<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>cabel10q033106.txt
<TEXT>
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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)
================================================================================
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
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<TABLE>
<CAPTION>
CabelTel International Corporation
Consolidated Statements of Cash Flow
(Amounts in thousands)
For the three month
Period Ended March 31,
2006 2005
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
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
=========== ===========
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE>
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
<PAGE>
<TABLE>
<CAPTION>
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
------------ ------------
<S> <C> <C>
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
------------ ------------
</TABLE>
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
<PAGE>
<TABLE>
<CAPTION>
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
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
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
<PAGE>
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
============= ============= ============= =============
</TABLE>
10
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
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<TABLE>
<CAPTION>
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)
------ ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Balance as of December 31, 2005......... -- -- -- --
January 1-31, 2006...................... -- $ -- -- --
February 1-28, 2006..................... -- -- -- --
March 1-31, 2006 ....................... -- -- -- --
---------------- ---------------- ---------------- ----------------
Total .................................. -- $ -- -- --
================ ================ ================ ================
</TABLE>
(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
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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
<PAGE>
SIGNATURES
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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
</TEXT>
</DOCUMENT>