SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
For the fiscal quarter ended January 31, 2010
For the transition period from to
Commission file number 000-06649
JILCO INDUSTRIES, INC.
(Exact name of Small Business Issuer as specified in its charter)
(Registrants telephone number, including area code)
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 ¨ 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No
APPLICABLE ONLY TO CORPORATE ISSUERS
On January 31, 2010 there were 4,422,988 shares outstanding of the issuers common stock.
Transitional Small Business Disclosure Format (check one): Yes ¨ No x
INDEX TO FORM 10-Q
STATEMENTS OF LOSSES
See Notes to Financial Statements
JILCO INDUSTRIES, INC.
See Notes to Financial Statements
NOTE 1 - Description of the Business and Summary of Significant Accounting Policies
Description of the Business
Jilco Industries, Inc. (the Company) has been inactive since April 2, 1968 when it was discharged from bankruptcy under its previous name of Sportways, Inc. It has not engaged in any revenue generating activities since that time nor since the last filing of its Form 10-KSB on October 31, 2008 for the fiscal year ended July 31, 2008. The expenses the Company has incurred since that time represent those necessary to keep the Company in good standing with the United States Securities and Exchange Commission and in its state of residence.
Significant Accounting Policies
Fair Value of Financial Instruments
For certain of the Companys financial instruments including cash and other accrued expenses, the carrying amounts approximate fair value due to their short maturities. The amounts shown as notes payable also approximate fair value because current interest rates and terms offered to the Company for notes payable of similar maturities are substantially the same.
Cash and Cash Equivalents
For purpose of reporting cash flows, the Company includes cash on deposit, cash on hand, and financial instruments purchased with an original maturity of three months or less to be cash equivalents.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Accordingly, actual results could differ from those estimates.
The Company utilizes SFAS No. 109, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.
Basis of Presentation
The financial statements of the Company have been prepared on the basis on the Company continuing as a going concern, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due.
The Company has suffered recurring losses and has a deficiency in net assets that raise substantial doubt about its ability to continue as a going concern. The Companys continued existence is dependent upon its ability to raise additional capital. However, Affiliates of the Company have, for a number of years, and will continue during the next twelve months, to lend the Company all funds necessary for it to maintain its corporate and filing status.
The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), which prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Additionally, FIN 48 provides guidance on derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. FIN 48 will be effective for the Company beginning November 1, 2007. The Company is in the process of determining the effect, if any, this statement will have on its financial statements.
In March 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 156, Accounting for Servicing of Financial Assets An Amendment of FASB Statement No. 140 (SFAS 156), which requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract under certain situations at fair value, if practicable, and permits the subsequent measurement of servicing assets and servicing liabilities at fair value. SFAS 156 will be effective for the Company beginning August 1, 2007. The Company does not expect the adoption of this statement to have a material impact on its financial statements.
These and other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants (AICPA), and the SEC did not or are not believed by management to have a material impact on the Companys present or future financial statements.
NOTE 2 - LOSS PER SHARE
The Company calculates basic loss per share using the weighted-average number of shares outstanding for the period. Diluted loss per share includes both the weighted-average number of shares and any common share equivalents such as options or warrants in the calculation. As the Company had no common share equivalents outstanding during any periods presented, basic and diluted loss per share are the same.
NOTE 3 - NOTE PAYABLE SHAREHOLDER
Note Payable Shareholder at January 31, 2010 consisted of the following, all of which is in compliance with its terms:
11% Note - Revolving unsecured note payable, interest accrues at 11% per annum. Principal and accrued interest is due on demand.
SCHEDULE OF NOTE PAYABLE TO SHAREHOLDER
AS OF JANUARY 31, 2010
NOTE 4 - INCOME TAXES
For the years ended July 31, 2000 - 2009, the Company did not provide a provision for income taxes due to the net losses incurred. At July 31 in each of those years the Company had approximately net operating loss carryforwards for federal and state income tax purposes as shown in the table below, that began to expire in 2000. The components of the Companys deferred tax assets and liabilities for income taxes consisted of a deferred tax asset relating to the net operating loss carryforwards for such years as shown in the table below. The other components of the Companys deferred tax assets and liabilities are immaterial. The Company has established a valuation allowance as shown in the table below for the years ended July 31, 2000 - 2009, to fully offset its deferred tax assets as the Company does not believe the recoverability of these deferred tax assets is more likely than not. The valuation allowance increased as shown in the table below during the years ended July 31, 2000 - 2009.
Annual Net Tax Losses Sustained and Applied and Deferred Recoverable Assets
NOTE 5 CONTROLS AND PROCEDURES
As indicated in the certifications in Exhibits 31.1 and 32.1 of this Annual Report, the Companys Chief Executive Officer and Principal Financial Officer have evaluated the Companys disclosure controls and procedures as of October 31, 2008. Based on that evaluation, these officers have concluded that the Companys disclosure controls and procedures are effective in ensuring that material information required to be in this quarterly report is made known to them on a timely basis. There were no changes since the Companys last filed reports that materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
Our affiliates have for a number of years, and intend continue during the foreseeable future, to lend us all funds necessary for us to maintain our corporate and filing status. The Statements of Cash Flows appearing in the financial statements of this Quarterly Report show funds lent to us during the fiscal quarters ending January 31, 2010 and January 31, 2009.
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
This Form 10-Q may contain statements that are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as estimates, anticipates, plans, believes, projects, expects, intends, predicts, potential, future, may, contemplates, will, should, could, would or the negative of such terms or other comparable terminology. These statements relate to our future operations and financial performance or other future events. Many of the forward-looking statements are based on current expectations, management beliefs, certain assumptions made by our management and estimates and projections.
Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict with respect to timing, extent, likelihood and degree of occurrence. Therefore, actual events, results, performance or achievements may differ materially from the events, results, performance or achievements expressed, forecasted or contemplated by any such forward-looking statements.
We maintain controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed as the end of the period covered by this report, our chief executive officer and the principal financial officer concluded that our disclosure controls and procedures were adequate. There were no changes in our internal control over financial reporting identified in connection with the evaluation that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
During the fiscal quarter ended October 31, 2006 we converted a total of $132,166 of Principal and $132,060 of accrued interest, both of which represented outstanding balances as of June 30, 2005 on Notes Payable, into Common Stock at the rate of $0.75 per share, representing an issuance of 3,523,007 new shares of our Common Stock. These shares were not registered under the Securities Act of 1933.
The Company did not sell any equity securities during the fiscal quarter ended January 31, 2008 that were not registered under the Securities Act of 1933.
We did not receive any offering proceeds within the meaning of Rule 463 under the Securities Act of 1933 during the period covered by this report.
No matter was submitted during the fiscal quarter ended January 31, 2010 to a vote of our security holders through the solicitation of proxies or otherwise.
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.