2024 Q1 TCX financial statements.pdf

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Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)

2024(unaudited) 2023(audited)
Assets
Current assets:
Cash and cash equivalents $66,590 $92,687
Restricted cash 4,034 3,639
Accounts receivable 19,683 22,206
Contract asset 124 1,417
Inventory 6,095 6,786
Prepaid expenses and deposits 16,142 17,387
Derivative instrument asset 571 2,277
Deferred costs of fulfillment, current portion 100,346 95,649
Income taxes recoverable 346 709
Total current assets 213,931 242,757
Deferred costs of fulfillment, long-term portion 15,741 15,419
Investments 2,012 2,012
Secured notes reserve funds 8,760 8,652
Property and equipment, net 350,397 339,644
Right of use lease asset 28,504 27,467
Contract costs 2,618 2,581
Intangible assets, net 27,899 29,484
Goodwill 130,410 130,410
Total assets $780,272 $798,426
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $12,770 $12,676
Accrued liabilities 36,040 35,356
Customer deposits 17,780 19,335
Operating lease liability, current portion 5,518 5,397
Deferred revenue, current portion 133,363 126,733
Accreditation fees payable 687 609
Income taxes payable 2,036 1,235
Total current liabilities 208,194 201,341
Deferred revenue, long-term portion 21,744 21,350
Operating lease liability, long-term portion 18,908 18,255
Syndicated revolver 205,001 210,354
Notes payable 223,791 222,895
Redeemable preferred units 115,612 111,390
Deferred tax liability 2,966 2,966
Stockholders' deficit:
Common stock - no par value, 250,000,000 shares authorized; 10,928,623 shares issued and outstanding as of March 31, 2024 and 10,903,405 shares issued and outstanding as of December 31, 2023 35,035 34,373
Additional paid-in capital 15,370 14,072
Accumulated deficit (66,782) (40,298)
Accumulated other comprehensive income (loss) 433 1,728
Total stockholders' deficit (15,944) 9,875
Total liabilities and stockholders' deficit $780,272 $798,426

Consolidated Statements of Operations
and Comprehensive Income
(Dollar amounts in thousands of U.S. dollars)

Three months ended March 31,
2024 2023
(unaudited)
Net revenues $ 87,457 $80,430
Cost of revenues:
Direct cost of revenues 51,794 49,290
Network, other costs 7,064 6,323
Network, depreciation of property and equipment 9,865 8,436
Network, amortization of intangible assets 365 378
Network, impairment of property and equipment 53 1,942
Total cost of revenues 69,141 66,369
Gross profit 18,316 14,061
Expenses:
Sales and marketing(*) $ 18,565 $15,737
Technical operations and development(*) 5,016 4,815
General and administrative(*) 9,818 8,146
Depreciation of property and equipment 122 152
Amortization of intangible assets 1,314 2,494
Total expenses 34,835 31,344
Loss from operations (16,519) (17,283)
Other income (expenses):
Interest expense, net (11,879) (7,880)
Income earned on sale of transferred assets, net 3,621 4,370
Other income (expense), net 67 -
Total other income (expenses) (8,191) (3,510)
Loss before provision for income taxes (24,710) (20,793)
Provision for income taxes 1,774 (1,710)
Net loss for the period (26,484) (19,083)
Other comprehensive income (loss), net of tax
Unrealized income (loss) on hedging activities (1,126) 68
Net amount reclassified to earnings (169) (236)
Other comprehensive income (loss) net of tax recovery (1,295) (168)
Comprehensive loss, net of tax for the period $ (27,779) $ (19,251)
Basic and diluted loss per common share $ (2.42) $ (1.77)
Shares used in computing basic and diluted loss per common share 10,923,599 10,806,321
(*) Stock-based compensation has been included in expenses as follows:
Network expenses $ 120 $ 169
Sales and marketing $ 539 $ 607
Technical operations and development $ 214 $ 304
General and administrative $ 1,000 $ 1,167

Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)
Three months ended March 31,

Three months ended March 31,
2024 2023
(unaudited)
Cash provided by:
Operating activities:
Net loss for the period $ (26,484) $ (19,083)
Items not involving cash:
Depreciation of property and equipment 9,987 8,588
Impairment of property and equipment 53 1,942
Amortization of debt discount and issuance costs 1,067 238
Amortization of intangible assets 1,679 2,872
Net amortization contract costs (37) (149)
Deferred income taxes (recovery) 385 (2,710)
Excess tax benefits on share-based compensation expense - (1)
Net right of use operating assets/operating lease liability (263) (82)
Disposal of domain names 2 -
Accretion of redeemable preferred units 3,755 3,037
Loss (gain) on change in the fair value of forward contracts - 745
Amortization of discontinued cash flow hedge - (572)
Stock-based compensation 1,873 2,246
Change in non-cash operating working capital:
Accounts receivable 2,523 (5,769)
Contract assets 1,293 2,191
Inventory 691 745
Prepaid expenses and deposits 1,245 (1,326)
Deferred costs of fulfillment (5,019) (3,956)
Income taxes recoverable 366 518
Accounts payable 318 (156)
Accrued liabilities (4,659) (926)
Customer deposits (1,555) 343
Deferred revenue 7,024 6,303
Accreditation fees payable 78 (289)
Net cash provided by (used in) operating activities (5,678) (5,251)
Financing activities:
Proceeds from redeemable preferred units - 30,000
Deferred preferred financing costs - 145
Contingent consideration for acquisitions - (1,600)
Proceeds received on loan payable (5,500) (2,800)
Deferred syndicate revolver issued - (305)
Net cash provided by (used in) financing activities (5,500) 25,440
Investing activities:
Additions to property and equipment (14,320) (31,746)
Acquisition of intangible assets (96) (166)
Net cash provided by (used in) investing activities (14,416) (31,912)
(Decrease) increase in cash and cash equivalents (25,594) (11,723)
Cash and cash equivalents, restricted cash, and restricted cash 104,978 23,496
Cash and cash equivalents, restricted cash, and restricted cash $ 79,384 $ 11,773
Reconciliation of cash, cash equivalents, restricted cash, and restricted Cash and cash equivalents 66,590 11,773
Restricted cash included in funds held for trustee 4,034 -
Restricted cash included in secured notes reserve funds 8,760 -
Total Cash and cash equivalents, restricted cash, and restricted cash 79,384 11,773
Supplemental cash flow information:
Interest paid $ 9,009 $ 3,885
Income taxes paid, net $ 695 $ 501
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for $ 5,945 $ 1,581

Three months ended March 31,

(In Thousands of U.S. Dollars)

(unaudited) 2024(unaudited) 2023(unaudited)
Net Loss for the Period $ (26,484) $(19,083)
Less:
Provision for income taxes 1,774 (1,710)
Depreciation of property and equipment 9,987 8,588
Impairment and loss on disposition of property and equipment 53 1,942
Amortization of intangible assets 1,679 2,872
Interest expense, net 11,879 7,880
Stock-based compensation 1,873 2,246
Unrealized loss(gain)on foreign exchange revaluation of foreign denominated monetary assets and liabilities 390 40
Acquisition and other costs1 3,051 255
AdjustedEBITDA $ 4,202 $ 3,030

include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.