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 September 30, 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 of (I.R.S. Employer Identification Number)
incorporation or organization)
15915 Ventura Boulevard, Suite 301
Encino, California 91436
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (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, 1,347,809 issued and outstanding as of October
29, 1999.
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<TABLE>
<CAPTION>
INDEX
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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.Exhibits and Reports on Form 8-K ................................................9
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<PAGE>4
USA INTERNATIONAL CHEMICAL, INC.
BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1999
ASSETS
Current Assets September
30, 1999
--------------
Cash $2,829
Total Assets $2,829
======
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
1,347,809 shares 13
Additional paid-in capital 346,167
Accumulated deficit (343,351)
----------
Total Stockholders' Equity 2,829
----------
Total Liabilities and Stockholders' Equity $ 2,829
==========
See accompanying notes.
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USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
Three Months Ended
September 30,
--------------------------------------
1999 1998
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Sales.................................. $ -- $ --
------------- --------------
General Administrative Expenses........ 7,685 6,784
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Loss from Operations (7,685) (6,784)
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Loss before Income Tax Provisions... (7,685) (6,784)
------------- -------------
Provision for Income Tax 800 800
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Net Loss............................... (8,485) (7,584)
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Net Loss Per Share..................... (.01) (.01)
============= =============
Weighted Average Shares Outstanding.... 1,347,809 1,346,809
See accompanying notes.
<PAGE>6
USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
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<CAPTION>
Three Months Ended
September 30,
-------------------------------------
1999 1998
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Operating Activities:
Net Cash Used in Operating Activities $ (8,686) $ (3,831)
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Financing Activities:
Capital Contributions 8,000 5,000
------------- ------------
Net Cash Provided by Financing Activities 8,000 5,000
------------- -------------
Net Increase (Decrease) in Cash (686) 1,169
Cash at beginning of period 3,515 3,610
------------- -------------
Cash at end of period $ 2,829 $ 4,779
============= =============
</TABLE>
See accompanying notes
<PAGE>7
USA INTERNATIONAL CHEMICAL, INC.
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED SEPTEMBER 30, 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 ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ending June 30, 2000. For further information refer to the
financial statements and footnotes thereto included in Form 10-KSB for the year
ended June 30, 1999 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 three months ended September 30, 1999 principal shareholders
contributed $8,000 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.
Results of Operations for the Three Months Ended September 30, 1999 as Compared
to the Three Months Ended September 30, 1998
Operating Activities
There were no sales for the three month period ended September 30, 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 $7,685 for the quarter ended September 30,
1999 compared to $6,784 for the same period last year for an increase of $901.
The increase resulted from higher fees for accounting services.
During the three months ended September 30, 1999, net cash used by
operations was $8,686. During the three months ended September 30, 1998, net
cash of $3,831 was used by operations.
Net loss totaled $8,485 for the three months ended September 30, 1999,
compared to a net loss of $7,584 for the three months ended September 30, 1998.
The increase in net loss resulted from the increased operating expenses
discussed above.
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.
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.
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.
<PAGE>9
Capital Resources and Liquidity
During the three months ended September 30, 1999, capital was provided
for operations from $8,000 in contributions from two of the Company's principal
stockholders. During the three months ended September 30, 1998, capital was
provided from $5,000 in contributions from these principal shareholders or other
affiliates of the Company.
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
Effective September 1, 1998, the Company issued an additional 1,000
shares of its common stock to Arthur Lyons in consideration of services rendered
to the Company. These shares, along with the 5,000 shares previously reported as
issued effective September 1, 1998 were valued at $2,000. The shares were issued
in a private offering in reliance upon the exemption from registration pursuant
to Section 4(2) of the Securities Act of 1933 as amended. The reliance on the
above registration exemption was based primarily upon the following facts:
i) the issuance was made to a single individual who was previously
known to the Company's then President and CEO;
ii) the transferee was deemed capable of protecting his own interest in
this transaction; and
iii) the issuance was not accompanied by any general solicitation.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. 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 has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
USA INTERNATIONAL CHEMICAL, INC.
Dated: November 4, 1999
/s/ Harold S. Fleischman
-------------------------------------
Harold S. Fleischman
President and Chief Financial Officer
(Principal Accounting Person)
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-QSB
FOR THE PERIOD ENDED SEPTEMBER 30, 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-30-1999
<PERIOD-END> SEP-30-1999
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<SECURITIES> 0
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<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,829
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<DEPRECIATION> 0
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0
0
<COMMON> 13
<OTHER-SE> 2,829
<TOTAL-LIABILITY-AND-EQUITY> 2,829
<SALES> 0
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<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,685
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,685)
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<NET-INCOME> (8,485)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
</TABLE>
