<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
{X} Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended December 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)
<TABLE>
<S> <C>
Delaware 06-1106964
- -------------------------------- -----------------------------------
(State of Incorporation) (IRS Employer ID Number)
</TABLE>
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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING 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 March 17,
1999.
Transitional Small Business Disclosure Format:
X Yes No
------ --------
<PAGE> 2
CELLCOM CORP. AND SUBSIDIARIES
FORM 10-QSB INDEX
================================================================================
<TABLE>
<CAPTION>
PAGE #
--------
<S> <C>
PART I- FINANCIAL INFORMATION
---------------------
Condensed Consolidated Balance Sheets as of
December 31, 1998 (Unaudited) and September 30, 1998....... 3
Condensed Consolidated Statements of Operations for
the Three Months Ended December 31, 1998 and 1997
(Unaudited)................................................ 4
Condensed Consolidated Statements of Cash Flows for the
Three Months Ended December 31, 1998 and 1997 (Unaudited).. 5
Notes to the Condensed Consolidated Financial
Statements (Unaudited)..................................... 6
Management's Discussion and Analysis ...................... 8
PART II- OTHER INFORMATION
-----------------
Exhibits and Reports on Form 8-K........................... 9
Signatures................................................. 10
</TABLE>
2
<PAGE> 3
CELLCOM CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 (UNAUDITED) AND SEPTEMBER 30, 1998
================================================================================
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
12/31/98 09/30/98
---------- ---------
<S> <C> <C>
ASSETS
- ------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 8 $ 11
Accounts receivable 1 4
Prepaid expenses 1 1
---------- ---------
TOTAL CURRENT ASSETS $ 10 $ 16
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable 18 16
Taxes payable 53 53
---------- ---------
TOTAL CURRENT LIABILITIES 71 69
---------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
100,000,000 shares authorized
and 15,625,272 shares issued
and outstanding 15 15
Additional paid-in capital 11,046 11,046
Accumulated deficit (11,122) (11,114)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY (61) (53)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 10 $ 16
========== =========
</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 DECEMBER 31, 1998 AND 1997 (UNAUDITED)
================================================================================
(Dollar amounts in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended,
December 31,
------------------------------
1998 1997
----------- ----------
<S> <C> <C>
CONTINUING OPERATIONS
General and administrative $ 8 $ 13
Interest income 0 0
----------- -----------
NET LOSS $ (8) $ (13)
=========== ===========
INCOME <LOSS> PER SHARE:
NET LOSS PER SHARE $ .00 (1) $ 00(1)
=========== ===========
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 CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1998 AND 1997 (UNAUDITED)
================================================================================
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Three Months Ended,
December 31,
---------------------------------
1998 1997
----------- ---------
<S> <C> <C>
CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net income (loss) $ (8) $ (13)
Adjustments to reconcile net income
(loss) to net cash used for operating
activities:
Change in operating assets
and liabilities:
Decrease (Increase) in accounts receivable 3 (1)
Increase in prepaid assets 0 (1)
Increase (Decrease) in accounts payable 2 8
----------- -----------
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES (3) (7)
----------- -----------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD 11 11
----------- -----------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 8 $ 4
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
INTEREST INCOME $ 0 $ 0
=========== ===========
INCOME TAXES PAID $ 0 $ 0
=========== ===========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
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 December 31, 1998 and for the three months
ended December 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.
6
<PAGE> 7
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.
7
<PAGE> 8
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
As of December 31, 1998, the Company did not have sufficient cash to pay
its current and anticipated operating expenses for the current fiscal year.
In January 1998, a stock sale was transacted which provided $61,000 in cash
resources and additional funding may 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. 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 DECEMBER 31, 1998 AND 1997
The Company had no operating revenues for the three month period ended
December 31, 1998 or 1997. The Company incurred general and administrative
expenses of $8,000 and $13,000 during the three month period ended December
31, 1998 and 1997, respectively. The Company continues to incur
administrative expenses even though it has no operations.
8
<PAGE> 9
PART II. - OTHER INFORMATION
Item 6. - Exhibits and reports on Form 8-K.
None.
9
<PAGE> 10
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: March 17, 1999
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
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 8
<SECURITIES> 0
<RECEIVABLES> 2
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10
<CURRENT-LIABILITIES> 71
<BONDS> 0
0
0
<COMMON> 15
<OTHER-SE> (76)
<TOTAL-LIABILITY-AND-EQUITY> 10
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 8
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8)
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
