SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended June 30, 1996 Commission file number 0-16734
C.E.C. INDUSTRIES CORP.
(Exact name of registrant as specified in its charter)
Nevada 87-0217252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23 Cactus Garden Drive., F-60
Henderson, Nevada 89014
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 893-4747
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 _____
As of June 30, 1996, there were 16,431,795 shares of common stock outstanding.
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of June 30, 1996 and
March 31, 1996 3
Statement of Income for the three months
ended June 30, 1996 and 1995 4
Statement of Cash Flows for the three months ended
June 30, 1996 and 1995 5-6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults by the Company upon its
Senior Securities 9
Item 4. Submission of Matter to a Vote of
Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports of Form 8-K 9
SIGNATURES 10
Page Two
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
C.E.C. INDUSTRIES CORP.
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, March 31,
1996 1996
CURRENT ASSETS $ 204,117 $ 1,292,156
PROPERTY, PLANT AND EQUIPMENT: 33,184 59,265
INVESTMENT IN UNDEVELOPED REAL ESTATE 2,628,161 4,157,528
OTHER ASSETS: 6,101,147 5,606,699
---------- -----------
TOTAL ASSETS $8,965,609 $11,115,648
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, March 31,
1996 1995
ACCOUNTS PAYABLE $ 126,030 $ 441,945
NOTES PAYABLE 1,680,623 3,305,529
LINE OF CREDIT 0 500,000
OTHER CURRENT LIABILITIES 544,830 429,139
SHAREHOLDER'S EQUITY 6,614,126 6,439,035
---------- ----------
TOTAL LIABILITIES AND EQUITY $8,965,609 $11,115,648
========== ===========
Prepared Without Audit
Page three
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C.E.C. INDUSTRIES CORP.
CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED
JUNE 30,
1996 1995
Income - Royalty Income $ 54,817
Sales $ 970,723 154,042
----------- ---------
$ 970,723 $ 208,859
Cost of Sales 1,016,872 564
---------- ---------
Gross Profit $ (46,149) $ 208,295
Selling, General and
Administrative Expenses $ 247,839 $ 955,537
Other Income and Expenses
Interest Expense 20,700 13,339
Other Income 1,140
Interest Expense (308,785) (76,751)
Loss on Disposal of Subsidiary (20,000)
----------- -----------
$ 308,085 $ (62,272)
Net Income (loss) before Income Taxes $ (602,073) (809,514)
============ ==========
Provision for Income Taxes $ 0 $ 0
------------ ------------
Net Income (Loss) $ (602,073) $(809,514)
=========== ============
Earnings (Loss) Per Share $ (.038) $ (.29)
============= ============
Dividend Per Share $ 0 $ 0
Sale of Unregistered Securities NONE NONE
Prepared Without Audit
Page Four
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<TABLE>
<CAPTION>
C.E.C. INDUSTRIES CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIODS INDICATED
Three Months Three MonthS
Ended Ended
6/30/96 6/30/95
<S> <C> <C>
Increase (decrease) in cash and cash equivalents:
Cash flows from operating activities:
Net loss from continuing operations $(602,073) $(809,514)
Adjustments to reconcile and income to net
cash provided by operating activities:
Depreciation, Depletion and Amortization 2,262 2,700
Sources (uses) of cash due to change in current
assets and current liabilities:
(Increase) decrease in accounts receivable 534,869 (64,686)
(Increase) in inventory (52,640)
(Gain) Loss on Investments 20,000
Decrease in Restricted Cash 500,000
Decrease in other current assets 32,667 11,218
Increase (decrease) in accounts payable (222,082) 32,797
Decrease in Bank overdraft (28,257)
Increase (decrease) in accrued liabilities (263,755) (80,873)
Increase in Payroll Taxes (65,576)
Common stock issued for professional fees,
salaries and directors fees 204,120 643,666
---------- ----------
Total adjustments $714,248 $ 492,182
---------- ----------
Net cash provided by operating activities 112,175 $(317,332)
----------
Cash flows from investing activities:
Purchase of undeveloped land (300,000)
Sale of Land $ 1,554,185
Net Assets-Subsidiary 105,674
Note Receivable - Related Party (230,979)
Capital expenditures (910)
Net cash provided by investing 1,428,880
activities $(300,910)
Cash flow from financing activities
Proceeds from notes payable 443,484
Payment on debts (1,920,524) (100,000)
Proceeds From Notes Payable 175,064
Proceeds From Sale of Common Stock 204,120
Common stock issued for real estate 300,000
Common stock issued for payable 49,810
---------- ----------
Net Cash Provided by financing Activities (1,541,340)
</TABLE>
Prepared Without Audit
Page Five
<PAGE>
<TABLE>
C.E.C. INDUSTRIES CORP.
STATEMENT OF CASH FLOWS
FOR THE PERIODS INDICATED
<CAPTION>
<S> <C> <C>
Net increase (decrease) in cash and
cash equivalents (285) $75,052
----------
Cash and cash equivalents at beginning
of period 3,276 $1,027,464
----------
Cash and cash equivalents at end of period $2,991 $1,102,516
========== ==========
Supplemental Disclosures of Cash
Flow Information
Cash Paid During the Year for Interest $143,401
========
Income Taxes $ 0
==========
</TABLE>
Supplemental Schedule of Non-Cash Investing and financing activities
During the quarter ended June 30, 1996, the Company issued 652,000 shares of
common stock on Form S-8 for professional services. The shares were valued
at $204,120.
On June 15, 1996, the Company purchased Auto Express, Inc. in exchange for
495,000 shares of common stock, for a total value of $173,250.
On June 21, 1995, the Company purchased $100,000 in phone cards from One
World Communications, Inc. in exchange for 200,000 shares of common stock,
for a total value of $100,000.
Prepared Without Audit
Page Six
<PAGE>
C.E.C. INDUSTRIES CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have
been prepared in accordance with Form 10-Q instructions and in the
opinion of management contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position as of June 30, 1996, the results of operation for the three
months ended June 30, 1996 and 1995 and the cash flows for the three
months ended June 30, 1996 and 1995. These results have been
determined on the basis of generally accepted accounting principles
and practices and applied consistently with those used in the
preparation of the Company's 1995 Annual Report on Form 10-K.
Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that the accompanying consolidated financial statement be read in
conjunction with the financial statements and notes thereto
incorporated by reference in the Company's 1995 Annual Report on Form
10-K.
Page Seven
<PAGE>
C.E.C. INDUSTRIES CORP.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Sales for the quarter ended June 30, 1996 were $970,723 compared to
sales for the quarter ended June 30, 1995 of $208,859. Sales in 1996
consisted of revenues from the sale of the company's real estate
properties.
The Company depended on short term financing for its operating
expenses during the first quarter. The company issued 652,000 shares
of common stock on Form S-8 for professional services. The shares
were valued at $204,120. Selling, General and Administrative
Expenses decreased from $955,537 in 1995 to $247,938 in 1996 due to
decreases in Officers and Directors compensations during the first
quarter. Interest expenses increased from $76,751 in 1995 to
$308,785 in 1996 due to accrued interest that was paid in the first
quarter.
The plans to spin-off the Company's subsidiary, Custom Environmental
International (CEI) was not completed by the previous management.
The situation is being reviewed by current management. The operating
reports for CEI are included in the preceding financial.
To streamline operations, the Company divested itself of all
management and ownership interest in Moonridge Development Corp. The
Company maintains its 24.5% interest in the Victory Village III, Ltd.,
project of 320 apartment units in Henderson, Nevada.
In June, the company's wholly owned subsidiary, Mid-Nevada Art, Inc.,
exchanged 31 of it's original artworks for $3.5 Million dollars of
pre-paid telephone cards. This, however, was not reflected in the
preceding financial as Mid-Nevada Art is on a December 31st fiscal year
end. The sale will be reflected in the Company's second quarter
consolidated financial.
In June, the Company purchased 100% of the issued and outstanding of
Auto Express, Inc. for 495,000 shares of common stock valued at $173,250.
The preceding financial statements do not include the operating figures for
Auto Express as it is on a fiscal year end of December 31st. The operating
figures will be reflected in the Company's second quarter consolidated
financial.
Page Eight
<PAGE>
C.E.C. INDUSTRIES CORP.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults by the company upon its Senior Securities
None
Item 4. Submission of Matter to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports of Form 8-K
A Form 8-K was filed on June 15th, 1996, to report changes in control
of the company with new officers and directors. Also reported was
the change in the company's certified account from Deloitte & Touche
LLP to William L. Clancy, CPA. Also reported was the resignation of
Charles McHaffie as a director of the Company.
A Form 8-K was filed on June 15, 1996, to report the acquisition of
Auto Express by the company.
A Form 8-K was filed on June 27th, 1996, to report the Exchange
Agreement between Mid-Nevada Art, Inc., a wholly owed subsidiary of
the company, and One Wold Cards. Also reported
Page Nine
<PAGE>
C.E.C. INDUSTRIES CORP.
SIGNATURES
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, thereunto duly authorized.
C.E.C. INDUSTRIES CORP.
(Registrant)
By /s/Gerald H. Levine By /s/Marie A. Levine
Gerald H. Levine Marie A. Levine
President and Principal Financial and
Chief Operations Officer Accounting Officer
Date: 08/12/96 Date: 08/12/96
Page Ten
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,991
<SECURITIES> 0
<RECEIVABLES> 8,697
<ALLOWANCES> 0
<INVENTORY> 181,199
<CURRENT-ASSETS> 215,347
<PP&E> 117,410
<DEPRECIATION> (84,226)
<TOTAL-ASSETS> 8,965,609
<CURRENT-LIABILITIES> 2,351,483
<BONDS> 0
<COMMON> 850,940
0
13,063
<OTHER-SE> 5,750,123
<TOTAL-LIABILITY-AND-EQUITY> 8,965,609
<SALES> 970,723
<TOTAL-REVENUES> 970,723
<CGS> 1,016,872
<TOTAL-COSTS> 1,016,872
<OTHER-EXPENSES> 247,839
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 308,785
<INCOME-PRETAX> (602,073)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (602,073)
<EPS-PRIMARY> (.038)
<EPS-DILUTED> 0
</TABLE>
