FLICKERING STAR FINANCIAL INC
10QSB, 2000-11-13
NON-OPERATING ESTABLISHMENTS
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<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000.

                                       OR

[ ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          FOR THE TRANSITION FROM _______ TO ________.

                         COMMISSION FILE NUMBER 0-28867


                         FLICKERING STAR FINANCIAL, INC.
                 (Name of Small Business Issuer in its charter)


                Nevada                                       88-0407936
  -------------------------------                        -------------------
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                        Identification No.)


 2980 S. Rainbow Boulevard, Suite 108
         Las Vegas, Nevada                                      89146
----------------------------------------                      ---------
(Address of principal executive offices)                     (Zip code)


                                       N/A
                 (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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

     At September 30, 2000, there were outstanding 2,100,000 shares of the
     Registrant's Common Stock, $.001 par value.

Transitional Small Business Disclosure Format: Yes [ ] No [X]


<PAGE>   2


                                     PART I

                              FINANCIAL INFORMATION


Item I. Financial Statements


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                        PAGE
                                                                        ----
         <S>                                                          <C>
         ACCOUNTANT'S LETTER                                               3
         -------------------------------------------------------------------

         BALANCE SHEET - ASSETS                                            4
         -------------------------------------------------------------------

         BALANCE SHEET - LIABILITIES AND STOCKHOLDERS' EQUITY              5
         -------------------------------------------------------------------

         STATEMENT OF OPERATIONS                                         6-7
         -------------------------------------------------------------------

         STATEMENT OF STOCKHOLDERS' EQUITY                                 8
         -------------------------------------------------------------------

         STATEMENT OF CASH FLOWS                                        9-10
         -------------------------------------------------------------------

         NOTES TO FINANCIAL STATEMENTS                                 11-15
         -------------------------------------------------------------------

</TABLE>



                                       2
<PAGE>   3


                      [BARRY L. FRIEDMAN, P.C. LETTERHEAD]


                          INDEPENDENT AUDITORS' REPORT


Board of Directors                                              October 2, 2000
FLICKERING STAR FINANCIAL, INC.
Las Vegas, Nevada

     I have audited the accompanying Balance Sheets of FLICKERING STAR
FINANCIAL, INC. (A Development Stage Company), as of September 30, 2000, and
December 31, 1999, and the related statements of stockholders' equity for
September 30, 2000, and December 31, 1999, and statements of operations and cash
flows for the three months ended September 30, 2000, and September 30, 1999, for
the nine months ended September 30, 2000, and September 30, 1999, and the two
years ended December 31, 1999, and December 31, 1998, and the period November
25, 1996, (inception), to September 30, 2000. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.

     I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

     In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of FLICKERING STAR FINANCIAL,
INC. (A Development Stage Company), as of September 30, 2000, and December 31,
1999, and the related statements of stockholders' equity for September 30, 2000,
and December 31, 1999, and statements of operations and cash flows for the three
months ended September 30, 2000, and September 30, 1999, for the nine months
ended September 30, 2000, and September 30, 1999, and the two years ended
December 31, 1999, and December 31, 1998, and the period November 25, 1996,
(inception), to September 30, 2000, in conformity with generally accepted
accounting principles.

     The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters is described in
Note #5. These financial statements do not include any adjustments that might
result from the outcome of this uncertainty.



/s/ BARRY L. FRIEDMAN
---------------------------
Barry L. Friedman
Certified Public Accountant


                                       3
<PAGE>   4


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                                  BALANCE SHEET


                                     ASSETS

<TABLE>
<CAPTION>

                                                    9 Mos. Ended      Year Ended
                                                    Sep.30, 2000     Dec.31, 1999
                                                    ------------     ------------
<S>                                                 <C>              <C>
CURRENT ASSETS                                        $       0        $      0
                                                      ---------        --------
     TOTAL CURRENT ASSETS                             $       0        $      0
                                                      ---------        --------
OTHER ASSETS                                          $       0        $      0
                                                      ---------        --------
     TOTAL OTHER ASSETS                               $       0        $      0
                                                      ---------        --------
     TOTAL ASSETS                                     $       0        $      0
                                                      ---------        --------
</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       4
<PAGE>   5


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                                  BALANCE SHEET


                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                               9 Mos. Ended      Year Ended
                                                               Sep.30, 2000     Dec.31, 1999
                                                               ------------     ------------
<S>                                                            <C>              <C>
CURRENT LIABILITIES
Officers Advances (Note #8)                                    $     26,933     $      2,075
                                                               ------------     ------------
   TOTAL CURRENT LIABILITIES                                   $     26,933     $      2,075
                                                               ------------     ------------

STOCKHOLDERS EQUITY (Note #4)

Common stock, $.001 par value
authorized 25,000,000 shares
issued and outstanding at
December 31, 1999 - 2,100,000 shares                                            $      2,100
September 30, 2000 - 2,100,000 shares                          $      2,100

Additional paid in Capital                                                0                0

Accumulated deficit during
the development stage                                               -29,033           -4,175
                                                               ------------     ------------
   TOTAL STOCKHOLDERS' EQUITY                                  $    -26,933     $     -2,075
                                                               ------------     ------------
   TOTAL LIABILITIES AND
   STOCKHOLDERS EQUITY                                         $          0     $          0
                                                               ------------     ------------
</TABLE>


    The accompanying notes are an integral part of these financial statements



                                       5
<PAGE>   6


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                                 3 Mos. Ended     3 Mos. Ended      9 Mos. Ended     9 Mos. Ended
                                                   Sep. 30,         Sep. 30,          Sep. 30,         Sep. 30,
                                                     2000             1999              2000             1999
                                                 ------------     ------------      ------------     ------------
<S>                                              <C>              <C>               <C>              <C>
REVENUE                                          $          0     $          0      $          0     $          0
                                                 ------------     ------------      ------------     ------------
EXPENSES
    General, Selling
    and Administrative                           $      1,262     $          0      $     24,858     $          0
                                                 ------------     ------------      ------------     ------------
    Total Expenses                               $      1,262     $          0      $     24,858     $          0
                                                 ------------     ------------      ------------     ------------
Net Profit/Loss (-)                              $     -1,262     $          0      $    -24,858     $          0
                                                 ------------     ------------      ------------     ------------
Net Loss per share -
  Basic and diluted
  (Note #2)                                      $     -.0006     $        NIL      $     -.0118     $        NIL
                                                 ------------     ------------      ------------     ------------
Weighted average
number of common
shares outstanding                                  2,100,000        2,100,000         2,100,000        2,100,000
                                                 ------------     ------------      ------------     ------------
</TABLE>



    The accompanying notes are an integral part of these financial statements




                                       6
<PAGE>   7



                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                       STATEMENT OF OPERATIONS (Continued)

<TABLE>
<CAPTION>

                                                                                                     Nov.25, 1996
                                                                   Year Ended        Year Ended      (Inception)
                                                                   December 31,     December 31,      to Sep. 30,
                                                                      1999              1998             2000
                                                                  ------------      ------------       ------------

<S>                                                               <C>                <C>               <C>
REVENUE                                                           $          0       $         0       $          0
                                                                  ------------       -----------      ------------
EXPENSES
    General, Selling
    and Administrative                                            $      1,725      $        350       $     29,033
                                                                  ------------      ------------       ------------

    Total Expenses                                                $      1,725      $        350       $     29,033
                                                                  ------------      ------------       ------------
Net Profit/Loss (-)                                               $     -1,725      $       -350       $    -29,033
                                                                  ------------      ------------       ------------
Net Loss per share -
 Basic and diluted
 (Note #2)                                                        $     -.0008      $     -.0002       $     -.0138
                                                                  ------------      ------------       ------------
Weighted average
number of common
shares outstanding                                                   2,100,000         2,100,000          2,100,000
                                                                  ------------      ------------       ------------

</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       7
<PAGE>   8


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                          Additional      Accumu-
                                                                 Common        Stock        paid-in        lated
                                                                 Shares        Amount       Capital       Deficit
                                                                 ------        ------       -------       -------
<S>                                                              <C>          <C>         <C>             <C>
Balance,
December 31, 1998                                                  21,000     $  2,100    $        0      $ -2,450

September 3, 1999
Changed from no par
value to $0.001                                                                 -2,079        +2,079

September 3, 1999
Forward stock split
100:1                                                           2,079,000       +2,079        -2,079

Net loss year ended
December 31, 1999                                                                                           -1,725
                                                                ---------     --------    ----------      --------
Balance,
December 31, 1999                                               2,100,000     $  2,100    $        0      $ -4,175

Net Loss
January 1, 2000, to
September 30, 2000                                                                                         -24,858
                                                                ---------     --------    ----------      --------
Balance,
September 30, 2000                                              2,100,000     $  2,100    $        0      $-29,033
                                                                ---------     --------    ----------      --------


</TABLE>


    The accompanying notes are an integral part of these financial statements


                                       8
<PAGE>   9


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>

                                                 3 Mos. Ended     3 Mos. Ended      9 Mos. Ended     9 Mos. Ended
                                                   Sep. 30,         Sep. 30,          Sep. 30,         Sep. 30,
                                                     2000             1999              2000             1999
                                                 ------------     ------------      ------------     ------------
<S>                                              <C>              <C>               <C>              <C>
Cash Flow from
Operating Activities
Net Loss                                         $     -1,262       $        0      $    -24,858       $        0

Adjustment to reconcile
net loss to net cash
provided by operating
activities

Changes in Assets
and Liabilities

Increase in current
Liabilities

Officers Advances                                      +1,262                0           +24,858                0
                                                 ------------       ----------      ------------       ----------
Net cash used in
operating Activities                             $          0       $        0      $          0       $        0

Cash Flows from
Investing Activities                                        0                0                 0                0

Cash Flows from
Financing Activities
Issuance of Common
Stock                                                       0                0                 0                0
                                                 ------------       ----------      ------------       ----------

Net increase/decrease
in cash                                          $          0       $        0      $          0       $        0

Cash,
beginning of period                                         0                0                 0                0
                                                 ------------     ------------      ------------       ----------
Cash,
end of period                                    $          0     $          0      $          0       $        0
                                                 ------------     ------------      ------------       ----------

</TABLE>


    The accompanying notes are an integral part of these financial statements




                                       9
<PAGE>   10


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                       STATEMENT OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>

                                                                                                     Nov.25, 1996
                                                                   Year Ended        Year Ended      (Inception)
                                                                   December 31,      December 31,     to Sep. 30,
                                                                      1999              1998             2000
                                                                   ----------        ----------      -----------
<S>                                                                <C>               <C>             <C>
Cash Flow from
Operating Activities
Net Loss                                                          $     -1,725      $       -350     $    -29,033

Adjustment to reconcile
net loss to net cash
provided by operating
activities

Changes in Assets
and Liabilities

Increase in current
Liabilities

Officers Advances                                                       +1,725              +350          +26,933
                                                                  ------------      ------------     ------ -----

Net cash used in
operating Activities                                              $          0      $          0     $     -2,100

Cash Flows from
Investing Activities                                                         0                 0                0

Cash Flows from
Financing Activities
Issuance of Common
Stock                                                                        0                 0           +2,100
                                                                  ------------      ------------     ------ -----

Net increase/decrease
in cash                                                           $          0      $          0     $          0

Cash,
beginning of period                                                          0                 0                0
                                                                  ------------      ------------     ------ -----

Cash,
end of period                                                     $          0      $          0     $          0
                                                                  ------------      ------------     ------ -----
</TABLE>



    The accompanying notes are an integral part of these financial statements



                                       10
<PAGE>   11

                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                          NOTES TO FINANCIAL STATEMENTS
                    September 30, 2000 and December 31, 1999


NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY

     The Company was organized November 25, 1996, under the laws of the State of
     Nevada as FLICKERING STAR FINANCIAL, INC. The Company currently has no
     operations and in accordance with SFAS #7, is considered a development
     stage company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Accounting Method
     -----------------

          The Company records income and expenses on the accrual method.

     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 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 could differ
          from those estimates.

     Cash and equivalents
     --------------------

          The Company maintains a cash balance in a non-interest-bearing bank
          that currently does not exceed federally insured limits. For the
          purpose of the statements of cash flows, all highly liquid investments
          with the maturity of three months or less are considered to be cash
          equivalents. There are no cash equivalents as of December 31, 1999, or
          September 30, 2000.



                                       11
<PAGE>   12


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    September 30, 2000 and December 31, 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Income Taxes
     ------------

          Income taxes are provided for using the liability method of accounting
          in accordance with Statement of Financial Accounting Standards No. 109
          (SFAS #109) "Accounting for Income Taxes". A deferred tax asset or
          liability is recorded for all temporary difference between financial
          and tax reporting. Deferred tax expense (benefit) results from the net
          change during the year of deferred tax assets and liabilities.

     Reporting on Costs of Start-Up Activities
     -----------------------------------------

          Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of
          Start-Up Activities" which provides guidance on the financial
          reporting of start-up costs and organization costs. It requires most
          costs of start-up activities and organization costs to be expensed as
          incurred. With the adoption of SOP 98-5, there has been little or no
          effect on the company's financial statements.

     Loss Per Share
     --------------

          Net loss per share is provided in accordance with Statement of
          Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per
          Share". Basic loss per share is computed by dividing losses available
          to common stockholders by the weighted average number of common shares
          outstanding during the period. Diluted loss per share reflects per
          share amounts that would have resulted if dilative common stock
          equivalents had been converted to common stock. As of September 30,
          2000, the Company had no dilative common stock equivalents such as
          stock options.

     Year End
     --------

          The Company has selected December 31st as its year-end.




                                       12
<PAGE>   13

                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    September 30, 2000 and December 31, 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     Year 2000 Disclosure
     --------------------

          The Y2K issue had no effect on this Company.

NOTE 3 - INCOME TAXES

          There is no provision for income taxes for the period ended September
          30, 2000. The Company's total deferred tax asset as of December 31,
          1999, is as follows:

<TABLE>

                 <S>                                           <C>
                 Net operation loss carry forward             $    4,175
                 Valuation allowance                          $    4,175

                 Net deferred tax asset                       $        0
</TABLE>

          The federal net operating loss carry forward will expire in 2016 and
          2019.

          This carry forward may be limited upon the consummation of a business
          combination under IRC Section 381.

NOTE 4 - STOCKHOLDERS' EQUITY

     Common Stock
     ------------

          The authorized common stock of FLICKERING STAR FINANCIAL, INC.
          consists of 25,000,000 shares with a par value of $0.001 per share.

     Preferred Stock
     ---------------

          FLICKERING STAR FINANCIAL, INC. has no preferred stock.



                                       13
<PAGE>   14


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    September 30, 2000 and December 31, 1999


NOTE 4 - STOCKHOLDERS' EQUITY  (CONTINUED)

          On November 30, 1996, the company issued 21,000 shares of its no par
          value common stock in consideration of $2,100 in cash.

          On September 3, 1999, the State of Nevada approved the Company's
          restated Articles of Incorporation, which increased its capitalization
          from 25,000 common shares to 25,000,000 common shares. The no par
          value was changed to $0.001.

          On September 3, 1999, the Company forward split its common stock
          100:1, thus increasing the number of outstanding common stock shares
          from 21,000 shares to 2,100,000.

NOTE 5 - GOING CONCERN

          The Company's financial statements are prepared using generally
          accepted accounting principles applicable to a going concern which
          contemplates the realization of assets and liquidation of liabilities
          in the normal course of business. However, the Company does not have
          significant cash or other material assets, nor does it have an
          established source of revenues sufficient to cover its operating costs
          and to allow it to continue as a going concern. It is the intent of
          the Company to seek a merger with an existing, operating company.

NOTE 6 - RELATED PARTY TRANSACTIONS

          The Company neither owns nor leases any real or personal property. An
          officer of the corporation provides office services without charge.
          Such costs are immaterial to the financial statements and accordingly,
          have not been reflected therein. The officers and directors of the
          Company are involved in other business activities and may, in the
          future, become involved in other business opportunities. If a specific
          business opportunity becomes available, such persons may face a
          conflict in selecting between the Company and their other business
          interests. The Company has not formulated a policy for the resolution
          of such conflicts.



                                       14
<PAGE>   15


                         FLICKERING STAR FINANCIAL, INC.
                          (A Development Stage Company)


                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                    September 30, 2000 and December 31, 1999

NOTE 7 - WARRANTS AND OPTIONS

          There are no warrants or options outstanding to acquire any additional
          shares of common stock.

NOTE 8 - OFFICERS ADVANCES

          While the Company is seeking additional capital through a merger with
          an existing company, an officer of the Company has advanced funds on
          behalf of the Company to pay for any costs incurred by it. These funds
          are interest free.




                                       15
<PAGE>   16



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

     The Company has not commenced business activities and has no assets or
operations. The Company has had no negotiations to effectuate a business
combination.

     The Company is dependent upon its officers to meet any de minimis costs
which may occur. Ginger B. Quealy, an officer and director of the Company, has
agreed to provide the necessary funds, without interest, for the Company to
comply with the Securities Exchange Act of 1934, as amended; provided that she
is an officer and director of the Company when the obligation is incurred. All
advances are interest-free.

     In addition, since the Company has had no operating history nor any
revenues or earnings from operations, with no significant assets or financial
resources, the Company will in all likelihood sustain operating expenses without
corresponding revenues, at least until the consummation of a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company can consummate a business
combination with a profitable business opportunity and consummate such a
business combination.

     This discussion may contain certain forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual results
could differ materially from those forward-looking statements. The factors that
may cause actual results to differ materially is that the Company has no
arrangement, agreement or understanding with respect to engaging in a merger
with, joint venture with or acquisition of, a private or public company and that
there can be no assurance that the Company will be successful in identifying and
evaluating suitable business opportunities or including a business combination.

Item III. Qualitative and Quantitative Disclosures About Market Risk.

     The Company has neither considered or conducted any research concerning
qualitative and quantitative market risk.


                                       16
<PAGE>   17


                                     PART II

                                OTHER INFORMATION

<TABLE>

<S>                                                                                                   <C>
Item 1 -  Legal Proceedings ...........................................................................None

Item 2 -  Changes in the Rights of the Company's
          Security Holders ............................................................................None

Item 3 -  Defaults by the Company on its
          Senior Securities ...........................................................................None

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

</TABLE>

Item 5 -  Other Information

          (a)  Board Meeting

          The board held one meeting during the current quarter, which was a
special meeting by written consent.

          (b)  Committees

          The board of directors has not established any audit committee. In
addition, the Company does not have any other compensation or executive or
similar committees. The Company will not, in all likelihood, establish any audit
committee until such time as the Company completes a business combination, of
which there can be no assurance. The Company recognizes that an audit committee,
when established, will play a critical role in the financial reporting system of
the Company by overseeing and monitoring management's and the independent
auditors' participation in the financial reporting process. At such time as the
Company establishes an audit committee, its additional disclosures with the
Company's auditors and management may promote investor confidence in the
integrity of the financial reporting process.

          Until such time as an audit committee has been established, the full
board of directors will undertake those tasks normally associated with an audit
committee to include, but not by way of limitation, the (i) review and
discussion of the audited financial statements with management, (ii) discussions
with the independent auditors the matters required to be discussed by the
Statement On Auditing Standards No. 61, as may be modified or supplemented, and
(iii) received from the auditors disclosures regarding the auditors'
Independents Standards Board Standard No. 1, as may be modified or supplemented.

          The board of directors of the Company, consistent with its intent to
enhance the reliability and credibility of its financial statements, has
submitted the financial statements included in this Form 10-QSB to its
independent auditors prior to



                                       17
<PAGE>   18


the filing of this report.  An audit was completed for the period
then ended.

          (c) Other

          The Company has been informed that in the opinion of a member of the
staff of the Securities and Exchange Commission, the Rule 144 "absolute" safe
harbor, as last amended in Release 33-7759, effective January 24, 2000, 64 F.R.
61382, may not be available to so-called "blank check" or "shell" companies,
notwithstanding the legislative mandate contained in said rule. The Rule 144
"absolute" safe harbor provides that any person who sells restricted securities
shall be deemed not to be engaged in a distribution of such securities and
therefore not an underwriter thereof, if the sale is made in accordance with all
of the conditions of the rule. The rule also provides that any person who sells
restricted securities on behalf of such person in a control relationship with
the issuer shall be deemed not to be engaged in a distribution or sale of
securities and therefore not an underwriter thereof, if the sale is made in
accordance with all of the conditions of the rule. Responsible officers of the
Securities and Exchange Commission and the NASD Regulators, Inc. have
purportedly attempted to interpret Rule 144 to limit or eliminate the statutory
safe harbor. A request from the NASD Regulators, Inc. for guidance (including a
request for an opinion) provided a series of scenarios and the Securities and
Exchange Commission's response to the questions proffered created an unjustified
dichotomy for treating similarly situated shareholders in different purpose
entities holding restricted securities who are not promoters or affiliates that
wish to resell restricted or non-restricted securities and comply with the rules
promulgated under the Act. Contrary to the mandate and position contained in the
Preliminary Note to Rule 144 and the rule itself, the response to the request
for guidance seems to advance the position that the rule is not available for
resale transactions, regardless of technical compliance, because the resale
transactions appear to be designed to distribute or redistribute securities to
the public without compliance with the Act. The series of scenarios -
hypothetical facts (deemed to be representations) and the response thereto
assumed that the selling shareholders are promoters, affiliates and/or
underwriters of a "blank check" or "shell" company issuer wherein technical
compliance with said rule is not enough.

          The Company has been further informed that the Securities and Exchange
Commission will not issue "no action" letters relating to the resale of
securities, i.e., a person who has acquired shares of stock in a Section 4(2)
transaction under the Securities Act of 1933, as amended, and who offers and
sells the restricted securities without complying with Rule 144 is to be put on
notice by the Securities and Exchange Commission that in view of the broad
remedial purposes of the Securities Act of 1933, as amended, and the public
policy which strongly supports registration under said act, that those
individuals will have a



                                       18
<PAGE>   19


substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and the brokers of
other person who participate in the transaction do so at their own risk. The
Company has been informed that any indemnification for liabilities in the
opinion of the Securities and Exchange Commission arising from such a
transaction may be against public policy as expressed in the Securities Act of
1933, as amended, and is therefore unenforceable.

Item 6 -  Exhibits and Reports on Form 8-K

          The following exhibits are filed with this report:

               (a)  No reports on Form 8-K were filed during the quarter for
                    which the report is filed.

               (b)  Financial Data Schedule 27.1.



                                    SIGNATURE

Pursuant to the requirements 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.



Dated: November 9, 2000                  FLICKERING STAR FINANCIAL, INC.



                                         By: /s/ Ginger B. Quealy
                                             ---------------------------
                                             Ginger B. Quealy
                                             President



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