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 September 30, 2000
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Commission file number 0-19170
JUNIPER GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 11-2866771
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
111 Great Neck Road, Suite 604, Great Neck, New York 11021
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(Address of principal executive offices)
(516) 829-4670
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(Issuer's telephone number)
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(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, November 3, 2000, was 8,616,738
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
September December
Assets 30, 2000 31, 1999
--------- ----------
Current Assets
Cash ........................................... $ 6,903 $ 3,290
Accounts receivable - trade .................... 479,642 329,875
Prepaid expenses and other current assets ...... 219,516 206,558
Due from officer ............................... - 3,857
----------- -----------
Total current assets ....................... 706,061 543,580
Film licenses .................................. 2,887,267 2,887,267
Property and equipment net of accumulated
depreciation of $134,360 and $123,354
respectively ................................. 260,976 110,462
Investment in NetDIVE, Inc...................... 200,000 200,000
Goodwill ....................................... 559,886 409,886
Other assets ................................... 78,842 82,620
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$ 4,693,032 $ 4,233,815
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 876,101 $ 796,104
Notes payable - current ........................ 75,180 52,910
Due to officer - ............................... 90,905 -
Due to shareholders ............................ 7,000 7,000
----------- -----------
Total current liabilities ................. 1,049,186 856,014
Due to producers - long term ..................... 12,186 11,958
Notes payable - long term ........................ 78,857 400,606
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Total liabilities ......................... 1,140,229 1,268,578
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Shareholders' Equity
12% Non-voting convertible redeemable
preferred stock: $.10 par value, 875,000
shares authorized, 34,817 and 42,747 shares
issued and outstanding at September 30, 2000 and
December 31, 1999, respectively: aggregate
liquidation preference, $69,634 and $85,494 at
September 30, 2000 and December 31, 1999,
Respectively ................................... 3,482 4,275
Common Stock - $.001 par value, 75,000,000
shares authorized, 9,076,810 and 6,741,618
issued and outstanding at September 30, 2000
and December 31, 1999, respectively ........... 9,077 6,742
Capital contributions in excess of par:
Attributed to preferred stock ................. 31,039 38,109
Attributed to common stock .................... $12,676,575 11,409,017
Retained earnings (deficit) .................... (9,167,370) (8,492,906)
----------- -----------
Total shareholders' equity .................... 3,552,803 2,965,237
----------- -----------
$ 4,693,032 $ 4,233,815
=========== ===========
See Notes to Consolidated Financial Statements
2
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30, September 30,
2000 1999
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Revenues:
Healthcare ............................ $ 78,446 $ 276,181
Entertainment and technology services.. 105,767 12,000
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184,213 288,181
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Operating Costs:
Healthcare .............................. 15,269 29,149
Entertainment and technology services.... 117,359 -
Selling, general and administrative expenses . 327,089 563,817
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459,717 592,966
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Net income (loss) before income (expense)
from minority interest...................... (275,504) (304,785)
Income (expense) from minority interest....... - -
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Net income (loss) ............................ $ (275,504) (304,785)
============ ============
Weighted average number of shares outstanding 8,616,479 5,574,522
============ ============
Net income (loss) per common share $ (0.03) $ (0.06)
============ ============
See Notes to Consolidated Financial Statements
3
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
September 30, September 30,
2000 1999
------------ ------------
Revenues:
Healthcare ........................... $ 471,277 $ 571,207
Entertainment and technology services. 238,331 12,000
------------ ------------
709,608 583,207
Operating Costs:
Healthcare .............................. 58,837 90,224
Entertainment and technology services.... 189,901 4,470
Selling, general and administrative expenses . 1,135,334 1,250,820
------------ ------------
1,384,072 1,345,514
Net income (loss) before income (expense)
from minority interest................... (674,464) (762,307)
Income (expense) from minority interest....... - (99,548)
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Net income (loss) ............................ $ (674,464) $ (861,855)
============ ============
Weighted average number of shares outstanding. 7,847,624 4,342,516
============ ============
Net income (loss) per common share............ $ (0.09) $ (0.20)
============ ============
See Notes to Consolidated Financial Statements
4
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30, September 30,
2000 1999
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Operating Activities:
Net income (loss) ............................. $ (674,464) $ (861,855)
Adjustments to reconcile net cash provided
by operating activities:
Depreciation expense ......................... 25,960 20,798
Loss from minority interest .................. - 99,548
Payment of officer's compensation with
equity....................................... 30,705 71,301
Payment of various liabilities with equity .. 231,157 153,750
Payment of employees compensation with equity - 20,384
Changes in assets and liabilities:
Accounts receivable .......................... (149,767) (35,564)
Prepaid expenses and other current assets..... 65,216 69,894
Other assets ................................. 3,778 (13,326)
Due to/from officers and shareholders......... 94,762 22,964
Due from affiliates .......................... (566) (551)
Accounts payable and accrued expenses........ 10,358 (8,576)
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Net cash provided from (used for)
operating activities ........................ (362,861) (461,233)
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Investing activities:
Development of software ...................... (117,248) -
Sale (purchase) of equipment ................. (59,226) (6,584)
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Net cash provided from (used for)
investing activities ........................ (176,474) (6,584)
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Financing activities:
Investment in Nuclear Cardiac Imaging, Inc.... - (170,893)
Investment in NetDIVE, Inc. .................. - (200,000)
Reduction in borrowings ...................... (25,000) (112,140)
Proceeds from borrowings...................... 32,120 870,200
Payments to and on behalf of producers ....... 228 (25,092)
Initial capitalization of CDA ................ 7,100 -
Proceeds from exercise of options ............ - 45,000
Proceeds from private placements ............. 528,500 15,000
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Net cash provided from (used for)
financing activities ........................ 542,948 422,075
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Net increase (decrease) in cash .............. 3,613 (45,742)
Cash at beginning of period .................. 3,290 48,925
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Cash at end of period ........................ $ 6,903 $ 3,183
============ ===========
Supplemental cash flow information:
Interest paid ............................... $ 365 $ 11,709
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See Notes to Consolidated Financial Statements
5
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Preferred Stock Common Stock
--------------------------- ----------------------------
Capital Capital
Contributions Contributions Retained
Par Value in excess Par Value in excess Earnings
at $.10 of par at $.001 of par (Deficit) Total
---------- --------------- --------- -------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1999 $ 4,275 $ 38,109 $ 6,742 $11,409,017 $(8,492,906) $ 2,965,237
Initial capitalization
of Computer Design
Associates, Ltd. - - - 7,100 - 7,100
Acquisition of Computer
Design Associates, Ltd. - - 150 149,850 - 150,000
Shares issued as payment
for various expenses .. - - 305 245,420 - 245,725
Shares issued as
compensation to officers - - 70 30,635 - 30,705
Shares issued from
exercise of stock options - - 464 (464) - -
Shares issued in private
placements ...... - - 983 527,517 - 528,500
Shares issued for the
conversion of debt
to equity - - 300 299,700 - 300,000
Conversion of preferred
stock to common stock (793) (7,070) 63 7,800 - -
Net (loss) for the six
months ended
September 30, 2000..... - - - - (674,464) (674,464)
_______ _________ ________ ____________ _________ __________
Balance,
September 30, 2000 $ 3,482 $ 31,039 $9,077 $ 12,676,575 $(9,167,370) $ 3,552,803
======= =========== ======== ============ =========== ===========
</TABLE>
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, 1999 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
The following discussion and analysis of financial condition and results of
operations should be read in conjunction with the Company's consolidated
financial statements and notes thereto included elsewhere herein. The statements
disclosed herein include forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company's actual results could
differ materially from those projected in the forward-looking statements as a
result of certain risks and uncertainties, including, but not limited to, the
Company's historical lack of profitability, the Company's need for additional
financing, competition in the managed healthcare and in the entertainment and
technology services industry, and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission.
OVERVIEW
Juniper Group, Inc. (the "Company")is a Nevada Corporation. Its principal
businesses are composed of two segments, 1) healthcare, and 2) entertainment and
technology services: (i) the healthcare operations are conducted principally
through PartnerCare, a subsidiary of Juniper Medical Systems, Inc. ("JMSI"),
which is a wholly owned subsidiary of the Company. PartnerCare, Inc. ("PCI"), is
a managed care revenue enhancement company providing various types of services
such as: accounts receivable management, regulatory reimbursement compliance,
charge-off reviews, revenue collections, and other related business office
outsourcing services to newly evolved integrated hospital and physician markets;
and (ii) the entertainment and technology segment is conducted principally
through 1)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., Internet media, home video, pay-per view, pay
television, cable television, networks and independent syndicated television
stations) in the domestic and foreign marketplace; and 2)through Computer Design
Associates, Ltd. ("CDA"), which is a wholly owned subsidiary of the Company.
CDA, was acquired during the first quarter of 2000, is a systems integration
company, providing, through strategic alliances, technology services in the
areas of communications, Internet services, DSL, e-commerce, web developing and
hosting. The Company's operations are based at 111 Great Neck Road, Suite 604,
Great Neck, New York 11021.
On March 17, 2000, the Company acquired CDA. CDA provides the Company with
the means to offer its customers the technology services needed to correct
deficiencies in their communication and operation systems. The acquisition was
completed by exchanging all of CDA's outstanding shares of common stock for
150,000 shares of the Company's common stock valued at $150,000, substantially
all of which was recorded as Goodwill. CDA has a high synergistic value to both
the healthcare and entertainment industries in which the Company currently
operates.
8
<PAGE>
RESULTS OF OPERATIONS
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Three Months Ended September 30, 2000 Vs Three Months Ended September 30, 1999
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Revenue related to the Healthcare segment decreased to $78,000 in the third
quarter of 2000 from $276,000 in the third quarter of 1999, representing a 72%
decrease. The decrease in revenue during the third quarter of 2000 was
predominately attributed to the discontinued NYPHRM Project.
The entertainment and technology segment recognized $106,000 of revenue in
the third quarter of 2000, which represents revenue from the technology sector
and $12,000 of revenue in 1999, which represents the entertainment segment,
representing an 89% increase. 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. The Company is currently utilizing its
resources to build the technology segment of its business, and has not devoted
resources toward the promotion and solicitation of the films in 2000. However,
the Company is looking for outside salesmen to help market and merchandise the
films that are not currently under license.
Healthcare operating costs decreased to $15,000 in the third quarter of
2000 from $29,000 in the third quarter of 1999, a 48% decrease. As a percentage
of revenue, operating costs of the healthcare operations increased to 19% in the
third quarter of 2000 from 11% in the third quarter of 1999. This was primarily
due to certain fixed operating costs which increased as a percentage of sales
when revenue is lower, as in the third quarter of 2000.
The entertainment and technology segment recognized operating costs of
$117,000 in the third quarter of 2000, which was predominately attributed to the
technology service business and no operating costs in the third quarter of 1999.
Selling, general and administrative expenses decreased to $327,000 in the
third quarter of 2000 from $564,000 in the third quarter of 1999, a 42%
decrease. This decrease is primarily due to an increase in consulting of
$98,000, offset by decreases in salaries of $127,000, bad debt expenses of
$56,000, legal expenses of $19,000 and commissions of $109,000. The increase in
consulting expenses was attributed to the engagement of a consultant in
connection with the Company's continued and expanded efforts in the technology
sector, as well as, an additional consultant engaged to assist in the
administration and operations of PCI in the transition from the prior president.
The decrease in salaries was primarily due to the early termination of PCI's
prior president's employment contract, and the CEO foregoing his salary for the
third quarter. The decrease in bad debt expense was due to reduced sales in the
healthcare segment. The decrease in legal expense was due to the costs incurred
in 1999 in connection with a potential corporate acquisition, as well as the
costs reserved by PCI in connection with the NYPHRM engagements. The decrease in
commissions was primarily due to the sales incurred in 1999 by PCI in connection
with certain contracts.
Nine Months Ended September 30, 2000 vs Nine Months Ended September 30, 1999
----------------------------------------------------------------------------
Revenue related to the Healthcare segment decreased to $471,000 through the
third quarter of 2000 from $571,000 through the third quarter of 1999,
representing an 18% decrease. The decrease in revenue through the third quarter
of 2000 is predominately attributed to the reduced revenue from the discontinued
NYPHRM Project.
9
<PAGE>
The entertainment and technology segment recognized revenue of $238,000
through the third quarter of 2000, and $12,000 of revenue through the third
quarter of 1999. This revenue was predominantly attributable to the technology
sector. 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. The Company is currently utilizing its resources to build the
technology segment of its business, and has not devoted resources toward the
promotion and solicitation of the films in 2000. However, the Company is looking
for outside salesmen to help market and merchandise the films that are not
currently under license.
Healthcare operating costs decreased to $59,000 through the third quarter
of 2000 from $90,000 in the third quarter of 1999, a 34% decrease. As a
percentage of revenue, operating costs of the healthcare operations decreased to
12% through the third quarter of 2000 from 16% through the third quarter of
1999. The decrease is due to the fact that certain fixed operating costs
decreased as a percentage of sales due to the discontinued NYPHRM Project
resulting in a reduction of staff.
The entertainment and technology segment recognized operating costs of
$189,901 through the third quarter of 2000, which was predominately attributed
to the technology service business. There were minimal operating costs for this
segment through the third quarter of 1999.
Selling, general and administrative expenses decreased to $1,135,000
through the third quarter of 2000 from $1,251,000 through the third quarter of
1999, representing a 9% decrease. The decrease is primarily due to the CEO
foregoing his salary for the second and third quarters of 2000, and the
termination of the PCI's president's employment contract representing a combined
$135,000 salary decrease, and a decrease in legal expense of $125,000,
commissions of $123,000 and bad debt of $35,000. The decrease in legal expense
was due to the costs incurred in 1999 in connection with a potential corporate
acquisition, as well as the costs reserved by PCI in connection with the NYPHRM
engagements. The decrease in commissions and bad debt was primarily due to the
sales incurred in 1999 by PCI in connection with certain contracts. These
decreases were offset by an increase in consulting expense of $293,000 for
technical engineers associated with CDA and consulting expenses attributed to
the engagement of a consultant in connection with the Company's continued and
expanded efforts to grow through acquisitions, as well as, an additional
consultant engaged to assist in administration and operations of PCI in the
transition from the prior president.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Working capital at September 30, 2000 was ($343,000), compared to working
capital of ($312,000) at December 31, 1999. The ratio of current assets to
current liabilities was 0.67:1 at September 30, 2000 and 0.64:1 at December 31,
1999. Cash flow used for operations through the third quarter of 2000 was
$(363,000), compared to cash flow used by operations through the third quarter
of 1999, of $(461,000).
Accounts receivable - trade increased to $480,000 at September 30, 2000
from $330,000 at December 31, 1999.
Accounts payable decreased to $876,000 at September 30, 2000 from $796,000
at December 31, 1999.
10
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Although the Company plans to continue to expand both segments its
entertainment and technology services segment of its 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 may not have sufficient liquidity to meet its
operating cash requirements for the current level of operations during the
remainder of 2000. During the third quarter of calendar 2000, the Company has
raised greater than $128,000 from the sale of its common stock or the issuance
of corporate notes.
The Company will require additional financing. Although the Company may be
able to obtain external financing through the sale of its securities, there can
be no assurance that financing will be available, or if available, on terms
acceptable to the Company. If the Company is unable to fund its operating cash
flow needs, the Company may be required to substantially curtail operations.
The Company currently does not have any bank lines of credit.
11
<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) Shares of Common Stock, $0.001 par value, sold in the third quarter
of 2000 were as follows:
<TABLE>
<CAPTION>
No.
Date Purchaser of Shares Consideration Exemption
----------- --------- ---------- ----------------------------- ----------
<S> <C> <C> <C> <C>
7/7-9/30/00 Private
Holders 565,005 Debentures for $404,350 were
converted to common stock 4(2)
7/7-7/30/00 Vendors 29,421 Vendors accepted common stock in
lieu of unpaid fees in the amount
of $26,118. 4(2)
7/1-9/30/00 Private 192,904 Exercise of Options 4(2)
Holders
______________________
</TABLE>
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 September 1, September 1, December 1, March 1, and September 1, in
cash or in shares of Common Stock having an equivalent fair market value. Unpaid
dividends on the Company's Preferred Stock cummulate. The quarterly payments due
on September 1 and December 1, 1992, and all payments due in 1993, in 1994, in
1995, in 1996, in 1997, in 1998, in 1999 and the payment due on September 1,
2000 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.
12
<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 payments which have not
yet been made. Based upon the current outstanding shares of Preferred Stock of
34,817, the total cash value of the arrearage of unpaid dividends at September
30, 2000, was $78,383.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit Description
10.7 Computer Design Associates, Ltd. Stock Purchase Agreement.
27.1 Financial Data Schedule
(b) Reports on Form 8-K.
NONE
13
<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:___________________________
By:/s/ Vlado P. Hreljanovic
------------------------
Vlado P. Hreljanovic
Chairman of the Board, President,
Chief Executive Officer and Acting
Chief Financial Officer
14
