U. S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB


     [X] Quarterly  report under Section 13 or 15(d) of the Securities  Exchange
Act of 1934

     For the quarterly period ended June 30, 2003
                                    -------------

     [ ] Transition report under Section 13 or 15(d) of the Exchange Act

         For the transition period from __________ to __________

                         Commission File Number 0-49659
                                                -------

                                    XRG, INC.
                                    --------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                DELAWARE                                58-2583457
                --------                                ----------
    (State or Other Jurisdiction of                 (I.R.S. Employer
     Incorporation or Organization)                Identification No.)

               5301 Cypress Street, Suite 111 Tampa, Florida 33607
               ---------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (813) 637-0700
                                 ---------------
                           (Issuer's Telephone Number)

         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 a
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
     ---     ---

         The number of shares outstanding of the Issuer's Common Stock, $.001
Par Value, as of July 10, 2003 was 14,635,346.

         Transitional Small Business Disclosure Format:

Yes       No  X
    ---      ---

<PAGE>
                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

                   Condensed Consolidated Financial Statements

              Three Months Ended June 30, 2003 and 2002 (Unaudited)
             and the Period May 1, 1999 to June 30, 2003 (Unaudited)


                                      Index



                                                                           Page
Part I - Financial Information                                             ----

Item 1.  Financial Statements

         Consolidated Balance Sheet -
           June 30, 2003...................................................  1

         Consolidated Statements of Operations -
           Three months ended June 30, 2003 and 2002
                  and the period May 1, 1999 to June 30, 2003..............  2

         Statements of Changes in Stockholders' Deficit -
           Period May 1, 1999 to June 30, 2003.............................  3

         Statements of Cash Flows -
           Three months ended June 30, 2003 and 2002
                  and the period May 1, 1999 to June 30, 2003..............  4

         Notes to Condensed Consolidated Financial Statements..............  6

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations.............................  9

Item 3.  Controls & Procedures............................................. 12

Part II - Other Information

Item 1. Legal Proceedings.................................................. 13

Item 2. Change in Securities and Use of Proceeds........................... 13

Item 3. Defaults Upon Senior Securities.................................... 14

Item 5. Other Information.................................................. 14

Item 6. Exhibits........................................................... 14


Signatures................................................................. 15

                                       i
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                  June 30, 2003
                                   (unaudited)
<TABLE>

<S>                                                                                  <C>
Assets
Current assets:
   Cash                                                                               $              6,838
                                                                                        -------------------
Total current assets                                                                                 6,838

Equipment, net of accumulated depreciation                                                          56,513

Acquisition deposit                                                                                 50,000
                                                                                        -------------------

                                                                                      $            113,351
                                                                                        ===================


Liabilities and Stockholders' Deficit

Current liabilities:
   Accounts payable (including $58,455 to related party)                              $             99,195
   Accrued expenses                                                                                 35,925
   Related party advances                                                                           31,626
                                                                                        -------------------
Total current liabilities                                                                          166,746
                                                                                        -------------------

Long-term liabilities:
   Convertible notes payable; net of unamortized discount
     of  $251,576                                                                                  178,424
                                                                                        -------------------
Total long-term liabilities                                                                        178,424
                                                                                        -------------------

                                                                                        -------------------
Total liabilities                                                                                  345,170
                                                                                        -------------------

Stockholders' deficit:
   Series A Preferred stock; $.001 par value; 5,000,000 shares authorized;
     5,000,000 shares issued and outstanding                                                         5,000
   Preferred stock; $.001 par value; 45,000,000 shares authorized;
     0 shares issued and outstanding
   Common stock; $.001 par value; 100,000,000 shares authorized;
     14,635,346 shares issued and outstanding                                                       14,636
   Common stock payable                                                                            963,480
   Additional paid-in capital                                                                   16,115,982
   Stock subscription receivable                                                                    (5,000)
   Accumulated deficit for unrelated dormant operations                                        (15,405,274)
   Deficit accumulated during development stage                                                 (1,920,643)
                                                                                        -------------------
Total stockholders' deficit                                                                       (231,819)
                                                                                        -------------------

                                                                                      $            113,351
                                                                                        ===================
</TABLE>


The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       1
<PAGE>

<TABLE>
<CAPTION>


                                                       XRG, Inc. and Subsidiary
                                                     (A Development Stage Company)
                                                 Consolidated Statements of Operations
                                                              (unaudited)


                                                                                                      Period
                                                   Three Month Period Ended June 30,               May 1, 1999
                                               ----------------------------------------             to June 30,
                                                      2003                    2002                      2003
                                               ----------------        ----------------        -------------------

<S>                                           <C>                     <C>                     <C>
Revenues                                      $               -       $         224,948       $            796,231

Cost of revenues                                              -                 249,633                    897,753
                                                ----------------        ----------------        -------------------

Gross profit (loss)                                           -                 (24,685)                  (101,522)

Selling, general and administrative
      expenses                                          162,490                  73,019                  1,162,324
                                                ----------------        ----------------        -------------------

                                                       (162,490)                (97,704)                (1,263,846)

      Interest expense                                 (465,771)                (22,013)                  (656,797)
                                                ----------------        ----------------        -------------------
                                                       (465,771)                (22,013)                  (656,797)
                                                ----------------        ----------------        -------------------

Net loss                                      $        (628,261)      $        (119,717)      $         (1,920,643)
                                                ================        ================        ===================

Basic loss per share                          $           (0.06)      $           (0.01)      $              (0.25)
                                                ================        ================        ===================

Weighted average number of
      common shares outstanding                      10,693,097               9,087,822                  7,649,182
                                                ================        ================        ===================
</TABLE>



The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       2
<PAGE>

<TABLE>
<CAPTION>

                                                            XRG, Inc. and Subsidiary
                                                         (A Development Stage Company)
                                          Consolidated Statements of Changes in Stockholders' Deficit
                                                                   (unaudited)

                                                 Three Months Ended June 30, 2003 and the Period
                                                          May 1, 1999 to June 30,2003





                                              Common Stock                                                     Preferred Stock
                                       -----------------------------       Common           Stock        --------------------------
                                           Number of                        Stock         Subscription      Number of
                                            Shares          Amount         Payable         Receivable        Shares        Amount
                                       ---------------  ------------   --------------  ----------------  -------------  -----------
<S>                                    <C>            <C>            <C>             <C>                <C>          <C>
Balance, May 1, 1999,
   as previously reported                  1,495,822   $       1,496  $            - $              -              - $          -

Prior period adjustment -
 adjustment of common
   shares outstanding for
   shares not turned in for
   reverse stock split                       175,090             175               -                -              -            -
                                       ---------------  ------------   --------------  ----------------  -------------  -----------

Balance, May 1, 1999, as restated          1,670,912           1,671               -                -              -            -


Issuance of stock for acquisition          3,000,000           3,000               -                -              -            -

Stock issued for services at
    $.001 par (May 1999)                   1,550,000           1,550               -                -              -            -

Stock issued in satisfaction
   of debt at $1.36 per share
   (March 2000)                              110,000             110               -                -              -            -

Net loss for the period                            -               -               -                -              -            -
                                       ---------------  ------------   --------------  ----------------  -------------  -----------
Balance,March 31, 2000                     6,330,912           6,331               -                -              -            -

Stock issued in satisfaction
   of debt at $1.23 per share
   (April 2000)                              182,000             182               -                -              -            -

Net loss for the year                              -               -               -                -              -            -
                                       ---------------  ------------   --------------  ----------------  -------------  -----------
Balance, March 31, 2001                    6,512,912           6,513               -                -              -            -

XRG, Inc. stock issued
   for services at $.001
   par (October 2001)                      2,750,000           2,750               -                -              -            -

Net loss for the year                              -               -               -                -              -            -
                                       ---------------  ------------   --------------  ----------------  -------------  -----------
Balance, March 31, 2002                    9,262,912           9,263               -                -              -            -

XRG, Inc. stock issued
   for services at $.001
   par (March 2003)                        1,386,864           1,387               -                -              -            -

XRG, Inc. stock to be issued
   for interest (March 2003)                                                  57,648                -

Beneficial conversion feature
   of convertible debt

Net loss for the year                              -              -                -                -              -            -
                                       ---------------  ------------   --------------  ----------------  -------------  -----------
Balance, March 31, 2003                   10,649,776         10,650           57,648                -              -            -

XRG, Inc. preferred stock issued                                                               (5,000)     5,000,000        5,000

XRG, Inc. stock to be issued
   for interest (June 2003)                                                   17,832                -

XRG, Inc. stock to be
issued for debt                                                              843,000

XRG, Inc. stock to be
issued for cash ($.25 per share)                                              45,000

XRG, Inc. stock issued for warrant         3,985,570          3,986
   conversion (June 2003)

Exercise of warrants

Beneficial conversion feature of
   convertible debt

Net loss for the period                            -              -                -                -              -            -
                                       ---------------  ------------   --------------  ----------------  -------------  -----------
Balance, June 30, 2003                    14,635,346 $       14,636 $        963,480 $         (5,000)     5,000,000 $      5,000
                                       ===============  ============   ==============  ================  =============  ===========

</TABLE>

<PAGE>

<TABLE>


                     Accumulated
                     Deficit for  Accumulated
      Additional     Unrelated    Deficit During
      Paid-in        Dormant       Development
      Capital        Operations      Stage         Total
    ------------   ------------  -------------   ------------
<S>              <C>            <C>           <C>
  $  15,030,193  $ (15,405,274) $          -  $    (373,585)



           (175)     -             -               -
     ------------   ------------  -------------   ------------
     15,030,018    (15,405,274)            -       (373,585)


              -              -             -          3,000

                                                          -
              -              -             -          1,550
                                                          -

                                                          -
        149,641              -             -        149,751
                                                          -
             -              -        (15,029)       (15,029)
    ------------   ------------  -------------   ------------
     15,179,659    (15,405,274)      (15,029)      (234,313)



        222,989              -             -        223,171

             -              -       (123,389)      (123,389)
    ------------   ------------  -------------   ------------

     15,402,648    (15,405,274)     (138,418)      (134,531)



              -              -             -          2,750

              -              -      (324,136)      (324,136)
    ------------   ------------  -------------   ------------

     15,402,648    (15,405,274)     (462,554)      (455,917)



              -              -             -          1,387


                                                     57,648

        250,000                                     250,000
             -              -       (829,828)      (829,828)
     ------------   ------------  -------------   ------------

     15,652,648    (15,405,274)   (1,292,382)      (976,710)

                                                          -


                                                     17,832


                                                    843,000


                                                     45,000

         (3,986)                                          -


            120                                         120


        467,200                                     467,200

             -              -       (628,261)      (628,261)
     ------------   ------------  -------------   ------------

  $  16,115,982  $ (15,405,274) $ (1,920,643) $    (231,819)
     ============   ============  ============    ============

</TABLE>


The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       3
<PAGE>

                                     XRG, Inc. and Subsidiary
                                  (A Development Stage Company)
                              Consolidated Statements of Cash Flows
                                           (unaudited)

<TABLE>

                                                                                                          Period
                                                                   Three Month Period Ended June 30,   May 1, 1999
                                                                    --------------------------------   to June 30,
                                                                        2003             2002             2003
                                                                   ---------------   --------------  ---------------

<S>                                                              <C>               <C>             <C>
Operating activities
       Net loss                                                        $ (628,261)      $ (119,717)    $ (1,920,643)
                                                                   ---------------   --------------  ---------------

       Adjustments to reconcile net loss to net
        cash used by operating
        activities:
           Depreciation and amortization                                    3,373              400           12,413
           Loss on acquisition                                                  -                -            3,000
           Stock issued for services                                            -                -            5,687
           Stock issued in lieu of interest                                17,832                -           75,480
           Amorization of discount on convertible notes                   429,266                -          465,624
           (Increase) decrease in:
             Accounts receivable                                                -          (33,731)               -
           Increase (decrease) in:
             Accounts payable                                              42,473          (34,489)          79,177
             Accrued expenses                                                 472           11,701           35,166
                                                                   ---------------   --------------  ---------------
       Total adjustments                                                  493,416          (56,119)         676,547
                                                                   ---------------   --------------  ---------------

                                                                   ---------------   --------------  ---------------
       Net cash used by operating activities                             (134,845)        (175,836)      (1,244,096)
                                                                   ---------------   --------------  ---------------

Investing activities
       Purchase of property and equipment                                       -                -          (48,909)
       Acquisition deposit                                                (50,000)               -          (50,000)
                                                                   ---------------   --------------  ---------------
       Net cash used by investing activities                              (50,000)               -          (98,909)
                                                                   ---------------   --------------  ---------------

Financing activities
       Net borrowings on stockholder
          advances                                                              -                -           31,626
       Proceeds from common stock to be issued                             45,000                -           45,000
       Proceeds from issuance of notes payable                            130,120          103,000        1,313,120
       Principal payments on notes payable                                      -                -          (40,000)
                                                                   ---------------   --------------  ---------------
       Net cash provided by financing activities                          175,120          103,000        1,349,746
                                                                   ---------------   --------------  ---------------

       Net increase (decrease) in cash                                     (9,725)         (72,836)           6,741

       Cash at beginning of period                                         16,563          315,179               97
                                                                   ---------------   --------------  ---------------

       Cash at end of period                                              $ 6,838        $ 242,343          $ 6,838
                                                                   ===============   ==============  ===============

</TABLE>


The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

                                       4
<PAGE>


                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

           Condensed Consolidated Statements of Cash Flows (Unaudited)


<TABLE>



                                                                 Three Months Ended                  Period May 1,
                                                                       June 30,                        1999 to
                                                            --------------------------------           June 30,
                                                                2003              2002                   2003
                                                            -------------------------------------------------------
<S>                                                       <C>                <C>                 <C>
Supplemental disclosures of cash flow
    information and noncash investing
    and financing activities:
        Cash paid during the period for interest            $      18,201     $       10,310      $      93,715
                                                            =======================================================

</TABLE>

        During the year ended March 31, 2000, the Company acquired certain
        assets of USA Polymers, Inc. in exchange for 3,000,000 shares of common
        stock valued at $3,000.

        During the year ended March 31, 2000, the Company issued 110,000 shares
        of common stock in payment of debt in the amount of $149,751.

        During the year ended March 31, 2001, the Company issued 182,000 shares
        of common stock in payment of debt in the amount of $223,171.

        During the year ended March 31, 2003, the Company financed the purchase
        of computer equipment in the amount of $20,017.

        During the year ended March 31, 2003, the Company recorded a discount on
        convertible notes payable for $250,000, which related to the beneficial
        conversion feature of the notes and the warrants issued with those
        notes. The discount is being amortized over the life of the related
        notes.

        During the three months ended June 30, 2003, the Company recorded a
        discount on convertible notes payable for $130,000 which related to the
        beneficial conversion feature of the notes payable and the warrants
        issued with these notes. The discount is being amortized over the life
        of the related notes.

        During the quarter ended June 30, 2003, the Company entered into
        agreements with note holders to convert $843,000 in notes payable into
        1,506,000 shares of common stock. The Company has classified these
        shares as a stock payable in the financial statements.



The accompanying notes are an integral part of the condensed consolidated
financial statements.

                                       5
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements

              Three Months Ended June 30, 2003 and 2002 (Unaudited)
             and the Period May 1, 1999 to June 30, 2003 (Unaudited)


1.      Condensed Consolidated Financial Statements

In the opinion of management, all adjustments consisting only of normal
recurring adjustments necessary for a fair statement of (a) the results of
operations for the three months ended June 30, 2003 and 2002 and the period May
1, 1999 to June 30, 2003, (b) the financial position at June 30, 2003, and (c)
cash flows for the three-month periods ended June 30, 2003 and 2002 and the
period May 1, 1999 to June 30, 2003, have been made.

The unaudited condensed consolidated financial statements and notes are
presented as permitted by Form 10-QSB. Accordingly, certain information and note
disclosures normally included in condensed consolidated financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been omitted. The accompanying condensed
consolidated financial statements and notes should be read in conjunction with
the audited financial statements and notes of the Company for the fiscal year
ended March 31, 2003. The results of operations for the three-month periods
ended June 30, 2003 and 2002 are not necessarily indicative of those to be
expected for the entire year.

The accompanying condensed consolidated financial statements have been prepared
on a going concern basis which contemplates continuity of operations and
realization of assets and liquidation of liabilities in the ordinary course of
business. Because of significant operating losses, the Company's ability to
continue as a going concern is dependent upon its ability to obtain sufficient
additional financing and, ultimately, upon future profitable operations. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue in existence.

2.      Per Share Calculations

Per share data was computed by dividing net loss by the weighted average number
of shares outstanding during the three months ended June 30, 2003 and 2002. The
weighted average shares outstanding for the three months ended June 30, 2003 was
10,693,097 as compared to 9,087,822 for the three months ended June 30, 2002.

3.      Notes Payable

Please refer to the audited consolidated financial statements consisting of the
Company's consolidated balance sheet as of March 31, 2003 and the related
consolidated statements of operations, changes in stockholders' deficit, and
cash flows for the year then ended.

During the three months ended June 30, 2003, the Company issued $130,000 of
convertible notes payable. In connection with the notes, the Company issued
detachable warrants to purchase 260,000 shares of the Company's restricted
common stock.

                                       6
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements

              Three Months Ended June 30, 2003 and 2002 (Unaudited)
             and the Period May 1, 1999 to June 30, 2003 (Unaudited)

3.  Notes Payable (continued)

During the three months ended June 30, 2003, the Company recorded a discount on
convertible notes payable for $130,000 which related to the beneficial
conversion feature of the notes payable and the warrants issued with these
notes. The discount is being amortized over the life of the related notes. The
value of the warrants was $76,508 based on the Company's calculation under the
Black-Scholes option pricing model and was allocated to the note proceeds as a
part of the discount on notes payable.

The following assumptions were used to estimate the fair value of stock options
using the Black-Scholes method at June 30, 2003:

Dividend yield                              0%
Expected volatility                         0%
Average expected option life                1 year
Risk-free interest rate                     1.23% to 1.62%

In June 2003, note holders holding approximately $843,000 of the Company's notes
payable voluntarily elected to convert their principal into the Company's common
stock.  1,506,000  shares of common  stock  will be  issued  for this  principal
conversion.  Since these notes were converted to common stock subsequent to June
2003,  the  Company has  classified  these notes as common  stock  payable.  The
Company  recognized  the  beneficial  conversion  feature of these  notes  which
totaled $337,200 as interest expense during the period ended June 30, 2003.

4.  Equity Transactions

In June 2003, warrants were exercised to acquire 3,985,570 shares of our common
stock for nominal consideration. These shares were issued in July 2003, and have
been reflected as issued and outstanding in the Company's June 30, 2003
financial statements.

During the three month period ended June 30, 2003, the Company raised $45,000
pursuant to a stock purchase agreement in exchange for 180,000 shares of our
restricted common stock. The Company has classified these shares as a stock
payable in the financial statements.

On July 7, 2003, the Company approved an amendment to its certificate of
incorporation at a special meeting of stockholders. This Amendment to the
Company's Certificate of Incorporation increases the authorized number of common
shares from 15,000,000 to 100,000,000, par value $.001 and authorizes the board
of directors to issue up to 50,000,000 preferred shares, par value $.001
issuable in series with such terms, rights and preferences as determined by
subsequent resolutions of the Board of Directors.

                                       7
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements

              Three Months Ended June 30, 2003 and 2002 (Unaudited)
             and the Period May 1, 1999 to June 30, 2003 (Unaudited)

4.  Equity Transactions (continued)

In June 2003, the Board of Directors approved and adopted resolutions
establishing and designating 5,000,000 shares of Series A Preferred Stock $.001
par value. The holders of Series A Preferred Stock are entitled to ten votes for
each share held on all matters on which the holders of the Company's Common
Stock are entitle to vote and shall vote together with the holders of Common
Stock and not as a separate class or series. Series A Preferred Stock shall have
no dividend, conversion, or redemption rights and no liquidation preferences.

In June 2003, three of the Company's officers and directors subscribed to
purchase an aggregate of 5,000,000 shares of Series A Voting Preferred Stock for
the aggregate par value of the shares or $5,000.

5.  Subsequent Events

In June 2003, the Company executed a purchase agreement with a truckload carrier
in Sweetwater, Tennessee to acquire equipment assets consisting of approximately
275 freight trailers. The purchase price of these assets is approximately
$3,400,000, including the assumption of approximately $2,200,000 of equipment
loans, the payment of $50,000 in cash, and the issuance 1,150,000 shares of the
Company's Common Stock. In addition, the Company entered into a fleet owner
agreement with the truckload carrier to manage the utilization of these
purchased assets for a two year period. Pursuant to the terms of this agreement,
the Company will pay to the truckload carrier 67% of gross freight revenues as
compensation for the movement of its freight. The closing date for the
transaction is expected in August 2003.

In July 2003, the Company entered into a three year employment agreement with
its Chief Operating Officer. Under this agreement, he is entitled to an annual
base salary of not less than $120,000 and is entitled to additional bonus
compensation as determined by the Company's board of directors or Compensation
Committee. Such bonuses may be paid in cash or issued in shares of the Company's
Common Stock on such terms as approved by the board of directors. He is entitled
to an automobile allowance of $600 per month during the term of his agreement.
He has agreed not to compete with the Company during the term of this agreement
and for a period of two (2) years after termination of this agreement.

On July 7, 2003, an amendment to the Company's Certificate of Incorporation
increasing the authorized number of common shares from 15,000,000 to
100,000,000, par value $.001 and authorizing the board of directors to issue up
to 50,000,000 preferred shares, par value $.001 issuable in series with such
terms, rights and preferences as determined by subsequent resolutions of the
Board of Directors was approved in a special shareholder meeting. The Company's
financial statements at June 30, 2003 reflect this amendment to the Company's
Certificate of Incorporation.

                                       8
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements contained in this Report on Form 10-QSB, that are not purely
historical, are forward-looking information and statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These include statements regarding the Company's
expectations, intentions, or strategies regarding future matters. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof. It is important to note that the
Company's actual results could differ materially from those projected in such
forward-looking statements contained in this Form 10-QSB. The forward-looking
statements contained here-in are based on current expectations that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments regarding, among other things, the Company's ability to secure
financing or investment for capital expenditures, future economic and
competitive market conditions, and future business decisions. All these matters
are difficult or impossible to predict accurately and many of which may be
beyond the control of the Company. Although the Company believes that the
assumptions underlying its forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this form 10-QSB will prove to be
accurate.


GENERAL

We are a development stage enterprise that is focused on acquiring and operating
both asset and non-asset based truck-load carriers in the contiguous 48 states.
In June 2003, we executed a purchase agreement with J. Bently Companies, Inc., a
truckload carrier in Sweetwater, Tennessee to acquire equipment assets
consisting of approximately 275 freight trailers. The purchase price of these
assets is approximately $3,400,000, including the assumption of approximately
$2,200,000 of equipment loans, the payment of $50,000 in cash, and the issuance
1,150,000 shares of XRG common stock with registration rights. An additional
2,200,000 shares of our common stock will be escrowed as collateral for the
equipment loans. In addition, In May 2003, we entered into a fleet owner
agreement with J. Bently Companies, Inc. to manage the utilization of these
purchased assets for a two year period. Pursuant to the terms of this agreement,
XRG will pay to J. Bently Companies, Inc. 67% of gross freight revenues as
compensation for the movement of our freight. The closing date for the J. Bently
Companies, Inc. purchase agreement and fleet owner agreement is expected in
August 2003.

We believe that we have identified a significant opportunity to consolidate
profitable, established medium-sized (under $30 million in revenue) truckload
carriers that have developed long-term customer relationships. The trucking
industry has exhibited strong growth due to the trend toward just-in-time
inventories, and the general increase in the need for transportation of
commodities. Truckload carriers have become the critical link in the
distribution chain between manufacturers and/or distributors and the
marketplace. Time-definite delivery has become an important element of this
distribution chain and is a contributing factor in successful just-in-time

                                       9
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

systems. The universe of truckload carriers is dominated by small to
medium-sized independent carriers with gross revenues of less than $20 million.
We believe that the opportunity to consolidate truckload carriers that have
revenues less than $30 million in revenues is significant because shippers are
increasingly outsourcing their company fleets and relying on larger carriers
that provide sophisticated information systems and value-added services.
Therefore, the smaller carrier is faced with increased competition from carriers
that provide these value-added services forcing them to look for an exit
strategy that can strengthen their competitiveness and sustain their business.

During the fiscal year ended March 31, 2003, we provided administrative services
for one customer located in Pittsburgh, Pennsylvania. On February 1, 2002, XRG,
Inc. created a new subsidiary, XRG G&A, Inc. and executed an Administrative
Services Agreement with KDK TRANSPORT, INC. which permitted XRG G&A to provide
administrative services for a period of five years unless terminated by KDK upon
30 days prior written notice to XRG. XRG G&A, Inc. collected a 3% service fee
payable weekly based on KDK's trucking and brokerage gross billings for the
prior week. XRG had generated $796,231 in revenues during the period from
February 1, 2002 until June 30, 2003. Related expenses were $897,753, resulting
in a negative gross margin of $101,522. The Company tested its infrastructure
capabilities by providing administrative services through XRG G&A, Inc. to KDK
Transport, Inc. This Administrative Services Agreement was mutually terminated
during the fourth quarter ended March 31, 2003.

We are optimistic that our business strategy will entice many small trucking
companies to be acquired by us. To-date we have not completed any acquisitions.
There is no assurance that our business strategy is viable, or whether, we will
be able to complete an acquisition in the future. We have identified ten small
trucking companies for potential acquisition that fit our criteria and are
actively pursuing four.

To complete the initial stages of our business plan, which we view as completing
our first trucking company acquisition, we estimate that we will require an
additional $1 million capital infusion. We plan on raising this capital through
either debt or equity financing, however, there is no assurance that we will be
able to obtain financing on favorable terms to complete this acquisition and
successfully implement our business plan.

RESULTS OF OPERATIONS

Three months ended June 30, 2003 compared to three months ended June 30, 2002

XRG generated $0 in revenues during the  three-month  period ended June 30, 2003
as compared to $224,948  during the same  period  ended June 30,  2002.  Related
expenses  were $0 during the current  period as compared to $249,633  during the
same period ended June 30,  2002.  We  terminated  our  Administrative  Services
Agreement  with KDK  Transport,  Inc during the fourth  quarter  ended March 31,
2003. These services provided an important platform for our eventual acquisition
of several truck-load  carriers and we are currently focusing all of our efforts
primarily on identifying  profitable  truck-load  carriers throughout the United
States for acquisition and securing financing to support our business.

                                       10
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

For the three-month period ended June 30, 2003, total selling, general and
administrative expenses were $162,490 as compared to $73,019 for the previous
three-month period, an increase of $89,471 or 122%. This increase is the result
of an increase in consulting, travel, and office costs, plus additional
personnel costs associated with the implementation of our information systems.

Interest expense for the three-month period ended June 30, 2003 and 2002 was
$465,771 and $22,013, respectively. This increase of $443,758 is primarily
associated with the beneficial conversion feature associated with $843,000 of
the Company's notes payable voluntarily electing to convert their principal into
the Company's common stock and the issuance of $130,000 of convertible notes
payable.

We had a net loss of $628,261 for the three-month period ended June 30, 2003 as
compared to a loss of $119,717 for the prior three-month period. This increase
in our operating loss over that of the preceding three-month period is the
result of an increase in consulting, travel, and office costs, personnel costs
associated with the implementation of our information systems as well as higher
interest expenses associated with our long-term debt.

The loss per share was $0.06 for the three-month period ended June 30, 2003
compared to a loss per share of $0.01 for the prior three-month period. The
weighted average shares outstanding for the three-month period ended June 30,
2003 was 10,693,097 as compared to 9,087,822 for the preceding three-month
period ended June 30, 2002.

Liquidity and Capital Resources

To date, we have funded our capital requirements and our business operations
with funds provided by borrowings. We have raised $1,313,120 in the form of
notes payable at various interest rates of 12.0% to 15.0%, payable quarterly.
These notes mature at various dates until November 2004 and are unsecured. None
of these notes individually exceed $100,000. XRG, Inc is the note issuer, and
none of these note-holders are officers or directors of XRG. In connection with
these notes, warrants to acquire 4,335,570 shares of common stock were granted
to these note-holders. These warrants have no expiration date and are
immediately exercisable for nominal consideration. In June 2003, warrants were
exercised to acquire 3,985,570 shares of our common stock which shares were
issued in July, 2003. In addition, during June 2003, approximately $843,000 of
these notes were voluntarily converted to our common stock at a price equal to
50% of the market price at the date of conversion.

During the period ended June 30, 2003, we raised an additional $45,000 pursuant
to a stock purchase agreement in exchange for 180,000 shares of our restricted
common stock.

For the period ended June 30, 2003 we used $134,845 in cash used by operating
activities as compared to $175,836 in the similar period ended June 30, 2002.
Investing activities for the present period included an acquisition deposit of
$50,000 for J Bently Companies, Inc. Financing activities for the period ended
June 30, 2003 provided $175,120 from the issuance of notes payable and the
issuance of preferred stock. For the period ended June 30, 2003, cash decreased
$9,725 as compared to $72,836 in the prior year.

                                       11
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

Historically we have not generated sufficient revenues from operations to
self-fund our capital and operating requirements. These factors raise
substantial doubt concerning our ability to continue as a going concern. We
expect that our working capital will come from fundings that will primarily
include equity and debt placements. We had a cash balance at June 30, 2003 of
$6,838 and negative working capital of $159,908. We believe that our access to
capital will be sufficient to sustain our operations for at least 12 months. Our
monthly cash "burn rate" is approximately $50,000 per month. This estimate is a
forward-looking statement that involves risks and uncertainties. The actual time
period may differ materially from that indicated as a result of a number of
factors so that we cannot assure that our cash resources will be sufficient for
anticipated or un-anticipated working capital and capital expenditure
requirements for this period.

There is no assurance that we will be successful in raising capital through debt
or equity placements. If such financing is not available when required, we may
be unable to pay our debts in a timely manner, develop our business, take
advantage of acquisition opportunities, or respond to competitive pressures, any
of which could have a material adverse effect on our business, financial
condition and results of operations. Our inability to raise additional capital
could cause us to breach our payment obligations to third parties or otherwise
fail to satisfy our business obligations.

To-date we have not completed any acquisitions. There is no assurance that we
will be able to complete an acquisition in the future. Historically, we have
generated revenue by providing administrative services. We have identified ten
small trucking companies for potential acquisition that fit our criteria and are
actively pursuing four.

We anticipate raising capital in the next twelve months from the issuance of
convertible notes. These unsecured notes will be convertible after one year at
50% of the average bid price of our common stock from the ninety trading days
immediately preceding the conversion date. There is currently no liquidity in or
stock, therefore, until our stock begins trading on an exchange we will resort
primarily to raising capital through debt placements. We anticipate that capital
raised from the issuance of convertible notes, our cash reserves, and working
capital from completed truck-load carrier acquisitions, will sustain our
operations over the next twelve months. This estimate is a forward-looking
statement that involves risks and uncertainties. The actual time period may
differ materially from that indicated as a result of a number of factors so that
we cannot assure that our cash resources will be sufficient for anticipated or
un-anticipated working capital and capital expenditure requirements for this
period.

Item 3.  Controls and Procedures

Within 90 days prior to the date of filing of this report, we carried out an
evaluation, under the supervision and with the participation of our Chief
Executive Officer and the Chief Financial Officer, of the design and operation
of our disclosure controls and procedures. Based on this evaluation, our Chief
Executive Officer and the Chief Financial Officer concluded that our disclosure
controls and procedures are effective for gathering, analyzing and disclosing
the information that we are required to disclose in the reports we file under


                                       12
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

the Securities Exchange Act of 1934, within the time periods specified in the
SEC's rules and forms. Our Chief Executive Officer and the Chief Financial
Officer also concluded that our disclosure controls and procedures are effective
in timely alerting them to material information relating to our company required
to be included in our periodic SEC filings. In connection with the new rules, we
are in the process of further reviewing and documenting our disclosure controls
and procedures, including our internal controls and procedures for financial
reporting, and may from time to time make changes designed to enhance their
effectiveness and to ensure that our systems evolve with our business. There
have been no significant changes in our internal controls or in other factors
that could significantly affect internal controls subsequent to the date of this
evaluation.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
         -----------------

         From time to time, we may be involved in litigation relating to claims
         arising out of our ordinary course of business. We believe that there
         are no claims or actions pending or threatened against us, the ultimate
         disposition of which would have a materially adverse effect on us.

         In May, 2003, a legal action was filed in Franklin County, Ohio,
         against the Company (and against our president, based on a personal
         guaranty) by the landlord of our former office space in Pittsburgh,
         Pennsylvania. The landlord is claiming approximately $63,000 in unpaid
         rent. The Company believes that it has a valid defense with respect to
         some or all of the claimed damages.

         In July, 2003, a legal action was filed in Hillsborough County,
         Florida, against the Company by the landlord of our current office
         space in Tampa, Florida. This action is for eviction and unpaid rent.
         The Company has been negotiating with the landlord and we expect to
         achieve a satisfactory resolution of this matter.

Item 2.  Change in Securities and Use of Proceeds.
         -----------------------------------------

         During the three month period ended June 30, 2003, the Company issued
         $130,000 of notes payable. In connection with the notes, the Company
         issued detachable warrants to purchase 260,000 shares of the Company's
         restricted common stock.

         During the three month period ended June 30, 2003, the Company raised
         $45,000 pursuant to a stock purchase agreement in exchange for 180,000
         shares of our restricted common stock.

         On July 7, 2003, we approved an amendment to our certificate of
         incorporation at a special meeting of stockholders. This Amendment to
         our Certificate of Incorporation increases the authorized number of
         common shares from 15,000,000 to 100,000,000, par value $.001 and
         authorizes the board of directors to issue up to 50,000,000 preferred
         shares, par value $.001 issuable in series with such terms, rights and
         preferences as determined by subsequent resolutions of the Board of
         Directors.

                                       13
<PAGE>

                            XRG, Inc. and Subsidiary
                          (A Development Stage Company)

         In June 2003, the Board of Directors approved and adopted resolutions
         establishing and designating 5,000,000 shares of Series A Preferred
         Stock $.001 par value. The holders of Series A Preferred Stock are
         entitled to ten votes for each share held on all matters on which the
         holders of the Company's Common Stock are entitle to vote and shall
         vote together with the holders of Common Stock and not as a separate
         class or series. Series A Preferred Stock shall have no dividend,
         conversion, or redemption rights and no liquidation preferences.

         In July 2003, Donald G. Huggins, Jr., Kevin Brennan, and Stephen
         Couture each subscribed to purchase 1,666,666.66 shares for an
         aggregate of 5,000,000 shares of Series A Voting Preferred Stock. These
         officers and directors subscribed to purchase these shares of Series A
         Voting Preferred Stock for the aggregate par value of the shares or
         $5,000.

         The Voting Preferred Stock was issued to assure complete and unfettered
         control of the Company by its holders. The issuance of the Voting
         Preferred Stock constitutes an anti-takeover device since the approval
         of any merger or acquisition of the Company will be completely
         dependent upon the approval of the holders of this Voting Preferred
         Stock.

Item 3.  Defaults Upon Senior Securities.
         --------------------------------

         None

Item 5.  Other Information
         -----------------

          In July,  2003,  we entered  into an  employment  agreement  with Neil
          Treitman, our Chief Operating Officer.

Item 6.  Exhibits and Reports on Form 8-K
         --------------------------------

          (a)  Exhibit  99.1  is the  certification  of the  CEO  and the CFO as
               required  under  Section  906 of the  Sarbanes-Oxley  Act of 2002
               (Corporate  Fraud  Bill),  which was signed  into law on July 30,
               2002 by President George Bush.

               Exhibit 10.9 form of stock purchase agreement.

                                       14
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.


                                         XRG, Inc.

Dated:   8/19/2003

                                         /s/ Kevin Brennan
                                         ------------------------------------
                                             Kevin Brennan
                                             President & CEO

                                         /s/ Stephen Couture
                                         ------------------------------------
                                             Stephen Couture
                                             Vice President, Finance & CFO


                                       15
<PAGE>