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 June 30, 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: 87,455,570
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [X]
-1-
PART 1-FINANCIAL INFORMATION
Item 1. Financial Statements.
MaxxZone.com, Inc.
(A Development Stage Company)
Balance Sheets
as of
June 30, 2003
and
Statements of Operations
for the Three Months and Six Months Ending
June 30, 2003 and 2002,
and For the Period
June 7, 2000 (Inception) to June 30, 2003
and
Cash Flows
for the Three Months and Six Months Ending
June 30, 2003 and 2002,
and For the Period
June 7, 2000 (Inception) to June 30, 2003
-2-
TABLE OF CONTENTS
Page
Independent Accountant's Review Report 1
Balance Sheets 2
Statements of Operations 3
Statements of Cash Flows 4
Footnotes 5
-3-
Beckstead and Watts, LLP
- ----------------------------
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 fax
INDEPENDENT ACCOUNTANTS REVIEW REPORT
September 9, 2003
Board of Directors
MaxxZone.com, Inc.
(a Development Stage Company)
Las Vegas, NV
We have reviewed the accompanying balance sheet of MaxxZone.com,
Inc. (a development stage company) as of June 30, 2003 and the
related statements of operations for the three-months and six-
months ended June 30, 2003 and 2002 and for the period June 7,
2000 (Inception) to June 30, 2003, and statements of cash flows
for the three-months and six-months ended June 30, 2003 and 2002
and for the period June 7, 2000 (Inception) to June 30, 2003.
These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, which will be performed for the full year with the
objective of expressing an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on my reviews, we are not aware of any material
modifications that should be made to the accompanying financial
statements referred to above for them to be in conformity with
generally accepted accounting principles in the United States of
America.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in
Note 2 to the financial statements, the Company has had limited
operations and has not commenced planned principal operations.
This raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are
also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
/s/ Beckstead and Watts, LLP
- ----------------------------
-4- F1
maxxZone.com, Inc.
(a Development Stage Company)
Balance Sheet
(unaudited)
June 30,
2003
-------------
Assets
Current assets:
Cash $ 1,413
Prepaid expenses 1,000
Prepaid expenses - related party 5,060
-------------
Total current assets 7,473
-------------
Fixed assets, net 1,837
Web site development, net 40,077
-------------
$ 49,387
=============
Liabilities and Stockholders' equity
Current liabilities:
Accounts payable $ 6,671
Notes payable 5,000
Notes payable - related party 16,707
-------------
Total current liabilities 28,378
Long-term liabilities:
Convertible debt 20,730
Accrued interest 3,928
-------------
Total long-term liabilities 24,658
Total liabilities 53,036
-------------
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, 85,205,570 shares issued and outstanding 85,205
Additional paid-in capital 3,111,633
Deferred compensation (121,709)
(Deficit) accumulated during development stage (3,078,778)
-------------
(3,649)
-------------
$ 49,387
Please see the notes to these unaudtied financials
-5- F2
maxxZone.com, Inc.
(a Development Stage Company)
Statements of Operations
(unaudited)
June 7, 2000
Three Months Ending Six Months Ending (Inception) to
June 30, June 30, June 30,
2003 2002 2003 2002 2003
------------- ------------ ------------- ------------- --------------
Revenue $ - $ - $ - $ - $ -
------------- ------------ ------------- ------------- --------------
Expenses:
General and administrative expenses 758 7,334 7,228 30,552 44,342
General and administrative expenses - related party 12,000 - 27,990 - 112,363
Professional fees 22,563 - 2,723,400 18,304 2,782,261
Depreciation and amortization 14,729 - 29,457 28,131 135,884
------------- ------------ ------------- ------------- --------------
Total expenses 50,050 7,334 2,788,075 76,987 3,074,850
------------- ------------ ------------- ------------- --------------
Other expense:
Interest (expense) (1,394) - (2,787) - (3,928)
------------- ------------ ------------- ------------- --------------
Total other expense (1,394) - (2,787) - (3,928)
------------- ------------ ------------- ------------- --------------
Net (loss) $ (51,444) $ (7,334) $ (2,790,862) $ (76,987) $ (3,078,778)
============= ============ ============= ============= ==============
Weighted average number of
common shares outstanding - basic and fully diluted 82,761,065 11,907,000 68,707,141 11,907,000
============= ============ ============= =============
Net (loss) per share - basic and fully diluted $ (0.00) $ (0.00) $ (0.04) $ (0.01)
============= ============ ============= =============
Please see the notes to these unaudtied financials
-6- F3
maxxZone.com, Inc.
(a Development Stage Company)
Statements of Cash Flows
(unaudited)
June 7, 2000
Six Months Ending (Inception) to
June 30, June 30,
2003 2002 2003
------------- ------------- ----------------
Cash flows from operating activities
Net (loss) $ (2,790,862) $ (76,987) $ (3,078,778)
Shares issued for services 2,834,089 - 2,888,839
Depreciation and amortization 29,457 28,131 135,884
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
Decrease (increase) in prepaid expenses and interest 8,680 10,070 (3,060)
Increase in accounts payable 6,671 - 6,671
(Decrease) in accrued rent - related party - (6,070) -
(Decrease) in accrued management fees - related party - 10,000 -
------------- ------------- ----------------
Net cash (used) by operating activities 88,035 (34,856) (50,444)
------------- ------------- ----------------
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 - - -
Note payable - related party 19,807 (3,000) 21,707
Convertible debt (35,000) - 20,730
Accrued interest 2,787 - 3,928
Issuance of common stock 2,250 - 160,999
Donated capital - - -
Deferred compensation (86,272) - (121,709)
------------- ------------- ----------------
Net cash provided by financing activities (96,428) (3,000) 85,655
------------- ------------- ----------------
Net (decrease) in cash (8,393) (43,669) 2,413
Cash - beginning 10,806 56,551 -
------------- ------------- ----------------
Cash - ending $ 2,413 $ 12,882 $ 2,413
============= ============= ================
Supplemental disclosures:
Interest paid $ - $ - $ -
============= ============= ================
Income taxes paid $ - $ - $ -
============= ============= ================
Non-cash transactions:
Shares issued for services $ 2,834,089 $ - $ 2,888,839
============= ============= ================
Number of shares issued for services 69,348,570 - 69,403,320
============= ============= ================
Please see the notes to these unaudtied financials
-7- F4
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 $3,078,778 for the period from June 7, 2000 (inception)
to June 30, 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 $1,000 per month. During the six months
ended June 30, 2003, the Company had rent expense of $6,000. As
of June 30, 2003, the balance in prepaid expense is $4,360.
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 $2,500
per month. During the six months ended June 30, 2003, the
Company had total expense of $15,000. As of June 30, 2003, the
balance in prepaid expense is $700.
Note 4 - Fixed assets
During the six-month period ended June 30, 2003, the Company had
$2,651 in equipment and had depreciation expense of $813.
-8- F5
maxxZone.com, Inc.
(a Development Stage Company)
Notes
Note 5 - Web site development
During the six-month period ended June 30, 2003, the Company had
$175,147 in website development costs and had amortization
expense of $29,191.
Note 6 - Notes payable - related party
The Company issued notes payable in exchange for cash. The
Company has obligations under these debt instruments payable to
Maxxplay Enterprises, Inc. (Maxxplay) that provides for aggregate
payments of $20,300, of which $3,300 is unpaid as of June 30,
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 $19,138, of which $13,407
is unpaid as of June 30, 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 six month period ended June
30, 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 June
30, 2003 and has accrued interest of $3,928.
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.
-9- F6
maxxZone.com, Inc.
(a Development Stage Company)
Notes
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.
On May 14, 2003, the Company issued a total of 150,000 shares of
its $0.001 par value common stock to two individuals in exchange
for cash valued at $2,150.
On May 15, 2003, the Company issued a total of 250,000 shares of
its $0.001 par value common stock to three individuals in
exchange for services valued at $5,625.
On June 11, 2003, the Company issued a total of 200,000 shares of
its $0.001 par value common stock to three individuals in
exchange for services valued at $6,800.
On June 13, 2003, the Company issued a total of 3,250,000 shares
of its $0.001 par value common stock to four individuals in
exchange for services valued at $110,500.
Note 9 - Deferred compensation
The Company executed multiple consulting service agreements with
various individuals. From inception to June 30, 2003, the
Company issued a total of 3,975,000 shares and the total amount
of the shares is valued at $172,050. During the six months ended
June 30, 2003 there was $15,841 of consulting expense. The
balance of $121,709 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 $1,000 per month. During the six months
ended June 30, 2003, the Company had rent expense of $6,000. As
of June 30, 2003, the balance in prepaid expense is $4,360.
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 $2,500
per month. During the six months ended June 30, 2003, the
Company had total expense of $15,000. As of June 30, 2003, the
balance in prepaid expense is $700.
The Company issued notes payable in exchange for cash. The
Company has obligations under these debt instruments payable to
Maxxplay Enterprises, Inc. (Maxxplay) that provides for aggregate
payments of $20,300, of which $3,300 is unpaid as of June 30,
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.
-10- F7
maxxZone.com, Inc.
(a Development Stage Company)
Notes
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 $19,138, of which $16,707
is unpaid as of June 30, 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.
-11- F8
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, 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, internet domain names,
content, and copyrights for various sports equipment related
to baseball, softball, tennis, golf, soccer, volleyball and
basketball (more completely discussed below).
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.
-12-
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.
-13-
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.
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 continuing 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 yet 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.
-14-
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. On March
11, 2003, the Company retained the services of Mr. Fred
Rojas as its primary consultant to help develop this
business. The Company wanted 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. One of the Company's primary interests was
developing international telecommunications business between
the Peoples Republic of China and the United States.
On March 13, 2003, to further its goals in this venture, the
Company entered into an agreement in principle to acquire
all outstanding shares of China MaxxTel, Inc., a Nevada
corporation, for an exchange of restricted stock.
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.; a business plan
for international expansion; a related contact network; all
related trade and service marks; and an entitlement to 10%
of net revenue of Beijing Jing Henda, Science and Trade
Group, a privately owned Beijing telecommunications company.
The Company ascertained that Beijing Jing Henda was 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 agreement in principle required China MaxxTel, Inc., as
a condition precedent, 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. Negotiations
are ongoing. Additionally, the preliminary business plans,
as prepared for the Company by Mr. Rojas, did not validate
the expected revenue levels to the Company when Mr. Rojas
was retained and when the Company subsequently acquired
China MaxxTel, Inc.
On July 10, 2003, Mr. Rojas resigned his consultancy
position with the Company for personal reasons. As of the
date of this filing, the Company has not recruited a
replacement for Mr. Rojas and has no present plans to
replace him. The Company, while committed to fully exploring
the international telecommunications opportunities it
acquired in its agreement in principle with China MaxxTel,
Inc. is presently re-evaluating its position and options in
this area.
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 furthering development and securing 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.
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(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. The Company has
incurred a net loss of $3,078,778 for the period from June
7, 2000 (inception) to June 30, 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.
The Company cannot rely upon the uncertain closure of the
agreement in principle to acquire China MaxxTel, Inc. in
order to provide it with both short term and long term
revenues that will help alleviate present cash shortfalls,
allowing the sporting goods venture to successfully move
forward.
To deal with present cash shortages, the Company has issued
notes payable in exchange for cash. The Company has
obligations under these debt instruments payable to Maxxplay
Enterprises, Inc. (Maxxplay) that provides for aggregate
payments of $20,300, of which $3,300 is unpaid as of June
30, 2003.
The Company also 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
$19,138, of which $13,407 is unpaid as of June 30, 2003.
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 six
month period ended June 30, 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 June 30, 2003 and has
accrued interest of $3,928.
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.
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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.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters have been submiited to a vote of the shareholders
during this quarter.
Item 5. Other Information.
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K.
No Current Reports on Form 8-K were filed during this
quarter.
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 September 10, 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: September 10, 2003
/s/ Roland Becker
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Roland Becker
President, Chief Executive Officer
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