SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended: March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to
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Commission file number 0-13215
JNS MARKETING. INC.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-0940146
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(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
10200 W. 44th Avenue, Suite 400, Wheat Ridge, CO 80033
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Address of principal executive offices)
(303) 292-3883
---------------
(Issuer's telephone number)
1050 17th Street, Suite 1700 Denver, Colorado 80265
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the registrant (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 X No
As of March 31, 1999, 251,822 shares of common stock were outstanding.
Transitional Small Business Disclosure Format: Yes No X
<PAGE>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
For financial information, please see the financial statements and the
notes thereto, attached hereto and incorporated herein by this reference.
The financial statements have been prepared by JNS Marketing, Inc.
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted as allowed by such rules
and regulations, and management believes that the disclosures are adequate to
make the information presented not misleading. These financial statements
include all of the adjustments which, in the opinion of management, are
necessary to a fair presentation of financial position and results of
operations. All such adjustments are of a normal and recurring nature. These
financial statements should be read in conjunction with the audited financial
statements at September 30, 1998, included in the Company's Form 10-KSB.
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
JNS Marketing, Inc.
BALANCE SHEET
MARCH 31, 1999
(Unaudited)
ASSETS Year
Ended
March 31, Sept 30,
1999 1998
<S> <C> <C>
CURRENT ASSETS
CASH $3,116.38 3,246.00
------------------------- ----------------------
TOTAL CURRENT ASSETS 3,116.38 3,246.00
------------------------- ----------------------
TOTAL ASSETS $3,116.38 $3,246.00
========================= ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
========================= ======================
CURRENT LIABILITIES
ACCOUNTS PAYABLE 9,620.19 300.00
Due Shareholders 0 3,915.00
------------------------- ----------------------
TOTAL CURRENT LIABILITIES 9,620.19 4,215.00
------------------------- ----------------------
SHAREHOLDER ADVANCES 9,250.19 9,250.00
========================= ======================
STOCKHOLDERS' EQUITY
COMMON STOCK 932,372.00 932,372
RETAINED EARNINGS - PRIOR (942,591.26)
RETAINED EARNINGS - CURRENT YEAR (5,534.55) (942,491)
------------------------- ----------------------
TOTAL STOCKHOLDERS' EQUITY (15,753.81) (10,219)
------------------------- ----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,116.38 $3,246.00
========================= ======================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNS Marketing, Inc.
STATEMENT OF OPERATIONS
FOR QUARTER ENDED MARCH 31
(Unaudited)
1999 1998
----------------------------- ----------------------------
<S> <C> <C>
REVENUES $0 $0
EXPENSES:
General & Administrative 5,403.15 2,409.00
----------------------------- ----------------------------
Total Expenses 5,403.15 2,409.00
----------------------------- ----------------------------
Loss from Operations (5,403.15) (2,409.00)
----------------------------- ----------------------------
Earnings Before Income Tax (5,403.15) (2,409.00)
----------------------------- ----------------------------
Net Income (Loss) (5,403.15) (2,409.00)
============================= ============================
Loss per share (.02) (.01)
Weighted Average Number of Shares 251,822 251,822
============================= ============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNS Marketing, Inc.
STATEMENT OF OPERATIONS
FOR SIX MONTH PERIOD ENDED MARCH 31
(Unaudited)
1999 1998
----------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES $0 $0
EXPENSES:
General & Administrative 5,534.55 5,724.00
----------------------------- ----------------------------
Total Expenses 5,534.55 5,724.00
----------------------------- ----------------------------
Loss from Operations (5,534.55) (5,724.00)
----------------------------- ----------------------------
Earnings Before Income Tax (5,534.55) (5,724.00)
----------------------------- ----------------------------
Net Income (Loss) (5,534.55) (5,724.00)
============================= ============================
Net Loss Per Common Share (.02) (.02)
Weighted Average Number of Shares 251,822 251,822
============================= ============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
JNS Marketing, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Six months Six months
ended March Ended March
31, 1999 31, 1998
(unaudited) (unaudited)
------------------------------ -------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net Income (loss) (5,534) (5,724)
Change in assets and Liabilities:
Increase (decrease) in accounts
payable 5,405 4,500
------------------------------ -------------------------------
Net cash used by operating
activities (130) (1,224)
------------------------------ -------------------------------
Cash flows from financing activities:
Proceeds received from issuance of
stock 0 0
Payments on cancellation on stock
redemption 0 0
Net cash provided by financing
activities 0 0
------------------------------ -------------------------------
Net increase in cash (130) (1,224)
Cash, beginning of period 3,246 2,138
------------------------------ -------------------------------
Cash, end of period $3,116 $914
============================== ===============================
</TABLE>
<PAGE>
JNS Marketing, Inc.
Notes to Financial Statements
March 31, 1999
(unaudited)
Note 1. Organization and Summary of Significant Accounting
Policies.
The Company was incorporated in Colorado on July 15, 1983. The Company is in its
development stage and to date its activities have been limited to organization
and capital formation. The Company was organized to search for and obtain, on a
buyout basis or a right-to-market basis, products which will be sold to the
general public primarily through the television media; and to engage in any
activity or business not in conflict with the laws of the State of Colorado or
of the United States of America.
During March 1999, the Company effected a 1 share for 100 shares reverse stock
split. All share and per share amounts in the foregoing financial statements and
the accompanying notes have been restated to give effect to the reverse stock
split.
Loss per share:
Basic Earnings per Share ("EPS") is computed by dividing net income available to
common stockholders by the weighted average number of common stock shares
outstanding during the year. Diluted EPS is computed by dividing net income
available to common stockholders by the weighted-average number of common stock
shares outstanding during the year plus potential dilutive instruments such as
stock options and warrants. The effect of stock options on diluted EPS is
determined through the application of the treasury stock method, whereby
proceeds received by the Company based on assumed exercises are hypothetically
used to repurchase the Company's common stock at the average market price during
the period. Loss per share is unchanged on a diluted basis since the assumed
exercise of common stock equivalents would have an anti-dilutive effect.
Cash:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.
Estimates:
The preparation of the Company's financial statements requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from these
estimates.
<PAGE>
Fair value of financial instruments
- -----------------------------------
The Company's short-term financial instruments consist of cash and cash
equivalents and accounts payable. The carrying amounts of these financial
instruments approximates fair value because of their short-term maturities.
Financial instruments that potentially subject the Company to a concentration of
credit risk consist principally of cash.
During the year the Company did not maintain cash deposits at financial
institutions in excess of the $100,000 limit covered by the Federal Deposit
Insurance Corporation. The Company does not hold or issue financial instruments
for trading purposes nor does it hold or issue interest rate or leveraged
derivative financial instruments.
Stock-based Compensation
- ------------------------
The Company adopted Statement of Financial Accounting Standard No. 123 (FAS
123), Accounting for Stock-Based Compensation beginning with the Company's first
quarter of 1996. Upon adoption of FAS 123, the Company continued to measure
compensation expense for its stock-based employee compensation plans using the
intrinsic value method prescribed by APB No. 25, Accounting for Stock Issued to
Employees. No stock based compensation was paid by the Company during the years
ended September 30, 1998 and 1997, respectively, or through March 31, 1999.
New Accounting Pronouncements
- -----------------------------
SFAS No. 130, "Reporting Comprehensive Income," establishes guidelines for all
items that are to be recognized under accounting standards as components of
comprehensive income to be reported in the financial statements. The statement
is effective for all periods beginning after December 15, 1997 and
reclassification financial statements for earlier periods will be required for
comparative purposes. To date, the Company has not engaged in transactions which
would result in any significant difference between its reported net loss and
comprehensive net loss as defined in the statement.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use ("SOP 98-1"). SOP 98-1 provides
authoritative guidance on when internal-use software costs should be capitalized
and when these costs should be expensed as incurred.
Effective in 1998, the Company adopted SOP 98-1, however the Company has not
incurred costs to date which would require evaluation in accordance with the
SOP.
<PAGE>
Effective December 31, 1998, the Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS 131"). SFAS 131
superseded SFAS No. 14, Financial Reporting for Segments of a Business
Enterprise. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. SFAS 131 also establishes
standards for related disclosures about products and services, geographic areas,
and major customers. The adoption of SFAS 131 did not affect results of
operations or financial position. To date, the Company has not operated in its
one planned business activity.
Effective December 31, 1998, the Company adopted the provisions of SFAS No. 132,
Employers' Disclosures about Pensions and Other Post-retirement Benefits ("SFAS
132"). SFAS 132 supersedes the disclosure requirements in SFAS No. 87,
Employers' Accounting for Pensions, and SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions. The overall objective of SFAS 132
is to improve and standardize disclosures about pensions and other
post-retirement benefits and to make the required information more
understandable. The adoption of SFAS 132 did not affect results of operations or
financial position.
The Company has not initiated benefit plans to date which would require
disclosure under the statement.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), which
is required to be adopted in years beginning after June 15, 1999. SFAS 133 will
require the Company to recognize all derivatives on the balance sheet at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income. If the derivative is a hedge, depending on the nature of the hedge,
changes in the fair value of derivatives will either be offset against the
change in fair value of hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The Company has not yet
determined what the effect of SFAS 133 will be on earnings and the financial
position of the Company, however it believes that it has not to date engaged in
significant transactions encompassed by the statement.
Note 2. Income taxes
The Company has adopted the flow-through method of accounting for tax credits.
Under this method, the current provision for income taxes is reduced by the
amount of the credits applied against tax otherwise payable. No provision for
income taxes was required at September 30, 1998 and 1997 due to losses from
operations. The Company has recognized net losses of $12,357 and $2,092 for
<PAGE>
fiscal years 1998 and 1997 respectively, and accumulated net losses from
inception (July 15, 1983) to date of $942,591, which expire at varying dates
between the years 2001 and 2011. There were no previous earnings to which losses
may be carried back and there are no recorded income tax deferrals to be
eliminated. The Company had taxable income of $15,551 at September 30, 1993
which resulted in income tax recognition of $2,333. The income tax was
eliminated in full by recognition of the tax benefit of the Company's prior
years accumulated net operating loss. The deferred tax asset resulting from the
operating loss carry forward described above is estimated to be approximately
$320,500 has been fully reserved. The reserve increased by approximately $4,200
and $700 during the years ended September 30, 1998 and 1997 respectively.
Note 3. Agreement and plan of reorganization
On or about May 22, 1994 the Company entered into a plan of reorganization (the
"Agreement") with Cedar Pacific Golf Properties ("CPGP"), a Nevada corporation
whereby the Company acquired 100% of the issued and outstanding stock of CPGP
and $34,550 in exchange for 229,386 shares of the Company's no par value common
stock. This Agreement was subsequently rescinded July 2, 1997 (See Note 4).
Note 4. Stockholders' Equity.
During the periods covered by these financial statements the Company issued
certain of its securities in reliance upon an exemption from registration with
the Securities and Exchange Commission. Although the Company believes that the
sales did not involve a public offering and that it did comply with the
exemptions from registration, it could be liable for rescission of said sales if
such exemption was found not to apply. The Company has not received a request
for rescission of shares nor does it believe that it is probable that its
shareholders would pursue rescission nor prevail if such action were undertaken
Recission agreement
- -------------------
On July 2, 1997, the Company entered into a recission agreement with CPGP Group
in which CPGP relinquished control of the Company by returning 229,386 shares of
the Company stock acquired pursuant to the Plan of reorganization discussed in
Note 4. CPGP received $49,865 for the redemption and cancellation of the shares.
Stock purchase agreement
- ------------------------
On July 2, 1997, the Company entered into stock purchase agreement in which
several individuals purchased 229,386 newly-issued shares of the Company's no
par common stock for $70,000. Control of the Company changed as a result of this
transaction.
<PAGE>
Note 5. Related party transactions
During the year ended September 30, 1998, an individual who is an officer and
significant shareholder of the Company paid an aggregate of $11,238 in general
and administrative expenses in behalf of the Company of which $3,915 remained
unpaid at that date The individual also provides office services for the Company
without charge.
During the year ended September 30, 1998, four of the Company's principal
shareholders made working capital advances to the Company in the amount of
$9,250. The advances are non interest bearing and are due on demand, however,
they were repaid after quarter ended March 31, 1999.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- ------------------------------------------------------------------
Results of Operations for the Quarter Ended March 31, 1999
- ----------------------------------------------------------
The Company had no revenue or operations for the period. The Company
incurred a total of $5,403 in general and administrative expenses in the period
in 1999 as compared to $2,409 in general and administration expenses in the same
period in 1998. The Company had a net loss for the period in 1999 of ($5,403) as
compared to a loss of ($2,409) in the period in 1998.
Results of Operations for the Six Month Period Ended March 31, 1999
- -------------------------------------------------------------------
The Company had no revenue or operations for the six month period ended
March 31, 1999. The Company incurred $5,534 in general and administrative
expenses for the six month period ended March 31, 1999 compared to 45,724 in
general and administrative expenses in the same period ended March 31, 1998. The
Company incurred a net loss of ($5,534) for the six month period ended March 31,
1999 as compared to a net loss of ($5,724) for the six month period ended March
31, 1998.
(a) Plan of Operation. JNS Marketing, Inc. (the "Company") intends to
seek to acquire assets or shares of an entity actively engaged in business which
generates revenues, in exchange for its securities. The Company has no
particular acquisitions in mind and has not entered into any negotiations
regarding such an acquisition. As of the date of this report, the Company has no
plans, arrangements, understandings or commitments with respect to any potential
merger or acquisition, nor is the Company engaged in negotiations with respect
to such matter.
If required to so do under relevant law, management of the Company will
seek shareholder approval of a proposed merger or acquisition via a Proxy
Statement. However, such approval would be assured where management supports
such a business transaction because management presently controls sufficient
shares of the Company to effectuate a positive vote on the proposed transaction.
Further, a prospective transaction may be structured so that shareholder
approval is not required, and such a transaction may be effectuated by the Board
of Directors without shareholder approval. While any disclosure which may be
provided to shareholders may include audited financial statements of such a
target entity, there is no assurance that such audited financial statements will
be available. The Board of Directors does intend to obtain certain assurances of
value of the target entity assets prior to consummating such a transaction, with
further assurances that an audited statement would be provided within 60 days
after closing of such a transaction. Closing documents relative thereto will
include representations that the value of the assets conveyed to or otherwise so
<PAGE>
transferred will not materially differ from the representations included in such
closing documents, or the transaction will be voidable.
(b) Liquidity and Capital Resources. At March 31,1999, the Company had
minimal cash or other assets with which to conduct operations. There can be no
assurance that the Company will be able to complete its business plan and to
exploit fully any business opportunity that management may be able to locate on
behalf of the Company. Due to the lack of a specified business opportunity, the
Company is unable to predict the period for which it can conduct operations.
Accordingly, the Company will need to seek additional financing through loans,
the sale and issuance of additional debt and/or equity securities, or other
financing arrangements. Management of the Company and its counsel have advised
that they will pay certain costs and expenses of the Company from their personal
funds as interest free loans in order to facilitate development of the Company's
business plan. Management believes that the Company has inadequate working
capital to pursue any operations at this time; however, loans to the Company
from management and its counsel may facilitate development of the business plan.
For the foreseeable future, the Company through its management and counsel
intend to pursue acquisitions as a means to develop the Company. The Company
does not intend to pay dividends in the foreseeable future. As of the end of the
reporting period, the Company had no material cash or cash equivalents. There
was no significant change in working capital during this quarter.
(c) Year 2000 issues "Year 2000 problems" result primarily from the
inability of some computer software to properly store, recall or use data after
December 31, 1999. The Company is engaged primarily in organizational and fund
raising activities and accordingly, does not rely on information technology
("IT") systems. Accordingly the Company does not believe that it will be
materially affected by Year 2000 problems. The Company relies on non-IT systems
that may suffer from Year 2000 problems including telephone systems, facsimile
and other office machines. Moreover, the Company relies on third-parties that
may suffer from Year 2000 problems that could affect the Company's operations
including banks and utilities. In light of the Company's minimal operations, the
Company does not believe that such non-IT systems or third-party Year 2000
problems will affect the Company in a manner that is different or more
substantial than such problems affect other similarly situated companies.
Consequently, the Company does not currently intend to conduct a readiness
assessment of Year 2000 problems or develop a detained contingency plan with
respect to Year 2000 problems that may affect the Company or third-parties.
The foregoing is a "Year 2000 Readiness Disclosure" within the meaning
of the Year 2000 Information and Readiness Disclosure Act of 1998.
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
- --------------------------
There are no pending legal proceedings, and the Company is not aware of any
threatened legal proceedings, to which the Company is a party or to which its
property is subject.
Item 2. Changes in Securities.
- ------------------------------
(a) There have been no material modifications in any of the instruments
defining the rights of the holders of any of the Company's registered
securities.
(b) None of the rights evidenced by any class of the Company's
registered securities have been materially limited or qualified by the issuance
or modification of any other class of the Company's securities.
Item 3. Defaults Upon Senior Securities.
- ----------------------------------------
(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
(Not applicable)
Item 5. Other Information.
- --------------------------
(Not applicable)
Item 6. Exhibits and Reports on Form 8-K.
- -----------------------------------------
(a) Exhibits
No exhibits as set forth in Regulation SB, are considered necessary for
this filing.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which this
report is filed.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
JNS MARKETING, INC.
Date: July 1, 1999
------------------------------
Walter Galdenzi, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 3116
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3116
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3116
<CURRENT-LIABILITIES> 9620
<BONDS> 0
0
0
<COMMON> 932,372
<OTHER-SE> (948,125)
<TOTAL-LIABILITY-AND-EQUITY> 3116
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5403
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5403)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5403)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5403)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
