FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 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: ___________
UNITED NATIONAL FILM CORPORATION
(Exact name of Small Business Issuer as specified in its charter)
Colorado 84-1092589
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6363 Christie Avenue
Emeryville, CA 94608
(Address of Principal Executive Offices)
(510) 653-7020
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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
The number of shares outstanding of the issuer's Common Stock, $.001 par
value, as of March 31, 2000 was 6,391,983 shares.
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UNITED NATIONAL FILM CORPORATION
INDEX
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet as of March 31, 2000 2
(unaudited)
Consolidated Statements of Operations (unaudited) for the
period ended March 31, 2000 3
Consolidated Statements of Cash Flows (unaudited) for the
period ended March 31, 200 4
Notes to the financial statements 5-6
Item 2. Management's discussion and analysis of financial
condition and results of operations 6
PART II - OTHER INFORMATION 6
Item 1 Legal Proceedings 6
Item 2 Changes in Securities 6
Item 3 Defaults Upon Senior Securities 6
Item 4 Submission of Matters to a Vote of Security Holders 7
Item 5 Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
Signature 7
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PART 1 FINANCIAL INFORMATION
The condensed consolidated interim financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures made are adequate to make the
information disclosed not misleading. It is suggested that the condensed
consolidated interim financial statements be read in conjunction with the
consolidated financial statement and the notes thereto included in the
Company Annual Report on Form 10-K for the year ended June 30, 1999.
The accompanying consolidated interim financial statements have been
prepared, in all material respects, in conformity with the standards of
accounting measurements set forth in Accounting Principles Board Opinion
No. 28 and reflect, in the opinion of management, all adjustments, which
are of a normal recurring nature, necessary to summarize fairly the
financial position and results of operations for such periods. The results
of operations for such interim periods are not necessarily indicative of
the results to be expected for a full year.
UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEET
(Amounts in Thousands)
(UNAUDITED)
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March 31, March 31,
2000 1999
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 912 1,823
TOTAL CURRENT ASSETS $ 912 1,823
FILM COSTS AND PRODUCTION RIGHTS 64,500 0
Total 65,412 1,823
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable 0 318
Accrued Expenses $ 5,000 0
Note payable 50,000 0
TOTAL CURRENT LIABILITIES 55,000 318
LOAN FROM SHAREHOLDER 1,500 0
STOCKHOLDERS' EQUITY:
Preferred stock - $.01 par,
3,000,000 shares
authorized, 100,000 shares
issued and outstanding 1,000 1,000
Common stock - $.001 par,
30,000,000 shares
Authorized, 6,391,983 shares
issued and outstanding 6,187 5,462
Paid in capital 205,313 133,538
Accumulated deficit (203,793) (138,495)
TOTAL STOCKHOLDERS' EQUITY 8,912 1,505
$ 65,412 1,823
See notes to financial statements
-2-
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UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months ended Three Months ended
March 31,2000 March 31, 1999
REVENUE $ 0 $ 0
COST OF REVENUES 0 0
GROSS PROFIT 0 0
EXPENSES:
General and Administrative 0 0
NET LOSS 0 0
BASIC LOSS PER SHARE 0 0
WEIGHTED AVERAGE SHARES OUTSTANDING 6,391,983 5,461,983
See notes to financial statements
-3-
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UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended March 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 0 0
Changes in operating assets and liabilities:
Decrease (increase) in accounts 0 0
Total adjustments: 0 0
NET INCREASE (DECREASE) IN CASH 0 0
CASH AT BEGINNING OF PERIOD 912 1,823
CASH AT END OF PERIOD $ 912 1,823
See notes to financial statements
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UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND BUSINESS DESCRIPTION
United National Film Corp. ("the Company") is a Colorado corporation. The
Company is engaged in the acquisition and development of properties for, and
the production of, television series, television specials, made-for-home
television motion pictures and feature length motion pictures for domestic
and international distribution.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that effect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
B. Film Costs and Program Rights - Film costs and program rights ("project
cost") which include acquisition and development costs such as story rights,
scenario and scripts, direct production costs including salaries and costs of
talent, production overhead and post-production costs are deferred and
amortized by the "individual-film-forecast-computation method" as required by
Statement of Financial Standards No. 53.
C. Fair Value of Financial Instruments - The carrying amounts reported in
the balance sheet for cash, accounts and notes payable and accrued expenses
approximate fair value based on the short term maturity of these instruments.
D. Cash Equivalents - The Company considers all highly liquid temporary cash
investments, with an original maturity of three months or less when purchased,
to be cash equivalents.
E. Revenue Recognition - The Company derived revenues primarily from
providing production services to third parties and exploiting projects
originally developed by the Company in which it retains an ownership
interest. Revenues from being a provider of contract production services
are recognized using the percentage of completion method, recognizing
revenue relative to the proportionate progress on such contracts as
measured by the ratio which project costs incurred by the Company to date
bear to the total anticipated costs of each project. Amounts advanced under
such contracts are deferred and not recognized as revenue until obligations
under such contracts are performed.
3. RELATED PARTY TRANSACTIONS
None.
-5-
4. NOTES PAYABLE
Pursuant to the acquisition of the screenplay titled, "Molly and Lawless
John", a note was issued for $50,000 which was due on January 15, 1999. The
payment date on this note has been indefinitely extended by the holder of
the note.
5. LOANS DUE TO SHAREHOLDER
In April 1999, a non-interest bearing loan was made to the Company from the
Chief Executive Officer in the amount of $1,500. This note remains
outstanding.
6. STOCK ISSUED.
None
7. GENERAL
Reference is made to the financial statements included in the Company's
Annual Report (Form 10-K) filed with the Securities and Exchange Commission
for the year ended June 30, 1999.
The Company began its operation in February 1998. The financial statements
for the period ended December 31, 1999 are unaudited but include
all adjustments which, in the opinion of management, are necessary for a
fair presentation of the results of operations for the period then ended.
All such adjustments are of a normal recurring nature. The results of
the Company's operations for any interim period are not necessarily
indicative of the results of the Company's operations for a full fiscal year.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company is a development stage enterprise with no expenses incurred
during the period. The Company is engaged in active negotiations with a
potential funding source for one or more of its screenplays. In addition,
the Company is continuing to seek funding for the distribution of its
children's animation film, "Snappy Sings", an educational short. The
Company is exploring the licensing of film rights to Internet broadcasting
companies and has discussed through third parties the suitability of
several films in the Western genre to which the Company has access. Funding
for the Company is expected to take place during the year 2000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Subsequent to the date of the quarter, the Company has initiated legal
proceedings to cancel certain stock certificates. The basis of the lawsuit
is the failure of the recipients of the stock certificates to deliver
consideration for the shares.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
-6-
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
Exhibit 27.1 Financial Data Schedule, attached.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements 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.
UNITED NATIONAL FILM CORP.
By: /s/ Deno Paoli
President
Date: February 14, 2000
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<PAGE>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 OF
UNITED NATIONAL FILM CORPORATION, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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