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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: March 31, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from _______ to _____________.
Commission file number 33-12613-NY
CELESTIAL VENTURES CORPORATION
(Exact name of Small Business Issuer as specified in its charter)
NEVADA 22-2814206
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
382 Route 59, Section 310, Monsey, New York 10952
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(Address of principal executive offices)
(914) 369-0132
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(Issuer's telephone number, including area code)
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer has: (1) 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
such reports), and (2) has been subject to such filing requirements for the past
90 days. X Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding for each of the issuer's classes of
common equity, as of the latest practicable date:
Number of shares of Common Stock outstanding as of March 31, 2000: 3,330,716
Transitional Small Business Disclosure Format (check one) Yes No X
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CELESTIAL VENTURES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
March 31,
2000
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Assets:
Current Assets
Cash $5,740
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Total Current Assets 5,740
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Total Assets $ 5,740
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See Accompanying Notes to Condensed Consolidated Financial Statements
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CELESTIAL VENTURES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
March 31,
2000
Liabilities
Current Liabilities
Accrued Expenses $ 13,000
Notes Payable 12,387
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Total Current Liabilities 25,387
Long-Term Liabilities
Net liabilities of discontinued operations 170,000
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Total Long-Term Liabilities 170,000
Total Liabilities 195,387
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Shareholders' Equity:
Preferred Stock 259
Common Stock 3,536
Additional Paid-In-Capital 12,381,601
Accumulated Deficit (12,517,012)
Net Income (Loss) (58,031)
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Total Shareholders' Equity (189,647)
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Total Liabilities and Shareholders' Equity $ 5,740
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See Accompanying Notes to Condensed Consolidated Financial Statements
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CELESTIAL VENTURES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31,
2000 1999
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Revenues
Sales $ -- $ --
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Cost of Sales -- --
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Gross Profit -- --
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Operating Expenses
General and Administrative Expenses 58,031 2,376,546
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Net (Loss) Before Other Income (Deductions) (58,031) (2,376,546)
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Other Income
Interest Income -- 431,756
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Total Other Income -- 431,756
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Net (Loss) before Taxes (58,031) (1,944,790)
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Income Taxes -- --
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Net (Loss) (58,031) $(1,944,790)
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Net (Loss) Per Share $ (.02) $ (.60)
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See Accompanying Notes to Condensed Consolidated Financial Statements
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CELESTIAL VENTURES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31,
2000 1999
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Revenues
Sales $ -- $ --
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Cost of Sales -- --
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Gross Profit -- --
Operating Expenses
General and Administrative Expenses (5,322) 1,487,929
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Net (Loss) Before Other Income (Deductions) (5,322) (1,487,929)
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Other Income
Interest Income -- 291,756
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Total Other Income -- 291,756
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Net Profit (Loss) before Taxes (5,322) (1,196,173)
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Income Taxes -- --
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Net Profit or (Loss) (5,322) $(1,196,173)
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Net Profit or (Loss) Per Share $ (.01) $ (.37)
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See Accompanying Notes to Condensed Consolidated Financial Statements
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CELESTIAL VENTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31,
<TABLE>
<CAPTION>
2000 1999
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Cash Flows from Operating Activities
Net (Loss) $ (58,031) $(1,944,790)
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Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable -- (370,256)
Increase (decrease) in:
Accrued expenses and sundry liabilities 10,137 (7,997)
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Total adjustment 10,137 (378,253)
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Net cash used in operating activities (47,894) (2,323,043)
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Cash Flows From Investing Activities:
Net cash used in investing activities -- --
Cash Flows From Financing Activities:
Issuance of common stock 30,000 2,325,001
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Net cash provided by financial activities 30,000 2,325,001
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Net increase (decrease) in cash (17,894) 1,958
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Cash beginning of period 23,634 654
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Cash end of period $ 5,740 $ 2,612
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See Accompanying Notes to Condensed Consolidated Financial Statements
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CELESTIAL VENTURES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 2000
Celestial Ventures Corporation was organized under
the laws of the State of Nevada on January 28, 1987.
Effective June 30, 1995, the Company changed its year
end from October 31 to June 30.
NOTE A: Significant Accounting Policies
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance
with generally accepted accounting principles for
interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting
principles for complete financial statements. In the
opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results
for the nine-month period ended March 31, 2000 is not
necessarily indicative of the results that may be
expected for the year ended June 30, 2000. For further
information, refer to the consolidated financial
statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year
ended June 30, 1999.
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When used in this Quarterly Report on Form 10-QSB, the words "estimate",
"project", "intend", "expect" and similar expressions are intended to identify
forward-looking statements regarding events and financial trends which may
affect the Company's future operating results and financial position. Such
statements are subject to risks and uncertainties that could cause the Company's
actual results and financial position to differ materially. Such factors are
described in detail elsewhere. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release the result of any revisions
to these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
The consolidated balance sheet as of March 31, 2000 and the
consolidated statement of operations for the nine-months ended March 31, 2000
and 1999 have been derived from the unaudited financial records of the Company.
These financial statements reflect all adjustments, consisting only of normal
recurring items, which in the opinion of management are necessary to fairly
state the Company's financial position and results of operations for the period
presented.
Management's Plan of Operation
The Company's financial condition at March 31, 2000 compared to March 31, 1999
has not changed substantially.
On August 21, 1997, the Company announced that it had entered into a letter of
intent to merge with a high performance materials company which management
believed fit the Company's parameters for an acquisition candidate. On October
30, 1997, the Company worked towards securing the acquisition, as well as
providing future operating revenue for the Company, by completing an overseas
private placement of common stock pursuant to the exemptions afforded by
Regulation S. The offering produced total proceeds of $4,059,000 from investors
in connection with the transaction, whereby a total of 1,353,000 common shares,
par value $0.001, were issued for a purchase price of $3.00 per share. Of the
$4,042,960 of the proceeds received from the offering, after payment of $16,040
in costs of the offering, $ 4,000,000 was remitted to Polymer Dynamics, Inc
("Polymer"), the enterprise with which the Company intended to merge, in
exchange for promissory notes totaling $4,000,000 originally due December 30,
1997, bearing interest at an annualized rate of seven percent (7%). This
maturity date was later extended to December 31, 1999 by written agreement.
However, the notes remained unpaid, and the proposed acquisition unconsummated,
at June 30, 1999, and the Company has decided to reserve fully against the
entire amount of the notes as of that date. The Company will not recognize any
interest income on these notes, and will apply any payments received to reduce
the principal.
On March 18, 1998, the Company and Polymer entered into a definitive Agreement
and Plan of Merger (the "Merger Agreement") providing for transactions that, if
consummated, would have resulted in Polymer being merged with and into the
Company. Because the conditions to the closing of the merger were not satisfied,
the merger agreement terminated by its terms on December 31, 1998. The Company
is currently in negotiations with Polymer concerning the repayment of its
indebtedness to the Company discussed above.
In the event additional working capital is needed, the Company intends to seek
to raise it through the sale of common stock or loans from significant
shareholders.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Sirco Systems, LLC vs. Gold Coast Powder Coatings, Inc., Celestial Ventures
Corporation, Custom Coatings, Inc., W. G. Dodson, William V. Reynolds, Herbert
W. Reynolds, et al., Civil Action No. CV 98-2215, In the Circuit Court of
Jefferson County, Alabama.
The Plaintiff brought suit in 1998, concerning a contractual dispute with a
former subsidiary of the Company, and obtained a judgment against all defendants
in the amount of $122,000. The Company vigorously contested responsibility for
any portion of the judgment through local counsel, and reached an agreement with
plaintiff to settle any alleged liabilities. Pursuant to the settlement
agreement in October 1999, the plaintiff received $10,000 and 10,000 shares of
the Company's stock held by John L. Patten, a stockholder of the Company.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no matters submitted to a vote of security holders for the
period covered by this Report.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
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(a) Exhibits (numbered in accordance with Item 601 of Regulation S-B).
Exhibit
Numbers Description
# 2 - Agreement and Plan of Merger, dated as of March 18,
1998, between Celestial Ventures Corporation and
Polymer Dynamics, Inc.
* 3(a) - Certificate of Incorporation of the Company
* 3(b) - Bylaws of the Company
** 4(a) - Form of Common Stock Certificate
*** 10(a) - Employment Agreement between Irwin Schneidmill and the Company dated March 1, 1996.
+ 10(b) - Assumption Agreement between John Patten and the Company for the R. M. Engineering note and
the Dynamic subordinated note.
+ 10(c) - Indemnification Agreement between John Patten and the Company for the Johnson vs. Central
Valve Services, Inc., et al., litigation.
++ 10(d) - Form of Common Stock Purchase Agreement and Investor Confirmation Letter for the Overseas
Private Placement Pursuant to Regulation S.
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(b) Reports on Form 8-K - The Registrant did not file any reports on Form
8-K during the last quarter of the fiscal period ended September 30,
1997.
Symbols Used in Item 6:
# Incorporated by reference to the Company's Report on Form 8-K dated
March 26, 1998.
* Incorporated by reference to the Company's Registration Statement on
Form S-8 dated September 18, 1995.
** Incorporated by reference to the Company's Report on Form 8-K dated
August 31, 1995.
*** Incorporated by reference to the Company's Report on Form 10-KSB for
the period ended June 30, 1995.
+ Incorporated by reference to the Company's Report on Form 10-KSB for
the period ended June 30, 1997.
++ Incorporated by reference to the Company's Report on Form 10-QSB for
the period ended September 30, 1997.
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