__________________________________________________________________________
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 DECEMBER 31, 1996
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 Number)
incorporation or organization)
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: [ X ] NO:
Common Stock, $.00001 par value, 1,341,809 issued and outstanding as of
January 15, 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)
DECEMBER 31, 1996
ASSETS
CURRENT ASSETS
Cash $1,165
Total Assets $1,165
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES $-0-
STOCKHOLDERS' EQUITY (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 284,167
Accumulated deficit (283,015)
Total Stockholders' Equity 1,165
Total Liabilities and Stockholders' Equity $1,165
See accompanying notes.
<PAGE>5
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
Three Months Ended Six Months Ended
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
SALES $ - $ -- $ -- $ --
GENERAL AND ADMINISTRATIVE
EXPENSES 1,077 5,540 16,007 16,100
LOSS BEFORE INCOME TAX
PROVISION (1,077) (5,540) (16,007) (16,100)
PROVISION FOR INCOME TAX _______ ________ ________ 800
NET LOSS $(1,077) $(5,540) $(16,007) $(16,900)
======= ======= ======== ========
NET LOSS PER SHARE $ -- $ -- $ (.01) $ (.01)
WEIGHTED AVERAGE SHARES
OUTSTANDING 1,341,809 1,329,809 1,341,809 1,329,809
See accompanying notes.
<PAGE>6
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
Six Months Ended
DECEMBER 31,
1996 1995
OPERATING ACTIVITIES:
Net Cash Used in Operating Activities $(16,248) $(18,812)
FINANCING ACTIVITIES:
Capital contributions 14,000 18,000
Net Cash Provided by Financing Activities 14,000 18,000
NET DECREASE IN CASH (2,248) (812)
CASH at beginning of period 3,413 1,502
CASH at end of period $ 1,165 $ 690
Supplemental Disclosures of Cash Flow Information: -- --
See accompanying notes.
<PAGE>7
USA INTERNATIONAL CHEMICAL, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1996
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 six months ended December 31, 1996 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' EQUITY
During the six months ended December 31, 1996 principal shareholders
contributed $14,000 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 six months ended December 31, 1996 or 1995.
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.
Operating expenses were $1,077 for the quarter ended December 31, 1996
and $16,007 for the six months ended December 31, 1996 compared to $5,540 and
$16,100, respectively, for the same periods last year. The decrease for the
second quarter was a direct result of lower legal and accounting fees.
During the six months ended December 31, 1996, net cash used by
operations was $16,248 compared to $18,812 for the same period last year.
Net loss totaled $1,077 for the three months and $16,007 for the six
months ended December 31, 1996, compared to a net loss of $5,540 for the three
months ended December 31, 1995 and $16,900 for the six months ended December
31, 1995. The decrease for the three months ended December 31, 1996 resulted
primarily from the Company's having incurred lower legal and accounting fees
in the current quarter.
In light of the foregoing, 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 six months ended December 31, 1996, capital was
provided from $14,000 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
SIGNATURE
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.
USA INTERNATIONAL CHEMICAL, INC.
Dated: January 20, 1997 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 DECEMBER 31, 1996 FOR USA INTERNATIONAL
CHEMICAL, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-END> DEC-31-1996
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0
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