U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO
______________
COMMISSION FILE NUMBER: 33-68570
eConnect
(Exact name of registrant as specified in its charter)
Nevada 43-1239043
(State or jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
2500 Via Cabrillo Marina, Suite 112, San Pedro, California 90731
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (310) 514-9482
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$0.001 Par Value; Class A Warrants
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) been
subject to such filing requirements for the past 90 days. Yes X No.
As of June 30, 2002, the Registrant had 41,497,059 shares of common stock
issued and outstanding (1).
Transitional Small Business Disclosure Format (check one): Yes No X.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS 3
BALANCE SHEET AS OF JUNE 30, 2002
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED JUNE 30, 2001
STATEMENT OF STOCKHOLDERS' DEFICIT FOR THE
THREE MONTHS ENDED JUNE 30, 2002
STATEMENTS OF CASH FLOW FOR THE THREE MONTHS
ENDED JUNE 30, 2001
NOTES TO FINANCIAL STATEMENTS
ITEM 2. PLAN OF OPERATION 8
PART II - OTHER INFORMATION 11
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURE
PART I.
ITEM 1. FINANCIAL STATEMENTS.
eCONNECT
BALANCE SHEET
(UNAUDITED)
June 30,
2002
------------------
ASSETS
Current assets
Inventory $ 187,264
------------------
Total current assets 187,264
Fixed assets, net 186,793
Other assets
Deposit 24,819
Other assets 76,655
------------------
Total other assets 101,474
------------------
Total assets $ 475,531
==================
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Bank overdraft $ 68,518
Accounts payable 2,411,327
Accrued liabilities 3,258,434
Due to related parties 2,606,647
Deferred revenue 6,291
Legal settlement liability 4,658,200
Advance on equity funding line --
Notes payable 1,394,868
------------------
Total current liabilities 14,404,285
------------------
Total liabilities 14,404,285
Commitments and contingencies --
Stockholders' deficit
Common stock; $.001 par value; 750,000,000
shares authorized, 7,989,583 shares
issued and outstanding 7,990
Additional paid-in capital 202,416,072
Accumulated deficit (216,352,816)
------------------
Total stockholders' deficit (13,928,754)
------------------
Total liabilities and stockholders' deficit $ 475,531
==================
See Accompanying Notes to Financial Statements
eCONNECT
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended June 30,
-------------------------------------------
2002 2001
-------------------- --------------------
Revenue $ 1,529 $ 425
Cost of revenue 909 --
-------------------- --------------------
Gross income 620 425
Operating expenses
Stock based compensation and expenses 43,960,385 2,410,142
Consulting 382,313 334,356
Public relations & advertising 166,351 8,430
Professional fees 65,116 223,799
Research and development (1,260) --
Wages 74,886 533,008
Amortization and depreciation 22,743 413,125
General and administrative 161,408 291,292
-------------------- --------------------
Total operating expenses 44,831,942 4,214,152
-------------------- --------------------
Net loss from operations (44,831,322) (4,213,727)
Other income (expense)
Interest income -- 18,659
Interest expense (30,870) (776,823)
Loss on investments -- (233,770)
Cancellation fee -- --
Legal settlement (4,010,650) (1,739,706)
-------------------- --------------------
Total other income (expense) (4,041,520) (2,731,640)
-------------------- --------------------
Net loss before provision for income taxes (48,872,842) (6,945,367)
Provision for income taxes -- --
-------------------- --------------------
Net loss from continuing operations (48,872,842) (6,945,367)
Discontinued operations
Loss from discontinued gaming operations
from January 1, 2001 to June 30, 2001
(net of income tax benefit which is fully
allowed for) -- (160,107.00)
Estimated loss on disposal of gaming operations
including losses during the phase-out period
(net of income tax benefit which is fully allowed for) -- (96,661.00)
-------------------------------------------
-- (256,768.00)
Net loss $ (48,872,842) $ (7,202,135)
==================== ====================
Earning per share
Loss from continuing operations $ (6.92) $ (2.55)
Loss from discontinued operations -- (0.06)
Loss from abandonment of gaming operations -- (0.04)
-------------------- --------------------
Net loss $ (6.92) $ (2.64)
==================== ====================
Basic and diluted weighted average
common shares outstanding 7,060,312 2,720,555
==================== ====================
Six months ended June 30,
-------------------------------------------
2002 2001
-------------------- --------------------
Revenue $ 9,011 1,604
Cost of revenue 4,304 --
-------------------- --------------------
Gross income 4,707 1,604
Operating expenses
Stock based compensation and expenses 45,559,008 4,376,193
Consulting 946,574 565,649
Public relations & advertising 372,590 83,160
Professional fees 81,084 341,657
Research and development 26,390 54,300
Wages 164,386 999,364
Amortization and depreciation 45,487 671,468
General and administrative 406,649 477,409
-------------------- --------------------
Total operating expenses 47,602,168 7,569,200
-------------------- --------------------
Net loss from operations (47,597,461) (7,567,596)
Other income (expense)
Interest income -- 18,659
Interest expense (76,975) (944,425)
Loss on investments -- (233,770)
Cancellation fee -- (526,212)
Legal settlement (4,014,909) (1,739,706)
-------------------- --------------------
Total other income (expense) (4,091,884) (3,425,454)
-------------------- --------------------
Net loss before provision for income taxes (51,689,345) (10,993,050)
Provision for income taxes (800) --
-------------------- --------------------
Net loss from continuing operations (51,690,145) (10,993,050)
Discontinued operations
Loss from discontinued gaming operations
from January 1, 2001 to June 30, 2001
(net of income tax benefit which is fully
allowed for) -- (215,086.00)
Estimated loss on disposal of gaming operations
including losses during the phase-out period
(net of income tax benefit which is fully allowed for) -- (96,661.00)
-------------------------------------------
-- (311,747.00)
Net loss $ (51,690,145) $ (11,304,797)
==================== ====================
Earning per share
Loss from continuing operations $ (8.96) $ (4.22)
Loss from discontinued operations -- (0.08)
Loss from abandonment of gaming operations -- (0.04)
-------------------- --------------------
Net loss $ (8.96) $ (4.34)
==================== ====================
Basic and diluted weighted average
common shares outstanding 5,767,809 2,607,943
==================== ====================
See Accompanying Notes to Financial Statements
eCONNECT
STATEMENT OF STOCKHOLDERS' DEFICIT
(UNAUDITED)
Common Stock Additional
-------------------------------
Number of Paid-in
Shares Amount Capital
-------------- -------------- -------------------
Balance, December 31, 2001 4,719,316 $ 4,719 $ 154,434,273
Common shares issued for cash to Alpha Venture
Capital, Inc., net of offering costs of $266,674 266,688 267 462,533
Common shares in satisfaction of advance
on equity funding line 16,667 17 49,983
Common shares issued for cash, net of
offering costs of $301,678 1,217,106 1,217 865,238
Common shares issued for cash related to exercise of
options and warrants, $0.01 278,000 278 282,972
Common shares issued in satisfaction of due to related party 153,846 154 299,846
Common shares issued for stock based compensation 1,056,201 1,056 1,580,705
Warrants granted for services -- -- 43,854,730
Common shares issued in satisfaction of notes payable,
including interest of $122,517 and accrued liabilities of $36,900 281,759 282 585,792
Net loss -- -- --
-------------- -------------- -------------------
Balance, June 30, 2002 7,989,583 $ 7,990 $ 202,416,072
============== ============== ===================
Total
Accumulated Stockholders'
Deficit Deficit
--------------------- ------------------
Balance, December 31, 2001 $ (164,662,671) $ (10,223,679)
Common shares issued for cash to Alpha Venture
Capital, Inc., net of offering costs of $266,674 -- 462,800
Common shares in satisfaction of advance
on equity funding line -- 50,000
Common shares issued for cash, net of
offering costs of $301,678 -- 866,455
Common shares issued for cash related to exercise of
options and warrants, $0.01 -- 283,250
Common shares issued in satisfaction of due to related party -- 300,000
Common shares issued for stock based compensation -- 1,581,761
Warrants granted for services -- 43,854,730
Common shares issued in satisfaction of notes payable,
including interest of $122,517 and accrued liabilities of $36,900 -- 586,074
Net loss (51,690,145) (51,690,145)
--------------------- ------------------
Balance, June 30, 2002 $ (216,352,816) $ (13,928,754)
===================== ==================
See Accompanying Notes to Financial Statements
eCONNECT
STATEMENTS OF CASH FLOW
(UNAUDITED)
For the six months ended June 30,
---------------------------------------------
2002 2001
------------------------ ---------------
Cash flows from operating activities:
Net loss $ (51,690,145) $ (11,304,797)
Adjustments to reconcile net loss to net
cash used by operating activities:
Amortization and depreciation 45,487 671,468
Stock based compensation 45,559,008 4,376,193
Cancellation fee -- 526,212
Loss on investments -- 233,770
Estimated loss on disposal of gaming operations -- 96,661
Changes in operating assets and liabilities:
Change in accounts receivable -- 14,157
Change in inventory (7,245) --
Change in other assets 293,854 86,610
Change in bank overdraft 38,295 --
Change in accounts payable 361,771 543,243
Change in accrued liabilities 223,117 173,495
Change in due to consultants -- 22,000
Change in due to related parties 293,878 1,465,639
Change in deferred revenue 5,617 --
Change in legal settlement liability 3,258,500 1,605,000
------------------ ---------------------
Net cash used by operating activities (1,617,863) (1,490,349)
Cash flows from investing activities:
Purchase of fixed assets (4,642) (31,884)
------------------ ---------------------
Net cash used by investing activities (4,642) (31,884)
Cash flows from financing activities:
Proceeds from issuance of notes payable 38,000 237,500
Principal payments on notes payable (28,000) (685,000)
Proceeds from issuance of common stock 1,612,505 1,956,726
------------------ ---------------------
Net cash provided by financing activities 1,622,505 1,509,226
------------------ ---------------------
Net change in cash -- (13,007)
Cash, beginning of period -- 13,007
------------------ ---------------------
Cash, end of period $ -- $ --
================== =====================
Supplemental disclosure of cash flow:
Cash paid for interest $ 46,105 $ 107,000
================== =====================
Cash paid for taxes $ -- $ --
================== =====================
Schedule of non-cash investing and financing activities:
6,250,000 common shares issued in satisfaction
of accounts payable $ 117,956 $ --
================== =====================
2,000,000 common shares issued in satisfaction
of due to related parties $ 30,780 $ --
================== =====================
500,000 common shares issued in satisfaction
of settlement liabilities $ 5,000 $ --
================== =====================
6,800,000 common shares issued in satisfaction of notes payable,
not including interest of $28,997 $ 97,921 $ --
================== =====================
15,384,615 common shares issued in satisfaction
of due to related parties $ 300,000 $ --
================== =====================
1,666,667 common shares issued in satisfaction
of advance on equity funding line $ 50,000 $ --
================== =====================
12,625,878 common shares issued in satisfaction of notes payable,
not including interest of $93,520 and accrued liabilities of $36,900 $ 175,000 $ --
================== =====================
2,501,538 common shares issued for receivable
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
================== =====================
See Accompanying Notes to Financial Statements
3
ITEM 2. PLAN OF OPERATION
Twelve Month Plan of Operation.
Currently, the Company has completed an updated version 2.0 of the Bank Eyes
Only System,
which allows merchants to receive transactions from consumers using the
eCashPad. These transactions are initially received by the "Bank Eyes Only"
System and then routed to certified credit card gateway processors
With the updated 2.0 Bank Eyes Only version, eCashPad users can pay directly at
the web merchant site without a shopping cart being required and additionally,
the Version 2 Platform can now support eCashCard cash payments.
The Company's web site is: www.econnectholdings.com. To date over 7,000 plus
eCashPads have been distributed into the United States marketplace with
scheduled shipments of 9,000 additional eCashPad now in process.
The company's eCashPad product and BEO processing service is positioned
effectively to take advantage of market needs for secure internet payments. The
company believes that "Bank Eyes Only" transaction processing system will
addresses Internet consumers' concerns regarding personal and financial
information security. The company has published the "Bank Eyes Only" Web
merchant install download documentation.
The marketing strategies for the Company is to acquire merchants through
internal profession sales force, external distributors, and managed resellers;
and acquire consumers through direct distribution, retail, and managed
resellers.
The Company is also working on expanding the usage of the eCashPad to effect
payments to any web merchant with a same as cash eCashCard payment. Consumers
will use their value added private labeled eCashPad to effect cash payments with
their eCashPad at the web merchant's page.
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 private label eCashPads by the vendors to
their consumer base. Further registration of "Bank Eyes Only" web merchants will
likewise be pursued by a team of specialists who understand a specific industry
such as phone, cable or collections. These team of specialists will develop the
pertinent "Bank Eyes Only" application for that industry and will cultivate
strategic alliances within their specific industry. The company is projecting an
average transaction revenue of 50 cents per usage which is charged to the web
merchant.
The company envisions the usage of the eCashPad to affect Internet cash
wagers by either ATM card with PIN or by chip card payments. The Company has
formed a subsidiary called eGS, Inc. to exploit this market. eGS will provide
support services for State Regulated and licensed Internet companies offering
games of skill and games of chance whereby players may use their eCashPad with
ATM card and PIN entry to effect on line cash transactions.
The Company is also diligently working on the usage of the eCashPad to effect
PIN on line debit with either a swiped ATM card or debit card. This is known as
a POS transaction and will enable immediate cash payments to the web merchant in
the same way a cash payment is made at the supermarket with a POS transaction.
The Company reasonably expects to see PIN debit begin this year but can not
guarantee such POS Internet payments to begin.
Capital Resources
The company expects to continue to generate enough cash for its operations and
business plan over the next twelve months. The company will from time to time
elect to access equity funding from Alpha. The company expects to continue and
increase production of revenues over the next 12 months from sales of eCashPads
and BEO Processing services. The Company will raise additional equity funding if
necessary.
Definitions
"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 through the Company's server 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. "Bank Eyes
Only" transactions are processed over the Internet without the cardholder
account information being stored at the merchant's web site, nor does the
merchant have access to the consumer's bank card information.
"eCashPad" refers to the smart card and magnetic stripe card read/write
terminal with encrypted PIN entry utilized for remote capture of transaction
authentication. The reader utilizes USB to connect to a Personal Computer
running the windows operating system. The reader is compliant with International
Standards Organization requirements for magnetic stripe and smart card payment
capture.
4
The company envisions the usage of the eCashPad to affect Internet
cash wagers by either ATM card with PIN or by chip card payments. The Company
recently formed a subsidiary called eGS, Inc. to exploit this market. eGS will
provide support services for State Regulated and licensed Internet companies
offering games of skill and games of chance whereby players may use their
eCashPad with ATM card and PIN entry to effect on line cash transactions. eGS is
being spun off by the Company to shareholders as of the record date. The
spin-off occurred on May 15, 2002.
Definitions
"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 through the Company's server 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. "Bank Eyes
Only" transactions are processed over the Internet without the cardholder
account information being stored at the merchant's web site, nor does the
merchant have access to the consumer's bank card information.
5
Forward Looking Statements.
This report 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."
6
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 7, 2002, the Securities and Exchange Commission filed a civil
complaint against eConnect, Thomas D. Hughes, Richard Epstein and Alliance
Equities, alleging that false press releases were made, and seeking injunctive
relief and disgorgement. The respondents are vigorously contesting the
allegations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Sales of Unregistered Securities.
Sales of unregistered securities occurring on or before March 31, 2002,
have been previously reported.
Shares
-------------------------------------
Issuance No. of Shares Total
Date Name Tradeability PRT No. Type Issued Consideration
- ---------------------------------------------------------------------------------------------------------------------------
4/1/2002 Perro Corp 144 Restricted Loan repayment 6,000,000 113,238
4/3/2002 Matt Katz Free Trading Consulting 250,000 5,243
4/3/2002 John Shapiro Free Trading Consulting 200,000 4,194
4/3/2002 Don Yarter Free Trading Consulting 200,000 4,194
4/3/2002 Mike Sitrick 144 Restricted Loan repayment 6,250,000 117,956
4/24/2002 Terry Roslington 144 Restricted Late fees 1,549,019 28,789
5/3/2002 Richard Epstein Free Trading Loan repayment 7,500,000 37,500
5/7/2002 William Haseltine 144 Restricted Consulting 600,000 9,234
5/7/2002 Mark Ninci Free Trading Loan repayment 800,000 13,680
5/7/2002 David Ninci Free Trading Consulting 150,000 2,565
5/7/2002 ET&T 144 Restricted Loan repayment 2,000,000 30,780
5/7/2002 Jackie Robinson 144 Restricted Legal Settlement 3,500,000 53,865
5/7/2002 Chris Jensen 144 Restricted Consulting 500,000 7,695
5/7/2002 Don Yarter 144 Restricted Consulting 500,000 7,695
5/20/2002 Shelly Weiser 144 Restricted Consulting 100,000 1,277
5/20/2002 Alliance Equities Free Trading Loan repayment 29,946,363 149,732
5/20/2002 Richard Epstein Free Trading Loan repayment 19,964,242 99,821
5/21/2002 Jackie Robinson Free Trading Legal Settlement 1,000,000 13,870
5/21/2002 Chris Jensen Free Trading Consulting 500,000 6,935
5/21/2002 Don Yarter Free Trading Consulting 500,000 6,935
5/21/2002 Chris Jensen 144 Restricted Consulting 500,000 6,242
5/21/2002 Don Yarter 144 Restricted Consulting 500,000 6,242
5/30/2002 Marylou Garcia Free Trading Consulting 600,000 7,164
5/30/2002 Raymond Russell Free Trading Consulting 1,000,000 11,940
5/30/2002 Jason Chester Free Trading Loan repayment 11,000,000 55,000
5/30/2002 Peter Bianchi Free Trading Consulting 20,000,000 238,800
6/11/2002 Joan Shapiro 144 Restricted Consulting 600,000 5,400
6/11/2002 Julie Saxton 144 Restricted Consulting 500,000 4,500
6/11/2002 Quinn Brady Free Trading Loan repayment 500,000 5,000
6/14/2002 Julie Saxton 144 Restricted Legal Settlement 5,000,000 45,000
6/14/2002 Julie Saxton 144 Restricted Legal Settlement 5,000,000 45,000
6/14/2002 Julie Saxton 144 Restricted Legal Settlement 5,000,000 45,000
6/14/2002 Frank Macac Free Trading Consulting 600,000 6,000
6/14/2002 Matthew Crawford Free Trading Consulting 600,000 6,000
6/17/2002 Richard Epstein Free Trading Loan repayment 9,965,111 49,826
6/18/2002 Anna Morris 144 Restricted Consulting 10,000 90
6/18/2002 John Morris Jr. 144 Restricted Consulting 10,000 90
6/18/2002 Goldstake Enterprises 144 Restricted Legal Settlement 5,000,000 45,000
6/18/2002 Goldstake Enterprises 144 Restricted Legal Settlement 5,000,000 45,000
6/18/2002 Goldstake Enterprises 144 Restricted Legal Settlement 5,000,000 45,000
6/18/2002 Alberto Barrera Free Trading Consulting 1,000,000 10,000
6/18/2002 Rick Wilson 144 Restricted Consulting 300,000 2,700
------------------------------------
159,694,735 1,400,190
------------------------------------
No commissions or fees were paid in connection with these sales.
These transactions were exempt from the registration requirements under the
Securities Act of 1933 based on Rule 506 of Regulation D, and similar provisions
under state securities laws and regulations 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 that the Company possessed or could acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
the 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;
.. 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).
7
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION.
Lawrence B. Donoghue submitted his resignation as director on August 7, 2002.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibits.
8
Exhibits included or incorporated by reference herein are set forth in
the attached Exhibit Index.
Reports on Form 8-K.
None
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
eConnect
Dated: August 20, 2002 By: /s/ Thomas S. Hughes
------------------------------------
Thomas S. Hughes, Chairman, CEO
EXHIBIT INDEX
Exhibit Description
No.
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).
9
EXHIBIT INDEX
Exhibit No. Dexcription
- ----------- -----------
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 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).
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 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).
10.3 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).
10.4 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).
10.5 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).
10.6 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).
10.7 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).
10.8 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).
10.9 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).
10.10 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).
10.11 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).
10.12 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).
10.13 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).
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).