SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1995 Commission File Number 33-10737-LA
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 95-3891884
(State or other Jurisdiction of (IRS Employer
incorporation or organization Identification Number)
2700 Neilson Way, Suite 1221
Santa Monica, California 90405
(Address of principal (Zip Code)
Executive offices)
Registrant's telephone number, including area code:
(310) 392-4595
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the close of business
on November 7, 1996.
CLASS SHARES OUTSTANDING
Common Stock - $.00001 par value 308,800,000
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
USA International Defense Systems, Inc.
Santa Monica, California
We have reviewed the accompanying balance sheet of USA International
Defense Systems, Inc. as of December 31, 1995 and the related
statements of operations and accumulated deficit, and cash flows for
the three-month and nine-month periods ended December 31, 1995 and
1994. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical review procedures to financial data and making inquiries
of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet of USA International Defense
Systems, Inc. as of March 31, 1995 and the related statements of
operations, stockholders' equity, and cash flows (not presented
herein); and in our report dated September 8, 1995, we expressed an
unqualified opinion on those financial statements. In our opinion,
the information set forth in the accompanying condensed balance sheet
as of March 31, 1995, is fairly stated in all material respects in
relation to the balance sheet from which it has been derived.
s/Block & Handelman
Los Angeles, California
November 26, 1996 2 <PAGE>
PART 1
FINANCIAL INFORMATION
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
CONDENSED BALANCE SHEETS
DECEMBER 31, 1995 (UNAUDITED) and MARCH 31, 1995 (AUDITED)
ASSETS
December 31, March 31,
1995 1995
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 35,665 $ -
Trade accounts receivable, net of
allowance for doubtful accounts of $15,336
and $1,451 180,187 76,718
Merchandise inventories (Note 2) 21,868 22,618
Loans receivable - officer, including
accrued interest of $6,232 and $5,855
(Note 3) 70,901 34,644
Loans receivable - other, including accrued
interest of $2,370 and $1,054 (Note 3) 23,920 23,104
TOTAL CURRENT ASSETS 332,541 157,084
PROPERTY AND EQUIPMENT, at cost (Note 2)
Office furniture, equipment and library 74,017 68,487
Transportation equipment 55,546 55,546
129,563 124,033
Less: Accumulated depreciation 90,679 78,311
38,884 45,722
LOANS RECEIVABLE - OFFICER (Note 3) 314,209 331,546
OTHER ASSETS
Deposits 959 959
Investments (Note 2) 27,035 27,035
27,994 27,994
TOTAL ASSETS $713,628 $562,346
See accompanying notes to condensed financial statements and
management's discussion and analysis of financial condition and
results of operations.
3
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
CONDENSED BALANCE SHEETS
DECEMBER 31, 1995 (UNAUDITED) and MARCH 31, 1995 (AUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, March 31,
1995 1995
(Unaudited) (Audited)
CURRENT LIABILITIES
Cash overdraft $ - $ 6,696
Accounts payable and accrued expenses 178,473 58,351
Note payable - bank (Note 4) 150,000 150,000
Income taxes payable (Note 2) 738 -
Payroll taxes payable 12,926 2,566
Current portion - long-term debt (Note 5) 40,311 13,631
TOTAL CURRENT LIABILITIES 382,448 231,244
LONG-TERM DEBT, net of current portion
(Note 5) 22,055 34,446
404,503 265,690
COMMITMENTS (Notes 4 and 5)
STOCKHOLDERS' EQUITY (Note 2)
Common stock, par value $.00001 per share;
750,000,000 authorized shares, 325,050,000
shares issued, 308,800,000 shares
outstanding 498,501 498,501
Treasury shares at cost, 16,250,000 shares (40,000) (40,000)
458,501 458,501
Accumulated deficit (149,376) (161,845)
TOTAL STOCKHOLDERS' EQUITY 309,125 296,656
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $713,628 $ 562,346
See accompanying notes to condensed financial statements and
management's discussion and analysis of financial condition and
results of operations.
4
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
THREE MONTHS AND NINE MONTHS ENDED
DECEMBER 31, 1995 AND 1994
Three Months Ended Nine Months Ended
December 31, December 31,
1995 1994 1995 1994
SALES (Note 6) $ 67,422 $ 60,405 $701,668 $222,628
COST OF SALES 46,110 42,290 419,322 140,730
GROSS PROFIT 21,312 18,115 282,346 81,898
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 58,931 64,427 280,451 243,680
INCOME (LOSS) FROM
OPERATIONS (37,619) (46,312) 1,895 (161,782)
OTHER INCOME (EXPENSE)
Interest income - officer loans
(Note 3) 6,231 7,119 18,432 19,721
Interest income - affiliated
corporation (Note 3) - - - 2,181
Interest income - other (Note 3) 435 - 1,316 -
Interest expense (6,093) (3,653) (12,451) (12,270)
Gain on sale of investment in
affiliated corporation (Note 3) - - - 4,972
Miscellaneous income - 1,080 4,658 1,080
Occupancy fee income - affiliated
corporation (Note 3) - - - 1,650
573 4,546 11,955 17,334
INCOME (LOSS) BEFORE
INCOME TAX PROVISION
(BENEFITS) (37,046) (41,766) 13,850 (144,448)
INCOME TAX PROVISION (BENEFITS)
(Note 2) (6,136) - 1,381 800
NET INCOME (LOSS) $(30,910) $(41,766) 12,469 (145,248)
ACCUMULATED DEFICIT, beginning
of period (161,845) (16,958)
ACCUMULATED DEFICIT, end of period $ (149,376) $(162,206)
NET INCOME (LOSS) PER SHARE $ (.0002) $ (.0002) $ .0001 $ (.0005)
WEIGHTED AVERAGE SHARES
OUTSTANDING 308,800,000 308,800,000 308,800,000 308,800,000
See accompanying notes to condensed financial statements and management's
discussion and analysis of financial condition and results of operations.
5
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED DECEMBER 31, 1995 AND 1994
Nine Months Ended
December 31,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 12,469 $(145,248)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Non-cash items included in net income (loss):
Depreciation and amortization 12,368 12,852
Gain on sale of investment in affiliate - (4,972)
Changes in:
Trade accounts receivable, net (103,469) 171,339
Merchandise inventories 750 (2,462)
Receivables - other - (1,222)
Deposits - 69,699
Other current assets - (2,021)
Accounts payable and accrued expenses 120,122 (98,080)
Customers deposits - (52,856)
Payroll taxes payable 10,360 (15,883)
Income taxes payable 738 -
40,869 76,394
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 53,338 (68,854)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (5,530) -
Proceeds from sale of investment in affiliate - 9,972
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (5,530) 9,972
CASH FLOWS FROM FINANCING ACTIVITIES
Reduction of line of credit borrowings - (7,565)
Increase (decrease) in long-term debt 14,289 (3,714)
Increase in related party loans receivable (19,736) (36,370)
Collection of affiliated corporation loans - 98,464
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (5,447) 50,815
NET INCREASE (DECREASE) IN CASH 42,361 (8,067)
CASH OVERDRAFT, beginning of period (6,696) (3,923)
CASH (OVERDRAFT), end of period $ 35,665 $ (11,990)
See accompanying notes to condensed financial statements and management's
discussion and analysis of financial condition and results of operations.
6
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1995
NOTE 1 - In the opinion of the Company, the accompanying unaudited
financial statements contain all adjustments necessary to
present fairly its financial position and the results of
its operations and cash flows for the periods shown. Such
adjustments consisted only of normal recurring items.
The results of operations for the three-month and nine-
month periods is not necessarily indicative of the results
to be expected for a full year of operations.
The financial statements and notes are presented as
permitted by Form 10-Q and do not contain certain
information included in the annual financial statements and
notes.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General
The Company is in the business of supplying replacement parts
and spare parts for airplanes owned by foreign governments and
for airlines, worldwide.
B. Inventories and Recognition of Revenue
Inventories are valued at the lower of cost (first-in, first-out
method) or market. Revenue from goods provided under customer
contracts is recognized when the merchandise is shipped.
Deposits received from customers under the contracts are
deferred and shown as a current liability until shipment.
C. Property and Equipment
Depreciation is computed by using the straight-line method over
the estimated service lives of the assets which range from 5 to
7 years. When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the
accounts, and any resulting gain or loss is recognized in income
for the period. The cost of maintenance and repairs is charged
to operations as incurred; significant renewals and improvements
are capitalized. Deduction is made for retirements resulting
from renewals or improvements.
D. Investments
The Company has an investment in a company in which it owns less
than a 20% interest. The investment is carried at cost which
approximates market value.
7
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1995
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
E. Income Taxes
The Company records its taxes in accordance with Financial
Accounting Standards Board Statement 109, Accounting for Income
Taxes. Income taxes are provided for the tax effects of
transactions reported in the financial statements and consists
of taxes currently due plus deferred taxes. Deferred taxes are
recognized for temporary differences between the basis of assets
and liabilities for financial statement and income tax purposes.
For the nine-month period ended December 31, 1995, the Company
utilized net operating loss carryforwards to reduce its income
tax liabilities by $7,912.
The Company has available at December 31, 1995 unused Federal
and state net operating loss carryforwards of approximately
$80,000 and $59,000, respectively, which may be applied against
future taxable income, expiring in years 2006 through 2012.
F. Reclassification
Certain prior period balances have been reclassified to conform
with the current period's presentation.
G. Net Income (Loss) Per Share
Net income (loss) per share has been computed based on the
weighted average common shares outstanding during each period.
H. Statement of Cash Flows
Cash payments related to interest expense and income taxes were
$10,164 and $800 and $11,097 and $800 for the nine months ended
December 31, 1995 and 1994, respectively.
8
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1995
NOTE 3 - RELATED PARTY TRANSACTIONS
Related party loans receivable consisted of the following at December
31, 1995:
December 31, March 31,
1995 1995
(Unaudited) (Audited)
Loan receivable - officer, payable in
quarterly installments of $12,880,
including principal and interest at 6.5%
per annum, scheduled to mature in April,
2004. $ 344,425 $366,190
Loan receivable - officer, due on demand,
bearing interest at 6.5% per annum. 40,685 -
385,110 366,190
Loans receivable - other (officer family
members) due on demand, bearing interest
at 8% per annum. 23,920 23,104
409,030 389,294
Less current portion - loans receivable -
officer 70,901 34,644
Less current portion - loans receivable -
other 23,920 23,104
94,821 57,748
Loans receivable - officer - noncurrent
portion $ 314,209 $ 331,546
Current maturities of related party receivables over the next five
years were as follows as of December 31, 1995:
Year Ending December 31,
1996 $94,821
1997 32,228
1998 34,374
1999 36,663
2000 39,105
Thereafter 171,839
$ 409,030
9
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1995
NOTE 3 - RELATED PARTY TRANSACTIONS (Continued)
During the nine months ended December 31, 1994, the Company had
unsecured advances due from an affiliated corporation, USA
International Chemical, Inc. (Chemical) which bore interest at 6.5%
per annum. The Company also shared common office facilities in Santa
Monica, California with Chemical. The Company charged Chemical $300
per month for its share of occupancy expenses. On September 23,
1994, when the Company sold its investment in Chemical and recognized
a gain of $4,972, the office sharing arrangement terminated and all
unsecured advances were repaid to the Company by Chemical.
Interest income for the nine months ended December 31, 1995 and 1994,
includes interest of $19,748 and $21,902 respectively, earned from
related party loans receivable.
NOTE 4 - NOTE PAYABLE-BANK
Note payable - bank consisted of the following at December 31, 1995:
December 31, March 31,
1995 1995
(Unaudited) (Audited)
Note payable to bank under a line of
credit agreement. The note is unsecured
and personally guaranteed by the
president of the Company. The note bears
interest at prime plus 2% (10.50% at
December 31, 1995) per annum. Maximum
borrowings available under the line of
credit are $150,000. The line of credit
was fully utilized at December 31, 1995.
The note matured on July 31, 1995 and was
extended by the bank until September 29,
1995. In October 1995, the line of
credit was renewed for an additional
year. The note is scheduled to mature on
October 5, 1996. $150,000 150,000
10
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1995
NOTE 5 - LONG-TERM DEBT
At December 31, 1995, the Company's long-term debt consisted of the
following:
December 31, March 31,
1995 1995
(Unaudited) (Audited)
Note payable to related party corporation
(officer family members) due on demand
non-interest bearing. $ 25,000 $ -
Term note payable to bank. The note is
unsecured and personally guaranteed by the
president of the Company. The note bears
interest at prime plus 2% (10.50% at
December 31, 1995) per annum. The note is
payable in monthly installments, including
principal and interest, of $956 and is
scheduled to mature on January 15, 1998. 22,772 29,414
Contract payable - transportation
equipment, payable in monthly installments
of $581, including principal and interest,
at 9.16% per annum, scheduled to mature in
April, 1998. 14,594 18,663
62,366 48,077
Less current portion 40,311 13,631
$ 22,055 34,446
Current maturities of long-term debt over the next three years were
as follows as of December 31, 1995:
Year Ending December 31,
1996 $ 40,311
1997 16,963
1998 5,092
$ 62,366
11
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED DECEMBER 31, 1995
NOTE 6 - MAJOR CUSTOMERS
During the nine-month period ended December 31, 1995, 59.3% of the
Company's revenue was derived from sales to three major customers.
Sales to the three customers of $243,159, $97,351 and $75,150
accounted for 34.7%, 13.9%, and 10.7%, respectively, of total
revenue.
During the nine months ended December 31, 1994, sales to five
customers of $64,125, $52,906, $31,315, $30,950 and 26,163, accounted
for 28.8%, 23.8%, 14.1%, 13.9% and 11.8%, respectively, of total
revenue.
No other single customer had sales exceeding 10% of total revenue for
the nine months ended December 31, 1995 and 1994.
12
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1995
RESULTS OF OPERATIONS FOR THE NINE-MONTH PERIOD ENDED DECEMBER 31,
1995 AS COMPARED TO THE NINE-MONTH PERIOD ENDED DECEMBER 31, 1994:
Nine Months Ended December 31:
Net sales for the nine months ended December 31, 1995 were
$701,668 versus $222,628 for the nine months ended December
31, 1994, an increase of $479,040.
During the nine months ended December 31, 1995, the Company
sold merchandise to several new customers and continued to
ship merchandise from a backlog of orders to foreign
governments which were being processed as rapidly as
possible, which explains the comparative increase in sales
during the current period. Gross profit percentage for the
current period increased approximately 3.4% to 40.2% as
compared to the same period in fiscal 1995. The dollar
amount of gross profit increased $200,448 as compared to the
nine months ended December 31, 1994, due to higher sales
volume in the current period.
Interest income for the nine months ended December 31, 1995
includes interest earned from officer and individual related
party loans in the amounts of $18,432 and $1,316,
respectively. Interest income for the nine months ended
December 31, 1994 includes interest earned from officer and
an affiliated corporation loans in the amounts of $19,721
and $2,181, respectively.
Operating expenses totalled $280,451 for the nine months
ended December 31, 1995, compared to the nine months ended
December 31, 1994, which reflected operating expenses of
$243,680, an increase of $36,771. The increase is due
primarily to bad debt expense of $13,885 recorded during the
current period, greater salaries and related variable
expenses which increased $18,446 to $116,608 during the
current period and higher insurance costs which increased
$4,446 during the nine months ended December 31, 1995.
The nine months ended December 31, 1995, showed net income
of $12,469 as compared to a net loss of $145,248 for the
nine months ended December 31, 1994.
13
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1995
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31,
1995 AS COMPARED TO THE THREE-MONTH PERIOD ENDED December 31, 1994:
Quarter Ended December 31:
Net sales for the quarter ended December 31, 1995 were
$67,422 versus $60,405 for the three months ended December
31, 1994, a slight increase of $7,017.
Gross profit percentage for the current quarter increased
1.6% to 31.6% as compared to 30% for the same period in
fiscal 1995. This small increase is due to the current
quarter's sales being made at substantially the same margins
to customers as during the year ended December 31, 1994.
The dollar amount of gross profit increased $3,197 as
compared to the quarter ended December 31, 1994, due to
slightly higher sales and margin in fiscal 1996.
Interest income for the quarters ended December 31, 1995 and
1994 included interest earned from an officer in the amounts
of $6,231 and $7,119, respectively.
During the quarter ended December 31, 1995, interest income
of $435 was earned from loans made to officer family
members.
Operating expenses totalled $58,931 for the quarter ended
December 31, 1995, compared to the quarter ended December
31, 1994, which reflected operating expenses of $64,427 a
decrease of $5,496. The decrease is due primarily to higher
salaries and insurance paid during the quarter ended
December 31, 1994. These expenses totalled $17,874 for the
three months ended December 31, 1995 as compared to $22,300
for the same period in fiscal 1995, a decrease at $4,426.
The remaining change in operating expenses during the
current period was a result of other expenses decreasing
$1,070 as compared to the three months ended December 31,
1994.
The quarter ended December 31, 1995, showed net loss of
$30,910 as compared to a net loss of $41,766 for the quarter
ended December 31, 1994.
14
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1995
Capital Resources and Liquidity
Operating Activities
During the nine months ended December 31, 1995, net cash
provided by operations was $53,338. During the nine months
ended December 31, 1994, net cash of $68,854 was used by
operations. The Company's working capital deficiency at
December 31, 1995 was $49,907, a decrease of $24,253 as
compared to a deficiency of $74,160 at March 31, 1995.
Trade receivables increased $103,469 from $76,718 at March
31, 1995 to $180,187 at December 31, 1995. This increase
was due primarily to the Company's increased sales volume
which generated higher receivables at December 31, 1995.
Accounts payable and accrued expenses increased $120,122 to
$178,473 at December 31, 1995 as compared to $58,351 at
March 31, 1995. The increase was caused by higher purchases
in connection with increased sales orders and delays in
shipment of orders. This backlog delayed most payments to
vendors supplying merchandise.
Investing Activities
Net cash used by investing activities of $5,530 in fiscal
1996 was for the acquisition of computer equipment. During
the nine months ended December 31, 1994, the Company sold
its investment in the common stock of an affiliated
corporation, USA International Chemical, Inc. for $9,972 and
recognized a gain on the sale of $4,972.
Financing Activities
Net cash used by financing activities was $5,427 for the
nine months ended December 31, 1995. During the nine months
ended December 31, 1994, net cash of $50,815 was provided by
financing activities.
The Company borrowed $25,000 and repaid $10,711 of its long
term debt during the nine months ended December 31, 1995.
During the nine months ended December 31, 1995, the Company
loaned its president an additional $40,685 and he repaid
$21,765 of his loans receivable.
15
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1995
Financing Activities (Continued):
During the nine months ended December 31, 1994, the Company
borrowed $63,000 on its line of credit and repaid $70,565 on
its bank loan. The Company loaned its president an
additional $36,370 and advances of $98,464 which were made
to an affiliated corporation to enable it to repay bank
borrowings, pay operating expenses and to provide working
capital were repaid in full by the affiliate. Principal
payments on contracts payable totalled $3,714 for the nine
months ended December 31, 1994.
FINANCIAL CONDITION AS OF December 31, 1995
The following financial summary shows the equity of the Company:
December 31, March 31,
1995 1995
(Unaudited) (Audited)
Total assets $713,628 $562,346
Total liabilities 404,503 265,690
Stockholders' Equity $309,125 $296,656
As of December 31, 1995, the Company's ratio of current assets
to current liabilities was .87 to 1. This compares to the year
end current ratio as of March 31, 1995 of .68 to 1.
16
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
FORM 10-Q
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - Not Applicable
Item 4. Submission of Matters to Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8K - None
17
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
(Registrant)
By s/Edward Kislinger
Chairman of the Board and President
(Chief Financial Officer)
Date: January 8, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1995
<CASH> 35,665
<SECURITIES> 0
<RECEIVABLES> 195,523
<ALLOWANCES> 15,336
<INVENTORY> 21,868
<CURRENT-ASSETS> 332,541
<PP&E> 129,563
<DEPRECIATION> 90,679
<TOTAL-ASSETS> 713,628
<CURRENT-LIABILITIES> 382,448
<BONDS> 22,055
0
0
<COMMON> 458,501
<OTHER-SE> (149,376)
<TOTAL-LIABILITY-AND-EQUITY> 713,628
<SALES> 701,668
<TOTAL-REVENUES> 726,074
<CGS> 419,322
<TOTAL-COSTS> 419,322
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,451
<INCOME-PRETAX> 13,850
<INCOME-TAX> 1,381
<INCOME-CONTINUING> 12,469
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,469
<EPS-PRIMARY> .001
<EPS-DILUTED> .001
</TABLE>
