U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
MERCURY SOFTWARE
(Name of Small Business Issuer in its Charter)
Nevada 52-1146119
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
827 State Street, Suite 26
Santa Barbara, CA 93101
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (805)899-1299
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title of each class to be so registered
Common Stock
Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 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
----- -----
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB. [ ]
The issuer's revenues for the Fiscal Year ended December 31, 1999 were $0 The
aggregate market value of the voting stock (which consists solely of shares of
Common Stock) held by non-affiliates of the issuer as of December 31, 1999,
computed by reference to the issuer's shareholder's list as composed by the
issuer's transfer agent at January 25, 2000, of 197,100 on such date, is
approximately $197,100.
As at December 31, 1999, there were 1,163,648 shares of the issuer's common
stock outstanding.
Transitional Small Business Disclosure Format (check one) Yes No X
----- -----
PART 1
- ------
Statements contained in the annual report that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ materially
from estimated results. Such risks and uncertainties are detailed in filings
with the Securities and Exchange Commission, including without limitation in
Item 1. "BUSINESS" and Item 6 "MANAGEMENT'S DISCUSSION AND DESCRIPTION OR PLAN
OF OPERATION" below.
ITEM 1. DESCRIPTION OF BUSINESS
A. IN GENERAL.
Mercury Software (the "Company"), a Nevada Corporation, was incorporated on
January 29, 1997. The Company is a development stage company, engaged in the
business of software sales through its fully operational e commerce site on the
Internet. software. The Company's plan is to further develop its Internet web
site, www.internetsoftwaresales.com, and to provide after market support by
local support teams of computer and software technicians and personnel. The
Company has hired a web site designer with experience not only web site
development but also wholesale buying and retail sales of software. The
Company's plan is to become the leading seller of consumer related software on
the Internet.
Government approval is not necessary for the Company's business, and government
regulations have no or only a negligible effect on their respective businesses.
The Company has not booked any significant research and development costs and
therefor do not expect to pass any of those costs to customers. And has no
product development or research and development costs.
The Company's mailing address is 827 State Street, Suite 26, Santa Barbara, CA
93101. The telephone number of its principal executive office is (805)
899-1299.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's
expectation of results and other forward-looking statements contained in this
registration statement involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those expected
are the following: business conditions and general economic conditions;
competitive factors, such as pricing and marketing efforts; and the pace and
success of product research and development. These and other factors may cause
expectations to differ.
THE INDUSTRY
The Internet industry is a young industry, but one of the fastest growing
industries in the country. The Company has seen a market niche in providing
computer software and hardware sales, coupled with local aftermarket support, as
opposed to an Internet sale that never involves the prospect of human contact,
if the customer has a problem or a question.
MARKETING
The Company is developing an Internet web site with full e commerce
capabilities, which will offer the company's products for sale to the Internet
consumer. In addition, the Company will promote its web site and its products by
conventional advertising and marketing. With the proceeds of this offering, the
Company plans to hire a sales force and offer "multi-level marketing" incentives
for sales.
To help achieve its sales goals, the Company plans to implement an aggressive
online marketing campaign. The objective will be to name awareness for the
Company in the online community and to continually acquire new visitors to its
Web site. One of the best ways to attract this target audience is to achieve
high visibility in the places where prospective customers are likely to be
browsing. The Company's online campaign will target sites that generate high
traffic from Internet users who fit the Company's customer profile. In order to
create this market presence and increase customer awareness, the Company intends
to promote its Web site on the most effective search engines, directories and
promotional sites the Internet offers. However, the Company has not yet
developed its Web site, and there can be no assurance that it will implement
these programs. The programs to establish visibility and increase traffic to
the web site include directory submissions to make sure the company is listed in
the top five listings on the major search engines such as Yahoo, America Online,
Excite, Infoseek, HotBot, AltaVista, and Lycos, when a potential visitor types
in key words related to software sales. Of course, there can be no assurance
that the Company can obtain such a status, but it will continually update its
submissions to search engines to keep them current and will update its site
weekly. The Company will review its site data to optimize its listing. Once
the site data has been perfected, the Company's site will be submitted to the
top 75 search engines and promotional sites.
While listing a Web site with the search engines and promotional sites is a high
priority for the foundation of the Company's Internet program, targeted links
with sites of similar interest is another powerful method of obtaining visitors
that are interested in the Company's site. The Company will search for sites of
similar interest where it is likely to find its target audience to place
targeted links. These links will increase targeted traffic to the Company's Web
site.
The Company intends to design a professional banner and place it with various
sites on a "reciprocal" basis, at no charge to the Company. The Company also
plans to purchase online ad banners on highly trafficked Web sites that appeal
to the Company's target audience. The Company will work with a nationally
recognized media buying firm to research the sites that are regularly visited by
prospective customers in order to design and to execute an online advertising
campaign on a cost-per-lead or similar direct response basis.
Online communities such as Mailing Lists, Newsgroups, and Online Service Forums
tend to be very successful in driving traffic to sites as Internet surfers use
these communities to get advice from their peers. The Company will work with a
firm to seed messages about its offerings in the various online communities that
are visited by its target audience. Companies specializing in Community
Discussion Seeding include Word of Net Promotions, Webpromote and Agency.
Targeted e-mail announcements with information about the Company's products and
services will be sent to individuals who have expressed an interest in receiving
information within targeted categories. These individuals have voluntarily
signed up to receive these e-mail messages about specific topics and are more
likely to read them. Response rates are expected to average between 5% to 10%.
These efforts will results in Company Web site visits by these individuals
because they have an interest in the Company's products and services and can
click-through Hyperlinks created in the Company's e-mail announcement. Each
e-mail message will contain a header that specifies that the e-mail was sent to
the recipient because they had subscribed to a particular service.
The Company expects to maintain a clean corporate image by practicing
"etiquette" when sending e-mail messages. In order to differentiate between
e-mail messages that are voluntarily requested and true "spamming" from
unwelcome sources, the Company plans to only send targeted e mail to those
individuals who have voluntarily requested to receive such announcements, and
always give the participants the option to remove themselves from the e mail
lists.
The Company intends to announce its products and services on the Web in press
releases. Favorable articles or editorial pieces about the Company's Web site
can generate tremendous visibility and opportunity to sell its products and
services. The Company will e-mail its press releases to targeted publications
selected from a database of over 30,000 media resources. Press releases can be
distributed within 72 hours.
THE PRODUCTS
The Company offers a full line of consumer oriented computer software
manufactured by others.
PATENTS
The Company holds no patents for its products. The Company is the registered
owner of the Internet domain name, www.internetsoftwaresales.com.
COMPETITION
The business of providing retail computer software sales is one of intense
competition. Other companies making Internet software sales and other companies
with one or more affiliate or retail locations have financial resources superior
to the Company, so there can be no assurance that the Company's projected income
will not be affected by its competition. There are also many other companies
with greater financial resources that the Company who offer computer sales on
the Internet. However, the Company feels it is able to compete adequately with
these other companies, by maintaining and updating its website to insure that it
receives recognition from the Internet search engines on an ongoing basis, and
from specializing in the niche of software used in the medical and legal fields.
However, there can be no assurance that companies with greater buying power will
be able to undercut the Company's pricing structure.
GOVERNMENT REGULATION
Government approval is not necessary for the Company's business, and government
regulations have no effect or a negligible effect on its business.
EMPLOYEES
The Company presently employs two employees, the President, Jeffrey Volpe, who
devotes his part time efforts to the Company, and a computer consultant, web
site designer and software buyer, who devotes his part time efforts to the
Company.
ITEM 2. DESCRIPTION OF PROPERTY
The Company rents professional offices from its attorney, Kenneth G. Eade, on a
month to month basis, pursuant to an oral agreement. The Company has no other
property, other than office equipment. The Company owns its domain name to its
web site, www.internetsoftwaresales.com.
ITEM 3. LEGAL PROCEEDINGS
The Company is not subject to any litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.
PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's common stock is not listed or quoted at the present time, and
there is no present public market for the Company's common stock. The Company
has obtained a market maker who has filed a form 211 with the National
Association of Securities Dealers to quote the Company's securities on the NASD
OTC Bulletin Board, but there can be no assurance that the Company's stock will
be quoted on the NASD OTC Bulletin Board.
The Company has not paid any cash dividends since its inception and does not
contemplate paying any in the foreseeable future. It is anticipated that
earnings, if any, will be retained for the operation of the Company's business.
PENNY STOCK STATUS
If and when it creates a market for its common stock, the Company's common
stock is a "penny stock," as the term is defined by Rule 3a51-1 of the
Securities Exchange Act of 1934. This makes it subject to reporting,
disclosure and other rules imposed on broker-dealers by the Securities and
Exchange Commission requiring brokers and dealers to do the following in
connection with transactions in penny stocks:
1. Prior to the transaction, to approve the person's account for
transactions in penny stocks by obtaining information from the person regarding
his or her financial situation, investment experience and objectives, to
reasonably determine based on that information that transactions in penny
stocks are suitable for the person, and that the person has sufficient
knowledge and experience in financial matters that the person or his or her
independent advisor reasonably may be expected to be capable of evaluating the
risks of transactions in penny stocks. In addition, the broker or dealer must
deliver to the person a written statement setting forth the basis for the
determination and advising in highlighted format that it is unlawful for the
broker or dealer to effect a transaction in a penny stock unless the broker or
dealer has received, prior to the transaction, a written agreement from the
person. Further, the broker or dealer must receive a manually signed and dated
written agreement from the person in order to effectuate any transactions is a
penny stock.
2. Prior to the transaction, the broker or dealer must disclose to the
customer the inside bid quotation for the penny stock and, if there is no
inside bid quotation or inside offer quotation, he or she must disclose the
offer price for the security transacted for a customer on a principal basis
unless exempt from doing so under the rules.
3. Prior to the transaction, the broker or dealer must disclose the
aggregate amount of compensation received or to be received by the broker or
dealer in connection with the transaction, and the aggregate amount of cash
compensation received or to be received by any associated person of the broker
dealer, other than a person whose function in solely clerical or ministerial.
4. The broker or dealer who has effected sales of penny stock to a
customer, unless exempted by the rules, is required to send to the customer a
written statement containing the identity and number of shares or units of each
such security and the estimated market value of the security. The imposition
of these reporting and disclosure requirements on a broker or dealer make it
unlawful for the broker or dealer to effect transactions in penny stocks on
behalf of customers. Brokers or dealers may be discouraged from dealing in
penny stocks, due to the additional time, responsibility involved, and, as a
result, this may have a deleterious effect on the market for the company's
stock.
(1) The above quotations reflect inter-dealer prices, without retail mark up,
mark down or commission and may not represent actual transactions.
(2) Source of information: Stockmaster Stock Quotation Service
(Stockmaster.com) and Freerealtime.com, NASD Bulletin Board.
SECURITY HOLDERS
The approximate number of record holders of shares of the common stock of the
Company outstanding as of December 31, 1999 was 30.
DIVIDENDS
No dividends have been declared or paid on the Company's common stock.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PLAN OF OPERATIONS
The Company is engaged in the business of software sales and computer services.
The Company's plan is to further develop and promote its Internet web site and
offer discount sales of software to the public, with after market support by
local support teams of computer and software technicians and personnel. The
Company has financed its operations to date through the sale of its securities.
During the next twelve months, the Company plans to satisfy its cash
requirements by additional equity financing. The Company has no current
material commitments. The Company intends to undertake a subsequent private
placement of its common stock in order to raise future development and
operating capital. The Company depends upon capital to be derived from future
financing activities such as subsequent offerings of its stock. There can be no
assurance that the Company will be successful in raising the capital it
requires through the sale of its common stock. The Company believes that its
efforts to raise capital will be assisted greatly by obtaining a quotation of
its common stock on the NASD OTC Bullwtin Board, but there can be no assurance
that it will be successful in obtaining this listing.
The Company has no current material commitments. The Company will seek to
raise capital as a cash reserve, but there can be no assurance that the Company
will be successful in raising the capital it needs through sales of its common
stock.
There is no contemplated product research and development costs the Company
will perform for the next twelve months, because the Company employee who is
designing and promoting the web site has been prepaid with company stock.
There is no expected purchase or sale of any plant or significant equipment,
and there is no expected significant changes in the number of employees
contemplated.
The Company's plan of operations over the next 12 months includes the
implementing its marketing plan by developing its web site, and vigorously
promoting free memberships therein, which will enable members to purchase
software at significant retail discounts. The Company will seek to foster long
term relationships and word of mouth referrals through customer service and will
seek to acquire affiliates through this process to establish affiliated retail
locations. Operators of retail locations will split 50% of gross profits from
all sales and services.
The Company has no current material commitments. The Company has just recently
commenced operations, has no significant revenue, and is dependent upon the
raising of capital through placement of its common stock. There can be no
assurance that the Company will be successful in raising the capital it
requires through the sale of its common stock.
PATENTS
The Company holds no patents for its service-related software. However, the
Company's software is proprietary and is protected by United States copyright
law. The Company owns the domain name www.internetsoftwaresales.com.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's
expectation of results and other forward-looking statements contained in this
registration statement involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those
expected are the following: business conditions and general economic
conditions; competitive factors, such as pricing and marketing efforts; and the
pace and success of product research and development. These and other factors
may cause expectations to differ.
ITEM 7. FINANCIAL STATEMENTS
Information with respect to this item is contained in the financial
statements appearing on Item 13 of this Report. Such information is
incorporated herein by reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in, or disagreements with accountants on accounting and
financial disclosure
for the two most recent fiscal years.
PART III.
---------
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Directors are elected by the shareholders to terms of one year. Officers
serve at the pleasure of the Board of Directors, and serve one year terms
unless removed by the Board prior to their terms.
The Executive Officers of the Company and its subsidiaries, and their ages,
are as follows:
Name Age Position
---------- --- --------
Jeffrey Volpe 43 President, Director,
Agata Gotova 28 Secretary, Treasurer,
Director
Jeffrey Volpe. Mr. Volpe is the President, Chief Executive Officer, and
Director of the Company. He is also the President and Chief Executive Officer
of Innovative Software Technology Inc. He is also the Secretary of
Russian-caviar.com, Russian Imports.com, and FirsTelevision.com. Mr. Volpe has
over twelve years' experience in computer programming, hardware and software.
Mr. Volpe has extensive experience in web page design, , PERL and CGI
scripting, development of software macros for legal support services, as well
as legal research and support.
Agata Gotova. Ms. Gotova is the current Secretary, Chief Financial Officer and
Director of the Company. She is also the President and Director of
Russian-caviar.com, Russian Imports.com, and FirsTelevision.com. She is also
the Secretary of Cinecam Corporation. For the past five years, she has been
engaged in the import and export business, specializing in trade with Russia and
the former Soviet Republics. For a period of four years prior to 1997, Ms.
Gotova resided and did business in Paris, France. She speaks French, English
and Russian fluently. Ms. Gotova was educated at the University, Minister of
International Affairs, Moscow, and Sorbonne University, Paris.
FAMILY RELATIONSHIPS.
There are no family relationships among directors, executive officers or other
persons nominated or chosen by the Company to become officers or executive
officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
The Company is not aware of any material legal proceedings involving any
director, director nominee, promoter or control person including criminal
convictions, pending criminal matters, pending or concluded administrative or
civil proceedings limiting one's participation in the securities or banking
industries, or findings of securities or commodities law violations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended March 31, 1999, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
ITEM 10. EXECUTIVE COMPENSATION.
The Company has made no provisions for cash compensation to its officers and
directors. The only non-cash compensation paid to officers and directors was
the $2,000 compensation paid to the President in 1999, and the only non-cash
compensation paid by the Company is reflected in section in Item 7 below. No
salaries are being paid at the present time, and will not be paid unless and
until there is available cash flow from operations to pay salaries. There were
no grants of options or SAR grants given to any executive officers during the
last fiscal year.
The following table sets forth the cash and non-cash compensation paid by the
Company to its Chief Executive Officer and all other executive officers for
services rendered up to the period ended December 31, 1999.
Annual Compensation
-------------------
Name and Position Salary Bonus Annual Deferred Salary
Jeffrey Volpe, President $2000.00 0 0
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The Company has no long-term incentive plans or awards to report for last
fiscal year other than that which has already been reported.
COMPENSATION OF DIRECTORS
The members of the Company's Board of Directors are reimbursed for actual
expenses incurred in attending Board meetings.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no written contracts or agreements. Employee compensation is set by
the members of the Board of Directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of this
disclosure(1), by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company's directors and executive
officers, and (iii) all directors and executive officers as a group.
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of this
disclosure(1), by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company's directors and executive
officers, and (iii) all directors and executive officers as a group.
Name and Address Number of Shares Percentage Owned
---------------- ---------------- ----------------
Agata Gotova(2) 705,000 60.59%
827 State Street
Santa Barbara, CA 93101
Jeffrey Volpe 100,000 8.59%
P.O. 2132
Ventura, CA 93002
Richard Tearle 75,000 6.44%
1216 State Street #305
Santa Barbara, CA 93101
Officers and Directors 880,000 75.62%
as a Group
------------
(1) Table is based on current outstanding shares of 1,163,648.
(2) Agata Gotova is the wife of the Company's attorney, Kenneth G. Eade.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's founders, or promoters, are Agata Gotova and Jeffrey Volpe. The
Company rents its offices from its attorney, Kenneth G. Eade, on a month to
month basis on an arms length basis for an insignificant amount of monthly
rental.
On March 1, 1999, the Company issued 100,000 shares to Jeffrey Volpe in
exchange for services, and 900,000 shares to Agata Gotova in exchange for
organizational costs. These shares were issued without registration pursuant
to an exemption from registration contained within Section 4(2) of the
Securities Act of 1933, to sophisticated investors who had full access to
company financial and other information.
On April 6, 1999, the Company issued 102,100 shares of common stock in a
Regulation D Rule 504 offering to 22 individuals, in exchange for $2200.00 in
gross offering proceeds.
There have been no other transactions since the beginning of fiscal year 1998,
or any currently proposed transactions, or series of similar transactions, to
which the Company was or is to be a party, in which the amount involved exceeds
$60,000, and in which any of the officers, or directors, or holders of over 5%
of the Company's stock have or will have any direct or indirect material
interest. The Company does not currently have any policy toward entering into
any future transactions with related parties.
ITEM 13. INDEX TO EXHIBITS AND REPORTS ON FORM 8-K
(a) Financial Statements (included in Part II of this Report):
Report of Independent Certified Public Accountant
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Cash Flows
Statements of Stockholder's Equity
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. Description
----------- -----------
Item 13. FINANCIAL STATEMENTS
Report of Independent Certified Public Accountant dated February 29, 2000
Financial Statements
Balance Sheets
Statement of Loss and Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Financial Statements
ROGELIO G. CASTRO
Certified Public Accountant
REPORT OF INDEPENDENT AUDITOR
To the Shareholders and Board of Directors
Mercury Software
I have audited the accompanying balance sheets of Mercury Software (A
Development Stage Company) as of December 31, 1999 and December 31, 1998 and
the related statements of income, stockholders' equity, and cash flows for the
year ended December 31, 1999 and the year then ended. 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 I 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 our
opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mercury Software A Development
Stage Company) at December 31, 1999 and December 31, 1998, and the results of
operations and cash flows for the year period January 29, 1997 (inception)
through December 31, 1999, in conformity with generally accepted accounting
principles.
Oxnard, California
/s/ Rogelio G. Castro
November 4, 1999
[CAPTION]
Mercury Software
(A Development Stage Company)
BALANCE SHEET
AS OF DECEMBER 31, 1999 AND DECEMBER 31, 1998
December 31 December 31
1999 1998
ASSETS
Current Assets:
Cash $ - $ -
Total Current Assets ------- ------
- -
------- ------
TOTAL ASSETS $ - $ -
______ _______
------ -------
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Total Current Liabilities $ 185 $ 185
------ ------
Stockholders' Equity:
Common stocks, $.001 par value
Authorized shares - 25,000,000
Issued and outstanding shares
1,077,000 issued and outstanding 1,077 975
Paid in capital - -
Deficit accumulated during
development stage ( 1,262) (1,160)
------- -------
Total Stockholders' Equity (185) ( 185)
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ - $ -
------- -------
$ - $ -
_______ _______
------- -------
[CAPTION]
Mercury Software
(A Development Stage Company)
STATEMENT OF INCOME FOR THE YEAR ENDED
DECEMBER 31, 1999 AND FOR THE YEAR
ENDED DECEMBER 31, 1998 AND FROM MAY 27, 1998
(INCEPTION) THROUGH DECEMBER 31, 1999
Cumulative
During
Development December 31 December 31
Stage 1999 1998
Income
Sales $ -0- -0- -0-
----- -------- --------
Total Income - - -
----- -------- --------
Expenses:
General & Administrative Expenses 1,262 102 -
------- --------- --------
Total Expenses 1,262 102 -
------- --------- --------
Loss per common share ( 0.00) - -
======== ======= ======
[CAPTION]
Mercury Software
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1998
AND FOR THE YEAR ENDED DECEMBER 31, 1998
AND FROM JANUARY 29, 1997 (INCEPTION) THROUGH
DECEMBER 31, 1999
Cumulative
During
Development December 31 December 31
Stage 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ ( 1,262) $ ( 102) $ -
Adjustments to reconcile
net loss to net cash provided by
operating activities:
Stocks issued for services 1,262 102 -
-------- -------- -----
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES - -
- -------- -------- -----
INCREASE IN CASH - -
-
-------- -------- -----
INCREASE IN CASH - - -
BEGINNING CASH -0- 1,000 -
------- ----- ------
ENDING CASH $ - - -
======= ===== ======
[CAPTION]
Mercury Software
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FROM JANUARY 29, 1998 (INCEPTION)
THROUGH DECEMBER 31, 1999
Common Accumulated
Shares Stock @ Retained
Outstanding Par Value Deficit
----------- ---------- -------
Balance at January 29, 1997
(Inception)
Stocks issued for services 975,000 $ 975
Net loss - January 29, 1997
(inception) through
December 31, 1997 $ (1,160)
--------- -------- -------
Balance at December 31, 1997 975,000 975 (1,160)
--------- -------- -------
Balance at December 31, 1998 975,000 975 (1,160)
Stocks Issued for Cash 102,100 102
Net Loss December 31, 1999 (102)
-------- ----- ------
-------- ----- ------ -------
Balance at December 31, 1999 1,077,100 $1,077 $ ( 1,262)
========= ===== ======= =======
[CAPTION]
Mercury Software
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF THE BUSINESS
Mercury Software (the Company) was incorporated under the laws of the state of
Nevada on January 29, 1997. The purpose for which the Corporation is organized
is to engage in any lawful act or activity for which a corporation may be
organized under the General Corporation Law of the State of Nevada including,
without limitation, to provide sales of computer related software and related
services. The Company has been in the development stage since its formation on
January 29, 1997. Planned principal operations have not commenced since then.
There were no significant activities from its inception date through December
31, 1999.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the goods are shipped to the customers.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash equivalents.
The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average number
of shares outstanding at the dates of the financial statements. Fully Diluted
Earnings Per Shares shall be shown on stock options and other convertible
issues that may be exercised within ten years of the financial statement dates.
E. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Item 14. EXHIBITS, FINANCIAL STATEMENTS
14(a) Report of Independent Certified Public Accountant February 29, 2000
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Stockholder's Equity
Statements of Cash Flows
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. D E S C R I P T I O N
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3 (a) Articles of Incorporation Mercury Software
3 (b) By-laws Mercury Software
4 (a) Specimen certificate of common stock
10 Other Documents - Not applicable
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
Mercury Software
/s/ Jeffrey Volpe
_____________________________________
JEFFREY VOLPE, President and Director
Date: February 29, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Jeffrey Volpe
_____________________________________
JEFFREY VOLPE, President and Director
Date: February 29, 2000
/S/ Agata Gotova
__________________________________________
AGATA GOTOVA, Secretary/Treasurer/Director
Date: February 29, 2000
EXHIBIT 3(a)
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
ARTICLES OF INCORPORATION
JANUARY 29, 1997
C1799-97
DEAN HELLER
SECRETARY OF STATE
ARTICLES OF INCORPORATION OF MERCURY SOFTWARE
The undersigned, being a natural person of full age and acting as the
incorporator, for the purpose of forming a corporation under the laws of the
State of Nevada, hereby adopts the following Articles of Incorporation and
declares:
FIRST: The name of the corporation (hereinafter referred to as "the
corporation") is:
MERCURY SOFTWARE
SECOND: The place of the principal office of the corporation is 820
South Sixth Street, Suite C, Las Vegas, Nevada 89101.
THIRD: The purpose of the corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of Nevada, other than the banking business, the trust company
business, or the practice of a profession permitted to be incorporated by law.
FOURTH: The amount of total authorized capital stock is Twenty-Five
Million (25,000,000) shares of capital stock, par value $0.001, all of which
are one class, to be designated "Common Stock."
FIFTH: Members of the governing board or this corporation shall be
designated directors, and there shall be at least one (1) director of this
corporation. The number of directors may be changed from time to time by
amendment to the corporation's by-laws. There is one director of this
corporation. The name and address of the first director is: KENNETH G. EADE,
143 South B Street, Oxnard, CA 93030.
SIXTH: No paid up capital stock issued as fully paid up, after the
amount of the subscription price has been paid in is subject to assessment to
pay the debts of the corporation.
SEVENTH: The name and address of the incorporator of this
corporation is:
KENNETH G. EADE, ESQ.
143 South "B" Street, Suite 4
Oxnard, California 93030
EIGHTH: This corporation is to have perpetual existence.
NINTH: There shall be no liability on the part of a director or
officer of this corporation or its shareholders for damages for breach of
fiduciary duty, except for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law, or the payment of dividends in
violation of NRS 78.300.
TENTH: The name and address in this state of the corporation's
resident agent is:
KENNETH G. EADE
820 South Sixth Street, Suite C
Las Vegas, Nevada 89101
IN WITNESS WHEREOF, the undersigned incorporator has executed these
articles of incorporation this 25th day of September, 1996.
STATE OF CALIFORNIA
COUNTY OF VENTURA
I, KENNETH G. EADE, being first duly sworn, depose and say that I am
the person who executed the foregoing Articles of Incorporation, and that the
said Articles of Incorporation are my own act and deed.
Executed at Oxnard, California, this 25th day of September, 1996,
1997.
/s/ KENNETH G. EADE
_______________________________
KENNETH G. EADE
Subscribed and sworn before me, Notary Public of the State of
California this 27th day of January,
1997.
/s/ KIMBERLY COE
________________________________
Notary Public
[SEAL OF NOTARY PUBLIC]
Exhibit 3.3
BY-LAWS OF MERCURY SOFTWARE
ARTICLE I - OFFICES
The office of the Corporation shall be located in the City and State designated
in the Articles of Incorporation. The Corporation may also maintain offices at
such other places within or without the United States as the Board of Directors
may, from time to time determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meetings:
The annual meeting of the shareholders of the Corporation shall be held within
five months after the close of the fiscal year of the Corporation, for the
purpose of electing directors, and transacting such other business as may
properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the shareholders may be called at any time by the Board of
Directors or by the President, and shall be called by the President or the
Secretary at the written request of the holders of ten per cent (10%) of the
shares then outstanding and entitled to vote thereat, or as otherwise required
under the provisions of the Business Corporation Law.
Section 3 - Place of Meetings:
All meetings of shareholders shall be held at the principal office of the
Corporation, or at such other places as shall be designated in the notices or
waives of notice of such meetings.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a President, a
Secretary, a Treasurer, and such other officers, including a Chairman of the
Board of Directors, and one or more Vice Presidents, as the Board of Directors
may from time to time deem advisable. Any officer other than the Chairman of
the Board of Directors may be, but is not required to be, a director of the
Corporation. Any two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of
Directors at the regular annual meeting of the Board following the annual
meeting of shareholders.
(c) Each officer shall hold office until the annual meeting of the Board
of Directors next succeeding his election, and until his successor shall have
been elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such resignation
to the Board of Directors, or to the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of Directors or
by such officer, and the acceptance of such resignation shall not be necessary
to make it effective.
Section 3 - Removal:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these by-laws, or may from time to time be specifically conferred or imposed by
the Board of Directors. The president shall be the chief executive officer of
the Corporation.
ARTICLE V - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing the shares of the Corporation shall be in
such form as shall be adopted by the Board of Directors, and shall be numbered
and registered in the order issued. They shall bear the holder's name and the
number of shares, and shall be signed by (I) the Chairman of the Board of the
Present or a Vice President, and (ii) the Secretary or Treasurer, or any
Assistant Secretary or Assistant Treasurer, and shall bear the corporate seal.
(b) No certificate representing shares shall be issued until the full amount
of consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the
issuance of certificates for fractions of a share which shall entitle the
holder to exercise voting rights, receive dividends and participate in
liquidating distributions, in corporation to the fractional holdings; or it may
authorize the payment in cash of the fair value of fractions of a share as of
the time when those entitled to receive such fractions are determined; or it
may authorize the issuance, subject to such conditions as may be permitted by
law, of scrip in registered or bearer form over the signature of an officer or
agent of the Corporation, exchangeable as therein provided for full shares, but
such scrip shall not entitle the holder to any rights of a shareholder, except
as therein provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the
certificate representing the same. The Corporation may issue a new certificate
in the place of any certificate theretofore issued by it, alleged to have been
lost or destroyed. On production of such evidence of loss or destruction as the
Board of Directors in its discretion may require, the Board of Directors may,
in its discretion, require the owner of the lost or destroyed certificate, or
his legal representatives, to give the Corporation a bond in such sum as the
Board may direct, and with such surety or sureties as may be satisfactory to
the Board, to indemnify the Corporation against any claims, loss, liability or
damage it may suffer on account of the issuance of the new certificate. A new
certificate may be issued without requiring any such evidence or bond when, in
the judgement of the Board of Directors, it is proper so to do.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or agent
of the Corporation shall execute to the Corporation a bond in such sum, and
with such surety or sureties as the Board of Directors may direct, conditioned
upon the faithful performance of his duties to the Corporation, including
responsibility for negligence and for the accounting for all property, funds or
securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other corporation, any
right or power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf of
the Corporation by the President, any Vice President, or such other person as
the Board of Directors may authorize.
ARTICLE VI - DIVIDENDS
Subject to applicable law, dividends may be declared and paid of any funds
available therefor, as often, in such amounts, and at such time or times as the
Board of Directors may determine.
ARTICLE VII-FISCAL YEAR
The fiscal year of the Corporation shall be fixed by the Board of Directors
from time to time, subject to applicable law.
ARTICLE VIII-CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from
time to time by the Board of Directors.
ARTICLE IX - AMENDMENTS
Section 1 - By Shareholders:
All by-laws of the Corporation shall be subject to alteration or repeal, and
new by-laws may be made, by the affirmative vote of shareholders holding of
record in the aggregate at least a majority of the outstanding shares entitled
to vote in the election of directors at any annual or special meeting of
shareholders, provided that the notice or waiver of notice of such meeting shall
have summarized or set forth in full therein, the proposed amendment.
Section 2 -By Directors:
The Board of Directors shall have power to make, adopt, alter, amend and
repeal, from time to time, by-laws of the Corporation; provided, however, that
the shareholders entitled to vote with respect thereto as in this Article IX
above-provided may alter, amend or repeal by-laws made by the Board of
Directors, except that the Board of Directors shall have no power to change the
quorum for meetings of shareholders or the Board of Directors, or to change any
provisions of the by-laws with respect to the removal of directors or the
filling of vacancies in the Board resulting from the removal by the
shareholders. If any by-law regulating an impending election of directors is
adopted, amended or repealed by the Board of Directors, there shall be set
forth in the notice of the next meeting of shareholders for the election of
directors, the by-law so adopted, amended or repealed, together with a concise
statement of the changes made.
Section 3 - Transfers of Shares:
(a) Transfers of shares of the Corporation shall be made on the share records
of the Corporation only by the holder of record thereof, in person or by his
duly authorized attorney, upon surrender for cancellation of the certificate or
certificates representing such shares, with an assignment or power of transfer
endorsed thereon or delivered therewith, duly executed, with such proof of the
authenticity of the signature and of authority to transfer and of payment of
transfer taxes as the Corporation or its agents may require.
(b) The Corporation shall be entitled to treat the holder of record of any
share or shares as the absolute owner thereof for all purposes and,
accordingly, shall not be bound to recognize any legal, equitable or other
claim to, or interest in, such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by law.
Section 4 - Record Date:
In lieu of closing the share records of the Corporation, the Board of Directors
may fix, in advance, a date not exceeding fifty days, or less than ten days, as
the record date for the determination of shareholders entitled to receive
notice of, or to vote at, any meeting of shareholders, or to consent to any
proposal without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividends, or allotment of any rights, or
for the purpose of any other action. If no record date is fixed, the record
date for the determination of shareholders entitled to notice of or to vote at
a meeting of shareholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if no notice is given, the day
on which the meeting is held; the record date for determining shareholders for
any other purpose shall be at the close of business on the day on which the
resolution of the directors relating thereto is adopted. When a determination
of shareholders of record entitled to notice of or to vote at any meeting of
shareholders has been made as provided for herein, such determination shall
apply to any adjournment thereof, unless the directors fix a new record date
for the adjourned meeting.
Section 13 - Committees:
The Board of Directors, by resolution adopted by a majority of the entire
Board, may from time to time designate from among its members an executive
committee and such other committees, and alternate members thereof, as they
deem desirable, each consisting of three or more members, with such powers and
authority (to the extent permitted by law) as may be provided in such
resolution. Each such committee shall serve at the pleasure of the Board.
ARTICLE X - INDEMNITY
(a) Any person made a party to any action, suit or proceeding, by reason of
the fact that he, his testator or intestate representative is or was a
director, officer of employee of the Corporation, or of any Corporation in
which he served as such at the request of the Corporation, shall be indemnified
by the Corporation against the reasonable expenses, including attorney's fees,
actually and necessarily incurred by him in connection with the defense of such
action, suit or proceedings, or in connection with any appeal therein, except
in relation to matters as to which it shall be adjudged in such action, suit or
proceeding, or in connection with any appeal therein that such officer,
director or employee is liable for negligence or misconduct in the performance
of his duties.
(b) The foregoing right of indemnification shall not be deemed exclusive of
any other rights to which any officer or director or employee may be entitled
apart from the provisions of this section.
(c) The amount of indemnity to which any officer or any director may be
entitled shall be fixed by the Board of Directors, except that in any case
where there is no disinterested majority of the Board available, the amount
shall be fixed by arbitration pursuant to the then existing rules of the
American Arbitration Association.
The undersigned incorporator certifies that he has adopted the
foregoing by-laws as the first by- laws of the Corporation.
Dated: January 31, 1997
//s// KENNETH G. EADE
-------------------------
Incorporator
Exhibit 4.1
[DESCRIPTION]SPECIMEN OF COMMON STOCK CERTIFICATE
EXHIBIT
Mercury Software
[________]NUMBER SHARES[________]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
25,000,000 SHARES COMMON STOCK AUTHORIZED, $.001 PAR VALUE
COMMON STOCK CUSIP 589410 10 9
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS CERTIFIES THAT
Is the RECORD HOLDER OF SHARES OF FULLY PAID AND NON-ASSESSABLE
SHARES OF COMMON STOCK OF MERCURY SOFTWARE TRANSFERABLE ON THE BOOKS OF THE
CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS
CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE AND THE SHARES REPRESENTED
HEREBY ARE SUBJECT TO THE LAWS OF THE STATE OF NEVADA, AND TO THE CERTIFICATE
OF INCORPORATION AND BYLAWS OF THE CORPORATION, AS NOW OR HEREAFTER AMENDED.
THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT.
WITNESS the facsimile seal of the Corporation and the signature of its duly
authorized officers.
Dated:
[SEAL OF Mercury Software}
/s/ JEFFREY VOLPE /s/ AGATA GOTOVA
- ----------------------- ---------------------
President Secretary
COUNTERSIGNED
AMERICAN REGISTRAR & TRANSFER CO.
342 E. 900 South
P.O. Box 1798
Salt Lake City, Utah 84110
By: ^^Illegible Signature^^
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____Custodian____
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors
of survivorship and not as Act ________________________
tenants in common (State)
Additional abbreviation may also be used though not in above list.
FOR VALUE RECEIVED, _________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
__________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Shares of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint
__________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated, ---------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
