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: May 15, 2000
(Date of earliest event reported: May 15, 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.)
0
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)
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Item 5. OTHER EVENTS.
On May 15, 2000, NetNation Communications Inc. issued a press release
announcing its financial results for the first 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 May 15, 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
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Glen Ibbott
Chief Financial Officer
Dated: May 15, 2000
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Exhibit Index
Exhibit No. Description
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99.1 Press Release issued by the Registrant dated May 15, 2000
<PAGE>
EXHIBIT 99.1
NEWS RELEASE
NetNation(TM) Reports 43% Revenue Increase In First Quarter
13th Consecutive Record Quarter
Revenue Up 232% From Q1 1999
San Diego, CA - May 15, 2000. NetNation Communications, Inc. (Nasdaq: NNCI), an
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international domain name registrar (DNR), Web site host, and Application
Service Provider (ASP), announced today first quarter financial results for
operations ended March 31, 2000.
NetNation continues to post record quarterly revenue results. For the first
quarter of 2000, revenue was $1,414,732, an increase of 232% over first quarter
1999 revenue of $425,891, and a 43% increase over fourth quarter 1999 revenue of
$989,485. Total deferred revenue at the end of the first quarter of 2000 was
$844,050, representing a 111% increase over the deferred revenue of $400,007 at
the end of the fourth quarter of 1999.
"We have produced exceptionally strong back to back quarters of revenue growth,"
stated Ashley Sinclair, CEO of NetNation Communications, Inc. "Financially our
business is strong as we are generating positive cash flow from operations and
have no debt. We are committed to continuing our record performance and are
exploring investment opportunities to significantly increase our hosting
accounts and registered domains."
"Our revenue almost doubled over the fourth quarter of 1999, which in itself was
a record quarter," said Mr. Sinclair. "However, following industry practice, we
have deferred most of our DNR revenue to our balance sheet which we will
recognize over the term of the various registration periods, currently
averaging 1.6 years. Our significant deferred revenue amount provides some
measure of a predictable revenue stream. The financial impact of our DNR
business, now that we are an operational registrar, is building momentum and
will be an increasingly important catalyst driving our growth in 2000 and
beyond."
Web hosting accounts continue to grow at a quarterly rate averaging 25%.
NetNation's UK office achieved significant sales growth during the quarter. UK
sales increased 202% from the fourth quarter of 1999. In line with the region's
strong demand for Internet services, the Company will continue to increase its
presence in Europe.
Added Mr. Sinclair, "Since the registration of a domain name is often the first
step for an individual or business intending to establish an Internet presence,
it is very complementary to our Web site hosting business. Once a business has
registered a domain, the next step is to get a Web site and, if desired, develop
the site to conduct online commerce. As a full-fledged domain registrar, Web
site host and E-commerce solutions provider, NetNation is able to deliver a
broad range of solutions for any company that wants to take their business on
the Web. In short, we aim to be the preferred solutions provider for Internet
users throughout the world."
First Quarter and Recent Highlights Include:
- Operational registrar of domains: NetNation's wholly-owned subsidiary,
DomainPeople Inc., completed its first full quarter as an operational
registrar of Internet domain names.
- Nasdaq stock listing: NetNation received approval to list on the Nasdaq
Small Cap market during the quarter and commenced trading on April 5, 2000.
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- Domain co-branding agreements: Strategic alliances were established with
several Internet services companies including CMP Media, a wholly owned
subsidiary of United News and Media plc (Nasdaq: UNEWY), and SmartAge.com,
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a leading B2B E-commerce company.
- Private Equity Investment: Received $2.5 million investment from a leading
Swiss investment bank to fund data center expansion in Vancouver and San
Diego.
- Received two hosting awards: Ranked second in E-commerce hosting and sixth
in dedicated and co-location Web site hosting by independent evaluators: the
Developers Network (http://www.developersnetwork.com).
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- Intel ISP Program member: Providing its award-winning Web site hosting
and domain registration services to Intel Corporation's (Nasdaq: INTC)
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Channel Members.
About NetNation Communications, Inc.
NetNation Communications Inc. (http://www.netnation.com) is an international
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domain name registrar (DNR), Web site host, and Application Service and
Infrastructure Provider (ASP/AIP) with clients in more than 125 countries.
NetNation has been consistently ranked among the top 10 Web site hosts in the
world by several leading industry evaluators. The Company's wholly owned
subsidiary, DomainPeople, Inc. (http://www.domainpeople.com), is an ICANN
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accredited and operational registrar of Internet domain names, one of a select
group of publicly listed registrars that includes Network Solutions (Nasdaq:
NSOL) and Register.com (Nasdaq: RCOM). The Company has offices in San Diego, CA,
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Vancouver, Canada and London, UK.
NetNation is a trademark of NetNation Communications Inc. Intel is a registered
trademark of Intel Corporation.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995: In this news release, the word "will" 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.
Interim Consolidated Balance Sheets
(Expressed in U.S. dollars)
March 31, December 31,
2000 1999
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(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $3,172,595 $ 988,077
Accounts receivable 37,347 10,961
Prepaid expenses and deposits 141,706 63,208
Prepaid domain name registration fees 243,206 -
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3,594,854 1,062,246
Prepaid domain name registration fees,
non current portion 59,465 -
Fixed assets, net of accumulated depreciation
of $176,686 (1999 - $134,885) 949,580 455,919
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$4,603,899 $1,518,165
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued liabilities $ 454,576 $ 189,146
Deferred revenue 778,750 400,007
Customer deposits 92,094 -
Debentures payable - 1,100,000
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1,325,420 1,689,153
Deferred revenue, non current portion 65,300 -
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 (920,633) (1,015,466)
Deficit (1,670,140) (1,511,055)
Accumulated other comprehensive income 14,601 14,601
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3,213,179 (170,988)
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$4,603,899 $1,518,165
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NETNATION COMMUNICATIONS, INC.
Interim Consolidated Statements of Operations and Deficit
(Expressed in U.S. dollars)
Three month Three month
period ended period ended
March 31, March 31,
2000 1999
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(unaudited) (unaudited)
Revenues $ 1,414,732 $ 425,891
Operating costs and expenses
Cost of revenues 400,692 119,456
Sales and marketing 682,960 194,439
Office and administrative 421,312 107,074
Depreciation and amortization 55,460 3,355
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1,560,424 424,324
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Earnings (loss) from operations (145,692) 1,567
Other expenses, net (13,393) (2,476)
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Loss for the period (159,085) (909)
Deficit, start of period (1,511,055) (156,568)
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Deficit, end of period $(1,670,140) $ (157,477)
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Loss per share, basic and fully diluted $ (0.01) $ -
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Weighted average number of common shares
outstanding, basic and fully diluted 14,984,472 9,500,000
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NETNATION COMMUNICATIONS, INC.
Interim Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
Three month Three month
period ended period ended
March 31, March 31,
2000 1999
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(unaudited) (unaudited)
Cash flows from operating activities:
Net loss $ (159,085) $ (909)
Items not involving cash:
Depreciation and amortization 55,460 3,355
Amortization of deferred compensation 94,833 -
Change in operating assets and liabilities:
Accounts receivable (26,386) 4,461
Prepaid expenses and deposits (78,498) (175)
Prepaid domain name registration fees (302,671) -
Accounts payable and accrued liabilities 265,430 61,842
Deferred revenue 444,043 14,489
Customer deposits 92,094 -
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Net cash provided by operating activities 385,220 83,063
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Cash flows from investing activities:
Purchase of fixed assets (549,121) (47,852)
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Net cash used in investing activities (549,121) (47,852)
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Cash flows from financing activities:
Proceeds from sale of common stock,
net of offering costs 2,348,419 5,482
Stock redemption premium paid - (22,974)
Payable to stockholders - 7,125
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Net cash provided by (used in) financing
activities 2,348,419 (10,367)
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Net increase in cash and cash equivalents 2,184,518 24,844
Cash and cash equivalents, beginning of period 988,077 45,938
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Cash and cash equivalents, end of period $3,172,595 $ 70,782
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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
Contacts: 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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