<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2000
Commission file number 000-25499
Flexxtech Corporation
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(Exact name of small business issuer as specified in its charter)
Nevada 88-0390360
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State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization
5777 W. Century Boulevard,
suite 767, Los Angeles, CA 84790
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(Address of principal executive offices) (Zip Code)
(310) 342-0794
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports) Yes [_] No [X], and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] 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:
As of September 30, 2000, the issuer had outstanding 6,201,611 shares of
its Common Stock, $0.001 par value.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
FLEXXTECH CORPORATION
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(Unaudited)
FLEXXTECH CORPORATION
FORMERLY INFINITE TECHNOLOGY CORPORATION AND
COLOR STRATEGIES
BALANCE SHEET
SEPTEMBER 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Current Asset:
Cash and cash equivalent $ 224,054
Accounts receivable 2,147,634
Inventory 908,974
Investments in stocks available for sale 1,772,000
Deposits & other current assets 17,580
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Total Current Asset 5,070,242
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Property & equipment 1,589,064
Goodwill on acquisition 1,585,165
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TOTAL ASSETS $ 8,244,471
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LIABILITIES STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,159,811
Accrued expenses 74,680
Customers' Deposit 3,437
Loans payable - Current 2,912,530
Deferred Income tax 10,559
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Total Current Liabilities 4,161,017
Long-term Liabilities:
Long-term Loans 323,477
STOCKHOLDERS' EQUITY
Common stock, authorized 100,000,000 shares at $.001 par
value, issued and outstanding 6,201,611 shares 7,760
Additional Paid in Capital 4,135,435
Accumulated deficit (529,718)
Accumulated other comprehensive income:
Unrealized gain on securities available for sale 146,500
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Total Stockholders' Equity 3,759,977
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,244,471
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</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
FLEXXTECH CORPORATION
FORMERLY INFINITE TECHNOLOGY CORPORATION AND
COLOR STRATEGIES
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000 & 1999
(UNAUDITED)
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<CAPTION>
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Sales $ 3,483,421 $ 1,757 $ 3,591,917 $ 1,757
Cost of sales 2,746,969 2,818,417 -
------------ ---------- ------------ ----------
Gross profit 736,452 1,757 773,500 1,757
General and Administrative expenses (1,074,139) 5,733 (1,180,188) 8,341
------------ ---------- ------------ ----------
Loss from operations (337,687) (3,976) (406,688) (6,584)
Other income (expenses) (95,032) - (95,032) -
------------ ---------- ------------ ----------
Net loss before income tax (432,719) (3,976) (501,720) (6,584)
Provision of Income tax 0 - 800 -
------------ ---------- ------------ ----------
Net Loss $ (432,719) $ (3,976) $ (502,520) $ (6,584)
============ ========== ============ ==========
Other comprehensive loss:
Unrealized gain on investments available for sale 300,500 - 146,500 -
------------ ---------- ------------ ----------
Comprehensive Income (Loss) (132,219) (3,976) (356,020) (6,584)
============ ========== ============ ==========
Basic and diluted loss per share $ (0.085) $ (0.001) $ (0.156) $ (0.002)
============ ========== ============ ==========
Basic and diluted weighted average shares outstanding * 5,067,451 3,446,973 3,223,000 3,446,973
============ ========== ============ ==========
</TABLE>
* The basic and diluted net loss per share has been restated to retroactively
effect a forward stock split in the ratio of one share for 13.09322865 shares
on December 22, 1999, a 2:1 forward split on April 14, 2000 and a 1:3 reverse
split on April 29, 2000
The accompanying notes are an integral part of these financial statements
<PAGE>
FLEXXTECH CORPORATION
FORMERLY INFINITE TECHNOLOGY CORPORATION AND
COLOR STRATEGIES
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED SEPTEMBER 30, 2000 & 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended
September 30,
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (502,520) $ (10,668)
Adjustments to reconcile net loss to cash used in
operating activities
Depreciation and amortization 78,000 80
(Increase) / decrease in current assets
Accounts receivable (494,007) -
Inventory (105,974) -
Deposits & other current assets 420 -
Accounts payable (474,189) 815
Accrued expenses (17,887) -
Customers' deposit 3,437 -
Deferred income tax 10,559 -
------------ -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (1,502,161) (9,773)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Goodwill on acquisition - -
Acquisition of property & equipment (144,691) -
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NET CASH USED IN INVESTING ACTIVITIES (144,691) -
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Sales of common stock 892,030 -
Proceeds from loans 976,007 -
Offering costs - (11,824)
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,868,037 (11,824)
------------ -----------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENT 221,185 (21,597)
CASH AND CASH EQUIVALENT -BEGINNING 2,869 46,184
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CASH AND CASH EQUIVALENT -ENDING $ 224,054 $ 24,587
============ ===========
Supplemental Information:
Cashflow statement does not include noncash transaction of acquisition of Mardock Promotional products,
Inc by issuing 600,000 shares at $1 each for assets & liabilities valued at $68,757 resulting in a
goodwill of $531,243.
Cashflow statement does not include noncash transaction of acquisition of Primavera Corporation &
its subsidiary for a consideration of $1,575,000 f resulting in a goodwill of $250,122.
Cashflow statement does not include noncash transaction of acquisition of OPTV.com for a
consideration of 100,000 shares of Flexxtech Corporation valued at $625,000 resulting in a
goodwill of $625,000
Cashflow statement does not include noncash transaction of acquisition of marketable securities in
exchange of shares of Flexxtech Corporation valued at $1,625,500 and reflection of marketable
securities at fair value of $1,772,000.
Cash paid for income taxes and interest - -
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
FLEXXTECH CORPORATION
FORMERLY INFINITE TECHNOLOGY CORPORATION AND
COLOR STRATEGIES
NOTE TO UNAUDITED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(1) Summary of Significant Accounting Policies:
Organization and Basis of Presentation:
The Company was organized on March 24, 1998, under the laws of the
State of Nevada, as Color Strategies. On December 20, 1999, the
Company changed its name to Infinite Technology Corporation. The
Company changed its name to Flexxtech Corporation in April 2000.
Principles of Consolidation:
The accompanying financial statements include the accounts of
Flexxtech Corporation (the "Parent"), and its 100% owned subsidiaries,
Flexxtech Holdings, Inc., Mardock Promotional Products, Inc, (an
Oregon corporation), 82% owned Optv.com (a Nevada corporation) and 80%
owned Primavera Corporation and its wholly owned subsidiary North
Texas Circuit Board Co., Inc. (a Texas corporation). All significant
intercompany accounts and transactions have been eliminated in
consolidation.
Basis of Preparation:
The accompanying unaudited condensed interim financial statements have
been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission for the presentation of interim
financial information, but do not include all the information and
footnotes required by generally accepted accounting principles for
complete financial statements. The audited financial statements for
the two years ended December 31, 1999 was filed on November 29, 2000
with the Securities and Exchange Commission and is hereby referenced.
In the opinion of management, all adjustments considered necessary for
a fair presentation have been included. Prior to March 31, 2000 the
Company was in the development stage whereby all the activities were
devoted to obtaining financing for the acquisitions of businesses.
Operating results for the nine-month period ended September 30, 2000
are not necessarily indicative of the results that may be expected for
the year ended December 31, 2000.
Acquisition
Flexxtech Holdings, Inc. acquired Mardock Promotional Products, Inc.
on April 26, 2000. The acquisition was recorded under purchase method
of accounting. The acquisition was recorded as per follows:
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Fair value of assets and liabilities
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Total Current assets $ 171,374
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Total Non-current assets 96,658
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Current liabilities (144,388)
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Non-current liabilities (54,887)
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Net worth of Mardock 68,757
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Consideration:
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600,000 shares of Flexxtech Corporation at $1 each 600,000
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Goodwill recorded $ 531,243
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</TABLE>
<PAGE>
On August 15, 2000, Flexxtech Holdings, Inc. entered into an agreement
with Primavera Corporation, whereby Flexxtech Holdings, Inc. acquired
67% newly issued and outstanding common stock of Primavera
Corporation. Flexxtech Holdings, Inc. was issued 203 newly issued
shares of Primavera Corporation in consideration of $1,575,000. On
October 31, 2000, the ownership of Flexxtech Holdings, Inc. was
increased to 80% of Primavera Corporation. The consideration is
payable in cash of $1,250,000 by installments through January 15, 2001
and remaining amount in form of 130,000 shares of the Company's common
stock at $2.50 per share. The Acquisition has been recorded under the
purchase method of accounting and resulted in Goodwill of $250,122.
On September 15, 2000, Flexxtech Holdings, Inc. entered into an
agreement with Optv.com, whereby Flexxtech Holdings, Inc. acquired
7,578,000 newly issued shares of common stock representing 80% issued
and outstanding common stock of Optv.com. The consideration was paid
by issuing 100,000 shares of the Company's common stock at $6.25 per
share. The Acquisition has been recorded under the purchase method of
accounting and resulted in Goodwill of $625,000.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Report on Form 10-QSB contains forward-looking statements, including
(without limitation) statements concerning possible or assumed future results of
operations and those preceded by, followed by or that include the words
"believes," "could," "expects," "anticipates," or similar expressions. For those
statements, we assert the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
You should understand that various events could cause those results to differ
materially from those expressed in such forward-looking statements: materially
adverse changes in economic conditions in the markets that we and our
subsidiaries serve; competition from others in the markets and industry segments
occupied by us and our subsidiaries; the ability to enter, the timing of entry
and the profitability of entering new markets; greater than expected costs or
difficulties related to the integration of the businesses acquired by our
subsidiaries; and other risks and uncertainties as may be detailed from time to
time in our public announcements and SEC filings.
The discussion and financial statements contained herein are for the three
months and nine months ended September 30, 2000 and September 30, 1999. The
following discussion regarding our financial statements should be read in
conjunction with our financial statements included herewith.
Overview.
We, through our wholly-owned subsidiary, Flexxtech Holdings, Inc., are engaged
in the business of developing, operating, and investing in emerging growth
companies in technology and the Internet. Our objective is to build long-term
capital appreciation for its shareholders through the acquisition of emerging
technology companies. The primary focus in technology and the Internet will
include the acquisition, investment, and internal development in the following
categories: E-commerce, Data Storage, Internet Service Providers, Internet
Portals, Internet Infrastructure, Wireless Technologies, Computer Software,
Computer Networking, Financial Services, Telecommunications Networks - equipment
and services, Semiconductor Equipment and Electronic Manufacturers and Services.
<PAGE>
Current Operations.
We are a holding company, which, through our wholly-owned subsidiary, Flexxtech
Holdings, Inc., holds of a variety of investments in the technology arena that
include 100% ownership in Mardock Promotional, Inc., 80% ownership in Primavera
Corporation, the parent company of North Texas Circuit Board Co., 82% of
OpiTV.com, and large minority ownership in a variety of other technology
companies including: 225,000 shares of common stock of Accesspoint Corporation
(OTCBB: ASAP), 1,500,000 shares of common stock of Infinite Networks, Inc. (OTC:
INCZ), 600,000 shares of Ameri-First Financial Group, Inc. (OTCBB: AMFR), and
100,000 shares of Easyriders, Inc. (AMEX: EZR).
In April 2000 we changed the direction and business plan of our company to its
current model. Before April 2000 we had virtually no meaningful business
operations. New directors were approved and elected by the shareholders. The new
directors elected new officers to guide our company and our new business plan.
On April 26, 2000, our wholly-owned subsidiary, Flexxtech Holding Corporation,
acquired 100% of Mardock Promotional, Inc., an Oregon Corporation, for 600,000
shares of our common stock.
On May 10, 2000, our wholly-owned subsidiary, Flexxtech Holding Corporation,
acquired 1,500,000 shares of the common stock of Infinite Networks, Inc. for
1,500,000 shares of our common stock.
On June 15, 2000, our wholly-owned subsidiary, Flexxtech Holding Corporation,
acquired 100,000 shares of common stock of Accesspoint Corporation, 100,000
shares of common stock of Ameri-First Financial Group, Inc., 100,000 shares of
Easyriders, Inc. and 180,000 shares of OpiTV.com in exchange for 1,500,000
shares of our common stock.
On June 15, 2000, we borrowed $100,000.00 from Haldane Limited pursuant to the
terms of a Promissory Note. The loan bears interest at ten percent (10%) per
annum, with the principal and interest all due on September 15, 2000. In not
paid on September 15, 2000, the Note bears interest at the annual rate of
eighteen percent (18%). The Note was not paid on September 15, 2000.
On June 26, 2000, we commenced a private placement offering pursuant to
Regulation D, Rule 506, as amended and Regulation S, as amended. In the three
months ended September 30, 2000 and pursuant to Regulation D, we sold 253,852
shares of common stock at $2.50 per share for gross proceeds of $634,630.
Pursuant to Regulation S, we sold 61,480 shares for gross proceeds of $153,700.
While there is no assurance that we will be successful in raising additional
capital, we are actively seeking private equity financing to assure that we will
be capable of financing the continuation of our business. Any additional capital
raised above and beyond what we need for our monthly expenditures would be used
in increasing our marketing and sales efforts and future investments and
acquisitions. Should we fail to raise additional funding, we will be forced to
curtail our growth, both through internal development and through investments
and acquisitions. As only a holding company to date, we do not generate our own
revenues, but rely on additional financing to pay our operation expenses. We are
currently developing a plan to provide a variety of consulting services to
emerging technology companies to include business and marketing plan
development, merchant and investment banking services and general business
consulting. We hope to attract clients for these new services in the third
quarter of this year, therefore not relying on additional financing to support
our role as a holding company.
On July 18, 2000, we, through our wholly-owned subsidiary Flexxtech Holdings,
Inc. acquired an additional 125,000 shares of Accesspoint Corporation at a price
of $4.00 per share, for a total of $500,000. The acquisition consisted of us
issuing 300,000 shares of common stock, at a price of $1.00 per share and a
promissory note for $200,000 at 10% interest per annum, due on demand. The
holder of the issued shares and Note is Atlantis Aggressive Growth Company.
On August 14, 2000, we paid 100,000 shares of our common stock to Sierra Nevada
Advisors for financial consulting and advisory services. The stock was valued at
par value.
<PAGE>
On August 15, 2000, we, through our wholly-owned subsidiary Flexxtech Holdings,
Inc. acquired 67% of Primavera Corporation, the parent company of North Texas
Circuit Board Company. Flexxtech Holdings, Inc. was issued 203 shares of
Primavera Corporation in consideration of payment in the total amount of
$1,575,000. On October 31, 2000, the ownership was increased to 80% of Primavera
Corporation. The consideration is payable in cash of $1,250,000 by installments
through January 15, 2001 and in the form of 130,000 shares of our common stock
valued for purposes of the transaction at $2.50 per share. As of September 30,
2000, none of the of our shares of common stock had been issued to Primavera
Corporation. However, through November 20, 2000, the 130,000 shares had been
issued to Primavera shareholders and $900,000 had been delivered to Primavera
and North Texas Circuit Board for working capital. We also granted piggy-back
registration rights for a one year period with regard to such shares. As of
September 30, 2000, an additional 10,000 shares remained to be issued to two
Primavera shareholders for advisory services pertaining to ongoing business
matters.
On September 8, 2000, our wholly-owned subsidiary, Flexxtech Holdings, Inc.,
executed a Financial Advisory and Consulting Agreement with Ameri-First
Financial Group, a Nevada Corporation, whereby Flexxtech Holdings, Inc. agreed
to render financial advisory services in connection with the negotiation of
transactions, marketing and support of Ameri-First Financial Group,
acquisitions, and corporate development and organization. Under the one year
agreement, Flexxtech Holdings, Inc. was issued 500,000 shares of the common
stock of Ameri-First Financial Group, Inc. (OTCBB: AMFR). Pursuant to the
Agreement, Ameri-First agreed to register the 500,000 shares with the Securities
and Exchange Commission within ninety days of the agreement. Each month the
stock is not registered, Ameri-First is obligated to pay a reoccurring penalty
of 50,000 shares.
On September 15, 2000, we, through our wholly-owned subsidiary Flexxtech
Holdings, Inc., acquired 80% of or 7,578,000 shares of common stock of OpiTV.com
from two principle shareholders of OpiTV.com in exchange for 100,000 of our
common shares, valued for purposes the transaction at $6.25 per share. As of
September 30, 2000, none of the above shares of our common stock had been issued
to Opitv.com or its shareholders. The acquisition resulted in goodwill of
$625,000. Prior to the acquisition, Flexxtech Holdings, Inc. owned 180,000
shares of common stock of OpiTV.com. This transaction increased the total stock
ownership by Flexxtech Holdings, Inc. in OpiTV.com to 82%.
Also, in September 2000, we issued 28,200 shares of our common stock at a value
of $1 per share to two consultants to the company.
<PAGE>
Results of Operations.
We have generated consolidated revenues of $3,483,421 for the period ended
September 30, 2000 as compared to $1,757 for the three month period ended
September 30, 1999. We anticipate an increase in generating revenues in the
future. Currently, our cash needs include, but are at no means limited to, rent,
salaries and wages, cash raising expenses and to fund operating of our
subsidiaries and future acquisitions. On June 15, 2000, we executed a promissory
note with a shareholder in the amount of $100,000 at 10% interest per annum, due
September 15, 2000. On July 18, 2000 we executed a promissory note with a
shareholder in the amount of $200,000 at 10% interest per annum, due on demand.
We plan on growing our revenues through the acquisition of various technology
companies in various markets and increasing our products and services in part
through acquisition of existing emerging technology and Internet-related
businesses. We will continue to seek capital to fund to our subsidiary,
Flexxtech Holdings, Inc, for acquisitions and the internal development of those
companies acquired. We will seek capital through private investors and
anticipate attracting institutional investors in the near future. In the event
that we do not attract such capital and are unable to generate revenues
sufficient to support our expenses, then we will be required to curtail our
operations, sell existing investments, and slow down our plan for expansion. We,
however, feel that, subject to the cautions expressed above and economic and
other factors beyond our control, we are generally on good financial footing and
do not foresee a slow down in our expansion plans for sometime.
Three Months and Nine Months Ended September 30, 2000 as Compared to Three
Months and Nine Months Ended September 30, 1999
Revenues.
We had revenues of $3,483,421 and $3,591,917 for the three months and nine
months ended September 30, 2000 and $1,757 and $1,757 for the three months and
nine months ended September 30, 1999. The increase in revenues was the result of
the acquisition by Flexxtech Holdings, Inc. of Mardock, Inc. on April 26, 2000,
and contribution by Mardock, Inc. to the revenue from April 26, 2000 through
September 30, 2000, and the acquisition of Primavera Corporation, the parent
company of North Texas Circuit Board Company on August 15, 2000, and
contribution by Primavera to the revenue from August 15, 2000 through September
30, 2000.
Cost of Sales.
We incurred Cost of Sales of $2,746,969 for the three months ended September 30,
2000 as compared to $0 for the same three months ended September 30, 1999. The
increase in Cost of Sales is the result of consolidated Cost of Sales from the
subsidiaries of Flexxtech Holdings, Inc, namely Mardock, Inc. and North Texas
Circuit Board Company.
General, Administrative and Selling Expenses.
We incurred costs of $1,074,139 for the three months ended September 30, 2000 as
compared to $5,733 for the same period last year. General, Administrative and
Selling Expenses for the nine month, period ended September 2000 and 1999
amounted to $1,180,188 and $8,341, respectively. The increase of operating
expenses is the result of the Mardock and North Texas Circuit Board acquisitions
and their consolidated operating expenses and an increase in rent, salaries,
wages, and expenses related to raising capital.
Net loss before income taxes.
We has a loss before taxes of $432,719 for the three months ended September 30,
2000 as compared to a loss of $3,976 for the three months ended September 30,
1999. For the nine months ended September 30, 2000, we had a loss before taxes
of $501,720 as compared to a loss before taxes of $6,584 for the nine months
ended September 30, 1999.
Unrealized gain on investments.
We have an unrealized gain on investments available for sale of $300,500 for the
three and six months ended September 30, 2000. There is no gain or loss for the
same periods in 1999.For the nine months ended September 30, 2000, we had an
unrealized gain on investments available for sale of $146,500. The unrealized
gain is contributed to the fluctuating market value of the securities that
subsidiary, Flexxtech Holdings, Inc., owned, at the closing of the period. The
securities owned are marked to market on the last day of the trading month for
the period ended.
<PAGE>
Net loss.
We had a net loss of $432,718 for the quarter ended September 30, 2000 as
compared to a net loss of $3,976 for the quarter ended September 30, 1999. The
net loss for the nine months ended September 30, 2000 was $502,520 as compared
to a net loss of $6,584 for the nine months ended September 30, 1999. The net
loss was mostly due to the acquisition and inclusion of operations of North
Texas Circuit Board Co., and Mardock Inc. from the period of acquisition through
September 30, 2000, and the increase in general and administrative expenses.
Liquidity and Capital Resources.
Our business plan was restructured in April 2000 to its now current plan. We
must continue to raise capital to fulfill our plan of acquiring, through our
subsidiary Flexxtech Holdings, Inc., emerging technology companies and assisting
in the development of those companies internally. A majority of our expenses are
related to raising capital. Future expenses will include legal and accounting
and other professional fee expenses. If we are unable to raise any additional
capital our operations will be curtailed and we may have to liquidate our
current investments for operating capital. As of September, 2000, we had total
Current Assets of $5,070,242 and Current Liabilities of $4,161,017. Cash and
cash equivalents were $224,054. Stockholders' Equity was $3,759,977. Our
management feels that, subject to the above cautions and economic and other
factors beyond our control, we are moving in the correct financial direction at
this time and that no outside forces, including inflation has had a significant
impact on our operations. We will continue to raise capital for acquisitions and
the internal development of our subsidiaries and their holdings.
Subsidiaries.
Flexxtech Holdings, Inc. is our wholly-owned subsidiary. On April 26, 2000,
Flexxtech Holdings, Inc. acquired 100% of the outstanding common stock of
Mardock, Inc., an Oregon Corporation. We issued 600,000 shares of our common
stock for all of the shares of Mardock, Inc. Mardock, Inc. was established in
1986 and is a designer, manufacturer, and distributor of apparel and promotional
products to the corporate community. Mardock is in the process of developing an
e-commerce site for corporate promotional products. Greg Mardock, the President
and CEO of Mardock, Inc. is also a director and officer of our company. On
August 31, 2000, Grey Mardock became President of our corporation.
On August 15, 2000, we acquired, through our wholly-owned subsidiary Flexxtech
Holdings, Inc., 67% of Primavera Corporation, the parent company of North Texas
Circuit Board Company. Flexxtech Holdings, Inc. was issued 203 shares of common
stock of Primavera Corporation in consideration of the payment of $1,575,000. On
October 31, 2000, the ownership of Primavera Corporation by Flexxtech
Corporation, Inc. was increased to 80%. The consideration consisted of cash in
the amount of $1,250,000 payable by installments through January 15, 2001 and of
130,000 shares of our common stock valued for purposes of the transaction at
$2.50 per share. As of September 30, 2000, the we had not issued the above
shares. However, the 130,000 shares had been issued to Primavera shareholders as
of November 20, 2000, and $750,000 has been delivered to Primavera and North
Texas Circuit Board for working capital. As of September 30, 2000, an additional
10,000 shares of our common stock remained to be issued to two Primavera
shareholders for advisory services pertaining to ongoing business matters.
For the six month ended June 30, 2000 and twelve months ended December 31, 1999,
North Texas Circuit Board Company had net revenue of $4,798,997 and $9,887,025
respectively. A net loss for the same periods was $765,731 and $868,775,
respectively.
For the three months and nine months ended September 30, 2000, net revenues were
$2,109,771 and $6,908,768 respectively. Net income (loss) for the three months
and nine months ended September 30, 2000 was $35,985 and ($729,746),
respectively.
<PAGE>
Primavera Corporation was formed in Texas on April 26, 2000. Primavera
Corporation is a holding company which operates primarily through its wholly-
owned subsidiary, North Texas Circuit Board Company ("NTCB"), which was formed
in 1978 in the state of Texas. NTCB manufacturers printed circuit boards on a
quick-turn basis. On May 11, 2000, Primavera acquired 100% of the common stock
of NTCB.
On September 15, 2000, we, through our wholly-owned subsidiary Flexxtech
Holdings, Inc., acquired 80% or 7,578,000 shares of common stock of OpiTV.com
from two principle shareholders of OpiTV.com in exchange for 100,000 shares of
our common stock valued for purposes of the transaction at $6.25 per share. The
acquisition resulted in goodwill of $625,000. Prior to the acquisition,
Flexxtech Holdings, Inc. owned 180,000 shares of common stock of OpiTV.com. The
total holdings by Flexxtech Holdings, Inc. in OpiTV.com is 82%.
OpiTV.com, a Nevada Corporation, was formed on October 12, 1999. OpiTV.com is an
I-Commerce technology company that is engaged in the business of marketing and
distributing a Set-Top-Box (STB) device on a rental or acquisition basis. The
STB is a convergence device, giving the consumer high-speed Internet access and
enhanced communications as well as full computing capabilities in their home or
office. OpiTV.com informs us that OpiTV.com plans on distributing the STB in
January 2001 and is currently finalizing manufacturing arrangements. It is
anticipated that sales will be made through agent's distributors and sub-
licenses. OpiTV has no revenues to date and operating expenses of approximately
$20,000 per month, consisting mostly of wages, rent and sales expenses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
On July 18, 2000 we issued 300,000 shares of our common stock to Atlantis
Aggressive Growth Company in partial exchange for 125,000 shares of common stock
of Accesspoint Corporation issued to our wholly-owned subsidiary, Flexxtech
Holdings, Inc. The acquisition consisted of us issuing 300,000 shares of common
stock, at a price of $1.00 per share and a promissory note for $200,000 at 10%
interest per annum, due on demand. No underwriters were used and we did not
publicly offer our shares. We did not pay any finder's fees, discounts or
commissions in connection with the above issuance. The issuance was exempt
pursuant to Section 4(2) of the Act, Regulation D promulgated there under, and
pursuant to Section 25102(f) of the California Corporations Code. We believe
that Atlantis Aggressive Growth Company acquired the shares for its own account
with no then present intention of dividing its interest with others or of
reselling or otherwise disposing of all or any portion of the shares. The shares
were issued in a private transaction, which was not part of a distribution of
shares. We, or our officers or directors or our or their affiliates or
representatives, had a pre-existing personal or business relationship with
Atlantis Aggressive Growth Company.
On August 14, 2000, we issued 100,000 shares of our common stock to Sierra
Nevada Advisors for financial consulting and advisory services. For purposes of
the transaction the stock was valued at par value. No underwriters were used and
we did not publicly offer our shares. We did not pay any finder's fees,
discounts or commissions in connection with the above issuance. The issuance was
exempt pursuant to Section 4(2) of the Act, Regulation D promulgated there
under, and pursuant to Section 25102(f) of the California Corporations Code. We
believe that Sierra Nevada Advisors, Inc. acquired the shares for its own
account with no then present intention of dividing its interest with others or
of reselling or otherwise disposing of all or any portion of the shares. The
shares were issued in a private transaction, which was not part of a
distribution of shares. We, or our officers or directors or our or their
affiliates or representatives, had a pre-existing personal or business
relationship with Sierra Nevada Advisors, Inc.
<PAGE>
On August 15, 2000, we entered into a Stock Purchase Agreement with Primavera
Corporation, a Texas corporation, which called for the issuance of 130,000
shares of our common stock to Primavera Corporation. As of September 30, 2000,
none of the shares had been issued to Primavera Corporation.
On September 15, 2000, we entered into a Plan of Reorganization and Stock
Purchase Agreement with OptTV.com, a Nevada corporation, which called for the
issuance of 100,000 shares of our common stock to Optiv.com. As of September 30,
2000, none of the shares had been issued to OpiTV.com.
Also, in September 2000, we issued 28,200 shares of our common stock at a value
of $1 per share to two consultants to the company. We issued issued 3,200 shares
of common stock to Anantbhai C. Amin and 25,000 shares of common stock to
Anastasio J. Sanchez-Martinez. No underwriters were used and we did not publicly
offer our shares. We did not pay any finder's fees, discounts or commissions in
connection with the above issuance. The issuance was exempt pursuant to Section
4(2) of the Act, Regulation D promulgated there under, and pursuant to Section
25102(f) of the California Corporations Code. We believe that the consultants
acquired the shares for their own account with no then present intention of
dividing their interest with others or of reselling or otherwise disposing of
all or any portion of the shares. The shares were issued in a private
transaction, which was not part of a distribution of shares. We, or our officers
or directors or our or their affiliates or representatives, had a pre-existing
personal or business relationship with the consultants.
As previously reported, in June, 2000 we had commenced a private placement
offering pursuant to Regulation D, Rule 506, as amended, and Regulation S, as
amended. The private placement continued and was ongoing as of September 30,
2000. From July through September, 2000, we sold 253,852 shares of common stock
pursuant to Regulation D under the private placement to 68 purchasers at $2.50
per share for total gross proceeds of $634,630. No underwriters were used and we
did not publicly offer the above shares. While we did not pay any finder's fees
or discounts, we did pay commissions in connection with the above issuance in
the total amount of $63,463 representing 10% of the amount of gross cash
proceeds received by us in connection with the above placement of shares.
As part of the private placement, from July through September we also sold
61,480 shares of common stock pursuant to Regulation S to 20 purchasers at $2.50
per share for total gross proceeds of $153,700. No underwriters were used and we
did not publicly offer the above shares. While we did no pay any finder's fees
or discounts, we did pay commissions in connection with the above issuance in
the total amount of $15,370 representing 10% of the amount of gross cash
proceeds received by us in connection with the above placement of shares.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
On August 31, 2000, Mr. Chris H. Beshlian was elected as director of our
corporation by our shareholders. The foregoing action was approved by the
holders of more than a majority of our common stock pursuant to a written
consent. No meeting was held for the above written consent. The written consent
was obtained on April 12, 2000. As of the date of the above actions we had
outstanding 6,046,361 shares of common stock. 4,111,526 shares of common stock
voted in favor of the above actions. No proxies were solicited. Accordingly, we
did not provide our stockholders with an Information Statement, pursuant to
Schedule 14C or otherwise, concerning such actions.
Under Nevada law, no meeting of the stockholders was required to approve the
above actions. Pursuant to Section 78.320 of the Nevada Revised Statutes, Unless
otherwise provided in the articles of incorporation or the bylaws, any action
required or permitted to be taken at a meeting of the stockholders may be taken
without a meeting if a written consent thereto is signed by stockholders holding
at least a majority of the voting power.
<PAGE>
Item 5. Other Information.
On September 8, 2000, our wholly-owned subsidiary, Flexxtech Holdings, Inc.,
executed a Financial Advisory and Consulting Agreement with Ameri-First
Financial Group, a Nevada Corporation, whereby Flexxtech Holdings, Inc. agreed
to render financial advisory services in connection with the negotiation of
transactions, marketing and support of Ameri-First Financial Group,
acquisitions, and corporate development and organization. Under the one year
agreement, Flexxtech Holdings, Inc. was issued 500,000 shares of the common
stock of Ameri-First Financial Group, Inc. (OTCBB: AMFR). Pursuant to the
Agreement, Ameri-First agreed to register the 500,000 shares with the Securities
and Exchange Commission within ninety days of the agreement. Each month the
stock is not registered, Ameri-First is obligated to pay a reoccurring penalty
of 50,000 shares. Ameri-First Financial Group, Inc. also agreed to reimburse our
expenses and to provide us with registration rights pertaining to the above
shares.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits filed with this Report
Exhibit no. Description
----------- -----------
2.1* Plan of Reorganization and Stock Purchase Agreement -
OpiTV.com
10.1* Stock Purchase Agreement and Promissory Note - Atlantis
Aggressive Growth Company
10.2* Stock Purchase Agreement - Primavera Corporation
10.3* Financial Advisory Consulting Agreement - Ameri-First
Financial Group
10.4* Promissory Note - Haldane Limited
27 Financial Data Schedule
(* Filed as an Exhibit to Form 8-K filed on December 4, 2000)
(b) Reports on Form 8-K
On December 4, 2000, we filed a report on Form 8-K and reported, in part, the
following items: (i) Resignation of Mr. Brian Kulhanjian as officer and the
election of Howard Frantom and Mr. Chris H. Beshlian as officers; (ii) Plan of
Reorganization and Stock Purchase Agreement with OpiTV.com; (ii) Stock Purchase
Agreement and Promissory Note with Atlantis Aggressive Growth Company; (iii)
Stock Purchase Agreement with Primavera Corporation; (iv) Financial Advisory
Consulting Agreement with Ameri-First Financial Group; (v) June 15, 2000,
$100,000.00 loan from Haldane Limited pursuant to the terms of a Promissory
Note. We also reported Pro Forma Statements for the Period Ended September 30,
2000 (Unaudited) to be filed by amendment, which amendment has not been filed as
of the date of filing of this report on Form 10-QSB.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FLEXXTECH CORPORATION
(Registrant)
Date: December 6, 2000 By: /s/ Greg Mardock
------------------------
Greg Mardock
President
