UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

 

FORM 10-QSB

 

(Mark One)

**[x]           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934**
For the quarterly periodended **NOVEMBER 30, 2006**
                                           OR

**[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934**
For the transition periodfrom to 
 

Commission File Number: 333-61801

 
**JURAK CORPORATION WORLD WIDE, INC.
(Exact name of registrant as specified in its charter)
 

                                                                                           MINNESOTA                                                                                    88-0407679

                                                                                      (State or other jurisdiction of                                                                                                             (Federal Employer
                                                                                      incorporation or organization)                                                                                                             Identification No.)

 

                                                               1181 Grier Drive, Suite C, Las Vegas, NV                                                               89119-3746
**                                                                               (Address of principal executive offices)                                                                                                              (Zip Code)**(702) 914-9688
**Registrant's telephone number, including area code
 

Check whether the registrant (1) has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past 90days. YES [X]    NO [ ]

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act. YES [  ]    NO [X]

 

APPLICABLEONLY TO CORPORATE ISSUERS:

Indicate the number ofshares outstanding of each of the issuer's classes of common stock, as of thelatest practicable date.

 

                                                                                                          

Class                                                                                                 Outstanding at January 11, 2007
Common Stock, no par value                                                              100,632,578

 

JURAKCORPORATION WORLD WIDE, INC.

 

INDEX

 

                                                                                                                                                                                                   Page No.
Part I. Financial Information

        Item 1. Financial Statements

            CondensedBalance Sheets                                                                                                                                                    3

            CondensedStatements of Operations                                                                                                                                     4

            CondensedStatements of Cash Flows                                                                                                                                    5

            SelectedNotes to Condensed Financial Statements                                                                                                                6

       Item 2. Management's Discussion and Analysis of

           Financial Condition and Results of Operations                                                                                                                        8

        Item 3. Controls and Procedures                                                                                                                                             13

Part II. Other Information                                                                                                                                                                14

        Item 1.  Legal Proceedings                                                                                                                                                      14

        Item 2.  Unregistered Salesof Equity Securities and Use of Proceeds                                                                                       15

        Item 5.  Other Information                                                                                                                                                       15

        Item 6.  Exhibits                                                                                                                                                                       15

 

SIGNATURES                                                                                                                                                                                15

 

 

 

JURAK CORPORATION WORLD WIDE, INC.

 

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The condensed balance sheets as of November 30, 2006 and 2005 and the relatedcondensed statements of operations for the three and six months ended November30, 2006 and 2005 and the condensed statements of cash flows for the six-monthperiods then ended have been prepared by the Company without audit. In theopinion of management, all adjustments (which include normal recurringadjustments) necessary to present fairly the financial position, results ofoperations, and cash flows at November 30, 2006 and 2005 and for the six monthsthen ended have been made. 

Certain information and footnote disclosures normally included in financialstatements prepared in accordance with generally accepted accounting principlesin the United States of America have been condensed or omitted. It is suggestedthese condensed financial statements be read in conjunction with the financialstatements and notes thereto included in the Company's May 31, 2006 auditedfinancial statements and form 10-KSB. The results of operations for the periodended November 30, 2006 are not necessarily indicative of the operating resultsfor the entire year.

The presentation of financial statements in conformity with generallyaccepted accounting principles requires management to make estimates andassumptions that affect the reported amounts of assets, liabilities, anddisclosure of contingent assets and liabilities at the balance sheet date, andthe reported amounts of revenues and expenses during the reporting period. Theestimates and assumptions used in the accompanying condensed financialstatements are based upon management's evaluation of the relevant facts andcircumstances as of the time of the financial statements. Actual results coulddiffer from those estimates.

Reclassifications 

Certain prior year amounts reported on the Company's condensed balance sheethave been reclassified to conform to 2006 presentation. Such reclassificationshad no impact on total consolidated assets, net income or stockholders' equity.

NOTE 2 - INVENTORIES

Inventories summarized below are priced at the lower of first-in, first-outcost or market:
 November 30  May 31     2006      2006Finished goods $           65,612  $         71,653Raw materials 22,233  18,392Allowance for obsolensce     (31,891)      (31,891)     Total       $        55,954           $      58,154
NOTE 3 -ADVANCE TO OFFICER/STOCKHOLDER

During the first six months ended November 30, 2006, the Company made ashort-term, non-interest-bearing loan to an officer/stockholder in the amount of$42,435 of which $493 was advanced during the three months ended November 30,2006.

NOTE 4 - OTHER ASSET-LICENSE

During the first quarter ended August 31, 2006, the Company expended $15,054for licensing fees associated with a letter of intent to acquire the worldwideexclusive marketing rights to the world's most powerful, natural immune boosterdiscovered to date, as stated by the scientific research team that developed theproduct. These rights are being acquired from a leading life science companywith a successful history of producing unique, patented products that aredistributed on a global scale. On December 6, 2006, the Company finalized theclosing of this exclusive global license and distribution agreement with respectto this natural immune booster product. (See note 10). 

NOTE 5 -STOCKHOLDERS' DEFICIT

During the first quarter ended August 31, 2006 the Company sold 10,000,000shares of common stock at $0.02 per share for a total of $200,000. No shareswere sold in the second quarter of 2006. The accumulated deficit as of November30, 2006 was $5,159,294 and $4,635,264 as of May 31, 2006.

NOTE 6 - CONTINGENCIES

In the ordinary course of business, the Company is exposed to legal actionsand threatened claims and incurs costs to defend against such legal actions andclaims. Company management is not aware of any such outstanding, pending orthreatened action, claim or other circumstance that would materially affect theCompany's financial position or results of operations. 

NOTE 7 - INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assetsare recognized for deductible temporarydifferences andoperating loss and tax credit carryforwards and deferred tax liabilities arerecognized for taxable temporary differences. Temporary differences are thedifferences between the reported amounts of assets and liabilities and their taxbasis. Deferred tax assets are reduced by a valuation allowance when, in theopinion of management, it is more likely than not that some portion or all ofthe deferred tax assets will not be realized. Deferred tax assets andliabilities are adjusted for the effects of changes in tax laws and rates on thedate of the enactment. The Company has recorded a full valuation allowance forall deferred tax assets due to the significance of its continued operatinglosses.

NOTE 8 - RELATED PARTY TRANSACTIONS
**Intellectual Property License Agreement**
On approximately January 1, 1999, we entered into anintellectual property license agreement (the "License Agreement") with JurakHoldings Limited ("JHL"), a corporation organized under the laws of the Provinceof Alberta and an affiliate of our Chief Executive Officer and one of ourdirectors. Pursuant to the terms and provisions of the License Agreement, we arerequired to pay the greater of $500,000 for fiscal year 2003 and each calendaryear thereafter, during the first ten years of the License Agreement (the"Minimum Royalty Fee"), or eight percent of the net sales price of all licensedproducts sold under the License Agreement (the "Continuing Royalty Fee"). Afterfiscal 2013, we are required to make payments in the amount of the ContinuingRoyalty Fee.

For the six months ended November 30, 2006 and 2005, theminimum royalty fee for the amount of $250,000 was expensed. The accruedpayments due and owing to JHL under the License Agreement for the MinimumRoyalty Fee and the Continuing Royalty Fee was $451,105 and $250,000 at November30, 2006 and May 31, 2006, respectively.

NOTE 9 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board ("FASB")issued FASB Interpretation No. 48, "Accounting for Uncertainty in IncomeTaxes"-an Interpretation of FASB Statement No. 109". (FIN No. 48"), whichclarifies the accounting for uncertainty in income taxes by prescribing theminimum recognition threshold a tax position is required to meet before beingrecognized in the financial statements. Additionally, FIN 48 provides guidanceon derecognition, classification, interest, penalties, accounting in interimperiods and disclosure related to uncertain income tax positions. FIN No. 48 iseffective for fiscal years beginning after December 15, 2006. The Company iscurrently evaluating the impact of adopting FIN No. 48, but does not anticipatethat it will have a material effect on its financial position, results ofoperations or cash flows.

NOTE 10 -- SUBSEQUENT EVENTS

On December 6, 2006, the Company received $600,000 as part of a privateplacement sale of the Company's restricted common stock at a price per share of$1.50. As of January 17, 2007 the share certificates have not yet been issuedfor this subscription payment received.

On December 6, 2006, the Company finalized the closing on an exclusive globallicense and distribution agreement with respect to a natural immune boosterproduct. As part of the closing for this agreement, the Company paid $550,000per the terms of the agreement on December 11, 2006. The agreement calls foradditional payments totaling $1,950,000 to be paid as follows:

$500,000                    March 31,2007

$500,000                    June 30, 2007

$500,000                    September 30, 2007

$450,000                    November 30, 2007

 

Item 2. Management's Discussion and Analysis of Financial

Condition and Results of Operations

Overview

Jurak Corporation World Wide, Inc., a Minnesota corporation, currently tradeson the Over-the-Counter Bulletin Board under the symbol "JRAK". We are aproduct-focused company specializing in the herbal supplement industry andmarket. Our main product is the "Jurak Classic Whole Body Tonic", also known asJC Tonic, which is a herbal supplemental blend of thirty different ingredientscomprised primarily of medicinal herbs. The Jurak Classic Whole Body Tonic wasfirst developed in 1943 by Carl Jurak, the father of the founder of our company.The Jurak Classic Whole Body Tonic is marketed in a 32-ounce bottle and a20-ounce mono-dose packaged as 45 doses in a box; all which constituteapproximately 100% of the sales. 

We distribute our products through a network marketing system usingindependent distributors. Network marketing appeals to a wide cross-section ofpeople, particularly those seeking to supplement income, start a home-basedbusiness or pursue entrepreneurial opportunities other than conventionalfull-time employment. We consider our attractive compensation plan and cashbonus pools to be attractive components of our network marketing system. We alsobelieve that our network marketing system is ideally suited to market herbalsupplement products because sales of such products are strengthened by ongoingpersonal contact between our distributors and their customers. Distributors aregiven the opportunity through sponsored events and training sessions to networkwith other distributors, develop selling skills and establish personal goals. Wesupplement monetary incentives with other forms of recognition in order tofurther motivate and foster an atmosphere of excitement through our distributornetwork. 

We have obtained trademark protection for the name "JC Tonic" within theUnited States and within Canada. We also own the web sites www.jurak.com,www.jctonic.com and www.tonicman.com. 

 

The following discussion and analysis of our results ofoperations and financial position should be read in conjunction with our auditedfinancial statements and the notes thereto, included in our 10-KSB filed for theyear ended May 31, 2006. Our financial statements are prepared in accordancewith U.S. GAAP. 

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 

The following discussion is intended to provide an analysisof our financial condition and should be read in conjunction with our auditedfinancial statements and the notes thereto.  The matters discussed in thissection that are not historical or current facts deal with potential futurecircumstances and developments.  Such forward-looking statements include,but are not limited to, the development plans for our growth, trends in theresults of our development, anticipated development plans, operating expensesand our anticipated capital requirements and capital resources.  Our actualresults could differ materially from the results discussed in theforward-looking statements.

The accompanying financial statements have been prepared in            conformity with accounting 

principles generally accepted in the United States of America,            which contemplate continuation of the 

Company as a going concern. However, the Company has sustained            substantial losses and its liabilities 

exceed its assets. The Company intends to generate positive cash            flows from operations through 

increased sales utilizing the network of distributors in place            with existing and the new natural immune 

booster products, issuing additional stock, and obtaining            necessary capital through additional advances 

from the Company's principal stockholder or through private            placements.

To continue operations, the Company must raise additional            capital. As stated in Note 5, the Company

has sold additional stock in a private placement during the three            months ended August 31, 2006. 

This sale was a continuation of the private placement started in            May 2006. However, there can be no 

assurance the Company will be able to obtain additional capital            from private placements in the future.

On December 14, 2006 the Company also announced a best efforts privateplacement of 3,000,000 U.S. at $1.50 per share. The proceeds of the privateplacement are to be used for regular corporate needs as well as funding theproduct launch of our recently acquired rights to the world's most powerful,natural immune booster product.The Company also announcedthat the first $600,000 has been received on December 11, 2006.

With the formal completion of the exclusive global license and distributionagreement relative to the natural immune booster product, the Company willaccelerate work on the packaging and branding of this new product to make itwidely available to North American and European markets.
**Three months Ended November 30, 2006 Compared to Three monthsEnded November 30, 2005**
Total sales for the three months ended November 30, 2006 was$301,095 compared to $356,494 in the same period in 2005. Gross profit wasreduced to $215,591 for the three months ended November 30, 2006 compared to$270,572 for the same period in 2005, as further discussed below. The net lossduring the three months ended November 30, 2006 was ($243,773) compared to($242,497) in the same period in 2005.

Sales and Gross Margins

Sales for three months ended November 30, 2006 decreased by16% to $301,095 compared to $356,494 in the same period in 2005. The decrease insales was related to issues associated with the reliability of the Company'scomputer systems used to track and account for distributors' sales activity. Thesystem problems caused delays in the accumulation of sales data, which affectedthe timely calculation and payment of distributor bonuses. These problems causeda decline in sales activity by the distributors. In May 2006, the Companyenhanced and improved the computer system, which improved the sales dataaccumulation process. In July 2006, the Company rolled out a replicated Companywebsite for each of its 9,900 distributors. The replicated websites allow eachdistributor to advertise to their specific customers, while providing theproduct and company information from the Company's new website. Management isconfident the improved computer system, the replicated websites and new productofferings will result in an increase in sales volume and that the Company willregain the confidence of the distributor network. Sales have increased by$45,604 over the three months ended August 31, 2006 from a total of $255,491 to$301,095 for the three months ended November 30, 2006.

Gross profit in the three months ended November 30, 2006decreased to $215,591 compared to $270,572 in the same period in 2005 due to thedecline in sales and increased packaging and freight costs. Gross profit as apercentage of revenue decreased slightly to 72% in the three months endedNovember 30, 2006 compared to 76% in the same period in 2005. This was due toincreased packaging and freight costs, which the Company was not able to passalong to our customers.

 

 

Selling, General and Administrative Expenses

Total selling, general and administrative expenses for thethree months ended November 30, 2006 were $459,364 compared with $488,290 forthe same period in 2005. The decrease is primarily related to decreases in salesexpenses, payroll and related benefits and contract labor. With the decrease insales, the Company has been actively working to reduce overhead costs. Theminimum royalty fee accrued to Jurak Holdings Limited (related party) remainedconsistent for both periods at $125,000. 

Interest expense for the three months ended November 30, 2006was $0 compared with $24,779 for the same period in 2005. Interest costsprimarily relate to loans from a principal stockholder and related entities,which were outstanding during the prior 2005 quarter. The majority of theseloans were converted into common stock or paid off during the fiscal year endedMay 31, 2006. 
** 

Six months Ended November 30, 2006 Compared to Six monthsEnded November 30, 2005**
Total sales for the six months ended November 30, 2006 was$556,586 compared to $763,461 in the same period in 2005. Gross profit declinedto $419,177 for the six months ended November 30, 2006 compared to $594,360 forthe same period in 2005, as further discussed below. The net loss during the sixmonths ended November 30, 2006 was ($524,030) compared to ($610,940) in the sameperiod in 2005.

Sales and Gross Margins

Sales for the six months ended November 30, 2006 decreased by27% to $556,586 compared to $763,461 in the same period in 2005. The decrease insales was related to issues associated with the reliability of the Company'scomputer systems used to track and account for distributors' sales activityprimarily in the first quarter of 2006. The system problems caused delays in theaccumulation of sales data, which affected the timely calculation and payment ofdistributor bonuses. These problems caused a decline in sales activity by thedistributors. In May 2006, the Company enhanced and improved the computersystem, which improved the sales data accumulation process. In July 2006, theCompany rolled out a replicated Company website for each of its 9,900distributors. The replicated websites allow each distributor to advertise totheir specific customers, while providing the product and company informationfrom the Company's new website. Management is confident the improved computersystem, the replicated websites and new product offerings will result in anincrease in sales volume and that the Company will regain the confidence of thedistributor network.

Gross profit in the six months ended November 30, 2006decreased to $419,177 compared to $594,360 in the same period in 2005 dueprimarily to the decline in sales. Gross profit as a percentage of revenuedecreased slightly to 75% in the six months ended November 30, 2006 compared to78% in the same period in 2005. This was due to increased packaging and freightcosts, which the Company was not able to pass along to our customers.

 

 

Selling, General and Administrative Expenses

Total selling, general and administrative expenses for thesix months ended November 30, 2006 were $943,207 compared with $1,153,370 forthe same period in 2005. The decrease is primarily related to decreases in salesexpenses, payroll and related benefits and contract labor. In the first quarter2005, the Company incurred a consulting fee of $175,000, which was notapplicable to the current year first quarter. With the decrease in sales, theCompany has been actively working to reduce overhead costs. The minimum royaltyfee accrued to Jurak Holdings Limited (related party) remained consistent forboth periods at $250,000 or $125,000 per quarter. 

Interest expense for the six months ended November 30, 2006was $0 compared with $51,930 for the same period in 2005. Interest costsprimarily relate to loans from a principal stockholder and related entities,which were outstanding during the prior 2005 quarter. The majority of theseloans were converted into common stock or paid off during the fiscal year endedMay 31, 2006. 

 

 

 

 

 

Liquidity and Capital Resources
Six Month Period Ended November 30, 2006 

We have historically had more expenses and cost of sales than revenue in eachyear of our operations. The accumulated deficit as of November 30, 2006 was$5,159,294 compared to $4,635,264 as of May 31, 2006. Generally, we havefinanced operations to date through the proceeds of the private placement ofequity and debt securities and sales revenue. In connection with our businessplan, management anticipates that there may be additional increases in workingexpenses and capital expenditures relating to operating expenses. We intend tofinance these expenses with further issuances of our securities and revenuesfrom operations. Therefore, we expect we may need to raise additional capitaland increase our revenues to meet long-term operating requirements.

We are currently trying to raise capital through a $3,000,000 privateplacement. These funds will be used to make the required payments for our newlicense agreement and to launch and market our natural immune booster product.

At November 30, 2006, the Company had $5,187 of unrestricted cash compared to$44,073 of unrestricted cash at May 31, 2006. The Company had current assets of$109,657 and current liabilities of $916,775 at November 30, 2006 compared tocurrent assets of $110,841 and current liabilities of $604,586 at May 31, 2006.

Net cash used in operating activities was $209,202 during the six monthsended November 30, 2006 compared to net cash used in operating activities of$129,767 in the same period in 2005. The increase was due primarily to a greateroperating loss for the six months ended November 30, 2006 compared to theoperating loss for the six months ended November 30, 2005 after adjusting forthe non-cash charges for professional services paid via stock.

Net cash provided by investing activities was $3,951 in the first six monthsin 2006 compared to $0 in the same period in 2005. The Company expects to spendapproximately $10,000 on capital equipment additions during the fiscal yearending May 31, 2007 of which $0 was expended during the first six months in2006. The Company also expended $15,054 for licensing fees associated with aletter of intent to acquire the worldwide exclusive marketing rights to theworld's most powerful, natural immune booster discovered to date, as stated bythe scientific research team that developed the product. These rights are beingacquired from a leading life science company with a successful history ofproducing unique, patented products that are distributed on a global scale. 

Net cash provided by financing activities was $166,365 in the first sixmonths in 2006 compared to net cash provided by financing activities in the sameperiod in 2005 of $144,561. Proceeds from the issuance of common stock were$200,000 in the first six months of 2006 compared to $159,823 in the same periodof 2005. The increase in stock proceeds was partially offset by the $42,519advance to an officer/stockholder during the six months ended November 30, 2006.

PLAN OF OPERATION: As of the date of this Quarterly Report, we have generatedrevenue from operations and continue to rely upon internally generated funds andadvances, funds from the sale of shares of stock and loans from our shareholdersand private investors to finance our operations and growth. Managementanticipates a possible increase in operating expenses and capital expendituresrelating to its business operations. We may finance further expenditures withfuture issuances of our restricted common stock. We believe that potential salesrevenues and any private placements of equity capital and debt financing, ifsuccessful, may be adequate to fund our operations over the next year. We mayencounter business endeavors that require significant cash commitments orunanticipated problems or expenses that could result in a requirement foradditional cash before that time. If we raise additional funds through theissuance of equity or convertible debt securities other than to currentshareholders, the percentage ownership of our current shareholders would bereduced, and such securities might have rights, preferences or privileges seniorto our common stock. Additional financing may not be available upon acceptableterms, or at all. If adequate funds are not available or are not available onacceptable terms, we may not be able to take advantage of potential marketingopportunities for its products, which could significantly and materiallyrestrict our business operations. As of the date of this Quarterly Report,management believes that an estimated $2,000,000 to $5,000,000 is required overthe next two years for payment of expenses associated with our ongoing businessoperations. Management believes that we can satisfy our cash requirements forapproximately the next twelve months based on sales revenues, proceeds receivedfrom private placement offerings, and our ability to obtain advances or equityprivate placements from certain investors and other parties, as necessary. As ofthe date of this Quarterly Report, there is substantial doubt regarding ourability to continue as a going concern as we have not generated sufficient cashflow to fund our business operations and material commitments. We must raiseadditional capital. We have not generated sufficient cash flow in the past tofund our operations and activities. Historically, we have relied upon internallygenerated funds, funds from the sale of shares of stock and loans from ourshareholders and private investors to finance our operations and growth. Ourfuture success and viability are entirely dependent upon our current managementto generate revenues from our business operations and raise additional capitalthrough further private offerings of our stock or loans from private investors.Management is optimistic that we will be successful in our capital raisingefforts. There can be no assurance, however, that we will be able to generatesufficient revenues or raise additional capital. Our failure to successfullygenerate sufficient revenues and/or raise additional capital will have amaterial and adverse affect upon our shareholders and us. We may be forced tofurther reduce operating expenditures and/or cease operations altogether. 

On December 14, 2006 the Company announced a best efforts private placementof $3,000,000 U.S. at $1.50 per share. The proceeds of the private placement areto be used for regular corporate needs as well as funding the product launch ofour recently acquired rights to the world's most powerful, natural immunebooster product.The Company also announced that the first$600,000 has been received on December 11, 2006.

Critical Accounting Policies

Our critical accounting policies, including the assumptions and judgementsunderlying them, are discussed in our fiscal 2006 Form 10-KSB in Note 1 Summaryof Significant Accounting Policies included in our Consolidated FinancialStatements. There were no significant changes to our critical accountingpolicies during the six months ended November 30, 2006. These policies have beenconsistently applied in all material respects and disclose such matters asallowance for doubtful accounts, sales returns, inventory valuation, warrantyexpense, income taxes, revenue recognition and fixed asset and intangible assetimpairment recognition. On an ongoing basis, we evaluate our estimates based onhistorical experience and on various other assumptions that are believed to bereasonable under the circumstances, the result of which form the basis formaking judgements about the carrying value of assets and liabilities that arenot readily apparent from other sources. Results may differ from these estimatesdue to actual outcomes being different from those on which we based ourassumptions. Management on an ongoing basis reviews these estimates andjudgements.

Recently Issued Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board ("FASB")issued FASB Interpretation No. 48, "Accounting for Uncertainty in IncomeTaxes"-an Interpretation of FASB Statement No. 109". (FIN No. 48"), whichclarifies the accounting for uncertainty in income taxes by prescribing theminimum recognition threshold a tax position is required to meet before beingrecognized in the financial statements. Additionally, FIN 48 provides guidanceon derecognition, classification, interest, penalties, accounting in interimperiods and disclosure related to uncertain income tax positions. FIN No. 48 iseffective for fiscal years beginning after December 15, 2006. The Company iscurrently evaluating the impact of adopting FIN No. 48, but does not anticipatethat it will have a material effect on its financial position, results ofoperations or cash flows.

 

Item 3. Controls and Procedures 

Evaluation of Disclosure Controls and Procedures

An evaluation made at the end of the period covered by this report wasperformed under the supervision and with the participation of the Company'spresident, chief executive officer ("CEO") and the chief financial officer(CFO") of the effectiveness of the design and operation of the Company'sdisclosure controls and procedures to insure that the Company records,processes, summarizes and reports in a timely and effective manner theinformation required to be disclosed in reports filed with or submitted to theSecurities and Exchange Commission. Based on that evaluation, the Company'smanagement, including the CEO and CFO, concluded that the Company's disclosurecontrols and procedures were effective in timely bringing to their attentionmaterial information related to the Company required to be included in theCompany's periodic Securities and Exchange Commission filings. Since the date ofthis evaluation, there have been no significant changes in the Company'sinternal controls or in other factors that could significantly affect thosecontrols.

However, due to the limited number of Company employees engaged in theauthorization, recording, processing and reporting of transactions, there isinherently a lack of segregation of duties. The company periodically assessesthe cost versus benefit of adding the resources that would remedy or mitigatethis situation, and currently does not consider the benefits to outweigh thecosts of adding additional staff in light of the limited number of transactionsrelated to the Company's operations.

 

Changes in Internal Controls Over Financial Reporting

There have been no significant changes in internal control over financialreporting that occurred during the fiscal period covered by this report thathave materially affected or are reasonably likely to materially affect theCompany's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On December 13, 2006, a civil suit was filed in the District Court of ClarkCounty in and for the State of Nevada by Jurak Corporation World Wide, Inc.(plaintiffs) and two former employees (defendants). The suit entails that theformer employees processed credit refunds to a debit/credit card held at theirbanking institution. In addition, the former employee embezzled funds by settingup a merchant processing system and diverting the charging of our distributors'credit cards from our merchant processor to their processor. All is evidenced byinformation located on the computer used by the former employee at the Companyas well as through other reporting mechanisms and processing systems. TheCompany is seeking relief for damages in excess of $60,000; special damagesaccording to proof; for attorneys' fees and costs of suit; and for other andfurther relief as the Court may deem just and proper as compensation for moniesembezzled by the former employees of the Company. No answer has been receivedfrom the defendant and the Company is seeking a default judgment granting all ofthe relief sought. 

Item 2 Changes in Securities

During the six month period ended November 30, 2006 the Company sold10,000,000 shares of common stock for $200,000.  No underwriters were usedfor the sale of common stock.  The Company relied on Rule 505 to sell theseshares.

Item 5 Other Information 

No items occured during the period of this report which wouldhave been required to be reported in a Form 8K which have not bee reported.

There have been no material changes to the procedures bywhich security holders may recommend nominees to the Company's Board ofDirectors.

Item 6 Exhibits
**The following exhibits are included herein:

31.1 Certification of Chief Executive Officer        pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14        and 15d-14 of the Exchange Act).

32. Certifications pursuant Section 906 of the        Sarbanes-Oxley Act of 2002 (18 U.S.C. Sect. 1350).

Signatures

In accordance with the requirements of the  Exchange Act of 1934, theregistrant  caused this report to be signed on its behalf by theundersigned thereto duly authorized.

                                                                                                                                                                                       Jurak Corporation World Wide, Inc.

                                                                                                                                                                                   By /s/ Anthony Jurak 
                                                                                                                                                                                        Anthony Jurak

Date: January 17, 2007                                                                                                                                                    Chairman of the Board, Director**********