UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended June 30, 2000
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( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
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Commission File number 0-30927
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VANSTAR FILMS, INC,
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(Exact name of registrant as specified in charter)
Nevada 98-0209053
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State or other jurisdiction of incorporation (I.R.S. Employer I.D. No.)
or organization
3rd Floor 1622 West 7th Ave., Vancouver, BC Canada V6J IS5
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code 1-604-731-1191
--------------------------
Securities registered pursuant to section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
None None
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Securities registered pursuant to section 12 (g ) of the Act:
None
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(Title of Class)
Check whether the Issuer (1 ) filed all reports required to be filed by section
13 or 15 (d) of the Exchange Act during the past 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.
(1) Yes [ ] No [ x ] (2) Yes [x] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
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State issuer's revenues for its most recent fiscal year: $ 0
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State the aggregate market value of the voting stock held by non affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days. At June 30, 2000, the
aggregate market value of the voting stock held by non affiliates is
undeterminable and is considered to be 0. During the past two years there has
been no trading on an exchange however there has been over-counter-trading in
small quantities and therefore the Registrant has arbitrarily valued these
shares with no value.
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
As of June 30, 2000, the registrant had 4,951,500 shares of common stock issued
and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the part
of the form 10- KSB (e.g., part I, part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) any proxy or other
information statement; and (3) Any prospectus filed pursuant to rule 424 (b) or
(c) under the Securities Act of 1933: None
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<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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<S> <C> <C>
PART I
Page
ITEM 1. DESCRIPTION OF BUSINESS 4
ITEM 2. DESCRIPTION OF PROPERTIES 4
ITEM 3. LEGAL PROCEEDINGS 4
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 4
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 4
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 5
ITEM 7. FINANCIAL STATEMENTS 7
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 7
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT 7
ITEM 10. EXECUTIVE COMPENSATION 9
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 10
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 10
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 11
</TABLE>
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ITEM 1. DESCRIPTION OF BUSINESS
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History and Organization
Vanstar Films, Inc. (the "Registrant" or the "Company") was incorporated under
the laws of the State of Nevada on July 8, 1997 with authorized common stock of
50,000,000 shares at $.001 par value and 10,000,000 shares of preferred stock at
$.001 par value. The preferred stock will have rights and preferences as may be
determined by the Board of Directors when issued.
The Registrant was organized for the purpose of conducting business in the field
of the production of films for theater and television and related services.
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ITEM 2. DESCRIPTION OF PROPERTIES
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The Registrant's administrative offices are rented and located at 3rd Floor 1622
West 7th Avenue, Vancouver, BC Canada, V6J IS5.
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ITEM 3. LEGAL PROCEEDINGS
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None
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
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None
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
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During the year through June 30, 2000 there has been no established trading
market for the shares of the Registrant's common stock over an exchange however
the stock has been trading over-the-counter in small quantities. The trading
amounts for a share of stock for the year are listed below by quarter:
2000 1999
Low High Low High
First .55 .88
Second .51 .70
Third .28 .78
Fourth .65 1.01
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During the last fiscal year the Registrant issued 66,000 common shares of its
capital stock at $.21 to $1.49 per share under the Regulation D exemption for
cash. Since its inception, the Company has not paid any dividends on its common
stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future. At June 30, 2000 the Company had approximately 49
shareholders.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
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Overview
The Registrant was organized for the purpose of conducting business in the field
of the production of films for theater and television and related services.
(a) Company intends to develop a number of products and services that will take
advantage of the growing demands of British Columbia's maturing film and
television industry. Initially, the Company intends to focus on three areas of
growth: (i) a strong co-production environment, where the Company might benefit
from strategic partnerships in film production, with both domestic and foreign
producers - the Company has an understanding with Lonewolf Productions of Los
Angeles, California, on a best efforts basis, to produce three feature films all
in the cost range of ten million ($10,000,000) U.S. per feature; (ii) the
development of a series of nature videos in cooperation and with the
distribution assistance of a nature magazine; and (iii) the development of a
series of television half-hour programs that are oriented to niche markets,
where the shows are infomercial structured and the company retains both creative
rights and has a percentage of marketing income.
Distribution for the Company's products have been identified, as well as
potential users of its services. The Company will attempt to have a marketing
and sales presence in as many of the traditional entertainment industry outlets
as may be possible, with the goal of creating a strong demand for the full range
of the company's products. The Company intends to focus on trade shows, film
festivals, industry periodicals, Company generated promotional material and
direct sales both by telemarketing as well as through a comprehensive and
ongoing series of face to face meetings with industry leaders.
(b) Film Production and Production Services. Vancouver, British Columbia is one
of the fastest growing film and television production centers in North America
outside of Hollywood, California. With a cosmopolitan, multi-ethnic population
that is nearing two million, Vancouver, British Columbia has become the
production center of choice for some of the most recognized names in the
entertainment industry. In the year 1996, 101 productions were completed for a
total dollar benefit to the province's film industry of more than five hundred
million dollars ($500,000,000 CDN). This included 33 feature films and sixteen
TV series. Direct employment, according to the government of British Columbia
surveys, is now in excess of 6,500 people and indirect employment totals nearly
25,000 people.
The factors that make Vancouver an attractive center for the production of films
and television in the Company's estimation are: (i) the highly competitive
Canadian dollar; (ii) the majestic and versatile scenery, both natural and
urban; (iii) the more than ten thousand highly skilled professional actors,
technicians and support staff; (iv) liberal tax credits from both federal and
provincial governments; (v) state-of-the-art post
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production services; and, (vi) a highly developed and skilled intellectual
properties sector of accredited and highly skilled writers.
Co-production and Service Production are the backbone of the industry in
Vancouver, having experienced years of strong growth, culminating at this time
with projections for Vancouver's fiscal 1999, total dollars for film and
television production, of near one billion dollars ($1,000,000,000 CDN).
Service Production is the management, for foreign producers, of single or
multiple film projects and or television movies or series. The Company, in this
area of the industry, would supply the staff required to manage these projects
on behalf of foreign producers, on a fee for services basis. As well, the
Company intends to lease or purchase a facility from a Vancouver
contractor-developer.
The Company, with the creation of its own staff to manage in-house projects,
such as its projected video series and infomercial programming, will endeavor to
utilize this same staff to service production for foreign producers, thereby
establishing new sources of revenue for the Company. This will create an ongoing
demand for the Company's products and services.
(c) Animation. The company has letters of intent with two local groups to
develop a claymation project (Babblebrook) and a computer animation project
(Motorworld) Babblebrook is aimed at 3-6 year olds and comes with a ten song CD
Motorworld is aimed at 6-12 year old boys. Both projects need a 1/2 hour pilot
to be completed for marketing purposes and to develop into possible TV series
shows. These will enable the company to obtain penetration in the retail
marketing area. The company's limited focus will be on the development of
Babblebrook.
(d) Feature Films Co-Production. The Company has a "deal memo" outstanding with
Entertech Media of Los Angeles, California for the development of an animated
film (Gunga Din) with an estimated cost of $2,000,000cdn. A local animation
house has agreed to produce this film within the above budget figure.
(e) Nature Video Production. The Company has identified the field of nature
videos, specifically those featuring wild animals associated with the Canadian
Tundra: wolf, grizzly, orca and others as having a unique potential for a wide
market distribution. To create an environment where production costs can be
properly managed, as well as to insure the quality of production, assured
distribution and to give the project its best chance at success, the Company is
currently negotiating to bring one or more national nature periodicals to
partner this project. The Company currently has a letter of intent from Canadian
Geographic Magazine for such participation.
(f) Infomercial Television Production and Merchandising. The Company intends to
seek out regional and national manufacturers and or suppliers of uniquely
priced, one of a kind products that would benefit from a focused marketing
program as is understood in the infomercial format. The Company intends to
negotiate the revenue accrues to the Company, and profits are generated by the
Company's share of the new and or increased sales volume for the product. One
such program is currently in negotiation with a regional travel service supplier
and a national travel product supplier.
(g) Film library and Distribution. The Company, which will require a
distribution arm to maximize the sales of its own products; nature videos,
infomercial television and feature films, will seek out under-utilized film
libraries, whose marketability is known but may have remained dormant for
whatever reason. The area that the Company has identified for accumulating a
substantial inventory of distributable product focuses on one
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large family-owned film library and several smaller institutionally managed
inventories. No negotiations are presently ongoing in this area.
Results of Operations
The Company has not started operations on the date of this report.
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ITEM 7. FINANCIAL STATEMENTS
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The financial statements of the Company are included immediately following the
signature page to this form 10-KSB.
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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
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The Company has had no disagreements with its certified public accountants with
respect to accounting practices or procedures of financial disclosure.
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ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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The following table as of June 30, 2000, includes the name, age, and position of
each executive officer and director and the term of office of each director of
the Company.
Name Age Position Director and/or
---- --- -------- Officer Since
-------------
Louis Tardif 52 President and Director July 2000
Marvin Wideen 65 Vice President and Director July 2000
Grant Curran 42 Secretary and Director July 2000
Each director of the Company serves for a term of one year and until his
successor is elected at the Company's annual shareholders' meeting and is
qualified, subject to removal by the Company's shareholders. Each officer
serves, at the pleasure of the board of directors, for a term of one year and
until his successor is elected at the annual meeting of the board of directors
and is qualified.
Included below is certain biographical information regarding each of the
Company's executive officers and directors.
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<PAGE>
Louis Tardif
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President and Director is an entrepreneur, small business lecturer and past
member of the Creative Property Management writing team, Mr. Tardif resides at
4087 S.W. Marine Drive, Vancouver, British Columbia.
Marvin Wideen
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Vice President and Director, Professor emeritus and private consultant in
educational programs. Mr. Wideen resides at 833 Seymour Dr. Coquitlam, B.C.
Canada V3J 6V8
Grant Curran
------------
Secretary and Director, Partner of Cawley & Associates, a Vancouver chartered
accountancy firm, Mr. Curran resides at 1501 Jubilee Court, North Vancouver,
British Columbia.
Except as indicated below, to the knowledge of management, during the past five
years, no present or former director, executive officer or person nominated to
become a director or an executive officer of the Company:
(1) filed a petition under the federal bankruptcy laws or any state insolvency
law, nor had a receiver, fiscal agent or similar officer appointed by a court
for the business or property of such person, or any partnership in which he was
a general partner at or within two years before the time of such filing;
(2) was convicted in a criminal proceeding or named subject of a pending
criminal proceeding (excluding traffic violations and other minor offenses);
(3) was the subject of any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining him from or otherwise limiting, the following activities:
(i) acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, associated person of any of the
foregoing, or as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliate person, director or
employee of any investment company, or engaging in or continuing
any conduct or practice in connection with such activity;
(ii) engaging in any type of business practice; or
(iii) engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal
commodities laws;
(4) was the subject of any order, judgment, or decree, not subsequently
reversed, suspended, or vacated, of any federal or state authority barring,
suspending or otherwise limiting for more than 60 days the right of such person
to engage in any activity described above under this Item, or to be associated
with persons engaged in any such activity;
(5) was found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed,
suspended, or vacated.
(6) was found by a court of competent jurisdiction in a civil action or by the
Commodity Futures Trading Commission to have violated any federal commodities
law, and the judgement in such civil action or finding by the Commodity Futures
Trading Commission has not been subsequently reversed, suspended or vacated.
Compliance with Section 16(a) of the Exchange Act
The Company knows of no person, who at any time during the subsequent fiscal
years, was a director, officer, beneficial owner of more than ten percent of any
class of equity securities of the registrant registered pursuant to Section 12
("Reporting Person"), that failed to file on a timely basis any reports required
to be furnished pursuant to Section 16 (a).
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<PAGE>
Based upon a review of Forms 3 and 4 furnished to the registrant under Rule
16a-3(d) during its most recent fiscal year, other than disclosed below, the
registrant knows of no Reporting Person that failed to file the required reports
during the most recent fiscal year or prior years.
The following table as of June 30, 2000, includes the name and position of each
Reporting Person that failed to file on a timely basis any reports required
pursuant to Section 16(a) during the most recent fiscal year or prior years.
Name Position Report to be Filed
Louis Tardif President and Director Form 3
Marvin Wideen Vice President and Director Form 3
Grant Curran Secretary and Director Form 3
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ITEM 10. EXECUTIVE COMPENSATION
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Cash Compensation
Remuneration has been paid to two of the officers and directors and
reimbursement has been made for expenses for activities on the registrants's
behalf. For the fiscal year ended June 30, 1998 the registrant paid $37,099 in
remuneration and for the year ended June 30, 1999 $1,059 and none for the year
ended June 30, 2000.
Bonuses and Deferred Compensation
None.
Compensation Pursuant to Plans
None.
Pension Table
None.
Other Compensation
None
Compensation of Directors
None.
Termination of Employment and Change of Control Arrangement
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<PAGE>
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash Compensation
set out above which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of such person's
employment with the Company or its subsidiaries, or any change in control of the
Company, or a change in the person's responsibilities following a changing in
control of the Company.
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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The following table as of June 30, 2000, includes the name and address and the
number of shares of the Company's Common Stock, par value $0.001 per share, held
of record or beneficially by each person who held of record, or was known by the
Company to own beneficially, more than 5% of the 4,951,500 issued and
outstanding shares of the Company's Common Stock, and the name and share
holdings of each director and of all officers and directors as a group.
<TABLE>
<CAPTION>
Nature of Number of
Name of Person or Group Ownership (1) Shares Owned Percent
----------------------- -------------- ------------ -------
<S> <C> <C> <C>
Officers and Directors and
Principal Shareholders:
Louis Tardif Direct 1,500,000 30
Marvin Wideen Direct 40,000 -
Grant Curran Direct 15,000 -
All Officers and Directors
as a Group (3 persons) Direct 1,545,000 31
(1) All shares owned directly are owned beneficially and of record, and such
shareholder has sole voting, investment, and dispositive power, unless
otherwise noted.
</TABLE>
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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Transactions with Management and Others
Except as indicated below, and for the periods indicated, there were no material
transactions, or series of similar transactions, since the beginning of the
Company's last fiscal year, or any currently proposed transactions, or series of
similar transactions, to which the Company was or is to be party, in which the
amount involved exceeds $60,000, and in which any director or executive officer,
or any security holder who is known by the Company to own of record or
beneficially more than 5% of any class of the Company's common stock, or any
member of the immediate family of any of the foregoing persons, has an interest.
Indebtedness of Management
There were no material transactions, or series of similar transactions, since
the beginning of the Company's last fiscal year, or any currently proposed
transactions, or series of similar transactions, to which the Company was or is
to be a party, in which the amount involved exceeds $60,000 and in which any
director or executive officer, or any security
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holder who is known to the Company to own of record or beneficially more than 5%
of any class of the Company's common stock, or any member of the immediate
family of any of the foregoing persons, has an interest.
Transactions with Promoters
The Company was organized more than five years ago therefore transactions
between the Company and its promoters or founders are not deemed to be material.
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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
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(a)(1) Financial Statements. The following financial statements are included
in this report:
Title of Document Page
Report of Andersen, Andersen & Strong, Certified Public Accountants 13
Balance Sheet as of June 30, 2000 14
Statements of Operations for years ended June 30, 2000 and 1999 15
and from inception
Statements of Stockholders' Equity for the period July 8, to June 30, 2000 16
Statements of Cash Flows for the years ended June 30, 2000 and 1999 17
and from inception
Notes to Financial Statements 18
(a)(2) Financial Statement Schedules. The following financial statement
schedules are included as part of this report: None
(a)(3) Exhibits.
None
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed below by following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
VANSTAR FILMS, INC.
Date: October 12, 2000 By /s/ Louis Tardif
--------------------------------------------
Louis Tardif, President and Director
Date: October 12, 2000 By /s/ Grant Curran
-------------------------------------------
Grant Curran, Secretary and Director
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<PAGE>
ANDERSEN ANDERSEN & STRONG, L.C.
Certified Public Accountants and Business Consultants
941 East 3300 South, Suite 202
Salt Lake City, Utah 84106
Telephone 801 486-0096
Fax 801 486-0098
Board of Directors
Vanstar Films, Inc.
Vancouver, B.C.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Vanstar Films, Inc.
(development stage company) at June 30, 2000 , and the statements of operations,
stockholders' equity, and cash flows for the years ended June 30, 2000 and 1999
and the period July 8, 1997 (date of inception) to June 30, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 balance sheet presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Vanstar Films, Inc. at June 30,
2000, and the results of operations, and cash flows for the years ended June 30,
2000 and 1999 and the period July 8, 1997 (date of inception) to June 30, 2000,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations since its inception and does not have sufficient working
capital for its planned activity, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 4. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Andersen Andersen & Strong
Salt Lake City, Utah
September 15, 2000
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VANSTAR FILMS, INC.
( Development Stage Company)
BALANCE SHEET
June 30, 2000
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ASSETS
CURRENT ASSETS
Cash $ 1,009
-------
Total Current Assets $ 1,009
======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - related parties $ 5,032
Accounts payable 3,495
------
Total Current Liabilities 8,527
------
STOCKHOLDERS' EQUITY
Preferred Stock
10,000,000 shares authorized at $0.001 par
value; none issued and outstanding -
Common stock
50,000,000 shares authorized at $0.001 par value;
4,951,500 shares issued and outstanding 4,952
Capital in excess of par value 155,799
Deficit accumulated during the development stage (168,269)
--------
Total Stockholders' Deficiency (7,518)
---------
$ 1,009
The accompanying notes are an integral part of these
financial statements.
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<TABLE>
<CAPTION>
VANSTAR FILMS INC.
( Development Stage Company)
STATEMENTS OF OPERATIONS
For the Years Ended June 30, 2000 and 1999
and the Period July 8, 1997 (Date of Inception) to June 30, 2000
---------------------------------------------------------------------------------------------------------------------------------
July 8, 1997
June 30 June 30 (Date of Inception) to
2000 1999 June 30, 2000
-------- ------- ---------------
<S> <C> <C> <C>
REVENUES $ - $ - $ 136
EXPENSES 36,697 34,036 166,450
------- ------- ---------
NET LOSS (36,697) (34,036) (166,314)
COMPREHENSIVE LOSS
Loss from foreign currency translation (417) (403) (1,955)
-------- -------- ---------
NET COMPREHENSIVE LOSS $ (37,114) $ (34,439) $ (168,269)
======== ======== =========
NET LOSS PER COMMON
SHARE
Basic $ (.01) $ (.01)
-------- --------
AVERAGE OUTSTANDING
SHARES
Basic 4,918,500 4,885,500
--------- ---------
</TABLE>
The accompanying notes are an integral part of these
financial statements.
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<PAGE>
<TABLE>
<CAPTION>
VANSTAR FILMS, INC.
( Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period from July 8, 1997 (Date of Inception)
to June 30, 2000
-------------------------------------------------------------------------------------------------------------------
Capital in
Common Stock Excess of Accumulated
Shares Amount Par Value Deficit
------ ------ ----------- ------------
<S> <C> <C> <C> <C>
Balance July 8, 1997 (date of inception) - $ - $ - $ -
Issuance of common stock for cash at 2,315,000 2,315 19,900 -
$.0088 - July 10, 1997
Issuance of common stock for cash at
$.0089 - Sept 18, 1997 2,301,000 2,301 19,900 -
Issuance of common stock for cash at
$.001 - Sept 30, 1997 86,000 86 - -
Issuance of common stock for cash at
$.27 - Jan 2, 1998 107,500 108 31,392 -
Issuance of common stock for cash at
$.37 - April 20, 1998 50,000 50 19,950 -
Net operating loss for the year ended
June 30, 1998 - - - (96,716)
Issuance of common stock for cash at 70,000 70 20,930 -
$.31 - Sept 15, 1998
Cancellation of common stock -
December 9, 1998 (44,000) (44) -
Contributions to capital by officers - expenses - - 9,655 -
Net operating loss for the year
ended June 30, 1999 - - - (34,439)
Balance June 30, 1999 4,885,500 4,886 121,727 (131,155)
Issuance of common stock for cash at $1.49 -
September and October 1999 16,000 16 23,812 -
Issuance of common stock for cash at $.21 -
March 9, 2000 50,000 50 10,260 -
Net operating loss for the year ended
June 30, 2000 - - - (37,114)
Balance June 30, 2000 4,951,500 $ 4,952 $ 155,799 $ (168,269)
========= ======= ======== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
( Development Stage Company)
STATEMENT OF CASH FLOWS
For the Years Ended June 30, 2000 and 1999
and the Period July 8, 1997 (Date of Inception) to June 30, 2000
------------------------------------------------------------------------------------------------------
July 8, 1997
June 30 June 30 (Date of Inception)
2000 1999 to June 30, 2000
--------- --------- -------------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (36,697) $ (34,036) $ (166,314)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Changes in accounts payable 3,002 3,275 8,527
Conributions to capital - expenses - 9,655 9,655
Foreign currency translations (417) (403) (1,955)
Net Decrease in Cash From Operations (34,112) (21,509) (150,087)
--------- --------- --------------
CASH FLOWS FROM INVESTING
ACTIVITIES
- - -
--------- --------- --------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common stock 34,138 20,956 151,096
--------- --------- --------------
Net Increase (Decrease) in Cash 26 (553) 1,009
Cash at Beginning of Period 983 1,536 -
--------- --------- --------------
Cash at End of Period $ 1,009 $ 983 $ 1,009
========= ========= ==============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
-17-
<PAGE>
VANSTAR FILMS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
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1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on July 8,
1997 with authorized common stock of 50,000,000 shares at $.001 par value and
10,000,000 shares of preferred stock at $.001 par value.
The preferred stock will have rights and preferences as may be determined by the
Board of Directors when issued.
The Corporation was organized for the purpose of conducting business in the
field of the production of films for the theater and television and related
services.
Since its inception the company completed offerings under rule 504 of Regulation
D of 4,799,500 shares of its common capital stock.
The Company has been in the development stage since inception.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of
accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On June 30, 2000, the Company had a net operating loss carry forward of $
166,769. The tax benefit from the loss carry forward has been fully offset by a
valuation reserve because the use of the future tax benefit is undeterminable
since the Company has no operations. The operating loss expires in 2021.
Basic and Diluted Net Income (Loss) Per Share
Basic net income (loss) per share amounts are computed based on the weighted
average number of shares actually outstanding. Diluted net income (loss) per
share amounts are computed using the weighted average number of common shares
and common equivalent shares outstanding as if shares had been issued on the
exercise of the preferred share rights unless the exercise becomes antidilutive
and then only the basic per share amounts are shown in the report.
-18-
<PAGE>
VANSTAR FILMS, INC.
( Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
--------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Financial Instruments
The carrying amounts of financial instruments, including cash and accounts
payable, are considered by management to be their estimated fair values.
Comprehensive Income
The Company adopted Statement of Financial Accounting Standards No. 130. The
adoption of this standard had no impact on the total stockholder's equity on
June 30, 2000.
Recent Accounting Pronouncements
The Company does not expect that the adoption of other recent accounting
pronouncements will have a material impact on its financial statements.
Foreign Currency Translation
The transactions of the Company were completed in Canadian currency which is
considered to be the functional currency. For reporting purposes the balance
sheet accounts have been translated to US currency at the exchange rate in
effect at the time, and the operating accounts at the average rates in effect
during the year. The gain or loss is shown under the comprehensive loss.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of the assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could vary from the estimates that were assumed in
preparing these financial statements.
3. RELATED PARTY TRANSACTIONS
Related parties own 50% of the outstanding stock of the Company.
4. GOING CONCERN
Continuation of the Company as a going concern is dependent upon obtaining
sufficient working capital for its planned activity and the management of the
Company has developed a strategy, which it believes will accomplish this
objective through additional equity funding, and long term financing, which will
enable the Company to operate for coming year.
-19-
