<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-188
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CEC Properties, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
California 13-1919940
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STATE OR OTHER JURISDICTION OF INCORPORATION IRS EMPLOYER
IDENTIFICATION NUMBER
1500 W. Balboa Blvd., Suite 201, Newport Beach, CA 92663
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ADDRESS OF PRINCIPAL EXECUTIVE OFFICES(ZIP CODE)
(714) 673-2282
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
N/A
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FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT
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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
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 subsequent to the distribution of securities under a plan confirmed by a
court. N/A
YES NO
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APPLICABLE ONLY CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. N/A
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CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
INDEX TO FORM 10-QSB
JULY 31, 1996
Part I - Financial Information
Item 1 - Financial Statements
Item 2 - Management's Discussion and Analysis of Operations
Part II - Other Information
Item 1 - Legal Proceedings
Item 2 - Changes in Securities
Item 3 - Defaults Upon Senior Securities
Item 4 - Submission of Matters to a Vote of Security Holders
Item 5 - Other Information
Item 6 - Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
Part I - Financial Information
ITEM 1 - FINANCIAL STATEMENTS
# Consolidated Balance Sheets
# Consolidated Income Statements
# Consolidated Statements of Cash Flow
# Notes to Consolidated Financial Statements
See attached exhibit
<PAGE> 4
CEC PROPERTIES, INC.
(a Delaware Corporation)
CONSOLIDATED BALANCE SHEETS
---------------------------
UNAUDITED
<TABLE>
<CAPTION>
Oct. 31, 1995 Jul. 31, 1996
------------- -------------
<S> <C> <C>
ASSETS
Investment properties (Note 1) $ 1,059,524 $ 1,080,447
Cash 37,019 (114)
Other 22,565 34,209
------------ ------------
1,119,108 1,114,542
============ ============
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities
Trust deeds payable 1,043,398 1,046,868
Due to shareholders 37,600 48,755
Other liabilities 13,419 10,011
------------ ------------
Total liabilities 1,094,417 1,105,634
Common stock 125,667 125,667
Additional paid in capital 23,297,402 23,297,402
Accumulated deficit (23,398,378) (23,398,378)
Stockholder's equity 24,691 8,908
------------ ------------
Total liabilities & stockholder's equity 1,119,108 1,114,542
============ ============
</TABLE>
<PAGE> 5
CONSOLIDATED INCOME STATEMENTS
------------------------------
UNAUDITED
For the periods ended
<TABLE>
<CAPTION>
7/31/95 7/31/96 7/31/95 7/31/96
------- ------- ------- -------
Three Months Three Months Nine Months Nine Months
<S> <C> <C> <C> <C>
REVENUES:
Rental income (Note 2) $5,550 $ 21,218 $5,550 $ 60,893
Misc. income -- -- -- 48,475
------------ ------------ ----------- ----------
Total income 5,550 21,218 5,550 109,368
EXPENSES:
General & administrative expenses 6,066 39,268 6,066 125,151
------------ ------------ ----------- ----------
NET INCOME $ (516) $(18,050) $ (516) $(15,783)
============ ============ =========== ==========
</TABLE>
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CEC PROPERTIES, INC.
(a Delaware Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOW
------------------------------------
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES: 7/31/95 7/31/96
------- -------
Net income $ (506) $(15,783)
Adjustments to reconcile net income to cash provided
by operating activities:
Change in rents receivable 5,550
Change in accounts payable (827)
Change in organizational expenses (14,051)
Change in other liabilities (5,898) (3,408)
Change in other assets -- (11,644)
--------- ---------
NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES (15,732) (30,835)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in investment properties (289,884) (20,923)
--------- ---------
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES (289,884) (20,923)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in trust deeds payable 217,500 3,470
Change in contributed capital 73,000
Decrease in due to shareholder 18,075 11,155
--------- ---------
NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES 308,575 14,625
Net change in cash 2,959 (37,133)
CASH, beginning of period -- 37,019
--------- ---------
CASH, end of period 2,959 (114)
========= =========
</TABLE>
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
ACCOUNTING POLICY
- -----------------
The financial statements are reported on a consolidated basis with the
company's wholly owned subsidiary CEC Properties, Corp. All material
intercompany transactions have been eliminated.
All adjustments made to the financial statements are of a normal recurring
nature necessary to present fairly the financial condition of the company.
NOTE 1 - INVESTMENT PROPERTIES
- ------------------------------
The company invests in smaller real estate rental properties. Purchases are
typically made with a combination of stock, cash and assumption of existing
debt.
NOTE 2 - RENTAL INCOME
- ----------------------
The company began operations during the third quarter of 1995.
<PAGE> 8
CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
The corporation continues in its plan of seeking real estate properties for
acquisitions as well as opportunities in the oil and gas industry. During the
quarter ended July 31, 1996, the company entered into an agreement in principle
to acquire the assets of Blue T Golf, Inc., an Omaha, NE company which builds
and manages golf courses. The final agreement has not been made the company
and management cannot accurately represent the total financial effect the
acquisition will have on CEC Properties, Inc. at this time. However,
management is confident a final agreement will be reached in fiscal 1996 and
will be able to represent the financial effects by fiscal year-end 1996. At
the present time, it appears the company will have the opportunity of building
golf courses in at least three cities in California as well as other cities
throughout the US. However, those opportunities are still in the discussion
stage and cannot be relied upon until firm contracts are signed.
OPERATIONS
- ----------
The company had no significant real estate transactions during the quarter
ended July 31, 1996. The company continues to rent properties and collect
those rents to cover operating expenses. The company does not have any
full-time employees at this time and relies on the expertise of its board,
management and outside consultants for operations. The quarter ended July, 31,
1996 represents the first quarter of operations which can be compared to a
previous quarter of last year in that CEC Properties, Inc. first began
operations during the third quarter of fiscal 1995.
CAPITAL AND LIQUIDITY
- ---------------------
Management is of the opinion that capital and liquidity is sufficient to meet
operating requirements of the company for the near future. Management has no
immediate plans to seek outside sources of operating capital other than through
merger/acquisition of other companies and financing future acquisitions of real
estate projects. Changes in operations between quarters is nominal in that the
company is still relatively young in its operations and has yet to become
significantly involved in a larger business transaction.
<PAGE> 9
CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
Part II - Other Information
ITEM 1 - LEGAL PROCEEDINGS
None.
ITEM 2 - CHANGES IN SECURITIES
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
N/A
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 - OTHER INFORMATION
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27 - Financial Data Schedule
<PAGE> 10
CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
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.
CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
- ------------------------
Registrant
/s/ PAUL BALALIS September 12, 1996
- ------------------------------- ---------------------------
Paul Balalis, President Date
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BALANCE
SHEET INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
10QSB FOR PERIOD ENDED 31-JUL-1996.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> OCT-31-1995
<PERIOD-END> JUL-31-1996
<EXCHANGE-RATE> 1
<CASH> (114)
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,114,542
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 125,667
<OTHER-SE> 8,908
<TOTAL-LIABILITY-AND-EQUITY> 1,114,542
<SALES> 0
<TOTAL-REVENUES> 109,368
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 125,151
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (15,783)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,783)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
