Yet another Possino/General Commerce Bank AG Boiler Room stock ready to bite the dust
JUNUM INCORPORATED
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, 2002
[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to----------------- ----------------Commission File Number: 021566--------------------
JUNUM INCORPORATED
Sales $1,108,619
Selling, General & Admin Expenses $1,151,231
Basic and diluted net (loss) per weighted average share$(0.02)
Currently, the Company has a limited amount of cash and liquid assets. While there have been improvements in operating results, the Company was not cash flow positive in the second quarter of 2002. Unless there is continued growth in profitable revenues, the Company will not be able to meet its short-term cash needs. In addition to covering its ongoing operating costs, the Company will need additional cash to satisfy its existing debt obligations and to underwrite the complete implementation of its business plan. It is likely that the Company will be required to seek outside funding in order to accomplish its objectives. Junum's ability to raise needed funds thorough public or private equity or debt financing, or other sources, is uncertain.
As mentioned previously, the introduction of these new products has been delayed due to lack of resources and the necessary revamping of the business model.
On August 14, 2002, the Company received a letter which threatened civil litigation against the Company and its directors and officers based upon alleged violations of federal and state securities laws and breaches of fiduciary duties. The allegations relate to the conversion of preferred stock into the common stock of the Company, disclosures of stock options, executive bonuses, and related issues. The Company is unable to fully evaluate or qualify the effects that such litigation may have upon the Company, but it may materially and adversely affect the Company.
The Company is currently involved in several other adversarial proceedings. Much of this litigation relates to unpaid liabilities. Individually or in combination, several of these claims could have a material impact on the Company's assets, operations, or financial condition. The Company has booked reserves in its financial statements deemed by management to be adequate to cover anticipated judgments, legal fees, and other costs associated with ongoing and potential litigation.
The Company is currently in default on various convertible debentures and other promissory notes representing an unsecured liability of $300,000 plus accrued interest. The Company is in danger of defaulting on an additional $810,000 in secured long-term debt due to the breach of a debt covenant. The Company intends to actively negotiate with the holders of these debt securities in an effort to remedy the defaults.
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