SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q10-Q/A
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended JuneSeptember 30, 2009
- -OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities And Exchange Act of 1934 for the transaction period from
_________ to________
Commission File Number 333-39942
Dale Jarrett Racing Adventure, Inc.
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(Exact name of registrant as specified in its charter)
FLORIDA 59-3564984
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification Number)
120 A North Main Avenue, Newton, NC 28658
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(Address of principal executive offices, Zip Code)
(888) 467-2231
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(Registrant's telephone number, including area code)
Indicate by check mark whether the issuer (1) 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 [x] No [ ]
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerate filer, or a small
reporting company as defined by Rule 12b-2 of the Exchange Act):
Large accelerated filer [ ] Non-accelerated filer [ ]
Accelerated filer [ ] 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 [ ] No [x]
The number of outstanding shares of the registrant's common stock,
August 11,October 31, 2009:
Common Stock - 24,510,502
2
DALE JARRETT RACING ADVENTURE, INC.
FORM 10-Q
For the quarterly period ended JuneSeptember 30, 2009
INDEX
Page
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 10
Item 4T. Controls and Procedures 1011
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 1A. Risk Factors 12
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security
Holders 12
Item 5. Other Information 12
Item 6. Exhibits 12
SIGNATURES
EXPLANATORY NOTE
The registrant is amending its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009, to restate the financial statements to
reflect a $50,000 charge to stock based compensation. Except for the
foregoing, no other information included in our original Form 10-Q for
the quarter ended September 30, 2009, as amended, is amended by the
Form 10-Q/A.
3
PART I
Item I - FINANCIAL STATEMENTS
Dale Jarrett Racing Adventure, Inc.
Balance Sheets
JuneSeptember 30, 2009 December 31,
2009 2008
------------ -----------
(Unaudited)
(RESTATED)
ASSETS
- ------
Current assets:
Cash $ 313,855281,159 $ 522,695
Accounts receivable 237,383108,097 51,725
Note receivable 10,000 -
Inventory 24,18610,803 5,522
Prepaid expenses and other current assets 163,494159,630 140,883
---------- ----------
Total current assets 748,918559,689 720,825
---------- ----------
Property and equipment, at cost, net of
accumulated depreciation of $657,418$722,139 and $628,355 592,253$628,353 609,976 604,295
---------- ----------
Other assets 10,558- 6,684
---------- ----------
$1,351,729$1,169,665 $1,331,804
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------
Current liabilities:
Current portion of long-term debt $ 24,50223,252 $ 28,634
Accounts payable 126,39758,975 198,121
Accrued expenses 20,84333,206 15,337
Deferred revenue 1,125,2501,070,262 946,469
---------- ----------
Total current liabilities 1,296,9921,185,695 1,188,561
---------- ----------
Long-term debt 60,20554,242 71,827
---------- ----------
Stockholders' equity (deficit):
PreferredCommon stock, $.0001$.001 par value, 5,000,000 shares authorized
Common stock, $.0001 par value, 200,000,000 - -
shares authorized, 24,510,502 and 24,995,502
shares issued and outstanding 24,511 24,995
Additional paid-in capital 6,112,4206,162,420 6,095,936
Accumulated (deficit) (6,142,399)(6,257,203) (6,049,515)
---------- ----------
(5,468)(70,272) 71,416
---------- ----------
$1,351,729$1,169,665 $1,331,804
========== ==========
See accompanying notes to financial statements.
4
Dale Jarrett Racing Adventure, Inc.
Statements of Operations
For The Three Months and SixNine Months Ended JuneSeptember 30, 2009 and 2008
(Unaudited)
Three Months SixNine Months
2009 2008 2009 2008
---------- ---------- ---------- ----------
(RESTATED)
Sales $ 847,166662,029 $ 851,682 $1,294,653 $1,268,469550,186 $1,956,682 $1,818,655
Cost of sales and services 338,411 365,656 584,751 611,467357,229 274,133 941,980 885,599
---------- ---------- ---------- ----------
Gross profit 508,755 486,026 709,902 657,002304,800 276,053 1,014,702 933,056
---------- ---------- ---------- ----------
Expenses
General and administrative
- non cash stock compensation 16,000 - 16,000- 66,000 -
General and administrative 417,858 417,710 784,585 850,675398,640 357,935 1,183,225 1,208,610
---------- ---------- ---------- ----------
433,858 417,710 800,585 850,675398,640 357,935 1,249,225 1,208,610
---------- ---------- ---------- ----------
Income (loss)(Loss) from operations 74,896 68,316 (90,684) (193,673)(93,840) (81,882) (234,523) (275,554)
---------- ---------- ---------- ----------
Other income and (expense):
Interest income 200 4,351 748 10,7377,877 11,589 8,625 22,326
Other income 22,502 - 22,502 -
Interest expense (1,413) (1,930) (2,949) (5,650)(1,344) (3,131) (4,293) (8,781)
---------- ---------- ---------- ----------
(1,213) 2,421 (2,201) 5,08729,035 8,458 26,834 13,545
---------- ---------- ---------- ----------
Income (loss)(Loss) before taxes 73,683 70,737 (92,885) (188,586)(64,805) (73,424) (207,689) (262,009)
Income taxes - - - -
---------- ---------- ---------- ----------
Net income (loss) $ 73,683(64,805) $ 70,737(73,424) $ (92,885)(207,689) $ (188,586)(262,009)
========== ========== ========== ==========
Per share information:
Basic and diluted (loss)
per share $ 0.00(0.00) $ 0.00(0.00) $ (0.00)(0.01) $ (0.01)
========== ========== ========== ==========
Weighted average shares
Outstanding- basic 24,310,502and diluted 24,510,502 25,245,502 24,410,502 25,245,502
========== ========== ========== ==========
Weighted average shares
Outstanding- fully diluted 24,310,502 25,245,502 24,410,50224,377,169 25,245,502
========== ========== ========== ==========
See accompanying notes to financial statements.
5
Dale Jarrett Racing Adventure, Inc.
Statements of Cash Flows
For The SixNine Months Ended JuneSeptember 30, 2009 and 2008
(Unaudited)
2009 2008
---------- ----------
(RESTATED)
Net cash provided by (used in) operating
activities $ (143,125)(125,786) $ (285,368)(480,192)
---------- ----------
Cash flows from investing activities:
Acquisition of plant and equipment (49,960) (234,535)(92,783) (271,312)
---------- ----------
Net cash (used in) investing activities (49,960) (234,535)(92,783) (271,312)
---------- ----------
Cash flows from financing activities:
Repayment of notes payable (15,754) (13,231)
Repayment of officer loan - (100,000)(22,967) (20,896)
---------- ----------
Net cash (used in) financing activities (15,754) (113,231)(22,967) (20,896)
---------- ----------
(Decrease) in cash (208,840) (633,134)(241,536) (772,400)
---------- ----------
Cash and cash equivalents, beginning
of period 522,695 1,323,215
---------- ----------
Cash and cash equivalents,
end of period $ 313,855281,159 $ 690,081550,815
========== ==========
See accompanying notes to financial statements.
6
DALE JARRETT RACING ADVENTURE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNESEPTEMBER 30, 2009
(UNAUDITED)
(1) Basis Of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
(GAAP) for interim financial information and Rule 8.03 of Regulation
SX. They do not include all of the information and footnotes required
by GAAP for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been
included.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year. For
further information, refer to the financial statements of the Company
as of and for the year ended December 31, 2008, including notes thereto
included in the Company's Form 10-K.
In preparing the accompanying financial statements, we have evaluated
subsequent events through November 13, 2009, the issuance date of this
Quarterly Report on Form 10-Q. We have determined that no events or
transactions have occurred subsequent to September 30, 2009, which
require recognition or disclosure in the financial statements.
(2) Earnings Per Share
The Company calculates net income (loss) per share as required by Statement of FinancialThe
FASB Accounting Standards (SFAS) 128, "Earnings per
Share."Codification and the Hierarchy of Generally
Accepted Accounting Principles. Basic earnings (loss) per share is
calculated by dividing net income (loss) by the weighted average number
of common shares outstanding for the period. Diluted earnings (loss)
per share is calculated by dividing net income (loss) by the weighted
average number of common shares and dilutive common stock equivalents
outstanding. During periods when anti-dilutive commons stock
equivalents are not considered in the computation.
(3) Inventory
Inventory is valued at the lower of cost or market on a first-in
first-out basis and consists primarily of finished goods and includes
primarily promotional items that bear the Company's logo.
(4) Stockholders' Equity
During January 2009 the Company retired 855,000 shares of common stock
repurchased in 2008.
During April 2009 the Company extended the expiration date of 3,500,000
outstanding options for a period of five years. The exercise price
remained at $.15 per share. There was no chargeThe Company charged $50,000 to operations
related to this extension.7
During April 2009, the Company issued 400,000 shares of common stock to
an officer with a fair value of $16,000 to an officer which was charged to operations
during the period.
(5) Basis of Reporting
The Company's financial statements are presented on a going concern
basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business.
7
The Company has experienced a significant loss from operations as a
result of its investment necessary to achieve its operating plan, which
is long-range in nature. From inception to JuneSeptember 30, 2009, the
Company incurred net losses of $6,142,399$6,257,203 and for the sixnine months ended
JuneSeptember 30, 2009, the Company incurred a net loss of $92,885.$207,689. In
addition, the Company has a working capital deficit of $548,074$626,006 at
JuneSeptember 30, 2009.
The Company's ability to continue as a going concern is contingent upon
its ability to attain profitable operations and secure financing. In
addition, the Company's ability to continue as a going concern must be
considered in light of the problems, expenses and complications
frequently encountered by entrance into established markets and the
competitive environment in which the Company operates.
The Company is pursuing equity financing for its operations. Failure to
secure such financing or to raise additional capital or attain
materially profitable operations may result in the Company depleting
its available funds and not being able pay its obligations.
The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may result
from the possible inability of the Company to continue as a going
concern.
(6) Correction of an Error
During March 2010, the Company determined that the value assigned to
the change in the terms of certain options to purchase common shares
during April 2009, which had been valued at $0 should have been valued
at $50,000 to correctly reflect the fair market value of the options.
The accompanying financial statements have been restated to reflect
this $50,000 charge to stock based compensation. The adjustment
increased the net loss for the nine months ended September 30, 2009,
from $(157,689) to $(207,689) or $(.01) per share.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Trends and Uncertainties. Demand for the Corporation's products are
dependent on, among other things, general economic conditions which are
cyclical in nature. Inasmuch as a major portion of the Corporation's
activities are the receipt of revenues from its driving school services
and products, the Corporation's business operations may be adversely
affected by the Corporation's competitors and prolonged recessionary
periods.
There are no known trends, events or uncertainties that have or are
reasonably likely to have a material impact on the corporation's short
term or long term liquidity. Sources of liquidity both internal and
external will come from the sale of the corporation's products as well
as the private sale of the Corporation's stock. There are no material
commitments for capital expenditure at this time. There are no trends,
events or uncertainties that have had or are reasonably expected to
have a material impact on the net sales or revenues or income from
continuing operations. There are no significant elements of income or
loss that do not arise from the Corporation's continuing operations.
There are no known causes for any material changes from period to
period in one or more line items of the corporation's financial
statements.
The Corporation currently has classes planned through December 2009.2010.
Capital and Source of Liquidity. The Corporation currently has no
material commitments for capital expenditures. The Corporation has no
plans for future capital expenditures such as additional race cars at
this time.
The Corporation believes that there will be sufficient capital from
revenues to conduct operations for the next twelve(12) months.
Presently, the Corporation's revenue and cash comprises one
hundred(100) percent of the total cash necessary to conduct operations.
Future revenues from classes and events will determine the amount of
additional financing necessary to continue operations.
The board of directors has no immediate offering plans in place. The
board of directors shall determine the amount and type of financing as
the Corporation's financial situation dictates.
For the sixnine months ended JuneSeptember 30, 2009, the Corporation acquired
plant and equipment of $49,960$92,783 resulting in net cash used in investing
activities of $49,960.$92,783.
Comparatively, for the sixnine months ended JuneSeptember 30, 2008, the
Corporation acquired plant and equipment of $234,535$271,312 resulting in net
cash used in investing activities of $234,535.$271,312.
9
For the sixnine months ended JuneSeptember 30, 2009, the Corporation reduced
its outstanding debt by repaying notes payable of $15,754.$22,967. As a
result, the Corporation had net cash used in financing activities of
$15,754$22,967 for the sixnine months ended JuneSeptember 30, 2009.
Comparatively, for the sixnine months ended JuneSeptember 30, 2008, the
Corporation reduced its outstanding debt by repaying notes payable of
$13,231 and
repaying an officer loan of $100,000.$20,896. As a result, the Corporation had net cash used in financing
activities of $113,231$20,896 for the sixnine months ended JuneSeptember 30, 2008.
On a long term basis, liquidity is dependent on continuation of
operation and receipt of revenues.
Results of Operations.
For the three months ended JuneSeptember 30, 2009, the Corporationregistrant had sales
of $847,166$662,029 with cost of sales of $338,411$357,229 for a gross profit of
$508,755.
For the three months ended June 30, 2008, the Corporation had sales of
$851,682 with cost of sales of $365,656 for a gross profit of $486,026.
For the three months ended June 30, 2009, the Corporation had general
and administrative expenses- non cash stock compensation of $16,000 and
general and administrative expenses of $417,858.$304,800.
Comparatively, for the three months ended JuneSeptember 30, 2008, the
Corporationregistrant had sales of $550,186 with cost of sales of $274,133 for a
gross profit of $276,053. The increase in revenue of $112,000 resulted
in an increase in cost of sales of $83,000 due to increased customers
and related costs to service those extra customers.
For the three months ended September 30, 2009, the registrant had
general and administrative expenses of $417,710.$398,640. Comparatively, for
the three months ended September 30, 2008, the registrant had general
and administrative expenses of $357,935. The percentage of general and
administrative expenses to revenues for the three months ended
JuneSeptember 30, 2009 increased slightlydecreased to 60.21% from 49% to 51%65.06% for the three months
ended June
30, 2008. Management's continues its ongoing effort to maintain and/or
reduce these types of expenses.
For the six months ended June 30, 2009, the Corporation had sales of
$1,294,653 with cost of sales of $584,751 for a gross profit of
$709,902.
For the six months ended June 30, 2008, the Corporation had sales of
$1,268,469 with cost of sales of $611,467 for a gross profit of
$657,002.
For the six months ended June 30, 2009, the Corporation had general and
administrative expenses- non cash stock compensation of $16,000 and
general and administrative expenses of $784,585. Comparatively, for
the three months ended June 30, 2008, the Corporation had general and
administrative expenses of $850,675. The percentage of general and
administrative expenses to revenues for the six months ended June 30,
2009 decreased from 67%% to 62% for the six months ended JuneSeptember 30, 2008 due to management's ongoing effort to maintain
and/or reduce these types of expenses.
For the nine months ended September 30, 2009, the registrant had sales
of $1,956,682 with cost of sales of $941,980 for a gross profit of
$1,014,702.
Comparatively, for the nine months ended September 30, 2008, the
registrant had sales of $1,818,655 with cost of sales of $885,599 for a
gross profit of $933,056. The increase in revenue of $138,000 resulted
in an increase in cost of sales of $56,000 due to increased customers
and related costs to service those extra customers.
For the nine months ended September 30, 2009, the registrant had
general and administrative expenses of $1,183,225. Comparatively, for
the nine months ended September 30, 2008, the registrant had general
and administrative expenses of $1,208,610. The percentage of general
and administrative expenses to revenues for the three months ended
September 30, 2009 decreased to 60.47% from 66.46% for the nine months
ended September 30, 2008 due to less event days and management's
ongoing effort to maintain and/or reduce these types of expenses.
10
The non-cash stock compensation for the nine months ended September 30,
2009 consisted of 400,000 shares of common stock issued for services
valued at $16,000. The value assigned to the shares issued was based
upon the trading value of the registrant's common stock at the date the
shares were authorized by the registrant's board of directors. In
addition, during April 2009, the Company extended the expiration date of
3,500,000 outstanding options for a period of five years. The exercise
price remained at $.15 per share. The Company charged $50,000 to
operations related to this extension.
Plan of Operation. The Corporation may experience problems; delays,
expenses and difficulties sometimes encountered by an enterprise in the
Corporation's stage, many of which are beyond the Corporation's10
control. These include, but are not limited to, unanticipated problems
relating to additional costs and expenses that may exceed current
estimates and competition.
The Corporation is not delinquent in any of its obligations even though
the Corporation has generated limited operating revenues. The
Corporation intends to market its products and services utilizing cash
made available from operations. The Corporation's management is of the
opinion that future revenues will be sufficient to pay its expenses for
the next twelve months.
Our auditors have expressed reservations concerning our ability to
continue as a going concern. The Corporation has incurred significant
losses from operations. This factor raises substantial doubt about our
ability to continue as a going concern.
Our ability to continue as a going concern is contingent upon our ability
to increase revenues, increase ownership equity and attain profitable
operations. In addition, the Corporation's ability to continue as a
going concern must be considered in light of the problems, expenses and
complications frequently encountered by entrance into established markets
and the competitive environment in which the Corporation operates.
The Corporation is not currently pursuing financing for its operations.
The Corporation is seeking to expand its revenue base. Failure to expand
its revenue base may result in the Corporation depleting its available
funds and not being able pay its obligations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not consider the effects of interest rate movements to be a
material risk to our financial condition. We do not hold any
derivative instruments and do not engage in any hedging activities.
11
Item 4T. Controls and Procedures.Procedures
During the three months ended JuneSeptember 30, 2009, there were no changes
in our internal controls over financial reporting (as defined in Rule
13a-
15(f)13a-15(f) and 15d-15(f) under the Exchange Act) that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management,
including our chief executive officer and chief financial officer, we
conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, as
of JuneSeptember 30, 2009. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
11
controls and procedures to be effective as of JuneSeptember 30, 2009 to
ensure that information required to be disclosed by the issuer in the
reports that it files or submits under the Act is recorded, processed,
summarized and reported, within the time periods specified in the
Commission's rules and forms and to ensure that information required to
be disclosed by an issuer in the reports that it files or submits under
the Act is accumulated and communicated to the issuer's management,
including its principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.
1112
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. not applicable.
Item 1A. Risk Factors. not applicable
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
not applicable.
Item 3. Defaults Upon Senior Securities.
not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
not applicable.
Item 5. Other Information. not applicable.
Item 6. Exhibits
Exhibit 31 - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 32 - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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.
Dated: August 13, 2009May 14, 2010
DALE JARRETT RACING ADVENTURE, INC.
By: /s/Timothy Shannon
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Timothy Shannon, Principal Executive Officer