[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: September 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.)
3539 Ocean View Blvd., Glendale, California 91208
(Address of principal executive offices)
(818) 957-1414
Issuer's telephone number
10612 North Sundown Drive, Scottsdale,
Arizona 85260 (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: 1,654,051 as of May 5, 1999
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)
September 30, December 31,
--------- ---------
ASSETS 1998 1997
- ------
--------- ---------
Current Assets
Inventory .......................................... $ 50,000 $ --
Accounts Receivable ................................ -- 14,013
Prepaid Expense .................................... 10,000
--------- ---------
Total Current Assets ............................ 50,000 24,013
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts Payable - Trade Dollars ................... 50,000 --
Accounts Payable ................................... 17,841 2,455
Accrued Liabilities ................................ -- 8,455
Loans from Shareholder ............................. 83,306 54,580
--------- ---------
Total Liabilities ............................... 151,147 65,490
--------- ---------
Stockholders' Equity
Common Stock, authorized 50,000,000 shares of
$.001 par value, issued and outstanding 1,654,051 1,654 1,654
Additional Paid in Capital ......................... 93,876 93,876
Retained Deficit ................................... (195,566) (135,896)
Less: Treasury Stock 59,738 shares at Cost ......... (1,111) (1,111)
--------- ---------
Total Stockholders' Equity (Deficit) ............ (101,147) (41,477)
--------- ---------
Total Liabilities and Stockholders' Equity ...... $ 50,000 $ 24,013
========= =========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Formerly a Development Stage Company)
STATEMENT OF LOSS
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 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 30,500 614 80,055 1,842
----------- ----------- ----------- -----------
Operating Loss ............. (30,500) (614) (48,163) (1,842)
-----------
----------- ----------- ----------- -----------
Other Expenses
Other Expense - Interest . 591 1,427 11,507 4,280
----------- ----------- ----------- -----------
Loss Before Taxes .......... (31,091) (2,041) (59,670) (6,122)
Income Tax ................. -- -- -- --
Net Loss .................. $ (31,091) $ (2,041) $ (59,670) $ (6,122)
=========== =========== =========== ===========
Weighted Average Shares
Outstanding .............. 1,654,051 1,654,051 1,654,051 1,654,051
=========== =========== =========== ===========
Loss Per Share ............. $ (.02) $ -- $ (.04) $ --
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
OPTIMUM SOURCE INTERNATIONAL, LTD.
(Formerly a Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
For the Nine Months
Ended September 30,
----------------------
1998 1997
-------- --------
Cash Flows from Operating Activities:
Net cash used in operating activities .............. $(28,726) $ --
-------- --------
Cash Flows from Investing Activities:
Net cash used by investing activities .............. -- --
-------- --------
Cash Flows From Financing Activities:
Loans from shareholder ............................. 28,726 --
-------- --------
Net Cash Provided by Financing Activities ......... 28,726 --
-------- --------
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 ........................................... $(59,670) $ (6,195)
Changes in Assets and Liabilities
--------
Increase in accounts receivable .................... -- --
Increase (decrease) in inventory ................... (35,987) --
Increase (decrease) in prepaid expense ............. 10,000 --
Increase in accounts payable ....................... 15,386 1,840
Increase in trade dollars payable .................. 50,000 --
Increase in accrued expenses ....................... (8,455) 4,355
-------- --------
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 September 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 and nine
month period ended September 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.
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: May 17, 1999
By: /S/
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 SHEET OF OPTIMUM SOURCE INTERNATIONAL, LTD. AS OF SEPTEMBER 30, 1998 AND
THE RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE NINE MONTHS THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 50
<CURRENT-ASSETS> 50
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 50
<CURRENT-LIABILITIES> 151
<BONDS> 0
0
0
<COMMON> 2
<OTHER-SE> (103)
<TOTAL-LIABILITY-AND-EQUITY> 50
<SALES> 46
<TOTAL-REVENUES> 46
<CGS> 14
<TOTAL-COSTS> 14
<OTHER-EXPENSES> 80
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12
<INCOME-PRETAX> (60)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
