SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or
15(d) Securities Exchange Act of 1934 for
Quarterly Period Ended December 31, 2001
- -OR-
[ ] Transition Report Pursuant to Section 13
or 15(d) of the Securities And Exchange Act of
1934 for the transaction period from _________
to________
Commission File Number 333-39942
Jarrett/Favre Driving Adventure, Inc.
- --------------------------------------------
(Exact name of registrant as specified in its
charter)
FLORIDA 59-3564984
- --------------------------------------------
(State or other jurisdiction (I.R.S. Employer
Identification Number)
of incorporation or organization
4279 Burnwood Trail, Denver, NC 28037
- --------------------------------------------
(Address of principal executive offices, Zip
Code)
(888) 467-2231
- ---------------------- --------------------
(Registrant's telephone number, including area
code)
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period
that the registrant was required to file such
reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
The number of outstanding shares of the
registrant's common stock,
December 31, 2001: Common Stock - 14,748,500
2
PART I -- FINANCIAL INFORMATION
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Company)
Item 1. Financial Statements
Balance Sheets,
December, 2001 (unaudited) 3
Statements of Operations for the
three and six months ended
December 31, 2001 and 2000,
(unaudited) 4
Statements of Cash Flows for the
six months ended December 31,
2001 and 2000(unaudited) 5
Notes to financial statements 6
3
The Jarrett/Favre Driving Adventure, Inc.
Balance Sheet
December 31, 2001
ASSETS
Current assets:
<s> <c>
Cash $ 38,287
Accounts receivable 2,756
Inventory 4,143
Prepaid expenses 30,748
---------
Total current assets 75,934
Property and equipment, at cost, net of
accumulated depreciation of $ 260,287 408,153
Other assets 6,300
---------
$ 490,387
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 19,401
Accounts payable 131,103
Accrued expenses 38,120
Accrued salaries - officers 240,000
Deferred revenue 10,808
Shareholder advances 308,422
---------
Total current liabilities 747,854
Long-term debt 59,340
-------
Total liabilities 807,194
-------
Stockholders' equity:
Common stock, $ .01 par value,
100,000,000 shares authorized
14,748,500 outstanding 147,485
Additional paid-in capital 3,332,684
Unearned services (641,669)
Deficit (3,155,307)
-----------
Total stockholders' equity (316,807)
-----------
$ 490,387
===========
The accompanying notes are an integral part
of these financial statements.
4
The Jarrett/Favre Driving Adventure, Inc.
Statement of Operations
6 Mos. Ended 6 Mos. Ended
Dec. 31, Dec. 31,
2001 2000
------------ ------------
<s> <c> <c>
Sales $ 519,726 $ 553,492
Cost of sales and services 346,640 321,594
----------- -----------
Gross profit 173,086 231,898
----------- -----------
General and administrative expenses:
Advertising and marketing expense 43,393 64,931
Amortization of service contracts 48,833 45,834
Compensation of officers - 60,000
Depreciation 62,400 49,200
Other 66,546 61,627
Professional fees 4,892 15,286
Rent 23,021 34,412
Salaries, wages and benefits 117,749 150,113
----------- -----------
Total expenses 366,834 481,403
----------- -----------
Income (loss) from
operations (193,748) (249,505)
Other income and (expenses):
Other income 21,080 6,896
Interest expense (10,489) (2,343)
--------- -----------
Income before taxes (183,157) (244,952)
Income taxes - -
--------- -----------
Net income (loss) $ (183,157) $ (244,952)
=========== ===========
Per share information:
Basic (loss) per share $ (0.01) $ (0.02)
=========== ===========
Weighted average shares
Outstanding 13,914,152 13,071,734
========== ===========
The accompanying notes are an integral part
of these financial statements.
5
The Jarrett/Favre Driving Adventure, Inc.
Statement of Cash Flows
6 Mos. Ended 6 Mos. Ended
Dec. 31, Dec.31,
2001 2000
------------- --------------
<s> <c> <c>
Net (loss) $ (183,157) $ (244,952)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 108,232 93,813
Issuance of stock in exchange for services 30,000
Changes in assets and liabilities:
(Increase) decrease in inventory 5,291 2,876
(Increase) decrease in prepaid expenses 52,993 (11,229)
(Increase) decrease in accounts receivable 3,898 1,135
Increase (decrease) in deferred revenue (104,005) (45,874)
Increase (decrease) in accounts payable and
accrued expenses (55,049) 67,977
----------- --------------
Total adjustments 11,360 138,698
----------- --------------
Net cash (used in) operating activities (171,797) (106,254)
------------ --------------
Cash flows (used in) investing activities:
Acquisition of property and equipment (17,115) (39,756)
------------ -------------
Net cash (used in) investing activities (17,115) (39,756)
------------ -------------
Cash flows from financing activities:
Common stock sold for cash 100,000 -
Loans from shareholders 130,000 77,500
Repayment of long term debt (9,075) (2,766)
---------- -------------
Net cash from financing activities 220,925 74,734
---------- -------------
Increase (decrease) in cash 32,013 (71,276)
Cash and equivalents, beginning of period 6,274 77,315
---------- ------------
Cash and equivalents, end of period $ 38,287 $ 6,039
The accompanying notes are an integral part
of these financial statements.
6
The Jarrett/Favre Driving Adventure, Inc.
Notes to Financial Statements
December 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 or
Plan of Operations
Trends and Uncertainties. Demand for the
Corporation's products are dependent on, among
other things, general economic conditions which
are cyclical in nature. Inasmuch as a major
portion of the Corporation's activities are the
receipt of revenues from its driving school
services and products, the Corporation's business
operations may be adversely affected by the
Corporation's competitors and prolonged
recessionary periods.
There are no known trends, events or uncertainties
that have or are reasonably likely to have a
material impact on the corporation's short term or
long term liquidity. Sources of liquidity both
internal and external will come from the sale of
the corporation's 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 the
Corporation's continuing operations. There are no
known causes for any material changes from period
to period in one or more line items of the
corporation's financial statements.
The Corporation currently has classes planned
through December 2002.
Capital and Source of Liquidity. The Corporation
currently has no material commitments for capital
expenditures. The Corporation has no plans for
future capital expenditures such as additional
race cars at this time.
The Corporation anticipates in addition to
revenues to raise additional capital to conduct
operations during the next twelve(12) months. The
corporation intends to raise the necessary capital
through the private sale of stock. The
Corporation believes that there will be sufficient
capital from revenues and the private sale of
stock to conduct operations for the next
twelve(12) months.
8
Presently, the Corporation's revenue comprises
eighty(80) percent of the total cash necessary to
conduct operations. The remaining twenty(20)
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 the
Corporation's financial situation dictates.
For the six months ended December 31, 2001, the
Corporation acquired property and equipment of
$17,115 resulting in net cash used in investing
activities of $17,115.
For the six months ended December 31, 2000, the
Corporation acquired property and equipment of
$39,756 resulting in net cash used in investing
activities of $39,756.
For the six months ended December 31, 2001, the
Corporation received proceeds from the sale of
common stock sold for cash of $100,000, received
loans from an officer of $130,000 and repaid long
term debt of $9,075. As a result, the Corporation
had net cash from financing activities of $220,925
for the six months ended December 31, 2001.
For the six months ended December 31, 2000, the
Corporation received loans from an officer of
$77,500 and repaid long term debt of $2,766. As
a result, the Corporation had net cash from
financing activities of $74,734 for the six months
ended December 31, 2000.
On a long term basis, liquidity is dependent on
continuation of operation and receipt of revenues.
Results of Operations. For the six months ended
December 31, 2001, the Corporation had sales of
$519,726 with a cost of sales of $346,640 for a
gross profit of $173,086.
For the six months ended December 31, 2001, the
Corporation had general and administrative
expenses of $366,834. These expenses consisted
of advertising and marketing expense of $43,393,
amortization of service contracts of $48,833,
depreciation of $62,400, salaries, wages and
9
benefits of $117,749, rent of $23,021,
professional fees of $4,892 and other expenses of
$66,546.
For the six months ended December 31, 2000, the
Corporation had sales of $553,492 with a cost of
sales of $321,594 for a gross profit of $231,898.
For the six months ended December 31, 2000, the
Corporation had general and administrative
expenses of $481,403. These expenses consisted
of advertising and marketing expense of $64,931,
amortization of service contracts of $45,834,
compensation of officers of $60,000, depreciation
of $49,200, salaries, wages and benefits of
$150,113, rent of $34,412, professional fees of
$15,286 and other expenses of $61,627.
The Corporation shall focus on limiting its
administrative costs.
Plan of Operation. The Corporation may experience
problems; delays, expenses and difficulties
sometimes encountered by an enterprise in the
Corporation's stage, many of which are beyond the
Corporation's control. These include, but are not
limited to, unanticipated problems relating to
additional costs and expenses that may exceed
current estimates and competition.
The Corporation is not delinquent in any of its
obligations even though the Corporation has
generated limited operating revenues. The
Corporation intends to market its products and
services utilizing cash made available from the
private sale of its securities and operations. The
Corporation'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 and Use of Proceeds.
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.
(a) Reports on Form 8-K. none
(b) Exhibits. none
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: February 19, 2002
The Jarrett/Favre Driving Adventure, Inc.
By /s/ Timothy B. Shannon
------------------------
Timothy B. Shannon
President and Director