-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OcgqYyR24/7rmWCeTEyodJKQnS9psym9/J++u5fDknw2Sh2ddBc6E3MEvhiMTRkE IjC0FVCpRooYjH9880jZcg== 0001014897-07-000161.txt : 20071113 0001014897-07-000161.hdr.sgml : 20071112 20071113124717 ACCESSION NUMBER: 0001014897-07-000161 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070930 FILED AS OF DATE: 20071113 DATE AS OF CHANGE: 20071113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DALE JARRETT RACING ADVENTURE INC CENTRAL INDEX KEY: 0001094032 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 593564984 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-27251 FILM NUMBER: 071236360 BUSINESS ADDRESS: STREET 1: 120A N. MAIN AVENUE CITY: NEWTON STATE: NC ZIP: 28658 BUSINESS PHONE: 8884672231 MAIL ADDRESS: STREET 1: 120A N. MAIN AVENUE CITY: NEWTON STATE: NC ZIP: 28658 FORMER COMPANY: FORMER CONFORMED NAME: JARRETT FAVRE DRIVING ADVENTURE INC DATE OF NAME CHANGE: 19990827 10QSB 1 jarrett10q3q07.txt FORM 10QSB FOR SEPTEMBER 30, 2007 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, 2007 - -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 Dale Jarrett Racing Adventure, Inc. - -------------------------------------------- (Exact name of registrant as specified in its charter) FLORIDA 59-3564984 - ----------------------------------------------------------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization Identification Number) 120 A North Main Avenue, Newton, NC 28658 - ----------------------------------------------------------------------- (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 [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ x ] The number of outstanding shares of the registrant's common stock, September 30, 2007: Common Stock - 22,093,502 Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ x ] 2 PART I -- FINANCIAL INFORMATION Dale Jarrett Racing Adventure, Inc. Item 1. Financial Statements Balance Sheet, September 30, 2007(unaudited) Statements of Operations for the three months and nine months ended September 30, 2007 and 2006 (unaudited) Statements of Cash Flows for the nine months ended September 30, 2007 and 2006 (unaudited) Notes to financial statements 3 Dale Jarrett Racing Adventure, Inc. Balance Sheet September 30, 2007 (Unaudited) ASSETS ------ Current assets: Cash $ 238,487 Inventory 1,002 Prepaid expenses and other current assets 168,898 ---------- Total current assets 408,387 ---------- Property and equipment, at cost, net of accumulated depreciation of $774,102 356,468 ---------- $ 764,855 ========== LIABILITIES AND STOCKHOLDERS' (DEFICIT) --------------------------------------- Current liabilities: Note payable $ 35,564 Current portion of long-term debt 18,851 Accounts payable 40,268 Accrued expenses 74,657 Accrued salaries - officers 100,000 Deferred revenue 561,985 Shareholder advances 202,670 ---------- Total current liabilities 1,033,995 ---------- Long-term debt 46,575 ---------- Stockholders' (deficit): Common stock, $.01 par value, 100,000,000 shares authorized, 22,093,502 shares issue and outstanding 220,935 Additional paid-in capital 4,737,136 Deferred services (31,250) Accumulated (deficit) (5,242,536) ---------- (315,715) ---------- $ 764,855 ========== See accompanying notes to financial statements. 4 Dale Jarrett Racing Adventure, Inc. Statements of Operations For The Three Months and Nine Months Ended September 30, 2007 and 2006 (Unaudited)
Three Months Nine Months 2007 2006 2007 2006 ---------- ---------- ---------- ---------- Sales $ 724,786 $ 629,895 $1,857,709 $1,346,817 Cost of sales and services 265,699 277,502 649,937 619,221 ---------- ---------- ---------- ---------- Gross profit 459,087 352,393 1,207,772 727,596 ---------- ---------- ---------- ---------- Expenses General and administrative - non cash stock compensation 537,000 64,889 662,400 94,139 General and administrative 300,643 213,134 979,554 753,724 ---------- ---------- ---------- ---------- 837,643 278,023 1,641,954 847,863 ---------- ---------- ---------- ---------- Income (loss) from operations (378,556) 74,370 (434,182) (120,267) ---------- ---------- ---------- ---------- Other income and (expense): Interest income 4,030 949 7,230 2,397 Other income - 1,195 - 1,645 Interest expense (4,755) (5,591) (13,553) (19,059) ---------- ---------- ---------- ---------- (725) (3,447) (6,323) (15,017) ---------- ---------- ---------- ---------- (Loss) before taxes (379,281) 70,923 (440,505) (135,284) Income taxes - - - - ---------- ---------- ---------- ---------- Net income (loss) $ (379,281) $ 70,923 $ (440,505) $ (135,284) ========== ========== ========== ========== Per share information: Basic and diluted (loss) per share $ 0.02 $ 0.00 $ (0.02) $ (0.01) ========== ========== ========== ========== Weighted average shares Outstanding- basic 21,060,169 19,297,561 20,349,058 19,135,215 ========== ========== ========== ========== Weighted average shares Outstanding- fully diluted 21,060,169 19,297,561 20,349,058 19,135,215 ========== ========== ========== ==========
See accompanying notes to financial statements. 5 Dale Jarrett Racing Adventure, Inc. Statements of Cash Flows For the Nine Months Ended September 30, 2007 and 2006 (Unaudited) 2007 2006 ---------- ---------- Net cash provided by operating activities $ (56,684) $ 38,918 ---------- ---------- Cash flows from investing activities: Acquisition of plant and equipment (137,271) (88,735) ---------- ---------- Net cash (used in) financing activities (137,271) (88,735) ---------- ---------- Cash flows from financing activities: Repayment of notes payable (4,497) (57,939) Issuance of common stock 80,000 - Repayment of long-term debt (18,334) (19,110) ---------- ---------- Net cash (used in) financing activities (57,169) (77,049) (Decrease) in cash (136,786) (126,866) ---------- ---------- Cash and cash equivalents, beginning of period 375,273 313,576 ---------- ---------- Cash and cash equivalents, end of period $ 238,487 $ 186,710 ========== ==========
See accompanying notes to financial statements. 6 DALE JARRETT RACING ADVENTURE, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2007 (UNAUDITED) (1) Basis Of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Item 310(b) of Regulation S-B. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. For further information, refer to the financial statements of the Company as of and for the year ended December 31, 2006, including notes thereto included in the Company's Form 10-KSB. (2) Earnings Per Share The Company calculates net income (loss) per share as required by Statement of Financial Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods when anti-dilutive commons stock equivalents are not considered in the computation. (3) Inventory Inventory is valued at the lower of cost or market on a first-in first-out basis and consists primarily of finished goods and includes primarily promotional items that bear the Company's logo. (4) Stockholders' (Deficit) During the period ended September 30, 2007, the Company issued 1,480,000 shares of common stock for services. The shares were valued at their fair market value of $572,400. The Company also issued 125,571 shares of common stock for the conversion of debt of $17,580. During the period ended September 30, 2007, the Company issued 1,000,000 shares of common stock for cash aggregating $80,000. These shares were issued to employees at a discount from the fair market value of the shares of $90,000. The discount has been charged to operations during the period. (5) Basis of Reporting The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. 7 The Company has experienced a significant loss from operations as a result of its investment necessary to achieve its operating plan, which is long- range in nature. From inception to September 30, 2007, the Company incurred net losses of $5,242,536 and for the nine months ended September 30, 2007, the Company incurred a net loss of $440,505. In addition, the Company has working capital and stockholder deficits of $625,608 and $315,715 at September 30, 2007. The Company's ability to continue as a going concern is contingent upon its ability to attain profitable operations and secure financing. In addition, the Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates. The Company is pursuing equity financing for its operations. Failure to secure such financing or to raise additional capital or attain materially profitable operations may result in the Company depleting its available funds and not being able pay its obligations. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. 8 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 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 Corporation'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 2008. 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 believes that there will be sufficient capital from revenues to conduct operations for the next twelve(12) months. Presently, the Corporation's revenue comprises almost one hundred(100) percent of the total cash necessary to conduct operations. Future revenues from classes and events will determine the amount of additional financing necessary to continue operations. The board of directors is currently pursuing equity financing. For the nine months ended September 30, 2007, the Corporation acquired plant and equipment of $137,271 resulting in net cash used in investing activities of $137,271. Comparatively, for the nine months ended September 30, 2006, the Corporation acquired plant and equipment of $88,735 resulting in net cash used in investing activities of $88,735. The Corporation continues to look for ways to decrease its cash expenditures and still retain quality management and consultants. For the nine months ended September 30, 2007, the Corporation reduced its 9 outstanding debt by repaying notes payable of $4,497 and long-term debt of $18,334. Additionally, the Corporation issued common shares at $80,000 to investor relations consultants at a discount from the fair market value of the shares of $90,000. As a result, the Corporation had net cash provided by financing activities of $57,169 for the nine months ended September 30, 2007. Comparatively, for the nine months ended September 30, 2006, the Corporation reduced its outstanding debt by repaying notes payable of $57,939 and long-term debt of $19,110. As a result, the Corporation had net cash used in financing activities of $77,049 for the nine months ended September 30, 2006. On a long term basis, liquidity is dependent on continuation of operation and receipt of revenues in addition to further equity financing. Results of Operations. For the three months ended September 30, 2007, the Corporation had sales of $724,786 with cost of sales of $265,699 for a gross profit of $459,087. Comparatively, for the three months ended September 30, 2006, the Corporation had sales of $629,895 with cost of sales of $277,502 for a gross profit of $352,393. For the three months ended September 30, 2007, the Corporation had general and administrative expenses of $300,643 and non-cash stock compensation of $537,000. For the three months ended September 30, 2006, the Corporation had general and administrative expenses of $213,134 and non-cash stock compensation of $64,889. The percentage of general and administrative expenses to revenues for the three months ended September 30, 2007 increased to 115.6% from 44.1% for the three months ended September 30, 2006 due to the payment of non-cash stock compensation. For the nine months ended September 30, 2007, the Corporation had sales of $1,857,709 with cost of sales of $649,937 for a gross profit of $1,207,772. Comparatively, for the nine months ended September 30, 2006, the Corporation had sales of $1,346,817 with cost of sales of $619,221 for a gross profit of $727,596. For the nine months ended September 30, 2007, the Corporation had general and administrative expenses of $979,554 and non-cash stock compensation of $662,400. For the nine months ended September 30, 2006, the Corporation had general and administrative expenses of $753,724 and non-cash stock compensation of $94,139. The percentage of general and administrative expenses to revenues for the nine months ended September 30, 2007 increased to 88% from 62% for the nine months ended September 10 30, 2006 due to the payment of non-cash stock compensation. 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. Our auditors have expressed reservations concerning our ability to continue as a going concern. The Corporation has incurred significant losses from operations and has working capital and stockholder deficiencies. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is contingent upon its ability to attain profitable operations and secure financing. In addition, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which we operate. We are pursuing equity financing for our operations. Failure to secure such financing or to raise additional capital or attain materially profitable operations may result in the Corporation depleting its available funds and not being able pay its obligations. Item 3. Controls and Procedures During the three months ended September 30, 2007, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(e)under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting . Evaluation of Disclosure Controls and Procedures Timothy B. Shannon, the Chief Executive Officer and the Chief Financial Officer of the Corporation has made an evaluation of the disclosure controls and procedures relating to the report on Form 10QSB for the three months ended September 30, 2007 as filed with the Securities and Exchange Commission and have concluded such controls and procedures to 11 be effective as of September 30, 2007 to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings. Not applicable. Item 2. Changes in Securities and Use of Proceeds. During the period ended September 30, 2007, the Company issued 1,480,000 shares of common stock for services. The shares were valued at their fair market value of $572,400. The Company also issued 125,571 shares of common stock for the conversion of debt of $17,580. During the period ended September 30, 2007, the Company issued 1,000,000 shares of common stock for cash aggregating $80,000. These shares were issued to investor relations consultants at a discount from the fair market value of the shares of $90,000. The discount has been charged to operations during the period. 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 Exhibits included herewith are: 31. Certifications Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended 32. Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 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 12, 2007 Dale Jarrett Racing Adventure, Inc. By /s/ Timothy B. Shannon ------------------------ Timothy B. Shannon President and Director EX-31 2 jarrett10q3q07ex31.txt 302 CERTIFICATION 302 CERTIFICATION I, Timothy B. Shannon, certify that: 1. I have reviewed the report of Dale Jarrett Racing Adventure, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal controls over financial reporting. Date: November 12, 2007 /s/Timothy B. Shannon ---------------------------- Timothy B. Shannon Chief Executive Officer Chief Financial Officer EX-32 3 jarrett10q3q07ex32.txt 906 CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Dale Jarrett Racing Adventure, Inc. (the "Company") on Form 10-QSB for the nine months ended September 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Timothy B. Shannon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/Timothy B. Shannon - ----------------------------- Timothy B. Shannon Chief Executive Officer Chief Financial Officer November 12, 2007 -----END PRIVACY-ENHANCED MESSAGE-----