2 U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: March 31 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from: to: Commission file number: 000-27251 JARRETT/FAVRE DRIVING ADVENTURE, INC. (Exact name of Small Business Issuer in its charter) FLORIDA 59-3564984 (State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 3660 Maguire Boulevard, Suite 101, Orlando Florida 32803 (Address of principal executive offices) (Zip Code) Registrant's Telephone number, including area code: (888) 467-2231 Check mark whether the Issuer (1) has filed all reports required by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. YES: X NO: APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PREVIOUS FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by the court. YES: X NO: APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date: 12,520,000 Transitional Small Business Disclosure Format. YES: NO: X 3 PART I FINANCIAL INFORMATION Balance Sheet March 31, 2000 4 Statements of Operations 5 Statements of Cash Flows 6 Notes to Financial Statements 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II Other Information 10 Signatures 11 Financial Data Schedule 12 4 The Jarrett/Favre Driving Adventure, Inc. Balance Sheet March 31, 2000 ASSETS Current assets: Cash $ 19,114 Inventory 37,729 Prepaid expenses 9,406 ----------------- Total current assets 66,249 Property and equipment, at cost, net of accumulated depreciation of $ 54,381 498,324 Other assets 15,425 ----------------- $ 579,998 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $ 5,977 Accounts payable 71,437 Accrued expenses 210,013 ---------------- Total current liabilities 287,427 ---------------- Loan from officer 50,000 Long-term debt 15,482 ---------------- Total liabilities 352,909 ---------------- Stockholders' equity: Common stock, $ .01 par value, 100,000,000 shares authorized, 12,620,000 shares issued and 12,520,000 outstanding 126,200 Additional paid-in capital 1,893,969 Subscribed shares 20,000 Treasury stock (100,000) Unearned services (824,586) Accumulated deficit (888,494) --------------- Total stockholders' equity 227,089 --------------- $ 579,998 =============== The accompanying notes are an integral part of these financial statements. 5 The Jarrett/Favre Driving Adventure, Inc. Statement of Operations Inception (Nov. 24, 1998) 3 Mos. Ended 3 Mos. Ended 9 Mos. Ended Through Mar. 31, Mar. 31, Mar. 31, Mar. 31, 2000 1999 2000 1999 ------------- -------------- ------------- ------------- Sales $ 124,296 $ - $ 414,429 $ - Cost of sales 134,918 - 442,197 - ------------- ------------- ------------- ----------- Gross profit (10,622) - (27,768) - Other costs and expenses: Selling expenses 12,820 - 76,971 - General and administrative 105,636 81,071 338,991 81,071 Depreciation and amortization 37,326 22,917 100,880 22,917 ------------- ----------- ------------ ----------- Income (loss) from operations (166,404) (103,988) (544,610) (103,988) Other income and (expenses): Other income 754 - 13,278 - Interest expense (580) - (1,652) - ------------- ----------- ----------- ---------- Income before taxes (166,230) (103,988) (532,984) (103,988) Income taxes - - - - ------------- ----------- ----------- ----------- Net income (loss) $ (166,230) $ (103,988) $ (532,984) $ (103,988) ============= =========== =========== =========== Per share information: Basic (loss) per share $ (0.01) $ (0.01) $ (0.04) $ (0.01) ============= =========== =========== ========== Weighted average shares outstanding 12,548,500 11,571,967 12,446,009 10,089,664 ============= =========== =========== ========== The accompanying notes are an integral part of these financial statements. 6 The Jarrett/Farve Driving Adventure, Inc. Statement of Cash Flows Inception (Nov. 24, 1998) 9 Mos. Ended Through Mar. 31, 2000 Mar. 31, 1999 Net (loss) $ (532,984) $ (103,988) Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 99,050 22,917 Equipment received in exchange for sponsorship (137,830) - Issuance of stock in exchange for services - 60,000 Changes in assets and liabilities: (Increase) decrease in inventory (23,333) - (Increase) decrease in prepaid expenses 15,604 - (Increase) decrease in other assets (3,226) - Increase (decrease) in accounts payable and accrued expenses 216,915 17,431 ------------ ------------ Total adjustments 167,180 100,348 ------------ ------------ Net cash (used in) operating activities (365,804) (3,640) ------------ ------------ Cash flows (used in) investing activities: Acquisition of property and equipment (35,995) - ------------ ------------ Net cash (used in) investing activities (35,995) - ------------ ------------ Cash flows from financing activities: Common stock sold for cash 348,500 381,000 Loan from officer 50,000 - Purchase of treasury stock (100,000) - Repayment of long term debt (3,607) - ----------- ----------- Net cash from financing activities 294,893 381,000 ----------- ----------- Increase (decrease in cash) (106,906) 377,360 Cash and equivalents, beginning of period 126,020 - ------------- ---------- Cash and equivalents, end of period $ 19,114 $ 377,360 The accompanying notes are an integral part of these financial statements. 7 The Jarrett/Favre Driving Adventure, Inc. Notes to Financial Statements March 31, 2000 Basis of Presentation The accompanying condensed unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to form 10-GSB. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. The accompanying financial statements should be read in conjunction with the Company's form 10-KSB filed for the period ended June 30, 1999. Stockholders' Equity Basic loss per share was computed using the weighted average number of common shares outstanding. During the three months ended March 31, 2000, the Company issued a subscription for 20,000 shares of restricted common stock in partial exchange for three racecars. Track Operations The Company commenced operations on July 2, 1999. During the three months ended March 31, 2000, the Company generated $ 108,183 in revenues from track operations. Sponsorship Revenue During the three month period ended March 31, 2000, the Company recognized sponsorship revenue in the amount of $ 24,830. The sponsoring corporation provided the Company with equipment used in operations. Equipment Purchases During the three months ended March 31, 2000, the Company purchased four (4) additional racecars to be used in track operations. These vehicles were purchased by the payment of cash in the amount of $ 18,500 and the issuance of a subscription for 20,000 shares of restricted common stock. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations: Trends and Uncertainties. Demand for Jarrett/Favre's products are dependent on, among other things, general economic conditions, which are cyclical in nature. Inasmuch as a major portion of Jarret/Favre's activities are the receipt of revenues from its driving school services and products, Jarrett/Favre's business operations may be adversely affected by Jarrett/Favre's competitors and prolonged recessionary periods. There are no known trends, events or uncertainties that have or are reasonably likely to have a material impact on Jarrett/Favre's short term or long term liquidity. Sources of liquidity both internal and external will come from the sale of Jarrett/Favre's products as well as the private sale of the company's stock. There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from Jarrett/Favre's continuing operations. There are no known causes for any material changes from period to period in one or more line items of Jarrett/Favre's financial statements. Jarrett/Favre does not anticipate any seasonality for its revenue stream. Capital and Source of Liquidity. Jarrett/Favre currently has no material commitments for capital expenditures. Jarrett/Favre has no plans for future capital expenditures such as additional race cars at this time. Jarrett/Favre anticipates in addition to revenues to raise additional capital to conduct operations during the next twelve(12) months. The company intends to raise the necessary capital through the private sale of stock. Jarrett/Favre believes that there will be sufficient capital from revenues and the private sale of stock to conduct operations for the next twelve(12) months. Presently, Jarrett/Favre's revenue comprises fifty(50) percent of the total cash necessary to conduct operations. The remaining fifty(50) percent of the cash necessary to conduct operations will come from the private sale of stock. Future revenues from classes and events will determine the amount of offering proceeds necessary to continue operations. The board of directors has no immediate offering plans in place. The board of directors shall determine the amount and type of offering as Jarrett/Favre's financial situation dictates. For the nine months ended March 31, 2000, Jarrett/Favre acquired plant and equipment of $35,995 resulting in net cash used in investing activities of $35,995. For the period from inception through March 31, 1999, Jarrett/Favre had no investing activities. For the nine months ended March 31, 2000, Jarrett/Favre sold common stock for $348,500, purchased treasury stock of $100,000 and repaid $3,607 of long-term debt. Additionally, Jarrett/Favre received a loan from an officer of $50,000. As a result, Jarrett/Favre had net cash provided by financing activities of $294,893 for the nine months ended March 31, 2000. For the period from inception through March 31, 1999, Jarrett/Favre received $381,000 from the sale of its common stock resulting in net cash from financing activities of $381,000. On a long term basis, liquidity is dependent on continuation of operation and receipt of revenues. Results of Operations. For the nine months ended March 31, 2000, Jarrett/Favre had sales of $414,429 and cost of sales of $442,197 resulting in gross profit of $(27,768). 9 For the nine months ended March 31, 2000, Jarrett/Favre had general and administrative expenses of $338,881. These expenses consisted primarily of salaries-officers of $90,000, salaries-other of $109,609, payroll taxes & benefits of $29,367, professional fees of $18,571, rent of $21,072, telephone expense of $26,217, equipment rental of $4,435, office supplies of $4,729, postage of $7,498, printing of $5,291, licenses and fees of $1,698, meals and entertainment of $1,735, bank/credit card charges of $8,201, web site expense of $5,937 and other expense of $4,631. For the period from inception through March 31, 1999, Jarrett/Favre had general and administrative expenses of $81,071. These expenses consisted primarily of salaries-officers of $60,000, salaries-other of $3,533, payroll taxes & benefits of $394, professional fees of $5,000, consulting services of $6,091 and other expense of $6,053. Jarrett/Favre shall focus on limiting its administrative costs. Plan of Operation. Jarrett/Favre may experience problems; delays, expenses and difficulties sometimes encountered by an enterprise in Jarrett/Favre's stage of development, many of which are beyond Jarrett/Favre's control. These include, but are not limited to, unanticipated problems relating to additional costs and expenses that may exceed current estimates and competition. Jarrett/Favre is not delinquent in any of its obligations. Jarrett/Favre intends to market its products and services utilizing cash made available from the private sale of its securities and operations. Jarrett/Favre's management is of the opinion that the proceeds of the sales of its securities and future revenues will be sufficient to pay its expenses for the next twelve months. 10 PART II OTHER INFORMATION ITEM 1, LEGAL PROCEEDINGS. Not applicable. ITEM 2. CHANGES IN SECURITIES- Not applicable ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable ITEM 4.SUBMISSION OF.MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable ITEM 5 OTHER INFORMATION. Not applicable. ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K. 11 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Jarrett/Favre Driving Adventure, Inc. (Registrant) Date. May 14, 2000 By: /s/Timothy Shannon --------------------- Timothy Shannon, President