-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tkj5QwkOQcE5aa1JFUbRObP9bY2Khju9yHZ9cVIY8lWHyjnI1xjOf+O4EX8GkwFG ot8S8xLHP7FFzzHe2Qc6DA== 0001010549-06-000324.txt : 20060519 0001010549-06-000324.hdr.sgml : 20060519 20060519161058 ACCESSION NUMBER: 0001010549-06-000324 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20060331 FILED AS OF DATE: 20060519 DATE AS OF CHANGE: 20060519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CabelTel International Corp CENTRAL INDEX KEY: 0000105744 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-SKILLED NURSING CARE FACILITIES [8051] IRS NUMBER: 752399477 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08187 FILM NUMBER: 06855559 BUSINESS ADDRESS: STREET 1: 1755 WITTINGTON PLACE STREET 2: SUITE 340 CITY: DALLAS STATE: TX ZIP: 75234 BUSINESS PHONE: 9724078400 MAIL ADDRESS: STREET 1: 1755 WITTINGTON PLACE STREET 2: SUITE 340 CITY: DALLAS STATE: TX ZIP: 75234 FORMER COMPANY: FORMER CONFORMED NAME: GREENBRIAR CORP DATE OF NAME CHANGE: 19960514 FORMER COMPANY: FORMER CONFORMED NAME: MEDICAL RESOURCE COMPANIES OF AMERICA DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WESPAC INVESTORS TRUST DATE OF NAME CHANGE: 19900605 10-Q 1 cabel10q033106.txt ================================================================================ FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 2006 or |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 000-8187 CABELTEL INTERNATIONAL CORPORATION (Exact Name of Registrant as Specified in Its Charter) Nevada 75-2399477 - ------------------------------- ------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1755 Wittington Place, Suite 340 Dallas, Texas ---------------------------------------------- (Address of principal executive offices) 75234 ---------------------------------------------- (Zip Code) (972) 407-8400 (Registrant's telephone number, including area code) ---------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 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. Yes |X|. No |_|. Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes |_|. No |X|. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of accelerated filer in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer |X| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes |_|. No |X|. APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes |_|. No |_|. APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the latest practicable date. Common Stock, $.01 par value 976,955 (Class) (Outstanding at March 31, 2006) ================================================================================ CABELTEL INTERNATIONAL CORPORATION Index to Quarterly Report on Form 10-Q Period ended March 31, 2006 PART I: FINANCIAL INFORMATION..................................................3 Item 1: Financial Statements...............................................3 Consolidated Balance Sheets..............................................3 Consolidated Statements of Operations....................................5 Consolidated Statements of Cash Flow.....................................6 Notes to Consolidated Financial Statements...............................7 Item 2: Management's Discussion and Analysis Of Financial Condition and Results Of Operations.........................................12 Item 3. Quantitative and Qualitative Disclosures About Market Risk........14 Item 4. Controls and Procedures...........................................14 PART II: OTHER INFORMATION....................................................15 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds........15 Item 6. Exhibits..........................................................15 Signatures.................................................................17 2 Part I: Financial Information ITEM 1: FINANCIAL STATEMENTS - ------------------------------ The accompanying Consolidated Financial Statements as of and for the three months ended March 31, 2006 have not been audited by independent certified public accountants but, in the opinion of the management of CableTel International Corporation ("CIC" or "the Company"), all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of CIC's consolidated financial position, consolidated results of operations and consolidated cash flows at the dates and for the periods indicated, have been included. CabelTel International Corporation Consolidated Balance Sheets (Amounts in thousands) March 31, December 31, Assets 2006 2005 (Unaudited) ------------ ------------ Current assets Cash and cash equivalents $ 135 $ 650 Accounts receivable-trade 326 339 Note receivable 156 306 Other current assets 340 179 ------------ ------------ Total current assets 957 1,474 Notes receivable net of deferred income 310 309 Property and equipment, at cost Land and improvements 2,232 2,232 Buildings and improvements 5,299 5,298 Equipment and furnishings 294 292 Proven oil and gas properties (full cost method) 1,401 1,401 ------------ ------------ 9,226 9,223 Less accumulated depreciation and depletion 1,048 963 ------------ ------------ 8,178 8,260 Deferred tax asset 1,161 1,161 Due from CableTEL AD - related party 8,236 8,004 Other assets 866 872 ------------ ------------ $ 19,708 $20,080 ============ ============ The accompanying notes are an integral part of this statement. 3 CabelTel International Corporation Consolidated Balance Sheets - Continued (Amounts in thousands, except share amounts) March 31, December 31, Liabilities and Stockholders' equity 2006 2005 (Unaudited) ------------ ------------ Current liabilities Current maturities of long-term debt $ 2,384 $ 2,383 Accounts payable - trade 690 842 Accrued expenses 990 1,236 Other current liabilities 414 371 ------------ ------------ Total current liabilities 4,478 4,832 Long-term debt 13,527 13,560 Other long term liabilities 1,249 936 ------------ ------------ Total liabilities 19,254 19,328 Stockholders' equity Preferred stock, Series B 1 1 Preferred stock, Series J 2% 3,150 3,150 Preferred stock, Series J 2% contra equity (3,150) (3,150) Common stock $.01 par value; authorized, 4,000,000 shares; 976,955 shares issued and outstanding 10 10 Additional paid-in capital 55,966 55,966 Accumulated deficit (55,523) (55,225) ------------ ------------ 454 752 ------------ ------------ $ 19,708 $ 20,080 ============ ============ The accompanying notes are an integral part of this statement. 4 CabelTel International Corporation Consolidated Statements of Operations (Amounts in thousands, except per share data) For The Three Month Period Ended March 31, 2006 2005 ------- ------- (Unaudited) Revenue Real estate operations $ 1,176 $ 1,100 Oil and gas operations 454 414 ------- ------- 1,630 1,514 ------- ------- Operating expenses Real estate operations 878 606 Oil and gas operations 331 267 Lease expense 236 231 Depletion, depreciation and amortization 125 109 Corporate general and administrative 215 262 ------- ------- 1,785 1,475 ------- ------- Operating earnings (loss) (155) 39 Other income (expense) Interest income 317 95 Interest expense (460) (190) Net loss on sale of assets -- (118) Other -- 32 ------- ------- (143) (181) ------- ------- Loss from continuing operations (298) (142) Discontinued operations Gain (loss) from discontinued operations -- 5 ------- ------- Net earnings (loss) applicable to common shares (298) (137) ------- ------- Earnings per common share - basic Continuing operations $ (0.31) $ (0.14) Discontinued operations -- -- Net earnings (loss) per share $ (0.31) $ (0.14) ======= ======= Weighted average of common and equivalent shares outstanding - basic and diluted 977 977 The accompanying notes are an integral part of this statement. 5
CabelTel International Corporation Consolidated Statements of Cash Flow (Amounts in thousands) For the three month Period Ended March 31, 2006 2005 ----------- ----------- (Unaudited) (Unaudited) Cash flows from operating activities Net earnings (loss) $ (298) $ (137) Adjustments to reconcile net earnings (loss) to net cash (used in) operating activities Depreciation and amortization 125 109 Loss on sale of assets -- 118 Changes in operating assets and liabilities Accounts receivable 13 (38) Interest receivable (232) -- Other current and non current assets (195) (1,033) Accounts payable and other liabilities (42) 499 ----------- ----------- Net cash (used in) operating activities (629) (482) ----------- ----------- Cash flows used in investing activities Repayment of notes receivable 150 100 Proceeds from the sale of property -- 1,910 Purchase of property and equipment (3) (32) ----------- ----------- Net cash provided by investing activities 147 1,978 Cash flows from financing activities Net advances from affiliates -- 562 Payments on debt (33) (2,593) Borrowings -- ----------- ----------- Net cash used in financing activities (33) (2,031) ----------- ----------- NET DECREASE IN CASH AND (515) (535) CASH EQUIVALENTS Cash and cash equivalents at beginning of period 650 762 ----------- ----------- Cash and cash equivalents at end of period $ 135 $ 227 =========== ===========
The accompanying notes are an integral part of this statement. 6 Notes to Consolidated Financial Statements for the Unaudited Three Months Ended March 31, 2006 and 2005 Note A: Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of CabelTel International Corporation and its majority-owned subsidiaries (collectively, the "Company"). All significant intercompany transactions and accounts have been eliminated. The unaudited financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2005. Operating results for the three month period ended March 31, 2006 are not necessarily indicative of the results that may be expected for any subsequent quarter or for the year ended December 31, 2006. Certain balances in 2005 have been reclassified to conform to the 2006 presentation. Note B: Notes Receivable and Deferred Gain from Sale of Property As a result of the sale of two properties in 2001, the Company holds tax-exempt notes in the amount of $4,030,000, bearing interest at 9.5%. The notes mature on April 1, 2032, and August 1, 2031, respectively. The repayment of the notes and interest thereon is limited to the cash flow of the respective properties either from operations, refinancing or sale. The Company has deferred gains in the amount of $3,721,000 as well as unpaid interest, which will be recognized as cash is received. The Company also sold a property in March 2005 and received, among other considerations, a $200,000 non-interest bearing note. The repayment of the note and interest thereon is limited to the cash flow of the property either from operations, refinancing or sale. Subsequent to the sale the Company has received payments totaling $50,000 and has deferred gains in the amount of $150,000 which will be recognized as cash is received. Note C: Due from Cabletel AD - related party On October 12, 2004, the Company acquired, for 31,500 shares of newly-designated 2% Series J Preferred Stock, 74.8% of CableTEL AD ("CableTEL"), a Bulgarian telecommunications company. This transaction is more fully described in Part I, Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2005. 7
Since that time the Company has advanced, for interest bearing notes, $7.2 million to CableTEL using funds advanced to the Company from related parties, for notes bearing identical interest terms to those granted CableTEL. The table below summarizes the notes, accrued interest and other funds due from CableTEL (in thousands). 2006 2005 ------ ------ Notes receivable $7,247 $7,247 Accrued Interest 829 597 Other 160 160 ------ ------ Total $8,236 $8,004 ====== ====== Note D: Long-Term Obligations Long-term debt is comprised of the following (in thousands): March 31, December 31, 2006 2005 ------------ ------------ Notes payable to financial institutions maturing through $ 6,309 $ 6,341 2018 at variable and fixed interest rates ranging from 5 3/4% to 11% and collateralized by real property, fixtures, equipment and the assignment of rents Notes payable to individuals and companies maturing through 2023 at variable and fixed interest rates ranging from 10% to 18% and collateralized by real property, personal property, fixtures, equipment and the assignment of rents 2,255 2,255 Notes payable to related parties bearing interest at rates ranging from 15% to 18% (funds re-advanced to CableTEL AD) 7,347 7,347 ------------ ------------ 15,911 15,943 Less: current maturities 2,384 2,383 ------------ ------------ $ 13,527 $13,560 ------------ ------------
NOTE E: Discontinued Operations The Company owned an assisted living property in Greenville, South Carolina. In August 2002, the Company leased the property to an unrelated third party who has been operating the property. The monthly lease payments received by the Company approximated the Company's cost for interest and real estate taxes. In May 2005, the Company sold the property to the lessee for the amount of the existing mortgage on the property, which approximated the Company's carrying value for the property. 8
In March 2005, the company sold an assisted living facility in North Carolina and recorded a loss of $42,000. The operations of that property are reflected as a discontinued operation in 2005. NOTE F: Segment Reporting Business Operations The Company operates two separate distinct businesses o The ownership and operation of real estate through one retirement community in King City, Oregon, with a capacity of 114 residents and ownership and operation of an outlet mall, with approximately 315,000 square feet of retail space available for lease, in Gainesville, Texas. o The ownership of oil and gas leases in Gregg and Rusk Counties, Texas, on which 48 producing oil wells were operating as of March 31, 2006. The segment information and reconciliation to income (loss) from operations for the period ended March 31, 2006 and March 31, 2005 are as follows (amounts in thousands): Three months ended March 31, 2006 CIC Corporate Real Estate Oil Operation Consolidated ------------- ------------- ------------- ------------- Revenue Real estate operations $ -- $ 1,176 $ -- $ 1,176 Oil & gas operations -- -- 454 454 ------------- ------------- ------------- ------------- 1,176 454 1,630 ------------- ------------- ------------- ------------- Operating expenses Operations -- 878 331 1,209 Lease expense 22 214 -- 236 Depletion, depreciation and amortization 4 99 22 125 Corporate general and administrative 215 -- -- 215 ------------- ------------- ------------- ------------- 241 1,191 353 1,785 ------------- ------------- ------------- ------------- Operating earnings (loss) (241) (15) 101 (155) Interest Income 317 -- -- 317 Interest (expense) (263) (193) (4) (460) ------------- ------------- ------------- ------------- Net earnings (loss) from continuing operations $ (187) $ (208) $ 97 $ (298) ------------- ------------- ------------- ------------- Total assets $ 9,204 $ 8,463 $ 2,041 $ 19,708 ============= ============= ============= ============= 9 Three months ended March 31, 2005 CIC Corporate Real Estate Oil Operation Consolidated ------------- ------------- ------------- ------------- Revenue $ -- $ 1,100 $ 414 $ 1,514 Operating expenses Operations -- 606 267 873 Lease expense 20 211 -- 231 Depletion, depreciation and amortization 2 81 26 109 Corporate general and administrative 262 -- -- 262 ------------- ------------- ------------- ------------- 284 898 293 1,475 ------------- ------------- ------------- ------------- Operating earnings (loss) (284) 202 121 39 Interest Income 40 -- -- 40 Interest (expense) (54) (81) -- (135) Other 32 -- -- 32 ------------- ------------- ------------- ------------- Net earnings (loss) from $ (308) $ 121 $ 45 $ (24) continuing operations ------------- ------------- ------------- ------------- Total assets $ 5,848 $ 8,507 $ 1,680 $ 16,035 ============= ============= ============= =============
10 WARNING CONCERNING FORWARD LOOKING STATEMENTS - --------------------------------------------- The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. This Report on Form 10-Q may contain forward-looking statements within the meaning of the federal securities laws, principally, but not only, under the caption "Management's Discussion and Analysis of Financial Condition" and "Results of Operations." We caution investors that any forward-looking statements in this report, or which management may make orally or in writing from time to time, are based on management's beliefs and on assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "result" and similar expressions which do not relate solely to historical matters are intended to identify forward-looking statements. These statements are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors, that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. We caution you that, while forward-looking statements reflect our good faith beliefs when we make them, they are not guarantees of future performance and are impacted by actual events when they occur after we make such statements. We expressly disclaim any responsibility to update our forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward-looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends. Some of the risks and uncertainties that may cause our actual results, performance, or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the factors listed and described at Item 1A "Risk Factors" in the Company's Annual Report on Form 10-K, which investors should review. There have been no changes from the risk factors previously described in the Company's Form 10-K for the fiscal year ended December 31, 2005 (the "Form 10-K"). Other sections of this report may also include suggested factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for management to predict all such matters; nor can we assess the impact of all such matters on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Investors should also refer to our quarterly reports on Form 10-Q for future periods and current reports on Form 8-K as we file them with the SEC, and to other materials we may furnish to the public from time to time through Forms 8-K or otherwise. 11 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - -------------------------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- Critical Accounting Policies and Estimates The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Certain of the Company's accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments and estimates are based upon the Company's historical experience, current trends, and information available from other sources that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes the following critical accounting policies are more significant to the judgments and estimates used in the preparation of its consolidated financial statements. Revisions in such estimates are recorded in the period in which the facts that give rise to the revisions become known. The Company's allowance for doubtful accounts receivable and notes receivable is based on an analysis of the risk of loss on specific accounts. The analysis places particular emphasis on past due accounts. Management considers such information as the nature and age of the receivable, the payment history of the tenant, customer or other debtor and the financial condition of the tenant or other debtor. Management's estimate of the required allowance, which is reviewed on a quarterly basis, is subject to revision as these factors change. Deferred Tax Assets Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The future recoverability of the Company's net deferred tax assets is dependent upon the generation of future taxable income prior to the expiration of the loss carry forwards. The company believes that it will generate future taxable income to fully utilize the net deferred tax assets. Liquidity and Capital Resources At March 31, 2006, the Company had current assets of $1 million and current liabilities of $4.5 million. Included in current liabilities is an obligation of principal and accrued interest of $3 million, the terms of which are similar to that of preferred stock whereby the Company can only pay this obligation out of available earned surplus. Also included in current liabilities is an obligation to pay approximately $300,000 to a tenant at the Company's outlet mall. The Company has the option to offset this obligation against future rent payments from this tenant. Cash and cash equivalents at March 31, 2006 and December 31, 2005 were $135,000 and $650,000 respectively. The Company's principal sources of cash have been property and oil well operations as well as the collection of certain notes 12 receivables. If such sources are not sufficient to satisfy the Company's obligations as they mature management may also sell income producing properties, refinance properties and/or incur additional debt to meet cash requirements. Results of Operations The Company reported a net loss of $298,000 for the three months ended March 31, 2006 as compared to a net loss of $137,000 for the three period ending March 31, 2005. For the three months ended March 31, 2006, the Company recorded revenues of $1.2 million for its real estate operations, as compared to $1.1 million for the three months ended March 31, 2005. The Company's retirement property is fully occupied and it is anticipated that it will remain so during 2006. For the three months ended March 31, 2006, revenues for the oil and gas operation was $454,000 as compared to $414,000 for the three months ended March 31, 2005. The increase was due principally to increases in the price of crude oil. For the three months ended March 31, 2006, real estate operating expenses were $878,000 as compared to $606,000 for the three months ended March 31, 2005. The increase was due principally to increases in operating costs, including promotional expenses, for the Gainesville outlet mall during the period. For the three months ended March 31, 2006, operating expenses for the oil and gas operation were $331,000 as compared to $267,000 for the three months ended March 31, 2005. The increase was due principally to the cost of well repairs. For the three months ended March 31, 2006, the depletion, depreciation and amortization expense was $125,000 as compared to $109,000 for the three months ended March 31, 2005. For the three months ended March 31, 2006, interest income was $317,000 as compared to $95,000 for the three months ended March 31, 2005. The increase was due principally to an increase in notes receivable due from CableTEL AD, a related party, in 2006, as compared to 2005. Interest expense was $460,000 for the three months and three months ended March 31, 2006 as compared to $190,000 for the three months and three months ended March 31, 2005. The increase was primarily due to interest paid on borrowings which funded the increased notes receivable from CableTEL mentioned above. In 2005 the loss on the sale of assets was $118,000 for the three months ended March 31. The Company sold certain of its non-producing oil wells when it was determined that we were unlikely to operate them in the future. The Company incurred a loss of $76,000. The Company also incurred certain legal and closing costs in its sale of the assisted living property in North Carolina. 13 Inflation The Company's principal sources of revenue are from rents in a retirement community, an outlet shopping mall and the sale of crude oil by its oil and gas operations. The operation of the real estate entities is affected by rental rates that are highly dependent upon market conditions and the competitive environment in the areas where the properties are located. Worldwide consumption patterns seem to preclude competition in the oil business in the foreseeable future. Compensation to employees and maintenance are the principal cost elements relative to the operations of the entities. Although the Company has not historically experienced any adverse effects of inflation on salaries or other operating expenses, there can be no assurance that such trends will continue or that, should inflationary pressures arise, the Company will be able to offset such costs by increasing rental rates in its real estate properties. The price of oil is dictated by market conditions and the Company could not arbitrarily increase the price of its oil. Environmental Matters The Company has conducted environmental assessments on most of its existing owned or leased properties. These assessments have not revealed any environmental liability that the Company believes would have a material adverse effect on the Company's business, assets or results of operations and the Company is not aware of any such environmental liability. The Company believes that all of its properties are in compliance in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products. The Company has not been notified by any governmental authority and is not otherwise aware of any material non-compliance, liability or claim relating to hazardous or toxic substances or petroleum products in connection with any of its communities. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - -------------------------------------------------------------------- Interest Rate Risk Nearly all of the Company's debt is financed at fixed rates of interest. Therefore, we have minimal risk from exposure to changes in interest rates. ITEM 4. CONTROLS AND PROCEDURES - --------------------------------- As required by Rule 13(a)-15(b), the Company's management, including the principal executive officer, chief financial officer and principal accounting officer, conducted an evaluation as of the end of the period covered by this report, of the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rule 13(a)-15(e). Based on that evaluation, the chief executive officer and the chief financial officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report. There have been no changes in the Company's internal controls over financial reporting during the period ended March 31, 2006 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. It should be noted that any system of controls, however well designed and operated, can only provide reasonable and not absolute assurance that the objectives of the system will be met. In addition, the design of any control system is based, in part, on certain assumptions about the likelihood of future events. 14
Part II: Other Information ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS - --------------------------------------------------------------------- During the period of time covered by this report, the Company did not repurchase any of its equity securities. The following table sets forth a summary for the quarter, indicating no repurchases were made and that, at the end of the period covered by this report, no specified number of shares may be purchased under any program in place. Maximum Total Number Number of of Shares Shares that May Average Purchased as Yet be Total Number Price Part of Publicly Purchased of Shares Paid per Announced Under the Period Purchased Share Program Program(a) - ------ ---------------- ---------------- ---------------- ---------------- Balance as of December 31, 2005......... -- -- -- -- January 1-31, 2006...................... -- $ -- -- -- February 1-28, 2006..................... -- -- -- -- March 1-31, 2006 ....................... -- -- -- -- ---------------- ---------------- ---------------- ---------------- Total .................................. -- $ -- -- -- ================ ================ ================ ================
(a) As a courtesy to stockholders of less than 100 shares and to relieve such stockholders of having to pay a broker's commission, the Company, although not obligated to do so, has periodically repurchased its common stock at the then most recent closing price of the Company's common stock on the last trading day before the stock certificate(s) is (are) actually received by the Company from the stockholder. The number of such shares purchased in any period of time has been minimal; no purchases were made during the quarter ended March 31, 2006. ITEM 6. EXHIBITS. - ------------------- The following exhibits are filed herewith or incorporated by references as indicated below: Exhibit Designation Exhibit Description 3.1 Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.1 to Registrant's Form S-4 Registration Statement No. 333-55968 dated December 21, 1992) 3.2 Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.5 to Registrant's Form 8-K dated April 1, 1993) 3.3 Restated Articles of Incorporation of Greenbriar Corporation (incorporated by reference to Exhibit 3.1.1 to Registrant's Form 10-K dated December 31, 1995) 15 Exhibit Designation Exhibit Description 3.4 Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit to Registrant's PRES 14-C dated February 27, 1996) 3.5 Bylaws of Registrant (incorporated by reference to Exhibit 3.2 to Registrant's Form S-4 Registration Statement No. 333-55968 dated December 21, 1992) 3.6 Amendment to Section 3.1 of Bylaws of Registrant adopted October 9, 2003 (incorporated by reference to Exhibit 3.2.1 to Registrant's Form S-4 Registration Statement No. 333-55968 dated December 21, 1992) 3.7 Certificate of Decrease in Authorized and Issued Shares effective November 30, 2001 (incorporated by reference to Exhibit 2.1.7 to Registrant's Form 10-K dated December 31, 2002) 3.8 Certificate of Designations, Preferences and Rights of Preferred Stock dated May 7, 1993 relating to Registrant's Series B Preferred Stock (incorporated by reference to Exhibit 4.1.2 to Registrant's Form S-3 Registration Statement No. 333-64840 dated June 22, 1993) 3.9 Certificate of Voting Powers, Designations, Preferences and Rights of Registrant's Series F Senior Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.2 of Registrant's Form 10-KSB for the fiscal year ended December 31, 1997) 3.10 Certificate of Voting Powers, Designations, Preferences and Rights of Registrant's Series G Senior Non-Voting Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.3 of Registrant's Form 10-KSB for the fiscal year ended December 31, 1997) 3.11 Certificate of Designations dated October 12, 2004 as filed with the Secretary of State of Nevada on October 13, 2004 (incorporated by reference to Exhibit 3.4 of Registrant's Current Report on Form 8-K for event occurring October 12, 2004) 3.12 Certificate of Amendment to Articles of Incorporation effective February 8, 2005 (incorporated by reference to Exhibit 3.5 of Registrant's Current Report on Form 8-K for event occurring February 8, 2005) 31.1* Rule 13a-14(a) Certification by Chief Executive Officer 31.2* Rule 13a-14(a) Certification by Chief Financial Officer 32.1* Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *Filed herewith. 16 SIGNATURES ---------- Pursuant to the requirements of the Securities and Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CabelTel International Corporation Date: May 19, 2006 By: /s/ Gene S. Bertcher ---------------------------------- President Chief Financial Officer 17 EX-31.1 2 cabel10qex311033106.txt CERTIFICATION OF CEO UNDER SECTION 302 EXHIBIT 31.1 CHIEF EXECUTIVE OFFICER'S RULE 13a-14(a)/15d-14(a) CERTIFICATION I, Ronald C. Finley, certify that: 1. I have reviewed this quarterly report on Form 10-Q of CabelTel International Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made in light of the circumstances under which such statements were made, and is not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13o-15(f) and 15(d)-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or used such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Dated: May 19, 2006. /s/ Ronald C. Finley ----------------------------------------- Ronald C. Finley, Chief Executive Officer EX-31.2 3 cabel10qex312033106.txt CERTIFICATION OF CFO UNDER SECTION 302 EXHIBIT 31.2 CHIEF FINANCIAL OFFICER'S RULE 13a-14(a)/15d-14(a) CERTIFICATION I, Gene S. Bertcher, certify that: 1. I have reviewed this quarterly report on Form 10-Q of CabelTel International Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made in light of the circumstances under which such statements were made, and is not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13o-15(f) and 15(d)-15(f)) for the registrant and have: (a) Designed such disclosure controls and procedures, or used such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. Dated: May 19, 2006. /s/ Gene S. Bertcher ------------------------------- Gene S. Bertcher, President and Chief Financial Officer EX-32.1 4 cabel10qex321033106.txt CERTIFICATION OF CEO AND CFO UNDER SECTION 906 EXHIBIT 32.1 OFFICERS` SECTION 1350 CERTIFICATIONS Each of the undersigned officers of CabelTel International Corporation, a Nevada corporation (the "Company") hereby certifies that: (i) The Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2006 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and (ii) The information contained in the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2006 fairly presents, in all material respects, the financial condition and results of operations of the Company, at and for the periods indicated. Dated: May 19, 2006 By: /s/ Ronald C. Finley --------------------------------- Ronald C. Finley, Chief Executive Officer By: /s/ Gene S. Bertcher --------------------------------- Gene S. Bertcher, President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----