-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GGB8A4vVNV5wws5E7bNcC7xvDl3W98iOIMtM5LhZLXydya1LVmy6RKyLy3rvMEY3 KzbEkIlGAr/A4A7xZuzA5A== 0000352912-99-000010.txt : 19991215 0000352912-99-000010.hdr.sgml : 19991215 ACCESSION NUMBER: 0000352912-99-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 19991214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: E COMMERCE WEST CORP CENTRAL INDEX KEY: 0000352912 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 954091368 STATE OF INCORPORATION: UT FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10315 FILM NUMBER: 99773868 BUSINESS ADDRESS: STREET 1: 152 SHERMAN ST CITY: DEADWOOD STATE: SD ZIP: 57732 BUSINESS PHONE: 6055781299 MAIL ADDRESS: STREET 1: PO BOX 545 CITY: DEADWOOD STATE: SD ZIP: 57732 FORMER COMPANY: FORMER CONFORMED NAME: ROYAL CASINO GROUP INC DATE OF NAME CHANGE: 19950126 FORMER COMPANY: FORMER CONFORMED NAME: CAPITOL TELEVISION NETWORK INC DATE OF NAME CHANGE: 19940426 10-Q 1 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 EX-27 2
5 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. 3-MOS JUL-31-2000 OCT-31-1999 0 0 0 0 16,240 194,011 111,922 33,232 272,701 600,661 0 0 1,100 12,466 (341,526) 272,701 1,894 1,894 1,067 1,067 132,194 0 1,115 (132,309) 0 (132,309) 0 0 0 (132,309) (0.01) (0.01)
-----END PRIVACY-ENHANCED MESSAGE-----