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 September 30, 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 April 27, 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 September 30, 1995 and the related
statements of operations and accumulated deficit, and cash flows for
the three-month and six-month periods ended September 30, 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
April 27, 1996 2 <PAGE>
PART I
FINANCIAL INFORMATION
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1995 (UNAUDITED) and MARCH 31, 1995 (AUDITED)
ASSETS
September 30, March 31,
1995 1995
(Unaudited) (Audited)
CURRENT ASSETS
Cash and cash equivalents (Note 2) $ 10,506 $ -
Trade accounts receivable, net of
allowance for doubtful accounts of $15,336
and $1,451 183,312 76,718
Merchandise inventories (Note 2) 21,868 22,618
Loans receivable - officer, including
accrued interest of $5,905 and $5,855 (Note 3) 87,168 34,644
Loans receivable - other, including accrued
interest of $1,935 and $1,054 (Note 3) 23,485 23,104
TOTAL CURRENT ASSETS 326,339 157,084
PROPERTY AND EQUIPMENT, at cost (Note 2)
Office furniture, equipment and library 73,626 68,487
Transportation equipment 55,546 55,546
129,172 124,033
Less: Accumulated depreciation 86,493 78,311
42,679 45,722
LOANS RECEIVABLE - OFFICER (Note 3) 316,161 331,546
OTHER ASSETS
Deposits 959 959
Investments (Note 2) 27,035 27,035
27,994 27,994
TOTAL ASSETS $713,173 $562,346
See accompanying notes to condensed financial statements and
management's discussion and analysis of financial condition and
results of operations.
3
<PAGE>
PART I
FINANCIAL INFORMATION
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1995 (UNAUDITED) and MARCH 31, 1995 (AUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, March 31,
1995 1995
(Unaudited) (Audited)
CURRENT LIABILITIES
Cash overdraft $ - $ 6,696
Accounts payable and accrued expenses 172,670 58,351
Note payable - bank (Note 4) 150,000 150,000
Deferred income taxes payable (Note 2) 6,874 -
Payroll taxes payable 2,638 2,566
Current portion - long-term debt (Note 5) 14,923 13,631
TOTAL CURRENT LIABILITIES 347,105 231,244
LONG-TERM DEBT, net of current portion
(Note 5) 26,033 34,446
373,138 265,690
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 (118,466) (161,845)
TOTAL STOCKHOLDERS' EQUITY 340,035 296,656
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $713,173 $ 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 SIX MONTHS ENDED
SEPTEMBER 30, 1995 AND 1994
Three Months Ended Six Months Ended
September 30, September 30,
1995 1994 1995 1994
SALES (Note 6) $ 328,491 $ 68,791 $ 634,246 $162,223
COST OF SALES 151,338 48,418 373,212 98,440
GROSS PROFIT 177,153 20,373 261,034 63,783
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 103,736 91,744 221,520 179,253
INCOME (LOSS) FROM
OPERATIONS 73,417 (71,371) 39,514 (115,470)
OTHER INCOME (EXPENSE)
Interest income - officer
loans (Note 3) 6,119 6,358 12,201 12,602
Interest income -
affiliated corporation
(Note 3) - 1,039 - 2,181
Interest income - other
(Notes) 441 - 881 -
Miscellaneous expense - (2,642) - -
Interest expense (2,893) (2,429) (6,358) (8,617)
Gain on sale of investment
in affiliated corporation
(Note 3) - 4,972 - 4,972
Miscellaneous income 990 - 4,658 -
Occupancy fee income -
affiliated corporation
(Note 3) - 750 - 1,650
4,657 8,048 11,382 12,788
INCOME (LOSS) BEFORE
INCOME TAX PROVISION 78,074 (63,323) 50,896 (102,682)
INCOME TAX PROVISION
(Note 2) 6,717 - 7,517 800
NET INCOME (LOSS) $ 71,357 $ (63,323) 43,379 (103,482)
ACCUMULATED DEFICIT, beginning of period (161,845) (16,958)
ACCUMULATED DEFICIT, end of period $ (118,466) $ (120,440)
NET INCOME (LOSS)
PER SHARE $ .0002 $ (.0002) $ .0001 $ (.0003)
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)
SIX MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Six Months Ended
September 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 43,379 $(103,482)
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 8,182 8,568
Gain on sale of investment in affiliate - (4,972)
Deferred income taxes 6,874 -
Changes in:
Trade accounts receivable, net (106,594) 133,360
Merchandise inventories 750 (2,462)
Deposits - 43,551
Accounts payable and accrued expenses 114,319 (59,045)
Customers deposits - (52,856)
Payroll taxes payable 72 (15,830)
23,603 50,314
NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES 66,982 (53,168)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (5,139) -
Proceeds from sale of investment
in affiliate - 9,972
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (5,139) 9,972
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit borrowings - 5,001
Reduction of long-term debt (7,121) (2,448)
Collection of affiliated corporation loans - 98,464
Increase in related party loans receivable (37,520) (15,196)
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (44,641) 85,821
NET INCREASE IN CASH 17,202 42,625
CASH OVERDRAFT, beginning of period (6,696) (3,923)
CASH, end of period $ 10,506 $ 38,702
See accompanying notes to condensed financial statements and management's
discussion and analysis of financial condition and results of operations.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 30, 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 six-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
SIX MONTHS ENDED SEPTEMBER 30, 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 six-month period ended September 30, 1995, the
Company utilized net operating loss carryforwards to reduce
its income tax liabilities by $8,849.
The Company has available at September 30, 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 $6,087 and $800 and $8,617 and $800 for the six months
ended September 30, 1995 and 1994, respectively.
8
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 30, 1995
NOTE 3 - RELATED PARTY TRANSACTIONS
Related party loans receivable consisted of the following
at September 30, 1995:
September 30, 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. $ 351,798 $ 366,190
Loan receivable - officer, due on
demand, bearing interest at 6.5% per
annum. 51,531 -
403,329 366,190
Loans receivable - other (officer
family members) due on demand,
bearing interest at 8% per annum. 23,485 23,104
426,814 389,294
Less current portion - loans
receivable - officer 87,168 34,644
Less current portion - loans
receivable - other 23,485 23,104
110,653 57,748
Loans receivable - officer -
noncurrent portion $ 316,161 $ 331,546
9
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 30, 1995
NOTE 3 -RELATED PARTY TRANSACTIONS (Continued)
Current maturities of related party receivables over the next five
years were as follows as of September 30, 1995:
Year Ending September 30,
1996 $ 110,653
1997 31,712
1998 33,824
1999 36,077
2000 38,480
Thereafter 176,068
$ 426,814
During the six months ended September 30, 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 six months ended September 30, 1995 and 1994,
includes interest of $13,082 and $14,783 respectively, earned from
related party loans receivable.
10
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 30, 1995
NOTE 4 - NOTE PAYABLE-BANK
Note payable - bank consisted of the following at September 30, 1995:
September 30, 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% (10.75%
at September 30, 1995) per annum.
Maximum borrowings available
under the line of credit are
$150,000. The line of credit was
fully utilized at September 30,
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
NOTE 5 - LONG-TERM DEBT
At September 30, 1995, the Company's long-term debt consisted of the
following:
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% (10.75%
at September 30, 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. $ 24,974 $ 29,414
Contract payable - transportation 15,982 18,663
equipment, payable in monthly 40,956 48,077
installments of $581, including
principal and interest, at 9.16%
per annum, scheduled to mature
in April, 1998. 14,923 13,621
Less Current Portion $ 26,033 34,446
11
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 30, 1995
NOTE 5 - LONG TERM DEBT (Continued)
Current maturities of long-term debt over the next three years were
as follows as of September 30, 1995:
Year Ending September 30,
1996 $ 14,923
1997 16,534
1998 9,499
$ 40,956
NOTE 6 - MAJOR CUSTOMERS
During the six month period ended September 30, 1995, 63.2% of the
Company's revenue was derived from sales to three major customers.
Sales to the three customers of $243,159, $82,206 and $75,150
accounted for 38.3%, 13%, and 11.9%, respectively, of total revenue.
During the six months ended September 30, 1994, sales to four
customers of $52,906, $35,271, $31,315 and $29,273, accounted for
32%, 21.4%, 19% and 17.7%, respectively, of total revenue.
No other single customer had sales exceeding 10% of total revenue for
the six months ended September 30, 1995 and 1994.
12
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
RESULTS OF OPERATIONS FOR THE SIX-MONTH PERIOD ENDED SEPTEMBER 30,
1995 AS COMPARED TO THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 1994:
Six Months Ended September 30:
Net sales for the six months ended September 30, 1995 were
$634,246 versus $162,223 for the six months ended September
30, 1994, an increase of $472,023.
During the six months ended September 30, 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 1.9% to 41.2% as
compared to the same period in fiscal 1995. The dollar
amount of gross profit increased $197,251 as compared to the
six months ended September 30, 1994, due to higher sales
volume in the current period.
Interest income for the six months ended September 30, 1995
includes interest earned from officer and individual related
party loans in the amounts of $12,201 and $881,
respectively. Interest income for the six months ended
September 30, 1994 includes interest earned from officer and
an affiliated corporation loans in the amounts of $12,602
and $2,181, respectively.
Operating expenses totalled $221,520 for the six months
ended September 30, 1995, compared to the six months which
ended September 30, 1994, which reflected operating expenses
of $179,253, an increase of $42,267. 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 $27,896 to $98,735 during the
current period and higher insurance costs which increased
$6,499 during the six months ended September 30, 1995.
Other general and administrative expenses decreased $6,013
during the current six-month period.
The six months ended September 30, 1995, showed net income
of $43,379 as compared to a net loss of $103,482 for the
six months ended September 30, 1994.
13
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30,
1995 AS COMPARED TO THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 1994:
Quarter Ended September 30:
Net sales for the quarter ended September 30, 1995 were
$328,491 versus $68,791 for the three months ended September
30, 1994, an increase of $259,700.
During the quarter ended September 30, 1995, the Company
shipped merchandise from a backlog of orders to the
Government of Kenya. Sales to the Government of Kenya
during the current quarter were $243,159 which explains most
of the comparative increase in sales. Gross profit
percentage for the current quarter increased 24.3% to 53.9%
as compared to 29.6% for the same period in fiscal 1995.
This substantial percentage increase is due to the current
quarter's sales being made at significantly higher margins
to the Government of Kenya as compared to sales of items
made at much lower margins to the Government of Norway
during the quarter ended September 30, 1994. The dollar
amount of gross profit increased $156,780 as compared to the
quarter ended September 30, 1994, due to higher sales volume
in fiscal 1996.
Interest income for the quarters ended September 30, 1995
and 1994 included interest earned from officer in the
amounts of $6,119 and $6,358, respectively.
During the quarter ended September 30, 1995, interest income
of $441 was earned from loans made to officer family
members. During the quarter ended September 30, 1994,
$1,039 was earned from loans to an affiliated corporation.
Operating expenses totalled $103,736 for the quarter ended
September 30, 1995, compared to the quarter which ended
Septmber 30, 1994, which reflected operating expenses of
$91,744 an increase of $11,992. The increase is due
primarily to higher salaries and insurance paid during the
quarter ended September 30, 1995. These expenses totalled
$56,658 for the three months ended September 30, 1995 as
compared to $42,188 for the same period in fiscal 1995, an
increase of $14,470. The remaining change in operating
expenses during the current period was a result of other
expenses decreasing approximately $2,500 as compared to the
three months ended Septemebr 30, 1994.
The quarter ended Septemebr 30, 1995, showed net income of
$78,074 as compared to a net loss of $63,323 for the quarter
ended September 30, 1994.
14
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
Capital Resources and Liquidity
Operating Activities
During the six months ended September 30, 1995, net cash
provided by operations was $66,892. During the six months
ended September 30, 1994, net cash of $53,168 was used by
operations. The Company's working capital deficiency at
September 30, 1995 was $20,766, a decrease of $53,994 as
compared to a deficiency of $74,160 at March 31, 1995.
Trade receivables increased $106,594 from $76,718 at March
31, 1995 to $183,312 at September 30, 1995. This increase
was due primarily to the Company's increased sales volume
which generated higher receivables at September 30, 1995.
Accounts payable and accrued expenses increased $114,319 to
$172,670 at September 30, 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 $5,139 in fiscal
1996 was for the acquisition of computer equipment. During
the quarter ended September 30, 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 $44,641 for the
six months ended September 30, 1995. During the six months
ended September 30, 1994, net cash of $85,821 was provided
by financing activities.
The Company repaid $7,121 of its long term debt during the
six months ended September 30, 1995.
During the six months ended September 30, 1995, the Company
loaned its president an additional $51,531.
15
<PAGE>
USA INTERNATIONAL DEFENSE SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1995
Financing Activities (Continued):
During the six months ended September 30, 1994, the Company
borrowed $35,000 on its line of credit and repaid $30,000 on
its bank term loan. The Company loaned its president an
additional $15,000 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.
FINANCIAL CONDITION AS OF September 30, 1995
The following financial summary shows the equity of the Company:
September 30, March 31,
1995 1995
(Unaudited) (Audited)
Total assets $713,173 $562,346
Total liabilities 373,138 265,690
Stockholders' Equity $340,035 $296,656
As of September 30, 1995, the Company's ratio of current assets
to current liabilities was .94 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 EDWARD KISLINGER
Chairman of the Board and President
(Chief Financial Officer)
Date: August 22, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
<CASH> 10,506
<SECURITIES> 0
<RECEIVABLES> 198,648
<ALLOWANCES> 15,336
<INVENTORY> 21,868
<CURRENT-ASSETS> 326,339
<PP&E> 129,172
<DEPRECIATION> 86,493
<TOTAL-ASSETS> 713,173
<CURRENT-LIABILITIES> 347,105
<BONDS> 26,033
0
0
<COMMON> 458,501
<OTHER-SE> (118,466)
<TOTAL-LIABILITY-AND-EQUITY> 713,173
<SALES> 634,246
<TOTAL-REVENUES> 651,986
<CGS> 373,212
<TOTAL-COSTS> 373,212
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,358
<INCOME-PRETAX> 50,986
<INCOME-TAX> 7,517
<INCOME-CONTINUING> 43,379
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,379
<EPS-PRIMARY> .001
<EPS-DILUTED> .001
</TABLE>
