<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
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 000-26377
OXIR INVESTMENTS, INC.
(Exact name of small business issuer as specified in its charter)
CALIFORNIA 88-0397134
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3980 HOWARD HUGHES PARKWAY, SUITE 340, LAS VEGAS, NEVADA 89109
(Address of principal executive offices)
Registrant's telephone no., including area code: (702) 369-4260
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 No X
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of the Company's common stock, no
par value, as of November 2, 1999: 21,182,200
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Heading Page
------- ----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements.............................................................. 1
Consolidated Balance Sheets -- September 30,
1999 and June 30, 1999................................................................. 3
Consolidated Statements of Operations -- three
months ended September 30, 1999 and 1999............................................... 5
Consolidated Statements of Stockholders' Equity.......................................... 6
Consolidated Statements of Cash Flows -- three
months ended September 30, 1999 and 1999............................................... 7
Notes to Consolidated Financial Statements .............................................. 9
Item 2. Management's Discussion and Analysis and
Results of Operations.................................................................. 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................................................. 12
Item 2. Changes In Securities.......................................................................... 12
Item 3. Defaults Upon Senior Securities................................................................ 12
Item 4. Submission of Matters to a Vote of
Securities Holders..................................................................... 12
Item 5. Other Information.............................................................................. 12
Item 6. Exhibits and Reports on Form 8-K............................................................... 12
SIGNATURES............................................................................... 13
</TABLE>
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PART I
ITEM 1. FINANCIAL STATEMENTS
The following unaudited Financial Statements for the period ended
September 30, 1999, have been prepared by the Company.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 113,255 $ 52,627
Investment in trading securities 3,025,403 4,672,246
Prepaid expenses 3,969 3,978
------------ ------------
Total Current Assets 3,142,627 4,728,851
------------ ------------
PROPERTY AND EQUIPMENT 4,259,738 4,013,222
------------ ------------
OTHER ASSETS
Investment 300,000 -
Related party receivable 8,080 8,080
Deposits 15,000 15,000
------------ ------------
Total Other Assets 323,080 23,080
------------ ------------
TOTAL ASSETS $ 7,725,445 $ 8,765,153
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, June 30,
1999 1999
------------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 27,390 $ 39,121
Margin account 1,256,725 1,981,464
Client funds payable 1,499,512 1,252,131
Provision for income taxes 82,373 398,760
Deferred tax liability 547,530 550,134
Current portion - mortgage payable 1,326 1,303
------------ ------------
Total Current Liabilities 3,414,856 4,222,913
------------ ------------
LONG-TERM LIABILITY
Mortgage payable 206,154 206,492
------------ ------------
Total Long-Term Liability 206,154 206,492
------------ ------------
Total Liabilities 3,621,010 4,429,405
------------ ------------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock: 50,000,000 shares authorized of no
par value, 21,150,600 and 21,090,600 shares issued
and outstanding, respectively 2,798,769 2,498,769
Retained earnings 1,305,666 1,836,979
------------ ------------
Total Stockholders' Equity 4,104,435 4,335,748
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,725,445 $ 8,765,153
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Income Statements
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the May 19, 1998
Three Months Ended Through
September 30, September 30,
--------------------------------- ------------
1999 1998 1999
------------ ------------ ------------
<S> <C> <C> <C>
SALES $ - $ - $ -
COST OF GOODS SOLD - - -
------------ ------------ ------------
GROSS MARGIN - - -
------------ ------------ ------------
COSTS AND EXPENSES
Depreciation expense 37,353 477 77,528
Rent expense 19,813 - 53,961
General and administrative 1,980,660 119,885 2,455,243
------------ ------------ ------------
Total Costs and Expenses 2,037,826 120,362 2,586,732
------------ ------------ ------------
Net Loss From Operations (2,037,826) (120,362) (2,586,732)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (35,638) - (120,538)
Realized gain on sale of marketable securities 665,871 - 2,359,958
Net unrealized gain on marketable securities 557,289 - 2,282,753
Dividends - - 128
------------ ------------ ------------
Total Other Income (Expense) 1,187,522 - 4,522,301
------------ ------------ ------------
INCOME (LOSS) BEFORE TAXES (850,304) (120,362) 1,935,569
------------ ------------ ------------
INCOME TAX (BENEFIT) (318,991) - 629,903
------------ ------------ ------------
NET INCOME (LOSS) $ (531,313) $ (120,362) $ 1,305,666
============ ============ ============
BASIC (LOSS) PER SHARE $ (0.03) $ (0.03)
============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 21,100,000 4,500,000
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock
-----------------------------------------------
Retained
Shares Amount Earnings
------------- ------------- -------------
<S> <C> <C> <C>
Balance at inception - $ - $ -
Net income from inception on May 19,
1998 through June 30, 1998 - -
------------- ------------- -------------
Balance, June 30, 1998 - - -
Shares issued to founders at
predecessor cost of $0.00 per share 13,770,000 - -
Shares issued for trading securities
at $0.70 per share 1,350,000 939,764 -
Common stock issued for cash at
$1.00 per share 600,000 600,000 -
Stock issuance costs - (250,000) -
Common stock issued for cash
at $5.00 per share 100,600 503,000 -
Common stock issued for related
party acquisitions, recorded at
predecessor cost 5,270,000 706,005 -
Net income for the year ended
June 30, 1999 - - 1,836,979
------------- ------------- -------------
Balance, June 30, 1999 21,090,600 2,498,769 1,836,979
Common stock issued for services
at $5.00 per share (unaudited) 60,000 300,000 -
Net loss for the three months ended
September 30, 1999 (unaudited) - - (531,313)
------------- ------------- -------------
Balance, September 30, 1999 (unaudited) 21,150,600 $ 2,956,769 $ 1,305,666
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the May 19, 1998
Three Months Ended Through
September 30, September 30,
--------------------------------- ------------
1999 1998 1999
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (531,313) $ (120,362) $ 1,305,666
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation expense 37,353 477 77,528
Stock issued for services 300,000 - 300,000
Changes in assets and liabilities:
(Increase) decrease in prepaid expenses 9 - (3,969)
(Increase) in related party receivables - - (8,080)
(Increase) decrease in deposits - (115,000) (15,000)
Increase (decrease) in accounts payable (11,731) 11,000 20,651
Increase (decrease) in accrued liabilities 247,379 - 254,119
Increase (decrease) in provision for
income taxes (318,991) - 629,903
------------ ------------ ------------
Net Cash Provided (Used) by Operating
Activities (277,294) (223,885) 2,560,818
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in bank (300,000) - (300,000)
(Increase) decrease in trading securities 1,646,845 - (330,919)
Increase (decrease) in margin account (724,739) - 548,586
Purchase of property and equipment (283,869) (102,663) (1,127,913)
------------ ------------ ------------
Net Cash Used by Investing Activities 338,237 (102,663) (1,210,246)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - - 208,000
Payments on notes payable (315) - (520)
Stock issuance costs - (250,000) (250,000)
Common stock issued for cash - 600,000 1,103,000
Advances to related parties - - (2,337,867)
Cash from subsidiaries - - 40,070
------------ ------------ ------------
Net Cash Provided (Used) by
Financing Activities $ (315) $ 350,000 $ (1,237,317)
------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the May 19, 1998
Three Months Ended Through
September 30, September 30,
---------------------------- ------------
1999 1998 1999
---------- ---------- ----------
<S> <C> <C> <C>
NET INCREASE IN CASH EQUIVALENTS $ 60,628 $ 23,452 $ 113,255
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 52,627 - -
---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 113,255 $ 23,452 $ 113,255
========== ========== ==========
SUPPLEMENTAL CASH FLOW
INFORMATION
Cash paid for:
Interest $ 27,395 $ - $ 105,555
Income taxes $ - $ - $ -
Schedule of Non-Cash Activities:
Common stock issued for services $ 300,000 $ - $ 300,000
Common stock issued for trading
securities $ - $ 939,764 $ 939,764
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
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OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Financial Statements
September 30, 1999
NOTE 1 - CONDENSED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary
to present fairly the financial position, results of operations and
cash flows at September 30, 1999 and 1998 and for all periods presented
have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It is
suggested that these condensed consolidated financial statements be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's June 30, 1999 audited
consolidated financial statements. The results of operations for
periods ended September 30, 1999 and 1998 are not indicative of the
operating results for the full years.
NOTE 2 - SUBSEQUENT EVENTS
In February 2000, the Company issued 8,000 shares of common stock, no
par value, for $40,000.
In January 2000, the Company purchased 1,200 shares of its common stock
for $6,000 and retired those shares.
In December 1999, the Company issued 31,600 shares of common stock for
$158,000.
The Company transferred all of its trading securities into its
wholly-owned subsidiary Oxir Investment Ltd., which is an offshore
company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Company continues to pursue strategic alternatives to maximize the
value of its portfolio of businesses. Some of these alternatives have included,
and will continue to include, selective acquisitions, establishment of new
projects and launching of new subsidiaries. The Company has provided, and may
from time to time in the future provide, information to interested parties
regarding portions of its businesses for such purposes.
RESULTS OF OPERATIONS
For the three months ended September 30, 1999 compared to the three
months ended September 30, 1998.
Net loss for the three month period ended September 30, 1999 (the "first
quarter of 1999") was $531,313, or $.03 per share, compared to a $120,362 loss,
or $.03 per share, for the three month period ended September 30, 1998 (the
"first quarter of 1998"). This decrease in net income is due primarily to the
increase in the Company's size and business operations.
The Company did not recognize any sales during the first quarter of 1999
or the first quarter of 1998. Rather, its revenues consist of realized and
unrealized gains on marketable securities. The Company realized a gain on the
sale of marketable securities of $665,871 and an unrealized gain of $557,289
during the first quarter of 1999, compared to no gains during the first quarter
of 1998.
During the first quarter of 1999, the Company had interest expense of
$35,638 compared to $0 for the first quarter of 1998, which reflects interest
paid on the Company's margin accounts. General and administrative expenses
increased 1,552% to $1,980,660 for the first quarter of 1999 from $119,885 for
the first quarter of 1998, and rent expense increased to $19,813 for the first
quarter of 1999 from $0 for the first quarter of 1998. These increases are due
to increased operating activity and an enlarged staff in the first quarter of
1999 and costs associated with opening two overseas offices. The Company also
had depreciation expense of $37,353 for the first quarter of 1999 compared to
$477 for the first quarter of 1998.
A tax provision has been made for the first quarter of 1999 and the
fiscal year ended June 30, 1999 based on pre-tax capital gains. The Company pays
taxes in the British Virgin Islands and the United States.
LIQUIDITY AND CAPITAL RESOURCES
Total cash and cash equivalents at September 30, 1999 was $113,255
compared to $52,627 at June 30, 1999. Also at September 30, 1999, the Company
had $3,025,403 in investments in trading securities compared to $4,672,246 at
June 30, 1999.
Net cash used by operating activities for the first quarter of 1999 was
$277,294 compared to $223,885 in the first quarter of 1998. This was due
primarily to the income tax benefit that the Company has received.
Net cash provided by investing activities for the first quarter of 1999
was $338,237 compared to $102,663 for the first quarter of 1998. This is
attributed primarily to a decrease in trading securities.
Net cash used by financing activities was $315 for the first quarter of
1999 compared to $350,000 provided in the first quarter of 1998. This reflects
the issuance of the Company's stock for cash and for expenses during the first
quarter of 1998.
At September 30, 1999 the Company had total assets of $7,725,445 and
stockholders' equity of $4,104,435. In comparison, at June 30, 1999, the Company
had total assets of $8,765,153 and total stockholders' equity of $4,335,748.
Working capital was ($272,229) at September 30, 1999, compared to $505,938 at
June 30, 1999.
The Company anticipates meeting its working capital needs during the
next twelve months primarily with revenues from its operating and investing
activities or, if necessary from the sale of securities. Management has not
entered into any arrangements or definitive agreements for additional sales of
securities, either through a private placement or a public offering. If the
Company's operations are not adequate to fund its operations and it is unable to
secure financing from the sale of its securities or from private lenders, the
Company could experience a cash flow
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shortage which could curtail the Company's operations. There can be no assurance
that the Company will be able to obtain financing.
In the opinion of management, inflation has not had a material effect on
the operations of the Company.
YEAR 2000
Year 2000 issues may arise if computer programs have been written using
two digits (rather than four) to define the applicable year. In such case,
programs that have time-sensitive logic may recognize a date using "00" as the
year 1900 rather than the year 2000, which could result in miscalculations or
system failures.
The Company has completed its assessment of the Year 2000 issue,
including both technology and non-technology systems, and believes that any
costs of addressing the issue will not have a material adverse impact on its
financial position. The Company believes that its existing computer systems and
software will not need to be upgraded to mitigate the Year 2000 issues. Prior to
purchasing its technology systems, the Company received confirmation from its
vendors that the systems are Year 2000 compliant. Currently, the Company's
technology system is equipped with an ASUS P2B-F motherboard and SuperMicro
P6DGE motherboard with the latest BIOS versions. The Company's servers are
functioning under LinuxREdHat 5.2 operational system and its www servers use the
Apache / 1.3.6 Unix mod. The Company's principal offices use Windows 2000 and
Windows NT4 SP5. The Company does not have any significant non-information
technology or systems.
The Company has not incurred any material costs associated with its
assessment of the Year 2000 problem. In the event that the Year 2000 issues
impact the Company's accounting operations and other operations aided by its
computer system, the Company believes, as part of a contingency plan to be
developed, that it has adequate personnel to perform those functions manually
until such time that any Year 2000 issues are resolved. The Company did not have
any problems regarding Year 2000 through February 2000.
The Company believes that third parties with whom it has material
relationships will not materially be affected by the Year 2000 issues, although
the Company has not contacted these parties directly. These third parties are
relatively small entities, which do not rely heavily on information technology
("IT") systems and non-IT systems for their operations. However, if the Company
and third parties upon which it relies are unable to address any Year 2000
issues in a timely manner, it could result in a material financial risk to the
Company, including loss of revenue and substantial unanticipated costs.
Accordingly, the Company plans to devote all resources required to resolve any
significant Year 2000 issues in a timely manner.
The Company is cognizant that Year 2000 compliance problems could
undermine the general infrastructure necessary to support its operations. The
Company depends on third party Internet Service Providers, or ISPs, or hosting
centers to provide connections to the Internet. Any interruption of service from
ISPs or hosting centers to provide connections could result in a temporary
interruption of the operation of the Company's web site. Any interruption in the
security, access, monitoring or power systems at the ISPs or hosting centers
could result in an interruption of services. Moreover, it is difficult to
predict what effect Year 2000 compliance problems will have on the integrity and
stability of the Internet.
Should the Company identify any problem with respect to its year 2000
readiness, it will prepare a contingency plan, if necessary. The Company does
not have any material contracts with external contractors to assist in
completing its year 2000 compliance effort. In addition, no employees have been
hired or reassigned to complete the Company's year 2000 compliance.
FORWARD-LOOKING STATEMENTS
This Form 10-QSB contains certain "forward-looking statements" which
represent the Company's expectations or beliefs, including, but not limited to,
statements concerning industry performance and the Company's operations,
performance, financial condition, plans, growth and strategies. Any statements
contained in this Form 10-QSB which are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "anticipate," intent,"
"could," estimate" or continue" or the negative or other variations thereof or
comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
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<PAGE> 14
certain of which are beyond the Company's control, and actual results may differ
materially depending on a variety of important factors, many of which are beyond
the control of the Company.
PART II
ITEM 1. LEGAL PROCEEDINGS
There are presently no material pending legal proceedings to which the
Company or any of its subsidiaries is a party or to which any of its property is
subject and, to the best of its knowledge, no such actions against the Company
are contemplated or threatened.
ITEM 2. CHANGES IN SECURITIES
During the three month period ended September 30, 1999, the Company
issued 60,000 shares of its common stock, no par value, valued at $5.00 per
share, to an entity as compensation for services rendered to the Company. The
issuance was made in a private transaction to an entity familiar with the
business of the Company. For this transaction, the Company relied upon the
exemption from registration provided by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder.
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
(a) Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
None.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
OXIR INVESTMENTS, INC.
Date: July 18, 2000 By: /S/ VASSILI I. OXENUK
-----------------------
Vassili I. Oxenuk,
President and Director
(Principal Executive Officer)
Date: July 18, 2000 By /S/ MICHAEL SMIRNOV
---------------------
Michael Smirnov, Vice President,
Chief Financial Officer and
Director (Principal Accounting
Officer)
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