UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to ___________
Commission file number 000-33465
MAXXZONE.COM, INC.
--------------------------
(Exact name of small business issuer as specified in its charter)
Nevada
------------------------
(State or other jurisdiction of incorporation or organization)
88-0503197
-------------------
(IRS Employer Identification No.)
1770 N. Green Valley Parkway, Suite 3214 Las Vegas, NV 89014
------------------------------------------------------------
(Address of principal executive offices)
(702) 616-7337
------------------
(Issuer's telephone number)
Not Applicable
--------------------
(Former name, former address and former fiscal year, if
changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports
required to be filed by Section l2, 13 or 15(d) of the
Exchange Act after the distribution of securities under a
plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: 81,355,570
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [ X]
-COVER-
PART 1-FINANCIAL INFORMATION
Item 1. Financial Statements.
maxxZone.com, Inc.
(a Development Stage Company)
Balance Sheet
(unaudited)
March 31,
2003
-------------
Assets
Current assets:
Cash $ -
Prepaid expenses - related party 12,440
-------------
Total current assets 12,440
-------------
Fixed assets, net 1,970
Web site development, net 54,672
-------------
$ 69,082
=============
Liabilities and Stockholders' equity
Current liabilities:
Checks issued in excess of cash available $ 290
Accounts payable 6,671
Notes payable - related party 14,678
-------------
Accrued rent - related party -
Accrued management fees - related party -
Total current liabilities 21,639
Long-term liabilities:
Convertible debt 20,730
Accrued interest 2,534
-------------
Total long-term liabilities 23,264
-------------
Total liabilities 44,903
-------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, no shares issued and
outstanding -
Common stock, $0.001 par value, 25,000,000
shares authorized, 81,355,570 shares
issued and outstanding 81,355
Additional paid-in capital 2,990,408
Donated capital -
Deferred compensation (20,250)
(Deficit) accumulated during development
stage (3,027,334)
-------------
24,179
$ 69,082
=============
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maxxZone.com, Inc.
(a Development Stage Company)
Statements of Operations
(unaudited)
June 7, 2000
Three Months Ending (Inception) to
March 31, March 31,
2003 2002 2003
------------ ------------ -----------
Revenue $ - $ - $ -
------------ ------------ -----------
Expenses:
General and administrative expenses 6,470 10,390 43,584
General and administrative
expenses - related party 15,990 - 100,363
Professional fees 2,700,837 18,246 2,759,698
Depreciation and amortization 14,728 14,065 121,155
------------ ------------ -----------
Total expenses 2,738,025 42,701 3,024,800
------------ ------------ -----------
Other expense:
Interest (expense) (1,393) - (2,534)
------------ ------------ -----------
Total other expense (1,393) - (2,534)
------------ ------------ -----------
Net (loss) $(2,739,418) (42,701) (3,027,334)
============ ============ ===========
Weighted average number of
common shares outstanding -
basic and fully diluted 57,864,234 11,907,000
============ ============
Net (loss) per share - basic and $ (0.05) $ (0.00)
fully diluted ============ ============
-PAGE-
maxxZone.com, Inc.
(a Development Stage Company)
Statements of Cash Flows
(unaudited)
June 7, 2000
Three Months Ending (Inception) to
March 31, March 31,
2003 2002 2003
Cash flows from operating activities
Net (loss) $ (2,739,418) $ (42,701) $ (3,027,334)
Shares issued for services 2,693,452 - 2,748,202
Depreciation and amortization 14,728 14,065 121,155
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
Decrease (increase) in prepaid 300 13,000 (12,440)
expenses - related party
Increase in accounts payable 6,671 - 6,671
(Decrease) in accrued rent - related party - (3,000) -
(Decrease) in accrued management
fees - related party (1,000) - -
Net cash (used) by operating activities (25,267) (18,636) (163,746)
Cash flows from investing activities
Purchases of fixed assets - - (2,651)
Development of website - (5,813) (30,147)
Net cash (used) by investing activities - (5,813) (32,798)
Cash flows from financing activities
Increase in checks issued in excess of cash 290 - 290
Note payable - related party 12,778 - 14,678
Convertible debt (35,000) - 20,730
Accrued interest 1,393 - 2,534
Issuance of common stock 35,000 - 193,749
Donated capital - - -
Deferred compensation - - (35,437)
Net cash provided by financing activities 14,461 - 196,544
Net (decrease) in cash (10,806) (24,449) -
Cash - beginning 10,806 56,551 -
Cash - ending $ - $ 32,102 $ -
Supplemental disclosures:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions:
Shares issued for services $ 2,693,452 $ - 3,218,452
Number of shares issued for services 64,698,570 - 64,753,320
-PAGE-
maxxZone.com, Inc.
(a Development Stage Company)
Notes
Note 1 - Basis of presentation
The 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 interim financial statements
be read in conjunction with the financial statements of the
Company for the period ended December 31, 2002 and notes thereto
included in the Company's Form 10-KSB. 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 - Going concern
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As shown in the
accompanying financial statements, the Company has incurred a net
loss of $3,027,334 for the period from June 7, 2000 (inception)
to March 31, 2003, and has no sales. The future of the Company
is dependent upon its ability to obtain financing and upon future
profitable operations from the development of its new business
opportunities. Management has plans to seek additional capital
through debt and/or equity financing. The financial statements
do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts of and
classification of liabilities that might be necessary in the
event the Company cannot continue in existence.
These conditions raise substantial doubt about the Company's
ability to continue as a going concern. These financial
statements do not include any adjustments that might arise from
this uncertainty.
Note 3 - Prepaid expenses - related party
On January 1, 2003, the Company entered into a lease agreement
with Maxxplay Enterprises, Inc. (Maxxplay) for a period of twelve
months at a rate of $2,000 per month. During the three months
ended March 31, 2003, the Company had rent expense of $6,000. As
of March 31, 2003, the balance in prepaid expense is $6,740.
On December 18, 2002, the Company entered into a service
agreement with Maxxplay Enterprises, Inc. (Maxxplay) for a period
of twelve months beginning on January 1, 2003 at a rate of $3,000
per month. During the three months ended March 31, 2003, the
Company had rent expense of $9,000. As of March 31, 2003, the
balance in prepaid expense is $5,700.
Note 4 - Fixed assets
During the three-month period ended March 31, 2003, the Company
had $2,561 in equipment and had depreciation expense of $133.
Note 5 - Web site development
During the three-month period ended March 31, 2003, the Company
had $175,147 in website development costs and had amortization
expense of $14,595.
-PAGE-
maxxZone.com, Inc.
(a Development Stage Company)
Notes
Note 6 - Notes payable - related party
The Company issued notes payable in exchange for cash in the
amounts of $12,000 and $6,900. The Company has obligations under
these debt instruments payable to Maxxplay Enterprises, Inc.
(Maxxplay) that provides for aggregate payments of $18,900, of
which $1,900 is unpaid as of March 31, 2003. It is expected that
these notes payable will be paid within one year, and therefore
no provision for interest has been made in the contract.
The Company issued notes payable in exchange for cash in the
amounts of $12,778. The Company has obligations under these debt
instruments payable to Roland Becker, the president of the
Company, which provides for payments of $12,778, of which $12,788
is unpaid as of March 31, 2003. It is expected that these notes
payable will be paid within one year, and therefore no provision
for interest has been made in the contract.
Note 7 - Convertible debt
During the year ended December 31, 2002, the Company entered into
convertible promissory notes with a few entities and individuals
for a total of $55,730. The notes bear interest at a rate of 10%
per annum and are due in three years with a balloon payment of
principal and interest. During the three month period ended
March 31, 2003, the individuals converted $35,000 of the debt
into 700,000 shares of the Company's $0.001 par value common
stock. The remaining balance of convertible debt is $20,730 as
of March 31, 2003 and has accrued interest of $2,534.
Note 8 - Stockholder's equity
On March 12, 2003, the Company effectuated a 2-for1 forward stock
split for all shareholders as of that date. All share and per
share amounts have been retroactively restated to reflect the 2-
for-1 forward stock split.
The Company is authorized to issue 25,000,000 shares of its
$0.001 par value common stock and 5,000,000 shares of its $0.001
par value preferred stock.
On January 1, 2003, the Company issued a total of 250,000 shares
of its $0.001 par value common stock in exchange for services
totaling $1,000 and the conversion of debt in the amount of
$10,000.
On January 15, 2003, the Company issued a total of 2,000,000
shares of its $0.001 par value common stock in exchange for
services totaling $70,000.
On January 21, 2003, the Company issued a total of 500,000 shares
of its $0.001 par value common stock in exchange for the
conversion of debt totaling $25,000.
On February 19, 2003, the Company issued a total of 5,200,000
shares of its $0.001 par value common stock in exchange for
services totaling $75,400.
On March 10, 2003, the Company issued a total of 578,570 shares
of its $0.001 par value common stock in exchange for services
totaling $14,175.
On March 12, 2003, the Company issued a total of 30,600,000
shares of its $0.001 par value common stock in exchange for the
acquisition of China maxxTel, Inc. valued at $1,224,000.
On March 12, 2003, the Company issued a total of 27,270,000
shares of its $0.001 par value common stock in exchange for the
acquisition of Maxxplay Enterprises, Inc. valued at $1,090,800.
On March 12, 2003, the Company issued a total of 2,000,000 shares
of its $0.001 par value common stock in exchange for services
valued at $200,000.
-PAGE-
maxxZone.com, Inc.
(a Development Stage Company)
Notes
Note 9 - Deferred compensation
On August 1, 2002, the Company executed consulting service
agreements with two individuals for a period of one year in
exchange for a total of issued 550,000 shares of its $0.001 par
value common stock. Due to the forward split of 2-for-1, the
number of shares has been retroactively restated to 1,100,000.
The payment schedule is as follows:
Common Stock Due
-------------- --------------
450,000 shares August 1, 2002
600,000 shares October 1, 2002
50,000 shares January 1, 2003
As of March 31, 2003, the Company issued a total of 1,050,000
shares and the total amount of the shares is valued at $54,750
and during the three months ended March 31, 2003 there was
$15,187 of consulting expense. The balance of $20,250 is
considered deferred compensation.
Note 10 - Related party transactions
On January 1, 2003, the Company entered into a lease agreement
with Maxxplay Enterprises, Inc. (Maxxplay) for a period of twelve
months at a rate of $2,000 per month. During the three months
ended March 31, 2003, the Company had rent expense of $6,000. As
of March 31, 2003, the balance in prepaid expense is $6,740.
On December 18, 2002, the Company entered into a service
agreement with Maxxplay Enterprises, Inc. (Maxxplay) for a period
of twelve months beginning on January 1, 2003 at a rate of $3,000
per month. During the three months ended March 31, 2003, the
Company had rent expense of $9,000. As of March 31, 2003, the
balance in prepaid expense is $5,700.
The Company issued notes payable in exchange for cash in the
amounts of $12,000 and $6,900. The Company has obligations under
these debt instruments payable to Maxxplay Enterprises, Inc.
(Maxxplay) that provides for aggregate payments of $18,900, of
which $1,900 is unpaid as of March 31, 2003. It is expected that
these notes payable will be paid within one year, and therefore
no provision for interest has been made in the contract.
The Company issued notes payable in exchange for cash in the
amounts of $12,778. The Company has obligations under these debt
instruments payable to Roland Becker, the president of the
Company, which provides for payments of $12,778, of which $12,788
is unpaid as of March 31, 2003. It is expected that these notes
payable will be paid within one year, and therefore no provision
for interest has been made in the contract.
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.
-PAGE-
Item 2. Management's Discussion and Analysis or Plan of Operation.
Forward-looking Statements
In addition to the historical information contained
herein, this Form 10-QSB contains forward-looking statements
within the meaning of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to risks and
uncertainties, including risks and uncertainties set forth
in this Form 10-QSB that may cause actual results to differ
materially. These forward-looking statements speak only as
of the date hereof. The Company disclaims any intent or
obligation to update these forward-looking statements.
(a) Plan of operation.
Sports Products
Maxxzone.com, Inc. is a development stage corporation formed
in June, 2000 in the State of Nevada. Since its inception,
the corporation's focus has been to (1) secure the rights
for; (2) develop manufacturing commitments; and (3) bring to
market a group of approximately 30 unique sports and
active personal lifestyle products that seek to promote
increased end user expertise in performing various
sporting activities and games, as well as promoting good
sportsmanship and healthy lifestyles. These products
were, prior to February 14, 2003, owned and controlled by
MaxxPlay Enterprises, Inc., a Nevada corporation. The
Company, by virtue of a previous agreement with MaxxPlay,
obtained licenses to develop the MaxxPlay products for sale;
use of an internet web site owned by MaxxPlay for the
Company's fledgling internet presence; and marketing and
development consulting regarding the products, again
provided by MaxxPlay. On February 14, 2003, the
Company acquired all right, title and interest to the
products and web site from MaxxPlay Enterprises, Inc.
in a stock exchange. Further, MaxxPlay's marketing
and development consultancy was assigned to the
Company again by virtue of the Company's acquisition
of all of the outstanding shares of MaxxPlay.
The Company's sporting goods products emphasize correct
sports biomechanics, self-teaching, and positive feedback.
The products are each designed to appeal to a broad range of
participants, including both beginners and more experienced
players. The planned products include:
MaxxStix, a baseball/softball bat designed for amateur use.
The bat is designed to be energy absorbing and is made with
a neoprene barrel and flex core. The bat lengths and
weights are age and height correlated.
MaxxTrax, a baseball curve ball, and a junior curve pitching
training ball. The product has asymmetrically raised seams
for feedback on the finger grip. The ball provides a novice
pitcher with extra air grab for optimum curve ball effect.
The MaxxTrax is made from energy absorbing material and its
sticky ball cover promotes catching confidence and skills
from novice players.
MaxxSlam softball, a regular size softball molded with
memory foam for slow flight and a low impact bounce. It is
designed for no glove play to promote use anywhere.
-PAGE-
The MaxxTee portable baseball-batting tee, a training tee
height adjustable for all ages.
MaxxBax, a regulation pitching distance baseball pitch back.
The MaxxBax provides variable ball return velocity with up
to 80% of pitch speed and a high rebound system. It has
angle adjustment for high-speed ground balls, drives or
outfield fly-ball return.
MaxxSlam field markers & bases: lightweight, flexible,
stackable sets of non-skid field markers and bases.
MaxxRax tennis rackets, designs and construction that offer
swing and spin feedback. The racket is available in sizes
from 20 inches to 24 inches.
MaxxSmash tennis balls: the balls are 130% and 112% the size
of regular tennis balls. They provide longer contact, slower
flight, and lower bounce.
MaxxNet tennis net: a complete super lightweight tennis net
system featuring a durable, all-weather, flexible plastic
tube construction.
The MaxxBax tennis rebounder, a high rebound system
featuring variable ball return velocity with up to 80% of
impact speed and angle adjustment for any return including
ground-strokes, volleys and over-heads.
MaxxStix golf clubs, featuring a novel shaft which provides
audio swing feedback. Each club length and weight is age
and height correlated. MaxxTrax golf balls have a
construction which provides real flight slice, fade, draw
and hook feedback to the user.
The MaxxKixx soccer ball, a ball that has a lining that
promotes a combination of performance and lightness. The
ball is 20% lighter than a standard size 4 soccer ball. It's
designed to have a low bounce for more control.
The MaxxNet soccer net, featuring a lightweight MaxxKixx
game net assembly system. This net system is of durable,
all- weather, high quality, flexible plastic tube
construction and flexible design.
The MaxxGoal soccer goal set, consisting of two lightweight
MaxxKixx goals. These goals are designed to be durable and
usable in all weather. They are made from high quality,
flexible plastic tube construction. Their flexible design
features a folding frame for fast assembly.
MaxxBax, a soccer ball rebounder based on the high rebound
system. It features variable ball return velocity with up
to 80% of impact speed and angle adjustment for any return.
MaxxHoop basketball goal, a lightweight goal post and rim
system featuring a durable, all-weather flexible plastic
tube construction. The goal post is height adjustable from
5' to 10'.
MaxxHoop basketball, a ball that has a lining system for a
combination of performance and lightness. It comes in a
junior size and has a sticky surface and a soft bounce for
more control.
MaxxSpike volleyball balls, featuring a lining system that
promotes longer contact and a softer bounce for more
control.
The MaxxNet volleyball net system, featuring an all-
weather, flexible plastic tube construction and a flexible
design.
MaxxPass, a junior size football. The MaxxPass football is
age group weight correlated, and made from all weather, non-
inflatable foam rubber. The design and material make this
ball easier to catch and throw. Its construction is aimed at
instilling greater catching confidence
and skills in novice players.
-PAGE-
MaxxGyro, a junior size football. It is also age group
weight correlated, durable, all weather and surface, and non-
inflated foamed rubber. This ball pulls into a tight spiral
even for beginners
with marginal ball spin.
MaxxDome, a set of lightweight, resilient, flexible,
stackable non-skid field and court markers for use in a
variety of sports.
MaxxMatch Net Posts and Nets, a new range of tennis net post
systems and nets which facilitate changing court dimensions
rapidly to compensate for differences in skill or mobility
level of competitors.
MaxxWall Ball Rebound Kits, a high tensile nylon rebound
nets and assembly kits for fence or wall mounted, tubular
framed ball rebound walls. This product is suitable as a
silent rebound training wall for all ball games.
The Company originally intended to primarily bring these
products to market during the Christmas buying season during
2002. The Company focused its attention on the development
of its internet web site as the primary venue for the
marketing and sale of its products. The plan was to target
both sales to the general public, and also target pro shops,
retailers, institutions and commercial entities through the
Company's on-line wholesale group called "MaxxClub." The
Company planned on also partnering with various sports
personalities to provide both on-line marketing efforts via
the Company's web site, as well as having the sports
personalities make personal appearances in support of the
Company's products. Coincidentally, the Company wanted to
affiliate itself with various sporting associations, clubs,
and the like, in order to further enhance promotion and sale
of the Company's products. The Company also wanted to
develop a club of on-line visitors/members and customers at
the web site, referred to as "ClubMaxx." The Company
believed that by offering end users an internet community
and forum, it could generate revenue from various other
services offered exclusively to members; from advertisers
wishing to take advantage of the Company's end user base;
and offering discounts on the sale of the Company's own
products.
The Company established criteria for pricing depended upon
who the vendor was; the extent of product sales and
exclusivity; and whether the prospective purchase was to be
made with large margins. The Company expected to provide
flexible discounts that would entice large wholesale vendors
and smaller retailers alike with attractive terms consistent
with the size of their orders.
Due to a lack of short and long term financing, the Company
was not able to secure the necessary manufacturing contracts
to produce the products. This also resulted in the Company
not completely implementing its web site with its e commerce
capabilities, and its other planned promotional and
marketing strategies devised in support of the business
plan. Presently, the Company has no funding commitments, but
is actively pursuing same. The ability of the Company to
acquire such financing is critical to forging the necessary
manufacturing, marketing and distribution facets of its
business plan in the immediate future. Due to lack of
funding, the Company has not secured any agreements to
produce its planned products, although it anticipates, with
funding, that it will be sourced in 2003 or early 2004
from manufacturers in Taiwan and Thailand with product
category experience and prior experience supplying major
US retail chains. The Company anticipates that it will
have contracts in place to produce its planned products to
market by late 2003 or early 2004, and believes that it can
finalize the e commerce aspects of its web site in order to
move forward with its sales and marketing plans with
adequate funding as discussed above. Until such time as
proper and adequate funding, both short and long term, is
acquired, the Company does not expect to increase its
staffing at all, or hire any employees. Further, research
and development activities are curtailed until such time as
it is economically feasible for the Company. The Company
neither plans, nor is in any discussions, with any third
parties for major capital expenditures to which the Company
would be a party.
-PAGE-
Telecommunications Venture
During the first quarter of 2003, the Company began
development of a new venture involving the acquisition and
sale of international telecommunications services (please
review Item 5, Other Information). On March 11, 2003, the
Company retained the services of Mr. Fred Rojas. Mr. Rojas
has former experience as Chief Executive Officer of
TelEntente, Inc., a joint venture between a private company
and Telmex, Mexico's largest telecommunications operator.
Mr. Rojas also served as Vice President for Fidelity
Investments International Telecommunications concerns from
1994 through 2001. Mr. Rojas also served as Vice President
of International Telecommunications in the International
Private Banking Group at Merril Lynch & Co., in which he
oversaw systems and network planning and deployment in 27
countries. Mr. Rojas has also held positions in marketing
and product management with AT&T and Southern Bell. Mr.
Rojas also has four years of experience in the Chinese
telecommunications sector.
The Company's primary interest in the telecommunications
venture is to use Mr. Rojas' expertise and affiliations in
international telecommunications sectors to determine the
efficacy of the Company partnering with other business
entities to license, acquire, purchase or otherwise obtain
international telecommunications services for sale and
distribution. The Company believes that the
telecommunications sector, especially the expanding market
in the Peoples Republic of China, presents opportunities
that it might exploit through the efforts of Mr. Rojas.
During the next twelve months, the Company, via Mr. Rojas,
will seek to discuss and analyze business plans and
strategies in international telecommunications ventures
possibly available to the Company. Further, assuming that
valid and attractive associations are developed for
potential acquisition by the Company, Mr. Rojas will
represent the Company in such acquisitions and negotiate on
its behalf. Once completed, Mr. Rojas will then manage and
market the Company's telecommunications business.
In order to satisfy its present cash requirements, and
remain a going concern, the Company will need to obtain both
short and long term financing. Obtaining such financing is
critical for the Company to be able to implement its
business plan relative to its sporting goods division, as
well as its telecommunications venture. Without such
financing, manufacturing, marketing and distribution of the
sporting goods will be prohibited, thereby curtailing
expected purchases and revenues. Research and development
will also be unavailable. The Company presently has no
employees, and until adequate financing is secured, it
cannot retain potentially key employees to execute its
business plan. Regarding the telecommunications venture, the
Company's prospective business is contingent and remains in
a preliminary development stage.
(b) Management's Discussion and Analysis of Financial
Condition and Results of Operations.
From the Company's inception to the date of this filing, it
has not generated any revenues. Expected revenues over the
course of the last two fiscal years were contingent upon the
Company manufacturing, marketing and selling its sporting
goods. Over the past two fiscal years, the inability of the
Company to raise adequate capital has caused both the
inability of the Company to fully implement its business
plan and coincidentally the lack of revenues. This lack of
revenue has also caused the Company to suffer short-term
cash deficiencies needed to adequately satisfy ongoing
administrative and organizational needs. Over the first
quarter of 2003, the Company lost a total of $ 2,739,418
as compared with a loss of $ 42,701 for the first quarter
of 2002.
-PAGE-
By attempting to diversify the business through the
telecommunications venture discussed above and in Item 5.
Other Information, the Company expects to generate both
short term and long term revenues that will help alleviate
present cash shortfalls, allowing the sporting goods venture
to successfully move forward in a separate spun out public
entity. The Company believes that should it close its
acquisition of China MaxTel, and secure relationships with
its primary shareholders, MaxxTel, Inc., a Nevada
corporation, and Beijing Jing Henda, Science and Trade
Group, a privately held Chinese telecommunications company,
the Company will be guaranteed licenses and agreements for
revenue streams from internet protocol telecommunications
services between China and the United States. The Company
believes this to be an expanding and untapped market that
could provide it with significant revenues and have a
material impact on the revenues and income from continuing
operations. However, the agreement to acquire China MaxTel
has not been closed, and there is no assurance that this
agreement will close and provide the Company with the
expected revenues and new direction. In the event that the
China MaxTel acquisition fails, the Company will continue to
face significant financial challenges that will absolutely
require the acquisition of significant short and long term
funding. Presently, no such short or long term funding
agreements exist or are in the offing, and the Company has
no prospects for internal liquidity to create such funding.
Item 3. Controls and Procedures.
(a) Evaluation of disclosure controls and procedures.
The Company maintains controls and procedures designed
to ensure that information required to be disclosed in the
reports that the Company files or submits under the
Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in
the rules and forms of the Securities and Exchange
Commission. Based upon the evaluation of those controls and
procedures performed within 90 days of the filing date of
this report, the chief executive officer and the chief
financial officer of the Company concluded that the
Company's disclosure controls and procedures were adequate.
(b) Changes in internal controls.
The Company made no significant changes in its internal
controls or in other factors that could significantly affect
these controls subsequent to the date of the evaluation of
those controls by the chief executive officer and chief
financial officer.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not a party to any legal proceedings.
Item 2. Changes in Securities.
No rights of the holders of any class of registered
securities have been materially modified, limited or
qualified by the issuance or modification of any other class
of securities.
The Company has not sold unregistered securities during this
reporting period.
Item 3. Defaults Upon Senior Securities
The Company has suffered no material default in the payment
of principal, interest, a sinking or purchase fund
installment, or any other material default within 30 days of
the filing of this statement, with respect to any
indebtedness exceeding 5 percent of the total assets of the
Company.
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Item 4. Submission of Matters to a Vote of Security Holders.
On March 10, 2003, a special meeting of the shareholders of
the Company was held pursuant to the Company's by-laws and
applicable Nevada Revised Statutes. The special meeting was
called to consider the following matters: (a) Whether or not
to approve an amendment to the Company's Articles of
Incorporation to increase the number of shares of authorized
common stock from 20,000,000 to 100,000,000 shares with a
par value of $0.001; and (2) Whether or not to authorize a
forward split of the Company's common stock in the ratio of
one new share for every present shares held by any
stockholder. Both preliminary and definitive proxy
statements were published to the shareholders, as well as
mailings to all shareholders of record containing the
results of the special shareholders meeting afterwards.
A majority of the shareholders approved each proposition,
with 100% of the votes cast in favor of each resolution,
with no absentions, and no broker non-votes.
Item 5. Other Information.
On May 12, 2003, Directors Ronald Walter Wise and Thomas
Mathai tendered their resignations.
On March 13, 2003, the Company entered into an agreement in
principle to acquire all outstanding shares of China
MaxxTel, Inc., a Nevada corporation. In exchange for
30,600,000 shares of the Company's restricted common stock,
the Company acquired 30,600,000 shares of restricted common
stock in China MaxxTel, Inc., representing all of the
outstanding shares in China MaxxTel, Inc.
All of the outstanding shares held in China MaxxTel, Inc.
were owned and controlled by: MaxxTel, Inc., a Nevada
corporation, and Beijing Jing Henda, Science and Trade
Group, a privately held Chinese telecommunications company.
The agreement in principle required China MaxxTel, Inc., to
provide the Company with licenses and agreements that
guarantee the Company revenue streams from internet protocol
telecommunications services, between China and the United
States, of not less than 3,400,000 minutes per month.
As of the date of this filing, China MaxxTel, Inc. has not
satisfied all conditions precedent to closure. There is no
guarantee that the licenses or agreements guaranteeing
revenues will occur.
On May 12, 2003, the Company purchased MaxxTel, Inc., a
Nevada corporation, and entity that controlled 51% of the
outstanding shares of China MaxxTel, Inc., and 10% of the
issued and outstanding shares in Beijing Jing Henda, Science
and Trade Group. The Company has ascertained that Beijing
Jing Henda is a profitable Chinese telecommunications
company, with projected gross revenues of $14 million
dollars in fiscal 2003, based upon the present revenues and
business plans of Beijing Jing Henda.
The Company's plans related to the telecommunications
venture, is to first secure the satisfaction of all
conditions precedent to closing on the China MaxxTel, Inc.
agreement in principle. Once completed, the Company intends
to convene a special shareholders meeting, at which time the
board of directors will propose to change name of the
Company to MaxxTel Communications, Inc., and to focus its
principal business efforts on becoming a pure
telecommunications company. Consistent with the foregoing,
the Company intends to spin out its current sporting goods
business into a separate public entity.
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Item 6. Exhibits and Reports on Form 8-K.
On February 14, 2003, MaxxZone.com, Inc. acquired the assets
of Maxxplay Enterprises, Inc. The manner of acquisition was
a one for one exchange of stock. Holders of all issued and
outstanding shares of Maxxplay Enterprises, Inc. exchanged
their shares for restricted shares in MaxxZone.com, Inc.
consistent with Rule 144(a)(3) of the Securities and
Exchange Act of 1933. By virtue of the transaction,
MaxxZone.com, Inc. acquired assets including provisional
patent applications, trademarks, domain names and copyrights
for various sports equipment related to baseball, softball,
tennis, golf, soccer, volleyball and basketball. The
particular items include designs for the manufacture and
marketing of specialized rackets, bars, goals and hoops,
ball re-bounders and related swing and timing devices and
modified balls and nets. The Company agreed to issue to the
holders of Maxxplay Enterprises, Inc. a total of 13,845,000
shares of restricted common stock in exchange for delivery
of 13,845,000 issued and outstanding common shares of
Maxxplay Enterprises, Inc. as well as the assets listed
above. The consideration was calculated based upon the
prospective value of the acquired assets in the Company's
present business plan and model.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
MAXXZONE.COM, INC.
(Registrant)
Date May 20, 2003
/s/ Roland Becker
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Roland Becker, President, Chief Executive Officer
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CERTIFICATIONS*
I, Roland Becker, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of
MaxxZone.com, Inc.
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements
were made, not misleading with respect to the period covered
by this quarterly report;
3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly
report, fairly present in all material respects the
financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90
days prior to the filing date of this quarterly report (the
"Evaluation Date"); and
c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies
and material weaknesses.
Date: May 20, 2003
/s/ Roland Becker
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Roland Becker
President, Chief Executive Officer
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