-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QIPCkNUzyvl8KTZuuuGwCx5R1A95O0QhanMKKCRLP4NL3JXNHNSgoNUMTo/5M/Cz cwSz6GdiYNjwysJDhz6/AQ== 0000939802-01-500202.txt : 20020410 0000939802-01-500202.hdr.sgml : 20020410 ACCESSION NUMBER: 0000939802-01-500202 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: X-CHANGE CORP INC CENTRAL INDEX KEY: 0000054424 STANDARD INDUSTRIAL CLASSIFICATION: MACHINE TOOLS, METAL CUTTING TYPES [3541] IRS NUMBER: 431594165 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 002-41703 FILM NUMBER: 1782850 BUSINESS ADDRESS: STREET 1: 48 SW 16TH STREET CITY: DANIA BEACH STATE: FL ZIP: 33004 BUSINESS PHONE: 9723064604 MAIL ADDRESS: STREET 1: 48 SW 16TH STREET STREET 2: , CITY: DANIA BEACH STATE: FL ZIP: 33004 FORMER COMPANY: FORMER CONFORMED NAME: CASSCO CAPITAL CORP DATE OF NAME CHANGE: 19940804 FORMER COMPANY: FORMER CONFORMED NAME: DIVERSIFIED TECHNOLOGIES GROUP INC DATE OF NAME CHANGE: 20010330 FORMER COMPANY: FORMER CONFORMED NAME: GRANDEE CORP DATE OF NAME CHANGE: 19940627 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL K C JAKES BBQ & GRILL INC DATE OF NAME CHANGE: 19940627 10QSB 1 form10qsb093001.txt U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2001. [ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ------------ to ------------. Commission file number 002-41703 THE X-CHANGE CORPORATION (Exact name of small business issuer as specified in its charter) Nevada 43-1594165 - -------------------------------------------------------------------------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 48 S.W. 16TH Street, Dania Beach, FL 33004 (Address of principal executive offices) (954) 927-0034 Issuer's telephone number 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 practical date: October 29, 2001 22,540,000 ----------------------------- Transitional Small Business Disclosure Format (check one). Yes ; No X -- -- PART I Item 1. Financial Statements INDEPENDENT ACCOUNTANT'S REPORT The X-Change Corporation (A Development Stage Company) We have reviewed the accompanying balance sheet of The X-Change Corporation (A Development Stage Company) as of September 30, 2001 and December 31, 2000, and the related statements of operations for the three and nine month periods ended September 30, 2001 and 2000 and the statement of cash flows for the nine month periods ended September 30, 2001 and 2000. These financial statements are the responsibility of the Company's management. We conducted our review 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, the objective of which is the expression of an opinion regarding the financial statement taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles. Respectfully submitted \s\ Robison, Hill & Co. ---------------------------- Certified Public Accountants Salt Lake City, Utah November 1, 2001 THE X-CHANGE CORPORATION (A Development Stage Company) BALANCE SHEETS (Unaudited) September 30, December 31, 2001 2000 --------- --------- ASSETS Current Assets Cash ............................................. $ -- $ 417 --------- --------- Total Assets ................................ $ -- $ 417 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts Payable ................................ 913 5,779 Loans Payable - Shareholders .................... 18,833 9,900 --------- --------- Total Liabilities ........................... 19,746 15,679 --------- --------- Stockholders' Equity: Preferred Stock, Par value $.001 Authorized 10,000,000 shares Issued - None ................................... -- -- Common Stock, Par value $.001 Authorized 100,000,000 shares, Issued 22,540,000 shares at September 30,2001 and 22,540,000 shares at December 31, 2000 ....... 22,540 22,540 Paid-In Capital .................................... 543,243 543,243 Retained Deficit ................................... (536,688) (536,688) Deficit Accumulated During the Development Stage ................................ (48,841) (44,357) --------- --------- Total Stockholders' Equity ................... (19,746) (15,262) --------- --------- Total Liabilities and Stockholders' Equity ... $ -- $ 417 ========= ========= See accompanying notes and accountants' report THE X-CHANGE CORPORATION (A Development Stage Company) STATEMENT OF OPERATIONS (Unaudited)
Cumulative since October 4, For the Three Months For the Nine Months 2000 Ended Ended Inception of September 30, September 30, Development -------------------------- -------------------------- 2001 2000 2001 2000 Stage ----------- ----------- ----------- ----------- ----------- Revenues ........... $ -- $ -- $ -- $ -- $ -- ----------- ----------- ----------- ----------- ----------- Expenses General & Admin .. 1,884 -- 4,484 -- 48,841 ----------- ----------- ----------- ----------- ----------- Net Loss ... (1,884) -- (4,484) -- (48,841) ----------- ----------- ----------- ----------- ----------- Basic & Diluted Loss Per Share .......... $ -- $ -- $ -- $ -- =========== =========== =========== ===========
See accompanying notes and accountants' report THE X-CHANGE CORPORATION (A Development Stage Company) STATEMENT OF CASH FLOWS (Unaudited)
Cumulative since October 4, 2000 For the Nine Months Ended Inception of September 30, Development -------------------------- 2001 2000 Stage ----------- ----------- ----------- Cash Flows from Operating Activities: Net Loss .................................... $ (4,484) $ -- $ (48,841) Adjustments to reconcile net loss to net cash used in operating activities: Issuance of stock for expenses ............... -- -- -- Change in operating assets and liabilities: Accounts Payable .............................. (4,866) -- 30,008 Shareholder Loans ............................. 8,933 -- 18,833 ----------- ----------- ----------- Net cash used in operating activities ... (417) -- -- ----------- ----------- ----------- Cash Flows from Investing Activities: Net cash provided by investing activities -- -- -- ----------- ----------- ----------- Cash Flows from Financing Activities: Issuance of Common Stock ..................... -- -- -- ----------- ----------- ----------- Net cash provided by Financing Activities -- -- -- ----------- ----------- ----------- Net change in cash and cash equivalents ......... (417) -- -- Cash and cash equivalents at beginning of period .......................... 417 -- -- ----------- ----------- ----------- Cash and cash equivalents at end of period ...... $ -- $ -- $ -- =========== =========== ===========
THE X-CHANGE CORPORATION (A Development Stage Company) STATEMENT OF CASH FLOWS (Unaudited) Cumulative since October 4, 2000 For the Nine Months Ended Inception of September 30, Development ------------------------- 2001 2000 Stage ----------- ----------- ----------- SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the year for: Interest ............................. $ -- $ -- $ -- ----------- ----------- ----------- Franchise and income taxes ........... $ -- $ -- $ -- ----------- ----------- ----------- SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: None See accompanying notes and accountants' report THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES This summary of accounting policies for The X-Change Corporation (A Development Stage Company) is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. Interim Reporting The unaudited financial statements as of September 30, 2001 and for the three and nine month periods then ended reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of operations for the nine months. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years. Organization and Basis of Presentation The Company was incorporated under the laws of the State of Delaware on February 5, 1969, the Company reincorporated and changed its domicile to the State of Nevada on October 4, 2000. The Company on December 1, 1999, entered into an agreement (Reorganization Agreement) to acquire all of the outstanding capital stock of S&J (Chatteris) Holdings Limited, a United Kingdom corporation (S&J Holdings). Pursuant to the Reorganization Agreement, the Company agreed to acquire all of the outstanding capital stock of S&J in exchange for shares of Common Stock. The Reorganization Agreement required S&J Holdings to perform certain conditions, including the delivery of audited financial statements. These conditions had not been fulfilled by February 14, 2000; therefore, the agreement was rescinded and deemed to have been void and of no effect from the beginning as if the acquisition had not occurred. All shares issued in the acquisition were returned to treasury. The Company also attempted two acquisitions in 2000, neither of which were able to deliver the required financial statements. The first was rescinded and the second was not consummated. On June 28, 2001, the Company entered into a reorganization agreement to acquire all of the outstanding capital stock of The X-Change Corporation. Effective July 1, 2001, Diversified Technologies Group, Inc. changed its name to The X-Change Corporation. This agreement was also rescinded for failure to provide adequate compliance with the representations, warranties and covenants of the agreement. Since October 4, 2000, the Company is in the development stage, and has not commenced planned principal operations. THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Nature of Business The Company has no products or services as of September 30, 2001. The Company is now engaged in the process of locating a potential merger and/or acquisition candidate. The Company intends to acquire interests in various business opportunities, which in the opinion of management will provide a profit to the Company. Cash and Cash Equivalents For the purpose of reporting cash flows, the Company considers all highly liquid debt instruments purchased with maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Concentrations of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Stock Compensation for Non-Employees The Company accounts for the fair value of its stock compensation grants for non-employees in accordance with FASB Statement 123. The fair value of each grant is equal to the market price of the Company's stock on the date of grant if an active market exists or at a value determined in an arms length negotiation between the Company and the non-employee. THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Loss per Share The reconciliations of the numerators and denominators of the basic income (loss) per share computations are as follows:
Per-Share Income Shares Amount (Numerator) (Denominator) For the Three Months Ended September 30, 2001 Basic Income per Share Income to common shareholders $ (1,884) 22,540,000 $ - =============== =============== ============== For the Three Months Ended September 30, 2000 Basic Loss per Share Loss to common shareholders $ - 240,000 $ - =============== =============== ============== For the Nine Months Ended September 30, 2001 Basic Income per Share Income to common shareholders $ (4,484) 22,540,000 $ - =============== =============== ============== For the Nine Months Ended September 30, 2000 Basic Loss per Share Loss to common shareholders $ - 240,000 $ - =============== =============== ==============
The effect of outstanding common stock equivalents are anti-dilutive for September 30, 2001 and 2000 and are thus not considered. NOTE 2 - INCOME TAXES As of September 30, 2001, the Company had a net operating loss carryforward for income tax reporting purposes of approximately $586,000 that may be offset against future taxable income through 2021. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carryforwards will expire unused. Accordingly, the potential tax benefits of the loss carryforwards are offset by a valuation allowance of the same amount. THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) NOTE 3 - DEVELOPMENT STAGE COMPANY/ GOING CONCERN The Company has not begun principal operations and as is common with a development stage company, the Company has had recurring losses during its development stage. Continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to be successful in its planned activity, and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing, which will enable the Company to operate for the coming year. NOTE 4 - COMMITMENTS As of September 30, 2001 all activities of the Company have been conducted by corporate officers from either their homes or business offices. Currently, there are no outstanding debts owed by the company for the use of these facilities and there are no commitments for future use of the facilities. NOTE 5 - STOCK SPLIT On June 6, 2000 the Board of Directors authorized 50 to 1 reverse stock split, changed the authorized number of shares to 110,000,000 shares and the par value to $.001 for the Company's stock with 100,000,000 of such shares to be denominated common shares and 10,000,000 of such number to be denominated preferred shares. As a result of the split, 2,940,000 shares were canceled. On October 17, 2000 the Board of Directors authorized a 4 to 1 forward stock split. As a result of the split, 180,000 shares were issued. All references in the accompanying financial statements to the number of common shares and per-share amounts for 2000 have been restated to reflect the stock split. NOTE 6 - STOCK OPTION PLANS 1999 Stock option plan: During the final quarter of 1999, the Company's Board of Directors adopted a stock option plan in which employees of the Company and its subsidiaries were eligible to participate. The plan was administered by the Board. The plan set aside 60,000 post-split shares of common stock to cover options granted under the plan. The plan had a ten year term. The company filed a registration statement under the securities act to cover the shares which were issued under the plan. At the 1999 year end, options to acquire 41,400 shares had been granted, all of which had also been exercised. During 2000,options on the remaining 18,600 shares available under the plan had been granted and exercised as of the date of this report. THE X-CHANGE CORPORATION (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 (Unaudited) NOTE 6 - STOCK OPTION PLANS (Continued) 2000 Stock option plan: During the third quarter of 2000, the Company's Board of Directors adopted a stock option plan in which employees of the Company and its subsidiaries were eligible to participate. The plan was administered by the Board. The plan set aside 8,000,000 shares of common stock to cover options granted over the term of the plan. The plan had a ten year term. The company filed a registration statement under the act to cover the shares which were issued under the plan. At the 2000 year end, options to acquire 8,000,000 shares had been granted, all of which had also been exercised. NOTE 7 - COMMON STOCK TRANSACTIONS From July to September 2000, the Company issued 8,000,000 (post split) restricted common shares to various consultants for services at the market value on the date of issuance and 14,300,000 (post split) restricted common shares to individuals for cash at $.005245 per share. NOTE 8 - SUBSEQUENT EVENTS On June 28, 2001, the Company entered into a reorganization agreement to acquire all of the outstanding capital stock of The X-Change Corporation. This agreement had an effective date of July 1, 2001. On that date the company changed its name to The X-Change Corporation. This agreement was rescinded on October 4, 2001, subsequent to the period covered by this report, for failure to provide adequate compliance with the representations, warranties and covenants of the agreement. All shares issued in the transaction were surrendered to treasury. Item 2. Management's Discussion and Analysis or Plan of Operation General This discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's annual report on Form 10-KSB for the year ended December 31, 2000. Results of Operations For the quarter and nine months ended September 30, 2001, the results of operations as compared to the same period in 2000 were roughly comparable, but may not necessarily be indicative of the results for the year which will end December 31, 2001. The X-Change Corporation, f/k/a Diversified Technologies Group, Inc. (Company), was incorporated as Anthony Kane Incorporated under the laws of the State of Delaware on February 5, 1969, and became subject to the reporting provisions of the Securities Exchange Act of 1934 on June 11, 1969, when a registration statement filed by the Company was declared effective by the U.S. Securities and Exchange Commission. The Company, prior to 2001, had engaged in a variety of acquisitions and businesses in the past, none of which proved successful. On June 28, 2001, the Company entered into an agreement (Reorganization Agreement) to acquire all of the outstanding capital stock of X-Change Corporation, Inc., a privately-held Nevada corporation (XCI), effective July 1, 2001. Pursuant to the Reorganization Agreement, the Company agreed to acquire all of the outstanding capital stock of XCI in exchange for 28,000,000 post split shares of common stock. XCI represented itself to be in the process of developing an alternative trading system for the orderly transactional flow of stock trades primarily for shares normally excluded from mainstream trading venues. The Company determined that XCI violated the terms and conditions of the Reorganization Agreement and the acquisition was rescinded on October 4, 2001, as though it had never occurred. As a result of the recision, the change of accountants, as previously reported, was also reversed and the Company continues to maintain Robison, Hill as its auditors and accountants. Capital Resources and Liquidity The Company, from inception has relied on capital infusions from executive officers and directors and on credit from vendors. PART II - OTHER INFORMATION Item 1. Litigation No material legal proceedings to which the Company (or any officer or director of the Company, or any affiliate or owner of record or beneficially of more than five percent of the Common Stock, to management's knowledge) is a party or to which the property of the Company is subject is pending and no such material proceeding is known by management of the Company to be contemplated. Item 2. Changes in Securities This item is not applicable to the Company for the period covered by this report. Item 3. Defaults Upon Senior Securities This item is not applicable to the Company for the period covered by this report. Item 4. Submission of Matters to a Vote of Security Holders. There were no meetings of security holders during the period covered by this report; thus, this item is not applicable. Item 5. Other Information The Company, subsequent to the period covered by this report, entered into a letter of intent with WEBiX, Inc., a privately-held Florida corporation which is in the development stage. WEBiX intends to establish a national securities exchange comprised of the securities of companies that are publicly traded but which are not listed on a stock exchange and which do not trade on the NASDAQ system. These securities are primarily maintained on the OTC Bulletin Board. The objective of WEBiX is to provide a fully automated electronic marketplace for trading in these securities which will feature real time quote information and electronic trading over the internet. WEBiX has, for the most part, developed the software and WEB application for the implementation of the system and is seeking additional funds for the implementation of its business plan. The Company, therefore, has agreed as a precondition to closing to provide $300,000 in cash and commitments and WEBiX will, prior and as a precondition to closing, sell from between $400,000 to $1,000,000 additional shares of its preferred stock on a private basis. Closing is presently anticipated for early December. The Company, if the acquisition is closed, would issue to WEBiX shareholders securities of the Company as follows: (1) 24,000,000 shares of common stock on a pro rata basis to the current shareholders of WEBiX common stock; (2) 2,400,000 shares of preferred stock on a pro rata basis to the current shareholders of WEBiX preferred stock, which will be convertible into 10 shares of XCHC common stock; (3) A minimum of 640,000 up to 1,066,666 of XCHC Preferred Shares (convertible to 6,400,000 to 10,666,666 common shares) to shareholders who purchase a minimum of $400,000 up to a maximum of $1,000,000 of WEBiX preferred stock in a Regulation D private placement to be conducted by WEBiX between the date of the letter of intent and closing; and (4) 24,000,000 warrants on a pro rata basis to the current WEBiX preferred shareholders (plus an equal number of Warrants as shall equal the number of XCHC Preferred Shares as shall be issued under paragraph 3 above) which will each allow the holder to acquire one share of XCHC common stock in exchange for $1.00. Other than the shares specifically described in paragraphs (1) through (4) above, the total outstanding number of shares of common stock of the Company on the date of closing under the Agreement will then be 16,000,000, which will require existing restricted shareholders to surrender 6,540,000 shares of restricted, common stock to treasury. Item 6. Exhibits and Reports on Form 8-K The Company filed a report on Form 8-K and a report on Form 8-K/A amending the previous report during the period under discussion; however, the acquisition reported in these filings was rescinded by the Company, a reported above, which placed the Company in the position which it had immediately prior to the acquisition. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 13th day of November, 2001. THE X-CHANGE CORPORATION (Registrant) DATE: November 13, 2001 By: /s/ Steven Garrett ---------------------- ------------------------------------ Steven Garrett Chief Executive Officer, Chief Financial Officer and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----