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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 000-27525
DSL.NET, INC.
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(Exact name of registrant as specified in its charter)
Delaware 06-1510312
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
545 Long Wharf Drive
New Haven, Connecticut 06511
---------------------- -----
(Address of principal executive offices) (Zip Code)
(203) 772-1000
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(Registrant's telephone number, including area code)
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 May 10, 2000, the registrant had 65,234,468 shares of Common Stock
outstanding.
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<PAGE>
DSL.NET, INC.
INDEX
Page
Number
------
Part I - Financial Information
Item 1. Consolidated Financial Statements ................................. 3
Consolidated Balance Sheets at December 31, 1999 and
March 31, 2000................................................. 3
Consolidated Statements of Operations for the three
months ended March 31, 1999 and 2000........................... 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1999 and 2000........................... 5
Notes to Consolidated Financial Statements........................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................ 7
Item 3. Quantitative and Qualitative Disclosures about Market Risk......... 10
Part II - Other Information
Item 2. Changes in Securities and Use of Proceeds.......................... 11
Item 6. Exhibits and Reports on Form 8-K................................... 11
Signatures................................................................. 12
Exhibit Index.............................................................. 13
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DSL.NET, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE><CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------- -------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 66,178,261 $ 177,324,520
Marketable securities 13,274,183 8,325,949
Accounts receivable (net of allowance of $62,603and $117,603,
respectively) 318,516 774,080
Prepaid expenses and other current assets 1,043,935 1,834,935
------------- -------------
Total current assets 80,814,895 188,259,484
Fixed assets (net of accumulated depreciation and amortization of
$1,787,747 and $4,052,743, respectively) 32,664,924 53,599,361
Goodwill and other intangible assets, net 3,420,135 3,238,111
Other assets 731,818 789,773
------------- -------------
Total assets $ 117,631,772 $ 245,886,729
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 9,587,186 $ 10,970,714
Accrued liabilities 3,173,173 3,785,070
Accrued salaries 848,841 1,023,723
Deferred revenue 234,061 409,016
Current portion of capital leases payable 715,953 729,171
Current portion of notes payable 281,316 735,880
------------- -------------
Total current liabilities 14,840,530 17,653,574
Capital lease obligation 892,906 706,183
Notes payable 1,165,450 1,913,317
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Total liabilities 16,898,886 20,273,074
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Commitments and contingencies
Stockholders' equity:
Common stock, $0.0005 par value; 200,000,000 shares authorized;
58,382,196 and 64,337,227 shares issued and outstanding,
respectively 29,191 32,169
Additional paid-in capital 141,245,583 278,770,365
Deferred compensation (13,361,940) (7,670,648)
Accumulated deficit (27,179,948) (45,518,231)
------------- -------------
Total stockholders' equity 100,732,886 225,613,655
------------- -------------
Total liabilities and stockholders' equity $ 117,631,772 $ 245,886,729
============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
3
<PAGE>
DSL.NET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE><CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------------------
1999 2000
------------ ------------
<S> <C> <C>
Revenue $ 48,188 $ 1,737,306
------------ ------------
Operating expenses:
Network and operations (excluding $20,988 and
$129,345 of stock compensation, respectively) 264,457 11,367,972
Sales and marketing (excluding $19,536 and $268,286
of stock compensation, respectively) 129,375 4,988,235
General and administrative (excluding $781,736 and
$1,130,805 of stock compensation, respectively) 525,184 3,703,940
Stock compensation 822,260 1,528,436
------------ ------------
Total operating expenses 1,741,276 21,588,583
------------ ------------
Operating loss (1,693,088) (19,851,277)
------------ ------------
Interest income, net 6,474 1,521,225
Other expense, net -- 8,231
------------ ------------
Net loss $ (1,686,614) $(18,338,283)
============ ============
Net loss per share-basic and diluted $ (0.51) $ (0.33)
============ ============
Shares used in computing net loss per share 3,282,640 55,694,451
============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
4
<PAGE>
DSL.NET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE><CAPTION>
THREE MONTHS ENDED
MARCH 31,
1999 2000
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,686,614) $ (18,338,283)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization 48,165 2,456,356
Non-cash compensation expense 822,260 1,528,436
Net changes in current assets and liabilities:
Decrease / (increase) in accounts receivable 5,600 (455,564)
Increase in other current assets (335,990) (791,000)
Increase in other assets -- (57,958)
(Decrease) / increase in accounts payable (130,954) 1,383,528
Increase in accrued liabilities 729,036 786,780
Increase in deferred revenue 5,189 174,955
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Net cash used in operating activities (543,308) (13,312,750)
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Cash flows from investing activities:
Sale of marketable securities -- 4,948,234
Purchase of fixed assets (1,509,826) (23,199,433)
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Net cash used in investing activities (1,509,826) (18,251,199)
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Cash flows from financing activities:
Proceeds from preferred stock issuance 3,308,491 --
Proceeds from equipment notes payable 93,059 --
Proceeds from equipment credit facility -- 1,202,431
Proceeds from common stock issuances -- 141,690,615
Payments on equipment notes payable (66,667) --
Principal payments under capital lease obligation (2,790) (182,838)
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Net cash provided by financing activities 3,332,093 142,710,208
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Net increase in cash and cash equivalents 1,278,959 111,146,259
Cash and cash equivalents at beginning of period 39,479 66,178,261
------------- -------------
Cash and cash equivalents at end of period $ 1,318,438 $ 177,324,520
============= =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
5
<PAGE>
DSL.NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
1. Summary of Significant Accounting Policies
A. Basis of Presentation
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements. Actual
results may differ from those estimates.
The financial statements at March 31, 2000 and for the three months ended
March 31, 1999 and 2000 are unaudited, but include all adjustments (consisting
only of normal recurring adjustments) that the Company considers necessary for a
fair presentation of financial position and operating results. Operating results
for the three month period ended March 31, 2000 are not necessarily indicative
of results that may be expected for any future periods.
The accompanying unaudited interim financial statements have been prepared
with the assumption that users of the interim financial information have either
read or have access to the Company's audited financial statements for the year
ended December 31, 1999. Accordingly, footnote disclosures which would
substantially duplicate the disclosures contained in the Company's December 31,
1999 audited financial statements have been omitted from these unaudited interim
financial statements. These financial statements have been prepared in
accordance with the instructions to Form 10-Q and the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such instructions, rules and regulations. While management believes
the disclosures presented are adequate to make these financial statements not
misleading, these financial statements should be read in conjunction with the
Company's audited financial statements and related notes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999, which
has been filed with the Securities and Exchange Commission.
B. Earnings (Loss) Per Share
Basic earnings per share is computed by dividing income or loss applicable
to common shareholders by the weighted average number of shares of the Company's
common stock outstanding during the period, after giving consideration to shares
subject to repurchase.
Diluted earnings per share is determined in the same manner as basic
earnings per share except that the number of shares is increased assuming
exercise of dilutive stock options and warrants using the treasury stock method.
The diluted earnings per share amount has not been reported because the Company
has a net loss and the impact of the assumed exercise of the stock options and
warrants is not dilutive.
2. Stockholders' Equity
In March, 2000, the Company completed a public offering of 5,750,000 shares
of common stock, including the exercise of the underwriters' overallotment
option, at an offering price of $26.00 per share. Net proceeds to the Company
from this offering were approximately $141,573,000 after deducting underwriting
discounts and commissions and estimated offering expenses payable by the
Company.
In the first quarter, the Company recorded non-cash compensation expense of
$870,000 relating to the vesting of stock options held by members of the
Company's former advisory board. The advisory board was dissolved in the first
quarter and therefore the related unamortized deferred compensation balance of
$4,163,000 related to unvested stock options held by advisory board members was
reclassified against additional paid-in capital. The remaining unamortized
deferred compensation balance of approximately $7,671,000 as of March 31, 2000,
relating to stock options and restricted stock held by employees and directors,
is being amortized over the respective remaining vesting periods.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion of the financial condition and results of
operations of DSL.net should be read in conjunction with the financial
statements and the related notes thereto included elsewhere in this Form 10-Q
and the audited financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in our Annual Report on Form 10-K for the year ended December 31, 1999,
which has been filed with the Securities and Exchange Commission.
OVERVIEW
We provide high-speed data communications and Internet solutions using
digital subscriber line (DSL) technology to small and medium sized businesses,
primarily located in second and third tier cities. We began providing service in
May 1998 and provided service in 186 cities as of March 31, 2000.
We have incurred operating losses and net losses for each month since our
formation. For the periods ended March 31, 2000 and December 31, 1999, we have
experienced net cash outflows from operating and investing activities. As of
March 31, 2000 and December 31, 1999, we had accumulated deficits of
approximately $45,518,000 and $ 27,180,000, respectively. We intend to continue
to increase our operating expenses and capital expenditures in an effort to
rapidly expand our network infrastructure and service areas. We expect to incur
substantial operating losses, net losses and net operating cash outflows during
our network build-out and during the initial penetration of each new market we
enter. Our losses and net operating cash outflows are expected to continue and
to increase as we expand our operations.
RESULTS OF OPERATIONS
REVENUE. Revenue increased to approximately $1,737,000 for the three months
ended March 31, 2000 from approximately $48,000 for the three months ended March
31, 1999. This increase was primarily attributable to the increased number of
customers subscribing for our services, resulting from our increased sales and
marketing efforts and the expansion of our network. We expect revenue to
increase in future periods as we expand our network within our existing regions,
deploy our network into new regions and increase our sales and marketing efforts
in all of our regions.
NETWORK AND OPERATIONS. Network and operations expenses increased to
approximately $11,368,000 for the three months ended March 31, 2000 from
approximately $264,000 for the three months ended March 31, 1999. Included in
network and operations expense for the quarter ended March 31, 2000 is
approximately $420,000 of contracted customer premise wiring costs and
approximately $235,000 of other up front customer promotional costs. The
significant increase in total network and operations expenses was primarily
attributable to the expansion of our network, increased number of customers
subscribing for our services and increased costs resulting from the addition of
personnel. We expect network and operations costs to increase significantly in
future periods as we continue to expand our network and customer base.
Depreciation and amortization expense was approximately $2,456,000 and
$48,000 for the three months ended March 31, 2000 and 1999, respectively. This
expense increased as more of our network became operational and as we increased
capital expenditures to expand.
SALES AND MARKETING. Sales and marketing expenses were approximately
$4,988,000 and $129,000 for the three months ended March 31, 2000 and 1999,
respectively. Included in sales and marketing expense for the quarter ended
March 31, 2000 is approximately $1,704,000 of advertising and other marketing
programs. The significant increase in total sales and marketing expense was
principally attributable to an increase in marketing and promotional activities
and increases in sales and marketing personnel. Sales and marketing expenses are
expected to increase significantly as we continue to expand our business into
new markets.
GENERAL AND ADMINISTRATIVE. General and administrative expenses were
approximately $3,704,000 and $525,000 for the three months ended March 31, 2000
and 1999, respectively. The increase in general and administrative expenses was
principally the result of increases in the number of employees and the
development of our operating infrastructure.
STOCK COMPENSATION. We incurred stock compensation expenses of approximately
$1,528,000 and $822,000 for the three months ended March 31, 2000 and 1999,
respectively. These expenses consisted of charges and amortization related to
stock options and restricted stock granted to our employees, directors and
advisors.
7
<PAGE>
INTEREST INCOME NET. Net interest income for the three months ended March
31, 2000 was approximately $1,521,000 as compared to approximately $6,000 for
the three months ended March 31, 1999. This increase was primarily due to an
increase in our cash balances as a result of the issuance of preferred stock and
our public offerings in 1999 and 2000.
NET LOSS. Net loss was approximately $18,338,000 and $1,687,000 for the
three months ended March 31, 2000 and 1999, respectively.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our capital expenditures and operations primarily with the
proceeds from stock issuances and borrowings. We had cash, cash equivalents and
marketable securities of approximately $185,650,000 as of March 31, 2000. Our
working capital as of March 31, 2000 was approximately $170,606,000.
Net cash provided by financing activities for the three months ended March
31, 2000 was approximately $142,710,000. This cash primarily resulted from the
sale of our common stock. During March, 2000, we completed a public offering of
5,750,000 shares of our common stock, resulting in proceeds to the Company of
approximately $141,573,000, net of underwriting discounts and commissions and
estimated offering expenses payable by the Company. We have used, and intend to
continue using, the proceeds from our financing activities primarily to
implement our business plan and for working capital.
In March 1999, we entered into a 36-month lease facility to finance the
purchase of up to an aggregate of $2,000,000 of equipment. At March 31, 2000,
approximately $839,000 was outstanding under this lease facility. Amounts
financed under this lease facility bear an interest rate of 8% or 9%, depending
on the type of equipment, and are secured by the financed equipment.
In addition, approximately $2,649,000 was outstanding at March 31, 2000
under a $5,000,000 bank line of credit, which can be used to finance qualified
equipment purchases. Amounts borrowed under this line of credit generally bear
interest at the sum of 1% plus the higher of the bank's prime rate of interest
and the federal funds rate plus 0.5%. As of March 31, 2000, amounts outstanding
under this line of credit bore interest at the annual rate of 10.0% and are
secured by a lien on certain of our equipment. Borrowings under the line of
credit are restricted based on the value of the equipment securing the line of
credit. In addition, the line of credit also contains certain covenants,
including covenants requiring us to maintain certain financial ratios and
limitations relating to, among other things, new indebtedness, the creation of
liens, types of investments, mergers, consolidations and the transfer of all or
substantially all of our assets. The line of credit expires in May 2000, at
which time amounts outstanding convert to a 36-month term loan.
In February 1999, we leased office space and subsequently have leased
additional space in New Haven, Connecticut. Annual minimum lease payments under
these leases are approximately $1,125,000 for each of the years 2000 through
2002, and approximately $900,000, $745,000 and $279,000 for 2003, 2004 and 2005,
respectively.
For the three months ended March 31, 2000, the net cash used in our
operating activities was approximately $13,313,000. This cash was used for a
variety of operating expenses, including salaries, consulting and legal
expenses, network operations, marketing and promotional activities and overhead
expenses. Our net operating cash outflows are expected to continue and to
increase as we expand our operations.
Net cash used in investing activities for the three months ended March 31,
2000 was approximately $18,251,000. Approximately $23,199,000 was used for the
purchase of equipment and payment of collocation costs, which was offset by
proceeds from the sale of marketable securities of approximately $4,948,000.
The development and expansion of our business requires significant capital
expenditures. The principal capital expenditures incurred to enter each market
include the procurement, design and construction of the space in traditional
telephone companies' central offices where we deploy our equipment, and the
purchase and installation of all necessary equipment. Capital expenditures,
including collocation fees, were approximately $23,199,000 for the three months
ended March 31, 2000. We currently anticipate spending an aggregate of
approximately $50 million for capital expenditures for the balance of 2000. The
planned capital expenditures are primarily for the procurement, design and
construction of central office spaces and the purchase and installation of the
equipment necessary for us to provide our services, as well as for the continued
development of our information and management systems, including our operations
support systems. The actual amounts and timing of our capital expenditures will
8
<PAGE>
vary depending on the speed at which we are able to expand and implement our
network and could differ materially both in amount and timing from our current
plans.
We believe that our existing cash and short-term investments, amounts
available under our equipment lease and credit facilities and cash generated
from operations, will be sufficient to fund our operating losses, capital
expenditures, lease payments and working capital requirements into the second
half of 2001. We intend to use these cash resources to continue building our
network and for working capital and other general corporate purposes. We may
also use a portion of these cash resources to acquire complementary businesses.
The amounts actually expended for these purposes will vary significantly
depending on a number of factors, including revenue growth, if any, planned
capital expenditures, and the extent and timing of our entry into target
markets.
We expect our operating losses, net operating cash outflows and capital
expenditures to increase as we expand our network. We expect that additional
financing will be required in the future. We may attempt to raise financing
through some combination of commercial bank borrowings, leasing, vendor
financing and the sale of equity or debt securities.
Our capital requirements may vary based upon the timing and the success of
implementation of our business plan and as a result of regulatory, technological
and competitive developments or if:
o demand for our services or our cash flow from operations is less than
or more than expected;
o our development plans or projections change or prove to be inaccurate;
o we make acquisitions; or
o we accelerate deployment of our network or otherwise alter the
schedule or targets of our business plan implementation.
We cannot assure you that we will be able to raise sufficient debt or equity
capital on terms that we consider acceptable, if at all. If we are unable to
obtain adequate funds on acceptable terms, our ability to deploy and operate our
network, fund our expansion or respond to competitive pressures would be
significantly impaired.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In December 1999, the staff of the Securities and Exchange Commission issued
its Staff Accounting Bulletin ("SAB ") No. 101, REVENUE RECOGNITION. SAB No. 101
provides guidance on the measurement and timing of revenue recognition in
financial statements of public companies. Changes in accounting policies to
apply the guidance of SAB No. 101, as amended by SAB No. 101A, must be adopted
by recording the cumulative effect of the change in the fiscal quarter ending
June 30, 2000. Management has not yet determined the effect SAB No. 101 will
have, if any, on its accounting policies or the amount of the cumulative effect
to be recorded from adopting SAB No. 101. If we are required to modify our
current method of revenue recognition in order to be in compliance with SAB
No.101 and/or adopt any other new accounting pronouncements, we may report lower
revenue and costs or the deferral of revenue and costs to be recognized over
future periods.
FORWARD LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The statements contained in this
report, which are not historical facts, may be deemed to contain forward-looking
statements. These statements relate to future events or our future financial
performance, and are identified by terminology such as "may," "might," "will,"
"should," "expect," "scheduled," "plan," "intend," "anticipate," "believe,"
"estimate," "potential," or "continue" or the negative of such terms or other
comparable terminology. These statements are subject to a variety of risks and
uncertainties, many of which are beyond our control, which could cause actual
results to differ materially from those contemplated in these forward-looking
statements. In particular, the risks and uncertainties include those described
under "Risk Factors" in our Annual Report on Form 10-K for the year ended
December 31, 1999, which has been filed with the Securities and Exchange
9
<PAGE>
Commission. The risks and uncertainties include, among other things, (i) our
limited operating history, which makes it difficult to evaluate our business and
prospects; (ii) the difficulty of predicting the new and rapidly evolving
high-speed data communications industry; (iii) our history of, and expectation
of additional, losses and negative operating cash flow; (iv) our unproven
business model, which may not be successful; (v) our failure to achieve or
sustain market acceptance at desired pricing levels, which could impair our
ability to achieve profitability or positive cash flow; (vi) our ability to
negotiate, enter into and renew interconnection and collocation agreements with
traditional local telephone companies; (vii) the possibility of disappointing
quarterly revenue or operating results, which could cause the price of our
common stock to fall; (viii) the intense competition in the high-speed data
communications industry, which may negatively affect the number of our customers
and the pricing of our services; (ix) regulatory, legislative and judicial
developments, which could adversely affect the way we operate our business; (x)
our reliance on outside vendors and service providers, including the traditional
local telephone companies; and (xi) our ability to recruit and retain qualified
personnel and to manage the growth of our network and our operations. Existing
and prospective investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. We undertake
no obligation to update or revise the information contained in this report,
whether as a result of new information, future events or circumstances or
otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have no derivative financial instruments in our cash and cash
equivalents. We invest our cash and cash equivalents in investment-grade, highly
liquid investments, consisting of commercial paper, bank certificates of deposit
and corporate bonds.
Our exposure to market risk for changes in interest rates relates primarily
to borrowings under our bank line of credit. These borrowings bear interest at
variable rates and the fair value of this indebtedness is not significantly
affected by changes in market interest rates. An effective increase or decrease
of 10% in the current effective interest rates under the credit facility would
not have a material effect on our results of operations or cash flow.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
We sold 7,200,000 shares of our common stock in our initial public offering,
pursuant to our final prospectus dated October 6, 1999. This prospectus was
contained in our Registration Statement on Form S-1 (SEC File No. 333-80141),
which was declared effective by the Securities and Exchange Commission on
October 5, 1999. All of the shares of common stock covered by the Registration
Statement were sold. The initial public offering closed on October 12, 1999 and
the sale of 1,026,000 additional shares pursuant to the exercise of the
overallotment option granted to the underwriters closed on November 8, 1999. Net
proceeds to DSL.net, excluding the exercise of the overallotment option and
after deduction of underwriting discounts and commissions and offering expenses
payable by DSL.net, approximated $48.5 million and net proceeds from the
exercise of the overallotment option, after deduction of underwriting discounts
and commissions and offering expenses payable by DSL.net, approximated $7.2
million. The aggregate amount of expenses incurred by DSL.net through March 31,
2000 in connection with the issuance and distribution of the shares of common
stock offered and sold in the initial public offering, including the exercise of
the overallotment option, was approximately $5.9 million, including $4.1 million
in underwriting discounts and commissions, and $1.8 million in other expenses.
None of the expenses paid by DSL.net in connection with the initial public
offering or the exercise of the overallotment option were paid, directly or
indirectly, to directors, officers, persons owning ten percent or more of
DSL.net's equity securities, or affiliates of DSL.net. As of March 31, 2000, we
have used approximately $9.8 million of the net proceeds from our initial public
offering for working capital purposes and approximately $16.2 million for the
build out of our network and other capital expenditures. The balance of the net
proceeds from the initial public offering, including the underwriters' exercise
of the overallotment option, has been invested primarily in marketable,
investment-grade securities.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT
-------
NO. EXHIBIT
--- -------
11.01 Statement of Computation of Basic and Diluted Net Loss Per
Share
27.01 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K/A on February
8, 2000 which included financial statements and pro forma
financial statements of Tycho Networks, Inc. which were
omitted from a Current Report of Form 8-K filed on December
15, 1999.
11
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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.
DSL.NET, INC.
By: /s/ ROBERT Q. BERLIN
-----------------------
Robert Q. Berlin
Vice President, Strategic Planning and
Chief Financial Officer
Date: May 12, 2000
12
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Exhibit Index
EXHIBIT
-------
NO. EXHIBIT
--- -------
11.01 Statement of Computation of Basic and Diluted Net Loss Per
Share
27.01 Financial Data Schedule
13
EXHIBIT 11.01
-------------
DSL.NET, INC.
Statement re: Computation of Basic and Diluted Net Loss Per Share
(Unaudited)
THREE MONTHS ENDED
MARCH 31,
1999 2000
------------ ------------
Net loss $ (1,686,614) $(18,338,283)
============ ============
Basic and diluted:
Weighted average shares of common stock
outstanding 16,800,647 60,296,481
Less: Weighted average shares subject to
repurchase (13,518,007) (4,602,030)
------------ ------------
Weighted average shares used in computing
basic and diluted net loss per share 3,282,640 55,694,451
============ ============
Basic and diluted net loss per share $ (0.51) $ (0.33)
============ ============
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DSL.NET,
INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 177324520
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