SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended March 31, 1998 Commission File No. 0-25022
CERX VENTURE CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 72-1148906
(State or other jurisdiction of (I.R.S. Empl. Ident. No.)
incorporation or organization)
90 Madison Street, Suite 707
Denver, Colorado 80206
(Address of Principal Executive Offices) (Zip Code)
(303) 355-3350
(Registrant's Telephone Number, including Area Code)
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 such shorter period that the
Registrant was required to file such reports), and (2) has been subject
to such filing requirements for at least the past 90 days.
Yes X No
The number of shares outstanding of each of the Registrant's classes of
common equity, as of March 31, 1998 are as follows:
Class of Securities Shares Outstanding
Common Stock, $.001 par value 5,002,838
INDEX
Page of
Report
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets:
As of March 31, 1998 (Unaudited) and December 31, 1997 ............ 3
Statement of Operations (Unaudited):
For the three months ended March 31, 1998 and 1997
and cumulative from inception (April 4, 1989) through
March 31, 1998 .................................................... 4
Statements of Cash Flows (Unaudited):
For the three months ended March 31, 1998 and 1997
and cumulative from inception (April 4, 1989) through
March 31, 1998 .................................................... 5
Notes to Financial Statements (Unaudited) ......................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation ...... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .............................. 11
Signatures.......................................................... 11
CERX VENTURE CORPORATION
(A Development Stage Company)
Balance Sheets
(Unaudited)
March 31, Dec. 31,
1998 1997
--------- --------
ASSETS
CURRENT ASSETS
Cash 3,885 4,609
--------- --------
3,885 4,609
========= ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable 3,322 139
Advances 44,590 74,590
Accrued interest 10,177 8,217
Promissory notes to an officer/stockholder 127,522 97,522
--------- --------
Total Liabilities 185,611 180,468
--------- --------
STOCKHOLDERS' DEFICIT
Preferred stock, $.001 par value; Series
A, 6.75% non-voting convertible
preferred; authorized - 4,000,000
shares; issued - none - -
Preferred stock; $.001 par value;
authorized - 11,000,000 shares;
issued - none - -
Common stock, $.001 par value;
authorized - 50,000,000 shares;
issued and outstanding - 5,002,838
shares 5,003 5,003
Additional paid-in capital 220,992 220,992
Deficit accumulated during the
development stage (407,721) (401,854)
--------- ---------
Total Stockholders' Deficit (181,726) (175,859)
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT 3,885 4,609
========= =========
See accompanying notes to financial statements.
CERX VENTURE CORPORATION
(A Development Stage Company)
Statement of Operations
(Unaudited)
April 4, 1989
For The Three Months Ended (inception) to
March 31, March 31,
1998 1997 1998
--------- --------- ---------
Costs and Expenses:
Costs of business acquisitions - 35,371 192,020
General and administrative 3,907 21,982 139,060
Interest 1,960 1,863 10,177
Offering costs - 35,421 66,464
--------- -------- ----------
Total expenses 5,867 94,637 407,721
--------- -------- ----------
Net loss (5,867) (94,637) (407,721)
========= ======== ==========
Net loss per common share (nil) (nil)
========= ========
Weighted average common shares
outstanding 5,002,838 4,952,838
========= =========
See accompanying notes to financial statements.
CERX VENTURE CORPORATION
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
For the Three Months Ended, April 4, 1989
March 31, (inception) to
1998 1997 March 31, 1998
-------- -------- --------------
Cash flows from operating activities
Net loss (5,867) (94,637) (407,721)
Ajustments to reconcile net loss
to net cash used by operating
activities:
Capital contribution by an
officer / stockholder - - 53,343
Common stock issued for costs
advanced and services - - 151,112
Changes in assets and
liabilities:
Accounts payable 3,183 (3,014) 3,222
Accrued interest 1,960 - 10,177
Advances (30,000) 74,590 44,590
Increase (decrease) in
amounts due to an officer
/ stockholder - 45,976 -
--------- -------- ---------
Net cash used in operating
activities (30,724) 22,915 (145,277)
Cash flows from financing
activities
Proceeds from promissory notes 30,000 14,500 127,622
Proceeds from sale of common
stock - - 21,540
--------- --------- ----------
Net cash provided by financing
activities 30,000 14,500 149,162
--------- --------- ----------
Net increase in cash (724) 37,415 3,885
--------- --------- ----------
Cash at beginning of period 4,609 2,309 -
--------- --------- ----------
Cash at end of period 3,885 39,724 3,885
--------- --------- ----------
See accompanying notes to financial statements.
CERX VENTURE COMPANY
(A Development Company)
Financial Notes (Unaudited)
Note 1 Description of Business
The financial statements presented are those of Cerx Venture Corporation,
a development stage company (the Company). The Company was incorporated
on April 4, 1989 under the laws of the State of Nevada. On March 23, 1998,
the Company's name was changed from Cerx Entertainment Corporation to
Cerx Venture Corporation.
The Company's activities to date, have been directed towards the raising of
capital and two attempted business acquisitions.
The audit report of the Company's independent accountants reporting on the
Company's financial statements for the year ended December 31, 1997, expressed
doubt regarding the Company's ability to continue as a going concern in
light of the Company's recurring losses and current liabilities, unless
the Company obtains future profitable operations or additional financing. The
financial statements do not include any adjustments that might be necessary
should the Company be unable to continue in existence.
Note 2 Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reporting amounts of assets and liabiities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates.
Note 3 Fair Value of Financial Instruments
The fair value of the Company's payables, accrued interest and promissory
notes due to an officer / shareholder is not practicable to estimate due to
the related party nature of the underlying transactions and the indefinite
payment terms.
Note 4 Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases. Deferred tax assets and liabiities are measured using enacted
tax rates expected to apply to taxable income in the year in which those
temporary differences are expected to reverse. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the
statement of operations in the period that includes the enactment date.
Note 5 Loss Per Common Share
Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period.
Note 6 Reclassifications
Certain items for 1997 have been reclassified to conform to the current
years presentation.
Note 7 Preferred Stock
On February 10, 1997, the Company's Board of Directors designated
4,000,000 shares of preferred stock as the Series A, 6.75% Non-Voting
Convertible Preferred Stock. No shares of the Series A, 6.75% Non-Voting
Convertible Preferred Stock have been issued. On March 31, 1998, the
Company cancelled the designation of the Series A, 6.75% Non-Voting
Convertible Preferred Stock.
The Company has a total of 11,000,000 preferred shares, $.001 par value,
authorized. Dividends, voting rights and other terms, rights and
preferences of these preferred shares have not been designated but may
be designated by the Board of Directors from time to time.
Note 8 Unaudited Financial Statements
The accompanying unaudited financial statements of the Company have been
prepared on the accrual basis and in accordance with the instructions
to Form 10-QSB and 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. These financial statements should be
read in conjunction with the financial statements and notes thereto
included in the Company's annual report on Form 10-KSB for the year ended
December 31, 1997.
CERX VENTURE CORPORATION
(A Development Company)
(Unaudited)
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
BACKGROUND. Cerx Venture Corporation ("Cerx" or the
"Company")was incorporated in the State of Nevada on April
4, 1989, under the name Chelsea Atwater, Inc. On March 19, 1997, the
Company changed its name to Cerx Entertainment Corporation, and on
March 23, 1998, changed its name again to Cerx Venture Corporation.
Cerx has no significant assets and is in the development stage
in accordance with Financial Accounting Standards Board Standard No. 7.
The Company intends to either raise funds to originate a business or,
alternatively, enter into a business combination with one or more as yet
unidentified privately held businesses.
FORWARD-LOOKING STATEMENTS. This report contains certain
forward-looking statements and information relating to the Company that
are based on the beliefs of its management as well as assumptions made by
and information currently available to its management. When used in this
report, the words "anticipate", "believe", "estimate", "expect", "intend",
"plan" and similar expressions, as they relate to the Company or its
management, are intended to identify forward-looking statements.
These statements reflect management's current view of the Company with
respect to future events and are subject to certain risks, uncertainties and
assumptions. Should any of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those described in this report as anticipated, estimated or
expected. The Company's realization of its business aims will depend in the
near future principally on the successful acquisition of operations
or origination of a business as discussed below.
BUSINESS OF THE COMPANY. The Company's business is to either
acquire a small to medium-size business (or its assets) actively engaged in a
business generating revenues or having immediate prospects of generating
revenues, or to originate a business. Due to its current lack of cash, the
Company intends to acquire a business by issuing shares of the Company's
stock in a merger or stock exchange. Originating a business, on the other
hand, would require sufficient cash to launch the business, and the
origination of a business may involve starting a business from scratch or
may take another form such as a joint venture, partnership or other
association with other individuals or companies. In order to avoid becoming
subject to regulation under the Investment Company Act of 1940, as
amended, the Company does not intend to enter into any transaction
involving the purchase of another corporation's stock unless the Company
can acquire at least a majority interest in that corporation.
The Company has not identified any industry, segment within an industry
or type of business, nor geographic area, in which it will concentrate its
efforts, and any assets or interest acquired or business originated may be in
any industry or location, anywhere in the world. In regard to acquisitions,
the Company will give preference to profitable companies or ventures with
a significant asset base sufficient to support a listing on a national
securities exchange or quotation on the NASDAQ Small Cap Market. There is no
assurance that the Company will be successful in acquiring or originating
any business. The Company has no operations or source of revenues and has
no assets other than a nominal amount of cash.
LIQUIDITY AND CAPITAL RESOURCES. The Company has funded
its operations to date exclusively through cash loans and cash advances
provided by shareholders. The Company did not realize any cash from
equity financing activities in 1997 and has no line of credit or similar
credit facility available to it. However, the Company currently pays no
salaries or rent, has little in the way of general or administrative overhead
expenses, and has no material capital commitments and will have none unless
and until it is able to raise the equity capital to become operational.
As of March 31, 1998, the Company had accumulated a deficit (net loss)
of $407,761 since inception and had $3,885 in cash on hand but no other
significant assets. The Company was indebted to John D. Brasher Jr., at
March 31, 1998, for $127,522 in cash loans and $10,177 in interest. The
Company has no long-term liabilities.
RESULTS OF OPERATIONS - FIRST QUARTER 1998. During the
quarter ended March 31, 1998, the first quarter of the year, the Company
incurred a net loss of $5,907. Expenses in the first quarter related
primarily to general and administrative operating costs. The Company paid
no rent or salaries during the quarter.
RESULTS OF OPERATIONS - FIRST QUARTER 1997. During the
quarter ended March 31, 1997, the Company had no revenues and incurred a
net loss of $94,637. Expenses in the first quarter of 1997 related primarily
to miscellaneous operating costs and professional fees. Operating costs
primarily related to filing of reports with the Securities and Exchange
Commission, investigating business opportunities and a prefered stock
offering. The Company paid no salaries or rent during the first quarter
of 1997.
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 on Form 10-QSB to be signed on its behalf by the
undersigned, thereunto duly authorized.
DATED: May 6, 1998
CERX VENTURE CORPORATION
/s/ John D. Brasher Jr.
By.....................................................
John D. Brasher Jr., Chairman, Chief Exec. Officer,
President, Chief Financial Officer