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For the Quarters Ended | For the Six-Month Ended | ||||||||||||
June 30, 2003 | June 30, 2002 | June 30, 2003 | June 30, 2002 | ||||||||||
Statements of Operations Data | |||||||||||||
Domain Name Leasing and Advertising | $ | 118,203 | $ | 112,502 | $ | 199,294 | $ | 182,023 | |||||
Domain Name Sales | -- | 60,000 | -- | 260,000 | |||||||||
Product Sales and Other | 55,692 | 11,926 | 55,758 | 37,814 | |||||||||
Total Revenues | $ | 173,895 | $ | 184,428 | $ | 255,052 | $ | 479,837 | |||||
Domain Name Leasing and Advertising | -- | -- | -- | -- | |||||||||
Cost of Domain Name Sales | -- | $ | 39,262 | -- | $ | 121,577 | |||||||
Product Purchases | $ | 46,401 | -- | $ | 46,401 | -- | |||||||
Total Cost of Revenues | $ | 46,401 | $ | 39,262 | $ | 46,401 | $ | 121,577 | |||||
Gross Profit | $ | 127,494 | $ | 145,166 | $ | 208,651 | $ | 358,260 | |||||
General and Administrative | ($ 36,531 | ) | ($ 84,876 | ) | ($ 56,893 | ) | ($ 112,451 | ) | |||||
Professional Fees | (51,498 | ) | (58,124 | ) | (94,910 | ) | (117,209 | ) | |||||
Depreciation | (794 | ) | (1,248 | ) | (1,674 | ) | (2,678 | ) | |||||
Operating Income (Loss) | $ | 38,671 | $ | 918 | $ | 55,174 | $ | 125,922 | |||||
Interest | (10,870 | ) | (12,175 | ) | (21,503 | ) | (34,572 | ) | |||||
Loss on Acquisition of Minority Interest | -- | (15,471 | ) | -- | (15,471 | ) | |||||||
Net Income (Loss) Before Accounting Change | $ | 27,801 | ($ 26,728 | ) | $ | 33,671 | $ | 75,879 | |||||
Cumulative Effect of Accounting Change | -- | -- | -- | ($1,426,736 | ) | ||||||||
Net Income (Loss) for the Period | $ | 27,801 | ($ 26,728 | ) | $ | 33,671 | ($1,350,857 | ) | |||||
Basic Earnings (Loss) per Share Before Accounting Change | $ | 0.002 | ($ 0.002 | ) | $ | 0.002 | $ | 0.005 | |||||
Effect of Accounting Change | -- | -- | -- | ($ 0.10 | ) | ||||||||
Basic Earnings (Loss) per Share | $ | 0.002 | ($ 0.002 | ) | $ | 0.002 | ($ 0.10 | ) | |||||
Weighted Average Shares Outstanding | 14,691,339 | 14,202,328 | 14,691,339 | 14,196,864 |
Balance Sheet Data | As at June 30, 2003 | As at December 31, 2002 | |||||
Current Assets | $ | 137,605 | $ | 77,459 | |||
Fixed Assets | 11,002 | 12,675 | |||||
Intangible Assets | 1,793,264 | 1,793,264 | |||||
Total Assets | $ | 1,941,871 | $ | 1,883,398 | |||
Accounts Payable & Accrued Liabilities | $ | 398,963 | $ | 357,233 | |||
Loan Payable | 375,000 | 375,000 | |||||
Deferred Revenue | 9,746 | -- | |||||
Total Liabilities | $ | 783,709 | $ | 732,233 | |||
Common Stock | $ | 5,701 | $ | 5,201 | |||
Additional Paid in Capital | 3,066,516 | 3,066,516 | |||||
Accumulated Deficit | ($ 1,914,055 | ) | ($ 1,921,052 | ) |
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EXHIBIT | DESCRIPTION |
F-1 | Financial Statements. |
10.1 | Agreement to Extend Term of Promissory Note Dated May 19, 2003 |
31 | Section 302 Certification of Chief Executive Officer and Chief Financial Officer |
32 | Section 906 Certificate of Chief Executive Office and Chief Financial Officer |
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David M Jeffs, Director and CEO
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J Cameron Pan - CFO
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18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
David M. Jeffs
Chief Executive Officer
August 14, 2003
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18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
J. Cameron Pan
Chief Financial Officer
August 14, 2003
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June 30,2003 |
|
| December 31, 2002 | ||||
(Unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 107,990 | $ | 55,527 | |||
Accounts receivable | 15,255 | 19,957 | |||||
Advances receivable | 7,300 | - | |||||
Prepaid expenses | 7,060 | 1,975 | |||||
137,605 | 77,459 | ||||||
FIXED ASSETS(Note 3) | 11,002 | 12,675 | |||||
INTANGIBLE ASSETS HELD FOR RESALE(Note 2) | 1,793,264 | 1,793,264 | |||||
$ | 1,941,871 | $ | 1,883,398 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued liabilities | $ | 398,963 | $ | 357,233 | |||
Loan payable (Note 4) | 375,000 | 375,000 | |||||
Deferred revenue | 9,746 | - | |||||
783,709 | 732,233 | ||||||
COMMITMENTS AND CONTINGENCIES(Notes 1 and 9) | |||||||
STOCKHOLDERS’ EQUITY | |||||||
Capital stock(note 5) | |||||||
Authorized | |||||||
50,000,000 Common shares, $.001 par value | |||||||
Issued and outstanding | |||||||
14,691,339 (2002 – 14,691,339) Common shares | 5,701 | 5,701 | |||||
Additional paid in capital | 3,066,516 | 3,066,516 | |||||
Accumulated deficit | (1,912,920 | ) | (1,946,591 | ) | |||
Accumulated other comprehensive income | (1,135 | ) | 25,539 | ||||
1,158,162 | 1,151,165 | ||||||
$ | 1,941,871 | $ | 1,883,398 | ||||
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Three months ended June 30, 2003 |
|
| Three months ended June 30, 2002 |
|
| Six months ended June 30, 2003 |
|
| Six months ended June 30, 2002 |
| |||
REVENUES | |||||||||||||
Domain name leasing and advertising | $ | 118,203 | $ | 112,502 | $ | 199,294 | $ | 182,023 | |||||
Domain name sales | - | 60,000 | - | 260,000 | |||||||||
Product sales and other | 55,692 | 11,926 | 55,758 | 37,814 | |||||||||
Total revenue | 173,895 | 184,428 | 255,052 | 479,837 | |||||||||
COST OF REVENUES | |||||||||||||
Domain name leasing and advertising | - | - | - | - | |||||||||
Cost of domain name sales | - | 39,262 | - | 121,577 | |||||||||
Product purchases | 46,401 | - | 46,401 | - | |||||||||
Total cost of revenues | 46,401 | 39,262 | 46,401 | 121,577 | |||||||||
GROSS PROFIT | 127,494 | 145,166 | 208,651 | 358,260 | |||||||||
EXPENSES | |||||||||||||
General and administrative | 36,531 | 84,876 | 56.893 | 112,451 | |||||||||
Professional and consulting fees | 51,498 | 58,124 | 94,910 | 117,209 | |||||||||
Depreciation | 794 | 1,248 | 1,674 | 2,678 | |||||||||
88,823 | 144,248 | 153,477 | 232.338 | ||||||||||
OPERATING INCOME | 38,671 | 918 | 55,174 | 125,922 | |||||||||
INTEREST EXPENSE | (10,870 | ) | (12,175 | ) | (21,503 | ) | (34,572 | ) | |||||
LOSS ON ACQUISITION OF MINORITY INTEREST | - | (15,471 | ) | - | (15,471 | ) | |||||||
NET INCOME (LOSS) BEFORE THE FOLLOWING | 27,801 | (26,278 | ) | 33,671 | 75,879 | ||||||||
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (Note 2) | - | - | - | (1,426,736 | ) | ||||||||
NET INCOME (LOSS) FOR THE PERIOD | $ | 27,801 | $ | (26,278 | ) | $ | 33,671 | $ | (1,350,857 | ) | |||
BASIC EARNINGS (LOSS) PER SHARE BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE | $ 0.00 | $ (0.00 | ) | $ | 0.00 | $ | ( 0.00 | ) | |||||
EFFECT OF ACCOUNTING CHANGE | - | - | - | (0.10 | ) | ||||||||
BASIC EARNINGS (LOSS) PER SHARE | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | $ | (0.10 | ) | |||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | 14,691,339 | 14,202,328 | 14,691,339 | 14,196,864 | |||||||||
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Six months ended June 30, 2003 | Six months ended June 30, 2002 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) for the period | $ | 33,671 | $ | (1,324,129 | ) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities | |||||||
- cumulative effect of accounting change | - | 1,426,736 | |||||
- non-cash expenses and costs of revenue | - | 121,577 | |||||
- depreciation | 1,674 | 2,678 | |||||
- accrued interest | - | 25,874 | |||||
- accounts receivable | 4,702 | 40,291 | |||||
- advances receivable | (7,300 | ) | - | ||||
- prepaid expenses | (5,085 | ) | 4,196 | ||||
- accounts payable and accrued liabilities | 41,730 | 35,345 | |||||
- deferred revenue | 9,746 | 2,912 | |||||
CASH FROM OPERATING ACTIVITIES | 79,138 | 308,752 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
- loan proceeds (repayments) | - | (227,093 | ) | ||||
- lease obligation repayments | - | (9,947 | ) | ||||
CASH FLOWS USED IN FINANCING ACTIVITIES | - | (237,040 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES | (26,675 | ) | (40,060 | ) | |||
INCREASE IN CASH AND CASH EQUIVALENTS | 52,463 | 31,652 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 55,527 | 52,672 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 107,990 | $ | 84,324 | |||
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Computer equipment | 30% declining balance |
Furniture and fixtures | 20% declining balance |
Office equipment | 20% declining balance |
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Six months ended June 30, 2003 | Six months ended June 30, 2002 | ||||||
Net income (loss) for the period | As reported | $ | 33,671 | $ | - | ||
SFAS 123 compensation expense | Pro-forma | (12,354 | ) | - | |||
Net income for the period | Pro-forma | 21,317 | $ | - | |||
Pro-forma basic net income per share | Pro-forma | $ | 0.00 | $ | - | ||
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June 30, 2003 | December 31, 2002 | ||||||
Computer equipment | $ | 208,388 | $ | 208,388 | |||
Furniture and fixtures | 6,568 | 6,568 | |||||
Office equipment | 3,993 | 3,993 | |||||
218,949 | 218,949 | ||||||
Less: accumulated depreciation | (63,524 | ) | (61,851 | ) | |||
Less: accumulated impairment provision | (144,423 | ) | (144,423 | ) | |||
$ | 11,002 | $ | 12,675 | ||||
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B. In May 2002, Communicate asked PCMI to change the note from a demand note to a term note. PCMI agreed to a one-year term ending 28 June 2003. as consideration for PCMI’s agreeing to the term and consenting to the transfer to Communicate of a finders’ fee that Domain Holdings Inc. owed to PCMI in connection with an unrelated transaction, Communicate issued to PCMI two-year warrants exercisable for 2 million shares of Communicate’s common stock at $0.05 per share expiring 28 June 2004.
C. Communicate wants to extend the term of the promissory note by two years.
D. Communicate is up to date in its interest payments due under the note and has paid $25,000 on account of principal, leaving a principal balance owing to PCMI of $375,000.
- PCMI will extend the term of the promissory note for two years ending at 5:00 pm in Vancouver, British Columbia, on 28 June 2005.
- Communciate will extend the exercise period of the warrants for one year ending 5:00 pm in Vancouver, British Columbia, on 28 June 2005.
- All other terms and conditions of the note and the warrants remain effective.
/s/ David M. Jeffs | /s/ Rick Jeffs |
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