UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

 

Form 10-Q

                             (Mark one)

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

OF 1934

For the quarterly period ended:  December 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                   (IRS Employer Identification No.)

                                               organization)

 

                  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, 103,437,669 shares outstanding as of February 18, 2002.

 


TABLE OF CONTENTS

 

PART I.      FINANCIAL INFORMATION
Item 1.        Financial Statements (Unaudited). 3
Item 2.        Management's Discussion and Analysis of Financial Condition and Results of Operations. 16
Item 3.        Quantitative and Qualitative Disclosures About Market Risk. 25
PART II.    OTHER INFORMATION
Item 1.        Legal Proceedings. 25
Item 2.        Changes in Securities and Use of Proceeds. 25
Item 3.        Defaults Upon Senior Securities. 26
Item 4.        Submission of Matters to a Vote of Security Holders. 26

Item 5.        Other Information.

26
Item 6.        Exhibits and Reports on Form 8-K. 26

 


PART I. FINANCIAL INFORMATION

 

Item 1.        Financial Statements (Unaudited)

 

Condensed Financial Information (Unaudited)
   Condensed Consolidated Balance Sheets  4
   Condensed Consolidated Statements of Operations 5
   Condensed Consolidated Statements of Comprehensive Loss  5
   Condensed Consolidated Statement of Changes in Stockholders' Equity 6
   Condensed Consolidated Statements of Cash Flows  7
   Notes to Condensed Consolidated Financial Statements   8


NORTH AMERICAN DATACOM, INC.

Consolidated Balance Sheets as of December 31, 2001 (Unaudited) and June 30, 2001

Dec. 31, 2001

June 30, 2001

(Unaudited)

ASSETS

Current Assets:

     Cash and Cash Equivalents

$

 31,968

$

18,484

     Accounts Receivable, Net of Allowance of $3,000 and $2,400

      at December 31, 2001 and June 30, 2001

 57,283

76,230

     Inventories

8,341

5,978

     Employee Advances

2,555

2,555

     Other

8,000

-

          Total Current Assets

$

108,147

$

103,247

Investments (Note 3)

-

-

Property and Equipment:

     Conduit and Optic Fiber (Note 4)

14,525,905

14,525,905

     Computers and Equipment

728,102

728,032

     Communications Equipment and Wireless Towers

640,736

627,507

     Software

355,164

351,184

     Other

100,530

123,763

          Total Property and Equipment

16,350,437

16,356,391

     Less Accumulated Depreciation and Amortization

(168,271)

(107,992)

          Net Property and Equipment

16,182,166

16,248,399

Other Assets (Note 5)

868,283

651,794

          Total Assets

$

17,158,596

$

17,003,440

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

     Trade Note Payable (Note 4)

$

15,118,000

$

15,118,000

     Accounts Payable

773,262

1,044,558

     Accrued Expenses

877,635

692,103

     Dividends Payable

-

55,950

     Notes Payable (Note 10)

220,000

-

     Convertible Notes Payable

33,541

33,541

          Total Current Liabilities

17,022,438

16,944,152

Payable to Officer

-

25,662

          Total Liabilities

17,022,438

16,969,814

Commitments and Contingencies (Notes 4, 5, 6 and 8)

-

-

Stockholders' Equity (Note 9)

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

       Authorized, none outstanding

- -

     Series B Convertible Preferred Stock, $.0001 Par Value; 6%

       Cumulative; 5,000 Shares Authorized 2,279 and 1,756 Shares

       Issued and Outstanding as of

       December 31, 2001 and June 30, 2001, respectively

  2,278,167 1,755,492

     Common Stock, $.0001 Par Value; 150,000,000 Shares

       Authorized; 103,437,669 and 100,167,074 Shares Issued and

       Outstanding as of December 31, 2001and

       June 30, 2001, respectively

  10,343 10,016

     Additional Paid in Capital

5,039,878

4,585,655

     Other Accumulated Comprehensive Loss

(250,000)

(250,000)

     Accumulated Deficit

(6,942,230)

(6,067,538)

          Total Stockholders' Equity

136,158

33,626

          Total Liabilities and Stockholders' Equity

$

17,158,596

$

17,003,440

See accompanying notes to condensed consolidated financial statements (unaudited).


 

NORTH AMERICAN DATACOM, INC.

Condensed Consolidated Statements of Operations (Unaudited)

For the Three Months Ended

For the Six Months Ended

December 31,

December 31,

2001 2000 2001 2000
Net Service Revenues $ 105,936 $ 85,366 $ 244,859 $ 156,373
Cost of Services 41,739 48,212 72,074 96,226
Gross Profit 64,197 37,154 172,785 60,147
Selling, General and Administrative Expense 574,471  798,090 995,669 1,513,954
Operating Loss (510,274) (760,936) (822,884) (1,453,807)
Other Income (Expense):
   Interest Expense - (172,848) - (349,063)
   Loss in equity investment (51,896) - (51,896) -
   Other 46 - 88 -
       Total Other Income (Expense) (51,850) (172,848) (51,808) (349,063)
Loss Before Income Tax Expense (Benefit) (562,124) (933,784) (874,692) (1,802,870)
   Income Tax Expense (Benefit) - - - -
Net Loss (562,124) (933,784) (874,692) (1,802,870)
Net Loss Applicable to Common Shareholders (Note 1) $ (0.005) $ (0.01) $ (0.008) $ (0.02)
Weighted Average Number of Common Shares Outstanding-Basic and Diluted (Note 1) 102,469,299 98,638,724 101,444,853 98,491,320
See accompanying notes to condensed consolidated financial statements (unaudited).

 

NORTH AMERICAN DATACOM, INC.

Condensed Consolidated Statements of Comprehensive Loss (Unaudited)

For the Three Months Ended

For the Six Months Ended

December 31,

December 31,

2001 2000 2001 2000
Net Loss $ (562,124) $ (933,784) $ (874,692) $ (1,802,870)
Net change in unrealized loss on investments (Note 3) - (60,000) - (90,000)
Comprehensive loss $ (562,124) $ (993,784) $ (874,692) $ (1,892,870)
See accompanying notes to condensed consolidated financial statements (unaudited).


NORTH AMERICAN DATACOM, INC.

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

 
Net Stock-
Unrealized holders

Series B Preferred

Common Stock

Additional

Accumulated

Loss on

holders'

Shares

Amount

Shares

Amount

PIC

Deficit

Investments

Equity

Balance, June 30, 2001

1,756

$1,755,492

100,167,074

$10,016

$4,585,656

$(6,067,538)

$(250,000)

$33,626

Issuance of Series B

Preferred Stock

191

190,990

-

-

-

-

-

190,990

Issuance of additional Series

B Preferred Stock (Note 7)

56

55,950

-

-

-

-

-

55,950

Issuance of shares for

services rendered

-

-

90,000

9

12,591

-

-

12,600

Issuance of shares for

equipment - - 40,000 4 9,996 - - 10,000
Issuance of shares for

settlement of claims (Note 7)

-

250,000

25

25,600

-

-

25,625

Stock options (Note 10)

-

-

-

-

8,000

-

-

8,000

Net loss of the period
ended September 30, 2001 - - - - - (312,568) - (312,568)
Balance,

September 30, 2001

2,003

$2,002,432

100,547,074

$10,054

$4,641,843

$(6,380,106)

$(250,000)

$24,223

Issuance of Series B Preferred

Stock

276

275,735

-

-

-

-

-

275,735

Issuance of Shares for

services rendered

-

-

150,232

15

20,687

-

-

20,702

Issuance of Shares for

services rendered

-

-

2,740,363

274

377,348

-

-

377,622

Net loss for the period ended

December 31, 2001

-

-

-

-

-

(562,124)

-

(562,124)

Balance,  December 31, 2001

2,279

$2,278,167

103,437,669

$10,343

$5,039,878