<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission file number 2-78335-NY
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J R CONSULTING, INC.
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(Exact name of small business issuer in its charter)
Nevada 13-3121128
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
180 Varick Street, 13th Floor, New York, New York 10014
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(Address of principal executive offices)
(212) 807-6777
-----------------------------
(Issuer's telephone number)
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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 of 1934 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 NO X
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The number of shares outstanding of the issuer's Common Stock, $.04 par
value per share, as of September 30, 1997, is 11,544,955.
Transitional Small Business Disclosure Format (check one);
YES NO X
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<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
J R CONSULTING, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
9/30/97 06/30/97
(UNAUDITED) (AUDITED)
$'000 $'000
----------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash 21 20
Accounts receivable 539 503
Inventories 89 35
Other current assets 20 25
------ ------
Total current assets 669 583
Property plant and equipment, net of accumulated
depreciation of $45,000 and $40,000 at 9/30/97 and
06/30/97, respectively 152 157
Other assets
Goodwill and patents 841 855
------ ------
Total assets 1,662 1,595
====== ======
LIABILITIES
Current liabilities
Overdraft 121 --
Accounts payable 716 717
Accrued liabilities 449 526
Other current liabilities 569 639
------ ------
Total current liabilities 1,855 1,882
Long-term debt -- --
------ ------
Total liabilities 1,855 1,882
SHAREHOLDERS' EQUITY
Common Stock 527 513
Less 5,187,598 shares issued at discount below par
value (154) (154)
Paid in capital in excess of par value 2,765 2,516
Retained earnings (3,330) (3,162)
Translation adjustment (1) --
------ ------
Total shareholders' equity (193) (287)
------ ------
1,662 1,595
====== ======
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
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<PAGE> 3
J R CONSULTING, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
<TABLE>
<CAPTION>
3 MONTHS ENDED
(UNAUDITED) (UNAUDITED)
9/30/97 9/30/96
$'000 $'000
----------- -----------
<S> <C> <C>
Sales 521 449
Cost of sales 139 148
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Gross margin 382 301
SG&A expenses 534 606
Amortization of goodwill and patents 15 15
----------- -----------
Operating profit (loss) (167) (320)
Loss on equity investment -- --
Interest expense 1 --
----------- -----------
Pre-tax profit (loss) (168) (320)
Income tax expenses -- --
----------- -----------
Net income (loss) (168) (320)
=========== ===========
Weighted average number of
common shares outstanding 11,211,622 10,978,288
Net loss per share of common stock $ (0.01) $ (0.03)
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
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<PAGE> 4
J R CONSULTING, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
3 MONTHS ENDED 3 MONTHS ENDED
9/30/97 9/30/96
$'000 $'000
----------------------------------
<S> <C> <C>
Operating activities
Net income (loss) (168) (320)
Depreciation and amortization 21 23
Decrease in inventory (54) 60
Change in other net operating assets (114) 240
Other 60 --
-------- --------
Net cash provided by (used in) operating activities (255) 3
Investing activities (7) (5)
Capital expenditures
-------- --------
Net cash provided by (used in) investing activities (7) (5)
Financing activities
Proceeds from stock -- --
Proceeds from loans to be converted to stock 263 23
-------- --------
Net cash provided by (used in) financing activities 263 23
-------- --------
Increase in cash 1 21
Cash at July 1 20 35
Cash at March 31 21 56
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
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<PAGE> 5
J R CONSULTING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1
The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. 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 considered necessary for a fair presentation have
been included, and such adjustments are of a normal recurring nature. Results
for interim periods should not be considered indicative of results for any other
interim period or for future years.
NOTE 2
On September 25, 1997, J R Consulting, Inc. raised $29,150 in exchange for
55,000 restricted shares of J R Consulting, Inc. common stock that may not be
publicly sold prior to October 26, 1998. The stock had not been issued as at
September 30, 1997.
NOTE 3
No income taxes were paid during the three months ended September 30, 1997.
NOTE 4
The effects of non-cash investing and financing activities have been excluded
from the statement of cash flows in accordance with SFAS 95.
NOTE 5
Translation of these financial statements at September 30, 1997, is at the
mid-market rate of (pound)1 to $1.615, and for the three months then ended, at
an average rate of (pound)1 to $1.625.
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<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The gross margin for the Registrant for the fiscal quarter ended September 30,
1997, is significantly better than the corresponding period in the previous
fiscal year ($382,000 compared with $301,000). The operating loss is
significantly lower for the fiscal quarter ended September 30, 1997, compared
with the operating loss for the corresponding period in the previous fiscal year
($168,000 compared with $320,000).
The performance of Benatone Limited ("Benatone") in the fiscal quarter ended
September 30, 1997, showed a significant improvement from the corresponding
period in the previous year (a loss of $60,000 compared with $90,000). This is
primarily the result of continued efforts to control unnecessary expenditure
which is well demonstrated by a reduction of SG&A expenses from $142,000 in the
fiscal quarter ended September 30, 1996, to $93,000 in the fiscal quarter ended
September 30, 1997. However, these expenses were reduced, in part, as a result
of Benatone losing sales to cheap imports from the less developed countries,
particularly in the assembly work for other parties. A comparison of the same
periods reveals that sales actually declined from $200,000 to $172,000.
Management is addressing this problem but it is not expected that this problem
will be resolved quickly.
The performance of Prima in the fiscal quarter ended September 30, 1997, also
showed a significant improvement on the corresponding period in the previous
year (a loss of $72,000 compared with $112,000). This is primarily the result of
a concerted effort to increase sales with the introduction of an entirely new
management team during the fiscal quarter ended September 30, 1996. The sales
have increased from $249,000 in the fiscal quarter ended September 30, 1996 to
348,000 in the fiscal quarter ended September 30, 1997. As should be expected,
this was achieved at a cost of significantly increased selling costs that
increased from $74,000 to $110,000 over the same period. The general and
administration expenses have also increased over this period but proportionately
by a much smaller amount. They increased from $274,000 in the fiscal quarter
ended September 30, 1996, to $299,000 in the fiscal quarter ended September 30,
1997. Bearing in mind the dramatic cost cutting action that took place after
management of the Registrant became involved with the oversight of the
operations of Prima, it is not surprising that the general and administration
expenses did increase. It is the intention of management to insure that they are
never allowed to spiral to the levels reached under the previous management.
Following the acquisitions in the fiscal year ended June 30, 1996, the
Registrant concentrated on improving the performance of its subsidiaries to
consolidate its position without further acquisitions. As demonstrated by the
financial results explained for the fiscal quarters ended September 30, 1996 and
1997, the improvement has not yet yielded the results required by the
Registrant. However, the successes so far achieved is encouraging and the
Registrant is continuing to review all of its operations, keep capital
expenditure to a minimum and search for ways of to improve the performance of
each subsidiary. This process is expected to continue and includes the
requirement of each subsidiary to continue a program of eliminating unnecessary
expenditure and attempting to increase sales.
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<PAGE> 7
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
(c) During the fiscal quarter ended September 30, 1997, the Registrant
sold equity securities in the following transactions that were not
registered pursuant to the Securities Act of 1933, as amended (the
"Securities Act"):
(1) On September 25, 1997, the Registrant sold 55,000 shares of
its common stock for $29,150 to an entity that is not a "U.S.
Person," as that term is defined in Regulation S promulgated
pursuant to the Securities Act ("Regulation S"), in a
transaction that occurred outside the United States of
America. The Registrant relied upon the exclusion provided by
Regulation S from the registration requirements of the
Securities Act in consummating this transaction.
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<PAGE> 8
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.
J R CONSULTING, INC.
Date: May 15, 1998 By: /s/ Peter Zachariou
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Peter Zachariou, President
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF J. R. CONSULTING INC. FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 21
<SECURITIES> 20
<RECEIVABLES> 539
<ALLOWANCES> 58
<INVENTORY> 89
<CURRENT-ASSETS> 669
<PP&E> 152
<DEPRECIATION> 5
<TOTAL-ASSETS> 1,662
<CURRENT-LIABILITIES> 1,855
<BONDS> 0
0
0
<COMMON> 527
<OTHER-SE> (720)
<TOTAL-LIABILITY-AND-EQUITY> 1,662
<SALES> 172
<TOTAL-REVENUES> 521
<CGS> 139
<TOTAL-COSTS> 121
<OTHER-EXPENSES> 408
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> (168)
<INCOME-TAX> 0
<INCOME-CONTINUING> (168)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (168)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
