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, 1997 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, 1997, there were 17,736,795 shares of common stock outstanding.
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of June 30, 1997 and
March 31, 1997 3-4
Statement of Income for the three months
ended June 30, 1997 and 1996 5
Statement of Cash Flows for the three months ended
June 30, 1997 and 1996 6-7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults by the Company upon its
Senior Securities 10
Item 4. Submission of Matter to a Vote of
Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports of Form 8-K 10
SIGNATURES 11
Page Two
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
C.E.C. INDUSTRIES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND MARCH 31, 1997
ASSETS
JUNE 30, MARCH 31,
1997 1997
Current Assets
Cash and Cash Equivalents $1,843 $786
Inventory 181,199 181,199
Trading Securities at Market Value
(Cost at June 30, 1997 and
March 31, 1997 $2,656,656) 1,256,616 2,910,480
--------- ---------
Total Current Assets 1,439,658 3,092,465
Other Assets
Security Deposits 4,012 4,012
Accounts Receivable - Related
Parties 220,635 220,635
Notes Receivable - Related
Parties 163,000 163,000
Accrued Interest Receivable -
Related Parties 14,733 11,473
Patents, at Cost (Net of
Accumulated Amortization
of $2,375 and $9,500) 89,821 92,196
Investment - Limited
Partnership 300,000 300,000
Artworks 1,747,199 1,747,199
Coal Reserves 800,000 800,000
Oil and Gas Interests 1,231,250 1,231,250
--------- ---------
Total Other Assets 4,570,650 4,569,765
--------- ---------
Total Assets $6,010,308 $7,662,230
========== ==========
Prepared without Audit
Page Three
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CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 AND MARCH 31, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
JUNE 30, MARCH 31,
1997 1997
Current Liabilities
Accounts Payable $325,513 $239,919
Notes Payable - Related Parties 378,781 378,781
------- -------
Total Current Liabilities 704,294 618,700
Stockholders' Equity
Convertible Preferred Stock,
Par Value $.001 Per Share,
Authorized 100,000,000
Shares, Issued and Outstanding
10,663,041 Shares at June 30, 1997
and March 31, 1997 10,663 10,663
Common Stock, Par Value $.05 Per
Share, Authorized 50,000,000
shares; Issued and Outstanding,
17,736,795 Shares at June 30,
1997 and March 31, 1997 886,840 886,840
Paid In Capital 8,572,104 8,572,104
Retained Earnings - A Deficit (4,163,593) (2,426,077)
---------- ----------
Total Stockholders' Equity 5,306,014 7,043,530
--------- ---------
Total Liabilities and
Stockholders' Equity $ 6,010,308 $ 7,662,230
=========== ===========
Prepared without Audit
Page Four
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CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTER ENDED JUNE 30, 1997 AND 1996
1997 1996
Income
Sales $0 $970,723
Royalty Income 1,380 0
----- --------
Total Income 1,380 970,723
Cost of Sales 380 1,016,872
----- ---------
Gross Profit 1,000 (46,149)
Selling, General and
Administrative Expenses 78,251 247,839
Other Income (Expense)
Interest Income 3,260 20,700
Temporary Decrease in
Marketable Securities (1,650,604) 0
Interest Expense 7,286 308,785
Loss on Disposal of Subsidiary 0 (20,000)
---------- -------
(Loss) Before Income Taxes (1,737,516) (602,073)
Provision for Income Taxes 0 0
----------- ---------
Net (Loss) $(1,737,516) $(602,073)
=========== =========
Loss Per Common and Common Share
Equivalent:
Net (Loss) $(.10) $(.03)
===== =====
Prepared Without Audit
Page Five
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C.E.C. INDUSTRIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTER ENDED JUNE 30, 1997 AND 1996
1997 1996
Cash Flows From Operating Activities
Net Loss $(1,737,516) $ (602,073)
Temporary Decrease in Trading
Securities 1,653,864 0
Adjustments to Reconcile Net
Loss to Net Cash Used In
Operating Activities
Depreciation and Amortization 2,375 2,262
(Gain) Loss on Investments 0 20,000
Common Stock Issued for
Professional Services 0 204,120
Changes in Assets and Liabilities
Decrease in Restricted Cash 0 500,000
Decrease in Accounts Receivable 0 534,869
(Increase) Decrease in Inventory 0 1,554,185
(Increase) Decrease in Other Assets (3,260) 32,667
Increase (Decrease) in Accounts Payable 85,594 (222,082)
Decrease in Bank Overdraft 0 (28,257)
Increase in Payroll Taxes 0 (65,576)
Decrease in Accrued Liabilities 0 (263,755)
Total Adjustments 1,738,573 714,248
--------- -------
Net Cash Provided By Operating Activities 1,057 2,268,433
Cash Flows From Investing Activities
Net Assets-Subsidiary 0 105,674
Note Receivable - Related Party 0 (230,979)
---- --------
Net Cash Used in Investing Activities 0 (125,305)
Cash Flows From Financing Activities
Principal Payments on Debt 0 (1,920,524)
Proceeds From Sale of Common Stock 0 204,120
Proceeds From Notes Payable 0 175,064
---- -------
Net Cash Provided By
Financing Activities 0 (1,541,340)
---- ----------
Net Increase (Decrease) in Cash and
Cash Equivalents 1,057 (285)
Cash and Cash Equivalents at Beginning of Year 786 3,276
Cash and Cash Equivalents at End of Year $1,843 $2,991
====== ======
Prepared without Audit
Page Six
<PAGE>
C.E.C. INDUSTRIES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE QUARTER ENDED JUNE 30, 1997 AND 1996
Supplemental Disclosures of Cash
Flow Information
Cash Paid During the Year
For Interest $7,286 $143,401
====== ========
Income Taxes $0 $0
====== =========
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, 1996, the Company purchased $70,000 in phone cards from One
World Communications, Inc. in exchange for 200,000 shares of common stock,
for a total value of $70,000.
Prepared without Audit
Page Seven
<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, 1997, the results of operation for the three months ended June 30,
1997 and 1996 and the cash flows for the three months ended June 30, 1997 and
1996. 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 1997 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 1997 Annual Report on Form 10-K.
Page Eight
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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, 1997 were $1,380 compared to
sales for the quarter ended June 30, 1996 of $970,723. Sales in 1997
consisted of revenues from oil royalties.
The Company depended on short term financing for its operating
expenses during the first quarter. 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. Selling, General and
Administrative Expenses decreased from $247,839 in 1996 to $78,251 in 1997
due to a decrease in consulting and legal expenses during the first quarter.
Interest expenses decreased from $308,757 in 1996 to $7,286 in 1997 due to
reduction in debt during the past year.
The decreases in trading securities was due to a temporary decrease
in the market value per share of securities held for sale.
Page Nine
<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
None
Page Ten
<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 Levine
Gerald H. Levine Marie A. Levine
President and Principal Financial and
Chief Operations Officer Accounting Officer
Date: August 25, 1997 Date: August 25, 1997
Page Eleven
<PAGE>
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