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, 1998 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: $ 2,192,755.
On July 1, 1998, the Registrant had 135,054,067 shares of common voting stock
held by non-affiliates. The Aggregate market value of shares of common stock
held by non-affiliates was $2,566.027 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 July 1, 1998, the issuer had 216,184,655 shares of its $0.0001 par value
common stock outstanding.
Transitional Small Business Disclosure Format: Yes_; No X .
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 and no
other common stock purchase warrants are outstanding.
The Company has authorized 500,000,000 shares of $0.0001 par value common
stock. 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
then 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, 1998, 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. A certain amount of these shares were distri-
buted to shareholders and investors in Liberty. 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 4 to
Financial Statements - Preferred Stock).
As of March 31, 1997, the Company owed Liberty $54,650 for cash advances and
accrued but unpaid equipment lease payments. On May 1, 1997, the Company
agreed to repay $23,200 in lease payments and purchase the equipment for
$42,800 in stock and further granted Liberty the option to convert future cash
advances into common stock at $0.015 per share through May 1, 1998. During
fiscal 1998, Liberty advanced an additional $202,746 in cash. During fiscal
1998 all amounts owing Liberty including the equipment purchase price
totalling approximately $305,195 were converted into 20,346,380 restricted
shares of common stock of the Company at $0.015 per share.
On May 1, 1998, pursuant to a Change in Control Agreement, Messrs. Cayou and
Skinner resigned as officers and directors of the Company, received certain
indemnifications and other protections, assurances and severance payments and
appointed Mr. Thomas P. Raabe and Mr. Fred C. Boethling to the board of
directors. Mr. Skinner was reappointed to the board of directors as
representative of outgoing management to serve until the upcoming annual
shareholders meeting. Pursuant to the Change in Control Agreement, Mr. Raabe
and Mr. Boethling have come on board as directors and executive officers to
take the following steps: (i) attempt a turn around of current operations; and
(ii) derive a strategic corporate financial and operating plan to enhance
shareholder value through internal growth and expansion, acquisition of direct
mail and printing businesses and by pursuing acquisitions in a variety of
industries, but with a particular emphasis on the outdoor and extreme sports
business.
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. The Company
also experiences spikes in activity as a result of back to school, other
holidays and otherwise experiences drop offs at the end of these seasons.
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. The two
directors and corporate executives are on renewable six month consulting
agreements and the Company employs part-time professional business, accounting
and financial consultants.
Item 2 - Properties
The Company presently leases approximately 27,000 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. 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. Current rent is approximately $7,166.66 per month triple net, and the
total cost of the facility including utilities and maintenance is approximately
$10,000 per month.
Item 3 - Legal Proceedings
To the knowledge of management, during the fiscal year ended March 31, 1998,
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.
The Company, its current and former officers and directors are named in a
certain proceedings filed in the District Court of Jefferson County, Colorado on
May 1, 1998 by certain shareholders of the Company demanding a shareholder
meeting and requesting certain relief by the Court pertaining to voting of
shares, record date, timing of the meeting and alleging misdeeds of management
without specifying any such act in particular. This matter was fundamentally
resolved on May 15, 1998 with the Company offering and the Court ordering an
annual meeting to be held on September 1, 1998 with a record date of July 1,
1998. All other requests of the Plaintiffs were denied but the case was left
open with leave of the plantiff-shareholders to amend their complaint. In
management's opinion, this case will not be prosecuted further by the Plaintiffs
and there is no merit to any potential allegations since most potential claims
were resolved by the Court and by the resignation of former management of the
Company. None-the-less, in the event that Plaintiffs pursue the litigation,
the Company will vigorously defend.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter. The Company has scheduled its annual meeting for September 1, 1998 in
Boulder, Colorado.
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 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
Fiscal 1998
6/30/97 $ 0.025 $ 0.02
9/30/97 0.0275 0.02
12/31/97 0.0325 0.02
3/31/98 0.24 0.02
</TABLE>
As of July 1, 1998, the number of record holders of the Company's common stock
was 309. 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 $362,100 are in arrears as of March 31,
1998, on the Company's Series B Preferred Stock. (See: Note 4 to Financial
Statements).
Recent Sales of Unregistered Securities
As described elsewhere in this report, the Company issued 20, 346,380 shares of
common stock to Liberty Capital Corp, an affiliate of the Company in exchange
for cash advances, sale of certain printing equipment and cancellation of debt.
The Company deemed this an exempt transaction under the general exemption of
Section 4(2) of the Securities Act, including applicable provisions of
Regulation D, including Rule 504 promulgated thereunder, as an exempt
transaction to an accredited investor and a current shareholder and affiliate of
the Company.
Item 6. - Management's Discussion and Analvsis
Overview
The Company remains a small but durable participant in the $40 billion printing
and direct mail advertising industry, which industry is currently going through
unparalleled growth and change. New management believes that there are
heretofore unrecognized and unexploited opportunities for the Company in this
industry and is encouraged that its direct mail advertising and printing
business has a strong customer base and revenue stream despite years of
operating below break-even and without access to adequate capital resources to
remain competitive. The major reason for this is the loyalty, skill and
tenacity of the Company's management and operating personnel in Council Bluffs.
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. Management believes that a major capital and
corporate restructuring will be required in order to attract investment capital
as well as qualified operating management and acquisition opportunities.
Management is in the process of preparing a strategic plan to put its printing
operations into a wholly owned subsidiary and operate the Company in a holding
company format. Management wants to take advantage of the publicly held nature
of the Company's stock to pursue strategic acquisitions in a number of
industries. Management intends to immediately pursue private placements of debt
and/or equity through officers and directors and through investment
professionals. There are currently no acquisition or capital funding
transactions pending or contemplated and no assurances that such opportunities
will become available in the near future, nor that Management will be able to
keep present operations viable.
The Company remained burdened with substantial debt obligations and lack of
working capital to expand marketing, enhance customer service and provide
fulfilment services. The printing operations continue to operate under a break-
even revenue level. The Company has little short term liquidity and has been
forced to rely upon cash infusions and forgiveness of debt by its shareholder,
Liberty Capital Corp. to cover cash shortfalls and reduce debt service. The
principals of Liberty are no longer involved in active management and further
cash infusions from them cannot be expected. Despite these conditions, the
Company maintains a steady flow of work from long standing customers and its
operating management team has kept the business operational at slight operating
losses with marginal resources.
During the current fiscal year ended March 31, 1998, with cash provided by
Liberty, the Company paid off its pre-petition debt to the IRS and paid off its
secured creditor, Firstar Bank of Omaha, Nebraska. Also, Liberty conveyed
certain equipment valued at $42,800 to the Company, and foregave past lease
payments in exchange for common stock of the Company. Without access to
conventional bank financing, the Company has managed to remain within terms on
trade credit, but its priority and non-priority bankruptcy debt remains unpaid
and it owes state and federal employee withholding taxes for past periods which
threaten the short to medium term viability of the Company. While the Company
has substantially reduced overhead, salaries and expenses, it lacks sufficient
cash resources to conduct a marketing effort sufficient to take advantage of the
available opportunities. Additionally, due to lack of financial resources, the
Company has been unable to add certain needed equipment to modernize operations
and expand services to customers to remain competitive, and unable to make
certain major repairs to its primary printing equipment. This situation
impairs the ability to increase revenue significantly above a break-even
level.
Financial Condition
The Company had $135,024 in total assets and approximately $427,894 in total
liabilities at the end of fiscal 1998, as compared to $ 79,497and $ 403,686 at
the end of fiscal 1997, respectively. The Company had $ 65,621 in net accounts
receivable at the end of fiscal year 1998, as compared to $32,042 at the end of
fiscal year 1997. Accounts payable and accrued expenses in fiscal year 1998
were $311,355 as compared to $271,542 in fiscal year 1997. During fiscal year
1998, the Company paid off $129,764 in notes payable to insiders and bank debt
incurred from the previous fiscal year, but experienced an additional $116,539
in customer deposits. The Company remains in arrears on certain payments due
under its Chapter 11 Plan of Reorganization and is paying off an obligation for
employee withholding taxes of approximately $80,000 as of at fiscal year end
March 31, 1998. (See - Note 3 to Financial Statements).
During fiscal year ended March 31, 1998, the Company paid off its secured note
to Firstar Bank and paid off pre-petition payroll tax liabilities, but owes
approximately $65,000 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, during fiscal year ended March 31, 1998, the Company
repaid $258,796 in debt consisting of $23,200 in past due 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, 1998, were
$2,192,755, an increase of $453,813, from the previous year's revenues from
operations of $1,738,942. This change was attributable to acquisition of several
significant non-coop mail customers and the Company's ability to bring in
conventional printing work from the local market.
Gross profits from operations for the fiscal year ended March 31, 1998, were
393,414, or 17.9% of sales, compared to $ 510,892 or 29.4% of sales for the
prior year. Cost of sales at $ 1,799,341 or 82.1% of sales were up as a
percentage of sales from Fiscal 1997 at $1,228,050 or 70.6% of Sales due
primarily to a substantial increase in the use of subcontractors.
Operating expenses decreased $104,461 from 45.9% of sales in fiscal 1997 to
31.6% of sales in fiscal 1997. The majority of the decrease was due to a
decrease in the issuance of stock for services of $162,500. This was partially
offset by increases in depreciation and bad debt.
The net loss for the year was $307,676 or 14% of sales as compared to a loss of
$304,387 or 17.5% of sales for the fiscal year 1997. While the loss increased
slightly, by $3,289, this represents an improvement in relation to sales. The
improvement is due primarily to the increase in sales. Gross Margins of 17.9%
are of considerable concern to management. Management attributes the problem to
the use of subcontractors. 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, 1998, of $343,095.
This compares to a working capital deficit of $371,644 in fiscal 1997. The
deficits verify the cash starved operating conditions but improveing operating
performance of the company. Losses were again partially funded with issuance of
common stock, increases in Accounts Payable and cash advances from related
parties. During fiscal year ended March 31, 1998, the Company issued 1,500,000
shares of its common stock valued at $37,500 for exercise of an employee stock
option and 200,000 shares valued at $0.025 in lieu of salary. During fiscal year
ended March 31, 1997, the Company issued 6,500,000 shares of its common stock
for services valued at $162,500. During fiscal year ended March 31, 1998, the
Company repaid a total of $258,797 in amounts owing to 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.
Subsequent to March 31, 1998, the Company paid $30,000 in severance pay to its
outgoing executive management and $60,000 in management fees to incoming
management with 3,529,411 shares of its common stock registered under Form S-8,
valued by the board of directors at $0.0255 per share. Also, subsequent to
March 31, 1998, the Company issued 1,500,000 shares of common stock to its
operating manager as a stock bonus and 1,500,000 shares for legal services, also
registered under Form S-8. Finally, pursuant to the Change in Control
Agreement, the Company issued 10,000,000 restricted and contingent shares to its
operating manager, 20,000,000 restricted and contingent shares to an affiliate
of incoming management, and 30,000,000 restricted and contingent shares to
Aggression Sports, Inc. a newly formed company in exchange for 44% ownership in
such company. (See - Note 8 to Financial Statements)
Throughout fiscal year ended March 31, 1998, the Company continued to rely upon
its revenues and upon cash advances from related parties to pay obligations and
fund losses. The Company cannot continue to rely upon Liberty Capital to fund
these losses and obligations. The Company lacks sufficient capital or revenue
to pay for additional marketing and customer support personnel to increase
revenue. Additional capital will be necessary in the near term to reduce debt
payments, modernize operations 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 7 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.
To the best knowledge of current management, there were no disagreements with
the Company's current auditor.
PART III
The Company will file with the Securities and Exchange Commission within 120
days of its year end its definitive proxy statement for the annual meeting of
stockholders to be held on September 1, 1998. The information required by this
Part III, Items 9 through 12 are incorporated herein by reference from such
proxy statement.
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16 (a) of the Exchange Act.
Item 10. - Executive Compensation.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
Item 12. - Certain Relationships and Related Transactions.
PART IV
Item 13. - Exhibits and Reports on Form 8-K.
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, 1998.
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 from exhibits to Form 10-KSB 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 from exhibits to Form 10-KSB 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.
E-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
Description of Stock Option adopted and set forth in Consent Minutes by the
Board of Directors dated May 1, 1997.
EX-10.2
Description of Compensatory Plan adopted and set forth in Consent Minutes by the
Board of Directors dated March 9, 1998.
EX-10.3
Lease Cancellation and Equipment Sale Agreement dated May 1, 1997 with March 20,
1998 Modification Agreement and Bill of Sale.
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>
TRAVIS INDUSTRIES, INC.
FINANCIAL STATEMENTS
and
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
March 31, 1998 and 1997
F-1
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
March 31, 1998 and 1997
Table of Contents
Page
<S> <C>
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
</TABLE>
<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,
1998 and the related statements of operations, changes in stockholders'
(deficit) and cash flows for the two years ended March 31, 1998. 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, 1998 and the results of its operations, its changes in stockholders'
(deficit) and its cash flows for the two years ended March 31, 1998 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 7 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
July 2, 1998
F-3
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
BALANCE SHEET
March 31, 1998
ASSETS
<S> <C>
Current Assets
Cash $ 12,198
Accounts receivable, net of allowance for
doubtful accounts of $184,065 65,621
Other Current Assets 6,980
______________
Total Current Assets 84,799
Furniture and equipment, net of accumulated
depreciation of $287,845 (Note 2) 40,486
Other assets 9,739
______________
Total Assets $ 135,024
==============
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current Liabilities
Customer deposits $ 116,539
Accounts payable and accrued expenses (Note 3) 311,355
______________
Total Current Liabilities 427,894
Total Liabilities 427,894
==============
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;
149,655,244 shares issued and
outstanding (Note 6) 14,965
Additional paid-in capital 5,726,996
Accumulated deficit (6,744,831)
___________
Total Stockholders' (Deficit) (292,870)
___________
Total Liabilities and Stockholders' (Deficit) $ 135,024
===========
The accompanying notes are an integral part of the financial statements.
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
For the Years Ended March 31
1998 1997
<S> <C> <C>
Sales $ 2,192,755 $ 1,738,942
Cost of goods sold (exclusive of
depreciation shown separately
below) 1,799,341 1,228,050
Gross Profit 393,414 510,892
Operating Expenses
Depreciation 37,448 28,888
Bad debts 78,505 42,387
Rent 86,000 109,148
Salaries 232,863 216,632
Stock issued for services - 162,500
Other operating expenses 258,659 238,381
Total Operating Expenses 693,475 797,936
___________ __________
Net Operating (Loss) (300,061) (287,044)
___________ __________
Other Income (Expenses)
Interest and miscellaneous income 2,419 4,103
Interest (expense) (10,034) (21,446)
Total Other (7,615) (17,343)
__________ __________
Net (Loss) $ (307,676) $ (304,387)
__________ __________
Net (Loss) per Share $ nil $ nil
__________ __________
Weighted Average Shares Outstanding 138,732,054 122,933,864
The accompanying notes are an integral part of the financial statements.
F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' (DEFICIT)
From March 31, 1996 through March 31, 1998
Preferred Stock - B
Common Stock Additional Paid-in Accumulated
No./Shares Amount
No./Shares Amount Capital (Deficit) Total
<S> <C> <C>
<C> <C> <C> <C>
<C>
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
March 31, 1997 - -
- - - - (304,387)
(304,387)
_________ _______
__________ _______ ________ ___________ ________
Balance at March 31,1997 28,400,000 710,000 127,808,864
12,781 5,390,185 (6,437,155) (324,189)
Common stock issued - -
21,846,380 2,184 336,811 -
338,995
Net (loss) for the year ended
March 31, 1998 - -
- - - - (307,676)
(307,676)
_________ _______
_________ _______ ________ ___________ _______
Balance at March 31, 1998 28,400,000 $ 710,000 149,655,244 $
14,965 $ 5,726,996 $ (6,744,831) $ (292,870)
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
<TABLE>
<CAPTION>
TRAVIS INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended March 31
1998 1997
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ (307,676) $ (304,387)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities
Depreciation 37,448 28,888
Stock issued for services - 162,500
Increase in customer deposits 116,539 -
Increase in accounts payable,
accrued expenses and other 32,242 634
(Increase) decrease in accounts
receivable (33,579) 72,030
____________ __________
Net Cash (Used in) Operating
Activities (155,026) (40,335)
____________ __________
Cash Flows from Investing Activities
(Acquisition of) furniture and
equipment (42,007) -
____________ __________
Net Cash (Used in) Investing
Activities (42,007) -
____________ __________
Cash Flows from Financing Activities:
Repayment of notes payable (75,114) (14,315)
Advances from related parties - 54,650
(Repayment of) advances from related
parties (54,650) -
Proceeds from the issuance of
common stock 338,995 -
____________ __________
Net Cash Provided by Financing
Activities 209,231 40,335
____________ __________
Increase in cash 12,198 -
Cash, beginning of year - -
____________ __________
Cash, end of year $ 12,198 $ -
============ ==========
Interest paid $ 10,034 $ 21,446
============ ==========
Income taxes paid $ - $ -
============ ==========
The accompanying notes are an integral part of the financial statements.
F-7
</TABLE>
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1998 and 1997
(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 reorganization under Chapter XI of the United States Bankruptcy Court,
which was approved by the Court. 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.
(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-8
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1998 and 1997
(1) Summary of Significant accounting Policies, Continued
(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 $1,300,000 of net operating loss carryovers which
expire in years through 2013. 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, 1998 the Company had deferred tax assets of approximately
$260,000 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.
(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, 1998, the
Company had no significant concentrations of credit risk.
F-9
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1998 and 1997
(2) Furniture and Equipment
Furniture and equipment consists principally of office and printing production
equipment.
(3) Delinquent Amounts Payable
As of March 31, 1998 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 7.
(4) 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.
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 $362,100 are in arrears as of March 31,
1998. 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.
F-10
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1998 and 1997
(5) Common Stock
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 the Company's goods and services. 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. During March 1998 this option was exercised. All
of the shares were valued by the Company's Board of Directors at $.025 per
share.
During the year ended March 31, 1998, 21,846,380 shares of common stock of the
Company were issued for aggregate consideration of $338,995. Of this amount
$37,500 was cash consideration related to the exercise of the option for
1,500,000 shares of $.025 per share as disclosed above. The remainder of the
shares were issued to an affiliated entity of the officers of the Company in
consideration for debt forgiveness of approximately $258,695 plus acquisition of
certain printing equipment for $42,800. An additional 200,000 shares were
issued during the year ended March 31, 1998 to an individual in lieu of salary
valued at $.025 per share.
(6) Related Party Transactions
The Company paid or accrued $1,400 per month for certain printing equipment
owned by Liberty and used by Travis until acquired by Travis during the year
ended March 31, 1998 as described in Note 5 above.
As of March 31, 1997 the Company owed $54,650 to related parties for advances
received and for accrued equipment rental expenses. During the year ended
March 31, 1998, the Company received additional advances from related parties
totaling approximately $202,746. The advances had no written repayment terms
and did not bear interest. During the year ended March 31, 1998 the Company
issued shares of common stock as repayment of the total advances payable to
Liberty as described in Note 5 above. The shares were valued by the Company's
Board of Directors at $.015 per share. In addition, during the year ended
March 31, 1998 Liberty transferred the equipment it had been leasing to the
F-11
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1998 and 1997
(6) Related Party Transactions, Continued
Company and forgave the back payments due on the lease totaling $23,200 in
exchange for 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.
(7) 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 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.
(8) Subsequent Event
On April 30, 1998 the Company entered into an agreement where-by 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 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 to the
Company's new CEO for six months of management fees from May 1, 1998 valued at
$45,000. In addition, 588,235 shares each valued at $15,000 were issued to two
former officers of the Company as consideration for severance,
F-12
<PAGE>
TRAVIS INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
March 31, 1998 and 1997
(8) Subsequent Event, Continued
valued at $15,000 each. Also 588,235 shares were issued to the Company's New
CFO for six months of management fees from May 1, 1998 valued at $15,000. In
addition, capitalization and funding of a new entity to be jointly owned with
certain related parties was approved. With respect to the initial
capitalization of this entity 30,000,000 shares of the Company were issued for
44% of this newly formed corporation. In addition, 20,000,000 shares of the
Company were issued to a nominee of two individuals for their undertaking to
assume control and management of the Company. The 20,000,000 shares are
subject to surrender and cancellation of certain performance benchmarks
enumerated in the agreement if not met. Also the Company issuanced 10,000,000
shares of the Company's stock 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.
<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: July 15, 1998 By: /s/ THOMAS P. RAABE
Thomas P. Raabe,
President, Chief Executive Officer, and
Chairman of the Board of Directors
Date: July 15, 1998 By: /s/ FRED C. BOETHLING
Fred C. Boethling,
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: July 15, 1998 By: /s/ THOMAS P. RAABE
Thomas P. Raabe
Board Member
Date: July 15, 1998 By: /s/ FRED C. BOETHLING
Fred C. Boethling
Board Member
Date: July 15, 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.
EXHIBIT 10.1
Description of Option Agreement adopted and set forth in Consent Minutes by the
Board of Directors dated May 1, 1997.
The board granted an option to Liberty Capital Corp. to purchase up to 33.3
million shares of the Company's common stock for $0.015 per share expiring in
May 1, 1998. The options were granted in expectation of additional cash
advances to be made by Liberty to the Company and as an inducement to Liberty
to convert such advances to common stock in lieu of cash repayment.
EXHIBIT 10.2
Description of Compensatory Plan adopted and set forth in Consent Minutes by
the Board of Directors dated March 9, 1998.
The board adopted a compensatory stock plan to compensate certain consultants,
professionals and employees with stock in lieu of cash and reserved 10 Million
shares for issuance pursuant to such plan. The Board resolved to register such
shares under Form S-8, and directed that stock be issued under such plan upon
proper board resolution therefore.
The Plan provides for issuance of such stock to Thomas P. Raabe as legal
counsel, Fred C. Boethling for business consulting fees for a strategic plan
and management consulting and reserves additional shares for issuance to
employees in the future. Shares issued under the plan will be valued at a 15%
discount to the average bid price on the date of issuance on the OTC Bulletin
Board.
The Company will pay the professional and consulting services upon presentation
of invoices either in registered common stock or cash, at the option of the
Company.
EXHIBIT 10.3
LEASE CANCELLATION AND EQUIPMENT SALE AGREEMENT
This Agreement is dated effective this 1st day of May, 1997 between Liberty
Capital Corp., a Colorado corporation ("Liberty") and Travis Industries, Inc.,
a Colorado corporation ("Travis"), pertaining to cancellation of that certain
Lease Agreement effective May 1, 1995 between Travis as Lessee and Liberty as
Lessor, which Lease Agreement is incorporated herein by reference, and
pertaining to the purchase and sale of the equipment subject to such Lease
Agreement.
RECITALS
I. The Lease Agreement expired on April 30, 1997 with Travis owing $23,200
in back lease payments to Liberty.
II. Travis desires to purchase the equipment subject to the Lease Agreement
and to repay back lease payments owed Liberty with common stock of Travis.
III. Liberty is willing to accept payment for the equipment and back lease
payments with common stock of Travis.
IV. The agreed valuation of the equipment is its original cost or $60,800.
V. The parties desire to set forth herein the terms of their agreement
concerning cancellation of the Lease Agreement and purchase and sale of the
leased equipment.
AGREEMENT
IT IS THEREFORE AGREED:
1 Travis agrees to pay $23,200 in back lease payments to Liberty in the form
of unregistered Common Stock at the exchange rate of $0.015 per share, or
1,546,666 shares and Liberty agrees to accept payment for such back lease
payments in such form, without interest or penalty pursuant to the Lease
Agreement.
2 Liberty, in exchange for such payment waives and releases all claims,
rights and causes of action it may have against Travis arising under the
referenced Lease Agreement and agrees to the cancellation of such Lease
Agreement as of May 1, 1997.
3 Travis further agrees to purchase the equipment subject to the Lease
Agreement at an agreed value of $60,800 which is the original purchase price of
the equipment by Liberty pursuant to the former equipment lease agreement
purchased by Liberty from the original Lessor of the equipment.
4 The purchase price for the equipment shall be paid in the form of
unregistered and restricted common stock of Travis valued at $0.015 per share
or 4,053,333 shares.
5 Travis and Liberty agree that the equipment is hereby sold "as is" and
"where is" with no express or implied warranty of any kind except that title to
the equipment is transferred free and clear of any liens or encumbrances of any
nature and free and clear of claims of creditors of Liberty or any party
claiming by or through Liberty.
6 The equipment subject to the Lease Agreement being conveyed hereby are
listed in the form of Bill of Sale to be executed by the parties
contemporaneously with this Agreement, attached hereto as Exhibit "A" and
incorporated herein by reference.
7 The parties mutually represent and warrant to each other that the
individuals executing this Agreement have due authorization to enter into this
Agreement and to bind the respective corporations, their officers, directors
and shareholders and that by doing so, they are not violating any express or
implied agreement with any third party or agency of the United States government
or any states government, nor the corporate laws of their respective states of
incorporation, which would serve to invalidate or nullify the terms of this
Agreement.
8 The parties agree to cooperate in the preparation, execution and/or filing
of such other and further agreements, documents and make any required corporate
or other filings necessary to effectuate fully the intent of this Agreement.
This shall constitute the entire agreement of the parties hereto, all former
oral and written agreements being deemed merged into this Agreement. This
Agreement shall be binding upon the officers, directors and shareholders of
each respective party, their respective heirs, successors and assigns. This
Agreement may be executed in counterparts, each counterpart being deemed one
and the same agreement.
DATED EFFECTIVE THIS 1ST DAY OF MAY, 1997, CONFIRMED AND AGREED TO BY THE
PARTIES BY THE UNDERSIGNED DULY AUTHORIZED AGENTS FOR THE RESPECTIVE PARTIES.
TRAVIS INDUSTRIES, INC. LIBERTY CAPITAL CORP.
________________________ ______________________
Stephen E. Cayou, CEO Jeffrey R. Skinner VP/Secy
<PAGE>
BILL OF SALE
The following equipment is sold for value received by Liberty Capital Corp., a
Colorado corporation to Travis Industries, Inc., a Colorado corporation on May
1, 1997, pursuant to that certain Lease Cancellation and Equipment Sale
Agreement dated effective May 1, 1997, between the parties hereto, as
incorporated herein by reference.
1. One (1) Teaneck Graphics Fast Draw Vacuum System S/N FDVS098546.
2. One (1) W224 Webcom-D Press Model No. 205-624 w/Tint-a-Web and Spare
tinting rollers S/N# 189-66 w/Dalgrehn Dampeners, Ink Aggetator & Web Guides,
and One (1) GP Tinter Model 25B/5U.
3. One (1) Cheshire Model Labelling Machine (3 pieces) w/Model 539 head & 12'
Conveyor - Model 557-4-S/N# 1813; 525 Base
4. One (1) Baum Folder Series 420A Model No. 20x29 w/2 Right Angles, 16 Pager
S/N SE3-129 on folder; Two right angles: Model 3RA - 11x20, series 420A - S/N
SE 3-128 Model 3RA - 20x20, series 420A - S/N SE 3-127.
5. Plus all attachments, accessories, appurtenances, accessions and
substitutions.
LIBERTY CAPITAL CORP., SELLER
By: _________________________
Jeffrey R. Skinner VP/Secy
TRAVIS INDUSTRIES, INC., BUYER
By: ____________________________-
Stephen E. Cayou, CEO
<PAGE>
MODIFICATION AGREEMENT
To
LEASE CANCELLATION AND EQUIPMENT SALE AGREEMENT
Dated May 1, 1997
This Agreement modifies that Lease Cancellation and Equipment Sale Agreement
dated May 1, 1997 (the "Agreement") to correct valuation of the equipment
transferred from $60,800 to $42,800 to reflect that one piece of equipment
subject to the underlying lease referred to in the Agreement had already been
sold to the Company and the valuation at fair market value did not reflect the
sale of such equipment.
The parties to the referenced agreement agree to modify the consideration paid
for such equipment to reflect this change. All other terms of such agreement
remain in full force and effect.
Dated this 20th day of March, 1998.
TRAVIS INDUSTRIES, INC. LIBERTY CAPITAL CORP.
/S/ Stephen E. Cayou /s/ Jeffrey R. Skinner
Stephen E. Cayou, CEO Jeffrey R. Skinner, VP/Secy.
<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, 1998 AND THE RELATED
STATEMENTS OF OPERATIONS, CHANGES IN STOCKHOLDERS' (DEFICIT) AND CASH FLOWS FOR
THE TWO YEARS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 12,198
<SECURITIES> 0
<RECEIVABLES> 249,686
<ALLOWANCES> 184,065
<INVENTORY> 0
<CURRENT-ASSETS> 84,799
<PP&E> 328,331
<DEPRECIATION> 287,845
<TOTAL-ASSETS> 135,024
<CURRENT-LIABILITIES> 427,894
<BONDS> 0
0
710,000
<COMMON> 14,965
<OTHER-SE> (1,017,835)
<TOTAL-LIABILITY-AND-EQUITY> 135,024
<SALES> 2,192,755
<TOTAL-REVENUES> 2,190,336
<CGS> 1,799,341
<TOTAL-COSTS> 1,799,341
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,034
<INCOME-PRETAX> (307,676)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (307,676)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
