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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarterly Period Ended April 30, 1999.
Commission file number 0-6649
Jilco Industries, Inc.
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(Exact name of small business issuer as specified in its charter)
California 95-2075885
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 10539, Beverly Hills, California 90213
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(Address of principal executive offices) (Zip Code)
(310) 274-1986
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(Issuer's telephone number)
Not Applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No .
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449,991 shares of the issuer's common stock, no par value, are outstanding as
of April 30, 1999.
Transitional Small Business Disclosure Format:
Yes No X .
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ITEM 1.
JILCO INDUSTRIES, INC.
BALANCE SHEETS
JULY 31, 1998 (UNAUDITED) AND APRIL 30, 1999 (UNAUDITED)
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ASSETS
<TABLE>
<CAPTION>
April 30, July 31,
1999 1998
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<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,864 $ 2,049
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TOTAL CURRENT ASSETS $ 1,864 $ 2,049
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LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Note payable to shareholder $ 53,250 $ 53,250
Note payable 57,500 48,000
Accrued interest 65,143 58,222
Other accrued expenses 800 800
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Total current liabilities 176,693 160,272
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SHAREHOLDERS' DEFICIT
Common stock, no par value
1,500,000 shares authorized
449,991 shares issued and outstanding 749,950 749,950
Accumulated deficit (924,779) (908,173)
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Total shareholders' deficit (174,829) (158,223)
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TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 1,864 $ 2,049
=============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
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JILCO INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 1999 AND 1998 (UNAUDITED)
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<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
OPERATING EXPENSES
Professional fees $ - $ 19,240 $ 4,175 $ 25,993
Printer fees 1,220 1,538 3,647 12,432
Sundry 37 107 91 146
--------------- --------------- --------------- ----------------
Total operating expenses 1,257 20,885 7,913 38,571
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LOSS FROM OPERATIONS (1,257) (20,885) (7,913) (38,571)
OTHER EXPENSE
Interest expense (2,382) (1,904) (6,921) (4,918)
--------------- ---------------- --------------- ----------------
LOSS BEFORE PROVISION FOR INCOME
TAXES (3,639) (22,789) (14,834) (43,489)
PROVISION FOR INCOME TAXES - - 1,772 800
--------------- ---------------- --------------- ----------------
NET LOSS (3,639) (22,789) (16,606) (44,289)
ACCUMULATED DEFICIT, BEGINNING OF
PERIOD (921,140) (879,868) (908,173) (858,368)
--------------- ---------------- --------------- ---------------
ACCUMULATED DEFICIT, END OF PERIOD $ (924,779) $ (902,657) $ (924,779) $ (902,657)
=============== ================ =============== ===============
BASIC LOSS PER SHARE $ (0.01) $ (0.03) $ (0.04) $ (0.10)
=============== ================ =============== ================
DILUTED LOSS PER SHARE $ (0.01) $ (0.03) $ (0.04) $ (0.10)
=============== ================ =============== ================
WEIGHTED-AVERAGE COMMON SHARES
OUTSTANDING 449,991 449,991 449,991 449,991
=============== ================ =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
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JILCO INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 1999 AND 1998 (UNAUDITED)
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<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
April 30, April 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (3,639) $ (22,789) $ (16,606) $ (44,289)
Increase (decrease) in
Accrued interest 2,382 1,904 6,921 4,918
Other accrued expenses - - - 800
--------------- ---------------- --------------- ----------------
Net cash used in operating activities (1,257) (20,885) (9,685) (38,571)
--------------- ---------------- --------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 2,000 21,000 9,500 38,000
--------------- ---------------- --------------- ----------------
Net cash provided by financing
activities 2,000 21,000 9,500 38,000
--------------- ---------------- --------------- ----------------
Net increase (decrease) in cash and
cash equivalents 743 115 (185) (571)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 1,121 290 2,049 976
--------------- ---------------- --------------- ----------------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $ 1,864 $ 405 $ 1,864 $ 405
=============== ================ =============== ================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
INTEREST PAID $ - $ - $ - $ -
=============== ================ =============== ================
INCOME TAXES PAID $ - $ - $ - $ -
=============== ================ =============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
JILCO INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1998 (UNAUDITED) AND APRIL 30, 1999 (UNAUDITED)
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NOTE 1 - THE COMPANY
Jilco Industries, Inc. (the "Company") has been inactive since April 2,
1968 when it was discharged from bankruptcy under its previous name of
Sportways, Inc. The expenses the Company has incurred represent those
necessary to keep the Company in good standing in its state of
residence.
Fair Value of Financial Instruments
-----------------------------------
For certain of the Company's financial instruments including cash and
accrued expenses, the carrying amounts approximate fair value due to
their short maturities. The amounts shown as notes payable also
approximate fair value because current interest rates and terms offered
to the Company for notes payable of similar maturities are
substantially the same.
Cash and Cash Equivalents
-------------------------
For the purpose of reporting cash flows, the Company includes cash on
deposit, cash on hand, and financial instruments purchased with an
original maturity of three months or less to be cash equivalents.
Interim Financial Information
-----------------------------
The interim financial statements reflect all adjustments (which include
only the normal recurring adjustments) necessary for a fair
presentation of financial position, results of operations, and cash
flows for such periods. The results of operations for the nine months
ended April 30, 1999 are not necessarily indicative of the results that
may be expected for the entire year ending July 31, 1999, or any other
future periods.
Estimates
---------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the
reported amounts of expenses during the reporting period. Accordingly,
actual results could differ from those estimates.
Income Taxes
------------
The Company utilizes Statement of Financial Accounting Standards
("SFAS") No. 109, "Accounting for Income Taxes," which requires the
recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred income
taxes are recognized for the tax consequences in future years of
differences between the tax bases of assets and liabilities and their
financial reporting amounts at each period end based on enacted tax
laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the
amount expected to be realized. The provision for income taxes
represents the tax payable for the period and the change during the
period in deferred tax assets and liabilities.
4
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JILCO INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1998 (UNAUDITED) AND APRIL 30, 1999 (UNAUDITED)
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NOTE 2 - LOSS PER SHARE
The Company calculates basic loss per share using the weighted-average
number of shares outstanding for the period. Diluted loss per share
includes both the weighted-average number of shares and any common
share equivalents such as options or warrants in the calculation. As
the Company had no common share equivalents outstanding during any
periods presented, basic and diluted loss per share are the same.
NOTE 3 - NOTES PAYABLE TO SHAREHOLDER
Notes payable to shareholder consisted of the following:
<TABLE>
<CAPTION>
April 30, July 31,
1999 1998
--------------- ----------------
<S> <C> <C>
Revolving note payable, interest accrues at 9%
per annum. Principal and accrued interest
are due on demand. $ 40,000 $ 40,000
Revolving note payable, interest accrues at 11%
per annum. Principal and accrued interest
are due on demand. 8,250 8,250
Revolving note payable, interest accrues at 10%
per annum. Principal and accrued interest
are due on demand. 5,000 5,000
--------------- ----------------
TOTAL $ 53,250 $ 53,250
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</TABLE>
NOTE 4 - NOTE PAYABLE
The note payable is due on demand. Interest accrues at 8% per annum
and is payable on December 31 of each year.
5
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JILCO INDUSTRIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Registrant has not conducted any business operations during the last five
(5) fiscal years, except that during the above fiscal years it has incurred
expenses necessary to keep its good standing in its state of residence and to
comply with the periodic reporting requirements of the Exchange Act.
PART II. OTHER INFORMATION
None of Items 1 through 5 of Part II are applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
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27 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
JILCO INDUSTRIES, INC.
Date: June 11, 1999 /s/ Martha J. Kretzmer
---------------------------
Martha J. Kretzmer,
President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS OF THE QUARTER ENDED APRIL 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> FEB-01-1999
<PERIOD-END> APR-30-1999
<CASH> 1,864
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,864
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,864
<CURRENT-LIABILITIES> 176,693
<BONDS> 0
0
0
<COMMON> 749,950
<OTHER-SE> (924,779)
<TOTAL-LIABILITY-AND-EQUITY> 1,864
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,639
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,639)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,639)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,639)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
