-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DrYnevwgn7zqvJF5+wjdawldEH6mlqEE2LoT8apqNPDSDl9O6nxBSJ7pw7E8PC6o g3YTqtBVoCs9mq0uBP+zNA== 0000894738-99-000004.txt : 19990318 0000894738-99-000004.hdr.sgml : 19990318 ACCESSION NUMBER: 0000894738-99-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990131 FILED AS OF DATE: 19990317 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET COMMERCE CORP CENTRAL INDEX KEY: 0000894738 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 133645702 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24996 FILM NUMBER: 99567168 BUSINESS ADDRESS: STREET 1: 805 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2122717640 MAIL ADDRESS: STREET 1: 805 THIRD AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: INFOSAFE SYSTEMS INC DATE OF NAME CHANGE: 19940914 10QSB 1 2ND QUARTER 1999 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB _____________ [X] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended January 31, 1999 [ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM _____ TO _____ Commission File No. 000-24996 INTERNET COMMERCE CORPORATION (Exact name of small business issuer as specified in its charter) Delaware 13-3645702 - ----------------------------------------- ---------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or organization) Identification Number) 805 Third Avenue 9th flr, New York, NY 10022 - ----------------------------------------- ---------------------- (Address of principal executive offices) (Zip Code) (212) 271-7640 - ----------------------------------------- (Issuer's telephone number) Infosafe Systems, Inc. - ----------------------------------------- (Former name, normer address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes__X__ No_____ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Class Outstanding at January 31, 1999: ------------------------------------ --------------------------------- Class A Common Stock, $.01 par value 1,305,283 shares Class B Common Stock, $.01 par value 193,108 shares Traditional Small Business Disclosure Format Yes__X__ No_____ INDEX TO FORM 10-QSB PAGE PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets as of July 31, 1998 and January 31, 1999 (Unaudited) 3 Condensed Statements of Operations for the Three Months ended January 31, 1998 and January 31, 1999 (Unaudited) and for the period November 18, 1991 (Inception) through January 31, 1999 (Unaudited) 4 Condensed Statements of Cash Flows for the Three Months ended January 31, 1998 and January 31, 1999 (Unaudited) and for the period November 18, 1991 (Inception) to January 31, 1999 (Unaudited) 5 Notes to Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 11 Item 2. Subsequent Events 11-12 Item 5. Other 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 INTERNET COMMERCE CORPORATION (a development stage company) CONDENSED BALANCE SHEETS
July 31, 1998 January 31, 1999 (audited) (unaudited) --------------- ---------------- ASSETS Current assets Cash and cash equivalents $ 178,287 $ 899,531 Accounts receivable 7,231 10,734 Prepaid expenses and other assets 100,882 18,904 Notes recievable 157,500 --------------- ---------------- Total current assets 286,400 1,086,669 Fixed assets 533,188 437,237 Software development costs 714,298 713,982 Other assets 1,200 2,700 Goodwill, net 418,119 --------------- ---------------- Total assets $ 1,535,086 $ 2,658,707 LIABILITIES Current liabilities: Accounts payable $ 575,031 $ 24,139 Bridge notes, net of debt discount 232,557 768,287 Notes payable 0 0 Capital lease obligation 84,505 91,875 Accrued expenses 308,646 356,753 ---------------- ---------------- Total current liabilities 1,200,739 1,241,054 ---------------- ---------------- Capital lease obligation - less current portion 196,887 149,031 ---------------- ---------------- Total liabilities 1,397,626 1,390,085 ---------------- ---------------- Redeemable Common Stock 5,729 5,729 STOCKHOLDERS' EQUITY Preferred stock: Series S preferred stock - par value $.01 per share, 175 shares issued and outstanding at January 31, 1999 2 Common stock: Class A - par value $.01 per share, 40,000,000 shares authorized, one vote per share; 1,305,283 shares issued and outstanding at January 31, 1999 and 947,951 shares issued and outstanding at July 31, 1998 9,480 13,038 Class B - par value $.01 per share, 2,000,000 shares authorized, six votes per share; 193,108 shares issued and outstanding 1,944 1,944 and 194,397 shares issued and outstanding at July 31, 1998 Additional paid-in capital 14,532,208 17,757,242 Notes receivable (112,500) 0 (Deficit) accumulated during development stage (14,299,401) (16,509,333) ---------------- ---------------- Total stockholder's equity 131,731 1,262,893 ---------------- ---------------- Total liabilities and stockholders' equity $ 1,535,086 $ 2,658,707 ---------------- ----------------
Attention is directed to the accompanying notes to financial statments
INTERNET COMMERCE CORPORATION (a development stage company) Condensed Statements of Operations (Unaudited) For the Three Months For the Six Months Period From Ended January 31, Ended January 31, November 18, 1991 ------------------------------ ------------------------------- (Inception) through 1998 1999 1998 1999 January 31, 1999 ------------------------------ ------------------------------- -------------------- Revenue: License Fees $ 350,000 Services $ 16,101 $ 25,397 42,878 Other $ 5,649 0 $ 8,799 0 261,163 ------------- ------------- ------------- ------------- -------------------- Total 5,649 16,101 8,799 25,397 654,041 ------------- ------------- ------------- ------------- -------------------- Expenses: Cost of revenue 4,057 7,270 6,365 12,280 268,994 Operating expenses 445,207 565,917 949,359 1,587,577 14,847,591 Write-down of assets 0 0 0 0 1,155,091 ------------- ------------- ------------- ------------- -------------------- Total 449,264 573,187 955,724 1,599,857 16,271,676 ------------- ------------- ------------- ------------- -------------------- Operating (loss) (443,615) (557,086) (946,925) (1,574,460) (15,617,635) ------------ ------------ ------------- ------------- -------------------- Interest and investment income 26,115 1,839 68,002 6,606 578,842 Settlement expense 0 0 0 0 (394,828) Minority interest 0 0 0 0 1,000 Interest expense (187) (563,555) (440) (642,078) (1,068,312) ------------- ------------- ------------- ------------- -------------------- Net (loss) $ (417,687) $ (1,118,802) $ (879,363) $ (2,209,932) $ (16,500,933) ------------- ------------- ------------- ------------- -------------------- Net(loss) per common share $ (0.59) $ (0.75) $ (0.83) $ (1.60) ------------- ------------- ------------- ------------- Weighted average number of common shares 709,116 1,484,174 1,062,348 1,380,511 ------------- ------------- ------------- ------------- Attention is directed to the accompanying notes to finincial statements
INTERNET COMMERCE CORPORATION (a development stage company) Condensed Statements of Cash Flows (Unaudited)
For the Six Months Period From Ended Janurary 31, November 18, 1991 ------------------------------- (Inception) through 1998 1999 January 31, 1999 ------------------------------- ------------------- Cash flows from operating activities: Net (loss) $ (461,676) $ (2,209,932) $ (16,500,933) Adjustments to reconcile net (loss) to net cash (used in) operating activities: Write-down of assets 1,155,091 Other net cash provided by (used in) operating activities (86,226) 382,736 2,664,048 -------------- ------------- ------------------- Net cash (used in) operating activities (547,902) (1,827,196) (12,681,794) -------------- ------------- ------------------- Cash flows from investing activities: Purchases of marketable securities (499,726) (16,083,295) Sales of marketable securities 1,090,317 16,083,295 Capitalization of software development costs (921,188) Other investing activities (260,328) (1,814,637) -------------- ------------- ------------------- Net cash provided by (used in) investing activities 330,263 (2,735,825) -------------- ------------- ------------------- Cash flows from financing activities: Proceeds from issuance of common stock 16,075,260 Costs in connection with sale of common stock (2,912,671) Payment of purchase agreement (15,000) (212,840) Exercise of warrants and options 424,895 Proceeds from bridge notes and notes payable 2,595,000 4,390,000 Payment of bridge loan (1,500,000) Payment of deferred financing costs (224,919) Proceeds form financing lease 340,715 Other financing activities (2,489) (46,560) (63,290) -------------- ------------- ------------------- Net cash provided by (used in) financing activities (17,489) 2,548,440 16,317,150 -------------- ------------- ------------------- Net increase (decrease) in cash and cash equivalents (235,128) 721,244 899,531 Cash and cash equivalents, beginning of period 392,860 178,287 -------------- ------------- ------------------- Cash and cash equivalents, end of period $ 157,732 $ 899,531 $ 899,531 -------------- ------------- ------------------- Supplemental schedule of noncash investing and financing activities: Debt discount in connection with bridge loan 2,388,299 Goodwill 470,383
Attention is directed to the accompanying notes to financial statements NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION AND THE COMPANY: [1] Basis of presentation: The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 3 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the six-month period ended January 31, 1999 are not necessarily indicative of the results that may be expected for the year ending July 31, 1999. The balance sheet at July 31, 1998 has been derived from the audited consolidated financial statements at that date, but does not include all the footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the audited financial statements and footnotes thereto included in the Form 10-KSB for the Company's fiscal year ended July 31, 1998. [2] The Company: Internet Commerce Corporation (the "Company" or "ICC"), formerly Infosafe Systems, Inc. is a development stage company, engaged in the design, development and marketing of systems for securing, controlling, delivering and auditing electronic documents and files primarily over the Internet. The Company believes that its technology and methods address critical areas of electronic commerce and it is seeking to position itself as an independent third party to authenticate, certify, validate, authorize, and deliver secure transactions for electronic information. The acquisition of the 16.7% of its majority owned subsidiary ("ICCSUB" or the subsidiary"), not previously held by the Company was completed during the first fiscal quarter. A total of 334,435 shares of Class A Common Stock was issued to the former minority owners of ICCSUB as a result of this acquisition. The acquisition was accounted for as a purchase of a minority interest. NOTE B - GOODWILL: The Company recorded $470,383 in goodwill, as a result of the acquisition of ICCSUB. The Company valued the acquisition of ICCSUB at the market value of the Class A Common Stock on the date of the transaction. The goodwill, which represents the excess of purchase price over NOTES TO FINANCIAL STATEMENTS (Unaudited) fair value of net assets acquired, is being amortized on a straight-line basis over 3 years. Accumulated amortization as of January 31, 1999 was $52,265. NOTE C - BRIDGE NOTES: The Company had $2,595,000 of Bridge Notes outstanding as of January 31, 1999. The accrued interest at fiscal quarter end was $53,720. In connection with the issuance of the Bridge Notes, 778,500 Bridge Warrants to purchase shares of Class A Common Stock have become issuable. The Company has valued these warrants using the Black-Scholes pricing model at $2,460,102, which are being treated as debt discount and amortized over the term of the notes. The Company has closed the Bridge Offering and, in lieu of repaying the Bridge Note in accordance with their terms, the Company has offered to exchange shares of a Series A Convertible Redeemable Preferred Stock for the Bridge Notes. The Company has received executed Agreements to Exchange for 100 % of the principle amount of the Bridge Notes. The conversion was approved by the majority of shareholder's of the Company at a Special Meeting of Shareholders which was reconvened on March 17, 1999. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Except for the description of historical facts contained herein, this Form 10-QSB contains certain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, such as (i) the Company's ability to obtain financing expected to be required during the fiscal year ending July 31, 1999, or (ii) that the Company will ever achieve profitable operations, as detailed herein under "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and from time to time in the Company's filings with the Securities and Exchange Commission and elsewhere. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties which could cause actual results to differ materially from those described in the forward-looking statements. The Company's actual results could differ materially from those discussed herein. Overview The Company is a development stage company, engaged in the design, development and marketing of systems for securing, controlling, delivering and auditing electronic documents and files primarily over the Internet. The Company believes its technology and methods address critical areas of electronic commerce and is seeking to position itself as an independent third party to authenticate, certify, validate, authorize, and deliver secure transactions for electronic information. From November 18, 1991 (inception) to January 31, 1999, the Company recognized revenues of approximately $654,000 and had an accumulated deficit of approximately $16.5 million. The Company has continued to operate at a deficit since inception and expects to continue to operate at a deficit until such time, if ever, as operations generate sufficient revenues to cover costs. The Company's ability to generate revenues and operate profitably and continue as a going concern, is dependent on its ability to market the CommerceSense System it has developed and its ability to raise the necessary additional operating funds. The likelihood of the success of the Company must be considered in light of the difficulties and risks inherent in a new business. There can be no assurance that revenues will increase significantly in the future or that the Company will ever achieve profitable operations. As of January 31, 1999, the Company had received and accepted subscription for the purchase of $2,595,000 of Bridge Units from individual accredited investors. The Company currently estimates that cash on hand together with cash generated from operations will be sufficient to satisfy the Company's cash requirements only until April 30, 1999. The Company commenced a Private Placement offering up to 7,405 shares of the Series A Convertible Redeemable Preferred Stock ("Series A Preferred Stock") immediately following the closing of the Bridge Financing at a price per share of $1,000. In addition, the Company has offered the Bridge Note holders the opportunity to exchange their Bridge Notes into shares of the Series A Preferred Stock. All of the holders of the Bridge Notes have agreed to exchange the Bridge Notes into shares of the Series A Preferred Stock subject to shareholders approval of the potential issuance of more than 19.9% of the outstanding voting securities of the Company as required by the rules of the Nasdaq Stock Market and continued listing on the Nasdaq SmallCap Market. As a result an additional 2,595 shares of Series A Preferred Stock will be issued, and the total of the Series A Preferred Stock will be up to 10,000. The stockholders approved the Share Issuance Proposal at a Special Meeting of Shareholders on March 17,1999, thereby authorizing the issuance of Common Stock representing more than 20% of the issued and outstanding shares thereof and to determine the other terms and conditions of the Private Placement. The Company has incurred substantial losses since inception and anticipates losses to continue through the fiscal year ending July 31, 1999 ("fiscal 1999") as the Company attempts to expand commercial markets for CommerceSense. Although management believes that the Company will be successful in marketing CommerceSense, there can be no assurance that it will be able to do so or that its present resources or access to additional financing will be adequate, if available at all, to achieve these objectives or to continue as a going concern. Results of Operations Three Months Ended January 31, 1999 Compared with Three Months Ended January 31, 1998. Revenues were approximately $16,000 and $6,000, respectively, for the three months ended January 31, 1999 (the "1999 Quarter"), and for the three months ended January 31, 1998 (the "1998 Quarter"). The 1999 revenues were generated by CommerceSense. Operating expenses increased from $445,000 for the 1998 Quarter to $566,000 for the 1999 Quarter. The increase of $121,000 is attributable to an increase in technical costs of over $340,000 that were not present in the 1998 Quarter and a decrease of $219,000 in general and administration costs. The increase of $340,000 in technical expenses was largely attributable to the Company's focus on the launch of the CommerceSense System, leading to increased salaries and related costs for the increase in personnel not present in the 1998 Quarter. In addition, the Company capitalized development costs in the 1998 Quarter that were not present in the 1999 Quarter. The decrease in general and administration costs of $219,000 can be attributed to the settlement of $275,000 of legal expenses. There were also increases in expenses attributable to an increase in average staffing levels over the 1998 Quarter, leading to increases in salary and related costs. The Company had income from investments of approximately $2,000 for the 1999 Quarter and approximately $26,000 for the 1998 Quarter. The decrease was due to a decrease in average balances of the Company's investment securities for the period. Interest expense was approximately $564,000 in the 1999 Quarter compared to approximately $200 in the 1998 Quarter. The interest expense increase is attributed to debt discount amortization related to Bridge Note Warrants and the financing of a capital lease. The net loss for the 1999 Quarter was approximately $1,119,000 compared to approximately $418,000 for the 1998 Quarter. Management believes that losses will continue through fiscal 1999 as the Company is still in the development stage and is in the process of commercializing and marketing its new service. Six Months Ended January 31, 1999 Compared with Six Months Ended January 31, 1998. Revenues were approximately $25,000 and $9,000, respectively, for the six months ended January 31, 1999 (the "1999 Six Months"), and for the six months ended January 31, 1998 (the "1998 six Months"). The 1999 revenues were generated from ICC CommerceSense. Operating expenses were approximately $1,588,000 for the 1999 Six Months and approximately $949,000 for the 1998 Six Months. The increase of $639,000 is attributable to an increase in technical costs of over $599,000 that were not present in the 1998 Quarter and an increase of $40,000 in general and administration costs. The increase of $599,000 in technical expenses was largely attributable to the Company's focus on the launch of the CommerceSense System, leading to increased salaries and related costs for the increase in personnel not present in the 1998 Quarter. In addition, the Company capitalized development costs in the 1998 Quarter that were not present in the 1999 Quarter. The increase in general and administration costs of $40,000 can be attributed to the increases in expenses related to an increase in average staffing levels over the 1998 Quarter, leading to increases in salary and related costs. In addition, there was a settlement of $275,000 of legal expenses. The Company had income from investments of approximately $7,000 for the 1999 Six Months and approximately $68,000 for the 1998 Six Months. The decrease was due to a decrease in average balances of the Company's investment securities for the period. Interest expense was approximately $642,000 in the 1999 Six Months and approximately $400 in the 1998 Six Months. The interest expense increase is attributed to debt discount amortization related to Bridge Note Warrants and the financing of a capital lease. The net loss for the 1999 Six Months was approximately $2,210,000 compared to approximately $879,000 for the 1998 Six Months. Management believes that the losses will continue through fiscal 1999 as the Company is still in the development stage and is in the process of commercializing and marketing new products. Liquidity and Capital Resources The Company has incurred substantial losses since inception. Although no assurance can be given, the Company anticipates that revenues will continue to be generated, although as a result of increased expenses associated with any such revenues, losses may increase, or the decrease in losses realized in fiscal 1999 may not be comparable to fiscal 1998. At January 31, 1999, the Company had a negative working capital of approximately ($154,000). The Company has financed its operations through private placements during fiscal 1994, its initial public offering during fiscal 1995 (the "IPO"), a private placement in March 1997, and a private placement of Bridge Note Units during fiscal 1998 and 1999. The Company anticipates losses through fiscal 1999, as the Company attempts to expand commercial markets for CommerceSense. The Company does not have sufficient financial resources to continue its operations beyond April 1999, without obtaining additional financing. There can be no assurance that the Company will be able to obtain the necessary financing or to generate sufficient revenue to continue its operations and continue as a going concern. Any additional equity financing would be dilutive to stockholders, and debt financing, if available, may contain covenants that might restrict the Company's ability to implement its current objectives. The Company has a net operating loss carryforward of approximately $16.5 million to offset any future taxable income for federal tax purposes. The utilization of the loss carryforward to reduce any such future income taxes will depend on the Company's ability to generate sufficient taxable income prior to the expiration of the net operating loss carryforwards. The carryforward expires from 2007 to 2013. The Internal Revenue Code of 1986, as amended, generally contains provisions which limit the use of available net operating loss carryforwards in any given year should significant changes (greater than 50%) in ownership interests occur. Due to the IPO, the net operating loss carryover of approximately $1,900,000 incurred prior to the IPO will be subject to an annual limitation of approximately $400,000 until that portion of the net operating loss is utilized or expires. Year 2000 Compliance The Company has commenced implementation of new financial software for internal operating purposes that is Year 2000 ("Y2K") compliant. The Company's CommerceSense service is fully Y2K compliant. Upon completion of the implementation of the new financial software there will be no costs relating to modification of software incurred by the company. The Company is in communication with customers and others with which it conducts business to determine the extent to which the Company would be vulnerable to these third parties failure to remediate their own potential year 2000 problems. The inability of the Company or these other significant third parties to adequately address Y2K issues could cause disruption of the Company's operations. PART II Item 1: Legal Proceedings The Company commenced arbitration against its former Vice President and Director of Technology, Robert Nagel ("Nagel"), on May 29, 1997, for fraud, breach of his employment contract, breach of the duties of obedience and loyalty and misappropriation of corporate opportunity. Nagel denied the claims and served a counterclaim alleging breach of the employment agreement, discrimination on the basis of his blindness, defamation, and violation of the Federal Wiretapping Act and the Federal Eavesdropping Act. The damages sought by Nagel against the Company was for approximately $1,000,000, excluding interest, costs and attorney's fees. The Company believed that it had a meritorious case against Nagel and strong defenses to Nagel's counterclaims. Nonetheless, the arbitrators found in favor of Nagel and awarded Nagel $60,000 payable upon the closing of ICC's Private Placement of its Series A Preferred Stock and 22,000 shares of Class A Common Stock to be issued after the effective date of the Resale Registration Statement. The Company has accrued the $60,000 payable. Item 2: Subsequent Events: By letter dated February 22, 1999, the Nasdaq-Amex Market Group (the "NASD") notified the Company that it had delisted the Company's securities from the Nasdaq SmallCap Market effective as of the close of business on that day. Despite the Nasdaq Listing Qualifications Panel's (the "Panel") determination that the Company had met some of the continued listing criteria, including the independent director requirement and the shareholder approval requirement, and that upon consummation of the Company's bridge financing and preferred stock private placement the Company would have net tangible assets of approximately $4,500,000 (more than the $2,000,000 required level), the Panel stated that, given the Company's history of losses, it did not think that the Company could sustain compliance with the net tangible assets requirements. The Panel also noted the lack of market makers for the Company's warrants as a basis for the delisting action. Since the Company was current in all of its periodic reporting requirements with the Securities and Exchange Commission, the Company's securities were immediately eligible to trade on the NASD OTC Bulletin Board (the "OTCBB"). Accordingly, the Class A Common Stock commended trading under the symbol "ICCSA" on the OTCBB on February 23, 1999. The Company appealed the Panel's decision to the Nasdaq Listing and Hearing Review Council and increased the size of its original proposed preferred stock private placement to further ensure its projected compliance with the net tangible assets provision. On March 15, 1999, the Company was notified by the Nasdaq SmallCap Market that the Company's Class A Common stock will be relisted via an exception from the net tangible assets requirement effective with the open of business, March 17, 1999. The Company was granted a temporary exception from this standard subject to the Company meeting certain conditions, the exception will expire on April 30, 1999. In the event the Company is deemed to have met the terms of the exception, it shall continue to be listed on the Nasdaq SmallCap Market. The Company believes that it will meet these conditions, however, there can be no assurance that it will do so. If at some future date the Company's Class A Common should cease to be listed on the Nasdaq SmallCap Market, they may continue to be listed in the OTCBB. For the duration of the exception, the Company's Nasdaq symbol for Class A Common stock will be ICCAC. The Company's Units, Class A Warrants and Class B Warrants will remain on the OTCBB. Item 5: Other: On February 4, 1999, Mr. Arthur Medici, the former President of the Company, informed the CEO and Chairman of the Board, Mr. Richard Berman, that he was tendering his resignation as President of the Company effective February 28, 1999. Item 6: Exhibits and Reports on Form 8-K (a) Exhibit(s). Number Description Method of Filing - ------- ----------------------- --------------------------- 27 Financial Data Schedule Filed with this Form 10-QSB (b) Reports on Form 8-K There were no reports on Form 8-K filed for the quarter ended January 31, 1999. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTERNET COMMERCE CORPORATION - ----------------------------- (Registrant) Date: March 17, 1999 By: /s/ Richard J. Berman ------------------------------------------- Richard J. Berman, Chief Executive Officer, Chairman of the Board of Directors (Principal Executive Officer) Date: March 17, 1999 By: /s/ Walter M. Psztur ------------------------------------------- Walter M. Psztur, V.P. Finance & Administration (Chief Financial Officer, Principal Accounting Officer & Secretary) EX-27 2
5 6-MOS JUL-31-1999 JAN-31-1998 899,531 0 10,734 0 0 1,086,669 938,204 500,967 2,658,707 1,241,054 0 0 0 20,711 1,242,182 2,658,707 25,397 25,397 12,280 12,280 1,587,577 0 642,078 (2,209,932) 0 (2,209,932) 0 0 0 (2,209,932) (1.60) (1.60)
-----END PRIVACY-ENHANCED MESSAGE-----