Form 10-QSB
(As last amended in Release No. 33-7505, effective January 1,1999, 63 F.R. 9632)
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2000
-------------------------
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from........................to.......................
Commission file number.................................................
Jupiter Marine International Holdings, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as
specified in its charter)
Florida 65-0794113
- ----------------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3391 S. E. 14th Avenue, Port Everglades, FL 33316
- --------------------------------------------------------------------------------
(Address of principal executive offices)
954-523-8985
- --------------------------------------------------------------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(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 reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
<PAGE>
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 4,033,500
-------------------
Transitional Small Business Disclosure Format (check one):
Yes No X
----- -----
-2-
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC.
Part 1. Financial Information
- ------- ---------------------
Item 1. Financial Statements
Balance Sheet...............................................
Statement of Operations.....................................
Statement of Cash Flows.....................................
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.........................
Part II. Other Information
- -------- -----------------
-3-
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
JANUARY 31, 2000 AND JANUARY 31, 1999
<TABLE>
<CAPTION>
ASSETS
January 31, 2000 January 31, 1999
<S> <C> <C>
CURRENT ASSETS:
Cash $ 143,404 $ 2,325
Accounts receivable 106,591
Inventories 393,029 269,186
Prepaid expenses 20,856 10,258
----------- -----------
Total current assets 663,880 281,769
PROPERTY AND EQUIPMENT, at cost or allocated cost
Boat molds 927,134 910,096
Leasehold improvements 114,659 85,070
Machinery and equipment 102,664 39,700
Office equipment 9,985 7,000
----------- -----------
1,154,442 1,041,866
Less accumulated depreciation 404,076 195,202
----------- -----------
Total property and equipment 750,366 846,664
----------- -----------
OTHER ASSETS:
Deposits 28,800 --
----------- -----------
Total other assets 28,800 --
----------- -----------
Total assets $ 1,443,046 $ 1,128,433
=========== ===========
<PAGE>
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 286,283 $ 28,225
Payroll taxes payable -- 95,104
Accrued expenses 201,979 71,808
Customer deposits 127,000 206,789
Current portion of debt -- 50,000
Warranty reserve 53,178 49,084
Other liabilities -- 188,112
----------- -----------
Total Current Liabilities 668,440 689,122
Long Term Debt, less current portion 350,000 350,000
----------- -----------
Total liabilities 1,018,440 1,039,122
STOCKHOLDER'S EQUITY:
Capital stock, 5,000,000 shares of $.001
par value preferred stock authorized,
500,000 shares designated as 10% cumulative
Series A preferred stock, $.001 par value
($328,000 aggregate liguidation preference),
328,000 shares issued and outstanding 328 328
Capital stock, 205,000 shares designated as
as 10% cumulative Series B preferred stock,
$.001 par value ($205,000 aggregate
liquidation preference), 205,000 shares
issued and outstanding 205 205
Capital stock, 228,000 shares designated as
as 10% cumulative Series C preferred stock,
$.001 par value ($228,000 aggregate
liquidation preference), 228,000 shares
issued and outstanding 228 --
Capital stock, 50,000,000 shares of $.001
par value common stock authorized,
4,033,500 shares issued and outstanding 4,034 2,085
Additional paid-in capital 1,513,205 620,382
Accumulated deficit (1,093,394) (533,689)
----------- -----------
Total stockholder's equity 424,606 89,311
Total Liabilities and Stockholder's Equity $ 1,443,046 $ 1,128,433
=========== ===========
</TABLE>
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
January 31, 2000 January 31, 1999 January 31, 2000 January 31, 1999
<S> <C> <C> <C> <C>
NET SALES $ 1,073,451 $ -- $ 2,285,941 $ --
COST OF SALES 896,689 -- 1,944,759 --
----------- ----------- ----------- -----------
Gross income 176,762 -- 341,182 --
SELLING, GENERAL AND 261,199 115,249 484,837 230,498
----------- ----------- ----------- -----------
ADMINISTRATIVE EXPENSES
Loss from operations (84,437) (115,249) (143,655) (230,498)
OTHER EXPENSE:
Interest expense 8,750 5,385 17,913 10,770
----------- ----------- ----------- -----------
Total other expense 8,750 5,385 17,913 10,770
Loss before income taxes (93,187) (120,634) (161,568) (241,268)
PROVISION FOR INCOME TAXES -- -- -- --
Net Loss $ (93,187) $ (120,634) $ (161,568) $ (241,268)
=========== =========== =========== ===========
Earnings (loss) per common share
Basic $ (0.01) $ (0.06) $ (0.02) $ (0.11)
=========== =========== =========== ===========
Earnings (loss) per common share
Dilluted $ (0.01) $ (0.06) $ (0.01) $ (0.11)
=========== =========== =========== ===========
</TABLE>
<PAGE>
JUPITER MARINE INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND JANUARY 31, 1999
<TABLE>
<CAPTION>
Six months Six months
ended ended
January 31, 2000 January 31, 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(161,568) $(273,303)
adjustments to reconcile net loss to
net cash (used) provided by operating activities:
Provision for depreciation 104,880 99,522
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (104,855) 411
Decrease in inventories 28,162 61,624
(Increase) decrease in prepaid expenses (9,107) 5,127
(Increase) decrease in other assets (4,800) --
Increase (decrease) in accounts payable 139,802 8,655
Decrease (increase) in payroll tax payable (33,125) 48,005
Increase in accrued expenses 89,102 39,759
(Decrease) increase in customer deposits (121,386) 50,600
Increase in warranty reserve 2,625 --
Decrease in other liabilities -- (416,294)
--------- ---------
Net cash (used in) provided by
operating activities (70,270) (375,894)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for purchase of property and equipment (23,477) (85,070)
--------- ---------
Net cash used in investing activities (23,477) (85,070)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES: --
(Payment) proceeds in debt (50,000) 105,000
Proceeds from stock transactions 227,800 355,750
--------- ---------
Net cash provided from financing activities 177,800 460,750
--------- ---------
Net increase (decrease) in cash 84,053 (214)
CASH, Beginning of period 59,351 2,539
--------- ---------
CASH, End of period $ 143,404 $ 2,325
========= =========
</TABLE>
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
Management's discussion and analysis contains various "forward-looking
statements" within the meaning of the Securities and Exchange Act of 1934. Such
statements consist of any statement other than a recitation of historical fact
and can be identified by the use of forward-looking terminology such as "may,"
"expect," "anticipate," "estimate" or "continue" or use of negative or other
variations or comparable terminology.
The Company cautions that these statements are further qualified by
important factors that could cause actual results to differ materially from
those contained in the forward-looking statements, that these forward-looking
statements are necessarily speculative, and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward-looking statements.
Comparison of the results of operations for the quarter and six months
ended January 31, 2000 to the quarter and six months ended January 31, 1999
would not be meaningful as the Company did not commence normal business
operations until May of 1999. The time from August 1, 1998 until April 30, 1999
was devoted to reorganizing the Company, moving its manufacturing facility from
Jupiter, Florida to Port Everglades Florida, updating the new manufacturing
facility and producing boats that were an assumed liability of Jupiter 31, Inc.
Plan of Operations
Management's operating plan for the fiscal year ending July 31, 2000 is
to be at a slight loss. Sales are expected to be about $5,339,000 with a gross
margin of approximately $1,080,000 (20.2%). Selling, general and administrative
expenses are projected to be approximately $1,100,000.
Net Sales
The Company's net sales for the quarter ended January 31, 2000 (the
second quarter of the fiscal year ending July 31, 2000) were $1,073,451, which
is about equal to expectations. This second quarter includes the planned
vacation period from Christmas through New Year's. The winter boat show season
started off well for the Company.
-4-
<PAGE>
Management believes that the product changes introduced at this show were well
accepted by dealers and consumers. The Company has received positive reactions
from these changes. The Company has ten dealers with 13 selling locations.
Cost of Products Sold
The gross income for the quarter was $176,762 or 16.5% of net sales.
The percentage of net sales was better than last quarter but still somewhat
below expectations. Production efficiencies have improved. Overhead spending was
about equal to plan. The refinement of the manufacturing process has shown
results and will be continued during the remainder of the year. The "buying
group" which the Company joined previously has started to yield benefits in the
form of reduced product cost of some raw materials.
Selling, General and Administrative Expenses
Selling, general and administrative expenses of $261,199 for the
quarter ended January 31, 2000 were $145,950 higher than the similar quarter of
last year. For the six months ended January 31, 2000 expenses were $484,837
compared to $230,498 for the first six months of last fiscal year. As stated
previously, the Company devoted the majority fiscal year 1999 to reorganizing
the Company, consequently selling, general and administrative expenses were far
below fiscal year 2000, a period of normal business operations.
Equity Financing
During the quarter ended January 31, 2000 the Company commenced a
private placement of Series C Cumulative Preferred Stock at a price of $1.00 per
share. The maximum offering is 1,250,000 shares. As of January 31, 2000 the
Company sold 228,000 shares. The Company anticipates that by the end of the
offering period, March 31, 2000, approximately 650,000 shares will be sold. The
proceeds from this offering will be used for inventory, tooling and
demonstration models, repayment of indebtedness, sales, marketing, web-site
development and working capital.
Liquidity and Capital Resources
The Company, since its inception, has experienced severe negative cash
flows and has met its cash requirements by issuing, through private placements,
its common and preferred stock. Additional funds were generated by borrowings of
$350,000. The Company anticipates that funds received from these sources, cash
generated from operations and additional financings of $1,000,000 should be
sufficient to satisfy the Company's contemplated cash requirements for at least
the next 12 months. After such
-5-
<PAGE>
time, the Company anticipates that cash generated from operations will be
sufficient to fund its operations, although there can be no assurances that this
will be the case.
The Company does not anticipate any significant purchase of equipment
in the near future. The number and level of employees at January 31, 2000 should
be adequate to fulfill the production schedule.
The Company has never paid cash dividends on its Common Stock. The
Company presently intends to retain future earnings, if any, to finance the
expansion of its business and does not anticipate that any cash dividends will
be paid in the foreseeable future. The future dividend policy will depend on the
Company's earnings, capital requirements, expansion plans, financial condition
and other relevant factors.
-6-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
No legal proceedings terminated during the period covered by this
report
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Requlation S-B
The following exhibits are filed as part of this report:
Exhibits:
(27.1) Financial Data schedule
(b) Reports on Form 8-K
None.
-7-
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JUPITER MARINE INTERNATIONAL
HOLDINGS, INC.
Date: March 20, 2000 By:/s/ Carl Herndon
--------------------
Carl Herndon, Director, CEO and
President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 143,404
<SECURITIES> 0
<RECEIVABLES> 106,591
<ALLOWANCES> 0
<INVENTORY> 393,029
<CURRENT-ASSETS> 663,880
<PP&E> 1,154,442
<DEPRECIATION> 404,076
<TOTAL-ASSETS> 1,443,046
<CURRENT-LIABILITIES> 668,440
<BONDS> 350,000
761
0
<COMMON> 4,034
<OTHER-SE> 419,811
<TOTAL-LIABILITY-AND-EQUITY> 1,443,046
<SALES> 2,285,941
<TOTAL-REVENUES> 2,285,941
<CGS> 1,944,759
<TOTAL-COSTS> 1,944,759
<OTHER-EXPENSES> 484,837
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,913
<INCOME-PRETAX> (161,568)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.01)
</TABLE>
