent exclusively on proceeds, if any, to be generated from
the sale of its shares. It is not anticipated that the sale of
toothbrushes will generate meaningful revenue until a successful
retail and consumer market for its product is established. The
failure of the toothbrush to achieve sustained commercial
viability would have an immediate material adverse effect on its
operation. This will require substantial marketing efforts and
the expenditure of significant funds by the Company. There can be
no assurance that the Company's efforts will be successful or
that its toothbrush will ever achieve acceptance of any level in
the market. Moreover, the Company has limited independent
marketing capabilities and experience. See "Description of
Business."
No agreement for the manufacture or marketing of its products or
other transaction.
The Company has no arrangement, agreement, or understanding with
respect to the manufacture of its toothbrush or personnel to aid
in the operation of its business. There can be no assurance the
Company will successfully raise enough capital to hire personnel
or be able to bear the costs of the manufacture and marketing of
its toothbrush. The Company has been in the developmental stage
since inception and has no operations to date. Other than issuing
shares to its original shareholders, the Company never commenced
any operational activities other than identifying the industry
that management believes that there is an opportunity for
success. The Company has not established a specific length of
operating history or a specified level of earnings, assets, net
worth or other criteria which it will require to be able to
market its toothbrush.
Dependence on suppliers.
The Company does not intend to manufacture the toothbrush, and
therefore must rely on suppliers. The Company does not currently
have any suppliers and its success will depend on developing and
maintaining relationships with new suppliers. Any significant
delay or disruption in the supply caused by manufacturers'
production limitations, material shortages, quality control
problems, labor interruptions, shipping problems or other reasons
could materially adversely effect its business. The Company
intends to purchase its product pursuant to purchase orders
placed from time to time, however, it is not certain that its
suppliers will deliver specified quantities of components or will
deliver components for any specified period. Accordingly, the
Company will be substantially dependent on the ability of its
suppliers to provide adequate inventories on a timely basis and
on acceptable terms. Additionally, the loss of the services of a
supplier or substantial price increases imposed by a supplier
could result in production delays, thereby causing cancellation
of orders by customers and/or price increases resulting in
reduced revenues and margins, respectively.
Uncertainty regarding patents.
There is currently a United States patent for the toothbrush and
mounting stand and a United States design patent for the
toothbrush handle. See "Description of Business - Intellectual
Property." However, there can be no assurance that these patents
will provide the Company significant protection against
competitors. Litigation may be necessary in the future to protect
its patents, and there can be no assurance that the Company will
have the financial or managerial resources necessary to pursue
such litigation or otherwise to protect its patent rights.
Lack of diversification.
The Company's size and lack of operating history makes it
unlikely that it will be able to commit funds to diversify its
business until it has a proven track record, and it may not be
able to achieve the same level of diversification as larger
entities engaged in this type of business.
Continued management control, limited time availability.
While seeking investment and personnel with knowledge of the oral
hygiene industry, management anticipates devoting minimal time to
the business of the Company. The Company's officers have not
entered into written employment agreements with the Company and
are not expected to do so in the foreseeable future. The Company
has not obtained key man life insurance on its officers or
directors. Notwithstanding the limited experience and time
commitment of management, loss of the services of any of these
individuals would adversely affect development of the Company's
business and its likelihood of continuing operations.
Conflicts of interest.
The officers and directors have other interests to which they
devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or
serve on boards of directors, and each will continue to do so
notwithstanding the fact that management time may be necessary to
the Company's business. As a result, certain conflicts of
interest may exist between the Company and its officers and/or
directors which may not be susceptible to resolution. In
addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's
length negotiations. All of the potential conflicts of interest
will be resolved only through exercise by the directors of such
judgment as is consistent with their fiduciary duties. It is the
intention of Management, so as to minimize any potential
conflicts of interest, to present first to its Board of
Directors, any proposed investments for its evaluation.
Regulation.
Although the Company will be subject to regulation under the
Securities Exchange Act of 1934, management believes the Company
will not be subject to regulation under the Investment Company
Act of 1940, insofar as the Company will not be engaged in the
business of investing or trading in securities. The Company has
obtained no formal determination from the Securities and Exchange
Commission as to the status of the Company under the Investment
Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences.
USE OF PROCEEDS
Sale of the Shares of common stock offered by the Company to the
public (assuming they are sold for cash) will represent gross
proceeds to the Company of approximately $300,000. The Company
intends to seek employees with a knowledge of the oral hygiene
industry and to establish contacts with suppliers for
manufacture and marketing of its toothbrush. These proceeds,
less the expenses of the offering, will be used to provide
working capital for the Company to be used in part to hire those
employees and establish those contacts.
Management anticipates expending these funds for the purposes
indicated above. To the extent that such expenditures require the
utilization of funds in excess of the amounts anticipated,
supplemental amounts may be drawn from other sources, including,
but not limited to, general working capital and/or external
financing. The proceeds of this offering that are not expended
immediately may be deposited in interest or non-interest bearing
accounts, or invested in government obligations, certificates of
deposit, commercial paper, money market mutual funds, or similar
investments.
DETERMINATION OF OFFERING PRICE
The offering price of the Shares has been arbitrarily determined
by the Company based upon factors such as the Company's capital
needs and the percentage of ownership to be held by investors as
a result of this offering. The offering price does not
necessarily bear any relationship to assets, book value,
earnings history or other historical factors.
DILUTION
"Net tangible book value" is the amount that results from
subtracting the total liabilities and intangible assets of an
entity from its total assets. "Dilution" is the difference
between the public offering price of a security such as the
common stock, and its net tangible book value per share
immediately after the offering, giving effect to the receipt of
net proceeds in the Offering. As of October 31, 2000, the net
tangible book value of the Company was $0.001.
* If the Company achieves the sale of the maximum offered
shares at the public offering price of $.02, the pro forma net
tangible book value of the Company would be $303,000 or
approximately $0.017 per share, which would represent an
immediate increase of $0.016 in net tangible book value per share
and $0.003 per share dilution to new investors.
* If the Company achieves only the sale of the minimum offered
shares at the public offering price of $.02, the pro forma net
tangible book value of the Company would be $23,000 or
approximately $0.006 per share, which would represent an
immediate increase of $0.005 in net tangible book value per share
and $0.014 per share dilution to new investors.
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Assuming Assuming
Maximum Shares Minimum
Sold Shares Sold
Offering Price $0.02 $0.02
Net tangible book value per share $0.001 $0.001
before Offering
Increase Attributable to purchase $0.016 $0.005
of stock by new investors
Net tangible book value per share $0.017 $0.006
after offering
Dilution to new investors $0.003 $0.014
Percent Dilution to new investors 15.0% 70.0%
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SELLING SECURITY HOLDERS
There are no security holders of the Company offering securities.
PLAN OF DISTRIBUTION
Subject to the terms and conditions of the offering, the Company
is offering the Shares on a "best efforts, all or none" basis
with respect to the first 1,000,000 Shares, and a "best efforts"
basis with respect to the remaining 14,000,000 Shares. Pending
the sale of at least 1,000,000 Shares, all proceeds of the
offering will be held in a special non-interest bearing account
with Bank of America, Las Vegas, Nevada. Unless at least
1,000,000 Shares are sold within 30 days of the date of the
prospectus, or 120 days if extended, this offering will terminate
and all funds will be promptly returned to the subscribers
without interest thereon or deduction therefrom. Closing of the
offering could take place as late as two weeks after the maximum
120 day offering period. Once subscriptions for 1,000,000 Shares
($20,000) have been deposited, there will be an initial closing
after which the offering will continue for an additional
14,000,000 Shares on a "best efforts" basis subject to subsequent
closings. There can be no assurance that any or all of the Shares
being offered will be sold.
The gross proceeds to the Company represented by issuance of all
the Shares for cash under this offering to the public will be
$300,000, assuming that all the Shares are sold at the offering
price of $0.02. No commissions or other fees will be paid,
directly or indirectly, by the Company, or any of its principals,
to any person or firm in connection with solicitation of sales of
the Shares. These securities are offered by the Company subject
to prior issue and to approval of certain legal matters by
counsel.
Upon the minimum of $20,000 being sold and until the offering is
closed, all investors will have Shares issued to them which they
may vote.
Opportunity to Make Inquiries
The Company will make available to each offeree, prior to any
issue of the Shares, the opportunity to ask questions and receive
answers from the Company concerning any aspect of the investment
and to obtain any additional information contained in this
prospectus, to the extent that the Company possesses such
information or can acquire it without unreasonable effort or
expense.
Execution of Documents
Each person desiring to be issued Shares must complete, execute,
acknowledge, and deliver to the Company certain documents. By
executing these documents, the subscriber is agreeing that such
subscriber will be a shareholder in the Company and will be
otherwise bound by the Articles of Incorporation and the By-Laws
of the Company in the form attached to this prospectus.
Promptly upon receipt of the subscription documents by the
Company, a determination will be made as to whether a prospective
investor will be accepted as a shareholder. The Company may
reject a subscriber for any reason, including:
* Failure to conform to the requirements of this prospectus or
the failure to follow the proper subscription procedure.
* Insufficient documentation.
* Over subscription to the offering.
* Other reasons as the Company determines to be in its best
interest.
If a subscription is rejected, in whole or in part, the
subscription funds, or portion thereof, will be promptly returned
to the prospective investor without interest by depositing a
check, made payable the investor, in the amount of his funds in
the United States mail, certified returned-receipt requested.
Subscriptions may not be revoked, cancelled, or terminated by the
subscriber, except as provided by the terms of this prospectus.
LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
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Name Age Position Term
Lisa A. Schiano 41 President, Chief Since September 22, 2000
Executive Officer and
Director
Dr. Delmar J. Walker 50 Secretary/Treasurer, Since September 22, 2000
Chief Financial
Officer and Director
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Lisa A. Schiano
Lisa A. Schiano has been the president and director of the
Company since its inception, September 22, 2000.
Since 1998, Ms. Schiano has been employed as a 5th grade reading
teacher for Rose Warren Elementary School in Las Vegas, Nevada,
responsible for up to 90 students. Ms. Schiano was responsible
for implementing the "Success" Reading Wellness and the Writing
and Research programs. She is an active participant in grants,
staff development, the library-media center, and the social
committee.
From 1997 to 1998, Ms. Schiano was employed by Paradise
Elementary Professional School in Las Vegas, Nevada as a 4th
grade teacher. While there, she developed and implemented
coursework from Curriculum Essentials Framework for students at
risk, participated in development and execution of IEP's,
implemented Lucy Calkins' Reading and Writing Workshop,
implemented Project Life Literacy Intervention Program in
classroom, developed and instituted court system.
From 1995 to 1997, while completing her Master's degree, Ms.
Schiano was self employed with a home based childcare and
cleaning business. Ms. Shiano received her Master of Science
degree in Education from Dowling College in Oakdale, New York.
Ms. Schiano holds no directorships in any other reporting
company.
Dr. Delmar J. Walker
Dr. Delmar J. Walker has been the secretary/treasurer and
director of the Company since its inception, September 22, 2000.
Since April 1999, Dr. Walker has been the owner and director of
Walker Chiropractic in Las Vegas, Nevada. He is a chiropractic
physician.
From April 1989 to March 1999 Dr. Walker was a partner in
Chiropractic Specialty Center in Las Vegas, Nevada where he was a
chiropractic physician.
Dr. Walker holds no directorships in any other reporting company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth each person known to the Company,
as of the date of this prospectus, to be a beneficial owner of
five percent (5%) or more of the Company's common stock, by the
Company's directors individually, and by all of the Company's
directors and executive officers as a group.
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Title of Class Name and Address Amount and Percent
of Beneficial Owner Nature of of
Beneficial Class
Ownership
(1)(2)
Common Stock Lisa A. Schiano 1,500,000 50.00%
9315 Horizon Vista Lane
Las Vegas, NV 89117
Common Stock Dr. Delmar J. Walker 1,500,000 50.00%
9315 Horizon Vista Lane
Las Vegas, NV 89117
Common Stock All directors and 3,000,000 100.00%
officers as a group
(2 persons)
</TABLE>
(1) ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934. Pursuant to the rules
of the Securities and Exchange Commission, shares of common stock
which an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants are deemed
to be outstanding for the purpose of computing the percentage
ownership of such individual or group, but are not deemed to be
beneficially owned and outstanding for the purpose of computing
the percentage ownership of any other person shown in the table.
(2) None of the officers or directors has the right to acquire
any amount of the Shares within sixty days from options,
warrants, rights, conversion privilege, or similar obligations.
DESCRIPTION OF SECURITIES
The following description of the Company's capital stock is a
summary of the material terms of the Company's capital stock.
This summary is subject to and qualified in its entirety by the
Company's Articles of Incorporation and By-Laws, which are
included as exhibits to the registration statement of which this
prospectus forms a part, and by the applicable provisions of
Nevada law.
The Company's Articles of Incorporation authorize the issuance of
100,000,000 shares of common stock, $0.001 par value per share.
The shares are non-assessable, without pre-emptive rights, and do
not carry cumulative voting rights. Holders of common shares are
entitled to one vote for each share on all matters to be voted on
by the stockholders. The shares are fully paid, non-assessable,
without pre-emptive rights, and do not carry cumulative voting
rights. Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
Management is not aware of any circumstances in which additional
shares of any class or series of the Company's stock would be
issued to management or promoters, or affiliates or associates of
either.
Shares Eligible for Future Sale
All of the 3,000,000 shares which are currently held, directly or
indirectly, by Management have been issued in reliance on the
private placement exemption under the Securities Act of 1933, as
amended (the "Act"). See "Security Ownership of Certain
Beneficial Owners and Management." Such Shares will not be
available for sale in the open market without separate
registration except in reliance upon Rule 144 under the Act. In
general, under Rule 144 a person (or persons whose shares are
aggregated) who has beneficially owned shares acquired in a non-
public transaction for at least one year, including persons who
may be deemed affiliates of the Company (as that term is defined
under the Act) would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of 1%
of the then outstanding shares of common stock, or the average
weekly reported trading volume on all national securities
exchanges and through NASDAQ during the four calendar weeks
preceding such sale, provided that certain current public
information is then available. If a substantial number of the
shares owned by these shareholders were sold pursuant to Rule 144
or a registered offering, the market price of the common stock
could be adversely affected.
All Shares registered in the instant offering shall be eligible
for resale to the general public should there be a need for this
type of securities. The Company makes no representations or
guarantee that the Shares registered hereunder shall have a
market for resale.
INTEREST OF NAMED EXPERTS AND COUNSEL
No named expert or counsel was hired on a contingent basis, or
will receive a direct or indirect interest in the Company in
exchange for preparation of the prospectus, or was a promoter,
underwriter, voting trustee, director, officer or employee of the
Company.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
The Company and its affiliates may not be liable to its
shareholders for errors in judgment or other acts, or omissions
not amounting to intentional misconduct, fraud or a knowing
violation of the law, since provisions have been made in the
Articles of Incorporation and By-Laws limiting such liability.
The Articles of Incorporation and By-Laws also provide for
indemnification of the officers and directors of the Company in
most cases for any liability suffered by them or arising from
their activities as officers and directors of the Company if they
were not engaged in intentional misconduct, fraud or a knowing
violation of the law. Therefore, purchasers of these securities
may have a more limited right of action than they would have
except for this limitation in the Articles of Incorporation and
By-Laws.
The officers and directors of the Company are accountable to the
Company as fiduciaries, which means such officers and directors
are required to exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal
action on behalf of himself and all others similarly stated
shareholders to recover damages where the Company has failed or
refused to observe the law.
Shareholders may, subject to applicable rules of civil procedure,
be able to bring a class action or derivative suit to enforce
their rights, including rights under certain federal and state
securities laws and regulations. Shareholders who have suffered
losses in connection with the purchase or sale of their interest
in the Company in connection with such sale or purchase,
including the misapplication by any such officer or director of
the proceeds from the sale of these securities, may be able to
recover such losses from the Company.
Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons
of the small officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.
ORGANIZATION WITHIN THE LAST FIVE YEARS
There are no relationships or transactions to be reported.
DESCRIPTION OF BUSINESS
Business Development
Travco, Inc. (the "Company") is a Nevada corporation formed on
September 22, 2000. Its principal place of business is located at
9315 Horizon Vista Lane, Las Vegas, NV 89117. The Company was
organized to develop a workable prototype of its patented
portable toothbrush and mounting stand designed to improve oral
care at an affordable price. Once the prototype has been
developed the Company intends to manufacture, market and
distribute its product. See "Marketing Strategies." Since its
inception, the Company has not been a party to any bankruptcy,
receivership or similar proceeding.
The Product
The Company's product, a portable toothbrush and mounting stand,
provides an oral hygiene tool to accommodate all lifestyles and
needs for the maintenance and care of teeth, mouth and gums, and
for general freshness and overall health. The mounting stand is
a user friendly design which supports the toothbrush bristle head
in an elevated position above a sink surface for an inverted
hygienic drying of bristles thus preventing contamination by the
sink surface. The Company intends to construct the toothbrush
and mounting assembly with a flexible, recycled plastic or rubber
that can be easily sanitized in the dishwasher. The portable
toothbrush is a compact all-in-one tool for all widths and
bristle sizes, accommodating all grades of dental floss.
The toothbrush includes a reusable bristle head inserted within
the receptacle portion of the handle, accommodating changeable
and renewable bristles which are discarded when they are past
their time of effectiveness, thereby maintaining the toothbrush
sanitarily and hygienically. The removable bristle head is
inserted into the receptacle, so that the bristles can be changed
when worn out. The receptacle portion also accommodates various
sized bristles and firmness. The all-in-one hygiene tool also
includes a replaceable dental floss dispenser which accommodates
various widths and finishes of floss for user preferences.
Being portable, the toothbrush can accommodate the users' oral
hygiene needs wherever he may go, such as camping, traveling, out
for lunch or dinner, home, office or vacationing, where a user
may not have sanitary conditions on a bathroom sink surface. The
Company intends to sell its toothbrush within the premium
toothbrush segment, at a retail price point of approximately
$3.29 to $5.00. Management considers the toothbrush to be equal
to or better than other high premium toothbrushes because it
incorporates the best features of all other high quality brushes.
The Company's objective is to become a leading manufacturer of
toothbrushes and hopes to develop other oral hygiene products. To
achieve this objective, it will focus its market strategy to
develop the reputation of its product, create market penetration,
pursue the development of other oral hygiene products, and will
continue to refine and improve its existing technology. An
integral part of this strategy will be the implementation of
marketing efforts to target domestic sales initially. With
success, the Company could possibly expand into international
sales. The Company's domestic strategy is to create product
awareness through a marketing program in addition to free
sampling to consumers and dental professionals.
Industry Background
According to Supermarket Research, the toothbrush market has
increased 8% to 10% per year, since 1996. The premium toothbrush
market share accounted for 42% of this increase. The Company
expects year-to-year increases will continue at or above this
range. Total toothbrush sales for 1995, 1996, and 1997 were $700
million, $757 million, and $832 million, respectively. The
increase in sales reflected 8% and 10% for 1996 and 1997,
respectively. According to Information Resources, Inc., the
premium toothbrush segment totaled 24% or $168 million; 34% or
$257 million; and 42% or $349 million; for 1995, 1996, and 1997
respectively, for the total sales mentioned above. This reflects
an increase of 53% for premium sales from 1995 to 1996 and 35%
increase from 1996 to 1997. Over 90% of adults in the United
States use toothbrushes. Simmons Market Research Bureau
("Simmons") has reported that slightly more than 90% of U.S.
adults -- over 169 million individuals -- used manual
toothbrushes in 1994. Women accounted for nearly 53% of users and
men for more than 47%. Many of the 18 toothbrush brands studied
by Simmons enjoy strong brand loyalty. Overall, 63% of adults
stay with one label and the more popular the brand, the more
loyal its users.
Competition
Currently, there are more than 200 competitors sharing the oral
hygiene market. Broader ranges of companies are active in the
toothbrush category than in other categories of the oral hygiene
market. The top two marketers responsible for 41% of toothbrush
retail sales in 1996 were Colgate-Palmolive's Colgate (19%) and
Gillette's Oral B (22%). Johnson & Johnson's Reach (15%) and
Procter & Gamble's Crest (10%) occupy the middle echelon.
SmithKline Beecham and its Aquafresh Toothbrush maintained 5%.
Mentadent, a product of the Unilever Group, has 6% of sales.
Private label marketers are relatively strong in the toothbrush
category. They reached a combined share of 7% of toothbrush
retail dollar sales. The Company plans to operate in the oral
care industry in which leading marketers have done an outstanding
job of creating public awareness of the need for better gum care.
The primary advantage many competitors have over the Company is
capital and the ability to make consumers aware of their
products.
Business Strategy
The Company will compete in the premium quality segment of the
toothbrush/oral hygiene industry, a growing and highly
competitive area. To compete in this market, the Company's
business strategy is to:
* Strengthen and broaden core brands through marketing and
advertising, product development and manufacturing;
* Develop a presence in all markets in which it competes and
enter new markets where there are opportunities for growth; and
* Look to reduce costs and improve operating efficiencies,
customer service and product quality and carefully manage working
capital.
Marketing Strategies
The Company intends to focus its marketing on package design,
direct contact with dental professionals, and the employment of
marketing specialists who will concentrate their efforts on its
product's significant point of difference.
It is the intent of the Company to focus much of its marketing on
the package design so to present the toothbrush in an attractive,
eye catching package that would provide visibility above and
beyond any other toothbrush package on the shelf. The Company
will design an eye catching package also keeping in mind that
some shoppers may tamper with the package in the store in an
effort to examine the toothbrush.
In addition, the Company intends to target dentists and
hygienists directly and distribute its brushes to them throughout
the country by means of dental conventions and direct mail
promotions in hopes that the dental professionals will become
regular customers and purchase the toothbrush for distribution to
their patients.
Management is aware that getting toothbrushes into retail stores
requires broker representation and will seek to enter into sales
broker agreements as necessary. Management's preliminary
research has found that such agreements could require an initial
consultant fee and each month thereafter a set guaranteed fee
which could be offset partially or entirely by a commission fee
earned on the net invoiced wholesale orders placed with the
Company by the sales broker. The sales broker may also hire
outside brokers to solicit and serve the customers in a certain
territory in a manner to maximize the Company's sales. The
outside brokers will be compensated with an additional and
separate commission fee for all net invoiced sales generated
directly by their firm.
Proposed National Marketing Plan
The Company plans to develop a national marketing plan to be
implemented on an expanding regional basis over a four-year
period. The main objective of this plan will be to gain a
substantial market share and profit in net sales by mid 2003. The
strategy and tactics of the integrated marketing plan include:
* Positioning the portable toothbrush and mounting stand as
the superior oral care system available today
* Securing a substantial all commodity volume (ACV) in the
initial year in controlled expansion markets
* Incorporating a dental hygiene program targeted at securing
broad professional product endorsement
By following the strategies listed above, as well as using trade
programs such as scan downs, promotions, prepared displays, point
of sale materials, coupons, clip strips and other marketing
tools, Management believes that it can effectively achieve
distribution to a competitive ACV percentage which means
obtaining distribution in a large percentage (by volume) of
outlets that distribute this product class.
After the product is available for distribution, the Company
expects to begin test marketing it in certain states not yet
determined for approximately 12 months, providing information and
feedback on both the toothbrush and the effectiveness of various
promotional and advertising programs. Subsequent to the test
market, knowledge accumulated will be used to amend, if
necessary, relevant aspects of the marketing strategies and
tactics, so that a national introduction can occur in the second
year. Management believes that the quality of its product and the
previously stated focus on the importance of dental care would
indicate that the portable toothbrush and mounting stand should
achieve and sustain a substantial share of the market.
Targeted Direct Mail Dental Program
In conjunction with the integrated marketing plan described
above, Management believes another important factor is securing
dental professional endorsements. This plan includes a direct
marketing program to send a Jiffy Pack Mailer, which will include
a video, samples, printed information and coupons to dental
hygienists. The Company also plans to be represented at regional
dental conventions and to provide direct professional sales. The
support of dental professionals will be an important element in
creating demand of its product. The Company intends to
continually promote the product to the dental professionals by:
* Offering professional discounted prices;
* Providing substantial advertising in dental publications
highlighting the unique features and positive health benefits of
the toothbrush and mounting stand;
* Providing direct mail and free samples to dental
professionals;
* Participating in major dental conventions;
* Visiting dental students to promote the toothbrush with
samples, lectures and conducting additional clinical tests at
major dental schools; and
* Creating a website with links to the Company's website from
other dental related websites.
Proposed Methods of Distribution
The Company proposes to sell its product to retailers (consisting
primarily of grocery stores, club stores, and super drug discount
stores), wholesalers, dental professionals, distributors, multi-
level marketers and private individuals. When it becomes
necessary, the Company proposes to lease warehouse space to be
used as the fulfillment center to its product dispatching which
will provide adequate space to warehouse its products thus
eliminating the need for warehousing fees.
The Company will not manufacture, nor does it have or expect to
establish the capability to manufacture its products. The Company
expects to out-source equipment and inventory from multiple
vendors, but there is no assurance that it will be able to do so.
The Company expects to engage a production facility capable of
processing and packaging enough of the toothbrushes to satisfy
demand, with the ability to increase that capacity with short
notice. This production plant will act as the Company's major
subcontractor. In the event that there arises a problem with its
current vendor, the Company will seek to establish contingency
manufacturing capacity. The Company will work to assure that
tooling can be moved on very short notice to another
subcontractor if necessary so that any break in production needs
would be minimal.
Intellectual Property
The Company's ability to compete effectively within the
toothbrush and oral hygiene market depends, to a large degree,
upon the proprietary nature of its product designs. The Company
will rely upon a combination of patents, proprietary technology
and know-how, trademarks, trade secrets, confidentiality
agreements and other contractual covenants to establish and
protect its technology and other intellectual property rights.
There can be no assurance the steps taken by the Company to
protect its intellectual property will be adequate to prevent
misappropriation of that intellectual property, or that its
competitors will not independently develop products substantially
equivalent or superior to its products. Management plans to
conduct its business so not to infringe upon the valid
proprietary rights of others, but there can be no assurance third
parties will not assert infringement claims against the Company.
Defending such claims can be both expensive and time-consuming,
and there can be no assurance that the Company would be able to
successfully defend against or similarly prosecute an
infringement claim. The loss of such rights (or the Company's
failure to obtain similar licenses or agreements) would have a
material adverse effect on the Company's business, financial
condition, and results of operations.
The patent of the Portable Toothbrush and Mounting Stand was
issued by the United States Commissioner of Patents and
Trademarks on May 21, 1996 under patent number 5,517,712, good
until September 29, 2014. On November 26, 1996, the United
States Commissioner of Patents and Trademarks granted a design
patent for a toothbrush handle under patent number Des. 375,839.
The design patent carries a 14-year term. On October 4, 2000,
pursuant to a Licensing Agreement and Exclusive Right to Use for
each of the patents (the "Agreements"), Lisa A. Schiano, mother
and legal guardian of the inventor, Mr. Travis A. Schiano, a
minor, granted the Company authorization for the unrestricted and
exclusive right to use of all the rights and privileges granted
within the patents. The Agreements will expire in ten (10) years
unless extended by written mutual agreement of the parties. The
Agreements will be filed with the United States Patent and
Trademark Office.
Governmental Approval
There are no governmental approval requirements for toothbrushes.
The FDA, however, requires that the Company file a registration
of exemption which bears an expiration date. The Company will
file for registration with the FDA as an Initial Distribution and
Specification Developer and request that they assign the Company
an Owner/Operator number. Registration for exemption is renewable
at no charge by completing a simple form that is automatically
generated by the FDA. The Company does not anticipate any further
requirements or any future government regulations concerning its
product.
Costs and Effects of Compliance with Environmental Laws
The Company anticipates that it will have no material costs
associated with compliance with federal, state or local
environmental law because such regulations are inapplicable to
its product and its manufacturing.
Research and Development
The Company has no experience in the Research and Development
(R&D) of its product, however, after research on development
costs of similar products, Management anticipates its R&D costs
to be minimal. Management expects the majority of its R&D
expenses to be for the design and development of the product's
packaging and the efforts to develop new products. The Company
expects the patented design of the toothbrush and mounting stand
to be developed so as not to incur substantial research and
development costs. Therefore, it is anticipated that any R&D
costs which will be passed on to the customers to be minimal. The
Company, however, expects to established a research and
development team that will work along with outside consultants to
develop and adopt new products, whereupon Management anticipates
that at such time a percentage of its gross revenues will be
allocated to R&D.
Employees
The Company currently has no employees and its executive officers
at present are not compensated for their time contributed to the
Company nor are they accruing salaries. Management expects to use
consultants, attorneys, and accountants as necessary. The need
for employees will be addressed at such time the Company's
business plan is implemented.
The Company is therefore dependent on the efforts and abilities
of its current management composed of Lisa A. Schiano, President,
Chief Executive Officer, and Director; Dr. Delmar J. Walker,
Secretary/Treasurer, Chief Financial Officer and Director. The
loss of any of these key employees would have a material adverse
effect on the Company's business. The members of the Board of
Directors will take all commercially reasonable efforts to
minimize the risks attendant with the departure of any key
personnel. There can be no assurance, however, that upon the
departure of any key personnel that replacement personnel would
cause the Company to operate profitably. The Company currently
has no employment agreement nor does it carry key-man life
insurance with respect to any of its executive employees.
MANAGEMENT'S PLAN OF OPERATION
The Company is focusing its plan of operation on the development
of a workable prototype of its patented toothbrush and mounting
stand. The Company intends to manufacture, market and sell its
toothbrush by developing relationships with major companies in
order to network its product, enabling flexibility and
availability of which Management believes is an innovative,
resourceful and uniquely designed personal hygiene instrument.
The Company currently does not employ any salespeople for the
development or marketing of its product but hopes through the
instant offering that it can raise capital so that it may be in a
position to hire or consult with persons who have experience and
connections to people and/or entities in the industry.
As additional funds become available, the Company's objective is
to position itself predominately in the personal hygiene industry
based on its strength and credibility of its product. The
Company plans to price its product competitively which will vary
by region. Advertising for this product will primarily be through
print media and Shelf-Talkers, that grab the attention of the
consumer as they pass through the toothbrush aisle. As the
market grows, the Company intends to initiate a television ad
campaign as well as joint marketing with selected toothpaste
companies.
For the current fiscal year, the Company anticipates incurring a
loss as a result of organizational expenses, expenses associated
with registration under the Securities Act of 1933, and expenses
associated with setting up a company structure to begin
implementing its business plan. The Company anticipates that
until these procedures are completed, it will not generate
revenues, and may continue to operate at a loss thereafter,
depending upon the performance of the business.
DESCRIPTION OF PROPERTY
The Company does not currently own any property.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no relationships, transactions, or proposed
transactions to which the registrant was or is to be a party, in
which any of the named persons set forth in Item 404 of
Regulation SB had or is to have a direct or indirect material
interest.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Capitalization
The Company is authorized to issue 100,000,000 shares of Common
Stock, $0.001 par value per share.
The Company's stock is not listed on any exchange. Management has
not undertaken any discussions, preliminary or otherwise, with
any prospective market maker concerning the participation of such
market maker in the after-market for the Company's securities and
Management does not intend to initiate any such discussions until
such time as the Company has raised enough capital to hire
employees and is conducting business. There is no assurance that
a trading market will ever develop or, if such a market does
develop that it will continue.
Market Price
The Registrant's Common Stock is not quoted on any exchange at
the present time.
Effective August 11, 1993, the Securities and Exchange Commission
adopted Rule 15g-9, which established the definition of a "penny
stock," for purposes relevant to the Company, as any equity
security that has a market price of less than $5.00 per share or
with an exercise price of less than $5.00 per share, subject to
certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer
approve a person's account for transactions in penny stocks; and
(ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and
quantity of the penny stock to be purchased. In order to approve
a person's account for transactions in penny stocks, the broker
or dealer must (i) obtain financial information and investment
experience and objectives of the person; and (ii) make a
reasonable determination that the transactions in penny stocks
are suitable for that person and that person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. The broker
or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating
to the penny stock market, which, in highlight form, (i) sets
forth the basis on which the broker or dealer made the
suitability determination; and (ii) that the broker or dealer
received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks
of investing in penny stocks in both public offerings and in
secondary trading, and about commissions payable to both the
broker-dealer and the registered representative, current
quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in
the account and information on the limited market in penny
stocks.
The National Association of Securities Dealers, Inc. (the
"NASD"), which administers NASDAQ, has recently made changes in
the criteria for initial listing on the NASDAQ Small Cap market
and for continued listing. For initial listing, a company must
have net tangible assets of $4 million, market capitalization of
$50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years.
For initial listing, the common stock must also have a minimum
bid price of $4 per share. In order to continue to be included on
NASDAQ, a company must maintain $2,000,000 in net tangible assets
and a $1,000,000 market value of its publicly-traded securities.
In addition, continued inclusion requires two market makers and a
minimum bid price of $1.00 per share.
However, there can be no assurances that the Company will qualify
its securities for listing on NASDAQ or some other national
exchange, or be able to maintain the maintenance criteria
necessary to insure continued listing. The failure of the Company
to qualify its securities or to meet the relevant maintenance
criteria after such qualification in the future may result in the
discontinuance of the inclusion of the Company's securities on a
national exchange. In such events, trading, if any, in the
Company's securities may then continue in the non-NASDAQ over-the-
counter market. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
Holders
There are currently two holders of the Company's securities. The
Company issued 3,000,000 shares of common stock to the current
officers and directors on October 4, 2000.
Dividends
The Registrant has no plans to pay any dividends in the future
upon issuance of the Company's stock.
EXECUTIVE COMPENSATION
The Company's officers and directors do not receive any
compensation for their respective services rendered to the
Company, nor have they received such compensation in the past.
They have agreed to act without compensation until authorized by
the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations. As of the date
of this prospectus, the Company has no funds available to pay
directors. Further, none of the directors are accruing any
compensation.
No retirement, pension, profit sharing, stock option or insurance
programs or other similar programs have been adopted by the
Company for the benefit of its employees.
FINANCIAL STATEMENTS
The audited financial statements of the Company as of October 15,
2000 included in this prospectus have been audited by Merdinger,
Fruchter, Rosen & Corso, P.C., an independent public accounting
firm, as indicated in its report thereto, and are included herein
in reliance upon the authority of Merdinger, Fruchter, Rosen &
Corso, P.C. as experts in accounting and auditing and in giving
said reports.
TRAVCO, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
CONTENTS
<TABLE>
<S> <C>
PAGE
INDEPENDENT AUDITORS' REPORT F-1
BALANCE SHEET F-2
STATEMENT OF OPERATIONS F-3
STATEMENT OF STOCKHOLDERS' DEFICIENCY F-4
STATEMENT OF CASH FLOWS F-5
NOTES TO FINANCIAL STATEMENTS F-6 - F-8
</TABLE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF TRAVCO, INC.:
We have audited the accompanying balance sheet of TRAVCO, INC. (A
Development Stage Company) as of October 15, 2000 and the related
statements of operations, stockholders' equity and cash flows for the
period from September 22, 2000 (inception) to October 15, 2000. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of TRAVCO, INC.
as of October 15, 2000 and the results of its operations and its cash
flows for the period from September 22, 2000 (inception) to October 15,
2000 in conformity with generally accepted accounting principles.
MERDINGER, FRUCHTER ROSEN & CORSO, P.C.
Certified Public Accountants
New York, New York
October 17, 2000
F-1
TRAVCO, INC.
(A Development Stage Company)
BALANCE SHEET
OCTOBER 15, 2000
<TABLE> <C>
<S>
ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value;
100,000,000 shares authorized,
3,000,000 shares issued and outstanding 3,000
----------
Deficit accumulated during
the development stage (3,000)
----------
Total stockholders' equity -
----------
Total liabilities and stockholders' equity $ -
==========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-2
TRAVCO, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM SEPTEMBER 22, 2000
(INCEPTION) TO OCTOBER 15, 2000
<TABLE>
<S> <C>
Revenue $ -
General and administrative expenses
3,000
Loss from operations before provision for income taxes (3,000)
---------
Provision for income taxes -
---------
Net loss $(3,000)
=========
Net loss per share - basic and diluted $ -
=========
Weighted average number of common shares
outstanding
3,000,000
=========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-3
TRAVCO, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
SEPTEMBER 22, 2000 (INCEPTION) TO OCTOBER 15, 2000
<TABLE>
<S> <C> <C> <C> <C>
Deficit
Accumulated
During
the
Common Stock Development
Shares Amount Stage Total
Balance, September 22, 2000 - $ - $ - $ -
Issuance of shares for services-
October 4, 2000 3,000,000 3,000 - 3,000
Net loss - - (3,000) (3,000)
--------- ------ -------- --------
Balance, October 15, 2000 3,000,000 $3,000 $(3,000) $ -
========= ====== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-4
TRAVCO, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
SEPTEMBER 22, 2000 (INCEPTION) TO OCTOBER 15, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,000)
Stock issued for services 3,000
-----------
NET CASH USED IN OPERATING ACTIVITIES -
-----------
CASH AND CASH EQUIVALENTS - September 22, 2000 -
-----------
CASH AND CASH EQUIVALENTS - October 15, 2000 $ -
===========
</TABLE>
SUPPLEMENTAL INFORMATION:
During the initial period September 22 to October 15, 2000, the
Company paid no cash for interest or income taxes.
The accompanying notes are an integral part of these financial
statements.
F-5
TRAVCO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 15, 2000
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
Travco, Inc. (the "Company") is currently a
development-stage company under the provisions of
the Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS")
NO. 7. The Company was incorporated under the laws
of the state of Nevada on September 22, 2000.
Use of Estimates
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 revenue and
expenses during the reporting period. Actual
results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with original maturities of three
months or less to be cash equivalents.
Income Taxes
Income taxes are provided for based on the liability
method of accounting pursuant to SFAS No. 109,
"Accounting for Income Taxes". Deferred income
taxes, if any, are recorded to reflect the tax
consequences on future years of differences between
the tax bases of assets and liabilities and their
financial reporting amounts at each year-end.
Earnings Per Share
The Company calculates earnings per share in
accordance with SFAS No. 128, "Earnings Per Share",
which requires presentation of basic earnings per
share ("BEPS") and diluted earnings per share
("DEPS"). The computation of BEPS is computed by
dividing income available to common stockholders by
the weighted average number of outstanding common
shares during the period. DEPS gives effect to all
dilutive potential common shares outstanding during
the period. The computation of DEPS does not assume
conversion, exercise or contingent exercise of
securities that would have an antidilutive effect on
earnings. As of October 15, 2000, the Company has
no securities that would effect loss per share if
they were to be dilutive.
Comprehensive Income
SFAS No. 130, "Reporting Comprehensive Income",
establishes standards for the reporting and display
of comprehensive income and its components in the
financial statements. The Company had no items of
other comprehensive income and therefore has not
presented a statement of comprehensive income.
F-6
TRAVCO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 15, 2000
NOTE 2 - INCOME TAXES
The components of the provision for income taxes for the
period from September 22, 2000 (inception) to October
15, 2000 are as follows:
Current Tax Expense
U.S. Federal $ -
State and Local -
----------
Total Current -
----------
Deferred Tax Expense
U.S. Federal -
State and Local -
----------
Total Deferred -
----------
Total Tax Provision (Benefit) from
Continuing Operations $ -
==========
The reconciliation of the effective income tax rate
to the Federal statutory rate is as follows:
Federal Income Tax Rate 34.0%
Effect of Valuation Allowance ( 34.0)%
---------
Effective Income Tax Rate 0.0%
=========
At October 15, 2000, the Company had net carryforward
losses of $3,000. Because of the current uncertainty
of realizing the benefits of the tax carryforward, a
valuation allowance equal to the tax benefits for
deferred taxes has been established. The full
realization of the tax benefit associated with the
carryforward depends predominantly upon the Company's
ability to generate taxable income during the
carryforward period.
Deferred tax assets and liabilities reflect the net tax
effect of temporary differences between the carrying amount
of assets and liabilities for financial reporting purposes
and amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities
as of October 15, 2000 are as follows:
Deferred Tax Assets
Loss Carryforwards $ 1,000
Less: Valuation Allowance ( 1,000)
-----------
Net Deferred Tax Assets $ -
===========
Net operating loss carryforwards expire in 2020.
F-7
TRAVCO, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 15, 2000
NOTE 3 - COMMON STOCK
On October 4, 2000, the Company issued 3,000,000
shares of common stock for services valued at $3,000.
F-8
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Registrant has not changed accountants since its formation,
and Management has had no disagreements with the findings of its
accountants.
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form SB-2 with
the Commission under the Securities Act for the registration of
the common stock offered by this prospectus. For purposes of this
prospectus, the term Registration Statement means the initial
registration statement and any and all amendments thereto. This
prospectus omits certain information contained in the
registration statement as permitted by the rules and regulations
of the Commission. For further information with respect to the
Company and the common stock offered, please refer to the
registration statement, including the exhibits thereto.
Statements contained in this prospectus concerning the contents
of any contract or other document are not necessarily complete,
and where such contract or other document is an exhibit to the
registration statement, or otherwise, each such statement, is
qualified by the provisions of such exhibit.
Following the effectiveness of this Registration Statement the
Company intends to file a separate registration statement on Form
8-A, at which time the Company will become subject to the
informational requirements of the Exchange Act, and in accordance
therewith will file periodic reports, proxy and information
statements, and other information with the Commission. Reports,
registration statements, proxy and information statements, and
other information filed by the Company with the Commission. The
registration statement can be inspected and copied at prescribed
rates at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, NW, Room 1024,
Washington, D.C. 20549, and at its regional offices located at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
Seven World Trade Center, Suite 1300, New York, New York 10048.
Copies of these materials may be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth
Street, NW, Room 1024, Washington, D.C. 20549. by calling 1-800-
SEC-0330. The Commission maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, registration
statements, proxy and information statements, and other
information.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Information on this Item is set forth in the prospectus under the
heading "Disclosure of Commission Position on Indemnification for
Securities Act Liabilities."
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Information on this Item is set forth in the prospectus under the
heading "Use of Proceeds."
RECENT SALES OF UNREGISTERED SECURITIES
With respect to the issuances of stock made, the Registrant
relied on Section 4(2) of the Securities Act of 1933, as amended.
No advertising or general solicitation was employed in offering
the Shares. The securities were not offered for the purpose of
resale or distribution, and the transfer thereof was
appropriately restricted.
EXHIBITS
Exhibit Description.
3.1 Articles of Incorporation
3.2 By-Laws of the Registrant
5.1 Opinion of Chapman & Flanagan, Ltd. as to legality
10.1 Licensing Agreement and Exclusive Right to Use for Patent
Nr. 5,517,712 dated October 4, 2000
10.2 Licensing Agreement and Exclusive Right to Use for Patent
Nr. 375,839 dated October 4, 2000
23.1 Consent of Chapman & Flanagan, Ltd. (contained in Exhibit
5.1)
23.2 Consent of Merdinger, Fruchter, Rosen & Corso, P.C.,
Certified Public Accountants
27.1 Financial Data Schedule
UNDERTAKINGS
The undersigned registrant hereby undertakes to:
(a) (1) File, during any period in which it offers or sells
securities, a post-effective amendment to this
registration statement to:
i. include any prospectus required by section 10(a)(3)
of the Securities Act;
ii. reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change
in the information in the registration statement; and
notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
iii. include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration statement of
the securities offered, and the offering of the securities at
that time to be the initial bona fide offering.
(3) File a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the
offering.
(b) Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the small
business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection
with the securities being registered, the small business issuer
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
______________________________________________
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorize, in the
City of Las Vegas, State of Nevada, on October 31, 2000.
TRAVCO, INC.
By: /s/ Lisa A. Schiano
Lisa A. Schiano, President
Special Power of Attorney
The undersigned constitute and appoint Lisa A. Schiano their
true and lawful attorney-in-fact and agent with full power of
substitution, for him and in his name, place, and stead, in any
and all capacities, to sign any and all amendments, including
post-effective amendments, to this Form SB-2 Registration
Statement, and to file the same with all exhibits thereto, and
all documents in connection therewith, with the Securities and
Exchange Commission, granting such attorney-in-fact the full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that such
attorney-in-fact may lawfully do or cause to be done by virtue
hereof.
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates stated:
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Lisa A. Schiano President (Chief Executive October 31, 2000
Officer) and Director
/s/ Delmar J. Walker Secretary/Treasurer (Chief October 31, 2000
Financial Officer) and Director
</TABLE>
