UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
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 September 30, 1997
-------------------------------------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________to_________
Commission file number 0-19170
JUNIPER GROUP, INC.
-------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 11-2866771
- -------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
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: November 7, 1997 - 30,051,221
shares of common stock - $.001 par value, outstanding.
1
<PAGE>
JUNIPER GROUP, INC.
September 30, 1997
(Unaudited)
INDEX
Page No.
PART I - Financial Information:
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 1997
and December 31, 1996 (Unaudited) .................................. 3
Consolidated Statements of Income for the Three
Months Ended September 30, 1997 and 1996 (Unaudited) ............... 4
Consolidated Statements of Income for the Nine
Months Ended September 30, 1997 and 1996 (Unaudited ................ 5
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1997 and 1996 (Unaudited) ............... 6
Notes to Financial Statements ...................................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ............................................. 8-11
PART II - Other Information .................................... 12-13
Signatures ........................................................ 14
2
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
September December
Assets 30, 1997 31, 1996
----------- -----------
Current Assets
Cash ........................................... $ 104,138 $ 14,593
Accounts receivable - trade .................... 770,287 795,091
Due from affiliates ............................ 41,642 59,359
Prepaid expenses and other current assets ...... 118,957 105,995
Due from officer ............................... - 23,318
----------- -----------
Total current assets ....................... 1,035,024 998,356
Film licenses .................................. 2,954,847 2,963,729
Property and equipment net of accumulated
depreciation of $128,906 and $98,564
respectively ................................. 84,396 114,738
Other assets ................................... 3,274 3,519
----------- -----------
$ 4,077,541 $ 4,080,342
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 1,460,490 $ 1,177,736
Notes payable - current ........................ 258,836 105,587
Due to producers - current ........................ 62,086 67,556
Due to officers 14,794 -
Due to shareholders ............................ 7,000 7,000
----------- -----------
Total current liabilities ................. 1,803,206 1,357,879
Notes payable - long term ........................ - 1,069
Due to producers - long term ..................... 112,355 196,741
----------- -----------
Total liabilities ......................... 1,915,561 1,555,689
----------- -----------
Shareholders' Equity
12% Non-voting convertible redeemable
preferred stock: $.10 par value, 875,000
shares authorized, 235,900 shares issued
and outstanding at September 30, 1997, and
December 31, 1996: aggregate liquidation
preference, $471,800 at September 30, 1997
and December 31, 1996 ......................... 23,590 23,590
Common Stock - $.001 par value, 300,000,000
shares authorized, 28,589,095 and 19,027,516
issued and outstanding at September 30, 1997
and December 31, 1996, respectively ........... 28,589 19,027
Capital contributions in excess of par:
Attributed to preferred stock ................. 210,303 210,303
Attributed to common stock .................... 7,525,432 7,160,265
Retained earnings (deficit) .................... (5,625,934) (4,888,532)
----------- -----------
Total shareholders' equity .................... 2,161,980 2,524,653
----------- -----------
$ 4,077,541 $ 4,080,342
=========== ===========
See Notes to Consolidated Financial Statements
3
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30, September 30,
1997 1996
------------ ------------
Revenues:
Healthcare .............................. $ 291,655 $ 597,452
Entertainment ........................... 20,000 -
------------ ------------
311,655 597,452
------------ ------------
Operating Costs:
Healthcare .............................. 164,306 312,187
Entertainment ........................... 8,883 -
Selling, general and administrative expenses . 511,192 447,796
------------ ------------
684,381 759,983
------------ ------------
Net income (loss) ............................ $ (372,726) $ (162,531)
Interest income - 114
------------ ------------
Net income (loss) $ (372,726) $ (162,417)
============ ============
Weighted average number of shares outstanding 24,665,752 17,767,674
============ ============
Net income (loss) per common share $ (0.02) $ (0.01)
============ ============
See Notes to Consolidated Financial Statements
4
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
September 30, September 30,
1997 1996
------------ ------------
Revenues:
Healthcare ............................... $ 1,090,236 $ 1,731,027
Entertainment ............................ 20,000 20,150
------------ ------------
1,110,236 1,751,177
------------ ------------
Operating Costs:
Healthcare ............................... 465,385 1,008,757
Entertainment ............................ 8,883 11,203
Selling, general and administrative expenses .. 1,373,388 1,103,971
------------ ------------
1,847,656 2,123,931
------------ ------------
Net income (loss) from operations ............. (737,420) (372,754)
Interest income ............................... 17 114
------------ ------------
Net income (loss) ............................. $ (737,403) $ (372,640)
============ ============
Weighted average number of shares outstanding . 21,800,250 16,749,254
============ ============
Net income (loss) per common share $ (0.04) $ (0.02)
============ ============
See Notes to Consolidated Financial Statements
5
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOW
Nine Months Ended
September 30, September 30,
1997 1996
------------ ------------
Operating Activities
Net income (loss) ............................ $(737,402) $ (372,640)
Adjustments to reconcile net cash provided
by operating activities:
Amortization of film licenses ............... 8,883 10,590
Depreciation expense ........................ 30,342 29,942
Payment of officer's compensation with equity 28,093 -
Payment of officer's deferred compensation
with equity ................................ 23,620 -
Payment of various liabilities with equity .. 112,815 -
Payment of debt with equity.................. 40,000 -
Payment of directors compensation with equity 18,000 -
Payment of employee's compensation with equity 48,750 -
Changes in assets and liabilities:
Accounts receivable ......................... 24,804 40,025
Prepaid expenses and other current assets ... (12,962) (19,531)
Other assets ................................ 245 (1,575)
Due to/from officers ........................ 38,112 (28,860)
Due from affiliates ......................... 17,717 7,581
Accounts payable and accrued expenses ....... 282,754 28,655
--------- ---------
Net cash provided from (used for)
operating activities ...................... ( 76,229) (305,813)
--------- ---------
Investing activities:
Sale (purchase) of equipment ................ - (19,875)
--------- ---------
Financing activities:
Reduction in borrowings ..................... (110,320) (67,497)
Proceeds from borrowings .................... 262,500 ( - )
Payments to and on behalf of producers ...... (89,856) (62,743)
Proceeds from exercise of options ........... 54,850 -
Proceeds from private placements ............ 48,600 329,016
--------- ---------
Net cash provided from (used for)
financing activities ...................... 165,774 198,776
--------- ---------
Net increase (decrease in cash) ............. 89,545 (126,912)
Cash at beginning of period ................. 14,593 129,558
--------- ---------
Cash at end of period ....................... $ 104,138 $ 2,646
========= =========
Supplemental cash flow information:
Interest paid .............................. $ 6,909 $ 14,892
--------- ---------
See Notes to Consolidated Financial Statements
6
<PAGE>
JUNIPER GROUP, INC.
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, 1996, 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.
7
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21A of the Securities
Exchange Act of 1934. Actual results could differ materially from those
projected in the forward-looking statements.
OVERVIEW
- --------
Juniper Group, Inc. (formerly Juniper Features Ltd., the "Company") is a
New York Corporation. Its principal businesses are composed of two (2) segments,
healthcare and entertainment: (i) the healthcare operations are conducted
through two subsidiaries of Juniper Medical Systems, Inc. ("JMSI"), which is a
wholly owned subsidiary of the Company: (a) PartnerCare, Inc. ("PCI", formerly
Diversified Health Affiliates, Inc.), a managed care revenue enhancement company
providing various types of services such as: Physician Practice Management;
managed care revenue enhancement; performs contract compliance and line item
reviews and administration; comprehensive pricing reviews; evaluates and
corrects inaccuracies and exclusions in outpatient coding and the hospital
charge master; Management Service Organizations (MSO) and liability assessment
programs; identifies patterns and level of overcharges and collections on payor
specific basis to newly evolving integrated hospital and physician markets and
(b) Juniper Healthcare Containment Systems, Inc. ("Containment"), which develops
and provides full service healthcare networks for insurance companies and
managed care markets in the Northeast U.S.; and (ii) the entertainment segment
is conducted principally through Juniper Pictures, Inc. ("Pictures"), a wholly
owned subsidiary of Juniper Entertainment, Inc. ("JEI"), which is a wholly owned
subsidiary of the Company. Juniper Pictures, Inc. which engages in 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. The Company's operations are based at 111 Great Neck Road,
Suite 604, Great Neck, New York 11021.
RESULTS OF OPERATIONS
- ---------------------
Three Months Ended September 30, 1997 vs Three Months Ended September 30, 1996
- ------------------------------------------------------------------------------
The Company's revenues decreased to $312,000 in the third quarter of 1997
from $597,000 in the third quarter of 1996, representing a 48% decrease.
Revenue related to the healthcare segment decreased to $292,000 in the
third quarter of 1997 from $597,000 in the third quarter of 1996, representing a
51% decrease. The decrease in revenue during the third quarter of 1997 was
predominately attributed to Containment, which had revenue of approximately
$190,000 in the third quarter of 1997, compared to approximately $464,000 in the
third quarter of 1996, a 59% decrease. This is a result of the following two
factors: (1) a reduction in indemnity claims due to the national trend in the
markets toward managed care; and (2) a new joint venture arrangement which
replaces Containment's previous arrangement and results in lower gross revenue,
but substantially greater gross profit. PCI's revenue decreased to $101,000 in
1997, from $133,000 in 1996, a 24% decrease. This was the result of PCI's change
in direction from a DRG audit company to a Managed Care Revenue Enhancement
company.
The entertainment segment recognized $20,000 in the third quarter of 1997,
compared to no revenue in 1996. The continued absence of activity in the
entertainment segment can be attributed to the following: (i) the Company
limited its time and resources to market foreign sales due to its limited staff
and capital and the allocation of such resources to the medical segment; and
(ii) in the domestic market, a large number of the Company's more significant
films were unavailable for broadcast during the period because of scheduling
rotation with cable licensees, 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.
Healthcare operating costs decreased to $164,000 in the third quarter of
1997 from $312,000 in the third quarter of 1996, a 47% decrease. As a percentage
of revenue, operating costs of the healthcare operations increased to 56% in the
third quarter of 1997 from 52% in the third quarter of 1996. The decrease in
costs is due to the decrease in gross revenue for Containment. The increase in
operating costs as a percentage of gross revenue is due to the new Joint
Venture.
8
<PAGE>
Selling, general and administrative expenses increased to $511,000 in the
third quarter of 1997 from $448,000 in the third quarter of 1996, a 14%
increase. This increase is primarily due to increases in public relations and
promotional costs of $87,000, and bad debt expense of $83,000, due to a more
conservative evaluation of the Company's overall accounts receivable. These
increases were offset by decreases in salaries of $34,000, consulting costs of
$14,000, professional fees of $28,000, rent of $21,000 and office expenses of
$8,000.
Nine Months Ended September 30, 1997 vs Nine Months Ended September 30, 1996
- ------------------------------------------------------------------------------
The Company's revenues decreased to $1,110,000 through the third quarter of
1997 from $1,751,000 through the third quarter of 1996, a 38% decrease.
Revenue related to the healthcare segment decreased to $1,090,000 through
the third quarter of 1997 from $1,731,000 through the third quarter of 1996, a
38% decrease. The decrease in revenue through the third quarter of 1997 was
predominately attributed to Containment, which had revenue of approximately
$658,000 through the third quarter of 1997, compared to approximately $1,434,000
through the third quarter of 1996, a 54% decrease. This is a result of the
following two factors: (1) a reduction in indemnity claims due to the national
trend in the markets toward managed care; and (2) a new joint venture
arrangement which replaces Containment's previous arrangement and results in
lower gross revenue, but substantially greater gross profit. PCI's revenue
increased to $432,000 in 1997, from $297,000 in 1996, a 45% increase. This was
the result of PCI's change in direction from a DRG audit company to a Managed
Care Revenue Enhancement company.
The entertainment segment recognized $20,000 in revenue through the third
quarter of 1997, compared to $20,150 in 1996. The non-realization of more
substantial entertainment revenue through the third quarter was attributed to
the following factors: (i)the Company limited its time and resources to market
foreign sales due to the limited staff and capital and the allocation of such
resources to the medical segment; and (ii) in the domestic market, a large
number of the Company's more significant films were unavailable for broadcast
during the period because of scheduling rotation with cable licensees, 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.
Healthcare operating costs decreased to $465,000 through the third quarter
of 1997 from $1,009,000 through the third quarter of 1996, a 54% decrease. As a
percentage of revenue, operating costs of the Healthcare operations decreased to
43% through the third quarter of 1997 from 58% through the third quarter of
1996. 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 $1,373,000
through the third quarter of 1997 from $1,104,000 through the third quarter of
1996, a 16% increase. The increase in selling, general and administrative
expenses is primarily attributed to an increase in public relations and
promotional costs of $107,000, bad debt expense of $128,000 due to a more
conservative evaluation of the Company's overall accounts receivable,
compensation of $19,000 issued to the Company's directors and regulatory fees of
$18,000.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital deficiency at September 30, 1997 was $768,000, compared to
working capital deficiency of $360,000 at December 31, 1996. The ratio of
current assets to current liabilities was .57:1 at September 30, 1997 and .74.1
at December 31, 1996. Cash flow used in operations through the third quarter of
1997 was $76,000, compared to cash flow used in operations through the third
quarter of 1996, of $306,000.
Accounts receivable - trade decreased to $770,000 from $795,000 at
December 31, 1996.
Accounts payable increased to $1,460,000 from $1,178,000 at December 31,
1996.
Although the Company plans to continue to expand its healthcare business to
the extent that resources are available, the Company has no firm material
commitments for capital expenditures in other areas of its business and has no
plans to acquire additional films.
9
<PAGE>
The Company suffers from lack of working capital. Unless the Company is
able to obtain financing from outside sources, it may not be able to satisfy its
operating cash requirements at the current level of operations. Accordingly, the
Company may be required to scale back operations substantially, which may in
turn adversly affect the future operations of the Company.
The Company currently does not have any bank lines of credit.
At the Company's annual meeting, management eliminated shareholders'
pre-emptive rights, which previously existed under New York law. Notwithstanding
these rights, the Company has on a number of occasions issued shares without
affording shareholders the opportunity to exercise pre-emptive rights and
without procuring waivers of such rights. No shareholder has alleged any damage
resulting to him as a result of the sale of shares by the Company without
offering pre-emptive rights. The amount of damages incurred by shareholders by
reason of the failure of the Company to offer pre-emptive rights, if any, is not
ascertainable with any degree of accuracy. Management believes that if claims
were asserted alleging damages, the Company may have valid defenses.
10
<PAGE>
PART II: OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
-------------------------------------------
(a) N/A
(b) N/A
(c) Common Stock, $0.001 par value, sold in the third of 1997 were as
follows:
<TABLE>
<CAPTION>
Date Purchaser Amount (#) Amt. Paid ($) Description Exemption
- -------------------- ------------------ ------------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
9/30/97 Officer 65,000 16,250 (1) 4(2)
9/30/97 Vendors 1,980,833 99,925 (2) 4(2)
9/30/97 Lenders 977,510 40,000 (3) 4(2)
</TABLE>
_______________________
(1) An officer of the Company accepted common stock in lieu of accrued salary.
(2) Eight vendors accepted common stock in lieu of unpaid fees.
(3) Two lenders accepted common stock in lieu of payment of loans.
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, and all payments due in 1993, in 1994, in 1995 and in 1996
and the payment due on March 1, June 1, and September 1, 1997 have not yet been
paid and 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 reserved 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.
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 payments which have not
yet been made. The total cash value of the arrearage of unpaid dividends is
$297,000.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit Description
- ------- -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
NONE
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 GROUP, INC.
Date:November 11, 1997
By: /s/ Vlado P. Hreljanovic
------------------------
Vlado P. Hreljanovic
Chairman of the Board, President,
Chief Executive Officer and Acting
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF INCOME FOUND ON PAGES
3 & 5 OF THE COMPANY'S FORM 10-QSB FOR THE NINE MONTHS ENDED September 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 104,138
<SECURITIES> 0
<RECEIVABLES> 770,287
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,035,024
<PP&E> 213,302
<DEPRECIATION> 128,906
<TOTAL-ASSETS> 4,077,541
<CURRENT-LIABILITIES> 1,803,206
<BONDS> 0
0
23,590
<COMMON> 28,589
<OTHER-SE> 2,109,801
<TOTAL-LIABILITY-AND-EQUITY> 4,077,541
<SALES> 0
<TOTAL-REVENUES> 1,110,236
<CGS> 0
<TOTAL-COSTS> 1,847,656
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (737,403)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (737,403)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
