U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____________ TO ___________
Commission File No: 000-26377
OXIR INVESTMENTS, INC.
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(Exact name of registrant as specified in its charter)
California 88-0397134
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(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
3980 Howard Hughes Parkway, Suite 340, Las Vegas, Nevada 89109
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (702) 369-4260
--------------------
Securities registered under Section 12(b) of the Exchange Act:
Common OTCBB
------------------- -----------------------------------------
Title of each class Name of each exchange on which registered
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, no par value: 21,189,000 shares
(Title of Class)
Amount21,189,000
1
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and June 30, 2000
2
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheet
ASSETS
------
September 30, June 30,
2000 2000
---------- ----------
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 36,546 $ 64,705
Investment in trading securities 8,931 56,928
Prepaid expenses 4,724 4,724
---------- ----------
Total Current Assets 50,201 126,357
---------- ----------
PROPERTY AND EQUIPMENT 5,207,441 5,251,382
---------- ----------
OTHER ASSETS
Income tax receivable 75,000 75,000
Related party receivable 735 4,026
Deposits 16,182 15,000
---------- ----------
Total Other Assets 91,917 94,026
---------- ----------
TOTAL ASSETS $5,349,559 $5,471,765
========== ==========
3
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheet (Continued)
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
September 30, June 30,
2000 2000
---------- ----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 198,815 $ 78,564
Accrued expenses 4,461 --
Margin account 2,955 56,558
Client funds payable 11,034 11,034
Current portion - mortgage payable 1,479 1,432
---------- ----------
Total Current Liabilities 218,744 147,588
---------- ----------
LONG-TERM LIABILITY
Mortgage payable 204,460 204,741
---------- ----------
Total Long-Term Liability 204,460 204,741
---------- ----------
Total Liabilities 423,204 352,329
---------- ----------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock: 50,000,000 shares authorized of no
par value, 21,189,000 shares issued and outstanding 4,519,220 4,519,220
Retained earnings 407,135 600,216
---------- ----------
Total Stockholders' Equity 4,926,355 5,119,436
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,349,559 $5,471,765
========== ==========
</TABLE>
4
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
For the Inception on
Three Months Ended May 19,
September 30, 1998 Through
---------------------------- September 30,
2000 1999 2000
------------ ------------ ------------
<S> <C> <C> <C>
SALES $ 335,981 $ -- $ 354,793
COST OF GOODS SOLD 9,234 -- 28,741
------------ ------------ ------------
GROSS MARGIN 326,747 -- 326,052
------------ ------------ ------------
COST AND EXPENSES
Depreciation expense 43,942 37,353 288,284
Rent expense 54,577 19,813 346,372
General and administrative 422,910 1,980,660 3,383,568
------------ ------------ ------------
Total Costs and Expenses 521,429 2,037,826 4,018,224
------------ ------------ ------------
Net (Loss) From Operations (194,682) (2,037,826) (3,692,172)
------------ ------------ ------------
OTHER INCOME (EXPENSE)
Interest expense (8,013) (35,638) (188,676)
Realized gain on sale of marketable
securities 4,850 665,871 2,535,212
Net unrealized gain on marketable
securities -- 557,289 1,754,278
Dividends -- -- 128
Other income 4,764 -- 4,764
------------ ------------ ------------
Total Other Income (Expense) 1,601 1,187,522 4,105,706
------------ ------------ ------------
INCOME (LOSS) BEFORE TAXES (193,081) (850,304) 413,534
INCOME (TAX) BENEFIT (Note 7) -- (318,991) (6,399)
------------ ------------ ------------
NET INCOME (LOSS) $ (193,081) $ (531,313) $ 407,135
============ ============ ============
BASIC INCOME (LOSS) PER SHARE $ (0.01) $ (0.03)
============ ============
FULLY DILUTED INCOME (LOSS) PER
SHARE $ (0.01) $ (0.03)
============ ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 21,189,000 21,100,000
============ ============
</TABLE>
5
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
Common Stock
------------------------- Retained
Shares Amount Earnings
----------- ----------- -----------
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
----------- ----------- -----------
6
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>
Common Stock
-------------------------- Retained
Shares Amount Earnings
----------- ----------- -----------
<S> <C> <C> <C>
Balance, June 30, 1999 21,090,600 $ 2,498,769 $ 1,836,979
Common stock issued for
cash at $5.00 per share 39,600 198,000 --
Common stock issued for
services at $5.00 per share 60,000 300,000 --
Common stock retired at
$5.00 per share (1,200) (6,000) --
Contributed capital by subsidiary -- 1,528,451 --
Net loss for the year ended
June 30, 2000 -- -- (1,236,763)
----------- ----------- -----------
Balance, June 30, 2000 21,189,000 4,519,220 600,216
Net loss for the three months ended
September 30, 2000 (unaudited) -- -- (193,081)
----------- ----------- -----------
Balance, September 30, 2000 (unaudited) 21,189,000 $ 4,519,220 $ 407,135
=========== =========== ===========
</TABLE>
7
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
For the Inception on
Three Months Ended May 19,
September 30, 1998 Through
-------------------------- September 30,
2000 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (193,081) $ (531,313) $ 407,135
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 43,941 37,353 288,283
Common stock issued for services -- 300,000 300,000
Changes in assets and liabilities:
(Increase) in prepaid expenses -- 9 (4,724)
(Increase) decrease in related party receivables 3,291 -- (735)
(Increase) in deposits (1,182) -- (16,182)
Increase (decrease) in accounts payable 120,251 (11,731) 232,138
Increase (decrease) in accrued liabilities -- 247,379 --
Increase (decrease) in accrued expenses 4,461 -- 4,461
Increase in client funds -- -- 254,032
Increase (decrease) in provision for income taxes -- (318,991) (75,000)
----------- ----------- -----------
Net Cash Provided (Used) by Operating Activities (22,319) (277,294) 1,389,408
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in bank -- (300,000) --
Decrease (increase) in trading securities 47,997 1,646,845 2,685,551
Increase (decrease) in margin account (53,603) (724,739) (705,184)
Purchase of property and equipment -- (283,869) (2,286,371)
----------- ----------- -----------
Net Cash (Used) Provided by Investing Activities (5,606) 338,237 (306,004)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable -- -- 208,000
Payments on notes payable (234) (315) (2,061)
Stock issuance costs -- -- (250,000)
Common stock issued for cash -- -- 1,301,000
Retirement of common stock -- -- (6,000)
Advances to related parties -- -- (2,337,867)
Cash from subsidiaries -- -- 40,070
----------- ----------- -----------
Net Cash (Used) Provided by Financing Activities (234) (315) (1,046,858)
----------- ----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (28,159) 60,628 36,546
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 36,546 52,627 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 14,690 $ 113,255 $ 36,546
=========== =========== ===========
</TABLE>
8
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
From
For the Inception on
Three Months Ended May 19,
September 30, 1998 Through
--------------------- September 30,
2000 1999 2000
-------- -------- ----------
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest $ 8,013 $ 27,395 $ 181,936
Income taxes $ -- $ -- $ 81,339
NON-CASH ITEMS
Common stock issued for services $ -- $ 300,000 $ 300,000
Contributed capital by subsidiary $ -- $ -- $1,528,451
9
<PAGE>
OXIR INVESTMENTS, INC. AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and June 30, 2000
NOTE 1 - CONDENSED CONSOLIDATED 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 consolidated
financial position, result of operations and cash flows at
September 30, 2000 and 1999 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
financials tatements be read in conjunction with the financial
statements and notes thereto included in the Company's June 30,
2000 audited consolidated financial statements. The results of
operations for the period ended September 30, 2000 and 1999 are
not necessarily indicative of the operating results for the full
years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not
yet established an ongoing source of revenues sufficient to cover
its operating costs and allow it to continue as a going concern.
The ability of the Company to continue as a going concern is
dependent on the Company's ability to establish an ongoing source
of revenues or obtain adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to establish
an ongoing source of revenues or obtain adequate capital, it could
be forced to cease operations.
In order to continue as a going concern, develop a reliable source
of revenues, and achieve a profitable level of operations, the
Company will need, among other things, additional capital
resources. Management's plans to continue as a going concern
include raising additional capital through sales of common stock,
the proceeds of which would be used to continue to develop its
existing projects which include a real estate, financial and
computer systems activities. Other plans may include the raising
of additional capital and the continued development of its current
and planned operations. Private placements and other sources are
being considered. However, management cannot provide any
assurances that the Company will be successful in accomplishing
any of its plans.
The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans
described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The
accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a
going concern.
10
<PAGE>
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, establishing new projects
and launching 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, 2000 compared to the three
months ended September 30, 1999.
The Company reported net loss applicable to common stockholders of
$193,081 or $.01 per share, for the three-month period ended September 30, 2000
("first quarter of 2000"), compared to a $531,313 loss, or $.03 per share, for
the three month period ended September 30, 1999 ("first quarter of 1999"). This
increase in net income is due primarily to the increase in the Company sales and
gross margin.
The Company recognized $335,981 in sales during the first quarter of
2000 compared to no sales in 1999. The Company realized a gain on the sale of
marketable securities of $4,850 and no unrealized gain during the first quarter
of 2000, compared to $665,871 realized gain and $557,289 unrealized gain during
the first quarter of 1999. The difference is attributed to sale of marketable
securities to finance operations.
During the first quarter of 2000, the Company had interest expense of
$8,013 compared to $35,638 for the 1999 period, which reflects interest paid on
the Company's margin accounts. General and administrative expenses decreased to
$422,910 for the first quarter of 2000 from $1,980,660 for the first quarter of
1999, and rent expense increased to $54,577 from $19,813 for the same period.
The drastic decrease in G&A expenses is attributed to large amount invested in
1999 in launching of new operations and new subsidiaries in Russia. The
depreciation expense for the first quarter 2000 was $43,942 compared to $37,353
for the first quarter of 1999.
A tax provision has been made for the first quarter of 2000 and the
fiscal year ended June 30, 2000 based on pre-tax capital gains. The Company pays
taxes under both the British Virgin Islands and United States tax laws.
Liquidity and Capital Resources
Total cash and cash equivalents at September 30, 2000 was $36,546
compared to $64,705 at June 30, 2000. Also at September 30, 2000, the Company
had $8,931 in investments in trading securities compared to $ 56,928 at June 30,
2000.
Net cash used by operating activities for the first quarter of 2000 was
$22,319 compared to $277,294 used in the first quarter of 1999. This was due
primarily to the decrease in the Company's net loss for the quarter.
Net cash used by investing activities for the first quarter of 2000 was
$5,606 compared to $338,237 provided for the comparable 1999 period. This is
attributed primarily to the decrease in trading securities and consequently
decreases in margin account.
Net cash used by financing activities was $234 for the first quarter of
2000 compared to $315 used in the first quarter of 1999. This reflects the
payments on notes payable.
11
<PAGE>
At September 30, 2000 the Company had total assets of $5,349,559 and
stockholders' equity of $4,926,355. In comparison, at June 30, 2000, the Company
had total assets of $5,471,765 and total stockholders' equity of $5,119,436.
Working capital was a negative $168,543 at September 30, 2000, compared to a
negative $21,231 at June 30, 2000.
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 shortage, which could curtail the Company's
operations.
In the opinion of management, inflation has not had a material effect
on the operations of the Company.
Risk Factors and Cautionary Statements
This Report contains certain forward-looking statements. The Company
wishes to advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: the possible success of the Company's varied projects, the volatility
of the financial markets in which the Company invests, the ability of the
Company to fund its current and future projects and its ability to meet its cash
and working capital needs, and other risks detailed in the Company's periodic
report filings with the Securities and Exchange Commission.
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
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
12
<PAGE>
ITEM 5. OTHER INFORMATION
As of July 1, 2000 Mr. Alexander Sarkissian, Vice President of Economic Affairs,
had resigned from his position.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
None.
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: November 17, 2000 By: /s/ VASSILI I. OXENUK
----------------------- -------------------------
Vassili I. Oxenuk,
President and Director
(Principal Executive Officer)
Date: November 17, 2000 By: /s/ MICHAEL SMIRNOV
----------------------- -----------------------
Michael Smirnov, Vice President,
Chief Financial Officer and
Director (Principal Financial Officer)
13
