SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended March 31, 1997 Commission file No. 33-16820-D
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
TRAVIS INDUSTRIES, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84 - 1063149
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3415 W. Broadway Council Bluffs. Iowa 51501
(Address of principal executive offices) (Zip Code)
(712) 328-3040
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference of Part 111 of this Form 10-K, or any
amendment to this Form 10-K. [ X ]
State Issuer's revenues for its most recent fiscal year: $1,738,942.
On March 24, 1998, the Registrant had 123,496,864 shares of common voting
stock held by non-affiliates. The Aggregate market value of shares of common
stock held by non-affiliates was $3,704,905 on this date. This valuation is
based upon the average low bid price for shares of common voting stock of the
Registrant on the "Electronic Bulletin Board" of the National Association of
Securities Dealers, Inc. ("NASD").
Documents Incorporated By Reference: None
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
On March 24, 1998, the issuer had 149,655,244 shares of its $0.0001 par value
common stock outstanding.
Transitional Small Business Disclosure Format: Yes_; No X .
<PAGE>
PART I
Item 1 - Business
General Development of the Business
Travis Industries, Inc. (the "Company") was organized under the laws of the
State of Colorado on July 21, 1987, under the name "Travis Investments,
Inc." On June 3, 1988, the Company completed an initial public offering of
2,500,000 Units consisting of shares of common stock, Class A and Class B
common stock Purchase Warrants pursuant to a Registration Statement filed
with the Securities and Exchange Commission and a Prospectus dated November
30, 1987. The Company was structured as a Blank Check public company to
acquire business opportunities by purchase or reverse acquisition. Its Class
A and Class B common stock Purchase Warrants contained in the Units expired
on May 31, 1995.
The Company has authorized 500,000,000 shares of $0.0001 par value common
stock. Effective September 25, 1995, the Company effected a one for five
reverse split of its outstanding common stock without effecting the number of
authorized shares or the stated par value thereof. All references to common
stock in this report are stated to give effect to such reverse stock split.
The Company also has issued and outstanding 28,400,000 shares of Series B
Preferred, face value $710,000. The Series B Preferred is voting,
noncumulative, redeemable and convertible at the option of the Company into
shares of common stock for $.125 per share at face value plus accrued
dividends. No dividends have been declared or have accrued to date.
From October, 1988 through March 1993, the Company completed acquisitions of
several businesses involved in direct mail advertising services including
graphic design, printing and fulfilment. During the early development stage,
the Company used the proceeds from license and franchise fees to expand
marketing operations and for working capital. The Company financed its
operations through sales of franchises and Franchise Area Developer
Agreements (master franchises), debt, and the issuance of preferred and
common stock.
After a number of adverse business developments, on October 4, 1994, the
Company filed for protection from its creditors under Chapter 11 of the U.S.
Bankruptcy Code, under Case No. BK. 94-81544 in the U.S. Bankruptcy Court for
the District of Nebraska (the "Bankruptcy Case"). The Company filed a Plan
of Reorganization which was approved and confirmed by the Bankruptcy Court on
September 25, 1995 with an effective date of November 6, 1995.
Following the filing of its Bankruptcy Petition, in December of 1994, the
Company signed a letter of intent with Liberty Capital Corporation, a
Colorado corporation ("Liberty Capital") which provided for: (i) a cash
infusion of $100,000 in post-petition debt, (ii) the spin-off of Donis
Corporation, its wholly owned subsidiary, to its former owners and a change
in control of the Company; and (iii) through the transfer of certain assets
and assumption of certain liabilities in connection with the referenced spin
off of Donis, the accomplishment of a major capital restructuring of the
Company including the retirement and cancellation of the common and preferred
shares owned by the then major stockholders of the Company.
A definitive agreement reflecting these terms was executed and presented to
the Bankruptcy Court for approval and approved on April 10, 1995. Upon
closing of the definitive agreement on April 24, 1995, the then current
officers and directors of the Company resigned, and were replaced by Stephen
E. Cayou and Jeffrey R. Skinner, who are principals and sole shareholders of
Liberty Capital Corp. ("Liberty") The Company transferred its ownership of
all of the capital stock of Donis Corporation to its former owners in
exchange for surrender and cancellation of 24,531,208 shares of common stock
and all outstanding shares of Series A Preferred Stock. Liberty infused
$100,000 into the Company as post-petition priority debt, took over
management of the remaining operations of the Company and completed the
presentation and approval by creditors of the Company's Chapter 11 Plan of
Reorganization. Mr. Cayou was appointed as Chairman, President and Chief
Executive Officer of the Company and Mr. Skinner was appointed Director,
Chief Financial Officer and Secretary and Treasurer. Messrs. Cayou and
Skinner then began to conduct executive management and oversight of
operations from their Golden, Colorado office of Liberty Capital.
Also, on April 24, 1995, Liberty completed a purchase of an equipment lease
covering certain printing equipment used by the Company from the former
secured creditor in settlement of litigation between the Company and such
creditor. During the Fiscal Year ended March 31, 1996, Liberty sold one
piece of this equipment to the Company for $18,000. The Company remained
obligated to Liberty under the original terms of the equipment lease until
May 1, 1997, when Liberty conveyed this equipment to the Company and forgave
back lease payments in the amount of $23,200 in exchange for 4,640,000 shares
of common stock. The leased equipment was valued at the principal amount of
the lease of $42,800.
The Company's Plan of Reorganization as approved by the Bankruptcy Court,
provides for payment in full in installments of the allowed amounts of any
perfected secured claims and certain priority claims. All claims of Victoria
Tribble, the wife of Peter D. Hobbs, Sr. the former CEO of the Company, under
an equipment lease and other matters set forth in an adversary proceeding
filed in the Bankruptcy Case, were settled and certain amounts were paid in
common stock and in cash on confirmation of the Plan of Reorganization. The
claims of essential trade creditors was scheduled to be paid in eight
quarterly payments of 6.25% of the allowed amount of such claim (an aggregate
50% payout) commencing on the Effective Date of the Plan of Reorganization.
The claims of general creditors were to be paid in one lump sum payment of
10% of the allowed amount of each claim or two annual payments of 5%, one on
February 1, 1996 and the second on February 1, 1997. As of March 31, 1997,
the Company was in arrears on certain of these payments (See Notes l (a) and
3 to Financial Statements).
Liberty was issued 40,000,000 shares of common stock in satisfaction of its
$100,000 post petition claim. Additionally, the Plan of Reorganization
provided for a stock offering of up to $300,000 in common stock at $0.025 per
share. The Company raised $250,775 in gross proceeds pursuant to this
offering and issued 10,031,000 shares of its common stock to certain
investors in the offering. In both cases, the shares of common stock were
issued pursuant to the exemption from registration under the federal
securities laws provided by Bankruptcy Code Section 1145 (a)(1) or 1145
(a)(2) and were, as such, free trading.
There remains outstanding 28,400,000 shares of Series B Preferred Stock in
the face amount of $710,000, which, commencing January 1, 1994, accrues
dividends at the rate of prime plus 4%, when and if declared by the Company.
As of March 31, 1997 cumulative dividends of $276,900 are in arrears. (See:
Note 5 to Financial Statements - Preferred Stock).
Narrative Description of Business of the Company
Since commencement of operations, the Company's primary business has been
graphics, printing, advertising and fulfillment of direct mail advertising
programs. The Company has sold its services under a variety of direct
marketing mechanisms including a network of licensed dealers, franchisees,
and Franchise Area Developers (bulk franchises packaged for resale through
dealers or "FAD's") and recently through direct customer service agreements.
The direct mail business has become extremely competitive with the customer
base becoming more sophisticated and purchasing fulfillment based on price
and quality. While the Company retains an active network of licensees and
franchisees, the Company's Uniform Franchise Offering Circular has expired
and the Company is unable to sell additional franchises. Management has been
evaluating the merits of its franchise program to determine whether to renew
its Uniform Franchise Offering Circular and pursue marketing further
franchises. Although the Company maintains active relationships with the
remaining members of its network of licensees, franchisees and FAD's, the
Company presently pursues its new business primarily through non-exclusive
customer service agreements.
In certain cases, the Company's agreements with members of its network forbid
territorial infringement by other Company customers. As the network becomes
less active through expiration of agreements or simply with changes in market
demand and conditions, the Company has been relying on marketing to
independent mailers.
The Company provides `camera ready' graphics, printing, compiling, and
assembling of inserts, stuffing envelopes, mailing list acquisition and
generation, and direct mailing of the advertising material on behalf of its
customers. Most orders are prepaid upon approval of the production order. The
Company retains ownership of all `camera ready' art and reuses them when
necessary.
Trademarks and Tradenames
The Company owns certain US registered trademarks, "American Advertising
Distributors" Reg. No. 1,156,603 filed June 1, 1981; "Radiomail" Reg. No.
1,534,595 filed April 11, 1989; "Bonus Express" Reg. No. 1,310,363 filed
December 18, 1984; "Supermail" Reg. No. 1,464,806 filed November 10, 1987
and "LeMail", Reg. No. 1,536,701, filed April 25, 1989.
Seasonality of Business
The direct mail advertising business of the Company is seasonal to the extent
that there is a greater volume of advertising and services provided during
the last three months of the year, due to the holidays, and the general
increases due to retailing activities associated with the holiday season.
Competition
The direct mail business is highly competitive and the Company has a number
of competitors across the United States. Sizes of competitors range from
small `mom and pop' local businesses to large, well capitalized corporations,
with substantial operating histories. The Company sells and therefore must
compete, nationwide, but due to its recent financial distress, has not been
able to afford substantial marketing efforts necessary to increase market
share.
The principal competitors of the Company are franchisers and independent
mailers including Money Mailer, Inc., which has been in business since 1979,
and has an estimated 400 Franchised Units; Super Coups, which has been in
business since 1983, and has an estimated 70 Franchised Units in 13 states;
Trimark, Inc., which has been in business since 1978, and has an estimated 40
Franchised Units in 26 states and has two company-owned Units; United Coupon
Corporation, which has been in business since 1989, and has an estimated 88
Franchised Units in 24 states and has two company-owned Units; and Val Pac.
which is owned by Cox Communications, and is believed to be the largest in
the country, with a combination of licensees and franchisees. The Company
also competes with several independent mailing companies, Mail West of Tuscon
which is approximately the same size as the Company and Storing, Inc. of
Columbus, Ohio which is approximately two and 1/2 times the size of the
Company.
The Company, through LeMail, Radiomail and AAD, has approximately 50 active
franchises/licencees covering almost every state. Certain of the Franchise
Area Dealers are active, mail to only a portion of their territories, but are
actively trying to expand into their remaining areas.
Costs of Compliance with Environmental Laws
The business operations of the Company may involve the use of chemical
supplies and inks related to its printing services; however, all of these
products are used in the Company's business operations, and there are no
significant waste by-products which are discharged into the environment or
which require special handling or the incurring of additional costs for
disposal. Accordingly, costs of compliance with environmental laws, rules and
regulations have not been segregated and are believed to be nominal.
The Company is unaware of any pending or proposed environmental laws, rules
or regulations, the effect of which would be adverse to its contemplated
operations.
Employees
The present number of employees of the Company is stable, and no material
increases are anticipated. The Company presently has approximately 18
employees, including 16 production and office employees in Iowa and 2
directors and executive officers in Colorado, employed full time by the
Company.
Item 2 - Properties
The Company presently leases approximately 24,000 square feet of space at
3415 W. Broadway, Council Bluffs, Iowa, telephone number (712) 328-3040.
These facilities house the principal operating facilities of the Company.
The Company leases these facilities from a non-affiliated party pursuant to a
month to month lease. Current rent is approximately $7,166.66 per month.
The Company needs substantially less space than it currently has for its
present size of operations and is searching for more appropriate space and/or
desires to renegotiate terms with its current landlord for less space. The
total cost of the facility including utilities and maintenance is
approximately $10,500 per month.
Item 3 - Legal Proceedings
To the knowledge of management, during the fiscal year ended March 31, 1997,
and to the date hereof, the Company is not nor was a party to any material
legal proceedings, and no such proceedings are known to be contemplated.
Similarly, to the knowledge of management, and for the periods indicated, no
director or executive officer of the Company is or was party to any material
legal proceeding wherein any such person had an interest adverse to the
Company.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders. The Company expects
to hold a shareholder's meeting with voting on proxy issues during calendar
year, 1998.
PART II
Item 5 - Market for Registrant's Common Equity and Related Stockholder
Matters.
The common stock of the Company is listed on the "Electronic Bulletin Board"
of the National Association of Securities Dealers, Inc. ("NASD") under the
symbol "TVSI."
The following table shows the range of high and low bid quotations for the
Company's common stock for the past two fiscal years, as reported by the
National Quotation Bureau monthly reports or "Pink Sheets". Prices reflect
inter-dealer prices, and do not necessarily reflect actual transactions,
retail mark-up, mark-down or commission.
<TABLE>
<CAPTION>
STOCK QUOTATIONS
BID
Quarter Ending: High Low
<S> <C> <C> <C>
Fiscal 1996
6/30/95 $ 0.05 $ 0.025
9/30/95 0.05 0.0125
12/31/95 0.025 0.0125
3/31/96 0.03 0.005
Fiscal 1997
6/30/96 0.04 0.025
9/30/96 0.0425 0.0325
12/31/96 0.035 0.0225
3/31/97 0.03 0.0225
</TABLE>
As of March 23, 1998, the number of record holders of the Company's common
stock was 340. These numbers do not include an indeterminate number of
stockholders whose shares are held by brokers as "nominees" or in street
name.
Dividends
The Company has not paid any dividends with respect to its common stock, and
it is not anticipated that the Company will pay dividends in the foreseeable
future. While no dividends have been declared or have therefore accrued,
cumulative dividends in the amount of $276,900 are in arrears as of March 31,
1997, on the Company's Series B Preferred Stock. (See: Note 5 to Financial
Statements).
Item 6. - Management's Discussion and Analysis
Overview
Despite forgiveness of $270,000 in debt via the Chapter 11 Bankruptcy, the
Company remained burdened with substantial debt obligations and lack of
working capital to expand marketing, enhance customer service and provide
fulfilment services. The Company has little short term liquidity and has
been forced to rely upon cash infusions and forgiveness of debt by its
principal shareholder, Liberty Capital Corp. to cover cash shortfalls and
reduce debt service. Subsequent to March 31, 1997, with cash provided by
Liberty, the Company paid off portions of debts to the IRS and paid off its
secured creditor, Firstar Bank of Omaha, Neb. Also, subsequent to March 31,
1997, Liberty conveyed certain equipment to the Company, cancelled its
equipment lease and foregave past lease payments in exchange for common stock
of the Company. While the Company has severely cut back overhead, salaries
and expenses, it lacks sufficient cash resources to conduct marketing or to
hire direct production labor and indirect labor for customer service and
fulfillment. The Company remains in default on certain of its obligations
under its Plan of Reorganization and owes state and federal employee
withholding taxes for past periods which threaten the short to medium term
viability of the Company. The Company needs a substantial infusion of new
capital for marketing, for repairs and maintenance, to upgrade its facilities
in order to increase revenues, to take advantage of economies of scale, and
to obtain more favorable credit terms with its vendors.
Financial Condition
As a result of consummation of its Chapter 11 Plan of Reorganization,
approximately $270,000 in debt was forgiven, 24,531,208 shares of common
stock and 56,257,354 shares or $2,176,873 in face value of Series A Preferred
Stock, were canceled. Also, $157,758 in approved priority debt and $246,954
in approved non-priority debt was restructured to a total of $143,335. The
disposal of Donis Corporation, the Company's wholly owned subsidiary in 1995,
resulted in net reduction of debt by $40,000 and a net reduction in assets of
approximately $20,000. Acquisition of certain equipment previously leased
from Liberty after March 31, 1997, resulted in an increase in assets of
$42,800 and a reduction of fixed overhead by $1,400 per month.
The Company had $ 79,497 in total assets and approximately $ 403,686 in total
liabilities at the end of fiscal 1997, as compared to $ 186,292 and $ 368,593
at the end of fiscal 1996, respectively. At the end of fiscal 1997, the
Company had approximately $ 2,380 outstanding checks in excess of cash
amounts reported by banks as compared to $ 25,651 in outstanding checks in
excess of cash amounts reported by banks at the end of fiscal 1996. The
Company had $ 32,042 in net accounts receivable at the end of fiscal year
1997, as compared to $104,072 at the end of fiscal year 1996. The Company
remains in arrears on certain payments due under its Plan of Reorganization.
(See - Note 3 to Financial Statements).
Subsequent to March 31, 1997, the Company paid off its secured note to
Firstar Bank and paid its pre-petition payroll tax liabilities, but owes
approximately $ 85,000 in additional payroll taxes for calendar years 1995
through 1997, which is currently being paid pursuant to an installment
agreement of $3,000 per month. Also, subsequent to March 31, 1997, the
Company repaid $258,796 in debt consisting of $23,200 in back lease payments
on equipment and $235,596 in cash advances and loans from a related party,
and purchased equipment valued at $42,800 from a related party for a total of
20,346,380 shares of common stock of the Company. The equipment lease
pertaining to the equipment which was cancelled in this transaction provided
for monthly lease payments of approximately $1,400.
Results of Operations
The Company's revenues from operations for the year ended March 31, 1997,
were $1,738,942, or a decrease of $144,473 from the previous year's revenues
from operations. This change was attributable to attrition in the Company's
licensee and franchise network, the lack of working capital to fund marketing
to new customers and to respond to competitive conditions in the marketplace.
Gross profits from operations for the fiscal year ended March 31, 1997, were
$510,892 or 29.4% of sales, compared to $362,705, or 19.3% of sales for the
prior year representing an increase of $148,187 due to a decrease of 10% in
cost of sales. Cost of sales at $1,228,050 or 70.67% of sales were down
from Fiscal 1996 at $1,520,710 or 80.7% of Sales due in part to reductions in
material cost, subcontractor costs and direct labor expenses.
Operating expenses increased $18,387 and from 41.4% to 45.9% as a percentage
of sales over fiscal 1996. This increase was due to a non-cash charge of
$162,500 for services paid with common stock, a management fee of $2,400 paid
to Liberty Capital, offset by reductions in bad debts, rent, salaries,
certain items of overhead and a decrease in depreciation and amortization of
$26,586.
Net loss for the year was $304,387. This was a decrease of $121,883 from the
previous year. This decrease would be substantially larger by comparison but
for the non-cash charge against Sales of $162,500 in services with common
stock of the Company. Gross Margins of 29% are of considerable concern to
management. Management attributes this condition to low sales volume and
inadequate cash resources leading to unfavorable credit terms and pricing
from vendors. Also, management attributes ongoing net losses to fixed
overhead, wages and salaries which, as a percentage of gross sales, reflect
under-utilization of capacity and inadequate sales volume to achieve
economies of scale in the Company's operations. Management also attributes
these conditions to a low working capital turnover and a lack of capital to
fund sales and marketing, to purchase equipment and to cover cash
requirements during cyclical, slow periods.
Liquidity and Capital Resources
The Company had a working capital deficit as of March 31, 1997, of $371,644.
This compares to a working capital deficit of $ 261,196 in fiscal 1996. The
decline in working capital was primarily due to continuing operating losses
resulting in additional current liabilities and less current assets. Losses
were partially funded with issuance of common stock, increases in Accounts
Payable and cash advances from related parties. During fiscal year ended
March 31, 1997, the Company issued 6,500,000 shares valued at $162,500 for
services (See - Note 6 to Financial Statements). During fiscal year ended
March 31, 1996, the Company issued 10,031,000 shares of common stock for
$250,775 net proceeds to the Company from a private placement undertaken
pursuant to the Company's Chapter 11 Plan of Reorganization. Also, as of
March 31, 1997, $56,051 in cash advances and accrued equipment lease payments
were owed to related parties. Subsequent to March 31, 1997, the Company
incurred obligations to related parties in the amount of $202,746 for cash
advances used to repay debt and to fund operations. Also, subsequent to
March 31, 1997, the Company repaid a total of $258,797 in amounts owing to
such related parties and purchased certain leased equipment valued at $42,800
with a total of 20,346,380 shares of its common stock valued at $0.015 by the
board of directors.
The Company continues to rely upon its revenues and upon cash advances from
related parties to pay these and other post-petition obligations and lacks
sufficient capital or revenue to pay for additional marketing to increase
revenue. Additional capital will be necessary in the near term to reduce debt
payments and finance marketing efforts. Due to the current financial
condition of the Company and the relative lack of liquidity in the market for
the Company's common stock, no assurance can be made that the Company will be
successful in raising any substantial amount of capital through the sale of
equity securities, or with additional bank debt on favorable terms in the
near future. Never the less, due to such conditions, the Company may be
required to issue further common stock to pay executives, consultants and
other employees which may have a continuing dilutive effect on other
shareholders of the Company. Failure of the Company to acquire additional
capital in the form of either debt or equity capital will most likely impair
the ability of the Company to meet its obligations in the near or medium
term. (See - Note 8 to Financial Statements).
Item 7. Financial Statements.
The financial statements listed in the accompanying index to financial
statements are set forth under Part IV, Item 13 to this Report, and are
incorporated herein by reference.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Following the end of fiscal 1993, the Company's independent accountant, A. J.
Robbins, PC was terminated for financial reasons. In July, 1996 the board of
directors of the Company retained the Company's former independent accountant
Schumacher & Associates, Inc., CPA's to audit the financial statements for
the years ending March 31, 1995 and 1996. The former auditor's opinion did
not contain adverse opinions or disclaimers for the pertinent fiscal years
other than uncertainty as to the ability to continue as a going concern. To
the best knowledge of current management, there were no disagreements with
the previous auditor nor the current auditor.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16 (a) of the Exchange Act.
Identification of Directors and Executive Officers
The following table sets forth the names, ages, nature of all positions and
offices held by all directors and executive officers of the Company since the
end of the fiscal year ending March 31, 1996, and to the date hereof, and the
period or periods during which each such director or executive officer served
in their respective positions.
<TABLE>
<CAPTION>
Date of Date of
Election or Termination or
Name Age Positions Held Designation Resignation
________________________________________________________________________
<S> <C> <C> <C> <C>
Stephen E. Cayou 44 Chairman; CEO 4/24/95 N/A
And President
Jeffrey R. Skinner 50 Director, CFO, 4/24/95 N/A
Secy., Treas.
Peter N. Hobbs 32 Vice President 4/24/95 N/A
</TABLE>
Term of Office
The directors hold office until the next annual meeting of stockholders, or
until their respective successors are duly elected and qualified, or their
prior resignation. The Bylaws of the Company provide for the holding of an
annual meeting of stockholders at a time and place designated by the Board of
Directors each year. Executive officers are appointed annually by the Board
of Directors following the annual meeting of stockholders and they hold
office until the next annual meeting of directors or until their respective
successors are duly elected and qualified or their prior resignation. There
have been no annual meetings held since the filing of the Bankruptcy Case,
during which all previous officers and directors resigned and Messrs. Cayou
and Skinner were appointed as board members and executive officers. Although
no annual meeting of the stockholders of the Company was held during the
previous two fiscal years, the failure to hold an annual meeting had no
material adverse effect on the Company, and does not render any action taken
by directors or executive officers of the Company during these fiscal years
void or voidable.
Family Relationships
Presently, there are no family relationships between any directors or
executive officers of the Company, either by blood or by happenstance of
marriage. Peter N. Hobbs, is the son of Peter D. Hobbs, the Company's former
Chairman, CEO, President, CFO, Treasurer and Director.
Business Experience
Stephen E. Cayou. Mr. Cayou has held his position as Chairman, President
and Chief Executive Officer of the Company since April 24, 1995, the
effective date of the court approved agreement between the Company's former
officers and directors and Liberty Capital for the change in control of the
Company. Since 1985, Mr. Cayou has been Chairman, President and CEO of
Liberty Capital Corporation, a Colorado corporation ("Liberty Capital").
Liberty Capital is a financial consulting business primarily involved in
mergers, acquisitions, leveraged buyouts, and debt and equity financing for
private and public companies. Mr. Cayou has been licensed by the National
Association of Securities Dealers (NASD) as a Registered Principal,
Registered Options Principal and General Securities Licenses, but has not
been associated with any NASD Member since December, 1990.
Jeffrey R. Skinner. Mr. Skinner similarly has held his position as director,
Chief Financial Officer, and Company Secretary/Treasurer since the effective
date of the referenced agreement on April 24, 1995. Mr. Skinner is Vice
President and Secretary of Liberty Capital and has been associated with
Liberty Capital since 1985. As a principal of Liberty Capital, Mr. Skinner
has been involved in corporate financial consulting and shareholder and
broker relations. Mr. Skinner previously held an NASD General Securities
License as a Registered Representative, but has not been associated with any
NASD Member since December, 1990.
Peter N. Hobbs. Mr. Hobbs has been employed by the Company since 1986, and
has held positions of Production Manager and Customer Service Manager. Over
the past four years, Mr. Hobbs has served as Company Vice-President in the
role of Plant General Manager, overseeing the functions of production,
graphics, customer service, order entry, billing, accounts receivable and
shipping.
Directorships
To the knowledge of management, none of the foregoing persons, while serving
as a director or an executive officer of the Company was or is a director or
a person nominated or chosen to become a director in any company with a class
of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or subject to the requirements of Section 15(d) of such Act or
any company registered as an investment company under the Investment Company
Act of 1940.
Involvement in Certain Legal Proceedings
Effective September 29, 1992, Mr. Cayou and Mr. Skinner executed a Settlement
with the District Business Conduct Committee for District No. 3 of the
National Association of Securities Dealers, Inc. in connection with a
Complaint in which allegations of violations of certain Rules of Fair
Practice of the Association were neither admitted nor denied and under which
certain sanctions were imposed by the Committee.
Item 10. Executive Compensation.
Cash Compensation Table
The following table sets forth the aggregate compensation paid by the Company
for services rendered during the periods indicated:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Year or Other Restricted All Other
Principal Period Salary Bonus Annual Stock Option- LTI Compen-
Position <F2> ended ($) ($) Compen- Awards SAR's Payouts sation
sation ($) (#) ($) ($)
________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stephen 3/31/97 $30,000 0 0 0 0 0 $ 1,200 <F1>
E. Cayou 3/31/96 30,000 0 0 0 0 0 16,050 <F1>
Pres./CEO 3/31/95 N /A N/A N/A N/A N/A N/A N/A
<F1>
<FN>
(1) Attributed as one-half of the amount of a management fee of $32,100 paid
to Liberty Capital by the Company during the pendency of the Bankruptcy Case,
during fiscal year ended March 31, 1996, and one-half of the amount of a
management fee of $2,400 paid to Liberty during fiscal year ended March 31,
1997.
</FN>
<F2>
<FN>
(2) Compensation of Officers in office resigning on or prior to the change in
control effective April 24, 1995 have been omitted.
</FN>
</TABLE>
Compensation of Directors.
There are no arrangements currently in place for the compensation of
Directors as such, other than as employees of the Company. See the foregoing
Cash Compensation Table of this Item.
Termination of Employment and Change of Control Arrangement.
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in the Cash
Compensation Tables set out above which would in any way result in payments
to any such person because of his resignation, retirement or other
termination of such person's employment with the Company or its subsidiaries,
or any change in control of the Company, or a change in the person's
responsibilities following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following tables set forth the shareholdings of the Company's directors
and executive officers and those persons who own more than 5% of the
Company's common stock as of March 23, 1998.
<TABLE>
<CAPTION>
(a) Stock Ownership of Certain Beneficial Owners
(1) (2) (3) (4)
Name and Address Amount and Percent
Title of Beneficial Nature of of Class
of Class Owner Beneficial
Ownership
__________________________________________________________________
<S> <C> <C> <C>
Common Stock Liberty Capital Corp. 24,658,380 17.14%
490 Orchard St. Shares
Golden, Co. 80401 Direct <F1>
<FN>
<F1>
(1) Aggregated with ownership of Stephen E. Cayou and Jeffrey R. Skinner.
</TABLE>
<TABLE>
<CAPTION>
(b) Stock Ownership of Management
(1) (2) (3) (4)
Name and Address Amount and Percent
Title of Beneficial Nature of of Class
of Class Owner Beneficial
Ownership
___________________________________________________________________
<S> <C> <C> <C>
Common Stock Stephen E. Cayou 24,658,380
c/o 490 Orchard St. Shares
Golden, Co. 80401 Indirect <F1> 16.48%
Common Stock Jeffrey R. Skinner 24,658,380
c/o 490 Orchard St. Shares
Golden, Co. 80401 Indirect <F1> 16.48%
Common Stock All Officers and 26,158,380
Directors as a Group Shares 17.48%
<FN>
<F1>
(1) Messrs. Cayou and Skinner are co-owners of Liberty Capital Corp. and
share voting and investment power over the referenced securities of the
Company and are therefore shown as beneficial owners of the same securities.
</FN>
</TABLE>
Contractual Arrangements Regarding Changes in Control
There are no arrangements known to management, including any pledge by any
person of securities of the Company, the operation of which may at a
subsequent date result in a change in the control of the Company.
Compliance With Section 16(a) of the Exchange Act
The Company files reports under Section l5(d) of the Securities Exchange Act
of 1934; accordingly, directors, executive officers and 10% stockholders are
not required to make filings under Section 16 of the Securities Exchange Act
of 1934.
Item 12. - Certain Relationships and Related Transactions.
Transactions with Management and Others.
On April 25, 1995, Liberty Capital and the Company executed a Closing
Agreement in which, among other things, the principals of Liberty Capital
assumed control of the board of directors and completed their obligation to
invest $100,000 in the Company in exchange for 40 Million shares of common
stock of the Company. These shares were issued on January 1, 1996 to Liberty
Capital. Messrs. Cayou and Skinner are equal owners of Liberty Capital.
Liberty Capital and the Company are parties to an equipment lease of certain
equipment acquired by Liberty Capital from a secured creditor of the Company.
The terms of the agreement provided for 24 monthly payments of $1,400
commencing May 1, 1995. Subsequent to March 31, 1997, the Company purchased
the equipment subject to this lease for $42,800 and repaid back lease
payments of $23,200 in exchange for 4,640,000 shares of the Company's common
stock.
During fiscal 1996, the Company paid Liberty $32,100 in management fees in
addition to salaries to Messrs. Cayou and Skinner. The Company also acquired
certain equipment from Liberty Capital for $ 18,000, which it resold for
$17,000 shortly thereafter.
During fiscal 1997, the Company paid Liberty $2,400 in management fees in
addition to salaries to its principals as executive officers of the Company.
Subsequent to March 31, 1997, the Company repaid cash advances made by
Liberty in the amount of $235,596 with a total of 15,706,380 shares of the
Company's common stock.
Transactions with Promoters.
The Company was organized more than five years ago; hence transactions
between the Company and its promoters or founders are not deemed to be
material.
PART IV
Item 13. - Exhibits and Reports on Form 8-K.
(A) Reports on Form 8-K.
There were no Reports on Form 8-K of the Securities and Exchange Commission
filed during the quarter ended March 31, 1997.
(B) Exhibits.
Exhibit No. Description
EX-2.1* Plan of Reorganization and First Addendum to Plan of Reorganization,
Chapter 11 Case No. BK94-81544, US Bankruptcy Court District of
Nebraska, confirmed on September 25, 1995, effective November 6,
1995. Incorporated by reference as previously filed as an exhibit
to Form 10K-SB for fiscal year ended March 31, 1996.
EX-2.2* Disclosure Statement and First Addendum to Disclosure Statement in
above Bankruptcy Matter. Incorporated by reference as previously
filed as an exhibit to Form 10K-SB for fiscal year ended March 31,
1996.
EX-3.1* Articles of Incorporation and Bylaws incorporated by reference to
initial Registration Statement, Prospectus and Exhibits dated
November 30, 1987, Commission File No. 33-16820-D.
EX-3.2* Articles of Amendment to Articles of Incorporation incorporated by
reference to Exhibits filed under Form 10-KSB for fiscal year ended
March 31, 1993, Commission file No. 33-16820-D.
EX-4.1* Designation of Class B Preferred Stock, incorporated by reference to
Exhibits filed under Form IO-K for fiscal year ended March 31, 1991,
Commission file No. 33-16820-D.
EX-10.1* Agreement dated March, 1995 between the Company, Liberty Capital
Corporation, Richard Dick and William Soroka, approved by US
Bankruptcy Court on April 11, 1995 for the spin off of Donis and
change in control of the Company. Incorporated by reference as
previously filed as an exhibit to Form 10K-SB for fiscal year ended
March 31, 1996.
EX-10.2* Closing Agreement and Exhibits pertaining to closing of the
Agreement, Exhibit 10.1, dated April 24, 1995. Incorporated by
reference as previously filed as an exhibit to Form 10K-SB for
fiscal year ended March 31, 1996.
EX-10.3* Lease Agreement dated effective May 1, 1995 between the Company and
Liberty Capital Corp. pertaining to certain equipment. Incorporated
by reference as previously filed as an exhibit to Form 10K-SB for
fiscal year ended March 31, 1996.
EX-10.4 Description of Compensatory Plan adopted and set forth in Consent
Minutes by the Board of Directors dated February 19, 1997.
EX-27 Financial Data Schedule.
* These documents and related exhibits have been previously filed with the
Securities and Exchange Commission, and by this reference are incorporated
herein
<PAGE>
FINANCIAL STATEMENTS
TRAVIS INDUSTRIES, INC.
FINANCIAL STATEMENTS
and
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
March 31, 1997 and 1996
F-1
<PAGE>
TRAVIS INDUSTRIES, INC.
March 31, 1997 and 1996
Index to Financial Statements
Page
Report of Independent Certified Public Accountants F-3
Financial Statements:
Balance Sheet F-4
Statements of Operations F-5
Statement of Changes in Stockholders' (Deficit) F-6
Statements of Cash Flows F-7
Notes to Financial Statements F-8
F-2
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Travis Industries, Inc.
We have audited the balance sheet of Travis Industries, Inc. as
of March 31, 1997 and the related statements of operations,
changes in stockholders' (deficit) and cash flows for the two
years ended March 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform an audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Travis Industries, Inc. as of March 31, 1997 and the results
of its operations, its changes in stockholders' (deficit) and its
cash flows for the two years ended March 31, 1997 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed
in Note 8 to the financial statements, the Company has suffered
recurring losses from operations, has a net capital deficiency
and is delinquent on payment of creditor liabilities including
payroll taxes and creditor liabilities pursuant to the Company's
plan of reorganization. These matters raise substantial doubt
about the Company's ability to continue as a going concern. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Schumacher & Associates, Inc.
Certified Public Accountants
12835 E. Arapahoe Road
Tower II, Suite 110
Englewood, CO 80112
January 5, 1998
F-3
<PAGE>
TRAVIS INDUSTRIES, INC.
BALANCE SHEET
March 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Accounts receivable, net of allowance for
doubtful accounts of $110,000 $ 32,042
______________
Total Current Assets 32,042
Furniture and equipment, net of accumulated
depreciation of $250,397 (Note 2) 35,927
Other assets 11,528
______
Total Assets $ 79,497
=============
<CAPTION>
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
<S> <C>
Current Liabilities
Outstanding checks in excess of amounts
reported by banks $ 2,380
Note payable, bank (Note 4) 75,114
Advances from related parties (Note 7) 54,650
Accounts payable and accrued expenses (Note 4) 271,542
____________
Total Current Liabilities 403,686
Total Liabilities 403,686
____________
Commitments and contingencies (Notes 3,4,5,6,7
and 8) -
Stockholders' (Deficit):
Redeemable preferred stock - $.0001 par
value 100,000,000 shares authorized
(Note 5):
Series A, none issued and outstanding -
Series B, 28,400,000 shares issued and
outstanding, (liquidation amount of
$710,000) 710,000
Common stock - $.0001 par value,
500,000,000 shares authorized;
127,808,864 shares issued and
outstanding (Note 6) 12,781
Additional paid-in capital 5,390,185
Accumulated deficit (6,437,155)
___________
Total Stockholders' (Deficit) (324,189)
___________
Total Liabilities and Stockholders' (Deficit) $ 79,497
===========
The accompanying notes are an integral part of the financial
statements.
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
For the Years Ended March 31
1997 1996
____ ____
<S> <C> <C>
Sales $ 1,738,942 $ 1,883,415
Cost of goods sold (exclusive of
depreciation shown separately
below) 1,228,050 1,520,710
Gross Profit 510,892 362,705
Operating Expenses
Depreciation 28,888 55,474
Bad debts 42,387 71,706
Rent 109,148 138,410
Salaries 216,632 254,780
Stock issued for services 162,500 -
Consulting fees, related
party (Note 7) 2,400 32,100
Other operating expenses 235,981 227,079
______________ ___________
Total Operating Expenses 797,936 779,549
______________ ___________
Net Operating (Loss) (287,044) (416,844)
______________ ___________
Other Income (Expenses)
Interest and miscellaneous income 4,103 4,742
Interest (expense) (21,446) (14,168)
_____________ ____________
Total Other (17,343) (9,426)
Net (Loss) $ (304,387) $ (426,270)
_____________ ____________
Net (Loss) per Share $ nil $ nil
_____________ ____________
Weighted Average Shares Outstanding 122,933,864 116,293,364
_____________ ____________
The accompanying notes are an integral part of the financial statements.
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
From March 31, 1995 through March 31, 1997
Additional
Preferred Stock - B Common Stock Paid-in Accumulated
No./Shares Amount No./Shares Amount Capital (Deficit) Total
___________ ______ ___________ _______ _________ ___________ _______
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1995 28,400,000 $ 710,000 111,277,864 $ 11,128 $ 4,978,563 $ (5,706,498) $ (6,807)
Common stock issued - - 10,031,000 1,003 249,772 - 250,775
Net (loss) for the year ended - - - - - (426,270) (426,270)
March 31, 1996 __________ ________ ___________ _______ _________ ___________ ________
Balance at March 31,1996 28,400,000 710,000 121,308,864 12,131 5,228,335 (6,132,768) (182,302)
Common stock issued - - 6,500,000 650 161,850 - 162,500
Net (loss) for the year ended - - - - - (304,387) (304,387)
March 31, 1997 __________ ________ ___________ _______ _________ ___________ _________
Balance at March 31, 1997 28,400,000 $ 710,000 127,808,864 $ 12,781 $ 5,390,185 $ (6,437,155) $ (324,189)
The accompanying notes are an integral part of the financial statements.
</TABLE>
F-6
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended March 31
1997 1996
_____ _____
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ (304,387) $ (426,270)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities
Depreciation 28,888 55,474
Stock issued for services 162,500 -
Increase in accounts payable,
accrued expenses and other 634 90,270
(Increase) decrease in accounts
receivable 72,030 (76,182)
_______ _______
Net Cash (Used in) Operating
Activities (40,335) (356,708)
Cash Flows from Investing Activities - -
_______ ________
Cash Flows from Financing Activities:
Proceeds from notes payable - 89,429
Repayment of notes payable (14,315) -
Advances from related parties 54,650 -
Proceeds from the issuance of
common stock - 250,775
Net Cash Provided by Financing
Activities 40,335 340,204
(Decrease) in cash - (16,504)
Cash, beginning of year - 16,504
Cash, end of year $ - $ -
____________ ____________
Interest paid $ 21,446 $ 14,168
____________ ___________
Income taxes paid $ - $ -
___________ __________
The accompanying notes are an integral part of the financial statements.
</TABLE>
F-7
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 and 1996
(1) Summary of Significant accounting Policies
(a) General
Travis Industries, Inc. (Travis), a Colorado corporation was
incorporated on July 21, 1987. Travis is in the business of
printing advertising materials and coupons and mailing them for its
customers. During 1995, the Company filed a plan of reorgan-
ization under Chapter XI of the United States Bankruptcy Court,
which was approved by the Court. The return of the Series A preferred
stock and the newly issued Series B preferred stock in exchange for
outstanding debt, as described in Note 5, comprised a portion of the
plan of reorganization. The Company's formerly owned subsidiary was
also disposed of under the plan. Contemporaneous with the above items
the Company issued common stock as described in Note 6 and had
certain common stock returned to the Company. Certain assets were
written down to estimated values at the time of the reorganization.
Under the plan of reorganization approximately $270,000 of debt was forgiven.
(b) Revenue and Expense Recognition
The Company recognizes revenue when the goods are shipped and expenses
when incurred.
(c) Furniture and Equipment
Furniture and equipment is carried at cost less accumulated depreciation.
The Company expenses maintenance costs and capitalizes significant
betterments. Depreciation is provided over the estimated useful
lives of the assets using straight-line and accelerated methods. The
estimated useful lives of assets range between 3 and 5 years.
(d) Per Share Information
The per share information is presented based upon the weighted average number
of shares outstanding.
F-8
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1997 and 1996
(1) Summary of Significant accounting Policies, Continued
(e) Non-Monetary Transactions
The Company has exchanged services for non-monetary assets on a limited
basis. Assets received in non-monetary transactions have been recorded
at their fair value as of the date of the acquisition.
(f) Use of Estimates in the Preparation of Financial Statements.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(g) Geographic Area of Operations
The Company prints advertising materials principally in the United States of
America. The potential for severe financial impact can result from negative
effects of economic conditions within the market or geographic area. Since
the Company's business is principally in one area, this concentration
of operations results in an associated risk and uncertainty.
(h) Income Taxes
The Company has approximately $1,000,000 of net operating loss carryovers
which expire in years through 2012. A change in ownership of more than
50% of the Company may result in the inability of the Company to utilize the
carryovers. As of March 31, 1997 the Company had deferred tax assets
of approximately $200,000 related to net operating loss carryovers. A
valuation allowance has been provided for the total amount since the amounts,
if any, of future revenues necessary to be able to utilize the carryovers are
uncertain.
F-9
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1997 and 1996
(1) Summary of Significant accounting Policies, Continued
(i) Concentration of Credit Risk
Financial instruments which potentially subject the Company to concentrations
of credit risk consist primarily of accounts receivable. The Company grants
credit to various customers in the United States. The Company does not require
collateral for its accounts receivable. As of March 31, 1997, the Company
had no significant concentrations of credit risk.
(2) Furniture and Equipment
Furniture and equipment consists principally of office and printing production
equipment.
(3) Delinquent Amounts Payable
As of March 31, 1997 the Company is delinquent on payments of various amounts to
creditors including the Internal Revenue Service and creditors required to be
paid under the terms of its plan of reorganization. Failure to pay these
liabilities could result in liens being filed on the Company's assets and
may result in assets being attached by creditors resulting in the
Company's inability to continue operations. See Note 8.
(4) Note Payable
As of March 31, 1997 the Company had a note payable to a bank in the principal
amount of $75,114. This note bears interest at 8.5% per annum, is
collateralized by various assets of the Company including accounts
receivable. This loan was being amortized over a 60 month period with monthly
payments of $2,044. The final payment was due in November, 2001. As of March
31, 1997, the Company was delinquent on payments on this note, thereby causing
the total balance to become due and payable. The balance was paid in full
during July and August 1997.
(5) Preferred Stock
The Series A preferred stock were returned to the Company and cancelled during
the year ended March 31, 1995 as part of the spin-off of the Company's formerly
wholly-owned subsidiary Donis Corporation, Inc.
F-10
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1997 and 1996
(5) Preferred Stock, Continued
Series B Preferred stock - voting, noncumulative, redeemable.
On December 31, 1991, 28,400,000 shares of Series B
preferred stock was issued to three major shareholders in exchange
for $710,000 of outstanding loans. There was no gain or loss on
extinguishment of debt.
Beginning January 1, 1994 dividends are payable at the rate of prime
rate plus 4% times $710,000 when and if declared by the Board of Directors.
Cumulative dividends in the amount of $276,900 are in arrears as of March
31, 1997. The Series B stock is convertible into common stock only at the
option of the Company at $.125 per share. The Series B stock is stated at
its redemption price which is cost and is redeemable at the discretion
of the Company upon 30 days written notice to the holder. The preference on
liquidation is equal to $.125 per share for the total of $710,000.
(6) Common Stock
The Company during the year ended March 31, 1996 issued 10,031,000 shares
of its common stock for $250,775. During the year ended March 31, 1997 the
Company issued 6,500,000 shares of its common stock for services valued at
$162,500. Of these shares, 1,800,000 were issued to three individuals for public
relations, promotion and marketing efforts. For legal services, the Company
issued 3,000,000 shares. As a bonus to an employee, 1,500,000 shares were
issued. In addition, this employee also was granted an option to purchase an
additional 1,500,000 shares at $.025 per share during the six month period which
commenced in February 1998. An additional 200,000 shares were issued to an
individual in lieu of salary. All of the shares were valued by the Company's
Board of Directors at $.025 per share.
(7) Related Party Transactions
During the years ended March 31, 1997 and 1996 the Company paid $2,400 and
$32,100, respectively, for consulting fees to Liberty Capital, Inc. (Liberty)
a company owned by officers of Travis. The Company also acquired certain
equipment from Liberty for $18,000 during the year ended March 31, 1996. The
Company paid or accrued $1,400 per month for certain printing equipment owned by
Liberty and used by Travis.
F-11
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1997 and 1996
(7) Related Party Transactions, Continued
As of March 31, 1997 the Company owed $54,650 to related parties for advances
received and for accrued equipment rental expenses. Subsequent to March 31,
1997 the Company received additional advances from related parties totaling
approximately $202,746. The advances had no written repayment terms and did
not bear interest. Subsequent to March 31, 1997 the Company issued 15,706,380
shares of common stock as repayment of the total advances payable to Liberty.
The shares were valued by the Company's Board of Directors at $.015 per share.
In addition, on May 1, 1997 Liberty transferred the equipment it had been
leasing to the Company to the Company and forgave the back payments due on the
lease totaling $23,200 in exchange for 4,640,000 shares of the Company's common
stock. The shares were valued by the Company's Board of Directors at $.015 per
share. The equipment was valued at $42,800.
(8) Basis of Presentation - Going Concern
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. However, the Company has sustained recurring
operating losses, has a net capital deficiency, and is delinquent on payment of
payroll taxes and creditor liabilities pursuant to the an of reorganization.
Management is attempting to raise additional capital and attempting to complete
a business combination.
In view of these matters, realization of certain of the assets in the
accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet
its financing requirements, raise additional capital, and the success of its
future operations. Management believes that actions planned and presently being
taken to revise the Company's operating and financial requirements provide the
opportunity for the Company to continue as a going concern.
F-12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TRAVIS INDUSTRIES, INC.
Date: MARCH 25, 1998 By: /s/ STEPHEN E. CAYOU
Stephen E. Cayou
President, Chief Executive
Officer, and Chairman of the
Board of Directors
Date: MARCH 25, 1998 By: /s/ JEFFREY R. SKINNER
Jeffrey R. Skinner,
Chief Financial Officer,
Treasurer, Secretary and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated:
TRAVIS INDUSTRIES, INC.
Date: MARCH 25, 1998 By: /s/ STEPHEN E. CAYOU
Stephen E. Cayou
Board Member
Date: MARCH 25, 1998 By: /s/ JEFFREY R. SKINNER
Jeffrey R. Skinner
Board Member
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED
SECURITIES PURSUANT TO SECTION 12 OF THE ACT
For information forwarded to securities holders of the Company during
the period covered by this Report, see the Exhibit Index of this Report.
Any other proxy or information statements forwarded to stockholders will
be forwarded to the Securities and Exchange Commission on the date such
information is forwarded to stockholders.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
EX-2.1* Plan of Reorganization and First Addendum to Plan of Reorganization,
Chapter 11 Case No. BK94-81544, US Bankruptcy Court District of
Nebraska, confirmed on September 25, 1995, effective November 6,
1995. Incorporated by reference as previously filed as an exhibit
to Form 10K-SB for fiscal year ended March 31, 1996.
EX-2.2* Disclosure Statement and First Addendum to Disclosure Statement
in above Bankruptcy Matter. Incorporated by reference as
previously filed as an exhibit to Form 10K-SB for fiscal year
ended March 31, 1996.
EX-3.1* Articles of Incorporation and Bylaws incorporated by reference
to initial Registration Statement, Prospectus and Exhibits
dated November 30, 1987, Commission File No. 33-16820-D.
EX-3.2* Articles of Amendment to Articles of Incorporation incorporated
by reference to Exhibits filed under Form 10-KSB for fiscal
year ended March 31, 1993, Commission file No. 33-16820-D.
EX-4.1* Designation of Class B Preferred Stock, incorporated by
reference to Exhibits filed under Form IO-K for fiscal year
ended March 31, 1991, Commission file No. 33-16820-D.
EX-10.1* Agreement dated March, 1995 between the Company, Liberty
Capital Corporation, Richard Dick and William Soroka, approved
by US Bankruptcy Court on April 11, 1995 for the spin off of
Donis and change in control of the Company. Incorporated by
reference as previously filed as an exhibit to Form 10K-SB for
fiscal year ended March 31, 1996.
EX-10.2* Closing Agreement and Exhibits pertaining to closing of the
Agreement, Exhibit 10.1, dated April 24, 1995. Incorporated by
reference as previously filed as an exhibit to Form 10K-SB for
fiscal year ended March 31, 1996.
EX-10.3* Lease Agreement dated effective May 1, 1995 between the Company
and Liberty Capital Corp. pertaining to certain equipment.
Incorporated by reference as previously filed as an exhibit to
Form 10K-SB for fiscal year ended March 31, 1996.
EX-10.4 Description of Compensatory Plan adopted and set forth in
Consent Minutes by the Board of Directors dated February 19,1997.
EX-27 Financial Data Schedule.
* These documents and related exhibits have been previously filed with
the Securities and Exchange Commission, and by this reference are
incorporated herein.
EXHIBIT-10.4
Description of Compensatory Plan adopted and set forth in Consent Minutes
by the Board of Directors dated February 19, 1997.
The board of directors authorized by unanimous consent action
dated February 19, 1997, a compensatory stock bonus and
option plan covering issuance of up to 8,000,000 shares of
its $0.0001 par value common stock. The Plan included the
following grants:
A stock bonus of 1,500,000 shares to Peter N. Hobbs, Vice-
President and General Manager of the Company's facilities in
Council Bluffs, IA. Additionally, Mr. Hobbs was granted an
option to purchase an additional 1,500,000 shares commencing
February 19, 1998 for a period of 6 months from that date at
an exercise price of $0.025 per share, further provided that
Mr. Hobbs was at the time of exercise, an employee of the
Company.
Stock compensation of an additional 1,800,000 shares, valued
at $0.025 per share, or $45,000 was issued to four
individuals for their personal services as an advisory group
of Franchise Area Developers.
Payment of 200,000 shares of common stock in lieu of $5,000
accrued salary to the Company's production manager.
Payment of 3,000,000 shares to the Company's special
securities counsel in lieu of cash for accrued legal fees.
Shares issued pursuant to this plan were registered under
Form S-8 with the Securities and Exchange Commission filed on
2/24/97.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
BALANCE SHEET OF TRAVIS INDUSTRIES, INC. AS OF MARCH 31, 1997 AND THE RELATED
STATEMENTS OF OPERATIONS, CHANGES IN STOCKHOLDERS' (DEFICIT) AND CASH FLOWS FOR
THE TWO YEARS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 142,042
<ALLOWANCES> 110,000
<INVENTORY> 0
<CURRENT-ASSETS> 32,042
<PP&E> 286,324
<DEPRECIATION> 110,000
<TOTAL-ASSETS> 79,497
<CURRENT-LIABILITIES> 403,686
<BONDS> 0
0
710,000
<COMMON> 12,781
<OTHER-SE> (1,046,970)
<TOTAL-LIABILITY-AND-EQUITY> 79,497
<SALES> 1,738,942
<TOTAL-REVENUES> 1,743,045
<CGS> 1,228,050
<TOTAL-COSTS> 1,308,828
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,446
<INCOME-PRETAX> (304,387)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (304,387)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
