U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
[X] Annual report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
February 28, 1999, or
[ ] Transition report pursuant to section 13 or 15(d) of the
Securities Exchange act of 1934 for the transition period from
to
Commission File No. 33-19034
APHRODITE SOFTWARE CORPORATION
(Name of Small Business Issuer as specified in its charter)
Nevada 87-0442890
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2751 Golden Eye Drive, Sandy, Utah 84093
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (801) 942-4727
Securities registered under Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Act: None
Check whether the issuer (1) filed all reports required to be
filed by sections 13 or 15(d) of the Exchange Act during the past
12 months (or such shorter period that the issuer was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [X]
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
The Registrant's revenues (consisting only of interest income)
for its most recent fiscal year: $0.
The aggregate market value of voting stock held by non-
affiliates: As of the date this report is filed there is no
public market for the common stock of the issuer, so the
aggregate market value of such stock is $0.
As of February 28, 1999, the Registrant had outstanding 480,000
shares of Common Stock, par value $0.001.
Documents incorporated by reference: None.
<PAGE>
TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
Part I
1. Description of Business 3
2. Description of Properties 6
3. Legal Proceedings 6
4. Submission of Matters to a Vote of Security Holders 6
Part II
5. Market for Common Equity and Related Stockholder 6
Matters
6. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
7. Financial Statements 7
8. Changes in and Disagreements with Accountants 7
on Accounting and Financial Disclosure
Part III
9. Directors, Executive Officers, Promoters and Control 7
Persons; Compliance with Section 16(a) of the Exchange Act
10. Executive Compensation 8
11. Security Ownership of Certain Beneficial Owners and 8
Management
12. Certain Relationships and Related Transactions 9
13. Exhibits and Reports on Form 8-K 9
2
<PAGE>
FORWARD-LOOKING STATEMENT NOTICE
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend," and
similar expressions are intended to identify forward-looking
statements within the meaning of Section 27a of the Securities
Act of 1933 and Section 21e of the Securities Exchange Act of
1934 regarding events, conditions, and financial trends that may
affect the Company's future plans of operations, business
strategy, operating results, and financial position. Persons
reviewing this report are cautioned that any forward-looking
statements are not guarantees of future performance and are
subject to risks and uncertainties and that actual results may
differ materially from those included within the forward-looking
statements as a result of various factors. Such factors are
discussed under the headings "Item 1. Description of Business,"
and "Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations," and also include general
economic factors and conditions that may directly or indirectly
impact the Company's financial condition or results of
operations.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
For the past ten years the Company has had no active business
operations, and has been seeking to acquire an interest in a
business with long-term growth potential. The Company was
originally formed as a Utah corporation in February 1987. It has
been an inactive shell corporation for at least the past 10
years. In October 1999, the Company sold 3,000,000 shares of
common stock in a private placement to four investors at a price
of $0.0067 per share, or a total of $20,000. In November 1999,
the stockholders approved a change in domicile of the Company
from Utah to Nevada.
The Company currently has no commitment or arrangement to
participate in a business and cannot now predict what type of
business it may enter into or acquire. It is emphasized that the
business objectives discussed herein are extremely general and
are not intended to be restrictive on the discretion of the
Company's management.
Selection of a Business
The Company anticipates that businesses for possible acquisition
will be referred by various sources, including its officers and
directors, professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and
others who may present unsolicited proposals. The Company will
not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its
officers and directors and their affiliates, as well as indirect
associations between them and other business and professional
people. By relying on "word of mouth", the Company may be
limited in the number of potential acquisitions it can identify.
While it is not presently anticipated that the Company will
engage unaffiliated professional firms specializing in business
acquisitions or reorganizations, such firms may be retained if
management deems it in the best interest of the Company.
Compensation to a finder or business acquisition firm may take
various forms, including one-time cash payments, payments based
on a percentage of revenues or product sales volume, payments
involving issuance of securities (including those of the
Company), or any combination of these or other compensation
arrangements. Consequently, the Company is currently unable to
predict the cost of utilizing such services.
The Company will not restrict its search to any particular
business, industry, or geographical location, and management
reserves the right to evaluate and enter into any type of
business in any location. The Company may participate in a newly
organized business venture or a more established company entering
a new phase of growth or in need of additional capital to
overcome existing financial problems. Participation in a new
business venture entails greater risks since in many instances
management of such a venture will not have proved its ability,
the eventual market of such venture's product or services will
likely not be established, and the profitability of the venture
will be unproved and cannot be predicted accurately. If the
Company participates in a more established
3
<PAGE>
firm with existing financial problems, it may be subjected to
risk because the financial resources of the Company may not be
adequate to eliminate or reverse the circumstances leading to
such financial problems.
In seeking a business venture, the decision of management will
not be controlled by an attempt to take advantage of any
anticipated or perceived appeal of a specific industry,
management group, product, or industry, but will be based on the
business objective of seeking long-term capital appreciation in
the real value of the Company.
The analysis of new businesses will be undertaken by or under the
supervision of the officers and directors. In analyzing
prospective businesses, management will consider, to the extent
applicable, the available technical, financial, and managerial
resources; working capital and other prospects for the future;
the nature of present and expected competition; the quality and
experience of management services which may be available and the
depth of that management; the potential for further research,
development, or exploration; the potential for growth and
expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trade or
service marks; name identification; and other relevant factors.
The decision to participate in a specific business may be based
on management's analysis of the quality of the other firm's
management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological
changes, and other factors which are difficult, if not
impossible, to analyze through any objective criteria. It is
anticipated that the results of operations of a specific firm may
not necessarily be indicative of the potential for the future
because of the requirement to substantially shift marketing
approaches, expand significantly, change product emphasis, change
or substantially augment management, and other factors.
The Company will analyze all available factors and make a
determination based on a composite of available facts, without
reliance on any single factor. The period within which the
Company may participate in a business cannot be predicted and
will depend on circumstances beyond the Company's control,
including the availability of businesses, the time required for
the Company to complete its investigation and analysis of
prospective businesses, the time required to prepare appropriate
documents and agreements providing for the Company's
participation, and other circumstances.
Acquisition of a Business
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, or other reorganization with another corporation
or entity; joint venture; license; purchase and sale of assets;
or purchase and sale of stock, the exact nature of which cannot
now be predicted. Notwithstanding the above, the Company does
not intend to participate in a business through the purchase of
minority stock positions. On the consummation of a transaction,
it is likely that the present management and shareholders of the
Company will not be in control of the Company. In addition, a
majority or all of the Company's directors may, as part of the
terms of the acquisition transaction, resign and be replaced by
new directors without a vote of the Company's shareholders.
In connection with the Company's acquisition of a business, the
present shareholders of the Company, including officers and
directors, may, as a negotiated element of the acquisition, sell
a portion or all of the Company's Common Stock held by them at a
significant premium over their original investment in the
Company. It is not unusual for affiliates of the entity
participating in the reorganization to negotiate to purchase
shares held by the present shareholders in order to reduce the
number of "restricted securities" held by persons no longer
affiliated with the Company and thereby reduce the potential
adverse impact on the public market in the Company's Common Stock
that could result from substantial sales of such shares after the
restrictions no longer apply. As a result of such sales,
affiliates of the entity participating in the business
reorganization with the Company would acquire a higher percentage
of equity ownership in the Company. Public investors will not
receive any portion of the premium that may be paid in the
foregoing circumstances. Furthermore, the Company's shareholders
may not be afforded an opportunity to approve or consent to any
particular stock buy-out transaction.
In the event sales of shares by present shareholders of the
Company, including officers and directors, is a negotiated
element of a future acquisition, a conflict of interest may arise
because directors will be negotiating for the acquisition on
behalf of the Company and for sale of their shares for their own
respective accounts. Where a
business opportunity is well suited for acquisition by the
Company, but affiliates of the business opportunity impose a
condition that management sell their shares at a price which is
unacceptable to them, management may not
4
<PAGE>
sacrifice their financial interest for the Company to complete
the transaction. Where the business opportunity is not well
suited, but the price offered management for their shares is
high, management will be tempted to effect the acquisition to
realize a substantial gain on their shares in the Company.
Management has not adopted any policy for resolving the foregoing
potential conflicts, should they arise, and does not intend to
obtain an independent appraisal to determine whether any price
that may be offered for their shares is fair. Stockholders must
rely, instead, on the obligation of management to fulfill its
fiduciary duty under state law to act in the best interests of
the Company and its stockholders.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. Although the terms
of such registration rights and the number of securities, if any,
which may be registered cannot be predicted, it may be expected
that registration of securities by the Company in these
circumstances would entail substantial expense to the Company.
The issuance of substantial additional securities and their
potential sale into any trading market that may develop in the
Company's securities may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
structure the acquisition as a so-called "tax-free" event under
sections 351 or 368(a) of the Internal Revenue Code of 1986, (the
"Code"). In order to obtain tax-free treatment under section 351
of the Code, it would be necessary for the owners of the acquired
business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would
retain less than 20% of the issued and outstanding shares of the
surviving entity. Section 368(a)(1) of the Code provides for tax-
free treatment of certain business reorganizations between
corporate entities where one corporation is merged with or
acquires the securities or assets of another corporation.
Generally, the Company will be the acquiring corporation in such
a business reorganization, and the tax-free status of the
transaction will not depend on the issuance of any specific
amount of the Company's voting securities. It is not uncommon,
however, that as a negotiated element of a transaction completed
in reliance on section 368, the acquiring corporation issue
securities in such an amount that the shareholders of the
acquired corporation will hold 50% or more of the voting stock of
the surviving entity. Consequently, there is a substantial
possibility that the shareholders of the Company immediately
prior to the transaction would retain less than 50% of the issued
and outstanding shares of the surviving entity. Therefore,
regardless of the form of the business acquisition, it may be
anticipated that stockholders immediately prior to the
transaction will experience a significant reduction in their
percentage of ownership in the Company.
Notwithstanding the fact that the Company is technically the
acquiring entity in the foregoing circumstances, generally
accepted accounting principles will ordinarily require that such
transaction be accounted for as if the Company had been acquired
by the other entity owning the business and, therefore, will not
permit a write-up in the carrying value of the assets of the
other company.
The manner in which the Company participates in a business will
depend on the nature of the business, the respective needs and
desires of the Company and other parties, the management of the
business, and the relative negotiating strength of the Company
and such other management.
The Company will participate in a business only after the
negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require specific representations
and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and
the conditions which must be satisfied by each of the parties
prior to such closing, will outline the manner of bearing costs
if the transaction is not closed, will set forth remedies on
default, and will include miscellaneous other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of a business
will be dependent on the nature of the business and the interest
acquired. The Company is unable to predict whether the Company
will be in control of the business or
5
<PAGE>
whether present management will be in control of the Company
following the acquisition. It may be expected that the business
will present various risks, which cannot be predicted at the
present time.
Governmental Regulation
It is impossible to predict the government regulation, if any, to
which the Company may be subject until it has acquired an
interest in a business. The use of assets and/or conduct of
businesses that the Company may acquire could subject it to
environmental, public health and safety, land use, trade, or
other governmental regulations and state or local taxation. In
selecting a business in which to acquire an interest, management
will endeavor to ascertain, to the extent of the limited
resources of the Company, the effects of such government
regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an
interest in a new or start-up business activity, it may not be
possible to predict with any degree of accuracy the impact of
government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will
make the acquisition of an interest in such business a higher
risk.
Competition
The Company will be involved in intense competition with other
business entities, many of which will have a competitive edge
over the Company by virtue of their stronger financial resources
and prior experience in business. There is no assurance that the
Company will be successful in obtaining suitable investments.
Employees
The Company is a development stage company and currently has no
employees. Executive officers, who are not compensated for their
time contributed to the Company, will devote only such time to
the affairs of the Company as they deem appropriate, which is
estimated to be approximately 20 hours per month per person.
Management of the Company expects to use consultants, attorneys,
and accountants as necessary, and does not anticipate a need to
engage any full-time employees so long as it is seeking and
evaluating businesses. The need for employees and their
availability will be addressed in connection with a decision
whether or not to acquire or participate in a specific business
industry.
ITEM 2. DESCRIPTION OF PROPERTIES
The Company utilizes office space at 2751 Golden Eye Drive,
Sandy, Utah 84093, provided by Kent N. Dixon, an officer and
director. The Company does not pay rent for this office space.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings, and to the
best of its knowledge, no such proceedings by or against the
Company have been threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders in the
fiscal quarter ended February 28, 1999.
PART III
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There has been no public trading market for the Company's common
stock for at least the past ten years. Following the filing of
this report, the Company will seek out one or more stock
brokerage firms to make a market in the Company's common stock
and submit an application for quotation of the Company's common
stock on the OTC Bulletin Board operated by the National
Association of Securities Dealers, Inc., or the "Pink Sheets"
operated by the National Quotation Bureau. There is no assurance
that a trading market in the common stock will be established in
the future.
6
<PAGE>
Since its inception, no dividends have been paid on the Company's
common stock. The Company intends to retain any earnings for use
in its business activities, so it is not expected that any
dividends on the common stock will be declared and paid in the
foreseeable future. On December 31, 1999, there were
approximately 64 holders of record of the Company's Common Stock.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Years Ended February 28, 1999 and 1998
The Company had no revenue during the last two fiscal years. The
Company had nominal general and administrative expenses of $123
for the year ended February 28, 1999, and $151 for the year ended
February 28, 1998. General and administrative expenses during
fiscal years 1999 and 1998 arose from maintaining the Company's
corporate existence. The Company realized a net loss of $123 in
fiscal year 1999, and $151 in fiscal year 1998. The Company does
not expect to generate any revenue unless and until it acquires
an interest in an operating company.
Liquidity and Capital Resources
At February 28, 1999, the Company had working capital deficit of
$1,562. In October 1999, the Company sold 3,000,000 shares of
common stock to a limited group of private investors for $20,000
in cash. As a result of this subsequent financing, management
believes that the Company has sufficient cash to fund its limited
operations through February 2001. The Company's current plan is
to handle the administrative and reporting requirements of a
public company; and search for potential businesses, products,
technologies and companies for acquisition. At present, the
Company has no understandings, commitments or agreements with
respect to the acquisition of any business, product, technology
or company and there can be no assurance that the Company will
identify any such business, product, technology or company
suitable for acquisition in the future. Further, there can be no
assurance that the Company would be successful in consummating
any acquisition on favorable terms or that it will be able to
profitably manage the business, product, technology or company it
acquires.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company appear at the end of this
report beginning with the Index to Financial Statements on page
11.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants
in the past three years.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Directors and Officers
The following table sets forth the names, ages, and positions
with the Company for each of the directors and officers of the
Company.
7
<PAGE>
Name Age Positions Since
Kent N. Dixon 42 President and Director 1987
Jared Southwick 27 Secretary/Treasurer and Director 1999
Jason Williams 27 Director 1999
All directors hold office until the next annual meeting of
stockholders and until their successors are elected and qualify.
Officers serve at the discretion of the Board of Directors.
The following is information on the business experience of each
director and officer.
Kent N. Dixon has, for the past five years, been an owner and
executive officer of Crusader Computer, Inc., a private company
engaged in the sale of computer products.
Jared Southwick is currently working as a Consultant for Sonos
Management and the University of Utah. He was the pharmacy
coordinator for the Association for Utah Community Health for
three years and worked as a pharmacy technician for Rx America.
Jared has an Associates Degree in Science, is completing a
bachelors degree in Business Information Systems, and is working
towards an MBA.
Jason Williams is currently working as a Network Administrator
for the University of Utah and Bonneville Communications. He was
the manager for Advantage Networks from January to September
1999, the general manager for Maxwell Asphalt from January 1996
to January 1999, and employed by Ampco Parking Systems.
ITEM 10. EXECUTIVE COMPENSATION
The Company has no agreement or understanding, express or
implied, with any officer, director, or principal stockholder, or
their affiliates or associates, regarding employment with the
Company or compensation for services. There is no understanding
between the Company and any of its present stockholders regarding
the sale of a portion or all of the common stock currently held
by them in connection with any future participation by the
Company in a business. There are no other plans, understandings,
or arrangements whereby any of the Company's officers, directors,
or principal stockholders, or any of their affiliates or
associates, would receive funds, stock, or other assets in
connection with the Company's participation in a business. No
advances have been made or contemplated by the Company to any of
its officers, directors, or principal stockholders, or any of
their affiliates or associates.
There is no policy that prevents management from adopting a plan
or agreement in the future that would provide for cash or stock
based compensation for services rendered to the Company.
On acquisition of a business, it is possible that current
management will resign and be replaced by persons associated with
the business acquired, particularly if the Company participates
in a business by effecting a stock exchange, merger, or
consolidation. In the event that any member of current
management remains after effecting a business acquisition, that
member's time commitment and compensation will likely be adjusted
based on the nature and location of such business and the
services required, which cannot now be foreseen.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of December 31, 1999, the
number and percentage of the outstanding shares of common stock
which, according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each executive officer, (iii) all current
directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the outstanding common stock.
Except as otherwise indicated, the persons named in the table
have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
8
<PAGE>
Common Percent of
Shares Class
Principal
Stockholders
Kent N. Dixon (1) 160,000 4.6%
2751 Golden Eye Drive
Sandy, Utah 84093
Jared Southwick (1) 1,100 .03%
311 S. State Street,
Suite 440
Salt Lake City, UT 84111
Jason Williams (1) 0 0
311 S. State Street, Suite 440
Salt Lake City, UT 84111
Kevin K. Dixon (1) 0 0
2751 Golden Eye Drive
Sandy, Utah 84093
Julie S. Dixon 160,000 4.6%
2751 Golden Eye Drive
Sandy, Utah 84093
Pam Jowett 750,000 21.6%
2508 S. 1300 East
Salt Lake City, UT 84106
Lynn Dixon 750,000 21.6%
311 S. State Street,
Suite 440
Salt Lake City, UT 84111
Cherry Hill, Inc. 750,000 21.6%
295 Greenwich Street,
Suite 131
New York, NY 10007
Melissa Epperson 750,000 21.6%
34 North Fox Hill Road
North Lake City, UT 84054
All officers and directors 321,100 9.2%
as A group (5 persons)
(1) These persons are all of the officers and directors of the
Company. Kent N. Dixon is married to Julie S. Dixon, who owns
160,000 shares. Accordingly, Mr. Dixon may be deemed to have
shared voting and investment control of such shares.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Copies of the following documents are included as exhibits to
this report pursuant to Item 601 of Regulation S-B. The
exhibits appear at the end of this report beginning with the
Index to Exhibits on page 18.
Exhibits.
9
<PAGE>
Exhibit SEC Ref. Title of Document Location*
No. No.
1 (3)(i) Articles of Incorporation 12
2 (3)(ii) By-Laws 15
3 (10) Articles of Merger 23
4 (27) Financial Data Schedules 25
* The Financial Data Schedule is presented only in the
electronic filing with the Securities and Exchange Commission.
FORM 8-K FILINGS
No reports on Form 8-K were filed in the last calendar quarter of
1998.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
APHRODITE SOFTWARE CORPORATION
Date: June 20, 2000 By: /s/ Kent N. Dixon, President
In accordance with the Exchange Act, this report has been
signed by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Dated: June 20, 2000 /s/ Kent N. Dixon, Director
Dated: June 20, 2000 /s/ Jared Southwick, Director
Dated: June 19, 2000 /s/ Jason Williams, Director
10
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
FINANCIAL STATEMENTS
February 28, 1999
C O N T E N T S
Independent Auditors' Report 3
Balance Sheet 4
Statements of Operations 5
Statements of Stockholders' Equity (Deficit) 6
Statements of Cash Flows 7
Notes to the Financial Statements 8
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Aphrodite Software Corporation
(A Development Stage Company)
Sandy, Utah
We have audited the accompanying balance sheet of Aphrodite
Software Corporation (a development stage company) as of
February 28, 1999, and the related statements of operations,
stockholders' equity (deficit), and cash flows for the years
ended February 28, 1999 and 1998. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Aphrodite Software Corporation as of February 28,
1999 and the results of its operations and its cash flows for
the years ended February 28, 1999 and 1998 in conformity with
generally accepted accounting principles.
The accounting financial statements have been prepared
assuming that the Company will continue as a going concern.
As discussed in Note 2 to the financial statements, the
Company is a development stage company with no significant
operating revenues to date, which raises substantial doubt
about its ability to continue as a going concern.
Management's plans in regard to these matters are also
described in Note 2. The financial statements to not include
any adjustments that might result from the outcome of this
uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
November 23, 1999
F-2
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
Balance Sheet
February 28,
1999
CURRENT ASSETS
Cash $ -
Total Current Assets -
TOTAL ASSETS $ -
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,562
Total Current Liabilities 1,562
Total Liabilities 1,562
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $-0- par value, 50,000,000 shares
authorized; 480,000 shares issued and outstanding 12,000
Additional paid-in capital -
Deficit accumulated during the development
stage (13,562)
Total Stockholders' Equity (Deficit) (1,562)
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ -
The accompanying notes are an integral part of these financial
statements.
F-3
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
Statements of Operations
From
Inception on
February 20,
For the Years Ended 1987 Through
February 28, February 28,
1999 1998 1999
(Unaudited)
REVENUES $ - $ - $ -
EXPENSES
General and administrative 123 151 13,562
Total Expenses 123 151 13,562
LOSS FROM OPERATIONS (123) (151) (13,562)
NET LOSS $ (123) $ (151) $(13,562)
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
From Inception on February 20, 1987 through February 28, 1999
Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage
Balance at inception on February 20, 1987 - $ - $ -
Common stock issued for cash at
$0.025 per share 480,000 12,000 -
Net loss from inception on February 20,
1987 through February 28, 1997 - - (13,288)
Balance, February 28, 1997 480,000 12,000 (13,288)
Net loss for the year ended
February 28, 1998 - - (151)
Balance, February 28, 1998 480,000 12,000 (13,439)
Net loss for the year ended
February 28, 1999 - - (123)
Balance, February 28, 1999 480,000 $ 12,000 $ (13,562)
The accompanying notes are an integral part of these financial
statements.
F-5
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
Statements of Cash Flows
Deficit
Accumulated
During the
Common Stock Development
Shares Amount Stage
(Unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (123) $ (151) $ (13,562)
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable 123 151 1,562
Net Cash Used by Operating Activities - - (12,000)
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common stock - - 12,000
Net Cash Provided by Financing
Activities - - 12,000
INCREASE (DECREASE) IN CASH - - -
CASH AT BEGINNING OF PERIOD - - -
CASH AT END OF PERIOD $ - $ - $ -
SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid for:
Taxes $ - $ - $ -
Interest $ - $ - $ -
The accompanying notes are an integral part of these
financial statements.
F-6
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Aphrodite Software Corporation (the Company) was
organized February 20, 1987 under the laws of the
State of Utah for the purpose of developing and
marketing computer software and all manner of
computer related products and services. The
Company has had no significant operations since
inception and is considered a development stage
company in accordance with Statement of Financial
Accounting Standards No. 7.
b. Provision for Taxes
At February 28, 1999, the Company had net operating
loss carryforwards of approximately $13,000 that
may be offset against future taxable income through
2014. No tax benefit has been reported in the
financial statements, because the Company believes
there is a 50% or greater chance the carryforwards
will expire unused. Accordingly, the potential tax
benefits of the net operating loss carryforwards
are offset by a valuation allowance of the same
amount.
c. Accounting Method
The financial statements are prepared using the
accrual method of accounting. The Company has
elected a February 28 year end.
d. Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make estimates
and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial
statements and the reported amounts of revenues and
expenses during the reporting period. Actual
results could differ from those estimates.
e. Cash and Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when
purchased to be cash equivalents.
f. Basic Loss Per Share
Basic loss per share has been calculated based on
the weighted average number of shares of common
stock outstanding during the period.
g. Revenue Recognition Policy
The Company currently has no source of revenues.
Revenue recognition policies will be determined
when principal operations begin.
F-7
<PAGE>
APHRODITE SOFTWARE CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared
using generally accepted accounting principles
applicable to a going concern which contemplates
the realization of assets and liquidation of
liabilities in the normal course of business. The
Company has not established revenues sufficient to
cover its operating costs and allow it to continue
as a going concern. Management intends to seek a
merger with an existing, operating company, in the
interim it has committed to meeting the Company's
minimal operating expenses.
NOTE 3 - SUBSEQUENT EVENT
On October 2, 1999, the Company issued 3,000,000
shares of common stock for $20,000 cash
consideration.
F-8
<PAGE>
