SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JULY 31, 1995
[ ] 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 2-98997-NY
NOVA INTERNATIONAL FILMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 11-2717273
(State or other jurisdiction I.R.S. Employer
of incorporation or Identification
organization) Number)
501 S.E. COLUMBIA SHORES BOULEVARD
SUITE 350
VANCOUVER, WASHINGTON 98661
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (360) 737-6800
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date:
Common, $.00001 par value per share: 73,583,000 outstanding as of September 1,
1995
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
NOVA INTERNATIONAL FILMS, INC.
INDEX TO FINANCIAL INFORMATION
PERIOD ENDED JULY 31, 1995
ITEM PAGE
Item 1 - Financial Statements
Balance Sheets
Statements of Operations
Statements of Cash Flows
Notes to Financial Statements
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
July 31 October 31
1995 1994
<S> <C> <C>
ASSETS
Cash $ 28,642 $ 38,967
Furniture and equipment at cost,
less accumulated depreciation 1,344 3,035
Total assets $ 29,986 $ 42,002
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
LIABILITIES:
Accounts payable and accrued
expenses $ 7,000 $ 7,026
Debt 3,608,399 3,375,119
Total liabilities $ 3,615,399 $ 3,382,145
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT):
Common Stock, $.00001 par value;
100,000,000 shares authorized,
73,583,000 shares issued
and outstanding, respectively. $ 736 $ 736
Additional paid-in capital 8,197,260 8,197,260
Accumulated deficit (11,783,409) (11,538,139)
Total stockholders'
equity (deficit) $ (3,585,413) $ (3,340,143)
Total liabilities and
stockholders' equity
(deficit) $ 29,986 $ 42,002
</TABLE>
The accompanying notes and previous 10K filing are an integral part
of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended For the Nine Mos. Ended
July 31, July 31, July 31, July 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ -
COST AND EXPENSES
General and
administrative 3,926 725 10,944 5,547
Depreciation 563 1,243 1,691 3,729
4,489 1,968 12,635 9,276
OPERATING LOSS (4,489) (1,968) (12,635) (9,276)
OTHER INCOME
Interest income 194 328 645 915
194 328 645 915
OTHER EXPENSES
Interest expense 80,345 61,396 233,280 164,321
80,345 61,396 233,280 164,321
LOSS BEFORE PROVISION FOR
INCOME TAXES (84,640) (63,036) (245,270) (172,682)
PROVISION FOR INCOME TAXES - - - -
NET LOSS (84,640) (63,036) (245,270) (172,682)
Net loss per share ($0.0012) ($0.0009) ($0.0033) ($0.0023)
Average number of
shares outstanding 73,583,000 73,583,000 73,583,000 73,583,000
</TABLE>
The accompanying notes and previous 10K filing are an integral part
of these statements
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter Ended For the Nine Mos. Ended
July 31, July 31, July 31, July 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Cash flows from
operating activities:
Net loss (84,640) (63,036) (245,270) (172,682)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
Depreciation 563 1,243 1,691 3,729
Net changes in
assets and
liabilities:
Accounts payable - 23 (26) (472)
Total adjustments 563 1,266 1,665 3,257
Net cash provided (used)
by operating
activities (84,077) (61,770) (243,605) (169,425)
Cash flows from financing
actvities:
Net proceeds from debt
financing 80,345 61,096 233,280 163,546
Net cash provided (used)
by financing
activities 80,345 61,096 233,280 163,546
Net (decrease) increase
in cash (3,732) (674) (10,325) (5,879)
Cash at beginning
of period 32,374 43,067 38,967 48,272
Cash at end
of period 28,642 42,393 28,642 42,393
</TABLE>
The accompanying notes and previous 10K filing are an integral part
of these statements
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
1) GENERAL
The interim financial statements are unaudited but, in the opinion
of management, reflect all adjustments necessary for a fair presentation
of the results for each period presented. The results of operations
for any interim period are not necessarily indicative of the results
for the full year. These financial statements should be read in
conjunction with the financial statements for the year ended October
31, 1994 and the notes thereto contained in the Company's 10-K.
2) DISPOSITION OF ASSETS
On May 12, 1993 (the "Closing"), the stockholders of the Company
approved an Acquisition Agreement dated March 3, 1993 (the
"Acquisition Agreement") by and between the Company and Epic
Productions, Inc. ("Epic"), pursuant to which the Company sold,
assigned, transferred and conveyed to Epic and Epic acquired from the
Company (i) all of the issued and outstanding shares of capital stock
of each of Byzantine Fire, Inc. a California corporation, Wings of the
Apache, Inc., a California corporation, and A/R Productions, Ltd., a
California corporation; (ii) all rights to the completed films
"Triumph of the Spirit", "Firebirds" and "Why Me?"; and (iii) the
Company's rights related to the film project "Carlito's Way" and Jean
Claude Van Damme. In exchange therefor, Epic assumed all debts and
liabilities of the Company with respect to the assets acquired, paid
the Company the sum of $50,000, acquired the Bank Loan from the Bank
as described in Note #3 "Debt" and modified the loan arrangements
thereunder plus other indebtedness due Epic from the Company.
3) DEBT
In connection with the financing of the film "Triumph of the Spirit",
the Company was unable to pay Credit Lyonnais Bank Nederland N.V. (the
"Bank") the note payable (the "Bank Loan") incurred to finance such
film at its original maturity date of March 31, 1991. The Company was
able to negotiate an extension of the maturity date of this note until
September 30, 1991, but thereupon the Company became in default of its
obligation.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
Upon the Closing of the Acquisition Agreement, Epic acquired the Bank
Loan from the Bank and modified the payment terms of the Bank Loan
assigned to it and other indebtedness of the Company to Epic. In
October 1993, Epic assigned and contributed to the capital of the
Company all of such indebtedness of the Company to Epic plus accrued
and unpaid interest. In addition, at the Closing, $3 million of
indebtedness (plus interest thereon) under the Bank Loan was not
acquired by Epic, pursuant to which the Bank, Epic and the Company
agreed that such portion of the Bank Loan be payable interest and then
principal only from operating receipts from "Triumph of the Spirit"
which was acquired by Epic pursuant to the Acquisition Agreement.
4) LIQUIDITY AND CAPITAL RESOURCES
In the past, the Company's overhead had been funded by an ongoing
arrangement with its bank. The bank has indicated that it will no
longer fund the Company's ongoing overhead. At the current time, the
Company's sole means to pay for its overhead operations is its
existing cash reserves in the total amount of $28,642 as of July 31,
1995. Accordingly, the Company has reduced its overhead.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
During the fiscal quarter ended July 31, 1995, the Company incurred a
net loss of $84,640 as compared to a net loss of $63,036 for the quarter
ended July 31, 1994. For the nine months ended July 31, 1995, the Company
incurred a net loss of $245,270 as compared to a net loss of $172,682 for
the comparable fiscal 1994 period. This increase in net loss is primarily
due to higher interest expense associated with existing debt levels.
LIQUIDITY AND CAPITAL RESOURCES
In the past, the Company's overhead has been funded by an ongoing
arrangement with its bank. The bank has indicated that it will no longer
fund the Company's ongoing overhead. At the current time, the Company's
sole means to pay for its overhead operations is its existing cash reserves
in the total amount of $28,642 as of July 31, 1995. Accordingly, the
Company has reduced its overhead.
In addition, as a result of the closing of the Acquisition Agreement
(see Notes to the Financial Statements included herein), the Company has no
current business operations and has begun and will continue to seek another
business opportunity which may or may not be in the film industry. As of
the date of this report, the Company has no agreement, understanding or
arrangement to acquire or participate in any specific business opportunity.
No assurance can be given that the Company will be able to consummate any
such arrangements or, if consummated, that such business opportunity will
be successful.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
None.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
See Notes to Financial Statements included elsewhere herein.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
None.
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
There are no exhibits applicable to this Form 10-Q.
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the quarter for
which this report is filed:
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NOVA INTERNATIONAL FILMS, INC.
(Registrant)
Dated:SEPTEMBER 6, 1995 By:/S/WILLIAM RIFKIN
William Rifkin,
Chairman of the Board
(Principal Executive Officer)
Dated:SEPTEMBER 6, 1995 By:/S/WILLIAM RIFKIN
William Rifkin, Principal
Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NOVA
INTERNATIONAL FILMS, INC.'S QUARTERLY REPORT FOR THE QUARTER ENDED JULY
31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 28,642
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 28,642
<PP&E> 1,344
<DEPRECIATION> 0
<TOTAL-ASSETS> 29,986
<CURRENT-LIABILITIES> 7,000
<BONDS> 3,608,399
<COMMON> 736
0
0
<OTHER-SE> 8,197,260
<TOTAL-LIABILITY-AND-EQUITY> 29,986
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,489
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 80,345
<INCOME-PRETAX> (84,640)
<INCOME-TAX> 0
<INCOME-CONTINUING> (84,640)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (84,640)
<EPS-PRIMARY> (.0012)
<EPS-DILUTED> (.0012)
</TABLE>
