-----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, C+jfXJetnUbWQ621pgBzo4J1ZJ/AB5T+nleAF+oswZ+Yu6OePUr4dDokefwDfMD4 zvzhaqis6ikHbPuPfYXnBA== 0001012709-99-000820.txt : 19991115 0001012709-99-000820.hdr.sgml : 19991115 ACCESSION NUMBER: 0001012709-99-000820 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JORDAN AMERICAN HOLDINGS INC CENTRAL INDEX KEY: 0000855663 STANDARD INDUSTRIAL CLASSIFICATION: INVESTMENT ADVICE [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: 99746954 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 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, 1999 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) 1875 Ski Time Square, Suite One, Steamboat Springs, CO 80487 ------------------------------------------------------------ (Address of principal executive offices) (970) 879-1189 -------------- 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, 1999, 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 PAGE ---- ITEM 1 FINANCIAL INFORMATION Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6-7 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS Operational Notes 8 Risk Factors, Trends & Uncertainties 9 Results of Operations 10-11 Liquidity and Capital Resources 12 PART 1., ITEM 1. FINANCIAL INFORMATION JORDAN AMERICAN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) SEPTEMBER 30, DECEMBER 31, ASSETS 1999 1998 ----------- ----------- CURRENT ASSETS Cash & Cash Equivalents $ 656,681 $ 495,622 Marketable Securities 78,078 163,010 Investment Advisory Fee Receivable - Net 197,222 45,985 Accounts Receivable 87,255 135,253 Notes Receivable - Officer 26,049 15,000 Prepaid Expenses 32,301 4,380 Other Receivable 15,000 25,205 ----------- ----------- Total Current Assets 1,092,586 884,455 ----------- ----------- FIXED ASSETS Property and Equipment, at cost, net of accumulated depreciation and amortization of $103,760 and $86,163 respectively 117,473 64,853 ----------- ----------- OTHER ASSETS Boston Restaurant Debentures 500,000 500,000 Strategic Options Limited Partnership 31,787 45,736 Corporate Stocks - Restricted 56,250 -- ----------- ----------- Total Other Assets 588,037 545,736 ----------- ----------- TOTAL ASSETS $ 1,798,096 $ 1,495,044 =========== =========== LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 25,319 $ 65,132 Accrued Expenses 128,342 98,612 Deferred Revenue 36,722 29,703 Software License Payable 65,743 15,940 ----------- ----------- Total Current Liabilities 256,126 209,387 ----------- ----------- STOCKHOLDERS' EQUITY 8% cumulative, convertible, non-voting preferred stock $0.01 par valve; 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, 1999 and December 31, 1998 10,421 10,421 Additional Paid in Capital 4,502,863 4,502,853 Deficit (3,001,314) (3,257,617) ----------- ----------- Total Stockholders' Equity 1,541,970 1,285,657 ----------- ----------- TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,798,096 $ 1,495,044 =========== ===========
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, ----------------------------- ----------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Revenues Commission Income $ 42,072 $ 51,940 $ 218,563 $ 289,496 Investment Advisory Fees 400,702 106,798 904,077 492,073 ------------ ------------ ------------ ------------ Total Revenues 442,774 158,738 1,122,640 781,569 Selling, General and Administrative Expenses 353,783 374,094 1,049,603 1,369,018 ------------ ------------ ------------ ------------ Operating Income (Loss) 88,991 (215,356) 73,037 (587,449) ------------ ------------ ------------ ------------ Other Income (Expenses): Interest and Dividend Income 21,252 29,204 72,119 90,056 Other Income 11,233 1,378 46,048 10,693 Realized Equity Gain (Loss) from investing and trading (3,215) (38,199) (883) (104,599) Unrealized Equity Gain (Loss) from investing and trading 31,238 (57,367) 65,993 44,629 Gain on disposal of building -- -- -- 55,256 ------------ ------------ ------------ ------------ Total Other Income (Expense), Net 60,508 (64,984) 183,277 96,035 ------------ ------------ ------------ ------------ Net Income (Loss) 149,499 (280,340) 256,314 (491,414) ------------ ------------ ------------ ------------ Dividends on preferred stock 60,000 60,000 180,000 180,000 ------------ ------------ ------------ ------------ Net Income (Loss) attributable to Common Stock $ 89,499 $ (340,340) $ 76,314 $ (671,414) ============ ============ ============ ============ Basic earnings attributable to common stock per common share $ 0.01 $ (0.03) $ 0.01 $ (0.06) ============ ============ ============ ============ Diluted earnings attributable to common stock per common share $ 0.01 $ (0.03) $ 0.01 $ (0.06) ============ ============ ============ ============ 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 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (UNAUDITED)
FOR NINE MONTHS ENDED SEPTEMBER 30, 1999 1998 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ 256,314 $ (491,414) Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation 17,598 18,788 Unrealized (gain) from investing and trading (65,993) (44,629) Realized (gain) loss from investing and trading (883) 104,599 Gain on sale of property -- (55,256) Changes in operating assets and liabilities: Trading marketable securities -- 488,636 Investment advisory fee receivable (151,237) 57,953 Prepaid expenses (27,921) 15,773 Notes receivable - shareholders (11,049) -- Other receivable 58,202 6,304 Accounts payable and other accrued expenses (10,083) (10,470) Deferred investment advisory fees 7,019 (93,736) Software license payable 49,803 -- ---------- ---------- Net Cash Provided By Operating Activities 123,536 (3,452) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Investment in Corporate stock - restricted (56,250) -- Investment in Partnership -- (50,000) Principal received on Notes Receivable -- 435,000 Sale of IMPACT Management Growth Portfolio 57,092 -- Sale of Property -- 195,483 Sale of Marketable Securities 106,899 -- Capital expenditures (70,218) (19,590) ---------- ---------- Net Cash Provided by (Used In) Investing Activities 37,523 560,893 ---------- ---------- CASH FLOWS USED IN FINANCING ACTIVITIES Dividends on preferred stock -- (120,000) ---------- ---------- Net Increase (Decrease) in Cash and Cash Equivalents 161,059 437,441 Cash and Cash Equivalents, beginning of period 495,622 51,286 ---------- ---------- Cash and Cash Equivalents, end of period $ 656,681 $ 488,727 ========== ========== Supplemental Disclosure: Interest paid $ 4,597 $ 9,053 ========== ==========
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - ------------------------------------------------------ In the opinion of management, the interim financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of Jordan American Holdings, Inc. ("Company" or "JAHI") and its subsidiaries as of September 30, 1999, and the results of its interim operations for the three months and nine months ended September 30, 1999 and 1998, and cash flows for the nine months ended September 30, 1999, and 1998, in accordance with generally accepted accounting principles. The results for interim periods are not necessarily indicative of results for a full year. (Please see "Management's Discussion and Analysis" below.) Investment adviosry fees, based on a percentage of assets for which refunds may be due to clients, are billed in advance and are deferred and amortized into income over the period in which services are performed. Investment advisory fees based on a percentage of the annual increase (performance, or incentive, fees) in the market value of a client's portfolio, including interest and dividends, are fully recognized when billed after the period of management, which is usually twelve months after account inception and annually thereafter. JAHI also serves as an investment advisor to the Impact Total Return Portfolio f/k/a the Impact Management Growth Portfolio ("Portfolio"), an open-end investment company registered with the Securities and Exchange Commission. Fees for management of the portfolio are earned daily and paid to JAHI on a monthly basis. Fee compensation, which is due sales representatives, is accrued monthly and is paid to sales representatives monthly. Effective May 1, 1999 the Company entered into a sub-advisory agreement with Schneider Capital Management for the Portfolio. Pursuant to the sub-advisory agreement, the Company pays Schneider monthly at the rate of 60 basis points (0.60%) annually, from its 125 basis points (1.25%) annual management fee which is calculated on the average daily net assets of the Portfolio. Asset management contracts are generally terminable upon written notice from the client(s) or the Company, and the unearned percentage of asset management fees billed in advance are refundable on a pro-rata basis. For additional information regarding the Company's advisory business operations and policies, a copy of disclosure document Form ADV, Part II is available without charge upon written request to the Company. The Company develops prospective investment advisory clients and investors through strategic marketing partnerships, seminars, money shows, occasional television and radio appearances, direct contact, its web site (www.jahi.com or www.equityassets.com), sales representatives, referrals from clients, securities broker-dealers and other sources. Prospective advisory clients receive Form ADV, Part II, as the Company's disclosure document and provide information about themselves, their investment experience, and their net worth through various new account forms and other methods. Approximately 90% of JAHI's clients execute brokerage transactions through IMPACT Financial Network, Inc. ("IFNI"), a wholly-owned broker-dealer subsidiary of JAHI and a member of the National Association of Securities Dealers, Inc. ("NASD") and the Securities Investor Protection Corporation ("SIPC"). IFNI is compensated for securities transactions on behalf of the Company's managed accounts by receipt of commissions. IFNI does not hold funds or securities for clients and does not have custody of accounts for clients of the Company. IFNI currently executes securities transactions through Pershing & Co., a division of Donaldson, Lufkin, & Jenrette, a securities 6 corporation. Pershing, a member of the SIPC, acts as clearing house and custodian for accounts and processes all confirmations and monthly statements for JAHI advisory clients who choose to maintain their accounts with IFNI. Commission income is recognized on a settlement date basis, which does not differ materially from the trade date basis of accounting. Effective May 1, 1999, the Company's other wholly owned subsidiary, IMPACT Administrative Services, Inc. ("IASI"), an investment company services entity, receives 35 basis points annually, (0.35%) as an administrative fee, replacing the $165 per account annual administrative fee previously charged to the shareholders of the Portfolio. To date, IASI provides its services to the Portfolio only. Marketable securities consist primarily of corporate stocks and other securities held in Company investment accounts. Realized and unrealized gains or losses result from the trading of securities in Company investment accounts. Basic and diluted earnings per share and share equivalents are based upon the weighted average number of share and/or share equivalents outstanding during the period. The calculations ignore common stock equivalent shares when their inclusion in such calculations would have been anti-dilutive. In the third quarter of 1994, Wallace Neal Jordan established Jordan Assets, Ltd. For providing administrative services, the Company receives 100% of the net income resulting from the collection of incentive and/or management fees, if any, collected by Jordan Assets, Ltd., a privately held affiliate which manages the Jordan Index Fund, L.P. (the "Index"), a limited partnership with assets of approximately $3.0 million at September 30, 1999. The Index invests in stock index futures contracts and other securities and receives as its fee 20% of the Index's trading profits, if any. Fees for this Index are accounted for as deferred revenue until the annual billing date of the Index, which is July 31 of each year. Fees to JAHI from the Index were approximately $90,000 in 1995 as compared to no revenues since that time. There is no assurance that the Index will continue to exist as a potential revenue source for the Company. 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 which are included in the Company's 1998 Form 10-KSB which is contained in the Company's 1998 Annual Report to shareholders and is available without charge upon request to JAHI Investor Relations, 1875 Ski Time Square, Suite One, Steamboat Springs, Colorado, 80487, (970) 879-1189; Fax: (970) 879-1272; E-mail: info@jahi.com 7 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. Operational Notes Asset gathering is primarily being pursued through selling agreements with other broker-dealers and various strategic marketing partnerships, as well as seminars, national investment shows, advertising, marketing materials, joint ventures with other financial services professionals and other means. The Company managed approximately $42 million in individually held fee-paying equity portfolios at September 30, 1999. The Company serves as investment advisor to the Impact Total Return Portfolio f/k/a the Impact Management Growth Portfolio ("Portfolio"), an open-end investment company formed under Impact Management Investment Trust. Effective May 1, 1999, the Company entered into a sub-advisory agreement with Schneider Capital Management for the Portfolio. Management of the Company expects that this sub-advisory agreement may enhance the prospects for increased sales of Portfolio shares. At September 30, 1999, the Portfolio had assets of approximately $6.3 million from which JAHI receives management fees. At September 30, 1999, the Company and a privately held affiliate provided investment advice to approximately $51 million in fee-paying assets in individually managed equity portfolios, the Portfolio and the Jordan Index Fund, L.P. Investment advisory fees based on a percentage of assets, for which refunds may be due to clients, are billed in advance and are deferred and amortized into income over the period in which services are performed. Exceptional performance in percentage of profit (incentive) accounts may result in substantial revenues for the Company while poor performance in the same accounts may yield no fees for the Company from approximately 70% of the Company's total assets under management. Additionally, because percentage of profit accounts are billed on an annual basis in arrears for each respective client, there may be a delay in billing revenue as long as eleven months from the time when actual account performance was achieved. Thus, exceptional performance in percentage of profit accounts may benefit the revenues of the Company for nearly one year after such performance was achieved as dependent on the billing cycle of respective clients and other investment results in the respective accounts. 8 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 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 securities and commodities industries are subject to various risks and intense regulation from the SEC, the NASD, the National Futures Association, and the Commodity Futures Trading Commission. Investment advisors, broker-dealers, commodity pool operators, and commodity trading advisors are highly regulated by both federal and state authorities and by other self-regulatory organizations. Such regulations may restrict both the types of investments and amount of investments that JAHI may employ for its clients and itself. 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-related and commodities trading business will not have an adverse effect upon the business of the Company, or that, despite its best efforts, the Company currently operates in full compliance with all applicable law and regulations or will be able to remain in compliance with all applicable law and regulations. If the Company fails to maintain compliance with all applicable regulations, JAHI and/or its subsidiaries may be subject to various and significant fines, censures and other considerations and penalties. By law, investment advisors, broker-dealers, and investment companies are fiduciaries and are required to serve their clients' interests with undivided loyalty. The affiliation between the Company and IFNI may continue to be scrutinized by the regulatory authorities because of the potential conflict of interest created by related-party transactions and may be subject to various regulations which may affect the fees and charges of IFNI. Additionally, as the brokerage industry continues to become more competitive, fees for such services may decline which result in a similar reduction in revenues from trading transactions. Findings contrary to industry regulations by one or more regulatory entities may subject the Company to censures, fines and/or other liabilities, or cause the Company to change its method of doing business. The SEC requires that business be conducted in the best interests of the clients and that such arrangements be disclosed to them. While the Company believes that its existing policies, procedures and proposed relationships are in compliance with applicable laws and regulations, findings to the contrary may have a material adverse effect upon the Company. Many aspects of the financial services industry involve substantial liability risks, including but not limited to exposure under federal and state securities laws in connection with the distribution of securities, brokerage transactions, suitability and investment advisor activities. Although the Company currently maintains errors and omission insurance and other insurance to protect against these types of liabilities, there can be no guarantee that this coverage will necessarily protect the Company and its shareholders from potential claims. 9 The Company operates in a highly competitive industry with competition from other investment advisors, commodity trading advisors, broker-dealers, and mutual fund managers in addition to investment alternatives offered by insurance companies, banks, securities dealers and other financial institutions. Many of these institutions are able to engage in more extensive advertising and may offer accounts insured by federal corporations such as the Federal Deposit Insurance Corporation. JAHI believes its investment strategy, which centers around attempting to understand the general trend of the market as assisted by certain proprietary analyses, coupled with its long-term track record, make it an attractive alternative to traditional mutual funds and other money managers. Long-term trends in retention of client assets since fiscal year-end 1995 show that the Company has had a net loss in assets under management, i.e., more assets in client accounts have departed from the Company's management than were brought in as new managed assets. This declining trend in total assets under management may continue to have a direct negative impact upon the Company's investment advisory revenues and related brokerage commissions. It is likely that future net income/loss of the Company will be substantially impacted by the amount of assets under management, investment management decisions and general stock market conditions, among other factors listed in this report. The SEC conducted an examination of the Company in November 1997. As a result of this examination, certain issues arose regarding possible violation of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisors Act of 1940 relating to the contingent "best efforts" private placement debenture offering for Boston Restaurants Associates, Inc. The SEC has initiated discussions with the Company's legal counsel with regard to these issues and may be considering formal action against the Company. Legal counsel to the Company filed a "Wells Submission" with the SEC on June 1, 1998. Management and legal counsel of the Company cannot, at this time, predict with any certainty the outcome of the SEC's examination or whether the resolution will have a material effect on JAHI's operations or financial statements. Results of Operations The Company had a net income for the three months ended September 30, 1999, of $149,499 compared to a net loss of ($280,340) for the same period in 1998. This net income for this period compared to a net loss for the same period last year stems from higher revenues from performance fee based managed accounts, increased fees from the Portfolio, and a decrease in operational expenses. The Company had a net income attributable to common stock for the three months ended September 30, 1999 of $89,499 or $0.01 per common share compared to a net loss attributable to common stock of ($340,340) or ($0.03) per common share for the same period in 1998. The Company had a net income for the nine months ended September 30, 1999, of $256,314 compared to a net loss of ($491,414) for the same period in 1998. This net income for this period compared to a net loss for the same period last year stems from higher revenues from performance fee based managed accounts, increased fees from the Portfolio, and a decrease in operational expenses. The Company had net income attributable to common stock for the nine months ended September 30, 1999 of $76,314 or $0.01 per common share compared to a net loss attributable to common stock of ($671,414) or ($0.06) per common share for the same period in 1998. 10 Total dividends in arrears as of September 30, 1999 and September 30, 1998 were $300,000 and $60,000 respectively. There are currently no projected annual payments for 1999. For the three months ended September 30, 1999, revenues totaled $442,774 compared to revenues of $158,738 for the same period in 1998, an increase of approximately 179% due primarily to significantly increased revenues from investment advisory fee income. Commission income decreased for the three months ended September 30, 1999, to $42,072 compared to $51,940 for the same period in 1998, a decrease of approximately 19% due primarily to fewer securities transactions resulting from the amount of securities being purchased and sold in client accounts as incidental to management's investment advisory decisions based on technical and fundamental considerations of individual securities, market conditions and other factors. Advisory fees income increased for the three months ended September 30, 1999 to $400,702 compared to $106,798 for the same period in 1998, an increase of approximately 275% due primarily to increased revenues from performance fee based managed accounts. Total other income was $60,508 for the three months ended September 30, 1999, compared to total other expense of ($64,984) for the same period in 1998. This increase was primarily due to unrealized gains from investing and trading for the three months ended September 30, 1999 compared to unrealized losses from trading and investing for the same period in 1998. Selling, General, and Administrative ("SG&A") expenses of $353,783 were incurred during the three month period ended September 30, 1999, compared to similar SG&A expenses of $374,094 for the same period in 1998, a decrease of approximately 5% due primarily to reductions in operating expenses. For the nine months ended September 30, 1999, revenues totaled $1,122,640 compared to revenues of $781,569 for the same period in 1998, an increase of approximately 44%. The increase in revenue can be primarily attributed to an increase in advisory fees. Revenues from advisory fees for the nine months ended September 30, 1999 totaled $904,077 compared to revenues from the same source of $492,073 for the same period in 1998, an increase of approximately 84% due primarily to increased revenues from performance fee based managed accounts. Revenues from commissions decreased approximately 25% for the nine months ended September 30, 1999 compared to the same period in 1998 primarily due to less trading activity. 11 Total other income was $183,277 for the nine months ended September 30, 1999 compared to $96,035 for the same period in 1998. This increase was primarily due to substantially lower realized equity losses from investing and trading for the nine months ended September 30, 1999 compared to the same period in 1998. Selling, general and administrative expenses totaled $1,049,603 during the nine months ended September 30, 1999 compared to $1,369,018 in selling, general and administrative expenses for the same period in 1998, a decrease of approximately 23%, due primarily to aggressive reductions in selling, marketing and operating expenses. Liquidity and Capital Resources At September 30, 1999, the Company had cash and cash equivalents of $656,681, versus $495,622 at December 31, 1998. This increase was due primarily to the net income for the nine months ended September 30, 1999. Accounts payable and accrued expenses were $25,319 and $128,342 respectively at September 30, 1999, compared to $65,132 and $98,612 respectively at December 31, 1998. The reduction in accounts payable is due to reduced expenses, both actual and budgeted, which affected accruals along with payment of outstanding payables. Accruals are based upon expenses incurred and/or as determined by management's best estimate based upon the Company's annual budget. The increase in accrued expenses is primarily due to increased fees payable to investment advisory representatives as a result of increased performance fee income. Cash flows provided by (used in) operating activities for the nine months ended September 30, 1999, were $123,536 compared to ($3,452) for the same period in 1998 due primarily to changes in net income for the nine months ended September 30, 1999. Cash flows provided by (used in) investing activities for the nine months ended September 30, 1999, were $37,523 compared to $560,893 for the same period in 1998 due primarily to the sale of property for the nine months ended September 30, 1998. The Company acquired 45,000 shares of restricted stock through a private placement from The Internet Advisory Corporation at $1.25 per share. This investment is restricted and may not be sold until March, 2000. The market value of The Internet Advisory Corporation's free trading common stock was $3.50 per share at September 30, 1999. The Company entered into a lease purchase agreement that enlarged its software system to include the NSCC Fund/Serv and the NSCC Networking Systems that may increase its ability to distribute the shares of the Portfolio. This portion of the agreement can be terminated upon 90 days written notice to the software provider, thus limiting the Company's financial obligation to no more than 90 days forward. Management of the Company believes short-term cash needs will continue to be met through management fees, brokerage revenues, cash reserves and/or liquidation of marketable securities. 12 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 12, 1999 By: /s/ Wallace Neal Jordan ------------------------- Chief Executive Officer 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 656,681 78,078 240,124 42,902 0 1,092,586 221,233 103,760 1,798,096 256,126 0 0 30,000 10,421 1,501,549 1,798,096 0 1,122,640 0 0 0 0 4,597 256,314 0 256,314 0 0 0 256,314 0.01 0.01
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