TUCOWS INC /PA/
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
TCX$12.69+6.5%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001437749-24-033982
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsDefaults Upon Senior SecuritiesMine Safety DisclosuresCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001437749-25-015557
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsDefaults Upon Senior SecuritiesMine Safety DisclosuresThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 18 previous paragraphs and 12 current paragraphs.
7 unchanged; 4 reworded; 1 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (1)
Current report
As part of our continued focus on operational efficiency and strategic alignment, we completed two workforce reductions within the Ting segment on February 7, 2024 and October 30, 2024. These reductions were designed to streamline operations, reduce costs, improve efficiency and align our resources with strategic priorities. While reductions have been implemented, the full benefits are still being realized, and we continue to monitor the impact of these actions. Residual risks associated with the workforce reductions include the following:
Removed paragraphs (7)
Previous report
We have identified a material weakness in our internal control over financial reporting that, if not properly remediated, could adversely affect our business and results of operations.
Previous report
In connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2023, we have concluded that there is a material weakness relating to our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. In addition, given our reliance on IT systems to synthesize both financial and nonfinancial information, any material weaknesses in our IT controls may result in errors in not only our consolidated financial statements but our nonfinancial metrics as well.
Previous report
Specifically, we identified a material weakness occurred because we did not design and maintain (i) program change management controls for certain financial systems to ensure that IT program and data changes affecting certain IT systems and underlying accounting records are identified, tested, authorized and implemented appropriately and (ii) user access controls that adequately restrict user access to certain financial systems, programs and data to appropriate company personnel. As a result of this material weakness, management has determined that our disclosure controls and procedures and internal control over financial reporting were not effective as of December 31, 2023, March 31, 2024, June 30, 2024, and September 30, 2024.
Previous report
Subsequent to our December 31, 2023 fiscal year end, we began taking a number of actions, including evaluating access controls to key financial systems and implementing enhanced procedures for regular access reviews. We expect to continue our remediation efforts, including testing of operating effectiveness of new controls, and expect to incur additional costs remediating this material weakness.
Previous report
Although we believe we are taking appropriate actions to remediate the control deficiency we identified and to strengthen our internal control over financial reporting, we may need to take additional measures to fully mitigate the material weakness, and the measures we have taken, and expect to take, to improve our internal controls may not be sufficient to address the issues identified, to ensure that our internal controls are effective or to ensure that the identified material weakness will not result in a material misstatement of our annual or interim consolidated financial statements. In addition, other material weaknesses or deficiencies may be identified in the future. If we are unable to correct material weaknesses or deficiencies in internal controls in a timely manner, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC will be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, negatively affect our ability to raise financing, and cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and generally materially and adversely impact our business and financial condition.
Previous report
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Implementation of new technology related to the control system may result in misstatements due to errors that are not detected and corrected during testing. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.
Previous report
To reflect the ongoing operational prioritizations of the Ting segment and to lower year-over-year operating expenses, we undertook the Ting workforce reductions on February 7, 2024 and October 30, 2024. The 2024 workforce reductions were aimed at streamlining the operations within our Ting segment. The successful execution of these plans is critical to our efforts to reduce costs, improve efficiency, and align our resources with strategic priorities. However, the implementation of the workforce reductions requires significant management attention and financial resources and is subject to a number of risks that could negatively impact our results of operations, including the following:
Reworded paragraphs (4)
Previous wording
Ting incurred a net loss of $75.7 million and $90.2 million for the nine months ended September 30, 2024 and the nine months ended September 30, 2023, respectively. At September 30, 2024, Ting had $62.2 million in unrestricted cash and cash equivalents, $1.1 million in accounts receivable, $1.7 million in accounts payable and $13.9 million in accrued liabilities. At September 30, 2024, Ting’s long term liabilities included $286.6 million payable on the 2023 and 2024 Term Notes, as well as $122.1 million on the Redeemable Preferred Units. Ting incurred an operating cash flow deficit of $41.7 million and $41.7 million for the nine months ended September 30, 2024 and the nine months ended September 30, 2023, respectively. Ting has scheduled interest payments of $38.9 million in the twelve months following September 30, 2024.
Current wording
Ting incurred a net loss of $20.2 million and $28.4 million for the three months ended March 31, 2025 and March 31, 2024, respectively. As of March 31, 2025, Ting had $26.0 million in unrestricted cash and cash equivalents, $1.2 million in accounts receivable, $1.0 million in accounts payable and $6.7 million in accrued liabilities. Comparatively, as of December 31, 2024, Ting had $45.4 million in unrestricted cash and cash equivalents, $1.2 million in accounts receivable, $1.2 million in accounts payable and $15.8 million in accrued liabilities. At March 31, 2025, Ting’s long term liabilities included $288.6 million payable on the 2023 and 2024 Term Notes, as well as $122.2 million on the Redeemable Preferred Units. Ting incurred an operating cash flow deficit of $17.0 million and $16.0 million for the three months ended March 31, 2025 and March 31, 2024, respectively. Ting has scheduled interest payments of $38.7 million in the twelve months following March 31, 2025.
Previous wording
The execution of our Ting workforce reductions involves risks that could adversely affect our business operations, financial condition, and growth strategy, including risks related to implementation difficulties, operational disruptions, and financial impacts.
Current wording
The success of our Ting workforce reductions involves ongoing risks that could adversely affect our business operations, financial condition, and growth strategy, including risks related to operational execution, employee engagement, and long-term competitiveness.
Previous wording
Following the sale of the majority of our Ting Mobile customer base on August 1, 2020, we retained a small subset of mobile customers to which we continue to provide retail mobile services through our partnership with our MNO supplier. The Company is subject to minimum purchase commitments with our MNO supplier through a “take or pay” arrangement. Between August 17, 2024 and February 16, 2026, the Company has committed to pay $24.1 million under the “take or pay” arrangement. If we are unable to grow the Ting Mobile subscriber base or renegotiate the contract, our cost of revenues could grow significantly, and may result in a significant increase to the Company’s net loss.
Current wording
Following the sale of the majority of our Ting Mobile customer base on August 1, 2020, we retained a small subset of mobile customers to which we continue to provide retail mobile services through our partnership with our MNO supplier. The Company is subject to minimum purchase commitments with our MNO supplier through a “take or pay” arrangement. We are committed to a minimum of $13.9 million in remaining payments through February 16, 2026. If we are unable to grow the Ting Mobile subscriber base or renegotiate the contract, our cost of revenues could grow significantly, and may result in a significant increase to the Company’s net loss.
Previous wording
On February 22, 2024, the Company announced that its Board of Directors (“Board”) has approved a stock buyback program to repurchase up to $40 million of its common stock in the open market (the “2024 Buyback Program”). The 2024 Buyback Program commenced on February 23, 2024 and is expected to terminate on February 22, 2025. For the three and nine months ended September 30, 2024, the Company did not repurchase any shares under the 2023 Buyback Program.
Current wording
On February 13, 2025, the Company announced that its Board of Directors (“Board”) has approved a stock buyback program to repurchase up to $40 million of its common stock in the open market (the “2025 Buyback Program”). The 2025 Buyback Program commenced on February 14, 2025 and is expected to terminate on February 13, 2026. For the three months ended March 31, 2025, the Company did not repurchase any shares under the 2024 Buyback Program.