U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM l0-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period From_____________ to_____________
Commission File Number 0- 18974
Jordan American Holdings, Inc.
------------------------------
(Exact name of registrant as specified in its charter)
Florida 65-0142815
------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1875 Ski Time Square, Suite One, Steamboat Springs, CO 80487
------------------------------------------------------------
(Address of principal executive offices)
(970) 879-1189
--------------
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 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 filing requirements
for the past 90 days. Yes [X] No [ ]
As of September 30, 1999, 10,421,266 shares of the registrant's common stock
were issued and outstanding.
<PAGE>
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
TABLE OF CONTENTS
PART I
PAGE
----
ITEM 1 FINANCIAL INFORMATION
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6-7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
Operational Notes 8
Risk Factors, Trends & Uncertainties 9
Results of Operations 10-11
Liquidity and Capital Resources 12
<PAGE>
PART 1., ITEM 1.
FINANCIAL INFORMATION
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
SEPTEMBER 30, DECEMBER 31,
ASSETS 1999 1998
----------- -----------
CURRENT ASSETS
<S> <C> <C>
Cash & Cash Equivalents $ 656,681 $ 495,622
Marketable Securities 78,078 163,010
Investment Advisory Fee Receivable - Net 197,222 45,985
Accounts Receivable 87,255 135,253
Notes Receivable - Officer 26,049 15,000
Prepaid Expenses 32,301 4,380
Other Receivable 15,000 25,205
----------- -----------
Total Current Assets 1,092,586 884,455
----------- -----------
FIXED ASSETS
Property and Equipment, at cost, net of accumulated
depreciation and amortization of $103,760 and
$86,163 respectively 117,473 64,853
----------- -----------
OTHER ASSETS
Boston Restaurant Debentures 500,000 500,000
Strategic Options Limited Partnership 31,787 45,736
Corporate Stocks - Restricted 56,250 --
----------- -----------
Total Other Assets 588,037 545,736
----------- -----------
TOTAL ASSETS $ 1,798,096 $ 1,495,044
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 25,319 $ 65,132
Accrued Expenses 128,342 98,612
Deferred Revenue 36,722 29,703
Software License Payable 65,743 15,940
----------- -----------
Total Current Liabilities 256,126 209,387
----------- -----------
STOCKHOLDERS' EQUITY
8% cumulative, convertible, non-voting preferred
stock $0.01 par valve; authorized 5,000,000 shares
3,000,000 shares issued and outstanding 30,000 30,000
Common Stock, $0.001 par value; authorized 20,000,000
shares; 10,421,266 shares issued and outstanding at
September 30, 1999 and December 31, 1998 10,421 10,421
Additional Paid in Capital 4,502,863 4,502,853
Deficit (3,001,314) (3,257,617)
----------- -----------
Total Stockholders' Equity 1,541,970 1,285,657
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,798,096 $ 1,495,044
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Revenues
<S> <C> <C> <C> <C>
Commission Income $ 42,072 $ 51,940 $ 218,563 $ 289,496
Investment Advisory Fees 400,702 106,798 904,077 492,073
------------ ------------ ------------ ------------
Total Revenues 442,774 158,738 1,122,640 781,569
Selling, General and Administrative Expenses 353,783 374,094 1,049,603 1,369,018
------------ ------------ ------------ ------------
Operating Income (Loss) 88,991 (215,356) 73,037 (587,449)
------------ ------------ ------------ ------------
Other Income (Expenses):
Interest and Dividend Income 21,252 29,204 72,119 90,056
Other Income 11,233 1,378 46,048 10,693
Realized Equity Gain (Loss) from investing
and trading (3,215) (38,199) (883) (104,599)
Unrealized Equity Gain (Loss) from investing
and trading 31,238 (57,367) 65,993 44,629
Gain on disposal of building -- -- -- 55,256
------------ ------------ ------------ ------------
Total Other Income (Expense), Net 60,508 (64,984) 183,277 96,035
------------ ------------ ------------ ------------
Net Income (Loss) 149,499 (280,340) 256,314 (491,414)
------------ ------------ ------------ ------------
Dividends on preferred stock 60,000 60,000 180,000 180,000
------------ ------------ ------------ ------------
Net Income (Loss) attributable to Common Stock $ 89,499 $ (340,340) $ 76,314 $ (671,414)
============ ============ ============ ============
Basic earnings attributable to common stock
per common share $ 0.01 $ (0.03) $ 0.01 $ (0.06)
============ ============ ============ ============
Diluted earnings attributable to common stock
per common share $ 0.01 $ (0.03) $ 0.01 $ (0.06)
============ ============ ============ ============
Weighted-average number of common shares outstanding:
Basic 10,421,266 10,421,266 10,421,266 10,421,266
============ ============ ============ ============
Diluted 10,421,266 10,421,266 10,421,266 10,421,266
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED SEPTEMBER 30,
1999 1998
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income (Loss) $ 256,314 $ (491,414)
Adjustments to reconcile net income to cash provided
by (used in) operating activities:
Depreciation 17,598 18,788
Unrealized (gain) from investing and trading (65,993) (44,629)
Realized (gain) loss from investing and trading (883) 104,599
Gain on sale of property -- (55,256)
Changes in operating assets and liabilities:
Trading marketable securities -- 488,636
Investment advisory fee receivable (151,237) 57,953
Prepaid expenses (27,921) 15,773
Notes receivable - shareholders (11,049) --
Other receivable 58,202 6,304
Accounts payable and other accrued expenses (10,083) (10,470)
Deferred investment advisory fees 7,019 (93,736)
Software license payable 49,803 --
---------- ----------
Net Cash Provided By Operating Activities 123,536 (3,452)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Corporate stock - restricted (56,250) --
Investment in Partnership -- (50,000)
Principal received on Notes Receivable -- 435,000
Sale of IMPACT Management Growth Portfolio 57,092 --
Sale of Property -- 195,483
Sale of Marketable Securities 106,899 --
Capital expenditures (70,218) (19,590)
---------- ----------
Net Cash Provided by (Used In) Investing Activities 37,523 560,893
---------- ----------
CASH FLOWS USED IN FINANCING ACTIVITIES
Dividends on preferred stock -- (120,000)
---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents 161,059 437,441
Cash and Cash Equivalents, beginning of period 495,622 51,286
---------- ----------
Cash and Cash Equivalents, end of period $ 656,681 $ 488,727
========== ==========
Supplemental Disclosure:
Interest paid $ 4,597 $ 9,053
========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- ------------------------------------------------------
In the opinion of management, the interim financial statements contain all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position of Jordan American Holdings, Inc.
("Company" or "JAHI") and its subsidiaries as of September 30, 1999, and the
results of its interim operations for the three months and nine months ended
September 30, 1999 and 1998, and cash flows for the nine months ended September
30, 1999, and 1998, in accordance with generally accepted accounting principles.
The results for interim periods are not necessarily indicative of results for a
full year. (Please see "Management's Discussion and Analysis" below.)
Investment adviosry fees, based on a percentage of assets for which refunds may
be due to clients, are billed in advance and are deferred and amortized into
income over the period in which services are performed. Investment advisory fees
based on a percentage of the annual increase (performance, or incentive, fees)
in the market value of a client's portfolio, including interest and dividends,
are fully recognized when billed after the period of management, which is
usually twelve months after account inception and annually thereafter. JAHI also
serves as an investment advisor to the Impact Total Return Portfolio f/k/a the
Impact Management Growth Portfolio ("Portfolio"), an open-end investment company
registered with the Securities and Exchange Commission. Fees for management of
the portfolio are earned daily and paid to JAHI on a monthly basis. Fee
compensation, which is due sales representatives, is accrued monthly and is paid
to sales representatives monthly. Effective May 1, 1999 the Company entered into
a sub-advisory agreement with Schneider Capital Management for the Portfolio.
Pursuant to the sub-advisory agreement, the Company pays Schneider monthly at
the rate of 60 basis points (0.60%) annually, from its 125 basis points (1.25%)
annual management fee which is calculated on the average daily net assets of the
Portfolio.
Asset management contracts are generally terminable upon written notice from the
client(s) or the Company, and the unearned percentage of asset management fees
billed in advance are refundable on a pro-rata basis. For additional information
regarding the Company's advisory business operations and policies, a copy of
disclosure document Form ADV, Part II is available without charge upon written
request to the Company.
The Company develops prospective investment advisory clients and investors
through strategic marketing partnerships, seminars, money shows, occasional
television and radio appearances, direct contact, its web site (www.jahi.com or
www.equityassets.com), sales representatives, referrals from clients, securities
broker-dealers and other sources. Prospective advisory clients receive Form ADV,
Part II, as the Company's disclosure document and provide information about
themselves, their investment experience, and their net worth through various new
account forms and other methods.
Approximately 90% of JAHI's clients execute brokerage transactions through
IMPACT Financial Network, Inc. ("IFNI"), a wholly-owned broker-dealer subsidiary
of JAHI and a member of the National Association of Securities Dealers, Inc.
("NASD") and the Securities Investor Protection Corporation ("SIPC"). IFNI is
compensated for securities transactions on behalf of the Company's managed
accounts by receipt of commissions. IFNI does not hold funds or securities for
clients and does not have custody of accounts for clients of the Company. IFNI
currently executes securities transactions through Pershing & Co., a division of
Donaldson, Lufkin, & Jenrette, a securities
6
<PAGE>
corporation. Pershing, a member of the SIPC, acts as clearing house and
custodian for accounts and processes all confirmations and monthly statements
for JAHI advisory clients who choose to maintain their accounts with IFNI.
Commission income is recognized on a settlement date basis, which does not
differ materially from the trade date basis of accounting.
Effective May 1, 1999, the Company's other wholly owned subsidiary, IMPACT
Administrative Services, Inc. ("IASI"), an investment company services entity,
receives 35 basis points annually, (0.35%) as an administrative fee, replacing
the $165 per account annual administrative fee previously charged to the
shareholders of the Portfolio. To date, IASI provides its services to the
Portfolio only.
Marketable securities consist primarily of corporate stocks and other securities
held in Company investment accounts. Realized and unrealized gains or losses
result from the trading of securities in Company investment accounts.
Basic and diluted earnings per share and share equivalents are based upon the
weighted average number of share and/or share equivalents outstanding during the
period. The calculations ignore common stock equivalent shares when their
inclusion in such calculations would have been anti-dilutive.
In the third quarter of 1994, Wallace Neal Jordan established Jordan Assets,
Ltd. For providing administrative services, the Company receives 100% of the net
income resulting from the collection of incentive and/or management fees, if
any, collected by Jordan Assets, Ltd., a privately held affiliate which manages
the Jordan Index Fund, L.P. (the "Index"), a limited partnership with assets of
approximately $3.0 million at September 30, 1999. The Index invests in stock
index futures contracts and other securities and receives as its fee 20% of the
Index's trading profits, if any. Fees for this Index are accounted for as
deferred revenue until the annual billing date of the Index, which is July 31 of
each year. Fees to JAHI from the Index were approximately $90,000 in 1995 as
compared to no revenues since that time. There is no assurance that the Index
will continue to exist as a potential revenue source for the Company.
These interim period consolidated financial statements, including the notes
thereto, are condensed and do not include all disclosures required by generally
accepted accounting principles. Such interim period consolidated financial
statements should be read in conjunction with the Company's audited consolidated
financial statements which are included in the Company's 1998 Form 10-KSB which
is contained in the Company's 1998 Annual Report to shareholders and is
available without charge upon request to JAHI Investor Relations, 1875 Ski Time
Square, Suite One, Steamboat Springs, Colorado, 80487, (970) 879-1189; Fax:
(970) 879-1272; E-mail: [email protected]
7
<PAGE>
PART 1, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
Safe Harbor for Forward-Looking Statements
Information found in this report contains forward-looking implications which may
differ materially from actual results due to the success, or lack thereof, of
JAHI's management decisions, marketing and sales effectiveness, investment
decisions, and the management of clients' stock portfolios and pooled
investments as influenced by market conditions, Federal Reserve Board policy,
economic trends, political developments, domestic and international events and
other factors. There can be no guarantee that any forward-looking implications
discussed and/or referenced in this report will have any impact, positive or
negative, upon the earnings, value and/or operations of the Company.
Operational Notes
Asset gathering is primarily being pursued through selling agreements with other
broker-dealers and various strategic marketing partnerships, as well as
seminars, national investment shows, advertising, marketing materials, joint
ventures with other financial services professionals and other means.
The Company managed approximately $42 million in individually held fee-paying
equity portfolios at September 30, 1999. The Company serves as investment
advisor to the Impact Total Return Portfolio f/k/a the Impact Management Growth
Portfolio ("Portfolio"), an open-end investment company formed under Impact
Management Investment Trust. Effective May 1, 1999, the Company entered into a
sub-advisory agreement with Schneider Capital Management for the Portfolio.
Management of the Company expects that this sub-advisory agreement may enhance
the prospects for increased sales of Portfolio shares.
At September 30, 1999, the Portfolio had assets of approximately $6.3 million
from which JAHI receives management fees. At September 30, 1999, the Company and
a privately held affiliate provided investment advice to approximately $51
million in fee-paying assets in individually managed equity portfolios, the
Portfolio and the Jordan Index Fund, L.P.
Investment advisory fees based on a percentage of assets, for which refunds may
be due to clients, are billed in advance and are deferred and amortized into
income over the period in which services are performed. Exceptional performance
in percentage of profit (incentive) accounts may result in substantial revenues
for the Company while poor performance in the same accounts may yield no fees
for the Company from approximately 70% of the Company's total assets under
management. Additionally, because percentage of profit accounts are billed on an
annual basis in arrears for each respective client, there may be a delay in
billing revenue as long as eleven months from the time when actual account
performance was achieved. Thus, exceptional performance in percentage of profit
accounts may benefit the revenues of the Company for nearly one year after such
performance was achieved as dependent on the billing cycle of respective clients
and other investment results in the respective accounts.
8
<PAGE>
Risk Factors, Trends & Uncertainties
Total assets under management and corporate earnings may substantially increase
or decrease due to (1) stock market conditions, including the onset of a
long-term declining, or bear market; (2) performance returns as influenced by
the Company's investment advisory decisions, operational expense and
effectiveness of marketing efforts; (3) competition from mutual funds, other
investment advisory companies and insurance companies; (4) interest rate changes
and other actions taken by the Federal Reserve Board; (5) domestic and
international economic and political conditions, high inflation and/or
recession; (6) trends in business and finance; (7) international events; (8)
acts of terrorism; and (9) other factors.
The securities and commodities industries are subject to various risks and
intense regulation from the SEC, the NASD, the National Futures Association, and
the Commodity Futures Trading Commission. Investment advisors, broker-dealers,
commodity pool operators, and commodity trading advisors are highly regulated by
both federal and state authorities and by other self-regulatory organizations.
Such regulations may restrict both the types of investments and amount of
investments that JAHI may employ for its clients and itself. There can be no
assurance that any changes to existing laws, regulations or rulings promulgated
by government entities having jurisdiction over the Company's investment
advisory, broker-dealer, investment company-related and commodities trading
business will not have an adverse effect upon the business of the Company, or
that, despite its best efforts, the Company currently operates in full
compliance with all applicable law and regulations or will be able to remain in
compliance with all applicable law and regulations. If the Company fails to
maintain compliance with all applicable regulations, JAHI and/or its
subsidiaries may be subject to various and significant fines, censures and other
considerations and penalties.
By law, investment advisors, broker-dealers, and investment companies are
fiduciaries and are required to serve their clients' interests with undivided
loyalty. The affiliation between the Company and IFNI may continue to be
scrutinized by the regulatory authorities because of the potential conflict of
interest created by related-party transactions and may be subject to various
regulations which may affect the fees and charges of IFNI. Additionally, as the
brokerage industry continues to become more competitive, fees for such services
may decline which result in a similar reduction in revenues from trading
transactions.
Findings contrary to industry regulations by one or more regulatory entities may
subject the Company to censures, fines and/or other liabilities, or cause the
Company to change its method of doing business. The SEC requires that business
be conducted in the best interests of the clients and that such arrangements be
disclosed to them. While the Company believes that its existing policies,
procedures and proposed relationships are in compliance with applicable laws and
regulations, findings to the contrary may have a material adverse effect upon
the Company.
Many aspects of the financial services industry involve substantial liability
risks, including but not limited to exposure under federal and state securities
laws in connection with the distribution of securities, brokerage transactions,
suitability and investment advisor activities. Although the Company currently
maintains errors and omission insurance and other insurance to protect against
these types of liabilities, there can be no guarantee that this coverage will
necessarily protect the Company and its shareholders from potential claims.
9
<PAGE>
The Company operates in a highly competitive industry with competition from
other investment advisors, commodity trading advisors, broker-dealers, and
mutual fund managers in addition to investment alternatives offered by insurance
companies, banks, securities dealers and other financial institutions. Many of
these institutions are able to engage in more extensive advertising and may
offer accounts insured by federal corporations such as the Federal Deposit
Insurance Corporation. JAHI believes its investment strategy, which centers
around attempting to understand the general trend of the market as assisted by
certain proprietary analyses, coupled with its long-term track record, make it
an attractive alternative to traditional mutual funds and other money managers.
Long-term trends in retention of client assets since fiscal year-end 1995 show
that the Company has had a net loss in assets under management, i.e., more
assets in client accounts have departed from the Company's management than were
brought in as new managed assets. This declining trend in total assets under
management may continue to have a direct negative impact upon the Company's
investment advisory revenues and related brokerage commissions. It is likely
that future net income/loss of the Company will be substantially impacted by the
amount of assets under management, investment management decisions and general
stock market conditions, among other factors listed in this report.
The SEC conducted an examination of the Company in November 1997. As a result of
this examination, certain issues arose regarding possible violation of the
Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment
Advisors Act of 1940 relating to the contingent "best efforts" private placement
debenture offering for Boston Restaurants Associates, Inc. The SEC has initiated
discussions with the Company's legal counsel with regard to these issues and may
be considering formal action against the Company. Legal counsel to the Company
filed a "Wells Submission" with the SEC on June 1, 1998. Management and legal
counsel of the Company cannot, at this time, predict with any certainty the
outcome of the SEC's examination or whether the resolution will have a material
effect on JAHI's operations or financial statements.
Results of Operations
The Company had a net income for the three months ended September 30, 1999, of
$149,499 compared to a net loss of ($280,340) for the same period in 1998. This
net income for this period compared to a net loss for the same period last year
stems from higher revenues from performance fee based managed accounts,
increased fees from the Portfolio, and a decrease in operational expenses. The
Company had a net income attributable to common stock for the three months ended
September 30, 1999 of $89,499 or $0.01 per common share compared to a net loss
attributable to common stock of ($340,340) or ($0.03) per common share for the
same period in 1998.
The Company had a net income for the nine months ended September 30, 1999, of
$256,314 compared to a net loss of ($491,414) for the same period in 1998. This
net income for this period compared to a net loss for the same period last year
stems from higher revenues from performance fee based managed accounts,
increased fees from the Portfolio, and a decrease in operational expenses. The
Company had net income attributable to common stock for the nine months ended
September 30, 1999 of $76,314 or $0.01 per common share compared to a net loss
attributable to common stock of ($671,414) or ($0.06) per common share for the
same period in 1998.
10
<PAGE>
Total dividends in arrears as of September 30, 1999 and September 30, 1998 were
$300,000 and $60,000 respectively. There are currently no projected annual
payments for 1999.
For the three months ended September 30, 1999, revenues totaled $442,774
compared to revenues of $158,738 for the same period in 1998, an increase of
approximately 179% due primarily to significantly increased revenues from
investment advisory fee income.
Commission income decreased for the three months ended September 30, 1999, to
$42,072 compared to $51,940 for the same period in 1998, a decrease of
approximately 19% due primarily to fewer securities transactions resulting from
the amount of securities being purchased and sold in client accounts as
incidental to management's investment advisory decisions based on technical and
fundamental considerations of individual securities, market conditions and other
factors.
Advisory fees income increased for the three months ended September 30, 1999 to
$400,702 compared to $106,798 for the same period in 1998, an increase of
approximately 275% due primarily to increased revenues from performance fee
based managed accounts.
Total other income was $60,508 for the three months ended September 30, 1999,
compared to total other expense of ($64,984) for the same period in 1998. This
increase was primarily due to unrealized gains from investing and trading for
the three months ended September 30, 1999 compared to unrealized losses from
trading and investing for the same period in 1998.
Selling, General, and Administrative ("SG&A") expenses of $353,783 were incurred
during the three month period ended September 30, 1999, compared to similar SG&A
expenses of $374,094 for the same period in 1998, a decrease of approximately 5%
due primarily to reductions in operating expenses.
For the nine months ended September 30, 1999, revenues totaled $1,122,640
compared to revenues of $781,569 for the same period in 1998, an increase of
approximately 44%. The increase in revenue can be primarily attributed to an
increase in advisory fees.
Revenues from advisory fees for the nine months ended September 30, 1999 totaled
$904,077 compared to revenues from the same source of $492,073 for the same
period in 1998, an increase of approximately 84% due primarily to increased
revenues from performance fee based managed accounts.
Revenues from commissions decreased approximately 25% for the nine months ended
September 30, 1999 compared to the same period in 1998 primarily due to less
trading activity.
11
<PAGE>
Total other income was $183,277 for the nine months ended September 30, 1999
compared to $96,035 for the same period in 1998. This increase was primarily due
to substantially lower realized equity losses from investing and trading for the
nine months ended September 30, 1999 compared to the same period in 1998.
Selling, general and administrative expenses totaled $1,049,603 during the nine
months ended September 30, 1999 compared to $1,369,018 in selling, general and
administrative expenses for the same period in 1998, a decrease of approximately
23%, due primarily to aggressive reductions in selling, marketing and operating
expenses.
Liquidity and Capital Resources
At September 30, 1999, the Company had cash and cash equivalents of $656,681,
versus $495,622 at December 31, 1998. This increase was due primarily to the net
income for the nine months ended September 30, 1999.
Accounts payable and accrued expenses were $25,319 and $128,342 respectively at
September 30, 1999, compared to $65,132 and $98,612 respectively at December 31,
1998. The reduction in accounts payable is due to reduced expenses, both actual
and budgeted, which affected accruals along with payment of outstanding
payables. Accruals are based upon expenses incurred and/or as determined by
management's best estimate based upon the Company's annual budget. The increase
in accrued expenses is primarily due to increased fees payable to investment
advisory representatives as a result of increased performance fee income.
Cash flows provided by (used in) operating activities for the nine months ended
September 30, 1999, were $123,536 compared to ($3,452) for the same period in
1998 due primarily to changes in net income for the nine months ended September
30, 1999. Cash flows provided by (used in) investing activities for the nine
months ended September 30, 1999, were $37,523 compared to $560,893 for the same
period in 1998 due primarily to the sale of property for the nine months ended
September 30, 1998.
The Company acquired 45,000 shares of restricted stock through a private
placement from The Internet Advisory Corporation at $1.25 per share. This
investment is restricted and may not be sold until March, 2000. The market value
of The Internet Advisory Corporation's free trading common stock was $3.50 per
share at September 30, 1999.
The Company entered into a lease purchase agreement that enlarged its software
system to include the NSCC Fund/Serv and the NSCC Networking Systems that may
increase its ability to distribute the shares of the Portfolio. This portion of
the agreement can be terminated upon 90 days written notice to the software
provider, thus limiting the Company's financial obligation to no more than 90
days forward.
Management of the Company believes short-term cash needs will continue to be met
through management fees, brokerage revenues, cash reserves and/or liquidation of
marketable securities.
12
<PAGE>
SIGNATURES
In accordance with 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.
JORDAN AMERICAN HOLDINGS, INC.
Dated: November 12, 1999 By: /s/ Wallace Neal Jordan
-------------------------
Chief Executive Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 656,681
<SECURITIES> 78,078
<RECEIVABLES> 240,124
<ALLOWANCES> 42,902
<INVENTORY> 0
<CURRENT-ASSETS> 1,092,586
<PP&E> 221,233
<DEPRECIATION> 103,760
<TOTAL-ASSETS> 1,798,096
<CURRENT-LIABILITIES> 256,126
<BONDS> 0
0
30,000
<COMMON> 10,421
<OTHER-SE> 1,501,549
<TOTAL-LIABILITY-AND-EQUITY> 1,798,096
<SALES> 0
<TOTAL-REVENUES> 1,122,640
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,597
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