UNITED STATES
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10SB12G/A
Amendment No.2
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
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
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 plans to commence selling these products in April
2000. To date, no sales have been made.
The Company entered into an Electronic Distribution Agreement with Digital
River, Inc., ('Digital River') Eden Prairie, Minnesota on March 8th, 1999.
Digital River will provide web-based order processing, credit card authorization
services for the Company. Digital River will deliver 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. It is intended that Digital River will be the sole
supplier of order processing and product delivery services for the Company. The
fee levied by Digital River for the services provided will be 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, 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. Abacus Systems, Ltd is a company
controlled and managed by the President of the Company. Abacus Systems, Ltd.
controls 1,668,000 shares (30.94%) of the 5,391,000 fully diluted number of
shares issued of Company Stock as of December 8th, 1999.
The Company has two websites, http://www.mlnsoft.com and
http://www.checkmy2000.uk.com ('Web Sites') which are under development and not
available to the public.
The Company has been in a development stage from its incorporation in
February 1996 and has not generated any revenues from its operations during this
period.
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METHODS OF DISTRIBUTION
The Company intends to use the Internet to market the Software products and
related User Guides. Consumers who decide to purchase the Software will have the
Software delivered via electronic download or on CD-ROMs by standard mail
services.
The Company has two Web Sites under construction located at
http://www.mlnsoft.com and http://www.checkmy200.uk.com. The www.mlnsoft.com
site will address the US and Canadian markets for the Software, the
www.checkmy2000.uk.com site will address the UK market for the Software. Both
sites will be linked to the Digital Rivers order processing website. The
Companies Web Sites are not currently available to the public.
The Company incurred costs of $2,343 for the development for its Web Sites
to December 8th, 1999.
The Company intends to promote its Web Sites through inclusion in leading
search engines, through advertising in web site directories, through independent
editorial review of the Software products and through Internet linkages leading
visitors to the Company's Web Sites.
The Company also intends to promote its Web Sites through expanding its
network of third party Internet sites that lead visitors directly to the
Company=s Web Sites. The Company intends to introduce a commission based sales
incentive for Internet marketing affiliates ('Affiliates') which will provide a
30% sales commission on net sales income earned from buyers that originate from
third party Affiliates.
SUPPLIERS
The Company intends to copy, market, distribute and sub license 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:
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 the 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 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.
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The Company does not intend to 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.
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COMPETITION
CheckMy 2000 products intend to 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.
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
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Windows 95/98 financial software products through the Internet.
Early in 2000, the Company intends to launch the new family of software
products, 'CheckMY 2000' developed by Abacus Systems, Ltd., to be sold through
the Company's Internet Web Sites.
The Company entered into a Software Licensing Agreement with Abacus
Systems, Ltd., on December 8th, 1999, 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 Company entered into an Electronic Distribution Agreement with Digital
River, Inc, ('Digital River') Eden Prairie, Minnesota on March 8th, 1999.Digital
River will provide web based order processing, credit card authorization
services for the Company and deliver 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. It
is intended that Digital River will be the sole supplier of order processing and
product delivery services for the Company.
The Company will be capable of delivering the Software in CD-ROM form
without services provided by Digital River, but will be 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 has not yet delivered Software to Digital River.
The terms of the Electronic Distribution Agreement with Digital River
provide that Digital River will collect sales revenues from the Software
delivered by them in accounts controlled by them and they will 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 shall be 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 intends to sub-license 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 8th, 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
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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'.
The Company has inadequate financial resources with which to enter the
market for personal financial software. Its cash balances at 8th December 1999
amounted to $2,154. 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 December 8th, 1999, amounting to $2,343
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.
The Company expects that income will be generated during the next twelve
months from the sale of CheckMy 2000 software products.
Approximately 40% of revenues will be 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.
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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 has no history of marketing software products.
The Company has generated no sales income to date.
The Company has no history of using a third party such as Digital River to
provide order processing, credit card authorization and delivery services
electronically 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 31st, 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 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.
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 recognizes that undetermined risks may arise when computer
clocks move forward to January 1st, 2000. The Company has no guarantees that the
Company's bankers will be capable of handling financial transactions on behalf
of the Company or that Internet servers which support the Company's Web Site
will continue to perform according to standard performance criteria. The
Company possesses computer equipment used for e-mails, word processing, and
financial record keeping. All company records will be backed up onto media
separate from these companies prior to December 31st, 1999 to minimize the risks
of data loss. The Company considers the risks to its internal operations to be
minimal. 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.
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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 December 8th, 1999 the outstanding
shares of common stock of the company owned of record or beneficially by each
person who owned of record, or was known by the Company to own beneficially,
more than 5% of the Company's Common Stock, and the name and share holding of
each officer and director and all officers and directors as a group.
Title of Name & Address Amount & Nature % of class
Class of beneficial owner of beneficial owner
_______________________________________________________________________________
Common Abacus Systems Ltd 1,668,000 30.94
44 Church Street
Hamilton
Bermuda
Common Abacus Corporation Ltd 1,942,208 36.03
Kissack Court
Ramsey
Isle of Man
United Kingdom
Common A.M. Bigwood (2) 4,291,790 (1) 79.61
2277 Lawson Avenue
West Vancouver
BC V7V 2E3 Canada
Common E.J. Bigwood (3) 4,291,790 79.61
2277 Lawson Avenue
West Vancouver
BC V7V 2E3 Canada
Common Officers and Directors 4,291,790 (1) 79.61
Combined
(1) The President currently has options to purchase 300,000 shares at $.01 which
are exercisable until November 21, 2002
(2) Mr. Bigwood's spouse, E J Bigwood, is the beneficial owner of 995,895 shares
of common stock. These shares are reported in the beneficial ownership of Mr.
Bigwood.
(3) Mrs. Bigwood's spouse, A M Bigwood, is the beneficial owner of 3,295,894
shares and options to buy another 300,000 by November 21, 2002. These shares
are reported in the beneficial ownership of Mrs. Bigwood.
Mr. Bigwood and Mrs. Bigwood each hold 50% ownership of Abacus Corporation Ltd.
Abacus Corporation Ltd controls 96.825% ownership of Abacus Systems Ltd. Abacus
Systems Ltd holds directly 1,668,000 shares of the Company. Abacus Corporation
Ltd holds directly 326,750 shares of the Company. The beneficial ownership of
1,942,208 shares by Abacus Corporation Ltd includes its holdings through Abacus
Systems Ltd.
The fully diluted number of shares issued amounted to 5,391,000 on December 8th,
1999 including 300,000 Options issued to the President. These shareholdings and
Options are used as the basis of calculations of % of Class.
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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 orthopedic 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.
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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.
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
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
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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 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 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
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<PAGE>
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 payment by General Audit Systems, Inc., on
behalf of the Company, of $500 for expenses.
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.
ITEM 8 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 9 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTER
The Company's common stock trading on the OTC bulletin board under symbol
MLNS.
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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
01/11/99 1,000 .9375 .9375 .9375
06/12/99 200 .9375 .9375 .9375
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, Interwest Transfer of Salt Lake City, confirms
that as of 12/08/99, there are approximately 82 shareholders of record.
DIVIDENDS
To date, the Company has not paid any dividends on its common stock. The
payment of dividends by the Company, if any in the future, rests within the
discretion of its Board of Directors and will depend among other things, upon
the Company's earning, its capital requirements and its financial condition, as
well as other relevant factors.
ITEM 10 - 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.
The Company approved the issued 50,000 shares, in September 1999, in lieu
of monetary repayment of debt, to General Audit Systems, inc., a company
controlled by the President, for payment by General Audit Systems, Inc., on
behalf of the Company, of $500 for expenses.
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1,000 shares were issued to Ms. Debie Stoute during 1999 for provision of
software development services 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.
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 11 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 a
14
<PAGE>
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.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
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 relyong 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.
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.
ITEM 13. Financial Statements and Related Matters
The Company's financial accounts have been audited by D.Coffey CPA from 1996 to
September 30th, 1999. There have been no disputes or disagreements with the
auditor.
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.
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<PAGE>
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.
ITEM 13. Financial Statements.
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 and
SEPTEMBER 30,1998
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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
17
<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-
18
<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-
19
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
(With Cumulative Figures From Inception)
(Unaudited)
From Inception
Nine months ended Feb 20, 1996 to
September 30 September 30,1999
--------------------- ---------------
1999 1998
-------- ------
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 peiod (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-
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<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-
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<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(With Cumulative Figures From Inception)
(Unaudited)
From Inception
Nine months ended Feb 20, 1996 to
September 30 September 30,1999
--------------------- ---------------
1999 1998
------ -----
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
========== ==========
The accompanying notes are an integral part of these financial statements.
-u4-
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<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
Securities and Exchange Commission. 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-
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<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1998
24
<PAGE>
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>27
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
25
<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-
26
<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-
27
<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
Additional
Common Stock Paid-in
Shares Amount Capital Total
------ ------ ------- ------
Balance,February 20, 1996 $ - $ - $ - $ -
Issuance of common stock
for services March, 1996 1,000,000 1,000 0 1,000
Issuance of common
stock for cash:
March 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)
========= ===== ========= ======
The accompanying notes are an integral part of
these financial statements.
-a4-
28
<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 Sept. 30, 1999
--------------- ---------------
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-
29
<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 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 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 Securities &
Exchange Commission. 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-
30
<PAGE>
MILLENNIUM SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 1997
31
<PAGE>
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
32
<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
33
<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-
34
<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-
35
<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 stocksplit 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-
36
<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-
37
<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 AMillennium 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-
38
<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.
-7-
39
<PAGE>
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company has used David E. Coffey, C.P.A. as their independent
accountant and has not had any disagreements with said independent accountant.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
(a) The Company's financial statements for the period from inception to
September 30, 1999 are included herein under Item 13 of this Registration
Statement.
(b) 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 Licensing Agreement with Abacus Systems, Inc.
10.1 Distribution Agreement with Digital River, Inc.
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: December 8, 1999 By: /S/ANTHONY M. BIGWOOD
------------------------------
President and Director
40
<PAGE>
