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 July 31, 2002
[ ] 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 August 31, 2002
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NOVA INTERNATIONAL FILMS, INC.
Index to Financial Information
Period Ended July 31, 2002
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
NOVA INTERNATIONAL FILMS, INC.
BALANCE SHEETS
(Unaudited)
JULY 31, OCTOBER 31,
2002 2001
ASSETS
Cash $1,934 $2,878
Total assets $1,934 $2,878
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses $1,800 $ 1,800
Short term loan 17,824 16,624
Total liabilities $19,624 $18,424
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common Stock, $.00001 par value; 100,000,000
shares authorized, 96,583,000 shares issued
and outstanding, respectively. $ 966 $ 966
Additional paid-in capital 8,197,260 8,197,260
Accumulated deficit -8,215,916 -8,213,772
Total stockholders' equity $-17,690 $-15,546
Total liabilities and stockholders' equity $1,934 $2,878
The accompanying notes are an integral part of these statements.
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the For the
Quarter Ended Quarter Ended
July 31, 2002 July 31, 2001
REVENUES:
Interest $ 0 $ 1
COSTS AND EXPENSES:
General and administrative 437 $1,232
OPERATING LOSS $ 437 $ -1,231
PROVISION FOR INCOME TAXES $- $-
NET INCOME (LOSS) $ -437 -1,231
Net (Income loss) per share $-.00000 $-.00001
Average no. of shares outstanding 96,583,000 96,583,000
The accompanying notes are an integral part of these statements.
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For the Nine For the Nine
Mos. Ended Mos. Ended
July 31, 2002 July 31, 2001
REVENUES:
Interest $ 0 $ 6
COSTS AND EXPENSES:
General and administrative $2,144 $3,242
LOSS BEFORE PROVISION FOR INCOME TAXES $ -2,144 $ -3,236
PROVISION FOR INCOME TAXES - -
NET INCOME (LOSS) $-2,144 $-3,236
Net Income (loss) per share $-.00002 $-.00003
Average no. of shares outstanding 96,583,000 96,583,000
The accompanying notes are an integral part of these statements.
NOVA INTERNATIONAL FILMS, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(Unaudited)
For the Nine For the Nine
Months Ended Months Ended
July 31, 2002 July 31, 2001
Cash flows from operating activities:
Net loss $-2,144 $-3,236
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Net changes in assets and liabilities:
Accounts payable $0 $0
Total adjustments $0 $0
Net cash provided (used) by
operating activities $-2,144 $-3,236
Cash flows from investing activities:
Short term loan $1,200 $6,000
Net cash provided by investing activities $1,200 $6,000
Net increase (decrease) in cash $ -944 $ 2,764
Cash at beginning of period 2,878 1,247
Cash at end of period $1,934 $4,011
The accompanying notes are an integral part of these
statements.
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2002
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.
NOVA INTERNATIONAL FILMS, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 2002
3) Short term loan
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
$1,934. as of July 31, 2002. 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.
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.
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. Certain of these risks and uncertainties are
discussed under the caption "Uncertainties and Risk Factors"
in Part I, Item 1 "Description of Business" of the Company's
Annual Report on Form 10-KSB for the year ended October 31,
2001. The Company does not intend to update these forward-
looking statements.
The Company had no revenues from operations for the
three and nine months ended July 31, 2002 and for the three and
nine months ended July 31, 2001. During the three and nine
months ended July 31, 2002, the Company had a net loss of
$(437) and $(2,144), respectively, as compared to a net loss of
$(1,231) and $(3,236), respectively, during the three and nine
months ended July 31, 2001.
On July 31, 2002, the Company had a working capital
deficit and stockholders' deficit of $(17,690), $1,934 in
cash, total assets of $1,934 and total liabilities of $19,624.
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 $1,934 as of July 31, 2002. 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
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.
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.
99.1 Certification pursuant to U.S.C. Section
1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
(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.
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 12, 2002 By: /s/ William Rifkin
William Rifkin,
Chairman of the Board
(Principal Executive Officer)
Dated: September 12, 2002 By: /s/ William Rifkin
William Rifkin, Principal
Financial Officer
CERTIFICATIONS
I, William Rifkin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Nova International Films, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the
statements made, in light of the circumstances under
which such statements were made, not misleading with
respect to the period covered by this quarterly report;
and
3. Based on my knowledge, the financial statements,
and other financial information included in this
quarterly report, fairly present in all material
respects the financial condition, results of
operations and cash flows of the registrant as of, and
for, the periods presented in this quarterly
report.
Date: September 12, 2002 /s/ William Rifkin
William Rifkin
Chairman of the Board and
Principal Executive Officer
I, William Rifkin, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
Nova International Films, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit
to state a material fact necessary to make the
statements made, in light of the circumstances under
which such statements were made, not misleading with
respect to the period covered by this quarterly report;
and
3. Based on my knowledge, the financial statements,
and other financial information included in this
quarterly report, fairly present in all material
respects the financial condition, results of
operations and cash flows of the registrant as of, and
for, the periods presented in this quarterly
report.
Date: September 12, 2002 /s/ William Rifkin
William Rifkin
Principal Financial Officer
EXPLANATORY NOTE REGARDING CERTIFICATIONS: Representations 4, 5
and 6 of the Certifications as set forth in this Form 10-QSB
have been omitted, consistent with the Transition Provisions
of SEC Exchange Act Release No. 34-46427, because this
Quarterly Report on Form 10-QSB covers a period ending before
the Effective Date of Rules 13a-14 and 15d-14.
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Nova International
Films, Inc. (the "Company") on Form 10-QSB for the period ended
July 31, 2002, as filed with the Securities and Exchange
Commission on the date hereof (the "Report"), the undersigned
certifies, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to
the best of the undersigned's knowledge, that:
(1) The Report fully complies with the requirements
of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
(2) The information contained in the Report fairly
presents, in all material respects, the
financial condition and results of operations of
the Company.
Date: September 12, 2002 /s/ William Rifkin
William Rifkin,
Chairman of the Board and
Principal Executive Officer
Date: September 12, 2002 /s/ William Rifkin
William Rifkin,
Principal Financial Officer