10QSB 1 ecec0803.txt FORM 10QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-QSB QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 31, 2003 Commission File Number 33-96638-A eCom eCom.com, Inc. ----------------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Florida 65-0538051 ------------------------- -------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2700 PGA Boulevard, Suite 103 Palm Beach Gardens, Florida 33410 ----------------------------------------------------------------------------- (Address of principal executive offices) (561) 622-4395 ----------------------------------------------------------------------------- (Registrant's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the 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. Yes [ X ] No [ ] As of August 31, 2003 the issuer had 37,816,112 shares of common stock, $.0001 Par Value, outstanding. Transitional Small Business Disclosure format: Yes [ ] No [ X ] eCom eCom.com, Inc. Form 10-QSB August 31, 2003 INDEX PAGE NO. PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS Independent Accountant's Report 3 Consolidated Balance Sheets: August 31, 2003 and May 31, 2003 (Unaudited) 4 Consolidated Statements of Operations: Three Months Ended August 31, 2003 and 2002 (Unaudited) 5 Consolidated Statements of Shareholders' Deficit: Years Ended May 31, 2002 and 2001 and the Three Months Ended August 31, 2003 (Unaudited) 6 Consolidated Statements of Cash Flows: Three Months Ended August 31, 2003 and 2002 (Unaudited) 7 Notes to Consolidated Financial Statements 9 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 20 ITEM 3 CONTROLS AND PROCEDURES 23 PART II OTHER INFORMATION ITEMS 1-6 24 SIGNATURES AND CERTIFICATIONS 26 Exhibit 31.1 Certification required under Section 302 of 27 the Sarbanes-Oxley Act of 2002 by the CE0 Exhibit 31.2 Certification required under Section 302 of 28 the Sarbanes-Oxley Act of 2002 by the CFO Exhibit 32 Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act 29 2 Wieseneck, Andres & Company, P.A. Certified Public Accountants 772 U. S. Highway 1, Suite 100 North Palm Beach, Florida 33408 (561) 626-0400 Thomas B. Andres, C.P.A.*, C.V.A. FAX (561) 626-3453 Paul M. Wieseneck, C.P.A. *Regulated by the State of Florida Independent Accountant's Report To the Board of Directors and Stockholders eCom eCom.com, Inc. We have reviewed the accompanying Balance Sheets of eCom eCom.com, Inc. as of August 31, 2003 and May 31, 2003, and the related consolidated statements of operations, for the three-month periods ended August 31, 2003 and 2002, the consolidated statement of stockholders' deficit from May 31, 2001 through August 31, 2003, and the consolidated statement of cash flows for the three- month periods ended August 31, 2003 and 2002. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with U.S. generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with U.S. generally accepted accounting principles. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in the notes to the financial statements, the Company's current liabilities exceed the current assets by $774,688 and the Company has incurred net operating losses since inception. These conditions raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are described in the notes. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Wieseneck, Andres & Company, P.A. October 14, 2003 3 eCOM eCOM.COM, INC CONSOLIDATED BALANCE SHEETS (Unaudited) August 31, 2003 May 31, 2003 --------------- -------------- ASSETS Current Assets Cash and cash equivalents $ 532 $ 111 Accounts receivable other 347 347 Inventories 165,748 147,389 Prepaid expenses 3,433 3,624 ------------ ------------ Total Current Assets 170,060 151,471 ------------ ------------ Property and Equipment, net 40,357 47,292 ------------ ------------ Other Assets Intangible assets, net 71,747 74,978 Other assets 9,383 9,383 ------------ ------------ Total Other Assets 81,130 84,361 ------------ ------------ Total Assets $ 291,547 $ 283,124 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 317,079 $ 270,585 Accrued expenses 16 2,694 Other Current Liabilities 1,765 1,402 Current portion of long-term debt 620,420 600,888 Interest accrued on current portion 5,468 - ------------ ------------ Total Current Liabilities 944,748 875,569 Notes Payable, Net of Current Portion - - ------------ ------------ Total Liabilities 944,748 875,569 ------------ ------------ Stockholders' Equity Common stock, $.0001 par value, 50 million shares authorized, 37,816,112 and 36,393,112 shares issued and outstanding 3,781 3,639 Paid-in capital 6,063,490 6,048,622 Accumulated deficit (6,720,472) (6,644,706) Treasury stock - - ------------ ------------ Total Stockholders' Deficit (653,201) (592,445) ------------ ------------ Total Liabilities and Stockholders' Equity $ 291,547 $ 283,124 ============ ============ See accompanying summary of accounting policies, notes to financial statements and independent accountants' review report. 4 ECOM ECOM.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended August 31, 2003 August 31, 2002 ______________ _______________ Revenues Net Sales $ 12,809 $ 40,775 Cost of Sales (13,753) (35,243) ______________ _______________ Gross Profit (944) 5,532 ______________ _______________ Other Operating Expenses Sales and marketing 1,408 8,120 Product development 4,500 14,335 General and administrative 55,613 174,398 Amortization 5,232 5,062 ______________ _______________ Total Operating Expenses 66,753 201,915 ______________ _______________ Loss from Operations (67,697) (196,383) Other Income (Expense) Interest income - - Interest expense (8,069) (2,487) ______________ _______________ Net Other Expenses (8,069) (2,487) ______________ _______________ Net Loss $ (75,766) (198,870) ============== =============== Net Loss Per Common Share $ (.002) (.007) ============== =============== Weighted Average Shares Outstanding 37,692,373 27,847,031 ============== =============== See accompanying summary of accounting policies, notes to financial statements and independent accountants' review report. 5 ECOM ECOM.COM, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT FOR THE YEARS ENDED MAY 31, 2003 AND 2002 AND THE THREE MONTHS ENDED AUGUST 31, 2003 (Unaudited) Number At Add'l Total of Par Paid In Accum'd Treasury Stockholder Shares Value Capital Deficit Stock Deficit ---------- ------ ---------- ----------- -------- ----------- Balance, May 31, 2001 19,010,836 $1,901 $4,127,083 $(4,391,382)$ - $ (262,398) Issuance of Common Stock 7,728,686 773 1,628,684 - - 1,629,457 Net Loss - - - (1,482,533) - (1,482,533) ---------- ------ ---------- ----------- -------- ----------- Balance, May 31, 2002 26,739,512 $2,674 $5,755,767 $(5,873,915)$ - $ (115,474) Issuance of Common Stock 9,653,600 965 292,855 - - 293,820 Net Loss - - - (770,791) - (770,791) ---------- ------ ---------- ----------- -------- ----------- Balance, May 31, 2003 36,393,112 $3,639 $6,048,622 $(6,644,706)$ - $ (592,445) Issuance of Common Stock 1,423,000 142 14,868 - - 15,010 Net Loss - - - (75,766) - (75,766) ---------- ------ ---------- ----------- -------- ----------- Balance, Aug 31, 2003 37,816,112 $3,781 $6,063,490 $(6,720,472)$ - $ (653,201) ========== ====== ========== =========== ======== =========== See accompanying summary of accounting policies, notes to financial statements and independent accountants' review report. 6 eCOM eCOM.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 (Unaudited) August 31, 2003 August 31, 2002 _______________ _______________ Cash Flows From Operating Activities Cash received from customers 12,809 40,775 Cash paid to suppliers and employee (21,807) (112,142) Interest paid (6,532) (2,170) _______________ _______________ Net Cash Flows Used in Operating Activities (15,530) (73,537) _______________ _______________ Cash Flows From Investing Activities Purchase of equipment (701) 0 _______________ _______________ Net Cash Flows Provided By (Used In) Investing Activities (701) 0 _______________ _______________ Cash Flows From Financing Activities Proceeds from note receivable 0 15,000 Proceeds of loans from stockholders 16,653 52,378 Repayment of loans to stockholders 0 (6,410) Issuance of note receivable 0 0 _______________ _______________ Net Cash Flows Provided By (Used In) Financing Activities 16,653 60,968 _______________ _______________ Net Decrease in Cash 421 (12,569) Cash and Cash Equivalents at Beginning of Period 111 12,803 _______________ _______________ Cash and Cash Equivalents at End of Period 532 234 =============== =============== Supplemental Disclosures ------------------------ Non-Cash transactions Stock issued for payment of services 10,421 78,520 Stock issued for purchase of intangible 0 90,000 Stock issued for repayment of debt 4,590 0 See accompanying summary of accounting policies, notes to financial statements and independent accountants' review report. 7 eCOM eCOM.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 (Unaudited) Reconciliation of Net Loss to Net Cash Flows Used in Operating Activities: August 31, 2003 August 31, 2002 _______________ _______________ Net Loss (75,766) (198,871) Add items not requiring outlay of cash: Depreciation and amortization 12,868 16,325 Expenses paid by issuing stock 10,421 89,905 Cash was increased by: Decrease in inventory 0 7,456 Decrease in prepaid expenses 191 13,958 Decrease in deposits 0 1,500 Increase in accrued interest pa 5,468 2,152 Increase in accounts payable 46,494 0 Increase in inventory (18,359) 0 Decrease in accounts payable 0 (5,743) Decrease in accrued expenses (2,678) (219) Decrease in other current liabilities 364 0 Decrease in accrued interest payable 5,468 0 _______________ _______________ Net Cash Flows Used In Operating Activities (15,530) (73,537) =============== =============== See accompanying summary of accounting policies, notes to financial statements and independent accountants' review report. 8 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE A - NATURE OF OPERATIONS eCom eCom.com, Inc. ("eCom" or "the Company") was incorporated in the State of Florida on June 14, 1994. eCom recently changed its direction to focus on separating three of its current business segments, USA SportsNet, Inc., USA Performance Products, Inc., and MyZipSoft, Inc. which was established on March 3, 2003. This plan was undertaken for the purposes of allowing the management and employees the opportunity to operate each segment independently. Also, to have the ability for each segment, to raise its own funding for growth and expansion. The Company is considering a partnership arrangement or spin-off for each division. The business segments are described below. 1. USA SportsNet Company, Palm Beach Gardens, Florida Product Line: e-Commerce business through Internet auction, sale and swapping of sports memorabilia. Articles are both company owned as well as those listed by private parties. It also owns the National High School All American Football Bowl and ComCard/ProCard concept. 2. USA Performance Products, Inc., Riviera Beach, Florida Product Line: Manufacture and distribution of the Viper M1 paintball gun line. An M16 look alike gun which fires in all weather and is made entirely in the USA. 3. MyZipSoft, Inc., Palm Beach Gardens, Florida Product Line: Development and distribution of software. Its first product is a high-compression software called MyPhotoZip (TM). The Company considers this product "the ultimate image compression tool", that enables compression of still images up to 2000 to 1 without loss of quality. This has increased from 1500 to 1. The Company is also developing other cutting edge applications including video compression which could be introduced later this year. The Company has entered into a marketing agreement with Digital River for its on-line sales of MyPhotoZip (TM). Our intention is to eventually roll out all of the divisions for the purposes of attracting management and operational staff. Our mission is to make each of our divisions profitable and to grow on their own. On April 9, 2002 we announced that we had signed a new agreement for use of high power compression encoding technology developed by MeVis Technology of Germany. The first product released using the new technology is MyPhotoZip(tm). MyPhotoZip(tm) provides a better quality image than JPEG and other compression products now on the market. We are moving ahead as quickly as possible to develop and market an array of compression products using this new technology while it is still the state of the art. Software Development Kits (SDK's) are also available. See accompanying independent accountants' review report. 9 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE A - NATURE OF OPERATIONS (CONTINUED) The company continues to renegotiate a teaming agreement that was entered into on June 18, 2002 with World Data Group LLC, of Boca Raton, Florida. The original agreement provided revenue sharing in the amount of 10% of all World Data Group's income derived from MeVis Technology integrations. In addition, any of the integrated products to be offered for commercial sale will be made available to eCom eCom to resell. On July 15, 2002 we announced the availability of MyPhotoZip(tm) for download from our new website, www.myphotozip.com. In addition, we provided details of the primary marketing strategy for all of our company's compression products which is based on an agreement signed with Plugin Technologies of the United Kingdom. Using Plugin's network of thousands of sales affiliates, ECOM's product lines will be promoted globally to a variety of market segments. While broadening the target audience to international markets, this approach takes advantage of the Internet without incurring the heavy cost of traditional Internet-based advertising programs. On December 12, 2002 we signed a contract to purchase the software rights to FotoCrazy from Interveloce.net. FotoCrazy is an on-line subscription based photo-album system, which will allow users to post and organize digital images on their own web pages. This product will be renamed MyAlbumZip and is scheduled to be released in 2003. In February 2003, the company signed a Master Distributor Agreement with Artera Group, Inc., of Westport CT, a subsidiary of NCT Group, Inc. (OTCBB:NTCI). The agreement covers the distribution of Artera Turbo Web Accelerator for Internet access. The company will market the product as MyNetZip for a monthly subscription fee. MyNetZip will have the MyPhotoZip technology imbedded to provide DSL speed over dial-up internet connections. MyNetZip can be used with all Internet connections and especially Internet access which is normally enhanced to the DSL level of service. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation, Use of Estimates The Company maintains its accounts on the accrual basis of accounting. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. See accompanying independent accountants' review report. 10 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Consolidation The consolidated financial statements of the Company include the accounts of USA Performance Products, Inc. The Company formed USA Performance Products, Inc. as a separate wholly owned subsidiary on January 20, 1998 and transferred all assets related to the manufacture and sale of the Viper M1 paintball marker and accessories to this new corporation. We expanded the activities of USA Performance Products in 1999 by selling other paintball products through use of the 800-PAINTBALL toll-free telephone number and related website acquired by USASC. Revenue Recognition Revenue from the sale of paintball markers and accessories is recognized at the time title is transferred which is normally on shipment of the goods. Revenue from the sale of compression products is also recognized at the time the products are shipped or downloaded. Revenue received from contracts for web site development services is recorded as unearned revenue until development of the related web site is complete and accepted by the client. Cash Cash consists of deposits in banks and other financial institutions having original maturities of less than ninety days. Allowance for Doubtful Accounts It is the policy of management to review the outstanding accounts receivable at year end, as well as the bad debt write-offs experienced in the past, and establish an allowance for doubtful accounts for uncollectible amounts. Depreciation Property and equipment is recorded at cost and is depreciated over the estimated useful lives of the related assets. Depreciation is computed using the straight-line method. Amortization Intangible assets consisting of rights to technology and associated trademarks are amortized using the straight-line method over five years. Inventories Inventories are stated at the lower of cost or market using the first in first out method. See accompanying independent accountants' review report. 11 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE C - INVENTORIES Inventories consist principally of paintball markers and paintball accessories and sports-related memorabilia. Inventories are carried at cost, which is considered to be less than market value. On August 31, 2003, inventory consisted of the following: Finished goods $ 4,630 Work in process 161,118 Raw materials 0 ---------- Total inventory $ 165,748 ========== NOTE D - PREPAID EXPENSES Prepaid expenses consist principally of amounts paid for rent, subscriptions and domain name registrations. NOTE E - PROPERTY AND EQUIPMENT The following is a summary of property and equipment recorded in the financial statements at cost less depreciation as of August 31, 2003 and May 31, 2003: August 31, 2003 May 31, 2003 ----------------- ------------ Computer hardware $ 150,812 $ 150,111 Computer software 56,308 56,308 Furniture, fixtures and equipment 47,760 47,760 Tools, dies and fixtures 57,401 57,401 ---------------- ------------ Total Cost 312,281 311,580 Accumulated Depreciation 271,925 264,288 ------------ ------------ Total Net Property and Equipment $ 40,357 $ 47,292 ============ ============ Depreciation expense included in the cost of sales for the periods ended are: $ 7,636 $ 45,053 The useful lives assigned to property and equipment to compute depreciation are: Computer Hardware 5 years Computer Software 5 years Furniture, fixtures and equipment 7 years Tools, dies and fixtures 5 years See accompanying independent accountants' review report. 12 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE F - INTANGIBLE ASSETS In February 1999, the Company acquired two Internet websites, AclassifiedAd and Swapandshop, for a total cost of $11,200. These assets are amortized over five years. Accumulated amortization related to these assets was $9,990 and $9,430 as of August 31, 2003 and May 31, 2003, respectively. On July 1, 2002, the Company acquired the licensing rights to Pandora and Virtual Protect from Internet Security Solutions, for a total cost of $56,250. This asset is being amortized over five years. Accumulated amortization related to this asset is $14,063 as of August 31, 2003. On July 1, 2002, the Company paid Peter Tamayo, Jr. to work with MeVis Technologies to complete the development of MyPhotoZip, for a total cost of $33,750. This asset is being amortized over five years. Accumulated amortization related to this asset is $8,438 as of August 31, 2003. On September 18, 2002, the Company issued 25,000 shares of stock as payment towards the purchase of FotoCrazy software. This deposit was recorded as $1,125. NOTE G - OTHER ASSETS Other assets consist primarily of security deposits on the lease of office facilities, an employee advance and utility deposits. NOTE H - LONG-TERM DEBT Long-term debt as of August 31, 2003 and May 31, 2003 consisted of: August 31, 2003 May 31, 2003 --------------- ------------ A non-interest bearing, non-collateralized loan from an offshore corporation that is due on demand. 184,220 184,220 Three non-interest bearing, non-collateralized loans from stockholders. The loans are due on demand. 436,200 416,668 ---------- ---------- Total Long-Term Debt 620,420 600,888 Less Current Portion 620,420 (600,888) ---------- ---------- Net Long-term Debt $ 0 $ 0 ========== ========== The long-term loans payable mature as follows: May 31, 2004 620,420 600,888 ---------- ---------- $ 620,420 $ 600,888 ========== ========== See accompanying independent accountants' review report. 13 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE I - COST OF SALES Included in the cost of sales are the following: August 31, 2003 May 31, 2003 ------------ ------------ Shipping and handling costs $ 42 $ 0 Packaging costs 124 460 ------------ ------------ Total $ 166 $ 460 ============ ============ Shipping income $ 845 $ 8,946 ============ ============ NOTE J - COMMITMENTS AND CONTINGENCIES The Company leases office facilities under an operating lease one which expires on March 31, 2004. The Company leases its manufacturing facility under an operating lease which expires June 30, 2004. Future minimum lease payments including sales tax as of August 31, 2003 are: Fiscal Years ending: May 31, 2004 $ 36,785 May 31, 2005 1,855 May 31, 2005 0 ------- Total Minimum Lease Payments $ 38,640 Rent expense for the three month period ending August 31, 2003 and 2002 are $15,466 and $19,705 respectively. We are party to lawsuits in the normal course of our business. Litigation can be expensive and disruptive to normal business operations; the results of legal proceedings are difficult to predict. Our dispute with four companies had similar suits of non-payment against either eCom eCom.com or it's subsidiary USA Performance Products. Each of these suits were initially settled during the fiscal year ending May 31, 2002. However two matters have recently come to light. The first matter concerning National Paintball which has notified us through their attorney that the issuance of stock agreed upon in the settlement was insufficient to cover the settlement. The company is currently trying to determine the circumstances which lead to the shortfall. The second matter is the attorney for Renick Enterprises Inc. has notified us of his contention that the company failed to complete its agreement by the appropriate date. Management feels that the claim is unfounded and that the company met its obligation timely. See accompanying independent accountants' review report. 14 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE J - COMMITMENTS AND CONTINGENCIES (CONTINUED) On May 15, 2002 a settlement was reached with Renick Enterprises, Inc. As part of the settlement USAPP received cash, notes receivable, inventory, and cancellation of accounts payable. USA Performance products gave up raw material located at Renick. National Paintball Supply, Inc. filed a complaint against USA Performance Products and eCom eCom.com, Inc. in the State of South Carolina, Greenville County Court of Common Pleas on May 14, 2001. The complaint alleged that an amount of $85,743.35 is owed to the complainant. National Paintball Supply handled paintball fulfillment requests for USA Performance products. USA Performance Products contended that many requests for fulfillment were not completed while some requests were shipped twice. USA Performance Products has recorded a balance due of $69,373.36 as of May 31, 2001. As part of the SB-2 dated August 8, 2002, stock was registered to pay-off this debt. As of February 28, 2003 all stock that had previously been held in an Attorney escrow account, had been sold and transferred to National Paintball. The balance owed National Paintball as of August 31, 2003 is 59,475.83. NOTE K - RELATED PARTY TRANSACTIONS On January 10, 1998, the Company's Board of Directors approved an agreement with Axis Enterprises, Ltd., a Bahamian corporation of Nassau, Bahamas, to retain Axis for a period of three years to provide certain financing, marketing and management services in support of the Company's subsidiary, USA Performance Products, Inc. In exchange for performance of these services, Axis was granted 1,500,000 shares of common stock. The final marketing and management agreement was executed on April 8, 1998. Derek D. Panaia, son of David J. Panaia, CEO of the Company, was retained as a consultant to provide management oversight of USAPP in connection with this agreement. In 1999, Axis loaned the Company $296,000, and this indebtedness was reduced by $111,780 through the issuance of 150,000 shares of the Company's common stock. The Company is currently indebted to Axis for $184,220. The Company has received cash advances from David J. Panaia, Chairman and CEO of the Company, in varying amounts and at various times subsequent to the inception of the Company. These shareholder loans were non-interest bearing, non-collateralized and due on demand. On May 10, 2001, 1,286,359 shares of restricted stock were issued to Mr. Panaia in return for cancellation of $437,362 ($.34 per share) of the debt owed to him. The balance owed to Mr. Panaia at August 31, 2003 was $277,692. The Company has received cash advances from Bonnie Crum, daughter of David J. Panaia, CEO of the Company, in varying amounts and at various times subsequent to May 31, 2001. These related party loans were non-interest bearing, non- collateralized and due on demand. The balance owed to Ms. Crum as of August 31, 2003 is $40,000. See accompanying independent accountants' review report. 15 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE L - BUSINESS SEGMENTS The Company's reportable segments are strategic business units that offer different products and services. The Company has two reportable segments: electronic commerce and software. The electronic commerce segment has provided an e-commerce infrastructure to enable small businesses to expand to the Internet. The e-commerce segment focuses on classifieds, auctions and its paintball gun company. The software segment focuses on the design and resale of secure software applications for compression and transmission of large data files. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. There have been no intersegment sales or transfers. Revenues from sales of the Company's paintball products over the Internet are reported within the paintball segment. The following is a summary of segment activity: Electronic Paintball Commerce Totals Three Months Ended: ---------- --------- ----------- August 31, 2003 ------------------ Revenues $ 12,023 $ 786 12,809 Interest expense 163 7,906 8,069 Depreciation 3,844 3,793 7,637 Amortization - 5,232 5,232 Segment loss (18,799) (56,967) (75,766) Segment assets 193,235 98,311 291,547 Electronic Paintball Commerce Totals Three Months Ended: ---------- --------- ---------- August 31, 2002 - ----------------- Revenues $ 37,718 $ 3,057 40,775 Interest expense 169 2,318 2,487 Depreciation 5,786 5,477 11,263 Amortization - 5,062 5,062 Segment loss (18,202) (180,669) (198,871) Segment assets 402,569 372,179 774,748 See accompanying independent accountants' review report. 16 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE M - RECOVERABILITY OF ASSETS AND GOING CONCERN These financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The accompanying financial statements show that current liabilities exceed current assets by $774,688 at August 31, 2003 and by $724,098 at May 31, 2003 and that the Company has incurred net operating losses since inception. eCom will have to fund future operations and software development through product sales, asset sales, shareholder loans and private sales of company stock. The sales of MyPhotoZip began on July 31, 2002, the product was released with a 30 day free trial. Subsequent to May 31, 2003, eCom contracted with Digital River Inc to market and distribute MyPhotoZip. USA Performance Products completed its approval with the United States General Services Administration. The Viper M-1 paintball gun can now be purchased through GSA Advantage, the Federal Government's online purchasing system. eCom is continuing to look for buyers for the USA Performance Products division. In accordance with the May 2001 agreement to sell the 1-800-PAINTBALL number, the Company agreed not to sell paintball accessories for a period of three years. The company continues to manufacture and sell the Viper paintball gun. The Company is currently focusing its efforts on the design and resale of MyPhotoZip (tm) software that compresses, stores, protects and transmits large data files. NOTE N - INCOME TAXES Deferred income taxes are provided for temporary differences between the financial reporting and income tax basis of the Company's assets and liabilities. Temporary differences, net operating loss carry forwards and valuation allowances comprising the net deferred taxes on the balance sheets is as follows: August 31, 2003 -------------- Loss carry forward for tax purposes $ 6,710,431 ============== Deferred tax asset (34%) 2,281,547 Valuation allowance (2,281,547) -------------- Net deferred tax asset - ============== Through August 31, 2003, the Company had a federal income tax net operating loss carry forward of approximately $6,710,000 which will expire through the year 2023. See accompanying independent accountants' review report. 17 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE 0 - INCOME TAXES No provision for federal and state income taxes has been recorded because the Company has incurred net operating losses since inception. The Company's net operating loss carry-forward as of August 31, 2003 was approximately $6,710,000. These carry-forwards, which will be available to offset future taxable income, will expire through the year 2023. The Company does not believe that the realization of the related net deferred tax asset meets the criteria required by generally accepted accounting principles and, accordingly, the deferred income tax asset arising from such loss carry forward has been fully reserved. NOTE P - EFFECTS OF INFLATION To date, inflation has not had a material impact on the Company's consolidated financial results. NOTE Q - RECENT ACCOUNTING PRONOUNCEMENTS The FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations with an effective date for financial statements issued for fiscal years beginning after June 15, 2002. The statement addresses financial accounting and reporting for obligations related with the retirement of tangible long-lived assets and the costs associated with asset retirement. The statement requires the recognition of retirement obligations which will, therefore, generally increase liabilities; retirement costs will be added to the carrying value of long-lived assets, therefore, assets will be increased; and depreciation and accretion expense will be higher in the later years of an assets life than in earlier years. The Company adopted SFAS No. 143 at January 1, 2002. The adoption of SFAS No. 143 had no impact on the Company's operating results or financial positions. The FASB also issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets and is effective for financial statements issued for fiscal years beginning January 1, 2002. This statement addresses financial accounting and reporting for the impairment or the disposal of long-lived asset. An impairment loss is recognized if the carrying amount of a long- lived group exceeds the sum of the undiscounted cash flow expected to result from the use and eventual disposition of the asset group. Long-lived assets should be tested at least annually or whenever changes in circumstances indicate that its carrying amount may not be recoverable. This statement does not apply to goodwill and intangible assets that are not amortized. The Company adapted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS No. 144 had no impact on the Company's operating results or financial position. See accompanying independent accountants' review report. 18 ECOM ECOM.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AUGUST 31, 2003 AND 2002 NOTE Q - RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED) In April 2002, the FASB issued SFAS No. 145, "Rescission of the FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS No. 145"). SFAS No. 145 eliminates the requirement to classify gains and losses from the extinguishment of indebtedness as extraordinary, requires certain lease modifications to be treated the same as a sale-leaseback transaction, and makes other non-substantive technical corrections to existing pronouncements. SFAS No. 145 is effective for fiscal years beginning after May 15, 2002. SFAS No. 145 was adopted on June 1, 2003 and did not have a material effect on the Company's financial position or results of operations. Goodwill and intangible assets acquired prior to July 1, 2001 will continue to be amortized and tested for impairment in accordance with pre- SFAS No. 142 requirements until adoption of SFAS No. 142. Under the provision of SFAS No. 142, intangible assets with definite useful lives will be amortized to their estimated residual values over those estimated useful lives in proportion to the economic benefits consumed. Such intangible assets remain subject to the impairment provisions of SFAS No. 121. Intangible assets with indefinite useful lives will be tested for impairment annually in lieu of being amortized. The Company's current yearly amortization of intangible assets is approximately $20,927. The impact of adopting SFAS Nos. 141 and 142 will not cause a material change in the Company's consolidated financial statements as of the date of this report. See accompanying independent accountants' review report. 19 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The following discussion should be read in conjunction with the accompanying consolidated financial statements for the three-month periods ended August 31, 2003 and 2002 and the Form 10-KSB for the fiscal year ended May 31, 2003. Special Note Regarding Forward-Looking Statements Certain statements in this report and elsewhere (such as in other filings by the Company with the Securities and Exchange Commission ("SEC"), press releases, presentations by the Company or its management and oral statements) may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and "should," and variations of these words and similar expressions, are intended to identify these forward-looking statements. The Company's actual results could differ materially from those anticipated in these forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures, the growth rate of the paintball industry and electronic commerce, constantly changing technology and market acceptance of the Company's products and services. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Overview The results of its operations during the three months ended August 31, 2003 were a reflection of the continued evolution of its business model. eCom recently changed its direction to focus on three of its current business segments, USA SportsNet, Inc., USA Performance Products, Inc., and MyZipSoft, Inc. which was established on March 3, 2003. This plan was undertaken for the purposes of allowing the management and employees the opportunity to operate each segment independently. Also, to have the ability for each segment, to raise its own funding for growth and expansion. The business segments are described below. 1. USA SportsNet Company, Palm Beach Gardens, Florida Product Line: e-Commerce business through Internet auction, sale and swapping of sports memorabilia. Articles are both company owned as well as those listed by private parties. 2. USA Performance Products, Inc., Riviera Beach, Florida Product Line: Manufactures and distribution of the Viper M1 paintball gun line. An M16 look alike gun which fires in all weather and is made entirely in the USA. 20 ECOM ECOM.COM, INC. 3. MyZipSoft, Inc., Palm Beach Gardens, Florida Product Line: Development and distribution of software. Its first product is a high-compression software called MyPhotoZip (TM). The Company considers this product "the ultimate image compression tool", that enables compression of still images up to 2000 to 1 without loss of quality The Company is also developing other cutting edge applications including video compression which could be introduced later this year. The Company has entered into a marketing agreement with Digital River for its on-line sales of MyPhotoZip (tm). It is too early in this arrangement to measure results. Previously, eCom developed an e-commerce infrastructure that provided an affordable, user-friendly technological platform to facilitate web business development. It also operated an on-line business as a test model, using Company developed e-commerce concepts to sell paintball products. However, the current business model was revised with the intention to eventually separate the e-commerce business segment, which is described above, along with the previously operated programs, for the purpose of allowing each of the three business segments the opportunity to grow on its own. The company realizes that it presently does not have the proper resources to develop all three segments simultaneously and is looking towards a partnership for each business segment so that it may obtain the necessary outside resources. The separation was also a result of past experiences which indicated that potential business partners desire to be involved with only one of the business segments. Two realities have been made clear: 1) investor appetite for technology stocks diminished dramatically; and 2) e-commerce spending declined. eCom radically restructured its business operations to preserve the Company's future in these difficult markets. This transformation continues today. As a result of this focused execution, we believe we have set the stage to propel eCom's future business. The transitional architecture consists of creating three business segments and seeking management and operational partners for each either through a merger or spin-off. The Company cancelled almost all of its existing partnerships and teaming agreements. It has settled all but two legal actions. Both the Renick and National Paintball cases were settled but were reopened by the plaintiffs. The Company feels that neither case will have a major adverse effect and will be settled soon. Our company's reengineering dictated the need to sell or spin off certain divisions. With the sale last year of our 1-800-PAINTBALL business and the Star Dot Marketing subsidiary, the only significant revenue-generating product line left from our previous business model was the Viper M1 paintball marker. As discussed below, our current operating results reflect this temporary cessation of revenues. However, we believe that the potential revenue and profit to be realized from our focus on MyPhotoZip(tm) and other software products will confirm that the current lull in revenue generation is a minor inconvenience. 21 ECOM ECOM.COM, INC. Results of Operations Comparison of the three months ended August 31 2003 with the three months ended August 31, 2002. Revenue for the three-month period ended August 31, 2003 was $12,809 compared to $40,775 of revenue recorded during the same period of the prior year. Current year revenues were recorded from sales of the Viper M1 paintball marker and accessories and sales of MyPhotoZip (TM). Our USA Performance Products subsidiary had entered into a proposed sale of the Viper product line during February 2001. In order to comply with the terms of the sales contract, all Viper inventory was taken out of production in preparation for shipment during April 2001. The sale subsequently was canceled. We intend to rebuild Viper sales volume in anticipation of the eventual sale of this product line. Gross profit decreased from $5,532 in the prior year period to $(944) in the current three-month period. Depreciation expense contributed $7,636 to the current deficit in gross profit. Depreciation expense was 60% of revenue in the current year and only 28% of sales in the prior year. The company continues to make improvements in cutting its operating costs. Cost reduction was achieved in all major expense categories. Sales and marketing expense dropped from $8,120 in the three months ended August 31, 2003 to $1,408 in the current three-month period. Product development expenses were cut from $14,335 in the prior year period to $4,500 in the current three-month period. General and administrative costs dropped from $174,398 in prior year to $55,614 in the current three-month period. Most of this cost savings was generated from a reduction in personnel and overhead. Amortization expense increased from $5,062 to $5,232 as a result of increases in intangible assets. During the current three-month period, the company acquired the rights to license Virtual Protect and Pandora from Internet Security Solutions, Inc. The company also acquired the rights to the www.fotocrazy.com internet domain name. The fotocrazy.com web site will be an online digital photo album site were customers will be able to store and share their pictures. The company incurred net interest expense of $8,069 in the current three month period compared to a net interest expense of $2,487 in the prior year three month period. This was primarily due to the increased need to borrow funds to finance current operations. Our operations for the three months ended August 31, 2003 resulted in a net loss of $77,766, a $123,104 improvement over the net loss of $198,870 recorded during the three months ended August 31, 2002. Liquidity and Capital Resources At August 31, 2003, current assets totaled $170,060 compared to $151,471 at the end of the prior fiscal year. Of the $18,589 increase in total current assets, inventory accounted for $18,359 of the increase. 22 ECOM ECOM.COM, INC. Accounts Payable increased $46,494 to $317,079 during the current three months. This increase in accounts payable helped fund the increase in inventory and funded the operating loss of the company. Current liabilities increased from $875,569 at the end of the prior fiscal year to $944,748 at the end of the current quarter, an increase of $69,179. Net cash used in operating activities was $15,530 during the current three- month period compared to $73,537 during the same period of the prior year. The principal use of cash in both periods was to fund our net loss from operations. The issuance of stock contributed $15,011 towards our operating deficit during the current three-month period. Financing activities provided net cash of $16,653 during the first three months of the current year, consisting primarily of loans from stockholders. The Company continues to be reliant on the combination of revenues, loans from stockholders and capital contributions to fund operations. The equity line agreement that was established with Swartz Private Equity, LLC was scheduled to end on April 28, 2003. The agreement was terminated on October 15, 2001 with a final sale of stock to Swartz to cover the outstanding account payable due to Swartz of $77,000. To the extent that additional funds are required to support operations or to expand our business, we may sell additional equity, issue debt or obtain other credit facilities through financial institutions. Any sale of additional equity securities will result in dilution to our shareholders. Until the Company obtains sufficient funds necessary to capitalize the growth of its existing operations, expenditures required to increase revenues, including advertising and promotion of compression software and Viper M1 paintball products, will be substantially limited. Should the Company be unable to obtain continued funding, its operations may be adversely affected. ITEM 3. CONTROLS AND PROCEDURES Evaluation of the Company's Disclosure Controls and Internal Controls: Within the 90 days prior to the date of this Quarterly Report on Form 10-QSB, the Company evaluated the effectiveness of the design and operation of its 'disclosure controls and procedures'("Disclosure Controls"). This 'evaluation' ("Controls Evaluation") was done under the supervision and with the participation of management, including the Chief Executive Officer ("CEO")and Chief Financial Officer ("CFO"). As a result of this review, the Company adopted guidelines concerning disclosure controls and the establishment of a disclosure control committee made up of senior management. Limitations on the Effectiveness of Controls: The Company's management, including the CEO and CFO, does not expect that its Disclosure Controls or its 'internal controls and procedures for financial reporting' ("Internal Controls")will prevent all error and all fraud. A control 23 ECOM ECOM.COM, INC. system, no matter how well conceived and managed, can provide only reasonable assurance that the objectives of the control system are met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Conclusions: Based upon the Controls Evaluation, the CEO and CFO have concluded that, subject to the limitations noted above, the Disclosure Controls are effective to timely alert management to material information relating to the Company during the period when its periodic reports are being prepared. In accordance with SEC requirements, the CEO and CFO note that, since the date of the Controls Evaluation to the date of this Quarterly Report, there have been no significant changes in Internal Controls or in other factors that could significantly affect Internal Controls, including any corrective actions with regard to significant deficiencies and material weaknesses. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings. Our dispute with four companies had similar suits of non-payment against either eCom eCom.com or it's subsidiary USA Performance Products. Each of these suits were initially settled during the fiscal year ending May 31, 2002. However two matters have recently come to light. The first matter concerning National Paintball which has notified us through their attorney that the issuance of stock agreed upon in the settlement was insufficient to cover the settlement. The company is currently trying to determine the circumstances which lead to the shortfall. The second matter is the attorney for Renick Enterprises Inc. has notified us of his contention that the company failed to complete its agreement by the appropriate date. Management feels that the claim is unfounded and that the company met its obligation timely. On May 15, 2002 a settlement was reached with Renick Enterprises, Inc. As part of the settlement USAPP received cash, notes receivable, inventory, and cancellation of accounts payable. USA Performance products gave up raw material located at Renick. 24 ECOM ECOM.COM, INC. National Paintball Supply, Inc. filed a complaint against USA Performance Products and eCom eCom.com, Inc. in the State of South Carolina, Greenville County Court of Common Pleas on May 14, 2001. The complaint alleged that an amount of $85,743.35 is owed to the complainant. National Paintball Supply handled paintball fulfillment requests for USA Performance products. USA Performance Products contended that many requests for fulfillment were not completed while some requests were shipped twice. USA Performance Products has recorded a balance due of $69,373.36 as of May 31, 2001. As part of the SB-2 dated August 8, 2002, stock was registered to pay-off this debt. As of February 28, 2003 all stock that had previously been held in an Attorney escrow account, had been sold and transferred to National Paintball. The balance owed National Paintball as of August 31, 2003 is 59,475.83. ITEM 2. Changes in Securities. None ITEM 3. Defaults Upon Senior Securities. None ITEM 4. Submission of Matters to a Vote of Security Holders. None ITEM 5. Other Events. The company is in the process of replacing its attorney, Carol Ann Plowman who had notified the company that she will no longer be practicing in the securities field. Several attorneys are under consideration. The company was notified that its lead market maker, Equitrade Securities Inc. of Lake Forest CA was shutting down its operations. The company is presently looking for a replacement, however there are currently over 40 companies making markets in our stock. The company signed an agreement with Digital River to provide e-marketing services for on-line sales of all of its software products. Results thus far have been minimal. A software partner is being sought to assist in this portion of the Company. ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits: Exhibit 31.1 Certification required under Section 302 of the Sarbanes-Oxley Act of 2002 by the CE0 on page 27 Exhibit 31.2 Certification required under Section 302 of the Sarbanes-Oxley Act of 2002 by the CFO on page 28 Exhibit 32 Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act on page 29 (b) Reports on Form 8-K: None 25 ECOM ECOM.COM, INC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized. eCom eCom.com, Inc. April 15, 2003 By: /s/ David J. Panaia David J. Panaia, Chief Executive Officer April 15, 2003 By: /s/ Richard C. Turner Richard C. Turner, Chief Financial Officer 26 Exhibit 31.1 CERTIFICATION REQUIRED UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, David J. Panaia, certify that: 1. I have reviewed this quarterly report on Form 10-Q of eCom eCom.com Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: October 14, 2003 /s/ David J. Panaia -------------------------- David J. Panaia Chief Executive Officer 27 Exhibit 31.2 CERTIFICATION REQUIRED UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Richard C. Turner, certify that: 1. I have reviewed this quarterly report on Form 10-Q of eCom eCom.com Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls. 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: October 14, 2003 /s/ Richard C. Turner --------------------------- Richard C. Turner Chief Financial Officer 28 Exhibit 32 CERTIFICATIONS OF CEO AND CFO PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) In connection with the Quarterly Report of eCom eCom.com Inc., a Florida corporation (the "Company"), on Form 10-QSB for the period ending August 31, 2003, as filed with the Securities and Exchange Commission (the "Report"), David J. Panaia, Chief Executive Officer of the Company and Richard C. Turner, Chief Financial Officer of the Company, respectively, do each hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that to his knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ David J. Panaia David J. Panaia Chief Executive Officer October 14, 2003 /s/ Richard c. Turner Richard C. Turner Chief Financial Officer October 14, 2003 [A signed original of this written statement required by Section 906 has been provided to eCom eCom.com Inc. and will be retained by eCom eCom.com Inc. and furnished to the Securities and Exchange Commission or its staff upon request.] Exhibits to Form 10-QSB will be provided to shareholders of the Registrant upon written request addressed to eCom eCom.com, Inc., 2700 PGA Boulevard, Suite 103, Palm Beach Gardens, Florida 33410. Any exhibits furnished are subject to a reasonable photocopying charge. The Securities and Exchange Commission has not approved or disapproved of this Form 10-QSB nor has it passed upon its accuracy or adequacy. 29