U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
--------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
---
For the transition period from to
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Commission File Number: 0-28829
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Celebrity Entertainment Group, Inc.
------------------------------------------------------------
(Exact name of Small Business Issuer as specified in its Charter)
WYOMING 65-0970516
--------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
18870 Still Lake Drive, Jupiter, Florida 33458
---------------------------------------------------------
(Address of principal executive offices
(561) 741-0410
----------------------
(Issuer's telephone number)
N/A
----------------------
(Former Name, former address and former fiscal year, if changed
since last Report.)
Check mark whether the Issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 X No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 3,674,822 Common Stock as
of June 30, 2000.
<PAGE>
CELEBRITY ENTERTAINMENT GROUP, INC.
INDEX
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of March 31, 2000 and
December 31, 1999
Consolidated Statements of Operations for the Three Months
Ended March 31, 2000 and March 31,1999, and for the Period
from Inception (May 2, 1983) to March 31, 2000.
Consolidated Statements of Stockholders' Equity (Deficit) for
the Period from Inception (May 2, 1983) to March 31, 2000.
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2000 and 1999 and for the Period from
Inception (May 2, 1983) to March 31, 2000.
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis and Plan of Operations
PART II. OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
2
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements (unaudited)
Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements of
Celebrity Entertainment Group, Inc. (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-B. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments considered necessary
for a fair presentation (consisting of normal recurring accruals) have been
included. 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 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. Operating
results for the three month period ended March 31, 2000 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2000. For further information, refer to the consolidated financial statements
and footnotes for the year ended December 31, 1999 found in the Company's Form
10-KSB.
3
<PAGE>
<TABLE>
<CAPTION>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
------
March 31, December 31,
2000 1999
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ -- $ --
----------- -----------
Total Current Assets -- --
----------- -----------
TOTAL ASSETS $ -- $ --
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,500 $ 3,837
----------- -----------
Total Current Liabilities 1,500 3,837
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, 5,000,000 shares authorized at
$0.001 par value; -0- shares issued and outstanding -- --
Common stock, 100,000,000 shares authorized at
$0.001 par value; 3,674,762 shares issued and
outstanding 3,675 3,675
Capital in excess of par value 6,834,814 6,828,906
Deficit accumulated during the development stage (6,839,989) (6,836,418)
----------- -----------
Total Stockholders' Equity (Deficit) (1,500) (3,837)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ -- $ --
=========== ===========
</TABLE>
See Accountants' Review Report and the accompanying notes to the
review financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
May 2, 1983
For the Through
Three Months Ended March 31,
--------------------------- -----------
2000 1999 2000
------------- ----------- -----------
<S> <C> <C> <C>
REVENUES $ -- $ -- $ --
------------- ----------- -----------
EXPENSES 3,571 1,764 10,626
------------- ----------- -----------
LOSS ON DISCONTINUED
OPERATIONS -- -- 6,829,363
------------- ----------- -----------
NET LOSS $ (3,571) $ (1,764) $(6,839,989)
============= =========== ===========
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
============= ===========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 3,674,762 3,674,762
============= ===========
</TABLE>
See Accountants' Review Report and the accompanying notes to the
review financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
Deficit
Accumulated
Common Stock Capital in During the
------------ ----------- Excess of Development
Shares Amount Par Value Stage
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Balance at inception -- $ -- $ -- $ --
Common stock issued from
inception on May 2, 1983 through
December 31, 1996 at approximately
$5.60 per share 1,174,762 1,175 6,578,188 --
Net loss from inception through
December 31, 1996 -- -- -- (6,579,363)
----------- ----------- ----------- -----------
Balance, December 31, 1996 1,174,762 1,175 6,578,188 (6,579,363)
October 10, 1997, common stock
issued for services at $0.10
per share 2,500,000 2,500 247,500 --
Net loss for the year ended
December 31, 1997 -- -- -- (250,000)
----------- ----------- ----------- -----------
Balance, December 31, 1997 3,674,762 3,675 6,825,688 (6,829,363)
Net loss for the year ended
December 31, 1998 -- -- -- --
----------- ----------- ----------- -----------
Balance, December 31, 1998 3,674,762 3,675 6,825,688 (6,829,363)
Capital contributed by shareholder -- -- 3,218 --
Net loss for the year ended
December 31, 1999 -- -- -- (7,055)
----------- ----------- ----------- -----------
Balance, December 31, 1999 3,674,762 $ 3,675 $ 6,828,906 $(6,836,418)
----------- ----------- ----------- -----------
</TABLE>
See Accountants' Review Report and the accompanying notes to the
review financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
Deficit
Accumulated
Common Stock Capital in During the
------------ ----------- Excess of Development
Shares Amount Par Value Stage
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1999 3,674,762 $ 3,675 $ 6,828,906 $(6,836,418)
Capital contributed by shareholder -- -- 5,908 --
Net loss for the three months ended
March 31, 2000 -- -- -- (3,571)
----------- ----------- ----------- -----------
Balance, March 31, 2000 3,674,762 $ 3,675 $ 6,834,814 $(6,839,989)
=========== =========== =========== ===========
</TABLE>
See Accountants' Review Report and the accompanying notes to the
review financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
May 2, 1983
For the Through
Three Months Ended March 31,
--------------------------- -------------
2000 1999 2000
------------ ----------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (3,571) $ (1,764) $(6,839,989)
Adjustments to reconcile net loss
to net cash provided (used) in
operating activities:
Stock issued for services -- -- 250,000
Discontinued operations -- -- 6,579,363
Change in operating assets and liability accounts:
Increase (decrease) in accounts
payable (2,337) 959 1,500
----------- ----------- -----------
Net Cash Used by Operating
Activities (5,908) (805) (9,126)
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES -- -- --
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Capital contributed by shareholder 5,908 805 9,126
----------- ----------- -----------
Net Cash Provided by Financing
Activities 5,908 805 9,126
----------- ----------- -----------
INCREASE (DECREASE) IN CASH -- -- --
CASH AT BEGINNING OF PERIOD -- -- --
----------- ----------- -----------
CASH AT END OF PERIOD $ -- $ -- $ --
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest $ -- $ -- $ --
Income taxes $ -- $ -- $ --
</TABLE>
See Accountants' Review Report and the accompanying notes to the
review financial statements.
8
<PAGE>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization and Business Activities
The Company was organized under the laws of the State of Utah on
May 2, 1983 under the name of Acceleration Investments, Inc.
During 1984, the shareholders approved a change in the corporate
name to Herradura Petroleum Corp., and then changed the name to
Petro Development, Inc. During 1984, the Company acquired a
subsidiary engaged in oil and gas operations, but discontinued
this operation during 1988.
In July 1994, the Company formed a Nevada corporation known as
Petro Development, Inc. for the purposes of changing its domicile
to Nevada.
In August 1994, the Company changed its name to Odyssey NA, Inc.
On November 2, 1995, in accordance with a Plan and Agreement of
Merger, the Company changed its business plan to a credit card
service business, with the intent of utilizing endorsement of
entertainers and celebrities to promote the credit card business.
On January 11, 1996, in accordance with the Articles of Merger,
the Company merged with Outlaw Entertainment Group, Inc., and
changed it's domicile from Nevada to Wyoming. However, the merger
was recorded as a "reverse" merger as if Odyssey NA, Inc. was
survivor. On February 23, 1996, in accordance with a plan and
agreement of merger, Odyssey NA, Inc. merged with Celebrity
Entertainment Group, Inc., a Wyoming corporation, leaving
Celebrity Entertainment Group, Inc. as the surviving company.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a December 31 year
end.
c. Basic Loss Per Share
<TABLE>
<CAPTION>
For the Three Months Ended
March 31, 2000
----------------------------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
---------------- ---------------- -------------
<S> <C> <C> <C>
Net loss $ (3,571) $ 3,674,762 $ (0.00)
For the Three Months Ended
March 31, 1999
----------------------------------------------------------
Loss Shares Per Share
(Numerator) (Denominator) Amount
---------------- ---------------- -------------
Net loss $ (1,764) 3,674,762 $ (0.00)
</TABLE>
The computation of basic loss per share of common stock is based
on the weighted average number of shares outstanding during the
period.
9
<PAGE>
CELEBRITY ENTERTAINMENT GROUP, INC.
(A Development Stage Company)
Notes to the Financial Statements
March 31, 2000 and December 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Cash Equivalents
For purposes of the statement of cash flows, the Company considers
all highly liquid investments with an original maturity of three
months or less to be cash equivalents.
e. Provision for Taxes
No provision for federal income taxes has been recorded due to net
operating losses. The Company accounts for income taxes pursuant
to FASB Statement No. 109. The Internal Revenue Code contains
provisions which may limit the loss carryforwards available should
certain events occur, including significant changes in stockholder
ownership interests. Accordingly, the tax benefit of the loss
carryovers is offset by a valuation allowance of the same amount.
The loss carryforwards of approximately $260,000 will expire by
the year 2020.
f. Estimates
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 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 form those estimates.
g. Common Stock
In October 1997, the Company issued 2,500,000 (post-split) shares
of its common stock at $0.10 per share for services rendered.
In December 1997, the Company effected a 1-for-10 reverse split of
its issued and outstanding common shares. These financial
statements reflect the 1-for-10 reverse split retroactively.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company
does not have significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover its
operating costs and to allow it to continue as a going concern. It
is the intent of the Company to seek a merger with an existing,
operating company. Currently, certain stockholders have committed
to covering all operating and other costs until sufficient
revenues are generated through a merger.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Plan of Operations
General
Celebrity Entertainment Group, Inc., referred to as Celebrity, we or
us, was incorporated on May 2, 1983 as a Utah Corporation under the name
Acceleration Investments, Inc. We changed our name twice in 1984, first to
Herradura Petroleum Corp., then to Petro Development, Inc., and acquired a
subsidiary engaged in oil and gas operations, which we disposed of in 1988. In
July 1994, we formed a Nevada corporation known as Petro Development, Inc., to
change our domicile to Nevada. In August 1994, we changed our name to Odyssey
NA, Inc. On January 11, 1996, we merged with Outlaw Entertainment Group, Inc.
and changed our domicile to Wyoming. On February 23, 1996, we merged with
Celebrity Entertainment Group, Inc., which is the surviving company.
We are authorized to issue 100,000,000 shares of common stock, $0.001
par value, of which 3,674,822 shares were issued and outstanding as of June 30,
2000. We are authorized to issue 5,000,000 shares of preferred stock, $0.001 par
value, none of which are issued and outstanding. Each holder of the common stock
shall be entitled to one vote
11
<PAGE>
for each share held. The preferred stock may be divided into series or classes
by us upon the approval of a majority vote of our directors.
We have been in the development stage since our merger with Outlaw
Entertainment and have no operations to date. Other than issuing shares to
shareholders, we have not commenced any operational activities. As such, we can
be defined as a "shell" company, whose sole purpose at this time is to locate
and consummate a merger or acquisition with a private entity. Our directors have
elected to commence implementation of our principal business purpose. Our
offices are located at 18870 Still Lake Drive, Jupiter, Florida 33458.
The proposed business activities described in this report classify us
as a blank check company. Many states have enacted statutes, rules and
regulations limiting the sale of securities of blank check companies in their
respective jurisdictions. Marine Way, Inc., holds 2,300,000 of our shares. We do
not intend to undertake any other offering of our securities, either debt or
equity, until such time as we have successfully implemented our business plan.
Marine Way has expressed its intention not to sell its shares of common stock
until such time as we have successfully consummated a merger or acquisition and
are no longer classified as a blank check company. In addition, Marine Way has
also expressed its intention not to sell its shares unless the shares are
subsequently registered or if an exemption form registration is available.
Three Months Ended March 31, 2000 Compared to Three Months Ended
March 31, 1999.
Results of Operations
---------------------
Revenues
--------
The Company currently has no established source of revenues. The
Company's revenues for both the three months ended March 31, 2000 and for the
three months ended March 31, 1999 were $0.00.
General and Administrative Expenses
-----------------------------------
General and administrative expenses for the three months ended March
31, 2000 were $3,571 as compared to $1,764 for the three months ended March 31,
1999, representing an increase of $1,807. The increase in general and
administrative expenses was due to an increase in business development costs
including professional fees and consulting fees.
12
<PAGE>
Net Loss
--------
As a result of the above, net loss for the three months ended March 31,
2000 was $3,571 as compared to the net loss of $1,764 for the three months ended
March 31, 1999, representing an increase of $1,807.
Liquidity and Capital Resources
-------------------------------
To fund working capital requirements through March 31, 2000, the
Company utilized cash reserves based upon capital contributed by a shareholder
in the amount of $5,908.
Cautionary Statement Regarding Forward-Looking Statements:
---------------------------------------------------------
Certain statements contained in this Section and elsewhere in this
report regarding matters that are not historical facts are forward-looking
statements. Because such forward- looking statements include risks and
uncertainties, actual results may differ materially from those expressed or
implied by such forward-looking statements. All statements which address
operating performance, events or developments that management expects or
anticipates to incur in the future, including statements relating to sales and
earnings growth or statements expressing general optimism about future operating
results, are forward- looking statements. The forward-looking statements are
based on management's current views and assumptions regarding future events and
operating performance. Many factors could cause actual results to differ
materially from estimates contained in management's forward-looking statements.
The differences may be caused by a variety of factors, including, but not
limited to, adverse economic conditions, competitive pressures, inadequate
capital, unexpected costs, lower revenues, net income and forecasts, the
possibility of fluctuation and volatility of the Company's operating results and
financial condition, inability to carry out marketing and sales plans and loss
of key executives, among other things.
13
<PAGE>
PART II. OTHER INFORMATION
-----------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-B
The following exhibits are filed as part of this report:
Exhibits:
(27.1) Financial Data Schedule
(b) Reports on Form 8-K
None.
14
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned as duly authorized officers of the Registrant.
Celebrity Entertainment Group, Inc.,
a Wyoming corporation
By: /s/ Alan Pavsner
-----------------------------------
Alan Pavsner, President and Director
(Principal Executive, Financial and
Accounting Officer)
By: /s/ Mary Francis Pavsner
-------------------------------
Mary Francis Pavsner, Secretary
DATED: June 30, 2000
15
