UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 10-K/A
Amendment No. 2
___________
| | x | ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES |
For the fiscal year ended December 31, 2008
Commission File Number 000-52703
__________________________________________________________
Kinder Travel, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 20-4939361 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
1461 A. First Avenue, Suite 360 New York, NY
(Address of principal executive offices including zip code)
(646) 845-1920
(Registrant’s telephone number, including area code)
CSC Services of Nevada, Inc., 502 E. John Street, Carson City, NV 89706
(Name and address of agent for service)
(775) 882-3072
(Telephone Number, including area code, of agent for service)
with a copy to:
Diane D. Dalmy
Attorney at Law
8965 W. Cornell Place
Lakewood, CO 80227
303.985.9324 (telephone)
303.988.6954 (facsimile)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 Par Value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No x
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceeding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o N/A x
Indicate by check mark if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer o Accelerated Filer o
Non-Accelerated Filer o Smaller Reporting Company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes o No x
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 15, 2009: $284,496
As of June 15, 2009, there were 2,650,000 shares of the registrant’s Common Stock outstanding.
EXPLANATORY NOTE:
We are filing this second amendment to our annual report on Form 10-K for the year ended December 31, 2008 to correct certain deficiencies in our original filing and subsequent amendment as noted by the SEC in a Comment Letter dated June 8, 2009. The amendments are related to a box that was not checked on the cover page and further revisions to the signature page. There were no changes to any other sections including those sections pertaining to the presentation of financial information. We have also included new Exhibits 31.1, 31.2 and 32.1 certifications by our principal executive officer and principal financial officer as required by Rule 13a-14 promulgated under the Securities Exchange Act of 1934, as amended.
No attempt has been made in this Form 10-K/A to update disclosures presented in the original Form 10-K as filed except as identified above. Furthermore, this Form 10-K/A does not reflect subsequent events occurring after the original filing. Therefore, this Form 10-K/A should be read in conjunction with our filings made with the SEC subsequent to the filing of the original Form 10-K, including any amendments to those filings.
Report on Form 10-K
PART I. | |
| Item 1. | Description of Business ……………………………………………………………………. | 4 |
| Item 1A. | Risk Factors ………………………………………………………………………………. | |
| Item 2. | Description of Property …………………………………………………………………….. | 14 |
| Item 3. | Legal Proceedings ………………………………………………………………………….. | 14 |
| Item 4. | Submission of Matters to a Vote of Security Holders ……………………………………... | 14 |
PART II. | |
| Item 5. | Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities …………………………………………………………………………… | 15 |
| Item 6. | Selected Financial Data ……………………………………………………………………. | 16 |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk …………………………….. | 18 |
| Item 8. | Financial Statements ……………………………………………………………………….. | 31 |
| Item 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure ……………………………………………………… | 31 |
| Item 9A(T) | Controls and Procedures …………………………………………………………………… | 31 |
| Item 9B. | Other Information………… ……………………………………………………………….. | 32 |
PART III. | |
| Item 10. | Directors, Executive Officers and Corporate Governance ………………………………… | 33 |
| Item 11. | Executive Compensation …………………………………………………………………... | 35 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ……………………………………………. | 37 |
| Item 13. | Certain Relationships and Related Transactions …………………………………………... | 37 |
| Item 14. | Principal Accountant Fees and Services …………………………………………………… | 37 |
| Item 15. | Exhibits …………………………………………………………………………………….. | 38 |
ITEM 1. DESCRIPTION OF BUSINESS.
Overview
Kinder Travel, Inc. is a travel agency offering a full range of travel services including corporate travel, vacations, cruise holidays, and group tours. However its primary focus is selling, marketing and providing travel services and tours to families, businesses and ministries. Kinder Travel, located in Surrey, British Columbia, Canada, commenced operations in January 2005 and expects to move rapidly towards growth and profitability due to its very unique character as a family vacation specialist and special interest tour operator.
Our primary goal is to provide travel that promotes family values, at present through our store and in the future via our website. Our website consists of an on-line booking engine geared to providing Christian families with travel options that promote unity. A full-scale version of our web-site was launched in October 2006. We spent approximately $20,000 to complete the design and launch of our website, and funded these expenses from our cash on hand.
The technology, infrastructure and operations of Kinder Travel provide consumers with a groundbreaking approach to online travel in a “family” environment aimed at providing affordable opportunities for memories that last a lifetime.
The objective for Kinder Travel is to promote family travel. We believe that traveling plays a vital role in the education of children and adults alike, while playing a pivotal role in “building childhood memories” and reaffirming or creating bonds between the traveling family members. Kinder Travel offers a range of travel and tour products that are suited and composed specifically for Christian families.
Kinder Travel aspires to become a leader in offering and operating a wide range of family oriented travel and tour products. The vast majority of travel agents do not address the very unique challenges a family faces when making their travel plans. From finding the right destination to the affordability of their family vacation, there are many considerations to contemplate before booking.
As part of our effort to provide consumers with a more personalized experience, the Company has secured the domain www.myenvoytravel.com, which will function as our principal website, to tailor to the specific travel preferences of each consumer. Consumers visiting us online at www.kindertravel.com will be redirected to our online home page at www.myenvoytravel.com. The Company launched its internet site in October 2006. It is now fully operational.
In fact, the Company is currently conducting business under the trade name “Envoy Travel” rather than Kinder Travel. The Company has decided to transact business under the name “Envoy Travel” primarily for marketing purposes as the word “kinder” means “child” in German and is too restrictive to promote the type of travel which is offered by the Company.
Kinder Travel is a boutique travel agency with a wide range of travel services available to their existing, well-established, client base. However by targeting a unique market segment that has been largely ignored, the family, the Company is well positioned for moderate growth and profitability.
Strategically placed advertising with family oriented newspapers and radio stations may generate the name recognition and the interest necessary for consumers to contact “the family travel specialists” either on the web or by email or phone.
We are not a “blank check company,” as we do not intend to participate in a reverse acquisition or merger transaction. A “blank check company” is defined by securities laws as a development stage company that has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person.
Our offices are located at 1461 A. First Avenue, Suite 360 New York, NY.
Our Corporate History
In December 2005, Kinder Travel, Inc. (the “Company”, “we”, “our”, “us “, “Kinder Travel”, the “Registrant”, and like references) was formed as a Nevada corporation. Initial operations commenced under the name Kinder Travel & Tours (“KTT”), a sole proprietorship operating out of Surrey, British Columbia, in January 2005. In November 2005, KTT incorporated under the laws of the Province of British Columbia as Kinder Travel, Inc. (“KTBC”). Pursuant to the terms of an Asset Purchase Agreement (“Asset Purchase Agreement”) executed by and between the Company and KTBC, the Company acquired all assets and liabilities of KTBC in exchange for a convertible note for USD$20,000 (the “Note”). The Note was then distributed to KTBC’s only shareholder, Dirk Holzhauer, who subsequently converted the Note into 400,000 shares of common stock. The Asset Purchase Agreement closed on January 1, 2006 (the “Closing Date”).
Business Description
Family Focused Travel
Kinder Travel has identified that Christian family travel is not represented and marketed with any special consideration or focus. Kinder Travel offers existing travel and tour products that are family-oriented as well as offering our own specially designed vacations for Christian families.
The following is a representative sample of the kind of travel packages currently available to families, and those that we expect to offer sometime in the future:
Europe Tours by Coach (future product offering)
The Company will focus on the family tour bus concept utilizing two level buses where parents and children can travel in the company of other parents and children. Child-care and related activities will be offered on the lower level. Parents can enjoy the en-route narrative, bible study or focus groups undisturbed on the upper level. City walks or museum visits can be as one group or split up among the ages.
Family Vacations (future product offering)
Transat A.T. Inc. (“Transat”) Holidays, the leading package vacation operator for Western Canada, is offering many, family oriented and specially priced all inclusive resorts in the charter market. Kinder Travel anticipates that it will soon be featuring these products by Transat Holidays and aims to become Western Canada’s largest seller of Transat Holidays for families. With Kinder Travel the customer gets more information about resorts and the added benefits and perks that will be unique to booking with Kinder Travel.
Family Life Cruises (presently available)
Learn and share, worship and praise while traveling along the Mexican Riviera. Programs include Marriage Building and Parenting presented by powerful speaking couples. Vacation Bible School and faith based daycare are provided onboard. This product is offered in participation with FamilyLife Canada online at www.familylifecruise.com.
Worldwide Religious Travel Packages (presently available)
We specialize in Globus Vacation packages, which may be viewed online at www.globusjourneys.com/faith. Globus is the world leader in escorted travel and the first choice among individuals looking for group travel year after year. With more than 75 years experience offering top quality vacations and eight travel styles, each year the Globus family of brands provides tens of thousands of people an enjoyable travel experience. Recognized for its worldwide excellence, Globus is annually selected as one of the top escorted travel companies by travel agents and Recommend Magazine.
Farm Stays in Germany, Austria and Switzerland (future product offering)
Some European farms have converted part of their housing into budget to moderate hotel style accommodations. Families will stay on the farm and will witness the operations first hand. Children will have the opportunity to learn and understand the importance of farming and will have direct contact with live farm animals.
Missionary Travel (presently available)
Kinder Travel offers missions to Mexico and other destinations in conjunction with local churches and organizations.
Devotional Tours (presently available)
There are spiritual journeys to the Holy Land of Israel and Pilgrimages to sites in Europe, like Lourdes or Camino de Santiago.
Family Adventure Travel (future product offering)
The Company will promote high-end family safaris in cooperation with Abercrombie & Kent, Butterfield & Robinson and Wildland Safaris.
Additional Products and Services
Our Christian focused, family oriented travel and tour products are complemented by the following array of products and services:
www.myenvoytravel.com
Our web-based program allows consumers to book travel from the convenience of their own home, or from wherever may be convenient for them. The same travel options offered in our store are available through our website.
We anticipate that our web-based program will open the door for families, ministries and others to more easily book vacations, thus promoting Christian based family travel.
Website Advertising
Website advertising will consist of banner ads from major vendors on the www.myenvoytravel.com website and customized ad placement for our home-based travel agents when consumers simply enter their postal code. This opportunity will allow our home based travel agents the ability to increase their revenue with advertising space that is included in their monthly fee.
Active Web Presence
The website www.myenvoytravel.com operates as a user-friendly booking engine and can be used as a research and booking tool for families planning their vacations as well as businesses and ministries.
Kinder Foundation
Kinder Travel plans to establish a charitable foundation to fund Christian faith-based initiatives in Canada and the United States and to sponsor travel opportunities for families in need. We plan to launch the Kinder Foundation once we reach a sustainable profit level. At that time, we will contribute 10% of our profits to fund such initiatives. As the Kinder Foundation is a work in progress, the types of Christian faith based initiatives that we plan to fund have not been determined.
Industry Background
The Travel Industry
Purchasing travel can be a complicated process involving a variety of destinations, dates and price limitations and the purchase of several products from different suppliers, including air, lodging and car rental providers. To facilitate the exchange of travel information, travelers and suppliers have traditionally relied on travel agents as intermediaries. Travel agents typically perform the task of research, fact-finding and price comparison on behalf of consumers. However, traditional travel agents may not always present optimal choices for consumers and are generally not available 24 hours a day seven days a week.
Travel agents depend on computer reservation systems, referred to as electronic global distribution systems, or GDS, to access flight and other travel product availability and pricing, and to book air and other travel products. GDS may not be able to provide all the information and options that are available in the marketplace due to technical limitations of their legacy mainframe computer systems and their inherent computational limitations. As such, travel agents may not be able to provide consumers with the broadest array of available travel options. Travel agents who use GDS can also increase the overall distribution cost to both consumers and suppliers. For consumers, particularly business travelers, travel agencies typically charge a fee. Traditional consumer leisure travel fees are up to $25 and corporate travel fees generally range from $25 to $50 per transaction. The GDS fees that are charged to suppliers as part of a typical travel agency booking also represent a substantial distribution expense for suppliers. A portion of these fees is typically shared with travel agents each time a booking is made using their systems.
The Online Travel Industry
The Internet empowers consumers and business travelers with a convenient and efficient way to compare and book travel options. In addition, delivery and confirmation of the travel product purchased can be made almost instantaneously through an e-mail sent to the consumer. The Internet also permits suppliers to employ targeted marketing strategies in order to optimize bookings and revenues. While online travel has been widely accepted by consumers, online travel as a percentage of total travel sales is still relatively low. Although online travel sales have been growing rapidly, we believe that a significant opportunity exists to further increase the number of consumers who purchase travel on the Internet and on www.myenvoytravel.com by using consumer and supplier-focused technologies and processes to improve the way travel is purchased and sold.
Competitive Advantage
The following attributes will give our Company a competitive advantage over other participants in the travel industry:
Target Audience
Our target audience is every consumer interested in travel, with an emphasis on those of the Christian Faith and families seeking to create those “once in a lifetime” memories. If you are an Internet booker and/or a vacation shopper, even a business client, you will receive the most comprehensive and cost effective travel options focused on promoting family unity. The support that we receive from our suppliers and the commission-based incentives that we offer to home based agents in our Kinder Vacations Network will assist in the growth of our Company.
Value for Consumers and Travel Suppliers
We will do business with a large number of suppliers, enabling us to negotiate competitive pricing allowing us to give consumers better products and greater returns on money spent.
Family Oriented Travel Chart
Our technology is set-up to provide consumers with various Christian based and family oriented travel options that suit their interests in one, easy to see chart, allowing the consumer to choose the most desirable option.
Self-Marketing
We still believe that the best advertising is word of mouth. However, for us to effectively compete with the larger in-store and web based travel companies, we will also focus on more traditional forms of advertising, along with our commercial spots and Travel Video.
User friendly, innovative approach to travel
In order to keep consumers happy, you have to be able to service their needs. We take great pride in always being just a phone call away. That is the reason that some have come to refer to us as the “Christian Travel Company.”
Technology Services
Booking Engine Services
We have distribution and marketing agreements with numerous airlines, lodging companies, rental car companies and other travel suppliers. These agreements enable us to offer our consumers what we believe to be the most comprehensive selection of low fares generally available to the public and a wide array of competitive rates on other travel products.
Technology and Operations
We believe that the design and quality of our technology positions the Company for success, and distinguishes our website and product offerings from those of our competitors. Our goal has been to build an innovative travel management tool for consumers and to build systems that will move traffic and transactions through a low-cost channel. We believe that our system will continue to support rapid growth and differentiate us from our competitors.
Our hardware and software architecture is designed to maximize scalability, availability, reliability, efficiency, flexibility, manageability and security. By implementing many competing fares, checking availability, and booking transactions directly with supplier hosts, we have constructed our booking engine using Internet technologies rather than a system based around more traditional mainframe travel systems.
We have launched several key initiatives to increase our goal of becoming known as the “Christian Travel Company”:
| · | Improve purchase efficiency through effective marketing techniques; |
| · | Improve travel offerings; and |
| · | Strong Customer Retention. |
Key initiatives to promote higher customer retention include:
| · | Continue to maintain strong supplier relationships to ensure competitive rates on commission based travel; |
| · | Invest in technologies and marketing strategies that will improve our ability to target our customers; |
| · | Continue to develop our customer care capabilities to make travel more convenient for our customers; |
| · | Capitalize on innovative travel platform; |
| · | We will continue to capitalize on our strength in developing technological and marketing enhancements that benefit both our travel suppliers and customers; |
| · | Feature certain vendors on our site that pay us higher commission structures and greater family oriented travel opportunities for our consumers; and |
| · | Direct Relationships with Major Travel Suppliers. |
Expand our Customer Base
Our goal is to increase our customer base by acquiring new customers in a cost-effective manner and increasing our market share in the rapidly growing online travel industry. We intend to achieve this objective by:
| · | Emphasizing performance-based online advertising and other targeted marketing strategies; |
| · | Cost-effectively building our brand through traditional broadcast and print channels; |
| · | Generating increased transactions by using direct mail recognition programs and encouraging infrequent bookers to purchase more travel from us using supplier incentives; and |
| · | Offering web-based corporate travel. |
Pursue New Business Opportunities
We plan to use our innovative technology and our relationships with travel suppliers to expand and enhance our growth prospects.
We believe that our approach to travel uniquely positions us to capitalize on the emerging growth of the online travel industry. Since we have an established base of vendor contracts in place, we are able to meet the demands of consumers, all of whom are always looking for an easier and more efficient way to book travel. Our business objectives, once fully implemented, will allow Kinder Travel to continue to develop its wide array of products, putting fast and easy travel tools right at their fingertips.
In order to pursue these business opportunities and our other growth initiatives, we may make strategic acquisitions of other businesses, products and technologies. The discussion of our strategy in this section reflects our current view of the ways we intend to develop our business in the future. Many of the initiatives we describe above are at an early stage, and we continue to review them in light of changing business conditions. We may change our plans, and future developments could differ from those we intend or expect to occur.
The Company also serves as ministry travel provider, and is continually seeking new ministries with which it can partner. Presently, we have agreements with only two ministries, but, through traditional forms of marketing and advertising, including word of mouth, are seeking other ministries to expand on this aspect of our business plan.
In 2005, the Company signed a revenue sharing agreement with Campus Crusade For Christ Canada (“CCCC”), giving it exclusive rights to all travel bookings in Canada. As part of this agreement, Kinder Travel set up an office within the CCCC head office and employs a full-time agent to service their travel needs.
Kinder Travel also secured the travel business of Alpha Canada, an organization which works with local churches across Canada offering a 10 week, thought-provoking course which explores the Christian faith in a relaxed, non-threatening environment.
The Company has a formal written agreement with Campus Crusade for Christ Canada. There is no written agreement with Alpha Canada.
Our Agreement with CCCC provides that CCCC will act as an independent contractor for the Company, selling and promoting the Company’s services. CCCC, per the Agreement, is entitled to receive 35% of the commissions and service fees generated for each of the services sold. The Company will provide administrative support to CCC on an as needed basis. The Agreement shall continue until terminated by either party upon 30 days written notice.
Reservations
Our website enables consumers and business travelers to research and purchase a wide range of travel products and services, including airline tickets, hotel accommodations, car rentals, cruises, and vacation packages. We have established agreements with numerous travel suppliers and offer airfares and rates from hundreds of airlines, tens of thousands of hotel properties and a large number of car rental providers. Our advanced search technology allows our customers to easily find and compare what we believe to be the widest selection of travel prices and options from not only our site, but all leading online travel providers, the largest selection of low fares generally available and the opportunity to share in the commissions that we receive. Finally, we have developed what we believe is an intuitive and easy-to-use booking process for making reservations and purchasing travel services.
Flights
Our search engine can quickly analyze over billions of possible flight and fare combinations to provide customers with the largest selection of low fares generally available to the public. Our technology and innovative display allows consumers to choose the best rate or schedule that they find and begin their booking process. Our systems allow you be in total control over your travel choices, while continuously promoting Christian, family oriented travel options.
Our vacation packages feature allows customers to choose among a variety of suppliers of vacation packages, including air and lodging, escorted tours, last-minute and other packages. Consumers can select their tour based on destination, resort name or interest preferences. Our website features online specials and answers to frequently asked questions.
Customer Services
In addition to allowing travelers to book travel transactions, we also provide a broad array of useful information and services designed to optimize the consumer’s www.myenvoytravel.com experience.
We take the Christian approach to the travel industry. No matter what the question or concern, our travel agents are standing by to assist you with all of your travel related questions. Additionally, our website is packed full of useful information that makes travel planning fun, educational and religious. Our search engine is very unique, providing resources not offered by other companies. If you are tired of wasting time doing travel research and still don’t know in which direction to go, then visit us on the internet by typing www.myenvoytravel.com.
Corporate Travel
It is our intent to launch www.myenvoytravel.com/corporate, to tailor to the ever growing demand for corporate travel solutions that provide lower transaction costs, lower average ticket price, high degree of price transparency, access to a wide choice of low fares, and a superior, automation-enhanced service experience. The Company’s business site will offer companies the same functionality and ease of use that we offer for leisure bookings, while adding functionality and service features that address the needs of both business travelers and the corporate travel managers who administer corporate travel policies.
We originally planned to launch this aspect of our business plan in March 2007. We have decided to focus on growing the personal travel services that we offer, and, in the future, launch a corporate travel website. We have not decided on a specific time frame for implementation of corporate travel services.
While offering the same features as www.myenvoytravel.com, this aspect offers internal controls meant to maximize company travel policies. Traveler profiles will be uploadable to account for individual travel needs, along with company specific requirements to maximize savings.
Corporations may be charged a flat fee of $100 per month will be charged for access, thereby providing complete access to our corporate services. We have not performed any market research to ascertain whether corporations would be willing to pay such a fee. As such, we have yet to determine if such a fee will be charged once this portion of our website is fully operational.
Some additional corporate travel features may include:
| (i) | full integration of corporate negotiated fares and rates in our booking path; |
| (ii) | travel arranger functionality, which allows personal assistants to manage travel on behalf of corporate employees; |
| (iii) | functionality designed to control travel policies in more highly managed corporate environments, including the ability to track and report reasons for employees not choosing the lowest available fare and the ability to limit availability displays to only those suppliers with which the corporation has a preferred relationship; and |
| (iv) | consolidated data reporting, which helps corporations track travel spending and support negotiations with suppliers. |
Consumer Marketing
We use various forms of cost-effective online marketing, including advertising on content sites and placement on comparative shopping tools as well as on search engine websites. Our marketing initiatives are subject to strict cost performance and measurement processes.
Our marketing efforts employ a comprehensive array of analytical tools that measure our spending effectiveness. We use these tools to ensure that we stay focused on achieving a high return on our marketing investment. We believe that focusing on performance-based marketing techniques and the financial implications of our marketing efforts is an important factor in pursuing our goal of profitable growth.
Hardware
Our focus on reducing costs per transaction keeps us focused on the efficiency of our hardware. We make extensive use of commodity hardware, which allows for flexibility and processing power capable of handling large amounts of traffic and data at low unit costs. In addition, we have built monitoring and automation tools to help us monitor, detect and fix problems in our hardware and software. This results in little downtime for maintenance and upgrades, while helping to keep costs of operating and maintaining the machines low despite increases in the number of machines. Our system’s hardware and network architecture are designed to avoid single points of failure.
Software
Our secure password system protects the consumer from any hackers, giving you complete privacy for your travel arrangements. Using your credit card on our site is also protected with an encrypted credit card processing program.
Competitors
We operate in a highly competitive market and we may not be able to compete effectively. The market for travel products is intensely competitive. We compete with a variety of companies with respect to each product or service we offer, including:
| | · | InterActiveCorp, an interactive commerce company, which owns or controls numerous travel-related enterprises, including Expedia, an online travel agency, |
| | · | Hotels.com, a representative of online lodging reservations, Hotwire, a wholesaler of airline tickets, lodging and other travel products and Ticketmaster and |
| | · | Citysearch, both of which offer destination information and tickets to attractions; |
| | · | Sabre Holdings, which owns Travelocity, an online travel agency, GetThere, a provider of online corporate travel technology and services, and the Sabre Travel Network, a GDS (or "global distribution system"); |
| | · | Orbitz, Inc., an online travel company that enables travelers to search for and purchase a broad array of travel products, including airline tickets, lodging, rental cars, cruises and vacation packages; |
| | · | Cendant, a provider of travel and vacation services, which owns or controls the following: Galileo International, a worldwide GDS; Cheap Tickets, an online travel agency; Lodging.com, an online representative of hotel rooms; Howard Johnson, Ramada Inns and other hotel franchisors; Avis and Budget car rental companies; |
| | · | Travelport, a provider of online corporate travel services and other travel-related brands; |
| | · | Expedia, Lowestfare.com and Priceline.com are our primary competitors in the referral marketing business; |
| | · | Other consolidators and wholesalers of airline tickets, lodging and other travel products, including Priceline.com and Travelweb; and |
| | · | Other local, regional, national and international traditional travel agencies servicing leisure and business travelers. |
We are a relatively small player in this market. These competitors are in general larger, have greater financial and personnel resources and have achieved greater market penetration than we have.
Based solely upon management’s knowledge of and experience in the industry and not upon any research or other verifying data from independent third parties, our agents are quoted the same rates from travel service providers as other travel agents and agencies.
Research and Development
We conduct no research and development activities.
Intellectual Property
We have not applied for any patent or trademarks in connection with our operations.
Trademarks
We have no patents or trademarks. Our success and ability to compete in the online travel industry depend, in part, upon our technology. We rely primarily on provisions in our contracts to protect our technology. We attempt to negotiate beneficial intellectual property ownership provisions in our contracts. However, laws and our actual contractual terms may not be sufficient to protect our technology from use or theft by third parties. For instance, a third-party might try to reverse engineer or otherwise obtain and use our technology without our permission and without our knowledge, allowing competitors to duplicate our products. We may have legal or contractual rights that we could assert against such illegal use, but lawsuits claiming infringement or misappropriation are complex and expensive, and the outcome would not be certain. In addition, the laws of some countries in which we may wish to sell our products may not protect software and intellectual property rights to the same extent as the laws of the United States. Moreover, the intellectual property right laws afford us no protection since we have no patents or trademarks.
Travel Agency Bond
Travel agencies in Canada are regulated by the Business Practices and Consumer Protection Authority (“BPCPA”). BPCPA required the Company to purchase a Guaranteed Investment Certificate (“GIC”) from a financial institution as a condition for licensing as a travel agency. The financial institution then issued a letter of credit to the BPCPA, which matured on December 14, 2008.
Government Regulation
We must comply with laws and regulations relating to our sales activities, including those prohibiting unfair and deceptive practices and those requiring us to register as a seller of travel products, comply with disclosure requirements and participate in state restitution funds. In addition, many of our travel suppliers are heavily regulated and we are indirectly affected by such regulation.
Travel Industry Regulation
As a travel company selling air transportation products, we are subject to regulation by federal, state and provincial agencies which have jurisdiction over economic issues affecting the sale of air travel, including consumer protection issues and competitive practices. Such agencies may have the authority to enforce economic regulations, and may assess civil penalties or challenge our operating authority. To the extent we sell travel products other than air transportation, we are subject to regulation by other federal, state or provincial agencies, which may have jurisdiction over a wide range of advertising, marketing and other consumer protection areas.
Internet Regulation
We must also comply with laws and regulations applicable to businesses engaged in online commerce. An increasing number of laws and regulations apply directly to the Internet and commercial online services. Moreover, there is currently great uncertainty whether or how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet and commercial online services. It is possible that laws and regulations may be adopted to address these and other issues. Further, the growth and development of the market for online commerce may prompt calls for more stringent consumer protection laws. New laws or different applications of existing laws would likely impose additional burdens on companies conducting business online and may decrease the growth of the Internet or commercial online services. In turn, this could decrease the demand for our products or increase our cost of doing business.
For example, in the United States, Federal legislation imposing limitations on the ability of states to impose taxes on Internet-based sales was enacted in 1998. The Internet Tax Freedom Act, which was extended by the Internet Nondiscrimination Act, exempted certain types of sales transactions conducted over the Internet from multiple or discriminatory state and local taxation through November 1, 2003. The majority of products and services we sell are already taxed: hotel rooms and car rentals at the local level, and air transportation at the federal level with state taxation preempted. Nevertheless, failure to renew this legislation could allow state and local governments to impose additional taxes on some aspects of our Internet-based sales, and these taxes could decrease the demand for our products or increase our cost of operations.
International
We may become subject to the laws and regulations of other countries, including with respect to transportation, privacy and consumer and online regulation. These may impose additional costs or other obligations on us.
Future Regulation
Federal, state, provincial or other governmental agencies may adopt new laws, regulations and policies regarding a variety of matters that could affect our business or operations. We cannot predict what other matters such agencies might consider in the future, or what the impact of such regulations might be on our business.
As of December 31, 2008, we employed two (2) individuals on a full time basis and two (2) individuals on a part time basis.
Because of the nature of our business, we do not expect to hire any new employees in the foreseeable future, but anticipate that we will be conducting most of our business through agreements with consultants and third parties.
Reporting Currency
All of the Company’s transactions are denominated in Canadian currency so the Company has adopted the Canadian dollar as its functional and reporting currency. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “General and Administrative expenses” in the statement of operations, which amounts were not material during the year ended December 31, 2008.
The Department of Corporation Finance in its advisory letter titled International Financial Reporting and Disclosure Issues, dated May 1, 2001 has stated, “Regulation S-X presumes that a US-incorporated registrant will present its financial statements in US dollars. In rare instances, the staff has not objected to the use of a different reporting currency. Those instances have been limited to situations where the US-incorporated registrant had little or no assets and operations in the US, substantially all the operations were conducted in a single functional currency other than the US dollar, and the reporting currency selected was the same as the functional currency. In these circumstances, reporting in the foreign currency would produce little or no foreign currency translation effects under FASB Statement No. 52.”
First, the Company has its only facilities located Canada, and therefore has no assets or operations in the US. Second, all operations of the Company are conducted only in Canadian currency. Third, the reporting currency is in Canadian dollars which is the same currency that all operations were conducted in. Therefore, reporting in Canadian dollars would produce little or no foreign currency translation effects under FASB Statement No. 52.
ITEM 2. DESCRIPTION OF PROPERTY.
We lease our corporate headquarters at 20385 64th Avenue , Langley , BC . The office space is an area of approximately 300 square feet demised from the rest of the general office on the 2nd floor. This space includes utilities and a shared receptionist is provided free-of-charge as part of our revenue share agreement with CCCC. The property is generic office space that meets the Company’s executive and administrative requirements providing ample space for our executives to run the Company, as well as space to expand and hire new employees.
ITEM 3. LEGAL PROCEEDINGS.
We are not a party to any pending legal proceeding. No federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS.
None.
PART II.
ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Our shares of common stock commenced trading on the OTC Bulletin Board (“OTCBB”) on July 3, 2007. Prior to that date, our common stock was not listed for trading. The OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter equity securities. An OTCBB equity security generally is any equity that is not listed or traded on NASDAQ or a national securities exchange. The reported high and low bid and ask prices for the common stock are shown below for the period from July 3, 2007 through December 31, 2008.
| Fiscal Year 2008 | | High | | Low | |
| First Quarter | | | 0.30 | | | 0.30 | |
| Second Quarter | | | 0.30 | | | 0.30 | |
| Third Quarter | | | 0.30 | | | 0.30 | |
| Fourth Quarter | | | 0.30 | | | 0.30 | |
| Fiscal Year 2007 | | High | | Low | |
| Third Quarter | | | 0.50 | | | 0.50 | |
| Fourth Quarter | | | 0.50 | | | 0.50 | |
Our common stock is subject to rules adopted by the Commission regulating broker dealer practices in connection with transactions in “penny stocks.” Those disclosure rules applicable to “penny stocks” require a broker dealer, prior to a transaction in a “penny stock” not otherwise exempt from the rules, to deliver a standardized list disclosure document prepared by the Securities and Exchange Commission. That disclosure document advises an investor that investment in “penny stocks” can be very risky and that the investor’s salesperson or broker is not an impartial advisor but rather paid to sell the shares. The disclosure contains further warnings for the investor to exercise caution in connection with an investment in “penny stocks,” to independently investigate the security, as well as the salesperson with whom the investor is working and to understand the risky nature of an investment in this security. The broker dealer must also provide the customer with certain other information and must make a special written determination that the “penny stock” is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Further, the rules require that, following the proposed transaction, the broker provide the customer with monthly account statements containing market information about the prices of the securities.
These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. Many brokers may be unwilling to engage in transactions in our common stock because of the added disclosure requirements, thereby making it more difficult for stockholders to dispose of their shares.
(b) Holders. At December 31, 2008, there were 37 record holders of 2,400,000 shares of the Company’s Common Stock.
(c) Dividends. The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant’s business.
Dividends
We have not declared or paid cash dividends on our common stock since our inception. We intend to retain all future earnings, if any, to fund the operation of our business, and, therefore, do not anticipate paying dividends in the foreseeable future. Future cash dividends, if any, will be determined by our board of directors.
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1. We would not be able to pay our debts as they become due in the usual course of business; or
2. Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
Securities Authorized for Issuance Under Equity Compensation Plans
We have no equity compensation program including no stock option plan and none are planned for the foreseeable future.
Issuer Purchases of Equity Securities
There were no stock repurchases during the fourth quarter of 2008.
Recent Sales of Unregistered Securities
The were no sales of unregistered securities during the period covered by this report.
ITEM 6. SELECTED FINANCIAL DATA
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS
A. Management’s Discussion and Analysis.
The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Special cautionary statement concerning forward-looking statements” and “Risk factors” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. The operating results for the periods presented were not significantly affected by inflation.
REVENUE
Our net revenue amounted to $191,878 for the year ended December 31, 2008 compared to $195,580 for the year ended December 31, 2007.
All revenues were derived from the sale of travel and travel related products. Fluctuations in our revenues is primarily the result of the nature of the business model we operate. The Company can neither predict, assess nor prevent fluctuation. We attempt to offer products and services at competitive prices. Our travel products and services are aimed at those interested in purchasing Christian based, family vacations. Because of the unpredictable nature of fluctuations, we do not attribute fluctuations to any particular item or event. Our business model is to respond to fluctuation with immediate change. We do not account for or analyze the fluctuations as we do not believe it to be a prudent use of resources, given our business model.
OPERATING EXPENSES
Our total operating expenses for the year ended December 31, 2008 were $182,556 compared to $159,756 in the prior year. Expenses consisted primarily of general operating expenses and professional fees associated with our SEC filing and attempt to become listed on the OTCBB.
NET LOSS
Primarily as a result of the foregoing, we had a net loss of $45,296 for the year ended December 31, 2008 compared to a net loss of $7,150 in the prior year. Our net loss for the year ended December 31, 2008 is attributed to an increase of Cost of Sales to 28% from 22% the prior year.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2008 our cash balance was $21,220. This represents a slight increase in our financial position since December 31, 2007 when we reported cash of $16,275.
Plan Of Operations for the Next 12 Months
Our plan of operations for the next twelve months is to proceed with the implementation of our business plan. We will strive to launch all aspects of our operations. Primarily, we will focus on generating revenue from our website. Continuing operations will always focus on ways to increase our marketing sales force. We may require up to $200,000 in additional financing to expand operations through acquisitions of other small travel agencies. Our marketing effort will be directed at expanding our representative network through newspaper advertising, fax solicitation of existing clients, personal contact, and customized cruise packages.
Critical Accounting Policies
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make a wide variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (ii) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increases, these judgments become even more subjective and complex. The most significant accounting policies that are most important to the portrayal of our current financial condition and results of operations are as follows:
Revenue Recognition
The Company has various methods by which they receive revenue. At present, most revenue is derived substantially from the following sources:
| · | Supplier Based Commissions: The Company receives commissions based upon contractual arrangements with leading travel providers. |
| · | Consumer Service Fees: Upfront fees charged for each booking regardless of the type of travel. |
Revenue is recognized as follows for the services discussed above:
| · | for service fees, when reservations are made and secured by a credit card or other form of payment; |
| · | for air travel, cruises and package tours, when commissions are received from the travel supplier; and |
| · | for all travel such as hotel bookings and rental cars, when commissions are received from the travel supplier. |
Allowance for Doubtful Accounts
Management makes judgments, based on its established aging policy, historical experience and future expectations, as to the ability to collect the Company’s accounts receivable. An allowance for doubtful accounts has been established. The allowance for doubtful accounts is used to reduce gross trade receivables to their estimated net realizable value. When evaluating the adequacy of the allowance for doubtful accounts, management analyzes amounts based upon an aging schedule, historical bad debt experience, and current trends.
We file electronically with the Securities and Exchange Commission our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. You may obtain a free copy of our reports and amendments to those reports on the day of filing with the SEC by going to http://www.sec.gov.
Off-Balance Sheet Arrangements
The Company has no material transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have or are reasonably likely to have a material current or future impact on its financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.
ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 8. FINANCIAL STATEMENTS.
KINDER TRAVEL, INC.
TABLE OF CONTENTS
__________
| Report of Independent Registered Public Accounting Firm | |
| Audited Financial Statements | |
| Balance Sheets as of December 31, 2008 and 2007 | |
| Statements of Operations for the years ended December 31, 2008 and 2007 | |
| Statements of Stockholders’ Deficit for the years ended December 31, 2008 and 2007 | |
| Statements of Cash Flows for the years ended December 31, 2008 and 2007 | |
| Notes to Financial Statements | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Kinder Travel, Inc.
Langley, BC CANADA
We have audited the accompanying balance sheets of Kinder Travel, Inc. as of December 31, 2008, and the related statements of operations, stockholders' deficit and of cash flows for the year then ended. These financial statements are the responsibility of the management of Kinder Travel, Inc. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements for the period of December 31, 2007 were audited by other auditors whose reports expressed unqualified opinions on those statements.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide 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 Kinder Travel, Inc. as of December 31, 2008, and the results of its operations and its cash flows the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that Kinder Travel, Inc. will continue as a going concern. As discussed in Note 7 to the financial statements, the Company suffered recurring losses from operations and has a net stockholders’ deficit. These factors and others raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are described in Note 7 to the financial statements. The financial statements do not include any adjustments that might reflect these uncertainties.
/s/ M&K CPAS, PLLC
Houston, Texas
April 10, 2009
www.mkacpas.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Kinder Travel Inc.
We have audited the accompanying balance sheet of Kinder Travel Inc. as of December 31, 2007, and the related statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2007 and 2006. 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 audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 audits provide 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 Kinder Travel Inc. as of December 31, 2007 and the results of its operations and its cash flows for the years ended December 31, 2007 and 2006, in conformity with accounting principles generally accepted in the United States of America.
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 and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Moore & Associates, Chartered
Moore & Associates Chartered
Las Vegas, Nevada
February 27, 2008
2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
| Kinder Travel Inc. | |
| Balance Sheets | |
| (In Canadian Dollars) | |
| | | | | | | |
| | | December 31, 2008 | | | December 31, 2007 | |
| ASSETS | | | | | | |
| | | | | | |
| Current Assets | | | | | | |
| Cash | | | $21,220 | | | | $16,275 | |
| Accounts receivable, net of allowance for doubtful accounts | | | 0 | | | | 10,941 | |
| Prepaid Expenses | | | 0 | | | | 4,464 | |
| Total Current Assets | | | $21,220 | | | | $31,680 | |
| | | | | | | | | |
| Other Assets | | | | | | | | |
| Vehicles and Equipment, net of accumulated depreciation | | | $21,957 | | | | $24,489 | |
| Website, net of accumulated amortization | | | 1,777 | | | | 4,146 | |
| Travel Agency Bond | | | 15,000 | | | | 15,000 | |
| Total Other Assets | | | 38,734 | | | | 43,635 | |
| TOTAL ASSETS | | | $59,954 | | | | $75,315 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts payable | | | $37,157 | | | | $29,105 | |
| Accrued liabilities | | | 4,286 | | | | 4,446 | |
| Payroll Liabilities | | | 2,085 | | | | 1,757 | |
| Sales Tax Payable | | | 105 | | | | 356 | |
| Customer Prepayments | | | 310 | | | | - | |
| Shareholders' Loans | | | 31,273 | | | | 8,529 | |
| Current Portion of long-term debt | | | 1,136 | | | | 1,050 | |
| Total Current Liabilities | | | $76,352 | | | | $45,243 | |
| | | | | | | | | |
| Long Term Liabilities | | | | | | | | |
| Loan payable | | | 19,282 | | | | 20,418 | |
| Total Long Term Liabilities | | | 19,282 | | | | 20,418 | |
| TOTAL LIABILITIES | | | $95,634 | | | | $65,661 | |
| | | | | | | | | |
| STOCKHOLDERS’ EQUITY(DEFICIT) | | | | | | | | |
| Capital Stock | | | | | | | | |
| Preferred Stock | | | | | | | | |
| Authorized: 10,000,000 shares with $0.001 par value. Issued: Nil | | | - | | | | - | |
| Common Stock | | | | | | | | |
| Authorized: 65,000,000 common shares with $0.001 par value | | | | | | | | |
| | | 2,691 | | | | 2,691 | |
| Additional paid-in capital | | | 130,109 | | | | 128,539 | |
| Accumulated Other Comprehensive Income | | | (855 | ) | | | 753 | |
| Retained Earnings | | | (167,625 | ) | | | (122,329 | ) |
| TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | | | (35,680 | ) | | | 9,654 | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | | | $59,954 | | | | $75,315 | |
| | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financials statements. | |
| |
| Statements of Operations | |
| (In Canadian Dollars) | |
| | |
| | | | | | | |
| | | For the | | | For the | |
| | | Year Ended | | | Year Ended | |
| | | December 31, 2008 | | | December 31, 2007 | |
| | | | | | | |
| Sales | | | $191,878 | | | | $195,580 | |
| Cost of Sales | | | 54,619 | | | | 42,974 | |
| Gross Margin | | | 137,260 | | | | 152,606 | |
| | | | | | | | | |
| General and Administrative Expenses | | | | | | | | |
| Automobile Expense | | | 14,647 | | | | 15,486 | |
| Depreciation and Amortization | | | 4,900 | | | | 12,561 | |
| General and Administrative | | | 62,910 | | | | 61,748 | |
| Payroll Expenses | | | 86,246 | | | | 57,026 | |
| Professional Fees | | | 13,853 | | | | 12,935 | |
| Total Expenses | | | 182,556 | | | | 159,756 | |
| Profit (Loss) from Operations | | | (45,296 | ) | | | (7,150 | ) |
| Provision for Income Tax | | | 0 | | | | 0 | |
| Net Profit (Loss) | | | $(45,296 | ) | | | $(7,150 | ) |
| | | | | | | | | |
| Comprehensive Loss | | | | | | | | |
| Net Loss | | | (45,296 | ) | | | (7,150 | ) |
| Foreign currency translation adjustment | | | (1,608 | ) | | | 753 | |
| Total Comprehensive Loss | | | $(46,904 | ) | | | $(6,397 | ) |
| | | | $(0.02 | ) | | | $(0.00 | ) |
| Gain (Loss) per Share – Basic and Diluted |
| | | | 2,400,000 | | | | 2,400,000 | |
| Weighted Average Shares Outstanding |
| | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financials statements. | |
| Kinder Travel Inc. | |
| Statements of Stockholders' Equity | |
| (In Canadian Dollars) | |
| | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Additional | | | Other | | | Retained | | | Total | |
| | | Common Stock | | | Paid-in | | | Comprehensive | | | Earnings | | | Stockholders’ | |
| | | Shares | | | Amount | | | Capital | | | Income | | | (Deficit) | | | Deficiency | |
| Balance - December 31, 2006 | | | 2,400,000 | | | | 2,691 | | | | 128,539 | | | | | | | (115,179 | ) | | | 16,050 | |
| Loss for the period | | | | | | | | | | | | | | | | | (7,150)Bottom of Form | | | | (7,150 | ) |
| Foreign currency translation adjustment | | | | | | | | | | | | | | | 753 | | | | | | | | 753 | |
| Balance - December 31, 2007 | | | 2,400,000 | | | | 2,691 | | | | 128,539 | | | | 753 | | | | (122,329 | ) | | | 9,654 | |
| Loss for the period | | | | | | | | | | | | | | | | | | | (45,296 | ) | | | (45,296 | ) |
| Imputed interest on shareholder loans | | | | | | | | | | | 1,570 | | | | | | | | | | | | 1,570 | |
| Foreign currency translation adjustment | | | | | | | | | | | | | | | (1,608 | ) | | | | | | | (1,608 | ) |
| Balance - December 31, 2008 | | | 2,400,000 | | | | 2,691 | | | | 130,109 | | | | (855 | ) | | | (167,625 | ) | | | (35,680 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financials statements. | |
| |
| Statements of Cash Flow | |
| (In Canadian Dollars) | |
| | |
| | | For the Year Ended December 31,2008 | | | For the Year Ended December 31,2007 | |
| Operating | | | | | | |
| Net Loss | | | $(45,296 | ) | | | $(7,150 | ) |
| Adjustments to reconcile net income (loss) to net cash flows used in operating activities | | | | | | | | |
| Depreciation and Amortization | | | 4,900 | | | | 12,561 | |
| Imputed interest on shareholder loans | | | 1,570 | | | | - | |
| Changes in operating assets and liabilities | | | | | | | | |
| Accounts receivable | | | 10,941 | | | | 401 | |
| Prepaid Expenses | | | 4,464 | | | | (4,464 | ) |
| Accounts payable | | | 8,052 | | | | 8,381 | |
| Accrued liabilities | | | (160 | ) | | | 4,446 | |
| Payroll Liabilities | | | 328 | | | | (26,558 | ) |
| Sales Tax Payable | | | (251 | ) | | | 1,068 | |
| Customer Prepayments | | | 310 | | | | (5,493 | ) |
| Net cash flows from (used for) operations | | | $(15,142 | ) | | | $(16,808 | ) |
| | | | | | | | | |
| Investing | | | | | | | | |
| Purchase of Vehicles and Equipment | | | - | | | | - | |
| Net cash flows from investing activities | | | $0 | | | | $0 | |
| | | | | | | | | |
| Financing | | | | | | | | |
| Borrowings on debt | | | 64,912 | | | | | |
| Payments on debt | | | (43,218 | ) | | | 5,506 | |
| Net cash flows from financing activities | | | 21,694 | | | | 5,506 | |
| | | | | | | | | |
| Effect of exchange rate changes | | | (1,608 | ) | | | 753 | |
| | | | | | | | | |
| Change in Cash | | | 4,945 | | | | (10,549 | ) |
| Cash - Beginning | | | 16,275 | | | | 26,824 | |
| Cash - Ending | | | $21,220 | | | | $16,275 | |
| | | | | | | | | |
| Supplemental Cash Flow Information | | | | | | | | |
| Cash paid for: | | | | | | | | |
| Income Taxes | | | $- | | | | $- | |
| Interest | | | $- | | | | $- | |
| | | | | | | | | |
| The accompanying notes are an integral part of these consolidated financials statements. | |
KINDER TRAVEL INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2008
(In Canadian Dollars)
Note 1 - The Company and Significant Accounting Policies
The Company
Kinder Travel, Inc. (the "Company") was incorporated under the laws of the state of Nevada. The Company is a full-service travel agency in Surrey, British Columbia, offering the full range of travel services including corporate travel, vacations, cruise holidays, and group tours. However its primary focus is selling, marketing and providing in-store and web-based travel services and tours to families, businesses and ministries.
Effective January 1, 2006, the Company acquired all of the assets and liabilities of a British Columbia corporation, Kinder Travel & Tours, Inc. ("KTT"). Prior to the acquisition, the Company had limited operations and expenses were primarily related to becoming incorporated. Subsequent to the acquisition, the Company adopted the business plan of KTT and began operating a travel agency.
Cash and Cash Equivalents
Cash consists of funds in checking accounts held by financial institutions in Canada. For purposes of reporting cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. There are no cash equivalents at December 31, 2008 and 2007.
Concentrations
During the fiscal year 2008 and 2007, two customers represented more than 10% of the Company’s total revenues. The Company believes it has strong relationships with both of these customers.
Accounts Receivable
Accounts receivable are recorded at their principal amounts and are generally unsecured. Management considers all amounts over 60 days to be past due. Periodically management reviews receivables and establishes an allowance for uncollectible accounts based on historical collection and current economic conditions. There were no receivables and no uncollectible accounts as of December 31, 2008 compared to $10,941 as of December 31, 2007. The difference is attributable to significantly reduced sales in December 2008 compared to December 2007 as well as increased collection efforts during the year ended December 31, 2008 as compared to collection efforts in the prior year.
Vehicles and Equipment
Vehicles and equipment with a life of more than one year and a cost in excess of $500 are capitalized and depreciated. Depreciation is computed using the straight line method over the estimated useful lives of the assets. Useful lives range from 4 - -5 years. The accumulated depreciation as of December 31, 2008 and 2007 is $38,265 and $33,363 respectively.
Travel Agency Bond
Travel agencies in Canada are regulated by the Business Practices and Consumer Protection Authority ("BPCPA"). BPCPA required the Company to purchase a Guaranteed Investment Certificate ("GIC") from a financial institution as a condition for licensing as a travel agency. The financial institution then issued a letter of credit to the BPCPA.
Fair Value of Financial Statements
The fair value of the cash, accounts receivable, accounts payable and accrued expenses, and the demand loan payable approximate the stated carrying value due to their expected short-term nature. The fair value of long-term debt approximates stated carrying value due to market interest rates for the term of the debt.
Advertising Expenses
Advertising costs are expensed as incurred. Advertising costs were $1,069 for the year ended December 31, 2008.
Revenue Recognition
Revenue is recognized when it is realized or realizable and earned. The Company considers revenue realized or realizable and earned when persuasive evidence of an arrangement exists, services have been provided, and collectability is reasonably assured. The Company recognizes supplier based commissions when services are provided in accordance with the contractual arrangements with the leading travel providers. The Company recognizes consumer service fee when the consumer books travel arrangements and it is secured by payment as services are provided and collectibility is reasonably assured.
Cancellation Policy
The cost of airfare portion of the Company's travel packages is non-refundable to customers. Other cancellation fees imposed by the relevant Travel Supplier(s) (for example, hotel cancellation penalties) must be paid by the customer when incurred. 100% of the travel package price is forfeited by the customer for cancellations not made before 24 hours prior to the departure date. No refunds are given to customers for unused or partially used package components. There were no customer cancellations in 2008.
Income (Loss) per Share
Basic and diluted net loss per share calculations are calculated on the basis of the weighted average number of common shares outstanding during the year. The per share amounts include the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share is the same due to the anti dilutive nature of potential common stock equivalents. As of December 31, 2008 and 2007, the loss per share was approximately $0.02 and $0.00 respectively
Website Development Costs
The Company's website was launched in 2006 and website development costs were accounted for in accordance with Emerging Issues Task Force 00-2, "Accounting for Web Site Development Costs," with applicable guidance from AICPA Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, will be capitalized and amortized, on a straight-line basis over the estimated useful life, if management believes such costs are significant. Maintenance and enhancement costs will be expensed as incurred unless such costs relate to substantial upgrades and enhancements to the website that result in added functionality, in which case the costs will be capitalized and amortized on a straight-line basis over the estimated useful life, if management believes such costs are significant. There were no capitalizable costs incurred in 2008. As of December 31, 2008, current year amortization was $2,370 and accumulated amortization was $5,331
Reporting Currency
All of the Company's operations are denominated in Canadian currency so the Company has adopted the Canadian dollar as its functional and reporting currency. All transactions initiated in other currencies are re-measured into the reporting currency as follows:
| · | Assets and liabilities at the rate of exchange in effect at the balance sheet date, |
| · | Equity at historical rates, and |
| · | Revenue and expense items at the prevailing rate on the date of the transaction. |
Translation adjustments resulting from translation of assets and liabilities are accumulated as a separate component of shareholders’ equity and reported as a component of comprehensive income or loss. The net gain (loss) from these foreign exchange translations in 2008 was $ (1,608)
Transaction gains and losses that arise from the effect of exchange rate fluctuations on revenue and expenses are included in "general and administrative expenses" in the statement of operations. The net gain (loss) to the company of these foreign exchange transactions in 2008 was $ (14).
Estimates
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States 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 these financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from these estimates.
Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method, deferred assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be recoverable against future taxable income.
Stock-Based Compensation
The Company accounts for stock-based employee compensation arrangements using the fair value method in accordance with the provisions of Statement of Financial Accounting Standards No.123(R) or SFAS No. 123(R), Share-Based Payments, and Staff Accounting Bulletin No. 107, or SAB 107, Share-Based Payments. The company accounts for the stock options issued to non-employees in accordance with the provisions of Statement of Financial Accounting Standards No. 123, or SFAS No. 123, Accounting for Stock-Based Compensation, and Emerging Issues Task Force No. 96-18, Accounting for Equity Instruments with Variable Terms That Are Issued for Consideration other Than Employee Services Under FASB Statement No. 123. The fair value of stock options and warrants granted to employees and non-employees is determined using the Black-Scholes option pricing model. The Company has adopted SFAS 123(R) and applied it in the period presented. As of December 31, 2008, there are no options outstanding.
New Accounting Pronouncements
In February 2007, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards (“SFAS”) 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 allows the Company to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS 159 is not expected to have a material impact on the Company’s financial position, results of operation or cash flows.
In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements”. This Statement amends ARB 51 to establish accounting and reporting standards for the non-controlling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The adoption of SFAS 160 is not expected to have a material impact on the Company’s financial position, results of operation or cash flows.
In December 2007, the FASB issued SFAS 141R, Business Combinations. SFAS 141R replaces SFAS 141. The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. The statement will apply prospectively to business combinations occurring in the Company’s fiscal year beginning October 1, 2009. We are evaluating the impact adopting SFAS 141R will have on our financial statements.
Reclassifications
Certain reclassifications have been made to the prior period’s financial statements to conform to current period’s presentation.
Note 2 - Property and Equipment
Property and equipment are stated at cost. Depreciation of property and equipment is computed under the straight line method over the estimated useful life of the assets. Depreciation expense for the years ended December 31, 2008 and 2007 was $4,900 and $12,561, respectively.
Property and equipment consisted of the following:
| | 2008 | 2007 |
| Computer and vehicles | $ 54,891 | $ 54,891 |
| Furniture and fixtures | 7,108 | 7,108 |
| | 61,999 | 61,999 |
| Accumulated depreciation | (38,265) | (33,363) |
| | $ 23,734 | $ 28,636 |
Note 3 - Long-Term Debt
The Company has a note payable to a bank. The note is secured by a vehicle, bears interest at 7.89% per year and requires monthly payments of $226 until June 2, 2010, at which time all remaining principal is due in full.
Annual principal payments for the years ending December 31 are as follows:
| 2009 | 1,136 |
| 2010 | 19,282 |
| | $ 23,578 |
Note 4 – Shareholder Loans
As of December 31, 2008 and 2007, the total due to shareholders was $31,273 and $8,529 respectively. These loans are unsecured, non-interest bearing, and have no specific repayment terms. Imputed interest of $1,570 was calculated at a rate of 7.89% and recorded in additional paid-in capital at December 31, 2008
Note 5 - Income Taxes
The Company is liable for US Federal taxes. As of December 31, 2008, the Company did not have any income for tax purposes and therefore, no tax liability or expense has been included in these consolidated financial statements.
The Company has accumulated net operating loss carry-forwards for tax purposes of approximately $168,000 that may be available to offset future taxable income. These operating loss carry-forwards begin to expire in 2027. In accordance with the Tax Reform Act of 1986, annual utilization of the Company’s net operating loss carry-forwards may be limited if a cumulative change in ownership of more than 50% is deemed to occur within any three-year period.
The deferred tax asset associated with the operating loss carry-forward is approximately $58,000. The Company has provided a valuation allowance against the deferred tax asset.
Note 6 – Related Party Transactions
As of December 31, 2008 and 2007 there are no related party transactions other than the shareholder loans.
Note 7 - Uncertainty as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through a private placement and public offering of its common stock. These plans, if successful, will mitigate the factors which 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.
Note 8 - Subsequent events
There were no subsequent events expected to have a material effect on the Company's accounting policies or financial reporting.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
On February 12, 2009, Kinder Travel Inc., a Nevada corporation (the “Registrant”), dismissed Moore & Associates, CHTD (“Moore”) as its independent registered public accounting firm. The dismissal was approved by the Registrant’s Board of Directors. During the fiscal year ended December 31, 2008 and the subsequent interim periods up through the date of termination, there were no disagreements with Moore on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Moore, would have caused Moore to make reference thereto in its report on the Registrants financial statements for such years.
Further, there were no reportable events as described in Item 304(a)(1)(iv)(B) of Regulation SK occurring within the Registrant's two most recent fiscal years and the subsequent interim periods up through the date of termination. Other than as set forth below, the report issued by Moore with respect to the Registrant’s financial statements did not contain any adverse or disclaimer of opinion, and were not modified as to uncertainty, scope or accounting principals.
The audit report of Moore for the financial statements of the Registrant as of December 31, 2007 contained a separate paragraph stating:
“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 and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 7. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.”
During the Registrant's two most recent fiscal years and the subsequent interim periods up through the date of this Report, neither the Registrant nor anyone on its behalf consulted with any other independent auditor regarding the application of accounting principles to a specific, completed or contemplated transaction, or the type of audit opinion that might be rendered on the Registrant's financial statements. Further, no other independent auditor has provided written or oral advice to the Registrant that was an important factor considered by the Registrant in reaching a decision as to any accounting, auditing or financial reporting issues during the period that Moore served as the Registrant’s independent auditor.
On February 12, 2009, the Board of Directors engaged M&K CPAS, PLLC (“M&K”) as the Registrant’s independent registered public accounting firm.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. To address the material weaknesses, we performed additional analysis and other post-closing procedures in an effort to ensure our consolidated financial statements included in this annual report have been prepared in accordance with generally accepted accounting principles. Accordingly, management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses:
| 1. | As of December 31, 2008, we did not maintain effective controls over the control environment. Specifically we have not developed and effectively communicated to our employees its accounting policies and procedures. This has resulted in inconsistent practices. Further, the Board of Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-B. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. |
| 2. | As of December 31, 2008, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
| 3. | As of December 31, 2008, we did not maintain effective controls over receivables and accrued liabilities. Specifically, controls were not designed and in place to ensure that accrued liabilities were properly recorded and that receivables were evaluated for collectibility. Accordingly, management has determined that this control deficiency constitutes a material weakness. |
Because of these material weaknesses, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2008, based on the criteria established in "Internal Control-Integrated Framework" issued by the COSO.
Changes in Internal Control over Financial Reporting
There have been no significant changes in our internal controls over financial reporting that occurred during the year ended December 31, 2008 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
Attestation Report of the Registered Public Accounting Firm
This annual report does not include an attestation report of our company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management's report in this annual report.
ITEM 9B. OTHER INFORMATION.
None. Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
Identify of directors and executive officers
Our current directors and executive officers are as follows:
| | |
| Dirk Holzhauer | | Director Chief Executive Officer, President, Treasurer, Secretary |
| | | |
Term of Office
All of our directors hold office until the next annual general meeting of the shareholders or until their successors are elected and qualified. Our officers are appointed by our board of directors and hold office until their earlier death, retirement, resignation or removal.
Background and Business Experience
The business experience during the past five years of each of the persons presently listed above as an Officer or Director of the Company is as follows:
Mr. Holzhauer, age 41, was the original founder of Kinder Travel, Inc. Since 1989 he has worked in the travel services sector of various German travel agencies and tour operators, leading branches of DER in Cologne and Frankfurt. From 1999 to 2001, Mr. Holzhauer worked as a travel agent for Uniglobe Advance Travel in Vancouver, BC. Between 2001 and 2004, Mr. Holzhauer was employed as a travel agent at Yaletown Travel Inc., also located in Vancouver, BC. Mr. Holzhauer immigrated to Canada in 1996 and established himself as travel agent in the local retail sector.
Kinder Travel, Inc. was founded by Mr. Holzhauer in January 2005 as a small boutique style niche travel service provider. The focus is primarily family travel as well as ministry and missions travel, and corporate travel. The approach is to offer online self serve capabilities but to provide full flexibility and assist personally in planning travel arrangements.
| | Identify Significant Employees |
We have no significant employees other than Mr. Holzhauer, our President and Chief Executive Officer.
We currently do not have any officers or directors of our company who are related to each other.
| | Involvement in Certain Legal Proceedings |
During the last five years no director, executive officer, promoter or control person of the Company has had or has been subject to:
(1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
(2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding;
(3) any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
(4) being found by a court of competent jurisdiction, the Commission or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers, directors and persons who own more than ten percent of the Company's Common Stock, to file initial reports of beneficial ownership on Form 3, changes in beneficial ownership on Form 4 and an annual statement of beneficial ownership on Form 5, with the SEC. Such executive officers, directors and greater than ten percent shareholders are required by SEC rules to furnish the Company with copies of all such forms that they have filed.
Based solely on its review of the copies of such forms filed with the SEC electronically, received by the Company and representations from certain reporting persons, the Company believes that for the fiscal year ended December 31, 2008, all the officers, directors and more than 10% beneficial owners complied with the above described filing requirements.
Code of Ethics
Our board of directors has not adopted a code of ethics due to the fact that we presently only have one director and officer, namely Mr. Holzhauer, and we are in the development stage of our operations. We anticipate that we will adopt a code of ethics when we increase either the number of our directors and officers or the number of our employees.
Board Committees
Audit Committee. The Company intends to establish an audit committee of the board of directors, which will consist of soon-to-be-nominated independent directors. The audit committee’s duties would be to recommend to the Company’s board of directors the engagement of an independent registered public accounting firm to audit the Company’s financial statements and to review the Company’s accounting and auditing principles. The audit committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls. The audit committee would at all times be composed exclusively of directors who are, in the opinion of the Company’s board of directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.
Mr. Holzhauer is the board of director’s financial expert to be considered upon the formation of the audit committee.
Compensation Committee. The Company intends to establish a compensation committee of the Board of Directors. The compensation committee would review and approve the Company’s salary and benefits policies, including compensation of executive officers.
Director Compensation
The Company has not paid its directors any separate compensation in respect of their services on the board. However, in the future, the Company intends to implement a market-based director compensation program.
ITEM 11. EXECUTIVE COMPENSATION
The table below summarizes all compensation awarded to, earned by, or paid to our Officers for all services rendered in all capacities to us for the fiscal periods indicated.
Name and Principal Position (a) | Year (b) | Salary ($)* (c) | Bonus ($) (d) | Stock Awards ($) (e) | Option Awards ($) (f) | Non-Equity Incentive Plan Compensation ($) (g) | Nonqualified Deferred Compensation Earnings ($) (h) | All Other Compensation ($) (i) | Total(1) ($) (j) |
Dirk Holzhauer, CEO, CFO & Director | 2008 2007 | 49,443 36,451 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 |
| Martha Jimenez, CEO, CFO and Director | 2008 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Daniel L. Baxter, CEO, CFO and Director | 2008 2007 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 | 0 0 |
| | |
*This represents management fees and/or salary paid during 2007 & 2008 to Dirk Holzhauer.
Narrative Disclosure to Summary Compensation Table
On September 2, 2008, Mssrs. Baxter and Holzhauer resigned from all positions with the Company.
On September 2, 2008, Ms. Martha Jimenez was appointed as the sole officer and director of the Company.
On September 16, 2008, Ms. Jimenez resigned from all positions with the Company.
On September 16, 2008, Mr. Holzhauer was appointed as the sole officer and director of the Company.
There are no other employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
There are no agreements or understandings for any executive officer to resign at the request of another person. None of our executive officers acts or will act on behalf of or at the direction of any other person.
Compensation of Directors
The table below summarizes all compensation awarded to, earned by, or paid to our Directors for all services rendered in all capacities to us for the fiscal periods indicated.
Name (a) | Fees Earned or Paid in Cash (b) | Stock Awards ($) (c) | Option Awards ($) (d) | Non-Equity Incentive Plan Compensation ($) (e) | Nonqualified Deferred Compensation Earnings ($) (f) | All Other Compensation ($) (g) | Total ($) (j) |
| Dirk Holzhauer | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Martha Jimenez | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Daniel Baxter | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
(1) Reflects dollar amount expensed by the company during applicable fiscal year for financial statement reporting purposes pursuant to FAS 123R. FAS 123R requires the Company to determine the overall value of the options as of the date of grant based upon the Black-Scholes method of valuation, and to then expense that value over the service period over which the options become exercisable (vest). As a general rule, for time-in-service-based options, the Company will immediately expense any option or portion thereof which is vested upon grant, while expensing the balance on a pro rata basis over the remaining vesting term of the option. For a description FAS 123 R and the assumptions used in determining the value of the options under the Black-Scholes model of valuation, see the notes to the consolidated financial statements included with this Report.
(2) Excludes awards or earnings reported in preceding columns.
(3) Includes all other compensation not reported in the preceding columns, including (i) perquisites and other personal benefits, or property, unless the aggregate amount of such compensation is less than $10,000; (ii) any “gross-ups” or other amounts reimbursed during the fiscal year for the payment of taxes; (iii) discounts from market price with respect to securities purchased from the company except to the extent available generally to all security holders or to all salaried employees; (iv) any amounts paid or accrued in connection with any termination (including without limitation through retirement, resignation, severance or constructive termination, including change of responsibilities) or change in control; (v) contributions to vested and unvested defined contribution plans; (vi) any insurance premiums paid by, or on behalf of, the company relating to life insurance for the benefit of the director; (vii) any consulting fees earned, or paid or payable; (viii) any annual costs of payments and promises of payments pursuant to a director legacy program and similar charitable awards program; and (ix) any dividends or other earnings paid on stock or option awards that are not factored into the grant date fair value required to be reported in a preceding column.
Narrative to Director Compensation Table
Directors serve without compensation and there are no standard or other arrangements for their compensation. There are no employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any Director that would result in payments to such person because of his or her resignation with the Company, or its subsidiaries, in the event of any change in control of the Company. There are no agreements or understandings for any Director to resign at the request of another person. None of our Directors or executive officers acts or will act on behalf of or at the direction of any other person.
Option Exercises and Stock Vested in Fiscal 2008
There were no option exercises or stock vested in 2008.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information regarding the number of shares of common stock beneficially owned on March 27, 2009, following consummation of the Transaction, by:
| · | Each person who is known by us to beneficially own 5% or more of the Registrant’s common stock; |
| · | Each of the Registrant’s directors and named executive officers; and, |
| · | All of the Registrant’s directors and executive officers as a group. |
Except as otherwise set forth below, the address of each of the persons listed below is:
| | | | |
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Owner (1) | Percentage of Shares Beneficially Owned (1) |
| | Directors and Named Executive Officers: | | |
| Common | Dirk Holzhauer | 400,000 | 17% |
| Common | Mardan Consulting, Inc. | 279,784 | 14% |
| Common | Global Developments, Inc. | 626,000 | 26% |
| | All officers and directors as a group (5 persons) | | |
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to shares. Unless otherwise indicated, the persons named in the table have sole voting and sole investment control with respect to all shares beneficially owned, subject to community property laws where applicable. The number and percentage of shares beneficially owned are based on 2,400,000 shares of common stock outstanding as of March 27, 2009.
Changes in Control.
There are no present arrangements or pledges of the Company’s securities which may result in a change in control of the Company.
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, |
| | AND DIRECTOR INDEPENDENCE. |
None of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect or in any proposed transaction, which has materially affected or will affect the Company.
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Audit Fees
During the fiscal year ended December 31, 2008, we incurred approximately $7,932 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2008.
During the fiscal year ended December 31, 2007, we incurred approximately $12,081 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2007.
Audit-Related Fees
The aggregate fees billed during the fiscal years ended December 31, 2008 and 2007 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $0 and $0, respectively.
Tax Fees
The aggregate fees billed during the fiscal years ended December 31, 2008 and 2007 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning was $0 and $0, respectively.
All Other Fees
The aggregate fees billed during the fiscal years ended December 31, 2008 and 2007 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.
ITEM 15. EXHIBITS.
| | DESCRIPTION | LOCATION |
| 3.1 – 3.2 | Articles of Incorporation and Bylaws | Incorporated by reference as Exhibits to the Form SB-1 filed on July 11, 2006 as amended on February 2, 2007. |
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification (CEO) | Filed herewith |
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification (CFO) | Filed herewith |
| 32.1 | Section 1350 Certification (CEO) | Filed herewith |
| 32.2 | Section 1350 Certification (CFO) | Filed herewith |
| * | All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. |
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.
| | KINDER TRAVEL, INC. | |
| | | | |
| By: | /s/ Aaron Whiteman | |
| | | Aaron Whiteman | |
| | | (Principal Executive Officer) | |
| | | | |
Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the Registrant in the capacities and on the date indicated:
| Signature | | Position | | Date |
| | | | | |
| /s/ Aaron Whiteman | | President | | June 16, 2009 |
| Aaron Whiteman | | ( Principal Executive Officer) | | |
| | | | | |
| /s/ Aaron Whiteman | | Treasurer | | June 16, 2009 |
| Aaron Whiteman | | ( Principal Financial Officer & Principal Accounting Officer) | | |
| | | | | |
| /s/ Aaron Whiteman | | Director | | June 16, 2009 |
| Aaron Whiteman | | | | |
| | | | | |
| /s/ Dirk Holzhauer | | Director | | June 16, 2009 |
| Dirk Holzhauer | | | | |
