UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 6-K
----------------
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
TownPagesNet.com plc
WELTON HOUSE, MILL LANE, ALTON
HAMPSHIRE, UK, GU34 1HD
+44 (0)1420 543 468
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F [X] Form 40-F_________
Indicate by check mark whether the Registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes_________ No [x]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b) :
Page 1 of 22 Pages
Exhibit Index Appears on Page 2.
<PAGE>
TOWNPAGESNET.COM PLC
TABLE OF CONTENTS
Page
Financial Information:
Condensed Consolidated Balance Sheets as of June 30, 2000 3
(unaudited) and December 31, 1999
Condensed Consolidated Statements of Operations for the six months ended 4-5
June 30, 2000 and 1999 (unaudited) and the three months ended June 30, 2000
and 1999 (unaudited)
Condensed Consolidated Statements of Cash Flows for the six months 6
ended June 30, 2000 and 1999 (unaudited)
Notes to Condensed Consolidated Financial Statements 7-10
Management's Discussion and Analysis of Financial Condition and Results 11-19
of Operations
Disclosures about Market Risk 20
Other Information:
Legal Proceedings 21
Changes in Securities and Use of Proceeds 21
Defaults upon Senior Securities 21
Submission of Matters to a Vote of Security Holders 21
Other Information 21
Exhibits and Reports on Form 6-K 21
Exhibit Index 21
Signatures 22
2
<PAGE>
<TABLE>
<CAPTION>
TOWNPAGESNET.COM PLC
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, JUNE 30, JUNE 30,
-----------------------------------------------------------
1999 2000 2000
----------------- ----------------- -----------------
Amounts in Pounds Sterling Amounts in
US Dollars
(Note 1)
(Unaudited)
------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents (pound) 647,035 (pound) 382,710 $ 579,040
Accounts receivable 5,355,865 3,328,637 5,036,227
Receivable from related party 5,542,477 4,676,696 7,075,840
Other receivables 274,225 836,383 1,265,447
Loan receivable 1,522,000 1,555,245 2,353,086
Prepaid expenses 127,116 365,232 552,596
Other current assets 215,500 394,696 597,174
----------------- ----------------- -----------------
Total current assets 13,684,218 11,539,599 17,459,410
Equipment and fixtures
Motor vehicles 169,025 160,163 242,327
Computer equipment 1,160,328 1,530,524 2,315,683
Furniture and fixtures 249,436 498,416 754,103
Equipment 1,932,077 2,666,012 4,033,676
----------------- ----------------- -----------------
3,510,866 4,855,115 7,345,789
Less accumulated depreciation 1,105,333 1,622,584 2,454,970
----------------- ----------------- -----------------
2,405,533 3,232,531 4,890,819
----------------- ----------------- -----------------
Intangible assets, net of
accumulated amortization of 12,771,196 11,979,843 18,125,503
(pound)2,279,603 ($3,449,039) ----------------- ----------------- -----------------
(pound)28,860,947 (pound)26,751,973 $ 40,475,732
================= ================= =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Book overdraft (pound) 299,749 (pound) 389,938 $ 589,976
Short term loan - 500,000 756,500
Accounts payable 2,638,837 3,014,404 4,560,793
Accrued expenses and other
liabilities 767,379 926,129 1,401,232
Taxes and social security payable 448,177 1,224,250 1,852,289
Deferred income 3,431,866 4,281,651 6,478,137
Current portion of obligations
under capital lease 139,414 342,450 518,127
Amounts payable under Web site
design 1,284,821 1,196,666 1,810,556
----------------- ----------------- -----------------
Total current liabilities: 9,010,243 11,875,488 17,967,610
Deferred income, long term portion 994,073 788,771 1,193,410
Long term portion of obligations
under capital lease 102,849 946,813 1,432,528
Minority interests 96,734 143,536 217,170
STOCKHOLDERS' EQUITY
Preferred stock 850,000 850,000 1,286,050
Ordinary shares 95,840 95,840 145,005
Additional Paid-In Capital 21,183,537 21,183,537 32,050,691
Accumulated other
comprehensive loss - (2,677) (4,050)
Accumulated deficit (3,472,329) (9,129,335) (13,812,682)
----------------- ----------------- -----------------
Total shareholders' equity 18,657,048 12,997,365 19,665,014
----------------- ----------------- -----------------
(pound)28,860,947 (pound)26,751,973 $ 40,475,731
================= ================= =================
See accompanying notes.
</TABLE>
3
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<TABLE>
TOWNPAGESNET.COM PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-----------------------------------------------------------------
1999 2000 2000
----------------- ----------------- -----------------
Amounts in Pounds Sterling Amounts in
US Dollars
(Note 1)
(Unaudited)
-----------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Advertising revenues (pound) 4,282 (pound) 2,121,222 $ 3,209,409
Contract revenues and other 3,462,578 423,910 641,375
Contract revenues from related
parties 399,103 656,974 994,002
----------------- ----------------- -----------------
Total revenues 3,865,963 3,202,106 4,844,786
COST OF REVENUES
Maintenance and hosting costs 352,201 746,356 1,129,237
Cost of contract revenues and other 2,202,534 1,123,032 1,699,148
Advertising and commission costs - 1,875,628 2,837,825
----------------- ----------------- -----------------
Total cost of revenues 2,554,735 3,745,016 5,666,210
GROSS PROFIT / (LOSS) 1,311,228 (542,910) (821,424)
OPERATING EXPENSES:
Sales and marketing 241,087 273,251 413,429
Research & development 172,329 286,122 432,902
General and administrative 377,711 2,586,203 3,912,925
Depreciation 35,408 516,334 781,214
Amortization - 1,422,968 2,152,951
----------------- ----------------- -----------------
Total operating expenses 826,535 5,084,878 7,693,421
INCOME (LOSS) FROM OPERATIONS 484,693 (5,627,788) (8,514,845)
Interest expense (56,523) (53,246) (80,561)
Interest income 69,116 27,434 41,507
Other income 1,021 1,782 2,697
Foreign exchange gain - 56,507 85,495
Minority interests - (61,694) (93,343)
----------------- ----------------- -----------------
INCOME (LOSS) BEFORE INCOME TAXES 498,307 (5,657,005) (8,559,050)
PROVISION FOR INCOME TAXES - - -
----------------- ----------------- -----------------
NET INCOME (LOSS) (pound) 498,307 (pound)(5,657,005) $ (8,559,050)
================= ================= =================
BASIC AND DILUTED NET INCOME
(LOSS) PER SHARE (pound) 0.09 (pound) (0.59) $ (0.89)
================= ================= =================
SHARES USED IN COMPUTING BASIC
AND DILUTED NET INCOME (LOSS) ----------------- ----------------- -----------------
PER SHARE 5,692,818 9,583,936 9,583,936
================= ================= =================
See accompanying notes.
</TABLE>
4
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<TABLE>
TOWNPAGESNET.COM PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
THREE MONTHS ENDED JUNE 30,
-----------------------------------------------------------
1999 2000 2000
----------------- ----------------- -----------------
Amounts in Pounds Sterling Amounts in
US Dollars
(Note 1)
(Unaudited)
-----------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Advertising revenues (pound) 2,184 (pound) 1,052,935 $ 1,593,091
Contract revenues and other 2,344,198 324,315 490,688
Contract revenues from related
parties 150,000 454,790 300,588
----------------- ----------------- -----------------
Total revenues 2,496,382 1,677,838 2,538,569
COST OF REVENUES:
Maintenance and hosting costs 219,521 420,375 636,028
Cost of contract revenues and other 1,372,802 961,062 1,454,087
Advertising and commission costs - 830,711 1,256,866
----------------- ----------------- -----------------
Total cost of revenues 1,592,323 2,212,148 3,346,981
GROSS PROFIT/(LOSS) 904,059 (534,310) (808,412)
OPERATING EXPENSES:
Sales and marketing 141,966 186,385 282,001
Research & development 141,458 174,110 263,428
General and administrative 167,240 1,326,184 2,006,516
Depreciation 19,421 286,641 433,689
Amortization - 735,004 1,112,062
----------------- ----------------- -----------------
Total operating expenses 470,085 2,708,324 4,097,696
INCOME (LOSS) FROM OPERATIONS 433,974 (3,242,634) (4,906,108)
Interest expense (13,971) (43,278) (65,480)
Interest income 68,534 9,743 14,741
Other income 978 (8,396) (12,702)
Foreign exchange gain - 44,372 67,134
Minority interests - (35,912) (54,335)
----------------- ----------------- -----------------
INCOME (LOSS) BEFORE INCOME TAXES 489,515 (3,276,105) (4,956,750)
PROVISION FOR INCOME TAXES - - -
NET INCOME (LOSS) (pound) 489,515 (pound)(3,276,105) $ (4,956,750)
================= ================= =================
BASIC AND DILUTED NET INCOME
(LOSS) PER SHARE (pound) 0.07 (pound) (0.34) $ (0.52)
================= ================= =================
SHARES USED IN COMPUTING BASIC
AND DILUTED NET INCOME (LOSS)
PER SHARE 6,378,022 9,583,936 9,583,936
================= ================= =================
See accompanying notes.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
TOWNPAGESNET.COM PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30,
-----------------------------------------------------------
1999 2000 2000
----------------- ----------------- -----------------
Amounts in Pounds Sterling Amounts in
US Dollars
(Note 1)
(Unaudited)
----------------------------------------------------------------
<S> <C> <C> <C>
Cashflows from operating activities
Net income (loss) (pound) 498,307 (pound) (5,657,005) $(8,559,050)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 35,408 516,334 781,213
Amortization of goodwill -- 1,422,968 2,152,951
Changes in operating assets and liabilities:
Account receivable (3,869,518) 2,027,228 3,067,197
Receivable from related party (117,500) 865,781 1,309,930
Interest due on loan receivable -- (33,245) (50,300)
Other receivables -- (562,157) (850,543)
Prepaid expenses and other current assets 611,458 (417,312) (631,391)
Accounts payable 506,404 7,897 11,948
Accrued expenses and other liabilities 1,409,229 (28,643) (43,337)
Taxes and social security payable -- 776,073 1,174,198
Deferred income -- 644,482 975,102
Amounts payable under Web site design agreements -- (88,155) (133,379)
--------------------------------------------------------------------
Net cash used in operating activities (926,212) (525,754) (795,461)
--------------------------------------------------------------------
Cash flows from investing activities
Purchases of property and fixtures (90,457) (978,339) (1,480,227)
Purchase of subsidiaries -- (444,223) (672,109)
--------------------------------------------------------------------
Net cash used in investing activities (90,457) (1,422,562) (2,152,336)
--------------------------------------------------------------------
Cash flows from financing activities
Repayment of debenture loan from stockholder (655,392) -- --
Proceeds from overdraft facility -- 90,189 136,456
Proceeds from short term loan -- 500,000 756,500
Net proceeds from issuance of ordinary shares 10,669,252 -- --
Proceeds from sale - leaseback transactions -- 1,067,271 1,614,778
Payments on capital lease obligations -- (20,271) (30,670)
Contributions from minority interests -- 46,802 70,811
--------------------------------------------------------------------
Net cash provided by financing activities 10,013,860 1,683,991 2,547,875
--------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 8,997,191 (264,325) (399,922)
Cash and cash equivalents at the beginning of the period 33,868 647,035 978,964
--------------------------------------------------------------------
Cash and cash equivalents at the end of the period (pound) 9,031,059 (pound) 382,710 $ 579,042
====================================================================
Supplemental disclosure of cash flow information
Interest paid -- (53,246) (80,561)
=================================================================
See accompanying notes.
</TABLE>
6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements apply to
the Company and its subsidiaries. All significant intercompany transactions and
balances have been eliminated upon consolidation.
The unaudited condensed consolidated financial statements have been prepared by
the Company and reflect all adjustments, which consist only of normal recurring
adjustments, which are, in the opinion of management, necessary for a fair
presentation of the interim periods presented. The results of operations for the
three months ended June 30, 2000, and six months ended June 30, 2000, are not
necessarily indicative of the results to be expected for any subsequent quarter
or for the entire year ending December 31, 2000. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with United States generally accepted accounting principles have been
condensed or omitted pursuant to the Securities and Exchange Commission's rules
and regulations. A condensed consolidated statement of comprehensive loss has
not been presented because the components of comprehensive loss are not
material.
The balance sheet at December 31, 1999 has been derived from the audited
financial statements on that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
These unaudited condensed consolidated financial statements and notes included
herein should be read in conjunction with the Company's audited consolidated
financial statements and notes included in the Company's Form 20-F for the year
ended December 31, 1999 as filed with the Securities and Exchange Commission on
April 14, 2000.
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. These financial statements
do not comprise the Company's "statutory accounts" within the meaning of Section
240 of the UK Companies Act 1985 ("the Act"). Statutory accounts for the year
ended December 31, 1999 have been delivered to the Registrar of Companies for
England and Wales.
The financial statements expressed in pounds sterling as of June 30, 2000 were
translated into U.S. dollars, solely for the convenience of the reader, at the
noon buying rate on June 30, 2000 of pound sterling 1 = $1.5130. These
translations should not be construed as representations that the pound sterling
amounts actually represent U.S. dollar amounts or that they could be converted
into U.S. dollars at the rate indicated or at any other rate.
USE OF ESTIMATES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
7
<PAGE>
REVENUE RECOGNITION
The Company's contract revenues are derived principally from services performed
under development contracts for the design, coordination, and integration of the
customer's content and links into the TownPages directory. Fees for these
services are recognized as the service is performed. These fees are recognized
as revenue once the related activities have been performed and/or the customer's
web links are available on the Town Pages directory.
Revenues from website design agreements are recognized using the percentage of
completion method where reliable estimates of costs to complete the contracts
are available. If reliable estimates of costs to complete are not available, the
completed contract method is used. There were no unbilled receivables as of June
30, 2000. Unbilled receivables were billed in accordance with billing schedules
specified in the contracts to which they relate.
The Company's advertising revenues are derived principally from short-term
advertising contracts which are recognized ratably over the term of the
contract. Certain advertising contracts contain a guaranteed number of
"impressions" (a view of an advertisement by a customer). To the extent that the
impression deliveries are falling short of the guarantees, the Company defers
recognition of the corresponding revenues.
Subscription revenues are for the set-up of customers on the TownPages
directory. These fees are recognized ratably over the term of the subscription
period, which is generally one year.
Deferred revenue is primarily comprised of payments received from web site
design contracts in advance of revenue recognition and billings in excess of
recognized revenue relating to advertising contracts.
CASH AND CASH EQUIVALENTS
The Company considers investments in highly liquid instruments purchased with an
original maturity of 90 days or less to be cash equivalents. Such amounts are
stated at cost, which approximates market value. As of June 30, 2000 the
Company's cash equivalents were comprised of pound sterling 382,710 ($579,042)
of bank deposits.
GOODWILL
The Company amortizes goodwill from the acquisitions of its subsidiaries on a
straight line basis over its estimated economic useful life of five years.
Goodwill is included under the caption Intangible Assets.
The Company operates in a highly technological industry with relatively low
entry market barriers. Due to the fast moving nature of the Internet market, the
Company does not believe that goodwill will have a useful economic life of more
than five years. The carrying value of goodwill will continually be reviewed for
impairment to ensure that the carrying value of the goodwill does not exceed its
recoverable amount.
NET INCOME (LOSS) PER SHARE
Basic and diluted net income (loss) per share is calculated using the weighted
average number of common shares outstanding. Diluted net income (loss) per share
is computed using the weighted average number of common shares outstanding and
dilutive common stock equivalents outstanding during the period.
8
<PAGE>
2. CONTINGENT CONSIDERATION
As part of the Buyersguide Limited acquisition agreement, the Company agreed to
pay to the former owners of Buyersguide Limited a sum equal to ten times the
amount, if any, by which the pretax income for the 12 months ending March 31,
2000, exceeds pound sterling 250,000, such contingent consideration to be paid
in the form of TownPages ordinary shares, calculated at US$8.60 per share. This
contingent consideration was satisfied on July 5, 2000 by the issue of 423,932
TownPages ordinary shares valued at approximately pound sterling 437,000
(approximately $663,000). This amount was recorded in goodwill and accrued
expenses and other liabilities as at June 30, 2000.
3. RELATED PARTY LOAN
On June 30, 2000, the Company has received a short term loan of pound sterling
500,000 ($756,500) from Kevin R. Leech, one of its directors and major
shareholders. The loan does not bear interest and is repayable from the future
proceeds of the sale of the Company's holding in Buyers Guide, (see subsequent
event note 5)
4. SEGMENTAL INFORMATION
Our businesses are organized, managed and internally reported as separate
services and products segments which are reportable under SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information".
We have determined that we have five principal businesses: (1) Town Pages which
which operates an interactive online local content network and develops
e-commerce channels, (2) WWW which is an internet provider of cinema information
and advertising services, (3) Morbria which provides web site design services,
(4) Buyers Guide which publishes the internet based Local Authority and Public
Service "Buyers Guide", and (5) Research Sales which is an internet based
polling and market research firm. In addition, those expenses not directly
attributal to any of the foregoing have been categorized (6) General Corporate.
This primarily comprises amortization of goodwill and certain head office osts.
9
<PAGE>
<TABLE>
<CAPTION>
BUSINESS SEGMENT INFORMATION
(pounds sterling in thousands)
Three months ended June 30, Six months ended June 30,
-------------------------- --------------------------
1999 2000 1999 2000
----------- ---------------- ---------- --------------
<S> <C> <C> <C> <C>
Net Sales
Town Pages 2,496 103 3,866 151
WWW - 564 - 1,170
Morbria - 696 - 1,358
Buyers Guide - 312 - 517
Research Sales - 3 - 6
General Corporate - - - -
----------- ---------------- ---------- --------------
Total Company 2,496 1,678 3,866 3,202
Operating income
Town Pages 434 (1,106) 485 (2,423)
WWW - (357) - (398)
Morbria - (93) - (59)
Buyers Guide - (54) - (116)
Research Sales - (616) - (896)
General Corporate - (1,016) - (1,735)
----------- ---------------- ---------- --------------
Total Company 434 (3,242) 485 (5,627)
Net interest income (expense) 55 (34) 12 (26)
Net other income (expense) 1 - 1 (4)
----------- ---------------- ---------- --------------
Income (Loss) before income taxes 490 (3,276) 498 (5,657)
</TABLE>
The above table is based on management estimates and includes differences to
U.S. generally accepted accounting principles, including estimates of costs and
allocation of overheads between divisions.
5. SUBSEQUENT EVENTS
On July 21, 2000, the Company agreed to purchase the remaining 25 per cent
minority shareholding in Centrix Communications Limited, a subsidiary of Morbria
Limited, one of our subsidiaries, from a director of Centrix Communications
Limited. The purchase price for those shares was paid in ordinary shares of
TownPages credited as fully paid having a value, as of July 21, 2000, nearest to
but not less than (pound)15,000, (approximately $22,700).
On July 24, 2000, the Company announced that its subsidiary, Buyers Guide Plc,
has been admitted to trade on the Alternative Investment Market ("AIM") of the
London Stock Exchange following the raising of approximately (pound)5 million
($7.6 million) from institutions at an offering price of (pound)0.29 ($0.44).
On the same date, the authorized capital of Buyers Guide was increased to
120,000,000 of which 87,250,000 was outstanding upon closing of the offering.
The Company agreed to sell 13,087,500 Ordinary Shares, representing 15 per cent
of the increased share capital, to Ci4net.com, Inc., a company in which one of
our directors and major shareholder, Kevin Leech, is chairman and a significant
shareholder, at the offering price. Under the terms of that agreement,
Ci4net.com, inc. is obligated to pay the consideration of approximately
(pound)3.80 million, (approximately $5.74 million), to the Company on or before
August 25, 2000.
Subsequent to the initial agreement, by mutual consent this transaction was
varied to a sale of 4,482,759 Ordinary Shares, representing 5.14 per cent of the
increased share capital.
A further 17,248,000 Ordinary Shares of Buyers Guide Plc, representing
approximately 19.8 per cent of the increased share capital of Buyers Guide Plc,
will be issued fully paid for cash pursuant to the offering to Institutions.
10
<PAGE>
Following the offering and admission to trading, the Company owns 65,519,241
Ordinary Shares of Buyers Guide Plc, representing approximately 75.1 per cent of
the increased share capital.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
We make certain forward-looking statements in this Form 6-K and in documents
incorporated by reference in this Form 6-K within the meaning of section 27A of
the Securities Act of 1933, as amended, and section 21E of the Securities
Exchange Act of 1934, as amended, relating to our financial condition,
profitability, liquidity, resources, business outlook, proposed acquisitions,
market forces, corporate strategies, contractual commitments, capital
requirements and other matters. The Private Securities Litigation Reform Act of
1995 provides a safe harbor for forward-looking statements. To comply with the
terms of the safe harbor, we note that a variety of factors could cause our
actual results and experience to differ substantially from the anticipated
results or other expectations expressed in our forward-looking statements. When
words and expressions such as: "believes," "expects, " "anticipates,"
"estimates," "plans," "intends," "objectives," "goals," "aims," "projects,"
"forecasts," "possible," "seeks," "may," "could," "should," "might," "likely,"
"enable," or similar words or expressions are used in this form 6-K, as well as
statements containing phrases such as "in our view," "there can be no
assurance," "although no assurance can be given," or " there is no way to
anticipate with any certainty," forward-looking statements are being made in all
of these instances. These forward-looking statements speak as of the date of
this Form 6-K.
Various risks and uncertainties may affect the operation, performance,
development and results of our business and could cause future outcomes to
differ materially from those set forth in our forward-looking statements,
including the following factors: our change in business strategy; the
renegotiation of our contract with NCR Limited; our growth strategies;
anticipated trends in the industry; our ability to enter into additional Web
site design contracts; our relationships with our customers; general market and
economic conditions; our ability to finance our future business requirements;
the ability to successfully integrate acquired companies and businesses;
management retention and development; changes in Federal and sate laws and
regulations; as well as the risks, uncertainties and other factors described
from time to time in our SEC filings and reports.
We undertake no obligation to publicly update or revise any forward-looking
statements as a result of future developments, events and conditions outside of
our control. New risk factors emerge from time to time and it is not possible
for us to predict all such risk factors, nor can we assess the impact of all
such risk factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ significantly from
those forecast in any forward-looking statements. Given these risks and
uncertainties, investors should not overly rely or attach undue weight to our
forward-looking statements as an indication of our actual future results.
OVERVIEW
We were incorporated in England and Wales on July 31, 1998 under the name
TownPages Holdings plc. We acquired all of the share capital of TownPages UK
Limited on December 15, 1998. Our name was changed to TownPagesNet.com plc in
April 1999.
We successfully completed our initial public offering on May 5, 1999, when we
sold American Depositary Shares representing 2,200,000 ordinary shares. The net
proceeds from that offering have primarily been used to make strategic
acquisitions to enhance our growth and provide working capital to roll out our
infrastructure expansion plans.
Our primary subsidiary, TownPages UK Limited, provides new media related
services to both consumers and businesses. Its business is divided into four
inter-related
11
<PAGE>
segments: the TownPages information service which provides
comprehensive, up-to-date, locally-focused information about specified towns and
cities in the United Kingdom; the TownPages touch-screen kiosks; Web channels
and Website design services; and business-to-business new media services.
Since our initial public offering, we have completed four acquisitions of
companies we believe present significant opportunities in addition to offering
technologies and/or expertise complementary to our business. The first three
acquisitions were of UK companies. The fourth company acquired is a US company.
In July 1999, we completed the acquisition of the WWW.CO.UK Limited group of
companies. The WWW.CO.UK Limited companies provide cinema-related services from
Web site design through indoor cinema advertising. The acquisition strengthened
our sales personnel resources and also provided local community content for our
TownPages information service. For the three months ended June 30, 2000, the
WWW.CO.UK Limited group of companies contributed pound sterling 563,799
($853,028) to net revenues, slightly down compared to pound sterling 605,853 for
the three months ended March 31, 2000. WWW's revenues are significantly impacted
by the revenue recognition policies as all their contracts are for a period of
two to three years. New orders during the quarter ended June 30, 2000 were
approximately pound sterling 589,000 (approximately $891,000).
In September 1999, we completed the acquisition of Morbria Limited and its
subsidiaries. Morbria and its subsidiaries provide Website design, advertising,
marketing and communications services. The Morbria acquisition had the effect of
doubling our Web site design personnel. For the three months ended June 30,
2000, the Morbria Limited group of companies contributed pound sterling 696,052
($1,053,127) to net revenues compared to pound sterling 661,992 for the three
months ended March 31, 2000.
In October 1999, we acquired Buyersguide Limited, an Internet-based
business-to-government company. For the three months ended June 30, 2000,
Buyersguide Limited contributed pound sterling 312,674 ($473,076) to net
revenues compared to pound sterling 204,754 for the three months ended March 31,
2000, an increase of 53%. For accounting revenue recognition purposes, these
advertising contracts are recognized ratably over the term of contracts, in this
case the vast majority are one year contracts.
In November 1999, we acquired Research Sales, Inc. Research Sales is an online
polling and market research company. Our kiosks and Website provide additional
opportunities for data collection for the Research Sales, Inc. Portrait of
America website. We also intend to develop a Portrait of the UK website with
Research Sales that would in turn provide additional content for our TownPages
information service. Research Sales, Inc. is an early stage company and
contributed pounds sterling 2,858 ($4,324) in the three months ended June 30,
2000, similar to its revenues for the three months ended March 31, 2000.
Our stated net loss for the three months ended June 30, 2000 is after a charge
of pound sterling 735,004 ($1,112,062) arising from amortization of goodwill
arising from these acquisitions compared to pounds sterling 687,964 in the three
months ended March 31, 2000. Amortization of goodwill for the six months ended
June 30, 2000 therefore totals pound sterling 1,422,968. The quarter on quarter
increase arises from amortization on the additional earn outs as detailed in
footnote 3 to the financial statements.
A significant proportion of the reported loss for the six months ended June 30,
2000 has been incurred by our Town Pages UK Limited subsidiary. Our new Chief
Executive Officer, Robert Bradshaw, who was appointed in April 2000, has
initiated a complete review of operations of this subsidiary which will result
in, among other things, the formulation of a revised business plan.
As previously reported, we have scaled back the Town Pages kiosk roll-out
program. As of July 31, 2000, 182 TownPages touch-screen kiosks were installed
and operating in various locations throughout the United Kingdom, up from 108 as
at April 30, 2000. This remains the largest Wide Area Kiosk network in the
United Kingdom. We anticipate having 255 kiosks fully operational in the short
term. We continue to aggressively pursue new arrangements with commercial third
parties to
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generate revenues and to provide us a high-profile base from which to
market our services.
As also previously indicated, greater emphasis is being placed upon our Website
design services. We have recently entered into agreements with the National
Trust, (Britain's principal conservation body), initially to redesign their
existing Web site. We were selected from eighteen new media competitors who bid
for the contract.
We have continued to redefine the back-end design of the channels with regard to
our existing Web channel development contracts, with a view to their continuing
commercial viability. As a result, we have decided to not recognize any revenue
in connection with these channels during the quarter ended June 30, 2000. Our
initial conclusion is that these channels may not be sufficiently commercially
viable for Town Pages UK in the longer term.
As a consequence, it is likely that we may seek to terminate the existing Web
channels design services contracts, subject to a suitable financial resolution,
which would enable us to concentrate on the more lucrative and higher margin
e-business solutions development business.
We also hold a minority interest in UKPropertyChannel.com Limited, which
provides a portal for estate agents (realtors) in the UK and Ireland. Currently,
UKPropertyChannel has mostly exclusive three year notice contracts with over
2,000 realtors to provide them with e-commerce solutions. Under these
agreements, UKPropertyChannel has the rights to include all properties on the
UKPropertyChannel national property Website. The national Website currently has
approximately 900 of these branches live and a database of approximately 40,000
properties. Revenues will be obtained from the contractual rights to sell banner
advertising within the sites. Advertising sales commenced in February 2000, and
orders have totaled approximately pound sterling 650,000 ($983,000).
Ongoing negotiations which are likely to increase our equity stake in
UKPropertyChannel.com Limited are still taking place. Our ownership interest is
currently accounted for under the cost method of accounting.
It is anticipated that we may incur net losses for the foreseeable future as we
continue to accelerate our development program. Performance will depend, in
part, on the amount and rates of growth in our net revenue from Website design
services and advertising. We expect operating expenses to increase, especially
in the areas of corporate governance and sales and marketing including brand
promotion. To the extent that these expenses are not accompanied by an increase
in net revenue and positive cash flows from operations, our business, results of
operations, and financial condition could be materially adversely affected. We
will need to increase our quarterly net revenue to achieve profitability. We
believe that period-to-period comparisons of our operating results are not
meaningful and that you should not rely upon the results for any period as an
indication of future performance.
EFFECT OF VARIOUS ACCOUNTING METHODS ON OUR RESULTS OF OPERATIONS
To date, the Company's ownership interests in its partner companies are
accounted for under one of two methods: the consolidation method or the cost
method.
Consolidation method: Partner companies in which we directly or indirectly own
more than 50% of of the outstanding voting securities are accounted for under
the consolidation method of accounting. Under this method, a partner company's
results of operations are reflected within our Consolidated Statements of
Operations from the date of acquisition. This applies to all the acquisitions
detailed above.
Cost method: Companies in which we have minority investments that are not
accounted for under the consolidation method of accounting are accounted for
under the cost method of accounting. Under this method, our share of the
earnings or losses of these companies is not included in our Consolidated
Statements of Operations. This applies only to UKPropertyChannel Limited.
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Much of our revenues are derived from contracts which span a period of time. As
detailed in footnote 1 to the financial statements, we recognize the revenues
ratably over the term of the contracts. For TownPages UK Limited and
Buyersguide, this is generally over one year. For WWW, this is generally over
two or three years. Conversely, the corresponding costs are recognized as they
are incurred.
The deferred income figures, short-term and long-term, as stated in the Balance
Sheet, give an indication of the revenues not yet recognized in the Statement of
Operations.
RESULTS OF OPERATIONS
The following table presents certain consolidated statement of operations
data for the periods indicated as a percentage of total net revenue.
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1999 2000 1999 2000
---- ---- ---- ----
Total revenues: .......................... % % % %
Advertising ........................... -- 63 -- 66
Contract & Other Revenues ............. 94 19 90 13
Contract Revenues from Related Parties 6 18 10 21
---- ---- ---- ----
Total revenues ........................... 100 100 100 100
Cost of revenues:
Maintenance & Hosting Costs ........... 9 25 9 23
Cost of Contract Revenue & Other ...... 55 57 57 35
Advertising and commission costs ...... -- 50 -- 59
---- ---- ---- ----
Total Cost of revenue .................... 64 132 66 117
---- ---- ---- ----
Gross profit ............................. 36 (32) 34 (17)
Operating expenses:
Research and development .............. 6 11 6 8
Sales and marketing ................... 5 10 4 9
General and administrative ............ 7 79 10 81
Depreciation .......................... 1 17 1 16
Amortization .......................... -- 44 -- 45
---- ---- ---- ----
Total Operating expenses ................. 19 161 21 159
---- ---- ---- ----
Net Income/Loss from operations .......... 17 (193) 13 (176)
Interest income .......................... 3 1 2 1
Interest expense ......................... -- (3) (2) (2)
Other income ............................. -- (1) -- --
Foreign exchange gain .................... -- 3 -- 2
Minority interests ....................... -- (2) -- (2)
---- ---- ---- ----
Net Income/Loss .......................... 20% (195)% 13% (177)%
==== ==== ==== ====
NET REVENUE
Total net revenue for the three months ended June 30, 2000 was (pound)1,677,838,
($2,538,569), a decrease of (pound)818,544, over revenues of (pound)2,496,382
for the three months ended June 30, 1999.
Total net revenue for the six months ended June 30, 2000 was (pound)3,202,106,
($4,844,786), a decrease of (pound)663,857 over revenues of (pound)3,865,963 for
the six months ended June 30, 1999.
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It is unrealistic to compare results from the two years. The figures to June 30,
1999 almost entirely comprise revenues from the Web channel development
contracts. As detailed above, we have not recognized revenues from these
contracts in the six months ended June 2000. The revenues reported this year
consist roughly two thirds advertising sales and one third web design services.
A more appropriate comparison would be the quarter ended June 30, 2000 compared
to the quarter ended March 31, 2000, where net revenues increased by
(pound)153,570 ($232,352) or approximately 10%.
As described earlier, our advertising sales are recognized ratably over the term
of the contracts. We expect our reported revenues to increase in future
quarters, partly as a result of deferred income being released to reported
revenues.
ADVERTISING REVENUE
Advertising revenue increased to (pound)1,052,935, ($1,593,091) in the three
months ended June 30, 2000 from (pound)2,184 in the three months ended June 30,
1999 and in the six months ended June 30, 2000 increased to (pound)2,121,222,
($3,209,409) from (pound)4,282 in the six months ended June 30,1999.
The increase was mainly due to the inclusion in fiscal 2000 of results from each
of the acquisitions. We anticipate that advertising revenues will increase in
the future for the reasons outlined in Net Revenue above.
CONTRACT REVENUE AND OTHER
Contract and other revenues decreased to (pound)624,903, ($945,478), of which
(pound)300,588, ($454,790), are with related parties, for the 3 months ended
June 30 2000, from (pound)2,494,198 for the same 3 month period ended June 30,
1999. In the six months ended June 30, 2000, contract and other revenues fell to
(pound)1,080,884, ($1,635,377), of which (pound)656,974, ($994,002), are with
related parties, from (pound)3,861,681, for the same six month period ended June
30, 1999.
As described above, we have not recognized any revenues in connection with the
Web channel development contracts during fiscal 2000. This contrasts with the
six months ended June 30, 1999, where virtually all of the reported revenues
were derived from the channels contracts. All contract revenues reported for the
six months ended June 30, 2000 were derived from Web site design services.
We expect our contract revenues to increase as we refocus our Town Pages UK
Limited subsidiary in this area, although the increase may not filter through in
the next reporting quarter.
MAINTENANCE AND HOSTING COSTS
Maintenance and hosting costs consist primarily of Internet connection charges,
Web site equipment leasing costs, repair and maintenance of equipment and
systems, collection, development, and processing for display on Town Pages of
locally-focused content.
Maintenance and hosting costs increased to (pound)420,375, ($636,028), for the 3
months ended June 30, 2000, from (pound)219,521 for the 3 months ended June 30,
1999. In the 6 months ended June 30, 2000, Maintenance and hosting costs
increased to (pound)746,356, ($1,129,237), from (pound)352,201, for the 6 months
ended June 30, 1999.
The increase is attributable to two main factors. Firstly, the fiscal 2000
figures include costs associated with the subsidiaries. These subsidiaries were
not acquired until the second half of 1999 and do not, therefore, appear in the
1999 comparative figures. Secondly, we have rolled out an additional 74
TownPages kiosks during the quarter ended June 30, 2000. We anticipate that
these costs will continue to grow in absolute amounts for the foreseeable future
as we pursue our expansion plans and continue to roll out kiosks.
COSTS OF CONTRACT REVENUES AND OTHER
Cost of contract and other revenues consists primarily of certain Web site
design costs and related operating costs.
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Cost of contract and other revenues decreased to (pound)961,062, ($1,454,087),
for the 3 months ended June 30, 2000 from (pound)1,372,802 for the 3 months
ended June 30, 1999. In the 6 months ended June 30,2000, Cost of contract and
other revenues decreased to (pound)1,123,032, ($1,699,148) from (pound)2,202,534
in the 6 months ended June 30, 1999.
The decrease was due to the corresponding revenues not being recognized in
respect of the Web channel development operations as detailed above.
ADVERTISING AND COMMISSION COSTS
Advertising and commission costs consist primarily of the salaries and related
costs, including commission, of direct sales staff.
Advertising and commission costs amounted to (pound)830,711, ($1,256,866), for
the 3 months ended June 30, 2000 and (pound)1,875,628, ($2,837,825), for the 6
months ended June 30, 2000. There was no corresponding cost in 1999 as these
costs arise from the recently acquired subsidiaries.
Unlike the advertising revenue which is deferred over the period of the
contract, all direct costs are recognized up front. We would expect these costs
to grow in absolute terms in the future as the expansion plans of the
subsidiaries are actively pursued.
SALES AND MARKETING EXPENSES
Sales and marketing expenses consist primarily of salaries of marketing
personnel, advertising and other marketing related expenses. Sales and marketing
expenses also include personnel costs and costs associated with our advertising
and telesales campaigns in the United Kingdom.
Sales and marketing expenses increased to (pound)186,385, ($282,001) for the 3
months ended June 30, 2000, from (pound)141,966 for the 3 months ended June 30,
1999. In the 6 months ended June 30, 2000, Sales and marketing expenses
increased to (pound)273,251, ($413,429) from (pound)241,087, in the 6 months
ended June 30, 1999.
Unlike 1999, the 2000 figures include costs associated with all the
subsidiaries. We expect that sales and marketing expenses will grow in the
foreseeable future as we pursue our expansion and branding strategy and hire
additional sales and marketing personnel.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses include expenses associated with the
development of services, products and our Web site and consist principally of
personnel costs. These costs have been charged to research and development
expenses as incurred.
Research and development expenses increased to (pound)174,110, ($263,428), for
the 3 months ended June 30, 2000, from (pound)141,458 for the 3 months ended
June 30, 1999. In the 6 months ended June 30, 2000, Research and development
expenses increased to (pound)286,122, ($432,902) from (pound)172,329 in the 6
months ended June 30, 1999.
The increase in research and development expenses was primarily due to the
attendant increases in the number of personnel involved in the development of
each of the companies within the group's own Websites, in particular our
Research Sales, Inc. subsidiary which is still at a developmental stage.
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of salaries and related
costs for general corporate functions, including finance, accounting and IT,
facilities and legal and other fees for professional services.
General and administrative expenses increased to (pound)1,326,184, ($2,006,516),
in the 3 months ended June 30, 2000, from (pound)167,240 for the 3 months ended
June 30, 1999. In the 6 months ended June 30,2000, General and administrative
expenses increased to (pound)2,586,203, ($3,912,925), from (pound)377,711 in the
6 months ended June 30, 1999.
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The increase in general and administrative expenses was primarily due to the
inclusion of the recently acquired subsidiaries, and also increases in the
number of personnel to support the growth of our business, increases in
recruiting costs related to filling key senior executive positions and costs
associated with the increase in professional fees required for SEC and general
corporate governance purposes. We expect that we will incur additional general
and administrative expenses for the foreseeable future as we hire additional
personnel and incur additional expenses related to the growth of the business
and our operations as a public company.
DEPRECIATION AND AMORTIZATION EXPENSES
Depreciation and amortization expenses increased to (pound)1,021,645,
($1,545,751), for the 3 months ended June 30, 2000, from (pound)19,421 for the 3
months ended June 30, 1999. In the 6 months to June 30, 2000, Depreciation and
amortization expenses increased to (pound)1,939,302, ($2,934,165), from
(pound)35,408 in the 6 months to June 30, 1999.
Of the charge for the 3 and 6 month periods ended June 30, 2000, amortization of
goodwill arising from the acquisitions was (pound)735,004 and (pound)1,422,968
respectively. There was no equivalent in 1999.
The increase in the depreciation of fixed assets has principally arisen from the
charge on assets acquired with the subsidiaries, the greater number of kiosks
purchased and installed, and the development of our data centers. We expect this
cost to increase further in the future as we roll out more kiosks and continue
to develop our infrastructure.
INTEREST AND OTHER INCOME/EXPENSE, NET
Interest and other income/expense, net includes income from our cash and
investments and expenses related to our financing obligations.
Interest and other expense, net amounted to a net expense of (pound)41,931,
($63,441), for the 3 months ended June 30, 2000, compared to net income of
(pound)55,541 for the 3 months ended June 30, 1999. For the 6 months ended June
30, 2000, the net expense was (pound)24,030, ($36,357), compared to net income
of (pound)13,614 for the 6 months ended June 30, 1999.
The turnaround is primarily due to two factors. Our initial public offering took
place in the second quarter of 1999 and we had substantial funds on deposit at
that time. Additionally, in the first half of 2000, we have entered into finance
leases to fund the purchase of equipment.
We would expect the net expense to increase as we carry interest on the finance
leases for complete periods going forward.
FOREIGN EXCHANGE GAIN
In the 3 and 6 month periods to June 30, 2000, the foreign exchange gains
amounted to (pound)44,372, ($67,134), and (pound)56,507, ($85,495),
respectively. There was no equivalent in the prior year.
The gains resulted from an appreciation in the US dollar rate against the pound
sterling during the period. We do not anticipate similar one off gains or losses
in the foreseeable future.
NET LOSS
Due primarily to,
a) the realignment of the Web channels development strategy and consequent non
recognition of revenue from that source,
b) high goodwill amortization charge resulting from our acquisitions,
c) the continued start up development of our Research Sales, Inc. subsidiary,
and
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d) the accounting policies adopted with regard to advertising sales, whereby we
spread the revenues over the period of the contracts but recognize costs up
front,
we have recorded a net loss of (pound)3,276,105, ($4,956,750), for the 3 months
ended June 30, 2000, and (pound)5,657,005, ($8,559,050), for the 6 months ended
June 30, 2000, as opposed to net profits of (pound)489,515 and (pound)498,307 in
the corresponding periods in 1999.
We anticipate that losses may continue to arise on an annual and quarterly basis
for the foreseeable future. Items b) and d) above will continue to impact
adversely upon our results. Resolutions to items a) and c) above may impact
favorably upon our results at some stage in the future.
We expect to make an operating loss in the three months ended September 30,
2000, but a net profit due to the income from a partial sale of our investment
in our Buyersguide subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
Prior to our initial public offering, we financed our operations primarily
through loans from Glen Investments, an investment vehicle owned by Kevin Leech,
a significant stockholder and one of our directors. On May 5, 1999, we completed
our initial public offering of American Depositary Shares representing 2,200,000
shares of our common stock. Proceeds from the offering were (pound)10,708,677
net of offering costs. At June 30, 2000, we had cash and cash equivalents and
short-term investments of approximately (pound)382,710, ($579,042), as compared
to (pound)647,035 at December 31, 1999.
TownPages does not use derivative financial instruments in its investment
portfolio. TownPages considers investments in highly liquid instruments
purchased with an original maturity of 90 days or less to be cash equivalents.
Net cash used in operating activities for the six months ended June 30, 2000 and
1999 was (pound)525,754, ($795,461) and (pound)926,212 respectively. Cash used
in operating activities in the 6 months ended June 30, 2000 was primarily the
result of the substantial operating loss incurred offset to a great extent by a
large reduction in accounts receivable as we collected in much of the
outstanding debts on the Web channel contracts.
Net cash used in investing activities for the six months ended June 30, 2000 and
1999 was (pound)1,422,562, ($2,152,336), and (pound)90,457 respectively. Cash
used in investing activities in the 6 month period ended June 30, 2000 was
primarily related to the purchase of further kiosks and the completion of our
data centers. We also paid contingent consideration of (pound)250,000,
($378,250), with regard to our WWW subsidiary. From time to time, we expect to
evaluate the acquisition of products, businesses and technologies that
complement our business. These acquisitions may involve cash investments.
Net cash provided by financing activities for the six months ended June 30, 2000
and 1999 was (pound)1,683,991, ($2,547,875), and (pound)10,013,860 respectively.
Cash provided by financing activities in the 6 months ended June 30, 1999 was
primarily attributable to net proceeds from the issuance of common stock.
Cash provided by financing activities in the 6 months ended June 30, 2000 was
largely the result of sale-leaseback transactions entered into in order to
finance some of the kiosks and a short term loan received from one of our
significant stockholders and directors.
If cash generated by operations is insufficient to satisfy our liquidity
requirements, we may need to sell additional equity or debt securities or obtain
additional credit facilities. The sale of additional equity or convertible debt
securities may result in additional dilution to our stockholders. We may not be
able to raise any such capital on terms acceptable to us or at all.
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DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk is principally confined to our short-term
available-for-sale securities, which have short maturities and, therefore,
minimal and immaterial market risk.
EFFECTS OF THE EURO
Under the terms of the Treaty on European Economic and Monetary Union, as of
January 1, 1999, the euro was introduced as a common currency among the eleven
members of the European Union that are participating in this phase of European
Economic and Monetary Union, commonly referred to as EMU. Although the
individual currencies of these countries will continue to be used until the end
of 2001, their exchange rates with the euro are fixed. The Euro is now being
used for transactions that do not involve payment using physical notes and coins
of the participating countries. The individual currencies will be replaced with
euro notes and coins at the start of 2002 when all countries participating in
the EMU are expected to operate with the euro as their exclusive common
currency.
The current government of the United Kingdom has stated that the United
Kingdom will not participate in EMU and adopt the euro until after the next
general election, at the earliest. We are currently working on the assumption
that the next general election will be in 2001 or 2002 and that the United
Kingdom will enter the EMU shortly thereafter following confirmation of the
government's decision through a referendum.
We do not currently operate in any countries that have adopted the euro and we
therefore do not face a significant currency or competitive exposure to the
euro. However, in the future we may expand into a number of these countries.
In the event that the United Kingdom adopts the euro, we would face a number
of costs in altering our accounting-related systems for the new currency,
although at present it is too early to estimate what these costs might be.
Adoption of the euro in the United Kingdom would also create greater
transparency between prices offered to our customers in different countries that
participate in EMU.
A significant amount of uncertainty exists as to the effect that the euro
will have on the marketplace. We are assessing the effect that the euro
introduction will have on our internal systems and the sale of our products and
services. We expect to take appropriate actions based on the results of this
assessment. Currently, we do not believe that the adoption of the euro by eleven
countries of the European Union will have an adverse impact on our liquidity or
financial condition.
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OTHER INFORMATION
LEGAL PROCEEDINGS
None
CHANGES IN SECURITIES AND USE OF PROCEEDS
None
DEFAULTS UPON SENIOR SECURITIES
None
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
OTHER INFORMATION
None
EXHIBITS AND REPORTS ON FORM 6-K
(a) Exhibits
Exhibit Number Description
------------- -----------
27.1 Financial Data Schedule
(b) Reports on Form 6-K
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 6-K to be signed on its behalf by
the undersigned thereto duly authorized.
Dated:
REGISTRANT:
TOWNPAGESNET.COM PLC
By: /s/Robert P. Bradshaw
-------------------------
Robert P. Bradshaw
Chief Executive Officer
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