-----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, KDvoWceADqwP7MlZfM7roZvDtuIA476syAR80fNN2Pf+Wl4nZjcanyhQWor2raue TjI/qhS+VSNbj6Z9zwOvFw== 0001014897-10-000080.txt : 20100514 0001014897-10-000080.hdr.sgml : 20100514 20100514110115 ACCESSION NUMBER: 0001014897-10-000080 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20100331 FILED AS OF DATE: 20100514 DATE AS OF CHANGE: 20100514 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27251 FILM NUMBER: 10831273 BUSINESS ADDRESS: STREET 1: 1313 10TH AVENUE LANE, SE CITY: HICKORY STATE: NC ZIP: 28602 BUSINESS PHONE: 8884672231 MAIL ADDRESS: STREET 1: 1313 10TH AVENUE LANE, SE CITY: HICKORY STATE: NC ZIP: 28602 FORMER COMPANY: FORMER CONFORMED NAME: JARRETT FAVRE DRIVING ADVENTURE INC DATE OF NAME CHANGE: 19990827 10-Q 1 dalejarrett10q1q10.txt FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2010 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended March 31, 2010 - -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) 1313 10th Avenue Lane SE, Hickory, NC 28602 (Address of principal executive offices, Zip Code) (888) 467-2231 (Registrant's telephone number, including area code) Indicate by check mark 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [x] No [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act): Large accelerated filer [ ] Non-accelerated filer [ ] Accelerated filer [ ] Smaller reporting company [x] 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, April 30, 2010: Common Stock - 24,510,502 2 DALE JARRETT RACING ADVENTURE, INC. FORM 10-Q For the quarterly period ended March 31, 2010 INDEX Page ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosure About Market Risk 10 Item 4T. Controls and Procedures 10 PART II - OTHER INFORMATION Item 1. Legal Proceedings 11 Item 1A. Risk Factors 11 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 11 Item 3. Defaults upon Senior Securities 11 Item 4. Submission of Matters to a Vote of Security Holders 11 Item 5. Other Information 11 Item 6. Exhibits 11 SIGNATURES 3 PART I Item I - FINANCIAL STATEMENTS Dale Jarrett Racing Adventure, Inc. Condensed Balance Sheets March 31, December 31, 2010 2009 -------- ----------- (Unaudited) ASSETS Current assets: Cash $ 383,971 $ 544,563 Accounts receivable 110,965 58,484 Spare parts and supplies 155,507 149,844 Prepaid expenses and other current assets 35,687 64,494 ----------- ----------- Total current assets 686,130 817,385 ----------- ----------- Property and equipment, at cost, net of accumulated depreciation of $790,992 and $757,747 571,869 574,368 ----------- ----------- Other assets 3,600 3,600 ----------- ----------- $ 1,261,599 $1,395,353 =========== =========== LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities: Current portion of long-term debt $ 24,008 $ 23,627 Accounts payable 54,124 152,422 Accrued expenses 52,177 34,026 Deferred revenue 1,171,988 1,153,313 ----------- ----------- Total current liabilities 1,302,297 1,363,388 ----------- ----------- Long-term debt 42,056 48,182 ----------- ----------- Stockholders' (deficit): Preferred stock, $.0001 par value, 5,000,000 shares authorized, - - Common stock, $.0001 par value, 200,000,000 shares authorized, 24,510,502 issued and 24,014,752 and 24,216,002 shares outstanding at March 31, 2010 and December 31, 2009, respectively 2,451 2,451 Additional paid-in capital 6,184,480 6,184,480 Treasury stock, 495,750 and 294,500 shares, respectively, at cost (29,998) (17,867) Accumulated (deficit) (6,239,687) (6,185,281) ----------- ----------- Total stockholders' deficit (82,754) (16,217) ----------- ----------- $ 1,261,599 $ 1,395,353 =========== =========== See accompanying notes to condensed financial statements 4 Dale Jarrett Racing Adventure, Inc. Condensed Statements of Operations For The Three Months Ended March 31, 2010 and 2009 (Unaudited) 2010 2009 -------- -------- Sales $ 598,637 $ 447,487 Cost of sales and services 285,886 246,340 ----------- ----------- Gross profit 312,751 201,147 ----------- ----------- General and administrative expenses 366,538 366,727 ----------- ----------- (Loss) from operations (53,787) (165,580) Other income and (expense): Interest income 553 548 Interest expense (1,172) (1,536) ----------- ----------- (619) (988) ----------- ----------- (Loss) before taxes (54,406) (166,568) Income taxes - - ----------- ----------- Net (loss) $ (54,406) $ (166,568) Per share information: Basic and diluted (loss) per share $ (0.00) $ (0.01) =========== =========== Weighted average shares outstanding 24,038,963 24,110,502 =========== =========== See accompanying notes to condensed financial statements. 5 Dale Jarrett Racing Adventure, Inc. Condensed Statements of Cash Flows For The Three Months Ended March 31, 2010 and 2009 (Unaudited) 2010 2009 -------- -------- Net cash (used in) operating activities $ (111,970) $ (207,644) ----------- ----------- Cash flows from investing activities: Acquisition of property and equipment (30,746) (24,560) ----------- ----------- Net cash (used in) investing activities (30,746) (24,560) Cash flows from financing activities: Repayment of long-term debt (5,745) (7,825) Purchase of treasury stock (12,131) - ----------- ----------- Net cash (used in) financing activities (17,876) (7,825) (Decrease) in cash (160,592) (240,029) ----------- ----------- Cash and cash equivalents, beginning of period 544,563 522,695 ----------- ----------- Cash and cash equivalents, end of period $ 383,971 $ 282,666 =========== =========== Supplemental Cash Flow Information: Cash paid for interest 1,172 1,536 =========== =========== Cash paid for income taxes - - =========== =========== See accompanying notes to condensed financial statements. 6 DALE JARRETT RACING ADVENTURE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS March 31, 2010 (UNAUDITED) (1) Basis Of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and Rule 8.03 of Regulation SX. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all 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, 2009, including notes thereto included in the Company's Form 10-K. (2) Earnings Per Share The Company calculates net income (loss) per share as required by The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. 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) Spare Parts and Supplies Spare parts and supplies include engine parts, tires, and other supplies used in the racecar operation and are recorded at cost. (4) Property and Equipment Property and equipment are recorded at cost and are depreciated using the straight-line method over the estimated useful lives of the respective assets, ranging from 3 to 10 years. Major additions are capitalized, while minor additions and maintenance and repairs, which do not extend the useful life of an asset, are expensed as incurred. 7 DALE JARRETT RACING ADVENTURE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS March 31, 2010 (UNAUDITED) (5) Stockholders' Equity During the quarter ended March 31, 2010, the Company purchased a total of 201,250 shares of its common stock for cash aggregating $12,131, which is classified as treasury stock in the accompanying balance sheet as of March 31, 2010. (6) Legal Proceedings The Company is a defendant in litigation related to an alleged breach of contract and the case is currently pending in the circuit court of Talladega County, Alabama. The Company is currently in settlement negotiations and has accrued $17,500 related to this contingency. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Trends and Uncertainties. Demand for the Corporation's services and 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 services and 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 2010. 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 and cash comprises 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 has no immediate offering plans in place. The board of directors shall determine the amount and type of financing as the Corporation's financial situation dictates. For the three months ended March 31, 2010, the Corporation acquired plant and equipment of $30,746 resulting in net cash used in investing activities of $30,746. Comparatively, for the three months ended March 31, 2009, the Corporation acquired plant and equipment of $24,560 resulting in net cash used in investing activities of $24,560. 9 For the three months ended March 31, 2010, the Corporation reduced its outstanding debt by repaying notes payable of $5,745 and purchased treasury stock of $12,131. As a result, the Corporation had net cash used in financing activities of 17,876 for the three months ended March 31, 2010. Comparatively, for the three months ended March 31, 2009, the Corporation reduced its outstanding debt by repaying notes payable of $7,825. As a result, the Corporation had net cash used in financing activities of $7,825 for the three months ended March 31, 2009. On a long term basis, liquidity is dependent on continuation of operation and receipt of revenues. Results of Operations. For the three months ended March 31, 2010, the registrant had sales of $598,637 with cost of sales of $285,886 for a gross profit of $312,751. Comparatively, for the three months ended March 31, 2009, the registrant had sales of $447,487 with cost of sales of $246,340 for a gross profit of $201,147. The increase in revenue of $151,150, or 33.8%, resulted in an increase in cost of sales of $39,546, or 16.1%, due to increased customers and related costs to service those extra customers. The gross profit percentage increased from 45.0% to 52.2% because of increased sales and relatively fixed track and race equipment costs. For the three months ended March 31, 2010, the registrant had general and administrative expenses of $366,538. Comparatively, for the three months ended March 31, 2009, the registrant had general and administrative expenses of $366,727. The percentage of general and administrative expenses to revenues for the three months ended March 31, 2010 decreased to 61.23% from 81.95% for the three months ended March 31, 2009 due to increased revenues and management's ongoing effort to maintain and/or reduce these types of expenses. 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 operations. The Corporation's management is of the opinion that future revenues will be sufficient to pay its expenses for the next twelve months. The Corporation is not currently pursuing financing for its operations. The Corporation is seeking to expand its revenue base. Failure to expand its revenue base may result in the Corporation depleting its available funds and not being able pay its obligations. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk We do not consider the effects of interest rate movements to be a material risk to our financial condition. We do not hold any derivative instruments and do not engage in any hedging activities. Item 4T. Controls and Procedures During the three months ended March 31, 2010, there were no changes in our internal controls over financial reporting (as defined in Rule 13a- 15(f) and 15d-15(f) 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 Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2010. Based on this evaluation, our chief executive officer and chief principal financial officers have concluded such controls and procedures to be effective as of March 31, 2010 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. 11 PART II - OTHER INFORMATION Item 1. Legal Proceedings. not applicable. Item 1A. Risk Factors. not applicable Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. not applicable. Item 3. Defaults Upon Senior Securities. not applicable. Item 4. Submission of Matters to a Vote of Security Holders. not applicable. Item 5. Other Information. not applicable. Item 6. Exhibits Exhibit 31 - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Exhibit 32 - Certifications 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: May 14, 2010 DALE JARRETT RACING ADVENTURE, INC. By: /s/Timothy Shannon - --------------------------- Timothy Shannon, Principal Executive Officer EX-31 2 dalejarrett10q1q10ex31.txt 302 CERTIFICATION 302 CERTIFICATION I, Timothy B. Shannon, certify that: 1. I have reviewed this quarterly report on Form 10-Q 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 registrant 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 control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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 registrant'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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant'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 registrant's auditors and the audit committee of the registrant'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 registrant'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 registrant's internal control over financial reporting. Date: May 14, 2010 /s/Timothy B. Shannon ---------------------------- Timothy B. Shannon Chief Executive Officer Chief Financial Officer EX-32 3 dalejarrett10q1q10ex32.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 The undersigned officer of Dale Jarrett Racing Adventure, Inc. (the "Company"), hereby certifies, to such officer's knowledge, that the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Timothy B. Shannon ---------------------- Timothy B. Shannon Chief Executive Officer Chief Financial Officer May 14, 2010 -----END PRIVACY-ENHANCED MESSAGE-----