SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended March 31, 2010
-2011
-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.
- --------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-3564984
(State or other jurisdiction (I.R.S. Employer
of incorporation or organizationorganization) Identification Number)
1313 10th Avenue Lane SE, Hickory, NC 28602
(Address of principal executive offices, Zipoffices) (Zip Code)
(888) 467-2231
(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 has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (section 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). 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,
April 30, 2010:May 13, 2011:
Common Stock - 24,510,502
2
DALE JARRETT RACING ADVENTURE, INC.
FORM 10-Q
For the quarterly period ended March 31, 20102011
INDEX
Page
----
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.4. Controls and Procedures 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 1A. Risk Factors 11
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security
Holders(Removed and Reserved) 11
Item 5. Other Information 11
Item 6. Exhibits 11
SIGNATURES
3
PART I
Item I1. - FINANCIAL STATEMENTS (UNAUDITED)
Dale Jarrett Racing Adventure, Inc.
Condensed Balance Sheets
March 31, 2011 and December 31, 2010
2009March 31, December 31,
2011 2010
-------- -----------
(Unaudited)
ASSETS
Current assets:
Cash $ 383,971202,517 $ 544,563569,592
Accounts receivable 110,965 58,48454,421 9,372
Spare parts and supplies 155,507 149,844189,505 185,105
Prepaid expenses and other current assets 35,687 64,494161,191 38,128
----------- -----------
Total current assets 686,130 817,385607,634 802,197
----------- -----------
Property and equipment, at cost, net of
accumulated depreciation of $790,992$914,777
and $757,747 571,869 574,368$883,659 420,954 452,072
----------- -----------
Other assets 3,600 3,60018,510 13,510
----------- -----------
$ 1,261,599 $1,395,3531,047,098 $ 1,267,779
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 24,00825,390 $ 23,62725,142
Accounts payable 54,124 152,42264,468 87,845
Accrued expenses 52,177 34,02631,631 146,697
Deferred revenue 1,171,988 1,153,3131,028,205 946,922
----------- -----------
Total current liabilities 1,302,297 1,363,3881,149,694 1,206,606
----------- -----------
Long-term debt 42,056 48,18218,737 25,055
----------- -----------
Stockholders' equity (deficit):
Preferred stock, $.0001 par value,
5,000,000 shares authorized, none issued - -
Common stock, $.0001 par value,
200,000,000 shares authorized, 24,510,502
issued and 24,014,752 and 24,216,00223,838,852 shares outstanding at March 31, 2010
and December 31, 2009, respectively 2,451 2,451
Additional paid-in capital 6,184,480 6,184,480
Treasury stock, 495,750 and 294,500671,650 shares,
respectively, at cost (29,998) (17,867)(39,009) (39,009)
Accumulated (deficit) (6,239,687) (6,185,281)deficit (6,269,255) (6,111,804)
----------- -----------
Total stockholders' deficit (82,754) (16,217)equity (deficit) (121,333) 36,118
----------- -----------
$ 1,261,5991,047,098 $ 1,395,3531,267,779
=========== ===========
See accompanying notes to unaudited condensed financial statementsstatements.
4
Dale Jarrett Racing Adventure, Inc.
Condensed Statements of Operations
For The Three Months Ended March 31, 2011 and 2010
and 2009
(Unaudited)
2011 2010
2009
-------- ------------ ----
Sales $ 598,637539,261 $ 447,487598,637
Cost of sales and services 277,692 285,886 246,340
----------- -----------
Gross profit 261,569 312,751 201,147
----------- -----------
General and administrative expenses 418,051 366,538 366,727
----------- -----------
(Loss)Loss from operations (156,482) (53,787) (165,580)
Other income and (expense):
Interest income 179 553 548
Interest expense (1,148) (1,172) (1,536)
----------- -----------
(969) (619) (988)
----------- -----------
(Loss)Loss before taxes (157,451) (54,406) (166,568)
Income taxes - -
----------- -----------
Net (loss)loss $ (157,451) $ (54,406)
$ (166,568)=========== ===========
Per share information:
Basic and diluted (loss)loss per share $ (0.00)(0.01) $ (0.01)(0.00)
=========== ===========
Weighted average shares outstanding 23,838,852 24,038,963 24,110,502
=========== ===========
See accompanying notes to unaudited condensed financial statements.
5
Dale Jarrett Racing Adventure, Inc.
Condensed Statements of Cash Flows
For The Three Months Ended March 31, 2011 and 2010
and 2009
(Unaudited)
2011 2010
2009
-------- ------------ ----
Net cash (used in)used in operating activities $ (356,005) $ (111,970)
$ (207,644)
----------- --------------------- ----------
Cash flows from investing activities:
Acquisition of property and equipment - (30,746)
(24,560)
----------- -----------Increase in other assets (5,000) -
---------- ----------
Net cash (used in)used in investing activities (5,000) (30,746)
(24,560)---------- ----------
Cash flows from financing activities:
Repayment of long-term debt (6,070) (5,745) (7,825)
Purchase of treasury stock - (12,131)
-
----------- --------------------- ----------
Net cash (used in)used in financing activities (6,070) (17,876)
(7,825)
(Decrease)---------- ----------
Net decrease in cash (367,075) (160,592)
(240,029)
----------- --------------------- ----------
Cash, and cash equivalents, beginning of period 569,592 544,563
522,695
----------- --------------------- ----------
Cash, and cash equivalents, end of period $ 202,517 $ 383,971
$ 282,666
=========== ===================== ==========
Supplemental Cash Flow Information:
Cash paid for interest $ 1,148 $ 1,172
1,536
=========== ===================== ==========
Cash paid for income taxes $ - $ -
=========== ===================== ==========
See accompanying notes to unaudited condensed financial statements.
6
DALE JARRETT RACING ADVENTURE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MarchMARCH 31, 20102011
(UNAUDITED)
(1) Basis Of Presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with U.S. 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, 2009,2010, including notes thereto included in
the Company's Form 10-K.
(2) EarningsRecent Accounting Pronouncements
There are no new accounting pronouncements for which adoption is
expected to have a material effect on our financial statements in
future accounting periods.
(3) Basic and Diluted Income (Loss) Per Share
The Company calculates netbasic and diluted income (loss) per share as
required by Thethe FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles.Codification. Basic earningsincome
(loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding for the period.
Diluted earningsincome (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 we report a net
loss, anti-dilutive commonscommon stock equivalents are not considered in the
computation. (3)We did not have any dilutive common stock equivalents
during each of the three months ended March 31, 2011 and 2010.
(4) Spare Parts and Supplies
Spare parts and supplies include engine parts, tires, and other supplies
used in the racecar operation and are recorded at cost.
(4)(5) Property and Equipment
Property and equipment are recorded at cost and are depreciated using
the straight-line method over the estimated useful lives of the
respective assets, ranging from 3 to 10 years. Major additions are
capitalized, while minor additions and maintenance and repairs, which
do not extend the useful life of an asset, are expensed as incurred.
7
DALE JARRETT RACING ADVENTURE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS(6) Stockholders' Equity (Deficit)
During the three months ended March 31, 2010
(UNAUDITED)
(5) Stockholders' Equity
During the quarter ended March 31,2011 and 2010, the Company
purchased a total of zero and 201,250 shares, respectively, of its own
common stock for cash aggregating $0 and $12,131, which is recorded at
cost and classified as treasury stock in the accompanying condensed
balance sheet
assheets.
(7) Commitments
On August 19, 2010, the Company entered into an agreement with
Talladega Superspeedway, LLC to allow Dale Jarrett Racing Adventure
exclusivity during 2011 in providing stock car ride along programs and
stock car driving experiences to paying customers at Talladega
Superspeedway. Under the terms of March 31, 2010.
(6) Legal Proceedingsthe agreement, the Company agreed to
rent a minimum of 60 days during 2011 for $450,000 payable in four
payments of $112,500 due at the end of each quarter during 2011. The
cost of the agreement is being expensed at the rate of $7,500 per day
used over the 60 days. The Company ismay also use additional days at a
defendant in litigation related to an alleged breachcost of contract and the case is currently pending in the circuit court of
Talladega County, Alabama. The Company is currently in settlement
negotiations and has accrued $17,500 related to this contingency.$7,500 per day during 2011.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Trends and Uncertainties. Demand for the Corporation's services and
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 services and
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 2010.2011.
Capital Resources 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 three months ended March 31, 2011, the Corporation had an
increase in other assets of $5,000 resulting in net cash used in
investing activities of $5,000.
Comparatively, for the three months ended March 31, 2010, the
Corporation acquired plant and equipment of $30,746 resulting in net
cash used in investing activities of $30,746.
Comparatively,9
For the three months ended March 31, 2011, the Corporation reduced its
outstanding debt by repaying notes payable of $6,070. As a result, the
Corporation had net cash used in financing activities of $$6,070 for
the three months ended March 31, 2009, the
Corporation acquired plant and equipment of $24,560 resulting in net
cash used in investing activities of $24,560.
9
For2011.
Comparatively, for the three months ended March 31, 2010, the
Corporation reduced its outstanding debt by repaying notes payable of
$5,745 and purchased treasury stock of $12,131. As a result, the
Corporation had net cash used in financing activities of 17,876$17,876 for
the three months ended March 31, 2010.
Comparatively, for the three months ended March 31, 2009, the
Corporation reduced its outstanding debt by repaying notes payable of
$7,825. As a result, the Corporation had net cash used in financing
activities of $7,825 for the three months ended March 31, 2009.
On a long term basis, liquidity is dependent on continuation of
operation and receipt of revenues.
Results of Operations. For the three months ended March 31, 2011, the
registrant had sales of $539,261 with cost of sales and services of
$277,692 for a gross profit of $261,569.
Comparatively, for the three months ended March 31, 2010, the
registrant had sales of $598,637 with cost of sales of $285,886 for a
gross profit of $312,751. Comparatively, for the three months ended March 31, 2009, the
registrant had sales of $447,487 with cost of sales of $246,340 for a
gross profit of $201,147. The increasedecrease in revenue of $151,150,$59,376, or
33.8%9.92%, resulted in an increasea decrease in cost of sales of $39,546,$8,194, or 16.1%2.87%, due
to increased customers and related costs to service those extradecreased customers. The gross profit percentage increaseddecreased from
45.0%52.2% to 52.2%48.5% because of increaseddecreased sales and relatively fixed track
and race equipment costs.
For the three months ended March 31, 2011, the registrant had general
and administrative expenses of $418,051. Comparatively, for the three
months ended March 31, 2010, the registrant had general and
administrative expenses of $366,538. Comparatively, for the three
months ended March 31, 2009, the registrant had general and
administrative expenses of $366,727. The percentage of general and
administrative expenses to revenues for the three months ended March
31, 2010 decreased2011 increased to 61.23%77.5% from 81.95%61.2% for the three months ended March
31, 20092010 due to increased revenues and management's ongoing
effort to maintain and/or reduce these types of expenses.decreased revenues.
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's
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.
The Corporation is not currently pursuing financing for its operations.
The Corporation is seeking to expand its revenue base.base and believes that
its current cash and revenues will be sufficient to fund operations for
the following twelve months. Failure to expand its revenue base may
result in the Corporation depleting its available funds and not being
able pay its obligations.
10
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.Not applicable for smaller reporting companies.
Item 4T.4. Controls and Procedures
During the three months ended March 31, 2010,2011, there were no changes in
our internal controls over financial reporting (as defined in Rule 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 chiefprincipal 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 March 31, 2010.2011. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such controls
and procedures to be effective as of March 31, 20102011 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.
11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. not applicable.Proceedings
None
Item 1A. Risk Factors. notFactors
Not applicable for smaller reporting companies
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
not applicable.Proceeds
None
Item 3. Defaults Upon Senior Securities.
not applicable.None
Item 4. Submission of Matters to a Vote of Security Holders.
not applicable.(Removed and Reserved)
Item 5. Other Information. not applicable.Information
None
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 Registrantregistrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: May 14, 201013, 2011
DALE JARRETT RACING ADVENTURE, INC.
By: /s/Timothy Shannon
- ---------------------------
Timothy Shannon
PrincipalChief Executive Officer
Principal Financial Officer