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 December 31, 2002
                                    -----------------

     [ ] 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 December 31, 2002 was 9,262,912.

     Transitional Small Business Disclosure Format:

Yes       No  X
     ---     ---

<PAGE>

             XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                          (A Development Stage Company)



                                      Index



                                                                           Page
                                                                           ----
Part I - Financial Information

Item 1.  Financial Statements

         Balance Sheet -
           December 31, 2002...............................................  1

         Statements of Operations -
           Three and nine months ended December 31, 2002 and 2001
                  and the period May 1, 1999 to December 31, 2002..........  2

         Statements of Changes in Stockholders' Deficit -
           Period May 1, 1999 to December 31, 2002.........................  3

         Statements of Cash Flows -
           Three and nine months ended December 31, 2002 and 2001
                  and the period May 1, 1999 to December 31, 2002..........  4

         Notes to Condensed Consolidated Financial Statements..............  5

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations.............................  7

Item 3.  Controls & Procedures............................................. 10

Part II - Other Information

Item 1. Legal Proceedings.................................................. 11

Item 2. Change in Securities and Use of Proceeds........................... 11

Item 3. Defaults Upon Senior Securities.................................... 11

Item 5. Other Information.................................................. 11

Item 6. Exhibits........................................................... 11


         Signatures........................................................ 12

                                       i
<PAGE>


<TABLE>
<CAPTION>


                               XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                                           (A Development Stage Company)
                                        Condensed Consolidated Balance Sheet
                                                    (Unaudited)
                                                 December 31, 2002

<S>                                                                          <C>
Assets
Current assets:
    Cash                                                                        $               33,175
    Trade receivables                                                                           15,194
                                                                                   --------------------
Total current assets                                                                            48,369

Equipment, net of accumulated depreciation                                                      64,491
                                                                                   --------------------

                                                                                $              112,860
                                                                                   ====================


Liabilities and Stockholders' Deficit

Current liabilities:
    Accounts payable                                                            $               60,398
    Accrued expenses                                                                            63,663
    Related party advances                                                                      31,626
    Current portion of long term debt                                                          425,000
                                                                                   --------------------
Total current liabilities                                                                      580,687
                                                                                   --------------------

Long-term liabilities:
    Notes payable, less current maturities                                                     518,000
                                                                                   --------------------
Total long-term liabilities                                                                    518,000
                                                                                   --------------------

                                                                                   --------------------
Total liabilities                                                                            1,098,687
                                                                                   --------------------

Stockholders' deficit:
    Preferred stock; $.001 par value; 5,000,000 shares authorized
      0 shares issued and outstanding
    Common stock; $.001 par value; 15,000,000 shares authorized;
      9,262,912 shares issued and outstanding                                                    9,263
    Additional paid-in capital                                                              15,402,648
    Accumulated deficit for unrelated dormant operations                                   (15,405,274)
    Deficit accumulated during development stage                                              (992,464)
                                                                                   --------------------
Total stockholders' deficit                                                                   (985,827)
                                                                                   --------------------

                                                                                $              112,860
                                                                                   ====================
</TABLE>


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


                                       1
<PAGE>

<TABLE>
<CAPTION>

                                         XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                                                     (A Development Stage Company)
                                            Condensed Consolidated Statements of Operations
                                                              (Unaudited)

                                                                                                                         Period
                                                    Three Months Ended December 31,    Nine Months Ended December 31,  May 1, 1999
                                                    -------------------------------    ------------------------------to December 31,
                                                       2002               2001            2002              2001          2002
                                                    ------------      -------------    ------------      ------------ --------------
<S>                                               <C>            <C>               <C>               <C>             <C>
Revenues                                           $    214,624   $              -   $     670,274     $           -  $    780,475

Cost of revenues                                        265,427                  -         748,910                 -       856,741
                                                    ------------      -------------    ------------      ------------ --------------

Gross profit (loss)                                     (50,803)                 -         (78,636)                -       (76,266)

Selling, general and administrative
     expenses                                           181,980             63,846         377,463           178,274       792,636
                                                    ------------      -------------    ------------      ------------ --------------

Loss from operations                                   (232,783)           (63,846)       (456,099)         (178,274)     (868,902)

     Interest expense                                   (26,915)           (13,541)        (73,811)          (24,385)     (123,562)
                                                    ------------      -------------    ------------      ------------ --------------

Net loss                                           $   (259,698)  $        (77,387)  $    (529,910)    $    (202,659) $   (992,464)
                                                    ============      =============    ============      ============ ==============

Basic loss per share                               $      (0.03)  $          (0.01)  $       (0.06)    $       (0.03) $      (0.14)
                                                    ============      =============    ============      ============ ==============

Weighted average number of
     common shares used
     in loss per share calculation                    9,262,912          8,425,955       9,262,912         7,152,912     7,320,597
                                                    ============      =============    ============      ============ ==============

</TABLE>


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


                                       2
<PAGE>

<TABLE>
<CAPTION>

                                           XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                                                       (A Development Stage Company)
                                   Condensed Consolidated Statements of Changes in Stockholders' Deficit
                                                                (Unaudited)
                                             Nine Months Ended December 31, 2002 and the Period
                                                      May 1, 1999 to December 31,2002



                                                                                       Accumulated
                                              Common Stock                             Deficit for      Accumulated
                                       -------------------------       Additional      Unrelated       Deficit During
                                          Number of                     Paid-in        Dormant         Development
                                           Shares        Amount         Capital        Operations          Stage           Total
                                       -------------   ---------    --------------  ---------------   -------------   --------------
<S>                                     <C>        <C>          <C>              <C>              <C>             <C>
Balance, May 1, 1999, as
   previously reported                   1,495,822  $    1,496   $    15,030,193  $   (15,405,274) $            -  $      (373,585)

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

Balance, May 1, 1999, as restated        1,670,912       1,671        15,030,018      (15,405,274)              -         (373,585)


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

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

Stock issued in satisfaction
   of debt at $1.36 per share
   (March 2000)                            110,000         110           149,641                -               -          149,751

Net loss for the period                          -           -                 -                -          (15,029)        (15,029)
                                      -------------   ---------    ---------------  ---------------   -------------   --------------

Balance,March 31, 2000                   6,330,912       6,331        15,179,659      (15,405,274)         (15,029)       (234,313)

Stock issued in satisfaction
   of debt at $1.23 per share
   (April 2000)                            182,000         182           222,989                -               -          223,171

Net loss for the year                            -           -                 -                -         (123,389)       (123,389)
                                      -------------   ---------    ---------------  ---------------   -------------   --------------

Balance, March 31, 2001                  6,512,912       6,513        15,402,648      (15,405,274)        (138,418)       (134,531)

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

Net loss for the year                            -           -                 -                -         (324,136)       (324,136)
                                      -------------   ---------    ---------------  ---------------   -------------   --------------

Balance, March 31, 2002                  9,262,912       9,263        15,402,648      (15,405,274)       (462,554)        (455,917)

Net loss for the period                          -           -                 -                -        (529,910)        (529,910)
                                      -------------   ---------    ---------------  ---------------   -------------   --------------

Balance, December 31, 2002               9,262,912  $    9,263   $    15,402,648 $    (15,405,274) $     (992,464) $      (985,827)
                                      =============   =========    ===============  ===============   =============   ==============
</TABLE>

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

                                       3
<PAGE>


                     XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                                  (A Development Stage Company)
                         CondensedConsolidated Statements of Cash Flows
                                           (Unaudited)
<TABLE>
<CAPTION>

                                                                                                        Period
                                                                     Nine Months Ended December 31,  May 1, 1999
                                                                     ----------------------------   to December 31,
                                                                         2002            2001            2002
                                                                      ------------   -------------  ---------------
<S>                                                                   <C>           <C>             <C>
Operating activities
       Net loss                                                        $ (529,910)     $ (202,659)      $ (992,464)
                                                                      ------------   -------------  ---------------

       Adjustments to reconcile net loss to net cash
        used by operating activities:
           Depreciation and amortization                                    3,635             800            4,425
           Loss on acquisition                                                  -               -            3,000
           Stock issued for services                                            -           2,750            4,300
           (Increase) decrease in:
             Accounts receivable                                              499               -          (15,194)
           Increase (decrease) in:
             Accounts payable                                              (5,838)            320           40,381
             Accrued expenses                                              29,257          19,151           62,903
                                                                      ------------   -------------  ---------------
        Total adjustments                                                  27,553          23,021           99,815
                                                                      ------------   -------------  ---------------

                                                                      ------------   -------------  ---------------
        Net cash used by operating activities                            (502,357)       (179,638)        (892,649)
                                                                      ------------   -------------  ---------------

Investing activities
       Purchase of property and equipment                                 (37,647)        (11,262)         (48,899)
                                                                      ------------   -------------  ---------------
       Net cash used by investing activities                              (37,647)        (11,262)         (48,899)
                                                                      ------------   -------------  ---------------

Financing activities
       Net borrowings on stockholder
          advances                                                              -           2,000           31,626
       Proceeds from issuance of notes payable                            283,000         380,000          968,000
       Principal payments on notes payable                                (25,000)              -          (25,000)
                                                                      ------------   -------------  ---------------
       Net cash provided by financing activities                          258,000         382,000          974,626
                                                                      ------------   -------------  ---------------

       Net increase (decrease) in cash                                   (282,004)        191,100           33,078

       Cash at beginning of period                                        315,179           2,489               97
                                                                      ------------   -------------  ---------------

       Cash at end of period                                             $ 33,175       $ 193,589         $ 33,175
                                                                      ============   =============  ===============
</TABLE>

<TABLE>
<CAPTION>

                                                                                                        Period
                                                                     Nine Months Ended December 31,  May 1, 1999
                                                                     ----------------------------   to December 31,
                                                                         2002            2001            2002
                                                                      ------------   -------------  ---------------
<S>                                                                  <C>            <C>            <C>
Supplemental disclosures of cash flow
    information and noncash investing
    and financing activities:
        Cash paid during the period for interest                      $    40,448    $     5,235    $    54,971
</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 nine months ended December 31, 2002,  the Company  financed
          the purchase of computer equipment in the amount of $20,017.



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

                                       4
<PAGE>

             XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements

            Nine Months Ended December 31, 2002 and 2001 (Unaudited)
           and the Period May 1, 1999 to December 31, 2002 (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 and nine months  ended  December 31, 2002 and 2001 and
the period May 1, 1999 to  December  31,  2002,  (b) the  financial  position at
December 31, 2002, and (c) cash flows for the nine-month  periods ended December
31, 2002 and 2001 and the period May 1, 1999 to  December  31,  2002,  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, 2002. The results of operations for the nine-month periods ended
December  31,  2002  and  2001  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 and nine months ended December 31, 2002
and 2001.  The weighted  average shares  outstanding  for the three months ended
December 31, 2002 was  9,262,912  as compared to 8,425,955  for the three months
ended December 31, 2001. The weighted  average shares  outstanding  for the nine
months ended  December 31, 2002 was  9,262,912 as compared to 7,152,912  for the
nine months ended December 31, 2001.

3.      Notes Payable

Please refer to the audited consolidated  financial statements consisting of the
Company's  consolidated  balance  sheet as of  March  31,  2002 and the  related
consolidated  statements of operations,  changes in stockholders'  deficit,  and
cash flows for the year then ended.

During the nine months ended December 31, 2002,  the Company issued  $283,000 of
notes  payable.  In connection  with the notes,  the Company  issued  detachable
warrants to purchase  932,000 shares of the Company's  restricted  common stock.
The  value  of the  warrants  was  deemed  immaterial  based  on  the  Company's
calculation under the Black-Scholes option pricing model and, therefore, none of
the note proceeds have been allocated to the detachable stock warrants.

Effective October 7, 2002, the Company terminated certain consulting  agreements
which  resulted  in  the  Company   canceling   321,200   warrants  for  nominal
consideration.  No  warrants  had been  issued to the  consultants  under  these
agreements.

                                       5
<PAGE>

             XRG, Inc. f/k/a XRG International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements

            Nine Months Ended December 31, 2002 and 2001 (Unaudited)
           and the Period May 1, 1999 to December 31, 2002 (Unaudited)

4.      Administrative Services and Acquisition Agreement

On December  15, 2002,  the Company  entered  into an  Acquisition  Agreement to
purchase J.  Bently  Companies,  Inc.  and Bently  Logistics,  Inc.  ("JBC"),  a
Tennessee  truckload  carrier.  This  agreement is subject to certain  terms and
conditions  and will not close until certain  pre-closing  conditions are met by
both the Company and JBC. These  pre-closing  conditions were not met during the
period  ended  December 31, 2002.  The Company is currently  conducting  its due
diligence on JBC.

Effective as of the date of this Agreement and prior to closing, the Company, as
part of this  agreement,  will provide  administrative  services to JBC for a 5%
service fee based on JBC's trucking and brokerage gross billings. Administrative
services will involve  jointly  managing  JBC's  business  including  invoicing,
collections,  regulatory compliance, credit reviews, and payment processing. The
Company had revenues of $10,283 from  administrative  services pertaining to JBC
during the period ended December 31, 2002.

                                       6
<PAGE>

             XRG, Inc. f/k/a XRG International, 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

Our business  focuses on acquiring and operating both asset and non-asset  based
truck-load   carriers.   We  are  currently  marketing  our  administrative  and
logistical  expertise to freight  shippers in the  contiguous 48 states.  We are
providing  administrative  services  through our  subsidiary  XRG G&A,  Inc. for
invoicing,  collections,   regulatory  compliance,  credit  reviews,  processing
payments  and  commissions,  and  answering  services  for  one of our  targeted
acquisitions at a service fee equal to 3% of its gross billings. In addition, we
entered into an  administrative  services  agreement in December  2002,  with J.
Bently Companies,  Inc., a Tennessee truckload carrier,  for a service fee equal
to 5% of its gross  billings.  During the  nine-month  period ended December 31,
2002, we generated $670,274 in revenues from these administrative services.

XRG  plans on  consolidating  established  and  profitable  truck-load  carriers
throughout  the United States that have  long-term  customer  relationships  and
typically  generate  revenues between $5 and $20 million.  We believe that these
acquisitions   will  enable  us  to  diversify  our  customer  base,   technical
capabilities and geographic areas served.

Our  philosophy  within the  truckload  industry  is to hire out the  "purchased
transportation".  It is our belief  that this allows us the ability to avoid the
greatest shortfall that carriers that own their own equipment face, utilization.
Equipment  that is not under load is a cost to the typical  carrier.  Because we
plan on  contracting  for the  equipment,  only trucks pulling loads would incur
expenses.  This cost would be contracted  for prior to the load being picked up,
and is typically 75% of the gross revenue of the load. Maintenance,  breakdowns,
and all other  expenses  associated  with  owning  equipment  would  also be the
responsibility of the equipment owner, not us.

                                       7
<PAGE>

Currently,  we are  providing  administrative  services  for two  customers.  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 permits 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.
collects a 3% service fee payable  weekly based on KDK's  trucking and brokerage
gross  billings  for the prior  week.  In  December  2002,  we  entered  into an
administrative  services  agreement with J. Bently Companies,  Inc., a Tennessee
truckload  carrier,  for a  service  fee equal to 5% of its  gross  billings  to
provide similar services as for KDK.

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. However, none have agreed to come on board.

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 December 31, 2002 compared to three months ended December 31,
2001

XRG generated  $214,624 in revenues during the three-month period ended December
31, 2002 from our  administrative  services  provided to one  customer.  Related
expenses were $265,427  resulting in a negative  gross margin of $50,803.  These
services provide an important  platform for our eventual  acquisition of several
truck-load carriers. During the three-month period ended December 31, 2001 there
were no  revenues.  We continue to focus our efforts  primarily  on  identifying
profitable  truck-load carriers throughout the United States for acquisition and
securing financing to support our business.

For the three-month  period ended December 31, 2002, total selling,  general and
administrative  expenses  were  $181,980  as  compared  to $63,846  for the same
three-month  period ended  December  31, 2001,  an increase of $118,134 or 185%.
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  periods ended December 31, 2002 and 2001
was  $26,915  and  $13,541,  respectively.  This  increase  of $13,374 or 99% is
associated with an increase in long-term debt of $568,000 from December 31, 2001
to December 31, 2002.

We had a net loss of $259,698 for the three-month period ended December 31, 2002
as compared to a loss of $77,387 for the  three-month  period ended December 31,
2001.  This  increase  in our  operating  loss  over  that of the  prior  year's
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.

                                       8
<PAGE>

The loss per share was $0.03 for the three-month  period ended December 31, 2002
and $.01 for the  three-month  period  ended  December  31,  2001.  The weighted
average shares  outstanding for the  three-month  period ended December 31, 2002
was 9,262,912 as compared to 8,425,955 for the three-month period ended December
31, 2001.

Nine months ended  December 31, 2002 compared to nine months ended  December 31,
2001

XRG generated  $670,274 in revenues during the nine-month  period ended December
31, 2002 from administrative services.  Related expenses were $748,910 resulting
in a negative  gross  margin of  $78,636.  During the  nine-month  period  ended
December 31, 2001 there were no revenues.

For the nine-month  period ended December 31, 2002,  total selling,  general and
administrative expenses were $377,463 as compared to $178,274 for the nine-month
period ended  December 31, 2001, an increase of $199,189 or 112%.  This increase
is the result of an increase in consulting,  travel, and office costs, personnel
costs  associated  with  the  implementation  of our  information  systems  plus
additional  legal and accounting costs associated with completing our Form 10-SB
Registration Statement.

Interest expense for the nine-month  period ended December 31, 2002 and 2001 was
$73,811  and  $24,385,  respectively.  This  increase  of  $49,426  or  203%  is
associated with an increase in long-term debt during the current period.

We had a net loss of $529,910 for the nine-month  period ended December 31, 2002
as compared to a loss of $202,659 for the  nine-month  period ended December 31,
2001.  This  increase  in our  operating  loss  over  that of the  prior  year's
nine-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  nine-month  period ended December 31, 2002
as compared to a loss per share of $0.03 for the for the nine-month period ended
December 31, 2001. The weighted  average shares  outstanding  for the nine-month
period ended  December 31, 2002 was  9,262,912 as compared to 7,152,912  for the
nine-month period ended December 31, 2001.


Liquidity and Capital Resources

To date,  we have funded our capital  requirements  and our business  operations
with  funds  provided  by the  sale of  securities  and from  borrowings.  As of
December 31, 2002,  we have  received  $968,000 in the form of notes  payable at
various interest rates of 12.0% to 15.0%, payable quarterly.  These notes mature
at various dates between March 2003 and September 2004 and are  unsecured.  None
of these notes individually exceed $100,000.  The current portion of these notes
is $425,000 which is due between March 2003 and December  2003.  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  3,842,000  shares of common
stock will be granted to these  note-holders.  These warrants have no expiration
date and are immediately exercisable at prices ranging from $.000025 to $.0005.

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<PAGE>

For the  nine-month  period ended  December 31, 2002 we used $519,235 in cash in
operating  activities  as  compared to  $179,638  in the  similar  period  ended
December 31, 2001. Financing activities for the nine-month period ended December
31,  2002  provided  $283,000  from  the  issuance  of  notes  payable.  For the
nine-month  period ended December 31, 2002, cash decreased  $282,004 as compared
to an increase of $191,100 in the prior nine-month period.

Historically  we have not  generated  sufficient  revenues  from  operations  to
self-fund  our capital and  operating  requirements.  We expect that our working
capital will come from  fundings  that will  primarily  include  equity and debt
placements.  We had a cash  balance at December 31, 2002 of $33,175 and negative
working  capital of  $532,318.  Our monthly  cash "burn  rate" is  approximately
$50,000 per month.

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
our 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
unanticipated  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
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.

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<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

         None

Item 2.  Change in Securities and Use of Proceeds.

          During the nine month  period ended  December  31,  2002,  the Company
          issued $283,000 of notes payable.  In connection  with the notes,  the
          Company issued  detachable  warrants to purchase 932,000 shares of the
          Company's  restricted  common  stock.  The value of the  warrants  was
          deemed  immaterial  based  on  the  Company's  calculation  under  the
          Black-Scholes  option  pricing model and,  therefore  none of the note
          proceeds have been allocated to the detachable stock warrants.

          On September 26, 2002 we terminated American Stock Transfer & Trust as
          our transfer agent and appointed Florida Atlantic Stock Transfer, Inc.
          of  Tamarac,  Florida  as  our  new  transfer  agent.  We  have  since
          reconciled our records to the records of our transfer agent. According
          to a certified  shareholder  list provided by our new transfer  agent,
          the  number of shares of common  stock  outstanding  is  9,262,912  at
          October 25, 2002. We have revised our financial  statements to reflect
          this  amount  outstanding  as  certified  by our  transfer  agent.  In
          addition,  effective October 7, 2002, we terminated certain consulting
          agreements which resulted in us canceling 321,200 warrants for nominal
          consideration.  No warrants had been issued to the  consultants  under
          these agreements.

Item 3.  Defaults Upon Senior Securities.

         None

Item 5.  Other Information

          On October 7, 2002,  Mr.  Neil  Treitman  was  appointed  as 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.

          (b)  Form 8-K filed on December 30, 2002 regarding the  administrative
               services agreement with J. Bently Companies, Inc.

                                       11
<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:   2/13/2003

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

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



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