<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 March 31, 1999
--------------------
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
J R CONSULTING, INC.
----------------------------------------------------
(Exact name of small business issuer in its charter)
Nevada 13-3121128
- ------------------------------- -------------------
(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) 807-6994
---------------------------
(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
The number of shares outstanding of the issuer's Common Stock, $.04
par value per share, as of March 31, 1999, is 13,373,257.
Transitional Small Business Disclosure Format (check one);
YES NO X
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL INFORMATION
J R CONSULTING, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
03/31/99 06/30/98
(UNAUDITED) (AUDITED)
----------- ---------
$'000 $'000
----- -----
<S> <C> <C>
ASSETS
Current assets
Cash 1 41
Accounts receivable 1,055 659
Inventories 3 6
Other current assets 224 291
------- -------
Total current assets 1,283 997
Property plant and equipment, net of accumulated
depreciation of $111,000 and $58,000 at
03/31/99 and 06/30/98, respectively 456 323
Other assets
Goodwill and patents 746 794
Other assets 44 34
------- -------
Total other assets 790 828
Total assets 2,529 2,148
======= =======
LIABILITIES
Current liabilities
Overdraft 91 51
Accounts payable 875 542
Accrued liabilities 452 459
Other current liabilities 1,958 960
------- -------
Total current liabilities 3,376 2,012
Other liabilities
Debt payable after 12 months -- 279
------- -------
Total liabilities 3,376 2,291
SHAREHOLDERS' EQUITY
Common stock 535 535
Less 5,187,598 shares issued at discount below par value (154) (154)
Paid in Capital in excess of par value 3,276 3,276
Retained earnings (4,458) (3,750)
Unrealized loss on marketable securities (56) (56)
Translation adjustment 10 6
------- -------
Total shareholders' equity (847) (143)
------- -------
2,529 2,148
======= =======
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements
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<PAGE> 3
CONSOLIDATED FINANCIAL INFORMATION
J R CONSULTING, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
<TABLE>
<CAPTION>
3 MONTHS ENDED 9 MONTHS ENDED
--------------------------- ----------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
03/31/99 03/31/98 03/31/99 03/31/98
----------- ----------- ----------- -----------
$'000 $'000 $'000 $'000
----- ----- ----- -----
<S> <C> <C> <C> <C>
Sales 509 389 1,379 1,481
Cost of Sales -- 77 74 368
---------- ---------- ---------- ----------
Gross margin 509 312 1,305 1,113
SG&A expenses 708 554 1,944 1,603
Amortisation of goodwill & patents 15 15 46 46
---------- ---------- ---------- ----------
Operating profit (loss) (214) (257) (685) (536)
Loss (income) on equity investment -- -- -- (247)
Other loss (income) 14 - 18 (39)
Interest expense 2 7 5 8
---------- ---------- ---------- ----------
Pre-tax profit (loss) (230) (264) (708) (258)
Income tax expenses -- -- -- --
---------- ---------- ---------- ----------
Net income (loss) (230) (264) (708) (258)
========== ========== ========== ==========
Weighted average number of
common shares outstanding 13,373,257 11,695,899 13,373,257 11,534,473
Net loss per share of common stock $(0.02) $(0.02) $(0.05) $(0.02)
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements
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<PAGE> 4
CONSOLIDATED FINANCIAL INFORMATION
J R CONSULTING, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
(UNUADITED) (UNAUDITED)
9 MONTHS ENDED 9 MONTHS ENDED
03/31/99 03/31/98
--------------- --------------
$'000 $'000
----- -----
<S> <C> <C>
Operating activities
Net income (loss) (708) (544)
Depreciation & amortisation 105 155
Profit on sale of assets -- 247
Provision for losses -- 39
Decrease in inventory 3 (23)
Change in other net operating assets (70) (483)
Other 829 382
-------- -------
Net cash provided by (used in)
operating activities 159 (227)
Investing activities
Capital expenditures (199) (53)
-------- -------
Net cash provided by (used in)
investing activities (199) (53)
Financing activities
Proceeds from loans to be converted to stock -- 463
-------- -------
Net cash provided by (used in)
financing activities 0 463
-------- -------
Increase in cash (40) 183
Cash at July 1 41 20
Cash at March 31 1 203
</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
No income taxes were paid during the nine months ended March 31, 1999.
NOTE 3
The effects of non-cash investing and financing activities have been excluded
from the statement of cash flows in accordance with SFAS 95.
NOTE 4
Translation of these financial statements at March 31, 1999, is at the
mid-market rate of(pound)1 to $1.6142, and for the three months then ended, at
an average rate of(pound)1 to $1.6543.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The gross margin for the Issuer for the quarter ended March 31, 1998, is
substantially higher than the gross margin for the corresponding period in the
previous year ($509,000 compared with $312,000). Also the operating loss is
significantly lower for the quarter ended March 31, 1998 compared with the
operating loss for the corresponding period in the previous year ($214,000
compared with $257,000).
The gross margin for the nine months ended March 31, 1999, is higher than the
gross margin for the corresponding period in the previous fiscal year
($1,305,000 compared with $1,113,000). The operating loss is also higher by a
material margin for the nine months ended March 31, 1998, compared with the
operating loss for the corresponding period in the previous fiscal year
($685,000 compared with $536,000). Since Que was not in existence for the first
six months of the nine months ended March 31, 1998, any comparison of the
consolidated results of the Issuer between the two periods of nine months is
not indicative of the real performance of the Issuer.
The exceptional items in the nine months to March 31, 1998 make any comparison
of the Issuer's net losses for the nine months ended March 31, 1999 and 1998
meaningless. The nine months to March 31, 1998 have much better results because
of the exceptional items.
The performance of Benatone in both the last quarter and the nine months ended
March 31, 1998 revealed no clear direction when compared with the corresponding
periods in the previous year with losses being increased for the quarter by
$8,000 and reduced by $19,000 for the nine months. However these results are
not indicative of the real performance of the company. Benatone ceased trading
at the beginning of calendar year 1999. This was necessary because of the
damage done to the company (in both sales and financial terms) in two
consecutive years by allegations that the fuses used in its Simplug were faulty
and dangerous. In both years these allegations were proven to be wrong.
Nevertheless as a result of recommendations to the industry not to use any
electrical appliance using the fuses made by the company's manufacturer,
Benatone was unable to make any sales of its product during the peak period of
its annual business cycle. No alternative suppliers of fuses were viable
despite checking the market and evaluating the alternatives. Believing that the
problem created in the quarter ended December 31, 1997 would not be repeated,
management continued operating throughout calendar year 1998. When the problem
was repeated in the fiscal quarter ended December 31, 1998, and again the
allegations were proven to be wrong, management decided that it could not
continue to subsidise the lost sales that were not of its own making. Thus the
only change to the financial position of Benatone during the quarter ended
March 31, 1999 is the fixed and overhead SG&A expenses that the company could
not avoid during the quarter. These amounted to $38,000 but will be lower in
subsequent quarters. Thus sales have declined in the quarter ended March 31,
1999 compared with the corresponding period in the previous fiscal year by a
very large amount (no sales compared with $99,000). Similarly sales have
declined in the nine months ended December 31, 1998 compared with the
corresponding period in the previous fiscal year ($97,000 compared with
$465,000). The SG&A expenses in the quarter ended March 31, 1999 have declined
compared with the corresponding period in the previous fiscal year ($38,000
compared with $46,000 - including the reversal of an over provision of $38,000
in the previous year). Similarly SG&A expenses have declined in the nine months
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<PAGE> 7
ended March 31, 1999 compared with the corresponding period in the previous
fiscal year ($150,000 compared with $239,000). Nevertheless, management is
continuing to discuss production of a new plug, approved by the British
Standards Institution, in commercial quantities with the current manufacturers
and other possible manufacturers at a significantly lower cost. Providing this
can be achieved and the market improves, management will restart the business.
There can be no guarantee that these conditions will be met in the future in
which case alternative strategies will need to be found to avoid all ongoing
expenses.
The performance of Prima in the quarter ended March 31, 1999, showed a small
decline on the corresponding period in the previous year (an operating loss of
$12,000 compared with $8,000). The improvement in the nine months ended March
31, 1999 compared with corresponding period in the previous year was
significant (an operating loss of $17,000 compared with $107,000). The quarter
ended March 31, 1999 is different from the previous two fiscal quarters in that
the sales increased compared with the corresponding period in the previous year
($251,000 compared with $228,000). However sales remained significantly lower
for the nine months ended March 31, 1999 compared with the corresponding period
in the previous year ($703,000 compared with $953,000). Prima appears to have
reached a plateau where the SG&A expenses are no longer declining. With higher
sales there will be the inevitable increase in SG&A expenses. The SG&A expenses
were $224,000 for the quarter ended March 31, 1999 compared with $225,000 for
the corresponding period in the previous year. The SG&A expenses for the nine
months ended March 31, 1999 were $616,000 which is significantly lower than the
$1,025,000 for the corresponding period in the previous year. During the
quarter ended March 31, 1999, the premises were moved to Suite 710, 6100
Wilshire Boulevard, Los Angeles, California 90048. Even with this disruption,
during this quarter, sales were maintained at the levels of the previous year
and SG&A expenses did not rise compared with the previous year. Maintaining the
lower SG&A expenses and at the same time expanding sales remains the main task
of management.
The talent agency, Que Management, Inc., was started on January 5, 1998 in New
York and therefore a proper comparison of the nine months ende March 31, 1999
with the previous year is not possible. For the quarter ended March 31, 1999
the company has shown continued improvement compared with the previous year.
The sales have increased from $62,000 to $259,000. The SG&A expenses have also
increased but by proportionately less than the sales increase. The SG&A
expenses for the quarter ended March 31, 1999 were $279,000 compared with
$183,000 in the previous year. Although this improvement in the SG&A expenses
would be partly expected because there were some start-up costs in the previous
year, the overall result is very close to the forecast made by management. The
loss for the quarter ended March 31, 1999 is $32,000 compared with $121,000 in
the previous year. For the nine months ended March 31, 1999 the sales were
$578,000, the SG&A expenses were $838,000 and the net loss after interest
charges was $247,000. Management of Que is continuing to expand the sales while
keeping the expenses under control.
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<PAGE> 8
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES - None
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS - None
Item 5. OTHER INFORMATION - None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits - None
Reports on Form 8-K - None
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<PAGE> 9
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: August 5, 1999 By: /s/ Peter Zachariou
----------------------------------
Peter Zachariou, President
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 1
<SECURITIES> 0
<RECEIVABLES> 1,055
<ALLOWANCES> 103
<INVENTORY> 3
<CURRENT-ASSETS> 1,283
<PP&E> 456
<DEPRECIATION> 111
<TOTAL-ASSETS> 2,529
<CURRENT-LIABILITIES> 3,376
<BONDS> 0
0
0
<COMMON> 535
<OTHER-SE> (1,382)
<TOTAL-LIABILITY-AND-EQUITY> 2,529
<SALES> 97
<TOTAL-REVENUES> 1,379
<CGS> 74
<TOTAL-COSTS> 126
<OTHER-EXPENSES> 1,818
<LOSS-PROVISION> 3
<INTEREST-EXPENSE> 5
<INCOME-PRETAX> (708)
<INCOME-TAX> 0
<INCOME-CONTINUING> (708)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (708)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
