<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR (15)d
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[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
[ ] 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 0-19578
INTERNET COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
COLORADO 84-1095516
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
7100 E. BELLEVIEW AVENUE, SUITE 201, GREENWOOD VILLAGE, COLORADO 80111
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 770-7600
- --------------------------------------------------------------------------------
(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. [X] Yes [ ] No
AT MAY 1, 2000, 5,895,959 SHARES OF COMMON STOCK, NO PAR VALUE, WERE
OUTSTANDING.
Page 1 of 13 pages.
<PAGE>
INTERNET COMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Form 10-Q Cover Page 1
Index Page 2
Part I FINANCIAL INFORMATION
Item 1- Financial Statements
Condensed Consolidated Balance Sheets at 3
March 31, 2000 and December 31, 1999
Condensed Consolidated Statements of Operations for the 4
Three months ended March 31, 2000 and March 31, 1999
Condensed Consolidated Statements of Cash Flows 5
for the Three months ended March 31, 2000 and March 31, 1999
Notes to Condensed Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial Condition 8
and Results of Operations
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 11
Part II OTHER INFORMATION
Item 1 - Legal Proceedings 12
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 12
Security Holders
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
Signature Page 13
</TABLE>
2
<PAGE>
INTERNET COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
ASSETS (unaudited)
Current assets:
Cash $ 279 459
Restricted cash -- 142
Trade receivables, net of allowance for doubtful
accounts and sales returns of $503 at
March 31, 2000 and $489 at December 31, 1999 3,475 3,143
Inventory 2,221 2,553
Prepaid expenses and other 260 310
Costs and estimated earnings in excess of billings 449 513
-------- -------
Total current assets 6,684 7,120
Equipment, net 946 1,069
Goodwill, net 746 765
Spares inventory 163 196
Net assets of discontinued operations -- 46
Other assets, net 275 334
-------- -------
Total assets $ 8,814 9,530
======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 56 2,244
Notes payable to a related party 3,500 --
Accounts payable 2,290 3,043
Accrued expenses 525 516
Billings in excess of costs and estimated earnings 518 565
Unearned income and deposits 663 812
-------- -------
Total current liabilities 7,552 7,180
-------- -------
Notes payable 14 29
Deferred revenue 111 142
-------- -------
Total liabilities 7,677 7,351
Stockholders' equity:
Preferred stock, 100,000,000 shares authorized
Series A Convertible Preferred Stock, issued and
outstanding 50,000 shares, stated value of $100.00 5,000 5,000
Series B Convertible Preferred Stock, issued and
outstanding 19,000 shares, stated value of $100.00 1,816 1,800
Common stock, no par value, 20,000,000 shares authorized,
5,801,643 and 5,787,097 shares issued and outstanding
at March 31, 2000 and December 31, 1999, respectively 15,409 15,390
Dividends Payable 268 145
Accumulated deficit (21,356) (20,156)
-------- -------
Total stockholders' equity 1,137 2,179
Commitments and contingencies
-------- -------
Total liabilities and stockholders' equity $ 8,814 9,530
======== =======
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
3
<PAGE>
INTERNET COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
For Three Months Ended
-----------------------------
March 31, March 31,
2000 1999
--------- ---------
(unaudited)
<S> <C> <C>
Sales:
Network Services $ 2,569 3,294
Network Integration 3,023 3,976
------- ------
Total Sales 5,592 7,270
Cost of Sales (4,496) (5,247)
------- ------
Gross Margin 1,096 2,023
------- ------
Operating expenses:
Selling 711 828
General and administrative 1,230 1,376
Merger expenses 136 --
------- ------
Total expenses 2,172 2,312
------- ------
Operating Loss (981) (181)
Interest expense, net 95 108
------- ------
Net Loss from continuing operations $(1,076) (289)
======= ======
Net Loss per share - basic and diluted:
Weighted average common shares outstanding 5,788 5,618
======= ======
Net Loss $ (0.21) (0.07)
======= ======
</TABLE>
See accompanying notes to these condensed consolidated financial statements
4
<PAGE>
INTERNET COMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For Three Months Ended
----------------------------
March 31, March 31,
2000 1999
--------- --------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss from continuing operations $ (1,076) (289)
Adjustments to reconcile net loss from continued operations
Depreciation and amortization 212 226
Allowance for doubtful accounts and sale returns 60 70
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables (392) (568)
Inventory 339 362
Prepaid expenses and other 64 (99)
Costs in excess of billings and estimated earnings 64 (119)
Increase (decrease) in:
Accounts payable and accrued expenses (753) 1,021
Unearned income and deferred revenue (180) 21
Other liabilities 8 61
Billings in excess of costs and estimated earnings (47) (760)
-------- ------
Net cash provided by (used in) operating activities (1,701) (74)
Net cash provided by (used in) discontinued operations 46 316
Cash flows from investing activities:
Capital expenditures (1) (6)
Proceeds from sales of assets 1 5
-------- ------
Net cash used in investing activities -- (1)
Cash flows from financing activities:
Proceeds from debt 9,633 1,740
Proceeds from debt from a related party 3,500 --
Repayment of debt (11,835) (3,637)
Repayment of note from a related party -- (1,300)
Subscription receivable from a related party -- 2,500
Proceeds from exercise of stock options 35 --
-------- ------
Net cash provided by financing activities 1,333 (697)
-------- ------
Increase (decrease) in cash: (322) (456)
Cash, beginning of period 601 664
-------- ------
Cash, end of period $ 279 208
======== ======
</TABLE>
See accompanying notes to these condensed consolidated financial statements.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
NOTE 1 -- BASIS OF PRESENTATION
The financial statements included herein have been prepared by Internet
Communications Corporation ("INCC" or the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission and include
all adjustments which are, in the opinion of management, necessary for a fair
presentation. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes that the disclosures are adequate to make the
information presented not misleading. However, it is suggested that these
financial statements be read in conjunction with the financial statements and
the notes thereto which are included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999. The financial data for the interim
periods may not necessarily be indicative of results to be expected for the
year.
On March 17, 2000, the Company executed a definitive Agreement and Plan of
Merger (the "Merger Agreement"). Pursuant to the Merger Agreement RMI.NET, Inc.
("RMI") will, through a merger (the "Merger") of a wholly owned subsidiary of
RMI with and into the Company, acquire all of the issued and outstanding stock
of the Company in exchange for RMI common stock, as well as warrants to purchase
shares of RMI common stock. However, Interwest Group, Inc. ("Interwest") (the
Company's largest shareholder) and the Company's directors will not receive the
warrants in exchange for their shares of Company common stock. The Company's
board of directors has approved the Merger and has recommended that the
shareholders approve the Merger. Consummation of the Merger remains subject to
shareholder approval and other customary conditions.
NOTE 2 - NOTES PAYABLE
As of December 31, 1998, there was $5,000,000 outstanding under the line of
credit. The Company paid down the amount outstanding by $650,000 on January 4,
1999, and by $850,000 on February 23, 1999. The line of credit bore interest at
prime plus 1% (9.50% at December 31, 1999). As of December 31, 1999, there was
$2,188,000 outstanding under the line of credit. The line of credit was
collateralized by accounts receivable and inventory of the Company and matured
on March 1, 2000. The line of credit was paid off and terminated on March 17,
2000.
On February 2, 2000, Interwest loaned $500,000 to the Company for general
working capital purposes. The loan bears interest at 12% and matures on
September 30, 2000.
In connection with the execution of the Merger Agreement with RMI, Interwest
loaned $3 million to the Company. The $3 million loan was used in part to repay
the Company's outstanding line of credit, which matured on March 1, 2000. The
loan bears interest at 12% and matures on September 30, 2000.
In March 1998, the Company received $1.6 million from a related party, in
exchange for a convertible promissory note due March 1999. The note bore
interest at 10% and interest payments were due quarterly. As of December 31,
1998, the balance on the note was $1,300,000. This amount was paid off on
February 24, 1999.
NOTE 3 - STOCKHOLDERS' EQUITY
The Company has authorized 100,000,000 shares of preferred stock, which may be
issued in series and with such preferences as determined by the Company's board
of directors. On December 30, 1998, the
6
<PAGE>
Company executed a stock purchase agreement with Interwest. Under the terms of
the agreement, the Company issued 50,000 shares of Series A, 7 1/8% convertible
preferred stock, convertible into Company common stock at $2.25 per share, in
exchange for $5.0 million. Of the proceeds, $2.5 million was placed in escrow
subject to shareholder approval as required by Nasdaq corporate governance
rules. On February 23, 1999, the Company received shareholder approval and the
escrow was released.
On August 12, 1999, the Company executed a stock purchase agreement with
Interwest. Under the terms of the agreement, the Company issued 19,000 shares of
Series B, 7 3/8% convertible preferred stock, convertible into Company common
stock at $2.9063 per share, and 100,000 warrants to purchase shares of Company
common stock (exercisable for four years at $2.9063) in exchange for $1,900,000.
For financial reporting purposes, the warrants were attributed a value of
$100,000. The proceeds were used for working capital. In addition, the agreement
provides a one year commitment for an additional sale of 5,000 shares of Series
B, 7 3/8% convertible preferred stock ($500,000) subject to the Company meeting
certain requirements. The Company has not and does not anticipate selling any
additional shares under the commitment. As of March 31, 2000, Interwest owned
approximately 50% of the outstanding shares of common stock of the Company and
approximately 67% on an as converted basis.
NOTE 4 - INCOME (LOSS) PER SHARE
Basic income (loss) per share is computed on the basis of weighted-average
common shares outstanding. Diluted loss per share considers potential common
stock in the calculation, and is the same as basic loss per share for the three
months ended March 31, 2000 and 1999 as all of the Company's potentially
dilutive securities were anti-dilutive during these periods. The loss per
share to common shareholders reflects the impact of the preferred stock
dividends of $124,000, which increased the loss per share.
NOTE 5 - LIQUIDITY
The Company has recorded operating losses of $981,000, $3,807,000 and $5,723,000
for the quarter ended March 31, 2000, and the years ended December 31, 1999 and
1998, respectively. Additionally, the Company generated negative cash flow from
operating activities of continuing operations of $1,701,000, $462,000 and
$4,826,000 for the quarter ended March 31, 2000, and the years ended December
31, 1999 and 1998, respectively.
Management of the Company believes that the results of operations combined with
available working capital resources will be sufficient to fund future
operations. In the event that additional funding is required, management will
explore fund raising alternatives, however no assurances can be made that the
necessary resources will be available.
NOTE 6 - IMPACT OF RECENTLY ISSUED ACCOUNTING PROUNOUNCEMENTS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS 133"), which is effective for all fiscal years
beginning after December 15, 2000. SFAS 133 establishes accounting and
reporting standards for derivative instruments and hedging activities by
requiring that all derivative instruments be reported as assets or
liabilities and measured at their fair values. Although management of the
Company has not completed its assessment of the impact of SFAS 133 on its
consolidated results of operations and financial position, management
estimates that the impact of SFAS 133 will not be material.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
On March 17, 2000, the Company executed a definitive Agreement and Plan of
Merger pursuant to which RMI.NET, Inc. ("RMI") will acquire all of the issued
and outstanding stock of the Company in exchange for RMI common stock, as well
as warrants to purchase shares of RMI common stock. However, Interwest and the
Company's directors will not receive the warrants in exchange for their shares
of Company common stock. The Company's board of directors has approved the
Merger and has recommended that the shareholders approve the Merger.
Consummation of the Merger remains subject to shareholder approval and other
customary conditions.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This quarterly report on Form 10-Q contains "forward-looking statements" within
the meaning of the federal securities laws. These forward-looking statements
include statements of expectations, beliefs, future plans and strategies,
anticipated events or trends and similar expressions concerning matters that are
not historical facts. The forward-looking statements in this Form 10-Q are
subject to risks and uncertainties that could cause actual results to differ
materially from those expressed in or implied by such statements.
With regard to the Company, the most important risks and uncertainties that
could effect future results include, but are not limited to, the following:
- Changing technology
- Competition
- Possible future government regulation
- Competition for talented employees
- Achieving funding for future operations
The following is management's discussion and analysis of certain significant
factors, which have affected the Company's financial condition and results of
operations during the periods included in the accompanying condensed financial
statements.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL RESOURCES
During 1999, the Company maintained outstanding balances under its Credit
Agreement with a commercial bank. As of December 31, 1998, there was $5,000,000
outstanding under the line of credit. The Company paid down the amount
outstanding by $650,000 on January 4, 1999, and by $850,000 on February 23,
1999. The line of credit bore interest at prime plus 1% (9.50% at December 31,
1999). As of December 31, 1999, there was $2,188,000 outstanding under the line
of credit. The line of credit was collateralized by accounts receivable and
inventory of the Company and matured on March 1, 2000. The line of credit was
paid off and terminated on March 17, 2000.
In connection with the execution of the Merger Agreement, Interwest loaned the
Company $3 million. The $3 million loan was used in part to repay INCC's
outstanding line of credit, which matured on March 1, 2000. The Merger Agreement
requires that, under certain circumstances, Interwest will be required to lend
up to an additional $600,000 to INCC prior to the closing of the Merger. In
addition to the loan discussed above, Interwest loaned $500,000 to INCC on
February 2, 2000. Under the terms of the
8
<PAGE>
Merger Agreement, the amounts loaned by Interwest to INCC will be converted into
common stock of INCC, at a price of $2.50 per share, immediately prior to
consummation of the Merger and thereafter will be exchanged for RMI common stock
on the same basis as the other shares of INCC common stock, except that
Interwest will not receive any warrants.
On August 12, 1999, the Company executed a stock purchase agreement with
Interwest. Under the terms of the agreement the Company issued 19,000 shares of
Series B, 7 3/8% convertible preferred stock, convertible into shares of Company
common stock at $2.9063 per share, and 100,000 warrants to purchase shares of
Company common stock (exercisable for four years at $2.9063) in exchange for
$1,900,000. The proceeds were used for working capital. In addition, the
agreement provides a one year commitment for an additional sale of 5,000 shares
of Series B, 7 3/8% convertible preferred stock ($500,000) subject to the
Company meeting certain requirements. The Company has not and does not
anticipate selling any additional shares under the commitment.
On December 30, 1998, the Company executed a stock purchase agreement with
Interwest. Under the terms of the agreement, the Company issued 50,000 shares of
Series A, 7 1/8% convertible preferred stock, convertible into shares of Company
common stock at $2.25 per share, in exchange for $5.0 million. On December 30,
1998, $2.5 million was funded to the Company, of which $650,000 was restricted
for payment on the Company's credit facility. Of the balance of the proceeds,
$300,000 was used to pay down a note from a related party, and $1,550,000 was
used for working capital. The remaining $2.5 million was funded to escrow
subject to shareholder approval as required by Nasdaq corporate governance
rules. On February 23, 1999, the Company received shareholder approval and the
escrow was released. The Company used $850,000 of the proceeds released from
escrow to pay down the Company's credit facility, $1,300,000 to pay the balance
of the note from the related party, and $350,000 for working capital purposes.
As a result of this equity investment, the Company reduced its debt by $3.1
million.
In March 1998, the Company received $1.6 million from a related party in
exchange for a convertible promissory note ("Note") due March 1999. The Note
bore interest at 10% and interest payments were due quarterly. At December 31,
1998, $1,300,000 was outstanding on this note. This note was paid in full on
February 23, 1999 upon release of the escrowed funds as mentioned above.
LIQUIDITY
During the quarter ended March 31, 2000, the Company's cash position decreased
by $322,000. This decrease was primarily due to operating losses offset by
increased borrowings. The Company's current ratio decreased from .99 at December
31, 1999 to .89 on March 31, 2000.
The Company borrowed $3,500,000 from a related party during the quarter ended
March 31, 2000. The borrowings were used to pay off the outstanding balance
on the matured line of credit and for working capital.
The Company's accounts receivable, net of allowance for doubtful accounts and
sales returns, was $3,475,000 as of March 31, 2000 as compared to $3,143,000 as
of December 31, 1999. This is due primarily to increased March sales for Network
Integration services offset by improved collections.
Accounts payable and accrued expenses were $2,815,000 as of March 31, 2000 as
compared to $3,559,000 as of December 31, 1999. Decreases in inventory levels
and use of the borrowings mentioned above accounted for the decline.
The Company made no significant investment in property, plant, or equipment
during the quarter ended March 31, 2000. There are no material commitments for
capital expenditures and the Company is
9
<PAGE>
maintaining tight controls over its capital purchases.
The Company has recorded operating losses of $981,000, $3,807,000 and $5,723,000
for the quarter ended March 31, 2000, and the years ended December 31, 1999 and
1998, respectively. Additionally, the Company generated negative cash flow from
operating activities of continuing operations of $1,701,000, $462,000 and
$4,826,000 for the quarter ended March 31, 2000, and the years ended December
31, 1999 and 1998, respectively.
Management of the Company believes that the results of operations combined with
available working capital resources will be sufficient to fund future
operations. In the event that additional funding is required, management will
explore fund raising alternatives, however no assurances can be made that the
necessary resources will be available.
RESULTS OF OPERATIONS
The Company recorded a loss from continuing operations of $1,076,000 on revenue
of $5,592,000 for the quarter ended March 31, 2000 as compared to a loss of
$289,000 on revenue of $7,270,000 for the quarter ended March 31, 1999. Included
in the loss for the quarter ended March 31, 2000 are expenses of $136,000
related to the announced merger with RMI.
REVENUE
The Company experienced a decrease in revenue each quarter during 1999, from
$7,270,000 for the quarter ended March 31, 1999 to $4,998,000 for the quarter
ended December 31, 1999. For the quarter ended March 31, 2000, the Company had
revenue of $5,592,000, representing an increase of $594,000 or 11.9% over the
quarter ended December 31, 1999.
Revenue for the quarter ended March 31, 2000 decreased by $1,678,000, or 23.1%
as compared to the quarter ended March 31, 1999. For the quarter ended March 31,
2000, Lucent Technologies, Inc. ("Lucent") represented approximately $1,170,000
or 20.9% of the Company's revenue. The Company provides hardware installation
and maintenance services on a project-by-project basis to Lucent. The Company's
revenue mix compared to the quarter ended March 31,1999 remained consistent at
approximately 45% Network Services and 55% Network Integration.
GROSS MARGIN
The gross margin percentage for the quarter ended March 31, 2000 was 19.6% as
compared to 27.8% for the quarter ended March 31, 1999. The Company has
experienced declines in Network Integration margins primarily due to decreased
hardware margins and labor utilization due to the Company deciding to maintain
its workforce as revenue decreased. Network Services margins decreased due to
losses or non-renewal of customers as well as competitive pricing pressures.
SELLING
Selling expenses for the quarter ended March 31, 2000 decreased by $117,000, or
14.1% as compared to the quarter ended March 31, 1999. The decrease in selling
expenses is attributable to a decrease in personnel related expenses. Selling
expenses as a percentage of revenue were 12.7% for the quarter ended March 31,
2000 as compared to 11.4% for the quarter ended March 31, 1999.
10
<PAGE>
GENERAL AND ADMINISTRATIVE
General and Administrative expenses decreased by $146,000, or 10.6% for the
quarter ended March 31, 2000 as compared to the quarter ended March 31, 1999.
Reductions in professional services and office expenses were partially offset by
increased personnel costs.
MERGER EXPENSES
As previously discussed the Company executed a definitive Agreement and Plan of
Merger, pursuant to which RMI will acquire INCC. The Company incurred $136,000
of legal and professional fees in the quarter ended March 31, 2000, related to
this announced Merger. The Company is recognizing all expenses related to the
Merger as incurred.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company is not subject to market risk as all debt is at a fixed interest
rate.
11
<PAGE>
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the normal course of business the Company is a party to litigation. The
Company is currently one of multiple defendants in two separate cases. The
Company's insurance company has assumed the defense in each of the cases.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
The Company's Common Stock is traded on The Nasdaq SmallCap Market under the
symbol INCC. As disclosed in the Company's Form 10-K for the year ended December
31, 1999, the Company no longer met the consolidated net tangible asset
condition for continued listing on The Nasdaq SmallCap Market. In a notice
letter dated April 7, 2000, Nasdaq confirmed that the Company no longer
satisfied the condition for continued listing on The Nasdaq SmallCap Market. In
a letter dated April 20, 2000, the Company requested a waiver of the continued
listing requirements until September 13, 2000 (the date the Merger may be
terminated if the closing does not occur). There can be no assurance that the
Nasdaq Stock Market will agree to temporary relief and the Nasdaq Market may
take action against the Company, including, but not limited to, removing the
Common Stock from the SmallCap Market.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27- FINANCIAL DATA SCHEDULE
(b) The Company filed one report on Form 8-K during the quarterly period
ending March 31, 2000. On March 31, 2000, the Company filed a Form 8-K
reporting that the Company had executed a definitive Agreement and
Plan of Merger pursuant to which RMI.NET, Inc. will acquire all of the
issued and outstanding shares of the Company for RMI.NET, Inc. common
stock and warrants. The consummation of the Merger remains subject to
shareholder approval and other customary conditions.
12
<PAGE>
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.
INTERNET COMMUNICATIONS CORPORATION
-----------------------------------
(Registrant)
Date: May 15, 2000 By: /s/ Thomas C. Galley
-------------------------------------
Thomas C. Galley, President and
Chief Executive Officer
Date: May 15, 2000 By: /s/ T. Timothy Kershisnik
-------------------------------------
T. Timothy Kershisnik, Chief
Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 279,000
<SECURITIES> 0
<RECEIVABLES> 3,978,000
<ALLOWANCES> 503,000
<INVENTORY> 2,221,000
<CURRENT-ASSETS> 6,684,000
<PP&E> 5,706,000
<DEPRECIATION> 4,760,000
<TOTAL-ASSETS> 8,814,000
<CURRENT-LIABILITIES> 7,552,000
<BONDS> 0
0
6,816,000
<COMMON> 15,409,000
<OTHER-SE> (21,088,000)
<TOTAL-LIABILITY-AND-EQUITY> 8,814,000
<SALES> 5,592,000
<TOTAL-REVENUES> 5,592,000
<CGS> (4,496,000)
<TOTAL-COSTS> (6,573,000)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 60,000
<INTEREST-EXPENSE> 95,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,076,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,076,000)
<EPS-BASIC> (.21)
<EPS-DILUTED> (.21)
</TABLE>
