Efax Com Inc – ‘10-Q’ for 7/3/99

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Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Filing on Form 10-Q                                   27    128K 
 2: EX-4.6      Form of Warrant to Purchase Common Stock               9     30K 
 3: EX-27.1     Financial Data Schedule                                2     10K 

10-Q   —   Filing on Form 10-Q
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UNITED STATES   
SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C.  20549   

FORM 10-Q   

(Mark One)                                                                      

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES      
EXCHANGE ACT OF 1934                                            
For the quarterly period ended July 3, 1999.                    
or                                                              
[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES     
EXCHANGE ACT OF 1934                                            
For the transition period from __________ to __________.        

Commission File Number  0-22561                                 

EFAX.COM, INC.  
(Exact name of Registrant as specified in its charter)  

Delaware                                        77-0182451
(State or other jurisdiction                       (I.R.S. Employer       
of incorporation or organization)                  Identification No.)  

1378 Willow Road, Menlo Park, California   94025  
(Address of principal executive offices)  (Zip Code)

Registrant's telephone number, including area code: (650) 324-0600  

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 August 16, 1999 there were 12,851,947 shares of common stock, $.01 par    
value, outstanding.                                                             

This Report on Form 10-Q includes 35 pages with the Index to Exhibits located   
     on page 25.

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                                                                [Download Table]


                       EFAX.COM, INC. AND SUBSIDIARIES                   
                                   INDEX TO                              
                             REPORT ON FORM 10-Q                         
                        FOR QUARTER ENDED JULY 3, 1999                   

                                                                     Page
                                                                     ----
                                                                         

PART I.  FINANCIAL INFORMATION                                           

Item 1.     Financial Statements:                                        

              Condensed Consolidated Balance Sheets - June 30,           
                1999 and December 31, 1998........................     3 

              Condensed Consolidated Statements of Operations -          
                Three Months and Six Months Ended June 30, 1999          
                and 1998..........................................     4 

              Condensed Consolidated Statements of Cash Flows -          
                Six Months Ended June 30, 1999 and 1998...........     5 

              Notes to Condensed Consolidated Financial Statements     6 

Item 2.     Management's Discussion and Analysis of Financial            
              Condition and Results of Operations.................     9 

Item 3.     Quantitative and Qualitative Disclosures About               
              Market Risk.........................................     22

PART II.  OTHER INFORMATION                                              

Item 1.     Legal Proceedings.....................................     23

Item 2.     Changes in Securities.................................     23

Item 4.     Submission of Matters to a Vote of Security Holders...     24

Item 5.     Other Information.....................................     25

Item 6.     Exhibits and Reports on Form 8-K......................     25

            Signature.............................................     26


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PART I.     FINANCIAL INFORMATION                                               

ITEM 1.     FINANCIAL STATEMENTS                                                

                                                                [Download Table]


           EFAX.COM, INC. (FORMERLY JETFAX, INC.) AND SUBSIDIARIES            

                    CONDENSED CONSOLIDATED BALANCE SHEETS                     
                     (in thousands, except share amounts)                     

                                                    June 30,      December 31,
                                                      1999          1998 (1)  
                                                  ------------    ------------
                                                   (Unaudited)                
                                                                              
ASSETS                                                                        

Current assets:                                                               
  Cash and cash equivalents                       $   12,696       $    1,305 
  Short-term investments                               2,996            2,808 
  Accounts receivable, net                             3,646            4,402 
  Inventories                                          2,738            4,519 
  Prepaid expenses                                       421              247 
                                                  ----------       ---------- 
    Total current assets                              22,497           13,281 

Property, net                                          2,039            1,339 
Other assets                                           4,311            1,595 
                                                  ----------       ---------- 
Total assets                                      $   28,847       $   16,215 
                                                  ==========       ========== 

LIABILITIES AND STOCKHOLDERS' EQUITY                                          

Current liabilities:                                                          
  Accounts payable                                $    1,831       $      777 
  Accrued liabilities                                  1,429            1,576 
                                                  ----------       ---------- 
    Total current liabilities                          3,260            2,353 

Deferred revenue                                          75               25 

Stockholders' equity:                                                         
  Series A convertible preferred stock, $0.01                                 
    par value; 5,000,000 shares authorized,                -                - 
    shares outstanding: 1,500 in 1999 and none                                
    in 1998                                                                   
  Common stock, $0.01 par value; 35,000,000                                   
    shares authorized,  shares outstanding:              128              119 
    12,769,903 in 1999 and 11,873,711 in 1998                                 
  Additional paid-in capital                          62,287           42,946 
  Accumulated deficit                                (36,903)         (29,228)
                                                  ----------       ---------- 
    Total stockholders' equity                        25,512           13,837 
                                                  ----------       ---------- 
Total liabilities and stockholders' equity        $   28,847       $   16,215 
                                                  ==========       ========== 


(1)  Derived from the December 31, 1998 audited consolidated balance sheet      
 included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1998.                                                    

See notes to condensed consolidated financial statements.                       

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           EFAX.COM, INC. (FORMERLY JETFAX, INC.) AND SUBSIDIARIES             

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                 
                                 (Unaudited)                                   
                   (in thousands, except per share amounts)                    

                                   Three Months Ended      Six Months Ended    
                                        June 30,                June 30,       
                                  --------------------    -------------------- 
                                     1999       1998         1999       1998   
                                  ---------  ---------    ---------  --------- 
                                                                               
Revenues:                                                                      
  Product                         $   4,962  $   6,082    $  11,159  $  12,106 
  Licenses and services               1,068      1,072        2,214      2,415 
  Development fees                      253        568          679        900 
                                  ---------  ---------    ---------  --------- 
    Total revenues                    6,283      7,722       14,052     15,421 
                                  ---------  ---------    ---------  --------- 

Costs and expenses:                                                            
  Cost of product revenues            3,421      3,843        7,725      8,130 
  Cost of licenses and services         344        148          583        449 
  Research and development            1,579      1,339        3,234      2,789 
  Selling and marketing               4,763      1,680        6,859      3,909 
  General and administrative          2,405        648        3,195      1,404 
                                  ---------  ---------    ---------  --------- 
    Total costs and expenses         12,512      7,658       21,596     16,681 
                                  ---------  ---------    ---------  --------- 

Income (loss) from operations        (6,229)        64       (7,544)    (1,260)
                                  ---------  ---------    ---------  --------- 

Other income (expense):                                                        
  Interest income                        88         83          142        162 
  Interest expense                        -          -           (1)        (2)
  Other income (expense)                (47)        (1)         (62)       (24)
                                  ---------  ---------    ---------  --------- 

    Total other income                   41         82           79        136 
                                  ---------  ---------    ---------  --------- 

Income (loss) before income taxes    (6,188)       146       (7,465)    (1,124)

Provision for income taxes               24         32           39         49 
                                  ---------  ---------    ---------  --------- 

Net income (loss)                    (6,212)       114       (7,504)    (1,173)

Series A Convertible Preferred                                                 
  stock dividends                      (171)         -         (171)         - 
                                  ---------  ---------    ---------  --------- 

Net income (loss) applicable to                                                
  common stockholders             $  (6,383) $     114    $  (7,675) $  (1,173)
                                  =========  =========    =========  ========= 

Net income (loss) per share:                                                   
  Basic                           $   (0.51) $    0.01    $   (0.63) $   (0.10)
                                  =========  =========    =========  ========= 
  Diluted                         $   (0.51) $    0.01    $   (0.63) $   (0.10)
                                  =========  =========    =========  ========= 

Shares used in computing net                                                   
  income (loss)  per share:                                                    
  Basic                              12,538     11,755       12,273     11,748 
                                  =========  =========    =========  ========= 
  Diluted                            12,538     13,136       12,273     11,748 
                                  =========  =========    =========  ========= 


For presentation purposes, the periods ended July 3, 1999 and July 4, 1998 are  
referred to above as ending on June 30, 1999 and 1998, respectively.            

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           EFAX.COM, INC. (FORMERLY JETFAX, INC.) AND SUBSIDIARIES             
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                 
                                 (Unaudited)                                   
                                (in thousands)                                 

                                                       Six Months Ended        
                                                            June 30,           
                                                  ---------------------------- 
                                                      1999            1998     
                                                  ------------    ------------ 
                                                                               
Cash flows from operating activities:                                          
Net loss                                          $     (7,504)   $     (1,173)
  Adjustments to reconcile net loss to net                                     
  cash used for operating activities:                                          
    Depreciation and amortization                          474             204 
    Loss on disposal of asset                              (39)              - 
    Issuance of Common Stock for service                   208               - 
    Common Stock options - severance                     1,367               - 
    Common Stock options - services                        284               - 
    Changes in assets and liabilities:                                         
      Trade receivables                                    756             532 
      Inventories                                        1,781             135 
      Prepaid expenses                                    (174)            (66)
      Accounts payable                                   1,054             234 
      Deferred revenue                                      50             (24)
      Accrued liabilities                                 (273)            (84)
                                                  ------------    ------------ 
        Net cash used for operating activities          (2,016)           (242)
                                                  ------------    ------------ 

Cash flows from investing activities:                                          
  Purchase of short-term investments                    (2,996)              - 
  Sale of short-term investments                         2,808               - 
  Purchase of property                                    (921)           (220)
  Increase in other assets                                (733)           (317)
                                                  ------------    ------------ 
    Net cash used for investing activities              (1,842)           (537)
                                                  ------------    ------------ 

Cash flows from financing activities:                                          
  Proceeds from sale of Common Stock                     1,034              (3)
  Proceeds from sale of Series A Convertible                                   
    Preferred Stock, net                                14,215               - 
                                                  ------------    ------------ 
    Net cash provided by (used for) financing                                  
      activities                                        15,249              (3)
                                                  ------------    ------------ 

Increase (decrease) in cash and cash equivalents        11,391            (782)
Cash and cash equivalents, beginning of period           1,305           7,224 
                                                  ------------    ------------ 
Cash and cash equivalents, end of period          $     12,696    $      6,442 
                                                  ============    ============ 

Supplemental cash flow information:                                            
  Interest paid                                   $          -    $          2 
                                                  ============    ============ 
  Taxes paid - foreign withholding                $         18    $          - 
                                                  ============    ============ 

Supplemental noncash investing and financial                                   
  information:                                                                 
  Warrant expense - service                       $        197    $          - 
                                                  ============    ============ 
Conversion of accrued ESPP for purchase                                        
    of Common Stock                               $         45    $        76  
                                                  ============    ============ 
Trademark settlement                              $      2,000    $          - 
                                                  ============    ============ 
Cumulative dividends on Series A Convertible                                   
  Preferred Stock                                 $        171    $          - 
                                                  ============    ============ 


See notes to condensed consolidated financial statements.                       

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EFAX.COM, INC. (FORMERLY JETFAX, INC.) AND SUBSIDIARIES   

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  
(Unaudited)     

1.     Basis of Presentation                                                    

Interim Financial Information                                                   

   The accompanying condensed consolidated financial statements of eFax.com,
Inc. and its wholly-owned subsidiaries ("eFax.com" or "eFax" or the "Company")  
as of June 30, 1999 and for the three and six months ended June 30, 1999 and    
1998 are unaudited. In the opinion of management, the condensed consolidated    
financial statements include all adjustments (consisting of normal recurring    
accruals) that management considers necessary for a fair presentation of its    
financial position, operating results and cash flows for the interim periods    
presented.  Operating results and cash flows for interim periods are not        
necessarily indicative of results for the entire year.                          

This financial data should be read in conjunction with the audited    
financial statements and notes thereto included in eFax.com's Annual Report on  
Form 10-K for the year ended December 31, 1998.                                 

Fiscal Period End                                                               

   The Company uses a 52-53 week fiscal year ending on the first Saturday on
or after December 31. For presentation purposes, the Company refers herein to   
the 13-week and 26-week periods ended July 3, 1999 and July 4, 1998 as the      
three and six months ended June 30, 1999 and 1998, respectively.                

Per Share Information                                                           

   Basic earnings (loss) per share is computed by dividing net income (loss)
by the weighted average common shares outstanding for the period while diluted  
earnings (loss) per share also includes the dilutive impact of stock options    
and warrants.  Common stock equivalents from options and warrants have been     
excluded from the computation for all periods presented with net losses as      
their effect is antidilutive.  Such options and warrants will be included,      
using the treasury stock method, in periods where eFax.com reports net income   
and the average fair market value of its common stock exceeds the exercise      
price.  The net income (loss) and the shares used for the computation of both   
basic and diluted income (loss) per share are shown in the table below.         

                                                                [Download Table]


                                      Three Months            Six Months       
                                      Ended June 30,         Ended June 30,    
                                    ------------------     ------------------  
                                      1999       1998        1999       1998   
                                    --------   --------    --------   -------- 
                                                                               
Net income (loss) applicable to                                                
  shareholders                      $ (6,383)  $    114    $ (7,675)  $ (1,173)
                                    ========   ========    ========   ======== 

SHARES USED IN COMPUTATION:                                                    
Weighted average common shares                                                 
  outstanding used in computation                                              
  of basic earnings(loss) per share   12,538     11,755      12,273     11,748 
Dilutive effect of stock options                                               
  and warrants                          -         1,381        -          -    
                                    --------   --------    --------   -------- 
Shares used in computation of                                                  
  diluted net income (loss)                                                    
  per share                           12,538     13,136      12,273     11,748 
                                    ========   ========    ========   ======== 

BASIC EARNINGS (LOSS) PER SHARE     $  (0.51)  $   0.01    $  (0.63)  $  (0.10)
                                    ========   ========    ========   ======== 
DILUTED EARNINGS (LOSS) PER SHARE   $  (0.51)  $   0.01    $  (0.63)  $  (0.10)
                                    ========   ========    ========   ======== 


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EFAX.COM, INC. (FORMERLY JETFAX, INC.) AND SUBSIDIARIES   

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  
(Unaudited)     

2.     Inventories                                                              

Inventories consist of the following (in thousands):                  

                                                                [Download Table]


                                                 June 30,     December 31,
                                                  1999            1998    
                                              ------------    ------------
                                                                          
 Materials and supplies                       $      1,092    $      1,982
 Work-in-process                                        37              93
 Finished goods                                      1,609           2,444
                                              ------------    ------------
 Total                                        $      2,738    $      4,519
                                              ============    ============


3.     Accrued Liabilities                                                      
Accrued liabilities consist of (in thousands):                        

                                                                [Download Table]


                                                 June 30,     December 31,
                                                  1999            1998    
                                              ------------    ------------
                                                                          
 Compensation and related benefits            $        721    $        632
 Product warranty                                       46              78
 Royalties                                              46              62
 Other                                                 616             804
                                              ------------    ------------
 Total                                        $      1,429    $      1,576
                                              ============    ============

4.     Comprehensive Income                                                     

Effective January 1, 1998, eFax.com adopted Statement of Financial    
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income." SFAS   
No. 130 requires an enterprise to report, by major components and as a single   
total, the change in net assets during the period from non-owner sources.  For  
the three and six months ended June 30, 1999 and 1998, there were no            
differences between eFax.com's comprehensive loss and net loss.                 

5.     Disclosures about Segments of an Enterprise and Related Information      

In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information,"     
which establishes annual and interim reporting standards for an enterprise's    
business segments and related disclosures about its products, services,         
geographic areas and major customers. Adoption of this statement does not       
impact eFax.com's consolidated financial position, results of operations or     
cash flows. It is eFax.com's opinion that its business is a single reportable   
segment, which addresses the communication and handling of electronic and paper 
documents.  Organizational structure and internal management reporting are not  
segmented, nor are there specific segment profitability responsibilities within 
management.                                                                     

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EFAX.COM, INC. (FORMERLY JETFAX, INC.) AND SUBSIDIARIES   

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)  
(Unaudited)     

6.     Effect Of Changes In Accounting Principles                               

In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," which      
defines derivatives, requires that all derivatives be carried at fair value,    
and provides for hedging accounting when certain conditions are met. The        
Company is required to adopt this statement in the first quarter of fiscal year 
2001, with early adoption permitted. On a forward-looking basis, although       
eFax.com has not fully assessed the implications of this new statement,         
eFax.com does not believe adoption of this statement will have a material       
impact on eFax.com's financial position or results of operations.               

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

Overview                                                                        

  The statements contained in this Report on Form 10-Q that are not purely
historical are forward-looking statements within the meaning of Section 27A of  
the Securities Act of 1933 (the ''Securities Act'') and Section 21E of the      
Securities Exchange Act of 1934 (the "Exchange Act"), including statements      
regarding eFax.com's expectations, hopes, intentions or strategies regarding    
the future. When used herein, the words ''may,'' ''will,'' ''expect,''          
''anticipate,'' ''continue,'' ''estimate,'' ''project,'' ''intend'' and similar 
expressions are intended to identify forward-looking statements within the      
meaning of the Securities Act and the Exchange Act.  Forward-looking statements 
include: statements regarding events, conditions and financial trends that may  
affect eFax.com's future plans of operations, business strategy, results of     
operations and financial position. All forward-looking statements included in   
this document are based on information available to eFax.com on the date        
hereof, and eFax.com assumes no obligation to update any such forward-looking   
statements. Investors are cautioned that any forward-looking statements are not 
guarantees of future performance and are subject to risks and uncertainties and 
that actual results may differ materially from those included within the        
forward-looking statements as a result of various factors.  These forward-      
looking statements are made in reliance upon the safe harbor provision of The   
Private Securities Litigation Reform Act of 1995.  Factors that could cause or  
contribute to such differences include, but are not limited to, those described 
below, under the heading "Factors That May Affect Operating Results" and        
elsewhere in this Report on Form 10-Q.                                          

   Pursuant to a Certificate of Ownership and Merger, which provided for the
merger of JetFax, Inc. with eFax.com, Inc., a Delaware corporation and wholly   
owned subsidiary of JetFax, Inc., filed with the Delaware Department of         
Corporations and declared effective on February 8, 1999, the corporate name of  
JetFax, Inc., a Delaware Corporation has been changed to "eFax.com, Inc."  All  
filings and reports made after February 8, 1999 bear the name "eFax.com, Inc."  

   eFax.com, Inc. is a leading developer and provider of integrated embedded
system technology, branded products and desktop software solutions for the      
multifunction product ("MFP") market, which consists of electronic office       
devices that combine print, fax, copy and scan capabilities in a single unit.   
eFax.com was incorporated in August 1988 and since that time has engaged in the 
development, manufacture and sale of its branded MFPs.  eFax.com has also       
entered into agreements with a number of manufacturers for the customization    
and integration of eFax.com's embedded system technology and desktop software   
in OEMs' MFPs.  The desktop software includes JetSuite, which resulted from     
eFax.com's July 1996 purchase of substantially all of the assets of the         
Crandell Group, Inc., and PaperMaster, which was acquired in a December 1997    
pooling of interests transaction with DocuMagix, Inc. Building from this strong 
technology base, eFax.com is now emphasizing Internet applications for its      
document transmission and software expertise.                                   

   Effective December 31, 1996, the Company changed its fiscal year end from
March 31 to a 52-53 week reporting year ending on the first Saturday on or      
following December 31.  The 13-week periods from April 4, 1999 to July 3, 1999  
and from April 5, 1998 to July 4, 1998 are referred to herein as the quarters   
ended June 30, 1999 and June 30, 1999, respectively. The 26-week periods from   
January 3, 1999 to July 3, 1999 and from January 4, 1998 to July 4, 1998 are    
referred to herein as the six months ended June 30, 1999 and June 30, 1998,     
respectively.                                                                   

  eFax.com's revenues are derived from three sources: (i) product revenues
consisting of sales of JetFax branded MFPs, consumables and upgrades; (ii)      
software and technology license fees related to both its embedded system        
technology for MFPs and its desktop software; and (iii) development fees for    
the customization and integration of eFax.com's embedded system technology and  
desktop software in OEM products. In addition, during the quarter ended June    
30, 1999, the Company introduced certain of its premium eFax services.  Revenue 
from such services was not material to the quarter and has been included with   
licenses and services revenues in the financial statements.  Historically,      
product revenues have accounted for the majority of eFax.com's total revenues.  
For the three months ended June 30, 1999, product revenues, licenses and        
services revenues, and development fees as a percentage of total revenues, were 
79%, 17%, and 4%, respectively, as compared to 79%, 14%, and 7% for the         
comparable period in the prior year. For the six months ended June 30, 1999,    
product revenues, software and technology fees, and development fees as a       
percentage of total revenues, were 79%, 16%, and 5%, respectively, as compared  
to 79%, 16%, and 6% for the comparable period in the prior year.                

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

 eFax.com in the past has experienced, and in the future may experience,
significant fluctuations in quarterly operating results that have been or may   
be caused by many factors including: the timing of introductions of new         
products or product enhancements; initiation, expansion, reduction or           
termination of arrangements between eFax.com and significant OEM customers or   
dealers and distributors; the size and timing of and fluctuations in end user   
demand; currency fluctuations; and general economic conditions.  eFax.com       
expects that its operating results will continue to fluctuate significantly as  
a result of these and other factors discussed under the heading "Factors That   
May Affect Operating Results".                                                  

Results of Operations                                                           

    The following table sets forth, as a percentage of total revenues, certain
items in eFax.com's statements of operations for the periods indicated.         

                                                                [Download Table]


                                  Three Months Ended      Six Months Ended   
                                       June 30,                June 30,      
                                 --------------------    --------------------
                                    1999       1998         1999       1998  
                                 ---------  ---------    ---------  ---------
                                                                             
Revenues:                                                                    
  Product                           79.0%      78.8%        79.4%      78.5% 
  Licenses and services             17.0       13.9         15.8       15.7  
  Development fees                   4.0        7.3          4.8        5.8  
                                  ------     ------       ------     ------  
Total revenues                     100.0      100.0        100.0      100.0  
                                  ------     ------       ------     ------  

Costs and expenses:                                                          
  Cost of product revenues          54.4       49.8         55.0       52.7  
  Cost of software and licensing                                             
    revenue, services                5.5        1.9          4.2        2.9  
  Research and development          25.1       17.3         23.0       18.1  
  Selling and marketing             75.8       21.8         48.8       25.4  
  General and administrative        38.3        8.4         22.7        9.1  
                                  ------     ------       ------     ------  
    Total costs and expenses       199.1       99.2        153.7      108.2  
                                  ------     ------       ------     ------  
Income (loss) from operations      (99.1)       0.8        (53.7)      (8.2) 
Other income, net                    0.6        1.1          0.6        0.9  
                                  ------     ------       ------     ------  
Income (loss) before income taxes  (98.5)       1.9        (53.1)      (7.3) 
Provision for income taxes           0.4        0.4          0.3        0.3  
                                  ------     ------       ------     ------  

Net income (loss)                  (98.9)       1.5        (53.4)      (7.6) 
Series A Convertible Preferred                                               
  stock dividends                   (2.7)        -          (1.2)        -   
                                  ------     ------       ------     ------  
Net income (loss) applicable to                                              
  common stockholders             (101.6)%      1.5%       (54.6)%     (7.6)%
                                  ======     ======       ======     ======  


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

Three and Six Months Ended June 30, 1999 Compared to Three and Six Months Ended 
June 30, 1998                                                                   

   Revenues.  Total revenues decreased 19% to $6.3 million from $7.7 million
for the three months ended June 30, 1999 and June 30, 1998, respectively.  For  
the six-month periods ended June 30, 1999 and June 30, 1998, respectively,      
revenues declined 9% to $14.1 million from $15.4 million.                       

  Overall product revenues decreased 18% to $5.0 million from $6.1 million
for the three months ended June 30, 1999 and June 30, 1998, respectively, and   
dropped 20% from the preceding three months ended March 31, 1999.  Revenue from 
shipments of MFPs declined 30% from the preceding three months, as the Series   
M900 product approached end of model life.  Next generation platforms are       
expected in the third quarter. While OEM sales generated a modest increase over 
the preceding quarter, both the level of OEM business and general market        
pressures contributed to continuing erosion in average selling prices. JetFax   
branded products will be discontinued after the third quarter of 1999 in order  
to focus the hardware business exclusively on OEM channels.  As a result,       
hardware product revenues are expected to decline for the remainder of the year 
as this move to a new business model is implemented. Consumable revenue         
increased 41% in the second quarter versus the year ago period, but rose only   
slightly from the preceding quarter.  For the six months ended June 30, 1999    
and June 30, 1998, overall product revenues declined 8% to $11.2 million from   
$12.1 million, a reflection of the factors related to the Series M900.          

   Licensing and services revenues were flat for the three months ended June
30, 1999 as compared to the year ago three months ended June 30, 1998.  An      
anticipated decline in per unit royalties for the Hewlett-Packard SureStore CD- 
Writer was offset by revenues for PaperMaster in the current period, as         
software revenues for the second quarter of 1998 included a reserve established 
for the withdrawal of PaperMaster products from the retail distribution         
channel.  Revenue recognized from the eFax(c) Service was nominal in the        
quarter as premium services were launched late in June. Revenue from such       
services was not material to the quarter and has been included with licenses    
and services revenues in the financial statements. For the six-month period,    
licensing fees and other services declined 8% to $2.2 million from $2.4 million 
for the comparable year ago period, the result of the aforementioned            
anticipated decline.                                                            

Development fees dropped 55% to $253,000 from $568,000 for the three  
months ended June 30, 1999 and June 30, 1998, respectively, as current projects 
neared completion.  For the six-month period, development revenues declined 25% 
to $679,000 from $900,000 for the prior year period, reflecting the completion  
of current projects and conversion of development fees to per unit royalties.   

Cost of Product Revenues.    Cost of product revenues decreased 11% to
$3.4 million from $3.8 million for the three months ended June 30, 1999 and     
June 30, 1998, respectively, and decreased 5% to $7.7 million from $8.1 million 
for the six months ended June 30, 1999 and June 30, 1998, respectively.         
Product gross margin was 31%, down from 37% for the year ago period.  This      
decrease was attributable to volume and average selling price declines and the  
absence of favorable foreign exchange rates experienced on inventory purchases  
in the second quarter of 1998.  For the six-month periods ended June 30, 1999   
and June 30, 1998, margins were 31% and 33%, respectively.                      

  Print engines are purchased for the Series M900 product line in Yen from
OkiData Corporation.  For the six months ended June 30, 1999 the average        
exchange rate for purchases weakened to 114 from 132 Yen to the dollar for the  
same year ago period.  As a result of this rate change, cost of goods sold was  
increased by $215,000, a major component of the margin decline.                 

   Cost of Licensing and  Services.    Cost of software, licensing and other
services rose 132% to $344,000 from $148,000 for the three months ended June    
30, 1999 and June 30, 1998, respectively, and increased 30% to $583,000 from    
$449,000 for the six months ended June 30, 1999 and June 30, 1998,              
respectively.  Direct costs for the eFax( Service represented the major portion 
of the increase.                                                                

    Research and Development.    Research and development expenses rose 18% to
$1.6 million from $1.3 million for the three months ended June 30, 1999 and     
June 30, 1998, respectively, driven by higher personnel costs related to        
headcount growth and escalation in engineering salaries, as well as an increase 
in external engineering costs.  Average headcount for the current quarter rose  
7% over the year ago period.  Research and development expenses grew 16% to     
$3.2 million from $2.8 million for the six months ended June 30, 1999 and June  

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

30, 1998, respectively.   Increased costs for the six month period  included    
software development charges in support of the new eFax( Service as well as the 
impact of headcount growth.                                                     

  Selling and Marketing.    Selling and marketing expenses climbed 184% to
$4.8 million from $1.7 million for the three months ended June 30, 1999 and     
June 30, 1998, respectively.  Increased promotional activity in support of the  
new eFax( Service accounted for effectively all of the increase, as reductions  
in external marketing efforts related to the hardware business were offset by   
charges incurred for options granted to external consultants. Selling and       
marketing expenses rose 75% to $6.9 million from $3.9 million for the three     
months ended June 30, 1999 and June 30, 1998, respectively, the result of these 
same activities.                                                                

  General and Administrative.     General and administrative expenses rose
271% to $2.4 million from $648,000 for the three months ended June 30, 1999 and 
June 30, 1998, respectively.  Of the increase, $1.4 million was associated with 
stock-based severance charges related to changes in management undertaken in    
the quarter.  Amortization of trademarks and, to a lesser degree, compensation  
expenses, and expenses related to external reporting for public companies       
accounted for the bulk of the remainder.  Excluding all severance charges,      
general and administrative costs totaled $923,000, up 42% from the comparable   
year ago period.  General and administrative expenses rose 128% to $3.2 million 
from $1.4 million for the three months ended June 30, 1999 and June 30, 1998,   
respectively, driven primarily by expenses for the addition to and subsequent   
change in executive management.                                                 

  Interest and Other Income (Expense).     Interest and other income, net,
decreased to $41,000 from  $82,000 for the three months ended June 30, 1999 and 
June 30, 1998, respectively.  Other expense related to disposal of fixed assets 
and foreign currency fluctuations accounted for the drop.  For the six month    
period, interest and other income, net, decreased to $79,000 from $136,000, the 
result of the same factors.                                                     

   Provision for Income Tax.     Due to eFax.com's net losses, there were no
provisions for federal or state income taxes for three months ended June 30,    
1999 and June 30, 1998, respectively.  Income tax provisions of  $24,000 and    
$32,000, respectively, relate primarily to foreign withholding taxes on certain 
royalty fees, but also include minimum state and franchise taxes.               

   Net Income (Loss).     The net loss applicable to common shareholders for
the three months ended June 30, 1999 was $6.4 million or $0.51 per share        
compared to net income for the three months ended June 30, 1998 of $114,000 or  
$0.01 per share.  The net loss for the six months ended June 30, 1999 was $7.7  
million or $0.63 per share compared to $1.1 million or  $0.10 per share for the 
six months ended June 30, 1998.  Significant drivers to the current year loss   
include: 1) heavy spending on external promotions for the new eFax( Service, 2) 
a shift in the hardware business model from branded products to OEM channels,   
and 3) costs associated with changes in management.  Without the one time, non- 
cash charge of $1.5 million associated with changes in management, net loss for 
the current quarter would have been $4.9 million or $0.39 per share.            

Liquidity and Capital Resources                                                 

  eFax.com has financed its operations to date principally through private
placements of debt and equity securities, proceeds from borrowings under a bank 
line of credit, debt associated with the Crandell Acquisition, and sales of     
common stock.  The total amount of equity raised through June 30, 1999 was $62  
million through a series of private financing rounds at both eFax.com and       
DocuMagix, and sales of common and preferred stock.                             

    At June 30,1999, eFax.com had $1.5 million available under its bank credit
facility under which there were no borrowings at that date.  This lending       
facility is collateralized by substantially all of eFax.com's assets.  The      
maximum amount available under the line of credit is the lesser of $1.5 million 
or 80% of eFax.com's eligible outstanding domestic accounts receivable.  The    
revolving line of credit was renegotiated on September 18, 1998, and terminates 
on August 23, 1999.  Negotiations are currently underway to renew the line of   
credit and are expected to be concluded in September 1999. The line of credit   
contains certain covenants which include the requirements that eFax.com         
maintain tangible net worth (as defined) of $5.0 million, quarterly net income, 
a quick ratio of at least 1.0 to 1.0, a maximum debt to net worth ratio (as     
defined) of 1.5 to 1.0, and certain minimum liquidity and debt service          
coverage.  In addition, the agreement prohibits the payment of cash dividends.  
eFax.com was in compliance with all such covenants at June 30, 1999, except the 
quarterly net income covenant for which eFax.com received a waiver dated August 
16, 1999.                                                                       

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

On May 10, 1999, eFax.com entered into a purchase agreement with an   
investor for the private placement of $15.0 million of Series A Convertible     
Preferred Stock, convertible into Common Stock at $21.1375 per share.  The      
conversion price is subject to an adjustment after one year to the greater of   
the then current market price of the Common Stock or 60% of the initial         
conversion price if the current market price is less than the initial           
conversion price. The agreement also includes 300,000 warrants exercisable at a 
10% premium to the Series A Convertible Preferred Stock conversion price.  The  
Series A Convertible Preferred Stock includes an 8% dividend payable in cash or 
common stock at the option of eFax.com. The closing occurred on May 13, 1999.   
eFax.com has agreed to file a registration statement for the resale of the      
shares of Common Stock acquired on conversion of the Convertible Preferred      
Stock and upon exercise of the warrants.                                        

    Cash, cash equivalents and short-term investments rose to $15.7 million at
June 30, 1999 from $4.1 million at December 31, 1998, a result of proceeds from 
the private placement.  Inventories of $2.7 million at June 30, 1999 decreased  
from $4.5 million at December 31, 1998 due to improved inventory management and 
end-of-product life cycle for the Series M900.  Accounts receivable also        
declined to $3.6 million at June 30, 1999 from $4.4 million, the result of the  
lowered sales volume and continuing improved collection on aged accounts.       
Accounts payable rose to $1.8 million at June 30, 1999 from $777,000 at         
December 31, 1998, driven primarily by commitments for external promotions in   
support of the eFax( Service.                                                   

   Investing activities for the six months ended June 30, 1999 consumed $1.8
million of cash: $921,000 for property purchases, $733,000 for investment in    
other assets and $188,000 for net purchases of short-term investments.          

    Financing activities for the six months ended June 30, 1999 provided $15.2
million of cash: $14.2 million in proceeds from the sale of Series A            
Convertible Preferred Stock, and $1.0 million in proceeds from the sale of      
Common Stock.                                                                   

  eFax.com currently believes that its cash and equivalents, together with
proceeds from the recent private placement of convertible preferred stock,      
available borrowings under its line of credit and the expected renewal, and     
funds from current and anticipated operations, will be sufficient to meet       
eFax.com's working capital and capital expenditure requirements for the next    
twelve months. If eFax.com acquires one or more businesses or products,         
eFax.com's capital requirements could increase substantially.                   

Factors That May Affect Operating Results                                       

eFax.com operates in a dynamic and rapidly changing environment that  
involves numerous risks and uncertainties.  The following section lists some,   
but not all, of those risks and uncertainties which may have a material adverse 
effect on eFax.com's business, financial condition or results of operations.    
This section should be read in conjunction with the unaudited Condensed         
Consolidated Financial Statements and Notes thereto included in Part I - Item 1 
of this Quarterly Report on Form 10-Q and the audited Consolidated Financial    
Statements and Notes thereto and Management's Discussion and Analysis of        
Financial Condition and Results of Operations for the year ended December 31,   
1998, contained in eFax.com's Annual Report on Form 10-K for the year ended     
December 31, 1998.                                                              

This Quarterly Report on Form 10-Q and the documents incorporated by  
reference into this Quarterly Report on Form 10-Q may contain projections of    
results of operations and financial condition or other "forward-looking         
statements" which involve risks and uncertainties.  The words "anticipate,"     
"believe," "estimate," and "expect" and similar expressions when used in this   
prospectus in relation to eFax.com or its management are intended to identify   
such forward-looking statements.  eFax.com's actual results, performance, or    
achievements could differ materially from these projections or forward-looking  
statements as a result of many factors, including those discussed in this       
"Factors That May Affect Operating Results" section of the Quarterly Report on  
Form 10-Q.                                                                      

WE HAVE EXPERIENCED FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS.            

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

 eFax.com in the past has experienced, and in the future may experience,
significant fluctuations in its quarterly operating results. These fluctuations 
have been or may be caused by many factors, including:                          

 o   acceptance and timing of new products combining fax technology with
the Internet;                                                 

  o   the size and timing of development or software licensing agreements;

o   the timing of new introductions or phase-out of eFax.com's brand  
products;                                                     

   o   fluctuations in consumer demand for eFax.com's brand products and for
products which are made by eFax.com's manufacturing customers 
incorporating eFax.com's products; and                        

o   seasonal trends, competition and pricing.                         

   eFax.com expects that its operating results will continue to fluctuate as
a result of these and other factors.                                            

eFax.com has often received a substantial portion of its quarterly    
revenues during the last month of a quarter.  These revenues frequently         
concentrate in the last weeks or days of a quarter.  One reason for this is     
that eFax.com's brand products are primarily sold through dealers, and these    
dealers often place orders for products at or near the end of a quarter. The    
booking and shipping of one or more key orders at the end of a quarter may be   
delayed until the beginning of the next quarter or it may be cancelled. As a    
result, we are not able to predict future revenues with any significant degree  
of accuracy. For these and other reasons, we believe that period-to-period      
comparisons of eFax.com's results of operations are not necessarily meaningful. 
We believe that you should not rely upon these comparisons as indicators of     
future performance. It is likely that in future quarters, eFax.com's operating  
results will sometimes be below the expectations of public market analysts and  
investors. This could have a material adverse effect on the price of eFax.com's 
common stock.                                                                   

    We believe that the accuracy of eFax.com's report of its quarterly license
revenues received from its manufacturing customers has been, and will continue  
to be, dependent on the timing and accuracy of product sales reports which we   
receive from these manufacturing customers. Our manufacturing customers only    
provide these reports on a quarterly basis and this quarterly basis may not     
coincide with eFax.com's quarter. Our manufacturing customers may also delay or 
revise these reports. Therefore, we are required to estimate all of the         
recurring license revenues from manufacturing customers for each quarter. As a  
result, we will record an estimate of such revenues prior to public             
announcement of eFax.com's quarterly results. In the event the product sales    
reports we receive from our manufacturing customers are delayed or subsequently 
revised, we may be required to restate eFax.com's recognized revenues or adjust 
revenues for subsequent periods. This restatement or adjustment of revenues     
could have a material adverse effect on eFax.com's business, financial          
condition and results of operations and, as a result, the price of eFax.com's   
common stock.                                                                   

THE PRICE OF EFAX.COM STOCK MAY BE VOLATILE DUE TO MANY FACTORS, INCLUDING OUR  
STATUS AS AN INTERNET-RELATED COMPANY, FLUCTUATIONS IN OUR QUARTERLY OPERATING  
RESULTS, THE RAPID PACE OF TECHNOLOGICAL CHANGE, THE UNCERTAINTY OF OUR         
BUSINESS TRANSACTIONS AND THE CONTENTS OF NEWS AND SECURITY ANALYST REPORTS.    

The trading price of eFax.com's common stock is likely to be highly   
volatile. The price could be subject to wide fluctuations in response to        
factors such as:                                                                

o   actual or anticipated variations in eFax.com's quarterly operating
results;                                                      

    o   announcements of technological innovations or new services by eFax.com
or its competitors;                                           

    o   announcements of significant acquisitions or strategic partnerships by
eFax.com or its competitors;                                  

o   changes in financial estimates and recommendations by securities  
analysts; and                                                 

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

o   news reports relating to trends in eFax.com's markets.            

In addition, the stock market in general, and the market prices for   
Internet- related companies in particular, have experienced extreme volatility  
that is often unrelated to the operating performance of these companies. These  
broad market and industry fluctuations may adversely affect the price of        
eFax.com's common stock, regardless of eFax.com's actual operating performance. 

ALTHOUGH WE TAKE STEPS TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, WE MAY      
BECOME SUBJECT TO TIME-CONSUMING AND COSTLY LITIGATION WHERE WE ARE ACCUSED OF  
INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHER PARTIES.  IN FACT, WE WERE 
RECENTLY SUED FOR INFRINGING A TRADEMARK OF E-FAX COMMUNICATIONS.               

    eFax.com's success is heavily dependent upon its intellectual property. To
protect its proprietary rights, eFax.com relies on a combination of copyright,  
trade secret and trademark laws, patents, nondisclosure agreements and other    
contractual restrictions. As part of its confidentiality procedures, eFax.com   
generally enters into nondisclosure agreements with its employees, consultants, 
manufacturing customers and strategic partners. eFax.com also limits access to  
and distribution of its designs, software and other proprietary information.    
Despite these efforts, eFax.com may be unable to effectively protect its        
proprietary rights. In addition, enforcement of eFax.com's proprietary rights   
may be expensive. We cannot assure you that eFax.com's means of protecting its  
proprietary rights will be adequate. Nor can we assure you that eFax.com's      
competitors will not independently develop similar technology.                  

 As the number of patents, copyrights, trademarks and other intellectual
property rights in eFax.com's industry increases, eFax.com's intellectual       
property may increasingly become the subject of infringement claims.  In the    
past, eFax.com has received communications from other parties claiming that     
eFax.com's trademarks or products infringe the proprietary rights of these      
parties.  eFax.com has also received communications asking for                  
"indemnification" against such infringement.  "Indemnification" means that      
eFax.com would promise to repay or reimburse the other party for loss or        
damages suffered by that other party as a result of infringement. eFax.com's    
manufacturing customers generally require eFax.com to reimburse or "indemnify"  
the manufacturing customers for claims of infringement from third parties. We   
can give you no assurance that third parties will not make infringement claims  
against eFax.com or its manufacturing customers in the future. Any of these     
claims, even if they have no legal merit, could be time consuming (especially   
for key management and technical personnel), result in costly litigation or     
cause delays in revenues. In addition, these claims could require eFax.com to   
enter into royalty or licensing agreements on terms unacceptable to eFax.com.   
If eFax.com fails to develop a substitute technology, or to license a           
substitute technology on acceptable terms, this could have a material adverse   
effect on eFax.com's business, financial condition and results of operations.   
As an example, eFax.com was recently sued by E-Fax Communications which claimed 
that the use of the name "eFax.com" infringed this party's trademark rights. In 
settlement of the matter, eFax.com has agreed to pay E-Fax Communications a     
combination of cash and Common Stock in an amount not exceeding $2.5 million    
based on the average share price of the Common Stock just prior to the stock    
registration becoming effective.                                                

OUR REVENUES MAY NOT GROW AS ANTICIPATED BECAUSE THE MARKET FOR OUR INTERNET-   
RELATED SERVICES IS NEW, RAPIDLY CHANGING AND UNCERTAIN.                        

The market for Internet-related document communication and handling   
services is very new and is evolving rapidly.  eFax.com expects to rely         
significantly in the future on revenues generated through its "eFax" service, a 
free fax-to-e-mail service, and products which support this service. We cannot  
assure you, however, that the base of customers subscribing to our eFax(c)      
service will continue to expand rapidly. Nor can we assure you that users will  
be willing to pay fees for premium services or that the subscriber base will    
grow large enough to be capable of generating advertising revenue. As a result, 
our revenues may not grow as anticipated, which would have a negative effect on 
our business.                                                                   

WE HAVE CHANGED THE FOCUS OF OUR BUSINESS TO INTERNET-RELATED SERVICES,         
PRODUCTS AND TECHNOLOGIES AND GROWTH OF BUSINESS IN THIS NEW FOCUS AREA IS      
UNCERTAIN.                                                                      

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

Historically, eFax.com has focused primarily on the development,      
manufacture and sale of its brand multifunction products.  eFax.com currently   
derives a substantial portion of its revenues from the sale of these brand      
multifunction products.  However, eFax.com expects that its future revenue      
growth will be dependent, in part, on expansion of its recently introduced      
Internet-based document services, such as its fax-to-e-mail service, and on     
further licensing of eFax.com's hardware and software technologies and software 
products. However, we cannot assure you that eFax.com will realize growth in    
revenues from such sales.   If such growth in revenues does not occur and if    
revenues from the sale of eFax.com's brand multifunction products does not to   
continue at past growth rates, it could have a material adverse effect on       
eFax.com's business, financial condition and results of operations.             

WE DEPEND ON THE CONTINUED GROWTH OF INTERNET COMMERCE.  WE FACE THE RISKS THAT 
INTERNET COMMERCE MAY NOT GROW AS RAPIDLY AS ANTICIPATED AND THAT THE INTERNET  
MAY EXPERIENCE TECHNICAL PROBLEMS DUE TO INSUFFICIENT INFRASTRUCTURE AND        
INADEQUATE TECHNOLOGICAL IMPROVEMENTS.                                          

   eFax.com intends to derive a significant portion of its revenues from its
fax-to-e-mail service, called "eFax", and related products. Rapid growth in the 
use of and interest in the Internet and online Internet services is a recent    
phenomenon. As a result, a sufficiently broad base of consumers may not adopt   
and continue to use the Internet and other online services as a way of          
purchasing and conducting business. Internet web-based advertising and the      
sales of premium Internet services are relatively new. It is difficult to       
predict the extent that these will grow, or if they will grow at all. In        
addition, the Internet may not prove to be a viable commercial marketplace for  
reasons such as potentially inadequate development of:                          

o   Internet network infrastructure;                                  

o   technologies which enable use of the Internet; and                

o   performance improvements to support increased levels of Internet  
activity.                                                     

If any of the following take place, it could have a material adverse  
effect on eFax.com's business, financial condition and results of operation:    

    o   if the use of the Internet and other online services does not continue
to increase or increases more slowly than expected;           

  o   if the infrastructure for the Internet and online services proves to
be inadequate to effectively support expansion; or            

o   if the Internet does not become a viable commercial marketplace.  

OUR MANUFACTURING CUSTOMERS, WHICH PROVIDE A SIGNIFICANT PORTION OF OUR         
REVENUES, MAY NOT CONTINUE TO DEVELOP, MARKET OR SELL PRODUCTS INCORPORATING    
EFAX.COM'S TECHNOLOGY.                                                          

   eFax.com has derived a significant portion of its revenues from licensing
of its software and hardware and software technologies to other parties and     
from providing development services to manufacturing customers. eFax.com        
currently has manufacturing relationships with Hewlett-Packard Company, Oki     
Data Corporation, and Konica Business Systems. eFax.com anticipates that it     
will derive a significant portion of its revenues in the future from its        
manufacturing customers and that eFax.com's revenues will be dependent upon,    
among other things, the ability and willingness of its manufacturing customers  
to develop and promote multifunction products that incorporate eFax.com's       
technology. The ability and willingness of these manufacturing customers to do  
this is based upon a number of factors, including eFax.com's ability to         
complete timely development of designs for them. We cannot give you any         
assurances regarding the ability or willingness of eFax.com's manufacturing     
customers to continue developing, marketing and selling products incorporating  
eFax.com's technology. The loss of any of eFax.com's significant manufacturing  
customers could have a material adverse effect on eFax.com's business,          
financial condition and results of operations.                                  

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

OUR DEALERS AND DISTRIBUTORS MAY REDUCE OR DELAY SALES OR STOP MARKETING        
EFAX.COM'S PRODUCTS WITH A RESULTING LOSS OF REVENUES.                          

  eFax.com has derived a substantial portion of its revenues from sales of
its JetFax brand multifunction products through dealers and distributors.       
eFax.com expects that sales of these products through its dealers and           
distributors will continue to account for a substantial portion of eFax.com's   
revenues for the foreseeable future. eFax.com currently maintains distribution  
relationships with dealers associated with IKON Office Solutions, a national    
group of office equipment dealers, and A. Messerli AG, one of eFax.com's office 
equipment dealers located in Switzerland. Each of eFax.com's dealers and        
distributors can stop marketing eFax.com's products with only limited notice to 
eFax.com and with little or no penalty. The loss of one or more of eFax.com's   
major dealers or distributors could have a material adverse effect on           
eFax.com's business, financial condition and results of operations. eFax.com's  
dealers and distributors also offer competing products manufactured by third    
parties. We can give no assurance that eFax.com's dealers and distributors will 
give priority to the marketing of eFax.com's products as compared to the        
marketing of our competitors' products. Any reduction or delay in sales of      
eFax.com's products by our dealers and distributors could have a material       
adverse effect on eFax.com's business, financial condition and results of       
operations.                                                                     

WE HAVE A HISTORY OF OPERATING LOSSES AND AN ACCUMULATED DEFICIT.               

eFax.com has had annual net losses since the company was formed.      
eFax.com's historical losses and certain preferred stock dividends have         
resulted in an accumulated deficit of approximately $36.9 million as of June    
30, 1999. We can give you no assurance that eFax.com will achieve profitability 
on a quarterly or annual basis in the future.                                   

WE MAY FAIL TO ADAPT TO OUR MARKET'S RAPIDLY CHANGING TECHNOLOGY AND EVOLVING   
INDUSTRY STANDARDS AND WE MAY LOSE COMPETITIVENESS AND REVENUES AS A RESULT.    

The market for eFax.com's products and services is characterized by   
rapidly changing technology, evolving industry standards and needs, and         
frequent new product introductions. As the market for Internet-based document   
communication and handling services grows, this market will begin to exert more 
pressure on companies to develop advanced features at more economical pricing.  
The multifunction product market already expects the continued development and  
release of new products with better performance and improved features at        
competitive prices. As product development increases in complexity and the      
expected time to bring a product to market continues to decrease, the risk and  
difficulty in meeting these development schedules increases and the costs to    
eFax.com and its manufacturing customers also increases. In addition, eFax.com, 
its manufacturing customers and their competitors may, from time to time,       
announce new products, capabilities or technologies that may replace or shorten 
the life cycles of eFax.com's brand products and software and the life cycles   
of manufacturing customers' products incorporating eFax.com's technology.       
eFax.com's success will depend on, among other things:                          

o   market acceptance of eFax.com's product offerings; and            

   o   the ability of eFax.com and its manufacturing customers to respond to
industry changes and market demands.                          

Any failure of eFax.com to anticipate or respond adequately to the rapidly      
changing technology and evolving industry standards and needs could result in a 
loss of our competitiveness or revenues. Any significant delay in our           
development or introduction of new and enhanced products and services could     
also result in a loss of competitiveness or revenues. Such a loss of            
competitiveness or revenues could have a material adverse effect on eFax.com's  
business, financial condition and results of operations.                        

WE FACE A HIGH LEVEL OF COMPETITION IN OUR INTERNET-RELATED INDUSTRY.           

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

The market for Internet-related document communication and handling   
services, such as eFax.com's fax-to-e-mail service,  is a newly emerging market 
and competitors are just beginning to appear.  eFax.com anticipates that it     
will need to:                                                                   

o   provide good service and grow its business rapidly to meet demand;

o   create name recognition for eFax.com in advance of competitors;   

o   build its subscriber base prior to any significant entry by the   
competition; and                                              

o   continue to expand and improve on its eFax fax-to-e-mail service  
offerings.                                                    

    eFax.com's technology, development services and software primarily compete
with solutions developed internally by manufacturing customers. Virtually all   
of eFax.com's manufacturing customers have significant investments in their     
existing solutions.  These manufacturing customers have the substantial         
resources necessary to develop competing multifunction technologies and         
software that may be implemented into their own products.                       

eFax.com also competes with technologies, software and development    
services provided in the multifunction product market by other systems and      
software suppliers to manufacturing customers.                                  

With respect to hardware and software technologies for multifunction  
products, eFax.com competes with Peerless Systems Corporation, Personal         
Computer Products, Inc. and Xionics Document Technologies, Inc., among others.  
With respect to desktop software, eFax.com competes with Caere Corporation,     
Simplify Development Corporation, Smith Micro Software, Inc., Visioneer Inc.,   
Wordcraft International and Xerox, among others.  In the newly evolving market  
for fax- to-e-mail services, competitors include JFAX.com, Inc., an established 
business, and CallWave, a start-up that is just introducing its product.        

   The market for multifunction products and related technology and software
is highly competitive.  This market is characterized by continuous pressure to  
improve performance, to introduce new features and to accelerate the release of 
new products.  eFax.com's brand products compete primarily with the dominant    
vendors in the fax market, all of whom have substantially greater resources     
than eFax.com.  These dominant vendors include Canon Inc., Panasonic, a         
division of Matsushita Electrical Industrial Co., Ltd., Pitney Bowes Inc.,      
Ricoh Co. Ltd., Sharp Electronics Corporation and Xerox, among others. eFax.com 
also competes on the basis of vendor name and recognition, technology and       
software expertise, product functionality, development time and price.          

eFax.com anticipates increasing competition for its multifunction     
products, technologies, software under development and Internet services. Most  
of eFax.com's existing competitors, many of its potential competitors and all   
of eFax.com's manufacturing customers have substantially greater financial,     
technical, marketing and sales resources than eFax.com.  In the event that      
price competition increases, competitive pressures could cause eFax.com to:     

o   reduce the cost of its eFax Service offerings;                    

o   reduce the price of its brand products;                           

o   reduce the amount of royalties received on new licenses; and      

o   reduce the fees for its development services in order to maintain 
     existing business and generate additional product sales and license
and development revenues.                                     

In turn, these reductions could reduce eFax.com's profit margins and  
result in losses and a decrease in market share, which would have a material    
adverse effect on eFax.com's business, financial condition and results of       
operations.                                                                     

WE ARE DEPENDENT ON KEY PERSONNEL AND COULD BE AFFECTED BY THE LOSS OF THEIR    
SERVICES.                                                                       

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

 eFax.com is largely dependent upon the skills and efforts of its senior
management, particularly Edward R. Prince, III, known as ''Rudy", its Chief     
Executive Officer, and Lon Radin, its Vice President of Engineering, as well as 
other officers and key employees, some of whom only recently have joined        
eFax.com. eFax.com maintains key person life insurance policies on Rudy Prince  
and Lon Radin. None of eFax.com's officers or key employees have an employment  
agreement with eFax.com. eFax.com believes that its future success will depend  
in large part upon its ability to attract and retain highly skilled             
engineering, managerial, sales, marketing and operations personnel, many of     
whom are in great demand. Competition for such personnel, especially            
engineering personnel, has recently increased significantly. The loss of key    
personnel or the inability to hire or retain qualified personnel could have a   
material adverse effect on eFax.com's business, financial condition and results 
of operations.                                                                  

OUR RAPID GROWTH PLACES A STRAIN ON OUR OPERATIONS AND FINANCIAL RESOURCES AND  
WE MAY FAIL TO MANAGE OUR GROWTH EFFECTIVELY.  IN ADDITION, WE MAY FACE RISKS   
ASSOCIATED WITH ANY POTENTIAL ACQUISITION OF OTHER COMPANIES WHICH WE MAY       
CHOOSE TO UNDERTAKE.                                                            

  eFax.com has grown rapidly in recent years. A continuing period of rapid
growth could place a significant strain on eFax.com's management, operations    
and other resources. eFax.com's ability to manage its growth will require       
eFax.com to continue to invest in its operational, financial and management     
information systems, procedures and controls, and to attract, retain, motivate  
and effectively manage its employees. We can give no assurance that eFax.com    
will be able to manage its growth effectively. Failure to manage growth         
effectively would have a material adverse effect on eFax.com's business,        
financial condition and results of operations. eFax.com may, from time to time, 
pursue the acquisition of other companies, assets or product lines that         
complement or expand its existing business. Acquisitions involve a number of    
risks that could adversely affect eFax.com's operating results. These risks     
include:                                                                        

o   the diversion of management's attention from day-to-day business; 

o   the difficulty of combining and assimilating the operations and   
personnel of the acquired companies;                          

o   charges to the company's earnings as a result of the purchase of  
intangible assets; and                                        

o   the potential loss of key employees as a result of an acquisition.

  eFax.com has no present commitments nor is it engaged in any discussions
or negotiations regarding possible acquisitions. However, should any            
acquisition by eFax.com take place, we can give no assurance that this          
acquisition will not materially and adversely affect eFax.com or that any such  
acquisition will enhance eFax.com's business.                                   

WE ARE DEPENDENT ON A LIMITED NUMBER OF SUPPLIERS AND MAY BE AFFECTED BY        
CHANGES, DELAYS OR INTERRUPTIONS IN SUPPLY OF COMPONENTS OF OUR PRODUCTS FROM   
THESE SUPPLIERS.                                                                

eFax.com relies on various suppliers of components for its products.  
eFax.com generally buys components under purchase orders and does not have      
long-term agreements with its suppliers. Alternate suppliers may be readily     
available for some of these components. However, for other components, we do    
not know how long it would take to find a replacement supplier and to receive   
replacement components. If we need to find another supplier of those components 
which we now purchase from a single source, we may not have sufficient          
inventory to fill customer orders without interruption. Although we believe we  
could develop other sources for these single source components, no alternative  
source currently exists and the process of finding an alternate source could    
take several months or longer. Therefore, any interruption in the supply of     
these components could have a material adverse effect on eFax.com's business,   
financial condition and results of operations.                                  

eFax.com purchases many of the components used in its products from   
suppliers located outside the United States.  Foreign manufacturing facilities  
are subject to the risk of changes in governmental policies, imposition of      
tariffs and import restrictions and other factors beyond eFax.com's control. We 
can give you no assurance that United States or foreign trading policies will   

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

not restrict the availability of components or increase their cost. Any         
significant increase in component prices or decrease in component availability  
could have a material adverse effect on eFax.com's business, financial          
condition and results of operations.                                            

    Certain components used in eFax.com's products are available only from one
source. eFax.com is dependent on Oki America, Inc., as the supplier of major    
components, contained in eFax.com's Series M900, one of eFax.com's most         
important products.  Oki America is also a competitor of eFax.com.  eFax.com is 
also dependent on:                                                              

   o   American Microsystems, Inc. to provide customized integrated circuits
incorporating eFax.com's imaging and logic circuitry;         

o   Motorola, Inc. to provide microprocessors;                        

   o   Pixel Magic, Inc., a subsidiary of Oak Technology, Inc., to provide a
specialized imaging processor;                                

o   Conexant Systems, Inc., to provide modem chips.                   

Given our dependence on single source suppliers, any of the following 
events could have a material adverse effect on eFax.com's business, financial   
condition and results of operations:                                            

o   if any of these companies were to limit or reduce the sale of such
components to eFax.com;                                       

   o   if these suppliers were to experience financial difficulties or other
      problems which prevented them from supplying eFax.com with necessary
components;                                                   

 o   any shortage or interruption in the supply of any of the components
used in eFax.com's products; or                               

 o   the inability of eFax.com to obtain these components from alternate
sources on acceptable terms.                                  

WE GENERATE A SIGNIFICANT PORTION OF OUR REVENUES FROM OUR INTERNATIONAL        
ACTIVITIES AND WE ARE SUBJECT TO MANY RISKS AS A RESULT OF THESE ACTIVITIES.    

A significant portion of eFax.com's total revenues come from sales to 
eFax.com's customers outside the United States.  The international market for   
eFax.com's brand products and products incorporating eFax.com's technology and  
software is highly competitive.  Risks inherent in eFax.com's international     
business activities also include:                                               

o   currency fluctuations and restrictions;                           

o   the burdens of complying with a wide variety of foreign laws and  
regulations;                                                  

o   longer accounts receivable cycles;                                

o   the imposition of government controls;                            

o   risks of localizing and internationalizing products to local      
requirements in foreign countries;                            

o   trade restrictions;                                               

o   tariffs and other trade barriers;                                 

o   restrictions on bringing earnings back into the United States; and

o   potentially adverse tax consequences.                             

Any of these risks could have a material adverse effect on eFax.com's 
business, financial condition and results of operations. Substantially all of   
eFax.com's international sales are currently made in U.S. dollars. Therefore,   

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

increases in the value of the U.S. dollar relative to foreign currencies could  
make eFax.com's products less competitive in foreign markets. Because of        
eFax.com's international activities, it faces currency exposure and currency    
exchange risks. For example, eFax.com purchases some of its key components      
pursuant to purchase contracts which require payment in foreign currency which  
results in currency exchange risks.                                             

OUR ONLY MANUFACTURING FACILITY AND SEVERAL OF OUR SUPPLIERS ARE LOCATED IN ONE 
GEOGRAPHIC AREA.  A DISRUPTION OF OUR MANUFACTURING FACILITY AND OUR SUPPLIERS  
IN THE SAME GEOGRAPHIC AREA WOULD HAVE A NEGATIVE EFFECT ON OUR BUSINESS.       

eFax.com's manufacturing operations are located in its facility in    
Northern California.  In addition, eFax.com relies on several suppliers of      
components for eFax.com's products and a number of companies which assemble     
eFax.com products which are located in Northern California.  eFax.com does not  
currently operate multiple facilities in different geographic areas and does    
not have alternative sources for many of its components or assembly processes.  
As a result, a disruption of eFax.com's manufacturing operations, or the        
operations of its suppliers, could cause eFax.com to cease or limit its         
manufacturing operations. Consequently, this would have a material adverse      
effect on eFax.com's business, financial condition and results of operations.   

WE MAY BE ADVERSELY AFFECTED IF OUR COMPUTER SYSTEMS OR THOSE OF OUR            
DISTRIBUTORS, SUPPLIERS AND CUSTOMERS FAIL BECAUSE OF YEAR 2000 PROBLEMS.       

Readiness for the year 2000 refers to the issue surrounding computer  
programs that use two digits rather than four to define a given year.  These    
programs might read a date using "00" as the year 1900 rather than the year     
2000, which could cause a system failure or a miscalculation.                   

 We do not believe eFax.com's manufacturing facilities are vulnerable in
any significant way to year 2000 system failures involving non-information      
technology. In August 1998, eFax.com renovated its existing telephone system at 
a cost of approximately $40,000, which made the phone system ready for the year 
2000. eFax.com has invested approximately $367,000 and will continue to make    
certain investments, estimated not to exceed $50,000, in its software systems   
and applications to ensure eFax.com's information systems are ready for the     
year 2000. The necessary funds to support these renovations have come from      
eFax.com's operating budget and eFax.com does not anticipate that it will need  
to allocate special future funding outside of historical levels for this item.  
The financial impact of eFax.com's year 2000 readiness effort has not been and  
is not anticipated to be material to eFax.com's financial position or results   
of operations in any given year. For example, during 1997 and 1998, eFax.com    
purchased and implemented new manufacturing and accounting information systems  
with a total capitalized cost of $338,000. eFax.com has obtained written        
assurances from the vendor, QAD Inc., that the systems are ready for the year   
2000. However, eFax.com has not conducted internal testing of the systems'      
readiness.                                                                      

  eFax.com believes that its current products are ready for the year 2000.
Certain of eFax.com's older products, which may not be year 2000 ready, are no  
longer under warranty.  eFax.com believes it has no obligation related to these 
products.  If eFax.com is mistaken in this assessment, eFax.com could incur     
expenses in defending legal actions for breach of contract or other causes of   
action. We can give you no assurance that these expenses will not be material   
to eFax.com's financial position or results of operations.                      

As discussed above, eFax.com has recently implemented new information 
systems and accordingly does not anticipate any internal year 2000 problems     
from those information systems, databases or programs. However, year 2000       
problems faced by major distributors, suppliers, customers and financial        
service organizations with which we interact could adversely impact eFax.com.   
We expect to complete our assessment of the potential impact of these           
additional issues by August 31, 1999. We can give you no assurance that we will 
be able to detect all potential failures of eFax.com's computer systems or the  
computer systems of third parties. A significant failure of eFax.com's or a     
third party's computer system could have a material adverse effect on           
eFax.com's business, financial condition and results of operations. However, we 
are unable at this time to assess what might be the extent of such effect.      
eFax.com intends to complete a contingency plan by August 31, 1999, detailing   
actions that would be taken in the event that such a failure occurs.            

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ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK          

    No change has occurred since the filing by the Registrant on Form 10-K for
the year ended December 31, 1998. Reference is made to Part II, Item 7A,        
Quantitative and Qualitative Disclosures About Market Risk, in the Registrant's 
Annual Report on Form 10-K for the year ended December 31, 1998.                

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PART II.     OTHER INFORMATION                                                  

ITEM 1.     LEGAL PROCEEDINGS                                                   

In April 1999, the Company and E-Fax Communications, Inc. signed a    
settlement agreement in which E-Fax Communications, Inc. agreed to dismiss all  
charges against eFax.com, transfer all rights to the mark "E-FAX" to eFax.com,  
Inc., stop all use of the "E-FAX" trademark, and change its corporate name.     
The agreement called for eFax.com, Inc. to pay E-Fax Communications, Inc. a     
combination of cash and common stock in an amount not to exceed $2.5million.    

ITEM 2.     CHANGES IN SECURITIES                                               

(a)     Not applicable.                                               

  (b)     On May 10, 1999, eFax.com entered into a purchase agreement with
          an investor for the private placement of $15 million of Series A
          Convertible Preferred Stock, convertible into Common Stock based
          upon the five-day average stock price prior to closing which was
          $21.1375. The conversion price is subject to an adjustment after
         one year to the greater of the then current market price of the
            Common Stock or 60% of the initial conversion price. The agreement
            also includes 300,000 warrants exercisable at a 10% premium to the
          Series A Convertible Preferred Stock conversion price or $23.25.
          The Series A Convertible Preferred Stock includes an 8% dividend
        payable in cash or common stock at the option of eFax.com. The
closing occurred on May 13, 1999. eFax.com has filed a
       registration statement for the resale of the shares of Common
         Stock acquired on conversion of the Convertible Preferred Stock
      and upon exercise of the warrants.  Holders of the preferred
        shares shall have no voting rights, except as required by law,
          including but not limited to the General Corporation Laws of the
       State of Delaware. The Company cannot declare or pay any cash
        dividend or distribution on the common stock without the prior
            express written consent of the holders of not less than two-thirds
     of the then outstanding preferred shares. In the event of a
 liquidation of the Company, the holders of the Series A
  Convertible Preferred Stock would be entitled to receive
         distributions in preference to the holders of the Common Stock.

  (c)     During the second quarter ended June 30, 1999, eFax.com sold the
following unregistered securities:                    

            In April 1999, the Company issued 45,506 shares of common stock to
          E-Fax Communications, Inc. as part of a settlement agreement for
       trademark rights entered into on April 9, 1999 between E- Fax
           Communications, Inc. and eFax.com, Inc.  In July 1999, the amount
    of shares issued was increased to 127,592 per the terms of
            the agreement that specifies that the number of shares be based on
            the average share price just prior to a registration of the shares
         for resale becoming effective.  The average value of the shares
used in the computation was $15.675.                  

   In May 1999, the Company issued 975 shares of convertible
  preferred stock to Fisher Capital Ltd. and 525 shares of
     convertible preferred stock to Wingate Capital Ltd. for $15
          million in connection with a securities purchase agreement dated
         May 7, 1999 among eFax.com, Fisher Capital and Wingate Capital.
       The preferred shares are convertible into 461,266 and 248,374
        shares of common stock for Fisher Capital and Wingate Capital,
          respectively, based on a conversion price of $21.1375 per share.

      In May 1999, the Company issued warrants to purchase 195,000
       shares of common stock to Fisher Capital Ltd. and warrants to
            purchase 105,000 shares of common stock to Wingate Capital Ltd. in
           connection with a securities purchase agreement dated May 7, 1999
         among eFax.com, Fisher Capital and Wingate Capital. The warrant
   exercise price is $23.25. These warrants may be exercised
immediately.                                          

      In May 1999, the Company issued warrants to purchase 124,995
       shares of common stock to Reedland Capital Partners for their
          services in connection with the sale of Series A preferred stock
          and warrants to Fisher Capital and Wingate Capital.  The warrant
   exercise price is $26.33. These warrants may be exercised
immediately.                                          

           In May 1999, the Company issued warrants to purchase 5,000 shares
      of common stock to Global NAPS, Inc., in connection with the
      completion and acceptance of project milestones. The warrant
   exercise price is $19.06. These warrants may be exercised
immediately.                                          

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         The issuance and sale of all such securities was intended to be
       exempt from registration and prospectus delivery requirements
       under the Securities Act of 1933, as amended (the "Securities
      Act"), by virtue of Section 4(2) thereof due to, among other
          things, (i) the limited number and nature of persons to whom the
     securities were issued, (ii) the distribution of disclosure
      documents to the investors, (iii) the fact that such persons
            represented and warranted to the Company, among other things, that
            such persons were acquiring the securities for investment only and
         not with a view to the resale or distribution thereof, and (iv)
            the fact that a certificate representing the securities was issued
       with a legend to the effect that such securities had not been
          registered under the Securities Act or any state securities laws
     and could not be sold or transferred in the absence of such
registration or an exemption therefrom.               

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 

 The Company's Annual Meeting of Stockholders (the "Annual Meeting") was
held on May 13, 1998 at 2:00 p.m., local time, at the Stanford Park Hotel, 100  
El Camino Real, Menlo Park, California. The Annual Meeting was held for the     
purpose of (a) electing seven members of the Board of Directors to serve for    
the ensuing year and until their successors are elected, (b) approving an       
amendment to the Company's Certificate of Incorporation to change the name of   
the Company to "eFax.com," (c) approving an increase in the aggregate number of 
shares of Common Stock authorized for issuance under the Company's 1995 Stock   
Plan, as amended, by 1,000,000 shares, (d) ratifying and approving the          
appointment of Deloitte & Touche LLP as the Company's independent auditors for  
the fiscal year ending December 31, 1999 and (e) transacting such other         
business as may properly come before the Annual Meeting. The two matters below  
were voted upon and approved:                                                   

Proposal No. 1 - Election of Directors:                                         

  The following persons were duly elected to the Board by the stockholders
for a one year term and until their successors are elected and qualified:       

                                                                [Download Table]


    NOMINATION               VOTES FOR          VOTES ABSTAINED
    ----------               ---------          ---------------
                                                               
 Rudy Prince                 10,774,850              39,822    
 Thomas B. Akin              10,774,750              39,922    
 Douglas Y. Bech             10,774,850              39,822    
 Steven J. Carnevale         10,774,850              39,822    
 Edward R. Prince, Jr.       10,774,850              39,822    
 Lon B. Radin                10,774,850              39,822    
 Albert E. Sisto             10,774,850              39,822    


Proposal No. 2 - Approval of an Amendment to the Company's Certificate of       
Incorporation to Change the Name of the Company:                                

                                                                [Download Table]


                    VOTES             VOTES   
 VOTES FOR         AGAINST          ABSTAINED 
-----------       ---------        -----------
                                              
 10,798,398         10,670            5,604   


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Proposal No. 3 - Approval of an Increase in the Shares Authorized for Issuance  
Under the 1995 Stock Plan, as Amended:                                          

                                                                [Download Table]


                    VOTES             VOTES                    
 VOTES FOR         AGAINST          ABSTAINED          UNVOTED 
-----------       ---------        -----------        ---------
                                                               
 2,133,866         116,517           40,335           8,523,954


Proposal No. 4 - Ratification of Appointment of Independent Auditors:           

                                                                [Download Table]


                                              VOTES          VOTES   
      NOMINATION              VOTES FOR      AGAINST       ABSTAINED 
     ------------            -----------    ---------     -----------
                                                                     
 Deloitte & Touche LLP       10,783,371      15,730         15,571   


ITEM 5.     OTHER INFORMATION                                                   

Not applicable.                                                       

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K                                    

(a)     Exhibits.                                                     

                                                                [Download Table]


Exhibit                                                                   
Number                          Description                               
------    --------------------------------------------------------------- 
                                                                          

 4.6      Form of Warrant to Purchase Common Stock by and between eFax and
          Reedland Capital Partners.                                      

27.1      Financial Data Schedule.                                        

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


   (b)     Reports on Form 8-K. The Company did not file any Reports on Form
8-K during the quarter ended June 30, 1999.           

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SIGNATURE   

Pursuant to the requirements of the Securities Exchange Act of 1934, the        
registrant has duly caused this report to be signed on its behalf by the        
undersigned thereunto duly authorized.                                          

                                          EFAX.COM, INC.
                                        --------------------------
                                        (Registrant)

Date: August 17, 1999                          By: /s/ TODD J. KENCK            
                                             -------------------------
                                           Todd J. Kenck
                                             Vice President, Finance
                                             and Chief Financial Officer
                                           (Authorized Officer and
                                           Principal Financial and
                                             Accounting Officer)

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-Q’ Filing		Date		First		Last			Other Filings
		12/31/99		24
		8/31/99		21
		8/23/99		12
Filed on:		8/17/99		26
		8/16/99		1		12
For Period End:		7/3/99		1		9
		6/30/99		2		25			10-Q/A
		5/13/99		13		23			DEF 14A,  PRE 14A
		5/10/99		13		23
		5/7/99		23
		4/9/99		23
		4/4/99		9
		3/31/99		11
		2/8/99		9					8-K
		1/3/99		9
		12/31/98		2		22			NT 10-K
		9/18/98		12
		7/4/98		4		9			10-Q
		6/30/98		2		12
		5/13/98		24					DEF 14A
		4/5/98		9
		1/4/98		9
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