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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION ------------------------
Washington, D.C. 20549 OMB Number: 3235-0416
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FORM 10-QSB Expires: April 30,2003
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Estimated average burden
hours per response: 32.0
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[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2002
or
[ ] 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: 00-32681
United Film Partners, Inc
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(Name of small business issuer in its charter)
Texas 76-0676164
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(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1224 N. LINCOLN ST. BURBANK, CA 91506
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(Address of principal executive offices)
949-271-9198
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Issuer's telephone number
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 36,312,500 at May 15, 2002.
Transitional Small Business disclosure Format (check one): Yes [ ] No [ ]
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the last 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
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED FILM PARTNERS, INC f/k/a ILN BETHANY CORPORATION
(A Development Stage Company)
BALANCE SHEET (UNAUDITED)
March 31, 2002
ASSETS
Film Inventories $ 890,000
Deferred tax asset less valuation allowance of $1,322 -
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TOTAL ASSETS $ 890,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts $ 541
Accrued professional fees 2,500
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TOTAL LIABILITIES 3,041
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STOCKHOLDERS' EQUITY
Preferred Stock, $.0001 par value, 20,000,000 shares
authorized; none outstanding -
Common Stock, $.0001 par value, 100,000,000 shares
authorized; 36,312,500 shares issued and outstanding 3,631
Additional paid-in capital 892,143
Deficit accumulated during the development stage (8,815)
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TOTAL STOCHOLDERS' EQUITY 886,959
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 890,000
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See accompanying notes.
F-3
UNITED FILM PARTNERS, INC f/k/a ILN BETHANY CORPORATION
(A Development Stage Company)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT DURING THE DEVELOPMENT STAGE (UNAUDITED)
For the three Cumulative
months ended since
March 31, 2002 inception
EXPENSES
Organizational expenses $ - $ 985
Consulting and professional fees 500 5,577
Other operating expenses 600 2,253
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NET LOSS BEFORE INCOME TAX (1,100) (8,815)
INCOME TAXES - -
---------- ----------
NET LOSS AND ACCUMULATED DEFICIT DURING THE
DEVELOPMENT STAGE (1,100) (8,815)
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
(BASIC AND DILUTED) 36,312,500 26,357,782
========== ==========
NET LOSS PER SHARE (BASIC AND DILUTED) $ (0.0000) $ (0.0003)
========== ==========
See accompanying notes.
F-4
UNITED FILM PARTNERS, INC f/k/a ILN BETHANY CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the three Cumulative
months ended since
March 31, 2002 inception
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,100) $ (8,815)
Adjustments to reconcile net loss to net
cash used by operating activities
Common stock issued to charitable organization - 10
Stock issued under employee stock
incentive plan as compensation - 121
Increase in liabilities
Accounts payable - 541
Accrued professional fees 500 2,500
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NET CASH USED BY OPERATING ACTIVITES ( 600) (5,643)
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CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issued for cash - 1,000
Contributed Capital 600 4,643
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NET CASH PROVIDED BY FINANCING ACTIVITIES 600 5,643
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NET INCREASE IN CASH AND EQUIVALENTS FOR THE PERIOD
AND CUMULATIVE DURING THE DEVELOPMENT STAGE - -
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD - -
--------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ - $ -
========= =========
SUPPLEMENTAL DISCLOSURES
Interest paid $ - $ -
Income taxes paid $ - $ -
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Common stock issued per plan of reorganization
for film inventories $ - $ 890,000
Common stock issued for services $ 121 $
========= =========
See accompanying notes.
F-5
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity
United Film Partners, Inc (A Development Stage Company) (the
Company) was incorporated in Texas on April 2, 2001 under the name
ILN Bethany Corporation (Bethany) to serve as a vehicle to effect
a merger, exchange of capital stock, asset acquisition or other
business combination with a domestic or foreign private business.
The Company entered into a business combination and acquired all of
the assets and liabilities of United Film Partners, Inc, a Delaware
Corporation (UFP Delaware) on July 9, 2001, pursuant to an agreement
and Plan of Reorganization. The agreement set forth that Bethany
would issue 30,000,000 shares to the shareholders of UPF Delaware.
The Company's name was changed to United Film Partners, Inc and will
now engage in the motion picture business.
At March 31, 2002, the company had not yet commenced any formal
business operations. The company's fiscal year-end is December 31.
The Company's ability to commence operations is contingent upon
its ability to raise the capital it will require through the
issuance of equity securities, debt securities, bank borrowings or
a combination thereof.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
Income Taxes
The Company follows Statement of Financial Accounting Standards No.
109 (FAS 109), "Accounting for Income Taxes". FAS 109 is an asset
and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of
the difference in events that have been recognized in the Company's
financial statements compared to the tax returns.
Advertising
Advertising costs will be expensed as incurred.
Net Loss Per Common Share
Basic net loss per common share is computed by dividing net loss
applicable to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted net loss per
common share is determined using the weighted-average number of
common shares outstanding during the period, adjusted for the
dilutive effect of common stock equivalents, consisting of shares
that might be issued upon exercise of common stock options. In
periods where losses are reported, the weighted-average number of
common shares outstanding excludes common stock equivalents, because
their inclusion would be anti-dilutive.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
Film inventories
Costs incurred in connection with the acquisition of story rights,
development of stories, treatment of screenplays, etc, are capitalized
as film inventories. The costs of each property screenplay is
capitalized and is amortized in the proportion that revenue realized
relates to management's estimate of the total revenue expected to be
realized from such screenplays. Film inventories are stated at the
lower of unamortized cost or estimated net realizable value. Selling
costs and other distribution costs are charged to expense as incurred.
During the year ended December 31, 2001 there were no revenue, selling
or distribution costs.
Development Stage Company
The Company has been devoting its efforts to activities such as
raising capital, establishing sources of information, and
developing markets for its planned operations. The Company has
not yet generated any revenues and, as such, it is considered a
development stage company.
Recent Pronouncements
In July 2001, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 141 (SFAS 141), "Business Combinations" and
Financial Accounting Standards No. 142 (SFAS 142), "Goodwill and
Other Intangible Assets." SFAS 141 requires that all business
combinations be accounted for using the purchase method only and
that certain acquired intangible assets in a business combination
be recognized as assets apart from goodwill.
SFAS 142 requires that ratable amortization of goodwill be replaced
with periodic test of the goodwill impairment and that intangible
assets other than goodwill and other indefinite lived intangible
assets, be amortized over their useful lives. SFAS 141 is effective
for all business combinations initiated after June 30, 2001 and for
all business combinations accounted for by the purchase method for
which the date of acquisition is after June 30, 2001. The provisions
of SFAS 142 will be effective for fiscal years beginning after
December 15, 2001. The impact of SFAS 141 was applied to the business
combination of July 9, 2001 and has been accounted for as a purchase.
The impact of SFAS 142 on the financial statements has not yet been
determined.
Fair Value of Financial Instruments
Accounts payable and accrued professional fees are carried at amounts
which reasonably approximate their fair value due to the short-term
nature of these amounts or due to variable rates of interest which
are consistent with current market rates.
NOTE 2. RELATED PARTY TRANSACTIONS
In July 2001, 30,000,000 shares were issued to the stockholders
of UFP Delaware pursuant to Plan of Reorganization in exchange
for the assets of UFP Delaware.
NOTE 3. BUSINESS COMBINATION
On July, 2001, the Company completed a business combination
pursuant to a Plan of Reorganization with UFP Delaware
by exchanging 30,000,000 shares of its common stock for all of the
assets of UFP Delaware valued at $890,000. The combination
has been accounted for as a purchase.
NOTE 4. INCOME TAXES
At March 31, 2002, the Company had a net operating loss of
approximately $8,800. This loss may be used to offset federal income
taxes in future periods. However, if subsequently there are
ownership changes in the Company, as defined in Section 382 of the
Internal Revenue Code, the Company's ability to utilize net
operating losses available before the ownership change may be
restricted to a percentage of the market value of the Company at
the time of the ownership change. Therefore, substantial net
operating loss carry forwards could, in all likelihood, be limited
or eliminated in future years due to a change in ownership as
defined in the Code. The utilization of the remaining carry forwards
is dependent on the Company's ability to generate sufficient taxable
income during the carry forward periods and no further significant
changes in ownership.
The Company computes deferred income taxes under the provisions of
FASB Statement No. 109 (SFAS 109), which requires the use of an asset
and liability method of accounting for income taxes. SFAS No. 109
provides for the recognition and measurement of deferred income tax
benefits based on the likelihood of their realization in future years.
A valuation allowance must be established to reduce deferred income
tax benefits if it is more likely than not that, a portion of the
deferred income tax benefits will not be realized.
NOTE 5. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the Company incurred
a net loss of $8,815 for the period from inception (April 2, 2001) to
March 31, 2002. The ability of the Company to continue as a going
concern is dependent upon its ability to obtain financing and achieve
profitable operations. The Company anticipates meeting its cash
requirements through the financial support of its shareholders and
raising of capital. The financial statements do not include any
adjustments that might be necessary should the Company be unable to
continue as a going concern.
NOTE 6. STOCKHOLDERS' EQUITY
Shares issued for services
In July 2001, the Company issued 5,000,000 shares of common
stock for a total of $1,000. A stock subscription receivable was
recorded in connection with this transaction. In July 2001, a
shareholder of the Company provided consulting services, which
were estimated at $1,000 and paid-off the stock subscription
receivable.
Shares Issued pursuant to Plan of Reorganization
The Company entered into a business combination with UPF Delaware
pursuant to an agreement and Plan of Reorganization. Pursuant to
this agreement the Company issued 30,000,000 shares to the
shareholders of UFP Delaware for its total assets valued at
$890,000.
Contributed Capital
During the period from inception (April 2, 2001) to December 31, 2001,
a shareholder of the Company contributed $4,043 to pay for the Company's
various expenses.
Preferred Stock
The Board of Directors is authorized to establish the rights and
preferences of preferred stock. To date, the Board of Directors
has not established those rights and preferences.
NOTE 7. STOCK INCENTIVE PLAN
During the period ended December 31, 2001, the Company adopted a
Stock Incentive Plan and issued 1,212,500 pursuant to this Plan.
The Plan is aimed at attracting and retaining key employees,
non-employee directors and consultants to achieve long-term
corporate objectives. These shares were recorded at a par
value of $0.0001 and incentive compensation of $121 is
included in consulting and professional fees.
In October 2001, The Company issued 100,000 shares to the Boys &
Girls Club of Anaheim as a charitable contribution.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Our company was created to cover an untapped market based upon the
knowledge that the sums of money currently spent by the major studios
far exceed the actual costs required to develop motion pictures and
TV shows. Development of a motion picture or T.V. project consists of
bringing together all the necessary elements, script, actors, producers,
directors, financing and distribution into a complete "package" ready
for production.
We will utilize our contacts and resources to partner together
any or all of the missing elements, keeping a project from reaching
production, into a single united " package" ready for production.
Through this united partnership of filmmakers, we will be able to
deliver motion picture and T.V. projects at a cost substantially
less than most independent production companies or studios
Our management team has over 58 years of combined experience in the
film and T.V. industry. Our experience enables our members to determine
the key components necessary to complete a successful "packaging"
of a project. Our niche will thus be bridging the gap between concept
(the idea), financing (the investor(s)), and ultimately production
(the studios and production companies) for a project - serving a need
that is long overdue.
We are inspired to be able to capture the value of our niche
marketability. Our partner's combined talents will serve as a resource
to any size studio or production company by effectively developing and
packaging a project at a fraction of a studio's cost. We are able to
do this because of our low overhead and the unique structure of our
partnership pipeline.
Filmmakers can depend on us to provide them with top quality elements
"packaged" in such a manner as to potentially save them more than
two (2) years of development time and hundreds of thousands of
dollars in development spending. We will package projects in a
comparatively short period of time with significantly reduced costs.
Not only will filmmakers save money by utilizing our Company to develop
and package their projects, the time they save will allow them the
opportunity to increase the number of films being brought to the screen.
In summary, the uniquely combined abilities, experience and business
concepts of our members garner our opportunities to create a significant
impact to all that benefit from the creative arts. We will ascertain
the filmmaker's, investor's, distributor's, and production company's
product and talent needs and then fulfill them by attaching bankable
talent to viable projects. While working on carefully selected projects
and utilizing respective talents, we will be able to follow our
passions and create a company that will flourish and profit from our
collective efforts. The concept of our Company is unique in that our
current competitors will also be our key customers, thus ultimately
creating partnerships with all filmmaking entities, including the studios.
To date, our Company's current business activities have consisted primarily
of developing a business plan, assembling a management team, and pursuing
packaging and financing opportunities.
RISK FACTORS
LIMITED OPERATING HISTORY
We have only a limited operating history upon which an evaluation of
our Company and our prospects can be based. Our prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development,
particularly companies in new and rapidly evolving markets. To address
these risks, we must, among other things, respond to competitive
developments. There can be no assurance that our Company will be
successful in addressing such risks.
FUTURE CAPITAL REQUIREMENTS
We presently have extremely limited operating capital. We will
require substantial additional funding in order to realize our goals of
commencing nationwide marketing of our products and services. Depending
upon the growth of our business operations, and the acceptance of our
products and services, we will need to raise substantial additional funds
through equity or debt financing, which may be very difficult for such
a speculative enterprise. There can be no assurance that such additional
funding will be made available to us, or if made available, that the terms
thereof will be satisfactory to our Company. Furthermore, any equity
funding will cause a substantial decrease in the proportional ownership
interests of existing stockholders.
LIMITED MARKET FOR COMMON STOCK
Limited Market for Shares. Any market price that may develop for shares
of common stock of the Company is likely to be very volatile, and
factors such as success or lack thereof in developing and marketing
the Company's products and services, competition, governmental
regulation and fluctuations in operating results may all have a
significant effect. In addition, the stock markets generally have
experienced, and continue to experience, extreme price and volume
fluctuations which have affected the market price of many small
capital companies and which have often been unrelated to the operating
performance of these companies. These broad market fluctuations, as well
as general economic and political conditions, may adversely affect
the market price of the Company's common stock in any market that
may develop.
FUTURE SALES OF COMMON STOCK
There is presently no market for the shares of our common stock. See the
Risk Factor "Limited Market for Common Stock; Limited Market for Shares,"
above. Future sales of securities pursuant to Rule 144 of the Securities
and Exchange Commission may have an adverse impact on any market which may
develop in our securities. Presently, Rule 144 requires a one year
holding period prior to public sale of "restricted securities" in
accordance with this Rule; the Directors could each sell (i) an amount
equal to 1% of the total outstanding securities of the Issuer in any
three month period or (ii) the average weekly reported volume of trading
in such securities on all national securities and exchanges or reported
through the automated quotation system of a registered securities
association during the four calendar weeks preceding the filing of notice
under Rule 144 (this computation is not available to OTC Bulletin Board
companies).
DEPENDENCE ON KEY PERSONEL
Our performance is substantially dependent on the performance of our
executive officers and key employees. Given our early stage of
development, we are dependent on our ability to retain and motivate
high quality personnel, especially its current management. We do not
have a "key person" life insurance policy on any of our employees. The
loss of the services of any of our executive officers or other key
employees could have a material adverse effect on the business,
operating results or financial condition of our Company.
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
The Bylaws of our Company provide for indemnification to the fullest
extent allowed under the Texas Business Corporations Act. Generally,
under this Act, a corporation has the power to indemnify any person
who is made a party to any civil, criminal, administrative or
investigative proceeding, other than action by or any right of the
corporation, by reason of the fact that such person was a director,
officer, employee or agent of the corporation, against expenses,
including reasonable attorney's fees, judgements, fines and amounts
paid in settlement of any such actions; provided, however, in any
criminal proceeding, the indemnified person shall have had no reason
to believe the conduct committed was unlawful. It is the position
of the Securities and Exchange Commission that indemnification
against liabilities for violations of the federal securities laws,
rules and regulations is against public policy.
FORWARD LOOKING STATEMENTS
In connection with, and because we desire to take advantage of, the
"safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, we caution readers regarding certain
forward looking statements in the previous discussion and elsewhere
in this report and in any other statement made by, or on behalf of
our Company, whether or not in future filings with the Securities and
Exchange Commission. Forward looking statements are statements
not based on historical information and which relate to future
operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and
assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many
of which are beyond our Company's control and many of which, with
respect to future business decisions, are subject to change. These
uncertainties and contingencies can affect actual results and could
cause actual results to differ materially from those expressed in
any forward looking statements made by, or on behalf of, our Company.
We disclaim any obligation to update forward looking statements.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company and the
Company is unaware of such proceedings contemplated against it.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
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.
UNITED FILM PARTNERS, INC.
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(Registrant)
By: /S/ KEVIN REEM
President
Dated: May 15, 2002