<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark one)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
- -- OF 1934
For the quarterly period ended March 31, 1996
------------------------------
_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
----------------- ----------------
Commission file number 0-19170
------------------------------------------
JUNIPER FEATURES LTD.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 11-2866771
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization) (IRS Employer
Identification No.)
111 Great Neck Road, Suite 604, Great Neck, New York 11021
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(516) 829-4670
- --------------------------------------------------------------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange act 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
----- ----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: May 2, 1996 - 16,394,696 shares of
common stock - $.001 par value, outstanding.
1
<PAGE>
JUNIPER FEATURES LTD.
MARCH 31, 1996
(UNAUDITED)
INDEX
Page No.
--------
PART I - Financial Information:
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995 (Unaudited). . . . . . . . . . . . . . . . 3
Consolidated Statements of Income for the Three
Months Ended March 31, 1996 and 1995 (Unaudited) . . . . . . . . 4
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1996 and 1995 (Unaudited) . . . . . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . . . . . . . . 7-9
PART II - Other Information. . . . . . . . . . . . . . . . . . . 10-11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2
<PAGE>
JUNIPER FEATURES LTD.
AND SUBSIDIARY COMPANIES
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
MARCH DECEMBER
31, 1996 31, 1995
ASSETS ------------ ------------
<S> <C> <C>
Current Assets
Cash $ 12,170 $ 129,558
Accounts receivable - trade 808,490 804,681
Due from affiliates 92,095 86,087
Prepaid expenses and other
current assets 169,566 150,148
Due from officer 17,671 -
------------ -----------
Total current assets 1,099,992 1,170,474
Film licenses 3,035,851 2,980,678
Property and equipment net of
accumulated depreciation of
$65,702 and $55,798, respectively 112,800 122,703
Other assets 2,396 2,396
------------ ----------
$4,251,039 $4,276,251
------------ ----------
------------ ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 836,444 878,612
Notes payable - current 164,373 179,163
Due producers - current 75,547 93,289
Due to shareholders 7,000 7,000
------------ ----------
Total current liabilities 1,083,364 1,158,064
Notes payable - long term 50,355 54,752
Due to producers - long term 235,195 266,039
Due to officers -long term - 4,566
------------ ----------
Total liabilities 1,368,914 1,483,421
------------ ----------
Shareholders' Equity
12% Non-Voting convertible redeemable
preferred stock: $.10 par value,
875,000 shares authorized, 235,900
shares issued and outstanding at
March 31, 1996 and December 31,
1995: aggregate liquidation
preference, $471,800 at March 31,
1996 and December 31, 1995 23,590 23,590
Common Stock - $.001 par value, 20,000,000
shares authorized, 16,394,696 and
15,504,696 shares issued and outstanding
at March 31, 1996 and December 31, 1995,
respectively 16,395 15,505
Capital contributions in excess of par:
Attributed to preferred stock 210,303 210,303
Attributed to common stock 6,899,914 6,741,804
Retained earnings (deficit) (4,268,077) (4,198,372)
------------ ----------
Total shareholders' equity 2,882,125 2,792,830
------------ ----------
$4,251,039 $4,276,251
------------ ----------
------------ ----------
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
JUNIPER FEATURES LTD.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Healthcare $ 658,373 $ 847,282
Entertainment 9,150 -
----------- -----------
667,523 847,282
----------- -----------
Operating costs:
Healthcare 406,941 583,591
Entertainment 4,827 -
Selling, general and administrative expenses 325,460 286,723
----------- -----------
737,228 870,314
----------- -----------
Net income (loss) $( 69,705) $( 23,032)
----------- -----------
----------- -----------
Weighted average number of
shares outstanding 15,885,465 12,039,203
----------- -----------
----------- -----------
Net income (loss) per common share $( 0.01) $( 0.00)
----------- -----------
----------- -----------
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
JUNIPER FEATURES LTD.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1996 1995
----------- ------------
<S> <C> <C>
Operating Activities
Net income (loss) $( 69,705) $( 23,032)
Adjustments to reconcile net cash provided
by operating activities:
Amortization of film licenses 4,827 -
Depreciation expense 9,903 9,414
Payment of officer's compensation
with equity - 3,750
Payment of various liabilities with equity - ( 1,850)
Changes in assets and liabilities:
Accounts receivable ( 3,809) ( 151,079)
Prepaid expenses and other current assets ( 19,418) ( 245)
Other assets - ( 1,021)
Due to/from officers ( 22,237) ( 11,828)
Due from affiliates ( 6,008) 521
Accounts payable and accrued expenses ( 42,169) 191,736
----------- -----------
Net cash provided from (used for)
operating activities ( 148,616) ( 16,366)
----------- -----------
Financing activities:
Reduction in borrowings ( 19,188) ( 91,400)
Payments to and on behalf of producers ( 59,584) ( 34,248)
Proceeds from exercise of options - 10,000
Proceeds from private placements 110,000 -
----------- -----------
Net cash provided from (used for)
financing activities 31,228 ( 115,648)
----------- -----------
Net increase (decrease) in cash ( 117,388) ( 99,282)
Cash at beginning of period 129,558 130,169
----------- -----------
Cash at end of period $ 12,170 $ 30,887
----------- -----------
----------- -----------
============================================================================
Supplemental cash flow information:
Interest paid $ 8,963 $ 4,463
----------- -----------
</TABLE>
See notes to consolidated statements
5
<PAGE>
JUNIPER FEATURES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION:
The interim consolidated financial statements included herein have been
prepared without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC"). Certain information and footnote disclosures,
normally included in the financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or omitted
pursuant to SEC rules and regulations; nevertheless, management of the Company
believes that the disclosures herein are adequate to make the information
presented not misleading. The consolidated financial statements and notes
should be read in conjunction with the audited consolidated financial statements
and notes thereto as of December 31, 1995, included in the Company's Form 10-KSB
filed with SEC.
In the opinion of management, all adjustments consisting only of normal
recurring adjustments necessary to present fairly the consolidated financial
position of the Company with respect to the interim consolidated financial
statements have been made. The results of operations for the interim periods
are not necessarily indicative of the results to be expected for the full year.
6
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company was organized in July 1987. Its principal business is composed
of two (2) segments: (i) healthcare, which consists of (a) revenue enhancement
management for hospitals which is conducted by Diversified Health Affiliates,
Inc. ("DHA") and (b) healthcare cost containment for healthcare payors which is
conducted by Juniper Healthcare Containment Systems, Inc. ("Containment"); and
(ii) entertainment, consisting of the acquisition, exploitation and distribution
of rights to films to the various media (i.e., home video, pay-per view, pay
television, cable television, networks and independent syndicated television
stations) in the domestic and foreign marketplace, which is primarily conducted
by Juniper Pictures, Inc. ("Pictures").
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 VS THREE MONTHS ENDED MARCH 31, 1995
The Company's revenues decreased to $668,000 in the first quarter of 1996
from $847,000 in the first quarter of 1995, a 21% decrease.
Revenue related to the Healthcare segment decreased to $658,000 in the
first quarter of 1996 from $847,000 in the first quarter of 1995, a 22%
decrease. The decrease in revenue during the first quarter of 1996 was
predominately attributed to Containment, which had revenue of approximately
$562,000 in the first quarter of 1996, compared to approximately $763,000 in the
first quarter of 1995, a 26% decrease. This decrease in revenue is partially
attributable to a backlog of claims at Containment's major client. This reduced
the number of claims repriced by Containment in February, March and April. It
is anticipated that this situation will be resolved in May. Additionally,
Containment entered into a new Joint Venture Agreement. Under the Joint
Venture, Containment only recognizes one-half of the revenues and operating
costs of the Joint Venture. One half of such revenue amounted to approximately
$94,000 in the first quarter of 1996. The new joint venture generates a greater
operating profit than Containment has historically generated, because a higher
percentage of savings are billed and the additional revenue is shared by the
joint venture partners. DHA's revenue improved to $96,000 in 1996 from $85,000
in 1995.
Revenue from the entertainment segment was $9,150 in the first quarter
of 1996, compared to none in 1995. The non-realization of entertainment
revenue in both quarters was attributed to the following factors: (i) the
Company experienced a slow down of activity in foreign sales; and (ii) the
Company experienced a slower closing cycle in the domestic market due to a
large number of films which were unavailable for broadcast during the period
because of scheduling rotation with cable licensors. This scheduling
7
<PAGE>
rotation was delayed because of lengthy negotiations with cable licensors,
therefore making them unavailable for Broadcast. Certain of the Company's films
that generated revenue when the contracts were signed are still under license,
and are currently being aired by the licensees.
Management does not believe that the slowdown in its entertainment
business is indicative of a continuing negative market trend, but is the result
of a confluence of various temporary factors which are mentioned above and the
decision by the Company to focus on the growth of the healthcare segment at the
present time, which is currently the most efficient and cost effective strategy
for the Company to maximize revenues. The Company is currently in negotiations
for the possible licensing of films with various television syndicators for
domestic distribution.
Healthcare operating costs decreased to $407,000 in the first quarter of
1996 from $584,000 in the first quarter of 1995, a 30% decrease. As a
percentage of revenue, operating costs of the Healthcare operations decreased to
62% in the first quarter of 1996 from 69% in the first quarter of 1995. The
decrease is due to the fact that operating costs for Containment were lower
because of the new Joint Venture.
Selling, general and administrative expenses increased to $325,000 in the
first quarter of 1996 from $287,000 in the first quarter of 1995, a 14%
increase. The increase in selling, general and administrative expenses is
primarily attributed to legal expense of $31,000, relating to Picture's
arbitration proceeding, which has been resolved.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at March 31, 1996 was $17,000, compared to working capital
of $12,000 at December 31, 1995. The ratio of current assets to current
liabilities was 1.02:1 at March 31, 1996 and 1.01:1 at December 31, 1995. Cash
flow used in operations during the first quarter of 1996 was $149,000, compared
to cash flow provided by operations during the first quarter of 1995, of
$16,000.
Accounts receivable - trade increased to $808,000 from $805,000 at December
31, 1995.
Accounts payable decreased to $836,000 from $879,000 at December 31, 1995.
The Company has no material commitments for capital expenditures or the
acquisition of films.
During the first quarter of 1996, the Company raised $110,000 from
Private Placements of its securities.
The Company believes that it will have sufficient liquidity to meet
its operating cash requirements for the current level of operations during the
remainder of 1996. If the Company is unable to fund its operating cash flow
needs, the Company may scale back operations.
8
<PAGE>
The Company currently does not have available any unused lines of credit.
9
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Preferred Stockholders are entitled to receive out of assets legally
available for payment a dividend at a rate of 12% per annum of the
Preferred Stock liquidation preference of $2.00 (or $.24 per annum) per
share, payable quarterly on March 1, June 1, September 1 and December 1, in
cash or in shares of Common Stock having an equivalent fair market value.
Unpaid dividends on the Company's Preferred Stock cumulate. The quarterly
payments due on September 1 and December 1, 1992, in 1993, in 1994, in 1995
and on March 1, 1996 have not yet been paid. Accordingly, these dividends
are accumulating. These dividends have not been declared because earned
surplus is not available to pay a cash dividend. Accordingly, dividends
will accumulate until such time as earned surplus is available to pay a
cash dividend or until a post effective amendment to the Company's
registration statement covering a certain number of common shares reserves
for the payment of Preferred Stock dividends is filed and declared
effective, or if such number of common shares are insufficient to pay
cumulative dividends, then until additional common shares are registered
with the Securities and Exchange Commission (SEC). No dividends shall be
declared or paid on the Common Stock (other than a dividend payable solely
in shares of Common Stock) and no Common Stock shall be purchased, redeemed
or acquired by the Company unless full cumulative dividends on the
Preferred Stock have been paid or declared, or cash or shares of Common
Stock have been set apart which is sufficient to pay all dividends accrued
on the Preferred Stock for all past and then current dividend periods.
Holders of Common Stock will not participate in dividends paid on the
Preferred Stock.
10
<PAGE>
As stated above, pursuant to the terms of the Preferred Stock, the Company
has the option of making quarterly dividend payments in cash or shares of
Common Stock. The Company does not intend to make any Preferred Stock
dividends in cash in the foreseeable future. Prospectively, subject to the
Company's Prospectus being current, and a sufficient number of common
shares being registered with the SEC, the Company anticipates making
quarterly dividend payments in shares of Common Stock for the foreseeable
future including the quarterly dividend payments which were due on
September 1 and December 1, 1992; in 1993; in 1994; in 1995; and March 1,
1996, which have not yet been paid.
There are currently 235,900 shares of Preferred Stock outstanding.
Accordingly, the total cash value of the arrearage of unpaid dividends is
$212,000.
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company filed a Form 8-K on April 27, 1996, relating to the
extension of its Class A Warrants by one year until May 1, 1997, and
its Class B Warrants by one year until May 1, 1998.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed by the undersigned, thereunto duly authorized.
JUNIPER FEATURES LTD.
Date:
By:________________________________________
V. Paul Hreljanovic
Chairman of the Board, Director
President, Chief Executive Officer
and Acting Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF INCOME FOUND ON PAGES
3 AND 4 OF THE COMPANY'S FORM 10-QSB FOR THE THREE MONTHS ENDED MARCH 31, 1996
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 12,170
<SECURITIES> 0
<RECEIVABLES> 808,490
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,099,992
<PP&E> 178,502
<DEPRECIATION> 65,702
<TOTAL-ASSETS> 4,251,039
<CURRENT-LIABILITIES> 1,083,364
<BONDS> 0
0
23,590
<COMMON> 16,395
<OTHER-SE> 2,842,140
<TOTAL-LIABILITY-AND-EQUITY> 4,251,039
<SALES> 0
<TOTAL-REVENUES> 667,523
<CGS> 0
<TOTAL-COSTS> 737,228
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (69,705)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (69,705)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
