SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities
Exchange Act of 1934 for Quarterly Period Ended September 30, 2009March 31, 2010
- -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 organization Identification Number)
120 A North Main1313 10th Avenue Newton,Lane SE, Hickory, NC 28658
- -----------------------------------------------------------------------28602
(Address of principal executive offices, 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,
October 31, 2009:April 30, 2010:
Common Stock - 24,510,502
2
DALE JARRETT RACING ADVENTURE, INC.
FORM 10-Q
For the quarterly period ended September 30, 2009March 31, 2010
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. Controls and Procedures 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 1211
Item 1A. Risk Factors 1211
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 1211
Item 3. Defaults upon Senior Securities 1211
Item 4. Submission of Matters to a Vote of Security
Holders 1211
Item 5. Other Information 1211
Item 6. Exhibits 1211
SIGNATURES
3
PART I
Item I - FINANCIAL STATEMENTS
Dale Jarrett Racing Adventure, Inc.
Balance Sheets
September 30, December 31,
2009 2008
------------ -----------
(Unaudited)
ASSETS
- ------
Current assets:
Cash $ 281,159 $ 522,695
Accounts receivable 108,097 51,725
Inventory 10,803 5,522
Prepaid expenses and other current assets 159,630 140,883
---------- ----------
Total current assets 559,689 720,825
---------- ----------
Property and equipment, at cost, net of
accumulated depreciation of $722,139 and $628,353 609,976 604,295
---------- ----------
Other assets - 6,684
---------- ----------
$1,169,665 $1,331,804
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------
Current liabilities:
Current portion of long-term debt $ 23,252 $ 28,634
Accounts payable 58,975 198,121
Accrued expenses 33,206 15,337
Deferred revenue 1,070,262 946,469
---------- ----------
Total current liabilities 1,185,695 1,188,561
---------- ----------
Long-term debt 54,242 71,827
---------- ----------
Stockholders' equity (deficit):
Common stock, $.001 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 6,112,420 6,095,936
Accumulated (deficit) (6,207,203) (6,049,515)
---------- ----------
(70,272) 71,416
---------- ----------
$1,169,665 $1,331,804
========== ==========
Dale Jarrett Racing Adventure, Inc.
Condensed Balance Sheets
March 31, December 31,
2010 2009
-------- -----------
(Unaudited)
ASSETS
Current assets:
Cash $ 383,971 $ 544,563
Accounts receivable 110,965 58,484
Spare parts and supplies 155,507 149,844
Prepaid expenses and other current assets 35,687 64,494
----------- -----------
Total current assets 686,130 817,385
----------- -----------
Property and equipment, at cost, net of
accumulated depreciation of $790,992
and $757,747 571,869 574,368
----------- -----------
Other assets 3,600 3,600
----------- -----------
$ 1,261,599 $1,395,353
=========== ===========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 24,008 $ 23,627
Accounts payable 54,124 152,422
Accrued expenses 52,177 34,026
Deferred revenue 1,171,988 1,153,313
----------- -----------
Total current liabilities 1,302,297 1,363,388
----------- -----------
Long-term debt 42,056 48,182
----------- -----------
Stockholders' (deficit):
Preferred stock, $.0001 par value,
5,000,000 shares authorized, - -
Common stock, $.0001 par value,
200,000,000 shares authorized, 24,510,502
issued and 24,014,752 and 24,216,002
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 294,500 shares,
respectively, at cost (29,998) (17,867)
Accumulated (deficit) (6,239,687) (6,185,281)
----------- -----------
Total stockholders' deficit (82,754) (16,217)
----------- -----------
$ 1,261,599 $ 1,395,353
=========== ===========
See accompanying notes to condensed financial statements.statements
4
Dale Jarrett Racing Adventure, Inc.
Condensed Statements of Operations
For The Three Months Ended March 31, 2010 and Nine Months Ended September 30, 2009
(Unaudited)
2010 2009
-------- --------
Sales $ 598,637 $ 447,487
Cost of sales and 2008
(Unaudited)
Three Months Nine Months
2009 2008 2009 2008
---------- ---------- ---------- ----------
Sales $ 662,029 $ 550,186 $1,956,682 $1,818,655
Cost of sales and services 357,229 274,133 941,980 885,599
---------- ---------- ---------- ----------
Gross profit 304,800 276,053 1,014,702 933,056
---------- ---------- ---------- ----------
Expenses
General and administrative
- non cash stock compensation - - 16,000 -
General and administrative 398,640 357,935 1,183,225 1,208,610
---------- ---------- ---------- ----------
398,640 357,935 1,199,225 1,208,610
---------- ---------- ---------- ----------
(Loss) from operations (93,840) (81,882) (184,523) (275,554)
---------- ---------- ---------- ----------
Other income and (expense):
Interest income 7,877 11,589 8,625 22,326
Other income 22,502 - 22,502 -
Interest expense (1,344) (3,131) (4,293) (8,781)
---------- ---------- ---------- ----------
29,035 8,458 26,834 13,545
---------- ---------- ---------- ----------
(Loss) before taxes (64,805) (73,424) (157,689) (262,009)
Income taxes - - - -
---------- ---------- ---------- ----------
Net (loss) $ (64,805) $ (73,424) $ (157,689) $ (262,009)
========== ========== ========== ==========
Per share information:
Basic and diluted (loss)
per share $ (0.00) $ (0.00) $ (0.01) $ (0.01)
========== ========== ========== ==========
Weighted average shares
Outstanding- basic and diluted 24,510,502 25,245,502 24,377,169 25,245,502
========== ========== ========== ==========
services 285,886 246,340
----------- -----------
Gross profit 312,751 201,147
----------- -----------
General and administrative expenses 366,538 366,727
----------- -----------
(Loss) from operations (53,787) (165,580)
Other income and (expense):
Interest income 553 548
Interest expense (1,172) (1,536)
----------- -----------
(619) (988)
----------- -----------
(Loss) before taxes (54,406) (166,568)
Income taxes - -
----------- -----------
Net (loss) $ (54,406) $ (166,568)
Per share information:
Basic and diluted (loss) per share $ (0.00) $ (0.01)
=========== ===========
Weighted average shares outstanding 24,038,963 24,110,502
=========== ===========
See accompanying notes to condensed financial statements.
5
Dale Jarrett Racing Adventure, Inc.
Condensed Statements of Cash Flows
For The NineThree Months Ended September 30,March 31, 2010 and 2009
and 2008
(Unaudited)
2010 2009
2008
---------- ------------------ --------
Net cash provided by (used in) operating activities $ (125,786)(111,970) $ (480,192)
---------- ----------(207,644)
----------- -----------
Cash flows from investing activities:
Acquisition of plantproperty and equipment (92,783) (271,312)
---------- ----------(30,746) (24,560)
----------- -----------
Net cash (used in) investing activities (92,783) (271,312)
---------- ----------(30,746) (24,560)
Cash flows from financing activities:
Repayment of notes payable (22,967) (20,896)
---------- ----------long-term debt (5,745) (7,825)
Purchase of treasury stock (12,131) -
----------- -----------
Net cash (used in) financing activities (22,967) (20,896)
---------- ----------(17,876) (7,825)
(Decrease) in cash (241,536) (772,400)
---------- ----------(160,592) (240,029)
----------- -----------
Cash and cash equivalents,
beginning of period 544,563 522,695
1,323,215
---------- --------------------- -----------
Cash and cash equivalents,
end of period $ 281,159383,971 $ 550,815
========== ==========282,666
=========== ===========
Supplemental Cash Flow Information:
Cash paid for interest 1,172 1,536
=========== ===========
Cash paid for income taxes - -
=========== ===========
See accompanying notes to condensed financial statements.
6
DALE JARRETT RACING ADVENTURE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2009March 31, 2010
(UNAUDITED)
(1) Basis Of Presentation
The accompanying unaudited consolidatedcondensed 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, 2008,2009, 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 The
FASB Accounting Standards 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 valuedSpare 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) Property and Equipment
Property and equipment are recorded at cost and are depreciated using
the lowerstraight-line method over the estimated useful lives of cost or market on a first-in
first-out basisthe
respective assets, ranging from 3 to 10 years. Major additions are
capitalized, while minor additions and consists primarilymaintenance and repairs, which
do not extend the useful life of finished goods and includes
primarily promotional items that bear the Company's logo.
(4)an asset, are expensed as incurred.
7
DALE JARRETT RACING ADVENTURE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2010
(UNAUDITED)
(5) Stockholders' Equity
During January 2009the quarter ended March 31, 2010, the Company retired 855,000purchased a total
of 201,250 shares of its common stock repurchasedfor cash aggregating $12,131,
which is classified as treasury stock in 2008.
During April 2009 the accompanying balance sheet
as of March 31, 2010.
(6) Legal Proceedings
The Company extendedis a defendant in litigation related to an alleged breach
of contract and the expiration datecase is currently pending in the circuit court of
3,500,000
outstanding options for a period of five years.Talladega County, Alabama. The exercise price
remained at $.15 per share. There was no charge to operationsCompany is currently in settlement
negotiations and has accrued $17,500 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 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.
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 September 30, 2009, the
Company incurred net losses of $6,207,203 and for the nine months ended
September 30, 2009, the Company incurred a net loss of $157,689. In
addition, the Company has a working capital deficit of $626,006 at
September 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.contingency.
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.
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)twelve (12) months.
Presently, the Corporation's revenue and cash comprises one hundred(100)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 ninethree months ended September 30, 2009,March 31, 2010, the Corporation acquired
plant and equipment of $92,783$30,746 resulting in net cash used in investing
activities of $92,783.$30,746.
Comparatively, for the ninethree months ended September 30, 2008,March 31, 2009, the
Corporation acquired plant and equipment of $271,312$24,560 resulting in net
cash used in investing activities of $271,312.$24,560.
9
For the ninethree months ended September 30, 2009,March 31, 2010, the Corporation reduced its
outstanding debt by repaying notes payable of $22,967.$5,745 and purchased
treasury stock of $12,131. As a result, the Corporation had net cash
used in financing activities of $22,96717,876 for the ninethree months ended September 30, 2009.March
31, 2010.
Comparatively, for the ninethree months ended September 30, 2008,March 31, 2009, the
Corporation reduced its outstanding debt by repaying notes payable of
$20,896.$7,825. As a result, the Corporation had net cash used in financing
activities of $20,896$7,825 for the ninethree months ended September 30, 2008.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 September 30,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 $662,029$447,487 with cost of sales of $357,229$246,340 for a
gross profit of $304,800.
Comparatively, for the three months ended September 30, 2008, the
registrant had sales of $550,186 with cost of sales of $274,133 for a
gross profit of $276,053.$201,147. The increase in revenue of $112,000$151,150, or
33.8%, resulted in an increase in cost of sales of $83,000$39,546, or 16.1%,
due to increased customers and related costs to service those extra
customers. The gross profit percentage increased from 45.0% to 52.2%
because of increased sales and relatively fixed track and race
equipment costs.
For the three months ended September 30,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 $398,640. Comparatively, for
the three months ended September 30, 2008, the registrant had general
and administrative expenses of $357,935.$366,727. The percentage of general and
administrative expenses to revenues for the three months ended September 30, 2009March
31, 2010 decreased to 60.21%61.23% from 65.06%81.95% for the three months ended
September 30, 2008 due to management's ongoing effort to maintain
and/or reduce these types of expenses.
For the nine months ended September 30,March 31, 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.
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.
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.
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.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.
Item 4T. Controls and Procedures
During the three months ended September 30, 2009,March 31, 2010, 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.11
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 September 30, 2009.March 31, 2010. Based on this evaluation, our chief executive
officer and chief principal financial officers have concluded such
controls and procedures to be effective as of September 30, 2009March 31, 2010 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.
1211
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: December 8, 2009May 14, 2010
DALE JARRETT RACING ADVENTURE, INC.
By: /s/Timothy Shannon
- ---------------------------
Timothy Shannon, Principal Executive Officer