1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------- FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended April 30, 1999. Commission file number 0-6649 Jilco Industries, Inc. - ------------------------------------------------------------------------------ (Exact name of small business issuer as specified in its charter) California 95-2075885 - ------------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P. O. Box 10539, Beverly Hills, California 90213 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (310) 274-1986 - ------------------------------------------------------------------------------ (Issuer's telephone number) Not Applicable - ------------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . --- --- 449,991 shares of the issuer's common stock, no par value, are outstanding as of April 30, 1999. Transitional Small Business Disclosure Format: Yes No X . --- --- 2 ITEM 1. JILCO INDUSTRIES, INC. BALANCE SHEETS JULY 31, 1998 (UNAUDITED) AND APRIL 30, 1999 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS April 30, July 31, 1999 1998 --------------- ---------------- CURRENT ASSETS Cash and cash equivalents $ 1,864 $ 2,049 --------------- ---------------- TOTAL CURRENT ASSETS $ 1,864 $ 2,049 =============== ================ LIABILITIES AND SHAREHOLDERS' DEFICIT CURRENT LIABILITIES Note payable to shareholder $ 53,250 $ 53,250 Note payable 57,500 48,000 Accrued interest 65,143 58,222 Other accrued expenses 800 800 --------------- ---------------- Total current liabilities 176,693 160,272 --------------- ---------------- SHAREHOLDERS' DEFICIT Common stock, no par value 1,500,000 shares authorized 449,991 shares issued and outstanding 749,950 749,950 Accumulated deficit (924,779) (908,173) --------------- ---------------- Total shareholders' deficit (174,829) (158,223) --------------- ---------------- TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 1,864 $ 2,049 =============== ================ The accompanying notes are an integral part of these financial statements. 1 3 JILCO INDUSTRIES, INC. STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 1999 AND 1998 (UNAUDITED) - ------------------------------------------------------------------------------- Three Months Ended Nine Months Ended April 30, April 30, --------------------------------- --------------------------------- 1999 1998 1999 1998 --------------- ---------------- --------------- ---------------- OPERATING EXPENSES Professional fees $ - $ 19,240 $ 4,175 $ 25,993 Printer fees 1,220 1,538 3,647 12,432 Sundry 37 107 91 146 --------------- --------------- --------------- ---------------- Total operating expenses 1,257 20,885 7,913 38,571 --------------- ---------------- --------------- ---------------- LOSS FROM OPERATIONS (1,257) (20,885) (7,913) (38,571) OTHER EXPENSE Interest expense (2,382) (1,904) (6,921) (4,918) --------------- ---------------- --------------- ---------------- LOSS BEFORE PROVISION FOR INCOME TAXES (3,639) (22,789) (14,834) (43,489) PROVISION FOR INCOME TAXES - - 1,772 800 --------------- ---------------- --------------- ---------------- NET LOSS (3,639) (22,789) (16,606) (44,289) ACCUMULATED DEFICIT, BEGINNING OF PERIOD (921,140) (879,868) (908,173) (858,368) --------------- ---------------- --------------- --------------- ACCUMULATED DEFICIT, END OF PERIOD $ (924,779) $ (902,657) $ (924,779) $ (902,657) =============== ================ =============== =============== BASIC LOSS PER SHARE $ (0.01) $ (0.03) $ (0.04) $ (0.10) =============== ================ =============== ================ DILUTED LOSS PER SHARE $ (0.01) $ (0.03) $ (0.04) $ (0.10) =============== ================ =============== ================ WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING 449,991 449,991 449,991 449,991 =============== ================ =============== ================ The accompanying notes are an integral part of these financial statements. 2 4 JILCO INDUSTRIES, INC. STATEMENTS OF CASH FLOWS FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 1999 AND 1998 (UNAUDITED) - ------------------------------------------------------------------------------- Three Months Ended Nine Months Ended April 30, April 30, --------------------------------- --------------------------------- 1999 1998 1999 1998 --------------- ---------------- --------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (3,639) $ (22,789) $ (16,606) $ (44,289) Increase (decrease) in Accrued interest 2,382 1,904 6,921 4,918 Other accrued expenses - - - 800 --------------- ---------------- --------------- ---------------- Net cash used in operating activities (1,257) (20,885) (9,685) (38,571) --------------- ---------------- --------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from notes payable 2,000 21,000 9,500 38,000 --------------- ---------------- --------------- ---------------- Net cash provided by financing activities 2,000 21,000 9,500 38,000 --------------- ---------------- --------------- ---------------- Net increase (decrease) in cash and cash equivalents 743 115 (185) (571) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,121 290 2,049 976 --------------- ---------------- --------------- ---------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,864 $ 405 $ 1,864 $ 405 =============== ================ =============== ================ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION INTEREST PAID $ - $ - $ - $ - =============== ================ =============== ================ INCOME TAXES PAID $ - $ - $ - $ - =============== ================ =============== ================ The accompanying notes are an integral part of these financial statements. 3 5 JILCO INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS JULY 31, 1998 (UNAUDITED) AND APRIL 30, 1999 (UNAUDITED) - ------------------------------------------------------------------------------- NOTE 1 - THE COMPANY Jilco Industries, Inc. (the "Company") has been inactive since April 2, 1968 when it was discharged from bankruptcy under its previous name of Sportways, Inc. The expenses the Company has incurred represent those necessary to keep the Company in good standing in its state of residence. Fair Value of Financial Instruments ----------------------------------- For certain of the Company's financial instruments including cash and accrued expenses, the carrying amounts approximate fair value due to their short maturities. The amounts shown as notes payable also approximate fair value because current interest rates and terms offered to the Company for notes payable of similar maturities are substantially the same. Cash and Cash Equivalents ------------------------- For the purpose of reporting cash flows, the Company includes cash on deposit, cash on hand, and financial instruments purchased with an original maturity of three months or less to be cash equivalents. Interim Financial Information ----------------------------- The interim financial statements reflect all adjustments (which include only the normal recurring adjustments) necessary for a fair presentation of financial position, results of operations, and cash flows for such periods. The results of operations for the nine months ended April 30, 1999 are not necessarily indicative of the results that may be expected for the entire year ending July 31, 1999, or any other future periods. Estimates --------- 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 at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Accordingly, actual results could differ from those estimates. Income Taxes ------------ The Company utilizes Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. 4 6 JILCO INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS JULY 31, 1998 (UNAUDITED) AND APRIL 30, 1999 (UNAUDITED) - ------------------------------------------------------------------------------- NOTE 2 - LOSS PER SHARE The Company calculates basic loss per share using the weighted-average number of shares outstanding for the period. Diluted loss per share includes both the weighted-average number of shares and any common share equivalents such as options or warrants in the calculation. As the Company had no common share equivalents outstanding during any periods presented, basic and diluted loss per share are the same. NOTE 3 - NOTES PAYABLE TO SHAREHOLDER Notes payable to shareholder consisted of the following: April 30, July 31, 1999 1998 --------------- ---------------- Revolving note payable, interest accrues at 9% per annum. Principal and accrued interest are due on demand. $ 40,000 $ 40,000 Revolving note payable, interest accrues at 11% per annum. Principal and accrued interest are due on demand. 8,250 8,250 Revolving note payable, interest accrues at 10% per annum. Principal and accrued interest are due on demand. 5,000 5,000 --------------- ---------------- TOTAL $ 53,250 $ 53,250 =============== ================ NOTE 4 - NOTE PAYABLE The note payable is due on demand. Interest accrues at 8% per annum and is payable on December 31 of each year. 5 7 JILCO INDUSTRIES, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Registrant has not conducted any business operations during the last five (5) fiscal years, except that during the above fiscal years it has incurred expenses necessary to keep its good standing in its state of residence and to comply with the periodic reporting requirements of the Exchange Act. PART II. OTHER INFORMATION None of Items 1 through 5 of Part II are applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit No. Description ----------- ----------- 27 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JILCO INDUSTRIES, INC. Date: June 11, 1999 /s/ Martha J. Kretzmer --------------------------- Martha J. Kretzmer, President