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 April 30, 2001
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _______ to _________
Commission file number 0-13245
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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 of (IRS Employer
incorporation or organization) Identification No.)
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)
- --------------------------------------------------------------------------------
(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 June 8, 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:
Balance Sheets as of April 30, 2001
(unaudited) and October 31, 2000 4
Statement of Profit and Loss for the
Three Months Ended and Six Months Ended April 30, 2001
(unaudited) and April 30, 2000 6
Statement of Cash Flows for the
Six Months Ended April 30, 2001 and 2000 (unaudited) 7
Statement of Shareholders' Equity for the Period Ended
April 30, 2001 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 six months ended
April 30, 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.
Balance Sheets as of
April 30, 2001 (unaudited) and October 31, 2000
ASSETS
April 30, 2001 October 31, 2000
-------------- ----------------
Current Assets:
Cash and Cash Equivalents - Note 1 $ 153,558 $ 197,326
Accounts Receivable-Net 117,841 128,415
Inventory - Note 1 14,453 13,495
Prepaid Expenses 3,113 2,388
Prepaid Insurance 3,453 5,711
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Total Current Assets 292,418 347,335
Property, Plant and Equipment:
Machinery and Equipment -Net 1,740,947 1,727,445
Furniture and Fixtures 189,048 189,048
Leasehold Improvements 436,180 436,180
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Total 2,366,175 2,352,673
Less: Accumulated Depreciation 2,242,069 2,242,069
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Property, Plant and Equipment - Net 124,106 110,604
Other Assets:
Security Deposits 31,918 32,058
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Total Assets $ 448,442 $ 489,997
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4
NEW YORK FILM WORKS, INC.
Balance Sheets as of
April 30, 2001 (unaudited) and October 31, 2000
LIABILITIES AND SHAREHOLDERS' EQUITY
April 30, 2001 October 31, 2000
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Current Liabilities:
Accounts Payable 20,125 21,403
Accrued Expenses & Taxes 31,370 35,972
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Total Current Liabilities 51,495 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) (2,947,111) (2,911,436)
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Total Shareholders' Equity 396,947 432,622
Total Liabilities and
Shareholders' Equity 448,442 489,997
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5
NEW YORK FILM WORKS, INC.
Statement of Profit and Loss
3 mo ended 6 mo ended 3 mo ended 6 mo ended
Apr 30, 2001 Apr 30, 2001 Apr 30, 2000 Apr 30, 2000
------------ ------------ ------------ ------------
Sales 302,443 647,486 345,794 649,416
Cost of Sales 199,472 402,927 204,703 410,232
------------ ------------ ------------ ------------
Gross Profit 102,971 244,559 141,091 239,184
Operating Expenses:
Selling and Shipping 28,944 68,793 25,834 53,508
General and Admin 96,439 211,441 155,594 268,785
------------ ------------ ------------ ------------
Total Operating Expenses 125,383 280,233 181,428 322,293
------------ ------------ ------------ ------------
Net Income (Loss) from
Operations $ (22,412) $ (35,675) $ (40,337) $ (83,109)
------------ ------------ ------------ ------------
Earnings(Loss) before tax $ (22,412) $ (35,675) $ (40,337) $ (83,109)
Income Tax 0 0 0 0
------------ ------------ ------------ ------------
Net Income (Loss) $ (22,412) $ (35,675) $ (40,337) $ (83,109)
Earnings Per Share 0.00 0.00 0.00 0.00
Weighted Average Number
of Shares 83,500,000 83,500,000 83,500,000 83,500,000
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NEW YORK FILM WORKS, INC
Statement of Cash Flows
Six months ended April 30, 2001 and April 30, 2000
April 30, April 30,
2001 2000
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Cash flows from operations (35,675) (89,958)
Increase (Decrease) in Cash
Accounts Receivable 10,574 884
Inventory (958) (1,044)
Prepaid Expenses (725) 6,298
Prepaid Insurance 2,258 3,761
Security Deposits 140 -0-
Notes Payable -0- 12,790
Accounts Payable (1,278) 9,575
Accrued Expenses (4,602) 5,837
Stockholders Loans -0- (28,458)
Cash flows from investing activities:
Purchase of Property and Equipment (13,502) (25,907)
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Increase (Decrease in Cash) (43,768) (106,222)
Cash beginning 197,326 167,169
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Cash end $ 153,558 $ 60,947
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7
NEW YORK FILM WORKS, INC.
Statement of Shareholders' Equity
From November 1, 1998 to April 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
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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 -6 mos April 30, 2001 (35,675) (35,675)
Balance - April 30, 2001 83,500 3,260,558 (2,947,111) 396,947
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NEW YORK FILM WORKS, INC.
Notes to Financial Statements April 30, 2001
Note 1: Summary of Significant Accounting Policies
Description of Business: The Company provides full service film processing
services principally for the professional photographic market.
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 $2,532,839.
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 and Six Months ended April 30, 2001 and
2000
Total Sales include the selling price of the products and services sold by us.
Total Sales for the three months ended April 30, 2001 were $302,443 as compared
to sales of $345,794 for the corresponding period ended April 30, 2000. The
demand for our products and services decreased by $43,351. Total Sales for the
six month period ended April 30, 2001 decreased slightly by $1,930 from the
corresponding period ended April 30, 2000; thus Total Sales for the current six
month period were $647,486 as compared to Total Sales of $649,416 for the six
months ended April 30, 2000. 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 to $199,472 for the three months ended April 30,
2001 as compared to the reported Cost of Sales of $204,703 for the corresponding
period ended April 30, 2000. During the six months ended April 30, 2001, Cost of
Sales decreased by approximately $7,305 from the corresponding period ended
April 30, 2000; thus Cost of Sales for the current six month period were
$402,927 as compared to Cost of Sales of $410,232 for the six months ending
April 30, 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 decreased by $59,155 from $155,594
for the three months ended April 30, 2000 to $96,439 for the three months ended
April 30, 2001. General and Administrative Expenses for the six months ended
April 30, 2001 decreased to $211,441 from $268,785 for the six months ended
April 30, 2000. Our Selling and Shipping Expenses, increased by $3,110 from
$25,834 for the three months ended April 30, 2000 to $28,944 for the three
months ended April 30, 2001 due primarily to the costs and expenses associated
with selling and shipping our products. Our Selling and Shipping Expenses for
the six months ended April 30, 2001 were $68,793 as compared to $53,508 for the
corresponding period ended April 30, 2000.
Liquidity and Capital Resources
At April 30, 2001 our Company's Cash and Cash Equivalents were $153,558 compared
to $197,326 at October 31, 2000.
Our Company had working capital of $240,923 for the three months ended April 30,
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.
10
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibit was filed as part of this report:
Exhibit 11. Statement re: computation of per share earnings
(b) No reports on Form 8-K were filed during the quarter ended April 30,
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: June 13, 2001 NEW YORK FILM WORKS, INC.
By: /s/ Michael V. Cohen
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Michael V. Cohen, President
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