UNITED STATES
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 March 31, 2005
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)
|
Pennsylvania |
|
23-2707366 |
|
(State or
Other Jurisdiction of |
|
(I.R.S.
Employer |
96 Mowat
Avenue,
Toronto, Ontario M6K 3M1, Canada
(Address of Principal Executive Offices) (Zip Code)
(416) 535-0123
(Registrant’s Telephone Number, Including Area Code)
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
As of May 2, 2005, there were 68,078,302 outstanding shares of common stock, no par value, of the registrant, excluding 288,807 shares of common stock remaining in escrow as a result of an acquisition in April 2004.
TUCOWS INC.
Form 10-Q Quarterly Report
INDEX
2
FINANCIAL INFORMATION
Tucows Inc.
(Dollar amounts in U.S. dollars)
|
|
|
March 31, |
|
December 31, |
|
||
|
|
|
(unaudited) |
|
|
|
||
|
|
|
|
|
|
|
||
|
Assets |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current assets: |
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
15,007,050 |
|
$ |
13,914,988 |
|
|
Restricted cash |
|
— |
|
460,398 |
|
||
|
Accounts receivable, net of allowance for doubtful accounts of $55,000 as of March 31, 2005 and $25,000 as of December 31, 2004 |
|
1,262,679 |
|
1,111,082 |
|
||
|
Prepaid expenses and deposits |
|
1,721,738 |
|
2,156,702 |
|
||
|
Prepaid domain name registry and ancillary services fees, current portion |
|
17,082,065 |
|
15,601,786 |
|
||
|
Deferred tax asset, current portion |
|
1,000,000 |
|
1,000,000 |
|
||
|
Total current assets |
|
36,073,532 |
|
34,244,956 |
|
||
|
|
|
|
|
|
|
||
|
Prepaid domain name registry and ancillary services fees, long-term portion |
|
6,993,852 |
|
6,471,916 |
|
||
|
Property and equipment |
|
976,272 |
|
1,017,237 |
|
||
|
Deferred tax asset, long-term portion |
|
2,000,000 |
|
2,000,000 |
|
||
|
Intangible assets |
|
1,183,200 |
|
1,242,240 |
|
||
|
Goodwill |
|
964,467 |
|
964,467 |
|
||
|
Investment |
|
353,737 |
|
353,737 |
|
||
|
Cash held in escrow |
|
1,013,366 |
|
1,009,650 |
|
||
|
|
|
|
|
|
|
||
|
Total assets |
|
$ |
49,558,426 |
|
$ |
47,304,203 |
|
|
|
|
|
|
|
|
||
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
Current liabilities: |
|
|
|
|
|
||
|
Accounts payable |
|
$ |
1,526,505 |
|
$ |
1,483,543 |
|
|
Accrued liabilities |
|
1,677,947 |
|
2,688,738 |
|
||
|
Customer deposits |
|
2,169,135 |
|
2,247,262 |
|
||
|
Deferred revenue, current portion |
|
25,493,236 |
|
23,648,381 |
|
||
|
Accreditation fees payable, current portion |
|
303,891 |
|
144,483 |
|
||
|
Total current liabilities |
|
31,170,714 |
|
30,212,407 |
|
||
|
|
|
|
|
|
|
||
|
Deferred revenue, long-term portion |
|
10,263,233 |
|
9,602,599 |
|
||
|
Accreditation fees payable, long-term portion |
|
43,265 |
|
31,816 |
|
||
|
|
|
|
|
|
|
||
|
Stockholders' equity |
|
|
|
|
|
||
|
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding |
|
|
|
— |
|
||
|
Common stock - no par value, 250,000,000 shares authorized; 67,297,465 shares issued and outstanding as of March 31, 2005 and 66,817,250 shares issued and outstanding as of December 31, 2004 |
|
9,722,300 |
|
9,541,277 |
|
||
|
Additional paid-in capital |
|
50,061,866 |
|
50,061,866 |
|
||
|
Deficit |
|
(51,702,952 |
) |
(52,145,762 |
) |
||
|
Total stockholders' equity |
|
8,081,214 |
|
7,457,381 |
|
||
|
|
|
|
|
|
|
||
|
Total liabilities and stockholders' equity |
|
$ |
49,558,426 |
|
$ |
47,304,203 |
|
Subsequent event note 7
See accompanying notes to consolidated financial statements
3
Tucows Inc.
Consolidated Statements of Operations
(Dollar amounts in U.S. dollars)
(unaudited)
|
|
|
Three months ended March 31, |
|
||||
|
|
|
2005 |
|
2004 |
|
||
|
|
|
|
|
|
|
||
|
Net revenues |
|
$ |
11,801,706 |
|
$ |
10,174,909 |
|
|
Cost of revenues |
|
7,221,205 |
|
6,445,415 |
|
||
|
Gross profit |
|
4,580,501 |
|
3,729,494 |
|
||
|
|
|
|
|
|
|
||
|
Operating expenses: |
|
|
|
|
|
||
|
Sales and marketing (*) |
|
1,352,454 |
|
1,220,534 |
|
||
|
Technical operations and development |
|
1,322,785 |
|
1,011,422 |
|
||
|
General and administrative (*) |
|
1,390,762 |
|
1,073,072 |
|
||
|
Depreciation of property and equipment |
|
241,873 |
|
312,986 |
|
||
|
Amortization of intangible assets |
|
59,040 |
|
— |
|
||
|
Total operating expenses |
|
4,366,914 |
|
3,618,014 |
|
||
|
|
|
|
|
|
|
||
|
Income from operations |
|
213,587 |
|
111,480 |
|
||
|
|
|
|
|
|
|
||
|
Other income: |
|
||||||