First Ecom.com, Inc. (NASDAQ: FECC, BSX: FECC, FECC BH), a company with
interests in gas and oil exploitation and electronic payment solutions
announced the filing of its Form 10Q and financial results for the third
quarter ended September 30, 2001.
First Ecom posted revenue derived from the Company’s payment processing
operations of $205,928 and $242,836 for the three and nine months ended
September 30, 2001 as compared to $17,355 and $27,887 for the respective three
months and nine months ended September 30, 2000. The increase in revenue for
the three months ended September 30, 2001 was mainly due to the consolidation
of revenue from the start of operations at First Ecommerce Data Services
“The third quarter was a good quarter business-wise,” said Gregory Pek,
president and CEO of First Ecom. “We moved quickly and decisively to obtain
quality assets in our new core business of oil and gas, with the
a working equity interest in Gasco Energy which has participation in almost
500,000 acres of land holdings in Utah and Wyoming. Production from the first
wells in Utah has just commenced and Gasco will be reporting revenue in the
“The future of payment processing in Asia also looks brighter and during the
quarter the Company secured a major outsourcing deal with UOB in Malaysia.
While business was just starting at FEDS the Company thought it prudent to
accept the offer to sell it in order to better focus on oil and gas as well as
Asian payment processing. In addition to these successes we were able to
finalize the productization of our payment gateway and MARS products into a
e-Acquiring system. This has the potential to be another significant revenue
source, as we will no longer be selling only to banks that want to outsource
but also to those banks and other businesses that want in-house systems. Our
market is therefore much larger. These are all very positive developments.”
Net Loss for the third quarter of 2001, before charges for impairment of
goodwill and the write down of marketable securities, was $2,308,178 as
compared to the third quarter of 2000 net loss of $3,623,459 and $4,357,248
the nine months ended September 30, 2001 compared to $10,398,602 for the nine
months ended September 30, 2000.
Net loss per share for the quarter, before charges for impairment and write
down of marketable securities, was $0.12 per share as compared to a net loss
per share of $0.19 for the same quarter in 2000.
As previously announced, the Company has decided to change its business focus
to that of oil and gas development and exploitation and the during the quarter
the Company acquired, for $19 million, a 26% equity interest in Gasco Energy,
Inc. (NASD-OTC-BB: GASE) a company which acquires and exploits natural gas
properties in the Rocky Mountain region of the United States. Included in the
Company’s operating results for the third quarter is a $155,701 charge for the
Company’s equity loss from Gasco Energy.
Gasco Energy is one of the leading companies in the development and
exploitation of natural gas reserves in the Rocky Mountain region of the
States. It has land holdings of some 159,000 acres in the Uinta Basin in
northeast Utah and some 332,000 acres in the Green River Basin of southwest
In October 2001 the Company sold FEDS, with a guaranteed receipt of a minimum
of $5 million, resulting in an impairment charge of $3,159,505, which has been
recorded in the three months ended September 30, 2001.
Operating expenses before the impairment charge for the three months ended
September 30, 2001 were 17% lower than for the comparable period in 2000 and
for the nine months ended September 30, 2001 were 33% lower than for the
comparable period in 2000. This reflects the Company’s concentrated effort on
reducing costs. The operating expenses include restructuring costs of $198,821
incurred during the first two quarters.
As of September 30, 2001, the Company’s net current assets stood at $3.0
million (December 31, 2000: $31.8 million). Net cash used in operating
activities decreased from $6,334,932 for the nine months ended September 30,
2000 to $4,592,465 for the nine months ended September 30, 2001, mainly due to
the significant reduction in operating costs in the first nine months of 2001
as compared to the first nine months of 2000.
Net cash used in investing activities for the nine months ended September 30,
2001 was $23,505,347 as compared to $7,316,048 for the nine months ended
September 30, 2000. The major activities were (i) the acquisition of and
investment in FEDS of $3,984,526 and (ii) acquisition of petroleum assets, in
the form of a 26% equity interest in Gasco Energy, Inc., for $19 million.
Further progress was made during the quarter in the payment processing
by the signing of agreements with United Overseas Bank (Malaysia) (UOB) and
American Express. Revenue as a result of these contracts is expected to
commence during the fourth quarter.
In addition, the Company completed the productization of its e-Acquirer
gateway system. This will allow the Company to sell complete systems to banks
and financial institutions that do not wish to outsource the entire payment
The Company had a total of 24 (including 10 at FEDS) full time employees as at
September 30, 2001 as compared to 56 full time employees, not including FEDS,
as at September 30, 2000. This decrease in employees has resulted in a
recovery, during the nine months ended September 30, 2001, of $2,202,766 of
previously expensed stock-based compensation costs. During the comparable
period ended September 30, 2000, the Company expensed $3,050,794 of
The Company’s financial results for the quarter ended September 30, 2001
accompanied the filing of its Form 10-Q with the Securities & Exchange
Commission on November 14, 2001, which is available on-line at the SEC’s Edgar
database at www.freeedgar.com.
About First Ecom.com
First Ecom.com Inc. has interests in both oil and gas exploitation as well as
being a global provider of electronic payment solutions through its wholly
subsidiary First Ecom Systems Limited.
For more information, visit www.firstecom.com or
contact First Ecom.com at
+(852) 2801-5181 or by e-mail at firstname.lastname@example.org.