U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(MARK ONE)

 [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    FOR FISCAL YEAR ENDED: DECEMBER 31, 1999

 [  ]       TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        For the transition period from To

                         COMMISSION FILE NUMBER 0-23825

                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                 (Name of small business issuer in its charter)

            NEVADA                                           86-0674322
State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization                            Identification No.)

           4525 WEST HACIENDA AVENUE, STE 12H, LAS VEGAS, NEVADA 89118
               (Address of principal executive offices) (Zip code)

ISSUER'S TELEPHONE NUMBER                      (800) 868-7233 EXT 225
                                              -----------------------

Securities registered under Section 12(b) of the Act: NONE Securities registered
under Section 12(g) of the Act:

                          COMMON STOCK PAR VALUE $0.001

                                (Title of class)

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         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of  registrant's  knowledge,  in definitive  proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]

         STATE  ISSUER'S  REVENUES  FOR ITS MOST RECENT  FISCAL  YEAR.  $182,626
                                                                        --------

         As  of  February  14,  2000,  there  were  11,656,585   shares  of  the
Registrant's  common  stock,  par value  $0.001,  issued  and  outstanding.  The
aggregate market value of the Registrant's  voting stock held by  non-affiliates
of the Registrant was approximately $3,406,035 computed at the estimated average
bid and asked price as of February 11, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
NONE

         TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES ; NO X

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                                TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                                    PAGE

PART I

Item 1. Description of Business...............................................4

Item 2. Description of Property...............................................9

Item 3. Legal Proceedings.....................................................9

Item 4. Submission of Matters to a Vote of Security Holders...................9


PART II

Item 5. Market for Common Equity and Related Stockholder Matters..............9

Item 6. Management's Discussion and Analysis or Plan of Operations...........10

Item 7. Financial Statements.................................................13

Item 8. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosure.................................................13

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons;
        Compliance with Section 16(a) of the Exchange Act....................13

Item 10.Executive Compensation...............................................14

Item 11.Security Ownership of Certain Beneficial Owners and Management.......15

Item 12.Certain Relationships and Related Transactions.......................15

Item 13.Exhibits and Reports on Form 8-K.....................................16





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                                     PART I

                         ITEM 1 DESCRIPTION OF BUSINESS

GENERAL

         The Company was first  incorporated in the State of Utah on October 24,
1984 as A.R.M.  Chemical  Company,  Inc. On November 13,  1984,  the name of the
Corporation was changed to E.R.M.  Chemical Company, Inc. From 1984 to 1986, the
Company attempted to manufacture,  distribute and sell chemical products for the
purification  of water.  This business  activity was abandoned.  On September 1,
1988 the Company  changed its name to M.P.V.  On September 7, 1989,  the name of
the Company was changed to Optimum Source International. The Company completed a
plan of  reorganization  on October  20,  1989  pursuant to which the assets and
corresponding  liabilities  of  LomaCycle,  Inc.  were  spun  off to the  former
shareholders of that corporation  before it became a wholly-owned  subsidiary of
M.P.V.,  Inc. From 1986 to 1990, the Company  attempted to acquire  interests in
various business  opportunities,  all attempts were abandoned. On June 29, 1990,
the  domicile  of the  Company was changed to Nevada and the name of the Company
was changed to Optimum Source International,  Ltd. The Company was inactive from
1990 to 1992.

PRINCIPAL PRODUCTS OR SERVICES AND THEIR MARKETS

         The  Company's   primary  mission  is   Barter/Counter-trade   and  its
proprietary   interactive   services   both  Domestic  and   International   and
encompassing the liquidation & auction industries globally.

         Optimum Source  International  Ltd.,  (OSI) is poised with products and
services for  individuals,  entrepreneurs,  and  companies of all sizes that are
desirous of learning or enhancing their  bartering,  trading and  countertrading
skills. Products are developed to fully integrate with each other or may be used
as stand alone products.  All products and services are currently offered on the
internet, and through selected channels of distribution.

         Barter, Exchange, Swap, Trade and Countertrade are rapidly becoming the
method of choice for  individuals,  companies and governments for acquiring what
they  want or need as it  eliminates  the  constant  monetary  change.  It is an
industry  that has reached sales of $100 billion  dollars plus  worldwide and is
growing at an incredible annual rate of 20%. The industry though,  has lagged in
automating.  OSI has focused its efforts on  providing  solutions  for  bringing
traders together worldwide.  OSI is a provider of surplus consumer goods through
its international suppliers inventories that are owned by OSI and associates are
accessible 24 hours a day via OSI's private

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network.  OSI has  developed  the forum for  buyers  and  sellers  to locate one
another and conduct business using the latest networking technologies.

         Current products including:

CABLE VIEW

         A membership  network for companies  dealing with  premiums,  auctions,
small retail dealers,  overseas buyers, and corporate users.  Members may obtain
additional  inventories for  nondealer/members  in their areas (with their prior
approval), enter their inventories, and charge a small exchange fee. As a member
in  CABLE  VIEW,  a  company  has  many  different   close-out  and  liquidation
inventories at their finger-tips,  24 hours a day. The services offered by CABLE
VIEW are listed below:

E-MAIL - SEARCH - FORUMS - CLASSIFIED ADS

CABLE  VIEW is  available  and is being  introduced  to the  Close-Out  industry
throughout  the world.  This  private  communication  network  which the Company
created has the capability of handling  thousands of calls,  24 hours a day, and
allows members to display, manipulate, extract and exchange information.

WHAT 'CHA GOT AUCTION SERVICES

         What  "Cha Got is a  network  of  auctioning  services  implemented  to
provide  a  distribution  system  for  selling  consumer  goods to end users and
dealers.  OSI  provides  complete  federally  bonded  auctioning  services.  All
segments of operations are controlled by OSI from its corporate  headquarters in
Glendale, California. Constant communication between all entities are maintained
via  computer.  Satellite  auction  sites  provide  additional  sales outlets of
consumer goods flowing to cash buyers nationwide.

COUNTERTRADE/BARTER

         Countertrade  associations are forming in ever increasing numbers.  The
recent  world  trade  agreements  open  up  more  opportunities  for an  already
expanding  countertrade  industry. A Barter,  Exchange,  Swap, Trade arrangement
enables a company to exchange  finished  goods for raw material at a fair price,
in lieu of  liquidating  inventories  at a  drastic  loss.  OSI  provides  these
services,  greatly  enhancing the Barter,  Exchange,  Swap, Trade industry,  and
establishing OSI as a world-wide countertrade resource leader.

         Potential  negative  impact of a participant  in a  countertrade/barter
action can  negatively  impact the Company and its  services.  For example,  the
publicity resulting from a participant  activities such as inappropriate  claims
and  product  representations  by  participants  can  make  the  sponsoring  and
retaining of participants more difficult, thereby negatively impacting sales.

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Furthermore, the Company's business and results of operations could be adversely
affected if the Company  terminates  a  significant  number of  participants  or
certain  participants who play a key role in the Company's  distribution system.
There can be no assurance that these or other participant  actions will not have
a material adverse effect on the Company or results of operations.

DISTRIBUTION

         The  infrastructure  for all of OSI's operations is its own Interactive
Communications  Information  Exchange  Network.  This  network  allows  for  the
streamlining of OSI's corporate operations by minimizing paper work. It provides
both  buyers and  sellers of surplus  goods the arena in which to  identify  and
negotiate  transactions.  It also provides the interface to wide area  networks,
i.e.,  Internet,  Microsoft's  "MSN"  Network,  and  various  public and private
databases, i.e., real estate, import/export, associations, and corporations. The
Company has  developed  the first  application  SOFTWARE FOR TRADERS  WORLDWIDE,
"TRADERS     TOOLTM".     This    software     automates    all    aspects    of
trade/barter/countertrade,   including   currency   conversions   and  inventory
tracking.  Displays also INDICATE  REMINDERS  FOR  EXPIRATION  DATES OF SCRIP OR
SERVICES.  TRADERS TOOLTM interfaces with Excel for TRACKING TRADE TRANSACTIONS,
AS WELL AS PROVIDING STATISTICS,  REPORTS AND SPREADSHEETS.  TRADERS TOOLTM also
has  specialty  modules,  i.e.,  real estate,  gems,  and consumer  items.  Upon
request,  Traders TOOLTM  automatically  dials and connects to outside databases
for specific goods  information.  Traders TOOLTM is the only product of its kind
available to the Barter,  Exchange,  Swap,  Trade  industry at all levels,  from
novice to expert.  The Company's  focus is automating the liquidation and barter
industry. A network of independent  representatives develop sales and marketing,
introduce new services and products,  and expand  distribution of products while
pursuing strategic alliance worldwide.

COMPETITION

         Competition  in the barter,  trading and  counter  trading  industry is
vigorous,  characterized by a relatively large number of companies (estimated at
approximately  1,500),  most of which  have  relatively  small  sales.  Industry
sources  estimate  that there are less than 100  companies in the industry  that
have annual  sales of $2 million or more.  Since only one of these  companies in
this  industry  is  public  and the rest are  privately  held,  little  reliable
financial data is available.  Many of the companies have established reputations
for successfully  developing and marketing  barter,  trading and  countertrading
services,  with a variety of  well-established  marketing outlets.  Many of such
companies have greater financial,  managerial, and technical resources than OSI.
Principal  competitors  include members of the  International  Reciprocal  Trade
Association, and members of the National Association of Trade Exchanges.

         The Company  competes by emphasizing  the value and premium  quality of
the Company's products and the convenience of the Company's distribution system.
There can be no assurance that the Company's  business and results of operations
will not be affected  materially by market  conditions  and  competition  in the
future.

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SOURCES AND AVAILABILITY OF RAW MATERIAL AND THE NAMES OF PRINCIPAL SUPPLIERS

         All the  Company's  products  are  currently  produced by  manufactures
unaffiliated  with the Company.  The Company's profit margins and its ability to
deliver  products  on a timely  basis  are  dependent  upon the  ability  of the
Company's  outside  suppliers to supply  products in a timely and cost efficient
manner.

         The  Company  currently  acquires  products  from  suppliers  that  are
considered by the Company to be the superior suppliers of such products.  Due to
the nature of the close out market the  availability of products varies from day
to day.  There can be no assurance  that the loss of a supplier would not have a
material adverse effect on the Company's business and results of operations.

DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS

         No customer accounts for more than 10% of sales.

TRADEMARK AND PATENT PROTECTION

         As a company  selling  products  nationwide  and  internationally,  OSI
believes  that  establishing  trade and service marks and  copyrights  for brand
names  and  associated  advertising  and  labeling  materials  is  important  in
maintaining company and product identification and integrity.  Accordingly,  OSI
is engaged on a continuing  basis in developing  brand names and such associated
materials for its products,  securing trade and service mark protection for such
brand names and copyright protection for such associated material,  policing its
existing   marks,   and  enforcing  its  legal  rights  in  cases  of  potential
infringement  by third parties of its legally  protected  marks and  copyrights.
Notwithstanding these safeguards,  it is possible for competitors of the Company
to imitate its products.  Furthermore, others may independently develop products
similar or  superior to those  developed  or planned by the  Company.  While the
Company  may  obtain  patents  or  trademarks  with  respect  to  certain of its
products,  the Company may not have sufficient resources to defend such patents;
such patents may not afford all necessary protection and competitors may develop
equivalent or superior products which may not infringe such patents.

FUTURE CAPITAL NEEDS AND UNCERTAINTY OF ADDITIONAL FUNDING

         The  Company  was not in full  operation  during  1999  and  thus,  the
revenues  generated are not  representative of those that are expected once full
operating  status has been achieved.  Revenues are not yet sufficient to support
the Company's operating expenses.  However, the Company is cautiously optimistic
that operating  revenues will be adequate to meet operating  expenses during the
next year.

 Since the  Company's  formation,  it has  funded  its  operations  and  capital
expenditures primarily through private placements of debt and equity securities.
The Company will be required to seek additional  financing in the future.  There
can be no assurance that such financing will be available at all or available on
terms acceptable to the Company.

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GOVERNMENT REGULATION

         The Company's products  currently do not require  government  approval.
The Company is not aware of any existing or probable governmental regulations on
the business.

RESEARCH AND DEVELOPMENT ACTIVITIES

         For the  years  ended  December  31,  1999 and 1998  there was no money
allocated to research and  development.  Royalty  agreements  provided  that the
research and development expenses are to be paid by the royalty holder.

EMPLOYEES

         As of December 31, 1999 the Company had no full time  employees.  There
are a total of 2  contract  employees  engaged  in the  general  management  and
administration.

RISK OF LOW-PRICED STOCKS

          Rules 15g-1 through 15g-9  promulgated  under the Securities  Exchange
Act  of  1934  (the  "Exchange   Act")  impose  sales  practice  and  disclosure
requirements on certain  brokers and dealers who engage in certain  transactions
involving "a penny stock."

         Currently,  the Company's  Common Stock is considered a penny stock for
purposes of the  Exchange  Act. The  additional  sales  practice and  disclosure
requirements imposed on certain brokers and dealers could impede the sale of the
Company's  Common  Stock  in the  secondary  market.  In  addition,  the  market
liquidity and price for the Company's securities may be adversely affected.

         Under the penny stock  regulations,  a broker or dealer  selling  penny
stock to anyone other than an  established  customer or  "accredited  investor"'
(generally,  an  individual  with a net worth in excess of  $1,000,000 or annual
incomes  exceeding  $200,000,  or $300,000 together with his or her spouse) must
make a special suitability  determination for the purchaser and must receive the
purchaser's  written consent to the transaction prior to sale, unless the broker
or dealer or the transaction is otherwise exempt.  In addition,  the penny stock
regulations  require the broker or dealer to deliver,  prior to any  transaction
involving a penny stock,  a disclosure  schedule  prepared by the Securities and
Exchange  Commission (the "SEC") relating to the penny stock market,  unless the
broker,  or dealer,  or the transaction is otherwise exempt. A broker, or dealer
is also required to disclose commissions payable to the broker or dealer and the
registered   representative  and  current  quotations  for  the  Securities.  In
addition,  a broker or dealer is required to send monthly statements  disclosing
recent  price  information  with respect to the penny stock held in a customer's
account and information with respect to the limited market in penny stocks.

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                         ITEM 2 DESCRIPTION OF PROPERTY

         The Company has  committed  to a one year lease at $1,500 per month for
its corporate headquarters in Las Vegas, Nevada.

         As of December 31, 1998 all activities of the Company were conducted by
corporate  officers  from either their homes or business  offices.  There are no
outstanding  debts owed by the company for the use of these facilities and there
are no commitments for future use of the facilities.

                            ITEM 3 LEGAL PROCEEDINGS

         The  Company  is not  engaged in any legal  proceedings  other than the
ordinary routine  litigation  incidental to its business  operations,  which the
Company does not believe, in the aggregate,  will have a material adverse effect
on the Company, or its operations.

                        ITEM 4 SUBMISSION OF MATTERS TO A
                            VOTE OF SECURITY HOLDERS

         No matters were subject to a vote of security  holders  during the year
1999.

                                     PART II

                       ITEM 5 MARKET FOR COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         The stock is traded  over-the-counter on the NASDAQ Bulletin Board with
the trading symbol

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"OSIN".  The following high and low bid information was provided by PC Financial
Network.  The quotations provided reflect  inter-dealer  prices,  without retail
mark-up, mark-down or commission and may not represent actual transactions.

                 1998:                           High                Low
First Quarter                           (To the best knowledge of
Second Quarter                          management, there was no trading

                                        of shares for the first and second
                                        quarter 1998.)

Third Quarter                           $          0.125    $         0.125
Fourth Quarter                          $          1.125    $         0.250

                 1999:

First                                   Quarter  (To  the  best   knowledge   of
                                        management,  there  was  no  trading  of
                                        shares for the first quarter 1999.)

Second Quarter                          $          0.125    $         0.125
Third Quarter                           $          6.000    $         5.438
Fourth Quarter                          $          6.875    $         4.750


         The number of shareholders  of record of the Company's  common stock as
of December 31, 1999 was approximately 261.

         The  Company  has not  paid  any  cash  dividends  to date and does not
anticipate  paying  dividends  in the  foreseeable  future.  It is  the  present
intention of management to utilize all available  funds for the  development  of
the Company's business.

                       ITEM 6 MANAGEMENT'S DISCUSSION AND
                         ANALYSIS OR PLAN OF OPERATIONS

GENERAL

The following  discusses the financial position and results of operations of the
Company.

RESULTS OF OPERATIONS

         From 1984 to 1986, the Company attempted to manufacture, distribute and
sell chemical

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products for the  purification of water.  This business  activity was abandoned.
From 1986 to 1990,  the  Company  attempted  to  acquire  interests  in  various
business  opportunities,  all attempts were abandoned.  The Company was inactive
from 1990 to 1992.  The Company was in the  development  stage from December 31,
1992 through  December 31, 1997.  The Company was not in full  operations  as of
December  31,  1998,  accordingly,   comparisons  with  prior  periods  are  not
meaningful.

Total Revenues - For the years ended December 31, 1999 and 1998, the Company had
total trade revenues of approximately $183,000 and $46,000, respectively.

Costs and Expenses - For the years ended  December 31, 1999, the Company had net
income of  approximately  $75,000.  For the years ended  December 31, 1998,  the
Company  had a net  loss of  approximately  $78,000.  The net  loss  for 1998 is
largely attributable to additional expenses incurred by startup companies. Given
the limited  operations  which took place in 1998,  any  discussion of operating
expenses  as a  percentage  of  sales  would  not be  meaningful  and  might  be
misleading.

LIQUIDITY AND CAPITAL RESOURCES

         The Company  requires  working capital  principally to fund its current
operations.  Generally the Company has adequate funds for its activities.  There
are no formal  commitments  from  banks or other  lending  sources  for lines of
credit or similar  short-term  borrowing.  It is  anticipated  that the  current
operations  will expand and funds  generated  will exceed the Company's  working
capital requirements for the next year.

         The Company  intends to seek an acquisition of a larger and potentially
more  profitable  business.  The Company  intends to focus on  opportunities  to
acquire new products or  technologies  in development as well as those currently
being operated,  including a complete  operating  business that has demonstrated
long-term  growth  potential,  strong  marketing  presence,  and the  basis  for
continuing profitability.  The Company has not identified any specific target or
possible  acquisition.  As the Company pursues its acquisition  program, it will
incur  costs for  ongoing  general  and  administrative  expenses as well as for
identifying, investigating, and negotiating a possible acquisition.

         In order to complete  any  acquisition,  the Company may be required to
supplement  its  available  cash and other  liquid  assets  with  proceeds  from
borrowings,  the sale of additional securities,  including the private placement
of restricted stock and/or a public offering, or other sources.  There can be no
assurance  that  any such  required  additional  funding  will be  available  or
favorable to the Company.

         Because  management  controls  86% of  voting  rights,  management  may
actively  negotiate or otherwise consent to the purchase of any portion of their
common  stock as a  condition  to or in  connection  with a  proposed  merger or
acquisition.  Furthermore,  management  could consent or approve any  particular
stock buy-out transaction without shareholder approval. In the event that an

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appropriate  merger  candidate  is  located,  the  Company  may need to pay cash
finder's  fees or may issue  securities  (debt or  equity) as a  finders's  fee.
Finder's fees or other acquisition related compensation may be paid to officers,
directors,  promoters  or their  affiliates.  Any such  finder's  fee paid to an
officer,  director,  promoter,  or affiliate  may present a conflict of interest
because of the non-arms  length  nature of such  transaction.  There are no such
negotiations in progress or contemplated.

         There are no  arrangements  or  understandings  between  non-management
shareholders and management under which non-management shareholders may directly
or  indirectly  participate  in or influence  the  management  of the  Company's
affairs.

         The Company may be required to supplement  its available cash and other
liquid assets with proceeds from borrowing,  the sale of additional  securities,
or other sources.  There can be no assurance  that any such required  additional
funding will be  available  or, if  available,  that it can be obtained on terms
favorable to the Company.

Inflation and Regulation

         The Company's  operations  have not been,  and in the near term are not
expected to be, materially affected by inflation or changing prices. The Company
will encounter competition from a variety of firms selling barter/trade services
in  its  market  area.   Many  of  these  firms  have  long  standing   customer
relationships and are well-staffed and well financed.  The Company believes that
competition  in the  barter/trade  industry  is  based on  competitive  pricing,
although  the  ability,  reputation  and support of a marketing  network is also
significant. The Company does not believe that any recently enacted or presently
pending proposed  legislation will have a material adverse effect on its results
of operations.

Factors That May Affect Future Results

         Management's  Discussion  and  Analysis  and  other  parts of this form
10-KSB contain  information  based on management's  beliefs and  forward-looking
statements that involve a number of risks, uncertainties, and assumptions. There
can be no  assurance  that actual  results  will not differ  materially  for the
forward-looking  statements  as a result of various  factors,  including but not
limited to the following:

         The markets for many of the Company's  offerings are  characterized  by
rapidly  changing  technology,  evolving  industry  standards,  and frequent new
product  introductions.  The  Company's  operating  results  will  depend  to  a
significant  extent on its ability to design,  develop,  or otherwise obtain and
introduce new products, services, systems, and solutions and to reduce the costs
of these offerings. The success of these and other new offerings is dependent on
many factors,  including proper  identification of customer needs,  cost, timely
completion  and  introduction,  differentiation  from offerings of the Company's
competitors,  and market acceptance.  The ability to successfully  introduce new
products and services could have an impact on future results of operations.

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                           ITEM 7 FINANCIAL STATEMENTS

         The  financial  statements  of the Company and  supplementary  data are
included beginning  immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.

              ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

         There are not and have not been any  disagreements  between the Company
and its  accountants  on any  matter  of  accounting  principles,  practices  or
financial statements disclosure.

                                    PART III

               ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
                CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF
                                THE EXCHANGE ACT

EXECUTIVE OFFICERS AND DIRECTORS

         The  following  table sets forth the name,  age,  and  position of each
executive officer and director of the Company:

DIRECTOR'S   NAME      AGE     OFFICE                           TERM OF OFFICE

--------------------------------------------------------------------------------

JAMES O'BRIEN          63      CEO/PRESIDENT                    1990 TO PRESENT

ROSE FISCHER           46      SECRETARY/TREASURER              1996 TO PRESENT


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DIRECTOR'S   NAME      Age     Office                           Term of Office

--------------------------------------------------------------------------------

GOLDIE HUNT            70      DIRECTOR                         1992 TO PRESENT


BUSINESS EXPERIENCE

James O'Brien, CEO/President,  founded Optimum Source International Ltd., during
the past five  years  Mr.  O'Brien  developed  software,  established  trade and
countertrade exchanges for Optimum Source International, Ltd.

Rose Fischer,  Secretary/Treasurer,  with an associate degree in accounting, has
been Director and Operations  Facilitator for the past two years, which includes
finalization and  implementation of all electronic  commerce.  Prior to OSI, Ms.
Ros's experience was as a financial  consultant with a privately held firm since
1985.

Goldie Hunt, Director, for the past six years has pursued her personal interests
since retiring from the retail industry.


COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer,  beneficial owner of more than 10% of any class of equity securities of
the  Company  or any other  person  known to be  subject  to  Section  16 of the
Exchange  Act of 1934,  as  amended,  failed to file on a timely  basis  reports
required by Section 16(a) of the Exchange Act for the last fiscal year.



                         ITEM 10 EXECUTIVE COMPENSATION

         There has been no executive compensation.





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                 ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
                                 AND MANAGEMENT

PRINCIPAL SHAREHOLDERS

         The table  below sets forth  information  as to each  person  owning of
record or who was known by the Company to own  beneficially  more than 5% of the
11,656,585  shares of issued and  outstanding  Common Stock of the Company as of
February 14, 1999 and  information as to the ownership of the Company's Stock by
each of its directors and executive  officers and by the directors and executive
officers  as a group.  Except  as  otherwise  indicated,  all  shares  are owned
directly,  and the persons  named in the table have sole  voting and  investment
power with respect to shares shown as beneficially owned by them.

                                                        # OF
NAME AND ADDRESS                    NATURE OF           SHARES
OF BENEFICIAL OWNERS                OWNERSHIP           OWNED            PERCENT

DIRECTORS

James O'Brien                       Common Stock        11,000,000           94%

All Executive Officers              Common Stock        11,002,534           94%
and Directors as a Group
  (5 persons)

Mr. O'Brien has "sole investment  power" and "sole voting power" over 10,000,000
shares and "sole voting power" over 1,000,000.



             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         James O'Brien, the President of the Company,  provided the Company with
the  marketing  distribution  plans,  compensation  program,  commission  payout
structure, operations, and automated monthly ordering system.

         During 1999 and 1998 the Company  borrowed  money from James O'Brien to
pay administrative expenses. The loan is payable on demand and carries an annual


                                       15


<PAGE>

interest rate of 10 percent.  As of December 31, 1999,  the  principal  owing is
$95,456 with accrued interest of $11,299.

         Through  December  31,  1998 all  activities  of the  Company  had been
conducted by  corporate  officers  from either their homes or business  offices.
Currently,  there are no  outstanding  debts owed by the  Company for the use of
these facilities and there are no commitments for future use of the facilities.

                   ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this report.

1.       FINANCIAL STATEMENTS                                              PAGE

Report of Robison, Hill & Co., Independent Certified Public Accountants    F - 1

Consolidated Balance Sheets
  December 31, 1999 and 1998                                               F - 2

Consolidated Statements of Operations
  For the Years Ended December 31, 1999 and 1998                           F - 3

Consolidated Statement of Stockholders' Equity
  For the Years Ended December 31, 1999 and 1998                           F - 4

Consolidated Statements of Cash Flows
  For the Years Ended December 31, 1999 and 1998                           F - 5

Notes to the Consolidated Financial Statements
  December 31, 1999 and 1998                                               F - 6

2.       FINANCIAL STATEMENT SCHEDULES

         The following  financial statement schedules required by Regulation S-X
are included herein.

         All  schedules  are  omitted  because  they are not  applicable  or the
required information is shown in the financial statements or notes thereto.


                                       16


<PAGE>

3.       EXHIBITS

                  The following exhibits are included as part of this report:

Exhibit

Number            Title of Document

3.1               Articles of Incorporation(1)
3.2               By-laws(1)
23.1              Consent of Robison, Hill & Co.(1)
27.1              Financial Data Schedule

(1) Incorporated by reference.

         (a)      No reports on Form 8-K were filed.





                                       17


<PAGE>




                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                       OPTIMUM SOURCE INTERNATIONAL, LTD.

DATED: FEBRUARY 15, 2000                        BY  /S/     JAMES O'BRIEN
                                                ----------------------------
                                                James O'Brien,
                                                C.E.O., President

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.

Signatures                                                  Title

/S/     JAMES O'BRIEN

James O'Brien                                    Director, C.E.O., President
        FEBRUARY 15, 2000                        (Principal Executive, Financial
Date                                             and Accounting Officer)

/S/     ROSE FISCHER

Rose Fischer                                     Director, Secretary/Treasurer

        FEBRUARY 15, 2000

Date

/S/     GOLDIE HUNT

Goldie Hunt                                      Director

         FEBRUARY 15, 2000

Date

                                       18


<PAGE>







                          INDEPENDENT AUDITOR'S REPORT

Board of Directors
Optimum Source International, Ltd.

         We have audited the accompanying consolidated balance sheets of Optimum
Source  International,  Ltd., as of December 31, 1999 and 1998,  and the related
consolidated statements of operations, retained earnings, and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these financial statements based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present  fairly,  in all material  respects,  the financial  position of Optimum
Source International,  Ltd., as of December 31, 1999 and 1998 and the results of
its  operations,  and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

                                             Respectfully submitted,



                                             /s/ ROBISON, HILL & CO.
                                             ____________________________
                                             Certified Public Accountants

Salt Lake City, Utah
February 9, 2000

                                      F - 1


<PAGE>



                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                                  1999           1998
                                                              -----------    -----------
<S>                                                           <C>            <C>
ASSETS
Current Assets
    Cash ..................................................   $       149    $      --
    Accounts Receivable ...................................         2,455           --
    Inventory .............................................        32,100         50,000
    Available-for-Sale Investments ........................       127,688           --
                                                              -----------    -----------

     Total Current Assets .................................       162,392         50,000

Other Assets - Intangible Assets ..........................     1,000,000           --
                                                              -----------    -----------

                                                              $ 1,162,392    $    50,000
                                                              ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
   Accounts Payable .......................................   $    28,748    $    18,689
   Trade Dollars Payable ..................................        32,100         65,000
   Accrued Liabilities ....................................        11,299          2,133
   Loans From Shareholder .................................        95,456         83,306
                                                              -----------    -----------

     Total Liabilities ....................................       167,603        169,128
                                                              -----------    -----------

Stockholders' Equity
   Preferred Stock, authorized 5,000,000 shares of
      $.01 par value, issued and outstanding zero .........          --             --
   Common Stock, authorized 50,000,000 shares of
      $.001 par value, issued and outstanding 11,656,585 at
      December 31, 1999 and 1,654,051 at December 31, 1998         11,657          1,654
    Additional Paid in Capital ............................     1,096,262         92,765
    Accumulated Other Comprehensive Income ................        25,511           --
    Retained Deficit ......................................      (138,641)      (213,547)
                                                              -----------    -----------

     Total Stockholders' Equity (Deficit) .................       994,789       (119,128)
                                                              -----------    -----------

   Total Liabilities and Stockholders' Equity .............   $ 1,162,392    $    50,000
                                                              ===========    ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F - 2


<PAGE>



                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

                                                        1999            1998
                                                    -----------     -----------

Revenues ......................................     $   182,626     $    45,905
Cost of Revenues ..............................          56,400          14,013
                                                    -----------     -----------

     Gross Profit .............................         126,226          31,892
                                                    -----------     -----------

Expenses

   General and Administrative Expenses ........          37,712         101,878
   Other Expense - Interest ...................          13,608           7,615
                                                    -----------     -----------

     Total Expenses ...........................          51,320         109,493
                                                    -----------     -----------

Net Income (Loss) Before Taxes ................          74,906         (77,601)

Income Taxes ..................................            --               (50)
                                                    -----------     -----------

Net Loss ......................................     $    74,906     $   (77,651)
                                                    ===========     ===========

Net Income (Loss) Per Share ...................     $      0.03     $     (0.05)
                                                    ===========     ===========

Weighted Average shares

 Outstanding ..................................       2,887,004       1,654,051
                                                    ===========     ===========















   The accompanying notes are an integral part of these financial statements.

                                      F - 3


<PAGE>



                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>

                                                                                        Accumulated
                                                                          Additional       Other
                                      Common Stock           Paid-in    Comprehensive    Retained       Treasury
                               -------------------------
                                  Shares        Amount       Capital        Income        Deficit         Stock
                               -----------   -----------   -----------    -----------   -----------    -----------

<S>                            <C>           <C>           <C>            <C>           <C>            <C>
Balance at January 1, 1998 .     1,654,051   $     1,654   $    93,876    $      --     $  (135,896)   $     1,111

Treasury stock canceled ....          --            --          (1,111)          --          (1,111)

Net Loss ...................          --            --            --             --         (77,651)          --
                               -----------   -----------   -----------    -----------   -----------    -----------

Balance at December 31, 1998     1,654,051         1,654        92,765           --        (213,547)          --

November 2, 1999 Shares
issued in exchange for

"The Word" subsidiary ......    10,000,000        10,000       990,000           --            --             --

December 20, 1999 Shares

issued for cash ............         2,534             3        13,497           --            --             --

Comprehensive income:

  Net Income ...............          --            --            --             --          74,906           --
  Unrealized holding gains .          --            --            --           25,511          --             --
                               -----------   -----------   -----------    -----------   -----------    -----------

Balance at December 31, 1999    11,656,585   $    11,657   $ 1,096,262    $    25,511   $  (138,641)   $      --
                               ===========   ===========   ===========    ===========   ===========    ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F - 4


<PAGE>



                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

                                                                December
                                                         ----------------------
                                                            1999        1998
                                                         ---------    ---------
CASH FLOWS FROM OPERATING
Net cash Provided (used) by operating activities .....   $  76,676    $ (28,726)
                                                         ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Available-for-sale Investments ........    (102,177)        --
                                                         ---------    ---------
Net cash used by investing activities ................    (102,177)        --
                                                         ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock ...............      13,500         --
Loans from shareholder ...............................      12,150       28,726
                                                         ---------    ---------
Net cash provided by financing activities ............      25,650       28,726
                                                         ---------    ---------
Net increase (decrease) in cash and
  Cash equivalents ...................................         149         --
Cash and cash equivalents at beginning
 of year .............................................        --           --
                                                         ---------    ---------
Cash and cash equivalents at end of year .............   $     149    $    --
                                                         =========    =========

RECONCILIATION OF NET LOSS TO CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
Net Income (loss) ....................................   $  74,906    $ (77,651)
CHANGES IN ASSETS AND LIABILITIES
Increase in accounts receivable ......................      (2,455)        --
Decrease (Increase) in inventory .....................      17,900      (35,987)
Increase in prepaid expense ..........................        --         10,000
Increase in accounts payable .........................      10,059       16,234
Increase (Decrease) in trade dollars payable .........     (32,900)      65,000
Increase (Decrease) in accrued expenses ..............       9,166       (6,322)
                                                         ---------    ---------
Net Cash Provided (Used) by Operating Activities .....   $  76,676    $ (28,726)
                                                         =========    =========
Supplemental Disclosure of Cash Flow Information
Interest .............................................   $    --      $    --
Income Taxes .........................................   $    --      $    --

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:  On November 2, 1999 the Company  acquired a wholly owned subsidiary
"The Word  Ltd" and its  products  and  marketing  rights  (i.e.,  Traders  Tool
software,  Art of Starter Barter Book,  and world wide marketing  rights to both
products),  in exchange  for 10 million  shares of the  Company's  common  stock
valued at $.10 per share (total exchange value $1,000,000).

    The accompanying notes are an integral part of these financial statements

                                      F - 5


<PAGE>



                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting  policies for Optimum Source  International,
Ltd. is presented to assist in understanding the Company's financial statements.
The accounting policies conform to generally accepted accounting  principles and
have been consistently applied in the preparation of the financial statements.

ORGANIZATION AND HISTORY

         The  Company  was  incorporated  under the laws of the State of Utah on
October 24,  1984.  The Company  Redomiciled  to the State of Nevada on June 29,
1990. From 1984 to 1986, the Company  attempted to  manufacture,  distribute and
sell chemical products for the purification of water. This business activity was
abandoned.  From 1986 to 1990,  the Company  attempted  to acquire  interests in
various  business  opportunities,  all attempts were abandoned.  The Company was
inactive from 1990 to 1992.

NATURE OF BUSINESS

         The  Company's   primary  mission  is   Barter/Counter-trade   and  its
proprietary   interactive   services   both  Domestic  and   International   and
encompassing the liquidation & auction industries globally.

CONSOLIDATION

         The  consolidated  financial  statements  include  the  accounts of the
Company,  its  predecessors  and its wholly owned  subsidiary The Word. Ltd. The
effect of all  intercompany  balances and  transactions  have been eliminated in
combination.

CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

RECLASSIFICATION

         Certain   reclassifications  have  been  made  in  the  1998  financial
statements to conform with the 1999 presentation.

                                      F - 6


<PAGE>



                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998
                                   (CONTINUED)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

LOSS PER SHARE

         The  reconciliations  of the numerators and  denominators  of the basic
earnings per share computations are as follows:

                                                                       Per-Share
                                                 INCOME       SHARES     AMOUNT
                                               (Numerator) (Denominator)

                                            FOR THE YEAR ENDED DECEMBER 31, 1999

Basic Earnings per Share

Income available to common shareholders .....   $  74,906    2,887,004    $0.03
                                                =========    =========    =====


                                            FOR THE YEAR ENDED DECEMBER 31, 1998

Basic Earnings per Share

Income available to common shareholders ......  $ (77,651)   1,654,051   $(0.05)
                                                =========    =========   =====


         There are no outstanding common stock equivalents at December 31, 1999.
The effect of outstanding  common stock  equivalents  would be antidilutive  for
1998 and are thus not considered.

PERVASIVENESS OF ESTIMATES

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  required  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

NOTE 2 - COMPREHENSIVE INCOME

         Comprehensive  income is the total of (1) net income plus (2) all other
changes in net income  arising from nonowner  sources,  which are referred to as
other comprehensive  income. An analysis of changes in components of accumulated
other  comprehensive  income  is  presented  in  the  statement  of  changes  in
stockholders' equity.

                                      F - 7


<PAGE>


                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                        NOTES TO THE FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998
                                   (CONTINUED)

NOTE 3 - AVAILABLE-FOR-SALE INVESTMENTS

         The Company's  investments in marketable equity securities are held for
an indefinite  period and thus are classified as available for sale.  Unrealized
holding gain (loss) on such securities, which were added to stockholders' equity
during 1999 and 1998 were $25,511 and $0, respectively.

NOTE 4 - INCOME TAXES

         As  of  December  31,  1999,  the  Company  had a  net  operating  loss
carryforward  for  income  tax  reporting  purposes  of  approximately  $111,000
expiring in 2016  through  2018.  Current tax laws limit the amount of loss that
can  offset  future  taxable  income  when  there  is a  substantial  change  in
ownership.  The amount of net operating  loss  available to offset future income
will be limited if there is a substantial change in ownership.

         The Company is subject to  corporate  federal  income  taxes.  Deferred
taxes are  determined  based on the estimated  future tax effects of differences
between the financial  reporting and tax basis of assets and  liabilities  given
the  provisions of the enacted tax laws. The deferred tax asset and deferred tax
liability comprised the following at December 31:

                                                         1999            1998
                                                       --------        --------
Deferred Tax Asset:
  Net operating loss carryforward ..............       $ 26,540        $ 55,790
  Valuation Allowance ..........................        (26,540)        (55,790)
                                                       --------        --------
Deferred Tax Asset .............................           --              --
                                                       --------        --------
Deferred Tax Liability: ........................           --              --
                                                       --------        --------
Net Deferred Tax Asset (Liability) .............       $   --          $   --
                                                       ========        ========


The components of the income tax provision are as follows:

                                                    1999                  1998
                                                  --------              --------
Current
 Federal ............................             $ 14,535              $   --
 State ..............................                 --                      50
Deferred
 Federal ............................              (14,535)                 --
 State ..............................                 --                    --
                                                  --------              --------
     Total ..........................             $   --                $     50
                                                  ========              ========

                                     F - 8
<PAGE>
                       OPTIMUM SOURCE INTERNATIONAL, LTD.
                        NOTES TO THE FINANCIAL STATEMENTS
                           DECEMBER 31, 1999 AND 1998
                                   (CONTINUED)

NOTE 4 - INCOME TAXES (CONTINUED)

A  reconciliation  between the  Company's  effective  tax rate and the statutory
federal income tax rate on the income from continuing operations is as follows:

                                                 1999       1998
                                                ------     ------
Statutory federal income tax rate ........       34.00  %   34.00  %
State income taxes .......................       --     %    2.00  %
Other ....................................      (34.00) %  (36.00) %
                                                 -----       -----

Effective income tax rate ................       --     %    --    %
                                                =====       =====


NOTE 5 - RELATED PARTY TRANSACTIONS

         During 1999 and 1998 the Company  borrowed money from an officer to pay
administrative  expenses.  The loan is payable  on demand and  carries an annual
interest rate of 10 percent.  As of December 31, 1999,  the  principal  owing is
$95,456 with accrued interest of $11,299.

NOTE 6 - STOCK SPLIT

         On December  23, 1998,  1998 the Board of  Directors  authorized 5 to 1
reverse stock split of the Company's  $.001 par value common stock.  As a result
of the split, 6,703,159 shares were canceled, and additional paid-in capital was
increased by $6,703. All references in the accompanying  financial statements to
the number of common shares and per-share amounts for 1998 have been restated to
reflect the reverse stock split.

NOTE 7 - COMMITMENTS

         The Company has  committed  to a one year lease at $1,500 per month for
its corporate headquarters in Las Vegas, Nevada.

         As of December 31, 1998 all activities of the Company were conducted by
corporate  officers  from either their homes or business  offices.  There are no
outstanding  debts owed by the company for the use of these facilities and there
are no commitments for future use of the facilities.

                                      F - 9