Image Innovations (IMGV) 10QSB/A 2003 Q2 Quarterly report (small business) (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 2 TO
FORM 10-QSB

x  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period endedJUNE 30, 2003

¨  Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period ________ to ________

Commission File Number0-50119

IMAGE INNOVATIONS HOLDINGS INC.
(Exact name of small Business Issuer as specified in its charter)

NEVADA	91-1898414
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)
SUITE 1109, 100 PARK ROYAL
WEST VANCOUVER, BRITISH COLUMBIA
CANADA	V7T 1A2
(Address of principal executive offices)	(Zip Code)
Issuer’s telephone number, including area code:	(604) 925-5283

BUSANDA EXPLORATIONS INC.
1550 Ostler Court
North Vancouver, British Columbia, Canada V7G 2P1
Telephone: 604-990-2072
(Former name, former address and former fiscal year, if changed since last report)

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 preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days
x Yes¨  No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:18,170,000 Shares of $0.001 par value Common Stock outstanding as of September 30, 2003.

Transitional Small Business Disclosure Format (check one): Yes¨  No x

THIS AMENDMENT NO. 2 TO QUARTERLY REPORT ON FORM 10-QSB HEREBY AMENDS ITEM 1 OF PART I OF THE QUARTERLY REPORT ON FORM 10-QSB FOR THE SIX MONTHS ENDED JUNE 30, 2003 FILED BY IMAGE INNOVATIONS HOLDINGS INC. (FORMERLY BUSANDA EXPLORATIONS INC.) WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 19, 2003, AS AMENDED OCTOBER 15, 2003, TO INCLUDE REVISED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2003.

PART I - FINANCIAL INFORMATION

ITEM 1.              FINANCIAL STATEMENTS.

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BUSANDA EXPLORATIONS INC.
Consolidated Balance Sheet
(Unaudited)

		June 30
		2003
ASSETS
Current Assets
Cash	$	33,983
Prepaid Expenses		120,480
		154,463
Office Equipment		4,481
	$	158,944
LIABILITIES AND SHAREHOLDER'S DEFICIENCY
Current Liabilities
Accounts Payable	$	19,219
Stockholder Advances		23,750
Demand Loan HE Capital		351,840
		384,809
Shareholders Deficiency
Common Stock		18,170
50,000,000 authorized shares, par value $
18,170,000 shares issued and outstanding
Additional Paid in Capital (Defecit)		(39,547	)
Preferred Stock
1,000,000 authorized preferred shares, par value $
Nil shares issued and outstanding
Accumulated Deficit		(214,488	)
		(235,865	)
	$	158,944

The accompanying notes are integral part of the consolidated financial statements.
F-1

BUSANDA EXPLORATIONS INC.
Consolidated Statement of Operations
(Unaudited)

		Three Months Ended			Six Months Ended
		June 30			June 30
		2003			2003
Revenues:
Revenues	$	-		$	-
		-			-
Expenses:
Legal & Professional Fees		750			1,821
Communications		3,514			6,893
Depreciation		151			154
Insurance		10,284			10,284
Office Rent & Utilities		6,680			7,080
Payroll		69,244			112,286
Product Development		11,567			15,345
Other Expenses		21,293			40,625
		123,483			194,488
Loss before Taxes		(123,483	)		(194,488	)
Provision for Income Taxes:
Income Tax		-			-
Net Income (Loss)	$	(123,483	)	$	(194,488	)
Basic and Diluted Earnings Per Common Share	$	(0.01	)	$	(0.02	)
Weighted Average number of Common Shares
used in per share calculations		8,318,100			8,236,550

The accompanying notes are integral part of consolidated financial statements.
F-2

BUSANDA EXPLORATIONS INC.
Consolidated Statement of Changes in Shareholders' Equity
(Unaudited)

			$	0.001		Additional			Accumulated			Shareholders'
	Shares			Par Value		Paid-In Capital			Deficit			Equity
Issued by Image on incorporation -
January 14, 2003	1,000		$	-	$	1,000		$	-		$	1,000
Prior Image share capital, replaced
by Busanda share capital upon
consolidation under reverse
takeover accounting	(1,000	)		-		-			-			-
Current Image share capital, replaced
by Busanda share capital upon
consolidation under reverse
takeover accounting	18,170,000			18,170		(1,000	)		(17,170	)		-
Net monetary liabilities of Busanda
acquired by Image	-			-		-			(22,377	)		(22,377	)
Transferred to Accumulated Paid In
Capital						(39,547	)		(39,547	)
Adjustment to Retained Deficit to
recognize costs related to the
transaction									(20,000	)		(20,000	)
Net Income (Loss)	-			-		-			(194,488	)		(194,488	)
Balance, June 30, 2003	18,170,000		$	18,170	$	(39,547	)	$	(214,488	)	$	(235,865	)

The accompanying notes are integral part of consolidated financial statements.
F-3

BUSANDA EXPLORATIONS INC.
Consolidated Statement of Cash Flows
(Unaudited)

		Three Months Ended			Six Months Ended
		June 30			June 30
		2003			2003
Cash Flows from Operating Activities:
Net Income (Loss)	$	(123,483	)	$	(194,488	)
Adjustments to reconcile net loss to net cash
provided (used) to operating activities:
Depreciation		151			154
Increase (Decrease) in Working Capital		(115,762	)		(134,511	)
Total Adjustments		(115,611	)		(134,357	)
Net Cash Used in Operating Activities		(239,094	)		(328,845	)
Cash Flows from Investing Activities:
Office Equipment		(2,913	)		(4,635	)
Net Cash Used in Investing Activities		(2,913	)		(4,635	)
Cash Flows from Financing Activities:
Demand Loan HE Capital		247,921			351,840
Issuance of Stock for Cash		-			1,000
Cash Component of Net Liabilities
of Busanda Acquired		14,623			14,623
Net Cash Provided for Financing Activities		262,544			367,463
Net Increase (Decrease) in Cash		20,537			33,983
Cash Balance, Begin Period		13,446			-
Cash Balance, End Period	$	33,983		$	33,983
Supplemental Disclosures:
Cash Paid for interest	$	-		$	-
Cash Paid for income taxes	$	-		$	-

The accompanying notes are integral part of consolidated financial statements.
F-4

BUSANDA EXPLORATIONS INC.
Notes to Consolidated Financial Statements
As at June 30, 2003

1.	Basis of preparation and presentation: The accompanying consolidated financial statements have been prepared to reflect the legal acquisition on June 30, 2003 of Image Innovations Inc. (“Image”) by Busanda Explorations Inc. (“Busanda”) (the “Acquisition”). The consolidated financial statements of Busanda give effect to the Acquisition under which the shareholders of Image Innovations exchanged all of their common shares of Image Innovations for common shares of Busanda. Notwithstanding its legal form, the Acquisition has been accounted for as a reverse takeover, as the former shareholders of Image own in aggregate approximately 55% of the common shares of Busanda, and so are now the majority shareholders of Busanda. Also, as Busanda was an inactive company with nominal net non-monetary assets, the Acquisition has been accounted for as an issuance of stock by Image accompanied by a recapitalization (see note 3 Common Stock). The net monetary liabilities of Busanda acquired by Image have been charged to the accumulated deficit. As required under reverse takeover accounting, these financial statements have been issued under the name of Busanda and reflect the share capital structure of Busanda. However, they reflect the financial statements of Image and account for the Acquisition as an acquisition of Busanda by Image. The consolidated financial statements therefore include:
	(a)	a consolidated balance sheet prepared from the unaudited balance sheets of Busanda and Image as at June 30, 2003.
	(b)	consolidated statements of operations, cash flows and changes in shareholders’ equity (deficit) prepared from the unaudited statements of operations, cash flows and changes in shareholders’ equity (deficit) of Image for the period from January 14, 2003 (date of incorporation of Image) to June 30, 2003 and for the three months ended June 30, 2003. The results of operations, cash flows and changes in shareholders’ equity (deficit) of Busanda are included commencing June 30, 2003, the date of the Acquisition.
	Image was incorporated on January 14, 2003. The consolidated statement of operations has been prepared for the period from this date to June 30, 2003. No comparative information has been provided as this is the first year of operations for Image.
2.	Summary of Significant Accounting Policies: Organization Busanda was incorporated under the laws of the State of Nevada on March 3, 1998 for the purpose to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Nevada. Busanda has a total of 50,000,000 authorized common shares with a par value of $.001 per share and with 18,170,000 common shares issued and outstanding as of June 30, 2003. Busanda has a total of 1,000,000 authorized preferred shares with a par value of $.01 per share, there were no preferred shares issued and outstanding as of June 30, 2003. The consolidated financial statements for Busanda Explorations Inc. (the Company) included herein

F-5

BUSANDA EXPLORATIONS INC.
Notes to Consolidated Financial Statements
As at June 30, 2003

are unaudited but reflect, in management’s opinion, all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of the Company’s financial position and the results of its operations for the interim periods presented and are necessary to ensure that the financial statements of the company are not misleading.

Busanda had entered into an agreement to purchase mineral property claims in the Laird Mining Division, British Columbia, Canada, but lost the claim due to lack of funding. Busanda has no other business.

Image was incorporated under the laws of the State of Delaware on January 14, 2003 for the purpose to promote and carry on any lawful business for which a corporation may be incorporated under the laws of the State of Delaware. Image has a total of 1,500 authorized common shares with no par value and has 1,000 common shares issued and outstanding as of June 30, 2003.

Image has been established to become a recognized player in the field of promotional licensing and branding. Image’s goal is to add value to a wide variety of relatively low cost, but desirable or essential products, by endorsing them with the brand logos of sports teams and/or household trademarks.

On February 11, 2003, Image entered into a retail license agreement with NHL Enterprises, L.P. to market Image’s products under the National Hockey League brand.

Image has submitted a proposal to National Football League Properties to obtain a license to market Image’s products under the NFL brand.

Development Stage Enterprise

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As at June 30, 2003, the Company had no revenues, and has accumulated operating losses since its inception. The continuation of the Company is dependent upon achieving a profitable level of operations as well as maintaining existing long-term financing. Management plans to raise equity capital to finance the operations and capital requirements of the Company. The Company has committed all of its net working capital as at June 30, 2003 to complete the development of the Company’s business plan. It plans to continue the design, installation and operation of promotional licensing and branding and marketing efforts to commence the operation of its newly chosen line of business and to secure further long-term financing. While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available to sustain operations.

Earnings per Common Share

The consolidated Busanda adopted Financial Accounting Standards (SFAS) No. 128, “Earnings Per Share,” which simplifies the computation of earnings per share requiring the restatement of all prior periods.

Basic earnings per share are computed on the basis of the weighted average number of common shares outstanding during each year.

Diluted earnings per share are computed on the basis of the weighted average number of common shares and dilutive securities outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.

Fair Value of Financial Instruments

The Financial Accounting Standards Board (“FASB”) Statement No. 107 “Disclosure About Fair Value of Financial Instruments” is a part of a continuing process by the FASB to improve information on

F-6

BUSANDA EXPLORATIONS INC.
Notes to Consolidated Financial Statements
As at June 30, 2003

	consolidated financial statements. The carrying amounts reported in the balance sheets for The consolidated Busanda’s assets and liabilities approximate their fair values as of June 30, 2003.
3.	Common Stock Busanda has authorized 50,000,000 common shares. At June 30, 2003, Busanda has issued 18,170,000 shares of common stock to various investors. Busanda has authorized 1,000,000 preferred shares. At June 30, 2003 no preferred shares have been issued.
4.	Restatement Subsequent to the issuance of the Company's June 30, 2003 financial statements, management determined that it should restate its June 30, 2003 financial statements and related disclosures. This reinstatement is being made to reflect the basis of presentation as described in Note 1 and to properly record the reverse takeover accounting as described in Note 1. A summary of the significant effects of the restatement is as follows:

	As Previously	As
	Reported	Restated
Prepaid Expenses	129,397	120,480
Goodwill	29,397	0
Additional Paid In Capital	62,145	39,547
Accumulated Defecit	264,886	214,865

5. Subsequent Events Subsequent to June 30, 2003, Busanda has changed its name to Image Innovations Holdings Inc. There were no other material subsequent events that have occurred since the balance sheet date that warrants disclosure in these consolidated financial statements.

F-7

PART II--OTHER INFORMATION

ITEM 6.              EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS REQUIRED BY ITEM 601

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(1)
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)

⁽¹⁾ Filed as an Exhibit to this Amendment No. 2 to Quarterly Report on Form 10-QSB.

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SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

IMAGE INNOVATIONS HOLDINGS INC.

Date:	FEBRUARY 19, 2004
By:	/s/ Alain Kardos
	ALAIN KARDOS
	PRESIDENT,
	CHIEF EXECUTIVE OFFICER
	AND DIRECTOR
By:	/s/ Christopher Smith
	CHRISTOPHER SMITH
	CHIEF FINANCIAL OFFICER,
	AND DIRECTOR

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