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 January 31, 2002
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.)
200 Burrard Street, Suite 1650
Vancouver, British Columbia, Canada V6C 3L6 (address of
principal executive offices) (Zip Code)
(425) 586-6704 x 6852
---------------------
(Registrant's telephone number, including area code)
2438 Marine Drive, Suite 215
West Vancouver, British Columbia, Canada V7V 1L2 (former
address and former fiscal year, if changed since last report)
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 February 28, 2002 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".
The information in this report reflects 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 January 31, 2002 and the related consolidated statements of operations and
cash flows for the three-month and nine-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.
N.I. Cameron, Inc.
Vancouver, B.C. CHARTERED ACCOUNTANTS
March 1, 2002
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Balance Sheet
(expressed in U.S. dollars)
January 31, April 30,
2002 2001
------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,619 $ -
========================
LIABILITIES
CURRENT LIABILITIES
Bank overdraft $ - $ 18
Accounts payable and accrued liabilities (Note 7) 36,917 119,032
Advances from stockholder (Note 7) 22,000 27,251
------------------------
58,917 146,301
------------------------
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
1,025,632 common shares 103 623
250 preferred shares 1 1
OTHER CAPITAL ACCOUNTS 2,092,164 1,941,644
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (2,145,566) (2,088,569)
------------------------
(53,298) (146,301)
------------------------
$ 5,619 $ -
========================
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 Nine-month Periods Ended January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
Three-month Three-month Nine-month Nine-month Period from Period from
Period Period Period Period December December
Ended Ended Ended Ended 18, 1997 18, 1997
January January January January to January to January
31, 31, 31, 31, 31, 31,
2002 2001 2002 2001 2002 2001
--------------------------------------------------------------------------------
OPERATING EXPENSES
General and administrative $ 38,483 $ 20,000 $ 61,577 $ 60,000 $ 261,196 $ 140,193
--------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 38,483 20,000 61,577 60,000 261,196 140,193
--------------------------------------------------------------------------------
OTHER INCOME (EXPENSES)
Expenses of former (17,741) - (17,741) - (17,741) -
subsidiary (Note 10)
Gain on settlement of debt 9,198 - 22,321 - 22,321 -
Interest - - - 580 2,187 2,206
-------------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSES) (8,543) - 4,580 580 6,767 2,206
-------------------------------------------------------------------------------
NET LOSS FROM CONTINUING
OPERATIONS (47,026) (20,000) (56,997) (59,420) (254,429) (137,987)
LOSS FROM DISCONTINUED
OPERATIONS - (275,462) - (1,134,166) (1,675,688) (1,471,993)
-------------------------------------------------------------------------------
NET LOSS FOR THE PERIOD $ (47,026) $(295,462) $ (56,997) $(1,193,586)$(1,930,117) $ (1,609,980)
===============================================================================
NET LOSS PER SHARE
FROM CONTINUING OPERATIONS
Basic and diluted $ (0.05) $ (0.06) $ (0.07) $ (0.17)
====================================================
NET LOSS PER SHARE -
Basic and diluted $ (0.05) $ (0.86) $ (0.07) $ (3.48)
=====================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 1,025,632 345,014 813,068 342,692
=====================================================
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 Nine-month Periods Ended January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
Three- Three- Nine- Nine- Period from Period from
month month Month Month December December
18, 1997 18, 1997
Period Period Period Period (date of (date of
Ended Ended Ended Ended incorporation incorporation)
January January January January to January 31, to January 31,
31, 2002 31, 2001 31, 2002 31, 2001 2002 2001
-------------------------------------------------------------------------------
Cash Flows Provided by (Used
in) Operating Activities
Net loss for the period $ (47,026) $ (295,462) $ (56,997) $(1,193,586) $(1,930,117) $(1,609,980)
Adjustments to reconcile
net loss to net cash
used in operating
activities
Amortization - 10,206 - 30,618 81,059 61,739
Non-cash marketing fees
in discontinued
operations - 179,711 - 427,288 858,617 445,967
Stock option
compensation - - - - 11,950 -
Loss on disposal of
capital assets - - - - 1,506 -
------------------------------------------------------------------------------
(47,026) (105,545) $ (56,997) $(735,680) (976,985) (1,102,274)
Changes in Operating
Assets and Liabilities
Other receivables - 6,340 - (5,863) - (13,293)
Prepaid expenses and
deposits - 20,515 - 23,558 - (2,957)
Accounts payable and
accrued liabilities 1,416 53,700 (82,115) 168,188 36,917 273,572
Accounts payable to
related parties - 30,682 - 41,502 - 41,502
------------------------------------------------------------------------------
Net cash Provided by (used in)
Operating Activities (45,610) 5,692 (139,112) (508,295) (940,068) (803,450)
------------------------------------------------------------------------------
Cash Flows Provided by (Used
in)
Investing Activities
Purchase of capital assets - - - (732) (29,925) (29,543)
Purchase and development of
intangible assets - - - (8,588) (44,545) (37,312)
Proceeds from sale of
capital assets - - - - 7,026 -
------------------------------------------------------------------------------
Net cash used in investing - - - (9,320) (67,444) (66,855)
activities
------------------------------------------------------------------------------
Cash Flows Provided by
Financing Activities
Proceeds from issuance of
common stock - - 150,000 150,000 300,000 150,000
Proceeds from demand loan - - - 200,000 200,000 200,000
Advances from (to)
stockholder 22,000 - (5,251) - 22,000 -
Proceeds from issuance of
preferred stock - - - - 500,000 500,000
-------------------------------------------------------------------------------
Net cash provided by financing 22,000 - 144,749 350,000 1,022,000 850,000
activities
------------------------------------------------------------------------------
Effect of exchange rates on - 2,841 - 57 (8,869) 1,917
cash
------------------------------------------------------------------------------
Net Increase (Decrease) in cash(23,610) 8,533 5,637 (167,558) 5,619 -
Cash (Deficiency) at beginning 29,229 (26,921) (18) 149,170 - -
of Period
-------------------------------------------------------------------------------
Cash (Deficiency) at end of $ 5,619 $ (18,388) $ 5,619 $ (18,388) $ 5,619 $ (18,388)
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
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
1. COMPARATIVE FIGURES
The financial statements for the period ended January 31, 2001 were
reviewed by another firm of Chartered Accountants.
2. NATURE OF OPERATIONS AND GOING CONCERN
The Company was incorporated in Delaware on December 18, 1997.
On February 7, 2000, the Company acquired all the issued and outstanding
shares of WOWtown.com Inc. in exchange for 10,000,000 common shares, after
which the Company's name was changed to wowtown.com, Inc. As a result of
this transaction, the former stockholders of WOWtown.com owned a majority
interest in the Company. For accounting purposes, the acquisition was
treated as a recapitalization with WOWtown.com as the acquirer (reverse
acquisition) of the Company. As the Company was a non-operating entity,
the reverse acquisition was recorded as an issuance of 4,498,000 common
shares for no value 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.com. Pro forma
information has not been presented as the recapitalization has not been
treated as a business combination. The accounts of the Company have been
consolidated from February 7, 2000.
On March 5, 2001, the Company and its majority stockholder entered into an
agreement to sell all of the issued and outstanding capital stock of
WOWtown.com to the Company's majority stockholder in exchange for
9,500,000 (211,111 after both reverse splits - See Note 5) shares of the
Company's common stock. The 9,500,000 shares were returned to the Company
and cancelled. This agreement was ratified by the Company's stockholders
on April 4, 2001 and the sale completed on April 12, 2001.
On April 4, 2001, the Company's stockholders approved the change of
Company's name to Phoenix Star Ventures, Inc.
Prior to 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.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
2. NATURE OF OPERATIONS AND GOING CONCERN (Continued)
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. The Company is presently reorganizing its affairs and
is seeking to acquire a new business, but as yet has not definitively
identified any business which is available for acquistion.
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.
The accompanying unaudited interim financial statements have been prepared
in accordance with generally accepted accounting principles and Form
10-QSB requirements. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, the accompanying interim financial statements contain all the
adjustments (consisting of only normal recurring accruals) necessary to
present fairly the Company's financial position as of January 31, 2002 and
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
its results of operations for the three and nine month periods ending
January 31, 2002 and its cash flows for the three and nine month period
ending January 31, 2002. The results of operations for the interim periods
are not necessarily indicative of the results to be expected for the
fiscal year. For further information, refer to the financial statements
and related footnotes for the year ended April 30, 2001 included in the
Company's annual report on Form 10-KSB.
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.
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 costs100%
Computer hardware 30%
Intangible assets 100%
Additions are amortized at one half of the above rates in the year of
acquisition.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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.
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
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income taxes (continued)
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.
4. SUPPLEMENTAL CASH FLOW INFORMATION
Nine-month Nine-month
Period Ended Period Ended
January 31, 2002 January 31, 2001
Cash received for interest $ - $ 580
Cash paid for interest 1,193 3,836
Common stock issued for marketing and
consulting services - 355,000
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
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.
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.
Transactions During the Nine Months Ended January 31, 2002
On October 24, 2001, 3,000,000 common shares were issued for $150,000.
On November 30, 2001, there was a reverse split of the Company's stock
such that each nine outstanding shares were converted into one share of
common stock.
Transactions During Nine Months Ended January 31, 2001
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 publicly traded common shares. The market value of the
Company's common stock was $1.13 per share on June 12, 2000.
On August 16, 2000, the Company entered into a Technology Licensing
Agreement for the use of certain technologies. Under the terms 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
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
5. CAPITAL STOCK (Continued)
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.
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 could not be traded for a period of one year from date of
issuance.
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.
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.
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
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 $10,833 to a director.
c) The Company has entered a consulting agreement with a stockholder
which calls for monthly payments of $5,350 until April 30, 2002
commencing November 1, 2001.
d) The advances from stockholders totaling $22,000 are interest-free
and are repayable on demand. In addition, accounts payable include
$16,588 due to the same stockholder.
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:
Nine-month Nine-month
Period Ended Period Ended
January 31, 2002 January 31, 2001
Statement of Operations information
Operating expenses $ - $ (1,134,166)
===============================
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
===============
PHOENIX STAR VENTURES, INC.
(a development stage enterprise)
(formerly wowtown.com, Inc.)
Notes to the Consolidated Financial Statements
January 31, 2002
(Unaudited)
(expressed in U.S. dollars)
10. CONTINGENT LIABILITIES
In connection with the sale of WOWtown.com, 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. As of January 31, 2002, the Company has
entered into agreements with certain of these creditors and has paid
$17,741 to extinguish approximately $91,000 of contingent debt.
Approximately $7,000 of these liabilities remain outstanding as of January
31, 2002. The Company may be liable for all or some of this amount,
depending on the purchaser's ability to discharge the liabilities and the
legal obligations of the Company to certain creditors.
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
the Company's beliefs as well as assumptions made by and information currently
available to the Company. When used in this report, 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
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.
The Company expects its expenses over the next twelve months to decrease
as on-going operations will be focused on searching out new business ventures
for the Company.
The Company anticipates obtaining the capital which it will require
through a combination of debt and equity financing. There is no assurance that
the Company will be able to obtain the capital needed or that the Company's
estimates of its capital requirements will prove to be accurate. As of the date
of this report, the Company did not have any commitments from any source to
provide additional capital.
Costs and Expenses
During the nine months ended January 31, 2002, the Company has incurred
costs of $10,833 for management fees, approximately $21,202 for professional
fees, and approximately $29,542 for office and other miscellaneous expenses.
Liquidity and Capital Resources
At present, the Company does not have any material business operations.
The Company is presently reorganizing its affairs and is seeking to acquire a
new business, but as yet has not definitively identified any business which is
available for acquisition. Although the Company does not have 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
The Company's administration office is located at 200 Burrard Street,
Suite 1650, Vancouver, British Columbia, Canada V6C 3L6 where the Company share
office space at no monthly charge.
As of January 31, 2002 the Company did not have any full time employees.
PART II
OTHER INFORMATION
Item 2. Changes in Securities
During the nine months ended January 31, 2002, 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 the Company's 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. The Company 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 January 31, 2002 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.
March 14, 2002 By /s/ Stephen Jackson
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Stephen Jackson, President and
Principal Financial Officer