UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended: October 31, 2008 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ____________ to _____________ Commission File No. 333-140567 J-KAN, INC.(Exact name of small business issuer as specified in its charter)  ARKANSAS71-0822436(State or other jurisdiction of incorporation or organization)(I.R.S. Tax. I.D. No.)1823 Phoenix Avenue
Ft. Smith, Arkansas 72903(Address of Principal Executive Offices)(479) 461-6810(Registrants 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  o  No þ  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer.oAccelerated filer.   oNon-accelerated filer.  o
(Do not check if a smaller reporting company)Smaller reporting company.  þ  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) .   Yes  o  No þ  The number of shares outstanding of each of the issuer’s classes of common stock as of  October 31, 2008: 1,686,000    Quick Links to Table of Contents   TABLE OF CONTENTS  Part I  Financial Information Item 1.  Financial Statements Item 2.  Managements Discussion And Analysis Or Plan Of Operation Item 3.  Quantitative and Qualitative Disclosures About Market Risk Item 4.  Controls And Procedures Part II  Other Information Item 1.  Legal Proceedings Item 2.  Unregistered Shares Of Equity Securities And Use Of Proceeds Item 4.  Submission Of Matters To A Vote Of Security Holders Item 5.  Other Information Item 6.  Exhibits Signatures Exhibit Index  2  Quick Links to Table of Contents  PART I  FINANCIAL INFORMATION    ITEM 1. FINANCIAL STATEMENTS   Randall N. Drake, C.P.A., P.A.  1981 Promenade Way Clearwater, Florida 33760 Phone: (727) 536-4863   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   To the Board of Directors and
Stockholders of J-Kan, Inc. and Subsidiary  We have reviewed the accompanying balance sheet of J-Kan, Inc. and subsidiary as of October 31, 2008 and the related statements of operations and cash flows for the three-month periods ended October 31, 2008 and 2007. These financial statements are the responsibility of the companys management. We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States of America. Randall N. Drake, CPA, PARandall N. Drake, CPA, PAClearwater, FloridaDecember 3, 2008  3  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Consolidated Balance Sheets October 31, 2008 and July 31, 2008  OCTOBER 31, 2008
  JULY 31, 2007(Unaudited)
  (Audited)ASSETSCURRENT ASSETSCash and cash equivalents$     49,298$    60,217Accounts receivable7,855
  7,534Inventory15,22514,914Prepaid income taxes
  -
  5,345Total Current Assets
  72,378
  88,010PROPERTY AND EQUIPMENTVehicles141,131141,131Storage buildings1,589
  1,589Equipment105,568105,568Furniture and fixtures8,550
  8,550Signs12,11012,110Leasehold improvements
  27,889
  27,889296,837
  296,837Less accumulated depreciation200,166
  191,28696,671
  105,551OTHER ASSETSDeposits and memberships3,2813,281Accounts receivable - stockholder
  21,507
  24,00724,788
  27,288Total Assets
  $   193,837
  $    220,849   Seeaccompanying notes and accountant's report.  4  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Consolidated Balance Sheets October 31, 2008 and July 31, 2008 (Continued)  OCTOBER 31, 2008JULY 31,  2007(Unaudited)(Audited)LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESCurrent portion of long-term debt$    23,546$     27,303Accounts payable58,92570,019Income taxes payable494494Accrued payroll3,62510,108Accrued payroll taxes withheld and payable10,2329,157Accrued expenses13,00010,000Total Current Liabilities109,822127,081LONG-TERM LIABILITIESLong-term debt37,40239,754Note payable - stockholder-19,500Deferred income taxes9,0008,000Total Long-Term Liabilities46,40267,254STOCKHOLDERS' EQUITYCommon stock, $.01 par value;authorized 100,000,000; issuedand outstanding 1,686,000 shares843843Retained earnings36,77025,671Total Stockholders' Equity37,61326,514Total Liabilities andStockholders' Equity$     193,837$   220,849   Seeaccompanying notes and accountant's report.  5  Quick Links to Table of Contents J-KAN, INC. AND SUBSIDIARY Consolidated Statements of Operations Three Months Ended October 31, 2008 and 2007  OCTOBER 31, 2008OCTOBER 31, 2007(Unaudited)(Unaudited)REVENUERestaurant and catering sales$    284,924$     283,651OPERATING EXPENSESAdvertising6,1133,436Automobile4,9884,808Bank charges5,0934,732Contract labor120754Depreciation8,8808,149Dues and subscriptions799755Insurance, general-4,104Insurance, health3,3547,301Insurance, life1,8501,850Laundry, linen and uniforms2,3902,615Legal and accounting15,76018,134Miscellaneous74196Payroll taxes6,2486,442Postage53104Purchases115,170135,762Rent3,15112,950Repairs and maintenance3,7332,575Salaries75,92274,881Security128231Supplies4,0204,356Taxes and licenses1,3873,928Telephone2,2503,158Travel and entertainment3,2301,687Utilities10,3448,989275,057311,897INCOME (LOSS) FROM OPERATIONS9,867(28,246)OTHER INCOME (EXPENSE)Other income2,512-Interest expense(280)(364)2,232(364)INCOME (LOSS) BEFORE PROVISIONFOR INCOME TAXES12,099(28,610)PROVISION FOR INCOME TAXES(1,000)(2,000)NET INCOME (LOSS)$    11,099$   (30,610)NET INCOME (LOSS) PER SHARE OFCOMMON STOCK$     0.01$    (0.02)  See accompanying notes and accountant's report. 6  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows Three Months Ended October 31, 2008 and 2007  OCTOBER 31, 2008OCTOBER 31, 2007(Unaudited)(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet Income (Loss)$    11,099$  (30,610)Adjustments to reconcile net income (loss) to net cashfrom operating activities:Depreciation8,8808,149Deferred income taxes1,0002,000Changes in:Accounts receivable(321)(3,193)Inventory(311)-Prepaid excise taxes-832Prepaid income taxes5,345(791)Accounts payable(11,094)37,140Accrued payroll(6,483)6,513Accrued payroll taxes withheld and payable1,075(2,090)Accrued expenses3,000(4,252)Total adjustments1,09144,308Net Cash From Operating Activities12,19013,698CASH FLOWS FROM INVESTING ACTIVITIESChange in accounts receivable - stockholder2,5005,927Net Cash From Investing Activities2,5005,927CASH FLOWS FROM FINANCING ACTIVITIESChange in note payable - stockholder(19,500)-Principal payments on long-term debt(6,109)(4,409)Net Cash (Used For) Financing Activities(25,609)(4,409)NET CHANGE IN CASH AND CASH EQUIVALENTS(10,919)15,216CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD60,21724,691CASH AND CASH EQUIVALENTS, END OF PERIOD$    49,298$    39,907  See accompanying notes and accountant's report.  7  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements    NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Nature of Business J-Kan, Inc. (the Company) was incorporated on September 4, 1998 in Arkansas.  Neels Food Services, Inc., a wholly owned subsidiary, operates as Jerry Neels BBQ Restaurants.  The Companys operations are in Fort Smith, Arkansas and the surrounding areas.  Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.  All significant intercompany accounts and transactions have been eliminated.  Basis of Accounting The Companys policy is to prepare its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.  Revenues, net of sales tax, are recognized in the period in which they are earned.  Expenses are recognized in the period in which they are incurred.  Property and Equipment Property and equipment is stated at cost.  Depreciation of property and equipment is computed on the straight-line basis over the estimated useful lives of the assets, which range from five to thirty-one and one half years.  Inventory Inventory is stated at the lower of cost (first-in, first-out method) or market.  At October 31, 2008 and July 31, 2008, inventory consisted of food, beverage, and paper goods.  Deferred Income Taxes Deferred income taxes are calculated for certain transactions and events because of differing treatments under accounting principles generally accepted in the United States of America and the currently enacted tax laws of the Federal and state governments.  The results of these differences on a cumulative basis, known as temporary differences, result in the recognition and measurement of deferred tax assets and liabilities in the accompanying Consolidated Balance Sheets.  See Note 3 for further details.  Cash Equivalents For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.  At October 31, 2008 and July 31, 2008, the Company had no cash equivalents.   8  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements (Continued)  NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued  Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Advertising and Promotions  The Company follows the policy of charging advertising and promotions to expense as incurred.  SFAS No. 144  Statement of Financial Accounting Standards (SFAS) No. 144 requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  The adoption of SFAS No. 144 has not materially affected the Companys reported earnings, financial condition or cash flows. Accounts Receivable The Company considers accounts receivable to be fully collectible.  Accordingly, no allowance for doubtful accounts is deemed necessary.  If accounts become uncollectible, they will be charged to operations when that determination is made.  Determination of uncollectibility is made by management based on knowledge of individual customers and consideration of such factors as current economic conditions.  Credit extended to customers is generally uncollateralized.  Past-due status is based on contractual terms.  Past-due accounts are not charged interest. Net Income (Loss) Per Share of Common Stock Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during each year.  The net income (loss) per share of common stock was $0.01 and $(0.02), respectively, for the three months ended October 31, 2008 and 2007 based on the weighted average shares of outstanding common stock of 1,686,000. NOTE 2:  RELATED PARTY TRANSACTIONS At October 31, 2008 and July 31, 2008, the Company had a note payable of $-0- and $19,500, respectively, to a stockholder.  This note was unsecured, non-interest bearing, and had no formal repayment arrangements established with the stockholder.      9  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements (Continued)  NOTE 2:  RELATED PARTY TRANSACTIONS - Continued At October 31, 2008 and July 31, 2008, the Company had a receivable from a stockholder of $21,507 and $24,007, respectively.  This receivable is unsecured, non-interest bearing, and no repayment terms have been established. The Company leases a building from a stockholder under an operating lease. This lease required monthly payments of $4,000 per month for a period of seven years beginning November 1, 2003. On January 1, 2008, this lease agreement was cancelled and a new lease agreement requiring monthly payments of $1,000, expiring November 1, 2010, was entered into with the stockholder.  The Company is required to pay all executory costs such as property taxes, maintenance, and insurance on the property under lease. The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties. Rent paid to a stockholder for the three months ended October 31, 2008 and 2007, amounted to $3,000 and $12,000, respectively.  Rent payable to a stockholder amounted to $13,000 and $10,000, respectively at October 31, 2008 and July 31, 2008, and is included in accrued expenses on the Balance Sheets. At October 31, 2008, the minimum lease payments under the terms of the lease agreement were as follows: Twelve month period ending October 31, 2009 $ 12,000 2010 12,000  At October 31, 2008 and July 31, 2008, one shareholder owned approximately 100% of the Companys outstanding common stock and had the effective power to control the vote on substantially all significant matters without the approval of the other stockholders. NOTE 3:INCOME TAXES The Company utilizes a liability approach to financial accounting and reporting for income taxes.  The difference between the financial statement and tax bases of assets and liabilities is determined annually.  Deferred income tax assets and liabilities are computed for those differences that have future tax consequences using the currently enacted tax laws and rates that apply to the periods in which they are expected to affect taxable income. Valuation allowances are established, if necessary, to reduce deferred tax asset accounts to the amounts that will more likely than not be realized.  No valuation allowance was deemed necessary by management as of October 31, 2008 and July 31, 2008.  Income tax expense is the current tax payable or refundable for the period, plus or minus the net change in the deferred tax asset and liability accounts.      10  Quick Links to Table of Contents J-KAN, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements (Continued)  NOTE 3:INCOME TAXES - Continued  The provision for income taxes for the three months ended October 31, 2008 and 2007 consists of the following: 2008 2007 Deferred taxes $ 1,000 $ 2,000  As of October 31, 2008 and July 31, 2008, the net deferred tax amounts included in the accompanying Consolidated Balance Sheets include the following: 2008 2007 Deferred tax liability  noncurrent $ 9,000 $ 8,000  The deferred tax liability results from the use of accelerated methods of depreciation of property and equipment for tax purposes.  The provision for income taxes differs from that computed by applying Federal statutory rates to income before provision for income taxes because of the effects of graduated tax rates, state income taxes, and nondeductible expenses.  No income taxes were paid by the Company during the three months ended October 31, 2008 and 2007.  NOTE 4:LONG-TERM DEBT  Long-term debt consists of: October 31, July 31, 2008 2008  Notes payable to related parties, uncollateralized, due in annual installments $ 21,723 $ 21,723 0% note payable to Toyota Financial, collateralized by automobile, due in monthly installments of $784 24,302 26,654 2.9% note payable to GMAC, collateralized by automobile, due in monthly installments of $596, including interest 5,295 7,035 8.5% note payable to bank, collateralized by automobile, due in monthly installments of $750, including interest 9,628 11,645 60,948 67,057 Less current portion 23,546 27,303 $ 37,402 $ 39,754 NOTE 4:LONG-TERM DEBT - Continued  Long-term debt maturities are as follows: Twelve month period ending October 31, 2009 $ 23,546 2010 31,130 2011 6,272  Interest paid during the three months ended October 31, 2008 and 2007 amounted to $280 and $364, respectively. 11  Quick Links to Table of Contents  J-KAN, INC. AND SUBSIDIARY Notes To Consolidated Financial Statements (Continued)  NOTE 5:  NONCASH INVESTING AND FINANCING ACTIVITIES  The Company had no noncash investing and financing activities during the three months ended October 31, 2008 and 2007.   NOTE 6:  FAIR VALUE OF FINANCIAL INSTRUMENTS  The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments for which it is practical to estimate such value:  Cash and cash equivalents-The carrying amount approximates fair value because of the short maturity of those instruments. Accounts receivable-The carrying value of accounts receivable approximates fair value due to their short-term nature and historical collectibility. Accounts payable-The carrying value of accounts payable approximates fair value due to the short-term nature of the obligations. Long-term debt- The fair value of the Companys long-term debt is estimated by discounting the future cash flow using the Companys current borrowing rates for similar types and maturities of debt. The estimated fair values of the Companys financial instruments as of October 31, 2008 and July 31, 2008 are as follows: October 31, July 31, 2008 2008 Carrying Fair Carrying Fair Amount Value Amount Value Cash and cash equivalents $ 49,298 $ 49,298 $ 60,217 $ 60,217 Accounts receivable 7,855 7,855 7,534 7,534 Accounts payable (58,925) (58,925) (70,019) (70,019) Long-term debt (60,948) (60,948) (67,057) (67,057)  NOTE 6:  FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued  The Company determined the estimated fair value amounts by using available market information and commonly accepted valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company or holders of the instruments could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values.  NOTE 7:  CURRENT ACCOUNTING DEVELOPMENTS  The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2008. The Company has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Companys reported financial position or operations in the near term.  12  Quick Links to Table of Contents  ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION  The following discussion should be read in conjunction with our unaudited financial statements and the notes thereto.  Forward-Looking Statements  This quarterly report contains forward-looking statements relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this Report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: our potential inability to raise additional capital, the possibility that third parties hold proprietary rights that preclude us from marketing our products, the emergence of additional competing technologies, changes in domestic and foreign laws, regulations and taxes, changes in economic conditions, uncertainties related to Japan's legal system and economic, political and social events in Japan, a general economic downturn, a downturn in the securities markets, Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks," and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Report as anticipated, estimated or expected.  Use of Certain Defined Terms  Except as otherwise indicated by the context, references in this report to "J-Kan" "we," "us," or "our" and the "Company" are references to the business of J-Kan, Inc. and its subsidiary  Use of GAAP Financial Measures  We use GAAP financial measures in the section of this quarterly report captioned "Managements Discussion and Analysis or Plan of Operation." All of the GAAP financial measures used by us in this report relate to the inclusion of financial information.  Overview  This subsection of MD&A is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance, our overall business strategy and our earnings for the periods covered.  General  We were originally formed on June 18, 1976, as Neels Food Service, Inc. under the laws of the State of Arkansas.  On June 18, 1999 the corporation J-Kan, Inc. was formed for the purpose of buying all of the outstanding stock in Neels Food service, Inc.  We amended our Articles of Incorporation in October 2006 changing the par value of our stock and the total authorized capital stock.  Since taking over the operations of Jerry Neels Bar-B-Q, our gross revenues have increased on an annual basis; this despite the fact that our operations are dark each Sunday.  Our most year ended July 31, 2007 showed a net income of $18,080. We will continue to concentrate our efforts on what we do best: providing high quality food at an affordable price to the general public.  Sources of Revenue  J-Kan, Inc. specializes in a quick-service style sit-down barbeque restaurant catering to a local clientele.  J-Kan has been doing business under their current name of Jerry Neels Bar-B-Q since they took control in 1998.  Prior to this, the restaurant operated under the same name but was corporately owned by Neels Food service, Inc.  It is our intention to refurbish our current restaurant when we have the necessary funds.  While it is our intention to raise funds through a private offering of our stock, there is no certainty that we will be able to raise any funds from such an offering. We then plan to seek a private company that specializes in franchising to determine the feasibility of expanding to 210 metropolitan areas across the United States.  We believe it is critical to have a company experienced in franchising assist us in determining if franchising is right for our operation.   Management believes that it will need $500,000 to attract a company experienced in restaurant franchising.  This estimate is based on the experience of management as well as Internet-based research.  13  Quick Links to Table of Contents     The following is an overview of the key financial measures discussed in our results of operations:   · Restaurant sales consist of food and beverage sales at our restaurant.  Restaurant sales are influenced by menu price increases, new competitor restaurant openings, and changes in comparable restaurant sales. · Purchasesconsist of food, paper and beverage costs including packaging costs. Cost of sales is generally influenced by changes in commodity costs and the effectiveness of our restaurant-level controls to manage food and paper costs. For our restaurant, we have negotiated directly with local and national suppliers for the purchase of food and beverage products and supplies. · Restaurant wages and related expenses include all restaurant management and hourly productive labor costs, employer payroll taxes, restaurant-level bonuses and benefits. Payroll and benefits are subject to inflation, including minimum wage increases and expenses for health insurance and workers compensation insurance. A significant number of our hourly staff is paid at rates consistent with the applicable state minimum wage and, accordingly, increases in minimum wage rates will increase our labor costs. We are insured for workers compensation, general liability and medical insurance claims under policies where we pay all claims, subject to annual stop-loss limitations both for individual claims and claims in the aggregate. · Restaurant rent expense includes base rent and common-area maintenance on our lease. · Other restaurant operating expenses include all other restaurant-level operating costs, the major components of which are utilities, repairs and maintenance, real estate taxes and credit card fees. · Advertising expense includes all promotional expenses including television, radio, billboards and other media. · General and administrative expenses are comprised primarily of (1) salaries and expenses associated with corporate and administrative functions that support the development and operations of our restaurants, (2) legal and professional fees, including external auditing costs, and (3) stock-based compensation expense. · Depreciation and amortization primarily includes the depreciation of fixed assets, including equipment and leasehold improvements, depreciation of assets under lease financing obligations. Results of Operations General The following table shows our revenues, expenditures and net income for the three month periods ended October 31, 2008 and October 31, 2007. Table 4.0 Revenues, Expenditures and Net Income Three months Ended (Unaudited)REVENUEEXPENSESNET INCOME (LOSS)October 31, 2008$ 284,924$ 275,057$ 9,867October 31, 2007$ 283,651$ 311,897$   (28,246)  Operating Results for the three months Ended October 31, 2008 Compared To October 31, 2007 (Unaudited) The following tables set forth key components of our results of operations for the periods indicated, in dollars and key components of our revenue for the periods indicated in dollars.  14  Quick Links to Table of Contents J-Kan, Inc. and Subsidiary Consolidated Statement of Operations For the Three months Ended October 31, 2008 and 2007 UNAUDITED  Three months Ended 10/31/2008Three months Ended 10/31/2007Change% ChangeREVENUERestaurant and catering sales$   284,924$   283,651$    1,2730.4%OPERATING EXPENSESAdvertising6,1133,4362,67778%Automobile4,9884,8081804%Bank charges5,0934,7323618%Contract labor120754(634)-84%Depreciation8,8808,1497319%Dues and subscriptions799755446%Insurance, general-4,104(4,104)-100%Insurance, health3,3547,301(3,947)-54%Insurance, life1,8501,850-0%Laundry, linen and uniforms2,3902,615(225)-9%Legal and accounting15,76018,134(2,374)-13%Miscellaneous74196(122)-62%Payroll taxes6,2486,442(194)-3%Postage53104(51)-49%Purchases115,170135,762(20,592)-15%Rent3,15112,950(9,799)-76%Repairs and maintenance3,7332,5751,15845%Salaries75,92274,8811,0411%Security128231(103)-45%Supplies4,0204,356(336)-8%Taxes and licenses1,3873,928(2,541)-65%Telephone2,2503,158(908)-29%Travel and entertainment3,2301,6871,54391%Utilities10,3448,9891,35515%275,057311,897(36,840)-12%INCOME (LOSS) FROM OPERATIONS9,867(28,246)38,113-135%OTHER INCOME (EXPENSE)Other income2,512-2,512100%Interest expense(280)(364)84-23%2,232(364)2,596-713%INCOME (LOSS) BEFORE PROVISIONFOR INCOME TAXES12,099(28,610)40,709-142%PROVISION FOR INCOME TAXES(1,000)(2,000)1,000-50%NET INCOME (LOSS)$     11,099$   (30,610)$   41,709-136%NET INCOME (LOSS) PER SHARE OF COMMON STOCK$   0.01$    (0.02)$    0.02-136%
 Revenues. For the three months ended October 31, 2008, revenues were $284,924 compared to $283,651 for the three months ended October 31, 2007, a nominal 0.4% increase. Operating Expenses.Expenses decreased by $ 36,840 to $75,057 for the three months ended October 31, 2008 from $311,897 for the three months October 31, 2007.  As a percentage of revenues, our cost of revenue was 97% for the three months ended October 31, 2008, a decrease from 110% for the three months ended October 31, 2007.   This nominal decrease is primarily due to a decrease in purchases and the decrease in rent, which is discussed further in Note 2 in the Notes to the Financial Statements  15  Quick Links to Table of Contents  Income (Loss) from Operations. For the three months ended October 31, 2008 and 2007, we incurred a profit of $9,867 and a loss of $28,246, respectively, an increase of $38,113. As discussed above, this nominal increase is primarily due to a decrease in purchases and the decrease in rent, which is discussed further in Note 2 in the Notes to the Financial Statements. Income before Taxes. Income before taxes for the three months ended October 31, 2008 was $12,099.  Income before taxes as a percentage of revenues was 4.2% for the three months ended October 31, 2008. Provision for Income Taxes.  We allocated a provisions of  $1,000 and $2,000 for income taxes for October 31, 2008 and October 31, 2007, respectively. Net Income. As a result of the factors described above, net income increased from $(30,610) for the three months ended October 31, 2007 to $11,099 for the same period in 2008. Liquidity and Capital Resources As of October 31, 2008, we had cash and cash equivalents of $30,217. We have not generated sufficient profits to cover our expansion. Accordingly, we must raise cash from sources other than our operations. Our only other source for cash at this time is investment by others in the Company.  As of October 31, 2008, we have been unsuccessful in our endeavors to obtain investors.  We are exploring other options to raise capital.  We are attempting to locate a broker to assist the company in raising additional capital or completing a business combination to increase shareholder value.  As of the date of this report we have not entered into any discussions with any company regarding a possible business combination.  16  Quick Links to Table of Contents  Cash Flow for three months ended October 31, 2008 compared to October 31, 2007 (Unaudited)  The following table provides the statements of net cash flows for the periods presented in this filing:  J-Kan, Inc. and Subsidiary Consolidated Statements of Cash Flows For the three months ended October 31, 2008 and 2007 UNAUDITED  Three months
Ended 10/31/2008Three months
Ended 10/31/2008Change%ChangeCASH FLOWS FROM OPERATING ACTIVITIESNet Income (Loss)$    11,099$  (30,610)41,709136%Adjustments to reconcile net income (loss) to net cashfrom operating activities:Depreciation8,8808,1497319%Deferred income taxes1,0002,000(1,000)-50%Changes in:Accounts receivable(321)(3,193)2,87290%Inventory(311)-(311)-100%Prepaid excise taxes-832(832)100%Prepaid income taxes5,345(791)6,136776%Accounts payable(11,094)37,140(48,234)-130%Accrued payroll(6,483)6,513(12,996)-200%Accrued payroll taxes withheld and payable1,075(2,090)3,165151%Accrued expenses3,000(4,252)7,252171%Total adjustments1,09144,308(43,217)-98%Net Cash From Operating Activities12,19013,698(1,508)-11%CASH FLOWS FROM INVESTING ACTIVITIESChange in accounts receivable - stockholder2,5005,927(3,427)-58%Net Cash From Investing Activities2,5005,927(3,427)-58%CASH FLOWS FROM FINANCING ACTIVITIESChange in note payable - stockholder(19,500)-(19,500)100%Principal payments on long-term debt(6,109)(4,409)(1,700)39%Net Cash (Used For) Financing Activities(25,609)(4,409)(21,200)481%NET CHANGE IN CASH AND CASH EQUIVALENTS(10,919)15,216(26,135)-172%CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD60,21724,69135,526144%CASH AND CASH EQUIVALENTS, END OF PERIOD$    49,298$    39,9079,39124%   Operating Activities.For the three months ended October 31, 2008 and 2007, our operating activities provided $12,190 and $13,698, respectively.  Investing Activities.  For the three month period ended October 31, 2008 we had an increase in cash from investing activities of $2,500. This is positive but $3,427 less than the $5,927 cash provided during the three month period ended October 31, 2007.  Financing Activities.  Net cash used from financing activities in the three month periods ended October 31, 2008 and 2007 totaled $25,609 and $4,409, respectively. The decrease in the cash used for financing activities was attributable to the retirement of debt.  17  Quick Links to Table of Contents  Seasonality of our Sales Our operating results and operating cash flows historically have been subject to seasonal variations. Specifically, we generally have an increase in sales in November and December for our catering services. Inflation Inflation does not materially affect our business or the results of our operations. Recent Accounting Pronouncements The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2008. The Company has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Companys reported financial position or operations in the near term. Off-Balance Sheet Arrangements We do not have any off-balance arrangements.   18  Quick Links to Table of Contents  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company does not have exposure to many market risks, such as potential loss arising from adverse change in market rates and prices, such as foreign currency exchange and interest rates.  We do not hold any derivatives or other financial instruments for trading or speculative purposes.  ITEM 4. CONTROLS AND PROCEDURES  An evaluation was carried out, under the supervision and with the participation of our management, including Jerry W. Neel, Jr., our President, Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this report on Form 10-Q.   Disclosure controls and procedures are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-QSB, is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commissions rules and forms.  Based on that evaluation, Mr. Neel concluded that, as of October 31, 2008, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.  There were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the three-month period covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.     19  Quick Links to Table of Contents  PART II  OTHER INFORMATION   ITEM 1 LEGAL PROCEEDINGS There is no pending litigation by or against us.    ITEM 2 UNREGISTERED SHARES OF EQUITY SECURITIES AND USE OF PROCEEDS Except as specified below, we have not sold any of our securities in a private placement transaction or otherwise during the past three years.  Set forth below is information regarding the issuance and sales of J-Kan, Inc.'s common stock without registration under the Securities Act of 1933during the last three years. No sales involved the use of an underwriter and no underwriter discounts or commissions were paid in connection with the sale of any securities. During the third quarter of 2006 the following forty-five (45) individuals were issued from authorized stock for additional paid-in capital. These shares were exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 as the shares were not a part of a public offering. There was no distribution of a prospectus, private placement memorandum, or business plan to the public. Shares were sold to friends, family, and business acquaintances of the Officers and Directors of the Company.  Each individual is considered educated and informed concerning small investments, such as the $7.00 investment in our Company. All of the shares listed below have been registered in the registration statement filed by the company and declared effective by the Securities and Exchange Commission.   20  Quick Links to Table of Contents   October 11, 2006November 21-27, 2006Name of StockholderShares ReceivedDate Shares IssuedConsiderationShares ReceivedDate Shares PurchasedConsiderationJerry W. Neel, Jr.14,00010-11-2006Services14,00011-27-2006$7.00 CheckMarisu Neel14,00010-11-2006Services14,00011-27-2006$7.00 CheckJerry W. Neel, Sr.14,00010-11-2006Services14,00011-23-2006$7.00 CheckSandra Neel14,00010-11-2006Services14,00011-23-2006$7.00 CheckRodney Neel14,00011-22-2006$7.00 CheckCaroline Neel14,00011-23-2006$7.00 CheckJ. Scott Neel14,00011-23-2006$7.00 CheckDennis Neel14,00011-22-2006$7.00 CheckKatelyn Neel14,00011-27-2006$7.00 CheckNatalie Neel14,00011-27-2006$7.00 CheckPaul W. Neel14,00011-22-2006$7.00 CheckEric K. Neel14,00011-22-2006$7.00 CheckMichele Cardamore14,00011-27-2006$7.00 Money OrderNathan Cardamore14,00011-27-2006$7.00 Money OrderAndrew Cardamore14,00011-27-2006$7.00 CheckJim Dowdy14,00011-27-2006$7.00 Money OrderAngela Dowdy14,00011-27-2006$7.00 Money OrderJanice Udouj14,00011-27-2006$7.00 CheckBetty Schrader14,00011-26-2006$7.00 CheckSteve Whitlock14,00011-27-2006$7.00 CheckHerb Click14,00011-27-2006$7.00 CheckStephanie Click14,00011-27-2006$7.00 CheckDarrell Hayes14,00011-27-2006$7.00 CheckJoAnn Hayes14,00011-27-2006$7.00 CheckDarrick W. Hatton14,00011-27-2006$7.00 CheckFonda Kirschner14,00011-27-2006$7.00 Money OrderGreg Gipson14,00011-23-2006$7.00 CheckKaren Gipson14,00011-23-2006$7.00 CheckSharron M. Burton14,00011-22-2006$7.00 Money OrderBreck Hatcher14,00011-27-2006$7.00 CheckVirginia Hatcher14,00011-27-2006$7.00 CheckSharon Bartsch14,00011-23-2006$7.00 CheckJerry D. Womack, Sr.14,00011-27-2006$7.00 Money OrderRebecca S. Little14,00011-27-2006$7.00 Money OrderMelissa Real14,00011-24-2006$7.00 CheckJoanna Albert14,00011-21-2006$7.00 CheckGail Phillips14,00011-24-2006$7.00 CheckMaytha D. Reather14,00011-23-2006$7.00 CheckDonna Grimes14,00011-21-2006$7.00 CheckGilbert A. Foster14,00011-23-2006$7.00 CheckKristan Lewellen14,00011-22-2006$7.00 CheckRoger Hayward14,00011-27-2006$7.00 CheckSara M. Ash14,00011-27-2006$7.00 CheckJames Fiske14,00011-22-2006$7.00 Money OrderBecky DeVore14,00011-22-2006$7.00 Money Order  21  Quick Links to Table of Contents  ITEM 3 DEFAULTS UPON SENIOR SECURITIES  The Company has not defaulted on any payments of principal, interest, or other indebtedness.   ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to our security holders during the nine-month period ending October 31, 2008 that were not reported in a current report on Form 8-K.    ITEM 5 OTHER INFORMATION  Committees We currently do not have standing audit, nominating or compensation committees.  Currently, our entire Board of Directors is responsible for the functions that would otherwise be handled by these committees.  We intend, however, to establish an audit committee, a nominating committee and a compensation committee of the Board of Directors.  We envision that the audit committee will be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls.  The nominating committee would be responsible for nomination of new director candidates and will be responsible for implementing our corporate governance policies and procedures.  The compensation committee will be primarily responsible for reviewing and approving our salary and benefits policies (including stock options) and other compensation of our executive officers.  Our Board of Directors has not made a determination as to whether any member of our board is an audit committee financial expert.  Upon the establishment of an audit committee, the board will determine whether any of the directors qualify as an audit committee financial expert.     22  Quick Links to Table of Contents  ITEM 6 EXHIBITS Exhibit No.Title3(i)Certificate of Amendment
Filed on February 9, 2007 as Exhibit 3(i) to the registrants Registration Statement on Form SB-2 (File No. 333-140567) and incorporated herein by reference.3(ii)Articles of Incorporation
Filed on February 9, 2007 as Exhibit 3(ii) to the registrants Registration Statement on Form SB-2 (File No. 333-140567) and incorporated herein by reference.3(iii)By-Laws
Filed on February 9, 2007 as Exhibit 3(iii) to the registrants Registration Statement on Form SB-2 (File No. 333-140567) and incorporated herein by reference.4Form of Stock Subscription Agreement
Filed on May 16, 2007 as Exhibit 4 to the registrants Registration Statement on Form SB-2/A (File No. 333-140567) and incorporated herein by reference.10Building Lease
Filed on May 16, 2007 as Exhibit 4 to the registrants Registration Statement on Form SB-2/A (File No. 333-140567) and incorporated herein by reference.23Consent of Experts and Counsel
Filed on February 6, 2008 as Exhibit 23.5 to the registrants Registration Statement on Form S-1/A (File No. 333-140567) and incorporated herein by reference.31.1Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   23  Quick Links to Table of Contents    SIGNATURES  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. J-KAN, INC.Dated:  December 11, 2008/s/Jerry W. Neel, Jr.Jerry W. Neel, Jr.Chief Executive Officer and Chief Financial Officer    24