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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under section 12(b) or (g) of The Securities Exchange Act of 1934
COLLEGE SOFTWARE, INC.
(Name of Small Business Issuer in its charter)
FLORIDA 65-0853816
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
309 - 837 West Hastings Street, Vancouver, B.C., V6C 3N6
(Address of principal executive offices and Zip Code)
Issuer's telephone number, including area code: (604) 605-0507
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class)
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COLLEGE SOFTWARE, INC. - FORM 10-SB
Table of Contents Page
Part I
Item 1. Description of Business..............................................4
Item 2. Management's Discussion and Analysis or Plan of Operation............8
Item 3. Description of Property..............................................15
Item 4. Security Ownership of Certain Beneficial
Owners and Management.......................................15
Item 5. Directors, Executive Officers, Promoters and Control Persons.........16
Item 6. Executive Compensation...............................................17
Item 7. Certain Relationships and Related Transactions.......................17
Item 8. Description of Securities............................................17
Part II
Item 1. Market for Common Equity and Related
Stockholder Matters.........................................18
Item 2. Legal Proceedings....................................................19
Item 3. Changes in and Disagreements with Accountants........................19
Item 4. Recent Sales of Unregistered Securities..............................20
Item 5. Indemnification of Directors and Officers............................20
Part F/S
Financial Statements..........................................................21
Part III
Item 1. Index to Exhibits....................................................33
Item 2. Description of Exhibits..............................................33
Signatures....................................................................33
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FORWARD-LOOKING STATEMENTS
This Form 10-SB contains forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "PSLRA"), including, but
not limited to statements related to the Company's business objectives and
strategy. Such forward-looking statements are based on current expectations,
estimates and projections about the Company's industry, management beliefs, and
certain assumptions made by the Company's management. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and assumptions that
are difficult to predict; therefore, actual results may differ materially from
those expressed, forecasted, or contemplated by any such forward- looking
statements. The PSLRA does not apply to initial public offerings.
Factors that could cause actual events or results to differ materially include,
among others, the following: market acceptance of the Internet as a medium for
consumers to obtain telecommunications products, the Company's ability to
acquire and develop quality products on an ongoing basis, intense competition
from other E-commerce websites over the Internet, the Company's early state of
development, delays or errors in the Company's ability to effect electronic
commerce transactions, potential liability for defamation, negligence,
intellectual property infringement, and other risks inherent in the
telecommunications and high tech industry and associated with doing business
over the Internet. See, "Management's Discussion and Analysis or Plan of
Operation -- Factors That May Affect Future Results and Market Price of Stock."
Given these uncertainties, investors are cautioned not to place undue reliance
on any such forward-looking statements.
Unless required by law, the Company undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new information, future
events or otherwise. However, readers should carefully review the risk factors
set forth in other reports or documents the Company files from time to time with
the Securities and Exchange Commission, particularly the Annual Reports on Form
10-KSB, the Quarterly Reports on Form 10-QSB and any Current Reports on Form
8-K.
College Software, Inc. (the "Company") is voluntarily filing this Form 10-SB
registration statement in order to make information concerning its business
plan, including financials, as required by the Securities and Exchange
Commission ("SEC") available to the public and its existing and potential
investors. The Company intends to continue to file the interim and periodic
reports as required under the Exchange Act of 1934, as amended ("Exchange Act"),
in order to stay in compliance with the listing requirements and those of the
SEC for reporting companies and publicly traded securities. It is Management's
intent for the Company to be listed for trading on the OTC Electronic Bulletin
Board. Under the current NASD rules, in order to become listed on the OTC
Electronic Bulletin Board, a company now must be a reporting company under the
Securities Act of 1934.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
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College Software, Inc. (hereinafter "The Company"), a development stage company,
was incorporated on June 29, 1998 under the laws of the State of Florida. Its
Articles of Incorporation provided for authorized capital of one hundred and ten
million (110,000,000) shares of which one hundred million (100,000,000) are
$0.001 par value Common Stock and ten million (10,000,000) are $0.001 par value
preferred stock.
The Company was formed to update, market and distribute an existing
Microcomputer Courseware Program designed to teach computer literacy through an
integrated package of courseware and equipment.
There have been no bankruptcy, receiverships, or similar proceedings by or
against the Company. There has been no material reclassification, merger,
consolidation, or purchase or sale of any significant asset(s).
The Company's principal executive offices are located at: 309 - 837 West
Hastings Street, Vancouver, B.C., V6C 3N6
Business History
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The Company's original microcomputer courseware program was first developed and
field tested in the early 1980s by Dr. Peter Braun with the help of United
Education and Software (UES), a corporation which then owned and operated 10
proprietary career schools in California in the fields of business, health care,
computer technologies, para-legal, court reporting, electronics, machining and
welding.
The original Microcomputer Courseware Program consisted of instructor's guides
(documentation), visual aids, suggested curriculum, educational software,
student workbooks, the computers themselves, and total program lease/purchase
financing. The software instructional materials and student manuals were written
for microprocessors produced by IBM, Apple, Commodore, Texas Instruments and the
Tandy Corporation. The computer course packages could either stand alone or
could be added as modules to any school curriculum. Projects within the course
include: keyboard operations, BASIC language, how to print, how to calculate,
disk files, array processing, inventory control, statistical recording, billing
systems and teaching program/testing.
UES had the exclusive license for rights to market the courseware package in the
United States and its territories and introduced the program to its career
campuses in Southern California and also sold the program to schools in
Arkansas, South Carolina, North Carolina, Alabama, Tennessee, Georgia, San Diego
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and Pasadena. Using the microcomputer courseware package, UES offered courses
such as Microcomputer Literacy, Microcomputer Operator, Computerized Office
Administration, and Computerized Office Management.
The original teaching approach by Dr. Braun was considered innovative and
original in the early 1980s when the courseware program was first introduced and
was accepted by the instructors and others who participated in the field testing
of the courseware. However, because computer training was, at the time, still an
unknown investment, sufficient financing for the business could not be secured
and Dr. Braun decided then to abandon the business.
The Company now intends to modernize, update, enhance and expand the existing
courseware package to suit modern and changing technologies. The Company
believes that it will be successful in building on the business infrastructure
laid out by the original courseware program.
The Personal Computer Training Industry
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As one of many organizations in a $60 billion training market, according to
International Data Corporation's 1997 Report, the Company is prepared to
implement a strategy to position itself as a broad-based education and training
solution provider to various public and private organizations. The Company
believes that in order to capitalize on the growth in the training and education
market, it needs to target its core competencies to include greater emphasis on
customer service and support in addition to a diverse portfolio of products.
Business Development
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Though in its developmental stage, the Company believes that it has refined a
business model that will provide a combination of consulting and related
services and computer training courseware to various private and public
organizations. The Company will offer a flexible and expanding portfolio of
products for their customers with the primary focus being on basic computer
software training courseware to be available exclusively online via the
Internet.
The Company is seeking to position itself for the paradigm shift in the
education and training industry by embracing the Internet and the concept of
E-Learning. E-Learning companies are defined as training providers that leverage
the Internet and Web technologies to create, enable, deliver and/or facilitate
life-long learning. The industry is currently categorizing E-Learning companies
into four segments: Content Providers (develop, aggregate and distribute
content); Learning Delivery Agents (provide core technology infrastructure,
software, systems and hardware); Portals (provide training gateways on the
Internet that aggregate information, services, content and applications); and
Full Service Training Providers (providing all segments).
The Company has based its business model on the belief that E-Learning, via the
Internet, has reached a stage at which both suppliers and buyers are equipped to
execute transactions online, on a consistent basis, with the volume necessary to
conduct a viable business environment. In addition, the market has produced
hardware and application software that now allows users to conduct E-commerce
transactions with relative ease while maintaining effective measures of
security. The Company believes consumers have been adequately educated to
navigate the Internet and now, in general, feel comfortable shopping on-line for
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a wide variety of goods and services. These developments have opened the door
for businesses, including this Company, to begin plying their trade via the
Internet.
Products and Services
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The Company's products and services are expected to include:
1. Computer training and courseware management system
2. Expanding portfolio of products
3. Extensive support services for customers
As different industries and businesses may require different levels of
assistance, the Company plans to focus on customer service with each client on
an individual basis. The Company will specifically focus on the clients'
industry requirements and take into account the specific level of computer
literacy within each client's organization, customizing the courseware to match
the level of sophistication and support each customer requires.
To date the Company has no new announcements of products or services.
Marketing Strategy
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Within its business model, the Company has developed a three-phase plan for
marketing fully functional computer training courseware over the Internet.
In its first phase of marketing, the Company will focus on defined markets
within the Northwestern United States and Southwestern Canada. The Company
believes that by staying in defined areas, while in the first phase of
marketing, it will increase the potential to build up a loyal clientele. In
addition, it will allow the Company to create a strong reputation by providing
personal and accessible service to each business, thereby further promoting the
Company's success. The Company will be able to better gauge advertising success
by initially operating within these defined areas.
The second phase of marketing will likely include advertising and promotion to
expand throughout the Northwestern United States and Southwestern Canada region.
If, and when, it becomes successful with its second phase of marketing, the
Company may initiate the third phase of marketing sales that will look to expand
its presence across North America, Canada, and into international sales.
The specific sales targets of the Company's marketing campaign will include new
and existing computer users who want to upgrade and enhance their computer
skills as well as Internet advertisement providers. The Company believes
targeting this market will be beneficial since the majority of the potential
client base have already identified the need for skills upgrading and following
on the paradigm shift to E-Learning, will be looking for solutions online.
Throughout its marketing campaign, the Company will focus on potential clients
that have a basic understanding or are willing to learn more about various
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aspects of computer training. Marketing the benefits of E-Learning to potential
clients within the targeted market will be accomplished by targeted advertising
to drive traffic to the Company's website, and with strategic alliances with
other online businesses.
Competition
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The education and training market is highly fragmented, with no single
institution or company holding a dominant share. These companies include
providers of traditional instructor-led training, multimedia developers and
sellers, textbook publishers and others. Currently, there are several developers
of interactive multimedia training products, and management believes the number
of these companies will continue to increase. Some of these are larger and have
greater resources than the Company, while others offer only specialized training
materials.
The Company believes that if it can offer a diverse portfolio of products,
reliable delivery capabilities and distribution channels in combination with its
ability to effectively manage and administer an education and training
environment, it will position the Company to successfully compete in the growing
education and training market.
Employees
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Currently, the Company has no employees other than the principal. However,
additional staff will be added, as the success of the business demands it.
Government Regulations
----------------------
The Company is not currently subject to direct federal, state, or local
regulation in the United States other than regulations applicable to businesses
generally or directly applicable to electronic commerce. However, because the
Internet is becoming increasingly popular, it is possible that a number of laws
and regulations may be adopted in the United States with respect to the
Internet. These laws may cover issues such as user privacy, freedom of
expression, pricing, content and quality of products and services, taxation,
advertising, intellectual property rights, and information security.
Furthermore, the growth of electronic commerce may prompt calls for more
stringent consumer protection laws. Several states have proposed legislation to
limit the use of personal user information gathered online or require online
services to establish privacy policies. The Federal Trade Commission has
indicated that it may propose legislation on this issue to Congress in the near
future and has initiated action against at least one online service regarding
the manner in which personal information was collected from users and provided
to third parties. The adoption of such consumer protection laws could create
uncertainty in Internet usage and reduce the demand for all products and
services. The Company does not provide customer information to third parties
and, therefore, does not anticipate any current or proposed legislation relating
to online privacy to directly affect its activities to a material extent.
The Company is not certain how its business may be affected by the application
of existing laws governing issues such as property ownership, copyrights,
encryption, and other intellectual property issues, taxation, libel, obscenity,
and export or import matters.
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The vast majority of those laws were adopted prior to the advent of the
Internet. As a result, they do not contemplate or address the unique issues of
the Internet and related technologies. Changes in laws intended to address such
issues could possibly create uncertainty in the Internet marketplace. That
uncertainty could reduce demand for the Company's products or services or
increase the cost of doing business as a result of litigation costs or increased
service delivery costs.
Raw Materials
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The Company does not rely on any one or more raw materials or raw material
suppliers for the normal course of business.
Patents
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The Company has no patents, nor is it in the process of trying to obtain any
patents at this time.
Customers
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The Company currently does not rely on one or a few customers to continue
business nor does the Company believe such a dependency shall evolve in the
future for the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion contains forward-looking statements that are subject to
significant risks and uncertainties. There are several important factors that
could cause actual results to differ materially from historical results and
percentages and results anticipated by the forward-looking statements. The
Company has sought to identify the most significant risks to its business, but
cannot predict whether or to what extent any of such risks may be realized nor
can there be any assurance that the Company has identified all possible risks
that might arise. Investors should carefully consider all of such risks before
making an investment decision with respect to the Company's stock. In
particular, investors should refer to the section entitled, "Factors that May
Affect Future Results and Market Price of Stock".
Plan of Operation
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During the next twelve months, the Company plans to concentrate its efforts on
developing its products and identifying markets for these products. The Company
intends to rely on the experience and expertise of its management to study the
market demand for E-Learning products and services over the Internet.
Because the Company remains essentially a start-up development company with
limited capital resources, it may be necessary for the President to either
advance funds to the Company, or to accrue expenses until such time as an
additional financing can be made. Management intends to hold expenses to a
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minimum and to obtain services on a contingency basis when possible until the
Company's product development and marketing reaches a point when additional
financing will be possible. Further, the Company's President and sole Director
will defer any cash compensation until such time as the Company begins to earn
revenues from operations.
It is clear to the Company that present funding is not sufficient for the launch
of its operations, and that it must interest investors in one or more secondary
capital formation programs before it can launch.
Management is now engaged in evaluating the feasibility of further limited
offerings or private placements, whether to develop a program for investors
involving royalties or profit participation in actual product sales, with
investments tied to specific products, or whether to attempt to register
securities for sale, pursuant to Section 5 of the Securities Act of 1933. It is
the conclusion of management that significant additional capital formation is
necessary to launch operations successfully.
The Company does not intend to use any employees, with the possible exception of
part-time clerical assistance on an as-needed basis, until the Company begins to
earn revenues from operations. Outside advisors or consultants will be used only
if they can be obtained for a minimal cost or on a deferred payment basis.
Management is confident that it will be able to operate in this manner as it
continues to develop its product during the next twelve months.
Cash requirements and need for additional funds
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The Company anticipates no substantial cash requirements for the next twelve
months, to remain in its present pre-operating condition. It is the opinion of
management that $100,000 would be required to launch operations in the next
twelve months.
To sustain the Company in a pre-operating mode, the Company has indicated
substantial self-sufficiency, for this reason, management anticipates no
activity during that period, other than compliance with reporting requirements.
Required management, legal and professional services during that period are
believed capable of being secured for deferred payment or payment in new
investment shares of common stock. The exception to the previous statement is
that the Company's Auditor cannot lawfully or properly be compensated otherwise
than by payment for services in cash as billed by such independent auditor. This
cash requirement is foreseen to be not less than $4,000.00 nor more than
$10,000.00 during the next twelve months. This minimal funding will be obtained
by borrowing, possibly with a guarantee from its officers, directors or
principal shareholder. There is no assurance possible that even these minimal
requirements for cash can be met. The failure to maintain current auditing of
the corporate affairs would result in the failure to meet the Company's
intention to file periodic reports, voluntarily or otherwise, at the close of
its next fiscal year. The expenses of its audit, legal and professional
requirements, may be advanced by management. No significant cash or funds are
required for Management to evaluate possible transactions. No such activity is
expected for at least the next six months.
In the more important and desirable event that operations are to be launched
during the next twelve months, as intended, it will be necessary for the Company
to obtain sufficient working capital to insure that its operations could
continue for long enough to achieve profitability.
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While the Company has disclosed the results of such a contingency, it does not
anticipate any such contingency upon which the Company would voluntarily cease
filing reports with the SEC, even though it might cease to be required to do so
under current rules. It is in the Company's compelling interest to be a
reporting company and to report its affairs quarterly, annually and currently,
as the case may be, generally to provide accessible public information to
interested parties, and also specifically to maintain its qualification for the
OTCBB, if and when the Registrant's intended application for submission be
effective. Capital formation programs cannot be approached responsibly without
maintenance of the Company's reporting status.
Discussion and Analysis of Financial Condition and Results of Operations
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OPERATIONS AND RESULTS FOR THE PAST TWO FISCAL YEARS: The Company was
incorporated on June 28, 1998 and has yet to launch operations. Activity during
the past year has been confined to the identification of markets and development
of products.
FUTURE PROSPECTS: The Company is unable to predict when it may launch intended
operations, or failing to do so, when and if it may elect to participate in a
business acquisition opportunity. The reason for this uncertainty arises from
its limited resources, and competitive disadvantage to other public or
semi-public issuers, and new uncertainties about compliance with NASD
requirements for trading on the OTCBB. Notwithstanding the conditions, the
Company expects to develop a capital formation strategy and launch operations
during the next twelve to eighteen months, if the Company can effect quotation
of its common stock on the OTCBB.
REVERSE ACQUISITION CANDIDATE: The Company is not currently searching for a
profitable business opportunity. This contingency is disclosed for the
possibility that the Company's intended business might fail. The Company is not
presently a reverse acquisition candidate. Should the Company's business fail,
management does not believe the Company would be able to effectively, under
current laws and regulations, attract capital, and would be required to seek
such an acquisition to achieve profitability for shareholders.
Risk Factors that may affect future results and market price of stock
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The business of the Company involves a number of risks and uncertainties that
could cause actual results to differ materially from results projected in any
forward-looking statement, or statements, made in this report. These risks and
uncertainties include, but are not necessarily limited to the risks set forth
below. The Company's securities are speculative and investment in the Company's
securities involves a high degree of risk and the possibility that the investor
will suffer the loss of the entire amount invested.
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LIMITED OPERATING HISTORY; ANTICIPATED LOSSES; UNCERTAINLY OF FUTURE RESULTS
The Company was organized in 1998, and has no operating history upon which an
evaluation of its business and prospects can be based. The Company's prospects
must be evaluated with a view to the risks encountered by a company in an early
stage of development, particularly in light of the uncertainties relating the
acceptance of the Company's business model.
The Company will be incurring costs to develop, introduce and enhance its
courseware program, to establish marketing relationships, and to build an
administrative organization. There can be no assurance that the Company will be
profitable on a quarterly or annual basis. In addition, as the Company expands
its business network and marketing operations it will likely need to increase
its operating expenses, broaden its customer support capabilities, and increase
its administrative resources. To the extent that such expenses are not
subsequently followed by commensurate revenues, the Company's business, results
of operations and financial condition will be materially adversely affected.
POSSIBLE NEED FOR ADDITIONAL FINANCING
It is possible that revenues from the Company's operations may not be sufficient
to finance its initial operating cost to reach breakeven. If this were to occur,
the Company would need to raise or find additional capital. While the Company
expects to be able to meet its financial obligations for approximately the next
twelve months, there is no assurance that, after such period, the Company will
be operating profitably. If they are not, there can be no assurance that any
required capital will be obtained on terms favorable to the Company. Failure to
obtain adequate additional capital on favorable terms could result in
significant delays in the expansion of new services and market share and could
even result in the substantial curtailment of existing operations and services
to clients.
UNPREDICTABILITY OF FUTURE REVENUES; POTENTIAL FLUCTUATIONS IN QUARTERLY
RESULTS.
As a result of the Company's lack of operating history and the emerging nature
of the market in which it competes, the Company is unable to forecast its
revenues accurately. The Company's current and future expense levels are based
largely on its investment/operating plans and estimates of future revenue and
are to a large extent based on the Company's own estimates. Sales and operating
results generally depend on the volume of, timing of, and ability to obtain
customers, orders for services received, and revenues therefrom generated. These
are, by their nature, difficult at best to forecast.
The Company may be unable to adjust spending in a timely manner to compensate
for any unexpected revenue shortfall or delay. Accordingly, any significant
shortfall or delay in revenue in relation to the Company's planned expenditures
would have an immediate adverse affect on the Company's business, financial
condition, and results of operations. Further, in 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 the
Company's business, financial condition, operating results, and cash flows.
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DEVELOPING MARKET; ACCEPTANCE OF THE INTERNET AS A MEDIUM FOR COMMERCE JUST NOW
BEING PROVEN.
The Company's long-term viability is substantially dependent upon the continued
widespread acceptance and use of the Internet as a medium for business commerce,
in terms of the sales of both products and services to businesses and
individuals. The use of the Internet as a means of business sales and commerce
is has only recently reached a point where many companies are making reasonable
profits from their endeavors therein, and there can be no assurance that this
trend will continue.
The Internet has experienced, and is expected to continue to experience,
significant growth in the number of users and amount of traffic. There can be no
assurance that the Internet infrastructure will continue to be able to support
the demands placed on it by this continued growth. In addition, delays in the
development or adoption of new standards and protocols to handle increased
levels of Internet activity or increased governmental regulation could slow or
stop the growth of the Internet as a viable medium for business commerce.
Moreover, critical issues concerning the commercial use of the Internet
(including security, reliability, accessibility and quality of service) remain
unresolved and may adversely affect the growth of Internet use or the
attractiveness of its use for business commerce.
The failure of the necessary infrastructure to further develop in a timely
manner, or the failure of the Internet to continue to develop rapidly as a valid
medium for business would have a material adverse effect on the Company's
business, financial condition, operating results, and cash flows.
UNPROVEN ACCEPTANCE OF THE COMPANY'S SERVICES AND/OR PRODUCTS
The Company is still in its development stage. As a result, it does not know
with any certainty whether its services and/or products will be accepted within
the business marketplace. If the Company's services and/or products prove to be
unsuccessful within the marketplace, or if the Company fails to attain market
acceptance, it could materially adversely affect the Company's financial
condition, operating results, and cash flows.
DEPENDENCE ON KEY PERSONNEL
The Company's performance and operating results are substantially dependent on
the continued service and performance of its officer and directors. The Company
intends to hire additional technical, sales, and other personnel as they move
forward with their business model. Competition for such personnel is intense,
and there can be no assurance that the Company can retain its key technical
employees, or that it will be able to attract or retain highly qualified
technical and managerial personnel in the future. The loss of the services of
any of the Company's key employees or the inability to attract and retain the
necessary technical, sales, and other personnel could have a material adverse
effect upon the Company's business, financial condition, operating results, and
cash flows. The Company does not currently maintain "key man" insurance for any
of its key employees.
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DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET
The success of the Company's business depends, in part, on continued acceptance
and growth in the use of the Internet for business commerce and would suffer if
Internet usage does not continue to grow. Internet usage may be inhibited for a
number of reasons, such as:
o Inadequate network infrastructure.
o Security concerns.
o Inconsistent quality of service.
o Lack of available cost-effective, high-speed service.
o The adoption of new standards or protocols for the Internet.
o Changes or increases in government regulation.
Online companies have experienced interruptions in their services as a result of
outages and other delays occurring due to problems with the Internet network
infrastructure, disruptions in Internet access provided by third-party providers
or failure of third party providers to handle higher volumes of user traffic. If
Internet usage grows, the Internet infrastructure or third-party service
providers may be unable to support the increased demands which may result in a
decline of performance, reliability or ability to access the Internet. If
outages or delays frequently occur in the future, Internet usage, as well as
usage of the Company's Internet Web-sites, could grow more slowly or decline.
COMPETITION
The E-commerce training market in which the Company will operate is very
competitive. Many competitors have substantially greater, financial, technical,
marketing, and distribution resources than the Company.
In the all its markets, the Company competes against a large number of companies
of varying sizes and resources. There are an increasing number of competitive
services and products offered by a growing number of companies. Increased
competition in any service or product area may result in a loss of a client,
reduction in sales revenue, or additional price competition, any of which could
have a material adverse effect on the Company's operating results. In addition,
existing competitors may continue to broaden their service and/or product lines
and other potential competitors may enter or increase their presence in the
E-commerce, resulting in greater competition for the Company.
Most of the Company's current and potential competitors have substantially
longer operating histories, larger customer bases, greater name and service
recognition, and significantly greater financial, marketing, and other resources
than the Company. In addition, competitors may be acquired by, receive
investments from or enter into other commercial relationships with larger,
well-established and well-financed companies as the use of the Internet and
other online services increases. Many of the Company's competitors may be able
to respond more quickly to changes in customer preferences/needs, devote greater
resources to marketing and promotional campaigns, adopt more aggressive pricing
policies and devote substantially more resources to Internet site and systems
development than the Company.
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It is possible that new competitors or alliances among competitors may emerge
and rapidly acquire market share. Increased competition may result in reduced
operating margins and/or loss of market share, either of which could materially
adversely affect the Company's business, results of operations and financial
condition. There can be no assurance that the Company will be able to compete
successfully against current or future competitors or alliances of such
competitors, or that competitive pressures faced by the Company will not
materially adversely affect its business, financial condition, operating results
and cash flows.
RISKS OF POTENTIAL GOVERNMENT REGULATION AND OTHER LEGAL UNCERTAINTIES RELATING
TO THE INTERNET
The Company is not currently subject to direct federal, state, or local
regulation in the United States and Canada other than regulations applicable to
businesses generally or directly applicable to electronic commerce. However,
because the Internet is becoming increasingly popular, it is possible that a
number of laws and regulations may be adopted with respect to the Internet.
These laws may cover issues such as user privacy, freedom of expression,
pricing, content, and quality of products and services, taxation, advertising,
intellectual property rights and information security. Furthermore, the growth
of electronic commerce may prompt calls for more stringent consumer protection
laws. The adoption of such consumer protection laws could create uncertainty in
Internet usage and reduce the demand for all products and services.
In addition, the Company is not certain how its business may be affected by the
application of existing laws governing issues such as property ownership,
copyrights, encryption, and other intellectual property issues, taxation, libel,
obscenity, and export or import matters. It is possible that future applications
of these laws to the Company's business could reduce demand for its products and
services or increase the cost of doing business as a result of litigation costs
or increased service delivery costs.
Because the Company's services will likely be available over the Internet in
multiple states, and possibly foreign countries, other jurisdictions may claim
that the Company is required to qualify to do business and pay taxes in each
state or foreign country. The Company's failure to qualify in other
jurisdictions when it is required to do so could subject the Company to
penalties and could restrict the Company's ability to enforce contracts in those
jurisdictions. The application of laws or regulations from jurisdictions whose
laws do not currently apply to the Company's business may have a material
adverse affect on its business, results of operations and financial condition.
INTELLECTUAL PROPERTY RIGHTS
As part of its confidentiality procedures, the Company expects to enter into
nondisclosure and confidentiality agreements with its key employees, and any
consultants and/or business partners and will limit access to and distribution
of its technology, documentation, and other proprietary information.
Despite the Company's efforts to protect any intellectual property rights it may
have, unauthorized third parties, including competitors, may from time to time
copy or reverse-engineer certain portions of the Company's technology and use
such information to create competitive services and/or products.
14
<PAGE>
It is possible that the scope, validity, and/or enforceability of the Company's
intellectual property rights could be challenged by other parties, including
competitors. The results of such challenges before administrative bodies or
courts depend on many factors which cannot be accurately assessed at this time.
Unfavorable decisions by such administrative bodies or courts could have a
negative impact on the Company's intellectual property rights. Any such
challenges, whether with or without merit, could be time consuming, result in
costly litigation and diversion of resources, and cause service or product
delays. If such events should occur, the Company's business, operating results
and financial condition could be materially adversely affected.
RISKS OF TECHNOLOGY TRENDS AND EVOLVING INDUSTRY STANDARDS
The Company's success will depend on its ability to develop a computer
courseware program that will meet customers' changing requirements. The
microcomputer industry is characterized by rapidly changing technology, evolving
industry standards, and changes in customer need and frequent new service and
product introductions. The Company's future success will depend, in part, on its
ability to effectively use leading edge technologies, to continue to develop its
technological expertise, to enhance its current service, to develop new products
that meet changing customer preferences and to influence and respond to merging
industry standards and other technological changes on a timely and
cost-effective basis.
DEPENDENCE OF LICENSED TECHNOLOGY
The Company may rely on certain technology licensed from third parties, and
there can be no assurance that these third party technology licenses will be
available to the Company on acceptable commercial terms or at all.
ITEM 3. DESCRIPTION OF PROPERTY
The Company is currently operating out of the office of Dr. Peter Braun's son,
Thomas Braun, at 309 - 837 West Hastings Street, Vancouver, B.C., V6C 3N6. The
shared space consists of approximately 400 square feet, which is being used by
the Company free of charge. The Company believes these facilities will be
adequate for its current requirements.
The Company's future plans will likely require additional space as its business
plan progresses. If, and when, this should occur, the Company will look into
expansion via "satellite" offices into target markets that will be able to
financially support the additional office space and manpower required.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
15
<PAGE>
The following table sets forth information, to the best knowledge of the Company
as of July 15, 2000, with respect to each person known by the Company to own
beneficially more than 5% of the Company's outstanding Common Stock, each
director of the Company and all directors and officers of the Company as a
group.
NAME BENEFICIAL OWNERSHIP
PERCENT NUMBER
Executive Officers and Directors
--------------------------------
Dr. Peter Braun, President 950,000
80.1%
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following are the directors and officers of the Company at July 15, 2000:
Name Age Title
---- --- -----
Dr. Peter Braun, Ph.D 64 President, Secretary, Treasurer, Director
All Directors hold office until the next annual meeting of shareholders or the
election and qualification of their successors.
No director, Officer, affiliate or promoter of the Company has, within the past
five years, filed any bankruptcy petition, been convicted in or been the subject
of any pending criminal proceedings, or is any such person the subject or any
order, judgment or decree involving the violation of any state or federal
securities laws.
The business experience of the person listed above during the past five years is
as follows:
Dr. Peter Braun, Ph.D.
Effective: June 29, 1998. President
-------------------------------------
Dr. Braun began his computer career in 1958, with International Business
Machines (IBM), as a Customer Engineer. At the age of 30 he decided to study
vocational education, and to complete his doctorate in Educational Psychology at
the University of Alberta. He then returned to IBM and served as an Educational
Consultant in various worldwide locations, including Belgium, Germany, and
Italy.
In 1977, he moved to Canada, changing careers to become a teacher-trainer at the
University of British Columbia. He has since taught teacher-preparation courses
at California State Polytechnic University. He is internationally well-known for
his many teacher training workshops and seminars.
16
<PAGE>
Since 1995 - to present Dr. Braun has been self-employed in the real estate
development market and since 1998 he has been President of College Software,
Inc.
ITEM 6. EXECUTIVE COMPENSATION
The Company has not had a bonus, profit sharing, or deferred compensation plan
for the benefit of its employees, officers or directors. The Company has not
paid any salaries or other compensation above $100,000 to its officers,
directors or employees since inception. Further, the Company has not entered
into an employment agreement with any of its officers, directors or any other
persons and no such agreements are anticipated in the immediate future. It is
intended that the Company's directors will defer any further compensation until
such time as the Company begins to earn revenues from operations.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the Company's last two fiscal years, there have not been any transactions
between the Company and any officer, director, nominee for election as director,
or any shareholder owning greater than five percent (5%) of the Company's
outstanding shares, nor any member of the Company's officers or directors
immediate family, except as follows:
On or about October 31, 1998, the Company approved the issuance of 950,000
shares of its common stock to Peter Braun under a license agreement dated July
5, 1998. The terms of this transaction was determined by the Board of Directors,
at the time there were no other stockholders. These shares are restricted since
they were issued in compliance with the exemption from registration provided by
Section 4(2) of the Securities Act of 1933, as amended. After these shares have
been held for one (1) year, the director, noted above, could sell, in a given
period, shares based on 1% of the outstanding stock of the Company. Therefore,
these shares cannot be sold except in compliance with the provisions of Rule
144. The share certificates registered to the above director has had a legend
affixed to it restricting its sale.
On or about June 29, 2000, the Company approved the issuance of 100,000 shares
of common stock to Thomas Braun for legal services rendered, and 50,000 shares
of common stock to Anna Trinh for research and managerial services rendered.
Thomas Braun is the son of the President and sole director, Peter Braun, and
Anna Trinh is Thomas Braun's sister-in-law. The terms of these transactions were
determined by the Board of Directors, as majority shareholder of the Company.
These shares are restricted since they were issued in compliance with the
exemption from registration provided by Rule 701 of the Securities Act of 1933,
as amended and therefore these shares cannot be sold except in compliance with
the provisions of Rule 144. The share certificates registered in the names of
the above persons have had a legend affixed to them restricting their sale.
ITEM 8. DESCRIPTION OF SECURITIES
17
<PAGE>
The authorized capital stock of the Company consists of one hundred million
(100,000,000) shares of Common Stock and ten million (10,000,000) shares of
Preferred Stock. The following summary of certain provisions of the Common Stock
and the Preferred Stock of the Company does not purport to be complete and is
subject to, and qualified in its entirety by, the Articles of Incorporation and
Bylaws of the Company that are included as exhibits to this Form 10-SB and by
the provisions of applicable law.
Common Stock
------------
As of July 15, 2000 there were 1,185,400 shares of Common Stock outstanding held
of record by 27 stockholders. The holders of Common Stock are entitled to one
vote for each share held of record on all matters submitted to a vote of the
holders of Common Stock. Subject to preferences applicable to any outstanding
Preferred Stock, holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors out of funds legally
available therefore. In the event of a liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to share ratably all
assets remaining after payment of liabilities and the liquidation preference of
any Preferred Stock. Holders of Common Stock have no preemptive or subscription
rights, and there are no redemption or conversion rights with respect to such
shares. All outstanding shares of Common Stock are fully paid and
non-assessable.
Preferred Stock
---------------
As of July 15, 2000, no shares of Preferred Stock were designated or
outstanding. The Board of Directors has the authority to issue up to 20,000,000
(twenty million) shares of Preferred Stock in one or more series and fix the
rights, preferences, privileges and restrictions granted to or imposed upon an
unissued shares of Preferred Stock and to fix the number of shares constituting
any series and the designation of such series, without any further vote or
action by the stockholders. Although it presently has no intention to do so, the
Board of Directors, without stockholder approval, can issue Preferred Stock with
voting and conversion rights, which could adversely affect the voting power of
the holders of Common Stock. The issuance of Preferred Stock may have the effect
of delaying, deferring, or preventing a change in control of the Company.
Transfer agent and registrar
----------------------------
The transfer agent and registrar for the Common Stock is Holladay Stock
Transfer, Inc. of 2939 N. 67th Place, Scottsdale, AZ 85251.
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
18
<PAGE>
The Company's Common Shares are not currently quoted. The Company is not aware
of any established trading market for its Common Stock nor is there any record
of any reported trades in the public market in recent years. The Company's
Common Stock has never traded in a public market.
If and when the Company's Common Stock is traded, most likely the shares will be
subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act"), commonly referred to as
the "penny stock" rule. Section 15(g) sets forth certain requirements for
transactions in penny stocks and Rule 15g9(d)(1) incorporates the definition of
penny stock as that used in Rule 3a5l-l of the Exchange Act. The Commission
generally defines penny stock to be any equity security that has a market price
less than $5.00 per share, subject to certain exceptions. Rule 3a5l-l provides
that any equity security is considered to be a penny stock unless that security
is: registered and traded on a national securities exchange meeting specified
criteria set by the Commission; authorized for quotation on the NASDAQ Stock
Market; issued by a registered investment company; excluded from the definition
on the basis of price (at least $5.00 per share) or the issuer's net tangible
assets; or exempted from the definition by the Commission. If the Company's
shares are deemed to be a penny stock, trading in the shares will be subject to
additional sales practice requirements on broker-dealers who sell penny stocks
to persons other than established customers and accredited investors, generally
persons with assets in excess of $1,000,000 or annual income exceeding $200,000,
or $300,000 together with their spouse. For transactions covered by these rules,
broker-dealers must make a special suitability determination for the purchase of
such securities and must have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to the first
transaction, of a risk disclosure document relating to the penny stock market. A
broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information for the penny stocks held in the account and information on the
limited market in penny stocks. Consequently, these rules may restrict the
ability of broker dealers to trade and/or maintain a market in the Company's
Common Stock and may affect the ability of shareholders to sell their shares.
Dividend Policy
---------------
The Company has paid no dividends and intends to retain all future earnings, if
any, for use in the development and operation of its business and does not
anticipate paying cash dividends on the Common Stock in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
The Company is currently not a party to any material pending legal proceedings
and no such action by, or to the best of its knowledge, against the Company has
been threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
19
<PAGE>
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
On July 5, 1998, the Company issued 950,000 shares of Common Stock to Peter
Braun for services rendered of $9,500.00 pursuant to Section 4(2) of the
Securities Act of 1933, as amended.
On October 31, 1998 the Company issued 50,000 shares of Common Stock, at $0.01
per share, in completion of a Regulation D Rule 504 offering.
On February 10, 1999 the Company issued 35,400 shares of Common Stock at $0.01
per share, in completion of an additional Regulation D Rule 504 offering.
On June 29, 2000, the Company issued 150,000 shares of Common Stock under Rule
701 of the Securities Act of 1933, as amended, for legal and other services
rendered to the Company.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Act ("Florida Law") permits the indemnification of
officers, directors, and other corporate agents under certain circumstances and
subject to certain limitations. The Registrant's Articles of Incorporation and
Bylaws provide that the Registrant shall indemnify its directors, officers,
employees and agents to the full extent permitted by Florida Law. In addition,
the Registrant has entered into separate indemnification agreements with its
directors and officers which require the Registrant, among other things, to
indemnify them against certain liabilities which may arise by reason of their
status or service (other than liabilities arising from willful misconduct of a
culpable nature). These indemnification provisions may be sufficiently broad to
permit indemnification of the Registrant's officers and directors for
liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act").
At present, there is no pending litigation or proceeding involving a director,
officer, employee or other agent of the Registrant in which indemnification is
being sought nor is the Registrant aware of any threatened litigation that my
result in a claim for indemnification by any director, officer, employee or
other agent of the Registrant.
20
<PAGE>
PART F/S
INDEX TO FINANCIAL STATEMENTS
Independent Auditors Report...................................................22
Assets .....................................................................23
Liabilities and Stockholder's Equity..........................................24
Statement of Operations.......................................................25
Statement of Stockholder's Equity.............................................26
Statement of Cash Flows.......................................................27
Notes of Financial Statements.................................................28
21
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors July 21, 2000
COLLEGE SOFTWARE, INC.
Vancouver, BC, Canada
I have audited the accompanying Balance Sheets of COLLEGE SOFTWARE,
INC., as of June 30, 2000, December 31, 1999, and December 31, 1998, and the
related statements of operations, stockholders' equity and cash flows for the
period January 1, 2000, to June 30, 2000, the year ended December 31, 1999, and
the period June 29, 1998 (inception), to December 31, 1998. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of COLLEGE SOFTWARE,
INC., as of June 30, 2000, December 31, 1999, and December 31, 1998, and the
related stations of operations, stockholders' equity and cash flows for the
period January 1, 2000, to June 30, 2000, the year ended December 31, 1999, and
the period June 29, 1998 (inception) to December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #3 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters, are also
described in Note #3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman
---------------------------
Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414
22
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
BALANCE SHEET
-------------
ASSETS
------
JUNE DECEMBER DECEMBER
30, 2000 31, 1999 31, 1998
-------------- ------------- --------------
CURRENT ASSETS $ 0 $ 0 $ 0
-------------- ------------- --------------
TOTAL CURRENT ASSETS $ 0 $ 0 $ 0
-------------- ------------- --------------
OTHER ASSETS $ 0 $ 0 $ 0
-------------- ------------- --------------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
-------------- ------------- --------------
TOTAL ASSETS $ 0 $ 0 $ 0
-------------- ------------- --------------
The accompanying notes are an integral part of these financial statements
23
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
BALANCE SHEET
-------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
JUNE DECEMBER DECEMBER
30, 2000 31, 1999 31, 1998
-------------- ------------- --------------
CURRENT LIABILITIES
Accounts Payable $ 50 $ 0 $ 0
Officers Advances (Note #8) 1,161 650 559
-------------- ------------- --------------
TOTAL CURRENT LIABILITIES $ 1,211 $ 650 $ 559
-------------- ------------- --------------
STOCKHOLDERS' EQUITY (Note #4)
Preferred stock, par value
$0.001 Authorized 10,000,000
shares Issued and outstanding
at June 30,2000 - None $ 0
Common stock, par value
$0.001 Authorized 100,000,000
shares Issued and outstanding
at December 31, 1998 -
1,000,000 shares $ 1,000
December 31, 1999 -
1,035,400 shares $ 1,035
June 30, 2000 -
1,185,400 shares $ 1,185
Additional Paid-In Capital 24,169 9,319 9,000
Deficit accumulated during
the development stage -26,565 -11,004 -10,559
-------------- ------------- --------------
TOTAL STOCKHOLDERS' EQUITY $ -1,211 $ -650 $ -559
-------------- ------------- --------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0 $ 0
-------------- ------------- --------------
The accompanying notes are an integral part of these financial statements
24
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
-----------------------
<TABLE>
<CAPTION>
JANUARY 1, YEAR JUN.29, JUN.29,1998
2000, TO ENDED 1998, TO (INCEPTION)
JUNE 30, DEC. 31, DEC. 31, TO JUNE 30,
2000 1999 1998 2000
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
INCOME
Revenue $ 0 $ 0 $ 0 $ 0
-------------- ------------- -------------- --------------
EXPENSES
General, Selling
and Administrative $ 15,561 $ 445 $ 10,559 $ 26,565
-------------- ------------- -------------- --------------
TOTAL EXPENSES $ 15,561 $ 445 $ 10,559 $ 26,565
-------------- ------------- -------------- --------------
NET PROFIT/LOSS (-) $ -15,561 $ -445 $ -10,559 $ -26,565
-------------- ------------- -------------- --------------
Net loss per share -
Basic and diluted
(Note #2) $ -.1501 $ -.0004 $ -.1032 $ -.2577
-------------- ------------- -------------- --------------
Weighted average
Number of common
Shares outstanding 1,037,048 1,031,521 1,022,778 1,030,740
-------------- ------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements
25
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
--------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL ACCUMU-
----------------------------- PAID-IN LATED
SHARES AMOUNT CAPITAL DEFICIT
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Balance,
July 5, 1998
Issued for services 950,000 $ 950 $ 8,550 $ 0
October 31, 1998
Issued for cash 50,000 50 450
Net loss
June 29,1998
December 31, 1998 -10,559
-------------- ------------- -------------- --------------
Balance,
December 31, 1998 1,000,000 $ 1,000 $ 9,000 $ -10,559
July 10, 1999
Issued for cash 35,400 35 319
Net loss year ended
December 31, 1999 -445
-------------- ------------- -------------- --------------
Balance,
December 31, 1999 1,035,400 $ 1,035 $ 9,319 $ -11,004
June 29, 2000
Issued for services 150,000 150 14,850
Net loss
January 1, 2000 to
June 30, 2000 -15,561
-------------- ------------- -------------- --------------
Balance,
June 30, 2000 1,185,400 $ 1,185 $ 24,169 $ -26,565
-------------- ------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements
26
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
-----------------------
<TABLE>
<CAPTION>
JANUARY 1, YEAR JUN.29, JUN.29,1998
2000, TO ENDED 1998, TO (INCEPTION)
JUNE 30, DEC. 31, DEC. 31, TO JUNE 30,
2000 1999 1998 2000
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash Flows from
Operating Activities
Net Loss (-), Gain (+) $ -15,561 $ -445 $ -10,559 $ -26,565
Changes in assets and
Liabilities
Issued for services 15,000 0 9,500 24,500
Accounts Payable 50 0 0 50
Officers Advances 511 91 559 1,161
-------------- ------------- -------------- --------------
Net cash used in
Operating activities $ 0 $ -354 $ -500 $ -854
Cash Flows from
Investing Activities 0 0 0 0
Cash Flows from
Financing Activities
Issue common
stock for cash 0 354 500 854
-------------- ------------- -------------- --------------
Net Increase (decrease)
In cash $ 0 $ 0 $ 0 0
Cash,
Beginning of period 0 0 0 0
-------------- ------------- -------------- --------------
Cash, End of Period $ 0 $ 0 $ 0 $ 0
-------------- ------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these financial statements
27
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
June 30, 2000, December 31, 1999, and December 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized June 29, 1998, under the laws of the State of
Florida, as COLLEGE SOFTWARE, INC. The Company currently has no
operations and in accordance with SFAS #7, is considered a development
stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
-----------------
The Company records income and expenses on the accrual method.
Estimates
---------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those
estimates.
Cash and equivalents
--------------------
The Company maintains a cash balance in a non-interest-bearing
bank that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with the maturity of three months or less
are considered to be cash equivalents.
28
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
June 30, 2000, December 31, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
------------
Income taxes are provided for using the liability method of
accounting in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS #109) "Accounting for
Income Taxes". A deferred tax asset or liability is recorded
for all temporary difference between financial and tax
reporting. Deferred tax expense (benefit) results from the net
change during the year of deferred tax assets and liabilities.
Reporting on Costs of Start-Up Activities
-----------------------------------------
Statement of Position 98-5 ("SOP 98-5"), "Reporting on the
Costs of Start-Up Activities" which provides guidance on the
financial reporting of start-up costs and organization costs.
It requires most costs of start-up activities and organization
costs to be expensed as incurred. SOP 98-5 is effective for
fiscal years beginning after December 15, 1998. With the
adoption of SOP 98-5, there has been little or no effect on
the company's financial statements.
Loss Per Share
--------------
Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS #128) "Earnings
Per Share". Basic loss per share is computed by dividing
losses available to common stockholders by the weighted
average number of common shares outstanding during the period.
Diluted loss per share reflects per share amounts that would
have resulted if dilative common stock equivalents had been
converted to common stock. As of June 30, 2000, the Company
had no dilative common stock equivalents such as stock
options.
29
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
June 30, 2000, December 31, 1999, and December 31, 1998
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year End
--------
The Company has selected December 31st, as its year-end.
Year 2000 Disclosure
--------------------
The Y2K issue had no effect on this Company.
NOTE 3 - INCOME TAXES
There is no provision for income taxes for the period ended June 30,
2000, due to the net loss and no state income tax in Nevada, the state
of the Company's domicile and operations. The Company's total deferred
tax asset as of December 31, 1999, is as follows:
Net operation loss carry forward $ 11,004
Valuation allowance $ 11,004
Net deferred tax asset $ 0
The federal net operating loss carry forward will expire by 2019.
This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
------------
The authorized common stock of the corporation consists of 100,000,000
shares with a par value $0.001 per share.
30
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
June 30, 2000, December 31, 1999, and December 31, 1998
NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED)
Preferred Stock
---------------
The authorized preferred stock of the Corporation consists of
10,000,000 shares with a par value of $0.001 per share.
On July 5, 1998, the Company issued 950,000 shares of its $0.001 par
value common stock for services of $9,500 to its director.
On October 31, 1998, the Company issued 50,000 common shares for $0.01
each, for a total of $500 cash, pursuant to Regulation D, Rule 504.
On February 10, 1999, the Company issued 35,400 common shares for $0.01
each, for a total of $354 cash, pursuant to Regulation D, Rule 504.
On June 29, 2000, the Company issued 150,000 shares of its $0.001 par
value common stock for services valued at $0.10 per share for a total
of $15,000, pursuant to Regulation D, Rule 701.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. The
stockholders/officers and/or directors have informally committed to
advancing the operating costs of the Company interest free, if
necessary.
31
<PAGE>
COLLEGE SOFTWARE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
June 30, 2000, December 31, 1999, and December 31, 1998
NOTE 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common or preferred stock.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge.
Such costs are immaterial to the financial statements and accordingly,
have not been reflected therein. The officers and directors of the
Company are involved in other business activities and may in the
future, become involved in other business opportunities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business
interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE 8 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger with
an existing company, an officer of the Company has advanced funds on
behalf of the Company to pay for any costs incurred by it. These funds
are interest free.
32
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibit No. Exhibit Name
3.1 Articles of Incorporation
3.2 Bylaws
4 Text of stock certificate for common stock
10.1 Consulting Agreement between the Company and Thomas Braun
dated June 2, 2000
10.2 Consulting Agreement between the Company and Anna Trinh dated
June 2, 2000
23 Consent of Barry L. Friedman, independent certified public
accountant
27 Financial Data Schedule (electronic filers only)
ITEM 2. DESCRIPTION OF EXHIBITS
None.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
College Software, Inc.
-------------------------
(Registrant)
Date July 31, 2000 By /s/ Peter Braun
------------------------- -------------------------
Peter Braun
President
33
