<PAGE>2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
---------- ----------
Commission file number - 000-21483
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
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding twelve months (or such shorter period that
the Registrant was required to file such reports), and (2) has been subject
to file such filing requirements for the past thirty days.
Yes x No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report:
12,335,000 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
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<PAGE>3
Jarrett/Favre Driving Adventure, Inc.
PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's' discussion and analysis of
financial condition and results of operations
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
<PAGE>4
PART I
Item 1. Financial Statements:
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Company)
Balance Sheet
September 30, 1999
(Unaudited)
ASSETS
Current assets:
Cash $ 87,604
Inventory 12,934
Prepaid expenses 5,088
---------
Total current assets 105,626
Property and equipment, at cost, net of
accumulated depreciation of $11,181 276,000
Vehicles acquired from related party, at cost 75,000
Other assets 11,590
---------
$ 468,216
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 5,628
Accounts payable 42,803
Accrued expenses 21,791
Accrued salaries - officers 30,000
---------
Total current liabilities 100,222
Long-term debt 16,902
Stockholders' equity:
Common stock, $.01 par value,
100,000,000 shares authorized,
12,335,000 shares issue and outstanding 123,350
Additional paid-in capital 1,683,319
Unearned services (847,918)
Deficit accumulated during development stage (607,659)
---------
351,092
---------
$ 468,216
See accompanying notes to financial statements.
<PAGE>5
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Company)
Statement of Operations
Three Months Ended September 30, 1999
And For the Period From Inception (November 24, 1998)
to September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Inception
Ended To
September 30, September 30,
1999 1999
<S> <C> <C>
Sales $ 75,785 $ 76,883
Cost of sales 147,566 148,293
--------- ---------
Gross profit (71,781) (71,410)
General and administrative expenses:
Advertising expense 31,740 52,676
Amortization of service contracts 16,027 61,860
Compensation of officers 30,000 95,000
Printing costs 690 25,526
Professional fees 10,791 36,741
Salaries and wages 52,536 128,163
Travel expenses 1,267 30,010
Other 38,088 108,675
--------- ---------
Total 181,139 538,651
--------- ---------
Income (loss) from operations (252,920) (610,061)
Other income and (expense):
Interest expense (190) (380)
Other income 856 856
Interest income 104 1,926
--------- ---------
770 2,402
--------- ---------
Income before taxes (252,150) (607,659)
Income taxes - -
--------- ---------
Net income (loss) $ (252,150) $ (607,659)
Per share information:
Basic and diluted (loss) per share $ (0.02) $ (0.05)
Weighted average shares outstanding 12,256,667 11,208,417
</TABLE>
See accompanying notes to financial statements.
<PAGE>6
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Company)
Statement of Operations
Three Months Ended September 30, 1999
And For the Period From Inception (November 24, 1998) to September 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Three Months Inception
Ended To
September 30, September 30,
1999 1999
<S> <C> <C>
Net (loss) $ (252,150) $ (607,659)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 32,518 79,932
Common stock issued for services - 65,000
Changes in assets and liabilities:
(Increase) decrease in inventory 1,462 (12,934)
(Increase) in prepaid expenses 19,922 (5,088)
(Increase) in other assets 610 (11,590)
Increase in accounts payable and
accrued expenses 30,059 94,594
--------- ---------
Total adjustments 84,571 209,914
Net cash (used in)
operating activities (167,579 (397,745)
Cash flows from investing activities:
Acquisition of plant and equipment (3,301) (261,671)
Acquisition of vehicles from related party - (75,000)
--------- ---------
Net cash (used in) investing activities
investing activities (336,671)
Cash flows from financing activities:
Common stock sold for cash 135,000 825,000
Repayment of long-term debt (2,536) (2,980)
--------- ---------
Net cash provided by
financing activities 132,464 822,020
--------- ---------
Increase (decrease) in cash (38,416) 87,604
Cash and cash equivalents,
beginning of period 126,020 -
--------- --------- -
Cash and cash equivalents,
end of period $ 87,604 $ 87,604
</TABLE>
See accompanying notes to financial statements.
<PAGE>7
The Jarrett/Favre Driving Adventure, Inc.
Notes to Unaudited Financial Statements
September 30, 1999
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
provisions of Regulation SB. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. These
financial statements should be read in conjunction with
information provided in the Company's Registration Statement on
Form 10 that contains the Company's audited financial
statements for the period ended June 30, 1999.
The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the
full year.
Income (loss) per share was computed using the weighted average
number of common shares outstanding.
During the three months ended September 30, 1999, the Company
received gross proceeds from the sale of common stock
aggregating $135,000. The shares were sold at a price of $1.00
per share. Additionally, the Company recorded amortization of
personal service contracts amounting to $22,918 during the
three months ended September 30, 1999.
<PAGE>8
The Jarrett/Favre Driving Adventure, Inc.
PART I (cont.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations:
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.
There are no known trends, events or uncertainties that have or are
reasonably likely to have a material impact on the corporation's short
term or long term liquidity. Sources of liquidity both internal and
external will come from the sale of the corporation's products as well
as the private sale of the company's stock. There are no material
commitments for capital expenditure at this time. There are no trends,
events or uncertainties that have had or are reasonably expected to
have a material impact on the net sales or revenues or income from
continuing operations. There are no significant elements of income or
loss that do not arise from the Corporation's continuing operations.
There are no known causes for any material changes from period to
period in one or more line items of the corporation's financial
statements. The Corporation does not anticipate any seasonality for
its revenue stream.
The Corporation currently has classes planned through April of 2000.
The classes are scheduled for three(3) weekends per month. Thus far
there are over one hundred(100) students enrolled for these classes.
Capital and Source of Liquidity. The Corporation currently has no
material commitments for capital expenditures. The corporation has no
plans for future capital expenditures such as additional race cars at
this time.
The Corporation anticipates in addition to revenues to raise additional
capital to conduct operations during the next twelve(12) months. The
corporation intends to raise the necessary capital through the private
sale of stock. The Corporation believes that there will be sufficient
capital from revenues and the private sale of stock to conduct
operations for the next twelve(12) months.
Presently, the Corporation's revenue comprises fifty(50) percent of the
total cash necessary to conduct operations. The remaining fifty(50)
percent of the cash necessary to conduct operations will come from the
private sale of stock. Future revenues from classes and events will
determine the amount of offering proceeds necessary to continue
operations.
The board of directors has no immediate offering plans in place. The
board of directors shall determine the amount and type of offering as
the Corporation's financial situation dictates.
For the three months ended September 30, 1999, the Corporation acquired
plant and equipment of $3,301 resulting in net cash used in investing
activities of $3,301.
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 three months ended September 30, 1999, the Corporation sold
common stock for $135,000 and repaid $2,536 of long-term debt. As a
result, the Corporation had net cash provided by financing activities
of $132,464 for the three months ended September 30, 1999.
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.
<PAGE>9
Results of Operations. For the three months ended September 30,
1999, the Corporation had sales of $75,785 and cost of sales of
$147,566 resulting in gross profit of ($71,781).
For the three months ended September 30, 1999, the Corporation had
general and administrative expenses of $18;1,139. These expenses
consisted primarily of advertising of $31,740, amortization of service
contracts of $16,027, compensation of officers of $30,000, printing
costs of $690, professional fees of $10,791, salaries and wages of
$52,536, travel expenses of $1,267 and other expenses of $38,088.
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.
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.
As of the date of this filing, the Year 2000 issue has not had any
impact on the operations of the Company.
<PAGE>10
The Jarrett/Favre Driving Adventure, Inc.
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
None
(b) Reports on Form 8-K
None
SIGNATURE
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.
Date: /s/ Timothy Shannon
----------------------------
Timothy Shannon, President
January 12, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> SEP-30-1999
<CASH> 82,604
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 12,934
<CURRENT-ASSETS> 105,626
<PP&E> 276,000
<DEPRECIATION> 11,590
<TOTAL-ASSETS> 468,216
<CURRENT-LIABILITIES> 100,222
<BONDS> 0
<COMMON> 123,250
0
0
<OTHER-SE> 227,742
<TOTAL-LIABILITY-AND-EQUITY> 468,216
<SALES> 75,785
<TOTAL-REVENUES> 76,745
<CGS> 147,566
<TOTAL-COSTS> 145,566
<OTHER-EXPENSES> 181,139
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 190
<INCOME-PRETAX> (252,150)
<INCOME-TAX> 0
<INCOME-CONTINUING> (252,150)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (252,150)
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
