-----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, G6aVw5OuwAhWy7Yi9NW5nFJc7sOE+J84cOfN5qAJmUpUIxweIHd0VRNstAvvAHkX l3j+gmKKHQhPfF9Q8lB2Ig== 0000950144-99-009614.txt : 19990809 0000950144-99-009614.hdr.sgml : 19990809 ACCESSION NUMBER: 0000950144-99-009614 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19990806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JR CONSULTING INC CENTRAL INDEX KEY: 0000704172 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 133121128 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 002-78335-NY FILM NUMBER: 99679348 BUSINESS ADDRESS: STREET 1: 180 VARICK STREET STREET 2: 13TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10014 BUSINESS PHONE: 2128076777 MAIL ADDRESS: STREET 1: 180 VARICK STREET STREET 2: 13TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10014 10QSB 1 JR CONSULTING QUARTERLY REPORT D/D 09/30/98 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark one) [ X ] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 ----------------------- OR [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 2-78335-NY ------------- J R CONSULTING, INC. ---------------------------------------------------- (Exact name of small business issuer in its charter) Nevada 13-3121128 - ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 180 Varick Street, 13th Floor, New York, New York 10014 ------------------------------------------------------- (Address of principal executive offices) (212) 807-6994 -------------------------- (Issuer's telephone number) ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) The number of shares outstanding of the issuer's Common Stock, $.04 par value per share, as of September 30, 1998, is 13,373,257. Transitional Small Business Disclosure Format (check one); YES NO X ------ ------ 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED FINANCIAL INFORMATION J R CONSULTING, INC. CONSOLIDATED CONDENSED BALANCE SHEET
09/30/98 06/30/98 UNAUDITED) (AUDITED) ------------------------ $'000 $'000 ----- ----- ASSETS Current assets Cash 4 41 Accounts receivable 719 659 Inventories 5 6 Other current assets 293 291 ------- ------ Total current assets 1,021 997 Property plant and equipment, net of accumulated depreciation of $70,000 and $58,000 at 09/30/98 and 06/30/98, respectively 348 323 Other assets Goodwill and patents 778 794 Other assets 40 34 ------- ------ Total other assets 818 828 Total assets 2,187 2,148 ======= ====== LIABILITIES Current liabilities Overdraft 199 51 Accounts payable 749 542 Accrued liabilities 374 459 Other current liabilities 1,233 960 ------- ------ Total current liabilities 2,555 2,012 Other liabilities Debt payable after 12 months -- 279 ------- ------ Total liabilities 2,555 2,291 SHAREHOLDERS' EQUITY Common stock 535 535 Less 5,187,598 shares issued at discount below par value (154) (154) Paid in capital in excess of par value 3,276 3,276 Retained earnings (3,973) (3,750) Unrealized loss on marketable securities (56) (56) Translation adjustment 4 6 ------- ------ Total shareholders' equity (368) (143) ------- ------ 2,187 2,148 ======= ======
The accompanying notes are an integral part of the consolidated financial statements -2- 3 CONSOLIDATED FINANCIAL INFORMATION J R CONSULTING, INC. CONSOLIDATED CONDENSED STATEMENT OF INCOME
3 MONTHS ENDED (UNAUDITED) (UNAUDITED) 09/30/98 09/30/97 ----------- ----------- $'000 $'000 ----- ----- Sales 436 521 Cost of sales 39 139 ---------- ---------- Gross margin 397 382 SG&A expenses 604 534 Amortisation of goodwill & patents 15 15 ---------- ---------- Operating profit (loss) (222) (167) Interest expense 1 1 ---------- ---------- Pre-tax profit (loss) (223) (168) Income tax expenses -- -- ---------- ---------- Net income (loss) (223) (168) ========== ========== Weighted average number of common shares outstanding 13,373,257 11,211,622 Net loss per share of common stock $(0.02) $(0.01)
The accompanying notes are an integral part of the consolidated financial statements -3- 4 CONSOLIDATED FINANCIAL INFORMATION J R CONSULTING, INC. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(UNUADITED) (UNAUDITED) 3 MONTHS ENDED 3 MONTHS ENDED 09/30/98 09/30/97 ----------------------------------- $'000 $'000 ----- ----- Operating activities Net income (loss) (223) (168) Depreciation & amortisation 33 21 Decrease in inventory 1 (54) Change in other net operating assets 62 (114) Other 138 60 ---------- --------- Net cash provided by (used in) operating activities 11 (255) Investing activities Capital expenditures (48) (7) ---------- --------- Net cash provided by (used in) investing activities (48) (7) Financing activities Proceeds from loans to be converted to stock -- 263 ---------- --------- Net cash provided by (used in) financing activities -- 263 ---------- --------- Increase in cash (37) 1 Cash at July 1 41 20 Cash at September 30 4 21
The accompanying notes are an integral part of the consolidated financial statements -4- 5 J R CONSULTING, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB. 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 considered necessary for a fair presentation have been included, and such adjustments are of a normal recurring nature. Results for interim periods should not be considered indicative of results for any other interim period or for future years. NOTE 2 No income taxes were paid during the three months ended September 30, 1998. NOTE 3 The effects of non-cash investing and financing activities have been excluded from the statement of cash flows in accordance with SFAS 95. NOTE 4 Translation of these financial statements at September 30, 1998, is at the mid-market rate of(pound)1 to $1.6995, and for the three months then ended, at an average rate of(pound)1 to $1.6534. -5- 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The gross margin for the Issuer for the quarter ended September 30, 1998, has improved from the corresponding period in the previous fiscal year ($397,000 compared with $382,000). The operating loss is significantly higher for the quarter ended September 30, 1998, compared with the operating loss for the corresponding period in the previous fiscal year ($222,000 compared with $167,000). However such a direct comparison is not indicative of the performance of the Issuer because Que Management, Inc. ("Que") was not in existence during the quarter ended September 30, 1997. The performance of Benatone Limited ("Benatone") in the quarter ended September 30, 1998, showed a significant improvement from the corresponding period in the previous year (a loss of $47,000 compared with $60,000). This "improvement" may be misleading. Benatone suffered very badly from the decline in economic activity in the UK compounded by competition from cheap imports from the less developed countries. This is reflected in the sales figures that show a significant decline from the corresponding period in the previous year ($51,000 compared with $172,000). Although the cost of sales has declined to a similar extent ($39,000 compared with $139,000), continued efforts to control unnecessary expenditure allowed Benatone to show an improved overall performance. This is well demonstrated by a reduction of SG&A expenses from $93,000 in the quarter ended September 30, 1997, to $58,000 in the quarter ended September 30, 1998. Management is addressing the problems of Benatone which were compounded by the instruction of the authorities to reject all electrical components containing a fuse manufactured by the manufacturer of the Simplug during the second quarter ended December 31, 1998. This restriction was lifted early in the following quarter because the perceived problems were proven to be without foundation (as they were in the quarter ended December 31, 1997). However the damage was nonetheless done; Benatone was unable to sell any plugs during the peak in the annual cycle. Furthermore, the outlook for the UK economy has not improved in this sector and Benatone has been unable to significantly reduce the cost of manufacturing its product to allow it to be more competitive and achieve greater gross margins. Thus while the industry is in the low part of its annual cycle, management decided to cease operations until the new plug now approved by the British Standards Institution is available in commercial quantities, a manufacturer at a significantly lower cost can be found and the market improves. There can be no guarantee that these conditions will be met in the future. The performance of Prima Eastwest Model Management, Inc. ("Prima") in the quarter ended September 30, 1998, showed a significant improvement from the corresponding period in the previous year (a net profit of $13,000 compared with a net loss of $72,000). However if the operating profit figures are compared, Prima showed a greater improvement on the corresponding period in the previous year (a profit of $22,000 compared with a loss of $72,000). The difference between the net profit and operating profit is entirely due to interest charged to Prima for the loans it has from the Issuer that amounted to nearly half of the operating profit. Interest had not previously been charged. The sales declined from $348,000 in the quarter ended September 30, 1997 to $224,000 in the quarter ended September 30, 1998. This was primarily as a result of losing the head of the male model booking division earlier in 1998. The level of booking in that division is in the process of recovering to former levels. The decline in sales was more than offset by the lower SG&A expenses. -6- 7 These expenses declined from $409,000 in the quarter ended September 30, 1997 to $189,000 in the quarter ended September 30, 1998. Although these low expenses are partly due to the reduced requirement for oversight of the operations by the management of the Issuer and Prima intends to continue to improve its efficiency, Prima also intends to expand its business and this is expected to result in an increase in future costs of operations. These expenses will continually be monitored to prevent any undue increases. Having only started on January 5, 1998 and having no established market, Que has had to generate its sales from no base other than the experience of the management and booking staff and its association with Prima. The management of the Issuer forecasted that Que would not be profitable immediately. Providing targets were achieved, the Issuer forecasted that Que would become profitable if it could attract and become the agent for a large number of models in demand by the fashion industry because it operates in New York, the heart of the modeling industry. By working with Prima, combined with the efforts of Que's two experienced managers and their support staff, Que has continued to expand its sales and is ahead of management's forecasts. In the quarter ended September 30, 1998, Que had sales of $161,000 and SG&A expenses of $268,000. The operating loss was $107,000. A further charge of $2,000 was made to the operating loss for interest on loans from the Issuer to give a net loss for the quarter ended September 30, 1998 of $109,000. -7- 8 PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS - None Item 2. CHANGES IN SECURITIES - None Item 3. DEFAULTS UPON SENIOR SECURITIES - None Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS - None Item 5. OTHER INFORMATION - None Item 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibits - None Reports on Form 8-K - On September 9, 1998, the Issuer filed a Current Report, on Form 8-K, dated September 4, 1998, with respect to a change in the Issuer's certifying accountants. This Current Report was amended by a Form 8-K/A filed September 24, 1998, and another Form 8-K/A filed September 29, 1998. -8- 9 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. J R CONSULTING, INC. Date: August 5, 1999 By: /s/ Peter Zachariou ------------------------------- Peter Zachariou, President -9- EX-27 2 FINANCIAL DATA SCHEDULE
5 1000 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 4 0 719 100 5 1,021 348 70 2,187 2,555 0 0 0 535 (903) 2,187 51 436 39 45 559 0 1 (223) 0 (223) 0 0 0 (223) (0.02) (0.02)
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