[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, 1999
-----------------------------------
[ ] 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
(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 June 30, 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)
June 30, December 31,
ASSETS 1999 1998
--------- ---------
Current Assets
Inventory .......................................... $ 20,000 $ 50,000
Marketable Securities .............................. 75,000 --
--------- ---------
Total Current Assets ............................ 95,000 50,000
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts Payable - Trade Dollars ................... 95,000 65,000
Accounts Payable ................................... 24,537 18,689
Accrued Liabilities ................................ 6,591 2,133
Loans from Shareholder ............................. 95,156 83,306
--------- ---------
Total Liabilities ............................... 221,284 169,128
--------- ---------
Stockholders' Equity
Preferred Stock, authorized 5,000,000 shares of
$.01 par value, issued and outstanding 0 ..... -- --
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 ......................... 92,765 92,765
Retained Deficit ................................... (220,703) (213,547)
--------- ---------
Total Stockholders' Equity (Deficit) ............ (126,284) (119,128)
--------- ---------
Total Liabilities and Stockholders' Equity ...... $ 95,000 $ 50,000
========= =========
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 OPERATIONS
(Unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
Revenue:
<S> <C> <C> <C> <C>
Sales .................... $ -- $ -- $ 75,000 $ 45,905
Cost of Sales ............ -- -- 60,000 14,013
----------- ----------- ----------- -----------
Gross Margin ............... -- -- 15,000 31,892
Expenses
General and Administrative 7,600 5,495 16,450 49,555
----------- ----------- ----------- -----------
Operating Loss ............. 7,600 5,495 1,450 17,663
----------- ----------- ----------- -----------
Other Expenses
Other Expense - Interest . 2,820 5,458 5,706 10,916
----------- ----------- ----------- -----------
Income (Loss) Before Taxes . (10,420) (10,953) (7,156) (28,579)
Income Tax ................. -- -- -- --
Net Income (Loss) .......... $ (10,420) $ (10,953) $ (7,156) $ (28,579)
=========== =========== =========== ===========
Weighted Average Shares
Outstanding .............. 1,654,051 1,654,051 1,654,051 1,654,051
=========== =========== =========== ===========
Loss Per Share ............. $ (0.01) $ (0.01) $ -- $ (0.02)
=========== =========== =========== ===========
</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 Six Months
Ended June 30,
----------------------
1999 1998
-------- --------
Cash Flows from Operating Activities:
Cash paid to suppliers .......................... $(11,850) $ --
-------- --------
Net cash used in operating activities .............. (11,850) --
-------- --------
Cash Flows from Investing Activities:
Net cash used by investing activities .............. -- --
-------- --------
Cash Flows From Financing Activities:
Loans from shareholder .......................... 11,850 --
-------- --------
Net Cash Provided by Financing Activities ......... 11,850 --
-------- --------
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 income (loss) .................................. $ (7,156) $(28,579)
Changes in Assets and Liabilities
--------
Increase in accounts receivable .................... -- (20,545)
Decrease in inventory .............................. 30,000 14,013
Increase in Marketable Securities .................. (75,000) --
Decrease in prepaid expense ........................ -- 10,000
Increase in accounts payable ....................... 5,848 14,295
Increase in trade dollars payable .................. 30,000 --
Increase in accrued expenses ....................... 4,458 10,816
-------- --------
Net Cash Used by Operating Activities .............. $(11,850) $ --
======== ========
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 Six MONTHS ENDED JUNE 30, 1999
(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 six month period
ended June 30, 1999, are not necessarily indicative of the results that may be
expected for the year ended December 31, 1999.
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-KSB for the year ended December 31, 1998.
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.
Total Revenues - For the Six months ended June 30, 1999 and 1998, the Company
had total sales of approximately $75,000 and $46,000 respectively.
Costs and Expenses - For the Six months ended June 30, 1999 and 1998, the
Company had a net loss of approximately $10,000 and $29,000, respectively.
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
6
<PAGE>
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.
Year 2000 Compliance - The Company utilizes software and related technologies
which have been programmed to recognize and properly process data fields
containing a two digit year and commonly referred to as the Year 2000 Compliance
issue. Management has concluded that a material effect on the Company's
financial condition is not reasonably likely to occur as a result of Year 2000
issues. While the Company communicates with the systems of its vendors and
suppliers, it cannot measure the impact that the Year 2000 issue will have on
such parties with which it conducts business.
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
The Company did not file a report on Form 8-K during the Six months
ended June 30, 1999.
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: July 1, 1999 By: /S/
---------------------------- ----------------------------------------
James O'Brien, C.E.O., 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 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-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 75
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 20
<CURRENT-ASSETS> 95
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 95
<CURRENT-LIABILITIES> 221
<BONDS> 0
0
0
<COMMON> 2
<OTHER-SE> (128)
<TOTAL-LIABILITY-AND-EQUITY> 95
<SALES> 75
<TOTAL-REVENUES> 75
<CGS> 60
<TOTAL-COSTS> 60
<OTHER-EXPENSES> 16
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6
<INCOME-PRETAX> (7)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
