SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
ý QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-28284
TUCOWS INC.
(Exact Name of Registrant as Specified in Its Charter)
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Pennsylvania |
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23-2707366 |
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(State or Other Jurisdiction of |
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(I.R.S. Employer |
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96 Mowat Avenue, |
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(Address of Principal Executive Offices) (Zip Code) |
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(416) 535-0123 |
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(Registrant’s Telephone Number, Including Area Code) |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ý No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) : Yes o No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
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Class |
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Outstanding at November 12, 2003 |
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Common Stock, no par value |
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64,626,429 |
TUCOWS INC.
Form 10-Q Quarterly Report
INDEX
PART I
FINANCIAL INFORMATION
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Consolidated Balance Sheets as of September 30, 2003 (unaudited) and December 31, 2002 |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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2
Item 1. Financial Statements
Tucows Inc.
(Dollar amounts in U.S. dollars)
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September 30, |
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December 31, |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
11,824,783 |
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$ |
8,844,829 |
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Restricted cash (note 6) |
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262,612 |
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937,500 |
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Accounts receivable, net of allowance for doubtful accounts of $102,089 as of September 30, 2003 and $229,938 as of December 31, 2002 |
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412,175 |
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338,697 |
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Prepaid expenses and deposits |
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1,855,956 |
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1,951,086 |
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Prepaid domain name registry fees, current portion |
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12,478,496 |
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11,145,187 |
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Total current assets |
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26,834,022 |
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23,217,299 |
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Prepaid domain name registry fees, long-term portion |
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4,839,643 |
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3,700,340 |
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Property and equipment |
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1,195,855 |
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1,581,321 |
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Investments |
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353,737 |
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353,737 |
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Total assets |
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$ |
33,223,257 |
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$ |
28,852,697 |
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Liabilities and Stockholders’ Equity (Deficiency) |
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Current liabilities: |
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Accounts payable |
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$ |
1,304,822 |
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$ |
1,605,630 |
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Accrued liabilities |
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2,006,955 |
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2,288,412 |
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Customer deposits |
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2,034,310 |
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1,957,657 |
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Deferred revenue, current portion |
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20,006,309 |
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18,431,100 |
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Total current liabilities |
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25,352,396 |
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24,282,799 |
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Deferred revenue, long-term portion |
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7,471,600 |
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5,929,917 |
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Stockholders’ equity (deficiency): |
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Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding |
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— |
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— |
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Common stock - no par value, 250,000,000 shares authorized; 64,626,429 shares issued and outstanding as of September 30, 2003 and December 31, 2002 |
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8,540,687 |
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8,540,687 |
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Additional paid-in capital |
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49,992,129 |
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49,992,129 |
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Deferred stock-based compensation |
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(61,605 |
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(183,297 |
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Deficit |
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(58,071,950 |
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(59,709,538 |
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Total stockholders’ equity (deficiency) |
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399,261 |
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(1,360,019 |
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Total liabilities and stockholders’ equity (deficiency) |
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$ |
33,223,257 |
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$ |
28,852,697 |
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See accompanying notes to consolidated financial statements
3
Tucows Inc.
Consolidated Statements of Operations
(Dollar amounts in U.S. dollars)
(unaudited)
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Three months ended September 30, |
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Nine months ended September 30, |
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2003 |
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2002 |
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2003 |
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2002 |
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Net revenues |
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$ |
9,315,760 |
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$ |
8,879,281 |
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$ |
27,479,973 |
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$ |
28,286,001 |
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Cost of revenues |
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5,807,808 |
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5,413,730 |
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17,067,173 |
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17,645,243 |
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Gross profit |
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3,507,952 |
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3,465,551 |
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10,412,800 |
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10,640,758 |
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Operating expenses: |
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Sales and marketing (*) |
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922,028 |
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926,098 |
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2,791,251 |
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2,831,851 |
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Technical operations and development |
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1,016,404 |
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866,061 |
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2,867,098 |
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2,883,770 |
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General and administrative (*) (note 6 (a)) |
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1,266,708 |
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1,444,629 |
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3,044,907 |
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3,631,082 |
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Depreciation of property and equipment |
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289,424 |
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378,913 |
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1,166,340 |
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2,273,587 |
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Amortization of intangible assets |
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222,222 |
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Total operating expenses |
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3,494,564 |
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3,615,701 |
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9,869,596 |
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11,842,512 |
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Income (loss) from operations |
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13,388 |
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(150,150 |
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543,204 |
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(1,201,754 |
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Other income (expenses): |
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