10QSB 1 ecom0208.txt ECOM 10Q FOR THE PERIOD ENDING FEBRUARY 29, 2008 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 February 29, 2008 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.) 1016 Clemmons Street, Suite 302 Jupiter, Florida 33477 ----------------------------------------------------------------------------- (Address of principal executive offices) (561) 880-0004 ----------------------------------------------------------------------------- (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 February 29, 2008 the issuer had 248,649,733 shares of common stock, $.0001 Par Value, outstanding. Transitional Small Business Disclosure format: Yes [ ] No [ X ] eCom eCom.com, Inc. Form 10-QSB February 29, 2008 INDEX PAGE NO. PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS Independent Accountant's Report 3 Balance Sheets: February 29, 2008 and May 31, 2007 (Unaudited) 4 Statements of Operations: Nine Months Ended February 29, 2008 and February 28, 2007 (Unaudited) 5 Statements of Operations: Three Months Ended February 29, 2008 and February 28, 2007 (Unaudited) 6 Statements of Shareholders' Deficit: From May 31, 2005 through February 29, 2008 (Unaudited) 7 Statements of Cash Flows: Nine Months Ended February 29, 2008 and February 28, 2007 (Unaudited) 8 Notes to Financial Statements 10 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 19 ITEM 3 CONTROLS AND PROCEDURES 26 PART II OTHER INFORMATION ITEMS 1-6 27 SIGNATURES AND CERTIFICATIONS 28 Exhibit 31.1 Certification required under Section 302 of 29 the Sarbanes-Oxley Act of 2002 by the CE0 Exhibit 31.2 Certification required under Section 302 of 30 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 31 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 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders eCom eCom.com, Inc. Jupiter, Florida 33477 We have reviewed the accompanying Balance Sheets of eCom eCom.com, Inc. as of February 29, 2008 and May 31, 2007, and the related statements of operations, for the nine month periods ended February 29, 2008 and February 28, 2007, the statement of stockholders' deficit from May 31, 2005 through February 29, 2008, and the statement of cash flows for the nine month periods ended February 29, 2008 and February 28, 2007. These financial statements are the responsibility of the company's management. We conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), 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 $15,335 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. /s/ Wieseneck, Andres & Company, P.A. North Palm Beach, FL April 14, 2008 3 eCOM eCOM.COM, INC BALANCE SHEETS (Unaudited) February 29, 2008 May 31, 2007 ------------ ------------ ASSETS Current Assets Cash $ 1 $ 91 Notes receivable - related parties 9,358 8,544 Prepaid expenses 595 595 ------------ ------------ Total Current Assets 9,954 9,230 ------------ ------------ Property and Equipment, net - - ------------ ------------ Total Assets $ 9,954 $ 9,230 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Not Subject to Compromise Postpetition trade accounts payable $ 20,273 $ 18,399 Postpetition loans from related parties 5,016 124,738 Accrued postpetition expenses 0 4,686 ------------ ------------ Total Liabilities Not Subject to Compromise 25,289 147,823 ------------ ------------ Liabilities Subject to Compromise Prepetition trade accounts payable - - Prepetition accrued expenses - - Current portion of loans from related parties - - Prepetition interest accrued - - ------------ ------------ Total Liabilities Subject to Compromise - - ------------ ------------ Total Liabilities 25,289 147,823 ------------ ------------ Contingencies - - Stockholders' Equity Common stock, $.0001 par value, 1.5 billion shares authorized, 248,649,733 and 89,707,821 shares issued and outstanding 24,865 8,970 Paid-in capital 7,839,057 7,359,283 Retained Earnings(Deficit) (7,879,257) (7,506,846) ------------ ------------ Total Stockholders' (Deficit) (15,335) (138,593) ------------ ------------ Total Liabilities and Stockholders' Equity $ 9,954 $ 9,230 ============ ============ The accompanying notes are an integral part of these financial statements. 4 ECOM ECOM.COM, INC. STATEMENTS OF OPERATIONS (Unaudited) For the Nine Months Ended February 29, 2008 February 28, 2007 ______________ _______________ Revenues Net Sales $ 0 $ 0 Cost of Sales 0 (110) ______________ _______________ Gross Profit 0 (110) ______________ _______________ Other Operating Expenses General and administrative 365,840 159,073 Interest expense 6,570 10 ______________ ______________ Total Operating Expenses 372,410 159,083 ______________ _______________ Loss from Operations (372,410) (159,193) Other Income (Expense) Comprehensive other Gain/Loss - - ______________ _______________ Net Other Expenses - - ______________ _______________ Net Loss $ (372,410) $ (159,193) ============== =============== Net Loss Per Common Share $ (.003) $ (.003) ============== =============== Weighted Average Shares Outstanding 137,915,362 49,955,112 ============== =============== See accompanying summary of accounting policies, notes to financial statements. 5 ECOM ECOM.COM, INC. STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended February 29, 2008 February 28, 2007 ______________ _______________ Revenues Net Sales $ 0 $ 0 Cost of Sales 0 0 ______________ _______________ Gross Profit 0 0 ______________ _______________ Other Operating Expenses General and administrative 3,257 149,592 Interest expense 1,444 0 ______________ _______________ Total Operating Expenses 4,701 149,592 ______________ _______________ Loss from Operations (4,701) (149,592) Other Income (Expense) Comprehensive other Gain/Loss - - ______________ _______________ Net Other Expenses - - ______________ _______________ Net Loss $ (4,701) $ (149,592) ============== =============== Net Loss Per Common Share $ (.000) $ (.003) ============== =============== Weighted Average Shares Outstanding 233,527,734 49,955,112 ============== =============== See accompanying summary of accounting policies, notes to financial statements. 6 ECOM ECOM.COM, INC. STATEMENTS OF SHAREHOLDERS' DEFICIT FROM MAY 31, 2005, THROUGH FEBRUARY 29, 2008 ---------- Common Stock ----------- Number At Add'l Total of Par Paid In Accumulated Stockholder Shares Value Capital (Deficit) (Deficit) ---------- ------ ------- ------------ ----------- Balance, May 31, 2005 49,955,112 $4,995 $6,569,537 $(7,092,774) $ (518,242) Net Loss - - - (291,121) (291,121) ---------- ------ --------- ----------- ---------- Balance, May 31, 2006 49,955,112 4,995 6,569,537 (7,383,895) (809,363) Stock issued per Bankrupcty order 39,752,709 3,975 789,746 - 793,721 Dated 3/23/07 Net Loss - - - (122,951) (122,951) ---------- ------ --------- ----------- ---------- Balance, May 31, 2007 89,707,821 8,970 7,359,283 (7,506,846) (138,593) Stock issued for Bankrupcty fees 121,254,133 12,126 351,636 - 363,762 Stock issued for repayment of debt 37,687,779 3,769 128,138 - 131,907 Net Loss - - - (372,410) (367,710) ---------- ------ --------- ----------- ---------- Feb. 29, 2008 248,649,733 $24,865 $7,839,057 $(7,879,256) $ (10,634) =========== ======= ========= =========== ========== The accompanying notes are an integral part of these financial statements. 7 eCOM eCOM.COM, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007 (Unaudited) February 29, 2008 February 28, 2007 _______________ _______________ Cash Flows From Operating Activities Cash received from customers $ 0 $ 457 Cash paid to suppliers and employees (479) (5,574) Refunds received from suppliers 2,779 0 Interest paid 0 0 _______________ _______________ Net Cash Flows Used in Operating Activities 2,300 (5,117) _______________ _______________ Cash Flows From Investing Activities Purchase of equipment (0) (0) _______________ _______________ Net Cash Flows Provided By (Used In) Investing Activities (0) (0) _______________ _______________ Cash Flows From Financing Activities Proceeds from note receivable 0 0 Proceeds of loans from stockholders 31 50,219 Repayment of loans to stockholders (1,861) 0 Issuance of note receivable (560) 0 _______________ _______________ Net Cash Flows Provided By (Used In) Financing Activities (2,390) 50,219 _______________ _______________ Net Increase / (Decrease in Cash) (90) 45,102 Cash and Cash Equivalents at Beginning of Period 91 508 _______________ _______________ Cash and Cash Equivalents at End of Period $ 1 $ 45,610 =============== =============== Supplemental Disclosures ------------------------ Non-Cash transactions Stock issued for payment of services 0 0 Stock issued for repayment of debt 0 0 See accompanying summary of accounting policies, notes to financial statements 8 eCOM eCOM.COM, INC. STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007 (Unaudited) Reconciliation of Net Loss to Net Cash Flows Used in Operating Activities: February 29, 2008 February 28, 2007 _______________ _______________ Net Loss $ (372,410) $ (159,193) Add items not requiring outlay of cash: Depreciation and amortization - 110 Convert related party debt to equity 495,670 Cash was increased by: Decrease in accounts receivable - 457 Decrease in prepaid expenses - 65,016 Increase in accounts payable 1,874 34,433 Increase in payable due related parties - - Increase in accrued expenses - - Cash was decreased by: Decrease in payable due related parties (122,748) - Decrease in accrued expenses (4,686) - _______________ _______________ Net Cash Flows Provided/ (Used) in Operating Activities $ 2,300 $ (5,117) =============== =============== See accompanying summary of accounting policies, notes to financial statements. 9 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF OPERATIONS eCom eCom.com, Inc. ("eCom" or "the Company") was incorporated in the State of Florida on June 14, 1994. During the fiscal year ending May 31, 2005 eCom focused on separating all ten of its current business segments, USA SportsNet, Inc., USA Performance Products, Inc., eSecureSoft Corp., USAS Digital, Inc., Pro Card Corporation, AAB National Company, A Classified Ad, Inc., Swap and Shop.net Corp., A Super Deal.com, Inc. and MyZipSoft, Inc. 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. On June 4, 2004 the Company spun-off each of the above listed companies into separate public companies. On December 1, 2003, the Board of Directors of eCom approved the spin-off of eCom's ten (10) operating subsidiary companies, pursuant to SEC Staff Legal Bulletin No. 4. On December 18, 2003, USA SportsNet, Inc. entered into a definitive Asset Acquisition Agreement with American Capital Holdings, Inc., ("ACHI") The Date of Record for the first spin-off, USA SportsNet, Inc. (later renamed American Capital Holdings, Inc., Cusip No. 02503V 10 9/SEC CIK No. 0001288010) was January 5, 2004. The Date of Record for the second spin-off, MyZipSoft, Inc. (Standard & Poor's Cusip No. 628703 10 0/SEC CIK No. 0001290785) was February 23, 2004, and the shares of MyZipSoft were distributed to its shareholders on June 2, 2005. On March 2, 2004, the Board of Directors of eCom approved the spin off of the remaining eight (8) spin off companies in which the Board of Directors voted to issue to their shareholders one (1) share of the company for every one (1) share of eCom owned with a record date to be announced, pursuant to the advice of SEC Staff Legal Bulletin No. 4. Due to the dilemma caused as a direct result of Mr. Panaia's refusal to address the monies advanced to eCom by American Capital, on November 22, 2004, Barney A. Richmond resigned as an Officer and Director of eCom. On November 29, 2004 an involuntary petition was filed against eCom eCom.com, Inc. in the United States Southern District Bankruptcy Court (In Re: Case No. 04-34535 BKC-SHF)under Title 11, Chapter 11 of the United States Bankruptcy Code by petitioning creditors, American Capital Holdings, Inc., Richard Turner, Barney A. Richmond, and ACHI, Inc. The Bankruptcy proceedings were initiated in an effort to implement a viable plan for reimbursement of costs incurred by American Capital Holdings, Inc., the petitioning creditors, and all other creditors/vendors who have not been paid. Most importantly, the proceedings will enable Mr. Richmond to initiate reorganization plans in an effort to restore the shareholder value lost by approximately 6,000 shareholders. The aforementioned creditors are owed in excess of $1 million dollars. A copy of the June 2, 2005 Chapter 11, Title 11 Amended Involuntary Petition of eCom is posted on eCom's website, www.ecomecom.net. A detailed history is available on eCom eCom.com's 10K-SB filing at May 31, 2006, SEC accession number 0001000459-06-000005. On August 18, 2006 the 'Joint Plan of Reorganization of Debtor and American 10 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF OPERATIONS - (CONTINUED) Capital Holdings, Inc.' was filed with the United States Southern District Bankruptcy Court. On August 25, 2006 the accompanying 'Disclosure Statement for Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc.' was filed with the U.S. Bankruptcy Court. On December 28, 2006 the 'First Amended Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc.' and 'First Amended Disclosure Statement for First Amended Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc.' were filed with the Unites States Bankruptcy Court, Southern District of Florida, West Palm Beach Division, see exhibits 99.1 and 99.2. On March 31, 2008 Joint Plan Proponent American Capital Holdings, Inc. and Debtor, eCom eCom.com, Inc. ("Proponents") received a March 28, 2008 United States Southern District of Florida Bankruptcy Court Order Granting Debtor-In- Possession's Motion For Final Decree Closing Case (C.P. #361) and Final Decree (See Exhibits 1 and 2) issued by the Honorable Paul G. Hyman, Jr. which closed eCom's successful Plan of Reorganization in re: Case No. 04-35435-BKC-PGH. In accordance with American Capital Holdings, Inc's August 22, 2006 8-K filing American Capital Holdings, Inc. plans to distribute the Twenty Three Million Nine Hundred Ten Thousand Six Hundred Eighty (23,910,680) common shares as a special reorganization disbursement property dividend to American Capital Holdings, Inc. shareholders. Pursuant to the Plan, the shares were issued by eCom at .026 per share. The shares are subject to forward or reverse splits and are currently being held in escrow. As previously mentioned in the August 22, 2006 8-K filing, the proposed record date for this proposed stock dividend was set five (5) business days subsequent to the Plan of Reorganization's final decree confirmation by the Bankruptcy Court. Due to the ten (10) day United States Bankruptcy Code notice requirements, the record date is set for 5:00 p.m. EST on April 14, 2008. This dividend is classified as a final eCom Plan of Reorganization disbursement property dividend, which will require the following instructions for each American Capital Holdings, Inc. shareholder. 1. In order to perfect delivery of your property dividend shares, if your shares are held in a brokerage account, you must have your broker forward to our offices verification of the amount of shares held in your account, your current mailing and e-mail addresses. The mailing address is required for proof of delivery of the dividend shares whereby we can file a final report with the United States Bankruptcy Court. The e-mail address is required for future communications regarding eCom and the other spin off companies. 2. If your shares are currently held individually in your name in certificate form, please notify American Capital Holdings, Inc. either through (a) United States regular mail at 1016 Clemmons Street, Suite 302, Jupiter, FL 33477-3305; or (b) by facsimile at 561.337.9356; or (c) by e-mail at dividend@achusa.com. These Twenty Three Million Nine Hundred Ten Thousand Six Hundred Eighty (23,910,680) eCom escrowed shares will be distributed on a pro-rata basis based on completion of the above listed criteria. 11 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE A - NATURE OF OPERATIONS - (CONTINUED) Due to the extensive amount of certificate and address preparation, the estimated date to begin mailing these dividend shares is April 30, 2008. Prior to the distribution of the eCom shares, American Capital Holdings is going to verify that it is not deemed an underwriter by the SEC. If American Capital Holdings is deemed to be an underwriter of securities, additional registrations may be required which could delay the stock distribution. The Company does not have any off-balance sheet arrangements. Employees. The Company has no employees. 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 contingent assets and liabilities at the date of the financial statements and accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Revenue from the sale of compression products is also recognized at the time the products are shipped or downloaded. 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. NOTE C - PREPAID EXPENSES Prepaid expenses consist principally of $585 paid its attorney for final settlements related to the bankruptcy proceedings. The remaining $10 is for domain name registrations. 12 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE D - PROPERTY AND EQUIPMENT The following is a summary of property and equipment recorded in the financial statements at cost less depreciation as of Feb. 29, 2008 and May 31, 2007: February 29, 2008 May 31, 2007 -------------- -------------- Computer hardware $ 85,074 $ 85,074 Computer software 13,633 13,633 Furniture, fixtures and equipment 4,330 4,330 --------- --------- Total cost 103,037 103,037 Accumulated depreciation 103,037 103,037 --------- --------- Net Property and Equipment $ - $ - ========= ========= Depreciation expense included in the cost of sales for the periods ended are: $ - $ 110 ========= ========= 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 NOTE E - OTHER ASSETS There are no remaining other assets, other assets consisted primarily of security deposits on the lease of office facilities and utility deposits. NOTE F - LOANS FROM RELATED PARTIES, CURRENT PORTION The non-interest bearing short term loans due on demand from related parties post petition, not subject to compromise, and prepetition, subject to compromise, at February 29, 2008 and May 31, 2007 are as follows: Feb. 29, 2008 May 31, 2007 ------------ ------------ Post petition $ 5,016 $ 124,739 Prepetition - - ---------- ---------- Total Loans from Related Parties $ 5,016 $ 124,738 ========== ========== The prepetition liabilities and related party debt was reduced during the 12 month period ending May 31, 2007 by the issuance of the Companies common stock, paid or settled in accordance with the Chapter 11 reorganization plan approved by the Bankruptcy Court on March 23, 2007. On November 30, 2007 the Company issued an additional 121,254,133 shares to American Capital Holdings, Inc. to settle $363,762 in debt for services incurred during the bankruptcy proceedings. 13 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE G - COST OF SALES Included in the cost of sales are the following: February 29, 2008 February 28, 2007 -------------- -------------- Depreciation 0 110 -------------- -------------- Total $ 0 $ 110 ============== ============== NOTE H - COMMITMENTS AND CONTINGENCIES The Company maintains office facilities leased by American Capital Holdings, Inc. American Capital Holdings has not charged any rent to eCom eCom.com during the nine months ending February 29, 2008 and February 28, 2007. On November 29, 2004, an involuntary petition was filed against eCom eCom.com, Inc. in the United States Southern District Bankruptcy Court (In Re: Case No. 04-34535 BKC-SHF)under Title 11, Chapter 11 of the United States Bankruptcy Code by petitioning creditors, American Capital Holdings, Inc., Richard Turner, Barney A. Richmond, and ACHI, Inc. The Bankruptcy proceedings were initiated in an effort to restore the shareholder value lost by approximately 6,000+ shareholders as well as implement a viable plan for reimbursement of costs incurred by American Capital Holdings, Inc., the petitioning creditors, and all other creditors/vendors who have not been paid. The aforementioned creditors are owed in excess of $1 million dollars. A copy of the June 2, 2005 Chapter 11, Title 11 Amended Involuntary Petition of eCom is posted on the eCom website, www.ecomecom.net. The case was closed on March 28, 2008. NOTE I - RELATED PARTY TRANSACTIONS The Company has received cash advances from David J. Panaia, Chairman and CEO of the Company, until he passed away on March 20, 2005, in varying amounts and at various times subsequent to the inception of the Company. These shareholder loans were non-collateralized and due on demand. The entire amount of stockholder loans due Mr. Panaia was discharged by the bankruptcy court and distributed to the Estate of David J. Panaia on April 23, 2007 in return for the issuance of 7,500,000 shares of common stock. The balance owed to Mr. Panaia and his estate at both February 29, 2008 and May 31, 2007 is $0. The Company has received cash advances from Richard Turner, CFO of the Company, in varying amounts and at various times subsequent to September 1, 2001. These related party loans were non-collateralized and due on demand. The interest portion of these notes has stopped accruing interest after the company was adjudicated bankrupt. The balance owed Mr. Turner of $140,233 was discharged by the bankruptcy court for the issuance of 5,393,579 shares of common stock at the agreed upon price of $.026 per share. The balance owed to Mr. Turner as of February 29, 2008 is $5,319. 14 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE I - RELATED PARTY TRANSACTIONS - (CONTINUED) As part of the debtor-in-possession financing, eCom received $100,000 in financing from American Capital Holdings on June 8, 2005 and an additional $15,186 on July 25, 2005. The balance owed American Capital was discharged by the bankruptcy court for the issuance of 23,795,237 shares of common stock. During the quarter ending November 30, 2007 American Capital Holdings charged the Company $342,645 for services related to restructuring the Company and for reimbursing American Capital Holdings for legal fees incurred to assist in the preparation of the Plan of Reorganization. On November 30, 2007 the Company issued an additional 121,254,133 shares to American Capital Holdings, Inc. to settle $363,762 in debt for services incurred during the bankruptcy proceedings. NOTE J - BUSINESS SEGMENTS As of February 29, 2008 the company no longer had consolidated business segments. The Paintball segment has been distributed to USA Performance Products, Inc., the software segment has been distributed to eSecureSoft Company on June 4, 2004. NOTE K - 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 approximately $15,000 at February 29, 2008 and by approximately $139,000 at May 31, 2007 and that the Company has incurred net operating losses since inception. It is current managements intention to have the Bankruptcy Court order a final decree and order closing case and have the Company came out of Bankruptcy using the provisions of fresh start accounting and then acquire an operating company in order to provide value for the current stockholders. NOTE L - 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: February 29, 2008 -------------- Loss carry forward for tax purposes $ 7,400,000 ============== Deferred tax asset (34%) 2,516,000 Valuation allowance (2,516,000) -------------- Net deferred tax asset - ============== 15 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE L - INCOME TAXES - (CONTINUED) Through February 29, 2008, the Company had a federal income tax net operating loss carry forward of approximately $7,400,000 which will expire through the year 2023. 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 February 29, 2008 was approximately $7,400,000. 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 M - EFFECTS OF INFLATION To date, inflation has not had a material impact on the Company's financial results. NOTE N - RECENT ACCOUNTING PRONOUNCEMENTS The FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, and is effective for financial instruments entered into after May 31, 2003. This Statement establishes standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability because that financial instrument embodies an obligation of the issuer. Statement of Financial Accounting Standards No. 151, Inventory Costs, is an amendment of ARB No. 43, Chapter 4 and is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. This statement amends ARB 43, Chapter 4, to clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. Statement of Financial Accounting Standards No. 152, Accounting for Real Estate Time-Sharing Transactions, is an amendment of FASB Statements No. 66 and 67. Statement of Financial Accounting Standards No. 153, Exchanges of Nonmonetary Assets, was issued in December 2004. The guidance in APB No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets 16 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE N - RECENT ACCOUNTING PRONOUNCEMENTS - (CONTINUED) exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections, was issued in May 2005. This Statement requires retrospective application to prior periods' financial statements of changes in accounting principle, unless it is impracticable to determine either the period- specific effects or the cumulative effect of the change. When it is impracticable to determine the period-specific effects of an accounting change on one or more individual prior periods presented, this Statement requires that the new accounting principle be applied to the balances of assets and liabilities as of the beginning of the earliest period for which retrospective application is practicable and that a corresponding adjustment be made to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) for that period rather than being reported in an income statement. When it is impracticable to determine the cumulative effect of applying a change in accounting principle to all prior periods, this Statement requires that the new accounting principle be applied as if it were adopted prospectively from the earliest date practicable. This Statement requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. Indirect effects of a change in accounting principle, such as a change in nondiscretionary profit- sharing payments resulting from an accounting change, should be recognized in the period of the accounting change. This Statement also requires that a change in depreciation, amortization, or depletion method for long-lived, nonfinancial assets be accounted for as a change in accounting estimate by a change in accounting principle. This Statement carries forward without change the guidance contained in Opinion 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. This Statement also carries forward the guidance in Opinion 20 requiring justification of a change in accounting principle on the basis of preferability. Statement of Financial Accounting Standards No. 155, Accounting for Certain Hybrid Financial Instruments, was issued in February 2006. This Statement permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation; clarifies which interest-only strips and principle-only strips are not subject to the requirements of Statement 133; establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and amends Statement 140 to eliminate the prohibition on a qualifying special- purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. 17 ECOM ECOM.COM, INC. NOTES TO FINANCIAL STATEMENTS NOTE N - RECENT ACCOUNTING PRONOUNCEMENTS - (CONTINUED) Statement of Financial Accounting Standards No. 156, Accounting for Servicing of Financial Assets, was issued in March 2006. This Statement requires an entity to recognize a servicing asset, a contract to service financial assets under which the estimated future revenues from contractually specified servicing fees, late charges, and other ancillary revenues are expected to more than adequately compensate the servicer for performing the servicing, or servicing liability, a contract to service financial assets under which the estimated future revenues from contractually specified servicing fees, late charges, and other ancillary revenues are not expected to adequately compensate the servicer for performing the servicing, each time it undertakes an obligation to service a financial asset by entering into a servicing contract. SFAS No's. 150, 151, 152, 153, 154, 155 and 156 were adopted by the company and did not have a material effect on the Company's financial position or results of operations. 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. 18 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 financial statements for the nine-month periods ended February 29, 2008 and February 28, 2007 and the Form 10-KSB for the fiscal year ended May 31, 2007. On December 1, 2003, the Board of Directors of eCom approved the spin-off eCom's ten (10) operating subsidiary companies. On December 18, 2003, USA SportsNet, Inc. entered into a definitive Asset Acquisition Agreement with American Capital Holdings, Inc. The Date of Record for the first spin-off, USA SportsNet, Inc. (later renamed American Capital Holdings, Inc., Cusip No. 02503V 10 9/SEC CIK No. 0001288010) was January 5, 2004. The Date of Record for the second spin-off, MyZipSoft, Inc. (Standard & Poor's Cusip No. 628703 10 0/SEC CIK No. 0001290785) was February 23, 2004, and the shares of MyZipSoft were distributed to its shareholders on June 2, 2005. On March 2, 2004, the Board of Directors of eCom approved the spinoff of the remaining eight (8) spin off companies in which the Board of Directors voted to issue to their shareholders one (1) share of the company for every one (1) share of eCom owned with a record date to be announced, pursuant to the advice of SEC Staff Legal Bulletin No. 4. On March 29, 2004, eCom Chairman and CEO David Panaia prepared and issued a Press Release announcing the appointment of Barney A. Richmond as President of eCom. Paragraph two (2) of this release stated the following: "The plan to spin-off eCom's ten wholly owned subsidiaries has been completed and the Company is now in the process of acquiring certain businesses for each spin-off. To date, the Company has accomplished two (2) acquisitions and has four (4) more under agreement. When announced, eCom shareholders as of the Date of Payment (distribution of stock) for each spin-off will receive new shares in that company. "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. On April 14, 2004, eCom filed Form 10QSB, file number 000-23617, accession number 0001000459-04-000005. As stated in ITEM 2, Management's Discussion and Analysis, 'All ten (10) business subsidiaries have been spun off into independent operating public companies.' On May 24, 2004, American Capital Holdings, Inc., a spin-off of eCom formerly known as USA SportsNet, Inc., filed a Form 10SB, file number 000-50776, accession number 0001288012-04-000001,SEC CIK number 0001288012,with the United States Securities & Exchange Commission ("SEC"). On July 27, 2004 American Capital Holdings, Inc.'s Form 10SB was ruled effective by the SEC. On June 4, 2004, a corporate resolution was proposed, passed and signed by David Panaia, Chairman/Secretary/CEO, Richard C. Turner, Director and Treasurer and Barney A. Richmond, Director and President. Based on Mr. Richmond's past restructuring experience, the new Board of Directors re-adopted the December 1, 19 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) 2003 spin-off plan, pursuant to SEC Staff Legal Bulletin No.4, for the remaining subsidiaries of eCom. The plan was to create individual public corporations, and take whatever actions necessary to complete the process of enhancing shareholder value, including acquisitions and/or mergers. The individual companies are listed below: USA Performance Products, Inc. FL Corp. No. P98000006586 Fed. ID. 65-0812050 eSecureSoft Company FL Corp. No. P03000138385 Fed. ID. 20-1068608 USAS Digital, Inc. FL Corp. No. P03000147667 Fed. ID. 20-1069232 Pro Card Corporation FL Corp. No. P94000045498 Fed. ID. 20-1442373 AAB National Company FL Corp. No. P04000019818 Fed. ID. 20-1442771 A Classified Ad, Inc. FL Corp. No. P04000038403 Fed. ID. 20-1447963 A Super Deal.com, Inc. FL Corp. No. P04000040174 Fed. ID. 20-1449410 Swap and Shop.net Corp. FL Corp. No. P04000040176 Fed. ID. 20-1449332 The motion in the above described June 4, 2004 Board Resolution included the instructions for the distribution of stock by its Transfer Agent, Florida Atlantic Stock Transfer (FAST) to the proper entities when the share certificates were properly exercised and costs relating to the issuance of these shares were paid in full. Notwithstanding, contrary to what board members Richard Turner and Barney A. Richmond had been previously advised by Chairman Panaia, eCom was not able to pay FAST the amounts required to send out the Stock certificates to the shareholders, and accordingly, the shares were not issued as stated. On November 29, 2004, an involuntary petition was filed against eCom eCom.com, Inc. in the United States Southern District Bankruptcy Court (In Re: Case No. 04-34535 BKC-SHF)under Title 11, Chapter 11 of the United States Bankruptcy Code by petitioning creditors, American Capital Holdings, Inc., Richard Turner, Barney A. Richmond, and ACHI, Inc. The Bankruptcy proceedings were initiated in an effort to restore the shareholder value lost by approximately 6,000+ shareholders as well as implement a viable plan for reimbursement of costs incurred by American Capital Holdings, Inc., the petitioning creditors, and all other creditors/vendors who have not been paid. The aforementioned creditors are owed in excess of $1 million dollars. A copy of the June 2, 2005 Chapter 11, Title 11 Amended Involuntary Petition of eCom is posted on the eCom's website, www.ecomecom.net. Due to Mr. Panaia's health-related issues, during the period of January through mid-March 2005, eCom requested three (3) extensions to reply to the above described Involuntary Chapter 11, Title 11 United States Southern District Bankruptcy Petition In Re: eComeCom.com, Inc. Case No. 04-34535 BKC-SHF. With consideration to Mr. Panaia's declining health, all of the petitioning creditors voluntarily consented to these extensions. Notwithstanding these voluntary extensions, and due to the extensive ongoing telephone inquiries from eCom shareholders who had bought shares in the public marketplace based on the past public press release representations of Mr. Panaia, the management of American Capital and the petitioning creditors had no choice but to make past promises good beginning with getting the spin-off companies in full regulatory 20 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) compliance. This endeavor included the preparation of (a) thirty (30) 10QSB's; (b); ten (10) 10K's; (c) ten (10) Form 10SB's SEC Registration Statements; (d) twenty six (26) total State and Federal Tax Returns; (e) ten (10) applications for the required SEC EDGAR CIK Numbers; (f) and ten (10) of the Transfer Agent- required Standard & Poor's Cusip Numbers. Additionally, there has been a tremendous administrative effort in bringing all the spin-off companies current with respect to public company reporting requirements, including the Sarbanes- Oxley Act. American Capital's management and the petitioning creditors accomplished these tasks to eliminate any further liabilities to eCom shareholders. On March 20, 2005, the Chairman/CEO and majority shareholder of eCom, David J. Panaia, died from health complications. The Company made application to the United States Bankruptcy Court to appoint Barney A. Richmond as its new Chief Executive Officer, whose official appointment was granted by the court on June 6, 2005. Although the process of restoring shareholder value is well underway, both Mr. Richmond and Mr. Turner plan to stay with the company without compensation until the proposed reorganization plans of all the companies are complete. On March 23, 2005, the aforementioned spin-off companies received their respective SEC CIK Acceptance Filings, which are outlined below: Name of SEC/EDGAR Standard & Poor's Spin-off Company CIK No. Cusip No. USA Performance Products, Inc. CIK 0001321509 90341L 10 2 eSecureSoft Company CIK 0001321511 296423 10 6 USAS Digital, Inc. CIK 0001321508 90341K 10 4 Pro Card Corporation CIK 0001321500 74270Q 10 0 AAB National Company CIK 0001321506 000303 10 7 A Classified Ad, Inc. CIK 0001321499 00089Y 10 9 A Super Deal.com, Inc. CIK 0001321507 00210R 10 6 Swap and Shop.net Corp. CIK 0001321510 869894 10 5 In order to facilitate a more reasonable share structure based on the company's existing financial assets, on May 26, 2005 the Board approved a resolution authorizing a 100-to-1 Reverse Split of the outstanding 49,955,112 shares of the spin-off companies. Each company will purchase all fractional shares at market price, thereby resulting in total outstanding shares of 499,503 as of May 27, 2005. The Record Date for the remaining spin-offs was set as May 27, 2005, and all share certificates due to the shareholders of the above referenced companies were mailed on June 2, 2005. A group of several of American Capital Holdings, Inc.'s and other outside shareholders have designated resources to capitalize and complete viable business plans for the all of the above referenced spin-off companies. To begin the process of paying expenses relating to the commencement of their respective business purposes, on May 31, 2005 several new shareholders provided initial 21 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) funding of $400,000 to eight (8) of the above referenced companies. This initial funding was to cover legal, accounting and other expenses, including due diligence costs related to proposed forthcoming acquisitions. More funding is planned for each company in accordance with 506 Reg. D Private Placement procedures, which will become available only to accredited investors. Additionally, a plan is being formulated, subject to bankruptcy court approval, which will provide a 100% payout to all of eCom's outstanding creditors. The new management believes these efforts combined with execution of the new business plans not only will recapture the lost shareholder value of eCom, but will also enhance the viability of future long term shareholder value as well. Acquisitions negotiations are underway and will be separately announced upon completion. Management is confident in their ability to execute these forthcoming plans. On May 16, 2005, eCom and its creditors attended the first status conference in the United States Bankruptcy Court - Southern District of Florida (In Re: Case No. 04-34535 BKC-SHF) in front of the Honorable Judge Steven Friedman. An order was granted to the petitioning creditors adjudicating eCom as a debtor under Chapter 11, Title 11 of the United States Bankruptcy Code. The Order included specific instructions for eCom to retain bankruptcy counsel by June 4, 2005. Pursuant to SEC Staff Legal Bulletin No.4, the issuance of the all the share certificates of the above referenced spin-off companies were sent via certified mail on June 2, 2005 to the shareholders of record as of May 27, 2005. The shareholder list and Certified Mail numbers are appended hereto as exhibit 99.2. On June 3, 2005, eCom, through a $100,000 Debtor In Possession Financing Agreement with American Capital Holdings, Inc., entered into an engagement agreement to retain the legal services of Kluger, Peretz, Kaplan & Berlin to represent the Company in its aforementioned reorganization plans. Both of the financing and legal representation agreements were ordered by the Bankruptcy Court at a hearing which took place June 6, 2005. On behalf of eCom, American Capital Holdings has filed the requisite filings to bring eCom current. The accession number eCom's November 30, 2004 Form 10-QSB is 0001000459-05-000003, and the accession number for eCom's February 28, 2005 Form 10-QSB is 0001000459-05-000004 eCom's file number is 000-23617. On June 6, 2005, a second bankruptcy status conference was held in front of the Honorable Judge Steven Friedman. Two (2) motions were heard with resulting court approval. One was an Court Order for eCom to retain the legal services of Kluger, Peretz, Kaplin & Berlin P.L. The second Court Order was the approval of Barney A. Richmond as the new Chief Executive Officer of eCome Com.com, Inc. Mr. Richmond has significant experience in corporate and bankruptcy reorganizations. Judge Friedman's court order included instructions for Mr. Richmond and Kluger Peretz to commence with the preparation a viable plan of reorganization for eCom and all of the above described spinoff companies, which process is significantly underway including the completion of the May 31, 2005 audits and preparation of the Forms 10-SB for all the above-referenced spinoff companies. 22 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) Section 1145 of the United States Bankruptcy Code allows the Court to use the Exemption of Securities Laws with respect to a qualified reorganization plan, which the Debtor and aforementioned subsidiary spinoff companies plan to use, which was discussed during the aforementioned June 6, 2005 Court Hearing. The above described June 6, 2005 Court Orders are appended herein as Exhibit 99.7. Electronic copies of the May 16, 2005 and June 6, 2005 court transcripts are available on the eCom website, www.ecomecom.net. On July 25, 2005, a third bankruptcy hearing was held in front of the Honorable Judge Steven Friedman. Two (2) orders were granted by the court. The first order granted was: the Debtor is authorized to obtain post-petition financing inthe amount of $100,000.00 from American Capital Holdings, Inc. on the terms and conditions set forth in the motion. The second order granted was: Debtor-in-Possession's Motion for Authorization to: (I) Provide Electronic Service Upon Equity Security Holders and (II) Utilize Executive Mail Service forPurposes of Coordinating and Effectuating Service Upon Equity Security Holders. Electronic copies of the July 25, 2005 transcripts are available on the eCom eCom.com, Inc. website. During April 2006, the petitioning creditors of eCom eCom.com; Barney A. Richmond, Richard C. Turner, and American Capital Holdings, Inc. retained the law firm of Schiff Hardin LLP of Atlanta GA and Chicago IL. The firm of Schiff Hardin, was retained to assist with United States Securities & Exchange Commission ("SEC") related matters, their legal representation is at no cost to eCom. During June 2006 Schiff Hardin prepared a final joint plan of reorganization which has been reviewed by the "SEC". Personnel at the SEC Atlanta Regional offices have completed their suggestions to the plan. Schiff Harding together with the debtor's attorney Kluger, Peretz, Kalplan, Berlin, are currently finalizing the plan. The joint plan of reorganization will be submitted to the United States Bankruptcy Court as soon as it is finalized. On May 3, 2006 the United States Trustee entered a 'Motion of U.S. Trustee to Dismiss Case or Convert to a Case Under Chapter 7'. On June 13, 2006 Schiff Hardin sent a letter, at the request of Mr. Gordon Robinson, Esq. of the SEC to Ms. Denyse Heffner of the U.S. Trustee's office to request postponing this June 19, 2006 hearing. A copy of this letter was appended as Exhibit No. 1 on the May 2006 Debtor's Monthly Financial Report filed with the court on June 16, 2006. On June 15, 2006 the United States Trustee's office filed a Motion with the United States Bankruptcy Court which is titled "AGREED UNITED STATES TRUSTEE'S EX PARTE MOTION FOR CONTINUANCE OF HEARING". A copy of this Motion was appended as Exhibit No. 2 on the May 2006 Debtor's Monthly Financial Report filed with the court on June 16, 2006. Petitioning creditor, American Capital Holdings, Inc. has agreed to pay the United States Trustee any incurred fees. On July 7, 2006 the court ordered that the hearing to consider the US Trustee's Motion to Convert or Dismiss Case has been rescheduled for August 28, 2006 at 4:00 p.m. 23 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) The "Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc." was filed on August 18, 2006 was attached as exhibit 99.4 on the eCom eCom.com May 31, 2006 Form 10-KSB filed on August 29, 2006. The "Disclosure Statement for Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc." was filed on August 25, 2006 was attached as exhibit 99.5 on the eCom eCom.com May 31, 2006 Form 10-KSB. On August 31, 2006 the Honorable Judge Steven H. Friedman signed orders: 1: Setting hearing to consider approval of Disclosure Statement 2: Setting deadline for filing objections to Disclosure Statement 3: Directing plan proponents to serve notice On December 28, 2006 the 'First Amended Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc.' and 'First Amended Disclosure Statement for First Amended Joint Plan of Reorganization of Debtor and American Capital Holdings, Inc.' were filed with the Unites States Bankruptcy Court, Southern District of Florida, West Palm Beach Division. These two documents were attached to the eCom November 30, 2006 Form 10QSB, SEC accession number 001000459-07-000001, as exhibits 99.1. and 99.2. On March 31, 2008 Joint Plan Proponent American Capital Holdings, Inc. and Debtor, eCom eCom.com, Inc. ("Proponents") received a March 28, 2008 United States Southern District of Florida Bankruptcy Court Order Granting Debtor-In- Possession's Motion For Final Decree Closing Case (C.P. #361) and Final Decree (See Exhibits 1 and 2) issued by the Honorable Paul G. Hyman, Jr. which closed eCom's successful Plan of Reorganization in re: Case No. 04-35435-BKC-PGH. In accordance with American Capital Holdings, Inc's August 22, 2006 8-K filing American Capital Holdings, Inc. plans to distribute the Twenty Three Million Nine Hundred Ten Thousand Six Hundred Eighty (23,910,680) common shares as a special reorganization disbursement property dividend to American Capital Holdings, Inc. shareholders. Pursuant to the Plan, the shares were issued by eCom at .026 per share. The shares are subject to forward or reverse splits and are currently being held in escrow. As previously mentioned in the August 22, 2006 8-K filing, the proposed record date for this proposed stock dividend was set five (5) business days subsequent to the Plan of Reorganization's final decree confirmation by the Bankruptcy Court. Due to the ten (10) day United States Bankruptcy Code notice requirements, the record date is set for 5:00 p.m. EST on April 14, 2008. This dividend is classified as a final eCom Plan of Reorganization disbursement property dividend, which will require the following instructions for each American Capital Holdings, Inc. shareholder. 1. In order to perfect delivery of your property dividend shares, if your shares are held in a brokerage account, you must have your broker forward to our offices verification of the amount of shares held in your account, your current mailing and e-mail addresses. The mailing address is required for proof of delivery of the dividend shares whereby we can file a final report with the United States Bankruptcy Court. The e-mail address is required for future communications regarding eCom and the other spin off companies. 24 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) 2. If your shares are currently held individually in your name in certificate form, please notify American Capital Holdings, Inc. either through (a) United States regular mail at 1016 Clemmons Street, Suite 302, Jupiter, FL 33477-3305; or (b) by facsimile at 561.337.9356; or (c) by e-mail at dividend@achusa.com. These Twenty Three Million Nine Hundred Ten Thousand Six Hundred Eighty (23,910,680) eCom escrowed shares will be distributed on a pro-rata basis based on completion of the above listed criteria. Due to the extensive amount of certificate and address preparation, the estimated date to begin mailing these dividend shares is April 30, 2008. Prior to the distribution of the eCom shares, American Capital Holdings is going to verify that it is not deemed an underwriter by the SEC. If American Capital Holdings is deemed to be an underwriter of securities, additional registrations may be required which could delay the stock distribution. Comparison of Results of Operations - Nine Months Ended February 29, 2008 vs. Nine Months Ended February 28, 2007. Revenue for the Nine Months ended February 29, 2008 and Feb. 28, 2007 was $0. Depreciation expense, recorded in cost of sales was $0 for the nine months ended February 29, 2008 and $110 for the nine months ended February 28, 2007. Total operating expenses for the nine months ended February 29, 2008 was $372,410 compared to $159,073 for the nine months ended February 28, 2007 due to the increase in attorney fees allocated from American Capital Holdings, Inc. for services rendered relating to the bankruptcy reorganization. The operations for the nine months ended February 29, 2008 resulted in a net loss of $372,410 versus a net loss of $159,193 recorded in the nine months ended February 28, 2007. No provision for federal and state income taxes has been recorded because the Company has incurred net operating losses since inception. The net operating loss carry-forwards as of February 29, 2008 totals approximately $7,400,000. These carry-forwards will be available to offset future taxable income. If not used, the operating loss carry-forwards will expire from 2010 to 2019. The Company does not believe that the realization of the related deferred income tax assets meets the criteria required by generally accepted accounting principles and, accordingly, deferred income tax assets have remained at $0 as of November 30, 2007. Liquidity and Capital Resources As of February 29, 2008, current assets totaled $9,954 compared to $9,230 at May 31, 2007. Notes Receivable from Related Companies increased from 8,544 at May 31, 2007 to $9,358 at February 29, 2008. 25 ECOM ECOM.COM, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AND PLAN OF OPERATION - (CONTINUED) Net cash provided in operating activities was $2,300 for the nine months ending February 29, 2008. Net cash used in operating activities was $5,117 for the nine months ended February 28, 2007. Financing activities used $2,390 of cash during the current year nine month period from financing received related companies. Financing activities provided $50,209 during the prior year nine month period. 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. 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 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. 26 ITEM 3. CONTROLS AND PROCEDURES - (CONTINUED) 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. On March 31, 2008 Joint Plan Proponent American Capital Holdings, Inc. and Debtor, eCom eCom.com, Inc. ("Proponents") received a March 28, 2008 United States Southern District of Florida Bankruptcy Court Order Granting Debtor-In- Possession's Motion For Final Decree Closing Case (C.P. #361) and Final Decree (See Exhibits 1 and 2) issued by the Honorable Paul G. Hyman, Jr. which closed eCom's successful Plan of Reorganization in re: Case No. 04-35435-BKC-PGH. ITEM 2. Changes in Securities. On November 30, 2007 the Company issued 121,254,133 shares of Common Stock to American Capital Holdings, Inc. for services rendered. ITEM 3. Defaults Upon Senior Securities. None ITEM 4. Submission of Matters to a Vote of Security Holders. None ITEM 5. Other Events. None ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits: Exhibit 3.1 Articles of Amendment to Articles of Incorporation of eCom eCom.com, Inc. dated Sept. 9, 2007 stating: The number of common shares which the Corporation shall have the authority to issue is One Billion Five Hundred Million (1,500,000,000). The common shares shall have a par value of $.0001 per share. The Corporation is also authorized to issue Twenty Million (20,000,000) preferred shares. The preferred shares shall have a par value of $.0001 per share. The preferred shares will have voting rights and conversion rights that will be determined by the Board of Directors. Incorporated by reference to Form 10Q for the period ending August 31, 2007 SEC Accession Number 0001000459-07-000009. 27 ECOM ECOM.COM, INC. Exhibit 31.1 Certification required under Section 302 of the Sarbanes-Oxley Act of 2002 by the CE0 on page 29 Exhibit 31.2 Certification required under Section 302 of the Sarbanes-Oxley Act of 2002 by the CFO on page 30 Exhibit 32 Certification of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act on page 31 (b) Reports on Form 8-K: Form 8-K filed April 3, 2008 accession number 0001000459-08-000002 stating: On March 31, 2008 Joint Plan Proponent American Capital Holdings, Inc. and Debtor, eCom eCom.com, Inc. ("Proponents") received a March 28, 2008 United States Southern District of Florida Bankruptcy Court Order Granting Debtor-In-Possession's Motion For Final Decree Closing Case (C.P. #361) and Final Decree issued by the Honorable Paul G. Hyman, Jr. which closed eCom's successful Plan of Reorganization. In accordance with American Capital Holdings, Inc's August 22, 2006 8-K filing American Capital Holdings, Inc. plans to distribute the Twenty Three Million Nine Hundred Ten Thousand Six Hundred Eighty (23,910,680) common shares as a special reorganization disbursement property dividend to American Capital Holdings, Inc. shareholders. Pursuant to the Plan, the shares were issued by eCom at .026 per share. The shares are subject to forward or reverse splits and are currently being held in escrow. As previously mentioned in the aforementioned August 22, 2006 8-K filing, the proposed record date for this proposed stock dividend was set five (5) business days subsequent to the Plan of Reorganization's final decree confirmation by the Bankruptcy Court. Due to the ten (10) day United States Bankruptcy Code notice requirements, the record date is set for April 14, 2008. SIGNATURES 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 14, 2008 By: /s/ Barney A. Richmond Barney A. Richmond, Chief Executive Officer April 14, 2008 By: /s/ Richard C. Turner Richard C. Turner, Chief Financial Officer 28 Exhibit 31.1 CERTIFICATION REQUIRED UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Barney A. Richmond, 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: April 14, 2008 /s/ Barney A. Richmond -------------------------- Barney A. Richmond Chief Executive Officer 29 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: April 14, 2008 /s/ Richard C. Turner --------------------------- Richard C. Turner Chief Financial Officer 30 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 February 29, 2008, as filed with the Securities and Exchange Commission (the "Report"), Barney A. Richmond, 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/ Barney A. Richmond Barney A. Richmond Chief Executive Officer April 14, 2008 /s/ Richard C. Turner Richard C. Turner Chief Financial Officer April 14, 2008 [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., 1016 Clemmons Street, Suite 302, Jupiter, Florida 33477. 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 and Annual Report to Shareholders nor has it passed upon its accuracy or adequacy. 31