SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
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. 33-55254-42
QUANTITATIVE METHODS CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 87-0485310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6200 Taschereau Blvd. East
Suite 203
Brossard, (Quebec)
CANADA J4W 3J8
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code (450) 676-6060
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [X]
As of March 31, 1999, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $14,343,750
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of March 31, 1999
- ------------------------------------- --------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK 9,300,000 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
Form 8-K filed January 22, 1999
<PAGE>
PART I
ITEM 1. Business.
Quantitative Methods Corporation (the "Company" or "QTTM"), was
incorporated under the laws of Nevada on July 26, 1990.
In November 1995, the Company, in consideration of the issuance of
150,000 authorized but unissued shares, acquired $75,000 from Capital General
Corporation for $.50 per share. The price of the shares was arbitrarily decided
upon by both parties. After the completion of the stock purchase, Capital
General became the holder of approximately 49.6% of the outstanding shares of
the Company.
As of December 31, 1998 the Company was in the developmental stage, and
its operations to that date had been limited to the aforementioned sale of
shares to Capital General Corporation and the gift of shares to the minority
shareholders. The Company was then in the process of investigating potential
business ventures which, in the opinion of management, would provide a source of
eventual profit to the Company.
Pursuant to an Agreement made and entered into on January 8, 1999
between the Company and SoftGuard Enterprises, Inc., ("SoftGuard") a corporation
incorporated under the laws of Canada and the shareholders of SoftGuard,
collectively (the "Sellers"), the Company issued and delivered on January 12,
1999, 7,650,000 shares of its Common Stock bearing a restrictive legend to
Sellers, in exchange for which issuance, QTTM acquired all of the outstanding
shares of SoftGuard.
The transaction was exempt from the registration requirements of the
Securities Act of 1933 by virtue of Section 4(2) thereof.
Following the above transaction the former shareholders of SoftGuard
owned 82% of the outstanding shares of the Company.
SoftGuard was incorporated on June 23, 1995 to engage in the business
of technical product development and marketing of computer software and Internet
services. SoftGuard is a development stage enterprise and has had no revenues to
date.
Since its formation SoftGuard has been developing technologies for use
in the field of information systems management and security. This work has led
to the creation of a working prototype of its copyrighted (Canada) Software
License Notification System ("SLNS"). The SLNS will enable customer/users to
avoid the use of improperly licensed software and provide timely access to
product upgrade and security information.
Management expects to be able to expand the SLNS technology to support
customer/users in the secure circulation of digital information, including legal
documents, memoranda, engineering specifications and sound files.
<PAGE>
SoftGuard has submitted a patent application for SLNS to the U.S.
Department of Commerce, Patent and Trademark Office. The application has been
examined and allowed for issuance as a patent by the Patent and Trademark
Office. SoftGuard also has patent applications pending in Canada and the
contracting states of the European Patent Convention.
There are currently five employees of the Company inclusive of officers
of the Company.
The Agreement of January 8, 1999 was attached as an exhibit to the
Company's electronic filing of Form 8-K on January 21, 1999.
ITEM 2. Properties.
As of December 31, 1998 the Company had $0 in cash and no other
properties. It utilized space on a rent-free basis in the office of its
principal shareholder, Capital General Corporation.
ITEM 3. Legal Proceedings.
During the period prior to December 31, 1998 there have been numerous
legal proceedings against the Company and its former directors and officers.
These have been fully reported in previous reports filed with the Securities and
Exchange Commission. None of the legal proceedings are currently pending.
No legal proceedings have been incurred as a result of the Agreement
dated January 8, 1999.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to the Company's security holders for a vote
during the fiscal year ended December 31, 1998.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.
As of December 31, 1998 there was no trading market for the Company's
$.001 par value common stock nor was there a trading market for the Company's
stock prior to that date.
As of March 29, 1999, there were 403 record holders of the Company's
common stock. The Company has not previously declared or paid any dividends on
its common stock and does not anticipate declaring any dividends in the
foreseeable future.
The Company's common stock commenced trading on the NASD Bulletin Board
on January 27, 1999 under the symbol "QTTM". The aggregate market value of the
stock held by non-affiliates on that date was $14,343,750.
<PAGE>
ITEM 6. Selected Financial Data.
QUANTITATIVE METHODS CORPORATION
SUMMARY OF OPERATIONS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Total Assets 0 75,000 75,000 75,000 0
Revenues 0 0 0 0 0
Operating Expenses 0 0 0 0 0
Net Earnings (Loss) (75,000) 0 0 0 0
Per Share Data
Earnings (Loss) (.07) 0 0 0 0
Average Common Shares
Outstanding 1,150,000 1,150,000 1,150,000 1,018,750 0
.............................. ................ ................. ................ ................ ................
</TABLE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
As of December 31, 1998, the Company had no operational history and had
not engaged in business of any kind. All risks inherent in new and inexperienced
enterprises were, and still are, inherent in the Company's business.
As a consequence of the Agreement dated January 8, 1999, the management
and operations of the Company changed to give effect to the new business of the
Company as described in Item 1.
Management believes that the SLNS technology, while as yet untested in
the marketplace, represents a viable business opportunity. The SLNS will enable
the corporate or other user to ascertain if their systems contain unlicensed,
unauthorized or other "rogue" software. Management believes that the market for
this product is significant. Currently Management is unaware of any other
product currently available which addresses this need .
Extending the technology of SLNS, the Company is beginning the
development of an additional product which will support users in the secure
circulation of digital information, including legal documents, memoranda,
engineering specifications, and graphic and sound files.
Impact of the Year 2000 Issue
The "Year 2000 problem" arose because many existing computer programs
use only the last two digits to refer to a year. Therefore, these computer
programs do not properly recognize a year that begins with "20" instead of the
familiar "19". If not corrected, many computer applications could fail or create
erroneous results. The extent of the potential impact of the Year 2000 problem
is not yet known, and if not timely corrected, it could affect the global
economy.
The effects of the Year 2000 issue may be experienced before, on, or
after January 1, 2000, and, if not addressed, the impact on operations and
financial reporting may range from minor errors
<PAGE>
to significant systems failure which could affect an entity's ability to conduct
normal business operations. It is not possible to be certain that all aspects of
the Year 2000 issue affecting the entity, including those related to the efforts
of customers, suppliers, or other third parties, will be fully resolved. The
Company is working to minimize the effects of the issue on its own computer
systems.
ITEM 8. Financial Statements and Supplementary Data.
See Item 14.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
ITEM 10. Directors and Executive Officers of the Registrant.
The following table shows the positions held by the Company's officers
and directors during the year ended December 31, 1998. Directors are appointed
annually and serve until the next annual meeting of the Company's stockholders,
and until their successors have been elected and have qualified. Officers are
appointed to their positions, and continue in such positions, at the discretion
of the directors.
Name Age Position
Krista Nielson 34 President, Director
(resigned January 12, 1999)
Sasha Belliston 24 Secretary/Treasurer, Director
(resigned January 12, 1999)
KRISTA NIELSON
was a Director of the Company since its inception until her resignation
as an officer and Director of the Company on January 12, 1999. In addition to
her management position with the Company, she has been since 1986 an officer and
director of Capital General Corporation, a Utah-based financial consulting firm,
and has been involved in the organization and promotion of various shell
companies. Ms. Nielson received a Business degree from Salt Lake Community
College in 1987. She serves as an officer and/or director in the following
private corporations: Yeaman Enterprises, Inc. and Universal Associates, Inc.,
family holding companies, Yeaman Auto Sales, Inc., an automobile dealership
company, Four Star Ranch, Inc., a farmland development company, Creative
Financial Corporation and Visual Impact Corporation, financial consulting
companies, and National Stock Transfer, Inc., a stock transfer agency company.
Ms. Nielson devotes her time primarily to her role as Vice President of Capital
General and to the financial consulting activities in which Capital General
engages.
SASHA BELLISTON
was a Director of the Company from April 22, 1997 until her resignation as
an officer and Director on January 12, 1999. In addition to her management
position with the Company, she has
<PAGE>
been Vice President of Capital General since April, 1997. For the past five
years, Ms. Belliston has devoted her time primarily as a cosmetologist and
homemaker. Ms. Belliston serves as an officer and/or director in the following
private corporations: Yeaman Enterprises, Inc. and Universal Associates, Inc.,
family holding companies, Four Star Ranch, Inc., a farmland development company,
Argon Financial Corporation and Public Financial Corporation, investment
companies. Ms. Belliston dedicates her time primarily to her role as President
of Four Star Ranch and the farming activities in which Four Star Ranch engages.
Previous management of the Company had, in their various capacities at
Capital General over the past ten years, assisted in the organization of
approximately 75 corporations which are in varying stages of development and
approximately 50 of such corporations have completed a merger/acquisition
transaction.
On January, 14, 1999, following the resignation of Ms. Nielson and Ms.
Belliston, new Directors and Officers were appointed, who will serve until the
next annual meeting of the Company's stockholders. These new Directors and
Officers are as follows:
Name Age Position
Robert L. Seaman 57 President/Director
Helga Leuthe 39 Secretary/Treasurer/Director
The resignations of Ms. Nielsen and Ms. Belliston, as well as the
appointment of Ms. Leuthe and Mr. Seaman as officers and directors, was
previously reported by Form 8-K filed on January 22, 1999.
ROBERT L. SEAMAN
For the past five years Robert L. Seaman has been engaged in the
private practice of law maintaining his office, at Suite 3200, 515 Madison Ave.,
New York, NY 10022. Mr. Seaman also serves as a director of United Energy
Corporation of Secaucus, N.J.
HELGA LEUTHE
Ms. Leuthe has been the Secretary/Treasurer and a shareholder of SoftGuard
since inception. Since September 1995, she has been active in the management and
financial activities of SoftGuard, ranging from the daily financial operations
to securing financing for the company. Ms. Leuthe has worked in the field of
accounting and finance for several Canadian corporations, including the public
company Technical Maintenance Corporation (Nevada). She is also an officer and
director of Egret, Inc. a public company which files with the SEC.
ITEM 11. Executive Compensation.
During the year ended December 31, 1998 the Company had no arrangements
for the remuneration of its officers and directors, except that they were
entitled to receive reimbursement for actual, demonstrable out-of-pocket
expenses, including travel expenses, if any, made on the Company's behalf in the
investigation of business opportunities.
<PAGE>
The Company will pay compensation to the officers and directors elected
in 1999, if at all, at a rate yet to be determined by the board of directors.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of March 31, 1999, information
regarding the beneficial ownership of shares by each person known by the Company
to own more than five percent of the outstanding shares, by each of the
directors/officers, and by the directors/officers as a group.
HOLDERS OF GREATER THAN 5% OF CLASS
<TABLE>
<CAPTION>
Name & Address Amount of
Title of Class of Beneficial Owner Beneficial Ownership Percent of Class
<S> <C> <C> <C>
Common Stock Haven Trading Ltd. 4,500,000 48.4%
Sea Meadow House
Blackburne Highway
P.O. Box 116
Roadtown, Tortola BWI
Common Stock Capital General Corporation 700,000 7.5%
3098 S. Highland Dr. Suite 460
Salt Lake City, UT 84106
TOTAL OF ALL SHAREHOLDINGS 5,200,000 55.9%
OF GREATER THAN 5%
DIRECTORS AND OFFICERS
Common Stock Helga Leuthe 400,000 4.3%
6200 Taschereau Blvd East
Suite 203
Brossard, Quebec, Canada
J4W 3J8
(Director & Officer)
Common Stock Robert L. Seaman 400,000 4.3%
515 Madison Ave., Suite 3200
New York, NY 10022
(Director & Officer)
TOTAL SHAREHOLDINGS OF
DIRECTORS & OFFICERS 800,000 8.6%
</TABLE>
<PAGE>
ITEM 13. Certain Relationships and Related Transactions.
As of March 31, 1999 no officer, director, nominee for election as a
director or associate of such officer, director or nominee is, or was, in debt
to the company or engaged in any other transactions, with the Company.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
The Company filed a Form 8K on January 21, 1999 wherein it reported as
Item 1, the change in control of the Company; and as Item 6, the resignation of
directors and officers and the appointment of new directors and officers.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
QUANTITATIVE METHODS CORPORATION
(Registrant)
By __________________________________________April 12, 1999
ROBERT L. SEAMAN, President (Date)
By ___________________________________________April 12, 1999
HELGA LEUTHE, Principal Financial Officer (Date)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By ____________________________________________April 12, 1999
ROBERT L. SEAMAN, Director (Date)
By ____________________________________________April 12, 1999
HELGA LEUTHE, Director (Date)
<PAGE>
SMITH & COMPANY
A PROFESSIONAL CORPORATION OF
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF: 10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF SALT LAKE CITY, UTAH 84101
CERTIFIED PUBLIC ACCOUNTANTS TELEPHONE: (801) 575-8297
UTAH ASSOCIATION OF FACSIMILE: (801) 575-8306
CERTIFIED PUBLIC ACCOUNTANTS E-MAIL: [email protected]
- --------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Quantitative Methods Corporation (A Development Stage Company)
We have audited the accompanying balance sheets of Quantitative Methods
Corporation (a development stage company) as of December 31, 1998 and 1997, and
the related statements of operations, changes in stockholders' equity, and cash
flows for the years ended December 31, 1998, 1997, and 1996, and for the period
of July 26, 1990 (date of inception) to December 31, 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 Quantitative Methods
Corporation (a development stage company) as of December 31, 1998 and 1997, and
the results of its operations, changes in stockholders' equity, and its cash
flows for the years ended December 31, 1998, 1997, and 1996, and for the period
of July 26, 1990 (date of inception) to December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has an accumulated deficit of $76,000 at December 31, 1998 and has
no operations. The Company has suffered losses from operations and has a
substantial need for working capital. This raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 6 to the financial statements. The accompanying
financial statements do not include any adjustments that may result from the
outcome of this uncertainty.
Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
February 26, 1999
F-1
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1998 1997
----------------- -----------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 0 $ 75,000
----------------- -----------------
TOTAL CURRENT ASSETS 0 75,000
----------------- -----------------
$ 0 $ 75,000
================= =================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 0 $ 0
----------------- -----------------
TOTAL CURRENT LIABILITIES 0 0
STOCKHOLDERS' EQUITY
Common Stock $.001 par value:
Authorized - 25,000,000 shares
Issued and outstanding 1,150,000 shares 1,150 1,150
Additional paid-in capital 74,850 74,850
Deficit accumulated during
the development stage (76,000) (1,000)
----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY 0 75,000
----------------- -----------------
$ 0 $ 75,000
================= =================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
7/26/90
(Date of
Years Ended December 31, inception) to
1998 1997 1996 12/31/98
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0
-------------- -------------- -------------- --------------
GROSS PROFIT 0 0 0 0
General & administrative
expenses 75,000 0 0 76,000
-------------- -------------- -------------- --------------
NET LOSS $ (75,000) $ 0 $ 0 $ (76,000)
============== ============== ============== ==============
Net income (loss) per weighted
average share $ (.07) $ .00 $ .00
============== ============== ==============
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 1,150,000 1,150,000 1,150,000
============== ============== ==============
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During
Par Value $0.001 Paid-in Development
Shares Amount Capital Stage
-------------- -------------- ----------------- --------------
Balances at 7/26/90
<S> <C> <C> <C> <C>
(Date of inception) 0 $ 0 $ 0 $ 0
Issuance of common
stock (restricted)
at $.001 per share
at 7/26/90 1,000,000 1,000 0
Net loss for period (1,000)
-------------- -------------- ----------------- --------------
Balances at 12/31/90 1,000,000 1,000 0 (1,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/91 1,000,000 1,000 0 (1,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/92 1,000,000 1,000 0 (1,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/93 1,000,000 1,000 0 (1,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/94 1,000,000 1,000 0 (1,000)
Issuance of common
stock (restricted)
at $.50 per share
at 11/17/95 150,000 150 74,850
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/95 1,150,000 1,150 74,850 (1,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/96 1,150,000 1,150 74,850 (1,000)
Net income for year 0
-------------- -------------- ----------------- --------------
Balances at 12/31/97 1,150,000 1,150 74,850 (1,000)
Net loss for year (75,000)
-------------- -------------- ----------------- --------------
Balances at 12/31/98 1,150,000 $ 1,150 $ 74,850 $ (76,000)
============== ============== ================= ==============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
7/26/90
(Date of
Years Ended December 31, Inception) to
1998 1997 1996 12/31/98
-------------- -------------- -------------- --------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income (loss) $ (75,000) $ 0 $ 0 $ (76,000)
Adjustments to reconcile
net income (loss) to
cash used by operating
activities 0 0 0 0
-------------- -------------- -------------- --------------
NET CASH USED BY
OPERATING ACTIVITIES (75,000) 0 0 (76,000)
INVESTING ACTIVITIES 0 0 0 0
-------------- -------------- -------------- --------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0 0
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 0 0 76,000
-------------- -------------- -------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 0 76,000
-------------- -------------- -------------- --------------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS (75,000) 0 0 0
Cash and cash equivalents
at beginning of period 75,000 75,000 75,000 0
-------------- -------------- -------------- --------------
CASH & CASH EQUIVALENTS
AT END OF YEAR $ 0 $ 75,000 $ 75,000 $ 0
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Accounting Methods:
The Company recognizes income and expenses based on the
accrual method of accounting.
Dividend Policy:
The Company has not yet adopted any policy regarding payment
of dividends.
Income Taxes:
The Company records the income tax effect of transactions in
the same year that the transactions enter into the
determination of income, regardless of when the transactions
are recognized for tax purposes. Tax credits are recorded in
the year realized. Since the Company has not yet realized
income as of the date of this report, no provision for income
taxes has been made.
In February, 1992, the Financial Accounting Standards Board
adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, which supersedes substantially
all existing authoritative literature for accounting for
income taxes and requires deferred tax balances to be adjusted
to reflect the tax rates in effect when those amounts are
expected to become payable or refundable. The Statement was
applied in the Company's financial statements for the fiscal
year commencing January 1, 1993.
At December 31, 1998 a deferred tax asset has not been
recorded due to the Company's change in control and lack of
operations to provide income to use the net operating loss
carryover of $1,000 which will expire December 31, 2005 and
the loss of $75,000 which expires December 31, 2018.
NOTE 2: DEVELOPMENT STAGE COMPANY
The Company was incorporated under the laws of the State of
Nevada on July 26, 1990 and has been in the development stage
since incorporation. The Company intends to enter into the
business of its subsidiary as discussed in Note 5.
NOTE 3: CAPITALIZATION
On the date of incorporation, the Company sold 1,000,000
shares of its common stock to Capital General Corporation for
$1,000 cash, for an average consideration of $.001 per share.
On November 17, 1995, the Company sold an additional 150,000
shares of its common stock to Capital General Corporation for
$75,000 cash, for an average consideration of $.50 per share.
The Company's authorized stock includes 25,000,000 shares of
common stock at $.001 par value.
NOTE 4: RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real property. Office
services were provided through December 31, 1998, without
charge, by Capital General Corporation. Such costs are
immaterial to the financial statements, and, accordingly, have
not been reflected therein. The officers and directors of the
Company are involved in other business activities and may, in
the future, become involved in other business opportunities.
If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company
and their other business interests. The Company has not
formulated a policy for the resolution of such conflicts.
During 1998, the Company paid $75,000 to Capital General for
its assistance in finding the business opportunity discussed
in Note 5.
NOTE 5: SUBSEQUENT EVENTS
Pursuant to an Agreement made and entered into on January 8,
1999 between the Company and SoftGuard Enterprises, Inc.,
("SoftGuard") a corporation incorporated under the laws of
Canada and the shareholders of SoftGuard, collectively (the
"Sellers"), the Company issued and delivered on January 12,
1999, 7,650,000 shares of its Common Stock bearing a
restrictive legend to Sellers, in exchange for which issuance,
the Company acquired all of the outstanding shares of
SoftGuard.
F-6
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 1998
NOTE 5: SUBSEQUENT EVENTS (continued)
The transaction was exempt from the registration requirements
of the Securities Act of 1933 by virtue of Section 4(2)
thereof.
Following the above transaction the former shareholders of
SoftGuard owned 82% of the outstanding shares of the Company.
SoftGuard was incorporated on June 23, 1995 to engage in the
business of technical product development and marketing of
computer software and Internet services. SoftGuard is a
development stage enterprise and has had no revenues to date.
Since its formation SoftGuard has been developing technologies
for use in the field of information systems management and
security. This work has led to the creation of a working
prototype of its copyrighted (Canada) Software License
Notification System ("SLNS"). The SLNS will enable
customer/users to avoid the use of improperly licensed
software and provide timely access to product upgrade and
security information.
Management expects to be able to expand the SLNS technology to
support customer/users in the secure circulation of digital
information, including legal documents, memoranda, engineering
specifications and sound files.
SoftGuard has submitted a patent application for SLNS to the
U.S. Department of Commerce, Patent and Trademark Office. The
application has been examined and allowed for issuance as a
patent by the Patent and Trademark Office. SoftGuard also has
patent applications pending in Canada and the contracting
states of the European Patent Convention.
NOTE 6: GOING CONCERN
The Company's financial statements have been presented on
the basis that it is a going concern, which contemplates the
realization of assets and satisfaction of liabilities in the
normal course of business. At December 31, 1998, the Company
has an accumulated deficit of $76,000.
The Company's continued existence is dependent on its ability
to generate sufficient cash flow to cover operating expenses
and to invest in future operations. Management has prepared
the following plan to address the Company's ability to
continue as a going concern:
Management believes that the acquisition of
SoftGuard discussed in Note 5 will allow the
Company to fund operations. The Company may also
sell its common stock in the future to raise
working capital.
F-7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from Quantitative Methods Corporation December 31, 1998
financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000894561
<NAME> Quantitative Methods Corporation
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