U.S.
Securities and Exchange Commission
Washington,
D.C. 20549
____________________
FORM
10-QSB
____________________
(Mark
One)
x Quarterly
Report Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
For
the
quarterly period ended June 30, 2007.
o
Transition Report Pursuant to Section 13 or 15(d)
of
the
Securities Exchange Act
For
the
transition period from N/A to N/A
____________________
Commission
File No. 0-161570
____________________
ECash,
Inc.
(Name
of
small business issuer as specified in its charter)
|
Delaware
|
52-2171803
|
|
State
of Incorporation
|
IRS
Employer Identification No.
|
402
West Broadway 26th
Floor
San
Diego, California 92101
(Address
of principal executive offices)
(619)
564-7100
(Issuer’s
telephone number)
Check
whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 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 o
No x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes o No x
The
number of shares of the issuer’s
common equity outstanding as of June 30, 2007 was 20,326,078 shares
of common stock.
Transitional
Small Business Disclosure Format (check one):
Yes o No x
INDEX
TO FORM 10-QSB FILING
FOR
THE THREE MONTHS ENDED June 30, 2007 AND 2006
TABLE
OF CONTENTS
PART
I
FINANCIAL
INFORMATION
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PAGE
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Item
1.
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As
of June 30, 2007
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3
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For
the Three months ended June 30, 2007 and 2006
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4
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For
the Three months ended June 30, 2007 and 2006
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5
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6
-
12
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Item
2.
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12
- 18
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Item
3.
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18-19
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PART
II
OTHER
INFORMATION
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Item
1.
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20
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Item
2.
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20
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Item
3.
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20
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Item
4.
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20
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Item
5.
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20
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Item
5.
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20
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CERTIFICATIONS
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Exhibit
31 – Management certification
|
20-24
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| |
Exhibit
32 – Sarbanes-Oxley Act
|
20-24
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PART
I – FINANCIAL INFORMATION
ITEM
1 – FINANCIAL STATEMENTS
|
|
|
CONDENSED
BALANCE SHEET
|
| |
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| |
|
June
30,
|
|
| |
|
2007
|
|
| |
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
| |
|
|
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|
CURRENT
ASSETS
|
|
|
|
|
Cash
and cash equivalents
|
|
$ |
-
|
|
|
Accounts
receivable net of allowance for bad debt
|
|
|
23,764
|
|
|
Inventory
|
|
|
64,800
|
|
|
Total
current assets
|
|
|
88,564
|
|
| |
|
|
|
|
|
Property
and equipment - net
|
|
|
6,450
|
|
| |
|
|
|
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|
TOTAL
ASSETS
|
|
$ |
95,014
|
|
| |
|
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LIABILITIES
AND STOCKHOLDERS' DEFICIT:
|
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| |
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CURRENT
LIABILITIES:
|
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
$ |
91,234
|
|
|
Bank
overdraft
|
|
|
3,461
|
|
|
Notes
payable - affiliate
|
|
|
451,254
|
|
|
Total
current liabilities
|
|
|
545,949
|
|
| |
|
|
|
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Total
liabilities
|
|
|
545,949
|
|
| |
|
|
|
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STOCKHOLDERS'
DEFICIT:
|
|
|
|
|
|
Common
Stock, par value $.001, 500,000,000 shares authorized,
|
|
|
20,326
|
|
|
20,326,078
shares issued at June 30, 2007
|
|
|
|
|
|
Additional
paid-in-capital
|
|
|
587,450
|
|
|
Accumulated
deficit
|
|
|
(1,058,711 |
) |
|
Total
stockholders' deficit
|
|
|
(450,935 |
) |
| |
|
|
|
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|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
$ |
95,014
|
|
The
accompanying notes are an integral part of these condensed financial
statements
|
|
|
CONDENSED
STATEMENT OF OPERATIONS
|
|
FOR
THE THREE MONTHS ENDED JUNE 30, 2007 AND 2006
|
| |
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|
June
30,
|
|
| |
|
2007
|
|
|
2006
|
|
| |
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
Revenues
|
|
$ |
52,465
|
|
|
$ |
-
|
|
| |
|
|
|
|
|
|
|
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|
Cost
of goods sold
|
|
|
30,188
|
|
|
|
-
|
|
| |
|
|
|
|
|
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|
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Gross
profit
|
|
|
22,277
|
|
|
|
-
|
|
| |
|
|
|
|
|
|
|
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OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
449,626
|
|
|
|
47,568
|
|
|
Depreciation
and amortization
|
|
|
627
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
450,254
|
|
|
|
47,568
|
|
| |
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(427,977 |
) |
|
|
(47,568 |
) |
| |
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$ |
(427,977 |
) |
|
$ |
(47,568 |
) |
| |
|
|
|
|
|
|
|
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NET
LOSS PER SHARE:
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
| |
|
|
|
|
|
|
|
|
|
Diluted:
|
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
| |
|
|
|
|
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Weighted
Average Common Shares
|
|
|
|
|
|
|
|
|
|
Outstanding
basic and diluted
|
|
|
|
|
|
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Basic
|
|
|
20,326,078
|
|
|
|
682,535
|
|
|
Diluted
|
|
|
20,326,078
|
|
|
|
682,535
|
|
| |
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these condensed financial
statements
|
|
|
|
|
CONDENSED
STATEMENT OF CASH FLOWS
|
|
FOR
THE THREE MONTHS ENDED JUNE 30, 2007 AND 2006
|
| |
|
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|
June
30,
|
|
| |
|
2007
|
|
|
2006
|
|
| |
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|
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CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Net
(loss)
|
|
$ |
(427,977 |
) |
|
$ |
(47,568 |
) |
|
Adjustments
to reconcile net income to net cash
|
|
|
|
|
|
|
|
|
|
(used
in) operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
627
|
|
|
|
-
|
|
|
Reverse
merger adjustment
|
|
|
(34,972 |
) |
|
|
|
|
|
Changes
in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
6,815
|
|
|
|
11,824
|
|
|
Inventory
|
|
|
(1,800 |
) |
|
|
|
|
|
Accounts
payable and accrued liabilities
|
|
|
101,524
|
|
|
|
29,460
|
|
|
Bank
overdraft
|
|
|
3,461
|
|
|
|
|
|
|
Prepaid
expenses
|
|
|
(51,097 |
) |
|
|
|
|
|
Net
cash used in operating activities
|
|
|
(403,418 |
) |
|
|
(6,284 |
) |
| |
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Net
cash used in investing activities
|
|
|
-
|
|
|
|
-
|
|
| |
|
|
|
|
|
|
|
|
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CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Proceeds
from notes payable
|
|
|
398,300
|
|
|
|
6,284
|
|
| |
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
398,300
|
|
|
|
6,284
|
|
| |
|
|
|
|
|
|
|
|
|
(DECREASE)
INCREASE IN CASH
|
|
|
(5,118 |
) |
|
|
-
|
|
|
CASH,
BEGINNING OF QUARTER
|
|
|
5,119
|
|
|
|
-
|
|
|
CASH,
END OF QUARTER
|
|
$ |
0
|
|
|
$ |
-
|
|
| |
|
|
|
|
|
|
|
|
|
The
accompanying notes are an integral part of these condensed financial
statements
|
|
NOTES
TO CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED JUNE 30, 2007 and
2006
1. DESCRIPTION
OF BUSINESS
Except
for historical information contained herein, the following discussion contains
forward-looking statements that involve risks and uncertainties. Such
forward-looking statements include, but are not limited to, statements regarding
future events and the Company’s plans and expectations. Actual
results could differ materially from those discussed herein. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed elsewhere in this Form 10-KSB or incorporated herein by
reference, including those set forth in Management’s Discussion and Analysis
or Plan of Operation.
Overview
ECASH,
INC., a Delaware corporation (formerly known as In-Sports International, Inc.)
(“Company”) was incorporated in Delaware on March 10, 1994, as Beta Acquisition
Corp. In September 1995, the Company changed its name to In-Sports
International, Inc. and in August 2002, changed its name from In-Sports
International, Inc. to ECASH, INC.
The
Company’s predecessor began operations on January 27, 1998, in the athletic
surfacing industry as a distributor for Playfield International, Inc., which
the
Company believes is one of the larger manufacturers of artificial
turf. In December 1998, the Company acquired The Perma Grass
Corporation (“PGC”) as a wholly owned subsidiary in a reverse acquisition
transaction in which the stockholders of PGC were issued 9,000,000 shares of
the
Company’s common stock and became the controlling stockholders of the
Company.
In
February 1999, the Company purchased the name “Ed-Car Construction” (“Ed-Car”)
from an existing entity in exchange for 250,000 shares of the Company’s common
stock, with a view to using the name “Ed-Car Construction” for the Company’s
athletic field construction activities, marketed to high schools, colleges
and
municipalities.
On
December 2, 2002, the Company entered into an exclusive manufacturing agreement
(“Output Agreement”) with George Avery (former president and director of the
Company) and ECASH, INC. (“Avery Georgia”), a private entity doing business in
Rome, Georgia. During June 30, 2006 the Company ceased the
manufacturing and sales of artificial turf products.
On
September 9, 2006 ECash Inc., a Delaware Corporation formerly as Avery Sports
Turf, Inc. acquired all of the issued and outstanding shares of ECash,
Inc., a New Jersey Corporation (“ECNJ”), in exchange for Twenty Million
(20,000,000) post reversed stock split shares of common stock, par value $.001,
of the company. The transaction was consummated in accordance with the terms
of
a share exchange agreement, dated as of March 27, 2006 by and among Avery Sports
Turf, Inc., ECNJ and Richard Schaefer, the sole shareholder and owner of record
of all the outstanding capital stock of ECNJ.
Prior
to
the Exchange Agreement, the Company's common stock traded on the OTCBB under
the
symbol AVST. As a condition to the consummation of the Share Exchange, the
company changed its name from Avery Sports Turf, Inc. to ECash, Inc., effective
May 8, 2006 whereupon the company commenced trading on the OTCBB under the
symbol ECAS. As a further condition to closing, the company effectuated a one
for four hundred reverse stock split of its common stock which was approved
by
its stockholders on May 22, 2006 which reduced the total outstanding shares
of
the common stock of the company from 497,604,800 shares to 1,244,114 shares,
before the issuance of the Company Exchange Shares to Schaefer. The company's
trading symbol then again changed to ECSI on the OTCBB.
The
reclassification of the Company's issued and outstanding Common Stock and
combining them into a lesser number of shares of Common Stock at a ratio of
400:1, such that each four hundred shares of Common Stock issued and outstanding
became one share of Common Stock, but no fractional shares were issued - rather,
such fractional shares were rounded up to the nearest whole number, with any
deficiency being assessed to the largest stockholder of the Corporation (but
retaining the number and kind of the Corporation's authorized capital shares
as
before), effective at the close of business on May 22, 2006, (ii) approval
of a
transaction whereby control of the Company is acquired by the stockholders
of
E-Cash, Inc. ("E-Cash New Jersey"), a New Jersey corporation, pursuant to the
terms of a share exchange agreement (the "Agreement") more particularly
described hereinafter; and (iii) an amendment of the Company's Certificate
of
Incorporation, changing the Company's name to "ECash, Inc.", effective at the
close of business on the day that such amended Certificate of Incorporation
is
filed with the Office of the Secretary of State of the State of Delaware, which
was May 8, 2006.
All
shares issued as of March 27, 2006 in connection with the merger are subject
to
144 and are restricted. Current management recognizes that any
resales of such common shares issued in the share exchange will be issued as
of
the date of the merger and shall only be available for resale pursuant to a
registration statement or exemption from registration pursuant to the rules
and
regulation of the federal securities acts.
On
March
27, 2006, the Company entered into an Agreement and Plan of Reorganization
with
Avery Sports Turf, Inc. (“Avery”) where the Company agreed to exchange all of
its issued and outstanding shares in exchange for newly issued shares of the
new
company. This agreement has been approved by the Board of Directors
of the Company.
On
March
1, 2007, the Company entered into an Agreement and Plan of Merger, by and among
ECash, Inc., a Delaware corporation (“Company”), ECSI Acquisition Corp., a
Florida corporation (“Acquisition Corp.”), and Clarity Imaging International, a
Texas corporation (“Clarity”). Clarity Imaging International, Inc. is a
wholly-owned subsidiary of Bridgetech Holdings International, Inc., which is
publicly traded under the symbol BTGH.PK. The closing of this transaction took
place in June 2007 when there was a final delivery of stock and
cash. Reflecting the completion of this merger, the Company had
20,326,078 common shares outstanding as of June 30, 2007. Bridgetech
Holdings International, Inc. held 12,390,400 shares of the Company as of this
date, which shares represented 61 percent of the Company’s outstanding
shares.
As
part
of this two pronged Agreement, Acquisition Corp. was merged with and into
Clarity at which time the separate legal existence of Acquisition Corp. ceased
and Clarity became the surviving corporation in the First
Merger. Clarity then merged with and into the Company (sometimes
hereinafter referred to as the “Surviving Corporation”), and thereafter the
separate existence of Clarity ceased to exist and at which time the Company
succeeded to all of the rights, privileges, powers and property, including,
without limitation, all rights, privileges, franchises, patents, trademarks,
licenses, registrations, bank accounts, contracts, patents, copyrights and
other
assets of every kind and description of Clarity and continued its corporate
existence under the laws of the State of Delaware.
2. BASIS
OF PRESENTATION
Interim
Financial Statements
The
accompanying interim unaudited Condensed Consolidated financial information
has
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations, although management
believes that the disclosures are adequate to make the information presented
not
misleading. In the opinion of management, all adjustments, consisting only
of
normal recurring adjustments, necessary to present fairly the financial position
of the Company as of June 30, 2007 and the related operating results and cash
flows for the interim period presented have been made. The results of operations
of such interim period are not necessarily indicative of the results of the
full
fiscal year. For further information, refer to the financial statements and
footnotes thereto included in the Company’s 10-KSB and Annual Report for the
fiscal year ended March 31, 2007.
3.
GOING
CONCERN
As
indicated in the accompanying financial statements, the Company has incurred
cumulative net operating losses of $(1,058,711) since inception. The
Company’s activities to date have been funded by its parent company, Bridgetech
Holdings International, Inc. and the existing business plans require $1.0 to
$2.0 million over he next several years to implement the acquisition and
development of imaging centers and to acquire and market the diagnostic products
that have been identified. There is no assurance that additional
funds of this magnitude will be advanced by the parent company or that
sufficient investor interest will be developed to provide this level of funding.
These matters raise substantial doubt about the Company’s ability to continue as
a going concern. However, the accompanying financial statements have
been prepared on a going concern basis, which contemplates the realization
of
assets and satisfaction of liabilities in the normal course of
business. These financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the
liabilities that might be necessary should the Company be unable to continue
as
a going concern.
4.
EQUITY
During
three months ended June 30, 2007:
|
Year
Ended 2007
|
|
|
|
|
|
|
|
Stock
issued
|
|
|
Stock
Cancelled
|
|
| |
|
|
|
|
|
|
|
in
Acquisition
|
|
|
in
Acquisition
|
|
|
April
5, 2007
|
|
|
|
|
|
|
|
|
|
|
4,165,500
|
|
|
|
|
|
June
8, 2007
|
|
|
|
|
|
|
|
|
|
|
16,032,464
|
|
|
|
|
|
June
28, 2007
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
(21,116,000 |
) |
|
Total
Issued/Cancelled
|
|
|
|
|
|
|
|
|
|
|
20,197,964
|
|
|
|
(21,116,000 |
) |
During
the year ended June 30, 2007 the Company did not issue any common
shares. In April and June of 2007, the Company issued 20,197,964
shares of its common stock in an acquisition of Clarity Imaging International,
Inc. The Company further cancelled 21,116,000 shares of common stock
pursuant to the agreement for the acquisition of Clarity which closed in June
2007 with the final delivery of all common stock in accordance with the
agreement.
ITEM
2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management’s
Discussion and Analysis contains various “forward looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
regarding future events or the future financial performance of the Company
that
involve risks and uncertainties. Certain statements included in this Form
10-QSB, including, without limitation, statements related to anticipated cash
flow sources and uses, and words including but not limited to “anticipates”,
“believes”, “plans”, “expects”, “future” and similar statements or expressions,
identify forward looking statements. Any forward-looking statements herein
are
subject to certain risks and uncertainties in the Company’s business, including
but not limited to, reliance on key customers and competition in its markets,
market demand, product performance, technological developments, maintenance
of
relationships with key suppliers, difficulties of hiring or retaining key
personnel and any changes in current accounting rules, all of which may be
beyond the control of the Company. The Company adopted at management’s
discretion, the most conservative recognition of revenue based on the most
astringent guidelines of the SEC in terms of recognition of software licenses
and recurring revenue. Management will elect additional changes to revenue
recognition to comply with the most conservative SEC recognition on a forward
going accrual basis as the model is replicated with other similar markets (i.e.
SBDC). The Company’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth therein.
Forward-looking
statements involve risks, uncertainties and other factors, which may cause
our
actual results, performance or achievements to be materially different from
those expressed or implied by such forward-looking statements. Factors and
risks
that could affect our results and achievements and cause them to materially
differ from those contained in the forward-looking statements include those
identified in the section titled “Risk Factors” in the Company’s Annual Report
on Form 10-KSB for the year ended March 31, 2007, as well as other factors
that
we are currently unable to identify or quantify, but that may exist in the
future.
In
addition, the foregoing factors may affect generally our business, results
of
operations and financial position. Forward-looking statements speak only as
of
the date the statement was made. We do not undertake and specifically decline
any obligation to update any forward-looking statements.
Overview
and Plan of Operations
The
Company is an early stage company that is not yet profitable. The
Company is presently generating revenue from providing consulting services
to
hospitals and medical centers which activity is not sufficient to cover
costs.
During
the balance of 2007 and into 2008, the Company will shift its emphasis from
consulting activities to the establishment of imaging centers and the sale
of
diagnostic products. The Company introduced the EsoPill program in Dallas in
mid
2006 and enrolled more than 450 physicians. The program is awaiting billing
approval by major insurers and Medicare and is expected to the provide revenues
in calendar 2007. In addition, the Company is acquiring rights to
several unique diagnostic products for sale in the US. Further, the
Company expects to take advantage of the growing demand for osteoporosis
screening by acquiring a mobile DEXA scanning firm that is operating in the
Midwest. During the next 2 years, the Company intends to spend
between $1,000,000 and $2,000,000 to purchase product distribution rights,
hire
additional staff and fund the expansion of imaging centers, although our ability
to do so will depend on our ability to raise additional funds.
The
Company has incurred an accumulated deficit of approximately ($1,058,711) as
of
June 30, 2007, and current liabilities exceeded current assets by approximately
$457,385 at of June 30, 2007. We cannot assure you that we will be successful
in
these fundraising activities.
Critical
Accounting Policies
We
prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires the use of estimates and assumptions
that
affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Our
management periodically evaluates the estimates and judgments made. Management
bases its estimates and judgments on historical experience and on various
factors that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates as a result of different assumptions
or
conditions.
Revenue
Recognition
Revenue
from product sales is recognized upon shipment to customers at which time such
customers are invoiced. Units are shipped under the terms of FOB shipping point
when determination is made that collection is probable. Revenues for services
are recognized upon completion of the services. For consulting services and
other fee-for-service arrangements, revenue is recognized upon completion of
the
services. The Company has adopted the Securities and Exchange Commission’s Staff
Accounting Bulletin (SAB) No. 104, which provides guidance on the recognition,
presentation and disclosure of revenue in financial
statements.
Share-Based
Payment
In
December 2004, the FASB issued a revision of SFAS 123 ("SFAS 123(R)") that
requires compensation costs related to share-based payment transactions to
be
recognized in the statement of operations. With limited exceptions, the amount
of compensation cost will be measured based on the grant-date fair value of
the
equity or liability instruments issued. In addition, liability awards will
be
re-measured each reporting period. Compensation cost will be recognized over
the
period that an employee provides service in exchange for the award. SFAS 123(R)
replaces SFAS 123 and is effective as of the beginning of January 1, 2006.
Based
on the number of shares and awards outstanding as of December 31, 2005 (and
without giving effect to any awards which may be granted in 2006), we do not
expect our adoption of SFAS 123(R) in January 2006 to have a material impact
on
the financial statements.
FSP
FAS
123(R)-5 was issued on October 10, 2006. The FSP provides that instruments
that
were originally issued as employee compensation and then modified, and that
modification is made to the terms of the instrument solely to reflect an equity
restructuring that occurs when the holders are no longer employees, then no
change in the recognition or the measurement (due to a change in classification)
of those instruments will result if both of the following conditions are met:
(a). There is no increase in fair value of the award (or the ratio of intrinsic
value to the exercise price of the award is preserved, that is, the holder
is
made whole), or the antidilution provision is not added to the terms of the
award in contemplation of an equity restructuring; and (b). All holders of
the
same class of equity instruments (for example, stock options) are treated in
the
same manner. The provisions in this FSP shall be applied in the first reporting
period beginning after the date the FSP is posted to the FASB website. The
Company has adopted SP FAS 123(R)-5 but it will not have a material impact
on
its consolidated results of operations and financial condition.
Our
company, ECash, Inc. (the “Company”) is an early-stage company focused primarily
on the business of acquiring and operating imaging centers and selling
diagnostic products. Our strategy is to focus on the development of three
distinct activities: the acquisition and operation of imaging centers, some
with
maintenance contracts; the sale of ESO pills and the development of physician
relationships to further this activity; and the acquisition and sale of unique
diagnostic products.
Clarity
Imaging International, Inc.
Clarity
Imaging International, Inc. (“Clarity”) which specializes in the packaging and
delivery of diagnostic services and other innovative and highly leveragable
health care technologies and/or services. Clarity will focus on a number of
imaging related businesses. The first business will be the development and
management of medical imaging centers, these centers would be developed with
Hospitals and Radiology Groups. Clarity will be an equity partner in many
of these centers as well as having a long term management services contract
to
operate the center.
Another
major line of business will be the development of physician office based
diagnostic services. Management anticipates that in late 2007 and the first
quarters of 2008 Clarity will also be developing an Esophageal Capsule Endoscopy
program. Esophageal capsule endoscopy is a diagnostic procedure that
allows a physician to "look" into the esophagus or swallowing tube without
the
oral passage of an endoscope. This exam does not replace upper endoscopy to
view
the stomach and proximal small bowel.
The
capsule transmits the images to a recording device worn about a patient's waist.
Once the study is completed, the recording device is downloaded to a computer
workstation whose software provides the images to a computer screen. The capsule
is disposable and does not need to be retrieved by a patient.
This
service allows a primary care physician to prescribe a diagnostic test that
replaces the need for endoscopic intervention and to earn revenue through the
provision of the service in their office. The reimbursement for this service
is
in process with Medicare approving its use for portal hypertension.
Studies are underway for the inclusion of GERD (also known as acid reflux)
and
other diseases of the Esophagus.
Imaging Center
development business will come through Clarity’s already nationally established
reputation and experience in the imaging field. Clarity’s management
expects to add 4-5 centers in late 2007 and 2-3 centers each of the next 3
years.
The
physician practice based services will be heavily marketed through national
medical associations and through the manufactures assistance through their
national marketing and advertising programs.
In
addition to imaging services, Clarity also provides management services that
include billing, scheduling, and asset purchasing and overall operational
management. These imaging centers perform magnetic resonance imaging (MRI)
on
patients for diagnostic purposes and may begin to perform MRI guided,
non-invasive surgery for therapeutic purposes. Clarity generates revenues by
charging management fees to facilities. Clarity currently has three
employees.
Merger
On
March
1, 2007, we entered into an agreement and plan of Merger, by and among E Cash,
Inc. a Delaware Corporation (“Company”), ECSI Acquisition Corp., a Florida
Corporation (“Acquisition Corp.”) and Clarity Imaging international, a Texas
Corporation (“Clarity”). Clarity specializes in the packaging and delivery of
diagnostic services and other innovative and highly leveragable health care
technologies and or services. As part of the plan of merger, the Company will
change its name to ClarityMD, Inc. The Merger agreement was finalized
on June 1, 2007, whereby all the officers and directors of the Company resigned
and the officers of Clarity were appointed. For accounting purposes,
the merger will be treated as a reverse merger and the historical financial
statements of Clarity will become the historical financial statements of the
Company. At the closing on June 1, 2007 the Company issued 20,197,964
shares of its common stock in exchange for Clarity’s common stock. It
additionally cancelled 21,116,000 of previously issued stock of prior
mergers. The spin off transaction closed in June 2007 and will be
reflected in our second quarter filings.
It
is
expected that within the next thirty days, Ecash will change its name to Clarity
MD upon filing amended articles of incorporation and requesting the name
change. This will be accompanied by the issuance of a new ticker
symbol and a three for one stock split.
Stock
Option Plan
On
April
16, 2007, the Company’s board of directors adopted and the shareholders approved
the ClarityMD, Inc. 2007 stock option plan. The plan permits grants
to be made from time to time as non-qualified stock options or incentive stock
options. Qualified directors, officers, employees, consultants and
advisors to the Company are eligible for awards. Options are to be
granted at no less than the fair market value at date of grant and generally
exercisable for a period up to ten years. The maximum number of
shares to be issued under the plan is 1,000,000 shares. To date,
there have been no options issued under the plan
Forward
Stock Split
On
June
5, 2007, the Board of directors approved a 3:1 forward stock split which will
increase the outstanding shares to 51,200,000.
Preferred
Stock
On
June
5, 2007, the board of directors amended the Company’s Articles of Incorporation
to include 5,000,000 of Preferred Stock with rights and preferences as
designated by the Board of Directors. The Preferred Stock has a par
value of $0.001 per share.
Additional
Information
Ecash
files reports and other materials with the Securities and Exchange
Commission. These documents may be inspected and copied at the
Commission’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.,
20549. You can obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. You can
also get copies of documents that the Company files with the Commission through
the Commission’s Internet site at www.sec.gov.
Results
of Operations
Revenues
The
Company reported revenues of $52,465 in the quarter ended June 30, 2007,
solely the result of consulting activities provided for hospitals and medical
centers. No revenues were reported for the comparable quarter of 2006 as the
Company was dormant during this quarter.
Cost
of Goods Sold
Cost
of
Goods Sold totaled $30,188 for the quarter ended June 30, 2007 and consisted
of
travel and other expenses incurred to generate the consulting revenues. Cost
of
Sales in the quarter was 58 percent of revenues.
General
& Administrative
General
and Administrative Costs totaled $449,626 for the quarter ended June 30, 2007,
compared to $47,568 reported in the comparable quarter of
2006. General and Administrative expenses in the quarter just ended
included salaries and cost related to employees of Clarity Imaging, Inc. ,
and
costs related to the acquisition of the ESO Pill operations, as well as
accounting and legal fees incurred for the merger transaction. General and
Administrative costs reported in the first quarter of 2006 reflected the lower
level of activity in a dormant corporation.
Depreciation
Depreciation
expense was $647 in June 30, 2007. No depreciation expense was
recorded for the quarter ended June 30, 2006
Liquidity
and Capital Resources
We
do not
presently generate sufficient revenue to fund our operations and the planned
development of our business. In order to sustain our current operations and
develop our business plan, we will require funds for working
capital. We are attempting to raise additional working
capital through the sale of equity, debt or a combination of equity and debt.
We
do not presently have any firm commitments for additional working capital and
there are no assurances that such capital will be available to us when needed
or
upon terms and conditions which are acceptable to us. If we are able to secure
additional working capital through the sale of equity securities, the ownership
interests of our current stockholders will be diluted. If we raise additional
working capital through the issuance of debt or additional dividend paying
securities our future interest and dividend expenses will increase. If we are
unable to secure additional working capital as needed, our ability to grow
our
sales, meet our operating and financing obligations as they become due and
continue our business and operations could be in jeopardy.
The
Company has financed operations by advances from its parent, Bridgetech Holdings
International, Inc. which total $451,254 to the Company through June 30,
2007.
ITEM
3. CONTROLS
AND
PROCEDURES
Evaluation
of Disclosure Controls and Procedures
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a.
Evaluation of Disclosure Controls and
Procedures.
|
Under
the
supervision and with the participation of our management, including our Chief
Executive Officer and Principal Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”). Disclosure controls and procedures
are the controls and other procedures that we designed to ensure that we record,
process, summarize and report in a timely manner the information we must
disclose in reports that we file with or submit to the Securities and Exchange
Commission under the Exchange Act. Based on this evaluation, our Chief Executive
Officer and our Principal Financial Officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered
by
this report.
Disclosure
controls and procedures are controls and procedures that are designed to ensure
that information required to be disclosed in our reports filed or submitted
under the Securities Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission’s rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our principal executive
officer and our principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.
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b.
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Changes
in Internal Control over Financial
Reporting
|
During
the Quarter ended June 30, 2007, there was no change in our internal control
over financial reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART
II – OTHER INFORMATION
Ecash
is
involved in various legal proceedings and claims as described in our Form 10-SB
for the year ended March 31, 2007. No material developments occurred in any
of
these proceedings during the quarter ended June 30, 2007. The costs and results
associated with these legal proceedings could be significant and could affect
the results of future operations.
ITEM
2. CHANGES IN SECURITIES AND SMALL BUSINESS ISSUER
PURCHASES OF EQUITY SECURITIES
There
were no changes in securities and small business issuer purchase of equity
securities during the period ended June 30, 2007.
ITEM
3. DEFAULTS UPON SENIOR
SECURITIES
There
were no defaults upon senior securities during the period ended June 30,
2007.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
There
were no matters submitted to the vote of securities holders during the period
ended June 30, 2007.
ITEM
5. OTHER INFORMATION
None.
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Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act
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|
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Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act.
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| |
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Certification
of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act.
|
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Certification
of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
Act.
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SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorized.
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Registrant
Date:
August
14, 2007
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ECash,
Inc.
By:
/s/ Michael Chermak
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Michael
Chermak
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Chairman,
President Chief Executive Officer (Principle Executive
Officer)
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