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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For fiscal year ended December 31, 1999 or
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[_] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from __________ to ____________.
Commission File Number : 000-27139
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e-commerce group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
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Delaware 88-0293704
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(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification No.)
Organization)
3675 Pecos-McLeod, Suite 1400, Las Vegas, NV 89121
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(Address of Principal Executive Offices) (Zip Code)
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(702) 866-2500
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(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
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Title of Each Class Name of Each Exchange on Which Registered
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None None
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Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $.001 par value per share
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [_]
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Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B is not contained herein, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year. $0.00
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The aggregate market value of the registrant's Common Stock, $.001 par value,
held by non-affiliates of the registrant as of March 27, 2000 was $22,500,000
based on the closing price of $3.75 on that date.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes [X] No [_]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 6,000,000
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DOCUMENTS INCORPORATED BY REFERENCE
No annual report to security holders, proxy or information statement or
prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 is
incorporated herein by reference
Transitional Small Business Disclosure Format (check one):
Yes [_] No [X]
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PART I
Item 1: Description of Business.
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Information contained in this Report contains forward-looking statements such as
statements of the Company's plans, objectives, expectations and intentions, that
can often be identified by the use of forward-looking terminology, such as
"may," "will," "expect," "anticipate," "believe," "plan," "intend," "could,"
"estimates," "is being" or "goal" or other variations of these terms or
comparable terminology. All forward-looking statements involve risks and
uncertainties, and actual results could differ materially from those set forth
in the forward-looking statements. The cautionary statements made in this
Report should be read as being applicable to all forward-looking statements
wherever they appear in this Report. The Company's actual results could differ
materially from those discussed herein.
Business Development. e-commerce group Inc. (the "Company") was incorporated in
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Nevada on January 7, 1993. Its principal place of business is located at 3675
Pecos- McLeod, Suite 1400, Las Vegas, NV 89121. The Company was initially
incorporated as "Advanced Suspension Technologies, Inc.", but subsequently
changed its name to "Dalton International Resources, Inc." on December 27, 1996.
On August 23, 1999, the Company changed its name to "e-commerce group Inc." in
order to reflect its current focus on the electronic commerce ("e-commerce")
industry. The Company has been in the developmental stage since inception and
has no operating history other than organisational matters.
Business of Issuer. The Company was organised to engage in any lawful corporate
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business, including, but not limited to, participating in acquisitions of other
companies. The primary business activity of the Company currently involves
seeking a company or companies in any business or industry that it can acquire
or with whom it can merge. As such, the Company can be defined as a "shell"
company, whose sole purpose at this time is to locate and consummate a merger or
acquisition with a private entity. The Company initially intends to limit
potential candidates to those in the e-commerce industry but does retain the
right to investigate and possibly acquire attractive candidates in other
industries.
Although the Board of Directors has elected to begin implementing the Company's
principal business purpose, the Company does not anticipate the need to engage
any full time employees while it is investigating and evaluating business
opportunities. The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of Directors determine
is necessary to carry out the affairs of the Company.
The Company is, and will continue to be, a minor participant in the business of
seeking mergers and joint ventures with, and acquisitions of small private
entities. A large number of established and well-financed entities, including
venture capital firms, are active in mergers and acquisitions of companies which
may also be desirable target
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candidates for the Company. Nearly all such entities have significantly greater
financial resources, technical expertise, and managerial capabilities than the
Company. The Company is, consequently, at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination. Moreover, the Company will also compete with numerous
other small public companies in seeking merger or acquisition candidates.
Because the Company's proposed business plan is to seek, investigate, and
possibly acquire an interest in one or more business opportunities, it can be
classified as a "blank check" company. Many states have enacted special
statutes, rules, and regulations limiting the sale of securities of "blank
check" companies in their respective jurisdictions. As an example, Nevada
requires that a development-stage company discloses, in any offering documents,
specific information regarding the offering and the use of proceeds. Failure to
make such disclosure may result in the offering being treated as a "blank check
blind pool" in which case the effectiveness of any registration statement filed
with the State of Nevada may be denied or suspended.
Item 2: Description of Property.
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The Company neither owns nor leases any real property at this time. The Company
does have the use of a limited amount of office space from its Resident Agent,
Incorp Services, Inc., at no cost to the Company. This is a verbal agreement
between the Resident Agent and the Board of Directors and Management expects
this arrangement to continue. The Company pays its own charges for long distance
telephone calls and other miscellaneous secretarial, photocopying, and similar
expenses. Neither Incorp Services, Inc. nor any of its officers or directors
serve as officers or directors of the Company, or are holders of 5% or more of
the Company's common stock.
Item 3: Legal Proceedings.
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The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.
Item 4: Submission of Matters to a Vote of Security Holders.
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No matter was submitted to a vote of the security holders of the Company,
through the solicitation of proxies or otherwise, during the fourth quarter of
the fiscal year covered by this report.
PART II
Item 5: Market for Common Equity and Related Stockholder Matters.
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Market Information. Until November 3, 1999, the Company's common stock was
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quoted on the Over-the-Counter Bulletin Board (the "OTC-BB") in the United
States under the symbol ECGM. The stock was quoted previously under the symbol
DIRI, and is currently
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quoted on the "Pink Sheets". The Company will seek to be quoted on the OTC-BB
upon completion by the SEC of its review of this registration statement. Only a
small trading volume has existed during the last two years. As of December 31,
1999, the stock had last traded on October 6, 1999 at a price of $3.25 and had a
bid price of $3.00 with an asked price of $4.00. (Source: Yahoo!). These
quotations reflect inter-dealer prices, without retail mark-up, mark-down, or
commission, and may not represent actual transactions. Quarterly high and low
bid prices are as follows (Source: America OnLine):
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<CAPTION>
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Quarter Ended Low Bid High Bid
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June 30, 1998 $0.37 $0.40
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September 30, 1998 $0.37 $0.43
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December 31, 1998 $0.37 $0.43
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March 31, 1999 $0.34 $0.58
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June 30, 1999 $0.31 $0.93
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September 30, 1999 $1.50 $8.00
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December 31, 1999 $1.10 $3.75
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</TABLE>
While management has not undertaken any discussions, preliminary or otherwise,
with any prospective market maker concerning the participation of such market
maker in the after-market for the Company's securities, it does intend to
initiate such discussions during the negotiations concerning a business
combination. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
After a merger or acquisition has been completed, one or both of the Company's
officers and directors will most likely be the persons to contact prospective
market makers. It is also possible that persons associated with the entity that
merges with or is acquired by the Company will contact prospective market
makers. The Company does not intend to use consultants to contact market makers.
Market Price. The most recent price for the Company's common stock is $3.25 on
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October 6, 1999. The stock has been lightly traded, as discussed previously.
Effective August 11, 1993, the Securities and Exchange Commission adopted Rule
15g-9, which established the definition of a "penny stock," for purposes
relevant to the Company, as any equity security that has a market price of less
than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, the rules require: (i) that a broker or dealer approve a person's
account for transactions in penny stocks; and (ii) the broker or dealer receive
from the investor a written agreement to the transaction, setting forth the
identity and quantity of the penny stock to be purchased. In order to approve a
person's account for transactions in penny stocks, the broker or dealer must (i)
obtain financial information and investment experience and objectives of the
person; and (ii) make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks. The broker or dealer must also deliver, prior to
any transaction in a penny stock, a disclosure schedule prepared by
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the Commission relating to the penny stock market, which, in highlight form, (i)
sets forth the basis on which the broker or dealer made the suitability
determination; and (ii) that the broker or dealer received a signed, written
agreement from the investor prior to the transaction. Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and
in secondary trading, and about commissions payable to both the broker-dealer
and the registered representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in penny stock
transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks.
The National Association of Securities Dealers, Inc. (the "NASD"), which
administers NASDAQ, has recently made changes in the criteria for initial
listing on the NASDAQ Small Cap market and for continued listing. For initial
listing, a company must have net tangible assets of $4 million, market
capitalisation of $50 million or net income of $750,000 in the most recently
completed fiscal year or in two of the last three fiscal years. For initial
listing, the common stock must also have a minimum bid price of $4 per share. In
order to continue to be included on NASDAQ, a company must maintain $2,000,000
in net tangible assets and a $1,000,000 market value of its publicly-traded
securities. In addition, continued inclusion requires two market-makers and a
minimum bid price of $1.00 per share.
Management intends to strongly consider undertaking a transaction with any
merger or acquisition candidate which will allow the Company's securities to be
traded without the aforesaid limitations. However, there can be no assurances
that, upon a successful merger or acquisition, the Company will qualify its
securities for listing on NASDAQ or some other national exchange, or be able to
maintain the maintenance criteria necessary to insure continued listing. The
failure of the Company to qualify its securities or to meet the relevant
maintenance criteria after such qualification in the future may result in the
discontinuance of the inclusion of the Company's securities on a national
exchange. In such events, trading, if any, in the Company's securities may then
continue in the non-NASDAQ over-the-counter market. As a result, a shareholder
may find it more difficult to dispose of, or to obtain accurate quotations as to
the market value of, the Company's securities.
Holders. On January 17, 1993, the Company issued 2,000,000 shares of the
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Company's Common Stock to Kenneth Coleman, for services worth $2,500.00. These
shares were subsequently sold or gifted to a total of 19 persons. The stock then
underwent a 3:1 forward split, resulting in 6,000,000 shares issued and
outstanding. All of the issued and outstanding shares of the Company's Common
Stock were issued in accordance with the exemption from registration afforded by
Section 4(2) of the Securities Act of 1933.
Dividends. The Registrant has not paid any dividends to date, and has no plans
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to do so in the immediate future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
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6
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The Company's plan of operation is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more business
opportunities presented to it. Although the Company is not required to restrict
its search to any specific business, industry, or geographical location, it has
recently decided to focus its search on companies engaged in the electronic
commerce ("e-commerce") industry. Management is currently in the process of
identifying suitable candidates for acquisition. However, if management
subsequently decides that these companies are not suitable candidates, or if a
suitable candidate in another industry is located, management reserves the right
to complete transactions with another company or companies including those in
other industries.
Since its inception on January 7, 1993, the Company has engaged in no
significant operations other than undertaking organisational activities, filing
a registration statement for small business issuers on Form 10-SB with the SEC,
complying with periodical SEC reporting requirements and attempting to identify
suitable merger or acquisition candidates. As of December 31, 1999, the Company
had not signed any letters of intent or entered into any agreements with
suitable acquisition candidates. No revenue has been generated by the Company
since its inception.
In the coming fiscal year, the Company intends to continue its efforts to
identify suitable acquisition candidates, and, when a suitable candidate is
found, to complete a business acquisition. The Company anticipates incurring a
loss for the fiscal year as a result of expenses associated with (1) locating
and evaluating acquisition candidates; (2) completing one or more business
acquisitions; (3) complying with the reporting requirements of the Securities
Exchange Act of 1934; and (4) attending to general and administrative matters.
The Company does not expect to generate revenues until a business acquisition
has been completed. Further, the Company may continue to operate at a loss after
completing the acquisition, depending on the performance of the acquired
business.
In order to cover the costs described above, the Company believes that it will
require additional capital in the amount of approximately $3,500,000. This
additional capital will be required whether or not the Company is able to
complete a business acquisition during the current fiscal year. Further, once a
business acquisition is completed, the Company's need for additional financing
is likely to increase substantially. The Company has no current plans, proposals
or understandings to raise additional capital through the sale or issuance of
additional securities. To the extent that additional funds are required to cover
Company expenses, the Company anticipates receiving funds in the form of loans
from financial institutions. However, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses.
Item 7. Financial Statements.
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The response to Item 7 has been submitted as a separate section of this report
beginning on page F-1.
7
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Item 8. Changes In and Disagreements With Accountants on Accounting and
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Financial Disclosure.
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The Company has had no change in, or disagreements with, its principal
independent accountant since its date of inception.
PART III
Item 9: Directors, Executive Officers, Promoters and Control Persons; Compliance
- --------------------------------------------------------------------------------
With Section 16(a) of the Exchange Act.
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The Company's only employees at the present time are its officers and directors.
The directors will serve until the next annual meeting of the stockholders, or
until their successors have been elected. The officers serve at the pleasure of
the Board of Directors. Neither of the current officers and directors have
experience with blank-check companies. There is no family relationship between
any of the officers and directors of the Company. Neither of the officers and
directors have been involved in material legal proceedings.
Information as to the directors and executive officers of the Company is as
follows:
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Name/Address Age Position
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David A. Wood 44 President/Director
1322 Wellington Drive
North Vancouver, B.C. V7K 1L5
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David Wong 44 Secretary/Treasurer/Director
680 East Fifth Avenue #215
Vancouver, B.C. V5T 1J2
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Mr. David Wood; President/Director.
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Mr. Wood has been the President of the Company since February 12, 1999 and his
current term expires at the next annual meeting. Mr. Wood holds a Bachelor of
Commerce Degree from the University of Alberta in which he received in 1982. He
has also received a Diploma in Urban Land Economics from the University of
British Columbia in 1994. He is also a Real Estate Agent.
Mr. Woods was a Board Member of the Canadian Ski Instructors' Alliance
(C.S.I.A.), British Columbia Committee, from 1985 to 1987. In 1987, he became a
Director of C.S.I.A., National Board, and he held this position until 1992. He
then became a Financial Planner for Principal Consultants, Edmonton from 1982 to
1983. There he was promoted from sales to Branch Manager, in which he was
responsible for recruiting, training and management of an investment sales
group. From 1983 to 1984, he was a Managing Partner at Hidden Ridge Recreations,
Ltd. (Downhill and Cross Country Ski Area). Mr. Woods was responsible for pull
program design, implementation and management for the operation of new ski
venture. He was also responsible for recruiting,
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training and staff management, marketing and promotion, and all general area
operations. From 1984 to 1990, Mr. Woods was the Assistant Director of the Ski
School at Grouse Mountain Resorts, Ltd. There he was responsible for
recruitment, staff training and development, staff scheduling, public relations
and general operations, where he also managed 12 supervisors and, in turn,
oversaw 120 instructors and staff. From 1991 to 1996, he was self-employed as a
Real Estate Agent, with direct experience in staff training and development,
real estate sales organisation, recruitment, sales, and business development. In
1996, he was a Mortgage Broker with Bank of Montreal. From 1996 through 1997,
Mr. Woods was employed as a Mortgage Broker with Canada Trust, trust company.
From 1997 to 1998, he was employed at Cypress Bowl Recreations, Ltd. in Off
Mountain Sales and Marketing. Since 1998, he has been the Sales and Leasing
Representative with Don Docksteader, an automobile dealer.
Mr. David Wong, Secretary/Treasurer/Director.
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Mr. Wong has served as the Secretary and Treasurer of the Company since he was
elected to the Company's Board of Directors on February 12, 1999. His current
term expires at the next annual meeting. Mr. Wong received designations as a
Chartered Accountant in 1986 and a Certified Management Accountant in 1985. He
holds a Bachelor of Science degree in Biology from Simon Fraser University which
he received in 1976, and in 1981, he received a Masters of Science in Genetics
and a Masters of Business Administration form the University of British
Columbia. In 1996, he completed the four year program in Urban Land Economics
from the Real Estate Division of the University of British Columbia.
After holding a number of auditing positions, Mr. Wong was appointed as Chief
Financial Officer and Corporate Secretary of Detroit Diesel - Allison British
Columbia, Ltd. in 1987. In 1992, Mr. Wong became a self-employed Financial
Consultant, working with public companies that traded on the Vancouver Stock
Exchange. In 1994, he took a position as Controller, CFO, and Corporate
Secretary with Global Teleworks Corp., a start-up public company in Vancouver.
He left in 1996 to accept a position as Controller with UAP/NAPA Auto Marine
Electric, Ltd., a public auto-parts company with annual sales of approximately
$800,000,000. Since 1998, Mr. Wong has been the Controller of Hollyburn Lumber
Company, a private company that distributes lumber and building supplies.
Item 10: Executive Compensation.
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None of the Company's officers and/or directors receive any compensation for
their respective services rendered to the Company, nor have they received such
compensation in the past. They have agreed to act without compensation until
authorised by the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations after consummation of a merger or
acquisition. As of December 31,1999, the Company has no funds available to pay
directors. Further, none of the directors are accruing any compensation pursuant
to any agreement with the Company. No retirement, pension, profit sharing, stock
option or insurance programs or other similar programs have been adopted by the
Company for the benefit of its employees.
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No member of management of the Company will receive any finders fee, either
directly or indirectly, as a result of their respective efforts to implement the
Company's business plan outlined herein. It is anticipated that management will
be compensated with stock options and/or salary, if a business combination is
completed. The details of the stock options and/or salary have not yet been
completed. It is expected that these details will be one of the items to be
negotiated as part of the combination.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors but will be submitted to a vote of the shareholders as a result of the
inability of the Board to affirmatively approve such a transaction.
Item 11: Security Ownership of Certain Beneficial Owners and Management.
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At the close of the fiscal year ending December 31, 1999, there was no person
known to the Company to be a beneficial owner of five percent (5%) or more of
the Company's common stock, and none of the directors or officers owned any of
the Company's common stock.
Item 12: Certain Relationships and Related Transactions.
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The Board of Directors has passed a resolution which contains a policy that the
Company will not seek an acquisition or merger with any entity in which any of
the Company's officers, directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership interest.
Management is not aware of any circumstances under which this policy may be
changed through their own initiative.
Item 13: Exhibits and Reports on Form 8-K.
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial Statements.
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10
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Page
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Independent Auditors' Report....................................................................... F-1
Assets............................................................................................. F-2
Liabilities and Stockholders' Equity............................................................... F-3
Statement of Operations............................................................................ F-4
Statement of Stockholders' Equity.................................................................. F-5
Statements of Cash Flows........................................................................... F-6
Notes to Financial Statements...................................................................... F-7
</TABLE>
Exhibits.
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(3) Articles of Incorporation and By-Laws.
3.1A Original Articles of Incorporation*
3.1B Amended Articles of Incorporation*
3.1C Amended Articles of Incorporation*
3.2 By-Laws*
(4) Instruments Defining the Rights of Security Holders, Including
Indentures.**
(10) Material Contracts
10.1 Memorandum of Agreement Between e-commerce group, Inc. and
Greenfield Ventures Ltd. for e-commerce group, Inc. Corporate
Introduction Services, dated 25/th/ October 1999.
10.2 Memorandum of Agreement Between e-commerce group, Inc. and
Greenfield Ventures Ltd. for e-commerce group, Inc.
Recruitment Services, dated 25/th/ October 1999.
(23) Consents of Experts and Counsel.
23.1 Consent of Barry L. Friedman, Certified Public Accountant.
(27) Financial Data Schedules.
27.1 Financial Data Schedule as of December 31, 1999 for the fiscal
year ended December 31, 1999.
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Reports on Form 8-K.
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The Company did not file any current reports on Form 8-K during the fiscal year
ending December 31, 1999.
* In accordance with Rule 12b-32 under the Securities Exchange Act of 1934,
as amended, reference is made to the documents previously filed with the
Securities and Exchange Commission, which documents are hereby incorporated by
reference.
** Instruments defining the rights of Security Holders have been included in
3.1A, 3.1B, 3.1C and 3.2 above.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorised.
________________________________________________________________________
(e-commerce group, Inc.)
By /s/ David A. Wood
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(David A. Wood, President)
Date MARCH 28 2000
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In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By /s/ David A. Wood
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(David A. Wood, President and Director)
By /s/ David Wong
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(David Wong, Secretary, Treasurer and Director)
Date MARCH 28 2000
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13
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E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
--------------------
December 31, 1999
December 31, 1998
December 31, 1997
<PAGE>
TABLE OF CONTENTS
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<TABLE>
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PAGE
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INDEPENDENT AUDITORS' REPORT.............................................. 1
ASSETS.................................................................... 2
LIABILITIES AND STOCKHOLDERS' EQUITY...................................... 3
STATEMENT OF OPERATIONS................................................... 4
STATEMENT OF STOCKHOLDERS' EQUITY......................................... 5
STATEMENT OF CASH FLOWS................................................... 6
NOTES TO FINANCIAL STATEMENTS............................................. 7-8
</TABLE>
<PAGE>
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
INDEPENDENT AUDITORS' REPORT
----------------------------
Board Of Directors February 15, 2000
e-commerce group Inc.
Las Vegas, Nevada
I have audited the Balance Sheets of e-commerce group Inc., (Formerly
Dalton International, Resources, Inc.), (A Development Stage Company), as of
December 31, 1999, December 31, 1998, and December 31, 1997, and the related
Statements of Operations, Stockholders' Equity and Cash Flows for the three
years ended December 31, 1999, December 31, 1998, and December 31, 1997. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of e-commerce group Inc.,
(Formerly Dalton International Resources, Inc.), (A Development Stage Company),
at December 31, 1999, December 31, 1998, and December 31, 1997, and the results
of its operations and cash flows for the three years ended December 31, 1999,
December 31, 1998, and December 31, 1997, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #3 to the
financial statements, the Company has no established source of revenue. This
raises substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters are also described in Note #3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Barry L. Friedman
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Barry L. Friedman
Certified Public Accountant
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E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A Development Stage Company)
BALANCE SHEET
-------------
ASSETS
------
December December December
31, 1999 31, 1998 31, 1997
-------- -------- --------
CURRENT ASSETS $ 0 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT ASSETS $ 0 $ 0 $ 0
-------- -------- --------
OTHER ASSETS $ 0 $ 0 $ 0
-------- -------- --------
TOTAL OTHER ASSETS $ 0 $ 0 $ 0
-------- -------- --------
TOTAL ASSETS $ 0 $ 0 $ 0
======== ======== ========
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
E-COMMERCE GROUP INC.,
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.),
(A Development Stage Company)
BALANCE SHEET
-------------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
-------- -------- --------
<S> <C> <C> <C>
CURRENT LIABILITIES
Officers Advances (Note #6) $ 3,755 $ 0 $ 0
-------- -------- --------
TOTAL CURRENT LIABILITIES $ 3,755 $ 0 $ 0
-------- -------- --------
STOCKHOLDERS' EQUITY (Note #1)
Common stock, $.001 par value
authorized 100,000,000 shares
issued and outstanding at
December 31, 1997-6,000,000 shs $ 6,000
December 31, 1998-6,000,000 shs $ 6,000
December 31, 1999-6,000,000 shs $ 6,000
Additional paid in Capital -3,500 -3,500 -3,500
Deficit accumulated during
the development stage -6,255 -2,500 -2,500
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY $ -3,755 $ 0 $ 0
-------- -------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0 $ 0
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements
-3-
<PAGE>
E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A Development Stage Company)
STATEMENT OF OPERATIONS
-----------------------
<TABLE>
<CAPTION>
Year Year Year Jan. 7, 1993
Ended Ended Ended (inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
REVENUE: $ 0 $ 0 $ 0 $ 0
-------- -------- -------- -------------
EXPENSES:
General, Selling
and Administrative $ 3,755 $ 0 $ 0 $ 6,255
-------- -------- -------- -------------
Total Expenses $ 3,755 $ 0 $ 0 $ 6,255
-------- -------- -------- -------------
Net Profit/Loss (-) $ -3,755 $ 0 $ 0 $ -6,255
======== ======== ======== =============
Net Profit/Loss (-)
per weighted
share (Note #1) $ .0006 $ .0000 $ .0000 $ -.0010
======== ======== ======== =============
Weighted average
number of common
shares outstanding 6,000,000 6,000,000 6,000 000 6,000,000
========= ========= ========= =============
</TABLE>
The accompanying notes are an integral part of these financial statements
-4-
<PAGE>
E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
--------------------------------------------
<TABLE>
<CAPTION>
Additional Accumu-
Common Stock paid-in lated
------------
Shares Amount capital Deficit
----------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 6,000,000 $ 6,000 $ -3,500 $ -2,500
Net loss year ended 0
December 31, 1997 --------- -------- --------- --------
Balance,
December 31, 1997 6,000,000 $ 6,000 $ -3,500 $ -2,500
Net loss year ended 0
December 31, 1998 --------- -------- --------- --------
Balance,
December 31, 1998 6,000,000 $ 6,000 $ -3,500 $ -2,500
Net loss year ended -3,755
December 31, 1999 --------- -------- --------- --------
Balance,
December 31, 1999 6,000,000 $ 6,000 $ -3,500 $ -6,255
========= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
-----------------------
<TABLE>
<CAPTION>
Year Year Year Jan. 3, 1993
Ended Ended Ended (inception)
Dec. 31, Dec. 31, Dec. 31, to Dec. 31,
1999 1998 1997 1999
--------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
Net Loss $ -3,755 $ 0 $ 0 $ -6,255
Adjustment to reconcile net loss to net cash
provided by operating activities 0 0 0 0
Changes in assets and liabilities
Officers Advances +3,755 0 0 $ +3,755
--------- ---------- ----------- -----------
Net cash used in operating activities $ 0 $ 0 $ 0 $ -2,500
Cash Flows from investing activities 0 0 0 $ 0
Cash Flows from Financing Activities
Issuance of common stock 0 0 0 +2,500
--------- ---------- ----------- -----------
Net increase (decrease) in cash $ 0 $ 0 $ 0 $ 0
Cash,
beginning of period 0 0 0 0
--------- ---------- ----------- -----------
Cash,
end of period $ 0 $ 0 $ 0 $ 0
========= ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
-6-
<PAGE>
E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
December 31, 1999, December 31, 1998, and December 31, 1997
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 7, 1993, under the laws of the State of
Nevada, as Advanced Suspension Technologies, Inc. The company currently has no
operations and, in accordance with SFAS #7, is considered a development stage
company.
On January 7, 1993, the company issued 2,000,000 shares of its $.001 par
value common stock for services of $2,500.00
On June 21, 1996, the State of Nevada approved the Company's restated
Articles of Incorporation, which increased it's capitalization from 50,000,000
common shares to 100,000,000 common shares, the par value remained unchanged at
$.001.
On December 27, 1996, the State of Nevada approved the Company's restated
Articles of Incorporation, which increased it's capitalization from 3,000,000
common shares to 50,000,000 common shares, the par value remained unchanged at
$.001.
On December 27, 1996, the company forward split it's common stock 3:1, thus
increasing the number of outstanding common stock shares from 2,000,000 shares
to 6,000,000 shares.
On December 27, 1996, the Company changed it's name to Dalton International
Resources, Inc.
On August 12, 1999, the Company changed it's name to e-commerce group Inc.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average number of
shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
-7-
<PAGE>
E-COMMERCE GROUP INC.
(FORMERLY DALTON INTERNATIONAL RESOURCES, INC.)
(FORMERLY ADVANCED SUSPENSION TECHNOLOGIES, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS CONTINUED
---------------------------------------
December 31, 1999, December 31, 1998, and December 31, 1997
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source or revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek additional capital
through a merger with an existing operating company.
NOTE 4 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real or personal property. Office
services are provided without charge by a director. Such costs are immaterial to
the financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 6 - OFFICERS ADVANCES
While the Company is seeking additional capital through a merger with an
existing operating company, an officer of the Company has advanced funds to the
Company to pay for any costs incurred by it. These funds are interest free.
-8-
<PAGE>
[LOGO]
Memorandum of Agreement
between
e-commerce group Inc.
and
Greenfield Ventures Ltd.,
for
e-commerce group Inc.
Corporate Introduction Services
Dated: 25/th/ October 1999
_______________________________________________________________________
Page 1 of 4
<PAGE>
Memorandum of Agreement
Participants
The participants of this memorandum are as follows:
1. E-commerce group Inc, formerly Dalton International Resources Inc. a NASDAQ
Bulletin Board quoted company (ECGM(E) - formerly DIRI
2. Greenfield Ventures Ltd (GVL)
In each case their duly authorized officers represent the companies. The
confidentiality expressed throughout extends to all other officers and or
associates of the participating companies and further assumes that there are
already NDA's covering the confidentiality.
Objective
Once signed, this document will set out the detailed the terms of a contract
where Greenfield Ventures Ltd. will provide introduction to business acquisition
targets to e-commerce group Inc. on terms as specified within this contract. In
essence the introduction of symbiotic companies with e-commerce group Inc. where
significant mutual benefit could be achieved.
The terms set out in the enclosed are binding and form the basis of a legal
commitment by all the parties.
Greenfield Ventures (GVL)
. GVL is retained by the group for a period of three years
. The commencement date of the contract will be the date
of completion of the Private Placement of funds to ECGM
under the Offering Memorandum dated November 15/th/ 1999
issued by ECGM.
. This contract shall remain in force for the duration of
this contract unless one of the following situations
transpires:
. ECGM is acquired or merged with another group.
. ECGM goes into receivership, Chapter 11 or
liquidation or any other form of administration
within/by any of its operating groups or
subsidiaries
. GVL is acquired or merged with another group.
__________________________________________________________________________
Page 2 of 4
<PAGE>
[_] GVL goes into receivership, Chapter 11 or liquidation or any
other form of administration within/by any of its operating
groups or subsidiaries
[_] If by mutual agreement GVL has been unable to perform its duties
in accordance with the requirements of ECGM. In this case ECGM
reserves the right to appoint another agency to complete the
outstanding appointments without course to honor the balance of
the contract.
[_] GVL agrees to work diligently to always seek the very best calibre
partners and acquisition targets.
[_] It is clearly understood that the executive Management team has the
exclusive right of refusal to any target candidate offered by GVL for
any reason, or for no reason.
[_] It is further understood that the GVL will use its very best endeavors
to minimize the utilization of e-commerce group Inc.'s executive
management time without sound business reason and in line with the
companies specific brief on the types of acquisition targets.
[_] The commensurate fees and terms are as follows:-
[_] This contract is on a no expenses, no retainer basis.
[_] It is based on a completion fees only.
[_] Payments and or Share issuance will be effected within 60 days of the
signing of the completion documents and subsequent SEC or other
regulatory approval that may be required.
[_] Payment schedule for the successful completion of an acquisition by
e-commerce group Inc. being introduced to them by GVL is based on a
reverse Leaman Scale as follows:-
[_] Net acquisition purchase price to $1M = 5%
[_] Net acquisition purchase price $1M - $3M = 3%
[_] Net acquisition purchase price $3M - $5M = 2%
[_] Net acquisition purchase price $5M+ = 1%
[_] All fees are in United States Dollars (US $'s)
[_] Minimum Fee = $25,000
[_] Fees can be paid in a mix of cash and company stock on the cash
equivalent basis of 50% cash and 50% stock. The issuing price of the
stock in this case will be based on the trading average of the stock on
the previous 90 days public trade. Any stock issued will be Preference
A stock and will be subject to the SEC regulations pertaining to this
type of stock issuance.
Exit Terms
The spirit of this agreement, as previously stated, is to move quickly to
the completion of the raising of finance under the Offering Memorandum,
__________________________________________________________________________
Page 3 of 4
<PAGE>
dated 1/st/ November 1999. Because of the level of expense incurred on the
promoting parties this agreement is binding save for the acceptable `Exit
Terms' listed below;
[_] The required funding is not made available within the timeframe
detailed in the Offering Memorandum, dated 8/th/ November 1999
[_] A period of 120 days has lapsed (from the date of signing this
agreement) prior to completion of the Offering Memorandum
In the case of failure to raise financing through the Offering Memorandum
this contract ceases to have any value and no compensation is due to any
party by the other.
The signatories of this Memorandum of Agreement, (e-com Corp Intro MOA)
hereby agree to voluntarily cooperate, according to their respective roles
and competencies and to conclude the project described above in a positive
and constructive manner for the benefit of all parties present and future.
Further they agree to conduct themselves within the framework of the
regulatory bodies where required.
Each party agrees that this forms a binding contract on the terms set out
herein agrees it.
Signed Signed Signed
/s/ T Taylor /s/ Tony Arnold
-------------------- ---------------------- --------------------
Print Name Print Name Print Name
David Wong T E TAYLOR TONY ARNOLD
Company Secretary
____________________ _______________________ ____________________
On behalf of: On behalf of: Witness thereof:
e-commerce group Inc. Greenfield Ventures Ltd. 134 Hilmarton
Reading
Buckinghamshire
UK
RG64HJ
_______________________________________________________________________
Page 4 of 4
<PAGE>
[LOGO]
Memorandum of Agreement
between
e-commerce group Inc.
and
Greenfield Ventures Ltd.,
for
e-commerce group Inc. Recruitment Services
Dated: 25/th/
October 1999
__________________________________________________________________
Page 1 of 7
<PAGE>
Memorandum of Agreement
Participants
The participants of this memorandum are as follows:
1. E-commerce group Inc, formerly Dalton International Resources Inc. a NASDAQ
Bulletin Board quoted company (ECGM(E)- formerly DIRI
2. Greenfield Ventures Ltd (GVL)
In each case their duly authorized officers represent the companies. The
confidentiality expressed throughout extends to all other officers and or
associates of the participating companies and further assumes that there are
already NDA's covering the confidentiality.
Objective
Once signed, this document will set out the detailed the terms of a contract
where Greenfield Ventures Ltd. Will provide Recruitment Services to e-commerce
group Inc. on terms as specified within this contract. In essence the
recruitment of world class/industry leading individuals to join the e-commerce
Inc. team.
The terms set out in the enclosed are binding and form the basis of a legal
commitment by all the parties.
Greenfield Ventures (GVL)
. GVL is retained as the exclusive recruitment consultants to the group
for a period of three years
. The commencement date of the contract will be the date of completion of
the Private Placement of funds to ECGM under the Offering Memorandum
dated November 15/th/ 1999 issued by ECGM.
. This contract shall remain in force for the duration of this contract
unless one of the following situations transpires:
. ECGM is acquired or merged with another group.
. ECGM goes into receivership, Chapter 11 or liquidation or any other
form of administration within/by any of its operating groups or
subsidiaries
- --------------------------------------------------------------------------------
Page 2 of 7
<PAGE>
. GVL is acquired or merged with another group deemed to be of a
competitive or negative influence/nature.
. GVL goes into receivership, Chapter 11 or liquidation or any other
form of administration within/by any of its operating groups or
subsidiaries
. If by mutual agreement GVL has been unable to perform its duties in
accordance with the requirements of ECGM. In this case ECGM reserves
the right to appoint another agency to complete the outstanding
appointments without course to honor the balance of the contract.
. The scope of the recruitment requirements is outlined in Appendix 1--
Headcount Plan & Recruitment schedule
. GVL agrees to work diligently to always seek the very best calibre of
staff each of the positions outlined in the attached Appendix-- R1--
Recruitment Contract Schedule
. It is clearly understood that the executive Management team has the
exclusive right of refusal to any candidate offered by GVL for any
reason, or for no reason.
. It is further understood that the Headcount Plan & Recruitment schedule
outlined in Appendix 1 only provides a guideline and may due to business
or economic reasons change both in time and numbers.
. ECGM however, commit to the recruitment of the following key positions
as identified in the schedule.
1. Chief Finance Officer
2. Development Director
3. USA Regional Director
4. Asia Regional Director
. This is on the clear understanding that suitable candidates are
offered within the required timescale.
. Failure on the part of ECGM to accept these individuals will result
in their honoring the recruitment fee, regardless of whether the
individual/s joined or not. Notwithstanding this, in the event the
commensurate fee has been paid where no individual has been recruited
the company can at a later date request recruitment against the/those
positions without further fees being due.
. The commensurate fees and Options structure is outlined in the attached
Appendix R2-- Compensation Schedule.
. Payments, and where contracted, the issuance of Options, in respect of
each new recruit will be made within 30 days of the commencement of the
employee
________________________________________________________________________________
Page 3 of 7
<PAGE>
. Should an employee leave the company within 180 days from their
start date, any Options issued will be suspended pending a
replacement candidate joining the company. Only 50% of the cash
compensation due on the original replacement will be due on the
replacement. Options issued on the original placement will become
'released' once the new recruit has started work. Such Options
will have a restricted period of not less than 180 days from the
date of the new employees commencement date but on no account
will the Options be restricted for less than twelve months in
total.
. Any Options issued in respect of this Memorandum of Agreement
will have a minimum restriction period of one year (twelve
months). All Options in respect of this agreement must be
redeemed (paid up) within two years from date of issue. Failure
to pay for Options within two years will result in their being
cancelled. Under no condition will the term be extended and
failure on either party to remind the other of their term or
maturing date will not provide grounds for any extention or
review of the terms.
. The compensation of monies and Options disclosed in Appendix R2-
Compensation Schedule, represent the total amounts due to GVL in
respect of this recruitment Contract.
. GVL may appoint agents or work with other organizations to
fulfill it's obligation under this contract however, no other
fees, other than those expressly declared in the schedule
Appendix R2- Compensation Schedule, are offered or implied.
. The executive management of e-commerce group Inc. agree to
forward all direct approaches for employment at e-commerce group
Inc. to GVL for follow up and processing.
Exit Terms
The spirit of this agreement, as previously stated, is to move quickly to
the completion of the raising of finance under the Offering Memorandum,
dated 1/st/ November 1999. Because of the level of expense incurred on the
promoting parties this agreement is binding save for the acceptable 'Exit
Terms' listed below;
. The required funding is not made available within the timeframe
detailed in the Offering Memorandum, dated 8/th/ November 1999
. A period of 120 days has lapsed (from the date of signing this
agreement) prior to completion of the Offering Memorandum.
___________________________________________________________________________
Page 4 of 7
<PAGE>
In the case the of failure to raise financing through the Offering
Memorandum this contract ceases to have any value and no compensation is
due to any party by the other.
Appendix
Appendix R1 - Recruitment Contract Schedule
Appendix R2 - Compensation Schedule
The signatories of this Memorandum of Understanding, (e-com Recruitment
MOA) hereby agree to voluntarily cooperate, according to their respective
roles and competencies and to conclude the project described above in a
positive and constructive manner for the benefit of all parties present and
future.
Further they agree to conduct themselves within the framework of the
regulatory bodies where required.
Each party agrees that this forms a binding contract on the terms set out
herein agrees it.
Signed Signed Signed
/s/ T. Taylor /s/ Tony Arnold
___________________ ----------------- -------------------
Print Name Print Name Print Name
DAVID WONG
Company Secretary
T E TAYLOR TONY ARNOLD
___________________ ----------------- -------------------
On behalf of: On behalf of: Witness thereof:
e-commerce group Inc. Greenfield Ventures Ltd. 134 Hilmarton
Reading
Buckinghamshire
UK
RG64HJ
___________________________________________________________________________
Page 5 of 5
<PAGE>
Appendix R1 - Recruitment Contract Schedule
<TABLE>
<CAPTION>
Start time frame
--------------------------------------
FY 2000 FY2001
Position Salary (Pounds) pa. Comm Total Location QI Q2 Q3 Q4 Q1 Q2 Q3 Q4
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFO 75000 25000 100000 UK 1 __________________________________
Group Sales & Marketing Director 75000 25000 100000 UK 1 ______________________________
USA Regional Director 75000 25000 100000 USA 1 ______________________________
Asia Regional Director 75000 25000 100000 HK/Sing 1 ______________________________
Network ISP Sales Exec 40000 25000 65000 UK 1 ______________________________
Kiosk Systems Sales Manager 40000 25000 65000 UK 1 ___________________________________
Kiosk Pre-Sales Engineer 30000 3000 33000 UK 1 _____________________
Senior Network Engineer 20000 2000 22000 UK 1 _____________________
Senior Network Engineer 20000 2000 22000 UK 1 ________________
Customer Services Engineer 15000 1500 16500 UK 1 __________________________
Customer Services Engineer 15000 1500 16500 UK 1 __________________________
Development Director 60000 6000 66000 UK 1 ___________________________________
Senior Hardware Dev. Engineer 30000 3000 33000 UK 1 ___________________________________
Senior S/W Dev. Engineer 40000 4000 44000 UK 1 ___________________________________
Software Dev. Engineer 25000 2500 27500 UK 1 ______________________________
Software Dev. Engineer 25000 2500 27500 UK 1 ______________________________
Production Engineering/Quality Mgr 35000 3500 38500 UK 1 _____________________
Group Marketing Manager 35000 3500 38500 UK 1 ___________________________________
Group Marcoms Exec. 30000 2500 32500 UK 1 ________________
- --------------------------------------------------------------------------------------------------------------------------------
Totals (# of heads by month/Fee Warrants) 6 6 2 3 2 0 0 0
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Board of e-commerce group Inc. may at its discretion bring forward or delay
any or all of the placements listed above
In the case of a delay the only commitment is to honor the payment for the
placements as agreed to in the initial contract and highlighted above.
- -------------------------------------------------------------------------------
Page 6 of 7
<PAGE>
Appendix R2 - Compensation Schedule
<TABLE>
<CAPTION>
Salary Fee Rate Total
Position (Pounds)'s pa. Comm Total Location % of S$'s $1,00 $3.50 $5.00 Warrants
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CFO 75000 25000 100000 UK 0% $ 25,000 25000 25000
Group Sales & Marketing Director 75000 25000 100000 UK 0% $ 25,000 25000 25000
USA Regional Director 75000 25000 100000 USA 0% $ 40,000 0 400000 40000
Asia Regional Director 75000 25000 100000 HK/Sing 0% $ 40,000 0 400000 40000
Network ISP Sales Exec 40000 25000 65000 UK 15% $ 9,750 0 6500 6500
Kiosk Systems Sales Manager 40000 25000 65000 UK 15% $ 9,750 0 6500 6500
Kiosk Pre-Sales Engineer 30000 3000 33000 UK 15% $ 4,950 0 3300 3300
Senior Network Engineer 20000 2000 22000 UK 15% $ 3,300 0 2200 2200
Senior Network Engineer 20000 2000 22000 UK 15% $ 3,300 0 0 2200 2200
Customer Services Engineer 15000 1500 16500 UK 15% $ 2,475 0 1650 1650
Customer Services Engineer 15000 1500 16500 UK 15% $ 2,475 0 1650 1650
Development Director 60000 6000 66000 UK 0% $ 25,000 25000 0 25000
Senior Hardware Dev. Engineer 30000 3000 33000 UK 15% $ 4,950 0 3300 3300
Senior S/W Dev. Engineer 40000 4000 44000 UK 15% $ 6,600 0 4400 4400
Software Dev. Engineer 25000 2500 27500 UK 15% $ 4,125 0 2750 2750
Software Dev. Engineer 25000 2500 27500 UK 15% $ 4,125 0 2750 2750
Production Engineering/Quality Mgr. 35000 3500 38500 UK 15% $ 5,775 0 3850 3850
Group Marketing Manager 35000 3500 38500 UK 15% $ 5,775 0 3850 3850
Group Marcoms Exec. 30000 2500 32500 UK 15% $ 4,875 0 0 3250 3250
- ------------------------------------------------------------------------------------------------------------------------------------
Totals (# of heads by month/Fee Warrants $ 227,225 75,000 122,700 5,450 203,150
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Board of e-commerce group Inc. may at its discression bring forward or delay
any or all of The placements listed above
In the case of a delay the only commitment is to honor the payment for the
placements as agreed to in the initial contract and highlighted above.
Each time a warrant is issued it remains restricted for one year from the date a
person joins.
Should someone leave the company within the first 180 days the Warrants will be
suspended until a replacement joins the company. In this case only 50% of the
fee is due on the replacement head
- --------------------------------------------------------------------------------
Page 7 of 7
<PAGE>
BARRY L. FRIEDMAN, P.C.
Certified Public Accountant
1582 TULITA DRIVE OFFICE (702) 361-8414
LAS VEGAS, NEVADA 89123 FAX NO. (702) 896-0278
To Whom It May Concern: February 15, 2000
The firm of Barry L. Friedman, P.C., Certified Public Accountant consents
to the inclusion of their report of February 15, 2000, on the Financial
Statements of e-commerce group Inc., as of December 31, 1999, in any filing that
are necessary now or in the near future with the U.S. Securities and Exchange
Commission.
Very truly yours,
/s/ Barry L. Friedman
- -------------------------
Barry L. Friedman
Certified Public Accountant
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMBINED
BALANCE SHEETS, STATEMENT OF OPERATIONS AND STATEMENT OF CASH FLOWS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 3,755
<BONDS> 0
0
0
<COMMON> 6,000
<OTHER-SE> (9,755)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (3,755)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,755)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,755)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,755)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
