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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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: January 31, 1998
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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)
Delaware 13-1919940
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(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
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)
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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 No X
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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.
Yes No X
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Applicable only for corporation issuer's
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 12,676,724 shares of common
stock as of 1/31/98.
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CEC PROPERTIES
(A DELAWARE CORPORATION)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
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CEC Properties, Inc. (CEC) is in the business of acquiring, building and
managing golf courses. CEC continues to review Golf and Sports Entertainment
related businesses for acquisition candidates that fit the profile required to
fulfill its standards for profitability and synergism. Classic Golf Management
recently signed a 50-year ground lease and construction agreement with Cherokee
Country, Georgia to build and operate a new 18-hole golf course with a driving
range and teaching center. In addition, Classic Golf Management will receive a
management fee on a construction only contract for a new 9-hole golf course.
OPERATIONS
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Classic Golf manages The City Club at Marietta and Sugar Creek, in De Kalb
County. The uncharacteristic large amount of rain in the Atlanta area adversely
affected Classic Golf Management's income for the quarter. Classic was able to
offset some of the shortfall by buying and reselling golf course maintenance
equipment at a significant profit.
CEC was not profitable during this quarter but expects to be profitable the next
quarter. The company continues to rent properties and collect rents, and manage
golf courses.
CAPITAL AND LIQUIDITY
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CEC detailed in the latest 10K filed with the SEC, that they have entered into a
service agreement with PJM Trading Company of New Jersey to provide financial,
management and consulting service for a period of five years. Part of the
agreement requires PJM raise $1 to $2 million in equity in the form of preferred
stock during the second quarter.
Management will use the equity to strengthen its financial position in order to
continue acquiring other companies.
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CEC PROPERTIES, INC.
(a Delaware Corporation)
CONSOLIDATED BALANCE SHEET
Unaudited
As of As of
January 31, 1998 January 31, 1997
Unaudited Unaudited
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TOTAL ASSETS
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Investment - Real Estate (net) $ 835,808 $ 1,078,975
Cash in the Bank 33,968 3,513
Other 318,353 24,746
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TOTAL ASSETS $ 1,188,129 $ 1,107,234
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LIABILITIES AND CAPITAL
LIABILITIES
Trust Deeds Payable $ 766,548 $ 1,043,284
Due to Stockholders 105,375 112,975
Other 345,690 24,327
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TOTAL LIABILITIES $ 1,217,613 $ 1,180,586
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CAPITAL & EQUITY
Common Stock $ 126,767 $ 125,667
Additional Paid In Capital 23,351,302 23,297,402
Accumulated Deficit (23,485,859) (23,496,421)
Current Loss (21,694) (25,357)
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NET STOCKHOLDER EQUITY (29,484) (73,352)
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TOTAL LIABILITIES & CAPITAL $ 1,188,129 $ 1,107,234
=============== ===============
THE ACCOMPANYING NOTES ARE INTEGRAL TO THESE FINANCIAL STATEMENTS
<PAGE>
CEC PROPERTIES, INC.
CONSOLIDATED STATEMENT OF INCOME & EXPENSES
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THREE MONTHS ENDED JANUARY 31,
1997 1998
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INCOME
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INCOME $ 17,736 $ 409,664
EXPENSES
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INTEREST $ 19,956 13,981
OTHER EXPENSES 17,757 413,722
DEPRECIATION 5,380 3,655
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TOTAL EXPENSES $ 43,093 $ 431,358
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NET PROFIT or LOSS $ (25,357) $ (21,694)
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NET INCOME PER COMMON SHARE <0.002> <0.0017>
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CONSOLIDATED STATEMENT OF CASH FLOWS
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1997 1998
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FUNDS WERE PROVIDED BY:
Operations $ 8,349 $ 4,831
Non Current 388 6,249
Loans from Shareholder 27,200 (10,000)
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Total Funds Provided $ 35,937 $ 1,080
FUNDS WERE USED FOR:
Net Loss from Operation (25,357) (21,694)
Accrued Expense (9,384) (11,081)
Real Estate Investments 0 0
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Total Funds Used $ (34,742) $ (32,775)
Increase (Decrease) in Cash $ 1,195 $ (31,695)
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Beginning Cash 2,318 65,663
Changes in Cash 1,195 (31,695)
Ending Cash $ 3,513 $ 33,968
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THE ACCOMPANYING NOTES ARE INTEGRAL TO THESE FINANCIAL STATEMENTS
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
ACCOUNTING POLICY
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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
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At the end of the year the company had two smaller real estate rental
properties. Both properties will be sold in the second quarter. The company has
acquired the lease rights to two golf course properties and is in the process of
acquiring the rights to an additional golf course .
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CEC PROPERTIES, INC.
(A DELAWARE CORPORATION)
INDEX TO FORM 10-QSB
JANUARY 31, 1998
Part I - Financial Information
Item 1 - Financial Statements
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statements of Cash Flow
Notes to Consolidated Financial Statements
Item 2 - Management's Discussion and Analysis of Operations
See attached exhibit
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JAN-31-1998
<CASH> 33968
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33968
<PP&E> 835808
<DEPRECIATION> 0
<TOTAL-ASSETS> 1188129
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 126767
<OTHER-SE> (156251)
<TOTAL-LIABILITY-AND-EQUITY> 1188129
<SALES> 409664
<TOTAL-REVENUES> 409664
<CGS> 0
<TOTAL-COSTS> 431358
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13981
<INCOME-PRETAX> (21694)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21694)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21694)
<EPS-PRIMARY> (0.002)
<EPS-DILUTED> (0.002)
</TABLE>
