UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended: September 30, 2003
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ____________ to _____________
Commission File Number: 000-1096768
USA Telcom Internationale
-----------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0408213
----------- ------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
6655 W. Sahara, Suite 200 89146
Las Vegas, NV -------
----------------------------- (Zip Code)
(Address of principal executive
offices)
(702) 524-4149
-------------------------
(Registrant's telephone number, including area code)
N/A
-----------
(Former name, former address and former fiscal year, if changed
since last report)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
4,250,000
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USA TELCOM INTERNATIONALE
Table of Contents
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Balance Sheet 4
Statements of Operations 5
Statements of Cash Flows 6
Notes 7
Item 2. Management's Discussion and Plan of Operation 8
Item 3. Controls and Procedures 9
PART II - OTHER INFORMATION
Item 5. Other Information 9
Item 6. Exhibits 9
SIGNATURES 10
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PART I - FINANCIAL INFORMATION
Item 1. Unaudited Financial Statements
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial reporting and pursuant to the
rules and regulations of the Securities and Exchange Commission
("Commission"). While these statements reflect all normal
recurring adjustments which are, in the opinion of management,
necessary for fair presentation of the results of the interim
period, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. For further information, refer to the
financial statements and footnotes thereto, which are included in
the Company's Registration Statement on Form 10-KSB previously
filed with the Commission on April 21, 2003.
The accompanying notes are an integral part of these
consolidated financial statements.
-3-
USA Telcom Internationale
(a Nevada Corporation)
Balance Sheet
(unaudited)
September 30,
2003
Assets ---------------
Current assets:
Cash $-
---------------
-
---------------
Fixed assets, net 612
Other assets:
Investments 500
Notes receivable 267,963
---------------
Total other assets 268,463
---------------
$269,075
===============
Liabilities and Stockholders' Equity
Current liabilities:
Checks issued in excess of available cash $1
Accrued expenses 9,680
Loan payable - related party 44,389
---------------
Total current liabilities 54,070
---------------
Stockholders' equity:
Common stock, $0.001 par value, 25,000,000 shares
authorized, 4,250,000 shares issued and outstanding 4,250
Additional paid-in capital 174,743
Retained earnings 36,012
---------------
215,005
---------------
$269,075
===============
The accompanying notes are an integral part of these financial
statements.
-4-
USA Telcom Internationale
(a Nevada Corporation)
Statements of Operations
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
-----------------------------------------------
2003 2002 2003 2002
-----------------------------------------------
Revenue $- $8,600 $- $8,600
-----------------------------------------------
Expenses:
General and administrative expenses 12,091 10,080 53,575 35,441
Executive compensation - related party 10,000 - 10,000 -
Depreciation 43 759 129 1,588
-----------------------------------------------
Total expenses 22,134 10,839 63,704 37,029
-----------------------------------------------
Other income (expense):
Interest income 32,038 459 96,114 2,395
Interest (expense) - (83) - (572)
-----------------------------------------------
Total other income (expense) 32,038 376 96,114 1,823
-----------------------------------------------
Net income (loss) $9,904 $(1,863) $32,410 $(26,606)
===============================================
Weighted average number of
common shares outstanding - basic and fully diluted 4,250,000 4,250,000 4,250,000 4,250,000
===============================================
Net income (loss) per share - basic and fully diluted $0.00 $(0.00) $0.01 $(0.01)
===============================================
The accompanying notes are an integral part of these financial
statements.
-5-
USA Telcom Internationale
(a Nevada Corporation)
Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30,
2003 2002
---------------------
Cash flows from operating activities
Net income (loss) $32,410 $(26,606)
Depreciation 129 1,588
Adjustments to reconcile net income (loss) to net
cash (used) by operating activities:
Decrease in account receivable - 7,500
Decrease in security deposit 5,000 -
Increase in accrued expenses 9,680 -
---------------------
Net cash provided (used) by operating activities 47,219 (17,518)
---------------------
Cash flows from investing activities
Purchase of fixed assets - (14,717)
(Increase) in investments - (500)
(Increase) in loan receivable (267,963) -
Decrease in interest receivable - 523
---------------------
Net cash (used) by investing activities (267,963) (14,694)
---------------------
Cash flows from financing activities
Increase in loan payable - related party 44,389 742
Increase in checks issued in excess of available cash 1 -
---------------------
Net cash provided by financing activities 44,390 742
---------------------
Net (decrease) in cash (176,354) (31,470)
Cash - beginning 176,354 48,364
---------------------
Cash - ending $- $16,894
=====================
Supplemental information:
Interest paid $ - $ -
=====================
Income taxes paid $ - $ -
=====================
The accompanying notes are an integral part of these financial
statements.
-6-
USA Telcom Internationale
(a Nevada Corporation)
Notes
Note 1 - Basis of presentation
The consolidated interim financial statements included herein,
presented in accordance with United States generally accepted
accounting principles and stated in US dollars, have been prepared
by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading.
These statements reflect all adjustments, consisting of normal
recurring adjustments, which, in the opinion of management, are
necessary for fair presentation of the information contained
therein. It is suggested that these consolidated interim financial
statements be read in conjunction with the financial statements of
the Company for the year ended December 31, 2002 and notes thereto
included in the Company's 10-KSB annual report. The Company
follows the same accounting policies in the preparation of interim
reports.
Results of operations for the interim periods are not indicative of
annual results.
Note 2 - Notes receivable
On January 1, 2003, the Company executed an irrevocable loan
agreement in which the borrower agrees to pay the total loan sum of
$300,000 on or before December 30, 2003. This amount includes the
principle of $171,850, and associated points, fees and interest.
During the nine month period ended September 30, 2003, total
interest income of $85,434 was accrued.
Note 3 - Related party transactions
During the nine months ended September 30, 2003, the president and
CEO loaned a total of $44,389 to the Company. The loan is due upon
demand and bears no interest.
During the nine months ended September 30, 2003, the president and
CEO was paid $10,000 in executive compensation.
The Company does not lease or rent any property. Office space and
services are provided without charge by a director. Such costs are
immaterial to the financial statements and, accordingly, have not
been reflected therein. The officers and directors of the Company
are involved in other business activities and may, in the future,
become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the
resolution of such conflicts.
Note 4 - Subsequent events
On November 5, 2003, the Company signed an agreement with a private
company to commence negotiations regarding a possible reverse
merger with the Company.
-7-
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements
about USA Telcom Internationale's business, financial condition and
prospects that reflect management's assumptions and beliefs based
on information currently available. We can give no assurance that
the expectations indicated by such forward-looking statements will
be realized. If any of our management's assumptions should prove
incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, USTC's actual results may differ
materially from those indicated by the forward-looking statements.
The key factors that are not within our control and that may
have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand our
customer base, managements' ability to raise capital in the future,
the retention of key employees and changes in the regulation of our
industry.
There may be other risks and circumstances that management may
be unable to predict. When used in this Quarterly Report, words
such as, "believes," "expects," "intends," "plans,"
"anticipates," "estimates" and similar expressions are intended to
identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.
Three Months Ended September 30, 2003 Compared to the Three Months
Ended September 30, 2002
Income and Loss
The Company did not generate any revenues during the three
month period ended September 30, 2003. During the same period in
2002, the Company generated $8,600 in revenues from operations.
The total operating expenses for the three months ended
September 30, 2003 were approximately $22,134 as compared to
approximately $10,839 for the three months ended September 30,
2002. Management of the Company believes that the increase
resulted primarily from increases in general administrative
expenses related to ongoing operational expenses and as the result
of compensation paid to an officer of the Company.
During the period ended September 30, 2003, the Company
realized $32,038 in total other income consisting solely of
interest income. During the third quarter of 2002, the Company
recognized $459 of interest income and $83 of interest expense for
aggregate other income of $376. The increase in interest income
period-over-period is attributable to a loan agreement for an
aggregate of $300,000, inclusive of points, fees and interest that
the Company entered into on January 1, 2003. The total amount of
the loan is due on or before December 31, 2003.
In the three months ended September 30, 2003, USA Telcom's
operations resulted in net income of approximately $9,904 as
compared to a net loss of approximately $1,863 for the three months
ended September 30, 2002.
Liquidity and Capital Resources
At September 30, 2003, USA Telcom had no cash or cash
equivalents. At September 30, 2002, USA Telcom had cash in the
amount of $16,894. The decrease in cash is attributable primarily
to an increase of $267,963 in loans receivable. USA Telcom
believes that cash on hand is not sufficient to continue operations
for the next twelve months. If our costs of operations increase
unexpectedly, we may need to raise additional capital by issuing
equity or debt securities in exchange for cash. The President and
CEO of the Company has loaned a total of $44,389 to the Company
during the year to date to provide capital to fund the Company's
operations. There are no commitments for the President to continue
to do so. There can be no assurance that we will be able to secure
additional funds in the future to stay in business.
The Company continues to act as an agent in commercial
transactions involving Vietnamese purchasers and U.S.
manufacturers. USA Telcom also is considering several real estate
investments in Vietnam and is examining the possible establishment
of a coconut processing facility in Vietnam.
-8-
Item 3. Controls and Procedures
Within 90 days prior to the date of filing of this report, we
carried out an evaluation, under the supervision and with the
participation of our management, including the Chief Executive
Officer (who effectively serves as our Chief Financial Officer), of
the design and operation of our disclosure controls and procedures.
Based on this evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and
procedures are effective for gathering, analyzing and disclosing
the information we are required to disclose in the reports we file
under the Securities Exchange Act of 1934, within the time periods
specified in the SEC's rules and forms. There have been no
significant changes in our internal controls or in other factors
that could significantly affect internal controls subsequent to the
date of this evaluation.
PART II - OTHER INFORMATION
Item 5. Other Information
On November 5, 2003, the Company signed a memorandum of
understanding with a privately-held company to commence
negotiations to effect a merger with USA TelCom.
Item 6. Exhibits
Exhibit Name and/or Identification of Exhibit
Number
3 Articles of Incorporation & By-Laws
a. Articles of Incorporation of the Company
incorporated by reference herein filed as Exhibit
3(a) to Form 10SB12G filed on March 11, 2002
b. By-Laws of the Company incorporated by reference
herein filed as Exhibit 3(b) to Form 10SB12G filed on
March 11, 2002
31 Rule 13a-14(a)/15d-14(a) Certifications
32 Certification under Section 906 of the Sarbanes-Oxley Act
(18 U.S.C. Section 1350)
-9-
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
USA TELCOM INTERNATIONALE
-----------------------------
(Registrant)
By: /s/ Allen Jones
-------------------
Allen Jones, President
Date: December 2, 2003
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