<PAGE> 1
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 January 31, 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 [ ]
449,991 shares of the issuer's common stock, no par value, are outstanding
as of January 31, 1999.
Transitional Small Business Disclosure Format:
Yes [ ] No [X]
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PART I. FINANCIAL INFORMATION
JILCO INDUSTRIES, INC.
BALANCE SHEETS
JULY 31, 1998 (UNAUDITED) AND JANUARY 31, 1999 (UNAUDITED)
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<TABLE>
<CAPTION>
ASSETS
January 31, July 31,
1999 1998
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<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,121 $ 2,049
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TOTAL CURRENT ASSETS $ 1,121 $ 2,049
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Note payable to shareholder $ 53,250 $ 53,250
Note payable 55,500 48,000
Accrued interest 62,761 58,222
Other accrued expenses 800 800
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Total current liabilities 172,311 160,272
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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 (921,140) (908,173)
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Total shareholders' deficit (171,190) (158,223)
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TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 1,121 $ 2,049
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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JILCO INDUSTRIES, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 1999 AND 1998 (UNAUDITED)
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<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
----------------------- -----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING EXPENSES
Professional fees $ 1,963 $ 397 $ 4,175 $ 6,753
Printer fees 2,427 10,894 2,427 10,894
Sundry 27 21 54 39
--------- --------- --------- ---------
Total operating expenses 4,417 11,312 6,656 17,686
--------- --------- --------- ---------
LOSS FROM OPERATIONS (4,417) (11,312) (6,656) (17,686)
OTHER EXPENSE
Interest expense (2,307) (1,592) (4,539) (3,014)
--------- --------- --------- ---------
LOSS BEFORE PROVISION FOR INCOME
TAXES (6,724) (12,904) (11,195) (20,700)
PROVISION FOR INCOME TAXES 972 -- 1,772 800
--------- --------- --------- ---------
NET LOSS (7,696) (12,904) (12,967) (21,500)
ACCUMULATED DEFICIT, BEGINNING OF
PERIOD (913,444) (866,964) (908,173) (858,368)
--------- --------- --------- ---------
ACCUMULATED DEFICIT, END OF PERIOD $(921,140) $(879,868) $(921,140) $(879,868)
========= ========= ========= =========
BASIC LOSS PER SHARE $ (0.02) $ (0.03) $ (0.03) $ (0.05)
========= ========= ========= =========
DILUTED LOSS PER SHARE $ (0.02) $ (0.03) $ (0.03) $ (0.05)
========= ========= ========= =========
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.
<PAGE> 4
JILCO INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 1999 AND 1998 (UNAUDITED)
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<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
January 31, January 31,
--------------------- ---------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,696) $(12,904) $(12,967) $(21,500)
Increase (decrease) in
Accrued interest 2,307 1,592 4,539 3,814
Other accrued expenses (800) -- -- --
-------- -------- -------- --------
Net cash used in operating activities (6,189) (11,312) (8,428) (17,686)
-------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 5,500 10,000 7,500 17,000
-------- -------- -------- --------
Net cash provided by financing
activities 5,500 10,000 7,500 17,000
-------- -------- -------- --------
Net decrease in cash and cash
equivalents (689) (1,312) (928) (686)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 1,810 1,602 2,049 976
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $ 1,121 $ 290 $ 1,121 $ 290
======== ======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
INTEREST PAID $ -- $ -- $ -- $ --
======== ======== ======== ========
INCOME TAXES PAID $ -- $ -- $ -- $ --
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
JILCO INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1998 (UNAUDITED) AND JANUARY 31, 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 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 three months ended January
31, 1998 and 1997 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 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.
<PAGE> 6
JILCO INDUSTRIES, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1998 (UNAUDITED) AND JANUARY 31, 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>
January 31, July 31,
1999 1998
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<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
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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.
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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) Reports on Form 8-K
No materially important events occurred during the quarterly
period that would require filing of Form 8-K.
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: March 12, 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 FOR THE QUARTER ENDED JANUARY 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> JAN-31-1999
<CASH> 1,121
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,121
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,121
<CURRENT-LIABILITIES> 172,311
<BONDS> 0
0
0
<COMMON> 749,950
<OTHER-SE> (921,140)
<TOTAL-LIABILITY-AND-EQUITY> 1,121
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,724
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,724)
<INCOME-TAX> 972
<INCOME-CONTINUING> (7,696)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,696)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
