SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT OR [ ] TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended December 31, 1996 Commission File No. 33-18461
JET SET LIFE USA, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 75-2195575
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21935 Van Buren, Suite 4
Grand Terrace, California 92313
(Address of principal executive offices) (Zip Code)
(909) 783-1800
(Registrant's telephone number,
including area code)
2060 Chicago Avenue, Suite B-3
Riverside, California 92507
(Former Address)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities 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
As of March 31, 1997, 58,374,247 shares of common stock were outstanding.
PART I
Item 1. Financial Statements:
Unaudited financial statements for the quarter covered by this report
are attached hereto.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The Company sells an oil additive and a fuel saving device named the
Triple Charger through its subsidiaries.
$242,000 in sales were realized during the fiscal year ending June 30,
1995, $901,000 during fiscal year 1996 and $1,006,000 during the first three
quarters of fiscal year ending June 30, 1997.
The subsidiaries make direct sales through a multi-level network of
independent distributors. The Triple Charger, now sells for $229.00 for
cars, $699.00 for large diesel trucks and a new model ready for launch for
larger 12 to 16 cylinder locomotive and industrial engines will sell in the
$2,500.00 range.
In the last nine months the Company has acquired exclusive world-wide
distribution rights for a new motor oil and motor oil additive.
With these three products, the Company now plans to start a major push
to recruit many more independent distributors.
PART II
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
On June 30, 1996, the Company acquired Jet Set Life Technologies, Inc.,
a privately held Nevada corporation, ("JSLT") in a business combination
accounted for as a pooling of interests. JSLT became a wholly owned
subsidiary of the Company through the exchange of 13,369,124 shares of the
Company's common stock for all of the outstanding stock of JSLT. After the
transaction the shareholders of JSLT owned the majority of stock in the
Company and management of JSLT became management of the Company. JSLT
was founded and wholly owned by George French, who was president, a director
and controlling shareholder of Company prior to the acquisition and remained
so after the acquisition.
Item 6. Exhibits and Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized:
JET SET LIFE USA, INC.
Date: July 11, 1997 By: /s/ George French
George French, President
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized:
JET SET LIFE USA, INC.
Date: July 11, 1997 By:
George French, President
JET SET LIFE USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
ASSETS
<CAPTION>
December 31, June 30,
1996 1996
---------- ----------
<S> <C> <C>
Current Assets
Cash $ -- $ 10,483
Accounts receivable 21,189 16,152
Inventory 82,867 73,738
---------- ----------
Total Current Assets 104,056 100,373
---------- ----------
Property and Equipment
Machinery and equipment 62,822 48,750
Computer equipment and software 76,454 76,454
Furniture and fixtures 5,976 4,776
Leasehold improvements 15,862 12,528
---------- ----------
Total Property and Equipment 161,114 142,508
Less: Accumulated Depreciation (55,332) (44,260)
---------- ----------
Net Property and Equipment 105,782 98,248
---------- ----------
Other Assets
Deposits 1,000 1,000
Organization costs net of accumulated
amortization of $1,388 and $198, respectively 10,512 11,702
---------- ----------
Total Other Assets 11,512 12,702
---------- ----------
Total Assets $ 221,350 $ 211,323
========== ==========
<FN>
See the accompanying notes to the condensed consolidated financial statements.
</FN>
</TABLE>
JET SET LIFE USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
<TABLE>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<CAPTION>
December 31, June 30,
1996 1996
---------- ----------
<S> <C> <C>
Current Liabilities
Cash overdraft $ 34,225 $ --
Accounts payable 155,538 152,782
Accrued liabilities 132,920 108,174
Interest payable -- 22,791
Note payable - related party 102,930 106,340
Notes payable - current portion 82,862 49,900
---------- ----------
Total Current Liabilities 508,475 439,987
---------- ----------
Long-Term Liabilities
Notes payable 7,668 7,668
---------- ----------
Total Liabilities 516,143 447,655
---------- ----------
Stockholders' Deficit
Common stock - $0.0001 par value; 100,000,000
shares authorized; 58,374,247 and 57,786,820
shares issued and outstanding 5,837 5,779
Additional paid-in capital 225,673 159,768
Accumulated deficit (523,346) (398,922)
Foreign currency translation adjustment (2,957) (2,957)
---------- ----------
Total Stockholders' Deficit (294,793) (236,332)
---------- ----------
Total Liabilities and Stockholders' Deficit $ 221,350 $ 211,323
========== ==========
<FN>
See the accompanying notes to the condensed consolidated financial statements.
</FN>
</TABLE>
JET SET LIFE USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months For the Three Months
Ended December 31, Ended December 31,
----------------------- ----------------------
1996 1995 1996 1995
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $ 728,123 $ 383,888 $ 368,857 $ 196,303
Cost of Goods Sold 209,839 136,435 105,076 65,669
---------- ---------- ---------- ----------
Gross Profit 518,284 247,453 263,781 130,634
----------- ---------- ---------- ----------
Operating Expenses
General and administrative
expense 365,710 141,395 180,218 66,251
Sales and marketing 263,722 180,549 127,165 86,008
Depreciation and amortization 12,262 10,168 6,131 5,084
----------- ---------- --------- ----------
Total Operating Expenses 641,694 332,112 313,514 157,343
Loss from Operations (123,410) (84,659) (49,733) (26,709)
----------- ---------- --------- ----------
Interest Expense 1,014 1,503 -- 1,024
----------- ---------- --------- ----------
Net Loss $ (124,424) $ (86,162) $ (49,733) $ (27,733)
=========== ========== ========= ==========
Net Loss Per Share $ (0.00) $ (0.00) $ (0.00) $ (0.00)
=========== ========== ========= ==========
Weighted Average Common
Shares Used in Per Share
Calculation 58,080,534 49,999,320 58,374,247 49,999,320
=========== ========== ========== ==========
<FN>
See the accompanying notes to the condensed consolidated financial statements.
</FN>
</TABLE>
JET SET LIFE USA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months
Ended December 31,
1996 1995
---------- ----------
<S> <C> <C>
Cash Flows From Operating Activities
Net loss $ (124,424) $ (86,162)
Adjustment to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 12,262 10,168
Changes in certain current assets and liabilities
Accounts receivable (5,037) (7,887)
Inventory (9,129) (36,871)
Accounts payable 2,756 80,566
Accrued liabilities 24,746 21,910
---------- ----------
Net Cash Used In Operating Activities (98,826) (18,276)
---------- ----------
Cash Flows From Investing Activities
Purchase of equipment (18,606) (7,145)
---------- ----------
Net Cash Used In Investing Activities (18,606) (7,145)
---------- ----------
Cash Flows From Financing Activities
Borrowings under notes payable to related parties 2,750 43,877
Borrowings under notes payable 76,137 --
Payments on notes payable to related parties (6,163) --
Payments on notes payable -- (9,470)
---------- ----------
Net Cash Provided By Financing Activities 72,724 34,407
---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents (44,708) 8,986
Cash and Cash Equivalents (Cash Overdraft)
At Beginning of Year 10,483 (1,019)
Cash and Cash Equivalents (Cash Overdraft) ---------- ----------
At End of Year $ (34,225) $ 7,967
========== ==========
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ 1,014 $ 1,503
========== ==========
<FN>
See the accompanying notes to the condensed consolidated financial statements.
</FN>
</TABLE>
JET SET LIFE USA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1--CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements have been prepared by the
Company, and are not audited. All adjustments necessary for fair presentation
have been included, and consist only of normal recurring adjustments. These
financial statements are condensed and, therefore, do not include all
disclosures normally required by generally accepted accounting principles.
These statements should be read in conjunction with the Company's annual
financial statements included in the Company's Annual Report on Form 10-KSB.
The financial position and results of operations presented in the
accompanying financial statements are not necessarily indicative of the
results to be generated for the remainder of the year.
NOTE 2--SUBSEQUENT EVENTS
In April 1997, the Company committed to issue 2,650,000 shares of its common
stock for services rendered to the Company. These shares were valued at $0.01
per share, which was the market value of the stock at the time the commitment
was made.
In April 1997, the Company entered into an agreement whereby the Company will
pay $3,000,000 to acquire the rights to certain technology relating to a
catalytic cartridge which is used as part of one of the Company's products.
$1,500,000 due under this agreement will be paid by issuance of a promissory
note which is due and payable in cash or shares at the sellers option by
October 2001; interest will accrue at 4.50 % payable annually with the first
payment due October 1998. The agreement provides that the remaining
$1,500,000 will be paid by the issuance of 1,500,000 shares of the Company's
common stock, provided the bid price of the stock in a public market at June
27, 1997 is at least $0.33 per share. If this is not the case, the Company
must pay $5,625 per month until the Company's common stock reaches a bid
price of $0.33 per share.
In April 1997, the Company entered into an agreement whereby the Company will
issue 2,000,000 shares of the Company's common stock for exclusive worldwide
distribution rights for an oil additive.
In April 1997, the Company entered into an agreement with an individual,
whereby the Company agreed to issue 500,000 shares of common stock to the
individual. In return, the individual will attempt to promote the Company,
will attempt to keep market makers up to date on Company developments and
will be available for additional general consulting. The market value of the
shares at the time of the commitment was $0.01 per share.
Subsequent to June 30, 1996, the Company has expanded its operations into New
Zealand, Australia and Germany through the establishment of subsidiary
companies in those countries.
In settlement of a judgement against the Company in favor of Financial
Sciences of America, with a principal balance of $43,175 and accrued interest
of $22,791, the Company has agreed to issue 1% of the outstanding shares of
Jet Set Life USA as of June 30, 1996 and 1% of any shares subsequently issued
for the next two years. Under the agreement, for a two year period commencing
June 30, 1996 and ending June 30, 1998, the Company has the option to
repurchase all shares issued to Financial Services of America for $100,000.
Subsequent to June 30, 1996, 587,427 shares have been issued to settle this
liability.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF DECEMBER 31, 1996, AND STATEMENTS OF OPERATIONS FOR THE SIX MONTHS
ENDED DECEMBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 21,189
<ALLOWANCES> 0
<INVENTORY> 82,867
<CURRENT-ASSETS> 104,056
<PP&E> 161,114
<DEPRECIATION> 55,332
<TOTAL-ASSETS> 221,350
<CURRENT-LIABILITIES> 508,475
<BONDS> 0
0
0
<COMMON> 5,837
<OTHER-SE> (300,630)
<TOTAL-LIABILITY-AND-EQUITY> 221,350
<SALES> 728,123
<TOTAL-REVENUES> 728,123
<CGS> 209,839
<TOTAL-COSTS> 641,694
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,014
<INCOME-PRETAX> (124,424)
<INCOME-TAX> 0
<INCOME-CONTINUING> (124,424)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (124,424)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
