SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                      FORM 10-Q
                         Quarterly Report Under Section 13 or 15(d)
                          of the Securities Exchange Act of 1934.

                            For the quarter ended June 30, 2004
                               Commission file number 0-16734

                                 C.E.C. INDUSTRIES CORP.

                   (Exact name of registrant as specified in its charter)


                   Nevada                                      87-0217252
        (State or other jurisdiction of                    (I.R.S. Employer
       incorporation or organization)                    Identification No.)


         2999 N.E. 191st street, Penthouse 2,
         Aventura, FL                                             33180
        (Address of principal executive offices)                (Zip Code)

        Registrant's telephone number, including area code   (866) 820-5139


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 _____

As of August 16, 2004 there were 58,724,707 shares of common stock
outstanding.

<PAGE>
                                   INDEX


PART I - FINANCIAL INFORMATION                                   Page No.

   Item 1.   Financial Statements

        Balance Sheet as of June 30, 2004 and
            March 31, 2004                                        3-4

        Statement of Operations for the quarters
            ended June 30, 2004 and March 31, 2004                  5

        Statement of Cash Flows for the three months ended
            June 30, 2004 and 2003                                  6

          Notes to Financial Statements                          7-12
     Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of Operation        13


PART II - OTHER INFORMATION

     Item 1.   Legal Proceedings                                   14

     Item 2.   Changes in Securities                               14

     Item 3.   Defaults by the Company upon its
               Senior Securities                                   14

     Item 4.   Submission of Matter to a Vote of
               Security Holders                                    14

     Item 5.   Other Information                                   14

     Item 6.   Exhibits and Reports of Form 8-K                    14

     SIGNATURES                                                    14

                                   Page Two

<PAGE>

                           PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
                                C.E.C. Industries Corp.
                             (A Development Stage Company)
                                     BALANCE SHEET
                                          AS AT
                            June 30, 2004 and March 31, 2004
<CAPTION>
<TABLE>
                                  June 30, 2004             March 31, 2004
     ASSETS
<S>                               <C>                       <C>
CURRENT ASSETS
Cash                                     455.00                 13,507.00
                                    -----------               -----------
Total Current Assets                     455.00                 13,507.00


OTHER ASSETS
Oil & Gas Interests                                            116,415.00
Technology Rights                                              255,000.00
                                    -----------               -----------
TOTAL OTHER ASSETS                         0.00                371,415.00

TOTAL ASSETS                        $    455.00               $384,922.00
                                    -----------               -----------
                                    -----------               -----------

                                     -UNAUDITED-

                  See accompanying notes to financial statements

</TABLE>
                                            Page Three
<PAGE>

                                   C.E.C. Industries Corp.
                                 (A Development Stage Company)
                                        BALANCE SHEET
                                            AS AT
                                June 30, 2004 and March 31, 2004

<TABLE>                               LIABILITIES & EQUITY
<CAPTION>
                                                   June 30, 2004     March 31, 2004
<S>                                                <C>               <C>
     CURRENT LIABILITIES

Accounts Payable                                   $ 39,926.00       $789,950.00
Judgement payable                                   207,306.00        207,306.00
Convertible notes payable                           231,200.00        218,700.00
                                                   -----------     -------------
Total Current Liabilities                          $478,432.00     $1,215,956.00
                                                   -----------     -------------
Total Liabilities                                  $478,432.00     $1,215,956.00


     EQUITY

Common Stock-50,000,000 common shares par
value .001 authorized.  Issued and
outstanding at March 31, 2004                      2,097,405.00     2,097,405.00
58,724,707 shares.  Issued and
outstanding at June 30, 2004                       7,691,220.00     7,691,220.00
58,724,707 shares.

Retained earnings, or (Deficit accumulated
during development stage)                        (10,266,602.00)  (10,619,659.00)
                                                 ---------------  ---------------
Total Stockholders' Equity                         (477,977.00)     (831,034.00)
                                                 ---------------  ---------------
     TOTAL LIABILITIES & OWNER'S EQUITY            $116,891.00      $116,801.00
                                                 ---------------  ---------------
                                                 ---------------  ---------------

</TABLE>
                                           -UNAUDITED-

                                            Page Four
<PAGE>

                                C.E.C. Industries Corp.
                              (A Development Stage Company)
                                 STATEMENT OF OPERATIONS
                                 FOR THE QUARTERS ENDED
                         ending June 30, 2004 and March 31, 2004
<TABLE>
<CAPTION>
                                                 June 30, 2004   March 31, 2004
<S>                                              <C>             <C>
     REVENUES
Interest Income                                      1,333.00             0.00

    COSTS AND EXPENSES
Selling, General and Administrative                  1,885.00         1,305.00
Consulting                                           5,000.00        21,700.00

Total Costs and Expenses                             6,885.00        23,005.00

     Net Ordinary Income or (Loss)                  (5,552.00)      (23,005.00)
                                                  -----------      -----------
                                                  -----------      -----------
    OTHER ITEMS
Write of Notes Receivable                          (25,000.00)            0.00
Write of Technology Rights                        (255,000.00)            0.00

                                                  (280,000.00)            0.00

     Net Loss                                     (295,552.00)      (23,005.00)

Weighted average number of common
shares outstanding                                 58,724,707       35,508,608

    Net Loss
    Per Share                                             nil              nil

 </TABLE>
                                           -UNAUDITED-

                                            Page Five
<PAGE>

                                 C.E.C. Industries Corp.
                               (A Development Stage Company)
                                 STATEMENT OF CASH FLOWS
                                       FOR PERIOD
                                 FOR THE QUARTERS ENDED
                          ending June 30, 2004 and June 30, 2003

<TABLE>
<CAPTION>
                                                 June 30, 2004   June 30, 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                              <C>             <C>
  Net Loss for the period                        $(285,552.00)     $(23,005.00)
  Adjustments to Reconcile Net Loss to Net
  Cash Used in Operating Activities:
  Stock Issued for Services                                 -        21,700.00
  Write of Technology Rights                       255,000.00
  Write of Notes Receivable                         25,000.00

  Changes in Assets and Liabilities:                                  1,250.00
  Increase in Prepaid Expenses
  Increase in Accounts Payable                       5,000.00                -
                                                 -------------     -----------

NET CASH USED IN OPERATING ACTIVITIES                 (552.00)          (55.00)
                                                 -------------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Acquisition of Technology Rights                          -                -
                                                 -------------     -----------

NET CASH USED IN INVESTING ACTIVITIES                       -                -
                                                 -------------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Notes Payable                                     12,500.00
  Notes Receivable                                 (25,000.00)
                                                 -------------     -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES           12,500.00
                                                 -------------     -----------

CHANGE IN CASH                                     (13,052.00)          (55.00)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD     13,507.00           495.00
                                                 -------------     -----------
CASH AND CASH EQUIVALENTS - BEND PERIOD                455.00           440.00
                                                 -------------     -----------
SUPPLEMENTARY INFORMATION
Interest paid                                    $          -      $         -
Taxes paid                                       $          -      $         -

</TABLE>
                                           -UNAUDITED-

                                            Page Six
<PAGE>


                 C.E.C. Industries, Corp. and Subsidiaries
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)

 1.  General

     Business and Principles of Consolidation

The consolidated financial statements include the accounts of C.E.C.
Industries Corp. (the  Parent) and its subsidiaries, Custom Environmental
International, Inc. ("CEI") (80% owned the reduction in ownership of CEI from
90% was due to the issuance of additional shares of common stock to employees
in lieu of salaries), Plata Oro (57% owned), Moonridge Development Corp.
(100% owned), Sterling Travel (100% owned), Microsphere Technology (100%
owned), Islet Transplant Technology (100% owned), Mid-Nevada Art, Inc. (100%
owned) and Basia Holding, Inc. (100% owned.). During the fiscal year 1996,
the Sterling Travel (100%) purchase was canceled due nonperformance by
Sterling Travel. During the fiscal year 1996, Microshpere Technology (100%)
and Islet Transplant Technology (100%) operations were discontinued. During
the fiscal year 1997, the Company sold Moonridge Development Corp. Custom
Environmental International, Inc. is developing and marketing a carbon
regeneration furnace.  Plata Oro is involved in minerals exploration but has
been inactive for several years.  Moonridge Development Corp. develops
unimproved land in Las Vegas, Nevada.  Sterling Travel is a travel agency in
Boca Raton, Florida. Microsphere Technology and Islet Transplant Technology
are engaged in research and development of medical technology.  Mid-Nevada
Art, Inc. purchases artworks for lease and rental. Basia Holding, Inc. holds
title by quitclaim deed to approximately 9,000 unencumbered acres of land and
coal  reserves. All subsidiaries are inactive and the Company does not expect
any operations in aforementioned subsidiaries in the future.  The books and
records of the Company already reflect the writedown of investments in these
subsidiaries in prior years.


     Development Stage Enterprise

The Company has no revenues and has just commenced operations. The Company's
activities are accounted for as those of a "Development Stage Enterprise" as
set forth in Financial Accounting Standards Board Statement No. 7 ("SFAS 7").
Among the disclosures required by SFAS 7 are that the Company's financial
statements be identified as those of a development stage company, and that
the statements of operations, stockholders' equity(deficit) and cash flows
disclose activity since the date of the Company's inception.


 2.  SIGNIFICANT ACCOUNTING POLICIES

     Basis of Accounting

These financial statements are presented on the accrual method of accounting
in accordance with generally accepted accounting principles.  Significant
accounting principles followed by the Company and the methods of applying
those principles, which materially affect the determination of financial
position and cash flows, are summarized below.

     Basis of Consolidation

The accompanying consolidated financial statements include the accounts of
C.E.C Industries, Corp. and its wholly owned subsidiaries, as named above.
All significant intercompany transactions and balances have been eliminated
on consolidation
                                 Page Seven
<PAGE>

                 C.E.C. Industries, Corp. and Subsidiaries
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS

 2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period.
Actual results may differ from those estimates.

     Cash and Cash Equivalents

The Company considers all highly liquid debt instruments and investments,
purchased with an original maturity date of three months or less, to be cash
equivalents.

     Income Taxes

The Company accounts for income taxes under SFAS No. 109, which requires the
asset and liability approach to accounting for income taxes.  Under this
method, deferred assets and liabilities are measured based on differences
between financial reporting and tax bases of assets and liabilities
measured using enacted tax rates and laws that are expected to be in effect
when differences are expected to reverse.

     Net earnings(loss) per share

Basic and diluted net loss per share information is presented under the
requirements of SFAS No. 128, Earnings per Share.  Basic net loss per share
is computed by dividing net loss by the weighted average number of shares of
common stock outstanding for the period, less shares subject to repurchase.
Diluted net loss per share reflects the potential dilution of securities by
adding other common stock equivalents, including stock options, shares
subject to repurchase, warrants and convertible preferred stock, in the
weighted-average number of common shares outstanding for a period, if
dilutive.  All potentially dilutive securities have been excluded from this
computation, as their effect is anti-dilutive.

     Fair Value of Financial Instruments

The carrying amount of cash and accounts payable are considered to be
representative of their respective fair values because of the short-term
nature of these financial instruments


     Revenue Recognition

Royalty revenues are recorded as received from oil and gas leasehold
interests and retained overriding royalty rights.


 3.  RECENT ACCOUNTING PRONOUNCEMENTS

In July 2001, SFAS No. 141, "Business Combinations," and SFAS No. 142,
"Goodwill and Other Intangible Assets," were issued. SFAS No. 141 changes
certain accounting methods used for business combinations. Specifically, it
requires use of the purchase method of accounting for all business
combinations, and eliminates the pooling-of-interests method. SFAS No. 142
establishes new guidance on how to account for purchased intangible assets,
and for goodwill and intangible assets after a business combination is
completed.
                                      Page Eight
<PAGE>

                 C.E.C. Industries, Corp. and Subsidiaries
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS

 3.  RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. SFAS No. 144 supercedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
be Disposed of and APB No. 30, Reporting the Results of Operations -
Reporting the Effects of the Disposal of a Segment Business and
extraordinary, Unusual and Infrequently Occurring Events and Transactions.
SFAS No. 144 establishes a single accounting model for assets to be disposed
of by sale whether previously held and used or newly acquired. SFAS No. 144
retains the provisions of APB No. 30 for presentation of discontinued
operations in the income statement, but broadens the presentation to include
a component of an entity. SFAS No. 144 is effective for our fiscal year
beginning July 1, 2002.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities", which addresses accounting for
restructuring and similar costs. SFAS NO. 146 supersedes previous accounting
guidance, principally Emerging Issues Task Force Issue No. 94-3. SFAS No 146
requires that the liability for costs associated with an exit or disposal
activity be recognized when the liability is incurred, SFAS No. 146 also
establishes that the liability should initially be measured and recorded at
fair value. Accordingly, SFAS No. 146 may affect the timing of recognizing
future restructuring costs as well as the amount recognized. SFAS NO. 146 is
effective for exit or disposal activities that are initiated after December
31, 2002.

In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition and Disclosure - an amendment of FASB Statement No.
123" (FAS 148). The statement amends SFAS 123 "Accounting for Stock Based
Compensation:" (FAS 123) to provide alternative methods of voluntarily
transition to the fair value based method of accounting for stock based
employee compensation. FAS 148 also amends the disclosure requirement of FAS
123 to require disclosure of the method used to account for stock based
employee compensation and the effect of the method on reported results in
both annual and interim financial statements. The disclosure provisions will
be effective for the Company beginning with the Company's quarter ended March
31, 2003. The Company has no current intention to change its policy of
accounting for stock-based compensation.

In November 2002, the FASB Interpretation No. 45 (FIN 45) "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others." FIN 45 requires that a liability be
recorded in the guarantor's balance sheet upon issuance of certain
guarantees. FIN 45 also requires disclosure about certain guarantees that an
entity has issued. The Company has implemented the disclosure requirements
required by FIN 45, which were effective for fiscal years ending after
December 15, 2002. The Company will apply the recognition provisions of FIN
45 prospectively to guarantees issued after December 31, 2002.

In January 2003, the FASB issued FASB Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities, and Interpretation of ARB
No.51." FIN 46 requires certain variable interest entities to be consolidated
by the primary beneficial of the entity if the equity investors in the entity
do not have characteristics of a controlling financial interest or do not
have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN 46
is effective for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 must be applied for the first
interim or annual period beginning on or after June 15, 2003.

                                         Page Nine
<PAGE>

                 C.E.C. Industries, Corp. and Subsidiaries
                       (A Development Stage Company)

                       NOTES TO FINANCIAL STATEMENTS

 3.  RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

On April 30, 2003 the FASB issued Statement No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." The Statement amends
and clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging
activities under Statement 133. The amendments set forth in Statement 149
improve financial reporting by requiring that contracts with comparable
characteristics be accounted for similarly. In particular, this Statement
clarifies under what circumstances a contract with an initial net investment
meets the characteristic of a derivative as discussed in Statement 133. In
addition, it clarifies when a derivative contains a financing component that
warrants special reporting in the statement of cash flows. This Statement is
effective for contracts entered into or modified after June 30, 2003.

On May 15, 2003 the FASB issued Statement No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity".
The Statement improves the accounting for certain financial instruments that,
under previous guidance, issuers could account for as equity. The new
Statement requires that those instruments be classified as liabilities in
statements of financial position. In addition to its requirements for the
classification and measurement of financial instruments in its scope,
Statement 150 also requires disclosures about alternative ways of settling
the instruments and the capital structure of entities, all of whose shares
are mandatorily redeemable. Most of the guidance in Statement 150 is
effective for all financial instruments entered into or modified after May
31, 2003.

Management's preliminary assessment of these recent pronouncements is that
they will not have a material impact on the Company's financial position or
results of operations since the Company is inactive.

 4.  TECHNOLOGY RIGHTS

On December 30, 2003 the Company acquired certain technology rights from
PayCard, a company providing payroll debit cards to employers and individuals.
This purchase was part of a purchase of 80% of the common stock of PayCard.
However, this acquisition was short lived and the shares reverted back to the
original owners before the year end.  The Company however retained the
technology rights to the software which were subsequently sold in June 2004
for reduction of certain debt of the Company for $ 255,000.  The writedown of
the technology rights has been reflected in the operating statement of the
Company.

 5.  CAPITAL STOCK TRANSACTIONS

On December 2, 2002, the Company consummated a 100:1 reverse stock split.

On December 2, 2002, the Company authorized a 100:1 reverse split.  All
common stock issues are listed as if the reverse had been effect all periods.

On December 3, 2002, the Company filed a S-8 authorizing the issuance of
10,000,000 of its par value $.001 common stock per the filed stock plan.

On December 3, 2002, the Company issued 200,000 shares of its Common Stock at
$.007 per share per its S-8 stock plan.

December 5, 2002, the Company issued 1,300,000 shares of its Common Stock at
$.007 per share per its S-8 stock plan.

                                       Page Ten
<PAGE>

                 C.E.C. Industries, Corp. and Subsidiaries
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS

 5.   CAPITAL STOCK TRANSACTIONS (CONTINUED)

On January 13, 2003, the Company issued 400,000 shares of its Common Stock at
$.007 per share per its S-8 stock plan.

On January 16, 2003, the Company issued 2,000,000 shares of its Common Stock
at $.007 per share per its S-8 stock plan.

On January 16, 2003, the board of directors authorized 30,000,000 shares of
the Company's Common Stock to be issued to the president for executive
compensation.  The stock is restricted and was valued at the S-8 issue price
of $.007 per share.

During the year ended March 31, 2004 the Company issued a total of 19,665,000
to consultants and management for consulting services rendered at a prices of
$ .027 and $ .007 respectively.

On December 30, 2003 the Company issued 3,000,000 shares of restricted common
stock for certain technology rights at a price of $ .10 per share.

From January 2004 to March 31, 2004 the Company issued a total of  1,700,000
shares of restricted common stock to consultants at a price of $ .007 per share.

 6.  CONVERTIBLE NOTES PAYABLE

On November 1, 2003, the Company issued $ 150,000 in convertible notes payable
in connection with certain advances.  These advances were subsequently
increased to $ 218,700.  The notes bear interest at the rate of 6.5% interest
and are due November 1, 2004.  These notes are convertible into common stock
based 70% of the average of the lowest of three days trading during the five
days preceding the conversion or the average of the lowest three days trading
prices during the five days preceding the funding dates of these notes.

 7.  INCOME TAXES

There has been no provision for U.S. federal, state, or foreign income taxes
for any period because the Company has incurred losses in all periods and for
all jurisdictions.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of deferred tax assets are as follows:

Deferred tax assets
   Net operating loss carry forwards             $10,266,602
   Valuation allowance for deferred tax assets   $10,266,602)
                                                 ------------
   Net deferred tax assets                       $         -
                                                 ------------
                                                 ------------

Realization of deferred tax assets is dependent upon future earnings, if any,
the timing and amount of which are uncertain.  Accordingly, the net deferred
tax assets have been fully offset by a valuation allowance. As of June 30,
2004, the Company had net operating loss carry forwards of approximately
$10,266,602 for federal and state income tax purposes.  These carry forwards,
if not utilized to offset taxable income begin to expire in 2018.
Utilization of the net operating loss may be subject to substantial annual
limitation due to the ownership change limitations provided by the Internal
Revenue Code and similar state provisions.  The annual limitation could
result in the expiration of the net operating loss before utilization

                                        Page Eleven
<PAGE>

                 C.E.C. Industries, Corp. and Subsidiaries
                       (A Development Stage Company)
                       NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 8.  RELATED PARTY TRANSACTIONS

On June 17, 2003, the Company issued 1,500,000 shares of its common stock to
its president, Mr. Brian Dvorak for executive compensation amounting to
$ 10,500.

 9.  COMMITMENTS & CONTINGENCIES

In a lawsuit subsequent to the date of the financial statements, a judgment
was entered in United States District Court, District of Utah, Central
Division, against C.E.C. Industries, Inc. in favor of George A. Matthews, Jr.
A former President and Director of C.E.C Industries.  The judgment was for
the amount of $207,306.93.  The company has filed an appeal with the United
States Court of Appeals for the Tenth Circuit.  The company has been unable
to post a bond.

As of the date hereof, the Company is not aware of any other material legal
proceedings, pending or contemplated, to which the Company is, or would be, a
party of which any of its property is, or would be the subject.

10.  GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of
the Company as a going concern.

The future success of the Company is likely dependent on its ability to
attain additional capital to develop its proposed business objectives and
ultimately, upon its ability to attain future profitable operations. There
can be no assurance that the Company will be successful in obtaining
financing, or that it will attain positive cash flow from operations.

The Company has sustained substantial losses over the years, the ability of
the Company to continue as a going concern is in question.

11.  SUBSEQUENT EVENTS

In July, 2004 the Company entered into agreements to sell its remaining assets.

The company has included the effects of the July transactions as the
transactions were materially complete by June 30, 2004.  Management believes
that the inclusion of the effects of these subsequent transactions more
clearly reflects the true financial picture of the company.

                                          Page Twelve
<PAGE>

1. Statement of Information Furnished

The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30,
2004, the results of operation for the three months ended June 30, 2004 and
2003 and the cash flows for the three months ended June 30, 2004 and 2003.
These results have been determined on the basis of generally accepted
accounting principles and practices and applied consistently with those used
in the preparation of the Company's 2004 Annual Report on Form 10-K.

Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that the
accompanying consolidated financial statement be read in conjunction with the
financial statements and notes thereto incorporated by reference in the
Company's 2000 Annual Report on Form 10-K.


Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

C.E.C. Industries Corp. is a Nevada corporation with principal and executive
offices located at 2999 N.E. 191st Street, Penthouse 2, Aventura, FL 33180,
telephone (866) 820-5139. C.E.C. Industries Corp. and it's consolidated
subsidiaries are referred to as either C.E.C. or the Company. C.E.C. is
currently engaged in seeking an acquisition or merger candidate.  C.E.C. was
incorporated as Justheim Petroleum Company in Nevada in 1952. C.E.C.
Management Corp. was merged into Justheim Petroleum Company effective
December 31, 1986, and was renamed C.E.C. Industries Corp. Prior to the
merger, Justheim had historically engaged in the business of acquiring,
holding and selling oil and gas leaseholds and retaining overriding royalty
rights. C.E.C. Management Corp. primarily was in the business of engineering
consulting and designing and marketing customized minerals processing systems
and equipment. The Company is currently not engaged in a primary business and
is seeking an acquisition or merger candidate.

The company has continued to go through major transitions pertaining to
direction and continued operations. During fiscal 2004, the Company earned no
revenues.

On November 30, 2003, CEC entered into an Acquisition and Financing Agreement
with PayCard Solutions, Inc., pursuant to which CEC's subsidiary, Paycard
Unlimited, Inc. purchased all of the outstanding shares of PayCard in
consideration for the issuance of  3,000,000 CEC shares to the PayCard
shareholders and 200 shares or twenty (20%) percent of the Subsidiary's
outstanding  shares,  whichever  is  greater.  Pursuant to the Agreement, CEC
agreed to lend a total of $250,000 to PayCard for a term of one year with
eight (8%) interest which shall be secured by Paycard.  A total of $250,000
was loaned to PayCard pursuant to this agreement through loan secured by CEC
and of such amount a total of $53,150 was provided by an independent entity.
The Company has subsequently discovered that a shareholder of such entity was
indicted for bank fraud and related charges in federal court in California.
The individual has provided information confirming that loan proceeds from
the entity have no connection to the pending criminal case against the
individual.  The Company is in the process of attempting to obtain
independent verification to confirm the source of funds loaned by the
individual through the entity.  Once the Company completes its due diligence
and obtains additional relevant information from the individual and the
entity, it will take all necessary and appropriate steps to protect the
interests of the Company with respect to these funds.  As a precautionary
measure, the Company has determined that it is appropriate to take immediate
steps to sever its relationship with both the individual and the entity as

                             Page Thirteen
<PAGE>

well as any other companies affiliated with the individual, and  return, to
the extent practicable, the parties to the original positions they were in
before the transactions were effected. To effect this separation, both the
individual and the entity have agreed to assign the portion of the note
($53,150) paid by the entity to the entity. The entity, the individual and
any other companies affiliated with the individual have also agreed to return
all of the CEC shares owed by them to the Company and have agreed to release
the Company from any obligations owed to the entity, the individual and his
affiliated entities.  To date this agreement has been entered into but these
shares have not been canceled of record.

Due to this situation, Paycard refused to provide its financial Statements to
the Company so that the Company could complete its audited financial
statements for its March 31, 2004 10KSB.  Therefore, the Company assigned
eighty-five (85%) percent of its ownership interest in Paycard to
Knightsbridge Holding, LLC, which has been providing and will continue to
provide funding to the Company.  Upon completion of such assignment, the
Company now only owns fifteen (15%) percent of PayCard and wasno longer
required to provide an audit for PayCard.

The Company also entered into an Asset Purchase Agreement with CEC Asset
Reclamation Corp. to sell the balance of its remaining assets for a total
purchase price of 80 % of net proceeds in the liquidation of these assets.

Royalty income for the quarter ended June 30, 2004 were $0 compared to
royalty income for the quarter ended June 30, 2003 were $0.  There was
interest income of $1,333 during the quarter ended June 30, 2004.  There were
no revenues in 2003.

Selling, General and Administrative Expenses increased from $1,305 in 2003
to $1,885 in 2004 due to the company's management's inquiries concerning
possible business acquisitions.   Consulting Expenses decreased from $21,700
in 2003 to $5,000 in 2004.  Interest expenses were $0 in 2004 and $0 in 2003.


                                PART II - OTHER INFORMATION

Item 1. Legal Proceedings

On September 2, 1998, a judgment was entered in United States District Court,
District of Utah, Central Division, against C.E.C. Industries, Inc. In favor
of George A. Matthews, Jr. A former President and Director of C.E.C.
Industries.  The judgment entered was in the amount of $207,306.93. The
judgment award was to compensate Mr. Matthews for monies allegedly owed to
him on his Employment Agreement, from an alleged wrongful stop transfer,
interest, and attorney's fees.  The Company was unable to post a bond.  The
judgment was recorded in several states under the Sister State Judgment Act.

Item 2. Changes in Securities
None

Item 3. Defaults by the company upon its Senior Securities
None

Item 4. Submission of Matter to a Vote of Security Holders
None

Item 5. Other Information
None

Item 6. Exhibits and Reports of Form 8-K

None

C.E.C. INDUSTRIES CORP.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


C.E.C. INDUSTRIES CORP.


By:  /s/ Jeffrey Sternberg   Dated: August 16, 2004
     ---------------------
      Jeffrey Sternberg, President