UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________________to_______________________
Commission File Number 000-26119
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(Exact name of small business issuer as specified in its charter)
Nevada 87-0629754
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3672 East Cove Point Drive, Salt Lake City, Utah 84109
(Address of principal executive offices)
(801) 574-8000
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 practicable date.
Class Outstanding as of June 30, 2000
Common Stock, $.001 par value 5,231,000
Transitional Small Business Disclosure Format (check one). Yes ; No X
<PAGE>
PART I
Item 1. Financial Statements
INDEPENDENT ACCOUNTANT'S REPORT
Txon International Development Corporation
(A Development Stage Company)
We have reviewed the accompanying balance sheets of Txon International
Development Corporation (a development stage company) as of June 30, 2000 and
September 30, 1999, and the related statements of operations for the three and
nine months, and cash flows for the nine month periods ended June 30, 2000 and
1999. 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
August 7, 2000
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
BALANCE SHEET
June 30, September 30,
2000 1999
--------- ---------
ASSETS
Cash & Cash Equivalents .............................. $ 642 $ 1,035
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable & accrued expenses .................. $ -- $ 86
Stockholders' Equity:
Preferred stock (par value $0.001),
10,000,000 shares authorized, no shares issued
at June 30, 2000 and September 30, 1999 ........... -- --
Common stock (par value $0.001),
50,000,000 shares authorized, 4,523,100 and 523,100
issued at June 30, 2000 and September 30, 1999 .... 4,523 523
Capital in excess of par value ......................... 362,192 362,192
Deficit accumulated during development stage ........... (366,073) (361,766)
--------- ---------
Total Stockholders' Equity ................... 642 949
--------- ---------
Total Liabilities and Stockholders' Equity ... $ 642 $ 1,035
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
since
inception
For the three months ended For the nine months ended of
June 30, June 30, development
----------------------- ---------------------
2000 1999 2000 1999 stage
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues ................. $ -- $ -- $ -- $ -- $ --
----------- --------- --------- --------- ---------
Expenses
Selling, general &
administrative expenses 4,033 6,130 4,307 230,064 366,073
----------- --------- --------- --------- ---------
Operating Loss ........... (4,033) (6,130) (4,307) (230,064) (366,073)
----------- --------- --------- --------- ---------
Other income (expense):
Interest expense ...... -- -- -- -- --
----------- --------- --------- --------- ---------
Loss before taxes ........ (4,033) (6,130) (4,307) (230,064) (366,073)
Income taxes ............. -- -- -- -- --
----------- --------- --------- --------- ---------
Net Loss .......... (4,033) (6,130) (4,307) (230,064) (366,073)
=========== ========= ========= ========= =========
Basic per Share Amounts
Net Income (Loss) ........ $ -- $ (.01) $ -- $ (0.62)
=========== ========= ========= =========
Weighted Average Shares
Outstanding .............. 1,186,813 523,100 918,704 371,550
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
For the Nine For the Nine Since
Months Ended Months Ended Inception of
June 30, Development
---------------------
2000 1999 Stage
--------- --------- ---------
Cash Flows from Operating Activities:
<S> <C> <C> <C>
Cash paid to suppliers and employees ........ $ (393) $ (172,717) $(339,873)
--------- --------- ---------
Net cash used in operating activities ... (393) (172,717) (339,873)
--------- --------- ---------
Cash Flows from Investing Activities:
Investment in deferred development costs .... -- -- (6,000)
--------- --------- ---------
Net cash used by investing activities ... -- -- (6,000)
--------- --------- ---------
Cash Flows from Financing Activities:
Proceeds from common stock to be issued ..... -- 90,000 323,100
Contributed capital from officers ............ -- -- 23,415
--------- --------- ---------
Net cash provided by financing activities -- 90,000 346,515
--------- --------- ---------
Net change in cash and cash equivalents ....... (393) (82,717) 642
Cash and cash equivalents at beginning of year 1,035 83,468 --
--------- --------- ---------
Cash and cash equivalents at end of year ...... $ 642 $ 751 $ 642
========= ========= =========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities:
Net loss ...................................... (4,307) (230,064) (366,073)
Adjustments used to reconcile net loss to Net
cash used in operating activities:
Loss on Investments ........................... -- -- 6,000
Stock issuer for services ..................... 4,000 -- 4,000
Increase (Decrease) in accounts payable ...... (86) (5,537) --
Increase (Decrease) in accrued expenses ....... -- 13,469 --
Increase in accounts payable - officers ....... -- 49,415 16,200
--------- --------- ---------
Net cash used in operating activities ......... $ (393) $ (172,727) $(339,873)
========= ========= =========
</TABLE>
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
On June 5, 2000, the Company issued 4,000,000 shares to officers in
exchange for services valued at $0.001 per share.
The accompanying notes are an integral part of these financial statements.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Txon International Development
Corporation is presented to assist in understanding the Company' financial
statements. The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
The unaudited financial statements as of June 30, 2000 and for the nine
months 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 six 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 Nevada on
January 29, 1998 as Weston International Development Corporation. On July 28,
1998 the name of the Company was changed to Txon International Development
Corporation. The primary business of the Company is the acquisition,
development, construction and operation of real properties. The Company is in
the development stage since January 29, 1998 (inception) and has not commenced
planned principal operations.
Nature of Business
The Company intends to acquire interests in various business opportunities,
which in the opinion of management will provide a profit to the Company.
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.
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.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
Concentration 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. The Company maintains the majority of its cash balances
with one financial institution, in the form of demand deposits.
Loss per Share
The reconciliations of the numerators and denominators of the basic loss
per share computations are as follows:
Per-Share
Income Shares Amount
(Numerator) (Denominator)
For the three months ended June 30, 2000
Basic Loss per Share
Loss to common shareholders $ (4,033) 1,186,813 $ -
=============== ================ ==============
For the nine months ended June 30, 2000
Basic Loss per Share
Loss to common shareholders $ (4,307) 918,704 $ -
=============== ================ ==============
For the three months ended June 30, 1999
Basic Loss per Share
Loss to common shareholders $ (6,130) 523,100 $ (0.01)
=============== ================ ==============
For the nine months ended June 30, 1999
Basic Loss per Share
Loss to common shareholders $ (230,064) 371,550 $ (0.62)
=============== ================ ==============
The effect of outstanding common stock equivalents are anti-dilutive for
June 30, 2000 and 1999 and are thus not considered.
<PAGE>
TXON INTERNATIONAL DEVELOPMENT CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2 - INCOME TAXES
The Company has accumulated tax losses estimated at $360,000 expiring in
years beginning 2013. Current tax laws limit the amount of loss available to be
offset against future taxable income when a substantial change in ownership
occurs. The amount of net operating loss carryforward available to offset future
taxable income will be limited if there is a substantial change in ownership. In
accordance with SFAS No. 109, a valuation allowance is provided when it is more
likely than not that all or some portion of the deferred tax asset will not be
realized. Due to the uncertainty with respect to the ultimate realization of the
net operating loss carry forward, the Company established a valuation allowance
for the entire net deferred income tax asset as of June 30, 2000.
NOTE 3 - DEVELOPMENT STAGE
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.
NOTE 4 - COMMITMENTS
As of June 30, 2000 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 OPTIONS AND WARRANTS
On May 27, 2000 the Company adopted a Year 2000 Non-Qualified Stock Option
Plan for its employees, directors and consultants (the "Plan"). The Plan
provides for the issuance of options for the purchase of up to 1,000,000 common
shares of the Company by officers, direcotrs or consultants to the Company.
Pursuant to to the plan, the Company issued 500,000 to officers and
consultants with an exercise price of $0.02 per shares. The options will expire
May 27, 2002. As of June 30, 2000, no options have been exercised.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Form 10-QSB. Txon
International Development Corporation (the "Company") is considered a
development stage company with minimal assets or capital and with no significant
operations or income since its inception. It is anticipated that the Company
will require only nominal capital to maintain the corporate viability of the
Company and necessary funds will most likely be provided by the Company's
officers and directors in the immediate future. However, unless the Company is
able to facilitate a business opportunity or is able to obtain significant
outside financing, there is substantial doubt about its ability to continue as a
going concern. The costs and expenses associated with the preparation and filing
of its registration statement on Form 10-SB have been paid for by an advance
from a shareholder of the Company. It is anticipated that future expenses will
be handled in a similar manner.
Liquidity and Capital Resources
The Company will need additional working capital to finance its planned
activity.
Results of Operations
The Company has had no operations during this reporting period.
Risk Factors and Cautionary Statements
This report contains certain forward-looking statements. The Company wishes to
advise readers that actual results may differ substantially from such
forward-looking statements. Forward- looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: the ability of the Company search for appropriate business
opportunities to meet its cash and working capital needs, the ability of the
Company to maintain its existence as a viable entity, and other risks detailed
in the Company's periodic report filings with the Securities and Exchange
Commission.
<PAGE>
PART II
Item 1. Legal Proceedings
There are presently no material pending legal proceedings to which the Company
is a party to, to the best of its knowledge, no such actions against the Company
are contemplated or threatened.
Item 2. Changes In Securities and Use of Proceeds
This Item is not applicable to the Company at this time.
Item 3. Defaults Upon Senior Securities
This Item is not applicable to the Company at this time.
Item 4. Submission of Matters to a Vote of Security Holders
This Item is not applicable to the Company at this time.
Item 5. Other Information
This Item is not applicable to the Company.
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included as part of this report:
Exhibit
Number Exhibit
--------------------------------------------------------------------------------
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
1.1 Year 2000 Non-qualified Stock Option Plan(2)
27.1 Financial Data Schedule
(1) Incorporated by reference to the Registrant's registration statement on
Form 10-SB filed on December 30,1999.
(2) Incorporated by reference to the Registrant's registration statement on
Form S-8 filed on July 19, 2000.
(b) The Company filed a report on Form 8-K on June 26, 2000 to
report a change in control of the company effective June 5,
2000.
<PAGE>
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.
TXON INTERNATIONAL DEVELOPMENT CORPORATION
[Registrant]
Date: August 7, 2000 By: /s/ Richard Ford
Richard Ford, President and Director
(Principal Executive & Financial Officer)
