U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-19196
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CELEBRITY ENTERTAINMENT, INC.
(Name of Small Business Issuer in its Charter)
Delaware 11-2880337
(State of or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
214 Brazilian Avenue, Suite 400, Palm Beach, Florida 33480 561/659-3832
(Address of principal executive offices. Issuer's telephone number.)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the issuer was required to file such reports), and
(2)
has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
The number of shares outstanding of the issuer's Common Stock, $ 0.0001 par
value, as of May 15, 2000 was 262,690.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
<PAGE><PAGE>
CELEBRITY ENTERTAINMENT, INC.
FORM 10-QSB
For the Quarter Ended March 31, 2000
INDEX
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(Unaudited)
Consolidated Balance Sheet
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Consolidated Statement of Stockholders' Equity
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
</PAGE><PAGE><PAGE>
Celebrity Entertainment, Inc.
Consolidated Balance Sheet
March 31, 2000
(Unaudited)
Assets
Current assets:
Cash $ 69
Due from related party 1,260
Total current assets 1,329
Property and equipment, cost 30,573
Less accumulated depreciation ( 26,787)
Property and equipment, net 3,786
Other assets:
Investment in oil and gas lease, net 1,716,221
Less: allowance for impairment in value (1,716,221)
Total assets $ 5,115
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 260,501
Accrued expenses
1,300
Notes payable - debenture settlement 320,534
Convertible debentures payable 1,640,000
Notes payable 60,000
Note payable - officer 750
Note payable - affiliate 7,100
Note payable - officer 124,325
Accrued interest payable 525,577
Total current liabilities 2,940,087
Stockholders' equity:
Preferred stock, $0.01 par value: 2,000,000 shares authorized
Designated as Class A 8% convertible:
1,525,000 shares designated; 1,064,000 shares issued
($5,320,000 total liquidation preference) 10,640
Common stock, $0.0001 par value: 25,000,000 shares authorized;
262,690 shares issued 26
Additional paid-in capital 18,312,117
Accumulated deficit (20,757,755)
Less treasury stock, 10,100 shares common
and 475,000 shares preferred, at cost (500,000)
Total stockholders' equity ( 2,934,972)
Total liabilities and stockholders' equity $ 5,115
See accompanying notes to financial statements.
</PAGE><PAGE><PAGE>
Celebrity Entertainment, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<S> <C>
<C>
Three months ended March 31, 2000 1999
Revenues:
Resort operations $ - $ -
Oil and gas operations -
19,268
Selling, general and administrative expenses 12,970 24,563
Operating loss ( 12,970) (
5,295)
Net loss $ (12,970) $(
5,295)
Basic loss per share: $ ( .65) $(
.62)
</TABLE>
See notes to the financial statements.
</PAGE>
<PAGE>
<TABLE>
Celebrity
Entertainment, Inc.
Statements of
Stockholders' Equity
(Unaudited)
<S> <C> <C> <C>
<C> <C> <C> <C> <C>
Treasury Stock Additional
Preferred Stock Common
Stock Common Preferred Paid-In
Shares Amount Shares
Amount Shares Shares Amount Capital
Balance, January 1, 2000 1,064,000 $ 10,640 262,690 $
26 10,100 475,000 * 500,000 $ 18,312,117
Net loss - - -
- - - - - -
Balance at March 31, 2000 1,064,000 $ 10,640 262,690 $
26 10,100 475,000 $ 500,000 $ 18,312,117
</TABLE>
<TABLE>
<S>
<C>
Accumulated
Deficit
Balance, January 1, 2000 $
(20,744,785)
Net loss (
12,970)
Balance at March 31, 2000 $
(20,757,755)
See accompanying notes to the financial statements.
</TABLE>
</PAGE>
<PAGE>
<TABLE>
Celebrity Entertainment, Inc.
Statements of Cash Flows
(Unaudited)
<S> <C> <C>
Three months ended March 31, 2000 1999
Cash flows from operating activities:
Net loss $ ( 12,970) $ ( 5,295)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation and amortization 1,529 1,529
Change in current assets and liabilities:
Increase (decrease) in:
Accounts payable and accrued expenses - 15,414
Net cash used for operating activities ( 11,441) ( 19,180)
Cash flows from investing activities:
Proceeds on loan from related party - 17,000
Net cash provided by investing activities - 17,000
Cash flows from financing activities:
Proceeds from issuance of notes to related party 1,800
- - Proceeds from issuance of note
payable 9,678
Net cash provided by financing activities 11,478 -
Increase (decrease) in cash and cash equivalents 37 ( 2,180)
Cash and cash equivalents, beginning of period 32 2,265
Cash and cash equivalents, end of period $ 69 85
Supplemental disclosure of cash paid for:
Interest $ - $ -
Income taxes $ - $
- -
</TABLE>
</PAGE>
See accompanying notes to the financial statement<PAGE><PAGE>
CELEBRITY ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying financial statements have been prepared by the Company
without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, these financial statements include
all adjustments necessary to present fairly the financial position of the
Company as of March 31, 2000 and the results of operations and cash flows for
the three-months ended March 31, 2000 and 1999. The Company's results of
operations during the first three months of the Company's fiscal year are not
necessarily indicative of the results to be expected for the full fiscal
year.
The financial statements included in this report should be read in
conjunction
with the financial statements and notes thereto in the Company's 1998 Form
10-KSB.
The Company's wholly-owned subsidiary participates in the management and
development of an oil and gas lease in Texas. Operations of the subsidiary
began during the second quarter of 1998 and, accordingly, the Company is
presenting consolidated financial statements including the assets, liabilities
and results of operations of the subsidiary.
2. Basic and Diluted Loss Per Common Share
Basic and diluted loss per common share is computed using the weighted average
number of shares outstanding during each period. Common stock equivalents
have
not been included since the effect of such inclusion would be antidilutive.
The following table sets forth the computation of basic and diluted loss per
share for the three months ended March 31, 2000 and 1999:
2000 1999
Net loss from operations $( 12,970) $( 5,295)
Preferred dividends ( 157,414) ( 157,414)
Net loss to common shareholders ( 170,384) ( 162,709)
Weighted average common shares outstanding 262,690 262,690
Basic loss per share: $( .65) $( .62)
<PAGE><PAGE>Item 2. Management's Discussion and Analysis of Plan of Operation
FORWARD-LOOKING STATEMENTS
Statements contained in this Form 10-KSB regarding the Company's future
prospects or profitability constitute forward-looking statements and as such,
must be considered with caution and with the understanding that various
factors
could cause actual results to differ materially from those in such
forward-looking statements. Such factors include but are not limited to (i)
the
inability of the Company to complete a business combination or acquisition,
and/or (ii) the securing of financing sufficient to fund such business
combination, acquisition, settlement of outstanding debt and litigation.
General
The Company was engaged in the development, ownership, marketing and
operation of a destination resort community and fishing camp located on Orange
Lake near Ocala, Florida which was sold in 1998. Management is currently
considering alternative business activities for the Company.
Management's Plans
Management's plans to improve the financial position and operations, with
the goal of sustaining the Company's operations for the next twelve months and
beyond, include the following possibilities:
1. Completing a transaction which will secure new operations in the Company;
2. Completing successful settlement negotiations with the Company's debenture
holders;
3. Completing a transaction for the renewal of the Company's lease on the oil
and gas property and the resulting sale of the Company's oil and gas well
and/or the renewed lease.
Though management believes the Company will secure additional capital
and/or attain one or more of the above goals, there can be no assurance that
any
acquisition, financing or other plan will be effected. Any acquisition or
securities offering is subject to the Company's due diligence, the state of
the
general securities markets and of the specific market for the Company's
securities, and any necessary regulatory review.
Results of Operations
Three-month Period Ended March 31, 2000 Compared to Three-month Period Ended
March 31, 1999:
There were no revenues for the three-month period ended March 31, 2000,
compared to 19,268 for the three-month period ended March 31, 1999, reflecting
a decrease of $19,268. The decrease in revenues for the three-month period
ended March 31, 2000 is a result of the assignment of the oil and gas lease in
the Company's subsidiary.
Selling, general and administrative expenses were $12,970 for the
three-month period ended March 31, 2000 compared to $24,563 for the three
months ended March 31, 1999, representing a decrease of $11,953. The decrease
is due to the reduction of minimal accounting and Company maintenance
expenses.
During the three-month periods ended March 31, 2000 and March 31, 1999,
there were no amounts in interest expense charged to operations.
Net loss for the three-month period ended March 31, 2000 was $12,970,
which represents an increase of $7,675 compared to the net loss of $5,295
during the prior-year period. The increase is due principally to the lack of
revenues to offset the smaller amount of maintenance expenses.
Liquidity and Capital Resources
Liquidity and capital resources are hereinafter discussed in three broad
categories: operating activities, investing activities and financing
activities.
Operating Activities
Cash increased $37 to $69 at March 31, 2000 from $32 at December 31,
1999. Net cash used for operating activities was $11,441 during the
three-month period ended March 31, 2000 compared to cash used for operating
activities of $19,180 during the three-month period ended March 31, 1999. The
change in cash used for operating activities resulted primarily from a
decrease in additions to accounts payable.
Investing Activities
During the three-month period ended March 31, 2000, there was no cash
provided by or used in investing activities, compared with $17,000 provided by
investing activities during the three-month period ended March 31, 1999. The
change in cash provided by and used for investing activities is a result of
the changes in loans to and from related parties.
Financing Activities
During the three-month period ended March 31, 2000, net cash provided by
financing activities was $11,478, compared to no cash flows related to
financing activities in the first quarter of 1999. The change in cash provided
by and used for financing activities is a result of the changes in loans to
and from related parties.
PART II. OTHER INFORMATION
Item 5: Certain Relationships and Related Transactions
At December 31, 1999, the Company had a note payable to an officer in the
amount of $114,647 bearing interest at prime. During the first quarter of 2000
this loan was increased by $9,678 and it has an outstanding balance of
$124,325 at March 31, 2000. In 1999, the Company was loaned $5,300 by
Princeton Media Group, Inc. ("PMG") to assist the Company in meeting minimal
operating expenses, which loan was increased by $1,800 during the first
quarter of 2000 to a total due at March 31, 2000 of $7,100. PMG's President
and a director is James J. McNamara, Chairman of the Company.
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.
Date: May 15, 2000
CELEBRITY ENTERTAINMENT, INC.
By: /s/ J. William Metzger
J. William Metzger
Executive Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 69
<SECURITIES> 0
<RECEIVABLES> 1,260
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,329
<PP&E> 30,573
<DEPRECIATION> 26,787
<TOTAL-ASSETS> 5,115
<CURRENT-LIABILITIES> 2,940,087
<BONDS> 0
10,640
0
<COMMON> 26
<OTHER-SE> (2,934,972)
<TOTAL-LIABILITY-AND-EQUITY> 5,115
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,970
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,970)
<EPS-BASIC> (0.65)
<EPS-DILUTED> (0.65)
</TABLE>