UNITED STATES  SECURITIES AND EXCHANGE COMMISSION





FORM 10-QSB











|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934











|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934











Commission File Number 0-13245





NEW YORK FILM WORKS INC.  (Exact name of registrant as specified in its charter)


New York
      13-3051895(State or other jurisdiction of incorporation or organization)
      (IRS Employer Identification No.)





928
         Broadway, New York, New York
      10010(Address of principal executive offices)
      (Zip Code)





(Registrant's telephone number, including area code)


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 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.     As of November 1, 2003, the Registrant had outstanding
  shares of common stock.


PART I. FINANCIAL INFORMATION


Item 1. Financial Statements.


NEW YORK
FILM WORKS, INC.CONSOLIDATED BALANCE SHEET JULY 31,
2003(UNAUDITED)
  ASSETSCurrent assetsCash
$        9,587Accounts receivable, net of allowancefor doubtful accounts of $7,668
38,237Inventory
4,111Prepaid expenses
29,397Total current assets
81,332Property and equipment, net of     accumulated depreciation of $2,451,112
251,917Other assetsDomain names
1,268,147Website development
51,399Security deposits
30,958Total other assets
1,350,504$ 1,683,753LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilitiesAccounts payable and accrued expenses
$    161,814Current portion of capital lease obligation
52,483Loans payable - stockholder
115,000Total current liabilities
329,297Long term liabilitiesDue to related party
324,407Capital lease obligation, net of current portion
47,015Total long term liabilities
371,422Total liabilities
700,719Stockholders’ equityCommon stock, $.001 par value; 120,000,000 authorized;103,500,000 shares issued and outstanding
103,500Additional paid-in capital
4,310,241Accumulated deficit
(3,430,707)Total stockholders’ equity
983,034$  1,683,753
 
 See
accompanying notes to the financial statements.
 NEW YORK
FILM WORKS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Nine
Months Ended July 31
Three
Months Ended July 31,2003
2002
2003
2002Net sales
$        44,318
$       752,147
$          176,363
$       243,807Costs of sales
372,240
559,480
121,061
181,192Gross profit
172,078
192,667
55,302
62,615Operating expensesSelling expenses
55,796
78,575
15,585
15,141General and administrative expenses
241,692
245,784
73,911
73,002Total operating expenses
297,488
324,359
89,496
88,143Net loss from operations
(125,410)
(131,692)
(34,194)
(25,528)Interest expense
7,337
7,564
2,743
2,870Net loss
$     (132,747)
$     (139,256)
$         (36,937)
$   ( 28,398)Loss per share – basic and diluted
$         (0.001)
$          (0.002)
$              (0.000)
$      (0.000)Weighted average number of shares
92,388,890
91,000,000
91,000,000
91,000,000
 
 NEW YORK
FILM WORKS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS NINE
MONTHS ENDED JULY 31, 2003 AND JULY 31, 2002(UNAUDITED)
  2003
2002Cash flows used in operating activities:Net loss
$    (132,747)
$ (139,256)Adjustments to reconcile net loss to      net cash used in operating activities:Depreciation
29,513
14,322Bad debts
668
-Increase (decrease) in cash flows from operating       activities resulting from changes in:Accounts receivable
48,864
24,377Inventory
614
(143)Prepaid expenses
1,730
1,283Security deposits
1,100
-Accounts payable and accrued expenses
(42,509)
32,392Net cash used in operating activities
(92,767)
(67,025)Cash flows used in investing activities:Purchase of fixed assets
-
(535)Cash flows provided by (used in) financing activities:Proceeds from loans payable
115,000
-Payments reducing capital lease obligations
(24,364)
(21,420)Net cash provided by (used in) financing activities:
90,636
(21,420)Net decrease in cash
(2,131)
(88,980)Cash, beginning of the period
11,718
110,948Cash, end of period
$       9,587
$   21,968
 
 
 NEW YORK FILM
WORKS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1 – NATURE OF BUSINESS AND BASIS OF
PRESENTATIONThe Company provides a variety of film processing, film
finishing and image conversion and related services to professional
photographers, corporate and institutional clients and to the amateur
photography market throughout the New York Metropolitan area.  In addition, the
Company operates a full service dark-room/laboratory facilities and retail
photography services.The accompanying condensed consolidated financial
statements have been prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. However, the
Company believes the disclosures are adequate to make the information presented
not misleading. The condensed consolidated financial statements should be read
in conjunction with the financial statements and notes thereto included in the
Company’s annual report on Form 10-KSB for the year ending October 31,
2002 filed by the Company with the Securities and Exchange Commission on October
20, 2003. The accompanying condensed consolidated financial statements
reflect, in the opinion of management, all adjustments  (consisting primarily
only of normal recurring adjustments) necessary to present fairly the results
for the interim periods. The results of operations for the three and nine months
ended July 31, 2003 are not necessarily indicative of results to be expected for
the entire year ending October 31, 2003.NOTE 2 –
ACQUISITIONIn June 2003, the Board of Directors of the Company
approved a “Share Exchange Agreement” with the shareholders of
Bladon Studios Limited (“Bladon”), a company organized under the
laws of England and Wales, engaged in providing specialty facilities for natural
history film and television makers and website design.  Pursuant to SFAS 141,
the Share Exchange Agreement was accounted for as a “reverse
acquisition,” resulting in the Company being accounted for as the
“acquired company.”  As part of this agreement the Company
issued warrants to the Bladon shareholders to purchase for $100 a total of
940,909,091 shares of the Company’s common stock, which will represent 89%
of the Company’s issued and outstanding common stock.  These warrants are
exercisable when the Company’s Certificate of Incorporation is amended to
authorize sufficient shares of its common stock to allow such exercise.
The warrants will terminate and the purchase of Bladon will be rescinded
in the event that the amendment to the Company’s Certificate of
Incorporation is not completed by June 30, 2004.  The following table
provides an analysis of the purchase price of Bladon Studios Limited.
 Total purchase price
$1,035,933Fair value of net asset
acquired
1,035,933Excess of cost over fair value
of net assets acquired allocated to goodwill
$         -
 Unaudited pro forma operating results for the nine
months ended July 31, 2003, for the Company, assuming the acquisition of Bladon
occurred on November 1, 2002, are as follows:
 Revenues
$ 552,215Net loss
(186,045)Loss per share – basic and diluted
$   (0.002)
 Pro forma information for the nine months ended July
31, 2002 is not presented since Bladon had no operations prior to November 1,
2002.NOTE 3 – RECENTLY ISSUED
ACCOUNTINGNSTANDARDSIn January 2003, the FASB issued FASB
Interpretation ("FIN") No. 46, Consolidation of Variable Interest Entities,
which requires variable interest entities (commonly referred to as SPEs) to be
consolidated by the primary beneficiary of the entity if certain criteria are
met. FIN No. 46 is effective immediately for all new variable interest entities
created or acquired after January 31, 2003. The adoption of this statement does
not impact the Company's historical or present financial statements, as the
Company has not created or acquired any variable interest entities, nor does it
expect to in the future.In December 2002, the FASB issued SFAS No. 148
Accounting for Stock-Based Compensation, Transition, and Disclosure. SFAS No.
148 provides alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee compensation.
SFAS No. 148 also required that disclosures of the pro forma effect of using the
fair value method of accounting for stock-based employee compensation be
displayed more prominently and in a tabular format. Additionally, SFAS No. 148
required disclosure of the pro forma effect in interim financial statements. The
transition and annual disclosure requirements of SFAS No. 148 are effective for
fiscal years ended after December 15, 2002. The interim disclosure requirements
of SFAS No. 148 are effective for interim periods beginning after December 15,
2002. The adoption of the provisions of SFAS No. 148 did not have an impact on
the Company's financial statements.  The Company has modified its quarterly
reporting, commencing with the quarter ended April 30, 2003 as provided for in
the new standard.In November 2002, the EITF reached a consensus on EITF
No. 00-21, Revenue Arrangements with Multiple Deliverables. EITF No. 00-21
provides guidance on how to account for arrangements that involve the delivery
or performance of multiple products, services and / or rights to use assets. The
provisions of EITF No. 00-21 will apply to revenue arrangements entered into in
fiscal periods beginning after June 15, 2003. The Company believes that its
current accounting is consistent with the provisions of EITF 00-21 and therefore
does not expect that the application of the provisions of EITF 00-21 will have a
material impact on the Company's financial statements.In November 2002,
the EITF reached a consensus on EITF No. 02-16, Accounting for Consideration
Received from a Vendor by a Customer. EITF No. 02-16 provides guidance as to how
customers should account for cash consideration received from a vendor. EITF No.
02-16 presumes that cash received from a vendor represents a reduction of the
prices of the vendor's products or services, unless the cash received represents
a payment for assets or services provided to the vendor or a reimbursement of
costs incurred by the customer to sell the vendor's products. The provisions of
EITF No. 02-16 will apply to all agreements entered into or modified after
December 31, 2002. Management does not expect the provisions of EITF No. 02-16
to have a material impact on the Company's financial statements.In
November 2002, the FASB issued FIN No. 45, Guarantor’s Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. FIN No. 45 requires that a liability be recorded in the
guarantor's balance sheet upon issuance of a guarantee. In addition, FIN No. 45
requires disclosures about the guarantees that an entity has issued, including a
reconciliation of changes in the entity's product warranty liabilities. The
initial recognition and initial measurement provisions of FIN No. 45 are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantor's fiscal year-end. The
disclosure requirements of FIN No. 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002. The Company does not
guarantee the indebtedness of others, therefore, there will not be any impact on
the Company's financial statements and there was no need for the Company to
modify its disclosures herein as required.In July 2002, the FASB issued
SFAS No. 146, Accounting for Costs Associates with Exit or Disposal Activities.
SFAS No. 146 nullifies the accounting for restructuring costs provided in EITF
Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits
and Other Costs to Exit and Activity (including Certain Costs Incurred in a
Restructuring).  SFAS No. 146 requires that a liability associated with an exit
or disposal activity be recognized and measured at fair value only when
incurred.  In addition, onetime termination benefits should be recognized over
the period employees will render service, if the service period required is
beyond a minimum retention period.  SFAS No. 146 is effective for exit or
disposal activities initiated after December 31, 2002.  Management does not
expect that the application of the provisions of SFAS No. 146 will have a
material impact on the Company’s financial statements.In January
2002, the Financial Accounting Standards Board’s (“FASB”)
Emerging Issues Task Force (“EITF”) reached a consensus on EITF No.
01-14, Income Statement Characterization of Reimbursements Received for
“Out-of-Pocket” Expense.  EITF No. 01-14 required that
reimbursements received for out-of-pocket expenses be classified as revenue on
the income statement.  This change has no material impact on the Company’s
historical and present financial statements.In November 2001, the FASB's
EITF reached a consensus on EITF Issue No. 01-09, Accounting for Consideration
Given by a Vendor to a Customer or a Reseller of the Vendor’s Products,
which is which is a codification of EITF Nos. 00-14, 00-22 and 00-25. This issue
presumes that consideration from a vendor to a customer or reseller of the
vendor's products to be a reduction in the selling prices of the vendor's
product and, therefore, should be characterized as a reduction of revenue when
recognized in the vendor's income statement and could lead to negative revenue
under certain circumstances. Revenue reduction is required unless consideration
related to a separate identifiable benefit and the benefit's fair value can be
established. This issue is to be applied retroactively in the first fiscal
quarter beginning after December 15, 2001. The Company adopted this statement on
February 1, 2002 with no material impact on its financial statements.In
October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment of
Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting and
reporting for the impairment or disposal of long-lived assets and discontinued
operations. The Company adopted this statement on May 1, 2002 with no material
impact on its financial statements.NOTE 4 – LOANS PAYABLE AND
RELATED PARTY TRANSACTIONSThe short-term loan is payable to a
stockholder of the Company. The loan is due on demand with interest at 7.5% per
annum. Subsequent to July 31, 2003 this stockholder advanced an additional
$115,000. This additional advance is due on demand with interest at 7% per
annum.Long-term debt of $324,407 is due to a former shareholder of
Bladon and is payable from future cash flow generated by the Company, is
non-interest bearing and no payment is expected to be made within the next year.
NOTE 5 – ISSUANCE OF SHARESOn June 30, 2003, Gerald
Cohen, a principal stockholder, converted  $15,000 of short-term debt into
12,500,000 shares of the Company.NOTE 6– STATEMENT OF CASH
FLOWS – SUPPLEMENTAL DISCLOSURES
 July 31,2003
2002Cash paid during year for interest
$     6,527
$ 8,926Non-cash investing and financing activities:Acquisition of subsidiaryDomain names and website development
$   1,319,546
-Plant and equipment
146,790
-Accounts receivable
9,406Accounts payable and accrued expenses
(74,596)
-Capital lease obligations
(40,806)
-Due to related party
(324,407)
-Additional paid-in capital
(1,035,933)
-Short-term debt converted into equity
(15,000)
-Issuance of capital stock
15,000
-
 NOTE 7– SUBSEQUENT EVENTSIn
September 2003, the Company entered into a lease for new space, which will
expire on September 30, 2008. The lease includes provisions requiring the
Company to pay a proportionate share of the increase in real estate taxes and
operating expenses over base period amounts.  Minimum future rents for
subsequent years are as follows:
 October 31,2003
$  12,0002004
147,0002005
153,0002006
158,0002007
163,000Thereafter
155,000$ 788,000
 Provided that the Company is not in default, the
Company has the option to extend the lease for two additional years until
September 30, 2010. The minimum rents during this two-year period will be
$175,000 and $181,000 for years ending September 30, 2009 and 2010,
respectively.


Item 2. Management's Discussion and Analysis of Financial Condition and Results
  of Operations.  Results of Operations - Three Months and Nine Months
ended July 31, 2002 and 2003 The acquisition of Bladon Studios
Limited on June 30, 2003 had no material impact on the Company’s Statement
of Operations for the periods in question.Total Sales include the
selling price of the products and services sold by us. Total Sales for the three
months ended July 31, 2003 were $176,363 as compared to sales of $243,807 for
the corresponding period ended July 31, 2002. The demand for our products and
services decreased by $67,444. Total Sales for the nine month period ended July
31, 2003 decreased by $207,829 from the corresponding period ended July 31,
2002; Total Sales for the current nine month period were $544,318 as compared to
Total Sales of $752,147 for the nine months ended July 31, 2002. Nearly all of
our sales were generated by sales to professional photographers, film dealers
and photographic editors of magazines and periodicals. No single customer
accounted for 10% or more of our sales revenues. Sales were lower due to the
general poor conditions in the photographic marketplace.The Cost of
Sales decreased to $121,061 for the three months ended July 31, 2003 as compared
to the reported Cost of Sales of $181,192 for the corresponding period ended
July 31, 2002. During the nine months ended July 31, 2003, Cost of Sales
decreased by approximately $187,240 from the corresponding period ended July 31,
2002;  Cost of Sales for the current nine month period were $372,240 as compared
to Cost of Sales of $559,480 for the nine months ending July 31, 2002. Gross
profit as a percentage of sales increased from 25.7% to 31.4% for the three
month period and from 25.6% to 31.6% for the nine month period.Our
General and Administrative Expenses consist of payroll, executive and
administrative personnel expenses and other general corporate related expenses.
Our General and Administrative Expenses remained constant for the three months
ended July 31, 2002 and the three months ended July 31, 2003. General and
Administrative Expenses for the nine months ended July 31, 2001 decreased to
$241,692 from $245,784 for the nine months ended July 31, 2000. Our Selling and
Shipping Expenses, remain constant for the three month period. Our Selling and
Shipping Expenses for the nine months ended July 31, 2003 were $55,796 as
compared to $78,575 for the corresponding period ended July 31,
2002.Liquidity and Capital ResourcesAt July 31, 2003 our
Company's Cash and Cash Equivalents were $9,587. Our Company had negative
working capital of $247,965 ended July 31, 2003. The Company has been
subsequently funded by a $115,000 loan from a stockholder and has subsequently
reduced the accounts payable by renegotiating payments on the premises we
occupy. However, any projections of future cash needs is subject to substantial
uncertainty. We finance our operations primarily with existing capital and funds
generated from operations.Controls and ProceduresThe Company is
not required to furnish the information required by item 307 of Regulation S-B
until its year ended July 31, 2005.


Item
3. Controls and Procedures

Based upon an evaluation performed within 90 days of this report, our CEO and
  CFO have concluded that our disclosure controls and procedures are effective to
  ensure that material information relating to our company is made known to management,
  including the CEO and CFO, particularly during the period when our periodic reports
  are being prepared, and that our internal controls are effective to provide reasonable
  assurance that our financial statements are fairly presented in conformity with
  generally accepted accounting principles.


In accord with SEC requirements, the CEO and CFO note that, since the date of
  their evaluations to the date of this Quarterly Report, there have been no significant
  changes in internal controls or in other factors that could significantly affect
  internal controls, including any corrective actions with regard to significant
  deficiencies and material weaknesses.


PART II - OTHER INFORMATION


Item
  6. Exhibits and Reports on Form 8-K.


(a)          Exhibits





31.1 Chief Executive Officer - Rule 13a-14(a) Certification 31.2 Chief Executive Officer - Rule 13a-14(a) Certification





32.1 Chief Executive Officer - Sarbanes-Oxley Act Section
  906 Certification 32.2 Chief Financial Officer - Sarbanes-Oxley Act Section
  906 Certification





(b)          We have not filed any
  reports on Form 8-K during the last quarter of the period covered by this report.





SIGNATURES


Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant
  has duly caused this report to be signed on its behalf by the undersigned, thereunto
  duly authorized.


NEW YORK FILM WORKS INC.





Date: November 7, 2003
      /s/ Roger BaileyRoger BaileyChief Executive Officer/s/ Barrington J. FludgateBarrington J. FludgateChief Financial Officer