UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1997
---------------------------------------------
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
--- ---
The number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date, August 8, 1997, was 24,665,752 shares
of common stock - $.001 par value.
Transitional Small Business Disclosure Format: Yes No X
--- ---
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
June December
Assets 30, 1997 31, 1996
----------- -----------
Current Assets
Cash ........................................... $ 398 $ 14,593
Accounts receivable - trade .................... 764,627 795,091
Due from affiliates ............................ 56,792 59,359
Prepaid expenses and other current assets ...... 125,212 105,995
Due from officer ............................... 18,668 23,318
----------- -----------
Total current assets ....................... 965,697 998,356
Film licenses .................................. 2,963,729 2,963,729
Property and equipment net of accumulated
depreciation of $119,043 and $98,564
respectively ................................. 94,259 114,738
Other assets ................................... 3,361 3,519
----------- -----------
$ 4,027,046 $ 4,080,342
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 1,269,742 $ 1,177,736
Notes payable - current ........................ 183,179 105,587
Due to producers - current ........................ 66,735 67,556
Due to shareholders ............................ 7,000 7,000
----------- -----------
Total current liabilities ................. 1,526,656 1,357,879
Notes payable - long term ........................ - 1,069
Due to producers - long term ..................... 159,461 196,741
----------- -----------
Total liabilities ......................... 1,686,117 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 June 30, 1997, and
December 31, 1996: aggregate liquidation
preference, $471,800 at June 30, 1997
and December 31, 1996 ......................... 23,590 23,590
Common Stock - $.001 par value, 300,000,000
shares authorized, 24,665,752 and 19,027,516
issued and outstanding at June 30, 1997
and December 31, 1996 respectively ........... 24,665 19,027
Capital contributions in excess of par:
Attributed to preferred stock ................. 210,303 210,303
Attributed to common stock .................... 7,335,580 7,160,265
Retained earnings (deficit) .................... (5,253,209) (4,888,532)
----------- -----------
Total shareholders' equity .................... 2,340,929 2,524,653
----------- -----------
$ 4,027,046 $ 4,080,342
=========== ===========
See Notes to Consolidated Financial Statements
2
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
June 30, June 30,
1997 1996
------------ ------------
Revenues:
Healthcare .............................. $ 302,492 $ 475,202
Entertainment ........................... - 11,000
------------ ------------
302,492 486,202
------------ ------------
Operating Costs:
Healthcare .............................. 124,115 289,629
Entertainment ........................... - 6,376
Selling, general and administrative expenses . 443,874 330,715
------------ ------------
566,370 626,720
------------ ------------
Net income (loss) ............................ $ (265,497) $ (140,518)
============ ============
Weighted average number of shares outstanding 21,667,012 16,583,432
============ ============
Net income (loss) per common share $ (0.01) $ (0.01)
============ ============
See Notes to Consolidated Financial Statements
3
<PAGE>
JUNIPER FEATURES, LTD.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended
June 30, June 30,
1997 1996
------------ ------------
Revenues:
Healthcare ............................... $ 798,581 $ 1,133,575
Entertainment ............................ - 20,150
------------ ------------
798,581 1,153,725
------------ ------------
Operating Costs:
Healthcare ............................... 301,079 696,570
Entertainment ............................ - 11,203
Selling, general and administrative expenses .. 862,179 656,175
------------ ------------
1,163,258 1,363,948
------------ ------------
Net income (loss) from operations ............. $ (364,677) $ (210,223)
============ ============
Weighted average number of shares outstanding . 20,359,583 16,234,449
============ ============
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 CASH FLOWS
Six Months Ended
June 30, June 30,
1997 1996
------------ ------------
Operating Activities
Net income (loss) ............................ $(364,677) $(210,223)
Adjustments to reconcile net cash provided
by operating activities:
Amortization expense......................... - 10,590
Depreciation expense ........................ 20,479 19,909
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 .. 67,740 -
Payment of directors compensation with equity 18,000 -
Payment of employees compensation with equity 32,500 -
Changes in assets and liabilities:
Accounts receivable ......................... 30,464 140,600
Prepaid expenses and other current assets ... (19,217) (17,155)
Other Assets 158 (1,464)
Due to/from officers ........................ 4,650 (32,165)
Due from affiliates ......................... 2,567 (16,812)
Accounts payable and accrued expenses ....... 92,006 (53,384)
--------- ---------
Net cash provided from (used for)
operating activities ...................... ( 63,617) (160,104)
--------- ---------
Investing activities:
Sale (purchase) of equipment ................ -- --
--------- ---------
Financing activities:
Reduction in borrowings ..................... (48,477) (135,699)
Proceeds from borrowings .................... 125,000 --
Payments to and on behalf of producers ...... (38,101) (45,896)
Proceeds from exercise of options ........... -- --
Proceeds from private placements ............ 11,000 217,344
--------- ---------
Net cash provided from (used for)
financing activities ...................... 49,422 35,749
--------- ---------
Net increase (decrease in cash) ............. (14,195) (124,355)
Cash at beginning of period ................. 14,593 129,558
--------- ---------
Cash at end of period ....................... $ 398 $ 5,203
========= =========
Supplemental cash flow information:
Interest paid .............................. $ 4,763 $ 13,437
--------- ---------
See Notes to Consolidated Financial Statements
5
<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.
6
<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, Comprehensive Pricing Reviews, MSOs and
Liability Assessment Programs 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"), a wholly owned subsidiary of the Company, 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 June 30, 1997 vs Three Months Ended June 30, 1996
- ------------------------------------------------------------------------------
The Company's revenues decreased to $302,000 in the second quarter of 1997
from $486,000 in the second quarter of 1996, representing a 38% decrease.
Revenue related to the healthcare segment decreased to $302,000 in the
second quarter of 1997 from $475,000 in the second quarter of 1996, representing
a 36% decrease. The decrease in revenue during the second quarter of 1997 was
predominately attributed to Containment, which had revenue of approximately
$184,000 in the second quarter of 1997, compared to approximately $408,000 in
the second quarter of 1996, a 55% decrease. This is a result of the following
three factors: (1) a reduction in indemnity claims due to the national trend in
the markets toward managed care; (2) a reduction in claims to be repriced from
Containment's major client. This resulted from the client's decision to rapidly
process a backlog of claims rather than delay their payment, by having
Containment reprice such claims and avail themselves of greater savings; and (3)
a new joint venture arrangement which replaces Containment's previous
arrangement and results in lower gross revenue, but substantially greater gross
profit margins. PCI's revenue increased to $119,000 in 1997, from $67,000 in
1996, a 78% 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 no revenue in the second quarter of
1997, compared to $11,000 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 $124,000 in the second quarter of
1997 from $290,000 in the second quarter of 1996, a 57% decrease. As a
percentage of revenue, operating costs of the healthcare operations decreased to
41% in the second quarter of 1997 from 61% in the second 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 $444,000 in the
second quarter of 1997 from $331,000 in the second quarter of 1996, a 34%
increase. This increase is primarily due to increases in healthcare salaries of
$63,000, legal expenses of $39,000, related to the issuance of the shareholder's
proxy statement, and various litigations, compensation of $18,000 issued to the
Company's directors and bad debt expense of $18,000 due to an increase in PCI's
revenue and a more conservative evaluation of the Company's overall accounts
receivable. Most of the Company's increases in selling, general and
administrative expenses were related to the management changes in PCI and the
corresponding redirection of time and resources of management initiatives to
re-engineer and diversify product lines through the development of the new
information systems.
7
<PAGE>
Six Months Ended June 30, 1997 vs Six Months Ended June 30, 1996
- ------------------------------------------------------------------------------
The Company's revenues decreased to $799,000 through the second quarter of
1997 from $1,154,000 through the second quarter of 1996, a 31% decrease.
Revenue related to the healthcare segment decreased to $799,000 through the
second quarter of 1997 from $1,134,000 through the second quarter of 1996, a 30%
decrease. The decrease in revenue through the second quarter of 1997 was
predominately attributed to Containment, which had revenue of approximately
$468,000 through the second quarter of 1997, compared to approximately $970,000
through the second quarter of 1996 a 52% decrease. This is a result of the
following three factors: (1) a reduction in indemnity claims due to the national
trend in the markets toward managed care; (2) a reduction in claims to be
repriced from Containment's major client. This resulted from the client's
decision to rapidly process a backlog of claims rather than delay their payment,
by having Containment reprice such claims and avail themselves of greater
savings; and (3) a new joint venture arrangement which replaces Containment's
previous arrangement and results in lower gross revenue, but substantially
greater gross profit margins. PCI's revenue increased to $331,000 in 1997, from
$163,000 in 1996, a 103% 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 no revenue through the second
quarterof 1997, compared to $20,000 in 1996. The non-realization of
entertainment revenue in both quarters 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 $301,000 through the second quarter
of 1997 from $697,000 through the second quarter of 1996, a 57% decrease. As a
percentage of revenue, operating costs of the Healthcare operations decreased to
38% through the second quarter of 1997 from 61% through the second 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 $862,000 through
the second quarter of 1997 from $656,000 through the second quarter of 1996, a
31% increase. The increase in selling, general and administrative expenses is
primarily attributed to an increase in healthcare salaries of $60,000, bad debt
expense of $45,000 due to an increase in PCI revenue and a more conservative
evaluation overall of the Company's accounts receivable, the cost of the annual
meeting of $41,000, legal expenses of $28,000, related to the issuance of the
shareholder's proxy statement and various litigations, and compensation of
$19,000 issued to the Company's directors.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Working capital deficiency at June 30, 1997 was $561,000, compared to
working capital deficiency of $360,000 at December 31, 1996. The ratio of
current assets to current liabilities was .63:1 at June 30, 1997 and .74.1 at
December 31, 1996. Cash flow used in operations during the second quarter of
1997 was $64,000, compared to cash flow used in operations during the second
quarter of 1996, of $160,000.
Accounts receivable - trade decreased to $765,000 from $795,000 at
December 31, 1996.
Accounts payable increased to $1,270,000 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.
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 1997. If the Company is unable to fund its operating cash flow
needs, the Company may scale back operations.
The Company currently does not have any bank lines of credit.
8
<PAGE>
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.
9
<PAGE>
PART II: OTHER INFORMATION
Item 2. Changes in Securities
-----------------------
(a) The information disclosed in Item 4 below is incorporated herein by
reference.
(b) N/A
(c) Common Stock, $0.001 par value, sold in the second quarter of 1997 were as
follows:
<TABLE>
<CAPTION>
Date Purchaser Amount (#) Amt. Paid ($) Description Exemption
- -------------------- ------------------ ------------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
6/18/97 Officers 1,515,679 59,370 (1) 4(2)
6/18/97 Directors 1,450,000 43,500 (2) 4(2)
6/18/97 Vendors 180,000 6,400 (3) 4(2)
6/3/97 Consultant 366,667 11,000 (4) Reg. S
</TABLE>
_______________________
(1) Two officers of the Company accepted common stock in lieu of accrued
salary.
(2) Compensation issued to the Company's directors for 1997.
(3) Three vendors accepted common stock in lieu of unpaid fees.
(4) A non-U.S. consultant accepted common stock in lieu of consulting fees
relating to public relations services provided to the Company.
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, and June 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
$283,000.
10
<PAGE>
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:August 12, 1997
By:/s/ Vlado P. Hreljanovic
------------------------
Vlado P. Hreljanovic
Chairman of the Board, President,
Chief Executive Officer and Acting
Chief Financial Officer
12
<PAGE>
EXHIBIT INDEX
Exhibit Description
27.1 Financial Data Schedule
<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 & 4 OF THE COMPANY'S FORM 10-QSB FOR THE SIX MONTHS ENDED JUNE 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> Jun-30-1997
<CASH> 398
<SECURITIES> 0
<RECEIVABLES> 933,553
<ALLOWANCES> 168,926
<INVENTORY> 0
<CURRENT-ASSETS> 965,697
<PP&E> 213,302
<DEPRECIATION> 119,043
<TOTAL-ASSETS> 4,027,046
<CURRENT-LIABILITIES> 1,526,656
<BONDS> 0
0
23,590
<COMMON> 24,665
<OTHER-SE> 2,292,674
<TOTAL-LIABILITY-AND-EQUITY> 4,027,046
<SALES> 0
<TOTAL-REVENUES> 798,581
<CGS> 0
<TOTAL-COSTS> 1,163,258
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (364,677)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (364,677)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
