SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter ended October 31, 1999
Commission File No. 0-10315
E-COMMERCE WEST CORP.
(Name of Registrant as specified in its charter)
Utah 95-4091368
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
83 Sherman St.
Deadwood, SD 57732
(Address of principal executive offices)
(605) 578-1299 (605) 578-1298
(Registrant's telephone number) (Registrant's fax number)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.001 Par
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
[x] Yes [ ] No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
[x] Yes [ ] No
As of October 31, 1999 12,465,614 shares of registrant's $0.001 par
value common stock were outstanding.
E-COMMERCE WEST CORP.
INDEX
Page
Number
PART 1 FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Balance Sheets (unaudited)as of October 31, 1999
and (audited)July 31, 1999 3
Unaudited Statements of Operations
3 months ended October 31, 1999 and 1998 4
Unaudited Statements of Cash Flows
3 months ended October 31, 1999 and 1998 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART 11 OTHER INFORMATION
Item 2. Change in Securities 11
Item 6. Exhibits and Reports on Form 8-K 11
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS October 31, 1999 July 31, 1999
(unaudited) (audited)
Current Assets
Cash and cash equivalents $ - $ 9,493
Note receivable - officer 33,000 33,000
Notes receivable 9,000 9,000
Inventories 16,240 16,352
Prepaid legal expense 129,166 141,667
Prepaid expenses & other assets 6,605 8,969
Total current assets 194,011 218,481
Fixed Assets
Property and equipment, net 78,690 85,704
Total assets $ 272,701 $ 304,185
October 31, 1999 July 31, 1998
LIABILITIES AND SHAREHOLDERS'
DEFICIT
Current liabilities
Accounts payable $ 138,534 $ 125,434
Book overdraft 466 -
Accrued payroll & payroll taxes 280,666 224,516
State tax payable 100 -
Note payable officer 48,609 27,561
Net liabilities of discontinued
operations 132,286 132,326
Total current liabilities 600,661 509,837
Commitments & contingencies
Shareholders' deficit
Preferred Stock, 100,000,000
authorized; 1,100,000 Series A
convertible shares issued and
outstanding 1,100 1,100
Common Stock, $0.001 par value,
150,000,000 shares authorized;
12,465,614 and 12,404,502 shares
issued and outstanding 12,466 12,404
Additional Paid in Capital 6,476,159 6,466,220
Accumulated deficit (6,817,685) (6,685,376)
Total shareholders' deficit ( 327,960) ( 205,652)
Total liabilities & shareholders'
deficit $ 272,701 $ 304,185
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
3 Months Ended
Oct. 31/99 Oct. 31/98
(unaudited) (unaudited)
Revenues $ 1,894 -
Cost of goods sold 1,067 -
Gross Profit 827
Selling, general &
administrative expenses 132,769 $ 79,518
Loss from continuing
operations ( 131,942) ( 79,518)
OTHER INCOME (EXPENSE)
Interest income 748 574
Interest expense ( 1,115) ( 1,613)
Realized gain - 3,000
Total other income (expense) ( 367) 1,961
Loss from continuing
operations before
income taxes ( 132,309) ( 77,557)
Income tax provision 0 0
Net loss from continuing
operations ( 132,309) ( 77,557)
Discontinued Operations:
Gain (loss) from operations - ( 885)
Gain (loss) from
disposition of operations - 5,535
Net gain (loss) from
Discontinued operations - 4,650
Net loss ($132,309) ($ 72,907)
Basic (loss) Per Share
From continuing operations ($0.01) ($0.01)
From discontinued operations 0.00 ( 0.01)
Total basic loss per share ($0.01) ($0.02)
Weighted-average common
shares outstanding 12,435,058 8,764,634
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
3 Months Ended
Oct. 31/99 Oct. 31/98
(unaudited) (unaudited)
Cash flows from
operating activities:
Net loss from continuing operations ($ 132,309) ($ 72,907)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation & amortization 7,014 2,429
Issuance of stock for
services rendered 10,000 250
(Increase) decrease in:
Prepaid expenses & other current assets 14,865 31,087
Inventories 112 -
Increase (decrease) in:
Accounts payable 13,100 ( 67,832)
Accrued payroll & payroll taxes 56,251 88,471
Net cash used in
continuing operations ( 30,967) ( 18,502)
Net cash used in
discontinued operations ( 40) ( 5,491)
Cash flows from
financing activities:
Receipt of officer notes receivable - 9,000
Loans from officers 21,048 -
Sale of common stock - 6,250
Book overdraft 466 __________
Net cash provided by
financing activities 21,514 15,250
Net decrease in cash and cash
equivalents ( 9,493) ( 8,743)
Cash and cash equivalents
beginning of period 9,493 71,615
Cash and cash equivalents
end of period $ - 62,872
E-COMMERCE WEST CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED October 31, 1999
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim consolidated financial statements of E-
COMMERCE WEST CORP. (the Company) are unaudited, however, in the
opinion of Management, all adjustments necessary for a fair
presentation of such financial statements have been reflected in the
interim periods presented. Such adjustments consisted only of normal
recurring items.
The significant accounting policies and certain financial
information which are normally included in financial statements
prepared in accordance with generally accepted accounting principles,
but which are not required for interim reporting purposes, have been
condensed or omitted. The accompanying financial statements of the
Company should be read in conjunction with the Company's audited
financial statements for the year ended July 31, 1999 and the notes
thereto, included in the Company's annual report on Form 10-KSB.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General Financial Condition
Results of Operations:
E-Commerce West
The Company concentrated its efforts in this quarter on westerngold.com
Corp., it's wholly-owned website which operates the Company's first year
round retail website, westerngold.com
westerngold.com
www.westerngold.com , marketing quality western products, serves a
previously ignored Internet retail market segment currently generating
in excess of $2.75 billion in annual, domestic sales. The Company has
positioned westerngold.com to be a niche market dominator as this site
is the first to market in its category. The success of this site is
dependant in part upon the ability of the Company to advertise and market
westerngold.com which in turn is dependant upon the Company's ability to
attract financing to westerngold.com in the amount sufficient to conduct
a consumer brand awareness campaign. The Company plans to implement a
strategic marketing plan designed to drive site traffic and positively
impact sales should it be successful in obtaining the requisite
financing.
Funding for westerngold.com is being sought independently from
venture capitalists although there can be no assurances that financing in
the amount and on terms acceptable to the Company will be available
within the time frame required. The ability to raise necessary financing
will depend on many factors, including the opinion of the venture
community as to the viability of westerngold.com.
The westerngold.com advertising campaign began with the placement of
four color, full page ads in four Western-lifestyle magazines commencing
with the September, October and fall issues. The results increased both
traffic to the site and memberships.
westerngold.com's Affiliate Program was implemented by Commission
Junction, a leader in affiliate marketing programs, in September, 1999.
An affiliate is an existing website which elects to place
westerngold.com's logo on their site. Any purchases on Westerngold.com
generated by affiliate's visitors either on the first visit or on a
subsequent visit within 90 days of the first visit, results in the
affiliate earning a 10% commission. Commission Junction earns 2% on all
sales and provides services including check writing, real-time sales
tracking and the issuance of 1099's to each affiliate when appropriate.
westerngold.com projected attracting 300 affiliates within the first
month. Websites that joined westerngold.com's Affiliate Program exceeded
projections and totaled over 650 within the first four weeks after the
program's launch and total over 1,000 at the end of the quarter.
Selling, general and administrative expenses for the three months
ended October 31, 1999 were $132,769 and consisted primarily of
salaries and web-site marketing and advertising charges. This is
approximately 67% more than the selling, general and administrative
expenses of $79,518 for the prior three months ended October 31, 1998.
Funds were expensed and are expected to continue to be expensed in the
ongoing development and planned operation, marketing, advertising,
promotion, new product procurement and continuous improvements to the
website and the research, planning, development and launch of other
niche websites and the re-launch of the Company's Holiday season retail
website, echristmastrees.com.
Liquidity and Capital Resources
As of October 31, 1999, the Company had no cash and cash equivalents
and a working deficit of $327,690. Since inception, the Company has
financed its operations primarily through private offerings of equity and
debt securities.
Net cash used in continuing operating activities was $30,967 for the
quarter ended October 31, 1999.
Net cash provided by financing activities was $21,514 for the quarter
ended October 31, 1999. Net cash provided by financing activities
consisted primarily of loans from officers.
The Company expects cash flows from operating activities to continue
to be negative over the next year. Depending on the success of the
Company's efforts to develop its websites, management believes that the
Company's present working capital will need to be supplemented to support
the Company's operations over the next 12 months. Current cash on hand is
not sufficient to meet ongoing operating expenses, however the Company is
optimistic that financing will be available, although no assurances can
be given that any necessary financing can be obtained on terms favorable
to the Company, or at all.
Additional working capital may be sought through additional debt or
equity private placements, additional notes payable to banks or related
parties (officers, directors or shareholders), or from industry-available
funding sources at market rates of interest, or a combination of these.
The ability to raise necessary financing will depend on many factors,
including the opinion of the venture community as to the viability of
westerngold.com, the nature and prospects of any business to be acquired
and the economic and market conditions prevailing at the time financing
is sought.
Stock Issuances
In this quarter the Company issued 61,112 common shares for
computer & website services rendered valued @ $10,000 from its active
S-8 Registration #333-59975.
Equipment Rental, Overhead Reimbursement, Rent, Support Services
The Company leases approximately 3,600 square feet for its
corporate headquarters in Deadwood, South Dakota for $1,250 per month
on a lease through May, 2000. The company has an option for a second
year at a $1,500 per month.
Year 2000 Compliance
The Company has completed a comprehensive review of its computer
systems to identify all software applications that could be affected by
the inability of many existing computer systems to process time-
sensitive data accurately beyond the year 1999, referred to as the Year
2000 or Y2K issue. The Company applied the YMARK 2000 test from NSTL
Online, the world's leading independent technology testing
organization, and has determined all its computers and related office
equipment to be Year 2000 compliant. As the Company operates Internet
retail websites, the Company markets products from several third party
suppliers. As such, the Company is attempting to ascertain from each
supplier assurances of their Year 2000 compliance. As of the date of
this filing the Company has not received assurances from all its
suppliers as to their Year 2000 compliance. Since the Company is
dependant on its suppliers computer systems and applications,
particularly with respect to shipping, accounting, billing and buying,
the Company may experience delays which could produce an adverse
effect. While the company believes its suppliers efforts in this
regard will be successful, because of the complexity of the Year 2000
issue and the interdependence of organizations using computer systems,
and those of its third parties with whom it interacts, complete
compliance may not be satisfactorily completed in a timely fashion or
may cost substantially more to remedy than the supplier anticipated.
Failure by the Company's suppliers to satisfactorily address the Year
2000 issue could have a material adverse effect on the Company.
Other Matters
During the quarter, Jon F. Elliott, the Company's President, Chief
Executive Officer and a Director advanced cash to the Company in excess
of $25,000 to enable the Company to meet its then-current obligations.
Despite providing his services exclusively to the Company, the
Company has been unable to pay a salary to Jon Elliott, the Company's
President and Chief Executive Officer per his Employment Agreement.
Therefore, in this quarter, as his sole source of income, Mr. Elliott
sold a total of 102,619 common shares at an average price of $0.17 on
the open market. All appropriate forms concerning the aforementioned
transactions were filed in a timely fashion with the Securities and
Exchange Commission.
Dissolution of Subsidiaries
During the year, as the Company had no further use for two of its
subsidiaries, the Company dissolved Atlantic-Pacific Corp., and let
Goldiggers Southern Nevada, Inc. expire.
Subsequent Events
echristmastree.com
www.echristmastrees.com , the Company's first retail e-commerce
website, re-launched for the holiday season in November, 1999.
The Company had previously launched and operated the site for an
approximate 30 day period during last year's Holiday season where it met
with significant media coverage, critical acclaim and visitations from 85
foreign countries. The site, www.echristmastrees.com, sells two
varieties of premium grade fresh-cut Christmas trees in various sizes
plus two types of Holiday wreaths. Last year the Company placed over 4
million banner ads at significant expense compared to revenues
generated although the website benefited from branding awareness. This
year the Company has eliminated banner advertising preferring instead
to create cross-promotional marketing partnerships with larger,
established, high-profile Internet merchants such as OfficeMax.com;
FlowersUSA,com; FultonStreet.com and PrimeWine.com together with media
marketing and outsourcing a website search engine enhancement program.
Stock Issuances
In November the Company issued 15,000 common shares for computer &
website services valued at $1,500; 43,889 common shares for company and
website advertising valued at $43,889; and 40,625 common shares for
accounting services valued at $7,313 from its active S-8 Registration
#333-59975.
Other Matters
Jon Elliott, the Company's President, sold in November a total of
15,000 shares at an average price of $0.18 on the open market. All
appropriate forms concerning the aforementioned transactions will be
filed in a timely fashion with the Securities & Exchange Commission.
PART II OTHER INFORMATION
Item 2. Changes in Securities
None.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
Exhibits other than those listed have been omitted because they
are nonexistent, inapplicable or because the information is given in
the financial statements of the Company.
b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed by the
undersigned thereunto duly authorized.
E-COMMERCE WEST CORP.
(Registrant)
By: /s/ Jon F. Elliott
Jon F. Elliott, President
and Chief Executive Officer
Date: December 15, 1999
8
12
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<LEGEND>
This schedle conatins interim summary financial information extracted from the
Consolidated Balance Sheets and Statement of Operationsof E-Commerce West Corp.
for the quarter ended October 31, 1999, which statements have been compiled by
management.
</LEGEND>
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<PERIOD-TYPE> 3-MOS
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<PERIOD-END> OCT-31-1999
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<INVENTORY> 16,240
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<CURRENT-LIABILITIES> 600,661
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<COMMON> 12,466
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