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 September 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
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(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: 56,855,570
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 Sheet
(unaudited)
September 30,
2003
Assets --------------
Current assets:
Cash $ 11,798
Prepaid expenses 4,188
Prepaid expenses - related party 3,427
--------------
Total current assets 19,413
--------------
Fixed assets, net 1,704
Web site development, net 25,481
--------------
$ 46,598
==============
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable $ 6,671
Notes payable 15,000
Notes payable - related party 12,927
--------------
Total current liabilities 34,598
Long-term liabilities:
Convertible debt 20,730
Accrued interest 3,928
--------------
Total long-term liabilities 24,658
--------------
Total liabilities 59,256
--------------
Stockholders' (deficit):
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding -
Common stock, $0.001 par value, 100,000,000 shares
authorized, 56,855,570 shares issued and outstanding 56,856
Additional paid-in capital 1,949,983
Subscription payable 25,000
Deferred compensation (36,077)
(Deficit) accumulated during development stage (2,008,420)
--------------
(12,658)
--------------
$ 46,598
==============
The accompanying notes are an integral part of these financial statements
- 2 -
maxxZone.com, Inc.
(a Development Stage Company)
Statements of Operations
(unaudited)
June 7, 2000
Three Months Ending Nine Months Ending (Inception) to
September 30, September 30, September 30,
2003 2002 2003 2002 2003
------------- ------------- ------------- ------------ --------------
Revenue $ - $ - $ - $ - $ -
------------- ------------- ------------- ------------ --------------
Expenses:
General and administrative expemses 4,823 9,449 12,051 40,001 49,165
General and administrative expenses - related party 31,503 10,500 59,493 10,500 143,866
Professional fees 101,525 4,125 1,600,925 22,429 1,659,786
Depreciation and amortization 14,729 14,340 44,186 42,471 150,613
------------- ------------- ------------- ------------ --------------
Total expenses 152,580 38,414 1,716,655 115,401 2,003,430
------------- ------------- ------------- ------------ --------------
Other expense:
Interest (expense) (1,062) (238) (3,849) (238) (4,990)
------------- ------------- ------------- ------------ --------------
Total other expense (1,062) (238) (3,849) (238) (4,990)
------------- ------------- ------------- ------------ --------------
Net (loss) $ (153,642) $ (38,652) $ (1,720,504) $ (115,639) $ (2,008,420)
============= ============= ============= ============ ==============
Weighted average number of
common shares outstanding - basic and fully diluted 55,423,505 11,907,000 50,555,879 11,907,000
============= ============= ============= ============
Net (loss) per share - basic and fully diluted $ (0.00) $ (0.00) $ (0.03) $ (0.01)
============= ============= ============= ============
The accompanying notes are an integral part of these financial statements
- 3 -
maxxZone.com, Inc.
(a Development Stage Company)
Statements of Cash Flows
(unaudited)
June 7, 2000
Nine Months Ending (Inception) to
September 30, September 30,
2003 2002 2003
-------------- ------------- ---------------
Cash flows from operating activities
Net (loss) $ (1,720,504) $ (115,639) $ (2,008,420)
Shares issued for services 1,645,090 24,750 1,699,840
Depreciation and amortization 44,186 42,471 150,613
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
Decrease (increase) in prepaid expenses and interest 5,125 9,070 (6,615)
Increase in accounts payable 6,671 - 6,671
(Decrease) in accrued rent - related party - (6,070) -
Increase in accrued management fees - related party - 12,500 -
-------------- ------------- ---------------
Net cash (used) by operating activities (19,432) (32,918) (157,911)
-------------- ------------- ---------------
Cash flows from investing activities
Purchases of fixed assets - (796) (2,651)
Development of website - (9,415) (30,147)
-------------- ------------- ---------------
Net cash (used) by investing activities - (10,211) (32,798)
-------------- ------------- ---------------
Cash flows from financing activities
Proceeds from notes payable 15,000 - 15,000
Proceeds from note payable - related party 11,027 (8,500) 12,927
Convertible debt (35,000) 16,250 20,730
Accrued interest 2,787 238 3,928
Subscription payable 25,000 - 25,000
Issuance of common stock 2,250 - 160,999
Deferred compensation (640) (20,625) (36,077)
-------------- ------------- ---------------
Net cash provided (used) by financing activities 20,424 (12,637) 202,507
-------------- ------------- ---------------
Net increase (decrease) in cash 992 (55,766) 11,798
Cash - beginning 10,806 56,551 -
-------------- ------------- ---------------
Cash - ending $ 11,798 $ 785 $ 11,798
============== ============= ===============
Supplemental disclosures:
Interest paid $ - $ - $ -
============== ============= ===============
Income taxes paid $ - $ - $ -
============== ============= ===============
Non-cash transactions:
Shares issued for services $ 1,645,090 $ - $ 1,699,840
============== ============= ===============
Number of shares issued for services 40,748,570 - 40,803,320
============== ============= ===============
The accompanying notes are an integral part of these financial statements
- 4 -
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 $2,008,420 for the period from June 7, 2000 (inception)
to September 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 - History and organization
In March 2003, the Company amended its articles of incorporation
to increase its authorized capital from 25,000,000 to 100,000,000
shares of $0.001 par value common stock.
Note 4 - Fixed assets
During the nine-month period ended September 30, 2003, the
Company had $2,651 in equipment and had depreciation expense of
$399.
Note 5 - Web site development
During the nine-month period ended September 30, 2003, the
Company had $175,147 in website development costs and had
amortization expense of $43,787.
- 5 -
maxxZone.com, Inc.
(a Development Stage Company)
Notes
Note 6 - 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 nine month period ended September 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 September 30, 2003
and has accrued interest of $3,928.
Note 7 - Stockholders' equity
On March 12, 2003, the Company effectuated a 2-for-1 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 100,000,000 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 and subsequently cancelled
(See Note 10) 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. The number of shares issued and outstanding
has been retroactively restated to reflect the cancellation of the
30,600,000 shares.
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.
- 6 -
maxxZone.com, Inc.
(a Development Stage Company)
Notes
On August 15, 2003, the Company issued a total of 250,000 shares
of its $.001 par value common stock to two individuals in
exchange for interest payable on two notes. The Company recorded
the market value of the shares for $4,250 in prepaid interest.
During the period ended September 30, 2003, $1,062 was expensed.
On September 15, 2003, the Company issued 2,000,000 shares of its
$.001 par value common stock to five individuals for consulting
services valued at $58,000.
On September 15, 2003, the Company received $25,000 in cash for
the subscription of 2,500,000 shares of its par value common
stock. As of September 30, 2003, the Company recorded $25,000 in
subscription payable.
Note 8 - Deferred compensation
The Company executed multiple consulting service agreements with
various individuals. From inception to September 30, 2003, the
Company issued a total of 10,200,000 shares and the total amount
of the shares is valued at $369,050. The balance of $36,077 is
considered deferred compensation.
Note 9 - 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.
During the three month ended September 30, 2003, this agreement
was amended for more space to increase the rent $2,000 per month.
As of September 30, 2003, the balance of prepaid was $2,727 after
the Company paid $4,367 in this account.
The Company issued notes payable in exchange for cash in the
amounts of $26,836. The Company has obligations under these debt
instruments payable to Roland Becker, the president of the
Company, of which $11,858 is unpaid as of September 30, 2003. It
is expected that these notes payable will be paid within one
year, and therefore no provision for interest has been made.
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 September
30, 2003. It is expected that these notes payable will be paid
within one year, and therefore no provision for interest has been
made.
The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in
other business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.
Note 10 - Subsequent events
On November 4, 2003, the Company and China maxxTel agreed to rescind
the acquisition of China maxxTel, Inc. by the Company and cancelled
30,600,000 shares of the Company's $0.001 par value common stock.
- 7 -
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.
- 8 -
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.
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.
- 9 -
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.
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.
- 10 -
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
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.
- 11 -
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.
On July 10, 2003, Mr. Rojas resigned his consultancy
position with the Company for personal reasons. The Company
did not immediately attempt to replace Mr. Rojas but tried
to move the telecommunications venture forward on its own
using existing management. However, the Company soon
realized that vital and adequate communications between it
and the principals of China MaxxTel, including Beijing Jing
Henda were not forthcoming or cooperative.
On October 21, 2003, the Company decided to rescind the
MaxxTel acquisition, and to wind up its business plans
relating to the development and implementation of the
telecommunications division. The Company's decision was
based upon the failure of MaxxTel to provide the Company
with acceptable licenses and agreements that guaranteed 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.
- 12 -
On November 4, 2003, the Company announced cancellation of
30.6 million shares of restricted common stock that the
Company previously tendered as consideration for the
acquisition of MaxxTel, Inc. The Company coincidentally
returned stock paid as consideration by MaxxTel, Inc. and
the parties agreed to rescind and cancel the acquisition.
The Company has no plans to resurrect or otherwise reinstate
its telecommunications business plans at this time, and
chooses to concentrate on its core business operation
consisting of the sporting goods and related products.
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 business.
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.
(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, professional and organizational needs. The
Company has incurred a net loss of $3,232,670 for the period
from June 7, 2000 (inception) to September 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.
In order to mitigate the problems raised by the Company's
failure to raise short and long term funding and so generate
revenue, the Company issued equity to obtain short term
funding.
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 nine
month period ended September 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 September 30,
2003 and has accrued interest of $3,928.
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On August 15, 2003, the Company issued 250,000 shares of its
common stock to two persons in exchange for interest payable
on two notes.
On September 15, 2003, the Company received $25,000 in cash
for the subscription of 2,500,000 shares of its restricted
common stock
Additionally, the Company issued shares of stock during this
quarter to insure adequate present and continuing
professional consulting and services. From inception to
September 30, 2003, the Company has issued 10,200,000 shares
of its common stock valued at $369,050.
On September 15, 2003, the Company issued 2,000,000 shares
of its restricted common stock to five persons in exchange
for consulting services. This stock was valued at $58,000.
During the next twelve months, the Company's main goal is to
obtain adequate funding In order to implement its business
plan, including securing manufacturing, marketing and sales
venues for its sporting goods products. The Company is
presently not producing revenue, and is reliant upon short
term and long term financing in order facilitate its
business plans. The Company believes that once it obtains
appropriate financing, it can move forward with marketing
and sales of product during the next fiscal year. Until
then, there are no expected changes in staffing and
employment and no expected purchases or sales of plant or
significant equipment. The Company has no present material
commitments for capital expenditures.
Over the last two fiscal years, the Company has been
restricted from implementing its business plan due to lack
of adequate funding. This caused the coincidental inability
of the Company to move forward. There are a number of risk
factors associated with the Company's ongoing operations. As
noted, the Company is in need of short and long term
financing. Obtaining the financing necessary is uncertain.
Additionally, the market for sporting goods is highly
competitive. If and when the Company obtains financing and
implements its business plans, it may encounter significant
competition from other sporting goods manufacturers that
produce similar products. Additionally, certain sporting
past times are seasonal, and so aside from expected
competition, the Company, once it starts manufacturing and
selling its sporting goods products, may encounter some
seasonal variation in the sales of certain items.
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.
On September 15, 2003, the Company received $25,000 in cash
for the subscription of 2,500,000 shares of its restricted
common stock.
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.
On November 4, 2003, the Company announced cancellation of
30.6 million shares of restricted common stock that the
Company previously tendered as consideration for the
acquisition of China MaxxTel, Inc. This follows the
Company's decision on October 21, 2003 to rescind the China
MaxxTel acquisition, and wind up its business plans related
to developing a telecommunications division focused on the
Peoples Republic of China first announced on March 12,
2003.
The Company's decisions to rescind the China MaxxTel
acquistion and wind up its former business plans were based
upon the failure of China MaxxTel to provide the Company
with acceptable licenses and agreements that guaranteed 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.
China MaxxTel, Inc. could not reasonably assure the Company
of performance. The Company therefore rescinded the
acquisition and agreement in principle with China MaxxTel,
Inc., and returned the restricted stock acquired from China
MaxxTel, Inc. as consideration for the original acquisition
and agreement in principle.
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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: November 24, 2003
/s/ Roland Becker
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Roland Becker, President, Chief Executive Officer
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