<PAGE> 1
UNITED STATES 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 fiscal quarter ended: June 30, 2000
Commission file number: 000-27847
JACOBSON RESONANCE ENTERPRISES, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 65-0684400
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
JFK Medical Pavilion II
8200 Jog Road, Suite 100
Boynton Beach, Florida 33437
----------------------------------------
(Address of principal executive offices)
(561) 752-4141
---------------------------
(Issuer's telephone number)
9960 Central Park Boulevard, #302
BOCA RATON, FLORIDA 33428
-----------------------------------------------
(Former address of principal executive offices)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of August 10, 2000: 54,628,154 shares of common stock, $.001 par
value per share.
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
JACOBSON RESONANCE ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 810,994 $ 579,518
Receivables - Officer 50,000 --
Prepaid Expenses 20,756 31,317
----------- -----------
Total Current Assets 881,750 610,835
Property and Equipment, at Cost, (Net of Accumulated
Depreciation of $39,970 and $21,448, respectively) 160,257 116,685
Deposits 4,640 1,395
Receivables - Officer 200,000 --
Deferred Income Tax Asset, Net of Valuation Allowance of $ 1,665,000 and
$1,332,000, respectively) -- --
----------- -----------
Total Assets $ 1,246,647 $ 728,915
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 131,204 $ 148,154
----------- -----------
Total Current Liabilities 131,204 148,154
----------- -----------
STOCKHOLDERS' EQUITY
Preferred Stock $.001 Par Value, 5,000,000 Shares Authorized;
Issued and Outstanding, 30,000 and 45,000 shares, respectively 30 45
Common Stock, $.001 Par Value, 100,000,000 Shares Authorized;
Issued and Outstanding, 54,615,336 and 37,169,127 Shares, respectively 54,615 37,169
Additional Paid in Capital 7,360,372 5,806,107
Deficit Accumulated During the Development Stage (6,254,900) (5,217,886)
Treasury Stock Common (600,000 Shares at Cost) (600) (600)
Subscriptions Receivable (44,074) (44,074)
----------- -----------
Total Stockholders' Equity 1,115,443 580,761
----------- -----------
Total Liabilities and Stockholders' Equity $ 1,246,647 $ 728,915
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 3
JACOBSON RESONANCE ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended For the Period
June 30, June 30, from Inception
----------------------------- ----------------------------- to June 30,
2000 1999 2000 1999 2000
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
REVENUES $ 4,675 $ 9,905 $ 7,250 $ 16,581 $ 154,403
------------ ------------ ------------ ------------ ------------
COSTS AND EXPENSES:
General and Administrative 335,689 405,186 947,894 588,621 3,582,301
Research and Development 26,630 73,872 125,665 90,877 887,150
Financing costs -- 2,089,099 -- 2,089,099 2,094,508
------------ ------------ ------------ ------------ ------------
Total Operating Expenses 362,319 2,568,157 1,073,559 2,768,597 6,563,959
------------ ------------ ------------ ------------ ------------
Other Income (Expense)
Interest Income 21,951 5,785 29,295 11,686 76,075
Gain on Sales of Resonance Machines -- -- -- -- 78,581
------------ ------------ ------------ ------------ ------------
NET LOSS $ (335,693) $ (2,552,467) $ (1,037,014) $ (2,740,330) $ (6,254,900)
============ ============ ============ ============ ============
PER SHARE INFORMATION:
Net Loss Per Share:
Basic $ (0.01) $ (0.08) $ (0.02) $ (0.08)
============ ============ ============ ============
Diluted $ (0.01) $ (0.08) $ (0.02) $ (0.08)
============ ============ ============ ============
Shares Used to Compute Net Loss Per Share
Basic 46,731,058 33,395,793 42,352,977 32,556,757
============ ============ ============ ============
Diluted 46,731,058 33,395,793 42,352,977 32,556,757
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
JACOBSON RESONANCE ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from Inception to June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Accumu-
lated
Addi- During
Common Stock Preferred Stock tional Develop- Subscrip-
------------------- ---------------- Paid-in ment tion Treasury Stockholders'
Issued Amount Issued Amount Capital Stage Receivable Stock Equity
------ ------ ------ ------ ------- ----- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Founders
Stock at Par $.001 57,220,000 $57,220 -- $-- $ (57,220) $ -- $ -- $ -- $ --
Recapitalization -
June 4, 1996 4,905,000 4,905 -- -- (4,905) -- -- -- --
Issuance of Common
Stock at $.10 Per
Share 10,000,000 10,000 -- -- 990,000 -- (526,550) -- 473,450
Issuance of Common
Stock at $1.75 Per
Share 18,857 19 -- -- 32,981 -- -- -- 33,000
Purchase of Treasury
Stock at Cost -- -- -- -- -- -- -- (600) (600)
Conversion of Common
Stock to Preferred
Stock (45,000,000) (45,000) 45,000 45 44,955 -- -- -- --
Net Loss -- -- -- -- -- (292,325) -- -- (292,325)
----------- ------- ------ --- --------- -------- -------- ------ --------
Balance, December
31, 1996 27,143,857 27,144 45,000 45 1,005,811 (292,325) (526,550) (600) 213,525
Issuance of Common
Stock for Services
Rendered at Prices
Between $.15 and
$1.75 Per Share 40,114 40 -- -- 12,744 -- -- -- 12,784
Issuances of Common
Stock from Private
Placement at Prices
Between $.15 and
$.25 Per Share 760,000 760 -- -- 139,240 -- -- -- 140,000
Issuances of Common
Stock out of
Proceeds of
Subscription
Receivable -- -- -- -- -- -- 5,000 -- 5,000
Net Loss -- -- -- -- -- (315,319) -- -- (315,319)
---------- ------ ------ --- --------- -------- ------- ----- --------
Balance, December
31, 1997 27,943,971 27,944 45,000 45 1,157,795 (607,644) (521,550) (600) 55,990
Reacquisition of
Common Shares and
Collection of
Subscription
Receivable (3,000,000) (3,000) -- -- (450,000) -- 450,000 -- (3,000)
Cash Collection of
Subscription
Receivable -- -- -- -- -- -- 27,476 -- 27,476
Issuance of Common
Stock from Private
Placement at a Price
of $.15 per Share 4,675,850 4,676 -- -- 659,294 -- -- -- 663,970
Issuance of Common
Stock from Private
Placement at a Price
of $.35 per Share 2,017,999 2,018 -- -- 690,156 -- -- -- 692,174
Issuance of Common
Stock for Services
Rendered at Prices
between $.15 and
$.35 per Share 663,223 663 -- -- 176,415 -- -- -- 177,078
Fair Value of Options
Issued to Consultants -- -- -- -- 2,063 -- -- -- 2,063
Net Loss -- -- -- -- -- (952,276) -- -- (952,276)
---------- ------ ------ --- --------- ---------- ------- ---- -------
Balance December
31, 1998 32,301,043 32,301 45,000 $45 2,235,723 (1,559,920) (44,074) (600) 663,475
========== ====== ====== === ========= ========== ======= ==== =======
</TABLE>
4
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
JACOBSON RESONANCE ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Continued)
For the Period from Inception to June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Accumu-
lated
Addi- During
Common Stock Preferred Stock tional Develop- Subscrip-
------------------- ---------------- Paid-in ment tion Treasury Stockholders'
Issued Amount Issued Amount Capital Stage Receivable Stock Equity
------ ------ ------ ------ ------- ----- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance December
31, 1998 32,301,043 32,301 45,000 45 2,235,723 (1,559,920) (44,074) (600) 663,475
Issuance of Common
Stock for Services
Rendered at Prices
between $.18 and
$2.69 per Share 1,313,903 1,314 -- -- 420,375 -- -- -- 421,689
Issuance of Common
Stock for Repayment
of Debt 291,305 291 -- -- 60,883 -- -- -- 61,174
Issuance of Common
Stock for Exercise
of Warrants 900,000 900 -- -- 1,754,100 -- -- -- 1,755,000
Sales of Shares
at $.20 per
Share 500,000 500 -- -- 99,500 -- -- -- 100,000
Beneficial Conversion
Feature on
Convertible
Debentures -- -- -- -- 333,332 -- -- -- - 333,332
Issuance of Common
Stock for
Conversion of
Debentures 1,862,876 1,863 -- -- 902,194 -- -- -- 904,057
Net Loss -- -- -- -- -- (3,657,966) -- -- (3,657,966)
---------- ------- ------ --- ---------- ----------- -------- ----- -----------
Balance, December
31, 1999 37,169,127 37,169 45,000 45 5,806,107 (5,217,886) (44,074) (600) 580,761
Issuance of Common
Stock for Services
Rendedered at Prices
between $.35 and
$1.52 per Share 335,342 335 -- -- 367,665 -- -- -- 368,000
Sales of Shares a
$.30 to $.75 per
Share 2,010,867 2,011 -- -- 1,111,609 -- -- -- 1,113,620
Fair Value of
Options Issued
to Consultants -- -- -- -- 55,301 -- -- -- 55,301
Issuance of Common
Stock for Exercise
of Options 100,000 100 -- -- 34,675 -- -- -- 34,775
Issuance of Common
Stock Upon
Conversion of
Preferred Stock 15,000,000 15,000 (15,000) (15) (14,985) -- -- -- --
Net Loss -- -- -- -- -- (1,037,014) -- -- (1,037,014)
---------- ------- ------ --- ---------- ----------- -------- ----- -----------
Balance, June
30, 2000 54,615,336 $54,615 30,000 $30 $7,360,372 $(6,254,900) $(44,074) $(600) $ 1,115,443
========== ======= ====== === ========== =========== ======== ===== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
JACOBSON RESONANCE ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended For the Period
June 30, from Inception
----------------------------- to June 30,
2000 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(1,037,014) $(2,740,330) $(6,254,900)
Adjustments to Reconcile Net Loss to Net Cash Flows
Used in Operating Activities:
Depreciation 18,522 2,583 39,970
Amortization of Deferred Debt Costs -- 1,810 7,742
Write off of Licensing Costs 126,582
Fair Value of Common Stock Issued for Services Rendered 368,000 179,297 979,769
Fair Value of Common Stock Issued for Interest Expense -- -- 6,781
Stock Issued for Conversion of Warrants Attributed to Interest -- 1,753,200 1,754,100
Beneficial Conversion Feature of Debentures -- 333,332 333,332
Fair Value of Options Issued 55,301 -- 57,364
Changes is Operating Assets and Liabilities:
Prepaid Expenses 10,561 3,123 (20,756)
Deposits (3,245) -- (4,640)
Accounts Payable (16,950) (32,029) 131,204
----------- ----------- -----------
Net Cash Flows Used in Operating Activities (604,825) (499,014) (2,843,452)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets (62,094) (4,000) (200,227)
Loans made to Shareholder and Employee (250,000) (250,000)
Patent Costs -- (5,010) (126,582)
----------- ----------- -----------
Net Cash Flows Used in Investing Activities (312,094) (9,010) (576,809)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury Stock -- -- (600)
Proceeds from Note Payable -- -- 60,000
Proceeds From Issuance of Debentures -- 890,490 890,490
Proceeds From Exercise of Warrants -- 900 900
Proceeds from Issuance of Common Stock
from Subscriptions Receivable -- -- 653,976
Proceeds From Exercise of Options 34,775 -- 34,775
Proceeds from Issuance of Common Stock 1,113,620 -- 2,591,714
----------- ----------- -----------
Net Cash Flows Provided by Financing Activities 1,148,395 891,390 4,231,255
----------- ----------- -----------
Net Increase in Cash and Cash Equivalents 231,476 383,366 810,994
Cash and Cash Equivalents - Beginning of Period 579,518 642,680 --
----------- ----------- -----------
Cash and Cash Equivalents - End of Period $ 810,994 $ 1,026,046 $ 810,994
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Income Taxes $ -- $ -- $ --
=========== =========== ===========
Interest $ -- $ -- $ --
=========== =========== ===========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of Common Stock for Repayment of Debt $ -- $ -- $ 60,000
=========== =========== ===========
Subscriptions Receivable for Issuance of Common Stock $ -- $ -- $ 698,050
=========== =========== ===========
Conversion of debentures into common stock $ -- $ -- $ 1,000,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
JACOBSON RESONANCE ENTERPRISES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(UNAUDITED)
Note 1 - BASIS OF PRESENTATION
The accompanying financial statements for the interim period are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the periods presented. These
financial statements should be read in conjunction with the financial statements
and notes thereto, together with Management's Discussion and Analysis of
Financial Condition and Results of Operations, contained in the Annual Report on
Form 10-KSB for the year ended December 31, 1999, of Jacobson Resonance
Enterprises, Inc. (the "Company" ) as filed with the Securities and Exchange
Commission. The results of operations for the three and six months ended June
30, 2000, are not necessarily indicative of the results for the full fiscal year
ending December 31, 2000.
Note 2 - STOCKHOLDERS' EQUITY
In December 1999, the Company entered into an agreement to sell 5,000,000
restricted shares of its common stock to an investor at the price of $.20 per
share. Payments for such shares began in 1999 and will continue to be made to
the Company at various times in 2000. As of December 31, 1999, this investor had
purchased 500,000 shares of common stock for $100,000. In addition, the Company
granted this investor an option to purchase 2,222,222 shares of its common stock
at a price of $.45 per share. This option requires the investor to advise the
Company of his intent to exercise the option by January 31, 2001, and exercise
and execute the option on or before June 30, 2001 according to a defined
schedule. During the six months ended June 30, 2000, the investor purchased
300,000 shares for an aggregate of $60,000.
In addition to the foregoing, the Company sold 54,750 shares of common stock for
an aggregate of $16,295 on January 21, 2000; 375,000 shares of common stock for
an aggregate of $212,500 on February 16, 2000; 307,693 shares of common stock
and a warrant to purchase an additional 307,693 shares of common stock at an
exercise price of $.85 per share for an aggregate of $200,000 on April 7, 2000;
664,193 shares of common stock and a warrant to purchase an additional 664,193
shares of common stock at an exercise price of $.90 per share for an aggregate
of $431,725 on April 10, 2000, and 269,231 shares of common stock and a warrant
to purchase an additional 269,231 shares of common stock at an exercise price of
$.90 per share for an aggregate of $175,000 on April 11, 2000.
7
<PAGE> 8
Note 2 - STOCKHOLDERS' EQUITY (CONTINUED)
Furthermore, on February 14, 16 and 22, 2000, respectively, the Company issued
22,500 shares, 200,000 shares and 700 shares, respectively, of common stock. The
Company issued these shares to employees and consultants for services. The
Company has recorded a charge to operations for the fair value of these shares
on the dates of their issuances, which amounted to $368,000.
The Company also issued options to purchase 599,000 shares of common stock to
employees and consultants on April 4, 2000. These options are exercisable at
$1.28 per share. Of the 599,000 options issued, 99,000 have been granted to
non-employees and have been valued using the Black-Scholes option pricing model
which has resulted in a charge to operations of approximately $55,000.
Additionally, the Company issued 40,000 shares of common stock for an aggregate
of $16,000 on February 16, 2000, and 112,142 shares of common stock for an
aggregate of $39,250 on April 7, 2000. The Company issued these shares upon
exercise of outstanding options.
On May 9, 2000, options were exercised for 100,000 shares of common stock.
On May 18, 2000, an officer of the Company converted 15,000 shares of preferred
stock into 15,000,000 shares of common stock.
Note 3 - RECEIVABLES - OFFICERS
The majority stockholder of the Company, who is also a director and officer of
the Company, is involved in litigation that may require him to transfer shares
of common stock of the Company to the plaintiffs. In addition, the litigation
may further require payments by this stockholder and the issuance of warrants by
the Company. See Item 5 of Part II in the Company's Form 10-QSB for the quarter
ended March 31, 2000, for a more detailed discussion of this litigation. Any
impact on the accompanying financial statements as a result of the resolution of
this contingency cannot be determined at this time. During the second quarter,
the Company loaned $200,000 to the majority stockholder. The loan bears interest
at the prime rate. The loan and any interest accrued on the loan are due on May
13, 2002.
During the second quarter another officer received a loan of $50,000 from the
Company. This loan bears interest at the rate of 6.5% per annum. The loan is due
September 10, 2000, and is secured by this officer's common stock of the
Company.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Certain statements contained in this report, including, without
limitation, statements containing the words "believes," "anticipates," "expects"
and words of similar import constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks and uncertainties.
The Company's actual results may differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including the
success and subsequent acceptance of new medical research and development; the
regulatory framework of the health care industry; the Company's ability to
create, sustain, manage or forecast its growth; its ability to attract and
retain key personnel; its ability to protect technology; changes in its business
strategy or development plans; competition; demographic changes; business
disruptions; adverse publicity; and international, national and local general
economic and market conditions.
PLAN OF OPERATION
The Company is in the development stage and has not had any significant
revenue from operations to date. It incurred losses of $335,693 for the quarter
ended June 30, 2000, and of $1,037,014 for the first six months of 2000. It has
incurred losses of $6,254,900 since its inception in 1996. Of that amount,
$2,094,508 is attributable to the non-cash financing cost of the Company's sale
of securities. Another $1,037,133 represents the non-cash expense resulting from
the issuance of common stock and options to purchase common stock to members of
the Company's management and third parties for services rendered. Of the
remaining amount, the Company has spent $887,150 on research and development
since inception.
In early May 2000, the Company launched its marketing campaign for
resonated drinking products at The Brett Favre Forward Foundation Charity
Celebrity Golf Tournament in Biloxi, Mississippi. Brett Favre is the official
spokesperson for the resonated Spring Water and Real-Pro Hi-Energy Sports Drink
produced by RealPure Beverage Group, LLC, a licensee of the Company. The Company
has begun receiving limited royalties from RealPure.
In addition, the Company anticipates CE Marking of its 18-inch and
seven-foot clinical Jacobson Resonators for treatment of chronic pain of the
knee in the near future. It also expects FDA approval of its 18-inch clinical
Jacobson Resonator for treatment of chronic pain from osteoarthritis of the knee
and CE Marking of those resonator models for treatment of the entire spectrum of
chronic pain sometime in late 2000. Receipt of those approvals will allow the
Company's licensees to make, market, distribute and sell those clinical products
on a commercial basis in the United States of America and Europe. In addition,
the Company's licensees are currently gearing up to make, market, distribute and
sell the Company's portable Jacobson resonators on a commercial basis. The
foregoing combination of events is expected to generate ongoing revenue for the
Company and thereby bring it out of the development stage into the operating
stage during the calendar year 2000.
9
<PAGE> 10
Other possible sources of revenue for the Company during the rest of
2000 include the following:
1. Licensing revenue from a larger medical products company for
the development, marketing and distribution rights in
connection with the use of Jacobson Resonance in the treatment
of cardiac arrhythmias. The Company thinks that interest in
such a licensing arrangement will be generated by the
publication of the results of the completed research in
cardiac pacing at the University of Oklahoma Health Sciences
Center that Jacobson Resonance is effective in the treatment
of cardiac arrhythmias in dogs.
2. Licensing revenue from O2 Marketing Group, Inc., a
manufacturer of consumer-oriented oxygen products for the
cosmetics, nutraceutical and pharmaceutical industries, for an
exclusive license to use Jacobson Resonance for not less than
ten years covering the Republic of South Africa. The Company
has a letter of intent with O2 and is currently negotiating a
definitive license arrangement.
3. Licensing revenue from Comercializadora de Calidad S.A. of
Guatemala, for the distribution of resonators and the
establishment of treatment centers throughout Panama, El
Salvador, Costa Rica and Guatemala. The Company signed a
letter of intent with the Guatemalan distributor in March
2000.
4. Licensing revenue from Genesis Group International ("GGIC"),
for the use of Jacobson Resonance in the development,
distribution, marketing and sale of GGIC's all-natural and
resonated family of nasal sprays worldwide. The Company signed
a letter of intent with GGIC in February 2000.
5. Licensing revenue from Palmer Natural Products, Inc., and
Perfect Living Systems, Inc., two nutraceutical laboratories
and formulary companies located in Southern California. These
companies plan to use Jacobson Resonance technology and
equipment in the formulary of multiple nutraceuticals, as well
as client-specific products, for manufacture, marketing,
distribution and sale. The Company signed a letter of intent
with these companies in April 2000.
6. Increases in revenue from its existing licensees for the
clinical Jacobson Resonators because of additional FDA
approvals and CE Marking. After receipt of the currently
pending applications for FDA approvals and CE Marking, the
Company plans to seek additional FDA approvals for the other
three clinical models of the Jacobson Resonator and for
treatment of the entire chronic pain spectrum, not just
osteoarthritis of the knee. It also plans to seek CE Marking
of the other two clinical models of the Jacobson Resonator.
These approvals would broaden the product line in both the
United States of America and Europe and would broaden the
applications for the clinical Jacobson Resonators in the
United States of America.
10
<PAGE> 11
The Company will continue both use and product research and development
for Jacobson Resonance. The Company estimates that the currently ongoing
university research will require about $100,000 of the Company's funds for the
rest of 2000. It anticipates continued prototyping of additional models of the
Jacobson Resonator for varying uses if additional funds become available for
that purpose. It estimates that the costs to the Company of such prototyping
will be approximately $100,000 for the rest of 2000.
RESULTS OF OPERATIONS FOR THE QUARTER ENDED JUNE 30, 2000
The Company had a net loss for the quarter ended June 30, 2000, of
$335,693, as compared to a loss for the quarter ended March 31, 1999, of
$2,552,467, a decrease of $2,216,774 or 86.8%. The decrease in the loss
primarily results from a one-time, non-cash interest expense of $2,089,099
during the second quarter of 1999 that was the result of the Company's sale of
convertible debentures and warrants to purchase common stock in early June 1999.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000
The Company had a net loss for the six months ended June 30, 2000, of
$1,037,014, as compared to a loss for the six months ended June 30, 1999 of
$2,740,330, a decrease of $1,703,316 or 62.2%. The decrease in the loss
primarily results from a one-time, non-cash interest expense of $2,089,099
during the second quarter of 1999 that was the result of the Company's sale of
convertible debentures and warrants to purchase common stock in early June 1999,
which was partially offset by an increase in general and administrative expenses
of $359,273. This latter increase is primarily due to a $328,750 non-cash
expense in the first quarter of the year for the fair value of common stock of
the Company issued for services rendered.
LIQUIDITY AND CAPITAL RESOURCES AS OF JUNE 30, 2000
The Company's cash on hand at June 30, 2000, was $810,994, as compared
to $579,518 at December 31, 1999. Revenues for the first half of 2000 were
$7,250 as compared to $16,581 for the first half of 1999. The Company had a net
loss of $1,037,014 for the first half of 2000.
Since the beginning of the year, the Company has received $1,148,395
from the sale of securities and the exercise of stock options. The Company
anticipates that its existing resources will be sufficient to fund its plan of
operation through the end of 2000. By that time, the Company expects to be
generating sufficient revenue to fund its plan of operation after then. However,
if the Company by that time is not generating any revenue or is generating
insufficient revenue for such funding, then the Company may have to seek
additional funds through either debt or equity financing.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
The Company issued options to purchase 599,000 shares of common stock
on April 4, 2000. These options are exercisable at $1.28 per share. Of the total
amount, the Company granted options to purchase (a) 525,000 shares of common
stock to the directors and officers of the Company and (b) 74,000 shares of
common stock to nine consultants, including four members of the Company's
Scientific Advisory Board. The Company relied upon the exemption from
registration contained in Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act") for these option issuances.
The Company issued 112,142 shares of common stock to three individuals
for an aggregate of $39,250 on April 7, 2000. The Company issued these shares
upon exercise of outstanding options and relied upon the exemption from
registration contained in Section 4(2) of the Securities Act for theses stock
issuances.
The Company issued 100,000 shares of common stock upon the exercise of
stock options by one individual for $35,000 on May 9, 2000. The Company relied
upon the exemption from registration contained in Section 4(2) of the Securities
Act for this stock issuance.
On May 18, 2000, an officer of the Company converted 15,000 shares of
preferred stock into 15,000,000 shares of common stock. The Company relied upon
the exemption from registration contained in Section 4(2) of the Securities Act
for this stock issuance.
12
<PAGE> 13
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 by the
undersigned, thereunto duly authorized.
JACOBSON RESONANCE ENTERPRISES, INC.
Dated: August 21, 2000 By: /s/ Jerry I. Jacobson
------------------------------------------
Jerry I. Jacobson, Chairman of the Board
and Chief Executive Officer
13
<PAGE> 14
EXHIBIT INDEX
Exhibit
Number Description Location
------- ----------- --------
27 Financial Data Schedule *1
------------------
*1 Filed electronically pursuant to Item 401 of Regulation S-T.
