<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
COMMISSION FILE NUMBER 33-4734-D
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING CORPORATION
(FORMERLY RILEY INVESTMENTS, INC.)
(Exact name of registrant as specified in charter)
OREGON 93-0950786
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
211 EAST 7TH STREET, 11TH FLOOR, AUSTIN, TEXAS 78701
---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (512) 391-2000
--------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of May 11, 1998, the Company had
outstanding 3,021,412 shares of its common stock, par value $0.0001.
<PAGE> 2
PART I FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
UNAUDITED UNAUDITED
MARCH 31, MARCH 31,
ASSETS 1998 1997
----------- -----------
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 3,662,406 $ --
Restricted Cash 216,815 100,640
Accounts receivable, net of allowance for
doubtful accounts of $12,020 in 1998 and 1997 86,416 44,766
Due from affiliate 373,270 --
Prepaid hotel cost 198,346 451,718
Prepaid cruise and tour cost 278,573 722,537
Rooms/Cabins held for sale 140,604 --
----------- -----------
Total Current Assets 4,956,430 1,319,661
----------- -----------
PROPERTY AND EQUIPMENT, AT COST, NET OF
accumulated depreciation 111,014 58,480
----------- -----------
OTHER ASSETS
Other assets 35,161 --
Intangible assets, net of accumulated
Amortization 371,001 615,578
----------- -----------
$ 5,473,606 $ 1,993,719
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 321,186 513,944
Other current liabilities 188,890 374,407
Due to affiliate -- 78,121
Current portion of long-term debt -- 530,604
Deferred hotel revenue 506,153 580,089
Deferred cruise and tour revenue 344,724 758,126
Deferred subscription revenue 86,660 118,531
----------- -----------
Total Current Liabilities 1,447,613 2,953,822
----------- -----------
OTHER LIABILITIES
Long-term debt -- 254,223
Deferred discount -- 54,644
----------- -----------
Total Other Liabilities -- 308,867
----------- -----------
STOCKHOLDERS' (DEFICIT)
Preferred stock, no par value; authorized
10,000,000 shares; none issued and outstanding -- --
Common stock $.0001 par value; authorized
30,000,000 shares; issued and outstanding
3,021,412 and 1,431,858 shares in 1998 and 1997,
Respectively (Note 2) 302 136
Additional paid-in capital 6,703,600 599,024
Accumulated deficit (2,677,909) (1,868,130)
----------- -----------
Total Stockholders' Equity (Deficit) 4,025,993 (1,268,970)
----------- -----------
$ 5,473,606 $ 1,993,719
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE> 3
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
================================================================================
<TABLE>
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
------------------
MARCH 31, MARCH 31,
1998 1997
---- ----
REVENUES
<S> <C> <C>
Hotel revenue $ 1,153,083 $ 1,044,379
Cruise and tour revenue 1,481,918 1,451,930
Magazine subscription and advertising revenue 121,097 60,152
Interest income 20,059 --
Merchandise and other revenue 4,304 3,227
--------- ---------
Total Revenues 2,780,461 2,559,688
--------- ---------
COST OF SALES
Hotel cost 906,888 813,848
Cruise and tour cost 1,295,890 1,279,865
Magazine publishing cost 190,580 62,840
--------- ---------
Total Cost of Sales 2,393,358 2,156,553
--------- ---------
Gross Profit 387,103 403,135
OPERATING EXPENSES
Selling, general and administrative expenses 237,203 229,133
Wages 424,557 238,304
Depreciation and amortization 11,950 11,020
--------- ---------
Total Operating Expenses 673,710 478,457
--------- ---------
Net Loss Before Income Taxes (286,607) (75,322)
Income Tax Expense -- --
--------- ---------
Net (Loss) $(286,607) $ (75,322)
========= =========
Net (Loss) Per Common Share (Note 2) $ (0.09) $ (0.06)
--------- ---------
Weighted Average Common Shares Outstanding 3,021,412 1,358,432
--------- ---------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE> 4
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS MARCH, 31, 1998 AND 1997
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
MARCH 31, MARCH 31,
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (286,607) $ (75,323)
Adjustments to reconcile net loss to cash provided by
operating activities:
Depreciation and amortization 11,950 11,020
Provision for losses on accounts receivable 0 0
Bridge loan financing charge 0 0
Changes in operating assets and liabilities:
Restricted Cash (35,440) 0
Accounts receivable 16,894 (24,855)
Rooms/Cabins held for sale 42,374 0
Prepaid offering expenses 113,508 0
Prepaid hotel cost (145,319) (199,374)
Prepaid cruise and tour cost (198,091) (143,622)
Other assets 2,018 0
Leasehold improvements 0 0
Accounts payable (99,117) (65,044)
Accrued expenses (146,404) 194,540
Receivable from affiliates and other (117,909) (10,092)
Deferred hotel revenue 221,214 194,237
Deferred cruise and tour revenue 191,668 134,411
Deferred subscription revenue 6,019 13,471
Deferred discount 0 0
---------- -------
Net Cash Provided (Used) by Operating Activities (423,242) 29,369
---------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisitions 0 0
Purchase of property and equipment (59,195) 0
Proceeds from sale of equipment 0 0
---------- -------
Net Cash Provided (Used) by Investing Activities (59,195) 0
---------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock 5,744,312 0
Proceeds from notes payable 0 40,000
Repayments of notes payable (1,573,374) (11,969)
---------- -------
Net Cash Provided by Financing Activities 4,170,938 28,031
---------- -------
Net Increase (Decrease) in Cash 3,688,501 57,400
Cash at Beginning of Period (Overdraft) (26,095) 43,240
Cash at End of Period (Overdraft) $ 3,662,406 $ 100,640
========== =======
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest $ 24,405 13,094
</TABLE>
4
<PAGE> 5
The accompanying notes are an integral part of these consolidated financial
statements.
Supplemental schedule of noncash investing and financing activities: For the
three months ended March 31, 1998, the Company had net non-cash transactions of
$42,374 which represents the net change between utilization of room credits used
during the quarter and new room credits acquired under advertising agreements.
The Company also had $863,388 of convertible notes payable that converted into
389,554 shares of the Company's common stock.
5
<PAGE> 6
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
(Unaudited)
1. GENERAL
The accompanying unaudited consolidated financial statements have been prepared
in conformity with the accounting principles stated in the audited financial
statements for the year ended December 31, 1997 and reflect all adjustments
which are, in the opinion of management, necessary for a fair statement of the
financial position as of March 31, 1998 and the results of operations for the
periods presented. These statements have not been audited or reviewed by the
Company's independent certified public accountants. The operating results for
the interim periods are not necessarily indicative of results for the full
fiscal year.
The notes to consolidated financial statements appearing in the Company's Annual
Report on form 10-KSB for the year ended December 31, 1997 filed the Securities
Exchange Commission should be read in conjunction with this Quarterly Report on
Form 10-QSB. There have been no significant changes in the information in those
notes other than from normal business activities of the Company.
2. COMMON STOCK
On December 17, 1997, the Board of Directors approved a reverse stock split
whereby, the Company would issue 1 share of common stock for every 7 shares of
common stock held by existing shareholders at the date of the transaction. All
share transactions, outstanding shares, and related share amounts have been
adjusted to take into effect the 1-for-7 reverse stock split.
On February 5, 1998, the Company issued stock pursuant to a public offering
(Offering) whereby, 1,200,000 common shares were issued for $5.00 per share.
Gross proceeds from the Offering totaled $6,000,000 with net proceeds (after
underwriting discount, commissions and expenses) to the Company of $5,230,000.
In conjunction with the Offering, $863,388 of debt was converted into 389,554
shares of common stock.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
The financial information set forth in the following discussion should be
read in conjunction with, and qualified in its entirety by, the financial
statements of the Company included elsewhere herein.
GENERAL
A watershed period for the Company, the first quarter represents a
complete change in the Company's financial condition brought about the
successful completion of a public offering in February See, "THE OFFERING,"
infra. that provided net proceeds to the company of $5.23 million. In addition
to the activity associated with closing of the offering, the Company's entire
operation was physically relocated in the last week of 1997. In spite of all of
these distractions new bookings for the period showed a marked 30% increase over
the same period of the prior year.
In this new environment, the Company focused on re-negotiating vendor
relationships, upgrading systems and increasing staff to accommodate increased
phone volume expected to be generated by the Company's planned circulation
increases for 1998. As part of the efforts to increase circulation the Company
began negotiations with a number of airlines in order to provide their
employees/retirees with subscriptions to the Company's flagship marketing piece,
the bi-monthly magazine, Interline Adventures. These negotiations are ongoing,
and working through than normal bureaucratic procedures is proceeding with good
results. A internal reorganization of sales and marketing operations was also
carried out during this quarter, and it is expected to focus and prepare
management for the coordinated efforts necessary to operate and manage a rapidly
growing direct marketing business.
THE OFFERING
On February 5, 1998, the Company completed an underwritten public offering
("Offering") for 1,200,000 shares of its Common Stock, $.0001 par value at $5.00
per share through an underwriting syndicate led by Capital West Securities, Inc.
The gross proceeds of the offering were $6,000,000. After underwriting discount
and commissions, the net proceeds to the Company were $5,230,000. In February
and March, 1998, the Company utilized a portion of these proceeds to: (a) pay
off all notes payable that did not convert to common stock in an amount of
approximately $821,000; (b) to pay offering expenses of $190,000; (c) to
purchase computer equipment of $82,000; and (d) to pay past due vendor payables
and operating and publishing expenses of $690,000. The remaining funds are being
used for implementing the Company's business plan which focuses primarily on
building the marketing and publishing areas of the Company. The Company is now
substantially debt free, with the exception of normal operating expenses and
accruals and holds a substantial cash reserve. See "LIQUIDITY AND CAPITAL
RESOURCES."
FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION
The Company had a positive working capital of $3.5 million as of March
31,1998, as compared to a negative working capital of $1.6 million at March 31,
1997. The cause for this increase in working capital between years was the cash
infusion from the Offering. Total current assets increased $3.6 million between
years to $5.0 million with the largest increase being in cash. The Company ended
the quarter with $1.4 million in current liabilities as compared to $3.0 million
for the prior year quarter. This decrease in current liabilities was a result of
the Company's previously mentioned debt and vendor payables payments as well as
a decrease in the deferred revenue for cruises and tours.
Accrued expenses are comprised mainly of payroll, vacation, commissions, and
publishing and general administrative expenses. Deferred revenues for hotels and
cruises represent the moneys received from passengers that are deferred for
revenue recognition purposes until the passenger has completed travel. These
deferred liabilities are very short-term in nature due to the short time frame
between booking date and travel date. Deferred subscription revenue represents
subscription moneys received but not earned at quarter end. Magazine
subscriptions are normally paid in full in advance for the one- or two- year
subscription period. Revenue is earned on a prorata basis as the magazines are
printed and shipped to the subscribers.
The Company had $1.6 million in notes payable and convertible debentures at
December 31, 1997. Subsequent to the Offering, holders of $863,000 of
convertible debt elected to convert their debt into approximately 389,554 shares
of Common Stock. All of the remaining debt was repaid subsequent to the
Offering.
The Company had $5.5 million in total assets at March 31, 1998 compared to
assets of $1.9 million at the end of March 31, 1997. The Company has $3.7
million in cash invested in short-term (primarily money market funds) investment
grade funds. The restricted cash balance of $217,000, represents escrow deposits
required by the Company's previous banks as a reserve for charge backs against
the Company's Visa/MasterCard credit card processing. The Company has recently
changed banking and credit card relationships
7
<PAGE> 8
whereby no separate escrow deposit will be required. However, the Company has
pledged $120,000 in certificates of deposit to secure credit card requirements
with the new bank, and the currently held escrow deposits will be returned to
the Company over the next few months. Additionally, the Company has negotiated a
33% decrease in the rate for credit card processing fees with the new bank.
Since approximately 70% of the Company's hotel and resort customer payments are
received by credit card this should provide the Company with a significant
monthly expense saving.
The accounts receivable is comprised primarily of advertising revenue due
from vendors that advertised in the Magazine and updates. Prepaid tour cost and
prepaid cruise cost represents funds paid to hotels and cruise lines as of March
31, 1998, for travel dates that occur after that date. These prepaid items
relate directly to the previously discussed deferred revenues and are also very
short-term in nature. Goodwill was reduced by $225,000 during 1997 due to a
reduced lump sum settlement of the notes due the prior owners of the acquired
assets. Room/Cabins held for sale arises out of advertising agreements where
hotels and cruise lines allot rooms and cabins in exchange for advertising in
the Company's publications. There was also a balance due from affiliates
(BEI/IMS).
RESULTS OF OPERATIONS
Overall Operating Results
The Company had a net loss for the quarter ended March 31, 1998 of $286,000,
as compared to a loss of $75,322 for the previous year quarter. The current
quarter loss is primarily a result of flat travel sales for the period which the
Company attributes to marketing efforts in the third and fourth quarters of 1997
which were still constrained by a lack of working capital. Additionally, since
the completion of the Offering, the Company began to incur significant increased
publishing and marketing expenses. Recognized revenue lags publishing and
distribution of publication of information by as much as 6 months. Additionally,
the company incurred a number of shareholder related expenses incurred with the
completion of the Offering which the Company had not previously undertaken in
1st quarter 1997.
The Company did experience a modest increase in sales over the same period
in 1997 and believes that the increase primarily attributed to more consistent
distribution of the Magazine and repeat customer sales. Most importantly though
the Company is pleased that advance bookings for the period showed an increase
of 30% as compared to bookings a year ago. These are mainly attributable to more
consistent if not increased marketing in the fall of 1997 as well as improved
performance in the phone reservations center. These reservations represent new
bookings as opposed to "booked, paid, traveled" in that they may or may not have
completed travel during the quarter. However, they should have an impact on
earned revenues in future periods. The Magazine's production schedule has been
increased to every two months. The Company also produces an update brochure
promoting hotel and cruise specials for bulk distribution through airport
offices. Management believes that increased circulation will increase the value
of the publications to both advertisers and subscribers which should lead to
increased advertising revenue in future periods. Prior to the Offering, the
funding of mailing of publications was not consistently achieved due to a
reliance on funding by means of short-term debt instruments.
Revenue
Gross revenue for the quarter ended March 31, 1998, was $2.8 million, an
increase of $221,000 or 9% over the 1997 first quarter. Hotel sales increased
10% while cruises/tours increased 2% over the comparable quarters. Since the
Offering, the Company has increased the quantity, distribution and frequency in
the production of its publications and has utilized a portion of the proceeds of
the Offering in this effort. Sales increased in spite of the fact that the
Company lacked sufficient operating capital to develop a strong marketing
representative base or produce the Company's publications on a consistent basis.
Management anticipates that sales should grow during 1998 with the aid of a
stronger distribution network and a consistent and increased publishing
schedule. The Company recognizes hotel and cruise revenues on a "booked, paid,
traveled" basis; (i.e. revenue is not earned until the passenger has completed
travel).
Subscription and advertising revenues reflect a 100% increase for the
current year quarter as compared to the prior year. This was the result of
Management's intent on upgrading the quality and size of the publications.
Management (with the use of Offering proceeds) shifted from a "paid" to a
"controlled" circulation. Management anticipates that this shift will increase
circulation and thereby make the Magazine more attractive to advertisers. There
can be no assurances in this regard.
Cost of Goods Sold
Cost of sales increased proportionately with the increase in sales. The average
margin for hotel sales was 21.4% for the quarter as compared to 22% for the
previous year quarter. Cruise and tour average gross margin increased for the
first quarter of 1998 to 12.5% of sales. The comparable 1997 margin for cruises
and tours was 11.9%. Margins for both hotels and cruises can fluctuate depending
on the mix of properties being sold and the varying margins associated with
these properties. Publishing cost increased due to a large increase in the
number of publications being distributed. The March/April 1998 issue of the
Magazine was increased to 121,200
8
<PAGE> 9
copies while Updates for the same issue were 300,000 copies. This compares to
75,000 magazines and 300,000 Updates issued for the January/February 1998
edition. The Company anticipates that the number of Magazines and Updates issued
in the future will continue to increase as the Company enters new interline
markets.
Operating Expenses
Operating expenses for the quarter ended March 31, 1998, were $674,000 as
compared to $478,000 for the prior year comparable quarter. The primary
increases in expenses relate to marketing and sales. During the current year
quarter, the Company incurred additional expenses in the form of advertising in
airline related publications as well beginning a weekly fax out of specials.
Because of the increase in new bookings previously mentioned, the Company also
experienced a significant increase in credit card fees, telephone and postage
and delivery charges. The revenue associated with these expenditures will be
recognized when travel has occurred which may or may not be in the same quarter
as the expense. Another major expense in the prior year quarter was management
fees. Airfair, the Company's wholly-owned subsidiary, entered into a management
agreement with BEI and IMS effective March 1, 1996. Under this agreement, BEI
permitted Airfair to use office space and certain equipment leased by BEI, and
BEI and IMS provided Airfair insurance, payroll services, office supplies and
other minor office services. IMS and BEI charged Airfair a management fee equal
to 0.5% of Airfair's gross revenue per month for these services. In addition,
pursuant to the terms of the Management Agreement, IMS, BEI, and Airfair agreed
that Airfair would reimburse BEI for a portion of the direct payroll expenses of
certain members of management who serve BEI, IMS, and Airfair (the "Shared
Management Members"). The proportion was intended to correspond with the amount
of time expended by the Shared Management Members on the business matters of
Airfair. The Company terminated that management services agreement January 1,
1998, and directly acquired all services being furnished under that agreement.
As such the shared management salaries are included in Wages for the current
quarter while they were included in general and administrative expenses in the
previous year quarter. With the exception of a new lease agreement, discussed
below, the Company does not anticipate a material increase in expenses above
what was incurred under the management services agreement.
On December 1, 1997, the Company finished negotiating a new lease agreement
for office space. The terms of the lease agreement call for 10,567 square feet
of net rentable area for a period of five years and three months with an option
to renew for five years. Monthly rent payments over the initial term of the
lease are $10,567 beginning March 1, 1998 to February 28, 1999; $11,448 from
March 1, 1999 to February 28, 2000; $12,328 from March 1, 2000 to February 28,
2001; $12,478 from March 1, 2001 to February 28, 2003. The option year rates
will be based on market conditions upon the renewal date. The Company was paying
its portion of rent under that certain management services agreement with
BEI/IMS previously mentioned.
The Company anticipates that operating expenses will increase substantially
for the remainder of 1998. These increases will be incurred primarily in the
areas of marketing and publishing. However, the Company expects that these
expense increases will be than offset by increased sales.
LIQUIDITY AND CAPITAL RESOURCES
The Company has an accumulated deficit of $2.7 million ($544,000 of this
deficit is attributable to periods prior to the Company's commencement of
operations within the interline travel industry and $357,000 is attributable to
a one-time non-cash charge incurred December 1997 in connection with the
Offering). The Company's auditors for fiscal year 1996 included in their audit
opinions a qualification regarding the Company's ability to continue as a going
concern. As a result of the successful completion of the Offering, the Company's
auditors have not included a similar qualification in their audit opinion for
fiscal year 1997.
The Company borrowed approximately $1.4 million from various parties during the
1997 calendar year in order to fund operations. All notes have subsequently been
repaid or converted to stock. Since the Offering, the Company is virtually debt
free except for normal recurring vendor payables, leases as described herein and
client receipts for reservations in advance of travel. The Company continues to
hold a substantial cash reserve in order to implement future plans of the
Company.
NEW ACCOUNTING PRONOUNCEMENTS
The Company has adopted FASB Statement 128, a recently issued accounting
standard. It is not expected that the Company will be impacted by other recently
issued standards. FASB Statement 128 presents new standards for computing and
presenting earnings per share (EPS). The Statement is effective for financial
statements for both interim and annual periods ending after December 15, 1997.
FASB Statement 131 presents news standards for disclosures about segment
reporting. The Company does not believe that this accounting standard applies to
the Company as all operations of the Company are integrated for financial
reporting and decision making purposes.
9
<PAGE> 10
The SEC Divisions of Corporation Finance and Investment Management issued
Staff Legal Bulletin No. 5 to remind companies of their disclosure obligations
with the year 2000 computer problems. The Company's accounting system and
reservation system programs have been either modified or upgraded to accommodate
the year 2000 and beyond. The Company has not been informed of any year 2000
issues as it relates to outside vendors upon whom the Company relies.
INFLATION
The Company's results of operations have not been affected by inflation and
management does not expect inflation to have a significant effect on its
operations in the future because of the short time frame between reservation
bookings and the dates of travel.
FORWARD-LOOKING INFORMATION
From time to time, the Company or its representatives have made or may make
forward-looking statements, orally or in writing. Such forward-looking
statements may be included in, but not limited to, press releases, oral
statements made with the approval of an authorized executive officer or in
various filings made by the Company with the Securities and Exchange Commission.
Words or phases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project or projected", or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"). The Company
wishes to ensure that such statements are accompanied by meaningful cautionary
statements, so as to maximize to the fullest extent possible the protections of
the safe harbor established in the Reform Act. Accordingly, such statements are
qualified in their entirety by reference to and are accompanied by the following
discussion of certain important factors that could cause actual results to
differ materially from such forward-looking statements.
Management is currently unaware of any trends or conditions other than those
previously mentioned in this management's discussion and analysis that could
have a material adverse effect on the Company's consolidated financial position,
future results of operations, or liquidity. However, investors should also be
aware of factors that could have a negative impact on the Company's prospects
and the consistency of progress in the areas of revenue generation, liquidity,
and generation of capital resources. These include: (i) variations in the mix of
hotel, cruise, and magazine revenues, (ii) possible inability to attract
investors for its equity securities or otherwise raise adequate funds from any
source should the Company seek to do so, (iii) increased governmental
regulation, (iv) increased competition, (v) unfavorable outcomes to litigation
involving the Company or to which the Company may become a party in the future
and, (vi) a very competitive and rapidly changing operating environment.
Furthermore, reference is also made to other sections of this report that
include factors that could adversely impact the Company's business and financial
performance.
The risks identified here are not all inclusive. New risk factors emerge from
time to time and it is not possible for Management to predict all of such risk
factors, nor can it assess the impact of all such risk factors on the Company's
business or the extent to which any factor or combination of factors may cause
actual results to differ materially from those contained in any forward-looking
statements. Accordingly, forward-looking statements should not be relied upon as
a prediction of actual results.
10
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PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
b. Reports on Form 8-K
None
11
<PAGE> 12
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
(Registrant) Grand Adventures Tour & Travel
Publishing Corporation
-------------------------
By /s/ Joseph S. Juba
--------------------------
Joseph S. Juba, President/Chief
Operating Officer
Date May 15, 1998
--------------------------
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Darrell W. Barker
-------------------------------------
Darrell W. Barker, Chief Financial
Officer
Date May 15, 1998
--------------------------
By /s/ Matthew O'Hayer
-------------------------------------
Matthew O'Hayer, Chairman of the Board
and Chief Executive Officer
Date May 15, 1998
--------------------------
By /s/ Robert Sandner
-------------------------------------
Robert Sandner, Director
Date May 15, 1998
--------------------------
By /s/ Robert Rader
-------------------------------------
Robert Rader, Director
Date May 15, 1998
--------------------------
12
<PAGE> 13
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 3,879,221
<SECURITIES> 0
<RECEIVABLES> 98,436
<ALLOWANCES> (12,020)
<INVENTORY> 0
<CURRENT-ASSETS> 4,956,430
<PP&E> 167,501
<DEPRECIATION> (56,487)
<TOTAL-ASSETS> 5,473,606
<CURRENT-LIABILITIES> 1,447,613
<BONDS> 0
0
0
<COMMON> 302
<OTHER-SE> (2,677,909)
<TOTAL-LIABILITY-AND-EQUITY> 5,473,606
<SALES> 2,776,157
<TOTAL-REVENUES> 2,780,461
<CGS> 2,343,358
<TOTAL-COSTS> 2,343,358
<OTHER-EXPENSES> 723,710
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,737
<INCOME-PRETAX> (286,607)
<INCOME-TAX> 0
<INCOME-CONTINUING> (286,607)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (286,607)
<EPS-PRIMARY> (0.09)
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</TABLE>
