10QSB 1 form10qsb093002.txt 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: September 30, 2002 --------------------- [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to Commission file number 33-20111 --------- Eat at Joe's Ltd. (Exact name of small business issuer as specified in its charter) Delaware 75-2636283 -------------------------------------------------------------------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 670 White Plains Road, Suite 120, Scarsdale, New York, 10583 ------------------------------------------------------------ (Address of principal executive offices) (914) 725-2700 Issuer's telephone number 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 practical date: September 30, 2002 45,048,299 Transitional Small Business Disclosure Format (check one). Yes ; No X ---- ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements INDEPENDENT ACCOUNTANT'S REPORT Eat at Joe's, Ltd. We have reviewed the accompanying balance sheets of Eat at Joe's, Ltd. as of September 30, 2002 and December 31, 2001, and the related statements of operations for the three and nine months ended September 30, 2002 and 2001, and cash flows for the nine months ended September 30, 2002 and 2001. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statement taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. Respectfully submitted /S/ ROBISON, HILL & CO. Certified Public Accountants Salt Lake City, Utah November 8, 2002 EAT AT JOE'S LTD., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
September 30, December 31, 2002 2001 ------------------ ------------------ ASSETS Current Assets: Cash and cash equivalents $ 59,457 $ 62,176 Inventory 7,500 19,116 Prepaid expense 7,849 8,210 ------------------ ------------------ Total Current Assets 74,806 89,502 ------------------ ------------------ Property and equipment: Equipment 98,741 120,150 Furniture & Fixtures 3,964 3,964 Leasehold improvements 376,166 577,581 ------------------ ------------------ 478,871 701,695 Less accumulated depreciation (264,266) (287,902) ------------------ ------------------ 214,605 413,793 ======= ------------------ ------------------ Other Assets: Investments 100,000 100,000 Intangible and other assets net of amortization of $71,464 and $59,851, respectively 83,373 94,986 ------------------ ------------------ Total Assets $ 472,784 $ 698,281 ================== ==================
EAT AT JOE'S LTD., AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued)
September 30, December 31, 2002 2001 ------------------ ------------------ LIABILITIES Current Liabilities: Accounts payable and accrued liabilities $ 312,944 $ 334,247 Short-term notes payable 360,107 361,996 Shareholders loans 1,734,266 1,616,843 ------------------ ------------------ Total Current Liabilities 2,407,317 2,313,086 ------------------ ------------------ Convertible Debentures, Net of Issue Costs 1,562,309 1,462,533 ------------------ ------------------ Total Liabilities 3,969,626 3,775,619 ------------------ ------------------ STOCKHOLDERS EQUITY Preferred stock - $0.0001 par value. 10,000,000 shares Authorized; -0- shares issued and outstanding at September 30, 2002 and December 31, 2001 - - Common Stock - $0.0001 par value. 50,000,000 shares Authorized.45,048,299 issued and outstanding at September 30, 2002 and December 31, 2001 4,505 4,505 Additional paid-in capital 9,927,476 9,927,476 Cumulative Translation Adjustment - 32,581 Retained deficit (13,428,823) (13,041,900) ------------------ ------------------ Total Stockholders' Equity (3,496,842) (3,077,338) ------------------ ------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 472,784 $ 698,281 ================== ==================
See accompanying notes and accountants' report. EAT AT JOE'S LTD., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended For the nine months ended September 30, September 30, ---------------------------- ---------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Revenues $ 284,916 $ 372,099 $ 979,360 $ 1,215,240 Cost of Revenues 100,340 180,714 360,255 503,816 ------------ ------------ ------------ ------------ Gross Margin 184,576 191,385 619,105 711,424 Expenses Labor and Related Expenses 68,835 106,111 215,542 292,549 Rent 48,701 34,957 116,877 155,211 Other General and Administrative 107,182 101,182 320,156 401,931 ------------ ------------ ------------ ------------ Income (Loss) Before Depreciation and Amortization (40,142) (50,865) (33,470) (138,267) Depreciation and Amortization 19,420 29,847 69,523 91,468 ------------ ------------ ------------ ------------ Net Loss from Continuing Operations (59,562) (80,712) (102,993) (229,735) ------------ ------------ ------------ ------------ Other Income (Expense) Disposition of Assets -- -- (154,434) -- Other Income (Expense), Net (33,935) (38,647) (129,346) (81,725) ------------ ------------ ------------ ------------ Net Loss Before Income Taxes (93,497) (119,359) (386,773) (311,460) Income Tax Expense (Benefit) 50 50 150 150 ------------ ------------ ------------ ------------ Net Loss To Common Stockholders $ (93,547) $ (119,409) $ (386,923) $ (311,610) ============ ============ ============ ============ Basic and Diluted Loss Per Common Share $ 0.00 $ 0.00 $ (0.01) $ (0.01) ============ ============ ============ ============ Weighted Average Number of Common Shares 45,048,299 45,048,299 45,048,299 45,002,130 ============ ============ ============ ============
See accompanying notes and accountants' report. EAT AT JOE'S LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, -------------------------------------- 2002 2001 ------------------ ------------------ Cash Flows From Operating Activities Net loss for the period $ (386,923) $ (311,610) Adjustments to reconcile net loss to net cash Provided by operating activities Depreciation and Amortization 69,523 91,468 Write Down of Assets 137,366 87,352 Currency Translation Adjustment (11,452) (100,909) Stock issued for services and expenses - 7,667 Decrease (Increase) in Receivables - 3,411 Decrease (Increase) in inventory 6 615 Decrease (Increase) in prepaid expense 110 (15,879) Increase in accounts payable and accrued liabilities 79,076 176,681 ------------------ ------------------ Net Cash Provided by (Used in) Operating Activities (112,294) (61,204) ------------------ ------------------ Cash Flows From Investing Activities Purchase of property and equipment (5,357) (4,435) ------------------ ------------------ Net Cash Provided by Investing Activities (5,357) (4,435) ------------------ ------------------ Cash Flows From Financing Activities Advances from majority stockholders 117,424 90,240 Repayment of long-term notes payable (2,492) (22,581) Proceeds from short-term notes payable - 22,960 ------------------ ------------------ Net Cash Provided by Financing Activities 114,932 90,619 ------------------ ------------------ Increase (Decrease) in Cash (2,719) 24,980 Cash at beginning of period 62,176 14,670 ------------------ ------------------ Cash at End of Period $ 59,457 $ 39,650 ================== ================== Supplemental Disclosure of Interest and Income Taxes Paid Interest paid during the period $ - $ - ================== ================== Income taxes paid during the period $ - $ 2,720 ================== ==================
Supplemental Disclosure of Non-cash Investing and Financing Activities: None See accompanying notes and accountants' report. EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of accounting policies for Eat At Joe's, Ltd. and subsidiaries is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. The unaudited financial statements as of September 30, 2002 and for the nine months then ended reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of operations for the nine months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years. Organization and Basis of Presentation Eat At Joe's Ltd. (Company) was incorporated on January 6, 1988, under the laws of the State of Delaware, as a wholly-owned subsidiary of Debbie Reynolds Hotel and Casino, Inc. (DRHC) (formerly Halter Venture Corporation or Halter Racing Stables, Inc.) a publicly-owned corporation. DRHC caused the Company to register 1,777,000 shares of its initial 12,450,000 issued and outstanding shares of common stock with the Securities and Exchange Commission on Form S-18. DRHC then distributed the registered shares to DRHC stockholders. During the period September 30, 1988 to December 31, 1992, the Company remained in the development stage while attempting to enter the mining industry. The Company acquired certain unpatented mining claims and related equipment necessary to mine, extract, process and otherwise explore for kaolin clay, silica, feldspar, precious metals, antimony and other commercial minerals from its majority stockholder and other unrelated third-parties. The Company was unsuccessful in these start-up efforts and all activity was ceased during 1992 as a result of foreclosure on various loans in default and/or the abandonment of all assets. From 1992 until 1996 the Company has had no operations, assets or liabilities. During the year ended December 31, 2000, the Company changed the domicile of each of the following subsidiaries to Nevada; E.A.J. Hold, Inc., E.A.J. Shoppes, Inc., E.A.J. Innerharbor, Inc., E.A.J. Neshaminy, Inc., E.A.J. PM, Inc., E.A.J. Echelon, Inc., E.A.J. Market East, Inc., E.A.J. MO, Inc., E.A.J. Syracuse, Inc., E.A.J. Walnut Street, Inc., and E.A.J. Owings, Inc. EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Principles of Consolidation The consolidated financial statements include the accounts of Eat At Joe's, LTD. And its wholly-owned subsidiaries, E.A.J. Hold, Inc., a Nevada corporation ("Hold"), E.A.J. PHL Airport, Inc., a Pennsylvania corporation, E.A.J. Shoppes, Inc., a Nevada corporation, Eat At Joe's, LTD, a New Jersey corporation, E.A.J. Innerharbor, Inc., a Nevada corporation, E.A.J. Neshaminy, Inc., a Nevada corporation, E.A.J. PM, Inc., a Nevada corporation, E.A.J. Echelon, Inc., a Nevada corporation, E.A.J. Market East, Inc., a Nevada corporation, E.A.J. MO, Inc., a Nevada corporation, E.A.J. Syracuse, Inc., a Nevada corporation, E.A.J. Walnut Street, Inc., a Nevada corporation, E.A.J. Owings, Inc., a Nevada corporation, and 1398926 Ontario, Inc. and 1337855 Ontario, Inc., British Columbia corporations. All significant intercompany accounts and transactions have been eliminated. Nature of Business The Company is developing, owns and operates theme restaurants styled in an "American Diner" atmosphere. Inventories Inventories consist of food, paper items and related materials and are stated at the lower of cost (first-in, first-out method) or market. Income Taxes The Company accounts for income taxes under the provisions of SFAS No. 109, "Accounting for Income Taxes." SFAS No.109 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities. EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Depreciation Office furniture, equipment and leasehold improvements, are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated economic useful lives of the related assets as follows: Furniture & Fixtures 5-10 years Equipment 5- 7 years Leasehold improvements 8-15 years Maintenance and repairs are charged to operations; betterments are capitalized. The cost of property sold or otherwise disposed of and the accumulated depreciation thereon are eliminated from the property and related accumulated depreciation accounts, and any resulting gain or loss is credited or charged to income. Amortization Intangible assets are amortized over useful life of 10 years. The Company has adopted the Financial Accounting Standards Board SFAS No., 121, "Accounting for the Impairment of Long-lived Assets." SFAS No. 121 addresses the accounting for (i) impairment of long-lived assets, certain identified intangibles and goodwill related to assets to be held and used, and (ii) long-live lived assets and certain identifiable intangibles to be disposed of. SFAS No. 121 requires that long-lived assets and certain identifiable intangibles be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected future cash flows from the used of the asset and its eventual disposition (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized. Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Concentration of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution, in the form of demand deposits. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Earnings (Loss) Per Share Diluted net income per common share was calculated based on an increased number of shares that would be outstanding assuming that the warrants are converted to common shares. The effect of outstanding common stock equivalents are anti-dilutive for three and nine months ended September 30, 2002 and 2001. The reconciliations of the numerators and denominators of the basic loss per share computations are as follows:
Per Share Income Shares Amount ------------------ ----------------- ----------------- (Numerator) (Denominator) For the three months ended September 30, 2002 --------------------------------------------------------- Basic EPS Net Loss to common shareholders $ (93,547) 45,048,299 $ - ================== ================= =================
EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Earnings (Loss) Per Share (Continued)
Per Share Income Shares Amount ------------------ ----------------- ----------------- (Numerator) (Denominator) For the three months ended September 30, 2001 --------------------------------------------------------- Basic EPS Net Loss to common shareholders $ (119,409) 45,048,299 $ - ================== ================= ================= For the nine months ended September 30, 2002 --------------------------------------------------------- Basic EPS Net Loss to common shareholders $ (386,923) 45,048,299 $ (0.01) ================== ================= ================= For the nine months ended September 30, 2001 --------------------------------------------------------- Basic EPS Net Loss to common shareholders $ (311,610) 45,002,130 $ (0.01) ================== ================= =================
Reclassifications Certain reclassifications have been made in the 2001 financial statements to conform with the 2002 presentation. NOTE 2 - SHORT-TERM NOTES PAYABLE Short-Term Notes Payable consist of loans from unrelated entities as of September 30, 2002 and December 31, 2001. The notes are payable one year from the date of issuance together with interest at 6.50% A.P.R. NOTE 3 - INCOME TAXES As of September 30, 2002, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $13,000,000 that may be offset against future taxable income through 2022. Current tax laws limit the amount of loss available to be offset against future taxable EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 3 - INCOME TAXES (Continued) income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount. NOTE 4 - PURCHASE OF SUBSIDIARIES The Company has entered into a non-binding letter of intent to acquire a 16 unit regional restaurant chain. Either party to the letter may terminate the letter of intent without penalty. The parties have agreed to proceed toward negotiation of a mutually agreeable purchase agreement. No assurances can be given that the purchase of the restaurant chain will be completed. NOTE 5 - RENT AND LEASE EXPENSE The Company occupies various retail restaurant space under operating leases beginning October 1997 and expiring at various dates through 2012. The minimum future lease payments under these leases for the next five years are:
Year Ended December 31, Real Property Equipment --------------------------------- ----------------- ----------------- 2002 $ 128,496 $ - 2003 84,996 - 2004 84,996 - 2005 84,996 - 2006 84,996 - ----------------- ----------------- Total minimum future lease payments $ 468,480 $ - ================= =================
The leases generally provides that insurance, maintenance and tax expenses are obligations of the Company. It is expected that in the normal course of business, leases that expire will be renewed or replaced by leases on other properties. EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 6 - RELATED PARTY TRANSACTIONS During 2001 and the nine months ended September 30, 2002, an officer, Joe Fiore, CEO of the Company, and/or companies controlled by the officer paid expenses and made advances to the Company. As of September 30, 2002, $1,734,266 in advances was due to Mr. Fiore. NOTE 7 - CONVERTIBLE PREFERRED STOCK, DEBENTURES, WARRANTS & OPTIONS Holders of Convertible Preferred Stock received 1,086,957 shares of the Company's Common stock during 2000 in conversion of 2 shares of Series B Convertible Preferred Stock. As of December 31, 2000 there were no remaining shares of Convertible Preferred Stock outstanding. During 2000, holders of $162,500 of Convertible debentures received 800,000 shares of Common Stock on conversion of debentures. The following table sets forth the options and warrants outstanding as of September 30, 2002 and December 31, 2001.
September 30, December 31, 2002 2001 ------------------ ------------------ Options & warrants outstanding, beginning of year 1,247,750 1,247,750 Granted - - Expired - - Exercised - - ------------------ ------------------ Options & warrants outstanding, end of year 1,247,750 1,247,750 ================== ================== Exercise price for options & warrants outstanding, end of year $0.50 to $1.79 $0.50 to $1.79 ================== ==================
NOTE 8 - RESTAURANT CLOSURES During 2000, E.A.J. MO, Inc., E.A.J. Shoppes, Inc., E.A.J. Walnut Street, Inc., and the third 137855 Ontario restaurants were closed and substantially all assets and leasehold improvements abandoned. This abandonment of assets has been reported in the financial statements as a loss on sale of assets at $1,808,168 for the year ended December 31, 2000. EAT AT JOE'S LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Continued) NOTE 8 - RESTAURANT CLOSURES (Continued) During the three months ended June 30, 2002, the restaurant in Etobicoke, Ontario, Canada was closed and substantially all assets and leasehold improvements abandoned. This abandonment of assets has been reported in the financial statements as a loss on sale of assets at $154,434 for the nine months ended September 30, 2002. NOTE 10 - BUSINESS CONDITION The Company has incurred a net loss from operations for the nine months ended September 30, 2002 and 2001 of $102,993 and $229,735 respectively, and the Company used cash of $112,294 in operating activities for the nine months ended September 30, 2002, and used cash of $61,204 in operating activities for the nine months ended September 30, 2001. As of September 30, 2002, the Company had a working capital deficit of $2,332,511. Management plans to open at least four new restaurants during 2002. The Company needs to obtain additional financing to fund payment of obligations and to provide working capital for operations and to finance future growth. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its operating expenses. Management believes these efforts will generate sufficient cash flows from future operations to pay the Company's obligations and realize other assets. There is no assurance any of these transactions will occur. Item 2. Management's Discussion and Analysis or Plan of Operation. General - This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's annual report on Form 10-KSB for the year ended December 31, 2001. Results of Operations - From March 1, 1990 to December 12, 1995 the Company was an inactive corporation. From December 12, 1995 to November 1997 the Company was a development stage company and had not begun principal operations. During November and December, 1997 two restaurants were opened and began operations. Two restaurants were opened, during May 1998, and three restaurants were opened during third quarter 1998 (1 per month) and one restaurant was opened and began operations during October 1998. During March 1999 the Company purchased and began operating three restaurants in Ontario Canada. During second and third quarter of 1999, four U.S. restaurants and two Canadian restaurants were closed and substantially all assets and leasehold improvements abandoned. During 2000, the Company opened two new restaurants in Ontario, Canada. Also during 2000, the Company closed three U.S. restaurants and one Canadian restaurant and substantially all assets and leasehold improvements were abandoned. During the three months ended June 30, 2002, the Company closed one Canadian restaurant and substantially all assets and leasehold improvements were abandoned. After its review of over one year of operating revenues from the U.S. units, management decided to cease operations and cut any negative cash drain from these units. Also, in contemplating acquisitions, there would be an overlap of use clauses in every center where these units were located. When management carefully reviewed the Canada locations, although high-profile, the economic costs of occupancy made continuing operations unfeasible without expending additional capital of which management felt would be utilized more prudently within existing already cash-flow positive units. Management believes these closings will strengthen cash flows position after the initial close down costs. During the three months ended September 30, 2002 the company operated one restaurant. During the three months ended September 30, 2001 the Company operated two restaurants. Total Revenues - For the three months ended September 30, 2002 and 2001, the Company had total sales of approximately $285,000 and $372,000 respectively. Costs and Expenses - For the three months ended September 30, 2002 and 2001, the Company had a net loss from operations of approximately $60,000 and $81,000 respectively. Other Income (Expense), Net - For the three months ended September 30, 2002 and 2001 the Company reported net other expenses in the amount of approximately $34,000 and $39,000. For the three months ended September 30, 2002 and 2001, these expenses primarily represent accrued interest on short term notes. LIQUIDITY AND CAPITAL RESOURCES For the three months ended September 30, 2002, the Company used approximately $44,000 in cash flow from operating activities. For the three months ended September 31, 2001, the Company provided approximately $4,000 in cash flow from operating activities. During the three months ended September 30, 2002 and 2001 the Company borrowed approximately $33,000 and $19,000, respectively from shareholder advances and short-term notes. The Company expects future development and expansion will be financed through cash flow from operations and other forms of financing such as the sale of additional equity and debt securities, capital leases and other credit facilities. There are no assurances that such financing will be available on terms acceptable or favorable to the Company. Government Regulations - The Company is subject to all pertinent Federal, State, and Local laws governing its business. Each Eat at Joe's is subject to licensing and regulation by a number of authorities in its State or municipality. These may include health, safety, and fire regulations. The Company's operations are also subject to Federal and State minimum wage laws governing such matters as working conditions, overtime and tip credits. Item 3. Controls and Procedures The Company's Chief Executive Officer and Chief Financial Officer have concluded, based on an evaluation conducted within 90 days prior to the filing date of this Quarterly Report on Form 10- QSB, that the Company's disclosure controls and procedures have functioned effectively so as to provide those officers the information necessary to evaluate whether: (i) this Quarterly Report on Form 10-QSB contains any untrue statement of a material fact or omits 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 Quarterly Report on Form 10-QSB, and (ii) the financial statements, and other financial information included in this Quarterly Report on Form 10-QSB, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Quarterly Report on Form 10-QSB. There have been no significant changes in the Company's internal controls or in other factors since the date of the Chief Executive Officer's and Chief Financial Officer's evaluation that could significantly affect these internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. 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 Matters to a Vote of Security Holders. None Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K Exhibits The following exhibits are included as part of this report: Exhibit Number Title of Document 99.1 Certification Pursuant to 18 U.S.C. ss 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.2 Certification Pursuant to 18 U.S.C. ss 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. The Company did not file a report on Form 8-K during 3rd quarter 2002. 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. EAT AT JOE'S LTD. ------------------ (Registrant) DATE: November 13, 2002 By: /s/ Joseph Fiore ------------------------- ------------------------------------------ Joseph Fiore C.E.O., Chairman, Secretary, Director (Principal Executive & Accounting Officer) I, Joseph Fiore, certify that: 1. I have reviewed this quarterly report on form 10-QSB of Eat at Joe's Ltd. 2. Based on my knowledge, this quarterly 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 quarterly report. 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in exchange act rules 13a-14 and 15d-14) for the registrant and have: A) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; B) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "evaluation date"); and C) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the evaluation date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): A) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and B) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: November 13, 2002 /s/ Joseph Fiore Joseph Firoe CEO, Chairman, Secretary, Director (Principal Executive & Accounting Officer)