SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year Ended July 31, 1999
Commission File No. 0-10315
E-COMMERCE WEST CORP.
(exact name of registrant as specified in its charter)
(formerly Royal Casino Group Inc.)
Utah 95-4091368
(State of Incorporation) (I.R.S. Employee I.D.No.)
83 Sherman St.
Deadwood, SD 57732
(605) 578-1299 Fax (605) 578-1298
Address and telephone of principal executive offices
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 Section 12, 13, or 15(d) of the
Securities and Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
[x] Yes [ ] No
The aggregate market value of registrant's voting stock held by non-
affiliates as of the close of business on July 31, 1999 was $1,189,038
12,404,503 shares of registrant's $0.001 par value
common stock were outstanding and issued as
of July 31, 1999
Documents incorporated by reference: None
TABLE OF CONTENTS
PART I PAGE
NUMBER
ITEM 1. BUSINESS............................................. 3
ITEM 2. PROPERTIES........................................... 5
ITEM 3. LEGAL PROCEEDINGS.................................... 6
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS . 6
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON
STOCK AND RELATED STOCKHOLDER MATTERS................ 7
ITEM 6. SELECTED FINANCIAL DATA.............................. 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS........ 10
ITEM 8. FINANCIAL STATEMENTS................................. 19
NOTES TO FINANCIAL STATEMENTS........................ 26
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES ............. 37
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.................... 38
ITEM 11. EXECUTIVE COMPENSATION.............................. 38
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT ..................................... 40
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS........................................ 40
SUBSEQUENT EVENTS................................... 44
PART IV
ITEM 11. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K............................. 45
SIGNATURE PAGE .................................................... 46
PART I
Item 1. Business
General Development of Business
The Company, which is a Utah Corporation, was incorporated on March
21, 1981. Since incorporation the Company has undergone several name,
ownership, directional and management changes together with a
reorganization in 1986, which did not involve current management. In
July, 1998 the Company amended its Articles of Incorporation to change
its name from Royal Casino Group Inc. to E-Commerce West Corp.
The Company has limited revenue streams from operations, consistent
with most Internet start-up companies. However, revenues are
anticipated to increase over time as the websites become better known and
visitations and purchases by the general public increase.
E-Commerce West Corp. is a publicly traded company whose stock
trades on the NASDAQ Over-The-Counter ("OTC") Bulletin Board under the
symbol "ECEE". The Company currently maintains its principal office at
83 Sherman St, Deadwood, SD 57732. The Company's mailing address is P.O.
Box 624 Deadwood, SD 57732, it's telephone number is (605) 578-1299 and
the fax number is (605) 578-1298.
Narrative Description of Business
Prior
The Company operated in the gaming industry as Royal Casino Group
since 1994 and changed its name to E-Commerce West Corp. in July, 1998
to reflect a shift in its primary business focus away from gaming to e
Commerce.
The Company has two active, wholly-owned subsidiaries,
westerngold.com corp. and Royal Casino Group, Inc., both incorporated
in South Dakota.
Current
The Company is in the process of developing its niche Internet
retail web site and intends to attempt to acquire existing privately
held niche Web sites. Niche-based web sites are designed to appeal to
a target market such as `westerngold.com' which is geared specifically
towards Western enthusiasts. E-Commerce West intends to own and
operate as many niche-based Web sites as is economically feasible. The
Company will seek to acquire privately held niche web sites which would
either be acretive to earnings or hold the potential to be acretive to
earnings primarily with the introduction of cross-promotions designed
to drive traffic to each web site owned by the Company, thus creating
more highly trafficked web sites collectively than would be when
operated independently. Although it is more difficult to brand several
select sites rather than one large one, the Company believes that the
advantages will accrue through cross-promotion and multiple rewards-
based marketing, in addition to the economies of scale that can be
achieved through centralization of key operating elements.
There are several components to the Internet - from navigation
aggregators (Yahoo, Excite) to commerce enablers (Cybercash,
Doubleclick), from services (Mindspring, PSInet), to software
(Netscape, RealNetworks), from security (Cyberguard, Verisign), to
high-speed solutions (Broadband Technologies), to content providers
(CNET, Salon.com). Profitability has been elusive in this area, as has
been acceptability to refined technologies known as the `better
mousetrap syndrome'. Electronic commerce retailers (Amazon, CDNow &
eToys) are what the Company believes are the stable future of
electronic commerce for the very simple reasons that people will choose
the retail outlet with the largest selection, an edge the Internet has
over bricks and mortar retail stores, and the easiest, most efficient
and cheapest way to buy and sell goods and services. This is why the
Company has chosen to occupy this particular electronic commerce arena
described above.
Corporate Direction on the Internet
Through research the Company realized it couldn't just take a
classic business model, use an approach to doing business with a
product or service design from another category, put it on the Internet
and expect it to succeed. The Company found it's a combination of
direct disciplines. Necessary components are an understanding of
branding principals; how to deal with customer communication; whether
or not to take control of inventory; what the service or product is
that provides the `value add' to the customer; where margin is found
within our business combined with what kind of customers we're going to
- - a whole variety of elements that will equal our success.
The Internet has people using the medium to get information which
leads to a purchase. With the whole dynamic accelerating into the new
millennium, companies that master the technique of leveraging the use
of technology to deliver products or services will prosper.
Future
The future of `e-tail' on the Internet will be comprised of so
called "category killers" such as Amazon.com, CDNow, and niche
companies such as westerngold.com or Garden.com. Just as television
has evolved from the `Big 3' networks to hundreds of smaller niche
channels offering a vast array of programming choices and
`broadcasting' has become `narrowcasting', the Company believes history
will repeat itself in this new medium, the Internet. The Company
expects that success will be achieved in thousands of Web sites world-
wide offering select goods and services targeted to a specific, and
eager audience although there can be no assurance of the Company's
individual success.
The Company believes the best has yet to come. The fact that
business models can be so compelling is the reason so many have rushed
to the Internet recently in order to build their business and capture
the market today. This equates to profitability and shows that as a
platform for delivery of product and services the Internet is
incredibly viable, particularly for a high-end audience which is well
educated, technologically savvy and deep pocketed.
E-Commerce West is a forward thinking, long-term focused Company.
Possessing management expertise and proven marketing skills and a CEO
with over 30 years experience in successful consumer and business
marketing. The Company will also be technologically advanced to cope
with the demands of being competitive in electronic commerce.
Planned Wyatt, Missouri Riverboat Casino & Entertainment Center
E-Commerce West believes it has a significant asset remaining in
gaming. To preserve that asset, the Company on August 18, 1998 changed
the name of a wholly-owned subsidiary from RCG Corp. to Royal Casino
Group, Inc. to which it transferred all of its gaming assets including
the name Royal Casino Group. Royal Casino Group has invested a
considerable amount of time and money over the last 4 1/2 years in the
planning and development of a riverboat casino entertainment center on
the Mississippi River near Wyatt, Missouri.
Royal Casino Group has an exclusive 25 year agreement with the
city; 50 acres of land on the Mississippi River under its control; a
Water Quality Certification permit from the Missouri Department of
Natural Resources; a legal opinion from the attorney retained by the
City of Wyatt to annex the land where the riverboat casino would be
located stating that the annexation of the land into the city has been
completed; and its requisite docking permit from the Army Corps of
Engineers. The Company has received a tentative commitment for debt
financing subject to customary terms and conditions. Over 15,000
vehicles daily pass in view of the location. A market of 2 million
people reside within 100 miles of the site. The closest competition is
a riverboat casino located 50 miles away which opened in 1993 and
generated gross revenues in excess of $80 million in 1998. "The Royal
Missourian" is projected to have gross revenues of $40 million with an
EBITDA of $10 million on a total investment of $20 million. The Company
is exploring several options including sale of substantially all the
assets of the transaction to another gaming company. Should the
Company be successful in its efforts to sell its interest and at a
price satisfactory to the Company, then the proceeds of the sale will
be applied to E-Commerce West's e-commerce business endeavors. The
Company has no interest in participating in Internet gaming.
Employees
The Company currently employs three full time employees. Once
westerngold.com is fully funded, it is anticipated the Company will
employ an additional fifteen to twenty persons.
Item 2. Properties
The Company does not own any real property
Item 3. Legal Proceedings
The Company is not involved in any existing law suits, nor is the
Company aware of any pending legal proceedings.
Permanent Dismissal of all Litigation with Stephen Grogan and
acquisition of all Mr. Grogan's claims in perpetuity.
On May 24, 1999 the Company received a Bill of Sale from the
Trustee for the Bankruptcy Estate of Stephen Grogan, pursuant to a
Court Order issued by the United States Bankruptcy Court for the
District of Colorado on May 18, 1999 whereby, for $21,000, the Company
acquired all claims, causes of action, settlement agreements and
amendments thereto, and all rights of action including pre-petition
claims in perpetuity not otherwise exempt under local rules, which
Stephen Grogan has asserted or could have asserted against E-Commerce
West Corp. or Royal Casino Group Inc. or any former or current
officers, directors, agents or assigns thereof together with all rights
to 111,250 common shares of the Company's stock issued to Stephen
Grogan and all stock in Trustee's possession comprised of an additional
51,250 common shares issued to Stephen Grogan. [See: Stock Retired]
The $21,000 paid to the Trustee in Bankruptcy was advanced to the
Company by a third party to be used to purchase, on the third party's
behalf, the 111,250 shares of common stock from the bankruptcy estate.
In July, 1999 the Company filed a Motion to Dismiss With Prejudice
a suit previously filed by Mr. Grogan against the Company and Jon
Elliott which had been dismissed without prejudice in August, 1997. A
Court Order granting the Company's motion was subsequently signed by
the Court.
Item 4 Submission of Matters to a Vote of Security Holders
During the year there were no submissions of matters to a vote of
security holders.
PART II
Item 5. Market for the Registrant's Common
Stock and Related Security-Holder Matters
(a) Market Information. E-Commerce West's common stock is traded
on the NASDAQ Bulletin Board under the symbol "ECEE".
The following table sets forth the high and low bid prices per
share of the Company's Common Stock for the quarters indicated. These
prices represent inter-dealer prices, without adjustment for retail mark-
up, markdown or commissions, and may not necessarily represent actual
transactions.
High Low
1999 Fourth Quarter. . . . . $0.37 $0.12
1999 Third Quarter. . . . . $1.03 $0.23
1999 Second Quarter. . . . . $0.58 $0.25
1999 First Quarter. . . . . $0.58 $0.14
1998 Fourth Quarter. . . . . $0.42 $0.08
1998 Third Quarter. . . . . $0.13 $0.08
1998 Second Quarter. . . . . $0.33 $0.11
1998 First Quarter. . . . . $0.57 $0.31
(b) Holders. The approximate number of holders of record of the
Company's Common Stock as of July 31, 1999 was 2,594
(c) The Company has not paid a cash dividend on its Common Stock
and does not anticipate that it will do so in the foreseeable future.
(d) On January 14, 1999 the Board of Directors passed a motion
extending the exercise date for the Company's Class "B" Warrants to July
26, 1999. On July 3, 1999 the Board of Directors passed a motion
extending the exercise date for the Company's Class "B" Warrants six
months to January 26, 2000, with all other terms and conditions
applicable to the warrants remaining in effect.
Item 6. Selected Financial Data
The selected financial data set forth below should be read in
conjunction with the financial statements and related notes. Balance
sheet information is presented as of the end of the period shown.
The following table summarizes certain audited financial data and
is qualified in its entirety by the more detailed financial statements
included elsewhere herein.
Schedule of Selected Financial Information
for the Year ended July 31,
1999 1998 1997 1996 1995
Net Operating Revenues:
Continuing Operations $0 $0 $0 $0 $0
Loss from continuing
Operations ($594,159)($691,566)($1,239,785)($282,795)($322,899)
Loss from continuing
operations per common
share ($0.06) ($0.12) ($0.27) ($0.09) ($0.15)
Cash dividends declared
per common share $0 $0 $0 $0 $0
As of July 31,
1999 1998 1997 1996 1995
Total Assets:
Continuing Operations $304,185 $205,708 $156,923 $913,420 $21
Current Liabilities:
Continuing Operations $509,837 $294,051 $392,703 $158,247 $135,422
Long-Term Obligations &
Redeemable Preferred
Stock $ 1,100 $2,440,000 $2,440,000 $2,440,000 $0
July 31, 1999
Total Assets ...............................$ 304,185
Total Liabilities...........................$ 509,837
Shareholders' Deficit.......................$(205,652)
Shares Outstanding
Common Stock ................................ 12,404,503
Series A Convertible Preferred Stock ........ 1,100,000
Net Tangible Book Value
Per Share of Common
Stock . . . . . . . . . . . . .$ (0.02)
(1) There are presently outstanding 1,611,846 "B" Warrants which
entitle the holder to purchase one share of Common Stock at a purchase
price of $20 until January 26, 2000. There are presently outstanding
550,000 "C" Warrants which entitle the holder to purchase one share of
Common Stock at a purchase price of $4 until December 31, 2000. This
calculation assumes that none of the aforementioned "B" and "C"
Warrants have been exercised.
Income Taxes:
The Company is current with all its Federal and State Income Tax
filings. The Company does not owe any Federal or State Income Taxes, and
has a net operating loss carryforward of approximately $5,667,292
expiring beginning 2010. However, Atlantic-Pacific Corp., the Company's
subsidiary corporation which owned and operated Goldigger's Hotel and
Gaming, submitted an Offer in Compromise to the Internal Revenue Service
for approximately $67,000 in unpaid payroll taxes which was accepted in
April 1999. Due to a lack of available cash the amount remains unpaid as
of the date of this filing. The Company has been notified that its offer
is overdue.
Stockholders' Equity
Common Stock:
The Company has 150,000,000 shares authorized, 12,404,503 shares
issued and outstanding. There are presently outstanding 1,611,846 "B"
Warrants which entitle the holder to purchase one share of Common Stock
at a purchase price of $20 until January 26, 2000. The "B" Warrants are
callable by the Company at a purchase price of $0.20 per Warrant.
Additionally, the Company has 550,000 "C" Warrants outstanding which
entitle the holder to purchase one share of Common Stock at a purchase
price of $4. until December, 2000. These Warrants are callable by the
Company at a purchase price of $1 per Warrant.
Preferred Stock:
The Company has 100,000,000 shares authorized of which 1,100,000
Class A Preferred are issued and outstanding. The outstanding preferred
stock is convertible by the holder into common shares on a one-for-one
basis, one third each year, beginning in 1997. It may also be redeemed by
the Company at any time, in any number of shares at $3 per share.
Stockholders' Equity
Stock Options:
Under the terms of its nonqualified employee stock option plan the
Company is authorized to establish a plan for up to two hundred and fifty
thousand (250,000) shares of Common Stock pursuant to a resolution of the
Board of Directors and by Amendment of its Certificate of Incorporation
and/or Bylaws. Pursuant to this plan the Company has issued one hundred
and seventy thousand (170,000)options to Jon Elliott, the Company's
President & CEO. The options may be exercised at a purchase price of
$1.25 per share. The options expire on December 31, 2003. Additionally,
the Company created options, with an expiration date of December 31,
2003, equating to three million shares of common stock to an Employee
Stock Option Plan. The Board granted 900,000 options to Jon Elliott, the
Company's President and CEO. These options carry an exercise price of
$0.60 per share. Additionally, the Board on the same date authorized the
establishment of 500,000 options, each to be exchanged on a one for one
common stock basis, to be offered at the discretion of the President to
investors. These options would be priced at the time granted, at a price
above the then current price of the Company's common shares. Further,
that each option shall be for a period established by the President at
the time they are granted. The common stock issued pursuant to all of
the aforementioned options are restricted under the Securities and
Exchange Commission Rule 144.
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion provides information on results of
operations, liquidity, capital resources, and the impact of inflation on
the Company. The financial statements and notes thereto also contain
information that is pertinent to this analysis.
General Financial Condition
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 and operate 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.
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 nature and prospects of any business to be acquired and the
economic and market conditions prevailing at the time financing is
sought. No assurances can be given that any necessary financing can be
obtained on terms favorable to the Company, or at all.
The Company has depleted most of its cash resources and does not
possess the collateral to borrow from its lenders. The Company is
currently seeking $10 million in financing from venture capitalists for
its westerngold.com site. Current cash on hand is not sufficient to meet
ongoing operating expenses however the Company is optimistic that
financing will be available, 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 Company has sustained operations through:
- - a combination of private placements and loans from an officer and
director
- - not paying cash compensation to any officers, directors or employees
- - the Company's limited staff performs multiple tasks that in most
corporations would be handled by a significantly increased number of
employees
- - the majority of the Company's professionals deferred their fees.
Management has taken the following steps to revise its operating and
financial requirements which it believes are sufficient to provide the
Company with the ability to continue in existence:
- - The Company has reduced operating expenses and has no debt other
than payroll and payroll taxes and amounts due to its CEO.
- - The Company has entered the eCommerce arena by launching two
niche Internet web sites. The Internet is a medium that is expected
to experience substantial growth into the next millennium.
- - The Company is optimistic that financing is available for the
Company's future plans 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 perceived success of the Company's websites by the
investment community, the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought.
Results of Operations:
The Company launched its first website www.echristmastrees.com in
mid-November, 1998 and operated the site for approximately 30 days as an
annually recurring seasonal site. The purpose in operating this site was
to garner experience in electronic commerce, Internet advertising,
marketing, promotion and product fulfillment with a time-sensitive
product prior to launching the Company's first year round retail website,
www.westerngold.com. The Company progressed methodically, eliminating
potential problems as it developed the Company's first year round Web
site, www.westerngold.com. During development the Company continued to
add additional suppliers in an effort to enhance the overall appeal of
the site and expand its market reach. As this site offers over 100,000
individual product combinations, the website took approximately twelve
months to take live. This second niche retail Website launched in June
1999.
echristmastree.com
On November 18, 1998 the Company launched its first website. The
site, www.echristmastrees.com, sold two varieties of Christmas trees in
various sizes plus two types of Holiday wreaths. The Company's goal
this season was to `brand' the site. As such the Company purchased
over 4 million banner ads on popular Web sites, such as AltaVista,
GeoCities and `www.usatoday.com'. To announce the launch the Company
retained the services of the Internet public relations firm that
promoted the launch of `Amazon.com', `CoolShoppping', `ONSALE' and
`LinkExchange', all successful Web sites. The Company was the
beneficiary of significant publicity including an article in Business
Week Online, an article which was syndicated to over 800 newspapers by
Bloomberg, a review by Yahoo's `Daily News', an article in USA Today
newspaper plus a corresponding article on their Web site, a television
feature on ZDTV plus a corresponding report on their Web site and
others. Of significance was the large number of measurable banner ad
responses as click-throughs from Internet users in over 85 foreign
countries. The Company interprets these results as extremely
encouraging as to its ability to create interesting Web sites, deploy
creative advertising and promotions that produces results and an array
of products generating significant world-wide appeal, as that is the
future of the Internet. Although first year sales were modest, the
Company believes it succeeded in its pre-launch goal to "brand" the
site, which the Company believes will be reflected through increased
sales in future years. echristmastrees.com re-launched for the holiday
season in October, 1999.
westerngold.com
The Company officially launched its second Web site,
www.westerngold.com, on June 7, 1999.
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 Company plans to implement
a strategic marketing plan designed to drive site traffic and
positively impact sales.
With over 100,000 individual product pages, westerngold.com
features western clothing; cowboy boots; leather jackets, vests, hats
plus hand-tooled leather handbags, briefcases & luggage; hand-crafted
silver jewelry and belt buckles; Black Hills Gold jewelry including
earrings, rings, pins, brooches, watches, necklaces & pendants;
authentic Native American reproductions including weapons, buffalo
skulls and ceremonial collector's items; American Indian jewelry;
music, western books and gifts; Western furniture and accessories;
original art plus limited edition bronze sculptures; Western specialty
foods and gourmet gifts including taste-tempting spices, chili's,
salsas, herb wine vinegars, meat soaks and rubs.
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.
westerngold.com is a year round retail Web site and is owned by
westerngold.com corp., a company operating as a wholly owned subsidiary
of E-Commerce West Corp. Goldiggerswest.com Corp. changed its name to
westerngold.com corp. on March 23, 1999 by virtue of a Certificate of
Amendment issued by the South Dakota Secretary of State.
westerngold.com Advisory Board
An Advisory Board provides a significant guiding hand to start-up
organizations from experts in a variety of fields in which
westerngold.com will require assistance. westerngold.com is fortunate
to have attracted such a highly credentialed group of Internet
professionals to serve on its Advisory Board. The following three
individuals, listed alphabetically, joined westerngold.com's Advisory
Board in June, 1999
Rich LeFurgy
Director and Chairman of the Internet Advertising Bureau in
addition to Chairing FAST Forward, another major Internet industry
group, Mr. LeFurgy is also a Director of the Advertising Research
Foundation and the Advertising Education Foundation. Called by USA
Today "the Johnny Appleseed of online advertising" and listed in
Internet World magazine's December 14, 1998 issue as one of 12
individuals who in 1998 made a difference in the Internet, Mr. LeFurgy
established one of the first online advertising sales organizations
while at Starwave. He led online advertising sales for the combined
Starwave and Disney organizations. Previously Mr. LeFurgy was
Executive Vice President and a Senior Partner at NW Ayer & Partners in
New York where he worked since 1978. At Ayer he led integrated
advertising, direct and event marketing programs for such clients as
AT&T, Marriott, Folgers Instant Coffee, Gillette Right Guard, Avon,
Burger King, Ralston Purina and 7UP. Mr. LeFurgy also serves on the
Board of Directors of Lot 21 and heads the Strategic Advisory Board of
AdKnowledge. Mr. LeFurgy holds a B. S. degree in Advertising from
Syracuse University's Newhouse School.
Jon Rubinstein
Mr. Rubinstein is Apple Computer's Sr. Vice President of Hardware
Engineering. Reporting to the CEO, Mr. Rubinstein leads the hardware
engineering team and is responsible for the development, industrial
design and user interface for all Apple's hardware products. Prior to
joining Apple in February, 1997 Mr. Rubinstein was Executive Vice
President and COO of FirePower Systems, a developer and manufacturer of
PowerPC-based computer systems. Previously, he held the position of
Vice President and General Manager of Hardware and VP of Hardware
Engineering at NeXT. Mr. Rubinstein also managed processor development
for the Titan graphics supercomputer family at Stardent and architected
the HP 9000 series 300 family of workstations and was a member of the
design team for the HP 9836 workstation plus helped define the
engineering and pre-production test processes for new products while
with Hewlett Packard. A holder of several patents and published in
numerous computer industry publications, Mr. Rubinstein has a Masters
and Bachelors of Science degree in electrical engineering from Cornell
University and a Masters of Science degree in computer science from
Colorado State University.
Michael Slade
Mr. Slade is an industry consultant having served as Chairman &
CEO of Starwave from 1993-1998. Starwave, a premiere Internet
technology company, created and produced the leading online sports,
news and entertainment services including ESPN.com, ABCNEWS.com and the
official sites of the NFL, NBA and NASCAR. Starwave, a majority of
which was owned by Disney, made headlines last year when Disney agreed
to acquire a stake in Infoseek in exchange for Disney's ownership
position in Starwave. Infoseek is now being branded as GO.com.
Previously Mr. Slade was Director of Marketing for Microsoft from 1983-
1990 where he was responsible for successfully introducing Microsoft
Excel, Microsoft's first victory over Lotus. From 1991-1992 Mr. Slade
was Vice President, Marketing for NeXT and then became Vice President,
Special Projects for Asymetrix from 1992-1993 when he assumed his role
of Chairman and CEO of Starwave. Mr. Slade has a Bachelor's degree in
Economics from Colorado College and an MBA from Stanford University's
School of Business.
For agreeing to serve on the Advisory Board each member received
options to purchase 50,000 common shares in westerngold.com at $1 each
together with 50,000 restricted common shares of the Company's common
stock.
The Company is pursuing funding for westerngold.com from the
venture capital community and as such has its business plan out to
several selected venture capitalist firms, although there can be no
guarantee that financing in the amount requested by the Company and on
terms and conditions acceptable to the Company will be available.
Planned Wyatt, Missouri Riverboat Casino Development
Land Lease with Option to Purchase
A March 23, 1996 lease with an option to purchase 50 acres of land
directly on the Mississippi River near Wyatt, Missouri between the
Company and a local landowner was renewed under the same terms and
conditions on May 12th 1999 with the expiration date tied to the
expiration date of the Company's Army Corps of Engineers permit.
Army Corps of Engineers
In April, 1996 the Company applied for a Department of the Army
section 10 and 404 permit from the Army Corps of Engineers. This
permit is required prior to the commencement of any construction
activities towards the development of the planned riverboat casino. On
Jan 14, 1999 the permit was issued.
Land Annexation
Additionally, Missouri statutes require the land used for a
riverboat casino development to be located within the city limits of
that community. In July, 1997 the City Council of Wyatt voted to annex
the 50 acres of land which the Company controls into the City of Wyatt.
The Company has received an opinion from the attorney retained by the
city to annex the land into the city limits that the annexation has
been completed.
Common Stock Trading Symbol Change
Reflecting the name change to E-Commerce West the trading symbol for
the common stock was changed from "WINZ" to "ECOM" on August 7, 1998.
On April 8,1999 an unrelated company, Princeton ECOM based in
Princeton, NJ, issued a press release stating they had filed a
registration with the Securities & Exchange Commission for a planned
Initial Public Offering and would be using the stock symbol ECOM on
NASDAQ. This resulted in confusion in the marketplace to which the
Company responded via a press release and by contacting the Market
Regulations division of the SEC and NASDAQ. Officials at NASDAQ informed
the Company that NASDAQ listed companies have priority on stock trading
symbols over companies listed on the OTC Bulletin Board and thus the
Company's symbol, ECOM, will be taken away. The Company applied for and
received a new symbol. The Company's stock began trading under the new
symbol, ECEE, on April 19, 1999.
New Corporate Offices
On May 7, 1999 the Company moved its corporate headquarters into
larger premises designed to serve the expanding needs of the Company as
it launches its Web sites. The Company moved from 152 Sherman Street
to 83 Sherman Street increasing its office and storage space from
approximately 640 square feet at its previous offices to approximately
3,600 square feet. The Company has a one year lease at a monthly
rental of $1,250 with an option for the second year at $1,500.
Additionally, the Company has an option to purchase the building and
underlying property for $125,000 for the first six months and $130,000
for the second six months. In the event the building's owner receives
an offer to purchase the building, the Company has 30 days to either
exercise its option to purchase or match the purchase price. In the
event the Company does neither, the Company would have 90 days to move
to other facilities.
Sale of Slot Machines
The Company and the purchaser modified the terms of the sale agreement
and agreed to an accelerated payment totaling $45,000 to complete the
transaction which also included a few separate bill acceptors and casino
signage.
Selected Data for Management Analysis
July 31,
Change Change
1999 1998 98 to 99 1997 97 to 98
Components of G&A
Professional fees $152,370 $225,151 $(72,781) $388,353($163,202)
Advertising $24,716 $150 $24,566 $ 2,422 ($2,272)
Auto Expense $10,901 $12,294 $(1,393) $20,562 ($8,268)
Insurance $9,011 $3,654 $5,357 $2,622 $1,032
Employee benefits $8,139 $4,107 $4,032 $0 $4,107
Office Expense $3,741 $19,527 ($15,786) $19,803 ($276)
Rent $9,548 $9,273 $275 $7,023 $2,250
Salaries/Wages $229,989 $199,542 $30,447 $306,250 $106,708)
Telephone $13,998 $10,885 $3,113 $17,013 $6,128)
Travel $19,442 $18,860 $582 $29,818 ($10,958)
Gaming applications $0 $0 $0 $22,988 ($22,988)
Other $114,388 $89,550 $24,838 $54,875 $34,675
$596,243 $592,993 $3,250 $871,729 ($278,736)
Change Change
1999 1998 98 to 99 1997 97 to 98
Other Income/Expense
Interest income $3,656 $2,013 $1,643 $411 $1,602
Interest expense $0 ($14,421) $14,421 ($6,435) ($7,986)
Other expense $0 $0 $0 ($77,760) 77,760
Loss on abandoned
projects $0 ($93,377) $93,377 ($276,172) $202,795
Other $39,949 $7,312 $32,637 $12,000 ($4,688)
Total other $43,605 ($98,473) ($54,868)($367,956) $269,483
In comparing the fiscal years 1998 and 1999, please note that
professional fees were reduced from $225,151 to $152,370 reflecting the
cessation of all litigation; advertising increased from $150 to $24,716
due to the launch of the company's seasonal website echristmstrees.com
and salaries increased from $199,542 to $229,989 reflecting the accrued
wages of a new salaried employee. Other components of G&A are consistent
year over year.
Revenues
The Company has modest revenues resulting from the launch of its
first year round website, westerngold.com in June, 1999. The Company
does anticipate revenues within the forthcoming fiscal year to increase
as the Company's advertising and affiliate program for westerngold.com
take hold resulting in the website being visited by more potential
customers. Additional revenues should also be derived from
echristmastrees.com website although there can be no assurances as to the
amount of revenues or if the consolidated revenues will be sufficient to
satisfy ongoing corporate operating expense.
Direct Expenses
The Company's direct expenses throughout the year have been made
from cash on hand, private placements plus loans from time to time from
its President/CEO. Current finances are strained by an insufficient cash
supply. The Company is optimistic that the financing the Company
requires to sustain operations will be attainable on terms and conditions
acceptable to the company although there can be no assurances that such
financing will be available.
Consulting Fees
The Company retained the services of the Ward Group to promote the
launch of its initial website, www.echristmastree.com. Additionally,
the Company retained the services of Lucky Management as an Internet
marketing consultant. Both organizations were retained in November,
1998.
The Company retained the following as consultants at various times
during the recently ended fiscal year: John Lowe and Joy Nissenson in
connection with echristmastrees.com and Dan French for engineering
assistance in connection with the Army Corps of Engineers.
In this fiscal year, the Company expensed $28,900 in consulting fees
vs. $73,238 in the previous fiscal year. Of this amount $26,900 was paid
in S-8 stock with $2,000 paid in cash. Of this $12,000 was expensed in
the fourth quarter.
Equipment Rental, Overhead, 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 April, 2000 with a renewal option for a second year at $1,500 per
month. The Company also has an option to purchase the property for
$130,000 through the remaining initial term of the lease. The property
is suitable for the current needs of the Company.
The Company's general and administration expenses have been paid
from cash reserves. Support services have been compensated by cash from
the Company's cash on hand and/or through the issuance of shares of the
Company's common stock.
Impact Of Inflation Upon The Company
Inflation has not impacted, nor would it be expected to have an
impact upon the Company.
Liquidity and Capital Resources
As of July 31, 1999, the Company had cash and cash equivalents
totaling $9,493 and a working deficit of $291,356. Since inception, we
have financed our operations primarily through private offerings of
equity and debt securities.
Net cash used in continuing operating activities was $129,544 and
$208,403 for the years ended July 31, 1999 and 1998, respectively. The
decrease in net cash used in operating activities was primarily
attributable to an increase in stock issued for services rendered and
compensation.
Net cash used in investing activities was $45,350 and $8,180 for the
years ended July 31, 1999, 1998, respectively. Net cash used in
investing activities consisted primarily of purchases of property and
equipment and the issuance and repayment of notes receivable.
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 web-sites, 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. Funding for
westerngold.com is being sought independently from venture capitalists.
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. No assurances can be given that any necessary financing can
be obtained on terms favorable to the Company, or at all.
Item 8 Financial Statements and Supplementary Data.
E-COMMERCE WEST CORP.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
JULY 31, 1999 AND 1998
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONTENTS
July 31, 1999
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 21
FINANCIAL STATEMENTS
Consolidated Balance Sheet 22
Consolidated Statements of Operations 23
Consolidated Statements of Shareholders' Deficit 24
Consolidated Statements of Cash Flows 25
Notes to Consolidated Financial Statements 26 - 3
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
E-Commerce West Corp. and subsidiaries
We have audited the accompanying consolidated balance sheet of E-Commerce
West Corp. (a Utah corporation) and subsidiaries as of July 31, 1999 and the
related consolidated statements of operations, shareholders' deficit, and
cash flows for each of the two years in the period ended July 31, 1999.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of E-Commerce West
Corp. and subsidiaries as of July 31, 1999, and the consolidated results of
their operations and cash flows for each of the two years in the period ended
July 31, 1999 in conformity with generally accepted accounting principles.
The accompanying financial statements for the year ended July 31, 1999 have
been prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the financial statements, the Company's recurring
losses from operations and limited capital resources raise substantial doubt
about its ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
October 21, 1999
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
ASSETS
Current assets
Cash and cash equivalents $ 9,493
Notes receivable 9,000
Note receivable - officer 33,000
Inventory 16,352
Prepaid legal services 141,667
Prepaid expenses and other assets 8,969
Total current assets 218,481
Property and equipment, net 85,704
Total assets $304,185
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Notes payable - officer $ 27,561
Accounts payable 125,434
Accrued payroll and payroll taxes 224,516
Net liabilities of discontinued operations 132,326
Total current liabilities 509,837
Commitments and contingencies
Shareholders' deficit
Preferred stock, $.001 par value, 100,000,000 shares authorized
Series A Convertible preferred stock 1,100,000 shares
issued and outstanding 1,100
Series B Convertible preferred stock no shares
issued and outstanding -
Common stock, $.001 par value
150,000,000 shares authorized
12,404,502 shares issued and outstanding 12,404
Additional paid-in capital 6,466,220
Accumulated deficit (6,685,376)
Total shareholders' deficit (205,652)
Total liabilities and shareholders' deficit $ 304,185
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended July 31,
1999 1998
Revenues $ 6,396 $ -
Cost of goods sold 6,310 -
Gross profit 86 -
Selling, general, and administrative expenses 634,491 592,993
Loss from operations (634,405) (592,993)
Other income (expense)
Interest income 3,656 2,013
Interest expense - (14,421)
Other income 39,949 -
Gain on sale of assets - 7,312
Loss on abandoned projects - (93,377)
Total other income (expense) 43,605 (98,473)
Loss from continuing operations before
provision for income taxes (590,800) (691,466)
Provision for income taxes 137 100
Net loss from continuing operations (590,937) (691,566)
Discontinued operations
Loss from operations ( 8,350) (304,867)
(Gain)loss on disposition of operations 5,128 (1,394,169)
Net loss from discontinued operations ( 3,222) (1,699,036)
Net loss $ (594,159) $(2,390,602)
Basic loss per share
From continuing operations $ (0.06) $ (0.12)
From discontinued operations - (0.28)
Total basic loss per share $ (0.06) $ (0.40)
Weighted-average common shares outstanding 9,802,123 6,052,41
<TABLE> E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
For the Years Ended July 31,
<CAPTION>
Preferred Stock Additional
Series A Series B Common Stock Paid-in Accumulated
Shares Amount Shares Amount Shares Amount Capital Deficit Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, July 31, 1997 1,000,000 $ 1,000 - $ - 5,163,765 $ 5,164 $5,573,089 $(3,700,615) $1,878,738
Issuance of restricted
common stock for services
rendered and compensation 3,170,832 3,171 133,162 136,333
Issuance of common stock
for services rendered
and compensation 507,505 507 150,589 151,096
Common shares returned by
an officer and cancelled (200,000) (200) (200)
Net loss (2,390,602) (2,390,602)
Balance, July 31, 1998 1,100,000 1,100 - - 8,642,102 8,642 5,856,840 (6,091,217) (224,635)
Issuance of restricted
Common stock for cash 700,000 700 91,800 92,500
Issuance of restricted
common stock for services
rendered and compensation 2,633,333 2,633 333,972 336,605
Issuance of common stock
for services rendered
and compensation 480,317 480 183,608 184,088
Common shares returned
and canceled (51,250) (51) (51)
Net loss ( 594,159) ( 594,159)
Balance, July 31, 1999 1,100,000 $ 1,100 - $ - 12,404,502 $ 12,404 $6,466,220 $(6,685,376) $ (205,652)
</TABLE>
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended July 31,
1999 1998
Cash flows from operating activities
Net loss from continuing operations $ (590,937) $ (691,566)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities
Depreciation and amortization 13,696 5,416
Issuance of stock for services rendered
and compensation 520,643 287,229
Provision for loss on doubtful accounts - 46,314
(Increase) decrease in
Accounts receivable 2,930 (44,109)
Prepaid expenses and other assets (112,345) 162,040
Inventory ( 16,352) -
Other assets ( 3,177) -
Increase (decrease) in
Accounts payable ( 28,369) 48,700
Accrued payroll and payroll taxes 84,367 ( 22,427)
Net cash used in continuing operating activities (129,544) (208,403)
Net cash provided by (used in)
discontinued operating activities ( 7,289) 412,659
Net cash provided by (used in)
Operating activities (136,833) 204,256
Cash flows from investing activities
Notes receivable 42,000 -
Note receivable - officer ( 24,000) -
Acquisitions of property and equipment ( 63,350) ( 8,180)
Net cash used in investing activities ( 45,350) ( 8,180)
Cash flows from financing activities
Proceeds from note payable - officer 27,561 -
Payments on notes payable - (125,025)
Issuance of common stock 92,500 -
Net cash provided by (used in)
financing activities 120,061 (125,025)
Net increase (decrease) in cash and cash
equivalents (62,122) 71,051
Cash and cash equivalents, beginning of year 71,615 564
Cash and cash equivalents, end of year $ 9,493 $ 71,615
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION
In July 1998, Royal Casino Group, Inc., a Utah corporation, changed its
name to E-Commerce West Corp. The consolidated financial statements
include the accounts of E-Commerce West Corp. and its wholly-owned
subsidiaries, Atlantic-Pacific Corporation, Goldiggers Southern Nevada,
Inc., Royal Casino Group, Inc., and westerngold.com corp.
(collectively, the "Company"). A subsidiary, Atlantic-Pacific
Corporation, operated a limited stakes gaming establishment and hotel
in Deadwood, South Dakota under the name of Goldiggers Hotel and Gaming
Establishment ("Goldiggers"). Goldiggers was acquired by the Company
on June 13, 1996. Due to prevailing economic conditions pertaining to
the gaming industry coupled with the long-term negative industry
outlook, effective January 31, 1998, the Company elected to close its
gaming operations and enter the e-Commerce business.
During the year ended July 31, 1998, the Company formed two
subsidiaries. RCG Corp was incorporated in South Dakota on July 2,
1998, and during the year ended July 31, 1999, it changed its name to
Royal Casino Group, Inc. GolddiggersWest.com, Inc was incorporated in
South Dakota on May 21, 1998, and during the year ended July 31, 1999,
it changed its name to westerngold.com corp.
The Company currently operates two web sites, echristmastrees.com and
westerngold.com.
NOTE 2 - REALIZATION OF ASSETS
The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles which assume that the
Company will continue as a going concern. However, during the year
ended July 31, 1999, the company incurred a net loss of $594,159.
Recovery of the Company's assets is dependent upon future events, the
outcome of which is indeterminable. In addition, the Company's
attainment of profitable operations is dependent upon obtaining
adequate financing to support its expansion activities and achieving a
level of revenues adequate to support the Company's cost structure. In
view of these matters, realization of a major portion of the assets in
the accompanying balance sheet is dependent upon the Company's ability
to meet its financing requirements.
Management has taken the following steps to revise its operating and
financial requirements which it believes are sufficient to provide the
Company with the ability to continue in existence:
- The Company has reduced operating expenses and has no debt other
than payroll and payroll taxes and payments due to its CEO.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 2 - REALIZATION OF ASSETS (Continued)
- The Company has entered the e-Commerce arena by launching two
niche Internet web sites. The Internet is a medium that is expected to
experience substantial growth into the next millennium.
- The Company is optimistic that financing is available for the
Company's future plans due to the succession of financing the financial
community has placed in other e-Commerce related enterprises, including
start-ups.
NOTE 3 - DISPOSAL OF OPERATIONS
As of January 31, 1998, the Company and its board of directors shut
down its gaming establishment and hotel in Deadwood, South Dakota. As
a result, the gaming establishment and hotel operations are accounted
for as discontinued operations and, accordingly, its operations are
reported in this manner for all periods presented. For 1998, all
assets and liabilities of discontinued operations are presented as net
liabilities of discontinued operations, and for 1997, all assets and
liabilities of discontinued operations are presented as net assets of
discontinued operations in the consolidated balance sheets. Included
in loss from discontinued operations are the gaming establishment and
hotel total revenues of $0 and $678,529 and the net loss from
operations of $0 and $260,598 for the years ended July 31, 1999 and
1998, respectively. Given the Company's losses and discontinued
operations' historical losses, there is no tax effect on the
disposition of the operations.
The following is a summary of liabilities from discontinued operations:
1999 1998 ,
Current liabilities $ (132,326) $(136,392)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
All material intercompany balances and transactions have been
eliminated in the consolidation.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all
highly liquid investments purchased with original maturities of three
months or less to be cash equivalents.
Inventory
Inventory is stated at the lower of cost (first-in, first-out basis) or
market and consists of raw materials and finished goods.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided
using the straight-line method over the estimated useful lives as
follows:
Purchased software 3 years
Furniture and equipment 5 to 7 years
Maintenance and minor replacements are charged to expenses as incurred.
Expenditures which materially extend the useful lives of capital assets
are capitalized.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the year
in which those temporary differences are expected to be recovered or
settled. Reserves for deferred tax assets are recorded when ultimate
recovery of such assets is deemed uncertain.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of the
assets to future net cash flows expected to be generated by the assets.
If the assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of
the assets exceeds the fair value of the assets. To date, no
impairment has occurred.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Comprehensive Income
For the year ended July 31, 1999, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." This statement establishes standards for
reporting comprehensive income and its components in a financial
statement. Comprehensive income as defined includes all changes in
equity (net assets) during a period from non-owner sources. Examples
of items to be included in comprehensive income, which are excluded
from net income, include foreign currency translation adjustments and
unrealized gains and losses on available-for-sale securities.
Comprehensive income is not presented in the Company's financials
statements since the Company did not have any of the items of
comprehensive income in any period presented.
Recently Issued Accounting Pronouncements
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained after
the Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking Enterprise," is effective for financial statements with the
first fiscal quarter beginning after December 15, 1998. This statement
is not applicable to the Company.
SFAS No. 135, "Rescission of FASB Statement No. 75 and Technical
Corrections," is effective for financial statements with fiscal years
beginning February 1999. This statement is not applicable to the
Company.
In June 1999, the FASB issued SFAS No. 136, "Transfer of Assets to a
Not-for-Profit Organization or Charitable Trust that Raises or Holds
Contributions for Others." This statement is not applicable to the
Company.
In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative
Instruments and Hedging Activities." The Company does not expect
adoption of SFAS No. 137 to have a material impact, if any, on its
financial position or results of operations.
Loss per Share
The Company reports loss per share in accordance with SFAS No. 128,
"Earnings per Share." Basic loss per share is computed by dividing
loss available to common shareholders by the weighted-average number of
common shares available. Diluted loss per share is computed similar to
basic loss per share except that the denominator is increased to
include the number of additional common shares that would have been
outstanding if the potential common shares had been issued and if the
additional common shares were dilutive. Diluted loss per share are not
presented for 1998 and 1997 because common stock equivalents are anti-
dilutive.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 5 - INVENTORIES
Inventories at July 31, 1999 consisted of the following:
Raw materials $ 8,755
Finished goods 7,597
Total $16,352
NOTE 6 - PROPERTY AND EQUIPMENT
Property and equipment at July 31, 1999 consisted of the following:
Purchased software $ 71,962
Furniture and equipment 39,960
111,922
Less accumulated depreciation 26,218
Total $ 85,704
NOTE 7 - INCOME TAXES
The current provision for income taxes is the minimum tax due to the
States of Utah and South Dakota. The components of the Company's net
deferred taxes as of July 31, 1999 are as follows:
Deferred tax assets
Net operating loss carryforward $1,926,879
Outside services paid with restricted stock 63,446
Officer compensation in restricted stock 64,033
Total deferred tax assets 2,054,358
Deferred tax liabilities
Property and equipment (4,163)
Valuation allowance 2,050,195
Net deferred taxes $ -
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 7 - INCOME TAXES (Continued)
The Company has established a valuation allowance based on a number of
factors which impact the likelihood the deferred tax assets will be
recovered, including the Company's history of operating losses. Based
upon a weighting of all available evidence, management believes that
there is no basis to project significant United States-sourced taxable
income. Therefore, it is more likely than not that the deferred tax
assets will not be realized, and a full valuation allowance has been
established. The net change in the valuation allowance for the year
ended July 31, 1999 was an increase of $223,476. No provision for
income taxes for the years ended July 31, 1999 and 1998 is required,
except for minimum state taxes, since the Company incurred losses
during such years.
As of July 31, 1999, the Company had a consolidated federal net
operating loss carryforward of $5,667,292. This carryforward, if
unused, begins to expire in 2014.
Income tax expense differs from the amounts computed by applying the
United States federal income tax rate of 34% to income taxes as a
result of the following:
1999 1998
Computed "expected" tax benefit 34% 34.0%
Increase in income taxes resulting from
Change in the beginning-of-the-year
balance of the valuation allowance
for deferred tax assets allocated
to income tax expense (34.0) (34.0)
Total -% -%
The overall effective tax rate differs from the federal statutory tax
rate of 34% due to operating losses not providing benefit for income
tax purposes.
NOTE 8 - SHAREHOLDERS' DEFICIT
Preferred Stock
The Company has 100,000,000 authorized shares of preferred stock.
1,100,000 shares were designated as Series A Convertible preferred
stock ("Series A Convertible") at July 31, 1999. 1,000,000 shares were
designated as Series B Convertible preferred stock ("Series B
Convertible") at July 31, 1999.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 8 - SHAREHOLDERS' DEFICIT (Continued)
Preferred Stock (Continued)
The Series A Convertible is redeemable only by the Company, is non-
dividend bearing, and is convertible at the option of the holder into
shares of common stock over a three-year period as defined. Upon
liquidation of the Company, holders of Series A Convertible shall be
entitled to receive $3 in cash from the assets of the Company for each
share held. Effective August 1, 1996, the Company amended its articles
of incorporation to change the par value of its Series A Convertible
from no par to $0.001 par value per share. The accompanying financial
statements have been restated to reflect the new par value for all
periods presented. The Company had 1,100,000 shares of the Series A
Convertible issued and outstanding at July 31, 1999.
The Series B Convertible is redeemable only by the Company and is non-
dividend bearing. The Company had no shares issued and outstanding of
the Series B Convertible at July 31, 1999.
Common Stock
During the year ended July 31, 1998, the Company issued 3,145,832
shares of its restricted common stock to the President of the Company
for compensation at $0.04 per share, and issued 25,000 shares of its
restricted common stock for services rendered at $0.42 per share.
During the year ended July 31, 1998, the Company issued 25,000 shares
of common stock to an employee for compensation at $0.44 per share, and
issued 482,505 shares of common stock for services rendered at prices
ranging from $0.10 to $0.44 per share.
During the year ended July 31, 1999, the Company issued 1,133,333
shares of its restricted common stock to the President of the Company
for compensation at prices ranging from $0.125 to $0.15 per share and
issued 1,500,000 shares of its restricted common stock for services
rendered and compensation at prices ranging from $0.001 to $0.20 per
share.
During the year ended July 31, 1999, the Company issued 480,317 shares
of its common stock for services rendered at prices ranging from $0.14
to $0.50 per share.
Warrants
The Company had 1,611,842 Series B warrants issued and outstanding at
July 31, 1999 and 1998. These warrants entitle the holder to purchase
one share of common stock at a purchase price of $20 and are callable
by the Company for $0.20 per warrant. The expiration date of the
Series B warrants is January 26, 2000.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 8 - SHAREHOLDERS' DEFICIT (Continued)
Warrants (Continued)
During the years ended July 31, 1997 and 1996, the Company issued
50,000 and 500,000 Series C warrants, respectively. These warrants
entitle the holder to purchase one share of common stock at a purchase
price of $4. The Series C warrants are callable by the Company for $1
per warrant and expire on December 31, 2000.
Options (Continued)
During the year ended July 31, 1997, the terms of the Company's
nonqualified stock option plan were modified to authorize the Company
to issue 3,000,000 options at a price that is above the market price on
the grant date. Pursuant to the plan, at July 31, 1999, the Company
had issued 918,000 options to an officer/director/shareholder and to a
consultant. The options may be exercised at a purchase price from
$0.60 to $0.88 per share and expire on December 31, 2003.
During the year ended July 31, 1997, the Company was also authorized to
issue 500,000 options to investors as an inducement. The options will
be issued at a price above the then current market price and shall be
for a period established at the time they are granted. At July 31,
1999, none of these options had been issued.
On June 30, 1999, the Company granted options to purchase 50,000 shares
of common stock of the Company's subsidiary, westerngold.com corp., to
each of three management consultants. The options vest on the date of
grant, have an exercise price of $1.00, and expire five years from the
date of grant. The options are not included in the stock option plans
below.
The following table summarizes certain information relative to stock
options:
Weighted
Average
Exercise
Shares Price .
Balance, July 31, 1997 1,688,000 $ 0.69
Cancelled (600,000) $ 0.60
Balance, July 31, 1998 1,088,000 $ 0.71
Granted - $ -
Outstanding, July 31, 1999 1,088,000 $ 0.71
Exercisable, July 31, 1999 1,088,000 $ 0.71
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 8 - SHAREHOLDERS' DEFICIT (Continued)
Options (Continued)
The weighted-average life of the options outstanding and exercisable at
July 31, 1999 is 41 months. Options available for future grant at July
31, 1999 were 2,662,000. Additional information relating to these
options is as follows:
Weighted- Weighted- Weighted-
Average Average Average
Remaining Exercise Exercise
Stock Stock Contractual Price Price
Exercise Options Options Life of Options of Options of Options
Price Outstanding Exercisable Outstanding Outstanding Exercisable
$ 0.60 900,000 900,000 3.4 years $ 0.60 $ 0.60
$ 0.88 18,000 18,000 3.4 years $ 0.88 $ 0.88
$ 1.25 170,000 170,000 3.4 years $ 1.25 $ 1.25
1,088,000 1,088,000
The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." Accordingly, no
compensation cost other than that required to be recognized by APB 25
for the difference between the fair value of the Company's common stock
at the grant date and the exercise price of the options has been
recognized. Had compensation cost for the Company's stock option plan
been determined based on the fair value at the grant date for awards in
1999 and 1998 consistent with the provisions of SFAS No. 123, the
Company's net loss and loss per share would have been increased to the
pro forma amounts indicated below for the years ended July 31, 1999 and
1998:
1999 1998
Net loss as reported $ (594,159) $(2,390,602)
Net loss, pro forma $ (594,159) $(2,390,602)
Basic loss per share as reported $ (0.06) $ (0.40)
Basic loss per share, pro forma $ (0.06) $ (0.40)
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 9 - COMMITMENTS AND CONTINGENCIES
Leases
On November 9, 1995, the Company signed a definitive 25-year docking
and franchise agreement with the city of Wyatt, Missouri, granting the
Company the exclusive right to development and manage a riverboat
casino entertainment center on the Mississippi River. On March 23,
1996, the Company entered into a three-year lease, plus renewal options
for land on the Mississippi River near Wyatt, Missouri. Payments under
the lease will be required only if the Company begins construction or
if the Missouri Gaming Commission selects the Company for gaming
license review. In the event that one of these conditions is met, the
Company will be required to pay lease payments of $50,000 annually. On
May 12, 1999, the lease term was extended to January 13, 2002.
NOTE 10 - RELATED PARTIES
Note Receivable - Officer
The Company has a note receivable outstanding for $33,000 from an
officer/director/shareholder of the Company as of July 31, 1999. The
note earns interest at 9% and had an initial maturity date of April 9,
1997, which was extended to January 9, 1998. This note is currently
due.
Notes Payable - Officer
Notes payable - officer are amounts advanced to the Company by its
majority shareholder/Chief Executive Officer. The advances bear
interest at 9% per annum and have no repayment terms. The amount
outstanding is subordinate to all other debts of the Company.
NOTE 11 - YEAR 2000 ISSUE
The Company is conducting a comprehensive review of its computer
systems to identify the systems that could be affected by the Year 2000
Issue and is developing an implementation plan to resolve the Issue.
The Issue is whether computer systems will properly recognize date-
sensitive information when the year changes to 2000. Systems that do
not properly recognize such information could generate erroneous data
or cause a system to fail. The Company is dependent on computer
processing in the conduct of its business activities.
Based on the review of the computer systems, management does not
believe the cost of implementation will be material to the Company's
financial position and results of operations.
E-COMMERCE WEST CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
July 31, 1999
NOTE 12 - SUBSEQUENT EVENTS
Subsequent to July 31, 1999, the Company issued 50,000 shares of its
common stock for services rendered at a price of $0.18 per share.
Subsequent to July 31, 1999, the Company dissolved its wholly-owned
subsidiaries Atlantic-Pacific Corporation and Goldiggers Southern
Nevada, Inc.
Item 9. Changes in and Discussions with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers
of the Registrant
The names of the directors and executive officers of the Company
and certain information about them is set forth below:
Directors and Executive Officers
The Directors and Executive Officers of the Company, their
positions and ages are as follows:
Name Age Position
Jon F. Elliott 52 President, Chief Executive
Officer & Chairman of the
Board
Jon F. Elliott, President & Chief Executive Officer - As President of
the Company Mr. Elliott will oversee all corporate matters pertaining to
the development and operation of the Company. In addition to having a
background in gaming, television production and broadcasting, Mr. Elliott
has 17 years of management, marketing and franchise skills.
Mr. Elliott's employment history is as follows:
1993 to Present - Founder, President, Chief Executive Officer and
Chairman of the Board, E-Commerce West. President, Secretary and a
Director of the Company's wholly-owned subsidiaries.
Appointments and Resignations to the Board of Directors
None
Item 11. Executive Compensation
Pursuant to the Management Agreement approved and signed by
the Board of Directors, Jon Elliott, the Company's senior executive
officer was to receive an annual salary of $160,000 in the Company's
fiscal year August 1, 1998 to July 31, 1999. Officers' salary expense
for the year was $160,000 however, in an effort to preserve the Company's
cash, Mr. Elliott drew no cash for the entire year. $150,000 was paid to
Mr. Elliott in restricted stock. At the close of the fiscal year Jon
Elliott was due $45,000. Mr. Elliott is to receive $185,000 per the terms
of his employment contract for the upcoming fiscal year. As of the date
of this filing Mr. Elliott is owed $83,500 in deferred compensation.
At Board Meetings on February 19, 1999 and July 28, 1999
specifically to strengthen the Company's balance sheet by reducing the
Company's outstanding debt to better position the Company to attract
financing, Jon Elliott the Company's President & CEO, agreed to
exchange the money owed to him per his employment agreement in the
amounts of $100,000 and $50,000 respectively for restricted common
shares. Mr. Elliott has not received any salary nor any remuneration
from the Company in over two years, from June 1, 1997 through July 31,
1999. His salary has been accrued. On February 19, 1999 and July 28,
1999 the common shares of the Company had a bid price of $0.25 and
$0.24. Due to the fact the shares are restricted shares pursuant to
Rule 144 of the Securities & Exchange Commission, and primarily due to
the volatility in the price of the Company's common shares, the stock
issued to Mr. Elliott was issued at a discount to the then current bid
price. Therefore 800,000 shares representing $100,000 owed and 333,333
representing $50,000 owed were issued to Mr. Elliott.
Directors will be paid $200 for each meeting and are reimbursed for
their out-of-pocket expenses when attending meetings on behalf of the
Company. Executive Officers will not be paid any additional
consideration for attending Board Meetings. The Directors have deferred
all compensation for attending Board Meetings to date.
Stock Options
The Company has issued a total of 170,000 options to purchase
Common Stock from its initial stock option plan. These options are non-
qualified stock options. The Company is authorized to issue up to
250,000 shares of Common Stock from this initial stock option plan at an
exercise price of $1.25 per option pursuant to resolution of the Board of
Directors and by Amendment of its Certificate of Incorporation and/or
Bylaws.
At a July 15, 1997 Board Meeting the Board added options with an
expiration date of December 31, 2003 equating to three million shares of
common stock to its Employee Stock Option Plan. In addition the
expiration date of the existing options were extended to December 31,
2003. Further, the president was empowered to issue the options at his
discretion and the option price would be above the then current offer
price of the Company's common shares at the time of the granting of the
options.
The following table sets forth the options issued by the Company on
January 7, 1989:
Number of Shares Weighted Average Expiration
Name Subject to Option Exercise Price Dates
Jon F. Elliott 170,000 $1.25 Dec. 31, 2003
These options are exercisable at any time up to December 31, 2003,
at $1.25 per share unless an individual leaves his employment or formal
association with the Company for any reason, in which case, the options
expire unless exercised within 90 days from the date the individual
resigns, is terminated or otherwise ceases to be with the Company
The following table sets forth the options issued by the Company on
July 15, 1997:
Number of Shares Weighted Average Expiration
Name Subject to Option Exercise Price Dates
Jon F. Elliott 900,000 $0.60 Dec. 31, 2003
The Board of Directors on July 15, 1997 authorized the establishment of
500,000 options, each to be exchanged on a one for one common stock
basis, to be offered at the discretion of the President to investors.
These options would be priced at the time granted at a price above the
then current price of the Company's shares. Further, that each option
shall be for a period established by the President at the time they are
granted. The common stock issued pursuant to all of the aforementioned
options are restricted under the Securities and Exchange Commission Rule
144.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth certain information regarding the
Company's Common Stock as of July 31, 1999, not giving effect to any
stock options or Warrants outstanding as of such date, owned or recorded
beneficially by each person owning more than 5% of such Common Stock and
by all officers and directors as a group.
COMMON STOCK
Name of Number
Beneficial Owner of Shares % of Total Outstanding
Jon F. Elliott
P.O. Box 623
Deadwood, SD 5,131,446 41.4
CEO/ President and Director
- -------------------------------------------------------------------------
All Officers & Directors
as a Group 5,131,446 41.4
Item 13. Certain Relationships and Related Transactions
The Company believes that in the past all transactions with
officers, directors and affiliates have been on terms no less favorable
to the Company than would have customarily been obtained from non-
affiliated parties, and that future transactions, if any, with officers,
directors and affiliates will likewise be subject to such standard and to
approval by a majority of the directors who have no economic interest in
the transaction.
Corporate Activities
Class "B" Warrants
At a Board of Directors meeting on January 14, 1999, the Board
extended the exercise date for the Company's Class "B" Warrants to July
26, 1999 with all other terms and conditions remaining in effect.
At a Board of Directors meeting on July 3, 1999 the Board
extended the exercise date for the company's Class "B" Warrants until
January 26, 2000 with all terms and conditions remaining in effect.
Domain Name Ownership
The Company owns, as intellectual property, over 20 Web site
addresses consistent with the Company's plans to continue to develop
and launch Web sites designed to appeal to a niche segment of the
market.
Change of Transfer Agent
At an April 23, 1999 Board Meeting the Company chose to change
corporate transfer agents from OTR Stock Transfer to Transfer Online.
Both firms are based in Portland, Oregon.
Stock Issuances
In the fiscal year August 1, 1998 to July 31, 1999 the Company issued
the following shares:
Restricted Common Stock for: Common Stock Issued:
Management Incentive 300,000
Advisory Board members 150,000
Officer salary 1,133,333
Services rendered:
Legal 1,000,000
Accounting 25,000
Public relations 25,000
Private placements 700,000
3,333,333
Active S-8 Registrations; #33-34786, #333-32415
and #333-59975 for:
Services rendered:
Legal 233,181
Accounting 25,437
Bookkeeping 8,422
Computer & Website 66,042
Consulting 82,518
Public relations 64,717
480,317
Stock Retired
Pursuant to a resolution of the Board of Directors at a meeting on
June 3, 1999, the Company retired into the Treasury on July 14, 1999
51,250 common shares issued to Stephen Grogan which were acquired from
the bankruptcy estate.
Legal Services Fee Agreement
In June, 1999 the Company entered into an agreement with Richard
Schneider, the Company's longstanding corporate counsel, whereby Mr.
Schneider will provide legal services for three years in return for
1,000,000 restricted common shares vesting at the rate of 27,777,78
shares per month throughout the term of the agreement. Mr. Schneider's
primary duties shall be to consult with respect to legal matters and
perform all services requested by the Company relating to all business
matters. This agreement conserves the Company's cash while assuring
ongoing legal representation during the Company's planned growth cycle.
Management Incentive
The Company issued 300,000 restricted common shares to Debra Berg.
Ms. Berg is the General Manager for westerngold.com and
echristmastrees.com. Shares are to be earned at the rate of 100,000
shares per year with the agreement providing that a pro rata number of
shares would be returned to the Company should Ms. Berg fail to provide
services of less than three years.
Private Placements
The Company completed several private placements of restricted
stock totaling 700,000 common shares throughout the year to existing
shareholders in return for $92,500. The proceeds were applied to the
development and advertising of the Company's two retail websites and to
general corporate purposes.
Corporate Loans
At a Board Meeting on November 16, 1998 the Board reinstated two
$9,000 loans from an Officer and a former Officer of the corporation
that had previously been offset against considerably larger
indebtedness by the Company to the two individuals. This was advised
by the Company's professionals during the previous fiscal year's annual
audit to avoid confusion. Simple interest calculated at 9% per annum
was established as the interest rate.
Jon Elliott, the Company's President/CEO has not received any cash
compensation per the terms of his Employment Agreement for the 20-month
period from June, 1997 through January, 1999. He owes the Company a
total of $33,000 per loans taken which have an interest rate of 9%,
simple interest, calculated annually.
Other Matters
During the Company's fiscal year from August, 1998 through July,
1999, Jon Elliott, the company's Chief Executive Officer and a Director
sold a total of 122,621 common shares at an average price of $0.44 on the
open market of which 30,893 were sold in the last fiscal quarter. All
appropriate forms concerning the aforementioned transactions were filed
in a timely fashion with the Securities & Exchange Commission.
Regulatory Matters
Goldigger's Hotel & Gaming
In the second quarter, the Company paid $4,936.01 reached in a
settlement with the South Dakota Department of Revenue over an alleged
underpayment of sales and use tax by Goldiggers for the period 1994-
1997.
Nevada Gaming Commission
In April, 1997 Royal Casino Group applied to the Nevada Gaming
Commission for a gaming license pursuant to its proposed acquisition of
the Triple J Casino in Henderson, Nevada and gave the Nevada Gaming
Commission $85,000 to begin their investigation into the background of
the Company and its officers and directors. As previously reported,
Royal Casino Group determined not to proceed with the acquisition and
received permission from both the Nevada Gaming Control Board and
Nevada Gaming Commission to withdraw its application. In October, 1998
the Company received a refund of $38,000 of the $85,000 deposited with
the Nevada Gaming Commission. The $47,000 was previously written off.
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 Web sites, 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.
Subsequent Events
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.
PART IV
Item 14. Financial Statements, Schedules
Exhibits and Reports on Form 8-K
(1) Financial Statements
(a) The Financial Statements required pursuant to this Item have been
filed as part of this report under Part II, Item 8.
All other schedules have been omitted because the information
prescribed therein is not applicable, not required, or is furnished in
the financial statements or notes thereto.
(b) One report on Form 8-K was filed during the year ended July 31,
1999. The report filed on August 11, 1998 was included as an exhibit to
the Company's Form 10-K for the fiscal year ended July 31, 1998.
(2) Exhibits
Exhibit No. Description Page No.
1 Form 8-K filed on August 3, 1998 announcing *
the name change of the Corporation to E-Commerce
West Corp. from Royal Casino Group Inc. including
a Certificate of Amendment to the Company's
Articles of Incorporation attesting to that fact.
23.1 Consent of Singer Lewak Greenbaum & Goldstein LLP
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.
* documents previously filed
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, this
25th day of October, 1999.
E-COMMERCE WEST CORP.
By /s/ Jon F. Elliott___
Jon F. Elliott
President and Chief Executive Officer
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that such person whose signature
appears below constitutes and appoints Jon F. Elliott, his-attorney-in-
fact, with power of substitution, for him in any and all capacities, to
sign this Annual Report on Form 10-K, and any amendments thereto, each
with exhibits thereto, and other documents in connection therewith, with
The Securities and Exchange Commission, hereby ratifying and confirming
all that said attorney-in-fact, or his substitute may do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities and 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 dates
indicated.
Signature Title Date
/s/ Jon F. Elliott President, October 25 , 1999
Jon F. Elliott Chief Executive Officer,
Chairman of the Board
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference of our report, dated
October 21, 1999, (which includes an emphasis paragraph relating to an
uncertainly as to the Company's ability to continue as a going concern)
on the consolidated financial statements of E-Commerce West Corp. and
subsidiaries included in this Form 10-KSB in the previously filed
Registration Statements of E-Commerce West Corp. on Form S-8 (File No.
33-34786, effective May 31, 1996, File No. 333-32415, effective August 5,
1997, and File No. 333-59975, effective August 21, 1998).
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
October 21, 1999
2
21
20
20
The accompanying notes are an integral part of these financial
statements.
23
The accompanying notes are an integral part of these financial
statements
22
The accompanying notes are an integral part of these financial
statements.
24
The accompanying notes are an integral part of these financial
statements.
26
The accompanying notes are an integral part of these financial
statements.
25
47
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This schedule contains interim summary financial information extracted from the
Consolidated Balance Sheets and Statement of Operations of E-Commerce West Corp.
for the year ended July 31, 1999, which statements have been compiled by
management and audited by an independent auditing firm,
</LEGEND>
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<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUL-31-1999
<PERIOD-END> JUL-31-1999
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<CURRENT-ASSETS> 218,481
<PP&E> 111,922
<DEPRECIATION> 26,218
<TOTAL-ASSETS> 304,185
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