[X] QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2003
[ ] 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: ___________
UNITED NATIONAL FILM CORPORATION
(Exact name of Small Business Issuer as specified in its charter)
Colorado
84-1092589
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
6363 Christie Avenue
Emeryville, CA 94608
(Address of Principal Executive Offices)
(510) 653-7020
(Issuer's telephone number)
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 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
The number of shares outstanding of the issuer's Common Stock, $.001
par value, as of March 31, 2003 was 8,181,983 shares.
UNITED NATIONAL FILM CORPORATION
INDEX
Item 1. Financial Statements
Consolidated
Balance Sheet as of March 31, 2003
2
(unaudited)
Consolidated
Statements of Operations (unaudited) for the
period ended
March 31, 2003
3
Consolidated
Statements of Cash Flows (unaudited) for the
period ended
March 31, 2003
4
Notes to the
financial statements
5-6
Item 2. Management's discussion and analysis of financial
condition and
results of operations
6
PART II - OTHER INFORMATION
6
Item 1 Legal Proceedings
6
Item 2 Changes in Securities
6
Item 3 Defaults Upon Senior Securities
6
Item 4 Submission of Matters to a Vote of Security
Holders
7
Item 5 Other Information
7
Item 6. Exhibits and Reports on Form 8-K
7
Signature
7
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed consolidated interim financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures made are
adequate to make the information disclosed not misleading. It
is suggested that the condensed consolidated interim financial statements
be read in conjunction with the consolidated financial statement and the
notes thereto included in the Company Annual Report on Form 10-K for the
year ended June 30, 2002. The accompanying consolidated interim financial
statements have been prepared, in all material respects, in conformity
with the standards of accounting measurements set forth in Accounting Principles
Board Opinion No. 28 and reflect, in the opinion of management, all adjustments,
which are of a normal recurring nature, necessary to summarize fairly the
financial position and results of operations for such periods. The results
of operations for such interim periods are not necessarily indicative of
the results to be expected for a full year.
UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31, March 31,
2003
2002
LIABILITIES AND STOCKHOLDERS' EQUITY
LOAN FROM SHAREHOLDER
14,850 15,458
STOCKHOLDERS' EQUITY:
Preferred stock - $.01 par,
3,000,000 shares authorized, 100,000
Series A shares
issued and outstanding (in 2000
only) and 21,500 Series B issued
and outstanding
215 215
Common stock - $.001 par,
30,000,000 shares
Authorized, 8,181,983 shares
issued and outstanding
8,181 7,496
Paid in capital
482,038 469,318
Accumulated deficit
(573,675) (573,338)
TOTAL STOCKHOLDERS' EQUITY
( 83,241) (96,309)
Total
$( 5)
35
See notes to financial statements
UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months ended Three Months
ended
March 31, 2003
March 31, 2002
REVENUE
$
0
$ 0
COST OF REVENUES
0
0
GROSS PROFIT
0
0
EXPENSES:
General and Administrative
0
29
NET LOSS ( 0) ( 29)
BASIC LOSS PER SHARE
$ .00
$ .00
WEIGHTED AVERAGE SHARES OUTSTANDING
8,181,983
7,496,983
See notes to financial statements
UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENT OF CASH FLOWS
Three months ended March 31,
2003
2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)
$( 0)
( 125)
Changes in operating assets and liabilities:
Decrease (increase)
in accounts
- -
150
Total adjustments:
- -
- -
NET INCREASE
(DECREASE) IN CASH
( 0)
( 24 )
CASH AT BEGINNING OF PERIOD
( 4)
11
CASH AT END OF PERIOD
$( 4)
35
See notes to financial statements
UNITED NATIONAL FILM CORP.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND BUSINESS DESCRIPTION
United National Film Corp. (the Company) is a Colorado corporation.
The Company is engaged in the acquisition and development of properties
for, and the production of, television series, television specials, made-for-home
television motion pictures and feature length motion pictures for domestic
and international distribution.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
b. Film Costs and Program Rights:
Film costs and program rights (project cost) which include acquisition
and development costs such as story rights,scenario and scripts, direct
production costs including salaries and costs of talent, production overhead
and post-production costs are deferred and amortized by the individual-film-forecast-computation
method as required by Statement of Financial Standards No. 53.
c. Fair Value of Financial Instruments:
The carrying amounts reported in the balance sheet for cash, accounts
and notes payable and accrued expenses approximate fair value based on
the short term maturity of these instruments.
d. Principles of Consolidation:
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary. All significant intercompany balances
and transactions have been eliminated.
e. Revenue Recognition:
The business of the Company is to derive revenues primarily from providing
production services to third parties and exploiting projects originally
developed by the Company in which it retains an ownership interest. Revenues
from being a provider of contract production services are recognized using
the percentage of completion method, recognizing revenue relative to the
proportionate progress on such contracts as measured by the ratio which
project costs incurred by the Company to date bear to the total anticipated
costs of each project. Amounts advanced under such contracts are deferred
and not recognized as revenue until obligations under such contracts are
performed. Revenue from licensing company-owned projects is recognized
when the film is delivered and available for showing, costs are determinable,
the fee is known and collectibility is reasonably assured.
f. Income Taxes:
Deferred tax assets and liabilities are determined based on the difference
between the financial statement and the tax basis of assets and liabilities
using the enacted tax rates in effect for the year in which the differences
are expected to affect taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amounts expected to
be realized.
g. Net Loss Per Common Share:
Basic earnings per share is computed by dividing the net income (loss)
available to common shareholders by the weighted average number of outstanding
common shares. The calculation of diluted earnings per share is similar
to basic earning per share except the denominator includes dilutive common
stock equivalents such as stock options and convertible debentures. Common
stock options and the common shares underlying the convertible preferred
stock are not included as their effect would be anti dilutive.
3. RELATED PARTY TRANSACTIONS
None.
4. NOTES PAYABLE
Pursuant to the acquisition of the screenplay titled, Molly and Lawless
John, a note was issued for $50,000 which was due on January 15, 1999.
The payment date on this note has been indefinitely extended by the holder
of the note.
5. LOANS DUE TO SHAREHOLDER
The Chief Executve Officer has continued to make advances to the Company
to cover general overhead costs. The total net amount advance as
of the end of this reporting period is $14,850.
6. STOCK ISSUED.
On January 21, 2003, the board of directors authorized the issuance
of the following amounts of stock in return for services rendered to the
company by the recipients of the stock.
Arthur
L. Stashower
500,000 shares
Peter Finch
25,000 shares
Deno Paoli
100,000 shares
Ron Como
20,000 shares
Walter C. Nathan
10,000 shares
Bob Seidlitz
20,000 shares
7. GENERAL
Reference is made to the financial statements included in the Company's
Annual Report (Form 10-K) filed with the Securities and Exchange Commission
for the year ended June 30, 2002. The Company began its operation in February
1998. The financial statements for the period ended March 31, 2003
are unaudited but include all adjustments which, in the opinion of management,
are necessary for a fair presentation of the results of operations for
the period then ended. All such adjustments are of a normal recurring nature.
The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for a
full fiscal year.
ITEM 2: Managements Discussion and Analysis of Financial Condition and Results of Operations.
The Company is a development stage enterprise with no significant expenses incurred during the period. On September 24, 2002, the Company entered into a memorandum agreement with MeetVirtual Systems, Inc. that hasl become effective with the filing of all reports with the Securities and Exchange Commission that were required to bring the Company to a current status. As part of the transaction with MeetVirtual Systems, Inc. the Company will issue additional shares of its authorized common stock. The Company will issue approximately 25,000,000 shares of stock to MeetVirtual Systems, Inc. for payment of $25,000 in expenses and $65,000 for the issuance of shares equaling a total of $90,000 to the Company as part of the transaction. The memorandum agreement with MeetVirtual Systems, Inc. was amended as of January 13, 2003 to include an additional amount of $5,000 for a total amount equaling $95,000. The consideration received by the Company will be used to pay off Company debts and obligations and will be used to pay for the costs of completing the financial audits of the Company and bringing the Company's filings with the Securities and Exchange Commission current.
The shares that are issued will not be registered with the Securities and Exchange Commission upon issuance and will be burdened with a legend that restricts them from transfer absent registration or an exemption from registration.
Pursuant to a notice to all shareholders that was mailed on or about March 17, 2003, the board of directors called a special meeting of the shareholders to approve the transaction set forth in te memorandum agreement recited above. The special meeting is scheduled to occur on April 15, 2003 at 10:00 A. M. at 3200 Cherry Creek Drive, Suite 130, Denver, Colorado 80209.
The Company currently has no active operations or majority owned subsidiaries. Our assets consist of a small amount of cash as shown in the audited statements that comprise a portion of this 10K report for the period ending June 30, 2002
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities.
The Company issued 865,000 shares of common stock during the current
period.
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
None
(b) Reports on Form 8-K.
On March 7, 2003, the Company filed an 8-K report in which it announced
the change in the business name of the auditors of the Company. The
8-K report also announced the effectiveness of a memorandum agreement with
MeetVirtual Systems, Inc..
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
UNITED NATIONAL FILM CORP.
By: /s/ Deno Paoli
Chief Executive Officer
Date: April 9, 2003