shareholders that it will not run out of capital before becoming profitable after several enquiries as to the financial state of the company.

First Ecom, which operates in Hong Kong, said that it had "strong'' cash reserves of $40 million. According to management, the figure is enough to support the company's operating losses of $850,000 a month until it can sustain itself.

"We believe that these inquiries and concerns are based on the growing number of deferred or cancelled equity financings affecting Internet-oriented companies and the speculation as to which companies will run out of cash before they reach profitable levels of operations,'' said Harold Hutton, president and CEO of First Ecom in a statement.

"While our 10Q filing for the quarter ended June 30, 2000 is expected to be filed imminently, we thought we should comment on our current financial position in light of general market concerns and the growing number of enquiries we have been receiving.''