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: August 15, 2000
(Date of earliest event reported: August 14, 2000)
NetNation Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-26881 33-0803438
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
Suite 1410 - 555 West Hastings Street, Vancouver, British Columbia, V6B 4N6
(Address of principal executive offices) (Zip Code)
(604) 688-8946
(Registrant's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
Item 5. OTHER EVENTS.
On August 14, 2000, NetNation Communications, Inc. issued a press release
announcing its financial results for the second quarter of 2000. A copy of the
press release is attached hereto as Exhibit 99.1 and incorporated by reference
herein.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibit.
Exhibit 99.1 Press release dated August 14, 2000.
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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.
NETNATION COMMUNICATIONS INC.
By: /s/ Glen Ibbott
-----------------------------
Glen Ibbott
Chief Financial Officer
Dated: August 15, 2000
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Exhibit Index
Exhibit No. Description
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99.1 Press Release issued by the Registrant dated August 14, 2000
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EXHIBIT 99.1
NEWS RELEASE
NetNation Reports Second Quarter Results
14th Consecutive Quarter of Revenue Growth
Revenue Up 194% From Q2 1999
Vancouver, BC and San Diego, CA - August 14, 2000. NetNation Communications,
Inc., (Nasdaq: NNCI), a global top-ranked Web Site Hosting company, Domain Name
----
Registrar (DNR) and Application Service Provider (ASP), announced today second
quarter financial results for operations ended June 30, 2000.
The Company continues to generate positive cash flow from operations - while
carrying no debt. Second quarter 2000 revenues were $1,423,387, an increase of
194% over second quarter 1999 revenue of $484,308 and a slight increase from
first quarter 2000 revenue of $1,414,732. Total deferred revenue at the end of
the second quarter increased by 50% to $1,264,619 over first quarter 2000
deferred revenue of $844,050.
"Throughout this quarter, we re-positioned the Company to focus on strategic
initiatives that will provide the foundation for strong future growth," stated
Ashley Sinclair, CEO of NetNation Communications, Inc. "We have revamped our
hosting products creating vertical market appeal, undertaken a corporate
identity review, and changed our marketing mix with the goal of attaining a
formidable leadership position in the marketplace. Furthermore, DomainPeople,
Inc., our domain name registration subsidiary, has been developing a number of
offerings to become positioned as the preferred domain name registration partner
for larger domain name registrants. We fully expect to realize strengthened
performance as a result of these actions."
Added Mr. Sinclair, "We continued to build important strategic alliances with
industry leaders globally, and have added key personnel to propel and guide our
present and future growth. We've made excellent progress in identifying
investment opportunities which will enable us to become a much larger player in
both web hosting and domain registration. The team is clearly focused on
achieving outstanding performance based on providing service and technical
excellence to our chosen market segments. Our team is now well structured
and ready to aggressively pursue market share."
Second Quarter and Recent Highlights Include:
* Channel partnership established with GT Group Telecom, a telecommunications
provider (Nasdaq: GTTLB, TSE: GTG.B) to resell our e-commerce web hosting
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packages, dedicated server hosting, and domain name registration services.
* An Intel ISP Program member, providing our award-winning web site hosting
and domain registration services to Intel Corporation's (Nasdaq: INTC)
----
Channel Members.
* Partnered with icChina.com, a Hong Kong based eBusiness portal and community
network, to expand our domain registration and web hosting services to
Chinese markets.
* New Reseller Program launched to accelerate the growth of our worldwide
reseller network. Among the first Web hosts to offer domain registration
discounts as part of a hosting reseller program.
* The Company's web site was redesigned to make it more user-friendly and to
promote our new branding and corporate positioning.
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About NetNation Communications, Inc.
NetNation Communications, Inc. (http://www.netnation.com) is a global top-ranked
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Web Site Hosting company, Domain Name Registrar (DNR) and Application Service
Provider (ASP) with clients in more than 130 countries. NetNation has been
consistently ranked among the top 10 Web hosting companies in the world by
leading industry evaluators. The Company's wholly owned subsidiary,
DomainPeople, Inc. (http://www.domainpeople.com) is an ICANN accredited and
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operational registrar of Internet domain names. NetNation has strategic
alliances with Cobalt Networks Inc. (Nasdaq: COBT), GT Group Telecom (Nasdaq:
----
GTTLB, TSE: GTG.B) and SmartAge.com. The Company has offices in San Diego, CA,
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Vancouver, BC, and London, England. NetNation is a trademark of NetNation
Communications, Inc.
Disclaimer: In this news release, the words "will", "future", and similar
conditional or future-oriented expressions are intended to identify
forward-looking statements. Such statements are inherently subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those reflected in such forward-looking statements.
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NETNATION COMMUNICATIONS, INC.
Consolidated Balance Sheets
(Expressed in U.S. dollars)
June 30, December 31,
2000 1999
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(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,640,450 $ 988,077
Accounts receivable 173,695 10,961
Prepaid expenses and deposits 162,427 63,208
Prepaid domain name registration fees 412,744 -
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3,389,316 1,062,246
Prepaid domain name registration fees,
non current portion 100,019 -
Fixed assets, net of accumulated depreciation
of $298,125 (1999 - $134,885) 1,398,444 455,919
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$ 4,887,779 $ 1,518,165
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 687,748 $ 189,146
Deferred revenue 1,099,850 400,007
Customer deposits 88,914 -
Debentures payable - 1,100,000
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1,876,512 1,689,153
Deferred revenue, non current portion 164,769 -
Stockholders' equity (deficit):
Common stock
Authorized:
50,000,000 common shares with a par value of
$0.0001 each
Issued:
15,407,000 (December 31, 1999 - 14,607,000)
common shares 1,541 1,461
Additional paid-in capital 5,787,810 2,339,471
Deferred compensation (825,800) (1,015,466)
Deficit (2,131,654) (1,511,055)
Accumulated other comprehensive income 14,601 14,601
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2,846,498 (170,988)
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$ 4,887,779 $ 1,518,165
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NETNATION COMMUNICATIONS, INC.
Consolidated Statements of Operations and Deficit
(Expressed in U.S. dollars)
Three months ended June 30, Six months ended June 30,
2000 1999 2000 1999
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues $ 1,423,387 $ 484,308 $ 2,838,119 $ 910,199
Operating costs
and expenses
Cost of revenues 499,114 147,420 894,192 266,876
Sales and
marketing 597,269 338,296 1,280,229 532,735
Office and
administrative 686,683 225,026 1,113,608 332,100
Depreciation and
amortization 103,407 16,018 158,867 19,373
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1,886,473 726,760 3,446,896 1,151,084
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Loss from operations 463,086 242,452 608,777 240,885
Other income
(expense), net 1,572 (31,448) (11,822) (33,924)
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Loss for the period 461,514 273,900 620,599 274,809
Deficit, start
of period 1,670,140 157,477 1,511,055 156,568
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Deficit, end
of period $ 2,131,654 $ 431,377 $ 2,131,654 $ 431,377
========== ========== ========== ==========
Loss per share,
basic and diluted $ 0.03 $ 0.03 $ 0.04 $ 0.03
========== ========== ========== ==========
Weighted average
number of common
shares outstanding,
basic and diluted 15,407,000 10,397,033 15,179,928 9,950,994
========== ========== ========== ==========
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NETNATION COMMUNICATIONS, INC.
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
Six month Six month
period ended period ended
June 30, December 31,
2000 1999
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(unaudited) (audited)
ASSETS
Cash flows from operating activities:
Net loss $ (620,599) $ (274,809)
Items not involving cash:
Depreciation and amortization 158,867 19,373
Amortization of deferred compensation 189,666 -
Change in operating assets and liabilities:
Accounts receivable (162,734) (42,692)
Prepaid expenses and deposits (99,219) (15,462)
Prepaid domain name registration fees (512,763) -
Accounts payable and accrued liabilities 498,602 263,274
Deferred revenue 864,612 223,026
Customer deposits 88,914 -
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Net cash provided by operating activities 405,346 172,710
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Cash flows from investing activities:
Acquisition of fixed assets (1,101,392) (394,210)
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Net cash used in investing activities (1,101,392) (394,210)
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Cash flows from financing activities:
Proceeds from sale of common stock, net of
offering costs 2,348,419 888,256
Issue of Series A Convertible Debentures - 1,100,000
Repurchase of shares - (10,204)
Stock redemption premium paid - (24,060)
Payable to stockholders - 10,625
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Net cash provided by financing activities 2,348,419 1,964,617
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Net increase in cash and cash equivalents 1,652,373 1,743,117
Cash and cash equivalents, beginning of period 988,077 23,099
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Cash and cash equivalents, end of period $ 2,640,450 $ 1,766,216
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Supplemental disclosure:
Non-cash transaction
Conversion of debentures into common stock $ 1,100,000 $ -
Cash paid for
Interest $ 142 $ 1,958
Contact: John Gomez Marina Giokas
Investor Relations Media Relations
Tel. 888 277 0000 Ext. 133 Tel. 888 277 0000 Ext. 188
[email protected] [email protected]
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