Just Picture It Now: Take a closer look...

I started a huge task weeks ago when I promised John Frenaye that I would get his questions answered. ALL his questions. Over the next couple weeks due to the length of this list, I’m going to focus on each of these questions one at a time. My goal here is not only to answer the question, but also point out why this question is even asked in the first place.

This will also be an excellent opportunity and tool for anyone with additional comments about each of the specific questions to get better clarification. Use the comments section to discuss each of the questions in greater detail. I remind you that I learned how to accomplish such a huge task from Brian Tracy and his courses, which teach that you focus on the each task one at a time, focus on the solution, break it down into manageable chunks, and before you know it, you’ve achieved your goal.

It should be a really fun debate, and for those of you in YTB, take this information and documentation and use it. Here are the questions we have gone over thus far.

Question #1 - Why a compensation plan takes 12 pages to define?

Question #2 - How YTB arrived at $226 Million in travel sold for 2006. (Still waiting.)

Question #3 - Why so little of the "training" at the annual convention was for travel. (OK, YTB only believes in training at other meetings. We can let this one go.)

Question #4 - How nearly 150,000 RTAs can pay in the course of 9 months $79 million dollars in website sales, fees, and training; and receive $9.3 million in return. (This is huge...anyone?)

Question #5 - And for those that say I don't get the math, I did not learn how nearly 150,000 people paid in $79 million dollars and only got $64 million in return. (Hello? Anyone? Bueller? Bueller?)

Question #6 - Why it is a good thing to have your top executives selling off stock. (There were no takers on this one, so I am gonna assume that it probably is NOT a good thing as everyone initially thought.)

This has got to be one of the biggest rumors going around the internet right now and I’m actually glad I’ve got a chance to set the record straight on this one. Before I begin, I need to help those that don’t understand how everyone knows that “executives” are selling off stock. Being a publically traded company, Officers, Directors, Majority Owners (more than 10%), are required to report both sales and purchases of stock. These reports are found on what’s known as “Form 4” and are public knowledge.

Of all the Form 4 documents filed with our company we find the following Executives who have sold stock.

Lloyd Tomer – Chairman of the Board (Two Sales)
Scott Tomer – CEO of YourTravelBiz.com (No Sales)
Kim Sorensen – President of YTB Travel Network (One Sale)
Andrew Cauthen – COO of YTB International, Inc. (Three Sales)
John Clagg – CFO of YTB International (One Sale)

An executive sold stock 7 times in the last 12 months. Exorbitant? Alarming? I don’t know, you tell me. Royal Caribbean had 6 Executives sell in the last 12 months, Carnival had 5 Executives sell in the last 12 months, Sabre had 14 Executives sell in the last 12 months, and Expedia had 9 Executives sell in the last 12 months. Seems to be pretty on par to me, how ‘bout you?

Unfortunately, our 5 Executives are not the focus of all the attention or who have been selling all the stock. The one who is getting all the attention is Michael Brent. Now I’m sure there are some even with YTB who are new and have no idea who this Michael Brent is. He’s not on the Board of Directors, and he’s not an Officer with YTB.

So just who is Michael Brent? Travel Weekly gave a brief explanation of the timeline of The Brent Group who owns Rezconnnect Technologies and gave YTB its first booking capabilities back in 2001. By 2004 YTB offered to buy Rezconnect in a reverse merger, and Michal Brent took over as President of YTB being a majority owner of the company. By late 2006 YTB was 10 times as large as Rezconnect and shareholders agreed to change the name to YTB International, Inc. and headquarters were moved from New Jersey to Illinois, and Michael Brent resigned his position as President of the company.

Here is what everyone needs to read very carefully. Pick any of these sales and you should read the “remarks” section of this form.

“The Reporting Person is a member of a Section 13(d) group and a party to a certain Stockholders' Agreement, dated as of December 8, 2004, by and among certain stockholders of the Issuer that together own a significant percentage of the Issuer's outstanding common stock. On November 22, 2006, the Reporting Person granted an irrevocable proxy with respect to all shares of the Issuer's common stock now held or hereafter acquired by him to other parties to such Stockholders' Agreement. However, because the Reporting Person continues to possess a pecuniary interest with respect to all shares that he holds, he has reported such holdings on this Form 4.”

In layman’s terms, what that means is that Michael Brent gave up his right to vote as a shareholder in the company. His stock only holds a monetary value as he has handed his voting rights over to Coach, Scott and Kim, who I know just scares the living daylights out of some of our Traditionalists.

Now that Coach, Scott and Kim are in control, I’d say we are in very good hands. We in YTB started to vote “yes” with our money by purchasing the stock, enabling the stock to start climbing in December 2006. I realize that most will point out that the stock is not doing so well a year later, which in large part is due to Michael Brent riding off into the sunset with his money. (Which is his right and choice.) YTB International, Inc. started to turn a profit by Q2 and Q3 of 2007, and we also enjoyed a 1-3 stock split for those of us smart enough to invest in Coach, Scott, and Kim.

To answer John’s question specifically, is it a “good thing” that Michael Brent is selling off his shares of stock? No.

Can Michael Brent be considered a Top Executive with the company without voting rights or control of the day to day operations of YTB International, Inc? Certainly not.

Is YTB International better off without Michael Brent at the helm considering that YTB is now showing profits less than a year after his resignation as President? I’d certainly say so. While Michael Brent is selling off all his shares, those of us in YTB are buying stock in the company while it’s on sale. YTB is profitable, the Market Cap ($101.4 Million) is starting to climb again, and YTB is growing both in numbers (140,000 Active RTA’s) and sales (an estimated $550 Million in Travel for 2007). Friday, YTB moves into Canada, our first major International market.

Now that the smoke and mirrors have been removed from the picture, I’d say YTBLA is a strong buy.

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Doug & Ronda Bauknight
AKA: TravelPro
Travel Agent / Networker
Phone: 678.458.5812

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