U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
______________ TO ______________
COMMISSION FILE NUMBER: 000-9071
eCom.com, Inc.
(Exact name of registrant as specified in its charter)
Nevada 74-2026624
(State or jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
3900 Birch Street, Suite 113, Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (877) 613-3131
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 Par Value
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) been subject to such filing
requirements for the past 90 days. Yes X No.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [X].
The Registrant's revenues for the fiscal year ended
September 30, 2000 were zero. The aggregate market value of the
voting stock held by non-affiliates of the Registrant as of
December 1, 2000: $1,892,488. As of December 1, 2000, the
Registrant had 39,603,990 shares of common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X.
TABLE OF CONTENTS
PART I.
PAGE
ITEM 1. DESCRIPTION OF BUSINESS 3
ITEM 2. DESCRIPTION OF PROPERTY 7
ITEM 3. LEGAL PROCEEDINGS 7
ITEM 4. SUBMISSION TO MATTERS TO A VOTE OF SECURITY HOLDERS 7
PART II.
ITEM 5. MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS 7
ITEM 6. PLAN OF OPERATION 9
ITEM 7. FINANCIAL STATEMENTS 14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE 15
PART III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT 15
ITEM 10. EXECUTIVE COMPENSATION 16
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 17
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 18
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 18
SIGNATURES 20
PART I.
ITEM 1. DESCRIPTION OF BUSINESS.
Business Development.
The Registrant was originally incorporated as Caribou
Energy, Inc. in Colorado on October 3, 1978. As of October 1,
1994, the Registrant changed its name to E.T. Capital, Inc. As
of October 15, 1999, the Registrant changed its name from E.T.
Capital, Inc. to eCom.com, Inc.
On June 10, 2000, the Registrant caused the
jurisdiction of the Registrant to be moved from the State of
Colorado to the State of Nevada and the Articles of Incorporation
of eCom.com, Inc. are now governed by the Laws of the State of
Nevada. The total number of shares of all classes of stock which
the Corporation shall have the Authority to issue is 200,000,000
par value of, consisting of 190,000,000 shares of common stock
par value $0.001 and 10,000,000 shares of Preferred stock par
value $0.001.
Business of the Registrant.
The Registrant's initial corporate purpose was to
engage in the oil and gas business. Initial oil and gas industry
activities of the Registrant, commencing in 1978, consisted
primarily of the acquisition of undeveloped acreage in the
Denver-Julesburg Basin in Colorado and Nebraska, drilling 16
wells through two joint ventures and one limited partnership
organized by the Registrant, and participation in 14 wells
drilled in joint ventures organized by other industry operators.
Three additional wells were drilled during fiscal year 1983. No
further wells were drilled; no additional limited partnerships or
joint ventures were entered into by the Registrant in 1984 or
thereafter.
The Registrant began to look seriously for an acquisition
with additional resources. It acquired North American Equity in
1984 which brought approximately US$6.650,000 in oil and gas
properties into the Registrant. The oil and gas industry
continued its decline and after several years and the new
properties became uneconomic. The Registrant continued to search
for other acquisitions. In 1988, the Registrant abandoned all of
its oil and gas properties and all accounts associated with oil
and gas have been written off.
By an agreement dated June 10, 1992, the Registrant
secured all the rights, title and interest to the E.T.
"TeleManagement" VoiceMail System and 1-800 and 1-900 "pay-per-
call" telephone numbers and information center from a Nevada
corporation, E.T. Network, Inc., for $6,650,000.00. This purchase
was financed by the sale of 20,000,000 Regulation "S" restricted
shares of the Registrant. E.T. Network, Inc. was a Nevada
corporation which owned the world-wide rights to the E.T.
"TeleManagement" VoiceMail System and the 1-800 and 1-900 "pay-
per-call" telephone numbers and information center. Its wholly-
owned subsidiary was Encryption Technology Canada, Inc. (E.T.).
This subsidiary owned the rights for the VoiceMail system in
Canada. The assets of E.T. Network, Inc. (the Nevada
Corporation) and Encryption Technology Canada, Inc. were then
transferred to the Colorado Corporation. Encryption Technology
Canada, Inc. has been de-registered and is no longer in
existence.
The Registrant is now concentrating its activities in two
areas; 1. acts to raise money for charitable organizations using
the proprietary 1 900 "pay-per-call" telephone numbers 1 900
"DEMOCRAT", 1 900" REPUBLICAN", 1 900 "STOP ABUSE", 1 900 "HIV
AIDS", 1 900 HIV KIDS, 1 900 "GET MADD" and others; 2. Financing
a US$350 million hydrocarbon exploration prospect in excess of 14
million acres in the country of Paraguay, South America.
No revenues have been generated as a result of or in direct
consequence of the new business of the Registrant. The
Registrant signed charitable fund raising agreements with
Broadway Cares, Inc. (the "Broadway Cares Agreement"), a group
formed by the New York theater community to fight A.I.D.S., and
additional charitable fund raising agreements were signed between
the Registrant and the Action For Peace Foundation (dedicated to
helping the women and children of Bosnia in association with
United Nations' agencies) (the "Peace Agreement") and with the
National Coalition Against Domestic Violence (the "NCADV
Agreement"), respectively (see the Registrant's 1994 10-K filing
for complete details and copies of the Peace Agreement, which was
set forth as Exhibit A thereto, and the NCADV Agreement, which
was set forth as Exhibit B thereto). Both of these contracts
were serviced by the E.T. Foundation, Inc. a Washington, D.C.,
not-for-profit organization. The Registrant has also made
proposals to represent a number of other charitable organizations
in their fund raising activities as well. Agreements with
political and charitable organizations are anticipated during the
next fiscal year.
It would be necessary for the Registrant to raise a
substantial amount of money to obtain financial benefits from the
various agreements. Extensive television advertising campaigns
would cost millions of dollars, and it would be the Registrant's
obligation to come up with the funds necessary to get such
campaigns going. To assist the Registrant in making additional
marketing connections for its "1-900" charitable fund raising
program, the Registrant opened offices in Germany during October
1993 and in Switzerland during February 1994. Although fund
raising efforts did not bear fruit immediately, the Registrant
continues its efforts to raise money to conduct its fund raising
activities.
Even though the auditors chose to write off the
Registrant's telecommunications assets over a four year period,
the Registrant considers its telephone technology still has
substantial value. Although it is anticipated that European
telephony and telecommunication standards should reach North
American standards within the next two years, the Registrant
cannot fully utilize its systems or services in Europe until
those standards have been met. In order to conserve its
financial resources, the Registrant has decided to scale down its
European operations until promotion of its technology is
warranted by advances in the European telecommunications
standards.
In early 1996, the Registrant's original core business of oil and
gas exploration and development appeared to be rebounding in the
United States and throughout the Western Hemisphere. Directors
and officers of the Registrant were approached by various people
in the oil and gas business and encouraged to take part in new
oil exploration ventures. The Registrant viewed these overtures
seriously.
In April, 1996, the Registrant acquired a majority control
of Spectrum Oil Corporation ("Spectrum") and agreed to provide
$18 million in financing for Spectrum's hydrocarbon concessions
in the Republic of Paraguay, which totaled approximately 15
million acres, subject to the terms of an agreement between
Spectrum and the Registrant. Geologic and seismic data indicated
that there could be tens of millions of barrels of oil in the
leased area. The Registrant's Agreement to acquire Spectrum and
finance its concessions was subject to verification of the
agreements by which Spectrum acquired development rights to the
concessions. The Registrant negotiated a private placement of 8
million share purchase warrants at a price of $2.00 per share for
a period of two years. The financing would have guaranteed the
funds necessary to complete the acquisition of Spectrum and to
fulfill the financial commitments of Spectrum to the oil and gas
concessions in Paraguay. However, by July, 1996, Spectrum was in
default of its agreements with the owners of the Paraguayan
concessions and the Registrant terminated all agreements between
Spectrum and the Registrant. Thereafter, the Registrant agreed
to tender back to Spectrum the majority control shares of
Spectrum which it had given to the Registrant in connection with
its agreements with the Registrant in exchange for the 8 million
shares of the Registrant's common stock which had been given to
Spectrum pursuant to the said agreements. The Registrant
thereafter negotiated an option agreement directly with the
owners of the Paraguayan hydrocarbon concessions. The terms of
this Agreement required the Registrant to complete a ten-year
exploration and development program at a cost of approximately
$300 million.
The Registrant negotiated a $350 million financing agreement
with Petek A.G., a Swiss investment firm, which required the
Registrant to issue 1.5 billion shares of its common stock for
payment against delivery. In November 1996, the shares were
electronically delivered to Barclay's Bank in London, United
Kingdom, and Hong Kong Shanghai Bank in Hong Kong against payment
of US$350 million. In February, 1997, the shares were returned
by Barclays Bank and Hong Kong Shanghai Bank to the Registrant
and Barclay's withdrew from the financing.
The Registrant and its counsel have taken the position that
the individuals, companies and financial institutions which
either profited from the referenced transaction or which
participated in the transaction should compensate the Registrant
for the use of its securities and for breach of the original
contractual arrangements to the Registrant's detriment. The
Registrant's lawyers are investigating the Registrant's remedies
as a result of these transactions and are confident that the
Registrant will be successful.
The Registrant is continuing its efforts to finance the
Paraguayan hydrocarbon concessions. In late 1997 and early 1998
the Asian economic crisis adversely affected the world price of
oil, however, activity in the oil and gas industry has
historically been cyclical and the Registrant considers that this
crisis has already been discounted and should not adversely
affect ongoing negotiations. Although it is anticipated that
European telephony and telecommunication standards should reach
North American standards within the next two years, the
Registrant cannot fully utilize its systems or services in Europe
until those standards have been met. In order to conserve its
financial resources, the Registrant has decided to scale down its
European operations until promotion of its technology is
warranted by advances in the European telecommunications
standards.
Financial Information About Industry Segments.
Since inception, Registrant revenues, operating profit or loss
and identifiable assets have all been attributable to the
telecommunications industry and the hydrocarbon industry. The
Registrant no longer has any purpose to file financial
information regarding the amounts of revenue from sales to
unaffiliated customers, operating profit or loss and identifiable
assets attributable to this segment inasmuch as the Registrant no
longer has revenue generated from its telecommunications assets
or from active oil and gas assets. The Registrant has no
revenue, and no other relevant financial information, associated
with the telecommunications industry or with the charitable fund
raising industry to date.
Financial Information About Foreign and Domestic Operations and
Export Sales.
The Registrant opened offices in Germany and Switzerland to
assist in financing the various projects of the Registrant. It
entered into an Option Agreement with respect to hydrocarbon
concessions in the Republic of Paraguay, but there are no foreign
operations or export sales at this time. This is changing
rapidly and it is anticipated that the Registrant will have
expanded its operations in Europe and South America by fiscal
2001.
Competition.
The Registrant's activities in the oil exploration industry as
well as in the telecommunications and fund raising industries
involve two extremely competitive industries. The oil industry
in America, after a decade-long decline, with a price collapse in
the mid-eighties with a corresponding decline in demand, made a
significant comeback in the mid 1990's before declining again in
late 1997 and rebounding in the late 1990's. The fund raising
industry and the telecommunications industry are among the most
rapidly growing industries in the world. In both industries, the
Registrant is one of thousands of firms which make money, or
propose to make money, from its operations. In the oil industry,
the Registrant faces competition from hundreds of individual
company's and a number of giant corporations like Exxon, Shell,
and others. In the telecommunications industry, competition
comes from giant corporations like AT&T and from thousands of
small companies, offering an ever-increasing array of
telecommunications products and services; and in the charitable
fund raising industry, there are a number of organizations which
raise money, and a myriad of charitable organizations formed for
a myriad of purposes. Competition is both general and specific:
there are a number of approaches to making money in the oil
exploration industry, and there are many other ways to raise
money for charities besides advertising 1-900 telephone numbers.
General Discussion.
The Registrant has no other patents, trademarks, licenses,
franchises or concessions. Telecommunications services and
charitable fund raising are not seasonal activities. Due to the
nature of the Registrant's business, there are no significant
working capital items carried on its books (i.e., accounts
receivable, inventory, etc.), although a significant amount of
equipment is carried on its books. Due to the nature of the
Registrant's business, there is no backlog of orders. There is
no portion of the Registrant's business which may be subject to
renegotiation of profits or termination of contracts or
subcontracts at the election of government.
Employment.
The Registrant has no full-time employees. The policy of the
Registrant has been to utilize consultants and other
professionals on and ad hoc, when needed, basis until the size of
the Registrant warrants the employment of paid employees. The
Registrant anticipates the need for paid employees during fiscal
2001. The Registrant considers its employee relations to be
satisfactory under the circumstances.
ITEM 2. DESCRIPTION OF PROPERTY.
The Registrant is provided office space by Xanthos
Management Corporation as part of the management services
rendered by this company to the Registrant.
ITEM 3. LEGAL PROCEEDINGS.
The Registrant is not a party to any material pending legal
proceedings and, to the best of its knowledge, no such action by
or against the Registrant has been threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Market Information.
The Registrant's shares of common stock are traded on the Over
the Counter Bulletin Board (under the symbol "ECMM"; prior to
October 28, 1999 the symbol was "ETCP") and the range of closing
bid prices shown below is as reported by that exchange. The
quotations shown reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not necessarily
represent actual transactions.
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on September 30, 2000
High Low
Quarter Ended October 31, 1999 * 0.43 0.25
Quarter Ended December 31, 1999 ** 2.81 0.25
Quarter Ended March 31, 2000 0.81 0.37
Quarter Ended June 30, 2000 0.44 0.10
* The shares only trading on one day during the month of October 1999.
** The fiscal year of the Registrant was changed to June 30,
effective on November 22, 1999.
Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended on September 30, 1999
High Low
Quarter Ended October 31, 1998 0.13 0.12
Quarter Ended January 31, 1999 0.13 0.10
Quarter Ended April 30, 1999 0.12 0.10
Quarter Ended July 31, 1999 0.50 0.10
Holders of Common Equity.
As of December 1, 2000, there were 8,244 shareholders of record
of the Registrant's common stock.
Dividend Information.
The Registrant has not declared or paid a cash dividend to
stockholders since it was incorporated. The Board of Directors
presently intends to retain any earnings to finance Registrant
operations and does not expect to authorize cash dividends in the
foreseeable future. Any payment of cash dividends in the future
will depend upon the Registrant's earnings, capital requirements
and other factors.
Sales of Unregistered Securities.
The Registrant made the following sales of unregistered
securities during the fiscal year ended on September 30, 2000:
On July 3, 2000, the Registrant sold 15,000,000 shares of
its common stock to Rukos Security Advice AG of Frankfurt.
Germany. The total consideration received for this transaction
was $1,500,000, or $0.10 per share. Attached to each share, was
a warrant to purchase one share of common stock of the
Registrant, exercisable at $0.15 per shares for a period of three
years from July 3, 2000.
On November 17, 1999, the Registrant sold 5,000,000 shares
of its common stock to Rukos Security Advice AG of Frankfurt.
Germany. The total consideration received for this transaction
was $500,000, or $0.10 per share. Attached to each share, was a
warrant to purchase one share of common stock of the Registrant,
exercisable at $0.15 per shares for a period of two years from
November 17, 1999.
These transactions were accomplished pursuant to Regulation
S promulgated under Securities Act of 1933. No discounts or
commission were paid in connection with these sales. The class
of persons to whom these sale was made is an accredited investor.
ITEM 6. PLAN OF OPERATION.
The following discussion should be read in conjunction with the
financial statements of the Registrant and notes thereto
contained elsewhere in this report.
Twelve-Month Plan of Operation.
The Registrant will continue to pursue contracts with both the
Democratic and Republican parties for the purpose of fund raising
using the Registrant's "pay-per-call" 1 900 telephone numbers.
The Company will integrate its "esearchb2b.com" web Meta Crawler
with the 1 900 telephone numbers to facilitate the dissemination
of the 1 900 numbers to millions of internet users.
The Registrant owns several high profile Avanity@ 1 900 telephone
numbers. A "vanity" telephone number is one which can be
associated with a word made from the telephone keys on the touch
tone keypad. The Company has combined proprietary 1 900 "pay-
per-call" telephone numbers with voice processing,
telecommunication and internet technology to raise money for
political parties and charitable foundations and organizations.
The Registrant has proposed to pay 65% of gross revenues
collected by the telephone companies to the political parties and
charitable foundations and organizations under contract.
The Registant owns and is currently negotiating contracts for two
high profile "pay-per-call" 1 900 telephone numbers: 1 900
"DEMOCRAT" and 1 900 "REPUBLICAN". These contracts could result
in each of these parties raising $100's of millions per year in
election years. Each of these political parties have over 73
million registered members. Of these, less than 5% make any
substantial financial contributions to the political process.
Why? Because the high cost of raising money, about $27 to
solicit money for any fund raising project, made it necessary to
seek political contributions of $50 to $100 from individuals.
The amounts pledged would then have to be collected either in
person, by credit card or by mailing a cheque. Eventually, only
18% to 22% of amounts pledged are received by the party. To ask
for $50 to $100 precluded about 92% of the population from making
political contributions and, therefore, participating in the
political process.
Until now, about 95% of the registered members of both parties
have not been able to contribute to election campaigns because
there has not been an economic way to collect small contributions
from many individuals. Lobbyists have thrived on this and the
political partisan system has developed to where it is today.
Lobbyists contribute to election campaigns for only one reason;
to have favourable legislation passed.
The Registrant can help in soliciting tens of millions of
individuals that have never before been solicited for funds, ask
for only $10 to $20 and guarantee that payment of 65% (not 18% to
22%) of the gross revenues will be received by the political
parties and charitable organizations. What does this mean to to
the various foundations and political parties that are going to
benefit from this program. If only 5% of the 73 million
registered Democrats and Republicans called the 1 900 "pay-per-
call" fund raising telephone number to contribute just $10, in
excess of US$14 million per month would be raised or
approximately US$1.4 million / month to the Registrant.
By financing election campaigns through the use of
telecommunications (1 900 "DEMOCRAT"/"1 900 REPUBLICAN"),
candidates will be able to reach millions of people who have
never been asked to contribute to the electoral process.
Candidates will no longer have to spend a major portion of their
time away from discussing the issues in their attempts to raise
money . The use of 1 900 "DEMOCRAT" and 1 900 "REPUBLICAN" for
fund raising would level the playing field for candidates and
keep good candidates, that may otherwise be unable to maintain a
presence, in the political arena.
Capital Expenditures.
There were no material capital expenditures during the
fiscal year ended June 30, 2000.
Risk Factors Connected with Plan of Operation.
(a) Limited Prior Operations.
The Registrant has only had limited prior operations and has
embarked on a new business direction within the past few years,
which has not generated any revenur for the Registrant. The
company has incurred losses from operations: $424,431 for the
fiscal year ended September 30, 2000 and $403,642 for the fiscal
year ended September 30, 1999. At September 30, 2000, the
Registrant had an accumulated deficit of $25,765,651. Thus, the
Registrant is subject to all the risks inherent in the creation
of a new business. The likelihood of the success of the
Registrant must be considered in the light of the problems,
expenses, difficulties, complications, and delays frequently
encountered in connection with the expansion of a business and
the competitive environment in which the Registrant operates.
Unanticipated delays, expenses and other problems such as
setbacks in product development, and market acceptance are
frequently encountered in connection with the expansion of a
business.
Consequently, there is only a limited operating history upon
which to base an assumption that the Registrant will be able to
achieve its business plans. In addition, the Registrant has only
limited assets. As a result, there can be no assurance that the
Registrant will generate significant revenues in the future; and
there can be no assurance that the Registrant will operate at a
profitable level. If the Registrant is unable to obtain
customers and generate sufficient revenues so that it can
profitably operate, the Registrant's business will not succeed.
As a result of the fixed nature of many of the
Registrant's expenses, the Registrant may be unable to adjust
spending in a timely manner to compensate for any unexpected
delays in the development and marketing of the Registrant's
products or any capital raising or revenue shortfall. Any such
delays or shortfalls will have an immediate adverse impact on the
Registrant's business, operations and financial condition.
(b) Significant Working Capital Requirements.
The working capital requirements associated with the
plan of business of the Registrant will continue to be
significant. The Registrant anticipates, based on currently
proposed assumptions relating to its operations (including with
respect to costs and expenditures and projected cash flow from
operations), that it can generate sufficient financing through a
floating debenture with Xanthos Management Corporation to
continue its operations for an indefinite period at the current
level without requiring additional financing. The Registrant
does not aniticpate, ats the present time, needing to raise any
additional capital in the next twelve months to implement its
sales and marketing strategy and grow. In the event that the
Registrant's plans change or its assumptions change (due to
unanticipated expenses, technical difficulties, or otherwise),
the Registrant would be required to seek additional financing
sooner than currently anticipated or may be required to
significantly curtail or cease its operations.
(c) Success of Registrant Dependent on Management.
The Registrant's success is dependent upon the hiring of key
administrative personnel. None of the Registrant's officers,
directors, and key employees have an employment agreement with
the Registrant; therefore, there can be no assurance that these
personnel will remain employed by the Registrant after the
termination of such agreements. Should any of these individuals
cease to be affiliated with the Registrant for any reason before
qualified replacements could be found, there could be material
adverse effects on the Registrant's business and prospects. In
addition, management has no experience is managing companies in
the same business as the Registrant.
In addition, all decisions with respect to the management of
the Registrant will be made exclusively by the officers and
directors of the Registrant. Investors will only have rights
associated with minority ownership interest rights to make
decision which effect the Registrant. The success of the
Registrant, to a large extent, will depend on the quality of the
directors and officers of the Registrant. Accordingly, no person
should invest in the shares unless he is willing to entrust all
aspects of the management of the Registrant to the officers and
directors.
(d) Control of the Registrant by Officers and Directors.
The Registrant's officers and directors beneficially
own approximately 4% of the outstanding shares of the
Registrant's common stock. As a result, such persons, acting
together, have the ability to influence over all matters
requiring stockholder approval (especially since the remainder of
the 39,603,990 issued and outstanding shares are owned by over
9,000 shareholders). Accordingly, it could be difficult for an
individual investor to effectuate control over the affairs of the
Registrant. Therefore, it should be assumed that the officers,
directors, and principal common shareholders who control the
majority of voting rights will be able, by virtue of their stock
holdings, to control the affairs and policies of the Registrant.
(f) Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation include
provisions to eliminate, to the fullest extent permitted by the
Nevada Revised Statutes as in effect from time to time, the
personal liability of directors of the Registrant for monetary
damages arising from a breach of their fiduciary duties as
directors. The By-Laws of the Registrant include provisions to
the effect that the Registrant may, to the maximum extent
permitted from time to time under applicable law, indemnify any
director, officer, or employee to the extent that such
indemnification and advancement of expense is permitted under
such law, as it may from time to time be in effect. Any
limitation on the liability of any director, or indemnification
of directors, officer, or employees, could result in substantial
expenditures being made by the Registrant in covering any
liability of such persons or in indemnifying them.
(h) Potential Conflicts of Interest Involving Management.
The officers and directors have other interests to which they
devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or
serve on boards of directors, and each will continue to do so
notwithstanding the fact that management time may be necessary to
the business of the Registrant. As a result, certain conflicts of
interest may exist between the Registrant and its officers and/or
directors which may not be susceptible to resolution. All of the
potential conflicts of interest will be resolved only through
exercise by the directors of such judgment as is consistent with
their fiduciary duties to the Registrant. It is the intention of
management, so as to minimize any potential conflicts of
interest, to present first to the board of directors to the
Registrant, any proposed investments for its evaluation.
(i) Influence of Other External Factors on Prospects for Registrant.
The industry of the Registrant in general is a speculative
venture necessarily involving some substantial risk. There is no
certainty that the expenditures to be made by the Registrant will
result in a commercially profitable business. The marketability
of its products will be affected by numerous factors beyond the
control of the Registrant. These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect companies' spending. Factors which leave less money in
the hands of potential customers of the Registrant will likely
have an adverse effect on the Registrant. The exact effect of
these factors cannot be accurately predicted, but the
combination of these factors may result in the Registrant not
receiving an adequate return on invested capital.
(j) Non-Cumulative Voting
Holders of the shares are not entitled to accumulate their votes
for the election of directors or otherwise. Accordingly, the
holders of a majority of the shares present at a meeting of
shareholders will be able to elect all of the directors of the
Registrant, and the minority shareholders will not be able to
elect a representative to the Registrant's board of directors.
(k) Absence of Cash Dividends
The board of directors does not anticipate paying cash dividends
on the shares for the foreseeable future and intends to retain
any future earnings to finance the growth of the Registrant's
business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements, and the general
operating and financial condition of the Registrant, and will be
subject to legal limitations on the payment of dividends out of
paid-in capital.
(l) Limited Public Market for Registrant's Securities.
There has been only a limited public market for the shares of
common stock of the Registrant. There can be no assurance that
an active trading market will develop or that purchasers of the
shares will be able to resell their securities at prices equal to
or greater than the respective initial public offering prices.
The market price of the shares may be affected significantly by
factors such as announcements by the Registrant or its
competitors, variations in the Registrant's results of
operations, and market conditions in the retail, electronic
commerce, and internet industries in general. The market price
may also be affected by movements in prices of stock in general.
As a result of these factors, investors in the Registrant may not
be able to liquidate an investment in the shares readily, or at
all.
(m) No Assurance of Continued Public Trading Market; Risk of Low
Priced Securities.
There has been only a limited public market for the
common stock of the Registrant. The common stock of the
Registrant is currently quoted on the Over the Counter Bulletin
Board. As a result, an investor may find it difficult to dispose
of, or to obtain accurate quotations as to the market value of
the Registrant's securities. In addition, the common stock is
subject to the low-priced security or so called "penny stock"
rules that impose additional sales practice requirements on
broker-dealers who sell such securities. The Securities
Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure in connection with any trades involving a
stock defined as a penny stock (generally, according to recent
regulations adopted by the U.S. Securities and Exchange
Commission, any equity security that has a market price of less
than $5.00 per share, subject to certain exceptions), including
the delivery, prior to any penny stock transaction, of a
disclosure schedule explaining the penny stock market and the
risks associated therewith. The regulations governing low-
priced or penny stocks sometimes limit the ability of broker-
dealers to sell the Registrant's common stock and thus,
ultimately, the ability of the investors to sell their securities
in the secondary market.
(n) Effects of Failure to Maintain Market Makers.
If the Registrant is unable to maintain a National
Association of Securities Dealers, Inc. member broker/dealers as
market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market. There can be no
assurance the Registrant will be able to maintain such market
makers.
(o) Shares Eligible For Future Sale.
All of the 1,754,233 shares of common stock which are currently
held, directly or indirectly, by management have been issued in
reliance on the private placement exemption under the Securities
Act of 1933. Such shares will not be available for sale in the
open market without separate registration except in reliance upon
Rule 144 under the Securities Act of 1933. In general, under
Rule 144 a person (or persons whose shares are aggregated) who
has beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may be
deemed affiliates of the Registrant (as that term is defined
under that rule) would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of 1%
of the then outstanding shares of common stock, or the average
weekly reported trading volume during the four calendar weeks
preceding such sale, provided that certain current public
information is then available. If a substantial number of the
shares owned by these shareholders were sold pursuant to Rule 144
or a registered offering, the market price of the common stock
could be adversely affected.
Forward Looking Statements.
The foregoing Plan of Operation contains "forward looking
statements" within the meaning of Rule 175 of the Securities Act
of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934,
as amended, including statements regarding, among other items,
the Registrant's business strategies, continued growth in the
Registrant's markets, projections, and anticipated trends in the
Registrant's business and the industry in which it operates. The
words "believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements. These forward-looking statements are based largely
on the Registrant's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the
Registrant's control. The Registrant cautions that these
statements are further qualified by important factors that could
cause actual results to differ materially from those in the
forward looking statements, including, among others, the
following: reduced or lack of increase in demand for the
Registrant's products, competitive pricing pressures, changes in
the market price of ingredients used in the Registrant's products
and the level of expenses incurred in the Registrant's
operations. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained
herein will in fact transpire or prove to be accurate. The
Registrant disclaims any intent or obligation to update "forward
looking statements."
ITEM 7. FINANCIAL STATEMENTS.
Financial statements as of and for the year ended September
30, 2000, and for the year ended September 30, 1999 are presented
in a separate section of this report following Item 13.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The names, ages, and respective positions of the directors
and executive officers of the Registrant are set forth below.
The directors named below will serve until the next annual
meeting of the Registrant's stockholders or until their
successors are duly elected and have qualified. Directors are
elected for a term unitl the next annual stockholders' meeting.
Officers will hold their positions at the will of the board of
directors, absent any employment agreement, of which none
currently exist or are contemplated. There are no arrangements,
agreements or understandings between non-management shareholders
and management under which non-management shareholders may
directly or indirectly participate in or influence the management
of the Registrant's affairs. There are no other promoters or
control persons of the Registrant. There are legal proceedings
involving the directors of the Registrant.
Directors and Executive Officers.
(a) Sidney B. Fowlds, President/Chairman of the Board.
Mr. Fowlds, age 60, attended the University of British Columbia
between 1958 and 1963 majoring in economics and political
science. In 1967, Mr. Fowlds joined Doherty Roadhouse & McQuaig
Brothers, one of the largest Investment Dealers in Canada. While
with Doherty Roadhouse, Mr. Fowlds worked in all departments of
the securities industry, including on the floor of the Toronto
Stock Exchange.
In 1969 Mr. Fowlds was appointed vice-president of a mining
company in British Columbia. A year later he became the largest
shareholder and Chairman of the Board. Mr. Fowlds restructured
the Registrant and formed Jordan River Mines Ltd. This company
employed approximately two hundred men with an annual payroll in
excess of $8 million. In 1974 the world price of copper fell
below US$0.40 per pound and the mine became uneconomic to
continue operations.
In the 1980s, Mr. Fowlds diversified into the oil and gas
industry and was Chairman of the Board of several public and
private oil and gas companies. Mr. Fowlds was a financial
consultant to these companies and during this period raised
millions of dollars for exploration and development of land
parcels in Louisiana, Texas, California and two multi-million
acre Government Concessions in Papua New Guinea.
In 1989, Mr. Fowlds changed the direction of the Registrant
to telecommunications, voice technology and the PC computer
industry. The Registrant developed the E.T. "TeleManagement" 1
900 and 1 800 and VoiceMail systems, raising more than $5 million
for research, development and marketing. Mr. Fowlds also
controls North American Oil and Gas, . Mr. Fowlds has been a
director of the Registrant since October 1986.
(b) John Johnston, Vice President/Director.
Mr. Johnson, age 72, retired as a real estate developer in 1995.
Mr. Johnson formerly designed 18 hole golf course and real estate
developments. Mr. Johnston is a former winner of the Canadian
Amateur Golf Championship and is a member of the British Columbia
Hall of Fame. He has been a director of the Registrant since
October 1986.
(c) Robert M. Miller, Director.
Mr. Miller, age 58, retired as a financial consultant in 1995.
Formerly he was a stock broker and financial and real estate
consultant in London, England; Brisbane, Australia and Vancouver,
B.C., Canada. Mr. Miller has been a director of the Registrant
since October 1992.
(d) Anthony V. Feimann, Secretary-Treasurer.
Mr. Feimann, age 60, retired in 1993 as a financial consultant.
He graduated with a Bachelor of Arts degree in Econometrics from
the University of British Columbia in 1963. This included one
year of post-graduate work. Mr. Feimann worked for a national
firm of Chartered Accountants for five years and was in public
practice in accounting for an additional two years. He was co-
founder of Econometrica, Inc., an economic consulting company
specializing in econometrics based in Santa Barbara, California.
Compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially
own more than 10% of any class of the Registrant's equity
securities to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission
("SEC"). Executive officers, directors and beneficial owners of
more than 10% of any class of the Registrant's equity securities
are required by SEC regulations to furnish the Registrant with
copies of all Section 16(a) forms they file.
Based solely on a review of the with respect to the fiscal year
ended September 30, 2000 and subsequently, the Registrant is
aware that Form 5's for each of the directors and executive
officers were not filed by the due date of November 14, 2000;
they are now in the process of being prepared for filing. The
Registrant is unaware that any other required reports were not
timely filed.
ITEM 10. EXECUTIVE COMPENSATION.
(a) The current officers and directors have not received
any compensation to date in such capacities. They will not be
remunerated until the Registrant turns profitable.
(b) There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees of the
Registrant in the event of retirement at normal retirement date
as there is no existing plan provided for or contributed to by
the Registrant.
(c) The Registrant has adopted a non-qualified Stock Incentive
Plan for its employees and consultants, but no options or shares
have yet been issued under this plan.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth information regarding the
beneficial ownership of shares of the Registrant's common stock
as of December 1, 2000 (39,603,990 issued and outstanding) (the
Registrant also currently has the following warrants which are
presently exercisable: (a) 5,000,000 warrants issued on
November 17, 1999, exercisable at $0.15 per share until
November 17, 2001; and (b) 15,000,000 warrants issued on July 3,
2000, exercisable at $0.15 per share until July 3, 2003) by (i)
all stockholders known to the Registrant to be beneficial owners
of more than 5% of the outstanding common stock; and (ii) all
officers and directors of the Registrant, individually and as a
group (each person has sole voting power and sole dispositive
power as to all of the shares shown as beneficially owned by
them):
Title of Name and Address of Amount and Percent
Class Beneficial Owner Nature of of
Beneficial Class
Ownership(1)
Common Sidney B. Fowlds 1,754,233(2) 7.13%
Stock 3900 Birch Street, Suite 113
Newport Beach, Ca 92660
Common John Johnston 0 0.00%
Stock 3900 Birch Street, Suite 113
Newport Beach, Ca 92660
Common Robert M. Miller 0 0.00%
Stock 3900 Birch Street, Suite 113
Newport Beach, Ca 92660
Common Anthony V. Feimann 0 0.00%
Stock 3900 Birch Street, Suite 113
Newport Beach, Ca 92660
Common Stock Shares of all directors and 1,754,233 4.43%
Stock executive officers as a group (4
persons)
(1) None of these security holders has the right to acquire any
amount of the shares within sixty days from options, warrants,
rights, conversion privilege, or similar obligations.
(2) These shares are actually held in the name of North American
Oil and Gas, a company controlled by Mr. Fowlds.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Other than as set forth below, since the beginning of the
Registrant's last fiscal year, there have not been any
transaction that have occurred between the Registrant and its
officers, directors, and five percent or greater shareholders.
As the Registrant has been unable to meet its financial
obligations as they became due, one of the shareholders of the
Company, Xanthos Management Corporation (formerly known as Texas
Petroleum Corporation), offered to pay the obligations on behalf
of the Company and agreed to make payments as required, such
payments secured by and subject to the terms of a debenture duly
filed and registered with the Secretary of State for the State of
Colorado. This firm is controlled by the adult daughter of Mr.
Fowlds.
This debenture, dated October 31, 1992, is secured by
the Registrant's assets of the "TeleManagement" System, 1-900
propriety numbers, 1-800 services and the eSearchb2b Web Crawler.
The total aggregate principal amount of the debenture is
$5,000,000.00 that may be outstanding at any time and interest
shall be payable at ten (10) percent per annum. At the
Registrant's last annual meeting, the shareholders of the
Registrant authorized management fees of $38,000 per month for
office, telephone, automobile and travel, and promotion be paid
to Xanthos Management Corporation.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits.
Exhibits included or incorporated by reference herein are set
forth under the Exhibit Index.
Reports on Form 8-K.
The following report on Form 8-K was filed in the fourth
quarter of the fiscal year ended on September 30, 2000:
A Form 8-K filed on August 18, 2000 which reported the following:
(a) The acquisition of s significant amount of assets by an
Acquisition Agreement under which the Registrant acquired all of
the proprietary software and software rights to the Web Meta
Crawler Search Engine "esearchb2b.com" from Rukos Security Advice
A.G., a German corporation, for the sum of $1,250,000 for such
acquisition.
(b) By an Agreement and Plan of Merger, dated June 5, 2000
between eCom.com, Inc., a Colorado corporation, and eCom.com,
Inc., a Nevada corporation, the domicile of the Registrant was
changed to the State of Nevada.
Index to Financial Statements and Schedules Page
Report of Independent Accountants 21
Balance Sheet as of September 30, 2000 22
Statements of Operations for the year ended
September 30, 2000 and the year ended September 30, 1999 23
Statements of Stockholders' Equity for the year ended
September 30, 2000 and the year ended September 30, 1999 24
Statements of Cash Flows for the year ended
September 30, 2000 and the year ended September, 1999 25
Notes to Financial Statements 26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
eCom.com, Inc.
Dated: January 15, 2001 By: /s/ Sidney B. Fowlds
Sidney B. Fowlds, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the date
indicated:
Signature Title Date
/s/ Sidney B. Fowlds President/Chairman of the January 15, 2001
Sidney B. Fowlds Board
/s/ John Johnston Vice President/Director January 15, 2001
John Johnston
/s/ Robert M. Miller Director January 15, 2001
Robert M. Miller
/s/ Anthony V. Feimann Secretary/Treasurer January 15, 2001
Anthony V. Feimann (principal financial and
accounting officer)
REPORT OF INDEPENDENT AUDITOR
Board of Directors
eCom.com, Inc.
(Formerly E.T. Capital, Inc.)
I have audited the accompanying Balance Sheets of eCom.com, Inc.
(formerly E.T. Capital, Inc.) as of September 30, 2000, and the
Statements of Operations, Stockholders' Equity and Cash Flows for
the years ended September 30, 2000 and 1999. The financial
statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these financial
statements based on my audit.
My examination was made in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance as to 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 evidence supporting
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financil statements referred to above present
fairly, in all material respects, the financial position of
eCom.com, Inc. (formerly E.T. Capital, Inc.) as of September 30,
2000, and the results of its operations and changes in cash flow
for the years ended September 30, 2000, and 1999, in conformity
with generally accepted accounting principles applied on a
consistent basis.
/s/ Janet Loss, C.P.A., P.C.
Janet Loss, C.P.A., P.C.
Denver, Colorado
November 29, 2000
eCom.com, Inc.
BALANCE SHEET
SEPTEMBER 30, 2000
ASSETS
Current Assets:
Cash $ 250,499
Total Current Assets 50,499
Fixed Assets
Equipment (Note 2) 534,886
Less Accumulated Depreciation (534,886)
Net Fixed Assets 0
Other Assets
eSEarchB2B Web Crawler (Note 9) 1,250,000
Rights' Title, net of amortization (Note 2) 1
Product Development Expenditures (Note 2) 60,962
Total Other Assets 1,310,963
Total Assets 1,561,462
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable 1,800
Long-Term Liabilities
Debenture Payable, Xanthos Management Corporation 739,365
Shareholders' Equity:
Preferred Stock, par value $0.001,
10,000,000 shares authorized, none outstanding
Common Stock , $0.01 par value
10,000,000,000 shares authorized,
24,595,739 issued and outstanding 4,716,079
Paid-In-Capital (in excess of par value) 21,869,869
Accumulated Deficit (25,765,651)
Shareholders' Equity 820,297
Total Liabilities & Shareholders' Equity $ 1,561,462
The accompanying notes are an integral part of the financial statements
eCom.com, Inc.
STATEMENTS OF OPERATIONS
For the Year For the Year
Ended Ended
September 30 September 30
2000 1999
Revenues $ 0 $ 0
General And Administrative Expenses:
Accounting 1,800 1,800
Amortization 60,960 60,960
Auto Expenses, gas and repairs 12,000 12,000
Consulting Fees 103,090 0
Rent Expense 50,400 50,400
Telephone Expense 36,000 36,000
Travel and Promotions 180,000 180,000
Total General And
Administrative Expenses 444,250 341,160
Net (Loss) Before
Other Income (Expenses) (444,250) (341,160)
Other Income And (Expenses):
Forgiveness of Debt 82,007 0
Interest Expense (62,188) 62,482
Total Other Income And (Expenses) 19,819 (62,482)
Net (Loss) (424,431) (403,642)
Net (Loss) Per Share $(.0182) $(.0069)
Weighted Average Number
Of Shares Outstanding 23,347,239 58,787,216
The accompanying notes are an integral part of the financial statements.
eCom.com, Inc.
STATEMENT OF STOCKHOLDERS' EQUITY
Class A Common Additional Deficit Total
$.01 Stock Paid-In Stockholders
Shares Par Value Capital Equity
Amount (Deficit)
Balance
September
30, 1998 58,787,216 4,516,079 20,069,869 (24,937,578) (351,630)
Net (Loss)
for the year
ended
September
30, 1999 0 0 0 (403,642) (403,642)
Balance,
September
30,1999 58,787,216 4,516,069 20,069,869 (25,341,220) (755,272)
1 for 3
reverse
stock split (39,191,477 0 0 0 0
Private
Placement of
common
shares @
$0.10, with
warrants
(Note 10) 5,000,000 50,000 450,000 0 500,000
Private
placement of
common
shares @
$0.10, with
warrants
(Note 10) 15,000,000 150,000 1,350,000 0 1,500,000
Net
(Loss)for
the Year
Ended Sept.
30,2000 0 0 0 (424,431) (424,431)
Balance
Sept.30, 2000 $39,595,739 $4,716,079 $21,869,869 $(25,765,651) $ 820,297
The accompanying notes are an integral part of the financial statements
eCom.com, Inc.
STATEMENTS OF CASH FLOWS
For the Year For the Year
Ended Ended
September 30 September 30
2000 1999
Net Cash Flows From Operating Activities:
Net (loss) $ (424,431) $ (403,642)
Adjustments to Reconcile
Net (Loss) to Cash (Loss)
From Operating Activities:
Amortization 60,960 60,960
Less non-cash working
Capital items:
Increase (Decrease) in
Accounts Payable (120,207) 1,800
Sub-total (483,678) (340,882)
Investing Activity:
Purchase of eSearchb2b Web
Crawler proprietary software (1,250,000) 0
Financing Activity:
Increase (Decrease) in
Debenture Payable (15,823) 290,555
Issuance of shares of common stock 2,000,000 0
1,984,177 290,555
Increase (Decrease) In Cash 250,499 (50,327)
Cash, Beginning of Period 0 50,327
Cash, End of Period 250,499 0
The accompanying notes are an integral part of the financial statements
eCom.com, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY
Caribou Energy, Inc. was incorporated in Colorado in 1978
("Company"). The Company was originally engaged in oil and gas
exploration from its inception until 1988. In 1988, the Company
abandoned all of its oil and gas properties and all accounts
associated with oil and gas have been written off.
In 1992, the Company secured all the rights, title and interest
to the E.T. "TeleManagement" VoiceMail System and 1-800 and 1-900
"pay-per-call" telephone numbers and information center from a
Nevada corporation, E.T. Network, Inc., for $6,650,000.00. This
purchase was financed by the sale of 20,000,000 Regulation "S"
restricted shares of the Company.
E.T. Network, Inc. was a Nevada corporation which owned the
world-wide rights to the E.T. "TeleManagement" VoiceMail System
and the 1-800 and 1-900 "pay-per-call" telephone numbers and
information center. Its wholly-owned subsidiary was Encryption
Technology Canada, Inc. (E.T.). This subsidiary owned the rights
for the VoiceMail system in Canada.
The assets of E.T. Network, Inc. (the Nevada Corporation) and
Encryption Technology Canada, Inc. were then transferred to the
Colorado Corporation. Encryption Technology Canada, Inc. has been
de-registered and is no longer in existence.
As of October 1, 1994, the Company changed its name to E.T.
Capital, Inc. As of October 15, 1999, the Company changed its
name from E.T. Capital, Inc. to eCom.com, Inc.
On June 10, 2000, the Company caused the jurisdiction of the
Company to be moved from the State of Colorado to the State of
Nevada and the Articles of Incorporation of eCom.com, Inc. are
now governed by the Laws of the State of Nevada. The total
number of shares of all classes of stock which the Corporation
shall have the Authority to issue is 200,000,000 par value of,
consisting of 190,000,000 shares of common stock par value $0.001
and 10,000,000 shares of Preferred stock par value $0.001.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Method of Accounting
The company is on the accrual basis of accounting for financial
statements and income tax purposes.
Fixed Assets and Depreciation
Fixed assets are made up of computer equipment, cellular phones
and furniture. The furniture was put into use October 1, 1991,
and equipment was put into use October 1, 1992. Both furniture
and equipment are fully depreciated.
Amortization
The purchased rights for the TeleManagement VoiceMail system and
the 1-800 and 1-900 "pay-per-call" telephone numbers were
amortized over the estimated useful life of four (4) years.
Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.
NOTE 3 - RELATED PARTIES
As the corporation was unable to meet its financial obligations
as they became due, one of the major shareholders of the Company,
Xanthos Management Corporation, offered to pay the obligations on
behalf of the Company and agreed to make payments as required,
such payments secured by and subject to the terms of a debenture
duly filed and registered with the Secretary of State for the
State of Colorado.
At the annual general meeting, the shareholders of the Company
authorized management fees of $38,000 per month for office,
telephone, automobile and travel, and promotion be paid to
Xanthos Management Corporation.
NOTE 4 - DEBENTURE PAYABLE, BEARER
This debenture is dated October 31, 1992, and is secured by the
company assets of the "TeleManagement" System, 1-900 propriety
numbers, 1-800 services and the eSearchb2b Web Crawler. The total
aggregate principal amount of the debenture shall be
$5,000,000.00 may be outstanding at any time and interest shall
be payable at ten (10) percent per annum.
NOTE 5 - FISCAL YEAR
The Company adopted a fiscal year end of September 30th.
NOTE 6 - CURRENCY EXCHANGE
The financial statements are presented in dollar amounts based on
the United States Currency Exchange.
NOTE 7 - ACQUISITIONS AND FINANCING
In April, 1996 the Company acquired a majority control of
Spectrum Oil Corporation and agreed to finance Spectrum's
hydrocarbon concessions in Paraguay totaling approximately 15
million acres subject to the terms of an agreement between
Spectrum and the Company. Geologic and seismic data indicate
that there could be tens of millions of barrels of oil in the
leased area. The Company agreed to acquire majority control of
Spectrum and to finance Spectrum Oil=s hydrocarbon concessions in
the Republic of Paraguay subject to verification of Spectrum=s
agreements under which they held the development rights to the
concessions. Financing to make this acquisition and to proceed
with the work program of approximately US$18 million was subject
to the terms of an agreement between Spectrum and the Company.
The Company negotiated a Private Placement of 8 million common
shares of the Company at a price of US$1.25 carrying 8 million
share purchase warrants at a price of US$2.00 per share for a
period of two years. This financing would guarantee the funds
necessary to complete the acquisition of Spectrum and fulfill the
financial commitments of Spectrum to the oil and gas concessions
in Paraguay. In July of 1996, Spectrum was in default of its
agreements with the owners of the Paraguayan concessions and the
Company terminated all Agreements between Spectrum and the
Company. Subsequently, the 8 million shares were returned to the
Company in exchange for the majority control shares of Spectrum
that were held by the company.
NOTE 8 - OPTION AGREEMENT
The Company negotiated an Option Agreement directly with the
owners of the Hydrocarbon concessions in the Republic of
Paraguay. The terms of the Agreement require the Company to
complete a ten year exploration and development program of
approximately US$300 million. The Company negotiated a US$350
million financing with Petek AG, a Swiss Investment firm which
require the Company to issue 1.5 billion shares for payment
against delivery. In November 1996, the shares were
electronically delivered to Barclay's Bank in London, England
against payment of US$350 million. In February 1997, the shares
were returned by Barclay's to the Company and Barclay's withdrew
from the financing. The Company's lawyers are investigating the
Company's remedies as a result of these transactions.
NOTE 9 - OTHER ASSETS
The Company owns all proprietaly software and software rights and
all rights title and interest in and to the said Web Crawler and
internet web site, "eSearchb2b.com". The eSearchb2b.com's
Netsearch engine lets users search multiple engines, Web
directories and news databases simultaneously and receive one
simple summary of results. The esearchb2b.com Netsearch engine
will provide anonymous benefit to the online user who wishes to
search within one easy-to-use web site rather than surf an
negotiate through several complex web crawlers or browsers.
NOTE 10 - WARRANTS
Warrants were issued with the private placements of common stock
as follows:
Number of Shares Issuance Date Price Expiration Date
5,000,000 November 17, 1999 0.15 per 2 years
warrant
15,000,000 July 3, 2000 0.15 per 3 years
warrant
EXHIBIT INDEX
Exhibit Description
No.
2.1 Debenture issued by Xanthos Management Corporation (formerly
known as Texas Petroleum Corporation) to the Registrant, dated
October 31, 1992 (incorporated by reference to Exhibit 2 to the
Form 10-Q for the quarter ended December 31, 1992, and see below).
2.2 Agreement and Plan of Merger between eCom.com, Inc., a
Colorado corporation, and eCom.com, Inc., a Nevada corporation
(incorporated by reference to Exhibit 2 to the Form 8-K filed on
August 21, 2000).
3.1 Articles of Incorporation of the Registrant, dated May
30, 2000 (incorporated by reference to Exhibit 3.1 of the Form
10-QSB filed on August 21, 2000).
3.2 Bylaws of the Registrant, dated June 10, 2000 (incorporated
by reference to Exhibit 3.2 of the Form 10-QSB filed on August
21, 2000).
4.1 Employee Stock Incentive Plan, dated June 1, 2000
(incorporated by reference to Exhibit 4.1 of the Form S-8 filed
on June 2, 2000).
4.2 Retainer Stock Plan for Non-Employee Directors and
Consultants, dated June 1, 2000 (incorporated by reference to
Exhibit 4.2 of the Form S-8 filed on June 2, 2000).
10 Acquisition Agreement between the Registrant and Rukos
Security Advice AG, dated June 5, 2000 (incorporated by reference
to Exhibit 10 of the Form 8-K filed on August 21, 2000).
