UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Report of Event occurring on January 12, 1999
Commission File No. 33-55254-42
QUANTITATIVE METHODS CORPORATION
NEVADA 87-0485310
(State or other jurisdiction (I.R.S. Employer Identification of
incorporation or organization) Number)
3098 S. Highland Drive
Suite 460
Salt Lake City, Utah 84106
(Address of principal executive offices)
Registrant's telephone number, including area code (801) 485-7775
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ITEM 1. Change in Control of Registrant.
Pursuant to an Agreement made and entered into on January 8, 1999 between
Quantitative Methods Corporation ("QTTM") a Nevada corporation and SoftGuard
Enterprises, Inc., ("SoftGuard") a corporation incorporated under the laws of
Canada and the shareholders of SoftGuard, collectively (the "Sellers"), QTTM
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 QTTM.
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.
A copy of the Agreement dated January 8, 1999 is attached Exhibit A.
ITEM 2. Acquisition or Disposition of Assets.
See Item 1.
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ITEM 6. Registration of Directors.
On January 12, 1999 Krista Nielson and Sasha Belliston resigned as officers and
directors of Quantitative Methods Corporation. Their resignation letters are
attached as Exhibit B.
The following persons have been appointed as directors of the Registrant:
Helga Leuthe
Robert L. Seaman
ITEM 7. Financial Statements and Exhibits.
Financial statements required to be filed will be filed not later than March 23,
1999.
Any exhibits required to be filed herein and not now included will be filed as
an amendment within the allowed time period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
hereunto duly authorized
Quantitative Methods Corporation
(Registrant)
Date: January 21, 1999 By: _______________________________
Robert L. Seaman
President
EXHIBIT INDEX
EXHIBIT A: ITEM 1. ACQUISITION AGREEMENT
EXHIBIT B: ITEM 6. LETTER OF RESIGNATIONS
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EXHIBIT "A"
AGREEMENT
THIS AGREEMENT is made this 8th day of January, 1999 by and among
Quantitative Methods Corporation, a Nevada corporation, 3098 So. Highland Drive,
Suite 460, Salt Lake City, Utah, 84106, hereinafter called "QTTM", Softguard
Enterprises Inc., a corporation organized under the laws of the country of
Canada, 6200 Taschereau Blvd. East, Suite 203, Brossard, Quebec, Canada, J4W
3J8, hereinafter called "SOFTGUARD", and the shareholders listed on Schedule A
attached, hereinafter called "SELLING SHAREHOLDERS".
RECITALS:
WHEREAS, QTTM desires to acquire 100% of the issued and outstanding
shares of the common stock of SOFTGUARD, in exchange for 7,650,000 authorized
but unissued shares of the .001 par value common stock of QTTM, pursuant to a
plan of reorganization within the meaning of IRC (1986), Section 368(a)(1)(B),
as amended; and
WHEREAS, SELLING SHAREHOLDERS desire to exchange 100% of the issued and
outstanding shares of the common stock of SOFTGUARD, currently owned by SELLING
SHAREHOLDERS, in exchange for said 7,650,000 shares of QTTM.
NOW THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, and to consummate the foregoing plan of
reorganization, the parties hereby adopt said plan of organization and agree as
follows:
ARTICLE I
EXCHANGE OF SECURITIES
1.01 Issuance of QTTM Shares. Subject to all of the terms and
conditions of this Agreement, QTTM agrees to issue to SELLING SHAREHOLDERS
7,650,000 fully paid and nonassessable unregistered shares of QTTM common stock
in exchange for 100% of the outstanding SOFTGUARD common stock, 7,650,000
shares, all of which are currently owned by SELLING SHAREHOLDERS.
1.02 Transfer of SOFTGUARD Shares. In exchange for QTTM's stock being
issued to SELLING SHAREHOLDERS as above described, SELLING SHAREHOLDERS shall on
the closing date and concurrent with such issuance of QTTM's common stock,
deliver to QTTM 100% of the outstanding common stock of SOFTGUARD.
ARTICLE II
INDEMNIFICATION OF FINDER / NO AFFILIATE
2.01 Indemnification of Finder/Broker. Negotiations relative to this
Agreement and related transactions have been conducted with the assistance of
Capital General Corporation who is acting as a broker, finder and consultant on
behalf of QTTM, and Haven Trading Ltd. on behalf of SOFTGUARD
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and the SELLING SHAREHOLDERS. SOFTGUARD, QTTM and SELLING SHAREHOLDERS agree to
hold harmless and indemnify Capital General Corporation and Haven Trading Ltd.
and their respective officers and directors from any and all claim, demand,
cause of action or suit raised or filed in connection with the within Agreement
or any related transaction or the operation or promotion of SOFTGUARD and/or
QTTM or the trading of their shares.
2.02 No Affiliate. All parties agree that after the exchange of shares
as provided above, that neither Capital General Corporation nor any of its
officers and directors will have any ongoing or other business relationship with
any of the parties to this Agreement, or their officers, directors and
promoters, nor any family or other relationships with such, and therefore have
no ability to exercise any control or influence over the management and conduct
of QTTM's business and therefore are non affiliates of QTTM.
ARTICLE III
REPRESENTATIONS, AGREEMENTS AND WARRANTIES OF
SELLING SHAREHOLDERS AND SOFTGUARD
SELLING SHAREHOLDERS AND SOFTGUARD hereby represent, agree and warrant that:
3.01 Organization. SOFTGUARD is a corporation duly organized, validly
existing, and in good standing under the laws of Canada, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, is duly qualified to do business and is in good standing in
any jurisdiction its business requires qualification.
3.02 Capital. The authorized capital stock of SOFTGUARD consists of
unlimited shares of common stock, of which 7,650,000 shares are currently issued
and outstanding. All of the issued and outstanding shares are validly issued,
fully paid and nonassessable.
3.03 Subsidiaries. SOFTGUARD does not have any subsidiaries.
3.04 Directors and Officers. Exhibit 3.04 to this Agreement contains
the names and titles of all directors and officers of SOFTGUARD as of the date
of this Agreement.
3.05 Financial Statements. Exhibit 3.05 to this Agreement includes the
unaudited financial statements of SOFTGUARD as of June 30, 1998.
3.06 Absence of Changes. Since the date of SOFTGUARD's most recent
financial statements included in Exhibit 3.05 there has not been any change in
its financial condition or operations, except for changes in the ordinary course
of business.
3.07 Absence of Undisclosed Liabilities. As of the date of SOFTGUARD's
most recent balance sheet included in Exhibit 3.05 it did not have any material
debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
in such balance sheet.
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3.08 Tax Returns. Within the times and in the manner prescribed by law,
SOFTGUARD has filed all federal, provincial and local tax returns required by
law, has paid all taxes, assessments and penalties due and payable and has made
adequate provision on its most recent balance sheet for any unpaid taxes. There
are no present disputes as to taxes of any nature payable by SOFTGUARD.
3.09 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, QTTM
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of SOFTGUARD. SOFTGUARD shall make
available to QTTM and/or its attorneys all books and records of SOFTGUARD. If
the transaction contemplated hereby is not completed, all documents received by
QTTM and/or its attorneys shall be returned to SOFTGUARD and all information so
received shall be treated as confidential.
3.10 Patents, Trade Names and Rights. SOFTGUARD owns or holds all
necessary patents, trademarks, service marks, trade names, copyrights and other
rights necessary to the conduct or proposed conduct of its business.
3.11 Compliance with Laws. SOFTGUARD has complied with, and is not in
violation of, applicable federal, provicial or local statutes, laws and
regulations affecting its properties or the operation of its business.
3.12 Litigation. SOFTGUARD is not a party to, nor to the best of its
knowledge is there pending or threatened, any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation
concerning its business, assets or financial condition. SOFTGUARD is not in
default with respect to any order, writ, injunction or decree of any federal,
provincial, local or foreign court or agency, nor is it engaged in any lawsuits
to recover monies due to it.
3.13 Authority. The Board of Directors of SOFTGUARD authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein and has full power and authority to execute, deliver and
perform this Agreement and the transactions contemplated herein.
3.14 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by SOFTGUARD and the performance of its obligations hereunder in
the time and manner contemplated will not cause, constitute or conflict with or
result in (I) any breach of the provisions of any license, indenture, mortgage,
charter, instrument, certificate of incorporation, bylaw or other agreement or
instrument to which it is a party or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be required,
(ii) an event that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation, or (iii) an event that would result in the creation or imposition of
any lien, charge or encumbrance on any asset.
3.15 Full Disclosure. None of the representations and warranties made
by SELLING SHAREHOLDERS or SOFTGUARD herein or in any exhibit, certificate or
memorandum furnished or to be furnished by SELLING SHAREHOLDERS or SOFTGUARD, or
on either's behalf, contains or will contain any untrue statement of material
fact, or omits any material fact, the omission of which would be misleading.
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3.16 Assets. SOFTGUARD has good and marketable title to all of its
property free and clear of any and all liens, claims or encumbrances except as
may be indicated in Exhibit 3.05.
3.17 Indemnification. SELLING SHAREHOLDERS and SOFTGUARD agree to
defend and hold QTTM and its officers and directors harmless against and in
respect of any and all claims, demands, losses, costs, expenses, obligations,
liabilities or damages, including interest, penalties and reasonable attorney's
fees, that shall be incurred or suffered, which arise out of, result from or
relate to any breach of this Agreement or failure by SELLING SHAREHOLDERS or
SOFTGUARD to perform with respect to any of its representations, warranties or
covenants contained in this Agreement or in any exhibit or other instrument
furnished or to be furnished under this Agreement.
3.18 Authority to Exchange. As of the date of this Agreement, SELLING
SHAREHOLDERS hold 100% of the shares of SOFTGUARD common stock. Such shares are
owned of record and beneficially by SELLING SHAREHOLDERS and such shares are not
subject to any lien, encumbrance or pledge. SELLING SHAREHOLDERS hold authority
to exchange such shares pursuant to this Agreement.
3.19 Investment Intent. SELLING SHAREHOLDERS understand and acknowledge
that the shares of QTTM common stock offered for exchange or sale pursuant to
this Agreement are being offered in reliance upon the exemption from
registration requirements of the Securities Act of 1933, as amended (the "Act"),
pursuant to Section 4(2) of the Act and the rules and regulations promulgated
thereunder, for nonpublic offerings and makes the following representations,
agreements and warranties with the intent that the same may be relied upon in
determining the suitability of SELLING SHAREHOLDERS as a purchaser of QTTM
common stock:
(a) The shares of QTTM common stock are being acquired solely for the
account of SELLING SHAREHOLDERS, for investment purposes only, and not with a
view to, or for sale in connection with, any distribution thereof, and with no
present intention of distributing or reselling any part of the QTTM common stock
acquired;
(b) SELLING SHAREHOLDERS agree not to dispose of their QTTM common
stock or any portion thereof unless and until counsel for QTTM shall have
determined that the intended disposition is permissible and does not violate the
Act or any applicable Federal or state securities laws, or the rules and
regulations thereunder;
(c) SELLING SHAREHOLDERS agree that the certificates evidencing the
QTTM common stock acquired pursuant to this Agreement will have a legend placed
thereon stating that they have not been registered under the Act or any state
securities laws and setting forth or referring to the restrictions on
transferability and sale of the QTTM common stock, and that stop transfer
instructions shall be placed with the transfer agent for said certificate.
(d) SELLING SHAREHOLDERS acknowledge that QTTM has made all records and
documentation pertaining to QTTM common stock available to them and to their
qualified
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representatives, if any, and has offered such person or persons an opportunity
to ask questions and further discuss the proposed acquisition of QTTM common
stock, and any available information pertaining thereto, with the officers and
directors of QTTM, and that all such questions and information requested have
been answered by QTTM and its officers and directors to SELLING SHAREHOLDERS's
satisfaction;
(e) SELLING SHAREHOLDERS have carefully evaluated their financial
resources and investment position and the risks associated with this transaction
and are able to bear the economic risks of this transaction; and they have
substantial knowledge and experience in financial, business and investment
matters and is qualified as a sophisticated investor, and are capable of
evaluating the merits and risks of this transaction; and they desire to acquire
the QTTM common stock on the terms and conditions set forth;
(f) SELLING SHAREHOLDERS are able to bear the economic risk of an
investment in the QTTM common stock; and
(g) SELLING SHAREHOLDERS understand that an investment in the QTTM
common stock is not liquid and SELLING SHAREHOLDERS have no need for liquidity
in this investment.
3.20 Receipt of Relevant Information. SELLING SHAREHOLDERS and
SOFTGUARD have received from QTTM all financial and other information concerning
QTTM and its promoters, officers and directors, including, but not limited to
Prospectus dated June 30, 1993, Annual Report on Form 10-K for the year ended
December 31, 1997, Forms 10-Q for the quarters ended March 31, 1998, June 30,
1998, and September 30, 1998 and Forms 8-K dated April 17 and April 22, 1997, as
filed with the Securities and Exchange Commission, and all other documents and
information they have requested.
3.21 Public "Shell" Corporation. SOFTGUARD and SELLING SHAREHOLDERS are
aware that QTTM has public shareholders and is a "shell" corporation without
significant assets or liabilities, and further that public companies are subject
to extensive and complex state, federal and other regulations. Among other
requirements, SELLING SHAREHOLDERS and SOFTGUARD are aware that a Form 8-K must
be filed with the United States Securities and Exchange Commission within
fifteen days after closing which filing requires that audited financial
statements be filed within sixty days after the filing of the 8-K, and they
agree that such responsibility shall not be the responsibility of Capital
General Corporation, its officers, directors or employees nor the existing
officers of QTTM, but the sole responsibility of the new officers and directors
of QTTM. SELLING SHAREHOLDERS and SOFTGUARD are aware of the legal requirements
and obligations of public companies, understand that regulatory efforts
regarding public shell transactions similar to the transaction contemplated
herein has been and is currently being exerted by some states, the U.S.
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. (NASD), and are fully aware of their responsibilities, following
closing, to fully comply will all securities laws and regulations, and agree to
do so.
3.22 No Assurances or Warranties. SELLING SHAREHOLDERS and SOFTGUARD
acknowledge that there can be no assurance regarding the tax consequences of
this transaction, nor can there be any assurance that the Internal Revenue Code
or the regulations promulgated thereunder will not
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be amended in such manner as to deprive them of any tax benefit that might
otherwise be received. SELLING SHAREHOLDERS and SOFTGUARD are relying upon the
advice of their own tax advisors with respect to the tax aspects of this
transaction. No representations or warranties have been made by QTTM, Capital
General Corporation, or their officers, directors, affiliates or agents, as to
the benefits to be derived by SELLING SHAREHOLDERS or SOFTGUARD in completing
this transaction, nor have any of them made any warranty or agreement, expressed
or implied, as to the tax or securities consequences of the transactions
contemplated by this Agreement or the tax or securities consequences of any
action pursuant to or growing out of this Agreement.
ARTICLE IV
REPRESENTATIONS, AGREEMENTS AND WARRANTIES OF QTTM
QTTM represents, agrees and warrants that:
4.01 Organization. QTTM is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, has all necessary
corporate powers to own properties and to carry on its business as now owned and
operated by it, is duly qualified to do business and is in good standing in each
of the jurisdictions where its business requires qualification.
4.02 Capital. The authorized capital stock of QTTM consists of
25,000,000 shares of $.001 par value common stock of which 1,150,000 shares are
currently issued and outstanding. All of the issued and outstanding shares are
validly issued, fully paid and nonassessable. All currently outstanding shares
of QTTM common stock have been issued in compliance with applicable federal and
state securities laws.
4.03 Subsidiaries. QTTM has no subsidiaries and does not own any
interest in any other enterprise, whether or not such enterprise is a
corporation.
4.04 Directors and Officers. Exhibit 4.04 to this Agreement contains
the names and titles of all officers and directors of QTTM as of the date of
this Agreement.
4.05 Financial Statements. Exhibit 4.05 to this Agreement includes
QTTM's audited financial statements as of December 31, 1997. The financial
statements have been prepared in accordance with generally accepted accounting
principles and practices consistently followed throughout the period indicated
and fairly present the financial position of QTTM as of the dates of the balance
sheets included in the financial statements and the results of operations for
the periods indicated.
4.06 Absence of Changes. Since the date of QTTM's most recent financial
statements, there has not been any change in its financial condition or
operations except for changes in the ordinary
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course of business, and the agreed to closing adjustment of $75,000 to be paid
by QTTM to Capital General Corporation as a finders fee.
4.07 Absence of Undisclosed Liabilities. As of the date of QTTM's most
recent balance sheet, included in Exhibit 4.05, it did not have any material
debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
in such balance sheet.
4.08 Tax Returns. Within the times and in the manner prescribed by law,
QTTM has filed all federal, state or local tax returns required by law, has paid
all taxes, assessments and penalties due and payable and has made adequate
provision on its most recent balance sheet for any unpaid taxes. There are no
present disputes as to taxes of any nature payable by QTTM.
4.09 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, SOFTGUARD
and/or its attorneys and SELLING SHAREHOLDERS shall have the opportunity to meet
with QTTM's accountants and attorneys to discuss the financial condition of
QTTM. QTTM shall make available to SOFTGUARD and/or its attorneys and SELLING
SHAREHOLDERS all books and records of QTTM.
4.10 Patents, Trade Names and Rights. QTTM does not use any patents,
trade marks, service marks, trade names or copyrights in its business.
4.11 Compliance with Laws. QTTM has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
affecting its properties, securities or the operation of its business.
4.12 Litigation. QTTM is not a party to, nor to the best of its
knowledge is there pending or threatened, any suit, action, arbitration or
legal, administrative or other proceedings, or governmental investigation
concerning its business, assets or financial condition. QTTM is not in default
with respect to any order, writ, injunction or decree of any federal, state
local or foreign court or agency, nor is it engaged in, nor does it anticipate
it will be necessary to engage in, any lawsuits to recover money or real or
personal property.
4.13 Authority. The Board of Directors of QTTM has authorized the
execution of this Agreement and the transactions contemplated herein, and it has
full power and authority to execute, deliver and perform this Agreement.
4.14 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by QTTM and the performance of its obligations hereunder in the
time and manner contemplated will not cause, constitute, conflict with or result
in (i) any breach of the provisions of any license, indenture, mortgage,
charter, instrument, certificate of incorporation, bylaw or other agreement or
instrument to
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which it is a party or by which it may be bound, nor will any consents or
authorizations of any party other that those hereto be required, (ii) an event
that would permit any party to any agreement or instrument to terminate it or to
accelerate the maturity of any indebtedness or other obligation, or (iii) an
event that would result in a creation or imposition of any lien, charge or
encumbrance on any asset.
4.15 Full Disclosure. None of the representations and warranties made
by QTTM herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by QTTM or on its behalf, contains or will contain any untrue
statement of a material fact, or omits any material fact the omission of which
would be misleading.
4.16 Assets. QTTM has good and marketable title to all of its property
free and clear of any and all liens, claims and encumbrances, except as may be
indicated in Exhibit 4.05
4.17 Indemnification. QTTM agrees to indemnify, defend and hold
SOFTGUARD and its officers and directors and SELLING SHAREHOLDERS harmless
against and in respect to any and all claims, demands, losses, cost, expenses,
obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, incurred or suffered, which arise out of, result
from or relate to any breach of this Agreement, or failure by QTTM to perform,
any of its representations, warranties or covenants in this Agreement or in any
exhibit or other instrument furnished or to be furnished under this Agreement.
4.18 Validity of QTTM Shares. The shares of QTTM $.001 par value common
stock to be issued pursuant to this Agreement will be duly authorized, validly
issued, fully paid and nonassessable under Nevada law.
ARTICLE V
ACTIONS PRIOR TO CLOSING
5.01 Investigative Rights. Prior to the Closing Date each party shall
provide to the other parties, including the parties' counsel, accountants and
other authorized representatives, full access during normal business hours (upon
reasonable advance written notice) to such parties' books and records.
5.02 Conduct of Business. Prior to the Closing Date, each party shall
conduct its business in the normal course and shall not see, pledge or assign
any assets, without the prior written approval of the other parties. No party
shall amend its certificate of incorporation or bylaws, declare dividends,
redeem or sell stock or other securities, incur additional liabilities, acquire
or dispose of fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less that its stated amount, pay more
on any liability that its stated amount or enter into any other transaction
other than in the regular course of
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business.
ARTICLE VI
CLOSING
6.01 Closing. The closing (the "Closing") of this transaction shall be
held at the offices of QTTM, or such other place as shall be mutually agreed
upon, on or before January 12, 1999. (the "Closing Date"):
(a) QTTM shall issue 7,650,000 shares of its $.001 par value common
stock in a certificate or certificates representing such shares.
(b) SELLING SHAREHOLDERS shall deliver the certificates representing
100% of the shares of SOFTGUARD common stock (7,650,000 shares).
(c) QTTM shall deliver a signed consent or minutes of its Board of
Directors, approving this Agreement and authorizing the matters set forth
herein;
(d) SOFTGUARD shall deliver a signed consent or minutes of its Board of
Directors approving this Agreement and authorizing the matters set forth herein;
(e) QTTM's existing Board of Directors will (i) elect two new
directors, as named by SELLING SHAREHOLDERS to act as officers and directors of
QTTM in the capacities set forth in Exhibit 6.01 and (ii) the two current
directors will resign their positions with QTTM effective the Closing Date.
ARTICLE VII
MISCELLANEOUS
7.01 Captions and Headings. The article and paragraph headings
throughout this Agreement are for convenience and reference only and shall not
be deemed to define, limit or add to the meaning of any provision of this
Agreement.
7.02 No Oral Change. This Agreement may not be changed or modified
except in writing signed by the party against whom enforcement of any change or
modification is sought.
7.03 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of a covenant, condition or provision of this Agreement shall be deemed
to have been made unless executed in writing and signed by the party against
whom such waiver is charged. The failure of any party to insist in any one or
more cases upon the performance of any covenant, condition or provision of this
Agreement shall not be construed as a waiver or relinquishment for the future of
any such covenant, condition or provision. No waiver by any party of one breach
by the other shall be construed as a waiver with respect to a
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subsequent breach.
7.04 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
7.05 Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings.
7.06 Choice of Law/Arbitration. This Agreement and its application,
shall be governed under the laws of the State of Nevada. Any and all disputes
and controversies of every kind and nature between the parties hereto arising
out of or relating to this Agreement relating to the existence, construction,
validity, interpretation or meaning, performance, non-performance, enforcement,
operation, breach, continuance or termination thereof shall be subject to an
arbitration mutually agreeable to the parties or, in the absence of such mutual
agreement, then subject to arbitration in accordance with the rules of the
American Arbitration Association. It is the intent of the parties hereto and the
purpose of this provision to make the submission to arbitration of any dispute
or controversy arising hereunder an express condition precedent to any legal or
equitable action or proceeding of any nature whatsoever.
7.07 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
7.08 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
QUANTITATIVE METHODS CORPORATION:
3098 So. Highland Drive, Suite 460
Salt Lake City, Utah 84106
SOFTGUARD ENTERPRISES INC. and SELLING SHAREHOLDERS:
c/o Robert L.Seaman
515 Madison Avenue, Suite 3200
New York, NY 10022
7.09 Expenses. The parties will pay their own legal, accounting and
other expenses incurred in connection with this Agreement.
7.10 Survival of Representations and Warranties. The representations,
warranties and covenants set forth in this Agreement or in any instrument,
certificate, opinion or other writing provided
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for in it, shall survive the Closing Date.
7.11 Further Documents. The parties agree to execute any and all other
documents and to take such other action or corporate proceedings as may be
necessary or desirable to carry out the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the date
first above written.
QUANTITATIVE METHODS CORPORATION
----------------------------
Krista Nielson, President
SOFTGUARD ENTERPRISES INC.
----------------------------
John Saba, President
SELLING SHAREHOLDERS:
(See attached Schedule A)
----------------------------
Robert L. Seaman, Representative
of the Selling Shareholders
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EXHIBIT 3.04
DIRECTORS AND OFFICERS
OF
SOFTGUARD ENTERPRISES INC.
John Saba - President and Director
Helga Leuthe - Secretary/Treasurer and Director
<PAGE>
EXHIBIT 3.05
FINANCIAL STATEMENTS
OF
SOFTGUARD, S.A.
(Document Attached)
(To be attached to an Amendment referred to in Item 7)
<PAGE>
EXHIBIT 4.04
DIRECTORS AND OFFICERS
OF
QUANTITATIVE METHODS CORPORATION
Krista Nielson - President and Director
Sasha Belliston - Secretary/Treasurer and Director
<PAGE>
EXHIBIT 4.05
FINANCIAL STATEMENTS
OF
QUANTITATIVE METHODS CORPORATION
(Document Attached)
<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, 1997 and 1996, and
the related statements of operations, changes in stockholders' equity, and cash
flows for the years ended December 31, 1997, 1996, and 1995, and for the period
of July 26, 1990 (date of inception) to December 31, 1997. 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, 1997 and 1996, and
the results of its operations, changes in stockholders' equity, and its cash
flows for the years ended December 31, 1997, 1996, and 1995, and for the period
of July 26, 1990 (date of inception) to December 31, 1997, in conformity with
generally accepted accounting principles.
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
January 31, 1998
F-1
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
12/31/97 12/31/96
----------------- ------------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 75,000 $ 75,000
----------------- ------------------
TOTAL CURRENT ASSETS 75,000 75,000
----------------- ------------------
$ 75,000 $ 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 (1,000) (1,000)
----------------- ------------------
TOTAL STOCKHOLDERS' EQUITY 75,000 75,000
----------------- ------------------
$ 75,000 $ 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
Year Year Year (Date of
ended ended ended inception) to
12/31/97 12/31/96 12/31/95 12/31/97
--------------- -------------- --------------- ----------------
<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 0 0 0 1,000
--------------- -------------- --------------- ----------------
NET LOSS $ 0 $ 0 $ 0 $ (1,000)
=============== ============== =============== ================
Net income (loss) per weighted
average share $ .00 $ .00 $ .00
=============== ============== ===============
Weighted average number of
common shares used to
compute net income (loss)
per weighted average share 1,150,000 1,150,000 1,018,750
=============== ============== ===============
</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)
=============== =============== ================== ===============
</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
Year Year Year (Date of
ended ended ended Inception) to
12/31/97 12/31/96 12/31/95 12/31/97
--------------- -------------- --------------- ----------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income (loss) $ 0 $ 0 $ 0 $ (1,000)
Adjustments to reconcile
net income (loss) to
cash used by operating
activities 0 0 0 0
--------------- -------------- --------------- ----------------
NET CASH USED BY
OPERATING ACTIVITIES 0 0 0 (1,000)
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 75,000 76,000
--------------- -------------- --------------- ----------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 0 75,000 76,000
--------------- -------------- --------------- ----------------
INCREASE IN CASH
AND CASH EQUIVALENTS 0 0 75,000 75,000
Cash and cash equivalents
at beginning of year 75,000 75,000 0 0
--------------- -------------- --------------- ----------------
CASH & CASH EQUIVALENTS
AT END OF YEAR $ 75,000 $ 75,000 $ 75,000 $ 75,000
=============== ============== =============== ================
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
QUANTITATIVE METHODS CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
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, 1997 a deferred tax asset has not been recorded due to
the Company's lack of operations to provide income to use the net
operating loss carryover of $1,000 which will expire December 31, 2005.
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 has entered into the business of marketing
and promoting products and services of companies specializing in new
patent technologies.
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
are provided, 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.
F-6
<PAGE>
EXHIBIT 6.01
DIRECTORS AND OFFICERS
(TO BE ELECTED)
OF
QUANTITATIVE METHODS CORPORATION
Robert L. Seaman - President and Chairman of the Board
Helga Leuthe - Secretary/Treasurer and Director
<PAGE>
EXHIBIT "B"
R E S I G N A T I O N S
January 12, 1999
The Board of Directors
Quantitative Methods Corporation
Ladies and Gentlemen:
The undersigned hereby resign as directors and officers of Quantitative
Methods Corporation, a Nevada corporation, effective immediately.
Very truly yours,
-------------------------------------------
Krista Nielson
-------------------------------------------
Sasha Belliston
