SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 2O549
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 DECEMBER 31, 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 changed
since last report)
Check whether issuer: (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that Registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past ninety days.
(1) Yes X No
(2) Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant 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 December 31, 1995 there were outstanding 3,364,674 shares
of the Registrant's common stock.
Transitional Small Business Disclosure Format (check one):
Yes No X
CELCOR, INC.
BALANCE SHEETS
ASSETS June 30, 1995* Dec. 31, 1995
(unaudited)
Current assets:
Cash $ 12,037 $ 2,507
______ _____
Total current assets 12,037 2,507
_______ _______
Note receivable 700,000 664,000
_______ ___________
Total assets $ 712,037 $ 666,507
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,369 $ 38,990
Accrued expenses and ______ ______
other current liabilities 6,614 13,615
______ ______
Total current liabilities 26,983 52,605
______ _______
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 (138,111) (209,263)
Treasury stock (150,220 shs) (751,100) (751,100)
_________ _________
Total stockholders' equity 685,054 613,902
_______ _______
$ 712,037 $ 666,507
======== ========
* Derived from audited financial statements
See Notes to the Financial Statements
CELCOR, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three mos. ended Six mos. ended
December 31, December 31,
1994 1995 1994 1995
Revenues $ - $ - $ - $ -
_____ ____ _____ ____
General and
administrative
expenses 18,281 43,981 34,518 71,151
Gain on sale of assets - - ( 5,250) -
______ ______ ________ ______
Income (loss) $ (18,281) $(43,981) $ (29,268) $(71,151)
======== ======== ======== ========
Income (loss) per
common share - $ (.01) $ (.01) $ (.02)
======== ======== ======== ========
See Notes to the Financial Statements
CELCOR, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
Six months ended
December 31,
1994 1995
Cash flows used by operating activities:
Net loss $ (29,268) $ (71,151)
________ _______
Change in assets and liabilities:
Increase (decrease) in accounts payable 3,066 18,620
Increase (decrease) in other current
liabilities - 7,001
_______ _______
Net cash provided (used) by operations (26,202) (45,530)
Cash provided (used) by investing activities:
(Increase) decrease in Notes rec. (700,000) 36,000
_________ _______
Net increase (decrease) in cash (726,202) (9,530)
Cash at beginning of period 769,284 12,037
Cash at end of period $ 43,082 $ 2,507
========= =========
See Notes to the Financial Statements
CELCOR, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 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 their cash flows at December 31, 1995
(and for all periods presented) and to make such statements not
misleading, 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:
For the three and six month
periods ending Dec. 31,
1994 1995
Weighted average shares
outstanding
during the period 3,364,674 3,364,674
========= =========
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 was 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 and body care 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, did 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 February 28, 1996 by the
Company as the Company's proposed merger with Northeast continues
to proceed. As of December 31, 1995, Northeast had repaid a
total of $36,000 on the loan to provide working capital to the
Company. Concurrent to the note, Northeast's shareholders
pledged all existing shares of their common stock as collateral.
At a stockholders meeting held January 25, 1996, the Company's
stockholders approved the merger with Northeast. The Company is
now proceeding with necessary legal filings to effectuate the
merger. The Company intends to change its name to Northeast
(USA) Corp. upon finalization of the merger.
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. However, in both periods
the Company incurred legal and administrative costs in
conjunction with its anticipated merger with Northeast (USA)
Corp. ("Northeast") (See note 3 to the Financial Statements).
Not taking into consideration the fact that the loss for the six month
period ending December 31, 1994 was lessened by a $5,250 gain on
the sale of an asset, the loss for the six month period ending
December 31, 1995 was approximately $37,000 more due to increased
expenditures necessary as the Company neared its proxy
solicitation and merger consummation.
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 recent short term capital needs have been satisfied
by the receipt of $36,000 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.
In anticipation of the merger with Northeast, the
Company intends to raise additional capital to fund the
continuing operations of the combined entity through one or more
private placements of debt and 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. The Company has current
plans to sell up to 2 million shares of its Common Stock
(together with warrants to purchase an additional 1 million
shares) in a private offering. It is anticipated that offers
will be made primarily to non U.S. persons in compliance with
Regulation S, adopted pursuant to the Securities Act of 1933 as
amended. No commitments to purchase any such shares have been
received and there can be no assurances that any such offering
will be successful, or will proceed in the manner presently
contemplated.
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 4. Submission of Matters to a Vote of Security-Holders
(a) On January 25, 1996, holders of record as of December 14, 1995
voted at a special meeting of stockholders.
(b) The following directors were elected at the meeting:
Stephen E. Roman, Jr. (term continues after meeting)
David Chow (term continues after meeting)
Michael Hsu (newly elected director)
Jennifer Lo Wu (newly elected director)
Eugene Cha (newly elected director)
Frank Nelson (newly elected director)
Chin-Sung (Joe) Chen (newly elected director)
(c) Proposals voted at the meeting:
Proposal 1 - Approval of an Agreement and Plan of Merger (the
"Merger Agreement") among Celcor, Northeast (USA) Corp.
("Northeast") and the shareholders of Northeast, providing, among
other things, for the merger of Northeast with and into Celcor,
and the issuance of shares of Celcor common stock to the holders
of Northeast common stock. Each share of Northeast common stock
would receive 10,000 shares of Celcor common stock. 1,750,000
shares of Celcor common stock would be issued in the transaction.
Proposal 2 - Election of directors - see above.
Proposal 3 - Ratification and confirmation of the authorization
and issuance of 275,000 shares of Series C 8% Convertible
Preferred Stock, par value $.001.
Proposal 4 - Approval of a proposed amendment to Celcor's
Certificate of Incorporation expressly authorizing the Board of
Directors to establish rights, preferences and limitations of any
class or series of preferred stock which may be issued in the
future.
Tabulation of votes received on each proposal:
FOR AGAINST ABSTAIN NOT VOTED
Proposal 1 1,951,457 320 1,820 562,683
Proposal 2
Stephen E. Roman, Jr. 2,513,240 3,040
David Chow 2,513,160 3,120
Michael Hsu 2,513,160 3,120
Jennifer Lo Wu 2,513,160 3,120
Eugene Cha 2,513,160 3,120
Frank Nelson 2,513,160 3,120
Chin-Sung (Joe) Chen 2,513,160 3,120
Proposal 3 1,937,675 1,800 6,770 562,683
Proposal 4 1,938,935 8,232 6,430 562,683
At the record date there were 3,364,674 shares entitled to vote.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - none
(b) Reports on Form 8-K - none
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: February 12, 1996 CELCOR, INC.
/s/ STEPHEN E. ROMAN, JR.
STEPHEN E. ROMAN, JR.
Vice President
Chief Financial Officer
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