U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Amendment #1)

FORM SB-2

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

eConnect
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(Name of Small Business Issuer in its charter)

File No. 333-71212

Nevada 541990 43-1239043
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(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

2500 Via Cabrillo Marina, Suite 112, San Pedro, California 90731; (310) 514-9482
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(Address and telephone number of Registrant's principal executive offices and
principal place of business)

Law Office of William B. Haseltine
604 North Greenbrier Street
Arlington, Virginia 22203; (703) 276 1919
(Name, address, and telephone number of agent for service)

Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.

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If this Form is filed to If this Form is a If this Form is a
register additional post-effective amendment post-effective
securities for an filed pursuant to Rule amendment filed
offering pursuant to Rule 462(c) under the pursuant to Rule 462(d)
462(b) under the Securities Act, check under the Securities
Securities Act, please the following box and Act, check the
check the following box list the Securities Act following box and list
and list the Securities registration statement the Securities Act
Act registration number number of the earlier registration statement
of the earlier effective effective registration number of the earlier
registration statement statement for the same effective registration
for the same offering. offering. statement for the same
[ ] [ ] offering.
[ ]
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If any of the securities being registered on this If the delivery of the
Form are to be offered on a delayed or continuous prospectus is expected
basis pursuant to Rule 415 under the Securities Act to be made pursuant to
of 1933 check the following box. Rule 434, check the
[X] following box.
[ ]
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CALCULATION OF REGISTRATION FEE

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Title of each class of Proposed maximum Proposed maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered share/(1)/ price registration fee/(2)/
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Common Stock 159,809,657 $0.024 $3,835,432 $0
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(1) Calculated in accordance with Rule 457(c): The average of the bid and ask
prices as of October 4, 2001.

(2) A registration fee of $1,815 was paid for a previous registration
statement, which was substantially identical to the present registration
statement, but which was withdrawn within the past few days. This amount,
which will not be refunded, will be applied to cover the fee due for this
filing of $767.

PROSPECTUS

eConnect

159,809,657 Shares
Common Stock

eConnect, a Nevada corporation, is hereby registering an offering for
resale of 159,809,657 shares of common stock pursuant to the terms of this
prospectus. As a result of an agreement with Alpha Venture Capital Inc.,
105,000,000 shares that will be received pursuant to an equity line agreement
will be sold by Alpha on a delayed and continuous basis, and 54,809,657 will be
sold by others on a delayed basis at their discretion. The exact selling plans
of each shareholder cannot be determined at this time. Alpha is an underwriter
of this offering. The company's common stock trades on the Over the Counter
Bulletin Board under the trading symbol "ECNC".

The shares offered hereby are highly speculative and involve a high
degree of risk to public investors and should be purchased only by persons who
can afford to lose their entire investment. See "Risk Factors" on page 6.
Transactions in the shares are subject to Penny Stock regulations adopted
pursuant to the Securities Exchange Act of 1934, as amended, which may result in
reduced trading or make it difficult to sell the shares.

These securities have not been approved or disapproved by the
securities and exchange commission or any state securities commission nor has
the securities and exchange commission or any state securities commission passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense. The company will not receive any proceeds from
this offering.

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Proposed offering Underwriting
Title of each class of Price to Discounts and Proceeds to
securities offered Amount offered Public Commissions /(1)/ Issuer
----------------------------------------------------------------------------------------------------

Common stock 159,809,657
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Per Share $ 0.043 $ $ 0.00
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Total Maximum $ 6,871,815 $ $ 0.00
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Information contained herein is subject to completion or amendment.
The registration statement relating to the securities has been filed with the
U.S. Securities and Exchange Commission. The securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

/(1)/ Contemporaneous with entering the CSPA, the company agreed to pay First
Fidelity Capital, the agent for Alpha, a commission of 6% of the amount
of each drawdown under the common stock purchase agreement payable in
cash at the time of each drawdown.

Dated: October 9, 2001

[This Page Intentionally Left Blank]

Table Of Contents

Prospectus Summary................................................................... 5
Risk Factors......................................................................... 6
Use of Proceeds...................................................................... 14
Selling Shareholders................................................................. 14
Plan of Distribution................................................................. 16
Legal Proceedings.................................................................... 19
Directors, Executive Officers, Promoters and Control Persons......................... 25
Security Ownership of Certain Beneficial Owners and Management....................... 26
Description of Securities............................................................ 27
Disclosure of Commission Position on Indemnification for Securities Act Liabilities.. 28
Organization Within Last Five Years.................................................. 33
Description of Business.............................................................. 34
Plan of Operation.................................................................... 48
Description of Property.............................................................. 50
Certain Relationships and Related Transactions....................................... 51
Market for Common Equity and Related Stockholder Matters............................. 56
Executive Compensation............................................................... 58
Financial Statements................................................................. 61
Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure............................................. 111
Available Information................................................................ 112

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by detailed
information appearing elsewhere in this prospectus. Each prospective investor
is urged to read this prospectus in its entirety.

The Company.

The business of eConnect is to develop and profit from the PERFECT industry.
Personal Encrypted Remote Financial Electronic Card Technologies is simply the
usage of hardware (terminals) from remote sites such as a home, to pay web
merchants by swiped credit cards, ATM cards with PIN and smart cards. The
PERFECT system is now complete as regards the service of eCashPad credit card
present payments to web merchants. The PERFECT system consists of a home
terminal, the eCashPad, which the consumer will use to swipe their credit card
at the web merchant's site, and the Merchants Integration Kit which the web
merchant needs to install. Both elements are now complete. The payment of
eCashPad ATM card with PIN payments is in development. The initial usage of the
eCashPad as a home terminal is to enable consumers to swipe their credit card,
which will result in a credit card present payment to the web merchant and lower
discount rate as provided by First Data, the acquirer of the Bank Eyes Only
transaction. First Data has an agreement with the company whereby First Data
will "acquire" the transactions initiated through Bank Eyes Only. This means
that First Data will clear the transactions after they are implemented through
the Bank Eyes Only system. The same terminal can be used to swipe an ATM card
and enter a PIN which will result in a "point of sale" same as cash payment to
the web merchant. The future emphasis of the company will be on facilitation of
ATM card with PIN payments, although credit card present transactions will
continue to be substantial. The company believes that based on conversations
with executives in the Mortgage, Insurance, Collections, Utility, Charity and
Entertainment industries that eCashPad originated ATM card with PIN payments
will be aggressively promoted by these respective businesses.

The company has had no revenue from operations to date. Although it has been
involved with e-commerce since 1999, it has been primarily engaged in research
and development. The company has incurred significant losses from operations:
Net loss from operations of $19,068,529 for the fiscal year ended December 31,
1999, $107,809,363 for the fiscal year ended December 31, 2000, and $10,993,050
for the six months ended June 30, 2001. At June 3, 2001, the company had an
accumulated deficit of $156,248,737 (the majority of which resulted from stock
issued for services). The future growth and profitability of the company will be
principally dependent upon its ability to successfully complete development and
testing of, obtain regulatory approvals for, and market or license its primary
products. Accordingly, the company's prospects must be considered in light of
the risks, expenses and difficulties frequently encountered in connection with
the establishment of a new business in a highly competitive industry,
characterized by new product introductions.

EConnect has developed the eCashPad as the terminal to make these transactions
and has developed the Merchant Integration Kit and published this kit at the
eConnect web site (www.econnectholdings.com) to enable web merchants to install
the MIK in order to receive PERFECT payments.

The capability of accomplishing PERFECT same as cash payments by ATM card with
PIN and debit card with PIN and smart card payments will effect Internet global
business to business and consume to business transactions. The concept that
"cash is king" now applies for the first time to Internet commerce which until
now has been limited to credit card transactions. eConnect will rely on the
creation of agreements with ATM card networks in order to utilize this aspect of
the eCashPad. To date, no such agreements exist.

Many consumers who do not have credit cards will now be able to use their
eCashPad and effect PERFECT same as cash payments to web merchants who today are
basically limited to being paid by credit and not real time cash.

The on going discussions that the Company has had with many businesses who have
a web presence, leads us to believe that the usage of the eCashPad to send cash
donations, wagers, impulse purchases and bill payments will greatly simplify
back room accounting for industries ranging from mortgage to insurance to home
Off Track Betting.

EConnect will generate operating revenues by charging fees per PERFECT payment.
These transaction fees will be lower than those currently paid by the merchant.

The transaction flow of a Bank Eyes Only credit card swiped transaction is from
the eCashPad, which is making a payment at a wWilliam HaseltineFinancial
Printing GroupThe transaction flow of a Bank Eyes Only credit card swiped
transaction is from the eCashPad, which is making a payment at a web merchant's
site which has installed the Merchant Integration Kit and which enables the
eCashPad to communicate to the web merchants site, and eConnect processing, the
front end processor, which then hands off the transaction to VeriSign, which as
a Gateway, then hands off the transaction to First Data, who is the back end
processor of the transaction, and who then hands off to the acquirer bank.

These eCashPad originated transactions will be regarded as credit card present
and the bank acquirer will then charge the web merchant a lower discount fee
than what is presently charged to the merchant when they are being paid by a
standard non credit card present payment.

Web merchants will pay eConnect a flat fee of 50 cents to provide the Bank Eyes
Only service plus they will pay the lower discount rate to the acquirer bank.
Adding in the chances of reduced fraud and charge backs plus the lower discount
rate, the overall cost of a Bank Eyes Only payment is an efficient payment for
the merchant. The Company is also generating nominal revenues on the sale of the
eCashPad at $59.95.

Since August 21, eConnect has in effect been in business as we have a full Bank
Eyes Only service system to offer both merchants and consumers, and has engaged
a direct commission sales staff to begin contacting merchants to sell them on
adding the eConnect Bank Eyes Only solution at their web site. The consumer
first downloads and installs the eCashPad driver which is software and which
enables the eCashPad to work with the consumers PC. The web merchants download
and install the Merchant Integration Kit at their web sites, which is software
and enables the eCashPad to make a payment at the site which is either a credit
card swiped or ATM card with PIN transaction. The overall service to both
consumers and web merchants is defined as Bank Eyes Only and behind the scenes
consists of eConnect driving and handing off the transaction into the
appropriate credit card or ATM card system.

Two key incentives for the Internet merchants are:

1. A lower Discount Rate charged to them by VISA/MasterCard for receipt of card
present (swiped) credit cards rather than card not present credit card
transactions.

2. The ability to be paid by an ATM card with PIN or debit card with PIN same as
cash Internet payment.

Our service agreement is with First Data who will be acquiring the credit card
swiped Bank Eyes Only payments and will be charging the web merchants a lower
discount rate based on the credit card bring first swiped by the consumer and
the magnetic strip read by the eCashPad. This is a first for Internet
commerce.

The key incentives for the consumer are:

1. A far safer credit card transaction as the financial data is being sent
directly to the bank system and is not seen nor stored at the web merchants site
and can therefore not be stolen by hackers.

2. Merchant Incentives to pay by cash.

3. Speed, ease and convenience of eCashPad terminal originated electronic
payments.

Bank Eyes Only credit card payments can only be accomplished by a terminal that
reads the magnetic strip of the credit card and ATM card with PIN payments, or
cash to the web merchant can be accomplished with a terminal that reads the
magnetic strip of the ATM card or debit card.

The eCashPad is a full service terminal that has been developed and is being
sold by eConnect for home and office usage to effect PERFECT payments. The
PocketPay is a mobile wireless eCashPad that can also double as a phone and has
not yet been developed.

The eCashPad is now in operation and has been used to effect product purchases
over the Internet by card present credit card transactions. Efforts are underway
to expand its usage to complete bill payments as the service of ATM card with
PIN same as cash payments becomes available. The Company has received a proposal
from an ATM card network to begin a Pilot to test ATM card with PIN Internet
transactions. This Pilot will consist of 60-100 eCashPads making payment to 2 to
3 Bank Eyes Only web merchants. At the conclusion of a successful Pilot, the ATM
card Network will then authorize the usage of ATM card with PIN eCashPad
transactions within their network.

The eCashpad is a proprietary product of the company. The PocketPay
does not yet exist. Bank Eyes Only is a proprietary service of the company.

The principal offices of the company's are located at 2500 Via
Cabrillo Marina, Suite 112, San Pedro, California 90731. The telephone number
for the company is (310) 514-9482.

The Offering.

159,809,657 shares of common stock of the company will be sold
pursuant to the terms of this prospectus. Shares outstanding prior to this
offering: 334,345,775, as of July 16, 2001. The shares will sold as follows:

. Shares have previously been purchased under a common stock purchase
agreement ("CSPA") with Alpha Venture Capital, Inc. ("Alpha") at 85%
of the market price on the put date: the maximum number of shares
issued under the CSPA will be 105,000,000. The commitment of this
investor under this agreement is $20,000,000. Under this agreement,
Alpha will be paid a commission of 6% of the amount of each drawdown.
The company may put shares to Alpha periodically under the CSPA. In
return, Alpha is required to provide funds to the company.

. Selling shareholders on a delayed basis under Rule 415: 54,809,657.

. Use of Proceeds: The proceeds of the offering, less the expenses of
the offering (estimated at $44,634), will be used to provide working
capital for the company.

RISK FACTORS

The securities offered hereby are highly speculative in nature and
involve a high degree of risk. They should be purchased only by persons who can
afford to lose their entire investment. Therefore, each prospective investor
should, prior to purchase, consider very carefully the following risk factors
among other things, as well as all other information set forth in this
prospectus.

Development Status of Product

The development of the eCashPad is in its early stages, and no
guarantee can be given of its ultimate successful implementation. Nevertheless,
the first generation eCashPad is complete and is presently being sold and used
by over 4,100 consumers at the eConnect store web site. The eConnect store, is a
Proof of Concept site (https://www.econnectholdings.com/epay/) where presently
an eCashPad user can purchase product with a credit card payment. About 200
eCashPads have been given away and eConnect has plans to freely distribute over
5,000 eCashPads during the fourth quarter. Failure to complete development of
the eCashPad would result in loss of advancement opportunities for the company.

The second generation eCashPad will be a USB connector and not a PS2
connector. Since these devices have not yet been produced, there is a risk that
they will not be manufactured as planned.

Significant Revenues Generation

Generation of revenues by the company is essential to its continued
existence. There is currently no guarantee that revenues will be forthcoming in
substantial amounts. This would be the case if, for example, no web merchants
signed up with the company. In spite of this risk, the company is endeavoring to
lay the groundwork for generation of significant revenues in the very near
future.

However, no revenues from operations have yet been realized. If the company does
not begin to generate substantial revenues, its continued existence is in
question.

Lack of Significant Experience

No one in the world has any significant experience in the PERFECT
industry. It has never been attempted before. The name PERFECT has been
created by eConnect. To date, we are the only company in the United States to be
implementing Bank Eyes Only payments. To our best knowledge, other than
ePayLatina, which is using the eCashPad in the Dominican Republic, there is no
experience for credit card present Internet payments. The PERFECT industry is in
the process of being developed by eConnect and the Bank Eyes Only system.

With what we have developed to date, the senior staff of eConnect are very
knowledgeable in the PERFECT industry but at the same time are just now
implementing the usage of eCashPad originated Bank Eyes Only payments and to
that end can be considered to not have significant experience within the
Internet business of PERFECT.

EConnect is the first company to enable consumers to swipe their
credit card and their ATM card with PIN and make Bank Eyes Only payments. We are
the first company to enable web merchants to receive credit card present
payments and PIN entered same as cash ATM card/debit card payments. The senior
staff of eConnect can be considered as experts in the PERFECT industry and are
learning as we go, as this is completely uncharted territory.

If this industry does not develop, or if unforeseen problems develop,
an adverse impact could be felt by the company in its attempts to begin revenue
generation.

Development Stage of Products May Affect Ability of Company to Succeed.

The company is currently selling the eCashPad. The company's
PocketPay will require significant additional investment in research and
development and will require substantial additional resources. The eCashPad has
met all necessary regulatory approvals (Federal Communicatons Commission and
Underwriters Laboratories) and is now ready for mass market consumer sales.

There can be no assurance that the company will generate significant
revenues in the future; and there can be no assurance that the company will
operate at a profitable level. If the company is unable to obtain customers and
generate sufficient revenues so that it can profitably operate, the company's
business will not succeed. In such event, investors in the shares may lose
their entire cash investment. Also the company and its management do not have
significant experience in the internet business, and in particular the on-line
gaming business. The primary anticipated function of the eCashpad is to enable
card with PIN and debit card with PIN payments, which will be the same as cash
payments. These transactions will be used to pay bills, make charity donations
and for impulse purchases due to incentives offered by web merchants. Such usage
also will naturally evolve into regulated home gaming services that can be paid
by an eCashPad originated transaction.

Although eConnect will not be offering games to be played, the Company
will provide the driving of home gaming originated wagers by ATM card and PIN
and will be paid a service fee for such transactions.

As a result of the fixed nature of many of the company's expenses, the
company may be unable to adjust spending in a timely manner to compensate for
any unexpected delays in the development and marketing of the company's products
or any capital raising or revenue shortfall. Any such delays or shortfalls will
have an immediate adverse impact on the company's business, operations and
financial condition.

Company Has Had Limited Revenue, History of Operating Losses, and Accumulated
Deficit, and Expects Such Losses to Continue for the Foreseeable Future.

The company has had almost no revenue to date. Although the company has been
involved with e-commerce since 1999, it has been primarily engaged in research
and development. The company has incurred significant losses from operations:
Net loss from operations of $19,068,529 for the fiscal year ended December 31,
1999, $107,809,363 for the fiscal year ended December 31, 2000, and $10,993,050
for the six months ended June 30, 2001. At June 30, 2001, the company had an
accumulated deficit of $156,248,737 (the majority of which resulted from stock
issued for services). The future growth and profitability of the company will be
principally dependent upon its ability to successfully complete development and
testing of, obtain regulatory approvals for, and market or license its primary
products. Accordingly, the company's prospects must be considered in light of
the risks, expenses and difficulties frequently encountered in connection with
the establishment of a new business in a highly competitive industry,
characterized by new product introductions.

The company anticipates that it will incur substantial operating
expenses in connection with the research, development, testing and approval of
its proposed products and expects these expenses to result in continuing and
significant losses until such time as the company is able to achieve adequate
revenue levels. There can be no assurance that the company will be able to
significantly increase revenues or achieve profitable operations. Failure to
obtain additional capital, if needed, would have a material adverse effect on
the company's operations.

Company Will Need Additional Financing to Implement its Business Plan and Such
Financing May Be Unavailable or Too Costly.

The company will be required to raise significant equity capital to
fund its plan of operation; it has in place equity financing of $20,000,000 over
the next 24 months. Recently, the company has been meeting its funding
requirements through financing provided by Alpha Venture Capital, Inc. through
loan advances made pending activation of a common stock purchase agreement
between the company and this firm, dated December 8, 2000, in the commitment
amount of $15,000,000. In addition, the company has been meeting its funding
requirements through financing provided by Alliance Equities under a revolving
$400,000 line of credit, provided in exchange for restricted common stock of the
Company pursuant to an agreement dated March 5, 2001. There currently is no
outstanding balance with Alliance. However, there is no guarantee that these
funding sources will continue to be available in the future.

The current funds available to the company, and any revenue generated
by operations, will not be adequate for it to be competitive in the areas in
which it intends to operate, and may not be adequate for the company to survive.
Therefore, the company will need to raise additional funds in order to fully
implement its business plan. The company's continued operations therefore will
depend upon its ability to raise additional funds through bank borrowings,
equity or debt financing. There is no assurance that the company will be able to
obtain additional funding when needed, or that such funding, if available, can
be obtained on terms acceptable to the company. If the company cannot obtain
needed funds, it may be forced to curtail or cease its activities. If additional
shares were issued to obtain financing, current shareholders may suffer a
dilution on their percentage of stock ownership in the company.

Pursuant to Section 5.11 of the CSPA with Alpha, dated October 6,
2001, the company cannot enter into any subsequent or further offer or sale of
common stock or convertible securities convertible into common stock until July
31, 2002, or the expiration of the Commitment Period.
There can be no assurance that the marketplace will accept and utilize products
that have been, or may be, developed by company.

There can be no assurance that the eCashPad, as well as any other
products successfully developed by the company, will ever achieve significant
market acceptance. The degree of market acceptance of any products developed by
the company will depend on a number of factors, including the establishment,
demonstration of the efficacy of the product candidates and their potential
advantage over alternative methods.

There can be no assurance that the marketplace in general will accept and
utilize any products that may be developed by the company. If not accepted, an
investor's entire investment may be lost.

Risks Associated with eCashPad Production May Affect Distribution of eCashPads.

The agreement under which the eCashPad was originally manufactured for
the company only calls for an initial production run of 5,000 units, at a total
cost of $80,000. The company has contracted to purchase 100,000 eCashPads from
Asia Pacific Micro, Inc. Asia Pacific Micro has been contracted to manufacture
the first generation eCashPad, which is a PS2 connection to a desktop computer
and is proprietary to the company. The company has paid Asia Pacific Micro the
sum of $2.8 million. The eCashPad is simply connected to the keyboard port on
the desktop and the keyboard is connected to the eCashPad. In addition, the
company recently signed an agreement with 3Pea Technologies, Inc. ("3Pea"), for
the production of the second generation eCashPad which has a USB connector which
expands the usage of the eCashPad to all desktops, laptops and PDA devices that
offer a USB connection. The company paid $110,000 to 3Pea for non-recoverable
design expense.

The 3Pea agreement offers the company substantial savings by
contracting with Taiwan for manufacturing. Currently, the manufacturer is stable
but there is no guarantee that the manufacturer may not be impacted by future
changes in government policies. Relations with China are also a continuing
question mark for any transactions with a Taiwanese company.

Approval of Regional ATM Networks for Use of eCashPad is Important in Securing a
Market for this Product.

Within the United States market, the company is working to secure the
go ahead for regional ATM card networks for an eCashPad ATM card with PIN entry
"Bank Eyes Only" Internet payment. Such network currently permit the usage of
credit cards on their systems. Thus, a substantial part of the company's
strategy is based on ATM card with PIN entry Internet payments, and the company
may not receive bank approvals from the regional ATM card networks in the United
States for such transactions. In such case, this payment system could not be
used in the United States, which could substantially affect the prospects of the
Company in this country. Even though this type of payment system has already
been approved in the Dominican Republic and Ireland, and may be approved
elsewhere outside the United States, the Company would expect that a substantial
portion of its projected revenues would come from United States based
transactions. The company is currently providing eCashPads in the Dominican
Republic to facilitate both card-present credit card payments and ATM card with
PIN Internet payments to Dominican Republic web merchants. The company is not
currently active in Ireland.

No Assurance of Protection of Proprietary Information.

Certain of the company's know-how and proprietary technology may not
be patentable. To protect its rights, the company requires management personnel,
employees, consultants, and advisors to enter into confidentiality agreements.
There is no assurance, however, that these agreements will provide meaningful
protection for the company's trade secrets, know-how or other proprietary
information in the event of any unauthorized use or disclosure. The eCashpad is
Patent Pending. The EzyDepot is developed and patented and is exclusively
licensed by ET&T to eConnect for global usage as is the PocketPay which has not
been developed.

Competition In Internet Commerce May Affect Company's Ability to Attract
Customers.

The company anticipates substantial competition in the development of
the PERFECT industry and the "Bank Eyes Only" internet application in
particular. The company believes that the marketplace is large enough to absorb
many competitor companies who may focus on ancillary aspects of the PERFECT
industry such as the development of hardware or of merchant sign ups, rather
than on the core business of the company which is the processing of
transactions.

Increased competition from e-commerce could result in reduced margins
or loss of market share, any of which could harm both our retail and e-commerce
businesses. Competition is likely to increase significantly as new companies
enter the market and current competitors expand their services. Many of the
company's present and potential competitors are likely to enjoy substantial
competitive advantages, including larger numbers of users, more fully-developed
e-commerce opportunities, larger technical, production and editorial staffs, and
substantially greater financial, marketing, technical and other resources. If
the company does not compete effectively or if it experiences any pricing
pressures, reduced margins or loss of market share resulting from increased
competition, the company's business could be adversely affected.

Loss of Any Key Personnel May Affect the Ability of Company to Operate.

The company's success is dependent upon the hiring of key personnel.
None of the company's officers, directors, and key employees have an employment
agreement with the company (the accounting manager does have an employment
agreement with the company); therefore, there can be no assurance that these
personnel will remain employed by the company after the termination of such
agreements. Should any of these individuals cease to be affiliated with the
company for any reason before qualified replacements could be found, there could
be material adverse effects on the company's business and prospects. In
addition, management has no experience is managing companies in the same
business as the company.

Growth of Company Could Affect Management's Ability to Control Company.

The company's future growth, if any, may cause a significant strain on
its management, operational, financial and other resources. The company's
ability to manage its growth effectively will require it to implement and
improve its operational, financial, manufacturing and management information
systems and to expand, train, manage and motivate its employees. These demands
may require the addition of new management personnel and the development of

additional expertise by management. Any increase in resources devoted to
research, product development and marketing and sales efforts without a
corresponding increase in the company's operational, financial, manufacturing
and management information systems could have a material adverse effect on the
company's business, financial condition, and results of operations.

Limitations on Liability, and Indemnification, of Directors and Officers May
Result in Financial Outlays by Company.

The articles of incorporation and bylaws of the company provide for
indemnification of officer or directors of the company. Such indemnification
shall be for liability resulting from acts undertaken in an official capacity.
In addition, the Nevada Revised Statutes provide for indemnification of officers
and directors and the company may provide indemnification under such provisions.
Any limitation on the liability of any director, or indemnification of
directors, officer, or employees, could result in substantial expenditures being
made by the company in covering any liability of such persons or in indemnifying
them.

Conflicts of Interest May Arise With Regard to Other Business Activities of the
Directors.

The directors of the company have other business interests to which
they devote time. As a result, certain conflicts of interest may arise between
the company and the directors which might not be susceptible to resolution. Any
potential conflicts of interest will be resolved through exercise by the
directors of such judgment as is consistent with their fiduciary duties to the
company. It is the intention of management, so as to minimize any potential
conflicts of interest, to present first to the board of directors of the
company, any proposed investments for its evaluation. Potential conflicts
existing include the fact that Mr. Hughes controls ET&T from which the
technology surrounding the eCashPad, EzyDepot and PocketPay are licensed; the
amount of $4,835,718 has been expensed as a bad debt owed by Mr. Hughes and ET&T
to the company; and substantial consulting agreements have been entered into
with Richard Epstein, who controls this company.

Lack of Cumulative Voting Will Affect a Shareholder's Ability to Elect a Board
Member.

Holders of the shares are not entitled to accumulate their votes for
the election of directors or otherwise. Accordingly, the holders of a majority
of the shares present at a meeting of shareholders will be able to elect all of
the directors of the company, and the minority shareholders will not be able to
elect a representative to the company's board of directors.

Absence of Cash Dividends May Affect a Shareholder's Return on His Investment.

The board of directors does not anticipate paying cash dividends on
the shares for the foreseeable future and intends to retain any future earnings
to finance the growth of the company's business. Payment of dividends, if any,
will depend, among other factors, on earnings, capital requirements, and the
general operating and financial condition of the company, and will be subject to
legal limitations on the payment of dividends out of paid-in capital.

Dilutive Effects

In order to implement the CSPA, this registration statement includes
105,000,000 shares that are being registered for the benefit of Alpha as a
Selling Shareholder. This amount represents approximately 20% of the authorized
and issued capital of the company. As such, this offering may have a substantial
dilutive effect on current shareholders.

Further Issuances of Shares

James Clinton, together with other individuals, were previously shareholders of
the predecessor of the company. This group now has the right to maintain 10%
control of the company, continued maintenance of this percentage control may
require issuance of more shares or otherwise cause substantial dilution for
shareholders.

Further Dilutive Effects

Further substantial dilution may be experienced by shareholders as a result of
the following: ET&T's option under its license agreement to purchase up to
13,822,000 additional shares at an exercise price of $0.30 per share; the
preemptive rights of James Clinton; the future issuance of 20,000,000 shares to
Mr. Epstein in payment of money owed by the company under its debentures; the
issuance of shares to Alpha pursuant to private equity lines entered into in
September 1999 and December 2000; and the future issuance of a warrant to
purchase 1 million shares to Mr. Egan in connection with his consultancy
agreement.

Fees To Be Paid to ET&T

The host processing agreement between the company and ET&T will involve payment
to ET&T of fees based on transactions initiated through gaming operators that
use the company's service. These fees are set forth in the agreement. ET&T will
receive either 10 cents per transaction or 10% of each transaction fee...
whichever is the larger and which is generated by an Bank Eyes Only payment as
originated by an eConnect driven device whereby eConnect is the front end
processor of the transaction. Difficulty of gaming operators to charge fees high
enough to cover ET&T's fees and to make a profit may cause decrease in interest
and utilization of the services of the company.

Sales by Selling Shareholders - No Proceeds to the Company

Sales may be made at any time and from time to time under this prospectus by
selling shareholders. These will be conducted at then-current market prices.
There can be no guarantee that after these sales are made at any given price,
that such price will be maintained or increased. The company will not receive
any proceeds from these sales.

Risk of Low Priced Securities May Affect the Liquidity of Company's Stock.

The company's common stock is subject to the low-priced security or so
called "penny stock" rules that impose additional sales practice requirements on
broker-dealers who sell such securities. The Securities Enforcement and Penny
Stock Reform Act of 1990 requires additional disclosure in connection with any
trades involving a stock defined as a penny stock (generally, according to
recent regulations adopted by the U.S. Securities and Exchange Commission, any
equity security that has a market price of less than $5.00 per share, subject to
certain exceptions), including the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith. The regulations governing low-priced or penny
stocks sometimes limit the ability of broker-dealers to sell the company's
common stock and thus, ultimately, the ability of the investors to sell their
securities in the secondary market.

Because of a Limited Public Market for Company's Securities, an Investor May Not
Be Able to Liquidate the Shares Readily or at All.

Prior to this offering, there has been only a limited public market
for the shares of common stock being offered. The common stock of the company
is currently quoted on the Over the Counter Bulletin Board; it was relisted on
October 30, 2000 after trading on the National Quotation Bureau's Pink Sheets
since being delisted from the Over the Counter Bulletin Board after the SEC
trading suspension on March 13, 2000. Trading was suspended due to unusual
marker activity in the stock which included a sharp rise in the stock.

The market prices for the securities of technology companies have
historically been highly volatile. The market has from time to time experienced
significant price and volume fluctuations that are unrelated to the operating
performance of any particular company. The market price of the shares may be
affected significantly by factors such as announcements by the company or its
competitors, variations in the company's results of operations, and market
conditions in the retail, electron commerce, and internet industries in general.
The market price may also be affected by movements in prices of stock in
general. As a result of these factors, purchasers of the shares offered hereby
may not be able to liquidate an investment in the shares readily or at all.

Failure to Maintain Market Makers by Company Could Affect the Stock's Liquidity.

If the company is unable to maintain a National Association of
Securities Dealers, Inc. member broker/dealers as market makers after relisting
on the Bulletin Board, the liquidity of the common stock could be impaired, not
only in the number of shares of common stock which could be bought and sold, but
also through possible delays in the timing of transactions, and lower prices for
the common stock than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares of the common
stock on any secondary market. There can be no assurance the company will be
able to maintain such market makers.

Shares Eligible For Future Sale

All of the approximate 17,500,000 shares of common stock which are
currently held, directly or indirectly, by management have been issued in
reliance on the private placement exemption under the Securities Act of 1933.
Such shares will not be available for sale in the open market without separate
registration except in reliance upon Rule 144 under the Securities Act of 1933.
In general, under Rule 144 a person (or persons whose shares are aggregated) who
has beneficially owned shares acquired in a non-public transaction for at least
one year, including persons who may be deemed affiliates of the company (as that
term is defined under that rule) would be entitled to sell within any three-
month period a number of shares that does not exceed the greater of 1% of the
then outstanding shares of common stock, or the average weekly reported trading
volume during the four calendar weeks preceding such sale, provided that certain
current public information is then available. If a substantial number of the
shares owned by these shareholders were sold pursuant to Rule 144 or a
registered offering, the market price of the common stock could be adversely
affected.

Potential Status as a Pseudo California Corporation.

Section 2115 of the California General Corporation Law subjects
certain foreign corporations doing business in California to various substantive
provisions of the California General Corporation Law in the event that the
average of its property, payroll and sales is more than 50% in California and
more than one-half of its outstanding voting securities are held of record by
persons residing in the State of California. Some of the substantive provisions
include laws relating to annual election of directors (under Section 708,
cumulative voting is mandated), removal of directors without cause, removal of
directors by court proceedings, indemnification of officers and directors,
directors standard of care and liability of directors for unlawful
distributions. Section 2115 does not apply to any corporation which, among
other things, has outstanding securities designated as qualified for trading as
a national market security on NASDAQ if such corporation has at least eight
hundred holders of its equity securities as of the record date of its most
recent annual meeting of shareholders.

Currently, all of the sales by the company come from sources outside
the State of California and the company believes that more than 50% of its
common stock is held by record holders residing outside California. Therefore,
the company believes it is not subject to Section 2115.

Going Concern

The Company incurred a net loss of approximately $7,202,000 and $11,305,000 for
the three and six months ended June 30, 2001, respectively. The Company's
current liabilities exceed its current assets by approximately $13,539,000 as of
June 30, 2001. These factors create an uncertainty about the Company's ability
to continue as a going concern. The Company's management has developed a plan to
complete the development of technology products and create their respective
markets to generate future revenues. The Company will also seek additional
sources of capital through the issuance of debt and equity financing, but there
can be no assurance that the Company will be successful in accomplishing its
objectives.

The ability of the Company to continue as a going concern is dependent on
additional sources of capital and the success of the Company's plan. The
company's auditors have issued a "going concern" opinion. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.

Potential Depressive Effect to Market Price of Securities

When the puts under the CSPA are exercised by the company, the shares
will be purchased by Alpha at a discount to the market price. This may have a
depressive effect on the overall market for the shares of the company. This is
especially true when one considers that at the time of any puts, the company
will be at its greatest financial need and may already be vulnerable to
downturns in the share market price.

Potential Risks Associated with Multiple Lawsuits

The company is currently in the midst of multiple lawsuits and other
legal activity. These lawsuits are being actively defended and reasonable
settlements and culminations are being aggressively sought. If, however, these
efforts are not successful or achieve only limited success, substantial harm
could occur to the company as a result of these lawsuits.

USE OF PROCEEDS

The company will not receive any proceeds from this offering. The
105,000,000 shares registered on behalf of Alpha Venture Capital, Inc. were
previously sold. Proceeds of this sale to Alpha under the equity line will be
used for working capital and for general corporate purposes. These purposes may
include such items as purchasing eCashPads, marketing and continued
technological development. No specific amounts can be allocated to any of these
potential expenditures at this time.

SELLING SHAREHOLDERS

Selling shareholders will be offering a total of 33,809,657 shares of
common stock of the company, as follows (these restricted shares were issued in
connection with consulting services rendered to the company and various loans
made to the company):

------------------------------------------------------------------------------------------------------------------------------------
Amount Offered for
Amount Beneficially Selling Shareholder's Amount Beneficially Percentage Ownership
Name of Selling Shareholder Owned Prior to Offering Account Owned After Offering After Offering /(1)/
------------------------------------------------------------------------------------------------------------------------------------

Alpha Venture Capital, Inc. /(8)/ 105,000,000 105,000,000 0 0
Richard Epstein /(2)/ 68,523,186 48,949,657 19,573,529 4.82%
Chris Jensen /(3)/ 6,200,000 2,000,000 4,200,000 *
Mary Lou Garcia /(4)/ 2,000,000 1,000,000 0 *
Alberto Barrera /(5)/ 700,000 600,000 100,000 *
Prima Capital Group, Inc. 500,000 500,000 0 *
Charles Yourshaw /(6)/ 2,400,000 350,000 2,050,000 *
Quinn Brady 2,360,300 300,000 2,060,000 *
Bryan Bagdady /(7)/ 405,000 150,000 255,000 *
Matthew Lee 360,500 200,000 160,500 *
Roger Swanson 270,000 150,000 120,000 *
Wayne Hall 300,000 100,000 200,000 *
Donald Mudd 2,500,000 100,000 2,400,000 *
Richard Zobrist 100,000 50,000 50,000 *
Pamela Matthews 100,000 50,000 50,000 *
John Fishbein 100,000 50,000 50,000 *
Jeff Lichter 70,000 35,000 35,000 *
------------------------------------------------------------------------------------------------------------------------------------

Eric Bringhurst 60,000 30,000 30,000 *%
Richard Holt 52,000 25,000 27,500 *%
Karen & Wayne Gruninger 50,000 25,000 25,000 *%
Lori Lane 55,000 25,000 30,000 *%
John Hogle 50,000 25,000 25,000 *%
Patrick Passarella 50,000 25,000 25,000 *%
Matthew Ospeck 40,000 20,000 20,000 *%
John Kostecki 40,000 20,000 20,000 *%
Marvin Gaberman 20,000 10,000 10,000 *%
Paul Brunn 20,000 10,000 10,000 *%
Tim Bradlee 20,000 10,000 10,000 *%
Total 86,346,186 33,809,657 52,536,529 8.40%
========== ========== ========== =====

* Less than 1%
------------------------------------------------------------------------------------------------------------------------------------

/(1)/ Based on the total issued and outstanding common stock of 334,345,775 as
of July 16, 2001.

/(2)/ The amount owned by this selling shareholder represents the combined
holdings of Alliance Equities and Richard Epstein, who controls this firm. This
amount includes the following: (a) a warrant for the purchase of 1,400,000
shares of common stock, currently exercisable at $1.00 per share through June
30, 2002; (b) a warrant for the purchase of 2,400,000 shares of common stock,
currently exercisable at $0.40 per share through September 30, 2003; and (c) a
warrant for the purchase of 3,000,000 shares of common stock, currently
exercisable at $0.25 per share through September 30, 2003. The remainder of the
holdings consists of shares of common stock, 48,949,657 of which are restricted
and are being offered by this selling shareholder.

/(3)/ This represents the combined holdings of GoldStake Enterprises and Chris
Jensen, who controls this firm.

/(4)/ The amount owned and to be offered by this selling shareholder consists
of the following: (a) an option for the purchase of 750,000 shares of common
stock, currently exercisable at 25% of the prevailing market price through June
4, 2002; and (b) a warrant for the purchase of 250,000 shares of common stock,
exercisable at $1.00 per share through June 5, 2002. The remainder of the
holdings (1,000,000) consists of restricted shares of common stock.

/(5)/ The amount owned by this selling shareholder includes a warrant for the
purchase of 100,000 shares of common stock, currently exercisable at $1.00 per
share through June 30, 2002. The remainder of the holdings (600,000), which are
being offered by this selling shareholder, consists of restricted shares of
common stock.

/(6)/ The amount owned by this selling shareholder includes the following: (a)
a warrant for the purchase of 1,000,000 shares of common stock, currently
exercisable at $1.00 per share through June 30, 2002; and (b) a warrant for the
purchase of 50,000 shares of common stock, currently exercisable at $1.00 per
share through June 30, 2002. The remainder of the holdings consists of shares of
common stock, 350,000 of which are restricted and are being offered by this
selling shareholder.

/(7)/ The amount owned by this selling shareholder includes a warrant for the
purchase of 145,000 shares of common stock, currently exercisable at $1.00 per
share through June 30, 2002. The remainder of the holdings consists of shares
of common stock, 150,000 of which are restricted and are being offered by this
selling shareholder.

/(8)/ The amount owned by this selling shareholder includes 105,000,000 shares
purchased under the CSPA. Alpha is deemed an underwriter for this offering in
connection with the resale of that stock.

PLAN OF DISTRIBUTION

Registration under this Offering.

. Shares to be offered under a common stock purchase agreement ("CSPA")
with Alpha, at 85% of the market price on the put date will total up
to 105,000,000. The commitment of this investor under this agreement
is $20,000,000. Under this agreement, Alpha will be paid a commission
of 6% of the amount of each drawdown. The company may put shares to
Alpha periodically under the CSPA. In return, Alpha is required under
the CSPA to provide funds to the company. Alpha is an underwriter of
this offering

. Selling shareholders on a delayed basis under Rule 415: 54,809,657.

. Use of Proceeds: The proceeds of the offering, less the expenses of
the offering (estimated at $44,634), will be used to provide working
capital for the company.

There can be no assurance that any of these shares will be sold. Other
than as set forth above, no commissions or other fees will be paid, directly or
indirectly, by the company, or any of its principals, to any person or firm in
connection with solicitation of sales of the shares.

Selling Shareholders.

(a) Manner of Sales; Broker-Dealer Compensation.

The selling shareholders, or any successors in interest to the selling
shareholders, may sell their shares of common stock in one or more of the
following methods:

. Ordinary brokers' transactions;

. Transactions involving cross or block trades or otherwise on the
Bulletin Board;

. Purchases by brokers, dealers or underwriters as principal and resale
by these purchasers for their own accounts pursuant to this
prospectus;

. "At the market" to or through market makers or into an existing
market for the company's common stock;

. In other ways not involving market makers or established trading
markets, including direct sales to purchases or sales effected through
agents;

. Through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise);

. In privately negotiated transactions;

. To cover short sales; or

. Any combination of the foregoing.

The selling shareholders also may sell their shares in reliance upon
Rule 144 under the Securities Act at such times as they are eligible to do so.
The company has been advised by the selling shareholders that they have not
made any arrangements for the distribution of the shares of common stock.
Brokers, dealers or underwriters who effect sales for the selling shareholders
may arrange for other brokers, dealers or underwriters to participate. Brokers,
dealers or underwriters engaged by the selling shareholders will receive
commissions or discounts from them in amounts to be negotiated prior to the
sale. These brokers, dealers or underwriters may act as agent or as principals.

From time to time, one or more of the selling shareholders may pledge,
hypothecate or grant a security interest in some or all of the shares of common
stock being offered for sale, and the pledgees, secured parties or persons to
whom these securities have been pledged shall, upon foreclosure in the event of
default, be considered a selling shareholder hereunder. In addition, selling
shareholders may, from time to time, sell short their common stock. In these
instances, this prospectus may be delivered in connection with these short sales
and the shares of the common stock may be used to cover these short sales.

From time to time one or more of the selling shareholders may
transfer, pledge, donate or assign shares of their common stock to lenders or
others and each of these persons will be considered a selling shareholder for
purposes of this prospectus. The number of shares of the company's common stock
beneficially owned by those selling shareholders who so transfer, pledge,
donate or assign shares of their common stock will decrease as and when they
take these actions. The plan of distribution for the company's common stock by
the selling shareholders set forth herein will otherwise remain unchanged,
except that the transferees, pledgees, donees or other successors will be
considered selling shareholders hereunder. Such selling shareholders will not
be able to use this prospectus unless and until a post-effective amendment is
filed, naming those individuals, and is declared effective.

Subject to the limitations discussed above, a selling shareholder may
enter into hedging transactions with broker-dealers and the broker-dealers may
engage in short sales of the company's common stock in the course of hedging the
positions they assume with this selling shareholders, including in connection
with distributions of the common stock by these broker-dealers. A selling
shareholder may also enter into option or other transactions with broker-dealers
that involve the delivery of the company's common stock to the broker-dealers,
who may then resell or otherwise transfer these shares. A selling shareholder
also may loan or pledge the company's common stock to a broker-dealer and the
broker-dealer may sell the common stock so loaned or upon a default may sell or
otherwise transfer the pledged common stock.

(b) Filing of a Post-Effective Amendment In Certain Instances.

If any selling shareholders notifies the company that he, she, or it
has entered into a material arrangement (other than a customary brokerage
account agreement) with a broker or dealer for the sale of shares of common
stock under this prospectus through a block trade, purchase by a broker or
dealer or similar transaction, the company will file a post- effective amendment
to the registration statement for this offering. The post-effective amendment
will disclose:

. The name of each broker-dealer involved in the transaction.

. The number of shares of common stock involved.

. The price at which those shares of common stock were sold.

. The commissions paid or discounts or concessions allowed to the
broker-dealer(s).

. If applicable, that these broker-dealer(s) did not conduct any
investigation to verify the information contained or incorporated by
reference in this prospectus, as supplemented.

. Any other facts material to the transaction.

The selling shareholders and any broker-dealers who execute sales for
them may be deemed to be "underwriters" within the meaning of the Securities Act
of 1933 because of the number of shares of common stock to be sold or resold by
these persons or entities or the manner of sale of these shares, or both. If a
selling shareholder or any broker-dealer or other holders were determined to be
underwriters, any discounts, concessions or commissions received by them or by
brokers or dealers acting on their behalf and any profits received by them on
the resale of their shares of common stock might be deemed to be underwriting
discounts and commissions under the Securities Act.

(d) Regulation M.

The company has informed the selling shareholders that Regulation M
promulgated under the Securities Exchange Act of 1934 may be applicable to them
with respect to any purchase or sale of the company's common stock. In general,
Rule 102 under Regulation M prohibits any person connected with a distribution
of the company's common stock from directly or indirectly bidding for, or
purchasing for any account in which it has a beneficial interest, any of the
common stock or any right to purchase this stock, for a period of one business
day before and after completion of its participation in the distribution.

During any distribution period, Regulation M prohibits the selling
shareholders and any other persons engaged in the distribution from engaging in
any stabilizing bid or purchasing the company's common stock except for the
purpose of preventing or retarding a decline in the open

market price of the common stock. None of these persons may effect any
stabilizing transaction to facilitate any offering at the market. As the selling
shareholders will be reoffering and reselling the company's common stock at the
market, Regulation M will prohibit them from effecting any stabilizing
transaction in contravention of Regulation M with respect to this stock.

Opportunity to Make Inquiries.

The company will make available to each offeree, prior to any issue of
the shares, the opportunity to ask questions and receive answers from the
Company concerning any aspect of the investment and to obtain any additional
information contained in this prospectus, to the extent that the Company
possesses such information or can acquire it without unreasonable effort or
expense.

Execution of Documents.

Each person desiring to purchase Shares must complete, execute,
acknowledge, and delivered to the company certain documents. By executing these
documents, the subscriber is agreeing that such subscriber will be, a
shareholder in the Company and will be otherwise bound by the articles of
incorporation and the bylaws of the Company.

LEGAL PROCEEDINGS

Other than as stated below, the company is not a party to any material
pending legal proceedings and, to the best of its knowledge, no such action by
or against the company has been threatened:

Securities and Exchange Commission Action (March 12, 1999).

On March 12, 1999, the Securities and Exchange Commission ("SEC")
filed a complaint alleging the company had failed to make available to the
investing public current and accurate information about its financial condition
and results of operations through the filing of periodic reports as required by
the Securities Exchange Act of 1934 (specifically, the Form 10-KSB for the 1997
and 1998 fiscal years, the Form 10-QSB for each of the first three quarters of
fiscal 1998, and the corresponding Notifications of Late Filings (Form 12b-25)).
The SEC sought in this action to compel the company to file delinquent reports
and enjoin the company from further violations of the reporting requirements.
The company consented to the entry of a final judgment granting the relief
sought by the SEC.

Securities and Exchange Commission Action (March 23, 2000).

In a complaint filed on March 23, 2000 (Securities and Exchange
-----------------------
Commission v. eConnect and Thomas S. Hughes, Civil Action No. CV 00 02959 AHM
-------------------------------------------
(C.D. Cal.)), the SEC alleged that since February 28, 2000, the company issued
false and misleading press releases claiming: (1) the company and its joint
venture partner had a unique licensing arrangement with PalmPilot; and (2) a
subsidiary of the company had a strategic alliance with a brokerage firm
concerning a system that would permit cash transactions over the Internet. The
complaint further alleges that the press releases, which were disseminated
through a wire service as well as by postings on internet bulletin boards,
caused a dramatic rise in the price of the company's stock from $1.39 on
February 28 to a high of $21.88 on March 9, 2000, on heavy trading volume. The
SEC suspended trading in the company's common stock on the Over the Counter
Bulletin Board on March 13 for a period of 10 trading days (trading resumed on
the Pink Sheets LLC on March 27, 2000). The complaint alleges that despite the
trading suspension and the SEC's related investigation, the company and Mr.
Hughes continued to issue false and misleading statements concerning the
company's business opportunities. In addition to the interim relief granted,
the Commission seeks a final judgment against the company and Mr. Hughes
enjoining them from future violations of Section 10(b) of the Exchange Act and
Rule 10b-5 thereunder (the anti-fraud provisions of that act) and assessing
civil penalties against them.

On March 24, 2000, a temporary restraining order was issued in the
above-entitled action prohibiting the company and Mr. Hughes, from committing
violations of the antifraud provisions of the federal securities laws. The
company and Mr. Hughes consented to the temporary restraining order.

On April 6, 2000, without admitting or denying the allegations
contained in said complaint, the company and Mr. Hughes entered into a
settlement by consent that has resulted in the entry of permanent injunctive
relief. The settlement agreement with the SEC was accepted and a judgment of
permanent injunction was entered by the Court on April 7, 2000. The judgment
that the company and Mr. Hughes consented to prohibits the company and Mr.
Hughes from taking any action or making any statement, or failing to make any
statement that would violate Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 thereunder. The court has yet to determine whether
disgorgement, civil penalties or other relief should be assessed against the
company and/or Mr. Hughes.

Shareholder Class Action Lawsuits.

Einhorn, et al. v. eConnect, Thomas S. Hughes, Jack M. Hall, Dianne Hewitt,
Anthony L. Hall, and Kevin J. Lewis, Case No. 00-02674 MMM (JWJx);

Eckstein, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne
Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00-02700 DDP (CWx);

Bernstein, et al. v. eConnect, Inc., et al., Case No. 00-02703 FMC (BQRx);

Colangelo, et al. v. eConnect, Inc., et al., Case No. 00-02743 SVW (SHx);

Baron, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne Hewitt,
Anthony L. Hall, and Kevin J. Lewis, Case No. 00-02757 WJR (CTx);

Warstler, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne
Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00-02758 R (SHx);

Prager, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne
Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00-02759 GHK (RCx);

Weisblum, et al. v. eConnect and Thomas S. Hughes, Case No. 00-02770 MRP (CTx);

Mazda, et al. v. eConnect, et al., Case No. 00-02776 LGB (Mcx);

Pirraglia, et al. v. eConnect, et al., Case No. 00-02875 SVW (CWx);

Hershkop and Hershkop, et al. v. eConnect and Thomas S. Hughes, Case No. 00-
03095 MRP (RNRx);

Bacun, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne Hewitt,
Anthony L. Hall, and Kevin J. Lewis, Case No. 00-03161 FMC (JWJx);

Fine, et al. v. eConnect, Inc. and Thomas Hughes, Case No. 00-03290 SVW (BQRx);

Smith, et al. v. eConnect, Thomas Hughes, Case No. 00-03301 DT (Mcx);

Reimer, et al. v. eConnect, Thomas Hughes, Case No. 00-03405 JSL;

Tepper, et al. v. eConnect and Thomas S. Hughes, Case No. 00-03444 WJR (CTx);

Bury, et al. v. eConnect, Thomas Hughes, Case No. 00-03446 ABC;

Villari, et al. v. eConnect, Thomas Hughes, Case No. 00-03447 LGB (SHx);

Ringel, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne
Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00-03591 RSWL (RNBx);

Massaro, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne
Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00-03671 DDP (MANx);

Gardner, et al. v. eConnect, Inc., Thomas S. Hughes, Jack M. Hall, Dianne
Hewitt, Anthony L. Hall, and Kevin J. Lewis, Case No. 00-03897 MMM (RZx);

Schneyer, et al. v. eConnect, Case No. CV-00-03783 MMM (JWJx);

Ginocchi, et al. v. eConnect, Case No. 00-04003 MMM (JWJx);

Matrisciani, et al. v. eConnect, Case No. 00-04181 MMM (JWJx);

Dutton, et al. v. eConnect, Case No. 00-04505 LGB (Ex);

Shaw, et al. v. eConnect, Case No. 00-04637 LGB (Ex);

Gowrie, et al. v. eConnect, Case No. 00-04686 LGB (Ex);

Belcher, et al. v. eConnect, Case No.00-04792 LGB (Ex);

Lively, et al. v. eConnect, Case No. 00-03112 MMM (JWJx);

Levine, et al. v. eConnect, Case No. 00-03649 MMM (JWJx); and

Berkowitz, et al. v. eConnect, Case No. 00-04152 MMM (JWJx).

The foregoing thirty-one actions were filed on various dates between
March 14, 2000 and early May 2000, inclusive, and are all pending in the United
States District Court for the Central District of California. These actions are
brought by various putative classes of the purchasers of the company's common
stock. The putative classes alleged, none of which have been certified, range
from no earlier than November 18, 1999 through March 13, 2000. Plaintiffs in
the various actions assert that the company and Thomas S. Hughes, as well as (in
certain of the actions) Jack M. Hall, Diane Hewitt, Anthony L. Hall, and Kevin
J. Lewis, have violated Section 10(b) of the Exchange Act (false or misleading
statements and omissions which deceived stock purchasers) and also Section 20(a)
of the Exchange Act (liability as a "controlling person" with respect to a

primary violation of securities laws). The principal allegations concern
various alleged material misrepresentations and omissions which supposedly made
the company's public statements on and after November 18, 1999 (and/or on and
after November 23, 1999) false and misleading, thereby artificially inflating
the market in and for the company's common stock.

No class has yet been certified in connection with any of these
actions. All cases have been combined into one case before the Honorable
Margaret M. Morrow, entitled In Re eConnect, Inc. Securities Litigation, Master
File No. 00-02674 MMM (JWJx). Negotiations are underway regarding the settlement
of these actions.

Additionally, a shareholder of the company named John P. Maloney,
filed an individual action for "securities fraud and misrepresentation" against
the company and Mr. Hughes on May 12, 2000 in small claims court in Torrance,
California. The company subsequently removed the action to the United States
District Court for the Central District of California, and requested that it be
consolidated with In Re eConnect, Inc. Securities Litigation. However, on
September 11, 2000, the Honorable Margaret M. Morrow ruled that Mr. Maloney's
action should be remanded to the state small claims court. Subsequently, Mr.
Maloney's action was settled amicably and dismissed.

The company has reached a settlement in principle with the
plaintiff's attorneys, pursuant to which $350,000 was paid to plaintiffs'
counsel. A warrants component of the settlement is still being finalized with
plaintiffs' counsel. The company anticipates that the settlement will be
negotiated in full and approved by the Court in July 2001.

Employment Agreement - President/Chief Operating Officer.

On March 21, 2000, the company consummated an amended employment
agreement with Steven Pazian for the position of President and Chief Operating
Officer for the company. On April 17, 2000, the company terminated this
individual as President and Chief Operating Officer of the company. Based upon
the amended employment agreement, the remaining salary for the term of this
agreement, will be due within 30 days upon the termination of this individual if
terminated for reasons other than good cause. In addition, through the date of
termination, all of the granted stock options and warrants will vest and be
exercisable for their entire term. Accordingly, the termination of this
individual, for reasons other than good cause, may potentially expose the
company to incur a liability of approximately $1,260,000 for the remaining
portion of unpaid salary for the first, second, third, and fourth years of this
agreement. Furthermore, the termination may have accelerated the vesting of the
granted stock options and warrants consisting of 1,000,000 warrants exercisable
at $1.00 per share, 6,000,000 stock options exercisable at $0.40 per share, and
1,500,000 stock options exercisable at the lowest average daily trading price of
the company's common stock within the first 90 days of the executive's
employment.

On March 21, 2001, Mr. Pazian filed a complaint for breach of contract
and specific performance in the Superior Court of the State of California,
County of Los Angeles seeking $1,260,000 in cash, as well as one million company
warrants (at a basis of $0.40) and six million vested stock options (at a strike
price of $0.40) (Stephen Pazian v. eConnect, Inc., Case No. BC 247186.) This
lawsuit has been settled for the amount of $1,000,000.

Employment Agreement - Outside Counsel.

On March 22, 2000, the company consummated an amended and restated
employment agreement with Stanley C. Morris, Esq. to act as outside counsel for
the company. On April 14, 2000, the company terminated this individual and his
firm as outside counsel. Based upon the amended and restated employment
agreement, the remaining compensation for the term of this agreement will be due
immediately upon the termination of this individual and his firm as outside
counsel if terminated for reasons other than good cause. In addition, any common
stock and stock warrants granted through the term of this agreement will be
considered due in the event of termination for reasons other than good cause.
Accordingly, the termination of this individual and his firm, for reasons other
than good cause, may potentially expose the company to incur a liability of
approximately $700,000 for the remaining portion of unpaid compensation for the
first, second and third years of this agreement. Furthermore, the termination
may have accelerated the vesting of the granted common stock and stock warrants
consisting of 600,000 common shares and 600,000 warrants exercisable at $1.00
per share. This dispute has been settled.

Breach of Contract Action.

On September 5, 2000, Geoffrey N. Cornish filed a complaint Superior
Court of the State of California, County of Los Angeles for breach of an oral
contract, money owed, and fraud against the company, Mr. Hughes and Electronic
Transactions & Technologies, alleging that plaintiff and the company entered
into an oral contract whereby plaintiff was to perform marketing and product
development services for the company (Geoffrey N. Cornish v. eConnect, Inc.,
Thomas S. Hughes, and ET&T, Case No. NC028475). Plaintiff claims that he is
owed $128,589.90 plus interest by the company. This action has been settled as
of June 4, 2001 by the signing of a settlement and mutual release by all partied
to the action. Under this settlement, the company, without admitting any
liability or an existence of an obligation to Mr. Cornish, agreed to pay Mr.
Cornish the sum of $40,000 (in payments); the company also agrees to a
stipulated judgment against it in the amount of $53,000, which can be executed
if the company becomes delinquent in any of the payments.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
AND CONTROL PERSONS

The names, ages, and respective positions of the directors, executive
officers, and key employee of the company are set forth below. The directors
named below will serve until the next annual meeting of the company's
stockholders or until their successors are duly elected and have qualified.
Directors are elected for a one-year term at the annual stockholders' meeting.
Officers will hold their positions at the will of the board of directors, absent
any employment agreement, of which none currently exist or are contemplated.
There are no arrangements, agreements or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management of the company's
affairs. There are no other promoters or control persons of the company. There
are legal proceedings involving two of the directors of the company.

Thomas S. Hughes, Chief Executive Officer/Director.

Mr. Hughes, Age 52, has been Chief Executive Officer and a Director of
the company since March 1997. From 1993 to the present, he has also served as
the President of Electronic Transactions & Technologies, a privately held Nevada
corporation which developed terminals for wireless home and internet
applications. Mr Hughes also serves as a director of Kanakaris Communications.
Mr. Hughes devotes his full time to e-Connect. ET&T is presently dormant while
waiting on the full implementation of the Bank Eyes Only system and will then
construct a business service agreement with eConnect as regards the application
of sending cash to email recipients by the usage of the eCashPad and the ATM
card with PIN.

The Company currently has no Chief Financial Officer. Failure of the
company to have a full time CFO could result in delays in financial decisions.
The duties normally performed by such a person are now undertaken as follows.
The financial reporting and accounting functions are initially performed by
Marylou Garcia. Subsequently, data is reviewed by George Brenner, an outsourced
accountant for the Company.

Jack M. Hall, Secretary/Director.

Mr. Hall, age 72, is currently President of Hall Developments, a real
estate development company he founded in 1991, which employs a staff of 10
people. Mr. Hall spends approximately 20 hours per week searching out strategic
alliances for the company. Mr. Hall joined the company as Secretary and a
Director in March 1997.

Laurence B. Donoghue, Director.

Mr. Donoghue, age 55, is an attorney as well as a computer
professional. He was awarded a Juris Doctor degree at George Washington
University in Washington, D.C. in 1971. In December 1997, Mr. Donoghue founded
and incorporated an Internet marketing consulting business call Adweb
Communications. In July 1998, Mr. Donoghue also opened his own practice of law,
founding the Law Offices Of Laurence B. Donoghue. Mr. Donoghue continues to
operate both enterprises. From 1975 to 1998, Mr. Donoghue built a successful
prosecuting career in the Los Angeles County District Attorney's Office as a
Deputy District Attorney. From 1980 to 1998, Mr. Donoghue worked as an Adjunct
Professor at Law at Trinity University School of Law. Mr. Donoghue became a
director in 2000.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial
ownership of shares of the company's common stock as of July 16, 2001
(334,345,775 issued and outstanding) by (i) all stockholders known to the
company to be beneficial owners of more than 5% of the outstanding common stock;
and (ii) all directors, executive officers, and key employees of the company,
individually and as a group:

-------------------------------------------------------------------------------------------
Name and Address of Amount and Nature of
Title of Class Beneficial Owner/(1)/ Beneficial Owner/(2)/ Percent of Class
-------------------------------------------------------------------------------------------

Common Stock Richard Epstein, 12147 68,523,186/(3)/ 20.49%
Northwest 9th Drive, Coral
Springs, FL 33071
-------------------------------------------------------------------------------------------
Common Stock Thomas S. Hughes, 2500 8,700,000/(4)/ 2.60%
Via Cabrillo Marina, Suite
112, San Pedro, CA 90731
-------------------------------------------------------------------------------------------
Common Stock Hughes Net Income 8,522,500/(5)/ 2.55%
Charitable Remainder
Unitrust, c/o Anthony J.
Bayne, Esq., 2500 Via
Cabrillo Marina, Suite 300,
San Pedro, CA 90731
-------------------------------------------------------------------------------------------
Common Stock Jack M. Hall, 2500 Via 200,000/(6)/ 0.06%
Cabrillo Marina, Suite 112,
San Pedro, CA 90731
-------------------------------------------------------------------------------------------
Common Stock Laurence B. Donoghue, 110,000 /(7)/ 0.03%
2500 Via Cabrillo Marina,
Suite 300, San Pedro, CA
90731
-------------------------------------------------------------------------------------------
Common Stock Shares of all directors, 17,532,500 5.24%
executive officers, and
key employees as a group
(3 persons)
-------------------------------------------------------------------------------------------

(1) Except as noted in footnote 4 below, each person has sole voting power
and sole dispositive power as to all of the shares shown as beneficially owned
by him.

(2) Other than as set forth below, none of these security holders has the
right to acquire any amount of common stock within 60 days from options,
warrants, rights, conversion privilege, or similar obligations.

(3) The amount owned by this selling shareholder represents the combined
holdings of Alliance Equities and Richard Epstein, who controls this firm. This
amount includes the following: (a) a warrant for the purchase of 1,400,000
shares of common stock, currently exercisable at $1.00 per share through June
30, 2002; (b) a warrant for the purchase of 2,400,000 shares of common stock,
currently exercisable at $0.40 per share through September 30, 2003; (c) a
warrant for the purchase of 3,000,000 shares of common stock, currently
exercisable at $0.25 per share through September 30, 2003; and (d) a debenture
in the principal amount of $1,653,000, which represent 9,723,529

shares (currently convertible into shares of common stock at $0.17 per share
through April 5, 2002). The remainder of the holdings consists of shares of
common stock.

(4) 8,400,000 of this amount is owned by Electronic Transactions &
Technologies. This ownership is attributed to Mr. Hughes by virtue of his 70%
ownership of ET&T. In addition, 150,000 of this amount is represented by
options issued in December 2000 under the company's stock incentive plan which
are exercisable within 60 days (the total options granted was 600,000). These
options are exercisable at $0.40 per share for those exercised on or before
December 31, 2000; thereafter the exercise price is 25% of the fair market value
of the shares on the date of the exercise. A maximum of 25% of the total options
may be exercised in any one calendar year.

(5) The creator of this trust is Thomas S. Hughes. Thomas S. Hughes is the
trustee of the trust; Lawrence B. Donoghue, Esq. is the special trustee, and as
such has the voting power and power over the disposition of the company's shares
under this trust. In addition, Mr. Hughes is the lifetime net income beneficiary
of this trust, and the remainder beneficiary is Philosopher Kings and Queens, a
California nonprofit public benefit corporation (according to information
provided by Mr. Hughes). According to information provided by Mr. Hughes, this
trust is irrevocable.

(6) 100,000 of this amount is represented by options issued in December 2000
under the company's stock incentive plan which are exercisable within 60 days
(the total options granted was 400,000). These options are exercisable at $0.40
per share for those exercised on or before December 31, 2000; thereafter the
exercise price is 25% of the fair market value of the shares on the date of the
exercise. A maximum of 25% of the total options may be exercised in any one
calendar year.

(7) 100,000 of this amount is represented by options issued in December 2000
under the company's stock incentive plan which are exercisable within 60 days
(the total options granted was 400,000). These options are exercisable at $0.40
per share for those exercised on or before December 31, 2000; thereafter the
exercise price is 25% of the fair market value of the shares on the date of the
exercise. A maximum of 25% of the total options may be exercised in any one
calendar year.

DESCRIPTION OF SECURITIES

General Description.

The securities being offered are shares of common stock. The
authorized capital of the company consists of 500,000,000 shares of common
stock, $0.001 par value per share. The holders of common stock shall:

. have equal ratable rights to dividends from funds legally available
therefore, when, as, and if declared by the board of directors of the
company

. are entitled to share ratably in all of the assets of the company
available for distribution upon winding up of the affairs of the
company

. are entitled to one non-cumulative vote per share on all matters on
which shareholders may vote at all meetings of shareholders.

The shares of common stock do not have any of the following rights:

. special voting rights

. preference as to dividends or interest

. preemptive rights to purchase in new issues of shares

. preference upon liquidation, or

. any other special rights or preferences.

In addition, the shares are not convertible into any other security.
There are no restrictions on dividends under any loan other financing
arrangements or otherwise. The company does not have any preferred stock
authorized in its articles of incorporation.

Non-Cumulative Voting.

The holders of shares of common stock of the company do not have
cumulative voting rights, which means that the holders of more than 50% of such
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected, if they so choose. In such event, the holders of the
remaining shares will not be able to elect any of the company's directors.

Dividends.

The company does not currently intend to pay cash dividends. Because
the company does not intend to make cash distributions, potential shareholders
would need to sell their shares to realize a return on their investment. There
can be no assurances of the projected values of the shares, nor can there be any
guarantees of the success of the company.

A distribution of revenues will be made only when, in the judgment of
the company's board of directors, it is in the best interest of the company's
stockholders to do so. The board of directors will review, among other things,
the financial status of the company and any future cash needs of the company in
making its decision.

Transfer Agent.

The company has engaged the services of Corporate Stock Transfer, 3200
Cherry Creek Drive South, Suite 430, Denver, Colorado 80209, to act as transfer
agent and registrar.

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Limitation of Liability.

The articles of incorporation of the company provide that no Director
or Officer of this company shall be liable to the company or its stockholders
for any breach of fiduciary duty as Officer or Director of this company. This
provision shall not affect liability for acts or omissions which involve
intentional misconduct, fraud, a knowing violation or law, or the payment of
dividends in violation of NRS 78.300.

Indemnification.

* Articles of Incorporation.

The articles of incorporation of the company provide that all expenses
incurred by officers or directors in defending a civil or criminal action, suit,
or proceeding, must be paid by this company as they are incurred in advance of a
final disposition of the action, suit or proceeding, upon receipt of an
undertaking by or on behalf of a director or officer to repay the amount if it
is ultimately determined by a court of competent jurisdiction, that he or she
did not act in good faith, and in the manner he or she reasonably believed to be
or not opposed to the best interests of the company.

* Bylaws.

The bylaws of the company provide the following with respect to
indemnification:

Each indemnitee of the company shall be indemnified and held harmless
by the company for all actions taken by him or her, and for all omissions
(regardless of the date of any such action or omission), to the fullest extent
permitted by Nevada law, against all expense, liability and loss (including,
without limitation, attorney fees, judgments, fines, taxes, penalties, and
amounts paid or to be paid in settlement) reasonably incurred or suffered by the
Indemnitee in connection with any proceeding. Indemnification pursuant to this
section shall continue as to an indemnitee who has ceased to be a director or
officer and shall inure to the benefit of his or her heirs, executors and
administrators. The company may, by action of its board of directors, and to
the extent provided in such action, indemnify employees and other persons as
though they were indemnitees. The rights to indemnification as provided shall
be non-exclusive of any other rights that any person may have or hereafter
acquire under an statute, provision of the company's articles of incorporation
or bylaws, agreement, vote of stockholders or directors, or otherwise.

The company may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the company, or is or was serving at the request
of the company in such capacity for another corporation, partnership, joint
venture, trust or other enterprise for any liability asserted against him or her
and liability and expenses incurred by him or her in such capacity, whether or
not the company has the authority to indemnify him or her against such liability
and expenses.

The other financial arrangements which may be made by the company may
include, but are not limited to, (a) creating a trust fund; (b) establishing a
program of self-insurance; (c) securing its obligation of indemnification by
granting a security interest or other lien on any of the company's assets, and
(d) establishing a letter of credit, guarantee or surety. No financial
arrangement made pursuant to this section may provide protection for a person
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable for intentional misconduct, fraud, or a knowing
violation of law, except with respect to advancing expenses or indemnification
ordered by a court. Any insurance or other financial arrangement made on behalf
of a person pursuant to this section may be provided by the company or any other
person approved by the board of directors, even if all or part of the other
person's stock or other securities is owned by the company. In the absence of
fraud:

. the decision of the board of directors as to the propriety of the
terms and conditions of any insurance or other financial arrangement
made pursuant to this section, and the choice of the person to provide
the insurance or other financial arrangement is conclusive; and

. the insurance or other financial arrangement is not void or voidable;
does not subject any director approving it to personal liability for
his action; and even if a director approving the insurance or other
financial arrangement is a beneficiary of the insurance or other
financial arrangement.

* Nevada Revised Statutes.

. NRS 78.7502 Discretionary and mandatory indemnification of officers,
directors, employees and agents: General provisions.

(1) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.

(2) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon

application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.

(3) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.

. NRS 78.751 Authorization required for discretionary indemnification;
advancement of expenses; limitation on indemnification and advancement
of expenses.

(1) Any discretionary indemnification under NRS 78.7502 unless
-----------
ordered by a court or advanced pursuant to subsection 2, may be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:

(i) By the stockholders;

(ii) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit or
proceeding;

(iii) If a majority vote of a quorum consisting of directors who were
not parties to the action, suit or proceeding so orders, by
independent legal counsel in a written opinion; or

(iv) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal
counsel in a written opinion.

(2) The articles of incorporation, the bylaws or an agreement made
by the corporation may provide that the expenses of officers and directors
incurred in defending a civil or criminal action, suit or proceeding must be
paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by
or on behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation. The provisions of this subsection do not affect
any rights to advancement of expenses to which corporate personnel other than
directors or officers may be entitled under any contract or otherwise by law.

(3) The indemnification and advancement of expenses authorized in
NRS 78.7502 or ordered by a court pursuant to this section:
-----------

(i) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a
court pursuant to or for the advancement of expenses made pursuant to
subsection 2, may not be made to or on behalf of any director or
officer if a final adjudication establishes that his acts or omissions
involved

intentional misconduct, fraud or a knowing violation of the law and
was material to the cause of action.

(ii) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors
and administrators of such a person.

. NRS 78.752 Insurance and other financial arrangements against
liability of directors, officers, employees and agents.

(1) A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in his
capacity as a director, officer, employee or agent, or arising out of his status
as such, whether or not the corporation has the authority to indemnify him
against such liability and expenses.

(2) The other financial arrangements made by the corporation
pursuant to subsection 1 may include the following:

(i) The creation of a trust fund.

(ii) The establishment of a program of self-insurance.

(iii) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.

(iv) The establishment of a letter of credit, guaranty or surety.

No financial arrangement made pursuant to this subsection may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.

(3) Any insurance or other financial arrangement made on behalf of a
person pursuant to this section may be provided by the corporation or any other
person approved by the board of directors, even if all or part of the other
person's stock or other securities is owned by the corporation.

(4) In the absence of fraud:

(i) The decision of the board of directors as to the propriety of
the terms and conditions of any insurance or other financial
arrangement made pursuant to this section and the choice of the person
to provide the insurance or other financial arrangement is conclusive;
and

(ii) The insurance or other financial arrangement:

(A) Is not void or voidable; and

(B) Does not subject any director approving it to personal
liability for his action, even if a director approving the
insurance or other financial arrangement is a beneficiary of the
insurance or other financial arrangement.

(5) A corporation or its subsidiary which provides self-insurance
for itself or for another affiliated corporation pursuant to this section is not
subject to the provisions of Title 57 of NRS."

Undertaking.

The company undertakes the following:

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers and controlling persons of the small business issuer pursuant
to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the U.S. Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.

ORGANIZATION WITHIN LAST FIVE YEARS

The names of the promoters of the company are the officers and
directors as disclosed elsewhere in this Form SB-2. None of the promoters have
received anything of value from the company in such capacity.

DESCRIPTION OF BUSINESS
Business Development

The company was originally organized under the laws of the State of
Missouri on September 1, 1981, as HANDY-TOP, INC. On April 20, 1983, the
Articles of Incorporation were amended to change the name of the corporation to
HTI Corporation. On May 28, 1993, the Articles of Incorporation were amended to
change the name of the corporation to Leggoons, Inc. and increase the number of
authorized shares of common stock from 40,000 to 10,000,000 and decrease the par
value of the common stock from $1.00 per share to $0.01 per share. Also on May
28, 1993, Leggoons, Inc., declared a 14-for-1 stock split.

Leggoons, Inc., was engaged in the design, manufacture and
distribution of apparel and related accessories which are sold to specialty and
department stores nationwide under the brands Leggoons, CPO by Leggoons, John
Lennon Artwork Apparel, and Snooggel. On January 19, 1996, Leggoons, Inc.
adopted a formal plan to discontinue the designing, selling, manufacturing and
distribution of its apparel products. As part of such plan, Leggoons, Inc.,
discontinued production on April 30, 1996, and intended to either sell or
liquidate the operations within twelve months of that date.

On June 12, 1996, Leggoons, Inc., transferred all of its assets and
liabilities to a third party assignee, under an "Assignment for the Benefit of
Creditors" (an assignment is a business liquidation device available as an
alternative to bankruptcy). The third party assignee, a Nebraska corporation,
also named Leggoons, Inc., was required to properly, timely, and orderly dispose
of all remaining assets for the benefit of creditors. Leggoons, Inc. continued
to maintain its status as a shell corporation.

On February 18, 1997, Leggoons, Inc. entered into an Agreement to
License Assets from Home Point of Sales, Inc.(now know as Electronic
Transactions & Technologies) for the purpose of licensing certain technology for
the development of Personal Encrypted Remote Financial Electronic Card
Transactions ("PERFECT"). Electronic Transactions & Technologies is a privately
held corporation 70% owned by Thomas S. Hughes, president of the company. This
technology is designed to enable consumers to instantly pay bills or impulse
purchase from home with real time cash transactions.

Mr. Hughes, Chairman of Electronic Transactions & Technologies, became
chairman and president of Leggoons, Inc. on March 1, 1997. At that time, the
name was changed to Betting, Inc.

On April 28, 1997, the company entered into a Host Processing
Agreement with Electronic Transactions & Technologies for the purpose of having
this firm act as the bank host processing for all Betting, Inc.'s future
transactions that are sent by terminals that read credit cards or ATM cards. On
March 27, 1998, the company entered into a license agreement with Electronic
Transactions & Technologies for the purpose of licensing additional technology
for processing electronic banking transactions. The technology licensed under
this agreement supplements the technology licensed under the agreement dated
February 18, 1997.

On May 17, 1999, an Agreement and Plan of Merger between Betting,
Inc., a Missouri corporation, into Betting, Inc., a Nevada corporation was
executed by an authorized signatory of each company. On May 21, 1999, the
merger of the two companies was approved by a majority of the shareholders.
Effective on June 1, 1999, Articles of Merger were filed with the Nevada
Secretary of State, which formally resulted in the redomicile of the company
from the State of Missouri to the State of Nevada. This also resulted in the
change of the fiscal year end from August 31 to December 31. On June 4, 1999, a
Certificate of Amendment to Articles of Incorporation was filed with the Nevada
Secretary of State changing the name of the company to "eConnect" and increasing
the number of authorized common shares to 100,000,000.

On August 23, 1999, a Certificate of Amendment to Articles of
Incorporation was filed with the Nevada Secretary of State increasing the number
of authorized common shares to 200,000,000. On November 22, 2000, a Certificate
of Amendment of Articles of Incorporation was filed with the Nevada Secretary of
State increasing the number of authorized common shares to 300,000,000. On July
16, 2001, a Certificate of Amendment of Articles of Incorporation was filed with
the Nevada Secretary of State increasing the number of authorized common shares
to 500,000,000.

Business of Company.

The business of the company is to drive (process) PERFECT global
transactions with specific emphasis on ATM card with PIN instant cash
transactions. There are two aspects to the industry of self serviced home or
mobile swiped ATM card with PIN entry or credit card transactions which the
company has named PERFECT (personal encrypted remote financial electronic card
transactions).

The first aspect is the development of the home "Bank Eyes Only"/(TM)/
transactions system whereby a consumer can use a remote terminal from a home
environment or mobile environment, (the eCashPad), to read a credit card or ATM
card with PIN or a smart card which is then sent to a host processor for card
authorization. "Bank Eyes Only" transactions refers to a direct Internet
connection between the consumer's terminal and the company's bank card
authorization system. The web merchant does not store nor has ready access to
the consumer's card data. These "Bank Eyes Only" terminals are remote from the
merchant (protecting the consumer's data) and are wireless or landline or
computer enabled. This should result in greater consumer confidence in
performing such financial transactions.

This system will also enable the consumer or business person to effect
instant cash payments to the recipient. A transaction using the terminal device
with an ATM card with PIN is considered a cash payment. Internet "Bank Eyes
Only" ATM card with PIN payments could substantially affect global commerce,
completely changing the way people around the world do business.

The second aspect of a PERFECT transaction is the public usage of the
company's proprietary hardware placed in public locations for self serviced bill
payments by ATM card with PIN entry.

EConnect has developed the eCashPad as the terminal to make these
transactions and has developed the Merchant Integration Kit and published this
kit at the eConnect web site (www.econnectholdings.com) to enable web merchants
to install the MIK in order to receive PERFECT payments.

Many consumers who do not have credit cards will now be able to use
their eCashPad and effect PERFECT same as cash payments to web merchants who
today are basically limited to being paid by credit and not real time cash.

The ongoing discussions that the Company has had with many businesses
who have a web presence, leads us to believe that the usage of the eCashPad to
send cash donations, wagers, impulse purchases and bill payments will greatly
simplify back room accounting for industries ranging form mortgage to insurance
to home Off Track Betting.

EConnect generates fees per PERFECT payment, usually paid by the
merchant and has also generated limited revenues on the sale of the eCashPad
of $1,500.

Merchants will be charged a 50 cents service fee for credit card
present payments and $1.00 for ATM card with PIN payments. A web merchant today
pays about 2.5% for a non credit card present payment. First Data will offer
about a 2% to 1.9% discount rate which will be charged to web merchants being
paid by an eCashPad payment. This is a savings to the web merchant. The Company
will charge the flat service fee of 50 cents to the web merchant who now has a
reduced chance of charge-backs and is enjoying a lower discount rate for the
purchase. The Company does not have to pay a fee to the credit card networks as
we are not the processor. The company will pay a fee to the ATM card networks as
a direct connect processor. This fee is based on volume of transactions
processed by the Company. We will charge a $1.00 fee and will then pay a sliding
scale portion of this fee depending on volume transactions to the ATM card
network(s). In general, the fees range from $0.02 per transaction up to $0.035
per transaction.

The transaction flow of a Bank Eyes Only credit card swiped
transaction is from the eCashPad, which is making a payment at a web merchant's
site which has installed the Merchant Integration Kit and which enables the
eCashPad to communicate to the web merchants site, and eConnect processing, the
front end processor, which then hands off the transaction to VeriSign, which as
a Gateway, then hands off the transaction to First Data, who is the back end
processor of the transaction, and who then hands off to the acquirer bank.

These eCashPad originated transactions will be regarded as credit card
present and the bank acquirer will then charge the web merchant a lower discount
fee than what is presently charged to the merchant when they are being paid by a
standard non credit card present payment.

Web merchants will pay eConnect a flat fee of 50 cents to provide the
Bank Eyes Only service plus they will pay the lower discount rate to the
acquirer bank. Adding in the chances of reduced fraud and charge backs plus the
lower discount rate, the overall cost of a Bank Eyes Only payment is an
efficient payment for the merchant.

Two key incentives for the Internet merchants are:

1. A lower Discount Rate charged to them by VISA/MasterCard for
receipt of card present (swiped) credit cards rather then card not present
credit card transactions.

2. The ability to be paid by an ATM card with PIN or debit card with
PIN same as cash Internet payment.

The key incentives for the consumer are:

1. A far safer credit card transaction as the financial data is being
sent directly to the bank system and is not seen nor stored at the web merchants
site and can therefore not be stolen by hackers.

2. Merchant Incentives to pay by cash.

3. Speed, ease and convenience of eCashPad terminal originated
electronic payments.

Bank Eyes Only credit card payments can only be accomplished by a
terminal that reads the magnetic strip of the credit card and ATM card and PIN
payments, or cash to the web merchant can be accomplished with a terminal that
reads the magnetic strip of the ATM card or debit card.

The eCashPad is a full service terminal that has been developed and is
being sold by eConnect for home and office usage to effect PERFECT payments. The
PocketPay is a mobile wireless eCashPad that can also double as a phone and has
not yet been developed.

The eCashPad is now in operation and has been used to effect product
purchases over the internet by card present credit card transactions. Efforts
are underway to expand its usage to complete bill payments as the service of ATM
card with PIN same as cash payments becomes available.

EConnect is now capable of PIN translation which means that we can
receive a PIN from the eCashPad at our Bank Eyes Only service system and then
hand off the PIN to an ATM card network for card authorization. We are currently
in talks with ATM service networks and are confident that the eCashPad ATM card
with PIN service of same as cash PERFECT payments to web merchants will soon be
operational. To date, however, no written agreements have been reached with such
networks.

EConnect has generated initial revenues from the sale of eCashPad but
has not generated transactional revenues on the usage of the eCashPad as we are
now building the web merchant Bank Eyes Only base that the eCashPad can be used
at. Generation of transactional revenues will form the core of the company's
business in the future, and this is a highly competitive area.

Full merchant sales are now beginning as we now a complete and
attractive PERFECT product Bank Eyes Only service to sell to the web merchants.

Today, bankcard authorized transactions, that are terminal driven, are
initiated by consumers, "face to face" with merchants. The company's "Bank Eyes
Only" transaction enables the consumer to perform the transaction safely from a
remote location. These PERFECT transactions are originated by the consumer.
The transaction is encrypted before being sent. The merchant does not originate
the transaction by swiping the bank card; the consumer swipes the bank card with
no merchant present. The consumer is "remote" from the merchant.

At the present time, eConnect is the only company providing a hardware
and software support solution to effect PERFECT transactions over the Internet.
We are providing web merchants with an additional payment methodology which is
credit card present and which includes ATM card with PIN and smart card
transactions, all of which require a terminal such as the eCashPad in order to
originate PERFECT payments to Internet merchants.

The goal of eConnect is to certify and drive any competitive terminal
to the eCashPad as we are focused on transaction revenue generation and not
eCashPad sales generation. We have structured the Bank Eyes Only system as an
open architecture service, which can be adapted and used by many industries for
their specific needs.

The eConnect PERFECT Bank Eyes Only system consists of the Merchant
Integration Kit, the eCashPad and the participation of acquiring banks.
Acquiring banks are being sought to offer Discount Rates for eCashPad originated
credit card payments that are lower than those for non-card-present
transactions.

PERFECT describes the Industry of Personal Encrypted Remote Financial
Electronic Card Technologies. EConnect has developed the system of what we call
Bank Eyes Only, which consists of a terminal, the eCashPad, and the eConnect
support system for merchants, the Merchant integration Kit.

Bank Eyes Only supports PERFECT transactions which are originated from
home or office Internet consumers who are using their eCashPad to make card
swiped transactions over the Internet which are Personal and are Encrypted and
are not in front of the merchant, (they are remote from the merchant), and they
consist of Financial Electronically used Cards.

Any hardware device that reads a bankcard or a smart card and is
directly connected to a web merchant's web site by the Merchant Integration Kit
is effecting a Bank Eyes Only transaction within the PERFECT industry.

EConnect will generate revenues from the core business of PERFECT
Transactions, and of course, the sales of the eCashPad to consumers and
resellers. We will also be generating licensing fees for the usage and support
of the EConnect Bank Eyes Only system in other countries and the specific usage
of the eCashPad for PIN entered debit same as cash payment to develop business
applications such as cash email payments, micro payments by smart card, and
usage of the eCashPad to effect home purchases of electronic lottery tickets.

The business model of eConnect is to bring the Bank Eyes Only solution
to business entrepreneurs who will then develop business applications and
eConnect will generate ongoing transaction fees from such businesses and
revenues from the purchase of the eCashPad by these business entrepreneurs as
they develop their own business PERFECT implementations.

The function of the eCashPad is to effect card swiped Internet
payments by ATM card with PIN debit, which is the same as cash payments, card
present credit card payments and smart card payments. The eCashPad is a full
service Point Of Sale terminal developed by eConnect for home usage with the
Internet as the medium of the transaction between the consumer and the merchant.

Of the existing supply of 1,200 eCashPads, over 400 have been sold and
in many cases given away to enthusiastic users to try from their home. The
scheduled shipment of 10,000 eCashPads will be distributed through companies
such as Hitachi and GemPlus for home smart card usage, Youbet for home Off Track
Betting usage by PIN entered ATM card/debit cards, VeriSign for implementation
by their merchant base, and by a series of cooperative promotional campaigns by
eConnect and other companies who have it to their own self interest to be paid
by a eCashPad originated PERFECT Bank Eyes Only transaction. The company
currently has a letter of intent with Youbet and is in the process of
constructing a strategic agreement with Hitachi and GenPlus.

The core business of eConnect is to drive PERFECT transactions on a
global basis and these transactions are expected to be originated from both
eConnect hardware such as the eCashPad and the PocketPay and from competitor's
hardware. The vision of eConnect is a global network of interlocked eConnect
Bank Eyes Only systems that transact PERFECT payments between countries with a
focus on same as cash PERFECT payments by smart card and ATM card with PIN. The
goal of eConnect is to have the same host systems in China, Ireland and other
countries as we have in the United States, which are accepting and authorizing
incoming PERFECT payments.

Applications of the PERFECT industry focus specific attention of the
usage of ATM card with PIN entry to effect "just in time" bill, tax, mortgage,
or premium payments from home, to "reserve your seat" for entertainment
purposes. The company has developed a proprietary hardware device, the eCashPad
to conduct such transactions.

The company's goal is to develop network global host processing
centers. These centers will drive and be compatible with all types of hardware
made by many different competitors. The company spent $3,490,000 on Research and
Development in 1999, and $4,800,000 on Research and Development in 2000.

The company has spent substantial capital in cash and stock during the
last two fiscal years developing the system for the implementation of the
PERFECT industry in general and for the specific application of Internet "Bank
Eyes Only" transactions in particular.

The company has contracted exclusive licenses from ET&T, which is
controlled by Mr. Hughes, for global usage of Patent No. 5,336,870 issued August
8, 1994, Patent No. 5,754,655, issued May 19, 1998, and Patent No. 5,809,143,
issued September 15, 1998. The terms of this license include payment by the
company to ET&T of 10% of each transaction fee, or 10 cents, whichever is
larger in perpetuity and the contractual right to exercise control.

These three patents broadly cover the implementation of what the
company is now calling "Bank Eyes Only" transactions. Patent No. 5,336,870 has
developed into the EzyDepot unit.

The EzyDepot unit was deployed as a self service terminal for self
service EzyShop at public locations. The company is now focused on using the
eCashPad for placement with PC's at public locations such as coffee shops
whereby the consumer can use the eCashPad to safely shop by Bank Eyes Only at
specific Bank Only web sites.

The EzyDepot unit will be adapted and used as a self service bill pay
terminal at public locations abroad and will be driven by eConnect full service
host centers. The EzyDepot is basically a terminal for usage at public locations
and behind the counter walk in locations. It has been eclipsed by the eCashPad
which will be used to sell the EzyShop service whereby the consumer at a coffee
shop can shop with the eCashPad at web merchants who are Bank Eyes Only. The
EzyDepot was origionally designed for this but was not Internet driven. The
EzyDepot terminal was designed to enable consumers sitting at a public location
to swipe their credit card while purchasing items from a catalog provided by
eConnect. The terminal was attached to a phone line and had no Internet
connection. The EzyDepot could still be used as a behind the counter terminal in
Latin American Countries for a business such as buying groceries and would not
be initiating Internet usage but would be a simple Point Of Sale device. The
company will not be using the EzyDepot for any United States business. The
eCashPad is Internet driven and has superceded the EzyDepot. EConnect may still
use the EzyDepot in Latin American walk in retail locations.

Patent No. 5,809,143 has developed into what the company is calling
the eCashPad, and the specific focus is for Internet "Bank Eyes Only" usage.
This device connects directly to a personal computer and runs on the Windows
operating system.

The company is projecting a fourth quarter distribution of eCashPads
into the market and the initial generation of revenues from both eCashPad sales
and the transactions generated from usage of the eCashPad at web merchant sites.

Patent No. 5,754,655 covers is in the process of development as a hand
held wireless voice capable phone and terminal for sale and distribution into
the PERFECT industry, with specific focus for "Bank Eyes Only" Internet ATM card
with PIN entry transactions. This

product is called the ePocketPay and is in the development stage with a
potential prototype targeted for the third quarter.

The "Bank Eyes Only" system once fully implemented will consist of the
eCashPad sending Internet originated transactions into the bank system for
authorization. At no time is any bankcard data stored with the Internet
merchant, and this simple action effects a highly secure consumer Internet
transaction. National Data Funding Corporation will be providing the company
with operations support for the company's host systems under an agreement with
the company in April 2000.

The eCashPad has been developed by Asia Pacific Micro, Inc, under a
manufacturing agreement entered into in January 2000. Over 1,200 eCashPad units
have initially been produced.

The eCashPad simply and easily attaches to the consumer's computer
keyboard and enables the consumer to affect Internet "Bank Eyes Only"
transactions, from the consumer's home or office. The company will receive a fee
from the merchant per transaction. The eCashPad will also be distributed with
private labels, through direct sales and promotions.

Companies participating in the private label eCashPads will enjoy the
benefit of receiving a portion of the company's transaction fee for transactions
made to them in addition to those made to other merchants. For example, an
insurance company using the eCashPad will generate cash payments by ATM card
with PIN entry for its premium payments. In addition, it can generate additional
revenues from the same eCashPad as it is used to pay a phone bill, to make a
charitable donation, to purchase a product, or to pay a tax bill. The company
will receive a fee per transaction as paid by the web merchant.

The company is presently developing a full service host system in the
Dominican Republic and is presently completing the certification process with
Banco Nacional de Credito, and is planning to follow with additional host
centers for eConnect Ireland, eConnect China and eConnect Austrialia. A non-
binding letter of intent has recently been signed by Huaxia Bank of Shanghai
China to implement the eCashPad solution with specific emphasis on ATM card with
PIN on line debit.

Within the countries of China, Ireland, Australia, and the Dominican
Republic, the company recognizes that the eCashPad within those countries will
naturally evolve into ATM card with PIN cash games, and the company intends to
provide services for such PERFECT games. One projected game will be the
"International", which will be the equivalent of a same day instant cash game
between the countries of Australia, China, Ireland and the Dominican Republic
whereby the eCashPad is used with ATM card and PIN entry and processed by the
company's host systems.

The specific goal of the company is to establish global "Bank Eyes
Only" full service Host processing centers which will not only drive the
company's hardware but will also certify and drive other types of hardware
devices effecting both conventional and PERFECT

transactions. The company is currently using eFunds CONNEX software to provide
the company Host support system outside of the United States.

The long term strategic goal of company is to position its global host
systems to offer "Bank Eyes Only" processing services for both competitors'
terminal solutions and for the company's terminal solutions. This places the
company in the position of being a HUB for its own transactions and competitor's
transactions. There will also be a particular emphasis on Internet cash payments
between countries by the usage of eCashPad or ePocketPay type of devices and ATM
card with PIN entry. This enables the company to handle Business to Business
transactions and Country to Country transactions.

Revenue generation from "Bank Eyes Only" transactions is expected to
begin in the third quarter as eCashPads are distributed into the marketplace.
Within the United States market, the company is closely working with NDFC to
secure the go ahead for regional ATM card networks for an eCashPad ATM card with
PIN entry "Bank Eyes Only" internet payment. The company is targeting the third
and fourth quarters to begin pilots with Regional ATM card networks as regards
the ATM card with PIN entry aspect of the eCashPad.

The company expects the industry of "Bank Eyes Only" Internet
transactions to develop substantially by the fourth quarter and anticipates
numerous "Bank Eyes Only" product devices to be introduced by various companies.
It is the intention of the company to provide support services for such hardware
devices and to gain a service fee from the processing of "Bank Eyes Only"
transactions. The company encourages the introduction of different types of
"Bank Eyes Only" devices. Many different companies and industries Ranging from
Insurance to Cable to Mortgage to Gaming to Entertainment to Collections to
Charity to Bill Payments, have it to their own self interest to promote and
expand the usage of PERFECT hardware to effect cash payments over the Internet
by ATM card and smart card. Additionally, banks have it to their own self
interest to promote the usage of hardware to generate card swiped credit card
payments as these types of transactions will greatly reduce Internet fraud, and
they have it to their own self interest to promote the usage of the ATM card and
debit card with PIN to make cash payments and to reduce the usage of check
handling and processing. Add this all together and we feel that the industry of
PERFECT as represented by the eConnect Bank Eyes Only solution will develop
substantially.

The company anticipates a strong effort by competitors to seize the
"Bank Eyes Only" space on an Internet merchant site but points out that all
competitors will need to co operatively work together as regards web merchant
signups. The company anticipates a co-operative competition environment with
competitors as regards the establishment of respected PERFECT payment solutions
at a merchants web site as no merchant will exclusively offer only one solution.

In summary, the company intends to build host systems in such
countries as the Dominican Republic, China, Australia and Ireland, plus
numerous other countries, whereby the company's host system is driving many
different types of hardware devices as developed by many companies to meet the
demand of the PERFECT industry. The company will generate a fee per transaction
from the driving of each hardware device which is sending in PERFECT ATM card
and PIN entry, credit card and smart cardpayments.

The company intends to monitor the performance of the Top Sports
walk-in locations in the Dominican Republic in 2001 to determine if revenues do
not justify expenditures. The company has removed itself from the Internet
casino business other than to provide support transactions services.

The company has recently signed a letter of intent to divest eConnect
Caribbean. S.A. from the company. To date, negotiations are continuing towards
the signing of a definitive agreement. The Company has 14 full time
employees.

Acquisitions by Company.

(a) Rogel Technologies.

According to an agreement dated May 6, 1999, the company acquired all
of the assets of Rogel Technologies, a sole proprietorship. These assets
consisted of the following:

. Proposed secure e-mail service

. Perfect Merchant Response Software (MRS)

. Global Market Place Mall (GMM) (the GMM includes these products: GMM
Classified Adds, GMM Web hosting services, eTrusts, eHomebuy, eDine,
eTheater, Portable Website Software, PCA Compression Software, and
Virtual Card Game Software)

. The consulting services of Rogel Patawaran for the purpose of creating
and writing new software products for the company.

The company agreed to make the following payments under this agreement:

. 2,750,000 free trading shares

. 2,500,000 restricted shares of common stock

.
Options to purchase 500,000 shares of common stock at an exercise
price of $0.50 per share, which options expire on June 30, 2000

. Options to purchase 500,000 shares of common stock at an exercise
price of $1.00, which options expire on June 30, 2001

. Options to purchase 250,000 shares of common stock at an exercise
price $2.00 per share, which options expire on June 30, 2002

. $200,000 per year management fee payable from the gross revenues of
RT

. 12.5% of the remaining net profits of Rogel Technologies as an
administration fee

A total of 2,500,000 restricted shares of common stock and 2,500,000
free trading shares of common stock have been issued date under this agreement
(no options as set forth in the agreement have been issued to date).

Under an agreement dated October 23, 1999, the company agreed to pay
Rogel Technologies an additional $168,000 for services related to MRS software
and the SafeTPay system server, and to provide additional consulting services
for an hourly fee. Under an agreement dated November 23, 1999, the parties
agreed that in consideration of said sum the MRS and SafeTPay software will
remain under the ownership and full control of Rogel Technologies; however, the
company would have the right to utilize this software and provide instruction in
its use.

Based on the main focus of this agreement being the consulting
services of Mr. Patawaran in research and development activities of the company,
the shares issued under this agreement are being accounted for as research and
development costs in the financial statements of the company. The company has
not as yet made any determination regarding further development of the other
items set forth in the agreement.

(b) Isla Escondida, S.A.

La Empressa Ranco Plasticos Limitada, a Costa Rica corporation
("Holder"), was the owner of record of 58.33% of the issued and outstanding
stock of Isla Escondida, S.A., a Costa Rica Corporation ("IE") ("Stock").
Pursuant to an agreement between Holder, Jamie Ligator and Michael Lanes, one-
half (1/2) of the Stock was actually being held in the name of Holder for the
benefit of Lanes and the other one-half (1/2) of the Stock was actually being
held in the name of Holder for the benefit of Ligator. Effective on August 31,
1999, the company purchased the Stock under a Stock Exchange Agreement.

Under this agreement the company paid the following amounts for the
Stock: 7,000,000 shares of free trading common stock of the company, to be
deposited into an escrow account. These share were all released by December 31,
1999 under the provisions of an accompanying escrow agreement. Subsequent to
this agreement, the company acquired, for 5,000,000 free trading shares, the
remaining 41.67% of the stock of IE directly from the shareholders of that
company in a stock swap (an additional 5,200,000 restricted shares of common
stock previously issued in connection with this transaction are still in need of
cancellation). In addition to the above amounts paid, the company paid an
additional 1,510,000 shares of free trading common stock in connection with
closing this transaction.

During 2000, the company cancelled 10,500,000 shares of the company's
common stock related to this acquisition in fiscal year 1999. The company
renegotiated the terms of this acquisition primarily due to lack of performance
of the assets purchased.

This asset has generated no revenues for the company since its
acquisition. Due to various problems with the operation in Costa Rica, the
website was closed shortly after the acquisition by the company and no revenues
or profits were realized from this operation. As a result, this entire
investment was completely written-off as of December 31, 2000.

Effective on September 9, 1999, the company acquired the website known
as

"theArtAuction.com" from PowerClick, Inc., a Nevada corporation, through an
Agreement and Plan of Acquisition Agreement. Under this agreement, company paid
the following: (a) 1,000,000 shares of free trading common stock of the company;
and (b) 1,000,000 shares of restricted common stock of the company. In
addition, the company paid an additional 165,000 shares of restricted common
stock in connection with closing this transaction.

Although this website did briefly generate revenues in September 1999
totaling approximately $40,000, the website was closed down in November 1999 for
reconstruction and has not as yet reopened. The company has been upgrading
theArtAuction.com into artaste.com, which began operations in the fourth quarter
of 2000. However, the value of this asset has been written-off as of December
31, 2000.

(d) Top Sports S.A.

(1) Initial Purchase Agreements.

By a Contract of Partnership dated November 20, 1999, the company
acquired a 50% interest in Top Sports S.A., a Dominican Republic corporation.
The company has also entered into a Business Cooperation Agreement with Top
Sports S.A., dated December 9, 1999, to carry forward the terms of the
partnership between the two companies under local Dominican Republic law. Top
Sports operates various sports book betting establishments in the Dominican
Republic, where casino and related types of gaming are legal.

Under these agreements, the company is to be the beneficiary of 50% of
all the assets, benefits and gains, and shall share in 50% of all the
liabilities, losses or obligations. The company paid the following:

. U.S. $35,000; and

. 1,000,000 of restricted common stock of the company.

The company also agreed to issue warrants to purchase 2,000,000 shares
of common stock of the company, exercisable during the 12 months following the
execution hereof for the fixed price of $0.30 per share (subsequently adjusted
to $0.40 per share). These warrants were issued in 1999; Mr. Egan exercised
500,000 of these warrants in 2000 (the remained expired prior to the end of
2000).

(2) Subsequent Purchase Agreement.

On January 1, 2000, the company entered into a Shares Sale Contract to
acquire the remaining approximately 50% interest of Top Sports from Paul Egan.
Under the terms of the agreement, the company is to pay Mr. Egan:

. 1,000,000 unrestricted free-trading shares of the company;

. 1,000,000 restricted shares of the company; and

. 1,000,000 warrants at a fixed price of $1.00 per share. By subsequent
oral agreement of the parties, the above agreements were amended as
follows:

. The compensation under the agreements for the purchase of the initial
50% of Top Sports was increased by 1,000,000 free trading shares of
the company's common stock;

. The compensation under the agreement for the purchase of the remaining
99.94% of Top Sports was increased by 1,000,000 restricted shares of
the company's common stock; and

. The 200,000 shares paid under the Funding Agreement, as set forth
below, was credited to the 1,000,000 free trading shares now due under
the first agreements.

In addition, during fiscal year 2000 the company cancelled 1,000,000
shares of its common stock related to the fiscal year 1999 acquisition of Top
Sports. The cancellation was a result of the renegotiated terms of the
acquisition agreement which called for the cancellation of the original shares
issued in 1999 and for the issuance of additional shares as discussed above.

Effective on April 1, 2000; the company acquired 4,994 shares of the
remaining 5,000 capital shares outstanding. Of the 10,000 shares outstanding,
the company owns 9,994 shares (Dominican Republic Law, where Top Sports, S.A. is
incorporated, requires that there be seven stockholders in a company).

(3) Consultancy Agreement.

Under a consultancy agreement, dated January 1, 2000, the company
agreed to retain Mr. Egan as a consultant for Top Sports to run the day to day
operations of this firm and perform other tasks in connection with the
acquisition. Under this agreement, subsequently amended as discussed in Item 4
below, Mr. Egan was to be paid the following (none of which was issued):

. 1,800,000 free trading S-8 shares of the company;

. 2,000,000 restricted class 144 shares of the company;

. A warrant for the purchase of 1,500,000 shares of the company,
exercisable at $0.40 per share; and

. A warrant for the purchase of 1,000,000 shares of the company,
exercisable at $1.00 per share.

(4) July 20, 2000 Agreement.

Under an Agreement dated July 20, 2000 (with an effective date of
April 1, 2000), the company and Top Sports agreed that all prior compensation
paid under the acquisition agreements shall remain with Mr. Egan, but that no
further compensation is to be paid under any

agreements. Therefore, no compensation was due under the January 1, 2000
Consultancy Agreement or the Funding Agreement.

The parties also agreed, among other things, to the following:

. The company is to establish "eConnect Caribbean, S.A." as a
Dominican Republic subsidiary.

. Mr. Egan is to be employed as the President of eConnect Caribbean,
S.A. for a term of three years.

. Mr. Egan is to receive 25% of the common stock of eConnect
Caribbean, S.A.

. Mr. Egan agrees to resign from the Board of Directors, or other
similar governing body, of Top Sports.

In January 2001, the company issued a total of 3,000,000 restricted
shares of common stock to satisfy the total obligation of restricted shares
under the acquisition agreements. Therefore, as of the present Mr. Egan is owed
the following with respect to these agreements: the issuance of a warrant for
the purchase of 1,000,000 shares of common stock at $1.00 per share.

EConnect now has no business connection with Top Sports. The Dominican
Republic corporation called eConnect Caribb is presently on hiatus until
eConnect has successfully launched the United States Bank Eyes Only service and
begun sales of the production model eCashPad USB. The Letter of Intent to divest
eConnect Caribb from eConnect no longer applies and is void.

The only support for gaming services which will be provided by
eConnect will happen when the eCashPad USB has begun to be used by United States
consumers to effect home originated regulated State Lottery ticket purchases
with an eCashPad and an ATM card with PIN swipe. We have no idea as to when this
will happen but can certainly state that the first step is to have the United
States consumers owning a home terminal such as the eCashPad that will begin to
effect ATM card with PIN payments for charity, bills, rent, mortgages and other
types of cash initiated purchases.

When a State Lottery has begun to accept home originated ATM card with
PIN or smart card cash purchases, then eConnect will provide the front end
processing services of such transactions.

It is the Company's intention to discontinue the operations of Top
Sports. While it was originally the Company's intention to utilize Top Sports
to launch its global gaming operation, adverse changes in market conditions
required the Company to refocus its resources and energies into the continued
development of its core business, which is financial transaction processing.

(f) PowerClick, Inc.

On February 9, 2000, the company acquired 50% of the outstanding
capital stock of PowerClick, Inc., a Nevada corporation, in consideration of
$1,200,000 cash and 8,000,000 shares of the company's common stock valued at
$1,300,000 for an aggregate 50% investment of $2,500,000, which is principally
comprised of goodwill. PowerClick, Inc. owns and operates a website that
provides a wide range of products and services to the public, and is intended to
be used as a vehicle to promote the use of the "Bank Eyes Only" system.

On October 21, 2000, the company and PowerClick agreed to a settlement
of the actions between the parties and a mutual release (which is in the process
of being implemented), as follows: The company agreed to purchase an additional
30% of PowerClick (giving a total ownership to the company of 80%) in exchange
for:

. conversion of the 6,000,000 restricted shares of company's common
stock currently held by PowerClick into freely trading shares of the
company;

. the issuance to PowerClick of warrants for the purchase of 4,000,000
shares of freely trading common stock of the company (exercisable at
$1.00 per share until October 21, 2003;

. capping the cash portion of the original acquisition as $750,000;
and

. decreasing the value of the transaction to $2,050,000.

The company has made the determination not to acquire the additional
30% of PowerClick. Therefore, the company cancelled the warrants for the
4,000,000 shares of common stock; the remaining portions of the settlement have
already been completed. The stock of PowerClick evidencing the 50% interest has
been issued to the company. Subsequently, in the second quarter of 2001, the
Company has written off its entire investment in Powerclick.

(g) National Data Funding Corporation.

On May 22, 2000, the company entered into a non-binding letter of
intent with National Data Funding Corporation to acquire 100% of this company's
common stock and later spin it off in a publicly trading company and retaining a
25% ownership. National Data Funding Corporation is a company that will provide
eCashPad distribution, encryption, and maintenance. National Data Funding
Corporation will also provide full merchant processing for all credit and debit
cards in support of eFunds-United States.

In connection with the letter of intent, the company has deposited
(non-refundable) $250,000. The letter of intent requires the company to pay the
stockholders of National Data Funding Corporation $10,000,000 and 10,000,000
restricted shares of the company's common stock in exchange for 100% ownership,
and contribute to National Data Funding Corporation $1,000,000 and 1,000,000
shares of the company's common stock for working capital. The Letter of Intent,
dated June 2, 2000, originally expired on September 1, 2000 but was extended by
oral agreement of the parties to a closing date of October 31, 2000.

On October 29, 2000, the company entered into an Agreement for Sale
and Plan of Reorganization ("NDFC Agreement") requiring the company to pay the
stockholders of NDFC $10,000,000 shares of the company's common stock in
exchange for 50% ownership, and contribute to NDFC $1,000,000 and 1,000,000
shares of the company's common stock for working capital. Pursuant to the NDFC
Agreement, the company is required to make a bona fide and good faith effort to
spin off NDFC as a publicly traded company in which the company will retain
approximately a 28% ownership. The company was required to complete the terms of
the NDFC Agreement on October 31, 2000 ("Closing Date"). The company did not
complete the NDFC Agreement on the Closing Date. Certain provisions within the
NDFC Agreement provided for an extension through January 2, 2001, however the
company did not complete the terms of the NDFC Agreement within the extension
date.

Other Material Contracts.

(a) First Entertainment Holding Corp.

On April 29, 1999, the company entered into a Joint Venture Agreement
with First Entertainment Holding Corp. for the purpose of using the allowing
customers to use their ATM cards to make purchases from a number of websites
owned by that firm at

www.firstentertainment.com. These companies originally intended to move forward
with this project once the eCashPad is available for distribution; however, it
now appears that this company is no longer in operation.

(b) International Investor Relations Group.

The company entered into a Consulting Agreement with International
Investor Relations Group, Inc. ("IRG"), dated September 24, 1999. Under the
terms of this agreement, this firm provided certain services for the company, as
follows: (a) 10 road shows; (b) 1 Media Placement in Stock/Card deck reaching
250,000 + investors; (c) 2 News releases, includes broadcast fax to all
interested parties; (d) one research report 6-8 page full color; and (e) a
broker card - 2 sided, full color.

Under this agreement, the company paid the following amounts for the
services of IRG:

. $85,000.00

. 167,000 free trading shares based on a .21 cent per share price

. 300,000 purchase warrants, as follows: 100,000 $0.50 per share,
100,000 at $0.75 per share, and 100,000 at $1.00 per share. These have
a 2-year expiration date from the original date of signing the
agreement.

On October 21, 1999, the company entered into an agreement with
Kanakaris Communications for the purpose of developing Internet Cash Programming
("ICP"), a service to be offered by Kanakaris and the company which will enable
the consumer to purchase internet video streaming programming by Same-as-Cash
(ATM card and PIN), or by Enhanced Credit Card (the payment by credit card that
is read by the ePIN or like devices). Under this agreement, Kanakaris
Communications will provide the delivery to the internet consumer of video
streaming programming from either Kanakaris Communications own inventory base or
shall act as a distributor of video streaming programming from other
entertainment providers.

Under the terms of this agreement, ICP will be established as a
separate Nevada corporation and will authorize 1,000,000 shares of stock;
Kanakaris Communications will receive 400,000 shares of stock and eConnect
shall receive 400,000 shares of stock, and 200,000 shares of stock shall remain
in the ICP treasury. Kanakaris Communications will retain the managing control
of ICP and shall appoint officers to manage ICP. All profits of ICP shall be
equally split between eConnect and Kanakaris Communications.

The company will receive exclusive global rights to drive or process
all originating ICP transactions whether transacted by an ePIN or by a
competitive hardware devices that are effecting either a Same-as-Cash or
Enhanced Credit Card programming purchase. In addition, the company will charge
ICP a flat fee per ICP processed transaction. Further development of this
project is awaiting the delivery of the eCashPad, as previously discussed. The
company paid

a total of 3,000,000 shares of free trading common stock for the research and
development to be done under this agreement. To date, the ICP has not been
implemented.

(d) REAL Solutions.

The company has entered into a letter of intent with Real Solutions,
Ltd. on March 9, 2000 to provide the IBM hardware support in connection with the
eFunds agreements. On April 13, 2000, the company entered into a formal Master
Services Agreement with Real Solutions in connection with this matter. Under
this agreement, the company will pay Real Solutions based on a Statement of Work
to be developed between the parties.

(e) Peters Entertainment.com, Inc.

On April 14, 2000, the company entered into an agreement with Peters
Entertainment.com, Inc., an independent motion picture production affiliate of
Time Warner Inc. Under this agreement, there will be a 50/50 revenue-sharing
arrangement to develop an on-line media portal that would combine a consumer
entertainment environment with e-services designed to meet the needs of
production studios. The company will be acting as a consultant to Peters
Entertainment under this agreement. To date, there has been no revenue
generated under this agreement.

(f) Broadband Video, Inc.

On October 4, 2000, the company entered into an agreement with
Broadband Video, Inc. for that firm to sell all of its assets to the company.
These assets consist of all right, title and interest of Broadband Video in and
to Zoom-TV software technology. The consideration for this purchase is
10,000,000 restricted shares of common stock of the company and a warrant to
purchase 3,000,000 shares of company common stock for $1.00 per share, from the
date of the agreement until 5:00 p.m. December 31, 2001.

After conducting a due diligence review, the company did not complete,
and does not intend to complete, this transaction and has agreed to issue
3,600,000 shares of common stock as a cancellation fee The company has issued
such shares related to this fee on May 24, 2001 and has reflected the expense
amounting to $361,152 in the consolidated statement of operations for period
ending June 30, 2001.

Contracts Made in the Ordinary Course of Business.

(a) Sunset Marketing Group.

On November 15, 2000, the company entered into an agreement under
which Sunset Marketing Group will market the company's eCashPad to the
insurance, mortgage and other financial industries. Sunset has agreed to provide
to the company ten "Bank Eyes Only" web merchants each month, following the
first three months of the contract. Sunset Mortgage LP, parent company of Sunset
Marketing, becomes the company's first mortgage-industry merchant. Sunset
Marketing also expects to announce one insurance and one financial-industry
"Bank Eyes Only" merchant within the third quarter of 2001.

(b) SBN.com, Inc.

On December 7, 2000, the company entered into two agreements with
SBN.COM, a market affliate-independent contractor agreement and a charter
industry company agreement. SBN's online yellow pages, one of the world's
largest, contains 1.5 million pages and more than 50 million business listings
worldwide. Within the US, this includes the listings of every phone book in
every area code in all 50 states, every business-to-business listing, and the
entire database for toll-free numbers, as well as every Yellow Pages protocol
worldwide. Published in both English and Spanish, the online yellow pages are
accessible from the websites of several hundred internet service providers and
other Internet hosts accounting for in excess of 3 million subscribers, and at
more than 850 affiliate e-commerce sites.

These agreement will allow for the marketing of the company's "Bank
Eyes Only" as a secure online payment system to existing and future clients.
These agreements also call for SBN.COM's online yellow pages to be directly
accessible from the company's website, via the Walking Fingers Mouse/TM/ icon.
Under the agreements, the company and SBN.COM will share revenues from banner
advertising by listees at www.eConnectholdings.com, as well as online yellow
pages advertising sold directly by the company. The company will also share
revenues resulting from new listees who sign up via the company's website.
Online yellow pages listees who wish to accept these "Bank Eyes Only" payments
will require proprietary software; once equipped, however, these merchants will
still be able to make non-"Bank Eyes Only" transactions with customers who do
not yet own an eCashPad.

On January 8, 2001, the company entered into a definitive agreement
for a strategic partnership TransCast International, Inc., a San Jose,
California TV-based provider of co-branded portals and Internet access services.
TransCast is presently working to integrate its t-commerce portal into analog
televisions for a truly interactive television experience, including web
surfing, t-commerce, chat, and e-mail. TransCast and the company will work
together to integrate the company's eCashPad capabilities with the TransCast TV
portal service.

Under the terms of its strategic partnership with the company,
TransCast will (i) display the company payment symbol and offer eCashPad
transactions on the first page of the TransCast t-commerce portal at
(http://content.transcast.net:8090/XCST/sportal/index.html ); (ii) work with the
company to enable the eCashPad to work in conjunction with both TransCast's set-
top boxes and inside-TV interactive television configurations, and (iii)
introduce the company's eCashPad technology for evaluation as a potential
bundled or integrated peripheral with the TransCast service.

(d) 3Pea Technologies, Inc.

On June 16, 2001, the company entered into a purchase agreement with
3Pea Technologies, Inc. Under this agreement, the company agrees to purchase
from 3Pea 60,000 PAYPADs. The PAYPAD, which is virtually identical to an
eCashPad, is a USB hybrid card reading pad which will include, after full
packaging by 3Pea, the following items: (1) a four-

color printed box; (2) a user instruction manual running approximately seven
pages; (3) a printed compact disk containing the necessary proprietary software
drivers enabling the PAYPAD to communicate with the host computer; and (4)
appropriate designations demonstrating classification approval by relevant
licensing bodies, including the U.S. Federal Communications Commission and the
Underwriters' Laboratory. This Agreement will expire by its own terms six months
from its date of execution.

(e) VeriSign, Inc.

On July 2, 2001, the company signed an agreement with VeriSign, Inc.
to provide gateway services for the company's credit transactions and PIN
entered debit transactions. Under the terms of the agreement, Web merchants
wishing to be paid through an eCashPad card present credit transaction or PIN
entered debit transaction, will first sign on with VeriSign which will then
provide payment gateway services for the company's "card present" originated
transactions.

The Company shares 25% of the web merchant fee of $849 to sign on for Bank Eyes
Only with VeriSign. The acquiror of the web merchant transaction is First Data
who receives the transaction from VeriSign who receives the transaction from the
Company, who receives the transaction from the ecashPad.

The Company is in the process of forming a long term relationship with VeriSign
and First Data. The initial agreement signed with VeriSign began as a standard
reseller of the VeriSign Pay FloPro service non credit card present payments but
is now expanding into the mutual interest of developing Internet credit card
present payments. This is all virgin territory and has never been accomplished
before. The Company is now in discussion to formulate the long term agreement
with VeriSign and First Data.

VeriSign acts as the Gateway for eCashPad credit card present payments and
receives these transactions from eConnect. Behind the Gateway is First Data
which then receives and settles the eCashPad credit card payment. Web merchants
need the VeriSign service to route or gate their eCashPad payments to First
Data. EConnect generates a fee of 50 cents from the merchants for each eCashpad
credit card present payment.

PLAN OF OPERATION

Twelve Month Plan of Operation.

The Company has now completed the full end to end Bank Eyes Only
System which refers to the deployment of working eCashPads affecting card swiped
credit card "present" transactions over the Internet. These transactions are
first received by the eConnect Server System and then routed to VeriSign for
gating into the credit card network for card authorization.

The Company expects to implement the additional service of ATM card
with PIN entry on line debit transactions within the fourth quarter. EConnect
has no agreements with ATM card networks to date. The STAR ATM card network sent
eConnect a proposal to begin a pilot program but to date we have not yet found a
STAR member sponsor bank that can sponsor a web merchant to receive a PIN
entered on line Internet transaction. We are diligently working on this and are
discussions with various financial institutions. Until we have the STAR member
sponsor bank formally sponsoring the web merchants, the proposed pilot will not
start. Investors are cautioned against attributing undue certainty to
management's assessments. The Company posted a Roll Out Schedule at the company
web site http://www.econnectholdings.com. November 1 we will begin to send out
the eCashPad USB to recipients on a 14 day tryout period. At the end of the 14
days, the recipients will either pay us with their eCashPad by simply swiping
their credit card, which is a Bank Eyes Only payment or they will return the
eCashPad in the free envelope provided.

The Company is presently receiving on going daily orders by deployed
eCashPads at the Company eConnect store which is a proof of concept site. The
eCashPad is presently being sold for $59.95.

The company expects to maintain enough cash for its operations and
business plan over the next twelve months. Commitments over that period include
about $3,200,000. That is the sum of manufacturing of eCashPads ($1,500,000),
advertising ($700,000) and about $1,000,000 for operations. The company
currently has 12 full time employees. All recent acquisitions have been wound
down, and no further expenses are expected to occur in connection with any of
these. The company was required to write-off investments in Power Click and Top
Sports that totaled $2,500,000. Nothing that results from these transactions is
expected to have any adverse effect on the business plan of the company or its
core operations.

"Bank Eyes Only" refers to a direct Internet connection between the
consumer's terminal and the company's bank card authorization system by which
the consumer will order an item from an Internet merchant, but the credit card
data or ATM data will go directly to the company's server and then to the bank,
bypassing the merchant. Thus, this service will enable customers to pay for
Internet purchases, bill payments and other types of transactions from home by
physically swiping either credit cards or ATM cards with PIN entry. These "Bank
Eyes Only" transactions can be processed over the Internet without the
cardholder account information being stored at the merchant's web site, nor does
the merchant have ready access to the consumer's bank card information.

The company believes that "Bank Eyes Only" transaction processing
system will effectively address Internet consumers' concerns regarding personal
and financial information security. The company plans to publish the "Bank Eyes
Only" web merchant install download documentation during the third quarter and
is confident that based on present web merchant

responses to adding on the alternative payment solution of "Bank Eyes Only",
that substantial numbers of web merchants will be accessible to payment by an
eCashPad.

The company plans to distribute a substantial number of promotional
eCashPads during the third and fourth quarters. The company has reasonable
expectations that the average eCashPad will transact 2 monthly transactions per
1,000 "Bank Eyes Only" web merchant base. Presently, the eCashPad effects credit
card transactions only. There is no current usage other than at the eConnect
Store web site which we do not regard as more than demo transactions and not
production level eCashPad USB transactions. No other web merchant is active with
the eCashPad but we are working hard on activating multiple web merchants to
receive eCashPad payments before the release of the 14 day try out campaign.

Interviews with consumers to whom we sent the demo eCashpad model to
gives us reasonable confidence that the eCashPad USB will be used on a frequent
basis to effect Bank Eyes Only payments, but until we actually begin multiple
transactions with the eCashPad USB, we have no concrete information as to what
will actually happen. Investors should be cautioned that managements assessments
may prove to be invalid.

In the fourth quarter, the company is confident that ATM card with PIN
regional pilots with the eCashPad will begin which will enable the company to
offer instant electronic cash payments by debit POS to web merchants. The
company also has reason to believe that a substantial number of additional web
merchants will become accessible to the service of ATM card with PIN immediate
payments. Industries such as mortgage, insurance, telecommunications,
collections, charity, entertainment, finance and others will begin to place
upward pressure on their client base to pay by ATM card with PIN entry cash
transactions. This will add more "Bank Eyes Only" accessible web merchants and
will increase the monthly usage of the eCashPad.

Registration of "Bank Eyes Only" web merchants will be pursued by a
team of specialists to be hired who understand their specific industry such as
phone or cable or collections and who will fully develop the pertinent "Bank
Eyes Only" applications for that industry and who will develop strategic
alliances within their specific industry. In addition, the company has
structured a networking approach for mass market consumer participation in
finding "Bank Eyes Only" merchants along with sales teams to sign on local web
merchants. Using a revenue sharing plan from the flat fee, the company will
incentivize private labels of eCashPads with expected advertising and marketing
of these private label eCashPads by the vendors to their consumer base. The
company is projecting an average transaction revenue of 50 cents per usage which
is charged to the web merchant.

The company is presently selling the eCashPad for $59.95 and expects
to substantially lower the price in the fourth quarter. The company estimates a
web merchant base of 10,000 merchants to be developed over the fourth quarter.
VeriSign, which provides a Gateway service for web merchants who are being paid
by standard Internet non credit card present payments, sees it in their own self
interest to add on the service of Bank Eyes Only payments for their web merchant
clients to offer to their customers. Together, eConnect and VeriSign have been
developing the credit card present payment option for web merchants to add to
their site, and VeriSign has been working with eConnect in that regard on a
daily basis. We do not have any formal agreement with VeriSign to jointly
develop the Internet credit card present payment market place. The company
estimates that the average eCashPad will generate 10 to 20 transactions monthly.

The company also plans to activate the EzyShop service in the fourth
quarter in which the eCashPad will be placed in public walk-in locations such as
national chains of high traffic coffee shops. Working with a strategic partner
who will provide the monitor and PC to enable Internet access, the company is
confident that consumers will use the eCashPad to shop at "Bank Eyes Only" web
merchant sites.

It is the plan of the company to establish a full service host center
by the fourth quarter of 2001 that certifies and processes other types of
competitive hardware. The company will generate fees from these hardware
vendors to process incoming transactions. Outside of the United States, the
company intends to develop full service host centers. The host center will
generate a $1.00 fee for ATM card with PIN eCashPad payments and 50 cents for
credit card present payments and will also generate fees from driving other
types of hardware made by other companies which hardware does not as yet exist.
Driving a transaction for PIN entered debit and credit card present transactions
and being a host center are basically the same thing.

It is the intention of the company to establish the following full
service company host centers, eConnect Ireland, eConnect China, eConnect
Australia, eConnect Mexico and eConnect Brazil. Using the Internet as the
medium, these full service centers will enable consumers using an eCashPad to
affect country to country "Bank Eyes Only" transactions.

The company envisions the usage of the eCashPad to affect Internet
cash wagers by either ATM card with PIN or by chip card payments. Global
Internet Cash Games will be a service of the company which will provide support
services for Internet companies offering games of skill and games of chance
whereby players are using their eCashPad with ATM card and PIN entry to effect
on line cash transactions. One projected gaming service will be the
"International", which will be a four country real time "Bank Eyes Only" with
ATM card and PIN entry game between the countries of the Dominican Republic,
Ireland, Australia, and China, whereby consumers within those countries will be
able to use the eCashPad to effect same day gaming with ATM card and PIN entry.

Artaste.com, a business unit of the company will be able to accept
"Bank Eyes Only" transactions in the third quarter. In the Gallery, juried
exhibitions of nationally recognized artists who bring their own following will
begin. Special exhibits from collectors will also be presented. To this date,
artaste.com has served as a vehicle to offer the eCashPad for sale and to
generate a growing list of registered members that can be contacted for both
eCashPad sales and the install of "Bank Eyes Only" at their web site. It is the
plan of the company to use 10% discounts for purchases from artaste.com as an
incentive for consumers to buy an eCashPad.

Top Sports was a business unit of the company, which we closed in the
second quarter of 2001. The company will not incur any more expenses as a result
of closing down Top Sports.

Forward Looking Statements.

This prospectus contains "forward looking statements" within the
meaning of Rule 175 under the Securities Act of 1933, as amended, and Rule 3b-6
under the Securities Act of 1934, as amended, including statements regarding,
among other items, the company's business strategies, continued growth in the
company's markets, projections, and anticipated trends in the company's business
and the industry in which it operates. The words "believe," "expect,"
"anticipate," "intends," "forecast," "project," and similar expressions identify
forward-looking statements. These forward-looking statements are based largely
on the company's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the company's control. The company
cautions that these statements are further qualified by important factors that
could cause actual results to differ materially from those in the forward
looking statements, including, among others, the following: reduced or lack of
increase in demand for the company's products, competitive pricing pressures,
changes in the market price of ingredients used in the company's products and
the level of expenses incurred in the company's operations. In light of these
risks and uncertainties, there can be no assurance that the forward-looking
information contained herein will in fact transpire or prove to be accurate.
The company disclaims any intent or obligation to update "forward looking
statements."

DESCRIPTION OF PROPERTY

The company owns approximately $400,000 of miscellaneous office
furniture and equipment, including computers. In San Pedro, the company leases
a total of 8,777 square feet of office space, with leases expiring on various
dates between September 30, 2001 and April 30, 2003. In the Dominican Republic,
the company leases 9,000 square feet of office space on a lease expiring in
August 2005. The lease agreements call for an annual base rent of

approximately $146,000 with a variable escalation rate. As of December 31, 2000,
total rent expense for the leased facility approximated $95,000.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the past two fiscal years, certain transactions which occurred
between the company and its officers, directors and five percent or greater
shareholders are set forth below. With respect to each such transaction, the
company believes that the terms of each transaction were approximately as
favorable to the company as could have been obtained from an unrelated third
party:

(a) On February 18, 1997, Leggoons, Inc. entered into an agreement to
license assets from Home Point of Sales, Inc. (now known as Electronic
Transactions & Technologies). ET&T ("ET&T) is a privately held corporation 70%
owned by Mr. Hughes, President of the company, which is focused on the emergence
of the personal encrypted remote financial electronic card transactions industry
(although this agreement was entered into prior to Mr. Hughes becoming
affiliated with the company, it is included here since certain of the conditions
under that agreement have not been completely fulfilled, as discussed below).
This technology will provide consumers with the option to instantly pay bills or
impulse purchase from home with real time cash transactions with the usage of
simple equipment such as the eCashPad.

The assets included under this license agreement are the following:

. The name "Betting, Inc.", as trademarked by ET&T

. The Wagering Gate (receive incoming data transfer commands from the
host center and other competitive host centers who have received ATM
and SMART card wagering payment from off site home or office locations
and then who command the Wagering GATE to alert the recipient gaming
companies that they have been paid and to respond back with an
acknowledgement of such payment; and, the general promotion and
education of home ATM and SMART card wagering over the Internet
through the ET&T secure computer keyboard or over the telephone
through the ET&T stand alone Infinity unit)

. The specific application of wagering with an ATM card or SMART card
with the secure computer keyboard (any other uses of the Secure
Computer Keyboard, such as Bill Pay or Impulse Purchase that are not
wagering transactions, are not included)

. The ET&T developed merchant response software for the specific
application only of transacting off site ATM and Smart card wagering
through the Wagering Gate

. ET&T's interest in the use of and revenue from the personal
encrypted remote financial electronic card transaction relating to the
wagering business.

Under terms of this license agreement, the company is to issue
2,900,000 shares of restricted common stock to as the total consideration in
exchange for licensing home ATM card

and SMART card wagering technology developed by ET&T. Of this amount, 2,755,000
shares were placed in escrow subject to cancellation on February 10, 1998, in
the event the bid price of the common stock of the company is not at least $3.00
per share for any twenty consecutive day period as reported on the NASD's
Electronic Bulletin Board or NASDAQ's Small Cap Market from the date of the
agreement through February 10, 1998.

As of the date of this prospectus, the terms of the license agreement
have not been met by the company. However, under an amendment dated September
1, 1999 the cancellation date of the shares, as set forth above, has been
extended to September 1, 2001, subject to certain conditions specified in the
amendment.

The license agreement also provides that in the event that the bid
price for the common stock of the company is more than $3.00 per share for any
twenty consecutive day period, then ET&T shall have the option to purchase up to
13,822,000 additional shares of the company common stock at an exercise price of
$.30 per share. To date, the conditions of this provision have not been met.

Under the terms of this license agreement, it was the intention of the
parties hereto that if and when any additional shares of the common stock of
Leggoons (now the company) are issued to the public or any employees, ownership
interest in the company shall be and remain no less than 60% and that ownership
interest of the current shareholders of Leggoons (James Clinton) shall, at that
time, be no less than 10%. ET&T has never sought to enforce this provision in
this license agreement. However, between June 9, 1999 and February 2, 2000,
the company has issued a total of 2,950,000 shares to James Clinton or his
nominees based on the stated reason that compliance with said 10% provision in
such license agreement was required. Shares issued under said provision of this
license agreement were not issued for consideration and therefore may not have
been properly issued in compliance with Missouri Revised Statutes 351.160 (which
governed the company prior to its redomicile to the State of Nevada on June 1,
1999) and Nevada Revised Statutes 78.211.

(b) On April 28, 1997, the company entered into a host processing
agreement with ET&T for the purpose of having this firm act as the bank host
processing for all company transactions that are sent by terminals that read
credit cards or ATM cards. ET&T is to charge the company a fee of $0.25 per
transaction or 2.5% of the wager being sent by the company to gaming operators.
These transactions are to originate from globally placed company equipment
and/or company licensed operators.

(c) On March 27, 1998, the company entered into a license agreement
with ET&T for the purpose of licensing additional technology for processing
electronic banking transactions. This agreement states that ET&T licenses the
following products to the company for the exclusive global usage of wagering by
PERFECT originated ATM cards, credit cards, and smart cards:

. The PayMaster, defined as a stand alone terminal that attaches to
phone lines and which calls the ET&T host processing center with bank
data.

. The SLICK, defined as a stand alone keyboard terminal that attaches
to phone lines and call the ET&T host processing center with bank data
that has bypassed the Internet.

. The PocketPay, defined as a pocket sized terminal and telephone that
sends bank data by wireless transmission to the ET&T host processing
center.

. The TV Pin Pad Remote, defined as a set top box and TV remote that
sends bank data by landline dial up transmission to the ET&T host
processing center.

Each ET&T product is exclusively licensed to the company on a global
basis for the application of PERFECT wagering at a licensing fee of $2,000,000
each. The duration of the exclusive license is 20 years. The licensing fee is
to be paid by the company at the rate of $30,000 per month; however, under the
terms of this license agreement, this fee is not due and payable until the
technology for a particular product covered by the license has been perfected
and is ready for public use. As of the date of this prospectus, only the
PayMaster has been perfected. This liability was satisfied in full in June 1999
through the issuance of common stock (as reflected in the Form 10-QSB for the
quarter ended June 30, 1999). None of the other products covered by the license
agreement had been perfected, and, therefore, no licensing fee is required to be
paid at this time (when this does occur, a statement to that effect will be
placed in a future report filed by the company).

(d) The company, ET&T and Mr. Hughes entered into a promissory note,
dated December 1, 1999, to reflect the principal sum of $2,836,411 owed by the
latter two to the company for various sums paid by the company to ET&T. As of
December 31, 2000, this amount had increased to a total of $4,835,718 due to the
following:

. Interest on the principal amount of $193,886;

. Additional stock issued to ET&T by the company in the amount of
3,000,000 shares ($843,900); and

. A loan in the amount of $961,521 made by the company to ET&T.

The total amount due has been fully reserved as an allowance for doubtful
accounts and expensed as bad debt. This amount relates to a combination of
approximately 21% cash and 79% common stock issuance to Thomas S. Hughes and
ET&T during fiscal year 1999 and 2000.

(e) On August 22, 2000, the company granted to Richard Epstein in
repayment of previous sums loaned to the company in 2000 (totaling $1,336,366),
as follows: (1) a warrant covering the purchase of 3,000,000 shares of common
stock, exercisable at $0.25 from September 30, 2000 through September 30, 2003;
(2) a warrant covering the purchase of 2,400,000 shares of common stock,
exercisable at $0.40 per share from September 30, 2000 through September 30,
2003; and (3) a warrant covering the purchase of 2,000,000 shares of common
stock, exercisable at 50% below the closing bid price on the date of exercise
from August 22, 2000 through December 31, 2001. All these warrants have been
issued, and to date, the warrant to purchase 2,000,000 shares at 50% below the
closing bid price has been exercised.

In payment of the amount of $1,336,366, and a further amount of
$316,634 loaned to the company in the first quarter of 2001, the company (in
addition to the issuance of the warrants) issued a debenture in the principal
amount of $1,653,000 (convertible at any time from issuance until April 5, 2002
into shares of common stock at $0.17 per share). Due to a decline in the market
price of the shares of the Company, this agreement has been renegotiated. A
total of 20 million shares will be issued to Epstein in full payment of the
money owed by the Company pursuant to the debentures.

(f) In January of 2000, the company entered into a Consulting Services
Agreement with Mr. Epstein. Mr. Epstein has agreed to assist the company in
developing a market for the usage of the eCash Pad for a period of three years
in exchange for 15,000,000 shares of the company's common stock. The amount
recorded as consulting expense totaled $983,475 for the year ended December 31,
2000. In January 2001, the company issued Mr. Epstein 15,000,000 shares of
common stock in satisfaction of this agreement.

(g) In February 2000, the company entered into another Consulting
Services Agreement with Mr. Epstein. Mr. Epstein agreed to provide consulting
services related to future mergers and acquisitions in behalf of the company for
a period of 2 years in exchange for 300,000 shares of the company's common stock
monthly. The company recorded consulting expenses of $3,996,630 for the year
ended December 31, 2000. During fiscal year 2000, the company issued a total of
1,050,000 shares of its common stock in advance of such services having been
rendered. Accordingly, the company has recorded a prepaid consulting services
of $1,271,655 related to such advance issuances.

(h) During 1999 and 2000, the company entered into several other
consulting agreements with Mr. Epstein or Alliance Equities, Inc., a company
controlled by him. Mr. Epstein and Alliance Equities were paid a total of
8,914,000 shares of common stock under these agreements during 2000.

(i) In September 1999, the company entered into a Regulation D Common
Stock Private Equity Line Subscription Agreement ("Subscription Agreement") with
Alpha Venture Capital, Inc. ("Alpha"). The Subscription Agreement entitles the
company to draw funds up to $5,000,000 from issuance of its common stock for an
amount equal to 80% of the market value at the time of each draw request,
expiring September 2000, subject to certain terms and conditions. The
Subscription Agreement required the company to deliver an aggregate of 1,000,000
five year warrants to purchase its common stock at an exercise price equal to
80% of the closing bid price on the execution of this agreement as a commitment
fee. Furthermore, the company is required to deliver to Alpha up to a maximum
of 500,000 warrants on a pro rata basis in conjunction with the draw request,
exercisable at the closing bid price at the date of each draw request.

In October 2000, the company was granted a one year extension on its
Subscription Agreement with one automatic six month extension and an overall
increase in funds it may draw by an additional $5,000,000. Pursuant to the
October 2000 extension, the company is required to deliver an aggregate of
2,000,000 five year warrants to purchase its common stock at an exercise price
equal to 80% of the closing bid price on the execution of this extension.
Furthermore, the

company is required to deliver to Alpha up to a maximum of 1,571,428 warrants on
a pro rata basis in conjunction with the draw request, exercisable at the
closing bid price at the date of each draw request. The company is assessed a
placement fee, as provided within the Subscription Agreement, for funds drawn,
which is equal to 8% of each draw. As of December 31, 2000, the company has
drawn $7,773,000 of the available $10,000,000. During fiscal year 2000, Alpha
exercised approximately 3,050,000 warrants of the total 5,071,000 granted
related to the Subscription Agreement.

(j) In December 2000, the company entered into an additional
Regulation D Common Stock Private Equity Line Subscription Agreement
("Subscription Agreement No. 2") with Alpha. The Subscription Agreement No. 2
entitles the company to draw funds up to $15,000,000 from issuance of its common
stock for an amount equal to 82% of the market value for the five business days
immediately following the draw request date, expiring December 2001 with one
automatic twelve month extension if at least 20% of the subscription amount is
drawn during the first six months as of the agreement date, subject to certain
terms and conditions. The Subscription Agreement No. 2 requires the company to
file a registration statement on Form SB-2 with the Securities and Exchange
Commission for the registration of common stock for future issuance related to
the Subscription Agreement No. 2. The Subscription Agreement No. 2 also requires
the company to deliver an aggregate of 2,000,000 five year warrants to purchase
its common stock at an exercise price equal to the lesser of 40% of the closing
bid price of the company's common stock at the agreement date or 40% of the
average five day closing bid price as of the date of the effectiveness the
Registration Statement. Furthermore, the company is required to deliver to Alpha
up to a maximum of 1,000,000 warrants on a pro rata basis in conjunction with
the draw request, exercisable at the closing bid price at the date of each draw
request. The company is assessed a placement fee, as provided within the
Subscription Agreement, for funds drawn, which is equal to 8% of each draw. As
of December 31, 2000, the company has not drawn upon the Subscription Agreement
No. 2. Furthermore, no warrants were exercised of the total 3,000,000 warrants
granted related to the Subscription Agreement No. 2.

(k) On March 5, 2001, the company entered into a Line of Credit
agreement with Alliance Equities, Inc. Under this agreement, the company may
access up to an amount that mutually agreed upon with a maximum of $400,000 per
month at the rate of 12% per year APR. The maximum funding to be provided under
this agreement is $7,000,000 from the date of signing through December 31,2002.
At any time during this period, the company may deliver to Alliance an Advance
Notice. Alliance can choose to be repaid either in cash or restricted shares of
common stock of the company. As of July 16, 2001, the company has taken draws
under this agreement totaling $1,250,000.

(l) On June 16, 2001, the company entered into a purchase agreement
with 3Pea Technologies, Inc., a company controlled by Mark Newcomer, the son-in-
law of Thomas Hughes, president of the company. Under this agreement, the
company agrees to purchase from 3Pea 60,000 PAYPADs. The PAYPAD, which is
virtually identical to an eCashPad, is a USB hybrid card reading pad which will
include, after full packaging by 3Pea, the following items: (1) a four-color
printed box; (2) a user instruction manual running approximately seven pages;
(3) a printed compact disk containing the necessary proprietary software drivers
enabling the PAYPAD to communicate with the host computer; and (4) appropriate
designations

demonstrating classification approval by relevant licensing bodies, including
the U.S. Federal Communications Commission and the Underwriters' Laboratory.
This Agreement will expire by its own terms six months from its date of
execution.

(m) On July 18, 2001, the company entered into a common stock purchase
agreement with Alpha Venture Capital, Inc.. Under this agreement, the company
is able to draw funds, and the investor in turn purchases shares of common stock
from the company. The company may exercise a put by the delivery of a put
purchase notice to the investor. The number of shares that the investor will
receive under each put will be determined by dividing the amount specified in
the put purchase notice by the purchase price determined during the valuation
period; provided, however, that the put purchase notice will be cancelled and
the put will not be exercised if the market price is below the floor price,
which is $0.02 per share. The "purchase price" under this agreement is 85% of
the market price on the put date; the "valuation period" is the period of ten
trading days commencing on the put date during which the purchase price of the
common stock is determined. The amount for each put as designated by the
Company in the applicable put purchase notices shall be not more than the
maximum put amount, which is the lesser of

. $200,000; or

. 15% of the average daily trading volume (the dollar amount of the
average daily trading volume of shares of common stock, calculated
based upon the average bid price and average daily trading volume
traded over the 10 trading days during the valuation period, not
including trading days when the lowest intra-day bid price is lower
than the floor price.

or, in combination with all the other puts exercised under the agreement, not
more than the commitment amount (which is $20,000,000).

MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.

Market Information.

The company's common stock is currently traded in the Over-the-Counter
Bulletin Board, under the symbol "ECNC". On March 13, 2000, the Securities and
Exchange Commission ordered a ten trading day suspension in the trading of the
company's common stock on the Over the Counter Bulletin Board. This trading
suspension was taken in connection with an investigation of the company by the
SEC. The company's common stock resumed trading on March 27, 2000; however,
from that date through October 31, 2000, the company's common stock traded on
the Pink Sheets LLC (symbol "ECNC") since the company's common stock was
delisted on that date from this exchange due to the trading suspension.

In August, 2000, a market maker, on behalf of the company, filed with
the NASD Stock Market, Inc. an application for the company's common stock to be
relisted on the Over the Counter Bulletin Board. Together with that application
was a packet of information required by Rule 15c2-11 promulgated under the
Securities and Exchange Act of 1934. That rule specifies that certain
information and documents must be in the records of a broker or dealer before
such

person may publish any quotation for the company's common stock. The packet sent
to the NASD contains all such information and related documents.

Under NASD Rule 6530, an NASD member (i.e. the market maker) is
permitted to quote a domestic equity security that is not listed on NASDAQ or a
registered national securities exchange in the United States, by an issuer that
is required to file reports (e.g. quarterly and annual reports on Forms 10Q-SB
and 10K-SB, and periodic reports on Form 8-K) pursuant to Section 13 or 15(d) of
the Act, and if the issuer is current in those reporting obligations (subject to
a thirty calendar day grace period). The company met these requirements, and,
upon completion of the application with the NASD, the company's common stock was
accepted for quotation on the Over the Counter Bulletin Board; it commenced
trading on that exchange on November 1, 2000. The company's common stock is
classified as a penny stock pursuant to Rule 3a51-1 of the 1934 Act. As such,
transactions involving the shares are subject to the Penny Stock rules
promulgated under this Act this may result in certain limitations on the ability
to trade the shares. Further, the additional restrictions placed on broker -
dealers by these rules may inhibit trading activity.

The range of closing prices shown below is as reported by these
markets. The quotations shown reflect inter-dealer prices, without retail mark-
up, mark-down or commission and may not necessarily represent actual
transactions.

Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ending December 31, 2001

High Low

Quarter Ended June 30, 2001 0.15 0.06
Quarter Ended March 31, 2000 0.40 0.06

Per Share Common Stock Bid Prices by
Quarter
For the Fiscal Year Ended December 31,
2000

High Low

Quarter Ended December 31, 2000 1.35 0.20
Quarter Ended September 30, 2000 0.69 0.30
Quarter Ended June 30, 2000 1.75 0.37
Quarter Ended March 31, 2000 * 16.50 0.49

* The common stock did not trade from March 13, 2000 through March 24, 2000 due
to the trading suspension ordered by the Securities and Exchange Commission

Per Share Common Stock Bid Prices by Quarter
For the Fiscal Year Ended December 31, 1999

High Low

Quarter Ended December 31, 1999 0.40 0.06
Quarter Ended September 30, 1999 0.41 0.15
Quarter Ended June 30, 1999 0.83 0.38
Quarter Ended March 31, 1999 0.81 0.37

Holders of Common Equity.

As of July 1, 2001, the company had approximately 1,000 shareholders
of record of its common stock.

Dividend Information.

The company has not declared or paid a cash dividend to stockholders
since it was originally organized. The company paid a 5% stock dividend on
September 20, 1999 to shareholders of record as of close of business on
September 14, 1999. The Board of Directors presently intends to retain any
earnings to finance company operations and does not expect to authorize cash
dividends in the foreseeable future. Any payment of cash dividends in the
future will depend upon the company's earnings, capital requirements and other
factors.

EXECUTIVE COMPENSATION

Summary Compensation Table.

---------------------------------------------------------------------------------------------------------
Annual compensation Long-term compensation
------------------------ ------------------------------
Awards Payouts
--------------------- -------
Securities
Other under-
annual Restricted lying All other
Name and compen- stock options/ LTIP compen-
principal Salary Bonus sation award(s) SARs payouts sation
position Year ($) ($) ($) ($) (#) ($) ($)
---------------------------------------------------------------------------------------------------------

Thomas S. Hughes, Chief 2000 255,968 0 0 4,800,000 600,000 0 0
Executive Off. 1999 79,215 0 0 0 0 0 0
1998 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
Jack M. Hall, Secretary 2000 0 0 57,500 56,000 400,000 0 0
1999 0 0 21,000 0 0 0 0
1998 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
Lawrence B. Donoghue, 2000 0 0 0 101,900 400,000 0 0
Director /(1)/
---------------------------------------------------------------------------------------------------------

(1) Mr. Donoghue became a director of the company on May 23, 2000.

Individual Option/SAR Grants In Fiscal Year Ended December 31, 2000.

---------------------------------------------------------------------------------------------------------
Percent of total
Number of options/SARs
securities granted to
underlying employees in
options/SARs fiscal year Exercise of base
Name granted (#) /(1)/ price ($/Sh) Expiration date
---------------------------------------------------------------------------------------------------------

Thomas S. Hughes, 600,000 5.04% 25% of market December 8, 2010
Chief Executive Off. price on date of
exercise

Jack M. Hall, 400,000 3.36% 25% of market December 8, 2010
Secretary price on date of
exercise

Lawrence B. Donoghue, 400,000 3.36% 25% of market December 8, 2010
Director price on date of
exercise
---------------------------------------------------------------------------------------------------------

(1) On November 7, 2000, the company's board of directors approved an Amended
and Restated Stock Incentive Plan (Amendment No. 3); this will allow for stock
options and restricted awards to be made to employees and non-employees of the
company. There have been a total of 11,900,000 options granted in December 2000
under this plan, including for the officers and directors (as set forth above).

Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values.

-------------------------------------------------------------------------------------------------------------------------------
Number of securities Value of
underlying unexercised in-
unexercised the-money
options/SARs at FY- options/SARs at
end (#) FY-end ($)
Shares acquired on Value realized Exercisable/ Exercisable/
Name exercise (#) ($) Unexercisable Unexercisable /(1)/

(a) (b) (c) (d) (e)
-------------------------------------------------------------------------------------------------------------------------------

Thomas S. Hughes, - - 150,000 Exercisable -
Chief Executive Off. 450,000 Unexercisable

Jack M. Hall, - - 100,000 Exercisable -
Secretary 300,000 Unexercisable

Lawrence B. Donoghue, - - 100,000 Exercisable -
Director 300,000 Unexercisable
-------------------------------------------------------------------------------------------------------------------------------

(1) As of fiscal year end (December 31, 2000), none of the unexercised options
were in-the-money.

Other Compensation.

There are no annuity, pension or retirement benefits proposed to be
paid to directors and officers of the company in the event of retirement at
normal retirement date as there is no existing plan provided for or contributed
to by the company. Other than under the Amended and Restated Stock Incentive
Plan (Amendment No. 3) as discussed above, there is no remuneration proposed to
be paid in the future directly or indirectly by the company to any officer or
director.

eCONNECT
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

June 30, 2001
--------------------

ASSETS

Current assets
Accounts receivable $ 2,601
--------------
Total current assets 2,601

Fixed assets, net 254,577

Other assets
Investment in equity-method investee --
Intangible asset, net 275,624
Purchased software, net 1,154,596
Deposit 234,819
Other assets 19,002
--------------
1,684,041
--------------

Total assets $ 1,941,219
==============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable $ 2,655,516
Accrued liabilities 3,206,868
Due to consultants 22,000
Due to related parties 3,608,141
Settlement liabilities 1,605,000
Advance on equity funding line 500,000
Notes payable 1,944,406
--------------
Total current liabilities 13,541,931
--------------

Total liabilities 13,541,931

Commitments and contingencies --

Stockholders' deficit
Common stock; $.001 par value; 500,000,000
shares authorized, 290,955,236 shares
issued and outstanding 290,956
Additional paid-in capital 147,378,721
Due from related party - secured by
Company's common stock --
Common stock issued for prepaid consulting services (2,746,867)
Minority interest in consolidated subsidiary (274,785)
Accumulated deficit (156,248,737)
--------------
Total stockholders' deficit (11,600,712)
--------------

Total liabilities and stockholders' deficit $ 1,941,219
==============

See Accompanying Notes to Consolidated Financial Statements

eCONNECT
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

For the three months ended June 30, For the six months ended June 30,
---------------------------------------- ----------------------------------
2001 2000 (RESTATED) 2001 2000 (RESTATED)
---------------- ------------------- ------------- -------------------

Revenue
Sports books loss $ -- $ -- $ -- $ --
E-Commerce sales 425 -- 1,604 --
---------------- ------------------- ------------- ------------------

Gross loss 425 -- 1,604 --

Operating expenses
Stock based compensation 2,410,142 10,669,447 4,376,193 47,567,417
Consulting 334,356 1,690,535 565,649 2,886,875
Public relations 8,430 112,207 83,160 683,133
Professional fees 223,799 211,093 341,657 337,241
Research and development -- 86,807 54,300 914,073
Wages 533,008 877,277 999,364 877,277
Amortization and depreciation 413,125 561,944 671,468 785,127
General and administrative 291,292 750,537 477,409 2,119,047
---------------- ------------------- ------------- ------------------

Total operating expenses 4,214,152 14,959,847 7,569,200 56,170,190
---------------- ------------------- ------------- ------------------

Net loss from operations (4,213,727) (14,959,847) (7,567,596) (56,170,190)

Other income (expense)
Interest income 18,659 106,535 18,659 193,885
Interest expense (776,823) (232,193) (944,425) (257,112)
Loss on investments (233,770) (73,100) (233,770) (73,100)
Settlement expense (1,739,706) -- (1,739,706) --
Cancellation fee -- -- (526,212) --
Loss on equity method investees -- -- -- (280,366)
Total other income (expense) (2,731,640) (198,758) (3,425,454) (416,693)
---------------- ------------------- ------------- ------------------

Net loss before provision for income taxes (6,945,367) 5,158,605) (10,993,050) (56,586,883)

Provision for income taxes -- -- -- --

Net loss from continuing operations (6,945,367) 15,158,605) (10,993,050) (56,586,883)

Discontinued operations
Loss from operations of gaming operations
to be abandoned from January 1, 2001 to
June 30, 2001 (net of income tax benefit which
is fully allowed for) (160,107) (560,791) (215,086) (560,791)
Estimated loss on disposal of gaming operations
including losses during the phase-out period
(net of income tax benefit which is fully
allowed for) (96,661) -- (96,661) --
---------------- ------------------- ------------- ------------------
(256,768) (560,791) (311,747) (560,791)

Net loss $ (7,202,135) $ (15,719,396) $ (11,304,797) $(57,147,674)
================ =================== ============= ==================
Earning per share
Loss from continuing operations $ (0.026) $ (0.095) $ (0.042) $ (0.387)
Loss from discontinued operations
(0.001) (0.003) (0.001) (0.004)
Loss on abandonment of gaming operations
(0.000) -- (0.000) --
================ =================== ============= ==================
Net loss $ (0.026) $ (0.098) $ (0.043) $ (0.391)
================ =================== ============= ==================
Basic and diluted weighted average
common shares outstanding
272,055,540 160,283,677 260,794,243 146,235,595
================ =================== ============= ==================

Common shares
Common shares Issued for
-------------------------- Additional Prepaid
Number of Paid-in Consulting
Shares Amount Capital Services
-------------------------------------------------------

Balance, December 31, 2000 214,074,197 $ 214,074 $131,758,828 $ (1,271,655)

Common shares issued for prepaid consulting
services 11,800,000 11,800 4,135,130 (4,146,930)

Amortization of prepaid consulting services -- -- -- 2,671,718

Common shares issued in satisfaction of due to related parties 8,000,000 8,000 3,688,243 --

Common shares issued in satisfaction of due to consultants 2,400,000 2,400 2,018,047 --

Common shares issued for cash related to exercise of
warrants 1,262,313 1,262 77,864 --

Common shares issued for cash, weighted average price of $0.109 8,689,150 8,689 515,311 --

Common shares issued for cancellation fee 3,600,000 3,600 522,612 --

Common shares issued in satisfaction of debt related to
exercise of warrants with a strike price of $0.04 2,000,000 2,000 83,000 --

Common shares issued for services related to exercise of
warrants with a strike price of $0.26 74,113 74 19,102 --

Common shares issued in satisfaction of advance
on equity funding line 6,118,975 6,119 1,053,981 --

Common shares issued for receivable from equity funding line 2,501,538 2,502 241,398 --

Common shares issued for expenses 19,676,806 19,677 1,886,827 --

Common shares issued for interest 1,034,615 1,035 108,739 --

Common stock issued in satisfaction of due to related party,
including interest of $369,006 9,723,529 9,724 934,917 --

Warrants granted for interest -- -- 9,275 --

Warrants granted in satisfaction of promissory note payable,
including interest of $265,447 -- -- 325,447 --

Net loss -- -- -- --
------------ ---------- ------------ --------------

Balance, June 30, 2001 290,955,236 $ 290,956 $147,378,721 $ (2,746,867)
============ ========== ============ ==============

Minority
Interest
In Total
Consolidated Accumulated Stockholders'
Subsidiary Deficit Deficit
---------------- ------------------ -------------

Balance, December 31, 2000 $ (92,308) $ (145,126,417) $(14,517,478)

Common shares issued for prepaid consulting
services -- -- --

Amortization of prepaid consulting services -- -- 2,671,718

Common shares issued in satisfaction of due to related parties -- -- 3,696,243

Common shares issued in satisfaction of due to consultants -- -- 2,020,447

Common shares issued for cash related to exercise of
warrants -- -- 79,126

Common shares issued for cash, weighted average price of $0.109 -- -- 524,000

Common shares issued for cancellation fee -- -- 526,212

Common shares issued in satisfaction of debt related to
exercise of warrants with a strike price of $0.04 -- -- 85,000

Common shares issued for services related to exercise of
warrants with a strike price of $0.26 -- -- 19,176

Common shares issued in satisfaction of advance
on equity funding line -- -- 1,060,100

Common shares issued for receivable from equity funding line -- -- 243,900

Common shares issued for expenses -- -- 1,906,504

Common shares issued for interest -- -- 109,774

Common stock issued in satisfaction of due to related party,
including interest of $369,006 -- -- 944,641

Warrants granted for interest -- -- 9,275

Warrants granted in satisfaction of promissory note payable,
including interest of $265,447 -- -- 325,447

Net loss (182,477) (11,122,320) (11,304,797)
---------- -------------- --------------

Balance, June 30, 2001 $(274,785) $(156,248,737) $(11,600,712)
========== ============== ==============

See Accompanying Notes to Consolidated Financial Statements

eCONNECT
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)

For the six months ended June 30,
-------------------------------------------
2001 2000 (RESTATED)
-------------------- ---------------------

Cash flows from operating activities:
Net loss $ (11,304,797) $ (57,147,674)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization and depreciation 671,468 785,127
Stock based compensation 4,376,193 47,567,417
Cancellation fee 526,212 --
Loss on investments 233,770 --
Equity losses on investees -- 280,366
Estimated loss on disposal of gaming operations 96,661 --
Changes in operating assets and liabilities:
Change in stock subscription receivable -- 220,176
Change in due from related party -- (60,525)
Change in due from related party -
secured by Company's common stock -- (1,412,036)
Change in deposits -- (250,000)
Change in accounts receivable 14,157 --
Change in other assets 86,610 (141,721)
Change in accounts payable 543,243 2,007,610
Change in accrued liabilities 173,495 1,414,962
Change in due to related parties 1,465,639 2,635,827
Change in due to consultants 22,000 --
Change in settlement liabilities 1,605,000 --
Change in stockholder loan payable -- 361,818
--------------- ---------------
Net cash used by operating activities (1,490,349) (3,738,653)

Cash flows from investing activities:
Purchase of fixed assets (31,884) (474,310)
Purchase of purchased software -- (2,168,892)
Cost of investments -- (980,797)
--------------- ---------------
Net cash used by investing activities (31,884) (3,623,999)

Cash flows from financing activities:
Proceeds from issuance of notes payable 237,500 --
Principal payments on notes payable (685,000) --
Proceeds from minority interest in consolidated subsidiary -- 15,625
Proceeds from equity funding line 1,353,500 --
Proceeds from issuance of common stock 603,226 7,384,998
--------------- ---------------
Net cash provided by financing activities 1,509,226 7,400,623
--------------- ---------------

Net increase in cash (13,007) 37,971

Cash, beginning of period 13,007 126,172
--------------- ---------------

Cash, end of period $ -- $ 164,143
=============== ===============

Supplemental disclosure of cash flow:
Cash paid for interest $ 107,000 $ --
=============== ===============

Cash paid for taxes $ -- $ --
=============== ================

Schedule of non-cash investing and financing activities:
2,501,538 common shares issued for receivable

See Accompanying Notes to Consolidated Financial Statements

eCONNECT
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)

from equity funding line $ 243,900 $ --
============== =============

11,800,000 common shares issued for prepaid
consulting services $ 4,146,930 $ --
============== =============

8,000,000 common shares issued in satisfaction
of due to related parties $ 3,696,243 $ --
============== =============

2,400,000 common shares issued in satisfaction
of due to consultants $ 2,020,447 $ --
============== =============

2,118,975 common shares issued in satisfaction
of advance on equity funding line $ 206,600 $ --
============== =============

Warrants granted in satisfaction of promissory
note payable, not including interest of $265,447 $ 60,000 $ --
============== =============

Remaining consideration of the second half acquisition of
Top Sports, S.A. recorded as Due to related parties $ -- $ 2,785,868
============== =============

1,000,000 common shares cancelled during renegotiation
of 99.94% of Top Sports, S.A. recorded as portion of
due to related parties $ -- $ (73,100)
============== =============

8,000,000 common shares issued
related to the acquisition of Powerclick, Inc. $ -- $ 1,300,000
============== =============

666,667 common shares issued for
accounts payable $ -- $ 550,000
============== =============

6,000,000 common shares issued for
officer bonus payable $ -- $ 4,800,000
============== =============

495,000 common shares issued for
stock subscription payable $ -- $ 81,546
============== =============

200,000 common shares issued
related to the acquisition of Top Sports, S.A. $ -- $ 47,032
============== =============

See Accompanying Notes to Consolidated Financial Statements

eCONNECT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in
accordance with Securities and Exchange Commission requirements for interim
financial statements. Therefore, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. The financial statements should be read in
conjunction with the Form 10-KSB for the year ended December 31, 2000 of
eConnect ("the Company").

The results of operations for the interim periods shown in this report are
not necessarily indicative of results to be expected for the full year. In
the opinion of management, the information contained herein reflects all
adjustments necessary to make the results of operations for the interim
periods a fair statement of such operation. All such adjustments are of a
normal recurring nature.

New accounting pronouncements - On July 20, 2001, the Financial Accounting
-----------------------------
Standards Board (FASB) issued Statement of Financial Accounting Standards
(SFAS) 141, Business Combinations, and SFAS 142, Goodwill and Intangible
Assets. SFAS 141 is effective for all business combinations completed after
June 30, 2001. SFAS 142 is effective for fiscal years beginning after
December 15, 2001; however, certain provisions of this Statement apply to
goodwill and other intangible assets acquired between July 1, 2001 and the
effective date of SFAS 142. Major provisions of these Statements and their
effective dates for the Company are as follows:

. all business combinations initiated after June 30, 2001 must us the
purchase method of accounting. The pooling of interest method of
accounting is prohibited except for transactions initiated before July
1, 2001.
. intangible assets acquired in a business combination must be recorded
separately from goodwill if they arise from contractual or other legal
rights or are separable from the acquired entity and can be sold,
transferred, licensed, rented or exchanged, either individually or as
part of a related contract, asset or liability.
. goodwill, as well as intangible assets with indefinite lives, acquired
after June 30, 2001, will not be amortized. Effective January 1, 2002,
all previously recognized goodwill and intangible assets with indefinite
lives will no longer be subject to amortization.
. effective January 1, 2002, goodwill and intangible assets with
indefinite lives will be tested for impairment annually and whenever
there is an impairment indicator.
. all acquired goodwill must be assigned to reporting units for purposes
of impairment testing and segment reporting.

Although it is still reviewing the provisions of these Statements,
management's preliminary assessment is that these Statements will not have
a material impact on the Company' financial position or results of
operations.

2. DISCONTINUED OPERATIONS

During June 2001, the Company adopted a formal plan to abandon its gaming
operations. As of June 30, 2001, the Company has completed the closing of
all walk-in sports book located in the Dominican Republic. The assets
abandoned consisted primarily of fixed assets with a net book value of
approximately $26,000 and other assets of approximately $68,000 which has
been recognized as part of the estimated loss on disposal of gaming
operations including the losses during the phase-out period (net of income
tax benefit which is fully allowed for). The Company has liabilities the
gaming operations accrued of approximately $792,000. Operating results of
the gaming operations for the three and six months ended June 30, 2001 and
2000 are shown separately in the accompanying statement of operations.

eCONNECT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

3. CANCELLATION FEE

During October 2000, the Company entered into an agreement to acquire all
the assets of Broadband Video, Inc. in exchange for 10,000,000 shares of
common stock, 3,000,000 warrants to purchase common stock for $1.00 per
share which expire on December 31, 2001. The Company did not complete nor
intends to complete this transaction and has agreed to issue 3,600,000
shares of common stock as a cancellation fee. For the six months ended
June, 2001, the Company has recorded an expense related to this fee
totaling $526,212 which is reflected in the consolidated statements of
operations.

4. STOCK BASED COMPENSATION
------------------------

For the three months ended June 30, 2001 and 2000, the Company incurred
expenses resulting from stock warrants and common stock issued totaling
$2,410,142 and $10,669,447, respectively. For the six months ended June 30,
2001 and 2000, the Company incurred expenses resulting from stock warrants
and common stock issued totaling, $4,376,193 and $47,567,417, respectively.
The following table summarizes the Company's stock based compensation
activities based on the accounts shown on the consolidated statements of
operations:

Three months ended June 30, Six months ended June 30,
--------------------------- -------------------------

2001 2000 2001 2000
---------- ----------- ---------- -----------
Consulting $2,041,136 $ 7,181,359 $3,622,691 $40,246,853
Public relations -- 322,358 -- 2,677,381
Research and development -- 1,220,150 -- 2,389,679
Wages -- 210,938 -- 210,938
Interest 369,006 -- 753,502 --
Financing fees -- 716,139 -- 716,139
Professional fees -- 277,166 -- 277,166
Investor relations -- 741,337 -- 1,049,261
---------- ----------- ---------- -----------

Total stock based
compensation $2,410,142 $10,669,447 $4,376,193 $47,567,417
========== =========== ========== ===========

eCONNECT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

5. SETTLEMENT LIABILITIES

Former President and Chief Operating Officer for the Company - On March 21,
------------------------------------------------------------
2000, the Company consummated an amended employment agreement with an
individual for the position of President and Chief Operating Officer for
the Company. On April 17, 2000, the Company terminated this individual as
President and Chief Operating Officer of the Company. Based upon the
amended employment agreement, the remaining salary for the term of this
agreement, will be due within 30 days upon the termination of this
individual if terminated for reasons other than good cause. In addition,
through the date of termination, all of the granted stock options and
warrants will vest and be exercisable for their entire term. Accordingly,
the termination of this individual, for reasons other than good cause, may
potentially expose the Company to incur a liability of approximately
$1,260,000 for the remaining portion of unpaid salary for the first,
second, third, and fourth years of this agreement. Furthermore, the
termination may have accelerated the vesting of the granted stock options
and warrants consisting of 1,000,000 warrants exercisable at $1.00 per
share, 6,000,000 stock options exercisable at $0.40 per share, and
1,500,000 stock options exercisable at the lowest average daily trading
price of the Company's common stock within the first 90 days of the
executive's employment. On March 21, 2001, the former President and Chief
Operating Officer for the Company filed a complaint for breach of contract
and specific performance.

During June 2001, funds of approximately $186,000 were set aside and
subsequently granted as part of a settlement reached with the former
President and Chief Operating Officer for the Company during July 2001. In
addition, the Company has agreed to pay $120,000 on November 16, 2001 and
14 monthly installments of $50,000 commencing on February 16, 2002 totaling
a settlement liability of $825,000 as of June 30, 2001 and a settlement
expense of approximately $1,006,000.

Goldstake Enterprises, Inc. - On October 13, 2000, the Company borrowed
---------------------------
$200,000 from Goldstake Enterprises, Inc. (hereafter referred to as
"Goldstake") which became due and payable on January 13, 2001. The Company
also had various consulting contracts with Goldstake whereby the Company
agreed to issue shares and pay a percentage of capital raised through
Goldstake's efforts. During May 2001, the Company agreed to pay Goldstake
$625,000 for the loan and various consulting contracts primarily in monthly
installments ranging from $25,000 to $50,000 through October 2002. In
addition the Company will issue 2,000,000 shares of common stock to
Goldstake valued at $180,000 and Goldstake will abate the accrued interest
of $66,000 the Company had recorded. As of June 30, 2001, the settlement
liability related to Goldstake totaled $715,000 and a settlement expense of
approximately $539,000.

Other settlements - As of and for the six months ended the Company has
-----------------
settled and is involved in various legal proceedings. While the results of
these matters cannot be predicted with certainty, the Company's management
believes that losses, if any, resulting from the ultimate resolution of
these matters will not have a material adverse effect on the Company's
consolidated results of operations, cash flows or financial position.
However, unfavorable resolution could affect the consolidated results of
operations or cash flows for the years in which they are resolved.

6. SUBSEQUENT EVENTS

Purchased software - During July 2001, the Company returned the purchased
------------------
software which represents licenses to use the Connex Software System used
in processing e-commerce transactions. The licenses were valued at
approximately $2,169,000 and amortized on a straight-line basis over three
years. The Company is currently negotiating the terms of this transaction.

Richard Epstein and Alliance Equities (company controlled by Richard
--------------------------------------------------------------------
Epstein, a shareholder of the Company) - During June 2001, the Company
--------------------------------------
agreed to issue 20,000,000 shares of the Company's common stock in
satisfaction of all balances due to Richard Epstein and Alliance Equities
(hereafter referred to as "Alliance"). As of June 30, 2001, the balance due
Alliance approximated $1,486,000.

eCONNECT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

7. GOING CONCERN

The Company incurred a net loss of approximately $7,202,000 and $11,305,000
for the three and six months ended June 30, 2001, respectively. The
Company's current liabilities exceed its current assets by approximately
$13,539,000 as of June 30, 2001. These factors create an uncertainty about
the Company's ability to continue as a going concern. The Company's
management has developed a plan to complete the development of technology
products and create their respective markets to generate future revenues.
The Company will also seek additional sources of capital through the
issuance of debt and equity financing, but there can be no assurance that
the Company will be successful in accomplishing its objectives.

The ability of the Company to continue as a going concern is dependent on
additional sources of capital and the success of the Company's plan. The
financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.

L.L. Bradford & Company, LLC
Certified Public Accountants & Consultants
2901 El Camino Avenue, Suite 105
Las Vegas, Nevada 89102
(702) 735-5030 facsimile (702) 735-4854

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
eConnect
San Pedro, California

We have audited the accompanying consolidated balance sheet of eConnect as of
December 31, 2000, and the related consolidated statements of operations,
stockholders' deficit, and cash flows for the years ended December 31, 2000 and
1999. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit. The financial statements
of Top Sports, S.A. and eConnect Caribbean, S.A. (subsidiaries of eConnect) as
of December 31, 2000 and the financial statements of Top Sports, S.A. for the
year ended December 31, 2000, and the financial statements of eConnect
Caribbean, S.A. for the period from July 1, 2000 (Date of Inception) through
December 31, 2000, were audited by other auditors whose reports dated March 16,
2001, expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the December 31, 2000 and 1999 consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of eConnect as of December 31, 2000, and the results of its operations
and cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 18 to
the consolidated financial statements, the Company has suffered losses from
operations, current liabilities exceed current assets and has a net
stockholders' deficiency, all of which raise substantial doubt about its ability
to continue as a going concern. Management's plans in regards to these matters
are also described in Note 18. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

[Intentionally Left Blank]

ORTEGA & ASOCIADOS
Auditores y Consultores

INDEPENDENT AUDITORS' REPORT

To the Board of Administration of
TOP SPORTS, S.A.:

We have audited the accompanying balance sheet of Top Sports, S.A. a development
stage enterprise (a corporation in the Dominican Republic totally owned by
Econnect, Inc.) as of December 31, 2000, and the related statements of loss,
shareholders' equity, and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with generally accepted auditing standards
in the United States of America. 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 audit provides a
reasonable basis of our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Top Sports, S. A. as of
December 31, 2000, and the results of its operations, accumulated deficit,
shareholders' equity and cash flows for the year then ended, in conformity with
generally accepted accounting principles in the United States.

The company is member of a Group of related companies that perform significant
transactions among them. Due to these relations, it is possible that these
transactions were not the same of those that could not result from the
transaction performed among independent entities.

The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 9 and shown in
the accompanying financial statements, the company has suffered losses from
operations fundamentally originated in connection with its operations
development process, also current liabilities exceeds current assets having a
negative working capital of US$581,019, and has a net stockholders' deficiency,
all of which raise substantial doubt about its ability to continue as a going
concern. Management's plans in regards to these matters are also described in
Note 14. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might result from this uncertainty.

/s/ Ortega & Asociados
-----------------------
Ortega & Asociados
March 16, 2001
Santo Domingo, Dominican Republic

Av. Jose Ortega y Gasset #46, Ensanche Naco, Apartado Postal 2289, Santo
Domingo, Rep. Dom.

eCONNECT
CONSOLIDATED BALANCE SHEET
December 31, 2000

ASSETS

Current assets
Cash $ 13,007
Accounts receivable 16,758
-------------
Total current assets 29,765

Fixed assets, net 443,735

Other assets
Investment in equity-method investee 48,040
Intangible assets, net 392,457
Purchased software, net 1,513,101
Deposit 38,820
Other assets 105,612
-------------
2,098,030
-------------
Total assets $ 2,571,530
=============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable $ 2,112,273
Accrued liabilities 3,033,373
Due to consultants 2,020,447
Due to related parties 7,043,409
Advance on equity funding line 206,600
Notes payable - current portion 2,672,906
-------------
Total current liabilities 17,089,008

Total liabilities 17,089,008

Commitments and contingencies --

eCONNECT
CONSOLIDATED BALANCE SHEET
December 31, 2000
(continued)

Stockholders' deficit
Common stock; $.001 par value; 300,000,000
shares authorized, 214,074,197 shares
issued and outstanding 214,074
Additional paid-in capital 131,758,828

Due from related party - secured by
Company's common stock --

Common stock issued for prepaid consulting
Services (1,271,655)
Minority interest in consolidated subsidiaries (92,308)
-------------
Accumulated deficit (145,126,417)
-------------
Total stockholders' deficit (14,517,478)
-------------
Total liabilities and stockholders' deficit $ 2,571,530
=============

See Accompanying Notes to Financial Statements

eCONNECT
CONSOLIDATED STATEMENTS OF OPERATIONS

Year Ended December 31,
---------------------------------------------
2000 1999
-------------- -------------

Revenue
Sports books loss $ (655,584) $ --
E-Commerce sales -- 41,785
-------------- -------------
Gross loss (655,584) 41,785
-------------- -------------

Operating expenses
Stock based compensation 83,441,832 10,886,992
Bad debt 4,952,537 8,000
Sports books 5,880 --
Consulting 4,033,344 7,664,088
Public relations 1,198,411 189,180
Professional fees 743,207 159,085
Research and development 4,620,491 3,490,411
Wages 1,963,574 5,026,165
Amortization and depreciation 1,967,338 207,019
General and administrative 4,227,165 2,324,581
-------------- -------------

Total operating expenses 107,153,779 19,068,529
-------------- -------------

Net loss from operations (107,809,363) (19,068,529)

Other income (expense)
Interest income 9,056 144,471
Interest expense (1,263,012) --
Loss investments (4,527,546) (4,391,120)
Legal settlement (1,451,959) --
Cancellation of common stock 984,375 --
Equity losses on investees (603,438) --
-------------- -------------
Total other income (expense) (7,852,524) (4,246,649)

Net loss before provision for income taxes (114,661,887) (23,315,178)

Provision for income taxes -- --
-------------- -------------

Net loss $ (114,661,887) $ (23,315,178)
============== =============

Basic and diluted loss per common share $ (0.66) $ (0.63)
============== =============

Basic and diluted weighted average
common shares outstanding 174,371,038 36,868,312
============== =============

See Accompanying Notes to Financial Statement

eCONNECT
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

Due From
Related
Common Stock Party -
-------------------------- Secured By
Additional Company's
Number of Paid-in Common
Shares Amount Capital Stock
------------ --------- ------------ -----------

Balance, December 31, 1998 14,475,234 14,475 $ 5,148,837 --

Stockholder loan 9,400,000 9,400 2,827,011 (2,980,882)

Stock subscription payable -- -- -- --

Common shares issued for services 40,710,349 40,711 10,846,281 --

Common shares issued for stock subscription
receivable 716,966 717 219,459 --

Common shares issued for principal
payments on long-term debt 1,589,387 1,589 298,411 --

Common shares issued for cash 16,428,136 16,428 2,804,209 --

Common shares issued for acquisition
of Isla Escondida, S.A. 18,710,000 18,710 3,533,091 --

Common shares issued for acquisition
of www.theArtAuction.com 2,165,000 2,165 961,804 --
---------------------

Common shares issued for joint venture 1,650,000 1,650 323,700 --

Common shares issued to acquire 50%
ownership in Top Sports, S.A. 1,000,000 1,000 72,100 --

Common Stock
---------------------------

Issued for Minority
Prepaid Stock Interest In
Consulting Subscription Consolidated Accumulated Total Stockholders'
Services Payable Subsidiaries Deficit Deficit
----------- ------------ ------------ ------------ -------------------

Balance, December 31, 1998 -- -- -- (6,243,740) (1,080,428)

Stockholder loan -- -- -- -- (144,471)

Stock subscription payable -- 81,546 -- -- 81,546

Common shares issued for services -- -- -- -- 10,886,992

Common shares issued for stock subscription
receivable -- -- -- -- 220,176

Common shares issued for principal
payments on long-term debt -- -- -- -- 300,000

Common shares issued for cash -- -- -- -- 2,820,637

Common shares issued for acquisition
of Isla Escondida, S.A. -- -- -- -- 3,551,801

Common shares issued for acquisition
of www.theArtAuction.com -- -- -- -- 963,969
---------------------

Common shares issued for joint venture -- -- -- -- 325,350

Common shares issued to acquire 50%
ownership in Top Sports, S.A. -- -- -- -- 73,100

eCONNECT
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
(continued)

Due From
Related
Common Stock Party -
--------------------------- Secured By
Additional Company's
Number of Paid-in Common
Shares Amount Capital Stock
----------- ----------- ------------- -----------

Common shares issued for stock dividend 3,756,101 3,756 1,052,460 --

Net loss -- -- -- --
----------- ----------- ------------ -----------

Balance, December 31, 1999 110,601,173 110,601 28,087,363 (2,980,882)

Capital contribution from minority interest
in consolidated subsidiary -- -- -- --

Stockholder loan -- -- -- (1,854,835)

Stock subscription payable 495,000 495 81,051 --

Common shares issued in satisfaction
of officer bonus payable 6,000,000 6,000 4,794,000 --

Stockholder loan reserve as allowance
for doubtful accounts -- -- -- 4,835,717

Common shares issued for cash, $0.40 3,335,762 3,336 1,330,969 --

Common shares issued for cash, $0.16 3,000,000 3,000 497,000 --

Common Stock
---------------------------

Common shares issued for stock dividend -- -- -- (1,056,216) --

Net loss -- -- -- (23,273,393) (23,273,393)
----------- ------------ ------------ ------------ ----------------

Balance, December 31, 1999 -- 81,546 -- (30,573,349) (5,274,721)

Capital contribution from minority interest
in consolidated subsidiary -- -- 16,511 -- 16,511

Stockholder loan -- -- -- -- (1,854,835)

Stock subscription payable -- (81,546) -- -- --

Common shares issued in satisfaction
of officer bonus payable -- -- -- -- 4,800,000

Stockholder loan reserve as allowance
for doubtful accounts -- -- -- -- 4,835,717

Common shares issued for cash, $0.40 -- -- -- -- 1,334,305

Common shares issued for cash, $0.16 -- -- -- -- 500,000

eCONNECT
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
(continued)

Common shares issued for services 65,158,348 65,158 40,789,546 --

Common shares issued for employee based
compensation 570,000 570 1,046,302 --

Common stock issued to satisfy Company
accounts payable 666,667 667 549,333 --

Stock based compensation related to
options and warrants granted -- -- 40,366,861 --

Stock based lawsuit settlement related
to warrants -- -- 1,451,959 --

Common shares issued for services related
to exercise of warrants with a strike
price of $0.40 2,933,488 2,933 1,170,462 --

Prepaid consulting services paid with
common shares 1,050,000 1,050 1,270,605 --

Cancellation of common shares related
to the fiscal year 1999 acquisition
of Isla Escondida, S.A. (10,500,000) (10,500) (973,875) --

Common Stock
---------------------------

Common shares issued for services -- -- -- -- 40,854,704

Common shares issued for employee based
compensation -- -- -- -- 1,046,872

Common stock issued to satisfy Company
accounts payable -- -- -- -- 550,000

Stock based compensation related to
options and warrants granted -- -- -- -- 40,366,861

Stock based lawsuit settlement related
to warrants -- -- -- -- 1,451,959

Common shares issued for services related
to exercise of warrants with a strike
price of $0.40 -- -- -- -- 1,173,395

Prepaid consulting services paid with
common shares (1,271,655) -- -- -- --

Cancellation of common shares related
to the fiscal year 1999 acquisition
of Isla Escondida, S.A. -- -- -- -- (984,375)

eCONNECT
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
(continued)

Cancellation of common shares related to
the fiscal year 1999 acquisition of
Top Sports, S.A. (1,000,000) (1,000) (72,100) --

Common shares issued for cash related to
Alpha Venture Capital, net of
offering costs of $2,331,486 13,161,800 13,162 6,486,738 --

Common shares issued for cash related
To Alpha Venture Capital exercise of
warrants, weighted average strike price
of $0.20 3,050,000 3,050 610,350 --
Common shares issued for cash related to
exercise of warrants with a strike
price of $0.40 7,351,959 7,352 2,933,432 --

Common shares issued for the
acquisition of Powerclick, Inc. 8,000,000 8,000 1,292,000 --

Common shares issued to acquire additional
50% ownership in Top Sports, S.A. 200,000 200 46,832 --

Net loss -- -- -- --
----------- --------- ------------- -----------

Balance, December 31, 2000 214,074,197 $ 214,074 $ 131,758,828 $ --
=========== ========= ============= ===========

Common Stock
---------------------------

Cancellation of common shares related to
the fiscal year 1999 acquisition of
Top Sports, S.A. -- -- -- -- (73,100)

Common shares issued for cash related to
Alpha Venture Capital, net of
offering costs of $2,331,486 -- -- -- -- 6,499,900

Common shares issued for cash related
To Alpha Venture Capital exercise of
warrants, weighted average strike price
of $0.20 -- -- -- -- 613,400
Common shares issued for cash related to
exercise of warrants with a strike
price of $0.40 -- -- -- -- 2,940,784

Common shares issued for the
acquisition of Powerclick, Inc. -- -- -- -- 1,300,000

Common shares issued to acquire additional
50% ownership in Top Sports, S.A. -- -- -- -- 47,032

Net loss -- -- (108,819) (114,553,068) (114,661,887)
------------ ----------- ----------- ------------- --------------

Balance, December 31, 2000 $ (1,271,655) $ -- $ (92,308) $ 145,126,417) $ (14,517,478)
============ =========== =========== ============= ==============

See Accompanying Notes to Financial Statements

eCONNECT
CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended December 31,
--------------------------------------------
2000 1999
-------------- -------------

Cash flows from operating activities:
Net loss $ (114,661,887) $ (23,273,393)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization and depreciation 1,967,338 207,019
Stock based compensation 83,441,832 10,886,992
Loss on investments 4,527,546 4,391,120
Bad debt 4,952,537 --
Loan fee 253,501 --
Cancellation of common stock (984,375) --
Legal settlement 1,451,959 --
Changes in operating assets and liabilities:
Change in due from related party 133,180 (250,000)
Change in accounts receivable (16,758) --
Change in stock subscription payable 220,176 --
Change in deposits (38,820) --
Change in other assets (105,612) --
Change in due from related party -
secured by Company's common stock (1,854,835) (757,481)
Change in officer bonus payable -- 4,800,000
Change in accounts payable 1,740,453 (62,251)
Change in accrued liabilities 2,942,694 45,111
Change in due to consultants 2,020,447 --
Change in due to related parties 3,106,403 613,010
Change in stockholder loan payable -- 350,000
-------------- -------------
Net cash used by operating activities (10,904,221) (3,049,873)

Cash flows from investing activities:
Purchase of fixed assets (497,857) --
Purchase of purchased software (2,168,892) --
Cost of investments (1,000,000) (35,000)
-------------- -------------
Net cash used by investing activities (3,666,749) (35,000)

Cash flows from financing activities:
Proceeds from issuance of notes payable 2,606,305 500,000
Proceeds from advance on equity funding line 206,600 --
Principal payments on notes payable (260,000) (200,000)
Proceeds from issuance of common stock 11,888,389 2,820,637
Proceeds from minority interest in consolidated subsidiary 16,511 --
Proceeds from issuance of stock subscription payable -- 81,546
-------------- -------------
Net cash provided by financing activities 14,457,805 3,202,183
-------------- -------------

eCONNECT
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)

Year Ended December 31,
--------------------------------------------
2000 1999
-------------- -------------

Net increase (decrease) in cash (113,165) 117,310

Cash, beginning of period 126,172 8,862
-------------- -------------

Cash, end of period $ 13,007 126,172
============== =============

Supplemental disclosure of cash flow:
Cash paid for interest $ 121,493 $ --
============== =============

Cash paid for taxes $ -- $ --
============== =============
Schedule of non-cash investing and financing activities:
1,050,000 common shares issued for prepaid
consulting services $ 1,271,655 $ --
============== =============

1,000,000 common shares cancelled during renegotiation
of 99.94% of Top Sports, S.A. recorded as portion of
due to related parties $ (73,100) $ --
============== =============

Remaining consideration for 99.94% acquisition of
Top Sports, S.A. recorded as portion of due
to related parties $ 2,973,996 $ --
============== =============

6,000,000 common shares issued for
officer bonus payable $ 4,800,000 $ --
============== =============

8,000,000 common shares issued related
to acquisition of Powerclick, Inc. $ 1,300,000 $ --
============== =============

666,667 common shares issued for accounts payable $ 550,000 $ --
============== =============

203,865 common shares issued for
stock subscription payable $ 81,546 $ --
============== =============

18,710,000 common shares issued for the acquisition
of Isla Escondida, S.A. $ -- $ 3,551,801
============== =============

eCONNECT
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)

Year Ended December 31,
--------------------------------------------
2000 1999
-------------- -------------

2,165,000 common shares issued for the acquisition
of www.theArtAuction.com $ -- $ 963,969
--------------------- ============== =============

1,650,000 common shares issued for joint venture $ -- 325,350
============== =============

1,000,000 common shares issued for the acquisition
of a 50% interest in Top Sports, S.A. $ -- 73,100
============== =============

9,400,000 common shares issued in exchange for
due from related party-secured by Company's
common stock $ -- $ 2,836,411
============== =============

716,966 common shares issued in exchange for
stock subscription receivable $ -- $ 220,176
============== =============

3,756,101 common shares issed for a 5% stock dividend $ -- $ 1,056,216
============== =============

1,589,397 common shares issued for principal
payments on long-term debt $ -- $ 300,000
============== =============

Acquisition of investment in exchange for
due from related party - secured by Company's
common stock $ -- $ 706,810
============== =============

eCONNECT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
--------------------------------------------------------------------

Description of business - eConnect (the "Company") currently has two
-----------------------
divisions. The first division is focused on the development of the Personal
Encrypted Remote Financial Electronic Card Transactions ("PERFECT")
industry, which consists of the fully operational terminal, the eCash Pad,
affecting Internet ATM card with PIN, credit card, smart card transactions,
and generating a fee per transaction for the Company. The second division is
the development of PERFECT gaming services for online gaming companies by
the usage of either same as cash ATM card with PIN entry or smart card
payments using the Internet as the medium. The Company's present gaming
operations consists of walk in sports book locations in the Dominican
Republic.

History - eConnect (formerly Betting, Inc.) was originally incorporated in
-------
the State of Missouri on September 1, 1981 under the name of Handy-Top, Inc.
The Company underwent several name changes until May 1993, when it changed
its name to Leggoons, Inc. and continued as a shell corporation with no
business operations.

In February 1997, the Company entered into an agreement to license assets
from Electronic Transaction Technology ("ET&T"), formerly known as Home
Point of Sales, Inc., for the purpose of licensing certain technology for
the development of PERFECT. ET&T is a privately held corporation with a
majority interest owned by Thomas S. Hughes, President of the Company. This
technology developed by ET&T would provide consumers with the option to
instantly pay bills or make purchases from home with real-time cash
transactions. In March 1997, Thomas S. Hughes, Chairman of ET&T, was elected
the Chairman and President of the Company and concurrently changed the
Company's name to Betting, Inc.

In May 1999, an Agreement and Plan of Merger was consummated between the
Company and Betting, Inc., a non-operating privately held Nevada corporation
("Betting-Nevada") to effectuate re-domicile of the Company to the State of
Nevada, whereby no shares were issued between companies. Under generally
accepted accounting principles, the merger with Betting-Nevada is considered
to be a reorganization in substance, rather than a business combination
since Betting-Nevada had no assets, liabilities or operations, and the
Company has since re-domiciled in the State of Nevada through Betting-
Nevada. Accordingly, the accounting for the merger has been recorded at
historical cost in a manner similar to a pooling of interests ("as-if
pooling of interest accounting"), and no goodwill was recorded.

In June 1999, a Certificate of Amendment to the Articles of Incorporation
changed the name of the Company to eConnect. In November 2000, a Certificate
of Amendment to the Articles of Incorporation was filed with the Nevada
Secretary of State further increasing the number of authorized common stocks
to 300,000,000.

Business combinations and investments - The business combinations have been
-------------------------------------
accounted for under the purchase method of accounting, therefore the Company
includes the results of operations of the acquired business from the date of
acquisition. Net assets of the company

acquired are recorded at fair value as of the date of acquisition. The excess
of the acquired business' purchase price over the fair value of its tangible
and identifiable intangible assets is then included in goodwill in the
accompanying consolidated balance sheet.

Investments in affiliated entities in which the Company has the ability to
exercise significant influence, but not control, and generally is an ownership
interest of the investee's voting stock between 20% and 50%, are accounted for
under the equity method of accounting. Accordingly, under the equity method of
accounting, the Company's share of the investee's earnings or losses are
included in the consolidated statements of operations. The Company records
its investments accounted for under the equity-method as "Investment in
equity-method investee" on the consolidated balance sheet and its share of the
investee's earnings or losses in "Earnings or loss on equity-method investees"
on the consolidated statement of operations. The portion of the Company's
investment in an investee that exceeds its claim of the net assets of the
investee, if any, is treated as goodwill and amortized over a period of three
years.

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
-----------------------------------------------------------

Principles of consolidation - The consolidated financial statements include
---------------------------
the accounts of the Company and its subsidiaries. All significant
intercompany balances and transactions have been eliminated.

Definition of fiscal year - The Company's fiscal year end is December 31.
-------------------------

Reclassification - Certain prior year balances have been reclassified to
----------------
conform to the current year presentation.

Use of estimates - The preparation of consolidated 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 disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.

Fixed assets - Fixed assets are stated at cost less accumulated
------------
depreciation. Depreciation is provided principally on the straight-line
method over the estimated useful lives of the assets, which are generally 3
to 5 years. The cost of repairs and maintenance is charged to expense as
incurred. Expenditures for property betterments and renewals are
capitalized. Upon sale or other disposition of a depreciable asset, cost
and accumulated depreciation are removed from the accounts and any gain or
loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have
occurred that may warrant revision of the estimated useful lives of fixed
assets or whether the remaining balance of fixed assets should be evaluated
for possible impairment. The Company uses an estimate of the related
undiscounted cash flows over the remaining life of the fixed assets in
measuring their recoverability.

Goodwill and intangible assets - Goodwill represents the excess of an
------------------------------
acquired business' purchase price over the fair value of its assets,
resulting from business acquisitions accounted for under the purchase
method. Intangible assets consist of purchased technology. Goodwill and
intangible assets are presented net of related accumulated amortization and
are being amortized on a straight-line basis over the estimated useful life
of three years.

We record impairment losses or write-downs on goodwill and intangible
assets when events and circumstances indicate that an impairment assessment
should be performed and that assessment indicates that there is an
impairment. Events and circumstances that would trigger an impairment
assessment include a significant decrease in the market value of an asset,
a significant change in the manner or extent that an asset is used
including a decision to abandon acquired products, services or
technologies, a significant adverse change in operations or business
climate affecting the asset, and historical operating or cash flow losses
expected to continue for the foreseeable future associated with the asset.
An asset is considered impaired when the undiscounted cash flows projected
to be generated from the asset over its remaining useful life is less than
the recorded amount of that asset. Impairment losses are measured based on
the difference between the asset's fair value and carrying amount and are

recorded as impairment write-downs in the consolidated statements of
operations in the period that an indicator of impairment arises.
Measurement of fair value is based on estimated expected future cash flows,
including terminal value cash flows expected to result from the disposition
of the asset at the end of its useful life, discounted at our weighted
average cost of capital. Weighted average cost of capital is based on
historical risk premiums required by investors for companies of our size,
industry and capital structure and includes risk factors specific to us. In
some instances, the measurement of fair value includes a factor, if
appropriate, for market comparables, representing our estimate of the value
that a buyer is willing to pay for similar assets in terms of products and
services, customer base, risks and earnings capabilities.

Fair value of financial instruments - The carrying amounts for the
-----------------------------------
Company's cash, accounts receivable, due to/from related party, accounts
payable, accrued interest, accrued liabilities, due to consultants, advance
on equity funding line and notes payable approximate fair value due to the
short-term maturity of these instruments.

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
-----------------------------------------------------------

Earnings (loss) per share - Basic earnings (loss) per share excludes any
-------------------------
dilutive effects of options, warrants and convertible securities. Basic
earnings (loss) per share is computed using the weighted-average number of
outstanding common stocks during the applicable period. Diluted earnings
per share is computed using the weighted average number of common and
common stock equivalent shares outstanding during the period. Common stock
equivalent shares are excluded from the computation if their effect is
antidilutive.

Revenue recognition - Revenues from its PERFECT division will consist of
-------------------
(i) the sale of eCash Pads and (ii) transaction fees charged to merchants
for electronic cash payments using the eCash Pads. Revenues from the sale
of eCash Pads are recognized upon the shipment of the product to the
customer since no specific performance obligations are required. Revenues
from transaction fees charged to merchants for electronic cash payments
using the eCash Pads are recognized upon the completion of each electronic
cash payment transaction, at which time a transaction fee is assessed to
the merchant.

Revenues from its sports books division consist of the net win (loss) from
gaming activities, which is the difference between gaming wins and losses.

Income taxes - The Company accounts for its income taxes in accordance with
------------
Statement of Financial Accounting Standards No. 109, which requires
recognition of deferred tax assets and liabilities for future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective
tax bases and tax credit carryforwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered
or settled. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the
enactment date.

As of December 31, 2000, the Company has available net operating loss
carryovers of approximately $34 million that will expire in various periods
through 2020. Such losses may not be fully deductible due to the
significant amounts of non-cash service costs and the change in ownership
rules under Section 382 of the Internal Revenue

Code. The Company has established a valuation allowance for the full tax
benefit of the operating loss carryovers due to the uncertainty regarding
realization.

Comprehensive income (loss) - The Company has no components of other
---------------------------
comprehensive income. Accordingly, net loss equals comprehensive loss for
all periods.

Segment information - The Company discloses segment information in
-------------------
accordance with Statements of Financial Accounting Standards (SFAS) No.
131, "Disclosures about Segments of an Enterprise and Related Information,"
which uses the Management approach to determine reportable segments.

Advertising costs - The Company recognizes advertising expenses in
-----------------
accordance with Statement of Position 93-7 "Reporting on Advertising
Costs." Accordingly, the Company expenses the costs of producing
advertisements at the time production occurs, and expenses the costs of
communicating advertisements in the period in which the advertising space
or airtime is used. Internet advertising expenses are recognized based on
the terms of the individual agreements, generally over the greater of the
number of impressions delivered over the total number of contracted
impressions, or a straight-line basis over the term of the contract.
Advertising costs of approximately $50,000 and $226,000 were incurred for
the years ended December 31, 1999 and 2000, respectively.

Stock-based compensation - The Company accounts for stock-based employee
------------------------
compensation arrangements in accordance with provisions of Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees," and complies with the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." Under APB No. 25, compensation
expense is based on the difference, if any, on the date of the grant,
between the fair value of the Company's stock and the exercise price. The
Company accounts for stock issued to non-employees in accordance with the
provisions of SFAS No. 123 and the Emerging Issues Task Force ("EITF")
Issue No. 96-18.

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT POLICIES (continued)
-----------------------------------------------------------

Research and development costs - Research and development costs are charged
------------------------------
to expense when incurred. Costs of software developed internally by us for
use in our operations are accounted for under the American Institute of
Certified Public Accountants' Statement of Position (SOP) No. 98-1,
"Internal Use Software." In May 2000, the Emerging Issues Task Force (EITF)
reached a consensus on Issue 00-2, "Accounting for Web Site Development
Costs" and we adopted this consensus on July 1, 2000. This consensus
requires that entities treat most web site development as internal use
software under SOP No. 98-1. Under these accounting pronouncements, we
expense costs of research, including pre-development efforts related to
determining technological or product alternatives, and costs incurred for
training and maintenance. Software and web site development costs, which
include direct costs such as labor and contractors, are capitalized when it
is probable that the project will be completed and the software or web
sites will be used as intended. Costs incurred for upgrades and
enhancements to our software or web sites are capitalized when we believe
such efforts result in additional functionality. Capitalized software and
web site costs are amortized to expense over the estimated useful life of
the software or web sites, which range from one to three years. As of
December 31, 2000, there are no costs capitalized under SOP No. 98-1.

Expenses of offering - The Company accounts for specific incremental costs
--------------------
directly to a proposed or actual offering of securities as a direct charge
against the gross proceeds of the offering.

New accounting pronouncements - In June 1998, the Financial Accounting
-----------------------------
Standards Board issued SFAS No.133, Accounting for Derivative Instruments
and Hedging Activities. SFAS No. 133 requires companies to recognize all
derivatives contracts as either assets or liabilities in the balance sheet
and to measure them at fair value. If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of
which is to match the timing of gain or loss recognition on the hedging
derivative with the recognition of (i) the changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk or (ii)
the earnings of the hedged forecasted transaction. For a derivative not
designated as a hedging instrument, the gain or loss is recognized in
income in the period of change. SFAS No. 133, as amended by SFAS No. 137,
is effective for all quarters of fiscal years beginning after June 15,
2000.

SFAS 141, Business Combinations, and SFAS 142, Goodwill and Intangible
Assets, will be effective to all business combinations completed after June
30, 2001. SFAS 142 is effective for fiscal years beginning after December
15, 2001; however, certain provisions of this Statement apply to goodwill
and other intangible assets acquired between July 1, 2001 and the effective
date of SFAS 142. Major provisions of these Statements and their effective
dates for the Company are as follows:

. goodwill, as well as intangible assets with indefinite lives, acquired
after June 30, 2001, will not be amortized. Effective January 1, 2002,
all previously recognized goodwill and intangible assets with indefinite
lives will no longer be subject to amortization.

. effective January 1, 2002, goodwill and intangible assets with
indefinite lives will be tested for impairment annually and whenever
there is an impairment indicator.
. all acquired goodwill must be assigned to reporting units for purposes
of impairment testing and segment reporting.

2. FIXED ASSETS
------------

Fixed assets consist of the following as of December 31, 2000:

Furniture and fixtures $207,790
Computers, equipment and software 203,088
Leasehold equipment 86,979
--------
497,857
Less: accumulated depreciation 54,122
--------

Fixed assets, net $443,735
========

3. INVESTMENTS
-----------

Isla Escondida, S.A. - The Company initiated an acquisition of Isla
--------------------
Escondida, S.A. during 1999. This acquisition was recorded using the
purchase method of accounting under APB No. 16. The results of operations
for the acquired company have been included in the financial results of the
Company from the date of such transaction forward.

In August 1999, the Company completed its acquisition of Isla Escondida,
S.A. (hereafter "777WINS"), a Costa Rica Corporation with the ability to
provide on-line gaming through its website portal www.777WINS.com. In
connection with the acquisition, the Company issued 18,710,000 shares of
the Company's common stock. Substantially the entire purchase price,
approximately $3,552,000, was allocated to goodwill, which was being
amortized on a straight-line basis over the estimated useful life of three
years.

As of December 31, 1999, the Company evaluated the balance and useful life
of goodwill related to 777WINS and determined that approximately $3,302,000
had no future benefit and, accordingly, recorded a loss on investment for
the same amount. As of December 31, 2000, the Company reevaluated the
balance and useful life of the remaining goodwill related to 777WINS and
determined an impairment on such goodwill since the operations have not
commenced nor does the Company anticipate it will ever commence.
Accordingly, the Company recorded a loss for the remaining unamortized
goodwill balance related to 777WINS approximating $139,000 since there is
no future benefit.

During 2000, the Company cancelled 10,500,000 shares of the Company's
common stock related to the fiscal year 1999 acquisition of 777WINS. The
Company

renegotiated the terms of the acquisition of 777WINS primarily due to lack
of performance of 777WINS. The cancellation of common stock has been
reflected as other income of $984,375, see Note 13 for additional
discussion.

3. INVESTMENTS (continued)
-----------

Top Sports, S.A. - In December 1999, the Company acquired 50% of the
----------------
outstanding capital stock of Top Sports, S.A. ("Top Sports") in
consideration of $35,000, 1,000,000 shares of the Company's common stock
and 2,000,000 warrants to purchase common stock for $0.40 per share for a
total value of $108,100, of which $85,319 was comprised of goodwill. During
2000, the Company renegotiated the terms of the acquisition agreement,
whereby the Company agreed to issue an additional 1,000,000 shares valued
at $235,160. As of December 31, 2000 200,000 of these additional shares
have been issued. In April 2000, the Company acquired an additional 49.94%
of Top Sports in consideration of 3,000,000 shares of the Company's common
stock and 1,000,000 warrants to purchase common stock for $1.00 per share
for a total value of $2,785,867, see Note 14. This acquisition was recorded
using the purchase method of accounting under APB No. 16. The Company's
equity interest in Top Sports' loss for the period from January 1, 2000
through March 31, 2000 has been recorded as a loss on equity-method
investees totaling $200,668. The results of operations from April 1, 2000
through December 31, 2000 for the acquired company has been included in the
financial results of the Company.

During fiscal year 2000, the Company cancelled 1,000,000 shares of its
common stock related to the fiscal year 1999 acquisition of Top Sports. The
cancellation was a result of the renegotiated terms of the acquisition
agreement which called for the cancellation of the original shares issued
in 1999 and for the issuance of new shares as discussed above.

In accordance with APB No. 16, all identifiable assets were assigned a
portion of the cost of the acquired company (purchase price) on the basis
of their respective fair values. Intangible assets were identified and
valued by considering the Company's intended use of the acquired assets and
analysis of data concerning products, technologies, markets, historical
performance, and underlying assumptions of future performance. The economic
environments in which the Company and the acquired company operate were
also considered in the valuation analysis. As of December 31, 2000, the
Company evaluated the unamortized balance and useful life of goodwill
related to Top Sports and determined the balance had no future benefit and,
accordingly, recorded a loss on investment for approximately $2,788,000.

Powerclick, Inc. - In February 2000, the Company acquired 50% of the
----------------
outstanding capital stock of Powerclick, Inc. ("Powerclick") in
consideration of $750,000 and 8,000,000 shares of the Company's common
stock valued at $1,300,000 for an aggregate investment of $2,050,000 which
is principally comprised of goodwill. The Company's equity interest in
Powerclick's loss has been recorded as a loss on equity-method investees
totaling $402,770 as of December 31, 2000.

As of December 31, 2000, the Company evaluated the unamortized balance and
useful life of goodwill related to Powerclick and determined the balance
had no future

benefit and, accordingly, recorded a loss on investment for approximately
$1,235,000.

During June 2000, 200,000 shares of common stock valued at $1,950,000 were
issued to Powerclick, Inc. stockholders for consulting services and expensed
as of December 31, 2000.

www.theArtAuction.com - In September 1999, the Company acquired
---------------------
www.theArtAuction.com ("ArtAuction") from Powerclick, Inc., a domain name and
website portal, to provide on-line art auctions. In connection with the
acquisition, the Company issued 2,165,000 shares of the Company's common
stock to Powerclick, Inc. Substantially the entire purchase price,
approximately $964,000, was allocated to other intangibles.

As of December 31, 1999, the Company's management has evaluated and
determined that approximately $764,000 of this investment has no future
benefit, accordingly, the Company recorded a loss on investment for the same
amount. As of December 31, 2000, the Company reevaluated the balance and
useful life of remaining goodwill related to ArtAuction and determined the
entire balance had no future benefit and, accordingly, recorded a loss on
investment for approximately $116,000.

3. INVESTMENTS (continued)
-----------

eConnect Caribbean, S.A. - eConnect Caribbean, S.A. ("eConnect Caribbean")
------------------------
was organized under the laws of the Dominican Republic and serves as the
Company's Latin American headquarters for all e-commerce transactions. The
Company owns 75% of the outstanding capital shares with the remaining 25%
owned by eConnect Caribbean's company's managing director. eConnect Caribbean
is in the start-up phase, therefore no revenue has been recorded and start-up
costs of $253,213 have been expensed. The formation of this subsidiary was
recorded using the full consolidation method. The consolidated financial
statements include 100% of the assets and liabilities of the subsidiary and
the ownership interest of the minority participant, recorded as "Minority
interest in consolidated subsidiary."

Intangible asset, net - In February 1997, the Company entered into an
---------------------
agreement for the exclusive 20-year license of certain assets of ET&T. In
satisfaction of the agreement terms, the Company reduced the balance due from
related party - secured by the Company's common stock by approximately
$707,000 based upon the historical value of this license based upon the
amount of research and development costs incurred by ET&T. This other
intangible is being amortized on a straight-line basis over three years based
upon management's estimated useful life of such asset. Amortization expense
for the years ended December 31, 2000 and 1999 approximated $235,600 and
$78,700, respectively.

National Data Funding Corporation - In connection with a "Letter of Intent",
---------------------------------
a non-binding agreement with National Data Funding Corporation (NDFC), the
Company deposited (non-refundable) $250,000. The Letter of Intent requires
the Company to pay the stockholders of NDFC $10,000,000, 10,000,000

shares of the Company's common stock in exchange for 100% ownership, and
contribute to NDFC $1,000,000 and 1,000,000 shares of the Company's common
stock for working capital. Pursuant to the "Letter of Intent", the Company is
required to "spin off" NDFC as a publicly traded company in which the Company
will retain a 25% ownership. The Letter of Intent expired on September 1,
2000. During September 2000, the Company evaluated and determined the deposit
of $250,000 of this investment has no future benefit, accordingly, the
Company recorded a loss on investment for the same amount.

In October 2000, the Company entered into an Agreement for Sale and Plan of
Reorganization ("NDFC Agreement") requiring the Company to pay the
stockholders of NDFC $10,000,000, 10,000,000 shares of the Company's common
stock in exchange for 50% ownership, and contribute to NDFC $1,000,000 and
1,000,000 shares of the Company's common stock for working capital. Pursuant
to the NDFC Agreement, the Company is required to make a bona fide and good
faith effort to spin off NDFC as a publicly traded company in which the
Company will retain approximately a 28% ownership. The Company was required
to complete the terms of the NDFC Agreement on October 31, 2000 ("Closing
Date"). The Company did not complete the NDFC Agreement on the Closing Date.
Certain provisions within the NDFC Agreement provided for an extension
through January 2, 2001, however the Company did not complete the terms of
the NDFC Agreement within the extension date. The Company plans to continue
its negotiation for the acquisition of NDFC.

4. COMMON STOCK ISSUED FOR PREPAID CONSULTING SERVICES
---------------------------------------------------

As of December 31, 2000, the Company issued 1,050,000 shares of its common
stock to Richard Epstein (a shareholder) for consulting services to be
rendered in the future. Accordingly, the Company recorded a value of
$1,271,655 as prepaid consulting services at December 31, 2000. The Company
will expense this prepaid consulting service when such services have been
considered rendered. The Company believes that such services will be fully
rendered by fiscal year ended 2001.

5. PURCHASED SOFTWARE
------------------

Purchased software represents licenses to use the Connex Software System used
in processing e-commerce transactions. The system will be installed in the
Dominican Republic (currently in process), Ireland, Hong Kong and Australia.
The licenses have been valued at approximately $2,169,000 and is being
amortized on a straight-line basis over three years based upon management's
estimated useful life of such asset. Amortization expense for the year ended
December 31, 2000 approximated $656,000

6. ACCRUED LIABILITIES
-------------------

As of December 31, 2000, accrued liabilities totaling $3,233,372 are
comprised of the following balances:

Accrued interest $ 1,225,971
Employee signing bonus (see Note 11) 75,000
Financing fee 318,177
Purchased software liability (see Note 5) 1,336,144
License fees 78,081
------------

Total accrued liabilities $ 3,033,373
============

7. DUE TO CONSULTANTS
------------------

As of December 31, 2000, due to consultants totaling $2,020,447 relate to
various individuals. These individual will be renumerated with 2,400,000
shares of the Company's common stock. As discussed in Note 19, the Company
has issued such shares during the first quarter of fiscal year 2001.

8. ADVANCE ON EQUITY FUNDING LINE
------------------------------

As of December 31, 2000, advances on equity funding line totaling $206,600
relates to advances from Alpha Venture Capital, Inc. related to the
Regulation D Common Stock Private Equity Line Subscription Agreement as
discussed in Note 10. The advances are due on demand and bear no interest.
The Company plans on converting these advances as a draw on the Regulation D
Common Stock Private Equity Line Subscription Agreement in fiscal year 2001.

9. NOTES PAYABLE
-------------

As of December 31, 2000, notes payable totaling $2,672,906 are comprised of
the following:

Promissory notes from various individuals, secured by Company
assets, due on demand, bearing annual interest rate of 120% $ 602,500

Promissory note from an individual, secured by Company assets,
due on demand, bearing annual interest rate of 10% 121,905

Promissory note from various individuals, secured by Company
assets, due on demand, bearing annual interest rate of 120% 1,948,501
-----------

Total notes payable $ 2,672,906
===========

10. STOCK SUBSCRIPTION RECEIVABLE
-----------------------------

In September 1999, the Company entered into a Regulation D Common Stock
Private Equity Line Subscription Agreement ("Subscription Agreement") with
Alpha Venture Capital, Inc. ("Alpha"). The Subscription Agreement entitles
the Company to draw funds up to $5,000,000 from issuance of its common stock
for an amount equal to 80% of the market value at the time of each draw
request, expiring September 2000, subject to certain terms and conditions.
The Subscription Agreement required the Company to deliver an aggregate of
1,000,000 five year warrants to purchase its common stock at an exercise
price equal to 80% of the closing bid price on the execution of this
agreement as a commitment fee. Furthermore, the Company is required to
deliver to Alpha up to a maximum of 500,000 warrants on a pro rata basis in
conjunction with the draw request, exercisable at the closing bid price at
the date of each draw request. In October 2000, the Company was granted a
one-year extension on its Subscription Agreement with one automatic six-month
extension and an overall increase in funds it may draw by an additional
$5,000,000. Pursuant to the October 2000 extension, the Company is required
to deliver an aggregate of 2,000,000 five year warrants to purchase its
common stock at an exercise price equal to 80% of the closing bid price on
the execution of this extension. Furthermore, the Company is required to
deliver to Alpha up to a maximum of 1,571,428 warrants on a pro rata basis in
conjunction with the draw request, exercisable at the closing bid price at
the date of each draw request. The Company is assessed a placement fee, as
provided within the Subscription Agreement, for funds drawn, which is equal
to 8% of each draw.

As of December 31, 2000, the Company has drawn $7,773,000 of the available
$10,000,000, and issued approximately 22,900,000 of shares of its common
stock in conjunction with this Subscription Agreement during fiscal year 2000
of which approximately 6,600,000 of these shares were held by Alpha for
future advances on the Subscription Agreement. Accordingly, the 6,600,000
shares of the Company's common stock held by Alpha is deemed unissued since
no consideration has been given for such shares and are not reflected as part
of the outstanding shares of the Company's common stock at December 31, 2000.
As of December 31, 2000, the Company recorded the commitment and placement
fees as direct charges to the gross proceeds from this Subscription Agreement
for approximately $2,331,000. During fiscal year 2000, Alpha exercised
approximately 3,050,000 warrants of the total 5,071,000 granted related to
the Subscription Agreement.

In December 2000, the Company entered into an additional Regulation D Common
Stock Private Equity Line Subscription Agreement ("Subscription Agreement No.
2") with Alpha as noted above. The Subscription Agreement No. 2 entitles the
Company to draw funds up to $15,000,000 from issuance of its common stock for
an amount equal to 82% of the market value for the five business days
immediately following the draw request date, expiring December 2001 with one
automatic twelve month extension if at least 20% of the subscription amount
is drawn during the first six months as of the agreement date, subject to
certain terms and conditions. The

Subscription Agreement No. 2 requires the Company to file a registration
statement on Form SB-2 with the Securities and Exchange Commission
("Registration Statement") for the registration of common stock for future
issuance related to the Subscription Agreement No. 2. The Subscription
Agreement No. 2 also requires the Company to deliver an aggregate of
2,000,000 five year warrants to purchase its common stock at an exercise
price equal to the lesser of 40% of the closing bid price of the Company's
common stock at the agreement date or 40% of the average five day closing bid
price as of the date of the effectiveness the Registration Statement.
Furthermore, the Company is required to deliver to Alpha up to a maximum of
1,000,000 warrants on a pro rata basis in conjunction with the draw request,
exercisable at the closing bid price at the date of each draw request. The
Company is assessed a placement fee, as provided within the Subscription
Agreement No. 2, for funds drawn, which is equal to 8% of each draw. As of
December 31, 2000, the Company has not drawn upon the Subscription Agreement
No. 2. Furthermore, no warrants were exercised of the total 3,000,000
warrants granted related to the Subscription Agreement No. 2.

11. EMPLOYMENT AGREEMENT
--------------------

During fiscal year 2000, the Company entered into an employment agreement
with its principal accountant. The agreement has a term through June 5,
2002. The agreement provides for a base compensation of approximately
$260,000 and performance based increases. Furthermore, the agreement
provided a signing bonus comprised of a stock option for 750,000 shares of
the Company's common stock at an exercise price of 25% of the prevailing
market price; and a warrant for 250,000 shares of the Company's common stock
at a strike price of $1.00; and cash of $100,000. The Company recorded a
stock based compensation approximating $211,000 related to the stock options
for 750,000 shares since the strike price was below fair value at the grant
date in accordance with APB No. 25, see Note 12 "Employee stock options and
warrants" for additional disclosures. The warrants for 250,000 shares of the
Company's common stock weighted-average grant date fair value approximated
$0.33 per shares. The Company has paid $25,000 of the cash portion of the
signing bonus and the remaining $75,000 was recorded as an accrued liability
as of December 31, 2000.

12. STOCK OPTIONS AND WARRANTS
--------------------------

Employee stock options and warrants - During fiscal year 2000, the Company
-----------------------------------
granted options and warrants for 6,800,000 shares of its common stock with
an weighted average strike price of $0.16 per share. Certain stock options
and warrants were granted in connection with an employment agreement entered
into during fiscal year 2000, see Note 11. Certain stock options and
warrants were exercisable upon grant and have a life ranging from 4 year to
indefinitely. The following table summarizes the Company's employee stock
options and warrants activity:

Number Weighted
Of Average
Warrants Exercise Price
---------- --------------
Balance, January 1, 2000 -- $ --
Warrants granted 6,800,000 0.16
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
---------- --------------
Balance, December 31, 2000 6,800,000 $ 0.16
========== ==============

Pro forma disclosure - SFAS No. 123 requires companies that follow APB
--------------------
No. 25 to provide a pro forma disclosure of the impact of applying the fair
value method of SFAS No. 123. Accordingly, had compensation cost of
approximately $3,055,000 been recognized based on the fair value at the date
of grant for employee options granted in fiscal year 2000, the pro forma
amounts of the Company's net loss and net loss per share for the year ended
December 31, 2000 would have been as follows:

December 31,
2000
--------------
Net loss - as reported $(114,661,887)
Net loss - pro forma $(117,717,053)
Basic and diluted loss per share - as reported $ (0.66)
Basic and diluted loss per share - pro forma $ (0.68)

The Company estimates the fair value of stock option and warrant granted to
employees using the Black-Scholes option pricing-model with the following
assumptions used for grants in 2000 using specific grant dates; no dividend
yield; expected volatility of 318%; risk free interest rates of 5.59%; and
expected lives of 1.5 years for all non-employee stock warrants.

12. STOCK OPTIONS AND WARRANTS (continued)
--------------------------

Employee stock options and warrants (continued)
-----------------------------------

The following tables summarizes information about options granted,
outstanding and exercisable at December 31, 2000:

Shares Underlying
Shares Underlying Options Outstanding Options Exercisable
--------------------------------------------------- --------------------------------
Weighted
Shares Average Shares
Underlying Remaining Weighted Underlying Weighted
Options Contractual Average Options Average
Exercise Price Outstanding Life Exercise Price Exercisable Exercise Price
---------------- ------------- ------------- ---------------- ------------- ----------------

$ 0.16 6,800,000 4 years $ 0.16 6,800,000 $ 0.16
================ ============= ============= ================ ============= ================

Exercise Price
Equals, Exceeds or
Number of is Less Than Mkt. Weighted Weighted
Options Granted Price of Stock Average Range of Average
During 2000 on Grant Date Exercise Price Exercise Price Fair Value
----------------- -------------------- ---------------- ---------------- ------------

-- Equals $ -- $ -- $ --
-- Exceeds $ -- $ -- $ --
6,800,000 Less Than $ 0.16 $ 0.16 $ 0.45
----------------- ---------------- ---------------- ------------
6,800,000 $ 0.16 $ 0.16 $ 0.45
================= ================ ================ ============

$0.40 Stock warrants - During fiscal year 1999, the Company granted
--------------------
approximately 13,770,000 stock warrants with an exercise price of $0.40
($0.40 warrants) per share for its common stock. These stock warrants were
granted in connection with common stock sold during fiscal year 1998 and
1999. These stock warrants were exercisable upon issuance and expired on
December 31, 2000. The following table summarizes the Company's $0.40
warrants activity:

Number of
Warrants Exercise Price
------------ ----------------
Balance, December 31, 1998 -- $ --
Warrants granted 13,770,000 0.40
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
------------ ----------------

Balance, December 31, 1999 13,770,000 0.40
Warrants granted -- --
Warrants canceled -- --
Warrants expired 3,485,000 0.40
Warrants exercised 10,285,000 0.40
------------ ----------------
Balance, December 31, 2000 -- $ --
============ ================

12. STOCK OPTIONS AND WARRANTS (continued)
--------------------------

$0.50 Stock warrants - During the year ended December 31, 2000, the Company
--------------------
granted approximately 500,000 stock warrants with an exercise price of $0.50
($0.50 warrants) per share of its common stock. These stock warrants were
granted in connections with consulting services rendered to the Company
during fiscal year ended 2000. These stock warrants were exercisable upon
issuance expiring in May 2005. The following table summarizes the Company's
$0.50 stock warrants activity:

Number of
Warrants Exercise Price
------------ ----------------
Balance, January 1, 2000 -- $ --
Warrants granted 500,000 0.50
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
------------ ----------------
Balance, December 31, 2000 500,000 $ 0.50
============ ================

The Company estimates the fair value of $0.50 warrants granted to
consultants by using the Black-Scholes option pricing-model with the
following assumptions used for grants in 2000 using specific grant dates; no
dividend yield; expected volatility of 286%; risk free interest rates of
6.41%; and expected lives of 1.5 years for all non-employee stock warrants.
Accordingly, the Company recorded consulting expenses under SFAS No. 123
relating to non-statutory stock options that became exercisable upon grant
in 2000 for approximately $276,000 as of December 31, 2000.

The following table summarizes information about warrants granted during the
year ended December 31, 2000:

-- Equals $ -- $ -- $ --
-- Exceeds $ -- $ -- $ --
500,000 Less Than $ 0.50 $ 0.50 $ 0.55
----------------- ---------------- ---------------- ------------
500,000 $ 0.50 $ 0.50 $ 0.55
================= ================ ================ ============

$1.00 Stock warrants - During the year ended December 31, 2000, the Company
--------------------
granted approximately 22,140,000 stock warrants with an exercise price of
$1.00 ($1.00 warrants) per share of its common stock. These stock warrants
were granted in connections with common stock sold, and consulting services
rendered to the Company during fiscal year ended 2000. These stock warrants
were exercisable upon issuance expiring at various dates ranging from June
2002 through October 2003. The following table summarizes the Company's
$1.00 stock warrants activity:

Number of
Warrants Exercise Price
------------ ----------------
Balance, January 1, 2000 -- $ --
Warrants granted 22,140,000 1.00
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
------------ ----------------
Balance, December 31, 2000 22,140,000 $ 1.00
============ ================

100

12. STOCK OPTIONS AND WARRANTS (continued)
--------------------------

$1.00 Stock warrants (continued)
--------------------

The Company estimates the fair value of $1.00 warrants granted to
consultants by using the Black-Scholes option pricing-model with the
following weighted average assumptions used for grants in 2000; no dividend
yield; expected volatility of 280%; risk free interest rates of 6.2%; and
expected lives of 1.5 years for all non-employee stock warrants.
Accordingly, the Company recorded consultant expenses under SFAS No. 123
relating to non-statutory stock options that became exercisable upon grant
in 2000 for approximately $29,484,000 as of December 31, 2000.

The following table summarizes information about warrants granted during
the year ended December 31, 2000:

Exercise Price
Equals, Exceeds or
Number of is Less Than Mkt. Weighted Weighted
Options Granted Price of Stock Average Range of Average
During 2000 on Grant Date Exercise Price Exercise Price Fair Value
--------------- ------------------ -------------- -------------- ----------

-- Equals $ -- $ -- $ --
-- Exceeds $ -- $ -- $ --
22,140,000 Less Than $ 1.00 $ 1.00 $ 1.33
--------------- -------------- -------------- ----------
22,140,000 $ 1.00 $ 1.00 $ 1.33
=============== ============== ============== ==========

Consultant options - During the year ended December 31, 2000, the Company
------------------
granted approximately 6,100,000 stock options for its common stock to
consultants in connection with consulting services performed during
fiscal year 2000. The exercise price of these stock option is $0.40 per
share if exercised on or before December 31, 2000; thereafter the exercise
price will be 25% of the fair market value on the date of the exercise.
Approximately 1,525,000 of these stock warrants are exercisable at December
31, 2000. The following table summarizes the Company's consultant stock
warrants activity:

Number Weighted
Of Average
Warrants Exercise Price
--------- --------------
Balance, January 1, 2000 -- $ --
Options granted 6,100,000 0.14
Options canceled -- --
Options expired -- --
Options exercised -- --
--------- --------------
Balance, December 31, 2000 6,100,000 $ 0.14
========= ==============

The weighted average exercise price of these warrants were based on the 30
day average fair value at December 31, 2000. The following tables
summarizes information about options granted, outstanding and exercisable
at December 31, 2000:

Shares Underlying
Shares Underlying Options Outstanding Options Exercisable
--------------------------------------------------- ---------------------------------

Weighted
Shares Average Shares
Underlying Remaining Weighted Underlying Weighted
Options Contractual Average Options Average
Exercise Price Outstanding Life Exercise Price Exercisable Exercise Price
-------------------- --------------- -------------- ------------------- ----------------- --------------
$0.14 6,100,000 4 years $0.14 1,525,000 $0.14
==================== =============== ============== =================== ================= ==============

101

12. STOCK OPTIONS AND WARRANTS (continued)
--------------------------

Consultant options (continued)
------------------

-- Equals $ -- $ -- $ --
-- Exceeds $ -- $ -- $ --
6,100,000 Less Than $ 0.14 $ 0.14 $ 1.33
---------------- -------------- -------------- ----------
6,100,000 $ 0.14 $ 0.14 $ 1.33
================ ============== ============== ==========

The Company has reported consulting expenses for past services during 2000
based upon the grant date since it provides more reliable measurement.

The Company estimates the fair value of consultant options granted by using
the Black-Scholes option pricing-model with the following weighted average
assumptions used for grants in 2000; no dividend yield; expected volatility
of 318%; risk free interest rates of 6.0%; and expected lives of 1.5 years
for all non-employee stock warrants. Accordingly, the Company recorded
consultant expenses under SFAS No. 123 relating to non-statutory stock
options that became exercisable upon grant in 2000 for approximately
$3,216,000 as of December 31, 2000.

Richard Epstein stock warrants - During the year ended December 31, 2000,
------------------------------
the Company granted approximately 8,800,000 stock warrants for its common
stock to Richard Epstein in connection with financing provided by Mr.
Epstein to the Company during fiscal year 2000. The exercise price of these
stock warrants primarily range from $0.25 to $0.40. Approximately 2,000,000
of these stock warrants are exercisable at 50% below the closing bid upon
the date of exercise. These stock warrants were exercisable upon grant and
will expire on June 2002 through September 2003. The following table
summarizes the Company's consultant stock warrants activity:

Number Weighted
Of Average
Warrants Exercise Price
--------- --------------

Balance, January 1, 2000 -- $ --
Warrants granted 8,800,000 0.48
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
--------- --------------
Balance, December 31, 2000 8,800,000 $ 0.48
========= ==============

The Company estimates the fair value of Mr. Epstein's stock warrants by
using the Black-Scholes option pricing-model with the following assumptions
used for grants in 2000 using specific grant dates; no dividend yield;
expected volatility of 295%; risk free interest rates of 6.22%; and
expected lives of 1.5 years for all non-employee stock warrants.
Accordingly, the Company recorded financing costs under SFAS No. 123
relating to non-statutory stock options that became exercisable upon grant
in 2000 for approximately $4,672,000 as of December 31, 2000.

The following table summarizes information about warrants granted during
the year ended December 31, 2000:

Exercise Price
Equals, Exceeds or
Number of is Less Than Mkt. Weighted Weighted
Options Granted Price of Stock Average Range of Average
During 2000 on Grant Date Exercise Price Exercise Price Fair Value
--------------- ------------------ -------------- -------------- --------------

-- Equals $ -- $ -- $ --
-- Exceeds $ -- $ -- $ --
8,800,000 Less Than $ 0.48 $ 0.48 $ 0.53
-------------- -------------- -------------- --------------
8,800,000 $ 0.48 $ 0.48 $ 0.53
============== ============== ============== ==============

102

12. STOCK OPTIONS AND WARRANTS (continued)
--------------------------

Paul Egan stock warrants - During fiscal year 1999 and 2000, the Company
------------------------
granted 2,000,000 and 1,000,000, respectively, stock warrants for its
common stock to Paul Egan in connection with the acquisition of Top Sports,
S.A. with an exercise price ranging from $0.40 to $1.00 expiring in April
2001, as discussed in Note 3. The following table summarizes the Company's
stock warrants activity related to Mr. Egan:

Number Weighted
Of Average
Warrants Exercise Price
------------- -----------------

Balance, January 1, 1999 -- $ --
Warrants granted 2,000,000 0.40
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
------------- -----------------
Balance, January 1, 2000 2,000,000 0.40
Warrants granted 1,000,000 1.00
Warrants canceled -- --
Warrants expired -- --
Warrants exercised 500,000 0.40
------------- -----------------

Balance, December 31, 2000 2,500,000 $ 0.64
============= =================

The following table summarizes information about warrants granted during
the year ended December 31, 2000:

Exercise Price
Equals, Exceeds or
Number of is Less Than Mkt. Weighted Weighted
Options Granted Price of Stock Average Range of Average
During 2000 on Grant Date Exercise Price Exercise Price Fair Value
--------------- ------------------ -------------- -------------- ----------

-- Equals $ -- $ -- $ --
1,000,000 Exceeds $ 1.00 $ 1.00 $ 0.15
-- Less Than $ -- $ -- $ --
--------------- -------------- -------------- ----------
1,000,000 $ 1.00 $ 1.00 $m 0.15
=============== ============== ============== ==========

Alpha Venture Capital, Inc. stock warrants - As discussed in Note 10, a
------------------------------------------
total of 8,071,00 stock warrants were granted during 1999 and 2000. The
following table summarizes the Company's stock warrants activity related to
Alpha Venture Capital, Inc.:

Number Weighted
Of Average
Warrants Exercise Price
------------- -----------------

Balance, January 1, 1999 -- $ --
Warrants granted 1,500,000 0.22
Warrants canceled -- --
Warrants expired -- --
Warrants exercised -- --
------------- -----------------
Balance, January 1, 2000 1,500,000 0.22
Warrants granted 6,571,000 0.44
Warrants canceled -- --
Warrants expired -- --
Warrants exercised 3,050,000 0.20
------------- -----------------

Balance, December 31, 2000 5,021,000 $ 0.43
============= =================

12. STOCK OPTIONS AND WARRANTS (continued)
--------------------------

103

Alpha Venture Capital, Inc. stock warrants (continued)
------------------------------------------------------

The following tables summarizes information about options outstanding and
exercisable at December 31, 2000:

Shares Underlying
Shares Underlying Options Outstanding Options Exercisable
-------------------------------------------- -------------------------------

Weighted
Shares Average Shares
Underlying Remaining Weighted Underlying Weighted
Options Contractual Average Options Average
Exercise Price Outstanding Life Exercise Price Exercisable Exercise Price
------------------- ----------- ----------- ----------------- ------------- --------------
$ 0.43 5,021,000 1.5 years $ 0.43 3,322,000 $ 0.43
=================== =========== =========== ================= ============= ==============

13. CANCELLATION OF COMMON STOCK
----------------------------

During fiscal year 2000, the Company cancelled a total of 10,500,000 shares
of its common stock. As discussed in Note 3, 10,500,000 shares were
cancelled related to the fiscal year 1999 acquisition of 777WINS. The
Company recorded a total of $984,375 as other income based on the original
issuance price during fiscal year 1999.

14. RELATED PARTY TRANSACTIONS
--------------------------

Stockholder receivable - As of December 31, 2000, a stockholder and former
----------------------
director of the Company borrowed $111,820. The balance is unsecured and due
on demand. The Company has reserved an allowance for doubtful accounts and
expensed as bad debt for the entire balance at December 31, 2000. However,
the Company will continue its effort in collecting the entire balance due
from this shareholder and former director.

Due to related parties - As of December 31, 2000, due to related parties
----------------------
totaling $ 2,007,402 are comprised of the following:

Amounts due to ET&T related to the development of PERFECT $ 663,035

Advances from Alliance Equities (company controlled by Richard
Epstein, a shareholder of the Company), unsecured, bearing annual
interest of 10% every three months, and due on demand 1,336,366

Consulting services liability due to Richard Epstein based upon to the
value of 5,000,000 shares of the Company's common stock due to
Mr. Epstein related a consulting agreement as further discussed below 983,475

Deposit related to the purchase of 2,000 eCash pads 250,000

Value of remaining 4,800,000 common stocks and warrants for
2,500,000 shares of the Company's common stock to be issued to
Paul Egan (a shareholder of the Company) related to the fiscal year
1999 acquisition of Top Sports, S.A., see Note 3 2,973,996

Advances from Paul Egan, unsecured, due on demand, and bearing
no interest 836,537
----------

Total due to related parties $7,043,409
==========

104

14. RELATED PARTY TRANSACTIONS (continued)
--------------------------

Consulting agreement - In January of 2000, the Company entered into a
--------------------
Consulting Services Agreement with Richard Epstein, a shareholder of the
Company. Mr. Epstein has agreed to assist the Company in developing a
market for the usage of the eCash Pad for a period of three years in
exchange for 15,000,000 shares of the Company's common stock. The amount
recorded as consulting expense totaled $983,475 for the year ended December
31, 2000. In January 2001, the Company issued Mr. Epstein 15,000,000 shares
of its common stock, see Note 19 for further discussion.

In February 2000, the Company entered into another Consulting Services
Agreement with Mr. Epstein. Mr. Epstein agreed to provide consulting
services related to future mergers and acquisitions in behalf of the
Company for a period of 2 years in exchange for 300,000 shares of the
Company's common stock monthly. The Company recorded consulting expenses of
$3,996,630 for the year ended December 31, 2000. During fiscal year 2000,
the Company issued a total of 1,050,000 shares of the its common stock in
advance of such services having been rendered. Accordingly, the Company has
recorded a prepaid consulting services of $1,271,655 related to such
advance issuances as of December 31, 2000.

Employee bonus - In January 2000, the Company issued 6,000,000 shares of
--------------
the Company's common stock to satisfy a $4,800,000 bonus payable to Thomas
S. Hughes, Chief Executive Officer and Director, incurred during fiscal
year 1999.

Due from related party - secured by Company's common stock - As of December
----------------------------------------------------------
31, 2000, due from related party - secured by Company's common stock
consists of $4,835,717 which has been fully reserved as an allowance for
doubtful accounts and expensed as bad debt. This amount relates to a
combination of approximately 21% cash and 79% common stock issuance to
Thomas S. Hughes and ET&T during fiscal year 1999 and 2000.

15. STOCK BASED COMPENSATION
------------------------

As of December 31, 1999 and 2000, the Company incurred expenses resulting
from stock warrants and common stock issued totaling $10,886,992 and
$83,441,832, respectively. The following table summarizes the Company's
stock based compensation activities based on the accounts shown on the
consolidated statements of operations:

December 31, December 31,
1999 2000
----------- -----------

Consulting $ 3,609,980 $66,496,629
Public relations 189,180 2,677,381
Research and development 1,644,072 3,001,042
Wages 4,800,000 2,562,494
Investor relations -- 1,173,395
Financing fees -- 4,671,559
Professional fees -- 639,903
Interest expense 643,760 2,219,429
----------- -----------

Total stock based compensation $10,886,992 $83,441,832
=========== ===========

105

16. COMMITMENTS AND CONTINGENCIES
-----------------------------

Legal proceedings - During fiscal year 2000, a class action litigation was
-----------------
filed asserting the Company and Thomas S. Hughes (an officer and director
of the Company), as well as the directors of the Company (in certain
actions), have violated Section 10(b) of the Exchange Act (false or
misleading statements and omissions which deceived stock purchasers) and
also Section 20(a) of the Exchange Act (liability as a "controlling person"
with respect to a primary violation of securities laws). The principal
allegations concern various material misrepresentations and omissions which
allegedly made the Company's public statements, on and after November 18,
1999, false and misleading; and artificially inflated the market for the
Company's common stock. The Company reached a settlement in principle with
the plaintiffs, pursuant to which $350,000 was paid to plaintiffs' counsel
to be held in escrow during fiscal year 2000. A warrants component of the
settlement is still being finalized with the plaintiffs' counsel which will
calls for the issuance of 5,000,000 stock warrants of the Company's common
stock exercisable over ten years from the date of issuance with a strike
price of $1.00 per share. The Company anticipates that the settlement will
be negotiated in full by the second quarter in fiscal year 2001. The
Company has recorded the 5,000,000 stock warrants as a legal settlement
expense totaling $1,451,959 as of December 31, 2000.

On March 22, 2000, the Company consummated an amended and restated
employment agreement with an individual and his firm to act as outside
counsel for the Company. On April 14, 2000, the Company terminated this
individual and his firm as outside counsel. Based upon the amended and
restated employment agreement, the remaining compensation for the term of
this agreement will be due immediately upon the termination of this
individual and his firm as outside counsel if terminated for reasons other
than good cause. In addition, any common stock and stock warrants granted
through the term of this agreement will be considered due in the event of
termination for reasons other than good cause. Accordingly, the termination
of this individual and his firm, for reasons other than good cause, may
potentially expose the Company to incur a liability of approximately
$700,000 for the remaining portion of unpaid compensation for the first,
second and third years of this agreement. Furthermore, the termination may
have accelerated the vesting of the granted common stock and stock warrants
consisting of 600,000 common stocks and 600,000 warrants exercisable at
$1.00 per share. The Company's management believes that the termination of
this individual and his firm was in good cause and intends to defend itself
in this matter vigorously.

On March 21, 2000, the Company consummated an amended employment agreement
with an individual for the position of President and Chief Operating
Officer for the Company. On April 17, 2000, the Company terminated this
individual as President and Chief Operating Officer of the Company. Based
upon the amended employment agreement, the remaining salary for the term of
this agreement, will be due within 30 days upon the termination of this
individual if terminated for reasons other than good cause. In addition,
through the date of termination, all of the granted stock options and
warrants will vest and be exercisable for their entire term. Accordingly,
the termination of this individual, for reasons other than good cause, may
potentially expose the Company to incur a liability of approximately
$1,260,000 for the remaining portion of unpaid salary for the first,
second, third, and fourth years of this agreement. Furthermore, the
termination may have accelerated the vesting of the granted stock options
and warrants consisting of 1,000,000 warrants exercisable at $1.00 per
share, 6,000,000 stock options exercisable at $0.40 per share, and
1,500,000 stock options exercisable at the lowest average daily trading
price of the Company's common stock within the first 90 days of the
executive's employment. On March 21, 2001, the former President and Chief
Operating Officer for the Company filed a complaint for breach of contract
and specific performance. The complaint is seeking $1,260,000, 1,000,000
warrants to purchase 1,000,000 shares for $0.40 per share and vested

106

options to purchase 6,000,000 shares for $0.40 per share. The Company's
management believes that the termination of this individual was in good
cause and intends to defend itself in this matter vigorously.

16. COMMITMENTS AND CONTINGENCIES (continued)
-----------------------------

On September 5, 2000, a consultant filed a complaint for breach of an oral
contract, money owed, and fraud against the Company, and Thomas Hughes,
alleging that the consultant and the Company entered into an oral contract
whereby the consultant was to perform marketing and product development
services for the Company. The consultant claims that an amount totaling
$128,590 is due to him by the Company. The Company's management believes
that this complaint is without merit and intends to defend itself in this
matter vigorously.

While the results of these matters cannot be predicted with certainty, the
Company's management believes that losses, if any, resulting from the
ultimate resolution of these matters will not have a material adverse
effect on the Company's consolidated results of operations, cash flows or
financial position. However, unfavorable resolution could affect the
consolidated results of operations or cash flows for the years in which
they are resolved.

Leased facilities - The Company operates from a leased facilities under a
-----------------
noncancellable operating leases. The Agreements calls for an annual base
rent of approximately $146,000 with a variable escalation rate. As of
December 31, 2000, total rent expense for the leased facility approximated
$95,000.

Future minimum rental payments required under the operating lease for the
office facility as of December 31, 2000, are as follows:

2001 $141,000
2002 125,000
2003 49,000
--------

$315,000
========
17. OTHER MATTERS
-------------

On March 12, 1999, the Securities and Exchange Commission ("SEC") filed a
complaint alleging the Company had failed to make available to the
investing public current and accurate information about its financial
condition and results of operations through the filing of periodic reports
with the SEC as required by the Securities Exchange Act of 1934. The SEC
sought to compel the Company to file the delinquent periodic reports and
enjoin the Company from further violations of the Exchange Act of 1934. The
Company consented to the entry of a Final Judgment granting the relief
sought by the SEC.

On March 13, 2000, the SEC ordered a ten days suspension in trading of the
Company's common stock on the Over-the-Counter Bulletin Board ("OTCBB").
This trading suspension was taken in connection with an investigation of
the Company by the SEC. The Company's common stock resumed trading on March
27, 2000; however, from that date through October 31, 2000, the Company's
common stock traded on the Pink Sheets LLC (symbol "ECNC") since the
company's common stock was delisted on that date from the OTCBB due to the
trading suspension.

In August, 2000, a market maker, on behalf of the Company, filed with the
NASD Stock Market, Inc. an application for the Company's common stock to be
relisted for trading on the OTCBB. The Company's application with the NASD
was accepted and trading of its common stock on the OTCBB commenced on
November 1, 2000.

107

18. GOING CONCERN
-------------

The Company incurred a net loss of approximately $115,000,000 for the year
ended December 31, 2000. The Company's liabilities exceed its assets by
approximately $14,517,000, and current liabilities exceed its current
assets by approximately $17,059,000 as of December 31, 2000. These factors
create an uncertainty about the Company's ability to continue as a going
concern. The Company's management has developed a plan to complete the
development of technology products to generate future revenues. The Company
will also seek additional sources of capital through a combination debt
equity financing and issuance of equity for approximately $20,000,000, but
there can be no assurance that the Company will be successful in
accomplishing its objectives.

19. SUBSEQUENT EVENTS
-----------------

In March 2001, the Company entered into an agreement with a Alliance
Equities (controlled by Richard Epstein) which would provide borrowings up
to $7,000,000 as a line of credit. The agreement provides the Company a
line of credit through December 31, 2002, interest at 12% annually,
maturing on December 31, 2002.

In January 2001, the Company issued 16,800,000 shares of its common stock
to Richard Epstein related to consulting agreements as discussed in Note
13. A total of 5,000,000 shares relate to satisfaction of a Company
obligation to Mr. Epstein totaling $983,475 at December 31, 2000, see Note
14. The remaining 11,800,000 shares were issued in advance and has been
recorded by the Company as prepaid consulting services during this period
approximating $4,147,000.

During January 2001 through March 2001, the Company issued approximately
2,525,000 of shares of its common stock for services to various
individuals. Approximately 2,400,000 shares related to due to consultant
liability incurred fiscal year 2000.

In March 2001, the Company issued 12,307,692 shares of its common stock to
Alpha Venture Capital, Inc. in satisfaction of an advance on equity funding
line totaling 206,600 at December 31, 2000, as discussed in Note 10 and
advances of $860,100 from January 2001 through February 2001.

During January 2001 and through the date of this report, the Company
borrowed approximately $348,000 from various parties, due on demand with an
annual interest rate of 12%.

20. SEGMENT INFORMATION
-------------------

As described in Note 1, the Company adopted SFAS No. 131 in fiscal year
1999. For the year ended December 31, 2000, the Company has two reportable
business segments: PERFECT industry and gaming operations. The Company
conducts operations in Southern California and Dominican Republic and is
managed based upon its business segments. During fiscal year 1999, the
Company had only one business segment.

The accounting policies of the business segments are the same as those
described in the Summary of Significant Accounting Policies as discussed in
Note 1. The Company primarily allocates resources to the PERFECT industry,
however has continued to allocate limited resources to the gaming
operations for potential short-term cash flow purposes.

108

20. SEGMENT INFORMATION
-------------------

The table below presents information about the Company's reportable
segments:

December 31, 2000
-----------------------------------------------------------
PERFECT Gaming
Industry Operations Eliminations Total
-------------- ------------ ------------- --------------

Revenues $ -- $ (655,584) -- $ (655,584)
Cost of revenues -- -- -- --
------------- ----------- ------------ -------------
Gross profit (loss) -- (655,584) -- (655,584)
Operating expenses 106,855,911 297,868 -- 107,153,779
------------- ----------- ------------ -------------
Loss from operations (106,855,911) (953,452) -- (107,809,363)
Other (income) expenses 6,750,508 102,016 -- 6,852,524
------------- ----------- ------------ -------------
Loss before provision for income taxes (113,606,419) (1,055,468) -- (114,661,887)
Provision for income taxes -- -- -- --
------------- ----------- ------------ -------------
Net loss $(113,606,419) $(1,055,468) $ -- $(114,661,887)
============= =========== ============ =============

Total assets $ 2,561,768 $ 304,370 $ (294,608) $ 2,571,530
============= =========== ============ =============
Total liabilities

109

/s/ L.L. Bradford & Company, LLC

L.L. Bradford & Company, LLC
Las Vegas, Nevada
March 30, 2001

110

CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

(a) On August 1, 1998, the company engaged the services of George
Brenner, C.P.A. of Beverly Hills, California, to provide an audit of the
company's financial statements for the fiscal years ended August 31, 1997 and
1998. The former accountants for the company, BDO Seidman L.L.P. of St. Louis
Missouri declined to stand for re-election for the 1997 engagement. The
independent auditor's reports for August 31, 1996 and 1995, were modified as to
the uncertainties about the company's ability to continue as a going concern.
The decision to change accountants was approved by the company's Board of
Directors with the selection of the successor accountant.

(b) Effective on July 19, 1999, the independent accountant who was
previously engaged as the principal accountant to audit the registrant's
financial statements, resigned. This accountant's report on the financial
statements for the past two years was modified as to uncertainty that the
company will continue as a going concern. The decision to change accountants was
approved by the Board of Directors.

(c) Effective on July 22, 1999, the firm of Farber & Hass was engaged
to serve as the new principal accountant to audit the company's financial
statements. During the company's two most recent fiscal years, and the
subsequent interim period prior to engaging that accountant, neither the company
(nor someone on its behalf) consulted the newly engaged accountant regarding any
matter.

(d) Effective on March 8, 2000, the independent accountants who were
previously engaged as the principal accountants to audit the company's financial
statements were dismissed. These accountants did not issue any financial
statements for the company. The decision to change accountants was approved by
the Board of Directors.

(e) Effective on March 8, 2000, the firm of L.L. Bradford & Company
was engaged to serve as the new principal accountants to audit the company's
financial statements. During the company's two most recent fiscal years, and the
subsequent interim period prior to engaging those accountants, neither the
company (nor someone on its behalf) consulted the newly engaged accountants
regarding any matter.

During the company's two most recent fiscal years and any subsequent
interim period preceding such changes, there have been no disagreements with
former accountants on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure. In addition,
there were no "reportable events" as described in Item 304(a)(1)(iv)(B)1 through
3 of Regulation S-B that occurred within the company's two most recent fiscal
years and the subsequent interim period preceding such changes.

111

AVAILABLE INFORMATION

The company has filed with the U.S. Securities and Exchange
Commission, Washington, D.C. 20549, a Registration Statement on Form SB-2 under
the Securities Act of 1933 with respect to the shares of common stock offered by
this prospectus. This prospectus does not contain all of the information set
forth in the registration statement and the exhibits and schedules filed with
the registration statement. Certain items are omitted in accordance with the
rules and regulations of the Commission. For further information with respect
to the company and the common stock offered by this prospectus, reference is
made to the registration statement and the exhibits and schedules filed with the
registration statement. Statements contained in this prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference.

A copy of the registration statement, and the exhibits and schedules filed
with it, may be inspected without charge at the public reference facilities
maintained by the Commission in Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and copies of all or any part of the registration statement may be
obtained from such office upon the payment of the fees prescribed by the
Commission. The public may obtain information on the operation of the public
reference room by calling the Commission at 1 (800) SEC-0330. The Commission
maintains a World Wide Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission, including the company. The address of the site is
http://www.sec.gov. The registration statement, including all its exhibits and
any amendments, has been filed electronically with the Commission.

112

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF OFFICERS AND DIRECTORS

Information on this item is set forth in the propsectus under the
heading "Disclosure of Commission Position on Indemnification for Securities Act
Liabilities."

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the fees and expenses in connection
with the issuance and distribution of the securities being registered hereunder,
all of which are being paid by the company*:

Securities and Exchange Commission registration fee $ 1,452
Transfer agent's fees 1,000
Printing and engraving expenses 1,500
Legal fees and expenses 25,000
Accounting fees and expenses 5,000
State blue sky fees 10,000
-------
Total $44,634*
=======

* All fees, except the Securities and Exchange Commission registration fee, are
estimated.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM SALE OF
REGISTERED SECURITIES

Sales of Unregistered Securities.

Other than as set forth below, during the last three years there have
not been any sales of unregistered securities of the company:

113

shares of common stock, exercisable at $1.00 per share. These warrants have a
two-year expiration date from the original date of signing the agreement
(September 24, 1999).

(14) In December 1999, the company issued 1,000,000 shares of common
stock in connection with the acquisition of a 50% interest in TopSports, S.A.

(15) During fiscal year 1999, the company granted approximately
13,770,000 stock warrants with an exercise price of $0.40 per share for its
common stock. These stock warrants were granted in connection with common stock
sold during fiscal year 1998 and 1999, and consulting services rendered to the
company during fiscal year 1999. These stock warrants were exercisable upon
issuance and expired on December 31, 2000.

(a) Period beginning October 1, 1999, through December 31, 1999:

(1) During the period of April 7, 1999 through November 24, 1999, the
company issued a total of 4,484,500 shares of common stock to 14 individuals and
firms in exchange for consulting and other services to the company.

(2) In October 1999, the company issued warrants in connection with a
consulting agreement with International Investor Relations Group, as follows:
(i) a warrant covering 100,000 shares of common stock, exercisable at $0.50 per
share; (ii) a warrant covering 100,000 shares of common stock, exerciable at
$0.75 per share; and (iii) a warrant covering 100,000

114

(b) Fiscal Year Ended December 31, 2000:

The company made the following sales of unregistered securities during
the fiscal year ended December 31, 2000:

(1) On January 10, 2000, the company issued a total 666,667 shares of
common stock to satisfy certain accounts payable to the company in the amount of
$550,000.

(2) On January 11, 2000, the company issued 6,000,000 shares of
common stock to Mr. Hughes in satisfaction of a bonus payable.

(3) On February 2, 2000, the company issued a total of 1,100,000
shares of common stock for James Clinton or his nominees based on the stated
reason that compliance with a 10% ownership provision contained in a 1997
license agreement was required. Shares issued under this provision of this
license agreement were not issued for consideration. See "Certain Relationships
and Related Transactions."

(4) During the period of February 2, 2000 through December 28, 2000,
the company issued a total of 19,509,719 shares of common stock to 43
individuals and firms in exchange for consulting and other services performed
for the company

(5) During February 2000, the company issued a total 570,000 shares
of common stock in connection with employee compensation.

(6) Between February 2, 2000 and October 3, 2000, the company sold a
total of 3,335,762 shares of common stock to 129 individuals at a price of $0.40
per share, for an aggregate consideration of $1,330,969; 472,500 of these shares
had warrants attached to them, exercisable at $1.00 per share for the period of
January 1, 2001 through June 30, 2002. In connection with these sales,
2,500,000 shares of common stock were issued on April 4, 2000 to two individuals
for finder's fees (included within the total issuances under paragraph (d)).

(7) On March 22, 2000, the company issued 6,000,000 of its common
stock for the acquisition of PowerClick, Inc., valued at $975,000 (2,000,000
additional free trading shares

115

were issued in connection with this acquisition, for a total value of this
acquisition of $1,300,000).

(8) During the first quarter of 2000, the company issued warrants
covering a total of 14,430,060 shares of common stock to 13 individuals under
various warrant agreements for consulting services to the company, exercisable
at $1.00 per share from June 30, 2000 through June 30, 2002.

(9) On April 4, 2000, the company issued a warrant covering 300,000
shares of common stock in connection with a consulting agreement entered into on
that date by the company, exercisable at $1.00 per share from January 1, 2001
through June 30, 2002.

(10) On May 24, 2000, the company issued two warrants covering a
total of 500,000 shares of common stock, exercisable at $0.50 through May 24,
2005 under a warrant agreement with GunnAllen Financial, Inc. in connection with
this firm's services in assisting the company to become relisted on the Over the
Counter Bulletin Board.

(11) On June 15, 2000, the company sold 3,000,000 shares of common
stock to an individual for $500,000 cash ($0.16 per share).

(12) On July 11, 2000, the company issued two warrants to two
individuals covering a total of 600,000 shares of common stock, exercisable at
$1.00 per share for the period of January 1, 2001 through June 30, 2002, for
consulting services rendered to the company.

(13) On July 12, 2000, the company granted to an individual an option
to purchase 4,400,000 shares of common stock of the company, exercisable upon
issuance at $1.00 per share through July 12, 2002 (3,080,000 of the total was
granted as payment of all accured interest under a $500,000 loan made by this
individual to the company; the remaining 1,320,000 were granted as compensation
for consulting services rendered to the company).

(14) On October 21, 2000, the company issued a warrant covering the
purchase of 4,000,000 shares of common stock to PowerClick, Inc., exercisable
upon issuance at $1.00 per share through October 21, 2003 (issued in connection
with the settlement of litigation between that firm and the company, as
disclosed in the Form 10-QSB filed on November 14, 2000).

(15) At various times in the fourth quarter of 2000, the company
issued warrants to Alpha Venture Capital, Inc. for the purchase common stock
totaling 6,571,428 shares, as follows: (i) a warrant to purchase 2,000,000
shares of common stock, exercisable upon issuance in connection with the
purchase agreement between the company and this company, dated Decemnber 8,
2000, at a price equal to the lesser of (a) 40% of the closing bid price of the
stock on that date ($0.44), or (b) 40% of the average five day closing bid price
as of the effective date of this registration statement; (ii) a warrant to
purchase 1,000,000 shares of common stock on a pro rata basis in conjunction
with draw downs under that agreement, exercisable at the close bid price at the
date of each draw down; and (iii) a warrant to purchase 3,571,428 shares of
common stock, exercisable at $0.08 per share as calculated under that addendum
(dated October 23, 2000) to a previous stock purchase agreement between the
parties, dated September 28, 1999.

116

(16) On November 7, 2000, the company's board of directors approved
an Amended and Restated Stock Incentive Plan (Amendment No. 3) for the purpose
of granting stock options and restricted stock awards to employees and non-
employees of the company. A total of 11,200,000 options issued in December 2000
under this plan.

(17) From August 2, 2000 through December 19, 2000, the company
issued a total of 3,259,454 shares to 40 individuals and companies as payment of
interest under various short-term loans made to the company. The company
intends to review the amount of shares paid under each promissory note to insure
that applicable state usury laws were complied with.

(18) During fiscal 2000, the company issued a total of 2,093,565
shares of common stock upon the exercise of warrants at $0.40 per share for a
total consideration of approximately $835,000 (approximately $771,000
[1,993,488] of which consisted of services rendered to the company).

The company made the following sales of unregistered securities during
the fiscal year ending December 31, 2001:

(1) On January 5, 2001, the company issued a warrant covering the
purchase of 1,000,000 shares of common stock, exercisable upon issuance at $1.00
per share through June 30, 2002, to an individual in connection with the
repayment of a $60,000 loan (plus accrued interest) made to the company.

(2) On January 15, 2001, the company issued 3,000,000 shares of
common stock to Paul Egan in connection with completing the acquisition of Top
Sports, S.A. by the company.

(3) On January 12, 2001 and February 28, 2001, the company issued a
total of 16,800,000 shares of common stock to Richard Epstein related to
consulting agreements. A total of 5,000,000 shares relate to satisfaction of a
company obligation to Mr. Epstein totaling $983,475 at December 31, 2000. The
remaining 11,800,000 shares were issued in advance and has been recorded by the
company as prepaid consulting services during this period approximating
$4,147,000.

(4) On February 2, 2001, the company issued 50,000 shares of common
stock and a warrant for the purchase of 50,000 shares of common stock,
exercisable upon issuance through June 30, 2002. These shares and warrant were
issued in connection with a penalty in connection with the non-payment of a loan
to the company.

(5) On March 1, 2001, the company issued 12,307,625 shares of common
stock purchased for cash under a common stock purchase agreement with Alpha
Venture Capital, Inc. at a price equal to 82% of the average closing bid price
for the five business days immediately following a put notice to the company.

117

(6) On March 15, 2001, the company issued 200,000 shares of common
stock to one individual in connection with employee compensation.

(7) On March 21, 2001, the company issued 25,000 shares of common
stock to one individual in connection with consulting services to be rendered to
the company valued at $3,731.

(8) On March 23, 2001, the company issued a total of 1,000,000 shares
of common stock to two individuals for consulting services rendered to the
company valued at $137,448.

(9) On May 24, 2001, the company issued 1,000,000 shares of common
stock to one individual in connection with employee compensation.

(10) Between July 12, 2001 and July 16, 2001, the company issued a
total of 32,789,657 shares of common stock to a total of 26 individuals and
companies as partial repayment of principal and interest on loans to the company
totaling $32,789,657, accruing interest at the rate of 10% per annum.

(11) On October 6, 2001, the company issued 21,000,000 shares of
common stock to one individual for operating capital in the amount of $630,000.

(d) General Comments.

No commissions or fees were paid in connection with these sales. All
of the above sales were undertaken pursuant to the limited offering exemption
from registration under the Securities Act of 1933 as provided under Regulation
D by the fact that:

. the sales were made to sophisticated investors as defined in Rule 502;

. the information specified in paragraph (b)2(ii)(B) and paragraph
(b)(2)(ii)(C) of this section was provided to each investor;

. the company gave each purchaser the opportunity to ask questions and
receive answers concerning the terms and conditions of the offering
and to obtain any additional information which the Company possessed
or could acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information furnished;

. at a reasonable time prior to the sale of securities, the company
advised the purchasers of the limitations on resale in the manner
contained in paragraph Rule 502(d)2 of this section;

. neither the company nor any person acting on its behalf sold the
securities by any form of general solicitation or general advertising;
and

. the company exercised reasonable care to assure that the purchasers of
the securities are not underwriters within the meaning of section
-------
2(11) of the Securities Act of 1933 in compliance with Rule 502(d).
-----

118

ITEM 27. EXHIBITS

The exhibits required by Item 601 of Regulation S-B, and an index
thereto, are attached.

ITEM 28. UNDERTAKINGS

The undersigned company hereby undertakes to:

(a) (1) File, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:

(i) Include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement; and Notwithstanding the
forgoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospects filed with the U.S. Securities and Exchange Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.

(iii) Include any additional or changed material information on
the plan of distribution.

(2) For determining liability under the Securities Act of 1933, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial bona fide offering.

(3) File a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.

(d) Provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each
purchaser.

(e) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer

119

of expenses incurred or paid by a director, officer or controlling person of the
small business issuer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the small business issuer will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorize, in the City of San Pedro, State of California, on October 9, 2001.

eConnect

By: /s/ Thomas S. Hughes
----------------------
Thomas S. Hughes, President

120

Special Power of Attorney

The undersigned constitute and appoint Thomas S. Hughes their true and lawful
attorney-in-fact and agent with full power of substitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Form SB-2 registration
statement, and to file the same with all exhibits thereto, and all documents in
connection therewith, with the U.S. Securities and Exchange Commission, granting
such attorney-in-fact the full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that such attorney-in-fact may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
date indicated:

Signature Title Date
----------------------------------------------------------------------------------

/s/ Thomas S. Hughes President/Chief Executive Officer/ October 9, 2001
--------------------------- Director
Thomas S. Hughes

/s/ Jack M. Hall Secretary/Director October 9, 2001
---------------------------
Jack M. Hall

/s/ Laurence Donoghue Director October 9, 2001
---------------------------
Laurence Donoghue

/s/ Mary Lou Garcia Accounting Manager (principal October 9, 2001
--------------------------- financial and accounting officer)
Mary Lou Garcia

121

EXHIBIT INDEX

Exhibit No. Description
----------- -----------

2 Agreement and Plan of Merger, dated June 1, 1999 (incorporated by
reference to Exhibit 2 of the Form 10-KSB filed on May 9, 2000).

3.1 Articles of Incorporation, March 8, 1999 (incorporated by reference to
Exhibit 3.1 of the Form SB-2/A filed on July 22, 1999).

3.2 Certificate of Amendment of Articles of Incorporation, dated May 25,
1999 (incorporated by reference to Exhibit 3.2 of the Form SB-2/A
filed on July 22, 1999).

3.3 Certificate of Amendment of Articles of Incorporation, dated August
20, 1999 (incorporated by reference to Exhibit 3.3 of the Form SB-2/A
filed on September 3, 1999).

3.4 Certificate of Amendment of Articles of Incorporation, dated November
20, 2000 (incorporated be reference to Exhibit 3.4 of the Form SB-2/A
filed on May 3, 2001).

3.5 Certificate of Amendment of Articles of Incorporation, dated July 13,
2001 (incorporated by reference to Exhibit 3.5 of the Form SB-2 filed
July 30, 2001).

3.6 Bylaws, dated May 14, 1999 (incorporated by reference to Exhibit 3.3
of the Form SB-2/A filed on July 22, 1999).

3.7 Amended and Restated Bylaws, dated September 15, 2000 (incorporated by
reference to Exhibit 3.5 of the Form 10-QSB filed on November 14,
2000).

4.1 Class A Warrant Agreement (incorporated by reference to Exhibit 4.2 of
the Form S-1 filed on October 28, 1993).

4.2 Retainer Stock Plan for Non-Employee Directors and Consultants, dated
April 26, 1999 (incorporated by reference to Exhibit 4.1 of the Form
S-8 filed on May 14, 1999).

4.3 Consulting and Service Agreement between the company and James Wexler,
dated May 20, 1998 (incorporated by reference to Exhibit 4.2 of the
Form S-8 filed on May 14, 1999).

4.4 Consulting Agreement between the company and Rogel Patawaran, dated
March 18, 1998 (incorporated by reference to Exhibit 4.3 of the Form
S-8 filed on May 14, 1999).

122

4.5 Consulting Agreement between the company and David Ninci, dated
February 22, 1999 (incorporated by reference to Exhibit 4.4 of the
Form S-8 filed on May 14, 1999).

4.6 Consulting Agreement between the company and Harry Hargens, dated
January 17, 1999 (incorporated by reference to Exhibit 4.5 of the Form
S-8 filed on May 14, 1999).

4.7 Consulting Agreement between the company and Charlene Charles, dated
March 10, 1999 (incorporated by reference to Exhibit 4.6 of the Form
S-8 filed on May 14, 1999).

4.8 Internet Consulting Services Agreement between the company and Steve
Goodman, dated May 3, 1999 (incorporated by reference to Exhibit 4.2
of the Form S-8 filed on July 2, 1999).

4.9 Consulting Agreement between the company and Rogel Patawaran, dated
June 8, 1999 (incorporated by reference to Exhibit 4.3 of the Form S-8
filed on July 2, 1999).

4.10 Consulting and Service Agreement between the company and Edward
Wexler, dated May 20, 1999 (incorporated by reference to Exhibit 4.4
of the Form S-8 filed on July 2, 1999).

4.11 Consultant Agreement between the company and Richard Epstein, dated
June 3, 1999 (incorporated by reference to Exhibit 4.5 of the Form S-8
filed on July 2, 1999).

4.12 Consultant Agreement between the company and Ezzat Jallad, dated March
10, 1999 (incorporated by reference to Exhibit 4.6 of the Form S-8
filed on July 2, 1999).

4.13 Consultant Agreement between the company and Shar Offenberg, dated
June 20, 1998 (incorporated by reference to Exhibit 4.7 of the Form S-
8 filed on July 2, 1999).

4.14 Consultant Agreement between the company and Richard Parnes, dated May
10, 1999 (incorporated by reference to Exhibit 4.8 of the Form S-8
filed on July 2, 1999).

4.15 Consulting Contract between the company and Robert Bragg, dated August
19, 1999 (incorporated by reference to Exhibit 4.2 of the Form S-8
filed on August 31, 1999).

123

4.16 Consultant Agreement between the company and Dominique Einhorn, dated
August 9, 1999 (incorporated by reference to Exhibit 4.3 of the Form
S-8 filed on August 31, 1999).

4.17 Consultant Agreement between the company and Richard Epstein, dated
August 16, 1999 (incorporated by reference to Exhibit 4.4 of the Form
S-8 filed on August 31, 1999).

4.18 Consultant Agreement between the company and Jane Hauser, dated August
16, 1999 (incorporated by reference to Exhibit 4.5 of the Form S-8
filed on August 31, 1999).

4.19 Form of Debenture issued by the company to CALP II, LP, dated June 9,
1999 (incorporated by reference to Exhibit 4.3 of the Form SB-2/A
filed on July 22, 1999).

4.20 Registration Rights Agreement between the company and CALP II, LP,
dated June 9, 1999 (incorporated by reference to Exhibit 4.2 of the
Form SB-2/A filed on July 22, 1999).

4.21 Form of Warrant issued by the company to CALP II, LP, dated June 9,
1999 (incorporated by reference to Exhibit 4.4 of the Form SB-2/A
filed on July 22, 1999).

4.22 Common Stock Purchase Agreement between the company and Alpha Venture
Capital, Inc., dated September 28, 1999 (incorporated by reference to
Exhibit 4.2 of the Form SB-2 POS filed on September 29, 1999).

4.23 Registration Rights Agreement between the company and Alpha Venture
Capital, Inc., dated September 28, 1999 (incorporated by reference to
Exhibit 4.3 of the Form SB-2 POS filed on September 29, 1999).

4.24 Warrant issued by the company to Alpha Venture Capital, Inc., dated
September 28, 1999 (incorporated by reference to Exhibit 4.4 of the
Form SB-2 POS filed on September 29, 1999).

4.25 General Form of Warrant issued by the company to various individuals
and companies (incorporated by reference to Exhibit 4.25 of the Form
SB-2/A filed on May 3, 2001).

4.26 Amended and Restated Retainer Stock Plan for Non-Employee Directors
and Consultants, dated February 1, 2000 (incorporated by reference to
Exhibit 4.1 of the Form S-8 filed on February 10, 2000).

124

4.27 Consulting Services Agreement between the company and Laurel-Jayne
Yapel Manzanares, dated February 1, 2000 (incorporated by reference to
Exhibit 4.2 of the Form S-8 filed on February 10, 2000).

4.28 Consulting Services Agreement between the company and Marcine Aniz
Uhler, dated February 1, 2000 (incorporated by reference to Exhibit
4.3 of the Form S-8 filed on February 10, 2000).

4.29 Consulting Services Agreement between the company and William Lane,
dated February 7, 2000 (incorporated by reference to Exhibit 4.4 of
the Form S-8 filed on February 10, 2000).

4.30 Consulting Services Agreement between the company and Earl Gilbrech,
dated February 7, 2000 (incorporated by reference to Exhibit 4.5 of
the Form S-8 filed on February 10, 2000).

4.31 Consulting Services Agreement between the company and Dominique
Einhorn, dated February 7, 2000 (incorporated by reference to Exhibit
4.6 of the Form S-8 filed on February 10, 2000).

4.32 Consulting Services Agreement between the company and Edward James
Wexler, dated February 7, 2000 (incorporated by reference to Exhibit
4.7 of the Form S-8 filed on February 10, 2000).

4.33 Consulting Agreement between the company and R. Scott Hatfield, dated
March 6, 2000 (incorporated by reference to Exhibit 4.32 of the Form
SB-2 POS filed on September 12, 2000).

4.34 Consulting Services Agreement between the company and Chris Jensen,
dated April 24, 2000 (incorporated by reference to Exhibit 4.33 of the
Form SB-2 POS filed on September 12, 2000).

4.35 Consulting Agreement between the company and Robert Graham, dated May
11, 2000 (incorporated by reference to Exhibit 4.34 of the Form SB-2
POS filed on September 12, 2000).

4.36 Consulting Agreement between the company and Richard Epstein, dated
May 20, 2000 (incorporated by reference to Exhibit 4.35 of the Form
SB-2 POS filed on September 12, 2000).

4.37 Warrant Agreement between the company, GunnAllen Financial, Inc., and
David Kern Peteler, dated May 24, 2000 (incorporated by reference to
Exhibit 4.43 of the Form 10-QSB filed on November 14, 2000).

125

4.38 Consulting Agreement between the company and Richard Epstein, dated
June 2, 2000 (incorporated by reference to Exhibit 10.1 of the Form S-
8 filed on July 10, 2000).

4.39 Consulting Services Agreement between the company and Rogel Patawaran,
dated June 2, 2000 (incorporated by reference to Exhibit 10.2 of the
Form S-8 filed on July 10, 2000).

4.40 Consulting Agreement between the company and Elle Travis, dated June
2, 2000 (incorporated by reference to Exhibit 10.3 of the Form S-8
filed on July 10, 2000).

4.41 Consulting Agreement between the company and Charles Yourshaw, dated
June 5, 2000 (incorporated by reference to Exhibit 10.1 of the Form S-
8 filed on July 10, 2000).

4.42 Consulting Agreement between the company and Nick Gorenc, dated June
5, 2000 (incorporated by reference to Exhibit 10.2 of the Form S-8
filed on July 10, 2000).

4.43 Consulting Agreement between the company and Louis Sabatasso, dated
June 10, 2000 (incorporated by reference to Exhibit 10.1 of the Form
S-8 filed on July 10, 2000).

4.44 Consulting Agreement between the company and Laurie Belger, dated June
10, 2000 (incorporated by reference to Exhibit 10.2 of the Form S-8
filed on July 10, 2000).

4.45 Consulting Services Agreement between the company and Richard Epstein,
dated July 21, 2000 (incorporated by reference to Exhibit 4.1 of the
Form S-8 filed on October 10, 2000).

4.46 Amended and Restated Stock Incentive Plan, dated September 1, 2000
(incorporated by reference to Exhibit 4.1 of the Form S-8 filed on
September 12, 2000).

4.47 Amended and Restated Non-Employee Directors and Consultants Retainer
Stock Plan (Amendment No. 2), dated September 1, 2000 (incorporated by
reference to Exhibit 4.2 of the Form S-8 filed on September 12, 2000).

4.48 Consulting Services Agreement between the company and Richard Epstein,
dated September 6, 2000 (incorporated by reference to Exhibit 4.3 of
the Form S-8 filed on September 12, 2000).

126

4.49 Consulting Services Agreement between the company and Chris Jensen,
dated September 6, 2000 (incorporated by reference to Exhibit 4.4 of
the Form S-8 filed on September 12, 2000).

4.50 Consulting Services Agreement between the company and Jim Pugh, dated
September 12, 2000 (incorporated by reference to Exhibit 4.2 of the
Form S-8 filed on September 28, 2000).

4.51 Consulting Services Agreement between the company and Darrel Dixon,
dated September 14, 2000 (incorporated by reference to Exhibit 4.3 of
the Form S-8 filed on September 28, 2000).

4.52 Consulting Services Agreement between the company and Robert Graham,
dated September 14, 2000 (incorporated by reference to Exhibit 4.4 of
the Form S-8 filed on September 28, 2000).

4.53 Consulting Services Agreement between the company and David Weiler,
dated September 14, 2000 (incorporated by reference to Exhibit 4.2 of
the Form S-8 filed on October 10, 2000).

4.54 Consulting Services Agreement between the company and Nathaniel Adams,
dated September 18, 2000 (incorporated by reference to Exhibit 4.5 of
the Form S-8 filed on September 28, 2000).

4.55 Consulting Services Agreement between the company and Chris Jensen,
dated October 12, 2000 (incorporated by reference to Exhibit 4.3 of
the Form S-8 filed on October 10, 2000).

4.56 Consulting Services Agreement between the company and Quinn Brady,
dated October 12, 2000 (incorporated by reference to Exhibit 4.4 of
the Form S-8 filed on October 10, 2000).

4.57 Addendum To Existing Common Stock Purchase Agreement Dated September
28, 1999 between the company and Alpha Venture Capital, Inc., dated
October 23, 2000 (incorporated by reference to Exhibit 4.57 of the
Form SB-2/A filed on May 3, 2001).

4.58 Amended and Restated Non-Employee Directors and Consultants
Retainer Stock Plan (Amendment No. 3), dated November 1, 2000
(incorporated by reference to Exhibit 4.2 of the Form S-8 filed on
November 20, 2000).

4.59 Consulting Services Agreement between the company and Michael Sitrick,
dated November 4, 2000 (incorporated by reference to Exhibit 4.3 of
the Form S-8 filed on November 20, 2000).

127

4.60 Consulting Services Agreement between the company and Paul Francis
Peter Egan Pugh, dated November 4, 2000 (incorporated by reference to
Exhibit 4.4 of the Form S-8 filed on November 20, 2000).

4.61 Consulting Services Agreement between the company and James Wong,
dated November 4, 2000 (incorporated by reference to Exhibit 4.5 of
the Form S-8 filed on November 20, 2000).

4.62 Consulting Services Agreement between the company and Matthew Owens,
dated November 4, 2000 (incorporated by reference to Exhibit 4.2 of
the Form S-8 filed on December 12, 2000).

4.63 Consulting Services Agreement between the company and Marisa Yance,
dated November 4, 2000 (incorporated by reference to Exhibit 4.3 of
the Form S-8 filed on December 12, 2000).

4.64 Amended and Restated Stock Incentive Plan (Amendment No. 2), dated
November 7, 2000 (incorporated by reference to Exhibit 4.1 of the Form
S-8 filed on November 20, 2000).

4.65 Consulting Services Agreement between the company and Tony Sandalier,
dated November 8, 2000 (incorporated by reference to Exhibit 4.6 of
the Form S-8 filed on November 20, 2000).

4.66 Consulting Services Agreement between the company and Chi-Yuan Chiu,
dated November 8, 2000 (incorporated by reference to Exhibit 4.7 of
the Form S-8 filed on November 20, 2000).

4.67 Consulting Services Agreement between the company and Hsien-Hsiang
Tsai, dated November 8, 2000 (incorporated by reference to Exhibit 4.8
of the Form S-8 filed on November 20, 2000).

4.68 Consulting Services Agreement between the company and Richard Epstein,
dated November 8, 2000 (incorporated by reference to Exhibit 4.9 of
the Form S-8 filed on November 20, 2000).

4.69 Consulting Services Agreement between the company and Bill West, dated
November 8, 2000 (incorporated by reference to Exhibit 4.10 of the
Form S-8 filed on November 20, 2000).

4.70 Consulting Services Agreement between the company and Clinton Wong,
dated November 8, 2000 (incorporated by reference to Exhibit 4.11 of
the Form S-8 filed on November 20, 2000).

128

4.71 Consulting Agreement between the company and Antonio Cardenas Jr.,
dated November 9, 2000 (incorporated by reference to Exhibit 4.12 of
the Form S-8 filed on November 20, 2000).

4.72 Consulting Services Agreement between the company and William
Haseltine, dated November 29, 2000 (incorporated by reference to
Exhibit 4.4 of the Form S-8 filed on December 12, 2000).

4.73 Consulting Services Agreement between the company and Nick Gorenc,
dated November 29, 2000 (incorporated by reference to Exhibit 4.5 of
the Form S-8 filed on December 12, 2000).

4.74 Consulting Services Agreement between the company and Peter Kokiousis,
dated November 29, 2000 (incorporated by reference to Exhibit 4.6 of
the Form S-8 filed on December 12, 2000).

4.75 Consulting Services Agreement between the company and Kris Narayan,
dated November 29, 2000 (incorporated by reference to Exhibit 4.7 of
the Form S-8 filed on December 12, 2000).

4.76 Common Stock Purchase Agreement between the company and Alpha Venture
Capital, Inc., dated December 8, 2000 (incorporated by reference to
Exhibit 4.76 of the Form SB-2/A filed on May 3, 2001).

4.77 Warrant to Purchase Shares of Common Stock, issued by the company to
Alpha Venture Capital, Inc., dated December 8, 2000 (incorporated by
reference to Exhibit 4.77 of the Form SB-2/A filed on May 3, 2001).

4.78 Addendum to Common Stock Purchase Agreement between the company and
Alpha Venture Capital, Inc., dated February 13, 2001 (incorporated by
reference to Exhibit 4.78 of the Form SB-2/A filed on May 3, 2001).

4.79 Line of Credit Agreement between the company and Alliance Equities,
dated March 5, 2001 (incorporated by reference to Exhibit 4.79 of the
Form SB-2/A filed on May 3, 2001).

4.80 Debenture issued by the company to Alliance Equities, dated March 20,
2001 (incorporated by reference to Exhibit 4.80 of the Form SB-2/A
filed on May 3, 2001).

4.81 Amended and Restated Non-Employee Directors and Consultants
Retainer Stock Plan (Amendment No. 4), dated April 27, 2001
(incorporated by reference to Exhibit 4.1 of the Form S-8 filed on May
2, 2001).

129

4.82 Consulting Services Agreement between the company and Francis Mecoli,
dated March 19, 2001 (incorporated by reference to Exhibit 4.2 of the
Form S-8 filed on May 2, 2001).

4.83 Consulting Services Agreement between the company and William West,
dated March 20, 2001 (incorporated by reference to Exhibit 4.3 of the
Form S-8 filed on May 2, 2001).

4.84 Consulting Services Agreement between the company and Marc Tow, dated
March 20, 2001 (incorporated by reference to Exhibit 4.4 of the Form
S-8 filed on May 2, 2001).

4.85 Consulting Services Agreement between the company and Felix Campos,
dated March 20, 2001 (incorporated by reference to Exhibit 4.5 of the
Form S-8 filed on May 2, 2001).

4.86 Consulting Services Agreement between the company and Marc Christ,
dated March 20, 2001 (incorporated by reference to Exhibit 4.6 of the
Form S-8 filed on May 2, 2001).

4.87 Consulting Services Agreement between the company and Thomas A.
Sandelier, dated March 20, 2001 (incorporated by reference to Exhibit
4.7 of the Form S-8 filed on May 2, 2001).

4.88 Consulting Services Agreement between the company and Prince Saud Al-
Faisal, dated March 20, 2001 (incorporated by reference to Exhibit 4.8
of the Form S-8 filed on May 2, 2001).

4.89 Consulting Services Agreement between the company and Ralph DiFelice,
dated March 20, 2001 (incorporated by reference to Exhibit 4.9 of the
Form S-8 filed on May 2, 2001).

4.90 Common Stock Purchase Agreement between the company and Alpha Venture
Capital, Inc., dated October 6, 2001 (incorporated by reference to the
SB-2 filed on October 9, 2001).

5 Opinion Re: Legality (incorporated by reference to Exhibit 5 of the
Form SB-2 filed July 30, 2001).

10.1 Promissory Note between Electronic Transactions & Technologies and
Unipay, Inc., dated April 26, 1999 (incorporated by reference to
Exhibit 10.5 of the Form 10-KSB filed on May 9, 2000).

10.2 Joint Venture Agreement between the company and First Entertainment
Holding Corp., dated April 29, 1999 (incorporated by reference to
Exhibit 10.6 of the Form 10-KSB filed on May 9, 2000).

130

10.3 Letter of Commitment between the company and Rogel Technologies, dated
May 6, 1999 (incorporated by reference to Exhibit 2 to the Form 8-K
filed on November 15, 1999).

10.4 Acquisition Agreement between the company and eBet.com, Inc., dated
August 12, 1999 (incorporated by reference to Exhibit 2 to the Form 8-
K/A filed on November 15, 1999).

10.5 Consulting Agreement between the company and eMarkit, Incorporated,
dated August 16, 1999 (incorporated by reference to Exhibit 10.9 of
the Form 10-KSB filed on May 9, 2000).

10.6 Stock Exchange Agreement between the company, La Empresa Ranco
Plasticos Limitada, Michael Lanes, and Jamie Ligator, dated August 31,
1999 (incorporated by reference to Exhibit 2.1 to the Form 8-K filed
on November 16, 1999).

10.7 Amendment to Agreement to License Assets dated February 18, 1997
between the company, Electronic Transactions & Technologies, and James
Clinton, dated September 1, 1999 (incorporated by reference to Exhibit
10.7 of the Form SB-2/A filed on May 3, 2001).

10.8 Agreement and Plan of Acquisition between the company and PowerClick,
Inc., dated September 9, 1999 (incorporated by reference to Exhibit
10.11 of the Form 10-KSB filed on May 9, 2000).

10.9 Consulting Agreement between the company and International Investor
Relations Group, Inc., dated September 24, 1999 (incorporated by
reference to Exhibit 10.12 of the Form 10-KSB filed on May 9, 2000).

10.10 Agreement between the company and Kanakaris Communications, dated
October 21, 1999 (incorporated by reference to Exhibit 10.13 of the
Form 10-KSB filed on May 9, 2000).

10.11 Letter of Commitment between the company and Rogel Technologies, dated
October 23, 1999 (incorporated by reference to Exhibit 10.14 of the
Form 10-KSB filed on May 9, 2000).

10.12 Capital Contribution Agreement between the company and SafeTPay.com,
dated November 5, 1999 (incorporated by reference to Exhibit 10.15 of
the Form 10-KSB filed on May 9, 2000).

10.13 Agreement between the company and Rogel Technologies, dated November
23, 1999 (incorporated by reference to Exhibit 10.16 of the Form 10-
KSB filed on May 9, 2000).

131

10.14 Contract of Partnership between the company and Top Sports, S.A.,
dated November 20, 1999 (incorporated by reference to Exhibit 10.17 of
the Form 10-KSB filed on May 9, 2000).

10.15 Agreement between the company and Alliance Equities, dated November
29, 1999 (incorporated by reference to Exhibit 10.18 of the Form 10-
KSB filed on May 9, 2000).

10.16 Secured Promissory Note issued to the company by Electronic
Transactions & Technologies and Thomas S. Hughes, dated December 1,
1999 (incorporated by reference to Exhibit 10.19 of the Form 10-KSB
filed on May 9, 2000).

10.17 Security Agreement between the company, Electronic Transactions &
Technologies, and Thomas S. Hughes, dated December 1, 1999
(incorporated by reference to Exhibit 10.20 of the Form 10-KSB filed
on May 9, 2000).

10.18 Business Cooperation Agreement between the company and Top Sports,
S.A., dated December 9, 1999 (incorporated by reference to Exhibit
10.21 of the Form 10-KSB filed on May 9, 2000).

10.19 Consulting Agreement between the company and Michael Leste, dated
December 10, 1999 (incorporated by reference to Exhibit 10.22 of the
Form 10-KSB filed on May 9, 2000).

10.20 Consulting Agreement between the company and Michael Kofoed, dated
December 10, 1999 (incorporated by reference to Exhibit 10.23 of the
Form 10-KSB filed on May 9, 2000).

10.21 Agreement between the company and Top Sports S.A., dated December 16,
1999 (incorporated by reference to Exhibit 10.24 of the Form 10-KSB
filed on May 9, 2000).

10.22 Agreement between the company and eMarkit, Incorporated, dated
December 29, 1999 (incorporated by reference to Exhibit 10.25 of the
Form 10-KSB filed on May 9, 2000).

10.23 Shares Sales Contract between the company and Paul Egan, dated January
1, 2000 (incorporated by reference to Exhibit 10.26 of the Form SB-2
POS filed on September 12, 2000).

10.24 Consultancy Agreement between the company and Paul Egan, dated January
1, 2000 (incorporated by reference to Exhibit 10.2 of the Form 10-KSB
filed on April 25, 2001).

132

10.25 Fee Agreement between the company and Red Iguana Trading Company,
Inc., dated January 2, 2000 (incorporated by reference to Exhibit
10.26 of the Form 10-QSB filed on May 30, 2000).

10.26 Consulting Services Agreement between the company and Richard Epstein,
dated January 3, 2000 (incorporated by reference to Exhibit 10.4 of
the Form 10-KSB filed on April 25, 2001).

10.27 Assignment of eSportsbet between the company and PowerClick, Inc.,
dated January 7, 2000 (incorporated by reference to Exhibit 10.27 of
the Form 10-QSB filed on May 30, 2000).

10.28 Letter of Intent of Negotiation and Information Exchange between
eConnect2Trade.com, Incorporated, and Empire Financial Holdings,
Incorporated, dated January 21, 2000 (incorporated by reference to
Exhibit 10.28 of the Form 10-QSB filed on May 30, 2000).

10.29 Manufacturing Agreement between the company and Asia Pacific Micro,
Inc., dated January 21, 2000 (incorporated by reference to Exhibit
10.29 of the Form 10-QSB filed on May 30, 2000).

10.30 Consulting Services Agreement between the company and Boardwalk
Associates, Inc., dated January 26, 2000 (incorporated by reference to
Exhibit 10.30 of the Form 10-QSB filed on May 30, 2000).

10.31 Consulting Services Agreement between the company and Coldwater
Capital L.L.C., dated January 26, 2000 (incorporated by reference to
Exhibit 10.31 of the Form 10-QSB filed on May 30, 2000).

10.32 Consultant Agreement between the company and Harvey M. Burstein, dated
February 2, 2000 (incorporated by reference to Exhibit 10.32 of the
Form 10-QSB filed on May 30, 2000).

10.33 Consultant Agreement between the company and Terrie Pham, dated
February 2, 2000 (incorporated by reference to Exhibit 10.33 of the
Form 10-QSB filed on May 30, 2000).

10.34 Software License, Development, and Maintenance Agreement (Dominican
Republic) between the company and eFunds Corporation, dated February
3, 2000 (incorporated by reference to Exhibit 10.34 of the Form 10-QSB
filed on May 30, 2000).

10.35 Agreement between the company and Burbank Coach Works, dated February
3, 2000 (incorporated by reference to Exhibit 10.35 of the Form 10-QSB
filed on May 30, 2000).

133

10.36 Software License, Development, and Maintenance Agreement (Ireland)
between the company and eFunds Corporation, dated February 4, 2000
(incorporated by reference to Exhibit 10.36 of the Form 10-QSB filed
on May 30, 2000).

10.37 Acquisition Agreement between the company and PowerClick, Inc., dated
February 9, 2000 (incorporated by reference to Exhibit 10.37 of the
Form 10-QSB filed on May 30, 2000).

10.38 Agreement between the company and Richard Epstein, dated February 12,
2000 (incorporated by reference to Exhibit 10.16 of the Form 10-KSB
filed on April 25, 2001).

10.39 Loan Agreement between the company and Richard Epstein, dated February
15, 2000 (incorporated by reference to Exhibit 10.38 of the Form 10-
QSB filed on May 30, 2000).

10.40 PocketPay Joint Venture Agreement between the company and Pilot Island
Publishing, Inc., dated March 1, 2000 (incorporated by reference to
Exhibit 10.39 of the Form 10-QSB filed on May 30, 2000).

10.41 Letter of Intent between the company and Real Solutions, Ltd., dated
March 9, 2000 (incorporated by reference to Exhibit 10.40 of the Form
10-QSB filed on May 30, 2000).

10.42 Consulting Agreement between the company and Ryan Kavanaugh, dated
March 10, 2000 (incorporated by reference to Exhibit 10.41 of the Form
10-QSB filed on May 30, 2000).

10.43 Amended Employment Agreement between the company and Stephen E.
Pazian, dated March 21, 2000 (incorporated by reference to Exhibit
10.42 of the Form 10-QSB filed on May 30, 2000).

10.44 Amended and Restated Employment Agreement between the company and
Stanley C. Morris, dated March 22, 2000 (incorporated by reference to
Exhibit 10.43 of the Form 10-QSB filed on May 30, 2000).

10.45 China-Singapore-Hong Kong-Macao Joint Venture Agreement between the
company, and Raymond Kessler and Li-Wang Kessler, dated March 27, 2000
(incorporated by reference to Exhibit 10.44 of the Form 10-QSB filed
on May 30, 2000).

10.46 Amended and Restated Secured Promissory Note issued to the company by
Electronic Transactions & Technologies and Thomas S. Hughes, dated
March 31, 2000 (incorporated by reference to Exhibit 10.45 of the Form
10-QSB filed on May 30, 2000).

134

10.47 Amended and Restated Security Agreement between the company,
Electronic Transactions & Technologies, and Thomas S. Hughes, dated
March 31, 2000 (incorporated by reference to Exhibit 10.46 of the Form
10-QSB filed on May 30, 2000).

10.48 Master Service Agreement between the company and REAL Solutions, Ltd.,
dated April 13, 2000 (incorporated by reference to Exhibit 10.48 of
the Form SB-2 POS filed on September 12, 2000).

10.49 Consulting and Services Agreement between the company and Peters
Entertainment.com, Inc., dated April 14, 2000 (incorporated by
reference to Exhibit 10.49 of the Form SB-2 POS filed on September 12,
2000).

10.50 Letter of Intent between the company and National Data Funding
Corporation, dated May 22, 2000 (incorporated by reference to Exhibit
10.50 of the Form 10-QSB/A filed on October 19, 2000).

10.51 Agreement between the company and Top Sports, S.A., dated June 20,
2000 (incorporated by reference to Exhibit 10.51 of the Form 10-QSB/A
filed on October 19, 2000).

10.52 Asset Purchase Agreement between the company and Broadband Video,
Inc., dated October 4, 2000 (incorporated by reference to Exhibit
10.52 of the Form SB-2/A filed on May 3, 2001).

10.53 Agreement for Sale and Plan of Reorganization between the company and
National Data Funding Corporation, dated October 29, 2000
(incorporated by reference to Exhibit 10.53 of the Form SB-2/A filed
on May 3, 2001).

10.54 Letter of Intent between the company and eConnect Caribbean. S.A.,
dated March 12, 2001 (incorporated by reference to Exhibit 10.54 of
the Form SB-2/A filed on May 3, 2001).

10.55 Loan Agreement between the company and Perro Corp., dated March 26,
2001 (incorporated by reference to Exhibit 10.2 of the Form 10-QSB
filed on May 22, 2001).

10.56 Purchasing Agreement between the company and 3Pea Technologies, Inc.,
dated June 19, 2001 (incorporated by reference to Exhibit 10.56 of the
Form SB-2 filed on July 30, 2001).

16.1 Letter on change in certifying accountant (incorporated by reference
to Exhibit 16 of the Form 8-K filed on July 23, 1999).

16.2 Letter on change in certifying accountant (incorporated by reference
to Exhibit 16 of the Form 8-K filed on March 15, 2000).

135

21 Subsidiaries of the company (incorporated by reference to Exhibit 21
of the Form SB-2 POS filed on September 12, 2000).

23.1 Consent of LL. Bradford (see below).

23.2 Consent of Counsel (incorporated by reference to Exhibit 23.2 of the
Form SB-2 filed on July 30, 2000).

23.3 Consent of Ortega & Asociados (see below).

24 Special Power of Attorney (see signature page).

99.1 Patents: dated August 9, 1994, May 19, 1998, and September 15, 1998
(incorporated by reference to Exhibit 99.1 of the Form 10-KSB filed on
May 9, 2000).

99.2 Trademarks: filed March 31, 1997, February 16, 1999, May 6, 1999, May
24, 1999, June 3, 1999, June 4, 1999, August 12, 1999, and September
28, 1999 (incorporated by reference to Exhibit 99.2 of the Form 10-KSB
filed on May 9, 2000).

99.3 Trademark filed on March 15, 2000 (incorporated by reference to
Exhibit 99.3 of the Form 10-QSB filed on May 30, 2000).

136