**UNITED
STATES SECURITIES AND EXCHANGE COMMISSION**
 **Washington,
D.C. 20549**
  **FORM
10-QSB**
  [ x
      ]
    QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.
  For
      the quarterly period ended December 31,
2004
  [
      ]
    TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934.
  For
      the transition period from ____________ to
  ________________
  Commission
file number: 333-107002
 
 Express Systems Corporation(Exact name of small business issuer as
      specified in its charter)Nevada(State or other jurisdiction of incorporation or
      organization)91-1918324(I.R.S. Employer Identification
    No.)114
      W. Magnolia Street, Suite 446,Bellingham
      WA 98225(Address of principal executive
      offices)800-661-7830(Issuer’s telephone
number)
 
 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 Express Systems was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
  Yes  [
]  No  [
]
  The
Issuer had 2,560,200 shares of common stock issued and outstanding as of
December 31, 2004.
  
  **Express SystemsCorporation**
 
 **Form
10-QSB**
 
 **Index**
 
 
 **Part I.**
    **Financial Information**
    **Page**Item 1.
    Financial Statements
    F-1Consolidated Balance Sheets
    F-2Consolidated Statements of
      Operations
    F-3Consolidated Statements of Cash
      Flows
    F-4Notes to Consolidated Financial
      Statements (unaudited)
    F-5Item 2.
    Management’s Discussion and Analysis
      or Plan of Operation
    1**Part II.**
    **Other Information**Item 1.
    Legal Proceedings
    13Item 2.
    Changes in Securities
    13Item 3.
    Defaults Upon Senior Securities
    13Item 4.
    Submission of Matters to a Vote of
      Security Holders
    14Item 5.
    Other Information
    14Item 6.
    Exhibits and Reports on Form
    8-K
    14Signatures
    14Exhibit 31.1
    CertificationsExhibit 32.1
    Certification Pursuant to 18 U.S.C. Section
    1350
 
 
 
 CONTENTS
 
 CONSOLIDATED FINANCIAL STATEMENTS
    **Page**Consolidated Balance Sheets
    F-2Consolidated Statements of
      Operations
    F-3Consolidated Statements of Cash
      Flows
    F-4Notes to Consolidated Financial
      Statements
    F-5
  F-1
 Table of Contents
 ****
 **PART I - FINANCIAL INFORMATION**
  **Item
1.**  **Financial
Statements**
 
  **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **CONSOLIDATED
BALANCE SHEETS**
 
 **ASSETS**
    December
      31, 2004
    March
      31, 2004(Unaudited)**CURRENT
      ASSETS:**Cash
      and cash equivalents
    $ 1
      085
    $ 9
      210Trade
      accounts receivable
    10
      147
    47
      220Receivable
      from related party
    13
      352
    -***Total
      current assets***
    24
      557
    56 
      430**EQUIPMENT
      AND SOFTWARE**,net
      of accumulated depreciation of $3,286 and $2,116, respectively
    1
      351
    3
      921***TOTAL
      ASSETS***
    **$25
      908**
    **$
      60 351****LIABILITIES
      AND SHAREHOLDERS' EQUITY****CURRENT
      LIABILITIES:**Accounts
      payable and accrued expenses
    $
      44 073
    $
      27 777Due
      to related parties (Note 4)
    1
      393
    10
      811***Total
      current liabilities***
    45
      466
    38
      588**SHAREHOLDERS’
      EQUITY**(Note
      3):Common
      stock, $.001 par value, 25,000,000 shares authorized,2,560,200 
      shares issued and outstanding
    2,560
    2
      560Additional
      paid-in capital
    272,790
    272
      790Deficit
      accumulated during the development stage
    (294
      908)
    (253
      587)Total
      shareholders’ equity
    (19
      558)
    21
      763***TOTAL
      LIABILITIES AND SHAREHOLDERS’ EQUITY***
    **$
      25 908**
    **$
      60 351**
 The
accompanying notes are an integral part of these
statements.
 F-2
 Table of Contents
  **EXPRESS SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **CONSOLIDATED
STATEMENTS OF OPERATIONS**
 
 Nine Months
      Ended December 31, 2004
    Nine Months
      Ended December 31, 2003
    Year
      Ended
      March
      31, 2004
    Period
      From Inception (July 9, 1998) To December 31, 2004(Unaudited)
    (Unaudited)
    
    (Unaudited)**REVENUE**
    $
      50 678
    $
      106 098
    $
      72 530
    $
      285 206**EXPENSES:**Advertising
    5
      415
    23
      235
    11
      033
    40
      855Consulting
      (Note 4)
    46
      485
    57
      820
    63
      799
    236
      119Professional
      fees
    33
      353
    34
      824
    9
      381
    101,625Management
      fee
    -
    6
      000
    -
    18
      100Travel
    -
    6
      350
    10
      410
    14
      456General
      and Administrative
    4
      176
    22
      616
    56
      340
    108
      981Bad
      Debts
    -
    -
    29
      375
    29
      365Depreciation
      and amortization
    1
      170
    1
      170
    558
    3
      286***Total
      operating expenses***
    90
      599
    152
      015
    180
      896
    565
      314***Loss from
      operations***
    (39
      921)
    (45
      917)
    (108
      366)
    (280
      108)**OTHER
      INCOME (EXPENSE):**Interest
      income
    -
    -
    100
    100Loss
      on disposal of assets
    (1
      400)
    -
    (13
      500)
    (14
      900)***Total
      other income (expense)***
    (1
      400)
    -
    (13
      400)
    (14
      800)**NET
      LOSS**
    **$(41
      321)**
    **$
      (45 917)**
    **$
      (121 766)**
    **$
      (294 908)****BASIC
      AND DILUTED LOSS PER COMMON SHARE:**Net
      loss per common share
    **$
      (0.02)**
    **$
      (0.02)**
    **$
      (0.05)**
    ********
    ****
    ****
    ****
    ******WEIGHTED
      AVERAGE SHARES OUTSTANDING**
    **2
      560 200**
    **2
      520 938**
    **2
      270 965**
 The accompanying notes are an integral part of these
statements.
 F-3
 Table of Contents
  **EXPRESS SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **CONSOLIDATED
STATEMENTS OF CASH FLOWS**
 
 Nine Months
      Ended December 31, 2004
    Nine Months
      Ended December 31, 2003
    Year
      Ended
      March
      31, 2003
    Period
      From
      Inception
      (July
      9, 1998)
      to
      December 31, 2003(Unaudited)
    (Unaudited)**CASH
      FLOWS FROM OPERATING ACTIVITIES:**Net
      loss
    $
      (41 321)
    $
      (45 917)
    $
      (121 766)
    $
      (294 908)Adjustments
      to reconcile net loss to net cashused
      in operating activities:Depreciation
      and amortization
    1
      170
    1
      170
    558
    3
      286Loss
      on disposal of assets
    1
      140
    -
    13
      500
    14
      900Bad
      debt expense
    -
    -
    4
      375
    29
      375Increase
      (decrease) in accounts receivable
    37
      073
    (28
      030)
    (7
      715)
    (10
      147)(Increase)
      decrease in receivable from related parties
    (13
      352)
    (4
      490)
    12
      000
    (13
      352)Increase
      in due to related party
    (9
      418)
    4
      400
    210
    1
      393Increase
      in accounts payable and accrued expenses
    16
      296
    26
      054
    2
      830
    14
      698Net
      cash used in operating activities
    (8
      152)
    (46
      813)
    (96
      008)
    (254
      755)**CASH
      FLOWS FROM INVESTING ACTIVITIES:**Purchase
      of other assets
    -
    -
    -
    (3,500)Purchases
      of property and equipment
    -
    -
    (6
      037)
    (16,037)Net
      cash used in investing activities
    -
    -
    (6
      037)
    (19,537)**CASH
      FLOWS FROM FINANCING ACTIVITIES:**Issuance
      of common stock
    -
    45,000
    107
      600
    275,350**NET
      INCREASE (DECREASE) IN CASH**
    (8
      152)
    (1
      813)
    5
      555
    1
      058**CASH**,
      beginning of period
    9,210
    5,692
    137
    -**CASH**,
      end of period
    **$
      1 058**
    **3
      879**
    **$
      5 692**
    **$
      1 058****SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING
      ACTIVITIES:**Write
      off of software and cancellation of associated note payable
    **$
      -**
    **$
      -**
    **$
      50 000**
    **$
      50 000**
 The accompanying notes are an integral part of these
statements.
 F-4
 Table of Contents
 
 **EXPRESS SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 
 *NOTE
1 -*  *ORGANIZATION,
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES*
  **Organization,
Business and Going Concern**
 
 Express
Systems Corporation (“Express”) was incorporated on July 9, 1998 in the state of
Nevada and is currently in the development stage. The Company, through its
subsidiary, is in the business of advertising on the internet and selling opt-in
lead generation lists.
 
 The
consolidated financial statements include the accounts of Express since the date
of inception and its wholly-owned subsidiary, Masterlist International, Inc.
(“Masterlist”) since the date of purchase (see Note 2) (collectively, the
“Company”). All significant intercompany balances and transactions have been
eliminated in consolidation.
 
 The
Company has incurred losses since inception that raise substantial doubt about
its ability to continue as a going concern. The ability of the Company to
continue operations is contingent upon attaining profitable operations and
obtaining additional debt and/or equity capital to fund its operations.
Management's plan in this regard is to raise additional funding through a public
offering (see Note 6). The financial statements do not include any
adjustment relating to the recovery and classification of recorded asset amounts
or the amount and classification of liabilities that might be necessary should
the Company discontinue operations.
 
 The
interim financial information as of and for the nine months ended December 31,
2004 is unaudited. In the opinion of management all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation have
been included.
 
 **Cash
Equivalents**
 
 All
highly liquid investments purchased with an original maturity of three months or
less are considered to be cash equivalents.
 
 **Accounts
Receivable**
 
 The
Company uses the allowance method for accounting for bad debts. At December 31,
2004 management believes all receivables are collectible by the
Company.
 
 The accompanying notes are an integral part of these
statements.
 F-5
 Table of Contents
  **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 (Continued)
 
  *NOTE
1 -*  *ORGANIZATION,
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES* ***(continued)***
  **Equipment
and Software**
 
 The
Company provides for depreciation and amortization of these assets using the
straight-line method based on estimated useful lives of, generally, three to
five years.
 
 **Revenue
Recognition**
 
 Revenue
is generated primarily through the sale of leads to customers generated on the
internet and is recognized for each qualified lead submitted to its customer,
provided that collection is probable. When the qualified lead is submitted to
its customer the Company has provided all of the services under the terms of the
arrangement. Since inception, the Company has received substantially all of its
revenue from one customer. Loss of this customer could have a material adverse
effect on the financial condition of the Company.
 
 **Advertising**
 
 The
Company expenses advertising costs as incurred.
 
 **Long-Lived
Assets**
 
 The
Company reviews its long-lived assets for impairment whenever changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. For purposes of evaluating the recoverability of long-lived assets,
the recoverability test is performed using undiscounted net cash flows estimated
to be generated by the asset.
 
 **Income
Taxes**
 
 The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". Under the asset and
liability method of Statement 109, deferred tax assets and liabilities are
recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled.
 
 The accompanying notes are an integral part of these
statements.
 F-6
 Table of Contents
 ****
 **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 (Continued)
   *NOTE
1 -*  *ORGANIZATION,
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES* ***(continued)***
  **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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Management believes that the estimates utilized in the
preparation of the consolidated financial statements are prudent and reasonable.
Actual results could differ from these estimates.
 
 **Fair
Value of Financial Instruments**
 
 Substantially
all of the Company’s assets and liabilities are carried at fair value or
contracted amounts that approximate fair value. Estimates of fair value are made
at a specific point in time, based on relative market information and
information about the financial instrument, specifically, the value of the
underlying financial instrument. Assets that are recorded at fair value consist
largely of short-term receivables, which are carried at contracted amounts that
approximate fair value. Similarly, the Company’s liabilities consist of short
term liabilities recorded at contracted amounts that approximate fair
value.
 
 **Net
Loss Per Share of Common Stock**
 
 Net loss
per share of common stock is based on the weighted average number of shares of
common stock outstanding.
 
 **Recent
Accounting Pronouncements**
 
 On March
31, 2002, the Company adopted Statement of Financial Accounting Standards No.
144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” (“SFAS
144”). SFAS 144 supercedes SFAS No. 121, “Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed of,” and elements of APB
30, “Reporting the Results of Operations—Reporting the Effects on Disposal of a Segment of a Business and
Extraordinary, Unusual or Infrequently Occurring Events and Transactions.” SFAS
144 establishes a single-accounting model for long-lived assets to be disposed
of while maintaining many of the
 
 The accompanying notes are an integral part of these
statements.
 F-7
 Table of Contents
 ****
 **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 (Continued)
   *NOTE
1 -*  *ORGANIZATION,
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES* ***(continued)***
  provisions
relating to impairment testing and valuation. The adoption did not affect the
Company’s financial position or results of operations.
 
 On
April 2002, Statement of Financial Accounting Standards No. 145, “Rescission of
FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections,” was issued. This statement provides guidance on the
classification of gains and losses from the extinguishment of debt and on the
accounting for certain specified lease transactions. The adoption of this
statement did not impact the Company’s financial position, results of operations
or cash flows.
 
 In June
2002, Statement of Financial Accounting Standards No. 146, “Accounting for Costs
Associated with Exit or Disposal Activities,” (“SFAS 146”) was issued. This
statement provides guidance on the recognition and measurement of liabilities
associated with disposal activities and is effective as of January 1, 2003.
Under SFAS 146, companies will record the fair value of exit or disposal
costs when they are incurred rather than at the date of a commitment to an exit
or disposal plan. The adoption of SFAS 146
could result in the Company recognizing the cost of future restructuring
activities, if any, over a period of time rather than in one reporting
period.
 
 In
November 2002, the Financial Accounting Standards Board issued Interpretation
No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees,
Including Guarantees of Indebtedness of Others,” (“FIN 45”). FIN 45 requires the
Company to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in the issuance of the guarantee. FIN 45 is
effective for guarantees issued or modified after December 31, 2002. The
disclosure requirements effective for the year ending March 31, 2003 expand the
disclosures required by a guarantor about its obligations under a guarantee. The
adoption of the disclosure requirements of this statement did not impact the
Company’s financial position, results of operations or cash flows.
 
 In
December 2002, Statement of Financial Accounting Standards No. 148, “Accounting
for Stock-Based Compensation -Transition and Disclosure,” (“SFAS 148”) was
issued. SFAS 148 amends Statement of Financial Accounting Standards No. 123,
“Accounting for Stock-Based Compensation,” (“SFAS 123”) to provide alternative
methods of transition for a voluntary change to the fair value method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends
the disclosure requirements of SFAS 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
 
 The accompanying notes are an integral part of these
statements.
 F-8
 Table of Contents
 ****
 **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 (Continued)
   *NOTE
1 -*  *ORGANIZATION,
OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES* ***(continued)***
  stock-based
employee compensation and the effect of the method used on the reported results.
The provisions of SFAS 148 are effective for financial statements for
fiscal years ending after December 15, 2002 and interim periods beginning after
December 15, 2002. The adoption of the disclosure requirements of this statement
did not impact the Company’s financial position, results of operations or cash
flows.
 
 In
December 2002, the Emerging Issues Task Force issued a consensus on Issue No.
00-21, “Revenue Arrangements with Multiple Deliverables” (EITF 00-21). EITF
00-21 mandates how to identify whether goods or services or both that are to be
delivered separately in a bundled sales arrangement should be accounted for as
separate units of accounting. The Company is currently evaluating the effects of
adoption of EITF 00-21 on its service arrangements.
 
 In
January 2003, the Financial Accounting Standards Board issued Interpretation No.
46, “Consolidation of Variable Interest Entities,” (“FIN 46”). The
interpretation provides guidance for determining when a primary beneficiary
should consolidate a variable interest entity, or equivalent structure, that
functions to support the activities of the primary beneficiary. The
interpretation is effective as of the beginning of the first interim or annual
reporting period beginning after June 15, 2003 for variable interest entities
created before February 1, 2003. The adoption of this statement is not expected
to impact the Company’s financial position, results of operations or cash flows.
  In May
2003, SFAS 150 Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity”, was issued. This Statement establishes
standards for how an issuer classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires
that an issuer classify a financial instrument that is within its scope as a
liability (or an asset in some circumstances). Many of those instruments were
previously classified as equity. Generally, a financial instrument, whether in
the form of shares or otherwise, that is mandatorily redeemable, i.e. that
embodies an unconditional obligation requiring the issuer to redeem it by
transferring its shares or assets at a specified or determinable date (or dates)
or upon an event that is certain to occur, must be classified as a liability (or
asset in some circumstances). In some cases, a financial instrument that is
conditionally redeemable may also be subject to the same treatment. This
Statement does not apply to features that are embedded in a financial instrument
that is not a derivative (as defined) in its entirety. For public entities, this
Statement is effective for financial instruments entered into or modified after
May 31, 2003. The adoption of SFAS 150 did not effect the Company’s financial
position or results of operations.
  The accompanying notes are an integral part of these
statements.
 F-9
 Table of Contents
 ****
 **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 (Continued)
 
 **NOTE
2 -**  **BUSINESS
ACQUISITION**
 
 In
October 2002, prior to Mr. Bauer becoming a director of the Express, Express
loaned Blackstone Holding Corp. (“Blackstone”), an inactive Nevada company that
Mr. Bauer was president and director of, $25,000. Blackstone was also the sole
shareholder of Masterlist. In November 2002, Blackstone transferred all of the
outstanding common stock of Masterlist to Express in consideration for the
forgiveness of the loan. The acquisition was accounted for under the purchase
method of accounting. Masterlist was incorporated in November 2002, and had no
assets, liabilities or operations at the time of the acquisition.
 
 **NOTE
3-**  **SHAREHOLDERS’
EQUITY**
 
 The
authorized capital stock of the Company consists of 25,000,000 shares of $.001
par value voting common stock.
 
 In July
1998, the Company issued 1,000,000 shares to its founders for
$1,000.
 
 The
Company has sold common shares under private offering memorandums. In November
1998, the Company sold 1,000,000 shares of common stock for $.01 per share, and
received proceeds of $10,000. Also in November 1998, the Company sold 35,000
shares of common stock for $.05 per share, and received proceeds of $1,750. In
January 2001, the Company sold 200,000 shares of common stock for $.50 per
share, and received proceeds of $100,000. In November 2002, the Company sold
215,200 shares of common stock for $.50 per share, and received proceeds of
$107,600. In May 2003, the Company sold 90,000 shares of common stock at $.50
per share, and received proceeds of $45,000.
 
 **NOTE
4-**  **RELATED
PARTY TRANSACTIONS**
 
 An
officer and shareholder of the Company has advanced money to the Company for
operating expenses. The amount owed by the Company at December 31, 2004 and
March 31, 2004 was $10,811 and $10,811, respectively. The amounts are
non-interest bearing and have no due dates.
 
 During
the nine months ended December 31, 2004, and 2003 and the year ended March 31,
2004, the Company paid consulting and management fees to shareholders and
entities related to shareholders of the Company of $42,800, $50,219 and $88,927,
respectively. The Company reimbursed related parties for expenses paid on its
behalf during the nine months ended December 31, 2004 and the year ended March
31, 2004 in the amount of $14,800 and $18,681.
  The accompanying notes are an integral part of these
statements.
 F-10
 Table of Contents
 ****
 **EXPRESS
SYSTEMS CORPORATION**
 **AND
SUBSIDIARY**
 **(A
Development Stage Company)**
 
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 (Concluded)
 
 **NOTE
5-**  **INCOME
TAXES**
 
 At March
31, 2004, the Company had an unused net operating loss carryforward of
approximately $290,000 for income tax purposes, which expires through 2024.
However, the ability to utilize such losses to offset future taxable income is
subject to various limitations imposed by the rules and regulations of the
Internal Revenue Service. This net operating loss carryforward may result in
future income tax benefits of approximately $98,000; however,
 because
realization is uncertain at this time, a valuation reserve in the same amount
has been established. Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
 
 Significant
components of the Company’s deferred tax liabilities and assets as of March 31,
2003 and 2002 are as follows:
  2004
    2003Deferred tax liabilities
    $ -
    $ -Deferred tax assets:Net operating loss
    carryforwards
    $98 000
    71 000Valuation
      allowance for deferred tax assets
    (98
      000)
    (71
      000)$
      -
    $
      -
  The
valuation allowance for deferred tax assets was increased by $27,000 and $41,000
during 2004 and 2003.
 
 **NOTE
6-**  **PROPOSED
PUBLIC OFFERING**
 
 The
Company intends to make a public offering of securities on Form SB-2. The
Company intends to sell a maximum of 400,000 shares of common stock at an
offering price of $.50 per share, for gross proceeds of $200,000.
  The accompanying notes are an integral part of these
statements.
 F-11
 Table of Contents
  **Item 2.**  **** **MA** **NAGEMENT'S
DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS**
 
  The
following discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and Notes thereto included elsewhere in this
Form 10-QSB. This discussion contains certain forward-looking statements that
involve risks and uncertainties. The Company’s actual results and the timing of
certain events could differ materially from those discussed in these
forward-looking statements as a result of certain factors, including, but not
limited to, those set forth herein and elsewhere in this Form
10-QSB.
 
 The
following discussion and analysis should be read in conjunction with the
information set forth under the caption "Selected Financial Data" and the
financial statements and notes thereto included elsewhere in this
prospectus.  Our consolidated audited financial statements are stated in
United States Dollars and are prepared in accordance with United States
Generally Accepted Accounting Principles.
 
 **OV** **ERVIEW**
 
 Our main
goal is to generate revenue by generating lists of opt-in leads to be sold both
on a wholesale and retail basis to buyers of the leads. An opt-in lead consists,
as a minimum, an e-mail address of an individual that requests more information
on a product we are advertising for our customers. To be an opt-in name, the
individual had to have responded to an advertisement posted on a web site on the
world wide web that they found. None of our leads would come from unsolicited
commercial e-mail also known as "spam".
 
 Spam has
become a very serious issue industry-wide in generating leads on the Internet.
There may also be legislation introduced that severally penalizes companies
involved in Spam. We do not generate any of our leads through the sending of
unsolicited commercial e-mail. All of our leads are generated from single or
double opt-in requests.
 
 We
believe that the Internet is, in effect, a borderless environment for the most
part. Obviously, each user must respect the local laws of where they advertise
their products. But we feel that we can locate our operations in the most
favorable business locations for our operations without compromising the
effectiveness of our advertising. For example, though our main business is
located in the United States, our biggest customer is a Swiss company.
Furthermore, to maintain the least expensive operating costs offset against our
technical needs, our servers are maintained in Canada. To try and maintain and
control costs, we subcontract out some of our technical work. To do this
subcontract work, we post our jobs that need to be completed on various Internet
sites where contractors bid for the work. We have had some of our technical work
completed for us in India, Untied States, Canada and the Philippines.
 
 Our main
area we are concentrating on now are double opt-in leads of people wanting
financial information and stock market newsletters. We also plan to manage our
customers’ databases and distribute their newsletters on a third party basis. We
currently have one customer using this service we provide. We do not have any
editorial input into the newsletters that we distribute or that we will
distribute in the future. Our third area we have recently entered to
 
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 generate
revenue is the filing of SEC documents on Edgar for third parties. We have
generated approximately $285,206 in total revenue since starting our current
business through to December 31, 2004.
 
 There are
many other types of markets for us to collect leads for. For example, we believe
there is a large market for leads to be sold for debt consolidation, mortgages,
health care, insurance and credit cards. We have not done any marketing into
these areas but as capital becomes available we intend to pursue these areas of
interest to generate additional lead business and potential additional revenue.
 
 We feel
that with the universal access to the internet, there is a market for us to sell
leads for various services over the internet. We feel that individuals are
becoming more sophisticated in their decision making process augmented by
research done on the web. This active research done by individuals creates a
demand for companies to fill the need of the research. Our job will be to put
these two factions together by first collecting the names of people seeking a
service and selling those names to the people that provide the service. We also
feel that with the EDGAR system becoming more sophisticated and filings more
numerous and time sensitive, there is a niche for us to fill to file documents
for third parties particularly for those located in Europe and Canada. We
believe that there is growth in this area though we have not done any formal
marketing study. Our beliefs come from our experience in the public market arena
and the promulgation of additional filing requirements by the SEC in accordance
with Sarbanes-Oxley Act and its rule making authority. We expect the upward
trend of number and expediency of filings to continue.
 
 Our
Company earns revenue in several ways. Our largest generator of revenue is from
the selling of leads. We advertise key words on search engines such as Google.
When a person clicks on our advertising we are charged a fee by the search
engine. The fee we pay is usually between $.10 and $.40 per click. This type of
advertising is quite commonly called "pay per click" advertising. When a person
clicks on our advertising site it takes them to a form where they can sign up
for a news letter we are advertising. When a person signs up for that newsletter
that generates a lead for which we sell to our customer. Generally, these leads
are sold for $5.00 each. Our gross profit is generated by the difference at
which we sell our leads ($5.00) to the cost of generating that lead. On average
it takes about 10 clicks on our advertising site to generate one saleable lead.
Therefore our gross profit margin is between $1.00 and $4.00, depending on how
much we are charged by the search engine per click.
 
 In the
development of our Company so far, we have not had sufficient capital to
undertake studies for the effectiveness of our business strategy and model. The
key performance indicators have been based mostly on the income statement of the
subsidiary. That is, we have generated sufficient sales with reasonable gross
margins for the subsidiary, on its own, to have positive cash flow. As a stand
alone business the subsidiary has been profitable but due to the costs of this
registration statement and administrative costs in the parent corporation, we
have lost money overall. Another performance indicator has been revenue
generated for our customers through the sale of news letters. Management is
currently working with our customers to improve the advertising and key word
positioning to try and maximize customers' success for attracting subscribers.
We cannot control the content of the news letter, which, in the end, is
the
 
 2
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 ultimate
success of our customers. The generation of leads for them is only the means to
the end. Our customers need to provide a quality, sellable product. If not, they
will not stay in business and we will lose a customer. As our business model
develops, the sustainability of the customer news letters will be one of our
performance indicators. We will need to track the correlation between success of
the news letter and the amount of advertising they generate. Our Management
should then be able to ascertain which will be sustainable long term customers
and try to solicit more of the same type of businesses to ensure continued
growth.
 
 We are
currently only selling leads for the generation of financial news letters. We
currently have one major customer, Daimler Capital Partners, Ltd., for this
sector of our business, which has generated about 76% of our revenue for the
twelve month period ended March 31, 2004 and 44% of our revenue for the nine
month period ended December 31, 2004. Their financial newsletter is a daily
commentary on current economic trends, a technical analysis of the market and
buy and sell recommendations for both a long term and short term trading
strategy. This client has advised us that they are not required under either
U.S. or Swiss Securities laws to register as an investment advisor since they
are only republishing information from other publicly available sources. We
accept only cash payments from all of our customers. We do not take securities
as payment for our services.
 
 A
concentration of business in one customer brings a certain amount of risk to our
Company as the loss of this customer would dramatically affect our business. We
are expecting to expand our business by advertising our services on the internet
once we have completed this financing. It is a major part of our business plan
to expand the news letter business, not only in the financial area but in other
areas as well, such as health and travel. There is significant competition,
though, for this type of business with several large companies providing these
services to people. To expand in the market we will try to stay competitive with
the price of the leads we sell and by providing a flawless service of
distributing the news letter. Our challenge will be to try to keep our service
level as high as possible with the limited resources we have. Our business can
be very technical and having qualified employees to manage the systems can be
very expensive. This is one of the reasons we have not been able to expand our
business, as we want to be able to provide our customers with the maximum amount
of customer service and we do not have the employee base to meet this level of
service yet. Over the next twelve months we plan to add additional employees to
meet these technical requirements of the business.
 
 Over the
long term, we believe that the internet is a growing medium and that more and
more people will be using the internet for all types of research. We do not plan
to exclusively market financial newsletters. We believe that there is other
markets available in other areas of the economy. One particular area where we
think long term growth will occur is in the health sector. As the baby boomers
age, we believe that there will be more interest in the health and medical
issues.
 
 We do not
think that short term business cycles will affect our company in either a
positive or negative way. We feel there that the public is interested in
obtaining information on their interests in a timely fashion regardless of the
business cycle. We do not have any statistical evidence to support this believe
but the assumption is part of our business model. The long term growth in the
use of the internet is where we believe increasing revenues will be generated.
Also,
 
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 as
economic cycles change, our marketing and lead generation will be geared towards
those changes. For example, we may try to market for customers, investing
strategies in a non-inflationary environment. If inflation does become a factor
in the economy, then our marketing would be advertising on investment strategies
for high inflation.
 
 Our
biggest challenge for success will be to obtain the necessary capital to expand
our advertising base and to hire the additional employees that have the
technical expertise to provide the customer service that will make us stand out
from the competition. If we cannot expand our advertising base and attract more
customers, our ability to maintain operations would be unlikely.
 
 As we
currently have a concentration of revenue with one customer, the loss of that
customer would be extremely detrimental to the survival of the Company. We
currently have a good relationship with our customers. The financial success of
a financial news letter is heavily dependent upon their investment track record.
In today’s uncertain geo-political world there is a great risk for extreme
market swings, which could easily detrimentally affect the customer’s investment
track record. If our customers lose their revenue, they would not be in a
position to buy advertising and leads from us. The loss of our one customer
would have a detrimental affect on our ability to continue in business.
 
 We
currently have limited funds to maintain our business until funds can be raised
from the current offering. Until we do raise additional funds from the current
offering, we intend to continue operations from cash flow from the sale of
leads, management of databases, website management and EDGAR filings and loans
from our officers and directors as needed. There can be no assurance given,
though, that this cash flow and/or loans from our officers and directors, if
available, will be enough to sustain operations until additional funds can be
raised. In the event of a continued shortfall of funds from lack of cash flow,
it is expected it will be fulfilled from loans from officers and directors of
the Company but no assurance can be given as there is no written agreement. Our
officers and directors have loaned us an amount equal to the expenses of the
offering of common stock pursuant to this prospectus. Those persons have also
orally agreed to loan to us any additional funds for expenses incurred related
to the current offering. Such oral agreement is intended by all parties to be
legally enforceable. The aforementioned loans either made or to be made will be
interest free with no penalties and will be repaid, if ever, at a time when our
cash flow from operations is sufficient to make such payments. In no event shall
such loans be repaid from the proceeds of the current offering.
 
 As a
result of our incurring continuing losses since inception, our deficiency in
working capital at December 31, 2004 and other factors, our
independent certified public accountants **** have
included an explanatory paragraph in their report on our financial statements,
regarding having substantial doubt about our ability to continue as a going
concern. In the event that we are unable to raise additional capital or generate
sufficient revenue to meet our current liabilities, we may have to shut down our
business operations.
 
 RESULTS
OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2004 COMPARED TO THE YEAR ENDED MARCH
31, 2003 AND THE NINE MONTH PERIOD ENDED DECEMBER 31, 2004 COMPARED TO DECEMBER
31, 2003
 
 4
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 For the
year ended March 31, 2004, we had revenues of $161,998, as compared to revenues
of $72,530 for the year ended March 31, 2003, an increase of $89,468 or 123%.
This increase is attributable to an increase distribution of our customer’s
newsletters to third parties wanting financial information.  Our customers
continue to buy leads from us and increase their distribution base. This
increase in buying leads is a large contributing factor to the larger revenue.
The increase in revenue can also be attributed to the additional services we are
providing our customers such as database management, website management and
EDGAR filing services. For the nine months ended December 31, 2004, we had
revenue of $37,510 compared to revenues of $82,799 for the nine month period
ended December 31, 2003, a decrease of $45,289 or 55% decrease. This decrease is
attributable to our recent inability to attract new customers with our limited
advertising budget. Our major customer has not purchased as many leads in the
first half of 2004 as they did in 2003 resulting in lower revenues. Some of this
loss has been supplemented by continued sales of our other services to other
customers.
 
 For the
year ended March 31, 2004, we had operating expenses of $204,709, compared to
$180,896 for the year ended March 31, 2003, an increase of $23,813 or 13%. This
increase is primarily attributable to increased consulting fees, professional
fees and management fees that were incurred as a result of increase in
registration filings, as well as the increased business operations creating
additional costs which were not incurred in the year ended March 31, 2003. 
For example, professional fees were $61,912 for the 1 year period ended March
2004 versus $9,381 for the same period ended March 2003, an increase of $52,531
or 560%. This increase in professional fees is caused mainly by the expense of
filing this registration statement. As well there were additional costs in the
period of 2004 associated with running the business for one full year such as
writing and reviewing business contracts by legal counsel. General and
administrative fees $27,547 and $56,340 respectively for the 1 year period ended
March 31, 2004 and 2003. This decrease of $28,793 or 51% can be generally
attributed to the slow down in sales and therefore a corresponding lower cost
with less business. The higher G&A expense in 2003 can be attributed to
start up costs incurred in operating a new business. As well, management made a
strong effort to control its costs in the period ended March 2004 to conserve
capital. In the 1 year period ended March 2003 we had a line item expense of
loss on disposal of assets for $13,500 of which $10,000 was for gaming software,
the balance for computers. As this software was abandoned in 2003, we did not
have the corresponding expense in the same period ended March 2004. Fees paid as
wages and outside consulting fees were $88,935 and $48,799 respectively for the
period end March 2004 and 2003 an increase of $40,128 or 82%. The increase can
be attributed to the amount paid to our sole employee and to the president of
the company. In the 1 year period ended March 2003, we incurred travel costs of
$10,410. There were no material travel expenses incurred in the same period
ended March 2004. The travel in 2003 can be attributed to sending staff to
software training sessions. There were no such programs taken in the year ended
March 2004. For the period ended March 2003 we had advertising expenses of
$11,033. In the same 1 year period ended March 2004, we had advertising expenses
of $24,407 an increase of $13,374 or 121%. This increase can be attributed to
the increase marketing effort we had to increase sales.
 
 For the
nine month period ended December 31, 2004 we had operating expenses of $90,599
compared to $152,015 for the nine month period ended December 31, 2003 a
decrease
 
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 of
$61,416 or 40%. This decrease in expenses can be attributed to a decrease in the
purchase of leads and the corresponding decrease in sales by us. It also
reflects management’s efforts to control operating costs.
 
 For the
year ended March 31 2004 we had a net loss of $42,701, compared to a loss of
$121,766 for the year ended March 31, 2003, a decrease of $79,065 or 65%. This
decrease is primarily attributable to the increase in revenues that were
generated from the distribution of third party newsletters.   This
increase in revenue allowed us to cover fixed costs and more of the variable
costs of operation. The increase in revenue and corresponding profit in our
wholly owned subsidiary was offset by the increase in costs of professional fees
such as legal and accounting in Express Systems. The loss in the parent company,
Express, was larger than the profit provided by the wholly owned subsidiary,
Masterlist International. For the nine month period ended December 31, 2004 we
had net loss of $41,321 compared to a net loss of $45,917 for the nine month
period ended December 31, 2003 or a decrease of $4,596 or 10%. The decrease can
be attributed to fewer costs incurred in the nine month period of 2004 compared
to the same period in 2003 while maintaining better cost controls for the period
in 2004. This lowering of costs allowed for greater profit margin in our
subsidiary and subsequent smaller loss for the consolidated
company.
 
 RESULTS
OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2003 COMPARED TO THE YEAR ENDED MARCH
31, 2002
 
 For the
year ended March 31, 2003, we had revenues of $72,530, as compared to revenues
of $0 for the year ended March 31, 2002. This increase is attributable to the
development of our opt-in lead generation program in December 2002.
 
 For the
year ended March 31, 2003, we had operating expenses of $180,896, compared to
$53,043 for the year ended March 31, 2002, an increase of $127,853 or 241%. This
increase is primarily attributable to increased general and administrative
expenses and bad debt expense. Business operations for the year ended March 31,
2003 significantly increased causing general and administrative expenses to
increase, as well as a provision for uncollectable accounts
receivable.   For example, in the 1 year period ended March 31, 2002,
we had three line item expenses for our Company. The biggest expense in the
period ended March 31, 2002 was legal fees of $40,000 compared to $9,381 in the
same period ended 2003 resulting in a decrease of $30,619 or 76.5 %. The
decrease can be attributed to the fact that in 2002 we were negotiating on
acquiring a licensing agreement from Fairwind Technologies. There were
significant legal costs associated with that purchase, which were not incurred
in 2003. The other major expense in the line items was depreciation and
amortization. For the 1 year period ended March 2002 we incurred a cost of
$9,804 versus $558 in the same period ended 2003 a decrease of $9,246 or 94%.
The change can be attributed to the depreciation of software acquired in 2002
and subsequently abandoned in 2003. Travel was the other line item in the 1 year
period ended March 31, 2002 in the amount of $3,239 versus $10,409 for the same
period ended March 31, 2003 or an increase of $7,171 or 221%. The increase can
be attributed to the fact in 2003 we sent employees on training programs to
learn the software we had acquired when we started our current business.
 
 6
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 For the
year ended March 31 2003 we had a net loss of $121,766, compared to a loss of
$53,043 for the year ended March 31, 2002, an increase of $68,723 or 130%. This
increase is principally attributable to the increase in operating expenses,
primarily general and administrative expenses.
 
 LIQUIDITY
AND CAPITAL RESOURCES
 
 As of
March 31, 2004, we had $9,210 cash-on-hand compared to $5,692 as of March 31,
2003, an increase of $3,518 or 62%.  The increase can be attributed to
better cost controls of management.   As of December 31, 2004 we
had an approximate cash balance of $1,058. As of March 31, 2004, our total
current assets exceed our current liabilities by $19,145. Our current ratio
(current assets to current liabilities ratio) for the 1 year period ended March
31, 2004 was 1.56. As of December 31, 2004 we had $1,058 cash on hand compared
to $9,210 for the year ended March 31, 2004. This is a decrease of approximately
$8,152 or 88%. This decrease can be attributed to our ongoing lack of capital
and use of any available capital to attempt to grow the business. Our current
ratio for the nine month period ended December 31, 2004 was .53. We currently
have limited funds to maintain our business until funds can be raised from the
current offering. Until we do raise additional funds from the current offering,
we intend to continue operations from cash flow from the sale of leads,
management of databases, website management and EDGAR filings and loans from our
officers and directors as needed. There can be no assurance given, though, that
this cash flow and/or loans from our officers and directors, if available, will
be enough to sustain operations until additional funds can be raised. In the
event of a continued shortfall of funds from lack of cash flow, it is expected
it will be fulfilled from loans from officers and directors of the Company but
no assurance can be given as there is no written agreement. No such loans have
been made to date but if such loans are made by the officers and directors they
have orally agreed that the loans will be interest free with no terms of
repayment. In any event, if loans are made by the officers and directors to the
Company, then the officers and directors have orally agreed that their loans
will not be repaid from the proceeds of the current offering.
 
 We will
also try to manage our costs to ensure that the cash flow from operations will
allow us to maintain our business. This effort, however, may effect our ability
to attract new customers and even maintain existing customers if we can not
provide them with adequate services.   We have the authority to issue
25,000,000 shares of common stock, $0.001 par value. Prior to this filing, we
have raised all funds through private placements. In July, 1998, we issued
1,000,000 shares of common stock to G.M Capital Partners, Ltd. for $1,000. In
November 1998 we sold 1,000,000 shares of common stock to eight investors for
$10,000. In November 1998 we also sold 35,000 shares of common stock for
proceeds of $1,750. In January 2001, we sold 200,000 shares of common stock for
proceeds of $100,000. In December 1002 we sold 215,200 shares of commons stock
for proceeds of $107,600.
 
 Related
Party Transactions
 
 During
the year ended March 31, 2002, the Company advanced $12,000 to its former
president, Philip Fox. The advance was non-interest bearing and had no due date.
During the year ended March 31, 2003, the Company charged the amount to
consulting expense.
 
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 A
principal shareholder of Capilano Holdings, Ltd., a shareholder of Express,
advanced $10,811 to Express for operating expenses. The amount owed by Express
at March 31, 2004 and March 31, 2003 was $10,811 and $1,417, respectively. The
amounts are non-interest bearing and have no due dates. As of December 31, 2004,
the funds owed to the party in the amount of $10,811 were still outstanding.
Express also re-imbursed Capilano Holdings for expenses paid on its behalf
during the year ended March 2003 in the amount of $11,600.
 
 During
the years ended March 31, 2004 and 2003, Express paid consulting fees to a
principal shareholder of Capilano Holdings, a shareholder of Express, of $23,827
and $33,500 respectively. For the nine month period ended December 31, 2004, we
paid $5,000 in consulting fees to this party. The fees were paid for
financial consulting services provided to the company in structuring its
affairs. In addition, for the period ended March 31, 2002, consulting fees of
$25,000 were paid to a shareholder of Express. These fees were paid as part of
the time spent by the shareholder researching, finding and negotiating its
licensing with Fairwind Technologies. During the years ended March 31, 2004 and
2003 Express paid wages to an employee, who is also a shareholder of Express, in
the amounts of $47,000 and $15,299 respectively.  Furthermore, during the
year ended March 31, 2004 Express paid an officer and director
$18,100.
 
 Working
Capital
 
 We had
net working capital of $17,842 at March 31, 2004, as compared to net working
capital of $3,985 at March 31, 2003, an increase of $13,857 or 348%. The
increase in working capital was a result of the development of our opt-in lead
generation program in late 2002 to the sale of double opt-in leads to our
customers and from managing our customers’ websites and databases in the current
year.  We had working capital of $24,557 for the nine month period ended
December 31 2004 compared to $56,430 for the nine month period ended December
31, 2003, a decrease of $31,873 or 56%. This decrease can be attributed to
the decrease in sales of the lead generation business.  We do not have
sufficient working capital to maintain operations at a profitable level and are
dependent upon cash flow from operations and the raising of additional capital
to keep our operation going. We believe that the closing of this proposed
offering would give us sufficient capital to implement our business plan for the
next 12 months. Until we do receive funds from the current offering, we believe
that we can maintain operations from cash flow, though at a reduced level of
operations that we think is optimal. To maintain operations, though, even at a
minimal level, we could not afford to lose any customers and the assumption that
we can maintain operations through cash flow includes the assumption we will
maintain all of our current customers. If our cash flow will not sustain
operations until we receive the proceeds from the current offering, we would
have to depend on additional loans from our directors to maintain operations. No
assurance, though, may be given that the directors would have sufficient capital
to maintain the operations through loans.   We are in the development
stage and the following items could be used to assess our liquidity. For the 1
year period ended March 31, 2004, our current asset to current liability ratio
is 1.56 allowing us to maintain our liabilities as current for that period. For
the nine month period ended December 31, 2004 our current ratio was .83 which is
not sufficient for us to keep or liabilities current. Unless items on the cash
flow statement such as financing activities increase, the ability for us to
maintain operations is unlikely at our current revenue to expenses
rate.
 
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 Most of
our expenditures from the current offering will be in the addition of 1 full
time employee and increased advertising on the internet to generate additional
business. If after the 12 month period we did not generate sufficient revenue to
cover our costs, we would need to do additional financing. If we could not raise
additional capital, it is unlikely that the company would be able to maintain
its business operations at an optimal level. Though, if we lost any of our
customers, and we did not raise additional capital, we would not be able to
maintain our operations.
 
 Cash
Flow from Operating Activities
 
 Net cash
used in operating activities for the years ended March 31, 2004 and 2003 was
$2,925 and $32,139 respectively, a decrease of $29,214 or 91%. The decrease is
attributable to our increased business activity after implementing the opt-in
lead program in December 2002.  Net cash used in operating activities for
the nine month period ended December 31, 2004 and 2003 was $8,152 and $46,813 a
decrease of $38,661 or 79%. This decrease can be attributed to the lower sales
generated and corresponding lower costs to run the business in the nine month
period ended December 31, 2004.  Assuming we receive the funds from the
current offering, we should be able to generate more revenue from sales of leads
and continue to use less cash in operations. As we do have a concentration of
revenue from one customer, it is important for us to attract additional
customers to ensure as steady and growing cash flow to fund ongoing operations.
The loss of this customer prior to finding additional customers would be very
detrimental to the business.
 
 Cash
Flow from Investing Activities
 
 Net cash
used by investing activities for the years ended March 31, 2004 was $0 as
compared to $6,037 for the same period in 2003. The decrease is attributable to
the purchase of property and equipment in the year ended March 31, 2003, when
nothing was acquired in the year ended March 31, 2004.  There was no cash
flow from investing activities for the nine month period ended December 31, 2004
and 2003.
 
 Cash
Flow from Financing Activities
 
 Net cash
provided by financing activities for the year ended March 31, 2004 was $55,000
as compared to $107,600 for the year ended March 31, 2003. The decrease is
attributable to fewer common shares issued in fiscal year 2004 then in fiscal
year 2003.  For the nine month period ended December 31, 2004 and 2003 the
cash flow from financing activities was $0 and $45,000 respectively. The cash
flow from financing activities in 2003 was from the sale of securities. There
were no corresponding cash flows from investing activities in the nine month
period ended December 31, 2004 as no securities were sold.
 
 Until an
infusion of capital from the current offering is received, our operations will
most likely remain limited. We currently have insufficient capital to continue
operations and are dependent cash flow from operations and the proceeds of the
current offering or some other source of funds, such as loans from officers and
directors, to continue operations. We have an oral agreement with officers
and directors to loan money to the company without interest or no
 
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 specific
terms of repayment. If a loan was received from the officers and directors, they
have orally agreed not to seek repayment of their loans from the proceeds of the
current offering. We have not identified any additional sources of funds to date
to maintain our operations if we lose any of our customers and therefore lose
our cash flow. We would anticipate that if we do not receive additional funding
that our operations would cease within 150 days.
 
 If we do
raise capital, we may require additional funds to implement our growth strategy
in our lead generation business. These funds may be raised through equity
financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares. There is still no assurance that
we will be able to maintain operations at a level sufficient for an investor to
obtain a return on his investment in our common stock. Further, we may continue
to be unprofitable.
 
 To date
we have raised most of our funds through equity placements pursuant to
Regulation S and Regulation D, Rule 504. Most of this capital was used to start
an internet gaming business. The company we had bought our license from
subsequently went out of business and we abandoned that strategy. In November
2002, we raised approximately $107,000 to fund our initial lead generation
business. $25,000 of those funds raised were used to acquire the technology for
our business. The balance has been used for operating costs and initial start up
of the business. In May 2003, the Company raised approximately $55,000 to fund
continuing business operations. Recently, we have been operating mainly on the
cash flow from our business but can provide no assurance that we may be able to
continue to do so. Our sale of leads has dropped off significantly over the last
6 months, as we have been unable to attract any new customers. Our web site
management business has maintained its revenue at a steady level of
approximately $7,000 per month. Our new business, the filing of SEC documents on
Edgar has generated approximately $4,000 in revenue since beginning in February
2004. We hope to grow this business over the ensuing month but due to a lack of
funds, we have not been able to advertise our services on a consistent basis and
rely on our personal contacts in the public market to generate
business.
 
 Over the
next twelve months we intend to use all available funds to meet our current
obligations and to continue our ongoing development of the lead generation
business and the EDGAR filing business. Our current obligations for the next 12
months is as follows:
 
 Legal
      Fees
    $20,000Accounting
      and Audit Fees
    11,000Management
      Fees
    18,100Office
      Expenses
    2,400Total
    $51,500
 
 We have
suffered recurring losses from operations and have negative net working capital
of $19,588 as of December 31, 2004, which raises substantial concern regarding
our ability to continue as a going concern. The current offering is an all or
none offering and so, if the current offering is successfully concluded we
anticipate that we will spend immediately approximately $5,000 upgrading our
software. We plan to spend approximately $20,000 developing web site to
 
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 host our
lead generation advertising programs. The development of these web sites will
begin immediately after we receive funding from the current offering. It is
anticipated that it will take approximately 60 days to complete this task. These
advertising sites are important for us to build so that we can continue to build
our database and sell leads to our customers. Immediately upon the completion of
the current offering we will incur approximately $10,000 acquiring additional
computer equipment.
 
 A key
component to our strategy will be the implementation of a marketing plan to
promote our web site. We intend spend $100,000 on the marketing strategy using
Internet marketing programs to capture and retain customers. We would anticipate
that the spending of these funds would be equally spread over an 8 month period.
To initially penetrate the lead generation market, we intend to promote our web
site by advertising on the internet. This campaign would be run over the ensuing
nine months with anticipated total cost of $75,000. We will also focus on joint
advertising ventures with complementary companies to promote our website. We
would not expect to have the internet marketing program started for
approximately 60 days from the closing of the current offering and cost of
this program would be approximately $30,000 spread over an 8 month period
from the time it started. Internet marketing efforts will include advertising
with online search engines affiliate marketing programs, and barter advertising.
After making these expenditures, we will have remaining in working capital
approximately $75,000. The remaining working capital funds will be used mainly
to pay wages, a monthly management fee of $1,000 to the President, to pay
ongoing legal and accounting expenses and monthly general office expenses for
such things as postage, courier, and telephones.
 
 Our
functional currency is the United States Dollar and our consolidated financial
statements are reported in United States Dollars unless otherwise stated.
 
 *New
Accounting Pronouncements*
 
 In
April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections." Such standard
requires any gain or loss on extinguishments of debt to be presented as a
component of continuing operations (unless specific criteria are met) whereas
SFAS No. 4 required that such gains and losses be classified as an
extraordinary item in determining net income. Upon adoption of SFAS
No. 145, we will reclassify any extraordinary gains and losses on the
extinguishments of debt recorded in prior periods to continuing operations. The
adoption of SFAS 145 did not have a material effect on our financial position or
results of operations.
 
 On
December 31, 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure." This standard amends SFAS
No. 123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. This standard also requires
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of
the
 
 11
 Table of Contents
 
 method
used on reported results. The disclosure requirements of SFAS No. 148 are
required to be included in the summary of significant accounting policies.
 
 In May
2003, SFAS 150, "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity", was issued. This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. Generally, a financial instrument, whether
in the form of shares or otherwise, that is mandatory redeemable, i.e. that
embodies an unconditional obligation requiring the issuer to redeem it by
transferring its shares or assets at a specified or determinable date (or dates)
or upon an event that is certain to occur, must be classified as a liability (or
asset in some circumstances). In some cases, a financial instrument that is
conditionally redeemable may also be subject to the same treatment. This
Statement does not apply to features that are embedded in a financial instrument
that is not a derivative (as defined) in its entirety. For public entities, this
Statement is effective for financial instruments entered into or modified after
May 31, 2003. The adoption of SFAS 150 did not effect the Company's financial
position or results of operations.
 
 *Application
of Critical Accounting Policies*
 
 Our
financial statements and accompanying notes are prepared in accordance with
generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses. These
estimates and assumptions are affected by management’s application of accounting
policies. We believe that understanding the basis and nature of the estimates
and assumptions involved with the following aspects of our consolidated
financial statements is critical to an understanding of our
financials.
 
 We
consider all highly liquid investments with an original maturity of three months
or less to be cash equivalents.
 
 Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. We have chosen to account for stock-based compensation Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB25") and have adopted the disclosure only provisions of SFAS 123.
Accordingly, compensation for stock options is measured as the excess, if any,
of the quoted market price of our stock at the date of grant over the amount an
employee is required to pay for the stock.
 
 We
account for stock-based compensation issued to non-employees and consultants in
accordance with the provisions of SFAS 123 and the Emerging Issues Task Force
consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments
that are issued to Other Than Employees for Acquiring or in Conjunction with
Selling Goods or Services".
 
 12
 Table of Contents
 
 Revenue
from sales or services will be recognized at the time the product is delivered
or at the time the service is performed.
 
 Transaction
amounts denominated in foreign currencies are translated at exchange rates
prevailing at transaction dates. Carrying values of monetary assets and
liabilities are adjusted at each balance sheet date to reflect the exchange rate
at that date. Non-monetary assets and liabilities are translated at the exchange
rate on the original transaction date. Gains and losses from restatement of
foreign currency monetary and non-monetary assets and liabilities are included
in the statement of operations. Revenue and expenses are translated at the dates
such items are recognized in the statement of operations.
 
 Our
financial instruments consist of cash, prepaid expenses and other liabilities.
The carrying amounts of financial instruments approximate fair value due to
their short maturities.
 
 Financial
instruments that potentially subject us to concentrations of credit risk
consists primarily of cash in excess of the federally insured amount of
$100,000. To date, we have not incurred a loss relating to this concentration of
credit risk.
 
 We
account for income taxes in accordance with Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". Under the asset and liability
method of Statement 109, deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.
 
 Earnings
per share requires presentation of both basic earnings per common share and
diluted earnings per common share. Common stock equivalents are not included in
the weighted average calculation since their effect would be
anti-dilutive.
 
 The
preparation of the 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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
 
 **PART II. - OTHER INFORMATION**
  **Item 1.**
    **Legal Proceedings.**
      ****None**Item
      2.**
      ****
    **Changes in Securities**None**Item
      3.**
      ****
    **Defaults by the Company on its Senior
      Securities**
      ****None
  13
 Table of Contents
  **Item 4.**
    **Submission of Matters to a Vote of
      Security Holders**
      ****None**Item
      5.**
      ****
    **Other Information**None**Item
      6.**
      ****
    **Item 6.****Exhibits
      and Reports on Form 8-K.**
      ****
 ****
 **INDEX TO EXHIBITS**
 
 Exhibit
      No.
    Identification
      of Exhibit3.1
    Articles
      of Incorporation*3.2
    By-Laws*4.1
    Form
      of specimen of common stock*5.1
    Legal
      Opinion of Rubin, Bailin, Ortoli, Mayer & Baker LLP*10.1
    Overture
      Agreement*10.2
    List-op
      Agreement*10.3
    Bluegenesis.com*10.4
    Google
      Agreement*10.5
    Form
      of Subscription Agreement*10.6
    Escrow
      Agreement with Rubin, Bailin, Ortoli, Mayer & Baker
    LLP*16.1
    8-K
      Resignation Letter - Spicer Jeffries LLP*21.1
    List
      of Subsidiaries*23.1
    Consent
      of Auditor (Staley, Okada & Company)*23.2
    Consent
      of Auditor (Spicer Jeffries LLP)*31.1
    Certifications32.1
    Certification Pursuant to 18 U.S.C. Section 1350, as
      Adopted Pursuant to
      Section 906 of the Sarbanes-Oxley Act of
      2002
 
 ***** Previously
filed
 
 **SIGNATURES**
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, Express Systems has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
  Dated: February 14, 2005
    **Express Systems
      Corporation**
      
      /s/ Lawrence Rosenblat
      Lawrence
      Rosenblat
      President,
      CEO, Principal Accounting
      Officer,
      Principal Financial Officer
      and DirectorDated: February 14, 2005
    /s/
      Frank Bauer
      Frank
      Bauer
      Secretary
      and Director
 ****
 14
 ****