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, 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
----------------------------------------- -----------
(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
January 10, 2000.
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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
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
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USA INTERNATIONAL CHEMICAL, INC.
BALANCE SHEET
DECEMBER 31, 1999
(UNAUDITED)
ASSETS
Current Assets
Cash $ 1,044
--------
Total Assets $ 1,044
========
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 346,167
Accumulated deficit (345,136)
---------
Total Stockholders Equity 1,044
---------
Total Liabilities and Stockholders' Equity $ 1,044
=========
See accompanying notes.
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USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF OPERATIONS FOR THE THREE
AND SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
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Three Months Ended Six Months Ended
September 30, December 31,
--------------------------- ---------------------
1999 1998 1999 1998
----------- ----------- ----------- ----------
Sales .................................. $ -- $ -- $ -- $ --
---------- ---------- ---------- ----------
General Administrative Expenses........... 1,785 2,391 9,470 9,175
---------- ---------- ---------- ----------
Loss from Operations................. (1,785) (2,391) (9,470) (9,175)
---------- ---------- ---------- ----------
Loss Before Income Tax Provisions.... (1,785) (2,391) (9,470) (9,175)
---------- ---------- ---------- ----------
Provision for Income Tax.................. -0- -0- 800 800
---------- ---------- ---------- ----------
Net Loss.................................. (1,785) (2,391) (10,270) (9,975)
---------- ---------- ---------- ----------
Net Loss Per Share........................ $ -- $ -- $ (.01) $ (0.01)
========== ========== ========== ==========
Weighted Average Shares Outstanding....... 1,347,809 1,346,809 1,347,809 1,346,809
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See accompanying notes.
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USA INTERNATIONAL CHEMICAL, INC.
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
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Six Months
Ended December 31,
--------------------------
Operating Activities: 1999 1998
---------- ---------
Net Cash Used in Operating Activities $ (10,471) $ (7,975)
Financing Activities:
Capital Contributions 8,000 5,000
---------- ---------
Net Cash Provided by Financing Activities 8,000 5,000
---------- ---------
Net Decrease in Cash (2,471) (2,975)
Cash at beginning of period 3,515 3,610
---------- ---------
Cash at end of period $ 1,044 $ 635
========== =========
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See accompanying notes
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USA INTERNATIONAL CHEMICAL, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 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 six
months ended December 31, 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 six months ended December 31, 1999 principal shareholders contributed
$8,000 to the Company.
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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 six month period ended December 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 $1,785 for the quarter ended December 31, 1999,
and $9,470 for the six months ended December 31, 1999. Operating expenses for
the quarter consisted primarily of legal and accounting fees relating to the
Company's quarterly reports. Operating expenses totaled $2,391 and $9,175 for
the comparable periods in 1998. The similar level of expenses reflect comparable
fees for services rendered in both periods for 1999 and 1998.
During the six months ended December 31, 1999, net cash of $10,471 was used
by operations compared to $7,975 for the same period in 1998.
Net loss amounted to $1,785 for the three months and $10,270 for the six
months ended December 31, 1999, compared to a net loss of $2,391 for the three
months and $9,975 for the six months ended December 31, 1998. The relatively
similar net loss incurred for both six month periods reflect similar levels of
administrative expenses recognized in such periods.
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. Subsequent
to the end of the fiscal quarter the Year 2000 commenced and the Company has
experienced no problems relating to its limited 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.
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Capital Resources and Liquidity
Since September 30, 1994, the Company has generated no revenues from
operations. During the six months ended December 31, 1999, capital was provided
for operations from $8,000 in contributions from two of the Company's principal
stockholders. During the six months ended December 31, 1998, capital for
operations was provided from $5,000 in contributions from these principal
shareholders. 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.
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.
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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: January 26, 2000
/s/ HAROLD S. FLEISCHMAN
-------------------------------------
Harold S. Fleischman
President and Chief Financial Officer
(Principal Accounting Person)
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-QSB
FOR THE PERIOD ENDED DECEMBER 31, 1999 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
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,044
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,044
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0
0
<COMMON> 13
<OTHER-SE> 1,031
<TOTAL-LIABILITY-AND-EQUITY> 1,044
<SALES> 0
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<CGS> 0
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<OTHER-EXPENSES> 1,785
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<INCOME-PRETAX> (1,785)
<INCOME-TAX> 0
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<NET-INCOME> (1,785)
<EPS-BASIC> (0.01)
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</TABLE>
