FORM 10-QSB - Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the period ended: June 30, 1998
or
[ ] Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange act of 1934.
For the transition period from to
Commission File Number 33-16820-D
TRAVIS INDUSTRIES, INC.
(Exact name of registrant 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, IA 51501
(Address of principal executive offices) (Zip Code)
(712) 328-3040
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed
since last report.)
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicated by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
[ ] Yes [ X ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1998, Registrant had 216,184,655 shares of common stock,
$0.0001 par value, outstanding.
INDEX
Page
Number
Part I. Financial Information
Item I. Financial Statements
Balance Sheet as of June 30, 1998 2
Statements of Operations, Three Months
Ended June 30, 1998 and 1997 3
Statements of Cash Flows, Three Months
Ended June 30, 1998 and 1997 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of Operations 6
Part II. Other Information 7
<PAGE>
TRAVIS INDUSTRIES, INC.
BALANCE SHEET
June 30, 1998
(Unaudited)
Current Assets
Accounts receivable, net of allowance for
doubtful accounts of $25,000 $ 73,882
____________
Total Current Assets 73,882
Furniture and equipment, net of accumulated
depreciation of $294,268 29,563
Prepaid legal fees 37,500
Other assets 12,688
___________
Total Assets $ 153,633
Current Liabilities
Outstanding checks in excess of amounts
reported by banks $ 2,987
Customer deposits 110,000
Accounts payable and accrued expenses 244,613
____________
Total Current Liabilities 357,600
____________
Total Liabilities 357,600
Commitments and contingencies (Notes 2) -
Stockholders' Equity:
Redeemable preferred stock - $.0001 par
value 100,000,000 shares authorized:
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;
216,184,655 shares issued and
outstanding 21,618
Additional paid-in capital 5,891,343
Accumulated deficit (6,826,928)
Total Stockholders' (Deficit) (203,967)
Total Liabilities and Stockholders' (Deficit) $ 153,633
The accompanying notes are an integral part of the financial statements.
TRAVIS INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30
(Unaudited)
1998 1997
Sales $ 583,782 $ 601,585
Cost of goods sold (exclusive of
depreciation shown separately
below) 463,578 455,222
Gross Profit 120,204 146,363
Operating Expenses
Depreciation 10,923 7,222
Bad debts 5,000 12,440
Rent 21,500 21,500
Professional fees 51,338 27,620
Salaries 70,230 51,004
Other operating expenses 46,573 29,297
Total Operating Expenses 205,564 149,083
_______________ ______________
Net Operating (Loss) (85,360) (2,720)
Other Income (Expenses)
Interest and miscellaneous
income - 2,791
Gain on sale of investment 4,500 -
Interest (expense) (1,238) (5,303)
Total Other 3,262 (2,512)
Net (Loss) $ (82,098) $ (5,232)
Net (Loss) per Share $ nil $ nil
Weighted Average Shares Outstanding 216,184,655 127,808,864
The accompanying notes are an integral part of the financial statements.
TRAVIS INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended June 30
(Unaudited)
1998 1997
Cash Flows from Operating Activities:
Net (loss) $ (82,098) $ (5,232)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities
Depreciation 10,923 7,222
Amortization of management fees 12,500 -
Stock issued for services 46,000 -
(Decrease) in customer deposits (6,539) -
Increase (decrease) in accounts
payable, accrued expenses and
other (Note 3) 15,277 (3,891)
(Increase) decrease in accounts
receivable (8,261) 11,735
_________ ________
Net Cash Provided by Operating
Activities (12,198) 9,834
Cash Flows from Investing Activities - -
_________ ________
Cash Flows from Financing Activities:
Repayment of Note Payable and
Advances - (9,834)
_________ ________
Net Cash (Used by) Financing
Activities (9,834)
________ ________
(Decrease) in cash (12,198) -
Cash, beginning of period 12,198 -
_________ ________
Cash, end of period $ - $ -
_________ ________
Interest paid $ 1,238 $ 5,303
_________ ________
Income taxes paid $ - $ -
__________ ________
The accompanying notes are an integral part of the financial statements.
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (Unaudited)
(1) Condensed Financial Statements
The financial statements included herein have been prepared by Travis Industries
Inc. without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted as
allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
The management of Travis Industries, Inc. believes that the accompanying
unaudited condensed financial statements contain all adjustments (including
normal recurring adjustments) necessary to present fairly the operations and
cash flows for the periods presented.
(2) 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 plan of reorganization.
Management is attempting to raise additional capital and looking for 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.
(3) Common Stock Issued
On April 30, 1998 the Company entered into an agreement whereby control of the
Company was transferred. The Company's Board of Directors has been changed and
various stock issuances were approved.
During April 1998, the Company issued 1,500,000 shares of its common stock for
payment of legal fees valued at $37,500 which were included as accrued expenses
as of March 31, 1998. Also during April, 1998 the Company issued 1,500,000
shares of its common stock for accrued compensation of $37,500 to an employee.
Also during April 1998, an additional 1,764,706 shares were issued for a
six-month management fee valued at $45,000. These management fees were
capitalized and are being amortized over 6 months. In addition, 588,235 shares
each were issued to two officers of the Company as consideration for severance,
valued at $15,000 each. Also, 588,235 shares were issued to an individual for
a six-month management fee valued at $15,000 expensed in this quarter.
In addition, funding of the acquisition of an entity from certain related
parties was approved. With respect to the acquisition of this entity from a
related party, 30,000,000 shares of the Company were issued for 44% of this
newly formed corporation.
This transaction was recorded at par value of $3,000 due to the fact that the
entity acquired had no tangible book value. In addition, 20,000,000 shares of
the Company were issued to an entity affiliated with two individuals for their
undertaking to assume control and management of the Company. The 20,000,000
shares are subject to surrender and cancellation if certain performance
benchmarks enumerated in the agreement are not met. Due to the contingencies
related to this issuance, the stock was recorded at par value of $2,000. Also,
10,000,000 shares of the Company's stock was issued to an employee of the
Company for past performance and future commitment to the business,
and remaining an employee with the Company for certain future time periods.
Due to the contingencies related to this issuance, the stock was recorded at
part value of $1,000.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Travis Industries, Inc. (the "Company") was organized as a Colorado corporation
on June 21, 1987. The Company is in the business of printing advertising
materials and coupons and mailing them to its customers. During 1995, the
Company filed a plan of reorganization which was approved by the United States
Bankruptcy Court.
The Company generated operating revenues of approximately $583,782 with cost of
goods sold of $463,578 (or 79% of sales) during the quarter ended June 30, 1998.
This is compared to operating revenues of $601,585 and cost of goods sold of
approximately $455,222 (or 75.7% of sales) during the quarter ended June 30,
1997. The decrease in sales was attributable mainly to a decline in sales to a
major large volume customer who has been restructuring. The marginal increase
in cost of goods sold is attributable to an increase in direct labor expense
which were not passed directly through to our customers. Operating expenses
of approximately $205,564 (or 35.2% of sales) were incurred during the
quarter ended June 30, 1998, compared to $149,083 (or 24.8% of sales) in the
quarter ended June 30, 1997. The increase was largely due to non-recurring
non-cash charges for services of related parties and severance pay to
outgoing management paid with stock of approximately $57,000. The Company
had a net loss of $82,098 (or 14.1% of sales) during the quarter ended
June 30, 1998. With respect to the loss, when adjusting for certain non-
recurring items, the loss is $24,598 (or 4.2% of sales) as compared to a net
loss of $5,232 (or 0.9% of sales) during the same period of 1997. Management
anticipates that with sales from the major customer coming back together with
additional changes to be made through cost cutting, expanded marketing and
additional administrative staff for customer service, scheduling and
accounting, losses will be eliminated within the next two fiscal quarters.
The Company had liabilities in excess of assets at June 30, 1998 of $203,967.
At June 30, 1998, the Company had no material commitments for capital
expenditures.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A current report on Form 8-K was filed on approximately May 20, 1998,
containing disclosure under Item 5, Other events, of the resignation of
the Registrant's officers and board of directors, and the appointment
of a new board of directors pursuant to an agreement between the outgoing
directors and officers and Thomas P. Raabe and Fred Boethling as incoming
management. No financial statements were filed, and a summary of the
agreement was included as an exhibit to the filing.
SIGNATURES
Pursuant to the requirements 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: August 19, 1998 By /s/ Thomas P. Raabe, CEO
Principal Executive and Financial
Officer
DESCRIPTION OF CHANGE IN CONTROL AGREEMENT, INCORPORATED BY REFERENCE TO
EXHIBIT 99 OF FORM 8-K FILED MAY 20, 1998.
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0
710,000
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