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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION ---------------------------
Washington, D.C. 20549 OMB Number:3235-0420
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FORM 10-KSB ---------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
[ ] TRANSACTION REPORT UNDER SECTION 13 OR 15(D)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___to___
Commission file number: 0-15347
XPEDIAN, INC.
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(Name of small business issuer in its charter)
FLORIDA 59-2720096
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(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
6230 Fairview Road, Suite 102, Charlotte, North Carolina 28210
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (704) 364-2066
Securities registered under Section 12(b) of the Exchange Act: None
Title of each class: NONE Name of each exchange on which registered: None
Securities registered under Section 12(g) of the Act:
Common Stock, par value of $.0001 per share
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(Title of class)
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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The issuer had no revenues for the fiscal year ended June 30, 2000.
The aggregate market value of the voting stock held by non-affiliates of the
issuer as of September 30, 2000, was approximately $4,791,245 based on the
closing sales price of the issuer's common stock on the OTCBB (the OTC Bulletin
Board(R)) of $.25 on September 29, 2000.
The number of shares of common stock of the issuer outstanding as of
September 29, 2000, was 36,924,969 shares.
<PAGE>
XPEDIAN, INC.
FISCAL YEAR ENDED JUNE 30, 2000 ANNUAL REPORT ON FORM 10-KSB
TABLE OF CONTENTS
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PART I PAGE
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ITEM 1. Description of Business 4
ITEM 2. Description of Property 9
ITEM 3. Legal Proceedings 9
ITEM 4. Submission of Matters to a Vote of Security Holders 11
PART II
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ITEM 5. Market for Common Equity and Related Stockholder Matters 11
ITEM 6. Management's Discussion and Analysis or Plan of Operation 12
ITEM 7. Financial Statements 20
ITEM 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 20
PART III
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ITEM 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 20
ITEM 10. Executive Compensation 22
ITEM 11. Security Ownership of Certain Beneficial Owners and
Management 24
ITEM 12. Certain Relationships and Related Transactions 26
ITEM 13. Exhibits, List and Reports on Form 8-K 26
<PAGE>
FORWARD-LOOKING STATEMENTS.
This Annual Report on Form 10-KSB contains forward-looking statements
concerning, among other things, Xpedian, Inc.'s expected future revenues,
operations and expenditures, competitors or potential competitors, and licensing
and distribution activity. These forward-looking statements are identified by
the use of terms and phrases such as "anticipate", "believe", "could",
"estimate", "expect", "intend", "may", "will", "plan", "predict", "potential",
and similar terms and phrases, including references to assumptions. These
statements are contained in each part of this report and in the documents
incorporated by reference. These forward-looking statements represent the
expectations of management as of the filing date of this report. Actual results
could differ materially from those anticipated by the forward-looking statements
due to a number of factors, including:
(i) limited operating history;
(ii) need for financing;
(iii) dependence upon a single employee;
(iv) reliance upon a single license;
(v) compliance with law;
(vi) lack of sales;
(vii) reliance of revenue growth on economic conditions;
(viii) competition;
(ix) control by majority shareholder;
(x) absence of dividends;
(xi) changes in federal estate taxation;
(xii) government regulation of the Internet; and,
(xiii) the other risks and uncertainties described under the caption,
"FACTORS AFFECTING FUTURE OPERATING RESULTS" under Item 6.
Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Xpedian is under no obligation to revise or publicly release the results of any
revision to these forward-looking statements. Readers should carefully review
the risk factors described in other documents we file from time to time with the
Securities and Exchange Commission, including the Quarterly Reports on Form
10-QSB to be filed by us in the future.
PART 1
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Xpedian, Inc. ("Xpedian"), a Florida corporation, is currently engaged in
acquiring businesses focused on Internet and wireless technologies.
RECENT DEVELOPMENTS
On August 2, 1999, Xpedian consummated a licensing arrangement (the "License")
with Commerce Capital Group, L.L.C., a South Carolina limited liability company
("CCG") to market and sell CCG's proprietary "Personal Estate Plan (tm)" (the
"PEP")(tm), which allows professional and individual users to conduct estate
planning and financial planning through use of the Internet. Under the License,
our initial geographic territory is limited to Florida, although we have the
option to expand our territory into Alabama, Georgia, Mississippi, and Tennessee
by paying additional license fees in the form of shares of our common stock. We
paid CCG a license fee of 21 million shares of our unregistered common stock.
Pursuant to the License, we were given:
(i) the right to market the PEP system to accountants, stock brokers,
insurance companies and brokers, lawyers, investment advisors,
financial planners, and human resource departments;
(ii) the non-exclusive right to use the logos and names related to the PEP
system, which will be provided by CCG, including Personal Estate Plan
(tm), InsTrust (tm), and ELS (tm);
(iii) the right to obtain any current and future amendments, of sales, usage,
limited technical, instructional and similar documentation and
literature relating to the PEP (tm) system; and
(iv) the right to receive any income generated from customers who sign-up
and use the PEP (tm) system.
On August 2, 1999, we changed our corporate headquarters to 6230 Fairview Road,
Suite 102, Charlotte, North Carolina 28210 and changed our telephone number to
(704) 364-2066. By the end of the September 30, 1999 quarter, the following
officers and directors had been appointed: (i) Dale K. Chapman, as President,
Secretary, Treasurer and Director; (ii) Eric F. Heintschel, as Director; and
(iii) James H. Feeney, as Director. James F. Kelly was appointed as Director on
February 11, 2000. No additional officers or directors were appointed during the
fiscal year ended June 30, 2000.
On January 25, 2000, we received the approval of our majority shareholder to
formally change our name to Xpedian, Inc. After verifying with legal counsel
that all required procedures had been followed, we formally changed our name to
Xpedian, Inc., and initiated processes necessary to change our ticker symbol to
XPDN.
<PAGE>
On November 21, 1999, we completed a marketing agreement (the "Agreement) with
MCC Companies, a Florida based insurance wholesaler ("MCC"). According to the
Agreement, MCC will vigorously promote our estate planning products to its
national distribution network of over 18,000 independent insurance brokers. MCC
will be responsible for all costs associated with their sales efforts, in
exchange for which they will receive a commission on sales to MCC customers.
In February 2000, we announced our intent to expand Xpedian's stock market
listings to include one of the major European markets. On February 18, 2000, we
signed agreements with a European financial markets consultant to facilitate
this process and to independently analyze, translate and present Xpedian's
business plans to the European markets. Our application for listing was accepted
by the Hamburg Exchange on April 10, 2000, with formal announcement of the
listing following later that day.
On March 28, 2000, we signed agreements with MCC, to purchase SE MCC of Orlando,
Inc. SE MCC of Orlando, Inc. is a full-line health, life, and disability
insurance wholesale brokerage office, which was established in 1999 to service
the Orlando and surrounding region. In support of the Orlando offices continuing
sales growth, and as part of the contract to purchase this office, we negotiated
commission increases, which we believe should improve profitability for future
sales. The Orlando office will also receive all wholesale life insurance
commissions from MCC policies that are generated by, or associated with products
sold through Xpedian's Insurance Trust and Estate Planning operations. As
required by the purchase agreement, 400,000 shares of Xpedian stock were to be
placed in an escrow account to be issued to the recipients in two intervals. Our
transfer agent issued the shares in May 2000, however we found out after June
20, 2000, that the shares had never been appropriately credited to the escrow
account. Our investigation determined that the shares were not present in the
escrow account, even though there were receipts showing delivery. Our transfer
agent is filing the appropriate registrations to cancel the shares and re-issue
them, however, because of the delay in consummating the escrow, the acquisition
of SE MCC of Orlando, Inc. will not be reflected in the year ended June 30,
2000. Instead, the acquisition will be credited to the fiscal year ended June
30, 2001, once all requirements are completed. All financial and earnings
information will be merged at that time.
During March 2000, we acquired $590,000 in funding, through the direct sale of
restricted common stock, to several qualified private investors. According to
the agreements, we issued restricted shares at a 25% discount from the average
share price for the seven days preceding the completion of the agreement. The
investors also received guarantees that the issued shares would be given full
"Piggy-Back" registration rights when we file our next registration statement
with the SEC.
In addition, during March 2000, Xpedian received $250,000 in equity funding when
options issued previously in the year were exercised. The options entitled the
holder to acquire 250,000 shares of Xpedian common stock at a price of one
dollar ($1.00) per share.
On April 5, 2000, we announced the launch and initial registration for our first
product InsTrust.com. InsTrust is the first of several Business-to-Business
(B2B) websites and services that we plan to maintain as part of our business
plan to empower financial services professionals to offer their clients total
financial planning solutions. InsTrust.com is a password-protected site through
which our customers can provide a quick, reliable, low-cost way to provide
insurance trust development and documentation services directly to their
clients, without having to bring in a third party. The InsTrust.com site was
opened for full registration on May 2, 2000.
On April 21, 2000, Xpedian announced the debut of EstatePlanet.com, our premier
B2B estate planning information portal. EstatePlanet.com is intended to provide
a needed resource for information covering all aspects of estate planning, while
also providing information and links to our products. EstatePlanet.com is a
continually expanding information site that currently includes detailed
explanations and demonstrations of a complete array of estate planning
techniques, case sensitive benefit scenarios based upon various consumer
profiles, glossaries of estate planning terminology, financial calculators, and
access to federal and state tax codes and printable forms.
On May 2, 2000, Xpedian announced both the hiring of several experienced
advertising consultants, and announced the kick-off of our first print
advertising campaign. The consultants have thus far designed two advertising
campaigns/concepts. The initial campaign is directly focused at the largest
group of potential "immediate users" of the InsTrust product, insurance agents
and estate planners, with full-page insert advertisements placed in major trade
journals for those groups. These advertisements will continue through several
phases as we fine-tune our marketing programs. The second campaign is designed
to appeal to a broader audience consisting of both financial professionals and
their clients. The use of the broader campaign is intended to coincide with the
expansion of our product lines in the last quarter of 2000.
On May 15, 2000, our Board of Directors approved for our management to pursue
further implementation of our long-term business plan, by seeking the
acquisition of a federally chartered bank. We brought in several banking
consultants to advise us on the acquisition process and regulatory requirements.
These discussions convinced us that our goal of developing banking and trust
related services, would be better approached by utilizing a joint venture
partnership with an existing bank entity. We are currently in discussion with
representatives of several institutions and are continuing to move forward
towards this goal.
<PAGE>
On July 31, 2000, we completed agreements to acquire Global-Vision, Inc., a
privately-held Internet and wireless technology company based in La Jolla, CA.
Global-Vision (see http://www.global-vision.com) has developed several Internet
software systems that can help major companies build new business
infrastructures. In addition to those systems, Global-Vision, Inc. has
significant license agreements for the sale and development of wireless
technology. We believe that those technology agreements, combined with the
proven visionary leadership of Global-Vision management, will provide
opportunities for the development of long-term, profitable revenue streams.
BACKGROUND
Xpedian was originally incorporated in Florida in August 1986 as Triumph
Capital, Inc. ("Triumph"). Triumph was originally engaged in the stock transfer
business. In 1992, Triumph changed its name to IRT Industries, Inc. as part of a
reorganization in which it exchanged a portion of its common stock (2,900,000
shares) for all of the issued and outstanding stock of IRT Industries, Inc.,
which had been incorporated in California on December 13, 1990. Triumph then
merged into IRT Industries, Inc. and reincorporated in the State of Florida.
Until March 1996, IRT Industries, Inc. pursued environmental related businesses.
In March 1996, IRT's management and business strategy changed due to the sale of
the majority of its outstanding shares of common stock. The new management of
IRT sought to acquire interests in casinos throughout Latin America. During 1996
they acquired interests and operating licenses in two casinos in Costa Rica.
In 1998, the management of IRT decided to discontinue its casino operations and
change their business focus to domestic opportunities in the Internet area. This
intent was formally communicated in a Current Report on Form 8-K filed on
September 1, 1998. The Casino Bahia was sold in May, 1998, for a sales price of
$150,000. The Casino Amon was sold in February, 1999, for a sales price of
$85,000 of which $67,500 was paid and the balance of $17,500 is currently
overdue. We have reviewed our collection options and have determined that it is
highly unlikely that the remaining $17,500 will be collected, and that any
effort to do so will involve significant legal and personnel expense. We
therefore charged-off $17,500 as uncollectable, but will continue to
review the matter in case some new development arises.
STRATEGIC FOCUS
Through our existing estate planning business, Xpedian seeks to provide an
interactive approach to estate and financial planning for financial services
professionals and advisers. To date, individuals seeking to obtain estate or
other related financial plans have been required to go to a number of different
advisers and service providers in order to complete the design and execution of
their plans. We expect that our interactive systems will streamline fact
gathering, information storage, design and documentation for professional and
individual users thereby allowing brokerage firms, certified public accountants,
attorneys and other financial advisers to provide "one-stop", value-added,
on-line financial planning products and services to their clients.
Our new subsidiary, Global-Vision, Inc. will continue the development and
marketing of existing Global-Vision systems, but will focus the majority of
their attention on the development of wireless systems and technologies. We
expect that Global-Vision's existing software systems will significantly
increase the efficiency with which users design, implement, and manage computer
and Internet driven workflow systems. Global-Vision also plans to utilize
existing wireless technology licenses to develop and market wireless technology
systems and wireless devices to the United States and European markets.
THE PERSONAL ESTATE PLAN (TM) SYSTEM
The Personal Estate Plan (TM) system is primarily composed of a
transaction-based web site that is powered by an advanced database that uses
relational, experiential, associative reasoning through an Interactive
Interviewer (tm) and database coupled with its Electronic Law Scribe function
(the "ELS (TM)"), which is a document generation program. The Personal Estate
Plan (TM) package supports the user from data gathering to document production.
A new user begins by accessing the database and entering information into the
PEP (tm) system. Once a user has responded to system's menu of questions and/or
inquiries that provide the PEP (tm) system with the user's estate planning
objectives, the PEP (tm) system is expected to generate additional inquiries
based upon the user's responses. After the additional information provided by
the user is analyzed, the PEP (tm) system is expected to initiate a search of
propriety reference tables in the database to review existing federal and state
laws and regulations against the information entered by the user. After its
search has been completed, the PEP (tm) system is expected to generate a result
query that both confirms it has searched all available estate planning variables
and produces a proposed plan and set of documents that, based upon the search,
are designed to meet the user's estate planning objectives. Once the user has
reviewed and confirmed its approval of the proposed estate plan, the user can
request production and delivery of the proposed estate plan from the PEP (TM)
system. The proposed estate plan and related documents are then assembled and
delivered to the user via overnight delivery.
<PAGE>
Our plan for marketing the Personal Estate Plan (tm) system contains several
components that we plan to phase in over the fiscal year 2000 and 2001. These
components include:
(i) Website Creation;
(ii) Insurance Trust Module;
(iii) Full Estate Planning; and
(iv) Other Products and Services.
PHASE I. WEBSITE CREATION (Completed)
During Phase I, both Xpedian and CCG established websites to provide users with
access to our system and to the PEP (TM) system.
During the fiscal year ended June 30, 2000, Xpedian established both a corporate
site "FL.Xpedian.com" and, in cooperation with CCG, a marketing site
"EstatePlanet.com". The Xpedian.com website is intended to provide potential
investors and customers with detailed information about Xpedian and our
available products and services. The EstatePlanet.com website was created to
provide a critical link between Xpedian, our clients (financial professionals)
and the public. Using EstatePlanet.com, we intend to provide both financial
professionals and their potential clients with a huge selection and variety of
financial planning information and tools, that before EstatePlanet.com were
not available at one location anywhere else on the net. EstatePlanet.com is also
designed to provide registration services for interested financial
professionals, to function as a referral service for member professionals and to
act as a portal through which customers can access our products and services.
PHASE II. INSURANCE TRUST PRODUCT (Completed)
In the final quarter of the fiscal year ended June 30, 2000, the Insurance Trust
Module ("InsTrust") became available for Xpedian to begin active marketing. The
InsTrust product is actually a module of the larger PEP (tm) system. We expect
that use of the Insurance Trust module will allow users to quickly and
efficiently produce the plan and documentation necessary to implement insurance
trusts. We also expect that advertising and marketing efforts
expended on this interim product will begin the process of building interest and
name-brand recognition for Xpedian and EstatePlanet.com. Thus aiding us in the
roll-out and presentation of the full PEP (tm) product, when it comes on line.
PHASE III. FULL ESTATE PLANNING PRODUCT (Scheduled October 16, 2000)
During Phase III, both CCG and Xpedian have focused our developmental efforts on
completing any remaining system/website programming and testing, while at the
same time finalizing advertising, marketing materials, and sales programs, all
in preparation of full estate plan roll-out. With the full PEP (tm) system, we
expect to provide full estate planning services to our clients, from data
collection to documentation. We also plan to provide users of the previous
Insurance Trust products with automatic upgrades enabling them to complete the
remainder of their estate plan documents at little or no additional charge.
PHASE IV. OTHER PRODUCTS AND SERVICES
Once Xpedian has introduced the PEP (tm) system and its component modules to the
market, we plan to work with CCG to expand the products and services available
through the license agreement. In conjunction with our announcements regarding
bank services, we are currently focusing on creating a joint venture to develop
and provide trust management services to our existing and future client base. We
believe that such services are an excellent match for our existing product
lines, and that such services have the potential for significant long-term
revenue streams.
GLOBAL-VISION, INC.
Global-Vision, Inc. will continue to operate as a separate company with its
central efforts revolving around existing systems and wireless technology. They
expect to market the existing workflow and web design system, "Silverado" to
consulting firms and large corporations that need tools to redesign and manage
their computer based workflow systems. The Silverado system contains unique
features that should enable users to significantly reduce the time and effort
required to design and implement both intranet and Internet based workflow
systems. Revenue from Silverado sales are expected to be generated from up-front
implementation charges and ongoing user license fees.
In the wireless area, Global-Vision is already in possession of a license for
the sale of existing wireless technology and systems. They plan to implement
versions of these licensed systems in the United States and Europe though
joint-venture partnerships with the impacted companies. In addition to existing
systems, Global-Vision plans to continue to develop new wireless tools and
technologies by utilizing the proven developmental skills of Global-Vision
management, in partnership with large technology companies that can benefit from
the innovations and that have the production and marketing power necessary to
quickly get products to market.
Overall, Xpedian will continue to pursue development opportunities that are
outside of our license agreement with CCG and the stated goals of Global-Vision,
as long as those opportunities are complementary to our business plan.
<PAGE>
SALES AND MARKETING
Xpedian's sales and marketing efforts for our Internet business are still in the
developmental stages, and we have yet to have significant sales. We have
identified our target market for our products as including certified public
accountants, insurance agents, stockbrokers, financial planners, lawyers, and
human resource departments. When they arrive at our website, each potential user
will be asked to complete a customer qualification/application form, so that we
can ensure that such users satisfy our educational, licensing and other
criteria. Once the user completes the application process and has been approved
by us, they will be provided with access to our website and the PEP (tm)
system.
With the completion of Phase II, we began advertising and marketing efforts
aimed specifically at licensed insurance agents and financial planners in the
Florida area. These efforts have thus far included print media advertising,
trade-show participation, and direct sales by representatives in the Florida
Region.
Upon completion of Phase III, we expect to expand our sales focus to include the
main groups of financial professionals that have need for the full estate
planning product. These include: certified public accountants, insurance agents,
stockbrokers, financial planners, lawyers, and human resource departments. The
Company expects to further focus its direct person-to-person sales efforts on
state, regional, and national financial service corporations, which are
headquartered in Florida.
During Phase IV, we plan to expand our territory into additional states outside
of Florida. Pursuant to the License Agreement, we have an option to expand our
territory to the states of Alabama, Georgia, Mississippi, and Tennessee. We are
currently in negotiation with the licensor (CCG) to change the contractual
relationship between the two companies so that they can better support each
other in the future. These negotiations are centered on our changing from a
limited licensor, into a joint-venture partner.
To the extent that sales personnel are needed, we intend to develop a sales
force comprised of both contract and permanent sales professionals. To date we
have entered into sales agreements with MCC Companies of Tampa, Florida and have
contracted with consultants to help us develop and manage a Florida sales-force.
We plan to hire sales and administrative personnel from time to time as our
needs arise.
COMPETITION
We are not aware of any direct Internet based competitors for our full-process
estate planning products. However, providers of financial services including
certified public accountants, insurance agents, stockbrokers, financial
planners, lawyers, and professionals in related industries may seek to develop
similar software programs and databases and to establish web sites which offer
same "full-process" estate planning (i.e., data collection through
documentation) directly to the user.
There are competitors within the workflow system market such as Versa.com and
Pegasus.com in which Global-Vision's Silverado system will be marketed. We are
not aware of any direct competitor that has a product with the same price point
and with ability and combination of features that is contained in the Silverado
system. However, existing software providers may seek to develop similar systems
and market them in competition with Global-Vision.
EMPLOYEES
As of September 30, 2000, Xpedian had four full-time employees. Dale K.
Chapman, who serves as our President, Chief Executive Officer, Secretary and
Treasurer, is currently the only officer. Our employees are not represented by a
labor union. We believe that our employee relations are satisfactory.
ITEM 2. DESCRIPTION OF PROPERTY
As of the August 12, 1999, we relocated our principal executive offices to 6230
Fairview Road, Suite 102, Charlotte, North Carolina. This office space is in
good condition and is leased for two years, with termination on August 12, 2001.
The leased space covers approximately 800 square feet. The annual rent is
$11,900.
ITEM 3. LEGAL PROCEEDINGS.
On November 16, 1994, Morton I. Singerman obtained an amended final judgment
against the defendants in the following action, Morton Singerman v. Triumph
Financial Corp., IRT Industries, Inc. et al., Defendants, Case #90-27018-20, in
the Circuit Court of the 17th Judicial Circuit, Broward County, Florida. The
judgment was issued against the defendants, including our predecessor Triumph
Capital, Inc., Triumph Financial Corp. and Stephen Telsey and was in the
original amount of $22,173 plus interest. During the last quarter of 1999, all
amounts owed Morton I. Singerman were paid in full and all claims against
Xpedian have been released.
On March 21, 1997, we filed a complaint against International Corporation, K&Z,
S.A, in IRT Industries, Inc. v. International Corporation, K&Z, S.A., a Costa
Rican corporation; Securities Transfer Corporation, a Texas corporation; Ron
Rafael Zavalla Tasies; and Pacific International Securities, Inc., a Canadian
corporation, Defendants, Case #97-4323, in the Circuit Court of the 17th
<PAGE>
Judicial Circuit, Broward County, Florida. In the complaint, we allege that the
defendants breached an agreement to sell a license to operate a casino in San
Jose, Costa Rica. As consideration for the license, the defendants issued a
promissory note for $ 595,000, while simultaneously purchasing 2,400,000 shares
of our common stock. As security for the validity of the license, the defendants
pledged a certain number of shares of our common stock and agreed not to
transfer the shares until the validity of the license could be confirmed.
However, one of the co-defendants, Tasies, attempted to transfer his shares. We
then placed a stop-transfer order on the defendant's shares. Tasies subsequently
filed a counterclaim against us alleging that we improperly caused a
stop-transfer order to be placed on his shares of our common stock. Tasies is
seeking damages in excess of $300,000. We believe that the counter-claim has no
merit. However, if the counter-claim were to be adjudicated against Xpedian,
there can be no assurance that the outcome would not have a material adverse
effect on our liquidity, financial position, or results of operations.
On January 12, 1998, Jose Humberto Brenes filed a complaint against us in Jose
Humberto Brenes v. IRT Industries, Inc., Case #97-0102510-18, in the 17th
Judicial Circuit, Broward County, Florida. In the complaint, the plaintiff
alleges that IRT Industries, Inc. defaulted on its obligation to make payments
due under a guarantee. The plaintiff seeks damages of approximately $119,000.
The plaintiff voluntarily dismissed the action on November 4, 1998, indicating
that he intended to re-file the action seek to collect the alleged damages
unless the parties can reach a settlement. The plaintiff re-filed the complaint
and received a default judgment against Xpedian. The default judgment was later
vacated because we were not properly notified of the plaintiff's filing. Xpedian
and the Plaintiff entered into court ordered mediation and on September 19,
2000, signed an agreement to settle the matter. As part of the settlement
agreement, we agreed to pay the Plaintiff $80,000 in payments between September
30, 2000, and December 31, 2000. However, should we be unable to make these
payments, there can be no assurance that the outcome would not have a material
adverse effect on our liquidity, financial position, or results of operations.
On November 2, 1998, Jose Humberto Brenes-Jenkins (also known as Jose Humberto
Brenes), as a shareholder, and on behalf of IRT Industries Inc., filed a
complaint against Richard R. Rossi in Jose Humberto Brenes-Jenkins, as a
Shareholder and in the right of IRT Industries, Inc. v. Richard R. Rossi, Case
#98-9852 AI in the Circuit Court of the 15th Judicial Circuit, Palm Beach
County, Florida. In the complaint, the plaintiff alleged that Richard R. Rossi,
the then President and Director of IRT had breached his fiduciary duty by
causing us to enter into certain stock purchase transactions with entities
controlled by him resulting in losses to us. The complaint alleged damages of
$550,000. On April 30, 1999, the Court granted the plaintiff's motion for a
final default judgment in our favor and ordered the defendant to pay damages in
the amount of $695,712 (including a principal sum of $ 550,000 plus prejudgment
interest for $145,712). In October 1999, we were informed that prior to his
resignation, our former President, Mr. Arnold Wrobel, signed a directors
resolution releasing Mr. Rossi from all liability for actions that he took while
working for us. Neither the complaint, the judgment, nor the release of
liability, were disclosed to CCG or to current management until the matter was
brought to our attention by the original plaintiff's attorney. We are
investigating what, if any actions can be taken to collect this judgment.
However, there can be no assurance that we will be able to collect the damages
awarded from the defendant.
On November 25, 1998, our management at that time voluntarily entered into a
Consent to Entry of Judgment of Permanent Injunction and Other Relief in
connection with In the Matter of IRT Industries, Inc., Securities and Exchange
Commission ("SEC") File No. A-1605, pursuant to which the SEC has the right to
present to the United States District Court, Southern District of Florida (Miami
Division) a Final Judgment without further notice to us. The proposed Final
Judgment restrains and enjoins us from committing fraud in violation of Section
17(a) of the Securities Act of 1933, as amended or Section 10(b) of the
Securities Exchange Act of 1934 as amended and Rule 10-5. In the event that we
fail to comply with the terms of the Final Judgment, the SEC will be able to
petition the Court to assess civil penalties against us.
On February 10, 1999, Oscar Hammond filed a complaint against IRT Industries,
Inc. in Oscar Hammond v. IRT Industries, Inc.; D.L. Cromwell Investments, Inc.;
Rossi & Associates, Attorneys, P.A.; Texas Capital Securities; Brad Nirenberg,
Individually; and Robert Brook, Individually, Case # 99001496AG in the Circuit
Court of the 15th Judicial Circuit, Palm Beach County, Florida Civil Division.
In the complaint, the plaintiff alleged the defendants made various
misrepresentations and fraudulent statements to him thereby inducing him to
purchase our shares of common stock at a cost of approximately $100,000, which
shares subsequently decreased in value. The complaint seeks to rescind the sale
of the common stock or alternatively, damages of up to $100,000. We believe that
the complaint has no merit and we intend to vigorously defend the action.
However, if the action were to be adjudicated against us, there can be no
assurance that the outcome would not have a material adverse effect on our
liquidity, financial position, or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
<PAGE>
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Xpedian's common stock is traded on the OTCBB (trading-symbol: XPDN). At
September 30, 2000, we had approximately 1000 stockholders of record according
to the records of our transfer agent, Securities Transfer Corporation. Because,
in many cases, brokers and other institutions hold shares on behalf of
stockholders, we are unable to estimate the total number of stockholders
represented by these record holders.
The following table sets forth the high and low bid prices of common stock for
each of the last eight fiscal quarters, as reported by IDD Information Services,
Tradeline(R). The quotations reflect inter-dealer prices, without retail
mark-ups, mark-downs or commission, and may not necessarily represent actual
transactions.
RANGE OF BIDS FOR THE COMMON STOCK
FISCAL 2000 HIGH LOW
First Quarter (July, August, September) $ .56 $ .47
Second Quarter (October, November, December) $ .32 $ .29
Third Quarter (January, February, March) $ 1.65 $ 1.44
Fourth Quarter (April, May, June) $ .65 $ .45
FISCAL 1999
First Quarter (July, August, September) $ .39 $ .06
Second Quarter (October, November, December) $ .41 $ .05
Third Quarter (January, February, March) $ 2.56 $ .13
Fourth Quarter (April, May, June) $ 3.13 $ .19
To date, we have not paid any dividends on our common stock and we do not expect
to pay any dividends in the near future. Instead, we intend to retain all
earnings to finance the growth and development of our business.
In March 2000, Xpedian offered for sale to qualified investors up to 870,000
shares of its common stock under a private placement to qualified investors,
pursuant to an exemption available under the Securities Act of 1933. Under this
offering, 869,117 shares were issued at a price of $.68, generating gross
proceeds of approximately $591,000, with commissions being paid of approximately
$59,000.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
The following discussion and analysis provides information, management believes
is relevant to an assessment and understanding of our results of operations and
financial condition. This discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere herein.
GENERAL
Near the end of fiscal year 1998, our former management changed our focus from
owning and operating casinos and related activities, to focus on domestic
opportunities in the Internet area. Subsequently, in 1998 and 1999, they
discontinued operations in the casino and related activities, and began an
active search for domestic Internet opportunities. They sold the final remaining
casino operation in February 1999. In April 1999, they made an unsuccessful
attempt to purchase ThinkBid.com, the Internet Auction site. On August 2, 1999,
former management completed negotiations with Commerce Capital Group, L.L.C.
("CCG") for the right to license and market CCG's emerging line of
Internet-based financial services products. During the year ended June 30, 1999,
we had both operating revenues and operating businesses. The financial
statements for that year reflect those revenues; however they also reflect the
decision to discontinue gaming operations. Thus the financial statements for the
year ended June 30, 1999, contain the remainder of the losses and provisions for
losses incurred as the result of the decision to discontinue gaming operations,
as reflected herein in the Consolidated Statements of Loss on "Discontinued
Operations". During the year ended June 30, 1999, we had some operating
businesses and revenues from gaming operations that we completed divestment of
in February 1999. The financial information for fiscal year 1999 and statements
provided herein reflect the operations of the discontinued casino operations.
All revenue and expenditure information discussed herein is reflected in the
Consolidated Statements of Loss as "Discontinued Operations". As will be seen in
our financials and in the analysis listed below, the 1998 charge-off caused a
significant decrease in losses when comparing 1998 and 1999, but had little
effect when comparing 1999 and 2000.
RESULTS OF OPERATIONS
Year Ended June 30, 2000 Compared to Year Ended June 30, 1999
Net Revenues for both years remained at zero. Revenue collected during 1999 was
credited to the subsidiaries that generated the revenues. When consolidated for
our financial reporting, these revenues were offset by the losses posted due to
final discontinuation of casino operations. There were no subsidiaries during
2000.
<PAGE>
Expenses increased by 185.6 % in last fiscal year, going from $993,241 in the
year ended June 30, 1999 to $2,837,092 in the year ended June 30, 2000. This
increase is due to the lack of activity during 1999 and an increase in activity
in 2000 due to the signing of our license agreement with CCG on August 2, 1999.
During the 1999 fiscal year, we were divesting our casino operations and had no
other operations. There was thus only a minimal need for consultants and
professional administrative services. In fiscal year 2000, that need increased
significantly as we began planning and implementing the steps necessary to
exploit our license with CCG. Other Income increased by 9.3% from $48,915 in the
fiscal year ended June 30, 1999 to $53,468 in the fiscal year ended June 30,
2000. Interest income decreased by 93.3% from $71,415 in the fiscal year ended
June 30, 1999 as compared to $4,745 in the fiscal year ended June 30, 2000.
Losses posted due to Continuing Operations increased by 185.6% in the last
fiscal year, going from $993,241 in the fiscal year ended June 30, 2000 to
$2,837,092 in the fiscal year ended June 30, 2000. Like the increase in
expenses, the increase in operational losses is largely attributed to increased
activity and expenses brought on by our efforts to implement the license
agreement with Commerce Capital Group, LLC. Due to delays in initial product
delivery until May 2000, we were unable to generate significant revenues during
the fiscal year ended June 30, 2000, and thus were unable to offset our
increased operational costs. We experienced a net loss of $2,754,300 for the
year ended June 30, 2000. Compared to the loss of $956,736 in the year ended
June 30, 1999, this represents a 188% increase in net loss. The difference in
losses between 1999 and 2000 is almost entirely made up of professional and
consultant fees.
Our financial resources were extremely limited during 2000. As a result,
whenever possible, we negotiated contracts with professionals and consultants to
provide the services that we needed in exchange for stock. Please note that a
third of the stock paid for consultants fees (1.6 million shares), was paid in
an S-8 registration filed by former management three days before the signing
of our license agreement with CCG. The approximate net loss at this point was
$833,400, or about 30% of our entire loss for the year. None of those shares
went to provide services to Xpedian during the remainder of the year. Net loss
per share (basic and diluted) decreased by 18.1% in the last fiscal year, going
from $.11 in the fiscal year ended June 30, 1999, to $.09 in the year ended June
30, 2000. As our net loss reported above indicates, this decrease is not due to
a decrease in Net Losses. Rather, the drop in net loss per share is attributed
to the significant increase in shares issued during the fiscal year ended June
30, 2000, due to our license agreement with CCG and our use of stock in payment
for services. Had the shares not increased during fiscal 2000, there would have
been a 294 % increase in loss per share, from $.11 to $.33. Beyond that point
the trend is very difficult to analyze because, had the license agreement and
the resulting share issuance not occurred, we would not have needed the
consulting and professional services that caused the loss in the first place.
Liquidity and Capital Resources
As of June 30, 2000, cash and cash equivalents were $59,261 as compared with
$1,904 at June 30, 1999. The increase is due to our acquiring $840,000 in
capital through the sale of stock and the exercising of warrants issued to a
consultant. The increase is not due to revenue. We will continue to incur
operating losses until we achieve full launch of the PEP (tm) system and have
achieved some level of penetration into our target markets. We had working
capital of $168,670 as of June 30, 2000. This is a dramatic increase over the
working capital deficit of ($144,714) as of June 30, 1999.
Inflation and Seasonality
The rate of inflation was insignificant during the year ended June 30, 2000. The
Company's business is not expected to be seasonal.
FACTORS AFFECTING FUTURE OPERATING RESULTS
Xpedian operates in a rapidly changing environment that involves numerous risks,
some of which are beyond our control. The following discussion highlights some
of these risks:
Limited Operating History
Since management changed our strategic focus in 1998 to the proposed acquisition
and development of Internet-based domestic businesses, we have yet to generate
significant revenues from operations. With the launch of the InsTrust product in
May 2000, we began marketing efforts but have not had time to educate our target
audience and penetrate the market to the extent necessary. We will be required
to incur significant marketing expenses, including advertising and promotion
expenses, to launch new products and achieve penetration and usage. There can be
no assurance that our products will be given sufficient consumer acceptance at
their intended price range or any other price range to enable us to generate
significant revenues or to operate profitably.
<PAGE>
Need for Financing
We will have to raise funds in order to facilitate our business strategy. As we
are not presently generating significant revenues, we will have to raise funds
from outside sources to fund our developmental and working capital needs, and we
may need to raise funds in order to respond to unanticipated competitive
pressures. In addition, if we experience rapid growth, we may require additional
funds to expand our operations or to enlarge our organization and increase our
personnel. There can be no assurance that we will be able to obtain financing on
favorable terms or that additional financing will be available, if at all. If
adequate funds are not available or are not available on favorable terms, we may
not be able to support our developmental and day-to-day activities, or otherwise
respond to unanticipated competitive pressures. Such inability to obtain
financing could have a material adverse effect on our business, financial
condition or results of operations and could require us to materially reduce,
suspend or cease operations.
Dependence upon a Single Officer
The success of Xpedian depends upon the continued employment of its single
officer level employee and upon our ability to support that officer. If we lose
the services of this officer and are unable to find a suitable replacement, or
if we are unable to provide the support necessary for him to function
effectively, our business could be adversely affected.
Reliance Upon a Single License
Xpedian's Internet based estate planning products are based upon proprietary
software that the licensor has granted to us under a license. The license grants
the right to market the software in a specific territory that may be expanded in
the future. There can be no assurance that the proprietary nature of the
software will not be infringed upon or that others will not try to reproduce the
software. Furthermore, there can be no assurance that the license will afford
protection against possible competitors who might seek to market their products
in the same territory and to the same customers. In the event that the licensor
terminates the license (which it may do under circumstances including a material
breach of the terms of the license), the termination could have a material
adverse effect on our business.
Compliance with Law
We will attempt to comply with laws and regulations applicable to our planned
business. In this early stage of our business, we intend to investigate the laws
and regulations of relevant jurisdictions, particularly the question of whether
any aspect of the business would constitute the unauthorized practice of law.
Based upon the experience and representations of CCG, we believe that the
PEP (tm) system would not constitute the unauthorized practice of law within the
states where we may do business. In the event it were determined that this
business does constitute the unauthorized practice of law, Xpedian could be
subjected to investigations, lawsuits, expenses and risks that could severely
and adversely affect operations.
Marketing; Sales
We have targeted potential customer groups for our proposed Internet-based
estate planning products including certified public accountants, insurance
agents, stockbrokers, financial planners, lawyers, and professionals in human
resources. There can be no assurance that we will be successful in marketing and
selling our proposed products to such potential customers or in generating
revenues from such sales. Furthermore there can be no assurance that our
proposed products will achieve significant market acceptance or will generate
significant revenue. Additional products that we plan to directly or indirectly
market in the future are in various stages of development.
Revenue Growth and Economic Conditions
The revenue growth and profitability of our proposed Internet-based estate
planning products, depends on the overall demand for estate-planning services.
Because our potential customers are primarily professional and financial
services advisers, our business also depends on general economic conditions. A
softening of the demand for estate planning services from professional and
financial services advisers caused by a weakening of the economy may result in
lack of revenues or lack of growth.
Competition
Although we are not aware of any direct competitors to our Internet-based
estate-planning products, there can be no assurance that providers of financial
services including certified public accountants, insurance agents, stockbrokers,
financial planners, lawyers, and professionals in human resources and related
fields will not seek to develop similar products. Moreover, we are aware of
numerous personal computer products providing some but not all of the features
and benefits of our web-based estate planning product. Providers of financial
services including certified public accountants, insurance agents,
stockbrokers, financial planners, lawyers, and professionals in related
industries may also seek to develop similar software programs and databases and
to establish web sites which offer same "full-process" estate-planning (i.e.,
data collection through documentation) directly to the user.
There are competitors within the workflow system market in which Global-Vision's
Silverado system will be marketed. We are not aware of any direct competitor
that has a product with ability and combination of features that is contained in
the Silverado system. However, existing software providers may seek to develop
similar systems and market them in competition with Global-Vision.
Control by Majority Shareholder
The licensor of the Internet-based estate-planning product, Commerce Capital
Group, L.L.C. ("CCG"), owns approximately 50% of our common stock. Although
CCG does not presently have a representative appointed as an officer or
director, there can be no assurance that CCG, based upon its majority ownership,
would not seek to elect all our directors and/or replace our officers and to
determine the results of all matters submitted to the stockholders for action
including fundamental corporate transactions.
Absence of Dividends
We do not expect to declare or pay any dividends in the foreseeable future, but
instead intend to retain earnings, if any, to expand operations.
Changes in Federal Estate Taxation
Legislation has been proposed in U.S. Congress to phase out the federal estate
tax over a number of years. While the prospects of such legislation are
uncertain, should the legislation become law, the PEP (TM) product could become
of limited usefulness and we could be materially and adversely affected.
Traditional planning would be unaffected, including guardian appointment for
minor children, probate avoidance, appointing personal representatives such as
executors, attorneys-in-fact, trustee, etc. and distribution of property by
personal directive.
Government Regulation of the Internet
Due to the increased use of the Internet by individuals and businesses, it is
possible that federal or state laws or regulations governing the use of the
Internet may be adopted, with respect to privacy, pricing, characteristics of
products or services and taxation. We cannot predict the impact, if any, that
future laws or regulations or legal or regulatory changes may have on our
estate planning or wireless businesses.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
The financial statements of Xpedian in response to this Item are as follows:
XPEDIAN, INC.
FINANCIAL STATEMENTS
June 30, 2000 and 1999
CONTENTS
PAGE
----
INDEPENDENT AUDITOR'S REPORT F-2
FINANCIAL STATEMENTS
Balance Sheets F-3
Statements of Loss F-4
Statements of Cash Flows F-5
Statements of Stockholders' Equity
(Deficiency in Assets) F-6
NOTES TO FINANCIAL STATEMENTS F-7 to F-14
F-1
<PAGE>
Dohan and Company 7700 North Kendall Drive, #204
CERTIFIED PUBLIC ACCOUNTANTS Miami, Florida 33156-7564
A Professional Association Telephone: (305) 274-1366
Facsimile: (305) 274-1368
INDEPENDENT AUDITOR'S REPORT
Stockholders and Board of Directors
Xpedian, Inc.
Charlotte, NC
We have audited the accompanying balance sheets of Xpedian, Inc., as of June 30,
2000 and 1999, and the related statements of loss, cash flows and stockholders'
equity (deficiency in assets) for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Xpedian, Inc. at June 30, 2000
and 1999, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 13 to the
financial statements, the Company has suffered recurring losses from operations
that raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 13. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Dohan and Company, P.A.
Certified Public Accountants
Miami, Florida
September 29, 2000
F-2
<PAGE>
XPEDIAN, INC.
BALANCE SHEETS
June 30, 2000 1999
---------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents ........................ $ 59,261 $ 1,904
Trading securities ............................... 294,888 -
Common stock held in escrow ...................... 30 30
Note receivable - consultant ..................... 76,039 -
Advances to related parties ...................... 40,000 -
Other advances ................................... 7,168 -
Deposit .......................................... 2,773 -
---------- ----------
TOTAL CURRENT ASSETS ........................ 480,159 1,934
PROPERTY AND EQUIPMENT ........................... 34,554 -
SOFTWARE LICENSE ................................. 644,370 -
SECURITY DEPOSITS ................................ 1,935 -
---------- -----------
TOTAL ASSETS ................................ $1,161,018 $ 1,934
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)
CURRENT LIABILITIES
Margin loan .................................. $ 98,094 $ -
Accounts payable ............................. 42,597 35,833
Accrued liabilities .......................... 148,153 46,500
Taxes payable ................................ 3,318 3,318
Due to related parties ....................... 4,000 60,000
Advances from others ......................... - 1,000
Advances from officer ........................ 6,306 -
---------- -----------
TOTAL CURRENT LIABILITIES ............... 302,468 146,651
---------- -----------
COMMITMENTS AND CONTINGENCIES (NOTE 12)
STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)
Common stock; $.001 par value;
100,000,000 shares authorized; 35,875,430
and 8,450,331 issued and outstanding ...... 3,588 845
Additional paid-in capital ................... 12,990,881 9,236,057
Treasury stock ............................... (60) (60)
Deficit ...................................... (12,135,859) (9,381,559)
---------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY
IN ASSETS) ............................ 858,550 (144,717)
---------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIENCY IN ASSETS) ......... $1,161,018 $ 1,934
========== ===========
See accompanying notes.
F-3
<PAGE>
XPEDIAN, INC.
STATEMENTS OF LOSS
For the years ended June 30, 2000 1999
---------- -----------
OPERATING EXPENSES
Advertising .................................. $ 79,324 $ 102,000
Bad debts .................................... - 435,571
Depreciation and amortization ................ 750 -
Office rent .................................. 10,025 -
General and administrative ................... 22,951 5,457
Insurance .................................... 31,123 -
Interest ..................................... 4,222 -
Consulting and professional fees ............. 2,165,810 413,487
Promotion and entertainment .................. 66,903 -
Officers' compensation ....................... 396,850 -
Payroll and related taxes .................... 10,541 -
Travel ....................................... 19,269 14,228
---------- -----------
TOTAL OPERATING EXPENSES ................ 2,807,768 970,743
---------- -----------
OTHER INCOME (LOSS)
Interest income............................... 4,746 71,415
Litigation settlement expense................. (8,500) (22,500)
Forgiveness of debt........................... 60,000 -
Loss on marketable securities................. (2,778) -
---------- -----------
TOTAL OTHER INCOME....................... 53,468 48,915
---------- -----------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAX BENEFITS................. (2,754,300) (921,828)
PROVISION FOR INCOME TAXES.................... - -
---------- -----------
LOSS FROM CONTINUING OPERATIONS,
NET OF INCOME TAX BENEFITS................. (2,754,300) (921,828)
DISCONTINUED OPERATIONS.......................
Loss from operations of discontinued subsidiaries - (116,676)
Gain on disposal of discontinued subsidiary... - 81,768
Income tax benefits........................... - -
---------- -----------
LOSS ON DISCONTINUED OPERATIONS,
NET OF INCOME TAX BENEFITS................. - (34,908)
---------- -----------
NET LOSS...................................... $(2,754,300) $ (956,736)
============ ===========
NET LOSS PER SHARE
--------------------------------------------------------------------------------
Basic from continuing operations.............. $ (0.09) $ (0.11)
Diluted from continuing operations............ $ (0.09) $ (0.11)
--------------------------------------------------------------------------------
Basic from discontinued operations............ $ - $ (0.01)
Diluted from discontinued operations.......... $ - $ (0.01)
--------------------------------------------------------------------------------
Basic......................................... $ (0.09) $ (0.12)
Diluted....................................... $ (0.09) $ (0.12)
--------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic......................................... 31,073,129 8,081,290
Diluted....................................... 31,643,814 8,081,290
================================================================================
See accompanying notes.
F-4
<PAGE>
XPEDIAN, INC.
STATEMENTS OF CASH FLOWS
For the years ended June 30, 2000 1999
------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss .......................................... $(2,754,300) $ (956,736)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization ..................... 750 -
Accrued interest on stock subscription receivable.. - (71,415)
Accrued interest income............................ (1,040) -
Common stock issued for services................... 2,375,633 450,000
Forgiveness of debt................................ (60,000) -
Bad debts.......................................... - 435,571
Net unrealized loss on trading securities.......... 21,306 -
Purchases of trading securities.................... (1,622,382) -
Proceeds from sales of trading securities.......... 1,324,716 -
Realized gain on sale of trading securities........ (18,528) -
(Increase) decrease in assets:
Deposits........................................ (4,708) -
Net current assets of discontinued operations... - 57,821
Increase (decrease) in liabilities:
Accounts payable................................ 6,764 (24,323)
Accrued liabilities............................. 101,653 -
Margin loan to purchase trading securities...... 98,094 -
Net current liabilities of discontinued operations - (34,913)
---------- -----------
NET CASH USED BY OPERATING ACTIVITIES ............. (532,042) (143,995)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Common stock issuance.............................. 737,564 25,000
Loan from stockholder.............................. 9,306 60,000
Due from others.................................... - 1,000
Receipts from subscription receivable.............. - 50,000
---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES ......... 746,870 136,000
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment................. (35,304) -
Advances to related parties........................ (47,167) -
Note receivable to consultant...................... (75,000) -
Proceeds from loan payable......................... 105,000 -
Payments on loan payable........................... (105,000) -
---------- -----------
NET CASH USED BY INVESTING ACTIVITIES ............. (157,471) -
---------- -----------
INCREASE (DECREASE) IN CASH ...................... 57,357 (7,995)
CASH, beginning of year ........................... 1,904 9,899
---------- -----------
CASH, end of year ................................. $ 59,261 $ 1,904
=========== ===========
SUPPLEMENTAL DISCLOSURES
Interest received ................................. $ 3,696 $ -
Interest paid ..................................... $ 4,222 $ -
Income taxes paid.................................. $ - $ -
SUPPLEMENTAL DISCLOSURES OF NON-CASH TRANSACTIONS:
Common stock issued for services................... $ 2,375,633 $ -
Common stock issued for subscriptions receivable... $ - $1,015,269
Common stock issued to acquire software license.... $ 644,370 $ -
=========== ===========
See accompanying notes.
F-5
<PAGE>
XPEDIAN, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)
For the years ended June 30, 2000 and 1999
NUMBER COMMON ADDITIONAL
OF STOCK PAID-IN
DESCRIPTION SHARES AMOUNT CAPITAL
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1998 6,600,331 $ 660 $ 8,761,242
Issuance of common stock for services 1,500,000 150 449,850
Purchase of common stock 350,000 35 24,965
Payments on subscription receivable - - -
Accrued interest on subscription receivable - - -
Allowance of stock subscriptions receivable - - -
Net loss for the year ended June 30, 1999 - - -
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1999 8,450,331 845 9,236,057
Issuance of common stock for services 5,240,451 524 2,375,109
Issuance of common stock for software
license 21,000,000 2,100 642,270
Sale of common stock 1,184,648 119 737,445
Net loss for the year ended June 30, 2000 - - -
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2000 35,875,430 $ 3,588 $12,990,881
================================================================================
TREASURY
DESCRIPTION DEFICIT STOCK
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1998 $(8,424,823) $ (60)
Issuance of common stock for services - -
Purchase of common stock - -
Payments on subscription receivable - -
Accrued interest on subscription receivable - -
Allowance of stock subscriptions receivable - -
Net loss for the year ended June 30, 1999 (956,736) -
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1999 (9,381,559) (60)
Issuance of common stock for services - -
Issuance of common stock for software
license - -
Sale of common stock - -
Net loss for the year ended June 30, 2000 (2,754,300) -
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2000 $(12,135,859) $ (60)
================================================================================
TOTAL
STOCKHOLDERS'
STOCK EQUITY
SUBSCRIPTION (DEFICIENCY
DESCRIPTION RECEIVABLE IN ASSETS)
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1998 $( 414,156) $( 77,137)
Issuance of common stock for services - 450,000
Purchase of common stock - 25,000
Payments on subscription receivable 50,000 50,000
Accrued interest on subscription receivable (71,415) (71,415)
Allowance of stock subscriptions receivable 435,571 435,571
Net loss for the year ended June 30, 1999 - (956,736)
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1999 - (144,717)
Issuance of common stock for services - 2,375,633
Issuance of common stock for software
license - 644,370
Sale of common stock - 737,564
Net loss for the year ended June 30, 2000 (2,754,300)
--------------------------------------------------------------------------------
BALANCE AT JUNE 30, 2000 $ - $ 858,550
================================================================================
See accompanying notes.
F-6
<PAGE>
XPEDIAN, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS ACTIVITY Xpedian, Inc. (Xpedian) was incorporated in Florida in August
1986, as Triumph Capital, Inc. (Triumph). Triumph was originally engaged in the
stock transfer business. In 1992, Triumph changed its name to IRT Industries,
Inc. (IRT) as part of a reorganization in which it exchanged 2,900,000 of its
common stock for all of the issued and outstanding shares of IRT Industries,
Inc., a company incorporated in California on December 13, 1990, pursuing
environmental business opportunities. Triumph then merged into IRT and
reincorporated in the State of Florida. By the end of the fiscal year ended June
30, 1996, IRT had discontinued most of its prior business activities. In March
1996, the management of IRT changed as a result of the sale of a majority of its
outstanding shares of common stock. Under its new management, IRT sought
international casino acquisition opportunities throughout Latin America.
During the fiscal year ended June 30, 1996, IRT acquired a casino interest and
licenses in San Jose, Costa Rica, including a facility leased by a recently
formed wholly-owned subsidiary, Juegos Ruro, S.A. (Juegos). Additionally, IRT
acquired, by agreements in September 1996, another operating casino, the Casino
Bahia Ballena, located in a "Five Star" beach hotel on the west coast of Costa
Rica, through its wholly-owned subsidiaries Casino Bahia Ballena, S.A. (Ballena)
and Inmobiliaria la J Tres S.R.L. (Inmobiliaria), both of which were sold in
April 1998.
In September 1996, IRT filed an application to list the Company's common stock
for trading on the Philadelphia Stock Exchange, which application was
subsequently accepted in early 1997. The Company's common stock was subsequently
delisted on February 4, 1999.
In April 1998, IRT decided to discontinue its entire casino operations and in
February 1999 sold Juegos Ruro, S.A., its last casino operation (See Note 2).
On January 25, 2000, the Company changed its name to Xpedian, Inc. The
management of Xpedian also changed because of an exchange of a majority of its
common stock. The new management then changed the Company's focus to domestic
opportunities in the Internet area and other business areas.
BASIS OF PRESENTATION The consolidated financial statements include the accounts
of Xpedian, Inc. and its wholly-owned foreign subsidiary, Juegos Ruro, S.A for
1999. All significant intercompany accounts and transactions of Xpedian and
subsidiary have been eliminated in consolidation. Xpedian discontinued the
operations of Juegos, which was also sold in 1999. Accordingly, the casino
operations are classified under the heading of "Discontinued Operations", in the
consolidated statements of loss.
CASH AND CASH EQUIVALENTS For purposes of the statements of cash flows, Xpedian
considers all short-term debt securities purchased with a maturity of three
months or less to be cash equivalents.
CONCENTRATION OF CREDIT RISK As of June 30, 1999, Xpedian had outstanding stock
subscriptions receivable, which were secured by Xpedian's common stock and were
non-interest bearing. The carrying value of these receivables was reduced to
estimated fair market value by imputing interest and in 1999, and an allowance
for uncollectibility. In addition, the Company has advanced funds to consultants
and related parties. Were these entities to experience financial difficulties,
it is possible that the Company will not be able to collect these receivables.
INVESTMENTS AND MARKETABLE SECURITIES The Company records investments and
marketable securities in accordance with Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." SFAS No. 115 establishes accounting and reporting requirements for
investments in equity securities that have readily determinable fair values and
for all investments in debt securities. All investment securities must be
classified as one of the following: held-to-maturity, trading or available-for-
sale. Equity securities that the Company bought and hold principally for the
purpose of selling them in the near term are classified as trading securities.
Trading securities are recorded at fair value on the consolidated balance
sheets, with the change in fair value during the year included in the earnings
of that year. Fair value is determined by the most recently traded price of each
security at the Company's balance sheet date. Net realized gains or losses are
determined on the specific identification cost method. At June 30, 2000, all of
the Company's investments and marketable securities were classified in the
trading category.
F-7
<PAGE>
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT Property and equipment is recorded at cost. Expenditures
for major betterments and additions are charged to the property accounts, while
replacements, maintenance, and repairs that do not improve or extend the lives
of the respective assets are charged to expense currently.
Depreciation is computed principally using the straight-line method, based on
the estimated useful lives of the assets, which is five years. Property and
equipment used in Xpedian's former casino operations was classified in "net
current assets of discontinued operations."
LICENSES AND LEASEHOLD INTERESTS AND AMORTIZATION Amounts expended in
connection with the acquisition of the Juegos casino gaming license and
leasehold interests had been capitalized and amortized over the term of the
lease, including the first lease option extension period, for a total of 150
months. Operating casino and leasehold interests had been capitalized and
amortized over the initial term of the lease and the first expected extension
period, for a total of 150 months. These assets are reflected in the balance
sheets as "net current assets of discontinued operations".
SOFTWARE LICENSE Software license acquired will be amortized on a straight-line
basis over the estimated useful life of the asset, expected to be sixty months,
when it is placed in service.
LONG-LIVED ASSETS Long-lived assets to be held and used are reviewed for
impairment whenever events or changes in circumstances indicate that the related
carrying amount may not be recoverable. When required, impairment losses on
assets to be held and used are recognized based on the fair value of the asset.
Long-lived assets to be disposed of, if any, are reported at the lower of
carrying amount or fair value less cost to sell.
NET LOSS PER SHARE In accordance with the provisions of SFAS No. 128, "Earnings
Per Share", basic net loss per common share from continuing operations is
computed by dividing the loss from continuing operations by the weighted average
number of common shares outstanding during each period. Basic net loss per
common share from discontinued operations is computed by dividing the loss from
discontinued operations by the weighted average number of common shares
outstanding during each period. Basic net loss per common share is computed by
dividing the net loss by the average number of common shares outstanding during
each period. Diluted net loss per common share includes the dilutive effect of
potential stock option exercises, calculated using the treasury stock method.
INCOME TAXES Income taxes are computed under the provisions of the Financial
Accounting Standards Board (FASB) Statement 109 No. (SFAS 109), Accounting for
Income Taxes. SFAS 109 is an asset and liability approach that requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of the difference in events that have been recognized in Xpedian's
financial statements compared to the tax returns.
USE OF ESTIMATES Preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions 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.
FOREIGN CURRENCY CONVERSION The functional currency of the wholly-owned
subsidiary located in Costa Rica is the colon (/c/) and its account balances
have been translated in accordance with SFAS No. 52, "Foreign Currency
Translation." Assets and liabilities have been translated at exchange rates as
of the end of the year. The income statement at June 30, 1999, was converted to
U.S. dollars based on the average monthly exchange rate.
The gain resulting from the translation of foreign currency for the year ended
June 30, 1999, was $38,464. This gain is included in the consolidated statements
of loss in determining the loss on disposal of discontinued subsidiary.
ADVERTISING COSTS Advertising costs are expensed as incurred. Advertising
expense was $79,324 and $102,000 for the years ended June 30, 2000 and 1999,
respectively.
RECLASSIFICATION AND RESTATEMENT Certain prior year amounts have been
reclassified to conform to the current year's presentation.
F-8
<PAGE>
NOTE 2. DISCONTINUED OPERATIONS
In February 1999, Xpedian entered into an agreement to sell the business and all
assets and properties related to the operations of its subsidiary, Juegos Ruro,
S.A. for a price of $81,906. A total of $64,406 was used to pay Xpedian's debts
and liabilities and $17,500 was payable directly to Xpedian. Accordingly, the
results of Juegos are reported separately as "Loss from operations of
discontinued operations."
Net revenues for Juegos for the year ended June 30, 1999, was approximately
$37,816.
NOTE 3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of Statement of Financial Accounting
Standards No. 107. The fair value amounts have been determined based on
available market information and appropriate valuation methodology. The carrying
amounts and estimated fair values of Xpedian's financial assets and liabilities
approximate fair value due to the short maturity of the instruments. The fair
value of the stock subscriptions receivable were estimated based on an annual
interest rate of 18% and the anticipated dates of payment and have been reduced
accordingly. Fair value estimates are subjective in nature and involve
uncertainties and matters of significant judgment; therefore, fair value cannot
be determined with precision.
NOTE 4. MARKETABLE SECURITIES
Trading securities at June 30, 2000, consisted of equity securities with a fair
value of $294,888 and a cost of $316,192. Unrealized loss at June 30, 2000 is
$21,304. Gross realized gains for the year ended June 30, 2000 were $18,528.
NOTE 5. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
2000 1999
---------- ----------
Transportation equipment $ 14,990 $ -
Computer equipment and software 20,314 -
---------- ----------
35,304 -
Accumulated depreciation ( 750) ( - )
---------- ----------
Property and equipment, less accumulated depreciation $ 34,554 $ -
========== ==========
Depreciation expense for the years ending June 30, 2000 and 1999, amounted to
$750 and $0, respectively.
NOTE 6. RELATED PARTY TRANSACTIONS
During the year ended June 30, 2000 and 1999, legal fees of approximately
$50,000 and $40,400, respectively, were charged to the Company by one of its
former United States legal counsel, and a professional association whose
principal shareholder was also a principal shareholder and was formerly
President and Board of Directors Member of Xpedian.
During the year ended June 30, 2000, the President of the Company paid certain
expenses on behalf of the Company. The total owed to the President at June 30,
2000 is $6,306.
During the year ended June 30, 2000, the Company advanced $25,000 to Global
Vision and $15,000 to CCG, without interest and no fixed repayment terms. The
Company believes these advances are due on demand.
On May 10, 2000, the Company advanced $75,000 to a consultant, IBF Consulting,
Ltd., a company located in Tortola, British Virgin Islands, pursuant to a
promissory note. The note provided for interest at the annual rate of 10% and
required repayment September 1, 2000. The note was not repaid according to its
terms and is currently in default. The note was secured by 300,000 shares of the
Company's common stock. The note is reflected, together with accrued interest of
$1,039, as a current asset on the Company's balance sheet. The Company is
actively pursuing collection and expects to take whatever action is necessary to
collect this amount.
NOTE 7. MANAGEMENT CHANGES
In September, 1998, the President of Xpedian resigned and in November, 1998,
Xpedian confirmed the resignations of the then directors, Mr. Ross John and Mr.
Ronnie D'Gallo, who then appointed as the new Board, to serve as sole Director,
Arnold J. Wrobel. Mr. Wrobel also became the President, Secretary, and
Treasurer.
F-9
<PAGE>
On August 2, 1999, the then sole Director and officer of Xpedian appointed
replacements to vacant seats, and resigned with the following persons holding,
the following positions:
Name Title
---- -----
Laurence F. Spears Chairman of the Board
Dale K. Chapman President, Secretary, Treasurer, and Director
Eric F. Heintschel Director
Gary N. Dixon, Sr., following the closing with Commerce Capital Group, LLC,
acted as Director and Chairman, and was replaced by Mr. Spears. Mr. Spears
resigned as Chairman of the Board on October 11, 1999. Mr. Dixon serves on a
newly established Advisory Committee for Xpedian.
During the fiscal year ended June 30, 2000, two more directors were added to the
Board, Mr. James H. Feeney and Mr. James E. Kelly.
NOTE 8. SOFTWARE LICENSE
As a result of the closing of the agreement discussed below, Xpedian now holds
licensing rights for software distribution and marketing of artificial
intelligence software licensed by Commerce Capital Group, LLC. Xpedian expects
to use advanced technology to deliver web-based financial planning services.
Xpedian expects that this e-commerce network will enable established brokerage
firms, certified public accountants, financial planners, attorneys, and other
financial intermediaries to provide value-added on-line products and services to
their clients.
The new direction of Xpedian is the result of an agreement entered into on
August 2, 1999, (the "License") between Xpedian, as licensee and Commerce
Capital Group L.L.C., a South Carolina limited liability company ("CCG")
pursuant to which Xpedian has the right to market and sell CCG's proprietary
technology and software in a defined territory.
CCG is the holder of certain proprietary technology and software, for estate and
financial planning, which will permit professionals, and others, to access
forms, assistance and other pertinent information, on-line, through the
Internet. CCG is in the process of establishing an Internet access site for
users. CCG represented to Xpedian that over ten years and millions of dollars
were expended in creating the software, content, trial testing, marketing, etc.,
and, the parties agreed that the market demand for the products is projected to
produce revenues in the millions of dollars.
Pursuant to the License, Xpedian received an initial territory of the State of
Florida, and representations from CCG to bring persons with substantial
backgrounds and talents to the management of Xpedian, together with cooperation,
training, and aid in obtaining financial assistance from CCG to build and
implement its business model in the subject business area. CCG received, as
initial consideration, twenty-one million shares of restricted common stock, as
such term is defined under Rule 144 promulgated under the Securities Act of
1933, as amended, and established the terms for future territories.
In accordance with Accounting Principles Board Opinion No. 16 (APB 16),"Business
Combination", the exchange of twenty-one million shares of the Company's common
stock for the licensing agreement, created a business combination with CCG
becoming a major shareholder. APB 16 requires that the value recorded for the
software license is best represented by a transfer at CCG's historical cost. The
agreement entitles Xpedian to the territory of the State of Florida, estimated
by management to be 10% of the total market. The value of the software license
was recorded at 10% of CCG's historical cost of approximately $6,443,700, or
$644,370. No amortization has been recorded for the software license, since the
license has not been placed in service.
NOTE 9. STOCKHOLDERS' EQUITY
PRIVATE OFFERING In February 2000, the Board of Directors authorized Xpedian to
offer and sell to qualified investors up to 870,000 shares of its common stock
at a price of approximately $.68 per share under a private placement to
qualified investors, pursuant to an exemption available under the Securities Act
of 1933. Under this offering, 869,117 shares were issued at a price of $.68,
generating net proceeds of $531,994. In connection with the offering, 65,531
shares of common stock were issued to two individuals as commissions for their
assistance in raising funds. In addition, the Company negotiated with an
accredited investor and sold common stock for a total of $250,000 or $1.00 per
share. The Company agreed to register these shares no later than July 31, 2000.
STOCK ISSUED FOR SERVICES On July 24, 1998, Xpedian authorized 1,500,000 shares
of common stock to be issued to various consultants for services pursuant to
a registration statement on Form S-8 filed on August 14, 1998. The parties
agreed that the value of each share was $.30.
On July 29, 1999, Xpedian granted consultants a total of 1,650,000 shares of its
common stock as compensation for consultation and professional services which
were rendered on its behalf, pursuant to a registration statement on Form S-8
filed on July 31, 1999. The parties agreed that the value of each share was
$.50 for a total value of $825,000.
On November 16, 1999, the Board of Directors authorized the issuance of
1,110,000 shares of common stock to several individuals under a Consultant
Services Plan as compensation for consultation services in connection with
computer programming. These shares were registered on Form S-8 with the
Securities and Exchange Commission. This stock was valued at $324,203.
In February 2000, the Board of Directors authorized the issuance of 2,130,000
shares of common stock to several individuals under a Consultant Services Plan
as compensation for services in connection with advertising in European markets,
analysis, legal, accounting and general personnel and offices consulting. These
shares were registered on Form S-8 with the Securities and Exchange Commission.
This stock was valued at $937,000.
STOCK ISSUED FOR SOFTWARE LICENSE Pursuant to the "Agreement for Purchase and
Assignment of License", dated August 2, 1999, Xpedian acquired a software
license (see Note 8) in exchange for the issuance of 21,000,000 shares of the
Company's common stock.
F-10
<PAGE>
NOTE 10. INCENTIVE STOCK OPTION PLAN
Immediately following the closing with CCG, Xpedian established various plans to
compensate persons for services provided, including an incentive stock option
plan for non-employee directors. The plan relating to Directors provides that
each Director will receive the following:
(a) an option to purchase up to 100,000 shares of Xpedian's common stock at
an exercise price of $.0001 per share which option is exercisable one
year after the date the director is appointed and expires one year
thereafter;
(b) an option to purchase up to 100,000 shares of Xpedian's common stock at
an exercise price of $.50 per share, which option is exercisable on the
third anniversary of the date the director is appointed and expires one
year thereafter; provided, however, the director must serve a minimum
three year term; and provided, further, Xpedian is then profitable and
meets certain financial criteria; and
(c) an option to purchase up to 100,000 shares of Xpedian's common stock at
an exercise price of $.50 per share which option is not exercisable
unless the common stock per share trading price is equal $25 or more
for twenty consecutive business days and once exercisable will vest
immediately on such date and expire one year from such date, and
provided that the director serve a three year minimum term.
Transactions during fiscal 2000, under the option plans were as follows:
Options outstanding at start of year -
Options granted 800,000
Options exercised -
Options cancelled -
-----------
Options outstanding at June 30, 2000 800,000
==========
Options exercisable at June 30, 2000 -
===========
Weighted average exercise price per share outstanding
and per share exercisable $ .13
===========
NOTE 11. INCOME TAXES
Xpedian files its income tax return using the cash method of accounting wherein
revenue is recognized when received and expenses are deducted when paid
effectively eliminating all prepaid expenses, accounts payable and accrued
expenses from the determination of taxable income or loss. For the years ended
June 30, 2000 and 1999, Xpedian generated for U.S. income tax purposes net
operating losses of approximately $2,612,300 and $979,278, respectively. These
loss carryforwards expire in the years 2020 and 2019, respectively.
Xpedian had a net operating loss carryforward of approximately $4,413,961 as of
June 30, 1999. However, as of August 2, 1999, there were ownership changes in
Xpedian as defined in Section 382 of the Internal Revenue Code. Because of these
changes, the Company's ability to utilize net operating losses and capital
losses available before the ownership change is restricted to a total of
approximately $392,385 per year (approximately 5.18% of the market value of
Xpedian at the time of the ownership change). Therefore, substantial
net operating loss carryforwards will, in all likelihood, be eliminated in
future years due to the change in ownership. The utilization of the remaining
carryforwards is dependent on the Company's ability to generate sufficient
taxable income during the carryforward periods and no further significant
changes in ownership.
The Company computes deferred income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, which requires the use of an asset and
liability method of accounting for income taxes. Statement No. 109 provides for
the recognition and measurement of deferred income tax benefits based on the
likelihood of their realization in future years. A valuation allowance must be
established to reduce deferred income tax benefits if it is more likely than not
that a portion of the deferred income tax benefits will not be realized. It is
Management's opinion that the entire deferred tax benefit of approximately
$1,085,120 at June 30, 2000, may not be recognized in future years, because the
utilization of the remaining carryforwards is dependent on the Company's ability
to generate sufficient taxable income during the carryforward periods and no
further significant changes in ownership. Therefore, a valuation allowance equal
to the deferred tax benefit of $1,085,120 has been established, resulting in no
deferred tax assets as of the balance sheet dates.
F-11
<PAGE>
NOTE 11. INCOME TAXES (CONTINUED)
Deferred income taxes and benefits for 2000 and 1999 are provided for income and
expenses which are recognized in different periods for tax and financial
reporting purposes. The principal temporary differences that give rise to the
deferred tax asset (liability) and the effect (computed at 15%) that the changes
in those temporary differences had on provision for deferred tax expense are as
follows:
2000 1999
---------- -----------
Deferred tax asset
Accounts payable $ 6,390 $ 5,375
Accrued liabilities 3,195 4,350
Accrued officers compensation 19,028 -
Unrealized loss on trading securities 3,196 -
Net operating loss carryforward 1,053,943 662,094
---------- -----------
1,085,752 671,819
Valuation allowance (1,085,120) ( 671,819)
---------- -----------
Total deferred tax asset 632 -
---------- -----------
Deferred tax liability
Depreciation ( 632) ( - )
---------- -----------
Total deferred tax liability ( 632) ( - )
---------- -----------
Net deferred tax asset (liability) ($ - ) ($ - )
========== ===========
NOTE 12. COMMITMENTS AND CONTINGENCIES
OFFICE FACILITIES The Company leases its executive offices located in Charlotte,
North Carolina under a two year operating lease that expires on September 30,
2001. Future minimum lease commitments for the years subsequent to June 30 are:
2000 $ 11,929
2001 3,049
-----------
$ 14,978
===========
Rent expense for the year ended June 30, 2000, was $3,987. Rent expense for the
year ended June 30, 1999, was and $61,518, and is included under discontinued
operations.
LITIGATION In November 1994, Morton I. Singerman obtained an amended final
judgment against Xpedian. The judgment was issued against the defendants
including the Company's predecessor Triumph Financial Corp. and Triumph Capital,
Inc., which, with interest, was approximately $31,000. The Company has paid this
settlement to Mr. Singerman. A portion of the settlement was paid in 1999 and
the remainder was paid in fiscal year ended June 30, 2000. These amounts are
reflected in the statement of loss as litigation settlement expense.
In March 1997, Xpedian filed a complaint against International Corporation, K&Z,
S.A. and others. In the complaint, Xpedian alleged that the defendants had
breached an agreement to sell a license to operate a casino in San Jose, Costa
Rica. As consideration for the license, the defendants issued a promissory note
in the amount of $ 595,000 while simultaneously purchasing 2,400,000 shares of
Xpedian's common stock. As security for the validity of the license, the
defendants pledged a certain number of shares of the Company's common stock and
agreed not to transfer the shares until the validity of the license could be
confirmed. However, one of the co-defendants attempted to transfer his shares.
Xpedian then placed a stop-transfer order on the defendant's shares. The co-
defendant subsequently filed a counterclaim against Xpedian alleging that it had
improperly caused a stop-transfer order to be placed on his shares of Xpedian's
common stock, as is seeking damages in excess of $300,000. Xpedian believes that
the counter-claim has no merit. However, if the counterclaim were to be
adjudicated against Xpedian, outcome could have a material adverse effect on the
Company's liquidity, financial position, or results of operations.
In January 1998, Jose Humberto Brenes filed a complaint against Xpedian. In the
complaint, the plaintiff alleged that Xpedian defaulted on its obligation to
make payments due under a guarantee. The plaintiff seeks damages of
approximately $ 119,000. Although the plaintiff voluntarily dismissed the action
on or about November 4, 1998, the plaintiff has indicated that he intends to
refile the action against Xpedian and to seek to collect the alleged damages
unless the parties can reach a settlement. The Company intends to investigate
the underlying facts of the plaintiff's complaint. However, if the action were
re-filed and the complaint were to be adjudicated against Xpedian, the outcome
could have a material adverse affect on the Company's liquidity, financial
position or results of operations.
F-12
<PAGE>
NOTE 12. COMMITMENTS AND CONTINGENCIES (CONTINUED)
In November 1998, Mr. Brenes-Jenkins, as a shareholder of and on behalf of
Xpedian, filed a complaint against Richard R. Rossi, the then President and
Director of the Company had breached his fiduciary duty by causing Xpedian to
enter into certain stock purchase transactions with entities controlled by him
resulting in losses to Xpedian. The complaint alleged damages of $550,000. In
April 1999, the Court granted the plaintiff's motion for a final default
judgment in favor of Xpedian and ordered the Mr. Rossi to pay damages in the
amount of $ 695,712 (including a principal sum of $ 550,000, plus prejudgment
interest for $ 145,712). While the Company is attempting to collect its
judgment, an allowance in the full amount of the award has been established
as there is no assurance that Xpedian will be able to collect the damages
awarded.
In November 1998, Xpedian voluntarily entered into a Consent to Entry of
Judgment of Permanent Injunction and Other Relief with the Securities and
Exchange Commission ("SEC") File No. A- 1605, pursuant to which the SEC has the
right to present to the United States District Court, Southern District of
Florida (Miami Division) a Final Judgment without further notice to Xpedian. The
proposed Final Judgment restrains and enjoins Xpedian from committing fraud in
violation of Section 17(a) of the Securities Act of 1933, as amended and Section
10(b) of the Securities Exchange Act of 1934 and Rule 10B-5. In the event
Xpedian fails to comply with the terms of the Final Judgment, the SEC will be
able to petition the Court to assess civil penalties against the Company. If
civil penalties were assessed against the Company, such sums, if any, could have
a material adverse effect on the Company's liquidity, financial position and
results of operations.
In February 10, 1999, Oscar Hammond filed a complaint against Xpedian and others
alleging the defendants made various misrepresentations and fraudulent
statements to him thereby inducing him to purchase shares of Xpedian's common
stock at a cost of approximately $100,000, which shares subsequently decreased
in value. The complaint seeks to rescind the sale of the common stock or
alternatively, damages of up to $ 100,000. Xpedian believes that the complaint
has no merit and intends to vigorously defend the action. However, if the action
were to be adjudicated against Xpedian, the outcome could have a material
adverse effect on the Company's liquidity, financial position, and results of
operations.
CONSULTING AGREEMENTS From time-to-time, Xpedian engages, retains and dismisses
various consultants. The consultants provide various services including
assisting with shareholder relations, responding to inquiries, short and
long-term strategic planning, marketing Xpedian to the investment community and
identification and negotiation of potential acquisitions.
YEAR 2000 ISSUES The year 2000 issue results from certain computer systems and
software applications that use only two digits (rather than four) to define the
applicable year. As a result, such systems and applications may recognize a date
of "00" as 1900 instead of the intended year 2000, which could result in data
miscalculations and software failures. The Company conducted an assessment of
its key computer systems and software applications and believes they are Year
2000 compliant. The Company believes the cost of addressing the Year 2000 issue
did not have a material impact on the Company's financial position or results of
operations.
REGISTRATION RIGHTS As part of the private placement, the Company granted
"Piggy-Back" registration rights and further committed to the registration of
those shares no later than July 31, 2000. The Company agreed to bear all costs
in connection with this registration. The Company later found it could not
comply with this provision in the agreement until the Form 10-KSB was timely
filed for the year ended June 30, 2000. The Company expects to file the
registration statement shortly after the Form 10-KSB is filed for the period
ended June 30, 2000. In connection with this delay, these investors could assert
claims for damages caused by the failure to register the shares at the
originally agreed-upon date.
NOTE 13. GOING CONCERN AND MANAGEMENT'S PLANS
Xpedian's financial statements for the year ended June 30, 2000, have been
prepared on a going concern basis, which contemplates the realization of assets
and the settlement of liabilities and commitments in the normal course of
business. Xpedian has suffered recurring losses. This factor raises doubt about
the Company's ability to continue as a going concern without achieving
profitable operations or an infusion of capital or additional financing. The
financial statements do not include any adjustments that might be necessary
should Xpedian be unable to continue as a going concern.
Management recognizes that Xpedian must generate additional resources in order
to continue. Management's plans include its current focus on domestic
opportunities in the Internet area or other business area.
In that connection, with Xpedian changing its focus Xpedian discontinued all of
its casino operations. In February 1999, Xpedian sold the business and all
assets and properties related to the operations of its subsidiary, Juegos Ruro,
S.A.
The Company then acquired new businesses and a software license which management
believes will ultimately generate sufficient revenues to fund the Company's
operations.
In addition, the Company expects to file a Form SB-2 registration statement with
the United States Securities and Exchange Commission, which would permit the
Company to raise additional equity.
F-13
<PAGE>
NOTE 14. SUBSEQUENT EVENTS
On July 14, 2000, the Board of Directors authorized the following:
The purchase of 75% of the equity of Global-Vision, Inc. ("Global Vision")
in exchange for a combination of options in the Company's stock and
agreements to fund future operations of Global-Vision. This purchase was
completed on July 30, 2000 and 1,750,000 options were granted at an exercise
price of .0001, with the balance of 1,750,000 exercisable on July 30, 2002.
The Company terminated its contract with Capital Media Group. To terminate
the contract, Xpedian may issue all or part of 100,000 shares of the
Company's common stock all bearing a restrictive legend, which represents
the remainder of the compensation due Capital Media Group for their
successful completion of the contract.
On July 24, 2000, the Board of Directors authorized the Company to compensate
the President and Chief Executive Officer of the Company, Dale K. Chapman, for
his services from August 2, 1999, to August 2, 2000, by issuing 200,000 shares
of common stock. Mr. Chapman shall also receive a cash post-tax bonus of
$50,000. These amounts have been accrued in the financial statements at June 30,
2000.
On August 3, 2000, the Board of Directors authorized the Company to hire Jason
Baker to perform duties related to creation and completion of an Investor
Relations package and otherwise assisting us. The Company agreed to pay Mr.
Baker, 75,000 shares of common stock, bearing a restrictive legend, in three
installments of 25,000 shares each. The first installment is payable immediately
upon completion of the contract, the second installment is payable upon
completion and delivery of an approved Investor Relations Package and the third
installment is payable on January 1, 2001, after confirmation by the Board of
Directors that all services have been successfully rendered.
Also, on August 3, 2000, the Board of Directors established a Consultant Plan
from which to pay consultants for current and future services consisting of
500,000 shares of common stock. All distributions will be documented and
registered using Form S-8 filings with United States Securities and Exchange
Commission.
On August 6, 2000, the Stock and Asset Purchase Agreement to purchase 75% of
the equity of Global Vision was completed.
F-14
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The following table sets forth the names, ages (at September 30, 1999) and
positions of the executive officers and the directors of Xpedian, Inc.
NAME AGE POSITION
---- --- --------
Dale K. Chapman 37 President, Chief Executive Officer, Treasurer,
Secretary, and Director
Eric F. Heintschel 27 Director
James H. Feeney 58 Director
James E. Kelly 60 Director
Dale K. Chapman has been an officer and director of Xpedian since August 2,
1999. Mr. Chapman previously worked at Green Point Mortgage Corporation, a
subsidiary of GreenPoint Financial as a Corporate Operations Analyst. Prior to
July 1997, he worked at the Bank of America (f/k/a NationsBank) in the areas of
Planning and Strategy, Treasury Services and Nationwide Float Analysis for six
years from 1991 to 1997.
Eric F. Heintschel has been a director of Xpedian since August 2, 1999. Mr.
Heintschel is a certified public accountant at PriceWaterhouseCoopers and has
worked at the accounting firm since 1997. From 1995 to 1997, Mr. Heintschel was
employed as a certified public accountant at Dellinger and Deese, a privately
held accounting firm. Prior to 1995, Mr. Heintschel obtained a master's degree
in accounting.
James H. Feeney has been a director of Xpedian since, November, 1999. Mr. Feeney
currently serves as the President and Founder of the Feeney Group, a private
creative advertising team. Before forming the Feeney Group, Mr. Feeney served as
the Vice Chairman, and/or President and Chief Executive Officer of Trone
Advertising, Inc. Before joining Trone Advertising, Inc. in March 1996, Mr.
Feeney served as the President and Chairman of the Executive Committee of
Albert-Frank-Guenther-Law, a 125-year old firm. He also spent more than 12 years
with Ally & Gargano, Inc., a prominent advertising agency.
James F. Kelly, CFP, currently serves as President of Management Consolidated
Corp., a large regional life insurance brokerage firm located in Tampa, Florida
Management Consolidated Corp., was founded in 1991 and currently serves brokers
in 30 states. He has 20 years experience in business, estate, and retirement
planning, has been a Certified Financial Planner since 1984, and has an active
background with the Institute of Certified Financial Planners and the National
Association of Life Underwriters.
All officers of Xpedian are elected annually by the Board of Directors at its
meeting held immediately after the annual meeting of the shareholders, and hold
their respective offices until their successors are duly elected and qualified.
The Board of Directors may remove officers at any time.
The Board of Directors formed an advisory committee to advise management on
matters including, but not limited to, Internet and systems technology and
estate planning law. The Advisory Committee currently has one member, Gary N.
Dixon, Sr. who resigned as Chairman of the Board and director effective as of
August 2, 1999. Mr. Dixon currently works as Client Services Director for Oracle
Consulting Services. We expect to expand the number of members of the Advisory
Committee. The Board of Directors has also formed a focus committee composed of
Mr. Chapman and Mr. Heintschel. The Focus Committee's primary goal is to seek
qualified candidates for appointment as officers and directors. Our Audit
Committee was inactive and has been disbanded, however, the Board of Directors
intends to reinstate the Audit Committee and resume its operations once we
achieve significant revenues.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires our executive officers and
directors and persons who beneficially own more than 10% of the our common
stock, to file initial reports of beneficial ownership on Form 3 ("Form 3") and
reports of changes of beneficial ownership on Form 4 ("Form 4") of our equity
securities with the Securities and Exchange Commission and to furnish copies of
those reports to us.
Based solely on a review of the reports furnished to us to date, we believe that
all reports required to be filed by such persons with respect to the fiscal year
ended June 30, 2000, were timely filed.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.
The following table sets forth information concerning the annual and long-term
compensation of Xpedian's chief executive officer for the fiscal years ended
2000, 1999, and 1998. Xpedian employed no other persons whose total annual
compensation exceeded $100,000 for the fiscal years ended 1999, 1998, and 1997.
Summary Compensation Table
--------------------------
Annual Compensation Long-term Compensation
------------------- ---------------------
Name and Other Securities
Principal Position Fiscal Annual Underlying
Year Salary Bonus Compensation Options Granted
------ ------ ----- ------------ ---------------
Richard R. Rossi, 2000 ----- ---- ---- ----
President, 1999 ----- ---- ---- ----
Secretary, 1998 (1) ---- ---- ----
Treasurer and
Director(1)
Arnold J. Wrobel, 2000 (2) ---- $304,000 ----
Chief Executive 1999 (2) ---- ---- ----
Officer, President,1998 (2) ---- ---- ----
Chief Financial
Officer, Secretary,
Treasurer and Sole
Director(2)
Dale K. Chapman 2000 (3) --- $145,850 ----
Chief Executive 1999
Officer, President,1998
Secretary, Treasurer,
------------------------------------------------------------------------------
(1) Richard R. Rossi served as President, Secretary and Treasurer and a director
from March 6, 1996 until his resignation in all capacities on August 30, 1998.
During July 1998, Mr. Rossi did not receive any compensation from Xpedian.
During August 1998, Mr. Rossi was paid approximately $40,386. During the year
ended June 30, 1998, Mr. Rossi was paid approximately 128,000 (approximately
$10,000 per month) for salary consideration, various legal and business services
and related office expenses supplied by Mr. Rossi through a corporation in which
he is a shareholder. During the year ended June 30, 2000, Mr. Rossi was paid
approximately $50,000 for various legal and business services. See also Item 12.
Certain Relationships and Related Transactions.
(2) Arnold J. Wrobel served as Chief Executive Officer, President, Chief
Financial Officer, Secretary, Treasurer, and sole director from September 1998
until his resignation from all capacities on August 2, 1999. Mr. Wrobel received
compensation for his services in the form of 350,000 shares of unregistered
common stock, issued to him during the year ended June 30, 2000. Mr. Wrobel was
also reimbursed for expenses incurred as a director.
(3) Dale K. Chapman was appointed as the Chief Executive Officer President,
Secretary, Treasurer, and director as of August 2, 1999. In lieu of a first year
salary, Mr. Chapman received an option to purchase 200,000 shares of our common
stock at an exercise price of $.0001 per share, exercisable August 2, 2000 and
expiring on August 2, 2001. Mr. Chapman was also granted options to purchase up
to 300,000 shares (38% of total options granted during the fiscal year) of
common stock at an exercise price of $.50 per share, of which:
(i) 100,000 of the underlying shares vest and are exercisable on August 2,
2000;
(ii) 100,000 of the underlying shares vest and are exercisable on August 2,
2001; and
(iii) the last 100,000 of the underlying shares vest and are exercisable on
August 2, 2002.
During the first year, Mr. Chapman was also paid a monthly stipend of
approximately $2,000 and was provided reimbursement for expenses. As a director,
Mr. Chapman was also granted an option to purchase up to 300,000 shares of
common stock at an exercise price of $.50 per share; provided, however, that the
option is not exercisable unless our common stock trading price equals $25 or
more for twenty consecutive business days and once exercisable, if applicable,
will vest over a three-year period as follows:
(i) 100,000 of the underlying shares will vest on the first anniversary of the
date the option first becomes exercisable;
(ii) 100,000 of the underlying shares
will vest on the second anniversary of such date; and
(iii) the last 100,000 of the underlying shares will vest on the third
anniversary of such date.
<PAGE>
In June of 2000, the Board of Directors voted to provide Mr. Chapman an after
tax bonus of $50,000 to defray his expenses for the previous year and voted to
award him an annual salary of $175,000 effective August 2, 2000. This salary may
be taken in the form of cash or stock.
Option/SAR Grants in Last Fiscal Year
We did not grant any options or stock appreciation rights to the executive
officers named in the Summary Compensation Table (the "Named Executive
Officers") during the year ended June 30, 2000.
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values
No options to purchase shares of our common stock were exercised by the Named
Executive Officers during the fiscal year ended June 30, 2000. Mr. Chapman
exercised his option for 200,000 shares of stock on September 1, 2000 and the
shares were issued as part of an S-8 registration filed September 13, 2000.
Long-Term Incentive Plans Awards ("LTIP") in the Last Fiscal Year
No awards under any LTIPs were made to any of the Named Executive Officers
during the fiscal year ended June 30, 2000.
Compensation of Directors
During August 1999, a plan was established for our non-employee directors
that provides for options to the purchase our common stock. Each non-employee
director is granted the following:
(a) an option to purchase up to 100,000 shares at an exercise price of $.0001
per share, which option is exercisable on the first anniversary of the date of
the director's appointment and expires one year thereafter;
(b) an option to purchase up to 100,000 shares at an exercise price of $.50 per
share, which option is exercisable on the third anniversary of the date of the
director's appointment and expires one year thereafter; provided, however, that
the director must serve a 3-year minimum term; and provided, further, that the
Company is then profitable and meets certain financial criteria; and
(c) an option to purchase up to 100,000 shares at an exercise price of $.50 per
share; provided, however, that the option is not exercisable unless the
Company's common stock trading price equals $25 or more for twenty consecutive
business days; once exercisable the option vests immediately on such date and
expires one year thereafter.
We also provide non-employee directors with directors and officers' liability
insurance and reimbursement of expenses for attending board meetings.
Employment Contracts and Termination of Employment, and Change of Control
Arrangements
Other than as mentioned above, we had no employment contracts with any of the
Named Executive Officers who were employees, and had no compensatory plan or
arrangement with any of our named executives in which the amount to be paid
exceeded $100,000 and which were activated upon resignation, termination or
retirement of any such Named Executive Officer upon a change of control of the
Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information regarding the ownership of
shares of Xpedian's common stock as of September 30, 2000, (except as noted
below) with respect to:
(i) holders known to us to beneficially own more than five percent or
more of our outstanding common stock;
(ii) each of our directors;
(iii) each executive officer named in the Summary Compensation Table under the
caption "Executive Compensation" in Item 11 of this Report; and
(iv) all our directors and executive officers as a group.
We understand that each beneficial owner has sole voting and investment power
with respect to all shares attributable to such owner. The number of outstanding
shares of our common stock at September 30, 2000, was 36,924,975.
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership(1)(2) Class (2)
---------------- -------------------------- ----------
Commerce Capital Group, L.L.C.(3) 17,000,000 46.0%
1517 Mary Ellen Drive
Ft. Mill, South Carolina 29715
Dale K. Chapman (4) 200,000 *
6230 Fairview Road, Suite 102
Charlotte, North Carolina 28210
Eric F. Heintschel (5) 100,000 *
6230 Fairview Road, Suite 102
Charlotte, North Carolina 28210
James H. Feeney (6) 11,000
6230 Fairview Road, Suite 102
Charlotte, North Carolina 28210
James E. Kelly (7) 15,000
6230 Fairview Road, Suite 102
Charlotte, North Carolina 28210
All directors and executive officers * *
as a group (4 persons) (4)(5)
------------------------
(1) Shares subject to options are considered beneficially owned to the extent
currently exercisable or exercisable within 60 days of September 30, 1999.
(2) Asterisk indicates less than one percent. Shares subject to options that are
considered to be beneficially owned are considered outstanding only for the
purpose of computing the percentage of outstanding common stock that would be
owned by the optionee if such options were exercised, but (except for the
calculation of beneficial ownership by all executive officers and directors as a
group) are not considered outstanding for the purposed of computing the
percentage of outstanding common stock owned by any other person.
(3) Commerce Capital Group, L.L.C. ("CCG") is a South Carolina limited liability
company. Mr. R. Hughes, whose address is c/o Commerce Capital Group, L.L.C.,
1517 Mary Ellen Drive, Fort Mill, South Carolina 29715, is the Managing Member
of CCG.
(4) Excludes 600,000 shares subject to options that are not exercisable within
60 days of September 30, 2000.
(5) Excludes 100,000 shares subject to options that are not exercisable within
60 days of September 30, 2000.
(6) Excludes 200,000 shares subject to options that are not exercisable within
60 days of September 30, 2000.
(7) Excludes 200,000 shares subject to options that are not exercisable within
60 days of September 30, 2000.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
During the year ended June 30, 1998, the former president of IRT, Industries,
Inc., Mr. Richard R. Rossi, through a corporation that he owned, provided
services to IRT and received approximately $128,000 or approximately $10,000 per
month for services and supplying at his expense our U.S. corporate headquarters.
This amount included office suites, a conference room, a receptionist and
storage facilities, photocopying, faxing, computers, office supplies and
personnel including a secretary, and reimbursement for business-related expenses
and salary consideration. From time to time, he made unsecured and non-interest
bearing loans to IRT to help it meet certain financial needs as they arose,
which loans were repaid. During July 1998, Mr. Rossi did not receive any
compensation from us. During August 1998, Mr. Rossi was paid approximately
$40,386.
On August 2, 1999, former management consummated a licensing arrangement with
CCG to license CCG's proprietary "Personal Estate Plan (tm) system", which
allows professional and individual users to conduct estate planning and
financial planning through use of the Internet. CCG was paid a license fee of 21
million shares of our unregistered common stock. After the transaction, CCG
became the owner of more than five percent of our common stock.
From time to time during the year ended June 30, 2000, our current president,
Mr. Dale K. Chapman made unsecured, non-interest bearing loans to us to help us
meet certain financial needs as they arose. These loans, with the exception of
approximately $5,000, have been repaid as of the date of this filing.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
a. Reports on Form 8-K.
Subsequent to the year ended June 30, 1999, Xpedian filed a Report on Form 8-K
(the "Report") dated August 2, 1999 (date of earliest event reported), reporting
under Item 1 (Changes in Control of Registrant), Item 2 (Acquisition or
Disposition of Assets) and Item 7 (Financial Statements and exhibits). No
financial statements were filed with the Report.
b. Exhibits
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1 Articles of Incorporation (1)
3.2 Bylaws (1)
4.1 Specimen Stock Certificate (1)
10.1 Agreement for Purchase and Assignment of License dated
Effective July 30, 1999
10.2 Agreement for Purchase shares of Global-Vision, Inc.
21.1 Subsidiaries List (2)
27 Financial Data Schedule
-------------------------
(1): Incorporated by reference to Xpedian's Form 10-K for the fiscal year ended
June 30, 1995, SEC Commission File Number 0-15347
(2): Incorporated by reference to Xpedian's Form 10-KSB for the fiscal year
ended June 30, 1996, SEC Commission File Number 0-15347
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.
XPEDIAN, INC.
/s/ Dale K. Chapman
By: --------------------------------------------
Name: Dale K. Chapman
Title: President
Date: October 11, 2000
-28-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been executed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Dale K. Chapman
_____________________ President, Chief Executive October 11, 2000
Name: Dale K. Chapman Officer, Secretary, Treasurer,
Director
/s/ Eric F. Heintschel
________________________ Director October 11, 2000
Name: Eric F. Heintschel
/s/ James H. Feeney
________________________ Director October 11, 2000
Name: James H. Feeney
/s/ James E. Kelly
________________________ Director October 11, 2000
Name: James E. Kelly
<PAGE>
