FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to _______________________
Commission file number 0-15355
J.A.M., INC.
(Exact name of registrant as specified in its charter)
NEW YORK 16-1092174
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
530 WILLOWBROOK OFFICE PARK, FAIRPORT, NEW YORK 14450
(Address of principal executive offices)
(716) 385-6740
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13
or 15 (d) of the Securities and Exchange Act of 1934 during the preceding 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 __________
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the
latest practicable date.
SEPTEMBER 30, 1996: 15,274,447 SHARES.
-1-
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
J.A.M., INC.
Balance Sheets
As of September 30, 1996 with Comparative Amounts for December 31, 1995
________________________________________________________________________
<TABLE>
<CAPTION>
9/30/96 12/31/95
<S> <C> <C>
(UNAUDITED) (AUDITED)
Current Assets:
Cash and cash equivalents $ 3,857 $ 4,705
Trade accounts receivable, less allowance for
doubtful accounts of $1,797 in 1996 and 1995 349,965 288,126
Inventories 4,361 2,988
Prepaid expenses 12,961 6,380
Employee receivables 3,925
-
Total current assets 375,069 302,199
Property, plant and equipment 932,827 729,440
Less: accumulated depreciation and amortization 591,675 560,631
Net property, plant and equipment 341,152 168,809
Other assets:
Deposits 12,158 11,219
$ 728,379 $ 482,227
</TABLE>
See accompanying notes to financial statements
-2-
J.A.M., INC.
Balance Sheets
As of September 30, 1996 with Comparative Amounts for December 31, 1995
__________________________________________________________________________
<TABLE>
<CAPTION>
9/30/96 12/31/95
<S> <C> <C>
(UNAUDITED) (AUDITED)
Current Liabilities:
Demand note - bank $ - $ 100,000
Demand note - others 150,000 190,000
Current portion of long-term debt 50,000
-
Current portion of capital lease obligation 50,090
-
Loan - officer 74,534 146,175
Payroll taxes payable 46,004
-
Accounts payable - trade 188,802 87,535
Accrued income tax - 349
Accrued expenses 137,597 138,975
Total current liabilities 697,027 663,034
Long-Term Liabilities:
Long-term portion of bank debt 70,831
-
Long-term portion of capital lease obligation 65,709
-
Total long-term liabilities 136,540
-
Stockholders' Deficit:
Common stock, $.01 par value.
Authorized 16,000,000 shares; issued and
outstanding 15,274,447 shares in 1996 and 1995 152,745 152,745
Additional paid-in capital 3,147,227 3,147,227
Accumulated deficit (3,405,160) (3,480,779)
Total stockholders deficit (105,188) (180,807)
$ 728,379 $ 482,227
</TABLE>
See accompanying notes to financial statements
-3-
J.A.M., INC.
Statements of Operations
For the Nine-Month Interim Period Ended
September 30, 1996 with Comparative Amounts to September 30, 1995
____________________________________________________________________
<TABLE>
<S> <C> <C> <C> <C>
QUARTER QUARTER NINE NINE
ENDED ENDED MONTHS MONTHS
9/30/96 9/30/95 9/30/96 9/30/95
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
Net sales $ 512,734 $ 461,485 $ 1,774,084 $ 1,132,401
Cost of sales 382,875 228,264 1,046,230 587,941
Gross profit $ 129,859 $ 233,221 $ 727,854 $ 544,460
Selling, general and administrative
expenses 211,583 147,652 609,755 416,701
Operting profit (loss) $ (81,724) $ 85,569 $ 118,099 $ 127,759
Other income (expense):
Gain/loss on disposal of asset 5,000
- - -
Interest income
- - -
Interest expense (12,879) (16,203) (42,480) (49,511)
(12,879) (16,203) (42,480) (44,511)
Net earnings (loss)
before income taxes $ (94,603) $ 69,366 $ 75,619 $ 83,248
Income taxes
- - - -
Net earnings (loss) $ (94,603) $ 69,366 $ 75,619 $ 83,248
Net earnings (loss) per common
share based upon the weighted
average common shares oustanding
during each period $ (0.01) $ 0.01 $ (0.01) $ 0.01
Weighted average number of shares 15,274,447 12,274,447 15,274,447 12,274,447
</TABLE>
See accompanying notes to financial statements
-4-
J. A.M., INC.
Statements of Cash Flows
For the Nine-Month Interim Period Ended
September 30, 1996 with Comparative Amounts to September 30, 1995
_____________________________________________________________________
<TABLE>
<S> <C> <C>
NINE NINE
MONTHS MONTHS
ENDED ENDED
9/30/96 9/30/95
(UNAUDITED) (UNAUDITED)
Cash flow from operating activities:
Net earnings (loss) $ 75,619 $ 69,366
Adjustment to reconcile net income
to net cash provideed by (used in)
operating activities:
Depreciation and amortization 31,044 10,754
Changes in assets and liabilities:
(Increase) decrease in:
Trade accounts receivable (61,839) (72,323)
Inventories (1,374)
Prepaid expenses (10,506)
Deposits (939)
Increase (decrease) in:
Payroll taxes payable 46,004
Accounts payable, trade 101,267 (11,041)
Loan payable, officer (71,640) (8,356)
Accrued expenses (1,727) (1,109)
Net cash provided by (used in) operating activities $ 105,909 $ (12,709)
Cash flow from investing activities:
Capital expenditures $ (203,387) $ (10,194)
Net cash used in investing activities $ (203,387) $ (10,194)
</TABLE>
See accompanying notes to financial statements
-5-
J.A.M., INC.
Statements of Cash Flows
For the Nine-Month Interim Period Ended
September 30, 1996 with Comparative Amounts to September 30, 1995
______________________________________________________________________
<TABLE>
<S> <C> <C>
NINE NINE
MONTHS MONTHS
ENDED ENDED
9/30/96 9/30/95
(UNAUDITED) (UNAUDITED)
Cash flow from financing activities:
Net borrowings (repayment) on demand note $ (40,000) $ 18,782
Net borrowings on long-term debt 20,831
-
Net borrowings on capital lease obligations 115,799
-
Net cash provided by financing activities $ 96,630 $ 18,782
Net increase (decrease) in cash $ (848) $ (4,121)
Cash and cash equivalents at beginning of period 4,705 5,703
Cash and cash equivalents at end of period $ 3,857 $ 1,582
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 12,879 $ 16,203
Income taxes $ - $ -
</TABLE>
See accompanying notes to financial statements
-6-
J.A.M., INC.
Notes to Financial Statements
September 30, 1996 and 1995
(1) Management's Representation
The information furnished herein reflects all adjustments of a normal recurring
nature which are, in the opinion of management, necessary to a fair statement
of the results of operations for the interim periods presented.
(2) Earnings Per Share Information
The computation of earnings or (loss) per share in each period is based upon
the weighted average number of common shares outstanding at the end of each
period. Per APB 15, J.A.M., Inc. is considered to have a simple capital
structure since the conversion of the corporation's convertible securities to
common stock would dilute earnings per share by less than 3%.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OPERATIONS
Net sales for the third quarter 1996 increased 11% from the same period in 1995
to $512,734. This
$51,249 increase from $461,485 for the comparable 1995 quarter was due to
increase of new sales to customers.
At the end of the third quarter of 1996, the Company had a backlog of $280,000
compared to a $300,000 backlog in 1995. The Company realizes the revenues
generated in the third quarter, 1996 must be maintained in order to have
sufficient backlog to sustain operations.
Net deficit for the third quarter of 1996 totaled $(94,603) compared to
earnings of $69,366 for the
respective 1995 quarter. This $(163,969) decrease in earnings was largely due
to overruns for projects and expansion of operation and development personnel.
The Company was also preparing for integration of development facilities.
LIQUIDITY
A deficit of $(94,603) for the third quarter of 1996 decreased the Company's
equity to $(105,188),
compared to $(322,191) as of September 30, 1995. At September 30, 1996, the
Company did not have any working capital. Cash on hand totaled $3,857. Net
trade receivables, less allowance for doubtful accounts of $1,797, totaled
$349,965 at the end of the third quarter.
The Company plans to renegotiate with a financial institution for an increase
in funding for an additional line of credit to finance on-going workload.
The Company President personally guaranteed approximately $130,000 on a capital
lease to refinance equipment purchases and additional moneys for hardware
development.
-7-
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended
September 30, 1996.
-8-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
J.A.M., INC.
(Registrant)
Dated: November 11, 1996 By: /s/ John A.Marszalek
President, Chief
Executive and
Financial Officer
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION LOCATION
11 STATEMENT RE COMPUTATION OF SEE NOTE 2 TO THE NOTES TO THE
PER SHARE EARNINGS FINANCIAL STATEMENTS FILED
HEREWITH
27 FINANCIAL DATA SCHEDULE FILED ONLY WITH EDGAR FILING,
PER REG.S-K, RULE 601(c)(1)(v)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FOLLOWING SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
J.A.M., INC.'S FORM 10-Q FOR ITS QUARTER ENDED SEPTEMBER 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000765449
<NAME> J.A.M., INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 3,857
<SECURITIES> 0
<RECEIVABLES> 351,762
<ALLOWANCES> 1,797
<INVENTORY> 4,361
<CURRENT-ASSETS> 375,069
<PP&E> 932,827
<DEPRECIATION> 591,675
<TOTAL-ASSETS> 728,379
<CURRENT-LIABILITIES> 697,027
<BONDS> 136,540<F1>
0
0
<COMMON> 152,745
<OTHER-SE> (257,933)
<TOTAL-LIABILITY-AND-EQUITY> 728,379
<SALES> 1,774,084
<TOTAL-REVENUES> 1,774,084
<CGS> 1,046,230
<TOTAL-COSTS> 1,655,985
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42,480
<INCOME-PRETAX> 75,619
<INCOME-TAX> 0
<INCOME-CONTINUING> 75,619
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75,619
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
<FN>
<F1>Long-term liabilities.
</FN>
</TABLE>
