SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant
to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 8, 2001
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Netgateway, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State of Other Jurisdiction of Incorporation)
000-27941 87-0591719
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(Commission File Number (IRS Employer Identification No.)
754 East Technology Avenue, Orem, Utah 84097
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(Address of Principal Executive Offices) (Zip Code)
801.227.0004
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(Registrant's Telephone Number, Including Zip Code)
300 Oceangate, 5th Floor, Long Beach, California 90802
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Items.
On January 8, 2001, Netgateway, Inc. issued the press release attached
hereto as Exhibit 99.1 and incorporated herein by this reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements. Not Applicable.
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(b) Pro Forma Financial Information. Not Applicable.
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(c) Exhibits.
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99.1 Netgateway, Inc. press release, dated January 8, 2001.
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 hereunto duly authorized.
Netgateway, Inc.
Date: January 8, 2001 By: /s/ Frank C. Heyman
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Frank C. Heyman, Chief Financial Officer
<PAGE>
Exhibit 99.1
Netgateway Names New Chairman/CEO and President/COO
Company Also Announces Board Changes and Completion of Business Restructuring
And Implementation of New Strategy
OREM, Utah, Jan. 8 /PRNewswire/ -- Netgateway, Inc. (Nasdaq: NGWY - news),
announced that it has restructured its Board of Directors naming Donald L. Danks
as a director and its new Chairman and Chief Executive Officer while accepting
the resignations of Keith Freadhoff, Don Corliss, Scott Bebee and Robert Ciri.
The Company also announced that it has named John J. (Jay) Poelman President and
Chief Operating Officer. In addition, the Company announced that it will
complete the restructuring of its business and is implementing a strategy
designed to reach profitability in the near term and maximize the value of the
Company's assets.
Mr. Danks was an original investor in founding Netgateway in 1998 and is
currently one of its largest shareholders. During the past five years, he has
been involved in the creation, funding and business development of early stage
technology companies. In that time, Mr. Danks has secured or assisted in
securing more than $65 million dollars in capital for a number of start up
companies, including the initial $5 million dollars raised to create Netgateway.
In addition to attracting inceptive capital for client companies, Mr. Danks
assisted in the development of their business plans, helped in the recruitment
of senior management, supported the development of the public market for their
securities by introducing them to institutional investors and market makers and
oversaw ongoing corporate finance needs. Previously, Mr. Danks was the
co-founder and President of Prosoft Training.com, (Nasdaq: POSO - news) now
recognized as the worldwide leader in Internet technology training, education
and certification. In addition to helping organize that company, he was
responsible for securing more than $35 million in funding for that company.
Mr. Poelman's experience in the corporate world began with AM International, a
Fortune 500 company, where he spent 17 years in various assignments, including
that of Director of Manpower Development and Training. Recruited into the
entrepreneurial world, Mr. Poelman left big business to run a regional financial
planning and investment company serving multi-million dollar clients. As COO of
Newcastle Financial Group, Mr. Poelman was introduced to a broad range of
successful entrepreneurs. His work in the corporate world provided him with the
necessary experience and skills of organization, training, marketing, sales, and
attention to detail. These experiences coupled with his vision for the future
and the potential of the Internet, lead to the establishment of Galaxy. Mr.
Poelman was one of the original founders, and many credit Galaxy as having
established what is widely referred to as the World Wide Web training industry.
Prior to its merger with Netgateway, Mr. Poelman severed as CEO and President of
Galaxy for over three years. During that time, on a calendar year basis, he has
overseen Galaxy sales (prior to deferred revenue deductions) growth from $16,000
in 1996; to $2.5 million in 1997, $11.4 million in 1998, $23.5 million in 1999,
and approximately $30 million in 2000.
Mr. Danks stated, "I am honored and excited to have been selected by the board
of directors to serve in the capacity of Chairman and CEO. I have been an active
investor and supporter of Netgateway since its inception and have a great deal
of confidence in the future of this company. Obviously, there have been
challenges and setbacks, but that is the nature of early stage start-up
companies, especially in the current market. Netgateway's previous management
and employees worked very hard and created tremendous value that is not being
recognized by the market. For instance, Galaxy Mall, now the core business unit
of Netgateway, is generating annualized revenues in excess of $30 million
dollars at or near positive cash flow, yet the company maintains a current
market capitalization of only approximately $5.9 million dollars. Our focus will
be on efforts to fully develop the company's assets, achieving profitability and
exposing the value of this company to the investment community. To demonstrate
my confidence that we can reach profitability in the near term, I have committed
to the Board that I will not be paid or accrue a salary until we have reached
profitability. Further, I will not accept any stock options granted by the Board
priced at less than $5.00 as I believe this is approximately the average option
price for current employees."
Danks went on to say, "The first order of business is to refocus the company's
resources on the revenue generating part of the business. As of today, we have
undertaken the task of eliminating any portion of the business that does not or
will not produce positive cash flow within the short-term. To that end, we have
restructured our business-to-business unit and will maintain sufficient
engineering and customer support staff to fully service our existing B2B clients
in a profitable mode. We will also continue efforts to license our B2B
technology and support several potential opportunities, which may be close at
hand. However, we have reduced the overhead in our B2B operating unit
substantially and intend this effort to operate profitably within 90 days."
Danks continued, "Going forward, the primary focus of our business will be the
Galaxy operation. Headed by Jay Poelman since its inception, that business unit
is generating annualized revenues of more than $30 million and is at or near
profitability and positive cash flow. Galaxy offers educational e-Commerce
training workshops to entrepreneurs and small business owners, who want to bring
their current business or business ideas online, and sells solutions that enable
them to do this. In addition, Galaxy supports over 20 cable malls throughout the
country. The training workshops, offered nationwide, teach strategies to
successfully build, market, and grow e-Commerce sites. This Division has
substantial growth potential in that our target market is the tens of millions
of entrepreneurs and small business operators who have yet to embrace and
leverage e-Commerce technology to begin, expand or support their business. The
Galaxy model has been successfully demonstrated and we intend to aggressively
build upon their initial success."
"We will focus our efforts to become the leading e-Commerce Training and
Resource Company to the small business market. To achieve that goal, we intend
to expand our current training and workshop business and to continually augment
the array of training and resource products and services we offer to our
customer base. We reach, face-to-face, more than 100,000 small business owners
and entrepreneurs each year and we intend to provide them not only with their
initial exposure to e-Commerce education and technology, but to expand our
Galaxy business to be their partner for ongoing training, education,
professional development and technology needs. Today there are literally
hundreds of companies competing for the attention of medium to large businesses;
we will focus nationwide on the largest market, the small business and
entrepreneur, with our business model proven over the last several years. I am
very excited about the prospects of this effort."
In closing, Mr. Danks said, "The Company faces several very significant short
term challenges, including the need to secure additional financing. However,
because of their tenacious effort and commitment, the team at Netgateway has
provided its shareholders with an opportunity to not only survive in a market
when many companies haven't, but to become the leader in a very large market
niche. The company's management has a deep-rooted commitment to achieving
profitability, and investors should look forward to announcements of several
important strategic relationships; clear, concise and consistent communication
from the company to the investment community; and a primary focus on maximizing
shareholder value and return on equity."
About Netgateway
Netgateway enables companies of all sizes to extend their business to the
Internet quickly, effectively -- with minimal investment. Netgateway develops,
hosts, licenses, and supports a wide range of built-to-order B2B, B2E, and B2C
applications including enterprise portals, e-Retail, e-Procurement, and
e-Marketplace solutions. Netgateway (www.netgateway.com) is located at 754
Technology Ave., Orem, UT 84097.
This press release contains forward-looking statements within the meaning of the
Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995.
Such statements are based on the current expectations and beliefs of the
management of Netgateway and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements. For a more detailed discussion of
factors that affect the company's operating results, please refer to the
company's SEC reports including Netgateway's most recent reports on Form 10-K
and Form 10-Q. Additional information is available from Netgateway's Investor
Relations department and may be obtained by calling or writing. Netgateway is
located at 754 Technology Ave, Orem, Utah, 84097. This is information only and
is not an offer or solicitation to buy or sell securities.
SOURCE: Netgateway, Inc.
