U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2000
Commission File Number: 0-19170
JUNIPER GROUP, INC.
(Name of small business issuer in Its Charter)
Nevada 11-2866771
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(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
111 Great Neck Road, Suite 604,
Great Neck, New York 11021
(address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (516) 829-4670
Securities registered pursuant to Section 12(b) of the Exchange Act: NONE
Securities registered pursuant to Section 12(g) of the Exchange Act:
Title of Each Class:
Common Stock (par value $.001 per share)
12% Non-Voting Convertible Redeemable Preferred Stock $.10 par value
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that Registrant was required to
file such reports) and (2) has been subject to such filing requirements for the
past 90 days. YES X NO
-- --
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB [ X ]
State issuer's revenues for its most recent fiscal year. - $727,337.
The aggregate market value of the Common Stock held by non-affiliates of
the Registrant was approximately $2,523,147 based upon the $1.77 average bid
price of these shares on the NASDAQ Stock Market for the period March 1, 2001
through March 28, 2001.
As of March 28, 2001, there were 1,640,449 outstanding shares of Common
Stock, $.001 par value per share.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
A. General
Juniper Group, Inc.'s (the "Company") principal businesses are composed of two
(2) segments: 1) entertainment and technology; and 2) healthcare. The Company
and its subsidiaries operate their business from the Company's Great Neck
location.
1. Entertainment and Technology Services: The entertainment and technology
operations are conducted through two wholly owned subsidiaries of Juniper
Entertainment, Inc., (JEI") which is a wholly owned subsidiary of the
Company.
a) Juniper Pictures, Inc. ("Pictures"), which engages in the acquisition,
exploitation and distribution of rights to films to the various media (i.e.,
Internet and audio streaming, home video, pay-per view, pay television, cable
television, networks and independent syndicated television stations) in the
domestic and foreign marketplace.
b) Juniper Internet Communications, Inc. ("JINI") The technology segment is
conducted through Juniper Internet Communications, Inc., formally called
Computer Design Associates, Ltd. ("CDA") which was acquired 100% by JEI. CDA's
emphasis on technology and the Internet would continue with particular attention
to services for leading Internet broadband service providers; specifically cable
and DSL service companies. In December 2000, CDA was renamed JINI to more
appropriately reflect JINI's role in the industry's rapid deployment of
broadband capabilities and services. This rapid adoption of new Internet
capabilities by the market will allow JINI to expand its technology deployment
service.
2. Healthcare: The healthcare operations are conducted through three wholly
owned subsidiaries of Juniper Medical Systems, Inc. ("JMSI"), which is a
wholly owned subsidiary of the Company:
a) PartnerCare, Inc. ("PCI") is a managed care revenue enhancement company
providing various types of services such as: Managed Care Revenue Enhancement,
Comprehensive Pricing Reviews to newly evolving integrated hospital, and
Write-off Review, appeals of any third party rejections denials of accounts,
including commercial insurance, managed care, Medicare, Medicaid, Champus, etc.
b) Juniper Healthcare Containment Systems, Inc. ("Containment") is a
company which develops and provides full service healthcare networks for
insurance companies and managed care markets in the Northeast U.S. During 2000
and 1999, no services were performed by this subsidiary.
c) Nuclear Cardiac Imaging, Inc.("NCI"), a New Jersey corporation. NCI is a
company formed in late 1998 developing the business of providing cardiac Spect
Imaging to cardiologists at their offices without charge to the doctor. NCI
charges the insurance carrier or managed care company directly. During 2000 and
1999, no services were performed by this subsidiary.
B. Business of Issuer
1. Entertainment and technology services.
a) Pictures is engaged in the distribution of films through licensing to
the Internet, home video, pay-per-view, pay-cable, and commercial television
broadcast media domestically as well as in foreign markets. Pictures has
exclusive distribution rights to seventy-five (75) films in various media within
various international markets.
During 2000, the Company curtailed its efforts in the distribution of film
licenses to commit and focus its resources on the growth of the internet
technology, which during that time was the most efficient and cost effective
strategy for the Company to maximize revenue. Accordingly, Pictures did not
generate any revenue during that year.
Pictures acquires worldwide rights to films which are saleable to various
markets. In acquiring the rights to a film, Pictures analyzes the viability of
the product for distribution in an effort to target the film's audience appeal.
Armed with its analysis, Pictures markets the film, using sales representatives
and the efforts of its officers, to the various media in a selective manner. In
addition, Pictures aids the media to which it markets its films by producing a
strategy for the presentation of the film, with a view to
programming/counter-programming against competitive media in the same market and
directing a film to the proper demographic population (i.e., female, male,
child, teenager and middle age) in order to produce the most favorable outcome
regarding ratings and advertising revenue.
Pictures acquires its film rights from independent film production
companies. Pictures monitors the industry for available films, concentrating on
content, quality, theme, actors and actresses, plot, format and certain other
criteria to determine the film's suitability for the home video, pay-per-view,
pay/cable and commercial media to which Pictures markets its product, both
domestically and internationally.
Pictures markets its product through its sales representatives, who also
assist Pictures at domestic and international trade shows to market Pictures'
film library.
Pictures acquires domestic and/or foreign distribution rights to films for
a license period that typically spans between 10 and 20 years, during which time
Pictures has the right to distribute such films in various media (Internet
streaming, video, pay cable, syndication and free TV). Pictures earns a
distribution fee, which is based upon a percentage of gross receipts received
for the license. In addition, the Company recoups its expenses incurred in
making the sale (i.e. market costs, travel and entertainment, advertising, fax,
phone, mail, etc.), along with recouping any advances made to producers upon
signing or within a fixed period of time thereafter (minimum guarantee) from the
gross receipts. The balance of gross receipts after such recoupment is paid to
the producer. Any minimum guarantees paid to the producer are payable over a
period of 3-8 years.
Competition
Competition is intense in the motion picture distribution industry. The
Company is in competition with other motion pictures distribution companies
including many which have greater resources than the Company, both in the
acquisition of distribution rights to movie properties and the sales of these
properties to the various markets (i.e. Internet, pay, cable and television).
b) Internet Technology Services
The expansion of internet based technology into consumer and business markets
continues at an extremely rapid pace. Industry forecasts predict that individual
broadband connections will grow from the current base of 5 million connections
to more than 25 million broadband users within the next four years. New
applications using the web for business, and for information and entertainment
services are rapidly being introduced.
Leading broadband service providers of cable, DSL and wireless internet access
are investing heavily to service these millions of new broadband users. It is
the Company's belief that the investments required to expand their broadband
services will motivate many broadband service providers to focus on their core
competencies, and to outsource many non-critical aspects of their business,
including installation and support services.
The Company believes that the current trend for outsourcing service support for
Internet customer services will continue to strengthen as the Internet industry
matures. We believe that Internet connectivity providers will focus on
infrastructure build-out, technology introduction, customer applications and
content, and that customer support will continue to be outsourced to qualified
business partners.
Given this continuing trend, the Company has refocused the technology support
services formerly provided by its Computer Design Associates subsidiary to
support these broadband implementation and support opportunities. CDA was
renamed Juniper Internet Communications in February 2000, and Al Andrus, an
industry veteran in outsourcing and customer services, and recently founder of a
successful service business focused on internet installation and support
services for cable and DSL broadband providers was recruited to lead our efforts
in this area as President of Juniper Internet Communications.
JINI's initial business focus is installing and servicing broadband internet
connections in homes and businesses under contracts with cable companies, DSL
providers and internet vendors. JINI also provides post-installation network
integration and network security services for businesses.
JINI established broadband sales and service offices in New York and
Philadelphia in March and has begun extending its services to leading cable and
DSL providers in these markets.
Competition
Services for broadband deployment has been provided by a mix of in-house service
organizations, and contractor support. Most cable and DSL service providers use
a mix of both, as sources for their customer services to optimize their ability
to respond to demands for service. The participants in broadband installation
services are changing rapidly as smaller companies founded as offshoots of
telecommunications installation firms are growing or being acquired by larger
companies. Viasource and MASTEC are examples of larger firms participating in
the cable-internet segment of this marketplace. Larger computer service firms
like DecisionOne also participate in the market, most often in the DSL services
area. Radio Shack provides installation services for broadband equipment and
connections sold through its stores. The competition among service providers is
based on both service quality and productivity. Most contract service still
remains in the hands of small independent contractors, and there appears to be
opportunity for new entrant growth and acquisition activity in this market.
2. Managed Care Revenue Enhancement and Cost Containment Services
Managed Care Revenue Enhancement Program ("MCREP")
PCI has developed a comprehensive program that addresses the entire spectrum of
business and revenue issues pertaining to the physician practice management and
hospital's managed care relationships. PCI assists and hospitals in obtaining
all the dollars that they are entitled to under their managed care agreements.
PCI's program also includes the profiling of managed care contracts and the
performance bench marking of these agreements. PCI validates whether or not the
projected financial value anticipated from these arrangements can be obtained.
PCI's assessments include line item audits of claims generated through these
relationships, as well as trending reviews to identify, and document "Silent
PPO" activity. PCI also identifies managed care claims that have not been
properly paid, or have been written-off. PCI then actively pursues payors to
expedite payments to the hospital for re-billed claims.
These programs have enabled the Company to offer services to the growing number
of hospitals, physician groups and integrated networks that are facing the
complexities associated with managed care contracts
PCI's MCREP business consists of the essential ingredients needed to assist
Physicians and hospitals in maximizing the business value of their managed care
contracts.
The components of this Program are as follows:
* Managed Care Contract Compliance
PCI identifies all managed care contracts and benchmarks performance
requirements for each contract. Its clients are provided with comprehensive,
easy to read profiles of the managed care contracts in the hospital's portfolio.
PCI evaluates claims generated by each payor for contract compliance. Per diems
and percentage discounts taken by payors are validated in accordance with
hospital expectations. MCREP provides the hospital with an immediate source of
additional revenue from closed accounts. MCREP becomes a second filter of claims
adjudication. The quality process results in a correct bill and assures the
hospital that all revenue due is properly billed.
During 2000, PCI has reviewed managed care contracts for several hospitals to
ensure compliance and proper reimbursement. It has, through this process,
identified unreimbursed claims on behalf of its clients.
* Line Item Reviews and Administration
PCI's team identifies and recovers all charges overlooked subsequent to the
presentation of the final hospital bill, as well as reviews previously submitted
claims. PCI's unique Line Item Reviews simultaneously match units of service to
the medical record documentation at the time of discharge. Line Item Reviews
identify the claims under and over charged by the payor. While reviewing the
bills, PCI is simultaneously auditing the medical records. This critical
component of the Managed Care Revenue Enhancement Program also serves as a
quality assurance review of the hospital's medical records. By ensuring an
accurate final bill for submission to the insurance company, the hospital avoids
additional billing and collection expenses.
* Silent PPO Reviews
In the present era of managed care, hospitals often contract with a PPO for the
PPO to bring patients to the hospital in exchange for a discount on the
hospital's fees. A practice has arisen whereby a PPO may sell or lease the
discounts that it has with a hospital to another PPO (with whom the hospital has
no agreement to provide discounted fees) and, unknown to the hospital, the
patients of the second PPO receive substantial discounts even though the
hospital never agreed to such an arrangement. This is referred to as a "Silent
PPO". This causes the hospital to lose substantial fees by discounting fees for
which it is not contractually obligated.
During 2000, PCI has performed Silent PPO reviews for three hospitals.
* Regulatory Compliance
With the growth of managed care companies and the increasing dependence of
hospitals and physicians on such companies for payment, the scrutiny of the
managed care contracts between the hospitals and physicians and the managed care
companies for proper compliance becomes critically important.
During 2000, PCI has reviewed managed care contracts for five hospitals to
ensure compliance and proper reimbursement. It has, through this process,
identified unreimbursed claims on behalf of its clients.
Competition
Based upon data generated by the healthcare industry and U.S. Government
sources, healthcare expenditures have increased from $249 billion in 1980 (9.1%
of gross national product) to an estimated $700 billion in 1990 (12% of gross
national product) and the expenditures have surpassed the $1 trillion mark in
the year 2000. Many have modified their traditional insurance coverage or made
available to their employees the opportunity to participate in HMOs and PPOs. In
a national survey by Foster Higgins, reported by the New York Times on January
20, 1999, "managed care plans enrolled 85% of employees in 1997, up from 77% in
1996, and only 48% five years ago." The same article reported that 1997 was "the
biggest one year shift out of traditional indemnity coverage since 1994." This
has enabled them to take a more active role in managing healthcare benefits and
costs. In response to the trend towards self-insurance and increasing
competition from HMOs and PPOs, group insurance carriers have sought to control
premium increases through the adoption of cost containment programs.
The Company competes in a highly competitive environment for consulting
business primarily with multiple service companies. The Company competes for its
MCREP clients by distinguishing its services from those provided by multiple
service companies, which generally do not use benchmark performance levels of
managed care agreements or target "Silent PPO" practices as does the Company.
Numerous companies of varying size offer revenue-optimization services that may
be considered competitive with the Company. The Company does not believe that
any single company commands significant market share. Larger, more established
consulting firms have an enhanced competitive position, due in part to
established name recognition and direct access to hospital clients through the
provision of other services. Small firms, although not necessarily offering
those particular services comparable to those of the Company, compete on the
basis of price.
The managed care industry is highly competitive. The Company's MCREP
programs will compete with other providers of healthcare services, including
regional groups as well as national firms. Based upon these competitive factors,
the Company believes that it will be able to compete successfully in the markets
by adhering to its business strategy, although there can be no assurance that
the Company will be able to compete successfully.
Sales and Marketing
The Company's sales and marketing strategies during 2000 and 1999 have
resulted in only a minimal number of new clients for PCI's managed care review
services. Further, no new contracts have been developed outside the New York
Metropolitan area and of the five contracts within the New York area, one
represented only marginal revenue potential to PCI. Outside of the New York
Metropolitan area, the sales and marketing effort for 2000 specifically targeted
New Jersey hospital chains and has not generated any sales to date for PCI. The
former President of PCI, Mr. Richard Vazquez tendered his resignation effective
December 19992, having arrived at terms mutually agreeable with the Company for
the early termination of his employment contract. The occurrence has caused the
Company to consider using independent contractors to market and sell for the
Company. Management believes that this will prove beneficial with respect to
cash flow and productivity.
As of December 31, 2000, PCI had three contracts for its MCREP business, a
decrease from five at December 31, 1999. Revenue to PCI is contingent upon
generating revenue for each hospital under contract. For each contract in place,
based upon PCI's experience, each contract may be expected to average revenue on
an annualized basis of approximately $110,000. The annual revenue for each
contract fluctuates significantly depending upon many factors including, but not
limited to, the number of managed care agreements the hospital had entered, the
capacity of the hospital's information system, the nature of the work under
contract and the length of the period under contract.
The Company does not have any other customers the loss of which would have
a materially adverse effect upon the Company.
Major Customers
In 2000 and 1999, respectively, the Company's major customer accounted for the
following percentages of total revenue:
Maimonides Medical Center 44% and 17%
New York Downtown 13% and 12%
Defense Finance and Accounting Service 13% and 0%
New York Hospital 0% and 20%
Eyeblast, Inc. 0% and 17%
No other customers accounted for greater than 10% of the Company's total
revenue in 2000 and 1999.
Employees
As of March 28, 2001, the Company had 8 full-time employees and no
part-time employees and independent contractors. Of the full-time employees, 8
work at the Company's offices, some of whom spend portions of their time at
clients.
Recent Developments
Mr. Alan Andrus has joined its Juniper Internet Communications, Inc.
subsidiary as its President. In addition, the Company has engaged new management
with expertise in the broadband sector and has also recruited personnel will
skills in cable, RF, head-end systems, digital video and VOIP. The Company
believes it has recruited personnel whose skills and experience bring a focused,
operational, marketing and team oriented business strategy that offers a
comprehensive array of support services for cable, DSL, telecommunications,
satellite and wireless networks.
ITEM 2. DESCRIPTION OF PROPERTY
The Company's offices are located at 111 Great Neck Road, Suite 604, Great
Neck, New York 11021. This property consists of 2,026 square feet of offices and
is subleased from Entertainment Financing Inc.("EFI"), an entity affiliated with
the Chief Executive Officer of the Company, currently at approximately $6,000
per month. EFI's lease, and the Company's sublease on this space expires on May
31, 2002. EFI has agreed that for the term of the sub-lease the rent paid to it
will be substantially the same rent that it pays under its master lease to the
landlord.
JINI maintains an office in Philadelphia on a month to month basis.
PCI maintains an office in Boynton Beach, Florida on a month to month basis.
ITEM 3. LEGAL PROCEEDINGS
On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action against the Company, alleging that the Company has successor liability
for a judgment entered in March of 1993 by the Plaintiffs against Juniper
Releasing, Inc. ("Releasing"), a company affiliated with the Company's CEO. This
matter was settled in April 1999 for a payment of $310,000 to be paid out in
three annual payments, maturing on April 20, 2001. As inducement to secure a
settlement which provided for annual payments over three years, the Company
issued 93,320 shares of common stock for the benefits of the Plaintiffs. (see
Note 6). Payments made during 2000 were less than those required by the
settlement agreement. According, the Company is currently in default of this
obligation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of shareholders on December 28, 2000.
The following resolutions were proposed and the vote tally was as set forth next
to each resolution:
(1) The foregoing nominees for election to the Board of Directors received the
number of votes for their election set forth opposite their respective
names:
VOTES CAST
------------
FOR WITHHELD
NOMINEES ELECTION AUTHORITY
Vlado Paul Hreljanovic 8,134,874 1,223
Harold Horowitz 8,134,874 1,223
Marvin Rostolder 8,134,874 1,223
Barry S. Huston 8,134,874 1,223
(2) Proposal 2 asked for approval of the Company's 2000 Stock Option Plan. The
following number of shares were voted by proxy or by ballot for and against
the ratification of the Company' 2000 Stock Option Plan.
FOR 8,134,662 AGAINST 1,435 ABSTAIN 0
--------- ------ ----
(3) Proposal 3 sought ratification of the appointment of the auditors of the
Company for the fiscal year ended December 31, 2000. The following number
of shares were voted by proxy or by ballot for and against the ratification
of the appointment of the auditors for the year ended December 31, 2000.
FOR 8,134,662 AGAINST 1,223 ABSTAIN 0
--------- ----- -----
There were no broker non-votes.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's common stock is traded on the National Association of
Securities Dealer Automated Quotation System ("NASDAQ") Small Cap Market, under
the symbol "JUNI". The Company's 12% Convertible Redeemable Preferred Stock
("Preferred Stock") is traded in the Over-the-counter Market on the NASD OTC
Bulletin Board. The Company's Class B Warrants expired on May 1, 1999. The
following constitutes the high and low sales prices for the common stock as
reported by NASDAQ for each of the quarters of 2000 and 1999. The quotations
shown below reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions.
On December 13, 2000, the Company's common stock was reversed split one for
ten. All amounts below, reflect actual trading prices without adjustment for the
reversal.
2000 HIGH LOW
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FIRST QUARTER
Common Stock .................. 3.38 1.88
SECOND QUARTER
Common Stock .................. 2.03 1.00
THIRD QUARTER
Common Stock .................. 1.25 .63
FOURTH QUARTER
Common Stock ................... 1.97 .14
1999 HIGH LOW
---- ---- ---
FIRST QUARTER
Common Stock .................. 3.13 1.00
SECOND QUARTER
Common Stock .................. 2.19 1.25
THIRD QUARTER
Common Stock ............... 7.88 1.38
FOURTH QUARTER
Common Stock ............... 4.56 1.34
Preferred Stockholders are entitled to receive out of assets legally
available for payment a dividend at a rate of 12% per annum of the Preferred
Stock liquidation preference of $2.00 (or $.24 per annum) per share, payable
quarterly on March 1, June 1, September 1 and December 1, in cash or in shares
of Common Stock having an equivalent fair market value. Unpaid dividends on the
Company's Preferred Stock cumulate. The quarterly payments due on September 1
and December 1, 1992, and all payments due in 1993, in 1994, in 1995, in 1996,
in 1997, in 1998, in 1999, in 2000, and the payment due on March 1, 2001 have
not yet been paid and are accumulating. These dividends have not been declared
because earned surplus is not available to pay a cash dividend. Accordingly,
dividends will accumulate until such time as earned surplus is available to pay
a cash dividend or until a post effective amendment to the Company's
registration statement covering a certain number of common shares reserved for
the payment of Preferred Stock dividends is filed and declared effective, or if
such number of common shares are insufficient to pay cumulative dividends, then
until additional common shares are registered with the Securities and Exchange
Commission (SEC). No dividends shall be declared or paid on the Common Stock
(other than a dividend payable solely in shares of Common Stock) and no Common
Stock shall be purchased, redeemed or acquired by the Company unless full
cumulative dividends on the Preferred Stock have been paid or declared, or cash
or shares of Common Stock have been set apart which is sufficient to pay all
dividends accrued on the Preferred Stock for all past and then current dividend
periods.
On March 16, 1999, the Company made a self-tender for all of the 233,900
outstanding shares of 12% Non-Voting Convertible Redeemable Preferred Stock (the
"12% Preferred") for 475,777 shares of the Company's common stock. As a result,
191,153 shares of preferred stock were redeemed for 31,540 shares of the
Company's common stock. Additionally, during the second quarter of 2000, 7,930
shares of the Company's preferred stock were converted for 6,344 shares of the
Company's common stock. As a result, there is currently 37,747 shares of
Preferred Stock which remain outstanding.
The 12% Preferred presently entitle the holder to convert to 0.004 shares
of common stock, par value $.001, of the Company, and the accrued dividend,
before conversion, of 12% per annum, payable, when declared by the Board of
Directors, in cash or stock at the Company's option, per share of 12% Preferred.
The total cash value of the arrearage of unpaid dividends as of December 31,
2000 is $81,472.
The Company has not declared cash dividends on its Common Stock and does
not intend to do so in the foreseeable future. If the Company generates
earnings, management's policy is to retain such earnings for further business
development. It plans to maintain this policy as long as necessary to provide
funds for the Company's operations. Any future dividend payments will depend
upon the full payment of Preferred Stock dividends, the Company's earnings,
financial requirements and other relevant factors, including approval of such
dividends by the Board of Directors.
As of March 28, 2001, there were 230 shareholders of record of the
Company's common stock, excluding shares held in street name.
Recent Sales of Unregistered Securities
Changes in Securities
(a) The information disclosed in Item 4 above is incorporated herein by
reference.
(b) N/A
(c) Shares of Common Stock, $0.001 par value, issued (pre one for ten reverse
split) during 2000 totalled 7,126,491 shares.
During the fourth quarter the following issuances of common stock were as
follows:
Date Purchaser No. of Shares Consideration Exemption
10/1-12/29/00 Vendors 166,789 Vendors accepted common stock in lieu
of unpaid fees in the amount of $7,058 4(2)
10/13-12/29/00 Employees 52,767 Employees accepted common stock
in lieu of accrued salary in the amount
of $36,865 4(2)
10/11/00 Option
Holders 28,742 Conversion of options 4(2)
10/19-12/5/00 Debentures 230,833 Debentures for $155,100 were
converted to common stock 4(2)
Options issued during 2000 (pre one for ten reverse split) totalled
772,904. During the fourth quarter, the following options were issued:
Date Purchaser No. of Options Consideration Exemption
- ------ ---------- -------------- ----------------------------- ---------------
10/11/00 Officers 250,000 Services rendered 4(2)
10/11/00 Board of
Directors 100,000 Services rendered 4(2)
10/11/00 Consultants 180,000 Services rendered 4(2)
In 2000, the Company sold $683,599 of convertible debentures. During 2000,
$983,599 of debentures were converted (pre one for ten reverse split) to
3,591,1000 shares of the Company's common stock. Sales of Debentures during the
fourth quarter were as follows:
Value of
Date Purchaser Debentures Consideration Exemption
- ------ ---------- ----------- ----------------------------- ----------------
10/19-12/5/00 Private Holders 155,100 Payment in cash 4(2)
______________________
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
Fiscal Year 2000 vs Fiscal Year 1999
The Company's revenues increased to $727,000 in 2000 from $718,000 in 1999,
representing a 1.3% increase.
Revenue related to the Healthcare segment decreased to $487,378 in 2000,
from $581,000 in 1999, representing a 19% decrease. The decrease in revenue
during 2000 was predominately attributed to PCI. This was the result of PCI's
client pool of hospitals decreasing from seven in 1999 to five in 2000, and the
discontinuance of a segment of PCI's product line.
Revenue related to entertainment and technology services increased to
$240,000 in 2000 from $137,000 in 1999.
Operating costs increased to $265,000 in 2000 from $170,000 in 1999, a 56%
increase. The Healthcare operating costs decreased to $72,000 in 2000 from
$113,000 in 1999, a 36% decrease. As a percentage of revenue, operating costs
for the Healthcare segment decreased to 15% in 2000 from 19% in 1999. The
reduction in operating cost is attributable to better efficiency in field
operations through automation.
Operating costs for Entertainment include film amortization and producers
royalties. Where the Company acquires licensing rights through guaranteed
payments, it records such guarantees on its balance sheet. The amortization of
such licensing rights is calculated under the film forecast method. Film
amortization represents amortization of the original acquisition price
capitalized on the balance sheet. Producers royalties reflect current amounts
due producer's for their share of current revenue for films with no minimum
guarantee obligation.
Selling, general and administrative expenses decreased to $1,684,000 in
2000 from $1,984,000 in 1999, a 17% decrease. The significant decrease in
selling, general and administrative expenses were: bad debt expense of $304,000,
commission expense of $153,000; and salaries of $209,000. The decreases were
offset by increases in consulting expenses of $275,000; legal expense of
$30,000; and insurance expense of $22,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company had negative working capital of $598,000 at December 31, 2000.
The ratio of current assets to current liabilities was 0.48:1 at December 31,
2000. Cash flow used by operating activities during 2000 was $506,416.
The Company has no material commitments for capital expenditures or the
acquisition of films. If cash flow permits, however, the Company plans to
enhance its information and telecommunications system capabilities to more
efficiently and effectively provide its entertainment, internet technology
healthcare services and to acquire additional films during 2000.
During 2000, the Company raised approximately $684,000 for working capital
and payment of debt through the sale of unregistered securities (convertible
debentures, notes payable and common stock).
The Company has suffered recurring losses from operations which raised
substantial doubt about its ability to continue as a going concern. The Company
believes that it will need additional financing to meet its operating cash
requirements for the current level of operations during the next twelve months,
and will require additional capital in order to complete its planned expansion.
The Company has developed a plan to reduce its liabilities and improve cash flow
through expanding operations and raising additional funds either through
issuance of debt or equity. From January 1, 2001 through March 28, 2001, the
Company raised $261,600 from the sale of convertible debentures and through
offerings under private placements. The Company anticipates that it will be able
to raise the necessary funds it may require for the remainder of 2001 through
public or private sales of securities. If the Company is unable to fund its cash
flow needs the Company may have to reduce or stop planned expansion, or possibly
scale back operations.
The Company currently does not have any lines of credit.
The Company has issued shares of its common stock on a number of occasions
without offering preemptive rights to existing Shareholders or procuring waivers
of their preemptive rights. No Shareholder has alleged any damage resulting to
him as a result of the sale of shares of Common Stock by the Company without
offering preemptive rights. The amount of damages incurred by Shareholders by
reason of the failure to offer preemptive right, if any, is not ascertainable
with any degree of accuracy. The Company believes that if any such claims were
asserted, the Company may have valid defenses.
During 2000 and 1999, the Company focused its resources on the growth of
the entertainment and technology segment, which, during that time, was the most
efficient and cost-effective strategy for the Company to maximize revenue.
Although resources and capital remain limited, the Company has begun directing
efforts toward reestablishing a foothold in the film industry. The Company
expects to continue recognizing growth in revenues from the sale of film
licenses in 2000.
Healthcare
During 2000 and 1999, the Company was unsuccessful in developing a quality,
comprehensive national marketing effort. This was primarily due to the
restricted cash flow which was not available to support such a national campaign
needed to succeed fully into today's ever changing healthcare environment. The
marketing methods used previously did not succeed and a more technologically
drive plan is currently being developed. This period of change will require
increased investment in new and better technology infrastructures that should
make it more cost effective to serve PCI clients. This also required new
staffing, including the recruitment of experienced personnel from the insurance
and managed care industry. The Company is actively pursuing acquisitions in the
physician practice management sector.
Entertainment and Technology Services
Although the Company's resources and capital remain limited, the Company
has begun directing its efforts toward resources in an area of high technology,
and to provide customer support servicing for DSL, cable internet, VOIP and
wireless IP providers. This decision has elicited an emphasis on providing
broadband connectivity services to residential and business customers. As a
result, the Company obtained a growth in this segment totalling $240,000 in
2000, and $137,000 in 1999. The Company expects to continue to recognize growth
in revenue.
In 2001, the Company is searching for full time sales and marketing
managers with expertise in the Internet and audio streaming industry and in the
e-commerce technology. If cash flow permits, the Company plans to enhance its
information systems capabilities and create a conduit for video and audio
streaming of entertainment products to the Internet.
ITEM 7. FINANCIAL STATEMENTS
The response to this item follows Item 13, and is hereby incorporated
herein.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
The Company's Certificate of Incorporation provides for no less than three
(3) Directors. Each Director shall hold office until the next annual meeting of
shareholders and until his successor has been elected and qualified. At the
present time there are a total of three (3) Directors. The Board of Directors is
empowered to fill vacancies on the Board. The Company's Directors and Executive
Officers are listed below:
POSITIONS
NAME AGE W/COMPANY DIRECTOR SINCE
Vlado Paul Hreljanovic 53 Chairman of the Board, 1987
President, CEO and
acting CFO
Harold A. Horowitz 50 Director 1991
Barry S. Huston 54 Director 2000
Marvin Rostolder (1) 58 Director 1998
Yvonne T. Paultre 62 Secretary ---
Alan R. Andrus 57 President/JUNI ---
(1) Tendered his resignation as a Director of the Company for personal reasons
on January 9, 2001.
DIRECTORS
- ---------
Vlado Paul Hreljanovic has been the President, Chief Executive Officer and
Chairman of the Board since 1987. Upon graduation from Fordham University, he
joined KPMG (formerly Peat Marwick Mitchell & Co.) as an accountant. Mr.
Hreljanovic is and has been the sole shareholder, officer and director of
Entertainment Financing, Inc., which only business is as lessee of the Company's
offices in Great Neck, New York, and the sub-lessor of such premises to the
Company.
Harold A. Horowitz has been a Director of the Company since January 1991.
Since October 1, 1995, he has been a principal and Chairman of the Board of
In-Stock Business Forms and Paper Products, Ltd., and an independent consultant
to various public and private companies. Until October 1, 1995, Mr. Horowitz was
a Partner of the law firm of Finkelstein, Bruckman, Wohl, Most and Rothman,
which firm was securities counsel to the Company. Mr. Horowitz is an adjunct
professor of economics at Yeshiva University. Mr. Horowitz received his JD
degree in 1976 from Columbia University School of Law and masters degree in
economics from Columbia University in 1973. He received his BA degree from
Yeshiva University in 1971.
On October 31, 2000, Barry S. Huston was elected to the Board of Directors
to fill one of the vacancies on the Board. Mr. Huston is a practicing attorney
and the senior partner of Huston & Schuller, P.C, a New York law firm with
offices in Manhattan and East Hill, Long Island. He is a member of the New York
Bar and the Federal Courts in New York, the United States Tax Court and the
Supreme Court of the United States Mr. Huston holds a B.A. degree from Queens
College of the City University of New York in 1969, and a J.D. from Brooklyn Law
School in 1972. Mr. Huston specializes in complex civil and corporate
litigation, including healthcare and professional liability, product liability,
toxic and environmental torts, and labor law and construction litigation. He is
a member of numerous national and local law associations and was a former
director of the Sid Jacobson Jewish Community Center.
Marvin Rostolder was elected to the Board of Directors of the Company on
May 18, 1998. Mr. Rostolder has served as independent consultant to various
companies including MedTech Co., BioImaging Technology, Inc., Amba Sciences,
Inc. and T.M. Marketing, Inc. From 1985 through 1998, Mr. Rostolder served in
various capacities with North American Transfer Co., a registered Stock Transfer
Agent and Registrar. Mr. Rostolder is a graduate of the City University of New
York and holds a Masters degree from Long Island University in healthcare
administration.
OTHER OFFICER
- -------------
Yvonne T. Paultre has been Secretary since 1991. Ms. Paultre has
supervisory responsibilities for the Company's employees, customer relations and
office policies. She is also responsible for operations of the Company's
television syndication area.
KEY EMPLOYEE
- ------------
Alan R. Andrus has been President of Juniper Internet Communications since
January 2001. Mr. Andrus has served in various high technology services
management roles prior to joining JINI. He has managed computer, networking and
broadband internet services, in startup, growth, turnaround and acquisition
environments.
Before joining JINI Mr. Andrus served as President of Computer Systems
Support/ US Internet Support from February 2000 until its acquisition in third
quarter 2000. Mr. Andrus also was President and CEO of US Computer Group from
November 1998, President of ARAND Corporation from September 1996 to November
1998, Senior Vice President of Sales, Marketing and Strategy for Technology
Service Solutions (an IBM/Kodak joint venture company) from June 1994, Senior
Vice President of Integrated Solutions and Senior Vice President of Services for
ComputerLand Corporation (later renamed Vanstar Corporation) from February 1988.
Mr. Andrus began his career as a systems engineer at Grumman Corporation in
February 1970 and held progressively senior technical service management
positions in Grumman Data Systems until June 1983 when he became President of
Grumman Systems Support Corporation, a position he held until February 1988.
Mr. Andrus is a graduate of Fordham University, and did post graduate work
in management at the University of Southern California School of Business. He
later attended the Carnegie Mellon Graduate School of Business Program for
Senior Executives.
Mr. Andrus has been a member, Officer and Director of the Association for
Services Management International at various times between 1978 and the present
and served as its Chairman and President in 1989.
Mr. Andrus co-founded the Service Industry Association (also known earlier
at the National Computer Service Network and as the Independent Service Network
International) in 1985, and has served as an Officer and Director, and as its
President, CEO and Chairman during subsequent years.
Section 16(a) Beneficial Ownership Reporting Compliance
To the best of the Company's knowledge, based solely on a review of copies
of Forms 3, 4 and 5 furnished to the Company and written representations that no
other reports were required during the fiscal year ended December 31, 2000, the
Company's officers, directors, and 10% shareholders complied with all applicable
Section 16(a) filing requirements.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
of the Chief Executive Officer of the Company for services provided to the
Company and its subsidiaries in 2000, 1999 and 1997. No other executive officer
received salary and bonus in excess of $100,000 in any such year.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Securities
Compensation Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation Options (#)
- --------------------------- ------ --------- ----------- ------------ ----------
Vlado Paul Hreljanovic 2000 $ 76,200(1) - (2) $60,183 (3) -
Chairman of the Board and 1999 $ 178,377 $ - (4) $40,400 (5) -
Chief Executive Officer 1998 $ 175,460 $86,191 (6) $31,200 (7) -
(1) Throughout 2000, Mr. Hreljanovic received (pre one for ten reverse split)
501,450 shares as payment of his net salary of $61,784 from a gross salary
of $76,200. Mr. Hreljanovic agreed to accept options with a provision for a
cashless exercise (pre one for ten reverse split) for 282,930 shares at
$.4375 per share in lieu of the balance of his salary of $106,658.
(2) In recognition of efforts exerted on behalf of the Company and its
subsidiaries, Mr. Hreljanovic received (pre one for ten reverse split)
options to purchase 250,000 shares at $.4375. These options had a provision
for a cashless conversion and were converted during 2000 into 97,836
shares.
(3) Other compensation for Mr. Hreljanovic in 2000 was primarily comprised of,
among things, automobile lease payments, and insurance of $31,900, and
health and life insurance of $28,283.
(4) Throughout 1999, Mr. Hreljanovic received 383,542 options (pre one for ten
reverse split) with a cashless exercise feature to purchase shares of the
Company's common stock. Such options were issued in recognition of efforts
exerted on behalf of the Company and its subsidiaries. The exercise prices
of the options ranged from $.48 to $.68. As of December 31, 2000, all
options were exercised.
(5) Other compensation for Mr. Hreljanovic in 1999 was primarily comprised of,
among other things, automobile repairs and insurance of $13,000, and health
and life insurance of $27,400.
(6) Paid in 57,461 shares of the Company's unregistered common stock, valued at
$86,191 issued on January 1, 1998, in recognition of efforts exerted by Mr.
Hreljanovic on behalf of the Company and its subsidiaries.
(7) Other compensation for Mr. Hreljanovic in 1998 was primarily comprised of,
among other things, automobile repairs and insurance of $12,900, and health
and life insurance of $18,200.
Aggregate Option Exercises in Last Fiscal Year and Year-end Options
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Shares(1) Options at Options at
Acquired Year-end (#) Year-end ($)
On Value Exercisable Exercisable
Name and Principal Position Exercise Realized Unexercisable Unexercisable
- --------------------------- -------- -------- ------------- ------------------
Vlado Paul Hreljanovic 466,414 $811,871 0/0 $0/$0
Chairman of the Board and
Chief Executive Officer
Harold A. Horowitz 101,749 $ 50,875 0/0 $0/$0
Director
Marvin Rostolder 35,221 $ 17,611 0/0 $0/$0
Director
Yvonne T. Paultre 35,221 $ 17,611 0/0 $0/$0
Secretary
1) Pre one for ten reverse split.
Compensation of Directors: In 2000, Mr. Hreljanovic and Mr. Horowitz
received options to purchase (pre one for ten reverse split) 250,000 and 100,000
shares of common stock at the exercise price of $.4375 per share, respectively,
as additional compensation as a member of the Board of Directors.
Employment Agreements: Mr. Hreljanovic has an Employment Agreement with the
Company which expires on April 30, 2005, and that provides for his employment as
President and Chief Executive Officer at an annual salary adjusted annually for
the CPI Index and for the reimbursement of certain expenses and insurance. Based
on the foregoing formula, Mr. Hreljanovic's salary in 2000 was approximately
$183,000. Additionally, the employment agreement provides that Mr. Hreljanovic
may receive shares of the Company's common stock as consideration for raising
funds for the Company. Due to a working capital deficit, the Company is unable
to pay the entire salary in cash to Mr. Hreljanovic pursuant to his employment
agreement. In the best interests of the Company, in lieu of cash, Mr.
Hreljanovic has agreed to accept the issuance of shares of the Company's common
stock as a part of the payment for the unpaid salary of 2000 and 1999. In 2000,
the Company issued options to purchase (pre one for ten reverse split) 250,000
shares of common stock at $.4376 per share. In 1999, the Company issued options
to purchase 383,542 shares of common stock to Mr. Hreljanovic.
Under the terms of this employment agreement, the Chief Executive Officer
of the Company is entitled to receive a cash bonus of a percentage of the
Company's pre-tax profits if the Company's pre-tax profit exceeds $100,000.
Additionally, if the employment agreement is terminated early by the
Company after a change in control (as defined by the agreement), the officer is
entitled to a lump sum cash payment equal to approximately three times his base
salary.
In December of 2000, the Company employed a new president for its
subsidiary JINI. Although no formal employment agreement has been prepared, the
terms of employment include a salary of $200,000 per year and options to
purchase 100,000 shares of common stock at $1.20 per share to be earned as
certain benchmarks are achieved over a two year period. Additionally, the terms
of employment provide for an auto allowance and health insurance.
Mr. Vazquez, President of PCI, had an employment agreement which terminated
on June 30, 2000. Under the terms of his agreement, as amended, Mr. Vazquez
received options to purchase shares of the Company's common stock. Effective
December 2000, Mr. Vazquez and the Company agreed to an early termination of the
Agreement. Accordingly, Mr. Vazquez surrendered all options previously issued to
him and agreed to forego any stock or options to which he was entitled.
STOCK OPTION PLANS
1996 Stock Option Plan
On February 12 , 1997, the shareholders of the Company adopted the 1996
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. This Plan, which allows the
Company to grant incentive stock options, non-qualified stock options and stock
appreciation rights (collectively "options"), to employees, including officers,
and to non-employees involved in the continuing development and success of the
Company, authorizes the grant (pre one for ten reverse split) of 100,000 shares
of common stock. The terms of the options are to be determined by the Board of
Directors.
Options will not have expiration dates later than ten years from the date
of grant (five years from the date of the grant in the case of a 10%
Stockholder). The Option Prices may not be less than the fair market value of
the common shares on the date of grant, except that any option granted to an
employee holding 10% or more of the outstanding voting securities of the Company
must be for an option price not less than 110% of fair market value. At December
31, 2000, all options under the Plan had been granted and none remain
outstanding and unissued.
1998 Stock Option Plan
On December 30, 1998, the shareholders of the Company adopted the 1998
Stock Option Plan.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase up to an aggregate of 100,000 shares of common stock to
employees, including officers, and to non-employees involved in the continuing
development and success of the Company. The terms of the options are to be
determined by the Board of Directors. Options will not have expiration dates
later than ten years from the date of grant (five years from the date of the
grant in the case of a 10% stockholder). The option prices may be set at any
amount in the discretion of the Board's Compensation Committee. At December 31,
2000, all options under the Plan had been granted.
1999 Stock Option Plan
On December 27, 1999, the shareholders of the Company adopted the 1999
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. The Plan also supplements the
Company's 1996 and 1998 Stock Option Plans.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase up to an aggregate of 150,000 shares of common stock to
employees, including officers, and to non-employees involved in the continuing
development and success of the Company. The terms of the options are to be
determined by the Board of Directors. Options will not have expiration dates
later than ten years from the date of grant (five years from the date of the
grant in the case of a 10% stockholder). The option prices may be set at any
amount in the discretion of the Board's Compensation Committee. At December 31,
2000, 130,793 options had been granted of which none remain unexercised and
19,207 remain unissued.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 22, 2000: (i) the name and
address of each person who owns of record or who is known by the Board of
Directors to be beneficial owner of more than five percent (5%) of the Company's
outstanding common stock, (ii) each of the Company's Directors, and (iii) all of
the Company's Executive Officers and Directors as a group.
BENEFICIAL PERCENT OF COMMON
NAME AND ADDRESS OWNERSHIP (1) STOCK OUTSTANDING
Vlado Paul Hreljanovic (3) 799,767 31.98%
111 Great Neck Road
Suite 604
Great Neck, NY 11021
Harold A. Horowitz 168,964 6.76%
111 Great Neck Road
Suite 604
Great Neck, NY 11021
Barry S. Huston 30,000 1.20%
20 Melby Lane
East Hills, NY 11576
Marvin Rostolder (2) 60,283 2.41%
Hoffstat Lane
Sands Point, Port Washington 11050
Officers and Directors as a
group (5 Persons) 1,096,006 44.83%
(1) Includes options of 600,000, 150,000, 50,000 and 30,000 to purchase the
Company's common stock for each of the officers and directors above,
respectively. (2) Tendered his resignation as a Director of the Company for
personal reasons on January 9, 2001. Includes an aggregate of 97,455 shares
of common stock owned by Mr. Hreljanovic's children. Accordingly, Mr.
Hreljanovic may be considered a beneficial owner of these shares. Such
shares have been included in the calculation of percentage of common stock
outstanding.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company paid rent under one sublease during 2000 and two subleases
during 1999 to companies affiliated with the Chief Executive Officer of the
Company. The rents paid and terms under the subleases are the same as those
under the affiliate's lease agreements with the landlords. Rent expense for the
years ended December 31, 2000 and 1999 was $78,900 and $72,400, respectively. In
prior years, the Company made advances to or received advances from one of these
affiliated companies for working capital requirements. As a result, at December
31, 2000 and 1999, the balances due from the affiliates were approximately
$6,217 and $4,800, respectively. Amounts payable under the remaining leases in
2000 and subsequent years are set forth below:
2001 - $73,280
2002 - $32,000
The Company acquired distribution rights to two films from a company
affiliated with the Chief Executive Officer of the Company, for a ten-year
license period, which expires on June 5, 2003. The Company is obligated to pay
such company producers' fees at the contract rate. Such payments will be charged
against earnings. In 2000 and 1999, no payments were made to such company, and
no revenue was recognized from such films.
Throughout 2000 and 1999, the Company's principal shareholder and officer
made loans to, and payments on behalf of, the Company and received payments from
the Company from time to time. The largest net balance due to the officer in
2000 was $86,469. The largest net balance due from the officer was $3,857. The
net outstanding balance with the officer at December 31, 2000 and 1999,
respectively, was a balance due to him of $40,684 and a balance due from him of
$3,857.
As part of salary, bonuses and other compensation, the Company's President
and Chief Executive Officer, was issued 50,145 shares of common Stock (See Note
8), valued at $61,784 in 2000 and 46,727 shares valued at $71,301 in 1999.
Additionally, during 2000 and 1999, the Company's President received options for
53,293 shares at $4.375 per share and 38,354 shares at prices ranging from $4.80
to $6.80 per share, respectively. These options were issued for services as a
Board of Directors member and for additional efforts on behalf of the Company.
Further, the Company issued options to other non-employee directors in 2000 and
1999 for 35,000 and 25,000 shares, respectively.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Description:
2.1 Agreement and Plan of Merger dated as of January 20, 1997 between the
Registrant and Juniper Group, Inc., a Nevada corporation (2)
3.1 Certificate of Incorporation of the Registrant, as amended (1)
3.2 Amendment to the Certificate of Incorporation of the Registrant, filed
March 7, 1997 (3)
3.3 Certificate of Incorporation of Juniper Group, Inc., a Nevada
corporation.(2)
3.4 By-Laws of the Registrant (1)
3.5 Amendment to the By-Laws of the Registrant approved by the shareholders of
the Registrant on February 12, 1997 (2)
3.6 By-Laws of Juniper Group, Inc., a Nevada corporation (2)
4.1 1999 Stock Option Plan (2)
4.2 2000 Stock Option Plan (4)
21.1 Subsidiaries
23.1 Consent of Independent Certified Public Accountants
27.1 Financial Data Schedule
____________________________
(1) Incorporated by reference to the Company's annual report on Form 10-KSB for
the fiscal year ended December 31, 1996
(2) Incorporated by reference to the Company's Proxy Statement for its Annual
Meeting held on December 30, 1999
(3) Incorporated by reference to the Company's annual report on Form 10-KSB for
the fiscal year ended December 31, 1997
(4) Incorporated by reference to the Company's Proxy Statement for its Annual
Meeting held on December 27, 2000
(b) Reports on Form 8-K.
NONE
BALANCE OF PAGE LEFT BLANK INTENTIONALLY
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Certified Public Accountants.................. F-2
Consolidated Balance Sheets as of December 31, 2000 and 1999........ F-3
Consolidated Statements of Income
for the years ended December 31, 2000 and 1999...................... F-4
Consolidated Statements of Cash Flows
for the years ended December 31, 2000 and 1999...................... F-5
Consolidated Statements of Shareholders' Equity
for the years ended December 31, 2000 and 1999..................... F-6
Notes to Consolidated Financial Statements.......................... F-7
F-1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
JUNIPER GROUP, INC.
We have audited the accompanying consolidated balance sheets of Juniper
Group, Inc. and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, cash flows and shareholders' equity for each
of the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as, evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Juniper
Group, Inc. and subsidiaries as of December 31, 2000 and 1999, and the results
of their operations and their cash flows for each of the years then ended, in
conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 10
to the consolidated financial statements, the Company has suffered recurring
losses from operations which raises substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note 10. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/GOLDSTEIN & GANZ, CPA's, P.C.
Great Neck, New York
March 29, 2000
F-2
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
December December
ASSETS 31, 2000 31, 1999
Current Assets:
Cash ........................................... $ 949 $ 3,290
Accounts receivable - trade (net of allowance).. 229,962 329,875
Prepaid expenses and other current assets ...... 321,141 206,558
Due from officer ............................... - 3,857
Total current assets ............................. 552,052 543,580
Film licenses .................................. 2,597,386 2,887,267
Property and equipment net of accumulated
depreciation of $146,187 and $134,360,
respectively ................................. 267,899 110,462
Other Investment. ................................ 200,000 200,000
Goodwill.......................................... 346,069 409,886
Other assets ..................................... 4,852 82,620
$3,968,258 $ 4,233,815
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 956,002 $ 796,104
Notes payable - current ........................ 145,976 52,910
Due to officers ................................ 40,684 -
Due to shareholders ............................ 7,000 7,000
Total current liabilities ........................ 1,149,662 856,014
Notes payable - long term ........................ 100,000 400,606
Due to producers - long term ..................... 12,186 11,958
Total liabilities ................................ 1,261,848 _ _1,268,578
Shareholders' Equity:
12% Non-voting convertible redeemable
preferred stock: $.10 par value, 875,000
shares authorized; 34,817 and 42,747 shares
issued and outstanding at December 31, 2000,
and 1999, respectively. Aggregate
liquidation preference, $69,634
and $85,494 at December 31, 2000 and
1999, respectively:............................ 3,482 4,275
Common Stock - $.001 par value,75,000,000
shares authorized, 1,386,811 and 674,162
issued and outstanding at December 31, 2000
and 1999, respectively ........................ 1,387 674
Capital contributions in excess of par:
Attributed to preferred stock ................. 31,039 38,109
Attributed to common stock .................... 12,883,287 11,415,085
Retained earnings (deficit) .................... (10,212,785) ( 8,492,906)
Total shareholders' equity ......................._ 2,706,410 2,965,237
$ 3,968,258 $ 4,233,815
See Notes to Consolidated Financial Statements
F-3
JUNIPER GROUP, INC
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
2000 1999
------------ ------------
Revenues:
Healthcare .......................... $ 487,378 $ 580,594
Entertainment ....................... 239,959 137,036
------------ ------------
727,337 717,630
------------ ------------
Operating Costs:
Healthcare .......................... 71,796 113,148
Entertainment ....................... 193,629 57,475
Selling, general and administrative expenses 1,648,117 1,984,168
Settlement expense ....................... 38,850 -
Revaluation of film licenses ............. 289,881 -
Revaluation of investment in NCI ......... 204,943 -
------------ ------------
2,447,216 2,154,791
------------ ------------
Net (loss) before (loss) from
from minority interest.................. (1,719,879) (1,437,161)
(Loss) from minority interest............. - (99,548)
----------- -----------
Net (loss) ............................... $ (1,719,879) $(1,536,709)
============ ===========
Weighted average number of shares outstanding 863,733 488,378
============ ===========
Net (loss) per common share .............. $ (2.00) $ (3.19)
============ ===========
See Notes to Consolidated Financial Statements
F-4
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2000 1999
--------- ---------
Operating Activities
Net loss ......................................... $(1,719,879) $(1,536,709)
Adjustments to reconcile net cash provided by
operating activities:
Amortization of film licenses ................... - 52,693
Settlement expense............................... 38,850 -
Depreciation and amortization expense ........... 31,706 37,800
Expense from minority interest .................. - 99,548
Payment of officers' compensation with equity.... 67,570 71,301
Payment of various liabilities with equity ...... 252,783 294,741
Payment of employees' compensation with equity .. - 55,540
Revaluation of film licenses .................... 289,881 -
Revaluation of investment in NCI ................ 204,943 -
Changes in assets and liabilities:
Accounts receivable ............................. 99,912 458,535
Prepaid expenses and other current assets ....... (101,964) 9,250
Other assets .................................... (971) 1,587
Due to/from officers and shareholders ........... 44,541 97,898
Due from affiliates ............................. 126 8,041
Accounts payable and accrued expenses ........... 286,086 (227,437)
--------- ----------
Net cash used for operating activities ............ (506,416) (577,212)
--------- ----------
Investing activities:
Purchase of equipment ............................. (180,270) (6,585)
--------- ----------
Net cash used for investing activities ............. (180,270) (6,585)
--------- ----------
Financing activities:
Other Investment .................................. - (400,305)
Reduction in borrowings ........................... (6,354) (217,702)
Proceeds from borrowings .......................... 683,599 1,153,981
Payments to and on behalf of producers ............ - (20,312)
Proceeds from exercise of options ................. - 22,500
Initial Capitalization of JINI ..................... 7,100 --
--------- ---------
Net cash provided by financing activities ......... 684,345 538,162
--------- ---------
Net decrease in cash .............................. (2,341) (45,635)
Cash at beginning of period ....................... 3,290 48,925
--------- -------
Cash at end of period ............................. $ 949 $ 3,290
=========== ========
See Notes to Consolidated Financial Statements
F-5
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Preferred Stock Common Stock
--------------------------- ----------------------------
Capital Capital
Contributions Contributions Retained
Par Value in excess Par Value in excess Earnings
at $.10 of par at $.001 of par (Deficit) Total
----------- ------------------ ------------ ---------------- -------------- -------------
Balance,
December 31, 1998 $23,390 $208,523 $ 307 $9,858,169 $ (6,956,197) $3,134,192
Shares issued as payment
for various expenses - - 82 294,659 - 294,741
Shares issued as compensation
to employees - - 11 55,529 - 55,540
Shares issued as compensation
to officers - - 47 71,254 - 71,301
Shares issued to producers as
payment for debt - - 7 32,593 - 32,600
Shares issued from exercise of
stock options - - 43 22,457 - 22,500
Shares issued in private
placements - - 122 734,700 - 734,822
Shares issued as payment for
acquisition of NCI - - 25 156,225 - 156,250
Tender offer of preferred
stock in exchange for
common stock (19,115) (170,414) 32 189,497 - -
Net loss for the year ended
December 31, 1999 - - - - (1,536,709) (1,536,709)
_______ _________ _______ ___________ _________ __________
Balance,
December 31, 1999 $ 4,275 $ 38,109 $ 676 $11,415,083 $(8,492,906) $ 2,965,237
Initial Capitalization of CDA 7,100 - 7,100
Shares issued as payment
for various expenses - - 225 252,558 - 252,783
Shares issued as compensation
to officers - - 60 67,510 - 67,570
Shares issued from exercise of
stock options - - 46 (46) - -
Shares issued in private
placements and conversion
of Debentures - - 359 983,240 - 983,599
Shares issued as payment for
acquisition of CDA - - 15 149,985 - 150,000
Preferred stock exchange
for common stock (793) (7,070) 6 7,857 - -
Net loss for the year ended
December 31, 2000 - - - - (1,719,879) (1,719,879)
_______ _________ _______ ___________ _________ __________
Balance,
December 31, 2000 $ 3,482 $ 31,039 $ 1,387 $12,883,287 $(10,212,785) $2,706,410
See Notes to Consolidated Financial Statements
F-6
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Summary of Significant Accounting Policies
Description of Business
Juniper Group, Inc.'s (the "Company") principal businesses are composed of
two (2) segments: a) the entertainment and technology segment and b) the
healthcare segment.
Healthcare: The healthcare operations are conducted through three wholly
owned subsidiaries of Juniper Medical Systems, Inc. ("JMSI"), which is a wholly
owned subsidiary of the Company:
(a) PartnerCare, Inc. ("PCI") is a managed care revenue enhancement company
providing various types of services such as: Managed Care Revenue
Enhancement, and Comprehensive Pricing Reviews, to newly evolving
integrated hospital markets, and Write-off Review, appeals of any third
party rejections denials of accounts.
(b) Juniper Healthcare Containment Systems, Inc. ("Containment") is a company
which develops and provides full service healthcare networks for insurance
companies and managed care markets in the Northeast U.S.
(c) Nuclear Cardiac Imaging, Inc.("NCI"), a New Jersey corporation. NCI is a
new company which provides cardiac Spect Imaging to cardiologists at their
offices without charge to the physician. NCI charges the insurance carrier
or managed care company directly.
Both Containment and NCI have generated no revenue during the two years
ended December 31, 2000.
Entertainment and technology: The entertainment segment operations are
conducted through two wholly owned subsidiaries of Juniper Entertainment, Inc.
("JEI"):
(a) Juniper Pictures, Inc. ("Pictures"), a wholly owned subsidiary of the
Company, which engages in the acquisition, exploitation and distribution of
rights to films to the various media (i.e., Internet, home video, pay-per
view, pay television, cable television, networks and independent syndicated
television stations) in the domestic and foreign marketplace;
(b) Juniper Internet Communications, Inc. ("JINI") formerly known as Computer
Design Associates, Ltd. ("CDA"), which was acquired during the first
quarter of 2000, and is a systems integration company, providing technology
services in the areas of communications, Internet services, DSL,
e-commerce, web development and hosting.
Principles of Consolidation
The consolidated financial statements include the accounts of all
subsidiaries. Intercompany profits, transactions and balances have been
eliminated in consolidation.
F-7
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 1 - Summary of Significant Accounting Policies (Continued)
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Financial Instruments
The estimated fair values of accounts receivable, accounts payable and
accrued expenses approximate their carrying values because of the short maturity
of these instruments. The Company's debt (i.e. Due to Producers, Creditor Notes
and other obligations) does not have a ready market. These debt instruments are
shown on a discounted basis (see Notes 6 & 7) using market rates applicable at
the effective date. If such debt were discounted based on current rates, the
fair value of this debt would not be materially different than their carrying
value.
Concentration of Credit Risk
Financial instruments which potentially subject the Company to significant
concentrations of credit risk are principally trade accounts receivable (See
Note 2).
Concentrations of credit risk with respect to trade accounts receivable
within the healthcare segment is significantly limited as a result of deriving a
substantial portion of its revenue from virtually all the major insurance
companies in the United States. Although the Company has few hospitals as
customers, those paying claims generated by PCI's operations are insurance
companies which pay the cost of healthcare. Accordingly, the Company does not
foresee a credit risk associated with these receivables, since repayment is
primarily dependent upon the financial stability of the country's largest
insurance companies.
Concentration of credit risk with respect to the entertainment and
technology services segment are primarily subject to the financial condition of
the segment's largest customer, the United States Defense Department.
Accordingly, the Company does not foresee a credit risk associated with these
receivables.
Film Licenses
Film costs are stated at the lower of estimated net realizable value
determined on an individual film basis, or cost, net of amortization. Film costs
represent the acquisition of film rights for cash and guaranteed minimum
payments (See Note 5).
F-8
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 1 - Summary of Significant Accounting Policies (Continued)
Film Licenses (Continued)
Producers retain a participation in the profits from the sale of film
rights, however, producer's share of profits is earned only after payment to the
producer exceeds the guaranteed minimum, where minimum guarantees exist. In
these instances, the Company records as participation expense an amount equal to
the producer's share of the profits. The Company incurs expenses in connection
with its film licenses, and in accordance with license agreements, charges these
expenses against the liability to producers. Accordingly, these expenses are
treated as payments under the film license agreements.
When the Company is obligated to make guaranteed minimum payments over
periods greater than one year, all long term payments are reflected at their
present value. Accordingly, in such case, original acquisition costs represent
the sum of the current amounts due and the present value of the long term
payments.
The Company maintains distribution rights to eight films for which it has
no financial obligations unless and until the rights are sold to third parties.
The value of such distribution rights has not been reflected in the balance
sheet. The Company was able to acquire these film rights without guaranteed
minimum financial commitments as a result of its ability to place such films in
various markets.
Amortization of Intangibles
Film Licenses
Amortization of film licenses is calculated under the film forecast method.
Accordingly, licenses are amortized in the proportion that revenue recognized
for the period bears to the estimated future revenue to be received. Estimated
future revenue is reviewed annually and amortization rates are adjusted
accordingly.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of
acquired companies and is being amortized on a straight line basis over forty
years. The Company assesses long-lived assets for impairment under Financial
Accounting Standards Board's (FASB) Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets to be
Disposed Of." Under those rules, goodwill associated with assets required in a
purchase business combination is included in impairment evaluations when events
or circumstances exist that indicate the carrying amount of those assets may not
be recoverable. Based upon the Company's evaluation of the investment in NCI,
the goodwill recorded by the Company from this acquisition was reduced by
$204,943 at December 31, 2000.
F-9
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 1 - Summary of Significant Accounting Policies (Continued)
Property and Equipment
Property and equipment including assets under capital leases are stated at
cost. Depreciation is computed generally on the straight-line method for
financial reporting purposes over their estimated useful lives.
Recognition of Revenue from License Agreements
Revenue from licensing agreements is recognized when the license period
begins and the licensee and the Company become contractually obligated under a
noncancellable agreement. All revenue recognition for license agreements is in
compliance with the AICPA's Statement of Position 00-2, Accounting by Producers
or Distributors of Films.
Operating Costs
Operating costs include costs directly associated with earning revenue.
PCI's operating costs include salary or fees and travel expenses of the
individuals performing the services, and sales commissions. Pictures operating
costs include film amortization and producer's royalties.
Recapitalization
On December 13, 2000, the Board of Directors authorized a reverse stock
split of the Company's common shares at the rate of one share for each ten
outstanding shares. Unless stated otherwise, all amounts from prior periods have
been restated after giving effect to this one for ten reverse split.
On March 16, 1999, the Company issued a tender offer to the stockholders of
its preferred stock to redeem all the 233,900 outstanding shares in exchange for
475,777 shares of the Company's common stock. On May 10, 1999, the offer was
concluded and 191,153 shares of preferred stock were redeemed in exchange for
315,403 shares of common stock.
Net Income Per Common Share
The provisions of SFAS No. 128 "Earnings per Share," which requires the
presentation of both net income per common share and net income per common
share-assuming dilution preclude the inclusion of any potential common shares in
the computation of any diluted per-share amounts when a loss from continuing
operations exists. Accordingly, net income per common share-assuming dilution is
not presented.
Reclassifications
Certain amounts in the 1999 financial statements were reclassified to
conform to the 2000 presentation.
NOTE 2 - Accounts Receivable
The Company estimates an allowance for doubtful accounts, which allowance
amounted to approximately $621,000 and $306,000 at December 31, 2000 and 1999,
respectively.
F-10
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 2 - Accounts Receivable (Continued)
During the period 1997 through 1999, a significant portion of PCI's revenue
was the result of work performed for New York Hospital ("NYH") in connection
with identifying and collecting claims which may have been incorrectly underpaid
in violation of New York State law. PCI did identify approximately $1.6 million
of such underpayments and with the consent of, and on behalf of NYH, organized
the appropriate legal actions in an effort to effectuate collection. Based upon
the Company's successful results with other hospitals having smaller claims for
the same violation of New York law, the Company expected the NYH legal actions
to be collectible. In late December 1999, NYH notified the Company that it no
longer sought collection of the underpayments and that the legal actions the
Company had commenced on their behalf were to be discontinued. Accordingly, the
receivables recorded by PCI in connection with this matter were written-off,
resulting in PCI's bad debt expense for 1999 of approximately $600,000.
Presently, the Company is evaluating its position in this matter.
NOTE 3 - Investment in NetDIVE, Inc.
During 2000, in an effort to expand its interests into the Internet and in
e-commerce technology, the Company negotiated with an investment banker and with
NetDIVE, Inc. whereby the investment banker agreed to raise sufficient funds
from the sale of the Company's common stock to provide the Company with the
capital needed to purchase a 33% interest in NetDIVE, Inc., a privately owned
company specializing in collaborative communications on the Internet.
In the early stages of this acquisition, the Company borrowed $300,000 (see
Note 6) which was used to provide $200,000 for the initial purchase of NetDIVE
stock (equal to approximately 1.8% of NetDIVE), and to provide the Company with
$100,000 of working capital. The additional capital required to complete the
Company's investment was unable to be raised in a timely fashion and,
accordingly, the agreement to acquire the balance of the Company's investment
was terminated.
NOTE 4 - Accounts Payable and Accrued Expenses
At December 31, 2000 and 1999, respectively, accounts payable and accrued
expenses consisted primarily of legal fees of $241,000 and $328,000, consulting
fees of $167,000 and $71,000, commissions of $29,000 and $44,000, and payroll
taxes of $87,000 and $183,000. Other accruals relate to selling, general and
administrative expenses incurred in the normal course of business.
NOTE 5 - Film Licenses
At December 31, 2000 and 1999 film licenses amounted to $2,597,386 and
$2,887,267, respectively. These reflect the lower of the Company's original
acquisition price, or fair market value, less accumulated amortization for the
distribution rights to 77 film licenses. Such amortization amounted to $371,831
at December 31, 2000 and 1999.
F-11
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 5 - Film Licenses (Continued)
The Company has directed predominantly all its time and efforts toward
building the healthcare segment of the business. Since early 1995, due to the
limited availability of capital, personnel and resources, the volume of film
sales activity was significantly diminished. Although the Company's resources
and capital remain limited, the Company has begun directing efforts toward
reestablishing a foothold in the film industry.
Initially, the Company is promoting its film library in the Internet
markets as well as domestic television markets. Secondarily, it will utilize
representatives to attend film festivals and penetrate foreign markets, subject
to the Company capital resources.
Based upon the Company's estimates of future revenue as of December 31,
2000, approximately 31% of the unamortized film licenses will be amortized
during the three years ended December 31, 2003. Management expects that greater
than 60% of the film licenses applicable to related television and films will be
amortized by 2005.
The Company's policy is to amortize film licenses under the film forecast
method. Additionally, in accordance with SFAS No. 121 (see Note 1), the Company
assesses the value of other film licenses for impairment. Based upon the
forecast of future revenue anticipated from the sales of its films, the Company
has determined it appropriate to write down the carrying amount of its film
library by approximately $290,000 in 2000. Depending upon the Company's success
in marketing and achieving its sales forecast, it is reasonably possible that
the Company's estimate that it will recover the carrying amount of its film
library from future operations, will change in the near term. As a result of
this potential change, the carrying amount of the film library may be reduced
materially in the near term.
NOTE 6 - Notes Payable
The composition of Notes Payable at December 31, 2000 and 1999, was as
follows:
2000 1999
Advances and Demand Note bearing interest at
varying rates of up to 2% per month $ 13,200 $ 6,354
6% Convertible Secured Promissory Note
maturing in January, 2001 - 300,000
Settlement agreements and arbitration awards
maturing in April 2001 132,776 147,162
12% Convertible Secured Promissory Note
maturing in June 2002 (See Note 18) 100,000 -
-------- -------
245,976 453,516
Less current portion ............................ 145,976 52,910
-------- -------
Long term portion ............................... $100,000 $400,606
======== ========
F-12
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 7 - Producer's Minimum Guarantees and Participations
Obligations incurred in connection with the acquisition of film licenses,
including minimum guarantees and producer's participations were $11,958 at
December 31, 2000. During 2000, the Company did not reduce its obligations to
producers.
The following schedule summarizes by year the maturities of the balances at
December 31, 2000:
2001 $ 5,784
2002 -
2003 6,166
--------
$ 11,950
NOTE 8 - Shareholders' Equity
Throughout 2000 and 1999, the Company issued common stock through various
private placements and the exercise of options. The prices at which the shares
were negotiated and sold varied, depending upon the bid and ask prices of the
Company's common stock quoted on the NASDAQ stock exchange. In the aggregate,
the Company received $983,599 and $757,322 for 3,591,100 and 1,538,719 shares of
common stock pre one for ten reverse stock split in 2000 and 1999, respectively.
In connection with payments to creditors for notes payable and indebtedness
to producers, the Company issued 65,625 pre one for ten reverse split shares
valued at $32,600 in 1999. In connection with payables for operating activities,
the Company issued 1,931,190 pre one for ten reverse split shares, valued at
$252,783, and 819,631 shares valued at $294,741 in 2000 and 1999, respectively.
Also, in 2000 and 1999, the Company issued pre one for ten 597,880 shares
and 104,585 shares to employees as compensation, valued at $67,570 and $55,540,
respectively.
All shares issued in 2000 and 1999 for notes payable, indebtedness to
producers and payables for operating, were not registered and, as such, were
restricted shares under the Securities Act of 1933, as amended.
Net (loss) per common share for 2000 and 1999 has been computed by dividing
net (loss), after preferred stock dividend requirements of $8,356 in 2000 and
$10,259 in 1999, by the weighted average number of common shares outstanding
throughout the year of 863,733 and 488,378, respectively.
Options Granted
In January 1994, in connection with an amendment to the Employment
Agreement for the President and Chief Executive Officer, the Company issued
options to purchase 5000 shares of common stock at $20.35 per share, (all
amounts are pre one for ten reverse split), 110% of the market value at the
effective date (see Note 9). The options were for a term of five years. In
January 2000, none of the options had been exercised. and all the options
expired.
F-13
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 8 - Shareholders' Equity (Continued)
Options Granted (Continued)
On November 24, 1998, the Company issued to the members of the Board of
Directors and officers of the Company, options to purchase 445,000 shares of the
Company's common stock for $.375 per share (pre one for ten reverse split). The
term of the options are five years. As of December 31, 2000, 110,000 remain
unexercised. Additionally, on November 24, 1998, the Company issued options to
purchase 180,000 shares of the Company's common stock to three consultants
(60,000 to each) for $.48 per share (pre one for ten reverse split) for services
performed for the Company. The term of the options are five years. As of
December 31, 2000, none of the options were outstanding. Further, on November
24, 1998, the Company issued to the Chairman of the Board and President options
to purchase 189,880 shares of the Company's common stock for $.375 per share in
recognition of his success in raising funds for the Company during 1998. The
term of these options are five years. At December 31, 2000, none of the options
were outstanding.
On May 17, 1999, the Company issued options to purchase shares of the
Company's common stock as follows (pre one for ten reverse split): 240,000 to
the Board of Directors; 41,667 to the President of the Company and 25,000 to an
employee of the Company. These options issued in recognition of the services
provided to the Company, have an exercise price of $.48 and a five year term
through May 17, 2004. As of December 31, 2000, none of the options remain
unexercised.
Additionally on May 17, 1999, the Company issued (pre one for ten reverse
split) 41,667 options to the Company's President in recognition of his
successful efforts in raising additional capital for the Company. The options
had an exercise price of $.48 and were all exercised during 1999.
On June 23, 1999, the Company issued (pre one for ten reverse split) 21,875
options to the Company's President in recognition of having raised additional
capital for the Company. The shares had an exercise price of $.48 with a five
year term through June 22, 2004, and all were exercised during 1999.
On December 30, 1999, the Company issued options to purchase shares of the
Company's common stock as follows (pre one for ten reverse split): 120,000 to
consultants for services provided to the Company, 100,000 to the Board of
Directors in recognition of their efforts and 230,000 to the President of the
Company, and a board member in recognition of their efforts in connection with
the acquisition of the Company's interest in NetDIVE, Inc. These options had an
exercise price of $.4375 and were all exercised, under a cashless provision,
during 2000.
On August 8, 1999, the Company issued (pre one for ten reverse split)
options to purchase 200,000 shares of the Company's common stock to a consultant
as consideration for their services in connection with the investment of
NetDIVE. The options included 100,000 shares with a provision for a cashless
exercise at $1.00 and 100,000, without such provision, also at $1.00. The
options are for a five year term through July 24, 2004. At December 31, 2000,
none of the options were exercised.
F-14
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 8 - Shareholders' Equity (Continued)
Convertible Preferred Stock
The Company's 12% non-voting convertible Preferred Stock entitles the
holder to dividends equivalent to a rate of 12% of the Preferred Stock
liquidation preference of $2.00 per annum (or $.24 per annum) per share payable
quarterly on March 1, June 1, September 1, December 1 in cash or common stock of
the Company having an equivalent fair market value, thereafter. Further, each
share of the Preferred Stock is convertible at the holder's option into 0.004
shares of Common Stock.
On March 16, 1999, the Company made a self-tender for all of the 233,900
outstanding shares of 12% Non-Voting Convertible Redeemable Preferred Stock (the
"12% Preferred") for 47,578 shares of the Company's common stock. As a result,
191,153 shares of preferred stock were redeemed for 31,540 shares of the
Company's common stock.
At December 31, 2000, 34,817 shares of the Preferred Stock were
outstanding. On June 30, 2000, 7,930 shares of the Preferred Stock were
converted to common shares.
The 12% Preferred presently entitle the holder to convert to 0.004 shares
of common stock, par value $.001, of the Company, and the accrued dividend,
before conversion, of 12% per annum, payable, when declared by the Board of
Directors, in cash or stock at the Company's option, per share of 12% Preferred.
Although the Company has not authorized the issuance of dividends, the total
value of accrued dividends as of December 31, 2000 is $81,472.
Warrants
On May 1, 1999, the Company's Class B Warrants expired.
On May 31, 1995, the Company entered into an investment banking agreement
for a five year period. In consideration, the Company issued warrants to
purchase (pre one for ten reverse split) 11,350 shares of the Company's common
stock at an exercise price of $6.75 per share. The warrants are exercisable for
five years, commencing at various dates from May 31, 1996 to May 31, 2001.
At December 31, 2000, all warrants were outstanding. In connection with the
investment banking agreement and the services provided to complete that
agreement, the Company issued to a consultant, warrants to purchase 1,135 shares
of the Company's common stock at an exercise price of $6.75 per share. These
warrants are exercisable for five years, commencing at various dates from May
31, 1996 to May 31, 2001. At December 31, 2000, all warrants were outstanding.
F-15
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 8 - Shareholders' Equity (Continued)
Warrants (Continued)
On November 24, 1998, the Company entered into a consulting agreement
whereby the consultant will perform corporate finance, provide due diligence on
mergers and acquisition candidates, and assist the Company on internal
structuring and the placement of new debt and equity issues. In consideration,
the Company granted (pre one for ten reverse split) warrants to purchase 300,000
shares of the Company's common stock at $.05 per share. The warrants became
available 50% immediately and 50% after 90 days from the date of the agreement.
The term of the warrants are three years. At December 31, 1999, all the warrants
had been exercised.
On October 5, 2000, the Company entered into an investment advisory
agreement whereby the investment advisor will provide introductions to the
financial community, assist in raising capital, provide merger and acquisition
candidates, and provide other advisory services. In consideration, the Company
granted warrants to purchase (pre one for ten reverse split) 250,000 shares of
the Company's common stock at $4.00 per share. The term of the warrants are five
years and expire on October 14, 2004. At December 31, 2000, none of the warrants
were exercised.
Convertible Debt
During 1999, the Company issued a series of 6% Secured Convertible
Promissory Notes which, in the aggregate, amounted to $300,000. In August of
2000, these Notes were converted (pre one for ten reverse split) for 316,668
shares of common stock. During 2000, the Company issued $100,000 of 12% Secured
Convertible Debentures as consideration for legal services performed in previous
years (See Note 6).
NOTE 9 - Related Parties
The Company paid rent under one sub-lease during 2000 and 1999 to a company
affiliated with the Chief Executive Officer. The rent paid and terms under the
subleases were substantially the same as that of the affiliate's lease
agreements with the landlord. The Company paid rent of $2,880 to an employee for
the use of her home office in Boynton Beach, Florida. Rent expense for the years
ended December 31, 2000, and 1999 was approximately $78,900 and $72,400,
respectively.
The Company acquired distribution rights to two films from a company
affiliated with the Chief Executive Officer for a license period, which expires
on June 5, 2003. The Company is obligated to pay the affiliated producers fees
at the contract rate when revenue is recognized from the sale of the films. Such
payments will be charged against earnings. In 2000 and 1999, no payments were
made to the affiliate, and no revenue was recognized.
The Company owns distribution rights to two films which were acquired
through a company affiliated with the Chief Executive Officer, that is the
exclusive agent for the producers. This exclusive agent is 100% owned by the
principal shareholder of the Company, but receives no compensation for the sale
of the licensing rights. Additionally, after recoupment of original acquisition
costs, the principal shareholder has a 5% interest as a producer in the revenue
received by unaffiliated entities. The Company has received no revenue relating
to these films during 2000 and 1999.
F-16
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 9 - Related Parties (Continued)
Throughout 2000 and 1999, the Company's principal shareholder and officer
made loans to, and payments on behalf of, the Company and received payments from
the Company from time to time. The largest net balance due to the officer in
2000 was $86,469. The largest net balance due from the officer was $3,857. The
net outstanding balance with the officer at December 31, 2000 and 1999,
respectively, was a balance due to him of $40,684 and a balance due from him of
$3,857.
As part of salary, bonuses and other compensation, the Company's President
and Chief Executive Officer, was issued (pre one for ten reverse split) 501,450
shares of common Stock (See Note 8), valued at $61,784 in 2000 and 467,267
shares valued at $71,301 in 1999. Additionally, during 2000 and 1999, the
Company's President received options (pre one for ten reverse split) for 250,000
shares at $.4375 per share and 383,542 shares at prices ranging from $.48 to
$.68 per share, respectively. These options were issued for services as a Board
of Directors member and for additional efforts on behalf of the Company.
Further, the Company issued options to other non-employee directors in 2000 and
1999 for 100,000 and 250,000 shares, respectively.
NOTE 10 - Commitments and Contingencies
Leases
The Company leases its New York office facility under a sublease. A Florida
office was leased on a month to month basis through September 1999 at which time
it was closed. The New York lease expires in May 2002 (see Note 9). Future
minimum annual base rental commitments as of December 31, 2000 are as follows:
2001 $ 73,280
2002 32,000
--------
$105,280
========
License Agreements
In some instances, film licensors have retained an interest in the future
sale of distribution rights owned by the Company above the guaranteed minimum
payments. Accordingly, the Company may become obligated for additional license
fees as sales occur in the future.
Employment Agreements
Mr. Hreljanovic has an Employment Agreement with the Company which expires
on April 30, 2005, and that provides for his employment as President and Chief
Executive Officer at an annual salary adjusted annually for the CPI Index and
for the reimbursement of certain expenses and insurance. Based on the foregoing
formula, Mr. Hreljanovic was entitled to salary in 2000 of $182,858.
Additionally, the employment agreement provides that Mr. Hreljanovic may receive
shares of the Company's common stock as consideration for raising funds for the
Company.
F-17
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 10 - Commitments and Contingencies (Continued)
Employment Agreements (Continued)
Due to the Company's working capital deficit, it was unable to pay any
salary in cash to Mr. Hreljanovic pursuant to his employment agreement. In the
best interests of the Company, in lieu of cash, Mr. Hreljanovic has agreed to
accept shares of the Company's common stock as payment for up to 40% of his
unpaid salary. Accordingly, during 2000, the Company issued 501,450 shares of
stock (pre one for ten reverse split) valued at $61,784, in lieu of cash
payments to Mr. Hreljanovic for his net salary. Further, Mr. Hreljanovic agreed
to accept the balance of his salary during 2000, in the form of options to
purchase 282,930 shares of common stock at $.4375 per share. These options were
exercised under a cashless provision, which resulted in the issuance to Mr.
Hreljanovic of 192,904 shares. Additionally, the Company issued options (pre one
for ten reverse split) for 250,000 shares at $.4375 per share to Mr. Hreljanovic
as compensation for his services as a member of the Board of Directors, and for
other efforts on behalf of the Company (see Note 8). These options were
exercised under a cashless provision and resulted in the issuance of 97,836
shares. The Company issued 187,636 shares of common stock to Mr. Hreljanovic in
1999 to liquidate the amount owed to him for his 1999 and 1997 salary and 57,641
shares of common stock as additional compensation for achieving certain
performance benchmarks for obtaining new hospital contracts.
Under the terms of this employment agreement, the Chief Executive Officer
of the Company is entitled to receive a cash bonus when the Company's pre-tax
profit exceeds $100,000.
Further, if the employment agreement is terminated by the Company after a
change in control (as defined by the agreement), the officer is entitled to a
lump sum cash payment equal to approximately three times his base salary.
Mr. Vazquez, former President of PCI, had an employment agreement which
terminated on June 30, 2000. Under the terms of his agreement, as amended, Mr.
Vazquez received options to purchase shares of the Company's common stock.
Effective December 2000, Mr. Vazquez and the Company agreed to an early
termination of the Agreement (see Note 10). Accordingly, Mr. Vazquez surrendered
all options previously issued to him and agreed to forego any stock or options
to which he was entitled.
Preemptive Rights
In January of 2001, the Company employed a new president for its subsidiary
JINI. Although a formal employment agreement has not been prepared, the terms of
employment include a salary of $200,000 per year, and options to purchase
100,000 shares of common stock at $1.20 per share to be earned as certain
benchmarks are achieved over a two year period. Additionally, the terms of
employment provide for an auto allowance and health insurance.
F-18
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 10 - Commitments and Contingencies (Continued)
Litigation
On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action against the Company, alleging that the Company has successor liability
for a judgment entered in March of 1993 by the Plaintiffs against Juniper
Releasing, Inc. ("Releasing"), a company affiliated with the Company's CEO. This
matter was settled in April 1999 for a payment of $310,000 to be paid out in
three annual payments, maturing on April 20, 2001. As inducement to secure a
settlement which provided for annual payments over three years, the Company
issued 93,320 shares of common stock for the benefits of the Plaintiffs. (see
Note 6). Payments made during 2000 were less than those required by the
settlement agreement. According, the Company is currently in default of this
obligation.
Going Concern
As shown in the accompanying financial statements, the Company's:
* Revenue increased slightly to $727,000 in 2000 from $718,000 in 1999;
* Net loss was $1,720,000 in 2000, and $1,537,000 in 1999;
* Working capital was negative $597,610 at December 31, 2000 and was negative
$312,434 at December 31, 1999.
The fact that the Company continued to sustain losses in 2000 has negative
working capital at December 31, 2000 and still requires additional sources of
outside cash to sustain operations continues to create uncertainty about the
Company's ability to continue as a going concern.
Management of the Company has developed a plan to reduce its liabilities
and improve cash flow through expanding operations, including moving into the
installation and support for broadband services providers, and raising
additional funds either through the issuance of debt or equity. The ability of
the Company to continue as a going concern is dependent upon the Company's
ability to raise additional funds either through the issuance of debt or the
sale of additional common stock and the success of Management's plan to expand
operations. The Company anticipates that it will be able to raise the necessary
funds it may require for the remainder of 2001 through public or private sales
of securities. The financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern.
NOTE 11 - Incentive Compensation Plans
1996 Stock Option Plan
On February 12 , 1997, the shareholders of the Company adopted the 1996
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. This Plan, which allows the
Company to grant incentive stock options, non-qualified stock options and stock
appreciation rights (collectively "options"), to employees, including officers,
and to non-employees involved in the continuing development and success of the
Company, authorizes the grant (pre one for ten reverse split) of 100,000 shares
of common stock. The terms of the options are to be determined by the Board of
Directors.
F-19
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 11 - Incentive Compensation Plans (Continued)
1996 Stock Option Plan (Continued)
Options will not have expiration dates later than ten years from the date
of grant (five years from the date of the grant in the case of a 10%
Stockholder). The Option Prices may not be less than the fair market value of
the common shares on the date of grant, except that any option granted to an
employee holding 10% or more of the outstanding voting securities of the Company
must be for an option price not less than 110% of fair market value. At December
31, 2000, all options under the Plan had been granted and none remain
outstanding and unissued.
1998 Stock Option Plan
On December 30, 1998, the shareholders of the Company adopted the 1998
Stock Option Plan.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase (pre one for ten reverse split) up to an aggregate of
1,000,000 shares of common stock to employees, including officers, and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10% stockholder). The option
prices may be set at any amount in the discretion of the Board's Compensation
Committee. At December 31, 2000, all options under the Plan had been granted.
1999 Stock Option Plan
On December 27, 1999, the shareholders of the Company adopted the 1999
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. The Plan also supplements the
Company's 1996 and 1998 Stock Option Plans.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase (pre one for ten reverse split) up to an aggregate of
1,500,000 shares of common stock to employees, including officers, and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10% stockholder). The option
prices may be set at any amount in the discretion of the Board's Compensation
Committee. At December 31, 2000, 1,307,930 options had been granted of which
none remain unexercised and 192,070 remain unissued.
2000 Stock Option Plan
On December 28, 2000, the shareholders of the Company adopted the 2000
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. The Plan also supplements the
Company's 1996, 1998 and 1999 Stock Option Plans.
F-20
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 11 - Incentive Compensation Plans (Continued)
2000 Stock Option Plan (Continued)
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase (pre one for ten reverse split) up to an aggregate of
1,500,000 shares of common stock to employees, including officers, and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10% stockholder). The option
prices may be set at any amount in the discretion of the Board's Compensation
Committee. At December 31, 2000, no options under the Plan were granted.
Statement of Financial Accounting Standards No. 123
At December 31, 1999, the Company had a stock-based compensation plan, as
described above. The Company applies APB Opinion 25, Accounting for Stock Issued
to Employees, and related Interpretations in accounting for its plan.
Accordingly, no compensation cost has been recognized for its fixed stock option
plan or for options issued to non-employees for services performed. Had
compensation costs for these options been determined, based on the fair market
value at the grant dates consistent with the method of FASB Statement 123,
Accounting for Stock-Based Compensation, the Company's net income (loss) and net
income (loss) per common share would have been reduced to the pro forma amounts
indicated below:
2000 1999
Net income (loss) ............... As reported $(1,719,879) $(1,536,709)
Pro forma $(1,816,719) $(2,242,155)
Net income (loss) per common share As reported $ (2.00) $ (3.19)
Pro forma $ (2.11) $ (4.63)
NOTE 12 - Income Taxes
For the years ended December 31, 2000 and 1999, no provision was made for
Federal and state income taxes due to the losses incurred during these periods.
As a result of losses incurred through December 31, 2000, the Company has net
operating loss carryforwards of approximately $8,585,000. These carryforwards
expire as follows:
2006 $ 490,000
2007 1,451,000
2008 165,000
2009 717,000
2010 231,000
2011 568,000
2012 1,107,000
2016 956,000
2017 1,257,000
2018 1,643,000
----------
$8,585,000
F-21
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 12 - Income Taxes (Continued)
In accordance with Financial Accounting Standards Board Statement No. 109
"Accounting for Income Taxes", the Company recognized deferred tax assets of
$3,520,000, at December 31, 2000. The Company is dependent on future taxable
income to realize deferred tax assets. Due to the uncertainty regarding their
utilization in the future, the Company has recorded a related valuation
allowance of $3,520,000. Deferred tax assets at December 31, 2000 primarily
reflect the tax effect of net operating loss carryforwards.
NOTE 13 - Acquisitions
On June 23, 2000, the Company completed its acquisition of 51% of Nuclear
Cardiac Imaging, Inc. ("NCI"), a New York Corporation. The acquisition, recorded
under the purchase method of accounting, included the purchase of the
outstanding shares of common stock in exchange for 250,000 shares of the
Company's common stock valued at $156,000. A portion of the purchase price
(including the 49% interest previously owned by the Company) has been allocated
to assets acquired and liabilities assessed, based on estimated fair market
value at the date of acquisition, while the balance of $409,886 was recorded as
goodwill and is being amortized over forty years on a straight-line basis.
On March 17, 2000, the Company acquired 100% of Juniper Internet
Communications, Inc. ("JINI"), formerly known as Computer Design Associates,
Ltd. ("CDA"), a New York Company. The acquisition was effectuated by exchanging
all of CDA's outstanding shares of common stock for 15,000 shares of the
Company's common stock, valued at $150,000, substantially all of which was
recorded as goodwill, amortized on a straight-line basis over forty years. The
acquisitions was recorded under the pooling method of accounting.
NOTE 14 - Business Segment Information
The operations of the Company are divided into two business segments:
healthcare - consisting of managed care revenue enhancement and healthcare cost
containment services; and entertainment and technology services - consisting of
the acquisition and distribution of rights to films and a provider of technology
services in the area of communications, Internet services, DSL and other web
development services. The Company markets its managed care revenue enhancement
services throughout the United States; and films are available to be marketed
throughout the world.
Financial information by business segment is as follows:
2000 1999
Revenue:
Healthcare ..................................... $ 487,378 $ 580,594
Entertainment and technology services ............ 239,959 137,036
---------- ----------
$ 727,337 $ 717,630
=========== ==========
Operating Income (Loss):
Healthcare ................................... $ (483,275) $ (749,663)
Entertainment and technology ................. (469,932) (15,783)
Corporate .................................... (766,672) (771,263)
---------- ----------
$(1,719,879) $(1,536,709)
=========== ===========
F-22
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 14 - Business Segment Information (Continued)
2000 1999
--------- --------
Identifiable Assets:
Healthcare .................................... $ 442,497 $ 682,983
Entertainment and technology services.......... 3,029,491 3,180,507
Corporate ..................................... 673,896 547,951
Total assets for reportable segment ................ 4,145,884 4,411,441
Elimination of intersegment investments............. (177,626) (177,626)
Total consolidated assets........................... $ 3,968,258 $ 4,233,815
========== ==========
Depreciation:
Healthcare .................................... $ 22,923 $ 33,853
Corporate ..................................... 10,631 3,947
Entertainment and technology services.......... 4,454 -
--------- ----------
$ 38,008 $ 37,800
========== ==========
Capital Expenditures:
Healthcare .................................... $ 75,000 $ -
Corporate ..................................... 47,660 6,584
Entertainment and technology services.......... 57,610 -
----------- ----------
$ 180,270 $ 6,584
========== ==========
NOTE 15 - Quarterly Results of Operations (Unaudited)
Below is a summary of the quarterly results of operations for each quarter
of 2000 and 1999:
2000 First Second Third Fourth
Revenue ............$ 330,394 $ 195,001 $ 184,213 $ 17,729
Gross profit ....... 266,793 142,492 51,585 1,042
Net income (loss) ..$ (201,916) $ (197,044) $ (275,504) $(1,045,415)
Net income (loss)
per common share....$ (0.29) $ (0.25) $ (0.32) $ (0.95)
1999 First Second Third Fourth
Revenue ............$ 153,929 $ 141,097 $ 288,180 $ 134,424
Gross profit ....... 122,043 107,259 259,031 58,495
Net income (loss) .. (270,695) $ (286,375) $ (304,786) $ (674,853)
Net income (loss)
per common share ...$ (0.85) $ (0.72) $ (0.54) $ (1.06)
NOTE 16 - Supplemental Cash Flow Information
Cash paid for interest totaled $12,393 and $24,985 in 2000 and 1999,
respectively.
F-23
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 16 - Supplemental Cash Flow Information (Continued)
During 2000, the following transactions occurred which did not require the
use of cash but instead were paid by the issuance of the Company's common stock;
officer's compensation of $67,570; acquisition and capitalization of JINI, a
wholly owned subsidiary, of $150,000; payment of corporate debt amounting to
983,599; and certain corporate expenses amounting to $252,783.
During 1999, the following transactions occurred which did not require the
use of cash, but instead were paid by the issuance of the Company's common
stock: payments to producers amounting to $32,600; officers compensation of
$71,301; employee compensation of $55,540; payment of corporate debt amounting
to $734,822; and certain corporate expenses amounting to $294,741.
NOTE 17 - Major Customers
In 2000 and 1999, Maimonides Hospital, in Brooklyn, New York, accounted for
44% and 17%, respectively, of the total revenue of the Company. New York
Downtown Hospital and Defense Finance and Accounting Service, each accounted for
13% of the total year 2000 revenue. No other customer accounted for more than
10% of the Company's total revenue.
NOTE 18 - Subsequent Events
From January 1, 2001 through March 28, 2001, the Company raised $261,600
from 1) the issuances of $167,000 of convertible debentures, and 2) $94,600 of
other loans. During this period, the Company issued 300,000 shares of common
stock as follows: 135,000 for the conversion of debt to equity and 165,000 in
connection with three consulting agreements.
On January 25, 2001, the Company filed a registration statement on Form S-8
to register 1,500,000 options (and the underlying stock) to be granted under the
Company's 2000 Stock Option Plan and to register 165,000 shares of the Company's
common stock issuable upon exercise of options granted to three consultants in
consideration of services rendered.
F-24
SIGNATURES
In accordance with section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed by the undersigned,
thereunto duly authorized.
Date: March ___, 2000 JUNIPER GROUP, INC.
By: /s/ Vlado Paul Hreljanovic
--------------------------
Vlado Paul Hreljanovic
President and
Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
Signatures Titles Date
By:/s/ Vlado Paul Hreljanovic Chairman of the Board,
-------------------------- President, Chief Executive
Vlado Paul Hreljanovic Officer (Principal Executive
and Financial Officer) March 30, 2000
By: /s/ Harold A. Horowitz Director March 30, 2000
-----------------------
Harold A. Horowitz
By:/s/Barry S. Huston Director March 30, 2000
-----------------------
Barry S. Huston
F-25