AMENDED
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM N/A TO
----- -----
COMMISSION FILE NUMBER : 33-21239
TRAVEL DYNAMICS, INC.
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(Exact name of Registrant as specified in its charter)
FORMERLY KNOWN AS: GREENWAY ENVIRONMENTAL SYSTEMS, INC.
Nevada 87-0462569
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
7525 East Camelback Road, Suite 202
Scottsdale, AZ 85251
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(Address of principal executive offices)
(Zip Code)
(602) 949-9500
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(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Sections 12, 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 report(s), and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO as to filing YES X NO as
----- ----- ----- -----
to filing requirement
The number of shares outstanding at September 30, 1998: 3,230,880
(As of the filing date there are 4,040,080 shares outstanding)
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PURPOSE AND BASIS FOR AMENDMENT
This Amendment to the Company's September 30, 1998 10-QSB Report is
filed in response to notice from the Securities and Exchange Commission (SEC)
that the Company's September 30, 1998 filing did not contain adequate year 2000
disclosures. The Company has included under Management's Discussion and Analysis
of Financial Condition and Results of Operations a section on year 2000
potential problems and remedial efforts. There are no other changes included in
this amendment.
Date of Amendment, January 22, 1999.
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TRAVEL DYNAMICS, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION ----
Item 1. Financial Statements .................. Exhibit
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 4
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders........................... 9
Item 5. Other Information ..........................9
Item 6. Exhibits ..................................10
[Inapplicable Items Have Been Omitted]
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PART I. - Financial Information
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Item 1. Financial Statements. [Unaudited]
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The Financial Statements of Travel Dynamics, Inc. for the three month
and seven month periods ending September 30, 1998, are attached and incorporated
by this reference as Item 1. The accompanying consolidated financial statements
include the accounts of Travel Dynamics, L.L.C. from March 1, 1998 (date of
inception) through July 31, 1998 and the accounts of Travel Dynamics, Inc.
(Travel Dynamics) from July 31, 1998. The consolidated financial statements
include the accounts of Greenway Environmental Systems, Inc. from the date of
the acquisition for accounting purposes on September 29, 1998. These entities
are collectively referred to as Athe Company.@ All significant intercompany
transactions and balances have been eliminated in consolidation.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations.
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(a) Operations & Liquidity - The Financial Statements and
business operations of Travel Dynamics, Inc. (ATDI@ and formally known as
Greenway Environmental Systems, Inc. AGreenway@) can not be understood apart
from the Reorganization of Greenway to become known as TDI through the
acquisition of Travel Dynamics, Inc. as a wholly owned subsidiary, which
subsidiary is now known as Travel Dynamic Services, Inc. (ATDSI@).
As currently constituted, the prior public entity, Greenway, is now
known as Travel Dynamics, Inc. (TDI) which has a singular acquired operating
subsidiary primarily engaged in the purchase and retail marketing, through
independent agents, of various travel packages and operation of travel marketing
seminars. This operating company, Travel Dynamics Services, Inc. (TDSI), acts as
the sole operating division and subsidiary for the parent company, (TDI).
On September 29, 1998, a formal Reverse Acquisition Agreement was
entered by which all of the issued and outstanding shares of the prior Travel
Dynamics, Inc. were acquired by Greenway, with Greenway then changing its name
to Travel Dynamics, Inc. and the acquired subsidiary changing its name to Travel
Dynamics Services, Inc. The acquired entity then was allowed to nominate from
its members the new Board of Directors for the parent company Greenway/TDI,
which then subsequently appointed officers.
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The principal business then became the continuing acquisition and
marketing of travel packages (consisting of travel, lodging, and usually a
rental car or other concessions for entertainment) which are sold as a package
unit after acquisition and assembly by the Company through various independent
sales agents. The Company attempts to make a profit by re-selling the various
travel components as a travel package on a mark-up basis to the various
independent agents. The agents then attempt to re-sell the travel package at a
retail level for a profit.
Secondarily, the Company engages in the organization and hosting of
various travel marketing seminars related to the foregoing marketing plan on a
profit basis.
The foregoing general description of business is more particularly set
out in the recently filed 10-KSB Report for the Company which was filed as of
October 23, 1998. A copy of this filing will be made available by the Company to
any shareholder requesting the same, or to other interested parties.
In outline fashion, the Reorganization implemented the following
significant terms and provisions:
1. The Company agreed to reverse split its stock on a
nineteen and one-half to one (19.5:1) reverse
split ratio. Accordingly, of the approximately
24,159,895 issued and outstanding shares of
Greenway/TDI existing prior to the execution and
closing of the Reverse Acquisition Agreement,
there is now issued and outstanding approximately
4,040,080 reverse split shares. Of these shares,
approximately 811,042 are held by prior
shareholders of Greenway excluding management
(20%); 15,000 are held by prior management of
Greenway (.37%); approximately 400,000 are held by
Mr. Andrew Limpert or assigns (9.9%); 2,000,000
are held by the prior TDI shareholders (49.5%);
Mr. James Piccolo, the president, holds 400,000
(9.9%) and McKenenzie/Shea, a management
consultant, holds 404,008 (10%).
2. The Company changed its name of record from
Greenway Environmental Systems, Inc. to Travel
Dynamics, Inc. The acquired subsidiary corporation
has changed its name of record to Travel Dynamics
Services, Inc.
3. The following were elected as the new Board of
Directors of the company and were then appointed
to the following offices:
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(a) James Piccolo, President
(b) Brian K Service, Executive Director
(c) Thomas (Tom) Dennis
(d) Gary Davies
(e) Thomas Vergith
Other principal officers who are not directors
include:
(a) John P. Piccolo, Vice President
(b) Melinda Fehringer, Secretary & Treasurer
BIOGRAPHICAL INFORMATION, SHAREHOLDER INTEREST AND
COMPENSATION PERTAINING TO THE FOREGOING OFFICERS
AND DIRECTORS IS CONTAINED IN THE RECENTLY FILED
10-KSB REPORT OF THE COMPANY.
4. All current debts and obligations of the prior
Greenway Environmental Systems were to be paid or
otherwise discharged as of the time of the
completion of the Reverse Acquisition on or before
September 29, 1998.
5. The place of operation of the business changed to
the principal prior business location of Travel
Dynamics, Inc. in Scottsdale, AZ, with the Company
to assume, as its sole operations, the form of
business presently conducted by Travel Dynamics
principally being the composition and resale of
various travel packages as generally described
above and more particularly described and set-out
in the recent 10-KSB as filed.
In reviewing the Statement of Operations for the Company, it must be
understood that the acquired operating subsidiary is itself a start-up entity
which was organized only in March of 1998 as an Arizona limited liability
company. On July 31, 1998, the members transferred their interests for cash to
the acquired subsidiary entity, then known as Travel Dynamics, Inc. and which
has now become Travel Dynamics Services, Inc., the subsidiary company.
There is, as of the date of the unaudited consolidated Financial
Statements, combined total assets of $331,807; current liabilities of $262,728
and a total stockholder equity of $69,079 for the combined Company. For this
initial consolidated period, the combined Company had net losses of ($408,647)
which are largely attributable to start-up and reorganization costs.
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Sales for the three months ended September 30, 1998 and for the period
from March 1, 1998 (date of inception) through September 30, 1998 were $490,514.
Since operations began in July 1998, there were no comparable sales or
operations for the prior year. Cost of sales were $298,645 or 61% of sales. The
resulting gross profit was $191,869 or 39% of sales. General and administrative
expense of $292,533 includes $123,601 of expenses paid by the issuance of common
stock and stock options. Merger and reorganization expense relates to
organization costs and costs associated with the agreement with Greenway. These
expenses are non-recurring expenses. However, additional future expenses will be
incurred due to the commitment of the Company to pay cash and common stock for
the services of a consulting firm for a minimum of 24 months. The minimum annual
commitment under the agreement is approximately $120,000 of cash payments plus a
commitment to pay future concessions. The Company is also obligated to issue
common stock to the firm so as to keep their interest in the Company's common
stock equal to 10% of the outstanding common stock.
The Company is marginally capitalized to carry on its intended
activities and will be dependent upon continuing cash flows to meet operating
expenses. No assurance of financial success or the economic survival of the
enterprise can be assured during this start-up period.
For the next projected quarter ending December 31, 1998, the Company
projects a small initial net profit from its operations, though no assurance or
warranty of these projections can be made.
In all events, the Company must be considered a start up entity and
would continue to operate as a start up entity for approximately the first year
of its intended operations. As a result, reasonable or consistent projections of
future profitability based upon historical accounting and operations can not be
made at this time, nor should future earnings be projected or represented at
this time by any person, whether affiliated with the Company or not.
It should also be noted that as a start up entity, the Company will
necessarily incur certain types of start up costs, including: costs related to
the commencement of business, legal and accounting fees, initial filing fees,
and advertising and marketing fees which may not constitute ongoing fees; or, if
ongoing, may not be incurred at the same level or percentage of revenues as
experienced in the start-up period.
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Management's general discussion of operations is limited by and should
be considered within the context of the actual Financial Statements attached
hereto and incorporated as part of Item 1 above.
(b) Year 2000 Disclosure - As many of our shareholders and
other interested parties may be aware, there is significant concern that certain
computer programs and computers are not presently configured to recognize the
year 2000 or succeeding years. This defect in computer functions could have a
serious adverse impact upon your company and other industries if various
computer programs and applications cease to function or function erroneously as
we approach the year 2000.
By way of practical illustration, software programs dealing with
accounting and banking functions within the company could misfunction or cease
to function if not year 2000 compliant. The company views the year 2000, or Y2K,
compliance problems it may face to fall within three general categories:
(1) The potential impact on the company's own information
technology (IT Systems) consisting of stand alone computers and their integral
software.
(2) The potential impact of the possibility of collateral
failure or misfunction in non-IT systems due to their computer components such
as telephone systems, security systems, company vehicles, etc.
(3) The potential adverse effect upon the company from year
2000 failure among third party service and product suppliers upon which the
company depends for its core travel products and services. The third parties
would include, though are not limited to, cruise lines, travel companies,
airlines, and governmentally owned or managed travel facilities such as
airports, terminals, and docks.
The company believes it is addressing its year 2000 problems related to
its owned or leased IT systems. The company has recently hired an in-house IT
specialist who will complete reviews and updates, within the next 90 days, of
all company operating systems and program applications to insure they are Y2K
compliant or they will be upgraded to be compliant, or alternative compliant
systems or software acquired. Preliminarily, it appears that most of the
company's current operating systems were acquired recently enough to be fully
Y2K compliant.
As to non-IT systems, the company is reviewing with its telephone, fax,
and other vendors if there are any anticipated problems or updates required for
Y2K compliance. Preliminarily, the company has been told there should be no
problem with these systems.
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The company is most concerned with potential Y2K problems in its third
party product and service providers such as cruise lines, hotel companies, and
airlines from whom it purchases and assembles the travel packages it resells to
independent sales agents. It is possible uncured Y2K problems in the
telecommunications industries, or among travel providers, could substantially
impair or shut down the company's operations. Further, the company does not
believe it has or may exercise any realistic control over, or provide any
assistance to these third party providers.
While it is too preliminary to fully assess the company's cost of Y2K
compliance, preliminary indications are that the company will incur little costs
in upgrading internal IT software or systems.
The anticipated costs to the company will be primarily the salary and
other compensation paid to the IT compliance officer. Since the compliance
officer will have other corporate duties, it is difficult to estimate direct
costs, but they are believed to be less than $15,000 per anum.
The company's plans to deal with potential Y2K problems are as outlined
above. The company believes the planning is adequate to handle any internal Y2K
problems, it does not believe it can develop any realistic contingency plan to
adequately deal with potential third party Y2K problems.
PART II. - Other Information
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Item 4. Submission of Matters to a Vote of Security Holders
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Various aspects of the Reorganization described above required
shareholder consent and approval under Nevada law. The Company deemed that the
change of name of the corporation and the election of the new directors were
material items requiring shareholder approval under Nevada law. The Company also
elected to submit for shareholder ratification the general terms of the
Reorganization, including the reverse split of its shares.
Under Nevada law, the foregoing matters were allowed to be submitted
and approved by a majority of the shareholders pursuant to a Majority
Shareholder Consent Resolution without the necessity of calling or noticing a
formal shareholder meeting. Accordingly, on September 24, 1998, a Majority
Shareholder Consent Resolution was entered by shareholders of the Company (that
is the prior Greenway Environmental Systems, Inc.) holding in excess of fifty
per cent of the issued and outstanding shares. Those shareholders then approved
by Majority Shareholder Consent, with the essential terms requiring shareholder
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ratification as outlined above. A copy of this Majority Shareholder Consent is
attached hereto and incorporated by this reference as non-financial Exhibit A.
The Company then caused, in accordance with its bylaws, to be mailed to all its
shareholders of record, a Shareholder Notice.
A copy of this Shareholder Notice is attached hereto and incorporated
by this reference as non-financial Exhibit B.
Item 5. - Other Information.
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The Company knows of no other material information other than
the Reorganization and initial Financial Statements described and set out above.
For the interim period, the Company will be engaged in attempting to complete
the Reorganization and initiate and expand its principal business operations.
Item 6. Exhibits and Reports on Form 8-K.
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(1) THE COMPANY HAS NOT INCLUDED IN THIS AMENDMENT ITS
SEPTEMBER 30, 1998 FINANCIALS AS THEY WERE ORIGINALLY FILED WITH THE PRIOR
10-QSB FILING FOR THE QUARTER ENDING SEPTEMBER 30, 1998 AND WHICH FINANCIALS ARE
INCORPORATED BY THIS REFERENCE.
(2) The Company filed an 8-K Information Statement on October
14, 1998, essentially describing the terms and events of the Reorganization as
outlined above. It is not believed by the Company that the 8-K filing contains
any further or additional information other than set out in this 10-QSB and
attached exhibits. However, the Company will make available a copy of the 8-K
filing to any shareholder of record, or other interested party upon request.
..........................
OTHER EXHIBITS:
(A) Majority Shareholder Consent - PREVIOUSLY FILED, not
appended
(B) Shareholder Notice - PREVIOUSLY FILED, not appended
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SIGNATURES
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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.
TRAVEL DYNAMICS, INC.
Date: 1/26/99 By /s/ James Piccolo
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James Piccolo
President/Director
Date: 1/26/99 By /s/ Melinda Fehringer
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Melinda Fehringer
Secretary/Treasurer
Chief Financial
Officer
