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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 24, 2001
travelbyus, Inc.
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(Exact name of registrant as specified in its charter)
Texas 0-10124 75-2631373
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
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700 North Pearl Street, Suite 2170, Dallas, Texas 75201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 922-8100
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Aviation Group, Inc.
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(Former name or former address, if changed from last report)
Item 2. Acquisition or Disposition of Assets
On January 25, 2001, travelbyus, Inc., formerly known as Aviation
Group, Inc., a Texas corporation (the "Registrant"), completed a statutory
arrangement (the "Arrangement") in accordance with Ontario, Canada law pursuant
to which travelbyus.com ltd., an Ontario corporation ("travelbyus.com"), was
acquired by Travelbyus Canada Holdings Ltd., formerly known as Aviation Group
Canada Limited, a Canadian subsidiary of the Registrant (the "Canadian
Subsidiary"). In connection with the consummation of the Arrangement, on January
24, 2001, the Registrant also changed its name from Aviation Group, Inc. to its
current name, effected a one-for-five reverse split of its common stock (the
"Reverse Split") and increased its authorized number of shares of common stock
from 10,000,000 to 250,000,000.
As part of the Arrangement, the outstanding common shares of
travelbyus.com were converted into exchangeable shares of travelbyus.com on a
one-for-one basis. The Canadian Subsidiary became the sole holder of the common
shares of travelbyus.com, which as a result is now considered an indirect
subsidiary of the Registrant. The separate existence of travelbyus.com as an
Ontario corporation will continue until there are no longer any outstanding
exchangeable shares. Holders of exchangeable shares will be entitled to receive,
subject to applicable law, dividends equivalent to all dividends paid on the
Registrant's common stock and will also be entitled to participate in any
liquidation of the Registrant through an automatic exchange right. The
Registrant, the Canadian Subsidiary, travelbyus.com and Montreal Trust Company
of Canada, as trustee for the exchangeable shareholders, have entered into a
voting and exchange trust agreement. Under that agreement, the Registrant has
issued a special voting share to the trustee for the benefit of the holders of
the exchangeable shares. The special voting share has a number of votes equal to
the number of outstanding exchangeable shares divided by five. These votes may
be cast at any meeting at which the Registrant's shareholders are entitled to
vote. An exchangeable shareholder may instruct the trustee how to vote the
special voting share with respect to the exchangeable shares held by that
holder.
Under the terms of the exchangeable shares and related agreements,
every five exchangeable shares are exchangeable, at the holder's election, into
one share of the Registrant's common stock. Any remaining exchangeable shares
not previously exchanged will automatically be exchanged into the Registrant's
common stock on January 1, 2003, or earlier upon the occurrence of certain
events. Each share of common stock of the Registrant that was outstanding prior
to the Arrangement remains outstanding and unchanged by the Arrangement, except
that every five shares now represents one share in accordance with the Reverse
Split.
The combined companies will account for the transaction under the
purchase method of accounting as if travelbyus.com had acquired the Registrant
and had recapitalized under the capital structure of the Registrant.
Accordingly, the combined company will record the assets and liabilities of the
Registrant as being acquired by travelbyus.com in the Arrangement.
In connection with the consummation of the Arrangement, the composition
of the Registrant's Board of Directors was changed. The new Board of Directors
of the Registrant consists of Bill Kerby, Lee B. Sanders, Hank Clements, Alan
Thompson, Michael Farrugia, John Fenyes and John Craig. Richard Morgan, Gordon
Whitener and Charles Weed have resigned from the Board. All of the directors,
except Hank Clements and Lee Sanders, are members of the Board of Directors of
travelbyus.com. Messrs. Thompson, Farrugia and Craig were newly appointed to the
Registrant's Board at the consummation of the Arrangement.
The exchange agent for the Arrangement, Montreal Trust Company of
Canada, has mailed to travelbyus.com shareholders a form of letter of
transmittal and instructions for use in exchanging travelbyus.com common share
certificates for exchangeable share certificates. A travelbyus.com shareholder
must surrender the holder's share certificates, together with a signed letter of
transmittal, in order to receive in exchange a certificate or certificates
representing the whole exchangeable shares to which the shareholder is entitled.
The letter of transmittal also contains an election form where a travelbyus.com
shareholder may elect to exchange the holder's exchangeable shares for shares of
Registrant's common stock.
travelbyus.com is an integrated travel company which provides travel
services via the Internet, through 1-800 call centers and through traditional
travel agencies. Prior to the Arrangement travelbyus.com owned, and continues to
own, 500 shares of the Registrant's Series B preferred stock. Prior to the
Arrangement, William Kerby, a director and Chief Executive Officer of
travelbyus.com, also served as a director, Chief Executive Officer and President
of the Registrant since March 2000. In addition, prior to the Arrangement, John
Fenyes, a director and Executive Vice President for travelbyus.com, also served
as a director of the Registrant since May 2000. Messrs. Kerby and Fenyes were
also common shareholders in travelbyus.com.
Item 5. Other Events
On November 9, 2000, travelbyus.com ltd. announced that it had signed a
letter of intent with Amadeus NMC Holding, Inc. In the letter, Amadeus stated
that it intended to make a strategic equity investment in travelbyus.com. The
Registrant now expects that, as a result of the Arrangement, any investment by
Amadeus would be made in the Registrant. Amadeus is one of the leading global
distribution systems in the travel industry. The Registrant expects that, in
connection with the purchase of this minority ownership position, an Amadeus
representative will join the Registrant's Board of Directors. travelbyus.com
also expects to become a value added reseller offering integrated technology
from travelbyus.com with Amadeus' global distribution system services.
travelbyus.com's Web site has, since inception, used the booking technology of
Amadeus for making travel reservations. Amadeus has no binding commitment to
invest in the Registrant, and no investment by Amadeus can be assured.
In late December 2000, travelbyus.com borrowed $2.0 million from
Amadeus NMC Holding, Inc. This loan bears interest at 8% per year and is
repayable in eight equal installments payable quarterly commencing on March 31,
2001 and with a final installment due November 30, 2002. The loan is convertible
into travelbyus.com common shares at any time at a conversion price equal to the
weighted average trading price for the common shares or exchanageable shares on
The Toronto Stock Exchange for the greater of one day and the 10 days prior to
the date of delivery of the conversion notice. The balance of the loan will be
automatically converted into common shares or exchangeable shares of
travelbyus.com if and when Amadeus makes an equity investment in travelbyus.com.
travelbyus.com's chief executive officer, Bill Kerby, pledged 6,083,334 common
shares in travelbyus.com that were beneficially owned by him to secure this
loan.
On November 13, 2000, travelbyus.com announced the completion of the
integration of the ITA software into its Web site. This software facilitates the
search through the Web site for the lowest airfares and significantly enhances
and simplifies the Web site booking capabilities for airline tickets.
In connection with the completion of the Arrangement on January 24, 2001,
2001, the Registrant's Articles of Incorporation were amended to increase the
number of authorized shares of its common stock to 250,000,000, to change its
name to "travelbyus, Inc." and to effect a one-for-five reverse split of its
common stock. The newly consolidated common stock of the Registrant commenced
trading on The Nasdaq SmallCap Market on January 25, 2001. The new symbol is
"TRIP" for its common stock and "TRIPW" for its publicly-traded warrants. Per
Nasdaq listing qualifications, the Registrant's "TRIP" common stock must trade
above the required initial $4.00 bid price for a period following the
commencement of trading or imperil its listing status on the Nasdaq exchange for
failure to meet this minimum bid price standard. Management has requested a
hearing with Nasdaq regarding this potential event, and is also considering
listing its shares on additional American exchanges. To date, the Registrant's
common stock has not traded at the required minimum bid price level. If this
problem persists, management intends to work to secure additional domestic
listings to assist in providing shareholders with an orderly market for their
shares. The Registrant's securities continue to be listed for trading on the
Boston Stock Exchange under the symbols "TBY" and "TBYW".
In late December 2000, travelbyus.com executed agreements relating to a
$2.5 million loan from DCM Asylum LLC, of which $1.0 million was funded to
travelbyus.com in October 2000. This loan matures on the earlier of February 15,
2001 or the date of funding of an equity contribution by Amadeus NMC Holding,
Inc. The loan bears interest at 12% annually. In connection with the loan,
travelbyus.com issued warrants to purchase 250,000 of its common shares at an
exercise price of $2.00 per share expiring in December 2005. The loan is secured
by security interests in 150 shares of Series B preferred stock owned by
travelbyus.com and essentially all of the assets of Mr. Cheaps Travel, Ltd.,
Gotham Media Group, Ltd. and travelbyus-Travel Magazine Incorporated, which are
subsidiaries of travelbyus.com
In late December 2000, travelbyus.com entered into a loan transaction
with DCM/KG LLC to borrow $1.5 million. The loan bears interest at 12% per year
and matures on the earlier of February 5, 2001 and the date following completion
of an equity investment by Amadeus NMC Holding, Inc. in travelbyus.com or the
Registrant. The loan is secured by the guaranty of Travelbyus Cruise Operations,
Inc. and Cheap Seats, Inc., which are subsidiaries of travelbyus.com, and the
grant of a security interest on essentially all of the assets of Cruise Shoppes
and Cheap Seats. In connection with the loan, travelbyus.com granted warrants to
purchase 300,000 common shares at an exercise price of $1.00 per share expiring
on December 29, 2003. The loan is also convertible at the option of the lender
into common shares of travelbyus.com at a conversion price of $1.00 per common
share. If the conversion right is exercised after completion of the Arrangement,
the conversion price is the lesser of $1.00 per exchangeable share or the
seven-day weighted average trading price of the Registrant's common stock,
calculated on a pre-reverse stock split basis, plus a premium of 5%.
In early January 2001, travelbyus.com borrowed $1.0 million from
Aberdeen Strategic Capital LP. This loan bears interest at 12% per year and
matures on February 29, 2001. In connection with the loan, travelbyus.com
granted warrants to purchase 200,000 common shares at an exercise price of $1.00
per share expiring on December 29, 2003. The loan is secured by the guaranty of
Cheap
Seats, Inc. and a security interest in essentially all the assets of Cheap Seats
and Travelbyus Cruise Operations Inc., which are subsidiaries of travelbyus.com.
The loan is convertible into common shares of travelbyus.com at a conversion
price of $1.00 per common share. If the conversion right is exercised after
completion of the Arrangement, the conversion price is the lesser of $1.00 per
exchangeable share or the seven-day weighted average trading price of the
Registrant's common stock, calculated on a pre-reverse stock split basis, plus a
premium of 5%.
The Registrant and travelbyus.com are working to refinance the
foregoing debts through new equity or debt issuances, or a combination,
including an equity investment by Amadeus. There can be no assurance that these
efforts will be successful.
On February 5, 2001, Registrant announced the imminent release of its
SiteRabbit(TM) technology that provides for improved targeted marketing to
consumers through business-to-business channels.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of the Businesses Acquired The audited
financial statements of travelbyus.com required by this Item 7(a)
are not yet available. The Registrant expects that the audited
financial statements of travelbyus.com will be completed and
filed by amendment to this Form 8-K Current Report within 60 days
after the date of filing of this Form 8-K Current Report.
(b) Pro Forma Financial Information. The pro forma financial
statements of the Registrant required by this Item 7(b) are not
yet available. The Registrant expects that the pro forma
financial statements will be completed and filed by amendment to
this Form 8-K Current Report not later than 60 days after the
date of filing of this Form 8-K Current Report.
(c) Exhibits.
None.
Item 8. Change in Fiscal Year
Effective as of January 24, 2001, the fiscal year end of the Registrant
has changed from June 30 to September 30, which is the fiscal year end for
travelbyus.com. Because the Arrangement will be accounted for as an acquisition
of the Registrant by travelbyus.com, the historical consolidated financial
statements of travelbyus.com will be deemed to be the consolidated financial
statements of the Registrant going forward. Accordingly, no transition report
will be required to be filed.
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 hereunto duly authorized.
TRAVELBYUS, INC.
Dated as of February 7, 2001. By: /s/ Richard L. Morgan
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Richard L. Morgan, Executive Vice
President