U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1995
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ______ to ________
Commission file number 0-13337
CELCOR, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 22-2497491
(State or other jurisdiction of (I.R.S. Employer identification
incorporation or organization) number)
1800 Bloomsbury Ave., Ocean, N.J. 07712
(Address of principal executive offices)
908-922-3158
(Issuer's telephone number including area code)
(Former name, former address and former fiscal year, if change since last
report)
Check whether issuer: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past twelve months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
ninety days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant 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 the court.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the last practicable date:
As of September 30, 1995 there were outstanding 3,364,674 shares of the
Registrant's common stock.
CELCOR, INC.
BALANCE SHEET
(unaudited)
ASSETS June 30, 1995 Sept. 30, 1995
Current assets:
Cash $ 12,037 $ 836
Total current assets 12,037 836
Note receivable 700,000 700,000
Total assets $ 712,037 $ 700,836
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,369 $ 32,339
Accrued expenses and other
current liabilities 31,614 35,614
Total current liabilities 51,983 67,953
Stockholders' equity:
Preferred Stock - 8% convertible
Series C - 275,000 shares
issued and outstanding 275 275
Common Stock, $.001 par value;
3,514,894 shares issued 3,515 3,515
Additional paid in capital 1,570,475 1,570,475
Accumulated deficit (163,111) (190,282)
Treasury stock (150,220 shs) (751,100) (751,100)
Total stockholders' equity 660,540 632,883
$ 712,037 $ 700,836
CELCOR, INC.
STATEMENT OF OPERATIONS
(unaudited)
Three months ended
September 30,
1994 1995
Revenues $ - $ -
General and administrative expenses 16,237 27,171
Gain on sale of assets (5,250) -
Net income (loss) $ (10,987) $ (27,171)
Income (loss) per common share: $ - $ (.01)
CELCOR, INC.
STATEMENT OF CASH FLOWS
(unaudited)
Three months ended
September 30,
1994 1995
Cash flows from operating activities:
Net loss $ (10,987) $ (27,171)
Change in assets and liabilities:
Increase in notes receivable (700,000) -
Increase (decrease) in accounts payable
and other current liabilities 2,969 15,970
Net cash (used) for operating activities (708,018) (11,201)
Financing activities: - -
Net increase (decrease) in cash (708,018) (11,201)
Cash at beginning of period 769,284 12,037
Cash at end of period $ 61,266 $ 836
CELCOR, INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(unaudited)
NOTE 1 - Financial Statements
The balance sheets and statements of operations for all periods reported
herein and the statements of cash flows for all periods reported herein
have been prepared by Celcor, Inc. ("the Company") without audit. In the
opinion of management, all adjustments necessary to present fairly the
financial position, results of operations and cash flows at September
30, 1995 (and for periods presented) have been made. The Company's 10-KSB
annual report for its last fiscal year ended June 30, 1995 should be read
in conjunction with this report.
NOTE 2 - Loss per Common Share
The weighted average number of common shares outstanding used in computing
net loss per common share for the periods presented herein is as follows:
Three months ending September 30,
1994 1995
Weighted average shares out-
standing during the period 3,364,674 3,364,674
All share amounts have been adjusted for the Company's one for five reverse
stock split effective December 1993.
NOTE 3 - Potential Merger and Notes Receivable
On August 15, 1994, the Company signed a letter of intent to acquire
Northeast (USA) Corp. ("Northeast"), and on March 15, 1995 executed an
Agreement and Plan of Merger with Northeast. The transaction is subject,
among other conditions, to completion of a due diligence examination and
shareholder approval. Northeast shareholders would receive 1,750,000
shares of the Company's common stock for all of the issued and outstanding
shares of Northeast. Northeast is a manufacturer and distributor of
various vitamin products with operations in the People's Republic of China
and the United States.
On August 9, 1994, the Company loaned $700,000 to Northeast. This loan,
evidenced by a promissory note, does not bear interest until the original
maturity date, November 30, 1994, at which time interest would have accrued
at 15% per annum. The maturity date of the loan has been extended to
January 31, 1996 by the Company as the Company's proposed merger with
Northeast continues to proceed. Concurrent to the note, Northeast's
shareholders pledged all existing shares of their common stock as
collateral.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of operations
1994 and 1995 periods compared
In the 1994 and 1995 periods, the Company had no ongoing operations
and maintained its corporate existence (regulatory and tax filings, stock
transfer costs, etc.) with minimal administrative expenditures and the
incurrence of legal and administrative costs in connection with its
anticipated merger with Northeast (USA) Corp. ("Northeast") (See note 3
to the Financial Statements). Not taking into consideration the fact that
the 1994 loss was lessened by a $5,250 gain on the sale of an asset, the
1995 period loss was approximately $10,000 more due to increased
expenditures necessary in conjunction with the preparation of a proxy
statement with respect to the anticipated merger with Northeast.
Financial condition and liquidity
Since its emergence from Chapter 11 bankruptcy at the beginning of
its 1993 fiscal year, the Company has had no operations or business.
Subsequent to its reorganization the Company had virtually no assets or
liabilities and its need for working capital has been minimal. The Company
was able to secure $40,000 in loans from a non-affiliated private investor
which have been sufficient to fund current minimal administrative expenses.
In order for the Company to actively pursue its business plans in seeking
opportunities such as mergers, acquisitions or joint ventures, more
substantial permanent financing was required. As such, the Company was
able, during the 1994 fiscal year, to secure $780,000 in equity capital
through the private placement of Convertible Preferred Stock. The holder
of the $40,000 loan payable by the Company converted the loan and interest
to the Preferred issue, making the total Preferred issuance $825,000.
After the conclusion of the offering of the Series C Preferred Stock,
$700,000 of the proceeds was loaned to Northeast in anticipation of the
merger (see Note 3 to the Financial Statements). The Company believes that
if the merger with Northeast is consummated, the Company will require
significant additional capital to fund its obligations under a joint
venture agreement with Northeast General Pharmaceutical Factory, to pay
ongoing operating expenses and to support the Company's working capital
needs. Alternatively, should the merger with Northeast not be consummated,
the Company may be unable to recover the loan balance in cash from
Northeast and would be illiquid. While the Company believes that the value
inherent in the stock of Northeast (which the Company holds as collateral
against the loan) would be adequate for the ultimate recovery (in future
years) of the loan balance, additional capital in the short term would be
required for the Company to operate in any capacity. The Company's short
term capital needs occurring after September 30, 1995, have been satisfied
by the receipt of $20,000 from Northeast as partial payment on the Note.
However, as Northeast's cash resources are limited, it is uncertain as to
how long Northeast could continue to provide working capital to the Company
in the form of partial Note repayments.
Should the merger with Northeast be consummated, the Company intends
to raise additional capital to fund the continuing operations of the
combined entity through one or more private placements of debt or equity
securities, utilizing both foreign and domestic investment sources. Should
the merger not be consummated, the Company does not believe it will have
any ability to raise additional capital.
Because of the above mentioned liquidity concerns, the Company's
independent accountants, in their report for the fiscal year ended June 30,
1995, have issued an explanatory paragraph regarding the Company's ability
to carry out its business plans.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
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.
Dated: November 13, 1995 CELCOR, INC.
/s/Stephen E. Roman, Jr.
Stephen E. Roman, Jr.
President
