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, 2002
- -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
Dale Jarrett Racing Adventure, Inc.
- --------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-3564984
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(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization
4279 Burnwood Trail, Denver, NC 28037
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(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, 2002: Common Stock - 16,867,900
2
PART I -- FINANCIAL INFORMATION
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Company)
Item 1. Financial Statements
Balance Sheets,
December 31, 2002 (unaudited) 3
Statements of Operations for the
six months ended
December 31, 2002 and 2001,
(unaudited) 4
Statements of Cash Flows for the
six months ended December 31,
2002 and 2001(unaudited) 5
Notes to financial statements 6
3
Dale Jarrett Racing Adventure, Inc.
Balance Sheet
December 31, 2002
ASSETS
Current assets:
<s> <c>
Cash $ 99,844
Inventory 4,068
Prepaid expenses 157,195
------------
Total current assets 261,107
Property and equipment, at cost, net of
accumulated depreciation of $ 389,264 281,671
Other assets 3,660
------------
$ 546,438
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable - bank $ 97,500
Current portion of long-term debt 21,178
Accounts payable 60,273
Accrued expenses 58,014
Accrued salaries - officers 187,000
Deferred revenue 331,430
Shareholder advances 337,321
------------
Total current liabilities 1,092,716
Long-term debt 38,145
------------
Total liabilities 1,130,861
------------
Stockholders' equity:
Common stock, $ .01 par value,
100,000,000 shares authorized
16,867,900 outstanding 168,679
Additional paid-in capital 3,516,548
Subscribed stock 10,000
Unearned services (578,336)
Deficit (3,701,314)
-----------
Total stockholders' equity (584,423)
-----------
$ 546,438
============
The accompanying notes are an integral part of these financial
statements.
4
Dale Jarrett Racing Adventure, Inc.
Statement of Operations
3 Mos. Ended 3 Mos. Ended 6 Mos. Ended 6 Mos. Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2002 2001 2002 2001
------------- ----------- ------------- ------------
<s> <c> <c> <c> <c>
Sales $ 232,073 $ 304,868 $ 420,386 $ 519,726
Cost of sales and services 126,318 155,593 247,370 346,640
----------- ----------- ----------- -----------
Gross profit 105,755 149,275 173,016 173,086
----------- ----------- ----------- -----------
General and administrative expenses:
Advertising and marketing expense 34,436 17,314 54,242 43,393
Amortization of service contracts 23,527 25,279 47,053 48,833
Compensation of officers 15,000 - 30,000 -
Depreciation 32,200 31,200 64,300 62,400
Other 24,149 30,494 50,381 66,546
Professional fees 10,000 953 13,040 4,892
Rent 7,950 10,422 15,900 23,021
Salaries, wages and benefits 37,931 56,079 70,444 117,749
----------- ----------- ----------- -----------
Total expenses 185,193 171,741 345,360 366,834
----------- ----------- ----------- -----------
Income (loss) from operations (79,438) (22,466) (172,344) (193,748)
----------- ----------- ----------- -----------
Other income and (expenses):
Other income 60 7,100 90 21,080
Interest expense (8,366) (3,919) (17,180) (10,489)
----------- ----------- ---------- -----------
Income before taxes (87,744) (19,285) (189,434) (183,157)
Income taxes - - - -
----------- ----------- ---------- -----------
Net income (loss) $ (87,744) $ (19,285) $(189,434) $ (183,157)
=========== =========== ========== ===========
Per share information:
Basic (loss) per share $ (0.01) $ 0.00 $ (0.01) $ (0.01)
=========== =========== ======== ==========
Weighted average
shares outstanding 16,867,900 14,089,804 16,863,504 13,914,152
=========== =========== ========== ==========
The accompanying notes are an integral part of these financial
statements.
5
Dale Jarrett Racing Adventure, Inc.
Statement of Cash Flows
6 Mos. Ended 6 Mos. Ended
Dec. 31, Dec. 31,
2002 2001
------------- ------------
<s> <c> <c>
Net (loss) $ (189,434) $ (183,157)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 116,244 108,232
Common stock subscribed for services 12,000 -
Changes in assets and liabilities:
(Increase) decrease in inventory (416) 5,291
(Increase) decrease in prepaid expenses (68,251) 52,993
(Increase) decrease in other assets 1,220 3,898
Increase (decrease) in deferred revenue 221,696 (104,005)
Increase (decrease) in accounts payable and
accrued expenses (8,228) (55,049)
----------- -----------
Total adjustments 274,265 11,360
----------- -----------
Net cash provided by (used in) operating activities 84,831 (171,797)
----------- -----------
Cash flows (used in) investing activities:
Acquisition of property and equipment (2,495) (17,115)
----------- -----------
Net cash (used in) investing activities (2,495) (17,115)
----------- -----------
Cash flows from financing activities:
Common stock sold for cash - 100,000
Proceeds from bank loan 10,000 -
Loan from officer 10,794 130,000
Repayment of long term debt (9,930) (9,075)
----------- -----------
Net cash from financing activities 10,864 220,925
----------- ----------
Increase (decrease) in cash 93,200 32,013
Cash and equivalents, beginning of period 6,644 6,274
---------- ---------
Cash and equivalents, end of period $ 99,844 $ 38,287
========== =========
The accompanying notes are an integral part of these financial
statements.
6
Dale Jarrett Racing Adventure, Inc.
Notes to Financial Statements
December 31, 2002
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, 2002.
Stockholders' Equity
Basic loss per share was computed using the weighted average number of
common shares outstanding.
Change of Corporate Name
Effective November 21, 2002, the Company has changed its name to Dale
Jarrett Racing Adventure, Inc.
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 2003.
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.
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, 2002, the Corporation acquired
property and equipment of $2,495 resulting in net cash used in
investing activities of $2,495.
8
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, 2002, the Corporation received
proceeds from bank loan of $10,000, loans from officer of $10,794 and
repaid long term debt of $9,930. As a result, the Corporation had net
cash from financing activities of $10,864 for the six months ended
December 31, 2002.
For the six months ended December 31, 2001, the Corporation received
cash from the sale of common stock of $100,000, loans from 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.
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, 2002,
the Corporation has sales of $420,386 with a cost of sales and services
of $247,370 for a gross profit of $173,016.
For the six months ended December 31, 2002, the Corporation had general
and administrative expenses of $345,360. These expenses consisted of
advertising and marketing expense of $54,242, amortization of service
contracts of $47,053, compensation of officers of $30,000, depreciation
of $64,300, salaries, wages and benefits of $70,444, rent of $15,900,
professional fees of $13,040 and other expenses of $50,381.
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
benefits of $117,749, rent of $23,021, professional fees of $4,892 and
other expenses of $66,546.
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.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of
our chief executive officer and chief financial officer, conducted
an evaluation of our "disclosure controls and procedures" (as
defined in Securities Exchange Act of 1934 (the "Exchange Act")
Rules 13a-14(c)) within 90 days of the filing date of this quarterly
report on Form 10QSB (the "Evaluation Date"). Based on their
evaluation, our chief executive officer and chief financial officer
have concluded that as of the Evaluation Date, our disclosure
controls and procedures are effective to ensure that all material
information required to be filed in this quarterly report on Form
10QSB has been made known to them in a timely fashion.
Changes in Internal Controls
There have been no significant changes (including corrective actions
with regard to significant deficiencies or material weaknesses) in
our internal controls or in other factors that could significantly
affect these controls subsequent to the Evaluation Date set forth
above.
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 24, 2003
Dale Jarrett Driving Adventure, Inc.
By /s/ Timothy B. Shannon
------------------------
Timothy B. Shannon
President and Director
11
CERTIFICATIONS
I, Timothy B. Shannon, certify that:
1. I have reviewed this quarterly report on Form 10QSB of Dale
Jarrett Driving Adventure, Inc.
2. Based on my knowledge, the quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present, in all material respects, the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
12
(6) The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: February 24, 2003
/s/Timothy B. Shannon
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Timothy B. Shannon
Chief Executive Officer
13
CERTIFICATIONS
I, Brian C. Rosenbloom, certify that:
1. I have reviewed this quarterly report on Form 10QSB of Dale
Jarrett Driving Adventure, Inc.
2. Based on my knowledge, the quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present, in all material respects, the financial condition, results
of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material
weaknesses in internal controls; and
14
(b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: February 24, 2003
/s/Brian C. Rosenbloom
- --------------------------
Brian C. Rosenbloom
Chief Financial Officer