TUCOWS INC /PA/

Previous 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.

Current wording

Ting incurred a net loss of $21.5 million and $24.0 million for the three months ended June 30, 2025 and June 30, 2024, respectively. As of June 30, 2025, Ting had $35.0 million in unrestricted cash and cash equivalents, $2.1 million in accounts receivable, $0.7 million in accounts payable. and $12.7 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 June 30, 2025, Ting’s long-term liabilities included $289.6 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 $1.1 million and $11.2 million for the three months ended June 30, 2025 and June 30, 2024, respectively. Ting has scheduled interest payments of $35.0 million in the twelve months following June 30, 2025.

Previous wording

Should Ting fail to pay the Unsatisfied Preferred Return associated with the Series A Preferred Units for two consecutive quarters, Generate has the option to either (i) require Ting to redeem the Series A Preferred Units at the Redemption Price; or (ii) compel the sale of certain assets of Ting and/or its subsidiaries to Generate with a value equal to the Redemption Price. The Redemption Price is an amount equal to the outstanding Unreturned Series A Capital Balance plus the Unsatisfied Preferred Return (and pay a Make-Whole Premium if the redemption of the preferred units occurs within the four years following the Transaction Close). The Make-Whole Premium is an amount calculated immediately prior to redemption equal to:(i) (A) the Unreturned Series A Capital Balance and Unsatisfied Preferred Return outstanding immediately prior to such redemption plus (B) the cumulative and compounded Preferred Return that would have accrued (at the Preferred Rate as in effect immediately prior to such redemption) on such Unreturned Series A Capital Balance through and including the six-year anniversary of the Effective Date had such Series A Preferred Units not been redeemed, and thereafter applying to such sum a discount rate on a quarterly compounded basis equal to the Applicable Treasury Rate plus 50 basis points, less (ii) the Unreturned Series A Capital Balance and Unsatisfied Preferred Return outstanding immediately prior to such redemption.

Current wording

In addition, should Ting fail to pay the Unsatisfied Preferred Return (as defined in "Note 18. Redeemable preferred units" of the Notes to the Consolidated Financial Statements included in Part I, of this Quarterly Report) associated with the Series A Preferred Units for two consecutive quarters, the “Cure”. Generate has the option to either (i) require Ting to redeem the Series A Preferred Units at the Redemption Price; or (ii) compel the sale of certain assets of Ting and/or its subsidiaries to Generate with a value equal to the Redemption Price. The Redemption Price is an amount equal to the outstanding Unreturned Series A Capital Balance plus the Unsatisfied Preferred Return (and pay a Make-Whole Premium if the redemption of the preferred units occurs within the four years following the Transaction Close). The Make-Whole Premium is an amount calculated immediately prior to redemption equal to:(i) (A) the Unreturned Series A Capital Balance and Unsatisfied Preferred Return outstanding immediately prior to such redemption plus (B) the cumulative and compounded Preferred Return that would have accrued (at the Preferred Rate as in effect immediately prior to such redemption) on such Unreturned Series A Capital Balance through and including the six-year anniversary of the Effective Date had such Series A Preferred Units not been redeemed, and thereafter applying to such sum a discount rate on a quarterly compounded basis equal to the Applicable Treasury Rate plus 50 basis points, less (ii) the Unreturned Series A Capital Balance and Unsatisfied Preferred Return outstanding immediately prior to such redemption.

Previous wording

Ting may not be able to meet its financial obligations over the twelve months following March 31, 2025 without additional financing. Ting has historically relied on the proceeds from its Redeemable Preferred Units as well as its 2023 and 2024 Term Notes to fund its operations and the expansion of the Ting fiber Internet footprint. Ting currently has limited capacity to expand its borrowings under the Base Indenture and it is uncertain whether Ting will be able to access additional Milestone Fundings under the Redeemable Preferred Unit facility. Our ability to obtain additional financing if required will be subject to a number of factors, including market conditions, our operating performance and investor sentiment. If we are unable to raise additional capital when required or on acceptable terms, we may have to further restrict our operations or obtain funds by entering into agreements on unattractive terms, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained, and which could result in additional dilution to our stockholders. If we do not have sufficient funds to continue operations, Ting could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing some or all of their investment in us.

Current wording

If Ting fails to Cure and Generate exercises its rights under the LLC Agreement and if Ting is unable to raise additional capital when required or on acceptable terms, we may have to further restrict our operations or obtain funds by entering into agreements on unattractive terms, which would likely have a material adverse effect on our business, stock price and our relationships with third parties with whom we have business relationships, at least until additional funding is obtained, and which could result in additional dilution to our stockholders. If we do not have sufficient funds to continue operations, Ting could be required to seek bankruptcy protection or other alternatives that would likely result in our stockholders losing some or all of their investment in us.

Previous 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.

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 and six months ended June 30, 2025, the Company did not repurchase any shares under the 2024 Buyback Program.