<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 JUNE 30, 1999
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 July 20, 1999, the
Company had outstanding 3,024,883 shares of its common stock, par value
$0.0001.
<PAGE> 2
ITEM 1. FINANCIAL STATEMENTS
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Unaudited Audited
June 30, December 31,
1999 1998
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 55,755 $ 236,452
Available for sale securities 1,900,237 1,868,469
Cash - restricted 175,500 175,500
Accounts receivable, net of allowance for
doubtful accounts of $43,163 in 1999 and 1998 301,345 191,226
Due from affiliate, net of allowance for
doubtful accounts of $128,046 in 1999 and 1998 120,510 80,065
Accrued investment income 25,811 17,850
Prepaid other 167,526 96,613
Rooms/Cabins held for sale 775,541 253,901
Prepaid hotel cost 490,999 135,252
Prepaid cruise and tour cost 72,450 78,944
---------- ----------
Total Current Assets 4,085,673 3,134,272
---------- ----------
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation 491,837 410,504
---------- ----------
OTHER ASSETS
Other assets 11,680 11,680
Intangible assets, net of accumulated amortization 637,835 680,543
---------- ----------
$5,227,025 $4,236,999
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 39,632 $ 277,802
Other current liabilities 347,881 196,908
Short-term debt 1,061,500 616,500
Deferred hotel revenue 816,353 471,034
Deferred cruise and tour revenue 244,147 92,209
Deferred subscription revenue 47,081 48,706
---------- ----------
Total Current Liabilities 2,556,595 1,703,159
OTHER LIABILITIES ---------- ----------
Long-term debt -- --
---------- ----------
Total Other Liabilities -- --
---------- ----------
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 3,024,883 in 1999 and 1998,
respectively 302 302
Additional paid-in capital 6,610,474 6,610,474
Accumulated deficit (3,940,346) (4,076,936)
---------- ----------
Total Stockholders' Equity 2,670,430 2,533,840
---------- ----------
$5,227,025 $4,236,999
========== ==========
</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
June 30, June 30,
1999 1998
---------- ----------
<S> <C> <C>
REVENUES
Travel revenue $6,504,553 $3,890,841
Publishing revenue 730,057 255,634
Investment income 50,313 42,866
---------- ----------
Total Revenues 7,284,923 4,189,341
COST OF SALES ---------- ----------
Travel cost 5,358,313 3,236,299
Publishing cost 462,060 274,309
---------- ----------
Total Cost of Sales 5,820,373 3,510,608
---------- ----------
Gross Profit 1,464,550 678,733
OPERATING EXPENSES ---------- ----------
Selling, general and administrative expenses 610,674 291,397
Wages 697,962 516,985
Depreciation and amortization 44,560 16,860
---------- ----------
Total Operating Expenses 1,353,196 825,242
---------- ----------
Net Income (Loss) Before Income Taxes 111,355 (146,509)
Income Tax Expense -- --
Net Income (Loss) $ 111,355 $ (146,509)
========== ==========
Net Income (Loss) Per Common Share $ 0.04 $ (0.05)
---------- ----------
Weighted Average Common Shares Outstanding 3,024,883 3,021,412
---------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 4
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Unaudited
Six Months Ended
June 30, June 30,
1999 1998
----------- ----------
<S> <C> <C>
REVENUES
Travel revenue $12,096,748 $6,530,146
Publishing revenue 1,095,630 376,731
Investment income 82,616 62,925
----------- ----------
Total Revenues 13,274,994 6,969,802
COST OF SALES ----------- ----------
Travel cost 9,961,236 5,439,077
Publishing cost 714,151 464,889
----------- ----------
Total Cost of Sales 10,675,387 5,903,966
----------- ----------
Gross Profit 2,599,607 1,065,836
----------- ----------
OPERATING EXPENSES
Selling, general and administrative expenses 947,278 528,600
Wages 1,428,319 941,542
Depreciation and amortization 87,420 28,810
----------- ----------
Total Operating Expenses 2,463,017 1,498,952
----------- ----------
Net Income (Loss) Before Income Taxes 136,590 (433,116)
Income Tax Expense -- --
Net Income (Loss) $ 136,590 $ (433,116)
=========== ==========
Net Income (Loss) Per Common Share $ 0.05 $ (0.14)
----------- ----------
Weighted Average Common Shares Outstanding 3,024,883 3,021,412
----------- ----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
Unaudited
June 30, June 30,
1999 1998
--------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 136,590 $ (433,116)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization 87,420 28,810
Changes in operating assets and liabilities:
Restricted Cash -- (2,639)
Accounts receivable (110,119) 23,052
Rooms/Cabins held for sale (521,640) (16,190)
Prepaid offering expenses -- 113,508
Prepaid other (70,913) (260,270)
Accrued investment income (7,961) --
Prepaid hotel cost (355,747) (177,881)
Prepaid cruise and tour cost 6,494 (334,409)
Other assets -- (1,176)
Accounts payable (238,170) (275,053)
Accrued expenses 150,973 (247,956)
Receivable from affiliates and other (40,445) (142,635)
Deferred hotel revenue 345,319 148,195
Deferred cruise and tour revenue 151,938 282,574
Deferred subscription revenue (1,625) (14,376)
--------- -----------
Net Cash Provided (Used) by Operating Activities (467,886) (1,309,562)
CASH FLOWS FROM INVESTING ACTIVITIES: --------- -----------
Purchase of marketable short-term investments (31,768) --
Business acquisitions 565 --
Purchase of property and equipment (126,608) (253,151)
--------- -----------
Net Cash Provided (Used) by Investing Activities (157,811) (253,151)
CASH FLOWS FROM FINANCING ACTIVITIES: --------- -----------
Proceeds from sale of common stock -- 5,668,746
Proceeds from notes payable 550,000 --
Repayments of notes payable (105,000) (1,573,374)
--------- -----------
Net Cash Provided by Financing Activities 445,000 4,095,372
--------- -----------
Net Increase (Decrease) in Cash (180,697) 2,532,659
Cash at Beginning of Period (Overdraft) 236,452 (26,095)
--------- -----------
Cash at End of Period $ 55,755 $ 2,506,564
SUPPLEMENTAL CASH FLOW INFORMATION ========= ===========
Cash paid during the period for interest $ 21,697 $ 24,405
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
Supplemental schedule of non-cash investing and financing activities:
For the six months ended June 30, 1998, the Company had a non-cash transaction
whereby $863,388 of convertible notes payable were converted into 389,554 shares
of the Company's common at the date of offering.
The Company had net non-cash transactions for the six months ended June 30,
1999 in the amount of $521,640 which represents the net change between
utilization of room credits used during the quarter and new room credits
acquired under advertising agreements. For the six months ended June 30, 1998,
the net change in the room credits was $(16,190).
5
<PAGE> 6
GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(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, 1998 and reflect all adjustments
which are, in the opinion of management, necessary for a fair statement of the
financial position as of June 30, 1999 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, 1998 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 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
Gross revenue for the quarter ended June 30, 1999 increased 74% over the
comparable quarter for 1998. The Company realized gross revenue of
approximately $7.3 million and net income of $111 thousand as compared to gross
revenue of $4.2 million and a loss of $(147) thousand for the prior year
quarter. Gross earned revenues for all product lines registered significant
increases over the comparable second quarter of 1998. Hotel and resort travel
sales increased 114%, cruise and tour travel sales increased 33% and
advertising sales increased 186%. More significantly, the Company experienced a
major turnaround in the area of publishing where for the first time in the
Company's history advertising revenues far exceeded the cost of printing and
distribution.
For the six months ended June 30, 1999, gross revenue was $13.3 million which
represents a 90% increase over the first six months of 1998 revenue of $7.0
million. Net income for the current six months was $137 thousand or $.05 per
share as compared to a loss of $(433) thousand or $(0.14) per share for the
prior year comparable time frame.
The Company has experienced significant increases in phone volume, web site
transactions and advertising contracts during the first six months of 1999 and
as a result added 23 new personnel primarily in the reservation center in order
to accommodate this increase in business. The Company had 95 full-time
employees at June 30, 1999.
With this increased volume in business, the Company made two significant
technology related commitments during the quarter which will enhance the
ability of the Company to handle anticipated future growth. One of these
commitments was the leasing of a new call center telephone system which will
allow for a smoother flow of reservation center calls as well as give
management much improved reporting. Management anticipates that this data will
(a) reduce future personnel related expenses by enabling the Company to better
adapt to staffing levels needed during peak and non-peak telephone volumes and
(b) improve marketing by channeling calls to agents more experienced in the
destination being requested by the client. The other significant technology
commitment was the purchase of new reservation system software which will
facilitate booking reservations and will permit customers to book directly from
the Company's web site. It is anticipated that both of these systems will be
fully operational before the end of the year although the full effects of
having these systems in place will not be felt until fiscal year 2000.
Bookings for travel in fiscal year 1999 with money (either paid in full or a
deposit received) were approximately $16.2 million as of June 30, 1999 and new
advertising contracts for the Company's publications were approximately $2
million. The Company does not recognize travel revenue as earned until travel
has occurred. The Company endeavors to require some form of payment at the time
of booking. Most of the advertising contracts cited are twelve-month
commitments and therefore are recognized into income over the contract period.
Expenses associated with generating these bookings and advertising contracts
were expensed as incurred and may or may not be in the same period as the
related travel and advertising revenue is recognized.
The Company believes this increase in gross revenue was a direct result of
increased marketing which include (a) increasing the number of field
representatives distributing the Company's marketing materials to professional
airline personnel around the world, (b) increasing the number of publications
distributed, (c) improving the Company's product base by increasing the number
of properties and destinations available and (d) enhancement of the Company's
web site which has experienced a substantial increase in the number of requests
for travel information. The Company believes that the benefits of these efforts
will not be limited to the periods in which these efforts were made but will
provide a foundation for continued future growth.
FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION
Total current assets increased $575 thousand during the quarter to $4.1 million
and current liabilities increased $492 thousand to $2.6 million. The primary
cause for both of these increases relate to the significant increase in
bookings that occurred during the first six months of 1999 in that prepayments
to vendors and deferred revenues received from clients are not recognized as
earned until travel has occurred. These prepaid assets and deferred liabilities
are relatively short-term in nature due to the short time frame between booking
date and travel date. In addition, the total value of room inventory increased
by approximately $500 thousand for the quarter. This relates to the large
increase in vendor advertising contracts negotiated during the quarter. A
substantial number of hotel vendors exchange room credits in exchange for
advertising space in the Company's publications.
Total cash and investment securities net of related short term borrowings
decreased approximately $400 thousand during the current quarter. This decrease
in net cash balances was the result of the increased number of publications
issued during the quarter and also the purchase of computer equipment necessary
to handle the increase in business. The restricted cash balance of $175
thousand represents a portion of the Company's certificates of deposit pledged
as a reserve for charge backs against the Company's
7
<PAGE> 8
Visa/MasterCard credit card processing and also pledged against various letters
of credit to hotel/cruise vendors. The letters of credit serve as security for
the vendors to allow the Company to make last minute bookings with these
vendors without having to pay in advance of travel. None of these letters of
credit have been drawn on to date.
Accounts receivable balances are comprised primarily of advertising revenue due
from vendors that advertised in the Magazine and Updates as well as commissions
that are due from cruise lines for clients that have already traveled. There
was also a balance due from affiliates, which is secured by a short term
promissory note bearing interest and collateralized by shares in a publicly
traded company. The agreement calls for the shares to be sold on the open
market over time with the proceeds being used to pay off the balance due the
Company.
RESULTS OF OPERATIONS
Overall Operating Results
The Company had net income for the quarter ended June 30, 1999 of $111
thousand, as compared to a loss of $(147) thousand for the comparable prior
year quarter. The current net income is primarily a result of increased
traveled revenue and advertising sales associated with the expansion of the
Company's marketing distribution efforts. The Company believes that the
benefits of its expansion were not fully realized in 1998 when the Company
expended significant funds in all of these areas, and the benefits will be
realized in subsequent periods as well. For example, travel and advertising
revenues for the first six months of 1999, and bookings which lead to travel
revenues, are substantially in excess of comparable periods of 1998.
Revenue
Gross revenue for the quarter ended June 30, 1999 increased 74% over the
comparable 1998 quarter levels. Hotel and resort sales increased 114% while
cruises/tours sales increased 33% over the 1998 quarter. Advertising and
subscription revenues increased 186% over this same time frame. A substantial
number of these advertising contracts call for the Company to receive a number
of room night credits in lieu of cash payment. Management anticipates that both
travel and advertising sales should continue to grow with the aid of a stronger
distribution network for its publications and a consistent and increased
publishing schedule. Management believes that the revenues from the publishing
and travel portions of its business are integrally tied to one another -
improved hotel sales, for example, facilitate sales of advertising to hotels
and increased hotel advertising improves the likelihood of sales of rooms
within the advertising hotels.
The first six months of 1999 produced gross revenue of $13.2 million which
represents a 90% increase over the first six months of 1998. All product lines
experienced increases over 1998 levels. Hotels and resort revenue increased
125%, cruise and tour revenue increased 55% and advertising revenue increased
191%. In addition, the Company has begun the sale of a number of ancillary
services such as airline tickets, rental cars and rail passes.
The Company recognizes hotel and cruise revenues on a "booked, paid, traveled"
basis (i.e. revenue is not earned until the passenger has traveled). The
Company sells advertising over a given number of issues and advertising
revenues are recognized as the applicable publications are printed and
distributed. In the case of yearly advertising contracts, revenue is recognized
prorata over the term of the contract.
Cost of Goods Sold
The gross margin for travel sales for the quarter ended June 30, 1999 was 17.6%
which represents an increase over the 1998 second quarter margin of 16.8%.
Margins for both hotels and cruises can fluctuate depending on a number of
factors relative to the properties being sold (competition, location,
availability of supply and others). Publishing cost which includes the
pre-production, printing, paper and delivery of the Company's Magazine and
Updates increased due to the increase in the number of publications being
distributed. Publishing margin for the current quarter was a positive 37% as
compared to a negative 7% for the prior year quarter. The primary reason for
this major turnaround in margin was the substantial increase in advertising
revenue which more than offset the incremental cost associated with publishing.
The Company anticipates that the number of Magazines and Updates issued in the
future will continue to increase as the Company increases its airline employee
database through its marketing efforts as well as possible future acquisitions
of interline related companies. The Company also anticipates that this increase
in the number of publications will enhance the Company's ability to attract
additional vendor advertising contracts.
Operating Expenses
Operating expenses for the current quarter increased 64% over the prior year
quarter. The primary increases in expenses relate to increased staffing at both
the support and reservation personnel levels and also incremental transactional
(credit card fees, telephone etc.) expenses associated with adding new bookings
and advertising contracts. Over the past fifteen months the Company added
reservation, marketing, accounting, and management information services
personnel in order to service both the increase in telephone and Web site
inquiries. The Company has an interactive, searchable web site
(http://perx.com) containing information and rates for
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most of the properties it sells. There were also increases in depreciation and
goodwill amortization due to the aforementioned furniture and equipment
purchases and acquisitions.
Because of the increase in new bookings, the Company also experienced a
significant increase in credit card fees, telephone, 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.
With the anticipated increase in sales, the Company believes that the following
types of operating expenses will vary with travel sales and generally increase
as travel sales increase: reservation personnel costs, credit card fees,
telephone, and postage and delivery expenses. The actual levels of these
expenses will be a function of numerous factors including but not limited to
the experience, closing capabilities and product knowledge of the reservation
staff.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to hold cash reserves in order to continue the successful
operation of the Company. There can be no assurance that to sustain the
continued growth of the Company will not require additional debt or equity
offerings at some point in the future.
NEW ACCOUNTING PRONOUNCEMENTS
The Company has adopted FASB Statement 128. 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.
YEAR 2000 PREPAREDNESS
The Company recognizes that computer systems and all forms of electronic
technology, information technologies and non-information technologies, could be
adversely affected by the year 2000 date. This is because many systems and
technology components use a two-digit field to represent the year in dates
(e.g., "98" rather than "1998"). With the advent of year 2000, systems and
programs may fail or produce incorrect data believing it is the year 1900,
causing not just information technology problems but also business and
operations problems.
The Company continues to evaluate its information technology infrastructure for
Year 2000 compliance. The Company's accounting and reservation systems have
been upgraded to accommodate the Year 2000 and beyond. As previously mentioned,
the Company has also invested in new telephone and reservation software systems
both of which are Year 2000 compliant. The Company currently does not expect
that the cost of its Year 2000 compliance program will be material to its
financial condition or results of operations or that its business will be
adversely affected by the Year 2000 issue in any material respect.
Nevertheless, achieving Year 2000 compliance is dependent on many factors, some
of which are not completely within the Company's control. Should either the
Company's internal systems or the internal systems of one or more significant
vendors or suppliers fail to achieve Year 2000 compliance, the Company's
business and its results of operations could be adversely affected.
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.
FOREIGN CURRENCY RISK
The Company has entered into contracts with certain hotels/resorts located
primarily in Europe which stipulate conversion of U.S. dollars into different
European currencies at time of travel. The Company is currently evaluating its
foreign currency risk in regard to these contracts. To date, the amount of
Company sales of these properties has been immaterial to the Company's
financial operations and the Company has not experienced any erosion of margins
on sales of these properties due to currency conversion rates. There can be no
assurance given that foreign currency risk will not have a material adverse
affect on future foreign travel sales.
9
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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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a. The annual Shareholders' meeting was held at the Company's corporate offices
in Austin, Texas on June 22, 1999. The number of qualified shareholder votes
attending the meeting either in person or by proxy totaled 2,754,295 shares.
The total outstanding number of common shares of the Company as of May 14,
1999, the date of record for the Shareholder meeting totaled 3,024,884 shares.
Therefore, a quorum was present.
b. The Shareholders elected the following individuals to the Board of Directors
to serve until the next annual meeting:
Matthew O'Hayer, Chairman of the Board
Robert Sandner, Director
Robert G. Rader, Director
Duane K. Boyd, Director
Mr. O'Hayer received 2,750,072 votes for, 0 votes abstaining, and 4,223 votes
against
Mr. Sandner received 2,750,072 votes for, 0 votes abstaining, and 4,223
votes against
Mr. Rader received 2,750,072 votes for, 0 votes abstaining, and
4,223 votes against
Mr. Boyd received 2,750,072 votes for, 0 votes abstaining,
and 4,223 votes against
There being no further business, the Shareholder meeting was adjourned.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
b. Reports on Form 8-K
None
11
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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 July 26, 1999
-------------
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 July 26, 1999
-------------
By /s/ Matthew O'Hayer
-------------------
Matthew O'Hayer, Chairman of the Board and Chief
Executive Officer
Date July 26, 1999
-------------
By /s/ Robert Sandner
------------------
Robert Sandner, Director
Date July 26, 1999
-------------
By /s/ Robert Rader
----------------
Robert Rader, Director
Date July 26, 1999
-------------
By /s/ Duane K. Boyd
-----------------
Duane K. Boyd, Director
Date July 26, 1999
-------------
12
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 55,755
<SECURITIES> 1,900,237
<RECEIVABLES> 593,064
<ALLOWANCES> (171,209)
<INVENTORY> 775,541
<CURRENT-ASSETS> 4,085,673
<PP&E> 646,342
<DEPRECIATION> (154,505)
<TOTAL-ASSETS> 5,227,025
<CURRENT-LIABILITIES> 2,556,595
<BONDS> 0
0
0
<COMMON> 302
<OTHER-SE> (3,940,346)
<TOTAL-LIABILITY-AND-EQUITY> 5,227,025
<SALES> 13,178,108
<TOTAL-REVENUES> 13,274,994
<CGS> 10,675,387
<TOTAL-COSTS> 10,675,387
<OTHER-EXPENSES> 2,463,017
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 136,590
<INCOME-TAX> 0
<INCOME-CONTINUING> 136,590
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 136,590
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
