MANAGEMENT REPORTMANAGEMENT REPORT
August 31, 2000
During the third quarter ending August 31, 2000 the company completed its new product
“LiveLinx*PLUS,” an automated booking system using the Global Distribution System
(“GDS”). LiveLinx*PLUS was alpha tested with one of Solars largest customers, D-FW.
Several customers have expressed interest in using LiveLinx*PLUS, which is now
available in the marketplace. This new product offers the company an opportunity to
participate in transactional revenues, which could be significant in the upcoming months
as additional clients, new customers and their agencies come onto this platform. This
revenue will be incremental to the existing revenue the company charges for distribution
through its LiveLinx platform.
For the first three quarters of 2000, the company recorded revenues of $1,109,120, an
increase of 57% over the same period for 1999. The sales department has continued to
develop its staff, while concentrating on the air consolidator market. With the addition of
new sales staff and the introduction of the LiveLinx*PLUS product, it is now time to
diversify and begin promoting more forcefully in the other wholesale travel segments.
The company’s gross margin for the first nine months of 2000 was 787,219 or 71% of
sales, a reduction from the same period of 1999 where it was 88%. This reduction is
attributable to an increase from the company’s service provider, however, reflects a
renegotiated “flat” fee going forward versus the previous “variable” charge based on the
company’s revenues. Further, the company’s new policy of paying sales personnel on a
commissioned only basis is also reflected in this decrease.
Highlights of the operating expenses are as follows:
The company increased its marketing expenditures to better promote its products in
the marketplace. As part of its ongoing marketing, the company completed the
development of a new web-site (www.solars.com), which is intended to better inform
customers and investor of the company’s developments.
General and administration expenses increased due to re-acquiring the TourTek
division in Toronto, legal expenses associated with the GATT lawsuit, legal and
accounting issues with respect to the filing of the 20F and business development costs
in the United Kingdom.
The company has continued its policy of working to lower overheads, and, as such,
has not incurred any external costs, to date, on investor relations. However, the
company recognizes the value of such services to its shareholders and continues to
examine alternatives in the best interest of its shareholders, particularly in light of the
recent general market volatility.
The first nine months have shown continued upward usage of the SolarNet system by the
travel agency community. Travel agencies currently accessing the system, on average, do
well in excess 1,000,000 hits per month. On an average weekday, over 1,200 uniqueagencies conduct over 5,000 sessions on SolarNet. Towards the latter part of the third
quarter, at least ten new agencies have been signing onto SolarNet on a daily basis.
The company continues to develop leading edge technology and in this regard has
accomplished the following:
LiveLinx*PLUS will allow the wholesale travel supplier to further automate its
fulfillment process. This automation will not only save the supplier money in staffing
and overhead, but more importantly the supplier can process more transactions in a
timely manner.
The company has entered into an agreement with CompuQuest to provide the Wings
software product, a simplified air consolidator fare management system, which offers
an automated solution to air consolidators currently without the technology necessary
to present their products over the SolarNet system.
The company has commenced a new module for its TourTek system, which is a
sophisticated air consolidator system to be branded AirTek. This system is expected
to be marketable by the first quarter of 2001.
Subsequent to the end of the third quarter, the United States District Court for Western
District of Texas has dismissed the lawsuit brought by Grand Adventure Tour and Travel
Publishing Corporation (“GATT”) against Andrew O’Leary and Robert Chisholm, two
senior officers of the Company. The Company has filed an answer and a counter-claim,
which it will continue to pursue vigorously.
The company continues to grow its customer base in a positive manner and is confident
that it now has the proper caliber of personnel required bring it to the next level.
On behalf of the Board
Frank Wells.