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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 For the quarterly period ended March 31, 1998
{ } Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 0-13615
CELLCOM CORP.
(Exact name of Small Business Issuer 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)
(702) 474-9920
(Issuer's telephone number, Including area code)
Check whether the Issuer: (1) has filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter 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
Check whether issuer has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court.
X Yes No
The issuer had 15,625,272 shares of Common Stock outstanding as of May 7, 1998.
Transitional Small Business Disclosure Format:
X Yes No
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CELLCOM CORP. AND SUBSIDIARIES
FORM 10-QSB INDEX
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PART I- FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets as of
March 31, 1998 (Unaudited) and September 30, 1997........ 3
Condensed Consolidated Statements of Operations for
the Three Months Ended March 31, 1998 and 1997
(Unaudited).............................................. 4
Condensed Consolidated Statements of Operations for
the Six Months Ended March 31, 1998 and 1997
(Unaudited).............................................. 5
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended March 31, 1998 and 1997 (Unaudited)..... 6
Notes to the Condensed Consolidated Financial
Statements (Unaudited)................................... 7
Management's Discussion and Analysis .................... 8
PART II- OTHER INFORMATION
Exhibits and Reports on Form 8-K......................... 9
Signatures............................................... 10
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
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CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 (UNAUDITED) AND SEPTEMBER 30, 1997
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(Dollar amounts in thousands)
03/31/98 09/30/97
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ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 31 $ 11
Accounts receivable 1 3
Prepaid expenses 1 0
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TOTAL CURRENT ASSETS $ 33 $ 14
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 3 23
Taxes payable 53 53
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TOTAL CURRENT LIABILITIES 56 76
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
100,000,000 shares authorized
and 15,625,272 shares issued
and outstanding 16 12
Additional paid-in capital 11,046 10,989
Accumulated deficit (11,085) (11,063)
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TOTAL STOCKHOLDERS' EQUITY (23) (62)
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 33 $ 14
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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, 1998 AND 1997 (UNAUDITED)
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(Dollar amounts in thousands except per share amounts)
Three Months Ended,
March 31,
---------------------------------
1998 1997
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CONTINUING OPERATIONS
General and administrative $ 9 $ 22
Interest income 0 (1)
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NET LOSS $ (9) $ (21)
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INCOME (LOSS) PER SHARE:
NET LOSS PER SHARE (1) $ .00 $ .00
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WEIGHTED AVERAGE NUMBER
OF SHARES: 15,625,272 11,558,605
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(1) - Less than $.01 per share.
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
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<TABLE>
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CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED)
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(Dollar amounts in thousands except per share amounts)
Six Months Ended,
March 31,
---------------------------------
1998 1997
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CONTINUING OPERATIONS
General and administrative $ 22 $ 45
Interest income 0 (2)
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NET LOSS $ (22) $ (43)
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INCOME (LOSS) PER SHARE:
NET LOSS PER SHARE (1) $ .00 $ .00
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WEIGHTED AVERAGE NUMBER
OF SHARES: 15,625,272 11,558,605
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(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, 1998 AND 1997 (UNAUDITED)
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(Dollar amounts in thousands)
Six Months Ended,
March 31,
---------------------------------
1998 1997
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CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net income (loss) $ (22) $ (43)
Adjustments to reconcile net income
(loss) to net cash used for operating
activities:
Change in operating assets and liabilities:
Decrease in accounts receivable 2 0
Increase in prepaid assets (1) (1)
Decrease in accounts payable (20) (15)
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NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES (41) (59)
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NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 61 0
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NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 20 (59)
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CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 11 128
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CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 31 $ 69
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
INTEREST INCOME $ 0 $ 1
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INCOME TAXES PAID $ 0 $ 0
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SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6
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CELLCOM CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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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, 1998 and for the three months
and six months ended March 31, 1998 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.
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 for tax
and accounting purposes 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 distributions have been
distributed among the unsecured creditors and the Company.
7
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The Company has no operations. It is principally engaged in
controlling its assets (principally cash) and administering its
liabilities. 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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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. In January 1998, a stock sale was transacted which
provided $61,000 in cash resources and additional funding will be
obtained as needed from the same source. For additional information on
this transaction, please see footnote 6 in the September 30, 1997
10-KSB.
The Company has a net operating loss carryforward ("NOL") of
approximately $9.6 million for both financial reporting and income tax
purposes which will begin to expire in 1999 through 2007. 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.
8
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RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1997
The Company had no operating revenues for the three month period ended
March 31, 1998 or 1997.
The Company incurred general and administrative expenses of $9,000 and
$21,000 during the three month period ended March 31, 1998 and 1997,
respectively. The Company continues to incur administrative expenses
even though it has no operations.
SIX MONTHS ENDED MARCH 31, 1998 AND 1997
The Company had no operating revenues for the six month periods ended
March 31, 1998 or 1997.
The Company incurred general and administrative expenses of $22,000
and $45,000 during the six month period ended March 31, 1998 and 1997,
respectively. The Company continues to incur administrative expenses
even though it has no operations.
PART II. - OTHER INFORMATION
Item 6. - Exhibits and reports on Form 8-K.
A. Exhibits
27.1 - Financial Data Schedule
B. Reports on Form 8-k.
None.
9
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CELLCOM CORP. AND SUBSIDIARIES
SIGNATURES
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In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: May 14, 1998
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)
10
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Exhibit Index
Exhibit Description
27.1 Financial Data Schedule
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 31
<SECURITIES> 0
<RECEIVABLES> 2
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33
<CURRENT-LIABILITIES> 56
<BONDS> 0
0
0
<COMMON> 16
<OTHER-SE> (39)
<TOTAL-LIABILITY-AND-EQUITY> 33
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 9
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
