-----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, LelBBHUfyGQ43G1tVHh48pua7hsThU3IzpdXUOznCmHPQFFfxJXc2gR4+YL1FTfJ RKqqj1umIGNvcOJn0uzdBQ== 0000910680-01-500361.txt : 20010816 0000910680-01-500361.hdr.sgml : 20010816 ACCESSION NUMBER: 0000910680-01-500361 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN JEWELRY CORP CENTRAL INDEX KEY: 0001098332 STANDARD INDUSTRIAL CLASSIFICATION: JEWELRY, PRECIOUS METAL [3911] IRS NUMBER: 841516192 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-28663 FILM NUMBER: 1714461 BUSINESS ADDRESS: STREET 1: 131 WEST 35TH STREET CITY: NEW YORK STATE: NY ZIP: 10001 BUSINESS PHONE: 2127360880 MAIL ADDRESS: STREET 1: 131 WEST 35TH STREET CITY: NEW YORK STATE: NY ZIP: 10001 FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED CEILING SUPPLIES INC DATE OF NAME CHANGE: 19991103 10QSB 1 d740605_1.txt FORM 10QSB FOR JUNE 30, 2001 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-28663 AMERICAN JEWELRY CORP. (Exact name of small business issuer as specified in its charter) DELAWARE 84-1516192 (State of other jurisdiction of (I.R.S. Employer) incorporation or organization) Identification No.) 131 West 35th Street New York, New York 10001 (Address of principal executive offices) (212) 736-0880 (Issuer's Telephone Number, Including Area Code) Not Applicable (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 |_| State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: Common Stock, $.001 par value per share - 10,518,985 shares outstanding as of June 30, 2001; Series A Preferred Stock, $.001 par value per share - 200,000 shares outstanding as of June 30, 2001. AMERICAN JEWELRY CORP. FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 2001
PART I. FINANCIAL INFORMATION PAGE ---- Item 1. Financial Statements. Index to Financial Statements F-1 Consolidated Balance Sheets as of June 30, 2001 F-2 Consolidated Statement of Operations for the Three Months ended June 30, 2001 and June 30, 2000, and for the Six Months ended June 30, 2001 and June 30, 2000. F-3 Consolidated Condensed Statements of Cash Flows for the Six Months ended June 30, 2001 and June 30, 2000 F-4 Notes to Financial Statements F-5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 7 PART 11. OTHER INFORMATION Item 1. Legal Proceedings. 8 Item 2. Changes in Securities and Use of Proceeds. 8 Item 3. Defaults upon Senior Securities. 8 Item 4. Submission of Matters to a Vote of Security Holders. 8 Item 5. Other Information. 8 Item 6. Exhibits and Reports on Form 8-K. 8
1 AMERICAN JEWELRY CORP. AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS Consolidated Balance Sheet .............................................F-2 Consolidated Statements of Operations ..................................F-3 Consolidated Statements of Cash Flows ..................................F-4 Notes fo Consolidated Financial Statements .............................F-5 F-1
AMERICAN JEWELRY CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2001 ASSETS CURRENT ASSETS: Cash $ 24,778 Accounts receivable, net 1,232,421 Inventory 8,418,820 Loan to shareholders 531,883 ------------------ TOTAL CURRENT ASSETS 10,207,902 PROPERTY AND EQUIPMENT, net 408,667 OTHER ASSETS: Intangible assets 300,000 Other 74,526 ------------------ $ 10,991,095 ================== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 971,911 Loans payable 520,000 Convertible debentures 881,161 ------------------ TOTAL CURRENT LIABILITIES 2,373,072 ------------------ STOCKHOLDERS' EQUITY: Common stock, $.001 par value -325,000,000 shares authorized, 10,518,985 shares issued and outstanding 10,519 Preferred stock, $.001 par value - 5,000,000 shares authorized, 200,000 Series A shares issued and outstanding 200 Treasury stock (10,428) Additional paid-in capital 47,069,526 Accumulated deficit (38,451,794) ------------------ TOTAL STOCKHOLDERS' EQUITY 8,618,023 ------------------ $ 10,991,095 ================== See notes to consolidated financial statements F-2 AMERICAN JEWELRY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended June 30, Six Months Ended June 30, ---------------------------------- -------------------------------- 2001 2000 2001 2000 (Restated) (Restated) ------------------ -------------- --------------- ---------------- Net sales $ 2,112,283 $ 2,073,574 $ 3,487,964 $ 3,546,974 Cost of goods sold 1,513,289 1,676,352 2,625,439 2,566,629 ------------------ -------------- --------------- ---------------- Gross profit 598,994 397,222 862,525 980,345 Non cash compensation expense 225,000 225,000 225,000 225,000 Selling, general and administrative 592,718 462,678 1,215,862 922,579 Stock compensation 2,443,197 - 2,657,741 - Bad debt recovery - (700,000) - (700,000) ------------------ -------------- --------------- ---------------- Income (loss) from operations (2,661,921) 409,544 (3,236,078) 532,766 Interest expense 43,529 289,958 61,369 580,294 ------------------ -------------- --------------- ---------------- Net income (loss) $ (2,700,533) $ 119,586 $ (3,292,530)$ (47,528) ================== ============== =============== ================ Basic and diluted net income (loss) per share Net income (loss) per share $ (0.69)$ 0.46 $ (1.32)$ (0.22) ================== ============== =============== ================ Weighted average common shares outstanding 3,916,554 260,920 2,506,185 216,811 * ================== ============== =============== ================ * Prior periods share restated 1:300 reverse split. See notes to consolidated financial statements F-3 STATEMENT OF CASH FLOWS AMERICAN JEWELRY CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, ------------------------------ 2001 2000 ------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES : Net loss $ (3,292,530)$ (47,528) ------------- ---------------- Adjustment to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 65,480 17,500 Amortization 37,500 - Officers' compensation 225,000 225,000 Fee and interest on convertible debentures 46,286 - Interest expense on conversion benefit 2,657,741 27,043 Amortization of deferred compensation - 102,498 Write-off of deferred financing and offering costs - 118,146 Change in assets and liabilities; Increase in accounts receivable 501,714 (560,838) Decrease in inventories 500,000 2,557,368 Increase in other assets (33,626) (210,125) Decrease (Increase) in accounts payable and accrued expenses 80,097 (1,046,273) ------------- ---------------- Total adjustments 4,080,192 1,230,319 ------------- ---------------- Net cash provided by (used in) operating activities 782,745 1,182,791 ------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES : Acquisition of property and equipment - (170,374) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of notes payable - financial instituions - (1,884,498) Proceeds from convertible debentures 600,000 224,450 Repayment of loans - (184,464) Proceeds from issuance of stock - 1,039,000.00 Redemption of treasury stock (10,428) - Advances to stockholders (531,883) - Repayment to stockholders (914,964) (297,636) ------------- ---------------- Net cash used in (provided by) by financing activities (857,275) (1,103,148) ------------- ---------------- Net increase in cash (74,530) (90,731) Cash - beginning of year 99,308 97,465 ------------- ---------------- Cash - end of year $ 24,778 $ 6,734 ============= ================ SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION : Interest paid $ - $ 27,043 ============= ================ NON-CASH FINANICING AND INVESTING ACTIVITIES: Forgiveness of debt by financial institution $ - $ 4,446,040 ============= ================ Conversion of debentures $ 723,160 $ 691,760 ============= ================ Forgiveness of notes payable by related party $ - $ 2,000,000 ============= ================ See notes to consolidated financial statements F-4
AMERICAN JEWELRY CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The accompanying condensed financial statements have been prepared in accordance with generally accounting principles for interim financial information and with 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 (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the six-month period ended June 30, 2001 are not necessarily indicative of the results to be expected for the year ended December 31, 2001. The condensed interim financial statements should be read in conjunction with the audited financial statements and notes, contained in the Form 10-KSB filed on April 17, 2001. 2. STOCKHOLDERS EQUITY Convertible Debentures: During the six-months ended June 30, 2001, the Company received $600,000 for debentures issued during the year ending December 31, 2000. Such amounts received have been converted into 4,090,742 shares of the Company's common stock with the recording of $1,127,886 beneficial convertible features. Furthermore, the Company issued 33,334 shares of common stock to the existing debenture holders to convert the above debentures in the amount of $104,321 in connection with a settlement agreement entered into on December 31, 2000 with the existing debenture holders. Moreover, in connection with a settlement agreement between the existing debenture holders and a third party on December 31, 2000 to sell the debentures, the existing debenture holders were paid $500,000. In addition, the new debenture holder converted the debentures in the amount of $171,000 into 5,368,238 shares of common stock with the recording of $1,529,855 beneficial convertible features. 3. COMMON STOCK On April 30, 2001 the Company elected to effect a 1:300 reverse stock split of its common stock. Concurrent with the reverse split, the Company's ticker symbol has changed to AMJC (OTC BB). F-5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SIX-MONTH AND THREE MONTH PERIODS ENDED JUNE 30, 2001 COMPARED TO SIX-MONTH AND THREE MONTHS PERIODS ENDED JUNE 30, 2000 Net sales amounted to $3,487,964 for the six-month period ended June 30, 2001, compared to $3,546,974 a decrease of $59,010 or 2% from the six-month period ended June 30, 2000. Net sales for the three months ended June 30, 2001 were $2,112,283 compared to $2,073,574 for the same period in 2000, an increase of 2%. The changes in sales are not deemed material. Gross profit decreased by $117,820 or 12%, to $862,525 for the six-month period ended June 30, 2001 from $980,345 for the six-month period ended June 30, 2000. Gross profit for the three months ended June 30, 2001 increased by $201,772 to $598,994 in 2001 from $397,222 for the same period in 2000. Gross profit, estimated by management for interim periods, was decreased to 25% for the six-month period ended June 30, 2001 from 28% for the six-month period ended June 30, 2000. This reduction is not deemed material and is subject to adjustments in later periods. Selling, General and Administrative expenses increased by $288,366, or 31% to $1,210,945, or 35% of net revenues, for the six-month period ended June 30, 2001, from $922,579 or 26% of net revenues for the six-month period ended June 30, 2000. Selling, General and Administrative expenses increased by $125,123, or 27% to $592,718, or 28% of net revenues, for the three-month period ended June 30, 2001, from $462,678 or 22% of net revenues for the three-month period ended June 30, 2000. The principal increase in expenses was due to increased costs related to acquisitions and restructuring of Company's debt and equity. Interest expenses decreased to $61,369 for the six-month period ended June 30, 2001 from $580,294 for the six-month period ended June 30, 2000. Interest expenses decreased to $43,529 for the three-month period ended June 30, 2001 from $298,958 for the three-month period ended June 30, 2000. The decrease is primarily due to the elimination of note payable to financial institution and reduction of outstanding debentures payable that were in place in 2000. LIQUIDITY AND CAPITAL RESOURCES Historically the Company financed operations principally through collections of accounts receivable, loans from financing institutions, issuance of stock and advances from officers. In the six months ended June 30, 2001, the Company financed operations from proceeds from sales. We believe the Company will be able to finance future operations from cash generated from operations. Working capital increased by $677,932 TO $7,886,991 at June 30, 2001, from $7,209,059 at June 30, 2000. The Company's operating activities generated cash in the amount of $782,745 for the six month period ended June 30, 2001 as compared to $1,182,791 for the same period in 2000. There were no investing activities in 2001. In the six months ended June 30, 2000 the Company acquired property and equipment for $170,341. The Company used net cash in financing activities in the amount of $857,275 during the six month period ended June 30, 2001, as compared to $1,103,148 during the six month period ended June 30, 2000. The principal use of cash in financing activities in 2001 was repayment of debt and advances to 7 stockholders. The principal use of cash in financing activities in 2000 was repayment of loan payable to financial institution. PART II - OTHER INFORMATION Item 1. Legal Proceedings. ----------------- Incorporated by reference herein to the Company's Form 10-KSB for the fiscal year ended December 31, 2000, as filed with the Securities and Exchange Commission on April 17, 2001. Item 2. Changes in Securities and Use of Proceeds. ------------------------------------------ The holders of certain 8% Convertible Debentures due 2002 of the Company (the "Debentures") entered into a purchase agreement with third parties (the "Purchasers") to sell $100,000 of the Debentures to the Purchasers. The Company exchanged the Debentures purchased by the Purchasers with debentures issued by the Company that were amended to extend the maturity date an additional year and to amend the conversion price to the lower of (i) 92% of the average of the closing sale price of the Company's Common Stock for the five trading days prior to the applicable conversion rate or (ii) $.015, subject to typical adjustments in the event of stock splits and the like. The Company has also entered into an agreement with the Purchasers of the amended debentures, which provides for limitations on the amount of the amended debentures to be converted. Item 3. Defaults Upon Senior Securities. ------------------------------- None. Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- (a) Date of Special Meeting: April 30, 2001 (b) Approval of amendment to the Company's Certificate of Incorporation to effect a 1:300 reverse stock split of the Company's issued and outstanding shares of common stock, par value $0.0001 per share. STOCKHOLDER VOTES ----------------- For: 415,085,619 Against: 29,327,204 Abstentions: 175,500 Broker non-votes: 0 Item 5. Other Information. ----------------- None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits None. (b) Reports on Form 8-K None. 8 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: August 14, 2001 American Jewelry Corp. By: /s/ Isaac Nussen --------------------------- Name: Isaac Nussen Title: President and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----