SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended OCTOBER 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 2-98997-NY
NOVA INTERNATIONAL FILMS, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 11-2717273
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
6350 N.E. Campus Drive
Vancouver, Washington 98661
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: (360) 737-7700
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
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
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B not contained in this form, and no disclosure will
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. [ ] N/A
State Issuer's revenues for its most recent fiscal year: $0.
As of December 31, 2000, the aggregate market value of the Common Stock
held by non-affiliates of the Issuer (18,083,000 shares) was
approximately $361,660. The number of shares outstanding of the Common
Stock ($.00001 par value) of the Issuer as of the close of business on
December 31, 2000 was 96,583,000.
Documents Incorporated by Reference: None
<PAGE>
PART I
Item 1. Description of Business.
General Development of Business
Nova International Films, Inc. (the "Company" or the "Registrant")
was incorporated in the State of Delaware on November 27, 1984. Prior to
May 1993, the Company was principally engaged in the business of
developing, financing and producing motion pictures (sometimes herein
"film(s)") for distribution.
In January 1986, the Company completed an initial public offering
and raised gross proceeds of $1 million. During fiscal 1990, the Company
was able to complete and release two films it placed into production in
fiscal 1989. These films were entitled "Triumph of the Spirit" and
"Firebirds". Additionally, in January 1990, the Company acquired from Epic
Productions, Inc. ("Epic") all of the issued and outstanding capital stock
of Byzantine Fire, Inc. which at the time owned the rights to the completed
film property "Why Me?". This film was also released during fiscal year
1990. Other than the foregoing, the Company has not been involved in the
release of any other films.
The Company also had previously entered into an agreement in
principle with Epic, whereby the Company had the option, should Epic
produce, to co-produce a motion picture entitled "Carlito's Way" (the
"Carlito's Way Rights"). The Company also had the contractual right (the
"Van Damme Rights") to engage Jean Claude Van Damme as the lead actor in a
motion picture subject to meeting certain terms and conditions set forth in
an agreement between the parties. These two film rights, together with the
three films described above, represented as of March 1993 all of the
Company's interests in various film properties.
As a result of the closing of the Acquisition Agreement in May 1993
(as described below under "Transfer of Film Business"), the Company has no
current business operations and has begun and will continue to seek another
business opportunity. 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.
This report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs and
assumptions made by the Company's management as well as information
currently available to the management. When used in this document, the
words "anticipate", "believe", "estimate", and "expect" and similar
expressions, are intended to identify forward-looking statements. Such
statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated or
expected. The Company does not intend to update these forward-looking
statements.
Transfer of Film Business
Pursuant to an Acquisition Agreement dated March 3, 1993 (the
"Acquisition Agreement") by and between the Company and Epic, the Company
on May 12, 1993 (the "Closing") 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"), (iii) the Carlito's
Way Rights and (iv) the Van Damme Rights.
<PAGE>
In connection with the financing of the film "Triumph of the
Spirit", the Company was unable to pay to 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. As of April 30,
1993, such indebtedness totalled $9,188,864. The Company was able to
negotiate an extension of the maturity date of this note until September
30, 1991, but since then the Company has been in default of its obligation.
Pursuant to the Acquisition Agreement, at Closing, (a) 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 the Subsidiary Corporations, (ii) the Completed Films, (iii) the
Carlito's Way Rights and (iv) the Van Damme Rights, and in exchange
therefor, (b) Epic assumed all debts and liabilities of the Company with
respect to the assets acquired, paid the Company the sum of $50,000,
acquired a substantial portion of the Bank Loan from the Bank as described
below and modified the loan arrangements thereunder plus other indebtedness
due Epic from the Company.
At Closing, Epic acquired all but $3 million of the indebtedness
under 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
(which other indebtedness was $983,069 as of April 30, 1993). All of such
indebtedness acquired by Epic is hereinafter referred to as the "Primary
Obligations". The terms of such modification were as follows: (i)
principal shall be due and payable 18 years from Closing, and (ii)
interest shall be 6% per annum payable within 45 days following the close
of each fiscal year of the Company, payable in arrears commencing October
31, 1993, not to exceed 20% of the net profits of the Company during the
applicable year.
On October 29, 1993, the Company and Epic entered into an agreement
whereby Epic assigned and contributed to the capital of the Company the
indebtedness described above as the Primary Obligations of the Company to
Epic of $7,171,933 plus accrued and unpaid interest of $201,600.
As indicated above, $3 million of indebtedness under the Bank Loan
was not acquired by Epic. In connection therewith, the Bank, Epic and the
Company entered into an agreement at Closing which provided that such
portion of the Bank Loan (the "Nonrecourse Obligations") be nonrecourse to
the Company and 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, the Company assigned to Epic and Epic
assumed the remaining $3 million Nonrecourse Obligations plus interest
thereon. As a result thereof, the Company has eliminated its bank
indebtedness.
Each of the Company and Epic have agreed to indemnify the other in
respect of any claims, demands and losses (collectively, "Losses") that may
be asserted against, imposed upon and incurred by the other resulting from
the breach of any representations, warranties and obligations of the other
as contained in the Acquisition Agreement. In addition, Epic has agreed to
indemnify the Company for any Losses that arise out of or in any way are
connected to or result from the assets being acquired by Epic or any of the
Subsidiary Corporations, including without limitation, any claims arising
under or with respect to the business, operations and assets of each of the
Subsidiary Corporations. Excluded from the foregoing indemnity shall be
Losses attributable to fraud or willful misconduct. Also, the Company has
agreed to defend and hold Epic harmless against and in respect of any and
all liabilities and costs attributable to the litigation which is being
assumed by Epic described in the Acquisition Agreement, but only to the
extent such liabilities and costs are covered by applicable insurance.
As a result of the foregoing, and as stated above, the Company has
no current business operations and has begun and will continue to seek
another business opportunity. As of the date of this report, the Company
<PAGE>
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.
Financial Information about Industry Segments
The Company, which has no current business operations, has begun
and will continue to seek another business opportunity. The Company was
previously engaged solely in the film industry. As a result, there are no
separate industry segments in connection with the business of the Company.
For financial information, reference is made to the financial statements
included elsewhere herein.
Search for Business Opportunities
As described above, the Company has no current business
operations. As such, the Company can now be defined as a "shell"
corporation, whose principal business purpose at this time is to locate and
consummate a merger or acquisition with a private entity. Because of the
Company's current status, in the event the Company does successfully
acquire or merge with an operating business opportunity, it is likely that
the Company's present shareholders will experience substantial dilution and
there will be a probable change in control of the Company.
Management has begun and will continue to investigate, research
and, if justified, potentially acquire or merge with one or more businesses
or business opportunities. The Company currently has no commitment or
arrangement, written or oral, to participate in any business opportunity
and management cannot predict the nature of any potential business
opportunity it may ultimately consider. Management has broad discretion in
its search for and negotiations with any potential business or business
opportunity.
The Company has determined not to limit its search for a potential
business or business opportunity to any specific industry or industries.
In this regard, the Company has and will not restrict its search to any
specific geographical location, and the Company may participate in a
business venture of virtually any kind or nature.
The discussion of the business under this caption is purposefully
general and not meant to be restrictive of the Company's virtually
unlimited discretion to search for and enter into potential business
opportunities. No assurance can be given, however, that any transaction
will in fact be consummated.
Management anticipates that it may be able to participate in only
one potential business venture. The Company may seek a business
opportunity in the form of firms which have recently commenced operations,
are developing companies in need of additional funds for expansion into
new products or markets, are seeking to develop a new product or service,
or are established businesses which may be experiencing financial or
operating difficulties and are in need of additional capital. In some
instances, a business opportunity may involve the acquisition or merger
with a company which does not need substantial additional cash but which
desires to establish a public trading market for its Common Stock. A
company which seeks the Company's participation in attempting to
consolidate its operations through a merger, reorganization, asset
acquisition, or some other form of combination may desire to do so to
avoid what it may deem to be adverse consequences of undertaking a public
offering itself. Factors considered may include time delays, significant
expense, loss of voting control and the inability or unwillingness to
comply with various federal and state laws enacted for the protection of
investors.
The Company anticipates that the selection of a business
opportunity in which to participate will be complex and extremely risky.
Because of general economic conditions, rapid technological advances being
<PAGE>
made in some industries, and shortages of available capital, management
believes that there are numerous firms seeking even the limited additional
capital which the Company has and/or the benefits of a publicly traded
corporation. Such perceived benefits of a publicly traded corporation may
include facilities or improving the terms on which additional equity
financing may be sought, providing liquidity for the principals of a
business, creating a means for providing incentive stock options or
similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes) for all shareholders, and other
factors. Potentially available business opportunities may occur in many
different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
The Company has insufficient capital with which to provide the
owners of business opportunities with any significant cash or other
assets. However, management believes the Company will offer owners of
business opportunities the opportunity to acquire a controlling ownership
interest in a public company at substantially less cost than is required to
conduct an initial public offering. The owners of the business
opportunities will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion of their
shares for subsequent sale. The Company will also incur significant legal
and accounting costs in connection with the acquisition of a business
opportunity including the costs of preparing Form 8-K's, agreements and
related reports and documents. Nevertheless, Management of the Company has
not conducted market research and is not aware of statistical data which
would support the perceived benefits of a merger or acquisition
transaction for the owners of a business opportunity.
The analysis of new business opportunities will be undertaken by or
under the supervision of the Company's Chairman of the Board. Management
intends to concentrate on identifying preliminary prospective business
opportunities which may be brought to its attention through present
associations. In analyzing prospective business opportunities, management
will consider such matters as the available technical, financial, and
managerial resources; working capital and other financial requirements;
history or operation, if any; prospects for the future; nature of present
and expected competition; the quality and experience of management
services which may be available and the depth of that management; the
potential for further research, development, or exploration; specific risk
factors not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion;
the potential for profit; the perceived public recognition or acceptance of
products, services, or trades; name identification; and other relevant
factors. Management of the Company will meet personally with management
and key personnel of the firm sponsoring the business opportunity as part
of its investigation. To the extent possible, the Company intends to
utilize written reports and personal investigation to evaluate the above
factors.
It may be anticipated that any opportunity in which the Company
participates will present certain risks. Many of these risks cannot be
adequately identified prior to selection of the specific opportunity, and
shareholders of the Company must, therefore, depend on the ability of
management to identify and evaluate such risks. In the case of some of the
opportunities available to the Company, it may be anticipated that the
promoters thereof have been unable to develop a going concern or that such
business is in its development stage in that it has not generated
significant revenues from its principal business activity prior to the
Company's participation, and there is a risk, even after the Company's
participation in the activity and the related expenditure of the Company's
funds, that the combined enterprises will still be unable to become a
going concern or advance beyond the development stage. Many of the
opportunities may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by the
Company and, therefore, its shareholders.
In implementing a structure for a particular business acquisition,
the Company may become a party to a merger, consolidation, reorganization,
joint venture, or licensing agreement with another corporation or
<PAGE>
entity. It may also purchase stock or assets of an existing business. It
should be noted that the Company likely has insufficient capital with
which to make any acquisitions. Accordingly, in any of the transactions
alluded to herein, it is likely that the consideration utilized to make any
acquisitions will consist of equity securities.
In the event that an acquisition is made utilizing primarily equity
securities (as is expected to be the case), the percentage ownership of
present shareholders will be diluted, the extent of dilution depending
upon the amount so issued. Persons acquiring shares in connection with any
acquisition of a business may obtain an amount of equity securities
sufficient to control the Company. In addition, the Company's Directors
may, as part of the terms of the acquisition transaction, resign and be
replaced by new directors without a vote of the Company's shareholders.
Further, if the Company were to issue substantial additional securities in
any acquisition, such issuance might have an adverse effect on the trading
market in the Company's securities in the future.
As part of the Company's investigation, Management of the Company
intends to meet personally with management and key personnel, may visit
and inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of
management and key personnel, and take other reasonable investigative
measures, to the extent of the Company's limited financial resources and
management expertise.
The manner in which the Company participates in an opportunity will
depend on the nature of the opportunity, the respective needs and desires
of the Company and other parties, the management of the opportunity, and
the relative negotiating strength of the Company and such other
management.
With respect to any mergers or acquisitions, negotiations with
target company management will be expected to focus on the percentage of
the Company which target company shareholders would acquire in exchange
for their shareholdings in the target company. Depending upon, among other
things, the target company's assets and liabilities, the Company's
shareholders will in all likelihood hold a lesser percentage ownership
interest in the Company following any merger or acquisition. The
percentage ownership may be subject to significant reduction in the event
the Company acquires a target company with substantial assets. Any merger
or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the
Company's shareholders.
The Company will participate in a business opportunity only after
the negotiation and execution of appropriate written agreements. Although
the terms of such agreements cannot be predicted, generally such
agreements will require specific representations and warranties by all of
the parties thereto, will specify certain events of default, will detail
the terms of closing and the conditions which must be satisfied by each of
the parties prior to such closing, will outline the manner of bearing
costs if the transaction is not closed, will set forth remedies on default,
and will include miscellaneous other terms.
Employees
Other than its two officers, the Company currently has no
employees.
Competition
In connection with its search for another business opportunity, the
Company will remain an insignificant participant among firms which engage
in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company.
In view of the Company's limited financial
<PAGE>
resources and limited management availability, the Company will continue to
be at a significant competitive disadvantage compared to the Company's
competitors.
Item 2. Description of Property.
The Company maintains its offices on a rent-free month-to-month
basis in office space provided by one of its officers. The office is
located at 6350 N.E. Campus Drive, Vancouver, Washington 98661.
Item 3. Legal Proceedings.
At the present time, there is no material litigation pending or, to
management's knowledge, threatened against the Company.
Item 4. Submission of Matters to a Vote of Security-Holders.
No matter was submitted during the fourth quarter of the fiscal
year covered by this report to a vote of security holders.
PART II
Item 5. Market for Common Equity
and Related Stockholder Matters.
The Company's Common Stock is traded in the over-the-counter market
and is listed on the OTC Bulletin Board. The high and low bid quotations
for the Company's Common Stock tabulated below represent prices between
dealers and do not include retail markups, markdowns, commissions or other
adjustments and may not represent actual transactions.
Bid Prices
Period High Low
Fiscal Year Ended October 31, 1999:
Nov. 1, 1998 to Jan. 31, 1999 $.00 $.00
Feb. 1, 1999 to April 30, 1999 $.02 $.01
May 1, 1999 to July 31, 1999 $.16 $.01
Aug. 1, 1999 to Oct. 31, 1999 $.0625 $.01
Fiscal Year Ended October 31, 2000:
Nov. 1, 1999 to Jan. 31, 1999 $.01 $.01
Feb. 1, 2000 to April 30, 2000 $.20 $.03
May 1, 2000 to July 31, 2000 $.14 $.04
Aug. 1, 2000 to Oct. 31, 2000 $.0625 $.03
As of December 31, 2000, there were approximately 625 record
holders of the Company's Common Stock.
No dividends have been declared or paid on the Company's Common
Stock since inception. The Company presently intends to retain earnings,
if ever achieved, for use in its business and, therefore, there is no
assurance when, or if ever, dividends may be paid.
<PAGE>
Item 6. 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 for the fiscal years ended October 31,
1999 and 2000. During the fiscal year ended October 31, 2000, the Company
had a net loss of $ $(9,046) as compared to a net loss of $(4,433) during
the fiscal year ended October 31, 1999.
On October 31, 2000, the Company had a working capital deficit and
stockholders' deficit of $(11,177), $1,247 in cash, total assets of
$1,247 and total liabilities of $12,424. The working capital deficit and
stockholders' deficit is principally due to short term loans 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 $1,247 as
of October 31, 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 has no current business operations and is in the
process of seeking a business opportunity. 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.
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.
Item 7. Financial Statements.
See the Financial Statements annexed to this report.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Set forth below are the present directors and executive officers of
the Company. Note that there are no other persons who have been nominated
or chosen to become directors nor are there any other persons who have been
chosen to become executive officers. There are no arrangements or
understandings between any of the directors, officers and other persons
pursuant to which such person was selected as a director or an officer.
Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have
qualified. Officers serve at the discretion of the Board of Directors.
<PAGE>
Present Position Has Served As
Name Age and Offices Director Since
William Rifkin 80 Chairman of the Board, December 1984
Secretary and Director
Martin Rifkin 39 President, Treasurer April 1985
and Director
WILLIAM RIFKIN has been Chairman of the Board and a Director of
the Company since December 1984. Since October 1994, he has also been
Secretary of the Company. From March 1990 to October 1994, he was also the
Company's President. From 1985 through 1991, Mr. Rifkin was a
Director of Memory Sciences Corporation, a public company involved in
the computer industry, and was its Treasurer from April 1987 to January
1990. Since 1984, he has also been President and a director of Profit
Merchandising Corp. Mr. Rifkin is the father of Martin Rifkin.
MARTIN RIFKIN has been President and Treasurer of the Company since
October 1994 and a Director since April 1985. In addition, from April 1985
to October 1994, he was Vice President of the Company. Since December 1985,
Mr. Rifkin has been a Director of Nutrition Now, Inc., a public company
which manufactures and markets nutritional supplements and since
November 1987, he has been its Secretary and Treasurer and since
February 1992, its President. Also, from August 1988 to February 1992,
he was its Vice President. In addition, Mr. Rifkin has been Treasurer
and Director of Profit Merchandising Corp. (see biography of William
Rifkin above) since September 1983 and Vice President since June 1985.
Since February 1994, Mr. Rifkin has been a Director of Cyberia Holdings,
Inc. Also, from February 1994 to January 1997, he was its President,
Secretary and Treasurer. Martin Rifkin is the son of William Rifkin.
Item 10. Executive Compensation.
For the fiscal year ended October 31, 2000, none of the Company's
executive officers received compensation from the Company.
Since inception, no director has received any compensation for his
services as such. However, in the past, directors have been and will
continue to be reimbursed for reasonable expenses incurred on the Company's
behalf.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 31, 2000,
by (i) each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock; (ii) each of the
Company's directors; and (iii) directors and officers of the Company as a
group:
Number Percent
of Shares of
Name and Address Owned Class
William Rifkin 53,050,000(1) 54.9%
6350 N.E. Campus Drive
Vancouver, WA
<PAGE>
Martin Rifkin 25,450,000(2) 26.4%
6350 N.E. Campus Drive
Vancouver, WA
All Officers and 78,500,000(1)(2) 81.3%
Directors as a Group
(consisting of 2 persons)
(1) Includes 2,000,000 shares owned of record by the wife of William
Rifkin, which shares may be deemed to be beneficially owned by him.
(2) Includes 850,000 shares owned of record by the wife of Martin
Rifkin, which shares may be deemed to be beneficially owned by him,
and 150,000 shares held by Martin Rifkin as custodian for his
daughter under the Uniform Gifts to Minors Act.
Item 12. Certain Relationships and Related Transactions.
During the fiscal years ended October 31, 1999 and October 31,
2000, Martin Rifkin made short term loans to the Company in order to allow
the Company to meet certain working capital needs. As of October 31, 2000,
the principal balance owing was in the amount of $10,624. Such loans are
without interest and payable on demand.
Item 13. Exhibits, List and Reports on Form 8-K.
(a) Exhibits.
3.1 Certificate of Incorporation of Registrant with filing
receipt(1)
3.2 Certificate of Amendment of Certificate of Incorporation
with filing receipt (filed November 17, 1989)(2)
3.3 By-Laws of Registrant(1)
4.1 Specimen of Common Stock Certificate of Registrant(1)
(1) Incorporated herein by reference from Registrant's Registration
Statement on Form S-18, effective November 12, 1985.
(2) Incorporated herein by reference from Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1989.
(b) Reports on Form 8-K.
Listed below are reports on Form 8-K filed during the last quarter
of the period covered by this report:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
NOVA INTERNATIONAL FILMS, INC.
(Registrant)
By: /s/Martin Rifkin
Martin Rifkin, President
Dated: January 16, 2001
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant, and in the capacities and on the dates
indicated:
Signature Title Date
/s/William Rifkin Chairman of the Board, 1/16/01
William Rifkin Secretary and Director
(Principal Executive Officer,
Principal Financial Officer
and Principal Accounting
Officer)
/s/Martin Rifkin President, Treasurer, 1/16/01
Martin Rifkin and Director
<PAGE>
GLASSER & HAIMS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
99 WEST HAWTHORNE AVENUE
VALLEY STREAM, N.Y. 11580
ALVIN M. GLASSER, C.P.A. (516) 568-2700
IRWIN M. HAIMS, C.P.A. TELECOPIER
(516) 568-2911
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
THE BOARD OF DIRECTORS
NOVA INTERNATIONAL FILMS, INC.
We have audited the accompanying balance sheets of Nova International Films,
Inc. as of October 31, 2000 and the related statements of operations,
stockholder's equity, and cash flows for the period November 1, 1998 through
October 31, 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 audit.
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, evi-
dence 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. We believe that our audit provides 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 Nova International Films, Inc.
as of October 31, 2000 and the results of its operations and cash flows for the
period indicated above in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company has no revenues and business operations
which raise substantial doubts about its ability to continue as a going
concern, Management's plans in regard to these matters are also described in
Note 5. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
GLASSER & HAIMS, P.C.
Valley Stream, New York
December 18, 2000
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
BALANCE SHEETS
OCTOBER 31, 2000
ASSETS
Cash $ 1,247
Total assets $ 1,247
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
LIABILITIES:
Accounts payable and accrued expenses $ 1,800
Short term loan 10,624
Total liabilities $ 12,424
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' EQUITY (DEFICIT):
Common Stock, $.00001 par value; 100,000,000
shares authorized, 96,583,000 shares issued
and outstanding, respectively. $ 966
Additional paid-in capital 8,197,260
Accumulated deficit (8,209,403)
Total stockholders' (deficit) (11,177)
Total liabilities and stockholders' (deficit) $ 1,247
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF OPERATIONS
For the Year For the Year
Nov. 1, 1999 Nov. 1, 1998
Through Through
Oct. 31, 2000 Oct. 31, 1999
REVENUES $ - $ -
COST AND EXPENSES:
Selling, general and
administration expenses $ 9,059 $ 4,434
OPERATING LOSS $ (9,059) $ (4,434)
OTHER INCOME
Interest income $ 13 $ 1
LOSS BEFORE PROVISION
FOR INCOME TAXES (9,046) (4,433)
PROVISION FOR INCOME TAXES - -
NET (LOSS) $ (9,046) $ (4,433)
Net (loss) per share $ (.00010) $ (.00006)
Average no. of share outstanding 91,880,260 73,583,000
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED OCTOBER 31, 1999 AND 2000
Common Stock
$.00001 Par Value Additional
No. of Paid-in
Shares Amount Capital
Balance at October 31, 1998 73,583,000 $ 736 $ 8,197,260
Net (Loss) from 11/1/98 thru 10/31/99
Balance at October 31, 1999 73,583,000 $ 736 $ 8,197,260
Sale of Capital Stock 23,000,000 230
Net (Loss) from 11/1/99 thru 10/31/00
96,583,000 $ 966 $ 8,197,260
Accumulated
Deficit Total
Balance at October 31, 1998 $ (8,195,924) $ 2,072
Net (Loss) from 11/1/98 thru 10/31/99 (4,433) (4,433)
Balance at October 31, 1999 $ (8,200,357) $ (2,361)
Sale of Capital Stock 230
Net (Loss) from 11/1/99 thru 10/31/00 (9,046) (9,046)
$ (8,209,403) (11,177)
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
For the Year For the Year
Nov. 1, 1999 Nov. 1, 1998
Through Through
Oct. 31, 2000 Oct. 31, 1999
Cash flows from operating activities:
Net loss $ (9,046) $ (4,433)
Adjustments to reconcile net loss to
net cash provided
by operating activities:
Net changes in assets and liabilities:
Accounts payable $ 1,000 $ (1,000)
Total adjustments $ 1,000 $ (1,000)
Net cash (used)
by operating activities $ (8,046) $ (5,433)
Cash flows from investing activities:
Short term loan $ 8,000 2,624
Sale of Common Stock 230 0
Net cash provided
by investing activities $ 8,230 $ 2,624
Net increase (decrease) in cash $ 184 $ (2,809)
Cash at beginning of period 1,063 3,872
Cash at end of period $ 1,247 $ 1,063
The accompanying notes are an integral part of these statements.
<PAGE>
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 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
October 31, 2000
3) Short term loan
During the fiscal year ended October 31, 1999, and October 31, 2000 an
officer of the Company made a short term loans 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 in the total amount of $1,247. as of
October 31, 2000. Accordingly, the Company has significantly reduced
its overhead. The Company has no current business operations and is
in the process of seeking a business opportunity. 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. 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.
