SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2001
Commission File Number: 0-26277
PHOENIX STAR VENTURES, INC.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 98-0204758
- ------------------------------------ ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2438 Marine Drive, Suite 215
West Vancouver, British Columbia, Canada V7V 1L2 (address
of principal executive offices) (Zip Code)
(425) 586-6704 x 6852
---------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) or the Securities Exchange Act of 1934
during the preceding 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____
As of December 12, 2001 the Company had 1,025,632 shares of Common Stock issued
and outstanding.
PART I
- --------------------------------------------------------------------------------
FINANCIAL INFORMATION
To simplify the language in this document, Phoenix Star Ventures, Inc. is
referred to as "we" or the "Company".
Except with respect to the number of shares shown on the cover page of this
report, the information in this report does not reflect a nine-for-one reverse
split of the Company's common stock which was approved by the Company's
shareholders on November 30, 2001.
Item 1. Financial Information
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders of
Phoenix Star Ventures, Inc.
(formerly wowtown.com, Inc.)
Vancouver, B.C., Canada
We have reviewed the accompanying balance sheet of Phoenix Star Ventures, Inc.
as at October 31, 2001 and the related consolidated statements of operations and
cash flows for the three-month and six-month periods then ended. These financial
statements are the responsibility of the Corporation's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such financial statements for them to be in conformity with generally
accepted accounting principles.
/s/ N.I. Cameron Inc.
Vancouver, B.C. CHARTERED ACCOUNTANTS
November 23, 2001
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Balance Sheet
(expressed in U.S. dollars)
October 31, April 30,
2001 2001
------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 29,229 $ -
========================
LIABILITIES
CURRENT LIABILITIES
Bank overdraft $ - $ 18
Accounts payable and accrued liabilities 35,501 119,032
Advances from stockholder - 27,251
------------------------
35,501 146,301
------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
CAPITAL STOCK (Note 5)
Authorized
30,000,000 common shares at par value of $0.0001
5,000,000 preferred shares at par value of $0.0001
Issued
9,231,012 common shares 923 623
250 preferred shares 1 1
OTHER CAPITAL ACCOUNTS 2,091,344 1,941,644
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (2,098,540) (2,088,569)
------------------------
(6,272) (146,301)
------------------------
$ 29,229 $ -
========================
GOING CONCERN (Note 2)
COMMITMENTS (Note 7)
CONTINGENT LIABILITIES (Note 10)
The accompanying notes are an integral part of these consolidated financial
statements.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Statement of Operations
For the Three-month and Six-month Periods Ended October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
Three-month Three-month Six-month Six-month Period from Period from
Period Ended Period Ended Period Ended Period Ended June 9,2000 June 9,1999
October 31, October 31, October 31, October 31, to October 31, to October 31,
2001 2000 2001 2000 2001 2000
--------------------------------------------------------------------------------------
OTHER EXPENSES
General and $ 11,065 $ 20,000 $ 23,094 $ 40,000 $ 222,713 $ 120,193
administrative
--------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES $ 11,065 $ 20,000 $ 23,094 $ 40,000 $ 222,713 $ 120,193
--------------------------------------------------------------------------------------
OTHER INCOME
Gain on settlement of 13,123 - 13,123 - 13,123 -
debt (Note 7)
Interest - 112 - 580 2,187 2,206
-------------------------------------------------------------------------------------
TOTAL INCOME 13,123 112 13,123 580 15,310 2,206
-------------------------------------------------------------------------------------
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS 2,058 (19,888) (9,971) (39,420) (207,403) (117,987)
LOSS FROM DISCONTINUED
OPERATIONS - (428,133) - (858,704)(1,675,688) (1,196,531)
-------------------------------------------------------------------------------------
NET INCOME (LOSS) FOR THE
PERIOD $ 2,058 $(448,021) $ (9,971) $(898,124)$(1,883,091) $ (1,314,518)
=====================================================================================
NET INCOME (LOSS) PER
SHARE
FROM CONTINUING OPERATIONS
Basic and diluted $ 0.00 $ (0.01) $ 0.00 $ (0.02)
======================================================
NET INCOME (LOSS) PER
SHARE
Basic and diluted $ 0.00 $ (0.14) $ 0.00 $ (0.36)
======================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 6,491,882 3,100,013 6,361,446 2,507,513
======================================================
The accompanying notes are an integral part of these consolidated financial
statements.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Consolidated Statement of Cash Flows
For the Three-month and Six-month Periods Ended October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
Three- Three- Six- Six- Period from Period from
month month Month Month June 9, 1999 June 9, 1999
Period Period Period Period (date of (date of
Ended Ended Ended Ended incorporation) incorporation)
October 31, October 31, October 31, October 31, to October 31, to October 31,
2001 2000 2001 2000 2001 2000
------------------------------------------------------------------------------------------
Cash Flows Provided by (Used
in) Operating Activities
Net Income (loss) for the $ 2,058 $ (448,021) $ (9,971) $(898,124) $ (1,883,091) $ (1,314,518)
period
Adjustments to reconcile
net loss to net cash
used in operating
activities
Amortization - 6,728 - 20,412 81,059 51,533
Non-cash marketing fees
in discontinued operations - 165,609 - 247,577 858,617 266,256
Stock option compensation - - - - 11,950 -
Loss on disposal of - - - - 1,506 -
capital assets
------------------------------------------------------------------------------------------
2,058 (275,684) $ (9,971) $(630,135) (929,959) (996,729)
Changes in Operating Assets
and Liabilities
Other receivables - (7,038) - (12,203) - (19,633)
Prepaid expenses and - 1,628 - 3,043 - (23,472)
deposits
Accounts payable and
accrued liabilities (92,505) 106,569 (83,531) 114,488 35,501 219,872
Accounts payable to - - - 10,820 - 10,820
related parties
---------------------------------------------------------------------------------------
Net cash used in operating (90,447) (174,525) (93,502) (513,987) (894,458) (809,142)
activities
-----------------------------------------------------------------------------------------
Cash Flows Provided by (Used
in) Investing Activities
Purchase of capital assets - 296 - (732) (29,925) (29,543)
Purchase and development of
intangible assets - (491) - (8,588) (44,545) (37,312)
Proceeds from sale of - - - - 7,026 -
capital assets
---------------------------------------------------------------------------------------
Net cash used in investing - (195) - (9,320) (67,444) (66,855)
activities
----------------------------------------------------------------------------------------
Cash Flows Provided by
Financing Activities
Proceeds from issuance of 150,000 - 150,000 150,000 300,000 150,000
common stock
Proceeds from demand loan - 100,000 - 200,000 200,000 200,000
Advances from (to) (30,324) - (27,251) - - -
stockholder
Proceeds from bank - 26,921 - 26,921 - 26,921
indebtedness
Proceeds from issuance of - - - - 500,000 500,000
preferred stock
--------------------------------------------------------------------------------------
Net cash provided by financing 119,676 126,921 122,749 376,921 1,000,000 876,921
activities
--------------------------------------------------------------------------------------
Effect of exchange rates on cash - (2,083) - (2,784) (8,869) (924)
--------------------------------------------------------------------------------------
Net Increase (Decrease) in cash 29,229 (49,882) 29,247 (149,170) 29,229 -
Cash at beginning of Period - 49,882 (18) 149,170 - -
--------------------------------------------------------------------------------------
Cash (Deficiency) at end of $ 29,229 $ - $ 29,229 $ - $ 29,229 $ -
Period
======================================================================================
The accompanying notes are an integral part of these consolidated financial
statements.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
1. COMPARATIVE FIGURES
The financial statements for the period ended October 31, 2000 were
reviewed 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 5) 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
October 31, 2001
(Unaudited)
(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
October 31, 2001
(Unaudited)
(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
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
television and radio advertisements, which are expensed, including related
production costs, the first time the advertising takes place.
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
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
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.
4. SUPPLEMENTAL CASH FLOW INFORMATION
Six-month Six-month
Period Ended Period Ended
October 31, 2001 October 31, 2000
Cash received for interest $ - $ 561
Cash paid for interest 1,193 3,836
Common stock issued for marketing
and consulting services - 225,000
5. 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 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.
Transactions During Six Months Ended October 31, 2000
On May 30, 2000, 250 Series A preferred shares were converted into 390,747
common shares.
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.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
5. CAPITAL STOCK (Continued)
Common stock (Continued)
On August 16, 2000, the Company entered into a Technology Licensing
Agreement for the use of certain technologies. Under the tems of the
agreement as amended, the Company issued 100,000 shares of common stock.
The market value of the Company's common stock 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 fulfill the agreement.
On October 1, 2000 the Company issued 30,000 common shares to an advisor.
The Company valued these shares at $1.25 per share. The shares cannot be
traded for a period of one year from the date of issuance.
Transactions During the Six Months Ended October 31, 2001
In April 2001, and as a result of the sale of the subsidiary as described
in Note 2, 1,900,000 (post-reverse split) shares were returned to the
Company and cancelled.
On October 24, 2001, 3,000,000 common shares were issued for $150,000.
Preferred stock
On February 7, 2000 the Company issued 500 Series A Preferred shares to
two private investors for $500,000 in cash. Each Series A preferred share
could be converted, at the option of the holder, to common shares equal in
number to the amount determined by dividing $1,000 by 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.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
6. FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
The Company's financial instruments consist of 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.
7. RELATED PARTY TRANSACTIONS
a) During the current period, the Company incurred interest expense of
$1,193 to a stockholder. As well, interest of $13,123 due to a
stockholder was forgiven.
b) During the current period, the Company incurred consulting fees in
the amount $7,470 to a director.
c) The Company has a consulting agreement with a director which calls
for monthly payments of $1,347 until December 31, 2001 commencing
October 1, 2001.
d) The Company has a consulting agreement with a stockholder which
calls for monthly payments of $5,350 until April 30, 2002 commencing
November 1, 2001.
8. 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 to that point are eliminated. Hence, there are no
deferred tax assets.
9. 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:
Six-month Six-month
Period Ended Period Ended
October 31, 2001 October 31, 2000
Statement of Operations information
Operating expenses $ - $ (858,704)
=============================
Balance Sheet information -
as of April 12, 2001
Other receivables $ 5,021
Prepaid expenses 160
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
October 31, 2001
(Unaudited)
(expressed in U.S. dollars)
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
===============
10. 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
$95,000. 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. Subsequent to
October 31, 2001, the Company has extinguished approximately $65,000 of
this amount by the creditors agreeing to accept $11,380 in full
settlement.
Item 2. Management's Discussion and Analysis or Plan of Operations
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.
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.
We expect our expenses over the next twelve months will decrease as
on-going operations will be focused on searching out new business ventures for
the Company.
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 the 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.
Costs and Expenses
During the six months ended October 31, 2001, the Company has incurred
costs of $7,470 for management fees, approximately $7,925 for professional fees,
and approximately $7,700 for office and other miscellaneous expenses.
Liquidity and Capital Resources
At present, we do not have any material business operations. The Company
is presently reorganizing its affairs and is seeking candidates to merge with or
to 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.
Offices and Employees
Our administration office is located at 2438 Marine Drive, Suite 215, West
Vancouver, British Columbia, Canada V7V 1L2 where we share office space at no
monthly charge.
As of October 31, 2001 we did not have any full time employees.
PART II
OTHER INFORMATION
Item 2. Changes in Securities
During the six months ended October 31, 2001, the Company sold 3,000,000
common shares to a private investor for $150,000 cash.
The Company relied upon the exemption provided by Section 4(2) of the
Securities Act of 1933 in connection with the sale of these shares. The shares
are restricted securities as that term is defined in Rule 144 of the Securities
and Excahange Commission.
Item 4. Submission of Matters to a Vote of Security Holders
On November 30, 2001 the Company's shareholders approved a resolution to
reverse split our outstanding common stock such that every nine shares of common
stock were automatically converted into one share of common stock. A total of
8,027,507 shares voted in favor of the resolution and 1,111 shares voted against
the resolution. We felt that this reverse split was necessary to better position
the Company's capital structure to attract a suitable merger or acquisition
candidate.
Item 6. Exhibits and Reports on Form 8-K:
Exhibits:
No exhibits are filed with this report
Reports on Form 8-K:
During the three months ending October 31, 2001, the Company did not file
any reports on form 8-K.
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.
Phoenix Star Ventures, Inc.
December 12, 2001 By /s/ Stephen C Jackson
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Stephen Jackson, President and Principal
Financial Officer