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 March 31, 1999
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 (I.R.S. Employer Identification
incorporation or organization) Number)
15915 Ventura Boulevard, Suite 301
Encino, California 91436
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including are (818) 783-0393
------------------------------------------------
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, 1,346,809 issued and outstanding as of
April 15, 1999.
<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.........................................10
ITEM 2. Changes in Securities.....................................10
ITEM 3. Defaults upon Senior Securities...........................10
ITEM 4. Submission of Matters to a Vote of Security Holders.......10
ITEM 5. Other Information.........................................10
ITEM 6. Exhibits and Reports on Form 8-K..........................10
<PAGE>3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>4
USA INTERNATIONAL CHEMICAL, INC.
BALANCE SHEET
MARCH 31, 1999
(UNAUDITED)
ASSETS
Current Assets
Cash $ 764
--------
Total Assets $ 764
========
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
1,346,809 shares 13
Additional paid-in capital 333,167
Accumulated deficit (332,416)
--------
Total Stockholders Equity 764
Total Liabilities and Stockholders' Equity $ 764
========
See accompanying notes.
<PAGE>5
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
March 31, March 31
------------------ -------------------
1999 1998 1999 1998
----- ----- ----- ------
Sales .................................. $ --- $ --- $ --- $ ---
-------- -------- --------- ---------
General Administrative Expenses........... 4,871 738 14,046 9,105
-------- -------- --------- ---------
Loss from Operations................. (4,871) (738) (14,046) (9,105)
-------- -------- --------- ---------
Loss Before Income Tax Provisions.... (4,871) (738) (14,046) (9,105)
-------- -------- --------- ---------
Provision for Income Tax.................. 0 800 800 1,600
-------- -------- --------- ---------
Net Loss.................................. $ (4,871) $ (1,538) $ (14,846) $ (10,705)
======== ========= ========== ===========
Net Loss Per Share ....................... $ -- $ -- $ (.01) $ (.01)
========== ========= =========== ===========
Weighted Average Shares Outstanding....... 1,346,809 1,341,809 1,346,809 1,341,809
</TABLE>
See accompanying notes.
<PAGE>6
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
March 31,
-------------------
Operating Activities:
1999 1998
----------- -----------
Net Cash Used in Operating Activities $(12,846) $(10,705)
Financing Activities:
Capital Contributions 10,000 6,000
--------- --------
Net Cash Provided by Financing Activities 10,000 6,000
--------- --------
Net Decrease in Cash (2,846) (4,705)
Cash at beginning of period 3,610 5,524
-------- ---------
Cash at end of period $ 764 $ 819
======== =========
See accompanying notes
<PAGE>7
USA INTERNATIONAL CHEMICAL, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 1999
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, 1999 are not necessarily indicative of the results that
may be expected for the year ending June 30, 1999. For further information refer
to the financial statements and footnotes thereto included in Form 10-KSB for
the year ended June 30, 1998 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, 1999 principal shareholders contributed
$10,000 to the Company.
<PAGE>8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion, other than the historical financial information, may
consist of forward-looking statements that involve risks and uncertainties,
including when the Company may resume business operations.
Consequently, actual results may vary from management's expectations.
Operating Activities
There were no sales for the nine month period ended March 31, 1999 or
1998. 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 $4,871 for the quarter ended March 31, 1999,
and $14,046 for the nine months ended March 31, 1999, which include $2,000 paid
for services by issuing 5,000 shares of common stock. Operating expenses for the
quarter consisted primarily of legal and accounting fees relating to the
Company's quarterly reports and other corporate expenses. Operating expenses
totaled $738 and $9,105 for the comparable periods in 1998. The increase in the
current periods reflect increased accounting fees recorded in the three months
ended March 31, 1999.
During the nine months ended March 31, 1999, net cash of $12,846 was
used by operations compared to $10,705 for the same period in 1998.
Net loss totaled $4,871 for the three months and $14,846 for the nine
months ended March 31, 1999, compared to a net loss of $1,538 for the three
months and $10,705 for the nine months ended March 31, 1998. The increase in net
loss for the most recent quarter was due to the increase in operating expenses
for the 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
Since September 30, 1994, the Company has generated no revenues from
operations. During the nine months ended March 31, 1999, capital was provided
for operations from $10,000 in contributions from two of the Company's principal
stockholders. During the nine months ended March 31, 1998, capital for
operations was provided from contributions from these principal shareholders or
other affiliates of the Company aggregating $6,000. 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
Impact of the Year 2000 Issue
Many companies have older computer programs which recognize only the
last two digits of the year in any date (i.e. "98" for "1998"), which could
cause such software to fail to operate in the year 1999 or 2000 unless the
software is preprogramed or replaced (the "Year 2000 Problem"). Since the
Company has no active business operations, the Year 2000 Problem is not expected
to affect the Company's current limited operations. Consequently, the Company
believes that the cost of addressing the Year 2000 Problem will not have a
material effect on the Company's financial position, liquidity or results of
operations.
<PAGE>10
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 for the
quarter covered by this report.
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>11
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
USA INTERNATIONAL CHEMICAL, INC.
Dated: April 23, 1999
/s/HAROLD S. FLEISCHMAN
-------------------------------------
Harold S. Fleischman
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, 1999 FOR USA INTERNATIONAL CHEMICAL, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1999
<CASH> 764
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 764
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 764
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
13
<COMMON> 751
<OTHER-SE> 764
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 4,871
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (4,871)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,871)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,871)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
