<PAGE>

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

           (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                    For the quarter ended September 30, 1998

                        Commission File number 000-23547

                            E.COM INTERNATIONAL, INC.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)

                 Oregon                                        91-1600822
--------------------------------------------------------------------------------
        (State of Incorporation)                          (Federal I.R.S. No.)

 7737 S.W. Cirrus Drive, Beaverton, Oregon                       97008
--------------------------------------------------------------------------------
 (Address of principal executive offices)                      (Zip Code)

                   Registrant's Telephone Number: 503-671-9900
--------------------------------------------------------------------------------

       Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 October 26 1998, the Registrant had 2,375,577 shares of
                          Common Stock outstanding.

--------------------------------------------------------------------------------

                 DOCUMENTS INCORPORATED BY REFERENCE: None

--------------------------------------------------------------------------------

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            E.COM INTERNATIONAL, INC.

                              FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                         <C>
INDEX

Balance Sheets as of September 30, 1998 and December 31, 1997............................... 3

Statements of Operations for the Three and Nine Months Ended September 30, 1998 and 
 September 30, 1997......................................................................... 4

Statements of Cash Flows for the Nine Months Ended September 30, 1998 and 
 September 30, 1997......................................................................... 5

Notes to Financial Statements............................................................... 6
</TABLE>

                                     -2-
<PAGE>

                            E.COM INTERNATIONAL, INC.
                      (A Company in the Development Stage)

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                      SEPTEMBER 30,    DECEMBER 31,
                                                          1998            1997
                                                      -------------    ------------
                                                       (Unaudited)
<S>                                                   <C>              <C>
Current assets:
  Cash and cash equivalents.........................   $   132,997     $ 1,839,281
  Accounts receivable...............................        29,336               -
  Inventories.......................................       374,358         315,023
  Prepaid expenses and other assets.................        34,743          19,156
                                                       -----------     -----------
             Total current assets...................       571,434       2,173,460
                                                       -----------     -----------
Property and equipment, net.........................       394,984         380,206
Intangible assets, net..............................        11,285          19,833
Prepaid software royalties, net.....................        44,745          40,750
                                                       -----------     -----------
                                                        $1,022,448      $2,614,249
                                                       -----------     -----------
                                                       -----------     -----------

             LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable..................................   $   203,665     $   237,245
  Accrued liabilities...............................        49,476          95,558
  Notes payable to shareholder......................             -         195,000
  Current portion of capital lease obligations......         2,555           2,144
                                                       -----------     -----------
             Total current liabilities..............       255,696         529,947
                                                       -----------     -----------
Capital lease obligations, less current portion.....         9,096          11,087

Commitments

Shareholders' equity:
  Common stock, no par value, authorized 10,000,000
  shares; 2,375,577  issued and outstanding at
  September 30, 1998 and December 31, 1997..........     3,284,641       3,386,025
  Warrants outstanding..............................     1,268,146       1,268,146
  Deficit accumulated during the development stage..    (3,792,815)     (2,580,956)
  Accumulated other comprehensive income............        (2,316)             --
                                                       -----------     -----------
             Total shareholders' equity.............       757,656       2,073,215
                                                       -----------     -----------
                                                       $ 1,022,448     $ 2,614,249
                                                       -----------     -----------
                                                       -----------     -----------
</TABLE>

See accompanying notes to financial statements.

                                     -3-
<PAGE>

                            E.COM INTERNATIONAL, INC.
                      (A Company in the Development Stage)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                   Period from
                                                                                                                  April 4, 1996
                                                             Three months ended             Nine months ended       (date of
                                                                September 30,                 September 30,       inception) to
                                                          ----------------------     -------------------------    September 30,
                                                             1998         1997          1998            1997          1998
                                                          ----------------------     -------------------------    -------------
<S>                                                       <C>          <C>           <C>            <C>           <C>
Sales..................................................   $   27,875       1,650     $    77,200         1,650     $   102,437
Cost of sales..........................................       23,405       1,166          54,255         1,166          76,052
                                                          ----------------------     -------------------------     -----------
        Gross profit...................................        4,470         484          22,945           484          26,385
                                                          ----------------------     -------------------------     -----------
Operating expenses:                                                                                               
  Research and development.............................      139,396     117,437         458,232       750,270       1,801,731
  Sales and marketing..................................       50,713      49,732         173,723       166,707         501,839
  General and administrative...........................      221,369     196,704         627,117       451,805       1,525,731
                                                          ----------------------     -------------------------     -----------
                                                             411,478     363,873       1,259,072     1,368,782       3,829,301
                                                          ----------------------     -------------------------     -----------
        Loss from operations...........................     (407,008)   (363,389)     (1,236,127)   (1,368,298)     (3,802,916)

Other income (expense):                                                                                           
  Interest income......................................        3,741         972          28,235         4,976          47,374
  Interest expense.....................................         (382)     (7,014)         (3,967)      (23,794)        (37,273)
                                                          ----------------------     -------------------------     -----------
        Loss before provision for income taxes.........     (403,649)   (369,431)     (1,211,859)   (1,387,116)     (3,792,815)

Provision for income taxes.............................           --          --              --            --              --
                                                          ----------------------     -------------------------     -----------
        Net loss.......................................   $ (403,649)   (369,431)    $(1,211,859)   (1,387,116)    $(3,792,815)
                                                          ----------------------     -------------------------     -----------
                                                          ----------------------     -------------------------     -----------
Other comprehensive income (expense), net of tax:                                                                 
  Foreign currency translation adjustments.............       (2,316)         --          (2,316)           --          (2,316)
                                                          ----------------------     -------------------------     -----------
        Comprehensive loss.............................   $ (405,965)   (369,431)    $(1,214,175)   (1,387,116)    $(3,795,131)
                                                          ----------------------     -------------------------     -----------
                                                          ----------------------     -------------------------     -----------
Basic and diluted loss per share.......................   $    (0.17)      (0.27)    $     (0.51)        (1.14)    $     (2.45)
                                                          ----------------------     -------------------------     -----------
                                                          ----------------------     -------------------------     -----------
Shares used in calculation.............................    2,375,577   1,382,986       2,375,577     1,219,049       1,545,369
                                                          ----------------------     -------------------------     -----------
                                                          ----------------------     -------------------------     -----------
</TABLE>

See accompanying notes to financial statements.

                                     -4-
<PAGE>

                            E.COM INTERNATIONAL, INC.
                      (A Company in the Development Stage)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                              Period from
                                                                                                             April 4, 1996
                                                                         Nine months      Nine months           (date of
                                                                            ended            ended           inception) to
                                                                        September 30,    September 30,       September 30,
                                                                             1998             1997                1998
                                                                        -------------    -------------       -------------
<S>                                                                     <C>               <C>                <C>
Cash flows from operating activities:
  Net loss.........................................................     $(1,211,859)      $(1,387,116)       $(3,792,815)
  Adjustments to reconcile net loss to net cash used
    in operating activities:
       Depreciation and amortization...............................          43,140            79,420            170,221
 Write-off of acquired products in development.....................                                               39,098
 Changes in operating assets and liabilities:
            Accounts receivable....................................         (29,370)               --            (29,370)
            Inventories............................................         (59,335)         (298,188)          (372,432)
            Prepaid expenses and other assets......................         (20,008)          (85,468)          (110,391)
            Accounts payable and accrued liabilities...............         (79,803)          185,954            253,000
                                                                        ------------      -----------        -----------
            Net cash used in operating activities..................      (1,357,235)       (1,505,398)        (3,842,689)
                                                                        ------------      -----------        -----------
Cash flows from investing activities:
  Capital expenditures.............................................         (48,917)         (124,134)          (508,533)
  Acquisition of EnBloc assets.....................................              --                --            (31,543)
                                                                        ------------      -----------        -----------
           Net cash used in investing activities...................         (48,917)         (124,134)          (540,076)
                                                                        ------------      -----------        -----------
Cash flows from financing activities:
            Proceeds (expenses) from sale of common stock and
             warrants, net.........................................        (101,384)        2,012,563          4,446,991
            Proceeds from issuance of notes payable
             to shareholders.......................................              --           175,000            420,000
            Principal payments under capital lease obligation......          (1,580)             (785)            (2,857)
            Repayment of notes payable to shareholders.............        (195,000)         (175,000)          (320,000)
            Repayment of contract payable..........................              --           (32,000)           (32,000)
            Advance payment by shareholders for common
             stock.................................................              --                --                 --
            Payments received on subscriptions receivable from
             sale of stock.........................................              --             5,796              5,796
                                                                        -----------       -----------        -----------
            Net cash provided by (used in) financing activities....        (297,964)        1,985,574          4,517,930
Effect of exchange rate changes on cash and cash equivalents.......          (2,168)               --             (2,168)
                                                                        -----------       -----------        -----------
            Net increase (decrease) in cash and cash equivalents...      (1,704,116)          356,042            135,165
Cash and cash equivalents at beginning of period...................       1,839,281            16,190                 --
                                                                        -----------       -----------        -----------
Cash and cash equivalents at end of period.........................     $   132,997       $   372,232        $   132,997
                                                                        -----------       -----------        -----------
                                                                        -----------       -----------        -----------
Supplemental disclosure of cash flow information:
  Cash paid during the period for interest.........................     $     2,784       $    14,011        $    20,972
                                                                        -----------       -----------        -----------
                                                                        -----------       -----------        -----------
</TABLE>

-------------------------------------------------------------------------------

                                     -5-
<PAGE>

-------------------------------------------------------------------------------
ITEM 1.      NOTES TO FINANCIAL STATEMENTS


     NOTE 1 - BASIS OF PRESENTATION

       The unaudited financial information furnished herein reflects all
adjustments that in the opinion of management are necessary to fairly state the
Company's financial position, the changes in its financial position and the
results of its operations for the periods presented. This report on Form 10-Q
should be read in conjunction with the Company's financial statements and notes
thereto included on Form 10-K for the year ended December 31, 1997. The Company
assumes that users of the interim financial information herein have read or have
access to the audited financial statements for the preceding fiscal year and
that the adequacy of additional disclosure needed for a fair presentation may be
determined in that context. Accordingly, footnote disclosure which would
substantially duplicate the disclosure contained in the Company's financial
statements for the year ended December 31, 1997 has been omitted. The results of
operations for the nine month period ended September 30, 1998 are not
necessarily indicative of results for the entire year ended December 31, 1998.


       NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

       CONSOLIDATION POLICY

       The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary. All material intercompany
transactions and balances have been eliminated.

       FOREIGN CURRENCY TRANSLATION

     The functional currency of the Company's foreign subsidiary is the local
currency. The assets and liabilities of the subsidiary are translated into U.S.
dollars at the current exchange rate as of the balance sheet date. Revenues and
expenses are translated using a weighted average exchange rate for the reporting
period. Adjustments resulting from the translation of the subsidiary's financial
statements are included as a separate component of shareholders' equity.

     Cash flows from the subsidiary are calculated using its functional
currency. As a result, changes in assets and liabilities reported on the
consolidated statements of cash flows will not necessarily agree to changes in
the corresponding items on the consolidated balance sheets. The effect of
exchange rate changes on cash balances held in foreign currencies is reported as
a separate line item in the consolidated statements of cash flows.

                                     -6-
<PAGE>

     NOTE 3 - INVENTORIES

     Inventories are comprised of the following as of September 30, 1998 and
December 31, 1997:

<TABLE>
<CAPTION>
                                         1998                       1997
                                     -----------                  ---------
                                     (Unaudited)
<S>                                  <C>                          <C>
Raw Materials                          $235,123                   $ 315,023
Work in Process                         139,235                          --
                                       --------                   ---------
                                       $374,358                   $ 315,023
                                       --------                   ---------
                                       --------                   ---------
</TABLE>

     NOTE 4 - COMPREHENSIVE INCOME

     The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income," as of January 1, 1998. Accumulated other
comprehensive income balances are comprised of the following as of September 30,
1998 and December 31, 1997.

<TABLE>
<CAPTION>
                                                  1998             1997
                                               -----------       -------
                                               (Unaudited)
<S>                                            <C>               <C>
Foreign currency translation adjustments        $(2,316)         $    --
                                                --------         -------
                                                --------         -------
</TABLE>

     NOTE 5 - SUBSEQUENT EVENTS

     On November 3, 1998, a shareholder of the Company loaned the Company 
$50,000 to permit the Company to pay the down payment required to close the 
acquisition of EasyACCESS-TM- software and related assets from Saville 
Systems in Australia. The loan bears interest at 15%, is unsecured and is 
payable on February 1, 1999. The Company also agreed to grant the shareholder 
5,000 warrants to purchase common stock of the corporation at $2.00 per 
share. Such warrants expire five years from the date of issuance. On November 
6, 1998, the Company acquired certain assets from Saville Systems PLC and its 
wholly-owned subsidiary, Saville Systems Aust. Pty Ltd, for a purchase price 
of $150,000, $50,000 of which was paid at closing and the balance of which is 
due in 90 days.

                                     -7-
<PAGE>

-------------------------------------------------------------------------------

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     The following discussion and analysis should be read in conjunction with
the Company's Financial Statements and Notes thereto included elsewhere in this
Form 10-Q. This Form 10-Q contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include the uncertain market acceptance of E.Com's products, E.Com's
status as a development stage enterprise and its expectation of losses and
negative cash flows, and ability to continue as a going concern, as well as
those discussed below and in the Company's annual report on Form 10-K filed with
the Securities and Exchange Commission.

OVERVIEW

     Since its formation, the Company has been in the development stage with its
principal activities consisting of assembling a qualified technical and
executive management team, continuing the development of its products,
commencing pre-introduction marketing activities and raising capital. The
Company operates in a rapidly changing market and technology. The Company has
generated no significant revenues and has incurred substantial losses since its
inception. The Company expects to continue to incur significant losses in 1998.

     The Company expects revenues to be derived primarily from the sale of its
wireless mobile computing products and custom development of wireless data
interface software. The Company does not expect to have any significant revenues
from these products until the fourth quarter of 1998 or the first quarter of
1999 at the earliest. Sales are expected to be through purchase order contracts
with each customer and will vary in quantity and profitability.

     The Company's primary product is the Discovery I-TM-, a fully integrated
smart handheld device for wireless data communications. The Company commenced
commercial production and shipment of the Discovery I-TM- late in the first
quarter of 1998. The Company purchased certain manufacturing, tooling and test
equipment to support its move to commercial production. If the Company secures
adequate financing, during the remainder of 1998 and in 1999, the Company
expects to continue to invest in development of enhancements, upgrades and
software for its current products as well as limited development of additional
new products, including both product accessories, applications software,
wireless gateway servers, and other network interfaces for the Discovery I-TM-,
subject to the amount and timing of the Company's achieving additional new
funding or significant revenues. The Company believes that such continued
development is necessary to keep the Discovery I-TM- marketable in its intended
market.

FOREIGN SUBSIDIARY

     In July 1998, the Company formed Wireless Data Systems, Pty Ltd, a wholly
owned subsidiary of the Company. Wireless Data Systems commenced operations in
late July 1998 in Brisbane, Queensland, Australia. The primary focus of this
subsidiary is to market wireless data interface software in the wireless
telecommunications industry, as well as to provide software to facilitate the
integration of the Company's Discovery I-TM- with customer computer networks.

                                     -8-
<PAGE>

     On November 6, 1998, the Company acquired certain assets from Saville
Systems PLC and its wholly-owned subsidiary, Saville Systems Aust. Pty Ltd, for
a purchase price of $150,000, $50,000 of which was paid at closing and the
balance of which is due in 90 days. Among the acquired assets is software known
as "EasyACCESS-TM-," which facilitates wireless data interface. The Company
anticipates that its Wireless Data Systems subsidiary will market and sell
EasyACCESS-TM-, while the Company plans to use EasyACCESS-TM- with its Discovery
I-TM- and other hardware products to facilitate integrating these hardware
products with customers' computer networks.

RESULTS OF OPERATIONS

     REVENUES AND COST OF SALES

     The Company had revenues of $27,875 and $77,200 for the third quarter and
first nine months of 1998, respectively, compared to revenues of $1,650 in the
third quarter and first nine months of 1997. Revenues were derived from sales of
commercial units of the Company's Discovery I-TM-, and contract software
development services. Costs of sales were $23,405 and $54,255 for the third 
quarter and first nine months of 1998, respectively, compared to costs of 
sales of $1,166 in the third quarter and first nine months of 1997. Costs of 
sales were primarily composed of costs of components; and costs of 
manufacturing the Company's Discovery I-TM- product. Costs of sales as a 
percentage of revenues were 84% and 70% for the third quarter and first nine 
months of 1998, respectively, compared to 71% in the third quarter and first 
nine months of 1997, primarily reflecting the high costs associated with low 
volume production. The Company expects its costs of sales, as a percentage of 
revenues to decline as the Company increases commercial production.

     Operating expenses increased by 13% to $411,478 in the third quarter of 
1998 and decreased by 8% to $1,259,072 for the first nine months of 1998, as 
compared to $363,873 and $1,368,782 in the corresponding periods of 1997. The 
increase in expenses in the third quarter was due primarily to startup and 
ongoing expenses related to Wireless Data Systems, while the decrease for the 
nine months reflects the reduction in engineering and development expenses as 
the Discovery I-TM- proceeded towards commercial production.

     RESEARCH AND DEVELOPMENT EXPENSES

     Research and development expenses since inception have consisted primarily
of payments to engineering consultants, payments of salaries and fringe benefits
of employees and purchase of engineering parts and materials. To date, the
Company has expensed all such costs as incurred. Engineering consulting projects
have for the most part been completed, and expenses for such projects have been
substantially reduced to $76,738 in the first nine months of 1998, compared with
$368,875 in the first nine months of 1997, with most continued engineering work
now being performed by employees of the Company. The Company expects product
development expenses associated with the Discovery I-TM- to remain at current
levels in the near-term; however, the Company also expects additional costs to
be incurred for production support as the Company's commercial manufacturing of
its initial products expands. If the Company secures adequate financing, the
Company anticipates that it will also devote substantial resources to additional
product enhancements, application support, application software development and
development of E.Com's planned back-end wireless gateway server.

     SALES, MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES

     Sales, marketing, general and administrative expenses include payroll and
related costs for the Company's administrative and executive personnel, costs
related to the Company's marketing and promotional efforts, office lease
expenses and other overhead costs, and legal and accounting costs and fees of
consultants and professionals. Sales, marketing, general and administrative
expenses for the quarter ended September 30, 1998 were $272,082, as compared to
$246,436 for the quarter ended September 30, 1997. For the nine months ended
September 30, 1998, and the nine months ended September 30, 1997, these expenses
were $800,840 and $618,512, respectively, reflecting primarily increased
introduction activities for the Discovery I-TM- and the formation of Wireless
Data Systems. The 

                                     -9-
<PAGE>

Company expects sales, marketing, general and administrative expenses to 
continue to increase substantially in future periods as the Company invests in 
marketing activities to promote its products.

     NET LOSS

     Net cumulative loss from corporate inception through September 30, 1998 was
approximately $3.8 million or $2.45 per share. For the quarter ended September
30, 1998, the Company recorded a net loss of $405,965 or $0.17 per share, versus
a net loss of $369,431 or $0.27 per share for the quarter ended September 30,
1997. The decrease in net loss per share reflects the greater number of shares
outstanding during 1998.

     For the nine month period ended September 30, 1998, the Company recorded a
net loss of $1,214,175 or $0.51 per share, versus a net loss of $1,387,116 or
$1.14 per share for the nine month period ended September 30, 1997, primarily
reflecting ongoing operating expenses. The decrease in net loss per share
reflects the greater number of shares outstanding during 1998.


LIQUIDITY AND CAPITAL RESOURCES

     To date, the Company has financed its operations primarily through 
private placements of common stock. At December 31, 1997, the Company had 
shareholders' equity of approximately $2.1 million, although from inception 
through December 31, 1997, the Company had incurred an accumulated deficit of 
approximately $2.6 million. The Company had cash and cash equivalents of $1.8 
million at December 31, 1997. As of September 30, 1998, the Company had cash 
and cash equivalents of $133,000.

     As of November 11, 1998, the Company has approximately cash and cash 
equivalents of $29,000 and expects certain revenues in the next four to six 
weeks from pending orders; however, the Company has recently been notified of 
a likely delay in one anticipated significant order. The Company has 
previously taken steps to reduce its expenses, by reducing its work force 
(from twelve to six full time employees) and by imposing temporary reductions 
in the salaries of all remaining employees to assist the Company through its 
cash flow crunch. Furthermore, the Company has deferred payments to many of 
its vendors and suppliers, none of which have, as yet, refused to do further 
business with the Company or insisted that payment be made upon delivery. Due 
to its current circumstances, the Company also plans to shut down operations 
for at least a week during November and will maintain only a skeleton staff 
of managers and officers until it receives sufficient cash from customers or 
shareholders to make its payroll. If any of the Company's anticipated 
revenues are not timely received, the Company will be unable to pay its 
expenses as they become due.

     On November 3, 1998, a shareholder of the Company loaned the Company
$50,000 to permit the Company to pay the down payment required to close the
acquisition of EasyACCESS-TM- software and related assets from Saville Systems
in Australia. The loan bears interest at 15%, is unsecured and is payable on
February 1, 1999. The Company also agreed to grant the shareholder 5,000
warrants to purchase common stock of the corporation at $2.00 per share. Such
warrants expire five years from the date of issuance.

     The Company needs to raise additional capital, debt or equity, in public or
private offerings or loan transactions to finance its continued operations and
growth. The Company is currently planning to offer additional shares of its
common stock to its current shareholders. The Company has also retained an
investment banking firm to identify other companies that may be interested in
strategic investments or acquisitions of E.Com, but as of November 11, 1998, the
Company has not held any discussions with any 

                                     -10-
<PAGE>



prospective investors or acquirers.

     There is no guarantee that additional funding will be secured before the
Company's cash resources are exhausted. If the Company is unable to obtain
financing in a timely manner, the Company will be forced to cease operations.
The Company has tentatively concluded that filing a petition in bankruptcy to
reorganize the Company does not provide significant benefits because of its lack
of working capital.

     If and when higher volume sales of the Company's products occur, the
Company expects that its operating cash requirements will increase since the
Company will need to hire additional staff to expand its marketing, engineering
support and production capabilities. Working capital needs will also increase to
finance inventory and accounts receivable.

     The Company's future expenditures and capital requirements will depend on
numerous factors, including the progress of its product development,
manufacturing, sales and marketing programs and sales growth. The Company
expects its cash requirements to increase significantly in each year of
operations as it expands its activities and inventories. The Company will also
need to support increased personnel costs and accounts receivable. Additionally,
the Company will continue to evaluate possible acquisitions of, or investments
in businesses, products, and technologies that are complementary to those of the
Company, which may require the use of cash.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS

     There can be no assurance that the international operations of the Company
will develop at a rate that supports the Company's level of investment. If
revenues from these operations are not adequate to offset investments in such
activities, the Company's business, operating results, and financial condition
could be materially adversely affected. The Company may experience difficulty in
managing international operations as a result of distance as well as cultural
differences, and there can be no assurance that the Company will be able to
successfully market its products and services in foreign markets.

     In addition to the uncertainty as to the Company's ability to continue to
generate sufficient revenues from its foreign operations and expand its
international presence, there are certain risks inherent in doing business in an
international forum, such as unexpected changes in regulatory requirements,
trade barriers, difficulties in staffing and managing foreign operations, longer
payment cycles, problems in collecting accounts receivable, political
instability, export restrictions, export controls relating to technology,
seasonal reductions in business activity in certain other parts of the world,
and potentially adverse tax consequences. There can be no assurance that one or
more of such factors will not have a material adverse effect of the Company's
future international operations and, consequently, on the Company's business,
operating results, and financial condition.

YEAR 2000 IMPLICATIONS

     Many currently installed computer systems and software products are 
coded to accept only two digit entries in the date code field and cannot 
distinguish 21st century dates from 20th century dates. These date code 
fields will need to distinguish 21st century dates from 20th century dates, 
and as a result, many companies' software and computer systems may need to be 
upgraded or replaced in order to comply with such "Year 2000" requirements. 
Although the Company believes that its systems and products, as well as those 
of its key vendors and suppliers, are Year 2000 compliant in all material 
respects, there can be no assurances that the Company's current systems and 
products do not contain undetected errors or defects with Year 2000 date 
functions that 

                                     -11-
<PAGE>

may result in significant costs to the Company.

     Although the Company is not aware of any material operational issues or
costs associated with preparing its internal systems for the Year 2000, there
can be no assurances that the Company will not experience serious unanticipated
negative consequences (such as significant downtime to internal computer
networks). These consequences could require the Company to incur unanticipated
expenses to remedy any problems, which could have a material adverse effect on
the Company's business, results of operations and financial condition.

     As of November 11, 1998, the Company has not developed, nor put into 
effect any contingency plans in the event that its internal systems, or those 
of its key vendors and suppliers are not Year 2000 compliant. The Company 
believes that the risks associated with its current lack of a contingency 
plan to be minimal. There can be no assurances, however, that the Company 
will not experience serious unanticipated negative consequences. These 
consequences could require the Company to incur unanticipated expenses to 
remedy any problems, which could have a material adverse effect on the 
Company's business, results of operations and financial condition.

FUTURE ACCOUNTING REQUIREMENTS

     In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments
of an Enterprise and Related Information". SFAS 131 changes the way public
companies report segment information in annual financial statements and also
requires those companies to report selected segment information in interim
reports to shareholders. The Company plans to adopt the statement for the
quarter ending December 31, 1998. The Company does not expect SFAS 131 to have a
material effect on its consolidated financial statements.

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities". SFAS 133 establishes accounting and
reporting standards requiring that every derivative instrument be recorded in
the balance sheet as either an asset or liability, measured at its fair value.
SFAS 133 also requires that changes in the derivative's fair value be recognized
currently in results of operations unless specific hedge accounting criteria are
met. SFAS 133 applies to fiscal years beginning after June 15, 1999. The Company
does not expect SFAS 133 to have a material impact on its consolidated financial
statements.




                                     -12-
<PAGE>

-------------------------------------------------------------------------------

                           PART II - OTHER INFORMATION


ITEM 6(a).   EXHIBITS.

<TABLE>
<CAPTION>
     EXHIBIT
        NO.                           DESCRIPTION
   ----------   ---------------------------------------------------------------
   <S>          <C>
       3.1+     Articles of Incorporation of the Company
       3.2+     Bylaws of the Company
       4.1+     Form of Warrant Number One for Purchase of Common Stock
       4.2+     Form of Warrant Number Two for Purchase of Common Stock
       4.3+     Warrant Agreement including Form of Warrant
       4.4+     Form of Warrant for Purchase of Units
      10.1+     Employment Agreement between the Company and William F. Stephens
      10.2+     Employment Agreement between the Company and Jonathan D. Birck
      10.3+     Contract between Company and Motorola Wireless Data Group
      10.4+     Agreement between Company and L.G. Zangani, Inc.
      10.5+     1997 Incentive Compensation Plan
      10.6+     Lease with Gateway Columbia Properties
      27        Financial Data Schedule
</TABLE>

-------------
+       Filed previously with the Company's Registration Statement on Form 10
        (No. 000-23547) filed with the Securities and Exchange Commission on
        December 24, 1997.

                                     -13-
<PAGE>

-------------------------------------------------------------------------------

                                   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.


By       /s/ William F. Stephens                     Date: November 11, 1998
   -------------------------------------------            ---------------------
                William F. Stephens
          Principal Executive Officer and
            Principal Financial Officer



                                     -14-
<PAGE>

                                 EXHIBIT INDEX

                                    FORM 10-Q

                            E.COM INTERNATIONAL, INC.

<TABLE>
<CAPTION>
      EXHIBIT
        NO.                              DESCRIPTION                              PAGE
   -----------  ----------------------------------------------------------------  --------
   <S>          <C>                                                               <C>
       3.1+     Articles of Incorporation of the Company
       3.2+     Bylaws of the Company
       4.1+     Form of Warrant Number One for Purchase of Common Stock
       4.2+     Form of Warrant Number Two for Purchase of Common Stock
       4.3+     Warrant Agreement including Form of Warrant
       4.4+     Form of Warrant for Purchase of Units
      10.1+     Employment Agreement between the Company and William F. Stephens
      10.2+     Employment Agreement between the Company and Jonathan D. Birck
      10.3+     Contract between Company and Motorola Wireless Data Group
      10.4+     Agreement between Company and L.G. Zangani, Inc.
      10.5+     1997 Incentive Compensation Plan
      10.6+     Lease with Gateway Columbia Properties
      27        Financial Data Schedule
</TABLE>

-------------
+       Filed previously with the Company's Registration Statement on Form 10
        (No. 000-23547) filed with the Securities and Exchange Commission on
        December 24, 1997.

                                     (i)