UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended January 31, 2001
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______ to _________
Commission file number 0-13245
New York Film Works, Inc.
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(Exact name of small business issuer as specified in its charter)
New York 13-3051895
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
928 Broadway, New York, New York 10010
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(Address of principal executive offices)
(212) 475 - 5700
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |_| No |_| Not Applicable |X|
- - Securities have not been distributed.
The number of shares outstanding of the issuer's common stock, par value $.001
per share, as of April 2, 2001 was 83,500,000.
Transitional Small Business Disclosure Format (Check One): Yes |_| No |X|
NEW YORK FILM WORKS, INC.
Index Financial Statements
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets as of January 31, 2001 (Unaudited) and
October 31, 2000 4
Consolidated Statements of Operations for the Three Months Ended January
31, 2001 (Unaudited) and January 31, 2000 6
Consolidated Statements of Cash Flows for the Three Months Ended January
31, 2001 and 2000 (Unaudited) 7
Consolidated Statement of Shareholders' Equity (Unaudited) 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
2
NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-QSB that
are not statements of historical fact constitute forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These statements involve risks and uncertainties
that may cause actual results to differ materially from those in such
statements. See Part I, Item 2 "Management's Discussion and Analysis and Results
of Operation" for additional information and factors to be considered with
respect to forward-looking statements.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The accompanying interim unaudited financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included, and the disclosures are adequate to make the
information presented not misleading. Operating results for the three months
ended January 31, 2001, are not necessarily indicative of the results that may
be expected for the year ended October 31, 2001. These statements should be read
in conjunction with the financial statements and notes thereto included in the
Annual Report on Form 10-KSB (filed with the Securities and Exchange Commission)
for the year ended October 31, 2000.
3
NEW YORK FILM WORKS, INC.
Consolidated Balance Sheets
ASSETS
January 31, 2001 October 31, 2000
(Unaudited)
---------------- ----------------
Current Assets:
Cash and Cash Equivalents - Note 1 $ 158,602 $ 197,326
Accounts Receivable-Net 124,245 128,415
Inventory - Note 1 13,406 13,495
Prepaid Expenses 4,555 2,388
Prepaid Insurance 7,787 5,711
---------- ----------
Total Current Assets 308,595 347,335
========== ==========
Property, Plant and Equipment:
Machinery and Equipment - Net 1,733,446 1,727,445
Furniture and Fixtures 189,048 189,048
Leasehold Improvements 436,180 436,180
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Total 2,358,674 2,352,673
Less: Accumulated Depreciation 2,242,071 2,242,069
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Property, Plant and Equipment - Net 116,603 110,604
Other Assets:
Security Deposits 32,058 32,058
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Total Assets $ 457,256 $ 489,997
========== ==========
4
NEW YORK FILM WORKS, INC.
Consolidated Balance Sheets
LIABILITIES AND SHAREHOLDERS' EQUITY
January 31, 2001 October 31, 2000
(Unaudited)
---------------- ----------------
Current Liabilities:
Accounts Payable 9,992 21,403
Accrued Expenses & Taxes 27,905 35,972
----------- -----------
Total Current Liabilities 37,897 57,375
=========== ===========
Stockholders' Equity:
Common Stock - $.001 Par Value
120,000,000 Shares Authorized;
83,500,000 Shares Issued and
Outstanding 83,500 83,500
Capital in Excess of Par 3,260,558 3,260,558
Retained Earnings (Deficit) (2,924,699) (2,911,436)
----------- -----------
Total Shareholders' Equity 419,359 432,622
Total Liabilities and
Shareholders' Equity $ 457,256 $ 489,997
=========== ===========
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NEW YORK FILM WORKS, INC.
Consolidated Statement of Operations
Three Months Ended
January 31, 2001 January 31,2000
(Unaudited)
---------------- ---------------
Sales $ 345,043 $ 303,622
Cost of Sales 203,454 205,529
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Gross Profit 141,588 98,093
Operating Expenses:
Selling and Shipping 39,849 27,674
General and Administrative 115,002 113,191
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Total Operating Expenses 154,851 140,865
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Net Income (Loss) from Operations $ (13,263) $ (42,772)
============ ============
Earnings (Loss) before Income tax $ (13,263) $ (42,772)
Income Tax 0 0
------------ ------------
Net Income (Loss) $ (13,263) $ (42,772)
============ ============
Earnings Per Share $ 0.00 $ 0.00
Weighted Average Number of Shares 83,500,000 83,500,000
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NEW YORK FILM WORKS, INC.
Consolidated Statement Of Cash Flows
(Unaudited)
Three Months Ended
January 31, 2001 January 31,2000
----------------- ---------------
Cash flows from operations $ (13,263) $ (49,622)
Increase (Decrease) in Cash
Accounts Receivable 4,170 30,306
Inventory 89 (888)
Prepaid Expenses (2,167) 1,844
Prepaid Insurance (2,076) 74
Accounts Payable (11,411) 21,566
Notes Payable 21,412
Accrued Expenses (8,067) 12,255
Stockholders Loans (28,458)
Cash flows from investing activities
Purchase of Property and Equipment (5,999) (3,248)
--------- ---------
Increase (Decrease in Cash) (38,724) 5,241
Cash beginning of period 197,326 167,169
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Cash end of period $ 158,602 $ 172,410
========= =========
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NEW YORK FILM WORKS, INC.
Statement of Shareholders' Equity (Unaudited)
From November 1, 1997 to January 31, 2001
Capital in Retained Total
Common Excess Earnings Shareholders'
Stock of Par (Deficit) Equity
-------- ------ ----------- -----------
$ $ $ $
Balance - November 1, 1998 83,500 3,260,558 (3,057,454) 286,604
Net Income (Loss) Y/E 10-31-99 106,620 106,620
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Balance - October 31, 1999 83,500 3,260,558 (2,950,834) 393,224
Net Income and Adj Y/E 39,398 39,398
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Balance - October 31, 2000 83,500 3,260,558 (2,911,436) 432,622
Net Loss - 3 mos January 31,2001 (13,263) (13,263)
Balance - January 31, 2001 83,500 3,260,558 (2,924,699) 419,359
---------- ----------
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NEW YORK FILM WORKS, INC.
NOTES TO FINANCIAL STATEMENTS JANUARY 31, 2000
(Unaudited)
Note 1: Summary of Significant Accounting Policies
Description of Business: The Company provides film processing services
principally for the professional photographic market and the Company operates a
full service color lab.
This summary of the major accounting policies of New York Film Works, Inc. is
provided to assist the reader in evaluating the financial statements of the
Company.
Cash and Cash Equivalents: The Company considers all highly liquid investments
with a maturity of three months or less when purchased to be cash equivalents.
Inventory: Inventory, which consists of supplies and raw materials, is stated at
the lower of cost or market, on a first-in, first-out basis.
Property, Plant and Equipment: Property, plant and equipment is stated at cost.
Additions, renewals and improvements, unless of relatively minor amounts, are
capitalized. Expenditures for maintenance and repairs are expensed as incurred.
The cost of property and equipment retired or sold, together with the related
accumulated depreciation, is removed from the appropriate asset and depreciation
accounts and the resulting gain or loss is included in the statement of income.
Depreciation: For financial reporting, depreciation and amortization are
provided on the straight-line method over the following estimated useful lives.
Leasehold Improvements.................. 10 Years
Machinery and Equipment................. 7 Years
Furniture and Fixtures.................. 7 Years
Income Taxes: Investment credits are accounted for under the flow-through
method. Under this method, credits are recognized as a reduction of income tax
expense in the year in which the credits are utilized for tax purposes.
Note 2: Income Taxes. The Company has sustained operating losses since inception
and loss carry forwards and investment tax credits will be used to reduce future
provisions for income taxes.
The Company has available net operating loss carry forwards of $2,482,348.
Note 3: Bankruptcy. The Company entered into bankruptcy under Chapter 11 of
Federal Bankruptcy Laws 8/25/92. The Company was discharged from Chapter 11 of
federal bankruptcy 8/2/96.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion of the financial condition and results of operation of
our Company should be read in conjunction with the consolidated financial
statements and notes thereto appearing elsewhere herein.
Discussion of Financial Condition and Results of Operations
Results of Operations - Three Months ended January 31, 2001 and 2000
Total Sales include the selling price of the products and services sold by us.
Total Sales for our quarter ended January 31, 2001 were $345,043 as compared to
sales of $303,622 for the quarter ended January 31, 2000. The demand for our
products and services increased slightly by approximately $41,421. Nearly all of
our sales were generated by sales to professional photographers, film dealers
and photographic editors of magazines and periodicals. No single customer
accounted for 10% or more of our sales revenues.
The Cost of Sales decreased slightly to $203,454 for the quarter ended January
31, 2001 from $205,529 for the quarter ended January 31, 2000.
Our General and Administrative Expenses consist of payroll, executive and
administrative personnel expenses and other general corporate related expenses.
Our General and Administrative Expenses have increased by $1,811 from $113,191
for the quarter ended January 31, 2000 to $115,002 for the quarter ended January
31, 2001. Our Selling and Shipping Expenses, increased by $12,175 from $27,674
for the quarter ended January 31, 2000 to $39,849 for the quarter ended January
31, 2001 due primarily to the costs and expenses associated with selling and
shipping our products. We expect that the foregoing expenses will continue to
increase if we are able to expand our customer and account base.
Liquidity and Capital Resources
At January 31, 2001 our Company's Cash and Cash Equivalents were $158,602
compared to $197,326 at October 31, 2000.
Our Company had working capital of $270,698 for the quarter ended January 31,
2001 compared to working capital of $289,960 at October 31, 2000. We believe we
have sufficient cash resources and working capital requirements for the balance
of the current fiscal year. However, any projections of future cash needs is
subject to substantial uncertainty. We finance our operations primarily with
existing capital and funds generated from operations.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
o Statement re: computation of per share earnings - Exhibit 11
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended January
31, 2001.
11
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.
Date: April 3, 2001 NEW YORK FILM WORKS, INC.
By: /s/ Michael V. Cohen
--------------------------
Michael V. Cohen, President
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