U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended March 31, 1999
Commission file no. 0-24551
JS Business Works, Inc.
--------------------------------------------
(Name of small business issuer in its charter)
Florida 65-0790758
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
219 Almeria
West Palm Beach, Florida 33405
- - --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (561) 804-9744
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange on
Title of each class which registered
None
- ----------------------------- -------------------------
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.0001 par value
-----------------------------------
(Title of class)
Copies of Communications Sent to:
Mercedes Travis, Esq.
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel: (561) 832-5696
Fax: (561) 659-5371
<PAGE>
Indicate by 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
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes X No
-- ---
As of March 31, 1999, there are 2,296,500 shares of voting stock of the
registrant issued and outstanding.
<PAGE>
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Balance Sheets.........................................................F-2
Statements of Operations...............................................F-3
Statements of Changes in Stockholders' Equity..........................F-4
Statements of Cash Flows...............................................F-5
Notes to Financial Statements..........................................F-6
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Balance Sheet
<TABLE>
<CAPTION>
March 31,
ASSETS 1999 September
(Unaudited) 30, 1998
------------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 292 $ 379
Note and accrued interest receivable - shareholder 10,712 10,263
------------- -----------
Total current assets 11,004 10,642
------------- -----------
Total Assets $ 11,004 $ 10,642
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 861 $ 4,500
Advance from shareholder 4,000 0
------------- -----------
Total current liabilities 4,861 4,500
------------- -----------
Total Liabilities 4,861 4,500
------------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value, authorized
10,000,000 shares, 0 issued and outstanding 0 0
Common stock, $0.0001 par value, authorized
50,000,000 shares, 2,296,500 issued and outstanding 230 230
Additional paid-in capital 18,105 18,105
Deficit accumulated during the development stage (12,192) (12,193)
------------- -----------
Total Stockholders' Equity 6,143 6,142
------------- -----------
Total Liabilities and Stockholders' Equity $ 11,004 $ 10,642
============= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-2
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Cumulative
For the six months ended October 20, 1997
through
March 31, 1999
------------------------------- ---------------
<S> <C> <C> <C>
March 31, 1999 March 31, 1998
--------------- --------------- ---------------
Revenues $ 0 $ 0 $ 0
--------------- --------------- ---------------
General and administrative expenses 448 0 1,169
Consultant and office expenses-related party 0 0 2,100
Professional fees - related party 0 160 2,635
Professional fees - other 0 0 7,000
--------------- --------------- ---------------
Total expenses 448 160 12,904
--------------- --------------- ---------------
Loss from operations (448) (160) (12,904)
Other income (expense)
Interest income - related party 449 0 712
--------------- --------------- ---------------
Net income (loss) $ 1 $ (160)$ (12,192)
=============== =============== ===============
Basic net income (loss) per weighted
average share $.0000 ( $.0001) (0.006)
=============== =============== ===============
Weighted average number of shares 2,296,500 1,601,000 2,083,735
=============== =============== ===============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-3
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Statement of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Deficit
Accum.
Additional During the Total
Number of Common Paid-in Dev. Stkholders'
Shares Stock Capital Stage Equity
<S> <C> <C> <C> <C> <C>
---------- --------- ---------- --------- -----------
BEGINNING BALANCE, October 20, 1997 (Inception) 0 $ 0 $ 0 $ 0 $ 0
October 1997 - services ($0.0001/sh) 1,601,000 160 0 0 160
April 1998 - cash ($0.01/sh) 302,500 30 2,995 0 3,025
April 1998 - cash ($0.05/sh) 343,500 35 17,140 0 17,175
April 1998 - services ($0.05/sh) 49,500 5 2,470 0 2,475
May 1998 - offering costs 0 0 (4,500) 0 (4,500)
Net loss 0 0 0 (12,193) (12,193)
---------- --------- ---------- --------- -----------
BALANCE, September 30, 1998 2,296,500 230 18,105 (12,193) 6,142
---------- --------- ---------- --------- -----------
For the six months ended March 31, 1999 (Unaudited) :
Net income 0 0 0 1 1
---------- --------- ---------- --------- -----------
BALANCE, March 31, 1999 (Unaudited) 2,296,500 $ 230 $ 18,105 $ (12,192)$ 6,143
========== ========= ========== ========= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements
F-4
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended From October 20,
1997 (Inception)
------------------------ through
March 31, 1999 March 31, 1999 March 31,1998
-------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM DEVELOPMENT ACTIVITIES:
Net income (loss) $ 1 $ (160) $ (12,192)
Adjustments to reconcile net income (loss) to
net cash used by development activities:
Stock issued for services 0 160 2,635
Changes in assets and liabilities
Increase in accrued interest on note
receivable - related party (449) 0 (712)
Increase (decrease) in accrued expenses (3,639) 0 861
Increase in advance from shareholder 4,000 0 4,000
------------- ------------- --------------
Net cash used by development activities (87) 0 (5,408)
------------- ------------- --------------
CASH FLOW FROM INVESTING ACTIVITIES :
Issuance of note receivable - related party 0 0 (10,000)
------------- ------------- --------------
Net cash used by investing activities 0 0 (10,000)
------------- ------------- --------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 0 0 15,700
------------- ------------- --------------
Net cash provided by financing activities 0 0 15,700
------------- ------------- --------------
Net increase (decrease) in cash (87) 0 292
CASH, beginning of period 379 0 0
------------- ------------- --------------
CASH, end of period $ 292 $ 0 $ 292
============= ============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements
F-5
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Information with respect to the periods ended
March 31, 1999 and 1998 is unaudited)
(1) The Company JS Business Works, Inc. is a Florida chartered development
stage corporation which conducts business from its headquarters in Palm
Beach, Florida. The Company was incorporated on October 20, 1997 and has
selected September 30 as its fiscal year end.
The Company has not yet engaged in its expected operations. The Company's
future operations include plans to become a full-service flexible staffing
provider to recruit, train and deploy temporary personnel to companies in a
wide range of industries. Current activities include raising additional
equity and negotiating with potential key personnel and facilities. There
is no assurance that any benefit will result from such activities. The
Company will not receive any operating revenues until the commencement of
operations, but will nevertheless continue to incur expenses until then.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
a) Use of estimates The financial statements have been prepared in
conformity with generally accepted accounting principles. In preparing the
financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as
of the date of the statements of financial condition and revenues and
expenses for the year then ended. Actual results may differ significantly
from those estimates.
The financial statements for the six months ended March 31, 1999 and 1998
include all adjustments which in the opinion of management are necessary
for fair presentation.
b) Start-Up costs Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of Position
(SOP) 98-5.
c) Net income (loss) per share Basic is computed by dividing the net income
(loss) by the weighted average number of common shares outstanding during
the period.
d) Compensation for services rendered with stock The Company issues shares
of common stock, in exchange for services rendered. The costs of the
services are valued according to generally accepted accounting principles
and have been charged to operations.
(2) Note Receivable-shareholder A note in the amount of $10,000 was advanced to
a shareholder of the Company. The note receivable bears interest at 9.0%
interest per annum and is due on demand. Accrued interest at March 31, 1999
is $712 and is presented in Note and accrued interest receivable-related
party. Interest income for the period ended March 31, 1999 is $449..
(3) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock. The Company had 2,296,500 shares of common
stock issued and outstanding at March 31, 1999. On October 21, 1997, the
Company issued 1,601,000 shares to its President for the value of services
rendered in connection with the organization of the Company. In April 1998,
the Company issued 646,000 shares of common stock under Regulation D
offerings in exchange for $20,200 in cash. The Company paid $4,500 of legal
expenses in connection with these offerings. Also in April 1998, the
Company issued 49,500 shares, to its Executive Vice president for value of
services rendered of $2,475. In addition, the Company has authorized
10,000,000 shares of $0.0001 par value preferred stock. The Company had
issued none of its shares of preferred stock at March 31, 1999.
F-6
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(4) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax and
financial reporting purposes. The Company had net operating loss
carry-forwards for income tax purposes of approximately $12,192 expiring at
March 31, 2019.
The amount recorded as deferred tax assets as of March 31, 1999 is $2,399,
which represents the amount of tax benefit of the loss carry-forward. The
Company has established a valuation allowance against this deferred tax
asset, as the Company has no history of profitable operations.
(5) Related Parties See Note (2) for disclosure of Note receivable - related
party.
During the period ended March 31, 1999, the Company was advanced funds from
the president and majority shareholder of the Company. Unpaid amounts were
$4,000 at March 31, 1999 and are presented in Advance from shareholder.
The Company had entered into an agreement to pay $100 per month to Adams,
Inc. to cover general office expenses. Adams, Inc. is a company controlled
by the President of the Company. After the first month, the President chose
to suspend this agreement until the Company is sufficiently capitalized.
During the initial formation of the Company, an officer and shareholder of
the Company received compensation of $2,000 in cash for consulting services
rendered. These amounts, totaling $2,100 are presented in Consulting and
office expenses - related party.
See Note (3) for issuance of stock for services rendered by related
parties. These amounts, totaling $2,635, were charged to Professional fees
- related party.
(6) Going Concern The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The Company's
financial position and operating results raise substantial doubt about the
Company's ability to continue as a going concern, as reflected by the net
loss of $ 12,192 accumulated from October 20, 1997 (Inception) through
March 31, 1999. The ability of the Company to continue as a going concern
is dependent upon commencing operations, developing sales and obtaining
additional capital and financing. The financial statements do not include
any adjustments that might be necessary if the Company is unable to
continue as a going concern. The Company is currently seeking additional
capital to allow it to begin its planned operations.
F-7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
Plan of Operations
Since its inception, the Company has conducted no business operations
except for organizational and capital raising activities. For the period from
inception (October 20, 1997) through March 31, 1999, the Company had no income
from operations and operating expenses aggregating $12,904. The Company proposes
to engage in the business of providing human resource services in the flexible
industrial staffing market.
Ms. Garrett, Executive Vice President of JSBW, agreed to develop the
flexible staffing business for the Company for the following, among other,
reasons: (i) because of her belief that a public company could exploit its
talents, services and business reputation to commercial advantage and (ii) to
observe directly whether the perceived advantages of a public company,
including, among others, greater ease in raising capital, liquidity of
securities holdings and availability of current public information, would
translate into greater profitability for a public, as compared to a
locally-owned employment service company.
If the Company is unable to generate sufficient revenue from operations to
implement its expansion plans, management intends to explore all available
alternatives for debt and/or equity financing, including but not limited to
private and public securities offerings. Depending upon the amount of revenue,
if any, generated by the Company, management anticipates that it will be able to
satisfy its cash requirements for the next approximately three (3) to six (6)
months without raising funds via debt and/or equity financing or from third
party funding sources. Accordingly, management expects that it will be necessary
for JSBW to raise additional funds in the next nine (9) months, commencing no
later than three (3) months form the date hereof, in the event that the Company
is unable to generate any revenue from operations and commencing three (3) to
six (6) months from the date hereof, if only a minimal level of revenue is
generated in accordance with management's expectations. Currently Ms. Garrett is
solely responsible for developing JSBW's flexible staffing business. However, at
such time, if ever, as sufficient operating capital becomes available,
management expects to employ additional staffing and marketing personnel. In
addition, the Company expects to continuously engage in market research in order
to monitor new market trends, seasonality factors and other critical information
deemed relevant to JSBW's business through the development of a sophisticated
computerized system.
The Company operates out of the home of Mr. Adams. Thus, it is not
anticipated that JSBW will lease or purchase office space or computer equipment
in the foreseeable future. JSBW may in the future establish its own facilities
and/or acquire computer equipment if the necessary capital becomes available;
however, the Company's financial condition does not permit management to
consider the acquisition of office space or equipment at this time.
Financial Condition, Capital Resources and Liquidity
At March 31, 1999, the Company had assets totaling $11,004 and liabilities
of $4,861 attributable to accrued accounting fees and advances from a
shareholder. Since the Company's inception, it has received $20,200 in cash
contributed as consideration for the issuance of shares of Common Stock. In May
1998, the Company paid a lump sum consulting fee in the amount of $1,000 to Mr.
Adams, executive officer and director of JSBW in consideration for certain
specialized services performed for the Company by him. These services included
the preparation of a business plan for the Company and the performance of
certain financial consulting services. In May 1998, the Company paid Mintmire &
Associates, a law firm of which Donald F. Mintmire, Esq. is the sole proprietor,
the sum of $5,000.00 in consideration for the performance of certain legal
services, including but not limited to passing upon the legality of the Common
Stock and certain other matters in connection with this Registration Statement
on Form 10-SB. Commencing May 1, 1998, the Company agreed to pay a fee in the
amount of $100.00 per month to Adams, Inc., a company owned by Mr. Adams in
consideration for certain administrative services to be performed and costs to
be incurred by said firm on behalf of JSBW. After an initial monthly payment,
Mr. Adams subsequently agreed to suspend such monthly fee until such time as the
Company was in a stronger financial position. In May 1998, the Company paid a
lump sum consulting fee in the amount of $1,000 to Ms. Garrett, Executive Vice
President of JSBW in consideration of certain specialized services performed and
to be performed for the Company by her through December 31, 1998. Mr. Adams and
Ms. Garrett own of record and beneficially 1,601,000 and 49,500 shares
respectively, representing approximately 69.71% and 2.16% respectively, of the
outstanding shares of the Company's Common Stock.
<PAGE>
The Company has no potential capital resources from any outside sources at
the current time. The Company operates out of the facility provided by Mr.
Adams. Ms. Garrett has begun to seek client employers and client employees for
the Company and has begun to instruct Mr. Adams in the operation of a temporary
industrial staffing agency. To attract client employers, Ms. Garrett and Mr.
Adams plan to visit potential clients in order to determine their overall needs.
In order to attract client employees which match the needs of the potential
client employers, the Company will place advertising in local area newspapers in
Palm Beach County. No such advertising has commenced as of the date hereof. In
the event the Company requires additional capital during this phase, Mr. Adams
has committed to fund the operation until such time as additional capital is
available. The Company believes that it will require at least an additional
three (3) to six (6) months in order to determine the market demand potential
and the availability of qualified employees.
The ability of the Company to continue as a going concern is dependent upon
increasing placements and obtaining additional capital and financing. The
Company believes that in order to be able to expand its initial operations, it
must rent offices in Palm Beach County, hire clerical staff and acquire through
purchase or lease equipment for client employee testing, scheduling and
accounting purposes. The Company believes that there is adequate and affordable
rental space available in Palm Beach County and sufficiently trained personnel
to provide such clerical services at affordable rates. Further, the Company
believes that the type of equipment necessary for the operation is readily
accessible at competitive rates.
To implement such plan, also during this initial phase, the Company intends
to initiate a self-directed private placement under Rule 506 in order to raise
an additional $100,000. Such placement has not commenced as of the date hereof.
In the event such placement is successful, the Company believes that it will
have sufficient operating capital to meet the initial expansion goals and
operating costs for a period of one (1) year. In the event the Company is not
successful in raising such funds, the Company believes that it will not be able
to continue operations past a period of three (3) to six (6) months.
Net Operating Losses
The Company has net operating loss carryforwards of $12,192 which expire in
the year 2019. The company has a $2,399 deferred tax asset resulting from the
loss carryforwards, for which it has established a 100% valuation allowance.
Until the Company's current operations begin to produce earnings, it is unclear
whether the Company can utilize such carryforwards.
Year 2000 Compliance
The Company is currently in the process of evaluating its information
technology for Year 2000 compliance. The Company does not expect that the cost
to modify its information technology infrastructure to be Year 2000 compliant
will be material to its financial condition or results of operations. The
Company does not anticipate any material disruption in its operations as a
result of any failure by the Company to be in compliance.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), demand
for temporary staff personnel and availability of qualified employers clients,
expansion and growth of the Company's business and operations, and other such
matters are forward-looking statements. These statements are based on certain
assumptions and analyses made by the Company in light of its experience and its
perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate in the
circumstances. However, whether actual results or developments will conform with
the Company's expectations and predictions is subject to a number of risks and
uncertainties, general economic market and business conditions; the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company; changes in laws or regulation; and other factors, most of which are
beyond the control of the Company. Consequently, all of the forward-looking
statements made in this Form 10-QSB are qualified by these cautionary statements
and there can be no assurance that the actual results or developments
anticipated by the Company will be realized or, even if substantially realized,
<PAGE>
that they will have the expected consequence to or effects on the Company or its
business or operations. The Company assumes no obligations to update any such
forward- looking statements.
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending March 31, 1999, covered
by this report to a vote of the Company's shareholders, through the solicitation
of proxies or otherwise.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B,
as described in the following index of exhibits, are incorporated herein by
reference, as follows:
Exhibit No. Description
- -------------------------------------
3(i).1 Articles of Incorporation of JS Business Works, Inc. filed 1997
(1) 20,
3(i).2 Articles of Amendment to the Articles of Incorporation of JS
Business Works, Inc. filed May 4, 1998 (1)
3(ii).1 Bylaws of JS Business Works, Inc. (1)
27.1 * Financial Data Schedule
- -------------------
(1) Incorporated herein by reference to the Registration Statement on Form
10-SB of JS Business Works, Inc. (File No. 0-24551), filed with the U.S.
Securities and Exchange Commission.
* Filed herewith
(b) No Reports on Form 8-K were filed during the quarter ended March 31,
1999.
<PAGE>
SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JS BUSINESS WORKS, INC.
(Registrant)
Date: May 17, 1999 By: /s/ Charles Adams
-----------------------------------
Charles Adams, President and
Chief Financial Officer
[sign page JSBW 10Q 3.31.99]
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001061822
<NAME> JS BUSINESS WORKS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 292
<SECURITIES> 0
<RECEIVABLES> 10,712
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,004
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,004
<CURRENT-LIABILITIES> 4,861
<BONDS> 0
0
0
<COMMON> 230
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,004
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 448
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 449
<INCOME-PRETAX> 1
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
