UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the three months ending March 31, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _________________ to _________________ Commission file number: 333-85306 PUREZZA GROUP, INC. (Exact name of small business issuer as specified in its charter) Florida 65-1129912 (State or other jurisdiction of (IRS Employer Identification) incorporation 936A Beachland Blvd, Suite 13 Vero Beach, FL 32963 (Address of principal executive offices) (772) 231-7544 (Issuer's telephone number) (772) 231-5947 (Issuer's fax number) Previous Addresses: 800 West Cypress Creek Road, Suite 470 Ft. Lauderdale, FL 33309 24 Madison Road Fairfield, NJ 07004 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] [ ] Not applicable APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of May 17, 2004, we had 52,500,000 shares of common stock outstanding. Transactional Small Business Disclosure Format (Check one): Yes [ ] No [X] PART I-- FINANCIAL INFORMATION Item 1. Financial Statements. FORWARD LOOKING STATEMENT Statements made in this Form 10-QSB (the "Quarterly Report") that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the "Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements often can be identified by the use of terms such as "may", "will", "expect", "believe", "anticipate", "estimate", "approximate", or "continue", or the negative thereof. Transax International Limited (the "Company") intends that such forward-looking statements be subject to the safe harbors for such statements. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond the control of the Company that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital and unexpected costs. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events. PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) TABLE OF CONTENTS Condensed Financial Statements: Condensed Balance Sheet as of March 31, 2004 (unaudited).........1 Condensed Statements of Operations for the three months ending March 31, 2004 and for the period from August 9, 2001 (inception) through March 31, 2004 (unaudited)..................2 Condensed Statements of Cash Flows for the three months ending March 31, 2004 and 2003 and for the period from August 9, 2001 (inception) through March 31, 2004 (unaudited).............3 Condensed Statement of Stockholders' Equity as of and for period from August 9, 2001 (inception) through March 31, 2004 (unaudited)............................. 4 Notes to Condensed Financial Statement (unaudited)................5-10 PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED BALANCE SHEET MARCH 31, 2004 (UNAUDITED) ASSETS Current assets: Cash $ 26,647 Money Market Account 200,055 Total Current assets $ 226,702 Computers and Equipment Computers 4,074 Accumulated Depreciation (3,220) Total Computers and Equipment 854 Total Assets $ 227,556 LIABILITIES AND STOCKHOLDERS' DEFICIT Long-term debt: Convertible Debenture Note Payable 600,000 Total Liabilities $ 600,000 Stockholders' Equity (deficit): Common stock(100,000,000 shares authorized, 7,815 7,815,000 issued and outstanding) Paid In Capital 326,707 Deficit Accumulated Development Stage (706,966) Total Stockholders' Equity (Deficit) (372,444) Total Liabilities and Stockholders' Equity $ 227,556 See accompanying notes to condensed financial statements. -1- PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDING MARCH 31, 2004 AND FOR THE PERIOD FROM AUGUST 9, 2001 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED) August 9, 2001 Three Months Ending (Inception) March 31, Through 2004 2003 March 31, 2004 ------- ------ ------------- Revenue $ - $ - $ - Operating expenses: General and administrative expenses 18,402 37,489 362,172 Professional fees 9,351 22,885 202,957 ------ ------ ------- Total operating expenses 27,753 60,374 565,129 ------ ------ ------- (Loss) from operations (27,753) (60,374) (565,129) ------ ------ ------- Other income (expense): Impairment of license - - (150,000) Interest income 215 500 8,163 Interest expense (waiver) - (11,967) - Adjustment 1 - - ------ ------- ------- Total other income (expense) 216 (11,467) (141,837) ------ ------- ------- Net (loss) income $ (27,537) $(71,841) $(706,966) ====== ======= ======== Net(loss)income per share $ (0.01) $ (0.01) $ (0.09) ====== ======= ======== Weighted average number of shares 7,815,000 7,815,000 7,815,000 ======== ========= ========== See accompanying notes to condensed financial statements. -2- PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDING MARCH 31, 2004 AND 2003 AND FOR THE PERIOD FROM AUGUST 9, 2001 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED) For the period From August 9, 2001 Three Months Ending (Inception) March 31, Through Cash flows from operating activities: Net (loss) $(27,537) $(71,841) $(706,966) Adjustments to reconcile net loss to net cash used in operating activities: Stock issued for services - - 100 Depreciation expense 214 884 1,909 Impairment of license - - 150,000 Increase (decrease) in: Accounts payable - - - Accrued expenses - 6,300 - Accrued interest (waiver) - 11,967 - Adjustments 427 - 700 ------- ------- ------- Net cash used in operating activities: (26,896) (52,690) (554,257) ------- ------- ------- Cash flows from investing activities: Purchase of license 0 0 (150,000) Purchase of computer 0 0 (4,074) ------- ------- --------- Net cash used in investing activities 0 0 (154,074) ------- ------- --------- Cash flows from financing activities: Proceeds from issuance of common stock 0 0 338,658 Repurchase of common stock 0 0 (3,625) Proceeds from convertible debenture 0 0 600,000 ------- ------- --------- Net cash provided by financing activities 0 0 935,033 ------- ------- -------- Net increase (decrease) in cash (26,896) (52,690) 226,702 Cash, beginning of period 253,598 476,717 - ------- -------- ------- Cash, end of period $ 226,702 $ 424,027 $ 226,702 ======= ======== ======= See accompanying notes to condensed financial statements. -3- PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY AS OF AND FOR THE PERIOD FROM AUGUST 9, 2001 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED) Deficit Accumulated Additional During the Total Number of Common Paid-In Development Stockholders' Shares Stock Capital Stage Equity ------- ---- ------- -------- ---------- BEGINNING BALANCE, August 9, 2001 0 $0 $ 0 $ 0 $ 0 Shares issued for cash-founders at $0.001/sh. 10,271,000 10,271 0 0 10,271 Shares issued with debt at $0.017/sh. 850,000 850 12,926 0 13,776 Shares issued for services at $0.02/sh. 5,000 5 95 0 100 Shares issued for cash at $1.00/sh. 314,000 314 313,686 0 314,000 Net Loss 0 0 0 (132,174) (132,174) ------ ----- ------- ------- ------- BALANCE, December 31, 2001 11,440,000 11,440 326,707 (132,174) 205,973 Shares repurchased for cash (3,625,000)(3,625) 0 0 (3,625) Net Loss 0 0 0 (393,760) (393,760) ------ ---- ------ ------ ------- BALANCE, December 31, 2002 7,815,000 7,815 326,707 (525,934) (191,412) Net Loss 0 0 0 (153,494) (153,494) ------ ---- ------ ------ ------- BALANCE, December 31, 20037,815,000 7,815 326,707 (679,429) (344,907) Net Loss 0 0 0 ( 27,537) ( 27,537) ------ ----- ------ ------ ------ ENDING BALANCE, March 31, 2004 7,815,000 7,815 326,707 (706,966) (322,444) ======= ===== ===== ====== ====== See accompanying notes to condensed financial statements -4- PUREZZA GROUP, INC. (A Development Stage Enterprise) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited condensed financial statements of Purezza Group, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and Regulation S-B. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods presented have been included. These results have been determined on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of the Company's Annual Financial Statements for the years ending December 31, 2003 and 2002. Operating results for the three months ending March 31, 2004 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004. It is recommended that the accompanying condensed financial statements be read in conjunction with the financial statements and notes for the years ending December 31, 2003, and 2002 previously filed. NOTE 2 - NATURE OF BUSINESS Purezza Group, Inc. (the Company) is a Florida chartered development stage corporation, which as of March 31, 2004 conducted business in Ft. Lauderdale, Florida but as of April 23, 2004 moved its offices to Vero Beach, Florida. See Note 9, Subsequent Events. The Company was incorporated on August 9, 2001 to market a product called Phoslock. Phoslock is a patented product that efficiently removes phosphorus and other oxyanions in natural and industrial waters and wastewater streams. NOTE 3 - SUMMARY OF ACCOUNTING POLICIES Use of estimates The financial statements have been prepared in conformity with generally accepted accounting principles. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition and revenues and expenses for the year then ended. Actual results may differ significantly from those estimates. -5- PUREZZA GROUP, INC. (A Development Stage Enterprise) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDING MARCH 31, 2003 (UNAUDITED) NOTE 3 - SUMMARY OF ACCOUNTING POLICIES, CONTINUED Start-up costs Costs of start-up activities, including organization costs, are expensed as incurred, in accordance with Statement of Position (SOP) 98-5. Net Loss per share Basic loss per weighted average common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Stock Compensation For Services Rendered The Company may issue shares of common stock in exchange for services rendered. The costs of the services are valued according to generally accepted accounting principles and will be charged to operations. Revenue Recognition Revenue from product sales will be recognized at the time the sale is made. Property and Equipment All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, five or seven years, using the straight-line method. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges which do not increase the useful lives of the assets are charged to operations as incurred. Depreciation expense was $214 and $884 for the three months ending March 31, 2004 and 2003, respectfully. Fair Value of Financial Instruments The Company's financial instruments consist entirely of cash in bank and a convertible debenture note. The carrying amounts of such financial instruments, as reflected in the balance sheet, approximate the estimated fair value of the accounts as of March 31, 2004 and 2003. The estimated fair value is not necessarily indicative of the amounts the Company could realize in a current market exchange or of future earnings or cash flows. -6- PUREZZA GROUP, INC. (A Development Stage Enterprise) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) NOTE 4 - MANAGEMENT'S PLANS PROPOSED OPERATIONS Purezza Group, Inc. has no assets, liabilities or ongoing operations. Nevertheless, management believes that it may be able to recover some value for its shareholders by the adoption and implementation of a plan to seek, investigate and, if the results of such investigation warrants, effect a business combination with a suitable privately held company that has both business history and operating assets. Our potential success will be primarily dependent on the efforts and abilities of our new management team, who will have virtually unlimited discretion in searching for, negotiating and entering into a business combination transaction. Management believes that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our new management team believes that there are numerous privately held companies, seeking the perceived benefits may include facilitating debt financing or improving the terms on which additional equity may be sought, providing liquidity for the principals of the business, creating a means for providing stock incentives or similar benefits to key employees, providing liquidity for all stockholders and other factors. NOTE 5 - COMMITMENTS As of March 31, 2004 the Company was obligated to pay royalty payments pursuant to its license agreement for the use of the Company's product, Phoslock. The Company's license agreement was with Integrated Mineral Technology Pty Ltd. (Integrated), an Australian entity, which has also been a shareholder of the Company since the early organizational stage of the Company. Royalty payments due for the year 2003 had previously been waived by Integrated. Future minimum royalty payments under the agreement were to be as follows: 2004 843,750 2005 1,260,000 2006 1,260,000 2007 1,260,000 Thereafter 20,160,000 --------------- Total $ 24,783,750 =============== However, the liability has been transferred to another entity as of April 22, 2004. -7- PUREZZA GROUP, INC. (A Development Stage Enterprise) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) NOTE 6 - DEBENTURE NOTE PAYABLE During the quarter ending September 30, 2003, debenture note holder, Gregory A. Nagel, waived the accrued interest payable on the debenture note. The interest on the debenture note was waived through May, 2004. The Note was satisfied in full on April 22, 2004, subsequent to the balance sheet date. See Note 9, SUBSEQUENT EVENTS - DEBENTURE NOTE. NOTE 7 - PHOSLOCK PRODUCT CHANGE As of March 31, 2004, Purezza Group, Inc.in conjunction with its licensor has arranged for the production of a consistent Phoslock product. A granulation plant is now under construction in Kunming, China, which will produce Phoslock for distribution to all licensees. The Corporation's former president, Leonard M. Perle, who recently resigned due to health reasons and product consultant, Dr. Clifford Buntin, of the University of Southern California, along with special international cooperation from our Australian shareholders and licensor, were able to formulate a granule Phoslock product which is a vast improvement over the slurry product. All Phoslock license holders will be able to take delivery, commencing in May, 2004, of the new granule Phoslock. The new Phoslock should be economically superior, as it is a dry product which can be more easily produced, stored, shipped, and used. The previous slurry product was 80% water, making it less efficient to handle. As of April 23, 2004 the Phoslock product line was discontinued by the company and transferred to Purezza Marketing, Inc. See Note 9, SUBSEQUENT EVENTS. -8- PUREZZA GROUP, INC. (A Development Stage Enterprise) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) NOTE 8 - OPTIONS During the quarter ending December 31, 2003, the Corporation issued options to purchase common stock as follows: to Larry Legel, former President, Chief Executive Officer, Chief Administrative Officer, Director, Secretary, Treasurer and Chief Financial Officer, in the amount of 150,000 options at a strike price of $0.10 per share. The options may be exercised at any time for five years. The option date is October 20, 2003. The expiration date is October 20, 2008. The options were issued to Director/Officer in consideration for services rendered, and in anticipation of future services to be rendered. to Sanzari Family Trust, in the amount of 250,000 options at a strike price of $1.00 per share. The options may be exercised at any time for three years. The option date is October 27, 2003. The expiration date is October 27, 2006. The options were issued in consideration of the option holder providing working capital to the Corporation. to TJP Management, Inc., in the amount of 250,000 options at a strike price of $1.00 per share. The options may be exercised at any time for three years. The option date is October 27, 2003. The expiration date is October 27, 2006. The options were issued in consideration of the option holder providing working capital to the Corporation. to Gregory A. Nagel, in the amount of 1,000,000 options at a strike price of $1.00 per share. The options may be exercised at any time for five years. The option date is November 5, 2003. The expiration date is November 5, 2006. The options were issued in consideration of the option holder providing working capital to the Corporation. On April 22, 2004 the corporation issued options to purchase common stock as follows: to Gregory A. Nagel, subsequent to the balance sheet date, an option to purchase 5,000,000 shares was granted to Gregory A. Nagel. See Note 9, SUBSEQUENT EVENTS - OPTIONS. NOTE 9 - SUBSEQUENT EVENTS DEBENTURE NOTE In a stock for debt transaction dated April 22, 2004 the $600,000 Debenture Note Payable was satisfied in full. TRANSFER OF ASSETS TO PUREZZA MARKETING, INC. On April 23, 2004 Purezza Group, Inc. ("PRZA") transferred all of its assets to Purezza Marketing, Inc. ("PMI"). Concurrently with this transfer, PRZA distributed on a pro rata basis all of its ownership in PMI to the holders of its common stock (the "Distribution"). As a result of this transfer and the Distribution, PMI will operate independently from PRZA and as a successor to PRZA's business and operations. -9- PUREZZA GROUP, INC. (A Development Stage Enterprise) NOTES TO CONDENSED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) NOTE 9 - SUBSEQUENT EVENTS, CONTINUED TRANSFER OF SHARES TO KEATING REVERSE MERGER FUND, LLC On April 23, 2004, International Equities Group, Inc. sold 37,185,000 shares of the common stock of Purezza Group, Inc. owned by it to Keating Reverse Merger Fund, LLC. for an aggregate purchase price of $350,000. As of May 17, 2004 Keating Reverse Merger Fund, LLC (KRM) owns 42,185,000 shares, 80.35% of the Registrant's common stock and the other shareholders of Purezza Group, Inc. (PRZA) own 10,315,000 shares, or 19.65% of its common stock. IEG has no continuing economic interest in the company as to that block of 37,185,000 shares as either a stockholder or creditor. Included in the 42,815,000 shares owned by KRM is 5,000,000 shares purchased from the company by KRM for $50,000 @$.01 per share on April 26, 2004. IEG also transferred the $600,000 Debenture Note to the company and it was retired. See Form 8-K/A filed on May 14, 2004 for the pro forms effects of the transfer of the assets and debt to equity commission. SHARES ISSUED FOR SERVICES RENDERED On April 26, 2004, 2,000,000 shares of the company stock was issued to Kevin R. Keating, the new President of the company as executive compensation for services rendered. On April 26, 2004, 500,000 shares of the company stock was issued to Bertrand T. Unger for consulting services rendered. OPTION TO PURCHASE SHARES GRANTED TO GREGORY A. NAGEL In connection with this transaction, Gregory A. Nagel, the former debenture bond holder, received an option to purchase 5,000,000 pre-split shares of the common stock of Purezza Group, Inc. @ $.08 per share in exchange for the $600,000 debenture note. The option was granted for a year on April 22, 2004, and expires April 22, 2005. CHANGES IN BOARD OF DIRECTORS, OFFICERS, AND COMPANY ADDRESS In connection with this transaction, Larry Legel resigned as chairman of PRZA's Board of Directors and as its President and Kevin R. Keating was nominated to serve as a Director and as the Company's President, Secretary and Treasurer. Concurrently, the principal executive office of the company was moved to 936A Beachland Blvd., Suite 13, Vero Beach, FL 32963. LICENSE AGREEMENT On April 20, 2004 a royalty payment became due on the required fixed payment pursuant to the License Agreement. The Company had been negotiating an amendment to the aforesaid license agreement. The license and the related liability were transferred to Purezza Marketing, Inc., as of April 22, 2004. The Company no longer has the license agreement nor does it owe any royalty payments to the licensor. -10- THE FOLLOWING THREE PAGES ARE NOT PART OF THE FINANCIAL STATEMENTS BUT ARE INCLUDED AS SUPPORTING SCHEDULES PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS FOR THE THREE MONTHS ENDING MARCH 31, 2004 (UNAUDITED) For The Three Months Ending March 31, 2004 Other income 215 General and Administrative Expenses Professional Fees 5,926 Attorney Fees 1,000 Consulting Fees 2,150 Consulting Fees, EPA 2,500 CPA Fees 5,850 Depreciation Expense 214 Dues and Subscriptions 69 Licenses, Dues & Fees 150 Officer Salaries 8,333 Payroll Taxes 88 Delivery Charges 29 Travel Expenses 328 Bank Charges 407 Telephone 282 Other Expense 426 Total General and Administrative Expenses 27,752 Net Income/(Loss) (27,537) Deficit Accumulated Development Stage, Beginning (679,429) Deficit Accumulated Development Stage, Ending $(706,966) See accompanying notes to condensed financial statements. -Supporting Schedule- PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY AS OF AND FOR THE PERIOD FROM AUGUST 9, 2001 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED) Deficit Accumulated Additional During the Total Number of Common Paid-In Development Stockholders Shares Stock Capital Stage Equity ------- ---- ------- -------- ---------- BEGINNING BALANCE, August 9, 2001 0 $ - $ - $ - $ - Shares issued for cash-founders at $0.001/sh 6,646,000 6,646 0 0 6,646 Shares issued with debt at $0.017/sh 850,000 850 13,537 0 14,387 Shares issued for cash at $1.00/sh 314,000 314 313,686 0 314,000 Balance from shares issued for cash 7,810,000 7,810 327,223 0 335,033 Shares issued for services at $0.02/sh 5,000 5 95 0 100 Balance including services 7,815,000 7,815 327,318 0 335,133 Shares adjustment 0 0 (611) 0 (611) Balance subsequent to share sales 7,815,000 7,815 326,707 0 334,522 Net Loss, Period Ending December 31, 2001 (132,174) (132,174) BALANCE, December 31, 2001 7,815,000 7,815 326,707 (132,174) 202,348 Net Loss, Three Months Ending March 31, 2002 (76,370) (76,370) BALANCE, March 31, 2002 7,815,000 7,815 326,707 (208,544) 125,978 Net Loss, Three Months Ending June 30, 2002 (199,332) (199,332) See accompanying notes to condensed financial statements -Supporting Schedule- PUREZZA GROUP, INC. (A Development Stage Enterprise) CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY AS OF AND FOR THE PERIOD FROM AUGUST 9, 2001 (INCEPTION) THROUGH MARCH 31, 2004 (UNAUDITED) Deficit Accumulated Additional During the Total Number of Common Paid-In Development Stockholders Shares Stock Capital Stage Equity ------- ---- ------- -------- ---------- BALANCE, June 30, 2002 7,815,000 7,815 326,707 (407,876) (73,354) Net Loss, Three Months Ending September 30, 2002 (59,870) (59,870) BALANCE, September 30, 2002 7,815,000 7,815 326,707 (467,746) (133,224) Net Loss, Three Months Ending December 31, 2002 (58,188) (58,188) BALANCE, December 31, 2002 7,815,000 7,815 326,707 (525,934) (191,412) Net Loss, Three Months Ending March 31, 2003 (69,340) (69,340) BALANCE, March 31, 2003 7,815,000 7,815 326,707 (595,274) (260,752) Net Loss, Three Months Ending June 30, 2003 (62,664) (62,664) BALANCE, June 30, 2003 7,815,000 7,815 326,707 (657,938) (323,416) Net Income, Three Months Ending September 30, 2003 20,726 20,726 BALANCE, September 30, 2003 7,815,000 7,815 326,707 (637,212) (302,690) Net Loss, Three Months Ending December 31, 2003 (42,216) (42,216) BALANCE, December 31, 2003 7,815,000 7,815 326,707 (679,429) (344,907) Net Loss, Three Months Ending March 31, 2004 ( 27,537) ( 27,537) BALANCE, March 31, 2004 7,815,000 $7,815 $326,707 $(706,966) $372,444) See accompanying notes to condensed financial statements -Supporting Schedule- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. NOTE 9 - SUBSEQUENT EVENTS LICENSE AGREEMENT On April 22, 2004, the Phoslock License Agreement and the related liability to pay royalties to Integrated Mineral Technology Pty Ltd. were transferred from Purezza Group, Inc. to Purezza Marketing, Inc. and the Company discontinued its Phoslock line of business. At the time the transfers were made, the license agreement was being renegotiated. Pursuant to that agreement, a fixed royalty payment would have been due April 20, 2004 but that payment was not going to be paid because other issues concerning the license agreement were unresolved. Upon the transfer, Purezza Group, Inc. no longer has the license nor does it owe any royalty payments to the licensor. Since the original cost of the license had already been expensed in a prior year and the previously required royalty payments had been waived through 2003, there is no effect on the balance sheet as of March 31, 2004 due to the transfer. As of April 22, 2004 there is no future liability and Purezza Group, Inc. is no longer liable for $24,783,750 in future commitments as stated under Note 5, COMMITMENTS. -11- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. PLAN OF OPERATIONS - PREVIOUS PLAN AS OF MARCH 31, 2004 Significant changes have occurred between the previous Plan of Operations which had been in place as of March 31, 2004 and a new Plan of Operations which is in place as of this filing date, May 17, 2004, and operable since the changes that took place April 22, 23, and 26, 2004. See below, PLAN OF OPERATIONS - NEW PLAN AS OF APRIL 23, 2004 and notes to the financial statements under Note 9, SUBSEQUENT EVENTS. Prior to the changes, the Plan of Operations had been based on the business plan of using some of the Company's cash to market the Company's product. Basically, the previous Plan of Operations was to use the Company's approximately $200,000 cash to market Phoslock. The exact details as to what the Company was going to do to market Phoslock is no longer an important issue because the Company has discontinued its Phoslock line of business as of April 23, 2004. What is now the previous Plan of Operations, but as of March 31, 2004, was the only Plan, is fully explained in detail in all of the previous filings of the Company: Forms 10QSB's, the Form 10KSB, and the Form SB-2 Registration Statement, all of which are available for review at the Securities and Exchange Commission's Edgar System at www.sec.gov. PLAN OF OPERATIONS - NEW PLAN AS OF APRIL 23, 2004 Subsequent to the changes, the Company's new Plan of Operations is based on attracting a suitable privately held Company, one that has both a business history and operating assets, with which to effect a business combination. The significant changes that occurred are explained in the footnotes to the financial statements that are included herewith under Note 9, SUBSEQUENT EVENTS and are summarized as follows: The Company issued 42,185,000 additional shares to a new controlling shareholder; retired the $600,000 debenture note; transferred the license agreement to sell Phoslock; transferred all of its assets including over $200,000 in cash; transferred its liability to pay $24,783,750 in future royalty payments, changed its Officers, Directors, and address; and is headed in a completely different business direction, as compared to the Plan to market Phoslock which was the Plan of Operations as of March 31, 2004. Purezza Group, Inc. has no assets, liabilities or ongoing operations. Nevertheless, management believes that it may be able to recover some value for its shareholders by the adoption and implementation of a plan to seek, investigate and, if the results of such investigation warrants, effect a business combination with a suitable privately held company that has both business history and operating assets. Our potential success will be primarily dependent on the efforts and abilities of our new management team, who will have virtually unlimited discretion in searching for, negotiating and entering into a business combination transaction. -12- The details of these changes are as follows: DEBENTURE NOTE In a stock for debt transaction dated April 22, 2004 the $600,000 Debenture Note Payable was satisfied in full. TRANSFER OF ASSETS TO PUREZZA MARKETING, INC. On April 23, 2004 Purezza Group, Inc. ("PRZA") transferred all of its assets to Purezza Marketing, Inc. ("PMI"). Concurrently with this transfer, PRZA distributed on a pro rata basis all of its ownership in PMI to the holders of its common stock (the "Distribution"). As a result of this transfer and the Distribution, PMI will operate independently from PRZA and as a successor to PRZA's business and operations. TRANSFER OF SHARES TO KEATING REVERSE MERGER FUND, LLC On April 23, 2004, International Equities Group, Inc. sold 37,185,000 shares of the common stock of Purezza Group, Inc. owned by it to Keating Reverse Merger Fund, LLC. for an aggregate purchase price of $350,000. As of May 11, 2004 Keating Reverse Merger Fund, LLC (KRM) owns 42,185,000 shares, or 84.37% of the Registrant's common stock and the other shareholders of Purezza Group, Inc. (PRZA) own 7,815,000 shares, or 15.63% of its common stock. IEG has no continuing economic interest in the company as to that block of 37,185,000 shares as either a stockholder or creditor. Included in the 42,815,000 shares owned by KRM is 5,000,000 shares purchased from the company by KRM for $50,000 @$.01 per share on April 26, 2004. IEG also transferred the $600,000 Debenture Note to the company and it was retired. SHARES ISSUED FOR SERVICES RENDERED On April 26, 2004, 2,000,000 shares of the company stock was issued to Kevin R. Keating, the new President of the company as executive compensation for services rendered. On April 26, 2004, 500,000 shares of the company stock was issued to Bertrand T. Unger for consulting services rendered. OPTION TO PURCHASE SHARES GRANTED TO GREGORY A. NAGEL In connection with this transaction, Gregory A. Nagel, the former debenture bond holder, received an option to purchase 5,000,000 pre-split shares of the common stock of Purezza Group, Inc. @ $.08 per share in exchange for the $600,000 debenture note. The option was granted for a year on April 22, 2004, and expires April 22, 2005. -13- CHANGES IN BOARD OF DIRECTORS, OFFICERS, AND COMPANY ADDRESS In connection with this transaction, Larry Legel resigned as chairman of PRZA's Board of Directors and as its President and Kevin R. Keating was nominated to serve as a Director and as the Company's President, Secretary and Treasurer. Concurrently, the principal executive office of the company was moved to 936A Beachland Blvd., Suite 13, Vero Beach, FL 32963. LICENSE AGREEMENT On April 20, 2004 a royalty payment became due on the required fixed payment pursuant to the License Agreement. The Company had been negotiating an amendment to the aforesaid license agreement. The license and the related liability were transferred to Purezza Marketing, Inc., as of April 22, 2004. The Company no longer has the license agreement nor does it owe any royalty payments to the licensor. PLAN OF OPERATIONS - NEW PLAN AS OF APRIL 23, 2004 Management believes that the selection of a business opportunity will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our new management team believes that there are numerous privately held companies, seeking the perceived benefits may include facilitating debt financing or improving the terms on which additional equity may be sought, providing liquidity for the principals of the business, creating a means for providing stock incentives or similar benefits to key employees, providing liquidity for all stockholders and other factors. -14- Item 3. CONTROLS AND PROCEDURES. The Company's Chief Executive Officer and Chief Financial Officer evaluated the Company's disclosure controls and procedures within the 90 days preceding the filing date of this quarterly report. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in ensuring that material information required to be disclosed is included in the reports that it files with the Securities and Exchange Commission. There were no significant changes in the Company's internal controls or, to the knowledge of the management of the Company, in other factors that could significantly affect these controls subsequent to the evaluation date. PART II-- OTHER INFORMATION Item 1. Legal Proceedings. Not Applicable. Item 2. Changes in Securities. Not Applicable. Item 3. Defaults Upon Senior Securities. Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders. Not Applicable Item 5. Other Information. Not Applicable. -15- Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits and Index of Exhibits Exhibit Number Description 3i) Articles of Incorporation (1) 3(ii) By-Laws (1) 31.3(i)-3(ii) Denotes exhibits previously filed on April 1, 2003 with Purezza Group, Inc.'s SB-2/A Registration Statement amendment 6., File #333-85306, hereby incorporated by reference. 31.1 Certification on September 3, 2003 of Chief Executive Officer for the quarter ending March 31, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification on September 3, 2003 of Chief Financial Officer for the quarter ending March 31, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification on September 3, 2003 of Chief Executive Officer for the quarter ending March 31, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification on September 3, 2003 of Chief Financial Officer for the quarter ending March 31, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sabanes-Oxley Act of 2002. 31.1-32.2 Denotes exhibits previously filed on September 3, 2003 with Purezza Group, Inc.'s, Form 10-QSB for the quarter ending March 31, 2003. 31.3 Certification on September 10, 2003 of Chief Executive Officer for the quarter ending June 30, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.4 Certification on September 10, 2003 of Chief Financial Officer for the quarter ending June 30, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.5 Certification on September 10, 2003 of Chief Executive Officer for the quarter ending June 30, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.6 Certification on September 10, 2003 of Chief Financial Officer for the quarter ending June 30, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 31.3-32.6 Denotes exhibits previously filed on September 10, 2003 with Form 10QSB for the quarter ending June 30, 2003. -16- Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits and Index of Exhibits Exhibit Number Description 31.5 Certification on November 13, 2003 of Chief Executive Officer for the quarter ending September 30, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.6 Certification on November 13, 2003 of Chief Financial Officer for the quarter ending September 30, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.7 Certification on November 13, 2003 of Chief Executive Officer for the quarter ending September 30, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.8 Certification on November 13, 2003 of Chief Financial Officer for the quarter ending September 30, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sabanes-Oxley Act of 2002. 31.5-32.8 Denotes exhibits filed on November 13, 2003 with Form 10QSB for the quarter ending September 30, 2003. 31.7 Certification on March 30, 2004 of Chief Executive Officer for the quarter ending December 31, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.8 Certification on March 30, 2004 of Chief Financial Officer for the quarter ending December 31, 2003 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.9 Certification on March 30, 2004 of Chief Executive Officer for the quarter ending December 31, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.10 Certification on March 30, 2004 of Chief Financial Officer for the quarter ending December 31, 2003 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 31.7-32.10 Denotes exhibits filed on March 30, 2004 with Form 10KSB for the year ending December 31, 2003. -17- Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits and Index of Exhibits Exhibit Number Description 31.9 Certification on May 17, 2004 of Chief Executive Officer for the quarter ending March 31, 2004 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.10 Certification on May 17, 2004 of Chief Financial Officer for the quarter ending March 31, 2004 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.11 Certification on May 17, 2004 of Chief Executive Officer for the quarter ending March 31, 2004 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.12 Certification on May 17, 2004 of Chief Financial Officer for the quarter ending March 31, 2004 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 31.9-32.12 Denotes exhibits filed on May 17, 2004 with Form 10QSB for the quarter ending March 31, 2004. -18- (b) Reports on Form 8-K. On July 2, 2003, the registrant filed a Form 8-K/A under Item 4. "CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT", stating that the registrant changed its accounting firm from Durland and Company, CPAs, P.A. to Daszkal Bolton LLP. On June 12, 2003, the registrant filed a Form 8-K under Item 4. "CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT", stating that the registrant changed its accounting firm from Durland and Company, CPAs, P.A. to Daszkal Bolton LLP. On November 7, 2003, the registrant filed a Form 8-K under Item 4, "CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT", stating that the registrant changed its accounting firm from Daszkal Bolton LLP back to Durland and Company, CPA's, PA. On April 30, 2004, the registrant filed a Form 8-K/A under Item 4, "CHANGES IN CONTROL OF REGISTRANT", "ACQUISITION OR DISPOSITION OF ASSETS", "FINANCIAL STATEMENTS AND EXHIBITS". On May 3, 2004, the registrant filed a Form 8-K/A under Item 4, "CHANGES IN CONTROL OF REGISTRANT", "ACQUISITION OR DISPOSITION OF ASSETS", "FINANCIAL STATEMENTS AND EXHIBITS". On May 14, 2004, the registrant filed a Form 8-K/A under Item 4, "CHANGES IN CONTROL OF REGISTRANT", "ACQUISITION OR DISPOSITION OF ASSETS", "FINANCIAL STATEMENTS AND EXHIBITS". SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 17, 2004 Purezza Group, Inc. (Registrant) /s/ Kevin R. Keating Kevin R. Keating President and Chief Executive Officer /s/ Kevin R. Keating Kevin R. Keating Principal Financial Officer and Principal Accounting Officer and Chief Administrative Officer -19- EX-31 3 purezzaex311.htm Exhibit 31.7 CERTIFICATIONS ACCOMPANYING PERIODIC REPORT PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATIONS I, Kevin R. Keating, certify that: 1. I have reviewed this quarterly report for March 31, 2004 on Form 10QSB of Purezza Group, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: May 17, 2004 /s/ Kevin R. Keating Kevin R. Keating President and Chief Executive Officer EX-31 4 purezzaex312.htm Exhibit 31.8 CERTIFICATIONS ACCOMPANYING PERIODIC REPORT PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATIONS I, Kevin R. Keating, certify that: 1. I have reviewed this quarterly report for March 31, 2004 on Form 10QSB of Purezza Group, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: May 17, 2004 /s/ Kevin R. Keating Kevin R. Keating Principal Financial Officer and Principal Accounting Officer and Chief Administrative Officer EX-32 5 purezzaex321.htm Exhibit 32.9 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Form 10QSB quarterly report of Purezza Group, Inc. (the "Company") for the period ended March 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: o the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and o the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. May 17, 2004 /s/ Kevin R. Keating Kevin R. Keating President and Chief Executive Officer EX-32 6 purezzaex322.htm Exhibit 32.10 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Form 10QSB quarterly Report of Purezza Group, Inc. (the"Company") for the period ended March 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: o the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and o the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. May 17, 2004, /s/ Kevin R. Keating Kevin R. Keating Principal Financial Officer and Principal Accounting Officer