U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
eConnect
(Name of Small Business Issuer in its charter)
Brian F. Faulkner, Esq., 3900 Birch Street, Suite 113, Newport
Beach, California 92660
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
eConnect
2500 Via Cabrillo Marina, Suite 112
San Pedro, California 90731
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, OCTOBER 30, 2000
Notice is hereby given that the Annual Meeting of shareholders
of eConnect, a Nevada corporation ("Company") will be held on
Monday, October 30, 2000 at the San Pedro Hilton Hotel, located
at 2800 Via Cabrillo Marina, San Pedro, California 90731 8:00
a.m. for the following purposes:
1. To elect the following three nominees as Directors of the
Company until the next Annual Meeting of shareholders and until
their respective successors shall be elected and qualified:
Thomas S. Hughes, Jack M. Hall, and Laurence B. Donoghue;
2. To approve the appointment of L.L. Bradford & Company, LLC
as the Company's independent auditors for the new fiscal year
that commenced on January 1, 2000;
3. To approve an increase in the authorized common stock of
the Company from 200,000,000 to 300,000,000
4. To consider on any other matter that properly may come
before the meeting or any adjournment thereof.
Shareholders of record as the close of business on September 1,
2000 are entitled to vote at the meeting or any postponement or
adjournment thereof.
Please review the voting options on the attached proxy card and
submit your vote promptly. If you attend the Annual Meeting,
you may revoke your Proxy and vote in person if you desire to do
so, but attendance at the Annual Meeting does not itself serve
to revoke your Proxy. A copy of the Company's Annual Report for
its fiscal year ended December 31, 1999 and for the quarter
ended on June 30, 2000 are enclosed herewith.
By order of the Board of Directors
September 22, 2000
/s/ Jack M. Hall
Jack M. Hall, Corporate Secretary
PROXY STATEMENT
eConnect
2500 Via Cabrillo Marina, Suite 112
San Pedro, California 90731
This Proxy Statement is furnished to shareholders at the
direction and on behalf of the Board of Directors of eConnect, a
Nevada corporation ("Company"), for the purpose of soliciting
proxies for use at the Annual Meeting of Shareholders of the
Company to be held at the San Pedro Hilton Hotel, located at
2800 Via Cabrillo Marina, San Pedro, California 90731 on Monday,
October 30, 2000 at 8:00 a.m. The shares represented by the
proxy will be voted in the manner specified in the proxy. To the
extent that no specification is made as to the proposals set
forth in the notice of meeting accompanying this Proxy
Statement, the proxy will be voted in favor of such proposals.
However, any proxy given pursuant to this solicitation may be
revoked at any time before it is exercised by giving written
notice of such revocation to the Secretary of the Company, by
appearing at the meeting and voting in person, or by submitting
a later dated proxy. Neither attendance at the meeting nor
voting at the meeting shall revoke the proxy. A revocation that
is not timely received shall not be taken into account, and the
original proxy shall be counted.
Shareholder proposals must be submitted to the Company not later
than September 1, 2001, in order to be included in those matters
considered at the next Annual Meeting of the Company to be held
in October 2001. The cost of preparing, assembling and mailing
this Proxy Statement, the Notice of Annual Meeting of
Shareholders and the accompanying Proxy is being borne by the
Company. Brokers, dealers, banks, or voting trustees, and their
nominees, are requested to forward soliciting materials to the
beneficial owners of shares and will be reimbursed for their
reasonable expenses. This Proxy Statement and accompanying
proxy will be mailed to shareholders on or about October 16,
2000.
VOTING SECURITIES
The record date of shareholders entitled to notice of and to
vote at the Annual Meeting of Shareholders is the close of
business on September 1, 2000. On such date, the Company had
issued and outstanding 184,641,313 shares of $0.001 par value
common stock. Each share is entitled to one vote per share on
any matter which may properly come before the meeting and there
shall be no cumulative voting right on any shares. The presence
at the meeting, in person or by proxy, of the holders of a
majority of the shares of common stock outstanding on the record
date will constitute a quorum at the meeting. Votes withheld
and abstentions will be counted in determining the presence of a
quorum but will not be voted. Broker non-votes will not be
counted in determining the presence of a quorum and will not be
voted. All matters to be voted on require an affirmative vote
of a majority of the votes present at the meeting.
STOCK OWNERSHIP
The following table sets forth information regarding the
beneficial ownership of shares of the Company's common stock as
of September 1, 2000 (184,641,313 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:
Title of Name and Address of Amount of Percent
Class Beneficial Owner Beneficial of
Ownership(1) class
Common Hughes Net Income Charitable 8,522,500 (2) 4.62%
Stock Remainder Unitrust
c/o Anthony J. Bayne, Esq.
2500 Via Cabrillo Marina
Suite 300
San Pedro, CA 90731
Common Thomas S. Hughes 5,550,000 (3) 3.01%
Stock 2500 Via Cabrillo Marina
Suite 112
San Pedro, CA 90731
Common Diane Hewitt 1,157,500 0.63%
Stock 2500 Via Cabrillo Marina
Suite 112
San Pedro, CA 90731
Common Laurence B. Donoghue 10,000 0.005%
Stock 2500 Via Cabrillo Marina
Suite 300
San Pedro, CA 90731
Common Anthony J. Bayne 10,000 0.005%
Stock 2500 Via Cabrillo Marina
Suite 300
San Pedro, CA 90731
Common Jack M. Hall 0 0.00%
Stock 2500 Via Cabrillo Marina
Suite 112
San Pedro, CA 90731
Common Shares of all directors, 15,250,000 8.26%
Stock executive officers,
and key employees
as a group (5 persons)
(1) Except as noted in footnote 2 below, each person has sole
voting power and sole dispositive power as to all of the shares
shown as beneficially owned by them.
(2) 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.
(3) 5,400,000 of this amount is owned by Electronic Transactions
& Technology. This ownership is attributed to Mr. Hughes by
virtue of his 70% ownership of this Company.
ELECTION OF DIRECTORS
EXECUTIVE OFFICERS AND KEY EMPLOYEE
The names, ages, and respective positions of the directors and
executive officers of the Company are set forth below. The
Company's Board of Directors is currently composed of four
members; Diane Hewitt has chosen not to stand for re-election.
The Company's Bylaws provide that Directors are to serve only
until the next Annual Meeting of Shareholders or until their
successors are elected and qualified. 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. Other than as set forth below, the
Directors and Executive Officers of the Company are not involved
in legal proceedings as set forth in Item 401(d) of Regulation
SB.
Directors and Executive Officers.
(a) Thomas S. Hughes, Chief Executive Officer/Director.
Mr. Hughes, Age 52, has been President 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.
(b) 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.
(c) Diane Hewitt, Treasurer/Director.
Ms. Hewitt, age 51, has been an interior designer since 1991.
Currently she owns and manages her own firm, D. Diane Hewitt
Designs. This firm's expertise is churches and employs a staff of
five people. Ms. Hewitt currently devotes approximately 25 hours
per week in working with the Company's image development and
consulting with the Company's advertising firm. Ms. Hewitt joined
the Company as Treasurer and a Director in March 1997.
(d) 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 in 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, he worked as an Adjunct Professor at Law at Trinity
University School of Law. Mr. Donoghue was appointed to the
Board of Directors effective on June 1, 2000.
Key Employee.
Anthony J. Bayne, Senior Vice President of Operations.
Mr. Bayne, age 33, received his Bachelor of Science degree in
1992 from Simon Greenleaf University, and his J.D. degree from
the same school in 1994. In 1998, he was awarded an LL.M. degree
in taxation from Washington School of Law. Mr. Bayne is licensed
as an attorney in the State of California. From January 1995 to
February 2000, Mr. Bayne served as a deputy public defender in
the Los Angeles County Public Defender's Office. In this
position, he represented defendants in all stages of criminal
proceedings though trial, directed investigations, appointed
experts, and planned case strategy. For the period of February
2000 to April 2000, Mr. Bayne was in private practice Rancho Palo
Verdes, California. He joined the Company in his current position
on April 27, 2000.
Involvement in Certain Legal Proceedings.
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
National Quotation Bureau's Pink Sheets 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 or Mr. Hughes.
Executive Compensation.
(a) Summary Compensation Table
Annual compensation Long-term
compensation
Awards Payouts
Other Securi All
Annual ties other
Name and compen Restrict under compen
Principal Year Salary Bonus sation stock lying LTIP sation
Position award options payouts
SARs
($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Thomas S. 1999 $79,215 0 0 0 0 0 0
S. Hughes 1998 0 0 0 0 0 0 0
Chief 1997 0 0 0 $750,000 0 0 0
Executive
Off.
Jack M. Hall 1999 $21,000 0 0 0 0 0 0
Secretary 1998 0 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
Diane 1999 $79,075 0 0 $46,875 0 0 0
Hewitt 1998 0 0 0 0 0 0 0
Treasurer 1997 0 0 0 0 0 0 0
(b) Other Compensation.
(1) There are no annuity, pension or retirement benefits
proposed to be paid to officers, directors, or employees 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.
(2) On September 1, 2000, the Company's Board of Directors
approved an Amended and Restated Stock Incentive Plan; this will
allow for stock options and restricted awards to be made to
employees and non-employees of the Company. There have been no
options granted or stock awards made under this plan to date.
Other than this, there is no remuneration proposed to be paid in
the future directly or indirectly by the Company to any officer
or director.
Certain Relationships and Related Transactions.
During the past two fiscal years, certain transactions which
occurred between the Company and its officers and directors 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.("HPOS") (now know as Electronic Transactions & Technology -
"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 agreement are the following: (1)
The name "Betting, Inc.", as trademarked by HPOS; (2) 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 HPOS Secure Computer
Keyboard or over the telephone through the HPOS stand alone
Infinity unit); (c) 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); (d) the HPOS developed Merchant Response Software for
the specific application only of transacting Off Site ATM and
Smart card Wagering through the Wagering Gate; and (e) HPOS'
interest in the use of and revenue from the HPOS Personal
Encrypted Remote Financial Electronic Card transaction relating
to the Wagering Business in all HPOS partner countries.
Under terms of this licensing agreement, the Company is to issue
2,900,000 shares of restricted common stock to HPOS as the total
consideration in exchange for licensing home ATM card and SMART
card wagering technology developed by HPOS. 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 registration statement, the terms of the
Licensing Agreement have not been met by the Company. However,
the Company has entered into amendment(s) of the original
agreement that provide for an extension of the cancellation
deadline from February 10, 1998, to September 1, 2001, subject
to certain conditions specified in the agreement. All
conditions set forth in the original agreement need to be met on
or before September 1, 2001.
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 HPOS 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, HPOS' (now ET&T's)
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. Between June 9, 1999 and November 24, 1999,
the Company has issued a total of 1,850,000 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 ET&T
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 ET&T 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 and 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
follows: (a) the sum resulting from the credit to Mr. Hughes and
ET&T of the license fee owed by the Company to ET&T, as set
forth above, and the charge to ET&T of 5,400,000 shares issued
to that firm in 1999 and the charge to Mr. Hughes of 4,000,000
shares issued to him in 1999; and (b) the oral assumption by the
Company of payment of a promissory note in favor of Unipay, Inc.
whereby ET&T promised to pay the principal sum of $690,000 with
interest thereon at 8.5% accruing from April 26, 1999, the date
of this note (through December 31, 1999, the Company had paid a
total of $93,800 towards this note). The amount set forth in
the Promissory Note is secured by the 9,400,000 shares of the
Company owned by Mr. Hughes and ET&T as reflected in an
accompanying Security Agreement.
(e) On August 2, 2000, the Company issued 3,000,000 restricted
shares of common stock to ET&T in connection with certain
consulting services to be rendered by this firm to the Company.
Compliance with Section 16(a) of the Exchange Act.
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially
own more than 10% of any class of the Company's equity
securities to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission
("SEC"). Executive officers, directors and beneficial owners of
more than 10% of any class of the Company's equity securities
are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished
to the Company during or with respect to fiscal 1999, and
certain written representations from executive officers and
directors, the Company is aware that Mr. Hughes and Ms. Hall
failed to report certain stock issuances to them between
September 1999 and March 2000. A Form 4 for each of these
issuances is now in the process of being prepared for filing.
The Company is unaware of any other filings that have not been
timely made.
Committees of the Board of Directors.
The Company does not currently have standing audit, nominating, or
compensation committees.
Meetings of the Board of Directors.
During the last fiscal year (ended on December 31, 1999),
the total number of meetings of the Board of Directors which
were held was twelve. None of the incumbent directors of the
Company attended less than 75 percent of the total meetings.
INDEPENDENT PUBLIC ACCOUNTANTS
Ratification of Accountants.
L.L. Bradford & Company, LLC of Las Vegas, Nevada issued
the report for the Company's audited financial statements for
the fiscal year ended December 31, 1999. The Board of Directors
has approved by resolution a proposal to retain L.L. Bradford &
Company, LLC for the fiscal year that commenced on January 1,
2000. The Board of Directors of the Company recommends a vote
FOR the retention of L.L. Bradford & Company, LLC for the
current fiscal year.
Representatives of L.L. Bradford & Company, LLC are not
expected to be present at the Annual Meeting and will not be
available for respond to questions.
Change In Company's Certifying Accountant.
(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 accountant for
the Company, BDO Seidman L.L.P. of St. Louis Missouri declined
the 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
Company'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.
(f) 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.
INCREASE IN AUTHORIZED SHARES
Based on a Certificate of Amendment to Articles of
Incorporation which was filed with, and accepted, stamped,
certified, and returned by, the Nevada Secretary of State, the
current number of authorized shares of common stock in the
Articles of Incorporation of the Company is 200,000,000. The
Board of Directors has approved by resolution an increase in the
number of authorized shares of common stock to 300,000,000.
This increase will allow the Board of Directors flexibility in
structuring financing arrangements for the Company and in
issuing common stock in exchange for services for the Company.
The Board of Directors of the Company recommends a vote FOR this
increase in the number of authorized shares of common stock of
the Company from 200,000,000 to 300,000,000.
FINANCIAL AND OTHER INFORMATION
The Form 10-KSB for the fiscal year ended December 31, 1999
and and the Form 10-QSB for the latest quarter ended on June 30,
2000 are incorporated by reference to this Proxy Statement and
are being delivered to security holders of the Company along
with this Proxy Statement.
OTHER BUSINESS
As of the date of this proxy statement, the Company knows
of no business that will be presented for consideration at the
Annual Meeting other than the items referred to above. If any
other matter is properly brought before the meeting for action
by the shareholders, proxies in the enclosed forms returned to
the Company will be voted in accordance with the recommendation
of the Board of Directors or, in the absence of such a
recommendation, in accordance with the judgment of the proxy
holder.
The information incorporated by reference to this Proxy
Statement is the Form 10-KSB for the fiscal year ended December
31, 1999 and the latest Form 10-QSB for the quarter ended June
30, 2000.
By order of the Board of Directors
/s/ Jack M. Hall
Jack M. Hall
Corporate Secretary
September 22, 2000
P R O X Y
eConnect
Annual Meeting of Shareholders To Be Held October 30, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Thomas S. Hughes, Jack M. Hall,
Diane Hewitt, and Laurence B. Donoghue, or any of them, as
proxies of the undersigned, with full power of substitution, and
hereby authorizes them to represent and to vote at the Annual
Meeting of Shareholders of eConnect, a Nevada corporation
(sometimes hereinafter referred to as the "Company") to be held
on Monday, October 30, 2000, as designated below, all of the
common stock of eConnect held of record by the undersigned on
September 1, 2000, at the San Pedro Hilton Hotel, located at
2800 Via Cabrillo Marina, San Pedro, California 90731, for
matters that properly may come before the meeting or any
adjournment thereof.
1. ELECTION OF DIRECTORS (circle one):
FOR WITHHOLD AUTHORITY
all nominees listed below to vote for all nominees listed below
Thomas S. Hughes Jack M. Hall Laurence B. Donoghue
2. TO APPROVE THE SELECTION OF L.L. BRADFORD & COMPANY, LLC AS
THE COMPANY'S INDEPENDENT ACCOUNTING FIRM FOR THE CURRENT FISCAL
YEAR (circle one).
FOR AGAINST ABSTAIN
3. TO APPROVE AN INCREASE IN THE AUTHORIZED COMMON STOCK OF
THE COMPANY FROM 200,000,000 TO 300,000,000 (circle one).
FOR AGAINST ABSTAIN
This proxy will be voted as specified. IF NO SPECIFICATION IS
GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH
ABOVE. The undersigned hereby acknowledges receipt of the
Notice of Annual Meeting of Shareholders of eConnect to be held
on October 30, 2000, the Proxy Statement of such meeting, the
Form 10-KSB for the fiscal year ended December 31, 1999, and the
latest Form 10-QSB for the quarter ended June 30, 2000.
Dated: ______________, 2000
____________________________________________________
(Signature of Shareholder)
Note: Please sign exactly as name appears on stock certificate
(as indicated on reverse side). All joint owners should sign.
When signing as personal representative, executor,
administrator, attorney, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporation
name by President or other authorized person. If a partnership,
please sign in partnership name by a partner.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.