SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A1
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended December 31, 1996
[ ] TRANSITION REPORT UNDER SECTION 10 OR 15(D) OF THE EXCHANGE
ACT
Commission File Number 0-28168
JJFN Services, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 11-3289981
(State or other jurisdiction (I.R.S. Identification number)
of incorporation or organization)
2500 Military Trail North, Suite 220, Boca Raton, Florida 33431
(address of principal executive offices)
(561)995-0043
(Issuer's Telephone Number, Including Area Code)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer(1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such report(s), and (2) has been
subject to such filing requirements for the past 90 days.
Yes __X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the last practicable date.
Outstanding Equity Securities at January 8, 1997
Class of Securities Outstanding Shares
Common Stock, $.001 par value, 16,659,990 shares
Preferred Stock, $.01 par value, 400,000 shares
Traditional Small Business Disclosure Format
Yes X No
JJFN SERVICES, INC.
Index to Quarterly Report on Form 10-Q
For the six months ended December 31, 1996
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page Number
Condensed Consolidated Balance Sheets as of 3
December 31, 1996 and June 30, 1996.
Condensed Consolidated Statement of Operations 4
for the three months and six months ended December 31, 1996,
and the three months and six months ended December 31, 1995.
Consolidated Statements of Cash Flows 5
for the six months ended December 31, 1996,
and the six months ended December 31, 1995
Notes to Condensed Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial 9-14
Condition and Results of Operations.
(2)
JJFN SERVICES, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31 June 30
ASSETS 1996 1996
----------- -----------
Model Homes on lease, at cost, net of $17,912,459 $11,245,534
accumulated depreciation of $239,577/$88,027
Real Estate under contract for development and sale 8,591,956 -
----------- -----------
26,504,415 11,245,534
----------- -----------
Other assets:
Cash 186,182 770,723
Marketable Securities - 1,462,500
Net assets realizable on divestiture 1,312,500 832,068
Deferred charges & other assets 551,771 416,563
----------- -----------
Total Other Assets 2,050,453 3,481,854
----------- -----------
Total Assets $28,554,868 $14,727,388
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages Payable $19,589,771 $ 6,477,271
Notes Payable 470,907 -
Accounts Payable & Accrued expenses 259,645 131,739
Unearned Rental Revenue 125,698 60,136
----------- -----------
Total Liabilities 20,446,021 6,669,146
----------- -----------
Stockholders' Equity
Convertible Preferred Stock, $.01 par value
25,000,000 shares authorized
400,000 shares issued and outstanding 4,000 4,000
Common Stock, $.001 par value
50,000,000 shares authorized
16,659,990/15,959,990 shares issued and outstanding 16,660 15,960
Additional paid-in capital 8,218,235 8,223,235
Accumulated Deficit (130,048) (184,953)
----------- -----------
Total Stockholders' Equity 8,108,847 8,058,242
----------- -----------
Total Liabilities and Stockholders' Equity $28,554,868 $14,727,388
=========== ===========
(3)
JJFN SERVICES, INC.
AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months and Six Months Ended December 31, 1996 and
Predecessor Three Months and Six Months Ended December 31, 1995
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
--------- --------- --------- ---------
Revenues:
Rental Income $ 407,936 $ - $ 788,885 $ -
Real Estate option fees 263,486 - 300,718 -
Model Home sales 1,018,890 - 1,283,169 -
Interest Income 3,488 - 12,577 -
--------- --------- --------- ---------
Total Revenues 1,693,800 - 2,385,349 -
--------- --------- --------- ---------
Costs and expenses:
Interest expense 392,184 13,967 600,989 24,655
Cost of model homes sold 997,864 - 1,256,477 -
Depreciation and amortization 149,178 - 280,821 -
Corporate 276,118 176,057 422,589 183,557
--------- --------- --------- ---------
Total Operating Expenses 1,815,344 190,024 2,560,876 208,212
--------- --------- --------- ---------
Income(Loss) from (121,544) (190,024) (175,527) (208,212)
continuing operations
--------- --------- --------- ---------
Loss from divested operations - - ( 54,444) -
Gain on disposal of divested 284,876 - 284,876 -
operations
--------- --------- --------- ---------
Income(loss) before income taxes 163,332 (190,024) 54,905 (208,212)
--------- --------- --------- ---------
Income taxes:
Current expense 41,000 - 14,000 -
Deferred tax benefit from (41,000) - (14,000) -
utilization of net operating
loss carryforward
--------- --------- --------- ---------
Income taxes - - - -
--------- --------- --------- ---------
Net income (loss) $ 163,332 $(190,024) $ 54,905 $(208,212)
Preferred stock distribution - - 5,000 -
--------- --------- --------- ---------
Income (loss) applicable to
common shareholders $ 163,332 $(190,024) $ 49,905 $(208,212)
========= ========= ========= =========
Earnings (Loss) per share data:
Continuing operations $ ( 0.01) $ (0.37) $ ( 0.01) $ (0.50)
Divested operations 0.02 - 0.01 -
--------- --------- --------- ---------
Net income (loss) $ 0.01 (0.37) $ 0.00 $ (0.50)
========= ========= ========= =========
Weighted average number 16,659,990 518,309 16,443,142 417,181
of shares
(4)
JJFN SERVICES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
Six Months Ended December 31, 1996 and
Predecessor Six Months Ended December 31, 1995
(Unaudited)
Six Months Six Months
Ended Ended
12/31/96 12/31/95
----------- ----------
Net Income (Loss) $ 54,905 $(208,212)
----------- ----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization expense 104,210 895
Depreciation expense 176,611 -
Rental revenue paid to related party - -
Gain on sale of model homes (26,692) -
Gain on disposal of divested operations (284,876) -
Stock issued for consulting services - 140,000
Changes in assets and liabilities:
Decrease in prepaid expenses and deposits 162,783 -
Increase in organization costs and deposits - (884)
Increase in accounts payable and accrued expenses 137,904 41,439
Increase in unearned rental revenue 65,562 -
Increase in net assets realizable on divestiture (195,556) -
----------- ----------
Total adjustments 139,946 181,450
----------- ----------
Net cash provided by operating activities 194,851 26,762
----------- ----------
Cash flows from investing activities
Purchase of model homes (3,581,825) -
Proceeds from sale of model homes 1,257,880 -
Proceeds from sale of marketable securities 239,250 -
Capital expenditures (3,883) -
----------- ----------
Net cash used in investing activities (2,088,578) -
----------- ----------
Cash flows from financing activities:
Proceeds from mortgages payable 1,390,220 -
Principal payments on mortgages payable (1,124,364) -
Deferred financing costs (38,541) (9,000)
Deferred offering costs (53,829) -
Proceeds from notes payable 1,150,000 350,000
Proceeds from stockholder loans - 12,500
Proceeds from issuance of common stock 700 -
Proceeds from issuance of stock options - 125,000
Preferred distribution (15,000) -
----------- ----------
Net cash provided by financing activities 1,309,186 478,500
----------- ----------
Net decrease in cash (584,541) 451,738
Cash at beginning of period 770,723 -
----------- ----------
Cash at end of period $186,182 $451,738
=========== ==========
Supplemental disclosure of cash flow information:
Interest paid - $505,894 $ 500
(5)
JJFN SERVICES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996
(unaudited)
Note 1. Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q and 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 only of normal recurring adjustments considered
necessary for a fair presentation, have been included. Operating results
for any quarter are not necessarily indicative of the results for any other
quarter or for the full year. These statements should be read in
conjunction with the financial statements of JJFN Services, Inc. and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996.
Note 2. History and business activity
The Company was incorporated on November 2, 1995 as J & J Financial Services,
Inc. and changed its name to JJFN Services, Inc. on February 9, 1996.
The Company is engaged in two lines of business.
1) The purchase and leaseback on a "triple net" basis of fully furnished
model homes complete with options and upgrades to major homebuilders
and real estate developers.
2) The contract acquisition, development and sale of real estate to the
same major homebuilders and real estate developers. The Company
purchases the real estate, simultaneously enters into a bonded
development contract with the builder, who then develops the real
estate. The builder purchases the finished lots from the Company
on a scheduled basis.
Through December 31, 1996, the Company had purchased 26 model homes from
subsidiaries of K. Hovnanian Enterprises, Inc. ("Hovnanian"), 48 model homes
from Engle Homes, Inc. ("Engle"), 22 homes from Bovis Homes, Inc., ("Bovis")
a subsidiary of P&O,a diversified world-wide company headquartered in London
England, 7 homes from Avatar Holdings, Inc. ("Avatar"), and 5 homes from The
Ryland Group, Inc. ("Ryland"). Through December 31, 1996, the Company has
sold 7 of the Hovnanian homes and 4 of the Engle homes.
Hovnanian, Engle, Bovis, Avatar and Ryland are publicly traded, nationally
known home builders and real estate developers. Concurrent therewith, the
Company entered into arrangements to lease back the units to the builders
under operating lease agreements.
(6)
JJFN Holdings, Inc., a wholly-owned subsidiary of the Company, is inactive.
Note 3. Divested Operations
Effective October 1, 1996, the Company disposed of its construction
subsidiary, Iron Eagle Contracting and Mechanical, Inc. The results of Iron
Eagle Contracting and Mechanical have been reported separately as a
divestiture in the consolidated statements of operations. The consolidated
balance sheet at June 30, 1996 has been reclassified to give effect to the
divested operations of Iron Eagle Contracting and Mechanical, Inc.
Assets and liabilities of Iron Eagle Contracting and Mechanical, Inc.
divested consist of the following:
September 30, 1996 June 30, 1996
------------------ -------------
Cash $ 56,641 $ 195,668
Contract Receivables 512,866 278,500
Costs and Earnings 89,110 41,000
Land and development costs 556,826 388,980
Prepaid Expenses 39,467 43,018
Construction Equipment 245,056 248,933
Office Furniture and Equipment 31,897 33,637
Intangible assets, net 299,571 312,487
------------ -------------
Total assets $ 1,831,434 $ 1,542,223
Liabilities (803,809) (710,155)
------------ -------------
Net assets of divested segment $ 1,027,624 $ 832,068
============ =============
Under the terms of the sale, the Company sold the Common Stock of the
divested segment to the management of IECM, for $1,312,500. The Company
received a promissory note for the $1,312,500 payable over a term of five
years. Interest on the note is at the prime rate (as announced from time to
time, by the Chase Manhattan Bank, N.A.) plus 100 basis points. Interest
will be paid monthly with the first payment due on August 10, 1997 and the
last payment due on January 10, 2002 when the principal amount of the note
is due in full. Interest from the closing date through July 10, 1997 will
be accrued and payable in six equal installments commencing August 10, 1997.
The agreements provide for payment acceleration under certain specified events.
A gain of $284,876 was recognized by the Company in the quarter ended
December 31, 1996, representing the excess of the sales price ($1,312,500)
over the net assets of the divested segment ($1,027,624) at October 1, 1996.
Note 4. Commitments & Contingencies
Model home purchase commitments
The Company's present commitments for capital expenditures include the
(7)
purchase of $3,300,000 in model homes from Engle Homes, and $3,100,000 in
model homes from The Fortress Group, with closings scheduled from January 1997
through March 1997. Verbal commitments have been made to purchase $9,000,000
in model homes from Laing Homes, and $3,100,000 from Continental Homes, with
closings anticipated between February 1997 and April 1997.
Model home sales contracts
The Company has one sale contract pending on a model home.
Land acquisition and contract development program
On September 18, 1996, the Company closed on a 70 acre tract of land located
in Western Boca Raton for a total purchase price of $8,591,956. The Company
entered into an agreement with a subsidiary of Engle Homes whereby the
Company agreed to pay Engle $4,500,000 to develop the property.
Simultaneously Engle entered into an Option to Purchase Contract to buy the
developed lots for $13,095,000. The Company receives a 12% per annum option
fee from Engle calculated on the actual amount of funds expended for the
purchase and development of the property. There is a $1,000,000 minimum
quarterly payment due for developed lots beginning no later than 180 days
from the contract purchase date. Engle Homes has deposited $1,719,000 in an
escrow account which may be applied to final payments due from Engle for
developed lots. In addition, Engle has posted a bond for the development
work.
Note 5. Marketable Securities
Marketable securities and related receivable consist of the following:
December 31, June 30,
1996 1996
------------- -----------
Marketable securities:
Antares Resources Corp.-Common Stock
585,000 shares at 2.50 - 1,462,500
------------- ------------
$ - $ 1,462,500
============= ============
During July 1996, the Company entered into an indemnity agreement with a
significant shareholder, which induced JJFN not to sell its shares in Antares.
The shareholder agreed that if JJFN, in the future, sells any shares at a
price less than the market value of the shares at their date of acquisition
($2.50 per share), the shareholder would contribute additional shares of
Antares common stock, or other property, having a fair market value equal to
such difference.
During September 1996, JJFN sold 485,000 shares of Antares, which were acquired
at a cost of $1,212,500, for $218,250, and in October 1996 sold 100,000 shares
of Antares, which were acquired at a cost of $250,000, for $21,000. Since the
shareholder agreed to indemnify JJFN if the marketable securities were sold at
less than cost, no loss was recorded on the sale. The deficiency of $1,223,250
was satisfied by offsetting $1,223,250 of loans due to shareholders.
The transaction is summarized as follows:
Original Cost $ 1,462,500
Sale Price (239,250)
------------
Deficency Satisfied by offsetting
loans due to shareholders 1,223,250
============
(8)
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
A summary of the operating results of JJFN Services, Inc. and subsidiary for
the three months ended December 31, 1996, and November 2, 1995 through
December 31, 1995 are presented below.
(*) Results from inception November 2, 1995 through December 31, 1995.
Three Months November 2 (*)
Ended Through
December 31 December 31
1996 % 1995 %
--------------------------------
Revenues:
Rental revenue $ 407,936 24% $ 33,116 100%
Real Estate option fees 263,486 16% - -
Model home sales 1,018,890 60% - -
Interest income 3,488 - - -
--------------------------------
Total revenues $1,693,800 100% 33,116 100%
Costs and expenses:
Interest expense 392,184 23% 10,625 32%
Cost of model homes sold 997,864 59% - -
Depreciation & Amortization 149,178 9% 7,192 22%
Corporate 276,118 16% 14,971 45%
--------------------------------
Total expenses 1,815,344 107% 32,788 99%
--------------------------------
Income(Loss) from continuing operations (121,544) -7% 328 1%
--------------------------------
Gain on disposal of divested operations 284,876 17% - -
--------------------------------
Net Income 163,332 10% 328 1%
================================
Financial data for the registrant's predecessor, JJFN Holdings, Inc., is not
presented for the period July 1 through November 1, 1995, which was prior to
the registrant's inception. The predecessor had no operations or revenues
during that period and expenses consisted only of interest expense and
administrative costs. Such expenses are not relevant to the operations of
JJFN Service, Inc. or to any comparison of its operating results.
Results of Operations:
Three Months Ended December 31, 1996 compared to December 31, 1995.
For the period from October 1, 1996 through December 31, 1996, the
Registrant had revenues of $1,693,800 of which lease rentals on model
homes totaled $407,936, revenues from the sale of model homes were
$1,018,890 and revenues from option fees were $263,486. Net income for the
period was $163,332 of which a loss of $121,544 was incurred in the
Company's continuing operations and a gain of $284,876 on the disposal
of the divested operation. Depreciation and amortization for the
quarter totaled $149,178 resulting in a positive cash flow from
continuing operations of $27,634.
The Company's revenues from rental income increased approximately
$375,000 (an 1100% increase) during the three months ended December
(9)
31, 1996 as compared to the three months ended December 31, 1995. This
increase is due to additional lease revenues generated from the
purchase of $18,300,000 in model homes in the twelve months ended
December 31, 1996.
Real Estate option fee revenues of $263,486 were generated from the
land acquisition and contract development program, for the quarter
ended December 31, 1996. The Company generated no option fee revenues
for the quarter ended December 31, 1995.
Corporate costs increased from $14,971 for the quarter ended December 31, 1995
to $276,118 for the quarter ended December 31, 1996. This increase was
attributable to the hiring of five new employees and the selling, general and
administrative costs associated with generating the increased revenue levels.
Corporate expenses as a percentage of total revenues decreased 29% from 45%
for the quarter ended December 31, 1995 to 16% for the quarter ended
December 31, 1996.
Six Months Ended December 31, 1996 compared to Predecessor Six Months Ended
December 31, 1995.
The Company's predecessor had no revenues for the six months ended December 31,
1995, accordingly, no revenue comparisons are presented.
Selling, general and administrative expenses increased $239,000 (or 130%)
during the six months ended December 31, 1996, as compared to the corresponding
fiscal 1995 period, primarily due to the predecessor's limited operations
for fiscal year 1995.
The Company had net income of $55,000 for the six months ended December 31,
1996, as compared to net loss of $208,000 for the Company's predecessor for
the six months ended December 31, 1995.
Model homes on lease net of accumulated depreciation have increased to
$17,912,459 at December 31, 1996 from $1,930,788 at December 31, 1995,
a 827% increase.
A breakdown of lease rental revenues by location is as follows:
Model Home Lease Revenues # Model Homes
State Cost at 12/31/96 10/1/96 to 12/31/96 Owned at 12/31/96
Florida $12,727,261 $ 245,190 73
Colorado $ 3,262,778 $ 97,886 15
Virginia $ 1,220,232 $ 36,607 5
North Carolina $ 737,288 $ 22,119 3
Texas $ 204,477 $ 6,134 1
----------- --------- --
Total $18,152,036 $ 407,936 97
=========== ========= ==
The average purchase price of model homes acquired by the Registrant was
approximately $187,000. For the quarter ended 12/31/96, the Registrant has
sold six model homes for total sales price of $ 1,018,890 less costs of sales
of $997,864 for a net gain of $21,026.
(10)
The following is an analysis of the Company's return on investments from the
sale-leaseback program and the land acquisition and contract development
program as of December 31, 1996.
Return on Investment - Sale-Leaseback Program
- ---------------------------------------------
Monthly Net Annual
Model Home Units Purchase Bank Equity Monthly Interest Monthly Return On
Location Purchased Price Financing Contribution Revenue Expense Income Invest.
- -------- --------- ----- --------- ------------ ------- ------- ------ ------
Florida 73 12727260 8981350 3745910 127273 65888 61385 19.7%
Colorado 15 3262779 2395686 867093 32628 18467 14161 19.6%
Virginia 5 1220232 831935 388297 12202 6136 6067 18.7%
North Carolina 3 737288 505800 231488 7373 3794 3579 18.6%
Texas 1 204477 0 204477 2045 0 2045 12.0%
--- -------- -------- ------- ------ ----- ----- ----
Totals 97 18152036 12714771 5437265 181520 94285 87237 19.3%
=== ======== ======== ======= ====== ===== ===== ====
Return on Investment - Land Acquisition and Contract Development Program
- ------------------------------------------------------------------------
Monthly Net Annual
Land Purchase Bank Equity Monthly Interest Monthly Return On
Location Price Financing Contribution Revenue Expense Income Invest.
- -------- ----- --------- ------------ ------- ------- ------ ------
Florida 8591956 6875000 1716956 85920 52995 32925 23.0%
======= ======= ======= ===== ===== ===== ====
Liquidity and Capital Resources
The Registrant's principal business, leasing of model homes and land
acquisition and contract development, is a capital-intensive operation
requiring constant infusions of cash as the number and size of transactions in
which the Registrant is involved increases. To date, this business has been
financed by capital contributed and loans made by shareholders,
secured loans from banks, and an offshore private placement.
These capital contributions, loans and offering have been adequate to permit
the Registrant to carry on operations to date. However, in order to finance
the expansion of operations over the coming fiscal year, additional funds
must be raised through the issuance of debt or equity securities. To fill
this need, the Registrant anticipates completing a securities offering of
$5-15 million prior to the end of fiscal 1997. The net proceeds of this
offering, together with existing cash of approximately $186,000 will enable
the Company to finance its growing level of operations. In addition, the
Registrant has $3,600,000 available on a revolving line of credit from
Capital Bank of Miami, Florida.
(11)
The Company is currently negotiating the following to finance current as
well as future expansion:
* $10,000,000 credit facility with a Denver, Colorado bank.
* $25,000,000 syndicated credit facility.
* $30,000,000 private placement of Senior Notes with warrants.
* $125,000,000-$150,000,000 structured finance as well as a securitization
program.
* Convertible debt and/or convertible preferred stock private placements
with institutional investors.
The Company continually explores a multitude of debt and equity options.
The Registrant's present commitments for capital expenditures include the
purchase of $3,300,000 in model homes from Engle Homes, and $3,100,000 in
model homes from The Fortress Group, with closings scheduled from January 1997
through March 1997. Verbal commitments have been made to purchase $9,000,000
in model homes from Laing Homes, and $3,100,000 from Continental Homes, with
closings anticipated between February 1997 and April 1997.
The Registrant expects that it will be able to finance these transactions and
others it currently is negotiating through available cash from the sources
described above and from other secured bank loans. In addition, the
Registrant is exploring the possibility of selling, either publicly or
privately, securities backed by its model home inventory and land contract
and development contracts. There can be no assurance, however, that any of
the anticipated sources of funding will ultimately be available to the
Registrant or that other financing will be available on acceptable terms.
Cash Flows
Net cash provided in operating activities totaled $195,000, comprised of net
income of $55,000, plus a net change in other operating assets and liabilities
of $171,000, offset by $31,000 of net adjustments for non-cash items.
Net cash used in investing activities totaled $2,089,000, comprised of the
purchase of $3,582,000 in model homes and $4,000 in capital expenditures,
offset by $1,258,000 from the sale of model homes, and $239,000 from the sale
of marketable securities.
Net cash provided by financing activities totaled $1,309,000, comprised of
proceeds from mortgages payable of $1,390,000, proceeds from stockholder loans
of $1,150,000, and $1,000 from issuance of common stock, offset by principal
payments on mortgages payable of $1,124,000, deferred costs of $93,000, and
preferred stock distributions of $15,000.
Trends in Operations
The Registrant's operations are currently accelerating at a rapid rate. Such
growth has resulted from the ongoing acquisition of model homes under lease
and from the implementation of the Company's new land acquisition and
contract development program. Both programs have generated significant
interest from national real estate developers including Hovnanian, Engle,
Bovis, Pulte, MDC, Avatar, Ryland, and others. The Company's successful
implementation of these programs has led to increased credit facilities.
JJFN is currently negotiating new credit relationships with major financial
institutions (banks, insurance companies, public and private investors, and
financial subsidiaries of major industrial corporations).
For the quarter ended December 31, 1996, purchases of model homes exceeded
$5,700,000, increasing total model homes on lease at December 31, 1996 to
over $18,000,000. Monthly lease rental revenues increase to over
$180,000, starting in January 1997. In addition, the registrant intends to
continue purchasing model homes as quickly as transactions can be negotiated
with developers and financing obtained.
(12)
In September 1996, the Company purchased a 70 acre tract of land in Boca
Raton, Florida, which will be developed into 370 home sites. The land
is currently generating monthly option fee revenues in excess of $85,000.
Following completion of the development (approximately six months
following date of acquisition in September 1996), revenues to the
Registrant from option fees and sales of developed lots will be a minimum
of $1,250,000 per calendar quarter, until completion of the project.
The following table illustrates JJFN Services, Inc.'s growth in assets and
revenues since inception.
Asset & Revenue Growth By Quarter For Continuing Operations
% % %
12/31/95 3/31/96 Inc. 6/30/96 Inc. 9/30/96 Inc.
-------------------------------------------------------------
Total Assets 3,512,090 11,917,231 239% 13,895,320 17% 23,887,575 72%
-------------------------------------------------------------
Revenues (*) 33,116 127,211 284% 325,076 156% 432,935 33%
-------------------------------------------------------------
(*) Net of cost of model homes sold.
%
12/31/96 Inc.
------------------
Total Assets 29,778,118 24.7%
------------------
Revenues (*) 695,936 60.7%
------------------
(*) Net of cost of model homes sold.
Cumulative Asset & Revenue Growth From 12/31/95 For Continuing Operations
% % %
12/31/95 3/31/96 Inc. 6/30/96 Inc. 9/30/96 Inc.
-------------------------------------------------------------
Total Assets 3,512,090 11,917,231 239% 13,895,320 296% 23,887,575 580%
-------------------------------------------------------------
Revenues (*) 33,116 127,211 284% 325,076 882% 432,935 1207%
-------------------------------------------------------------
(*) Net of cost of model homes sold.
%
12/31/96 Inc.
---------------------
Total Assets 29,778,118 747.9%
---------------------
Revenues (*) 695,936 2001.5%
---------------------
(*) Net of cost of model homes sold.
(13)
Forward Looking Statements
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") concerning
the Company's operations, economic performance and financial conditions,
including, in particular, the likelihood of the Company's success in
developing and bringing to market the products which it currently has under
development. These statements are based upon a number of assumptions and
estimates which are inherently subject to significant uncertainties, and
contingencies, many of which are beyond the control of the Company and
reflect future business decisions which are subject to change. Some of
these assumptions inevitably will not materialize, and unanticipated events
will occur which will affect the Company's results. Consequently, actual
results will vary from the statements contained herein and such variance may
be, and is likely to be material. Prospective investors should not place
undue reliance on this information.
(14)
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 of the
undersigned thereunto duly authorized.
JJFN SERVICES, INC.
By: /s/John P. Kushay
John P. Kushay, Treasurer
Chief Financial Officer and
Chief Accounting Officer
(Duly Authorized Officer)
Date: January 9, 1997
(15)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 186,182
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 245,725
<PP&E> 26,743,992
<DEPRECIATION> 239,577
<TOTAL-ASSETS> 28,554,868
<CURRENT-LIABILITIES> 20,446,021
<BONDS> 0
0
4,000
<COMMON> 16,660
<OTHER-SE> 8,088,187
<TOTAL-LIABILITY-AND-EQUITY> 28,554,868
<SALES> 2,385,349
<TOTAL-REVENUES> 2,385,349
<CGS> 2,138,287
<TOTAL-COSTS> 2,138,287
<OTHER-EXPENSES> 422,589
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (175,527)
<INCOME-TAX> 0
<INCOME-CONTINUING> (175,527)
<DISCONTINUED> 230,432
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,905
<EPS-PRIMARY> (0)
<EPS-DILUTED> 0
</TABLE>
