Form 10-Q
--------------
U.S. Securities and Exchange Commission
Washington, D.C. 20549
---------------
(MARK ONE)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 2000
---------------
[ ] 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: 000-26881
---------------
NETNATION COMMUNICATIONS, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 33-08034 38
(State or other jurisdiction (I.R.S. Employer I.D. No.)
of incorporation or organization)
1410 - 555 WEST HASTINGS STREET
VANCOUVER, BRITISH COLUMBIA, CANADA, V6B 4N6
(Address of principal executive offices)
(Zip Code)
604/688-8946
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports 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 [ ]
The number of shares of the registrant's Common Stock outstanding as of May 15,
2000 was 15,407,000.
<PAGE>
Page 2
NETNATION COMMUNICATIONS, INC.
FORM 10-Q
MARCH 31, 2000
INDEX
PAGE
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Interim Consolidated Balance Sheets--March 31, 2000 (unaudited)
and December 31, 1999 (audited) 3
Interim Consolidated Statements of Operations and Deficit--Three-Month
Periods Ended March 31, 2000 (unaudited) and 1999 (unaudited) 4
Interim Consolidated Statement of Stockholders' Equity--Three-Month
Period Ended March 31, 2000 (unaudited) 5
Interim Consolidated Statements of Cash Flows--Three-Month Periods
Ended March 31, 2000 (unaudited) and 1999 (unaudited) 6
Notes to Interim Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal proceedings 11
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
<PAGE>
Page 3
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NETNATION COMMUNICATIONS, INC.
Interim Consolidated Balance Sheets
(Expressed in U.S. dollars)
March 31, December 31,
2000 1999
---- ----
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $3,172,595 $ 988,077
Accounts receivable 37,347 10,961
Prepaid expenses and deposits 141,706 63,208
Prepaid domain name registration fees 243,206 -
--------- ---------
3,594,854 1,062,246
Prepaid domain name registration fees,
non current portion 59,465 -
Fixed assets, net of accumulated depreciation
of $176,686 (1999 - $134,885) 949,580 455,919
--------- ---------
$4,603,899 $1,518,165
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 454,576 $ 189,146
Deferred revenue 778,750 400,007
Customer deposits 92,094 -
Debentures payable - 1,100,000
--------- ---------
1,325,420 1,689,153
Deferred revenue, non current portion 65,300 -
Stockholders' equity (deficit):
Common stock
Authorized:
50,000,000 common shares with a par value
of $0.0001 each
Issued:
15,407,000 (December 31, 1999 - 14,607,000)
common shares 1,541 1,461
Additional paid-in capital 5,787,810 2,339,471
Deferred compensation (920,633) (1,015,466)
Deficit (1,670,140) (1,511,055)
Accumulated other comprehensive income 14,601 14,601
--------- ---------
3,213,179 (170,988)
--------- ---------
$4,603,899 $1,518,165
========= =========
See accompanying notes to interim consolidated financial statements.
<PAGE>
Page 4
NETNATION COMMUNICATIONS, INC.
Interim Consolidated Statements of Operations and Deficit
(Expressed in U.S. dollars)
Three month Three month
period ended period ended
March 31, March 31,
2000 1999
----------- ------------
(unaudited) (unaudited)
Revenues $ 1,414,732 $ 425,891
Operating costs and expenses
Cost of revenues 400,692 119,456
Sales and marketing 682,960 194,439
Office and administrative 421,312 107,074
Depreciation and amortization 55,460 3,355
--------- ---------
1,560,424 424,324
--------- ---------
Earnings (loss) from operations (145,692) 1,567
Other expenses, net (13,393) (2,476)
--------- ---------
Loss for the period (159,085) (909)
Deficit, start of period (1,511,055) (156,568)
--------- ---------
Deficit, end of period $(1,670,140) $ (157,477)
========== =========
Loss per share, basic and fully diluted $ (0.01) $ -
========== =========
Weighted average number of common shares
outstanding, basic and fully diluted 14,984,472 9,500,000
See accompanying notes to interim consolidated financial statements.
<PAGE>
Page 5
NETNATION COMMUNICATIONS, INC.
Interim Consolidated Statement of Stockholders' Equity
(Expressed in U.S. Dollars)
Three month period ended March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Additional Other
Common Stock Paid-In Deferred Comprehensive Deficit Total
------------------
Shares Amount Capital Compensation Income
--------- -------- ------- ------------ ------------ ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1999 14,607,000 $ 1,461 $2,339,471 $(1,015,466) $ 14,601 $(1,511,055) $ (170,988)
Conversion of
debentures to
common stock 550,000 55 1,099,945 - - - 1,100,000
Proceeds from
sale of common
stock, net of
offering costs 250,000 25 2,348,394 - - - 2,348,419
Amortization of
deferred
compensation - - - 94,833 - - 94,833
Net loss - - - - - (159,085) (159,085)
---------- ------ --------- ---------- -------- ---------- ----------
Balance at
March 31, 2000 15,407,000 $ 1,541 $5,787,810 $ (920,633) $ 14,601 $(1,670,140) $ 3,213,179
========== ====== ========= ========== ======== ========== ==========
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE>
Page 6
NETNATION COMMUNICATIONS, INC.
Interim Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
Three month Three month
period ended period ended
March 31, March 31,
2000 1999
------------ ------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net loss $ (159,085) $ (909)
Items not involving cash:
Depreciation and amortization 55,460 3,355
Amortization of deferred compensation 94,833 -
Change in operating assets and liabilities:
Accounts receivable (26,386) 4,461
Prepaid expenses and deposits (78,498) (175)
Prepaid domain name registration fees (302,671) -
Accounts payable and accrued liabilities 265,430 61,842
Deferred revenue 444,043 14,489
Customer deposits 92,094 -
-------- ---------
Net cash provided by operating activities 385,220 83,063
-------- ---------
Cash flows from investing activities:
Purchase of fixed assets (549,121) (47,852)
-------- ---------
Net cash used in investing activities (549,121) (47,852)
-------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock,
net of offering costs 2,348,419 5,482
Stock redemption premium paid - (22,974)
Payable to stockholders - 7,125
-------- ---------
Net cash provided by (used in) financing
activities 2,348,419 (10,367)
-------- ---------
Net increase in cash and cash equivalents 2,184,518 24,844
Cash and cash equivalents, beginning of period 988,077 45,938
-------- ---------
Cash and cash equivalents, end of period $3,172,595 $ 70,782
========= =========
Supplemental disclosure:
Non-cash transaction
Conversion of debentures into common stock $1,100,000 $ -
Cash paid for
Interest $ 142 $ 1,958
See accompanying notes to interim consolidated financial statements.
<PAGE>
Page 7
NETNATION COMMUNICATIONS, INC.
Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)
Three month periods ended March 31, 2000 and 1999
(Unaudited)
GENERAL:
NetNation Communications, Inc. (the "Company") was incorporated on May 7, 1998
under the laws of the State of Delaware as Collectibles Entertainment Inc.
("Collectibles").
On April 7, 1999, Collectibles acquired all of the outstanding common shares of
NetNation Communications Inc. ("the Canadian Subsidiary"). As Collectibles was
inactive at the time of the transaction, this issuance has been accounted for as
a capitalization of the Canadian Subsidiary, effectively as if the Canadian
Subsidiary issued common shares to acquire the net monetary assets of
Collectibles. As such, the statements of operations and deficit and cash flows
reflect the results for the Canadian Subsidiary from incorporation on February
19, 1997 to April 7, 1999. From April 7, 1999, the results of the Canadian
Subsidiary are included on a consolidated basis with those of Collectibles.
Subsequent to the transaction, Collectibles changed its name to NetNation
Communications, Inc.
The Company's principal business activities are the provision of web-site
hosting, domain name registration, and related services to small and medium
sized businesses.
1. BASIS OF PRESENTATION
These interim consolidated financial statements have been prepared using
generally accepted accounting principles in the United States. The interim
financial statements include all adjustments, consisting solely of normal
recurring adjustments, which in management's opinion are necessary for fair
presentation of the financial results for interim periods. The financial
statements have been prepared consistent with the accounting policies described
in the Company's annual audited financial statements. Certain comparative
figures have been reclassified to conform to the presentation adopted in the
current period.
These consolidated financial statements include the accounts of NetNation
Communications, Inc. and its wholly-owned subsidiaries, the Canadian Subsidiary,
NetNation Communications (UK) Inc., NetNation Communications (USA) Inc., and
DomainPeople Inc. All significant intercompany accounts and transactions have
been eliminated.
2. SIGNIFICANT ACCOUNTING POLICIES:
(a) Revenue recognition:
Revenue is recognized as web-site hosting, domain name registration and
related services are provided. Amounts billed in advance of the provision of
services are deferred and recorded as revenue on a straight-line basis over
the term of service or registration.
(b) Prepaid domain name registration fees:
Prepaid domain name registration fees represents the amounts paid to the
registry for generic top level domains for updating and maintaining the
registry. Domain name registration fees paid are deferred and charged to
income on a straight-line basis over the registration term, which can range
from 1 to 10 years.
<PAGE>
Page 8
NETNATION COMMUNICATIONS, INC.
Notes to Consolidated Financial Statements
(Expressed in U.S. dollars)
Three month periods ended March 31, 2000 and 1999
(Unaudited)
3. COMMITMENTS:
In March 2000, the Company entered into a seven year lease for a data center
facility in San Diego as part of its expansion plans. The Company is committed
to total operating lease payments for all of its facilities in 2000, 2001, 2002,
2003 and thereafter of approximately $330,000, $434,000, $317,000, $258,000 and
$960,000, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OVERVIEW
Our company was incorporated under the laws of the State of Delaware on May 7,
1998, under the name Collectibles Entertainment Inc. ("Collectibles") for the
purpose of operating an online sports card and other tradeable memorabilia
distribution business. We entered into the Web hosting business through the
acquisition of NetNation Communications Inc. ("the Canadian Subsidiary"). The
Canadian Subsidiary was a private company incorporated under the laws of the
Province of British Columbia, Canada on February 19, 1997. The Canadian
Subsidiary became a wholly owned subsidiary on April 7, 1999 pursuant to an
agreement between the shareholders of the Canadian Subsidiary and Collectibles
(the "Share Purchase Agreement"). Pursuant to the Share Purchase Agreement,
Collectibles acquired 9,000,000 Class A common shares and 1,000,000 Class B
preferred shares of the Canadian Subsidiary, being all of the issued and
outstanding shares of the Canadian Subsidiary. The purchase price for the
shares of the Canadian Subsidiary was $1,000,000 in Canadian currency, which was
paid by the issuance of 10,000,000 common shares of Collectibles. On April 14,
1999, Collectibles changed its name to NetNation Communications, Inc.
We currently have four wholly-owned subsidiaries: NetNation Communications (USA)
Inc., the Canadian Subsidiary, NetNation Communications (UK) Inc., and
DomainPeople Inc.
We are an internet infrastructure solutions provider focused on meeting the
needs of small and medium-sized enterprises ("SMEs") and individuals who are
establishing a commercial or informational presence on the Internet. We compete
in the shared and dedicated web hosting, server co-location and domain name
registration markets. Our products and services are sold worldwide, directly to
customers and through VARs (Value Added Resellers).
In May 1999, we were selected as an official registrar of domain names by ICANN.
The accreditation allowed us to register top-level domain names ("TLD's") ending
in .com, .net and .org, which account for between 50% - 75% of the world's
Internet addresses. We became operational as a domain name registrar late in
December of 1999.
RESULTS OF OPERATIONS
Revenue
Historically, the majority of our revenues have been derived from the provision
of web hosting services. Our web hosting customers normally pay a set-up fee
plus regular charges, either monthly, quarterly or annually, thereafter. We
offer a variety of hosting packages in addition to a number of value-added
services and products. This enables customers to easily select and modify a
solution that precisely meets their individual requirements.
Our accreditation as an official registrar of domain names has enabled us to
register domain names without the involvement of an intermediary. As an
accredited registrar, we have assumed responsibility for ensuring that we supply
current information obtained from our customers to the central registry.
<PAGE>
Page 9
Amounts billed in advance of the provision of domain name registration services
are deferred and recorded as revenue on a straight-line basis over the term of
registration. The unrecognized portion of the fees have been recorded as
deferred revenue.
Domain name registration fees vary depending upon the term of the registration.
We have experienced an average initial term of domain name registration of
approximately 1.6 years.
The following table compares the composition of revenues for the three months
ended March 31, 2000 to the three months ended March 31, 1999:
Revenues Three months ended March 31,
----------------------------
2000 1999
----------------------------
Shared hosting 68% 88%
Domain name registration 24% 9%
Dedicated hosting 3% 0%
Server co-location 5% 3%
----------------------------
Total revenue 100% 100%
----------------------------
The majority of our revenues for the three months ended March 31, 2000 were
generated from the provision of shared web hosting and domain name registration
services to SMEs. Due to the method of revenue recognition for domain name
registration, only a portion of the amount charged was recognized as revenue in
the current quarter. The current portion of deferred revenue on the balance
sheet as at March 31, 2000 includes $410,603 of domain name registration
revenue. The non-current portion of deferred revenue on the balance sheet as
at March 31, 2000 relates entirely to domain name registration revenue.
Revenues from dedicated and co-located hosting increased as a percentage of
revenue for the three months ended March 31, 2000. These services have
historically been relatively minor contributors. We have, however, experienced
stronger demand for them during the three months ended March 31, 2000.
Total revenue increased 232% from $425,891 for the three months ended March 31,
1999 to $1,414,732 for the three months ended March 31, 2000. The number of
sites hosted increased 141%, from approximately 5,400 as at March 31, 1999 to
over 13,000 as at March 31, 2000. Our partnership arrangements and reseller
network, coupled with a targeted sales and marketing effort will continue to
enhance our growth in the future. We also intend to grow our revenues through
the acquisition of high-quality, strategically important web hosting providers.
Cost of revenues
Cost of revenues includes the cost of bandwidth, domain name registration fees
paid to the central registry, salaries directly related to the provision of
hosting and domain name registration services, and other related costs. Domain
name registration fees paid to the central registry are recognized as an expense
over the term of registration.
Cost of revenues increased 235% from $119,456 for the three months ended March
31, 1999 to $400,692 for the three months ended March 31, 2000. This growth
parallels the increase in revenues for the three months ended March 31, 2000
compared to the three months ended March 31,1999. It also reflects the
additional investment in equipment and staff that we have made during recent
quarters.
Sales and marketing expense
Sales and marketing expense consists mainly of salaries, bonuses, commissions
and advertising costs. Our advertising is focused in media types that we
believe best engage the attention of our target market, SMEs.
Sales and marketing expense increased 251% from $194,439 for the three months
ended March 31, 1999 to $682,960 for the three months ended March 31, 2000.
Advertising expenditures are a significant driver of our web hosting and domain
name registration businesses. The increase in the level of expenditures in this
area during the three months ended March 31, 2000 compared to the three months
ended March 31, 1999 is in line with our plans to continue growing our customer
<PAGE>
Page 10
base. With new product offerings coming online in 2000, we are actively
pursuing additional avenues to reach our target market. This may include
strategic acquisitions and partnerships.
Office and administrative expense
Office and administrative expense includes rent and general office costs as well
as the cost of professional advisors, media relations and investor relations.
Office and administrative expense increased 293% from $107,074 for the three
months ended March 31, 1999 to $421,312 for the three months ended March 31,
2000. The increase was due mainly to the additional costs of professional
advisors, media relations and investor relations that are normally associated
with public companies. There were no comparable costs for the three months
ended March 31, 1999.
Expenditures on office and administrative items will continue to increase in
dollar amounts but are expected to decrease as a percentage of total revenue as
revenue growth outpaces the increase in administrative costs.
Depreciation and amortization
Depreciation and amortization increased 1,533% from $3,355 for the three months
ended March 31, 1999 to $55,460 for the three months ended March 31, 2000. This
increase is related to greater expenditures on data center and computer
equipment during the three months ended March 31, 2000.
LIQUIDITY AND CAPITAL RESOURCES
Our business strategy includes the raising of additional capital during 2000
which will be used to make strategic acquisitions, build or expand data centers,
fund marketing campaigns and provide working capital. Our financing strategy
calls for the minimization of debt financing in favor of equity financing
whenever feasible. We may use a combination of both private and public equity
investment in the future.
We were able to raise the capital required for the growth in revenues during
early 1999 through private investment. On April 12, 1999, after the acquisition
of the Canadian Subsidiary, we raised $1,100,000 through the sale of two Series
A Convertible Debentures and on February 18, 2000 the debentures were converted
into 550,000 shares of common stock at the direction of the debenture holders.
Also during 1999, we raised $900,000 through a private placement of 450,000
shares of common stock at $2.00 per share.
On March 3, 2000, we completed a private placement of 250,000 units at $10 per
share for gross proceeds of $2,500,000. Each unit included warrants entitling
the investors to purchase one additional share for every two shares they already
own. The warrants are exercisable during a two-year period at $12 per
additional share purchased. We may require the exercise of the warrants during
this time period if certain financial conditions are met, in which case we will
receive an additional $1,500,000 and will issue a further 125,000 shares of
common stock.
During the three months ended March 31, 2000, our operating activities provided
net cash of $385,220 compared to net cash provided by operating activities of
$83,063 for the three month period ended March 31, 1999. The main drivers were
the increase in deferred revenue related to domain name registration and web
hosting services and the increase in trade accounts payable. These factors were
partially offset by the increase in prepaid domain name registration fees.
Significant fixed asset purchases during the three months ended March 31, 2000
increased the net cash used in investing activities to $549,121 compared to
$47,852 for the three months ended March 31, 1999. The higher level of
expenditures related mainly to the upgrading of our Vancouver data center to
enable it to scale to anticipated demand. Similar costs may be incurred in the
future for building or expanding additional data centers.
<PAGE>
Page 11
Net cash provided by financing activities was $2,348,419 for the three months
ended March 31, 2000 compared to net cash used in financing activities of
$10,367 for the three months ended March 31, 1999. The increase reflects the
proceeds we raised through the private placement which occurred during the three
months ended March 31, 2000. No comparable activity occurred during the three
month period ended March 31, 1999 as we were in the process of acquiring the
Canadian Subsidiary, which was completed in April 1999.
As at March 31, 2000, we have cash and cash equivalents on hand of $3,172,595
compared to $70,782 as at March 31, 1999. The significant increase reflects the
financing activities undertaken and the positive cash flows from operations
during the three months ended March 31,2000. The funds on hand as at March 31,
2000 will be used to make strategic acquisitions, build or expand data centers,
fund marketing campaigns and provide working capital. We will continue to seek
additional equity financing when required provided that the equity market
conditions are acceptable.
FORWARD-LOOKING STATEMENTS
The statements included in the discussion and analysis above that are not
historical or factual are "forward-looking statements" (as such term is defined
in the Private Securities Litigation Reform Act of 1995). The safe harbor
provisions provided in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, apply to
forward-looking statements made by the Company. These statements can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "may," "intends, " "will," "should," or "anticipates" or the negative
thereof or other variations thereon or comparable terminology, or by discussions
of strategy that involve risks and uncertainties. Management cautions the
reader that these forward-looking statements addressing the timing, costs and
scope of expansion of operations or investments and other matters contained
herein or therein from time to time regarding matters that are not historical
facts, are only predictions. No assurance can be given that future results
indicated, whether expressed or implied, will be achieved. These
forward-looking statements are based upon a variety of assumptions relating to
the business of the Company, which may or may not be realized. Because of the
number and range of the assumptions underlying Company's forward-looking
statements, many of which are subject to significant uncertainties and
contingencies that are beyond the reasonable control of the Company, some of the
assumptions will not materialize and unanticipated events and circumstances may
occur subsequent to the date of this report. These forward-looking statements
are based on current expectations, and the Company assumes no obligation to
update this information. Therefore, the actual experience of the Company and
results achieved during the period covered by any particular forward-looking
statements may differ substantially from those projected. Consequently, the
inclusion of forward-looking statements are not and should not be regarded as a
representation by the Company, or any other person, that these statements will
be realized. The actual results may vary materially. There can be no assurance
that any of these expectations will be realized or that any of the
forward-looking statements contained in this report will prove to be accurate.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No significant changes in the quantitative and qualitative disclosures about
market risk have occurred from the discussion contained in our report on Form
10-K/A for the year ended December 31, 1999, which was filed with the Commission
on April 26, 2000.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
<PAGE>
Page 12
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On March 3, 2000, the Company finalized an agreement to issue 250,000 units at
$10 per unit to a group of investors including a leading Swiss investment bank.
Each unit consisted of one common share and one-half of a share purchase
warrant. Each whole warrant entitles the holder to purchase one additional
common share at a price of $12 for a period of two years. Transaction fees and
expenses related to the sale were $151,831. The Company may require the exercise
of the warrants during this time period if certain financial conditions are met,
in which case the Company will receive an additional $1,500,000 and will issue a
further 125,000 shares of common stock. The certificates representing the
common shares forming part of the units and the common shares issued upon
exercise of the warrants will bear a legend in accordance with Rule 144
promulgated under the Securities Act of 1933 and may not be transferred or
resold except in accordance with Rule 144.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See attached exhibit 27
(b) Reports on Form 8-K
On April 14, 2000, the Company filed a Current Report on Form 8-K, dated March
3, 2000. The Current Report included as an exhibit a press release issued by
the Company announcing the issue of 250,000 units at $10 per unit to a group of
investors including a leading Swiss investment bank. Each unit consisted of one
common share and one-half of a share purchase warrant, exercisable at a price of
$12 for a period of two years.
On April 14, 2000, the Company filed a Current Report on Form 8-K, dated March
31, 2000. The Current Report included as an exhibit a press release issued by
the Company announcing that the Company had been approved for listing on the
NASDAQ SmallCap Market and would trade under the ticker symbol NNCI.
SIGNATURES
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.
NETNATION COMMUNICATIONS, INC.
Date: May 15, 2000 /s/ ASHLEY JAMES SINCLAIR
-----------------------------------------
Ashley James Sinclair
Chief Executive Officer
Date: May 15, 2000 /s/ GLEN IBBOTT
-----------------------------------------
Glen Ibbott
Chief Financial Officer
<PAGE>
Page 13
INDEX TO EXHIBIT
EXHIBIT
NUMBER DESCRIPTION
- ------------- -------------------
27 Financial Data Schedule
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,172,595
<SECURITIES> 0
<RECEIVABLES> 37,347
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,594,854
<PP&E> 1,126,266
<DEPRECIATION> 176,686
<TOTAL-ASSETS> 4,603,899
<CURRENT-LIABILITIES> 1,325,420
<BONDS> 0
0
0
<COMMON> 1,541
<OTHER-SE> 3,211,638
<TOTAL-LIABILITY-AND-EQUITY> 4,603,899
<SALES> 1,414,732
<TOTAL-REVENUES> 1,414,732
<CGS> 400,692
<TOTAL-COSTS> 1,560,424
<OTHER-EXPENSES> 13,251
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 142
<INCOME-PRETAX> (159,085)
<INCOME-TAX> 0
<INCOME-CONTINUING> (159,085)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (159,085)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
