SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2001
Commission File Number 000-30933
ECOM Digital Properties, Inc
---------------------------------------------
(Exact name of registrant as specified in its corporate charter)
NEVADA 35-1991305
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
334 Main Street Port Washington, New York 11050
----------------------------------------------------------------
(Address of principal executive offices)
(516) 767-8400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
----- -----
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of June 30, 2001
----- -------------------------------
Common Stock 63,028,900
ECOM Digital Properties, Inc
FORM 10-QSB
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
------------------------------
Consolidated Balance Sheets 1-5
Notes to Financial Statements 6-11
Item 1. The Company 12
Item 2. Management's Discussion and Analysis or Plan of Operation. 12-14
Marketing Strategy
Competition.
Research and Development.
Government Regulation.
Employees.
Offices.
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings. 14
Item 2. Changes in Securities and Use of Proceeds. 14
Item 3. Defaults Upon Senior Securities. 14
Item 4. Submission of Matters to Vote of Security holders. 14
Item 5. Other Information. 14
Item 6. Exhibits and Reports on Form 8-K. 14
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED FINANCIAL STATEMENTS
FOR THE QUARTER ENDED JUNE 30, 2001
Page 1
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2001 AND DECEMBER 31, 2000
ASSETS
June 30, December 31,
2001 2000
(Unaudited) (Audited)
----------- -----------
Current Assets
Cash $ 299 $ 9,995
Prepaid Expenses 5,000 5,000
---------- ----------
Total Current Assets 5,299 14,995
---------- ----------
Property and Equipment
Equipment 1,850 1,850
Office equipment 6,722 6,722
Furniture and fixtures 5,304 5,304
---------- ----------
13,876 13,876
Less: Accumulated depreciation (2,754) (1,596)
---------- ----------
Net Property and Equipment 11,122 12,280
---------- ----------
Other Assets
Goodwill, net of accumulated amortization
of $132,697 at June 30, 2001 and $79,618
at December 31, 2000 79,618 132,696
Website development costs, net of accumulated
amortization of $100,434 at June 30, 2001
and $60,261 at December 31, 2000 120,521 160,695
---------- ----------
Total Other Assets 200,139 293,391
---------- ----------
Total Assets $ 216,560 $ 320,666
========== ==========
See the accompanying notes to the condensed consolidated financial statements.
Page 2
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2001 AND DECEMBER 31, 2000
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
June 30, December 31,
2001 2000
(Unaudited) (Audited)
----------- -----------
Current Liabilities
Accounts payable $ 46,007 $ 54,523
Accrued interest payable - stockholder 31,284 -
Due to stockholder 5,700 521,397
---------- ----------
Total Current Liabilities 82,991 575,920
Note Payable - Stockholder 521,397 -
---------- ----------
Total Liabilities 604,388 575,920
---------- ----------
Stockholders' Equity (Deficit)
Common stock, $.001 par value
100,000,000 shares authorized,
and 63,028,900 shares issued and
outstanding at June 30, 2001
and December 31, 2000 63,029 63,029
Additional paid in capital 20,960 20,960
Deficit accumulated during the
development stage (471,817) (339,243)
---------- ----------
Net Stockholders' Equity (Deficit) (387,828) (255,254)
---------- ----------
Total Liabilities and Stockholders'
Equity (Deficit) $ 216,560 $ 320,666
========== ==========
See the accompanying notes to the condensed consolidated financial statements.
Page 3
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
Inception
Three Months Ended Six Months ended Through
June 30 June 30 June 30,
------------------------- -------------------------
2001 2000 2001 2000 2001
------------ ------------ ------------ ------------ ------------
Revenues $ - $ - $ - $ - $ -
---------- ---------- ---------- ---------- ----------
Expenses:
Advertising and promotion - - - - 22,296
Amortization expense 46,626 46,626 93,252 46,626 233,131
Commission expense - 1,500 - 1,500 7,250
Convention expenses - - - - 13,000
Depreciation expense 579 532 1,158 532 2,754
Office expenses 48 2,341 96 2,365 4,285
Professional services - 32,476 - 52,976 118,096
Rent 2,850 6,000 5,700 6,000 19,750
Repairs and maintenance - 1,195 - 1,195 1,930
Salaries - 4,200 - 4,200 32,337
Travel expense - - - - 12,520
---------- ---------- ---------- ---------- ----------
50,103 94,870 100,206 115,394 467,349
---------- ---------- ---------- ---------- ----------
Net Operating (Loss) (50,103) (94,870) (100,206) (115,394) (467,349)
---------- ---------- ---------- ---------- ----------
Other Income (Loss)
Other income - - - - 28,000
Interest expense (16,087) - (32,368) - (32,368)
---------- ---------- ---------- ---------- ----------
(16,087) - (32,368) - (4,368)
---------- ---------- ---------- ---------- ----------
Net (Loss) Before Taxes (66,190) (94,870) (132,574) (115,394) (471,717)
Income tax expense - (100) - (100) (100)
---------- ---------- ---------- ---------- ----------
Comprehensive (Loss) $ (66,190) $ (94,970) $ (132,574) $ (115,494) $ (471,817)
========== ========== ========== ========== ==========
Net Loss per Share $ (.001) $ (.002) $ (.002) $ (.002) $ (.02)
========== ========== ========== ========== ==========
Weighted average shares
Outstanding 63,028,900 59,528,900 63,028,900 58,053,581 25,410,392
========== ========== ========== ========== ==========
See the accompanying notes to the condensed consolidated financial statements.
Page 4
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
Inception
Three Months Ended Six Months ended Through
June 30 June 30 June 30,
------------------------- -------------------------
2001 2000 2001 2000 2001
------------ ------------ ------------ ------------ ------------
Net (loss) $ (66,190) $ (94,970) $ (132,574) $ (115,494) $ (471,817)
---------- ---------- ---------- ---------- ----------
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization 46,626 46,626 93,252 46,626 233,131
Depreciation 579 532 1,158 532 2,754
Stock issued for professional services
rendered - - - - 56,989
Expenses paid by shareholders - - - - 58,441
Changes in operating assets and liabilities:
Decrease (Increase) in prepaid expenses - 900 - - (5,000)
(Decrease) Increase in accounts payable (1,229) (8,513) (8,516) (3,113) 12,083
Increase in accrued interest payable - 15,816 31,284 - 31,284
Increase in due to stockholders 2,850 49,956 5,700 49,956 58,700
---------- ---------- ---------- ---------- ----------
Net Adjustments 64,642 89,501 122,878 94,001 448,382
---------- ---------- ---------- ---------- ----------
Net Cash (Used) by Operating
Activities (1,548) (5,469) (9,696) (21,493) (23,435)
---------- ---------- ---------- ---------- ----------
Cash Flows From Investing Activities:
Purchase of capital equipment - - - - (677)
Cash obtained from acquisition - - - 411 411
---------- ---------- ---------- ---------- ----------
Net Cash Provided by Investing
Activities - - - 411 (266)
---------- ---------- ---------- ---------- ----------
Cash Flows From Financing Activities:
Proceeds from sales of stock - - - - 24,000
---------- ---------- ---------- ---------- ----------
Net Cash Provided by Financing
Activities - - - - 24,000
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in cash (1,548) (5,469) (9,696) (21,082) 299
Cash at beginning of period 1,847 5,901 9,995 21,514 -
---------- ---------- ---------- ---------- ----------
Cash at end of period $ 299 $ 432 $ 299 $ 432 $ 299
========== ========== ========== ========== ==========
See the accompanying notes to the condensed consolidated financial statements.
Page 5
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
Inception
Three Months Ended Six Months ended Through
June 30 June 30 June 30,
------------------------- -------------------------
2001 2000 2001 2000 2001
------------ ------------ ------------ ------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
------------------------------------------------
Amount paid for interest $ - $ - $ - $ - $ -
========== ========== ========== ========== ==========
Amount paid for income taxes $ - $ - $ - $ - $ -
========== ========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES
----------------------------------------------------------------------
Assets and Liabilities Acquired in Acquisition of Shopmama.com for 3,000,000
shares or $3,000 of the Company's common stock.
Cash $ 411
Fixed assets 12,494
Goodwill 212,314
Website development costs 220,956
Accounts payable (33,924)
Due to shareholders (409,251)
The shareholders additionally purchased $705 of fixed assets during the quarter
ended June 30, 2000.
The Company converted an amount due to a shareholder for $521,397 into a note
payable at January 1, 2001.
See the accompanying notes to the condensed consolidated financial statements.
Page 6
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
PRESENTATION
Interim financial statements
In the opinion of management, the accompanying unaudited condensed
financial statements of ECOM Digital Properties, Inc. reflect all adjustments,
consisting of normal recurring accruals, necessary to present fairly their
financial position as of June 30, 2001, and their results of operations for the
three months ended June 30, 2001 and 2000, and inception to June 30, 2001, and
cash flows for the three months ended June 30, 2001 and 2000, and inception to
June 30, 2001. Pursuant to rules and regulations of the Securities and Exchange
Commission (the "SEC"), certain information and disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted from these condensed consolidated
financial statements unless significant changes have taken place since the end
of the most recent fiscal year. Accordingly, these unaudited condensed
consolidated financial statements should be read in conjunction with the audited
financial statements, notes to financial statements and the other information in
the Annual Report on Form 10-SB for the year ended December 31, 2000 (the
"10-SB") previously filed by ECOM Digital Properties, Inc. with the SEC.
The results of operations for the three months ended June 30, 2001 are not
necessarily indicative of the results of operations for the full year ending
December 31, 2001.
Business
ECOM Digital Properties, Inc. (the "Company") a Nevada corporation located
in Dickson, Tennessee, was incorporated on May 15, 1996. The Company was
organized to operate as a provider of web services for and on the Internet,
including but not limited to web page design, provider services, maintenance
sites, and technical support.
The Company has been in the development stage since its formation. It is
primarily engagedin financial planning, raising capital, and developing its
planned business activities.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of ECOM Digital
Properties, Inc. and its wholly owned subsidiary. All significant inter-company
balances and transactions have been eliminated in consolidation. Certain
reclassifications have been made to prior year financial statements to conform
to the current year's presentation.
Page 7
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
------------------------------------------------------------------------------
PRESENTATION - Continued
------------
Segment Reporting
During the year ended December 31, 1999, the Company adopted Statement No.
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"), which establishes standards for the way that public business
enterprises report information about operating segments. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. The Company has determined that, for the years ended
December 31, 2000 and 1999, it operated in one business segment. In addition,
through December 31, 2000, the Company's operations were conducted primarily in
the United States.
Product Development Costs
The Company has adopted SOP 98-1, Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use. SOP 98-1 establishes the
accounting practice for capitalization of certain costs incurred in connection
with the acquisition or development of computer software to be used for internal
purposes, including internal costs.
Costs incurred by the Company to develop and operate the Company's web site are
expensed as incurred.
Fair Value of Financial Instruments
The Company's financial instruments include amounts due to stockholders,
cash and cash equivalents, and accounts payable. The carrying amounts of cash
and cash equivalents, accounts payable, and amounts due to stockholders
approximate fair value, based upon their short-term nature.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Page 8
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
------------------------------------------------------------------------------
PRESENTATION - Continued
------------
Risks and Uncertainties
-----------------------
The Company has not generated significant revenue during the years ended
December 31, 2000, 1999, and 1998, and has funded its operations primarily
through the issuance of equity. Accordingly, the Company's ability to
accomplish its business strategy and to ultimately achieve profitable operations
is dependent upon its ability to obtain additional financing and execute its
business plan. There can be no assurance that the Company will be able to
obtain additional funding, and if available, that the funding will be obtained
on terms favorable to or affordable by the Company.
In addition, the Company has suffered recurring losses since its inception,
and at June 30, 2001, has an accumulated deficit of $471,717. The report of
independent auditors on the Company's December 31, 2000 financial statements
includes an explanatory paragraph indicating there is substantial doubt about
the Company's ability to continue as a going concern. Management believes that
as a result of its acquisition and continued development of its products and
services, it may achieve positive cash flow and earnings during the year ending
December 31, 2002, but there can be no assurance of this happening. In
addition, the Company will have to secure additional financing to support
ongoing operations until operating cash flows become positive, and also to fund
capital expenditures and future development opportunities, and there is no
assurance that the necessary financing can be obtained or on what terms it may
be obtained. The accompanying financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainty.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash balances and instruments with
maturities of three months or less at the time of purchase.
Concentrations of Credit Risk
The Company maintains cash balances at one bank located in Jericho, New
York. Accounts at this institution are insured by the Federal Deposit Insurance
Corporation up to $100,000. The Company's cash balances, at times, may exceed
federally insured limits.
Page 9
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
------------------------------------------------------------------------------
PRESENTATION - Continued
------------
Concentrations of Operations
All of the Company's current products are designed for operation in the
internet shopping arena. Any recessionary pressures or other disturbances in
the national internet shopping market could have an adverse effect on the
Company's operations.
Income Taxes
The Company accounts for income taxes by the asset/liability approach in
accordance with the provisions of SFAS No. 109, Accounting for Income Taxes.
Under this pronouncement, deferred income taxes, if any, reflect the estimated
future tax consequences when reported amounts of assets and liabilities are
recovered or paid. Deferred income tax assets and liabilities are determined
based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that are
scheduled to be in effect when the differences are expected to reverse. The
provision for income taxes, if any, represents the total income taxes paid or
payable for the current year, plus the change in deferred taxes during the year.
The tax benefits related to operating loss carry forwards are recognized if
management believes, based on available evidence, that it is more likely than
not that they will be realized.
Net Loss per Share
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS
No. 128"). SFAS No. 128 simplifies the standards for computing earnings per
share ("EPS") and was effective for financial statements issued for periods
ending after December 15, 1997, with earlier application not permitted. The
Company adopted SFAS No. 128 effective December 30, 1997.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing net
income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the Company has no common shares that are potentially issuable, such
as stock options, convertible preferred stock, and warrants, basic and diluted
earnings per share are the same.
Purchased Intangible Assets
The Company's intangible assets, primarily purchased in business
acquisitions, are stated at cost and are amortized on a straight-line basis over
periods ranging from 2 to 3 years.
Page 10
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF
------------------------------------------------------------------------------
PRESENTATION - Continued
------------
Asset Impairment
The Company reviews its purchased intangible and other long-lived assets
periodically in accordance with Statement of financial Accounting Standard No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, to determine potential impairment by comparing the
carrying value of the assets with estimated undiscounted future cash flows
expected to result from the use of the assets, including cash flows from
disposition. Based on this analysis, if the sum of the expected future
undiscounted net cash flow is less than its carrying value, the Company would
determine whether an impairment loss should be recognized.
Comprehensive Income
In June, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS
130"). SFAS No. 130 establishes standards for reporting and presentation of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement does not, however, require a specific
format for the disclosure, but requires the Company to display an amount
representing total comprehensive income for the period in its financial
statements. Comprehensive income is determined by adjusting net income by other
items not included as a component of net income, such as the unrealized gain
(loss) on certain marketable securities. During the periods presented, the
Company had no additional components that were not a part of net income (loss),
therefore, comprehensive income and net income are the same amount.
NOTE 2 - ACQUISITION OF SUBSIDIARY
----------------------------------
On March 28, 2000, the Company entered into an agreement to acquire all the
issued and outstanding shares of stock of Shopmama.com, an Internet shopping
network, in exchange for 3,000,000 shares of restricted common stock at $.001
per share. The acquisition was recorded using the purchase method of
accounting. Accordingly, the results of Shopmama.com's operations from March
28, 2000 are included in the Company's financial statements. The purchase price
of $3,000 was allocated to assets acquired and liabilities assumed based on the
fair value at the date of acquisition. The excess purchase price over the fair
value of the net identifiable assets has been recorded as goodwill in the amount
of $212,315, and is being amortized on the straight line basis over two years.
Page 11
ECOM DIGITAL PROPERTIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000
AND INCEPTION (JUNE 30, 1996) TO JUNE 30, 2001
(Unaudited)
NOTE 2 - ACQUISITION OF SUBSIDIARY - Continued
----------------------------------
The following unaudited pro forma summary presents quarterly financial
information as if the acquisitions discussed above occurred as of the beginning
of the Company's fiscal years ended December 31, 2001 and 2000.
The pro forma amounts include certain adjustments, primarily to record
additional amortization of purchased intangible assets, and do not reflect any
benefits from economies that might be achieved from combining operations.
The pro forma information does not necessarily reflect the actual results
that would have occurred, nor is it necessarily indicative of future results of
operation of the combined companies.
Six Months Ended June 30,
------------------------------------
2001 2000
---------------- ----------------
Revenues $ - $ -
================ ================
Net Loss $ (132,574) $ (336,960)
================ ================
Basic and diluted net loss per share $ (.002) $ (.01)
================ ================
NOTE 3 - NOTE PAYABLE - STOCKHOLDER
-----------------------------------
In January, 2001, Shopmama.com, the Company's wholly-owned subsidiary,
formalized its advances received from stockholders in the amount of $521,397,
into a promissory note payable. The terms of the promissory note call for
semi-annual interest-only payments on June 1st and December 31st of each year at
a rate of 12% per annum. The entire principal balance and all unpaid accrued
interest are due on December 31, 2003.
Item 1. The Company
-----------------------
ECOM Digital Properties, Inc. a Nevada corporation (the "Company") formerly D.W.
Group Technologies, Inc. was formed in May 1996 but did not have any operations
until it acquired Shopmama.com, Inc. a Nevada corporation ("Shopmama.com") in
March 2000. Upon the acquisition of Shopmama.com, the Company changed its name
from D.W. Group Technologies, Inc. to "ECOM Digital Properties, Inc." The
Company acquired all of Shopmama.com's issued and outstanding shares of common
stock making Shopmama.com a wholly owned subsidiary of the Company. The business
of Shopmama.com has become the only operating business of the Company and the
officers and directors of Shopmama.com have assumed the officers and director
positions of the Company. When used herein the term "Company" refers to the
combined entity unless the context otherwise indicate.
Item 2. Management's Discussion and Analysis or Plan of Operation.
--------------------------------------------------------------------
Having completed the acquisition of Shopmama.com, the Company is no longer
inactive and has succeeded to the business of Shopmama.com as presently
existing.
Shopmama.com is an interactive shopping mall that is designed to make shopping
on the Internet easy and seamless. The main goal of Shopmama.com is to provide
the Internet user with a single place to find any product needed.
Since inception, Shopmama.com has made a constant effort to acquire the best
possible affiliations on many of the Internets leading web sites. There are
close to 400 affiliations made to date. All of our affiliates offer different
payment programs or cash bonuses from 5% to 20% of the total sale.
Shopmama.com is in the process of becoming one of the Internet's largest
comparative shopping resources and interactive malls; Shopmama.com has 60
departments that represent name brand merchants and emerging retailers as well.
The products on Shopmama.com are listed in a simple fashion broken down by
categories and subcategories. For example, clothing would be a main category;
once clicked, the subcategories "children's", "women's", "men's", "shoes", etc.
would appear. Utilizing this system of categories and subcategories maintains
the site's simplicity.
Unlike other online shopping resources, Shopmama.com also has interactive games,
monthly prizes and giveaways, as well as a section in which "mama" calculates
gift ideas that a person might enjoy based on their personal information. By
entering in the demographic information of the person you are shopping for such
as age, sex, interests and hobbies, Shopmama.com will automatically calculate
gift ideas that the person might enjoy.
The search engine portion of the site is a simple way for guests to find any
product. By inserting an item description "mama" will find all available
products and locations.
Shopmama.com contains more than 1000 pages of merchandise representing
established name brand merchants as well as smaller start-ups. The merchants
view it as a way to drive traffic to their brand and increase sales.
The eventual goal for Shopmama.com is to eliminate the affiliation programs on
the banner and badge portions of the site and charge advertisers on a per
impression basis.
The Shopmama.com e-commerce site is built on a three-tier structure. Driven by
SQL servers and an IIS web server backed with bandwidth. The site is coded
mostly in ColdFusion and ASP. The information architecture of the site is based
on five fundamental arenas, the free valuable information arena, the product
detail arena, the final purchasing arena, and the purchase administration arena.
Marketing Strategy.
The Company's marketing strategy is to aggressively promote the Shopmama.com
website via a national advertising campaign geared towards Broadcast TV, Radio
and Cable TV audiences. Additional website promotion plans include the use of
industry and consumer magazine advertising, co-operative advertising campaigns
with the retailers and distributors, as well as aggressive billboard display and
national trade show schedule.
Competition.
The Company faces many challenges and competitors in its business. In addition
to competing with individuals in the Companies field, that have a high level of
expertise greatly exceeding current management's abilities, the Company will be
competing with numerous entities, most of which are large, well established
companies with greater assets and financial reserves than the Company possesses.
The Company holds no advantage over its competition.
Research and Development.
The Company's programming and website development has been performed by two of
the Company's officers in the past. The Company intends to hire three or four
new programmers to assist in development and improvements on current products.
If the Company's current website proves successful, the Company will accelerate
the addition of new programmers to reduce the time required to further develop
the website.
We have no patents, trademarks, licenses, concessions, franchises, royalty
agreements, or labor contracts.
Government Regulation.
The Company is not subject to any government regulations other than those that
normally apply to companies in this industry. Although we will be subject to
regulation under the Exchange Act, we believe that we will not be subject to
regulation under the Investment Company Act of 1940, insofar as we will not be
engaged in the business of investing or trading in securities.
We have conducted, and others have made available to us, results of market
research indicating that strong demand exists for the business of comparative
shopping websites.
Employees.
The Company has two employees. (See "Directors and Executive Officers.")
Offices.
The Company's principal executive offices are located at 334 Main Street Port
Washington, NY 11050. The Company believes that the above facilities are
adequate for the foreseeable needs of the Company; however, eventually as the
Company expands its employee base, it anticipates adding additional office
space.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
------------------------------
None.
Item 2. Changes in Securities and Use of Proceeds.
------------------------------------------------------
None.
Item 3. Defaults Upon Senior Securities.
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None.
Item 4. Submission of Matters to Vote of Security holders.
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None.
Item 5. Other Information.
------------------------------
None
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------------------
(a) Exhibits - None
(b) Reports on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ECOM Digital Properties, Inc.
By: /s/ Michael Burns, Pres.
------------------------------
Michael Burns, President, Director
Date: November 2, 2001