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FORM 10-KSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File #000-25761
Freesoftwareclub.com, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 88-0414076
(State of Incorporation) IRS Employer Identification
600 Bancroft Way, Berkeley, CA 94710
(Address of Principal Executive Offices and Zip Code)
(510) 649-4922
Registrant's Telephone Number, Including Area Code
Securities Registered Pursuant to Section 12 (b) of the Act: None
Securities Registered Pursuant to Section 12(g)of the Act:
Common Stock, Par Value $.001 Per Share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in the definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value held by non-affiliates of the registrant as of
July 14, 2000: Common Stock, par value $.001 per share, $3,247,125
The number of shares outstanding as of the close of business on July 14,
2000, was 16,947,500 shares of Common Stock, par value $.001 per share.
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Freesoftwareclub.com, Inc. - 2000 Form 10-KSB Annual Report
Table of Contents
PART I
Item 1. Description of Business
Item 2. Description of Property
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 7. Financial Statements
Item 8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
PART III
Item 9. Directors and Executive Officers of the Registrant
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions
Item 13. Exhibits and Reports on Form 8-K
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Introduction
In March 2000, Freesoftwareclub.com, Inc., a Nevada corporation, was acquired
by Sacio, Inc., a Delaware corporation, ("Sacio") through an exchange of
common stock. . Sacio changed its name to Freesoftwareclub.com, Inc. ("FSC,"
the "Company," "we," or "us") Sacio had no significant assets or liabilities
at the acquisition date and had no material operations for the prior three
years
Business Overview
The Company has developed a subscription membership-based model for the sale
of software. In much the same way that hit movies are offered "free" to
subscribers of premium movie channels, the Company offers popular software in
a variety of categories free to club members. Members pay a fee of
$9.95/month and are eligible for one free title per month from an extensive
"commercial catalog" comprised of current and popular selling titles. In
addition, all visitors to the site get access to another extensive catalog of
high quality freeware and "shareware" that can be downloaded at no cost.
Market development is expected to come from a combination of direct sales,
OEM bundling, and ISP Bundling.
A preliminary website was launched in mid-1999. In April, 2000, we deployed a
two-phase plan to re-launch the website. Phase One called for an immediate
redesign and strategy to build site traffic and a registered user database.
No membership subscriptions were to be solicited in Phase One; the commercial
catalog would not be deployed until the necessary time and capital was
available to secure quality content from top name software publishers. Phase
Two of the plan called for launch of the commercial software catalog in
conjunction with a major marketing push to start securing members.
Phase One was successfully launched in late April, and within six weeks the
Company has pushed over 2,500,000 visitors to the site and acquired over
40,000 registrations. During this period, we also accomplished the
following:
- Agreements were either completed, or negotiations ensued, to acquire
software content from several sources, including Mattel, Simon and
Schuster, Macmillan, Electronic Arts, Activision, Ripcord Games, Navarre,
Digital River, and other publishers and distributors of high quality
content.
- Development of an Affiliate program, which incorporated promoting the
Affiliate Companies on the site, and the beginnings of securing affiliate
relationships, including MyFree, Web3000, EMJ Datasystems, Commission
Junction and others.
- An Agreement was completed with a back-end fulfillment company, Rush
Order, to handle all product shipping and logistics.
- An Agreement was completed with a public relations company, S&S Public
Relations, to build consumer awareness and traffic to the site.
- Marketing agreements or negotiations ensued with several on-line market
development companies, including: Real Networks (Netzip), MyPoints,
Freeride, Get Relevant, Promotions.com, AllAdvantage.com, Etour.com, The
Webster Group, and others.
Phase Two launch of the site is now active and is daily securing new members.
However, the commercial catalog is far from complete, and many elements of
the Phase Two marketing campaign have yet to be deployed. Further deployment
of the catalog and full deployment of the marketing campaign require
additional funding by us. Please see "Liquidity and Capital Resources" under
Item 6 below for further discussion.
Marketing Overview
Phase One: To build a certain level of "stickiness" to the site, an
interactive catalog of the best available totally free software was
developed. Each of the titles was categorized, reviewed, and featured
screenshots and detailed descriptions of the products. Described as "The
Freeware Catalog" (to differentiate from Phase Two's "Commercial Catalog"),
it was developed by scraping other web sites of popular titles. These were
installed in a database supporting four platforms: Windows, Macintosh, Palm,
and Linux. The site was also visually developed to handle banners and
buttons,
allowing for an affiliate program/revenue stream.
As part of enticing people to give demographic information for the purpose of
developing a comprehensive, consumer database (to be used for future
marketing), a GiveAway contest was created with a free computer (either PC or
Mac platforms depending on customer preference) offered monthly. The GiveAway
generated over 40,000 names into the database. To date, two computers have
been given away.
In addition to the affiliate program, a contract was signed with NetZip (a
division of Real Networks) to drive traffic to the site. This was extremely
effective. Over 2.6 million people have visited the site during both phases
of the launch.
The objectives of "Phase One," a) drive traffic to the site and b) collect
information to optimize the content of the commercial catalog for Phase Two,
were a success.
Phase Two is the next stage in our evolution, and at this writing is just
getting underway. The key objective for this Phase (and long-term) is
Customer or "member" acquisition.
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Customer Acquisition: Overview
Membership is also the dominant factor in establishing and maintaining
critical partnerships with manufacturers and distributors of software titles;
we must demonstrate that we have a viable membership base in order to
have the leverage to get the top-rated titles at the lowest cost. In order to
have clout with publishers, it is necessary to show large membership numbers.
However, in order to attract members in the first place, it's necessary to
have an outstanding catalog of top-rated titles.
In order to begin this process and make it viable, several things have had to
occur:
- Good product (attractive, top-rated titles of fully licensed software
titles - - as opposed to the Phase One downloadable freeware or
shareware) needed to be acquired to populate the catalog to draw new
memberships.
- Key partnerships had to be made with manufacturers and distributors to
accomplish the acquisitions.
- A total redesign of the site had to be accomplished so that it was clear
to previous visitors, as well as new ones, that we had changed both
visually and in the thrust of our message.
- Our marketing positioning and message(s) needed to be understandable and
our offers sufficiently exciting.
- Pricing needed to be coordinated with positioning so that there would be
no deterrence to membership.
A full discussion of each of these, what worked and what hasn't, what we can
influence and what we can't, and, of most importance, where we go from here,
is delineated below.
Partnerships
EMJ Datasystems has agreed to supply excess inventory of its software library
at minimal cost to us in exchange for marketing allowances. In addition,
they
have agreed to be an affiliate partner, and a source for low cost or closeout
specials for computer and peripheral products (to be featured on our deals
and
specials pages).
Distributors: We have developed an OEM and ISP, or Portal co-marketing
distribution plan. This includes a set of initiatives that will allow for
either: a) a co-branded website or, b) a private-label website featuring
our catalog and member acquisition model. The plan was launched and now
just underway in conjunction with the commercial catalog.
Manufacturer Suppliers: Mattel Interactive was an initial supplier for
software for the commercial catalog. Additional suppliers include EMJ
Datasystems, Navarre Distribution, and Off-Price Inc. Several other suppliers
are waiting for financial commitments from us to also supply the catalog.
They include Simon & Schuster Interactive, Macmillian Publishing, Ripcord
Games, Multimedia Warehouse, and MPS Multimedia Inc.
Marketing Mix, Phase Two
Internet and e-commerce marketing involves a combination of existing and
proven marketing methods as well as new and innovative models, either already
developed or in the process of evolution. For the purposes of this
discussion, the following elements will be explained in terms of what we have
done/are doing, though other variables may be added in the future since the
electronic marketplace is, by definition, fluid and dynamic:
- Online, On-Site Marketing, Promotions, and Pricing.
- Public Relations.
- Direct Marketing through Opt-In Advertising/E-Mail and Newsletters
(possible use of print, radio, and/or broadcast later in the life cycle
of the program).
- Backend Development and Control.
- Affiliate Programs.
- Banners/Buttons.
- Marketing Research.
Online/On-Site Marketing and Promotions
FSC is, by definition, an online/on-site store. Therefore, the most practical
means of reaching our audience is on the site itself. The beginning of Phase
Two necessarily involved a total redesign of the site, which can be found at
http://www.Freesoftwareclub.com/index.htm. Utilizing a variety of graphic
elements including animation, the new site has become dynamic, interactive,
and exciting. A character named "Joe" (a contest will be introduced later for
naming him officially) talks directly to the customer making it more user-
friendly. The concept of "club", "community", and building a house of members
is also introduced immediately. This will be expanded and further developed
with a membership forum area were members can communicate with other members
and company personnel.
The value proposition and the site concept is clearly stated on the home page
- Membership means free software. Further, the site communicates that with
increased membership, we can bring members a fuller, richer catalog of titles
to choose from. As part of this "Charter Member" promotion, an arrangement
was
made with Electronic Arts for the acquisition of America's #1 and #2 games -
- The Sims and SimCity 3000. These, along with a system starter kit
(see below)and an extra month free, became the offer to attract people to
sign
up at the Gold Membership level.
* The Sims is only for the PC platform. SimCity 3000 is for the Mac.
Promotional Pricing
Pricing evolved into a three-tier construction:
- Basic Membership: This is, at $9.95, a month-to-month arrangement. As the
part of the Charter Member promotion, the Falcon IIT System Starter Kit
(this kit includes several Corel productivity programs, as well as
utility
packages, such as an anti-virus program and Total Access Earthlink) was
added as a bonus gift.
- Silver Membership: This is a three-month program at $29.95. Included in
its Charter Member promotion is the software title "Who Wants to be a
Millionaire" to capitalize on the publicity and popularity surrounding
the television program and its offshoots, and the System Starter Kit.
- Gold Membership: The target audience for membership in the Company is, in
fact, at the Charter Member Gold level. At $59.95, it is a six-month
version and, as mentioned above, the acquisition of The Sims and
SimCity 3000, the Starter Kit, as well as an extra month free, was felt
to be the most attractive and "best value" program for FSC, besides
bringing in capital for increasing and expanding the viability of the
catalog. Mathematically, this program works out to be about three cents a
day, which is heavily emphasized to the consumer.
After the launch and Grand Opening, it was decided that there might be
consumers who had no desire for games in general, or for The Sims and SimCity
3000 specifically. For those people, and to influence others to join at the
Gold Member level, a list of alternative software was designed into the site.
Sourcing for these titles will initially come through Buy.com until adequate
volumes allow for leverage volume purchases directly from the respective
manufacturers.
These titles include the following (all best-selling titles attractive to
people interested in top-rated software:
For Windows:
- Norton AntiVirus 200 v6.0
- Everquest: The Ruins of Kunark
- Who Wants to be a Millionaire
- Backyard Baseball (children's game)
- L&H Voice Xpress Standard 5.0
For Mac:
- Who Wants to be a Millionaire
- Backyard Baseball (children's game)
- Unreal Tournament
- Dr. Solomon's Virex 6.0
Another promotional vehicle to be introduced soon is a "mirror site"
consisting of three or four of the essential pages of the existing site with
the home page totally altered. This vehicle, which has already been
developed, is to allow the customer 30 days to look at a specified title
(right now it is either The Sims or SimCity 3000). At the end of that
period of time, they will be allowed to return it at no obligation to them or
keep it and their credit card will be charged for a Gold Membership.
These alternative promotional programs were developed to respond immediately
to market conditions and/or queries from FSC's customers at the time. Other
programs and real time response mechanisms can also be created as the need
arises. For example, as we examine real-time marketing reports generated by
the IT department from site click-throughs, registrants, and/or member sign-
ups or from e-mail/newsletters response ratios, we can further tailor
programs and promotional offers.
Public Relations
Our concept is something new and exciting as far as the computer consumer and
business press is concerned. Based on the early buzz generated both in the
trade press and the general media about free PCs and free ISP service with
PC purchase, it seems reasonable to assume free software will also benefit
from the media limelight.
We have been launched with a very strong PR campaign to all consumer,
technical and investor relation's media (both print and electronic). A
partnership has been entered into with S&S Public Relations in Chicago. The
overall plan budget provides funding for an aggressive public relations
program that will roll through the first twelve months of the marketing
campaign (at least). Building early excitement among the various press
vehicles and personages is important in creating a groundswell of excitement
surrounding us. After three initial press releases, there have already been
several telephone calls expressing interest and a "whistle stop" tour with
media people has been arranged for John Collins, President and CEO, for the
week of August 1, 2000.
Creating excitement amongst press and key people at electronics trade shows
will also be part of the PR push. The control and management of the PR
program to make sure it is targeted to give us premium exposure within
appropriate vehicles is important as well. After analyzing demographics over
time (see Marketing Research below), PR will be more able to segment customer
groupings and match related print and electronic media as a means of reaching
the audience.
Direct Marketing
Direct marketing is a proven method for selling products using systems that
provide measurable results. FSC's marketing is, and will be, employing many
direct marketing and media vehicles including:
- Internet web banners
- Opt-in e-mail
- Internet search engine site promotion
- "Tell A Friend" referral rewards
Internet banner ads: In addition to other direct mail vehicles, we will
launch a monthly campaign of banner ads and web site promotions among the
top search engines. Web banner ad response varies widely and, as is true
for all of our direct response marketing, it will be predicated on offer,
circulation plan, creative elements, and timing. A "hot" offer, coupled with
a sound circulation plan and excellent creative execution that is timed
correctly, will achieve desired, high response rates.
We are involved in negotiations with several partners in banner ad placement
including: Commission Junction and Refer-It.com. Depending on the program,
we earn a commission, and/or some type of monetary remuneration, for every
click-through of placed banners. We pay a commission or other monetary
remuneration for those sites carrying our banner or button. Careful reports
are created at each month's end delineating results from these relationships
to assist both partners in gauging the worth of particular campaigns.
Search Engine Promotions: The budget also includes an aggressive search
engine/website promotional campaign to ensure the site is linked to all the
major search engines. If anyone does a search on the keyword "FREE", for
example, (we have prepared over 200 similar, site-appropriate keywords),
using Yahoo, Excite, Alta Vista, Lycos, or any of the other major search
engines, this campaign is designed to make absolutely sure our site comes
up at or near the top of any list.
Opt-in e-mail: The first e-mail/newsletter was sent out the week of June 26,
2000 to over 40,000 people culled from the Phase One registration list. It
outlined all of the offers mentioned above and was carefully orchestrated to
interest people who had already asked to be told about new events and
happenings. (http://www.Freesoftwareclub.com/survey.asp).
Of the 40,000 people, the list was segmented into two discrete populations:
registrants (for the GiveAway) and people expressing interest in the club.
The registrants list recorded a 12% response rate and the interested list a
12.6 rate - - both well above average response rates for this type of direct
mail vehicle.
The next step in the campaign of using e-mails and newsletters for Phase Two
will test between one million and three million names from a variety of opt-
in sources including:
- Netzip
- Visiosonic
- Web 3000
The partnership with Web 3000 illustrates a process for acquiring members
with no initial outlay of capital. Through a negotiated contract, Web 3000 is
only paid if a member signs up. Defined as a "CPA" program (or Cost Per
Action), this ensures at least a Basic Membership ($9.95 per month) at the
cost of $3.00 for a net gain of $6.95. Management is currently looking at
other companies that can assist us through CPA programs.
One of the keys of an opt-in campaign is the ability to predict exactly how
many orders any offer will generate within ten days or less of the mail date.
This virtual-real-time ability to analyze data allows for just-in-time and
quick response in altering images, messages, or offers as the need arises.
Opt-in campaigns can also be targeted to specific populations after data
mining has occurred. This gives us tremendous leverage in negotiating
favorable purchases and terms with software publishers and hardware
manufacturers.
Tell-A-Friend Referral Rewards: The personal recommendation is still the
single most important buying influence on the consumer. Through the Tell-A-
Friend program, (http://www.Freesoftwareclub.com/friend.htm ). We can
significantly reduce customer acquisition costs and leverage this huge
influence while promoting goodwill.
To take advantage of this, the plan offers members $5 for each member they
get to sign up with us. The average cost per sale from all other marketing
sources combined is $15. By offering a cash rebate for every referral that
subscribes, we reduced the acquisition cost by 66% - - from $15 to $5.
Forecasting indicates that 8% of subscribers will Tell-A-Friend. Most of
these referrals will arrive in the ten to thirty days after an individual
subscribes.
Competition
Competition on the worldwide web is endless. E-commerce software resellers,
in particular, are too extensive to fully enumerate here. But there are
several that are similar to the Company: established resellers such as
Buy.com, Egghead, Beyond.com and fledgling ones; Arcamax, SOMC, SoftwareUSA
and Unbeatabledeals.com. These companies are all software-specific. However,
key to our differentiation, they are not clubs. This differentiation provides
us with an outstanding niche in the seemingly endless small and large
companies involved in selling and/or giving away software titles.
The other competitors are the "traditionals" which are club-oriented.
Companies such as Columbia House and Book of the Month Club have the same
membership-based model. The difference between these and us is once one joins
one of the traditionals, there is still payment for each monthly selection.
Our distinction and ultimate differentiation from this model is that members
get, absolutely free, titles for each month of their membership, carrying the
concept of "Membership Means Free Software" to its logical conclusion.
Back-end Development & Control
One of the major advantages we have over most of our competitors is in-house
computer expertise. Through the Chief Technology Officer, Marilson Campos,
and his team of IT professionals, all of the e-commerce is done in-house.
This has included the purchase and placement of our own dedicated server.
The ability to have the team available on-site also allows for rapid changes,
fixes, alterations and real time decision-making.
The ability to control all e-commerce is also a plus. After clicking on the
"Join Now" button, the user fills out an online secure order form, including
credit card number and expiration date. Upon clicking the "submit" button,
their credit card information is sent to our server where it is automatically
processed for bank authorization.
Once the bank authorizes the charges, we automatically charge it. The cash is
deposited into our merchant account at midnight the same day. When the
approval is granted, the system automatically generates the e-mail back to
the
customer with a unique log-in (actually the e-mail address) and password,
which can immediately be used to make selections and/or purchases.
It has also been able to set up tracking for the Tell-A-Friend program. With
the use of a trackable e-mail form that allows the customer to fill in their
own e-mail address and their friend's address, the referring customer can
obtain his/her referral cash while we acquire another possible customer and
all of their information for the database.
The catalogs are controlled through administration of three basic databases:
Windows, Mac, and Freeware. The front end is handled from inputting
information about new titles, including a ratings system, description(s), box
shots, screen shots, and system requirements. The inputted information in the
database, through complex back-end programming then dumps directly into pre-
created templates in the site. The "static" pages are controlled in-house as
well allowing for real time alterations as questions, market changes,
promotions or other factors impact site development and maintenance.
Affiliate Partnerships
As part of the plan to increase revenue stream and generate new members, we
have gone into partnerships with Commission Junction, a web-based sales and
distribution company that will promote and secure new affiliate partners for
the site. Affiliates already include Visiosonic, Web3000, MyFree.com, and
EMJ Datasystems. We have also acquired other companies banners (described
above) to pick up additional revenue from customers clicking through to
their sites. These partnerships should grow over time and become profitable
for both sides.
Marketing Research
It is critical that marketing research of many types be on going. We, through
IT, have complete demographics on the 40,000 visitors who registered to win
a computer. As people join, we are acquiring more statistics and demographics
as well. And, as we grow, the ability to segment this population will
increase. With each additional promotional activity we will be able to
target specific populations and interest groups with e-mails, newsletters
etc.
Initial research indicates that our market will have two basic groups:
"gamers" and parents with children. Educational studies show that children
aged 4-10 years jump a learning level every 4 to 5 months, while parents
typically purchase software twice a year - at Christmas and birthdays. One of
the direct advantages for these parents in becoming members of the Company is
the ability to provide software for their children on a timely basis so their
children's learning level/curve is uninterrupted.
Game software continues to be the top draw in the consumer software
marketplace and we will be featuring titles with appeal to this segment of
(mainly) males, ages 18-34.
The first demographics are showing that the initial marketing research is
accurate. Our "average" customer is somewhere between the ages of 22-45, the
majority are male and most customers are utilizing a Windows environment. As
part of the research model, we are collecting data on buying habits, likes
and dislikes, the possibility of seasonality for specific products, and how
to increase our reach.
Going Forward
The world wide web presents opportunities for business-to-consumer companies.
It has been an $11 billion dollar marketplace overall and continues to grow.
Millions of people are purchasing goods, services and products over the net
and a large proportion of them are purchasing software. We need to capitalize
on this momentum and grow the commercial catalog so there is nowhere else
where the consumer can find better titles, larger quantities of top-rated
software, or better deals and specials. There needs to be an infusion of
capital to better stock the catalog to make it more attractive to customers
becoming members and to retain existing ones.
Increased capital would also be used to help broaden the marketing mix.
Though the internet is a perfect venue for marketing, it is often a struggle
to get name recognition and top-of-mind/sight placement in the myriad of
other companies and competitors struggling for the same thing. There are
other forms of media that, given the capital to acquire them, would work to
complement and/or augment the internet itself.
For example, using the parent/child model, direct mail to purchased lists of
target audiences (e.g. parents), or print advertising in those magazines that
parents regularly read, would help "get the word out" and by pass all the
competition struggling to make it to the head of the search engine line.
Further down the road, cable television during programs geared to mothers
staying at home might be appropriate.
The key to the success for us is differentiation from the hundreds of
websites
that savvy consumers view everyday online. It is also the ability for quick
and real-time response to the market with reports that show accurate
statistics and demographic information which can then be turned into
attractive promotional offers, new and exciting software titles or other
vehicles to attract and retain membership.
There have been no bankruptcy, receivership, or similar proceedings.
There have been no material reclassifications, mergers, consolidations, or
purchase or sale of a significant amount of assets not in the ordinary course
of business.
ITEM 2. DESCRIPTION OF PROPERTY
The approximately 1,000 square feet of office space that we use is provided
by Re:Launch as part of our monthly contract with them to provide not only
office space, but all "overhead" items, as well as other marketing and
consulting services to us. Please see a copy of our Agreement with Re:Launch
that has been attached to and filed with this 10-KSB.
Re: Launch is an affiliate/related company in that it is owned by certain of
our Directors/Officers, namely Richard Miles and John Collins.
At present, the office facility and arrangement with Re:Launch is adequate to
provide effective operational support for us. There is also additional space
within the current building to allow expansion of up to 3,000 square feet if,
and when, the need arises.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In February, 2000, we called for a Special Meeting of the Shareholders, to be
held on March 22, 2000, at which they were to vote upon the terms of a
Proposal received from Freesoftwareclub.com, Inc. with respect to the merger
of the two companies.
Proxies for the meeting were solicited pursuant to Regulation 14A under the
Act, with a majority vote received in favor of the proposals set forth within
the Proxy materials. There were no votes received against any of the items
set forth within the Proxy materials for vote of the shareholders, as
follows:
1) acceptance of the merger proposal from Freesoftwareclub.com, Inc.,
2) a name change from Sacio, Inc. to Freesoftwareclub.com, Inc.,
3) election of three new Directors, Richard Miles, John Collins, and Rene
Pardo, and
4) increase in the number of authorized shares to 100,000,000 shares.
For further information with respect to this Special Meeting, and the results
thereof, please visit the SEC's web-site (at "www.sec.gov") and look under
the Company's DEF 14A and 8-K filings from the first and second quarters of
2000.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is traded on the OTC Electronic Bulletin Board. The OTC
Electronic Bulletin Board is sponsored by the National Association of
Securities Dealers (NASD). The Electronic Bulletin Board is a network of
security dealers who buy and sell stocks.
For the periods indicated, the table sets forth the high and low bid prices
per share of common stock. These prices represent inter-dealer quotations
without retail markup, markdown, or commission and may not be necessarily
represent actual transactions.
Low High
---- ----
Calendar 2000
First Quarter (1/1/00 to 3/31/00 $1.88 $4.00
Second Quarter 4/1/00 to 6/30/00) .88 2.50
Third Quarter to date (thru 7/12/00) .75 1.00
Our Board of Directors determines any payment of dividends. The Board of
Directors does not expect to authorize any payment of cash dividends in
the foreseeable future. Any future decision with respect to dividends
will depend on future earnings, operations, capital requirements and
availability, restrictions in future financing agreements, and other
business and financial considerations.
As of July 14, 2000, there were approximately 27 holders of record of
our Common Stock. The Board of Directors believe that the number of
beneficial owners substantially greater than the number of record holders
because a significant portion of our outstanding Common Stock is held in
broker "street names" for the benefit of individual investors.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
Through a merger, executed March 21, 2000, between Sacio Inc., a Delaware
Corporation and Freesoftwareclub.com, Inc., a Nevada Corporation, and a
concurrent name change from Sacio, Inc. to Freesoftwareclub.com, Inc., a
Delaware Corporation, the Company transitioned into the newly organized
entity to market and sell various kinds of purchased software titles to
direct consumers through the an Internet website developed by the Company.
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES SUCH AS THE DEPENDENCE OF THE COMPANY ON AND THE ADEQUACY OF
CASH FLOWS. THESE FORWARD-LOOKING STATEMENTS AND OTHER STATEMENTS MADE
ELSEWHERE IN THIS REPORT ARE MADE IN RELIANCE ON THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THE SECTION BELOW ENTITLED FACTORS THAT MAY
AFFECT FUTURE RESULTS" SETS FORTH AND INCORPORATES BY REFERENCE CERTAIN
FACTORS THAT COULD CAUSE ACTUAL FINANCIAL RESULTS OF THE COMPANY TO DIFFER
MATERIALLY FROM THESE STATEMENTS.
Results of Operations:
Sacio, Inc. was a development stage company that had never commenced
operations and thus the following discussions are based solely on the
operations of Freesoftwareclub.com, Inc. from its inception as a Nevada
Corporation, on April 15, 1999, which subsequently, through its merger with
and into Sacio, Inc. and name change, became Freesoftwareclub.com, Inc., a
Delaware Corporation.
There were no revenues for the period from inception (April 15, 1999) through
March 31, 2000 as the website was activated in April 2000.
Net losses before income taxes of $281,281 resulted from Web Site Development
and Maintenance expenses of $231,000, General and Administrative expenses of
$41,981 and other related expenses of $8,300. Income tax expense was $800
for the period.
Website Development and Maintenance Costs consist of payments to two outside
contractors; one who is primarily responsible for content and the second who
is primarily responsible for the technological maintenance of the website on
the Internet.
Liquidity and Capital Resources:
We received $737,258 in net cash proceeds during the period ended March 31,
2000 from the issuance of common stock, and an additional $100,000 from the
issuance of a note payable that has subsequently been liquidated and
converted to 66,667 shares of common stock. Net cash of $306,956 was used
during the period for operating activities, which was primarily the result of
our operating expenses for the period.
The current cash position is not sufficient, in our opinion to sustain
operations through March 31, 2001. We expect to raise an additional
$750,0000 in cash from equity and/or debt financing Additional capital is not
only needed to sustain operations, but to hire additional personnel and
continue to build our infrastructure, improve the catalog offering, and
attract people to the web site. The implementation of the marketing plan is
considered critical to meet the revenue plan for the ensuing period. There
can be no assurances that we will be successful in obtaining such financing.
Our continued existence is dependent upon our ability to raise additional
capital and/or financing and the success of our future operations.
ITEM 7. FINANCIAL STATEMENTS
FINANCIAL STATEMENTS AND REPORT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FREESOFTWARECLUB.COM, INC.
March 31, 2000
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Freesoftwareclub.com, Inc.
We have audited the accompanying balance sheet of Freesoftwareclub.com, Inc.
(a development stage company) as of March 31, 2000, and the related
statements
of operations, stockholders' equity and cash flows from April 15, 1999 (date
of inception) to March 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Freesoftwareclub.com, Inc.
as of March 31, 2000, and the results of its operations and its cash flows
from April 15, 1999 (date of inception) to March 31, 2000, in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note B to the
financial statements, the Company has insufficient resources to fund
operations for the next twelve months and additional capital or financing
has not yet been obtained. Those conditions raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans
regarding those matters are also described in Note B. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ Grant Thornton LLP
-----------------------
Grant Thornton LLP
San Francisco, California
June 16, 2000
<PAGE>
Freesoftwareclub.com, Inc.
(a development stage company)
BALANCE SHEET
March 31, 2000
ASSETS
CURRENT ASSETS
Cash $ 530,302
Due from shareholders 5,748
Prepaid expenses 41,700
-----------
Total current assets 577,750
===========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts payable $ 16,825
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' EQUITY
Common stock, $.001 par value; authorized 100,000,000
shares; issued and outstanding, 16,947,500 shares 16,948
Additional paid-in-capital 826,058
Deficit accumulated during development stage (282,081)
----------
Total stockholders' equity 560,925
----------
$ 577,750
==========
See accompanying notes to financial statements.
<PAGE>
Freesoftwareclub.com, Inc.
(a development stage company)
STATEMENT OF OPERATIONS
From April 15, 1999 (date of inception)
to March 31, 2000
Net revenues $ -
Operating expenses
Website development and maintenance 231,000
General and administrative 41,981
Other 8,300
-----------
Total operating expenses 281,281
-----------
Loss from operations before income taxes (281,281)
Income taxes 800
------------
NET LOSS $ (282,081)
============
Net loss per share - basic and diluted $ (0.03)
============
Weighted average shares outstanding 9,565,000
============
See accompanying notes to financial statements.
<PAGE>
Freesoftwareclub.com, Inc.
(a development stage company)
STATEMENT OF STOCKHOLDERS' EQUITY
From April 15, 1999 (date of inception)
to March 31, 2000
Deficit
Accumulated
Common Stock Additional During
------------------ Paid In Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
April 15, 1999
Issuance of shares
to founders 5,747,971 $ 5,748 $ - $ - $ 5,748
June 15, 1999
Issuance of shares
for cash 4,252,029 4,252 120,506 - 124,758
March 15, 2000
Conversion of shares
through reverse
acquisition 3,158,000 3,158 (3,158) - -
March 15, 2000
Issuance of
Freesoftwareclub.com,
Inc. common stock in
exchange for common
stock of Sacio, Inc.
upon acquisition 3,289,500 3,290 (3,290) - -
March 24, 2000
Issuance of shares for
cash (net of issuance
costs of $37,500) 433,333 433 612,067 - 612,500
March 24, 2000
Conversion of note
payable into
common stock 66,667 67 99,933 - 100,000
Net loss - - - (282,081) (282,081)
------ ------ ------- ------- -------
16,947,500 $ 16,948 $ 826,058 $(282,081) $ 560,925
========== ====== ======= ======= =======
See accompanying notes to financial statements.
<PAGE>
Freesoftwareclub.com, Inc.
(a development stage company)
STATEMENT OF CASH FLOWS
From April 15, 1999 (date of inception)
to March 31, 2000
Increase (decrease) in cash
Cash flows from operating activities:
Net loss $ (282,081)
Change in assets and liabilities
Prepaid expenses (41,700)
Accounts payable 16,825
-------------
Net cash used in operating activities (306,956)
Cash flows from financing activities:
Proceeds from issuance of common stock 737,258
Proceeds from issuance of note payable 100,000
-------------
Net cash provided by financing activities 837,258
-------------
NET INCREASE IN CASH 530,302
Cash at inception -
-------------
Cash at end of year $ 530,302
=============
Noncash Financing Activities:
In March, 2000, a note payable in the amount of $100,000 was converted
into 66,667 shares of common stock.
See accompanying notes to financial statements.
<PAGE>
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Freesoftwareclub.com, Inc. (the "Company") was incorporated on April 15,
1999 in the State of Nevada. The Company is an on-line membership club
that offers fully licensed software titles to members. The Company charges
members a monthly fee to access the Company's catalog of software offered.
This Company has not commenced commercial operations and therefore is
considered a development stage company.
A summary of significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows:
Reverse Acquisition
In March 2000, Freesoftwareclub.com, Inc., a Nevada corporation, ("FSC.com")
was acquired by Sacio, Inc., a Delaware corporation, ("Sacio") through an
exchange of common stock. Sacio had no significant assets or liabilities at
the acquisition date and had not had any operations for the last three years.
Each share of FSC.com's stock was converted to 1.3158 shares of Sacio's
common stock. After the exchange, the former FSC.com shareholders owned 80%
of the outstanding shares of Sacio. The transaction was accounted for as a
recapitalization of FSC.com; therefore, the financial statements represent
the operations of FSC.com. Concurrent with the acquisition, Sacio changed
its name to Freesoftwareclub.com, Inc.
Segment Reporting
The Company's business is conducted in a single operating segment. The
Company's chief operating decision maker is the Chief Executive Officer who
reviews a single set of financial data that encompasses the Company's entire
operations for the purposes of making operating decisions and assessing
performance.
Income Taxes
Income taxes are accounted for using the asset and liability approach for
financial reporting. The Company recognizes deferred tax liabilities and
assets for the expected future tax consequences of temporary differences
between the financial statement carrying amount and the tax basis of assets
and liabilities. Valuation allowances are established when necessary to
reduce deferred tax assets to the amounts expected to be realized.
Use of Estimates
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required 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, as well as revenues and expenses during the
period. Actual results could differ from those estimates.
Net Loss per Share of Common Stock
Net loss per share is calculated by dividing net loss for the period by the
average numbers of common shares outstanding for the period. The Company
does not have any potentially dilutive securites outstanding which might be
considered dilutive for the purpose of calculating diluted loss per share.
Fair Value of Financial Instruments
The fair value of cash and accounts payable approximates carrying value due
to the short-term nature of such instruments. The fair value of the amounts
due from shareholders cannot be determined as no market exists for such
instruments.
Product Development Costs
Product development costs include expenses incurred by the Company to
maintain, monitor and manage the Company's website. The Company expenses all
costs incurred that related to the planning and post implementation phases of
development. Costs incurred in the development phase are capitalized and
recognized over the product's estimated useful life if the product is
expected to have a useful life beyond one year. As of March 31, 2000, no
costs have been capitalized.
NOTE B - CONTINUING OPERATIONS
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which
contemplate continuation of the Company as a going concern. However,
management expects, absent infusion of capital, to deplete its resources
before the end of 2000. The Company financed its 1999 operations through
issuance of common stock and borrowings. Management is currently considering
various debt and equity alternatives to raise the funds required to continue
operations in the future. The Company's continued existence as a going
concern is ultimately dependent upon its ability to raise additional capital
and/or financing and also the success of future operations.
NOTE C - INCOME TAXES
No provision for Federal and state income taxes has been recorded as the
Company incurred a net operating loss. A reconciliation of the statutory
income tax rate with the Company's effective tax rate from April 15, 1999
(date of inception) to March 31, 2000 is as follows:
2000
------
Statutory rate 34.0%
Nondeductible expenses (0.5)
State income tax (0.2)
Valuation allowance (33.6)
------
(0.3)%
======
The following table sets for the primary components of deferred tax assets
and liabilities at December 31, 2000:
Net operating loss carryforward $114,313
Valuation allowance (114,313)
---------
Net deferred tax assets $ -
=========
As of March 31, 2000, the Company has approximately $277,766 in loss
carryforwards to offset federal and state taxable income in future years,
subject to limitations due to changes in ownership. The Federal loss
carryforwards expire in 2020 and the state loss carryforwards expire
in 2007.
NOTE D - RELATED PARTIES
Certain officers and members of the Board of Directors of the Company are
principals of firms from which Freesoftwareclub.com has contracted for the
majority of its website design, maintenance, marketing, and technical support
during 2000. Under the terms of the agreement, the Company receives website
design and maintenance, consulting and promoting and creative services. The
agreement extends through May 2000. Monthly fees under the terms of the
contract are $15,000. The agreement may be extended on a month-to-month
basis beyond the contract duration. Management intends to extend the
arrangement under its existing terms.
During the period from inception (April 15, 1999) through March 31, 2000,
fees for these services totaled $250,936. At March 31, 2000, the Company has
accounts payable totaling $15,295 to these related companies.
The Company has a receivable of $5,748 for pre-merger shares issued, which
was paid subsequent to year end.
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
There have been no changes in or disagreements with accountants on accounting
and financial disclosure.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position
---- --- --------
Richard Miles 45 Chairman/Director, Secretary and
Treasurer
John Collins 38 Director, President
Rene Pardo 52 Director
James Estill 43 Director
Wendell Nunes 33 Director
Each of the foregoing persons may be deemed a "promoter" of the Company, as
that term is defined in the rules and regulations promulgated under the
Securities and Exchange Act of 1933.
Directors are elected to serve for a period of one year until the next
annual meeting of the stockholders and until their successors have been
elected and qualified. Officers are appointed to serve for one year until
the meeting of the Board of Directors following the next annual meeting of
the stockholders and until their successors have been elected and qualified.
No Executive Officer or Director of the Company has been the subject of any
Order, Judgment, or Decree of any Court of competent jurisdiction, or any
regulatory agency permanently or temporarily enjoining, barring, suspending,
or otherwise limiting him from acting as an investment advisor, underwriter,
broker or dealer in the securities industry, or as an affiliated person,
director, or employee of an investment company, bank, savings and loan
association, or insurance company or from engaging in or continuing any
conduct or practice in connection with any such activity or in connection
with the purchase or sale of any securities.
No Executive Officer or Director of the Company has been convicted in any
criminal proceeding (excluding traffic violations) or is the subject of a
criminal proceeding which is currently pending.
No Executive Officer or Director of the Company is the subject of any
pending legal proceedings.
Resumes of the Officers and Directors are as follow:
Richard Miles - Chairman of the Board, Secretary/Treasurer
Richard is President of Re:Launch, a computer channel integrated
marketing and advertising firm located in Berkeley, California. Under
Richard's direction and leadership, Re:Launch has become one of the
industry's top marketing and sales service agencies.
1990 - present: Founder and President of Re:Launch. Created sales and
marketing consulting firm specializing in technology products. Self-funded
company enjoys revenues of approx. $3,000,000 per year. Marketing and sales
manager behind more than 20 best-selling products. Creative genius behind
the industry's longest running profitable direct mail program. Consultant to
over 50 firms including IBM, Computer Associates, Hitachi, Memorex, Connectix
and many others. Well-respected within the industry as a speaker, columnist
and analyst. Primary author of "The Software Channel Sales Guidebook" used by
over 200 firms including Microsoft, Intuit, IBM, Memorex, and many others.
1986 - 1990: Vice President, Sales & Marketing, Polaroid Magnetics.
Responsible for Polaroid's floppy disk and computer retail channel business.
Responsible for helping to manage a commodity business from loss to profit.
while undergoing intense competition from low cost Far Eastern competitors.
1984 - 1986: Vice President, Sales & Strategic Planning, Schlage
Electronics. Responsible for helping keep this $50MM company in #1 industry
position, introducing new technologies into a VAR / installing dealer network
worldwide. Reported to Division Vice-President for Business Development,
assisting in evaluating new technologies and new acquisitions for this
division of worldwide Ingersoll-Rand.
1980 -1984: President, Adaptive Controls, Inc. Chosen by the Board of
Directors to take over operations for this developer of integrated
electronics controls systems for high-rise office building. Responsible for
increasing sales to premier accounts and nationwide developers, as well as
continuing operations with very tight cash flow. Turned around unprofitable
operations and delivered profits. Negotiated sale of the business to
Ingersoll-Rand, managed the merger of the business into Schlage Electronics
division.
John Collins - Director, President
John Collins joined Re:Launch as a Senior partner in 1991. He was
General Manager for the Re:Launch Channel Sales division and was responsible
for business development, contract negotiation, and customer service with
software publishers and other vendors. He brings 15 years of sales and
marketing leadership to Re:Launch and spearheaded Re:Launch's successful
drive to establish itself as the premiere sales organization for consumer
products in the Computer Retail segment.
As a 10-year computer industry veteran specializing in selling and marketing
computer software, John directed the retail development efforts for over 30
different software developers and publishers as clients, including Computer
Associates, Memorex, Bungie, Micrologic, Software Publishing Corp, and many
others. His expertise, relationships, and knowledge of the computer software
industry has resulted in significant sales growth and success for many
Re:Launch clients.
Prior to joining Re:Launch, John was Regional Sales Manager for Polaroid's
Computer Products division and Product Marketing Manager for Schlage
Electronics. At each position he quickly established profitability by
designing and executing effective marketing plans and by leveraging
distribution channels and solid relationships. John also contributed to the
Software Channel Sales Guidebook as the author of the Selling Skills section.
John has developed great relationships with software distributors including
Ingram Micro, Tech Data, Merisel, and Navarre, GT Interactive. He also has
many contacts with prominent software vendors throughout North America.
Rene Pardo - Director
Rene is currently the Vice President for Business Development for
Online Direct, and is the CEO of NetProfitEtc., Inc. He was the founder
of Lanpar Technologies, and took it to $25 million revenue, going public on
Toronto Stock Exchange raising $13 million.
In 1994, Rene joined Aztech New Media, a software anthology publisher
which was just starting to sell shareware. He brought in financing and
shareholders, in different stages, and established international sales.
Revenues have grown to approx. $10 million Canadian, funded with little
capital.
In Sept. 1997, Rene established and raised financing for ComCentral
Inc. to continue the development of proprietary "Script Agent" software for
enabling the rapid customization and browsing of CD-ROMs (clients include
Compaq, Ziff Davis); and to build internet community tools (chat, homepages,
instant messaging, polling, forums, e-cards etc) to enhance electronic direct
marketing.
James Estill - Director
Jim Estill is the Chief Executive Officer of EMJ DataSystems, Ltd., which is
headquartered in Guelph, Ontario, Canada. EMJ is publicly-owned distributor
of computer products and peripherals. The Company specializes in high
performance products for Apple, Digital Audio/Video, Internetworking, Media
Management, Point-of-Sale, and UNIX. The Company has offices in Vancouver,
Montreal, Winnipeg, and Halifax. It is traded on the Toronto Stock Exchange
under the symbol EMJ.
Wendell A. Nunes - Director
Wendell is a graduate of Simon Frasier University in British Columbia, Canada
within the fields of Finance and Economics. He has spent several years in
the securities brokerage business, and is currently a consultant with several
public and private companies in the high-tech field.
ITEM 10. EXECUTIVE COMPENSATION
The only Executive Officer receiving compensation is John Collins, our
President, who receives a salary of $9,500 per month.
We have contracted with Mr. Anthony V. Pollace to act in the capacity of
our Chief Financial Officer per an agreement that provides payment for his
services at an hourly rate and reimbursement of out-of-pocket costs.
There are no employment or other contractual agreements with any of our
Executive Officers, or any of our other three employees.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information on the ownership of the
Company's voting securities by Officers, Directors, and major shareholders,
as well as those who own beneficially more than five percent of our
common stock through the date of this Form 10-KSB.
Title of Name & Amount & Percent
Class Address Nature of Owner Owned
-------- -------------------------- --------------- -------
Common Richard Miles(1) 4,376,000 25.8%
654 Neilson Street
Berkeley, CA 94707
Common John Collins(2) 2,476,180 15.6%
164 Esmeyer
San Rafael, CA 94903
Common Rene Pardo(3) 4,400,000 26.0%
Common EMJ DataSystems (4) 1,194,820 7.1%
7067 Wellington County Rd, #124
Guelph, ON, Canada N1H 6J3
Total securities held by management
a group 12,447,000 73.4%
-------------------
(1) Mr. Miles is the Chairman of the Board and Secretary/Treasurer of FSC.
(2) Mr. Collins is a Director and President of FSC.
(3) Mr. Pardo is a Director of FSC.
(3) EMJ DataSystems is owned by Mr. James Estill, who is a Director of FSC.
-------------------
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We have in place an agreement with Re: Launch that sets forth the terms and
conditions for their providing a variety of services, including Website
Design and Maintenance, Consulting and Promotion, Creative Services, and
various operational overhead items such as clerical staff, office space,
copiers, etc. The Agreement provides for payment of $15,000 per month to
Re: Launch for this bundle of services. Re: Launch is owned by our Chairman
of the Board and Secretary/Treasurer, Richard Miles. A copy of the Agreement
has been provided as an attachment to this filing.
PART IV
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
A. Reports on Form 8-K:
We filed and 8-K on April 6, 2000 and an 8-K/A on May 24, 2000 related to
and disclosing the requisite information with respect to the merger
between Sacio, Inc. and Freesoftwareclub.com, Inc.
B. Exhibits:
Exhibit Number Description of Document
2.1. Acquisition Agreement and Plan of Reorganization by and among Sacio,
Inc., a Delaware Corporation, and Freesoftwareclub.com, Inc., a
Nevada Corporation (filed as Exhibit A to the Company's PRE14A filed
February 18, 2000 and as Exhibit A to the Company's DEF14A filed
February 29, 2000, incorporated herein by reference).
3.1. Articles of Incorporation of the Company,(filed as Exhibit 3.1 to Form
10SB12G filed March 31, 1999,and incorporated herein by reference).
3.2. By-laws of the Company (filed as Exhibit 3.2 to Form 10SB12 filed March
31, 1999 and incorporated herein by reference).
10.1. Marketing Services Agreement: Web Site Design, Creative Service, and
Consulting, dated May 1, 1999, by and between Re:Launch and
Freesoftwareclub.com, Inc.
10.2. Programming Services Agreement: Web Site Development and Maintenance
Agreement, dated May 1, 1999, by and between Active Threads and
Freesoftwareclub.com, Inc.
27.1. Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
DATE: July 14, 2000 Freesoftwareclub.com, Inc.
/s/ John Collins
-----------------
President, Director
/s/ Richard Miles
-----------------
Secretary/Treasurer,
Chairman of the Board
