<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 For the quarterly period ended June 30, 1998
{ } Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 03-13615
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 August 7,
1998.
Transitional Small Business Disclosure Format:
/X/ Yes / / No
<PAGE> 2
CELLCOM CORP. AND SUBSIDIARIES
FORM 10-QSB INDEX
PAGE #
PART I- FINANCIAL INFORMATION
Condensed Consolidated Balance Sheets as of
June 30, 1998 (Unaudited) and September 30, 1997......... 3
Condensed Consolidated Statements of Operations for
the Three Months Ended June 30, 1998 and 1997
(Unaudited).............................................. 4
Condensed Consolidated Statements of Operations for
the Nine Months Ended June 30, 1998 and 1997
(Unaudited).............................................. 5
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended June 30, 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
2
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 (UNAUDITED) AND SEPTEMBER 30, 1997
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
06/30/98 09/30/97
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 20 $ 11
Accounts receivable 2 3
Prepaid expenses 1 0
-------- --------
TOTAL CURRENT ASSETS $ 23 $ 14
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 2 23
Taxes payable 53 53
-------- --------
TOTAL CURRENT LIABILITIES 55 76
-------- --------
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 (11,094) (11,063)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (32) (62)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 23 $ 14
======== ========
</TABLE>
SEE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED)
(Dollar amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended,
June 30,
----------------------------------
1998 1997
------------ ------------
<S> <C> <C>
CONTINUING OPERATIONS
General and administrative $ 9 $ 13
Interest income (0) 0
------------ ------------
NET LOSS $ (9) $ (13)
============ ============
INCOME (LOSS) PER SHARE:
NET LOSS PER SHARE (1) $ .00 $ .00
============ ============
WEIGHTED AVERAGE NUMBER
OF SHARES: 15,625,272 11,558,605
============ ============
</TABLE>
(1) - Less than $.01 per share.
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED)
(Dollar amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended,
June 30,
----------------------------------
1998 1997
------------ ------------
<S> <C> <C>
CONTINUING OPERATIONS
General and administrative $ 31 $ 58
Interest income 0 (2)
------------ ------------
NET LOSS $ (31) $ (56)
============ ============
INCOME (LOSS) PER SHARE:
NET LOSS PER SHARE (1) $ .00 $ .00
============ ============
WEIGHTED AVERAGE NUMBER
OF SHARES: 15,625,272 11,558,605
============ ============
</TABLE>
(1) - Less than $.01 per share.
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1998 AND 1997 (UNAUDITED)
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Nine Months Ended,
June 30,
-------------------
1998 1997
---- -----
<S> <C> <C>
CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net income (loss) $(31) $ (56)
Adjustments to reconcile net income
(loss) to net cash used for operating
activities:
Change in operating assets and liabilities:
Decrease in accounts receivable 1 (26)
Decrease (Increase) in prepaid assets (1) 2
Decrease (Increase) in accounts payable (21) (17)
---- -----
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES (52) (97)
---- -----
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 61 0
---- -----
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 9 (97)
---- -----
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 11 128
---- -----
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 20 $ 31
==== =====
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
INTEREST INCOME $ 0 $ 0
==== =====
INCOME TAXES PAID $ 0 $ 0
==== =====
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE> 7
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 June 30, 1998 and for the three months and
nine months ended June 30, 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
<PAGE> 8
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
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
<PAGE> 9
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
The Company had no operating revenues for the three month period ended
June 30, 1998 or 1997.
The Company incurred general and administrative expenses of $9,000 and
$13,000 during the three month period ended June 30, 1998 and 1997,
respectively. The Company continues to incur administrative expenses
even though it has no operations.
NINE MONTHS ENDED JUNE 30, 1998 AND 1997
The Company had no operating revenues for the nine month periods ended
June 30, 1998 or 1997.
The Company incurred general and administrative expenses of $31,000 and
$58,000 during the nine month period ended June 30, 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
<PAGE> 10
CELLCOM CORP. AND SUBSIDIARIES
SIGNATURES
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: August 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)
Exhibit Index
Exhibit Description
27.1 Financial Data Schedule
10
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 20
<SECURITIES> 0
<RECEIVABLES> 3
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 23
<CURRENT-LIABILITIES> 55
<BONDS> 0
0
0
<COMMON> 16
<OTHER-SE> (48)
<TOTAL-LIABILITY-AND-EQUITY> 23
<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>
