__________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
Commission File Number 33-24608-LA
USA INTERNATIONAL CHEMICAL, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-4068292
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
20720 Ventura Boulevard, Suite 210, Woodland Hills, California 91364
(Address of principal executive offices)
(818) 346-9595
(Registrant's telephone number, including area code)
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: <checked-box> NO: <square>
Common Stock, $.00001 par value, 1,341,809 issued and outstanding as of
April 30, 1997.
__________________________________________________________________________
<PAGE>2
INDEX
PAGE
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited) .....................3
ITEM 2. Management's Discussion and Analysis...................8
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings......................................9
ITEM 2. Changes in Securities..................................9
ITEM 3. Defaults upon Senior Securities........................9
ITEM 4. Submission of Matters to a Vote of Security Holders....9
ITEM 5. Other Information......................................9
ITEM 6. Exhibits and Reports on Form 8-K.......................9
<PAGE>3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>4
USA INTERNATIONAL CHEMICAL, INC.
BALANCE SHEET (UNAUDITED)
MARCH 31, 1997
ASSETS
CURRENT ASSETS
Cash $ 8,598
-------
Total Assets $ 8,598
=======
LIABILITIES AND STOCKHOLDERS DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 1,500
-------
STOCKHOLDERS' DEFICIT (NOTES 1 AND 2)
Common stock, $.00001 par value, authorized
50,000,000 shares, issued and outstanding
1,341,809 shares 13
Additional paid-in capital 311,167
Accumulated deficit (304,082)
---------
Total Stockholders Deficit 7,098
---------
Total Liabilities and Stockholders' Deficit $ 8,598
=========
See accompanying notes.
<PAGE>5
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS AND NINE MONTHS ENDED MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
<S> <C> <C> <C> <C>
MARCH 31, MARCH 31,
1997 1996 1997 1996
SALES $ -- $ -- $ -- $ --
GENERAL AND ADMINISTRATIVE EXPENSES 21,067 5,219 37,074 21,319
---------- ---------- ----------- ----------
LOSS BEFORE INCOME TAX PROVISION (21,067) (5,219) (37,074) (21,319)
PROVISION FOR INCOME TAX -- -- -- 800
---------- ---------- ---------- ----------
NET LOSS $ (21,067) $ (5,219) $ (37,074) $ (22,119)
========== ========== ========== ==========
NET LOSS PER SHARE $ (.02) $ -- $ (.03) $ (.02)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,341,809 1,329,809 1,341,809 1,329,809
</TABLE>
See accompanying notes.
<PAGE>6
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED MARCH 31, 1997 AND 1996
Nine Months Ended
MARCH 31,
1997 1996
OPERATING ACTIVITIES:
Net Cash Used in Operating Activities $(35,815) $(24,428)
--------- ---------
FINANCING ACTIVITIES:
Capital contributions 41,000 23,000
--------- ---------
Net Cash Provided by Financing Activities 41,000 3,000
--------- ---------
NET INCREASE (DECREASE) IN CASH 5,185 (1,428)
CASH at beginning of period 3,413 1,502
--------- ---------
CASH at end of period $ 8,598 $ 74
========= =========
Supplemental Disclosures of Cash Flow Information: -- --
See accompanying notes.
<PAGE>7
USA INTERNATIONAL CHEMICAL, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 1997
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information pursuant to Regulation S-B. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
months and nine months ended March 31, 1997 are not necessarily indicative of
the results that may be expected for the year ending June 30, 1997. For
further information refer to the financial statements and footnotes thereto
included in Form 10-KSB for the year ended June 30, 1996 filed by the Company.
The Company has a history of losses and is evaluating various alternatives to
recapitalize the Company which may provide the opportunity for the Company to
continue as a going concern.
It is not possible to predict the success of management's efforts. If
management is unable to achieve any of its goals, the Company will find it
necessary to undertake actions as may be appropriate to continue operations.
The financial statements do not reflect any adjustments that might result from
the outcome of this uncertainty.
NOTE 2 - SHAREHOLDERS' DEFICIT
During the nine months ended March 31, 1997 principal shareholders contributed
$41,000 to the Company.
<PAGE>8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OPERATING ACTIVITIES
There were no sales for the nine months ended March 31, 1997 or 1996.
Since the change of control of the Company in September, 1994, the Company has
not pursued any of the Company's former business. Consequently, until the
Company's current management develops or acquires new business lines, no
operating revenues are expected.
General and administrative expenses were $21,067 for the quarter ended
March 31, 1997 and $37,074 for the nine months ended March 31, 1997 compared to
$5,219 and $21,319, respectively, for the same periods last year. The increase
in expenses in the current quarter and nine months was the result of expenses
in connection with the identification and review of potential mergers, none of
which were consummated.
During the nine months ended March 31, 1997, net cash used by operations
was $35,815 compared to $24,428 for the same period last year as a result of
higher expenditures during the most recent quarter.
Net loss totaled $21,067 for the three months and $37,074 for the nine
months ended March 31, 1997, compared to a net loss of $5,219 for the three
months ended March 31, 1996 and $22,119 for the nine months ended March 31,
1996. The increase for the three months and nine months ended March 31, 1997
was the result of increased expenses discussed in the second paragraph above.
The Company will attempt to keep administrative expenses to a minimum.
However, operating losses are anticipated until the Company establishes new
lines of business.
For the foreseeable future, the Company's sole activity is expected to be
the identification and evaluation of suitable business opportunities which
could result in an acquisition by or combination with the Company. There can
be no assurance, however, that the Company will be successful in its efforts,
or that other types of business transactions might not be considered.
CAPITAL RESOURCES AND LIQUIDITY
Since September 30, 1994, the Company has generated no revenues from
operations. During the nine months ended March 31, 1997, capital was provided
from $41,000 in contributions from two of the Company's principal stockholders.
The Company expects to fund its ongoing capital needs through investments
in or advances to the Company by its principal stockholders or other affiliates
of the Company.
<PAGE>9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no legal proceedings against the Company, or to which the
Company or any of its officers or directors are a party, and to the knowledge
of the Company's management, no claims have been made against the Company.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No Exhibits
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
<PAGE>10
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.
DATED: May 1, 1997 USA INTERNATIONAL CHEMICAL, INC.
YALE FARAR
Yale Farar, President and
Chief Financial Officer
(Principal Accounting Person)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-QSB
FOR THE PERIOD ENDED MARCH 31, 1997, FOR USA INTERNATIONAL CHEMICAL, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1997
<CASH> 8,598
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,598
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,598
<CURRENT-LIABILITIES> 1,500
<BONDS> 0
0
0
<COMMON> 13
<OTHER-SE> 7,085
<TOTAL-LIABILITY-AND-EQUITY> 8,598
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,067
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (21,067)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,067)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> 0
</TABLE>
