FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-26461
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SNELLING TRAVEL, INC.
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(Exact name of registrant as specified in its charter)
Nevada 58-2368425
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4636 Village Drive, Fernandina, Florida 32034
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(Address of principal executive offices) (Zip Code)
(904) 261-7711
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes XX No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class of Stock Amount Outstanding
---------------- ------------------------------
$.001 par value 44,225,000 shares outstanding
Common Stock at May 19, 2002
SNELLING TRAVEL, INC.
(a development stage company)
CONTENTS
Page Number
-----------
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of June 30, 2002 (unaudited) and F-1
December 31, 2001
Statements of Operations for the three-month periods
ended June 30, 2002 and 2001 and for the period
from December 15, 1997 (inception) through
June 30, 2002 (unaudited) F-2
Statement of Stockholders' Deficit for the period
December 15, 1997 (inception) through June 30, 2002 F-3
Statements of Cash Flows for the three-month periods
ended June 30, 2002 and 2001 and for the period
from December 15, 1997 (inception) through
June 30, 2002 (unaudited) F-4
Notes to Financial Statements (unaudited) F-5
Item 2. Management's Discussion and Analysis or Plan of Operations 10
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2002 AND 2001
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
CONDENSED FINANCIAL STATEMENTS - UNAUDITED
Balance Sheets as of June 30, 2002 (unaudited) and
December 31, 2001 (audited) F-1
Statements of Operations for the Six and Three Months
Ended June 30, 2002 and 2001 (unaudited)
- With Cumulative Totals Since Inception F-2
Statements of Cash Flows for the Six Months Ended
June 30, 2002 and 2001 (unaudited)
- With Cumulative Totals Since Inception F-3
Notes to Unaudited Condensed Financial Statements F-4
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEETS
ASSETS
June 30, December 31,
2002 2001
(Unaudited) (Audited)
--------- ---------
Current Asset:
Cash and cash equivalents $ 141 $ 461
--------- ---------
Total Current Asset 141 461
--------- ---------
TOTAL ASSET $ 141 $ 461
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
LIABILITIES
Current Liabilities:
Accounts payable and accrued expenses $ 26,753 $ 21,692
Due to officers 4,550 4,350
--------- ---------
Total Current Liabilities 31,303 26,042
--------- ---------
Total Liabilities 31,303 26,042
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STOCKHOLDERS' DEFICIT
Common Stock, Class A, $.001 Par Value; authorized 100,000,000
shares on June 30, 2002 and December 31, 2001
respectively, issued and outstanding 44,225,000 and
44,225,000 shares on June 30, 2002 and
December 31, 2001 44,225 44,225
Additional Paid-in Capital 34,475 30,875
Deficit Accumulated During the Development Stage (109,862) (100,681)
--------- ---------
Total Stockholders' Deficit (31,162) (25,581)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 141 $ 461
========= =========
The accompanying notes are an integral part of the
condensed financial statements.
F-1
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2002 AND 20001
(UNAUDITED)
(WITH CUMULATIVE TOTALS SINCE INCEPTION)
SIX MONTHS ENDED THREE MONTHS ENDED December 15, 1997
---------------------------- ---------------------------- (Inception)
June 30, June 30, June 30, June 30, through
2002 2001 2002 2001 June 30, 2002
------------ ------------ ------------ ------------ ------------
OPERATING REVENUES
Revenue $ -- $ -- $ -- $ -- $ --
COST OF SALES -- -- -- -- --
------------ ------------ ------------ ------------ ------------
GROSS PROFIT -- -- -- -- --
------------ ------------ ------------ ------------ ------------
OPERATING EXPENSES
Professional fees and compensation expenses 6,638 11,449 2,500 3,656 88,619
General and administrative expenses 2,543 1,440 1,272 588 21,243
------------ ------------ ------------ ------------ ------------
Total Operating Expenses 9,181 12,889 3,772 4,244 109,862
------------ ------------ ------------ ------------ ------------
NET LOSS BEFORE PROVISION FOR INCOME TAXES (9,181) (12,889) (3,772) (4,244) (109,862)
Provision for Income Taxes -- -- -- -- --
------------ ------------ ------------ ------------ ------------
NET LOSS APPLICABLE TO COMMON SHARES $ (9,181) $ (12,889) $ (3,772) $ (4,244) $ (109,862)
============ ============ ============ ============ ============
NET LOSS PER BASIC AND DILUTED SHARES $ (0.00021) $ (0.00029) $ (0.00009) $ (0.00010) $ (0.00265)
============ ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 44,225,000 44,225,000 44,225,000 44,225,000 41,456,909
============ ============ ============ ============ ============
The accompanying notes are an integral part of the
condensed financial statements.
F-2
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
(UNAUDITED)
(WITH CUMULATIVE TOTALS SINCE INCEPTION)
December 15, 1997
(Inception)
through
June 30,
2002 2001 2002
--------- --------- ---------
CASH FLOW FROM OPERTING ACTIVIITES
Net loss $ (9,181) $ (12,889) $(106,090)
--------- --------- ---------
Adjustments to reconcile net loss to net cash
used in operating activities
Common stock issued for services -- -- 1,000
Rent and salaries contributed by officer 3,600 3,600 23,400
Changes in assets and liabilities
Increase (decrease) in accounts payable and
and accrued expenses 5,061 4,596 24,821
--------- --------- ---------
Total adjustments 8,661 8,196 49,221
--------- --------- ---------
Net cash (used in) operating activities (520) (4,693) (56,869)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in amounts due to officers 200 -- 4,550
Proceeds from issuance of common stock -- -- 52,500
--------- --------- ---------
Net cash provided by financing activities 200 -- 57,050
--------- --------- ---------
NET DECREASE IN
CASH AND CASH EQUIVALENTS (320) (4,693) 181
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD 461 5,811 --
--------- --------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 141 $ 1,118 $ 181
========= ========= =========
The accompanying notes are an integral part of the
condensed financial statements.
F-3
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
--------------------------------------
The condensed unaudited interim financial statements included herein
have been prepared, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The condensed
consolidated financial statements and notes are presented as permitted
on Form 10-QSB and do not contain information included in the
Company's annual consolidated statements and notes. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or
omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. It is suggest that these condensed
consolidated financial statements be read in conjunction with the
December 31, 2001 audited financial statements and the accompanying
notes thereto. While management believes the procedures followed in
preparing these condensed financial statements are reasonable, the
accuracy of the amounts are in some respects dependent upon the facts
that will exist, and procedures that will be accomplished by the
Company later in the year.
These condensed unaudited financial statements reflect all
adjustments, including normal recurring adjustments which, in the
opinion of management, are necessary to present fairly the
consolidated operations and cash flows for the periods presented.
On December 15, 1997, Snelling Travel, Inc. (the "Company"), was
incorporated under the laws of Colorado. The Company's primary purpose
is to engage in the travel business, specializing in adventure travel
within the United States, Canada, Mexico and the Caribbean.
During August 1999, the Company filed a registration statement with
the U. S. Securities and Exchange Commission on Form 10-SB, thereby
registering its common stock under the Securities Exchange Act of
1934, as amended.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Development Stage Company
-------------------------
The Company is a development stage company. The Company is devoting
substantially all of its efforts in finding new business ventures
including the proposed combination of Global Vision, Inc., a
California corporation ("Global"). Global is a "3rd Generation"
Internet technology company with two software systems that can help
companies do business over the Internet.
F-4
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Revenue and Cost Recognition
----------------------------
Revenue, when generated, will be recorded on the accrual basis, when
earned. The Company upon the combination of Global is anticipating
earning revenue in this current fiscal year.
Cost is recorded on the accrual basis as well, when the services are
incurred rather than paid for.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid debt instruments and other
short-term investments with an initial maturity of three months or
less to be cash equivalents.
The Company maintains cash and cash equivalent balances at several
financial institutions which are insured by the Federal Deposit
Insurance Corporation up to $100,000.
Income Taxes
------------
The income tax benefit is computed on the pretax loss based on the
current tax law. Deferred income taxes are recognized for the tax
consequences in future years of differences between the tax basis of
assets and liabilities and their financial reporting amounts at each
year-end based on enacted tax laws and statutory tax rates.
F-5
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Earnings (Loss) Per Share of Common Stock
-----------------------------------------
Historical net income (loss) per common share is computed using the
weighted average number of common shares outstanding. Diluted earnings
per share (EPS) includes additional dilution from common stock
equivalents, such as stock issuable pursuant to the exercise of stock
options and warrants. Common stock equivalents were not included in
the computation of diluted earnings per share when the Company
reported a loss because to do so would be antidilutive for periods
presented.
The following is a reconciliation of the computation for basic and
diluted EPS:
June 30, June 30,
2002 2001
------------ ------------
Net Loss $ (9,181) $ (12,889)
------------ ------------
Weighted-average common shares
outstanding (Basic) 44,225,000 44,225,000
Weighted-average common stock equivalents:
Stock options -- --
Warrants -- --
Weighted-average common shares
outstanding (Diluted) 44,225,000 44,225,000
Options and warrants outstanding to purchase stock were not included
in the computation of diluted EPS because inclusion would have been
antidilutive.
Software Development Costs
--------------------------
Software development costs are accounted for in accordance with
Statement of Position 98-1, "Software Developed or Obtained for
Internal Use". Costs incurred in a preliminary project stage are
expensed as incurred. External direct costs, payroll and payroll
related costs for those directly involved with a project and interest
costs in accordance with the provisions of Statement of Financial
Accounting Standards (SFAS) No. 34, "Capitalization of Interest Cost",
are capitalized during the application development stage. Costs
incurred during the post-implementation/ operation stage are expensed
as incurred.
F-6
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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Fair Value of Financial Instruments
-----------------------------------
The carrying amount reported in the condensed balance sheets for cash
and cash equivalents and accounts payable and accrued expenses
approximate fair value because of the immediate or short-term maturity
of these financial instruments.
Reclassifications
-----------------
Certain amounts for the six months ended June 30, 2001 have been
reclassified to conform with the presentation of the June 30, 2002
amounts. The reclassifications have no effect on net income for the
six months ended June 30, 2001.
Recent Accounting Pronouncements
--------------------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities".
SFAS No. 133 requires companies to recognize all derivative contracts
as either assets or liabilities in the balance sheet and to measure
them at fair value. If certain conditions are met, a derivative may be
specifically designated as a hedge, the objective of which is to match
the timing of the gain or loss recognition on the hedging derivative
with the recognition of (i) the changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk or
(ii) the earnings effect of the hedged forecasted transaction. For a
derivative not designated as a hedging instrument, the gain or loss is
recognized in income in the period of change. On June 30, 1999, the
FASB issued SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement
No. 133". SFAS No. 133 as amended by SFAS No. 137 is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. In June
2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities". SFAS No. 133 as amended
by SFAS No. 137 and 138 is effective for all fiscal quarters of fiscal
years beginning after June 15, 2000. The Company has entered into no
hedging activities.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB 101 provides guidance for revenue recognition under
certain circumstances, and is effective during the first quarter of
fiscal year 2001. SAB 101 is not expected to have a material effect on
our consolidated results of operations, financial position and cash
flows.
F-7
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------------------
Recent Accounting Pronouncements (Continued)
--------------------------------------------
On March 16, 2000, the Emerging Issues Task Force issued EITF 99-19
"Recording Revenue as a Principal versus Net as an Agent" which
addresses the issue of how and when revenues should be recognized on a
Gross or Net method as the title implies. The emerging Issues Task
Force has not reached a consensus but sites SEC Staff Accounting
Bulletin 101. EITF 99-19 does not affect our consolidated financial
statements.
On July 20, 2000, the Emerging Issues Task Force issued EITF 00-14
"Accounting For Certain Sales Incentives" which establishes accounting
and reporting requirements for sales incentives such as discounts,
coupons, rebates and free products or services. Generally, reductions
in or refunds of a selling price should be classified as a reduction
in revenue. For SEC registrants, the implementation date is the
beginning of the fourth quarter after the registrant's fiscal year end
December 15, 1999. EITF 00-14 does not affect our consolidated
financial statements.
In June 2001, the FASB issued Statement No. 142 "Goodwill and Other
Intangible Assets". This Statement addresses financial accounting and
reporting for acquired goodwill and other intangible assets and
supersedes APB Opinion No. 17, Intangible Assets. It addresses how
intangible assets that are acquired individually or with a group of
other assets (but not those acquired in a business combination) should
be accounted for in financial statements upon their acquisition. This
Statement also addresses how goodwill and other intangible assets
should be accounted for after they have been initially recognized in
the financial statements. This statement has been considered when
determining impairment of goodwill in certain transactions.
NOTE 3 - RELATED PARTY TRANSACTIONS
--------------------------
The Company has non-interest bearing amounts due to/from officers. At
June 30, 2002, the amount outstanding to the officers is $4,550. This
amount is anticipated to be paid back during the fiscal year.
F-8
SNELLING TRAVEL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2002 AND 2001
NOTE 4 - STOCKHOLDERS' EQUITY
--------------------
The Company as of June 30, 2002, has 100,000,000 shares of common
stock authorized and 44,225,000 issued and outstanding. The par value
of the Company's common stock is $.001.
In December 1999, the Board of Directors authorized a twenty-nine for
one stock split of the Company's common stock.
NOTE 5 - GOING CONCERN
-------------
As shown in the accompanying condensed financial statements, the
Company has incurred net losses since inception and is in the
development stage and has not recorded revenues. Management is
confident that future business ventures will result in profitability
for the Company, however, there is no guarantee whether the Company
will be able to complete transactions and generate enough revenue
and/or raise capital to support those operations. This raises
substantial doubt about the Company's ability to continue as a going
concern.
The condensed financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
NOTE 6 - SUBSEQUENT EVENTS
-----------------
On August 2, 2002, the Company announced that it had entered into an
Agreement and Plan of Reorganization, dated August 2, 2002. which sets
forth the terms and conditions of a proposed business combination of
the Company and Global. Pursuant to this Agreement, Global
shareholders will exchange 100% of the outstanding shares of Global
for 26,000,000 newly issued, post reverse shares of the Company, and
as a result, Global will become a wholly-owned subsidiary of the
Company.
Global was formed in January 1999, and is a "3rd Generation" Internet
technology company with two software systems that can help companies
do business over the Internet.
F-9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Introduction
The following discussion and analysis highlights the financial position of
Snelling Travel, Inc. ("us" or the "Company") at June 30, 2002 and compared to
year end December 31, 2001 and plan of operations for the three month periods
ended June 30, 2002 and 2001, and the period from inception to June 30, 2002.
This discussion and analysis should be read in conjunction with the financial
statements and discussion and analysis contained in our Annual Report on Form
10-KSB for the year ended December 31, 2001. Financial information contained in
this report is condensed and unaudited.
Certain statements contained herein and subsequent oral statements may
contain "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward looking statements are
identified by words such as "intends," "anticipates," "hopes," and "expects,"
among others, and include, without limitation, statements regarding the
Company's plan of business operations, anticipated revenues, related
expenditures and the results of any business transactions. Factors that could
cause actual results to differ materially include, among others, the following:
acceptability of the Company's services in the retail market place, general
economic conditions, political and economic conditions in the United States and
abroad, competition in the airline industry, the overall state of the travel
industry and decisions of third parties. Most of these factors are outside the
control of the Company. Investors are cautioned not to put undue reliance on
forward-looking statements. Except as otherwise required by applicable
securities statutes or regulations, the Company disclaims any intent or
obligation to update publicly these forward looking statements, whether as a
result of new information, future events or otherwise.
Plan of Operation
At June 30, 2002, the Company remained in the development stage, having no
revenue from operations. Receipt of revenue by the Company is dependent on the
success of its marketing efforts or the acquisition of assets or a business that
can produce revenue in the future. There is no assurance when, if ever, revenues
will be received.
Notwithstanding its efforts to conserve working capital recently, the
Company has exhausted the cash that was raised in its initial offering. In
addition, the Company has been unsuccessful in generating any revenue from its
marketing efforts and little interest in its service. As a result, management
has determined to expand its plan and investigate other business opportunities.
These opportunities may include mergers with, or acquisitions of, other
businesses with operations within or without the travel industry. The objective
of management is to identify one or more opportunities which will provide value
to its shareholders. This may include acquisition of a business that would
benefit from the Company's status as a publicly traded entity. However, there is
no assurance that these efforts will be successful or that any business will be
identified. In that event, the Company may be forced to cease operations and
liquidate any remaining assets.
10
During the three month period ended June 30, 2002, the Company realized a
net loss of $9,181, or $.00 per share. This represents a decrease in the net
loss of approximately $3,708 from the three months ended June 30, 2001. Our
management has concentrated on reducing expenses in an effort to conserve
available cash until operations improve. Significant expenses for the first
quarter of 2002 and 2001 include legal and accounting fees associated with the
Company's filing obligation as an SEC reporting company. Salaries and rent
accrued during the three-month periods ended June 30, 2002 and 2001 in the
amount of $1,800 have been donated by the Company's president. Accordingly,
those expenses represent non-cash expenses.
Expenses anticipated in the future include administrative expenses similar
to those incurred to date.
Liquidity and Capital Resources
At June 30, 2002, the Company had a deficit in working capital of
($31,162), consisting of current assets of $141 and current liabilities of
$31,303. Current assets consisted entirely of cash, while current liabilities
consisted of accounts payable. The Company has no specific capital requirements
at this time other than payment of accounts payable and general and
administrative expenses. However, management believes that the additional cash
will be need to be raised to continue operations in 2002, and the Company will
require additional cash in order to expand its marketing beyond the limited
amount currently conducted. The Company will require additional cash to maintain
its reporting obligations with the SEC. Any additional cash required for
operations will be sought from private debt or equity financing.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) 8-K filed on August 8, 2002, which is incorporated herein.
(b) 8-K filed on June 29, 2002, which is incorporated herein..
11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SNELLING TRAVEL, INC.
Date: August 13, 2002 By: /s/ Greg Simonds
--------------- ----------------------------
Greg Simonds, Vice President
12