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 December 31, 1998
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)
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 January 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
Page
Balance Sheet................................................................F-2
Statement of Operations......................................................F-3
Statement of Changes in Stockholders' Equity................................ F-4
Statement of Cash Flows......................................................F-5
Notes to Financial Statements................................................F-6
F-1
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Balance Sheet
<TABLE>
<S> <C> <C>
December 31, September 30,
ASSETS 1998 1998
(Unaudited)
------------------- ------------------
CURRENT ASSETS
Cash $ 364 $ 379
Note receivable - shareholder 10,493 10,263
------------------- ------------------
Total current assets 10,857 10,642
------------------- ------------------
Total Assets $ 10,857 $ 10,642
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 4,500 $ 4,500
------------------- ------------------
Total current liabilities 4,500 4,500
------------------- ------------------
Total Liabilities 4,500 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 (11,978) (12,193)
------------------- ------------------
Total Stockholders' Equity 6,357 6,142
------------------- ------------------
Total Liabilities and Stockholders' Equity $ 10,857 $ 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>
<S> <C> <C> <C>
Cumulative
For the three months ended October 20, 1997
through December
31, 1998
-------------------------------------- -------------------
December 31, December 31,
1998 1997
------------------- ------------------ -------------------
Revenues $ 0 $ 0 $ 0
------------------- ------------------ -------------------
General and administrative expenses 15 0 836
Consultant expenses - related party 0 0 2,000
Professional fees - related party 0 160 5,000
Professional fees - other 0 0 4,635
------------------- ------------------ -------------------
Total expenses 15 160 12,471
------------------- ------------------ -------------------
Loss from operations (15) (160) (12,471)
Other income (expense)
Interest income - related party 230 0 493
------------------- ------------------ -------------------
Net income (loss) $ 215 $ (160) $ (11,978)
=================== ================== ===================
Basic net income (loss) per weighted average $ 0.001 (0.001) (0.006)
share
=================== ================== ===================
Weighted average number of shares 2,039,224 1,650,500 2,039,224
=================== ================== ===================
</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>
<S> <C> <C> <C> <C> <C>
Deficit
Accum.
Additional During the Total
Number of Common Paid-in Dev. Stkholders'
Shares Stock Capital Stage Equity
------------- ----------- ------------ ------------ -------------
BEGINNING BALANCE,
From October 20, 1997 (Inception) through September 30, 1998:
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 three months ended 12/31/98 (Unaudited) :
Net income 0 0 0 215 215
------------- ----------- ------------ ------------ -------------
BALANCE, December 31, 1998 (Unaudited) 2,296,500 $ 230 $ 18,105 $ (11,978)$ 6,357
============= =========== ============ ============ =============
</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>
<S> <C> <C> <C>
From October 20,
1997 (Inception)
For the three months ended through
December 31,
1998
------------------------------------- ------------------
December 31, December 31,
1998 1997
------------------- ----------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 215 $ (160)$ (11,978)
Adjustments to reconcile net loss to net cash used for operating
activities:
Interest accrued on note receivable - related party (230) 0 (493)
Stock issued for services 0 160 2,635
Increase in accrued liabilities 0 0 4,500
------------------- ----------------- ------------------
Net cash used for operating activities (15) 0 (5,336)
------------------- ----------------- ------------------
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 in cash (15) 0 364
CASH, beginning of period 379 0 0
------------------- ----------------- ------------------
CASH, end of period $ 364 $ 0 $ 364
=================== ================= ==================
</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
(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 service 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.
The Company is in the development stage and has not yet acquired the
necessary operating assets, nor has it begun any part of its proposed
business. While the Company is negotiating with prospective personnel
and potential customer distribution channels, 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.
(2) Summary of Significant Accounting Principles 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 three months ended December 31, 1998
and 1997 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, following Statement of Position (SOP)
98-5. This SOP sets forth the generally accepted accounting principles
for costs of start-up activities of development stage entities.
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 exchanges
shares of common stock, in lieu of cash, for the fair market value of
services rendered. The cost of the services has been charged to
operations.
(3) Note Receivable-shareholder A note in the amount of $10,000 was issued
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
December 31, 1998 and 1997 is $493 and $0 respectively. The Company
expects repayment of the note and accrued interest in February 1999.
F-6
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
(4) 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 December 31, 1998. On October
21, 1997, the Company issued 1,601,000 shares to its President for the
fair market value of services rendered at $160. 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. On April 30, 1998,
the Company issued 49,500 shares, to its Executive Vice president for
the fair market value of services rendered at $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
December 31, 1998.
(5) 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 $11,979
expiring at December 31, 2013.
The amount recorded as deferred tax assets as of December 31, 1998 is
$2,357, 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.
(6) Related Parties During the initial formation of the Company, its legal
counsel was appointed President, Secretary and Treasurer of the
Company. The authorized duties performed were the execution of all
documents necessary for the Company to transact such business. The new
Board of Directors was formally appointed at the initial meeting of the
Company's shareholders. Also, at the shareholders' meeting, legal
counsel resigned effective immediately as any officer of the Company,
and was subsequently authorized by the Board to act in certain
management capacities. Legal counsel owns a 5% interest of 114,500
shares of common stock in the Company. The elected Secretary and
Treasurer of the Company is "of counsel" to the Company's legal
counsel.
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.
As described in Note (3), the Company issued a note to one of its
shareholders in the amount of $10,000.
F-7
<PAGE>
JS Business Works, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
(6) Related Parties (continued)
From October 20,
1997 (inception)
through December
31, 1998
--------------------
Professional fees (legal expenses) - related party $ 5,000
====================
Consultant expenses - related party $ 2,000
====================
Office expenses - related party $ 100
====================
Note receivable and accrued interest - related party $ 10,493
====================
(7) Going Concern As shown in the accompanying financial statements, the
Company incurred a net loss of $11,979 from October 20, 1997
(Inception) through December 31, 1998. The ability of the Company to
continue as a going concern is dependent upon increasing 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
financing to allow it to begin its planned operations.
F-8
<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 December 31, 1998, the Company had no
income from operations and operating expenses aggregating $12,471. 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 nine (9)
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 twelve (12) months, commencing
approximately three (3) months form the date hereof, in the event that the
Company is unable to generate any revenue from operations and commencing six (6)
to nine (9) months from the date hereof, if only a minimal level of revenue is
generated in accordance with management's expectations. Ms. Garrett, at least
initially, will be 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.
At least initially, the Company intends to operate 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 December 31, 1998, the Company had assets totaling $10,857 and
liabilities of $4,500 attributable to accrued accounting fees. 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
<PAGE>
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. (See Part III, Item 11. "Security Ownership of Certain
Beneficial Owners and Management" and Part III, Item 12. "Certain Relationships
and Related Transactions.")
The Company has no potential capital resources from any outside sources
at the current time. In its initial phase, the Company will operate out of the
facility provided by Mr. Adams. Ms. Garrett will begin by finding client
employers and client employees for the Company and instructing Mr. Adams in the
operation of a temporary industrial staffing agency. To attract client
employers, Ms. Garrett and Mr. Adams will 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. 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 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. 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
nine (9) months.
<PAGE>
Net Operating Losses
The Company has net operating loss carryforwards of $12,193 which
expire in the years 2018 through 2019. The company has a $2,357 deferred tax
asset resulting from the loss carryforwards, for whiich it has established a
100% valuation allowance. Until the Company's current operations begin to
produce earnings, it unclear as to the ability of the Company to 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 1Q-KSB 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,
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
<PAGE>
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 December 31, 1998,
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 October 20, 1997 (1)
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 December 31,
1998.
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: February 15, 1999 By: /s/ Charles Adams
---------------------------------
Charles Adams, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
Date Signature Title
---- --------- -----
February 15, 1999 By: /s/ Charles Adams President and Director
-----------------------
Charles Adams
February 15, 1999 By: /s/ Mercedes Travis Secretary and Director
-----------------------
Mercedes Travis
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF JS BUSINESS WORKS, INC. FOR DECEMBER 31, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 1061822
<NAME> JS Business Works, Inc.
<MULTIPLIER> 1
<CURRENCY> US Dollar
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 364
<SECURITIES> 10,493
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,857
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,857
<CURRENT-LIABILITIES> 4,500
<BONDS> 0
0
0
<COMMON> 230
<OTHER-SE> 6,127
<TOTAL-LIABILITY-AND-EQUITY> 10,857
<SALES> 0
<TOTAL-REVENUES> 230
<CGS> 0
<TOTAL-COSTS> 15
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 215
<INCOME-TAX> 0
<INCOME-CONTINUING> 215
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 215
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
