<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB12G/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
ECOM Digital Properties, Inc
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(Name of Small Business Issuer in its Charter)
Nevada 35-1991305
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
334 Main Street Port Washington, New York 11050
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (516) 767-8400
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Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
--- ---
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.001 per share
--------------------------------------------------
(Title of Class)
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
FORM 10-SB12G/A
TABLE OF CONTENTS
<TABLE>
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PART I
Page
<S> <C> <C>
Item 1. Description of Business.................................................... 1
Item 2. Management's Discussion and Analysis or Plan of Operation.................. 4
Item 3. Description of Property.................................................... 6
Item 4. Security Ownership of Certain Beneficial Owners
And Management......................................................... 6
Item 5. Directors, Executive Officers, Promoters
And Control Persons.................................................... 7
Item 6. Executive Compensation..................................................... 8
Item 7. Certain Relationships and Related Transactions............................. 9
Item 8. Description of Securities.................................................. 10
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters............................ 10
Item 2. Legal Proceedings.......................................................... 12
Item 3. Changes in and Disagreements with Accountants.............................. 12
Item 4. Recent Sales of Unregistered Securities.................................... 12
Item 5. Indemnification of Directors and Officers.................................. 12
PART F/S
Financial Statements........................................................... 14
...............A1 thru A10
Interim Unaudited Financial Statements......................................... 15
..............B1 thru B12
PART III
Item 1. Index to Exhibits.......................................................... 16
Signatures................................................................. 17
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<PAGE>
To simplify the language in this Registration Statement ECOM Digital Properties,
Inc. is referred to herein as "the Company" or "We".
PART I
Item 1. Description of Business.
Business Development.
ECOM Digital Properties, Inc. a Nevada corporation (the "Company") formerly D.W.
Group Technologies, Inc. was formed in May 1996 but did not have any operations
until it acquired Shopmama.com, Inc. a Nevada corporation ("Shopmama.com") in
March 2000. Upon the acquisition of Shopmama.com, the Company changed its name
from D.W. Group Technologies, Inc. to "ECOM Digital Properties, Inc." The
Company acquired all of Shopmama.com's issued and outstanding shares of common
stock making Shopmama.com a wholly owned subsidiary of the Company. The business
of Shopmama.com has become the only operating business of the Company and the
officers and directors of Shopmama.com have assumed the officers and director
positions of the Company. When used herein the term "Company" refers to the
combined entity unless the context otherwise indicate.
The Company is in the developmental stage, and its operations to date have been
limited. Until the acquisition of Shopmama.com, Inc. by the Company on March 28,
2000 its operations had been dormant.
We have not been involved in any bankruptcy, receivership or similar proceeding.
We have not been involved in any material reclassification, or purchase or sale
of a significant amount of assets not in the ordinary course of business.
On March 28, 2000 the Company entered into an agreement with the shareholders of
Shopmama.com, Inc., a Nevada corporation, ("Shopmama.com") to acquire a 100%
interest in said corporation through an exchange of shares in which the Company
issued 3,000,000 shares of its Common Stock solely in exchange for all of the
outstanding Common Stock of Shopmama.com. As a result of this agreement, Michael
Burns and William Utley, the only shareholders of Shopmama.com were each issued
1,500,000 shares of the Company's Common Stock and became principal shareholders
of the Company. The Company then proceeded to operate the business of
Shopmama.com and became an operating entity to the extent of Shopmama.com's
business, which is presently limited.
In August, 2000 the Company issued a cumulative of 3,500,000 shares of the
Company's authorized and unissued treasury stock for services provided.
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Business of Shopmama.com, Inc.
Having completed the acquisition of Shopmama.com, the Company is no longer
inactive and has succeeded to the business of Shopmama.com as presently
existing.
Shopmama.com is an interactive shopping mall that is designed to make shopping
on the Internet easy and seamless. The main goal of Shopmama.com is to provide
the Internet user with a single place to find any product needed.
Since inception, Shopmama.com has made a constant effort to acquire the best
possible affiliations on many of the Internets leading web sites. There are
close to 400 affiliations made to date. All of our affiliates offer different
payment programs or cash bonuses from 5% to 20% of the total sale.
Shopmama.com is in the process of becoming one of the Internet's largest
comparative shopping resources and interactive malls; Shopmama.com has 60
departments that represent name brand merchants and emerging retailers as well.
The products on Shopmama.com are listed in a simple fashion broken down by
categories and subcategories. For example, clothing would be a main category;
once clicked, the subcategories "children's", "women's", "men's", "shoes", etc.
would appear. Utilizing this system of categories and subcategories maintains
the site's simplicity.
Unlike other online shopping resources, Shopmama.com also has interactive games,
monthly prizes and giveaways, as well as a section in which "mama" calculates
gift ideas that a person might enjoy based on their personal information. By
entering in the demographic information of the person you are shopping for such
as age, sex, interests and hobbies, Shopmama.com will automatically calculate
gift ideas that the person might enjoy.
The search engine portion of the site is a simple way for guests to find any
product. By inserting an item description "mama" will find all available
products and locations.
Shopmama.com contains more than 1000 pages of merchandise representing
established name brand merchants as well as smaller start-ups. The merchants
view it as a way to drive traffic to their brand and increase sales.
The eventual goal for Shopmama.com is to eliminate the affiliation programs on
the banner and badge portions of the site and charge advertisers on a per
impression basis.
The Shopmama.com e-commerce site is built on a three-tier structure. Driven by
SQL servers and an IIS web server backed with bandwidth. The site is coded
mostly in ColdFusion and ASP. The information architecture of the site is based
on five fundamental arenas, the free valuable information arena, the product
detail arena, the final purchasing arena, and the purchase administration arena.
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Marketing Strategy.
The Company's marketing strategy is to aggressively promote the Shopmama.com
website via a national advertising campaign geared towards Broadcast TV, Radio
and Cable TV audiences. Additional website promotion plans include the use of
industry and consumer magazine advertising, co-operative advertising campaigns
with the retailers and distributors, as well as aggressive billboard display and
national trade show schedule.
Competition.
The Company faces many challenges and competitors in its business. In addition
to competing with individuals in the Companies field, that have a high level of
expertise greatly exceeding current management's abilities, the Company will be
competing with numerous entities, most of which are large, well established
companies with greater assets and financial reserves than the Company possesses.
The Company holds no advantage over its competition.
Our website's first class design and top affiliates offer superior products
which is critical to the companies positioning as a "dot com" company. The
company's website design and marketing is an equal match to our competition in
this class. However the core experience for the family has always been better,
and with our current core philosophy, the Company is ready to grow with the
market. Shopmama.com will distinguish itself from its competitors as a full
comparative shopping site that "lets mama do the shopping for you."
Research and Development.
The Company's programming and website development has been performed by two of
the Company's officers in the past. The Company intends to hire three or four
new programmers to assist in development and improvements on current products.
If the Company's current website proves successful, the Company will accelerate
the addition of new programmers to reduce the time required to further develop
the website.
We have no patents, trademarks, licenses, concessions, franchises, royalty
agreements, or labor contracts.
Government Regulation.
The Company is not subject to any government regulations other than those that
normally apply to companies in this industry. Although we will be subject to
regulation under the Exchange Act, we believe that we will not be subject to
regulation under the Investment Company Act of 1940, insofar as we will not be
engaged in the business of investing or trading in securities.
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<PAGE>
We are registering a class of its securities on this Form 10-SB registration
statement on a voluntary basis. We have no obligation to file a Form 10-SB
registration statement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). We believe that by filing this Form 10-SB and
being obligated to file reports subject to Section 13 of the Exchange Act, we
can attract valuable opportunities in the Internet / e-commerce industry.
We have conducted, and others have made available to us, results of market
research indicating that strong demand exists for the business of comparative
shopping websites.
Employees.
The Company has two employees. (See "Directors and Executive Officers.")
Offices.
The Company's principal executive offices are located at 334 Main Street Port
Washington, NY 11050. The Company believes that the above facilities are
adequate for the foreseeable needs of the Company; however, eventually as the
Company expands its employee base, it anticipates adding additional office
space.
Reports to Security Holders.
The Company has elected December 31, as its year-end. Thereafter, the Company
will furnish its shareholders with annual reports containing audited financial
statements within 90 days after the Company's year-end.
From time to time, the Company may also furnish its shareholders with such other
information, as it may deem appropriate, relative to the business operations of
the Company. Such information may include news of a change in the management,
purpose and control of the Company, or any material condition affecting the
Company.
In addition to receipt and examination of annual reports and other information,
shareholders of record shall as required, be allowed to examine the books and
records of the company at a reasonable time upon written demand.
The public may read and copy any materials filed with the SEC at the SEC's
Public Reference Room located at 450 Fifth Street, N.W., Washington, D.C. 20549.
Information on the operations of the Public Reference Room can be obtained by
calling 1-800-SEC-0330. The SEC also maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers @ http://www.sec.gov.
Item 2. Plan of Operation.
The Company has developed and is constantly updating and programming its
website. The Company has only just begun limited marketing of its website.
Previous efforts have been focused on the development of the website and
obtaining funds necessary to continue development.
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<PAGE>
We have never had revenues from operations. We believe that our plan of
operations can be executed through the efforts of current management and will
require additional funds. We anticipate that additional business opportunities
will be available to us through the contacts of our Officers and Directors. The
final evaluation of additional business opportunities and the negotiation,
drafting and execution of relevant agreements, and other instruments will be
done at Michael Burns' direction. We plan to investigate, to the extent believed
reasonable by us, all additional potential business opportunities.
The Company does not have any other products or services, at this time, and
likely will not have the capital to develop and market other potential products
or services. Even if the Company is successful in generating a market for its
website it is likely that the Company will need additional capital to
aggressively market its website and to work on the development of additional
websites/products and services. Management anticipates any future capital will
be raised through the sale of its securities, which may dilute current
shareholders.
We will seek to expand through acquisitions which are not currently identified
and which entail risks, which you will not have a basis to evaluate. We may seek
to expand our operations by acquiring companies in businesses that we believe
will complement or enhance our business. We cannot assure you that we will be
able to ultimately effect any acquisition, successfully integrate any acquired
business in our operations or otherwise successfully develop our operations. We
have not established any minimum criteria for any acquisition and our management
may have complete discretion in determining the terms of any acquisition.
Consequently, there is no basis for you to evaluate the specific merits or risks
of any potential acquisition that we may undertake.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which make the task of
comparative investigation and analysis of such business opportunities extremely
difficult and complex. We do not and will not have capital to provide the owners
of business opportunities with any significant cash or other assets. However, we
believe we can offer owners of acquisition candidates the opportunity to acquire
ownership interest in a publicly registered company without incurring the cost
and time required to become a fully reporting company or to conduct an initial
public offering. The Exchange Act specifically requires that any merger or
acquisition candidate, comply with all applicable reporting requirements, which
include providing audited financial statements to be included within the
numerous filings relevant to complying with the Exchange Act. Nevertheless, we
have not conducted market research and are not aware of statistical data, which
would support the perceived benefits for the owners of a business opportunity.
We anticipate that any securities issued as a result of a business opportunity
will be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of our transaction, we may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. Until such time as this occurs, we will not attempt to
register any additional securities. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
our securities may have a depressive effect on the value of our securities in
the future, if such a market develops, of which there is no assurance. The
completion of any business opportunity may result in a significant issuance of
shares and substantial dilution to our present stockholders.
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Item 3. Description of Property.
We currently have no material assets and we do not own any real or personal
property. We currently operate in leased office space at 334 Main Street Port
Washington, NY; we believe that this space is sufficient for us at this time.
We have no policy with respect to investments in real estate interests or
mortgages. Further, we have no policy with respect to investments in securities
of or interests in persons primarily engaged in real estate activities.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
As of August 18, 2000 there were 63,028,900 Shares of our common stock, $0.001
par value outstanding. The following tabulates holdings of our shares of common
stock by each person who, as of August 18, 2000, holds of record or is known by
management to own beneficially more than 5.0 % of the Common Shares and, in
addition, by all Directors and officers of the Company individually and as a
group. Each named beneficial owner has sole voting and investment power with
respect to the shares set forth opposite his name.
Security Ownership of Beneficial Owners (1):
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Title of Name & Address Amount Percent
Class
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Common Stock Anthony Cairo 5,000,000 7.9%
145-72 6th Ave
Whitestone, NY 11357
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Common Stock Hendriks Inc. 4,700,000 7.45%
PO Box 1141
Syosset, NY 11791
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Common Stock Vasilios Neofytides 4,000,000 6.3%
22 Basket Lane
Hicksville, NY 11801
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Security Ownership of Management (2):
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Title of Name & Address Amount Percent
Class
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Common Stock Michael Burns 1,500,000 2.37%
3 Arbor Field Way
Lake Grove, NY 11755
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Common Stock William J. Utley 1,500,000 2.37%
300 Jackson Ave.
Syosset, NY 11791
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(1) Pursuant to Rule 13-d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared voting
power (including the power to vote or direct the voting) and/or sole or shared
investment power (including the power to dispose or direct the disposition) with
respect to a security whether through a contract, arrangement, understanding,
relationship or otherwise. Unless otherwise indicated, each person indicated
above has sole power to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.
(2) This table is based upon information obtained from our stock records. Unless
otherwise indicated in the footnotes to the above table and subject to community
property laws where applicable, we believe that each shareholder named in the
above table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned.
Change of Control.
There are currently no arrangements, which would result in a change of control
of the Company. A business opportunity involving the issuance of our common
shares will, in all likelihood, result in shareholders of a private company
obtaining a controlling interest in our Company. Any such business opportunity
may require our management to sell or transfer all or portions of our common
shares held by him, or resign as a member of our Board of Directors. The
resulting change in control of the Company could result in the removal of the
present management of the Company and a corresponding reduction or elimination
of their participation in the future affairs of the Company.
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The names of the Company's executive officers and directors and the positions
held by them are set forth below:
Name Age Position Director Since
---- --- -------- --------------
Michael Burns 34 President, Secretary 2000
& Sole Director
William J. Utley 52 Vice President of
Corporate Communications N/A
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The term of office of each director is one year and until his successor is
elected at the Company's annual shareholders' meeting and is qualified, subject
to removal by the shareholders. The term of office for each officer is for one
year and until a successor is elected at the annual meeting of the board of
directors and is qualified, subject to removal by the board of directors.
Biographical Information.
Set forth below is certain biographical information with respect to each of the
Company's officers and directors.
Michael Burns, 34 years of age, is the President, Secretary and sole Director of
the Company. Mr. Burns has served as President and Director of the Company since
March 2000 and his terms expire on December 1, 2000.
Mr. Burns is a former senior management professional from Barnes & Noble Inc. He
brings more than 10 years of information systems and business management
experience in the financial and retail industries. Prior to Barnes & Noble,
Inc., Mr. Burns held executive level positions at Prudential Securities,
Citibank and Ernst & Young. Mr. Burns played a key role in the implementation
and analysis of new technologies that led these companies to increased
productivity and efficient project management.
William J. Utley, 52 Years of age, is the Vice President of Corporate
Communications. Mr. Utley has served as Vice President of Corporate
Communications for the Company since March 2000 and his term expires on December
1, 2000.
Mr. Utley is a former sales and marketing executive from Inside Wall Street,
Inc. He brings more than 25 years experience in all phases of the Public and
Investor Relations arena.
We currently have no significant employees other than the two officers and
anticipate hiring additional support staff in the near future. There are no
family relationships among directors, executive officers, or nominees for such
positions. In the last five years, no director, executive officer, promoter or
control person of the Company has been involved in any legal proceedings
material to the evaluation of the ability or integrity of any of the
aforementioned persons.
Item 6. Executive Compensation.
<TABLE>
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--------------------------- --------------------- ---------- ----------- ---------- ------------------ --------------- -------------
Name Position Year Salary Bonus Other Other Stock All Other
Compensation Options
--------------------------- --------------------- ---------- ----------- ---------- ------------------ --------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
President &
Michael Burns (1) Secretary 2000 104,000 0 0 0 0
--------------------------- --------------------- ---------- ----------- ---------- ------------------ --------------- -------------
V.P. of Corp.
William Utley Communications 2000 52,000 0 0 0 0
--------------------------- --------------------- ---------- ----------- ---------- ------------------ --------------- -------------
</TABLE>
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(1) Kevin Turney was the president of the Company prior to its merger with
Shopmama.com and subsequent name change. Mr. Turney did not receive a salary.
Mr. Burns was the President of Shopmama.com Inc. prior to its merger with the
Company and did receive a salary during this time. The Company had no operations
prior to its merger with Shopmama.com Inc., which itself had no operations in
prior years.
Options/SAR Grants in Last Fiscal Year.
The Company has never granted options or stock appreciation rights.
Bonuses and Deferred Compensation.
None.
Compensation Pursuant to Plans.
The Company does not have any compensation or option plans.
Pension Table.
Not Applicable
Other Compensation.
None
Compensation of Directors.
Directors receive no compensation except for reimbursement for expenses
associated with attending a director's meeting.
Termination of Employment and Change of Control Arrangement.
There are presently no agreements nor are there anticipated any agreements,
regarding change of control of the Company.
Item 7. Certain Relationships and Related Transactions.
We have not and do not intend to enter into any transactions with our management
or any nominees for such positions. We have not and do not intend to enter into
any transactions with beneficial owners of the Company. We are not a subsidiary
of any parent company. Since inception, we have not entered into any
transactions with promoters.
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Item 8. Description of Securities
General
The Company is authorized to issue 100,000,000 shares of capital stock, par
value $0.001 per share designated as Common Stock. There are 63,028,900 fully
paid and non-assessable shares of Common Stock currently issued and outstanding
as of August 18, 2000.
Common Stock
The holders of Common Stock are entitled to one vote per share on each matter
submitted to a vote at any meeting of shareholders. Shares of Common Stock do
not carry cumulative voting rights and, therefore, a majority of the shares of
outstanding Common Stock will be able to elect the entire board of directors
and, if they do so, minority shareholders would not be able to elect any persons
to the board of directors. The Company's bylaws provide that a majority of the
issued and outstanding shares of the Company constitutes a quorum for
shareholders' meetings, except with respect to certain matters for which a
greater percentage quorum is required by statute or the bylaws.
Shareholders of the Company have no preemptive rights to acquire additional
shares of Common Stock or other securities. The Common Stock is not subject to
redemption and carries no subscription or conversion rights. In the event of
liquidation of the Company, the shares of Common Stock are entitled to share
equally in corporate assets after satisfaction of all liabilities.
Holders of Common Stock are entitled to receive such dividends, as the board of
directors may from time to time declare out of funds legally available for the
payment of dividends. The Company seeks growth and expansion of its business
through the reinvestment of profits, if any, and does not anticipate that it
will pay dividends in the foreseeable future.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Shareholder Matters.
The Company's Common Stock is currently not quoted or listed for trading with
any exchange or market. None of the Company's Common stock is subject to
outstanding options or warrants to purchase shares of the Company.
Since its inception, the Company has not paid any dividends on its Common Stock,
and the Company does not anticipate that it will pay dividends in the
foreseeable future.
As of August 18, 2000 the Company had 63,028,900 shares of its Common Stock
issued and outstanding held by approximately 109 shareholders.
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There are 3,000,000 shares of the Common stock of the Company held by Mr. Burns
and Mr. Utley, who are affiliated, All of these securities are restricted
securities as defined under Rule 144 of the Securities Act and may only be sold
under the Rule or otherwise under an effective registration statement or an
exemption from registration, if available. Rule 144 generally provides that a
person who has satisfied a one year holding period for the restricted securities
may sell, within any three month period subject to certain manner of resale
provisions, an amount of restricted securities which does not exceed the greater
of 1% of a company's outstanding common stock or the average weekly trading
volume in such securities during the four calendar weeks prior to such sale. All
3,000,000 shares of common stock outstanding are restricted shares for which the
one-year holding period has not expired. A sale of shares by such security
holders, whether under Rule 144 or otherwise, may have a depressing effect upon
the price of our common stock in any market that might develop.
Under Rule 144, Directors, Executive Officers and persons or entities they
control or who control them and may sell shares of common stock in any
three-month period in an amount limited to the greater of 1% of our outstanding
shares of common stock or the average of the weekly trading volume in our common
stock during the four calendar weeks preceding a sale. Sales under Rule 144 must
also be made without violating the manner-of-sale provisions, notice
requirements, and the availability of public information about us.
Penny Stock Considerations.
Broker-dealer practices in connection with transactions in penny stocks are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission. Penny stocks generally are equity securities with a price of less
than $5.00. Penny stock rules require a broker-dealer, prior to a transaction in
a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document that provides information about penny stocks and the
risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. Our shares will likely be subject to such penny stock rules
and our shareholders will in all likelihood find it difficult to sell their
securities.
No market exists for our securities and there is no assurance that a regular
trading market will develop, or if developed will be sustained. A shareholder in
all likelihood, therefore, will not be able to resell the securities referred to
herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept our securities as pledged collateral for loans
unless a regular trading market develops. There are no plans, proposals,
arrangements or understandings with any person with regard to the development of
a trading market in any of our securities.
As of the date of this registration, we had One Hundred Nine (109) holders of
record of our common Stock. We currently have one class of Common Stock
outstanding.
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<PAGE>
We have not paid any dividends since we were formed. There are no restrictions
that limit our ability to pay dividends, but we do not anticipate paying
dividends in the near future.
Item 2. Legal Proceedings.
The Company is not, and has not been, involved in any legal proceedings.
Item 3. Changes in and Disagreements with Accountants.
During the two most recent fiscal years and the subsequent interim period, the
Company has had no disagreement, resignation or dismissal of the principal
independent accountant for the Company. The accountant for the Company at this
time is Albright, Persing and Associates Ltd.
Item 4. Recent Sales of Unregistered Securities.
The following sets forth information relating to all previous sales by us, which
were not registered under the Securities Act of 1933. During the period ended
December 31, 1999, the Company commenced a private offering, exempt from
registration requirements under Rule 504 of Regulation D, of 24,000,000 shares
of common stock at $.001 per share. A total of 24,000,000 shares were purchased,
resulting in proceeds to the Company of $24,000.
We have never utilized an underwriter for an offering of our securities.
Item 5. Indemnification of Directors and Officers.
Our Articles of Incorporation provide that to the fullest extent permitted by
law, none of our directors or officers shall be personally liable to us or our
shareholders for damages for breach of any duty owed to our shareholders or us.
In addition, we shall have the power, by our by-laws or in any resolution of our
stockholders or directors, to undertake the indemnify to officers and directors
of ours against any contingency or peril as may be determined to be in our best
interest and in conjunction therewith, to procure, at our expense, policies of
insurance.
At this time, no statute or provision of the by-laws, any contract or other
arrangement provides for insurance or indemnification of any of our controlling
persons, directors or officers which would affect his or her liability in that
capacity.
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PART F/S
Financial Statements
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
AUDITED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
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TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT A1
FINANCIAL STATEMENTS
Balance Sheets A2
Statements of Operations A3
Statements of Cash Flows A4
Statements of Stockholders' Equity (Deficit) A5
Notes to Financial Statements A6 to A10
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[LETTERHEAD OF ALBRIGHT, PERSING & ASSOCIATES, LTD.]
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
D.W. Group Technologies, Inc.
We have audited the accompanying balance sheets of D.W. Group
Technologies, Inc. (a development stage company) as of December 31, 1999, 1998
and 1997, and the related statements of operations, stockholders' equity and
cash flows for the years ended December 31, 1999, 1998 and 1997 and for the
period from inception (June 30, 1996) to December 31, 1999. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of D.W. Group Technologies,
Inc. as of December 31, 1999, 1998, and 1997, and the results of its operations
and its cash flows for the years ended December 31, 1999, 1998 and 1997 and for
the period from inception (June 30, 1996) to December 31, 1999 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company's ability to generate sufficient cash flows to
meet its obligations and sustain its operations, either through future revenues
and/or additional debt or equity financing, cannot be determined at this time.
These uncertainties raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Albright, Persing & Associates, Ltd.
Reno, Nevada
June 7, 2000
-A1-
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
DECEMBER 31, 1999, 1998 AND 1997
(See Independent Auditors' Report)
ASSETS
<TABLE>
<CAPTION>
December 31, December 31, December 31,
1999 1998 1997
---------------- ---------------- ----------------
<S> <C> <C> <C>
Current Assets
Cash $ 21,514 $ - $ -
---------------- ---------------- ----------------
Total Assets $ 21,514 $ - $ -
================ ================ ================
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<S> <C> <C> <C>
Current Liabilities
Accounts Payable $ - $ 15,800 $ -
---------------- ---------------- ----------------
Total Current Liabilities - 15,800 -
---------------- ---------------- ----------------
Stockholders' Equity (Deficit)
Common stock, $.001 par value
authorized 100,000,000 shares,
issued and outstanding
56,528,900 shares at December
31, 1999 and 2,328,900 shares at
December 31, 1998 and 1997 56,529 2,329 2,329
Additional paid-in capital 20,960 20,960 20,960
Deficit accumulated during the
development stage (55,975) (39,089) (23,289)
---------------- ---------------- ----------------
Net Stockholders' Equity (Deficit) 21,514 (15,800) -
---------------- ---------------- ----------------
Total Liabilities and Stockholders'
Equity (Deficit) $ 21,514 $ - $ -
================ ================ ================
</TABLE>
-A2-
The accompanying notes are an integral part of these financial statements.
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
Inception
Through Years ended
December 31, December 31,
1999 1998 1997 1999
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expenses:
Professional Services $ 16,790 $ 15,800 $ - $ 55,879
Other general and administrative
expenses 96 - - 96
------------------- ------------------- ----------------- ----------------
16,886 15,800 - 55,975
------------------- ------------------- ----------------- ----------------
Net (Loss) (16,886) (15,800) - (55,975)
Other Comprehensive Income (Loss) - - - -
------------------ ------------------- ----------------- ----------------
Comprehensive (Loss) $ (16,886) $ (15,800) $ - $ (55,975)
================== =================== ================= ================
Net Loss per Share $ (.001) $ (.007) $ - $ (.005)
================== =================== ================= ================
Weighted average
shares outstanding 30,029,722 2,328,900 2,328,900 10,179,512
================== =================== ================= ================
</TABLE>
-A3-
The accompanying notes are an integral part of these financial statements.
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
Inception
Through Years Ended
December 31, December 31,
1999 1998 1997 1999
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cash Flows from/(for) Operating Activities:
Net income (loss) $ (16,886) $ (15,800) $ - $ (55,975)
----------------- ------------------ ---------------- ---------------
Adjustments to reconcile net loss to
net cash used by operating
activities:
Increase (Decrease) in
accounts payable (15,800) 15,800 - -
Stock issued for professional
services rendered 30,200 - - 53,489
----------------- ------------------ ---------------- ---------------
Net Adjustments 14,400 15,800 - 53,489
----------------- ------------------ ---------------- ---------------
Net Cash (Used) by
Operating Activities (2,486) - - (2,486)
----------------- ------------------ ---------------- ---------------
Cash Flows From Financing Activities:
Proceeds from sales of stock 24,000 - - 24,000
----------------- ------------------ ---------------- ---------------
Net Cash Provided by
Financing Activities 24,000 - - 24,000
----------------- ------------------ ---------------- ---------------
Net increase (decrease) in cash 21,514 - - 21,514
Cash at beginning of year - - - -
----------------- ------------------ ---------------- ---------------
Cash at end of period $ 21,514 $ - $ - $ 21,514
================= ================== ================ ===============
SUPPLEMENTAL DISCLOSURES
Amount paid for interest $ - $ - $ - $ -
================= ================== ================ ===============
Amount paid for income taxes $ - $ - $ - $ -
================= ================== ================ ===============
</TABLE>
-A4-
The accompanying notes are an integral part of these financial statements.
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIODS ENDED DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
(See Independent Auditors' Report)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
-------------- Paid-in Development
Shares Amount Capital Stage Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of shares of common stock during
1996, for professional services
rendered 2,328,900 $ 2,329 $ 20,960 $ - $ 23,289
Net loss for 1996 - - - (23,289) (23,289)
------------- -------------- ------------ ------------ -----------
Balance, December 31, 1996 2,328,900 2,329 20,960 (23,289) -
Net loss for 1997 - - - - -
------------- -------------- ------------ ------------- ------------
Balance, December 31, 1997 2,328,900 2,329 20,960 (23,289) -
Net loss for 1998 - - - (15,800) (15,800)
------------- -------------- ------------ ------------ -----------
Balance, December 31, 1998 2,328,900 2,329 20,960 (39,089) (15,800)
Issuance of shares of common stock during
1999, for professional services
rendered 30,200,000 30,200 - - 30,200
Issuance of shares of common stock for cash
on December 30, 1999, at $.001 per
share 24,000,000 24,000 - - 24,000
Net loss for 1999 - - - (16,886) (16,886)
------------- -------------- ------------ ------------ -----------
Balance, December 31, 1999 56,528,900 $ 56,529 $ 20,960 $ (55,975) $ 21,514
============= ============== ============ ============ ============
</TABLE>
-A5-
The accompanying notes are an integral part of these financial statements.
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Business
D.W. Group Technologies, Inc. (the "Company") a Nevada corporation located
in Dickson, Tennessee, was incorporated on May 15, 1996. The Company was
organized to operate as a provider of web services for and on the Internet,
including but not limited to web page design, provider services, maintenance
sites, and technical support.
The Company has been in the development stage since its formation. It is
primarily engaged in financial planning, raising capital, and developing its
planned business activities.
Risks and Uncertainties
The Company has not generated significant revenue during the years ended
December 31, 1999, 1998, and 1997, and has funded its operations primarily
through the issuance of equity. Accordingly, the Company's ability to accomplish
its business strategy and to ultimately achieve profitable operations is
dependent upon its ability to obtain additional financing and execute its
business plan. There can be no assurance that the Company will be able to obtain
additional funding, and if available, that the funding will be obtained on terms
favorable to or affordable by the Company. As discussed in Note 4 below, the
Company is in the process of completing a merger acquisition, but there are no
assurances that the merger will be profitable. Ultimately, however, the company
will need to achieve profitable operations in order to continue as a going
concern.
In addition, the Company has suffered recurring losses since its
inception, and at December 31, 1999, has an accumulated deficit of $55,975.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of liabilities that may result from the outcome of this
uncertainty.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash balances and instruments with
maturities of three months or less at the time of purchase.
-A6-
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
Concentrations of Credit Risk
The Company maintains cash balances at one bank located in Cottontown,
Tennessee. Accounts at this institution are insured by the Federal Deposit
Insurance Corporation up to $100,000. The Company's cash balances, at times, may
exceed federally insured limits.
Fair Value of Financial Instruments
Effective June 30, 1996, the Company adopted Statement of Financial
Accounting Standards No. 107, "Disclosures about Fair Value of Financial
Instruments" ("SFAS No. 107"). The carrying amounts reported in the balance
sheet for cash and cash equivalents approximate those assets' fair values.
Estimates
The preparation of 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
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Income Taxes
In February 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS
No. 109"). SFAS No. 109 required a change from the deferred method of accounting
for income taxes of APB Opinion 11, to the asset and liability method of
accounting for income taxes. Under the asset and liability method of SFAS No.
109, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under SFAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date. The Company
adopted SFAS No. 109 effective June 30, 1996, at its inception.
-A7-
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
Net Loss per Share
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS
No. 128"). SFAS No. 128 simplifies the standards for computing earnings per
share ("EPS") and was effective for financial statements issued for periods
ending after December 15, 1997, with earlier application not permitted. The
Company adopted SFAS No. 128 effective December 30, 1997.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the Company has no common shares that are potentially issueable,
such as stock options, convertible preferred stock, and warrants, basic and
diluted earnings per share are the same.
New Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"). SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement does not, however, require a specific
format for the disclosure, but requires the Company to display an amount
representing total comprehensive income for the period in its financial
statements. Comprehensive income is determined by adjusting net income by other
items not included as a component of net income, such as the unrealized gain
(loss) on certain marketable securities. During the periods presented, the
Company had no additional components that were not a part of net income (loss);
therefore, comprehensive income and net income are the same amount.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS No. 131"). SFAS No. 131 establishes
standards for the manner in which public business enterprises report information
about operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. This statement also requires that a
public business enterprise report financial and descriptive information about
its reportable operating segments. The Company is currently not in formal
business operations and does not have any reportable operating segments.
-A8-
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. However, the effective date for this pronouncement was
delayed for one year from the original effective date of fiscal years beginning
after June 15, 1999. Since the Company does not deal in derivative instruments
or hedging activities, it is anticipated that this pronouncement will have no
impact on the Company's financial statements.
NOTE 2 - INCOME TAXES
As discussed in Note 1, the Company adopted SFAS No. 109 effective June
30, 1996. One of the provisions of SFAS No. 109 enables companies to record
deferred tax assets for the benefit to be derived from the utilization of net
operating loss carryforwards and certain deductible temporary differences. At
December 31, 1999, 1998 and 1997, the tax effects of temporary differences that
give rise to significant portions of deferred tax assets are presented below:
1999 1998 1997
------------------------------------------
Net operating loss carryforwards $ 8,396 $ 5,863 $ 3,493
Less: valuation allowance (8,396) (5,863) (3,493)
------------- ------------ ------------
$ - $ - $ -
============= ============ ============
As of December 31, 1999, the Company has net operating loss carryforwards
of approximately $55,975 for Federal income tax return purposes, which expire
through 2014. The future tax benefits are dependent upon the Company's ability
to generate future earnings.
In addition, the Company has not filed any income tax returns since its
inception. As such, it is unclear whether expenses for services rendered in
exchange for common stock could be deducted under current federal tax law.
Assuming the providers of such services included the fair value of their
services in income on their personal tax returns, the Company should be able to
deduct such losses. However, due to the uncertainty of this inclusion, coupled
with the judgment involving the realizability of any net operating loss
carryforward due to the lack of revenues by the Company, a deferred income tax
valuation allowance has been recorded for the full amount of the deferred tax
asset attributable to the net operating loss carryforward.
-A9-
<PAGE>
D.W. GROUP TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997
AND INCEPTION (JUNE 30, 1996) TO DECEMBER 31, 1999
NOTE 3 - STOCKHOLDERS' EQUITY
On January 1, 1999, the Company's board of directors converted the
authorized common stock of the Company from the original issue of 2,500,000
shares at a par value of $.01 to 100,000,000 shares at a par value of $.001.
Stockholders' equity for 1996, 1997, and 1998 has been restated to reflect the
conversion.
During the period ended December 31, 1999, the Company commenced a private
offering, exempt from registration requirements under Rule 504 of Regulation D,
of 24,000,000 shares of common stock at $.001 per share. A total of 24,000,000
shares were purchased, resulting in proceeds to the Company of $24,000.
NOTE 4 - SUBSEQUENT EVENTS
Acquisition
On March 28, 2000, the Company entered into an agreement to acquire all
the issued and outstanding shares of stock of Shopmama.com, Inc., an Internet
comparative shopping network, in exchange for 3,000,000 shares of restricted
common stock at $.001 per share.
-A10-
<PAGE>
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In March 2000, ECOM Digital Properties, Inc. (formerly D.W. Group
Technologies, Inc.) merged with Shopmama.com, Inc. (collectively "the Company").
Shopmama.com, Inc. ("Shopmama") was a corporation in the business of providing
an Internet shopping network. In connection with the legal form of the
transaction, Shopmama became a wholly owned subsidiary of ECOM Digital
Properties, Inc. (ECOM) even though the Company's new Board of Directors
consists solely of Shopmama management, and ECOM lacks substantial assets,
liabilities or marketable products. The existing shareholders of ECOM retained
their 56,528,900 shares and the stockholders of Shopmama received shares of ECOM
at a ratio of approximately 1 to 1 for a total of 3,000,000 shares. For
accounting purposes, the acquisition was treated as a recapitalization of
Shopmama rather than a business combination. Shopmama, as the accounting
acquiror, did not record goodwill or any other intangible asset for this
"reverse acquisition".
The accompanying condensed consolidated financial statements illustrate
the effect of the acquisition (Pro Forma) on the results on the Company's
financial position and results of operations. The consolidated balance sheet as
of December 31, 1999, is based on the historical balance sheets of ECOM and
Shopmama as of that date and assumes the acquisition took place on that date.
The condensed consolidated statement of income for the year ended December 31,
1999, is based on the historical statements of income of ECOM and Shopmama for
those periods. The pro forma condensed consolidated statements of income assume
the acquisition took place on January 1, 1999. No pro forma condensed
consolidated statement of income was prepared as of June 30, 1999, because
Shopmama did not exist as of that date. Also, no pro forma condensed
consolidated balance sheet as of June 30, 2000, has been presented because the
accounting for the acquisition was reflected in the Company's condensed
consolidated balance sheet as of June 30, 2000.
The pro forma condensed consolidated financial statements may not be
indicative of the actual results of the acquisition.
The accompanying pro forma condensed consolidated financial statements
should be read in connection with the historical financial statements of ECOM
and Shopmama.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
UNAUDITED
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ECOM Digital ECOM Digital
Properties Shopmama Purchase Properties
Pre-Merger Pre Merger Adjustments Post-Merger
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash $ 21,514 $ - $ - $ 21,514
Equipment - 2,000 - 2,000
Website development - 612,488 - 612,488
----------- ----------- ----------- -----------
Total Assets $ 21,514 $ 614,488 $ - $ 636,002
=========== =========== =========== ===========
Accrued Liabilities $ - $ 535,600 $ - $ 535,600
Due to Freedom Rock Partners - 92,418 - 92,418
----------- ----------- ----------- -----------
Total Liabilities - 628,018 - 628,018
----------- ----------- ----------- -----------
Common Stock 56,529 - 3,000 59,529
Paid in Capital 20,960 - (3,000) (38,015)
(55,975)
Accumulated Deficit (55,975) (13,530) 55,975 (13,530)
----------- ----------- ----------- -----------
Total Equity 21,514 (13,530) - 7,984
----------- ----------- ----------- -----------
Total Liabilities and Equity $ 21,514 $ 614,488 $ - $ 636,002
=========== =========== =========== ===========
</TABLE>
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME
UNAUDITED
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ECOM Digital Shopmama-
Properties, Inc. . com, Inc. Adjustments Pro Forma
---------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ -
Cost of Revenues - - - -
----------- ----------- ----------- -----------
Gross Profit - - - -
----------- ----------- ----------- -----------
Operating Expenses 16,886 13,530 - 30,416
Income (Loss) from
Operations (16,886) (13,530) - (30,416)
Other Income (Expense) - - - -
Income (Loss) Before
Provision for Income
Taxes (16,886) (13,530) - (30,416)
Provision for Income Taxes` - - - -
----------- ----------- ----------- -----------
Net Income (Loss) $ (16,886) $ (13,530) $ - $ (30,416)
=========== =========== =========== ===========
Net (Loss) per Share $ (0.002) $ (0.001)
=========== ===========
Weighted Average
Number of Shares
Outstanding 30,029,722 3,000,000 33,029,722
=========== =========== ===========
</TABLE>
<PAGE>
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - ADJUSTMENTS TO THE CONDENSED CONSOLIDATED BALANCE SHEET
To reflect the recapitalization of Shopmama, adjustments were made to record
the issuance of 3,000,000 shares of $.001 par value ECOM common stock in
exchange for the outstanding shares of Shopmama, eliminate Shopmama's common
stock, and eliminate ECOM's accumulated deficit.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
INTERIM UNAUDITED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
----
ACCOUNTANTS' DISCLAIMER OF OPINION B1
FINANCIAL STATEMENTS
Unaudited Balance Sheets B2
Unaudited Statements of Operations B3
Unaudited Statements of Cash Flows B4-B5
Unaudited Statements of Stockholders' Equity (Deficit) B6
Notes to Unaudited Financial Statements B7-B12
-15-
<PAGE>
[LETTERHEAD OF ALBRIGHT, PERSING & ASSOCIATES, LTD.]
ACCOUNTANTS' DISCLAIMER OF OPINION
To the Shareholders and Board of Directors
ECOM Digital Properties, Inc.
The accompanying consolidated balance sheet of ECOM Digital Properties,
Inc. and subsidiaries as of June 30, 2000, and the related consolidated
statements of operations, stockholders equity, and cash flows for the six months
ended June 30, 2000, were not audited by us, and accordingly, we do not express
an opinion on them.
Also, the statements of operations, stockholders equity, and cash flows for
ECOM Digital Properties, Inc. (previously Shopmama.com, Inc.) for the six
months ended June 30, 1999, and for the period from inception (August 31, 1999)
to June 30, 2000, were not audited by us, and accordingly, we do not express an
opinion on them.
/s/ Albright, Persing & Associates, Ltd.
August 18, 2000
-B1-
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(Unaudited - See Accountants' Disclaimer of Opinion)
ASSETS
Cash $ 432
Equipment, net of accumulated depreciation
of $2,813 26,387
Website development, net of accumulated
amortization of $63,444 576,688
-----------
Total Assets $ 603,507
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 18,648
Accrued liabilities 173,884
Due to Freedom Rock Partners 749,628
-----------
Total Current Liabilities 942,160
-----------
Stockholders' Equity (Deficit)
Common stock, $.001 par value
authorized 100,000,000 shares,
issued and outstanding 59,528,900
shares at June 30, 2000 59,529
Additional paid in capital (55,540)
Deficit accumulated during the
development stage (342,642)
-----------
Net Stockholders' Equity (Deficit) (338,653)
-----------
Total Liabilities and Stockholders'
Equity (Deficit) $ 603,507
===========
-B2-
The accompanying notes are an integral part of these financial statements.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants' Disclaimer of Opinion)
Six Inception
Months Ended Through
June 30, June 30,
2000 2000
----------- ----------
Expenses
Professional Services $ 236,518 $ 238,518
Other general and administrative expenses 92,594 104,124
----------- ----------
329,112 342,642
Net (Loss) (329,112) (342,642)
Other Comprehensive Income (Loss) - -
----------- ----------
Comprehensive (Loss) $ (329,112) $ (342,642)
=========== ==========
Net Loss per Share $ (0.129) $ (0.225)
=========== ==========
Weighted average shares outstanding 2,554,945 1,524,590
=========== ==========
-B3-
The accompanying notes are an integral part of these financial statements.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD ENDED JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants' Disclaimer of Opinion)
<TABLE>
<CAPTION>
Six Inception
Months Ended Through
June 30, June 30,
2000 2000
----------- ------------
<S> <C> <C>
Cash Flows from (for) Operating Activities:
Net income (loss) $ (329,112) $ (342,642)
----------- -----------
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation expense 2,813 2,813
Amortization expense 63,444 63,444
Increase in accounts payable 14,147 14,147
(Decrease) Increase in loans payable (361,716) 173,884
Increase in due to Freedom Rock Partners 657,210 749,628
Stock issued for services rendered 3,000 3,000
----------- -----------
Net Adjustments 378,898 1,006,916
----------- -----------
Net Cash (Used) by Operating Activities 49,786 664,274
----------- -----------
Cash Flows From Investing Activities:
Purchase of furniture and equipment (27,200) (29,200)
Purchases of intangible assets (27,644) (640,132)
Cash acquired during recapitalization 5,490 5,490
----------- -----------
Net Cash (Used) by Investing Activities (49,354) (663,842)
----------- -----------
Net increase in cash 432 432
Cash at beginning of year - -
----------- -----------
Cash at end of period $ 432 $ 432
=========== ===========
SUPPLEMENTAL DISCLOSURES
Amount Paid for Interest $ - $ -
=========== ===========
Amount Paid for Income Taxes $ - $ -
=========== ===========
</TABLE>
-B4-
The accompanying notes are an integral part of these financial statements.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE PERIOD ENDED JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants' Disclaimer of Opinion)
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Assets and Liabilities Acquired in Recapitalization
Prepaid expenses $ 900
Accounts payable 5,400
-B5-
The accompanying notes are an integral part of these financial statements.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD ENDED JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants' Disclaimer of Opinion)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
-------------------------- Paid-in Development
Shares Amount Capital Stage Total
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net loss for 1999 - $ - $ - $ (13,530) $ (13,530)
---------------- ----------------- ---------------- --------------- -----------------
Balance, December 31, 1999 - - - (13,530) (13,530)
Issuance of common stock during
2000 for services provided 3,000,000 3,000 - - 3,000
Effects of recapitalization 56,528,900 56,529 (55,540) - 989
Net loss through June 30, 2000 - - - (329,112) (329,112)
---------------- ----------------- ---------------- --------------- -----------------
Balance, June 30, 2000 59,528,900 $ 59,529 $ (55,540) $ (342,642) $ (338,653)
================ ================= ================ =============== =================
</TABLE>
-B6-
The accompanying notes are an integral part of these financial statements.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants Disclaimer of Opinion)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Operations
ECOM Digital Properties, Inc., (formerly D.W. Group Technologies, Inc.) and
its wholly owned subsidiary Shopmama.com, Inc. (collectively "the Company"), a
development stage enterprise, operates in the business of providing an Internet
shopping network.
In March 2000, ECOM Digital Properties, Inc. ("ECOM") acquired all of the
outstanding common stock of Shopmama.com, Inc. ("Shopmama") by issuing 3,000,000
shares of its common stock. In connection with the legal form of the
transaction, Shopmama became a wholly owned subsidiary of ECOM, even though the
Company's new Board of Directors consists solely of Shopmama management, and
ECOM lacks substantial assets, liabilities or marketable products. For
accounting purposes, the acquisition was treated as a recapitalization of
Shopmama rather than a business combination. Shopmama, as the accounting
acquiror did not record goodwill or any other intangible asset for this "reverse
acquisition".
The historical financial statements are those of Shopmama. Shopmama, a
development stage enterprise, was incorporated on August 31, 1999 in the State
of Nevada. Shopmama, has been, and continues to be, involved providing an
Internet shopping network. Loss per share has been restated for all periods
prior to the acquisition to include the number of equivalent shares received by
Shopmama stockholders in the reverse acquisition.
The following summarized pro forma (unaudited) information assumes the
acquisition had occurred on January 1, 1999:
1999
---------
Net Loss $ 30,416
=========
Earnings per share:
Basic $ (0.001)
=========
Risks and Uncertainties
Since its inception, Shopmama and more recently the Company, has been
primarily engaged in directing, supervising and coordinating research and
development efforts in the continuing development of its products and raising
funds.
-B7-
The accompanying notes are an integral part of these financial statements.
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants Disclaimer of Opinion)
There is no assurance that the Company's research and development and
marketing activities will be successful, that the Company will have commercially
acceptable products, or that the Company will achieve significant sales of such
products. The Company has incurred net losses and has an accumulated deficit at
June 30, 2000. In addition, the Company operates in an environment of rapid
change in technology, is dependent upon its ability to obtain additional funding
and execute its business plan. If the Company is unable to successfully bring
its technologies to commercialization, it is unlikely that the Company could
continue as a business.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of liabilities that may result from the outcome of this
uncertainty.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash balances and instruments with
maturities of three months or less at the time of purchase.
Concentrations of Credit Risk
The Company maintains cash balances at two banks, one located in Cottontown,
Tennessee, and the other located in Jericho, New York. Accounts at these
institutions are insured by the Federal Deposit Insurance Corporation up to
$100,000. The Company's cash balances, at times, may exceed federally insured
limits.
Fair Value of Financial Instruments
In accordance with the Statement of Financial Accounting Standards No. 107,
Disclosures about Fair Value of Financial Instruments ("SFAS No. 107"), the
carrying amounts reported in the balance sheet for cash and cash equivalents
approximate those assets' fair values. Active markets for the Company's other
financial instruments that are subject to the fair value disclosure requirements
of SFAS No. 107 do not exist and there are no quoted market prices for these
instruments. Accordingly, it is not practicable to estimate the fair values of
such financial instruments because of (1) the limited information available to
the Company, and (2) the significance of the cost to obtain independent
appraisals for this purpose.
-B8-
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants Disclaimer of Opinion)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
Software and Deferred Development Costs
The company accounts for the costs of developing software products to be
used internally in accordance with Statement of Position 98-1, Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use which
allows for costs incurred during the application development stage to be
capitalized upon the establishment of technological feasibility and subsequently
reported on the balance sheet at the lower of unamortized cost or net realizable
value. Capitalized costs are amortized based on current and future revenue for
each product with an annual minimum equal to the straight-line amortization over
the remaining estimated economic life of the product.
Asset Impairment
The Company reviews its intangibles and other long-lived assets periodically
in accordance with Statement of Financial Accounting Standard ("SFAS") No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of, to determine potential impairment by comparing the carrying
value of the assets with estimated undiscounted future cash flows expected to
result from the use of the assets, including cash flows from disposition. Based
on this analysis, if the sum of the expected future undiscounted net cash flow
is less than its carrying value, the Company would determine whether an
impairment loss should be recognized. At June 30, 2000, it was determined that
there were no asset impairments.
Estimates
The preparation of 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
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
-B9-
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants Disclaimer of Opinion)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
Income Taxes
The Company accounts for income taxes by the asset/liability approach in
accordance with the provisions of SFAS No. 109, Accounting for Income Taxes.
Under this pronouncement, deferred income taxes, if any, reflect the estimated
future tax consequences when reported amounts of assets and liabilities are
recovered or paid. Deferred income tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that are
scheduled to be in effect when the differences are expected to reverse. The
provision for income taxes, if any, represents the total income taxes paid or
payable for the current year, plus the change in deferred taxes during the year.
The tax benefits related to operating loss carryforwards are recognized if
management believes, based on available evidence, that it is more likely than
not that they will be realized.
Net Loss per Share
In February, 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share ("SFAS No. 128").
SFAS No. 128 simplifies the standards for computing earnings per share ("EPS")
and was effective for financial statements issued for periods ending after
December 15, 1997, with earlier application not permitted. The Company adopted
SFAS No. 128 effective December 31, 1999.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the Company has no common shares that are potentially issueable, such
as stock options, convertible preferred stock, and warrants, basic and diluted
earnings per share are the same.
-B10-
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants Disclaimer of Opinion)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BUSINESS ACTIVITY -
Continued
New Accounting Standards
In June, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"). SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement does not, however, require a specific
format for the disclosure but requires the Company to display an amount
representing total comprehensive income for the period in its financial
statements. Comprehensive income is determined by adjusting net income by other
items not included as a component of net income, such as the unrealized gain
(loss) on certain marketable securities. During the periods presented, the
Company had no additional components that were not a part of net income (loss),
therefore, comprehensive income and net income are the same amount.
In June, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS No. 131"). SFAS No. 131 establishes
standards for the manner in which public business enterprises report information
about operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. This statement also requires that a
public business enterprise report financial and descriptive information about
its reportable operating segments. The Company is currently not in formal
business operations and does not have any reportable operating segments.
In June, 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. However, the effective date for this pronouncement was
delayed for one year from the original effective date of fiscal years beginning
after June 15, 1999. Since the Company does not deal in derivative instruments
or hedging activities, it is anticipated that this pronouncement will have no
impact on the Company's financial statements.
-B11-
<PAGE>
ECOM DIGITAL PROPERTIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000
AND INCEPTION (AUGUST 31, 1999) TO JUNE 30, 2000
(Unaudited - See Accountants Disclaimer of Opinion)
NOTE 2 - INCOME TAXES
As discussed in Note 1, the Company adopted SFAS No. 109 effective June 30,
1996. One of the provisions of SFAS 109 enables companies to record deferred tax
assets for the benefit to be derived from the utilization of net operating loss
carryforwards and certain deductible temporary differences. At June 30,2000 and
December 31, 1999, the tax effects of temporary differences that give rise to
significant portions of deferred tax assets are presented below:
2000 1999
------------- ------------
Net operating loss carryforwards $ 19,322 $ 8,396
Less: valuation allowance (19,322) (8,396)
------------- ------------
$ - $ -
============= ============
As of June 30, 2000, the Company has net operating loss carryforwards of
approximately $55,975 for Federal income tax return purposes, which expire
through 2014. The future tax benefits are dependent upon the Company's ability
to generate future earnings.
In addition, the Company has not filed any income tax returns since its
inception. As such, it is unclear whether expenses for services rendered in
exchange for common stock could be deducted under current federal tax law.
Assuming the providers of such services included the fair value of their
services in income on their personal tax returns, the Company should be able to
deduct such losses. However, due to the uncertainty of this inclusion, coupled
with the judgment involving the realizability of any net operating loss
carryforward due to the lack of revenues by the Company, a deferred income tax
valuation allowance has been recorded for the full amount of the deferred tax
asset attributable to the net operating loss carryforward.
-B12-
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Copies of the following documents are included as exhibits to this Form 10-SB
pursuant to item 601 of regulation S-B.
Exhibit
No. Title of Document
1 Agreement and Plan of Reorganization by and between
D.W. Group Technologies, Inc. and Shopmama.com, Inc.
2 Articles of Incorporation of the Company and related
Amendments
3 Bylaws of the Company
4 Specimen Stock Certificate
-16-
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, there under duly authorized.
ECOM DIGITAL PROPERTIES, INC.
/s/ Michael Burns
---------------------------------
By: Michael Burns, President
-17-
