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 2001
[ ] 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
2
PART I FINANCIAL INFORMATION
Balance Sheet
March 31, 2001 3
Statements of Operations 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
PART II
Other Information 9
Signatures 10
3
The Jarrett/Favre Driving Adventure, Inc.
Balance Sheet
March 31, 2001
ASSETS
Current assets:
Cash $ 16,765
Accounts receivable 1,127
Inventory 9,457
Prepaid expenses 162,815
-----------
Total current assets 190,164
Property and equipment, at cost, net of
accumulated depreciation of $ 160,623 431,580
Other assets 58,555
-----------
$ 680,299
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 11,938
Accounts payable 120,408
Accrued expenses 37,007
Accrued salaries - officers 210,000
Deferred revenue 123,768
Note payable 100,000
Notes payable to shareholders 174,000
-----------
Total current liabilities 777,121
Long-term debt 42,698
-----------
Total liabilities 819,819
-----------
Stockholders' equity:
Common stock, $ .01 par value,
100,000,000 shares authorized
13,483,500 outstanding 134,835
Additional paid-in capital 2,919,334
Unearned services (711,029)
Deficit (2,482,660)
-----------
Total stockholders' equity (139,520)
-----------
$ 680,299
===========
The accompanying notes are an integral part of these financial statements.
4
The Jarrett/Favre Driving Adventure, Inc.
Statement of Operations
3 Mos. Ended 3 Mos. Ended 9 Mos. Ended 9 Mos. Ended
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
2001 2000 2001 2000
-------------- ------------ -------------- ------------
Sales $ 108,832 $ 102,751 $ 662,324 $ 337,884
Cost of sales and services 153,036 80,043 474,630 292,224
---------- ---------- ---------- ----------
Gross profit (44,204) 22,708 187,694 45,660
---------- ---------- ---------- ----------
General and administrative expenses:
Salaries, wages and benefits 72,878 61,858 222,991 214,255
Advertising and marketing expense 3,660 22,179 68,591 95,765
Other 34,165 52,893 95,792 100,152
Compensation of officers 30,000 30,000 90,000 189,000
Depreciation 27,000 28,313 76,200 59,813
Amortization of service contracts 22,306 22,916 68,140 68,750
Rent 18,286 15,838 52,698 46,272
Professional fees 18,149 4,668 33,435 19,816
---------- ---------- --------- ---------
Total expenses 226,444 238,665 707,847 793,823
---------- ---------- --------- ---------
Income (loss) from operations (270,648) (215,957) (520,153) (748,163)
---------- ---------- --------- ---------
Other income and (expenses):
Other income 20 858 6,916 13,278
Interest income - - - 104
Interest expense (3,386) (580) (5,729) (1,652)
--------- --------- -------- --------
Income before taxes (274,014) (215,679) (518,966) (736,433)
Income taxes - - - -
--------- --------- -------- --------
Net income (loss) $(274,014) $(215,679) $(518,966) $(736,433)
========= ========= ========= =========
Per share information:
Basic (loss) per share $ (0.02) $ (0.02) $ (0.04) $ (0.06)
========= ========= ========= =========
Weighted average
shares outstanding 13,232,944 12,548,500 13,124,686 12,446,009
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
5
The Jarrett/Favre Driving Adventure, Inc.
Statement of Cash Flows
9 Mos. Ended 9 Mos. Ended
Mar. 31, Mar. 31,
2001 2000
------------- -------------
Net (loss) $ (518,966) $ (736,433)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 144,340 130,394
Common stock subscribed for services 140,000 -
Sponsorship revenue (82,830)
Changes in assets and liabilities:
(Increase) decrease in inventory 3,684 (23,333)
(Increase) decrease in prepaid expenses (166,230) 15,604
(Increase) decrease in other assets 2,575 (3,226)
Increase (decrease) in deferred revenue 15,306 123,278
Increase (decrease) in accounts payable and
accrued expenses 142,604 111,742
----------- -----------
Total adjustments 282,279 271,629
----------- -----------
Net cash (used in) operating activities (236,687) (464,804)
----------- -----------
Cash flows (used in) investing activities:
Acquisition of property and equipment (80,783) (35,995)
----------- -----------
Net cash (used in) investing activities (80,783) (35,995)
----------- -----------
Cash flows from financing activities:
Common stock sold for cash 348,500
Proceeds from notes payable 133,518
Proceeds from shareholder advances 147,500 50,000
Repayment of shareholder advances (18,500)
Purchase of officers' shares (1,000)
Repayment of long term debt (5,598) (3,607)
---------- ----------
Net cash from financing activities 256,920 393,893
---------- ----------
Increase (decrease) in cash (60,550) (106,906)
Cash and equivalents, beginning of period 77,315 126,020
---------- ----------
Cash and equivalents, end of period $ 16,765 $ 19,114
========== ==========
The accompanying notes are an integral part of these financial statements.
6
The Jarrett/Favre Driving Adventure, Inc.
Notes to Financial Statements
March 31, 2001
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, 2001.
Stockholders' Equity
Basic loss per share was computed using the weighted average number of common
shares outstanding.
.
7
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 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, 2001, Jarrett/Favre acquired
plant and equipment of $80,783 resulting in net cash used in investing
activities of $80,783.
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 nine months ended March 31, 2001, Jarrett/Favre received
proceeds from notes payable of $133,518 and received a loan from an
officer of $147,500. Jarrett/Favre repaid shareholder advances of
$18,500 and repaid long term debt of $5,598. As a result,
Jarrett/Favre had net cash provided by financing activities of
$256,920 for the nine months ended March 31, 2001.
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.
On a long term basis, liquidity is dependent on continuation of
operation and receipt of revenues.
8
Results of Operations. For the nine months ended March 31,2001,
Jarrett/Favre had sales of $662,324 and cost of sales of $474,630
resulting in gross profit of $187,694.
Quarterly revenue was affected adversely due to the cancellation of
nine track days because of inclement weather. Revenues which would
have resulted from those days could not be recognized because of the
Company's accounting systems. This resulted in understated revenue
for the quarter and an increase in pre-paid revenues as a line item on
the Company balance sheet. The days are rescheduled to run throughout
the remainder of the year. The Company recognized a few cancelled
reservations as a result.
For the nine months ended March 31, 2000, Jarrett/Favre had sales of
$337,884 and cost of sales of 292,224 resulting in gross profit of
45,660.
For the nine months ended March 31, 2001, Jarrett/Favre had
general and administrative expenses of $707,847. These expenses
consisted primarily of salaries, wages and benefits of $222,991,
advertising and marketing expense of $68,591, other expense of
$95,792, compensation of officers of $90,000, depreciation of $76,200,
amortization of service contracts of $68,140, rent of $52,698 and
professional fees of $33,425.
For the nine months ended March 31, 2000, Jarrett/Favre had
general and administrative expenses of $793,823. These expenses
consisted primarily of salaries, wages and benefits of $214,255,
advertising and marketing expense of $95,765, other expense of
$100,152, compensation of officers of $189,000, depreciation of
$59,813, amortization of service contracts of $68,750, rent of $46,272
and professional fees of $19,816.
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.
9
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.
10
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, 2001
By: /s/Timothy Shannon
---------------------
Timothy Shannon, President