As filed with the Securities and Exchange Commission on
November 29, 2000 Registration No. ___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
AMENDMENT NO. 1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
E-City Software, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Nevada 88-0461317
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7372
(Primary Standard Industrial
(Classification Code Number)
1201 First Avenue South
Suite 330
Seattle, WA 98134
(206) 624-8070 Tel
(206) 624-8048 Fax
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
Anis Jessa
Chief executive officer
1201 First Avenue South
Suite 330
Seattle, WA 98134
(206) 624-8070 Tel
(206) 624-8048 Fax
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
Jonathan Dariyanani, Esq.
2035 Monroe Street
Hollywood, Florida 33020
(954) 401-4994 Tel
(520) 441-8755 Fax
<PAGE>
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration statement.
If this Form is filed to register additional securities for an offering under
Rule 462(b)of the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ].
If this Form is a post-effective amendment filed under Rule 462(c) of the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering [ ].
If this Form is a post-effective amendment filed under Rule 462(d) of the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering [ ].
If delivery of the prospectus is expected to be made under Rule 434, please
check the following box [ ].
Calculation of registration fee
Title of
each class
of Amount of
securities shares to Proposed maximum Proposed maximum Amount of
to be be offering price aggregate registration
registered registered per unit offering price fee (1)
----------- ----------- ------------- ------------- ------------
Common shares, 3,853,000 $ 5.00 $ 19,265,000 $ 5086.00
$0.0001
par value
(1) Estimated solely for the purpose of computing the amount of the registration
fee under Rule 457(o) of the Securities Act of 1933. The Registrant amends this
Registration statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which
specifically states that this Registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until
the Registration statement shall become effective on such date as the
Commission, acting according to such Section 8(a), may determine.
<PAGE>
Prospectus (Subject to Completion)
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Issued [to be dated upon printing of prospectus] 2000
3,853,000 Shares
E-CITY SOFTWARE, INC.
COMMON STOCK
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Our security holders are offering for sale a maximum of 3,853,000 shares of
common stock, at a purchase price of $5.00 per share. We have prepared this
prospectus to allow these security holders, or their respective pledgees,
donees, transferees or other successors in interest to sell up to 3,853,000
shares of our common stock that they own. We refer to these security holders,
pledgees, donees and transferees as "selling stockholders." We will receive no
proceeds from the sale of shares by selling stockholders. The maximum amount to
be received by the selling stockholders is $19,265,000. We have agreed to pay
the costs of registering the common stock, excluding commissions, transfer taxes
and other expenses related to the resale of the common stock by the selling
stockholders.
This is a highly risky investment.
WE HAVE DESCRIBED THESE RISKS UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE
6.
Price $5.00 a share
Price to Sales Proceeds to
public commissions selling stockholders
Per share..... $5.00 $0.00 $5.00
Total......... $19,265,000 $0.00 $19,265,000
<PAGE>
Table of contents
Page
Front of registration statement 2-3
Inside front and outside back cover pages of prospectus 4
Summary information and risk factors 6
Use of proceeds 11
Determination of offering price 11
Plan of distribution 11
Legal proceedings 12
Directors, executive officers, promoters and control persons 12
Executive compensation 13
Security ownership of certain beneficial owners and management 15
Selling security holders 18
Description of securities 24
Interest of named experts and counsel 25
Changes in and disagreements with accountants on accounting 25
and financial disclosure
Disclosure of commission position on indemnification for 26
securities act liabilities
Description of business 26
Plan of operation 30
Description of property 31
Certain relationships and related transactions 32
Market for common equity and related stockholder matters 35
Financial statements 38
Indemnification of directors and officers 58
Other expenses of issuance and distribution 58
Recent sales of unregistered securities 58
Undertakings 59
Exhibits index 62
<PAGE>
Summary information and risk factors
Prospectus summary
You should read the following summary together with the more detailed
information regarding E-City and the common stock being sold in this offering
and our financial statements and notes appearing elsewhere in this prospectus.
E-City Software, Inc.
Principal Executive Offices
1201 First Avenue South
Suite 330
Seattle, Washington
98134-1234
Http://www.ecitysoftware.com
Telephone: 206-624-8070
E-City Software, Inc. is a development stage software company that specializes
in developing computer maps. E-City was incorporated in May 2000. In August
2000, E-City acquired Butterfly Software, Inc., a British Columbia corporation
that was itself incorporated in November 1998 for the purpose of developing
mapping and city guide software. Collectively, the Butterfly and E-City
development teams have completed computer maps of Las Vegas, San Francisco and
Seattle. These maps feature visual landmarks and buildings, in addition to
streets and other features normally included in maps. E-City builds computer
maps primarily designed for tourists or pedestrians. They are not primarily
designed as driving maps. E-City presently develops these maps under contract
for a customer. E-City's business focuses on the development and sale of these
computer maps.
The selling stockholders, who include the principal stockholders and officers of
E-City, are offering for sale 3,853,000 common shares to the public at $5.00 per
share. E-City will receive no proceeds from this offering. This offering is
being conducted without an underwriter.
The offering:
Common stock offered............3,853,000 shares
Common stock to be
outstanding
after this
offering....................... 4,965,000 shares
Use of proceeds............... We will not receive any of
the proceeds from the sale of the common stock
by the stockholders who will sell shares in
connection with this prospectus.
Proposed over the
counter bulletin
board symbol................... ECTY
The foregoing information is based on the number of shares of common stock
outstanding as of October 31, 2000. No option shares have been authorized,
issued or granted to date.
<PAGE>
Risk factors
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing our common stock.
Investing in our common stock involves a high degree of risk. Risks and
uncertainties, in addition to those we describe below, that are not presently
known to us, or that we currently believe are immaterial may also impair our
business operations. If any of the following risks occur, our business could be
harmed, the price of our common stock could decline and you may lose all or part
of your investment.
Risks related to our business
E-City could fail due to lack of cash reserves
As of September 30, 2000, we had $391,317 in assets and $343,259 in liabilities.
We had $5,873 available in cash as of September 30, 2000. This means that we
have less than one month's worth of operating capital available. If any
unplanned contingencies occur or there are delays in our receipt of payments
under our contract with Cityscape, we may not have the cash reserves necessary
to deal with these contingencies and might fail for a lack of cash.
E-City could fail if we continue to lose money
We have incurred significant losses since we began operating. We do not have
sufficient cash to support continued losses. If we do not become profitable in
the next six to twelve months, we may not be able to raise more money through
sale of our stock or borrowing, and we could therefore fail.
We have only been in business for eighteen months, making our business difficult
to evaluate because of its lack of history
We have only been in business for eighteen months. We do not have two complete
fiscal years of financial statements to review. Our business model remains
unproven and it may be difficult to evaluate whether it will work or not, given
how little time we have been in business.
E-City could fail without strategic partners
We do not have the financial resources on our own to develop, market and sell
our products as planned. Instead, we anticipate relying heavily on strategic
partners for assistance in these areas. To date, we have not developed strategic
partnerships. If we are unable to develop such partnerships, we may be unable to
develop, market and sell our products as planned and may therefore fail or
encounter significantly diminished financial prospects.
E-City might fail if it lost its only customer
We have derived 100% of our revenues since inception from one customer,
Cityscape.com, Inc. Because of our dependence on Cityscape for revenues, if we
are unable to maintain our contract with Cityscape, if Cityscape no longer
requires our services in the future, if Cityscape fails to make payments under
the contract or if we are unable to expand our sources of revenue in the future,
we might fail.
No one on our management team has ever managed a public company and may not be
able to do so successfully
The public company environment is complex and involves regulations, policies,
investor relations, and management tasks not required in the private company
environment. No member of our management team has ever managed a public company
and it may be difficult for our management team to learn to do so effectively.
If our management team is unable to effectively learn to manage E-City, we may
be unsuccessful in developing and applying our business plan and we may fail.
Our management team has a very limited track record, history and experience in
mapping and therefore may not be successfully able to manage E-City
Computer generated mapping is a relatively new competitive field and our
management team has very limited experience in this area. Chief executive
officer Anis Jessa and Chief technology officer Salim Devji both have
approximately two years of experience in the field of computer generated
mapping. Our management team has very limited contacts and relationships in the
field upon which to rely. The two years of experience in the field may not be
sufficient for Messrs. Jessa and Devji to effectively lead E-City's growth in
the computer generated mapping field. Without effective, experienced management,
we may not be able to implement our plan and our results would be adversely
impacted.
Our management team works for below market wages in a competitive industry. If
they leave, we may be unable to replace them and we might fail.
The management team works for substantially lower wages than are paid by other
software companies. If members of our management team leave, it is unlikely that
we could find replacements at the compensation levels we are offering. We may be
financially unable to offer market levels of compensation, and even if we can,
we may have difficulty hiring qualified personnel due to E-City's start-up
status. Without qualified management, we will not be able to execute our plan
and might fail.
We are dependent on a limited number of third parties for a significant portion
of our geographic data, without whom our products and services would suffer
significantly
Most of our services rely on the availability and accuracy of geographic data.
We have licensed a significant portion of our geographic data from a limited
number of sources through standard, non-exclusive, short-term simple end user
software licenses available to any purchaser of the data. If any of these third
parties were to merge with or be acquired by another company, the number of
sources providing this geographic data could be further reduced or the
prevailing terms for licensing of such data could change. Also, if the pricing
structure or standard license terms for this data were to change significantly,
we may not be able to afford to license the data necessary to develop our
products as currently contemplated.
Computer mapping is a relatively new field whose profitability is unproven
E-City has experienced significant losses since inception. Computer mapping is a
relatively new field and it is unclear that companies, including E-City, will be
able to make a profit under the current computer mapping business models.
There are large, well financed companies that compete in computer mapping and we
may not be able to compete effectively against them
There are numerous, well-financed competitors in computer mapping, many of whom
have larger staffs, more resources, more strategic alliances, more sophisticated
equipment and more experience in the computer mapping field than E-City does. We
have not demonstrated that we can compete successfully against these competitors
and we may not be able to in the future. If we are unable to effectively compete
in the computer-mapping field, our results could be negatively effected, we may
be unable to implement our plan and we might ultimately fail.
If we cannot protect our computerized maps against copying, our ability to
market and sell those maps could be damaged
Because computer maps represent cities and areas that all persons are free to
visit and photograph, there are few barriers to prevent copying of our maps.
Although our computerized maps are developed in a process that we have attempted
to protect, we may not be successful in doing so. We rely on a combination of
contract, copyright, trademark and trade secret laws and restrictions on
disclosure to protect our process for computerized maps. We also enter into
confidentiality or license agreements with our employees, consultants and
customers, and control access to and distribution of our software, documentation
and other proprietary information. Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy or otherwise obtain
and use our computerized maps without payment. Monitoring unauthorized use of
our computer maps is difficult, and we cannot be certain that the steps we have
taken will prevent unauthorized use of our mapping technology, particularly in
foreign countries where the laws may not protect our proprietary rights as fully
as in the United States. If there is significant copying of our maps by
competitors or others, we might experience decreases in sales and sales growth
of our mapping products.
Our maps could be defective, which could result in decreased sales and growth
prospects
Although we conduct testing of our products, we may not discover software
defects that affect our current or new products until after they are sold. In
addition, any defect in other software or hardware with which our software
interacts could be mistakenly attributed to our software by our customers or
their end-users. These defects or perceptions of defects could cause our
customers and their end-users to experience service interruptions. Service
interruptions could damage our reputation or increase our product development
costs, divert our product development resources, cause us to lose revenue, or
delay market acceptance of our products, any of which could harm our business,
financial condition and results of operations.
<PAGE>
Defective maps may subject us to product liability claims, which claims could
damage our financial position
We may be subject to product liability claims for defective computer maps. We do
not have product liability insurance. A successful liability claim brought
against us could be costly, which could harm our business, financial condition
and results of operations.
Risks related to the internet
A reduction in the growth of or slowdown in internet usage could adversely
impact our growth
The computer mapping industry is new and rapidly evolving and delivered
primarily by means of the internet. Our business would be adversely affected if
usage of the internet does not continue to grow. Web usage may be inhibited for
a number of reasons, including inadequate internet infrastructure, security
concerns, inconsistent quality of service or an unavailability of
cost-effective, high-speed service.
If web usage grows, the existing internet infrastructure may not be able to
support the demands placed on it by this growth, or its performance and
reliability may decline. In addition, websites have experienced a variety of
interruptions in their service as a result of outages and other delays occurring
throughout the internet network infrastructure. If these outages or delays
frequently occur in the future, web usage could grow slowly or decline.
We could face regulatory burdens related to the internet, which could decrease
our growth
New internet legislation or regulation, or the application of existing laws and
regulations to the internet, could harm our business, financial condition and
results of operations. We are subject to regulations applicable to businesses
generally and laws or regulations directly applicable to communications over the
internet. Although there are currently few laws and regulations directly
applicable to the internet, it is possible that a number of laws and regulations
may be adopted with respect to the internet, covering issues such as user
privacy, pricing, content, copyrights, distribution, antitrust, taxation and
characteristics and quality of products and services. The burden of compliance
with any additional laws or regulations regarding the internet may decrease
our growth directly or decrease growth of the internet, which could, in turn,
decrease the demand for computer mapping.
Risks related to this offering
There is no public market for E-City stock and one might never develop
Prior to this offering, you could not buy or sell our common stock publicly. An
active public market for our common stock may not develop or be sustained after
the offering. We do not have an underwriter nor do we anticipate that one will
be present to assist in the development of a public market or to support the
markets with current information about E-City. There can be no assurance that we
will be successful in developing a public market for E-City stock.
Our stock price could decline because of changes in market valuations of
internet software companies in general and computer mapping companies in
particular
Because our growth is dependent on the continued growth and market acceptance of
internet software companies in general and computer mapping companies in
particular, our stock price may decline if either of these industries
experiences decreases in market valuations. Decreases in market valuations of
both internet software companies and computer mapping companies have occurred
recently and may continue to do so in the future. It is likely that these
decreases in market valuation could have a negative impact on our stock price.
A significant positive announcement by our competitors may have a negative
impact on our stock price
Because start-up and early stage companies are often given market valuations
based on their future earning and growth prospects, these companies stock price
can be negatively impacted when a competitor announces a significant positive
event. If one of our competitors were to announce a significant contract,
acquisition, strategic partnership, joint venture or capital commitment, the
market may regard our competitive position as weakened and our stock price may
decline as a result.
Future sales of our common stock may have a negative effect on our stock price
It is contemplated that E-City will engage in future sales of its common stock.
These future sales may have a negative impact on our market price due to fears
of increased supply or because the market reacts negatively to the terms or
pricing of a contemplated future issuance.
Our determination of the offering price is arbitrary
The offering price of $5.00 per share has been arbitrarily determined by us.
This price bears no relation to our assets, book value, or any other customary
investment criteria, including our prior operating history. The price per share
in this offering is substantially above its net tangible book value, and we
cannot assure you that the price will accurately reflect a market price for the
shares. See "Determination of offering price" for more information.
Our stock price is likely to be volatile
The price of shares sold in an initial public offering is frequently subject to
significant volatility for a period of time following the initial public
offering. This has held true for companies in the computer mapping space.
Insiders will continue to have substantial control over E-City after the
offering that could delay or prevent a beneficial change in corporate control
We anticipate that the executive officers, directors and entities affiliated
with them will, in the aggregate, beneficially own approximately 22% of our
outstanding common stock following the completion of this offering. If these
stockholders acted together, they would be able to exercise significant control
over all matters requiring approval by our stockholders, including the election
of directors and the approval of mergers or other business combination
transactions, which may have the effect of delaying or preventing a third party
from acquiring control over us, even if such a transaction would be beneficial
to the shareholders.
A beneficial change of control might be prevented or delayed due to Nevada law
or our ability to issue preferred stock
We are a Nevada corporation. Anti-takeover provisions of Nevada law could make
it more difficult for a third party to acquire control of us, even if such
change in control would be beneficial to stockholders. Our board of directors
may issue preferred stock without stockholder approval. The issuance of
preferred stock could make it more difficult for a third party to acquire us.
All of the foregoing could adversely affect prevailing market prices for our
common stock.
Our current stockholders could sell a substantial volume of our shares, possibly
depressing our stock price
Our current stockholders hold a substantial number of shares, which they will be
able to sell in the public market in this offering. Sales of a substantial
number of shares of our common stock after this offering could cause our stock
price to fall due to an increase in supply of our shares to the public
markets. Demand may not be sufficient for our shares to absorb these shares
without a significant decline in our stock price.
The OTC Bulletin Board is highly volatile
We intend to apply for admission to trading of our shares on the OTC Bulletin
Board. The Bulletin Board has a limited operating history and is characterized
by high volatility. Also, the OTC Bulletin Board does not have the same listing
requirements as other exchanges whose requirements may tend to decrease
volatility. Many companies listed on the OTC Bulletin Board have experienced
enormous volatility and price swings and many OTC Bulletin Board stocks have
experienced rapid and substantial declines in their stock prices.
There is substantial doubt about our ability to continue as a going concern
Our independent auditors have indicated in their audit report a substantial
doubt about our ability to continue as a going concern due to lack of sufficient
working capital and historical losses. Our working capital is severely limited
and we have sustained large losses. We may not have enough working capital to
survive or to sustain further losses and our business might fail as a result.
Special note regarding forward-looking statements
Some of the statements under "Prospectus Summary," "Risk Factors," "Plan of
Operation," "Business," and elsewhere in this prospectus constitute
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue" or the negative of these terms or other
comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform these statements to actual results.
Use of proceeds
The proceeds from the sale of shares of our common stock will be received
directly by the selling stockholders. We will receive no proceeds from the sale
of the common stock offered under this prospectus.
Determination of the offering price
We have arbitrarily determined the offering price of $5.00 per share for the
shares. This price bears no relation to our assets, book value, or any other
customary investment criteria, including our prior operating history. Among
factors considered by us in determining the offering price were:
o Estimates of our business potential;
o Our limited financial resources;
o The amount of equity desired to be retained by present stockholders;
o The amount of dilution to the public; and
o The general condition of the securities markets.
Nevada law and certain provisions of our articles of incorporation and bylaws
Certain provisions of Nevada law and our articles of incorporation and bylaws
could make it more difficult to acquire us by means of a tender offer, a proxy
contest or otherwise and the removal of incumbent officers and directors. These
provisions are expected to discourage certain types of coercive takeover
practices and inadequate takeover bids and to encourage persons seeking to
acquire control of us to first negotiate with us. We believe that the benefits
of increased protection of our potential ability to negotiate with the proponent
of an unfriendly or unsolicited proposal to acquire or restructure us outweigh
the disadvantages of discouraging takeover or acquisition proposals because,
among other things, negotiation of their proposals could result in an
improvement of their terms.
Transfer agent and registrar
The transfer agent and registrar for the common stock is Pacific Stock Transfer.
Plan of distribution
This prospectus covers the resale by selling stockholders of shares of our
common stock that they have already purchased from us. Selling stockholders may
sell their shares of common stock either directly or through a broker-dealer in
one or more of the following kinds of transactions:
o Transactions in the over-the-counter market;
o Transactions on a stock exchange that lists our common stock; or
o Transactions negotiated between selling stockholders and purchasers,
or otherwise.
Broker-dealers may purchase shares directly from a selling stockholder or sell
shares to someone else on behalf of a selling shareholder. Broker-dealers may
charge commissions to both selling stockholders selling common stock, and
purchasers buying shares sold by a selling stockholder. If a broker buys shares
directly from a selling stockholder, the broker may resell the shares through
another broker, and the other broker may receive compensation from the selling
stockholder for the resale. To the extent required by laws, regulations or
agreements we have made, we will file a prospectus supplement during the time
the selling stockholders are offering or selling shares covered by this
prospectus in order to add or correct important information about the plan of
distribution for the shares and in accordance with our obligation to file
post-effective amendments to the prospectus as required by Item 512 of
Regulation S-B. In addition to any other applicable laws or regulations, selling
stockholders must comply with regulations relating to distributions by selling
stockholders, including Regulation M under the Securities Exchange Act of 1934.
Regulation M prohibits selling stockholders from offering to purchase and
purchasing our common stock at certain periods of time surrounding their sales
of shares of our common stock under this prospectus. Some states may require
that registration, exemption from registration or notification requirements be
met before selling stockholders may sell their common stock. Some states may
also require selling stockholders to sell their common stock only through
broker-dealers.
Legal proceedings
We are not a party to any legal proceedings.
Executive officers and directors
Our executive officers and directors and their ages, as of October 31, 2000, are
as follows:
Executive officers
Anis Jessa - 47 chief executive officer, interim chief financial officer,
director, member of audit and compensation committees
Salim Devji - 29 chief technology officer, director, member of audit and
compensation committees
Robin Moulder - 34 chief operating officer, director, member of audit and
compensation committees
Susan Polmar - 32 chief marketing officer
All directors of E-City hold office until the next annual meeting of
stockholders of E-City or until their successors are elected and qualified.
Executive officers and directors:
Anis Jessa, chief executive officer, interim chief financial officer and
director
Mr. Jessa served as president and director of Cityscape.com from February,
1999 until July, 2000. As president of Cityscape.com, Mr. Jessa was responsible
for product development, strategic alliances and key account management. Mr.
Jessa helped guide Cityscape from startup to its current state as a major
national portal city guide website. From June, 1997 until March, 1999, Mr. Jessa
served as president of Cabtop Media Inc., an outdoor media company that Mr.Jessa
was responsible for creating. Mr. Jessa continues to serve as a director of
Cabtop Media and has since June, 1997. From September of 1989 until June of
1997, Mr. Jessa was employed as leasing manager for Ocean Park Ford in British
Columbia.
Salim Devji, chief technology officer and director
Mr. Devji has served as project manager for Butterfly Software since March,
1999. As project manager for Butterfly, Mr. Devji is responsible for overseeing
production of Butterfly's interactive three dimensional city guides on CD-ROM
and managing the software development team. From 1997 until 1999, Mr. Devji
served as president of Web Spinner Multimedia, a company that specialized in
providing internet consulting services to businesses. From 1994 until 1997, Mr.
Devji served as network administrator for Delta View Habilitation Center. Mr.
Devji is proficient in many programming languages and has extensive knowledge of
hardware, software and networking. Mr. Devji has over five years experience in
software engineering and received his Bachelors of Science degree in Computer
Science from the University of British Columbia in 1999. Mr. Devji received his
diploma in Business Administration from B.C. Institute of Technology in 1992.
Mr. Devji has extensive experience and expertise in the areas of software
engineering, artificial intelligence, modeling systems, file transfer protocols,
file encryption and compression.
Robin Moulder, chief operating officer and director.
From January 2000 until June of 2000, Ms. Moulder served as President of Cubicle
8, a technology incubator in Santa Monica, California. As President of Cubicle
8, Ms. Moulder was responsible for the day-to-day operations and project
management. From September of 1997 until January of 2000, Ms. Moulder was
employed as a software engineer and project manger at Imaging Diagnostics, Inc.
From 1995 until 1997 she was employed as a senior software engineer at
Fibercorp, Inc., a telecommunications-engineering corporation. She is a former
engineer for such companies as Motorola, Dow Corning Wright and Belzona. She has
knowledge of numerous operating systems, including Windows NT, OS/2, embedded
systems, and Macintosh, and has an in-depth focus on Macintosh, Windows GUI
programming, digital hardware design, Laser Tomography systems and embedded
systems development tools - including emulators, logic analyzer and other
equipment.
Susan Polmar, chief marketing officer.
From September, 1999 until June of 2000, Ms. Polmar served as Marketing Manager
for All-Life.com, an internet start-up. As Marketing Manager for All-Life.com,
Mrs. Polmar was responsible for advertising for All-life websites and print
magazine as well as developing strategic business partnerships for promotions
and magazine distribution. From 1993 until 1999, Ms. Polmar served in various
marketing capacities at the Daily Racing Forum. When she left the Daily Racing
Forum, Ms. Polmar was the promotions manager. Mrs. Polmar graduated from Arizona
State University with a degree in Journalism and Public Relations in 1992.
Board of directors
Our Board of directors currently consists of 3 members. Each director holds
office until his or her term expires or until his or her successor is duly
elected and qualified.
Board committees
The board of directors has established a compensation committee. The
compensation committee consists of Mr. Jessa, Ms. Moulder and Mr. Devji. The
compensation committee makes recommendations regarding our equity compensation
plans and makes decisions concerning salaries and incentive compensation for our
employees and consultants.
The board of directors has established an audit committee. The audit
committee consists of directors Mr. Jessa, Ms. Moulder and Mr. Devji. The audit
committee makes recommendations to the board of directors regarding the
selection of independent auditors, reviews the results and scope of the audit
and other services provided by our independent auditors and reviews and
evaluates our audit and control functions.
Director compensation.
Our directors do not currently receive any cash compensation for services on the
board of directors or any committee thereof, but directors may be reimbursed for
expenses in connection with attendance at board and committee meetings.
Executive compensation
The following table presents the compensation earned, awarded or paid for
services rendered to us in all capacities since the commencement of our
operations by our Chief executive officer, there are no other executive officers
that earned more than $100,000 in salary and bonus since commencement of
operations.
<PAGE>
Summary compensation table
Long-term compensation
Annual compensation awards
------------------- ----------------------
Name, Other Restricted Securities
principal annual stock underlying All other
position Salary($) Bonus($) compensation($) award(s)($) options(#) compensation
Anis
Jessa $60,000* 0 0 0 0 0
Anis Jessa has not yet drawn any salary from E-City. It is anticipated that
Mr. Jessa will begin taking a salary of $60,000 beginning January 1, 2001. Mr.
Jessa is not entitled to any reimbursement for the salary he has elected to
forego.
Option grants since inception and aggregate option exercises during last fiscal
year and fiscal year-end option values.
Since inception, we have not granted any stock options to any individual,
including our chief executive officer. We anticipate granting options to various
employees, directors and consultants. Any such grants will be made at an
exercise price equal to the fair market value of our common stock as determined
by our board of directors.
We have no employment agreements with any of our employees.
Employee benefit plans
We do not currently have any employee benefit plans.
Limitations on directors' and officers' liability and indemnification
The limitation of our director's liability does not apply to liabilities arising
under the federal securities laws and does not affect the availability of
equitable remedies such as injunctive relief or rescission.
Our bylaws provide that we shall indemnify our directors and executive officers
and may indemnify our other officers and employees to the fullest extent
permitted by law. We believe that indemnification under our bylaws covers at
least negligence and gross negligence on the part of indemnified parties. Our
bylaws also permit us to secure insurance on behalf of any officer, director,
employee or other agent for any liability arising out of his or her actions in
such capacity, regardless of whether our bylaws would permit indemnification.
We are entering into indemnification agreements with each of our officers and
directors containing provisions that require us to, among other things,
indemnify our officers and directors against liabilities that may arise by
reason of their status or service as directors or officers, other than
liabilities arising from willful misconduct of a culpable nature, to advance
their expenses incurred as a result of any proceeding against them for which
they could be indemnified, and to cover our directors and officers under any of
our liability insurance policies applicable to our directors and officers. We
believe that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.
The limitation on liability and indemnification provisions in our articles of
incorporation and bylaws may discourage stockholders from bringing a lawsuit
against our directors for breach of their fiduciary duty and may reduce the
likelihood of derivative litigation against our directors and officers, even
though a derivative action, if successful, might otherwise benefit us and our
stockholders. A stockholder's investment in us may be adversely affected to the
extent we pay the costs of settlement or damage awards against our directors and
officers under these indemnification provisions.
At present, there is no pending litigation or proceeding involving any of our
directors, officers or employees in which indemnification is sought, nor are we
aware of any threatened litigation that may result in claims for
indemnification.
<PAGE>
Security ownership of certain beneficial owners and management principal and
selling stockholders
The following table sets forth information regarding the beneficial ownership of
our common stock as of October 31, 2000, and as adjusted to reflect the sale of
common stock offered by this prospectus, by:
o each named executive officer;
o each of our directors;
o each person or group of affiliated persons who is
known by us to own beneficially 5% or more of our common stock;
o all current directors and executive officers as a group; and
o each selling stockholder
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of October 31, 2000, are deemed
outstanding. These shares, however, are not deemed outstanding for purposes of
computing percentage ownership of each other person. As of October 31, 2000, no
individual listed in the table below owned any options or warrants to purchase
any of our common or preferred stock.
Except as indicated in the footnotes to this table and as required under
applicable community property laws, each stockholder named in the table has sole
voting and investment power with respect to the shares shown as beneficially
owned by them. This table also includes shares owned by a spouse as community
property. Percentage of ownership is based on 4,965,000 shares of common stock
outstanding on October 31, 2000 and 4,965,000 shares of common stock outstanding
after completion of this offering. Unless otherwise indicated, the address of
each of the individuals named below is 1201 First Avenue South, Suite 330,
Seattle, WA 98134.
This prospectus relates to the offering by the selling stockholders for resale
of shares of our common stock acquired by them in private placements and other
transactions. All of the shares of common stock offered by this prospectus are
being offered by the selling stockholders for their own accounts. The following
table also includes information with respect to the common stock beneficially
owned by the selling stockholders as of the date of this prospectus. The selling
stockholders provided us the information included in the table below. To our
knowledge, each of the selling stockholders has sole voting and investment power
over the shares of common stock listed in the table below. Additionally, the
following table assumes the sale of all shares of common stock offered by this
prospectus; however, as the selling stockholders can offer all, some or none of
their shares of common stock, no definitive estimate can be given as to the
number of shares that the selling stockholders will hold after the offering.
<PAGE>
Name and address of beneficial owner offering
Executive
officers
Title of class Name and Address of Amount and nature of Percent of class
beneficial owner beneficial owner
Common Anis Jessa (1) 962,250 19.4
14213 SE 63rd St.
Bellevue, WA 98006
Common Salim Devji 200,000 4.0
3803 96th St.
Delta, B.C. V6A 1A4
Common Robin Moulder 20,000 0.4
670 N. Wilton Pl.
Hollywood, CA 90004
Common Susan Polmar 5,000 0.1
28 Bucanneer Ave.Apt B,
Marina Del Rey, CA 90292
Directors
Title of class Name and Address of Amount and nature of Percent of class
beneficial owner beneficial owner
Common Anis Jessa (1)
14213 SE 63rd St.
Bellevue, WA 98006 962,250 19.4
Common Salim Devji
3803 96th St.
Delta, B.C. V6A 1A4 200,000 4.0
Common Robin Moulder
670 N. Wilton Pl.
Hollywood, CA 90004 20,000 0.4
<PAGE>
Directors, executive officers as a group
Title of class Name and Address of Amount and nature of Percent of class
beneficial owner beneficial owner
Common Anis Jessa (1)
14213 SE 63rd St.
Bellevue, WA 98006 962,250 19.4
Common Salim Devji
3803 96th St.
Delta, B.C. V6A 1A4 200,000 4.0
Common Robin Moulder
670 N. Wilton Pl.
Hollywood, CA 90004 20,000 0.4
Common Susan Polmar 5,000 0.1
28 Bucanneer Ave.Apt B,
Marina Del Rey, CA 90292
5% beneficial owners
Title of class Name and Address of Amount and nature of Percent of class
beneficial owner beneficial owner
Common Anis Jessa (1) 962,250 19.4
14213 SE 63rd St.
Bellevue,WA 98006
Common Shabnam Jessa (1) 962,250 19.4
14213 SE 63rd St.
Bellevue,WA 98006
Common Park Bench, LLC(2) 618,670 12.5
Principal:
Patricia Burgmann
#1077
5353 W. Desert Inn Rd.
Las Vegas, NV 89146
<PAGE>
Selling shareholders
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
Anis Jessa (1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Salim Devji
3803 96th St.
Delta,
B.C.V6A 1A4 200,000 4.0 100,000 100,000 2.0
Robin Moulder
670 N. Wilton Pl.
Hollywood,
CA 90004 20,000 0.4 10,000 10,000 0.2
Susan Polmar
28 Bucanneer Ave.
Apt B,
Marina Del Rey,
CA 90292 5,000 0.1 2,500 2,500 0.05
Kirk Roberts(2)
#1012 5353
W. Desert Inn Rd.
Las Vegas,
NV 200,000 4.0 200,000 0 0
Park Bench,LLC(2)
Director
and principal: 618,670 12.5 618,670 0 0
Patricia Burgmann
#1077
5353 W. Desert Inn Rd.
Las Vegas, NV 89146
Pacific View Holdings
Principals: Daryl Brooks
Merrilyn Brooks
16795 Fraser Hwy
Surrey, BC,
Canada V3S2X6 25,000 0.5 0 25,000 0.5
Gord Hartshorne(2)
2755 165th St.
Surrey,BC,
Canada V4P2L8 10,000 0.2 10,000 0 0
Derek Radstaak(2)
6060 185th St.
Surrey,BC,
Canada V3S5P7 2,500 0 2,500 0 0
CheryI Tingstad(2)
9462 205A St.
Langley, BC,
Canada V1M1Y9 8,500 0.2 8,500 0 0
<PAGE>
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
Doug Miller(2)
9462 205A St.
Langley, BC,
Canada V1M1Y9 1,750 0 1,750 0 0
481331 B.C. Ltd.(2)
Principals:
Jaddave Shokar
Gurmit Shokar
5857 152nd St.
Surrey, BC,
Canada V3S 3K4 22,000 0.4 22,000 0 0
Ranchland
Contracting Ltd.(2)
Principals:
Matthew Brooks
Rod Farquharson
16795 Fraser Hwy.
Surrey, BC,
Canada V3S 2X6 67,500 1.4 67,500 0 0
Miranda Ronse(2)
21155 43A. Ave.
Langley, BC,
Canada V3A8L8 25,000 0.5 25,000 0 0
Leo Ronse(2)
21155 43A. Ave.
Langley, BC,
Canada V3A8L8 2,500 0 2,500 0 0
Rod Froehler(2)
21865 6th Ave.
Langley, BC,
Canada V3A7R2 30,900 0.6 30,900 0 0
Rod Farquharson(2)
20127 50th Ave.
Langley, BC,
Canada V3A3S8 1,000 0 1,000 0 0
Greg Phoenix(2)
15512 37A St.
Surrey, BC,
Canada V4B3G6 11,000 0.2 11,000 0 0
Derek Phoenix(2)
20206 43rd Ave.
Langley, BC,
Canada V3A7Z2 6,000 0.1 6,000 0 0
<PAGE>
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
Elizabeth Phoenix(2)
20206 43rd Ave.
Langley, BC,
Canada V3A7Z2 6,000 0.1 6,000 0 0
Tracy Phoenix(2)
20206 43rd Ave.
Langley, BC,
Canada V3A7Z2 1,500 0 1,500 0 0
David Brown(2)
12736 14B Ave.
Surrey, BC,
Canada V4A1J9 500 0 500 0 0
Paul Thompson(2)
21123 45A Cres.
Langley, BC,
Canada V3A8P9 500 0 500 0 0
Kenneth Roberts(2)
9340 207A Ave.
Langley, BC,
Canada V1M2W7 2,000 0 2,000 0 0
Kristine Ponte(2)
9340 207A Ave.
Langley, BC, Canada
V1M2W7 5,000 0.1 5,000 0 0
Mike Dwyer(2)
8198 196th St.
Langley, BC,
Canada V3A6Y3 5,000 0.1 5,000 0 0
Patricia Dwyer(2)
8198 196th St.
Langley, BC,
Canada V3A6Y3 5,000 0.1 5,000 0 0
Garry Haverty(2)
5921 133rd St.
Surrey,BC,
Canada V3X2N6 13,000 0.3 13,000 0 0
Kirby Helliwell(2)
5929 133rd St.
Surrey, BC,
Canada V3X2N6 13,000 0.3 13,000 0 0
Tony Miniaci(2)
8237 Haffner Ter.,
Mission,BC,
Canada V2V6T5 5,000 0.1 5,000 0 0
<PAGE>
Selling shareholders
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
Michael Kelly(2)
1076 Jensen Cir.
Pittsburg,
CA 94565 110,000 2.2 110,000 0 0
George Shinbo(2)
2812 Boyer E.
Seattle,
WA 98102 15,000 3.0 15,000 0 0
Paul Kugler(2)
270 E. Flamingo
Unit#308,
Las Vegas,
NV 89109 225,000 4.5 225,000 0 0
Shabnam Jessa(1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Mohamed Azim Jessa
Irrevocable Trust(1)
14213 SE 63rd St.
Bellevue, WA 98006 75,000 1.5 75,000 0 0
Irrevocable Aliyah
Jessa Trust(1)
14213 SE 63rd St.
Bellevue, WA 98006 75,000 1.5 75,000 0 0
Elle Holdings Ltd.(2)
Director:
Temple Directors Ltd.
Principal: Doug Byblow
P.O. Box 228 Temple
Building, Leeward Hwy
Providenciales,
Turks & Caicos
Island 50,000 1.0 50,000 0 0
Zinnat Mohamedali
Gulamhusein (1)
7 Liphook Cres.
London, England
S.E. 23 3BN 12,500 0.3 12,500 0 0
Zehra Claire
Visram(1)
81 Rue Des
Sept Arpents,
Luxembourg 5,000 0.1 5,000 0 0
<PAGE>
Selling shareholders
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
Fidahusein Jessa(1)
133 Marion Avenue,
Stanmore, Middlesex,
England 5,000 0.1 5,000 0 0
Al Sedgewick(2)
13698 Coldicutt Ave.
Whiterock, BC,
Canada V4B3A9 5,000 0.1 5,000 0 0
Martin Malus(2)
#6 2833 Oak St.
Vancouver, B.C.
V6H 2K4 10,000 0.2 10,000 0 0
Wynand Investments(2)
Principal:
Jonathan Dariyanani
2035 Monroe St.
Hollywood,
FL 33020 150,000 3.0 150,000 0 0
Birchfield
International Ltd.(2)
Director and principal:
Charlene Wells
Dehands House 2nd Terrace
W. P.O. Box.
N 7120 Nassau,
Bahamas 233,180 4.7 233,180 0 0
Empire Builders,Inc.(2)
Principal: Rod Froehler
2035 Monroe St.
Hollywood,
FL 33020 200,000 4.0 200,000 0 0
VCBM Company Ltd.(2)
Director and principal:
Claudette Sands
Dehands House
2nd Terrace
W. P.O. Box.
N 7120 0
Nassau, Bahamas 200,000 4.0 200,000 0 0
<PAGE>
Selling shareholders
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
MC Corp Ltd.(2)
Dehands House
2nd Terrace W. P.O.
Box. N 0
7120 Nassau,
Bahamas 200,000 4.0 200,000 0 0
BAS Ltd.(2)
Director and principal:
Macgregor Robertson
Dehands House
2nd Terrace W. P.O.
Box. N 7120 0
Nassau, Bahamas 50,000 1.0 50,000 0 0
Deklite Ltd.(2)
Director and principal:
Macgregor Robertson
Dehands House
2nd Terrace W.
P.O. Box. N 0
7120 Nassau,
Bahamas 50,000 1.0 50,000 0 0
Handsome Enterprises Ltd.(2)
Director and principal:
Macgregor Robertson
Dehands House
2nd Terrace W. 0
P.O. Box. N 7120
Nassau, Bahamas 50,000 1.0 50,000 0 0
Monica Pulver(2)
2035 Monroe St.
Hollywood, FL 33020 5,000 0.1 5,000 0 0
Beatrice Stockwell(2)
19201 40th Ave W.
Lynnwood, WA 98036 1,000 0 1,000 0 0
(1) Affiliates of Anis Jessa
(2) Transferees and Donees of Anis Jessa
<PAGE>
Description of securities
Current capital structure
As of the date of this prospectus, we have 50,000,000 shares of common stock,
par value $0.0001, authorized, with 4,965,000 shares outstanding held of record
by 52 stockholders.
Description of capital stock
Upon the closing of this offering, we will be authorized to issue 50,000,000
shares of common stock, $0.0001 par value. The following description of our
capital stock does not purport to be complete and is subject to and qualified by
our articles of incorporation and bylaws, which are included as exhibits to the
Registration Statement of which this prospectus forms a part, and by the
provisions of applicable Nevada law.
Common stock
As of October 31, 2000, there were 4,965,000 shares of common stock outstanding.
The holders of common stock are entitled to one vote per share on all matters to
be voted upon by the stockholders. Subject to preferences that may be applicable
to any outstanding preferred stock, the holders of common stock are entitled to
receive ratably dividends, if any, as may be declared from time to time by the
board of directors out of funds legally available for that purpose. See
"Dividend Policy." In the event of a liquidation, dissolution or winding up of
E-City, the holders of common stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior distribution rights of
preferred stock, if any, then outstanding. There is no cumulative voting with
respect to the election of directors, with the result that the holders of more
than 50 percent of the shares voted for the election of directors can elect all
of the directors. The common stock has no preemptive or conversion rights or
other subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully
paid and non-assessable, and the shares of common stock to be issued upon the
closing of this offering will be fully paid and non-assessable.
Preferred stock
The board of directors has the authority, without action by our stockholders, to
designate and issue preferred stock in one or more series and to designate the
rights, preferences and privileges of each series, any or all of which may be
greater than the rights of the common stock. The effect of the issuance of any
shares of preferred stock upon the rights of holders of the common stock might
include, among other things, restricting dividends on the common stock, diluting
the voting power of the common stock, impairing the liquidation rights of the
common stock and delaying or preventing a change in control of E-City without
further action by the stockholders.
We have yet to authorize any preferred stock. Our board of directors is
empowered, without stockholder approval, to issue series of preferred stock with
any designations, rights and preferences as they may from time to time
determine. Thus, preferred stock, if issued, could have dividend, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the common stock. Preferred stock, if issued, could be
utilized, under special circumstances, as a method of discouraging, delaying or
preventing a change in control of our business.
Registration rights
None.
Options
We currently have no options exercisable for our common stock available for
grant. We do not presently have any warrants authorized. Our board of directors
may later determine to grant such options and authorize warrants.
Dividend policy
We have not paid any cash dividends since our inception and do not intend to pay
any cash dividends in the foreseeable future.
<PAGE>
Capitalization
The following table sets forth our capitalization as of September 30th, 2000:
o on an actual basis; and
o on an as adjusted to basis to give effect to the sale of 3,853,000 shares of
our common stock in this offering at an assumed initial public offering price of
$5.00 per share, after deducting estimated commissions and estimated offering
expenses payable by us. The outstanding share information excludes:
o Option shares. No options have been issued or authorized to date.
You should read this table with "Plan of operation" and the Financial Statements
and the related notes. See "Use of proceeds" and "Management."
As of September 30, 2000
(Unaudited)
Actual As adjusted
------------------------------------------------
Long-term obligations,
less current portion...................... $0 $0
Stockholders' equity:
Common stock, $.0001 par value,
50,000,000 shares authorized,
4,965,000 shares issued; 4,965,000
outstanding actual; .................... $497 $497
Additional paid-in capital................ $0 $0
Deferred stock compensation............... $0 $0
Additional paid-in capital................ $0 $0
Accumulated income....................$57,328 $57,328
Accumulated other
Comprehensive loss .................. $(9,767) $(9,767)
Total stockholders' equity........... $48,058 $48,058
Interest of named experts and counsel
The validity of the common stock offered in this registration statement
will be passed upon for us by Jonathan Ram Dariyanani Esq., Los Angeles, CA. Mr.
Dariyanani is a beneficial owner of 150,000 common shares of E-City Software.
Hansen, Barnett & Maxwell, Certified Public Accountants have audited our
financial statements, for the years ended March 31, 2000 and 1999, as set forth
in their report. We have included our financial statements in the prospectus and
elsewhere in the registration statement in reliance on their report, given upon
the authority of such firm as experts in accounting and auditing. Hansen,
Barnett & Maxwell, Certified Public Accountants, will not receive any direct or
indirect interest in E-City Software.
Changes in and disagreements with accounts on accounting and financial
disclosure
There are no disagreements with the accountants on accounting policies or
financial disclosure.
<PAGE>
Disclosure of commission position on indemnification for securities act
The limitation of our director's liability does not apply to liabilities arising
under the federal securities laws and does not affect the availability of
equitable remedies such as injunctive relief or rescission.
Regarding indemnification for liabilities arising under the Securities Act of
1933 for directors, officers and controlling persons of E-City Software; E-City
Software has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is unenforceable.
Description of business
Overview
E-City is a development stage computer mapping company. Computer mapping uses
digital versions of maps to produce maps on computer, which may be viewed on
CD-ROM or over the internet or which may in turn be developed into digitally
produced paper maps for publication and sale. Some computer mapping technology
allows users to interact with the maps in limited ways, allowing them to zoom in
closer or farther away from a particular object or section of the map using
functions contained on the computer map. Users can also customize some computer
maps to their preferences, specifying scale, how roads are identified, or other
features, such as color. E-City has produced a style of computer mapping which
includes drawings of buildings, features and landscapes on to the computer map
of streets and cities. These buildings and landmarks are easy to recognize and
facilitate the ability of drivers, pedestrians or tourists to orient themselves
and navigate a particular urban area. E-City has produced these computer maps
for three major US cities. In general, the computer mapping industry has focused
on developing maps that depict streets and intersections without buildings or
landmarks, or with only a symbol indicating a building or landmark. E-City has
taken the approach that consumers would desire a city view that contains certain
building and landmark information in a way that is easy to recognize. The
computer mapping industry is a fairly new industry. Most computer maps are
viewed on a free-of-charge basis to consumers visiting websites or requesting
driving directions on the internet. These maps are developed and paid for
generally either by websites who charge a fee to advertisers to show
advertisements to consumers who are looking for maps or by businesses operating
a website on the internet who pay computer mapping providers to provide location
and direction maps to visitors to their corporate sites.
History and form of organization
E-City Software, Inc. is a development stage Nevada corporation formed on May
12, 2000 for the purpose of developing and commercializing computer mapping
products in cd-rom format and on the internet. Our subsidiary, Butterfly
Software, Inc., a British Columbia corporation, was formed on November 8, 1998
for the purpose of producing computerized maps. In its original conception,
Butterfly was to make computerized maps in the form of maps of popular tourist
destinations which it planned to sell to wholesale and retail customers on
CD-ROM in a screen saver format. In September of 1999, Butterfly changed its
business model and began focusing on the delivery of computer maps via the
internet, as well as in cd rom format.
Butterfly faced a number of challenges in developing and delivering its' mapping
products. The development process for the maps involves circling a target city
in a helicopter and taking video of the areas to be mapped. Butterfly's in-house
animation staff then draws maps of the area based on the video. These maps are
digitized, colored, streets are labeled and animated features, such as cars
moving across a bridge or people walking, are added. Butterfly faced challenges
in developing a software interface that made the maps easy to navigate and use.
There were also challenges in compressing the maps to a sufficiently low level
of required file storage space to make them practical for transmission over the
internet. Butterfly's internal software developers solved these problems through
experimentation and trial and error and Butterfly is now able to deliver the
maps within acceptable size parameters.
E-City combination with Butterfly Software
Butterfly Software became a wholly owned subsidiary of E-City on August 15,
2000. E-City purchased 100% of the stock of Butterfly Software on August 15,
2000 in exchange for 50,000 shares of common stock of E-City.
E-City's principal products and services
E-City has one service which it is currently engaged in providing. E-City plans
to offer two other products by the first quarter of 2001. The service which
E-City currently provides is the development of computer maps for major
metropolitan areas which are developed for a customer and then provided to that
customer over the internet and on cd- rom. E-City has one such contract with a
customer for the development of 10 major metropolitan areas. E-City has the
capability of developing more cities for individual customers on a contract
basis. E-City has sought out additional customers, but has not yet found any
additional customers for this map development service. When a customer desires
to have E-City build an interactive map of a particular city, E-City will
prepare a pricing bid for that map build. The price that E-City intends to
charge for such services will be determined on a contract-by-contract basis, but
will be based on E-City's actual cost in developing the mapping solution,
including aerial photography, programming, drawing and graphic design, plus a
profit margin of between 0% and 30%, depending on how likely E-City is to be
able to leverage the work that it would be doing on the contract to produce
other revenue, such as revenue from a printed map product derived from the maps
developed under the contract.
In addition to the custom computer map development services described above,
E-City has two other products in development, which it plans to begin selling in
the first quarter of 2001. These are a licensed, on-line version of its maps to
internet websites and a paper map of its completed cities.
E-City intends to license its on-line maps either through resellers or directly
to individual websites. These websites would pay an annual licensing fee to use
E-City maps on their website. E-City intends to offer multiple levels of
animation on these maps, different user interface options, some customization of
the maps, for instance, highlighting a business' physical location on the
electronic map and intends to price these additions as value added services to
be paid for as upgrades to a simple license of E-City's current mapping product.
E-City currently has the ability to license the completed city maps of Seattle,
San Francisco and Las Vegas. E-City will be able to license the cities of
Chicago, Los Angeles, Washington D.C. and Vancouver, B.C., which are track to be
completed by January 2001. E-City also intends to license a less detailed, more
traditional computer map, a so-called two dimensional or 2D map of the United
States in conjunction with licenses of its visually more detailed city maps
which include buildings and landmarks, or three dimensional or 3D maps. E-City
has purchased the technology to provide such 2D maps from a third party provider
under non-negotiated, standard commercial software license terms renewable on a
yearly basis. E-City has then customized these purchased maps so that it can
present them and integrate them for an on-line customers needs. The 2D map
capability is presently ready to be licensed to customers in connection with
E-City's other 3D product.
E-City has not determined a price for its computer map licensing product or the
price of the value added upgrades to such a license. E-City intends to base its
prices on the prevailing market prices for similar services by its competitors,
including Mapquest and Vicinity. Mapquest and Vicinity price similar products
between $1500 and $15,000 per year for each site license, depending on the
number of upgrade options requested. E-City intends to have a similar pricing
structure, depending on market research, feedback from its potential customers,
and the level of interest that it finds in the marketplace for its products.
E-City is in the process of developing a paper map printed version of its
computer city maps. E-City has completed such a paper map for Seattle and Las
Vegas. E-City intends to complete paper maps for San Francisco, Chicago,
Washington DC and Vancouver, B.C. by January 31, 2001. E-City intends to
complete additional paper maps for other cities as it completes market research
on potential cities by the end of the first quarter of 2001. E-City intends to
price these maps at retail for between $5-$8 per map, depending on the feedback
received from potential distributors and potential customers. Depending on the
distribution method which E-City selects, E-City would receive between 33% to
60% of the retail price of the paper maps.
Distribution and marketing methods
Presently, E-City has no distributors of its products. E-City has not yet sold
its custom map development services to anyone other than Cityscape.com. E-City
has not yet sold its computer map licensing product or its paper map product to
anyone. E-City presently makes its custom map development services available to
customers who call, email, write or respond to advertisements on E-City's
websites and through direct telephone sales calls by E-City's sales staff.
E-City intends to make its computer map licensing available through these same
mechanisms. E-City also intends to develop a larger sales force so that it might
be able to sell its computer map licensing services directly to website owners.
E-City is currently looking for strategic partners who might be resellers of the
E-City computer map licensing products. Thus far, E-City has not identified or
successfully negotiated distribution arrangements with any potential resellers
of this service. E-City has not determined how it will price such services with
respect to resellers. Management contemplates that such pricing will be done on
a revenue-share basis, to be negotiated with a reseller once a possible reseller
or resellers have been identified. Such pricing will be determined by the likely
volume of sales a reseller might make, any minimum order commitments a reseller
might give, any synergies the reseller might provide for E-City's other
products, any marketing or brand awareness for E-City that the reseller might
provide, the depth and quality of the reseller's customer base and the number of
offers from competing resellers that E-City receives.
E-City does not currently print or distribute paper maps. E-City intends to
develop a paper map product for sale during the first quarter of 2001. E-City
has not yet determined how such maps will be distributed. E-City intends to
approach wholesale map and magazine distributors and national retail book,
service station and convenience store chains to seek distribution of its printed
map product. E-City has not yet entered into negotiations with any such
distributor. It is contemplated that such distribution arrangements, if
successfully developed, would involve E-City selling paper maps to distributors
at 35-50% of the retail price of those maps and to retailers at 45-60% of the
retail price of those maps.
Status of Products and Services
Currently E-City has computer maps for delivery over the internet and in cd rom
format for San Francisco, Las Vegas and Seattle. These maps are presently
available for viewing on the internet and have been developed under the contract
between E-City and Cityscape.
E-City anticipates that the cities of Los Angeles, Chicago, Washington DC and
Vancouver, B.C. will be completed by January 2001. The cities of Miami, Orlando,
Salt Lake and New York should be completed by June of 2001.
E-City currently offers custom mapping development services to individual
customers on a contract basis. E-City can design, film, illustrate, render and
deliver, in cd rom format and on the internet, customized computerized maps of
any city in the world on a per city contract basis. These maps take between 6
and 12 weeks to develop, depending on the city.
E-City anticipates having the ability to license its already developed custom
mapping products on a per-year license basis to websites in the first quarter of
2001. San Francisco, Seattle and Las Vegas are complete and would be ready for
licensure as soon as E-City determines pricing, distribution, and delivery
methods. E-City anticipates that other cities will be available for license as
follows: Los Angeles and Vancouver, B.C. - December 2000, Chicago and Washington
DC - January 2001.
E-City has developed a prototype printed map for Seattle, San Francisco and Las
Vegas. E-City is currently in the process of seeking printers and distributors
for these maps. No printers or distributors have yet been selected. E-City
anticipates printing maps for these cities and securing distribution for them in
the first quarter of 2001. Thereafter, E-City anticipates printing and
distributing paper maps for each city that E-City develops a computer mapping
solution.
Revenues
At the moment, E-City's only customer is Cityscape.com. Cityscape pays E-City
under a software development contract to develop 10 interactive maps to North
American cities. E-City anticipates that its sources of revenue in the future
will come from sales of its custom mapping development services to websites
under software development agreements similar to the one entered into with
Cityscape.com. E-City also anticipates that revenue will be derived from license
fees for its computer maps to individual websites on an annual license fee
basis. E-City also anticipates that revenue will be generated by sales of
E-City's paper map products.
Competitive conditions, competitive position and methods of competition
The computer mapping market in which we compete is relatively new and our
services are highly specialized. While competition exists for most of our
service offerings, the number of companies with which we compete is relatively
small. We expect competition with our services to increase over time as the
market for our services grows. Competition may also increase as a result of
industry consolidation.
Our map licensing and mapping development services compete with InfoSpace,
MapQuest, Vicinity and Switchboard and, to a lesser degree, with other smaller,
location-based content providers. InfoSpace, MapQuest, Vicinity and Switchboard
have more experience in the field than we do, have established brand
recognition, have successfully developed customers, have significant financial
and human resources and have a wider variety of products which they offer than
we do. It will be very difficult to compete successfully against these
competitors. These competitors have each lost significant sums at their current
level of pricing for services, which means it may be difficult for us to
continue to offer prices competitive with their prices. In addition, while we
believe that the visual depictions of buildings, landmarks and the look and feel
of E-City maps will appeal to some businesses, this visual differentiation may
not be sufficient to attract customers. Furthermore, if we are successful in
cultivating a customer base based on the visual detail presented in E-City maps,
our competitors could add similar features to their products. In addition, with
many potential new clients, an additional competitor to our mapping solution is
the client's own in-house information systems department which may initially
believe that it can duplicate our services at a lower cost. In each competitive
situation that we face, we believe the factors that cause potential clients to
consider our services include the depth of our mapping offerings, the visual
appeal of our maps, the number of cities that we provide coverage for, our
ability to integrate our services into larger marketing initiatives, the quality
and reliability of our services, our speed of implementation and the overall
quality of our technology and client service.
Our printed map products, which we do not currently offer but contemplate
offering in the first quarter of 2001, compete against a number of suppliers of
printed maps. By far, the largest of these printed map companies is Rand
McNally, which has a long established brand, comprehensive distribution, an
enormous product offering and significant human, financial, technical and
strategic resources at its disposal. Rand McNally does not presently offer a
city map which depicts buildings and landmarks with the same detail as E-City's
planned paper maps. However, if we are successful in cultivating a customer base
based on the visual detail presented in E-City maps, our competitors could add
similar features to their products. We are in a difficult competitive position,
being a new entrant in a field that has such an established, well-financed,
highly visible competitive leader. We believe that consumers make paper map
purchasing choices based primarily on ease of availability, price and visual
appeal. Rand McNally makes maps which are widely distributed, reasonably priced
and full-colored. In order to compete successfully in this market, we will have
to establish widespread distribution of our paper map products and consumers
will have to find those products visually appealing.
Dependence on one customer
We are currently dependent on our one customer, Cityscape.com, Inc., for all of
our sales to date. While we anticipate identifying and securing other customers,
we have been unable to do so to date. To date, we have one development contract
with Cityscape.com, Inc. This Software Development Agreement, dated September
15,1999, was originally between 3DCityGuide.com, Inc., which subsequently
changed its' name to Cityscape, and Butterfly Software. The Agreement specifies
payments of $2,000,000.00 from Cityscape to Butterfly beginning August 1, 1999,
with a term of two years. The Agreement requires us to create interactive
mapping solutions for 10 cities. We have realized revenue of $650,000 to date
under the Agreement. The Agreement was assumed by E-City at the closing of the
E-City purchase of Butterfly Software, which occurred on August 15, 2000. We
have completed three cities under the agreement, Seattle, San Francisco and Las
Vegas. We have substantially completed Los Angeles, Vancouver, B.C., Chicago and
Washington DC, and we expect to complete these cities by January 31, 2001. We
anticipate completing the three remaining cities by June 1, 2001.
There can be no assurance that E-City will be successful in gathering customers
other than Cityscape. E-City's potential customers include various industry
segments on the internet, including retail, physicians and dentists, service
providers, governmental offices and industrial concerns.
Research and development
Other than the acquisition of Butterfly Software, E-City has not made an
investment to date in research and development. E-City has developed its
computer mapping process as part of the execution of its obligations under the
Cityscape Software Development Agreement. To the extent that the development of
E-City's mapping process qualifies as research and development, 100% of the
development of its products was borne by E-City's customer. Butterfly Software,
E-City's subsidiary and predecessor entity, spent $99,893 on research and
development.
Proprietary rights and licensing
We rely primarily on a combination of copyrights, licenses, trade secret laws
and restrictions on disclosure to protect our intellectual property and
proprietary rights. We also enter into confidentiality agreements with our
employees and consultants, and generally control access to and distribution of
our internal documentation and other proprietary information. Our only license
that we have granted a customer of our products is the license granted to
Cityscape under the Software Development Agreement. The software that we utilize
in the development of our computer maps is all commercially available software
that we purchase with the standard form of end user license agreement. This
application has not yet been approved or disapproved by any governmental body.
Regulatory environment
The aspect of our business which faces significant governmental regulation or is
likely to face such regulation is the aspect of our computer mapping capability
delivered via the internet and through our website. Within the United States,
the legal landscape for internet privacy is new and rapidly evolving. Collectors
and users of consumer information over the internet face potential tort
liability for public disclosure of private information; and liability under
federal and state fair trade acts when information sharing practices do not
mirror stated privacy policies. Due to the increasing popularity and use of the
internet, it is likely that a growing number of laws and regulations will be
adopted at the international, federal, state and local levels relating to the
internet covering issues such as user privacy, pricing, content, copyrights,
distribution, antitrust and characteristics and quality of services. Further,
the growth and development of the market for activity on the internet may prompt
calls for more stringent consumer protection laws that may impose additional
burdens on those companies conducting business online. The adoption of any
additional laws or regulations may impair the growth of the internet, which
could, in turn, decrease the demand for our services and increase our cost of
doing business. Moreover, the applicability to the internet of existing laws in
various jurisdictions governing issues such as property ownership, sales and
other taxes, libel and personal privacy is uncertain and may take years to
resolve. Any such new legislation or regulation, the application of laws and
regulations from jurisdictions whose laws do not currently apply to our business
or the application of existing laws and regulations to the internet could harm
our business.
Employees and consultants
As of October 31, 2000, we had 16 employees and three consultants, 12 of who
were based at our offices in Vancouver, British Columbia and four of whom are
based out of our offices in Seattle, Washington. None of our employees is
subject to a collective bargaining agreement. We do not have any written
employment agreements with any of our employees. We believe that our relations
with our employees and consultants are good.
Upon completion of this offering, we will become subject to the information and
periodic reporting requirements of the Securities Exchange Act of 1934, and, in
accordance with the requirements of the Securities Exchange Act of 1934, will
file periodic reports, proxy statements and other information with the
Securities and Exchange Commission. These periodic reports, proxy statements and
other information will be available for inspection and copying at the regional
offices, public reference facilities and website of the Securities and Exchange
Commission referred to above.
Plan of operation
The following discussion and analysis of our financial condition and results of
our operations should be read in conjunction with our financial statements and
related notes appearing elsewhere in this prospectus. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties
and assumptions. The actual results may differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including,
but not limited to, those set forth under "Risk factors" and elsewhere in this
prospectus.
Operations
We intend over the next 12 months, to add two new products to our currently
available product offering. Presently, we are in the process of developing 10
computer maps of North American cities under our Software Development Contract
with Cityscape. Our only currently offered product consists of this computer map
product which we can create for potential customers on a city by city basis,
under similar terms as the contract that we entered into with Cityscape.
While we have the ability and staff presently to produce a map of another North
American city every six to eight weeks, we would like to expand that ability to
producing a North American or international city every four weeks. To increase
our development capability and speed will require an additional $250,000 for the
hiring of new developers and the purchase of new equipment.
We would also like to develop a sales force to sell this product to potential
customers, as well as the paper map product and the computer map licensing
product that we have in development. Presently, we have a full-time sales staff
of two people. We would like to expand that sales staff to 10 people, which we
believe would allow us to target potential customers for all three products
effectively. We would also like to advertise our products via the internet,
attendance at trade shows and through print and outdoor media. We estimate that
to expand the sales department and to advertise our products to create awareness
and attract potential customers, we need to spend $500,000 on sales and
marketing over the next twelve months.
We intend to design, print and achieve distribution for our printed map product,
which we expect to begin production of in the first quarter of 2001. In order to
typeset and print a full set of paper maps for our first city, we anticipate
upfront costs of around $15,000 for 50,000 maps. We expect that distribution
costs will run approximately $5000 for the first 50,000 maps. If we are
successful in securing distribution for the first set of printed maps, we
anticipate distributing at least 9 additional paper map products over the course
of the next twelve months. Each new city will cost approximately $20,000 to
print and distribute. We believe that the total budget that we will need to
print and distribute 500,000 maps for 10 cities will be $200,000. Our
anticipated revenues from the sale of paper maps at a wholesale distributor
price of $2.50 to $3.00 per map will be between $1,250,000 and $1,500,000,
assuming that all of the maps were sold.
Cash requirements
Presently, without the sale of additional shares, we do not have sufficient
capital to maintain, grow or continue our operations for the next 12 months. Our
plan of operation is therefore dependent upon our ability to raise capital apart
from this offering. We have less than one month of working capital or cash
available presently. We need to raise additional funds as soon as practicable.
We do not presently have any arrangements or understandings with any investors
or potential investors with respect to an investment in E-City. We have not
decided at what price or under what terms we will raise such additional funds.
The factors that we will utilize in making such a decision include, our success
in developing new customers or strategic partners for E-City, the market
valuation of our competitors, the availability of investments generally for
development stage start-up companies and the feedback that we receive from
potential investors. We intend to target potential customers and potential
strategic partners as possible investors in E-City, though we have not received
any indications of interest so far. If we are unable to raise additional or
sufficient funds for E-City, we will have to abandon our additional hiring
plans, possibly close either our Seattle or Vancouver office to consolidate,
abandon our plan to produce paper maps, reduce staff or salaries, increase the
number of customers, or some combination thereof. These steps may not be
sufficient and we may fail, even with these measures, if we are unsuccessful in
raising additional funds under acceptable terms.
Research and development
We intend to develop an ability over the next twelve months to deliver our maps
via hand held, internet enabled devices, such as a cellular phone or a Palm
Pilot or other personal electronic appliance. We do not yet know how much it
will cost to develop such an ability. We also intend to continue to develop
techniques for compressing our computer maps, shrinking their file size, so that
we might transmit them faster over the world wide web. We do not yet know how
much it will cost to do this. The factors we will use to determine how much
money to spend on research and development will include, feedback from our
customers, the expenditures of our competitors, the availability and terms of
additional financing that we intend to seek, our available cash and general
market conditions.
Plant and equipment
We currently have offices in Seattle, Washington and Vancouver, British
Columbia. Most of our core software development and mapping and animation
technology will be hosted in Vancouver where the employee base is large and
wages are generally lower than in most regions of the United States for software
developers. We would like to expand our Seattle and Vancouver offices if we are
able to hire additional employees and our customer growth supports such an
expansion. According to the growth plan that we have currently, we will need
approximately 5000 additional square feet of office space between the two
facilities. We believe that this space will be available to lease on an already
improved basis and should cost us approximately $60,000 per year in office lease
payments.
Employees
We plan to hire approximately 15 additional developers in the next 12 months to
meet business expansion and continue servicing existing and new clients,
developing existing and new business lines, and augmenting our management,
marketing, sales and business development capacities. We intend to hire an
additional 8 to 10 sales and marketing staff members. This should bring our
total of new hires to around 25 over the course of the next 12 months. We
estimate the average cost of each new hire to be approximately $45,000 per year.
If we are unable to afford to hire so many people, we will scale back our
expansion plans accordingly.
Description of property
Most of our employees are located in an approximately 6,000 square foot facility
in Vancouver, British Columbia. The lease for this facility expires in May,
2002. Our headquarters is located in Seattle, Washington of approximately 600
square feet. This facility is rented on a month-to-month basis with no lease
agreement. We believe that these existing facilities are adequate to meet our
current, foreseeable requirements or that suitable additional or substitute
space will be available on commercially reasonable terms.
<PAGE>
Certain relationships and related party transactions
There has not been, nor is there currently proposed, any transaction or series
of similar transactions to which we were or are to be a party in which the
amount involved exceeds $60,000, and in which any director, executive officer,
holder of more than 5% of our common stock or any member of the immediate family
of any of these people had or will have a direct or indirect material interest
other than compensation agreements and other arrangements, which are described
where required in "Management," and the transactions described below.
E-City advanced a total of $75,412 to Cityscape.com over the period August 1999
to March 2000. The outstanding principal balance of this advance is $75,412.
This advance is non-interest bearing and does not have a specific repayment
term. There is no promissory note or other writing related to this advance.
E-City advanced a total of $15,389 to Anis Jessa over a period of seven months
starting in May of 1999. The outstanding principal balance of this advance is
10,122. This advance is non-interest bearing and does not have a specific
repayment term. There is no promissory note or other writing related to this
advance.
E-City received an advance of funds from the entities listed below which are
owned by several related parties including Matthew Brooks, who is an officer and
controlling shareholder of Cityscape.
E-City received a total of $10,467 as an advance from Ranchland Contracting Ltd.
in August and September of 1999. The outstanding principal balance of this
advance is $10,467. This advance is non-interest bearing and does not have a
specific repayment term. There is no promissory note or other writing related to
this advance. The principals of Ranchland Contracting are Matthew Brooks and Rod
Farquharson.
E-City received an advance of $2,000 from Canwest Roadbuilders Ltd. on August
27, 1999. The outstanding principal balance of this advance is $2000. This
advance is non-interest bearing and does not have a specific repayment term.
There is no promissory note or other writing related to this advance. The
principals of Canwest Roadbuilders are Matthew Brooks, Pasquale Lastoria and
Domenico Macera.
E-City received an advance of $4,000 from 559767 BC Ltd.,on August 27, 1999.
The outstanding principal balance of this advance is $4000. This advance is
non-interest bearing and does not have a specific repayment term. There is
no promissory note or other writing related to this advance. The principals of
559767 BC Ltd. are Matthew Brooks and Domenico Macera.
E-City received an advance totaling $76,671 from Aggressive Roadbuilders Ltd. in
July and August of 1999. The outstanding principal balance of this advance is
$76,671. This advance is non-interest bearing and does not have a specific
repayment term. There is no promissory note or other writing related to this
advance. The principal of Aggressive Roadbuilders is Daryl Brooks. Daryl Brooks
is also an officer and controlling shareholder of Cityscape.
E-City also received an advance from E-City shareholder Pacific View Holdings,
Ltd., an entity owned by Daryl Brooks, a controlling shareholder of Cityscape.
E-City received a total of $54,869 from Pacific View Holdings Ltd. from May 1999
through March of 2000. The outstanding principal balance of this advance is
$54,869. This advance is non-interest bearing and does not have a specific
repayment term. There is no promissory note or other writing related to this
advance.
E-City received an advance from E-City shareholder Kirk Roberts totaling $15,500
in August and September of 2000. The outstanding principal balance of this
advance is $15,500. This advance is non-interest bearing and does not have a
specific repayment term. There is no promissory note or other writing related to
this advance.
Acquisition of Butterfly by E-City - relationship with Cityscape
To date, we have one development contract with Cityscape.com, Inc. This Software
Development Agreement, dated September 15, 1999, was originally between
3DCityguide.com, Inc., the previous name for Cityscape, and Butterfly Software.
The Agreement specifies payments of $2,000,000.00 from Cityscape to Butterfly
over a period of two years, ending August 1, 2001. The Agreement was for the
creation of interactive mapping solutions for 10 cities at an average of
$200,000 per city. There have been payments of approximately $800,000 to date
under the Agreement. The Agreement was assumed by E-City at the closing of the
E-City purchase of Butterfly Software, which occurred on August 15, 2000. E-City
purchased 100% of the stock of Butterfly Software on August 15, 2000 in exchange
for 50,000 shares of common stock of E-City, 25,000 of which will be registered
in this offering by Anis Jessa. Anis Jessa and his affiliates were 50% owners of
Butterfly Software prior to its acquisition by E-City. While the corporation's
conflict of interest policies were observed with respect to E-City's
ratification of this related party transaction, there can be no assurance that
the terms of the transaction were fair to the shareholders of E-City.
We have derived 100% of our revenues since inception from one customer,
Cityscape.com, Inc, a company Chief Executive Anis Jessa used to own
approximately 35% of the issued and outstanding shares. Mr. Jessa also served as
a director of Cityscape until July, 2000.
Anis Jessa currently serves as our chief executive officer. Prior to July, 2000,
Mr. Jessa served as the president of Cityscape.com,Inc. and as a director.
In July of 2000, Mr. Jessa resigned as an officer and director of Cityscape.
Under stock repurchase agreements entered into with other founders of Cityscape,
Mr. Jessa was required to sell his holdings in Cityscape to the other founders
at par value of $0.0001 per share upon his resignation. While Mr. Jessa was a
holder of approximately 35% of the issued and outstanding stock of Cityscape,
he presently has no direct or indirect financial or equity interest in
Cityscape.
Gifts of shares by Anis Jessa
On June 1, 2000, Anis Jessa gifted 1,134,750 shares to the following members of
his family: Shabnam Jessa, Mohamed Azim Jessa, Aliyha Jessa, Zinnat Mohamedali
Gulamhusein, Zehra Claire Visram, and Fidahusein Jessa.
On June 1, 2000, Anis Jessa gifted 726,650 shares to the following list of
friends: Gord Hartshorne, Derek Radstaak, Cheryl Tingstad, Doug Miller, Miranda
Ronse, Leo Ronse, Rod Froehler, Rod Farquharson, Greg Phoenix, Derek Phoenix,
Elizabeth Phoenix, Tracey Phoenix, David Brown, Paul Thompson, Kenneth Roberts,
Kirk Roberts, Kristine Ponte, Mike Dwyer, Patricia Dwyer, Garry Haverty, Kirby
Helliwell, Tony Miniaci, Michael Kelly, George Shinbo, Paul Kugler, Al
Sedgewick, Martin Malus, Monica Pulver and Beatrice Stockwell.
On June 1, 2000, Anis Jessa gifted 1,891,350 shares to the following list of
business associates: Park Bench, LLC., 481331 BC Ltd., Ranchland Contracting
Ltd., Elle Holdings Ltd., Wynand Investments, Kontiki Corp Ltd., Empire
Builders, Inc., VCBM Company Ltd., MC Corp Ltd., BAS Ltd., Deklite Ltd.,
and Handsome Enterprises Ltd.
With respect to transfers made to entities which Anis Jessa has made, no
consideration was given for such transfers, so we believe them to be therefore
not "sales" of securities and therefore not subject to restrictions on transfer.
We believe that 24 of the transferees are unaccredited investors. All of the
transferees were provided access to all of E-City's relevant corporate
information. We have been informed that these unaccredited investors are
sophisticated without representatives with respect to the business of E-City and
are capable of an evaluation of the risks that an investment in E-City would
entail. We have been informed that such transferees are capable of bearing the
risk that an investment in E-City would entail, including a total loss of their
investment, which in the case of these transferees is zero, since no investment
was made. We believe that these transfers, if considered as sales under the
securities laws, are exempt under Section 4(2). The purpose of these gifts was
either to (1) transfer the shares to another entity which Mr. Jessa has
beneficial ownership of or (2) done for reasons of family relation or (3)
goodwill. Mr. Jessa received no commercial benefit from the gifting of the
shares. The shares were not gifted to satisfy any past debts nor granted in
exchange for future services. Mr. Jessa believes that certain of the grantees
may, as they now have a financial interest in E-City, help to provide E-City
with customer contacts in the future, but they are under no obligation to do so.
<PAGE>
Sales of our common stock and preferred stock
Common stock. The following table summarizes the private placement transactions
in which we sold common stock to our directors, executive officers, 5%
stockholders and persons and entities affiliated with them.
Shares of
Price per common stock
Purchaser Dates of purchase share stock
------------------ ----------------- --------- ------------
Anis Jessa
director and
executive officer 5/12/00 $0.0001 3,555,250
Salim Devji
director and
executive officer 8/1/00 $0.0001 200,000
Robin Moulder
director and
executive officer 8/1/00 $0.0001 20,000
Susan Polmar
executive officer 8/1/00 $0.0001 5,000
Shabnam Jessa (1) 5/12/00 $0.0001 962,250
Mohamed Azim Jessa
Irrevocable Trust (1)
14213 SE 63rd St.
Bellevue, WA 98006 5/12/00 $0.0001 75,000
Irrevocable
Aliyah Jessa Trust (1) 5/12/00 $0.0001 75,000
Zinnat Mohamedali 5/12/00 $0.0001 12,500
Gulamhusein1 (1)
Zehra Claire Visram (1) 5/12/00 $0.0001 5,000
Fidahusein Jessa (1) 5/12/00 $0.0001 5,000
Totals 4,915,000
1 Affiliates of Anis Jessa
<PAGE>
Description of insider sales
Between May 12, 2000 and August 1, 2000, the registrant sold 4,915,000 shares of
common stock in a private placement. There was no public offering of the shares.
The duration of the offering period was May 12, 2000 to August 1, 2000. The
shares were offered to acquaintances of the officers, directors and employees,
as well as offered to the officers and directors themselves. On August 15, 2000,
E-City issued to Butterfly Software 50,000 shares of common stock in exchange
for 100% of the issued and outstanding stock of Butterfly Software under the
attached Stock Purchase Agreement. The officers and directors as a group
purchased 4,915,000 shares in this private placement or 99% of the total shares
issued in the private placement. In addition, the additional shares issued in
connection with the acquisition of Butterfly Software were also issued to
insiders of the company and totaled 50,000 shares or 1% of the total then
outstanding.
Under the above transactions, the officers, directors and 5% or greater
shareholders of E-City purchased a total of 4,915,000 shares in the private
placement, representing 99% of the total shares issued and outstanding of E-City
subsequent to the private placement.
Officer and director Anis Jessa and his affiliates purchased 4,690,000 of shares
on May 12, 2000 at a per share purchase price of $0.0001. Officer and director
Anis Jessa was issued 25,000 shares on August 15, 2000 in connection with the
acquisition of the Butterfly Software.
Officer and director Robin Moulder purchased 20,000 shares of common stock at
$0.0001 per share on August 1, 2000 in the above mentioned private placement.
Officer and director Sal Devji purchased 200,000 shares of common stock at
$0.0001 per share on August 1, 2000 in the above mentioned private placement.
Officer Susan Polmar purchased 5,000 shares of common stock at $0.0001 per share
on August 1, 2000 in the above mentioned private placement.
Indemnification agreements
We are entering into indemnification agreements with each of our directors and
officers. Such indemnification agreements will require us to indemnify our
directors and officers to the fullest extent permitted by Nevada law. For a
description of the limitation of our directors' and officers' liability and our
indemnification of such directors and officers, see "Limitation on directors'
and officers' Liability and Indemnification."
Conflict of interest policy
We believe that all transactions with affiliates described above were made on
terms no less favorable to us than could have been obtained from unaffiliated
third parties. Our policy is to require that a majority of the independent and
disinterested outside directors on our board of directors approve all future
transactions between us and our officers, directors, principal stockholders and
their affiliates.Such transactions will continue to be on terms no less
favorable to us than we could obtain from unaffiliated third parties.
Market for common equity and related stockholder matters
There is no trading market for our common stock at present and there has been no
trading market to date. Management has not undertaken any discussions with any
prospective market maker concerning the participation in the aftermarket for our
securities and management does not intend to initiate any discussions. We cannot
guarantee that a trading market will ever develop or if a market does develop,
that it will continue. As of October 31, 2000, there are no options outstanding
to purchase shares of our common stock and no options to purchase our common
stock that are authorized and available for grant. We have no shares that are
currently eligible for sale under Rule 144 and 4,690,000 shares which may be
eligible for sale under Rule 144 on May 12, 2001, depending on whether the
holder remains an affiliate. We have 225,000 shares which may become eligible
for sale under Rule 144 on August 1, 2001, depending on whether the holder
remains an affiliate. We have 50,000 shares which may become eligible for sale
under Rule 144 on August 15, 2001, depending on whether the holder remains an
affiliate. We have 3,853,000 common shares which we have agreed to register
under the Securities Act in this offering for sale by current security holders.
There are approximately 52 holders of record of our shares of common stock. No
dividends have been paid on our common stock to date, and we have no plans to
pay dividends on our common stock in the foreseeable future.
<PAGE>
The Securities and Exchange Commission has adopted a rule that established the
definition of a "penny stock," for purposes relevant to us, 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 the SEC 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 stock in both public offering 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.
As a result, if trading in our common stock is determined to be subject to the
above rules, a stockholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, our securities.
Where you can find additional information
We filed with the Securities and Exchange Commission a registration statement on
Form SB-2 under the Securities Act for the shares of common stock in this
offering. This prospectus does not contain all of the information in the
registration statement and the exhibits and schedule that were filed with the
registration statement. For further information with respect to us and our
common stock, we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement. Statements contained
in this prospectus about the contents of any contract or any other document that
is filed as an exhibit to the registration statement are not necessarily
complete, and we refer you to the full text of the contract or other document
filed as an exhibit to the registration statement.
You may read and copy all materials which we file with the Securities and
Exchange Commission at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You may obtain information about the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC at http://www.sec.gov. You may also visit our website for further
information at http://www.ecitysoftware.com.
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
Financial statements
Report of HANSEN, BARNETT & MAXWELL CERTIFIED PUBLIC ACCOUNTANTS .......F1 (41)
Financial Statements
Balance Sheet ..........................................................F2 (42)
Statements of Operations ...............................................F4 (44)
Statements of Shareholders' Equity......................................F5 (45)
Statements of Cash Flows................................................F6 (46)
Notes to Financial Statements........................................F8-15 (48)
Report of Hansen,
Barnett & Maxwell,
Certified Public
Accountants,
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
March 31, 2000 and 1999
<PAGE>
E-CITY SOFTWARE, INC.
AND SUBSIDIARY
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants ....................F1 (41)
Financial Statements:
Consolidated Balance Sheets - September 30, 2000 and 1999 (Unaudited),
March 31, 2000 and 1999 ...............................................F2 (42)
Consolidated Statements of Liabilities & Stockholder Deficit Six Months Ended
September 30, 2000 and 1999 (Unaudited), and for the Year Ended
March 31, 2000 and for the Five Months Ended March 31, 1999............F3 (43)
Consolidated Statements of Operations for the Six Months Ended September 30,
2000 and 1999 (Unaudited), and for the Year Ended
March 31, 2000 and for the Five Months Ended March 31, 1999............F4 (44)
Consolidated Statements of Stockholders' (Deficit) for the Five Months Ended
March 31, 1999 and for the Year Ended March 31, 2000 and for the Six Months
Ended September 30, 2000 and 1999 Unaudited)...........................F5 (45)
Consolidated Statements of Cash Flows for the Six Months Ended
September 30, 2000 and 1999 (Unaudited), and for the Year Ended March
31, 2000 and for the Five Months Ended March 31, 1999 .................F6 (46)
Notes to Financial Statements ......................................F8-15 (48)
<PAGE>
F-1
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801)532-7944
Member of SECPS 345 East
300 South, Suite 200
Member of Summit International Associates Salt Lake City,Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of directors and Shareholders
E-City Software, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of E-City Software,
Inc. and subsidiary as of March 31, 2000 and 1999 and the related consolidated
statements of operations, stockholders' deficit, and cash flows for the year
ended March 31, 2000 and for the Five Months Ended March 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 auditing standards generally accepted
in the United States. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of E-City Software,
Inc. and subsidiary as of March 31, 2000 and 1999, and the results of their
operations and their cash flows for the year ended March 31, 2000 and for the
five months ended March 31, 1999 in conformity with accounting principles
generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company's operating losses since
inception and negative working capital raise substantial doubt about its ability
to continue as a going concern. Management's plans concerning 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.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
September 12, 2000
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 30, March 31,
------------------------ -----------------------
2000 1999 2000 1999
------ ------ ------ ------
(Unaudited) (Unaudited)
ASSETS
Current Assets
Cash $ 5,873 18,788$ $14,658 $ 12,452
Software
development 162,986 25,665 74,169 -
costs
Prepaid expenses 17,041 7,302 13,232 -
Related
party advances 85,534 53,115 86,055 -
Total
Current Assets 271,434 104,870 188,114 12,452
--------- -------- ------- --------
Property
and Equipment
Automobiles 20,334 20,789 21,043 -
Furniture
and fixtures 12,429 4,810 6,480 -
Computer
equipment 69,069 21,766 52,792 -
Computer
Software 41,904 - - -
Less:
accumulated
depreciation (27,399) (2,604) (11,636) -
----------- ----------- ---------- ----------
Total Property
and Equipment 116,337 44,761 68,679 -
----------- ------------ ---------- ----------
Other Assets
(net of 3,546 - - -
amortization) ---------- ------------ ---------- ----------
Total Assets $ 391,317 $ 149,631 $256,793 $ 12,452
=========== =========== ========== =========
F-2
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
LIABILITIES AND STOCKHOLDERS' DEFICIT
September 30, March 31,
------------------------ -----------------------
2000 1999 2000 1999
------ ------ ------ ------
(Unaudited) (Unaudited)
Current Liabilities
Accounts payable $ 38,135 $ 2,312 $- $ -
Accrued expenses 20,505 7,371 29,691 5,817
Obligations
under capital
lease -
current portion 3,549 838 3,538 -
Related
party advances 190,898 163,570 182,130 13,322
Deferred revenue 77,500 91,000 96,000 -
---------- ----------- --------- ---------
Total Current 330,587 265,091 314,810 19,139
Liabilities ---------- ----------- ---------- ----------
Obligations
Under Capital Lease
Long Term 12,672 19,950 14,984 -
---------- ---------- ---------- ---------
Total Liabilities 343,259 258,041 329,794 19,139
--------- ---------- --------- ---------
Stockholders' Deficit
Common stock,
$0.0001 par value,
50,000,000 shares
authorized,
4,965,000,50,000,
50,000 and 50,000
shares issued and
outstanding,
respectively 474 5 5 5
Accumulated
income (deficit) 57,328 (133,780) (68,136) (6,653)
Accumulated other
comprehensive
income(loss) (9,767) (1,635) (4,870) (39)
------- ---------- -------- -------
Total Stockholders'
Deficit 48,058 (135,410) 73,001 (6,687)
--------- ---------- -------- -------
Total Liabilities
and Deficit $391,371 149,631 256,793 12,452
========== =========== ========= =========
F-3
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six For the Year For the Five
Months Ended Ended Months Ended
September 30, March 31, March 31,
----------------- ----------- ------------
2000 1999 2000 1999
---- ---- ------ -------
(Unaudited)
Sales $400,000 $- $ 250,000 $-
Cost of Goods Sold 178,312 - 132,023 -
--------- ------ ---------- -------
Gross Profit 221,688 - 117,977 -
Operating Expenses
General and
administrative
expenses 96,790 25,312 78,394 6,636
Research and
development - 98,932 99,893 -
------- -------- -------- -------
Total Operating
Expenses 96,790 124,244 178,287 6,636
------- ------- ------- -------
Income (Loss)
from Operations 124,898 (124,244) (60,310) (6,636)
Other Income (Loss)
Interest income 32 12 57 2
Gain (Loss)
on foreign
currency exchange 534 (2,900) (1,230) (19)
-------- -------- -------- ---------
Net Other
Income (Loss) 566 (2,888) (1,173) (17)
------- ------- ------- ----------
Net Income (Loss) $ 125,464 $(127,132) $ (61,483) $ (6,653)
========== ========== =========== ==========
Basic Income (Loss)
Per Share $ 0.03 $ (0.03) $ (0.01) $-
-------- -------- -------- ---------
Weighted
Average
Shares Outstanding 4,965,000 4,740,000 4,740,000 4,740,000
========== ========= ========== ==========
F-4
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Accumulated
Other
Common Stock Paid In Accumulated Comprehensive Total
Shares Amount Capital Deficit Income Loss Equity
------------- ------- ----------- ------------- ------
11-9-98
Shares
issued at
inception 50,000 $ 5 $ - $ - $ - $ 5
Net loss - - - (6,653) - (6,653)
Translation
adjustments - - - - (39) (39)
----------
Comprehensive Loss - - - - - (6,687)
------- ------- -------- -------- -------- --------
Balance
3-31-99 50,000 5 - (6,653) (39) (6,687)
Net loss - - - (61,483) - (61,483)
Translation - - - - (4,831) (4,831)
adjustments --------
Comprehensive Loss - - - - - (66,314)
------ ------- ---------- ----------- --------- ----------
Balance
3-31-00 50,000 5 - (68,136) (4,870) (73,001)
Net loss (unaudited) - - - 125,464 - 125,464
Translation
adjustments
(unaudited) - - - - (4,897) (4,897)
Founder's 4,690,000 469 - - - 469
shares
issued at
inception of
E-City Software,
Inc. on 5-12-00
(unaudited)
Company
shares 225,000 23 - - - 23
issued on ---------
August 1, 2000
(unaudited)
Comprehensive
Income
(unaudited) - - - - - 121,059
----------- --------- ---------- ----------- --------- --------
Balance
9-30-00
(unaudited) 4,965,000 $ 497 $- $ 57,328 $(9,767) $48,058
========== ========== ========== =========== =========== =======
F-5
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six For the Year For the Five
Months Ended Ended Months Ended
September 30, March 31, March 31,
----------------- ----------- ------------
2000 1999 2000 1999
---- ---- ------ -------
(Unaudited)
Cash Flows
From Operating
Activities
Net loss $ 125,464 $(127,132) $(61,483) $(6,653)
Foreign exchange
(gain) loss (534) 2,900 1,230 19
Depreciation
and amortization 16,498 2,636 11,463 -
Changes in
current assets
and liabilities:
Related party
advances receivable 521 (53,115) (85,178) -
Work in progress (88,217) (25,665) (75,068) -
Prepaid expenses (3,809) (7,302) (13,035) -
Accounts
payable
and accrued
expenses 25,498 3,866 26,788 5,788
Related party
advances payable 8,768 150,248 169,747 21,617
Deferred revenue (18,500) 91,000 96,000 -
--------- -------- -------- ---------
Net Cash
Provided by
(Used In)
Operating
Activities 65,089 37,436 72,464 20,771
---------- --------- --------- --------
Cash Flows From
Investing Activities
Equipment purchases 67,090 (47,365) (59,600) -
-------- -------- -------- ---------
Net Cash Used
in Investing
Activities (67,090) (47,365) (59,600) -
-------- -------- -------- ----------
F-6
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY Con't.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six For the Year For the Five
Months Ended Ended Months Ended
September 30, March 31, March 31,
----------------- ----------- ------------
2000 1999 2000 1999
---- ---- ------ -------
(Unaudited)
Cash Flows
From
Financing
Activities
Principal
payments
of long-term
debt (2,301) 0 (5,257) (8,295)
Borrowings
under
long-term debt 0 20,789 - -
Proceeds from stock 492 - - -
--------- ------ ------- -------
Net Cash
(Used In)
Provided by
Financing
Activities (1,809) 20,789 (5,257) (8,295)
---------- -------- -------- ---------
Effect of Exchange Rate
Changes on Cash (4,975) (4,524) 5,401 (24)
------- ------- ------- ---------
Net Increase
(Decrease)
in Cash and
Cash Equivalents (8,785) 6,336 2,206 12,452
Cash and Cash
Equivalents at
Beginning of Year 14,658 12,452 12,452 -
Cash and Cash
Equivalents
at End of Year $ 5,873 $ 18,788 $ 14,658 $ 12,452
========= ========= ========= =========
F-7
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO SEPTEMBER 30, 2000 AND
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 IS UNAUDITED)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations -- Butterfly Software, Inc. (Butterfly)
was incorporated on November 9, 1998 under the laws of British Columbia, Canada.
Its primary business activity is the development of interactive computer
software (interactive city guides) produced on a contract basis for customers.
On May 12, 2000, E-City Software, Inc. (E-City) was created as a Nevada
corporation by the major shareholder of Butterfly and 4,690,000 shares of common
stock were issued as founders' shares. Subsequent to E-City's formation and
under a purchase agreement between Butterfly and E-City, the 100 outstanding
shares of Butterfly were exchanged for 50,000 shares of E-City. In this way,
Butterfly became a wholly owned subsidiary of E-City. For financial reporting,
the acquisition was accounted for at historical cost in a manner similar to a
pooling-of-interests with Butterfly considered the acquiring corporation. The
historical financial statements of Butterfly, which are presented herein, were
restated to reflect the E-City shares issued to the Butterfly shareholders.
E-City and its subsidiary, Butterfly, are herein referred to as "the Company".
Interim Unaudited Financial Information -- The accompanying condensed financial
statements have been prepared by the Company and are not audited. In the opinion
of management, all adjustments necessary for a fair presentation have been
included and consist only of normal recurring adjustments except as disclosed
herein. The financial position and results of operations presented in the
accompanying financial statements are not necessarily indicative of the results
to be generated for the remainder of 2000.
Use of 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 revenues and expenses during
the reporting period. Actual results could differ from those estimates
Basis of Presentation--The accompanying consolidated financial statements have
been prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. As
shown in the consolidated financial statements for the six month period ended
September 30, 2000 the company had net income of $125,464 while for the six
month period ended September 30, 1999, and the year ended March 31, 2000 and
for the five months ended March 31, 1999, the Company has incurred net losses of
$127,132, $61,483 and $6,653 respectively. Also, for the six month period ended
September 30, 2000 and 1999, and the year ended March 31, 2000 and for the five
months ended March 31, 1999, the Company had a working capital deficit of
$40,653, $160,221, $126,696, and $6,687, respectively. These factors, among
others, raise substantial doubt about the Company's ability to continue as a
going concern for a reasonable period of time. The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets or the amount and classification of
liabilities which might be necessary should the Company be unable to continue as
a going concern. The Company's continuation as a going concern is dependent upon
its ability to generate sufficient cash flows to meet its obligations on a
timely basis, to obtain additional financing as may be required, and ultimately
to attain successful operations. The Company's management intends to use both
capital and debt financing as needed to provide sufficient cash flow.
The Company's management has formulated a plan involving several efforts
including an increased marketing effort to contact potential customers. Expenses
and costs are also being examined to determine their need and effectiveness to
meet the Company's goals. Various equity sources are also being explored in
order to generate cash if needed. Along with exploring equity sources,
management is also pursuing financing options, although nothing specific has yet
been established with an investor or financing party. If needed, management has
also considered cutting back on its projects which would entail a reduction of
force and related expenses and curtailment of certain advertising and marketing
efforts.
F-8
<PAGE>
Software Revenue -- Revenue from licenses of the interactive guides is
recognized when delivery is complete, and no significant obligations remain
unfulfilled by the Company and when collection of any remaining receivable is
probable. Payments collected prior to revenue recognition are accounted for as
deferred revenue.
Service revenues from the post-contract customer support contract and software
upgrade contract are recognized at the time revenues from the contract are
recognized because the service period is less then one year. The Company has
estimated and accrued the costs related to these services and recorded them in
the year revenue is recognized.
Capitalized Software Costs -- In accordance with Financial Accounting Standards
Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed" development costs incurred in the research and development of new
software products to be sold, leased or otherwise marketed are expensed as
incurred until technological feasibility in the form of a working model has been
established. Subsequent costs to produce the interactive guides are accumulated
as an asset, "software development costs", and recorded as costs of goods sold
when revenue is recognized. Software development costs for projects that are not
expected to be included in costs of good sold during the twelve months following
the balance sheet date are recorded as long-term costs in the "other assets"
section of the balance sheet. Those software development costs that are expected
to be recorded as costs of sales within the next twelve months are included in
current assets. As of March 31, 2000, all projects for which costs have been
incurred are expected to be completed within twelve months and, accordingly,
these software development costs are included in current assets.
Major Customers -- During the year ended March 31, 2000, revenue from the
company's sole customer amounted to $250,000.
Financial Instruments -- The amounts reported as cash, related party accounts
receivable, accounts payable, accrued liabilities and unearned revenue are
considered to be reasonable approximations of their fair values due to their
near-term maturities.
Cash and Cash Equivalents -- The Company considers all short-term investments
with an original maturity of three months or less to be cash equivalents.
Property and Equipment -- Property and equipment is reported at cost. Minor
repairs, enhancements, and maintenance costs are expensed when incurred.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Depreciation expense for the six months ended
September 30, 2000 and 1999 and the year ended March 31, 2000 and for the five
months ended March 31, 1999 was $16,498, $2,636, $11,467 and $0, respectively.
Major categories of property and equipment and estimated useful lives are as
follows:
Estimated
Useful Life
Furniture and fixtures.......................3-7 years
Computer equipment............................ 5 years
Automobiles................................... 5 years
Impairment of Long-lived Assets -- The Company reviews its long-lived assets,
for impairment when events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. The Company evaluates, at
each balance sheet date, whether events and circumstances have occurred which
indicate possible impairment. The Company uses an estimate of future
undiscounted net cash flows from the related asset or group of assets over their
remaining life in measuring whether the assets are recoverable. The Company does
not consider any of its long-lived assets to be impaired.
F-9
<PAGE>
Foreign Currency Translation -- Monetary assets and liabilities which are
denominated in currencies other than Canadian Dollars are translated at the
exchange rate in effect at the balance sheet date. Revenue and expense items are
translated at rates of exchange prevailing on the transaction dates. All
exchange gains or losses are recognized currently in earnings.
For reporting purposes, the financial statements have been translated into
United States Dollars. Assets and liabilities are translated at the exchange
rate in effect on the balance sheet date. Revenue and expense items are
translated at an average exchange rate. Translation adjustments representing
translation gains or losses are recorded as a component of comprehensive income.
Basic and Diluted Loss Per Share -- Basic loss per common share is computed by
dividing net loss by the weighted-average number of common shares outstanding
during the period. Diluted loss per share is calculated to give effect to
potentially issuable common shares except during loss periods when those
potentially issuable common shares would decrease the loss per share. There were
no potentially issuable shares at September 30, 2000 (unaudited), March 31,
2000, or 1999.
Earnings per share for the periods ended September 30, 1999, and March 31, 2000
and 1999 has been calculated by considering the 4,690,000 shares issued upon the
inception of E-City on May 12, 2000 as being outstanding for the entire period
from November 9, 1998. Earnings per share for the period ending September 30,
2000 has been calculated by considering the 4,965,000 shares issued and
outstanding.
Income Taxes -- The Company recognizes an asset or liability for the deferred
tax consequences of all temporary differences between the tax bases of assets or
liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years when the reported
amounts of the assets or liabilities are recovered or settled. These deferred
tax assets or liabilities are measured using the enacted tax rates that will be
in effect when the differences are expected to reverse. Deferred tax assets are
reviewed periodically for recoverability and valuation allowances are provided,
as necessary.
Recent Accounting Pronouncements -- In June 1998, the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
SFAS 133 establishes new accounting and reporting standards for companies to
report information about derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. This statement is effective for
financial statements issued for all fiscal quarters of fiscal years beginning
after June 15, 2000. The Company does not expect this statement to have a
material impact on the Company's results of operations, financial position or
liquidity.
In March 2000, the FASB issued Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation, An Interpretation of APB
Opinion No. 25." Interpretation No. 44 provides definitive guidance regarding
accounting for stock-based compensation to non-employee directors.
Interpretation 44 allows non-employee directors to be treated as "employees" for
purposes of applying APB Opinion No. 25. Under APB 25, compensation expense is
recognized if an option's exercise price on the measurement date is below the
fair value of the Company's common stock. Options and warrants issued to
non-employees are accounted for in accordance with SFAS No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123) which requires these options and warrants
be accounted for at their fair value.
F-10
<PAGE>
NOTE 2 - CASH FLOW INFORMATION
Supplemental Cash Flow Information -- During the periods ended March 31, 1999
and 2000, and September 30, 2000 and 1999 the Company paid $0, $1,060, $968 and
$0 for interest.
Noncash Investing and Financing Activities -- During 2000, the company entered
into a capital lease arrangement for a vehicle valued at $21,043. The company
also transferred equipment valued at $1,225 to a shareholder as a payment on a
note from the shareholder.
NOTE 3-RELATED PARTY TRANSACTIONS AND BALANCES
The Company entered in to an agreement in September 1999 with a related party
under common control to develop ten interactive city guides for a total contract
price of $2,000,000. During the year ended March 31, 2000 the Company completed
and delivered the first interactive guide and recognized revenues of $250,000.
During the six months ended September 30, 2000 the company completed two
additional city guides and recognized $400,000 of revenue upon completion. In
addition, the company has received deposits on subsequent city guides that it
has recorded as deferred revenue pending completion of each guide. The deferred
revenue amounts to $77,500 and $96,000 for the six months ended September 30,
2000 and the year ended March 31, 2000, respectively. As of March 31, 2000, one
project was completed and sold and there were no operational problems associated
with the completed project. Also as of March 31, 2000, four projects were
underway with estimated completion dates of August 2000 for two of the projects
and December 2000 for the remaining two projects. Two other projects are
expected to be started during calendar 2000 and completed by January 2001. The
remaining three projects are expected to be started and completed during
calendar 2001.
The Company has also advanced funds to this related party. As of September 30,
2000 and March 31, 2000, the Company had unreimbursed advances of $85,534 and
$86,055, respectively, from the related party.
The Company has received cash advances from various shareholders and other
companies under common management. Amounts due to these related parties are
non-interest bearing and without specific terms of repayment. As of September
30, 2000 and March 31, 2000 and 1999, the Company owed $190,898, $182,130 and
$13,322, respectively.
NOTE 4-COMMITMENTS
Obligations under Capital Leases -- During 2000, the Company entered a capital
lease agreement for a vehicle. The lease is for 48 months with a minimum monthly
payment of $401. Equipment under capital leases as of March 31, 2000 was as
follows:
Automobile $ 21,043
Less: Accumulated depreciation (3,069)
----------
$ 17,974
Operating Lease Obligations -- On February 29, 2000, the Company entered into a
24 month lease agreement for a vehicle. The lease payment is $458 per month.
F-11
<PAGE>
On March 31, 2000, the Company entered into a 3-year agreement to lease office
space for monthly payments of $1,552. A yearly escalation allowance is provided
in the lease agreement.
Rental expense for the six months ended September 30, 2000 and 1999, and the
years ended March 31, 2000 and 1999 was $15,635, $7,349, and $19,766, and $0
respectively.
The future minimum lease payments for capital and operating leases as of March
31, 2000 are as follows:
For the Year Ending Capital Operating
March 31, Leases Leases
2001.............................................$ 4,807 $ 25,595
2002.............................................. 4,807 24,708
2003.............................................. 4,807 3,294
2004.............................................. 7,626 -
Total minimum payments............................22,047 $ 53,597
==========
Less amount representing
executory costs................................. (2,299)
---------
Net minimum lease payment....................... 19,748
Less amount representing interest.............. (1,226)
--------
Present value of net minimum
lease payments.................................. 18,522
Less current portion........................... (3,538)
----------
Obligations Under Capital Lease .............. $ 14,984
===========
F-12
<PAGE>
NOTE 5-COMPREHENSIVE LOSS
Comprehensive income (loss) consists of foreign currency translation adjustments
as follows:
Before-Tax Tax Net-of-Tax
Amount Benefit Amount
For the Six Months
Ended September 30, 2000
(Unaudited)
Translation adjustments $ 4,897 $- $ 4,897
---------- ----------- -----------
Other Comprehensive Income $ 4,897 $- $ 4,897
========== =========== ===========
For the Year
Ended March 31, 2000
Translation adjustments $ (4,831) $- $ (4,831)
----------- ----------- -----------
Other Comprehensive Loss $ (4,831) $- $ (4,831)
========== =========== ==========
For the Year Ended March 31, 1999
Translation adjustments $ (39) $- $ (39)
--------------- ------------ -------------
Other Comprehensive Loss $ (39) $- $ (39)
============== ============ =============
F-13
<PAGE>
NOTE 6- INCOME TAXES
The Company did not have a current or deferred provision for income taxes for
the year ended March 31, 2000 and for the five months ended March 31, 1999. The
following presents the components of the net deferred tax asset at September 30,
2000, March 31, 2000 and 1999:
September 30, March 31,
----------------- -----------------
2000 2000 1999
------------------- -----------------
(Unaudited)
Operating loss carryforwards $ 39,570 $ 53,495 $ 2,526
Software development costs (61,935) (28,184) -
Less: Valuation Allowance 22,365 (25,311) (2,526)
------------- -- ---------- ---------
Net Deferred Tax Asset $ - $ - $ -
The valuation allowance decreased $47,676 for the six months ended September 30,
2000 and increased $22,785 and $2,526 during the years ended March 31, 2000 and
1999, respectively. At March 31, 2000, the Company has net operating loss
carryforwards of $66,608 that expire, if unused, beginning in 2019.
The following is a reconciliation of the income tax benefit computed at the
federal statutory tax rate with the provision for income taxes for the six
months ended September 30, 2000 and the year ended March 31, 2000 and 1999:
September 30, March 31,
---------------- -----------------
2000 2000 1999
--------------- -------- -------
(Unaudited)
Income tax benefit at
statutory rate (38%) $ 47,676 $ (23,364) $ (2,526)
Deferred tax valuation
allowance change (47,676) 22,785 2,526
Non-deductible expenses - 579 -
Provision for Income Taxes $ - $ - $ -
F-14
<PAGE>
NOTE 7-SUBSEQUENT EVENTS
In August 2000, the Company sold 225,000 shares of common stock to certain
employees and directors of the Company at par value.
As of the report date, the Company was involved in preparing a Form SB-2 to be
filed with the Securities and Exchange Commission to register 3,853,000 shares
of common stock on behalf of the stockholders. The Company will receive no
proceeds from the sale of the shares to the public by the shareholders.
F-15
<PAGE>
[Inside Back Cover Art]
<PAGE>
(outside back cover page)
Dealer prospectus delivery obligation
Until (insert date), all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to delivery a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
<PAGE>
E-CITY SOFTWARE, INC.
E-City Software, Inc.
Registration statement on form SB-2
Part II
Information not required in prospectus
Indemnification of directors and officers
Article V of our bylaws provides for the indemnification of officers, directors
and third parties acting on behalf of us if such person acted in good faith and
in a manner reasonably believed to be in and not opposed to our best interest,
and, with respect to any criminal action or proceeding, the indemnified party
had no reason to believe his or her conduct was unlawful.
We are entering into indemnification agreements with our directors and executive
officers, in addition to indemnification provided for in our bylaws, and intend
to enter into indemnification agreements with any new directors and executive
officers in the future. The indemnification agreements may require us, among
other things, to indemnify our directors and officers against certain liability
that may arise by reason of their status or service as directors and officers,
other than liabilities arising from willful misconduct of a culpable nature, to
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified, and to obtain directors and officers'
insurance, if available on reasonable terms.
Other expenses of issuance and distribution
The following table sets forth the costs and expenses, other than commissions,
payable by us in connection with the sale of common stock being registered. All
amounts are estimates except the SEC registration fee.
SEC registration fee.................................................. $ 5,086
OTC listing fee......................................................... 1,000
Printing and engraving costs........................................... 20,000
Legal fees and expenses............................................... 150,000
Accounting fees and expenses........................................... 10,000
Blue sky fees and expenses............................................. 10,000
Directors and officers insurance....................................... 25,000
Transfer agent and registrar fees....................................... 4,000
Miscellaneous expenses................................................. 25,000
Total................................................................ =250,086
Recent sales of unregistered securities
Between May 12, 2000 and August 1, 2000, the registrant sold 4,915,000 shares of
common stock. There was no public offering of the shares. The duration of the
offering period was May 12, 2000 to August 1, 2000. The shares were offered to
acquaintances of the officers, directors and employees, as well as offered to
the officers and directors themselves. Between May 12, 2000 and August 1, 2000,
4,915,000 shares were sold to founders of E-City at par value of $0.0001 per
share. The total offering price for this offering was $492.00. On August 15,
2000, E-City issued to Butterfly Software 50,000 shares of common stock in
exchange for the purchase of 100% of the issued and outstanding stock of
Butterfly Software under the attached Stock Purchase Agreement.
The Company has relied on Section 4(2) of the Securities Act of 1933 for its
private placement exemption, such that the sales of the securities were
transactions by an issuer not involving any public offering. All of the
aforesaid securities have been appropriately marked with a restricted legend and
are "restricted securities" as defined in Rule 144 of the rules and the
regulations of the Securities and Exchange Commission, Washington D.C. 20549.
All of the aforesaid securities were issued for investment purposes only and not
with a view to redistribution, absent registration. All of the aforesaid persons
have been fully informed and advised concerning the Registrant, its business,
financial and other matters. Transactions by the Registrant involving the sales
of these securities set forth above were issued under the "private placement"
exemptions under the Securities Act of 1933 as transactions by an issuer not
involving any public offering. The Registrant has been informed that each person
is (i) a sophisticated investor capable of assessing the risks inherent in a
private offering, (ii) able to bear the economic risk of his investment and
(iii) aware that the securities were not registered under the Securities Act of
1933 and cannot be re-offered or re-sold until they have been so registered or
until the availability of an exemption therefrom. The Transfer Agent and
registrar of the Registrant will be instructed to mark "stop transfer" on its
ledgers to assure that these securities will not be transferred absent
registration or until the availability of an exemption therefrom is determined.
For additional information concerning these equity investment transactions,
reference is made to the information contained under the caption "Related party
transactions" in the form of prospectus included herein.
Exhibits
Number description
3.1 (a) Articles of incorporation of the registrant
3.2 (a) Bylaws of the registrant.
4.1 (a) Specimen common stock certificate.
5.1 (b) Opinion of Jonathan Ram Dariyanani, Esq.
10.1 (a) Form of common stock purchase Agreement
10.2 (a) Common stock purchase agreement by and between
E-City Software, Inc. and Anis Jessa.
10.3 (a) Common stock purchase agreement
by and between E-City Software, Inc. and Salim Devji.
10.4 (a) Common stock purchase agreement
by and between E-City Software, Inc. and Robin Moulder.
10.5 (a) Common stock purchase agreement
by and between E-City Software, Inc and Susan Polmar.
10.6 (a) Stock purchase agreement
by and between E-City Software, Inc and Butterfly Software Inc.
10.7 (a) Software development agreement
10.8 (a) Software development agreement addendum
23.1 Consent of Hansen, Barnett & Maxwell,
Certified Public Accountants, (see Page II- 111 )
23.2 (b) Consent of Jonathan Ram Dariyanani, Esq.
(included in Exhibit 5.1).
24.1(a) Power of attorney (see Page II-66).
27.1 Financial data schedule.
(a) Filed previously with the commission in Registrant's Filing on Form SB-2 on
September 22, 2000.
(b) To be filed by amendment.
Financial statement schedules
Schedules not listed above have been omitted because the information required to
be set forth therein is not applicable or is shown in the financial statements
or notes thereto.
Undertakings
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers and controlling persons under
the foregoing provisions, we have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by us of expenses incurred or paid by one or more of our directors,
officers or controlling persons in the successful defense of any action, suit or
proceeding) is asserted by one or more of our directors, officers or controlling
persons in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
We hereby undertake:
(1) to file during any period in which we offer or sell securities, a
post-effective amendment to this registration statement: (a) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (b) to reflect in
the prospectus any facts or events which, individually or together, represent a
fundamental change in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in a form of prospectus filed
with the Securities and Exchange Commission under Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of the
Registration Fee" table in the effective registration statement; and (c) to
include any additional or changed material information on the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities that remain unsold at the termination of the offering.
(4) For purposes of determining liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in the form of
prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h)under
the Securities Act shall be deemed to be a part of this registration statement
as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to the initial bona
fide offering thereof.
Signatures
As required by the Securities Act, the Registrant has caused this Registration
Statement to be signed on its behalf by the undersigned, who is duly authorized,
in Seattle, State of Washington, on the 29th day of November, 2000.
By: /s/ Anis Jessa
Anis Jessa, chief executive officer
<PAGE>
Exhibit 23.1
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944 Member of SECPS 345 East
Broadway, Suite 200
Member of Summit International Associates, Inc. Salt Lake City, Utah 84111-2693
www.hbmcpas.com
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of directors E-City Software, Inc.
As independent certified public accountants, we hereby consent to the use of our
report dated September 12, 2000 with respect to the consolidated financial
statements of E-City Software, Inc. included in this Registration Statement on
Form SB-2, and consent to the use of our name in the "Experts" section of this
Registration statement.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
November 30, 2000
<PAGE>
EXHIBIT INDEX
Number description
3.1 (a) Articles of incorporation of the registrant
3.2 (a) Bylaws of the registrant.
4.1 (a) Specimen common stock certificate.
5.1 (b) Opinion of Jonathan Ram Dariyanani, Esq.
10.1 (a) Form of common stock purchase Agreement
10.2 (a) Common stock purchase agreement by and between
E-City Software, Inc. and Anis Jessa.
10.3 (a) Common stock purchase agreement
by and between E-City Software, Inc. and Salim Devji.
10.4 (a) Common stock purchase agreement
by and between E-City Software, Inc. and Robin Moulder.
10.5 (a) Common stock purchase agreement
by and between E-City Software, Inc and Susan Polmar.
10.6 (a) Stock purchase agreement
by and between E-City Software, Inc and Butterfly Software Inc.
10.7 (a) Software development agreement
10.8 (a) Software development agreement addendum
23.1 Consent of Hansen, Barnett & Maxwell,
Certified Public Accountants, (see Page II- 111 )
23.2 (b) Consent of Jonathan Ram Dariyanani, Esq.
(included in Exhibit 5.1).
24.1(a) Power of attorney (see Page II-66).
27.1 Financial data schedule.
(a) Filed previously with the commission in Registrant's Filing on Form SB-2 on
September 22, 2000.
(b) To be filed by amendment.
