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, 20092010
- -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 [ ] 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:November 9, 2010:
Common Stock - 24,510,502
2
DALE JARRETT RACING ADVENTURE, INC.
FORM 10-Q
For the quarterly period ended September 30, 20092010
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 811
Item 3. Quantitative and Qualitative Disclosure About
Market Risk 1013
Item 4T.4. Controls and Procedures 1113
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 1214
Item 1A. Risk Factors 1214
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds 1214
Item 3. Defaults upon Senior Securities 1214
Item 4. Submission of Matters to a Vote of Security
Holders 12(Removed and Reserved) 14
Item 5. Other Information 1214
Item 6. Exhibits 1214
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
September 30, December 31,
2009 2008
------------ -----------
(Unaudited)
(RESTATED)
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 6,162,420 6,095,936
Accumulated (deficit) (6,257,203) (6,049,515)
---------- ----------
(70,272) 71,416
---------- ----------
$1,169,665 $1,331,804
========== ==========
Dale Jarrett Racing Adventure, Inc.
Condensed Balance Sheets
September 30, 2010
September 30, December 31,
2010 2009
------------- ------------
(Unaudited)
ASSETS
Current assets:
Cash $ 244,501 $ 544,563
Accounts receivable 65,601 58,484
Spare parts and supplies 147,218 149,844
Prepaid expenses and other current assets 23,683 64,494
----------- -----------
Total current assets 481,003 817,385
----------- -----------
Property and equipment, at cost,
net of accumulated depreciation
of $850,541 and $757,747 485,190 574,368
------------ ------------
Other Assets 13,511 3,600
------------ ------------
$ 979,704 $ 1,395,353
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt $ 24,543 $ 23,627
Accounts payable 67,241 152,422
Accrued expenses 40,202 34,026
Deferred revenue 811,662 1,153,313
------------ ------------
Total current liabilities 943,648 1,363,388
------------ ------------
Long-term debt 31,642 48,182
------------ ------------
Stockholders' equity (deficit):
Common stock, $.0001 par value,
200,000,000 shares authorized,
24,510,502 issued and 23,838,852
and 24,216,002 shares outstanding
at September 30, 2010 and December
31,2009, respectively 2,451 2,451
Additional paid-in capital 6,184,480 6,184,480
4
Treasury stock, 671,650 and 294,500,
at cost (39,009) (17,867)
Accumulated deficit (6,143,508) (6,185,281)
------------- ------------
4,414 (16,217)
------------- ------------
$ 979,704 $ 1,395,353
============= ============
See accompanying notes to unaudited condensed financial statements.
45
Dale Jarrett Racing Adventure, Inc.
Condensed Statements of Operations
For The Three Months and Nine Months
Ended September 30, 20092010 and 20082009
(Unaudited)
Three Months Nine Months
2010 2009 20082010 2009 2008
---------- ---------- ---------- ----------
(RESTATED)(Restated) (Restated)
Sales $ 955,380 $ 662,029 $ 550,186$2,241,599 $1,956,682 $1,818,655
Cost of sales and services 434,179 357,229 274,1331,009,028 941,980 885,599
---------- ---------- ---------- ----------
Gross profit 521,201 304,800 276,0531,232,571 1,014,702 933,056
---------- ---------- ---------- ----------
Expenses
General and administrative - non-non
cash stock compensation - - 990 66,000 -
General and administrative 359,794 398,640 357,9351,167,754 1,183,225 1,208,610
---------- ---------- ---------- ----------
359,794 398,640 357,9351,168,744 1,249,225 1,208,610
---------- ---------- ---------- ----------
(Loss)Income (loss) from operations 161,407 (93,840) (81,882)63,827 (234,523) (275,554)
---------- ---------- ---------- ----------
Other income and (expense):
Interest income 323 7,877 11,5891,324 8,625 22,326
Other income - 22,502 - 22,502
Loss on disposal of assets - - (18,252) -
Interest expense (1,037) (1,344) (3,131)(5,126) (4,293) (8,781)
---------- ---------- ---------- ----------
(714) 29,035 8,458(22,054) 26,834 13,545
---------- ---------- ---------- ----------
(Loss)Income (loss) before income
taxes 160,693 (64,805) (73,424)41,773 (207,689) (262,009)
Income taxes - - - -
---------- ---------- ---------- ----------
Net income (loss) $ 160,693 $ (64,805) $ (73,424)41,773 $ (207,689) $ (262,009)
========== ========== ========== ==========
Per share information:
Basic and diluted income (loss)
per share $ (0.00)0.01 $ (0.00) $ (0.01)0.00 $ (0.01)
========== ========== ========== ==========
Weighted average shares
Outstanding-outstanding - basic and23,842,927 24,510,502 23,952,862 24,377,169
========== ========== ========== ==========
Weighted average shares
outstanding -
fully diluted 23,842,927 24,510,502 25,245,50223,952,862 24,377,169 25,245,502
========== ========== ========== ==========
See accompanying notes to unaudited condensed financial statements.
56
Dale Jarrett Racing Adventure, Inc.
Condensed Statements of Cash Flows
For Thethe Nine Months Ended September 30, 2010 and 2009
and 2008
(Unaudited)
2010 2009
2008
---------- ----------
(RESTATED)-----------
Net cash provided by (used in)used in operating activities $ (208,389) $ (125,786)
$ (480,192)
---------- ---------------------
Cash flows from investing activities:
Acquisition of plant and equipment (53,917) (92,783)
(271,312)
---------- ---------------------
Net cash (used in) investingused in financing activities (53,917) (92,783)
(271,312)
---------- ---------------------
Cash flows from financing activities:
Repayment of notes payable (15,624) (22,967)
(20,896)Purchase of treasury stock (22,132) -
---------- ---------------------
Net cash (used in)used in financing activities (37,756) (22,967)
(20,896)
---------- ----------
(Decrease)-----------
Decrease in cash (300,062) (241,536)
(772,400)
---------- ---------------------
Cash, and cash equivalents, beginning of period 544,563 522,695
1,323,215
---------- ---------------------
Cash, and cash equivalents, end of period $ 244,501 $ 281,159
$ 550,815
========== =====================
See accompanying notes to unaudited condensed financial statements.
6
DALE JARRETT RACING ADVENTURE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER7
Dale Jarrett Racing Adventure, Inc.
Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)2010
(Unaudited)
(1) Basis Of Presentation
The accompanying unaudited consolidatedcondensed 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, 2008,2009, including notes thereto included in
the Company's Form 10-K.
In preparingRecent Accounting Pronouncements
The following Accounting Standards Codification Updates have been
issued, or became effective, since the accompanyingbeginning of the current period
covered by these financial statements, we have evaluated
subsequent events through November 13, 2009,statements:
Pronouncement Issued Title
ASU No. 2010-01 January 2010 Equity (Topic 505). Accounting for
Distributions to Shareholders with
Components of Stock and Cash - a
consensus of the issuance dateFASB Emerging
Issues Task Force
ASU No. 2010-02 January 2010 Consolidation (Topic 810). Accounting
and Reporting for Decreases in
Ownership of this
Quarterly Report on Form 10-Q. We have determined that no events or
transactions have occurred subsequenta Subsidiary - a Scope
Clarification
ASU No. 2012-03 January 2010 Extractive Activities - Oil and Gas
(Topic 932): Oil and Gas Reserve
Estimation and Disclosures
ASU No. 2010-04 January 2010 Accounting for Various Topics:
Technical Corrections to SEC
Paragraphs
ASU No. 2010-05 January 2010 Compensation - Stock Compensation
(Topic 718): Escrowed Share
Arrangements and the Presumption of
Compensation
ASU No. 2010-06 January 2010 Fair Value Measurements and
Disclosures (Topic 820): Improving
Disclosures about Fair Value
Measurements
8
Dale Jarrett Racing Adventure, Inc.
Notes to Condensed Financial Statements
September 30, 2009, which
require recognition or disclosure2010
(Unaudited)
(1) Basis Of Presentation (Continued)
ASU No. 2010-07 January 2010 Not-for-Profit Entities (Topic 958):
Not-for-Profit Entities - Mergers
and Acquisitions
ASU No. 2010-08 February 2010 Technical Corrections to Various
Topics
ASU No. 2010-09 February 2010 Subsequent Events (Topic 855):
Amendments to Certain Recognition
and Disclosure Requirements
ASU No. 2010-10 February 2010 Consolidation (Topic 810): Amendments
for Certain Investment Funds
ASU No. 2010-11 March 2010 Derivatives and Hedging (Topic 815):
Scope Exception Related to Embedded
Credit Derivatives
ASU No. 2010-12 April 2010 Income Taxes (Topic 740): Accounting
for Certain Tax Effects of the 2010
Health Care Reform Acts (SEC update)
ASU No. 2010-13 April 2010 Compensation - Stock Compensation
(Topic 718): Effect of Denominating
the Exercise Price of a Share-Based
Payment Award in the financial statements.Currency of the
Market in Which the Underlying
Equity Security Trades - a consensus
of the FASB Emerging Issues Task
Force
ASU No. 2010-14 April 2010 Accounting for Extractive Activities -
Oil & Gas - Amendments to Paragraph
932-10-S99-1 (SEC Update)
ASU No. 2010-15 April 2010 Financial Services - Insurance (Topic
944): How Investments Held through
Separate Accounts Affect an
Insurer's Consolidation Analysis of
Those Investments - a consensus of
the FASB Emerging Issues Task Force
ASU No. 2010-16 April 2010 Entertainment - Casinos (Topic 924):
Accruals for Casino Jackpot
Liabilities - a consensus of the
FASB Emerging Issues Task Force
9
Dale Jarrett Racing Adventure, Inc.
Notes to Condensed Financial Statements
September 30, 2010
(Unaudited)
(1) Basis Of Presentation (Continued)
ASU No. 2010-17 April 2010 Revenue Recognition - Milestone Method
(Topic 605): Milestone Method of
Revenue Recognition - a consensus of
the FASB Emerging Issues Task Force
ASU No. 2010-18 April 2010 Receivables (Topic 310): Effect of a
Loan Modification When the Loan is
Part of a Pool That is Accounted for
as a Single Asset - a consensus of
the FASB Emerging Issues Task Force
ASU No. 2010-19 May 2010 Foreign Currency (Topic 830): Foreign
Currency Issues: Multiple Foreign
Currency Exchange Rates
ASU No. 2010-20 July 2010 Receivables (Topic 310): Disclosure
about the Credit Quality of
Financing Receivables and the
Allowance for Credit Losses
ASU No. 2010-21 August 2010 Accounting for Technical Amendments to
Various SEC Rules and Schedules
Amendments to SEC Paragraphs
Pursuance to Release No. 33-9026:
Technical Amendments to Rules,
Forms, Schedules and Codification of
Financial Reporting Policies
ASU No. 2010-22 August 2010 Accounting for Various Topics -
Technical Corrections to SEC
Paragraphs
ASU No. 2010-23 August 2010 Health Care Entities (Topic 954):
Measuring Charity Care for
Disclosure
ASU No. 2010-24 August 2010 Health Care Entities (Topic 954):
Presentation of Insurance Claims and
Related Insurance Recoveries
ASU No. 2010-25 September 2010 Plan Accounting - Defined Contribution
Pension Plans (Topic 962): Reporting
Loans to Participants by Defined
Contribution Pension Plans
ASU No. 2010-26 October 2010 Financial Services Insurance (Topic
944): Accounting for Costs
Associated with Acquiring or
Renewing Insurance Contracts
10
Dale Jarrett Racing Adventure, Inc.
Notes to Condensed Financial Statements
September 30, 2010
(Unaudited)
(2) EarningsBasic 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) 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. The 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 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 $6,257,203 and forFor the nine months ended September 30, 2009, the Company incurred a net loss of $207,689. 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 operations2010, 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 certain2009,
options to purchase 3,000,000 shares of common sharesstock were outstanding
during April 2009, which had been valuedthe periods but were not included in the computation of diluted
earnings per share because their effect would be anti-dilutive.
(3) Spare Parts and Supplies
Spare parts and supplies include engine parts, tires, and other supplies
used in the racecar operation and are recorded at $0 should have been valuedcost.
(4) Property and Equipment
Property and equipment are recorded at $50,000 to correctly reflectcost and are depreciated using
the fair market valuestraight-line method over the estimated useful lives of the
options.
The accompanying financial statements have been restatedrespective assets, ranging from 3 to reflect
this $50,000 charge to stock based compensation. The adjustment
increased10 years. Major additions are
capitalized, while minor additions and maintenance and repairs, which
do not extend the net loss foruseful life of an asset, are expensed as incurred.
(5) Stockholders' Equity (Deficit)
During the three and nine months ended September 30, 2009,
from $(157,689)2010, the Company
purchased 47,900 and 377,150 shares, respectively, of its own common
stock for cash aggregating $2,298 and $21,142, respectively, which is
recorded at cost and classified as treasury stock in the accompanying
condensed balance sheets. Further in April 2010, the Company reissued
20,000 shares of treasury stock with a fair value of $990 to $(207,689) or $(.01)an
employee for services.
(6) 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 the 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
Company may also use additional days at a cost of $7,500 per share.day during
2011.
811
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)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 nine months ended September 30, 2010, the Corporation acquired
plant and equipment of $53,917 resulting in net cash used in investing
activities of $53,917.
Comparatively, for the nine months ended September 30, 2009, the
Corporation acquired plant and equipment of $92,783 resulting in net
cash used in investing activities of $92,783.
Comparatively,12
For the nine months ended September 30, 2010, the Corporation reduced
its outstanding debt by repaying notes payable of $15,624, purchased
treasury stock of $22,132 and issued treasury stock of $990. As a
result, the Corporation had net cash used in financing activities of
$36,766 for the nine months ended September 30, 2008, the
Corporation acquired plant and equipment of $271,312 resulting in net
cash used in investing activities of $271,312.
9
For2010.
Comparatively, for the nine months ended September 30, 2009, the
Corporation reduced its outstanding debt by repaying notes payable of
$22,967. As a result, the Corporation had net cash used in financing
activities of $22,967 for the nine months ended September 30, 2009.
Comparatively, for the nine months ended September 30, 2008, the
Corporation reduced its outstanding debt by repaying notes payable of
$20,896. As a result, the Corporation had net cash used in financing
activities of $20,896 for the nine months ended September 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 September 30, 2010,
the registrant had sales of $955,380 with cost of sales of $434,179 for
a gross profit of $521,201.
Comparatively, for the three months ended September 30, 2009, the
registrant had sales of $662,029 with cost of sales of $357,229 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. The increase in revenue of $112,000$293,351, or
29.5%, resulted in an increase in cost of sales of $83,000$76,950, or 17.7%,
due to increased customerscustomers. The gross profit percentage increased from
46.0% to 54.55% because of increased sales and related costs to service those extra customers.relatively fixed track
and race equipment costs.
For the three months ended September 30, 2010, the registrant had
general and administrative expenses of $359,794. Comparatively, for
the three months ended September 30, 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. The percentage of general and
administrative expenses to revenues for the three months ended
September 30, 20092010 decreased to 60.21%37.7% from 65.06%60.2% for the three months
ended September 30, 20082009 due to management's ongoing effort to maintain
and/or reduce these typesincreased revenues.
For the nine months ended September 30, 2010, the registrant had sales
of expenses.
For$2,241,599 with cost of sales of $1,009,028 for a gross profit of
$1,232,571.
Comparatively, 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$284,917, or
12.7%, resulted in an increase in cost of sales of $56,000$67,048, or 6.64%,
due to increased customerscustomers. The gross profit percentage increased
slightly from 51.86% to 54.99% because of increased sales with
relatively fixed track and related costs to service those extra customers.race equipment costs.
For the nine months ended September 30, 2010, the registrant had
general and administrative expenses of $1,167,754 with non cash stock
compensation of $990. Comparatively, 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$1,183,225 and administrative expensesnon cash stock compensation of $1,208,610.$66,000. 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 due2010 decreased to less event days and management's
ongoing effort to maintain and/or reduce these types of expenses.
10
The non-cash stock compensation52.1% from 60.47% 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 assigneddue 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 $50,000management's ongoing
attempts to operations related to this extension.reduce these expenses.
13
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.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.
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.
11Not applicable for smaller reporting companies.
Item 4T.4. Controls and Procedures
During the three months ended September 30, 2009,2010, 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 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, 2009.2010. 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, 20092010 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.
1214
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 Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: May 14,November 9, 2010
DALE JARRETT RACING ADVENTURE, INC.
By: /s/Timothy Shannon
- ---------------------------
Timothy Shannon
PrincipalChief Executive Officer
Chief Financial Officer