10QSB 1 d08469e10qsb.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ________________ to ________________ Commission file number: 001-16063 JUPITER ENTERPRISES, INC. ------------------------------------------------------------------------------- (Exact name of small business issuer as specified in it charter) NEVADA 98-0208667 --------------------------------- ----------------------------------------- (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 94 RUE DE LAUSANNE, CH1202, GENEVA, SWITZERLAND -------------------------------------------------------------------------------- (Address of principal executive offices) 011-41-22-9000000 --------------------------------------------- (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 such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the issuer filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of August 12, 2003, the issuer had 1,178,308 shares of common stock, $0.001 par value, outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] INDEX
PAGE ---- PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. F-1 ITEM 2. MANAGEMENT'S PLAN OF OPERATION. 1 ITEM 3. CONTROLS AND PROCEDURES. 2 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. 3 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. 3 ITEM 3. DEFAULTS UPON SENIOR SECURITIES. 3 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS. 3 ITEM 5. OTHER INFORMATION. 3 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. 3 SIGNATURES 4
JUPITER ENTERPRISES, INC. (A DEVELOPMENT STAGE ENTERPRISE) BALANCE SHEET JUNE 30, 2003 (UNAUDITED) -------------------------------------------------------------------------------- ASSETS Other assets: Option to acquire Beijing Bluesky Kspan Steel Construction Co., Ltd $ 91,800 Deferred charges 2,886 --------- Total assets $ 94,686 ========= LIABILITIES Current liabilities: Accounts payable and accrued expenses $ 135,865 Due to related parties 79,176 --------- Total current liabilities 215,041 --------- Total liabilities 215,041 --------- STOCKHOLDERS' EQUITY Common stock, $.001 par value, 100,000,000 shares authorized, 1,178,308 shares issued and outstanding 1,178 Capital in excess of par value 135,467 Deficit accumulated during the development stage (257,000) --------- Total stockholders' equity (120,355) --------- Total liabilities and stockholders' equity $ 94,686 =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. F-1 JUPITER ENTERPRISES, INC. (A DEVELOPMENT STAGE ENTERPRISE) STATEMENTS OF LOSS FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED) --------------------------------------------------------------------------------
INCEPTION, MARCH 12, 1999 QUARTER ENDED THROUGH JUNE 30, JUNE 30, --------------------- 2003 2003 2002 ---------- --------- --------- Revenues $ -- $ -- $ -- ---------- --------- --------- General and administrative expenses 199,422 14,286 22,988 ---------- --------- --------- Operating income (loss) (199,422) (14,286) (22,988) ---------- --------- --------- Other income (expense): Expenses in connection with abandoned acquisition (57,509) -- -- Interest expense (69) -- (105) ---------- --------- --------- Total other income (expense) (57,578) -- (105) ---------- --------- --------- Income (loss) before taxes on income (257,000) (14,286) (23,093) ---------- --------- --------- Provision (credit) for taxes on income -- -- -- ---------- --------- --------- Net (loss) $ (257,000) $ (14,286) $ (23,093) ========== ========= ========= Basic earnings (loss) per common share $ (0.02) $ (0.05) ========= ========= Weighted average number of shares outstanding 940,945 456,300 ========= =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. F-2 JUPITER ENTERPRISES, INC. (A DEVELOPMENT STAGE ENTERPRISE) STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED JUNE 30, 2003 AND 2002 (UNAUDITED) --------------------------------------------------------------------------------
INCEPTION, MARCH 12, 1999 QUARTER ENDED THROUGH JUNE 30, JUNE 30, --------------------- 2003 2003 2002 ---------- --------- --------- Cash flows from operating activities: Net (loss) $ (257,000) $ (14,286) $ (23,093) Adjustments to reconcile net (loss) to cash provided (used) by developmental stage activities: (Decrease) increase in accounts payable 135,865 9,894 28,179 ---------- --------- --------- Net cash flows from operating activities (121,135) (4,392) 5,086 ---------- --------- --------- Cash flows from investing activities: Acquisition of option 91,800 91,800 -- Less, Stock issued in connection therewith (91,800) (91,800) -- (Increase) in deferred charges (60,395) (14,040) Abandoned acquisition costs 57,509 -- -- ---------- --------- --------- Net cash flows from investing activities (2,886) -- (14,040) ---------- --------- --------- Cash flows from financing activities: Advances from related parties 79,176 7,891 8,954 Proceeds from sale of common stock 41,260 -- -- Expenses in connection with capital changes (3,499) (3,499) -- Common stock issued for services 7,084 -- -- ---------- --------- --------- Net cash flows from financing activities 124,021 4,392 8,954 ---------- --------- --------- Net increase (decrease) in cash and equivalents -- -- -- Cash and equivalents, beginning of period -- -- -- ---------- --------- --------- Cash and equivalents, end of period $ -- $ -- $ -- ========== ========= ========= Supplemental cash flow disclosures: Cash paid for interest $ 69 $ -- $ -- Cash paid for income taxes -- -- --
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. F-3 JUPITER ENTERPRISES, INC. (A DEVELOPMENT STAGE ENTERPRISE) NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2003 ------------------------------------------------------------------------------- The accompanying unaudited interim financial statements include all adjustments which in the opinion of management are necessary in order to make the accompanying financial statements not misleading, and are of a normal recurring nature. However, the accompanying unaudited financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows and stockholders' equity in conformity with U.S. generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report for the year ended March 31, 2003. Operating results for the quarter ended June 30, 2003, are not necessarily indicative of the results that can be expected for the year ended March 31, 2004. NOTE 1 -- DEVELOPMENT STAGE ACTIVITIES: The Company continues to be a development stage enterprise, and its activities have been limited to its formation and the raising of equity capital and filings with the Securities and Exchange Commission. In its current development stage, management expects to continue to incur losses while the Company implements its business plan. Prior to December 31, 2001, the Company had plans to become a direct sales marketing company that markets, distributes and sells its own brand of natural health products via the internet. In February 2002, the Company entered into an agreement with a Chinese company engaged in steel building fabrication systems for the Chinese building and construction industry. However this contract was terminated as of January 31, 2003. In March, 2003, the Company entered into an agreement to acquire 100% of the stock of Beijing Bluesky Kspan Steel Construction Co., Ltd ("Bluesky"). MingHe-Han, a joint venture domiciled in China, previously had the exclusive right to acquire a controlling interest in Bluesky, which is owned 77% by Wu Zhenxing and 23% by Harper & Harper, Ltd., a Niue corporation. MingHe-Han was indebted to Harper & Harper in the amount of $275,000, and assigned its exclusive right to acquire the controlling interest in Bluesky to Harper & Harper in exchange for cancellation of the loan. On May 2, 2003, the Company issued 675,000 shares of restricted common stock to Harper & Harper in exchange for an option to acquire all of Bluesky's stock, as described above. The stock issuance has been valued at the quoted market value of Jupiter stock on the date issued ($0.17 per share), less a restricted stock discount of 20%. The Company will continue to be in the development stage until such time as it acquires or starts an ongoing business enterprise. F-4 JUPITER ENTERPRISES, INC. (A DEVELOPMENT STAGE ENTERPRISE) NOTES TO UNAUDITED FINANCIAL STATEMENTS JUNE 30, 2003 -------------------------------------------------------------------------------- NOTE 2 -- CAPITAL STOCK: Effective October 21, 2002 the Company effected a 1 for 20 reverse split of its common stock, under which each shareholder received 1 new share of stock for each 20 formerly held. The reverse split has been retroactively reflected in the accompanying financial statements. Previously, on December 10, 2001, the Company completed a 3 for 1 forward stock split whereby three shares of the Corporation's $0.01 par value common stock outstanding were issued for every one share outstanding. Since its inception, the Company has issued shares of its common stock as follows, retroactively adjusted to give effect to the 1 for 20 reverse split:
PRICE PER DATE DESCRIPTION SHARES SHARE AMOUNT ---- ----------- --------- --------- -------- 03/30/99 Shares issued for cash 300,000 $0.0333 $ 10,000 05/27/99 Shares issued for cash 126,000 0.2000 25,200 06/20/00 Shares issued for cash 30,300 0.2000 6,060 09/05/02 Shares issued for services 22,000 0.0200 440 10/21/02 Shares issued for fractional shares 8 0.0000 -- 03/05/03 Shares issued for services 25,000 0.2658 6,645 05/02/03 Shares issued for option 675,000 91,800 --------- -------- Cumulative total 1,178,308 $140,145 ========= ========
NOTE 3 -- UNCERTAINTY, GOING CONCERN: At June 30, 2003, the Company was not currently engaged in a business and had suffered losses from development stage activities to date. Although management is currently attempting to implement its business plan (see Note 1 in the notes to the financial statements included in the Company's Form 10-KSB as of the year ended March 31, 2003), is seeking to acquire certain assets as described in Note 7 to the March 31, 2003 financial statements, and is seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. Accordingly, the Company must rely on its officers and directors to perform essential functions without compensation until a business operation can be commenced. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. F-5 ITEM 2. MANAGEMENT'S PLAN OF OPERATION Statements contained herein which are not historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. Such risks and uncertainties include, without limitation: established competitors who have substantially greater financial resources and operating histories, regulatory delays or denials, ability to compete as a start-up company in a highly competitive market, and access to sources of capital. Jupiter Enterprises, Inc. (the "Company") has generated no revenues in the cumulative period from inception through the period ended June 30, 2003. The Company has not developed any products or provided any services and has experienced difficulties in completing transactions. On November 28, 2001, the Company entered into an Agreement and Plan of Reorganization by and among the Company, Beijing MingHe-Han Science and Technology Co., Ltd. (MHST) and certain shareholders of MHST. Pursuant to the Agreement, the Company obtained 100% of the shares of MHST in exchange for 10,000,000 shares of common stock of the Company. In February 2002, the transaction was restructured whereby, in lieu of acquiring MHST as a wholly-owned subsidiary, the Company would acquire only certain assets of MHST for the same consideration. In April 2002, the transaction with MHST was mutually terminated. All shares of common stock of the Company that were issued to the original MHST shareholders pursuant to the original Reorganization Agreement dated November 28, 2001 were canceled and returned to treasury of the Company. The resignation of the former officers and directors of the Company, and the appointment of the current officers and directors of the Company were not affected. On April 8, 2002, the Company and The MingHe Group ("MingHe"), a Chinese corporation which operates a construction business in Mainland China, entered into an Acquisition Agreement wherein the Company was to acquire the entire construction business of MingHe, in exchange for 30,000,000 shares of common stock of the Company. The Company was not able to complete the transaction as originally agreed, and no shares were issued. On January 31, 2003, the Company entered into a Termination Agreement with MingHe and Yin Mingshan, the sole shareholder of MingHe. Pursuant to the Termination Agreement, the Acquisition Agreement was terminated. Mr. Mingshan also resigned as a director and officer of the Company, effective December 31, 2002. The Company also agreed to issue 675,000 shares of its restricted common stock to be issued to Harper & Harper, Ltd ("H&H") in exchange for the right to acquire a controlling interest in Beijing Bluesky Kspan Steel Constitution Company Ltd. ("Bluesky"). As a result of the issuance to H&H, H&H holds a controlling interest in the Company. H&H also owns approximately 23% of Bluesky. On March 12, 2003, the Company entered into an Agreement and Plan of Reorganization by and among the Company, Bluesky and the shareholders of Bluesky. Pursuant to the Agreement, the Company will obtain 100% of the outstanding shares of Bluesky in exchange for 65 million shares of the Company. Although the agreement contemplated an immediate closing, the transaction cannot close until after the Company's shareholders approve an increase in the authorized capital in order to issue the 65 million shares. During the quarter ended June 30, 2003, the Company prepared and issued to shareholders of record as of June 18, 2003, an information statement concerning an amendment to the Articles of Incorporation to increase the authorized capital from 5 million to 100 million shares of common stock. The action was approved by majority consent of the shareholders without a meeting, and proxies were not be solicited. The Company will file an Amendment to the Articles of Incorporation with the Secretary of State of Nevada in August 2003. BlueSky is a steel fabrication company that fabricates heavy steel girders for hi-rise construction projects, lightweight steel buildings and bridges, as its core business. In addition, BlueSky builds and leases grain storage warehouses to the PRC's Ministry of Agriculture. BlueSky was founded in 1996 and currently employs approximately 230 people. 1 THERE CAN BE NO ASSURANCE THAT THE COMPANY WILL BE ABLE TO CONTINUE AS A GOING CONCERN OR ACHIEVE MATERIAL REVENUES OR PROFITABLE OPERATIONS. THE COMPANY REQUIRES FINANCING, AND NO ASSURANCES CAN BE GIVEN THAT FINANCING WILL BE AVAILABLE TO THE COMPANY IN THE AMOUNTS REQUIRED, OR THAT, IF AVAILABLE, WILL BE ON TERMS SATISFACTORY TO THE COMPANY. ITEM 3. CONTROLS AND PROCEDURES. Based on their most recent evaluation, which was completed as of the end of the period covered by this periodic report on Form 10-QSB, the Company's Chief Executive Officer and Chief Financial Officer believe the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective to ensure that information required to be disclosed by the Company in this report is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. During the fiscal quarter to which this report relates, there were no significant changes in the Company's internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses. 2 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS -- None. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. On May 2, 2003, pursuant to an agreement dated January 31, 2003, the Company issued 675,000 shares of its restricted common stock to Harper & Harper, Ltd. ("H&H") in exchange for the right to acquire a controlling interest in Beijing Blusky Kspan Steel Constitution Company, Ltd., a Chinese corporation. The Company believes that this transaction was exempt from registration under Section 4(2) and Rule 506 of the Securities Act of 1933. The transaction did not involve a public offering, no sales commissions were paid, and a restrictive legend was placed on the certificate evidencing the shares. ITEM 3. DEFAULTS UPON SENIOR SECURITIES -- None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS The Company prepared and issued to shareholders of record as of June 18, 2003, an information statement concerning an amendment to the Articles of Incorporation to increase the authorized capital from 5 million to 100 million shares of common stock. The action was approved by majority consent of the shareholders without a meeting, and proxies were not be solicited. The Company will file an Amendment to the Articles of Incorporation with the Secretary of State of Nevada in August 2003. ITEM 5. OTHER INFORMATION -- None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
Exhibit No. Description ----------- ----------- 2.3 Agreement and Plan of Reorganization dated November 28, 2001 by and among the Company, Beijing MingHe-Han Science and Technology Co., Ltd. ("MingHe-Han") and certain shareholders of MingHe-Han (Incorporated by reference to Exhibit 2.3 of the current report on Form 8-K, filed December 14, 2001). 2.4 Rescission and Restructuring Agreement dated February 13, 2002 by and among the Company, Beijing MingHe-Han Science and Technology Co., Ltd. ("MingHe-Han") and certain shareholders of MingHe-Han. (Incorporated by reference to Exhibit 2.4 of the current report on Form 8-K/A-1 filed February 19, 2002.) 2.5 Termination Agreement between the Registrant and Beijing MingHe-Han Science and Technology Co., Ltd., dated April 8, 2002 (Incorporated by reference to Exhibit 2.5 of the current report on Form 8-K filed April 11, 2002.) 2.6 Acquisition Agreement between the Registrant and The MingHe Group dated April 8, 2002 (Incorporated by reference to Exhibit 2.6 of the current report on Form 8-K filed April 11, 2002.) 2.7 Termination Agreement by and among the Company, The MingHe Group and Yin Mingshan dated January 31, 2003. (Incorporated by reference to Exhibit 2.7 of the quarterly report on Form 10-QSB for the period ended December 31, 2002). 2.8 Agreement and Plan of Reorganization dated March 12, 2003 by and among the Registrant, Beijing Bluesky Kspan Steel Constitution Company Ltd. ("Bluesky") and certain shareholders of Bluesky. (Incorporate by reference to Exhibit 2.7 [sic] of the current report on Form 8-K dated March 12, 2003).
3 3.1 Articles of Incorporation, as currently in effect, which define the rights of holders of the equity securities being registered (Incorporated by reference to the Registrant's registration statement on Form 10-SB, filed August 14, 2000). 3.2 By-laws, as currently in effect, which define the rights of holders of the equity securities being registered (Incorporated by reference to the Registrant's registration statement on Form 10-SB, filed August 14, 2000). 10.1 Jupiter Enterprises, Inc. 2002 Stock Plan (Incorporated by reference to Exhibit 10.1 of the Registrant's registration statement on Form S-8, file no. 333-86848). 31.1 Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith). 31.2 Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith). 32.1 Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith). 32.2 Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).
(b) Reports on Form 8-K On April 15, 2003, the Company filed a current report on Form 8-K to disclosed information regarding its agreement dated March 12, 2003, with Beijing Bluesky Kspan Steel Constitution Company Ltd. The Company also disclosed that it would be preparing and issuing an information statement concerning an amendment to the Articles of Incorporation to increase the authorized capital from 5 million to 100 million shares of common stock. The action was approved by majority consent of the shareholders without a meeting, and proxies were not be solicited. SIGNATURES In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. JUPITER ENTERPRISES, INC. Date: August 19, 2003 By: /s/ Michael J.A. Harrop ---------------------------------------------- Michael J.A. Harrop, Chief Executive Officer Date: August 19, 2003 By: /s/ Alexander Chen ---------------------------------------------- Alexander Chen, Chief Financial Officer 4 EXHIBIT INDEX
Exhibit No. Description ----------- ----------- 2.3 Agreement and Plan of Reorganization dated November 28, 2001 by and among the Company, Beijing MingHe-Han Science and Technology Co., Ltd. ("MingHe-Han") and certain shareholders of MingHe-Han (Incorporated by reference to Exhibit 2.3 of the current report on Form 8-K, filed December 14, 2001). 2.4 Rescission and Restructuring Agreement dated February 13, 2002 by and among the Company, Beijing MingHe-Han Science and Technology Co., Ltd. ("MingHe-Han") and certain shareholders of MingHe-Han. (Incorporated by reference to Exhibit 2.4 of the current report on Form 8-K/A-1 filed February 19, 2002.) 2.5 Termination Agreement between the Registrant and Beijing MingHe-Han Science and Technology Co., Ltd., dated April 8, 2002 (Incorporated by reference to Exhibit 2.5 of the current report on Form 8-K filed April 11, 2002.) 2.6 Acquisition Agreement between the Registrant and The MingHe Group dated April 8, 2002 (Incorporated by reference to Exhibit 2.6 of the current report on Form 8-K filed April 11, 2002.) 2.7 Termination Agreement by and among the Company, The MingHe Group and Yin Mingshan dated January 31, 2003. (Incorporated by reference to Exhibit 2.7 of the quarterly report on Form 10-QSB for the period ended December 31, 2002). 2.8 Agreement and Plan of Reorganization dated March 12, 2003 by and among the Registrant, Beijing Bluesky Kspan Steel Constitution Company Ltd. ("Bluesky") and certain shareholders of Bluesky. (Incorporate by reference to Exhibit 2.7 [sic] of the current report on Form 8-K dated March 12, 2003). 3.1 Articles of Incorporation, as currently in effect, which define the rights of holders of the equity securities being registered (Incorporated by reference to the Registrant's registration statement on Form 10-SB, filed August 14, 2000). 3.2 By-laws, as currently in effect, which define the rights of holders of the equity securities being registered (Incorporated by reference to the Registrant's registration statement on Form 10-SB, filed August 14, 2000). 10.1 Jupiter Enterprises, Inc. 2002 Stock Plan (Incorporated by reference to Exhibit 10.1 of the Registrant's registration statement on Form S-8, file no. 333-86848). 31.1 Section 302 Certification by the Corporation's Chief Executive Officer. (Filed herewith). 31.2 Section 302 Certification by the Corporation's Chief Financial Officer. (Filed herewith). 32.1 Section 906 Certification by the Corporation's Chief Executive Officer. (Filed herewith). 32.2 Section 906 Certification by the Corporation's Chief Financial Officer. (Filed herewith).