UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 20-F



(Mark one)


REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934


OR


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


For the fiscal year ended June 30, 2005


OR


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

For the transition period from ______________ to __________________


Commission file number: 000-50492


Noble House Entertainment Inc.

(Exact name of Registrant as specified in its charter)


Inapplicable

(Translation of Registrant’s name into English)


Province of Ontario, Canada

(Jurisdiction of incorporation or organization)


47 Avenue Road, Suite 200, Toronto, Ontario, Canada, M5R 2G3

(Address of principal executive offices)


Securities to be registered pursuant to Section 12(b) of the Act.:   None


Securities registered or to be registered pursuant to Section 12(g) of the Act.


Common shares without par value

(Title of Class)


Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act :   None


Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of the close of the period covered by the annual report


Common shares without par value – 8,133,877  as at June 30, 2005


Indicate by check mark 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 report) and (2) has been subject to such filing requirements for the past 90 days.

        Yes   X     No   


Indicate by check mark which financial statement item the registrant has elected to follow


Item 17 :  X  Item 18




i




TABLE OF CONTENTS



   

Page No.


Forward Looking Statements

1


Foreign Private Issuer Status and Currencies and Exchange Rates

2

Part I

   

Item 1

Identity of Directors, Senior Management and Advisors

2

Item 2

Offer Statistics and Expected Timetable

2

Item 3

Key Information

2

Item 4

Information on the Company

9

Item 5

Operating and Financial Review and Prospects

13

Item 6

Directors, Senior Management and Employees

20

Item 7

Major Shareholders and Related Party Transactions

28

Item 8

Financial Information

30

Item 9

The Offer and Listing

31

Item 10

Additional Information

33

Item 11

Quantitative and Qualitative Disclosures About Market Risk

48

Item 12

Description of Securities Other Than Equity Securities

48

Part II

   

Item 13

Defaults, Dividend Arrearages and Delinquencies

49

Item 14

Material Modifications to the Rights of Security Holders and Use of Proceeds

49

Item 15

Controls and Procedures

49

Item 16

Audit Committee, Code of Ethics, and Principal Accountant’s Fees and Services

49

Part III

   

Item 17

Financial Statements

51

Item 18

Financial Statements

51

Item 19

Exhibits

51

 

Signature

53


   




1



FORWARD LOOKING STATEMENTS



This annual report includes "forward-looking statements." All statements, other than statements of historical facts, included in this annual report that address activities, events or developments, which we expect or anticipate, will or may occur in the future are forward-looking statements.


 The words "believe", "intend", "expect", "anticipate", "project", "estimate", "predict" and similar expressions are also intended to identify forward-looking statements.


These forward-looking statements address, among others, such issues as:


- Future earnings and cash flow, - future plans and capital expenditures, - expansion and other development trends of the resource sector.


- Expansion and growth of our business and operations, and


- Our prospective operational and financial information.


These statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in particular circumstances. However, whether actual results and developments will meet our expectations and predictions depends on a number of risks and uncertainties, which could cause actual results to differ materially from our expectations, including the risks set forth in "Item 3-Key Information-Risk Factors" and the following:


-

Fluctuations in prices of our products and services,

-

Potential acquisitions and other business opportunities,

-

General economic, market and business conditions, and

-

Other risks and factors beyond our control.


Consequently, all of the forward-looking statements made in this annual report are qualified by these cautionary statements. We cannot assure you that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected effect on us or our business or operations.

Unless the context indicates otherwise, the terms "Noble House Entertainment Inc." the "Company”, "Noble House", “we”, “us”, “our” and “registrant” are used interchangeably in this Annual Report and mean Noble House Entertainment Inc. and its subsidiary.



2



FOREIGN PRIVATE ISSUER STATUS AND CURRENCIES AND EXCHANGE RATES



Foreign Private Issuer Status:


Noble House Entertainment Inc., is a Canadian corporation incorporated under the laws of the Province of Ontario.  Approx. 97% of its common stock is held by non-United States citizens and residents and our business is administered principally outside the United States; As a result, we believe that we qualify as a "foreign private issuer" for continuing to report regarding the registration of our common stock using this Form 20-F annual report format.


Currency


The financial information presented in this Annual Report is expressed in Canadian dollars ("CDN $") and the financial data in this Annual Report is presented in accordance with accounting principles generally accepted in Canada ("Can. GAAP"). Such financial data conforms in all material respects with accounting principles generally accepted in the United States ("U.S. GAAP") except as disclosed in Note 13 of the Notes to Consolidated Financial Statements contained herein.


All dollar amounts set forth in this report are in Canadian dollars, except where otherwise indicated.


PART I



ITEM 1 – IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS


Not applicable.


ITEM 2 – OFFER STATISTICS AND EXPECTED TIMETABLE


Not applicable.


ITEM 3 – KEY INFORMATION


(A) SELECTED FINANCIAL DATA


This Report includes consolidated financial statements of the Company for the years ended June 30, 2005, 2004 and 2003.These financial statements were prepared in accordance with accounting principles generally accepted in Canada. Reference is made to Financial Statement Notes for a discussion of the material differences between Canadian GAAP and U.S. GAAP, and their effect on the Company's financial statements.


The following is a selected financial data for the Company for each of the last five fiscal years 2001 through 2005 on a consolidated basis. The data is extracted from the audited financial statements of the Company for each of the said years.


SUMMARY OF FINANCIAL INFORMATION IN THE COMPANY FINANCIAL STATEMENTS (Canadian $)



Operating data – Fiscal year ended June 30


 

2005

2004

2003

2002

2001

           

Revenue

$5,031 

$0 

$0 

$3,420 

$0 

Net Loss

($259,333)

($214,601)

($108,514)

($272,851)

($30,801)

Net loss per share  (1)

($0.04)

($0.06)

($0.06)

($0.18)

($0.06)

Working capital (Deficit)

($194,696)

($57,478)

($106,350)

($49,271)

($143,851)

Total assets

$240,112 

$2,867 

$111,612 

$76,385 

$126,104 

Capital stock

$4,815,672 

$4,460,857 

$4,307,384 

$4,145,949 

$3,778,518 

Shareholders' equity(Deficit)

$37,804 

($57,478)

$3,650 

($49,271)

($143,851)

Weighted average number of shares outstanding ( 2  )

6,629,968 

3,680,536 

1,906,654 

1,543,456 

475,689 

1.  The effect of potential share issuances pursuant to the exercise of warrants would be anti-dilutive and, therefore, basic and diluted losses per share are the same.

2.  Weighted average number of shares for a year was calculated by dividing the total of the number of shares outstanding at the end of each of the months by twelve.  Weighted average number for the fiscal years 2003, 2002 and 2001 were adjusted to reflect stock consolidations in fiscal 2004 and 2005.


Selected Financial Data (U.S. GAAP) – Fiscal year ended June 30


 

2005

2004

2003

2002

2001

           

Comprehensive Loss

($259,533)

($104,601)

($143,514)

($347,851)

($30,801)

Loss per share

($0.04)

($0.03)

($0.08)

($0.23)

($0.06)

Total assets

$240,112 

$2,876 

$1,612 

$1,385 

$126,104 

Shareholders' equity(Deficit)

$37,804 

($57,478)

($106,350)

($124,271)

($143,851)


The Company has not declared or paid any dividends in any of its last five financial years.




Exchange Rates


In this Annual Report on Form 20-F, unless otherwise specified, all monetary amounts are expressed in Canadian dollars.  The exchange rates used herein were obtained from Bank of Canada; however, they cannot be guaranteed.


On November 15, 2005, the exchange rate, based on the noon buying rates, for the conversion of Canadian dollars into United States dollars (the “Noon Rate of Exchange”) was $1.19


The following table sets out the high and low exchange rates for each of the last six months.


2005

October

September

August

July

June

May

             

High for period

$1.18

$1.18

$1.22

$1.24

$1.26

$1.27

Low for period

$1.17

$1.17

$1.19

$1.21

$1.23

$1.24




The following table sets out the average exchange rates for the five most recent financial years calculated by using the average of the Noon Rate of Exchange on the last day of each month during the period.


Year Ended June 30, 2005

 

2005

2004

2003

2002

2001

Average for the year

1.25

1.34

1.51

1.57

1.52



(B)  CAPITALIZATION AND INDEBTEDNESS


Not applicable


(C)  REASONS FOR THE OFFER AND USE OF PROCEEDS


Not applicable


(D)  RISK FACTORS


The following is a brief discussion of those distinctive or special characteristics of the Company’s operations and industry that may have a material impact on, or constitute risk factors in respect of, the Company’s future financial performance.





THE COMPANY HAS AN UNSUCCESSFUL OPERATING HISTORY


Since March 1997, when it was incorporated in Ontario, Canada by amalgamating with two other Ontario entities. The Company has no significant revenues or earnings from operations since its incorporation. The last business operations were in 2003 when the Company acquired rights to represent a recording artist and to secure a recording contract for the artist. However, the project was abandoned due to the inability to secure any recording contract.  The Company has operated at a loss to date and in all likelihood will continue to sustain operating expenses in the foreseeable future. There is no assurance that the Company will ever be profitable.


THE COMPANY'S INDEPENDENT ACCOUNTANTS HAVE EXPRESSED GOING CONCERN


Going concern comments are made in the note # 2 to the fiscal 2005 audited financial statements. The Company recorded losses of $259,533 for the year ended June 30, 2005, $214,601 for the year ended June 30, 2004, and $108,514 for the year ended June 30, 2003. At June 30, 2005, the Company had a net deficit of approximately $4.8 million. The Company's continuance as a going concern is dependent upon its ability to obtain adequate financing or to reach profitable levels of operation. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operations in the near future. It may never become profitable.


UNCERTAINTY REGARDING AUDIENCE ACCEPTANCES OF PROGRAMS


The television and motion picture industries have always involved a substantial degree of risk. There can be no assurance of the economic success of any motion picture or television program as revenue derived depends on audience acceptance, which cannot be accurately predicted. Audience acceptance is a factor not only of the response to the television program's or motion picture's artistic components but also to the reviews of critics, promotions, the quality and acceptance of other competing programs released into, or channels existing in, the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions, public tastes generally and other intangible factors, all of which could change rapidly and many of which are beyond the Company’s control. A lack of audience acceptance for any of the films licensed, co-produced or distributed by the Company could have an adverse effect on its businesses, results of operations, prospects and financial condition


UNAUTHORIZED OR PIRATED USE MAY ADVERSELY AFFECT REVENUE


Technological advances and the conversion of motion pictures into digital formats have made it easier to create, transmit and "share" high quality unauthorized copies of motion pictures in theatrical release, on videotapes and DVDs, from pay-per-view through unauthorized set-top boxes and other devices and through unlicensed broadcasts on free TV. As a result, users may be able to download and distribute unauthorized or "pirated" copies of copyrighted motion pictures over the Internet. As long as pirated content is available to download digitally, some consumers may choose to digitally download pirated motion pictures rather than pay for legitimate motion pictures or to purchase pirated DVD’s of motion pictures or of boxed sets of television series from unauthorized vendors.


CHANGES IN REGULATIONS AND INCENTIVES MAY ADVERSELY AFFECT THE BUSINESS OF THE COMPANY


The Company plans to co-produce with or license its scripts and other intellectual properties to other entities which are expected to rely heavily on grants and labor rebate available for Canadian contents under the current regulations of Federal and Provincial governments of Canada.


Any significant changes in these regulations that result in reduced grants and rebates or elimination thereof may significantly affect the Company’s ability to produce and or license its scripts and in turn its ability to generate revenue.


THE COMPANY MAY NOT BE ABLE TO ACHIEVE AND MAINTAIN ITS COMPETITIVE POSITION


The entertainment industry is a highly capital intensive and is characterized by intense and substantial competition. A number of the Company's competitors are well established, substantially larger and have substantially greater market recognition, greater resources and broader distribution capabilities than the Company. New competitors are continually emerging. Increased competition by existing and future competitors could materially and adversely affect the Company's ability to implement its business plan profitably. The lack of availability of unique quality content could adversely affect its business.


FOREIGN EXCHANGE RISK


The Company has foreign exchange risk because its functional currency is the Canadian dollar and a significant part of its revenue may be generated from overseas countries. An adverse move in foreign exchange rates between the Canadian dollar and the currencies of these countries could have an adverse effect on its operating results. The Company does not hedge against this risk.


THE COMPANY’S COMMON SHARES ARE CONSIDERED TO BE PENNY STOCK, WHICH MAY ADVERSELY

AFFECT THE LIQUIDITY OF ITS COMMON SHARES

                                              

The Company's securities may be classified as a penny stock as defined in Rule 3a51-1 of the Exchange Act. The United States Securities and Exchange Commission has adopted Rule 15g-9 which established sales practice requirements for certain low price securities relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share whose securities are admitted to quotation but do not trade on the NASDAQ SmallCap Market or on a national securities exchange. For any transaction involving a penny stock, unless exempt, the rules require delivery of a document to investors stating the risks, special suitability inquiry, regular reporting and other requirements. Prices for penny stocks are often not available and investors are often unable to sell such stock. Thus an investor may lose his or her investment in a penny stock and consequently should be cautious of any purchase of penny stocks. Currently, the Company’s shares trade on over the counter bulletin board of NASDAQ.


THERE IS NO ACTIVE TRADING MARKET FOR THE COMPANY'S COMMON SHARES.


There can be no assurance that an active trading market for the Company's common shares will develop or be sustained. The trading price of its common shares may be significantly affected by factors such as actual or anticipated fluctuations in the Company's operating results, conditions and trends in the theatrical entertainment and Internet industries, general market conditions and other factors.


   THE COMPANY MAY NOT BE ABLE TO RAISE ADDITIONAL FINANCING TO MEET CURRENT OPERATING NEEDS AND IMPLEMENT ITS NEW BUSINESS STRATEGY

Based on current projections, the Company will require minimum financing in the amount of $27,000 per month or approximately 320,000 annually to meet the annual operating needs of the Company and its subsidiary for the year ending June 30, 2006, and additional funds to pursue other business opportunities.

The Company hopes to earn sufficient revenue from distribution and scripts licensing to meet its operating needs and to raise additional equity funds through private placements of its securities with sophisticated investors.

The Company has avoided obtaining debt financing but may have to pursue this option if it is unable to obtain equity financing on acceptable terms.

 If the Company is unable to achieve the expected revenue and or to obtain financing and cannot pay its debts as they become due, it may be forced to solicit a buyer or be forced into bankruptcy by its creditors.

DIVIDENDS


All of the Company's available funds will be invested to finance the growth of the Company's business and therefore investors cannot expect and should not anticipate receiving a dividend on the Company's common shares in the foreseeable future.

DILUTION

The Company may in the future grant to some or all of its own and its subsidiaries' directors, officers, insiders and key consultants options to purchase the Company's Common Shares as non-cash incentives to those people. Such options may be granted at exercise prices equal to market prices at time when the public market is depressed or at exercise prices which may be substantially lower than the market prices. To the extent that significant numbers of such options may be granted and exercised, the interests of the then existing shareholders of the Company may be subject to additional dilution.

The Company is currently without a source of revenue and will most likely be required to issue additional securities to finance its operation and may also issue substantial additional securities to finance the development of any or all of its projects. These actions will cause further dilution of the interests of the existing shareholders.

  

DEPENDENCY ON KEY CONSULTANTS


Our performance depends on a small number of key managerial consultants. In particular, we believe our success is highly dependent upon the services of our Chief Executive Officer Mr. Damian Lee and Vice President, Business Affairs Mr. Lowell Conn, who have extensive knowledge and contacts in the film industry. Loss of either of their services could negatively affect our business.


COSTLY CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE REGULATIONS


Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and new and changing provisions of Canadian securities laws, are creating uncertainty because of the lack of specificity and varying interpretations of the rules. As a result, the application of the rules may evolve over time as new guidance is provided by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, our efforts to comply with evolving laws, regulations and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Any failure to comply with applicable laws may materially adversely affect our reputation and the value of our securities.


OUR OFFICERS AND DIRECTORS RESIDE OUTSIDE OF UNITED STATES AND THERE IS A RISK THAT CIVIL LIABILITIES AND JUDGEMENTS MAY BE UNENFORCEABLE


The Company and its officers and all of its directors are residents of countries other than the United States, and all of the Company's assets are located outside the United States.  As a result, it may not be possible for investors to effect service of process within the United States upon such persons or enforce in the United States against such persons judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of United States federal securities laws or state securities laws.







YOUR RIGHTS AND RESPONSIBILITIES AS A SHAREHOLDER WILL BE GOVENRNED BY   CANADIAN LAW AND MAY DIFFER IN SOME  RESPECTS FROM THE RIGHTS AND RESPONSIBILITIES OF SHAREHOLDERS UNDER U.S. LAW


 We are incorporated under Ontario, Canada law. The rights and responsibilities of holders of our shares are governed by our memorandum of association, our articles of association and by Canadian law. These rights and responsibilities may differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.


IF WE FAIL TO COMPLY WITH SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002, OUR REPUTATION AND THE VALUE OF OUR SECURITIES MAY BE ADVERSELY AFFECTED


Beginning with our annual report for the year ending June 30, 2007, Section 404 of the Sarbanes-Oxley Act of 2002 will require us to include an internal control report of management with our annual report on Form 20-F, which is to include management’s assessment of the effectiveness of our internal control over financial reporting as of the end of the fiscal year. That report will also be required to include a statement that our independent auditors have issued an attestation report on management’s assessment of our internal control over financial reporting. In order to achieve compliance with Section 404 within the prescribed period, management is in the process of adopting a detailed project work plan to assess the adequacy of our internal control over financial reporting, validate through testing that controls are functioning as documented, remediate any control weaknesses that may be identified, and implement a continuous reporting and improvement process for internal control over financial reporting. Any failure to comply with Section 404, including issuing the required management report and obtaining the attestation report on management’s assessment from our independent auditors, may materially adversely affect our reputation and the value of our securities.


ITEM 4 – INFORMATION ON THE COMPANY


(A)  HISTORY AND DEVELOPMENT OF THE COMPANY


The Company was incorporated under the Business Corporation Act (Ontario) on March 18, 1997 as a result of an amalgamation under the name "Biolink Corp." The Company went through several name changes and changes in its business activities. Details of these changes were provided in the Registration Statement F-20 dated June 12, 2000 and the annual report F-20 dated March 12, 2004.  The last name change occurred on November 4, 2004, when the Company changed its name from First Empire Corporation Inc. to Noble House Entertainment Inc. to coincide with the acquisition of assets from a private production house by similar name as discussed later in this report.

The Company’s registered office is situated at 47 Avenue Road, Suite 200, Toronto, Ontario, Canada M5R 2G3. The Company is a reporting issuer in the provinces of Ontario. The Company is a reporting issuer with Ontario Securities Commission. Its common shares are currently listed and traded on Over The Counter Bulletin Board of NASDAQ (OTCBB)under the trading symbol “NHSEF”.


The Company had no significant revenue since its incorporation. While it tried some new business initiatives including acquisition of scripts and related intellectual properties of a musical, “The Count of Monte Cristo” in 2001 and acquisition of an artist management contract and related developed properties like demo  5-song CD. In fiscal 2003 , it was unable to raise the required funds to develop and market these projects and hence by the fiscal 2004, the Company abandon these projects and wrote off all the related costs.


The Company continued its focus on entertainment sector. However, it changed its business strategy to focus primarily on films and television programs development, licensing and distribution as a core business due to availability of various government incentives, local talents and wider commercial market compared to the one for musicals, plays and song albums


The Company relies principally on borrowings from its shareholders to meet its operating expenditures. The Company’s focus on commercial films and listing and trading of its common shares on OTCBB may enable the Company to raise equity findings through private placements



(B)  BUSINESS OVERVIEW



As explained earlier, the Company is a fully integrated entertainment Company and is engaged in the development, licensing, production and distribution of feature films, television series, television movies and mini-series and non-fiction programming through its wholly owned subsidiary, Noble House Film and Television Inc.


Three major strategies of the Company, in summary, include:


1.

Developing in-house intellectual properties.  Such development is achieved through a cost-effective approach ensuring the Company a vertical integration and considerable or complete ownership of its core creative properties.


2.

Licensing and distributing film projects that are produced from its in-house created intellectual properties while also providing such service to other producers that are looking to access the domestic and international marketplace.


3.

Seeking potential relationships with related other businesses with an eye toward acquisition, mergers and partnerships that will result in better facilitation of the above two strategies.


In – House development


Noble House management firmly believes that sole control of an intellectual property is paramount in maintaining a cost-effective and quality-ensured exploitation of the film or television project.


Many entertainment companies are burdened by a structure in which intellectual properties are not developed in-house but by individuals who bring such projects to the Company.  Often, these “outside” projects arrive with conditions and/or liens and, due to the nature to which the intellectual property evolved, full control over the project’s evolution does not necessarily reside in the hands of the entertainment Company taking a financial risk developing such.


By developing intellectual properties in-house, Noble House alone can dictate all aspects of the projects development and production as well as the parameters and circumstances behind its ultimate sale.  Consequently, while the manufacturing costs behind many entertainment properties often escalate due to partial ownership, or a gap between the development entity and the actual producers, Noble House properties are predominately created in-house and produced by its management team.


The management team of Noble House has roots in both the business and creative side of the intellectual property creation and the film and television production process.  Thus, while outside writers, commissioned by the organization, will develop a minimal amount of projects, the vast majority of intellectual properties continue to originate from the management team itself.  


Licensing and distribution


Third-party distribution companies, as well as third-party film and television sales agencies, are remunerated at a rate that can be as little as 10% and as large as 35% of a feature film or television project’s profits.  These commissions are further bolstered by costs that are taken, by the distribution or sales agency, out of the gross revenue of the film or television project.  Ultimately, a corporation that strictly creates and produces intellectual properties can see half of their revenues disappear to distribution.


As part of its corporate strategy, Noble House will handle its own distribution and, ultimately, provide such service to other producers on a project-by-project basis.


Each year, there are at least five important feature film and television sales markets at which Noble House hopes to make a representation to license and distribute its film and television projects and those of its clients. The goal is to personally facilitate sales of its intellectual properties and circumvent third-party distribution or sales costs,


This move toward direct sales has had a great impact upon the development of the intellectual property itself.  Regular communication in regard to selling completed feature film and television projects leads to greater possibility of pre-selling a future film to an individual territory.  Pre-sales are an important element of the film financing formula and can, in many cases, aid Noble House in off-setting gap or private equity financing.  By utilizing the distribution and sales relationships that it develops by selling direct, Noble House will be able to secure stronger foreign pre-sales.


       Relationship, Partnership and Acquisitions


Noble House will continually look at related (and often seemingly unrelated) businesses in order to contemplate joint ventures, partnerships, acquisitions and mergers in order to enhance growth and profitability


The Company hopes to add industry veterans to its management and advisor team in order to enhance the quality of its properties and its industry and public reputation.


While selling its own feature films and television projects in all territories of the world, the Company will also seek out other sales and distribution entities for potential acquisition or merger. Such entities include creative talent agencies, government co-production authorities, film and television buyers, private equity firms, key crewmembers and creative talent.


The entertainment industry is a dynamic field.  Noble House will continue to identify and exploit relationships that ensure the Company continues to compete in this large and extremely competitive but profitable marketplace.



(C) ORGANIZATIONAL STRUCTURE


As at March 31, 2005, the Company had only one wholly-owned subsidiary, Noble House Film and Television Inc. (NHFT).  All the film properties and distribution rights acquired by the company, as above, have been transferred to NHFT, which has become the operating company. NHFT changed its name from First Empire Music Corp. on January 21, 2005.


On July 5, 2004, the Company dissolved its wholly owned subsidiary, First Empire Entertainment Corp., which had been inactive since 2001.





(D) PROPERTY PLANTS AND EQUIPMENT


The Corporate and head office of the Company is located in subleased premises at 47 Avenue Road, Suite 200, Toronto, Ontario, Canada. There is no long-term lease commitment.


Total area of the premises is approximately 950 sq. ft., and about 10% of this premise is subleased to the Company at an approximate rent and utilities cost of $200 per month.


The Company’s subsidiary, NHFT is located in another sublease premises at 181 Queen Street East, Toronto, Ontario, Canada. The premises are owned by the Company’s CEO and a director, Mr. Damian Lee. There is no long-term lease commitment. Rent paid is $1,300 per month.


ITEM 5 – OPERATING AND FINANCIAL REVIEW AND PROSPECTS


(A)  OPERATING RESULTS


The following discussion should be read in conjunction with the Audited Financial

Statements of the Company and notes thereto contained elsewhere in this report.


Results of operations


Year ended June 30

2005

2004

2003

 

in 000' CDN $

in 000' CDN $

in 000' CDN $

Income

5

0

0

Expenses

(265)

(215)

(109)

       

Net loss for year

(260)

(215)

(109)

Deficit at end of year

(4,798)

(4,461)

(4,307)


Overview


The following were the key events in fiscal 2005 –


    1.   The Company changed its name on November 4, 2004 from First Empire Corporation Inc. to Noble House Entertainment Inc. The name change was due to acquisition of certain assets from a film production house by the similar name as explained later under Acquisition. The directors were authorized by the shareholders in their last annual and special meeting on November 25, 2004 to change the name as they thought fit and concluded that the new name would be more appropriate since it was better recognized in the industry.


    2.   On November 19, 2004, the Company carried out a reverse stock split under which one new common share of the Company was issued for every two old common shares of the Company.

    3.   Under the Company’s share buy-back plan to deal with fractional shares arising from the reverse stock split per (i) above, the Holders of less than ten old common shares were not issued any new shares of the Company. Instead, they were entitled to a payment of $0.10 per share, subject to minimum of $1. As a result, a maximum of 619 existing common shares are expected to be returned to the Company for cancellation for a total cash consideration of $185 under the buy-back plan. The plan has no expiry date.

    4.   On November 30, 2004, the Company issued 3.5 million common shares plus 3.5 million warrants to an independent Production House in settlement of the value of acquisition of certain theatrical films properties valued at $350,000 (see “Acquisition” below). These shares cannot be sold or transferred by the vendor for at least five years from the date of issuance without the approval of the Company as per the terms of the assets purchase agreement dated November 30, 2004.

The vendor was also issued 3.5 million warrants, which are convertible into equal number of common shares of the Company at a conversion price of $1 per warrant on or before November 30, 2006, As at June 30, 2005, none of the warrants was exercised.

    5.   On December 1, 2004, the Company entered into a consulting contract with Mr. Damian Lee, one of the owners of the production House from which the Company acquired certain film properties (see “Acquisition”). The Contract is effective January 15, 2005 for a five-year term up to January 15, 2010. The contract provides for a monthly fee of $6,000 plus taxes plus reimbursement of expenses. In addition, Mr. Lee will also be entitled to production fees and incentives linked to his role and responsibility on each film or television production.

    6.   On December 1, 2004, Mr. Damian Lee was appointed a director and chief executive officer of the Company.

    7.   On January 21, 2005, the Company’s wholly owned subsidiary, First Empire Music Corp changed its name to Noble House Film & Television Inc. ( NHFT)

    8.   NHFT became the operating arm of the Company. All film assets acquired in November 2004 from Noble House Production Inc. were transferred to NHFT and Mr. Damian Lee took the charge of NHFT as president and brought in his team of consultants with considerable experience and contacts in the movie industry.

    9.   NHFT began working on various projects. A summary of major initiatives that began in March 2005 is given later in this report.

    10.   NHFT developed a web site – www.nhentertainment.com  which provides details of the current projects.

    11.   On April 27, 2005, NASDAQ accepted the Company’s application for a listing and trading of its common shares on Over the Counter Bulletin Board and assigned a trading symbol of NHSEF to the Common shares of the Company.


Acquisition


One of the key events during the fiscal year 2005 was the successful conclusion of negotiations with Noble House Production, an independent private film production and distribution company in Toronto.  Under the deal, the Company acquired the following selected assets, which were free of any encumbrances or debts:


Developed scripts and synopsis of ten theatrical films. These scripts were developed internally by the owners of the Noble House Production, Mr. Damian Lee and Mr. Lowell Conn and were valued at $230,000.


Distribution contracts for seven theatrical films valued at $120,000.


The valuation of the film properties acquired as above was endorsed by an independent US distribution house.


The total acquisition price of $350,000 was settled by issuance of restricted common shares of the Company as explained in 4 above under the overview section.


The acquired properties are to be managed and commercially developed or licensed by the Company’s wholly owned subsidiary, First Empire Music Corp., which changed its name to Noble House Film & Television Inc. on January 21, 2005 to better reflect its new activities.


The owners of Noble House Production, Mr. Damian Lee and Mr. Lowell Conn together with certain members of their production team joined the Noble House Film and Television Inc. and are responsible for the day to day operations of the subsidiary including commercial production, licensing and distribution of the various film properties acquired and new properties to be developed.


Mr. Damian Lee is a twenty-year veteran of the film industry, Mr. Lee’s movie credits which comprise as producer on 34 films, as writer on 20 films, as director on 14 films, as actor on 7 films and as assistant director on 2 films.  He put Jim Carrey, Hayden Christensen and Jason Priestley, among others, in their first feature film roles.  Mr. Lee has written, directed and produced some of the most successful films in Canadian history, many of which spawned profitable and entertaining sequels.


Mr. Lee’s association with the Company and also considerable equity stake in the Company significantly improves the Company’s chances of achieving its business strategy successfully.


Income


Distribution commission of US$4,025 was earned during the last quarter of the fiscal 2005 from one of the films for which the Company holds distribution rights.


The Company’s activities failed to generate any revenues during the fiscal years 2004 and 2003.


Expenses


The overall analysis of the expenses is as follows:


Year ended June 30

2005

2004

2003

       

Operating expenses

 $147,064 

 $104,451 

 $33,514 

Amortisation of investments in film and television programs

 117,500 

 - 

 - 

Deferred development costs written off

 - 

 110,150 

 - 

Scripts and lyrics written off

 - 

 - 

 75,000 

       
 

 $264,564 

 $214,601 

 $108,514 


Operating Expenses


Consulting (2005: $76,095, 2004:$ 64,840 and 2003:$22,541)


Consulting fees in fiscal 2005 mainly consists of monthly fees paid to eight consultants working for NHFT which became fully operational in March 2005.


Majority of consulting fee -$60,374 – in fiscal 2004 and was  charged by a shareholder corporation, Snapper Inc. under a consulting contract providing for a monthly fee of US$5,000 for arranging interest-free working capital, introduction to business opportunities and public relations. The contract with Snapper Inc. was terminated on June 30, 2004.


Consulting fee for fiscal 2003 included fee of $13,944 charged by Snapper Inc.



Shareholder Information (2005:$20,122, 2004: $3,142 and 2003: $(553))


Shareholder information costs consist of cost of holding shareholders’ meetings and regulatory and related filing fees.


During 2005, the Company paid to a market maker in the US , a one –time total  fee of  $11,250 comprising US$ 5,000 in cash (CDN$6,250) and $5,000 in 50,000 restricted common shares of the Company. The fee was paid for their services in connection with the Company’s application to NASDAQ for a listing and trading symbol.


The Company also paid a one-time non refundable fee of $2,000 to Canadian National Quotation Exchange (CNQ) for potentially listing the Company on CNQ. However, the Company decided not to pursue this listing further after it was accepted on NASDAQ over the counter bulletin board listing.

The balance of the costs for fiscal 2005 included filing fees paid to Ontario Securities Commission and other regulatory bodies and $1,981 towards shareholders’ meeting.


Fiscal 2004 costs comprised filing fees of $1,875 and shareholders’ meeting fee of $1,267.


In fiscal 2003, filing fees of $ 1,522 were off set by a negative shareholders meeting cost of $1,715 caused by reversal of excess accruals in the previous year.


Promotion costs (2005: $13,543, 2004 and 2003: $ nil)


Promotional costs for fiscal 2005 include costs of hosting a major event in September 2004 for a group of prospective investors and people in entertainment industry. The primary purpose was to introduce Noble House and Mr. Damian Lee and his team and also to identify new business opportunities.

 

There was no promotional activity during fiscal years 2004 and 2003.


Professional fees (2005: $9,680, 2004: $26,309 and 2003: $ 5,989)


Fiscal 2005 professional fee comprises audit fee provision.


Major item in fiscal 2004 included audit fees of $16,365 to cover 2004 audit and also to cover US reporting on fiscal 2003 for the purpose of filings with US Securities and Exchange Commission. A fee of $5,000 was paid to Mr. Kam Shah, the Chief Financial Officer in the form of 50,000 post reverse-split common shares for accounting services.


Fees for fiscal 2003 mainly included audit fee of $5,000.


Office and general (2005: $27,061, 2004: $9,953 and 2003: $5,245)


These costs include rent, telephone, Internet, transfer agents fees and other general and administration costs.

Significant increase in the fiscal 2005 compared to the previous years was mainly attributable to the new operational costs of NHFT of approximately $12,300. These costs included rent of $6,500 for new premises where the office of NHFT is located. The balance of the costs comprised expenses of approximately $6,000 recharged to the corporate office by Current Capital Corp., a shareholder corporation under an expense sharing agreement and $8,200 transfer agent’s fee.

Expenses for 2004 and 2003 were primarily the corporate costs charged by Current Capital Corp and transfer agent fees.

Transfer agent fees increased significantly in fiscal 2005 due to reverse split and buy back and increased treasury activities.

Amortization of Investments in Film and Television Programs


The details are as follows:


 

Scripts

Distibution contracts

Balance as at July 1, 2004

 - 

 - 

Acquired during year

 230,000 

 120,000 

Amortized during year

 (57,500)

 (60,000)

Balance as at June 30, 2005

 172,500 

 60,000 



The carrying value of one of the ten scripts was fully amortized since its development plan was postponed for an indefinite period and of three other scripts were partially amortised since they were to be re-written before being developed.


Similarly, the carrying values of three of the seven distribution contracts were fully amortised since no reasonable estimate of expected distribution commission there from can be made for the foreseeable future while carrying value of one other distribution contract was partially amortised.


During the fiscal 2004, the Company wrote off contract rights and production costs of $110,000 incurred in the previous year and deferred in respect of Jenn Project as explained earlier in this report.


In fiscal 2003, the Company wrote off the costs of scripts and lyrics totalling $75,000 in respect of a musical “The Count” since the musical project was abandoned for lack of adequate funding.


(B)  LIQUIDITY AND CAPITAL RESOURCES


        Working Capital


As at June 30, 2005, the Company had a net working capital deficit of $194,696 compared to a working capital deficit of $57,478 as at June 30, 2004.


Significant increase in the deficit in fiscal 2005 was due to additional funds provided by the shareholder corporations to meet the operating needs of NHFT and corporate office costs on new listing on OTCBB


Cash on hand as at June 30, 2005 was $1,629.


The Company expects cash flow from some of the initiatives that have been taken by NHFT in generating revenue in the next fiscal year and also hopes to raise funds through private placements. However, it will continue to depend on its corporate shareholders to fund any deficit in its working capital requirements.


        Operating cash flow


During the fiscal 2005, net cash outflow of $104,347 from the operations, mainly consulting fees and operating costs of NHFT was off set by the net cash inflow of $105,731 from funds advanced by corporate shareholders, thus resulting in a net cash increase of $1,384 which was added to the cash of $245 at the beginning of the year, resulting in a cash on hand of $1,629 at the end of the year.


        Key financing activities


The following outlines the Company’s key financing activities during the fiscal year 2005:


    1.  On November 19, 2004, the Company carried out a reverse stock split under which one new common share of the Company was issued for every two old common shares of the Company. Under the Company’s share buy-back plan to deal with fractional shares arising from the reverse stock split per (i) above, the Holders of less than ten old common shares were not issued any new shares of the Company. Instead, they were entitled to a payment of $0.10 per share, subject to minimum of $1. As a result, a maximum of 619 existing common shares are expected to be returned to the Company for cancellation for a total cash consideration of $185 under the buy-back plan. The plan has no expiry date.

    2.  On November 30, 2004, the Company issued 3.5 million common shares plus 3.5  million warrants to an independent Production House in settlement of the value of acquisition of certain theatrical films properties valued at $350,000 (see “Acquisition” above). These shares cannot be sold or transferred by the vendor for at least five years from the date of issuance without the approval of the Company as per the terms of the assets purchase agreement dated November 30, 2004.

The vendor was also issued 3.5 million warrants, which are convertible into equal number of common shares of the Company at a conversion price of $1 per warrant on or before November 30, 2006, As at June 30, 2005, none of the warrants was exercised.


      3.  On June 13, 2005, the Company issued 50,000 restricted Common shares to a     market maker in the US in settlement of part of their fee for application to NASDAQ for a listing and trading symbol on Over the Counter Bulletin Board.


        Key Investing Activities


Key investment activity during the fiscal 2005 comprised acquisition of assets from an independent production Company, Noble House production Inc. for a total sum of $350,000 settled by issuance of 3.5 million restricted common shares of the Company plus equal number of warrants exercisable at $1 for equal number of common shares of the Company within two years. This is more fully explained under “Acquisition” above.

C)  

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

The Company has not spent any funds on research and development during the fiscal years 2005, 2004 and 2003.

 (D)  

TREND INFORMATION

There are no trends, commitments, events or uncertainties presently known to management that are reasonably expected to have a material effect on the Company’s business, financial condition or results of operation other than the nature of the business (Refer to the heading entitled “Risk Factors”).

(E)

OFF-BALANCE SHEET ARRANGEMENTS

At June 30, 2005, 2004 and 2003, the Company did not have any off balance sheet arrangements, including any relationships with unconsolidated entities or financial partnership to enhance perceived liquidity.

 (F)

CONTRACTUAL OBLIGATIONS

Not applicable.

(G)

SAFE HARBOUR

Not applicable.

ITEM 6 – DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



(A)  DIRECTORS AND SENIOR MANAGEMENT


The following table sets forth all current directors and executive officers of the Company, with each position and office held by them in the Company, and the period of service as such:



Name and Position With the Company

Other principal directorships

Principal business activities outside the Company

Damian Jacques Lee

Director and Chairman

Chief Executive Officer

Director – Bontan Corporation Inc., an Ontario public company listed and traded on OTCBB

Independent writer, producer and director of films and television series. Owns a private production company

Kam Shah

Director

Chief Financial Officer

Director – Bontan Corporation Inc., an Ontario public company listed and traded on OTCBB

Provides accounting services to Current Capital Corp. and Bontan Corporation Inc. Chief Executive Officer and Chief Financial Officer of Bontan Corporation Inc. and a part time practice as chartered accountant



John Peter Robinson

Independent director

Director – Current Capital Corp., On Ontario private corporation

President of Current Capital Corp.


Damian Lee has been appointed as Chief Executive Officer and a chairman and director on December 1, 2004 and is based in Toronto, Ontario. Mr. Lee is a twenty-year veteran of the film industry. Mr. Lee’s movie credits which comprise as producer on 34 films, as writer on 20 films, as director on 14 films, as actor on 7 films and as assistant director on 2 films.  He cast Jim Carrey, Hayden Christensen and Jason Priestley, among others, in their first feature film roles.  Mr. Lee has written, directed and produced some of the most successful films in Canadian history, many of which spawned profitable and entertaining sequels.


Kam Shah joined the Company as a Chief Financial Officer and was appointed to the Board on January 3, 1999. He worked with Pricewaterhouse Coopers LLP and Ernst & Young. He is a US Certified Public Accountant and a Canadian Chartered Accountant.  He has over fifteen years of international experience in corporate financial analysis, mergers & acquisitions. Mr. Shah is responsible for the financial and statutory matters of the Company and effective May 17, 2004, following resignation of the Chairman, Mr. Terence Robinson, had also assumed the responsibilities of the chairman of the Board and Chief Executive Officer of the Company until December 1, 2004 when Mr. Damian Lee took over those responsibilities and Mr. Shah continued as Chief Financial Officer.


John Robinson is a non-executive independent director based in Toronto, Ontario. He was appointed director of the Company on May 17, 2004. Mr. John is a chairman of the audit committee. He has over fifteen years of experience as venture capitalist. Mr. Robinson is a graduate of University of Toronto and Toronto French School. He can communicate in French, Italian and Russian apart from English.




Management Team


The Company‘s current management team consists of the following:


Noble house Entertainment Inc.


1.  Mr. Damian Lee as Chief Executive officer.

     2.  Mr. Kam Shah as Chief Financial Officer


Noble house Film and Television Inc.


     1.  Mr. Damian Lee as President

     2.  Mr. Lowell Conn as Executive Vice President


LOWELL CONN, the co-founder of Noble House Productions, collaborated with Mr. Lee on the completion of ONE EYED KING and the re-release of Jim Carrey’s first film, COPPER MOUNTAIN.  He is the author of innumerable published articles and multiple feature film scripts.  Mr. Conn is a weekly contributor to the National Post and has served as a business consultant for a number of online and print newspapers and magazines.


Background details of the other executives are given under 6(A) above.


(B)  COMPENSATION


The compensation payable to directors and officers of the Company and its subsidiary is summarized below:


1.

General


The Company does not compensate directors for acting solely as directors. Except as described below, the Company does not have any arrangements pursuant to which directors are remunerated by the Company or its subsidiary for their services in their capacity as directors, other than options to purchase shares of the Company which may be granted to the Company’s directors from time to time and the reimbursement of direct expenses.


The Company does not have any pension plans.


2.

Statement of Executive Compensation


Mr. Kam Shah has not signed any consulting contract with the Company and is not paid any cash remuneration. He may be issued options and shares in lieu of his services.


Mr. Damian Lee signed a five-year consulting contract on December 1, 2004, which provides for cash remuneration of $6,000 per month plus production fees and incentives linked to his role and responsibility on each film or television production.


Mr. Lowell Conn signed a five-year consulting contract on February 1, 2005, which provides for cash remuneration of $4,350 for the first year. Cash remuneration for the subsequent years in the agreement is to be decided annually by the Board of Noble House. Mr. Conn will also be entitled to production fees and incentives linked to his role and responsibility on each film or television production.

The following table and accompanying notes set forth all compensation paid by the Company to its directors and senior management for the fiscal years ended June 30, 2005, 2004 and 2003

 

ANNUAL COMPENSATION

LONG-TERM COMPENSATION

         

Awards

Payouts

 

Name and principal position

Year

Fee

Bonus

Other annual compensation

Securities under options/SARs Granted (1)

Shares or units subject to resale restrictions

LTIP (2) payouts

All other compensation

   

($)

($)

($)

(#)

($)

($)

 

Damian Lee – CEO & President of NHFT

2005

30000

-

-

-

-

-

-

 

2004

     

Not applicable

     
 

2003

     

Not applicable

     

Kam Shah – CFO

2005

-

-

 

Nil/Nil

-

-

-

CFO

2004

5,000

-

-

Nil/Nil

-

-

-

CFO

2003

-

-

-

Nil/Nil

-

-

-

Lowell Conn – Executive Vice President – NHFT

2005

21,750

-

-

20,000/Nil

-

-

-

 

2004

     

Not applicable

     


    Notes:

   1.  “SAR” means stock appreciation rights

   2.  “LTIP” means long term incentive plan

Long Term Incentive Plan (LTIP) Awards

The Company does not have a LTIP, pursuant to which cash or non-cash compensation intended to serve as an incentive for performance (whereby performance is measured by reference to financial performance or the price of the Company’s securities) was paid or distributed to the Named Executive Officers during the most recently completed financial year.

Defined Benefit or Actuarial Plan Disclosure

There is no pension plan or retirement benefit plan that has been instituted by the Company and none are proposed at this time.

(C)  BOARD PRACTICES


Directors may be appointed at any time in accordance with the by-laws of the Company and then re-elected annually by the shareholders of the Company. Directors receive no compensation for serving as such, other than stock option and reimbursement of direct expenses. Officers are elected annually by the Board of Directors of the Company and serve at the discretion of the Board of Directors.


The Company has not set aside or accrued any amount for retirement or similar benefits to the directors.


Audit Committee


The members of the audit committee consist of John Robinson and Damian Lee. The audit committee is charged with overseeing the Company's accounting and financial reporting policies, practices and internal controls. The committee reviews significant financial and accounting issues and the services performed by and the reports of our independent auditors and makes recommendations to our Board of Directors with respect to these and related matters.


The Company’s Audit Committee has adopted the following charter (the “Charter”) that sets out its mandate and responsibilities:


General


The primary function of the Audit Committee is to assist the Board of Directors of the Company (the “Board”) in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the shareholders and others, the systems of internal controls and management information systems established by management and the Company’s external audit process and monitoring compliance with the Company’s legal and regulatory requirements with respect to its financial statements.


The Audit Committee is accountable to the Board. In the course of fulfilling its specific responsibilities hereunder, the Audit Committee is expected to maintain an open communication between the Company’s external auditors and the Board.


The responsibilities of a member of the Audit Committee are in addition to such member’s duties as a member of the Board.


The Audit Committee does not plan or perform audits or warrant the accuracy or completeness of the Company’s financial statements or financial disclosure or compliance with generally accepted accounting procedures, as these are the responsibility of management and the external auditors.


Effective Date

This Charter was implemented by the Board on August 2, 2005.


Composition of Audit Committee

The Committee membership shall satisfy the laws and policies governing the Company and the independence, financial literacy and experience requirements under securities law, stock exchange and any other regulatory requirements as are applicable to the Company.


Relationship with External Auditors

The external auditor is required to report directly to the Audit Committee. Opportunities shall be afforded periodically to the external auditor and to members of senior management to meet separately with the Audit Committee.


Responsibilities


     1. The Audit Committee shall be responsible for making the following recommendations to the Board:


     a.   the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company; and

     b.     the compensation of the external auditor


     2.   The Audit Committee shall be directly responsible for overseeing the work of the external auditor, including the resolution of disagreements between management and the external auditor regarding financial reporting.  This responsibility shall include:


     a.  reviewing with management and the external auditor any proposed changes in major accounting policies, the presentation and impact of significant risks and uncertainties, and key estimates and judgments of management that may be material to financial reporting;

     b.   questioning management and the external auditor regarding significant financial reporting issues discussed during the fiscal period and the method of resolution;

     c.   reviewing audited annual financial statements, in conjunction with the report of the external auditor;

     d.    reviewing any problems experienced by the external auditor in performing the audit, including any restrictions imposed by management or significant accounting issues on which there was a disagreement with management; and

     e.    reviewing the evaluation of internal controls by the external auditor, together with management’s response


     3.    The Audit Committee shall review interim unaudited financial statements before release to the public.


     4.   The Audit Committee shall review all public disclosures of audited or unaudited financial information before release, including any prospectus, annual report, annual information form, and management’s discussion and analysis.


     5.     The Audit Committee shall review the appointments of the chief financial officer and any other key financial executives involved in the financial reporting process, as applicable.


     6.   Except as exempted by securities regulatory policies, the Audit Committee shall pre-approve all non-audit services to be provided to the Company or its subsidiary entities by the external auditor.


     7.     The Audit Committee shall ensure that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from the Company’s financial statements, and shall periodically assess the adequacy of those procedures.


     8.     The Audit Committee shall establish procedures for:


     a.  the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and   

     b.     the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.


     9.   The Audit Committee shall periodically review and approve the Company’s hiring policies, if any, regarding partners, employees and former partners and employees of the present and former external auditor of the Company.


    10.     Meetings of the Audit Committee shall be scheduled to take place at regular intervals and, in any event, not less frequently than quarterly.

    

    


         

     


Authority


The Audit Committee shall have the authority to:




     a.   to engage independent counsel and other advisors as it determines necessary to carry out its duties;


     b.     to set and pay the compensation for any advisors employed by the Audit Committee; and


     c.     to communicate directly with the external auditors.


                




Compensation Committee


The Company does not currently have a Compensation Committee.  The directors determined that, in light of the Company’s size and resources, setting up such a committee would be too expensive for the Company at this time.  The Company has, however, set up an Independent Review Committee of the Board to review and approve all non-arms’ length contracts.  This Committee has the same composition as the Audit Committee, and is currently comprised of the two directors:  John Robinson and Damian Lee.



(D)  EMPLOYEES


The Company presently has no permanent employees. It uses the services of consultants from time to time.


(E)  SHARE OWNERSHIP


The Company presently has no share option or compensation plans.


The directors now propose to create two plans to be named  (a) 2006 Consultant Stock Compensation Plan covering 1 million common shares of the Corporation and (b) 2006 Stock Option Plan covering 1 million options.

The objective of these Plans is to provide for and encourage ownership of common shares of the Company by its directors, officers, consultants and employees and those of any subsidiary companies so that such persons may increase their stake in the Company and benefit from increases in the value of the common shares. The Plans are designed to be competitive with the benefit programs of other companies in the natural resource industry. It is the view of management that the Plans are a significant incentive for the directors, officers, consultants and employees to continue and to increase their efforts in promoting the Company’s operations to the mutual benefit of both the Company and such individuals and also allow the Company to avail of the services of experienced persons with minimum cash outlay.

The following table sets forth the share ownership of those persons listed in subsection 6.B above and includes details of all warrants held by such persons at June 30, 2005:

Name

# of Common shares held at June 30, 2005

# of Warrants

Exercise price - in US$

Expiry date(s)

Damian Lee(1)

3,500,000 

3,500,000 

$1.00 

30-Nov-06

Lowell Conn(1)

Kam Shah

75,000 

 -   

   
         

John Robinson (2)

1,488,750 

 -   

   


      (1)

Shares and warrants held through Noble House Corporation Ltd. Owned jointly by Mr. Damian Lee and Mr. Lowell Conn.


      (2)

Held through Current Capital Corp., whose John Robinson is a sole shareholder.


During the fiscal year 2004, 50,000 post reverse-split shares were issued to Mr. Kam Shah, CFO for accounting services


No options or shares were issued in 2003.



ITEM 7 – MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


(A)  MAJOR SHAREHOLDERS


The Company's securities are recorded on the books of its transfer agent in registered form. The majority of such shares are, however, registered in the name of intermediaries such as brokerage houses and clearing-houses on behalf of their respective clients. The Company does not have knowledge of the beneficial owners thereof.


As at November 16 2005, Intermediaries like CDS & Co, Toronto, Canada and Cede & Co of New York, USA held approx. 14% of the issued and outstanding common shares of the company on behalf of several beneficial shareholders whose individual holdings details were not available. The following are the other registered shareholders holding more than 5% of the common shares of the company as at November 16, 2005.





Name of Shareholder

No. of Shares

% of Issued Shares


Noble House Corporation Ltd.(1)


John Robinson(2)


Snapper Inc.



3,500,000


1,488,750


1,295,000



43%


18%


16%


      (1) Noble House Corporation Ltd. is owned by Mr. Damian Lee and Mr.    Lowell Conn, both are executives of the Company and its subsidiary.

      (2)  1.3 million shares are held in the name of Current Capital Corp. of which  Mr. John Robinson is a sole shareholder and director.


At November 16, 2005, the Company had 8,134,544 shares of common stock outstanding, which, as per the details provided by the Transfer Agents, were held by 364 record holders excluding the beneficial shareholders held through the intermediaries, 16 of which, holding an aggregate of 234,381 shares (2.88%) of common stock, were in the United States.

The Registrant is a publicly owned Canadian corporation, the shares of which are owned by Canadian residents, US residents, and residents of other countries. The Registrant is not owned or controlled directly or indirectly by another corporation or any foreign government. There are no arrangements, known to the Company, the operation of which may at a subsequent date result in a change of control of the Company.

(B) RELATED PARTY TRANSACTIONS


Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount. Related party transactions and balances as at June 30, 2005  have been listed below:


Current Capital Corp., a shareholder corporation where directors of the Company serve as consultants and is owned by one of the directors charged approximately $5,400 for the premises rent, telephone, consultants’ fees and other office expenses (2004 - $12,600; 2003 - $11,200).


Consulting fees include amounts to Snapper Inc., a shareholder corporation of $nil (2004 - $60,372; 2003 - $13,944).


Included in professional fees are fees of $nil (2004:  $5,000, 2003:  $Nil) paid to a director of the Company.  The payment was made by way of issuance of 100,000 shares of the Company.


Consulting fee includes fee paid to a director for services rendered of $30,000 (2004 and 2003:  $nil)

Rent of $6,500 (2004 and 2003:  $nil) is charged in respect of the subsidiary premises owned by a director of the Company.

Included in accounts payable are balances due to Current Capital Corp. of $15,728 (2004:  2,100 and 2003:  $nil)

Receivable included $3,752 (2004 and 2003:  $nil) advanced to two production companies owned by the directors of the subsidiary and which will license the scripts from the Company.

Payable includes $11,900 (2004 and 2003:  $nil) received from two production companies.  The Company is a co-producer in one of these production companies.  The Company is a co-producer in one of these production companies and directors of the subsidiary are the owners of the other production company.

Advances from shareholders as at June 30, 2005 were $143,937 (June 30, 2004:  $38,021 and June 30, 2003:  $52,158)

Indebtedness to Company of Directors, Executive Officers and Senior Officers

None of the directors, consultants, executive officers and senior officers of the Company or any of its subsidiaries, proposed nominees for election or associates of such persons is or has been indebted to the Company at any time for any reason whatsoever, including the purchase of securities of the Company or any of its subsidiaries.


(C) INTERESTS OF EXPERTS AND COUNSEL


Not applicable



ITEM 8 – FINANCIAL INFORMATION


(A) CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Information regarding our financial statements is contained under the caption "Item 17. Financial Statements" below.

Legal Proceedings


A case was filed on August 10, 2005 in the Court in Florida against the Company and some of its current and past directors by a person alleging a liability of US$ 200,000 plus triple damages for failing to issue him common shares of the Company against the funds that he alleged to have paid in 1997.


The Company’s lawyer filed a motion to dismiss the case on October 12, 2005 for lack of jurisdiction.


Notwithstanding the above, the Company does not believe that the case is valid and has therefore made no provision in the financial statements against the claim.


Dividend Policy

Since its incorporation, the Company has not declared or paid, and has no present intention to declare or to pay in the foreseeable future, any cash dividends with respect to its Common Shares. Earnings will be retained to finance further growth and development of the business of the Company. However, if the Board of Directors declares dividends, all Common Shares will participate equally in the dividends, and, in the event of liquidation, in the net assets, of the Company.

 (B)  SIGNIFICANT CHANGES

There were no key corporate changes and other significant events that occurred subsequent to June 30, 2005:

ITEM 9 - THE OFFER AND LISTING

(A)  OFFER AND LISTING DETAILS


The Company’s common shares began trading on OTCBB on April 27 2005. Prior to that date, the Company’s shares were traded “Over –the Counter” on the Canadian Unlisted Board (“CUB”) for a brief while in 2000. No real-time quotes or trades were available to the public. There is no record of quotations under the CUB.


The following table sets forth the reported high and low sale prices for the common shares of the Company as quoted on OTCBB during the fiscal year ended June 30, 2005 covering the period from April 28, 2005 to June 30, 2005

The following table outlines the annual high and low market prices for the five most recent fiscal years:

Fiscal year ended June 30

High

In US $

Low

In US$

2005

.65

.535

     

The following table outlines the high and low market prices for fiscal financial quarter ended September 30, 2005

Fiscal Quarter ended

High

Low

 

In US$

In US$

September 30, 2005

.615

.555

The following table outlines the high and low market prices for each of the most recent six months:



Month

High

Low

 

 In US$

In US$

October, 2005

.655

.655

September 0, 2005

.655

.655

August  , 2005

.615

.615

July, 2005

.62

.615

June, 2005

.55

.55

May, 2005

.55

.55


(B)  PLAN OF DISTRIBUTION

Not applicable

(C)  MARKETS

The company's common shares were traded briefly during the fiscal 2000 "over-the-counter" on the Canadian Unlisted Board ("CUB") with the trading symbol "FEPR" and CUSIP #32008X 10 2. The CUB system was implemented in November 2000 but has currently been discontinued. It was only available to traders and brokers for reporting trades that they had arranged in unlisted and unquoted equity securities in Ontario. No real-time quotes or trades were available to the public. There is no record of quotations under the CUB.

Since April 27, 2005, the Company’s common shares began trading on OTCBB of NASDAQ under a trading symbol “NHSEF”

(D)  SELLING SHAREHOLDERS

Not applicable.

(E)  DILUTION

Not applicable

(F)  EXPENSES OF THE ISSUE

Not applicable

ITEM 10 – ADDITIONAL INFORMATION

(A)  SHARE CAPITAL


This Form 20F is being filed as an Annual Report under the Exchange Act and, as such, there is no requirement to provide any information under this section.

 (B)  MEMORANDUM AND ARTICLES OF ASSOCIATION

The Memorandum and Articles of the Company are incorporated by reference to the information in our registration statement on Form 20-F filed with the Securities and Exchange Commission, in Washington, D.C. on June 12, 2000 to which our Articles of Incorporation and Memorandum were filed as exhibits.

No further changes have been made to the Company’s Articles/Bylaws.

(C) MATERIAL CONTRACTS

On November 30, 2004, the Company entered into a purchase agreement with Noble House Production Limited to acquire certain film properties at an agreed price of $350,000, which was settled by issuance of 3.5 million restricted common shares plus 3.5 million warrants exercisable at $1 each to acquire equal number of common shares. This is more fully explained under Item 5 (A) “acquisition” above.

(D)

 EXCHANGE CONTROLS

There are no governmental laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends or other payments to non-resident holders of the Company’s common shares.  Any remittances of dividends to United States residents are, however, subject to a 15% withholding tax (5% if the shareholder is a corporation owning at least 10% of the outstanding common shares of the Company) pursuant to Article X of the reciprocal tax treaty between Canada and the United States.  See “Item 10 – Additional Information – E.  Taxation” below.  


Except as provided in the Investment Canada Act ( the “Act”), which has provisions which govern the acquisition of a control block of voting shares by non-Canadians of a corporation carrying on a Canadian business, there are no limitations specific to the rights of non-Canadians to hold or vote the common shares of the Company under the laws of Canada or the Province of Ontario or in the charter documents of the Company.


Management of the Company considers that the following general summary fairly describes those provisions of the Act pertinent to an investment in the Company by a person who is not a Canadian resident (a “non-Canadian”).


The Act requires a non-Canadian making an investment which would result in the acquisition of control of the Canadian business to notify the Investment Review Division of Industry Canada, the federal agency created by the Act; or in the case of an acquisition of a Canadian business, the gross value of the assets of which exceeds certain threshold levels or the business activity of which is related to Canada’s cultural heritage of national identity, to file an application for review with the Investment Review Division.  


The notification procedure involves a brief statement of information about the investment on a prescribed form, which is required to be filed with Investment Canada by the investor at any time up to 30 days following implementation of the investment.  Once the completed notice has been filed, a receipt bearing the certificate date will be issued to the non-Canadian investor.  The receipt must advise the investor either that the investment proposal is unconditionally non-reviewable or that the proposal will not be reviewed as long as notice of review is not issued within 21 days of the date certified under the receipt.  It is intended that investments requiring only notification will proceed without government intervention unless the investment is in a specific type of business activity related to Canada’s cultural heritage and national identity.


If an investment is reviewable under the Act, an order for review must be issued within 21 days after the certified date on which notice of investment was received.  An application for review in the form prescribed is required to be filed with Investment Canada prior to the investment taking place.  Once the application has been filed, a receipt will be issued to the applicant, certifying the date on which the application was received.  For incomplete applications, a deficiency notice will be sent to the applicant, and if not done within 15 days of receipt of application, the application will be deemed to be complete as of the date it was received.  Within 45 days after the complete application has been received, the Minister responsible for the Investment Canada Act must notify the potential investor that the Minister is satisfied that the investment is likely to be of net benefit to Canada.  If within such 45-day period the Minister is unable to complete the review, the Minister has an additional 30 days to complete the review, unless the applicant agrees to a longer period.  Within such additional period, the Minister must advise either that he is satisfied or not satisfied that the investment is likely to be of net benefit to Canada.  If the time limits have elapsed, the Minister will be deemed to be satisfied that the investment is likely to be of net benefit to Canada.  The investment may not be implemented until the review has been completed and the Minister is satisfied that the investment is likely to be of net benefit to Canada.


If the Minister is not satisfied that the investment is likely to be of net benefit to Canada, the non-Canadian must not implement the investment or, if the investment has been implemented, could be penalized by being required to divest himself of control of the business that is the subject of the investment.  To date, the only types of business activities which have been prescribed by regulation as related to Canada’s cultural heritage or national identity deal largely with publication, film and music industries.  Because the Company’s total assets are less than the $5 million notification threshold, and because the Company’s business activities would likely not be deemed related to Canada’s cultural heritage or national identity, acquisition of a controlling interest in the Company by a non-Canadian investor would not be subject to even the notification requirements under the Investment Canada Act.  


The following investments by non-Canadians are subject to notification under the Act:


        1. An investment to establish a new Canadian business; and


        2. An investment to acquire control of a Canadian business that is not reviewable pursuant to the Act.


The following investments by a non-Canadian are subject to review under the Act:


        1. Direct acquisition of control of Canadian businesses with assets of $5 million or more, unless the acquisition is being made by a World Trade Organization (“WTO”) member country investor (the United States being a member of the WTO);


        2. Direct acquisition of control of Canadian businesses with assets of $237,000,000 or more by a WTO investor;


        3. Indirect acquisition of control of Canadian business with assets of $5 million or more if such assets represent more than 50% of the total value of the assets of the entities, the control of which is being acquired, unless the acquisition is being made by a WTO investor, in which case there is no review;


        4. indirect acquisition of control of Canadian businesses with assets of $50 million or more even if such assets represent less than 50% of the total value of the assets of the entities, the control of which is being acquired, unless the acquisition is being made by a WTO investor, in which case there is no review; and


        5. An investment subject to notification that would not otherwise be reviewable if the Canadian business engages in the activity of publication, distribution or sale of books, magazines, periodicals, newspapers, film or video recordings, audio or video music recordings, or music in print or machine-readable form.


Generally speaking, an acquisition is direct if it involves the acquisition of control of the Canadian business or of its Canadian parent or grandparent and an acquisition is indirect if it involves the acquisition of control of a non-Canadian parent or grandparent of an entity carrying on the Canadian business.  Control may be acquired through the acquisition of actual voting control by the acquisition of voting shares of a Canadian corporation or through the acquisition of substantially all of the assets of the Canadian business.  No change of voting control will be deemed to have occurred if less than one-third of the voting control of a Canadian corporation is acquired by an investor.


A WTO investor, as defined in the Act, includes an individual who is a national of a member country of the World Trade Organization or who has the right of permanent residence in relation to that WTO member, a government or government agency of a WTO investor-controlled corporation, limited partnership, trust or joint venture and a corporation, limited partnership, trust or joint venture that is neither WTO-investor controlled or Canadian controlled of which two-thirds of its board of directors, general partners or trustees, as the case may be, or any combination of Canadians and WTO investors.


The higher thresholds for WTO investors do not apply if the Canadian business engages in activities in certain sectors such as uranium, financial services, transportation services or communications.


The Act specifically exempts certain transactions from either notification or review.  Included among this category of transactions is the acquisition of voting shares or other voting interests by any person in the ordinary course of that person’s business as a trader or dealer in securities.

(E)  TAXATION

U.S. Federal Income Tax Consequences

The following is a summary of the anticipated material U.S. federal income tax consequences to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares of the Company (“Common Shares”).


This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax consequences that may apply to a U.S. Holder as a result of the acquisition, ownership, and disposition of Common Shares.  In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.  Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder.  Each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the acquisition, ownership, and disposition of Common Shares.


Scope of this Disclosure


Authorities


This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings of the Internal Revenue Service (“IRS”), published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this Annual Report.  Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive basis.  This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive basis.


U.S. Holders


For purposes of this summary, a “U.S. Holder” is a beneficial owner of Common Shares that, for U.S. federal income tax purposes, is (a) an individual who is a citizen or resident of the U.S., (b) a corporation, or any other entity classified as a corporation for U.S. federal income tax purposes, that is created or organized in or under the laws of the U.S. or any state in the U.S., including the District of Columbia, (c) an estate if the income of such estate is subject to U.S. federal income tax regardless of the source of such income, or (d) a trust if (i) such trust has validly elected to be treated as a U.S. person for U.S. federal income tax purposes or (ii) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of such trust.


Non-U.S. Holders


For purposes of this summary, a “non-U.S. Holder” is a beneficial owner of Common Shares other than a U.S. Holder.  This summary does not address the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares to non-U.S. Holders.  Accordingly, a non-U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the U.S. federal, U.S. state and local, and foreign tax consequences (including the potential application of and operation of any tax treaties) of the acquisition, ownership, and disposition of Common Shares.


U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed


This summary does not address the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares to U.S. Holders that are subject to special provisions under the Code, including the following U.S. Holders:  (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a “functional currency” other than the U.S. dollar; (e) U.S. Holders that are liable for the alternative minimum tax under the Code; (f) U.S. Holders that own Common Shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (g) U.S. Holders that acquired Common Shares in connection with the exercise of employee stock options or otherwise as compensation for services; (h) U.S. Holders that hold Common Shares other than as a capital asset within the meaning of Section 1221 of the Code; or (i) U.S. Holders that own, directly or indirectly, 10% or more, by voting power or value, of the outstanding shares of the Company.  U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above, should consult their own financial advisor, legal counsel or accountant regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the acquisition, ownership, and disposition of Common Shares.


If an entity that is classified as partnership (or “pass-through” entity) for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax consequences to such partnership (or “pass-through” entity) and the partners of such partnership (or owners of such “pass-through” entity) generally will depend on the activities of the partnership (or “pass-through” entity) and the status of such partners (or owners).  Partners of entities that are classified as partnerships (or owners of “pass-through” entities) for U.S. federal income tax purposes should consult their own financial advisor, legal counsel or accountant regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.


Tax Consequences Other than U.S. Federal Income Tax Consequences Not Addressed


This summary does not address the U.S. state and local, U.S. federal estate and gift, or foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of Common Shares.  Each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the U.S. state and local, U.S. federal estate and gift, and foreign tax consequences of the acquisition, ownership, and disposition of Common Shares.  (See “Taxation—Canadian Federal Income Tax Consequences ” below).


U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Common Shares

Distributions on Common Shares


General Taxation of Distributions


A U.S. Holder that receives a distribution, including a constructive distribution, with respect to the Common Shares will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company.  To the extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution will be treated (a) first, as a tax-free return of capital to the extent of a U.S. Holder’s tax basis in the Common Shares and, (b) thereafter, as gain from the sale or exchange of such Common Shares.  (See more detailed discussion at “Disposition of Common Shares” below).  


Reduced Tax Rates for Certain Dividends


For taxable years beginning after December 31, 2002 and before January 1, 2009, a dividend paid by the Company generally will be taxed at the preferential tax rates applicable to long-term capital gains if (a) the Company is a “qualified foreign corporation” (as defined below), (b) the U.S. Holder receiving such dividend is an individual, estate, or trust, and (c) such dividend is paid on Common Shares that have been held by such U.S. Holder for at least 61 days during the 121-day period beginning 60 days before the “ex-dividend date” (i.e., the first date that a purchaser of such Common Shares will not be entitled to receive such dividend).


The Company generally will be a “qualified foreign corporation” under Section 1(h)(11) of the Code (a “QFC”) if (a) the Company is incorporated in a possession of the U.S., (b) the Company is eligible for the benefits of the Canada-U.S. Tax Convention, or (c) the Common Shares are readily tradable on an established securities market in the U.S.  However, even if the Company satisfies one or more of such requirements, the Company will not be treated as a QFC if the Company is a “passive foreign investment company” (as defined below) for the taxable year during which the Company pays a dividend or for the preceding taxable year.  In 2003, the U.S. Department of the Treasury (the “Treasury”) and the IRS announced that they intended to issue Treasury Regulations providing procedures for a foreign corporation to certify that it is a QFC.  Although these Treasury Regulations were not issued in 2004, the Treasury and the IRS have confirmed their intention to issue these Treasury Regulations.  It is expected that these Treasury Regulations will obligate persons required to file information returns to report a distribution with respect to a foreign security issued by a foreign corporation as a dividend from a QFC if the foreign corporation has, among other things, certified under penalties of perjury that the foreign corporation was not a “passive foreign investment company” for the taxable year during which the foreign corporation paid the dividend or for the preceding taxable year.



As discussed below, the Company does not believe that it was a “passive foreign investment company” for the taxable year ended March 31, 2005, and does not expect that it will be a “passive foreign investment company” for the taxable year ending December 31, 2005.  (See more detailed discussion at “Additional Rules that May Apply to U.S. Holders” below).  However, there can be no assurance that the IRS will not challenge the determination made by the Company concerning its “passive foreign investment company” status or that the Company will not be a “passive foreign investment company” for the current or any future taxable year.  Accordingly, although the Company expects that it may be a QFC, there can be no assurances that the IRS will not challenge the determination made by the Company concerning its QFC status, that the Company will be a QFC for the current or any future taxable year, or that the Company will be able to certify that it is a QFC in accordance with the certification procedures issued by the Treasury and the IRS.


If the Company is not a QFC, a dividend paid by the Company to a U.S. Holder, including a U.S. Holder that is an individual, estate, or trust, generally will be taxed at ordinary income tax rates (and not at the preferential tax rates applicable to long-term capital gains).  The dividend rules are complex, and each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the dividend rules.


Distributions Paid in Foreign Currency


The amount of a distribution paid to a U.S. Holder in foreign currency generally will be equal to the U.S. dollar value of such distribution based on the exchange rate applicable on the date of receipt.  A U.S. Holder that does not convert foreign currency received as a distribution into U.S. dollars on the date of receipt generally will have a tax basis in such foreign currency equal to the U.S. dollar value of such foreign currency on the date of receipt.  Such a U.S. Holder generally will recognize ordinary income or loss on the subsequent sale or other taxable disposition of such foreign currency (including an exchange for U.S. dollars).  


Dividends Received Deduction


Dividends paid on the Common Shares generally will not be eligible for the “dividends received deduction.”  The availability of the dividends received deduction is subject to complex limitations that are beyond the scope of this discussion, and a U.S. Holder that is a corporation should consult its own financial advisor, legal counsel, or accountant regarding the dividends received deduction.


Disposition of Common Shares


A U.S. Holder will recognize gain or loss on the sale or other taxable disposition of Common Shares in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received and (b) such U.S. Holder’s tax basis in the Common Shares sold or otherwise disposed of.  Any such gain or loss generally will be capital gain or loss, which will be long-term capital gain or loss if the Common Shares are held for more than one year.  Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of Common Shares generally will be treated as “U.S. source” for purposes of applying the U.S. foreign tax credit rules.   (See more detailed discussion at “Foreign Tax Credit” below).


Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust.  There are currently no preferential tax rates for long-term capital gains of a U.S. Holder that is a corporation.  Deductions for capital losses and net capital losses are subject to complex limitations.  For a U.S. Holder that is an individual, estate, or trust, capital losses may be used to offset capital gains and up to U.S.$3,000 of ordinary income.  An unused capital loss of a U.S. Holder that is an individual, estate, or trust generally may be carried forward to subsequent taxable years, until such net capital loss is exhausted.  For a U.S. Holder that is a corporation, capital losses may be used to offset capital gains, and an unused capital loss generally may be carried back three years and carried forward five years from the year in which such net capital loss is recognized.  


Foreign Tax Credit


A U.S. Holder who pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the Common Shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax paid.  Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax.  This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.  


Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income.  In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.”  In addition, this limitation is calculated separately with respect to specific categories of income (including “passive income,” “high withholding tax interest,” “financial services income,” “general income,” and certain other categories of income).  Dividends paid by the Company generally will constitute “foreign source” income and generally will be categorized as “passive income” or, in the case of certain U.S. Holders, “financial services income.”  However, for taxable years beginning after December 31, 2006, the foreign tax credit limitation categories are reduced to “passive income” and “general income” (and the other categories of income, including “financial services income,” are eliminated).  The foreign tax credit rules are complex, and each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the foreign tax credit rules.  


Information Reporting; Backup Withholding Tax


Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from certain sales or other taxable dispositions of, Common Shares generally will be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax.  However, U.S. Holders that are corporations generally are excluded from these information reporting and backup withholding tax rules.  Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS.  Each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the information reporting and backup withholding tax rules.


Additional Rules that May Apply to U.S. Holders


If the Company is a “controlled foreign corporation” or a “passive foreign investment company” (each as defined below), the preceding sections of this summary may not describe the U.S. federal income tax consequences to U.S. Holders of the acquisition, ownership, and disposition of Common Shares.


Controlled Foreign Corporation


The Company generally will be a “controlled foreign corporation” under Section 957 of the Code (a “CFC”) if more than 50% of the total voting power or the total value of the outstanding shares of the Company is owned, directly or indirectly, by citizens or residents of the U.S., domestic partnerships, domestic corporations, domestic estates, or domestic trusts (each as defined in Section 7701(a)(30) of the Code), each of which own, directly or indirectly, 10% or more of the total voting power of the outstanding shares of the Company (a “10% Shareholder”).


If the Company is a CFC, a 10% Shareholder generally will be subject to current U.S. federal income tax with respect to (a) such 10% Shareholder’s pro rata share of the “subpart F income” (as defined in Section 952 of the Code) of the Company and (b) such 10% Shareholder’s pro rata share of the earnings of the Company invested in “United States property” (as defined in Section 956 of the Code).  In addition, under Section 1248 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares by a U.S. Holder that was a 10% Shareholder at any time during the five-year period ending with such sale or other taxable disposition generally will be treated as a dividend to the extent of the “earnings and profits” of the Company that are attributable to such Common Shares.  If the Company is both a CFC and a “passive foreign investment company” (as defined below), the Company generally will be treated as a CFC (and not as a “passive foreign investment company”) with respect to any 10% Shareholder.  


The Company does not believe that it has previously been, or currently is, a CFC.  However, there can be no assurance that the Company will not be a CFC for the current or any future taxable year.  


Passive Foreign Investment Company


The Company generally will be a “passive foreign investment company” under Section 1297 of the Code (a “PFIC”) if, for a taxable year, (a) 75% or more of the gross income of the Company for such taxable year is passive income or (b) 50% or more of the assets held by the Company either produce passive income or are held for the production of passive income, based on the fair market value of such assets (or on the adjusted tax basis of such assets, if the Company is not publicly traded and either is a “controlled foreign corporation” or makes an election).  “Passive income” includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.  However, for transactions entered into on or before December 31, 2004, gains arising from the sale of commodities generally are excluded from passive income if (a) a foreign corporation holds the commodities directly (and not through an agent or independent contractor) as inventory or similar property or as dealer property, (b) such foreign corporation incurs substantial expenses related to the production, processing, transportation, handling, or storage of the commodities, and (c) gross receipts from sales of commodities that satisfy the requirements of clauses (a) and (b) constitute at least 85% of the total gross receipts of such foreign corporation.   For transactions entered into after December 31, 2004, gains arising from the sale of commodities generally are excluded from passive income if substantially all of a foreign corporation’s commodities are (a) stock in trade of such foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary course of business, (b) property used in the trade or business of such foreign corporation that would be subject to the allowance for depreciation under Section 167 of the Code, or (c) supplies of a type regularly used or consumed by such foreign corporation in the ordinary course of its trade or business.  


For purposes of the PFIC income test and assets test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another foreign corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other foreign corporation and (b) received directly a proportionate share of the income of such other foreign corporation.  In addition, for purposes of the PFIC income test and asset test described above, “passive income” does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a “related person” (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.  


If the Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of Common Shares will depend on whether such U.S. Holder makes an election to treat the Company as a “qualified electing fund” or “QEF” under Section 1295 of the Code (a “QEF Election”) or a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market Election”).  A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this summary as a “Non-Electing U.S. Holder.”  


Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of Common Shares, and any “excess distribution” (as defined in Section 1291(b) of the Code) paid on the Common Shares, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the Common Shares.  The amount of any such gain or excess distribution allocated to prior years of such Non-Electing U.S. Holder’s holding period for the Common Shares generally will be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such prior year.  A Non-Electing U.S. Holder will be required to pay interest on the resulting tax liability for each such prior year, calculated as if such tax liability had been due in each such prior year.  


A U.S. Holder that makes a QEF Election generally will not be subject to the rules of Section 1291 of the Code discussed above.  However, a U.S. Holder that makes a QEF Election generally will be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the “net capital gain” of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) and the “ordinary earnings” of the Company, which will be taxed as ordinary income to such U.S. Holder.  A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each taxable year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company.  


A U.S. Holder that makes a Mark-to-Market Election generally will not be subject to the rules of Section 1291 of the Code discussed above.  A U.S. Holder may make a Mark-to-Market Election only if the Common Shares are “marketable stock” (as defined in Section 1296(e) of the Code).  A U.S. Holder that makes a Mark-to-Market Election will include in gross income, for each taxable year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the Common Shares as of the close of such taxable year over (b) such U.S. Holder’s tax basis in such Common Shares.  A U.S. Holder that makes a Mark-to-Market Election will, subject to certain limitations, be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder’s adjusted tax basis in the Common Shares over (b) the fair market value of such Common Shares as of the close of such taxable year.


The Company does not believe that it was a PFIC for the taxable year ended March 31, 2005, and does not expect that it will be a PFIC for the taxable year ending March 31, 2006.  There can be no assurance, however, that the IRS will not challenge the determination made by the Company concerning its PFIC status or that the Company will not be a PFIC for the current or any future taxable year.


The PFIC rules are complex and each U.S. Holder should consult its own financial advisor, legal counsel, or accountant regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.


Canadian Taxation

        

The following summary fairly describes, as of the date hereof, the principal Canadian federal income tax considerations generally applicable to a U.S. Holder who is not and has not been or deemed to be resident in Canada for purposes of the Income Tax Act (Canada) (the "ITA") at any time while such U.S. Holder holds the common stock, is a resident of the U.S. for purposes of the Canada-United States Income Tax Convention (1980), as amended (the "Convention"), and who, for purposes of the ITA, at all relevant times:


     Is the beneficial owner of the common stock;

     Holds the common stock as capital property;

     Does not have a “permanent establishment” or “fixed base” in Canada, as defined in the Convention;

     Does not use or hold (and is not deemed to use or hold) the common stock in carrying on a business in Canada; and

     Deals at arm’s length with us.

        

Special rules, which are not discussed below, may apply to “financial institutions” and “tax shelter” as defined in the ITA, and to non-resident insurers carrying on an insurance business in Canada and elsewhere.

        

This summary is based upon the current provisions of the ITA, the regulations thereunder (the "Regulations"), the Convention, all specific proposed amendments to the ITA or the Regulations announced by or on behalf of the Canadian Minister of Finance prior to the date hereof, and the company's understanding of the current published administrative practices of the Canada Revenue Agency. This summary does not otherwise take into account or anticipate any changes in law, whether by way of judicial, governmental or legislative decision or action, administrative practice nor any income tax laws or considerations of any province or territory of Canada or any jurisdiction other than Canada, which may differ from the Canadian federal income tax consequences described in this document.

        

The common stock will generally constitute capital property to a U.S. Holder unless such U.S. Holder holds such common stock in the course of carrying on a business of trading or dealing in securities or has acquired such common stock in a transaction or transactions considered to be an adventure in the nature of trade.

        

Under the Convention, dividends paid or credited, or deemed to be paid or credited, on the common stock to a U.S. Holder generally will be subject to Canadian withholding tax at the rate of 15% of the gross amount of those dividends or deemed dividends. If a U.S. Holder is a corporation and owns 10% or more of the company's voting stock, the rate is reduced from 15% to 5%.

        


Under the Convention, dividends paid to religious, scientific, literary, educational or charitable organizations or certain pension, retirement or employee benefit organizations that have complied with specified administrative procedures are exempt from the aforementioned Canadian withholding tax so long as such organization is resident in and exempt from tax in the U.S.

        

A U.S. Holder will only be subject to taxation in Canada under the ITA on capital gains realized by the U.S. Holder on a disposition or deemed disposition of the common stock if the common stock constitutes "taxable Canadian property" within the meaning of the ITA at the time of the disposition or deemed disposition and the U.S. Holder is not afforded relief under the Convention. In general, the common stock will not be "taxable Canadian property" to a U.S. Holder if, at the time of its disposition, it is listed on a stock exchange that is prescribed in the Regulations (which includes American Stock Exchange), unless:


·

at any time within the five-year period immediately preceding the disposition or deemed disposition, the U.S. Holder, persons not dealing at arm's length with the U.S. Holder, or the U.S. Holder together with such non-arm's length persons, owned or had an interest in or a right or option to acquire 25% or more of the issued shares of any class or series of our capital stock;

·

the U.S. Holder was formerly resident in Canada and, upon ceasing to be a Canadian resident, elected under the ITA to have the common stock deemed to be "taxable Canadian property; or

·

the U.S. Holder's common stock was acquired in a tax deferred exchange in consideration for property that was itself "taxable Canadian property."

       

If a U.S. Holder's common stock is "taxable Canadian property," subject to the availability of an exemption under the Convention, such U.S. Holder will recognize a capital gain (or a capital loss) for the taxation year during which the U.S. Holder disposes, or is deemed to have disposed of, the common stock. Such capital gain (or capital loss) will be equal to the amount by which the proceeds of disposition exceed (or are less than) the U.S. Holder's adjusted cost base of such common stock and any reasonable costs of making the disposition. One-half of any such capital gain (a "taxable capital gain") must be included in income in computing the U.S. Holder's income and one half of any such capital loss (an "allowable capital loss") is generally deductible by the U.S. Holder from taxable capital gains arising in the year of disposition. To the extent a U.S. Holder has insufficient taxable capital gains in the current taxation year against which to apply an allowable capital loss, the deficiency will constitute a net capital loss for the current taxation year and may generally be carried back to any of the three preceding taxation years or carried forward to any future taxation year, subject to certain detailed rules in the ITA in this regard.


This summary does not take into account any provincial, territorial or foreign tax considerations, which may differ significantly from those discussed herein.


This summary is of a general nature only and is not intended to be relied on as legal or tax advice or representations to any particular investor.  Consequently, potential investors are urged to seek independent tax advice in respect of the consequences to them of the acquisition of common stock having regard to their particular circumstances.

 (F)  DIVIDEND AND PAYING AGENTS

Not applicable

(G)  STATEMENT BY EXPERTS

Not applicable

(H)  DOCUMENTS ON DISPLAY

The documents concerning the Company referred to in this Annual Report may be inspected at the Company's office at 47 Avenue Road, Suite 200, Toronto, Ontario, Canada, M5R 2G3. The Company may be reached at (416) 860-0211. Documents filed with the Securities and Exchange Commission ("SEC") may also be read and copied at the SEC's public reference room at Room 1024, Judiciary Plaza Building, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms.

The Company is subject to reporting requirements as a “reporting issuer” under applicable securities legislation in Canada and as a “foreign private issuer” under the Securities Exchange Act of 1934 (the “Exchange Act”). As a result, we must file periodic reports and other information with the Canadian securities regulatory authorities and the Securities and Exchange Commission.


A copy of this Annual Information Form/Form 20-F Annual Report and certain other documents referred to in this Annual Report and other documents filed by us may be retrieved from the system for electronic document analysis and retrieval (“SEDAR”) system maintained by the Canadian securities regulatory authorities at www.sedar.ca or from the Securities and Exchange Commission electronic data gathering, analysis and retrieval system(“EDGAR”) at www.sec.gov/edgar .

(I)  SUBSIDIARY INFORMATION

The documents concerning the Company’s subsidiaries referred to in this Annual Report may be inspected at the Company's office at 47 Avenue Road, Suite 200, Toronto, Ontario, Canada, M5R 2G3.

ITEM 11 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company holds no material financial instruments.

The Company has no debt instruments subject to interest payments, sales contracts, swaps, derivatives, or forward agreements or contracts, or inventory.

The Company has no currency or commodity contracts, and the Company does not trade in such instruments.

The Company periodically accesses the capital markets with the issuance of new shares to fund operating expenses and new projects, and the Company does not maintain significant cash reserves over periods of time that could be materially affected by fluctuations in interest rates or foreign exchange rates.

ITEM 12 – DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not required since this is an annual report.

PART II


ITEM 13 – DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14 – MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

No modifications or qualifications have been made to the instruments defining the rights of the holders of our Common Shares and no material amount of assets securing our securities has been withdrawn or substituted by us or anyone else (other than in the ordinary course of business).


ITEM 15   CONTROLS AND PROCEDURES

    A.    Evaluation of Disclosure Controls and Procedures

The Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective in timely alerting them to the material information relating to the Company (or the Company's consolidated subsidiaries) required to be included in the Company's periodic SEC filings.

    B.     Changes in Internal Controls

There were no significant changes made in the Company's internal controls or, to the Company's knowledge, in other factors that could significantly affect these controls subsequent to the date of their evaluation.

ITEM 16   (A)   AUDIT COMMITTEE FINANCIAL EXPERTS

As at the Company’s financial year ended June 30, 2005, the audit committee consisted of two directors, one of whom, Mr. John Robinson would be determined as a financial expert, as that term is defined under Section 407 of the Sarbanes-Oxley Act of 2002. Mr. Robinson’s background is described under Item 6(A) Directors and senior management.




I TEM 16 (B)   CODE OF ETHICS


We have adopted a Code of Ethics, which applies to all employees, consultants, officers and directors.


ITEM 16  (C)

PRINCIPAL ACCOUNTANT’S FEES AND SERVICES

The following outlines the expenditures for accounting fees for the last two fiscal periods ended:



 

June 30 2005

 

June 30 2004

 

 

 

 

 

 

Audit Fees (1)

9,680

 

10,435

 

Audit Related Fees

-

 

-

 

Tax Fees

--

 

-

 

All Other Fees (2)

-

 

5930

 


     1.  Audit fee for the fiscal year 2005 has not yet been agreed.  The amount shown is the management’s estimate.  

     Audit fee for 2004 included fee of $4,435 for fiscal 2003 net of accrual made in the fiscal 2003 and accrual of $6,000 for the fiscal 2004.

     2.  Other fees in 2004 related to the services rendered in connection with opinions rendered for fiscal years 2001 and 2002 and reviews carried out in respect of various filings with SEC.


Under our existing policies, the audit committee must approve all audit and non-audit related services provided by the auditors.


ITEM 16 (D)

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT   COMMITTEES


The information referred to in this section is not required as to the fiscal year ended June 30, 2005, which is the period covered by this Annual Report on Form 20-F.


ITEM 16 (E)

 PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS


The information referred to in this section is not required as to the fiscal year ended June 30, 2005, which is the period covered by this Annual Report on Form 20-F.



PART III

ITEM 17 – FINANCIAL STATEMENTS

See the Financial Statements and Exhibits listed in Item 19 hereof and filed as part of this Annual Report.  These financial statements were prepared in accordance with Canadian GAAP and are expressed in Canadian dollars.  Such financial statements have been reconciled to U.S. GAAP (see Note 13 therein).  For a history of exchange rates in effect for Canadian dollars as against U.S. dollars, see Item 3(A) Exchange Rates of this Annual Report.

ITEM 18 – FINANCIAL STATEMENTS

Not applicable.


ITEM 19 -- EXHIBITS


(a)

Financial Statements



Description of Document

Page No.

Cover Sheet

F-1

Independent Auditor’s Report dated October 20, 2005

F-2

Comments by Auditors for US Readers on Canada-US

Reporting Differences dated October 20, 2005

Consolidated Balance Sheets as at June30, 2005 and 2004

F-3


F-4

Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2005, 2004 and 2003

F-5

Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2005, 2004, and 2003

F-6

Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended June 30, 2005, 2004, and 2003

F-7

Notes to the Financial Statements

F-8


(b)

Exhibits

The following documents are filed as part of this Annual Report on Form 20-F

    

1.1

Articles of Incorporation of the Company – Incorporated herein by reference to Exhibit 1.1 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.2

By-Laws of the Company – Incorporated herein by reference to Exhibit 1.2 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004



  


   

1.3

Certificate of name change from Minedel Mining & Development Company Limited to Minedel Mines Limited – Incorporated herein by reference to Exhibit 1.3 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.4

Certificate of name change from Minedel Mines Limited to Havelock Entergy & Resources Inc. – Incorporated herein by reference to Exhibit 1.4 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.5

Certificate of name change from Havelock Energy & Resources Inc. to Municipal Ticket Corporation – Incorporated herein by reference to Exhibit 1.5 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.6

Certificate of name change from Municipal Ticket Corporation to I.D. Investment Inc. – Incorporated herein by reference to Exhibit 1.6 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.7

Certificate of amalgamation to Biolink Corporation – Incorporated herein by reference to Exhibit 1.7 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.8

Certificate of name change from Biolink Corp. to First Empire Entertainment.com Inc. – Incorporated herein by reference to Exhibit 1.8 to the Company’s Registration Statement on Form 20-F filed on March 12, 2004

1.9

Certificate of name change from First Empire Entertainment.com Inc. to First Empire Corporation Inc. – Incorporated herein by reference to Exhibit 19 to the Company’s Annual Report on Form 20-F filed on March 12, 2004

1.10

Certificate of name change from First Empire Corporation Inc. to Noble House Entertainment Inc. dated November 4, 2004

1.11

Articles of Amendment dated November 19, 2004 consolidating the common shares of the Company on the basis of one new common share in exchange for every two old common shares

1.12

Certificate of name change from First Empire Music Corp. to Noble House Film & Television Inc. dated January 21, 2005

2.(a).

Specimen Common Share certificate



    













    

4.(b)i

Expense Sharing Agreement dated April 1, 2002 with Current Capital Corp. Incorporated herein by reference to Exhibit 4.(b)i.2 to the Company’s annual report on Form 20-F for the fiscal year 2001 filed on March 12, 2004

4.(b)iii

Offer to Purchase dated November 30, 2004 regarding acquisition of film properties from Noble House Production Inc.

4.(c)i

Consulting agreement dated December 1, 2004 with Damian Lee

4.(c)ii

Consulting Agreement dated February 1, 2005 with Lowell Conn

12

The certificates required by Rule 13(a) – 14(a) (17 CFR 240.13(a)-14(a)) or Rule 15(d)-14(a) (17 CFR 240.15(d)-14(a))

13.a

The Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





SIGNATURES


The Company hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this Annual Report on its behalf.


Dated at Toronto, Ontario, Canada, this November 16, 2005.



NOBLE HOUSE ENTERTAINMENT INC.


Per:  (signed) Damian Lee

Title:  Chairman and CEO























3





 
















































Endnotes





4



EXHIBIT 2.(a) SPECIMEN COMMON SHARE CERTIFICATE


VOID VOID VOID


NOBLE HOUSE ENTERTAINMENT INC.

INCORPORATED UNDER THE LAWS OF THE PROVINCE OF ONTARIO

NUMBER GS92

SHARES*1********

CUSIP:  655046100

ISIN:  CA6550461009


THIS CERTIFIES THAT

**SPECIMEN**

is the registered holder of

**one**

FULLY PAID AND NON-ASSESSABLE SHARES WITHOUT PAR VALUE IN THE CAPITAL OF NOBLE HOUSE ENTERTAINMENT INC.

transferable only on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this certificate properly endorsed.


This certificate is not valid until countersigned and registered by the Transfer Agents and Registrars of the Corporation.


IN WITNESS WHEREOF the Corporation has caused this Certificate to be signed by its duly authorized officers.


/s/Kamlesh Shah

Kamlesh Shah

Chief Financial Officer


DATED:   2004/04/12

COUNTERSIGNED AND REGISTERED By Equity Transfer Services Inc. Toronto, Ontario, Canada, Transfer Agent and Registrar


By:   /s/Authorized Officer

AUTHORIZED OFFICER


The Shares represented by this Certificate are transferable at the offices of Equity Transfer Services Inc., Toronto, Ontario, Canada


SECURITY INSTRUCTIONS ON REVERSE

VOIR LES INSTRUCTIONS DE SECURITE AU VERSO


Test111-375910-19816659549 341445

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto


PLEASE INSERT SOCIAL INSURANCE NUMBER OF TRANSFEREE


(Name and address of transferee)


________shares registered in the name of the undersigned on the books of the Corporation named on the face of this certificate and represented hereby, and irrevocably constitutes and appoints

________the attorney of the undersigned to transfer the said shares on the register of transfers and books of the corporation with full power of substitution hereunder.


Dated:

Signature:

Guaranteed by:


NOTICE:  THE SIGNATURE TO THIS ASSIGNEMENT MUST CORRESPOND IN EVERY PARTICULAR WITH THE SURNAME AND FIRST NAMES(S) OR INITIALS SHOWN ON THE FACE OF THIS CERTIFICATE AND MUST BE GUARANTEED BY A BANK, TRUST COMPANY OR A MEMBER OF A RECOGNIZED STOCK EXCHANGE


RESTRICTIONS

[BLANK]


SECURITY INSTRUCTIONS – INSTRUCTIONS DE SECURITE


THIS IS WATERMARKED PAPER, DO NOT ACCEPT WITHOUT NOTING WATERMARK.  HOLD TO LIGHT TO VERIFY WATERMARK.

PAPIER FILIGRANE, NE PAS ACCEPTER SANS VERIFIER LA PRESENCE DU FILIGRANE.  POUR CE FAIRE, PLACER A LA LUMIERE.





EXHIBIT 4.(b)iii OFFER TO PURCHASE DATED NOVEMBER 30, 2004 REGARDING ACQUISITION OF FILM PROPERTIES FROM NOBLE HOUSE PRODUCTION INC.


OFFER TO PURCHASE


NAME:   Noble House Entertainment Inc. (previously known as First Empire Corporation Inc.)


of the city/town of Toronto in the province of Ontario (as Purchaser)


HEREBY AGREES TO AND WITH Noble House Productions, Inc. (as Vendor) to purchase certain assets of the vendor comprising scripts and related intellectual properties of ten movies and distribution contracts relating to another six movies as detailed in the Schedule 1 (the “Assets”) as reviewed and approved by the Purchaser, at the price or sum of three hundred and fifty thousand dollars ($350,000) as follows:


Three and a half (3.5) million common shares at $0.10 per common share of the Purchaser and,


Three and a half (3.5) million warrant convertible within two years of the closing date, into equal number of common shares of the Purchaser at a price of $1 per warrant.  Warrants shall be construed to have no intrinsic value at the time of their issuance.


Common shares to be issued under this Agreement will be restricted in terms of their transferability and salability for the five years from the closing date, unless otherwise agreed by the vendor.


The vendor represents and warrants that it is the owner of the assets herein agreed to be purchased, and that the same are free and clear of all liens and encumbrances whatsoever.


The parties agree to jointly elect pursuant to Section 167(1) of the Excise Tax Act with respect to Goods and Services Tax.


The sale shall be completed on the 30 th day of November 2004 on which date possession of the assets described in Schedule 1 is to be given to the Purchaser.


The Bill of Sale or other transfer document to be prepared at the Vendor’s expenses, and the Promissory Note or other security document, if any, to be prepared at the expense of the Purchaser, and each party to pay the costs of registration of its own documents.


This Offer when accepted shall constitute a binding contract of purchase and sale, and time in all respects shall be of the essence of this Agreement.


The parties hereto agree that there is no representation, warranty collateral agreement or condition affecting this Agreement or stipulated hereby other than as expressed herein in writing.


All goods, chattels and contents of the above-described business shall be and remain at the risk of the Vendor until completion of sale.


DATED at Toronto this 30 th day of November, 2004.


SIGNED, SEALED, AND DELIVERED in the presence of


NOBLE HOUSE ENTERTAINMENT INC.



/s/Kam Shah

Kam Shah

Chief Executive Officer


The undersigned Vendor hereby accepts the foregoing offer.


DATED at Toronto this 30 th day of November, 2004.


IN WITNESS WHEREOF I have hereunto set my hand and seal.


SIGNED, SEALED, AND DELIVERED in the presence of


NOBLE HOUSE PRODUCTIONS INC.



/s/Damian Lee

Damian Lee

President



EXHBIT 4.(c)i CONSULTING AGREEMENT DATED DECEMBER 1, 2004 WITH DAMIAN LEE


CONSULTING AGREEMENT


THIS AGREEMENT made as of the 1 st Day of December 2004.


BETWEEN:


Noble House Entertainment Inc. (the “Company”)


OF THE FIRST PART


-and-


Damian Lee (the “Consultant”)


OF THE SECOND PART


WHEREAS the consultant is an experienced movie producer, director and writer and has information and contacts in motion picture and television industry.


WHEREAS the parties have agreed that the Consultant shall be engaged by the Company upon and subject to the terms and conditions herein.


NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and mutual covenants herein contained, the parties hereto respectively covenant and agree as follows:


I.  THE CONSULTING TERMS


The Company hereby retains the services of the Consultant to act as Chief Executive Officer of Noble House Entertainment Inc. and President & CEO of a subsidiary to be set up and known as Noble House Production Inc. and to achieve various milestones according to the details outlined in the Offer to Purchase dated November 30, 2004 and exhibits thereto, upon the following terms and conditions which the Consultant hereby accepts.


II.  TERM


The term of this agreement shall start from the date of this agreement and run for five years and renewed automatically for similar duration, unless terminated earlier as per Article V of the Agreement.


III.  DUTIES


1.  Reporting responsibilities


The Consultant shall report directly to the Board of Directors.


2.  Disclosure


The Consultant shall not, either during the continuance of the Consultant’s contract or at any time thereafter, disclose the private affairs or secrets of the Company to any person other than properly and duly designated officers of the Company and shall not use for the Consultant’s own purposes or for any purpose other than that of the Company, any information he may acquire in relation to the business and affairs of the Company.  This obligation shall survive the expiry or termination of this agreement.


3.  Non-competition


The Consultant agrees that during the terms of the Consultant’s agreement with the Company and for a period of two years after the date of the termination thereof, the Consultant will not directly or indirectly, whether as a shareholder, advisor, employee, consultant or otherwise participate with or be interested in any business within North America which competes with the business of the Company, unless otherwise agreed in writing with the Company.


4.  Intellectual and Industrial Property


The Consultant shall promptly disclose to the Company any development containing, related to, or based upon any information obtained during the continuance of this contract, (the confidential information) including without limiting the generality of the foregoing, any inventions, discoveries, improvements, addition, applications or works with respect to any entertainment projects, which are made by or on behalf of the Consultant or of which the Consultant becomes aware during the performance of the Consultant’s duties.  All such developments from their conception shall be deemed to be the property of the Company.


The Consultant hereby assigns the Company any rights, which the Consultant may have now or in the future in any such developments in regard to the confidential information and in any patents, industrial designs, copyrights, trademarks, or other intellectual property related thereto, as more fully described in the Offer to Purchase dated November 30, 2004.


The Consultant acknowledges that all right, title and interest in and to all confidential information and in and to any patents, industrial designs, copyrights, trademarks, or other intellectual property related thereto, as more fully described in the Offer to Purchase dated November 30, 2004.


The Consultant acknowledges that all right, title and interest in and to all confidential information and in and to any patents, industrial designs, copyrights, trademarks or other intellectual property related thereto vests in the Company.  The Consultant acknowledges the validity of any patents, industrial designs, copyrights and trademarks related to the confidential information, which may now or in the future be owned by the Company.


Forthwith after the Consultant has completed use of the confidential information or forthwith upon demand of the Company, the Consultant shall deliver to the Company all documents and other materials (including without limiting the generality of the foregoing, any drawings, notes, data, electronic, or otherwise, reports, photographs, negatives, audio video records, equipment, models, samples and the like), which may be in possession of or under the control of the Consultant relating to or based upon any confidential information.  The Consultant acknowledges that the Company is the owner of any and all such documents and materials.


The Consultant’s obligation shall continue before and after he has used the confidential information and/or the Company ceases using his services and shall continue until such time as the Consultant is expressly released therefrom by the Company in writing.  The obligation of the Consultant shall be binding on the assigns, executors, administrators or other legal representatives of the Consultant.


The Consultant acknowledges that any breach by him of this agreement shall cause irreparable damage to the Company and that any breach shall entitle the Company to seek immediate injunctive relief from a court of competent jurisdiction.


IV.  FINANCIAL TERMS


The  Consultant’s compensation package will comprise the following:


A.  Cash fee of CDN$6,000 per month for the period ending December 31, 2005.  Cash fee for the period commencing on January 1, 2006 will increase to CDN $8,000 per month subject to successful achievement of the milestones detailed in Schedule 2 of the Offer to Purchase Agreement dated November 30, 2004.  The compensation details will be formally approved by the Compensation committee to be appointed by the Board.


B.  Reimbursement of all business expenses approved by the Board.  For this purpose, all business expenses over CDN$500 should be pre-approved by the Board.


C.  Production fees and incentives, to be paid out on each individual project produced by Noble House Entertainment, commensurate with the role and responsibility fulfilled on the Production according to industry standard wages.  These fees will be paid out from the Production Budget as well as Production Revenue.  Should the Consultant re-invest fees into the production, the re-investment will be securitized through the assignment of individual Territories equal to the total amount re-invested into the production.


V.  TERMINATION OF CONSULTING CONTRACT


Notwithstanding the above, the Company may terminate the agreement immediately if the Consultant:


Is in breach of any of the provisions of this agreement.  Or,


Attempts to assign or cede any interest in this agreement contrary to the terms hereof, without the prior consent of the Company.


Is in breach of any representations or commitments detailed in the Offer to Purchase dated November 30, 2004.


In the event of the Consultant’s failure to comply with the terms of this Contract, the shares issued to the Consultant, under the Offer to Purchase Agreement dated November 30, 2004, will be canceled to the extent they remain “unvested” on the date of such failure, as defined in Schedule 2 of the said Agreement.


VI.  NOTICE


Any notice required or contemplated by this Agreement shall be in writing, and shall be sufficiently given if delivered personally or sent by prepaid registered mail to the Consultant at the Consultant’s last known place of abode:


181 Queen Street East

Toronto, ON M5A 1S2


or to the Company to:


47 Avenue Road, Suite 200

Toronto, Ontario M5R 2G3


VII.  SEVERABILITY


The parties agree that in the event that any provision, clause, article, or attachment herein, or part thereof, which form part of this Agreement, are deemed void, invalid, or unenforceable by a court of competent jurisdiction, the remaining provisions, clauses, articles, attachments or parts thereof shall be and remain in full force and effect.


VIII.  LAW OF ONTARIO


This agreement shall be governed by and construed in accordance with the laws of the Province of ONTARIO.


IX.  NOT ASSIGNABLE


Neither this Agreement nor any rights or obligations hereof shall be assignable by the Consultant without the prior written consent of the Company.  Subject thereto, this Agreement shall ensure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators and assigns.


IN WITNESS WHEREOF , the parties hereto have hereunder set their hands and seals.


SIGNED, SEALED AND DELIVERED


In the presence of:


Noble House Entertainment Inc.

Per:


/s/:  Kam Shah

Kam Shah

Authorized Signing Officer


WITNESS:


/s/:  Damian Lee

Damian Lee

Consultant



EXHIBIT 4(c)ii CONSULTING AGREEMENT DATED FEBRUARY 1, 2005 WITH LOWELL CONN


CONSULTING AGREEMENT


THIS AGREEMENT made as of the 1 st Day of February 2005.


BETWEEN:


Noble House Film & Television Inc. (the “Company”)


OF THE FIRST PART


-and-


Lowell Conn (the “Consultant”)


OF THE SECOND PART


WHEREAS the consultant is an experienced movie producer, director and writer and has information and contacts in motion picture and television industry.


WHEREAS the parties have agreed that the Consultant shall be engaged by the Company upon and subject to the terms and conditions herein.


NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and mutual covenants herein contained, the parties hereto respectively covenant and agree as follows:


I.  THE CONSULTING TERMS


The Company hereby retains the services of the Consultant to act as Executive Vice President of Noble House Film & Television.


II.  TERMS


The term of this agreement shall start from the date of this agreement and run for five years and renewed automatically for similar duration, unless terminated earlier as per Article V of the Agreement.


III.  DUTIES


1.  Reporting Responsibilities


The Consultant shall report directly to the President, Chief Financial Officer and the Board of Directors.


2.  Disclosure


The Consultant shall not, either during the continuance of the Consultant’s contract or at any time thereafter, disclose the private affairs or secrets of the Company to any person other than properly and duly designated officers of the Company and shall not use for the Consultant’s own purposes or for any purpose other than that of the Company, any information he may acquire in relation to the business and affairs of the Company.  This obligation shall survive the expiry or termination of this agreement.


3.  Non-competition


The Consultant agrees that during the terms of the Consultant’s agreement with the Company and for a period of two years after the date of the termination thereof, the Consultant will not directly or indirectly, whether as a shareholder, advisor, employee, consultant or otherwise participate with or be interested in any business within North America which competes with the business of the Company, unless otherwise agreed in writing with the Company.


4.  Intellectual and Industrial Property


The Consultant shall promptly disclose to the Company any development containing, related to, or based upon any information obtained during the continuance of this contract, (the confidential information) including without limiting the generality of the foregoing, any inventions, discoveries, improvements, addition, applications or works with respect to any entertainment projects, which are made by or on behalf of the Consultant or of which the Consultant becomes aware during the performance of the Consultant’s duties.  All such developments from their conception shall be deemed to be the property of the Company.


The Consultant hereby assigns the Company any rights, which the Consultant may have now or in the future in any such developments in regard to the confidential information and in any patents, industrial designs, copyrights, trademarks, or other intellectual property related thereto, as more fully described in the Offer to Purchase dated November 30, 2004.


The Consultant acknowledges that all right, title, and interest in and to all confidential information and in and to any patents, industrial designs, copyrights, trademarks, or other intellectual property related thereto vests in the Company.  The Consultant acknowledges that he does not have any right, title or interest in it.  The Consultant acknowledges the validity of any patents, industrial designs, copyrights and trademarks related to the confidential information, which may now or in the future be owned by the Company.


Forthwith after the Consultant has completed use of the confidential information or forthwith upon demand of the Company, the Consultant shall deliver to the Company all documents and other materials (including without limiting the generality of the foregoing, any drawings, notes, data, electronic or otherwise, reports, photographs, negatives, audio video records, equipment, models, samples and the like), which may be in possession of or under the control of the Consultant relating to or based upon any confidential information.  The Consultant acknowledges that the Company is the owner of any and all such documents and materials.


The Consultants obligation shall continue before and after he has used the confidential information and/or the Company ceases using his services and shall continue until such time as the Consultant is expressly released therefrom by the Company in writing.  The obligation of the Consultant shall be binding on the assigns, executors, administrators or other legal representatives of the Consultant.


The Consultant acknowledges that any breach by him of this agreement shall cause irreparable damage to the Company and that any breach shall entitle the Company to seek immediate injunctive relief from a court of competent jurisdiction.


IV.  FINANCIAL TERMS


The Consultant’s compensation package will comprise the following:


A.  Cash fee of CDN$4,350 per month for the period ending December 31, 2005.  Cash fee effective January 1, 2006 and subsequent periods will be decided by the Board of Directors of Noble House Entertainment Inc. based on the performance and recommendation of the CEO.


B.  Reimbursement of all business expenses approved by the Board.  For this purpose, all business expenses over CDN$500 should be pre-approved by the Board.


C.  Production fees and incentives, to be paid out on each individual project produced by Noble House Entertainments and Noble House Film & Television, commensurate with the role and responsibility fulfilled on the Production according to industry standard wages.  These fees will be paid out from the Production Budget as well as Production Revenue.  Should the consultant re-invest fees into the production, the re-investment will be securities through the assignment of individual Territories equal to the total amount re-invested into the production.


V.  TERMINATION OF CONSULTING CONTRACT


Notwithstanding the above, the Company may terminate the agreement immediately if the Consultant:


Is in breach of any of the provisions of this agreement.  Or,


Attempts to assign or cede any interest in this agreement contrary to the terms hereof, without the prior consent of the Company.


Is in breach of any representation or commitments detailed in the offer to Purchase dated November 30, 2004.


VI.  NOTICE


Any notice required or contemplated by this Agreement shall be in writing and shall be sufficiently given if delivered personally or sent by pre-paid registered mail to the Consultant at the Consultant’s last known place of abode:


131 Thornway Avenue

Vaughn, Ontario L4J 7Z3


Or to the Company to:


47 Avenue Road, Suite 200

Toronto, ON M5R 2G3


VII.  SEVERABILITY


The parties agree that in the event that any provision, clause, article, or attachment herein, or part thereof, which form part of this Agreement, are deemed void, invalid, or unenforceable by a court of competent jurisdiction, the remaining provisions, clauses, articles, attachments or parts thereof shall be and remain in full force and effect.


VIII.  LAW OF ONTARIO


This agreement shall be governed by and construed in accordance with the laws of the Province of ONTARIO.


IX.  NOT ASSIGNABLE


Neither this Agreement nor any rights or obligations hereof shall be assignable by the Consultant without the prior written consent of the Company.  Subject thereto, this Agreement shall ensure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, and assigns.






IN WITNESS WHEREOF , the parties hereto have hereunder set their hands and seals.


SIGNED, SEALED AND DELIVERED


In the presence of:


Noble House Film & Television Inc.

Per:


/s/:  Damian Lee

President

Authorized Signing Officer


WITNESS:


/s/:  Lowell Conn

Lowell Conn

Consultant



EXHIBIT 12 CERTIFICATES REQUIRED BY RULE 13(A)-14(A)(17CFR 240.13(A)-14(A)) OR RULE 15(D)-14(A)(17CFR 240.15(D)-14(A))


CERTIFICATION


1.  I have reviewed this annual report on Form 20-F of Noble House Entertainment Inc.


2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;


4.  The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e)) and have:


(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;


(b)  Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(c)  Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and


5.  The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent functions):


(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and


(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.


Date:  November 16, 2005


/s/Damian Lee

Damian Lee

Chief Executive Officer










EXHIBIT 12 CERTIFICATES REQUIRED BY RULE 13(A)-14(A)(17CFR 240.13(A)-14(A)) OR RULE 15(D)-14(A)(17CFR 240.15(D)-14(A))


CERTIFICATION


I, Kam Shah, certify that:


1.  I have reviewed this annual report on Form 20-F of Noble House Entertainment Inc.


2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respect the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;


4.  The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13(a)-15(e)) and have:


(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;


(b)  Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(c)  Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and


5.  The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent functions):


(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and


(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.


Date:  November 16, 2005


/s/Kam Shah

Kam Shah

Chief Financial Officer




EXHIBIT 13.A THE CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the annual report on Form 20-F of Noble House Entertainment Inc., for the year ended June 30, 2005, as filed with the Securities and Exchange Commission, I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


1.  The annual report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


2.  The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the registrant.


Date:  November 16, 2005


/s/Damian Lee

Damian Lee

Chief Executive Officer


A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.






























EXHIBIT 13.A THE CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the annual report on Form 20-F of Noble House Entertainment Inc., for the year ended June 30, 2005, as filed with the Securities and Exchange Commission, I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


1.  The annual report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


2.  The information contained in the annual report fairly presents, in all material respects, the financial condition and results of operations of the registrant.


Date:  November 16, 2005


/s/Kam Shah

Kam Shah

Chief Financial Officer


A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.




EXHIBIT 1.10 CERTIFICATE OF NAME CHANGE FROM FIRST EMPIRE CORPORATION INC. TO NOBLE HOUSE ENTERTAINMENT INC. DATED NOVEMBER 4, 2004


For Ministry Use Only

Ontario Ministry of Consumer and Business Services

CERTIFICATE

This is to certify that these articles are effective on

NOVEMBER 04 NOVEMBRE, 2004

/s/Beverly Hawton

Beverly Hawton

Director, Business Corporations Act


Ontario Corporation Number

1228120


Form 3 Business Corporations Act


ARTICLES OF AMENDMENT


1.  The name of the corporation is:  (Set out in BLOCK CAPITAL LETTERS)


FIRST EMPIRE CORPORATION INC.


2.  The name of the corporation is changed to (if applicable):  (Set out in BLOCK CAPITAL LETTERS)


NOBLE HOUSE ENTERTAINMENT INC.


3.  Date of incorporation/amalgamation:


1997-03-18

(Year, Month, Day)


4.   Complete only if there is a change in the number of directors or the minimum/maximum number of directors.


Number of directors is/are:  or  minimum and maximum number of directors is/are:


Number  or  minimum and maximum


5.  The articles of the corporation are amended as follows:


(A)  IT IS RESOLVED THAT THE NAME OF THE CORPORATION BE CHANGED TO NOBLE HOUSE ENTERTAINMENT INC.


6.  The amendment has been duly authorized as required by sections 168 and 170 (as applicable) of the Business Corporations Act.


7.  The resolution authorizing the amendment was approved by the shareholders/directors (as applicable) of the corporation on


2004-NOV-01

(Year, Month, Day)


These articles are signed in duplicate.


FIRST EMPIRE CORPORATION INC.

(Name of Corporation)(If the name is to be changed by these articles set our current name)


By:   /s/Kam Shah

Kam Shah

CEO and CFO



EXHIBIT 1.11 ARTICLES OF AMENDEMENT DATED NOVEMBER 19, 2004 CONSOLIDATING THE COMMON SHARES OF THE COMPANY ON THE BASIS OF ONE NEW COMMON SHARE IN EXCHANGE FOR EVERY TWO OLD COMMON SHARES


For Ministry Use Only

Ontario Ministry of Consumer and Business Services

CERTIFICATE

This is to certify that these articles are effective on

NOVEMBER 19 NOVEMBRE, 2004

/s/Beverly Hawton

Beverly Hawton

Director, Business Corporations Act


Ontario Corporation Number

1228120


Form 3 Business Corporations Act


ARTICLES OF AMENDMENT


1.  The name of the corporation is:  (Set out in BLOCK CAPITAL LETTERS)


NOBLE HOUSE ENTERTAINMENT INC.


2.  The name of the corporation is changed to (if applicable):  (Set out in BLOCK CAPITAL LETTERS)


3.  Date of incorporation/amalgamation:


1997-03-18

(Year, Month, Day)


4.   Complete only if there is a change in the number of directors or the minimum/maximum number of directors.


Number of directors is/are:  or  minimum and maximum number of directors is/are:


Number  or  minimum and maximum


5.  The articles of the corporation are amended as follows:


(A)  IT IS RESOLVED THAT THE COMMON SHARES OF THE CORPORATION BE CONSOLIDATED SO THAT 1 (ONE) NEW SHARE BE ISSUED IN EXCHANGE FOR EVERY 2 (TWO) OLD SHARES IN THE CAPITAL OF THE CORPORATION.


6.  The amendment has been duly authorized as required by sections 168 and 170 (as applicable) of the Business Corporations Act.


7.  The resolution authorizing the amendment was approved by the shareholders/directors (as applicable) of the corporation on


2004-NOV-15

(Year, Month, Day)


These articles are signed in duplicate.


NOBLE HOUSE ENTERTAINMENT INC.

(Name of Corporation)(If the name is to be changed by these articles set our current name)


By:   /s/Kam Shah

Kam Shah

CEO and CFO



EXHIBIT 1.12 CERTIFICATE OF NAME CHANGE FROM FIRST EMPIRE MUSIC CORP. TO NOBLE HOUSE FILM & TELEVISION INC. DATED JANUARY 21, 2005


For Ministry Use Only

Ontario Ministry of Consumer and Business Services

CERTIFICATE

This is to certify that these articles are effective on

JANUARY 21 JANVIER, 2005

/s/Beverly Hawton

Beverly Hawton

Director, Business Corporations Act


Ontario Corporation Number

1573905


Form 3 Business Corporations Act


ARTICLES OF AMENDMENT


1.  The name of the corporation is:  (Set out in BLOCK CAPITAL LETTERS)


FIRST EMPIRE MUSIC CORP.


2.  The name of the corporation is changed to (if applicable):  (Set out in BLOCK CAPITAL LETTERS)


NOBLE HOUSE FILM & TELEVISION INC.


3.  Date of incorporation/amalgamation:


2003-05-21

(Year, Month, Day)


4.   Complete only if there is a change in the number of directors or the minimum/maximum number of directors.


Number of directors is/are:  or  minimum and maximum number of directors is/are:


Number  or  minimum and maximum


5.  The articles of the corporation are amended as follows:


IT IS RESOLVED THAT THE CORPORATION’S NAME BE CHANGED TO NOBLE HOUSE FILM & TELEVISION INC.


6.  The amendment has been duly authorized as required by sections 168 and 170 (as applicable) of the Business Corporations Act.


7.  The resolution authorizing the amendment was approved by the shareholders/directors (as applicable) of the corporation on


2005-Jan-20

(Year, Month, Day)


These articles are signed in duplicate.


FIRST EMPIRE MUSIC CORP.

(Name of Corporation)(If the name is to be changed by these articles set our current name)


By:   /s/Kam Shah

Kam Shah

CFO














Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)


Consolidated Financial Statements


For the Years Ended June 30, 2005 and 2004


(Canadian Dollars)



1




















INDEX



   

Page

Auditors’ Report

 

1

Comments by auditors for U.S. readers on Canada-U.S. reporting differences

 

2

Consolidated Balance Sheets

 

3

Consolidated Statement of Operations

 

4

Consolidated Statement of Cash Flows

 

5

Consolidated Statement of Shareholders’ Deficit

 

6

Notes to Consolidated Financial Statements

 

7-19



2







3








SLOAN PARTNERS LLP




AUDITORS’ REPORT

 


To the Shareholders of

Noble House Entertainment Inc.

 

We have audited the consolidated balance sheets of Noble House Entertainment Inc. as at June 30, 2005, and 2004, and the consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended June 30, 2005. These consolidated 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 Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (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 materials respects, the financial position of the company as at June 30, 2005 and 2004, and the results of its operations and its cash flows for the for each of the three years in the period ended June 30, 2005 in accordance with Canadian generally accepted accounting principles.






October 20, 2005


Thornhill, Ontario


/s/Sloan Partners LLP

Sloan Partners LLP

Chartered Accountants



4








SLOAN PARTNERS LLP




COMMENTS BY AUDITORS FOR U.S READERS ON CANADA - U.S. REPORTING DIFFERENCES

 


In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the consolidated financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern, such as those described in Note 2 to the consolidated financial statements.


The opinion on page 1 is expressed in accordance with Canadian reporting standards, which do not permit a reference to such events and conditions in the auditors' report when these are adequately disclosed in the consolidated financial statements.






October 20, 2005


Thornhill, Ontario


/s/Sloan Partners LLP

Sloan Partners LLP

Chartered Accountants



5



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Consolidated Balance Sheets

(Canadian Dollars)



As at June 30

Note

2005

2004

Assets

Current

    Bank

 $1,629 

 $245 

    Accounts receivable and prepayments

5,983 

2,622 

           

 7,612 

 2,867 

Investment in film and television programs

4

 232,500 

 -   

               
           

 $240,112 

 $2,867 

Liabilities

Current

    Accounts payable and accrued liabilities

 $46,877 

 $10,830 

    Note payable

5

 11,494 

 11,494 

    Advances from shareholders

6

 143,937 

 38,021 

           

 202,308 

 60,345 

Shareholders' Equity (Deficit)

Capital stock

7

 4,815,672 

 4,460,857 

Contributed surplus

 20,391 

 20,391 

Deficit

 (4,798,259)

 (4,538,726)

           

 37,804 

 (57,478)

           

 $240,112 

 $2,867 

               

Related Party Transactions (Note 10)

 



Approved by the Board                ”Damian Lee”  Director           ”Kam Shah” Director

                                                           (signed)                                      (signed)









The accompanying notes form an integral part of these financial statements.



6



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Consolidated Statements of Operations

(Canadian Dollars)



For the Years Ended June 30

Note

2005

2004

2003

Revenue

    Distribution income

 $5,031 

 $-   

 $-   

               

Expenses

    Amortization of investment in film

4

 117,500 

   

          and television programs

    Consulting

 76,095 

 64,840 

 22,541 

    Office and general

 27,061 

 9,953 

 5,245 

    Shareholders information

 20,122 

 3,142 

 (553)

    Promotion

 13,543 

 -   

 -   

    Professional fees

 9,680 

 26,309 

 5,989 

    Bank charges and interest

 563 

 207 

 292 

    Deferred development costs written off

 -   

 110,150 

 

    Scripts and lyrics written off

 -   

 -   

 75,000 

         

 264,564 

 214,601 

 108,514 

Net loss for year

 $(259,533)

 $(214,601)

 $(108,514)

Net loss per share

8

 $(0.04)

 $(0.06)

 $(0.06)

























The accompanying notes form an integral part of these financial statements.



7



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Consolidated Statements of Cash Flows

(Canadian Dollars)



For the Years Ended June 30

2005

2004

2003

Cash flows from operating activities

    Net loss for year

 $(259,533)

 $(214,601)

 $(108,514)

               

Items not affecting cash

    Amortization of investment in film and television programs

 117,500 

 -   

 -   

    Write-off of deferred development costs

 -   

 110,150 

 -   

    Write-off of scripts and lyrics

 -   

 -   

 75,000 

    Fees settled with common shares

 5,000 

 5,000 

 -   

Cash effect of changes in:

    Accounts receivable and prepayments

 (3,361)

 (1,234)

 (204)

    Accounts payable and accrued liabilities

 36,047 

 5,026 

 (2,395)

         

 (104,347)

 (95,659)

 (36,113)

Cash flows from investing activities

    Investment in Jenn Project

 -   

 (150)

 (50,000)

               

Cash flows from financing activities

    Net advances from shareholders

 105,916 

 60,863 

 36,136 

    Note payable

 -   

 (38,506)

 50,000 

    Shares cashed-out

 (185)

 (1,527)

 -   

    Warrants exercised

 -   

 75,000 

 -   

         

 105,731 

 95,830 

 86,136 

Increase in cash

 1,384 

 21 

 23 

Cash, beginning of year

 245 

 224 

 201 

Cash, end of year

 $1,629 

 $245 

 $224 

Supplemental disclosures

Non-cash investing and financing activities

    Conversion of  loan  to equity investment

 $-   

 $75,000 

 $101,435 

    Acquisition of film and television programs

 350,000 

 -   

 60,000 

         

 $350,000 

 $75,000 

 $161,435 


The accompanying notes form an integral part of these financial statements.




8



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Consolidated Statement of Shareholders’ Equity

(Canadian Dollars)



For the Years Ended June 30, 2005, 2004 and 2003

 

Number of Shares

Share Capital

Contributed surplus

Accumulated Deficit

Shareholders' Deficit

Balance June 30, 2002

 1,735,695 

 $4,145,949 

 $20,391 

 $(4,215,611)

 $(49,271)

Issued on conversion of debts

 550,000 

 101,435 

 -   

 -   

 101,435 

Issued on acquisition

 750,000 

 60,000 

 -   

 -   

 60,000 

Net loss

 -   

 -   

 -   

 (108,514)

 (108,514)

Balance June 30, 2003

 3,035,695 

 4,307,384 

 20,391 

 (4,324,125)

 3,650 

Buy-back of fractional shares

 (1,199)

 (1,527)

 -   

 -   

 (1,527)

Exercise of warrants

 750,000 

 75,000 

 -   

 -   

 75,000 

Issued in settlement of debts

 750,000 

 75,000 

 -   

 -   

 75,000 

Issued in settlement of fees

 50,000 

 5,000 

 -   

 -   

 5,000 

Net loss

 -   

 -   

 -   

 (214,601)

 (214,601)

Balance June 30, 2004

 4,584,496 

 4,460,857 

 20,391 

 (4,538,726)

 (57,478)

Buy-back of fractional shares

(619)

(185)

 -   

 -   

(185)

Issuance on acquisition of film and television programs

3,500,000 

350,000 

 -   

 -   

350,000 

Issued in settlement of fees

50,000 

5,000 

 -   

 -   

5,000 

Net loss

 -   

 -   

 -   

(259,533)

(259,533)

Balance June 30, 2005

8,133,877 

 $4,815,672 

 $20,391 

 $(4,798,259)

 $37,804 











The accompanying notes form an integral part of these financial statements.



9



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



     1. NATURE OF OPERATIONS


Noble House Entertainment Inc. (the “Company") is a fully integrated entertainment company engaged in the development, licensing, production and distribution of feature films, television series, television movies and non-fiction programming.


The Company changed its name from First Empire Corporation Inc. effective November 4, 2004.


The Company was incorporated in Ontario on March 18, 1997 the result of an amalgamation.  



2. GOING CONCERN


The Company’s new business strategy, which evolved in fiscal 2005, involves activities in the development and distribution of films and television series. The Company’s business involves a high degree of risk and uncertainties. Significant expenditures may be required to develop commercially viable film properties and establish distribution facilities. It is not possible to ensure that the current film properties in which the Company holds interests will result in profitable commercial operations.


The Company expects to selectively explore and develop a library of viable film and television programs through joint venture arrangements or otherwise. The scheduling and scale of such future activities will depend on results and market conditions.


The Company has experienced negative cash flows from operating activities since its inception. The Company will have to rely on the continuing support of its shareholders to secure adequate funds to meet its existing corporate, administrative and operational obligations in the coming year. If adequate funds are not available from the source noted above, then the Company may be required to raise additional financing through equity issuance, borrowings and/or sale of its assets. While the Company has been successful in the past in raising financing, there is no assurance that the Company will be able to raise the necessary funding to meet its obligations and may be unable to continue realizing its assets and discharging its liabilities in the normal course of business.


These consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and discharge its liabilities in other than the normal course of business.










10



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



     3.  SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


These consolidated financial statements are prepared in Canadian dollars in accordance with accounting principles generally accepted in Canada, which conform, in all material respects, with accounting principles generally accepted in the United States, except as disclosed in Note 13.


Principles of Consolidation


The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary – Noble House Film and Television Inc. (“NHFT”).


NHFT was incorporated on May 21, 2003 and changed its name from First Empire Music Corp. on January 21, 2005. NHFT holds titles to the film properties and distribution rights acquired and is in the business of licensing, developing, producing and distributing of films and television programs.


On July 5, 2004, the Company dissolved its wholly owned subsidiary, First Empire Entertainment Corp., which had been inactive since 2001.


All intercompany balances and transactions have been eliminated on consolidation.


Revenue Recognition


Revenue from the licensing of film and television programs is recognized when:

1.  the Company has persuasive evidence of a contractual arrangement;

2.  the production has been completed;

3.  the contractual delivery arrangements have been satisfied;

4.  the licensing period has commenced and the customer can begin its exploitation, exhibition or sale;

5.  the fee is fixed or determinable; and

6.  collection of proceeds is reasonably assured.

Revenue from the theatrical release of feature films is recognized at the time of exhibition based on the Company’s participation in box office receipts, provided that all of the foregoing conditions are met.


Cash payments received are recorded as deferred revenue until all the foregoing conditions of revenue recognition have been met.





11



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



 3. SIGNIFICANT ACCOUNTING POLICIES (continued)


Investment in Film and Television Programs


Investment in film and television programs includes the unamortized costs of film and television programs which have been produced by the Company or for which the Company has acquired distribution rights, libraries acquired as part of acquisitions of companies, and film and television programs in progress and in development.


For film and television programs produced by the Company, capitalized costs include all direct production and financing costs, capitalized interest and production overhead. For acquired film and television programs, these capitalized costs consist of minimum guarantee payments to acquire the distribution rights.


Costs of acquiring and producing film and television programs and of acquired libraries are amortized using the individual-film-forecast method, whereby these costs are amortized. Participation and residual costs are accrued in the proportion that the current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the film or television programs. Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release or from the date of delivery of the first episode for episodic television series. For titles included in acquired libraries, ultimate revenue includes estimates over a period not to exceed twenty years following the date of acquisition.


The valuation of investment in film and television programs is reviewed on a title-by-title basis, when an event or change in circumstances indicates that the recoverable value of a film or television program is less than its unamortized cost. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film or television program. The fair value of the film or television program is determined using management’s future revenue and cost estimates and a discounted cash flow approach. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in film and television programs may be required as a consequence of changes in management’s future revenue estimates.


Foreign Currency Translation


The functional currency of the Company is the Canadian dollar.  Monetary assets and liabilities are translated at exchange rates in effect at the balance sheet date.  Non-monetary assets are translated at the historical exchange rates which were in effect when they were acquired.  Revenue and expenses are translated at the approximate average rate of exchange for the year, except that amortization is translated at the rates used to translate related assets. The resulting gains or losses on translation are included in the consolidated statement of operations.







12



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



   3. SIGNIFICANT ACCOUNTING POLICIES (continued)


Future Income Taxes


The Company follows the asset and liability method of accounting for income taxes.  Under this method, future income tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, as well as for the benefit of losses available to be carried forward to future years for tax purposes.  Future income tax assets and liabilities are measured using substantively enacted tax rates and laws that will be in effect when the differences are expected to reverse.  Future income tax assets are recognized in the financial statements if realization is considered more likely than not.


Stock-Based Compensation Plan


The Company follows a fair value based method of accounting for all stock-based compensation and other stock-based payments to employees and non-employees.  The fair value of all share purchase options is expensed over their vesting period with a corresponding increase to contributed surplus. Upon exercise of share purchase options, the consideration paid by the option holder, together with the amount previously recognized in contributed surplus, is recorded as an increase to share capital. The Company uses the Black-Scholes option valuation model to calculate the fair value of share purchase options at the date of grant.


Loss Per Share


Basic loss per share is calculated by dividing net loss (the numerator) by the weighted average number of common shares outstanding (the denominator) during the period.  Diluted loss per share reflects the dilution that would occur if outstanding stock options and share purchase warrants were exercised or converted into common shares using the treasury stock method and are calculated by dividing net loss applicable to common shares by the sum of the weighted average number of common shares outstanding and all additional common shares that would have been outstanding if potentially dilutive common shares had been issued.


The inclusion of the Company’s stock options and share purchase warrants in the computation of diluted loss per share would have an anti-dilutive effect on loss per share and are therefore excluded from the computation.  Consequently, there is no difference between basic loss per share and diluted loss per share.




13



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



4. INVESTMENT IN FILM AND TELEVISION PROGRAMS


On November 30, 2004, the Company acquired the following assets from an independent production house in Toronto which were valued at $350,000:


1.  Developed scripts and synopses of ten theatrical films valued at$230,000 and

2.  Distribution contracts for seven theatrical films valued at $120,000


The acquisition price was settled by issuance of 3.5 million common shares valued at $0.10 per share and 3.5 million warrants convertible into equal number of common shares of the Company at a price of $1 per warrant within two years. (see note 6(iii)).


Movements during the year were as follows:


 

Theatrical Films

 
 

Scripts & Synopses

Distribution Contracts

Total

Balance:  June 30, 2004

$ -

$ -

$ -

Acquisitions during year

230,000

120,000

350,000

Amortization

(57,500)

(60,000)

(117,500)

Balance:  June 30, 2005

$172,500

$60,000

$232,500


Due to rewrites of certain scripts, production delays and changes in forecasted distribution income, management reviewed the valuation of investment in film and television programs on a title-by-title basis at June 30, 2005.  Based on the fair values determined by management, additional amortization of $117,500 was recorded representing the amount by which the unamortized costs exceeded the estimated fair value of the film or television program.


The Company expects 100% of the investment in distribution contracts, net of accumulated amortization, will be amortized in the three year period ending June 30, 2008.



5. NOTE PAYABLE


The note payable is due to a shareholder corporation, owned by an independent director of the Company and where another director provides accounting services. The note is unsecured, non-interest bearing, and is payable on demand.


 


 6.ADVANCES FROM SHAREHOLDERS


Advances from shareholders represent funds advanced or expenses incurred on behalf of the Company by shareholder corporations from time to time. These advances are unsecured, non-interest bearing and are payable on demand.


14



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004


7. CAPITAL STOCK

 

a)

Authorized:  Unlimited number of common shares


b)

Issued:


   

2005

2004

   

Common Shares

Amount

Common Shares

Amount

Beginning of year

 

9,168,991

$4,460,857

12,142,780

$4,307,384

Reverse stock split

1

(4,584,495)

-

(6,068,832)

-

Buy-back of fractional shares

2

(619)

(185)

(4,957)

(1,527)

Issued to acquire film and television programs

3

3,500,000

350,000

   

Exercise of warrants

 

-

-

1,500,000

75,000

Issued in settlement of debts

 

-

-

1,500,000

75,000

Issued in settlement of fees

4

50,000

5,000

100,000

5,000

   

8,133,877

$4,815,672

9,168,991

$4,460,857


1.   On November 19, 2004, the Company carried out a reverse stock-split under which one new common share of the Company was issued for every two old common shares of the Company.


2.  Under the Company’s share buy-back plan to deal with fractional shares arising from the reverse stock split per (i) above, the holders of less than ten old common shares were not issued any new shares of the Company.  Instead, they were entitled to a payment of $0.10 per share, subject to a minimum of $1.  As a result, a maximum of 619 existing common shares are expected to be returned to the Company for cancellation for a total cash consideration of $185 under the buy-back plan.  The plan has no expiry date.


3.  On November 30, 2004, the Company issued 3.5 million common shares plus 3.5 million warrants to an independent production house in settlement of the value of acquisition of certain theatrical films properties valued at $350,000 (see note 4).  These shares cannot be sold or transferred by the vendor for at least five years from the date of issuance without the approval of the Company as per the terms of the asset purchase agreement dated November 30, 2004.


      The vendor also issued 3.5 million warrants, which are convertible into an equal number of common shares of the Company at a conversion price of $1 per warrant on or before November 30, 2006.  As at June 30, 2005, none of the warrants were exercised.


      The shares issued and issuable upon exercise of the warrants are restricted in terms of their saleability in accordance with the regulations of the U.S. Securities and Exchange Commission.


4.    On June 13, 2005, the Company issued 50,000 common shares valued at $0.10 per share to an independent brokerage firm in settlement of the fee charged for services involving obtaining a listing and trading symbol for the Company’s common shares on the Over the Counter Bulletin Board of NASDAQ.  These shares are restricted in terms of their saleability in accordance with the regulations of the U.S. Securities and Exchange Commission.


Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004


8.  LOSS PER SHARE


Loss per share is calculated on the weighted average number of common shares outstanding during the year ended June 30, 2005, which were 6,629,968 shares (2004:  3,680,536 (post-2005 reverse-split) and 2003:  1,906,654 (post-reverse-splits of 2004 and 2005)).


9.  INCOME TAXES


The effective tax rate of Nil (2004 – Nil) for income taxes varies from the statutory income tax rate of approximately 36% (2004 – 36%) due to the fact that no tax recoveries have been recorded for losses incurred, as management has not determined that it is more likely than not that the losses will be utilized before they expire.


The temporary differences that give rise to future income tax assets and future income tax liabilities are presented below:


 

2005

2004

Amounts related to tax loss and credit carry forwards

 $211,000 

 $198,000 

     

Net future tax assets

 $211,000 

 $198,000 

Less: valuation allowance

(211,000)

(198,000)

     
 

 $- 

 $- 



The Company has carry forward tax losses of approximately $586,000, which may be applied against future taxable income and expire as detailed below. The benefit arising from these losses has not been recorded in the financial statements.


2007

   

 $77,000 

2008

   

 31,000 

2009

   

 19,000 

2010

   

 212,000 

2011

   

 104,000 

2015

   

 143,000 

     

 $586,000 




15



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



10.  RELATED PARTY TRANSACTIONS


Transactions with related parties are incurred in the normal course of business and are measured at the exchange amount. Related party transactions and balances not disclosed elsewhere in the financial statements are:


i.

Current Capital Corp., a shareholder corporation where directors of the Company serve as consultants and is owned by one of the directors charged approximately $5,400 for the premises rent, telephone, consultants’ fees and other office expenses (2004 - $12,600; 2003 - $11,200).


ii.

Consulting fees include amounts to Snapper Inc., a shareholder corporation, of $Nil (2004 - $60,372; 2003 - $13,944).


iii.

Included in professional fees are fees of $Nil (2004 - $5,000, 2003 - $Nil) paid to a director of the Company for accounting services. The payment in 2004 was made by way of issuance of 100,000 shares of the Company.


iv.

Consulting fees include $30,000 of fees paid to a director (2004 and 2003 - $Nil).


v.

Rent of $6,500 (2004 and 2003 - $Nil) is charged in respect of rent for premises owned by a director of the Company.


vi.

Included in accounts payable are balances due to Current Capital Corp. of $15,728 (2004 - $2,100; 2003 - $Nil)


vii.

Receivable includes $3,752 (2004 and 2003 - $Nil) advanced to two production companies owned by directors of NHFT and which will license the scripts from the Company.


viii.

Payable includes $11,900 (2004 and 2003 - $Nil) received from two production companies. The Company is a co-producer in one of these production companies and directors of NHFT are the owners of the other production company.



11.  COMMITMENTS AND CONTINGENT LIABILITIES


i.

On December 1, 2004, the Company entered into a consulting contract with Mr. Damian Lee, one of the owners of the production house from which the Company acquired certain film properties (see note 4). The contract is effective January 15, 2005 for a five-year term up to January 15, 2010. The contract provides for a monthly fee of $6,000 plus taxes plus reimbursement of expenses. In addition, Mr. Lee will also be entitled to production fees and incentives linked to his role and responsibility on each film or television production.


ii.

The Company's wholly owned subsidiary, NHFT has entered into various film distribution, joint venture and co-producing arrangements under which the Company will co-produce two films, in addition to its current wholly-owned slate of projects. Under these arrangements, co-producers, who will own 50% of the net revenue will contribute half of the development fees to NHFT toward the development of the projects.  NHFT will utilize these fees, in conjunction with its own, in order to develop the projects and bring them to maturity. The extent of financial commitments required under these arrangements cannot be reasonably determined at this time.


iii.

The Company is a defendant in a legal action which, in the opinion of management, is not reasonably expected to result in a material adverse effect on the Company’s financial position.

Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004




12.  SEGMENTED INFORMATION


The Company has three identifiable segments, namely licensing, production and distribution. As at June 30, 2005 only one segment – distribution – was operational.


The accounting policies of the segments are same as those described in Note 2. The Company evaluates each segment’s performance based on its contribution to consolidated net earnings. There are no inter-segment charges or transactions. The table below presents summarised financial information for the fiscal years ended June 30, 2005 and 2004.


Geographic Information


The Company operates from one location in Canada. All its assets are located at this location.


Business Segments


2005

Licensing

Production

Distribution

Total

Total Revenue

$-

$-

$5,031

$5,031

Earnings (losses) from operations

(27,586)

(27,586)

(27,586)

(82,758)

Total assets

172,000

3,752

60,000

235,752

Total liabilities

-

11,900

-

11,900

Reconciliation to Financial Statements

 

Revenue

 

Total revenue from reportable segments

$5,031

Other

-

 

$5,031

Net Loss

 

Total losses from reportable segments

$(82,758)

Other

(176,775)

 

$259,533)

Assets

 

Total assets used for reportable segments

$235,752

Other

4,360

 

$240,112

Liabilities

 

Total liabilities of the reportable segments

$11,900

Other

190,408

 

$202,308


There were no operating segments in fiscal year 2004 and therefore no comparatives are provided for the year ended June 30, 2004.


16



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES


These financial statements have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”). Material variations in the accounting principles, practices and methods used in preparing these consolidated financial statements from principles, practices and methods used in the United States (“US GAAP”) and in SEC Regulation S-X are described and quantified below.


 

2005

2004

 

Balance under Canadian GAAP

Adjustment

Balance under US GAAP

Balance under Canadian GAAP

Adjustment

Balance under US GAAP

Balance sheet

           

Current assets

$7,612

$-

$7,612

$2,867

$-

$2,867

Long term assets

232,500

-

232,500

-

-

-

Total assets

$240,112

$-

$240,112

$2,867

$-

$2,867

Current liabilities

$202,308

$-

$202,308

$60,345

$-

$60,345

Capital stock

4,815,672

-

4,815,672

4,460,857

-

4,460,857

Contributed surplus

20,391

-

20,391

20,391

-

20,391

Deficit

(4,798,259)

-

(4,798,259)

(4,538,726)

-

(4,538,726)

Total liabilities and shareholders’ equity

$240,112

$-

$240,112

$2,867

$-

$2,867














17



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004




13. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)


The impact of significant US GAAP variations on the Consolidated Statement of Operations are as follows:


Year ended June 30

2005

2004

2003 

       

Net loss for year, Canadian GAAP

 $(259,533)

 $(214,601)

 $(108,514)

Adjustment re: 2002 write down of scripts and lyrics

 - 

 - 

 75,000 

Adjustment re: 2003 write down of production costs and contract rights costs

 - 

 110,000 

 - 

Write down of production costs

 - 

 - 

 (48,900)

Write down of contract rights costs

 - 

 - 

 (61,100)

Reclassification of exchange loss(gain) on yea end translation of foreign currency items and balances

 (203)

 - 

 - 

Loss for year, US GAAP

 (259,736)

 (104,601)

 (143,514)

Reclassification of exchange gain(loss) on period end translation of foreign currency items and balances

 203 

 - 

 - 

Comprehensive loss for year, US GAAP

(259,533)

(104,601)

(143,514)

       

Basic and diluted loss per share, US GAAP

(0.04)

(0.03)

(0.08)



Net loss for the fiscal years 2003 and 2004 is based on the post-reverse split number of shares issued and outstanding.


Diluted loss per share under US GAAP


The Company had 3.5 million warrants which were not exercised as at June 30, 2005. Inclusion of these warrants in the computation of diluted loss per share would have an anti-dilutive effect on loss per share and are therefore excluded from the computation. Consequently, there is no difference between loss per share and diluted loss per share.








18



Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



13.  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)


The impact of the above differences between Canadian GAAP and US GAAP on the consolidated statements of cash flows would be as follows:


Year ended June 30

2005

2004

2003

Operating activities under Canadian GAAP

($104,347)

($95,659)

($36,113)

Production costs

-

(150)

(48,900)

Operating activities under US GAAP

(104,347)

(95,809)

(85,013)

Investing activities under Canadian GAAP

-

(150)

(50,000)

Deferred production costs

-

150

48,900

Investing activities under US GAAP

-

-

(1,100)

Financing activities under Canadian and US GAAP

105,731

95,830

86,136

Increase in cash

1,384

21

23

Cash, beginning of year

245

224

201

Cash, end of year

$1,629

$245

$224


New accounting pronouncements


In January 2003, the Financial Accounting Standards Board (the “FASB”) released Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”) that requires the primary beneficiary of a variable interest entity (“VIE”) to consolidate such entity. In December 2003, the FASB published a revision to FIN 46 (“FIN 46R”) to clarify some of the provisions of the interpretation and to defer the effective date of implementation for certain entities. Under the guidance of  FIN 46R, entities that do not have interests in structures that are commonly referred to as special purpose entities are required to apply the provisions of the interpretation in financial statements for periods ending after March 14, 2004. The Company does not have interests in any variable interest entities.


In December 2004, the FASB SFAS 123 (Revised 2004), “Share-Based Payment” [“Statement 123(R)"], which is a revision of SFAS. 123, “Accounting for Stock-Based Compensation” [“Statement 123"]. Statement 123(R) supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees” and amends SFAS. 95, “Statement of Cash Flows”. Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Effective April 1, 2003, the Company has adopted the fair value accounting method provided for under Statement 123 to apply recognition provisions to its stock options granted, modified or settled after February 1, 2003. Statement 123(R) will have no impact on the consolidated financial statements of the Company.








Noble House Entertainment Inc.

(Formerly First Empire Corporation Inc.)

Notes to Consolidated Financial Statements

(Canadian Dollars)

June 30, 2005 and 2004



13.  DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)


New accounting pronouncements (continued)


In December 2004, FASB issued SFAS 153, “Exchanges of Non-Monetary Assets – an amendment of APB Opinion No. 29, “Accounting for Nonmonetary Transactions”. SFAS 123 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. SFAS 153 eliminates the narrow exception for nonmonetary exchanges of similar productive assets and replaces it with a broader exception for exchanges of nonmonetray assets that do not have commercial substance. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  The provisions of SFAS 153 should be applied prospectively. The Company does not anticipate that the application of SFAS 153 will have an impact on the consolidated financial statements of the Company.


In May 2005, the FASB issued SFAS 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and SFAS 3, which applies to all voluntary changes in accounting principle. This Statement requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement is effective for fiscal years beginning after December 15, 2005. The Company does not anticipate that this guidance will impact the consolidated financial statements of the Company.



14.  USE OF ESTIMATES


The preparation of financial statements in conformity with Canadian 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 period.  Actual results could differ from those estimates.









19