FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to _______________________
Commission File Number 000-49600
JDLPHOTOS.COM, INC.
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(Exact name of registrant as specified in its charter)
Colorado 84-1536670
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1127 Sumac Street, Longmont, CO 80132
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(Address of principal executive office) (Zip Code)
(303) 678-9089
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has 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
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The number of shares outstanding of each of Issuer's classes of common equity as
of August 14, 2002.
Common Stock, par value $.0001 6,510,000
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Title of Class Number of Shares
Transitional Small Business Disclosure Format yes no X
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JDLPHOTOS.COM, INC.
Index
Part I
Page
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Item 1. Financial Statements
Condensed Balance Sheet as of June 30, 2002 (unaudited)...... 3
Condensed Statements of Operations for the Three
and Six Months Ended June 30, 2002 and 2001 (unaudited)...... 4
Condensed Statements of Cash Flows for the Six Months
Ended June 30, 2002 and 2001 (unaudited)..................... 5
Notes to Condensed Financial Statements (unaudited).......... 6
Item 2. Management's Discussion and Analysis or Plan of Operation.... 7
Part II
Items 1-6. Other Information............................................ 8
Signatures................................................... 9
Exhibits..................................................... 10
2
JDLPHOTOS.COM, INC.
CONDENSED BALANCE SHEET
(Unaudited)
June 30, 2002
Assets
Current assets:
Cash.................................................. $ 31,853
Merchandise inventories, at cost...................... 17,886
Prepaid expenses...................................... 1,005
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Total current assets............................ 50,744
Property and equipment, net............................... 5,944
Intangible assets......................................... 1,599
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$ 58,287
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable...................................... $ 12,085
Accrued liabilities................................... 2,085
Indebtedness to related party (Note B)................ 7,783
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Total current liabilities....................... 21,953
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Shareholders' equity:
Preferred stock....................................... -
Common stock.......................................... 651
Additional paid-in capital............................ 138,028
Retained loss......................................... (102,345)
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Total shareholders' equity...................... 36,334
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$ 58,287
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See accompanying notes to condensed financial statements.
3
JDLPHOTOS.COM, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------ -----------------------------------
2002 2001 2002 2001
---------------- ---------------- ---------------- ----------------
Revenues...................................... $ 37,344 $ 39,423 $ 50,141 $ 49,465
---------------- ---------------- ---------------- ----------------
Costs and expenses:
Cost of revenues.......................... 11,607 10,726 15,899 14,552
Selling................................... 15,629 9,978 24,691 13,975
General and administrative................ 37,852 18,306 61,183 35,605
---------------- ---------------- ---------------- ----------------
Total costs and expenses.......... 65,088 39,010 101,773 64,132
---------------- ---------------- ---------------- ----------------
Operating loss.................... (27,744) 413 (51,632) (14,667)
Other income (expense):
Interest expense.......................... (180) (338) (320) (567)
Interest income........................... 88 - 266 -
Other income.............................. - - 124 -
---------------- ---------------- ---------------- ----------------
Loss before income taxes.......... (27,836) 75 (51,562) (15,234)
Provision for income taxes.................... - - - -
---------------- ---------------- ---------------- ----------------
Net loss.......................... $ (27,836) $ 75 $ (51,562) $ (15,234)
================ ================ ================ ================
Weighted average loss per share:
Basic and diluted...................... $ (0.00) $ 0.00 $ (0.01) $ (0.00)
================ ================ ================ ================
Weighted average number of shares of
common stock outstanding............ 6,510,000 6,050,000 6,510,000 6,050,000
================ ================ ================ ================
See accompanying notes to condensed financial statements.
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JDLPHOTOS.COM, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
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2002 2001
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Cash flows from operating activities:
Net cash provided by (used in) operating activities $ (46,178) $ 10,536
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Cash flows from investing activities:
Capital expenditures...................................... (809) (2,601)
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Net cash (used in) investing activities (809) (2,601)
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Cash flows from financing activities:
Proceeds from issuance of notes payable................... - 2,500
Offering costs............................................ - (520)
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Net cash provided by financing activities - 1,980
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Net change in cash (46,987) 9,915
Cash at beginning of period................................... 78,840 2,859
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Cash at end of period......................................... $ 31,853 $ 12,774
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest............................................... $ 320 $ -
================ ================
Income taxes........................................... $ - $ -
================ ================
See accompanying notes to condensed financial statements.
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JDLPHOTOS.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note A: Basis of presentation
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The interim financial statements presented herein have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The interim
financial statements should be read in conjunction with the Company's annual
financial statements for the year ended December 31, 2001, notes and accounting
policies thereto included in the Company's Annual Report on Form 10SB as filed
with the SEC.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Interim financial data presented herein are unaudited.
Note B: Related Party
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The Company started renting space from the President in April 2001 and paid 35
percent of the President's utilities expense and property taxes. These expenses
totaled $2,669 and $1,172, respectively, for the six months ended June 30, 2002
and 2001.
The President of the Company pays certain expenses on behalf of the Company from
time to time. During the six months ended June 30, 2002, the President paid
$1,474 in expenses on behalf of the Company. At June 30, 2002, the balance owed
by the Company to its President totaled $7,783.
Note C: Income Tax
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The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred
net operating losses during the six months ended June 30, 2002 resulting in a
deferred tax asset, which was fully allowed for; therefore, the net benefit and
expense resulted in $-0- income taxes.
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Item 2. Management's Discussion and Analysis or Plan of Operations.
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General
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The following discussion and analysis covers material changes in the financial
condition of JDLPhotos.com, Inc. ("Company" or "us") since December 31, 2001 and
material changes in our results of operations for the six months ended June 30,
2002, as compared to the same period in 2001. This discussion and analysis
should be read in conjunction with "Management's Discussion and Analysis or Plan
of Operation" included in the Company's Annual Report on Form 10-KSB for the
year ended December 31, 2001, including audited financial statements contained
therein, as filed with the Securities and Exchange Commission.
Special note regarding forward-looking statements
- -------------------------------------------------
This report contains forward-looking statements within the meaning of federal
securities laws. These statements plan for or anticipate the future.
Forward-looking statements include statements about our future business plans
and strategies, statements about our need for working capital, future revenues,
results of operations and most other statements that are not historical in
nature. In this Report, forward-looking statements are generally identified by
the words "intend", "plan", "believe", "expect", "estimate", and the like.
Investors are cautioned not to put undue reliance on forward-looking statements.
Except as otherwise required by applicable securities statues or regulations,
the Company disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise. Because forward-looking statements involve future risks and
uncertainties, these are factors that could cause actual results to differ
materially from those expressed or implied.
Results of Operations
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Six Months Ended June 30, 2002, Versus Six Months Ended June 30, 2001
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Our results of operations for the six months ended June 30, 2002 are not
indicative of the results of operations expected to be attained for the year
ending December 31, 2002 because of the seasonal nature of our business. We
conduct most of our business at summer art fairs and showings.
We incurred a net loss of $(51,562) ($.01 per share) for the six months ended
June 30, 2002, as compared to a net loss of $(15,234) ($.00 per share) for the
six months ended June 30, 2001. Our revenues increased approximately 1.4 percent
from $49,465 for the six months ended June 30, 2001, to $50,141 for the six
months ended June 30, 2002.
General and administrative expenses increased approximately 72 percent, from
$35,605 for the six months ended June 30, 2001, to $61,183 for the six months
ended June 30, 2002 primarily due to increased legal, accounting, and consulting
fees related to our required periodic SEC filings. Selling expenses increased
approximately 77 percent, from $13,975 to $24,691 for the six months ended June
30, 2001, and 2002, respectively, due to an increase in advertising and
marketing and increases in art show fees.
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Financial Condition and Liquidity
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Our financial condition is good. We have assets of $58,287 compared with
liabilities of $21,953 as of June 30, 2002.
Our cash decreased from by $46,987 (from $78,840 to $31,853) during the six
months ended June 30, 2002. The decrease is attributed to: operating losses for
the six months ended June 30, 2002, increased inventory purchases in
anticipation of the summer season, and prepaid booth rentals which normally
increase this time of year.
Our strategy in the near future is to continue to increase marketing on the
Internet and implement certain online marketing activities that we believe will
increase online sales in the near future. We believe that our future success
will be the result of increasing JDLphotos.com's market share by continuing to
increase online and other marketing activities and maintaining our continued
emphasis on premiere customer service and a strong product line.
Part II: Other Information
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Item 1: Legal Proceedings
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No report required.
Item 2: Changes in Securities
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No report required.
Item 3: Defaults Upon Senior Securities
No report required.
Item 4: Submission of Matters to a Vote of Security Holders
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No report required.
Item 5: Other information
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No report required.
Item 6: Exhibits and Reports on Form 8-K
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(a). Exhibits:
1. 99.1: Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
- CEO
2. 99.2: Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
- CFO
(b). We did not file any reports on Form 8-K during the period covered by
this report.
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SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three and six months ended June 30, 2002
have been included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JDLPHOTOS.COM, INC.
Date: August 14, 2002 By: /s/ James J. DeLutes
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James J. DeLutes, President
Secretary, Treasurer and
Director
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