MRCDROM COM INC, S-1, 1997-04-04

MRCDROM COM INC
S-1, 1997-04-04

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As filed with the Securities and Exchange Commission on April 3, 1997
Registration No. _______________
================================================================
=============================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 25409
Form S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
- -------------------
mrcdrom.com, inc.
(Exact Name of Registrant as specified in Its Charter)
Delaware _596___ _75-2699241_
(State or Other Jurisdiction (Primary Standard Industrial (IRS Employer
of Incorporation or Organization) Classification Code Number Identification
No.)
2415 Midway, Suite 115
Carrollton, Texas 75006
(972) 713-2609
(Address and Telephone number of Principal Executive Offices)
- -----------------------
Ms. Jeanette Fitzgerald
17770 Preston Road
Dallas, Texas 75252
(972) 733-3005
(Address and Telephone number of Agent for Service)
- -----------------------------
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration
Statement.

If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following : { }

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering.
{ }

If this Form is a post-effective amendment filed pursuant to Rule 462 (
c) under the Securities Act of 1933, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. { }

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. { }
<TABLE>
<S> <C> <C> <C> <C>
CALCULATION OF REGISTRATION FEE
================================================================
TITLE OF EACH CLASS AMOUNT TO PROPOSED PROPOSED AMOUNT
OF SECURITIES TO BE BE MAXIMUM MAXIMUM OF
REGISTERED REGISTERED OFFERING AGGREGATE REGIS-
PRICE PER OFFERING TRATION
SHARE <F1> PRICE<F1> FEE

Common Stock, $0.01 par
value per share 3,000,000 $4.00 $12,000,000 $3636
</TABLE>

[FN](1) Estimated solely for purposes of calculating the registration
fee pursuant to Rule 457 of Regulation C promulgated under the
Securities Act of 1933.
[/FN]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
================================================================
<PAGE>
PRELIMINARY PROSPECTUS

THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS
TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.

company logo of mrcdrom.com, inc.

Up to 3,000,000 Shares of Common Stock

mrcdrom.com, inc. (the "Company") an Internet catalogue Company which
intends to offer over 2,000 computer software titles by means of a
site on the World Wide Web, and which presently has no revenues, is
offering for sale up to 1,500,000 Shares of its Common Stock, par
value $0.001("Common Stock" or "Shares"), and a selling shareholder
is offering up to 1,500,000 Shares of the Company. The minimum
offering by the Company will be 62,500 shares ($250,000) and the
maximum offering, including those shares offered by the selling
shareholder will be 3,000,000 shares ($12,000,000). A minimum
investment of 50 Shares ($200) is required of each investor. See
"Description of Capital Stock" and "Plan of Distribution".

The Shares are being offering on a "best efforts, all or none" basis
with respect to the minimum number of Shares offered hereby, and on a
"best efforts" basis with respect to sales of Shares thereafter up
to the maximum number of Shares being offered. Pending the payment
for not less than 62,500 Shares, all proceeds of this offering will be
deposited in a non-interest bearing escrow account with Stock
Transfer Company of America, Inc. (the "Escrow Agent").

Prior to this offering, there has been no public market for the Common
Stock and the Company does not have any arrangements, commitments or
understandings with respect to the creation of a public market for
the Common Stock. Therefore, there can be no assurance that a public
market will develop by reason of this offering. If such a market
should develop, there is no assurance that it will be sustained, or
that it will develop into a market greater than a limited market. It
is currently estimated that the initial public offering price will be
$4.00 per share. The initial public offering price for the Shares has
been determined solely by the Company, and does not necessarily bear
any direct relationship to the Company's assets, operations, book or
other established criteria of value. See "Risk Factors", "
Dilution" and " Plan of Distribution".

Upon completion of the sale of the maximum number of Shares offered
hereby, the Company intends to apply for inclusion of its Common
Stock on the Nasdaq Small Cap Market under the symbol "MRCD". The
Company does not expect to become eligible for inclusion on the
Nasdaq Small Cap Market unless and until the maximum number of Shares
offered hereby are sold, In the event that the Company does not apply
for inclusion of its Common Stock on the Nasdaq Small Cap Market, or
in the event the Company's Common Stock is not accepted for inclusion
on the Nasdaq Small Cap Market, the Company's Stock will be traded on
the NASDAQ OTC Bulletin Board and an investor would likely find it
more difficult to dispose of the Shares, or to obtain current
quotations as to the value of the Shares.

An electronic format of this Prospectus is available on the Company's
Internet World Wide Web Site at http://www.mrcdrom.com.

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND
IMMEDIATE AND SUBSTANTIAL DILUTION FROM THE OFFERING PRICE.
FOR INFORMATION CONCERNING THESE AND OTHER RISK FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK
FACTORS" .

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<S> <C> <C> <C>
Price to Underwriting Proceeds to
Public<F1> Discount<F2> Company<F3>
Per Share $4.00 $ - $4.00
Total Minimum<F4> $250,000 $ - $150,000
Total Maximum<F5> $6,000,000 $ - $5,900,000
</TABLE>
The offering of the Shares hereunder will terminate not later than
_____________, 1997 (the "Termination Date"), provided that, in the
sole discretion of the Company, the offering period may be extended
for an additional period not to exceed 90 days. The Company has
entered into an escrow agreement with Stock Transfer Company of
America, Inc. to hold any proceeds from this offering in an interest
bearing escrow account subject to certain terms and conditions. If
subscriptions for the minimum number of Shares offered hereby have
not been received and accepted b y the Company be the Termination
Date, no Shares will be sold, and all funds held in escrow will be
returned promptly to investors without any interest accrued thereon.
See "Plan of Distribution".

[FN] (1) Shares are being offered for
sale at $4.00 per Share. A minimum investment of 50 shares ($200) is
required of each investor, provided that the company, in its
discretion, may reduce the size of the minimum investment. Payment
in full is due upon subscription. Stock purchase funds will
initially be held in an interest bearing escrow account with Stock
Transfer Company of America, Inc. This offering will terminate on or
before a date 90 days from the date of this prospectus unless the
maximum amount of Shares offered hereby is sold prior to such date
or unless this offering is otherwise extended at the discretion of
the Company for a period not to exceed 90 days. When subscriptions
for the minimum amount of Shares offered hereby have been received
and accepted by the Company, such funds will be released from escrow
to the Company, and investors whose subscriptions for Shares have
been accepted by the Company will be issued Common Stock certificates
evidencing the number of Shares acquired, and the initial escrow will
close. See "Stock Purchase Information" and "Plan of Distribution".
(2) The Shares are being offered by the Company on a "best efforts,
all or none" basis with respect to the minimum number of Shares being
offered hereby, and a "best efforts" basis with respect to sales of
Shares up to the maximum number of Shares being offered hereby.
There is no underwriter or independent broker-dealer involved in the
distribution of the Shares. The offering of the Shares will be made
by the Company's officers and directors without the use of an
underwriter or any independent broker-dealer. No underwriting
discounts or commissions will be paid to such officers and directors.
It is the intention of the Company to offer and sell the Shares by
contacting prospective investors through appropriate newspaper and
magazine advertisements as well as through the use of the Internet to
electronically deliver copies of this Prospectus to prospective
investors. See "Stock Purchase Information" and "Plan of
Distribution".
(3) This amount is after deduction of offering and
related expenses incurred by the Company in this offering which are
estimated to be approximately $100,000 and include filing, printing,
legal, electronic delivery and other miscellaneous fees.
(4)Subsequent to the sales of the minimum number of shares, the Selling
Shareholder will then receive one-half of all accepted subscriptions
until Company has sold all 1,500,000 Shares offered hereunder. See
"Selling Shareholder."
(5) Excludes $6,000,000 to be sold by the
Selling Shareholder, the proceeds of which will not benefit the
Company. See "Selling Shareholder" and "Plan of Distribution".
[/FN]

mrcdrom.com, inc.
2415 Midway, Suite 115
Carrollton, Texas 75006
Telephone (972) 713-2609
e-mail: [email protected]
Internet address: http://www.mrcdrom.com

SUBJECT TO COMPLETION DATED APRIL 3, 1997
The Company is not currently a reporting company under the
Securities Exchange Act of 1934, as amended. Upon completion of the
offering of the Shares, the Company intends to deliver annual reports
to the holders of its securities. The annual reports will contain
financial information that has been examined and reported upon by an
independent certified public accountant.

mrcdrom is a trademark of the Company. This Prospectus also
includes product names and other trade names and trademarks of the
Company, as well as the names and product names of companies other
than the Company. --------------

STOCK PURCHASE INFORMATION

Shares are being offered for sale at $4.00 per Share. A minimum
investment of 50 Shares ($200) is required of each investor, provided
that the Company, in its discretion, may reduce the size of the
minimum investment. Payment in full is due upon subscription. Stock
purchase funds will initially be held in an interest bearing escrow
account with Stock Transfer Company of America, Inc. Those persons
purchasing Shares should make checks payable to "mrcdrom.com/Stock
Transfer Company of America, Inc. Agent Account". Purchasers should
also complete a Stock Purchase Agreement in the form included as
Appendix A to this Prospectus. Residents of Arkansas, California,
Idaho, Iowa, Massachusetts, Missouri, Nebraska, North Dakota, Oregon,
South Dakota, Tennessee and Texas must also complete a Suitability
Questionnaire, the form of which is also attached as part of Appendix
B to this Prospectus. For convenience, an actual Stock Purchase
Agreement and Suitability Questionnaire have also been included with
this Prospectus. Additional copies of the Stock Purchase Agreement
and/or Suitability Questionnaire may be obtained by writing or
calling the Company at its executive office, 2415 Midway, Suite 115,
Carrollton, Texas 75006 telephone number (972) 713-2609, via its
World Wide Web site on the Internet at http://www.mrcdrom.com, or
through e-mail communication directed to [email protected]. All
checks and Stock Purchase Agreements and, where applicable
Suitability Questionnaires should be forwarded to the Escrow Agent,
Stock Transfer Company of America, Inc., at P.O. Box 796277, Dallas,
Texas 75379-6277.

- -------------------------------------------- ELECTRONIC FORMAT OF
PROSPECTUS An electronic version of this Prospectus is available on
the Company's Internet World Wide Web Site at http://www.mrcdrom.com.
The paper format of this Prospectus contains descriptions and/or
transcripts of material graphic, image and audio information which is
included in the electronic format of this Prospectus.
- ----------------------------------------------

FOR CALIFORNIA,IOWA, NORTH DAKOTA, AND OREGON RESIDENTS ONLY

Shares may only be offered and sold to California, Iowa, North
Dakota and Oregon residents who (I) (A) have a minimum net worth of at
least $75,000 and had minimum gross income of $50,000 during the last
tax year and will have (based on a good faith estimate) minimum gross
income of $50,000 during the current tax year or (B) in the
alternative, have a minimum net worth of $150,000, provided that in
either case the investment shall not exceed ten percent (10%) of the
net worth of the investor; or (ii) to a "small investor" who,
including the proposed purchase, has not (A) purchased more than
$2,500 of securities issued or proposed to be issued by the Company in
the 12 months preceding the proposed offering of Shares, or (B) in
the case of a small investor that is an individual retirement account
of an individual, such small investor shall not have purchased more
that $2,500 of securities issued by the Company or any affiliate of
the Company during the 12 months preceding the proposed sale; or
(iii) to both (I) and (ii) above. For purposes herein, the term
"small investor" means either an individual (which includes both a
husband and wife counted as a single individual ) or a self-employed
individual retirement plan of an individual or an individual
retirement account of an individual.

The Shares offered hereby have been registered by a limited
qualification in the State of California and therefore cannot be
offered for resale or resold in the State of California unless
registered for sale or unless an exemption from such registration
requirements exists. The exemption afforded by Section 25104(h) of
the California Corporate Securities law shall be withheld by the
California Commissioner of Corporations and the Company is not
permitted to apply for the exemption afforded by Section 25101(b)
until 90 days after the date the Securities and Exchange Commission
("Commission") declares the Registration Statement, of which this
Prospectus is a part, effective.

- -------------------------------------------------

FOR ARKANSAS, MASSACHUSETTS, MISSOURI, NEBRASKA, SOUTH
DAKOTA, TENNESSEE AND TEXAS RESIDENTS ONLY

Shares may only be offered and sold to Arkansas, Massachusetts,
Missouri, Nebraska, South Dakota, Tennessee and Texas residents who
(I) have a minimum net worth (excluding home, home furnishings and
automobiles) of at least $250,000 and had minimum gross income of
$65,000 during the last tax year and will have (based on a good faith
estimate) minimum gross income of $65,000 during the current tax year;
or (ii) have a minimum net worth (excluding home, home furnishings
and automobiles) of at least $500,000; or (ii) purchase $100,000 or
more of the Shares; or (iv) had a minimum gross income of $20,000
during the last tax year and will have (based on a good faith
estimate) minimum gross income of $200,000 during the current tax
year; or (v) have a minimum net worth (including home, home
furnishings, and automobiles) of $1,000,000.

- -----------------------------------------------
FOR IDAHO RESIDENTS ONLY

Shares may only be offered and sold to Idaho residents who fall into
any one of the following categories:

(i) Any bank as defined in section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in
section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity, any broker or dealer registered
pursuant to section 15 of the Exchange Act; any insurance company as
defined in section 2(13) of the Securities Act; any investment
company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a)(48) of that
act; any Small Business Investment Company licensed by the United
States Small Business Administration under section 301( c) or (d) of
the Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment
decision is made by a plan fiduciary, as defined in section 3(21) of
such Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if
a self-directed plan, with investment decisions made solely by persons
that are accredited investors; (ii) Any private business development
company as defined in section 202(a)(22) of the Investment Advisers
Act of 1940; (iii) Any organization described in section 501 (c )(3)
of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000; (iv) Any director, executive officer, or general partner
of the issuer of the securities being offered or sold, or any
director, executive officer, or general partner of a general partner
of that issuer; (v) Any natural person whose individual net worth, or
joint net worth with that person's spouse in excess of $300,000 in
each of those years and has a reasonable expectation of reaching the
same income level in the current year; (vii) Any trust, with total
assets in excess of $5,000,000 not formed for the specific purpose of
acquiring the securities offered, whose purchase is directed by a
sophisticated person who has such knowledge and experience in
financial and business matters that he is capable of evaluating the
merits and risks of the prospective investment; and (viii) Any entity
in which all of the equity owners are accredited investors under (I )
- - (vii) of this paragraph.

PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is
qualified in its entirety by, the more detailed information and
financial statements and notes thereto appearing elsewhere in this
Prospectus.

THE COMPANY

mrcdrom.com, inc. was formed on March 27, 1997 and was established to
offer over 2,000 titles of computer software to the public by means
of a site on the World Wide Web ("Web"). mrcdrom.com intends to
offer its customers the widest selection of one stop computer
software shopping through a secure site. Shoppers will be able to
receive information and purchase the latest computer software titles
in addition to most of the hard to find titles. mrcdrom.com will
have unlimited shelf space without the accompanying expense of a
store front, and related personnel. Purchasing software from
mrcdrom.com is more convenient because on-line shopping can occur 24
hours a day with no reason for shoppers to leave the comfort of their
own home.

mrcdrom.com began test marketing its Internet catalogue on April 3,
1997 and therefore is essentially a start-up operation. On March
31, 1997, the Company acquired $756,000 of computer software
inventory, proprietary web design software, the trademark "mrcdrom",
cash, and other assets for the issuance of 6,000,000 common shares.

THE OFFERING
<TABLE>
<S> <C>
Common Stock Offered...................3,000,000 shares at a price of
$4.00 per share and a minimum
investor subscription of 50 shares
($200).
Common Stock to be
outstanding after this offering...... .7,500,000 shares <F1>

Common Stock to be
outstanding after this offering...... .7,500,000 shares <F1>

Use of Proceeds............. ......... For working capital and other
general corporate purposes.
</TABLE>
_______________________
[FN] (1) Excludes 408,860 shares of Common Stock issuable upon exercise of
options outstanding at March 28, 1997 under the Company's Stock
Option Plans at a weighted average exercise price of $4.00 per share.
See "Executive Compensation" and "Directors Compensation".
[/FN]

RISK FACTORS

The securities offered hereby involve a high degree of risk. The
Company is a development stage company which has just recently
completed the web site through which its operations will be
conducted. The Company will be operating in a new, not yet widely
accepted market. There can be no assurance that the Company will be
able to have profitable operations. Other risk factors include, but
are not limited to, new and rapidly changing technology,
seasonality, system development and failure risks, and online
commerce security risks. An investment in the securities offered
hereby should be considered only by investors who can afford the
loss of their entire investment. See "Risk Factors".

SUMMARY FINANCIAL DATA
(unaudited*)
March 27, 1997(date of inception) to March 31, 1997
<TABLE>
<S> <C>
Statement of Operations

Revenues $ 0
Net income (loss) 0
Net income (loss) per share .00
Shares used in calculation
net income (loss) per share 6,000,000
</TABLE>
<TABLE>
<S> <C> <C> <C>
Balance Sheet Data

As Adjusted As Adjusted
Actual Minimum <F1> Maximum
<F2>

Cash $ 100,000 $ 250,000 $ 6,000,000
Working Capital (deficit) 700,000 850,000 6,600,000
Total Assets 756,000 1,006,000 6,756,000
Total Shareholders Equity 756,000 1,006,000 6,756,000
</TABLE>
[FN]

(1) To give effect to the sale of 62,500 Shares by the Company in
this offering.
(2) To give effect to the sale of 1,500,000 Shares by the Company in
this offering.

*Audited financial statements will be provided prior to the
commencement by the Company of this offering. The unaudited
financial statements and summary financial data include all
adjustments management believes are appropriate to provide accurate
financial information. [/FN]

THE COMPANY

mrcdrom.com was formed on March 27, 1997 to offer over 2,000 titles of
computer software to the public by means of a site on the World Wide
Web ("Web"). mrcdrom.com intends to offer its customers the widest
selection of one stop computer software shopping through a secure
site. Shoppers will be able to receive information and purchase the
latest computer software titles in addition to most of the hard to
find titles. mrcdrom.com will have unlimited shelf space without the
accompanying expense of a store front, and related personnel.
Purchasing software from mrcdrom.com is more convenient because
on-line shopping can occur 24 hours a day with no reason for shoppers
to leave the comfort of their own home.

mrcdrom.com began test marketing its Internet catalogue on April 3,
1997 and therefore is essentially a start-up operation. On March
31, 1997, it acquired $756,000 of computer software inventory,
proprietary web design software, the trademark "mrcdrom", cash and
other assets for the issuance of 6,00,000 common shares.

Management believes that mrcdrom.com is the only Internet catalogue
offering over 2,000 software titles through its web site. By
offering customers an authoritative selection of more than 2,000
software titles, as well as competitive pricing and outstanding
customer service, mrcdrom.com believes it has the ability to achieve
the most recognized and used Internet catalogue among online software
retailers.

Customers can access the mrcdrom.com catalogue through the web site
http://www.mrcdrom.com. A customer can order software, run searches
in various categories, and can check order status. Customers simply
click on a button to add software to their virtual shopping baskets
including adding and subtracting as they shop, prior to making a
final purchase decision. To execute orders, customers click on the
buy button and are prompted to supply shipping and payment details
through secure order processing .

The market for computer software has grown dramatically in recent
years but online selling represents only a small percentage.
According to Forrester Research, a market research firm, online sales
of computer products are expected to increase from $140 million to
$2,105 million from 1996 to 2000.

Projected Growth in Online Commerce ($ millions)
<TABLE>

<S> <C> <C> <C> <C> <C>
1996 1997 1998 1999 2000
Computer Products $ 140 323 701 1,228 2,105
Total Products 518 1,138 2,371 3,990 6,579
</TABLE>

Source: Forrester Research, Inc., Cambridge, MA

Total U.S. sales of computer products through retailers grew 20.4
percent in 1996 to a record $28.2 billion, according to Computer
Retail Week, a trade publication. Software sales grew 16 percent to
$4.5 billion worldwide, IDC reported.

The Internet is an increasingly significant global medium for
communications, content and online commerce. International Data
Corporation ("IDC") estimates that the number of Web users grew to
approximately 35 million by the end of 1996 and will grow to
approximately 163 million by 2000. The increasing functionality,
accessibility and overall usage of the Internet and online services
have made them an attractive commercial medium. The Internet and
other online services are evolving into a unique sales and marketing
channel, just as retail stores, mail-order catalogs and television
shopping have done. Unlike traditional retail channels, online
retailers do not have the burdensome costs of managing and
maintaining a significant retail store infrastructure or the
continuous printing and mailing costs of catalogue marketing.
Because of these advantages over traditional retailers, online
retailers have the potential to build large, global customer base
quickly and to achieve superior economic returns over the long term.
An increasingly broad base of products is being sold successfully
online, including computers, travel services, brokerage services,
automobiles and music, and books. IDC estimates that the total value
of goods and services purchased over the Web grew from $318 million in
1995, to an annualized run rate of $5.4 billion in December 1996, and
will increase to $95 billion in 2000.

mrcdrom.com was established to capitalize on the growing Internet
market by offering a one-stop site to purchase over 2,000 titles,
which management believes is more than any other site presently
offers. The Company believes that as Internet users are already
computer users they provide a ready market. Further, the economies of
having a wide range of titles without the overhead of real estate
costs and personnel to staff the stores offer a chance for profits
with a lower profit margin. The provision of the Company's reviews
and publisher descriptions offered in the catalogue enables customers
to make informed decisions.

It is expected, that the initial growth rate of web "hits" [i.e.
visits to the site without necessarily any purchases] will be
relatively large with that rate then stabilizing at a lower growth
rate.

The Company was incorporated in March 27, 1997 in Delaware. The
Company's headquarters are located at 2415 Midway, Suite 115,
Carrollton, Texas 75006. Its telephone number is (972) 713-2609.
Information contained on the Company's web site will not be deemed to
be a part of this Prospectus but is available for review at
http://www.mrcdrom.com. mrcdrom is a trademark of the Company and all
other trademarks are the respective trademarks of their owners.

RISK FACTORS

In addition to the other information contained in this Prospectus,
investors should carefully consider the following risk factors before
making an investment decision concerning the Common Stock. All
statements, trend analysis and other information contained in this
Prospectus relative to markets for the Company's products and trends
in net sales, gross margin and anticipated expense levels, as well as
other statements including words such as "anticipate", "believe",
"plan" "estimate" "expect" and "intend" and other similar
expressions, constitute forward-looking statements. These forward-
looking statements are subject to business and economic risks, and the
Company's actual results of operations may differ materially from
those contained in the forward-looking statements. No investor
should participate in this offering unless such investor can afford a
complete loss of their entire investment.

LACK OF OPERATING HISTORY The Company is a development-stage company
and has no prior history upon which investors may evaluate the
Company's performance. To date the Company has engaged in primarily
organizational efforts. The Company's prospects must be considered
in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development,
particularly companies in new and rapidly evolving markets such as
online commerce. Such risks for the Company include, but are not
limited to, an evolving and unpredictable business model and the
management of growth. To address these risks, the Company must,
among other things, maintain and increase its customer base,
implement and successfully execute its business and marketing
strategy, continue to develop and upgrade its technology and
transaction- processing systems, improve its web site, provide
superior customer service and order fulfillment, respond to
competitive developments, and attract, retain and motivate qualified
personnel. There can be no assurance that the Company will be
successful in addressing such risks, and the failure to do so could
have a material adverse effect on the Company's business, prospects,
financial condition and results of operations.

The Company believes that its success will depend on large part on its
ability to (a) extend its brand position, (b) provide its customers
with outstanding value and a superior shopping experience, and (c)
achieve sufficient sales volume to realize economies of scale.
Accordingly, the Company intends to invest in site development and
technology and operating infrastructure development. The Company
also intends to offer attractive pricing programs, which will reduce
its gross margins. Because the company has relatively low product
gross margins, achieving profitability given planned investment
levels depends upon the Company's ability to generate and sustain
substantially increased revenue levels. As a result, the Company
believes that it will incur operating losses for the next twelve (12)
months. The Company expects to use a portion of the net proceeds of
this offering to fund its operation losses. If such net proceeds,
together with cash generated by operations, are insufficient to fund
future operating losses, the Company may be required to raise
additional funds. There can be no assurance that such financing will
be available in amounts or on terms acceptable to the Company, if at
all.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS;
SEASONALITY As a start-up in addition to operating in a new and
rapidly changing market, the Company is unable to accurately forecast
its revenues. The Company's current and future expense levels are
based largely on its investment plans and estimates of future
revenues. Sales and operating generally depend on the volume of,
timing of and ability to fulfill orders received, which are difficult
to forecast without any historical trends. Further in an industry
such as software new developments come at a rapid pace resulting in
even historical comparisons being of limited value. The Company may
be unable to adjust spending in a timely manner to compensate for any
unexpected revenue shortfall. Accordingly, any significant shortfall
in revenues in relation to the Company's planned expenditures would
have an immediate adverse effect on the Company's business,
prospects, financial condition and results of operation. Further, as
a strategies response to changes in the competitive environment, the
Company may from time to time make certain pricing, service or
marketing decisions that could have a material adverse effect on its
business, prospects, financial condition and results of operations.
See "Business- Competition."

The Company expects to experience significant fluctuations in its
future quarterly operating results due to a variety of factors, many
of which are outside the Company's control. Factors that may
adversely affect the Company's quarterly operating results include
(a) the Company's ability to retain existing customers, attract new
customers at a steady rate and maintain customer satisfaction, (b)
the Company's ability to manage inventory and fulfillment operations
and maintain gross margins,( c)the announcement or introduction of
new sites, services and products by the Company and its competitors,
(d) price competition or higher wholesale prices in the industry, (e)
the level of use of the Internet and online services and increasing
consumer acceptance of the Internet and other online services for the
purchase of consumer products such as those offered by the Company
(f) the Company's ability to upgrade and develop its systems and
infrastructure and attract new personnel in a timely and effective
manner, (g) the level of traffic on the Company's web site (g)
technical difficulties, system downtime or Internet brownouts, (h)
the amount and timing of operating costs and capital expenditures
relating to expansion of the Company's business, operations and
infrastructure, ( I) the number of popular software titles introduced
(j) the level of merchandise returns (k) governmental regulation and
(l) general economic conditions specific to the Internet, online
commerce and the software industry in total.

The Company expects seasonality in its sales. Traditional retail
sales are greatest in the fourth quarter of the calendar year and
software sales, in particular, seem to increase in the first quarter
of the calendar year. As the operations of the Company are new, there
is no historical data to suggest the affect of seasonality on the
revenues and profits of the Company. Should the Company's operating
results fall below expectations of securities analysts and investors
there could be a materially adverse effect on the market trading
price of the Company Common Stock.

RISK OF CAPACITY CONSTRAINTS; SYSTEM DEVELOPMENT RISKS In order to
maximize the revenues from the sale of low margin products, high
volumes must be achieved on the web site. Thus, the satisfactory
performance, reliability and availability of the Company's web site,
transaction-processing systems, and network infrastructure are
critical to the Company's reputation and ability to attract and retain
customers and maintain adequate customer service levels. Any system
interruptions that result in the unavailability of the web site or
reduced order fulfillment performance would reduce the volume of
goods sold and the attractiveness of the Company's product and service
offerings. Web sites experience periodic system interruptions, which
the Company believes will occur from time to time. Any substantial
increase in the volume of traffic on the Company's web site or the
number of orders place by customers will require the Company to
expand and upgrade further its technology, transaction-processing
systems and network infrastructure. There can be no assurance that
the Company will be able to accurately project the rate or timing of
increases, if any, in the use of its web site or timely expand and
upgrade its systems and infrastructure to accommodate such increases.

The Company uses both internally developed systems for its web site
and software developed by outside vendors for the secured
transactions. There can be no assurance that the software developed
internally will perform satisfactorily at the volume levels that are
required to attain profits for the Company. Further, there can be no
assurance that the Company will be able to modify the software to
adapt to the increased volume if it occurs or any other standards
that may later be adopted in order for online commerce to occur on
the Internet. As the Company depends on the outside vendor for the
secured payment, there can be no assurance that there will be no
interruptions of service or that the outside vendor will be able to
maintain its software in light of increased volume of purchases
and/or changes in standards on the Internet.

RISK OF SYSTEM FAILURE; SINGLE SITE AND ORDER INTERFACE. The
Company's success, in particular its ability to successfully receive
and fulfill orders and provide high-quality customer service, largely
depends on the efficient and uninterrupted operation of its computer
and communications hardware systems. Substantially all of the
Company's computer and communications hardware is located at a single
leased facility in Carrollton, Texas. The Company's system could
experience failure due to flood, power loss, telecommunications
failure, break-ins, earthquake, and similar events. The Company
presently has redundant systems however, they are located at the same
site. Despite the implementation of network security measures by the
Company, its servers are vulnerable to computer viruses, physical or
electronic break-ins, and similar disruptions, which could lead to
interruptions, delays, loss of data or the inability to accept and
fulfill customer orders. The occurrence of any of the foregoing
risks could have a material adverse effect on the Company's business,
prospects, financial condition and results of operations.

MANAGEMENT OF POTENTIAL GROWTH; NEW MANAGEMENT TEAM; LIMITED SENIOR
MANAGEMENT RESOURCES. The Company anticipates that significant
expansion of its operations will be required to address potential
growth in its customer base and market opportunities. This expansion
will place a significant strain on the Company's management,
operational and financial resources. To manage the expected growth
of its operations, the Company will be required to improve existing
and implement new transaction-processing, operational and financial
systems, procedures and controls, and to train and manage its
employee base. The Company also will be required to expand its
finance, administrative, and operations staff. Further, the Company's
management will be required to maintain and expand its relationships
with various distributors and publishers, freight companies, other
web sites and other web service providers, the Internet and other
online service providers and other third parties necessary to the
Company's business. There can be no assurance that the Company's
current and planned personnel, systems, procedures and controls will
be adequate to support the Company's future operations, that
management will be able to hire, train, retain, motivate and manage
required personnel or the Company management will be able to
successfully identify, manage and exploit existing and potential
market opportunities. If the Company is unable to manage growth
effectively, its business, prospects, financial condition and results
of operations will be materially adversely affected. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations".

DEPENDENCE ON CONTINUED GROWTH OF ONLINE COMMERCE. The Company's
future revenues and any future profits are substantially dependent
upon the widespread acceptance and use of the Internet and other
online services as an effective medium of commerce by consumers.
Rapid growth in the use of and interest in the Internet, the web and
online services is a recent phenomenon, and there can be no assurance
that acceptance and use will continue to develop or that a
sufficiently broad base of consumers will adopt, and continue to use,
the Internet and other online services as a medium of commerce.
Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty
and there exist few proven services and products. The Company relies
on consumers who have historically used traditional means of commerce
to purchase merchandise. For the Company to be successful, these
consumers must accept and utilize novel ways of conducting business
and exchanging information.

In addition, the Internet and other online services may not be
accepted as a viable commercial marketplace for a number of reasons,
including potentially inadequate development of the necessary network
infrastructure or delayed development of enabling technologies and
performance improvements. To the extent that the Internet and other
online services continue to experience significant growth in the
number of users, their frequency of use or an increase in their
bandwidth requirements, there can be no assurance that the
infrastructure for the Internet and online services will be able to
support the demands placed upon them. In addition, the Internet or
other online services could lose their viability due to delays in the
development or adoption of new standards and protocols required to
handle increased levels of Internet activity, or due to increased
governmental regulation. Changes in or insufficient availability of
telecommunications services to support the Internet or other online
services also could result in slower response times and adversely
affect usage of the Internet and online series generally and
mrcdrom.com in particular. If use of the Internet and other online
services does not continue to grow or grows more slowly than
expected, if the infrastructure for the Internet and other online
services does not effectively support growth that may occur, or if the
Internet and other online services do not become a viable commercial
marketplace, the Company's business, prospects, financial condition
and results of operations would be materially adversely affected.

RAPID TECHNOLOGICAL CHANGE. To remain competitive, the Company must
continue to enhance and improve the responsiveness, functionality and
features of the mrcdrom.com online catalogue. The Internet and the
online commerce industry are characterized by rapid technological
change, changes in user and customer requirements and preferences,
frequent new product and service introductions embodying new
technologies and the emergence of new industry standards and practices
that could render the Company's exiting web site and proprietary
technology and systems obsolete. The Company's success will depend,
in part, on its ability to license leading technologies useful in its
business, enhance its existing services, develop new services and
technology that address the increasingly sophisticated and varied
needs of its prospective customers, and respond to technological
advances and emerging industry standards and practices on a
cost-effective and timely basis. The development of web site and
other proprietary technology entails significant technical and
business risks. There can be no assurance that the Company will
successfully use new technologies effectively or adapt its web site,
proprietary technology and transaction-processing systems to customer
requirement or emerging industry standards. If the Company is
unable, for technical, legal financial or other reasons, to adapt in
a timely manner in response to changing market conditions or customer
requirements, its business, prospects, financial condition and results
of operations would be materially adversely affected. See
"Business-Technology".

DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL PERSONNEL. The
Company's performance is substantially dependent on the continued
services and on the performance of its senior management and other
key personnel, particularly Daniel Wettreich, Chief Executive Officer
and Chairman of the Board. The Company's performance also depends
on the Company's ability to retain and motivate its other officers
and key employees. The loss of the services of any of its executive
officers or other key employees could have a material adverse effect
on the company's business, prospects, financial condition and results
of operations. The Company does not have long-term employment
agreement with any of its key personnel, other than Mr. Wettreich,
and maintains no "key person" life insurance policies. The Company's
future success also depends on its ability to identify, attract,
hire, train, retain and motivate other highly skilled technical,
managerial, merchandising, marketing and customer service personnel.
Competition for such personnel is intense, and there can be no
assurance that the Company will be able to successfully attract,
assimilate or retain sufficiently qualified personnel. The failure
to retain and attract the necessary technical, managerial,
merchandising, marketing and customer service personnel could have a
material adverse effect on the Company's business, prospects,
financial condition and results of operations. See
"Business-Employees" and "Management".

ONLINE COMMERCE SECURITY RISKS. A significant barrier to online
commerce and communications is the secure transmission of
confidential information over public networks. The Company relies on
encryption and authentication technology licensed from third parties
to provide the security and authentication necessary to effect secure
transmission of confidential information, such as customer credit card
and checking account numbers. There can be no assurance that
advances in computer capabilities, new discoveries in the field of
cryptography, or other events or developments will not result in a
compromise or breach of the algorithms used by the Company to protect
customer transaction data. If any such compromise of the Company's
security were to occur, it could have a material adverse effect on
the Company's reputation, business, prospects, financial condition
and results of operations. A party who is able to circumvent the
Company's security measures could misappropriate proprietary
information or cause interruptions in the Company's operations. The
Company may be required to expend significant capital and other
resources to protect against such security breaches or to alleviate
problems caused by such breaches. Concerns over the security of the
Internet and other online transactions and the privacy of users may
also inhibit the growth of the Internet and other online services
generally, and the web in particular, especially as a means of
conducting commercial transactions. To the extent that activities of
the Company or third-party contractors involve the storage and
transmission of proprietary information, such as credit card or
checking account numbers, security breaches could damage the
Company's reputation and expose the Company to a risk of loss or
litigation and possible liability. There can be no assurance that
the Company's security measures will prevent security breaches or
that failure to prevent such security breaches will not have a
material adverse effect on the Company's business, prospects,
financial condition and results of operations. See
"Business-Technology."

COMPETITION The online commerce market, particularly over the
Internet, is new, rapidly evolving and intensely competitive, which
competition the Company expects to intensify in the future. Barriers
to entry are minimal, and current and new competitors can launch new
sites at a relatively low cost. In addition, the software industry is
intensely competitive. The Company will compete with a variety of
other companies. These competitors include a) various other online
vendors and publishers; b) indirect online commerce providers like
AOL and Microsoft who offer software of their own and others; c)
retail vendors of software such as CompUSA, Computer City, and Best
Buy.

The Company believes that the principal competitive factors in its
market are brand recognition, selection, customer service,
convenience, price, accessibility, reliability and speed of
fulfillment. The Company's competitors have longer operating
histories, larger customer bases, greater brand recognition and
significantly greater financial, marketing and other resources than
the Company. In addition, online retailers may be acquired by,
receive investments from or enter into other commercial relationships
with larger, well- established and well-financed companies as use of
the Internet and other online services increases. Certain of the
Company's competitors may be able to secure merchandise from
publishers on more favorable terms, devote greater resources to
marketing and promotional campaigns, adopt more aggressive pricing or
inventory availability policies and devote substantially more
resources to web site and systems development than the Company.
Increased competition may result in reduced operating margins, loss of
market share and a diminished brand franchise. There can be no
assurance that the Company will be able to compete successfully
against current and future competitors, and competitive pressures
faced by the Company may have a material adverse effect on the
Company's business, prospects, financial condition and results of
operation. Further, as a strategic response to changes in the
competitive environment, the Company may from time to time make
certain pricing, service or marketing decisions or acquisitions that
could have a material adverse effect on its business, prospects,
financial condition and results of operations. New technologies and
the expansion of existing technologies may increase the competitive
pressures on the Company. For example, companies that control access
to transactions through network access or web browsers could promote
the Company's competitors or charge the Company a substantial fee for
inclusion.

RELIANCE ON SUPPLIERS. The Company carries minimal inventory and
relies to a large extent on rapid fulfillment from vendors. The
Company has no long-term contracts or arrangements with any of its
vendors that guarantee the availability of merchandise, the
continuation of particular payment terms or the extension of credit
limits. There can be no assurance that the Company's current vendors
will continue to sell merchandise to the Company on current terms or
that the Company will be able to establish new or extend current
vendor relationships to ensure acquisition of merchandise in a timely
and efficient manner and on acceptable commercial terms. If the
Company were unable to develop and maintain relationship with vendors
that would allow it to obtain sufficient quantities of merchandise on
acceptable commercial terms, its business, prospects, financial
condition and results of operation would be materially adversely
affect. See "Business - Warehousing and Fulfillment."

RISKS ASSOCIATED WITH ENTRY INTO NEW BUSINESS AREAS. The Company may
choose to expand its operations by developing new web sites, promoting
new or complementary products or sales formats, expanding the breadth
and depth of products and services offered or expanding its market
presence through relationships with third parties. In addition, the
Company may pursue the acquisition of new or complementary business,
products or technologies, although it has no present understanding,
commitments or agreements with respect to any material acquisitions or
investments. There can be no assurance that the Company would be
able to expand its efforts and operations in a cost-effective or
timely manner or that any such efforts would increase overall market
acceptance. Furthermore, any new business or web site launched by the
Company that was not favorably received by consumers could damage the
company's reputation or the mrcdrom.com brand. Expansion of the
company's operations in this manner would also require significant
additional expenses and development, operations and editorial
resources and would strain the Company's management, financial and
operational resources. The lack of market acceptance of such efforts
or the company's inability to generate satisfactory revenues from
such expanded services or products to offset their cost could have a
material adverse effect on the Company's business, prospects,
financial condition and results of operations.

TRADEMARKS AND PROPRIETARY RIGHTS. The Company regards its
copyrights, service marks, trademarks, trade dress, trade secrets and
similar intellectual property as critical to its success, and relies
on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with its employees,
customers, partners and others to protect its proprietary rights.
The Company pursues the registration of its trademarks and service
marks in the U.S. and internationally, and has applied for the
registration of certain of its trademarks and service marks.
Effective trademark, service mark, copyright and trade secret
protection may not be available in every country in which the
Company's products and services are made available online. The
Company expects that it may license in the future, certain of its
proprietary rights or reputation, which could have a material adverse
effect on the Company's business, prospects, financial condition and
results of operations. There can be no assurance that the steps taken
by the company to protect its proprietary rights will be adequate or
that third parties will not infringe or misappropriate the Company's
copyrights, trademarks, trade dress and similar proprietary rights.
In addition, there can be assurance that other parties will not assert
infringement claims against the Company. The company is not currently
aware of any legal proceedings pending against it. See "Business -
Intellectual Property."

GOVERNMENTAL REGULATION AND LEGAL UNCERTAINTIES. The Company is not
currently subject to direct regulation by any domestic or foreign
governmental agency, other than regulations applicable to business
generally, and laws or regulations directly applicable to access to
online commerce. However, due to the increasing popularity and use
of the Internet and other online services, it is possible that a
number of laws and regulations may be adopted with respect to the
Internet or other online services covering issues such as user
privacy, pricing , content, copyrights, distribution and
characteristics and quality of products and services. Furthermore,
the growth and development of the market for online commerce may
prompt calls for more stringent consumer protection laws that may
impose additional burdens on those companies conducting business
online. The adoption of any additional laws or regulations may
decrease the growth of the Internet or other online services, which
could, in turn, decrease the demand for the Company's products and
services and increase the Company's cost of doing business, or
otherwise have an adverse effect on the Company 's business,
prospects, financial condition and results of operations. Moreover,
the applicability to the Internet and other online services of
existing laws in various jurisdictions governing issues such as
property ownership, sales tax, libel and personal privacy is uncertain
and may take years to resolve. Any such new legislation or
regulation, the application of laws and regulations from
jurisdictions whose laws do not currently apply to the Company's
business, or the application of existing laws and regulations to the
Internet and other online services could have a material adverse
effect on the Company's business, prospects, financial condition and
results of operations.

SALES TAX COLLECTION. The Company does not currently collect sales or
other similar taxes in respect of shipments of goods into states
other than Texas. However, one or more states may seek to impose
sales tax collection obligations on out-of-state companies such as
the Company which engage in online commerce. In addition, any new
operation in states outside Texas could subject shipments into such
states to state sales taxes. A successful assertion by one or more
state or any foreign country that the Company should collect sales or
other similar taxes on the sale of merchandise could have a material
adverse effect on the Company's business, prospects, financial,
condition and results of operations.

CONTROL OF THE COMPANY. Immediately upon completion of this
offering, the outstanding Common Stock will be beneficially owned
approximately 60% by Camelot Corporation ("Camelot"). Camelot will
hold an aggregate of approximately 60% of the outstanding voting
power of the Company immediately upon completion of this offering.
As a result, upon completion of this offering, Camelot will be able to
(a) elect, or defeat the election of, any of the Company's
directors, (b) amend or prevent amendment of the company's
certificate of Incorporation or Bylaws, or (c ) effect or prevent a
merger, sale of assets or other corporate transaction, and the
Company public stockholders, for so long as they hold less than 50%
of the outstanding voting power of the Company, will not be able to
control the outcome of such transactions. The extent of ownership by
Camelot may have the effect of preventing a change in control of the
Company or discouraging a potential acquirer from making a tender
offer or otherwise attempting to obtain control of the Company, which
in turn could have an adverse effect on the market price of the
common Stock. See "Management," "Certain Transactions" and "Principal
Stockholders."

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE. The
trading price of the Common Stock is likely to be highly volatile and
could be subject to wide fluctuations in response to factors such as
actual or anticipated variations in quarterly operating results,
announcements or technological innovations, new sales formats or new
products or services by the Company or its competitors, changes in
financial estimates by securities analysts, conditions or trends in
the Internet and online commerce industries, changes in the market
valuations of other Internet, online service or retail companies,
announcements by the Company of significant acquisitions, strategic
partnerships, joint ventures or capital commitments, additions or
departures of key personnel, sales of common stock and many other
factors many of which are beyond the Company's control. In addition,
the stock market in general, and the Nasdaq and the market for
Internet- related and technology companies in particular, has
experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of
such companies. The trading prices of many technology companies'
stocks are at or near historical highs and reflect price earnings
ratios substantially above historical levels. There can be no
assurance that these trading prices and price earnings ratios will be
sustained. These broad market and industry factors may materially and
adversely affect the market price of the Common Stock, regardless of
the Company's operating performance. In the past, following periods
of volatility in the market price of a company's securities,
securities class-action litigation has often been instituted against
such company. Such litigation, if instituted, could result in
substantial costs and a diversion of management's attention and
resources, which could have a material adverse effect on the
Company's business, prospects, financial condition and results of
operations.

SHARES ELEIGIBLE FOR FUTURE SALE. Sales of substantial amounts of the
Company's common stock in the public market after this offering could
adversely affect prevailing market prices for the Common Stock. The
3,000,000 shares of Common Stock offered hereby will be freely
tradable without restriction in the public market. Taking into
account restrictions imposed by the Securities Act of 1933, as amended
(the "Securities Act") , rules promulgated by the Securities and
Exchange Commission (the "Commission") thereunder the number of
additional shares that will be available for sale in the public
market, subject in some cases to the volume and other restrictions of
Rule 144 under the Securities Act, will be as follows: approximately
4,500,000 additional shares will be eligible for sale beginning
Maarch 28, 1999. In addition, the Company intends to file a
registration statement on Form S-8 under the Securities Act
approximately 180 days after the date of this Prospectus to register
approximately 500,000 shares of Common Stock reserved for issuance
under the Company Stock Option Plans. See "Description of Capital
Stock" and "Shares Eligible for Future Sale".

ANTITAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS. Upon the closing
of this offering, the Company's Board of Directors will have the
authority to issue up to 5,000,000 shares of Preferred Stock and to
determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any
further vote or action by the stockholders. The rights of the
holders of Common Stock will be subject to, and may be adversely
affected by the rights of the holders of any Preferred Stock that may
be issued in the future. The issuance of Preferred Stock may have the
effect of delaying, deferring or preventing a change in control of
the Company without further action by the stockholders and may
adversely affect the voting and other rights of the holders of Common
Stock. The Company has no present plans to issue shares of Preferred
Stock. Further, certain provisions of the Company's Certificate of
Incorporation and Bylaws and Delaware law could delay or make more
difficult a merger, tender offer or proxy contest involving the
Company. See "Description of Capital Stock"

NO SPECIFIC USE OF PROCEEDS. The Company has not designated any
specific use for the net proceeds from the sale by the Company of the
Common Stock offered hereby. The Company expects to use the net
proceeds for general corporate purposes, including working capital to
fund anticipated operating losses, marketing expenses and capital
expenditures. A portion of net proceeds may also be used to acquire
or invest in complementary businesses, products and technologies.
>From time to time, in the ordinary course of business, the Company
expects to evaluate potential acquisitions or such business, products
or technologies. However, the Company has no present understandings,
commitments, or agreements with respect to any material acquisition or
investment. Accordingly, management will have significant flexibility
in applying the net proceeds of this offering. The failure of
management to apply such funds effectively could have a material
adverse effect on the company's business, prospects, financial
condition and results of operations. See " Use of Proceeds."

IMMEDIATE AND SUBSTANTIAL DILUTION. The initial public offering price
is substantially higher that the book value per outstanding share of
Common Stock. Accordingly, purchasers in this offering will suffer
an immediate and substantial dilution of $3.85 per share and $3.10
per share (minimum and maximum offerings respectively) in the net
tangible book value of the common Stock from the initial public
offering price. Additional dilution will occur upon exercise of
outstanding options granted by the Company. See "Dilution".

ARBITRARY DETERMINATION OF OFFERING PRICE. The offering price of the
Common Shares was arbitrarily determined by the Company, and may not
be indicative of the market price of the Common Shares after this
offering. Among the factors considered in establishing the offering
price were the proceeds to be raised by the Company, the percentage
of ownership to be held by investors in this offering, the experience
of Company management and the current market conditions in the
over-the counter securities market. Accordingly, there is no
relationship whatsoever between the offering price and the assets,
earnings or book value of the Company, or any other recognized
criteria of value. See "Plan of Distribution."

ESCROW OF INVESTORS' FUNDS PENDING SALE OF MINIMUM NUMBER OF SHARES
OFFERED. Under the terms of this offering, the company is offering
the Shares on a "62,500 Shares or none, best efforts" basis. If the
minimum number of Shares is sold, the remaining 2,937,500 Shares will
be offered on a "best efforts" basis until all of the shares are sold
or the offering period ends, whichever occurs first, unless the
offering is terminated earlier by the Company. Therefore, no
commitment exists by anyone to purchase all or any part of the Shares
offered hereby. Consequently, as there is no assurance that the
minimum number of Shares being offered will be sold, subscribers'
funds may be escrowed for as long as 90 days ( or a period of 180 days
if the offering period is extended by the Company). Investors,
therefore will not have the use of any funds paid for the purchase of
Shares during the offering period. In the event that the minimum
number of Shares offered hereby are not sold within the offering
period, subscribers' funds will then be promptly returned without
interest, and the offering will be withdrawn. See "Plan of
Distribution".

RISKS OF LOW-PRICED STOCK; POSSIBLE EFFECT OF "PENNY STOCK" RULES ON
LIQUIDITY OF THE COMPANY'S SECURITIES. There can be no assurance
that the Company's Common Stock will not become subject to certain
rules and regulations promulgated by the Commission pursuant to the
Securities Enforcement Remedies and Penny Stock Reform Act of 1990
(the "Penny Stock Rules"). Such rules and regulations impose strict
sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and certain
"accredited investors." For transactions covered by the Penny Stock
Rules, a broker-dealer must make a special suitablitility
determination for the purchaser and must have received the purchase's
written consent for the transaction prior to sale. Consequently,
such rule may affect the ability of broker-dealers to sell the
Company's securities and may affect the ability of purchasers in this
offering to sell any of the Shares acquired hereby in the Secondary
market.

The Penny Stock Rules generally define a "penny stock" to be any
security not listed on an exchange or not authorized for quotation on
the NASDAQ Stock Market and has a market price (as therein defined)
less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. For any transactions by
broker-dealers involving a penny stock (unless exempt), the rules
require delivery, prior to a transaction in a penny stock, of a risk
disclosure document relating to the market for penny stocks.
Disclosure is also required to be made about compensation payable to
both the broker- dealer and the registered representative and current
quotations for the securities. Finally, monthly statements are
required to be sent disclosing recent price information for the penny
stocks.

The foregoing penny stock restrictions will not apply to the Company's
securities if such securities are listed on an exchange or quoted on
the Nasdaq Stock Market and have certain price and volume information
provided on a current and continuing basis or if the Company meets
certain minimum net tangible asset or average revenue criteria. The
Company intends to apply for a quotation on the Nasdaq Small Cap
Market but there can be no assurance that the Company's securities
will qualify for Nasdaq or for exemption from the Penny Stock Rules.
If the Company did not qualify for Nasdaq it will trade on the Nasdaq
OTC Bulletin Board. In any event, even if the Company's securities
were exempt from the Penny Stock Rules, they would remain subject to
Section 15(h)(6) of the Exchange Act, which gives the Commission the
authority to prohibit any person that is engaged in unlawful conduct
while participating in a distribution of a penny stock from
associating with a broker-dealer or participating in a distribution
of a penny stock, if the Commission finds that such a restriction
would be in the public interest. If the Company's Shares were
subject to the rules on penny stocks, the market liquidity for the
Company's share could be severely adversely affected.

USE OF PROCEEDS

The net proceeds to the company from the sale of the minimum number of
shares offered (62,500) will be $150,000 and from the sale of the
maximum number of shares offered (1,500,000) will be $5,900,000, at
an initial public offering price of $4.00 per share and after
deducting the estimated offering expenses of approximately $100,000.
The net proceeds from the additional 1,500,000 Common Shares offered
hereby are for the benefit of the Selling Shareholder and no proceeds
will go to the Company from the sale of those shares. All the
proceeds from the minimum subscription will go to the Company, and
subsequently all subscriptions will be split fifty percent to the
Company and fifty percent to the Selling Shareholder.

The principal purposes of this offering are to obtain additional
capital, to create a public market for the Common Stock, to
facilitate future access by the Company to public equity markets, and
to provide increased visibility and credibility in a marketplace where
many of the Company's current and potential competitors are or will
be publicly held companies. The company has no specific plan for the
net proceeds of the offering. The Company expects to use the net
proceeds for general corporate purposes, including working capital to
fund anticipated operating losses, marketing expenses and capital
expenditures. A portion of net proceeds may also be used to acquire
or invest in complementary business, products and technologies. From
time to time, in the ordinary course of business, the Company expects
to evaluate potential acquisitions of such business, products or
technologies. However, the Company has no present understanding,
commitments or agreements with respect to any material acquisitions
or investments. Pending use of the net proceeds for the above
purposes, the Company intends to invest such funds in short- term,
interest-bearing, investment-grade securities. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its
capital stock. The Company currently intends to retain any future
earnings of its business, and therefore does not anticipate paying
any cash dividends in the foreseeable future.

DILUTION

As of April 1, 1997, there were 6,000,000 Shares of the Company's
Common Stock outstanding having a net tangible book value of $730,000
or approximately $0.126 per share. Net tangible book value per share
is the net tangible assets of the Company (total assets less total
liabilities and intangible assets) divided by the number of shares of
Common Stock outstanding. Upon completion of this offering, there
will be 7,500,000 shares of the Company's Common Stock outstanding
having a net tangible book value of approximately $980,000 or
approximately $0.1621 per share if the minimum number of Shares is
sold; and 7,500,000 shares of the Company's Common Stock outstanding
having a net tangible book value of approximately $6,730,000 or
approximately $0.90 per share if the maximum number of Shares is
sold. The net tangible book value of each share will have increased
by approximately $0.004 per share to present stockholders, and
decreased by approximately $3.838 per share (a dilution of 96%) to
public investors if the minimum number of Shares is sold, and the net
tangible book value of each share will have increased by
approximately $.778 per share to the present stockholders and
decreased by approximately $3.10 per share (a dilution of 78%) to
public investors if the maximum number of Shares is sold.

Dilution represents the difference between the public offering price
and the net tangible book value per share immediately after the
completion of the public offering. Dilution arises mainly from the
arbitrary decision by the Company as to the offering price per share.
Dilution of the value of the Shares purchased by the public in this
offering will also be due, in part, to the lower book value of the
shares presently outstanding and in part to expenses which are, or
may be, incurred in connection with the offering of the Shares. The
following table illustrates this dilution:
<TABLE> <S>
<C> ASSUMING MINIMUM NUMBER OF SHARES SOLD Public Offering Price Per
Share $4.00 Net Tangible Book Value Per Share,
Before Offering $0.122 Increase Per Share Attributable to
Payment by Public Investors $0.040 Net Tangible Book Value Per
Share, After Offering $0.162 Dilution to public Investors
Per Share $3.838

ASSUMING MAXIMUM NUMBER OF SHARES SOLD

Public Offering Price Per Share $4.00
Net Tangible Book Value Per Share, Before Offering $0.122
Increase Per Share Attributable to Payment by Public Investors $0.778
Net Tangible Book Value Per Share, After Offering $0.90
Dilution to public Investors Per Share $3.10
</TABLE>

BUSINESS

mrcdrom.com, inc. was established to offer an Internet software
catalogue. The Company will offer its customers compelling value
through innovative use of technology, broad selection, high-quality
content, a high level of customer service, and competitive pricing.
As an online software catalogue, mrcdrom.com, has virtually unlimited
online shelf space and can offer a large selection through an
efficient search and retrieval interface. The Company offers more
than 2000 titles. Beyond the benefits of selection, purchasing
software from mrcdrom.com is more convenient than shopping in a
physical store because online shopping can be done 24 hours a day and
does not require a trip to a store. Furthermore, mrcdrom.com's high
inventory turnover, lack of investment in expensive retail real
estate and reduced personnel requirements give it meaningful
structural economic advantages relative to traditional retailers.
See "Risk Factors - Limited Operating History".

INDUSTRY BACKGROUND

Growth of the Internet and Online Commerce

The increasing functionality, accessibility and overall usage of the
Internet and online services have made them an attractive commercial
medium. The Internet and other online services are evolving into a
unique sales and marketing channel, just as retail stores, mail- order
catalogs and television shopping have done. Online retailers can
interact directly with customers by frequently adjusting their
featured selections, editorial insights, shopping interfaces, pricing
and visual presentations. The minimal cost to publish on the Web,
the ability to reach and serve a large and global group of customers
electronically from a central location, and the potential for
personalized low-cost customer interaction provide additional
economic benefits for online retailers. Unlike traditional retail
channels, online retailers do not have the burdensome costs of
managing and maintaining a significant retail store infrastructure or
the continuous printing and mailing costs of catalogue marketing.
Because of these advantages over traditional retailers, online
retailers have the potential to build large, global customer base
quickly and to achieve superior economic returns over the long term.
An increasingly broad base of products is being sold successfully
online, including computers, travel services, brokerage services,
automobiles and music, and books. IDC estimates that the total value
of goods and services purchased over the Web grew from $318 million
in 1995, to an annualized run rate of $5.4 billion in December 1996,
and will increase to $95 billion in 2000.

Traditional Software Retailing

Several characteristics of traditional software retailing have created
inefficiencies for all participants. Physical store-based retailers
must make significant investments in inventory, real estate and
personnel for each retail location. This capital and real estate
intensive business model, among other things, limits the amount of
inventory that can be economically carried in any location. The
average store limits customer selection and available retail shelf
space for the majority of published titles. In addition, software
publishers typically offer generous rights of return to their
customers and, as a result, effectively bear the risk of their
customers' demand forecasting which encourages overordering. As a
result, returns are high, creating substantial additional costs.
Finally, traditional retailers cannot easily obtain demographic and
behavioral personalized services.

THE MRCDROM.COM, INC. SOLUTION

mrcdrom.com, inc. was founded to capitalize on the opportunity for
online retailing. The Company believes that the software industry is
particularly suited to online retailing for many compelling reasons.
An online retailer has virtually unlimited online shelf space and can
offer customers a large selection through an efficient search and
retrieval interface. This is particularly valuable in the software
market because the extraordinary number of different items precludes
even the largest physical store from economically stocking more than
a small minority of available titles. In addition, by serving a large
and global market through centralized distribution and operations,
online retailers can realize significant structural cost advantages
relative to traditional retailers. Furthermore, unlike with clothing
or other personal products, consumers can make educated purchase
decisions using online information. In addition, the demographic
overlap between frequent buyers and Internet users is high. Further,
online selling promises significant benefits for publishers because
centralized distribution is believed to greatly reduce product returns
and because consumers preference information can be efficiently
captured and utilized. By offering customers an authoritative
selection of titles, as well as competitive pricing and outstanding
customer service, mrcdrom.com, inc. believes it can achieve a
preeminent position among online retailers. Key components of the
mrcdrom.com solution include:

Selection. mrcdrom.com offers a breadth of selection that would be
economically impractical to stock in a physical store or to include in
a mail-order catalogue. mrcdrom.com. offers more than 2000 titles
through a consistent search and retrieval interface.

Online Economics. As an online seller, mrcdrom.com enjoys meaningful
structural economic advantages relative to traditional retailers. As
a result of its online business model and centralized distribution,
mrcdrom.com offers significantly improved inventory turnover,
eliminates investment in expensive retail real estate and dramatically
reduces personnel requirements. Further, mrcdrom.com serves a global
market through centralized operations, allowing its investments in
Web sites, content, marketing and technology to be leveraged over a
relatively large sales base.

Customer Convenience. Beyond the benefits of selection, purchasing
from mrcdrom.com is more convenient than shopping in a physical store
because the mrcdrom.com catalogue is open 24 hours per day and
shopping does not require a trip to a store. Software can be shipped
directly to the customer's home or office. The Company believes that
customers may buy more software because they have more hours to shop,
can act immediately on a purchase impulse and can locate software that
is hard to find. Because the mrcdrom.com online catalogue has a
global reach, it can deliver an extremely broad selection to
customers in rural, international or other locations that cannot
support large-scale physical stores.

Compelling Content. mrcdrom.com delivers relevant, informative and
editorial and other content, including reviews. In addition, it will
offer reviews by other users, and third-party reviewers who can
provide diverse and often stimulative points of view to inform and
entertain customers while shopping.

Personalized Service. Over time, the Company can accumulate
substantial behavior and preference information that will allow it to
provide increasingly rich value- added services to its customers.

Benefits to Vendors. mrcdrom.com methods of online retailing offer
substantial benefits to publishers. Because mrcdrom.com incorporates
centralized distribution and orders most products based on actual
customer demand, it believes that its returns to publishers and
wholesalers will be significantly below industry norms. The Company
believes its market approach may increase sales of many second- and
third-tier titles that are not typically stocked in physical stores.
In addition, the Company believes it will be able to help publishers
target customers for particular product offerings.

STRATEGY

mrcdrom.com's objective is to be the leading online retailer of
computer software. The Company plans to attain this goal through the
following key strategies:

Create Customer Loyalty. The Company's goal is to be a leading source
for software by delivering to its customers the benefits of online
commerce. mrcdrom.com offers its customers value through innovative
use of technology, broad selection, high- quality content, customer
service, and competitive pricing. In addition, the Company will
offer its customers a high-quality shopping experience through
informative and editorial content, as well as simple and efficient
navigation and search capabilities.

Build Brand Recognition. The Company's strategy is to promote,
advertise and increase its brand equity and visibility through
excellent service and a variety of marketing and promotional
techniques, including advertising on leading Web sites and other
media, conducting an ongoing public relations campaign and developing
business alliances and partnerships.

Create a Superior Economic Model. Because it is not burdened by the
costs or legacy of physical store network and related personnel, the
Company believes it has an inherent economic advantage relative to
traditional retailers. The Company's goal is to capitalize on this
advantage by aggressively driving revenue growth to achieve economies
of scale and by incorporating technological advances throughout its
business.

Maintain Technology. A state-of-the-art interactive commerce
platform is necessary to enhance the mrcdrom.com service, and leverage
the unique characteristics of online retailing. mrcdrom.com will
continue to expend efforts developing, acquiring and implementing
technology-driven enhancements to its Web site and
transaction-processing systems. Among other technology objectives,
the Company intends to make the user interface as intuitive, engaging
and fast as possible and continuously improve the efficiency of its
fulfillment activities.

Build Vendor Relationships. The Company will seek to utilize the
structural advantages inherent in its business model to building
strong relationships with its vendors. The demographic and
purchasing data accumulated by the Company will enable it to help
publishers target customers for particular product offerings. Through
targeted marketing and virtually unlimited online shelf space, the
Company can offer publishers enhanced promotional opportunities for
new titles and second- and third-tier titles.

Pursue Incremental Revenue. The Company intends to leverage its brand,
online commerce experience, operating infrastructure and customer base
to broaden its presence and develop additional revenue opportunities.
The Company will consider developing incremental revenue through
affiliated or related sites, related product areas, geographic
expansion or acquisition of complementary businesses, products or
technologies. Finally, the Company's customer demographic and
substantial site traffic create a meaningful opportunity for
advertising sales.

THE MRCDROM.COM ONLINE CATALOGUE

Customers open the mrcdrom.com catalogue through the Company's Web
site and, in addition to ordering software, can conduct targeted
searches, browse from among highlighted selections and participate in
promotions and check order status.

{PICTURES OF THE COMPANY'S WELCOME, SEARCH, REVIEW AND
ORDERING WEB PAGES}

Browsing. The mrcdrom.com site offers visitors a variety of
highlighted subject areas and special features. As a customer
proceeds though the catalogue, he or she encounters featured
software. Clicking with the mouse on any of these images pulls up
more information about the featured software, as well as a button
which, if clicked on, adds the software to the customer's order

Searching. A primary feature of mrcdrom.com is its interactive,
searchable catalogue. The Company provides a selection of search
tools to find software based on title, subject, keyword, or
publishers. The Company licenses some of its catalogue and other
information from third parties.

Online Community. By creating an online community, the Company hopes
to provide customers with an inviting and familiar experience that
will encourage them to return frequently to the site and to interact
with other users, and that will promote loyalty and repeat purchase.

Ordering. To purchase customers simply click on a button to add to
their virtual shopping baskets. Customers can add and subtract from
their shopping baskets as they browse, prior to making a final
purchase decision, just as in a physical store. To execute orders,
customers click on the buy button and are prompted to supply shipping
and payment details. This information is stored on the Company's
secure server and need not be provided again by repeat registered
customers. The personal password allows repeat customers to
automatically access their previously provided shipping and payment
information. The Company's system automatically confirms each order
by e-mail to the customer within minutes after the order is placed
and advises customers by e-mail shortly after orders are shipped.

Availability and Fulfillment. Some of the Company's titles are
available for immediate shipment, others are available for shipment
within 48 to 72 hours and the remainder of titles are generally
available within four to six weeks, although some titles may not be
available at all. Customers select from a variety of delivery
options, including overnight and various international shipping
options. The Company uses e-mail to notify customers of order status
under various conditions. The Company seeks to provide rapid and
reliable fulfillment of customer orders, and intends to continue to
improve its availability and fulfillment in the future.

MARKETING AND PROMOTION

mrcdrom.com's marketing strategy is designed to strengthen the
mrcdrom.com brand name, increase customer traffic to the mrcdrom.com
catalogue, build strong customer loyalty, maximize repeat purchases
and develop incremental revenue opportunities.

mrcdrom.com intends to build customer loyalty by creative and flexible
merchandising. The Internet allows rapid and effective
experimentation and analysis, and instant user feedback which the
Company intends to incorporate in its merchandising. The Company
seeks to increase the number of visitors that make a purchase, to
encourage repeat visits and purchases and to extend customer
retention. Loyal, satisfied customers also generate word-of-mouth
advertising and awareness, and are able to reach thousands of other
customers and potential customers because of the reach of online
communications.

The Company will place advertisements on various high-profile and
high-traffic Web sites. These advertisements usually will take the
form of banners that encourage readers to click through directly to
the mrcdrom.com web site.

The Company will extend its market presence through Associate Web
sites to offer software to their audiences for fulfillment by
mrcdrom.com. The Associate embeds a hyperlink to mrcdrom.com's site
and the customer is automatically connected to mrcdrom.com's site and
may place his or her order. The Associate is able to offer enhanced
services, avoiding the expenses associated with ordering and
fulfillment, and receives a commission for certain orders.

CUSTOMER SERVICE

The Company believes that its ability to establish and maintain
long-term relationships with its customers and encourage repeat
visits and purchases depends, in part, on the strength of its
customer support and service operations and staff. mrcdrom.com offers
e- mail addresses to enable customers to request information and to
encourage feedback and suggestions. The Company's customer support
and service personnel are responsible for handling general customer
inquiries, answering customer questions about the ordering process,
and investigating the status of orders, shipments and payments.
mrcdrom.com also offers a toll-free line for customers who are
reluctant to enter their credit card or checking account numbers
through the Web site. The Company has automated certain of the tools
used by its customer support and service staff and intends to actively
pursue enhancements to and further automation of its customer support
and service systems and operations.

WAREHOUSING AND FULFILLMENT

The Company sources product from a network of distributors and
publishers. The Company carries minimal inventory and relies to a
large extent on rapid fulfillment from major distributors and
wholesalers which carry a broad selection of titles. The Company
utilizes automated interfaces for sorting and organizing its orders to
enable it to achieve the most rapid and economic purchase and
delivery terms possible. The Company's proprietary software selects
the orders that can be filled quickly via electronic interfaces with
vendors, and forwards remaining orders to its special order group.

TECHNOLOGY

The Company uses a set of applications for accepting and validating
customer orders, organizing, placing and managing orders with
suppliers, receiving product and assigning it to customer orders, and
managing shipment to customers based on various ordering criteria.
The Company's transaction-processing systems manage the process of
accepting, authorizing and charging customer credit cards or checking
accounts. In addition, the Company's systems allow it to maintain
ongoing automated e-mail communications with customers at a
negligible incremental cost. These systems automate many routine
communications entirely, facilitate management or customer e-mail
inquiries and allow customers to check order status, change their
e-mail address or password.

Systems administrators and managers monitor and operate the Company's
Web site, network operations and transaction-processing systems. The
continued uninterrupted operation of the Company's Web site and
transaction-processing systems is essential to its business, and it
is the job of the operations staff to ensure, to the greatest extent
possible, the reliability of the Company's Web site and
transaction-processing systems. The Company uses the services of
Camelot Internet Access Services, Inc. to obtain connectivity to the
Internet over dedicated T1 lines.

The Company's transaction-processing system is not integrated with the
remainder of the Company's accounting and financial systems. As a
result, the Company's current management information system, which
produces request operational reports, is inefficient with respect to
traditional accounting-oriented reporting and requires a significant
amount of manual effort to prepare information for financial and
accounting reporting. See "Risk Factors - Risk Capacity Constraints;
System Development Risks," "-Risk of System Failure; Single Site and
Order Interface" and "-Online Commerce Security Risks."

INTELLECTUAL PROPERTY

The Company regards its copyrights, service marks, trademarks, trade
dress, trade secrets and similar intellectual property as critical to
its success, and customers, partners and others to protect its
proprietary rights. The Company pursues the registration of its
trademarks and service marks in the U.S. and internationally, and has
obtained registered trademarks. Effective trademark, service mark,
copyright and trade secret protection may not be available in every
county in which they Company's products and services are made
available online. The Company expects that it may license in the
future, certain of its proprietary rights, such as trademarks or
copyrighted material, to third parties. While the company attempts
to ensure that the quality of its brand is maintained by such
licensees, there can be no assurance that such licensees will not
take actions that might materially adversely affect the value of the
Company's proprietary rights or reputation, which could have a
material adverse effect on the Company's business, prospects,
financial condition and results of operations. There can be no
assurance that the steps taken by the Company to protect its
proprietary rights will be adequate or that third parties will not
infringe or misappropriate the Company's copyrights, trademarks,
trade dress and similar proprietary rights. In addition, there can
be no assurance that other parties will not assert infringement
claims against the Company. The Company expects to be subject to
legal proceedings and claims from time to time in the ordinary course
of its business, including claims of alleged infringement of the
trademarks and other intellectual property rights of third parties by
the Company and its licensees. Such claims, even if not meritorious,
could result in the expenditure of significant financial and
managerial resources.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All statements, trend analysis and other information contained in this
Prospectus relative to markets for the Company's products and trends
in net sales, gross margin and anticipated expense levels, as well as
other statements including words such as "anticipated expense levels,
as well as other statements and "intend" and other similar
expressions, constitute forward-looking statements. These
forward-looking statements are subject to business and economic
risks, and the Company's actual results of operations may differ
materially from those contained in the forward-looking statements.
For a more detailed discussion of these and other business risks, see
"Risk Factors."

OVERVIEW

mrcdrom.com was formed on March 27, 1997 to offer over 2,000 title of
computer software to the public by means of a site on the World Wide
Web ("Web"). mrcdrom.com intends to offer its customers the widest
selection of one stop computer software shopping through a secure
site. Shoppers will be able to receive information and purchase the
latest computer software titles in addition to most of the hard to
find titles. mrcdrom.com will have unlimited shelf space without the
accompanying expense of a store front, and related personnel.
Purchasing software from mrcdrom.com is more convenient because
on-line shopping can occur 24 hours a day with no reason for shoppers
to leave the comfort of their own home.

The Company has no operating history on which to base an evaluation of
its business and prospects. The Company's prospectus must be
considered in light of the risks, expenses and difficulties
frequently encountered by companies in their early stage of
development, particularly companies in new and rapidly evolving
markets such as online commerce. Such risks for the Company include,
but are not limited to, an evolving and unpredictable business model
and management of growth. To address these risks, the Company must,
among other things, maintain and increase its customer base, implement
and successfully execute its business and marketing strategy,
continue to develop and upgrade its technology and
transaction-processing systems, improve its Web site, provide superior
customer service and order fulfillment, respond to competitive
developments, and attract, retain and motivate qualified personnel.
There can be no assurance that the Company will be successful in
addressing such risks, and the failure to do so could have a material
adverse effect on the Company's business, prospects, financial
condition and results of operations.

RESULTS OF OPERATIONS

There have been no operations to date and therefore there can be no
discussion on the Results of Operations.

As a result of the Company's limited operating history and the
emerging nature of the markets in which it competes, the Company is
unable to accurately forecast its revenues. The Company's current
and future expense levels are based largely on its investment plans
and estimates of future revenues and are to large extent fixed. Sales
and operating results generally depend on the volume of, timing of
and ability to fulfill orders received, which are difficult to
forecast. The Company may be unable to adjust spending in a timely
manner to compensate for any unexpected revenue shortfall.
Accordingly, any significant shortfall in revenues in relation to the
Company's planned expenditures would have an immediate adverse effect
on the Company's business, prospects, financial condition and results
of operations. Further, as a strategic response to changes in the
competitive environment, the Company may from time to time make
certain pricing, service or marketing decisions that could have a
material adverse effect on its business, prospects, financial
condition and results of operations. See "Business - Competition."

The Company expects to experience significant fluctuations in its
future quarterly operating results due to a variety of factors, many
of which are outside the Company's control. Factors that may
adversely affect the Company's quarterly operating results include
(i) the Company's ability to retain existing customers, attract new
customers at a steady rate and maintain customer satisfaction, (ii)
the Company's ability to manage inventory and fulfillment operations
and maintain gross margins , (iii) the announcement or introduction
of new sites, services and products by the Company and its
competitors, (iv) price competition or higher wholesale prices in the
industry (v) the level of use of the Internet and online services and
increasing consumer acceptance of the Internet and other online
services for the purchase of consumer products such as offered by the
Company, (vi) the Company's ability to upgrade and develop systems
and infrastructure and attract new personnel in a timely and
effective manner, (vii) the level of traffic on the Company's Web
site, (viii) technical difficulties, system downtime or Internet
brownouts, (ix) the amount and timing of operating costs and capital
expenditures relating to expansion of the Company's business,
operations and infrastructure, (x) the number of software titles
introduced during the period, (xi) the level of merchandise returns
experienced by the Company, (xii) governmental regulation, and (xiii)
general economic conditions and economic conditions specific to the
Internet, online commerce and the software industry.

The Company expects that it will experience seasonality in its
business, reflecting a combination of seasonal fluctuations in
Internet usage and traditional retail seasonality patterns. Internet
usage and the rate of Internet growth may be expected to decline
during the summer. Further, sales in the traditional retail industry
are significantly higher in the fourth calendar quarter of each year
than in the preceding three quarters.

Due to the foregoing factors, in one or more future quarters the
Company's operating results may fall below the expectations of
securities analysts and investors. In such event, the trading price
of the Common Stock would likely be materially adversely affected.
See "Risk Factors-Potential Fluctuations in Quarterly Results;
Seasonality ".

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has financed its startup costs through
private sales of Common Stock which, through March 31, 1997, totaled
$756,000.

The Company believes the net proceeds from this offering, together
with its current cash and cash equivalents, will be sufficient to
meeting its anticipated cash needs for working capital and capital
expenditures for the next 12 months. If cash generated from
operations is insufficient to satisfy the Company's liquidity
requirements, the Company may seek to sell additional equity or debt
securities or to obtain a credit facility. The sale of additional
equity or convertible debt securities could result in additional
dilution to the Company's stockholders. There can be no assurance
that financing will be available in amounts or on terms acceptable to
the Company, if at all. See "Use of Proceeds".

COMPETITION

The online commerce market, particularly over the Internet, is new,
rapidly evolving and intensely competitive, which competition the
Company expects to intensify in the future. Barriers to entry are
minimal, and current and new competitors can launch new sites at a
relatively low cost. In addition, the retail software industry is
intensely competitive. The Company currently or potentially competes
with a variety of other companies. These competitors include (i)
various online sellers and vendors of other information-based
products, (ii) a number of indirect competitors that specialize in
online commerce or derive a substantial portion of their revenues
from online commerce, including AOL and Microsoft Corporation,
through which other stores may offer products, and (iii) retail
vendors with significant brand awareness, sales volume and customer.

The Company believes that the principal competitive factors in its
market are brand recognition, selection, personalized services,
convenience, price, accessibility, customer service, quality of
search tools, quality of editorial and other site content and
reliability and speed of fulfillment. Many of the Company's current
and potential competitors have longer operating histories, larger
customer bases, greater brand recognition and significantly greater
financial, marketing and other resources than the Company, In
addition, online retailers may be acquired by, receive investments
from or enter into other commercial relationships with large,
well-established and well-financed companies as use of the Internet
and other online services increases. Certain of the Company's
competitors may be able to secure merchandise from vendors on more
favorable terms, devote greater resources to marketing and
promotional campaigns, adopt more aggressive pricing or inventory
availability policies and devote substantially more resources to Web
site and systems development than the Company. Increased competition
may result in reduced operating margins, loss of market share and a
diminished brand franchise. There can be no assurance that the
Company will be able to compete successfully against current and
future competitors, and competitive pressures faced by the Company may
have a material adverse effect on the Company's business, prospects,
financial condition and results of operations. Further, as a
strategic response to changes in the competitive environment, the
Company may from time to time make certain pricing, service or
marketing decisions or acquisitions that could have a material
adverse effect on its business, prospects, financial condition and
results of operations. New technologies and the expansion of
existing technologies may increase the competitive pressures on the
Company. In addition, companies that control access to transactions
through network access or Web browsers could promote the Company's
competitors or charge the Company a substantial fee for inclusion.
See "Risk Factors - Competition."

LEGAL PROCEEDINGS

The Company is not currently aware of any material legal proceedings
pending against it.

EMPLOYEES

As of April 2, 1997, the Company employed 6 full-time employees. None
of the Company's employees is represented by a labor union, and the
Company considers its employee relations to be good. Competition for
qualified personnel in the Company's industry is intense,
particularly among software development and other technical staff.
The Company believes that its future success will depend in part on
its continued ability to attract, hire and retain qualified
personnel. See "Risk Factors - Management of Potential Growth; New
Management Team; Limited Senior Management Resources" and "Dependence
on Key Personnel; Need for Additional Personnel."

FACILITIES

The leased facilities total approximately 3,000 square feet and are
located in Carrollton, Texas pursuant to a month to month lease.
The Company leases the premises from Camelot Corporation the majority
shareholder of the Company and the Company believe that the lease was
made on terms no less favorable to the Company than could have been
obtained from unaffiliated third parties. The Company anticipates
that it will require additional administrative, customer service,
warehouse and fulfillment space within the next three (3) years, but
that suitable additional space will be available on commercially
reasonable terms, although there can be no assurance in this regard.
The Company does not own any real estate.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive
officers and directors of the Company as of March 28, 1997:
<TABLE>
<S> <C> <C>
Name Age Position
Daniel Wettreich 45 Chairman, Director and CEO<F1>
Thomas Watts 47 President and Director
Jason Conway 28 Director <F2>
Colin Grant 35 Director <F1><F2>
Jeanette Fitzgerald 35 Director <F2>
Margaret Cooper 49 Vice President of Operations
Scott Stoddard 34 Vice President of Product
Development
Robert Gregory 45 Chief Financial Officer

</TABLE>
[FN](1) Member of the Audit Committee.

(2) Member of the Compensation committee
[/FN]

Daniel Wettreich

Daniel Wettreich is Chairman and Chief Executive Officer and Director
of the Company since March 28, 1997. He is also a Director and
Chief Executive Officer of Camelot Corporation since September
1988.(1) Since 1981, he has been the President and Director of
Wettreich Financial Consultants, Inc., a financial consulting company.
Since August 1996, he has been Director and Chief Executive of Meteor
Technology plc, a United Kingdom public company. Additionally, he
currently holds directors positions in the following public
companies: Forme Capital, Inc., a real estate company and Alexander
Mark Investments (USA), Inc., Malex, Inc., Adina, Inc., and Tussik,
Inc. which are dormant companies seeking merger opportunities. In
July 1993, he was appointed Director of Goldstar Video
Corporation(2) following an investment by Camelot. Mr. Wettreich has
a Bachelor of Arts in Business Administration from the University of
Westminster, London, England.

Thomas D. Watts

Thomas Watts is President and Director of the Company since March 28,
1997. Previously, he was Vice President of Operations for Camelot
Corporation since June of 1996. He was co-President and previously
Vice President of Third Planet Publishing, Inc. a subsidiary of
Camelot Corporation. He was Senior Vice President of Operations for
FoxMeyer Health Corporation since 1994, a health care pharmacy
provider. From 1992 he was Vice President of The Harvard Chase
Group, a technology venture capital company, and prior to that from
1989 he was Vice President of Operations for Hathaway Corporation, a
computer software research and development company. From 1980 to
1989 he was the executive in charge of Data Information Services,
Inc., firstly as President until 1985 when it was acquired by MTech
Corporation, then as Vice President until MTech was acquired in 1988
by Electronic Data Systems (EDS), and then as Division Manager when
the company was owned by EDS. He has a BS in Economics and a BS in
Management from the University of Mobile.

Jeanette P. Fitzgerald

Jeanette Fitzgerald is a Director of the Company since March 28, 1997.
Since September 1988, she has been a Director, Vice President and
General Counsel of Camelot Corporation.(1) She is a member of the
State Bar of Texas and the Business Law section. Since August 1996,
she has been a Director of Meteor Technology, plc., a United Kingdom
public company. She is also the Corporate Secretary and Director of
Wettreich Financial Consultants, Inc., and of Malex, Inc., Adina,
Inc., and Tussik, Inc., which are public companies. In July 1993,
she was appointed Director of Goldstar Video Corporation(2) following
an investment by Camelot. Previous to these positions, from 1987 to
1988 she worked as a staff attorney and in the compliance department
at H.D. Vest, Inc., a holding company with subsidiaries including a
securities brokerage firm. She graduated from Texas Tech University
School of Law receiving both a Doctorate of Jurisprudence and a
Masters of Business Administration in May 1986, and from the
University of Michigan with a Bachelors of Business Administration in
December 1982.

Jason Conway

Jason Conway is a Director of the Company since March 28, 1997. Since
1996, he has been Executive Director of Meteor Technology plc, a UK
public company. Previously, he was employed by National Car Parks
for seven years culminating in his appointment as Director for the
Southeast Region. Mr. Conway was the youngest Regional Director in
the history of National Car Parks. He has B. Sc in Estate Management
from South Bank University.

Colin Grant

Colin Grant is a Director of the Company since March 28, 1997. Since
1996, he has been Managing Director of Alexander Mark Capital ltd. a
UK financial services company. He was previously Finance Director of
Meteor Technology plc and is a Director of that company. From 1983 -
1995 he was Managing Director and previously Finance Director of
Network Designers Limited, a company involved in developing and
marketing communications software and hardware products. Previously,
between 1989 and 1993 he was financial controller of Softwright
Systems Ltd. He graduated with a B. Sc. from the University of St.
Andrews in 1984.

Margaret Cooper

Margaret Cooper is Vice President of Operations of the Company since
March 28, 1997. Previously she was President of Software @Cost +
10%, Inc. a retailer of computer software and prior to that she was
President of Camelot Distributing, Inc. a distributor of computer
software; both subsidiaries of Camelot Corporation. From 1991 to 1992
she was a Marketing Executive with Quest Entertainment a video
distributor.

Scott Stoddard

Scott Stoddard is Vice President of Product Development for the
Company since March 28, 1997. Previously he was General Manager of
Camelot Creative Designs, Inc., a web page design company and a
subsidiary of Camelot Corporation. He was a production manager or a
computer artist/editor for a series of magazines, catalogues and
newsletters from 1989 to 1994, prior to which he was Production
Director of Movieline Magazine.

Robert B. Gregory

Robert Gregory is a part time Chief Financial Officer of the Company
since March 28, 1997. He is also the Vice President of Finance for
Camelot Corporation since July 1996. He was previously Director of
Finance of Jenkens & Gilchrist, one of Texas's largest law firms,
prior to which he was controller of Memorex Telex Corporation, a
manufacturer of computer equipment. Previously, from 1985 he was
controller of the communications division of Electronic Data Systems,
an international provider of information technology. In addition to
being a Certified Public Accountant, he has an MBA from Creighton
University and a BS in Accounting from the University of Nebraska.

(1) A subsidiary, Camelot Entertainment, Inc. filed Chapter 7
liquidation in January 1995.
(2) Goldstar Video filed for Chapter 11 in October 1993, the case was
converted to Chapter 7 and has since closed.

COMMITTEES OF THE BOARD OF DIRECTORS

The Audit Committee consists of Daniel Wettreich, and Colin Grant.
Among other functions, the Audit Committee makes recommendation to
the Board of Directors regarding the selection of independent
auditors, reviews the results and scope of the audit and other
services provided by the Company's independent auditors, reviews the
Company's balance sheet, statement of operations and cash flows and
reviews and evaluates the Company's internal control functions.

The Compensation Committee consists of Jason Conway, Colin Grant, and
Jeanette Fitzgerald. The Compensation Committee reviews and approves
the compensation and benefits for the Company's executive officers,
administer the Company's stock option plans and make representation
to the Board of Directors regarding such matters.

DIRECTOR COMPENSATION

Directors of the Company do not receive cash compensation for their
services as directors or member of committees of the Board of
Directors, but are reimbursed for their reasonable expenses incurred
in attending meetings of the Board of Directors.

Directors, who are not otherwise employee of the Company, are eligible
to receive Stock Options pursuant to the 1997 Director Stock Option
Plan.

1997 Directors' Stock Option Plan. The 1997 Director's Stock Option
Plan (the "Directors' Plan") was adopted by the Board of Directors in
March, 1997. The Director's Plan was approved by shareholders of the
Company on March 28, 1997. A total of 250,000 shares of Common Stock
has been reserved for issuance under the Directors' Plan. The
Director's Plan provides for the grant of stock options to nonemployee
directors of the Company. The Directors' Plan is designed to work
automatically without administration; however, to the extent
administration is necessary , it will be performed by the Board of
Directors. The Directors' Plan provides that each person who is a
nonemployee director of the Company upon joining the Board of
Directors, shall be granted a stock option to purchase 5,000 shares
of Common Stock (the "First Option"). Thereafter, on January 1, of
each year, commencing January 1, 1998 each nonemployee director shall
be automatically granted an additional option to purchase 1,000 shares
of Common Stock (a "Subsequent Option") if, on such date, he or she
shall have served on the Company's Board of Directors for at least
six months. The Options are immediately exercisable. The exercise
price of all stock options granted under the Directors' Plan shall be
equal to the fair market value of a share of the Company's Common
Stock on the date of grant of the option. Options granted under the
Directors' Plan have a term of ten years. In the event of the
dissolution or liquidation of the Company, a sale of all or
substantially all of the assets of the Company, the merger of the
Company with or into another corporation in which the Company is not
the surviving corporation or any other capital reorganization in
which more than 50% of the shares of the Company entitled to vote are
exchanged, each nonemployee director shall have either (i) a
reasonable time within which to exercise the option, including any
part of the option that would not otherwise be exercisable, prior to
the effectiveness of such dissolution, liquidation, sale, merger or
reorganization, at the end of which time the option shall terminate or
(ii) the right to exercise the option, including any part of the
option that would not otherwise be exercisable, or receive a
substitute option with comparable terms, as to an equivalent number
of shares of stock of the corporation succeeding the Company or
acquiring its business by reason of such dissolution, liquidation,
sale, merger or reorganization. The Board of Directors may amend or
terminate the Directors' Plan; provided, however, that no such action
may adversely affect any outstanding option, and the provisions
regarding the grant of options under the plan may be amended only
once in any six-month period, other than to comport with changes in
the Employee Retirement Income Security Act of 1974, as amended or
the Code. If not terminated earlier, the Directors'' Plan will have a
term of ten years.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Certificate of Incorporation limits the liability of
directors to the full extent permitted by Delaware law. Delaware law
provides that a corporation's certificate of incorporation may
contain a provision eliminating or limiting the personal liability of
directors for monetary damages for breach of their fiduciary duties as
directors, except for liability (i) for any breach of their duty of
loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) for unlawful payments of dividends
or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law (the "DGCL"), or (iv) for
any transaction from which the director derived an improper personal
benefit. The Company's Bylaws provide that the Company shall
indemnify its directors and officers and may indemnify its employees
and agents to the fullest extent permitted by law. The Company
believes that indemnification under its Bylaws covers at least
negligence and gross negligence on the part of indemnified parties.

The Company has entered into agreements to indemnify its directors and
executive officers. These agreements, among other things, indemnify
the Company's directors and officers for certain expenses (including
attorneys' fees), judgments, fines and settlement amounts incurred by
such persons in any action or proceeding, including any action by or
in the right of the Company, arising out of such person's services as
a director or officer of the Company, any subsidiary of the Company
or any other company or enterprise to which the person provides
services at the requires of the Company. The Company believes that
these provisions and agreements are necessary to attract and retain
qualified directors and officers.

At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of the Company where
indemnification will be required or permitted. The Company is not
aware of any threatened litigation or proceeding that might result in
a claim for such indemnification.

EXECUTIVE COMPENSATION

No executive officer of the Company who held office at April 1, 1997
met the definition of "highly compensated" within the meaning of the
Commission's executive compensation disclosure rules. No
compensation has been paid to any officers or directors of the
Company. Officers have been granted options pursuant to the 1997
Stock Option Plan as set out in "Principal Stockholders".

1997 Stock Option Plan. The purpose of the 1997 Stock Option Plan is
to enhance the long-term stockholder value of the Company be offering
opportunities to employees, directors, officers, consultants, agents,
advisors and independent contractors of the Company to participate in
the Company's growth and success, and to encourage them to remain in
the service of the Company and acquire and maintain stock ownership in
the Company.

The 1997 Stock Option Plan is administered by the Compensation
Committee, which has the authority to select individuals who are to
receive options under the 1997 Stock Option Plan and to specify the
terms and conditions of each option so granted (incentive or
nonqualified), the vesting provisions, the option term and the
exercise price. Unless otherwise provided by the Plan Administrator,
an option granted under the 1997 Stock Option Plan expires 10 years
from the date of grant (five years in the case of an incentive stock
option granted to the holder of 10% or more of the Company's
outstanding capital stock) or, if earlier, three months after the
optionee's termination of employment or service other than
termination for cause, one year after the optionee's retirement, early
retirement at the Company's request, death or disability, or
immediately upon notification to an optionee of termination for
cause. Options granted under the 1997 Stock Option Plan are not
generally transferable by the optionee except by will or the laws of
descent and distribution and generally are exercisable during the
lifetime of the optionee only by such optionee.

Repurchase Right Under Option Plans. With respect to the 1997 Stock
Option Plan and the 1997 Directors Stock Option Plan (collectively,
the "Plans"), the Compensation Committee has the discretion to
authorize the issuance of unvested shares of Common Stock pursuant to
the exercise of a stock option under the applicable Plan. If the
optionee ceases to be employed by or provide services to the Company,
all shares of Common Stock issued on exercise of stock option which
are unvested at the time of cessation shall be subject to repurchase
by the Company at the exercise price paid for such shares. The terms
and conditions upon which the repurchase rights are exercisable by the
Company are determined by the Compensation Committee and set forth in
the agreement evidencing such right. The Compensation Committee has
discretionary authority to cancel the Company's outstanding
repurchase rights with respect to one or more shares purchased or
purchasable under an option granted pursuant to that Plan. In the
event of a Terminating Event or a Corporate Transaction under the
1997 Stock Option Plan, respectively, if vesting of the options
accelerates, the repurchase rights of the Company with respect to
shares previously acquired on exercise of options granted under the
1997 Stock Option Plan, respectively, shall terminate.

CERTAIN TRANSACTIONS

Since the inception of the Company in March 27, 1997, the Company has
issued 6,000,000 Shares of Common Stock to Camelot Corporation in
exchange for $756,000 of inventory , proprietary software, cash and
other assets.

On April 1, 1997, the Company entered into a month to month lease
agreement with Camelot Corporation, the majority shareholder of the
Company, for the office and warehouse premises and for bookkeeping
services at a total rate of $4,000 per month. The lease covers
3,000 square feet and it is anticipated that this space will be
sufficient for the next twelve (12) months.

The Company believes that all the transactions set forth above were
made on terms no less favorable to the Company than could have been
obtained from unaffiliated third parties. Any future transactions,
including loans, between the Company and its officers, directors and
principal stockholders and their affiliates will be approved by a
majority of the Board of Directors, including a majority of the
independent and disinterested directors, and will be on terms no less
favorable to the Company than could be obtained from unaffiliated
third parties.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the
beneficial ownership of the company's outstanding Common Stock as of
April 2, 1997 and as adjusted to reflect the sale of the Common Stock
offered hereby for (i) each person or entity know by the company to
beneficially own more than 5% of the Common Stock, (ii) each director
of the Company, and (iv) all of the Company's directors and executive
officers as a group. Except as otherwise indicated, the Company
believes that the beneficial owners of the Common Stock listed below,
based on information furnished by such owners, have sole voting and
investments power with respect to such shares.
<TABLE>
<S> <C> <C> <C>
PERCENTAGE OF
SHARES OUTSTANDING
NAME AND NUMBER OF SHARES PRIOR TO AFTER
ADDRESS BENEFICIALLY OWNED OFFERING OFFERING <F1>
Camelot Corporation
17770 Preston Road
Dallas, Texas 75252 6,000,000 100% 60%

Daniel Wettreich 6,375,000 <F2><F3> 100 62
17770 Preston Road
Dallas, Texas 75252

Thomas Watts
2415 Midway Suite 115
Carrollton, Texas 75006 10,660<F4> * *

Jason Conway
54 Baker Street
London, England 5,000<F5> * *

Colin Grant
54 Baker Street
London,England 5,000<F6> * *

Jeanette Fitzgerald
17770 Preston Road
Dallas, Texas 75252 6,005,000<F2><F7> 100 60

All officers and directors
as a group (8 persons) 6,408,860<F2><F3><F4> 100 62
<F5><F6><F7>
<F8>
<FN>* less than 1%
(1) Assumes all shares offered are sold.
(2) Includes 6,000,000 Common Shares owned by Camelot Corporation of
which Mr. Wettreich and Ms. Fitzgerald are directors. Both have
disclaimed any ownership interest in these shares.
(3) Includes 375,000 options granted to Mr. Wettreich pursuant to the
1997 Stock Option Plan.
(4) Includes 10,660 options granted to Mr. Watts pursuant to the 1997
Stock Option Plan.
(5) Includes 5,000 options granted to Mr. Conway pursuant to the 1997
Directors Stock Option Plan.
(6) Includes 5,000 options granted to Mr. Grant pursuant to the 1997
Directors Stock Option Plan.
(7) Includes 5,000 options granted to Ms. Fitzgerald pursuant to the
1997 Directors Stock Option Plan.
(8) Includes 8,200 options granted to additional officers of the
Company pursuant to the 1997 Stock Option Plan.
</FN>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 25,000,000
shares of Common Stock, $0.001 par value per share, and 5,000,000
shares of Preferred Stock, $0.01 par value per share. The following
summary of certain provisions of the Common Stock and Preferred Stock
does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Certificate of
Incorporation, which is included as an exhibit to the Registration
Statement of which this Prospectus is a part, and by the provisions
of applicable law.

COMMON STOCK

As of April 1, 1997, there was 6,000,000 shares of Common Stock
outstanding held of record by one (1) stockholder. There will be
7,500,000 shares of Common Stock outstanding after giving effect to
the sale of all the Common Stock offered to the public hereby. The
holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of stockholders. See
"Risk Factors - Control of the Company." Subject to preferences that
may be applicable to any outstanding shares of Preferred Stock, the
holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared by the Board of Directors out of
funds legally available for the payment of dividends. See "Dividend
Policy." In the event of a liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities and
liquidation preferences of any outstanding shares of Preferred Stock.
Holders of Common Stock have no preemptive rights or rights to
convert their Common Stock into any other securities. There are no
redemption or sinking fund provisions applicable to the Common Stock.
All outstanding shares of Common Stock are fully paid and
nonassessable, and the shares of Common Stock to be issued upon
completion of this offering will be fully paid and nonassessable.

PREFERRED STOCK

Pursuant to the Company's Certificate of Incorporation, the Board of
Directors will have the authority, without further action by the
stockholder, to issue up to 5,000,000 shares of Preferred Stock in
one or more series and to fix the designations, powers preferences,
privileges and relative participating, option or special rights and
the qualifications, limitation or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, any or all of which may be
greater than the rights of the Common Stock. The Board of Directors,
without stockholder approval, can issue Preferred Stock with voting,
conversion or other rights that could adversely affect the voting
power and other rights of the holders of Common Stock. Preferred
Stock could thus be issued quickly with terms calculated to delay or
prevent a change in control of the Company or make removal of
management more difficult. Additionally, the issuance of Preferred
Stock may have the effect of decreasing the market price of Common
stock, and may adversely affect the voting and other rights of the
holders of Common Stock. The Company has no plans to issue any
Preferred Stock.

ANTITAKEOVER EFFECTS OF CERTAIN PROVISIONS OF CERTIFICATE OF
INCORPORATION AND DELAWARE LAW

As noted above, the Company's Board of Directors, without stockholder
approval, have the authority under the Company's Certificate of
Incorporation to issue Preferred Stock with rights superior to the
rights of the holders of Common Stock. As a result, Preferred Stock
could be issued quickly and easily, could adversely affect the rights
of holders of Common Stock and could be issued with terms calculated
to delay or prevent a change in control of the Company or make
removal of management more difficult.

Section 203 of the DGCL generally prohibits Delaware corporations from
engaging in certain "Business Combinations" (as defined therein) with
certain "Interested Stockholders" (as defined therein) for a period
of three years unless certain criteria are met.

TRANSFER AGENT , REGISTRAR and ESCROW AGENT

The transfer agent and registrar for the Common Stock is Stock
Transfer Company of America, Inc., P.O. Box 796277, Dallas, Texas
75379-6277.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the Common
Stock and there can be no assurance that a significant public market
for the Common Stock will be developed or be sustained after this
offering. Sales of substantial amounts of Common Stock in the public
market after this offering, or the possibility of such sales
occurring, could adversely affect prevailing market prices for the
Common Stock or the future ability of the Company to raise capital
through an offering of equity securities.

After this offering, the Company will have outstanding 7,500,000
shares of Common Stock. Of these shares, the 3,000,000 shares offered
hereby will be freely tradable in the public market without
restriction under the Securities Act, unless such shares are held by
"affiliates" of the Company, as that term is defined in Rule 144 under
the Securities Act.

The remaining 4,500,000 shares of Common Stock outstanding upon
completion of this offering will be "restricted securities," as that
term is defined in Rule 144 ("Restricted Shares"). The Restricted
Shares were issued and sold by the Company in private transactions in
reliance upon exemptions from registration under the Securities Act.
Restricted Shares may be sold in the public market only if they are
registered or if they qualify for an exemption from registration
under Rule 144 or 701 under the Securities Act, which are summarized
below.

Rule 701 permits resales of such shares in reliance upon Rule 144 but
without compliance with certain restrictions, including the holding
period requirement, imposed under Rule 144. In general, under Rule
144 as in effect at the closing of this offering, beginning 90 days
after the date of this Prospectus, a person (or persons whose shares
of the Company are aggregated) who has beneficially owned Restricted
Shares for at least one year (including the holding period of any
prior owner who is not an affiliate of the Company) would be entitled
to sell within any three-month period a number of shares that does not
exceed the greater of (i) one percent of the then outstanding shares
of Common Stock (approximately 75,000 shares immediately after this
offering) or (ii) the average weekly trading volume of the Common
Stock during the four calendar weeks preceding the filing of a Form
144 with respect such sale. Sales under Rule 144 are also subject to
certain manner of sale and notice requirements and to the
availability of current public information about the Company,. Under
Rule 144 (k), a person who is not deemed to have been an affiliate of
the Company at any time during the 90 days preceding a sale and who
has beneficially owned the shares proposed to be sold for at least
two years (including the holding period of any prior owner who is not
an affiliate of the Company) is entitled to sell such shares without
complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.

The Company intends to file after the effective date of this offering
a Registration Statement on Form S-8 to register an aggregate of
approximately 500,000 shares of Common stock reserved for issuance
under the 1997 Stock Option Plan and the 1997 Directors Stock Option
Plan. Such Registration Statement will become effective
automatically upon filing. Shares issued under the foregoing plans,
after the filing of a Registration Statement on Form S-8, may be sold
in the open market, subject, in the case of certain holders, to the
Rule 144 limitations applicable to affiliates, and vesting
restrictions imposed, if any, by the Company.

PLAN OF DISTRIBUTION

The Company is offering up to 1,500,000 shares and the selling
shareholder is offering 1,500,000 shares in the Company, all at $4,00
per share. The shares will be offered on a "best efforts, all or
none" basis with respect to the first 250,000 shares, and on a "best
efforts" basis as to the remaining 2,937,500 shares. After the
Company sells the minimum of 62,500 Shares, any Shares sold will be
split one-half (1/2) from the Company and one- half(1/2) from the
selling shareholder. The minimum number of Shares offered hereby
must be sold, if any are to be sold, within a period of 90 days (or a
period of 180 days if extended by the Company from the date of this
Prospectus. The Company may allocate among or reject any
subscriptions, in whole or in part.

The Shares will be offered and sold by the Company's officers and
directors, without compensation. Neither the Company nor any of its
officers or directors is registered as a broker or dealer under
Section 15 of the Exchange Act.

The Company has not retained an underwriter or any Independent
broker-dealer to assist in offering the Shares. It is the intention
of the Company to offer and sell the Shares by contacting prospective
investors through appropriate newspaper and magazine advertisements
as well as through the use of the Internet to electronically deliver
copies of this Prospectus to prospective investors.

Those subscribing to purchase Shares must complete a Stock Purchase
Agreement, a form of which is included as an appendix to this
Prospectus. Residents of Arkansas, California, Idaho, Iowa,
Massachusetts, Missouri, Nebraska, North Dakota, Oregon, South Dakota,
Tennessee and Texas must also complete a Suitability Questionnaire, a
form of which is also attached as an appendix to this Prospectus. All
funds received by the Company with respect to the minimum number of
Shares that may be sold will, promptly following receipt by the
Company, be deposited in an escrow account with the Escrow Agent
pursuant to the terms of an escrow agreement entered into between the
Company and the Escrow Agent ( the "Escrow Agreement"). In the event
that the minimum number of Shares offered hereby is not sold within
the permitted time period, then all funds received by the Company
will be promptly refunded to the subscribers, in full, without
interest or deduction therefrom.

The Company reserves the right to reject any subscription for Shares
in its entirety or to allocate Shares among prospective purchasers.
If any subscription is rejected, funds received by the Company for
each subscription will be returned to the applicable prospective
purchaser without interest or deduction.

Certificates representing Shares purchased will be issued to
purchasers only if the proceeds from the sale of at least 62,500
shares are released from escrow. Until the certificates are
delivered to the purchasers thereof, such purchasers, if any, will be
deemed subscribers only, and not shareholders. The funds in escrow
will be held for the benefit of those subscribers until released to
the Company. All funds received by the Company after the minimum
number of Shares offered hereby is sold will not be placed in escrow,
but placed directly into the Company's operating account for
immediate use by the Company.

Although it is the Company's intention to develop a public market for
its Common Stock by soliciting broker-dealers who are members of the
NASD to make a market in the Company's Common Stock, to date the
Company has not entered into any arrangements, commitments or
understandings with any persons with respect to the creation of a
public market for its Common Stock.

SELLING SHAREHOLDER

1,500,000 Common Shares being offered hereunder are offered by the
Selling Shareholder. The Selling Shareholder is Camelot Corporation
who obtained their shares as part of the creation of the Company.
The Selling Shareholder subscribed for 6,000,000 Shares with payment
by means of inventory, proprietary software, trademarks, cash and
other assets. Their shares are offered at the same price and have the
same rights as all other shares offered hereunder. All subscriptions
will be split fifty percent to the Company and fifty percent to the
Selling Shareholder, after the satisfaction of the minimum
requirements.

LEGAL MATTERS

Certain legal matters will be passed on for the Company by Jeanette
Fitzgerald, Esq.. Ms. Fitzgerald has been granted options to
purchase 5,000 Shares of the Company pursuant to the 1997 Directors
Stock Option Plan. See "Directors Compensation" and "Principal
Stockholders".

EXPERTS

The financial statements of mrcdrom.com, inc. at April 30, 1997
appearing in this Prospectus and the Registration Statement have been
audited by Lane Gorman and Trubit, LLP, independent auditors, as set
forth in their report thereon appearing elsewhere herein, and are
included in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement, of
which this Prospectus constitutes a part, under the Securities Act
with respect to the shares of Common Stock offered hereby. This
Prospectus omits certain information contained in the Registration
Statement, and reference is made to the Registration Statement and the
exhibits thereto for further information with respect to the Company
and the Common Stock offered hereby. Statements contained herein
concerning the provisions of any documents are not necessarily
complete, and in each instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference. The
Registration Statement, including exhibits filed therewith, may be
inspected without charge at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of
the Commission located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such materials may be
obtained from the Public Reference Section of the Commission, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants, that file
electronically with the Commission. <PAGE> mrcdrom.com, inc

PART I: FINANCIAL INFORMATION

ITEM 1. Financial Statements

BALANCE SHEETS

</TABLE>
<TABLE>
<S> <C>
ASSETS

March 31, 1997
(Unaudited)

CURRENT ASSETS
Cash and cash equivalents $ 100,000
Trading securities
Securities available for sale
Accounts receivable, net of allowance for
doubtful accounts of $0 at March 31, 1997
Prepaid expenses
Inventories, net of allowance for
obsolescence of $0 at March 31, 1997
600,000
Total current assets 700,000

PROPERTY, PLANT AND EQUIPMENT - AT COST

Office equipment and fixtures 30,000
Leasehold improvements
Less accumulated depreciation -
Total property, plant and equipment - at cost 30,000

OTHER ASSETS

Licenses and product development, net of
$0 accumulated amortization at
March 31, 1997 26,000
Other -
Total other assets 26,000

$ 756,000
</TABLE>
<PAGE>
mrcdrom.com, inc

BALANCE SHEETS (continued)
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY

<S> <C>
March 31, 1997
(Unaudited)
CURRENT LIABILITIES

Accounts payable $
Accrued expenses -
Total current liabilities -

STOCKHOLDERS' EQUITY

Common stock, $.001 par value, 25,000,000
shares authorized, 6,000,000
shares issued at March 31, 1997 6,000

Preferred stock, $.01 par value, 5,000,000
shares authorized, 0 shares
issued at March 31, 1997 -

Additional paid-in capital 750,000
Accumulated earnings -

Total stockholders' equity 756,000

$ 756,000

</TABLE>
<PAGE> mrcdrom.com, inc
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C>
March 27, 1997
(date of inception)
to March 31, 1997

SALES $ -

COST OF SALES -

GROSS PROFIT -

OPERATING EXPENSES:
General and administrative
Depreciation and amortization -

INCOME FROM OPERATIONS -

OTHER INCOME (EXPENSES):
Interest expense -
Interest income -
Dividend income -
Income on disposition of assets -
NET INCOME -

DIVIDENDS ON PREFERRED STOCK -

NET INCOME ATTRIBUTABLE TO
COMMON STOCKHOLDERS $ -

INCOME PER SHARE:
Income from continuing operations $ 0.000
Dividends on preferred stock 0.000

NET LOSS PER COMMON SHARE $ 0.000

WEIGHTED AVERAGE OF COMMON
STOCK OUTSTANDING 6,000,000

</TABLE>
<PAGE>
mrcdrom.com, inc
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S> <C>
March 27, 1997
(date of inception)
to March 31, 1997

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ -

Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation and amortization -
(Gain) loss on disposal of assets -
Write down (up) of securities to market value -
Provisions for inventory obsolescence -

Change in assets and liabilities
Accounts receivable -
Prepaid expenses and other -
Inventories -
Accounts payable and accrued expenses -
Net cash used by operating activities -

CASH FLOW FROM INVESTING ACTIVITIES:

Purchases of property and equipment -
Proceeds from sale of property and equipment -
Proceeds from sale of marketable securities -
Deposits -
Licenses and product development -
Net cash used by investing activities -

CASH FLOW FROM FINANCING ACTIVITIES:

Sale of common stock 100,000
Sale of preferred stock -
Dividends on preferred stock -
Payments on debt -
Net cash provided (used) by financing activities 100,000

NET INCREASE (DECREASE) IN CASH 100,000

CASH AT BEGINNING OF PERIOD -

CASH AT END OF PERIOD $ 100,000

SUPPLEMENTAL INFORMATION:
Cash paid for interest $ -
Cash paid for taxes $ -
</TABLE>
See accompanying notes to these consolidated financial statements.

<PAGE>
mrcdrom.com, inc

NOTES TO FINANCIAL STATEMENTS

(UNAUDITED)

ITEM 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Activity

The Company is engaged in the retailing of computer software products.
The Company sells software products through an Internet web page
catalog that lists over 2,000 software programs. Internet users will
be able to select and purchase the software programs that they select
from our catalog and have it shipped directly to their home or
office.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents. The
Company maintains cash balances at a local financial institution and
a brokerage firm in Dallas, TX. Cash equivalents were composed
primarily of investments in the money market account. The Company
believes it is not exposed to any significant credit risk on cash and
cash equivalents. The carrying value of cash and cash equivalents
approximates fair value because of the short maturities of the
investments.

Inventories

Inventories of computer software (CD-ROM) held for resale, are stated
at the lower of cost or market using the weighted average cost
method.

Trademark

Trademarks are stated at cost, net of accumulated amortization, which
is provided using the straight-line method over 5 years.

Property and Equipment

Property and equipment are carried at cost, less accumulated
depreciation. Major additions and betterment's are capitalized while
replacements and maintenance and repairs that do not improve or
extend the life of the respective assets are expensed. When property
is retired or otherwise disposed of, the related costs and accumulated
depreciation are removed from the accounts and any gain or loss is
reflected in operations.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Depreciation of property and equipment is provided on the
straight-line method over the estimated useful lives.

Revenue Recognition

Revenue from sales of software is generally recognized upon delivery
of the software provided that no significant vendor obligations
remain and collection of the resulting receivable is deemed probable.

Advertising Costs

Advertising costs, included in general and administrative expenses,
are charged to operations when the advertising first takes place.

Use of Estimates

In preparing financial statements in conformity with generally
accepted accounting principles, management is required to make
estimates and assumptions that effect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported amount of
revenues and expenses during the period. Actual results could differ
from those estimates.

2. ACCOUNTS RECEIVABLE AND CREDIT RISK

The Company's trade receivables include amounts due from credit card
vendors and customers. The Company believes that no single customer
exposes the Company to significant credit risk.

3. INVENTORIES

Included in the Company balance sheet is inventory of computer
software at a carrying value of $600,000, which represents
management's estimate of its net realizable value. The computer
software industry is characterized by rapid technological advancements
and change. Should demand prove less than anticipated, the ultimate
realizable value of such products could be less than the amount shown
in the balance sheet.

4. ACCRUED EXPENSES

The Company had no accrued expenses at March 31, 1997.

5. INCOME TAXES

The Company will file a consolidated Federal tax return with Camelot
Corporation. The Company has no current State or Federal income tax
expense payable.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

6. STOCKHOLDERS' EQUITY

Common Stock

The Company has 25,000,000 authorized shares of $.001 par value common
stock. The Company had 6,000,000 share outstanding at March 31, 1997
all owned by Camelot Corporation.

Preferred Stock

The Company has 5,000,000 authorized shares of $.01 par value
preferred stock with rights and preferences as designated by the
board of directors at the time of issuance. The Company had no
preferred stock issued and outstanding at March 31, 1997.

7. RELATED PARTY TRANSACTIONS

The Company receives administrative legal and accounting services
along with office and warehouse space from Camelot Corporation. The
Company pays a monthly management fee that compensates Camelot
Corporation for these expenses. Current monthly management fee is
$4,000.

8. COMMITMENTS AND CONTINGENCIES

Other than the monthly management fee, the Company has no lease or
rent commitments.

9. INDUSTRY SEGMENT

The Company is engaged in the Internet retailing of CD-ROM software.

<PAGE>
APPENDIX A
mrcdrom.com, inc.
_______________________________
___________________________________
STOCK PURCHASE AGREEMENT AND SIGNATURE PAGE
(All investors must sign this Stock Purchase Agreement)

No. of Shares Being Purchased: _________x $4.00 per Share = Total
Purchase Price for Shares $___________

PURCHASER DATA: (Must be completed in full)

Full Name of Purchaser. (Do not use initials):

_________________________________ _________ __________________________
First Full Name (Do not use initials) Middle Initial Last Name

Residence Address, including Zip Code: (Do not use P.O. Box)

________________________________________________________________________

Resident Telephone Number: -or- Business Telephone Number:

________________________ _________________________

Social Security Number (Individual): -or- Tax I.D. Number

________________________ ___________________________

SIGNIFICANT DISCLOSURE

THIS STOCK PURCHASE IS MADE PURSUANT TO, AND IS SUBJECT TO, THE
TERMS
AND CONDITIONS OF THE QUALIFICATION APPROVED BY THE SECURITIES
COMMISSIONS OF THE STATES IN WHICH THE SHARES ARE BEING OFERED.
SIGNATURE MUST BE IDENTICAL TO NAME OF REGISTRED OWNER.

________________________________________________
Printed Name of Purchaser

______________________________________________ _____________
Signature of Purchaser Date

________________________________________________
Printed Name of Purchaser (if more than one)

______________________________________________ _________________
Signature of Purchaser (if more than one) Date
ADDITIONAL INFORMATION

In order to facilitate processing of your purchase, please be sure you
have completed each of the following:

A check made out to mrcdrom.com/Stock Transfer Company of America,
Inc., Agent

Enter the number of Shares being purchased and total cash
contribution on the Stock Purchase Agreement.

Enter the Sate in which you are a legal resident in the "Residence
Address" line above.

Please mail check and this Stock Purchase Agreement to:

Stock Transfer Company of America, Inc.
P.O. Box 796277
Dallas, Texas 75379-6277
<PAGE>
APPENDIX B
FOR COMPLETION AND EXECUTION BY ARKANSAS, CALIFORNIA, IDAHO,
MASSACHUSETTS, MISSOURI, NEBRASKA, NORTH DAKOTA, OREGON,
SOUTH DAKOTA, TENNESSEE AND TEXAS RESIDENT ONLY

SUITABILITY QUESTIONNAIRE

mrcdrom.com,inc.
2415 Midway Suite 115
Carrollton, Texas 75006

RE: Offering of Common Stock

Gentlemen:

The following information is furnished to you in order for you to
determine whether the undersigned is qualified to purchase any of the
securities being offered and sold by mrcdrom.com, a Delaware
corporation (the "Company") in connection with the Company's public
offering up to 3,000,000 shares of its Common Stock (the "Shares"),
as more fully described in the Company's Prospectus dated April __,
1997. I understand that you will rely upon the information for
purposes of such determination. I also understand that I may, in
your sole discretion, be required to supply such appropriate
documentation to you in order to permit you, as may be necessary, to
verify and substantiate my status as a California or Oregon resident
who is qualified to participate in the proposed public offering of
Shares.

ALL INFORMATION CONTAINED HEREIN WILL BE TREATED CONFIDENTIALLY.
However, I agree that you may present this questionnaire to such
parties as you deem appropriate if called upon to establish your
belief that the proposed offer and sale of shares to me was
appropriate.

I hereby provide you with the following representations and
information:

1. Financial Information:

(a) My net worth or joint net worth with my spouse (exclusive of
home, home furnishings and personal automobiles) is
$____________________.

(b) My net worth or joint net worth with my spouse including home,
home furnishings and personal automobiles it $___________________.

(d) I estimate that during the current tax year I will have gross
income or joint gross income with my spouse of at least
$____________________.

2. Based upon the information provided in Section 1 above, and based
upon other personal information concerning me, I am qualified to
participate in the proposed public offering of the Shares because I
fall within one of the following categories:

FOR CALIFORNIA, IOWA, NORTH DAKOTA AND OREGON RESIDENTS ONLY

I, either alone or with my spouse, have a minimum net worth (excluding
home, home furnishings and automobiles) of at least $75,000 and had a
minimum gross income of $50,000 during the last tax year and will
have (based on a good faith estimate) minimum gross income of $50,000
during the current tax year, and an investment in the Shares will not
exceed ten percent (10%) of my net worth.

I, either alone or with my spouse, have a minimum net worth (excluding
home, home furnishings and automobiles) of $150,000, and an investment
in the Shares will not exceed ten percent (10%) of my net worth.

FOR ARKANSAS, MASSACHUSETTS, MISSOURI, NEBRASKA, SOUTH DAKOTA,
TENNESSEE AND TEXAS RESIDENTS ONLY

I, either alone or with my spouse, have a minimum net worth (excluding
home, home furnishings and automobiles) of at least $250,000 and had
minimum gross income of $65,000 during the last tax year and will
have (based on a good faith estimate) minimum gross income of $65,000
during the current tax year.

I, either alone or with my spouse, have a minimum net worth (excluding
home, home furnishings and automobiles) of at least $500,000.

I, either alone or with my spouse, will purchase $100,000 or more of
the Shares.

I, either alone or with my spouse, had a minimum gross income of
$200,000 during the last tax year and will have (based on a good faith
estimate) minimum gross income of $200,000 during the current tax
year.

I, either alone or with my spouse, have a minimum net worth (excluding
home, home furnishings, and automobiles) of $1,000,000.

FOR IDAHO RESIDENTS ONLY

I am an "Accredited Investor" because I fall within one of the
following categories:

A bank as defined in section 3(a) (2) of the Securities Act, or any
savings and loan association or other institutions as defined in
section 3(a) (5) (A) of the Securities Act whether acting in its
individual of fiduciary capacity, any broker or dealer registered
pursuant to section 15 of the Exchange Act; any insurance company as
defined in section 2(13) of the Securities Act; any investment
company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a) (48) of that
act; any Small Business Investment Company licensed by the United
States Small Business Administration under section 301 or (d) of the
Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
$5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment
decision is made by a plan fiduciary, as defined in section 3 (21) of
such Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if
a self-directed plan, with investment decisions made solely by persons
that are accredited investors.

_____ A private business development company as defined in
section 202(a) (22) of the Investment Advisers Act of 1940.

_____ An organization described in section 501 (3) of the
Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000.

_____ A director, executive officer, or general partner of the
issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that
issuer.

_____ A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of this purchase exceeds
$1,000,000.

_____ A natural person who had an individual income in excess 0f
$200,000 in each of the two most recent years or joint economic with
that person's spouse in excess of $300,000 in each of those year s and
has reasonable expectation of reaching the same income level in the
current year.

_____ A trust, with total assets in excess of $5,000,000 to
formed for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person who has knowledge
and experience in financial and business matters that is capable of
evaluating the merits and risks of the prospective investment.

_____ An entity in which all of the equity owners are any of the
persons referenced above.

3. I represent to you that the information contained herein is
complete and accurate and may be relied upon by you and that I will
notify you immediately of any material change in any of such
information occurring prior to the closing of the purchase of the
Shares, if any, by me.

IN WITNESS WHEREOF, the undersigned has executed this Suitability
Questionnaire as of the date herein below stated.

________________ __________________________________________
Date Signature

__________________________________________________
Name (Please Print)

NOTE: THIS DOCUMENT MUST BE EXECUTED BY THE INVESTOR AND MUST
BE RETURNED ALONG WITH THE SUBSCRIPTION AGREEMENT AND
SIGNATURE PAGE. THIS DOCUEMNT CANNOT BE EXECUTED BY ANOTHER
PERSON ON BEHALF OF THE INVESTOR.
<PAGE>
APPENDIX C
NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCATION

A CONSUMER'S GUIDE TO SMALL BUSINESS INVESTMENTS

State laws have been relaxed to make it easier for small businesses to
raise start-up and growth financing from the public. Many investors
view this as an opportunity to "get in on the ground floor" of
emerging businesses and to "hit it big" as these small businesses
grow into large ones.

Statistically, most small businesses fail within a few years. Small
business investments are among the most risky that investors can make.
This guide suggests items to consider for determining whether you
should make a small business investment.

Risk and Investment Strategy

A basic principle of investing in a small business is: NEVER MAKE A
SMALL BUSINESS INVESTMENT THAT YOU CANNOT AFFORD TO LOSE ENTIRELY.
Never use funds that might be needed for other purposes, such as
college education, retirement, loan repayment or medial expenses.
Instead, use funds that would otherwise be used for a consumer
purchase, such as a vacation or a down payment on a boat or RV.

Above all, never let a commissioned securities salesperson or an
officer or director of a company convince you that the investment is
not risky. Any such assurance is almost always inaccurate. Small
business investments are generally highly illiquid even though the
securities may technically be freely transferable. Thus, you will
usually be unable to sell your securities if the company takes a turn
for the worse.

Also, just because the state has registered the offering does not mean
the particular investment will be successful. The state does not
evaluate or endorse the investment. (If anyone suggests otherwise to
you, it is unlawful.)

If you plan to invest a large amount of money in a small business, you
should consider investing smaller amounts in several small
businesses. A few highly successful investments can offset the
unsuccessful ones. Even when using this strategy, DO NOT INVEST
FUNDS YOU CANNOT AFFORD TO LOSE ENTIRELY.

Analyzing the Investment

Although there is no magic formula for making successful investment
decisions, certain factors are often considered particularly important
by professional venture investors. Some questions to consider are as
follows:

1. How long has the company been in business? If it is a start up or
has only a brief operating history, are you being asked to pay more
than the shares are worth?
2. Consider whether management is dealing unfairly with investors by
taking salaries or other benefits that are too large in view of the
Company's stage of development of by retaining an inordinate amount
of the equity of the company compared with the amount investors will
receive. For example, is the public putting up 80% of the money but
only receive 10% of the company shares?
3. How much experience does management have in the industry and in a
small business? How successful were the managers in previous
businesses?
4. Do you know enough about the industry to be able to evaluate the
company and make a wise investment?
5. Does the company have a realistic marketing plan and do they have
the resources to market the product or service successfully?

There are many other questions to be answered, but you should be able
to answer these before you consider investing.

Making Money on Your Investment

The two classic methods for making money on an investment in a small
business are resale in the public securities markets following a
public offering and receiving cash or marketable securities in a
merger or other acquisition of the company.

If the company is the type that is not likely to go public or be sold
out within a reasonable time (i.e., a family owned or closely held
corporation), it may not be a good investment for you irrespective of
its prospects for success because of the lack of opportunity to cash
in on the investment. Management of a successful private company may
receive a good return indefinitely through salaries and bonuses but it
is unlikely that there will be profits sufficient to pay dividend
commensurate with the risk of the investment.

Other Suggestions

The Disclosure Document usually used in public venture offering is the
"Form U- 7." which has a question and answer format. The questions
are designed to bring out particular factors that may be crucial to
the proper assessment of the offering. Read each question and answer
carefully. If an answer does not adequately address the issues raised
by the questions, reflect on the importance of the issue in the
context of the particular company.

Even the best venture offerings are highly risky. If you have a
nagging sense of doubt, there is probably a good reason for it. Good
investments are based on sound business criteria and not emotions.
If you are not entirely comfortable, the best approach is usually not
to invest. There will be many other opportunities. Do not let a
securities salesperson pressure you into making a premature decision.

It is generally a good idea to see management of the company
face-to-face to size them up. Focus on experience and trade record
rather than a smooth sales presentation. If at all possible, take a
sophisticated business person with you to help in your analysis.

Beware of information that is different from that in the Disclosure
Document or not contained in the Disclosure Document. If it is
significant, it must be in the Disclosure Document or the offering
will be illegal.

Conclusion

Greater number of public investors are "getting in on the ground
floor" by investing in small businesses. When successful, these
enterprises enhance the economy and provide jobs for its citizens.
They can also provide new investment opportunities, but that must be
balanced against the inherently risky nature of small business
investments.

In considering a small business investment, you should proceed with
caution, and above all, never invest more than you can lose.

No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained
in this Prospectus, and if given or made, such information or
representations must not be 3,000,000 Shares relied upon as having
been authorized by the Company. This Prospectus does not constitute
an offer to sell or a solicitation of an offer to buy Common
Stock any security other than the shares of Common Stock offered by
this Prospectus, or an offer to sell or a solicitation of any offer
to buy any security to any person in any jurisdiction in which such
offer or solicitation would be unlawful. Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any
circumstances, imply that the information in the Prospectus is correct
as of any time subsequent to the date of this Prospectus. TABLE OF
CONTENTS Page Stock Purchase Information Electronic Format of
Prospectus For California, Iowa, North Dakota and Oregon Resident Only
For Arkansas, Massachusetts, Missouri, Prospectus Nebraska, South
Dakota, Tennessee and Texas Resident Only For Idaho Residents Only
Prospectus Summary Risk Factors The Company Use of Proceeds Dividend
Policy Dilution Capitalization Selected Financial Data Plan of
Operation Business Management Certain Relationships and Related
Transactions Principal Stockholders Description of Capital Stock
Shares Eligible for Future Sale Plan of Distribution Legal Matters
Experts Available Information Index to Financial Statements Stock
Purchase Agreement and Signature Page (Appendix A) NASSA Consumer
Guide to Small Business Investments (Appendix B)

Until ________________, 1997 (90 days after the date of this
Prospectus), all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be
required to deliver a Prospectus. This is in addition to the
obligation of dealer to deliver a Prospectus when acting as
underwriters.

<PAGE>
Part II
Information Not Required in Prospectus

Item 24. The Certificate of Incorporation and the Bylaws of the
Registrant contain provisions providing for the indemnification by
the Registrant of all directors, officers employees or agents of the
Registrant. Such indemnification applies only to the extent that any
such person by reason of acting in such capacity is, or is threatened
to be made, a witness in, or party to, any action, suit, arbitration,
alternative dispute resolution mechanism, investigation,
administrative hearing or other proceeding brought by or in the right
of the Registrant, against all judgments, penalties, fines and amounts
paid in settlement, and all reasonable expenses incurred, in
connection therewith, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to the best interests of
the Registrant. The provisions provide for indemnification to the
fullest extent permitted by applicable law.

Specifically the provisions in the Certificate of Incorporation are as
follows:

NINTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permit by the General
Corporation Law of Delaware.

TENTH: The corporation shall, to the fullest extent permitted by the
General corporation Law of the State of Delaware may indemnify any
and all persons whom it shall have power to indemnify under said
section from and against any and all of the expenses, liabilities, or
other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under any
Bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.

In addition, to the indemnification provided by the Certificate of
Incorporation, the Bylaws provide for indemnification and have the
ability to be amended by the directors at any time to provide for
indemnification to the fullest extent permitted by Delaware laws.
Further the directors may cause the Company to purchase and maintain
insurance on behalf of any person who is or was a director of officer
of the corporation, or is or was serving at the request of the
Company as director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other
enterprises against any liability asserted against such person and
incurred in any such capacity or arising out of such status, whether
or not the Company would have the power to indemnify such person.

The indemnification provided in this Certificate shall continue as to
a person who has ceased to be a director, officer, employee or agent,
and shall inure to the benefit of the heirs, executors, and
administrators of such person.

Item 25. Other Expenses of Issuance and Distribution

The expenses of this offering are estimated as follows: <F1>
<TABLE>
<S> <C>
SEC Registration Fee......................... $ _3636________
Blue Sky fees and expenses................... $__10,000______
Transfer Agent and Registrar fees.............$__4,000_______
Printing and engraving expenses ..............$__15,000______
Legal fees and expenses.......................$___5,000______
Accounting fees and expenses................. $___15,000_____
Miscellaneous ............................... $___50,364_____

Total.......................................$100,000
</TABLE>
[FN]
(1) All amounts other than the SEC Registration Fee are estimated.
[/FN]
Item 26. Recent Sales of Unregistered Securities

Within the past three years, the Registrant sold securities without registration
under the Securities Act of 1933, as amended (the "Act") as follows:
<TABLE>
<S> <C> <C> <C>
Consideration Exemption from
Securities Sold Name of Investor Received Registration

6,000,000 Camelot Corporation $756,000 Section 4(2)
of the Act
</TABLE>
Camelot Corporation subscribed for 6,000,000 common shares of the Company in
exchange for $756,000 in inventory, proprietary software, cash and other assets.

Item 27. Exhibits

1.2 Escrow Agreement by and between mrcdrom.com, inc. and Stock Transfer
Company of America, Inc.*
3.0 Certificate of Incorporation of mrcdrom.com, inc.*
3.1 Bylaws of mrcdrom.com, inc.*
4.0 Specimen Stock Certificate*
5.0 Opinion of Jeanette Fitzgerald, Esq.*
10.0 mrcdrom.com, inc. 1997 Stock Option Plan*
10.1 mrcdrom.com, inc. 1997 Directors Stock Option Plan*
10.2 Employment Agreement between mrcdrom.com, inc. and Daniel Wettreich*
10.3 Assignment of trademark mrcdrom*
10.4 Lease and Bookkeeping Agreement by and between mrcdrom.com, inc. and
Camelot Corporation*
24.0 Consent of Lane Gorman and Trubitt, independent certified public
accountants*
24.1 Consent of Jeanette Fitzgerald, Esq. (included in Exhibit 5.0)*

*To be filed by amendment.

Item 28. Undertakings

a. Undertaking pursuant to Rule 415.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to:

(a) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(b) Reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof), which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement; and

(c) Include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment will be deemed to
be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time will be
deemed to be the initial bona fide offering thereto.

(3) To remove from registration, by means of a post-effective
amendment, any of the securities being registered that remain unsold
at the termination of the offering.

B. Undertaking in respect of indemnification.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and other
agents of the Company, the Company has been informed that in the
opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 3rd day of
April, 1997.

mrcdrom.com, inc.

By: /s/ Daniel Wettreich
Daniel Wettreich, Chairman
and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended
this Registration Statement has been signed by the following persons
in the capacities indicated below on the 3rd day of April , 1997.

___/s/ Daniel Wettreich _____ Chairman of the Board, Chief Executive
Daniel Wettreich Officer (Principal Executive Officer)

___/s/ Robert Gregory_____ ____ Chief Financial Officer, (Principal
Robert Gregory Financial and Accounting Officer)

__/s/ Thomas Watts____ __ President
Thomas Watts

__/s/ Jason Conway_______ Director
Jason Conway

__/s/ Colin Grant________ Director
Colin Grant

_/s/ Jeanette Fitzgerald____ Director
Jeanette Fitzgerald
<PAGE>
EXHIBIT INDEX

Sequentially Exhibit Description Pages
Numbered

1.2 Escrow Agreement by and between mrcdrom.com, inc. and Stock Transfer
Company of America, Inc.
3.0 Certificate of Incorporation of mrcdrom.com, inc.
3.1 Bylaws of mrcdrom.com, inc.
4.0 Specimen Stock Certificate
5.0 Opinion of Jeanette Fitzgerald, Esq.
10.0 mrcdrom.com, inc. 1997 Stock Option Plan
10.1 mrcdrom.com, inc. 1997 Directors Stock Option Plan
10.2 Employment Agreement between mrcdrom.com, inc. and Daniel Wettreich
10.3 Assignment of trademark mrcdrom
10.4 Lease and Bookkeeping Agreement by and between mrcdrom.com, inc. and
Camelot Corporation
24.0 Consent of Lane Gorman and Trubitt, independent certified public
accountants
24.1 Consent of Jeanette Fitzgerald, Esq. (included in Exhibit 5.0)
All to be filed by amendment.