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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, 2000
COMMISSION FILE NUMBER 33-4734-D
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GRAND ADVENTURES TOUR & TRAVEL PUBLISHING CORPORATION
(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, 10TH FLOOR, AUSTIN, TEXAS 78701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (512) 391-2000
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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 31, 2000, 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,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 472,558 $ 273,189
Available for sale securities 349,657 1,123,037
Cash restricted 221,500 221,500
Accounts receivable, net of allowance for doubtful
accounts of $29,108 and $29,108 in 2000 and 1999 2,071,392 563,756
Due from affiliate, net of allowance for reserve
for impairment of $163,046 and $163,130 in 2000 and 1999 85,177 128,405
Accrued investment income 18,463 5,206
Other prepaid expenses 228,822 43,833
Rooms/cabins held for sale, net of allowance for unsaleable
inventory of $41,181 in 2000 and $0 in 1999 3,185,415 2,425,525
Prepaid hotel cost 274,465 47,576
Prepaid cruise and tour cost 208,725 92,835
----------- -----------
Total Current Assets 7,116,174 4,924,862
Property and equipment, at cost, net of
accumulated depreciation 1,240,846 1,240,418
Other Assets
Other assets 11,680 11,680
Intangible assets, net of accumulated amortization 594,460 615,687
----------- -----------
$ 8,963,160 $ 6,792,647
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,679,918 $ 532,595
Other current liabilities 125,178 125,224
Current portion of long-term debt 953,000 783,675
Deferred hotel revenue 732,073 445,808
Deferred cruise and tour revenue 216,343 102,774
Deferred WeddingTrips revenue 20,345 --
Deferred subscription revenue 13,112 13,112
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Total Current Liabilities 3,739,969 2,003,188
Other Liabilities
Long-term debt 2,057,559 1,852,634
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Total Liabilities 5,797,528 3,855,822
Stockholders' Equity
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 shares in 2000 and 1999, respectively 302 302
Additional paid-in capital 6,610,474 6,610,474
Accumulated deficit (3,445,144) (3,673,951)
----------- -----------
Total Stockholders' Equity 3,165,632 2,936,825
----------- -----------
$ 8,963,160 $ 6,792,647
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
2
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GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
-----------------------
JUNE 30, JUNE 30,
2000 1999
---------- ----------
<S> <C> <C>
Revenues
Travel revenue $8,631,455 $6,504,553
Publishing revenue 1,174,249 730,057
Interest income 14,161 50,313
Other revenue 39,688 --
---------- ----------
Total Revenue 9,859,553 7,284,923
Cost of Sales
Travel cost 6,880,258 5,358,313
Publishing cost 713,091 462,060
---------- ----------
Total Cost of Sales 7,593,349 5,820,373
Gross Profit 2,266,204 1,464,550
Operating Expenses
Selling, general and administrative expense 1,070,121 610,673
Salaries 1,041,951 697,962
Depreciation and amortization 94,414 44,560
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Total Operating Expenses 2,206,486 1,353,195
Net Income Before Income Tax 59,718 111,355
Income Tax Expense -- --
---------- ----------
Net Income $ 59,718 $ 111,355
========== ==========
Average Common Equivalent Shares
Basic 3,024,883 3,024,883
Diluted 3,624,883 3,024,883
Net Income per Common Share
Basic $ 0.02 $ 0.04
Diluted $ 0.02 $ 0.04
</TABLE>
The accompanying notes are an integral part of these financial statements
3
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GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
UNAUDITED
SIX MONTHS ENDED
-------------------------
JUNE 30, JUNE 30,
2000 1999
----------- -----------
<S> <C> <C>
Revenues
Travel revenue $16,686,293 $12,096,748
Publishing revenue 2,333,070 1,095,630
Interest income 30,840 82,616
Other revenue 71,692 --
----------- -----------
Total Revenue 19,121,895 13,274,994
----------- -----------
Cost of Sales
Travel cost 13,328,572 9,961,236
Publishing cost 1,461,302 714,151
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Total Cost of Sales 14,789,874 10,675,387
----------- -----------
Gross Profit 4,332,021 2,599,607
Operating Expenses
Selling, general and administrative expense 2,079,381 947,278
Salaries 1,849,052 1,428,319
Depreciation and amortization 174,781 87,420
----------- -----------
Total Operating Expenses 4,103,214 2,463,017
----------- -----------
Net Income Before Income Tax 228,807 136,590
Income Tax Expense -- --
----------- -----------
Net Income $ 228,807 $ 136,590
=========== ===========
Average Common Equivalent Shares
Basic 3,024,883 3,024,883
Diluted 3,624,883 3,024,883
Net Income per Common Share
Basic $ 0.08 $ 0.05
Diluted $ 0.06 $ 0.05
</TABLE>
The accompanying notes are an integral part of these financial statements
4
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GRAND ADVENTURES TOUR & TRAVEL PUBLISHING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
UNAUDITED
SIX MONTHS ENDED
--------------------------
JUNE 30, JUNE 30,
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from Operating Activities:
Net Income (loss) $ 228,807 $ 136,590
Adjustments to reconcile net income/(loss)
to cash provided by operating activities:
Depreciation and amortization 174,781 87,420
Changes in operating assets and liabilities:
Accounts receivable (1,507,636) (110,119)
Rooms/cabins held for sale (759,890) (521,640)
Other prepaid expenses (184,989) (70,913)
Accrued investment income (13,257) (7,961)
Prepaid hotel cost (226,889) (355,747)
Prepaid cruise and tour cost (115,890) 6,494
Other assets (33,466) --
Accounts payable 1,147,323 (238,170)
Accrued expenses (46) 150,973
Receivable from affiliates and other 43,228 (40,445)
Deferred hotel revenue 286,265 345,319
Deferred cruise and tour revenue 113,569 151,938
Deferred WeddingTrips revenue 20,345 --
Deferred subscription revenue -- (1,625)
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Net Cash Used by Operating Activities (827,745) (467,886)
----------- -----------
Cash Flows From Investing Activities:
Sale (Purchase) of marketable short-term
investments 773,380 (31,768)
Business acquisitions -- 565
Disposition of property and equipment 92,679
Purchase of property and equipment (123,195) (126,608)
----------- -----------
Net Cash Used by Investing Activities 742,864 (157,811)
----------- -----------
Cash Flows From Financing Activities:
Proceeds from leases payable 171,030 --
Net proceeds (payments) from notes payable 113,220 445,000
----------- -----------
Net Cash Provided by Financing Activities 284,250 445,000
----------- -----------
Net Increase (Decrease) in Cash 199,369 (180,697)
Cash at Beginning of Period 273,189 236,452
----------- -----------
Cash at End of Period $ 472,558 $ 55,755
=========== ===========
Supplemental Cash Flow Information
Cash paid during the period for interest $ 120,721 $ 21,697
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
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Supplemental schedule of non-cash investing and financing activities:
For the six months ended June 30, , 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,
2000 in the amount of $986,995 which represents the net change between
utilization of room credits used during the quarter and new room credits
acquired under advertising agreements.
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GRAND ADVENTURES TOUR & TRAVEL PUBLISHING
CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
1. GENERAL
The accompanying unaudited financial statements have been prepared in conformity
with the accounting principles stated in the audited financial statements for
the year ended December 31, 1999 and reflect all adjustments which are, in the
opinion of management, necessary for a fair statement of the financial position
as of June 30, 2000 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, 1999 filed with the
Securities & Exchange Commission should be read in conjunction with this
Quarterly Report on Form 10-QSB. Except as provided in Note 2, there have been
no significant changes in the information in those notes other than from normal
business activities of the Company.
2. OPERATING EXPENSES
As more fully explained in the Management's Discussion and Analysis section of
the Company's 10Q, operating expenses for the second quarter include certain
non-recurring expenses related to the software rollout and recall.
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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
In the quarter ended June 30, 2000, the Company continued to realize the results
of actions that it took in previous periods, including increased marketing
activities, the acquisition of other Interline travel companies, the formation
of the WeddingTrips division and the launch of Destination Weddings & Honeymoons
magazine.
Specifically, gross revenue for the quarter ended June 30, 2000 increased
$2,572,000 over the comparable quarter for 1999. The Company realized gross
revenue of approximately $9.9 million and net income of $60 thousand as compared
to gross revenue of $7.3 million and net income of $111 thousand for the prior
year second quarter. Gross earned revenues for all product lines registered
significant increases over the comparable second quarter of 1999. Travel sales
increased 33% and advertising sales increased 60% when compared to the second
quarter, 1999.
A summary of the significant second quarter developments includes the following:
o On April 1, 2000, the Company converted to a new software system to support
the reservation call center. Shortly after the software conversion, the
Company began to have difficulties with the system, including increased
call and wait times in the reservation center, inability to confirm or pay
reservations on a timely basis and inefficiency in the collection of fees
from clients. Throughout April and May, the Company worked diligently with
the software vendor to correct the problems with the software. On May 31,
2000, the Company deinstalled the software and reverted to its legacy
reservation system.
Throughout June, the Company continued to work with the software vendor in
an attempt to correct the operational deficiencies of the software. On June
30, 2000, the Company filed suit in Travis County, Texas against the
vendors and five individuals who were officers and directors of the
vendors, alleging, among other charges, that the software was
misrepresented as a state of the art reservation management system.
The effects of the TourTek rollout and recall are reflected in the
accompanying financial statements as:
(a) Increased telephone bills due to increased processing and hold times.
(b) Increased salaries and wages due to the payment of overtime related to
system conversion and abandonment.
(c) Decreased travel margins due to problems with reservation
confirmations.
(d) Lost travel sales and increased refunds to clients due to the system's
inability to confirm reservations on a timely basis.
(e) Increased balances in accounts receivable from passengers and accounts
payable to hotels for travel that occurred prior to June 30, 2000. Due
to software issues, the Company needed to rebuild certain travel
records after the reversion to the legacy system. This process delayed
the time of collection from passengers and payments to hotels and
resorts.
(f) Increased refunds and passenger cancellations.
Management believes that the company lost well over $2 million in travel
sales and that it incurred in excess of $350,000 of other costs related to
the software rollout. Finally, management believes that the effects of
software issues are substantially confined to the second quarter.
o On May 19, 2000, the Company executed a Letter of Intent to acquire the
assets and business of Lawson International Travel Services (Lawson) of
London, England. Lawson is the largest interline travel company in Europe
and has a business model substantially the same as the Company's. In 1999,
Lawson had approximately $12 million in hotel and resort sales. The
transaction closed on August 11, 2000 pending final regulatory approval,
which is expected by the end of August, 2000. The principal terms of the
purchase are:
(a) Payment in cash at closing of approximately $600,000 to Lawson.
(b) Issuance of 32,000 shares of the Company's common stock to Lawson.
(c) Execution of an ongoing consulting agreement with Lawson for 60 months
at a minimum of $14,600 per month and a maximum of $24,000 per month.
(d) A grant of an option to Lawson to purchase an additional 32,000 shares
of the Company's common stock at $5.00 per share for five years.
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The Company plans to develop the British and European markets by adding the
sale of cruises and expanding the offering of hotel and resort products. In
order to facilitate the anticipated increased sales volume, the Company
will be making an investment in computers, telephone systems and software
prior to the end of the year. Management believes that the acquisition will
be immediately accretive to earnings. In addition, the acquisition will
provide an additional market for sale of the rooms/cabins that the Company
receives in exchange for advertising.
The acquisition will be accounted for as a purchase.
o On July 7, 2000, the Company announced that it had selected Siebel Software
as its customer relationship management software solution. The use of the
Siebel Software will also facilitate the Company's development of its
eCommerce applications and the direct booking of travel from the Company's
web sites. Management projects that the Siebel Software will be installed
and ready for use by January 1, 2001.
o The Company continued to pursue its belief that employees should share in
the long-term growth of the Company. At its annual meeting on June 5, 2000,
the shareholders approved an increase in the number of common shares
authorized by the Company's qualified stock option plan from 450,000 to
720,000 on June 30, 2000. The Board granted 175,000 options to employees.
As of July 31, 2000, there are approximately 490,000 shares granted under
the plan.
o In January 2000, the Company established "WeddingTrips", a separate
reservation center for wedding and honeymoon travel. Since the Company does
not recognize the revenue from wedding and honeymoon travel until after the
travel has occurred, the second quarter financial results include only
$170,000 of gross revenue and $148,000 of cost of goods sold from the
WeddingTrips division. Management anticipates the revenue from this
division will increase significantly in the second half of 2000.
o During the second quarter, the Company continued to experience significant
increases in phone call volume, web site transactions and advertising
contracts. As a result, the Company added new personnel primarily in the
reservations and advertising areas in order to accommodate this increase in
business. The Company had 127 full-time employees at June 30, 2000 and 5
part time or temporary employees.
o New travel bookings (either paid in full or under deposit) were
approximately $5.4 million in the second quarter of 2000 and new
advertising contracts for the Company's publications were approximately
$900 thousand. The Company requires a deposit at the time of booking with
full payment due before travel. Most of the advertising contracts 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.
The Company believes this increase in business was a direct result of increased
marketing efforts including expanding the number of field representatives
distributing the Company's marketing materials to professional airline personnel
around the world as well as increasing the number of publications distributed.
The Company has continued to focus on the development of its product base
resulting in an increased number of properties and destinations available to its
clients. In addition, the Company's web site 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.
Subsequent to the end of the quarter, the Company issued $1,000,000 of
convertible debentures to Renaissance Capital of Dallas, Texas. The debentures
provide for the quarterly payment of interest at 8% per annum, are due in four
years and are convertible by the holder into the Company's common stock at a
conversion ratio of one share for each $3.10 of debenture or a total of 322,580
shares.
The Company's activities in the third and fourth quarters of 2000 will be
focused on the integration of the Lawson acquisition, the development of the
WeddingTrips line and implementation of the customer relationship management
software.
FINANCIAL CONDITION AND CHANGES IN FINANCIAL CONDITION
Total current assets increased $1.7 million during the quarter to $7.1 million
and current liabilities increased approximately $1.3 million to $3.7 million.
The primary cause for the increase in current assets and current liabilities is
related to the rollout and recall of the TourTek software system as discussed in
the previous sections of this 10Q. Specifically, due to software related issues,
a number of passengers were not charged until July for travel that occurred in
the second quarter. Similarly, the related payments were not made to the hotels
and resorts until July. Due to the increase in advertising contracts negotiated
during the quarter, the total value of room inventory increased by approximately
$560 thousand. A substantial number of hotel vendors exchange room or person
night credits for advertising space in the Company's publications.
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Total cash and investment securities, net of related short term borrowings,
decreased approximately $574 thousand during the current quarter. This decrease
in net cash balances was the result of the increase in rooms/cabins held for
sale and the increase in accounts receivable and accounts payable as a result of
TourTek related issues. The restricted cash balance of $221 thousand represents
a portion of the Company's certificates of deposit pledged as a reserve for
charge backs against the Company's 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 of cash advertising revenue due from
vendors that advertised in the Company's Publications, commissions due from
cruise lines and hotels, as well as receivables from passengers who traveled
prior to June 30, 2000 as explained in the TourTek discussion in this 10Q. The
balance due from affiliates is secured by a short-term promissory note
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, 2000 of $60 thousand,
as compared to $111 thousand for the comparable prior year quarter. Net income
for the quarter resulted from increased traveled revenue and advertising sales
associated with the expansion of its marketing distribution. The Company
believes that the benefits of this expansion were not fully realized in 1998 and
1999 when significant funds were expended in all of these areas, and will
continued to be realized in subsequent periods. The amount of travel booked,
travel revenue and advertising sales for the quarter were substantially in
excess of the comparable quarter in 1999.
Revenue
Gross revenue for the quarter ended June 30, 2000 increased $2.6 million, or 35%
over the comparable 1999 quarter levels. Travel sales increased $2.1 million, or
33%, over the first quarter 1999. In addition, advertising and subscription
revenues increased $444,000, or 60%, over this same time frame. A substantial
number of these advertising contracts call for the Company to receive a number
of room or person nights credits in lieu of cash payment. Management anticipates
that both travel and advertising sales will continue to grow with the aid of a
stronger distribution network for its publications and a consistent and
increased publishing schedule. Management also 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 hotels that advertise.
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 annual advertising contracts, revenue is recognized
pro-rata over the term of the contract.
Cost of Goods Sold
The gross margin for travel sales for the quarter ended June 30, 2000 was 20%
which represents approximately a 2 point increase over the 1999 second quarter
margin of 17.6%. Margins for travel sales can fluctuate depending on a number of
factors relative to the products being sold including, but not limited to,
competition, location, and availability of supply. Publishing cost which
includes the costs associated with pre-production, printing, paper and delivery
of the Company's Publications grew as a result of the increase in the number of
publications being distributed and the addition of Destination Weddings &
Honeymoons magazine. Publishing margin for the current quarter was a positive
39% as compared to 37% for the prior year quarter. The Company anticipates that
the number of magazines and publications issued in the future will continue to
increase as the Company increases its airline employee database and as it
expands it WeddingTrips division.
Operating Expenses
Operating expenses for the current quarter increased 63% over the prior year
quarter. The primary increases in expenses relate to increased staffing at both
the support and reservation personnel levels. A portion of this increased
staffing relates to the establishment of the WeddingTrips division. Over the
past eighteen months the Company added reservation, sales, marketing,
accounting, and 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 the
majority of the properties offered to interliners.
Due to the increase in booking volume, the Company continues to experience
increases 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.
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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.
NEW ACCOUNTING PRONOUNCEMENTS
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.
In January 2000, the Financial Accounting Standards Board, Emerging Issues Task
Force, issued EITF 99-17, "Accounting for Barter Advertising Transactions". EITF
99-17 is effective for transactions occurring after January 20, 2000. This
pronouncement requires that revenues and expenses should be recognized from
advertising barter transactions at the fair value of the advertising surrendered
or received only when an entity has a historical practice of receiving or paying
cash for similar advertising transactions. Management does not believe that EITF
99-17 applies to the Company.
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. This situation is not expected to change as a
result of the Lawson acquisition.
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
foreign 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.
The Company's acquisition of Lawson is denominated in British Pounds Sterling.
As such, the Company is exposed to the rate associated with the fluctuation of
the U.S. Dollar relative to the British Pound.
Following the Lawson acquisition, the Company will be exposed to additional
foreign currency risk due to expanded offerings in Europe and the Middle East.
The Company has arranged a forward purchase facility with National Westminster
Bank of London to minimize the effects of this currency risk. As of the filing
of this 10Q, the Company does not have any open forward purchase positions.
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 phrases "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
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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.
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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 5, 2000. The number of qualified
shareholder votes attending the meeting either in person or by proxy
totaled 2,678,601 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 2,675,601 votes for, 0 votes abstaining, and
3,000 votes against
Mr. Sandner received 2,675,601 votes for, 0 votes abstaining, and
3,000 votes against
Mr. Rader received 2,675,601 votes for, 0 votes abstaining, and
3,000 votes against
Mr. Boyd received 2,675,601 votes for, 0 votes abstaining, and
3,000 votes against
c. The Shareholders voted to increase the number of shares authorized by the
Company's Qualified Stock Option Plan to 720,000 from 450,000. The vote was
1,665,953 in favor, 85,769 opposed and 10,222 abstaining.
d. The Shareholders voted to reincorporate the Company in the State of
Delaware. The vote was 1,738,421 in favor, 18,300 opposed and 2,623
abstaining.
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 filed during the second quarter of 2000.
13
<PAGE> 14
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 August 15, 2000
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/ Robert R. Roe
---------------------
Robert R. Roe, Chief Financial Officer/Vice President
Date August 15, 2000
By /s/ Matthew O'Hayer
---------------------
Matthew O'Hayer, Chairman of the Board and Chief
Executive Officer
Date August 15, 2000
By /s/ Robert Sandner
---------------------
Robert Sandner, Director
Date August 15, 2000
By /s/ Robert Rader
---------------------
Robert Rader, Director
Date August 15, 2000
By /s/ Duane K. Boyd
---------------------
Duane K. Boyd, Director
Date August 15, 2000
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ------------
<S> <C>
27.1 Financial Data Schedule
</TABLE>
