-----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, TChO1BCL8wJizNo8u032QV9GG9+q2UfLXQUwyF86yI+IUfruv0hy4hEtPfM5x7xH fWOAcGd5GV1fRUOBpSrLFA== /in/edgar/work/0001012709-00-001036/0001012709-00-001036.txt : 20001115 0001012709-00-001036.hdr.sgml : 20001115 ACCESSION NUMBER: 0001012709-00-001036 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JORDAN AMERICAN HOLDINGS INC CENTRAL INDEX KEY: 0000855663 STANDARD INDUSTRIAL CLASSIFICATION: [6282 ] IRS NUMBER: 650142815 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-18974 FILM NUMBER: 766295 BUSINESS ADDRESS: STREET 1: 1875 SKI TIME SQUARE DRIVE STREET 2: SUITE ONE CITY: STEAMBOAT SPRINGS STATE: CO ZIP: 80487-9015 BUSINESS PHONE: 9708791189 MAIL ADDRESS: STREET 1: 1875 SKI TIME SQUARE STREET 2: SUITE ONE CITY: STEAMBOAT SPRINGS STATE: CO ZIP: 80487-9015 FORMER COMPANY: FORMER CONFORMED NAME: CHRISTIAN PURCHASING NETWORK INC DATE OF NAME CHANGE: 19920703 10QSB 1 0001.txt JORDAN AMERICAN HOLDINGS, INC. - 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM l0-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2000 OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From ___________ to___________ Commission File Number 0- 18974 Jordan American Holdings, Inc. ------------------------------ (Exact name of registrant as specified in its charter) Florida 65-0142815 ------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 2155 Resort Drive, Suite 108, Steamboat Springs, CO 80487 --------------------------------------------------------- (Address of principal executive offices) (970) 879-1189 (Registrant's telephone number) 1875 Ski Time Square, Suite One, Steamboat Springs, CO 80487 ------------------------------------------------------------ (Former address) Indicate by check mark whether the registrant (1) has 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 filing requirements for the past 90 days. Yes [X] No [ ] As of September 30, 2000, 10,421,266 shares of the registrant's common stock were issued and outstanding. JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES TABLE OF CONTENTS PART I ITEM 1 FINANCIAL INFORMATION PAGE Consolidated Balance Sheets..................................... 3 Consolidated Statements of Operations........................... 4 Consolidated Statements of Cash Flows........................... 5 Notes to Consolidated Financial Statements...................... 6 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations........................................... 10 Liquidity and Capital Resources................................. 12 Risk Factors, Trends & Uncertainties............................ 12 2 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) SEPTEMBER 30, DECEMBER 31, A S S E T S 2000 1999 ----------- ----------- CURRENT ASSETS Cash & cash equivalents $ 870,655 $ 580,758 Marketable securities 1,216,268 607,882 Investment advisory fee receivable - net 563,010 846,907 Deposit with clearing broker 25,000 25,000 Notes receivable - officer 56,044 26,556 Prepaid expenses 92,176 50,678 Other receivable 51,642 108,625 ----------- ----------- Total current assets 2,874,795 2,246,406 ----------- ----------- FIXED ASSETS Property and equipment, at cost, net of accumulated depreciation and amortization of $158,811 and $133,005 respectively 82,497 88,228 ----------- ----------- OTHER ASSETS Notes receivable 650,000 500,000 Strategic Options Limited Partnership -- 27,058 ----------- ----------- Total other assets 650,000 527,058 ----------- ----------- TOTAL ASSETS $ 3,607,292 $ 2,861,692 =========== =========== LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 385,273 $ 329,265 Deferred revenue 48,079 35,300 Software license payable 36,799 58,721 ----------- ----------- Total current liabilities 470,151 423,286 ----------- ----------- STOCKHOLDERS' EQUITY 8% cumulative, convertible, non-voting preferred stock $0.01 par value, $1.00 liquidation value; authorized 5,000,000 shares 3,000,000 shares issued and outstanding 30,000 30,000 Common Stock, $0.001 par value; authorized 20,000,000 shares; 10,421,266 shares issued and outstanding at September 30, 2000 and December 31, 1999 10,421 10,421 Additional paid in capital 4,502,853 4,502,853 Deficit (1,406,133) (2,104,868) ----------- ----------- Total stockholders' equity 3,137,141 2,438,406 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 3,607,292 $ 2,861,692 =========== =========== See accompanying notes to consolidated financial statements 3 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
FOR THE FOR THE THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------------- ----------------------------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ REVENUES Commission income $ 38,637 $ 42,072 $ 179,882 $ 218,563 Investment advisory fees 896,117 400,702 2,525,212 904,077 Realized (loss) from trading -- (3,215) (5,322) (883) ------------ ------------ ------------ ------------ Total Revenues 934,754 439,559 2,699,772 1,121,757 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 697,081 353,783 1,777,608 1,049,603 ------------ ------------ ------------ ------------ Operating income 237,673 85,776 922,164 72,154 ------------ ------------ ------------ ------------ OTHER INCOME (EXPENSES): Interest and dividend income 40,739 21,252 111,171 72,119 Other income 3,928 11,233 12,926 46,048 Unrealized gain (loss) from trading (57,274) 31,238 (308,376) 65,993 ------------ ------------ ------------ ------------ Total Other Income (Expense), net (12,607) 63,723 (184,279) 184,160 ------------ ------------ ------------ ------------ NET INCOME BEFORE INCOME TAXES 225,066 149,499 737,885 256,314 Provision for income taxes 25,185 -- 39,153 ------------ ------------ ------------ ------------ NET INCOME 199,881 149,499 698,732 256,314 ============ ============ ============ ============ Basic earnings attributable to common stock per common share $ 0.01 $ 0.01 $ 0.05 $ 0.01 ============ ============ ============ ============ Diluted earnings attributable to common stock per common share $ 0.01 $ 0.01 $ 0.05 $ 0.01 ============ ============ ============ ============ Weighted-average number of common shares outstanding: Basic 10,421,266 10,421,266 10,421,266 10,421,266 ============ ============ ============ ============ Diluted 10,421,266 10,421,266 10,421,266 10,421,266 ============ ============ ============ ============
See accompanying notes to consolidated financial statements 4 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 1999 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 698,732 $ 256,314 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 25,806 17,598 Unrealized (gain) loss from trading 308,376 (65,993) Realized (gain) loss from trading 5,322 883 Changes in operating assets and liabilities: Trading marketable securities (895,026) 106,898 Investment advisory fee receivable - net 283,897 (151,237) Prepaid expenses (41,497) (27,921) Other receivable 56,985 58,203 Notes receivable - officers (29,488) (11,049) Accounts payable and accrued expenses 56,008 (10,083) Deferred revenue 12,779 7,019 Software license payable (21,922) 49,803 ------------ ------------ Net cash provided by operating activities 459,972 230,435 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Investment in corporate stock - restricted -- (56,250) Investment in Senior Yellow Pages, Inc. (150,000) -- Sale of IMPACT Management Growth Portfolio -- 57,092 Capital expenditures (20,075) (70,218) ------------ ------------ Net cash used in investing activities (170,075) (69,376) Net increase in cash and cash equivalents 289,897 161,059 Cash and cash equivalents, beginning of period 580,758 495,622 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 870,655 $ 656,681 ============ ============ Supplemental disclosure of cash flow information: Interest paid $ 2,927 $ 4,597 ============ ============
See accompanying notes to consolidated financial statements 5 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - ORGANIZATION Organization - ------------ Jordan American Holdings, Inc. (JAHI/the Company) was incorporated in Florida in May 1989. The Company also does business under the name of Equity Assets Management (EAM). The Company provides investment advisory and portfolio management services to individual investors, pooled accounts and its mutual fund with its customers located substantially in the United States. JAHI is registered as an investment advisor under the Investment Advisor Act of 1940. The Company owns 100% of the issued and outstanding common stock of IMPACT Financial Network, Inc. (IFNI) and IMPACT Administrative Services, Inc. (IASI). IASI provides operational and administrative support to Impact Management Investment Trust (see Note 2). JAHI's customer investment transactions are primarily brokered through IFNI, a registered broker-dealer in securities acting as a non-clearing introducing broker. The accompanying consolidated financial statements include the accounts of JAHI and its subsidiaries; all significant intercompany transactions have been eliminated during consolidation. In the opinion of management, the interim financial statements contain all adjustments necessary to present fairly the financial position of the Company. NOTE 2 - IMPACT MANAGEMENT INVESTMENT TRUST The Company formed Impact Management Investment Trust (the Trust), which is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company (mutual fund). Impact Total Return Portfolio (Portfolio) is the initial Series of the Trust. JAHI is the investment advisor of the Trust and IFNI is the Portfolio primary distributor of the Trust. As investment advisor of the Portfolio, the Company receives an annual investment advisory fee equal to 1.25% of the Portfolio's average daily net assets. Of this amount, 60 basis points is paid to the sub advisor of the Portfolio. NOTE 3 - NOTES RECEIVABLE The Company owns a $500,000 variable rate convertible subordinated debenture from Boston Restaurant Associates, Inc. (BRAI). The principal balance of the debenture is due and payable on December 31, 2011. The debenture has a conversion price of $1.25 per share and bears interest at a rate of 14% for 2000 and thereafter. In connection with the purchase of the debenture, the Company also acquired, at no cost, warrants to subscribe for the purchase from BRAI up to 500,000 fully paid and nonassessable shares of BRAI's common stock. The purchase rights represented by the warrants are exercisable by the 6 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 3 - NOTES RECEIVABLE (CONTINUED) Company, in whole or in part, at any time through December 31, 2006, at an exercise price of $3.00 per share. The Company provided "angel" financing through a convertible subordinated bridge note to Senior Yellow Pages, Inc. and its affiliates (SYP), an internet based eldercare infomediary. The principal balance of the note is due and payable upon the earlier of (1) the receipt by SYP or any affiliate of aggregate gross proceeds of at least $1,000,000 raised in an offering (the "First Round Financing") of SYP's Series A Convertible Preferred Stock or (2) redemption in cash on or prior to January 30, 2001. As an inducement to the Company providing bridge financing to SYP, SYP agreed to issue to the Company a 4% equity interest in SYP, on a fully diluted basis through future rounds of private financing. The note bears interest at a rate of 10% per annum. The carrying value of the above notes receivable approximates the fair market value as estimated by management, after considering such factors as current interest rates, liquidity, conversion terms and the credit worthiness of the borrowers. The Company's management has estimated the value of the BRAI warrants to be $-0- at September 30, 2000 and 1999. This determination was made considering primarily the current value of the underlying common stock and the current illiquidity of the warrants. NOTE 4 - STOCKHOLDERS' EQUITY At September 30, 2000 and December 31, 1999, the Company had stock warrants outstanding entitling the warrant holder to acquire 1,113,000 shares of common stock with a current exercise price of $0.50 per share and a current expiration date of June 5, 2010. The Company also has outstanding Underwriter Warrants related to the initial public offering entitling the holder to purchase 44,545 units (five shares of common stock and five stock warrants; two warrants entitle the holder to purchase one share of common stock for $0.60 per share) of the Company at a price of $2.58 per unit expiring at dates ranging from September 27, 2010 to January 8, 2011. JAHI has authorized 5,000,000 shares of $0.01 par value preferred stock. The Board of Directors is authorized to issue preferred stock in one or more series, to determine the rights thereto, and to fix the number of shares on any series of preferred stock and the designation of any such series. The Company issued 3,000,000 shares of 8% cumulative, convertible, non-voting preferred stock to a customer of EAM in a private placement offering. In connection with this offering, 750,000 7 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED) Shares of common stock were given to the Company to distribute to the preferred shareholder by three officers of the Company for no additional consideration. The preferred stock is convertible at the rate of one share of common stock for each $3.50 in face amount of the preferred stock converted. If at any time the closing bid price of the common stock for the period of thirty consecutive trading days exceeds $5.25 per share, then, in such event, the Company may, upon 30 days written notice, automatically convert the preferred stock to common stock at the rate of $3.50 in face amount of the shares converted. The preferred stock has a liquidation preference of $1.00 per share plus accrued and unpaid dividends. Semi-annual dividends in arrears on preferred stock at September 30, 2000 amounted to $540,000. In connection with the preferred stock offering, the Company obtained "key man" life insurance on the Company's president, in the amount of $3,750,000. The holder of the preferred stock is the direct beneficiary and would be redeemed at the rate of $1.25 per share, in exchange for such shares. NOTE 5 - RELATED PARTY TRANSACTIONS The Company has a loan to an officer bearing interest at a rate of 10% per annum in the amount of $56,044 and $26,556 at September 30, 2000 and December 31, 1999, respectively. In 1994, the Company's president established the Jordan Index Fund, L.P. (the "Fund"). The Fund engages in the speculative trading of stock index futures contracts, and may trade in equity securities and stock options. The Fund is administered by its general partner, Jordan Assets, Ltd. Jordan Assets, Ltd. is not a subsidiary of JAHI, although JAHI is registered as a principal of Jordan Assets, Ltd. with the Commodity Futures Trading Commission. All trading decisions for the Fund are made by Jordan Assets, Ltd. Certain administrative functions are provided to the Fund by JAHI in return for the fees earned by Jordan Assets, Ltd. No such fees were earned during the first three quarters of 2000 and 1999. NOTE 6 - FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISK, UNCERTAINTIES AND CONTINGENCIES In the normal course of business, the Company's client activities through its clearing broker involve the execution, settlement, and financing of various client securities transactions. These activities may expose the Company to off-balance sheet risk. In the event the client fails to satisfy its obligations, the Company may be required to purchase or sell financial instruments at prevailing market prices in order to fulfill the client's obligations. 8 JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 6 - FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISK, UNCERTAINTIES AND CONTINGENCIES (CONTINUED) In the Company's investment activities, the Company purchases securities for its own account and may incur losses if the market value of the securities decline subsequent to September 30, 2000. The Company's revenues are primarily derived from a percentage of the assets under management and performance fees based on the appreciation of those assets. Assets under management are impacted by both the extent to which the Company attracts new, or loses existing, clients and the appreciation or depreciation of the U.S. and international equity and fixed income markets. A downturn in general economic condition could cause investors to cease using the services of the Company. The Company's financial instruments, including cash, receivables and deposits, are carried at amounts which approximate fair value. The Company's marketable securities are carried at the September 30, 2000 market value. Payables and other liabilities are carried at amounts which approximate fair value. The Company has a substantial portion of its assets on deposit with banks and brokers. Assets deposited with banks and brokers are subject to credit risk. In the event of bank's or broker's insolvency, recovery of Company assets on deposit may be limited to account insurance or other protection afforded such deposits. In connection with a late 1997 examination of the Company, the SEC raised certain issues regarding possible violations of the federal securities laws in connection with the private placement of debentures of Boston Restaurant Associates, Inc. The matter has not been resolved and to the Company's knowledge the investigation is ongoing. Management of the Company does not expect resolution of this matter to have any material effect on the Company's financial condition, results of operations or business. These interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles. Such interim period consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements that are included in the Company's 1999 Form 10-KSB, which is contained in the Company's 1999 Annual Report to shareholders and is available without charge upon request to JAHI Investor Relations, 2155 Resort Drive, Suite 108, Steamboat Springs, Colorado, 80487, (970) 879-1189; Fax: (970) 879-1272; E-mail: info@jahi.com 9 PART 1, ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES Safe Harbor for Forward-Looking Statements Information found in this report contains forward-looking implications which may differ materially from actual results due to the success, or lack thereof, of JAHI's management decisions, marketing and sales effectiveness, investment decisions, and the management of clients' stock portfolios and pooled investments as influenced by market conditions, Federal Reserve Board policy, economic trends, political developments, domestic and international events and other factors. There can be no guarantee that any forward-looking implications discussed and/or referenced in this report will have any impact, positive or negative, upon the earnings, value and/or operations of the Company. Results of Operations JAHI's assets under management were $58.0 million as of September 30, 2000, compared to $53.0 million under management on June 30, 2000. The net $5.0 million change in assets under management during the quarter resulted from investment gains of $2.7 million and positive net client cash inflow of $2.3 million. THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1999 The Company had a net income for the three months ended September 30, 2000, of $199,881 or $0.01 per common share compared to a net income of $149,499 or $0.01 per common share for the same period in 1999. Basic and diluted earnings per common share for the three months ended September 30, 2000 and 1999 includes dividends in arrears on the Company's outstanding preferred stock of $60,000 for each period. The increase in net income for this period compared to the same period last year stems primarily from higher revenues from performance fee based managed accounts during this period. The Company had operating income of $237,673 for the three months ended September 30, 2000 compared to an operating income of $85,776 for the same period in 1999. This increase is primarily due to total revenue being significantly higher during this period when compared to the same quarter last year. 10 For the three months ended September 30, 2000, revenues totaled $934,754 compared to revenues of $439,559 for the same period in 1999, an increase of approximately 113% due primarily to significantly increased revenues from investment advisory fees. Advisory fee revenue increased for the three months ended September 30, 2000, to $896,117 compared to $400,702 for the same period in 1999, an increase of approximately 123% due primarily to increased revenues from performance fee based managed accounts. Commission income decreased for the three months ended September 30, 2000, to $38,637 compared to $42,072 for the same period in 1999, a decrease of approximately 8% due primarily to fewer securities transactions resulting from the amount of securities being purchased and sold in client accounts. These securities transactions are incidental to management's investment advisory decisions based on technical and fundamental considerations of individual securities, market conditions and other factors. Selling, general, and administrative ("SG&A") expenses of $697,081 were incurred during the three month period ended September 30, 2000, compared to similar SG&A expenses of $353,783 for the same period in 1999. This increase of approximately 97% was due primarily to higher selling expenses during this period resulting from higher fees paid out to sales representatives. Total other income (expenses) was ($12,607) for the three months ended September 30, 2000, compared to $63,723 for the same period in 1999. This change was primarily due to unrealized equity losses in the third quarter of 2000. NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1999 The Company had net income for the nine months ended September 30, 2000, of $698,732 or $0.05 per common share compared to net income of $256,314 or $0.01 per common share for the same period in 1999. Basic and diluted earnings per common share for the nine months ended September 30, 2000 and September 30, 1999 includes dividends in arrears of $180,000 for each period. Total dividends in arrears on the Company's outstanding preferred stock as of September 30, 2000 were $540,000 including dividends in arrears of $360,000 as of December 31, 1999. There are currently no projected dividend payments for 2000. The net income for this period compared to the net income for the same period last year stems primarily from substantially higher revenues from performance fee based managed accounts. The Company had operating income of $922,164 for the nine months ended September 30, 2000 compared to an operating income of $72,154 for the same period in 1999. This increase is primarily due to total revenue being significantly higher during this period when compared to the same period last year. For the nine months ended September 30, 2000, revenues totaled $2,699,772 compared to revenues of $1,121,757 for the same period in 1999, an increase of approximately 140%. The increase in revenue can be primarily attributed to an increase in advisory fees. 11 Revenues from advisory fees for the nine months ended September 30, 2000 totaled $2,525,212 compared to revenues from the same source of $904,077 for the same period in 1999, an increase of approximately 179% due primarily to increased revenues from performance fee based managed accounts. Revenues from commissions decreased approximately 17% for the nine months ended September 30, 2000 compared to the same period in 1999 primarily due to less trading activity. SG&A expenses totaled $1,777,608 during the nine months ended September 30, 2000 compared to $1,049,603 in selling, general and administrative expenses for the same period in 1999. The net $728,005 increase in SG&A expenses resulted primarily from higher fees paid out to sales representatives during this period and bonus accruals tied to investment advisory fee revenue. Total other income (expenses) was ($184,279) for the nine months ended September 30, 2000 compared to $184,160 for the same period in 1999. This decrease was primarily due to unrealized equity losses of ($308,376) for the nine months ended September 30, 2000 compared to unrealized equity gains of $65,993 for the same period last year. Liquidity and Capital Resources At September 30, 2000, the Company had cash and cash equivalents of $870,655 versus $580,758 at December 31, 1999. This increase was due primarily to the net income for the nine months ended September 30, 2000. Accounts payable and accrued expenses were $385,273 at September 30, 2000, compared to $329,265 at December 31, 1999. The increase in accounts payable and accrued expenses is primarily due to higher accruals for actual expenses incurred on fees paid out to sales representatives, provisions for income tax and bonus accruals for the nine months ended September 30, 2000 compared to those fees accrued for the year ended December 31, 1999. Accruals are based upon expenses incurred and/or as determined by management's best estimate based upon the Company's annual budget. Cash flows provided by operating activities for the nine months ended September 30, 2000, were $459,972 compared to $230,435 for the same period in 1999 due primarily to changes in net income for the nine months ended September 30, 2000. Cash flows provided by (used in) investing activities for the nine months ended September 30, 2000, were ($170,075) compared to ($69,376) for the same period in 1999 due primarily to the investment made in Senior Yellow Pages, Inc. in the first quarter of 2000. Risk Factors, Trends & Uncertainties Total assets under management and corporate earnings may substantially increase or decrease due to (1) stock market conditions, including the onset of a long-term declining, or bear market; (2) performance returns as influenced by the Company's investment advisory decisions, operational expense and effectiveness of marketing efforts; (3) competition from mutual funds, other investment 12 advisory companies and insurance companies; (4) interest rate changes and other actions taken by the Federal Reserve Board; (5) domestic and international economic and political conditions, high inflation and/or recession; (6) trends in business and finance; (7) international events; (8) acts of terrorism; and (9) other factors. The Company is registered with and subject to regulation by the SEC under the Investment Advisers Act of 1940 and, where applicable, under state advisory laws. The Company is also subject to regulation by the SEC under the Investment Company Act of 1940. The Company's affiliate broker-dealer is registered as a broker-dealer with the SEC under the Securities Exchange Act of 1934 (the "Exchange Act") and, where applicable, under state securities laws, and is regulated by the SEC, state securities administrators and the NASD. IASI is registered as a transfer agent under the Exchange Act and is regulated by the SEC. The privately held affiliate that manages the Fund is regulated by the Commodity Futures Trading Commission and the National Futures Association. By law, investment advisors and broker-dealers are fiduciaries and are required to serve their clients' interests with undivided loyalty. There is a potential conflict of interest because of the affiliation between the Company and IFNI. While the Company believes that its existing relationships are in compliance with applicable law and regulations, because of this potential conflict of interest, the SEC may closely examine these relationships. Many aspects of the financial services industry involve substantial liability risks, including exposure under federal and state securities laws in connection with the distribution of securities and investment advisor activities. Although the Company currently maintains errors and omission insurance policies insuring against this risk, such insurance does not necessarily protect the Company against loss in all events. There can be no assurance that any changes to existing laws, regulations or rulings promulgated by government entities having jurisdiction over the Company's investment advisory, broker-dealer, investment company and commodities trading business will not have an adverse effect upon the business of the Company. In connection with a late 1997 examination of the Company, the SEC raised certain issues regarding possible violations of the federal securities laws in connection with the private placement of debentures of Boston Restaurant Associates, Inc. The matter has not been resolved and to the Company's knowledge the investigation is ongoing. Management of the Company does not expect the resolution of this matter to have any material effect on the Company's financial condition, results of operations or business. 13 SIGNATURES In accordance with 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. JORDAN AMERICAN HOLDINGS, INC. Dated: November 14, 2000 By: /s/ Wallace Neal Jordan ------------------------- Wallace Neal Jordan Chief Executive Officer Dated: November 14, 2000 By: /s/ A.J. Elko ------------- A.J. Elko Chief Financial Officer EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 870,655 1,216,268 590,880 27,870 0 2,874,795 241,308 158,811 3,607,292 470,151 0 0 30,000 10,421 3,096,720 3,607,292 0 2,699,772 0 1,777,608 184,279 0 2,927 737,885 39,153 698,732 0 0 0 698,732 0.05 0.05
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