UNITED STATES
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10SB12G/A
Amendment No.5
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
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
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART 1
------
ITEM 1. DESCRIPTION OF BUSINESS
THE COMPANY
Millennium Software, Inc. (the "Company") was incorporated on February
20th, 1996 as ICS (9614), Inc., with the purpose of establishing a business that
offered consumers pre-paid legal services. On March 5, 1996, the Company
approved a name change to Legal Protection Services, Inc.
The Company was unable to find a suitable vendor to provide pre-paid legal
services, so the Company decided to re-focus its business efforts. In July 1997
the Company changed its name to Millennium Software, Inc., and formulated plans
to engage in the business of computer software marketing and distribution.
From July 1997 to the present, the Company has been successful in acquiring
rights to distribute three new software systems and User Guides described as
CheckMy Banking 2000, CheckMy Loans 2000 and CheckMy Mortgage 2000 (the
"Software"). The Company commenced selling these products in April 2000.
The Company entered into an Electronic Distribution Agreement with Digital
River, Inc., ("Digital River") Eden Prairie, Minnesota on March 8th, 1999.
Digital River provides web-based order processing, credit card authorization
services for the Company. Digital River is currently delivering Software to
customers by electronic download, and in physical CD-ROM form. The agreement
with Digital River is for a period of two years from March 8th, 1999, renewable
by mutual consent. Digital River is an independent third party company (NASDAQ
Symbol DRIV) providing order processing facilities for several thousand software
companies. The Internet site for Digital River, Inc. is located at
http://www.digitalriver.com. Digital River is currently the sole supplier of
credit card order processing and product delivery services for the Company. The
fee levied by Digital River for the services provided is 20% of order value
received from sales of the Software.
The Company entered into a Software Licensing Agreement (the "Licensing
Agreement") with Abacus Systems, Ltd., ("Abacus") on December 8th, 1999,
(amended May 1,2000) whereby the Company has obtained exclusive worldwide rights
to copy, distribute, sell and sub-license reproduction and distribution rights
to the Software developed by Abacus in return for future royalty payments
amounting to 15% in aggregate of net revenues from sale of the Software. The
Licensing Agreement is for a period of one year from December 8, 1999, renewable
by mutual consent. Abacus Systems, Ltd is a company controlled and managed by
the President of the Company. Abacus Systems, Ltd. controls 5,955,750 shares
(79.89%) of the 7,454,500 fully diluted number of shares issued of Company Stock
as of September 11, 2000.
The Company has registered two websites, http://www.mlnsoft.com and
http://www.checkmy2000.uk.com ("Web Sites") which were made available to the
public on April 1, 2000.
-2-
<PAGE>
The Company was in a development stage from its incorporation in February
1996 until March 31, 2000 and did not generate any revenues from its operations
during this period. From April 1, 2000, the Company commenced generating
revenues from sales of the Software. To June 30, 2000, the Company received
orders for Software amounting to $889.
METHODS OF DISTRIBUTION
The Company uses the Internet to market software products and related User
Guides. Consumers who decide to purchase the Software receive Software delivered
via electronic download or on CD-ROMs by standard mail services.
The Company has two Web Sites located at http://www.mlnsoft.com and
http://www.checkmy2000.uk.com. The www.mlnsoft.com site addresses the US and
Canadian markets for the Software, the www.checkmy2000.uk.com site addresses the
UK market for the Software. Both sites are linked to the Digital Rivers order
processing website. The Companies Web Sites were made available to the public on
April 1, 2000 and are currently fully operational and functioning to expected
levels of performance.
The Company incurred costs of $19,299 for the development for its Web Sites
to the most recent accounting date available, June 30, 2000.
The Company promotes its Web Sites through inclusion in leading search
engines, through advertising in web site directories, through seeking
independent editorial review of the Software products and through promoting
Internet linkages leading visitors to the Company's Web Sites.
The Company promotes its Web Sites through expanding its network of third
party Internet sites that lead visitors directly to the Company's Web Sites. The
Company has introduced a commission based sales incentive for Internet marketing
affiliates ("Affiliates") which provides a 30% sales commission on net sales
income earned from buyers that originate from third party Affiliates.
The Company's Web Sites have worked to expected specification. Both Web
Sites were available for 99% of available time since opening on April 1, 2000,
and less than 1% of errors have been reported with the links within both Web
Sites. 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 have worked without any reported problems.
SUPPLIERS
The Company copies, markets, distributes and sub licenses the Software and
User Guides developed and supplied by Abacus Systems Ltd., ("Abacus"). Abacus is
a private Bermuda company controlled by Anthony Bigwood, the President of the
Company. Abacus has 22 other shareholders, none of whom are related to the
President in any way. The Company has insufficient financial resources or
skilled personnel to undertake software development on its own. It has therefore
reached an agreement with Abacus whereby Abacus has developed Software at its
own cost and the Company has acquired the exclusive worldwide rights to copy,
reproduce, distribute and sub-license rights to reproduction and distribution of
the Software in return for payments to Abacus of 10% royalties of net revenue
income received by the Company from sale of Software and User Guides, and a 5%
royalty fee for the provision of technical support to the Company. The
provisions for termination of the Software Licensing Agreement are as follows:
-3-
<PAGE>
1. 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.
2. Abacus may terminate the License, at its sole discretion, if management
control of Millennium changes from the current arrangements.
3. Millennium may terminate this License, at its sole discretion, by giving
120 days written notice to Abacus.
4. The License will be terminated immediately upon written notice by Abacus if
the confidentiality provisions are breached by Millennium.
The License Agreement will continue in effect for one (1) year from December 8,
1999 (Initial Term)and 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.
The confidentiality provisions within the Licensing Agreement are that the
Company 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.
The Company does not engage in software development activities except for
the support and maintenance of its Web Sites. It intends to contract with Abacus
Systems Ltd for the design and development of additional software products to be
provided at Abacus expense. The Company will pay Abacus 15% of net revenue
income received by the Company from sale of these future products.
PRODUCTS
The Company holds the exclusive worldwide marketing rights to three
software products: CheckMy Banking 2000, CheckMy Loans 2000, and CheckMy
Mortgage 2000. All three products are designed for personal and small business
users. The Software runs on Windows 95 or 98 computer systems. CheckMy Banking
2000 provides a software import feature for Quicken QIF files. Quicken
(Copyright: Intuit, Inc., Mountain View) is the leading software product for the
easy and efficient organization of personal and small business financial
records. There are believed to be several million users of Quicken worldwide.
CheckMy Banking 2000 calculates bank charges, interest and cleared and net
balances.
CheckMy Loans 2000 provides a new powerful person loan amortization
management system. The software updates monthly loan balances, interest due and
paid amounts and provides loan reports. It contains 25 software calculators for
various "what-if" possibilities, such as calculating interest savings with loan
consolidation, savings arising from early loan repayments, higher monthly
repayments. The software checks lenders loan interest and loan terms and finds
true values.
CheckMy Mortgage 2000 is a smart mortgage amortization calculator that
contains several advanced new "mortgage comparison" and forecasts of property
value features. The software calculates mortgage amortization schedules,
refinance balances and total mortgage interest costs. The software provides
"compare mortgages" and "refinance" sections which calculate alternative
financial results from different mortgages. The software is aimed at personal
users who wish to keep watch on their mortgage finances. Country settings screen
allows users to select US, Canadian, or UK mortgage calculations routines.
-4-
<PAGE>
COMPETITION
CheckMy 2000 products compete in the worldwide market for personal, and
small business financial software There exists a plethora of companies
developing financial software, many of which have established operations in this
market and have greater financial resources than the Company. The Software is
unproven and completely new. There is no guarantee that the President of the
Company will continue to provide management or financial support the Company.
The Company has insufficient management resources and personnel to compete
effectively in either market. The Company is heavily reliant on its President.
There is a risk that the software may not appeal to personal and business users.
There is a risk of failure of the Web Sites to perform properly.
The worldwide market for personal, and small business financial software
products which run on Windows 95 and 98 computers is extremely competitive and
there are many successful and well established products within this market. We
believe that CheckMy 2000 products are unique and different from these existing
financial products. They contain many new and advanced financial calculations
and reporting powers. The Directors expect to create a new market niche in which
CheckMy 2000 products will compete against current products.
Major competitors in the market for financial software include Intuit, Inc.
(Mountain View, CA), Microsoft Corporation (Redmond, WA) and Sage Computing Ltd
(UK).
The Internet is a competing source of financial software, some of which is
provided free. The increased supply of free financial software on the Internet
may pose a considerable competitive threat to the Company's products.
Several consulting and accounting firms numbering provide bank audit,
mortgage audit and other interest checking services for a fee. These service
providers are a competing source of financial calculations for end users.
SEASONALITY
The Company's proposed business may be affected by a seasonal trend, with
stronger sales in the run up to Christmas period.
EMPLOYEES
The Company has no full-time employees at this time, however, the President
and Secretary of the Company work for and on behalf of the Company part-time
without paid remuneration at present.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF OPERATION
The business objective of the Company during the period from incorporation
until July 1997 was to acquire a small growth company in the network marketing
legal services provision sector.
-5-
<PAGE>
The search for a suitable company continued for 15 months, during which
period discussions were held with several firms. The Company's investigations
failed to find a suitable acquisition candidate and the search in the network
legal services area was discontinued in July 1997.
In 1998, the Company requested the President to develop a business strategy
to enter the fast growing Internet business sector. Several business models of
Internet companies were examined and it was concluded that Internet marketing
software products was potentially promising opportunity. The Company's current
business objectives are to market and distribute Windows 95/98 financial
software products through the Internet.
The Company entered into a Software Licensing Agreement with Abacus
Systems, Ltd., on December 8th, 1999, (amended May 1,2000) whereby the Company
has obtained exclusive worldwide rights to sell, copy, distribute, sub-license
reproduction and distribution rights to Software products developed by Abacus in
return for future royalty payments. The Company has agreed to pay Abacus 10% of
royalties based on net revenues received from the sale of Software licensed by
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
term of the Software License is for 12 months from December 8, 1999, renewable
by mutual consent.
The Company entered into an Electronic Distribution Agreement with Digital
River, Inc, ("Digital River") Eden Prairie, Minnesota on March 8th, 1999.
Digital River provides web based order processing, credit card authorization
services for the Company and delivers the Software to customers by electronic
download, and in physical CD-ROM form. The agreement with Digital River is for a
period of two years from March 8th, 1999, renewable by mutual consent. Digital
River is an independent third party company (NASDAQ Symbol: DRIV) providing
order processing services for several thousands of software companies. The
Internet site for Digital River is located at http://www.digitalriver.com.
Digital River is the sole supplier of credit card based order processing and
product delivery services for the Company.
The Company is capable of delivering the Software in CD-ROM form without
services provided by Digital River, however it is unable to deliver Software by
electronic download without the facilities provided by Digital River or a
similar supplier. Suppliers, such as Cybersource Corporation, Preview Systems,
ShopNow.Com are alternative sources of electronic delivery of the Software. The
Company delivered Software to Digital River in March 2000. Software delivery
from Digital River to customers commenced in April 2000.
-6-
<PAGE>
The terms of the Electronic Distribution Agreement with Digital River
provide that Digital River collect sales revenues from the Software delivered by
them in accounts controlled by them and they deduct 20% of net sales revenues
obtained from End User customers processed by Digital River as a Margin Payment
for their facilities provided on behalf of the Company. The Margin Payment to
the Company is subject to adjustment by Digital River based on Software returns
and refunds paid to End Users. The terms of the agreement are that Digital River
will notify the Company within thirty days after the end of each calendar month
about payments processed during the previous calendar month and will pay any net
balances owing to the Company within the said thirty days.
The Company has sub-licensed its rights to reproduce and distribute the
Software Products to Digital River, Inc.
Clause 16, "Term and Termination" of the agreement with Digital River
contains the following provisions:
This Agreement will continue in effect for two (2) years from the date
hereof March 3rd, 1999 (Initial Term). This Agreement will be automatically
renewed for successive additional one (1) year terms (each, a Renewable Term)
unless terminated by either party upon ninety (90) days written notice prior to
the expiration of the Initial Term or any Renewable Term.
The Agreement may be terminated by a party immediately by written notice to
the other party upon the occurrence of any of the following events: (i) If the
other party ceases to do business, or otherwise substantially terminates its
business operations; (ii) If the other party shall fail to promptly secure or
renew any license registration, permit authorization or approval for the conduct
of its business in the manner contemplated by the agreement or if any such
license, registration, permit, authorization or approval is revoked or suspended
and not reinstated within thirty (30) days; (iii) If the other party materially
breaches any provision of the agreement and fails to fully cure such breach
within thirty (30) days of written notice describing the breach; or (iv) If the
other party becomes insolvent or seeks protection under any bankruptcy laws,
creditors arrangements, composition or comparable proceedings, or if any respect
whatsoever affect a party's obligations to make payments top the other party in
connection with the distribution of Products that occurred prior to the
termination of the "Agreement".
In April 2000, the Company launched the new family of software
products, "CheckMY 2000" developed by Abacus Systems, Ltd. The Software is sold
through the Company's Internet Web Sites.
The Company has inadequate financial resources with which to enter the
market for personal financial software. As of June 30, 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 since 1998 solely through the
President providing loan finance for working capital. These loans have amounted
to $121,400. The balance of loans outstanding owing to the President at June 30,
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. The potential
marketing expenses required to enter the market for personal and business
software substantially exceeds the Companies current cash resources. The Company
does not anticipate any cash requirements for purchase of significant equipment
over the next twelve months. The Company has no definite plans to raise
additional capital during the next twelve months. The Company is currently
solely reliant on the President of the Company continuing to provide interest
free loan finance to maintain the Company's day-to-day operations. The annual
operating expenses before marketing and advertising costs amount to between
$15,000 and $25,000 per annum. Expenses for development of the Company's Web
Site to June 30, 2000, amounting to $19,299 which has been paid for by the
President in full. The Company has no known liabilities except for repayment of
loans provided by the President. Loans provided by the President have been
provided to the Company on an interest free basis, no specific repayment term,
repayable on demand. The Company currently has insufficient cash resources to
repay these loans. During the next twelve months any shortfall in cash
requirements may be provided through interest free loans provided to the Company
by the President, however this is not guaranteed. If the President is unable to
provide loan-bridging finance, the Company may have to discontinue its
operations entirely.
-7-
<PAGE>
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.
Approximately 40% of revenues are re-invested in marketing expenses. The
agreement with Digital River provides for net revenues after deduction of a 20%
distribution payment to Digital River, to be paid 30 days after the close of the
payment month. The Company expects that cash requirement for working capital
will increase substantially as sales volume increases.
There are substantial uncertainties and risks involved with the business
plans of the Company, and added substantial uncertainties and risk whether the
Company's cash resources will be sufficient to meet the demands placed on the
Company. There is substantial uncertainty whether the Company will be able to
generate sufficient revenues to maintain its operations over the next twelve
months without additional capital raised or additional interest free loans from
the president.
The Company had no history of marketing software products to March 2000.
The Company had no history of using a third party such as Digital River to
provide order processing, credit card authorization and delivery services
electronically to March 2000, and there may be substantial risks involved in
delivering products by electronic download to End Users. There may be
substantial risks involved in the ability of Digital River to pay amounts owing
to the Company under the terms of the Electronic Software Distribution
Agreement. Digital River possessed cash resources in excess of $50 million at
December 31, 1998 which may, or may not, be sufficient to continue its
operations for the remaining period of the agreement.
If Digital River is unable to raise additional working capital, the Company
may be at risk from a withdrawal of services by Digital River that would impact
the Company's abilities to deliver products electronically. Other companies such
as Cybersource Corporation, Preview Systems, ShopNow.Com, Inc provide similar
services to Digital River and are alternative sources of delivery services. The
Company is able to deliver product in CD-ROM form without the facilities of
Digital River being available.
There are substantial risks involved in marketing new software products if
the software contains unknown software errors ("Errors") that cause program
failures when in the hands of End Users. The Software may contain several
unknown Errors which may cause product to be returned and sales revenue
reimbursed to the End User. There is a risk of substantial returns if the
Software contains such Errors.
-8-
<PAGE>
There are substantial risks involved in bringing the new Web Sites to
market and in the Company's ability to attract visitors to the Web Site. There
are several hundreds of millions of Web Sites in existence, and many of them
compete strongly in securing prime Search Engine placements and in the amount
spent on marketing expenditures to attract visitors. The Company does not
possess sufficient financial resources to compete effectively in this market.
There are substantial risks involved in relying on Affiliates to bring
buyers to our Web Sites. Affiliates can remove the Company's banner from their
web sites at any time without notice. Such actions will cause sales of the
Software to cease from such sites.
There is no expected significant change in the number of employees during the
year 2000.
Y2K ISSUES
The Company did not experience any problems internally or externally when
computer clocks moved forward in to the year 2000.The Products developed by
Abacus Systems, Ltd., are fully Y2K compliant and have been fully tested to be
able to record financial data using a 4-digit year format (i.e. January 1st,
2000)
To date, we have experienced no technology problems as a result of the Year
2000.
ITEM 3. DESCRIPTION OF PROPERTY
The Company does not own or lease any real property at this time but is
using, without charge, office facilities of its President located at 2277 Lawson
Avenue, West Vancouver, BC, Canada. The telephone number is 604-926-5236.
The Company has registered the web domain name www.mlnsoft.com to market the
CheckMy 2000 software.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 16, 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.
-9-
<PAGE>
Title of Name & Address Amount & Nature % of class
Class of beneficial owner of beneficial owner
-------------------------------------------------------------------------------
Common Abacus Systems Ltd (1) 5,955,750 41.1
44 Church Street
Hamilton
Bermuda
Common A.M.Bigwood (1) 13,388,250 (2)(4) 92.42
2277 Lawson Avenue
West Vancouver
BC V7V 2E3 Canada
Common E.J. Bigwood (1) 13,388,250 (3) 92.42
2277 Lawson Avenue
West Vancouver
BC V7V 2E3 Canada
Common Officers and Directors 13,388,250 92.42
Combined
(1) Abacus Systems Ltd. is owned directly by Abacus Corporation Ltd, Kissack
Court, Ramsey, Isle of Man, Bristish Isles. Mr. Bigwood (50%) and Mrs. Bigwood
(50%) are the direct owners of Abacus Corporation Ltd. At October 16, 2000,
Abacus Corporation Ltd owned 96.825% of Abacus Systems Ltd. Abacus Corporation
Ltd owns nil shares of common stock of the Company held directly. Mr. & Mrs.
Bigwood are the indirect owners of the 5,955,750 shares held directly by Abacus
Systems Ltd through their controlling interest in Abacus Corporation Ltd.
(2) 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.
(3) Mr. Bigwood's spouse, E J Bigwood, is the beneficial owner of 13,388,250
shares of common stock, from her indirect ownership of Abacus Systems Ltd
(5,955,750 shares held directly), ownership of General Audit Systems Ltd (50,000
shares held directly), her 50,000 shares held directly, her beneficial interest
in 300,000 options held by Mr. Bigwood, and 7,032,500 shares for conversion of
debt beneficially owned Mr. Bigwood.
(4) Mrs. Bigwood's spouse, A M Bigwood, is the beneficial owner of 13,388,250
shares of common stock, from his indirect ownership of Abacus Systems Ltd
(5,955,750 shares held directly), ownership of General Audit Systems Ltd (50,000
shares held directly), his beneficial interest in 50,000 shares held directly by
Mrs. Bigwood, and beneficial interest in 7,032,500 shares for conversion of
debt, and options to buy another 300,000 shares by November 21, 2002
A.M Bigwood has the right to demand conversion of the balance of loans advanced
by him, and by companies controlled by him, to the Company, to shares of common
stock at $0.01 per share. The company has agreed to authorize the issue of
shares to Mr. Bigwood for conversion of debt within seven (7) days of receipt of
written demand. At June 30, 2000, the balance of loans advanced to the Company
by Mr. Bigwood was $70,325. Mr. Bigwood has the beneficial ownership of
7,032,500 shares by right of conversion of the $70,325 loan balance outstanding
at June 30, 2000 to shares of common stock within seven (7) days of demand. Mrs.
Bigwood also has beneficial ownership of the said 7,032,500 shares of common
stock by virtue of the spousal relationship between Mr. Bigwood and Mrs.
Bigwood.
The President transferred 2,000,000 shares held in his name to Abacus Systems
Ltd in July 2000 and holds no shares directly. 9,000 shares held by Abacus
Systems Ltd were sold to unrelated third parties in July 2000.
The number of shares issued and outstanding at October 16, 2000, amounted to
7,154,500 shares. This amount excludes 300,000 options issued to the President,
and 7,032,500 shares for debt to be issued to the President on immediate demand.
The 7,154,500 shares together with 300,000 options and 7,032,500 shares for debt
(14,487,000 shares) are used as the basis of & class in the table.
-10-
<PAGE>
CHANGES IN CONTROL
There are currently no arrangements that will result in a change in control
of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table sets forth certain information with respect to each of
the Directors, Executive Officers of the Company, their ages, and all positions
with the company.
Name Age Position
--------------------------------------------------------------------------------
Anthony M. Bigwood 60 President and Director
2277 Lawson Ave.
West Vancouver, BC
Canada V7V 3G3
Elizabeth J. Bigwood 59 Secretary/Treasurer and Director
2277 Lawson Ave.
West Vancouver, BC
Canada, V7V 3G3
--------------------------------------------------------------------------------
Anthony Michael Bigwood B.Sc., PhD., MBA(Sloan). President and Director.
Age 60, British citizen. Dr. Bigwood was educated in Britain where he attended
the University of Bristol studying natural sciences. He continued his studies
after his degree to earn a Ph.D. He was recruited by Unilever as management
trainee and held several management positions in Unilevers chemical division. He
joined the mining finance group Rio Tinto Zinc Corporation as a financial
management consultant and was appointed Director of RTZ Consultants Ltd. within
three years of joining the firm. Dr. Bigwood was selected as "executive of the
year" by RTZ and selected to join the Sloan MBA Program at the London Business
School for one year where he studied banking, finance and management sciences.
On rejoining RTZ he became managing director of RTZ Computer Services, RTZ
Software and Rio Tinto Management Services (Toronto). He left RTZ to start his
own computer company which he ran successfully. He sold his shareholdings after
6 years. Thereafter Dr. Bigwood has continued to provide financial consulting
advisory services and has lead several negotiations with major banks to secure
financing for corporate acquisitions. Dr. Bigwood controls several private
companies including Abacus Corporation, Ltd., (Isle of Man, UK) and Abacus
Systems Ltd (Bermuda) and in addition is President of the following US
companies: Asia & Pacific Mining Ventures, Inc., Mid West Oil & Gas, Inc. and
General Audit Systems, Inc.
Elizabeth J. Bigwood MCSP, Company Secretary and director, age 59, British
citizen. Mrs. Bigwood was educated in Britain where she trained as a
physiotherapy nurse. She has worked in orthopaedic hospitals and children
intensive care hospitals where she specialized in treating spinal deformities
and was responsible for running a special needs clinic for several years. She
has organizational and record keeping skills to which she applies to the
maintenance of company records.
Our executive officers have served since February of 1996. A director's
term of office is ten (10) years, renewable by mutual consent. The next renewal
date is February 1st, 2006.
FAMILY RELATIONSHIPS
Anthony M. Bigwood, President and Director, and Elizabeth J. Bigwood,
Secretary/Treasurer and director, are husband and wife.
-11-
<PAGE>
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
To the best of management's knowledge, during the past five years, no
present or former director or executive officer of the company:
(1) Has filed a petition under federal bankruptcy laws or any state insolvency
law, and a receiver, fiscal agent or similar officer appointed by court for
the business or property or such person, or any partnership in which he was
a general partner at or within two years before the time of such filing, or
any corporation or business association of which he was an executive
officer at or within two years before the time of such filing;
(2) Was convicted in a criminal proceeding or named the subject of a pending
criminal proceeding (excluding traffic violations and other minor
offenses);
(3) Was the subject of any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from otherwise limiting his
involvement in any type of business, securities or banking activities; or
(4) Was found by a court of competent jurisdiction in a civil action, by the
Securities and Exchange Commodity Futures Trading Commission to have
violated any federal or state securities law.
ITEM 6. EXECUTIVE COMPENSATION
Any compensation received by officers or directors of the Company will be
determined from time to time by the Board of Directors. The company is currently
developing a new Internet business venture and has not paid any salaries or
executive compensation. The executive officers and directors will not receive
compensation until operations commence.
Stock Options - The Company granted 300,000 incentive options (the "Options") on
common shares to the President at an exercise price of $.01 per share on
November 22, 1999. The terms of the Options are payment in cash within a 3 year
period ending November 21st, 2002, after which date any outstanding Options will
be cancelled. The options can be converted into common shares upon full payment
in cash. No part payments are allowed. Any number of options may be converted at
any time within the three year period. Any and all options which remain
unconverted to common shares after November 21st, 2002 and the attached right to
convert to common shares will be cancelled.
The value of share holders equity based on the financial statements
prepared by the Company's auditors was -0.01 (negative) per share on December
31st, 1999.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
-------------------------------------------------------------------------------
Number of Securities % of total
Underlying Options/SARs Options/SARs Execise/Base Exp.
Name Granted Granted in 1999 Price($/sh) Date
------- ---------------------- --------------- ----------- --------
Anthony Bigwood 300,000 100% $.01/sh 10/21/02
Market price of common stock at the date of the grant was $0.365.
-12-
<PAGE>
The value of shareholders equity per share based on the financial statements
prepared by the Company's auditors was -$0.01 (negative) on September 30th,
1999.
None of these options have been exercised with the last fiscal year End.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Each of the officers and directors of the Company are engaged in other
businesses, either individually or through partnerships and corporations in
which they have an interest, hold an office or serve on boards of directors.
Certain conflicts of interest may arise between the Company and its officers and
directors. The primary conflict of interest is the amount of time that the
officers are able to devote to the Company as opposed to their other business
ventures. As the Company begins to procure revenues, more time will be devoted
to the Company. Another possible conflict of interest could arise from the fact
that the Company President, Anthony Bigwood, also controls Abacus Systems, Ltd.,
which is the sole supplier of the software products that the Company markets. A
contract exists (attached hereto as exhibit No. 10) which specifies the
relationship and various responsibilities of each party in this matter.
The Company will attempt to resolve any such conflicts of interest in favor
of the Company. The officers and directors of the company are accountable to it
and its shareholders as fiduciaries, which requires that such officers and
directors exercise good faith and integrity in handling the Company's affairs. A
Shareholder may be able to institute legal action on behalf of the Company or on
behalf of itself and all other similarly situated shareholders to recover
damages or for other relief in cases of the resolution of conflicts in any
manner prejudicial to the Company.
Abacus Systems Ltd ("Abacus"), is a private Bermuda company controlled by
Anthony Bigwood, the President of the Company. Abacus has 22 other shareholders,
none of whom are related to the President in any way. The Company has
insufficient financial resources or skilled personnel to undertake software
development on its own. It has therefore reached an agreement with Abacus
whereby Abacus will develop financial software at its own cost and The Company
will copy, reproduce, distribute, sell and sub-license the Software and user
Guides (the "Products") in return for payments to Abacus of 10% royalties of net
revenue income received by the Company from sale of the Software, and a 5%
royalty fee for the provision of technical support to the Company. The
provisions for termination of the Software Licensing Agreement are as follows:
1. 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.
2. Abacus may terminate the License, at its sole discretion, if management
control of Millennium changes from its current arrangements.
3. Millennium may terminate this License, at its sole discretion by giving 120
days written notice to Abacus.
4. The License will be terminated immediately upon written notice by Abacus if
the confidentiality provisions are breached by Millennium.
The Software License Agreement will continue in effect for one (1) year from
December 8, 1999 (Initial Term) and 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.
-13-
<PAGE>
The confidentiality provisions within the License Agreement are that the
Company 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. Abacus will continue to be the exclusive development source of new
software products for the Company while the said licensing agreement is in
effect.
The Company is satisfied that the terms of the License Agreement including
the royalty payments owed to Abacus, are on no less favorable terms to the
Company than terms that could be obtained from unrelated third parties under
similar license and royalty agreements.
The Company does not intend to engage in software development activities
except for the support and maintenance of its website. It intends to contract
with Abacus Systems Ltd for the design and development of additional software
products to be provided at Abacus expense. The Company will pay Abacus 15% of
net revenue income received by the Company from sale of these future products.
In August of 1997 the Company approved a private placement of shares to
Asia Pacific Mining (Bermuda) Ltd., which is controlled by the Company
President. (Note: Asia Pacific Mining (Bermuda) changed its name to Abacus
Systems Ltd., in 1999). 1,180,500 shares at $.05 each were issued to raise
$59,250.
The Company issued 3,000,000 shares, in September 1999, to the President,
Dr. A. M. Bigwood (2,000,000 shares) and Abacus Systems Ltd (1,000,000), a
company controlled by the President, at $0.01 per share, in lieu of monetary
repayment of debt for $30,000 owed by the Company to the President, previously
provided as a shareholder loan. The Company reduced the amount owed to the
President by a corresponding $30,000. The loan has been provided on an interest
free basis, repayable on demand.
The Company approved the issue, in September 1999 of 50,000 shares, in lieu
of monetary repayment of debt to General Audit Systems, Inc., a Company
controlled by the President, for cash payment of $500 by General Audit Systems,
Inc., on behalf of the Company, for part payment of auditing fees of Millennium
Software, Inc to Mr. D Coffey CPA.
The Company granted 300,000 incentive options (the "Options") on common
shares to the President at an exercise price of $.01 per share on November 22,
1999. The terms of the Options are payment in cash within a 3 year period ending
November 21st, 2002, after which date any outstanding Options will be cancelled.
The value of share holders equity based on the financial statements prepared by
the Company's auditors was -$0.01 (negative) per share on September 30th, 1999.
-14-
<PAGE>
The Company approved the issued 7,500 shares, in December 1999, in lieu
of monetary repayment of debt, to Abacus Systems Ltd., a company controlled by
the President, for payment on behalf of the Company, of $75.00 for expenses paid
on behalf of the Company. The 7,500 shares of the Company so issued were
transferred in December 1999 to married children of the President, Richard
Bigwood (2,500 shares), Catherine Coelho (2,500 shares), and 2,500 shares were
transferred to Mr. James Bigwood, son of the President and Mrs. EJ Bigwood.
The Company issued 2,050,000 shares, in March 2000, to Abacus Systems
Ltd, a company controlled by the President, at $0.01 per share as compensation
for $20,500 owed by the Company to the President, previously provided as a
shareholder loan. The Company reduced the amount owed to the President by a
corresponding $20,500. 50,000 shares so issued were transferred in March 2000 to
Mrs. E.J Bigwood, wife of the President.
The Company has received $121,400 interest free loan finance in total
during the since incorporation in 1996 to June 30, 2000 from the President and
companies owned by the President for working capital. $51,075 of the loan
finance had been exchanged for 5,107,500 shares of Company stock in lieu of cash
repayment at June 30, 2000.
The Company owes Mr. Bigwood a balance of $70,325 at June 30, 2000.
The loans provided by Mr. Bigwood have been as follows:
Dates Loans Shares Reduction Loan balance
Advanced Issued in debt 0wing to
By Mr. Bigwood Mr. Bigwood
(1) (2)
----------------------------------------------------------------------------
02/96 - 12/31/97 $37,763 $37,763
01/01/98 - 09/30/98 $ 1,010 $38,773
10/01/98 - 12/31/98 Nil $38,773
01/01/99 - 03/31/99 $27,996 $66,769
04/01/99 - 06/30/99 $ 4,607 $71,376
07/01/99 - 09/30/99 $13,537 3,050,000 $30,500 $54,413
10/01/99 - 12/31/99 $10,000 7,500 $ 75 $64,338
01/01/00 - 03/31/00 $16,896 2,050,000 $20,500 $60,734
04/01/00 - 06/30/00 $ 9,591 $70,325
---------------------------------------------------------------------------
Totals $121,400 5,107,500 $51,075 $70,325
(1) Loans advanced by Mr. Bigwood and private companies controlled by him.
(2) Shares listed in the table have been issued to Mr. Bigwood and to private
companies controlled by him.
The loan agreement is appended as Exhibit 10.3.
The loans are provided on the following basis:
1. The loans are to provide working capital for the Company.
2. The loans are interest free.
3. The loans are repayable on immediate demand in common shares in lieu of
cash.
4. The value of shares issued, and to be issued, in settlement of the said
loans is determined by calculating the value of shareholder equity per
share at the most recently available financial statement, or $0.01 per
share, whichever value is greater.
-15-
<PAGE>
The President has the right to convert the balance of loans advanced by him, and
companies controlled by him, on demand to common shares at $0.01 per share. The
company has agreed to authorize the issue of shares to Mr. Bigwood for
conversion of debt within seven (7) days of receipt of written demand. At June
30, 2000, the balance of loans advanced by the President was $70,325, which will
require the issue of 7,032,500 additional shares to the President when the
outstanding balance of loans is demanded.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 25,000,000 Shares
of Common Stock. The holders of Common Stock (i) have equal ratable rights to
dividends from funds legally available therefore, when, as and if declared by
the Board of Directors of the Company; (ii) are entitled to share ratably in all
of the assets of the Company available for distribution or winding up of affairs
of the Company; (iii) do not have preemptive subscription or conversion rights
and there are no redemption or sinking fund applicable thereto; and (iv) are
entitled to one non-cumulative vote per share, on all matters which shareholders
may vote on at all meetings of shareholders. On December 8th, 1999 there were
approximately 5,091,000 shares outstanding.
NON-CUMULATIVE VOTING
Holders of Shares of Common Stock of the Company do not have cumulative
voting rights which means that the holders of more than 50% of such outstanding
Shares, voting for the election of directors, can elect all of the directors to
be elected, if they so choose, and, in such event, the holders of the remaining
Shares will not be able to elect any of the Company's directors.
PENNY STOCK REGULATION
The Securities Exchange Commission (the "SEC") has adopted rules that
regulate broker dealer practices in connection with transactions in >penny
stocks. Penny stocks generally are equity securities with a price of less than
$5.00 (other than securities registered on certain national securities exchanges
or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange system.) The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document prepared by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with bid and
offer quotations for the penny stock, the compensation of the broker-dealer and
its salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customer's account. In addition,
the penny stock rules require that prior to transaction in a penny stock not
otherwise exempt from such rules, the broker-dealer must make a special written
determination that a penny stock is a suitable investment for the purchase and
receive the purchaser's written agreement to the transaction. These disclosure
requirements may have the effect of reducing the level of trading activity in
any secondary market for a stock that becomes subject to the penny stock rules.
The Company's common stock is subject to the penny stock rules, and accordingly,
investors in this Offering may find it difficult to sell their shares, if at
all.
The Company is not a party to any material pending legal proceeding and, to the
best of its knowledge, no such action by or against the Company has been
threatened. None of the Company's officers, directors, or beneficial owners of
5% or more of the Company's outstanding securities is a party adverse to the
Company nor do any of the foregoing individuals have a material interest adverse
to the Company.
-16-
<PAGE>
PART 11
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTER
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. The Company's common stock trading on the OTC bulletin board under
symbol MLNS.
Date Volume High/Ask Low/Bid Close
--------- ----------- ------------- ------------ ---------
12/05/97 10,200 .60 .25 .25
03/05/98 7,000 .60 .25 .27
07/31/98 14,500 .40 .20 .40
09/30/98 1,000 .30 .30 .30
12/31/98 2,000 .30 .03 .05
03/31/99 3,800 .75 .365 .750
6/30/99 800 .875 .50 .50
09/30/99 3,674 .9375 .365 .365
12/31/99 1,200 .9375 .9375 .9375
03/31/00 500 1.0625 .375 .375
06/30/00 12,500 .250 .125 .125
09/30/00 Nil .250 .125 .125
These quotations are over-the-counter quotations and reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.
The Company's transfer agent, First American Stock Transfer, confirms that as of
10/12/00, there are approximately 86 shareholders of record.
Item 2. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceeding and, to the
best of its knowledge, no such action by or against the Company has been
threatened. None of the Company's officers, directors, or beneficial owners of
5% or more of the Company's outstanding securities is a party adverse to the
Company nor do any of the foregoing individuals have a material interest adverse
to the Company.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
David E. Coffey CPA has been auditor to the Company without interruption from
1996 to the present date.
There have been no changes in accountants auditing the Company's financial
statements since incorporation in February 1996, and there have been no
disagreements with its accountant.
Item 4. RECENT SALE OF UNREGISTERED SECURITIES
In August of 1997 the Company approved a private placement of shares to
Asia Pacific Mining (Bermuda) Ltd., which is controlled by the Company
President. (Note: Asia Pacific Mining (Bermuda) changed its name to Abacus
Systems Ltd., in 1999). 1,180,500 shares at $.05 each were issued to raise
$59,250.
The Company issued 3,000,000 shares, in September 1999, to the President,
Dr. A. M. Bigwood (2,000,000 shares) and Abacus Systems Ltd (1,000,000), a
company controlled by the President, at $0.01 per share, in lieu of monetary
repayment of debt for $30,000 owed by the Company to the President, previously
provided as a shareholder loan. The Company reduced the amount owed to the
President by a corresponding $30,000.
-17-
<PAGE>
The Company approved the issue, in September 1999 of 50,000 shares, in lieu
of monetary repayment of debt to General Audit Systems, Inc., a Company
controlled by the President, for cash payment of $500 by General Audit Systems,
Inc., on behalf of the Company, for part payment of Millennium Software, Inc
auditing fees payable to Mr. D Coffey CPA.
1,000 shares were issued to Ms. Debie Stoute during 1999 for provision of
software development services for transferring Software screen images to the Web
Sites, amounting to $10.00.
5,000 shares were issued by Private Placement to other parties during 1999
for $50 cash. 2,500 shares were issued to Peter and Susan Cassidy of London,
Ontario, Canada and 2,500 shares were issued to Mr. Steven Buist of Hamilton,
Ontario, Canada.
The Company approved the issue of 7,500 shares, in December 1999, in lieu
of monetary repayment of debt, to Abacus Systems Ltd., a company controlled by
the President, for payment on behalf of the Company, of $75.00 for expenses paid
on behalf of the Company. The 5,000 shares of the Company so issued were then
transferred from Abacus Systems Ltd to the married children of the President and
Mrs. Bigwood, Richard Bigwood (2,500 shares), Catherine Coelho (2,500 shares),
and 2,500 shares were transferred to Mr. James Bigwood, son of the President and
Mrs. EJ Bigwood.
The Company issued 2,050,000 shares, in March 2000, to Abacus Systems Ltd,
a company controlled by the President, at $0.01 per share as compensation for
$20,500 owed by the Company to the President, previously provided as a
shareholder loan. The Company reduced the amount owed to the President by a
corresponding $20,500. 50,000 shares of the Company so issued were then
transferred from Abacus Systems Ltd to Mrs. E.J Bigwood, wife of the President.
The Company issued 6,000 shares for software development services valued at
$60 in March 2000, 2,500 to Ms D.Stoute and 3,500 to Mr. H. Shah both of London
UK, for transferring software screen codes to the Company's Web Sites.
All of the above mentioned shares were offered pursuant to an exemption
from registration under Section 4(2) of the Securities Act of 1933.
Item 5. IDEMNIFICATION OF OFFICERS AND DIRECTORS
A. Indemnification provided by statute:
Sections 78.037, 78.295, 78.300, 78.7502, 78.751 and 78.752 of the Nevada
Revised Statutes offer limitation of liability protection for officers and
directors and directors and/or indemnification protection of officers,
directors, employees and agents of the Company, and provide as follows:
NRS 78.037 Articles of Incorporation: Optional provisions. The Articles of
Incorporation may also contain:
1. A provision eliminating or limiting the personal liability of a director
or officer to the corporation or its stockholders for damages for breach of
fiduciary duty as a director or officer, but such a provision must not eliminate
or limit the liability of a director or officer for:
(a) Acts or omissions which involve intentional misconduct, fraud or a
knowing violation of law; or
(b) The payment of distribution in violation of NRS 78.300.
2. Any provisions, not contrary to the laws of this state, for the management
of the business and for the conduct of the affairs of the corporation, and any
provision creating, defining, limiting or regulating the powers of the
corporation or the rights, powers or duties of the directors, and the
stockholders, or any class of the stockholders, or the holders bonds or other
obligations of the corporation, or governing the distribution or division of the
profits of the corporation.
NRS 78.295 Liability of directors for declaration of distributions.
A director is fully protected in relying in good faith upon the books of
account of the corporation or statements prepared by any of its officials as to
the value and amount of assets, liabilities or net profits of the corporation,
or any other facts pertinent to the existence and amount of money from which
distribution may properly be declared.
NRS 78.300 Liability of directors for unlawful distributions.
1. The directors of a corporations shall not make distributions to
stockholders except as provided by this chapter.
-18-
<PAGE>
2. In case of any willful or grossly negligent violation of the provisions of
this section, the directors under whose administration the violations occurred,
except those who caused their dissent to be entered upon the minutes of the
meeting of the directors at the time, or who not then being present caused their
dissent to be entered on learning of such action, are jointly and severally
liable, at any time within three years after each violation, to the corporation,
and, in the event of its disillusion of insolvency, to its creditors at the time
of the violations, or any of them, to the lesser of the full amount of the
distribution made or of any loss sustained by the corporation by reason of the
distribution to stockholders.
NRS 78.7502 Discretionary and mandatory indemnification of officers, directors,
employees and agents: General provisions.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as the director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorney's fees, judgements, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner in which he reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgement, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonable believed to be in or not opposed to the best interest
of the corporation, and that, with respect to any criminal action or proceeding,
he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgement in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorney's fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interest of the corporation. Indemnification may not be made for any
claim, issue or matter as to which such a person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals therefrom, to be liable
to the corporation or for amounts paid in settlement to the corporation, unless
and only to the extent that the court in which the action or suit was brought or
other court of competent jurisdiction determines upon application that in view
of all the circumstances of the case, the person is fairly and reasonably
entitled to indemnity for such expenses as the court deems proper.
-19-
<PAGE>
FINANCIAL INFORMATION
A. Summary of significant accounting policies.
In compliance with SOP 98-5 all organizational costs are fully expensed.
In compliance with para 12 of SFAS 7 the nature of the Companies
development activities during the accounting periods reported have been as
follows:
December 31st, 1997. The Company was engaged in negotiations with several
third party arms length companies in Canada and Singapore in pursuit of its
search for possible acquisition and merger. No suitable acquisition was found
and the Company terminated these negotiations. The Company was in its
development phase and did not earn any revenues during the period.
September 30th, 1998. The Company was engaged in laying plans to develop an
Internet based business. It was not engaged in any other commercial activities
during the current period. The Company was in a developmental phase and did not
earn any revenues during the period.
December 31st, 1998. The Company was engaged in laying plans to develop an
Internet based business. It was not engaged in any other commercial activities
during the current period. The Company was in a developmental phase and did not
earn any revenues during the period.
September 30th, 1999. The Company was engaged in developing an Internet based
business and commenced development of a web site. The Company entered into an
Electronic Software Distribution Agreement with Digital River, Inc. in March
1999. The Company was in its development phase and did not earn any revenues
during the period.
The Company's accounting policy in regards to exchanging stock for services
rendered is to expense the cost and issue stock in lieu of cash payment.
The Company's accounting policy in regards to exchanging stock for
shareholder loans advanced to the Company is to issue stock in lieu of cash
repayment and reduce the shareholder loans by the value of stock issued.
The useful life of computer equipment is depreciated over five (5) years.
The Web Sites software development costs paid by the President and expensed
by the Company to September 30th, 1999 amounted to $2,343.
-20-
<PAGE>
Financial Statements.
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 and
SEPTEMBER 30,1998
<PAGE>
TABLE OF CONTENTS
Page Number
------------
FINANCIAL STATEMENT:
Independent Accountants Report...................................uR
Balance Sheet....................................................u1
Statement of Operations and Deficit
Accumulated during the develop stage............................u2
Statement of changes in stockholders' equity.....................u3
Statement of cash flows......................................... u4
Notes to the financial statements................................u5
<PAGE>
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors and Stockholders
of Millennium Software, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Millennium Software, Inc.
(a development stage company) as of September 30, 1999, and September 30, 1998,
and the related statements of operations, cash flows, and changes in
stockholder's equity for the period from February 20, 1996, (date of inception)
to September 30, 1999. These statements are the responsibility of Millennium
Software, Inc.'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 my opinion.
In my opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of Millennium Software, Inc. as of
September 30, 1999, and September 30, 1998, and the results of operations, cash
flows, and changes in stockholders' equity for the periods then ended, as well
as the cumulative period from February 20, 1996 in conformity with generally
accepted accounting principles.
/s/ David Coffey C.P.A.
David Coffey, C.P.A.
Las Vegas, Nevada
February 8, 2000
-uR-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
SEPTEMBER 30
-----------------------------
1999 1998
------------- -------------
ASSETS
Cash $ 2,884 $ 2,884
Prepaid expenses 10,500 0
Organizational costs less accumulated
amortization of $517 0 483
Computers less accumulated depreciation
of $6,003 and $3,747, respectively 5,277 6,970
-------- --------
Total Assets $ 18,661 $ 10,901
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable 10,500 0
Loans from shareholders $ 54,413 $ 38,773
-------- --------
Total Liabilities 64,913 38,773
Stockholders' Equity
Common stock, authorized 25,000,000 shares at $.004 par value, issued and
outstanding 5,091,000 shares and 2,035,000 respectively, after giving effect
to a 4 to 1 reverse split effective July 30, 1997 $ 20,364 $ 8,140
Additional paid-in capital $119,923 101,587
Deficit accumulated during
the development stage (186,539) (137,599)
-------- --------
Total Stockholders' Equity (46,252) (27,872)
Total Liabilities and Stockholders' Equity $ 18,661 $ 10,901
======== ========
The accompanying notes are an integral part of these financial statements.
-u1-
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
(With Cumulative Figures From Inception)
Nine months ended
September 30 From Inception
--------------------- Feb 20, 1996 to
1999 1998 September 30,1999
-------- ------ -----------------
Income $ 0 0 0
Expenses
Advertising 0 0 7,286
Organizational Exp. 0 150 1,000
Auto expenses 0 0 2,416
Computer supplies 10 0 3,985
Consulting 0 0 1,000
Depreciation 1,693 1,693 6,003
Research and development 2,343 0 2,343
Internet Expenses 801 0 12,801
Legal and professional fees 10,450 2,804 52,939
Office supplies 447 551 4,802
Telephone 1,990 0 4,800
Travel, meals and lodging 30,159 0 87,164
---------- --------- -----------
Total expenses 47,893 5,198 186,539
Net loss (47,893) (5,198) $ (186,539)
===========
Retained earnings
beginning of period (138,646) (132,401)
Deficit accumulated
during the development
stage $(186,539) (137,599)
========== =========
Earnings (loss) per share Assuming dilution:
Net loss $ (0.02) (0.01) (0.11)
========== ========= ===========
Weighted average
shares outstanding 2,376,333 926,944 1,745,916
========== ========= ===========
The accompanying notes are an integral part of these financial statements.
-u2-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM February 20, 1996 (Date of inception)
To September 30, 1998
Additional
Common Stock Paid-in
Shares Amount Capital Total
--------- --------- --------- ---------
Balance,
February 20, 1996 - $ - $ - $ -
Issuance of common
stock for services 1,000,000 1,000 0 1,000
Issuance of common stock for cash:
March of 1996 1,000,000 1,000 0 1,000
May of 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
Net Loss 0 0 0 (11,238)
Reverse stock
split 4 to 1, (2,563,500) 0 0 0
--------- --------- --------- --------
Balance
July 31, 1997 854,500 3,418 47,284 2,677
Issuance of common
stock for cash
August of 1997 1,180,500 4,722 54,303 59,025
Less net loss 0 0 0 (84,376)
--------- --------- --------- --------
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 (27,072)
Less net loss (1,047)
--------- --------- --------- --------
2,035,000 8,140 101,587 (28,919)
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 30,000
Issuance of common stock for
services, June,1999 1,000 4 6 10
Less net loss (47,893)
--------- --------- --------- --------
Balance, September 30, 1999 5,091,000 20,364 119,923 (46,252)
========= ========= ========= ========
The accompanying notes are an integral part of these financial statements.
-u3-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(With Cumulative Figures From Inception)
<TABLE>
<CAPTION>
Nine months ended From Inception
September 30 Feb 20, 1996
1999 1998 September 30,1999
------------ ------------ -----------------
<S> <C> <C> <C>
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net loss $ (47,893) (5,198) $ (186,539)
Noncash Items included in net loss:
Issuance of stock for services 10 0 10
Amort. of Organizational Costs 0 150 1,000
Depreciation 1,693 1,693 6,003
Adjustments to reconcile net loss to
cash used by operating activity
Prepaid expenses (10,000) 0 (10,000)
Accounts payable 10,500 0 10,500
------------ ------------ -----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (46,190) (3,355) (179,526)
CASH FLOWS USED BY INVESTING ACTIVITIES
Computers 0 0 11,280
------------ ------------ -----------------
NET CASH USED BY INVESTING ACTIVITIES 0 0 11,280
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from shareholders 15,640 1,010 54,143
Issuance of stock to offset loans 30,000 0 30,500
Sale of common stock 50 0 7,190
Additional Paid-In Capital 0 0 123,785
Less offering costs 0 0 (22,198)
------------ ------------ -----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 46,190 1,010 193,690
------------ ------------ -----------------
NET INCREASE IN CASH $ 0 (2,345) 2,884
============ ============ =================
CASH AT BEGINNING OF PERIOD 2,884 5,229
------------ ------------
CASH AT END OF PERIOD $ 2,884 $ 2,884
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-u4-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999, and December 31 1998
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 still in the
development stage and has not generated any revenue from operations. The Company
is engaged in the development of Internet-based business and has commenced the
development of web sites. The Company entered into an Electronic Software
Distribution Agreement with Digital River, Inc. in March 1999.
The Company adopted, effective in December of 1998, SOP 98-5 issued by the
American Institute of Certified Public Accountants. SOP 98-5 requires that
organizational costs be expensed as incurred. Consequently, the unamortized
organizational cost balance was recognized as a December, 1998 expense.
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 for both federal income taxes and financial
reporting. Computer equipment is depreciated over five years.
NOTE C ACCOUNTS PAYABLE
On September 29th, 1999, David Coffey CPA was retained to perform audit
services for the periods ending December 31st, 1997, December 31st, 1998, and
September 30th, 1998 and 1999. The total fees for these audits are recorded as
pre-paid expenses and accrued accounts payable totaling $10,500.
NOTE D LOANS FROM SHAREHOLDERS
The Company's President, or companies controlled by the Company's
President, have extended loans to the Company at no interest, payable on demand,
in cash or by issuance of company stock, for working capital purposes. The
Company has issued 3,050,000 stock in repayment of $30,500 of such loans.
Offering costs are reported as a reduction in the amount of paid-in capital
received for sale of the shares.
NOTE E 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 all dilutive
potential common shares were issued. Since the Company has no common shares that
are potentially issuable, such stock options, convertible securities or
warrants, basic and diluted EPS are the same.
NOTE F STOCK ISSUANCE
In June 1999, the Company completed the sale of 5,000 shares of its common
stock at $.10 per share for a total of $50. Also in June 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 September 1999, the Company approved the issue of 3,050,000 shares of
its common stock at $.01 per share for a total of $30,500. The proceeds were to
be used for working capital.
NOTE G REVERSE STOCK SPLIT
On July 10, 1997, the shareholders approved a 4 for 1 reverse stock split
to be effective July 31, 1997.
NOTE H CONTRACTS AND COMMITMENTS
The Company entered into an Electric Software Distribution Agreement with
Digital River, Inc., Eden Prairie, Minnesota, in March 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 processing web site. The Company has not yet delivered any
software to Digital River. The agreement provides for company 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 of
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 I RELATED PARTY TRANSACTIONS
In September of 1999, the Company issued 3,000,000 shares of its common
stock, and authorized 50,000 shares of its common stock at $.01 per share, for a
total of $30,500 reduction in the shareholder loan payable to the companies
controlled by the President of the Company (1,050,000) shares and to the
President (2,000,000) shares. The President paid $2,343 for web development
expenses.
-u5-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1998
TABLE OF CONTENTS
Page Number
-------------
ACCOUNTANT'S REPORT ..............................................a1
FINANCIAL STATEMENT:
Balance Sheet .................................................a2
Statement of Operations and Deficit
Accumulated During the Development Stage......................a3
Statement of Changes in Stockholder's Equity ..................a4
Statement of Cash Flows .......................................5a
Notes to the Financial Statements .............................a6-a7
<PAGE>
David E. Coffey 3615 E. Lindell Rd., Ste. A, Las Vegas, Nevada 89103
--------------------------------------------------------------------------------
Certified Public Accountant (702) 871-3979
To the Board of Directors and Stockholders
of Millennium Software, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Millennium Software, Inc.,
(a development stage company) as of December 31, 1998 and the related statements
of operations, cash flows and changes in stockholders' equity for the period
from February 20, 1996 (date of inception) to December 31, 1998. These financial
statements are the responsibility of Millennium Software, Inc.'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 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 of the financial statements provide a reasonable basis
for my opinion.
In my opinion, the accompanying financial statements present fairly, in
all material respects, the financial position of Millennium Software, Inc. as of
December 31, 1998 and the results of operations, cash flows and changes in
Stockholders' equity for the year then ended as well as the cumulative amounts
since inception in conformity with generally accepted accounting principles.
/s/David Coffey C.P.A.
David Coffey C.P.A.
November 18, 1999
<PAGE>
MILLENNIUM SOFTWARE, INC.(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Cash $ 2,884
Computers less accumulated
depreciation of $4,310 6,970
---------
Total Assets $ 9,854
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Loans from shareholders $ 38,773
---------
Total Liabilities $ 38,773
Stockholders' Equity
Common stock, authorized 25,000,000
shares at $.004 par value, issued and
outstanding 2,035,000 shares, after
giving effect to a 4 to 1 reverse split
effective July 31, 1997 8,140 Additional
paid-in capital 101,587 Deficit accumulated
during the development stage (138,646)
---------
Total Stockholders' Equity (28,919)
Total Liabilities and Stockholders' Equity $ 9,854
=========
The accompanying notes are an integral part of these financial statements.
-a2-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE PERIOD ENDED December 31, 1998
(With Cumulative Figures From Inception)
From Inception,
Period ended Feb. 20, 1996 to
Dec. 31, 1998 Dec. 31, 1998
-------------- --------------
Expenses
Advertising 0 7,286
Amortization 633 1,000
Auto expenses 0 2,416
Computer supplies 0 3,975
Consulting 0 1,000
Depreciation 2,256 4,310
Internet Expenses 0 12,000
Legal and professional fees 2,804 42,490
Office supplies 552 4,354
Telephone 0 2,810
Travel, meals and lodging 0 57,005
------------- -------------
Total expenses 6,245 138,646
Net loss (6,245) $ (138,646)
=============
Retained earnings
beginning of period (132,401)
-------------
Deficit accumulated during
the development stage $ (138,646)
=============
Earnings (loss) per share Assuming
dilution, after effect to a
4 to 1 reverse split effective
July 31, 1997:
Net loss $ (.00) $ (.09)
============ =============
Weighted average shares outstanding 2,035,000 1,509,509
============ =============
The accompanying notes are an integral part of these financial statements.
-a3-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM February 20, 1996 (Date of inception)
To December 31, 1998
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in
Shares Amount Capital Total
---------- ---------- ---------- --------
<S> <C> <C> <C> <C>
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 of 1996 1,000,000 1,000 0 1,000
May of 1996 1,418,000 1,418 69,482 70,900
Less offering cost 0 0 (22,198) (22,198)
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 of 1997 1,180,500 4,722 54,303 59,025
Net loss 0 0 0 (96,614)
---------- ---------- --------- --------
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)
========== ========== ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-a4-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED December 31, 1998 (With Cumulative Figures From Inception)
From Inception
Year ended Feb. 20, 1996 to
Dec. 31, 1998 Dec. 31, 1998
--------------- --------------
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net loss $ (6,244) $ (138,646)
Noncash items included in net loss
Issuance of stock for services 0 1,000
Amortization of organizational costs 633 0
Depreciation 2,256 4,310
Adjustments to reconcile net loss to
cash used by operating activity 0 0
--------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (3,355) (133,336)
CASH FLOWS USED BY INVESTING ACTIVITIES
Computers 0 11,280
--------- ----------
NET CASH USED BY
INVESTING ACTIVITIES 0 11,280
CASH FLOWS FROM FINANCING ACTIVITIES
Loans from shareholders 1,010 38,773
Sale of common stock 0 7,140
Paid-In Capital 0 123,785
Less offering costs 0 (22,198)
--------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 1,010 147,500
--------- ----------
NET INCREASE IN CASH (2,345) $ 2,884
==========
CASH AT BEGINNING OF PERIOD 5,229
---------
CASH AT END OF PERIOD $ 2,884
==========
The accompanying notes are an integral part of these financial statements.
-a5-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998
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 pre-paid legal services. On July 10, 1997 the shareholders approved
a change of name to Millennium Software, Inc. The Company is still in the
development stage and has not generated any revenue from operations. The Company
is engaged in the development of an Internet-based business. The Company
adopted, effective in December of 1998, SOP 98-5 issued by the American
Institute of Certified Public Accountants. SOP 98-5 requires that organizational
expenses be expensed as incurred. Consequently, the unamortized organizational
cost balance was recognized as a December, 1998 expense.
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 the 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 for both federal income taxes and financial
reporting. Computer equipment is depreciated over five years.
NOTE C LOANS FROM SHAREHOLDERS
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.
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 all dilutive
potential common shares were issued. Since the Company has no common shares that
are potentially issuable, such as stock options, convertible securities or
warrants, basic and diluted EPS are the same.
NOTE E REVERSE STOCK SPLIT
On July 10, 1997, the shareholders approved a 4 for 1 reverse stock split
to be effective July 30, 1997. After this reverse stock split there were
6,250,000 at $.004 par value authorized with 854,500 shares issued and
outstanding.
NOTE F INCREASE IN AUTHORIZED CAPITAL OF THE COMPANY
On July 10, 1997, after the reverse stock split, the directors and
shareholders of the Company approved an increase in the number of shares
authorized from 6,250,000 at $.004 par value to 25,000,000 shares at $.004 par
value.
NOTE G RELATED PARTY TRANSACTIONS
In March of 1996, the Company issued 1,000,000 shares of its common stock,
at $.01 per share, for a total of $1,000 in payment for services performed in
the organization of the Company. In March of 1996 one of the officers of the
Company purchased 1,000,000 shares of its common stock at $.001 per share for a
total of $1,000 cash, to be used for working capital purposes.
As of December, 1998, stockholders have advanced to the Company $38,773 at
no interest and payable on demand for the purpose of working capital.
-a7-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1997
TABLE OF CONTENTS
Page Number
------------
ACCOUNTANT'S REPORT ..............................................1
FINANCIAL STATEMENT:
Balance Sheet .................................................2
Statement of Operations and Deficit
Accumulated During the Development Stage......................3
Statement of Changes in Stockholder's Equity ..................4
Statement of Cash Flows .......................................5
Notes to the Financial Statements .............................6-7
<PAGE>
David E. Coffey 3615 E. Lindell Rd., Ste. A, Las Vegas, Nevada 89103
----------------------------------------------------------------------------
Certified Public Accountant (702) 871-3979
To the Board of Directors and Stockholders
of Millennium Software, Inc.
(Formerly Legal Protection Services, Inc.)
Las Vegas, Nevada
I have audited the accompanying balance sheet of Millennium Software, Inc.,
(a development stage company) as of December 31, 1997 and the related statements
of operations, cash flows and changes in stockholders' equity for the period
from February 20, 1996 (date of inception) to December 31, 1997. These financial
statements are the responsibility of Millennium Software, Inc'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 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 of the financial statements provide a reasonable basis
for my opinion.
In my opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of Millennium Software, Inc. as of
December 31, 1997 and the results of operations, cash flows and changes in
Stockholders' equity for the year then ended as well as the cumulative amounts
since inception in conformity with generally accepted accounting principles.
/s/David Coffey C.P.A.
David Coffey C.P.A.
November 18, 1999
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1997
ASSETS
Cash $ 5,229
Organizational costs less accumulated
amortization of $367 633
Computers less accumulated
depreciation of $2,054 9,227
Total Assets
$ 15,089
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable - stockholder $ 37,763
---------
Total Liabilities $ 37,763
Stockholders' Equity
Common stock, authorized 25,000,000 shares
at $.004 par value, issued and outstanding
2,035,000 shares 8,140
Additional paid-in capital 101,587
Deficit accumulated during
the development stage (132,401)
---------
Total Stockholders' Equity (22,674)
Total Liabilities and Stockholders' Equity $ 15,089
=========
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
FOR THE YEAR ENDED December 31, 1997
(With Cumulative Figures From Inception)
Inception
Year ended Feb 20, 1996
Dec. 31, 1997 To Date
-------------- ------------
Income $ 0 $ 0
---- ----
0
Expenses
Advertising 7,286 7,286
Amortization 200 367
Auto expenses 2,416 2,416
Computer supplies 2,397 3,975
Consulting 0 1,000
Depreciation 1,027 2,054
Internet Expenses 12,000 12,000
Legal and professional fees 23,248 39,686
Office supplies 1,936 3,802
Telephone 2,810 2,810
Travel, meals and lodging 42,294 57,005
-------------- ------------
Total expenses 95,614 132,401
Net loss (95,614) $ (132,401)
============
Deficit accumulated,
beginning of year (36,787)
--------------
Deficit accumulated during
the development stage $ (132,401)
==============
Earnings (loss) per share Assuming
dilution:
Net loss $ (.10) $ (.13)
============== ============
Weighted average shares outstanding 990,333 984,019
============== ============
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PERIOD FROM February 20, 1996 (Date of inception)
To December 31, 1997
Additional
Common Stock Paid-in
Shares Amount Capital Total
---------- ---------- --------- ----------
Balance,
February 20, 1996 - $ - $ - $ -
Issuance of common
stock for services 1,000,000 1,000 0 1,000
Issuance of common stock for cash:
March of 1996 1,000,000 1,000 0 1,000
May of 1996 1,418,000 1,418 69,482 70,900
Less offering cost 0 0 (22,198) (22,198)
Net loss 0 0 0 (36,787)
---------- ---------- --------- ----------
Balance,
December 31, 1996 3,418,000 3,418 47,284 13,915
Net Loss 0 0 0 (11,238)
Reverse stock split 4 to 1 (2,563,500) 0 0 0
---------- ---------- --------- ----------
Balance
July 31, 1997 854,000 3,418 47,284 2,677
Issuance of common
stock for cash
August of 1997 1,180,500 4,722 54,303 59,025
Net loss 0 0 0 (84,376)
---------- ---------- --------- ----------
Balance,
December 31, 1997 2,035,000 8,140 101,587 (22,674)
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED December 31, 1997
(With Cumulative Figures From Inception)
Inception
Year ended Feb. 20, 1996
Dec. 31, 1997 To Date
-------------- --------------
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net loss $ (95,614) $ (132,401)
Noncash expenses included in net loss
Amortization 200 367
Depreciation 1,027 2,054
Increase in accounts payable 38,365 37,763
------------ --------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (56,022) (92,217)
CASH FLOWS USED BY INVESTING ACTIVITIES
Computers 6,146 11,281
------------ --------------
NET CASH USED BY
INVESTING ACTIVITIES 6,146 11,281
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock 4,722 7,140
Additional Paid-In Capital 54,303 123,785
Less offering costs 0 (22,198)
------------ --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 59,025 108,727
------------ --------------
NET INCREASE IN CASH (3,143) $ 5,229
==============
CASH AT BEGINNING OF PERIOD 8,372
------------
CASH AT END OF PERIOD $ 5,229
============
Supplemental disclosures of cash flow information:
Issuance of common stock in exchange
for services $ 1,000
==============
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1997
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on February 20, 1996 under the laws of the
State of Nevada as Alegal Protection Services, Inc@. The business purpose was
then to sell pre-paid legal services. On July 10, 1997, the shareholders
approved a change of name to "Millennium Software, Inc." The Company engaged in
negotiations in 1997 for a suitable merger partner or acquisition candidate. No
suitable partner was found and the Company will develop an Internet-based
business. The Company is still in the development stage and has not yet
generated any revenues from operations.
The Company will adopt accounting policies and procedures based upon the
nature of future transactions.
NOTE B ORGANIZATION COSTS
Organization costs are capitalized and amortized over 60 months.
NOTE C 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 for both federal income taxes and financial
reporting. Computer equipment is depreciated over five years.
NOTE D LOANS FROM SHAREHOLDERS
Shareholders have extended loans to the Company at no interest. payable on
demand, for working capital purposes.
NOTE E 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 all dilutive
potential common shares were issued. Since the Company has no common shares that
are potentially issuable, such as stock options, convertible securities or
warrants, basic and diluted EPS are the same.
NOTE F SALE OF COMMON STOCK
In March of 1996, the Company issued 1,000,000 shares of its common stock
at $.001 per share in exchange for services valued at $1,000 for organization
for the Company. The Company also issued 1,000,000 shares at $.001 per share, a
total of $1,000 cash, to an officer for working capital.
In May of 1996, the Company sold 1,418,000 shares of its common stock at
$.05 per share for a total of $70,900. In August of 1997, the Company sold
1,180,500 shares of its common stock at $.05 per share, a total of $59,025, to
be used for working capital. Offering costs are reported as a deduction from
paid-in capital.
-6-
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1997
NOTE G REVERSE STOCK SPLIT
On July 10, 1997, the shareholders approved a 4 for 1 reverse stock split
to be effective July 30, 1997. After this reverse split, there were 6,250,000
shares at $.004 par value authorized with 854,500 issued and outstanding.
NOTE H INCREASE IN AUTHORIZED CAPITAL OF THE COMPANY
On July 10, 1997, after the reverse stock split, the directors and
shareholders approved an increase in the number of shares authorized from
6,250,000 at $.004 par value to 25,000,000 shares of $.004 par value.
NOTE I RELATED PARTY TRANSACTIONS
In March of 1996, the Company issued 1,000,000 shares of its common stock
at $.01 per share for a total of $1,000 in exchange for services for the
organization of the Company. Also in March of 1996 one of the officers of the
Company purchased 1,000,000 shares at $.001 per share for a total of $1,000 cash
to be used for working capital purposes.
As of December 31, 1997, stockholders have advanced to the Company $37,763
at no interest and payable on demand for working capital.
<PAGE>
PART 111
--------
Item 1. INDEX TO EXHIBITS
The following exhibits are furnished as required by Item 601 of Regulation SB.
Exhibit No. Description
---------- -----------
3.0 Certificate of Incorporation of ICS (9614), Inc. consisting of
Articles of Incorporation filed with the Secretary of State of
the State of Nevada on February 20, 1996, filed with SEC in this
Registration Statement; Certificate of Amendment changing name to
Legal Protection Services, Inc. filed with the Secretary of State
March 5, 1996. Additional Amendment changing name to Millennium
Software, Inc. filed with the Secretary of State July 16, 1997.
3.1 ByLaws of ICS (9614), Inc., dated February 20, 1996, are attached
hereto, filed with SEC in this Registration Statement.
4.0 Common Stock certificate, filed with SEC in this Registration
Statement.
10.0 Distribution Agreement with Digital River, Inc
10.1 Licensing Agreement with Abacus Systems Ltd December 8, 2000.
10.2 Licensing Agreement with Abacus Systems, Ltd, amended May 1, 2000
10.3 Loan Agreement with Mr. A.M Bigwood, September 7, 2000.
27.0 Financial Data Schedule for the period ending 12/31/98, filed
with the SEC in this Registration Statement.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Millennium Software, Inc.
(Registrant)
Date: October 16, 2000 By: /S/ANTHONY M. BIGWOOD
------------------------------
President and Director
Item 2. Description of Exhibits
