SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] Quarterly Report Pursuant to Section 13 or
15(d) Securities Exchange Act of 1934 for Quarterly
Period Ended September 30, 2001
- -OR-
[ ] Transition Report Pursuant to Section 13 or
15(d) of the Securities And Exchange Act of 1934
for the transaction period from _________
to________
Commission File Number 333-39942
The Jarrett/Favre Driving Adventure, Inc.
- --------------------------------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-3564984
- --------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization
3660 Maguire Boulevard, Suite 101, Orlando FL 32803
- --------------------------------------------
(Address of principal executive offices, Zip Code)
(888) 467-2231
- --------------------------------------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the
preceding 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 outstanding shares of the
registrant's common stock,
September 30, 2001: Common Stock - 13,738,500
2
PART I -- FINANCIAL INFORMATION
The Jarrett/Favre Driving Adventure, Inc.
(A Development Stage Company)
Item 1. Financial Statements
Balance Sheets,
September 30, 2001 (unaudited) 3
Statements of Operations for the
three and nine months ended
September 30, 2001 and 2000,
(unaudited) 4
Statements of Cash Flows for the
nine months ended September 30,
2001 and 2000(unaudited) 5
Notes to financial statements 6
3
The Jarrett/Favre Driving Adventure, Inc.
Balance Sheet
September 30, 2001
ASSETS
Current assets:
<s> <c>
Cash $ 5,133
Accounts receivable 8,990
Inventory 5,008
Prepaid expenses 66,121
---------
Total current assets 85,252
Property and equipment, at cost, net of
accumulated depreciation of $ 229,087 425,020
Other assets 7,320
---------
$ 517,592
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 18,782
Accounts payable 140,495
Accrued expenses 47,736
Accrued salaries - officers 240,000
Deferred revenue 124,842
Shareholder advances 300,002
---------
Total current liabilities 871,857
Long-term debt 65,565
-------
Total liabilities 937,422
-------
Stockholders' equity:
Common stock, $ .01 par value,
100,000,000 shares authorized
13,738,500 outstanding 137,385
Additional paid-in capital 3,232,784
Subscribed shares 10,000
Unearned services (663,976)
Deficit (3,136,023)
-----------
Total stockholders' equity (419,830)
-----------
$ 517,592
===========
The accompanying notes are an integral part of these financial
statements.
4
The Jarrett/Favre Driving Adventure, Inc.
Statement of Operations
3 Mos. Ended 3 Mos. Ended
Sept. 30, Sept. 30,
2001 2000
------------ ------------
<s> <c> <c>
Sales $ 214,858 $ 256,315
Cost of sales and services 191,047 173,246
----------- -----------
Gross profit 23,811 83,069
Geberal and administrative expenses:
Advertising and marketing expense 26,079 51,113
Amortization of service contracts 23,554 23,554
Compensation of officers - 30,000
Depreciation 31,200 24,600
Salaries, wages and benefits 61,670 77,841
Rent 12,599 16,500
Professional fees 3,939 10,978
Other 36,052 27,006
-------- ----------
(171,282) (178,523)
Other income and (expenses):
Other income 13,980 4,170
Interest income - -
Interest expense (6,570) (851)
--------- -----------
Income before taxes (163,872) (175,204)
Income taxes - -
--------- -----------
Net income (loss) $ (163,872) $ (175,204)
=========== ===========
Per share information:
Basic (loss) per share $ (0.01) $ (0.01)
=========== ===========
Weighted average shares
Outstanding 13,738,500 12,999,967
========== ===========
The accompanying notes are an integral part
of these financial statements.
5
The Jarrett/Favre Driving Adventure, Inc.
Statement of Cash Flows
3 Mos. Ended 3 Mos. Ended
Sept. 30, Sept. 30,
2001 2000
------------- --------------
<s> <c> <c>
Net (loss) $ (163,872) $ (175,204)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 54,725 48,127
Issuance of stock in exchange for services 30,000
Changes in assets and liabilities:
(Increase) decrease in inventory 4,426 1,609
(Increase) decrease in prepaid expenses 17,620 (3,198)
(Increase) decrease in accounts receivable (3,356) (2,966)
Increase (decrease) in deferred revenue 10,029 (15,475)
Increase (decrease) in accounts payable and
accrued expenses (42,155) 67,698
----------- --------------
Total adjustments 41,289 125,795
----------- --------------
Net cash (used in) operating activities (122,583) (49,409)
------------ --------------
Cash flows (used in) investing activities:
Acquisition of property and equipment (2,782) (31,415)
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Net cash (used in) investing activities (2,782) (31,415)
------------ -------------
Cash flows from financing activities:
Common stock sold for cash
Loans from shareholders 127,694 10,000
Repayment of long term debt (3,470) (1,374)
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Net cash from financing activities 124,224 8,626
---------- -------------
Increase (decrease) in cash (1,141) (72,198)
Cash and equivalents, beginning of period 6,274 77,315
---------- -------------
Cash and equivalents, end of period $ 5,133 $ 5,117
The accompanying notes are an integral part
of these financial statements.
6
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30,2001
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited financial statements
have been prepared in accordance with generally
accepted accounting principles for interim
financial information and with the instructions to
Form 10QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the
information and footnotes required by generally
accepted accounting principles for complete
financial statements. In the opinion of
management, all adjustments (consisting of normal
recurring accruals) considered necessary for a
fair presentation have been included. Operating
results for the six months ending September 30,
2001 are not necessarily indicative of the results
that may be expected for the year ended March 31,
2002. The unaudited financial statements should
be read in conjunction with the financial
statements and footnotes thereto included in the
Company's Form 10KSB for the year ended March 31,
2001.
7
Item 2. Management's Discussion and Analysis or
Plan of Operations
Trends and Uncertainties. Demand for the
Corporation's products are dependent on, among
other things, general economic conditions which
are cyclical in nature. Inasmuch as a major
portion of the Corporation's activities are the
receipt of revenues from its driving school
services and products, the Corporation's business
operations may be adversely affected by the
Corporation's competitors and prolonged
recessionary periods.
There are no known trends, events or uncertainties
that have or are reasonably likely to have a
material impact on the corporation's short term or
long term liquidity. Sources of liquidity both
internal and external will come from the sale of
the corporation's products as well as the private
sale of the company's stock. There are no material
commitments for capital expenditure at this time.
There are no trends, events or uncertainties that
have had or are reasonably expected to have a
material impact on the net sales or revenues or
income from continuing operations. There are no
significant elements of income or loss that do not
arise from the Corporation's continuing operations.
There are no known causes for any material changes
from period to period in one or more line items of
the corporation's financial statements.
The Corporation currently has classes planned
through December 2001.
Capital and Source of Liquidity. The Corporation
currently has no material commitments for capital
expenditures. The Corporation has no plans for
future capital expenditures such as additional
race cars at this time.
The Corporation anticipates in addition to
revenues to raise additional capital to conduct
operations during the next twelve(12) months. The
corporation intends to raise the necessary capital
through the private sale of stock. The
Corporation believes that there will be sufficient
capital from revenues and the private sale of
stock to conduct operations for the next
twelve(12) months.
Presently, the Corporation's revenue comprises
eighty(80) percent of the total cash necessary to
conduct operations. The remaining twenty(20)
percent of the cash necessary to conduct
8
operations will come from the private sale of
stock. Future revenues from classes and events
will determine the amount of offering proceeds
necessary to continue operations.
The board of directors has no immediate offering
plans in place. The board of directors shall
determine the amount and type of offering as the
Corporation's financial situation dictates.
For the three months ended September 30, 2001, the
Corporation acquired property and equipment of
$2,782 resulting in net cash used in investing
activities of $2,782.
For the three months ended September 30, 2000, the
Corporation acquired property and equipment of
$31,415 resulting in net cash used in investing
activities of $31,415.
For the year ended June 30, 2001, the Corporation
acquired plant and equipment of $69,111 resulting
in net cash used in investing activities of
$69,111.
For the year ended June 30, 2000, the Corporation
acquired plant and equipment of $39,840 resulting
in net cash used in investing activities of
$39,840.
For the three months ended September 30, 2001, the
Corporation received loans from shareholders of
$127,694 and repaid long term debt of $3,470. As
a result, the Corporation had net cash from
financing activities of $124,224 for the three
months ended September 30, 2001.
For the three months ended September 30, 2000, the
Corporation received loans from shareholders of
$10,000 and repaid long term debt of $1,374. As
a result, the Corporation had net cash from
financing activities of $8,626 for the three
months months ended September 30, 2000.
For the year ended June 30, 2001, the Corporation
sold or subscribed common stock for cash of
$210,000. For the year ended June 30, 2001, the
Corporation received proceeds from officer
advances of $127,308. The Corporation repaid
$9,692 of long-term debt. As a result, the
Corporation had net cash provided by financing
activities of $327,616.
9
For the year ended June 30, 2000, the Corporation
sold or subscribed common stock for cash of
$448,500. The Corporation repurchased officers
shares for $1,000. For the year ended June 30,
2000, the Corporation received proceeds from
officer advances of $50,000 and repaid $5,000 of
that advance. The Corporation repaid $4,086 of
long-term debt. As a result, the Corporation had
net cash provided by financing activities of
$488,414.
On a long term basis, liquidity is dependent on
continuation of operation and receipt of revenues.
Results of Operations. For the three months
ended September 30, 2001, the Corporation had
sales of $214,858 with a cost of sales of $191,047
for a gross profit of $23,811.
For the three months ended September 30, 2001, the
Corporation had general and administrative
expenses of $195,093. These expenses consisted
of advertising and marketing expense of $26,079,
amortization of service contracts of $23,554,
depreciation of $31,200, salaries, wages and
benefits of $61,670, rent of $12,599, professional
fees of $3,939 and other expenses of $36,052.
For the three months ended September 30, 2000, the
Corporation had sales of $256,315 with a cost of
sales of $173,246 for a gross profit of $83,069.
For the three months ended September 30, 2000, the
Corporation had general and administrative
expenses of $261,592. These expenses consisted
of advertising and marketing expense of $51,113,
amortization of service contracts of $23,554,
compensation of officers of $30,000, depreciation
of $31,200, salaries, wages and benefits of
$77,841, rent of $16,500, professional fees of
$10,978 and other expenses of $27,006.
For the year ended June 30, 2001, the Corporation
had sales of $914,785 with cost of sales of
$670,419 for a gross profit of $244,366.
For the year ended June 30, 2001, the Corporation
had general and administrative expenses of
$1,249,478. These expenses consisted of
advertising expense of $37,523, amortization of
service contracts of $94,107, compensation of
officers of $120,000, consulting expenses of
$306,200, depreciation of $113,464, printing costs
of $979, professional fees of $26,041, rent of
10
$74,553, salaries and wages of $182,493, telephone
expense of $18,323, travel expenses of $245 and
other expenses of $275,547.
For the year ended June 30, 2000, the Corporation
had sales of $624,909 with cost of sales of
$489,295 for a gross profit of $135,614.
For the year ended June 30, 2000, the Corporation
had general and administrative expenses of
$1,743,054. These expenses consisted of
advertising expense of $77,802, amortization of
service contracts of $94,107, compensation of
officers of $219,000, consulting expenses of
$765,000, depreciation of $88,126, printing costs
of $5,291, professional fees of $21,700, rent of
$76,962, salaries and wages of $270,679, telephone
expense of $34,327, travel expenses of $9,983 and
other expenses of $80,077.
The Corporation shall focus on limiting its
administrative costs.
Plan of Operation. The Corporation may experience
problems; delays, expenses and difficulties
sometimes encountered by an enterprise in the
Corporation's stage, many of which are beyond the
Corporation's control. These include, but are not
limited to, unanticipated problems relating to
additional costs and expenses that may exceed
current estimates and competition.
The Corporation is not delinquent in any of its
obligations even though the Corporation has
generated limited operating revenues. The
Corporation intends to market its products and
services utilizing cash made available from the
private sale of its securities and operations. The
Corporation's management is of the opinion that
the proceeds of the sales of its securities and
future revenues will be sufficient to pay its
expenses for the next twelve months.
11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. not applicable.
Item 2. Changes in Securities and Use of Proceeds.
not applicable.
Item 3. Defaults Upon Senior Securities.
not applicable.
Item 4. Submission of Matters to a Vote of Security
Holders.
not applicable.
Item 5. Other Information. not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Reports on Form 8-K. none
(b) Exhibits. none
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: November 18, 2001
The Jarrett/Favre Driving Adventure, Inc.
By /s/ Timothy B. Shannon
------------------------
Timothy B. Shannon
President and Director