U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ending September 30, 2000.
[ ] TRANSACTION REPORT PURSUANT SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ____________.
Commission file number 0-22678
XAIBE, INC.
----------------------------------------------------------------
(Exact name of small business issuer as specific in its charter)
Nevada 76-0594907
-------------------------------- ------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
13100 N.W. Freeway, Suite 130, Houston, Texas 77040
-----------------------------------------------------
(Address of principal executive offices)
(713) 690-9233
---------------------------
(Issuer's telephone number)
2400 Loop 35, #1502, Alvin, Texas 77512
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X] No []
State the number of shares outstanding of the Issuer's class of common
equity, as of the latest practicable date: common stock, $0.001 par value as of
November 1, 2000: 14,959,705 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
XAIBE, INC.
FORM 10-QSB
INDEX
Page No.
-----------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of September 30, 2000 and June 30, 2000..........3
Statements of Operations for the Three months
ended September 30, 2000 and 1999..................................4
Statements of Cash Flows for the Three months ended
September 30, 2000 and 1999........................................5
Notes to Financial Statements......................................6
Item 2. Management's Discussion and Analysis or
Plan of Operations........................................8
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K..........................9
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
XAIBE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
September 30, June 30,
2000 2000
ASSETS: (unaudited) ----------
--------------
<S> <C> <C>
Current Assets:
Cash $ 939 $ 939
Other Assets:
License Rights 1,000 1,000
-------- --------
Total Assets $ 1,939 $ 1,939
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES:
Current Liabilities:
Accounts Payable, Trade $ 500 $ 500
Stockholders' Equity:
Common Stock, $0.001 Par Value,
10,000,000 shares authorized,
1,600,000 shares issued and outstanding 1,600 1,600
Additional Paid-in Capital 19,900 19,900
Deficit Accrued During the Development Stage (20,061) (20,061)
-------- --------
Total Stockholders' Equity 1,439 1,439
-------- --------
Total Liabilities and Stockholders' Equity $ 1,939 $ 1,939
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements
3
<PAGE>
XAIBE INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
(Unaudited)
For the Three Months Ended September 30,
----------------------------------------
2000 1999
-------- ---------
Revenues $ 0 $ 0
Operating Expenses 0 8,291
---------- ----------
Net income (loss) for the period $ 0 $ (8,291)
========== ==========
Net income (loss) per share $ 0.00 $ (0.01)
========== ==========
Weighted average number of common shares
outstanding 1,600,000 1,600,000
========== ===========
The accompanying notes are an integral part of these financial statements
4
<PAGE>
XAIBE INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
(Unaudited)
For the Three Months
Ended September 30,
--------------------------
2000 1999
------ ------
Cash Flows From Operating Activities:
Net income (loss) 0 (8,291)
Adjustments to reconcile net income (loss)
to cash flow from operating activities:
Increase in licensing rights 0 (1,000)
Increase in deferred offering costs 0 (10,005)
------ ----------
Net cash provided by (used in) operating
activities 0 (19,296)
------ ----------
Cash Flows From Financing Activities:
Issuance of common stock 0 21,500
------ ----------
Net increase in cash for the period 0 2,204
Cash, beginning of period 939 0
------ ----------
Cash, end of period $ 939 $ 2,204
====== ==========
The accompanying notes are an integral part of these financial statements
5
<PAGE>
XAIBE INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. Interim Presentation
The interim consolidated financial statements are prepared pursuant to the
requirements for reporting on Form 10-QSB. The June 30, 2000 balance sheet data
was derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. The interim
financial statements and notes thereto should be read in conjunction with the
financial statements and notes included in the Company's Form 10-KSB for the
year ended June 30, 2000. In the opinion of management, the interim financial
statements reflect all adjustments of a normal recurring nature necessary for a
fair statement of the results for the interim periods presented. The current
period results of operations are not necessarily indicative of results which
ultimately will be reported for the full year ending June 30, 2001.
2. Stock Split
On September 13, 2000, the Company declared a 4-for-1 stock split for all
shareholders of record on that date.
3. Subsequent Events
PolarShield Acquisition
-----------------------
On October 27, 2000, the Company completed an exchange (the "Exchange") pursuant
to which the Company issued an aggregate of 5,559,705 shares of common stock in
exchange for 97.9% of the outstanding shares of common stock of PolarShield,
Inc. ("PolarShield"). Pursuant to the terms of the Exchange, each share of
PolarShield common stock was exchangeable for one share of Company common stock.
As a result of the Exchange, PolarShield became a subsidiary of the Company.
In connection with the Exchange all convertible preferred stock, options and
warrants to purchase shares of PolarShield common stock outstanding immediately
prior to the consummation of the Exchange were assumed by the Company.
PolarShield has 1,629,550 shares of preferred stock outstanding which, 45 days
following the first quote on the Company's common stock, at the election of the
holder, is: (i) convertible into one share of common stock, subject to a
"lock-up" for a period of 18 months following conversion, (ii) convertible into
a number of shares of common stock determined by dividing, for each share of
preferred stock, 1 by 50% of the closing bid price of the Company's common stock
on the 30th calendar day following the first quote, subject to a "lock-up" for a
period of 12 months following conversion, or (iii) redeemable at $1.15 per
share. The preferred shares are convertible based on 50% of the closing bid
price if the holder fails to make an election.
6
<PAGE>
PolarShield, a Nevada corporation formed in 1998, is engaged in the marketing of
energy management and conservation solutions utilizing a patented refrigerant
process (the "Process") designed to improve efficiency of heating, ventilation
and air condition and refrigerant systems.
Pursuant to the terms of the Exchange, John Bauska and Dorothy Mortenson
resigned as officers and directors of the Company and Jimmy Farmer was appointed
sole director and President of the Company.
In connection with the Exchange, the Company relocated its principal offices to
the offices of PolarShield located at 13100 N.W. Freeway, Suite 130, Houston,
Texas 77040.
Acquisition of International Rights
-----------------------------------
Simultaneous with closing of the Exchange, the Company acquired from Energy
Technologies Group, Inc. the international marketing rights with respect to the
Process in exchange for 3,000,000 shares of common stock.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
General
Xaibe, Inc. was formed in July 1998 to produce and distribute a licensed oxygen
enriched water product for fish farming, aquaculture, mariculture, the husbandry
of poultry and for remediating animal waste from dairies, feedlots of all kinds
and for other similar uses.
Through June 2000, the Company's operations had been limited to efforts to
implement its business plan. No revenues have been generated from those revenues
to date.
During the quarter ended September 30, 2000, the Company entered into
discussions with PolarShield, Inc. ("PolarShield") with respect to a possible
combination of the Company and PolarShield. The Company and PolarShield entered
into an Exchange Agreement on September 29, 2000 pursuant to which the Company
agreed to acquire PolarShield with management of PolarShield to assume control
of the combined companies.
On October 27, 2000, the Company completed an exchange (the "Exchange") pursuant
to which the Company issued an aggregate of 5,559,705 shares of common stock in
exchange for 97.9% of the outstanding shares of common stock of PolarShield.
Pursuant to the terms of the Exchange, each share of PolarShield common stock
was exchangeable for one share of Company common stock. As a result of the
Exchange, PolarShield became a subsidiary of the Company.
In connection with the Exchange all convertible preferred stock, options and
warrants to purchase shares of PolarShield common stock outstanding immediately
prior to the consummation of the Exchange were assumed by the Company.
PolarShield has 1,629,550 shares of preferred stock outstanding which, 45 days
following the first quote on the Company's common stock, at the election of the
holder, is: (i) convertible into one share of common stock, subject to a
"lock-up" for a period of 18 months following conversion, (ii) convertible into
a number of shares of common stock determined by dividing, for each share of
preferred stock, 1 by 50% of the closing bid price of the Company's common stock
on the 30th calendar day following the first quote, subject to a "lock-up" for a
period of 12 months following conversion, or (iii) redeemable at $1.15 per
share. The preferred shares are convertible based on 50% of the closing bid
price if the holder fails to make an election.
PolarShield, a Nevada corporation formed in 1998, is engaged in the marketing of
energy management and conservation solutions utilizing a patented refrigerant
process (the "Process") designed to improve efficiency of heating, ventilation
and air condition and refrigerant systems.
Following the Exchange, management adopted the business plan of PolarShield.
8
<PAGE>
Results of Operations
Other than efforts relating to the Exchange, the Company conducted no material
operations during the quarter ended September 30, 2000. During the same quarter
in 1999, the Company's operations were limited to efforts to implement its
original business plan.
As a result of the limited activities during both the current period and the
corresponding period in 1999, the Company reported no revenues during either
period.
Liquidity and Capital Resources
At September 30, 2000, the Company had a cash balance of $939 and working
capital of $439, unchanged from June 30, 2000. At that date, the Company no
substantial commitments and no long-term liabilities with operations being
funded by management.
With the acquisition of PolarShield in October 2000, the Company's financial
resources and capital requirements will be substantially those of PolarShield.
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Number Description
-------- --------------
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
9
<PAGE>
SIGNATURE
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.
XAIBE, INC.
Dated: November 17, 2000 By: /s/ Jimmy Farmer
----------------------------------------
Jimmy Farmer
Chief Executive Officer and Principal
Financial Officer
