SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended April 30, 2001
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-26277
Phoenix Star Ventures, Inc.
----------------------------
(Name of Small Business Issuer in its charter)
Delaware 98-0204758
------------------------ --------------------
(State of incorporation) (IRS Employer
Identification No.)
999 West Hastings St., Suite 450
Vancouver, British Columbia V6C 2W2
- ----------------------------------------- ---------------------------
(Address of Principal Executive Office) Zip Code
Registrant's telephone number, including Area Code: (604)-633-2556 Securities
registered pursuant to Section 12(b) of the Act: None Securities registered
pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Check whether the Registrant (1) has 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.
X
YES NO
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Company's revenues during the year ended April 30, 2001 were Nil.
The aggregate market value of the voting stock held by non-affiliates of the
Company, (1,187,712 shares) based upon the average bid and asked prices of the
Company's common stock on July 31, 2001 was approximately $89,078.
Documents incorporated by reference: None
As of July 31, 2001 the Company had 6,231,012 issued and outstanding shares of
common stock.
ITEM 1. DESCRIPTION OF BUSINESS
At present, we do not have any material business operations. We are in the
process of reorganizing our affairs, and, upon completion of this
reorganization, we will be seeking candidates for merger or acquisition.
We were originally incorporated in Delaware on December 18, 1997, under the
name Internet International Communications Ltd. On May 7, 1999, we changed our
name to Paramount Services Corp.
On February 7, 2000 we acquired all of the outstanding shares of
wowtown.com, Inc. a Nevada corporation in exchange for 10,000,000 pre-split
shares of our common stock. On February 25, 2000 we changed our name from
Paramount Services Corp. to wowtown.com, Inc. in order to properly reflect our
new business and on February 21, 2000 the name of wowtown.com, Inc., the Nevada
corporation which we acquired, was changed to wowtown.com (Nevada), Inc. in
order to eliminate confusion between ourselves and our newly acquired
subsidiary.
The Company's business originally involved establishing websites which
provided information regarding certain cities in the United States, Canada and
other countries. Each website had a directory of restaurants, hotels, sporting
events, entertainment, tourist attractions and similar information. Those
wanting more information regarding a particular business establishment were
linked directly to the particular establishment's website.
The Company expected to generate revenues from listing business establishments
in the Company's directory, designing and maintaining websites for particular
business establishments, and by displaying advertising on the Company's
websites. However, the Company was unsuccessful in establishing the necessary
base of business listings and very minimal revenue was earned. Marketing and
development operations were suspended and the Company currently has no business
activity.
In April 2001 we sold all of the issued and outstanding shares of wowtown.com
(Nevada), Inc. in exchange for the return to treasury of 1,900,000 shares of our
common stock, the assumption of liabilities of approximately $165,000 and
certain contractual commitments relating to wowtown.com (Nevada) Inc.'s
business; and the forgiveness by 595796 B.C. Ltd. and any officer, employee,
shareholder or affiliate of 595796 B.C. Ltd. of any loans or advances made by
such persons to the Company. On April 12, 2001 we changed our name to Phoenix
Star Ventures, Inc.
In connection with the disposition of wowtown.com (Nevada), Inc., the
Company reduced the number of the Company's outstanding shares by approving
reverse split of the shares of the Company's common stock such that each five
outstanding shares of the Company's common stock automatically converted into
one share of common stock.
Following the sale of wowtown.com (Nevada), Inc., the Company's management, with
the exception of Stephen C. Jackson, resigned.
The Company is presently reorganizing its affairs and is attempting to
merge with or acquire a new business but as yet has not identified any business
which is available for merger or acquisition. Although the Company does not have
any plans to appoint any new officers or directors at the present time, it may
be expected that new officers and directors will be appointed if a new business
is acquired.
All historical share data in this report has been adjusted to reflect a
five-for-one reverse stock split that was effective April 12, 2001.
Offices and Employees
Our executive offices are located at Suite 450, 999 West Hastings Street,
Vancouver, British Columbia V6C 2W2 where we lease approximately 1,858 square
feet of space.
As of July 31, 2001 we had no full time employees.
Forward Looking Statements
This report contains various forward-looking statements that are based on
our beliefs as well as assumptions made by and information currently available
to us. When used in this prospectus, the words "believe", "expect",
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements. Such statements may include statements regarding
seeking business opportunities, payment of operating expenses, and the like, and
are subject to certain risks, uncertainties and assumptions which could cause
actual results to differ materially from our projections or estimates. Factors
which could cause actual results to differ materially are discussed at length
under the heading "Risk Factors". Should one or more of the enumerated risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
ITEM 2. DESCRIPTION OF PROPERTY
See Item 1 of this report.
ITEM 3. LEGAL PROCEEDINGS.
- --------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- -------------------------------------------------------------
A special meeting of the shareholders of the Company was held at Suite
450, 999 West Hastings Street, Vancouver, British Columbia, Canada on April 4,
2001, at 10:00 A.M., and the following resolutions were adopted:
1. The sale of the Company's subsidiary, wowtown.com (Nevada) Inc., to 595796
B.C. Ltd., as well as certain other assets incidental to the business of
wowtown.com (Nevada), Inc. (i.e. trademarks, trade names, Internet domain
addresses, and office equipment) in consideration for:
o the return to the Company by 595796 B.C. Ltd. of 1,900,000 (post-split)
shares of the Company's common stock;
o the assumption by 595796 B.C. Ltd. of liabilities of approximately $165,000
and certain contractual commitments relating to wowtown.com (Nevada),
Inc.'s business; and
o the forgiveness by 595796 B.C. Ltd. and any officer, employee, shareholder
or affiliate of 595796 B.C. Ltd. of any loans or advances made by such
persons to the Company
2. The change of the name of the Company to Phoenix Star Ventures, Inc.
3. The reverse split the Company's common stock such that each five
outstanding shares of the Company's common stock are converted into one
share of common stock.
These resolutions were approved by the following votes:
Resolution 1: Votes in favor: 10,595,503
Votes against: 19,950
Votes abstaining: 12,550
Resolution 2: Votes in favor: 13,170,264
Votes against: 9,550
Votes abstaining: 14,290
Resolution 3: Votes in favor: 13,093,303
Votes against: 85,728
Votes abstaining: 15,073
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
As of July 31, 2001, we had 6,231,012 outstanding shares of common stock
and approximately forty-three stockholders of record. We believe the number of
beneficial owners may be greater due to shares held by brokers, banks, and
others for the benefit of their customers. Our common stock began trading on the
National Association of Securities Dealers OTC Bulletin Board on March 9, 2000.
Set forth below are the range of high and low closing prices for the periods
indicated as reported by the NASD. The market quotations reflect interdealer
prices, without retail mark-up, mark-down or commissions and may not represent
actual transactions. The market quotations have been adjusted to reflect the 5:1
reverse split of the Company's stock which was effective April 12, 2001.
Closing Prices
Quarter Ended High Low
April 30, 2000 $7.50 $3.13
July 31, 2000 7.34 4.38
October 31, 2000 4.22 1.88
January 31, 2001 0.75 0.33
April 30, 2001 0.18 0.05
July 31, 2001 0.15 0.05
The provisions in our Articles of Incorporation relating to our preferred
stock would allow our directors to issue preferred stock with rights to multiple
votes per share and dividends rights which would have priority over any
dividends paid with respect to our common stock. The issuance of preferred stock
with such rights may make the removal of management difficult even if such
removal would be considered beneficial to stockholders generally, and will have
the effect of limiting stockholder participation in certain
transactions such as mergers or tender offers if such transactions are not
favored by incumbent management.
Holders of our common stock are entitled to receive such dividends as may
be declared by our board of directors out of funds legally available and, in the
event of liquidation, to share pro rata in any distribution of our assets after
payment of liabilities. Our board of directors is not obligated to declare a
dividend. We have not paid any dividends on our common stock and we do not have
any current plans to pay any common stock dividends.
Recent Sales of Unregistered Securities
During the past three years the Company has issued the following
unregistered securities:
On February 7, 2000 10,000,000 pre-split common shares were issued to a
company controlled by present and former directors and officers of the Company
in exchange for wowtown.com (Nevada), Inc. This transaction was exempted from
registration pursuant to section 4(2) of the Securities Act of 1933.
On February 7, 2000 200,000 pre-split common shares were issued to a
company controlled by a former director of the Company for consulting services
rendered in connection with the acquisition of wowtown.com (Nevada), Inc. and
valued at $6,250. This transaction was exempted from registration pursuant to
section 4(2) of the Securities Act of 1933.
On February 7, 2000 500 Series A preferred shares were issued to two
purchasers for $500,000 cash. The sales of the Series A preferred shares were
exempt from registration pursuant to Rule 506 of the Securities and Exchange
Commission. Each Series A preferred share may be converted, at the option of the
holder, into shares of our common stock equal in number to the amount determined
by dividing $1,000 by the conversion price, which is 75% of the average closing
bid price of our common stock for the ten trading days preceding the conversion
date or $2.00, whichever amount is less. However, the terms of the Series A
preferred stock provide that no less than 500 shares of common stock may be
issued upon the conversion of any Series A preferred share.
On March 31, 2000 11,320 pre-split common shares were issued to a two
companies controlled by former directors and officers of the Company for
consulting services rendered and valued at $18,680. These transactions were
exempted from registration pursuant to section 4(2) of the Securities Act of
1933.
On May 9, 2000 a holder of 250 Series A preferred shares converted these
shares into 390,747 pre-split shares of our common stock. The Company did not
receive any consideration for the conversion of these issuance of these shares.
This transaction was exempted from registration pursuant to section 3a(9) of the
Securities Act of 1933.
On May 30, 2000 200,000 pre-split common shares were issued to a
shareholder of the Company for $150,000 cash. This transaction was exempted from
registration pursuant to section 4(2) of the Securities Act of 1933.
On June 12, 2000 200,000 pre-split common shares were issued to two
consultants of the Company as partial payment for marketing services valued at
$226,000. These transactions were exempted from registration pursuant to section
4(2) of the Securities Act of 1933.
On July 17, 2000 30,000 pre-split common shares were issued to an advisor
to the Company as payment for consulting services valued at $37,500. This
transaction was exempted from registration pursuant to section 4(2) of the
Securities Act of 1933.
On August 16, 2000 the Company issued 100,000 pre-split common shares to a
contractor of the Company for a technology license valued at $87,500. This
transaction was exempted from registration pursuant to section 4(2) of the
Securities Act of 1933.
On November 1, 2000 the Company issued 25,000 pre-split common shares to a
consultant for marketing services valued at $10,937.50. This transaction was
exempted from registration pursuant to section 4(2) of the Securities Act of
1933.
On April 18, 2001 the Company issued 5,000,000 post-split common shares in
settlement of a debt in the amount of $200,000. This resulted in the lender
obtaining control of the Company. This transaction was exempted from
registration pursuant to section 4(2) of the Securities Act of 1933.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
On April 12, 2001 we disposed of all of the outstanding shares of
wowtown.com (Nevada), Inc. and changed our name from wowtown.com, Inc. to
Phoenix Star Ventures, Inc. in order to disassociate the Company from our
previous business involving wowtown.com (Nevada), Inc.
The Company's business originally involved establishing websites which
provided information regarding certain cities in the United States, Canada and
other countries. Each website had a directory of restaurants, hotels, sporting
events, entertainment, tourist attractions and similar information. Those
wanting more information regarding a particular business establishment were
linked directly to the particular establishment's website.
The Company expected to generate revenues from listing business
establishments in the Company's directory, designing and maintaining websites
for particular business establishments, and by displaying advertising on the
Company's websites. However, the Company was unsuccessful in establishing the
necessary base of business listings and very minimal revenue was earned.
Marketing and development operations were suspended and the Company currently
has no business activity.
Following the transaction, 595796 B.C. Ltd. returned to the Company
1,900,000 (post-split) shares of common stock. See Notes 2 and 6 to the April
30, 2001 financial statements. As such, up to April 12, 2001 wowtown.com
(Nevada), Inc.'s historical financial statements are reported as our financial
statements. The following summary financial data and related discussion is
limited to the operating results of wowtown.com (Nevada), Inc. up to April 12,
2001. Prior to the acquisition of wowtown.com (Nevada), Inc. we had not
generated any revenue and had not commenced any operations other than initial
corporate formation and capitalization.
The financial data presented below should be read in conjunction with the
more detailed financial statements and related notes which are included
elsewhere in this report.
Summary Financial Data
Discontinued Operations:
Year Ended April 30, 2001
Statement of Operations Information
Operating Expenses $ (1,555,059)
Gain on disposal of subsidiary 217,198
----------------
$ (1,337,861)
We have not declared any common stock dividends since our inception.
Liquidity and Capital Resources
- -------------------------------
Since inception (June 9, 1999) and through April 30, 2001 our sources and
use of cash were:
Cash used by operations $(826,928)
Proceeds received from sale of
Preferred Stock 500,000
Purchase of equipment (29,925)
Other (37,519)
Proceeds from sale of Common Stock 150,000
The loans from shareholders were $27,251. The loan from a third party in
the amount of $200,000 was converted into 5,000,000 post split shares of the
Company on April 18, 2001.
We expect our expenses will decrease substantially over the next twelve
months as on-going operations will be focused on searching out new business
ventures for the Company.
During the twelve months ending April 30, 2002 we anticipate that we will
need $165,000 in additional capital to pay outstanding liabilities and $125,000
in additional capital to pay operating expenses.
We anticipate obtaining the capital which we will require through a
combination of debt and equity financing. There is no assurance that we will be
able to obtain capital we will need or that our estimates of our capital
requirements will prove to be accurate. As of the date of this report we did not
have any commitments from any source to provide additional capital.
ITEM 7. FINANCIAL STATEMENTS
See the financial statements attached to this report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Effective April 10, 2001 we retained N.I. Cameron Inc. ("NIC") to act as
our independent accountant. In this regard NIC replaced PricewaterhouseCoopers
LLP ("PWC") which audited our financial statements for the fiscal years ended
April 30, 2000 and 1999. The reports of PWC for these fiscal years did not
contain an adverse opinion, or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. During our two
most recent fiscal years and subsequent interim periods, there were no
disagreements with PWC on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedures, which
disagreements, if not resolved to the satisfaction of PWC would have caused PWC
to make reference to such disagreements in its reports.
We have authorized PWC to discuss any matter relating to our operations
with NIC.
The change in our auditors was recommended and approved by our board of
directors. We do not have an audit committee.
During the two most recent fiscal years and subsequent interim period
ending April 10, 2001 we did not consult NIC regarding the application of
accounting priciples to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on our financial statements,
or any matter that was the subject of a disagreement or what is defined as a
reportable event by the Securities and Exchange Commission.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Name Age Position
Stephen C. Jackson 47 President, Secretary, Treasurer and a director
Stephen C. Jackson, has been an officer and director of our corporation
since February 7, 2000. He was editor and features articles writer for the
Vancouver Market Report and has been an officer of several other public
companies in Canada. Through his private consulting practice, which he has
operated since 1980, he has provided services to a wide variety of private
corporations. Mr. Jackson is a past director of the BC Taxi Association and
former director with a regional Chamber of Commerce.
Each director holds office until his successor is duly elected by the
stockholders. Executive officers serve at the pleasure of the board of
directors. Stephen Jackson devotes a limited amount of his time to our business.
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth in summary form the compensation received
by our Chief Executive Officer. None of our former or current executive officers
received in excess of $100,000 in compensation during the fiscal year ended
April 30, 2001 or during any other twelve month period.
Name and
Principal Fiscal Other Annual Restricted Options
Position Year Salary Bonus Compensation Stock Awards Granted
- -------- ---- ------ ----- ------------ ------------ -------
Stephen C. Jackson 2001 $15,085 -- $21,085 -- 100,000
President, Secretary
and Treasurer
In connection with the sale of its subsidiary, the Company entered into a
Consulting Agreement with Stephen Jackson under which the Company paid Mr.
Jackson $6,000 during the two month period ending April 30, 2001. The Company
also granted Mr. Jackson an option to purchase 100,000 shares of the Company's
common stock at a price of $0.30 per share at any time prior to April 30, 2002.
See Item 1 of this report. In addition, the Company agreed to include the shares
issuable upon the exercise of the option to Mr. Jackson in any amended or future
registration statement which may be filed by the Company.
Employment Agreements
- ---------------------
We do not have any consulting or employment agreements with any person.
Our board of directors may increase the compensation paid to our officers
depending upon a variety of factors, including the results of our future
operations.
We do not have any compensatory plan or arrangement that results or will
result from the resignation, retirement, or any other termination of any
executive officer's employment with us or from a change in control of or a
change in an executive officer's responsibilities following a change in control.
Options Granted During Fiscal Year Ending April 30, 2001:
The following tables set forth information concering the options granted,
during the twelve months ended April 30, 2001, to the Company's officers and
directors, and the value of all unexercised options (regardless of when granted)
held by these persons as of April 30, 2001, exclusive of options cancelled or
which expired by their terms.
% of Total Options Exercise
Date of Options Granted to Employees, Price Expiration
Name Grant Granted (#) Officers & Directors Per Share Date
- ---- ----- ----------- --------------------- --------- ----------
Stephen Jackson 02/28/01 100,000 100% $0.30 04/30/02
Option values
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
at April 30, 2001 Options at April 30, 2001
Shares Acquired Value Exercisable/ Exercisable/Unexercisable
Name on Exercise (1) Realized (2) Unexercisable (3) (4)
- ---- --------------- ------------ ----------------- -------------------------
Stephen Jackson -- -- 100,000/-- --/--
Long Term Incentive Plans - Awards in Last Fiscal Year
None.
Employee Pension, Profit Sharing or other Retirement Plans
- ----------------------------------------------------------
We do not have a defined benefit, pension plan, profit sharing or other
retirement plan, although we may adopt one or more of such plans in the future.
Directors' Compensation
- -----------------------
At present we do not pay our directors for attending meetings of the board
of directors, although we expect to adopt a director compensation policy in the
future. We have no standard arrangement pursuant to which our directors are
compensated for any services provided as a director or for committee
participation or special assignments.
Except as disclosed elsewhere in this report none of our directors
received any compensation from us during the year ended April 30, 2001.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
- -------------------------------------------------------------------------
The following table sets forth, as of July 31, 2001, information with
respect to the only persons owning beneficially 5% or more of our outstanding
common stock and the number and percentage of outstanding shares owned by each
of our directors and officers and by our officers and directors as a group.
Unless otherwise indicated, each owner has sole voting and investment powers
over his shares of common stock.
Shares of Percent of
Name and Address Common Stock (2) Class (3)
- ---------------- -------------------- ----------------
Stephen C. Jackson 43,300(1)(2) .7%(1)
999 West Hastings St., Suite 450
Vancouver, B.C. V6C 2W2
Canada
Century Capital Management Ltd. 5,000,000 80%
2438 Marine Drive, Suite 215
West Vancouver, BC V7V 1L2
Canada
All Officers and Directors 43,300(1) .7%
as a Group (1 persons)
(1) Shares are owned of record by 595796 B.C. Ltd. Mr. Jackson is a controlling
person of this corporation and is therefore considered to be the beneficial
owner of these shares.
(2) Excludes shares issuable prior to November 30, 2002 upon the exercise of
options or warrants granted to the following persons.
Name Options exercisable prior to November 30, 2002
---- ----------------------------------------------
Stephen C. Jackson 100,000
(3) Computed without giving effect to any shares issuable upon the exercise of
any warrants or options or upon the conversion of any promissory notes or
other convertible securities.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
We have issued shares of our common stock to the following persons during
the past two years, who are or were affiliated with the Company:
Date of Number
Name Issuance of Shares Consideration
---- --------- --------- ------------------------------
595796 B.C. Ltd. (1) 02/00 2,000,000 100 Shares of wowtown.com,
(Nevada) Inc. valued at $500.00
Century Capital 02/00 40,000 Consulting services valued at
Management Ltd. (2) $10.00
Century Capital 04/01 5,000,000 Loan of $200,000
Management Ltd. (2)
535735 B.C. Ltd.(3) 03/00 707 Consulting services valued at
$5,840
Pedpac Marketing Ltd.(4) 03/00 1,556 Consulting services valued at
$12,839
(1) The beneficial owners of 595796 B.C. Ltd. are David B. Jackson, David
Packman, Stephen C. Jackson, Guy Prevost, Sarah Moen and Patrick Helme. A
total of 1,900,000 shares were returned to the Company and cancelled in
connection with the sale of the Company's subsidiary. See Item 1 of this
report.
(2) The beneficial owner of Century Capital Management Ltd. is Andrew Hromyk.
(3) The beneficial owners of 535735 B.C. Ltd. are Patrick Helme, Sarah Moen and
Guy Prevost.
(4) The beneficial owner of PedPac Marketing Ltd. is David Packman.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
Number Exhibit Page Number
- ------ ------- -----------
1 Underwriting Agreement N/A
-----------
3.1 Certificate of Incorporation and
Amendments (1)
---------------
3.2 Bylaws (1)
---------------
4.1 Certificate of Designation of
Series A-1 preferred stock (1)
----------------
5. Opinion of Counsel None
-----------
10. Agreement Regarding Sale of wowtown.com
(Nevada), Inc.
-----------
(1) Incorporated by reference to the same exhibit number in the Company's
registration statement on Form SB-2 (Commission File # 333-38802).
Reports on Form 8-K
The following reports on Form 8-K were filed during the three months ended
April 30, 2001:
Report Date Subject
April 10, 2001 Change in the Company's accountants
April 12, 2001 Sale of the Company's subsidiary
FINANCIAL STATEMENTS
Table of Contents
Independent Auditors' Report
Consolidated Financial Statements
Consolidated Balance Sheet
Consolidated Statements of Operations
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
AUDITORS' REPORT
To the Stockholders of
Phoenix Star Ventures, Inc.
We have audited the consolidated balance sheet of Phoenix Star Ventures, Inc. (a
development stage enterprise) (formerly wowtown.com, Inc.) as at April 30, 2001
and the consolidated statements of operations, stockholders' equity and cash
flows for the year then ended. These financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform an audit
to obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.
In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the company as at April 30, 2001
and the results of its operations and its cash flows for the period from June 9,
1999 (date of incorporation) to April 30, 2001 in accordance with generally
accepted accounting principles in the United States.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in note 2 to the
financial statements, the company has suffered losses from operations that raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
The financial statements for the period from June 9, 1999 (date of
incorporation) to April 30, 2000 were audited by PricewaterhouseCoopers LLP,
Chartered Accountants. Their audit report for the period ended April 30, 2000
was dated July 14, 2000.
/s/ N.I. Cameron Inc.
Vancouver, B.C. CHARTERED ACCOUNTANTS
July 10, 2001
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Balance Sheet
April 30, 2001
(expressed in U.S. dollars)
2001 2000
------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ - $ 149,170
Other receivables - 7,318
Prepaid expenses and deposits - 25,959
------------------------
- 182,447
CAPITAL ASSETS - net (Notes 3 and 5) - 25,105
INTANGIBLE ASSETS - net (Notes 3 and 5) - 37,462
------------------------
$ - $ 245,014
========================
LIABILITIES
CURRENT LIABILITIES
Bank overdraft $ 18 $ -
Accounts payable and accrued liabilities 119,032 104,358
Accounts payable to related party - 26,330
Advances from stockholder (Note 8) 27,251 -
------------------------
146,301 130,688
------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
CAPITAL STOCK (Note 6)
Authorized
30,000,000 common shares at par value of $0.0001
5,000,000 preferred shares at par value of $0.0001
Issued
6,231,012 common shares 623 1,471
250 preferred shares 1 1
OTHER CAPITAL ACCOUNTS 1,941,644 744,697
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (2,088,569) (631,843)
---------------------------
(146,301) 114,326
------------------------
$ - $ 245,014
=========================
GOING CONCERN (Note 2)
COMMITMENTS (Note 12)
CONTINGENT LIABILITIES (Note 11)
APPROVED BY THE DIRECTOR
.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Statement of Operations
For the Year Ended April 30, 2001
(expressed in U.S. dollars)
Year Period from
Ended June 9, 1999
April 30, to April 30,
2001 2000
--------- --------------
OTHER EXPENSES
General and administrative $ 119,426 $ 80,193
------------------------
TOTAL OPERATING EXPENSES 119,426 80,193
------------------------
OTHER INCOME
Interest 561 1,626
------------------------
NET LOSS FROM CONTINUING OPERATIONS (118,865) (78,567)
LOSS FROM DISCONTINUED OPERATIONS (1,337,861) (337,827)
------------------------
NET LOSS FOR THE PERIOD $ (1,456,726) $ (416,394)
========================
NET LOSS PER SHARE FROM CONTINUING OPERATIONS
Basic and diluted $ (0.04) $ (0.03)
========================
NET LOSS PER SHARE - Basic and diluted $ (0.46) $ (0.15)
========================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 3,174,814 2,781,235
========================
The accompanying notes are an integral part of these financial statements.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Statement of Stockholders' Equity
For the Year Ended April 30, 2001
(expressed in U.S. dollars)
COMMON STOCK PREFERRED STOCK OTHER CAPITAL ACCOUNTS
Accumulated
Additional other com- Total
Number Number paid in prehensive Stockholders'
of shares Amount of shares Amount capital income Deficit equity
------------------------------------------------------------------------------------------------------
Common stock
issued on
recapitalization
of WOWtown.com
(Nevada) Inc. 10,000,000 $ 1,000 - $ - $ - $ - $ (999) $ 1
Common stock
issued to
Paramount
Stockholders
(Note 2) 4,498,000 450 - - - - (450) -
Issuance of
preferred stock - - 500 1 713,999 - (214,000) 500,000
Common stock
issued for
consulting
services 200,000 20 - - 6,230 - - 6,250
Common stock
issued for
consulting 11,320 1 - - 18,679 - - 18,680
services
Comprehensive
income Loss
for the period - - - - - - (416,394) (416,394)
Accumulated
other
comprehensive
income-foreign
Currency - - - - - 5,789 - 5,789
translation
-------------------------------------------------------------------------------------------------
Total
comprehensive
Income - - - - - 5,789 (416,394) (410,605)
-------------------------------------------------------------------------------------------------
Balance-April 14,709,320 1,471 500 1 738,908 5,789 (631,843) 114,326
30, 2000
Conversion of
Preferred Stock
to Common Stock 390,747 39 (250) - (39) - - -
(Note 6)
Shares issued for:
Private 200,000 20 - - 149,980 - - 150,000
Placement
Marketing 325,000 33 - - 323,405 - - 323,438
Services
Consulting 30,000 3 - - 37,497 - - 37,500
Services
Contribution
by principal
Stockholder - - - - 479,000 - - 479,000
(Note 6)
Common Stock (12,524,055) (1,253) - - 1,253 - - -
Rollback
Cancellation
of Stock
(Note 6) (1,900,000) (190) - - 190 - - -
Settlement of
stockholder
loan for stock 5,000,000 500 - - 199,500 - - 200,000
(Note 6)
Stock option
compensation
(Note 6) - - - - 11,950 - - 11,950
Comprehensive
income
Translation
adjustment
for the year - - - - - (5,789) - (5,789)
Net Loss for - - - - - - (1,456,726) (1,456,726)
the Year
----------------------------------------------------------------------------------------------------
Total
comprehensive
Income - - - - - (5,789)(1,456,726) (1,462,515)
----------------------------------------------------------------------------------------------------
Balance - April 6,231,012 $ 623 250 $ 1 $1,941,644 $ -$(2,088,569) $ (146,301)
30, 2001
====================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Statement of Cash Flows
For the Year Ended April 30, 2001
(expressed in U.S. dollars)
Period from
Year June 9, 1999 (date
Ended of incorporation)
April 30, 2001 to April 30, 2000
-------------- ------------------
Cash Flows Provided by (Used in)
Operating Activities
Net loss for the period $ (1,456,726) $ (416,394)
Adjustments to reconcile net loss
to net cash used in operating activities
Amortization 49,938 31,121
Non-cash marketing fees in discontinued 839,938 18,679
operations
Stock option compensation 11,950 -
Loss on disposal of capital assets 1,506 -
-------------------------------
(553,394) (366,594)
Changes in Operating Assets and Liabilities
Other receivables 7,318 (7,430)
Prepaid expenses and deposits 25,959 (26,515)
Accounts payable and accrued liabilities 14,674 105,384
Accounts payable to related parties (26,330) -
-------------------------------
Net cash used in operating activities (531,773) (295,155)
-------------------------------
Cash Flows Provided by (Used in)
Investing Activities
Purchase of capital assets (1,114) (28,811)
Purchase and development of intangible assets (15,821) (28,724)
Proceeds from sale of capital assets 7,026 -
-------------------------------
Net cash used in investing activities (9,909) (57,535)
-------------------------------
Cash Flows Provided by Financing Activities
Proceeds from issuance of common stock 150,000 -
Proceeds from demand loan 200,000 -
Advances from stockholder 27,251 -
Proceeds from issuance of preferred stock - 500,000
------------------------------
Net cash provided by financing activities 377,251 500,000
-------------------------------
Effect of exchange rates on cash 15,243 1,860
-------------------------------
Net Increase (Decrease) in cash (149,188) 149,170
Cash at beginning of Period 149,170 -
-------------------------------
Cash (Deficiency) at end of Period $ (18) $ 149,170
===============================
The accompanying notes are an integral part of these financial statements.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
1. COMPARATIVE FIGURES
The financial statements for the period ended April 30, 2000 were audited
by another firm of Chartered Accountants.
2. NATURE OF OPERATIONS AND GOING CONCERN
On February 7, 2000, Paramount Services Corp. ("Paramount") acquired all
the issued and outstanding shares of WOWtown.com (Nevada) Inc. ("WOWtown
subsidiary") in exchange for 10,000,000 common shares, following which the
name Paramount was changed to wowtown.com, Inc. ("wowtown parent"). As a
result of this transaction, the former stockholders of WOWtown subsidiary
obtained a majority interest in wowtown parent. For accounting purposes,
the acquisition has been treated as a recapitalization of WOWtown
subsidiary with WOWtown subsidiary as the acquirer (reverse acquisition) of
wowtown parent. As wowtown parent was a non-operating entity, the reverse
acquisition has been recorded as an issuance of 4,498,000 common shares for
an amount of $nil and the excess of liabilities over assets of $28,471 has
been charged to the statement of operations. The historical financial
statements prior to February 7, 2000 , are those of WOWtown subsidiary. Pro
forma information has not been presented as the recapitalization has not
been treated as a business combination. The accounts of wowtown parent have
been consolidated from February 7, 2000.
On March 5, 2001, wowtown.com, Inc. ("the Company") and its majority
stockholder entered into an agreement to sell all of the issued and
outstanding capital stock of WOWtown subsidiary to the Company's majority
stockholder in exchange for the return of 9,500,000 (1,900,000 after
reverse split - See Note 6) shares of the Company's common stock. This
agreement was ratified by stockholders on April 4, 2001 and the sale
completed on April 12, 2001.
On April 4, 2001, stockholders approved the change of name of the Company
to Phoenix Star Ventures, Inc.
Nature of operations
Until April 12, 2001, the Company's principal business activities included
the establishment of Internet web site portals for certain cities and local
communities in North America. The portals were intended to provide an
Internet user with a local resource guide for the community. The portals
would also offer services for the user and provide the user with discounts
and savings for purchases made from merchants featured on the community
portal site. All operations have now been discontinued.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
2. NATURE OF OPERATIONS AND GOING CONCERN (Continued)
Going concern
The Company has no revenues, has incurred operating losses on past
operations and has no assurance of future profitability. The Company will
require financing from outside sources to finance any of the Company's
future operating and investing activities until sufficient positive cash
flows from future operations can be generated. The Company's management
plans to raise financing through the sale of equity. There is no assurance
that financing will be available to the Company, accordingly, there is
substantial doubt about the Company's ability to continue as a going
concern. These consolidated financial statements have been prepared on the
basis that the Company will be able to continue as a going concern and
realize its assets and satisfy its liabilities in the normal course of
business, and do not reflect any adjustments which would be necessary if
the Company is unable to continue as a going concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development stage company
The Company's activities have primarily consisted of establishing
facilities, recruiting personnel, development, developing business and
financial plans and raising capital. Accordingly, the Company is considered
to be in the development stage. The accompanying consolidated financial
statements should not be regarded as typical for a normal operating period.
Basis of presentation
These consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States.
Basis of consolidation
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary up to April 12, 2001. All significant
intercompany transactions and balances have been eliminated on
consolidation.
Use of estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect 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 periods. Actual results may differ from those
estimates.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and cash equivalents
Cash and cash equivalents consist of cash on deposit and highly liquid
short-term interest bearing securities with maturities at the date of
purchase of 90 days or less. Interest earned is recognized immediately in
the consolidated statement of operations.
Capital and intangible assets
Capital and intangible assets are recorded at cost less accumulated
amortization. Amortization is provided on a declining-balance basis at the
following rates:
Furniture and fixtures 20%
Office equipment 20%
Computer software and website development costs 100%
Computer hardware 30%
Intangible assets 100%
Additions are amortized at one half of the above rates in the year of
acquisition.
Website development costs
The Company accounts for website development costs in accordance with EITF
00-01, Accounting for Website Development Costs. As such, the Company
capitalizes costs associated with website applications and infrastructure
development as well as the initial graphics development stage in accordance
with Statement of Position 98-1, Accounting for the Costs of Company
Software Developed or Obtained for Internal Use.
Impairment of long-lived assets
The Company reviews the carrying amount of long-lived assets in relation to
their fair value whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The determination
of any impairment includes a comparison of future operating cash flows
anticipated to result from the use of the asset to the net carrying value
of the asset. If an impairment exists the carrying value is written down to
the fair value of the asset.
Advertising costs
The Company accounts for advertising costs in accordance with AICPA
Statement of Position 93-7, Reporting on Advertising Costs, whereby costs
are generally expensed as incurred except for television and radio
advertisements, which are expensed, including related production costs, the
first time the advertising takes place.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Foreign currency translation and transactions
The functional currency of the Company's operations located in countries
other than the U.S. is generally the domestic currency. The consolidated
financial statements are translated to U.S. dollars using the period-end
exchange rate for assets and liabilities and average exchange rates for the
period for revenues and expenses. Translation gains and losses are deferred
and accumulated as a component of other comprehensive income in
stockholders' equity. Net gains and losses resulting from foreign exchange
transactions are included in the consolidated statement of operations.
Income taxes
Income taxes are accounted for using an asset and liability approach, which
requires the recognition of taxes payable or refundable for the current
period and deferred tax liabilities and assets for future tax consequences
of events that have been recognized in the Company's consolidated financial
statements or tax returns. The measurement of current and deferred tax
liabilities and assets is based on provisions of enacted tax laws; the
effects of future changes in tax laws or rates are not anticipated. The
measurement of deferred tax assets is reduced, if necessary, by a valuation
allowance, where, based on available evidence, the probability of
realization of the deferred tax asset does not meet a more likely than not
criterion.
Loss per share
Basic loss per share is computed by dividing loss for the period by the
weighted average number of common shares outstanding for the period. Fully
diluted loss per share reflects the potential dilution of securities by
including other potential common stock, including convertible preferred
shares, in the weighted average number of common shares outstanding for a
period, if dilutive.
Stock based compensation
The Company accounts for equity instruments issued in exchange for the
receipt of goods or services from other than employees in accordance with
SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force
in Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to
Other Than Employees for Acquiring or in Conjunction with Selling Goods or
Services" (EITF 96-18). Costs are measured at the estimated fair market
value of the consideration received or the estimated fair value of the
equity instruments issued, whichever is more reliably measurable. The value
of equity instruments issued for consideration other than employee services
is determined on the earlier of a performance commitment or completion of
performance by the provider of goods or services as defined by EITF 96-18.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
4. SUPPLEMENTAL CASH FLOW INFORMATION
Year Period from
Ended June 9, 1999 to
April 30, 2001 April 30, 2000
-------------- ---------------
Cash received for interest $ 561 $ 1,488
Cash paid for interest - 656
Common stock issued for marketing and
consulting services 360,938 24,918
5. BALANCE SHEET COMPONENTS
Capital assets
April 30, April 30,
2001 2000
-----------------------------------
Furniture and fixtures $ - $ 8,069
Office equipment - 6,148
Computer hardware - 14,482
-------------------------------------
- 28,699
Less: Accumulated amortization - 3,594
-------------------------------------
$ - $ 25,105
====================================
Intangible assets
April 30, April 30,
2001 2000
----------------------------------
Website development costs $ - $ 48,270
Domain names and trademarks - 9,935
Computer software - 6,784
------------------------------------
- 64,989
Less: Accumulated amortization - 27,527
------------------------------------
$ - $ 37,462
===================================
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
6. CAPITAL STOCK
Common stock
Holders of common shares are entitled to one vote per share and to share
equally in any dividends declared and distributions in liquidation.
On May 30, 2000, 200,000 common shares were issued for $150,000.
On June 12, 2000, 100,000 common shares were issued as payment for
marketing services. The shares cannot be traded for a period of one year
from the date of issuance.
On June 12, 2000, as payment for marketing services, the Company paid
$105,000 and issued 100,000 common shares. The shares cannot be traded for
a period of one year from the date of issuance.
Both transactions on June 12, 2000 were recorded using the fair value of
the Company's common shares as they are publicly traded. The market value
of this security was $1.13 per share on June 12, 2000.
The Company issued 30,000 common shares of the Company to a person who
became an advisor to the Company. The market value of this security was
$1.25 per share on July 17, 2000. The shares cannot be traded for a period
of one year from the date of issuance.
On August 16, 2000 the Company entered into a Technology Licensing
Agreement for the nonexclusive use of certain technologies. The agreement
was to be for an initial one year period and was to automatically renew for
successive one year periods unless otherwise terminated by either party on
60 days notice. Under the terms of the agreement as amended, the Company
issued 100,000 shares of the Company's common stock. The market value of
this security was $0.875 per share on August 16, 2000. The shares cannot be
traded for a period of one year from the date of issuance. After the shares
were transferred, the licensing company went bankrupt and was unable to
fulfil the agreement.
On September 14, 2000, the Company filed a registration statement on form
SB-2 with the Securities and Exchange Commission to qualify the sales to
the public of the following securities:
o 2,000,000 shares of the Company's common stock at a price of $1.00 per
share;
o shares of the Company's common stock that are issuable upon the conversion
of the Company's Series A preferred stock;
o 3,097,747 shares of the Company's common stock offered by certain of the
Company's stockholders; and
o 300,000 shares of the Company's common stock issuable upon the exercise of
warrants.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
6. CAPITAL STOCK (Continued)
Common stock (Continued)
The Company will not receive any funds upon the conversion of the Series A
preferred shares or from the sale of the common stock by the selling
stockholders.
The Company issued 25,000 shares of the common stock as consideration for
marketing services for a term of three months commencing November 1, 2000.
The market value of this security was $0.4375 per share on November 1,
2000. The shares cannot be traded for a period of one year from the date of
issuance.
During the period, certain of the Company's principal stockholders entered
into Agreements with third parties to provide services to the Company.
Under the terms of these Agreements, the stockholders sold shares to the
third parties at a discount to their fair market value. The stockholders
also paid the sum of $150,000 cash under the terms of these Agreements.
Accordingly, the Company has recorded $479,000 as additional paid in
capital and recorded an expense of $479,000 in respect of the consulting
services.
On April 12, 2001, there was a reverse split of the Company's stock such
that each five outstanding shares of the Company's common stock were
converted into one share of common stock.
As a result of the sale of the subsidiary as described in Note 2, 1,900,000
post-rollback shares were acquired by the Company and cancelled.
On April 18, 2001, debt in the amount of $200,000 was settled by the issue
of 5,000,000 common shares. This resulted in the lender obtaining control
of the Company.
The Company entered into a consulting agreement effective March 1, 2001
with a director of the Company. Under the terms of the agreement, the
director was paid $6,000 and issued stock options to purchase 100,000
post-rollback shares at a price of $0.30 per share; these options expire
April 30, 2002. These options were valued at $11,950 using the
Black-Scholes model with a risk-free rate of 5%, no expected dividends and
an expected volatility of 100%.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
6. CAPITAL STOCK (Continued)
Preferred stock
Each Series A preferred share may be converted, at the option of the
holder, to common shares equal in number to the amount determined by
dividing $1,000 by the conversion price, which is 75% of the average
closing bid price of the common shares for the ten trading days preceding
the conversion date or $2.00, whichever amount is less. In addition, all
Series A preferred shares were to be automatically converted into shares of
common stock on February 7, 2001 at the conversion price then in effect.
On May 30, 2000, 250 Series A preferred shares were converted into 390,747
common shares at a conversion price of $0.64 per share.
Effective February 1, 2001, the Series A preferred shares converted to
Series A-1 preferred shares. At the option of the holder, these preferred
shares may be converted into common shares equal in number to the amount
determined by dividing $1,000 by the conversion price, which is 75% of the
average closing bid price of the common shares for the ten trading days
preceding the conversion date or $2.00, whichever amount is less.
7. FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments consist of bank overdraft, accounts
payable and advances from stockholder. It is management's opinion that the
Company is not exposed to significant interest, currency or credit risks
arising from these financial instruments. The fair value of these financial
instruments approximate their carrying values.
8. RELATED PARTY TRANSACTIONS
a) Advances from stockholder include $14,000 payable on demand and bearing
interest at 10% and $13,251 of accrued interest.
b) During the period ended April 30, 2000, the Company paid (by issuance of
3,539 common shares) $5,840 in consulting fees to a company where a
former director of the Company is a stockholder.
c) During the period ended April 30, 2000, the Company paid $12,840 (by
issuance of 7,781 common shares) in consulting fees to a company where
another former director of the Company is a stockholder.
d) During the period ended April 30, 2000, the Company paid $21,940 in
development costs to a company in which one of the Company's former
directors is a director.
e) During the current year, the Company incurred salaries and consulting fees
in the amount $110,306 to directors and former directors of the Company.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
9. INCOME TAXES
The Company is subject to U.S. Federal income taxes.
As control of the Company changed on April 18, 2001, all net operating
losses carried forward are eliminated. Hence, there are no deferred tax
assets.
10. DISCONTINUED OPERATIONS
As mentioned in Note 2, the Company has disposed of its subsidiary and
hence discontinued its Internet web portal business. Financial data
concerning this discontinued business are as follows:
Year Period from
Ended June 9, 1999 to
April 30, 2001 April 30, 2000
Statement of Operations information
Operating expenses $ (1,555,059) $ (337,827)
Gain on disposal of subsidiary 217,198 -
----------------------------------
$ (1,337,861) $ (337,827)
===============================
Balance Sheet information - as of April 12, 2001
Other receivables $ 5,021
Prepaid expenses 160
Capital assets 13,037
Intangible assets 6,127
----------------
Total assets of discontinued operations $ 24,345
==============
Accounts payable and accrued liabilities $ 198,413
Advances payable 30,419
--------------
Total liabilities of discontinued
operations $ 228,832
============
11. CONTINGENT LIABILITIES
In connection with the sale of the subsidiary, the purchaser assumed
responsibility for certain liabilities and commitments of the subsidiary.
However, with many of these liabilities it is unclear as to who the
creditors had contracted with. These liabilities total approximately
$100,000. The Company may be liable for all or some portion of this amount,
depending on the purchaser's ability to discharge the liabilities and the
legal obligations of the Company to a particular creditor.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
April 30, 2001
(expressed in U.S. dollars)
12. COMMITMENTS
The Company is committed under an operating lease to monthly rental
payments of $2,610 until October 31, 2001. The Company's former subsidiary
has agreed to assume this commitment, but should the subsidiary fail to
meet these payments, the company may be liable.
SIGNATURES
In accordance with Section 13 or 15(a) of the Exchange Act, the Registrant
has caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized on the ___ day of August, 2001.
Phoenix Star Ventures, Inc.
By /s/ Stephen Jackson
------------------------------------
Stephen Jackson, President and Principal
Financial Officer
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Title Date
Stephen Jackson Director August 13, 2001