UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2000
--------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number: 0-31503
E-COM TECHNOLOGIES CORP.
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(Exact name of registrant as specified in its charter)
Nevada 98-0199981
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
388-1281 W. Georgia St. Vancouver, B.C., Canada V6E 3J7
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(Address of principal executive offices) (Zip Code)
(604) 608-6336
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(Registrant's telephone number, including area code)
N/A
---
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 12,513,913
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
Yes [ ] No [X]
<PAGE>
E-COM TECHNOLOGIES CORP.
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Unaudited Interim Consolidated Balance Sheet as at
September 30, 2000 and December 31, 1999 3
Unaudited Interim Consolidated Statements of Operations
and Comprehensive Income for the 3 month and 9 month
periods ended September 30, 2000 and September 30, 1999. 4
Unaudited Interim Consolidated Statement of Stockholders' Equity 5
Unaudited Interim Consolidated Statements of Cash Flows
for the 9 months ended September 30, 2000 and September 30, 1999 6
Notes to Unaudited Interim Consolidated Financial Statements 7
Item 2. Management's Discussion and Plan of Operation 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Securities Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
<PAGE>
<TABLE>
<CAPTION>
Item 1.
E-COM TECHNOLOGIES CORP.
Interim Consolidated Balance Sheets
(Expressed in U.S. Dollars)
September 30, December 31,
2000 1999
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . $ 40,367 $ 4,648
Accounts receivable and other assets . . . . 11,598 2,054
Work in progress . . . . . . . . . . . . . . 2,674 -
-------------------------------
Total current assets . . . . . . . . . . . . 54,639 6,702
-------------------------------
Fixed assets (note 3). . . . . . . . . . . . 39,946 3,904
-------------------------------
Total assets . . . . . . . . . . . . . . . . $ 94,585 $ 10,606
================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities . . $ 43,861 $ 3,059
Current portion of capital leases (note 4) . 5,713 -
--------------------------------
49,574 3,059
Long-term portion of capital leases (note 4) 9,463 -
Stockholders' equity:
Common stock (note 5):
Authorized:
90,000,000 common voting shares, par value
of $0.001 per share
Issued and outstanding:
12,513,913 (December 31, 1999 - 4,200,000)
common voting shares . . . . . . . . . . . . 12,514 4,200
Additional paid-in capital . . . . . . . . . 193,077 -
Retained earnings (deficit). . . . . . . . . (166,292) 3,350
Cumulative translation adjustment. . . . . . (3,751) (3)
--------------------------------
Total stockholders' equity . . . . . . . . . 35,548 7,547
Total liabilities and stockholders' equity . $ 94,585 $ 10,606
================================
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
E-COM TECHNOLOGIES CORP.
Interim Consolidated Statements of Operations and Comprehensive Income
(Expressed in U.S. Dollars)
From January
Three months Three months Nine months 29, 1999
ended ended ended (inception) to
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues:
Website services. . . . . . . . . . . . . . . . . . . $ 10,679 $ 6,204 $ 31,114 $ 50,150
Hardware/software sales . . . . . . . . . . . . . . . 17,573 - 20,776 -
28,252 6,204 51,890 50,150
-----------------------------------------------------------------
Cost of sales and services. . . . . . . . . . . . . . (14,642) (15,594) (24,463) (21,277)
-----------------------------------------------------------------
13,610 (9,390) 27,427 28,873
Expenses:
Depreciation. . . . . . . . . . . . . . . . . . . . . 3,991 230 8,076 380
Selling, general and administrative . . . . . . . . . 77,004 1,180 188,993 7,316
----------------------------------------------------------------
Total expenses. . . . . . . . . . . . . . . . . . . . 80,995 1,410 197,069 7,696
Net income (loss) before income taxes . . . . . . . . (67,385) (10,800) (169,642) 21,177
Income taxes expense (recovery) . . . . . . . . . . . - 2,292 - 4,754
----------------------------------------------------------------
Net income (loss) . . . . . . . . . . . . . . . . . . (67,385) (8,508) (169,642) 16,423
Other comprehensive income:
Foreign currency translation adjustment . . . . . . . (3,244) (382) (3,748) (382)
----------------------------------------------------------------
Comprehensive income (loss) . . . . . . . . . . . . . $ (70,629) $ (8,890) $ (173,390) $ 16,041
Basic and diluted loss per share (note 2(h)). . . . . $ (.01) $ - $ (0.01) $ -
Weighted average number of common shares outstanding. 12,504,863 10,500,000 12,262,371 9,691,837
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
E-COM TECHNOLOGIES CORP.
Interim Consolidated Statements of Stockholders' Equity (Deficiency)
(Expressed in U.S. Dollars)
Period from January 29, 1999 (inception) to September 30, 2000 (unaudited)
Accumulated
Additional retained
Common stock paid-in earnings
Shares Amount capital (deficit)
<S> <C> <C> <C> <C>
Balance, January 31, 1999
Issued for cash at $.0004 per share
post split. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000 $ 3,000 $ - $ -
April 4, 1999
Issued for cash. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 1,200 - -
Foreign currency
Translation adjustments. . . . . . . . . . . . . . . . . . . . . . . - - - -
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - 3,350
--------------------------------------------------------
Balance, December 31, 1999 . . . . . . . . . . . . . . . . . . . . . 10,500,000 4,200 - 3,350
April 30, 2000
Issued for cash. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,195,650 478 119,087 -
April 30, 2000
Issued for services. . . . . . . . . . . . . . . . . . . . . . . . . 129,250 52 12,873 -
April 30, 2000
Issued for cash. . . . . . . . . . . . . . . . . . . . . . . . . . . 677,013 271 67,430 -
Foreign currency
Translation adjustments. . . . . . . . . . . . . . . . . . . . . . . - - - -
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - (102,257)
--------------------------------------------------------
Balance, June 30, 2000 . . . . . . . . . . . . . . . . . . . . . . . 12,501,913 12,502 191,889 (98,907)
September 18,
Issued for services. . . . . . . . . . . . . . . . . . . . . . . . . 12,000 12 1,188 -
Foreign currency
Translation adjustments. . . . . . . . . . . . . . . . . . . . . . . - - - -
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - (67,385)
-------------------------------------------------------
Balance, September 30, 2000. . . . . . . . . . . . . . . . . . . . . 12,513,913 $ 12,514 $ 193,077 $ (166,292)
See accompanying notes to interim consolidated financial statements.
Accumulated Total
other stockholders'
comprehensive equity
income (deficiency)
<S> <C> <C>
Balance, January 31, 1999
Issued for cash at $.0004 per share
post split. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 3,000
April 4, 1999
Issued for cash. . . . . . . . . . . . . . . . . . . . . . . . . . . - 1,200
Foreign currency
Translation adjustments. . . . . . . . . . . . . . . . . . . . . . . (3) (3)
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 3,350
---------------------------
Balance, December 31, 1999 . . . . . . . . . . . . . . . . . . . . . (3) 7,547
April 30, 2000
Issued for cash. . . . . . . . . . . . . . . . . . . . . . . . . . . - 119,565
April 30, 2000
Issued for services. . . . . . . . . . . . . . . . . . . . . . . . . - 12,925
April 30, 2000
Issued for cash. . . . . . . . . . . . . . . . . . . . . . . . . . . - 67,701
Foreign currency
Translation adjustments. . . . . . . . . . . . . . . . . . . . . . . (504) (504)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (102,257)
---------------------------
Balance, June 30, 2000 . . . . . . . . . . . . . . . . . . . . . . . (507) 104,977
September 18,
Issued for services. . . . . . . . . . . . . . . . . . . . . . . . . - 1,200
Foreign currency
Translation adjustments. . . . . . . . . . . . . . . . . . . . . . . (3,244) (3,244)
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (67,385)
---------------------------
Balance, September 30, 2000. . . . . . . . . . . . . . . . . . . . . $ (3,751) $ 35,548
See accompanying notes to interim consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
E-COM TECHNOLOGIES CORP.
Interim Consolidated Statements of Cash Flows
(Expressed in U.S. Dollars)
Nine months From
ended inception to
September 30, September 30,
2000 1999
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . $ (169,642) $ 16,473
Non-cash item:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . 8,076 380
Changes in non-cash operating
working capital:
Accounts receivable. . . . . . . . . . . . . . . . . . . . . (9,544) (3,623)
Work in progress . . . . . . . . . . . . . . . . . . . . . . (2,674) -
Accounts payable and accrued liabilities . . . . . . . . . . 40,802 3,664
----------------------------------
Total cash flows (used in) provided by operating activities. (132,982) 16,894
Cash flows from financing activities:
Issuance of capital stock. . . . . . . . . . . . . . . . . . 201,391 4,200
Repayment of obligations under capital lease . . . . . . . . (2,362) -
-----------------------------------
Total cash flows (used in) provided by financing activities. 199,029 (1,655)
Cash flows from investing activities:
Purchase of equipment. . . . . . . . . . . . . . . . . . . . (26,580) (2,108)
----------------------------------
Total cash flows (used in) investing activities. . . . . . . (26,580) (2,108)
Increase in cash . . . . . . . . . . . . . . . . . . . . . . 39,467 13,131
Effect of foreign exchange rate changes on cash. . . . . . . (3,748) (762)
Cash, beginning of period. . . . . . . . . . . . . . . . . . 4,648 -
---------------------------------
Cash, end of period. . . . . . . . . . . . . . . . . . . . . $ 40,367 $ 12,369
Supplementary disclosure:
Non-cash transactions:
Common shares issued for services. . . . . . . . . . . . . . $ 12,925 $ -
Capital assets purchased under capital lease . . . . . . . . 17,538 -
Income taxes paid. . . . . . . . . . . . . . . . . . . . . . - -
Interest expense paid. . . . . . . . . . . . . . . . . . . . - -
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
E-COM TECHNOLOGIES CORP.
Notes to Interim Consolidated Financial Statements
(Expressed in U.S. Dollars)
Nine months ended September 30, 2000 (Unaudited)
1. OPERATIONS:
The Company was organized on January 29, 1999 (Inception) under the laws of the
State of Nevada as E-Com Technologies Corp. The company has a 100% owned
subsidiary, E-Com Consultants (Canada) Corp., which was incorporated in the
province of British Colombia. The Company develops e-commerce systems,
web-based applications, performs Internet marketing and consulting services and
designs and hosts web sites. Certain conditions, discussed below, currently
exist which raise substantial doubt upon the validity of this assumption. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
The Company's interim financial statements are prepared on a going concern basis
in accordance generally accepted accounting principles in the United States
which contemplates the realization of assets and discharge of liabilities and
commitments in the normal course of business. The Company has begun to generate
revenues from sales of hardware and software, and website services but is not
yet sufficient to cover operating costs. Furthermore, the Company has
experienced negative cash flows from operations for the nine months ended
September 30, 2000. The Company plans to increase revenue through marketing
efforts and business development and also plans to seek additional equity
financings to fund future operations.
For the period from incorporation to September 30, 2000, the Company operated as
one business segment, web-site and services and related services.
All of the Company's revenues are generated in Canada.
2. SIGNIFICANT ACCOUNTING POLICIES:
(a) Basis of presentation:
These interim consolidated financial statements have been prepared using
generally accepted accounting principles in the United States.
The interim consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary E-Com Consultants (Canada) Corp. All
intercompany balances and transactions have been eliminated.
The interim financial statements reflect all adjustments, consisting solely of
normal recurring adjustments, which, in management's opinion, are necessary for
a fair presentation of the results of operations for the interim periods
presented. The financial statements have been prepared consistent with the
accounting policies described in the Company's financial statements in Form
10-SB filed with the Securities and Exchange Commission for the year ended
December 31, 1999, and should be read in conjunction therewith.
<PAGE>
E-COM TECHNOLOGIES CORP.
Notes to Interim Consolidated Financial Statements, page 2
(Expressed in U.S. Dollars)
Nine months ended September 30, 2000 (Unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(b) Foreign operations:
The functional currency of the Company's wholly-owned Canadian subsidiary is the
Canadian dollar. Assets and liabilities that are originally denominated in
foreign currencies are translated into the United States dollar reporting
currency at the rate of exchange in effect of the balance sheet date. Revenues
and expenses are translated at average rates of exchange prevailing during the
year. Exchange gains and losses arising on the translation are excluded from
the determination of income and reported in the cumulative translation
adjustment in stockholders' equity.
(c) Fixed assets:
Fixed assets are stated at cost. Depreciation is provided using the
straight-line method at the following annual rates:
Assets Rate
Computer equipment 3 years
Web sites 2 years
Furniture and fixtures 5 years
(d) Software development costs:
The Company accounts for internal use software in accordance with the provisions
of AICPA Statement of Position No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use", which requires certain direct
costs and interest costs that are incurred during the application stage of
development to be capitalized and amortized over the useful life of software.
Software development costs consist of amounts paid to third party programmers
and consultants to develop the website during the application development stage
and are amortized on a straight-line basis over five years commencing at the
time the website became available for use.
(e) Income taxes:
Income taxes are provided for using the asset and liability method of
accounting. A deferred tax asset or liability is recorded for all temporary
differences between the carrying values of assets and liabilities for financial
and tax reporting purposes and of tax loss carryforwards based on the enacted
tax rates in the expected period of reversal of the difference.
A valuation allowance is provided to the extent that it is considered more
likely than not that the deferred tax assets arising due to loss carryforwards
or temporary differences will not be realized.
<PAGE>
E-COM TECHNOLOGIES CORP.
Notes to Interim Consolidated Financial Statements, page 3
(Expressed in U.S. Dollars)
Nine months ended September 30, 2000 (Unaudited)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
(f) Revenue recognition:
The Company recognizes revenue on web-site services which includes development
of e-commerce websites and strategies, web design, consulting and custom
programming of web based applications on a percentage of completion basis and on
Hardware / Software Sales when the product is shipped to customers from
distributors' warehouse to the customer.
(g) Use of estimates:
The preparation of interim financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period.
Assumptions underlying these estimates are limited by the availability of
reliable data and the uncertainty of predictions concerning future events.
Consequently, the estimates and assumptions made do not necessarily result in a
precise determination of reported amounts. Actual results could differ from
those estimates.
(h) Loss per share:
Basic loss per share is computed by dividing income (loss) attributable to the
common shareholders by the weighted average number of common shares outstanding
during the period. Diluted income (loss) per share is computed using the
weighted average number of common and potentially dilutive common stock
outstanding during the period. As the Company has no options or warrants
outstanding, basic and diluted loss are the same.
3. FIXED ASSETS:
Accumulated Net book
2000 Cost depreciation value
Computer equipment $ 30,066 $ 4,149 $ 25,917
Furniture and fixtures 864 58 806
Web sites 17,352 4,129 13,223
-------------------------------------------
$ 48,282 $ 8,336 $ 39,946
Accumulated Net book
1999 Cost depreciation value
Web sites $ 4,436 $ 532 $ 3,904
<PAGE>
E-COM TECHNOLOGIES CORP.
Notes to Interim Consolidated Financial Statements, page 4
(Expressed in U.S. Dollars)
Nine months ended September 30, 2000 (Unaudited)
4. OBLIGATIONS UNDER CAPITAL LEASES:
The Company leases computer equipment under capital leases, denominated in
Canadian dollars, and expiring at various dates to 2003. As at September 30,
2000, the future minimum lease payments under capital leases were as follows:
2001 $ 7,462
2002 7,059
2003 3,467
-----------
17,988
Less amount representing interest (2,812)
------------
15,176
Less current portion (5,713)
-------------
$ 9,463
Interest rates on the capital leases range from approximately 11.9% to 15%. Two
of the leases are guaranteed by two stockholders.
5. COMMON STOCK:
The Company had a forward stock split 2.5:1 on May 23, 2000. This has been
reflected in the interim consolidated statements of stockholders' equity
(deficiency) on a retroactive basis.
Stock issued in exchange for services rendered have been accounted for based on
the estimated fair value of the equity instruments at the date of issuance.
6. RELATED PARTY TRANSACTIONS:
Related party transactions not disclosed elsewhere in these consolidated
financial statements are as follows:
(a) Included within general and administration expenses is $63,000 paid to
companies controlled by officers and directors of the company. The fees were
paid in consideration for the provision of management and consulting services to
the company.
At September 30, 2000, accounts payable includes an amount of $19,260 payable
companies controlled by officers and directors of the company.
(b) The Company utilizes certain office and operating equipment that is
provided by a company that is owned by the Company's President at no charge.
<PAGE>
Item 2. Management's Discussion and Plan of Operation
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about our business,
financial condition and prospects that reflect our assumptions and beliefs based
on information currently available. We can give no assurance that the
expectations indicated by such forward-looking statements will be realized. If
any of our assumptions should prove incorrect, or if any of the risks and
uncertainties underlying such expectations should materialize, our actual
results may differ materially from those indicated by the forward-looking
statements.
The key factors that are not within our control and that may have a direct
bearing on operating results include, but are not limited to, the acceptance of
our products and services, our ability to expand our customer base, our ability
to raise capital in the future, the retention of key employees and changes in
the regulation of our industry.
There may be other risks and circumstances that we are unable to predict. When
used in this Quarterly Report, words such as, "believes," "expects,"
"intends," "plans," "anticipates," "estimates" and similar expressions are
intended to identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions. All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.
General
E-Com Technologies, Inc. ("E-Com" or the "Company"), a Nevada corporation, was
incorporated on January 29, 1999. We are an e-business company employing the
latest technologies to develop solutions for a global marketplace. Our principal
products and services include the development of e-commerce web sites and
strategies, web design and hosting, domain name registration, online payment
processing, retailing of hardware and software, Internet marketing and
consulting and custom programming of web based applications. Our mission is to
provide a full range of Internet professional services for clients interested in
building and developing their e-commerce strategies.
We have an experienced management team with expertise in the areas of
technology, finance, marketing and promotion. Headquartered in Vancouver,
Canada, our Company is poised to capitalize on the technological resources that
are readily available at a significantly lower cost than in most regions of
North America. We also have organized talented offshore programming teams who
provide assistance on various projects at costs substantially lower than in
North America. The Company has filed its Form 10-SB with the Securities and
Exchange Commission, which became effective November 10, 2000. As of December
15, 200 our common shares have been quoted for trading on the OTC Bulletin
Board.
Results of Operations
The Company generated revenues of $51,890 for the 3 quarters ended September 30,
2000. This represents an increase of $1,740 as compared to the same period in
the prior year. Revenues for the quarter ended September 30, 2000 were $28,252
as compared to $6,204 in the prior year. This increase in revenue can be
attributed to sales generated from marketing and business development efforts
and the establishment of the Company's name in the local marketplace. Revenues
in 1999 were generated primarily from one client, while the client base has
diversified in 2000. Cost of sales increased from $21,277 for the 3 quarters
ended September 30, 1999 to $24,463 for the 3 quarters ended September 30, 2000.
Gross margin percentage declined during the 3 quarters ended September 30, 2000
as compared to the prior year as a significant amount of the Company's revenue
was derived from computer hardware and software sales, which has lower margins
than on website services revenue. Cost of sales for the quarter ended September
30, 2000 were $14,642 as compared to $15,594 for the quarter ended September 30,
1999. Total operating expenses increased from $7,696 for the 3 quarters ended
September 30, 1999 to $197,069 for the same period in 2000. For the quarter
ended September 30, 2000 operating expenses were $80,995 as compared to $1,410
for the same quarter in the prior year. The increase in expenditures can be
attributed to the expansion of the programming and marketing staff, additional
marketing activities, development of the Company's web sites, as well as a
general increase in overhead expenses reflecting the growth of the Company. We
had a net loss of $169,642 for the 3 quarters ended September 30, 2000 as
compared to a net income of $16,423 for the comparable period in 1999. For the
quarter ended September 30, 2000 the net loss was $67,385 as compared to $8,508
for the same quarter in 1999. The increase in net losses was due to higher
operating expenses, primarily selling, general and administrative expenses.
The completion of the Company's financing in April 2000 has given us the
resources to grow at a faster pace than in the prior year. The Company now has
grown to a total of 9 full time employees and utilizes many other programmers on
a contract basis. Our client base for development and hosting has grown from a
single client in 1999 to now over 40 clients with projects completed or under
development. We have also established a two member advisory board to assist in
planning the corporate strategy and managing the direction and future growth of
our Company.
<PAGE>
Future Business
We plan to continue to increase revenues through our marketing efforts and
business development activities such as the enhancement of internal and external
sales teams, participation in trade shows and establishing alliances with firms
that have the potential to strengthen the demand for our products and services.
In October 2000 we were an exhibitor at the E-World Exhibition in Vancouver, BC.
We expect our marketing efforts to pay off more substantially over the upcoming
quarterly periods. As of the December 10, 2000 we have prepared proposals for
design and development work totaling approximately $500,000 and we expect many
these proposals and quotations close in the near future. Our main focus will be
to aggressively market our e-business services, web development and hosting
services business, and to add to our staff through the hiring of additional
marketing and programming personnel.
We plan to expand our Company into the US market, likely through a marketing
office in Seattle, WA. We plan to do most of the development work from our
Vancouver, BC office due the lower overhead costs and favorable exchange rate.
We expect that margins on development work will increase substantially once we
penetrate into the US market.
During the quarter our sponsoring market maker filed a Form 211 application for
quotation and trading of our common shares on the OTC bulletin board. Our
common shares were posted for trading on the OTC-BB as of December 15, 2000
under the symbol ECTC. We plan to seek additional equity financing to
accelerate the growth of the Company internally and we also plan to pursue
merger and acquisition strategies targeting companies which will provide some
synergy with our existing business activities and help to accelerate the growth
of our Company.
Liquidity and Capital Resources
During the 3 quarters ended September 30, 2000 we raised capital in the amount
of approximately $201,391 through the sale of common shares. As at September
30, 2000 we had approximately $40,367 and working capital of $5,065. Although
the Company's revenues have shown a positive trend in recent months, currently
our operating costs exceed our revenues. We plan to raise additional funds
through a private placement or public offering of equity or debentures
convertible into equity to maintain the current level of operations and to
provide for additional staffing in our marketing and programming departments and
to provide funds to seek potential merger and acquisition candidates. The
Company has had discussions with several broker dealers, private investors and
other financing sources and we expect that it will be easier to raise funds now
that there is a trading market for the Company's common stock. If necessary,
the Company may consider loans or debentures from lenders and/or principals of
E-Com. If adequate equity or debt funding cannot be obtained, we will be
required to reduce staff and overhead and grow at a slower pace than originally
planned.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
On September 18, 2000 the Company issued 12,000 shares of restricted common
stock at a deemed value of $0.10 per share to Stock Exposure, Inc. for Investor
Relations Services. The Company relied on Section 4(2) of the Securities Act of
1933 in issuing these securities in an exempt transaction.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
None
Item 6(a). Exhibits
EXHIBIT NAME AND/OR IDENTIFICATION OF EXHIBIT
NUMBER
3 Articles of Incorporation & By-Laws
(a) Articles of Incorporation of the Company filed January 29, 1999.
Incorporated by reference to the exhibits to the Company's General Form For
Registration Of Securities Of Small Business Issuers on Form 10-SB, previously
filed with the Commission.
(b) By-Laws of the Company adopted January 29, 1999. Incorporated by
reference to the exhibits to the Company's General Form For Registration Of
Securities Of Small Business Issuers on Form 10-SB, previously filed with the
Commission.
27 Financial Data Schedule
Financial Data Schedule of E-Com Technologies, Inc. ending September 30,
2000
Item 6(b). Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
E-COM TECHNOLOGIES, INC.
(Registrant)
Date: December 22, 2000
By: /s/ James Malish
James Malish, President and Director
