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FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 2000
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-10893
CROWN JEWEL RESOURCES CORP. AND SUBSIDIARY
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(FORMERLY ABF ENERGY CORP.)
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(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3007167
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State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
805 Third Avenue, New York, NY 10022
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(Address of Principal Executive Office) (Zip Code)
212-593-3100
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(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
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The number of shares of registrant's Common Stock, $.00005 par value,
outstanding as of August 10, 2000 was 22,955,796 shares.
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CROWN JEWEL RESOURCES CORP. AND SUBSIDIARY
(FORMERLY ABF ENERGY CORP.)
INDEX
Page
Number
PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheet - June 30, 2000 ...................... 1
Consolidated Statement of Operations - For the Six Months Ended
June 30, 2000 ................................................... 2
Consolidated Statement of Cash Flows - For the Six Months Ended
June 30, 2000 ................................................... 3
Notes to Financial Statements ................................... 4-5
Item 2. Management's Discussion and Analysis ............................ 6
PART II - OTHER INFORMATION ................................................ 7
SIGNATURES ................................................................. 8
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
CROWN JEWEL RESOURCES CORP. AND SUBSIDIARY
(FORMERLY "ABF ENERGY CORP.")
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30,
2000
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ASSETS
CURRENT ASSETS:
Cash ....................................................... $ 30,263
Marketable securities ...................................... 29,979
Loan receivable ............................................ 13,250
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TOTAL CURRENT ASSETS ................................... 73,492
MACHINERY AND EQUIPMENT, net .................................... 2,020,334
BUILDING - PTION TO ACQUIRE ..................................... 1,100,000
INTANGIBLE ASSETS ............................................... 2,325,125
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$ 5,518,951
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses ...................... $ 10,287
Current portion of loan payable ............................ 5,341
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TOTAL CURRENT LIABILITIES .............................. 15,628
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LOAN PAYABLE .................................................... 17,736
STOCKHOLDERS' EQUITY
Common stock, $.00005 par value,
authorized 200,000,000 shares: 22,955,796
issued and outstanding ..................................... 1,148
Paid-in capital ............................................ 7,409,305
Treasury stock; at cost, 19,480,000 shares ................. (1,897,048)
Accumulated deficit ........................................ (27,818)
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TOTAL STOCKHOLDERS' EQUITY ............................. 5,485,587
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$ 5,518,951
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See notes to financial statements.
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CROWN JEWEL RESOURCES CORP. AND SUBSIDIARY
(FORMERLY "ABF ENERGY CORP.")
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
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2000 1999 2000 1999
--------------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES:
Royalties $ 35,000 $ 6,892 $ 38,144 $ 93,533
--------------- -------------- ----------- -----------
EXPENSES:
General and administrative 29,845 20,066 50,286 58,626
Non-cash compensation 208,000 - 208,000 -
--------------- -------------- ------------- -----------
237,845 20,066 258,286 58,626
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INCOME (LOSS) BEFORE OTHER INCOME (EXPENSE) (202,845) (13,174) (220,142) 34,907
OTHER INCOME (EXPENSE):
Dividend income 150 - 810 -
Interest expense (393) - (707) -
--------------- -------------- ------------ -----------
(243) - 103 -
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NET INCOME (LOSS) (203,088) (13,174) (220,039) 34,907
COMPREHENSIVE LOSS - unrealized loss on investments 27,818 - 27,818 -
--------------- ------------- ------------ -----------
NET INCOME (LOSS) APPLICABLE TO
COMMON SHAREHOLDERS $ (230,906) $ (13,174) $ (247,857) $ 34,907
=============== ============== ============ ===========
NET EARNINGS (LOSS) PER SHARE - basic and diluted $ (0.02) $ (0.01) $ (0.05) $ 0.03
=============== ============== ============ ===========
WEIGHTED AVERAGE SHARES OUTSTANDING 8,230,589 1,217,678 4,724,133 1,217,678
=============== ============== ============ ===========
</TABLE>
See notes to financial statements.
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CROWN JEWEL RESOURCES CORP. AND SUBSIDIARY
(FORMERLY "ABF ENERGY CORP.")
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
------------------------------
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) ...................... $(220,039) $ 34,907
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation .................... 4,692 --
Common stock issued for services. 208,000 --
Changes in liabilities:
Increase in accounts payable ......... 115 (245)
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CASH PROVIDED BY (USED IN) OPERATIONS ......... (7,232) 34,662
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in marketable securities ........ 34,190 --
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34,190 --
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CASH FLOWS FROM FINANCIAL ACTIVITIES:
Increase in loan receivable .............. (1,000)
Payment of loan payable .................. (2,937) --
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NET CASH FLOWS USED IN FINANCING ACTIVITIES (3,937) --
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NET INCREASE IN CASH .......................... 23,021 34,662
CASH - BEGINNING OF PERIOD .................... 7,242 55,395
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CASH - END OF PERIOD .......................... $ 30,263 $ 90,057
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest $ 707 $ --
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Non-cash investing and financing activities:
Acquisition of assets for common stock $ 5,100,000 $ --
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See notes to financial statements.
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CROWN JEWEL RESOURCES CORP. AND SUBSIDIARY
(FORMERLY "ABF ENERGY CORP. AND SUBSIDIARY")
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements
of Crown Jewel Resources Corp., formerly ABF Energy Corp., (the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-QSB and Article 10 of Regulation S-X.
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 six month period ended June 30, 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 thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999.
2. ACQUISITON
On June 8, 2000, the Company acquired certain assets from Park
Vanguard LLC ("Park") for 20,000,000 shares of the Company's common
stock. These assets were recorded at the historical cost basis of Park.
The following table summarizes the assets acquired:
Purchase option on building $ 1,100,000
Machinery and equipment 2,000,000
Covenant not to compete 250,000
Customer list 250,000
Technology rights 1,500,000
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Total assets acquired $ 5,100,000
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3. STOCKHOLDERS' EQUITY
On May 3, 2000, the Company retired 157,882 shares of common
stock, of these shares 155,840 were held in treasury. The remaining
shares were surrendered pursuant to a loan agreement between a
shareholder and the Company which was written off by the Company in a
prior year.
On May 12, 2000, the Company issued 96,000 shares of its
common stock to an officer for services rendered. The Company valued
these shares at $0.255 and recorded $24,000 of compensation expense.
On May 23, 2000, the Company declared a 1:125 reverse stock
split. All periods presented have been retroactively restated to five
effect to this reverse stock split.
On May 24, 2000, the Company issued 525,000 shares of its
common stock to an officer for services rendered. The Company valued
these shares at $0.255 and recorded $134,000 of compensation expense.
On June 8, 2000, the Company issued 20,000,000 shares for
assets acquired (see note 2). The shares were valued at the historical
cost of the assets acquired.
On June 8, 2000, the Company issued a warrant granting the
holder the right to purchase 5,000,000 shares of common stock at a per
share price of $0.1875. The warrant is exercisable at any time and
expires on or before December 31, 2003. In connection with the issuance
of this warrant the Company has recorded $50,000 of compensation
expense.
On June 14, 2000, the Company issued 1,275,000 shares of its
common stock to consultants for services renderd. The Company valued
these shares at $0.255 and included $325,000 in intangible assets.
4. COMMITMENTS
On June 8, 2000 the Company entered into a five year
employment agreement with an executive. The agreement has a base salary
of $80,000 for the first year, with a potential increase at the end of
the first year to $100,000 based on certain performance objectives.
Additionally, the executive earns a $25,000 bonus within fourteen days
upon signing the agreement and can earn bonuses based on the pre-tax
earnings of the Company.
Additionally, on June 8, 2000, the Company entered into a five
year employment agreement with a second executive. The agreement has a
base salary of $120,000 for the duration of the agreement. The
executive can also earn bonuses based on the pre-tax earnings of the
Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
On June 8, 2000, the Company acquired certain operating and technological assets
relating to the production of diamonds and jewelry. As of June 30, 2000, the
Company had not yet commenced operations in this new field. The Company's
operations during the six months ended June 30, 2000 consisted solely of
collecting minimum royalty payments due to the Company through the Company's
subsidiary ABF Capital Corp. Royalty income for the six and three months ended
June 30, 2000 were $38,144 and $35,000, respectively, compared to $93,533 and
$6,892 for the six and three months ended June 30, 1999. General and operating
expenses of the Company totaled $50,286 and $29,845 for the six and three months
ended June 30, 2000 and $58,626 and $20,066 for the six and three months ended
June 30, 1999. During the three months ended June 30, 2000, the Company recorded
non-cash compensation of $208,000 and an unrealized loss on investments of
$27,818. As a result, the Company reported net losses of $247,857 and $230,906
for the six and three months ended June 30, 2000 compared to net income of
$34,907 and net loss of $13,174 for the six and three months ended June 30,
1999.
Liquidity and Capital Resources
The Company, at June 30, 2000, had $5,520,000 in assets. Liabilities consisting
of certain accrued expenses totaled $33,364.
Inflation
Inflation has not been a major factor in the Company's business since inception.
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PART II - Other Information
Item 6. Exhibit and Reports on form 8-K
A. Exhibits
None.
B. Report on Form 8-K
Filed on June 19, 2000.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CROWN JEWEL RESOURCES CORP.
By: /s/ Marc A. Palazzo Dated: 08/11/00
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Marc A. Palazzo
President
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