[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1998
----------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from to
Commission file number 0-23825
Optimum Source International, Ltd.
(Exact name of small business issuer as
specified in its charter)
Nevada 86-0674322
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
10612 North Sundown Drive, Scottsdale, Arizona 85260
(Address of principal executive offices)
(602) 951-6828
Issuer's telephone number
(Former name, former address and former fiscal year, if changed since last
report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: August 14, 1998 8,357,210
Transitional Small Business Disclosure Format (check one). Yes ; No X
--- ---
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Formerly a Development Stage Company)
BALANCE SHEET
(Unaudited)
June 30, December 31,
------------- -------------
ASSETS 1998 1997
- ------ ------------- -------------
Current Assets
Inventory .................................... $ -- $ 14,013
Accounts Receivable .......................... 20,545 --
Prepaid Expense .............................. -- 10,000
------------- -------------
Total Current Assets ...................... 20,545 24,013
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities
Accounts Payable ............................. 16,750 2,455
Accrued Liabilities .......................... 19,271 8,455
Loans from Shareholder ....................... 54,580 54,580
------------- -------------
Total Liabilities ......................... 90,601 65,490
------------- -------------
Stockholders' Equity
Common Stock, authorized 50,000,000 shares of
$.001 par value, issued and outstanding
8,357,210 .................................. 8,357 8,357
Additional Paid in Capital ................... 87,173 87,173
Retained Deficit ............................. (65,022) (65,022)
Deficit Accumulated During the
Development Stage .......................... (99,453) (70,874)
Less: Treasury Stock
59,738 shares at Cost ...................... (1,111) (1,111)
------------- -------------
Total Stockholders' Equity (Deficit) ...... (70,056) (41,477)
------------- -------------
Total Liabilities and Stockholders' Equity $ 20,545 $ 24,013
============= =============
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Formerly a Development Stage Company)
STATEMENT OF LOSS
(Unaudited)
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Sales .................... $ -- $ -- $ 45,905 $ --
Cost of Sales ............ -- -- 14,013 --
----------- ----------- ----------- -----------
Gross Margin ............... -- -- 31,892 --
Expenses
General and Administrative 5,495 590 49,555 1,228
----------- ----------- ----------- -----------
Operating Loss ............. (5,495) (590) (17,663) (1,228)
----------- ----------- ----------- -----------
Other Expenses
Other Expense - Interest . 5,458 1,426 10,916 2,853
----------- ----------- ----------- -----------
Loss Before Taxes .......... (10,953) (1,426) (28,579) (2,853)
Income Tax ................. -- -- -- --
Net Loss .................. $ (10,953) $ (2,016) $ (28,579) $ (4,081)
=========== =========== =========== ===========
Weighted Average Shares
Outstanding .............. 8,297,472 8,297,472 8,297,472 8,297,472
=========== =========== =========== ===========
Loss Per Share ............. $ -- $ -- $ -- $ --
=========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<PAGE>
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Formerly a Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
For the Six Months
Ended June 30,
---------------------
1998 1997
-------- -------
Cash Flows from Operating Activities:
Net cash used in operating activities ............... $ -- $ --
-------- -------
Cash Flows from Investing Activities:
Net cash used by investing activities ............... -- --
-------- -------
Cash Flows From Financing Activities:
Loans from shareholder .............................. -- --
-------- -------
Net Cash Provided by Financing Activities .......... --
-------- -------
Net Increase (Decrease) in Cash and
Cash Equivalents .................................. -- --
Cash and Cash Equivalents at
Beginning of the Year ............................. -- --
-------- -------
Cash and Cash Equivalents at
End of the Year ................................... $ -- $ --
======== =======
Reconciliation of Net Loss to Cash Used
by Operating Activities
Net loss ............................................ $(28,579) $(2,065)
Changes in Assets and Liabilities
Amortization ........................................ -- --
Increase in accounts receivable ..................... (20,545) --
Increase (decrease) in inventory .................... 14,013 --
Increase (decrease) in prepaid expense .............. 10,000 --
Increase in accounts payable ........................ 14,295 --
Increase in accrued expenses ........................ 10,816 2,065
-------- -------
Net Cash Used by Operating Activities ............... $ -- $ --
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest ............................................ $ -- $ --
Income Taxes ........................................ $ 100 $ --
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Formerly a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1998
(Unaudited)
1. Interim Reporting
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles and with Form 10-QSB requirements.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the three month period
ended June 30, 1998, are not necessarily indicative of the results that may be
expected for the year ended December 31, 1998.
Item 2. Management's Discussion and Analysis or Plan of Operation.
General - This discussion should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's annual report on Form 10-SB for the year ended December 31, 1997.
Results of Operations - From 1984 to 1986, the Company attempted to manufacture,
distribute and sell chemical products for the purification of water. This
business activity was abandoned. From 1986 to 1990, the Company attempted to
acquire interests in various business opportunities, all attempts were
abandoned. The Company was inactive from 1990 to 1992. The Company was in the
development stage from December 31, 1992 through December 31, 1997.
Liquidity and Capital Resources
The Company requires working capital principally to fund its current operations.
From time to time in the past the Company has relied on short-term borrowing and
the issuance of restricted common stock to fund current operations. There are no
formal commitments from banks or other lending sources for lines of credit or
similar short-term borrowing, but the Company has been able to borrow any
additional working capital that has been required. From time to time in the
past, required short-term borrowing have been obtained from a principal
shareholder or other related entities.
The Company may be required to supplement its available cash and other liquid
assets with proceeds from borrowing, the sale of additional securities, or other
sources. There can be no assurance that any such required additional funding
will be available or, if available, that it can be obtained on terms favorable
to the Company.
6
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
None
7
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Registrant)
DATE: August 17, 1998
By: /S/ James O'Brien
------------------------
James O'Brien, President
(Principal financial and Accounting Officer)
8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE OF EAT AT OPTIMUM SOURCE INTERNATIONAL, LTD. AS OF JUNE 30, 1998 AND THE
RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE SIX MONTHS THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 21
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 21
<CURRENT-LIABILITIES> 91
<BONDS> 0
0
0
<COMMON> 8
<OTHER-SE> (78)
<TOTAL-LIABILITY-AND-EQUITY> 21
<SALES> 46
<TOTAL-REVENUES> 46
<CGS> 14
<TOTAL-COSTS> 14
<OTHER-EXPENSES> 50
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> (29)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (29)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
