UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

Form 10-Q

 

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2001

 

[    ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

 

Commission file number: 33-17679

 

North American DataCom, Inc.

(Exact name of small business issuer as specified in its charter)

 

Delaware

84-1067694

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

751 County Road 989, Building 1000, Iuka, MS

38852

(Address of principal executive offices)

(Zip Code)

662-424-5050

(Issuer’s telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such report (s)), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
Common Stock, $.0001 par value, 98,656,448 shares outstanding as of May 10, 2001.

 

 

 

 

 

 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Page

    
Item 1. Financial Statements (Unaudited). 2
Item 2. Management’s Discussion and Analysis. 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 

PART II. OTHER INFORMATION

    
Item 1. Legal Proceedings. 19
Item 2. Changes in Securities and Use of Proceeds. 19
Item 3. Default Upon Senior Securities. 20
Item 4. Submission of Matters to a Vote of Security Holders. 20
Item 5. Other Information. 20
Item 6. Exhibits and Reports on Form 8-K 21

 

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

Unaudited Condensed Financial Information Page
   Condensed Consolidated Balance Sheets as of March 31, 20001 (Unaudited) 2
   Condensed Consolidated Statements of Operation (Unaudited) 4
   Condensed Consolidated Statements of Comprehensive Operations (Unaudited) 4
   Condensed Consolidated Statements of Changes in Stockholders' Equity 4
   Condensed Consolidated Statements of Cash Flows (Unaudited) 5
   Notes to Condensed Consolidated Financial Statements 6

 

NORTH AMERICAN DATACOM, INC.
Consolidated Balance Sheets as of March 31, 2001 (Unaudited) and June 30, 2000
   

ASSETS

March 31, 2001 June 30, 2000
Current Assets $ $
   Cash and Cash Equivalents 78,868 20,948
   Accounts Receivable, Net of Allowance of $2,400 for March 31
     and June 30, 2000 134,916 37,848
   Notes Receivable, Net of Long-term Maturities - 2,920
   Inventories 5,728 438
   Employee Advances 2,555 102,555
Total Current Assets 222,066

164,709

 
Investments (Note 3) - 90,000
 
Property and Equipment
   Conduit and Optic Fiber 14,524,203 14,396,891
   Computers and Equipment 727,233 717,416
   Communications Equipment and Wireless Towers 626,169 371,688
   Software 351,124 -
   Other Equipment 65,215 77,278
   Vehicle 34,201 -
   Leasehold Property and Improvements 15,960 15,880
   Office Furniture 3,681 3,231
     Total Property and Equipment 16,347,786 15,582,384
        Less Accumulated Depreciation and Amortization (87,287) (35,945)
   Net Property and Equipment 16,260,499 15,546,439
Advance to Affiliate (Note 5) 200,000 -
Other Assets (Note 6) 470,480 449,832
 
TOTAL ASSETS

$

17,153,046

$

16,250,980

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 
Current Liabilities:
   Trade Note Payable, Net of Unamortized Discount (Note 4)

$

15,118,000 15,152,173
   Accounts Payable 1,104,249 24,034
   Accrued Expenses and Other Liabilities (Note 8) 364,288 275,552
   Convertible Notes Payable 33,541 -
     Total Current Liabilities 16,620,078 15,451,759
Payable to Director - 23,917
TOTAL LIABILITIES

$

16,620,078

$

15,475,676

 

Commitments and Contingencies

- -

 

Stockholders' Equity

   Convertible Preferred Stock, No Par Value; 400,000 Shares

     Authorized

- -

   Series B Convertible Preferred Stock, $.0001 Par Value;

     6% Cumulative; 500,000 Shares Authorized; 1,504 and 300 Shares

     Issued and Outstanding as of March 31, 2001 and June 30, 2000.

1,503,641 300,000

    

Common Stock, $.0001 Par Value 150,000,000 Shares Authorized, 98,656,448 shares issued and outstanding as March 31, 2001and 97,992,758 Shares Issued and Outstanding at June 30, 2000

 

9,865

 

9,798

Additional Paid-In Capital

3,880,963

2,667,567

Other Accumulated Comprehensive Income

(189,200) (99,200)

Retained Earnings (Accumulated Deficit)

(4,672,301)

(2,102,861)

 
Total Stockholders' Equity 532,968

775,304

 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

17,153,046

$

16,250,980

See Accompanying Notes to Condensed Consolidated Financial Statements

 

NORTH AMERICAN DATACOM, INC.

Condensed Consolidated Statements of Operation

(Unaudited)

For the Three Months Ended March 31, 2001

For the Three Months Ended March 31, 2000

For the Nine Months Ended March 31, 2001

For the Nine Months Ended March 31, 2000

Net Service Revenues

$

201,911 $ 69,787

$

358,284

$

167,997
Cost of Services 60,345 22,420 157,071 29,742
  Gross Profit 141,566 47,367 201,213 138,255
Expenses:
  Selling, General and Administrative 731,727 326,568 2,245,174 1,009,792
Operating Loss (590,161) 0 (2,043,961) (871,537)
  Other Income (Expense), Net (176,410 876,263 (525,473) 6,233
Loss Before Income Tax Expense (Benefit) (766,571) (279,201) (2,569,433) (865,304)
   Income Tax Expense (Benefit)

-

-

-

-

Net Loss

$

(766,571)

$

(279,271)

$

(2,569,433)

$

(865,304)
Basic and Diluted Loss Per
Common Share (Note 1)

$

(0.01)

$

(0.003)

$

(0.03)

$

(0.01)
Weighted Average Number of Common
Shares Outstanding
   Basic and Diluted (Note 1) 98,656,448 4,106,655 98,546,362 41,837,863

See Accompanying Notes to Condensed Consolidated Financial Statements

 

NORTH AMERICAN DATACOM, INC.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

 

For the Three Months Ended March 31, 2001

For the Three Months Ended March 31, 2000

For the Nine Months Ended March 31, 2001

For the Nine Months Ended March 31, 2000

Net loss

$

(766,571) $ (279,271)

$

(2,2569,433)

$

(865,304)
Net change in unrealized loss on
   investments (Note 3) - (41,650) (90,000) (41,650)
Comprehensive loss

$

(766,571)

$

(320,921)

$

(2,659,433) $ (906,954)

See Accompanying Notes to Condensed Consolidated Financial Statements

 

NORTH AMERICAN DATACOM, INC.

Condensed Consolidated Statements of Changes in Stockholders Equity

(Unaudited)

Net

Series B Preferred

Common Stock

Additional Unrealized

Stock

Par Paid-In Accumulated Loss on Stockholders'
Shares Amount

Shares

Value Capital Deficit Investments Equity
Balance, June 30, 2000 300 $300,000 97,992,758 $9,798 $2,667,567 $(2,102,861) $(99,200) $775,304
Issuance of Series B
  preferred stock 500 500,000 - - - - - 500,000
Sale of common Stock - - 317,500 32 634,968 - - 635,000
Sale of common Stock - - 150,000 15 442,110 - - 442,125
Exercise of stock
  options to acquire
  common stock - - 11,542 1 9,999 - - 10,000
Exercise of stock
  options to acquire
  common stock - - 115,423 12 9,988 - - 10,000
Issuance of shares
  for services - - 1,000 - 2,000 - - 2,000
Net unrealized loss
  from investments - - - - - - (30,000) (30,000)
Net loss for the period
  ended September 30, 2000 - - - - - (869,086) - (869,086)
Balance, September 30, 2000 800 $800,000 98,588,223 $9,858 $3,766,632 $(2,971,947) $(129,200) $(1,475,343)
Issuance of shares for services - - 20,225 2 44,188 - - 44,190
Issuance of shares for
  financial services rendered - - 30,000 3 59,997 - - 60,000
Issuance of shares for
  financial services rendered - - 3,000 1 8,842 - - 8,843
Exercise of stock
  options to acquire
  common stock - - 15,000 1 1,304 - - 1,305
Issuance of Series B
  preferred stock 326 325,904 - - - - - 325,904
Net change in unrealized loss
  from investments - - - - - - (60,000) (60,000)
Net loss for the period
  ended December 31, 2000 - - - - - (933,784) - (933,784)
Balance, December 31, 2000 1,126 $1,125,904 98,656,448 $9,865 $3,880,963 $(3,905,731) $(189,200) $(921,801)
Issuance of Series B
  preferred stock 378 $377,738 - - - - - 377,738
Net change in unrealized loss
  from investments - - - - - - (60,000) (60,000)
Net loss for the period
  ended March 31, 2001 - - - - - (766,571) - (766,571)
Balance, March 31, 2001 1,504 $1,503,641 98,656,448 $9,865 $3,880,963 $(4,672,301) $(189,200) $532,968
See Accompanying Notes to Condensed Consolidated Financial Statements

 

NORTH AMERICAN DATACOM, INC.
Condensed Consolidated Statement of Cash Flows

(Unaudited)

  

For the Nine Months Ended March 31, 2001

For the Nine Months ended March 31, 2000

CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss

$

(2,569,433)

$

(865,304)
Adjustment to reconcile net loss to net cash used for Operating Activities:
   Depreciation and amortization (Note 4) 649,786 30,374
 
Changes in operating assets and liabilities, net of acquisitions::
   Increase (Decrease) in accounts receivable (97,068) (16,001)
   Increase (Decrease) in notes receivable 2,920 (129,105)
   Increase (Decrease) in inventory (5,290) -
   Increase (Decrease) in other assets and employee advances 57,680 (38,037)