<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
/X/ Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
/ / Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarter ended March 31, 1995
Commission File Number 0-13615
CELLCOM CORP.
(Exact name of Registrant as specified in its charter)
Delaware 06-1106964
(State of Incorporation) (IRS Employer ID Number)
520 South Fourth Street, Las Vegas, Nevada 89101
(Address of principal executive offices, including zip code)
(702) 896-8898
(Registrant's telephone number, including area code)
Indicate by check mark whether Registrant (1) has filed all reports to be filed
by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding 12 months (or for such period that the Registrant was required to
file such report(s), and (2) has been subject to the filing requirements for at
least the past 90 days.
X Yes No
--- ---
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS FOR THE LAST FIVE YEARS
Indicate by check mark whether registrant has filed all documentation and
reports required to be filed by Section 12, 13 or 15(d) of the Securities and
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
X Yes No
--- ---
The registrant had 11,558,605 shares of Common Stock outstanding as of May 1,
1995.
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CELLCOM CORP. AND SUBSIDIARIES
FORM 10-QSB INDEX
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PAGE #
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PART I- FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets as of
March 31, 1995 (Unaudited) and September 30, 1994........ 3
Condensed Consolidated Statements of Operations for
the Three Months Ended March 31, 1995 and 1994
(Unaudited).............................................. 4
Condensed Consolidated Statements of Operations for
the Six Months Ended March 31, 1995 and 1994
(Unaudited).............................................. 5
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended March 31, 1995 and 1994 (Unaudited)..... 6
Notes to the Condensed Consolidated Financial
Statements (Unaudited)................................... 7
Management's Discussion and Analysis .................... 9
PART II- OTHER INFORMATION
Exhibits and Reports on Form 8-K......................... 10
Signatures............................................... 11
</TABLE>
2
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CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1995 (UNAUDITED) AND SEPTEMBER 30, 1994
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
03/31/95 09/30/94
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<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 319 $ 129
Accounts receivable 171 357
Prepaid expenses 2 3
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TOTAL CURRENT ASSETS $ 492 $ 489
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 3 30
Taxes payable 53 53
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TOTAL CURRENT LIABILITIES 56 83
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Liabilities subject to compromise 215 180
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TOTAL LIABILITIES 271 263
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
100,000,000 shares authorized
and 11,558,605 shares issued
and outstanding 12 12
Additional paid-in capital 10,989 10,989
Accumulated deficit (10,780) (10,775)
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TOTAL STOCKHOLDERS' EQUITY 221 226
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 492 $ 489
========== ===========
</TABLE>
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
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CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED)
(Dollar amounts in thousands except per share amounts)
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<CAPTION>
Three Months Ended,
March 31,
--------------------------------
1995 1994
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<S> <C> <C>
CONTINUING OPERATIONS
General and administrative $ 63 $ 42
Reorganization - professional fees 0 5
Interest income (70) (2)
Miscellaneous Income 0 (18)
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NET INCOME (LOSS) $ 7 $ (27)
=========== ===========
INCOME (LOSS) PER SHARE:
FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM $ .00 (1) $ .00
EXTRAORDINARY ITEM .00 .00
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NET INCOME (LOSS) PER SHARE $ .00 (1) $ .00
=========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES: 11,558,605 11,558,605
=========== ===========
</TABLE>
- - ---------------
(1) - Less than $.01 per share.
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
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CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED)
(Dollar amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended,
March 31,
--------------------------------
1995 1994
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<S> <C> <C>
CONTINUING OPERATIONS
General and administrative $ 89 $ 82
Reorganization - professional fees 6 46
Interest income (76) (7)
Miscellaneous Income (14) (18)
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LOSS FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM (5) (103)
EXTRAORDINARY GAIN
Gain from forgiveness of debts 0 5,306
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NET INCOME (LOSS) $ (5) $ 5,203
============ ===========
INCOME (LOSS) PER SHARE:
FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEM $ .00 (1) $ (.01)
EXTRAORDINARY ITEM .00 .46
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NET INCOME (LOSS) PER SHARE $ .00 (1) $ .45
============ ===========
WEIGHTED AVERAGE NUMBER
OF SHARES: 11,558,605 11,558,605
=========== ===========
</TABLE>
- - ---------------
(1) - Less than $.01 per share.
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
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CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1994 (UNAUDITED)
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Six Months Ended,
March 31,
-------------------------
1995 1994
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<S> <C> <C>
CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net income (loss) $ (5) $ 5,203
Adjustments to reconcile net income
(loss) to net cash used for operating
activities:
Extraordinary gain on forgiveness
of debt 0 (5,306)
Change in operating assets
and liabilities:
Decrease in restricted cash 0 146
Decrease in accounts receivable 186 462
Decrease in prepaid assets 1 2
Increase (Decrease) in accounts payable 8 (724)
Decrease in accrued expenses 0 (564)
Decrease in taxes payable 0 0
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NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES 190 (781)
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NET DECREASE IN CASH AND
CASH EQUIVALENTS 190 (781)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 129 927
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CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 319 $ 146
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
INTEREST INCOME $ 76 $ 7
========== ==========
INCOME TAXES PAID $ 0 $ 0
========== ==========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6
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CELLCOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The financial information included herein has been prepared pursuant
to Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code" ("SOP 90-7"). The
accompanying consolidated balance sheet distinguishes between
liabilities subject to compromise and liabilities not subject to
compromise pursuant to the Bankruptcy Code. The accompanying
consolidated financial statements of Cellcom Corp. and its
subsidiaries have been prepared on a going concern basis which
contemplates the realization of assets and the settlements of
liabilities and commitments in the ordinary course of business.
The financial information at March 31, 1995 and for the three months
and six months ended March 31, 1995 are unaudited and reflect all
adjustments (that include only normal recurring adjustments) which
are, in the opinion of Management, necessary for a fair presentation
of the financial position, results of operations and cash flows for
interim periods.
2. PETITION FOR RELIEF UNDER CHAPTER 11
On April 16, 1992, the Company filed voluntary petitions for relief
under Chapter 11 of the United States Bankruptcy Code (the
"Petitions") in the United States Bankruptcy Court of the Southern
District of New York (the "Court"). Under Chapter 11, certain claims
against the Company in existence prior to the filing of the Petitions
for relief under the federal bankruptcy laws were stayed while the
Company continued its business operations as debtor-in-possession.
These claims are reflected in the accompanying condensed consolidated
balance sheet for March 31, 1995 and September 30, 1994 as
"liabilities subject to compromise." Claims secured against the
Company's assets were stayed.
On August 20, 1993, the Company filed a Modified Consolidated Plan of
Reorganization (the "Plan") with the Court. The "Post Confirmation
Order" was dated and notice was given on October 7, 1993. The Plan
called for a consolidation of the Company and its subsidiaries and the
Company will continue to pursue collection of contingent assets.
Pursuant to the terms of the Plan, the Company has settled all
administrative, secured and priority claims. All funds remaining
after these collections will be distributed among the unsecured
creditors and the Company with the Company remaining responsible for
the collection expenses.
7
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The Company has no operations. It is principally engaged in
controlling its assets (principally cash) and administering its
liabilities and bankruptcy claims. The Company is in the process of
evaluating potential business opportunities which could be attained by
merger or acquisition. In Management's opinion, if the Company
embarks on a new business venture, no assurance can be given regarding
the future success of such a business due to all the attendant costs
and risks associated with starting or acquiring a new business.
8
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CELLCOM CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OVERVIEW
Prior to April 1992, Cellcom Corp. and its subsidiaries (the
"Company") experienced declining working capital, net operating
losses, negative cash flow and increased rate of customer
deactivations in certain markets. Consequently, Management and the
Board of Directors concluded that it was in the best interest of the
Company to seek protection from its creditors under the U.S.
Bankruptcy Code. Please see the accompanying footnote to the
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
The Company has sufficient cash to pay its current and anticipated
operating expenses. The Company has a net operating loss carryforward
("NOL") of approximately $9 million for both financial reporting and
income tax purposes. The Company expects to use this NOL to offset
earnings in potential business opportunities. If the Company embarks
on a new business venture, no assurance can be given regarding the
future success of such a business due to all the attendant costs and
risks associated with starting or acquiring a new business.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
The Company had no operating revenues for the three month period ended
March 31, 1995 or 1994. The Company realized miscellaneous income of
$0 and $18,000 during the three months ended March 31, 1994 and 1995,
respectively, resulting from the sale of minority interests in
cellular telephone companies and the receipt of refunds from taxing
authorities.
The Company incurred expenses of $0 and $5,000 during the three month
period ended March 31, 1995 and 1994, respectively, resulting
primarily from legal and other professional services rendered in
connection with ongoing bankruptcy matters. The Company incurred
general and administrative expenses of $63,000 and $42,000 during the
three month period ended March 31, 1995 and 1994, respectively. The
Company recorded a $34,000 expense for the additional amount due to
the creditors based on the increased contingent refunds from taxing
authorities during the three
9
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month period ended March 31, 1995. The Company continues to incur
administrative expenses even though it has no operations.
SIX MONTHS ENDED MARCH 31, 1995 AND 1994
The Company had no operating revenues for the six month periods ended
March 31, 1995 or 1994. The Company realized miscellaneous income of
$14,000 and $18,000 during the six months ended March 31, 1994 and
1995, respectively, resulting from the sale of minority interests in
cellular telephone companies and the receipt of refunds from taxing
authorities.
The Company incurred expenses of $6,000 and $46,000 during the six
month period ended March 31, 1995 and 1994, respectively, resulting
primarily from legal and other professional services rendered in
connection with ongoing bankruptcy matters. The Company incurred
general and administrative expenses of $89,000 and $82,000 during the
six month period ended March 31, 1995 and 1994, respectively. The
Company recorded a $34,000 expense for the additional amount due to
the creditors based on the increased contingent refunds from taxing
authorities during the six months ended March 31, 1995. The Company
continues to incur administrative expenses even though it has no
operations.
The Company recognized an extraordinary gain of $5,306,000 during the
six month period ended March 31, 1994, resulting from a bankruptcy
court ordered forgiveness of debts.
PART II. - OTHER INFORMATION
Item 6. - Exhibits and reports on Form 8-K.
None.
10
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CELLCOM CORP. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: May 10, 1995
Las Vegas, Nevada CELLCOM CORP.
By: /s/ Jay H. Brown
--------------------------------
Jay H. Brown President and Chief
Executive Officer (Principal
Executive Officer)
By: /s/ David A. Obal
--------------------------------
David A. Obal Chief Financial
Officer (Principal Financial
and Accounting Officer)
11
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EXHIBIT INDEX
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Exhibit 27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 329
<SECURITIES> 0
<RECEIVABLES> 171
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 492
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 492
<CURRENT-LIABILITIES> 271
<BONDS> 0
<COMMON> 12
0
0
<OTHER-SE> 209
<TOTAL-LIABILITY-AND-EQUITY> 492
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 95
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (90)
<INCOME-PRETAX> (5)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
