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, 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, August 7, 2000, was 8,049,996 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, 2000 31, 1999
------ -------- --------
Current Assets
Cash ........................................... $ 6,505 $ 3,290
Accounts receivable - trade .................... 418,867 329,875
Due from affiliates ............................ - 44
Investment in NCI .............................. - -
Prepaid expenses and other current assets ...... 263,933 206,514
Due from officer ............................... - 3,857
----------- -----------
Total current assets ....................... 689,305 543,580
Film licenses .................................. 2,887,267 2,887,267
Property and equipment net of accumulated
depreciation of $120,171 and $123,354
respectively ................................. 245,214 110,462
Investment in NetDIVE, Inc...................... 200,000 200,000
Goodwill ....................................... 559,886 409,886
Other assets ................................... 82,739 82,620
--------- ---------
$ 4,664,411 $ 4,233,815
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses .......... $ 742,010 $ 796,104
Notes payable - current ........................ 349,125 52,910
Due to officer - ............................... 51,873 -
Due to producers - current ..................... - -
Due to affiliates .............................. 442 -
Due to shareholders ............................ 7,000 7,000
----------- -----------
Total current liabilities ................. 1,150,450 856,014
Due to producers - long term ..................... 11,958 11,958
Notes payable - long term ........................ 104,165 400,606
------------ ------------
Total liabilities ......................... 1,266,573 1,268,578
------------ ------------
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 June 30, 2000 and
December 31, 1999, respectively: aggregate
liquidation preference, $69,634 and $85,494 at
June 30, 2000 and December 31, 1999,
respectively .................................. 3,482 4,275
Common Stock - $.001 par value, 75,000,000
shares authorized, 8,289,481 and 6,741,618
issued and outstanding at June 30, 2000
and December 31, 1999, respectively ........... 8,289 6,742
Capital contributions in excess of par:
Attributed to preferred stock ................. 31,039 38,109
Attributed to common stock .................... $12,246,894 11,409,017
Retained earnings (deficit) .................... (8,891,866) (8,492,906)
----------- ----------
Total shareholders' equity .................... 3,397,838 2,965,237
----------- ----------
$ 4,664,411 $ 4,233,815
=========== ===========
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,
2000 1999
------------ ------------
Revenues:
Healthcare .............................. $ 145,641 $ 141,097
Entertainment and technology services.... 49,360 -
------------ ------------
195,001 141,097
------------ ------------
Operating Costs:
Healthcare .............................. 24,138 29,189
Entertainment and technology services.... 28,371 4,650
Selling, general and administrative expenses . 339,536 362,516
------------ ------------
392,045 396,355
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Net income (loss)before income (loss)from
minority interest........................... (197,044) (255,258)
Income (loss) from minority interest ......... - (31,117)
------------ ------------
Net income (loss)............................. $ (197,044) $ (286,275)
============ ============
Weighted average number of shares outstanding 7,881,593 4,060,460
============ ============
Net income (loss) per common share $ (0.03) $ (0.07)
============ ============
See Notes to Consolidated Financial Statements
3
<PAGE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended
June 30, June 30,
2000 1999
------------ ------------
Revenues:
Healthcare .............................. $ 392,831 $ 295,026
Entertainment and technology services.... 132,564 --
------------ ------------
525,395 295,026
Operating Costs:
Healthcare .............................. 43,568 61,075
Entertainment and technology services.... 72,542 4,650
Selling, general and administrative expenses . 808,245 686,823
------------ -----------
924,355 752,548
------------ -----------
Net income (loss) before income (loss)from
minority interest ........................... (398,960) (457,522)
Income (loss) from minority interest ......... - (99,548)
------------ ------------
Net income (loss) ............................ $ (398,960) $ (557,070)
============ ============
Weighted average number of shares outstanding 7,463,197 3,716,304
============ ============
Net income (loss) per common share $ (0.05) $ (0.15)
============ ============
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,
2000 1999
------------ ------------
Operating Activities
Net income (loss) ............................ $ (398,960) $ (557,070)
Adjustments to reconcile net cash provided
by operating activities:
Settlement expense .......................... -
Depreciation expense ........................ 7,732 14,138
Gain on disposition of assets ............... - -
Loss from minority interest.................. - 99,548
Payment of officer's compensation with equity 30,705 64,189
Payment of various liabilities with equity .. 213,981 57,551
Payment of employees compensation with equity - 20,384
Changes in assets and liabilities:
Accounts receivable ......................... (88,992) 59,992
Prepaid expenses and other current assets ... (57,419) (1,440)
Other assets ................................ (119) (13,327)
Due to/from officers ........................ 55,730 (41,010)
Due from affiliates ......................... 486 (509)
Accounts payable and accrued expenses ....... (61,440) 180,683
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Net cash provided from (used for) (298,296) (116,871)
operating activities ...................... ------------ ---------
Investing activities:
Sale (purchase) of equipment ................ (142,484) (2,386)
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Financing activities:
Investment in Nuclear Cardiac Imaging........ - (170,893)
Reduction in borrowings ..................... (25,000) (103,455)
Proceeds from borrowings .................... 32,120 358,700
Payments to and on behalf of producers ...... - (25,092)
Initial Capitalization of CDA ............... 7,100 -
Proceeds from private placements ............ 429,775 15,000
------------ ---------
Net cash provided from (used for)
financing activities ...................... 443,995 74,260
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Net increase (decrease in cash) ............. 3,215 (44,997)
Cash at beginning of period ................. 3,290 48,925
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Cash at end of period ....................... $ 6,505 $ 3,928
============ =========
Supplemental cash flow information:
Interest paid .............................. $ 365 $ 10,358
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See Notes to Consolidated Financial Statements
5
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<TABLE>
JUNIPER GROUP, INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<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
Equity of Computer
Design Associates,
Ltd. at acquisition - - - 7,100 - 7,100
Acquisition of
Computer Design
Associates, Ltd. - - 150 149,850 - 150,000
Shares issued as
payment for
various expenses .. - - 268 213,713 - 213,981
Shares issued as
compensation
to officers .. - - 70 30,635 - 30,705
Shares issued from
exercise of
stock options .. - - 270 (270) - -
Shares issued in
private placements - - 726 429,049 - 429,775
Conversion of
preferred stock to
common stock (793) (7,070) 63 7,800 - -
Net (loss)for the
six months
Ended June 30, 2000 - - - - (398,960) (398,960)
_______ _________ _______ ___________ _________ __________
Balance,
June 30, 2000 $ 3,482 $ 31,039 $ 8,289 $12,246,894 $(8,891,866) $ 3,397,838
See Notes to Consolidated Financial Statements
6
<PAGE>
</TABLE>
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
industry, and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission.
OVERVIEW
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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 Compan'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. Under the terms of the acquisition, as
performance based consideration, the Company may become obligated to issue
300,000 additional shares of common stock, if certain projections are achieved
at various times throughout the calendar year 2000.
Further, due to the increasing demand for streaming of videos, as well as
live entertainment product, the Company has begun introducing itself as a
provider of such services to the entertainment industry. Accordingly, CDA has a
high synergistic value to both the healthcare and entertainment industries in
which the Company currently operates.
8
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended June 30, 2000 Vs Three Months Ended June 30, 1999
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Revenue related to the Healthcare segment increased to $146,000 in the
second quarter of 2000 from $141,000 in the second quarter of 1999, representing
a 4% increase. The revenue during the second quarter of 2000 was predominately
attributed to sustaining the Company's level of market penetration.
The entertainment and technology segment recognized $49,000 of revenue in
the second quarter of 2000, which represents revenue from the technology sector
and no revenue in 1999. 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 $24,000 in the second quarter of
2000 from $29,000 in the second quarter of 1999, a 17% decrease. As a percentage
of revenue, operating costs of the healthcare operations decreased to 16% in the
second quarter of 2000 from 21% in the second 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 second quarter of 1999.
The entertainment and technology segment recognized operating costs of
$28,000 in the second quarter of 2000, which was exclusively attributed to the
technology service business. There were minimal operating costs for this segment
in the second quarter of 1999.
Selling, general and administrative expenses decreased to $340,000 in the
second quarter of 2000 from $363,000 in the second quarter of 1999, a 6%
decrease. This decrease is primarily due to increase in consulting of $48,000
and the additional expenses attributed to CDA of $58,000, offset by decrease in
salaries of $62,000, legal expenses of $65,000 and commissions of $13,000. The
decrease in salaries was primarily due to the early termination of PCI's prior
president's employment contract. The increase in consulting expenses was
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 the administration and operations of
PCI in the transition from the prior president. 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.
Six Months Ended June 30, 2000 vs Six Months Ended June 30, 1999
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Revenue related to the Healthcare segment increased to $393,000 through the
second quarter of 2000 from $295,000 through the second quarter of 1999,
representing a 33% increase. The increase in revenue through the second quarter
of 2000 was predominately attributed to the revenue from an increase in market
penetration.
9
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The entertainment and technology segment recognized revenue of $133,000
through the second quarter of 2000, and no revenue through the second quarter of
1999. This revenue was completely 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 $44,000 through the second quarter
of 2000 from $61,000 in the second quarter of 1999, a 28% decrease. As a
percentage of revenue, operating costs of the healthcare operations decreased to
11% through the second quarter of 2000 from 21% through the second quarter of
1999. The decrease is due to the fact that certain fixed operating costs
increased as a percentage of sales when revenue is lower, as in the first six
months of 1999.
Selling, general and administrative expenses increased to $808,000 through
the second quarter of 2000 from $687,000 through the second quarter of 1999, an
18% increase. This increase is primarily due to increases in consulting expense
of $174,000 and the additional expenses associated with CDA of $83,000, offset
by decreases in legal expense of $106,000 and commissions of $13,000. The
increase in consulting expenses was 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 the
administration and operations of PCI in the transition from the prior president.
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.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 2000 was ($461,000), compared to working
capital of ($312,000) at December 31, 1999. The ratio of current assets to
current liabilities was 0.60:1 at June 30, 2000 and 0.64:1 at December 31, 1999.
Cash flow used for operations through the second quarter of 2000 was $(298,000),
compared to cash flow used by operations through the second quarter of 1999, of
$(117,000).
Accounts receivable - trade increased to $419,000 at June 30, 2000 from
$330,000 at December 31, 1999.
Accounts payable decreased to $742,000 at June 30, 2000 from $796,000 at
December 31, 1999.
Although the Company plans to continue to expand both segments of its
business to the extent that resources are available, particularly through the
utilization of CDA's services, the Company has no firm material commitments for
capital expenditures or film acquisitions.
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 second quarter of calendar 2000, the Company has
raised greater than $400,000 from the sale of its common stock or the issuance
of corporate notes.
10
<PAGE>
Based upon the expected revenue of CDA, the Company expects the cash flow
from this subsidiary to contribute positively by year end. However, 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
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 through the second quarter
of 2000 were as follows:
<TABLE>
<CAPTION>
No.
Date Purchaser of Shares Consideration Exemption
----------- --------- ---------- ----------------------------- ----------
<S> <C> <C> <C> <C>
4/4-6/30/00 Private
Holders 456,800 Payment in cash 4(2)
4/30-6/30/00 Vendors 151,525 Vendors accepted common stock in
lieu of unpaid fees in the amount
of $97,355. 4(2)
5/16-6/30/00 Private 94,650 Exercise of Options 4(2)
Holders
4/12-6/30/00 Private 63,440 Conversion of preferred stock to
Holders common stock 4(2)
______________________
</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 June 1, September 1, December 1, March 1, and June 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, in 1996, in 1997, in 1998, in 1999 and the payment due on June 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. The total cash value of the arrearage of unpaid dividends at June
30, 2000, was $64,417.
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
13
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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:
------------------------
Vlado P. Hreljanovic
Chairman of the Board, President,
Chief Executive Officer and Acting
Chief Financial Officer
14
