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F-25
14. Fair value measurement:
For financial assets and liabilities recorded in our financial statements at fair value we utilize a valuation
hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into
three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the
asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial
instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and
liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the
lowest level input that is significant to the fair value measurement.
The following table provides a summary of the fair values of the Company’s derivative instruments measured at
fair value on a recurring basis as at December 31, 2012:
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
The following table provides a summary of the fair values of the Company’s derivative instruments measured at
fair value on a recurring basis as at December 31, 2011:
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
15. Subsequent events:
On January 7, 2013, the Company announced that it successfully concluded a modified “Dutch auction tender
offer” that was previously announced on November 21, 2012. Under the terms of the offer, the Company repurchased an
aggregate of 4,114,437 shares of its common stock at a purchase price of $1.50 per share, for a total of $6,171,656,
excluding transaction costs of approximately $110,000. The purchase price and all transaction costs were funded from
available cash and an additional advance under its Amended Credit Facility from the Bank in the amount of $5.2 million.
All shares purchased in the tender offer received the same price and all shares repurchased were immediately retired. As
a result of the completion of the tender offer, as of January 31, 2013, the Company had 40,226,875 shares issued and
outstanding.
16. Supplemental information:
(a) The following is a summary of the Company’s revenue earned from each significant revenue stream:
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