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Schedule I - Condensed Financial Information of Parent Company

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

CONDENSED FINANCIAL STATEMENTS OF TUCOWS INC.

(PARENT COMPANY)

All operating activities of Tucows Inc. (the “Parent Company”) are primarily conducted by its operating subsidiaries, Tucows.com Co (“Tucows.com Co”), eNom LLC ("eNom"), EPAG Domainservices GmbH (“EPAG”), Ascio Technologies, Corp (“Ascio”), Ting Inc. (“Ting Inc”), Wavelo, Inc. (“Wavelo”) and Ting Fiber, LLC (“Ting Fiber”), Ting Internet, LLC ("Ting Internet"), Simply Bits, LLC ("Simply Bits"), Zippytech, LLC ("Zippytech") and Ting-Memphis Co, ("Ting Memphis").

The Parent Company holds a direct 100% ownership interest in Tucows (Delaware) Inc. ("Tucows Delaware"), which holds the Parent Company’s interest in its operating subsidiaries. The Parent Company is a holding company that does not conduct any substantive business operations and does not have any assets or liabilities other than cash and cash equivalents, accounts receivables, prepaid expenses, intangible assets, derivative instruments, accounts payables, accrued liabilities, investments in its subsidiaries and due to related party. The operations of Ting Fiber, LLC are partially funded through Redeemable preferred units which have restrictions on the ability to pay dividends, loan funds and make other upstream distributions to the Parent Company without prior approval by the holder of the Redeemable preferred units.

These Condensed Parent Company financial statements have been prepared using the same accounting principles and policies described in the notes to the Consolidated Financial Statements. Refer to the Consolidated Financial Statements and notes presented above for additional information and disclosures with respect to these condensed financial statements.

PARENT COMPANY INFORMATION

TUCOWS INC

SCHEDULE I - CONDENSED BALANCE SHEETS

(Dollar amounts in thousands of U.S. dollars)

		*December 31, 2024*				*December 31, 2023*

Assets
Cash and cash equivalents		$	7,634			$	7,051
Prepaid expenses and deposits			711				610
Income taxes recoverable			571				508
Investment in subsidiaries			-				81,635
Intangible assets			59				59
Total Assets			8,975				89,863

Liabilities
Accounts payable			-				147
Accrued liabilities			1,611				458
Customer deposits			188				-
Equity in net deficit of subsidiaries			18,361				-
Due to related parties			72,370				68,392
Deferred tax liability			11,745				10,991
Total Liabilities			104,275				79,988

Equity
Share capital			36,581				34,373
Additional paid-in capital			19,241				14,072
Accumulated surplus (deficit)			(150,158	)			(40,298	)
Accumulated other comprehensive income (loss)			(964	)			1,728
Total Equity			(95,300	)			9,875
Total Liabilities and Equity		$	8,975			$	89,863

The accompanying notes to the condensed financial statements are an integral part of these financial statements

PARENT COMPANY INFORMATION

TUCOWS INC

SCHEDULE I - CONDENSED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(Dollar amounts in thousands of U.S. dollars)

		*For the year ended December 31,*
		*2024*				*2023*				*2022*

Income (loss) of equity method investments		$	(99,393	)		$	(101,352	)		$	(25,348	)
Operating expenses			(8,726	)			(8,192	)			(7,095	)
Interest income (expense)			1				1,016				1,378
Income tax recovery			(1,742	)			12,331				3,494
Net income (loss)			(109,860	)			(96,197	)			(27,571	)
Other comprehensive income (loss) - Parent Company			-				(848	)			1,408
Other comprehensive income (loss) - Subsidiaries			(2,692	)			1,792				(967	)
Comprehensive income (loss)		$	(112,552	)		$	(95,253	)		$	(27,130	)

The accompanying notes to the condensed financial statements are an integral part of these financial statements

PARENT COMPANY INFORMATION

TUCOWS INC

SCHEDULE I - CONDENSED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands of U.S. dollars)

		*For the year ended December 31,*
		*2024*				*2023*				*2022*

Operating activities
Net income (loss)		$	(109,860	)		$	(96,197	)		$	(27,571	)
Non-cash items affecting net income
Excess tax benefits on stock-based compensation expense			-				-				(193	)
Stock-based compensation			5,288				6,035				5,779
Deferred income taxes (recovery)			755				(11,804	)			(6,689	)
Amortization of discontinued cash flow hedge from Accumulated other income			-				(1,144	)			(761	)
Loss (gain) on change in the fair value of forward contracts			-				1,624				281
Undistributed earnings of equity method investments			99,393				101,352				25,348
Changes in non-cash balances related to operations
Accounts receivable			-				381				(482	)
Prepaid expenses and deposits			(99	)			(82	)			(49	)
Income taxes recoverable			(63	)			1,208				532
Accounts payable			(147	)			(492	)			507
Accrued liabilities			1,151				195				195
Customer deposits			187				-				-
Cash from operating activities			(3,395	)			1,076				(3,103	)

Financing activities
Net proceeds received from (paid to) subsidiaries			3,978				2,078				1,101
Net proceeds received on exercise of stock options			-				-				1,096
Cash from financing activities			3,978				2,078				2,197

Investing activities
Investment in unrelated company			-				-				(2,012	)
Cash from investing activities			-				-				(2,012	)

Increase (decrease) in cash and cash equivalents			583				3,154				(2,918	)

Cash and cash equivalents, beginning of period			7,051				3,897				6,815
Cash and cash equivalents, end of year		$	7,634			$	7,051			$	3,897

The accompanying notes to the condensed financial statements are an integral part of these financial statements

SCHEDULE I - NOTES TO THE CONDENSED FINANCIAL STATEMENTS

NOTE 1. BASIS OF PRESENTATION

Tucows Inc. (the “Parent Company”) is a holding company that conducts substantially all of its business operations through its subsidiaries. The Parent Company holds a direct 100% ownership interest in Tucows (Delaware) Inc., which holds the Parent Company’s interest in Tucows.com Co (“Tucows.com Co”), eNom LLC ("eNom"), EPAG Domainservices GmbH (“EPAG”), Ascio Technologies, Corp (“Ascio”), Ting Inc. (“Ting Inc”), Wavelo, Inc. (“Wavelo”) and Ting Fiber, LLC (“Ting Fiber”).

The Parent Company was incorporated under the laws of the Commonwealth of Pennsylvania in November 1992 under the name Infonautics, Inc. In August 2001, we completed our acquisition of Tucows Inc., a Delaware corporation, and we changed our name from Infonautics, Inc. to Tucows Inc.

The Parent Company was established to allocate capital and manage internet and telecom infrastructure businesses. Through its operating subsidiaries, the Parent Company offers a broad range of services including fixed Internet access, billing and subscription management platform services for communication service providers and distribution of global internet services through the provision of domain name registrations, digital certificates and email services.

As of December 31, 2024, Ting Fiber LLC, had restricted net assets of $(30.6) million. These restrictions primarily limit our ability to transfer funds from our subsidiaries without violating contractual agreements. The Company continuously evaluates the impact of these restrictions on liquidity and capital resource planning.

The Company operates within a consolidated tax group, comprising the Parent Company and its wholly-owned subsidiaries. Deferred taxes are not separately identified and recorded at the parent level.

No dividends have been received from any of our subsidiaries in the past three years.

Change in basis of presentation for subsidiary investment accounts and adjustment of prior period reported amounts

Certain amounts in the 2023 Parent Company Condensed Financial Statements have been adjusted to change the basis of presentation of the subsidiary investment accounts. These changes had no impact on total net income and total shareholders' equity previously reported in the comparative figures presented in the Parent Company Condensed Financial Statements.

NOTE 2. COMMITMENTS AND CONTINGENCIES

The Parent Company and its subsidiaries, excluding Ting Fiber, LLC, have revolving credit facilities through third-party financial institutions. The total available amount on the credit facilities is $240 million, and as at December 31, 2024, $195.4 million was drawn on the credit facilities. The Parent Company had no other material commitments or contingencies during the reported periods.

NOTE 3. SHARE CAPITAL

The Company's authorized common share capital is 250 million shares of common stock without nominal or par value. As of December 31, 2024, and 2023, the number of outstanding shares of common stock was 11,014,655 and 10,903,405, respectively. The Parent Company issued 111,250, 86,295, and 40,459 common stock during the twelve months ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively related to stock-based compensation. The Parent Company retired nil, nil and 3,053 common stock during the twelve months ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively related to stock options exercised.