UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(MARK ONE)
|X| ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal years ended October 31, 1992, 1993, 1994,
1995, 1996, 1997, 1998, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 0-13245
NEW YORK FILM WORKS, INC.
(Name of small business issuer in its charter)
New York 13-3051895
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
928 Broadway, New York, New York 10010
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (212) 475-5700
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: Common Stock
Check whether the issuer 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. Yes |_| No |X|
[Cover page 1 of 2]
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Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-KSB is not contained herein, and will not be contained, to the best
of 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. |X|
State issuer's revenues for its most recent fiscal year: $1,337,326
As of June 8, 2000, the aggregate market value of the voting and non-voting
common equity, based on the average bid and asked prices of the issuer's voting
stock, held by non-affiliates was unavailable due to the fact that there is
presently no trading market on price quotations. Exclusion of shares held by a
person should not be construed to indicate that such person possesses the power,
direct or indirect, to direct or cause the direction of management or policies
of the issuer, or that such person is controlled by or under common control of
the issuer.
Check mark whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 after
the distribution of Securities under a plan confirmed by a court.
Yes |_| No |_| Not Applicable |X| - Securities have not been distributed.
Documents Incorporated By Reference: None.
Transitional Small Business Disclosure Format: Yes |_| No |X|
Forward Looking Statements: This Report contains, or incorporates by reference,
certain statements that may be deemed "forward looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements, other than statements of historical facts, that address
activities, events or developments that the Company intends, expects projects,
believes or anticipates will or may occur in the future are forward-looking
statements. Such statements are based on certain assumptions and assessments
made by management of the Company in light of its experience and its perception
of historical trends, current conditions, expected future developments and other
factors it believes to be appropriate. The forward-looking statements included
in this Report are also subject to a number of material risks and uncertainties,
including but not limited to the ability of the Company to raise money, to
conduct operations profitably, to expand its business by the use of technology,
technological changes which may intensify competition (such as digital film) and
make it possible for customers to directly or through another source, effect the
processing proposed to be done by the Company, markets, services and prices, and
other factors discussed in the Company's filings under the Securities Act and
the Exchange Act. Stockholders and prospective investors are cautioned that such
forward-looking statements are not guarantees of future performance and that
actual results, developments and business decisions may differ from those
envisaged by such forward-looking statements.
[Cover page 2 of 2 pages]
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PART I
Item 1. Description of Business.
New York Film Works, Inc. (the "Company") was incorporated under the laws
of the State of New York on November 5, 1980 and commenced operations in April
1981. New York Film Works acquired all of the outstanding shares of Common Stock
of Emulsion Stripping, Ltd., an Illinois corporation, on February 8, 1984.
Emulsion Stripping, Ltd. changed its name to ES Graphics, Inc. ("ES Graphics")
in March 1984. ES Graphics subsequently went out of business. New York Film
Works provides a wide array of photo finishing and processing services
principally for the professional and commercial photographic market in New York
City.
After pursuing our business and finding results unsuccessful, we filed a
Chapter 7 proceeding in the U.S. Bankruptcy Court. On September 3, 1992, our
case was converted from a Chapter 7 to Chapter 11 proceeding under which we were
a Debtor-in-Possession. We submitted a Plan of Reorganization in order to
restructure our pre-petition obligations, which was subsequently approved by the
Bankruptcy Court. On August 21, 1996, the U.S. Bankruptcy Court discharged us
from our bankruptcy.
Since the period of our bankruptcy filing, we have failed to file our
periodic reports with the Securities and Exchange Commission and. Market makers
ceased to make a market for our shares on the National Association of Securities
Dealers Inc. Bulletin Board. Because our Company did not file a Form 15
terminating its registration statement under the Securities Exchange Act of
1934, we remained a registrant under the Exchange Act but were seriously
delinquent in our SEC reporting obligations. We are filing this Report on Form
10-KSB in an effort to update the SEC reporting requirements in order to fully
comply with these. Currently, there is no established public trading market of
our Company's shares of Common Stock and there has been none for a period of
years. Recently, we underwent internal management restructuring in our Company,
in which Stephen M. Cohen, formerly our Commercial Sales and Service Manager and
Technician for the Custom Color and Black and White Printing Division, became
our General Manager, Secretary, Treasurer and a director; and Michael V. Cohen,
Steven M. Cohen's brother, has served several years as our President and
continues to serve as such. We are continuing the business of film processing
services and are operating a full service photo processing laboratory. We will
be taking advantage of the technological and digital advances that have been
developed in the film processing industry. Our product line has expanded to
include: "Digital C-Prints," Computer Graphic Output Scanning Services, Laser
Prints and Video Transfer Services.
Our principle place of business is located at 928 Broadway, New York, New
York 10010 and our telephone number is (212) 475-5700.
General.
We are providing a variety of photographic processing services for the
professional photographic market. We operate a full service color laboratory in
New York City.
We plan to take advantage of the recent technological advances made in the
photographic industry, such as the use of digital technologies, the Internet and
scanning equipment. These
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advances have given us an exciting new range of possibilities in the film
processing industry and printing. However, this will require additional funding
which may only become available from the sale of Common Stock, if that is
feasible.
Film Processing and Printing Services.
Our products and services include: laser/photo realistic digital copies,
35mm & 4x5 computer output from digital data, digital printing from computer
files, computer graphics creation, scans in a flash, photo cd and pro CD
scanning services, video transfer services, film to VHS video, prints from VHS
videos, custom "C" prints, quantity color prints, custom "R" prints, custom
black & white printing, professional mini-lab services, professional duping
services, plaque framing center, photo restoration & retouching, Kodachrome and
E-6 slide film processing and black & white and color contact sheet services.
Sales and Marketing.
Our Company performs film processing services for professional and
commercial photographers, photographic editors of magazines and periodicals,
photographic dealers on a wholesale basis, and amateur photographers on a retail
basis. Sales for our Company are generated primarily by telephone solicitations,
sales visits, referrals, publicity in trade journals, and from participation in
trade shows.
Customers.
For the fiscal years ended October 31, 1999, 1998 and 1997, no one
customer accounted for more than 10% of New York Film's total sales. As of
October 31, 1999, New York Film's customer base consisted of approximately 20%
professional photographers, 10% film dealers, and 20% corporate and commercial
accounts, 50% retail professional and quality oriented amateurs. Our customers
include: The Central Park Conservancy, NYU University, Kratz and Jensen, Nike
and The Museum of Modern Art.
Backlog.
Since our orders require processing on a short-term basis, the concept of
"backlog" is not relevant in our business.
Source of Supplies.
Our Company obtains chemicals utilized in the processing of film from
various unaffiliated industry sources like Kodak, Agfa, Ilford, Pic-Mount,
Film-Guard and TDA Trading. There can be no assurance that manufacturing
problems, transportation problems, environmental considerations, or other
factors may not cause a disruption in the supply of these chemicals or supplies
to our
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Company in the future. Nevertheless, we are continually seeking out alternate
suppliers of chemicals, including distributors which maintain an inventory of
chemicals.
Competition.
There are numerous entities and persons in the continental United States
which provide a variety of photo finishing and processing services similar to
the ones we provide. Many of our competitors are much larger than our Company
and have greater financial resources than we do.
Seasonality.
The nature of our business is not seasonal.
Government Contracts.
No material portion of our business is subject to renegotiations of
profits or termination of contracts or subcontracts at the election of the
Government.
Research and Development.
During the fiscal years ending October 31, 1999, 1998 and 1997, no funds
were expended for research and development.
Environmental Regulations.
We use various chemicals to process and develop film. The use of such
chemicals by our Company may be subject to Federal, state and local government
environmental regulations. The film processing procedures currently utilized by
our Company produce no toxic wastes as a by-product. Bleach used by our Company
is recycled after use. There can be no assurance, however, that any chemicals
utilized by the Company now or in the future will not be regulated by Federal,
state and local authorities, and that such regulations will not adversely affect
our Company's business.
Patents.
No relevant patents currently apply.
Employees.
As of October 31, 1999, we have employed 13 persons on a full-time basis,
including 2 officers, 3 administrative personnel and 8 technicians.
We consider our relationship with our employees satisfactory. As of the
date hereof, none of our Company's employees is a member of a union and we are
currently not aware of any attempt
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or plan to unionize any of our employees.
Item 2. Description of Property.
Our Company presently occupies 9,000 square feet of space located at 928
Broadway, New York, New York 10010. Our lease expires on February 28, 2006. Our
annual rent, beginning March 1, 2001 and ending February 28, 2002, is
$314,400.00 ($26,200.00 per month).
Our rent, from March 1, 2002 to February 28, 2003, will be $328,800.00
annually ($27,400.00 per month). From March 1, 2003 to February 29, 2004, our
rent will be $343,200.00 annually ($28,600.00 per month). From March 1, 2004 to
February 28, our rent will be $357,600.00 annually ($29,800.00 per month).
Finally, from March 1, 2005 to March 28, 2006, our rent will be $372,000.00
annually ($31,000.00 per month).
We own various laboratory equipment including: computers, film recorders
and post production equipment such as film and paper processors, mounting
machines, silver recovery units, densitometer, spectrophotometer, pH meter,
enlargers, copy camera and an automatic titrimeter.
Item 3. Legal Proceedings.
We are currently not a party to any material litigation, the result of
which could adversely affect the business of our Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended October 31, 1999.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
(a) Trading in the Company's shares of Common Stock, until 1996, took place on
the Electronic Bulletin Board of the National Association of Securities Dealers,
Inc. under the following symbols:
Common Stock - NYFW
Currently, there is no established public trading market of our Company's
shares of Common Stock.
(b) The number of record holders of our Company's Common Stock was approximately
1160 on June 8, 2000, computed by the number of record holders, excluding record
holders for whom shares are being held in the name of brokerage houses and
clearing agencies.
(c) Our Company has paid no cash dividends on our Common Stock during the past
two fiscal years. We are not subject to any restrictions affecting our present
or future ability to pay dividends with respect to our Common Stock. However, we
do not presently have any plans to pay dividends
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in the foreseeable future.
(d) Because of the large number of our outstanding shares of Common Stock, it is
quite likely that we would effect a reverse split to reduce this number.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Our Company had no material operations on which to report during the
period of our bankruptcy, which terminated near the end of our fiscal year
ending October 31, 1996. Our financial statements for the year ended October 31,
1997 and periods thereafter are included in this Report. By virtue of our being
a small business filer, we are discussing under this caption our operations for
the most recent two fiscal years.
The following discussion of the financial condition and results of
operation of our Company should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere herein.
Results of Operations.
Fiscal year ended October 31, 1999 (the "fiscal year 1999") compared to fiscal
year ended October 31, 1998 (the "fiscal year 1998").
Total revenues for our fiscal year 1999 were $1,337,326 as compared to
revenues of $1,325,093 for our fiscal year 1998. Revenues remained comparatively
flat. Nearly all of our revenues were generated by sales to professional
photographers, film dealers and photographic editors of magazines and
periodicals and no single customer accounted for 10% or more of our revenues.
Our General and Administrative Expenses have decreased by $4,513 from
$269,035 for our fiscal year 1998 to $264,522 for our fiscal year 1999 as a
result of lower executive salaries. Our Selling and Shipping Expenses, increased
by $29,112 from $414,801 for our fiscal 1998 to $443, 913 for our fiscal year
1999 due primarily to the costs and expenses associated with selling and
shipping our products. We expect that the foregoing expenses will continue to
increase if we are able to expand our customer and account base.
Liquidity and Capital Resources.
During our fiscal year 1999, cash provided by operating activities was
$106,620 compared with cash provided of $109,545 during our prior fiscal year
1998.
Our Company had working capital of $254,079 at the end of the fiscal year
1999 compared to working capital of $199,145 at the end of the fiscal year 1998.
We believe we have sufficient cash resources and working capital to meet our
capital requirements for the balance of the current fiscal year. We finance our
operations primarily with existing capital and funds generating from operations.
Year 2000 Issues.
The film processing markets were essentially unaffected by the issues
regarding Y2K, reporting only a few minor technical problems. We were not
adversely affected. However, we will continue monitoring our systems and those
of our vendors to ensure that there is no material
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disruption to our operations due to Y2K issues.
Item 7. Financial Statements.
The independent auditor's report and financial statements listed in the
accompany index by our accountants, David Suss, CPA, for the years ended October
31, 1999, 1998 and 1997 are filed as part of this report. See "Index to
Financial Statements" on page 13. The statements for the prior years have not
been prepared and attached since our Company had minimal operations during the
period in which it was involved in the bankruptcy proceeding and this
information would not be of any material importance to our stockholders, while
imposing an unnecessary expense upon our Company.
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
David Suss, CPA, is our Company's certified public accountant and has
audited our Company's financial position for the fiscal year endings 1999, 1998
and 1997. There were no reportable disputes with our prior accountants on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure.
PART III
Item 9. Directors and Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
(a) (b) Identification of Directors and Executive Officers of the
Registrant.
During the year ending October 31, 1999, the following individuals served
as executive officers and directors of our Company.
Term of Term of
Office as Office as
Name Age Position with Company Officer Director
---- --- --------------------- --------- ---------
Gerald Cohen 67 Chairman of the Board 1983 1980
of Directors
Michael V. Cohen 36 President and Director 1993 1993
Stephen M. Cohen 28 Secretary, Director and 1998 1998
Treasurer 1999
Our Directors are elected as Directors for a term of one year and until
their successors are duly elected and qualified. There are no arrangements or
understandings between any Director and other person(s), pursuant to which a
Director was selected as a Director.
Our Officers are elected for terms of one year, or until their successors
are duly elected and qualified or until terminated by the action of the Board of
Directors.
After October 31, 1999, Mr. Gerald Cohen resigned as Chairman of the
Board. Stephen M. Cohen was appointed Treasurer in June 1999.
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Our Company will be electing a new director according to the procedures of
the Business Corporation Law of New York State.
(c) Identification of Certain Significant Employees.
None.
(d) Family Relationship.
Michael V. Cohen and Stephen M. Cohen are brothers. There are no other
relationships by blood, marriage or adoption (not more remote than first cousin)
between any Director or Executive Officer of our Company.
(e) Business Experience.
Mr. Michael V. Cohen has served as our President and a director of our
Company for the past seven years. Since becoming President, Mr. Cohen
reorganized our corporate structure and without the assistance of outside
capital, structured our Company's emergence from Chapter 11. Mr. Cohen has
expanded our Company's product line to include "Digital C-Prints," Computer
Graphic output, Scanning Services, Laser Prints and Video Transfer Services. Mr.
Cohen has been employed at our Company for the past nine years in the following
capacities: Director of Operations and Special Projects Coordinator. From 1989
until 1991, he served as the Secretary of our Company. Mr. Cohen received a B.S.
degree in Business Administration from the Rochester Institute of Technology.
Mr. Stephen M. Cohen has served as the General Manager, Corporate
Secretary and a director of our Company since January 1,1998. He was appointed
Treasurer of our Company in June 1999. For the past five years, Stephen Cohen
was employed by our Company in the following capacities: Technician, Custom
Color and Black & White Printing Division, and Commercial Sales and Service
Manager. Mr. Cohen received his B.B.A. in Finance from Hofstra University.
(2) Directorships
No director of our Company holds any other directorship in any other
company with a class of securities registered pursuant to Section 12 of the
Securities Exchange Act of 1934 ("the Exchange Act") or Section 15 (d) of the
Exchange Act or any company registered as an investment company under the
Investment Company Act of 1940.
(f) Involvement in Certain Legal Proceedings.
Mr. Michael V. Cohen has served as our President of our Company since
1993. During such time, our Company underwent bankruptcy proceedings in the U.S.
Bankruptcy Courts. We filed a Chapter 7 proceeding. On September 3, 1992, our
case was converted from a Chapter 7 to Chapter
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11 proceeding, captioned In Re: New York Film Works, Debtor (Case No.:
92B-44779), under which we submitted a Plan of Reorganization in order to
restructure our pre-petition obligations, which was subsequently approved by the
Bankruptcy Court. On August 21, 1996, we were a Debtor-in Possession under which
the Court discharged us from our bankruptcy.
Item 10. Executive Compensation.
Cash Remuneration.
For the fiscal year ended October 31, 1999, no Officer or Director of our
Company received total remuneration from our Company in excess of $70,000.
Remuneration for all Officers and Directors as a group (consisting of 2 persons)
was $106,026.88.
Compensation of Directors
We do not compensate our Directors for serving in such capacity.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table of stock ownership and notes thereto relate as of June
8, 2000 to the Common Stock of the Company by (i) each person known to be the
beneficial owner of more than 5% of such voting security, (ii) each director,
(iii) each named executive officer and (iv) all executive officers and directors
as a group. The percentages have been calculated by taking into account all
shares of Common Stock owned on such date as well as all such shares with
respect to which such person has the right to acquire beneficial ownership at
such date or within 60 days thereafter. Unless otherwise indicated, all person
listed below have sole voting and sole investment power over the shares owned.
Amount and
Name and Address Nature of Beneficial Ownership
of Beneficial Owner of Class (1)(2)(3) Percent
------------------- ------------------------------ -------
Gerald Cohen 20,769,790 24.87
3200 North Ocean Boulevard
Unit 1602 D
Ft. Lauderdale, FL 33308
Michael V. Cohen 9,642,345 11.5
928 Broadway
New York, NY 10010
Peter J. Miller 4,380,105 5.2
630 Post Oak Circle
Brentwood, TN 37027
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All directors and executive 9,642,345 11.5
officers as a group (1)
(1) Based on a total of 83,500,000 shares of Common Stock issued and
outstanding.
(2) All such ownership is direct unless otherwise stated.
Item 12. Certain Relationships and Related Transactions.
(a) Transactions with Management and others.
None.
(b) Certain Business Relationships.
None.
(c) Indebtedness of Management.
None.
(d) Transaction with Promoters.
None.
Item 13. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.
(a) Documents filed as part of this report:
1. Financial Statements:
2. Financial Statement Schedules: have been omitted because the required
information is inapplicable or because the information is presented in the
financial statements or related notes.
3. Exhibits and Index:
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Exhibit
No. Description
--- -----------
3.1 Certificate of Incorporation of Registrant filed
November 5, 1980 *
3.2 Amendment to Certificate of Incorporation filed
December 14, 1981 *
3.3 Amendment to Certificate of Incorporation filed
June 14, 1983 *
3.4 Amendment to Certificate of Incorporation filed
January 13, 1984 *
3.5 Amendment to Certification of Incorporation filed
January 27, 1984 *
3.6 Amendment to Certification of Incorporation filed
April 3, 1986 *
3.7 Amendment to Certificate of Incorporation filed
November 4, 1988 *
3.8 By-Laws of the Registrant *
10.1 Lease agreement dated August 3, 1995 between the
Registrant and Hadson Realty *
10.2 Lease agreement dated as of February 29, 2000
between the Registrant and Hadson Realty*
11 Schedule showing computations of average number
of common shares outstanding, as used in the
calculations of per share earnings for October 31,
1999 *
27 Financial Data Schedule *
* Filed with EDGAR filing on this report on Form 10-K.
----------
(b) No Reports on Form 8-K were filed by the Registrant during the fiscal
quarter ended October 31, 1999.
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Item 7.
INDEX TO FINANCIAL STATEMENTS
New York Film Works, Inc.
Years Ended October 31, 1997 through October 31, 1999
Page
----
Report of Independent Auditors ........................................... F-1
Balance Sheets - October 31, 1997 though October 31, 1999 ................ F-2
Statement of Stockholders' Equity - Years Ended October 31, 1997
through October 31, 1999 ........................................... F-3
Statement of Profit and Loss - Years Ended October 31, 1997
through October 31, 1999 ........................................... F-5
Statement of Cash Flows - Years Ended October 31, 1997
through October 31, 1999 ........................................... F-6
Notes to Financial Statements ............................................ F-7
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The Board of Directors
New York Film Works, Inc.
928 Broadway
New York, New York 10010
Gentlemen:
I have audited the accompanying balance sheet of New York Film Works, Inc.
October 31, 1999, 1998 and 1997, and the related statements of income,
shareholders' equity, and cash flows for the years ended October 31, 1999, 1998
and 1997. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements and schedules based on my audits.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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 New York Film Works, Inc. of
October 31, 1999, 1998 and 1997, and the results of its operations and its cash
flows for the years ended October 31, 1999, 1998 and 1997 in conformity with
generally accepted accounting principles, and the schedules referred to above
present fairly, in all material respects, when read in conjunction with the
related financial statements, the information therein set forth.
Respectfully submitted,
/s/ David Suss, CPA
May 8, 2000
F-1
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NEW YORK FILM WORKS, INC.
CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 31,
ASSETS
Current Assets: 1999 1998 1997
---- ---- ----
Cash and Cash Equivalents - Note 1 167,169 178,165 102,816
Accounts Receivable-Net 153,132 137,612 133,343
Inventory - Note 1 11,911 10,737 11,545
Prepaid Expenses 7,886 4,766 13,544
Prepaid Insurance 5,715 6,948 13,815
--------- --------- ---------
Total Current Assets 345,813 338,228 275,063
Property, Plant and Equipment:
Machinery and Equipment 1,703,127 1,674,259 1,644,380
Furniture and Fixtures 189,048 188,085 188,085
Leasehold Improvements 436,180 435,879 435,879
--------- --------- ---------
Total 2,328,355 2,298,223 2,268,344
Less: Accumulated Depreciation 2,221,268 2,214,419 2,218,611
--------- --------- ---------
Property, Plant and Equipment - Net 113,937 83,804 49,733
Other Assets:
Security Deposits 32,058 1,100 2,863
--------- --------- ---------
Total Assets 484,958 423,132 327,659
--------- --------- ---------
F-2
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NEW YORK FILM WORKS, INC.
CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 31,
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities: 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Notes Payable - Shareholders 28,458 59,403 89,324
Accounts Payable 36,850 43,940 8,341
Accrued Expenses 26,426 35,740 52,845
----------- ----------- -----------
Total Current Liabilities 91,734 139,083 150,510
Stockholders' Equity:
Common Stock - $.001 Par Value
120,000,000 Shares Authorized;
83,500,000 Shares Issued and
Outstanding 83,500 83,500 83,500
Capital in Excess of Par 3,260,558 3,260,558 3,260,558
Retained Earnings (Deficit) (2,950,834) (3,057,454) (3,166,909)
----------- ----------- -----------
Total Shareholders' Equity 393,224 286,604 177,149
Total Liabilities and
Shareholders' Equity $ 484,958 $ 423,132 $ 327,659
----------- ----------- -----------
</TABLE>
F-3
<PAGE>
NEW YORK FILM WORKS, INC.
Statement of Shareholders' Equity
From November 1, 1996 to October 31, 1999
<TABLE>
<CAPTION>
Capital in Retained Total
Common Excess Earnings Shareholders'
Stock of Par (Deficit) Equity
------ ------ --------- ------
<S> <C> <C> <C> <C>
Balance - November 1, 1996 83,500 3,260,558 (3,241,404) 102,654
Net Income (Loss) Y/E 10-31-97 74,496 74,496
---------- ----------
Balance - November 1, 1997 83,500 3,260,558 (3,166,908) 177,150
Net Income (Loss) Y/E 10-31-98 109,454 109,454
---------- ----------
Balance - November 1, 1998 83,500 3,260,558 (3,057,454) 286,604
Net Income (Loss) Y/E 10-31-99 106,620 106,620
---------- ----------
Balance - October 31, 1999 83,500 3,260,558 (2,950,834) 393,224
---------- ---------- ---------- ----------
</TABLE>
F-4
<PAGE>
NEW YORK FILM WORKS, INC.
STATEMENT OF PROFIT AND LOSS
FOR THE YEARS ENDING OCTOBER 31,
1999 1998 1997
---- ---- ----
Sales $1,337,326 $1,325,093 $1,293,927
Cost of Sales 786,793 800,838 645,438
---------- ---------- ----------
Gross Profit 550,533 524,255 648,489
Operating Expenses:
Selling and Shipping 179,391 145,766 157,339
General and Administrative 264,522 269,035 426,290
---------- ---------- ----------
Total Operating Expenses 443,913 414,801 583,629
---------- ---------- ----------
Net Income from Operations $106,620 $109,454 $64,860
---------- ---------- ----------
Earnings before Income tax $106,620 $109,454 $64,860
Income Tax 0 0 0
---------- ---------- ----------
Net Income $106,620 $109,454 $64,860
Earnings Per Share $0.001 $0.001 $0.001
---------- ---------- ----------
Weighted Average Number of Shares 83,500,000 83,500,000 83,500,000
F-5
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NEW YORK FILM WORKS, INC.
STATEMENT OF CASH FLOWS
AS OF OCTOBER 31,
1999 1999 1997
---- ---- ----
Cash flows from operations 106,620 109,454 64,860
Increase (Decrease) in Cash
Accounts Receivable (15,522) (4,260) (7,942)
Inventory (1,174) 808 446
Prepaid Expenses 668 13,090 (6,255)
Security Deposits (30,958) 1,763 8,440
Accounts Payable (7,090) 35,599 (6,908)
Accrued Expenses 25,995 (17,105) 34,376
Stockholders Loans (59,403) (29,921) (29,987)
19,136 109,419 57,030
Cash flows from investing activities
Purchase of Property and Equipment (30,132) (34,070) 2,842
-------- -------- --------
Increase (Decrease in Cash) (10,996) 75,349 59,872
Cash beginning of year 178,165 102,816 42,944
-------- -------- --------
Cash end of year $167,169 $178,165 $102,816
-------- -------- --------
F-6
<PAGE>
NEW YORK FILM WORKS, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999
Note 1: Summary of Significant Accounting Policies
Description of Business: The Company provides film processing services
principally for the professional photographic market and the Company and its
wholly owned subsidiary E.S. Graphics, operate full service color labs.
This summary of the major accounting policies of New York Film Works, Inc. is
provided to assist the reader in evaluating the financial statements of the
Company.
Cash and Cash Equivalents: The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents.
Inventory: Inventory, which consists of supplies and raw materials, is stated at
the lower of cost or market, on a first-in, first-out basis.
Property, Plant and Equipment: Property, plant and equipment is stated at cost.
Additions, renewals and improvements, unless of relatively minor amounts, are
capitalized. Expenditures for maintenance and repairs are expensed as incurred.
The cost of property and equipment retired or sold, together with the related
accumulated depreciation, is removed from the appropriate asset and depreciation
accounts and the resulting gain or loss is included in the statement of income.
Depreciation: For financial reporting, depreciation and amortization are
provided on the straight-line method over the following estimated useful lives.
Leasehold Improvements.................... 10 Years
Machinery and Equipment................... 7 Years
Furniture and Fixtures.................... 7 Years
Income Taxes: Investment credits are accounted for under the flow-through
method. Under this method, credits are recognized as a reduction of income tax
expense in the year in which the credits are utilized for tax purposes.
F-7
<PAGE>
NEW YORK FILM WORKS, INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999
(Continued)
Note 2: Income Taxes. The Company has sustained operating losses since inception
and loss carryforwards and investment tax credits will be used to reduce future
provisions for income taxes.
The Company has available net operating loss carryforwards of $2,532,839.
Note 3: Bankruptcy. The Company entered into bankruptcy under Chapter 11 of
Federal Bankruptcy Laws 8/25/92. The Company was discharged from Chapter 11 of
federal bankruptcy 8/2/96.
F-8
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: June 12 , 2000 NEW YORK FILM WORKS, INC.
By: /s/ Michael V. Cohen
--------------------
Michael V. Cohen, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated:
Signatures Title Date
---------- ----- ----
/s/ Michael V. Cohen President and a director June 12, 2000
--------------------
Michael V. Cohen
/s/ Stephen M. Cohen Secretary, Treasurer and a June 12, 2000
-------------------- director
Stephen M. Cohen
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