SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Amendment No. 1)
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number 0-28452
Millennium Software, Inc.
Formerly "Legal Protection Services Inc."
(Exact name of registrant as specified in its charter)
Nevada 93-1206546
--------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer identification
incorporation or organization) number)
2950 E. Flamingo, Suite. G, Las Vegas, Nevada 89121
---------------------------------------------------
(address of principal executive offices)
Issuer's Telephone Number: (702) 369-9614
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered: n/a
Name of exchange on which each class is to be registered: n/a
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.004 per share
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months ( or 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
At the end of the quarter ending 6/30/2000 there were 7,454,500 issued and
outstanding shares of the registrants common stock.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
The accompanying interim financial statements for the three and six month
periods ended June 30, 2000 and June 30, 1999 have been reviewed by the
Company's auditors (see Independent' Accountants Report)and are derived from the
audited financial statements as of March 31, 2000 and March 31, 1999, and
December 31, 1999 and December 31, 1998.
The financial statements include all adjustments which in the opinion of
management are necessary in order for the financial statements not to be
misleading.
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30,2000 AND
June 30, 1999
(UNAUDITED)
TABLE OF CONTENTS
Page Number
INDEPENDENT ACCOUNTANT'S REPORT......................... 1
FINANCIAL STATEMENT
Balance Sheets................................ 2
Statements of Operations and Deficit
Accumulated During the Development Stage..... 3
Statement of Changes in Stockholders' Equity. 4-5
Statement of Cash Flows....................... 6
Notes to the Financial Statements............. 7-10
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Stockholders
of Millennium Software, Inc.
Las Vegas, Nevada
I have reviewed the financial statements of Millennium Software, Inc, for the
three month and six month periods ended June 30, 2000 and June 30, 1999. These
financial statements are the responsibility of Company's management.
I conducted my review in accordance with standards established by the American
Institute of Certified Public Accountants. A review consists principally of
applying analytical procedures in financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in
scope than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly I do not express such an
opinion.
Based on my review, I am not aware of any material modifications which should be
made to the accompanying financial statements for them to be in conformity with
generally accepted accounting principles established by the American Institute
of Certified Public Accountants.
/s/David Coffey
David Coffey, C.P.A.
Las Vegas, Nevada
July 24, 2000
<PAGE>
UNAUDITED FINANCIAL STATEMENTS
MILLENNIUM SOFTWARE, INC
(A DEVELOPMENT STAGE COMPANY)
JUNE 30, 2000 AND JUNE 30, 1999
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
June 30
-------------------------------
2000 1999
------------ -------------
ASSETS
Cash 3,120 2,884
Accounts receivable 452 0
Computers less accumulated depreciation
of $7,695 and $5,438, respectively 3,585 5,842
------- -------
Total Assets 7,157 8,726
======= =======
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable 2,297 0
Loans from stockholders 70,325 71,376
------- -------
Total Liabilities 72,622 71,376
Stockholders' Equity Common stock,
authorized 25,000,000 shares at
$.004 par value, issued and
outstanding 7,154,500 shares
and 2,041,000 shares, respectively,
after giving effect to a 4 to 1
reverse split
Effective July 30, 1997 28,618 8,164
Additional paid-in capital 132,304 101,623
Deficit accumulated during the
Development stage (226,387) (172,437)
-------- --------
Total Stockholders' Equity (65,465) (62,650)
Total Liabilities and Stockholders'
Equity 7,157 8,726
======== =======
The accompanying notes are an integral part of these financial statements.
-2 -
<PAGE>
<TABLE>
<CAPTION>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
(With Cumulative Figures From Inception)
Three months ended Six months ended
June 30, June 30, From Inception,
---------------------- ------------------ Feb.20, 1996 to
2000 1999 2000 1999 June 30, 2000
-------- -------- ------- -------- ---------------
<S> <C> <C> <C> <C> <C>
Sales income $ 589 $ 0 $ 589 $ 0 $ 589
Cost of sales - distribution 137 0 137 0 137
Cost of sales - royalties 88 0 88 0 88
--------- -------- --------- ------- --------------
Gross Margin 364 0 364 0 364
Expenses
Advertising 1,381 0 1,381 0 8,667
Organizational expenses 0 0 0 0 1,000
Auto expenses 0 0 0 0 2,416
Computer expenses 300 10 300 0 4,285
Consulting 0 0 0 0 1,000
Depreciation 564 564 1,128 1,128 7,695
Research and development 0 0 16,956 0 19,299
Internet expenses 1,771 0 2,837 2,843 15,638
Legal and professional fees 5,260 0 5,840 0 69,509
Office expenses 0 0 0 446 4,802
Telephone 476 0 476 1,991 5,276
Travel, meals, and lodgings 0 4,657 0 27,373 87,164
--------- --------- --------- -------- --------------
Total expenses 9,752 5,231 28,918 33,791 226,751
Net loss (9,388) (5,231) (28,554) (33,791) (226,367)
=========
Retained earnings, beginning
of period $ (216,999) (167,206) (197,833) (138,646)
---------- ---------- --------- --------
Deficit accumulated during
the development stage $ (226,387) $(172,437) $ (226,387) (172,437)
========== ========== ========= =========
Earnings (loss) per share,
after giving effect to a
4 to 1 reverse split
effective July 30, 1997:
Net loss, assuming
no dilution $ 0.00 $ 0.00 $ 0.00 $ (0.02) $ (0.09)
========== ========= ======== ========= =========
Net loss, assuming full
Dilution $ 0.00 $ 0.00 $ 0.00 $ (0.02) $ (0.08)
========== ========= ======== ========= =========
Weighted average shares,
no dilution 7,154,500 2,036,667 6,469,167 2,036,000 2,659,779
========== ========= ========= ========= =========
Weighted average shares,
fully diluted 7,454,500 2,036,667 6,769,167 2,036,000 2,716,922
========== ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM FEBRUARY 20, 1996, (Date of Inception)
TO JUNE 30, 2000
Common Stock Additional
--------------------- Paid-In
Shares Amount Capital Total
--------- --------- ---------- ---------
Balance February 20, 1996 $ $ $
Issuance of common stock for
services, March, 1996 1,000,000 1,000 0 1,000
Issuance of common stock for
cash, March, 1996 1,000,000 1,000 0 1,000
May, 1996 1,418,000 1,418 69,482 70,900
Less offering costs 0 0 (22,198) (22,198)
Less net loss 0 0 0 (36,787)
---------- --------- ---------
Balance, December 31, 1996 3,418,000 3,418 47,284 13,915
Reverse stock split 4 to 1
on July 30, 1997 (2,563,500) 0 0 0
Issuance of common stock
for cash, August, 1997 1,180,500 3,418 54,303 59,025
Less net loss 0 0 0 (95,614)
--------- --------- --------- ---------
Balance, December 31, 1997 2,035,000 8,140 101,587 (22,674)
Less net loss 0 0 0 (5,198)
--------- --------- --------- ---------
Balance, September 30, 1998 2,035,000 8,140 101,587 (27,872)
Less net loss 0 0 0 (1,047)
--------- --------- --------- ---------
Balance, December 31, 1998 2,035,000 8,140 101,587 (28,919)
Issuance of common stock
for cash, June, 1999 5,000 20 30 50
Issuance of common stock to
offset debt, September, 1999 3,050,000 12,200 18,300 30,500
Issuance of common stock for
services, June 1999 1,000 4 6 10
Issuance of common stock to
offset debt, December, 1999 7,500 30 45 75
Less net loss 0 0 0 (59,187)
--------- -------- --------- --------
Balance, December 31, 1999 5,098,500 $ 20,394 $ 119,968 $ (57,471)
Issuance of common stock
For services, March 2000 6,000 24 36 60
Issuance of common stock to
offset debt, March 2000 2,050,000 8,200 12,300 20,500
Less net loss 0 0 0 (28,554)
--------- --------- --------- --------
Balance, June 30, 2000 7,154,500 28,618 132,304 (65,465)
The accompanying notes are an integral part of these financial statements.
-4 AND 5-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(With Cumulative Figures From Inception)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30, From Inception,
-------------------- ------------------ Feb.20, 1996 to
2000 1999 2000 1999 June 30, 2000
-------- -------- ------- -------- ---------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net Loss $ (9,388) $ (5,231) $ (28,554) $(33,791) $ (226,387)
Non-cash items included in net loss:
Issue of stock for services 0 10 60 10 1,070
Depreciation 564 564 1,128 1,128 7,695
Adjustments to reconcile net loss
to cash used by operating activity:
Increase in accounts receivable (452) 0 (452) 0 (452)
Increase in accounts payable 2,297 0 2,297 0 2,297
Loans from stockholders 9,591 4,607 26,487 32,603 121,400
Stock issued to offset loans 0 0 (20,500) 0 (51,075)
-------- -------- --------- -------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,612 (50) (19,534) (50) (145,452)
CASH FLOWS USED BY
INVESTING ACTIVITIES
Computers 0 0 0 0 11,280
-------- -------- --------- -------- ----------
NET CASH USED BY INVESTING ACTIVITIES 0 0 0 0 11,280
CASH FLOWS PROVIDED BY FINANCING
ACTIVITIES
Issue of stock to offset
loans from stockholders 0 0 20,500 0 51,075
Sale of common stock 0 50 0 50 7,190
Paid-in capital 0 0 0 0 123,785
Less offering costs 0 0 0 0 (22,198)
-------- -------- --------- -------- ---------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 50 20,500 50 159,852
-------- -------- --------- -------- ----------
NET INCREASE IN CASH 2,612 0 966 0 $ 3,120
==========
CASH AT BEGINNING OF PERIOD 508 2,884 2,154 2,884
-------- -------- --------- --------
CASH AT END OF PERIOD $ 3,120 $ 2,884 $ 3,120 $ 2,884
======== ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000, AND JUNE 30, 1999
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on February 20, 1996, under the laws of
the State of Nevada as `Legal Protection Services, Inc.'. The business purpose
was then to sell prepaid legal services. On July 10, 1997, the shareholders
approved a change of name to `Millennium Software, Inc. The Company is engaged
in the development of an Internet-based business and commenced development of
two web sites. The Company commenced marketing software on April 1, 2000.
The Company adopted, effective December, 1998, SOP 98-5 issued by the
Securities & Exchange Commission. SOP 98-5 specifies that all organizational
costs be expensed as incurred. Consequently, the unamortized organizational cost
balance was recognized as a December,1998 expense.
The Company adopted, effective June 30, 2000, SOP 97-2 issued by the
Securities & Exchange Commission. SOP 97-2 requires that, where the right of
product return exists, the Company shall not recognize sales income until the
right of return has fully expired and the sales income is irrevocable.
The Company adopted, effective June 30, 2000, an accounting policy
whereby the per share value of stock issued to employees and others in exchange
for services is based on the value of stockholder equity per share or $0.01 per
share, whichever is the greater share value.
The Company will adopt future accounting policies and procedures based
upon the nature of transactions.
NOTE B COMPUTER EQUIPMENT
Computer equipment is carried at cost. Expenditures for maintenance and
repairs are charged against operations. Renewals and betterments that materially
extend the life of the asset are capitalized. Expenditures for software
development, maintenance, and support of the Internet web site are charged
against operations as incurred.
Depreciation of the equipment is provided using the straight-line
method over the estimated useful lives fro both federal income taxes and
financial reporting. Computer equipment is depreciated over five years.
NOTE C LOANS FROM STOCKHOLDERS
The Company's President, or companies controlled by the Company's
President, have extended loans to the Company at no interest, payable on demand,
for working capital purposes. As of June 30, 2000, the Company had issued
5,107,500 shares of common stock, at $.01 per share in repayment of $51,075 of
its loans from stockholders. The balance due after the issuance of shares was
$70,325 as of June 30, 2000.
- 7-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000, AND June 30, 1999
(continued)
NOTE D EARNINGS (LOSS PER SHARE)
Basic EPS is determined using net income divided by the weighted
average shares outstanding during the period. Diluted EPS is computed by
dividing net income by the weighted average shares outstanding, assuming that
stock options, convertible bonds, or similar instruments have been exercised.
NOTE E STOCK ISSUANCE
In June of 1999, the Company issued 5,000 shares of its common stock at
$.01 per share, for a total of $50 cash. Also in June of 1999, the Company
issued 1,000 shares of its common stock at $.01 per share for a total of $10, in
exchange for services. In March 2000, the Company issued 6,000 shares of its
common stock in exchange for services valued at $.01 per share, a total of $60.
The policy of the Company is that, when it issues stock for services, the
assigned value of the stock is expensed in the Statement of Operations.
In September of 1999, the Company issued 3,000,000 shares of its common
stock and approved the issue of another 50,000 shares, at $.01 per share, a
total of $30,500, in repayment of loans from stockholders. In December of 1999,
the Company issued 7,500 shares of common stock, at $.01 per share for a total
of $75, in repayment of loans from stockholders. In March 2000, the Company
issued 2,050,000 shares of its common stock at $0.01 per share in repayment of
$20,500 of its loans from stockholders.
NOTE F CONTRACTS AND COMMITMENTS
The Company entered into an Electronic Software Distribution Agreement
with Digital River, Inc., Eden Prairie, Minnesota, in March of 1999.The
agreement is for a period of 24 months, expiring March 7, 2001, renewable for
successive one-year terms unless terminated by either party. Under the terms of
the agreement Digital River provides computer facilities to deliver software
purchased through the Company's web site, electronically by downloading or by
delivery of physical CD versions. The Company's web site links directly to the
Digital River order processing web site. The agreement provides for company
- 8-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000, AND June 30, 1999
(continued)
NOTE F CONTRACTS AND COMMITMENTS (continued)
indemnification of Digital River (and its successors) against any and all
liabilities, losses, damages and expenses associated with or incurred as a
result of any claims, action or proceeding instituted against Digital River as a
result of acts or failures to act on the part of the Company. No known current
or future liabilities exist under the terms of the agreement with Digital River
at the date of this financial statement. Digital River is not a related third
party as defined by SFAS 57.
NOTE H RELATED PARTY TRANSACTIONS
In September of 1999 the Company issued 3,000,000 shares of its common
stock and approved the issuance of another 50,000 shares, at $.01 per share, as
a reduction of $30,500 payable to the Company's President or companies
controlled by the Company's President. In December of 1999 the Company issued
another 7,500 shares of its common stock at $.01 per share for a similar debt
reduction of $75. In March of 2000, the Company issued 2,050,000 shares of its
common stock at $.01 per share to repay $20,500 of similar loans from
shareholders.
The Company's President has paid $19,239 for expenses for the
development of web sites on behalf of the Company. This amount is included in
the loans from stockholders balance of $70,325 as of June 30, 2000.
On November 22, 1999, the Company issued an option to its President to acquire
300,000 shares of its common stock at a price of $.01 per share, for $3,000
cash. The terms of the Option are payment in cash within a three-year period
ending November 21, 2002, after which date any outstanding options will be
canceled. The options can be converted into common shares upon full payment in
cash. Any number of options can be converted at any time during the three-year
period. Any and all options which remain unconverted to common shares after
November 21, 2002, and the attached right to convert to common shares will be
canceled.
The Company entered into a Software Licensing Agreement with Abacus
Systems, Ltd., on December 8, 1999, whereby the Company has obtained worldwide
rights to publish, copy distribute, and sub-license reproduction and
distribution rights to software products developed by Abacus in return - 9 -
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2000, AND June 30, 1999
(continued)
NOTE F RELATED PARTY TRANSACTIONS (continued)
for future royalty payments. Abacus Systems, Ltd., is a private company
controlled by the President of the Company. The Company has agreed to pay a 10%
royalty based on net revenues from the sale of software licensed to Abacus to
the Company plus a 5% royalty based on net revenues received from the sale of
software licensed by Abacus to the Company for technical support. The Company
owed Abacus $88 royalties at June 30, 2000, which amount is included in accounts
payables.
NOTE H STOCK OPTION
On November 22, 1999, the Company issued an option to its President to
acquire 300,000 shares of its common stock at a price of $.01 per share, for
$3,000 cash. The terms of the Option are payment in cash within a three year
period ending November 21, 2002, after which date any outstanding options will
be canceled. The options can be converted into common shares upon full payment
in cash. Any number of options can be converted at any time during the
three-year period. Any and all options which remain unconverted to common shares
after November 21, 2002, and the attached right to convert to common shares will
be canceled.
NOTE I SUBSEQUENT EVENTS/ACCOUNTS PAYABLES
The balance of $2,297 accounts payable at June 30, 2000 includes $1,500 for the
balance of fees payable to the Company auditor and bookkeeping services, which
amounts were paid by the Company in July 2000.
- 10 -
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS This statement
includes projections of future results and "forward- looking statements " as
that term is defined in Section 27A of the Securities Act of 1933 as amended
(the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934
as amended (the "Exchange Act").All statements that are included in this
Registration Statement, other than statements of historical fact, are
forward-looking statements. Although Management believes that the expectations
reflected in these forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Important
factors that could cause actual results to differ materially from the
expectations are disclosed in this Statement,
including, without limitation, the risks in conjunction with those
forward-looking statements contained in this Statement.
Overview
--------
The Company made available its two web sites www.mlnsoft.com and
www.checkmy2000.uk.com (the "Web Sites") to the public on April 1, 2000 and
simultaneously made available for purchase the software products licensed from
Abacus Systems Ltd ("Abacus"), CheckMy Banking 2000, CheckMy Loans 2000, CheckMy
Mortgage 2000 and associated Learning Guides (the "Software"). The Company
conducted a limited test market program of the Software in the United States and
United Kingdom markets during the three months April - June 2000. This test
market examined the level of purchases to Web Site visitors and the level of
product returns and software errors or malfunctions ("Errors", if any, reported
by end users.
The Company and Abacus Systems Ltd by mutual agreement amended the Software
License Agreement effective May 1, 2000 by the addition of the following
clauses:
1.2 During the entire period of this License, Abacus agrees not to license any
other company rights to copy, duplicate, sell, distribute the Products, or
sub-license rights to the reproduction and distribution of the Products (the
"Distribution Rights"). On termination of the License, Abacus is free without
restraint to license any other company to the Distribution Rights. 8.1 This
Agreement will continue in effect for one (1) year from December 8, 1999
(Initial Term). This Agreement will be automatically renewed for successive
additional one (1) year terms (each, a Renewal Term) unless terminated by either
party upon thirty (30) days written notice prior to the expiration of the
Initial Term and Renewal Term.
Results of Operations
---------------------
The Company's Web Sites worked to expected specification. Both Web Sites were
available for 99% of available time, and less than 1% of errors were reported
with the links within both Web Sites. The Software made a satisfactory level of
Error free entry into customer's computer systems, with zero product returns and
one software "Error" reported. The services provided by Digital River for order
processing, credit card authorizations and delivery of the Software by
electronic download and in physical CD-ROM form worked without any reported
problems. In total 17 individual Software products were ordered and delivered by
12 customers. 11 orders were obtained from UK purchasers and 6 from US
purchasers. The average customer order value received from single UK purchasers
was $114.93 each; the average order value received from single North American
purchasers was $33.23 each. 46% orders received were delivered by electronic
download and 54% in CD-ROM form. There were no Software returns or claims for
money back received by any customer.
The Company spent $1,381 on direct promotion of its Web Sites during the
three-month period April - June 2000. The ratio of purchases to visitors was
1.0%. The Company received approximately 220 visitors to the Web Sites
originating from the UK and approximately 1,500 visitors originated from the
United States. The 220 visitors from the UK representing just 9% of visitors to
the Web Sites placed 78% of the total order value received.
Liquidity and Capital Resources
-------------------------------
As of June 30th, 2000 the Company's cash balance was $3,120, compared to $508 at
March 31, 2000 and $2,884 at June 30, 1999. The Company has financed its
operations over the last twelve months since July 1st, 1999 solely through the
President providing loan finance for working capital. These loans have amounted
to $50,024 during the last twelve months and $9,591 during the three months
ended June 30, 2000. The balance of loans outstanding owing to the President at
June 30th, 2000 was $70,325 after repayment of $51,075 loans through the issue
of 5,107,500 shares at $0.01 per share to the President in lieu of monetary
repayment of debt.
There is no guarantee that the President will continue to provide loans for the
Company's working capital requirements, and in the event that financing required
for working capital is not available to the Company, the Company will have to
cease trading.
The Company has no definite plans to raise new capital for working capital over
the next twelve months. There are no plans for significant capital equipment
purchases.
The Company has minimal operating expenses. The President and Secretary work for
the Company on a part time basis and draw no remuneration. The President
provides office facilities for the Company to use at no cost.
PLAN OF OPERATION
The Company conducted a limited test market of the Software during the April -
June 2000 period. No firm conclusions can be drawn from the results obtained due
to the small number of visitors to the Web Sites during the test market period.
The Company intends to expand its business by focusing on the UK market for the
next phase of its development. The Company has drawn up specifications for a
Software brochure that it intends to distribute to UK companies by direct postal
mail services during the period July - September 2000. The marketing budget has
been set at $6,000 to mail 10,000 brochures. If this test market achieves 1.00%
success rate ("Success Rate") defined as the total number of buyers divided by
the total number of mail outs dispatched expressed as a percentage, or greater,
the test market will be considered a success. If the Success Rate recorded is
lower than 0.50% of the total number of mail outs, the Company may discontinue
its test marketing program altogether and seek alternative business
opportunities, including, but not limited to, a merger or sale to another
company.
Competition
The Company is an insignificant participant among firms which are engaged
in selling personal and business software. There are many well-established
software companies firms which have significantly greater financial and personal
resources, technical expertise and experience than the Company. In view of the
Company's limited financial resources and management availability, the Company
will continue to be at significant competitive disadvantage vis-a-vis the
Company's competitors.
Y2K ISSUES
The Company did not experience any problems internally or externally when
computer clocks moved forward in to the year 2000.
PART 11
OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
RECENT SALE OF UNREGISTERED SECURITIES
None during the period April - June 2000.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
There have been no matters submitted to a vote of security holders during the
period.
Item 5.
.
Other information
Employees
The Company's only employees at the present time are its officers and
directors, who work for and on behalf of the Company on a part time basis
without remuneration.
MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's stock traded on the OTC bulletin board with the stock symbol MLNS
until February 8th, 2000. Since February 8th, 2000, the Company's common stock
has been quoted in the "Pink Sheets" published daily, with the stock symbol
MLNSE. During the three months period ended June 30, 2000 there was one trade.
<PAGE>
PRICE RANGE OF COMMON STOCK
06/30/2000 12,500 0.25 .125 .125
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 2000, the outstanding shares
of common stock of the company owned of record or beneficially by each person
who owned of record, or was known by the Company to own beneficially, more than
5% of the Company's Common Stock, and the name and share holding of each officer
and director and all officers and directors as a group.
Title of
Class Name & Address Amount & Nature % of class
of beneficial owner of beneficial owner
----------------------------------------------------------------------------
Common Abacus Systems Ltd 3,964,750 53.19
44 Church Street
Hamilton
Bermuda
Common Abacus Corporation Ltd 3,964,750 53.19
Kissack Court
Ramsey
Isle of Man
United Kingdom
Common A.M. and E.J.Bigwood (1)(2)(3) 12,642,000 (4) 84.79
2277 Lawson Avenue
West Vancouver
BC V7V 2E3 Canada
Common Officers and Directors 6,314,750 (1) 84.71
Combined
(1) The President currently has options to purchase 300,000 shares at $.01 which
are exercisable until November 21, 2002, and these options are included in share
totals in the table above.
(2) Mr. Bigwood's spouse, E J Bigwood, is the beneficial owner of 2,007,375
shares of common stock, from her 50% ownership of Abacus Corporation Ltd
(3,964,750 shares) and 50% ownership of General Audit Systems Ltd (50,000
shares). These shares are reported in the beneficial ownership of Mr. Bigwood.
(3) Mrs. Bigwood's spouse, A M Bigwood, is the beneficial owner of 4,307,375
shares of common stock, from 2,000,000 shares held directly, his 50% ownership
of Abacus Corporation Ltd (3,964,750 shares) and 50% ownership of General Audit
Systems Ltd (50,000 shares) and options to buy another 300,000 shares by
November 21, 2002. All these shares are reported in the beneficial ownership of
Mrs. Bigwood.
(4). Mr. James Bigwood, son of Mr. & Mrs. Bigwood owns 12,500 shares. These are
included in the holdings of Mr. & Mrs. Bigwood.
Mr. Bigwood and Mrs. Bigwood each hold 50% ownership of Abacus Corporation Ltd.
Abacus Corporation Ltd controls 96.825% ownership of Abacus Systems Ltd. Abacus
Systems Ltd holds directly 3,964,750 shares of the Company. The beneficial
ownership of 3,964,750 shares by Abacus Corporation Ltd includes all the shares
held by Abacus Systems Ltd.
The fully diluted number of shares issued at June 30, 2000 amounted to 7,454,500
including 300,000 options issued to the President. These shareholdings and
options are used as the basis of calculations of % of class in the table.
The Company's transfer agent at June 30, 2000 is First American Stock Transfer
of Salt Phoenix, Arizona. First American Stock Transfer confirms that as of
06/30/2000, there are approximately 84 shareholders of record.
Mr. and Mrs. Bigwood are husband and wife.
<PAGE>
Item 6. Exhibits and Reports
6.1. Software Licensing Agreement (Amended May 1, 2000)
WHEREAS, Abacus Systems Ltd, of 44 Church Road, Hamilton, Bermuda, ("Abacus")
has developed at its own cost and expense, valuable intellectual and proprietary
software products and User Guides which are known as:
Software
CheckMy Banking 2000
CheckMY Loans 2000
CheckMy Mortgage 2000
CheckMy Banking Deluxe 2000 CheckMY Loans Deluxe 2000 CheckMy
Mortgage Deluxe 2000
CheckMy Banking 2000 User Guide
CheckMY Loans 2000 User Guide
CheckMy Mortgage 2000 User Guide
User Guides
Easy Learning Guide to CheckMy Banking
Easy Learning Guide to CheckMy Loans
Easy Learning Guide to CheckMy Mortgage
NOW: These Products are hereby licensed on the following terms to Millennium
Software, Inc., 2950 East Flamingo Road, Suite G, Las Vegas, Nevada 89121,
United States.
In the following License, Products refers to CheckMy 2000 Software and User
Guides, CheckMy 2000 Software refers to CheckMy 2000 Products which operate on
personal computer systems and CheckMy 2000 User Guides refer to CheckMy 2000
written documentation.
The License as amended consists of 3 (three) pages.
LICENSE
1. The License.
1.1 An exclusive worldwide license (the "License") is hereby granted to
Millennium Software, Inc., ("Millennium") to copy, duplicate, sell, distribute,
and sub- license the Products, which includes the right of Millennium to
sub-license third party distributors to reproduce and distribute the Products by
electronic download and in physical CD-ROM form.
1.2 During the entire period of this License, Abacus agrees not to license any
other company rights to copy, duplicate, sell, distribute the Products, or
sub-license rights to the reproduction and distribution of the Products (the
"Distribution Rights"). On termination of the License, Abacus is free without
restraint to license any other company to the Distribution Rights.
2. Royalties and Fees.
2.1 Millennium hereby acknowledges that full ownership title to the Products
belongs to Abacus.
2.2 Millennium agrees to pay Abacus royalties (herein referred to as
"Royalties") and fee payments ("Fees") based on Net Sales Revenues earned by
Millennium from sale of the Products on the following basis. 2.2.1. A 10%
Royalty of the Net Sales Revenues of CheckMy 2000 Software.
2.2.2. A 10% Royalty of the Net Sales Revenues of CheckMy 2000 Easy Learning
Guides.
2.2.3. A 5% Fee based on Net Sales Revenues of Products for the provision of
technical support for all Products supplied by Abacus.
Net Sales Revenues for the purposed of calculating and determining Royalties and
Fees for the duration of this license will be sales revenues received by
Millennium from the sale of Products, before distributor discounts, less full
provision for credits provided for returned Products and provision for bad debts
which remain unrecovered after 12 months.
<PAGE>
3. Payment of Royalties and Fees.
Royalties and Fees due to Abacus by Millennium under the provisions of this
License will be paid not later than 30 days after the end of each quarterly
period commencing January 1st, 2000.
4. Accounting for Royalties and Fees.
Millennium will provide Abacus with a full accounting of Net Sales Revenues each
month and each quarterly period.
5. Obligations of Abacus.
5.1 Abacus agrees to provide Millennium with the source codes and machine
readable codes of the CheckMy 2000 Software. 5.2 Abacus agrees to provide
Millennium with original versions of Easy Learning Guides for duplication. 5.4
Abacus agrees to provide continuing technical support for the Products.
6. Rights to examine company records
Abacus, and its representatives, are granted unrestricted rights under this
License agreement to inspect the books, records and accounts of Millennium on
demand, to establish a correct accounting for Royalties and fees due to Abacus.
7. Confidentiality. Millennium by signing this License, agrees to keep
confidential, all proprietary knowledge acquired about the Products, promises
not to divulge any such knowledge to any third party unless prior written
consent of Abacus and its representatives is provided. Failure to abide by these
confidentiality rules will cause an immediate cancellation of the License.
8. Term and Termination of License
8.1 This Agreement will continue in effect for one (1) year from December 8,
1999 (Initial Term). This Agreement will be automatically renewed for successive
additional one (1) year terms (each, a Renewal Term) unless terminated by either
party upon thirty (30) days written notice prior to the expiration of the
Initial Term and Renewal Term.
8.2 Abacus may terminate the License, at its sole discretion, if Royalty and Fee
payments due to Abacus, or any part thereof, become 120 days or more overdue.
8.3 Abacus may terminate the License, at its sole discretion, if management
control of Millennium changes from the current arrangements.
8.4 Millennium may terminate the License, at its sole discretion, by giving 120
days written notice to Abacus.
8.5 The License will be terminated immediately upon written notice by Abacus if
the confidentiality provisions contained in section 7 are breached by
Millennium.
8.6 On termination of the License, Millennium will return to Abacus all source
codes, CD-R duplication disks, all CD-ROM copies of CheckMy 2000 Software
together with all copies of the Learning Guides in its possession, and all other
materials associated with the Products.
The effective date of this amended License is 1 May, 2000.
Signed by Abacus Systems, Ltd. Signed by Millennium Software, Inc.
/s/ Anthony Bigwood /s/ Anthony Bigwood
A.M. Bigwood/Director A.M. Bigwood/President
1st of May, 2000 1st of May, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MILLENNIUM SOFTWARE,INC
August 11, 2000 By: /s/ Anthony M Bigwood
------------------------
Anthony M Bigwood
President
