<PAGE>2
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Amendment 1 to
FORM 10SB
General Form for Registration of Securities of Small
Business Issuers
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
JARRETT/FAVRE DRIVING ADVENTURE, INC.
(Exact name of Small Business Issuer in its charter)
FLORIDA 59-3564984
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
3660 Maguire Boulevard, Suite 101, Orlando Florida 32803
(Address of principal executive offices) (Zip Code)
Registrant's Telephone number, including area code: (888) 467-2231
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Forward-Looking Statements and Associated Risk. This Registration
Statement, contains forward-looking statements including statements
regarding, among other items, the Corporation's growth strategies, and
anticipated trends in the Corporation's business and demographics.
These forward-looking statements are based largely on the Corporation's
expectations and are subject to a number of risks and uncertainties,
certain of which are beyond the Corporation's control. Actual results
could differ materially from these forward-looking statements.
<PAGE>3
ITEM 1. DESCRIPTION OF BUSINESS
The Corporation is in the development stage and will offer a wide range
of NASCAR style driving schools and events endorsed and co-developed by
renowned driving champions, Ned and Dale Jarrett. These programs will
be conducted at various nationally recognized racetracks throughout the
country. The Corporation owns several "NASCAR" type automobiles and
has secured several racetrack locations at which it will offer these
services at various dates during the coming fiscal year. The
Corporation completed its first driving program date during the weekend
of July 4, 1999.
Products and Services. The Corporation offers various types of
programs for individuals and corporations at its Driving Adventure
locations. These programs will allow customers to either ride with an
experienced driver or to get behind the wheel of an authentic stock
car. The Corporation offers driving programs of various lengths
and durations. Pricing ranges from $85.00 for a riding program to
$1,375 for an advanced program consisting of a total of 50 laps. The
Corporation intends to develop two full driving schools in the next
full year.
The Corporation has purchased six (6) stock cars at an approximate
price of $50,000 per car. Parts will be nominal due to the lack of
real pressure asserted on the cars, approximately $10,000 per month per
site. Staffing costs will be approximately $40,000 per month at each
active location.
The Corporation has contracted with several race tracks to lease their
facilities for a daily lease fee ranging from $1,000 to $3,000.
The Corporation also offers a number of add-on sale items including
individual and group pictures, videos from its AdventureCam to be
located in the car (split screen cameras), clothing and souvenirs.
The Corporation is currently developing its logos and marketing
materials and will commence the trademarking process for its name and
various products and services.
Marketing. The Corporation offers its products and services at
various tracks throughout the country. The Corporation shall employ a
sales staff of two at each location. These individuals will primarily
be responsible with closing the prospects created through promotion.
These services will be sold as corporate outings and directly to the
public through various marketing and advertising mediums such as
television, radio, billboard, newspaper, direct mail and on-site
marketing.
Promotional and Licensing Agreements. In December 1998, the
Corporation entered into promotional and licensing agreements with Dale
Jarrett, Ned Jarrett, Glenn Jarrett, Jason Jarrett and Brett Favre
(individually, the "Licensor") whereby these individuals have granted
the Corporation the use of their names and likeliness in advertising,
products and promotional materials, as well as an agreed upon number of
appearances per year and an agreed upon number of radio and/or
television commercials as set out in each agreement. Ned Jarrett is
the father of Dale Jarrett and Glenn Jarrett. Dale Jarrett is the
father of Jason Jarrett.
Pursuant to these agreements, the Corporation has issued an aggregate
of 5,500,000 Common Shares of the Corporation. The term of each
agreement is Ten (10) years unless sooner terminated by the occurrence
of any of the following:
(a) a material breach by the Corporation of the agreement which breach
has not been satisfied within thirty (30) days of receipt of written
notice from the Licensor;
(b) upon receipt of written notice from the Licensor if, as a result
of (i) any act or omission of the Corporation, (ii) any claim or charge
against the Corporation or (iii) any other occurrence or circumstances
involving the Corporation, the continued association of Licensor with
the Corporation would be detrimental to the value of the Licensed
Material or to Licensor's image or reputation;
(c) the failure of the Corporation to continually operate and manage
the business according to the policies, practices and standards agreed
to by the parties;
<PAGE>4
(d) the failure of the Corporation to raise the $100,000 in investment
capital; and
(e) the failure of the Corporation to comply with any laws and
regulations, the consequences of which are material adverse to the
Corporation.
During the term of the agreements, the Licensor agrees not to directly
or indirectly (whether for compensation or otherwise), provide
promotional appearances or services to any business which competes with
the Corporation's business of owning and managing driving schools.
The Corporation has also agreed not to issue any additional common
shares, preferred shares or warrants in the Corporation's stock to
insiders, directors without the Licensor's approval. Additionally,
any and all future financings will be offered to the Licensor prior to
outside fullment.
Competition. The driving schools industry is currently experiencing a
limited degree of competition with regard to availability, price,
service, quality and location. There are two well-established market
leaders (Richard Petty Driving Experience and the Skip Barber Driving
School) that are nationally recognized and which possess substantially
greater financial, marketing personnel and other resources than the
Corporation. There is also a small number of local or regional
schools. It is also likely that other competitors will emerge in the
near future. There is no assurance that the Corporation will compete
successfully with other established driving schools. The Corporation
shall compete on the basis of availability, price, service, quality and
location. Inability to compete successfully might result in increased
costs, reduced yields and additional risks to the investors herein.
Employees. The Corporation will initially employ five full time
employees responsible for securing the Driving Adventure locations,
procurement of equipment, racecars, and the development and
implementation of the Corporation's marketing plan. Each active
location will have up to 24 employees including but not limited to two
mechanics, two driving instructors, two pit crewmen, two
administrators, a flagman, two salesmen, an accountant and a site
manager.
Additional employees and/or independent contractors will be obtained as
required.
Seasonal Nature of Business Activities. The Corporation's operations
shall not be seasonal, though some track locations may only operate on
certain days or certain times of the year
Item 2. Management's Discussion and Analysis or Plan of Operation
Trends and Uncertainties. Demand for the Corporation's products will
be dependent on, among other things, general economic conditions which
are cyclical in nature. Inasmuch as a major portion of the
Corporation's activities will be the receipt of revenues from its
driving school services and products, the Corporation's business
operations may be adversely affected by the Corporation's competitors
and prolonged recessionary periods.
Capital and Source of Liquidity. The Corporation currently has no
material commitments for capital expenditures.
For the period from inception to June 30, 1999, the Corporation
acquired plant and equipment of $333,370 resulting in net cash used in
investing activities of $333,370.
For the period from inception to June 30, 1999, the Corporation sold
common stock for $690,000 and repaid $444 of long-term debt. As a
result, the Corporation had net cash provided by financing activities
of $689,556 for the period from inception to June 30, 1999.
On a long term basis, liquidity is dependent on continuation of
operation and receipt of revenues.
Results of Operations. The Corporation has not conducted any
material revenue producing operations since inception. For the period
from inception (November 24, 1998 to June 30, 1999, the Corporation had
sales of $1,098 with a cost of sales of $727 for a gross profit of
$371.
<PAGE>5
For the period from inception (November 24, 1998) to June 30, 1999, the
Corporation had general and administrative expenses of $357,512. These
expenses consisted primarily of advertising of $20,946, compensation of
officers of $65,000, consulting services of $12,080, legal services of
$15,000, payroll taxes of $7,633, printing costs of $24,836, accounting
fees of $10,950, salaries of $75,627, rent of $10,229, supplies of
$3,707, telephone of $5,083, travel costs of $28,744 and miscellaneous
expenses of $77,677.
The Corporation shall focus on limiting its administrative costs.
Plan of Operation. The Corporation is in the development stage and has
not conducted any significant operations to date or received any
material operating revenues. The Corporation may experience problems;
delays, expenses and difficulties sometimes encountered by an
enterprise in the Corporation's stage of development, many of which are
beyond the Corporation's control. These include, but are not limited
to, unanticipated problems relating to additional costs and expenses
that may exceed current estimates and competition.
The Corporation is not delinquent in any of its obligations even though
the Corporation has generated limited operating revenues. The
Corporation intends to market its products and services utilizing cash
made available from the private sale of its securities and operations.
The Corporation's management is of the opinion that the proceeds of the
sales of its securities and future revenues will be sufficient to pay
its expenses for the next twelve months.
GENERAL - YEAR 2000 ISSUES
The Corporation has conducted a comprehensive review of its computer
systems to identify any business functions that could be affected by
the "Year 2000" issue. As the millennium ("Year 2000") approaches,
businesses may experience problems as the result of computer programs
being written using two digits rather than four to define the
applicable year. The Corporation has conducted a comprehensive review
of its computer systems to identify those areas that could be affected
by the "Year 2000" issue. Any of the Corporation's programs that have
time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. If not corrected, this could result
in extensive miscalculations or a major system failure.
The Corporation relies on industry standard software. Certain
manufacturers have already provided the Corporation with upgraded
software to address the "Year 2000" issue and the Corporation believes
that its remaining software manufactures will modify their programs
accordingly. In the event the remaining manufacturers do not upgrade
their software packages, the Corporation will replace such software
with programs that address the "Year 2000" issue. The Corporation
believes that by modifying existing software and converting to new
software, the "Year 2000" issue will not pose significant operational
problems and is not anticipated to require additional expenditures that
would materially impact its financial position or results of operations
in any given year.
Successful and timely completion of the Year 2000 project is based on
management's best estimates derived from various assumptions of future
events. These events are inherently uncertain, including the progress
and results of vendors and suppliers Year 2000 readiness.
ITEM 3. DESCRIPTION OF PROPERTY
The Corporation's executive offices are located at 3660 Maguire
Boulevard, Suite 101, Orlando, Florida 32803. The Corporation leases
its office facilities under an operating lease through April 15, 2000.
These facilities consist of 2000 square feet and are leased at the
monthly lease rate of $2,300.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tabulates holdings of shares of the Corporation by each
person who, subject to the above, at the date of this prospectus, holds
of record or is known by Management to own beneficially more than 5.0%
of the Common Shares and, in addition, by all directors and officers of
the Corporation individually and as a group. Each named beneficial
owner has sole voting and investment power with respect to the shares
set forth opposite his name.
<PAGE>6
Shareholdings at Date of
This Prospectus
<TABLE>
<CAPTION>
Percentage of
Number & Class(1) Outstanding
Name and Address of Shares Common
Shares
<S> <C> <C>
Timothy Shannon 3,000,000 25.0%
3660 Maguire Blvd
Suite 101
Orland, Florida 32803
Brian Rosenbloom 3,000,000 25.0%
3660 Maguire Blvd
Suite 101
Orland, Florida 32803
Dale Jarrett 1,500,000 12.5%
3182 9th Tee Drive
Newton, NC 28658
Brett Favre 1,500,000 12.5%
132 Westover Drive
Hattiesburg, MS 39402
Ned Jarrett 1,000,000 8.0%
3182 9th Tee Drive
Newton, NC 28658
Glenn Jarrett 1,000,000 8.0%
3182 9th Tee Drive
Newton, NC 28658
All Directors & Officers
as a group (3 persons) 7,000,000 57.38%
</TABLE>
(1)Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the voting) and/or
sole or shared investment power (including the power to dispose or
direct the disposition) with respect to a security whether through a
contract, arrangement, understanding, relationship or otherwise.
Unless otherwise indicated, each person indicated above has sole power
to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Board of Directors. The following persons listed below have been
retained to provide services as director until the qualification and
election of his successor. All holders of Common Stock will have the
right to vote for Directors of the Corporation. The Board of Directors
has primary responsibility for adopting and reviewing implementation of
the business plan of the Corporation, supervising the development
business plan, review of the officers' performance of specific business
functions. The Board is responsible for monitoring management, and
from time to time, to revise the strategic and operational plans of the
Corporation. Directors receive no cash compensation or fees for
their services rendered in such capacity.
The Executive Officers and Directors are:
<TABLE>
<CAPTION>
Name Position Term(s) of
Office
<S> <C> <C>
Timothy B. Shannon, age 37 President, Director Inception to Present
Chief Executive Officer
Brian C. Rosenbloom, age 38 Vice President Inception to Present
Secretary/Treasurer/Director
Chief Financial Officer
Glenn Jarrett, age 48 Chief Operating Officer Inception to Present
Director
</TABLE>
<PAGE>7
Resumes:
Timothy B. Shannon. Mr. Shannon has been President, Director and
Chief Executive Officer of the Corporation since its inception. For
the past four years, Mr. Shannon has been employed in the investors
relations industry and currently serves as Vice President and a
principal of Shannon/Rosenbloom Marketing, an Orlando, Florida investor
relations firm. From 1992 to 1994, Mr. Shannon was an investment
advisor with Great Western Financial Securities and Hearn Financial, a
Corporation that he co-founded. Mr. Shannon spent six years as a
systems engineer and marketing representative with IBM after graduating
in 1983 from the University of South Florida with a degree in Computer
Science.
Brian C. Rosenbloom. Mr. Rosenbloom has been Secretary/Treasurer,
Vice President, Chief Financial Officer and a Director of the
Corporation since its inception. For the past four years, Mr.
Rosenbloom has been in the investor relations industry and currently
acts as President and a principal of Shannon/Rosenbloom Marketing, an
Orlando, Florida investor relations firm. Prior to that, Mr.
Rosenbloom has been involved in the investment and finance industry
working in various capacities. Mr. Rosenbloom graduated from the
University of Albany in 1982.
Glenn Jarrett. Mr. Jarrett has been Chief Operating Officer and a
Director of the Corporation since its inception. Mr. Jarrett works as
an auto racing announcer and consultant. Mr. Jarrett has been a senior
motorsports announcer for TNN since 1991. He is a motorsports
announcer (Pits) at contracted events and is the co-producer and co-
host of the "World of Racing" radio program on MRN radio which airs
weekdays. Mr. Jarrett has an extensive background in auto racing.
He drove in the NASCAR Busch Series from 1982 to 1988 and ran a total
of eighteen (18) NASCAR Winston Cup Races from 1977 to 1983. Mr.
Jarrett is the acting consultant and marketing coordinator for DAJ
Racing, Inc. and has been a guest speaker at many auto racing and
related functions. Mr. Jarrett graduated from the University of North
Carolina in 1972 with a Bachelor of Science degree in Business
Administration.
Indemnification. The Corporation shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State
of Florida, any person made, or threatened to be made, a party to an
action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or
officer of the Corporation, or served any other enterprise as director,
officer or employee at the request of the Corporation. The Board of
Directors, in its discretion, shall have the power on behalf of the
Corporation to indemnify any person, other than a director or officer,
made a party to any action, suit or proceeding by reason of the fact
that he/she is or was an employee of the Corporation.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
Corporation, the Corporation has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Corporation of expenses incurred or paid
by a director, officer or controlling person of the Corporation in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the Corporation will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE CORPORATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
<PAGE>8
ITEM 6. EXECUTIVE COMPENSATION
Since inception, the following cash compensation has been paid by the
Corporation to its officers and directors, during which there were
three (3) officers and three (3) directors.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
<S> <C> <C> <C> <C> <C> <C> <C>
Other All
Name Annual Restricted LTIP Other
and Compen- Stock Options/ Pay- Compen-
Principal Salary Bonus sation Awards SARs Outs sation
Position Year ($) ($) ($) ($) ($) ($) ($)
Timothy B. Shannon
President
Chief Executive Officer 1999 (1)
Brian C. Rosenbloom
Vice President
Secretary/Treasurer
Chief Financial Officer (1)
Glenn Jarrett
Chief Operating Officer (2)
</TABLE>
(1) At inception, the Corporation issued 6,000,000 Common Shares valued
at $60,000 in lieu of cash payment for services to Mr. Shannon
($30,000) and Mr. Rosenbloom ($30,000).
(2) The Corporation has entered into an agreement with Glenn Jarrett
under which he will receive the option to purchase 250,000 Common
Shares of the Corporation at an option exercise price of $2.50 per
Common Share. The term of the option is ten years.
The Corporation retains the right to increase or decrease the cash
compensation of its employees as necessitated by business conditions.
The Corporation has not entered into Employment Agreements with its
officers.
Board of Directors Compensation. Members of the Board of Directors
will receive reasonable and customary fees to travel to meetings and
shall receive $1,000 per Board of Directors meeting. Director
liability insurance may be provided to all members of the Board of
Directors. No differentiation is made in the compensation of "outside
directors" and those officers of the Corporation serving in that
capacity.
Stock Option Plan. The Corporation shall implement an employee stock
option program. The specifics of the plan have yet to be determined.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the period ended June 30, 1999, the Corporation purchased an
aggregate of $60,000 of race vehicles from Jarrett/Favre
Motorsports, a company controlled by certain of the Corporation's
significant shareholders of whom one is an officer and director of
the Corporation. The Corporation believes that the price paid for the
vehicles was not in excess of their fair market value.
ITEM 8. DESCRIPTION OF SECURITIES
Qualification. The following statements constitute brief summaries of
the Corporation's Certificate of Incorporation and Bylaws, as amended.
Such summaries do not purport to be complete and are qualified in their
entirety by reference to the full text of the Certificate of
Incorporation and Bylaws.
The Corporation's articles of incorporation authorize it to issue up to
100,000,000 Common Shares, $.01 par value per Common Share. The
Common Shares purchased in this offering will be fully paid and non-
assessable.
Common Stock. Holders of Common Shares of the Corporation are
entitled to cast one vote for each share held at all shareholders
meetings for all purposes. Upon liquidation or dissolution, each
<PAGE>9
outstanding Common Share will be entitled to share equally in the
assets of the Corporation legally available for distribution to
shareholders after the payment of all debts and other liabilities.
Common Shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
Common Shares in the event of a subsequent offering. All outstanding
Common Shares are, and the Common Shares offered hereby will be when
legally issued, fully paid and non-assessable.
There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available
therefor. The Corporation has not paid dividends to date and it is not
anticipated that any dividends will be paid in the foreseeable future.
The Board of Directors initially may follow a policy of retaining
earnings, if any, to finance the future growth of the Corporation.
Accordingly, future dividends, if any, will depend upon, among other
considerations, the Corporation's need for working capital and its
financial conditions at the time.
Transfer Agent. Florida Atlantic Stock Transfer shall act as the
Corporation's transfer agent.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
The Corporation intends to apply for trading of its Common
Stock in the over-the-counter market on the OTC Bulletin
Board maintained by the NASD.
The Corporation has never paid any cash dividends nor does it intend,
at this time, to make any cash distributions to its shareholders as
dividends in the near future.
As of August 31, 1999, the number of holders of Corporation's common
stock is 51.
ITEM 2. LEGAL PROCEEDINGS
The Corporation is not involved in any legal proceedings as of the date
of this registration statement.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Since inception, there have been no changes in or disagreements with
the Corporation's principal independent accountant.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
At inception, the Corporation issued an aggregate of 6,000,000 Common
Shaers to Timothy Shannon (3,000,000 Common Shares) and Brian
Rosenbloom (3,000,000 Common Shares), officers and directors of the
Corporation. The Common Shares were issued at par value for services
rendered in connection with the formation of the Company. These
issuances were made to sophisticated investors pursuant to Section 4(2)
of the Securities Act of 1933.
During December 1999, the Corporation negotiated personal service
contracts with certain members of the Jarrett family and Brett Favre.
The Corporation issued an aggregate of 5,500,000 shares in connection
with the contracts at $.1667 per Common Share.
Dale Jarrett 1,500,000
Brett Favre 1,500,000
Ned Jarrett 1,000,000
Glenn Jarrett 1,000,000
Jason Jarrett 500,000
These issuances were made to sophisticated investors pursuant to
Section 4(2) of the Securities Act of 1933.
During March and April 1999, the Corporation sold 700,000 Common Shares
for $1.00 per Common Share in cash (unless otherwise noted) to the
following:
<PAGE>10
Name Amount of Shares
John D. King 12,500
Jt. Ten: James Coschignano 2,000
Sjiela Coschignano
Ronald Johnson Trust 5,000
Douglas R. Swenson 5,000
Theresa Thompson 15,000
Jt. Ten. Ronald D. Davis 10,000
Rhonda L. Davis
Kevin W. Kennedy 20,000
Scott A. Artz 35,000
Ronald Outar 2,500
Michael S. Hirschberger 3,000
Elizabeth Gheen 5,000
Timothy Miles 5,000
Kathleen Guarino 25,000
David Scott Gordan 10,000
Maria Smith 10,000
Steve Guarnino 25,000
Kimberlee E. Jaggers 2,000
Jt. Ten. Michael A. Morgan 5,000
Sherry Morgan
Kenneth J. Scott 10,000
Ian Strickland 5,000
Cindy Nadler 16,000
Ronnie L. Williams, Sr. 85,000
Charles W. Elliott
Living Trust 50,000
DTD 11/3/88
Deborah Kelly 1,000
Mary J. Lesio 1,000
Jt. Ten. Linda A. Lesio 3,000
Stephen J. Lesio
Jt. Ten. Harold Rosenbloom 20,000
Dolores Rosenbloom
Susan Mahoney 3,000
Neil T. Pitt 7,500
Jt. Ten. Mark S. Rosenbloom 15,000
Mary E. Rosenbloom
Tina Maenza 2,500
Frederick A. Lenz 15,000
Kimberly Dowda 65,000
Bruce R. Knox 20,000
Jason Bordeau 20,000
Dominck Vicari 58,000
Ron Mastrodanato 2,000
Jody M. Walker 5,000
(for services valued at $5,000)
Roger Tichenor 10,000
Robert E. Veitia 10,000
James A. Skalco 10,000
Carmela A. Aiello 1,000
Jt. Ten. Richard F. Higley 3,000
Gail F. Higley
Jt. Ten. James L. Waldron 40,000
Martie M. Waldron
Todd Havemeister 5,000
Ron Eiger 5,000
Jim Cleveland 10,000
John Polli, Sr. 5,000
These issuances were made in compliance with Rule 504, Regulation D of
the Securities Act of 1933 by Registrant's management. No commissions
were paid. The determination of whether an investor was accredited or
nonaccredited was based on the responses in the subscription agreement
filled out by each investor.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Indemnification. The Corporation shall indemnify to the fullest extent
permitted by, and in the manner permissible under the laws of the State
of Florida, any person made, or threatened to be made, a party to an
action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he is or was a director or
officer of the Corporation, or served any other enterprise as director,
officer or employee at the request of the Corporation. The Board of
<PAGE>11
Directors, in its discretion, shall have the power on behalf of the
Corporation to indemnify any person, other than a director or officer,
made a party to any action, suit or proceeding by reason of the fact
that he/she is or was an employee of the Corporation.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the
Corporation, the Corporation has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Corporation of expenses incurred or paid
by a director, officer or controlling person of the Corporation in the
successful defense of any action, suit or proceedings) is asserted by
such director, officer, or controlling person in connection with any
securities being registered, the Corporation will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issues.
INDEMNIFICATION OF OFFICERS OR PERSONS CONTROLLING THE CORPORATION FOR
LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, IS HELD TO BE
AGAINST PUBLIC POLICY BY THE SECURITIES AND EXCHANGE COMMISSION AND IS
THEREFORE UNENFORCEABLE.
PART F/S
The following financial statements required by Item 310 of Regulation
S-B are furnished below
Independent Auditor's Report dated July 23, 1999
Balance Sheet as of June 30, 1999
Statement of Operations for the period from inception (November 24,
1998) to June 30, 1999
Statement of Stockholders' Equity for the period from inception
(November 24, 1998) to June 30, 1999
Statement of Cash Flows for the period from inception (November 24,
1998) to June 30, 1999
Notes to Financial Statements
<PAGE>12
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
The Jarrett/Favre Driving Adventure, Inc.
We have audited the balance sheet of The Jarrett/Favre Driving
Adventure The Jarrett/Favre Driving Adventure, Inc. as of June 30,
1999, and the related statements of operations, stockholders'
equity and cash flows for period from inception (November 24, 1998)
to June 30, 1999. These financial statements are the
responsibility of the Corporation's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present
fairly, in all material respects, the financial position of The
Jarrett/Favre Driving Adventure, Inc. as of June 30, 1999, and the
related statements of operations, stockholders' equity and cash
flows for period from inception (November 24, 1998) to June 30,
1999, in conformity with generally accepted accounting principles.
James E. Scheifley & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
23-Jul-99
<PAGE.13
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Corporation)
Balance Sheet
June 30, 1999
ASSETS
Current assets:
Cash $ 126,020
Inventory 14,396
Prepaid expenses 25,010
------------
Total current assets 165,426
Property and equipment, at cost, net of
accumulated depreciation of $1,581 357,299
Other assets 12,200
------------
$534,925
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 5,628
Accounts payable 43,605
Accrued expenses 20,930
------------
Total current liabilities 70,163
Long-term debt 19,438
Commitments and contingencies (Note6)
Stockholders' equity:
Common stock, $.01 par value,
100,000,000 shares authorized,
12,200,000 shares issue and outstanding 122,000
Additional paid-in capital 1,549,669
Unearned services (870,836)
Deficit accumulated during development stage (355,509)
------------
445,324
------------
$534,925
See accompanying notes to consolidated financial statements.
<PAGE>14
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Corporation)
Statement of Operations
For the Period From Inception (November 24, 1998) to June 30, 1999
Sales $ 1,098
Cost of sales 727
----------
Gross profit 371
Other costs and expenses:
General and administrative 357,512
----------
Income (loss) from operations (357,141)
Other income and (expense):
Interest expense (190)
Interest income 1,822
----------
1,632
----------
Income before taxes (355,509)
Income taxes -
Net income (loss) $ (355,509)
Per share information:
Basic (loss) per share $ (0.03)
Weighted average shares outstanding 10,859,000
See accompanying notes to consolidated financial statements.
<PAGE>15
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Corporation)
Statement of Changes in Stockholders' Equity
For the Period From Inception (November 24, 1998) to June 30, 1999
<TABLE>
<CAPTION>
Deficit
Additional Accumulated
Common Stock Paid-in Unearned During Develop-
ACTIVITY Shares Amount Capital Services ment Stage Total
<S> <C> <C> <C> <C> <C> <C> <C>
Shares issued for services at inception
at par 6,000,000 $ 60,000 $ - $ - $ - $60,000
Shares issued for service contracts
December, 1998 at $.1667 per share 5,500,000 55,000 861,836 (870,836) - (45,833)
Shares issued for cash:
March, 1999 at $1.00 per share 381,000 3,810 377,190 - - 381,000
April, 1999 at $1.00 per share 314,000 3,140 310,860 - - 314,000
Less expenses of offering (5,000) - (5,000)
Shares issued for services
April, 1999 at $1.00 per share 5,000 50 4,950 - - 5,000
Net loss for the period ended
June 30, 1999 - - - - (355,509) (355,509)
---------- -------- -------- -------- -------- --------
Balance June 30, 1999 12,200,000 $122,000 $1,549,669 $ (870,836) $ (355,509) $ 445,324
========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>16
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Corporation)
Statements of Cash Flows
For the Period From Inception (November 24, 1998) to June 30, 1999
Net (loss) $ (355,509)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 47,414
Common stock issued for services 65,000
Changes in assets and liabilities:
(Increase) decrease in inventory (14,396)
(Increase) in prepaid expenses (25,101)
(Increase) in other assets (12,200)
Increase in accounts payable and
accrued expenses 64,535
----------
Total adjustments 125,343
----------
Net cash (used in)
operating activities (230,166)
Cash flows from investing activities:
Acquisition of plant and equipment (333,370)
----------
Net cash (used in) investing activities
investing activities (333,370
Cash flows from financing activities:
Common stock sold for cash 690,000
Repayment of long-term debt (444)
----------
Net cash provided by
financing activities 689,556
----------
Increase (decrease) in cash 126,020
Cash and cash equivalents,
beginning of period -
Cash and cash equivalents,
end of period $ 126,020
===========
See accompanying notes to consolidated financial statements.
<PAGE>17
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Corporation)
Statements of Cash Flows
For the Period From Inception (November 24, 1998) to June 30, 1999
Supplemental cash flow information:
Cash paid for interest $ 190
Cash paid for income taxes $ -
See accompanying notes to consolidated financial statements.
<PAGE>18
The Jarrett/Favre Driving Adventure, Inc.
Notes to Consolidated Financial Statements
30-Jun-99
Note 1. Organization and Summary of Significant Accounting
Policies.
The Corporation was incorporated in Florida on November 24, 1998 and
has elected to be taxes as a "C" corporation. The Corporation is in
its development stage and plans to offer the "NASCAR" driving
experience to the public. The Corporation owns several 'NASCAR" type
automobiles and has secured several racetrack locations at which it
will offer these services at various dates during the coming fiscal
year. The Corporation completed its first driving program date during
the weekend of July 4, 1999.
Inventory:
Inventory is valued at the lower of cost or market on a first-in
first-out basis and consists primarily of finished goods and
includes primarily promotional items that bear the Corporation's logo.
Property, Plant and Equipment:
Property, plant and equipment are recorded at cost and are
depreciated based upon estimated useful lives using the
straight-line method. Estimated useful lives range from 3 to 5
years for furniture and fixtures and from 5 to 10 years for
equipment.
Revenue Recognition:
Revenue is recognized at the time the product is delivered or the
service is performed. Provision for sales returns will be estimated
based on the Corporation's historical return experience, however sales
returns are not expected to be significant due to the nature of the
services provided by the Corporation.
Intangible Assets and Long Lived Assets:
The Corporation makes reviews for the impairment of long-lived assets
and certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not
be recoverable. Under SFAS No. 121, an impairment loss would be
recognized when estimated future cash flows expected to result from
the use of the asset and its eventual disposition is less than its
carrying amount. No such impairment losses have been identified by
the Corporation for the period ended June 30, 1999.
Cash:
For purposes of the statement of cash flows, the Corporation considers
all highly liquid debt instruments purchased with a maturity of
three months or less to be cash equivalents.
Estimates:
The preparation of the Corporation's financial statements requires
management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying
notes. Actual results could differ from these estimates.
Advertising costs:
Advertising costs are charged to operations when the advertising
first takes place. Advertising costs charged to operations were
$40,421 for the period ended June 30, 1999.
Fair value of financial instruments
The Corporation's short-term financial instruments consist of cash and
cash equivalents, accounts and loans receivable, and payables and
accruals. The carrying amounts of these financial instruments
approximates fair value because of their short-term maturities.
Financial instrument that potentially subjects the Corporation to a
concentration of credit risk consists principally of cash. During
the year the Corporation maintained cash deposits at financial
institutions in excess of the $100,000 limit covered by the Federal
Deposit Insurance Corporation. The Corporation does not hold or issue
financial instruments for trading purposes nor does it hold or
issue interest rate or leveraged derivative financial instruments
Stock-based Compensation
The Corporation adopted Statement of Financial Accounting Standard No.
123 (FAS 123), Accounting for Stock-Based Compensation at its
<PAGE>19
inception. Upon adoption of FAS 123, the Corporation continued to
measure compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed by
APB No. 25, Accounting for Stock Issued to Employees. The Corporation
paid stock based compensation during the period ended June 30, 1999
as described in Note 4.
New Accounting Pronouncements
SFAS No. 130, "Reporting Comprehensive Income", establishes
guidelines for all items that are to be recognized under accounting
standards as components of comprehensive income to be reported in
the financial statements. The statement is effective for all
periods beginning after December 15, 1997 and reclassification
financial statements for earlier periods will be required for
comparative purposes. The adoption of SFAS No. 130 has had no
impact on the Corporation.
In March 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-1, Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use
("SOP 98-1"). SOP 98-1 provides authoritative guidance on when
internal-use software costs should be capitalized and when these
costs should be expensed as incurred. The Corporation adopted SOP 98-1
at its inception. The adoption of SOP 98-1 has had no impact on
the Corporation.
Effective December 31, 1998, the Corporation adopted SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"). SFAS 131 superseded SFAS No. 14, Financial Reporting
for Segments of a Business Enterprise. SFAS 131 establishes
standards for the way that public business enterprises report
information about operating segments in annual financial statements
and requires that those enterprises report selected information
about operating segments in interim financial reports. SFAS 131
also establishes standards for related disclosures about products
and services, geographic areas, and major customers. The adoption
of SFAS 131 has had no impact on the Corporation.
Effective December 31, 1998, the Corporation adopted the provisions of
SFAS No. 132, Employers' Disclosures about Pensions and Other Post-
retirement Benefits ("SFAS 132"). SFAS 132 supersedes the
disclosure requirements in SFAS No. 87, Employers' Accounting for
Pensions, and SFAS No. 106, Employers' Accounting for Post-
retirement Benefits Other Than Pensions. The overall objective of
SFAS 132 is to improve and standardize disclosures about pensions
and other post-retirement benefits and to make the required
information more understandable. The adoption of SFAS 132 has had
no impact on the Corporation.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging
Activities ("SFAS 133"), which is required to be adopted in years
beginning after June 15, 1999. SFAS 133 will require the Corporation to
recognize all derivatives on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives will
either be offset against the change in fair value of hedged assets,
liabilities, or firm commitments through earnings or recognized in
other comprehensive income until the hedged item is recognized in
earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. Management
believes that the adoption of SFAS No. 133 will have no impact on
the Corporation
Note 2. Property, Plant and Equipment.
Property, plant and equipment consists of the following at June 30,
1999:
Office furniture an equipment $ 21,855
Shop and track equipment 8,999
Race vehicles 295,762
Vehicles - other 32,264
---------
358,880
Less accumulated depreciation (1,581)
---------
$357,299
<PAGE>20
Depreciation charged to operations was $1,581 for the period ended
June 30, 1999.
Note 3. Other Assets
Other assets at June 30, 1999 consist of principally of costs
associated with the development of the Corporation's internet web site
and the software component thereof which will enable the Corporation to
offer its services and arrange for payment therefore
electronically. The Corporation plans to amortize these costs over a
five year period.
Note 4. Stockholders' Equity
At inception, the Corporation issued an aggregate of 6,000,000 shares
of its common stock to two individuals who are officers and
directors of the Corporation in exchange for there services rendered in
connection with the formation of the Corporation. The shares were
valued at par value.
During December 1999 the Corporation negotiated personal service
contracts with certain members of the Jarrett family and Bret
Farve. The Jarretts and Favre have had a prior business
relationship related to automobile racing. The contracts require
the individuals to provide personal appearances and to participate
in the advertising and promotional efforts of the Corporation for a
period of ten years. The Corporation issued an aggregate of 5,500,000
shares in connection with the personal service contracts. The
shares issued for the services to be performed over the contract
terms were valued at $.1667 per share, which is the Corporation's
estimate of the fair vale of the stock. The estimate was based
Favre's estimated hourly rate for services provided to his
principal employer multiplied by the estimated hours required under
the personal service contract with the product thereof then divided
by the number of shares issued to Favre.
This price per share was used to value the shares issued under all
of the contracts. The unearned services under the contracts
aggregate $870,835 at June 30, 1999 and are classified as a
reduction of stockholders' equity. Services charged to expense
during the period ended June 30, 1999 amounted to $45,833. The
services will be charged to expense ratably over the remaining
terms of the contracts (9.5 years).
During March 1999, the Corporation commenced a private sale of its
common stock to a limited group of investors. The Corporation sold
695,000 shares of its common stock for gross proceeds of $695,000
and incurred direct expenses of the offering amounting to $5,000.
During April 1999, the Corporation issued 5,000 shares of its common
stock to an individual for services provided to the Corporation. The
shares were valued at $1.00 per share, which is consistent with the
price per share paid in cash by investors during the period.
Note 5. Income Taxes.
Deferred income taxes may arise from temporary differences
resulting from income and expense items reported for financial
accounting and tax purposes in different periods. Deferred taxes
are classified as current or non-current, depending on the
classifications of the assets and liabilities to which they relate.
Deferred taxes arising from temporary differences that are not
related to an asset or liability are classified as current or non-
current depending on the periods in which the temporary differences
are expected to reverse. The Corporation had no significant deferred
tax items arise during any of the periods presented.
The Corporation has not provided for income taxes during the period
ended June 30, 1999 as a result of an operating loss. The Corporation
has a net operating loss carryforward at June 30, 1999 of
approximately $310,000. The Corporation has fully reserved the
deferred tax asset (approximately $105,000) that would arise from
the loss carryforward since the Corporation cannot predict a level of
operations that would assure the utilization of the loss in future
periods.
<PAGE>21
Note 6. Commitments and contingencies
Operating leases:
The Corporation leases its office facilities under an operating lease
through April 15, 2000. Additionally, the Corporation has an operating
lease associated with a vehicle with a term ending in April 2003.
Minimum future rentals payable under the leases are as follows:
Year Amount
1999 $ 18,369
2000 $ 18,737
2001 $ 7,937
2002 $ 7,937
2003 $ 3,969
Rent expense amounted to $14,059 for the period ended June 30,
1999
Note 7. Related Party Transactions
During the period ended June 30, 1999, the Corporation purchased an
aggregate of $60,000 of race vehicles from Jarrett/Favre
Motorsports, a company controlled by certain of the Corporation's
significant shareholders of whom one is an officer and director of
the Corporation. The Corporation believes that the price paid for the
vehicles was not in excess of their fair market value.
<PAGE>22
PART III
ITEM 1. INDEX TO EXHIBITS
(2) Charter and by-laws
(3) Instruments defining the rights of security holders
(5) Voting Trust Agreement - Not Applicable
(6) Material Contracts
(7) Material Foreign Patents - Not Applicable
(12) Additional Exhibits
ITEM 2. DESCRIPTION OF EXHIBITS
(2.1) Articles of Incorporation incorporated by reference to
Form 10SB
(2.2) Bylaws incorporated by reference to
Form 10SB
(3.1) Common Stock Certificate incorporated by reference to
Form 10SB
(6.1) Promotion and Licensing Agreement between Company and Dale
Jarrett dated November 23, 1998 incorporated by reference
to Form 10SB
(6.2) Promotion and Licensing Agreement between Company and Ned
Jarrett dated November 23, 1998 incorporated by reference
to Form 10SB
(6.3) Promotion and Licensing Agreement between Company and Glenn
Jarrett dated November 23, 1998 incorporated by reference
to Form 10SB
(6.4) Promotion and Licensing Agreement between Company and Jason
Jarrett dated November 23, 1998 incorporated by reference
to Form 10SB
(6.5) Promotion and Licensing Agreement between Company and Brett
Favre dated November 23, 1998 incorporated by reference to
Form 10SB
<PAGE>23
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
JARRETT/FAVRE DRIVING ADVENTURE, INC.
Date: September 8, 1999 --------------------------------
By: Brian Rosenbloom, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 125,020
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 14,396
<CURRENT-ASSETS> 165,426
<PP&E> 357,299
<DEPRECIATION> 1,581
<TOTAL-ASSETS> 534,925
<CURRENT-LIABILITIES> 70,163
<BONDS> 0
<COMMON> 122,000
0
0
<OTHER-SE> 323,324
<TOTAL-LIABILITY-AND-EQUITY> 534,925
<SALES> 1,098
<TOTAL-REVENUES> 1,098
<CGS> 727
<TOTAL-COSTS> 727
<OTHER-EXPENSES> 357,512
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 190
<INCOME-PRETAX> (355,509)
<INCOME-TAX> 0
<INCOME-CONTINUING> (355,509)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (355,509)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
