_______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 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 of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
20720 Ventura Boulevard, Ste. 210
WOODLAND HILLS, CALIFORNIA 91364
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (818) 346-9595
Indicate by check mark whether the issuer (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 issuer 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, 1997
ASSETS
CURRENT ASSETS
Cash $ 2,357
-------
Total Assets $ 2,357
-------
-------
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 317,167
Accumulated deficit (314,823)
----------
Total Stockholders Equity 2,357
----------
Total Liabilities and Stockholders' Equity $ 2,357
----------
----------
See accompanying notes.
<PAGE>5
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Six Months Ended
DECEMBER 31, DECEMBER 31,
------------------- ----------------
1997 1996 1997 1996
SALES $ -- $ -- $ -- $ --
GENERAL ADMINISTRATIVE EXPENSES 1,519 1,007 8,367 16,007
--------- --------- --------- -----------
Loss from Operations (1,519) (1,077) (8,367) (16,007)
--------- --------- --------- -----------
PROVISION FOR INCOME TAX -- -- 800 --
--------- --------- --------- -----------
Net Loss $ (1,519) $ (1,077) $ (9,167) $ (16,007)
--------- --------- --------- -----------
Net Loss Per Share $ -- $ -- $ (.01) $ (.01)
--------- --------- --------- -----------
--------- --------- --------- -----------
Weighted Average Shares 1,341,809 1,341,809 1,341,809 1,341,809
Outstanding
See accompanying notes.
<PAGE>6
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
DECEMBER 31,
OPERATING ACTIVITIES: 1997 1996
Net Cash Used in Operating Activities $(9,167) $(16,248)
Financing Activities:
Capital Contributions 6,000 14,000
-------- --------
Net Cash Provided by Financing Activities 6,000 14,000
-------- --------
NET DECREASE IN CASH (3,167) (2,248)
Cash at beginning of period 5,524 3,413
-------- --------
Cash at end of period $2,357 $1,165
-------- --------
-------- --------
See accompanying notes
<PAGE>7
USA INTERNATIONAL CHEMICAL, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 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 six months ended December 31, 1997 are not necessarily indicative of
the results that may be expected for the year ending June 30, 1998. For
further information refer to the financial statements and footnotes thereto
included in Form 10-KSB for the year ended June 30, 1997 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 six months ended December 31, 1997 principal shareholders
contributed $6,000 to the Company.
<PAGE>8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OPERATING ACTIVITIES
There were no sales for the six month period ended December 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.
Operating expenses totaled $1,519 for the quarter ended December 31, 1997
and $8,367 for the six months ended December 31, 1997. This compares to $1,077
for quarter ended December 31, 1996 and $16,007 for the six month period ended
December 31, 1996. The $7,640 decrease for the six month period was a direct
result of lower legal and accounting fees incurred.
During the six months ended December 31, 1997, net cash used by operations
was $9,167. During the six months ended December 31, 1996, net cash of $16,248
was used by operations.
Net loss totaled $1,519 for the three months ended December 31, 1997 and
$9,167 for the six months ended December 31, 1997 compared to a net loss of
$1,077 and $16,007 for the comparable periods last year. The $6,840 decrease
in net losses for the six month period ended December 31, 1997 resulted
primarily from the Company having incurred higher administrative expenses
(principally legal and accounting fees) in the prior period.
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
Pursuant to the terms of a Stock Purchase Agreement, the Company
liquidated its assets and liabilities during the three months ended September
30, 1994. Since September 30, 1994, the Company has generated no revenues from
operations. During the six months ended December 31, 1997, capital was
provided for operations from $6,000 in contributions from two of the Company's
principal stockholders. This compares to $14,000 of capital contributed during
the six month period ended December 31, 1996.
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: January 30 , 1998 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 DECEMBER 31, 1997 FOR USA INTERNATIONAL CHEMICAL, INC. AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> 6-MOS
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<PERIOD-END> DEC-31-1997
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0
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<OTHER-SE> 2,344
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