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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION ------------------------
Washington, D.C. 20549 OMB Number:3235-0416
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FORM 10-QSB Expires: April 30,2003
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Estimated average burden
hours per response: 32.0
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______ to ______.
Commission file number: 0-17978
XPEDIAN, INC.
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(Exact name of small business issuer as specified in its charter)
FLORIDA 59-2720096
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(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
6230 Fairview Road, Suite 102, Charlotte, North Carolina 28210
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(Address of principal executive offices)
(704) 364-2066
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(Issuer's telephone number)
(Former name, former address and former fiscal year, if changed since last
report.)
36,450,430 shares of common stock, par value $.01 per share, were outstanding at
November 17, 2000.
Transitional Small Business Disclosure Format (Check one): Yes[__] No[__]
XPEDIAN, INC.
AND SUBSIDIARIES
FORM 10-QSB
INDEX
PAGE
PART I-FINANCIAL INFORMATION
Item 1-Consolidated Financial Statements (unaudited)
Consolidated Balance Sheet - September 30, 2000 (unaudited) 1
Consolidated Statements of Income and Other Comprehensive Income-
Three Months ended September 30, 2000 and 1999 (unaudited) 2
Consolidated Statements of Cash Flows - Three Months
ended September 30, 2000 and 1999 (unaudited) 3
Notes to Consolidated Financial Statements 4
Item 2-Management's Discussion and Analysis or Plan of Operation 5
PART II-OTHER INFORMATION
Item 1 -Legal Proceedings 7
Item 2 -Changes in Securities 7
Item 3 -Defaults Upon Senior Securities 7
Item 4 -Submission of matters to a Vote of Securities Holders 7
Item 5 -Other Information 8
Item 6 -Exhibits and reports on Form 8-K 8
PART I-FINANCIAL INFORMATION
Item 1-Financial Statements (unaudited)
The financial statements in response to this item are as follows:
XPEDIAN, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and 1999
CONTENTS
PAGE
CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheet F-1
Consolidated Statements of Loss F-2
Consolidated Statements of Cash Flows F-3
Notes to Consolidated Financial Statements F-4
XPEDIAN, INC. AND SUBSIDIARIES
Balance Sheet - Unaudited
September 30, 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 105
Common stock held In escrow 30
Note receivable - consultant 77,914
Advances to related parties 90,300
Other advances 41,268
Prepaid fees 65,625
Deposits 2,773
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TOTAL CURRENT ASSETS 278,015
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PROPERTY AND EQUIPMENT 39,148
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OTHER ASSETS
Software licensing agreement 644,370
Security deposits 1,935
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TOTAL OTHER ASSETS 646,305
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TOTAL ASSETS $ 963,468
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 93,069
Bank overdraft 8,456
Accrued liabilities 121,227
Advances from officer 4,204
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TOTAL CURRENT LIABILITIES 226,956
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SHAREHOLDERS' EQUITY
Common stock, $.0001 par value, 100,000,000 shares authorized
and 36,450,430 shares issued and outstanding 3,645
Additional paid-in capital 13,159,574
Accumulated deficit (12,426,647)
Treasury stock, at cost (60)
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TOTAL STOCKHOLDERS' EQUITY 736,512
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 963,468
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See accompanying notes
XPEDIAN, INC. AND SUBSIDIARIES
Consolidated Statements of Loss - Unaudited
Three Months Ended
September September
30, 2000 30, 1999
EXPENSES
Consulting, professional and administrative fees $ 187,741 $ 831,317
General and administrative 45,750 5,584
Travel & entertainment 14,229 2,454
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TOTAL EXPENSES 247,720 839,355
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OTHER INCOME (LOSS)
Interest 1,929 -
Loss on marketable securities (44,997) -
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TOTAL OTHER INCOME (LOSS) (43,068) -
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LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAX BENEFIT (290,788) (839,355)
INCOME TAX BENEFIT - -
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LOSS FROM CONTINUING OPERATIONS, NET OF
INCOME TAX BENEFIT (290,788) (839,355)
DISCONTINUED OPERATIONS
Loss from operations of
discontinued subsidiaries - (57,958)
Income tax benefit - -
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LOSS FROM DISCONTINUED OPERATIONS, NET OF
INCOME TAX BENEFIT - (57,958)
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NET LOSS $(290,788) $(897,313)
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Basic and diluted weighted average shares outstanding 35,910,975 23,047,614
Basic and diluted net loss per share from:
Continuing operations $ (0.01) $ (0.04)
Discontinued operations $ - $ -
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Basic and diluted net loss per share $ (0.01) $ (0.04)
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See accompanying notes.
XPEDIAN, INC. ND SUBSIDIARIES
Statements of Cash Flows
Three Months Ended
September 30,
2000 1999
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (290,788) $(839,355)
Adjustments to reconcile net loss to net cash provided
(used) by operating activities:
Common stock issued for services 168,750 825,000
Depreciation 2,791 -
Realized loss on sales of trading securities 44,997 -
Increase in prepaid rent - ( 11,960)
Increase in prepaid fees (65,625) -
Increase in accounts payable 43,154 ( 13,281)
Increase in bank overdraft 8,456 -
Increase in accrued interest receivable (1,875) -
Proceeds from sales of trading securities 249,891 -
Decrease in accrued liabilities (26,926) -
Decrease in advances from officer (2,102) -
Decrease in margin loan to purchase trading
securities (98,094) -
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Net cash provided (used) by operating activities 32,629 ( 39,596)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of software license agreement - ( 15,000)
Advances to related parties (91,785) -
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Net cash used by investing activities (91,785) ( 15,000)
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CASH FLOWS FROM FINANCING ACTIVITIES
Loan from related party - 53,000
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Net cash used by financing activities - ( 53,000)
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NET DECREASE IN CASH AND EQUIVALENTS (59,156) ( 1,596)
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CASH AND EQUIVALENTS - BEGINNING 59,261 1,904
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CASH AND EQUIVALENTS - ENDING $ 105 $ 308
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SUPPLEMENTAL DISCLOSURES:
Interest received $ 1,929 -
Interest paid 822 -
Income taxes paid - -
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Common stock issued for software license agreement $10,546,800
Common stock issued for services $ 168,750 825,000
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See accompanying notes.
XPEDIAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and 1999
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information, the instructions to Form 2-QSB and item 310 (b) of Regulation SB.
Accordingly, they do not include all 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 fair presentation have been included. For
further information, refer to the Financial Statements and footnotes thereto
included in the Company's Form 10-KSB for the year ended June 30, 2000 as filed
with the Securities and Exchange Commission.
NOTE B - LOSS PER SHARE
Basic and diluted net loss per share was computed based on the weighted average
number of shares of common stock outstanding during the period.
NOTE C - ACQUISITIONS
During the quarter ended September 30, 2000, the Company advanced $90,000
related to a previously announded acquisition of Global Vision, Inc. It is
anticipated that all requirements to finalize the acquisition will be completed
during the quarter ended December 31, 2000. Until usch time as the acquisition
is complete, Xpedian, Inc. will not file consolidated financial statements with
Global Vision, Inc.
F-4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
This Quarterly Report on Form 10-QSB (the "Report") contains forward looking
statements concerning, among other things, the Company's expected future
revenues, operations and expenditures, competitors or potential competitors, and
licensing and distribution activity. These forward-looking statements are
identified by the use of terms and phrases such as "anticipate," "believe,"
"could," "estimate," "expect," "intent," "may," "will," "plan," "predict,"
"potential," and similar terms and phrases, including references to assumptions.
These statements are contained in each part of this report and in the documents
incorporated by reference herein. These forward-looking statements represent the
expectations of the Company's actual results could differ materially from those
anticipated by the forward looking statements due to a number of factors,
including; (i) limited operating history; (ii) need for financing; (iii)
dependence upon a single employee; (iv) reliance on single license; (v)
compliance with law; (vi) lack of sales; (vii) reliance of revenue growth upon
economic conditions; (viii) competition; (ix) control by majority shareholder;
(x) absence of dividends; (xi) government regulation of the Internet; and the
other risks and uncertainties described elsewhere herein and in the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999 under the
caption, "Factors Affecting Future Operating Results" under Item
2.-"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
The Company is under no obligation to revise or publicly release the results of
any revision to these forward-looking statements. Readers should carefully
review the risk factors described in other documents the Company files from time
to time with the Securities and Exchange Commission ("SEC").
The following Discussion and analysis provides information, which the Company's
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial condition. This discussion should
be read in conjunction with financial statements and notes thereto appearing
elsewhere herein.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000 cash and cash equivalents were $105 as compared with
$59,261 at June 30, 2000. The Company reported losses for the quarter ended
September 30, 2000 of $290,788. The Company will continue to incur operating
losses until the Internet estate planning business realizes significant
revenues. The Company had working capital of $51,059 at September 30, 2000 as
compared to $168,670 at June 30, 2000.
The Company has experienced significant losses from past operations. The Company
anticipated that it's websites and insurance activities would begin producing
revenue during the fiscal quarter ended June 30, 2000, however delays in product
launch have forced the Company to revise that estimate to the fiscal quarter
ended December 31, 2000. We may continue to experience losses as we continue to
develop and implement sales and advertising strategies promoting the Company's
financial services products. Management anticipates that losses should decrease
as time passes due to product sales and resulting revenues.
The Company is funding its current expansion into domestic business-to- business
Internet businesses from funds that it derived from equity financing with
outside sources. As the Company begins to generate revenues, it intends to use
both operating revenues and external sources to fund the future expansion.
However, there can be no assurance that outside financing will be available or
that future revenues will be generated in sufficient amounts or that additional
funds will not be required for the continued expansion of operations. The
Company intends to meet its short-term and long-term liquidity needs through
additional financing from outside sources. There can be no assurance that the
Company will achieve profitability or positive cash flow. If the Company is not
successful in raising sufficient funds, it may be required to limit the scope of
its proposed expansion into domestic business-to-business internet services.
During the quarter ended September 30, 2000, the Company put forward $90,000
toward our previously announced acquisition of Gloval Vision, Inc. It is
anticipated that all requirements to finalize the acquisition will be completed
during the quarter ended December 31, 2000. Consolidation of Global Vision, Inc.
financials with Xpedian, Inc. will occur at that time.
RESULTS OF OPERATIONS
Quarter Ended September 30, 2000 Compared to Quarter Ended September 30,1999
Expenses for the quarter ended September 30, 2000 decreased significantly in
comparison to the quarter ended September 30, 1999. The Company reported
$247,720 in expenses during the quarter ended September 30, 2000 and reported
expenses of $839,355 for the quarter ended September 30, 1999. This decrease is
primarily due to the significant decreases in consulting fees. The expenses
reported for the quarter ended September 30, 1999 were almost entirely made up
of fees paid with Company stock registered via an S-8 registration filed on July
29, 1999, and from which the Company received no future benefit. The expenses
reported for the quarter ended September 30, 2000 are also made up almost
entirely of fees paid with Company stock registered via an S-8 registration on
September 13, 2000. However, the majority of these fees were paid for consulting
services/contracts, which will provide services for the Company over the next
two years.
Other Income for the quarter ended September 30, 2000 decreased from zero to
$(43,068). $1,929 in interest income was earned during the quarter ended
September 30, 2000, however that income was offset by $44,997 in losses incurred
in marketable securities owned by the Company.
Losses posted due to Continuing Operations for the quarter ended September 30,
2000 decreased significantly. In quarter ended September 30, 1999 the Company
posted no income and posted expenses of $839,355. In quarter ended September 30,
2000 the Company posted $247,720 in expenses and posted a net other income
(loss) of $43,068. Similar to expenses, the primary reason for the decrease in
Losses posted due to Continuing Operations is primarily attributable to
significant decreases in consulting fees posted for the quarter.
The Company had no gains posted to Discontinued Operations in either the quarter
ended September 30, 2000 or the quarter ended September 30, 1999.
The Company experienced a Net Loss of $290,788 for the quarter ended September
30, 2000.
Net Loss Per Share (Primary and Diluted) decreased from $.04 in the
quarter ended September 30, 1999 to $.01 in the quarter ended September 30,
2000. In the quarter ended September 30, 1999 the decrease in Net Loss Per Share
was due to the significant increase in issued shares as a result of the license
agreement with Commerce Capital Group, LLC. In the quarter ended September 30,
2000 the decrease in Net Loss Per Share was due to significant decreases in
expenses.
As of September 30, 2000 cash and cash equivalents were $105 as compared with
$59,261 at June 30, 2000. The Company reported losses for the quarter ended
September 30, 2000 of $290,788. The Company may continue to incur operating
losses until it achieves large-scale usage of its Internet estate planning
businesses. The Company had working capital of $51,059 at September 30, 2000
as compared to $168,670 at June 30, 2000.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
During the quarter ended there were changes due to the issuance of shares
pursuant to a Form S-8 registration statement.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
No matters were submitted to a vote.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - 27 Financial Data Schedule
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XPEDIAN, INC.
/s/ Dale K. Chapman
By: --------------------------------------------
Name: Dale K. Chapman
Title: President
Date: November 20, 2000