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 September 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
incorporation or organization) Identification No.)
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 November 11, 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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This document is made up of 9 pages.
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JDLPHOTOS.COM, INC.
Index
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Part I
Page
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Item 1. Financial Statements
Condensed Balance Sheet as of September 30, 2002
(unaudited)........................................... 3
Condensed Statements of Operations for the Three and
Nine Months Ended September 30, 2002 and 2001
(unaudited)........................................... 4
Condensed Statements of Cash Flows for the Nine Months
Ended September 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)
September 30, 2002
Assets
------
Current assets:
Cash................................................... $ 23,412
Merchandise inventories, at cost....................... 17,051
Prepaid expenses....................................... 330
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Total current assets............................. 40,793
Property and equipment, net................................ 4,937
Intangible assets.......................................... 1,199
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$ 46,929
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Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable....................................... $ 3,019
Accrued liabilities.................................... 1,885
Indebtedness to related party (Note B)................. 8,615
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Total current liabilities........................ 13,519
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Shareholders' equity:
Preferred stock........................................ -
Common stock........................................... 651
Additional paid-in capital............................. 138,028
Retained loss.......................................... (105,269)
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Total shareholders' equity....................... 33,410
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$ 46,929
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See accompanying notes to condensed financial statements.
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JDLPHOTOS.COM, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------- -----------------------------------
2002 2001 2002 2001
---------------- ---------------- ---------------- ----------------
Revenues................................... $ 31,776 $ 39,422 $ 81,917 $ 88,887
---------------- ---------------- ---------------- ----------------
Costs and expenses:
Cost of revenues....................... 9,305 10,725 25,204 25,277
Selling................................ 9,024 9,978 33,715 23,953
General and administrative............. 16,414 18,306 77,597 53,911
Interest expense....................... - 337 320 904
Interest income........................ (43) - (309) -
Other income........................... - - (124) -
---------------- ---------------- ---------------- ----------------
Total costs and expenses....... 34,700 39,346 136,403 104,045
---------------- ---------------- ---------------- ----------------
Loss before income taxes....... (2,924) 76 (54,486) (15,158)
Provision for income taxes................. - - - -
---------------- ---------------- ---------------- ----------------
Net loss....................... $ (2,924) $ 76 $ (54,486) $ (15,158)
================ ================ ================ ================
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 STATEMENT OF CASHFLOWS
(Unaudited)
Nine Months Ended
September 30,
------------------------------------
2002 2001
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Cash flows from operating activities:
Net cash provided by (used in)operating activities $ (54,404) $ 20,263
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Cash flows from investing activities:
Capital expenditures........................................ (1,024) (2,601)
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Net cash provided by (used in) investing activities (1,024) (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 (55,428) 19,642
Cash at beginning of period..................................... 78,840 2,859
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Cash at end of period........................................... $ 23,412 $ 22,501
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Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest................................................. $ 320 $ -
================ ================
Income taxes............................................. $ - $ -
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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
---------------------
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 10-KSB 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 began
paying 35 percent of the President's utilities expense and property taxes. These
expenses totaled $3,943 and $2,853, respectively, for the nine months ended
September 30, 2002 and 2001.
The President of the Company pays certain expenses on behalf of the Company from
time to time. During the nine months ended September 30, 2002, the President
paid $2,306 in expenses on behalf of the Company. At September 30, 2002, the
balance owed by the Company to its President totaled $8,615.
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 nine months ended September 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 nine months ended
September 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-SB 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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Nine Months Ended September 30, 2002, Versus Nine Months Ended September 30,
- --------------------------------------------------------------------------------
2001
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Our results of operations for the nine months ended September 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 $(54,486) ($.01 per share) for the nine months ended
September 30, 2002, as compared to a net loss of $(15,158) ($.00 per share) for
the nine months ended September 30, 2001. Our revenues decreased approximately
7.8 percent from $88,887 for the nine months ended September 30, 2001, to
$81,917 for the nine months ended September 30, 2002 primarily due to a decrease
in the number of shows attended. Our gross margin dropped three percent from the
year earlier period (69% and 72% for the nine months ended September 30, 2002
and 2001, respectively).
General and administrative expenses increased approximately 42 percent, from
$53,911 for the nine months ended September 30, 2001, to $77,597 for the nine
months ended September 30, 2002 primarily due to increased legal, accounting,
and consulting fees related to our required periodic SEC filings. Selling
expenses increased approximately 41 percent, from $23,953 to $33,715 for the
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nine months ended September 30, 2001, and 2002, respectively, due to an increase
in advertising and marketing and increases in art show fees.
Financial Condition and Liquidity
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The source of our liquidity is from sales revenue. We have current assets of
$40,793 compared with current liabilities of $13,519 as of September 30, 2002.
Our cash decreased from by $55,428 (from $78,840 to $23,412) during the nine
months ended September 30, 2002. The decrease is attributed to operating losses
for the nine months ended September 30, 2002, and the payment of liabilities.
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
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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
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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 nine months ended September 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: November 11, 2002 By: /s/ James J. DeLutes
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James J. DeLutes, President
Secretary, Treasurer and Director
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