SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2000
[ ] 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 Small Business Issuer as Specified in its Charter)
Delaware 11-2717273
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification
organization) Number)
6350 N.E. Campus Drive
Vancouver, Washington 98661
(Address of Principal Executive Offices)
(360) 737-7700
(Issuer's Telephone Number, including Area Code)
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.
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:
Common, $.00001 par value per share: 96,583,000
outstanding as of June 1, 2000
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NOVA INTERNATIONAL FILMS, INC.
Index to Financial Information
Period Ended April 30, 2000
Item
Page
Item 1 - Financial Statements
Balance Sheets 3
Statements of Operations 4-5
Statements of Cash Flows 6
Notes to Financial Statements 7-8
Item 2 - Management's Discussion
and Analysis
or Plan of Operation 9
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
BALANCE SHEETS
(Unaudited)
APRIL 31, OCTOBER 31,
2000 1999
ASSETS
Cash $ 1,269 $ 1,063
Total assets $ 1,269 $ 1,063
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 800 $ 800
Short term loan 6,624 2,624
Total liabilities $ 7,424 $ 3,424
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common Stock, $.00001 par value; 100,000,000
shares authorized, 96,583,000 shares issued
and outstanding, respectively. $ 966 $ 736
Additional paid-in capital 8,197,260 8,197,260
Accumulated deficit (8,204,381) (8,200,357)
Total stockholders' equity $ (6,155) $ (2,361)
Total liabilities and stockholders' equity $ 1,269 $ 1,063
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the For the
Quarter Ended Quarter Ended
April 30, 2000 April 30, 1999
REVENUES:
Interest $ 3 $ -
COSTS AND EXPENSES:
General and administrative 1,207 975
OPERATING LOSS $ (1,204) $ (975)
PROVISION FOR INCOME TAXES - -
NET INCOME (LOSS) $ (1,204) $ (975)
Net (Income loss) per share $ (.00001) $ (.00001)
Average no. of shares outstanding 96,583,000 73,583,000
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Six For the Six
Mos. Ended Mos. Ended
April 30, 2000 April 30, 1999
REVENUES:
Interest $ 5 -
COSTS AND EXPENSES:
General and administrative $ 4,029 2,488
LOSS BEFORE PROVISION
FOR INCOME TAXES $ (4,024) $ (2,488)
PROVISION FOR INCOME TAXES - -
NET INCOME (LOSS) $ (4,024) $ (2,488)
Net (Income loss) per share $ (.00005) $ (.00003)
Average no.
of shares outstanding 87,099,575 73,583,000
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(Unaudited)
For the Six For the Six
Months Ended Months Ended
April 30, 2000 April 30, 1999
Cash flows from
operating activities:
Net loss $(4,024) $(2,488)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Net changes in assets and liabilities:
Accounts payable $ - $(1,000)
Total adjustments $ - $(1,000)
Net cash provided (used) by
operating activities $(4,024) $(3,488)
Cash flows from investing activities:
Short term loan $ 4,200 $ -
Sale of Common Stock 30 -
Net cash provided
by investing activities $ 4,230 $ 0
Net increase (decrease) in cash $ 206 $(3,488)
Cash at beginning of period 1,063 3,872
Cash at end of period $ 1,269 $ 384
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
1) Nature of Business and Organization
Nova International Films, Inc. (the Company) was incorporated on November
27, 1984 in the State of Delaware. The Company was formed for the purpose
of financing and producing motion pictures for distribution in the
theatrical, home video and pay and free television markets throughout the
world.
a. Issuance of Common Stock
On January 2, 1986, the Company completed a public offering, whereby ten
million (10,000,000) units were sold at $.10 per unit, each unit consisting
of one (1) share of Common Stock, $.00001 par value, and one (1) Redeemable
Common Stock Purchase Warrant. These warrants have now lapsed.
b. 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 (collectively, the "Subsidiary
Corporations"); (ii) all rights to the completed films "Triumph of the
Spirit", "Firebirds" and "Why Me?", (sometimes collectively herein the
"Completed Films"); 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 #4 "Debt" and modified the loan
arrangements thereafter plus other indebtedness due Epic from the Company.
2) Summary of Significant Accounting Policies
a. Financial Statement Presentation
In accordance with the provisions of Statement of Financial Accounting
Standards No. 53, the Company has elected to present an unclassified
balance sheet.
b. Per Share Amounts
Per share amounts are based on the weighted average number of shares
outstanding during the period.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
3) Short term loan
An officer of the Company made a short term loan to the Company in order to
allow the Company to meet certain working capital needs. Such loan is
without interest and payable on demand.
4) 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.
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
(The "Nonrecourse Obligations") 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.
As of November 30, 1995, Nova assigned to Epic and Epic assumed the
remaining $3 million Nonrecourse Obligations plus interest thereon.
5) Liquidity and Capital Resources
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 $1,269.
Accordingly, the Company has significantly reduced its overhead. The
Company is in the process of seeking a business opportunity. At this time
the Company is presently negotiating with certain parties in connection
with acquiring a business opportunity. No contractual arrangements have
been reached and negotiations are still in progress. 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.
Management has indicated that for the foreseeable future it cover those
costs necessary to retain the Company's corporate charter, file necessary
tax returns and report to the Securities and Exchange Commission, and cover
certain expenses in seeking business opportunities.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion should be read in conjunction with the
Financial Statements and Notes thereto and is qualified in its entirety by
the foregoing.
The Company had no revenues from operations for the three and six
months ended April 30, 2000 and for the three and six months ended April
30, 1999. During the three months ended April 30, 2000, the Company had a
net loss of $(1,204) as compared to a net loss of $(975) during the three
months ended April 30, 1999. During the six months ended April 30, 2000,
the Company had a net loss of $(4,024) as compared to a net loss of
$(2,488) during the six months ended April 30, 1999.
On April 30, 2000, the Company had a working capital deficit and
stockholders' deficit of $(6,155), $1,269 in cash, total assets of $1,269
and total liabilities of $7,424. The working capital deficit and
stockholders' deficit is principally due to a short term loan made by the
President of the Company in order to allow the Company to meet certain
working capital needs.
At the current time, the Company's sole means to pay for its
overhead operations is its existing cash in the total amount of $1,269 as
of April 30, 2000. Accordingly, the Company has significantly reduced its
overhead. In connection therewith, the Company does not pay any officer
salaries and rent. Its costs primarily include only those costs necessary
to retain its corporate charter, file necessary tax returns and report to
the Securities and Exchange Commission, and certain expenses in seeking
business opportunities.
In addition, as a result of the closing of the Acquisition
Agreement (see Notes to the Financial Statements included elsewhere
herein), the Company is in the process of seeking a business opportunity.
As of the date of this report, the Company is negotiating with certain
parties in connection with acquiring a business opportunity. No
contractual arrangements have been reached and negotiations are still in
progress. 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. Management has indicated that for the
foreseeable future it will cover those costs necessary to retain the
Company's corporate charter, file necessary tax returns, report to the
Securities and Exchange Commission, and cover certain expenses in seeking
business opportunities.
Year 2000 Issue
The year 2000 issue is the result of computer programs being
written using two digits, rather than four, to define the applicable year.
Software programs and hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than
the year 2000. This could result in a major system failure or
miscalculations causing disruptions of operations, including a temporary
inability to engage in normal business activities. As a result, many
companies have been required to undertake major projects to address the
year 2000 issue.
Prior to the year 2000, such issues were not material to the
Company's business, operations or financial condition in view of the
Company's lack of business operations. However, year 2000 issues may
become material to the Company in the event the Company acquires or
participates in another business opportunity. Management intends to
address these issues with any prospective merger, acquisition candidate or
other participant.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
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-QSB.
(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: June 5, 2000 By: /s/ William Rifkin
William Rifkin,
Chairman of the Board
(Principal Executive Officer)
Dated: June 5, 2000 By: /s/ William Rifkin
William Rifkin, Principal
Financial Officer
