UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended: SEPTEMBER 30, 2004
------------------
[ ] Transition report under Section 13 or 15(d) of the Exchange Act of 1934
For the transition period from __________ to __________
Commission File No. 000-29331
MAILKEY CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 76-0270295
- ------------------------------------- -------------------------------------
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
130 Shaftesbury Avenue
London, England W1D 5EU
--------------------------------------------------------------
(Address of Principal Executive Offices)
011-44-2070-310821
--------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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.
Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
There were 33,162,522 issued and outstanding shares of the registrant's common
stock, $.001 par value per share, on November 16, 2004.
Transitional Small Business Disclosure Format (check one):
Yes [ X ] No [ X ]
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical facts included or incorporated by reference in this
report, including, without limitation, statements regarding our future financial
position, business strategy, budgets, projected revenues, projected costs and
plans and objectives of management for future operations, are forward-looking
statements. In addition, forward-looking statements generally can be identified
by the use of forward-looking terminology, such as "may," "will," "expects,"
"intends," "plans," "projects," "estimates," "anticipates," or "believes" or the
negative thereof or any variation thereon or similar terminology or expressions.
These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from results proposed in
such statements. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we can give no assurance that such
expectations will prove to be correct. Important factors that could cause actual
results to differ materially from our expectations include, but are not limited
to: our ability to fund future growth and implement our business strategy; our
ability to integrate the operations of any businesses we may acquire; our
ability to attract and retain customers and qualified personnel; customer
acceptance and satisfaction with our electronic messaging security solutions;
anticipated product enhancements and releases; defects in our products and
services; legal claims against us, including, but not limited to, intellectual
property infringement claims; our ability to protect our intellectual property;
forecasts of Internet usage and the growth and acceptance of the messaging
security solutions industry; rapid technological changes in the messaging
security solutions industry; competition in our industry and markets; general
economic and business conditions, either nationally or internationally or in the
jurisdictions in which we are doing business; the condition of the securities
and capital markets; legislative or regulatory changes; and statements of
assumption underlying any of the foregoing, as well as any other factors set
forth in our 2004 Annual Report on Form 10-KSB or under the caption "Plan of
Operation" under Item 2 of this report.
All subsequent written and oral forward-looking statements attributable
to us, or persons acting on our behalf, are expressly qualified in their
entirety by the foregoing. Except as required by law, we assume no duty to
update or revise our forward-looking statements based on changes in internal
estimates or expectations or otherwise.
Unless otherwise indicated or the context otherwise requires, all
references to "MailKey," the "Company," "we," "us" or "our" and similar terms
refer to MailKey Corporation and its subsidiaries.
PART I
FINANCIAL INFORMATION
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
ITEM 1. FINANCIAL STATEMENTS
Page(s)
-------------
Condensed Consolidated Balance Sheets (Unaudited) 3
Condensed Consolidated Statements of Operations (Unaudited) 4
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) 5
Condensed Consolidated Statements of Cash Flows (Unaudited) 6
Condensed Consolidated Statements of Shareholders' Deficit (Unaudited) 7
Notes to Condensed Consolidated Financial Statements (Unaudited) 13
ITEM 2. PLAN OF OPERATION
Our Plan of Operation 18
Liquidity and Capital Resources 19
Off-Balance Sheet Arrangements 19
Recent Developments
ITEM 3. CONTROLS AND PROCEDURES 20
PART II
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 21
- 2 -
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Balance Sheets
ASSETS
------
September 30, March 31,
2004 2004
------------------ ------------------
(Unaudited) (Audited)
Current Assets
Cash $ 119,468 $ 437,523
Prepaid assets 265,341 57,941
Subscription receivable-collected April 2004 - 403,000
------------------ ------------------
Total Current Assets 384,809 898,464
Property and equipment, net 50,774 63,259
------------------ ------------------
Total Assets $ 435,583 $ 961,723
================== ==================
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
Current Liabilities
Short-term loan payable - related party $ 78,667 $ 43,087
Short-term loans payable 114,604 465,701
Accounts payable and accrued liabilities 718,271 582,681
------------------ ------------------
Total Current Liabilities 911,542 1,091,469
------------------ ------------------
Commitments and Contingencies
Shareholders' Deficit
Minority interest - -
Common shares; $0.001 par; 100,000,000 shares authorized,
September 30, 2004: issued and outstanding 31,125,022;
March 31, 2004: issued and outstanding - 28,865,238 31,125 28,865
Additional paid-in capital 7,195,305 6,688,205
Accumulated foreign exchange translation adjustment 22,203 6,204
Deficit accumulated during the development stage (7,476,703) (4,667,885)
Deferred compensation (145,389) (1,922,635)
Subscriptions receivable (102,500) (262,500)
------------------ ------------------
Total Shareholders' Deficit (475,959) (129,746)
------------------ ------------------
Total Liabilities and Shareholders' Deficit $ 435,583 $ 961,723
================== ==================
See notes to condensed consolidated financial statements.
- 3 -
MAILKEY CORPORATIONAND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Six Months Ended March 11, 2003
September 30, September 30, (Inception)
---------------------------------- ------------------------------ Through
2004 2003 2004 2003 September 30, 2004
---------------- ----------------- -------------- --------------- --------------------
Revenues $ 186 $ - $ 186 $ - $ 186
Operating expenses
Software development and other 584,710 710,757 1,208,411 818,258 4,290,167
compensation
Consulting fees - related party 192,813 60,579 411,143 78,057 918,310
Legal and professional fees 249,859 70,037 419,066 92,674 892,849
Other selling, general and administrative 245,340 66,737 568,070 100,645 1,103,931
---------------- ----------------- -------------- --------------- --------------------
Total operating expenses 1,272,722 908,110 2,606,690 1,089,634 7,205,257
---------------- ----------------- -------------- --------------- --------------------
Loss from operations (1,272,536) (908,110) (2,606,504) (1,089,634) (7,205,071)
---------------- ----------------- -------------- --------------- --------------------
Interest expense (1,123) - (208,156) - (278,761)
Interest and other income, net 5,669 290 5,842 319 6,718
---------------- ----------------- -------------- --------------- --------------------
Loss before minority interest (1,267,990) (907,820) (2,808,818) (1,089,315) (7,477,114)
---------------- ----------------- -------------- --------------- --------------------
Minority Interest in Losses of Subsidiaries - 411 - 411 411
---------------- ----------------- -------------- --------------- --------------------
Net loss $ (1,267,990) $ (907,409) $(2,808,818) $ (1,088,904) $ (7,476,703)
================ ================= ============== =============== ====================
Basic and diluted loss per share $ (0.04) $ (0.07) $ (0.09) $ (0.10) $ (0.36)
================ ================= ============== =============== ====================
Weighted average shares outstanding 30,726,724 12,531,549 29,857,562 10,612,224 20,533,589
================ ================= ============== =============== ====================
See notes to condensed consolidated financial statements.
- 4 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
Three Months Ended Six Months Ended March 11, 2003
September 30, September 30, (Inception)
---------------------------------- ------------------------------ Through
2004 2003 2004 2003 September 30, 2004
---------------- ----------------- -------------- --------------- --------------------
Net Loss $ (1,267,990) $ (907,409) $(2,808,818) $ (1,088,904) $ (7,476,703)
Foreign Currency Translation adjustments (4,092) (7,829) 15,999 (9,376) 22,203
---------------- ----------------- -------------- --------------- --------------------
Comprehensive Loss $ (1,272,082) $ (915,238) $(2,792,819) $ (1,098,280) $ (7,454,500)
================ ================= ============== =============== ====================
See notes to condensed consolidated financial statements.
- 5 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended Six Months Ended March 11, 2003
September 30, September 30, (Inception)
---------------------------------- ------------------------------ Through
2004 2003 2004 2003 September 30, 2004
---------------- ----------------- -------------- --------------- --------------------
Cash Flows from Operating Activities
Net loss $ (1,267,990) $ (907,409) $(2,808,818) $ (1,088,904) $ (7,476,703)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 6,283 2,009 12,658 2,158 27,570
Gain on sale of equipment 6,949 - 6,949 - 6,949
Amortization of debt discount and
beneficial conversion feature - - 184,299 - 246,727
Amortization of deferred compensation 340,445 53,520 477,382 53,520 641,270
Amortization of deferred
compensation-related party 35,000 - 35,000 - 35,000
Stock-based compensation - 325,488 - 325,488 1,628,722
Interest expense settled by stock
issuance - - 16,016 - 16,016
Minority interest share in losses of
subsidiaries - (411) - (411) (411)
Change in cash flows due to changes
in operating assets and liabilities:
Prepaid assets 36,397 (6,269) (7,400) (8,998) (65,341)
Accounts payable and accrued
liabilities (39,845) 104,997 174,622 213,762 757,303
---------------- ----------------- -------------- --------------- --------------------
Net Cash Used in Operating Activities (882,761) (428,075) (1,909,292) (503,385) (4,182,898)
---------------- ----------------- -------------- --------------- --------------------
Cash Flows from Investing Activities
Acquisition of property and equipment - (14,455) (7,122) (17,444) (85,293)
---------------- ----------------- -------------- --------------- --------------------
Net Cash Used in Investing Activities - (14,455) (7,122) (17,444) (85,293)
---------------- ----------------- -------------- --------------- --------------------
Cash Flows from Financing Activities
Proceeds of short-term loans - related
party 36,149 - 35,580 - 117,097
Repayment of short-term loans - related
party - (126,889) - - (38,430)
Payment of short-term loans payable (63,481) - (85,396) - (85,396)
Issuance of subsidiary shares to minority
interests - 411 - 411 411
Issuance of common share capital 493,514 939,916 1,184,073 940,785 3,517,217
Collections of stock subscriptions
receivable - - 563,000 - 563,000
Payment of offering costs (59,653) - (114,897) - (358,443)
Proceeds from short-term debt and related
warrants - - - - 650,000
---------------- ----------------- -------------- --------------- --------------------
Net Cash Provided by Financing Activities 406,529 813,438 1,582,360 941,196 4,365,456
---------------- ----------------- -------------- --------------- --------------------
Effect of Exchange Rate Changes on Cash (4,092) (7,829) 15,999 (9,376) 22,203
---------------- ----------------- -------------- --------------- --------------------
Net Increase (Decrease) in Cash (480,324) 363,079 (318,055) 410,991 119,468
Cash, Beginning of period 599,792 47,912 437,523 - -
---------------- ----------------- -------------- --------------- --------------------
Cash, End of period $ 119,468 $ 410,991 $ 119,468 $ 410,991 $ 119,468
================ ================= ============== =============== ====================
Supplemental Disclosures of Cash Flow
Information
Cash paid during the period for:
Interest $ 1,123 $ - $ 1,818 $ - $ 1,818
================ ================= ============== =============== ====================
Income Tax - - - - -
================ ================= ============== =============== ====================
See notes to condensed consolidated financial statements.
- 6 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Shareholders' Deficit
Common Shares Additional
Minority ------------------------------ Paid-In
Interest Shares Amount Capital
--------------- -------------- --------------- ----------------
Balance at March 11, 2003
(Date of Inception) $ - - $ - $ -
Issuance of "founders" shares
at $0.001 per share - March - 8,692,900 8,693 (7,824)
Issuance of shares at $0.05 per share
for $0.001 cash and $0.0499 services - October - 5,110,397 5,110 250,921
Issuance of shares at $0.05 per share
for cash - October - 1,976,318 1,976 96,845
Issuance of shares at $0.05 per share
for services - October - 483,800 484 23,703
Issuance of shares and warrants at $0.25
per share plus 1/2 of a warrant - June - August - 3,306,000 3,306 823,194
Issuance of shares valued at $0.1919
per share for services - June - August - 1,230,585 1,231 235,041
Issuance of shares and warrants at $0.50
per share plus 1/2 of a warrant - August - November - 490,000 490 244,510
Issuance of shares valued at $0.3878
per share for services - August - November - 230,000 230 88,986
Issuance of shares and warrants at $0.85
for one share plus 1/2 of a warrant - November-
December - 375,000 375 318,375
Consulting fees paid in conjunction
with 2003 share issuances - - - (149,790)
Options issued for services - - - 53,520
Issuance of minority interest in
subsidiary 411 - - -
Foreign currency translation
adjustments - - - -
Minority interest in loss (411) - - -
Net loss - - - -
--------------- -------------- --------------- ----------------
Balance, December 31, 2003 $ - 21,895,000 $ 21,895 $ 1,977,481
--------------- -------------- --------------- ----------------
See notes to condensed consolidated financial statements.
- 7 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Shareholders' Deficit
Accumulated Deficit
Foreign Accumulated
Exchange During the
Translation Development
Adjustment Stage Total
------------ ------------- ---------------
Balance at March 11, 2003
(Date of Inception) $ - $ - $ -
Issuance of "founders" shares
at $0.001 per share - March - - 869
Issuance of shares at $0.05 per share
for $0.001 cash and $0.0499 services - October - - 256,031
Issuance of shares at $0.05 per share
for cash - October - - 98,821
Issuance of shares at $0.05 per share
for services - October - - 24,187
Issuance of shares and warrants at $0.25
for one share plus 1/2 of a warrant - June - August - - 826,500
Issuance of shares valued at $0.1919 per
share for services - June - August - - 236,272
Issuance of shares and warrants at $0.50
per share plus 1/2 of a warrant - August - November - - 245,000
Issuance of shares valued at $0.3878 per
share for services - August - November - - 89,216
Issuance of shares and warrants at 0.85
for one share plus 1/2 of a warrant - November -
December - - 318,750
Consulting fees paid in conjunction
with 2003 share issuances - - (149,790)
Options issued for services - - 53,520
Issuance of minority interest in
subsidiary - - 411
Foreign currency translation
adjustments 9,251 - 9,251
Minority interest in loss - - (411)
Net loss - (2,157,655) (2,157,655)
------------ ------------- ---------------
Balance, December 31, 2003 $ 9,251 $ (2,157,655) $ (149,028)
------------ ------------- ---------------
See notes to condensed consolidated financial statements.
- 8 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Shareholders' Deficit
Common Shares Additional
Minority ------------------------------ Paid-In
Interest Shares Amount Capital
--------------- -------------- --------------- ----------------
Balance at December 31, 2003
restated for division of stock $ - 21,895,000 $ 21,895 $ 1,977,481
Transfer of shares $0.6468 per share
to Employee Benefit Trust - 1,500,000 1,500 968,700
650,000 warrants issued in connection
with notes payable of $650,000
beneficial conversion feature on
notes payable - January 23 to
February 23, 2004 - - - 246,727
Issuance of shares at $0.85 per share
for cash - March 24 - 950,000 950 806,550
Issuance of shares on exercise of
warrants at $0.50 - March 24 - 1,001,000 1,001 499,499
Issuance of shares on exercise of
warrants at $1 - March 24 - 100,000 100 99,900
Issuance of shares on exercise of
options at $0.125 - March 24 - 800,000 800 99,200
Consulting fees incurred in conjunction
with 2004 share issuances - - - (93,756)
Options issued to consultants in
connection with services in
January 2004 - - - 2,086,523
Amortization of options issued to
consultants - - - -
Shares deemed issued in recapitalization
transaction - March 25, 2004 - 2,619,238 2,619 (2,619)
Foreign currency translation adjustments - - - -
Net loss - - - -
--------------- -------------- --------------- ----------------
Balance, March 31, 2004 $ - 28,865,238 $ 28,865 $ 6,688,205
--------------- -------------- --------------- ----------------
See notes to condensed consolidated financial statements.
- 9 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Shareholders' Deficit
Accumulated Deficit
Foreign Accumulated
Exchange During the
Subscription Deferred Translation Development
Receivable Compensation Adjustment Stage Total
------------ ------------ ------------ ------------- -------------
Balance at December 31, 2003
restated for division of stock $ - $ - $ 9,251 $(2,157,655) $ (149,028)
Transfer of shares $0.6468 per share
to Employee Benefit Trust - - - - 970,200
650,000 warrants issued in connection
with notes payable of $650,000
beneficial conversion feature on notes
payable - January 23 to
February 26, 2004 - - - - 246,727
Issuance of shares at $0.85 per share
for cash - March 24 (212,500) - - - 595,000
Issuance of shares on exercise of
warrants for $0.50 - March 24 - - - - 500,500
Issuance of shares on exercise of
warrants at $1 - March 24 (50,000) - - - 50,000
Issuance of shares on exercise of
options at $0.125 - March 24 - - - - 100,000
Consulting fees incurred in conjunction
with 2004 share issuances - - - - (93,756)
Options issued to consultants in
conjunction with services in
January 2004 - (2,086,523) - - -
Amortization of options issued to
consultants - 163,888 - - 163,888
Shares deemed issued in recapitalization
transaction - March 25, 2004 - - - - -
Foreign currency translation
adjustments - - (3,047) - (3,047)
Net loss - - - (2,510,230) (2,510,230)
------------ ------------ ------------ ------------- -------------
Balance, March 31, 2004 $ (262,500) $(1,922,635) $ 6,204 $(4,667,885) $ (129,746)
------------ ------------ ------------ ------------- -------------
See notes to condensed consolidated financial statements.
- 10 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Shareholders' Deficit
(Unaudited)
Common Shares Additional
------------------------------------- Paid-In
Shares Amount Capital
----------------- ------------------ -----------------
Balance at March 31, 2004 carryforward
restated for division of stock 28,865,238 $ 28,865 $ 6,688,205
Issuance of shares at $0.85 per share in
connection with conversion of bridge
loan, 470,588 shares issued, 294,118
issuable at June 30, 2004 - June 764,706 765 649,235
Issuance of shares at $0.85 per share in
connection with conversion of bridge
loan interest, 19,425 shares issued,
8,831 issuable at June 30, 2004 - June 28,256 28 23,990
Issuance of shares at $0.50 per share in
connection with exercise of warrants
Between June 18, 2004 - August 20, 2004 462,000 462 230,538
Issuance of shares at $1.00 per share in
connection with exercise of warrants
Between June 18, 2004 - August 20, 2004 953,019 953 952,066
Offering costs incurred in conjunction conversions
with June and July 2004 warrant conversions - - (114,897)
Stock subscriptions received - - -
Issuance of shares to consultants at $0.60
Per share in lieu of fees owed - September 51,803 52 31,032
Revalue options issued to consultants in
conjunction with services in
December 2003 and January 2004 - - (1,264,864)
Amortization of expense for options issued
to consultants - - -
Foreign currency translation - - -
Net loss - - -
----------------- ------------------ -----------------
Balance, September 30, 2004 31,125,022 $ 31,125 $ 7,195,305
================= ================== =================
See notes to condensed consolidated financial statements.
- 11 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Condensed Consolidated Statements of Shareholders' Deficit
(Unaudited)
Accumulated Deficit
Foreign Accumulated
Exchange During the
Subscription Deferred Translation Development
Receivable Compensation Adjustment Stage Total
------------ ------------ ------------ ------------- -------------
Balance at March 31, 2004 carryforward
restated for division of stock $ (262,500) $(1,922,635) $ 6,204 $ (4,667,885) $ (129,746)
Issuance of shares at $0.85 per share
in connection with conversion
of bridge loan, 470,588 shares issued,
294,118 issuable at June 30, 2004 - June - - - - 650,000
Issuance of shares at $0.85 per share
in connection with conversion
of bridge loan interest, 19,425 shares
issued, 8,831 issuable at June 30, 2004 - - - - 24,018
- June
Issuance of shares at $0.50 per share in
connection with exercise of warrants
Between June 18, 2004 - August 20, 2004 - - - - 231,000
Issuance of shares at $1.00 per share in
connection with exercise of warrants
Between June 18, 2004 - August 20, 2004 - - - - 953,019
Offering costs incurred in conjunction
with June and July 2004 warrant
conversions - - - - (114,897)
Stock subscriptions received 160,000 - - - 160,000
Issuance of shares to consultants at $0.60
Per share in lieu of fees owed - - - - - 31,084
September
Revalue options issued to consultants
in conjunction with services in
December 2003 and January 2004 - 1,264,864 - - -
Amortization of expense for options
issued to consultants - 512,382 - - 512,382
Foreign currency translation - - 15,999 - 15,999
Net loss - - - (2,808,818) (2,808,818)
------------ ------------ ------------ ------------- -------------
Balance, September 30, 2004 $ (102,500) $ (145,389) $ 22,203 $ (7,476,703) $ (475,959)
============ ============ ============ ============== =============
See notes to condensed consolidated financial statements.
- 12 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared by the management of MailKey Corporation
and subsidiaries (the "Company" or "Group"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, pursuant to such rules and regulations, they do not include
all of the information and footnotes required by accounting principles
generally accepted in the United States of America ("US GAAP") for
complete financial statements. The financial statements reflect all
adjustments that are, in the opinion of management, necessary to fairly
present such information. All such adjustments are of a normal recurring
nature. These condensed consolidated financial statements should be read
in conjunction with the consolidated financial statements of MailKey
Corporation and subsidiaries, as of March 31, 2004, and the notes
thereto contained in the Form 10-KSB filed by the Company. The results
of operations for the six months ended and since inception through
September 30, 2004, are not necessarily indicative of the results that
may be expected for the fiscal year ending March 31, 2005.
The company's financial statements are prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States of America, and have been presented on a
going concern basis which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
Since the inception of the Company, management has been in the
process of designing and developing its products, raising capital,
hiring personnel and obtaining customers. Accordingly, the Company is a
development stage enterprise, as defined in Statement of Financial
Accounting Standards ("SFAS") No. 7, Accounting and Reporting for
Development Stage Enterprises. Under SFAS No. 7, certain additional
financial information is required to be included in the financial
statements for the period from inception of the company to the current
balance sheet.
USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and the accompanying notes.
Actual results could differ from those estimates.
RESEARCH AND DEVELOPMENT
Research and development costs relating principally to the
design and development of products are expensed as incurred. The Company
incurred approximately $904,000 and $491,000 of research and development
expense for the six month and three month periods ended September 30,
2004, respectively. The Company incurred approximately $896,000 and
$779,000 of research and development expense for the six month and three
month periods ended September 30, 2003, respectively.
LOSS PER SHARE
Loss per common share is calculated in accordance with SFAS No.
128, Earnings Per Share. Basic loss per common share is computed based
upon the weighted average number of shares of common stock outstanding
for the period and excludes any potential dilution. Shares associated
with the 1,715,000 stock options and 925,500 warrants outstanding at
September 30, 2004 and the 80,000 stock options outstanding at September
30, 2003 were not included because their inclusion would be antidilutive
(i.e. reduce the net loss per share).
- 13 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
STOCK BASED COMPENSATION
The Group follows the provisions of SFAS No. 123 - "ACCOUNTING
FOR STOCK BASED COMPENSATION". As permitted under SFAS No. 123, the
Group has continued to utilize APB 25 "Accounting For Stock Issued To
Employees", and related interpretations, in accounting for its
stock-based compensation to employees and directors. Had compensation
expense for the six month periods ended September 30, 2004 and 2003 been
determined under the fair value provisions of SFAS No. 123, as amended
by SFAS No. 148 - "AN ACCOUNTING FOR STOCK BASED COMPENSATION -
TRANSITION AND DISCLOSURE - AN AMENDMENT OF SFAS 123," the Group net
loss and net loss per share would have differed as follows:
Three Months Ended Six Months Ended
September 30, September 30,
----------------------------------- -----------------------------------
2004 2003 2004 2003
----------------- -------------- --------------- ---------------
Net loss to common stockholders, as reported $ (1,267,990) $ (907,409) $ (2,808,818) $ (1,088,904)
Add: Stock-based employee compensation
expense included in reported net loss
determined under APB No. 25, net of
related tax effects 203,000 53,520 214,904 53,520
Deduct: Total stock-based employee
compensation expense determined
under fair-value-based method for
all awards, net of related tax effects (365,012) (60,560) (491,288) (60,560)
----------------- -------------- --------------- ---------------
Pro Forma net loss $ (1,430,002) $ (914,449) $ (3,085,202) $ (1,095,944)
----------------- -------------- --------------- ---------------
Earnings per share:
Basic and diluted - as reported $ (0.04) $ (0.07) $ (0.09) $ (0.10)
Basic and diluted - pro forma $ (0.05) $ (0.07) $ (0.10) $ (0.10)
These pro forma amounts may not be representative of future
disclosures since the estimated fair value of stock options is amortized
to expense over the vesting period and additional options may be issued
in future years. The estimated fair value of each option granted was
calculated using the Black-Scholes option pricing model. The following
summarizes the weighted average of the assumption used in the model.
2004 2003
---------- ----------
Risk free rate 3.0% 1.3%
Expected years until exercise 4.25 0.75
Expected stock volatility 150% 150%
Dividend yield - -
- 14 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
2. DESCRIPTION OF BUSINESS
Mailkey is a messaging security and management company. It is
developing its Message Manager and Envoy technology platforms to enable
scaleable filtration, control and management of messages through a
central management point.
Mailkey anticipates acquiring additional technologies,
businesses and related assets that we believe are complimentary to
either our existing technologies or technologies that we are developing
or may attempt to develop in the future. In addition to any potential
acquisitions of complimentary technologies, we also plan to review
opportunities to acquire companies, businesses and assets that may lead
us into new areas of business activity.
The Company's Chairman and Chief Executive Officer resigned in
September 2004 and the Company's Chief Financial Officer and member of
the Board resigned in November 2004. Both positions have been filled by
the Company's founder and deputy chairman. In November 2004 Susan Walton
joined the Company as a member of the Board of Directors.
3. GOING CONCERN
The accompanying financial statements have been prepared
assuming that the Group will continue as a going concern. The Group
incurred a net loss of $2,808,818 and had minimal revenue during the six
months ended September 30, 2004. Those conditions raise substantial
doubt about the Group's ability to continue as a going concern. The
financial statements do not include any adjustments that might result
from the outcome of this uncertainty. As of September 30, 2004, the
Company estimated its cash on hand was insufficient to cover one month
of operations and has increased its borrowing on the short-term
related-party loan by approximately $35,000 to finance operations.
Management plans to raise additional capital during the
remainder of fiscal 2004. These funds, in addition to its cash held at
September 30, 2004, will be needed in order to finance the Company's
currently anticipated operating and capital expenditures for the
remainder of fiscal 2004.
The Company's ability to continue as a going concern is
dependent upon the Company raising additional capital. There can be no
assurance that the Company will successfully raise the necessary capital
on terms desirable to the Company. If the Company does not obtain the
necessary capital, it will likely be required to delay development of
its products, alter its business plan, or in the extreme situation,
cease operations. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
4. DEPRECIATION
Depreciation expense for the six months ending September 30,
2004 and 2003 was $12,658 and $2,158, respectively.
5. SHORT-TERM LOANS PAYABLE
During the six months ended September 30, 2004, short-term loans
payable with a face value of $650,000 were converted to 764,706 shares
of common stock at $0.85 per share. Accrued interest of $24,018 was also
converted into 28,256 shares of common stock at $0.85 per share.
- 15 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
5. SHORT-TERM LOANS PAYABLE (Continued)
The remaining discount on the short-term loans was amortized
during the six months ended September 30, 2004 resulting in interest
expense of $190,566.
During the six months ended September 30, 2004, the Company
borrowed $200,000 pursuant to a short-term note for the purpose of
financing insurance premiums. At September 30, 2004, a balance of
$114,604 was due in five monthly installments of $22,610, including
interest at 4.172%.
6. SHORT-TERM LOAN PAYABLE - RELATED PARTY
The short-term loan payable from a related party represents an
advance from a company controlled by a family member of one of the
Group's directors and chief executive officer. The loan has $78,667
outstanding at September 30, 2004 and $43,087 was outstanding as of
March 31, 2004. The note bears interest at the base rate of Barclays
bank + 1%. The due date of the note has been extended to December 31,
2004.
7. WARRANTS
Each warrant entitles the holder to purchase one common share at
a stated exercise price any time through a stated expiration date. The
warrants outstanding were as follows:
September 30, March 31,
2004 2004
------------------- -----------------
Exercise price $0.50, expiration October 2005 - 652,000
Exercise price $1.00, expiration October 2005 275,000 1,839,854
Exercise price $2.00, expiration March 2005 650,500 650,500
------------------- -----------------
Total 925,500 3,142,354
=================== =================
During the six months ended September 30, 2004, the Company
called 1,564,854 warrants with an exercise price of $1.00 of which
953,019 warrants were exercised and called 652,000 warrants with an
exercise price of $0.50 of which 462,000 were exercised. This resulted
in the issuance of 1,415,019 additional shares.
8. COMMITMENTS AND CONTINGENCIES
As of September 30, 2004, the Group had commitments under
operating leases that required aggregate minimum payment that
approximates $32,000 through March 31, 2005. Rent expense for the six
months ended September 30, 2004 and 2003 was $75,116 and $25,830,
respectively.
It has come to the attention of management that the Company has
not filed U.S. tax returns for the past several years. upon obtaining
additional financing the Company will pay its outside auditors to
prepare the unfiled returns. Management believes there is no material
tax liability owed to taxing authorities.
- 16 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
9. STOCK OPTIONS
Stock option activity during the periods indicated is as
follows:
Weighted-
Number of Average
Shares Exercise Price
----------------- -----------------
Balance at March 31, 2004 3,375,000 $ 0.75
Granted 620,000 0.58
Cancelled or lapsed (2,280,000) 0.69
Exercised - -
----------------- -----------------
Balance at September 30, 2004 1,715,000 $ 0.76
================= =================
The following table summarizes information about stock options
outstanding as of September 30, 2004:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------------------- ----------------------------------------
Outstanding Weighted Weighted Number Weighted
Range of at Average Average Exercisable at Average
Exercise September 30, Remaining Exercise September 30, Exercise
Prices 2004 Contract Life Price 2004 Price
- ------------------- ------------------- --------------- -------------- ----------------- -----------------
$ 0.25 - $ 0.85 1,715,000 3.9 years $ 0.76 802,500 $ 0.65
10. CONSULTING FEES - RELATED PARTY
The Company's current Chief Executive Officer ("CEO") provides
his service to the Company through an outside consulting firm. The
aggregate cost of this service approximated $71,000 and $31,000 for the
six months ended September 30, 2004 and 2003, respectively. The
aggregate cost of this service approximated $36,000 and $14,000 for the
three month period ended September 30, 2004 and 2003, respectively.
The Company's former CEO also provided his service to the
Company through an outside consulting firm. The aggregate cost of this
service incurred by the Company approximated $254,000 for the six months
ended September 30, 2004 and $146,000 for the three months ended
September 30, 2004. Included in both the amounts above is $35,000 in
expense related to stock options issued to the former CEO in September
2004. The former CEO provided no services for the period ended September
30, 2003.
The minority interest holder in Mailkey Asia PTE, Ltd. ("Mailkey
Asia") controls a company that provides consulting services to the
Company. The costs of these services approximated $86,000 and $46,000
for the six month periods ended September 30, 2004 and 2003,
respectively. The cost of these services for the three month period
ended September 30, 2004 and 2003, approximated $11,000 and $46,000,
respectively.
11. SUBSEQUENT EVENTS
On November 9, 2004, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") by and among the Company,
MailKey Acquisition Corp., a Delaware corporation and our wholly-owned
subsidiary ("Merger Sub"), Inc., a Nevada Corporation ("iElement") and
Ivan Zweig, pursuant to which we agreed to acquire all of the issued and
outstanding shares of capital stock of iElement (the "Merger").
- 17 -
MAILKEY CORPORATION AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTITY)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
11. SUBSEQUENT EVENTS (Continued)
In November, 2004, the Company's Chief Financial Officer
resigned from his position as Chief Financial Officer and as a member of
the Board. The position was filled by the Company's Chief Executive
Officer.
In November, 2004, the Company entered into an Agreement and
Plan of Merger (the "Merger Agreement") by and among the Company,
MailKey Acquisition Corp., a Delaware corporation and our wholly-owned
subsidiary ("Merger Sub"), Inc., a Nevada Corporation ("iElement") and
Ivan Zweig, pursuant to which we agreed to acquire all of the issued and
outstanding shares of capital stock of iElement (the "Merger").
Under the terms of the Merger Agreement, at the effective time
of the Merger, Merger Sub will be merged into iElement, at which time
the separate corporate existence of Merger Sub will cease and iElement
will continue as the surviving company in the Merger. As a result of the
Merger, iElement will become a wholly-owned subsidiary of the Company.
We expect to issue approximately 3.44 shares of our common stock
in exchange for each issued and outstanding share of capital stock of
iElement, which would result in an aggregate issuance by us of
approximately 29,700,000 shares of our common stock which would
represent approximately 47% of the Company's outstanding common stock
after the issuance. The actual exchange ratio remains subject to
adjustment and will be determined immediately prior to the closing.
The closing of the Merger is subject to approval by the
shareholders of iElement and other conditions customary for transactions
of this nature.
Effective October, 2004 the Company transferred all of the
shares of its investment in Mailkey Asia PTE, Ltd. ("Mailkey Asia") to
the minority shareholder of the subsidiary in consideration for a
reduction in the number of the Mailkey Asia's minority owner's
outstanding stock options in the Company. An option to buy 600,000
shares of the Company's common stock was reduced to an option to buy
240,000 shares. The new stock options vested immediately and the
expiration date was accelerated to December 31, 2006 from December 31,
2008.
On November, 2004, the Company issued 500,000 shares of stock to
its Chief Financial Officer as compensation for services to the company
as well as payment of amounts owed to him. In November, 2004, the
Company issued 1,500,000 shares of stock as compensation for services to
the Company under consultancy contracts relating to the development of
the business and products of the Company, advice regarding acquisitions,
financial analysis, and industry research.
- 18 -
ITEM 2. PLAN OF OPERATION
This "Plan of Operation" and other parts of this report contain
forward-looking statements that involve risks and uncertainties. All
forward-looking statements included in this report are based on information
available to us on the date hereof, and we assume no obligation to update any
such forward-looking statements. Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the caption "Disclosure Regarding
Forward-Looking Statements" and elsewhere in this report. The following should
be read in conjunction with our unaudited financial statements and the related
notes thereto contained elsewhere in this report.
OUR PLAN OF OPERATION
We intend to become a leading messaging security solutions provider and
communications services provider focused on the provision of business services
through a number of integrated technology solutions. We anticipate achieving
this objective by becoming a market driven business solutions company focused on
offering full service business solutions we are developing internally as well as
solutions we may acquire through strategic acquisitions and partnerships.
We intend to market our products and services through a combination of
indirect sales channels, including distributors, resellers, business outsourcing
and hosted service providers, large global systems integrators, original
equipment manufacturers and appliance vendors, as well as through the efforts of
a direct sales force. We are designing our software with the intention that it
be capable of supporting numerous hardware configurations, operating systems and
messaging applications and infrastructure, and to be deliverable as stand-alone
software, as an integrated part of the appliance solutions of distribution
partners or as a hosted service.
Our research and development activities are focused on the enhancement
of our current electronic messaging security solutions and the development of
next-generation technologies in the messaging security solutions market. We
anticipate that the majority of our research and development efforts will be
devoted to the internal development of complimentary technologies that we intend
to acquire from external sources, and that the remainder of such efforts will be
devoted to the internal development of our own proprietary technologies.
We anticipate acquiring additional technologies, businesses and related
assets that we believe are complimentary to either our existing technologies or
technologies that we are developing or may attempt to develop in the future. In
addition to any potential acquisitions of complimentary technologies described
above, we also plan to review opportunities to acquire companies and businesses
located in the United States that may lead us into new areas of business
activity.
In furtherance of this strategy, on November 9, 2004, we entered into an
agreement to acquire iElement, Inc. ("iElement"), a privately-owned Nevada
corporation and facilities-based nationwide communications service provider that
provides state-of-the-art telecommunications services to small- and medium-
sized enterprises. A more detailed discussion of the agreement and iElement is
provided below under "Recent Developments."
- 19 -
We anticipate that the number of people who we employ may increase
substantially over the next 12 months as we continue to execute on our business
plan.
LIQUIDITY AND CAPITAL RESOURCES
Since our inception, we have funded our operations primarily through
private sales of equity securities and the utilization of short-term convertible
debt. As of September 30, 2004, we had a cash balance of $119,468.
In June 2004, MK Secure Solutions Limited, our wholly-owned subsidiary
("MK Secure Solutions"), completed a round of convertible loan financing that it
had initiated in early 2004 and for which it had received aggregate cash
proceeds of $650,000. The proceeds were raised through MK Secure Solutions'
issuance of loans convertible into shares of our common stock and warrants to
acquire 650,000 shares of our common stock earlier this year. These securities
were sold in loan units comprised of one (1) loan in the amount of $50,000 and
one (1) warrant. The loans had a maturity date of July 31, 2004 and accrued
interest at an annualized rate of 10%. The loans and any accrued interest
thereon were convertible into shares of our common stock at a conversion price
of $0.85 per share, and the warrants are exercisable into 50,000 shares of our
common stock at an exercise price of $1.00 per share. As of June 30, 2004, all
of the loans made thereunder and accrued interest thereon had been converted
into shares of our common stock by the holders thereof.
During the six (6) months ended September 30, 2004, we completed various
warrant calls pursuant to which we received aggregate cash proceeds of
approximately $1,180,000 in connection with the exercise of warrants held by
certain of our investors. The warrants had been issued in connection with
various private offerings of securities the we had conducted over the past 18
months. The warrants had exercise prices of either $.50 or $1.00 per share, were
exercisable immediately, had an expiration date of October 2005, and contained
call provisions granting us the right to call the warrants if any one of several
alternative events occurred. In connection with the warrant calls, warrants to
purchase 462,000 shares of our common stock were exercised at an exercise price
of $.50 per share and warrants to purchase 953,019 shares of our common stock
were exercised at an exercise price of $1.00 per share. As a result, we issued a
total of 1,415,019 shares of our common stock in connection with the exercise of
these warrants. The remaining warrants to purchase 801,835 shares of our commons
stock that were subject to the warrant call but were not exercised expired upon
the completion of the applicable warrant call notice period.
During October 2004, we entered into an agreement with Palladian
Advisors, a financial advisory services firm, to assist us in raising additional
capital and to provide us with advisory services in connection with our growth
strategy.
We do not currently maintain a line of credit or term loan with any
commercial bank or other financial institution. To date, our capital needs have
been principally met through the receipt of proceeds from sales of our equity
and debt securities.
We believe that our current cash resources will not be sufficient to
sustain our current operations for the next twelve (12) months, and that we will
need to raise additional capital to execute our business plan. We intend to
obtain additional cash resources within the next twelve
- 20 -
(12) months through sales of equity or debt securities. The sale of additional
equity or convertible debt securities would result in dilution to our
shareholders. The issuance of debt securities could subject us to increased
expenses and covenants that may have the effect of restricting our operations.
We have not made arrangements to obtain additional financing and we can provide
no assurance that financing will be available in amount or on terms acceptable
to us, if at all. If we are unable to obtain additional funds when they are
needed or if such funds cannot be obtained on terms favorable to us, we may be
required to delay or scale back our plans to develop our messaging security
solutions or acquire complementary companies, businesses, assets or
technologies.
OFF-BALANCE SHEET ARRANGEMENTS
As of September 30, 2004, we did not have any relationships with
unconsolidated entities or financial partners, such as entities often referred
to as structured finance or special purpose entities, that had been established
for the purpose of facilitating off-balance sheet arrangements or other
contractually narrow or limited purposes. As such, we are not materially exposed
to any financing, liquidity, market or credit risk that could arise if we had
engaged in such relationships.
RECENT DEVELOPMENTS
On November 9, 2004, we entered into an Agreement and Plan of Merger
(the "Merger Agreement") by and among us, MailKey Acquisition Corp., a Delaware
corporation and our wholly-owned subsidiary ("Merger Sub"), iElement and Ivan
Zweig, pursuant to which we agreed to acquire all of the issued and outstanding
shares of capital stock of iElement (the "Merger").
Under the terms of the Merger Agreement, at the effective time of the
Merger, Merger Sub will be merged with an into iElement, at which time the
separate corporate existence of Merger Sub will cease and iElement will continue
as the surviving company in the Merger. As a result of the Merger, iElement will
become a wholly-owned subsidiary of the Company.
We expect to issue approximately 3.44 shares of our common stock in
exchange for each issued and outstanding share of capital stock of iElement,
which would result in an aggregate issuance by us of approximately 29,700,000
shares of our common stock. The actual exchange ratio remains subject to
adjustment and will be determined immediately prior to the closing.
iElement is a facilities-based nationwide communications service
provider that provides state-of-the-art telecommunications services to small and
medium sized enterprises ("SMEs"). iElement provides broadband data, voice and
wireless services using integrated T-1 lines with a Layer 2 Private Network
solution to provide SMEs with dedicated Internet access services, customizable
business solutions for voice, data and Internet, and secure communications
channels between the SMEs' offices, partners, vendors, customers and employees
without the use of a firewall or encryption devices. IElement has a network
presence in 18 major markets in the United States, including facilities in Los
Angeles, Dallas, and Chicago.
The closing of the Merger is subject to approval by the shareholders of
iElement and other conditions customary for transactions of this nature.
- 21 -
ITEM 3. CONTROLS AND PROCEDURES
An evaluation of the effectiveness of our "disclosure controls and
procedures" (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) was carried
out by us under the supervision and with the participation of our Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO"). Based upon that
evaluation, our CEO and CFO concluded that, as of the end of the period covered
by this quarterly report, our disclosure controls and procedures were effective
to provide reasonable assurance that information we are required to disclose in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms. There has been no change in our internal
control over financial reporting identified in connection with that evaluation
that occurred during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
- 22 -
PART II. OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
From July 1, 2004 through August 20, 2004, we completed various warrant
calls pursuant to which we received aggregate gross cash proceeds of
approximately $493,000 in connection with the exercise of warrants held by
certain of our investors. The shares of our common stock issued upon the
exercise of the warrants were issued to a limited number of accredited investors
in private placement transactions exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of the Securities Act and Rule 506
promulgated thereunder or Regulation S under the Securities Act directly by us
without engaging in any advertising or general solicitation of any kind and
without payment of underwriting discounts or commissions to any person.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as exhibits to this report.
Exhibit No. Description
- ----------- -----------
31.1 Certification of Chief Executive Officer of the Company required
by Rule 13a-14(a) under the Securities Exchange Act of 1934, as
amended
31.2 Certification of Chief Financial Officer of the Company required
by Rule 13a-14(a) under the Securities Exchange Act of 1934, as
amended
32.1 Certification of Chief Executive Officer and Chief Financial
Officer of the Company required by Rule 13a-14(b) under the
Securities Exchange Act of 1934, as amended
- 23 -
(b) Reports on Form 8-K.
On July 13, 2004, we filed a report on Form 8-K under Item 4 with the
SEC disclosing our dismissal of Spicer Jeffries LLP as our independent
accountant and the engagement of L J Soldinger Associates, LLC as our new
independent accountant.
On September 8, 2004, we filed a report on Form 8-K under Items 1.01 and
9.01 disclosing that we had entered into an agreement to acquire 100% of the
issued share capital of Milson Gray Limited, a private limited company
incorporated in England and Wales.
- 24 -
SIGNATURES
Pursuant to the requirements of Section 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.
MAILKEY CORPORATION
Date: November 22, 2004 /s/ Tim Dean-Smith
---------------------------------------
Tim Dean-Smith
Chairman and Chief Executive Officer
- 25 -
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
31.1 Certification of Chief Executive Officer of the Company required
by Rule 13a-14(a) under the Securities Exchange Act of 1934, as
amended
31.2 Certification of Chief Financial Officer of the Company required
by Rule 13a-14(a) under the Securities Exchange Act of 1934, as
amended
32.1 Certification of Chief Executive Officer and Chief Financial
Officer of the Company required by Rule 13a-14(b) under the
Securities Exchange Act of 1934, as amended