Price Graph
Price
Yield
These terms and conditions govern your use of the website alphaminr.com and its related services.
These Terms and Conditions (“Terms”) are a binding contract between you and Alphaminr, (“Alphaminr”, “we”, “us” and “service”). You must agree to and accept the Terms. These Terms include the provisions in this document as well as those in the Privacy Policy. These terms may be modified at any time.
Your subscription will be on a month to month basis and automatically renew every month. You may terminate your subscription at any time through your account.
We will provide you with advance notice of any change in fees.
You represent that you are of legal age to form a binding contract. You are responsible for any
activity associated with your account. The account can be logged in at only one computer at a
time.
The Services are intended for your own individual use. You shall only use the Services in a
manner that complies with all laws. You may not use any automated software, spider or system to
scrape data from Alphaminr.
Alphaminr is not a financial advisor and does not provide financial advice of any kind. The service is provided “As is”. The materials and information accessible through the Service are solely for informational purposes. While we strive to provide good information and data, we make no guarantee or warranty as to its accuracy.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, UNDER NO CIRCUMSTANCES SHALL ALPHAMINR BE LIABLE TO YOU FOR DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR INVESTMENT LOSSES, LOSS OF DATA, OR ACCURACY OF DATA, OR FOR ANY AMOUNT, IN THE AGGREGATE, IN EXCESS OF THE GREATER OF (1) FIFTY DOLLARS OR (2) THE AMOUNTS PAID BY YOU TO ALPHAMINR IN THE SIX MONTH PERIOD PRECEDING THIS APPLICABLE CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF INCIDENTAL OR CONSEQUENTIAL OR CERTAIN OTHER DAMAGES, SO THE ABOVE LIMITATION AND EXCLUSIONS MAY NOT APPLY TO YOU.
If any provision of these Terms is found to be invalid under any applicable law, such provision shall not affect the validity or enforceability of the remaining provisions herein.
This privacy policy describes how we (“Alphaminr”) collect, use, share and protect your personal information when we provide our service (“Service”). This Privacy Policy explains how information is collected about you either directly or indirectly. By using our service, you acknowledge the terms of this Privacy Notice. If you do not agree to the terms of this Privacy Policy, please do not use our Service. You should contact us if you have questions about it. We may modify this Privacy Policy periodically.
When you register for our Service, we collect information from you such as your name, email address and credit card information.
Like many other websites we use “cookies”, which are small text files that are stored on your computer or other device that record your preferences and actions, including how you use the website. You can set your browser or device to refuse all cookies or to alert you when a cookie is being sent. If you delete your cookies, if you opt-out from cookies, some Services may not function properly. We collect information when you use our Service. This includes which pages you visit.
We use Google Analytics and we use Stripe for payment processing. We will not share the information we collect with third parties for promotional purposes. We may share personal information with law enforcement as required or permitted by law.
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2012
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OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Pennsylvania
(State or Other Jurisdiction of Incorporation or Organization)
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23-2707366
(I.R.S. Employer Identification No.)
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96 Mowat Avenue
Toronto, Ontario, Canada
(Address of Principal Executive Offices)
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M6K 3M1
(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common stock, no par value
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NYSE Amex
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(Title of Class)
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None
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
x
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Page
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PART I
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Item 1
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Business
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1
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Item 1A
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Risk Factors
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7
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Item 2
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Properties
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27
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Item 3
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Legal Proceedings
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27
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Item 4
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Mine Safety Disclosures
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27
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PART II
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Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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28
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Item 7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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30
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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54
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Item 8
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Financial Statements and Supplementary Data
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55
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Item 9
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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55
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Item 9A
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Controls and Procedures
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55
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Item 9B
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Other Information
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55
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PART III
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Item 10
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Directors, Executive Officers and Corporate Governance
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56
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Item 11
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Executive Compensation
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63
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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68
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Item 13
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Certain Relationships and Related Transactions, and Director Independence
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70
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Item 14
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Principal Accountant Fees and Services
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70
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PART IV
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Item 15
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Exhibits and Financial Statement Schedules
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73
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Our ability to continue to generate sufficient working capital to meet our operating requirements;
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Our ability to maintain a good working relationship with our vendors and customers;
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The ability of vendors to continue to supply our needs;
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Actions by our competitors;
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Our ability to achieve gross profit margins at which we can be profitable;
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Our ability to attract and retain qualified personnel in our business;
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Our ability to effectively manage our business;
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Our ability to obtain and maintain approvals from regulatory authorities on regulatory issues;
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Our ability to develop and commercialize new services such as Ting while maintaining development and sales of our established services;
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Pending or new litigation; and
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Factors set forth herein under the caption “Item 1A Risk Factors”.
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Retail-oriented domain registrars, such as GoDaddy and
Web.com
through its acquisition of Network Solutions and
Register.com
, who compete with our Resellers and our own retail operations for end-users.
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Wholesale-oriented domain registrars, such as Demand Media through its acquisition of eNom, Wild West Domains (a division of GoDaddy) and Melbourne IT, who market services to resellers such as our customers.
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Wholesale Email Service providers, such as Google, Yahoo!, Microsoft, Bluetie and MailTrust.
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Ad-supported content providers, such as CNET’s
Download.com
.
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Providing superior customer service by anticipating the technical requirements and business objectives of resellers and providing them with technical advice to help them understand how our services can be customized to meet their particular needs.
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Providing cost savings over in-house solutions by relieving resellers of the expense of acquiring and maintaining hardware and software and the associated administrative burden.
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Enabling resellers to better manage their relationships with their end-users.
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Facilitating scalability through an infrastructure designed to support millions of transactions across millions of end-users.
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Providing superior technology and infrastructure, consisting of industry-leading software and hardware that allow resellers to provide these services to their customers without having to make substantial investments in their own software or hardware.
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Name
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Age
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Title
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Elliot Noss
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51
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President and Chief Executive Officer
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Michael Cooperman
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62
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Chief Financial Officer
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David Woroch
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51
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Executive Vice President, Sales and Support
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the demand for outsourced email services;
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our ability to attract and retain customers and provide customer satisfaction;
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the ability to upgrade, develop and maintain our systems and infrastructure and to effectively respond to the rapid technological changes in the email market;
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the budgeting and payment cycles of our existing and potential customers;
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the amount and timing of operating costs and capital expenditures relating to expansion of the email service; and
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the introduction of new or enhanced services by competitors.
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breadth of platform features and functionality of our offering and the sophistication and innovation of our competitors;
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scalability, reliability, performance and ease of expansion and upgrade;
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ease of integration with customers’ existing systems; and
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flexibility to enable customers to manage certain aspects of their systems and leverage outsourced services in other cases when resources, costs and time to market reasons favor an outsourced offering.
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The Communications Decency Act of 1996, or CDA, generally protects online service providers, such as Tucows, from liability for certain activities of their customers, such as posting of defamatory or obscene content, unless the online service provider is participating in the unlawful conduct. Notwithstanding the general protections from liability under the CDA, we may nonetheless be forced to defend ourselves from claims of liability covered by the CDA, resulting in an increased cost of doing business.
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The Digital Millennium Copyright Act of 1998, or DMCA, provides recourse for owners of copyrighted material who believe that their rights under U.S. copyright law have been infringed on the Internet. Under this statute, we generally are not liable for infringing content posted by third parties. However, if we receive a proper notice from a copyright owner alleging infringement of its protected works by web pages for which we provide hosting services, and we fail to expeditiously remove or disable access to the allegedly infringing material, fail to post and enforce a digital rights management policy or a policy to terminate accounts of repeat infringers, or otherwise fail to meet the requirements of the safe harbor under the statute, the owner may seek to impose liability on us.
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management, communication and integration problems resulting from cultural differences and geographic dispersion;
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compliance with foreign laws, including laws regarding liability of online resellers for activities of customers and more stringent laws in foreign jurisdictions relating to the privacy and protection of third-party data;
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accreditation and other regulatory requirements to provide domain name registration, website hosting and other services in foreign jurisdictions;
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competition from companies with international operations, including large international competitors and entrenched local companies;
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to the extent we choose to make acquisitions to enable our international expansion efforts, the identification of suitable acquisition targets in the markets into which we want to expand;
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difficulties in protecting intellectual property rights in international jurisdictions;
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political and economic instability in some international markets;
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sufficiency of qualified labor pools in various international markets;
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currency fluctuations and exchange rates;
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potentially adverse tax consequences or an inability to realize tax benefits; and
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the lower level of adoption of the Internet in many international markets.
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the diversion of management’s attention from other business concerns;
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the failure to effectively integrate the acquired technology or company into our business;
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the incurring of significant acquisition costs;
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the loss of key employees from either our current business or the acquired business; and
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the assumption of significant liabilities of the acquired company.
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A significant amount of revenue attributed to our domain name assets comes from the provision of personalized email services and the generation of revenue from third party advertisements on parked pages. Some of our existing resellers who provide similar services may perceive this as a competitive threat and therefore may decide to terminate their agreements with us because of our acquisitions of a substantial number of expiring domain names.
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We will need to continue to acquire commercially valuable expiring domain names to grow our presence in the field of direct navigation. We will need to continuously improve our technologies to acquire valuable expiring domain names as competition in the marketplace for appropriate expiring domain names intensifies. Our domain name acquisition efforts are subject to rules and guidelines established by registries which maintain Internet domain name registrations and other registrars who process and facilitate Internet domain name registrations. The registries and registrars may change the rules and guidelines for acquiring expiring domains in ways that may prove detrimental to our domain name acquisition efforts.
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The business of direct navigation is dependent on current technologies and user practices. If browser or search technologies were to change significantly, the practice of direct navigation may be altered to our disadvantage.
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international income tax authorities, including the Canada Revenue Agency and the U.S. Internal Revenue Service, challenging the validity of our arm’s- length related party transfer pricing policies or the validity of our contemporaneous documentation.
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changes in the valuation of our deferred tax assets; or
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changes in tax laws, regulations, accounting principles or the interpretations of such laws.
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•
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our ability to maintain revenue growth at current levels or anticipate a decline in revenue from any of our services;
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our ability to identify and develop new technologies or services and to commercialize those technologies into new services in a timely manner;
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the mix of our services sold during the quarter or year;
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our ability to make appropriate decisions which will position us to achieve further growth;
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concentrated capital expenditures in any particular period to support our growth or for other reasons;
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changes in our pricing policies or those of our competitors, changes in domain name fees charged to us by Internet registries or ICANN, or other competitive pressures on selling prices;
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our ability to identify, hire, train, motivate and retain highly qualified personnel, and to achieve targeted productivity levels;
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market acceptance of Internet services generally and of new and enhanced versions of our services in particular;
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our ability to establish and maintain a competitive advantage;
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the continued development of our global distribution channel and our ability to compete in multiple countries successfully as part of our sales and marketing strategy;
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the number and significance of service enhancements and new service and technology announcements by our competitors;
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our ability to identify, develop, deliver and introduce in a timely manner new and enhanced versions of our current service offerings that anticipate market demand and address customer needs;
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changes in foreign currency exchange rates and issues relating to the conversion to the Canadian dollar;
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foreign, federal or state regulation affecting our business;
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•
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our ability to continue to attract users to our website;
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•
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our ability to attract software developers to participate in our Author Resource Center;
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our ability to continue to attract advertisers to place content on our website;
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technical difficulties or other factors that result in system downtime;
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seasonality of the markets and businesses of our customers;
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news relating to our industry as a whole;
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our ability to enforce our intellectual property rights;
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our ability to manage Internet fraud and information theft; and
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current economic conditions.
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Our standard registration agreement requires that each registrant indemnify, defend and hold us harmless for any dispute arising from the registration or use of a domain registered in that person’s name; and
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Since December 1, 1999, we have required our resellers to ensure that all registrants are bound to the UDRP as approved by ICANN.
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pricing controls;
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•
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the creation of additional generic top level domains and country code domains;
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consumer protection;
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•
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cross-border domain registrations;
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•
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trademark, copyright and patent infringement;
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•
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domain dispute resolution; and
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•
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the nature or content of domains and domain registration.
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•
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the unwillingness of companies and consumers to shift their purchasing from traditional vendors to online vendors;
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•
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the Internet infrastructure may not be able to support the demands placed on it, and its performance and reliability may decline as usage grows;
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•
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security and authentication issues may create concerns with respect to the transmission over the Internet of confidential information; and
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•
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privacy concerns, including those related to the ability of websites to gather user information without the user’s knowledge or consent, may impact consumers’ willingness to interact online.
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to develop and license new applications, services and technologies that address the increasingly sophisticated and varied needs of our current and prospective customers; and
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•
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to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis.
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•
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the U.S. or any other government may reassess its decision to introduce competition into, or ICANN’s role in overseeing, the domain registration market;
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•
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the Internet community or the U.S. Department of Commerce or U.S. Congress may refuse to recognize ICANN’s authority or support its policies, which could create instability in the domain registration system;
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•
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some of ICANN’s policies and practices, and the policies and practices adopted by registries and registrars, could be found to conflict with the laws of one or more jurisdictions;
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ICANN may lose any one of the several claims pending against it in both the U.S. and international courts, in which case its credibility may suffer and its policies may be discredited;
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•
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the terms of the Registrar Accreditation Agreement, under which we are accredited as a registrar, could change in ways that are disadvantageous to us or under certain circumstances could be terminated by ICANN preventing us from operating our Registrar;
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•
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ICANN and, under their registry agreements, VeriSign and other registries may impose increased fees received for each ICANN accredited registrar and/or domain name registration managed by those registries;
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•
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ICANN or any registries may implement policy changes that would impact our ability to run our current business practices throughout the various stages of the lifecycle of a domain name;
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•
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foreign constituents may succeed in their efforts to have domain name registration removed from a U.S. based entity and placed in the hands of an international cooperative; and
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international regulatory or governing bodies, such as the International Telecommunications Union or the European Union, may gain increased influence over the management and regulation of the domain registration system, leading to increased regulation in areas such as taxation and privacy.
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the liability of online resellers for actions by customers, including fraud, illegal content, spam, phishing, libel and defamation, infringement of third-party intellectual property and other abusive conduct;
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other claims based on the nature and content of Internet materials, such as pornography;
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•
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user privacy and security issues;
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•
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consumer protection;
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•
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sales and other taxes, including the value-added tax of the European Union member states;
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characteristics and quality of services; and
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•
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cross-border commerce.
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•
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user privacy;
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•
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children;
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•
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copyrights and other intellectual property rights and infringement;
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•
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domains;
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•
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pricing;
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•
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content regulation;
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•
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defamation;
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•
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taxation; and
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•
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the characteristics and quality of products and services.
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•
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actual or anticipated variations in our quarterly operating results;
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•
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interruptions in our services;
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•
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seasonality of the markets and businesses of our customers;
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•
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announcements of new technologies or new services by our company or our competitors;
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•
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our ability to accurately select appropriate business models and strategies;
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•
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the operating and stock price performance of other companies that investors may view as comparable to us;
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•
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news relating to our industry as a whole; and
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•
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news relating to trends in our markets.
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Year
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Fiscal Quarter Ended
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High
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Low
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|||||||
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2013
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January 1, 2013 through March 5, 2013
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$
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2.20
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$
|
1.45
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|||||
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2012
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March 31, 2012
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1.23
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0.75
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|||||||
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June 30, 2012
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1.60
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1.04
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||||||||
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September 30, 2012
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1.39
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1.06
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||||||||
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December 31, 2012
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1.49
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1.06
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2011
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March 31, 2011
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0.90
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0.72
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|||||||
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June 30, 2011
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0.87
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0.76
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||||||||
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September 30, 2011
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0.82
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0.71
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||||||||
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December 31, 2011
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0.78
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0.74
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Plan category
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Number of securities to be
issued upon exercise of outstanding options, warrants and rights
(#)
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Weighted average exercise price of outstanding options, warrants and rights
($)
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Number of securities remaining available for future issuance under the plan (excluding securities reflected in the first column)
(#)
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|||||||||
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Equity compensation plans approved by security holders:
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||||||||||||
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2006 Equity Compensation Plan
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5,038,987 | 0.79 | 1,624,626 | |||||||||
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1996 Equity Compensation Plan
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3,553,699 | 0.42 | — | |||||||||
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Equity compensation plans not approved by security holders
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— | — | — | |||||||||
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Total
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8,592,686 | 0.64 | 1,624,626 | |||||||||
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Year ended
December 31,
(1)
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||||||||||||
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2012
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2011
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2010
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||||||||||
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(in 000’s)
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Total new, renewed and transferred-in domain name registrations provisioned
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9,213
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8,576
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7,396
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Domain names under management
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||||||||||||
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Provisioned on behalf of Tucows
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10,643
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10,482
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8,809
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Provisioned on behalf of accredited registrars
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3,363
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1,400
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1,400
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|||||||||
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Total domain names under management
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14,006
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11,882
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10,209
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(1)
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For a discussion of these period to period changes in the domains provisioned and domains under management and how they impacted our financial results see the Net revenue discussion below.
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·
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Wholesale (Domain Service and other Value-Added Services);
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·
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Retail (Hover and Ting); and
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·
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Portfolio (Domain Portfolio monetization and sales).
|
| Year ended December 31, | ||||||||
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2012
|
2011
|
|||||||
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Wholesale
|
||||||||
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Domain Services
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$
|
87,434,450
|
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$
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76,201,058
|
|||
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Value Added Services
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10,586,460
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9,268,460
|
||||||
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Total Wholesale
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98,020,910
|
85,469,518
|
||||||
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Retail
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10,740,844
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5,263,118
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||||||
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Portfolio
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5,965,147
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6,332,331
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||||||
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$
|
114,726,901
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$
|
97,064,967
|
|||||
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Increase over prior period
|
$
|
17,661,934
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||||||
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Increase - percentage
|
18
|
%
|
||||||
| Year ended December 31, | ||||||||
|
2012
|
2011
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|||||||
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Wholesale
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||||||||
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Domain Services
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76 | % | 78 | % | ||||
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Value Added Services
|
10 | % | 10 | % | ||||
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Total Wholesale
|
86 | % | 88 | % | ||||
|
Retail
|
9 | % | 5 | % | ||||
|
Portfolio
|
5 | % | 7 | % | ||||
| 100 | % | 100 | % | |||||
| Year ended December 31, | ||||||||
|
2012
|
2011
|
|||||||
|
Wholesale
|
||||||||
|
Domain Services
|
$
|
73,168,196
|
$
|
63,491,433
|
||||
|
Value Added Services
|
2,032,328
|
1,969,374
|
||||||
|
Total Wholesale
|
75,200,524
|
65,460,807
|
||||||
|
Retail
|
6,804,863
|
1,881,063
|
||||||
|
Portfolio
|
832,008
|
746,517
|
||||||
|
Network, other costs
|
4,925,058
|
4,837,650
|
||||||
|
Network, depreciation and amortization costs
|
755,280
|
836,045
|
||||||
|
$
|
88,517,733
|
|
$
|
73,762,082
|
||||
|
Increase over prior period
|
$
|
14,755,651
|
||||||
|
Increase - percentage
|
20
|
%
|
||||||
| Year ended December 31, | ||||||||
|
2012
|
2011
|
|||||||
|
Wholesale
|
||||||||
|
Domain Services
|
83 | % | 86 | % | ||||
|
Value Added Services
|
2 | % | 3 | % | ||||
|
Total Wholesale
|
85 | % | 89 | % | ||||
|
Retail
|
8 | % | 2 | % | ||||
|
Portfolio
|
1 | % | 1 | % | ||||
|
Network, other costs
|
5 | % | 7 | % | ||||
|
Network, depreciation and amortization costs
|
1 | % | 1 | % | ||||
| 100 | % | 100 | % | |||||
| Year ended December 31, | ||||||||
|
2012
|
2011
|
|||||||
|
Sales and marketing
|
$
|
8,701,446
|
|
$
|
7,442,681
|
|||
|
Increase over prior period
|
$
|
1,258,765
|
||||||
|
Increase - percentage
|
17
|
%
|
||||||
|
Percentage of net revenues
|
8
|
%
|
8
|
%
|
||||
| Year ended December 31, | ||||||||
|
2012
|
2011
|
|||||||
|
Technical operations and development
|
$
|
4,302,820
|
$
|
4,868,228
|
||||
|
Decrease over prior period
|
$
|
(565,408)
|
||||||
|
Decrease - percentage
|
(12)
|
%
|
||||||
|
Percentage of net revenues
|
4
|
%
|
5
|
%
|
||||
| Year ended December 31, | ||||||||
|
2012
|
2011
|
|||||||
|
General and administrative
|
$ | 6,610,819 | $ | 6,096,596 | ||||
|
Increase over prior period
|
$ | 514,223 | ||||||
|
Increase - percentage
|
8 | % | ||||||
|
Percentage of net revenues
|
6 | % | 6 | % | ||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Depreciation of property and equipment
|
$ | 190,420 | $ | 187,005 | ||||
|
Increase over prior period
|
$ | 3,415 | ||||||
|
Increase - percentage
|
2 | % | ||||||
|
Percentage of net revenues
|
0 | % | 0 |
%
|
||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Loss on disposition of property and equipment
|
$ | 118,944 | $ | 42,165 | ||||
|
Increase over prior period
|
$ | 76,779 | ||||||
|
Increase - percentage
|
182 | % | ||||||
|
Percentage of net revenues
|
0 | % | 0 |
%
|
||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Amortization of intangible assets
|
$ | 876,120 | $ | 1,004,950 | ||||
|
Decrease over prior period
|
$ | (128,830) | ||||||
|
Decrease - percentage
|
(13) | % | ||||||
|
Percentage of net revenues
|
1 | % | 1 |
%
|
||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Loss (gain) on currency forward contracts
|
$ | (682,851) | $ | 535,223 | ||||
|
(Decrease) increase over prior period
|
$ | (1,218,074) | ||||||
|
(Decrease) /increase - percentage
|
(228) | % | ||||||
|
Percentage of net revenues
|
(1) | % | 1 |
%
|
||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Other income (expense), net
|
$ | 336,848 | $ | 324,573 | ||||
|
Increase over prior period
|
$ | 12,275 | ||||||
|
Increase - percentage
|
4 | % | ||||||
|
Percentage of net revenues
|
0 | % | 0 |
%
|
||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Provision for (recovery of) income taxes
|
$ | 2,004,156 | $ | (2,719,621) | ||||
|
Increase in provision over prior period
|
$ | 4,723,777 | ||||||
|
Increase - percentage
|
(174) | % | ||||||
|
Percentage of net revenues
|
2 | % | (3) | % | ||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Comprehensive income
|
$ | 44,104 | $ | - | ||||
|
Increase in provision over prior period
|
$ | 44,104 | ||||||
|
Increase - percentage
|
(100) | % | ||||||
|
Percentage of net revenues
|
0 | % | - |
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Wholesale
|
||||||||
|
Domain Services
|
$ | 76,201,058 | $ | 64,977,121 | ||||
|
Value Added Services
|
9,268,460 | 8,978,922 | ||||||
|
Total Wholesale
|
85,469,518 | 73,956,043 | ||||||
|
Retail
|
5,263,118 | 4,559,833 | ||||||
|
Portfolio
|
6,332,331 | 6,062,629 | ||||||
| $ | 97,064,967 | $ | 84,578,505 | |||||
|
Increase over prior period
|
$ | 12,486,462 | ||||||
|
Increase - percentage
|
15 | % | ||||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Wholesale
|
||||||||
|
Domain Services
|
78 | % | 77 | % | ||||
|
Value Added Services
|
10 | % | 11 | % | ||||
|
Total Wholesale
|
88 | % | 88 | % | ||||
|
Retail
|
5 | % | 5 | % | ||||
|
Portfolio
|
7 | % | 7 | % | ||||
| 100 | % | 100 | % | |||||
|
Year ended December 31,
|
||||||||
| 2011 | 2010 | |||||||
|
Wholesale
|
||||||||
|
Domain Services
|
$ | 63,491,433 | $ | 54,087,893 | ||||
|
Value Added Services
|
1,969,374 | 1,996,317 | ||||||
|
Total Wholesale
|
65,460,807 | 56,084,210 | ||||||
|
Retail
|
1,881,063 | 1,527,727 | ||||||
|
Portfolio
|
746,517 | 882,912 | ||||||
|
Network, other costs
|
4,837,650 | 4,648,899 | ||||||
|
Network, depreciation and amortization costs
|
836,045 | 1,331,576 | ||||||
| $ | 73,762,082 | $ | 64,475,324 | |||||
|
Increase over prior period
|
$ | 9,286,758 | ||||||
|
Increase - percentage
|
14 | % | ||||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Wholesale
|
||||||||
|
Domain Services
|
86 | % | 85 | % | ||||
|
Value Added Services
|
3 | % | 3 | % | ||||
|
Total Wholesale
|
89 | % | 88 | % | ||||
|
Retail
|
2 | % | 2 | % | ||||
|
Portfolio
|
1 | % | 1 | % | ||||
|
Network, other costs
|
7 | % | 7 | % | ||||
|
Network, depreciation and amortization costs
|
1 | % | 2 | % | ||||
| 100 | % | 100 | % | |||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Sales and marketing
|
$
|
7,442,681
|
$
|
7,217,754
|
||||
|
Increase over prior period
|
$
|
224,927
|
||||||
|
Increase - percentage
|
3
|
%
|
||||||
|
Percentage of net revenues
|
8
|
%
|
9
|
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Technical operations and development
|
$
|
4,868,228
|
$
|
4,577,898
|
||||
|
Increase over prior period
|
$
|
290,330
|
||||||
|
Increase - percentage
|
6
|
%
|
||||||
|
Percentage of net revenues
|
5
|
%
|
5
|
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
General and administrative
|
$
|
6,096,596
|
$
|
5,123,074
|
||||
|
Increase over prior period
|
$
|
973,522
|
||||||
|
Increase - percentage
|
19
|
%
|
||||||
|
Percentage of net revenues
|
6
|
%
|
6
|
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Depreciation of property and equipment
|
$
|
187,005
|
$
|
170,844
|
||||
|
Increase over prior period
|
$
|
16,161
|
||||||
|
Increase - percentage
|
9
|
%
|
||||||
|
Percentage of net revenues
|
0
|
%
|
0
|
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Loss on disposition of property and equipment
|
$
|
42,165
|
$
|
-
|
||||
|
Increase over prior period
|
$
|
42,165
|
||||||
|
Increase - percentage
|
-
|
%
|
||||||
|
Percentage of net revenues
|
0
|
%
|
-
|
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Amortization of intangible assets
|
$
|
1,004,950
|
$
|
1,442,160
|
||||
|
Decrease over prior period
|
$
|
(437,210
|
)
|
|||||
|
Decrease - percentage
|
(30
|
)%
|
||||||
|
Percentage of net revenues
|
1
|
%
|
2
|
%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Loss (gain) on currency forward contracts
|
$
|
535,223
|
$
|
(872,539
|
)
|
|||
|
Increase over prior period
|
$
|
1,407,762
|
||||||
|
Increase - percentage
|
(161
|
)%
|
||||||
|
Percentage of net revenues
|
1
|
%
|
(1
|
)%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Other income (expense), net
|
$
|
324,573
|
$
|
(116,197
|
)
|
|||
|
Increase over prior period
|
$
|
440,770
|
||||||
|
Increase - percentage
|
(379
|
)%
|
||||||
|
Percentage of net revenues
|
0
|
%
|
(0
|
)%
|
||||
|
Year ended December 31,
|
||||||||
|
2011
|
2010
|
|||||||
|
Provision for (recovery of) income taxes
|
$
|
(2,719,621
|
)
|
$
|
210,845
|
|||
|
Increase in provision over prior period
|
$
|
(2,930,466
|
)
|
|||||
|
Decrease - percentage
|
(1,390
|
)%
|
||||||
|
Percentage of net revenues
|
(3
|
)%
|
0
|
%
|
||||
|
Maturity date
|
Notional
amount of
U.S. dollars
|
Weighted
average
exchange rate
of U.S. dollars
|
Fair value
|
|||||||||
|
January – March, 2013
|
6,000,000
|
1.0277
|
193,941
|
|||||||||
|
April – June, 2013
|
5,270,000
|
1.0300
|
171,739
|
|||||||||
|
July - September, 2013
|
4,930,000
|
1.0047
|
22,820
|
|||||||||
|
October - December, 2013
|
5,480,000
|
1.0071
|
24,444
|
|||||||||
|
January – March, 2014
|
5,720,000
|
1.0095
|
24,218
|
|||||||||
|
April – May, 2014
|
1,940,000
|
1.0109
|
7,620
|
|||||||||
|
Total
|
$
|
29,340,000
|
1.0157
|
$
|
444,782
|
|||||||
|
Allen Karp
|
Co-Chairman of the Board since September 2012
and Director since October 2005
|
|
Rawleigh H. Ralls
|
Co-Chairman of the Board since September 2012
and Director since May 2009
|
|
Stanley Stern
|
Chairman of the Board from August 2001 to May 2012
and Director since January 2000
|
|
Eugene Fiume
|
Director since June 2005
|
|
Erez Gissin
|
Director since August 2001
|
|
Joichi Ito
|
Director since December 2008
|
|
Lloyd Morrisett
|
Director since February 1994
|
|
Elliot Noss
|
Director since August 2001
|
|
Jeffrey Schwartz
|
Director since June 2005
|
|
•
|
To assist the Board of Directors in its oversight of (1) our accounting and financial reporting processes and the audits of our financial statements, and (2) our compliance with legal and regulatory requirements;
|
|
•
|
To interact directly with and evaluate the performance of the independent auditors, including to determine whether to engage or dismiss the independent auditors and to monitor the independent auditors’ qualifications and independence; and
|
|
•
|
To prepare the report required by the rules of the SEC to be included in our annual Form 10-K.
|
|
•
|
To recommend and review the compensation structure for the Company’s senior executives, including the Chief Executive Officer;
|
|
•
|
To review employee compensation and benefit programs, including risk oversight;
|
|
•
|
To develop and recommend to the Board a set of corporate governance guidelines applicable to the Company and to periodically review the guidelines;
|
|
•
|
To oversee the Board’s annual evaluation of its performance and the performance of the other Board committees;
|
|
•
|
To advise the Board regarding membership and operations of the Board; and
|
|
•
|
To identify individuals qualified to serve as members of the Board, to select, subject to ratification of the Board, the director nominees for the next annual meeting of shareholders and to recommend to the Board individuals to fill vacancies on the Board.
|
|
•
|
the candidate’s name and the information about the individual that would be required to be included in a proxy statement under the rules of the SEC;
|
|
•
|
information about the relationship between the candidate and the nominating shareholder;
|
|
•
|
the consent of the candidate to serve as a director; and
|
|
•
|
proof of the number of our common stock that the nominating shareholder owns and the length of time the shares have been owned.
|
|
•
|
on the date each non-employee director becomes a director, he or she is granted options to purchase 17,500 shares of our common stock;
|
|
•
|
on the date each director becomes a member of the audit committee, he or she is granted options to purchase 15,000 shares of our common stock;
|
|
•
|
on the date each director becomes a member of the corporate governance, nomination and compensation committee, he or she is granted options to purchase 10,000 shares of our common stock;
|
|
•
|
on each date on which we hold our annual meeting of shareholders, each non-employee director in office immediately before and after the annual election of directors will receive an automatic grant of options to purchase 15,000 of our common stock;
|
|
Director meeting attendance fees:
|
||||
|
May Board Meeting Personal Attendance Fee (inclusive of Committee fees)
|
$
|
6,000
|
||
|
November Board Meeting Personal Attendance Fee (inclusive of Committee fees)
|
$
|
4,000
|
||
|
Regularly Scheduled Telephonic Board Meeting Attendance Fees (per meeting)
|
$
|
750
|
||
|
Regularly Scheduled Telephonic Audit Committee Meeting Attendance Fees (per meeting)
|
$
|
400
|
||
|
Regularly Scheduled Telephonic Corporate Governance, Nomination and Compensation Committee Meeting Attendance Fees (per meeting)
|
$
|
400
|
||
|
Name
|
Fees earned or
paid in cash ($)
|
Option
awards ($)
(1)(2)
|
All other
compensation ($)
|
Total ($)
|
||||||||||||
|
(a)
|
(b)
|
(d)
|
(g)
|
(h)
|
||||||||||||
|
Stanley Stern
|
29,800
|
6,060
|
—
|
35,860
|
||||||||||||
|
Eugene Fiume
|
18,750
|
6,060
|
—
|
24,810
|
||||||||||||
|
Erez Gissin
|
18,750
|
6,060
|
—
|
24,810
|
||||||||||||
|
Joichi Ito
|
11,250
|
8,333
|
—
|
19,583
|
||||||||||||
|
Allen Karp
|
46,210
|
11,363
|
—
|
57,573
|
||||||||||||
|
Lloyd Morrisett
|
36,750
|
6,060
|
—
|
42,810
|
||||||||||||
|
Rawleigh Ralls
|
26,043
|
17,423
|
—
|
43,466
|
||||||||||||
|
Jeffrey Schwartz
|
38,750
|
11,363
|
—
|
50,113
|
||||||||||||
|
226,303
|
72,722
|
—
|
299,025
|
|||||||||||||
|
(1)
|
On September 11, 2012 under the 2006 Plan, our non-employee directors were awarded these automatic formula option grants. Under the 2006 Plan, these options vested immediately and carry an exercise price of $1.38. All these options remained outstanding at December 31, 2012 and have a five year term. The aggregate grant date fair value of the option grants was calculated in accordance with FASB ASC 718 and based on the Black-Scholes option-pricing model and used the same assumptions that are set forth in Note 9 to our audited consolidated financial statements included in this Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
|
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
(1)
($)
|
Stock
Awards
(2)
($)
|
Option
Awards
(3)
($)
|
All Other
Compensation
(4)
($)
|
Total
($)
|
|||||||||||||||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(f)
|
(i)
|
(j)
|
||||||||||||||||||||
|
Elliot Noss
|
2012
|
350,860
|
200,470
|
—
|
23,070
|
10,495
|
584,895
|
|||||||||||||||||||
|
President and Chief Executive Officer
|
2011
|
345,090
|
93,405
|
—
|
14,385
|
10,636
|
463,516
|
|||||||||||||||||||
|
Michael Cooperman
|
2012
|
274,890
|
142,493
|
—
|
23,070
|
12,295
|
452,748
|
|||||||||||||||||||
|
Chief Financial Officer
|
2011
|
270,315
|
64,417
|
—
|
14,385
|
12,459
|
361,576
|
|||||||||||||||||||
|
David Woroch
|
2012
|
228,909
|
147,491
|
—
|
23,070
|
8,696
|
408,166
|
|||||||||||||||||||
|
Vice President, Sales
|
2011
|
224,309
|
64,417
|
—
|
14,385
|
8,812
|
311,923
|
|||||||||||||||||||
|
(1)
|
Represents bonus earned during the fiscal years ended December 31, 2012, 2011 and 2010.
|
|
Elliot Noss
|
$
|
95,589
|
||
|
Michael Cooperman
|
$
|
62,975
|
||
|
David Woroch
|
$
|
65,787
|
|
Elliot Noss
|
$
|
25,443
|
||
|
Michael Cooperman
|
$
|
17,547
|
||
|
David Woroch
|
$
|
17,547
|
|
(2)
|
Represents the aggregate grant date fair value of such awards, calculated in accordance with FASB ASC 718. Please see Note 9 entitled “Stock Options” in the notes to our audited financial statements, for a discussion of the assumptions underlying these calculations.
|
|
(3)
|
Represents the aggregate grant date fair value of such awards, calculated in accordance with FASB ASC 718. Please see Note 9 entitled “Stock Options” in the notes to our audited financial statements, for a discussion of the assumptions underlying these calculations.
|
|
(4)
|
Amounts reported in this column are comprised of the following items:
|
|
Year
|
Additional
Health
Spending
Credits
($)
|
Car
Allowance
($)
|
Health
Club
Membership
($)
|
All Other
Compensation
($)
|
|||||||||||||
|
Elliot Noss
|
2012
|
1,499
|
8,996
|
—
|
10,495
|
||||||||||||
|
2011
|
1,519
|
9,117
|
—
|
10,636
|
|||||||||||||
|
Michael Cooperman
|
2012
|
1,499
|
8,397
|
2,399
|
12,295
|
||||||||||||
|
2011
|
1,519
|
8,509
|
2,431
|
12,459
|
|||||||||||||
|
David Woroch
|
2012
|
1,499
|
7,197
|
—
|
8,696
|
||||||||||||
|
2011
|
1,519
|
7,293
|
—
|
8,812
|
|||||||||||||
|
Name and Principal Position
|
Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#) Unexercisable
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
||||||||||||
|
Elliot Noss
|
214,575
|
—
|
0.37
|
8/5/13
|
||||||||||||
|
223,991
|
—
|
0.37
|
8/5/13
|
|||||||||||||
|
1,394,738
|
—
|
0.37
|
8/5/13
|
|||||||||||||
|
76,500
|
—
|
0.36
|
8/4/13
|
|||||||||||||
|
200,000
|
—
|
0.58
|
8/10/14
|
|||||||||||||
|
150,000
|
—
|
0.85
|
3/18/14
|
|||||||||||||
|
60,000
|
—
|
0.60
|
5/22/15
|
|||||||||||||
|
64,000
|
64,000
|
0.70
|
5/16/17
|
|||||||||||||
|
8,750
|
26,250
|
0.73
|
8/14/18
|
|||||||||||||
|
—
|
30,000
|
1.38
|
5/17/19
|
|||||||||||||
|
2,392,554
|
120,250
|
|||||||||||||||
|
Michael Cooperman
|
621,475
|
—
|
0.37
|
8/5/13
|
||||||||||||
|
150,000
|
—
|
0.58
|
8/10/14
|
|||||||||||||
|
120,000
|
—
|
0.85
|
3/18/14
|
|||||||||||||
|
75,000
|
—
|
0.60
|
5/22/15
|
|||||||||||||
|
64,000
|
64,000
|
0.70
|
5/16/17
|
|||||||||||||
|
8,750
|
26,250
|
0.73
|
8/14/18
|
|||||||||||||
|
—
|
30,000
|
1.38
|
5/17/19
|
|||||||||||||
|
1,039,225
|
120,250
|
|||||||||||||||
|
David Woroch
|
30,000
|
—
|
0.36
|
8/4/13
|
||||||||||||
|
60,000
|
—
|
0.58
|
8/10/14
|
|||||||||||||
|
80,000
|
—
|
0.85
|
3/18/14
|
|||||||||||||
|
65,000
|
—
|
0.60
|
5/22/15
|
|||||||||||||
|
64,000
|
64,000
|
0.70
|
5/16/17
|
|||||||||||||
|
8,750
|
26,250
|
0.73
|
8/14/18
|
|||||||||||||
|
—
|
30,000
|
1.38
|
5/17/19
|
|||||||||||||
|
307,750
|
120,250
|
|||||||||||||||
|
Elliot Noss
(1)
|
2012
|
Termination
without Cause
|
Change in
Control
|
|||||||
|
Compensation
|
||||||||||
|
Base Salary/Severance
(2)
|
$
|
681,074
|
$
|
2,481,074
|
||||||
|
Bonus Plan
(3)
|
339,864
|
339,864
|
||||||||
|
Acceleration of Unvested Equity Awards
(4)
|
67,798
|
67,798
|
||||||||
|
Benefits
(5)
|
||||||||||
|
Car Allowance
|
8,996
|
8,996
|
||||||||
|
Healthcare Flexible Spending Account
|
1,499
|
1,499
|
||||||||
|
Health club
|
—
|
—
|
||||||||
|
$
|
1,099,231
|
$
|
2,899,231
|
|||||||
|
Michael Cooperman
(1)
|
2012
|
Termination
without Cause
|
Change in
Control
|
|||||||
|
Compensation
|
||||||||||
|
Base Salary/Severance
(2)
|
$
|
422,351
|
$
|
1,322,351
|
||||||
|
Bonus Plan
(3)
|
177,262
|
177,262
|
||||||||
|
Acceleration of Unvested Equity Awards
(4)
|
60,685
|
67,798
|
||||||||
|
Benefits
(5)
|
||||||||||
|
Car Allowance
|
8,397
|
8,397
|
||||||||
|
Healthcare Flexible Spending Account
|
1,499
|
1,499
|
||||||||
|
Health club
|
2,399
|
2,399
|
||||||||
|
$
|
672,593
|
$
|
1,579,706
|
|||||||
|
David Woroch
(1)
|
2012
|
Termination
without Cause
|
Change in
Control
|
|||||||
|
Compensation
|
||||||||||
|
Base Salary/Severance
(2)
|
$
|
332,024
|
$
|
332,024
|
||||||
|
Bonus Plan
(3)
|
175,430
|
175,430
|
||||||||
|
Acceleration of Unvested Equity Awards
(4)
|
13,325
|
13,325
|
||||||||
|
Benefits
(5)
|
||||||||||
|
Car Allowance
|
7,197
|
7,197
|
||||||||
|
Healthcare Flexible Spending Account
|
1,499
|
1,499
|
||||||||
|
Health club
|
—
|
—
|
||||||||
|
$
|
529,475
|
$
|
529,475
|
|||||||
|
(1)
|
For the purpose of the table we assumed an annual base salary at the executive’s level as of December 31, 2012
|
|
(2)
|
Severance for Mr. Noss is compensation for one year plus one month additional compensation for each completed year of service capped at 24 months. For Messrs. Cooperman and Woroch, severance compensation is for six months plus one month additional compensation for each completed year of service.
|
|
(3)
|
For the purpose of the table we assumed that the annual incentive bonus target as of December 31, 2012 had been achieved and that no overachievement bonus or special bonuses would be payable.
|
|
(4)
|
For purposes of the above table, we have assumed that if we terminate Mr. Noss without cause all his unvested options vest automatically and that for Messrs. Cooperman or Woroch, that their options continue to vest through any severance period. On a change in control we have assumed that all unvested options for Messrs. Noss or Cooperman vest automatically and that for Mr. Woroch, that his options continue to vest through and until the end of any severance period. Amounts disclosed in this table equal the closing market value of our common stock as of December 30, 2012, minus the exercise price, multiplied by the number of unvested shares of our common stock that would vest. The closing market value of our common stock on December 31, 2012 was $1.44.
|
|
|
(5)
|
Pay for unused vacation, extended health, matching registered retirement savings plan benefit, life insurance and accidental death and dismemberment insurance are standard programs offered to all employees and are therefore not reported.
|
|
•
|
the death or disability of the executive;
|
|
•
|
for “cause;” or
|
|
•
|
without “cause.”
|
|
•
|
the executive resigns with or without “good reason” within the 30-day period immediately following the date that is six months after the effective date of the “change in control;” or
|
|
•
|
within 18 months after a “change in control” and executive’s employment is terminated either:
|
|
•
|
without “cause;” or
|
|
•
|
by resignation for “good reason.”
|
|
•
|
the acquisition of 50% or more of our common stock;
|
|
•
|
a change in the majority of our Board of Directors unless approved by the incumbent directors (other than as a result of a contested election); and
|
|
•
|
certain reorganizations, mergers, consolidations, liquidations or dissolutions, unless certain requirements are met regarding continuing ownership of our outstanding common stock.
|
|
•
|
the executive’s position, management responsibilities or working conditions are diminished from those in effect immediately prior to the change in control, or he is assigned duties inconsistent with his position;
|
|
•
|
the executive is required to be based at a location in excess of 30 miles from his principal job location or office immediately prior to the change in control;
|
|
•
|
the executive’s base compensation is reduced, or the executive’s compensation and benefits taken as a whole are materially reduced, from those in effect immediately prior to the change in control; or
|
|
•
|
we fail to obtain a satisfactory agreement from any successor to assume and agree to perform our obligations to the executive under his employment agreement.
|
|
Beneficial Ownership of Common Stock
|
||||||||||||||||
|
Name
|
Common Stock
Beneficially Owned
Excluding Options
|
Stock Options
Exercisable
within 60 Days of
March 5, 2013
|
Total
Common Stock
Beneficially Owned
|
Percent of
Class
(1)
|
||||||||||||
|
Elliot Noss
|
820,254
|
(2)
|
2,392,554
|
3,212,808
|
7.5
|
%
|
||||||||||
|
Michael Cooperman
|
148,850
|
(3)
|
1,039,225
|
1,188,075
|
2.9
|
%
|
||||||||||
|
David Woroch
|
260,000
|
307,750
|
567,750
|
1.4
|
%
|
|||||||||||
|
Stanley Stern
|
213,850
|
182,500
|
396,350
|
*
|
||||||||||||
|
Eugene Fiume
|
5,000
|
110,000
|
115,000
|
*
|
||||||||||||
|
Erez Gissin
|
15,000
|
140,000
|
155,000
|
*
|
||||||||||||
|
Joichi Ito
|
—
|
105,000
|
105,000
|
*
|
||||||||||||
|
Allen Karp
|
40,000
|
(4)
|
207,500
|
247,500
|
*
|
|||||||||||
|
Lloyd Morrisett
|
120,000
|
(5)
|
227,500
|
347,500
|
*
|
|||||||||||
|
Rawleigh Ralls
|
4,250,000
|
(6)
|
115,000
|
4,365,000
|
10.8
|
%
|
||||||||||
|
Jeffrey Schwartz
|
15,000
|
197,500
|
212,500
|
*
|
||||||||||||
|
All directors and executive officers as a group
(13 persons)
|
5,888,154
|
5,500,029
|
11,388,183
|
24.9
|
%
|
|||||||||||
|
*
|
Less than 1%.
|
|
(1)
|
Based on 40,213,850 shares outstanding as of March 5, 2013, adjusted for shares of common stock beneficially owned but not yet issued.
|
|
(2)
|
Includes an aggregate of 786,883 shares of common stock that are indirectly owned by Mr. Noss. Of these shares, Mr. Noss and his wife share investment and voting power over 90,072 shares held in three RRSP accounts belonging to Mr. Noss’ wife, 589,942 shares are held in Mr. Noss’ RRSP accounts and 106,869 shares are held by two separate family trusts for which Mr. Noss is the trustee.
|
|
(3)
|
Includes 148,750 shares of common stock that are held in Mr. Cooperman’s RRSP account.
|
|
(4)
|
These shares of common stock are directly owned by Mr. Karp’s wife.
|
|
(5)
|
These shares of common stock are owned jointly by Dr. Morrisett and his wife.
|
|
(6)
|
Includes an aggregate of 4,250,000 shares of common stock that are indirectly owned by Mr. Ralls. Of these shares, 225,000 shares are held in Mr. Ralls’ IRA account, 25,000 shares are held in Mrs Ralls’ IRA account and 4,000,000 are held by Lacuna Hedge Fund LLLP (“Lacuna Hedge”) and are indirectly owned by Lacuna, LLC (“Lacuna LLC”) and Lacuna Hedge GP LLLP (“Lacuna Hedge GP”). Lacuna LLC is the sole general partner of Lacuna Hedge GP, which is the sole general partner of Lacuna Hedge. Neither Lacuna LLC nor Lacuna Hedge GP directly owns any securities of the Company. Each of Lacuna LLC and Lacuna Hedge GP disclaims beneficial ownership of the shares held by Lacuna Hedge, except to the extent of its pecuniary interest therein. Mr. Ralls is a member of Lacuna LLC. Mr. Ralls disclaims beneficial ownership of the shares held by Lacuna Hedge, except to the extent of his pecuniary interest therein.
|
|
Beneficial Ownership of
Common Stock
|
||||||||
|
Name and Address of Beneficial Owner
|
Number of
Shares
Beneficially
Owned
|
Percent of
Class
(1)
|
||||||
|
Lacuna, LLC
1100 Spruce Street, Suite 202
Boulder, CO 80302
|
4,000,000
|
(2)
|
9.9
|
%
|
||||
|
Elliot Noss
96 Mowat Avenue
Toronto, ON M6K 3M1
|
3,212,808
|
(3)
|
7.5
|
%
|
||||
|
(1)
|
Based on 40,213,850 shares outstanding as of March 5, 2013.
|
|
(2)
|
As disclosed on Form 4, filed with the SEC on August 20, 2012 by Mr. Ralls. These shares are held by Lacuna Hedge Fund LLLP (“Lacuna Hedge”) and are indirectly owned by Lacuna, LLC (“Lacuna LLC”) and Lacuna Hedge GP LLLP (“Lacuna Hedge GP”). Lacuna LLC serves as the sole general partner of Lacuna Hedge GP, which serves as the sole general partner of Lacuna Hedge. Neither Lacuna LLC nor Lacuna Hedge GP directly owns any securities of the Issuer. Each of Lacuna LLC and Lacuna Hedge GP disclaims beneficial ownership of the securities held by Lacuna Hedge, except to the extent of its pecuniary interest therein. Mr. Ralls is a member of Lacuna LLC. Mr. Ralls disclaims beneficial ownership of the securities held by Lacuna Hedge, except to the extent of his pecuniary interest therein.
|
|
(3)
|
As disclosed on Form 4A, filed with the SEC on February 26, 2013 by Mr. Noss. These shares includes an aggregate of 786,883 shares of common stock that are indirectly owned by Mr. Noss. Of these shares, Mr. Noss and his wife share investment and voting power over 90,072 shares held in three RRSP accounts belonging to Mr. Noss’ wife, 589,942 shares are held in Mr. Noss’ RRSP accounts and 106,869 shares are held by two separate family trusts for which Mr. Noss is the trustee.
|
|
Plan category
|
Number of securities to be issued upon exercise of outstanding options,
warrants and rights (#)
|
Weighted average exercise price of
outstanding options, warrants and rights ($)
|
Number of securities remaining available for
future issuance under the plan (excluding securities reflected in the first column) (#)
|
|||||||||
|
Equity compensation plans approved by security holders:
|
||||||||||||
|
2006 Equity Compensation Plan
|
5,038,987
|
$
|
0.79
|
1,624,628
|
||||||||
|
1996 Equity Compensation Plan
|
3,553,699
|
$
|
0.42
|
—
|
||||||||
|
Equity compensation plans not approved by security holders
|
—
|
—
|
—
|
|||||||||
|
Total
|
8,592,686
|
$
|
0.64
|
1,624,628
|
||||||||
|
2012 Fees
|
2011 Fees
|
|||||||
|
Audit Fees
(1)
|
$
|
265,500
|
$
|
228,700
|
||||
|
Audit-Related Fees
|
—
|
25,300
|
||||||
|
Tax Fees
(2)
|
127,000
|
109,000
|
||||||
|
All Other Fees
|
—
|
—
|
||||||
|
Total Fees
|
$
|
392,500
|
$
|
363,000
|
||||
|
(1)
|
Consists of fees and expenses for the audit of consolidated financial statements, the reviews of our Quarterly Reports on Form 10-Q and services associated with registration statements.
|
|
(2)
|
Consists of fees and expenses for tax consulting services.
|
|
Exhibit No.
|
Description
|
|
|
3.1
|
Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on November 29, 2007).
|
|
|
3.2
|
Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 29, 2007).
|
|
|
3.3
|
Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by Reference to Exhibit 3.3 filed with Tucows’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012).
|
|
|
10.1*
|
2006 Equity Compensation Plan, as amended and restated effective as of July 29, 2010 (Incorporated by reference to Exhibit 99(d)(1) filed with Tucows’ Schedule TO, as filed with the SEC on September 17, 2010).
|
|
|
10.2*
|
Employment Agreement dated January 22, 2003 between Tucows.com Co. and Elliot Noss (Incorporated by reference to Exhibit 10.5 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2003, as filed with the SEC on March 28, 2004).
|
|
|
10.3*
|
Employment Agreement dated March 11, 2003 between Tucows.com Co. and Michael Cooperman (Incorporated by reference to Exhibit 10.5 filed with Tucows’ annual Report on Form 10-K for the year ended December 31, 2003, as filed with the SEC on March 28, 2004).
|
|
|
10.4
|
Lease between 707932 Ontario Limited and Tucows International Corporation, dated December 10, 1999 (Incorporated by reference to exhibit number 10.9 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2001, as filed with the SEC on April 1, 2002).
|
|
|
10.5
|
Lease extension between 707932 Ontario Limited and Tucows Inc. and Tucows.com Co., dated September 4, 2004 (Incorporated by reference to Exhibit 10.5 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC on March 24, 2005).
|
|
|
10.6*
|
Description of Tucows Fiscal 2004 At Risk Compensation Plan (Incorporated by reference to Exhibit 10.9 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC on March 24, 2005).
|
|
|
10.7
|
Registrar Accreditation Agreement, effective as of June 25, 2005, as amended June 22, 2009, by and between the Internet Corporation for Assigned Names and Numbers and Tucows.com Co. (Incorporated by reference to Exhibit 10.7 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC on March 22, 2011).
|
|
|
10.8
|
Registry-Registrar Agreement, dated as of October 4, 2001, by and between VeriSign, Inc. and Tucows Inc. (Incorporated by reference to Exhibit 10.13 filed with Amendment No. 1 to Tucows’ registration statement on Form S-1 (Registration No. 333-125843), as filed with the SEC on July 7, 2005).
|
|
10.11
|
Loan Agreement, dated as of June 25, 2007, by and among Tucows.com Co., Tucows (Delaware) Inc., Tucows Inc., Mailbank Nova Scotia Co., Tucows Domain Holdings Co., Innerwise, Inc. and Bank of Montreal (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
|
|
Exhibit No.
|
Description
|
|
|
10.12
|
Guaranty, dated July 25, 2007, by Tucows Inc. in favor of Bank of Montreal (Incorporated by reference to Exhibit 10.2 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
|
|
|
10.13
|
Security Agreement, dated July 25, 2007, by Tucows Inc. in favor of Bank of Montreal (Incorporated by reference to Exhibit 10.3 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
|
|
|
10.14
|
Financing Commitment, dated July 19, 2007, by and between Tucows.com Co. and Bank of Montreal (Incorporated by reference to Exhibit 10.3 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
|
|
|
10.15
|
Operating Loan Agreement, dated September 10, 2010, between Tucows.com Co. and the Bank of Montreal. (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on September 13, 2010).
|
|
|
10.16
|
Offer Letter, dated August 30, 2010, between Tucows Inc. and the Bank of Montreal. (Incorporated by reference to Exhibit 10.2 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on September 13, 2010).
|
|
|
10.17
|
Offer Letter, dated July 27, 2011, between Tucows.com Co and the Bank of Montreal (incorporated herein by reference to Exhibit 10.1 to Tucows Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 3, 2011).
|
|
|
10.18
|
Letter of Acknowledgment, dated December 13, 2011, between Tucows.com Co and the Bank of Montreal. (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 13, 2011).
|
|
|
10.19
|
Offer Letter, dated November 19, 2012, between Tucwos.com Co. and the Bank of Montreal (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on November 21, 2012).
|
|
|
10.20
|
Amended and Restated Supplemental Agreement, dated December 14, 2012, between Tucows.com Co., Tucows (Delaware), Inc. and the Bank of Montreal (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 20, 2012).
|
|
|
10.21
|
Guaranty, dated December 14, 2012, by Ting Inc. in favor of the Bank of Montreal (Incorporated by reference to Exhibit 10.2 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 20, 2012).
|
|
|
10.22
|
Security Agreement, dated December 14, 2012, by Ting Inc. in favor of the Bank of Montreal (Incorporated by reference to Exhibit 10.3 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 20, 2012).
|
|
|
21.1#
|
Subsidiaries of Tucows Inc.
|
|
|
23.1#
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm.
|
|
|
31.1#
|
Chief Executive Officer’s Rule 13a-14(a)/15d-14(a) Certification.
|
|
|
31.2#
|
Chief Financial Officer’s Rule 13a-14(a)/15d-14(a) Certification.
|
|
|
32.1#
|
Chief Executive Officer’s Section 1350 Certification.
|
|
|
32.2#
|
Chief Financial Officer’s Section 1350 Certification.
|
|
*
|
Management or compensatory contract required to be filed pursuant to Item 15(c) of the requirements for Form 10-K reports.
|
|
#
|
Filed herewith.
|
|
Pages
|
|
|
Consolidated Financial Statements of Tucows Inc.
|
F-1
|
|
Management’s Report on Internal Control over Financial Reporting
|
F-2
|
|
Report of Independent Registered Public Accounting Firm
|
F-3
|
|
Consolidated Balance Sheets as of December 31, 2012 and 2011
|
F-4
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2012, 2011 and 2010
|
F-5
|
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2012, 2011 and 2010
|
F-6
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010
|
F-7
|
|
Notes to Consolidated Financial Statements
|
F-8
|
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
|
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America;
|
|
•
|
Provide reasonable assurance that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
|
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
|
|
/s/
Elliot Noss
|
/s/
Michael Cooperman
|
|
|
Elliot Noss
|
Michael Cooperman
|
|
|
President and Chief Executive Officer
|
Chief Financial Officer
|
|
|
(Principal Executive Officer)
|
(Principal Financial Officer)
|
|
|
March 15, 2013
|
March 15, 2013
|
|
/s/ KPMG LLP
|
|
|
Chartered Accountants, Licensed Public Accountants
Toronto, Canada
|
|
|
March 12, 2013
|
|
December 31,
2012
|
December 31,
2011
|
|||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 6,415,679 | $ | 6,408,209 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $73,970 as of December 31, 2012 and $57,415 as of December 31, 2011
|
4,413,265 | 3,880,184 | ||||||
|
Inventory
|
587,104 | 205,597 | ||||||
|
Prepaid expenses and deposits
|
5,081,408 | 3,756,308 | ||||||
|
Derivative instrument asset, current portion (note 4)
|
412,944 | - | ||||||
|
Prepaid domain name registry and ancillary services fees, current portion
|
45,170,167 | 43,209,033 | ||||||
|
Income taxes recoverable
|
1,730,631 | 867,093 | ||||||
|
Total current assets
|
63,811,198 | 58,326,424 | ||||||
|
Derivative instrument asset, long-term portion (note 4)
|
31,838 | 87,023 | ||||||
|
Prepaid domain name registry and ancillary services fees, long-term portion
|
12,318,723 | 12,600,154 | ||||||
|
Property and equipment (note 5)
|
1,352,144 | 1,437,564 | ||||||
|
Deferred financing charges
|
- | 2,300 | ||||||
|
Deferred tax asset, long-term portion (note 10)
|
5,970,462 | 6,880,377 | ||||||
|
Intangible assets (note 6)
|
16,415,651 | 17,482,590 | ||||||
|
Goodwill (note 3)
|
18,873,127 | 18,873,127 | ||||||
|
Total assets
|
$ | 118,773,143 | $ | 115,689,559 | ||||
|
Liabilities and Stockholders' Equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 1,928,459 | $ | 1,051,115 | ||||
|
Accrued liabilities
|
2,522,229 | 2,081,968 | ||||||
|
Customer deposits
|
4,955,671 | 4,202,899 | ||||||
|
Derivative instrument liability, current portion (note 4)
|
- | 781,027 | ||||||
|
Loan payable, current portion (note 7)
|
3,700,000 | 850,000 | ||||||
|
Deferred revenue, current portion
|
54,997,887 | 52,683,546 | ||||||
|
Accreditation fees payable, current portion
|
512,847 | 555,869 | ||||||
|
Deferred tax liability, current portion (note 10)
|
914,429 | 880,008 | ||||||
|
Income taxes payable (note10)
|
1,255,108 | 158,258 | ||||||
|
Total current liabilities
|
70,786,630 | 63,244,690 | ||||||
|
Derivative instrument liability, long-term portion (note 4)
|
- | 5,479 | ||||||
|
Deferred revenue, long-term portion
|
16,002,464 | 16,492,155 | ||||||
|
Accreditation fees payable, long-term portion
|
145,592 | 156,061 | ||||||
|
Deferred rent, long-term portion
|
54,150 | 26,487 | ||||||
|
Deferred tax liability, long-term portion (note 10)
|
5,234,100 | 5,345,700 | ||||||
|
Stockholders' equity (note 8)
|
||||||||
|
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding
|
- | - | ||||||
|
Common stock - no par value, 250,000,000 shares authorized; 44,322,159 shares issued and outstanding as of December 31, 2012 and 53,497,584 shares issued and outstanding as of December 31, 2011
|
10,084,417 | 11,358,959 | ||||||
|
Additional paid-in capital
|
33,931,529 | 40,994,013 | ||||||
|
Deficit
|
(17,509,843 | ) | (21,933,985 | ) | ||||
|
Accumulated other comprehensive income
|
44,104 | - | ||||||
|
Total stockholders' equity
|
26,550,207 | 30,418,987 | ||||||
|
Total liabilities and stockholders' equity
|
$ | 118,773,143 | $ | 115,689,559 | ||||
| Year ended December 31, | ||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Net revenues (note 16)
|
$ | 114,726,901 | $ | 97,064,967 | $ | 84,578,505 | ||||||
|
Cost of revenues (note 16):
|
||||||||||||
|
Cost of revenues
|
82,837,395 | 68,088,387 | 58,494,849 | |||||||||
|
Network expenses (*)
|
4,925,058 | 4,837,650 | 4,648,899 | |||||||||
|
Depreciation of property and equipment
|
611,640 | 750,455 | 1,032,368 | |||||||||
|
Amortization of intangible assets
|
143,640 | 85,590 | 299,208 | |||||||||
|
Total cost of revenues
|
88,517,733 | 73,762,082 | 64,475,324 | |||||||||
|
Gross profit
|
26,209,168 | 23,302,885 | 20,103,181 | |||||||||
|
Expenses:
|
||||||||||||
|
Sales and marketing (*)
|
8,701,446 | 7,442,681 | 7,217,754 | |||||||||
|
Technical operations and development (*)
|
4,302,820 | 4,868,228 | 4,577,898 | |||||||||
|
General and administrative (*)
|
6,610,819 | 6,096,596 | 5,123,074 | |||||||||
|
Depreciation of property and equipment
|
190,420 | 187,005 | 170,844 | |||||||||
|
Loss on disposition of property and equipment
|
118,944 | 42,165 | - | |||||||||
|
Amortization of intangible assets
|
876,120 | 1,004,950 | 1,442,160 | |||||||||
|
Loss (gain) on currency forward contracts (note 2(l))
|
(682,851 | ) | 535,223 | (872,539 | ) | |||||||
|
Total expenses
|
20,117,718 | 20,176,848 | 17,659,191 | |||||||||
|
Income from operations
|
6,091,450 | 3,126,037 | 2,443,990 | |||||||||
|
Other income (expense):
|
||||||||||||
|
Interest expense, net
|
(192,863 | ) | (50,404 | ) | (116,197 | ) | ||||||
|
Other income, net (note 11)
|
529,711 | 374,977 | - | |||||||||
|
Total other income (expense)
|
336,848 | 324,573 | (116,197 | ) | ||||||||
|
Income before provision for income taxes
|
6,428,298 | 3,450,610 | 2,327,793 | |||||||||
|
Provision for (recovery of) income taxes (note 10)
|
2,004,156 | (2,719,621 | ) | 210,845 | ||||||||
|
Net income
|
4,424,142 | 6,170,231 | 2,116,948 | |||||||||
|
Other comprehensive income, net of tax of $22,975
|
$ | 44,104 | - | - | ||||||||
|
Comprehensive income for the year
|
$ | 4,468,246 | $ | 6,170,231 | $ | 2,116,948 | ||||||
|
Basic earnings per common share (note 12)
|
$ | 0.10 | $ | 0.12 | $ | 0.04 | ||||||
|
Shares used in computing basic earnings per common share (note 12)
|
45,832,862 | 53,454,675 | 57,982,248 | |||||||||
|
Diluted earnings per common share (note 12)
|
$ | 0.09 | $ | 0.11 | $ | 0.04 | ||||||
|
Shares used in computing diluted earnings per common share (note 12)
|
49,134,944 | 55,749,433 | 59,955,788 | |||||||||
|
Netwrok expenses
|
$ | 24,480 | $ | 22,972 | $ | 22,406 | ||||||
|
Sales and marketing
|
$ | 92,168 | $ | 91,244 | $ | 96,300 | ||||||
|
Technical operations and development
|
$ | 59,141 | $ | 51,984 | $ | 71,012 | ||||||
|
General and administrative
|
$ | 184,910 | $ | 144,756 | $ | 210,284 |
|
Common stock
|
Additional
paid in
|
Accumulated
Other
|
Total
stockholders'
|
|||||||||||||||||||||
|
Number
|
Amount
|
capital
|
Deficit
|
Income
|
equity
|
|||||||||||||||||||
|
Balances, December 31, 2009
|
67,080,353 | $ | 14,030,384 | $ | 47,287,351 | $ | (30,221,164 | ) | $ | - | $ | 31,096,571 | ||||||||||||
|
Exercise of stock options
|
33,678 | 27,350 | (12,541 | ) | - | - | 14,809 | |||||||||||||||||
|
Repurchase and retirement of shares (note 8)
|
(13,664,340 | ) | (2,732,868 | ) | (6,974,225 | ) | - | - | (9,707,093 | ) | ||||||||||||||
|
Cancellation of restricted stock
|
(1,100 | ) | - | - | - | - | - | |||||||||||||||||
|
Stock-based compensation (note 9)
|
- | - | 400,002 | - | - | 400,002 | ||||||||||||||||||
|
Net income
|
- | - | - | 2,116,948 | - | 2,116,948 | ||||||||||||||||||
|
Balances, December 31, 2010
|
53,448,591 | 11,324,866 | 40,700,587 | (28,104,216 | ) | - | 23,921,237 | |||||||||||||||||
|
Exercise of stock options
|
73,708 | 38,846 | (7,500 | ) | - | - | 31,346 | |||||||||||||||||
|
Repurchase and retirement of shares (note 8)
|
(23,765 | ) | (4,753 | ) | (13,689 | ) | - | - | (18,442 | ) | ||||||||||||||
|
Cancellation of restricted stock
|
(950 | ) | - | - | - | - | - | |||||||||||||||||
|
Other proceeds
|
- | - | 3,659 | - | - | 3,659 | ||||||||||||||||||
|
Stock-based compensation (note 9)
|
- | - | 310,956 | - | - | 310,956 | ||||||||||||||||||
|
Net income
|
- | - | - | 6,170,231 | - | 6,170,231 | ||||||||||||||||||
|
Balances, December 31, 2011
|
53,497,584 | 11,358,959 | 40,994,013 | (21,933,985 | ) | - | 30,418,987 | |||||||||||||||||
|
Exercise of stock options
|
766,340 | 713,746 | (295,638 | ) | - | - | 418,108 | |||||||||||||||||
|
Repurchase and retirement of shares (note 8)
|
(9,941,440 | ) | (1,988,288 | ) | (7,127,545 | ) | - | - | (9,115,833 | ) | ||||||||||||||
|
Cancellation of restricted stock
|
(325 | ) | - | - | - | - | - | |||||||||||||||||
|
Stock-based compensation (note 9)
|
- | - | 360,699 | - | - | 360,699 | ||||||||||||||||||
|
Net income
|
- | - | - | 4,424,142 | - | 4,424,142 | ||||||||||||||||||
|
Other comprehensive income
|
- | - | - | - | 44,104 | 44,104 | ||||||||||||||||||
|
Balances, December 31, 2012
|
44,322,159 | $ | 10,084,417 | $ | 33,931,529 | $ | (17,509,843 | ) | $ | 44,104 | $ | 26,550,207 | ||||||||||||
| Year ended December 31, | ||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Cash provided by:
|
||||||||||||
|
Operating activities:
|
||||||||||||
|
Net income for the year
|
$ | 4,424,142 | $ | 6,170,231 | $ | 2,116,948 | ||||||
|
Items not involving cash:
|
||||||||||||
|
Depreciation of property and equipment
|
802,060 | 937,460 | 1,203,212 | |||||||||
|
Loss on disposition of property and equipment
|
118,944 | 42,165 | - | |||||||||
|
Amortization of deferred financing charges
|
2,300 | 13,300 | 25,400 | |||||||||
|
Amortization of intangible assets
|
1,019,760 | 1,090,540 | 1,741,368 | |||||||||
|
Deferred income taxes (recovery)
|
832,736 | (3,046,669 | ) | - | ||||||||
|
Deferred rent
|
27,663 | 26,487 | - | |||||||||
|
Acquisition of domain names
|
(3,664 | ) | - | - | ||||||||
|
Disposal of domain names
|
50,843 | 34,071 | 31,584 | |||||||||
|
Gain on disposition of intangible assets
|
(508,800 | ) | - | - | ||||||||
|
(Gain) loss on change in the fair value of forward contracts
|
(1,100,161 | ) | 1,533,443 | 1,370,710 | ||||||||
|
Stock-based compensation
|
360,699 | 310,956 | 400,002 | |||||||||
|
Change in non-cash operating working capital:
|
||||||||||||
|
Accounts receivable
|
(533,081 | ) | (270,594 | ) | (199,950 | ) | ||||||
|
Inventory
|
(381,507 | ) | (205,597 | ) | - | |||||||
|
Prepaid expenses and deposits
|
(1,325,100 | ) | (923,909 | ) | 135,046 | |||||||
|
Prepaid domain name registry and ancillary services fees
|
(1,679,703 | ) | (4,855,039 | ) | (6,114,599 | ) | ||||||
|
Income taxes recoverable
|
233,312 | (261,215 | ) | 54,000 | ||||||||
|
Accounts payable
|
931,467 | (611,532 | ) | (35,210 | ) | |||||||
|
Accrued liabilities
|
547,590 | 515,931 | (571,930 | ) | ||||||||
|
Customer deposits
|
752,772 | 209,984 | 335,995 | |||||||||
|
Deferred revenue
|
1,824,650 | 5,179,716 | 6,260,225 | |||||||||
|
Accreditation fees payable
|
(53,491 | ) | (4,460 | ) | 16,114 | |||||||
|
Net cash provided by operating activities
|
6,343,431 | 5,885,269 | 6,768,915 | |||||||||
|
Financing activities:
|
||||||||||||
|
Proceeds received on exercise of stock options
|
418,108 | 31,346 | 14,809 | |||||||||
|
Repurchase of common stock
|
(9,115,833 | ) | (18,442 | ) | (9,707,093 | ) | ||||||
|
Proceeds received on short swing sale
|
- | 3,659 | - | |||||||||
|
Proceeds received on loan payable
|
4,000,000 | 2,530,000 | - | |||||||||
|
Repayment of loan payable
|
(1,150,000 | ) | (2,985,883 | ) | (1,914,242 | ) | ||||||
|
Net cash used in financing activities
|
(5,847,725 | ) | (439,320 | ) | (11,606,526 | ) | ||||||
|
Investing activities:
|
||||||||||||
|
Additions to property and equipment
|
(997,036 | ) | (851,008 | ) | (589,054 | ) | ||||||
|
Acquisition of EPAG Domainservices GMBH, net of cash acquired
|
- | (2,392,461 | ) | - | ||||||||
|
Proceeds on disposal of intangible assets
|
508,800 | - | - | |||||||||
|
Net cash (used in) provided by investing activities
|
(488,236 | ) | (3,243,469 | ) | (589,054 | ) | ||||||
|
Increase (decrease) in cash and cash equivalents
|
7,470 | 2,202,480 | (5,426,665 | ) | ||||||||
|
Cash and cash equivalents, beginning of year
|
6,408,209 | 4,205,729 | 9,632,394 | |||||||||
|
Cash and cash equivalents, end of year
|
$ | 6,415,679 | $ | 6,408,209 | $ | 4,205,729 | ||||||
|
Interest paid
|
$ | 195,509 | $ | 53,166 | $ | 116,242 | ||||||
|
Income taxes paid
|
$ | 1,025,000 | $ | 550,000 | $ | 200,685 | ||||||
|
Supplementary disclosure of non-cash investing and financing activities:
|
||||||||||||
|
Property and equipment acquired during the period not yet paid for
|
$ | 96,515 | $ | 257,967 | $ | 273,333 |
|
Asset
|
Rate
|
|||
|
Computer equipment
|
30%
|
|||
|
Computer software
|
100%
|
|||
|
Furniture and equipment
|
20%
|
|||
|
Leasehold improvements
|
Over term of lease
|
|||
|
Accounts receivable
|
$
|
587,595
|
||||||
|
Cash acquired
|
118,477
|
|||||||
|
Prepaid expenses and deposits
|
468,523
|
|||||||
|
Prepaid domain name registry fees
|
1,116,798
|
|||||||
|
Property and equipment
|
29,198
|
|||||||
|
Intangible assets
|
1,723,800
|
|||||||
|
Goodwill
|
882,320
|
|||||||
|
Total assets acquired
|
4,926,711
|
|||||||
|
Accounts payable
|
92,950
|
|||||||
|
Accrued liabilities
|
140,658
|
|||||||
|
Customer deposits
|
32,603
|
|||||||
|
Deferred revenue
|
1,425,182
|
|||||||
|
Income taxes payable
|
172,380
|
|||||||
|
Deferred tax liability
|
552,000
|
|||||||
|
Total liabilities acquired
|
2,415,773
|
|||||||
|
Purchase price
|
$
|
2,510,938
|
||||||
|
Revenues
|
Net loss *
|
|||||||
|
Actual from August 1, 2011 to December 31, 2011
|
$
|
1,588,228
|
$
|
29,184
|
||||
|
Year ended December 31
,
|
||||||||
|
2011
|
2010
|
|||||||
|
Supplemental Unaudited Pro Forma Information
|
||||||||
|
Total revenue
|
$
|
99,299,279
|
$
|
87,341,726
|
||||
|
Net income **
|
$
|
5,903,687
|
$
|
2,300,429
|
||||
|
*
|
Included within net loss for the period reported above are $57,440 of estimated amortization charges relating to the allocated values of intangible assets.
|
|
**
|
Included in pro forma net income are estimated amortization charges relating to the allocated values of intangible assets for all periods reported above.
|
|
Boardtown
Corporation
|
Hosted
Messaging
Assets of
Critical Path
|
Innerwise
Inc.
|
Mailbank.com
Inc.
|
EPAG
Domainservices
GmbH
|
Total
|
|||||||||||||||||||
|
Balances,
December 31, 2010
|
$
|
2,044,847
|
$
|
4,072,297
|
$
|
5,801,040
|
$
|
6,072,623
|
$
|
—
|
$
|
17,990,807
|
||||||||||||
|
Balances,
December 31, 2011
|
$
|
2,044,847
|
$
|
4,072,297
|
$
|
5,801,040
|
$
|
6,072,623
|
$
|
882,320
|
$
|
18,873,127
|
||||||||||||
|
Balances,
December 31, 2012
|
$
|
2,044,847
|
$
|
4,072,297
|
$
|
5,801,040
|
$
|
6,072,623
|
$
|
882,320
|
$
|
18,873,127
|
||||||||||||
|
Balance Sheet
|
Year ended
December 31,
2012
Fair Value
Asset
|
Year ended
December 31,
2011
Fair Value
Asset
|
|||||||
|
Derivatives
|
Location
|
(Liability)
|
(Liability)
|
||||||
|
Foreign currency forward contracts designated as cash flow hedges
|
Derivative instruments
|
$ | 377,703 | $ | — | ||||
|
Foreign currency forward contracts not designated as cash flow hedges
|
Derivative instruments
|
$ | 67,079 | $ | (699,483 | ) | |||
|
Total foreign currency forward contracts
|
Derivative instruments
|
$ | 444,782 | $ | (699,483 | ) | |||
|
Derivatives in Cash Flow
Hedging Relationship
|
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective
Portion)
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective
Portion)
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective
Portion)
|
Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness
Testing)
|
Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness
Testing)
|
|||||||||||||||
|
Foreign currency forward contracts
|
$ | 44,104 | — | — | — | — | ||||||||||||||
|
December 31,
2012
|
December 31,
2011
|
|||||||
|
Computer equipment
|
$
|
6,529,764
|
$
|
7,348,211
|
||||
|
Computer software
|
1,157,609
|
2,659,331
|
||||||
|
Furniture and equipment
|
542,213
|
403,953
|
||||||
|
8,229,586
|
10,411,495
|
|||||||
|
Less:
|
||||||||
|
Accumulated depreciation
|
6,877,442
|
8,973,931
|
||||||
|
$
|
1,352,144
|
$
|
1,437,564
|
|||||
|
Year ended
December 31,
2012
|
Year ended
December 31,
2011
|
Year ended
December 31,
2010
|
||||||||||
|
Depreciation of property and equipment
|
$
|
802,060
|
$
|
937,460
|
$
|
1,203,212
|
||||||
|
Technology
|
Brand
|
Customer
relationships
|
Surname
domain names
|
Direct
navigation
domain names
|
||||||||||||||||||||
|
Amortization period
|
2 - 7
years
|
7
years
|
4 - 7
years
|
indefinite life
|
indefinite life
|
Total
|
||||||||||||||||||
|
Balances, December 31, 2010
|
$
|
25,720
|
$
|
519,780
|
$
|
2,133,260
|
$
|
12,125,918
|
$
|
2,078,723
|
$
|
16,883,401
|
||||||||||||
|
Additions to/(disposals from) domain portfolio, net
|
—
|
—
|
—
|
(5,841
|
)
|
(28,230
|
)
|
(34,071
|
)
|
|||||||||||||||
|
Acquisition of EPAG Domainservices GmbH
|
287,300
|
215,475
|
1,221,025
|
—
|
—
|
1,723,800
|
||||||||||||||||||
|
Amortization expense
|
(85,590
|
)
|
(163,325
|
)
|
(841,625
|
)
|
—
|
—
|
(1,090,540
|
)
|
||||||||||||||
|
Balances, December 31, 2011
|
227,430
|
571,930
|
2,512,660
|
12,120,077
|
2,050,493
|
17,482,590
|
||||||||||||||||||
|
Additions to/(disposals from) domain portfolio, net
|
—
|
—
|
—
|
(10,060
|
)
|
(37,119
|
)
|
(47,179
|
)
|
|||||||||||||||
|
Amortization expense
|
(143,640
|
)
|
(173,640
|
)
|
(702,480
|
)
|
—
|
—
|
(1,019,760
|
)
|
||||||||||||||
|
Balances, December 31, 2012
|
$
|
83,790
|
$
|
398,290
|
$
|
1,810,180
|
$
|
12,110,017
|
$
|
2,013,374
|
$
|
16,415,651
|
||||||||||||
|
Year ending
December 31,
|
||||
|
2013
|
$
|
959,910
|
||
|
2014
|
596,620
|
|||
|
2015
|
205,320
|
|||
|
2016
|
205,320
|
|||
|
2017
|
205,320
|
|||
|
Total
|
$
|
2,172,490
|
||
|
2013
|
1,000,000
|
|||
|
2014
|
1,000,000
|
|||
|
2015
|
1,000,000
|
|||
|
2016
|
700,000
|
|
Year ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Volatility
|
52.1
|
%
|
73.7
|
%
|
71.9
|
%
|
||||||
|
Risk-free interest rate
|
0.5
|
%
|
0.8
|
%
|
1.9
|
%
|
||||||
|
Expected life (in years)
|
4.0
|
4.0
|
4.4
|
|||||||||
|
Dividend yield
|
—
|
%
|
—
|
%
|
—
|
%
|
||||||
|
The weighted average grant date fair value for options issued, with the exercise price equal to market value on the date of grant
|
$
|
0.56
|
$
|
0.38
|
$
|
0.39
|
||||||
|
Year ended
December 31, 2012
|
Year ended
December 31, 2011
|
Year ended
December 31, 2010
|
||||||||||||||||||||||
|
Number
of
shares
|
Weighted average
exercise price
per share
|
Number of
shares
|
Weighted average
exercise price
per share
|
Number
of shares
|
Weighted average
exercise price
per share
|
|||||||||||||||||||
|
Outstanding, beginning of year
|
8,746,041
|
$
|
0.57
|
8,272,249
|
$
|
0.56
|
7,213,977
|
$
|
0.56
|
|||||||||||||||
|
Granted
|
779,000
|
1.36
|
706,000
|
0.74
|
1,804,000
|
0.69
|
||||||||||||||||||
|
Exercised
|
(766,340
|
)
|
0.55
|
(73,708
|
)
|
0.43
|
(33,678
|
)
|
0.44
|
|||||||||||||||
|
Forfeited
|
(163,001
|
)
|
0.80
|
(98,500
|
)
|
0.69
|
(204,959
|
)
|
0.66
|
|||||||||||||||
|
Expired
|
(3,014
|
)
|
0.44
|
(60,000
|
)
|
0.80
|
(507,091
|
)
|
1.02
|
|||||||||||||||
|
Outstanding, end of year
|
8,592,686
|
$
|
0.64
|
8,746,041
|
$
|
0.57
|
8,272,249
|
$
|
0.56
|
|||||||||||||||
|
Options exercisable, end of year
|
7,090,892
|
$
|
0.57
|
7,042,415
|
$
|
0.54
|
6,205,248
|
$
|
0.51
|
|||||||||||||||
|
Options outstanding
|
Options exercisable
|
|||||||||||||||||||||||||||||||
|
Exercise price
|
Number
outstanding
|
Weighted average
exercise price
per share
|
Weighted average
remaining
contractual
life (years)
|
Aggregate
intrinsic
value
|
Number
exercisable
|
Weighted average
exercise
price
per share
|
Aggregate
intrinsic
value
|
|||||||||||||||||||||||||
| $ | 0.31 | - | $0.48 |
3,130,574
|
$
|
0.38
|
0.6
|
$
|
3,333,310
|
3,130,574
|
$
|
0.38
|
$
|
3,333,310
|
||||||||||||||||||
| $ | 0.56 | - | $0.75 |
3,790,112
|
$
|
0.66
|
3.3
|
2,970,677
|
2,823,318
|
$
|
0.64
|
2,264,948
|
||||||||||||||||||||
| $ | 0.80 | - | $1.38 |
1,672,000
|
$
|
1.08
|
3.4
|
594,960
|
1,137,000
|
$
|
0.96
|
548,010
|
||||||||||||||||||||
|
8,592,686
|
$
|
0.64
|
$
|
6,898,947
|
7,090,892
|
$
|
0.57
|
$
|
6,146,268
|
|||||||||||||||||||||||
|
Year ended
December 31,
2012
|
Year ended
December 31,
2011
|
Year ended
December 31,
2010
|
||||||||||
|
Income for the year before provision for income taxes
|
$
|
6,428,298
|
$
|
3,450,610
|
$
|
2,327,793
|
||||||
|
Computed expected tax expense
|
$
|
2,185,621
|
$
|
1,173,207
|
$
|
791,450
|
||||||
|
Increase (reduction) in income tax expense resulting from:
|
||||||||||||
|
State income taxes
|
16,071
|
8,627
|
5,819
|
|||||||||
|
Permanent differences, including foreign exchange
|
21,728
|
13,700
|
(22,812
|
)
|
||||||||
|
Investment tax credits recovered
|
(106,941
|
)
|
(41,833
|
)
|
(50,311
|
)
|
||||||
|
Other, including alternative minimum tax and adjustments to opening deferred tax assets
|
(112,323
|
)
|
(218,252
|
)
|
82,928
|
|||||||
|
Change in beginning of the year balance of the valuation allowance allocated to income tax expense
|
—
|
(3,655,070
|
)
|
(596,229
|
)
|
|||||||
|
Provision for (recovery of) income taxes
|
$
|
2,004,156
|
$
|
(2,719,621
|
)
|
$
|
210,845
|
|||||
|
December 31,
2012
|
December 31,
2011
|
|||||||
|
Deferred tax assets:
|
||||||||
|
Deferred revenue
|
$
|
5,429,220
|
$
|
5,648,563
|
||||
|
Amortization
|
541,242
|
1,231,814
|
||||||
|
Total gross deferred tax assets
|
5,970,462
|
6,880,377
|
||||||
|
Less valuation allowance
|
—
|
—
|
||||||
|
Net deferred tax assets
|
$
|
5,970,462
|
$
|
6,880,377
|
||||
|
Deferred income tax asset, current portion
|
—
|
—
|
||||||
|
Deferred income tax asset, long-term portion
|
5,970,462
|
6,880,377
|
||||||
|
$
|
5,970,462
|
$
|
6,880,377
|
|||||
|
Deferred tax liabilities:
|
||||||||
|
Reserves and other
|
$
|
(914,429
|
)
|
$
|
(880,008
|
)
|
||
|
Limited life intangible assets
|
(394,100
|
)
|
(505,700
|
)
|
||||
|
Indefinite life intangible assets
|
(4,840,000
|
)
|
(4,840,000
|
)
|
||||
|
Total deferred tax liabilities
|
(6,148,529
|
)
|
(6,225,708
|
)
|
||||
|
Less deferred tax liability, current portion
|
(914,429
|
)
|
(880,008
|
)
|
||||
|
Deferred tax liability, long-term portion
|
$
|
(5,234,100
|
)
|
$
|
(5,345,700
|
)
|
||
|
Total Gross
Unrecognized
Tax Benefits
|
||||
|
Balance as at December 31, 2011
|
$
|
167,000
|
||
|
Increase in uncertain tax benefits for the current year
|
100,000
|
|||
|
Increase in uncertain tax benefits for the prior year
|
165,000
|
|||
|
Decrease in uncertain tax benefits of prior years
|
(50,000
|
)
|
||
|
Balance as at December 31, 2012
|
$
|
382,000
|
||
|
Year ended
December 31,
2012
|
Year ended
December 31,
2011
|
Year ended
December 31,
2010
|
||||||||||
|
Numerator for basic and diluted earnings per common share:
|
||||||||||||
|
Net income for the year
|
$
|
4,424,142
|
$
|
6,170,231
|
$
|
2,116,948
|
||||||
|
Denominator for basic and diluted earnings per common share:
|
||||||||||||
|
Basic weighted average number of common shares outstanding
|
45,832,862
|
53,454,675
|
57,982,248
|
|||||||||
|
Effect of stock options
|
3,302,082
|
2,294,758
|
1,973,540
|
|||||||||
|
Diluted weighted average number of shares outstanding
|
49,134,944
|
55,749,433
|
59,955,788
|
|||||||||
|
Basic earnings per common share
|
$
|
0.10
|
$
|
0.12
|
$
|
0.04
|
||||||
|
Diluted earnings per common share
|
$
|
0.09
|
$
|
0.11
|
$
|
0.04
|
||||||
|
2013
|
$
|
2,017,000
|
||
|
2014
|
1,543,000
|
|||
|
2015
|
1,481,000
|
|||
|
2016
|
995,000
|
|||
|
2017
|
953,000
|
|||
|
Thereafter
|
1,584,000
|
|
December 31, 2012
|
||||||||||||||||
|
Fair Value Measurement Using
|
Assets at
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
|
Derivative instrument asset
|
$ | — | $ | 444,782 | $ | — | $ | 444,782 | ||||||||
|
Total Assets
|
$ | — | $ | 444,782 | $ | — | $ | 444,782 | ||||||||
|
December 31, 2011
|
||||||||||||||||
|
Fair Value Measurement Using
|
Assets at
|
|||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
|
Derivative instrument asset
|
$ | — | $ | 87,023 | $ | — | $ | 87,023 | ||||||||
|
Total Assets
|
$ | — | $ | 87,023 | $ | — | $ | 87,023 | ||||||||
|
Derivative instrument liability
|
$ | — | $ | 786,506 | $ | — | $ | 786,506 | ||||||||
|
Total Liabilities
|
$ | — | $ | 786,506 | $ | — | $ | 786,506 | ||||||||
|
Year ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Wholesale:
|
||||||||||||
|
Domain Services
|
$
|
87,434,450
|
$
|
76,201,058
|
$
|
64,977,121
|
||||||
|
Value Added Services
|
10,586,460
|
9,268,460
|
8,978,922
|
|||||||||
|
Total Wholesale
|
98,020,910
|
85,469,518
|
73,956,043
|
|||||||||
|
Retail
|
10,740,844
|
5,263,118
|
4,559,833
|
|||||||||
|
Portfolio
|
5,965,147
|
6,332,331
|
6,062,629
|
|||||||||
|
$
|
114,726,901
|
$
|
97,064,967
|
$
|
84,578,505
|
|||||||
|
Year ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Wholesale:
|
||||||||||||
|
Domain Services
|
$
|
73,168,196
|
$
|
63,491,433
|
$
|
54,087,893
|
||||||
|
Value Added Services
|
2,032,328
|
1,969,374
|
1,996,317
|
|||||||||
|
Total Wholesale
|
75,200,524
|
65,460,807
|
56,084,210
|
|||||||||
|
Retail
|
6,804,863
|
1,881,063
|
1,527,727
|
|||||||||
|
Portfolio
|
832,008
|
746,517
|
882,912
|
|||||||||
|
Network, other costs
|
4,925,058
|
4,837,650
|
4,648,899
|
|||||||||
|
Network, depreciation and amortization costs
|
755,280
|
836,045
|
1,331,576
|
|||||||||
|
$
|
88,517,733
|
$
|
73,762,082
|
$
|
64,475,324
|
|||||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Canada
|
$
|
1,026,570
|
$
|
1,027,122
|
||||
|
United States
|
306,679
|
390,231
|
||||||
|
Germany
|
18,895
|
20,211
|
||||||
|
$
|
1,352,144
|
$
|
1,437,564
|
|||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Canada
|
$
|
1,062,100
|
$
|
1,732,900
|
||||
|
Germany
|
1,230,160
|
1,579,120
|
||||||
|
$
|
2,292,260
|
$
|
3,312,020
|
|||||
|
Year ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
Canada
|
$
|
5,970,462
|
$
|
6,880,377
|
||||
|
$
|
5,970,462
|
$
|
6,880,377
|
|||||
|
Balance at
beginning year
|
Charged to
(recovered)
costs and
expenses
|
Write-offs
during year
|
Balance at
end of year
|
|||||||||||||
|
Allowance for doubtful accounts, including provision for credit notes
|
||||||||||||||||
|
2012
|
$
|
62,415
|
$
|
16,555
|
$
|
—
|
$
|
78,970
|
||||||||
|
2011
|
$
|
65,000
|
$
|
(2,585
|
)
|
$
|
—
|
$
|
62,415
|
|||||||
|
2010
|
$
|
115,000
|
$
|
(50,000
|
)
|
$
|
—
|
$
|
65,000
|
|||||||
|
Valuation allowance for deferred tax asset:
|
||||||||||||||||
|
2012
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
|
2011
|
$
|
3,655,070
|
$
|
(3,655,070
|
)
|
$
|
—
|
$
|
—
|
|||||||
|
2010
|
$
|
4,251,000
|
$
|
(595,930
|
)
|
$
|
—
|
$
|
3,655,070
|
|||||||
|
Exhibit No.
|
Description
|
|
|
3.1
|
Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on November 29, 2007).
|
|
|
3.2
|
Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 29, 2007).
|
|
|
3.3
|
Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by Reference to Exhibit 3.3 filed with Tucows’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012).
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10.1*
|
2006 Equity Compensation Plan, as amended and restated effective as of July 29, 2010 (Incorporated by reference to Exhibit 99(d)(1) filed with Tucows’ Schedule TO, as filed with the SEC on September 17, 2010).
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10.2*
|
Employment Agreement dated January 22, 2003 between Tucows.com Co. and Elliot Noss (Incorporated by reference to Exhibit 10.5 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2003, as filed with the SEC on March 28, 2004).
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10.3*
|
Employment Agreement dated March 11, 2003 between Tucows.com Co. and Michael Cooperman (Incorporated by reference to Exhibit 10.5 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2003, as filed with the SEC on March 28, 2004).
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10.4
|
Lease between 707932 Ontario Limited and Tucows International Corporation, dated December 10, 1999 (Incorporated by reference to exhibit number 10.9 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2001, as filed with the SEC on April 1, 2002).
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10.5
|
Lease extension between 707932 Ontario Limited and Tucows Inc. and Tucows.com Co., dated September 4, 2004 (Incorporated by reference to Exhibit 10.5 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC on March 24, 2005).
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10.6*
|
Description of Tucows Fiscal 2004 At Risk Compensation Plan (Incorporated by reference to Exhibit 10.9 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the SEC on March 24, 2005).
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10.7
|
Registrar Accreditation Agreement, effective as of June 25, 2005, as amended June 22, 2009, by and between the Internet Corporation for Assigned Names and Numbers and Tucows.com Co. (Incorporated by reference to Exhibit 10.7 filed with Tucows’ Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC on March 22, 2011).
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10.8
|
Registry-Registrar Agreement, dated as of October 4, 2001, by and between VeriSign, Inc. and Tucows Inc. (Incorporated by reference to Exhibit 10.13 filed with Amendment No. 1 to Tucows’ registration statement on Form S-1 (Registration No. 333-125843), as filed with the SEC on July 7, 2005).
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10.11
|
Loan Agreement, dated as of June 25, 2007, by and among Tucows.com Co., Tucows (Delaware) Inc., Tucows Inc., Mailbank Nova Scotia Co., Tucows Domain Holdings Co., Innerwise, Inc. and Bank of Montreal (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
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|
Exhibit No.
|
Description
|
|
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10.12
|
Guaranty, dated July 25, 2007, by Tucows Inc. in favor of Bank of Montreal (Incorporated by reference to Exhibit 10.2 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
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10.13
|
Security Agreement, dated July 25, 2007, by Tucows Inc. in favor of Bank of Montreal (Incorporated by reference to Exhibit 10.3 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
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10.14
|
Financing Commitment, dated July 19, 2007, by and between Tucows.com Co. and Bank of Montreal (Incorporated by reference to Exhibit 10.3 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on July 31, 2007).
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|
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10.15
|
Operating Loan Agreement, dated September 10, 2010, between Tucows.com Co. and the Bank of Montreal. (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on September 13, 2010).
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|
10.16
|
Offer Letter, dated August 30, 2010, between Tucows Inc. and the Bank of Montreal. (Incorporated by reference to Exhibit 10.2 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on September 13, 2010).
|
|
|
10.17
|
Offer Letter, dated July 27, 2011, between Tucows.com Co and the Bank of Montreal (incorporated herein by reference to Exhibit 10.1 to Tucows Inc.’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 3, 2011).
|
|
|
10.18
|
Letter of Acknowledgment, dated December 13, 2011, between Tucows.com Co and the Bank of Montreal. (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 13, 2011).
|
|
|
10.19
|
Offer Letter, dated November 19, 2012, between Tucwos.com Co. and the Bank of Montreal (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on November 21, 2012).
|
|
|
10.20
|
Amended and Restated Supplemental Agreement, dated December 14, 2012, between Tucows.com Co., Tucows (Delaware), Inc. and the Bank of Montreal (Incorporated by reference to Exhibit 10.1 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 20, 2012).
|
|
|
10.21
|
Guaranty, dated December 14, 2012, by Ting Inc. in favor of the Bank of Montreal (Incorporated by reference to Exhibit 10.2 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 20, 2012).
|
|
|
10.22
|
Security Agreement, dated December 14, 2012, by Ting Inc. in favor of the Bank of Montreal (Incorporated by reference to Exhibit 10.3 filed with Tucows’ Current Report on Form 8-K, as filed with the SEC on December 20, 2012).
|
|
|
21.1#
|
Subsidiaries of Tucows Inc.
|
|
|
23.1#
|
Consent of KPMG LLP, Independent Registered Public Accounting Firm.
|
|
|
31.1#
|
Chief Executive Officer’s Rule 13a-14(a)/15d-14(a) Certification.
|
|
|
31.2#
|
Chief Financial Officer’s Rule 13a-14(a)/15d-14(a) Certification.
|
|
|
32.1#
|
Chief Executive Officer’s Section 1350 Certification.
|
|
|
32.2#
|
Chief Financial Officer’s Section 1350 Certification.
|
|
|
101.INS**
|
XBRL Instance
|
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema
|
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation
|
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition
|
|
|
101.LAB**
|
XBRL Taxonomy Extension Labels
|
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation
|
|
*
|
Management or compensatory contract required to be filed pursuant to Item 15(c) of the requirements for Form 10-K reports.
|
|
** XBRL
|
Information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
|
#
|
Filed herewith.
|
|
Tucows Inc.
|
|||
|
By:
|
/s/
Elliot Noss
|
||
|
Name:
|
Elliot Noss
|
||
|
Title:
|
Chief Executive Officer and President
|
||
|
Signature
|
Title
|
Date
|
||
|
/s/
Elliot Noss
|
President, Chief Executive Officer
|
March 15, 2013
|
||
|
Elliot Noss
|
(Principal Executive Officer) and Director
|
|||
|
/s/
Michael Cooperman
|
Chief Financial Officer (Principal
|
March 15, 2013
|
||
|
Michael Cooperman
|
Financial and Accounting Officer)
|
|||
|
/s/
Stanley Stern
|
Director
|
March 15, 2013
|
||
|
Stanley Stern
|
||||
|
/s/
Eugene Fiume
|
Director
|
March 15, 2013
|
||
|
Eugene Fiume
|
||||
|
/s/
Erez Gissin
|
Director
|
March 15, 2013
|
||
|
Erez Gissin
|
||||
|
/s/
Joichi Ito
|
Director
|
March 15, 2013
|
||
|
Joichi Ito
|
||||
|
/s/
Allen Karp
|
Director
|
March 15, 2013
|
||
|
Allen Karp
|
||||
|
/s/
Lloyd N. Morrisett
|
Director
|
March 15, 2013
|
||
|
Lloyd N. Morrisett
|
||||
|
/s/
Rawleigh Ralls
|
Director
|
March 15, 2013
|
||
|
Rawleigh Ralls
|
||||
|
/s/
Jeffrey Schwartz
|
Director
|
March 15, 2013
|
||
|
Jeffrey Schwartz
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|