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If any of the events or circumstances described in the following risk factors actually occur, our business, financial condition or results of operations could suffer, and the trading price of our common stock could decline.
−Removed: Risk Factor Summary
−Removed: We operate in highly competitive and consolidating industries, which may impact our ability to grow and maintain profitability.
−Removed: Our service offerings may not be successful if we are unable to maintain existing customer relationships or establish new customer relationships.
−Removed: Our service offerings may be limited in their ability to grow their respective businesses and customer base unless we can continue to manage our vendor relationships and supply chain to obtain valuable products and service options to offer to our customers.
−Removed: Changes in Internet infrastructure, adoption, and navigation practices could impact our business.
−Removed: Investments in new businesses and technologies, as well as divestitures, carry inherent risks that may impact our operations and financial performance.
−Removed: The Company's success depends on our ability to adapt to technological advancements and evolving industry trends.
−Removed: Our business depends on our strong brands.
−Removed: If we are not able to maintain and enhance our brands, our ability to expand our customer base will be impaired and our business and operating results will be harmed.
−Removed: The Company’s success depends on the continued service and availability of key personnel.
−Removed: Our ability to accurately forecast construction and marketing costs as well as manage the cost per serviceable address within expected targets will impact our return on investment on the Ting Internet footprint.
−Removed: We rely on third-party network operators, data centers, and service providers, and any disruptions to these systems could negatively impact our business.
−Removed: Our Ting Internet businesses rely on Network Operators.
−Removed: Failure by a Network Operator to obtain the proper licenses and governmental approvals from regulatory authorities would cause us to be unable to successfully operate those businesses.
−Removed: We are subject to minimum purchase commitments with some partner network providers and mobile network operators.
−Removed: We are parties to agreements with other unrelated parties for certain business operations and to license third-party technologies.
−Removed: Any claims against these unrelated parties that we rely upon for business operations and/or licensed technology could result in the need to incur substantial costs to replace technology or services which could delay and increase the cost of product and service developments.
−Removed: The execution of our Ting restructuring plan, involves risks that could adversely affect our business operations, financial condition, and growth strategy;
−Removed: including risks related to implementation difficulties, operational disruptions, and financial impacts.
−Removed: We face cybersecurity risks that could disrupt our business, damage our reputation, and result in financial and legal liabilities.
−Removed: Evolving laws and regulations governing intellectual property and internet services may expose us to increased liability and compliance costs.
−Removed: Data protection regulations may impose legal obligations on us that we cannot meet or that conflict with our ICANN contractual requirements.
−Removed: Disputes concerning the ownership or rights to use intellectual property and litigation involving other rights of third parties could be costly and time-consuming to litigate, may distract management from operating the business, and may result in us paying significant damage awards, losing significant rights and our ability to operate all or a portion of our business.
−Removed: Our indebtedness could adversely affect our ability to raise additional capital to fund our operations, our ability to operate our business, execute our strategy divert our cash flow from operations for debt payments, and prevent us from meeting our debt obligations.
−Removed: Our debt agreements impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities across the Company.
−Removed: Breaching these agreements could have a materially adverse impact on the Company.
−Removed: Our preferred unit financing arrangement could adversely affect our financial condition, our ability to operate our business, divert our cash flow from operations for debt payments, and prevent us from meeting our debt obligations.
−Removed: Our preferred unit financing agreement imposes predetermined operational and financial drawdown milestones on our Ting segment, which may prevent us from obtaining additional financing under such preferred unit financing arrangement.
−Removed: In addition, the Company may need additional financing to further accelerate the expansion of the Ting Internet footprint.
−Removed: The international nature of our businesses and operations expose us to additional risks that could harm our business, operating results, and growth strategy;
−Removed: including risks related to taxation and foreign currencies fluctuations.
−Removed: The Company’s subsidiary Ting will require additional financing in order to meet its future financial obligations.
−Removed: Rising inflation and interest rates may adversely affect our businesses, financial condition, and operating results.
−Removed: Macroeconomic, geopolitical, and market conditions may adversely affect our business, financial condition, and operating results.
−Removed: Changes in government regulations may increase compliance costs and impact our business operations.
−Removed: We may be subject to unforeseen liabilities or unenforceable customer agreements, which could negatively impact our financial results.
−Removed: We are exposed to risks related to online payment fraud, chargebacks, and evolving payment technologies.
−Removed: Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition.
−Removed: We could be subject to changes in tax rates, the adoption of new U.S.
−Removed: or international tax legislation, or exposure to additional tax liabilities.
−Removed: This could discourage the registration or renewal of domain names.
−Removed: Changes in ICANN policies, fees, and oversight may impact our domain registration business.
−Removed: Our share price may be volatile, and investors may be unable to sell shares at a favorable price.
−Removed: We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term shareholder value.
−Removed: Energy consumption from data centers and internet infrastructure may result in higher costs and increased regulatory scrutiny.
−Removed: Growing investor and regulatory expectations for ESG (Environmental, Social, and Governance) transparency may require additional disclosures and compliance efforts
−Removed: Our business and financial performance could be adversely impacted by climate change, environmental disruptions, and other unforeseen disasters or crises.
−Removed: Domain names are valuable assets, and cybersecurity risks could lead to their loss or misattribution of liability to us.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
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The markets we serve—Internet services (Ting), wireless communications (Tucows Corporate – Mobile Services), BSS/OSS software (Wavelo), and domain registration (Tucows Domains)—are highly competitive and undergoing significant consolidation.
−Removed: Many of our competitors have greater financial, technical, and marketing resources, enabling them to offer lower prices, broader service bundles, and enhanced purchasing power for equipment, content, and infrastructure.
+Added: Many of our competitors have greater financial, technical, and marketing resources, enabling them to offer lower prices, provide broader service bundles, and enhancing their purchasing power for equipment, content, and infrastructure.
As consolidation increases, larger competitors may further strengthen their cost advantages, making it more difficult for us to attract and retain customers.
4 unchanged sentences
Our service offerings may not be successful if we are unable to maintain existing customer relationships or establish new customer relationships .
−Removed: Maintaining our existing customer relationships and being able to establish new relationships is critical to our success across all our segments, regardless if that customer is an end consumer wanting Gigabit Fiber or Fixed Wireless Internet service to their home, a telecommunication provider, or a leading global domain reseller.
−Removed: Long-term success is dependent upon our sustained ability to generate sufficient revenue from our customers based on their use of our services and ability to respond to churn by retaining existing customers and adding new customers.
−Removed: With significant investments across our segments, be it in the continued build out of our Fiber Network across the United States, our development of our Wavelo or Domains Platforms, our performance and financial results could be negatively impacted if we are unable to realize the return on these investments by failing to attract customers or retain customers to the services we offer.
−Removed: Regarding Wavelo specifically, EchoStar is our main customer and represents the majority of our revenues until such time that we are able to scale our services to other customers.
−Removed: With the majority of our revenues concentrated with one customer, we are exposed to significant risk if we are unable to maintain this customer relationship or establish new relationships with other MNOs or MVNOs in the future.
−Removed: Additionally, our revenues are directly tied to the subscriber volumes of EchoStar's MVNO or MNO networks, so our profitability is contingent on the ability of EchoStar to continue to add and retain subscribers onto our platform.
−Removed: If any of these events occur, our operational performance and financial results may be adversely affected.
−Removed: Our service offerings may be limited in their ability to grow their respective businesses and customer base unless we can continue to manage our vendor relationships and supply chain to obtain valuable products and service options to offer to our customers.
+Added: EchoStar is Wavelo's main customer and represents the majority of its revenues, until such time as we are able to scale our services to additional customers.
+Added: As a result, we are exposed to significant risk if we are unable to maintain this customer relationship or establish new relationships with other MNOs or MVNOs.
+Added: In addition, Wavelo’s revenues are directly tied to the subscriber volumes of EchoStar’s MVNO or MNO networks, and its profitability is contingent on EchoStar’s ability to continue to add and retain subscribers on its platform.
+Added: Accordingly, Wavelo’s long-term success depends on its ability to maintain existing customer relationships and broaden its customer base through the acquisition of new customers and expanded adoption of its platforms.
+Added: If Wavelo is unable to do so, its revenues, operating results, and growth prospects could be materially adversely affected.
+Added: We may be limited in our ability to grow our service offerings and customer base within our businesses, unless we can continue to manage our vendor relationships and supply chain to obtain valuable products and service options to offer to our customers.
To stay competitive, we must offer a range of valuable products and services while effectively managing vendor relationships and supply chains.
−Removed: A critical aspect of this is securing domain name registration options through various TLDs and ccTLDs for our Tucows Domains segment.
+Added: A critical aspect of this is securing domain name registration options through various TLDs and cc TLDs for our Tucows Domains segment.
Our business is particularly vulnerable to fee increases imposed by registries like Verisign, which controls .com domains.
Verisign, for instance, charges $10.26 per .com registration, with ICANN imposing an additional $0.20 fee.
−Removed: With Verisign’s contract extended until 2030, it is permitted to increase .com domain prices by up to 7% annually in the last four years of its term.
−Removed: In 2024, Verisign exercised this right, raising .com registration costs by 7%, impacting our cost of revenues.
−Removed: Additionally, in our mobile services segment, we rely on MNOs for network capacity, but with a shrinking retail subscriber base concentrated on a single MNO, our ability to negotiate favorable rates is limited.
+Added: Under Verisign’s registry agreement, which extends through 2030, Verisign may increase .com prices by up to 7% annually during the final four years of the term, allowing for a potential price increase as early as the fourth quarter of 2026.
+Added: Any such increase would raise our cost of revenues.
For our Ting Internet segment, we depend on leased fiber capacity, installation equipment, and third-party network access, and any disruptions in supply or cost increases could affect our ability to scale and maintain profitability.
−Removed: Since we have no control over these pricing adjustments and contract terms, they could significantly impact our financial performance and competitiveness across our core businesses.
+Added: Adverse conditions in the U.S.
+Added: and international markets could materially adversely affect our results of operations and financial condition.
+Added: Unfavorable economic conditions, including economic slowdowns, volatile inflation rates, rising interest rates, lower employment levels or reduced consumer and business spending, could negatively affect demand for our products and services and increase our operating costs.
+Added: During periods of economic uncertainty, customers may delay purchasing decisions, reduce usage of our services, downgrade to lower-priced offerings, or experience financial distress, which could adversely impact revenues, margins, and cash flows across our businesses.
+Added: In addition, inflationary pressures and higher interest rates have increased, and may continue to increase, our costs, including labor, energy, network operations, and interest expense.
+Added: If adverse economic conditions persist or worsen, our cost-reduction efforts may be insufficient to offset these impacts, and our results of operations and financial condition could be materially adversely affected.
+Added: A severe or prolonged economic downturn could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all.
+Added: Moreover, the uncertainty surrounding government funding debates and debt-ceiling negotiations can negatively affect market conditions, investor sentiment, and the liquidity of small-cap and microcap issuers such as ours.
+Added: Accordingly, any future federal government shutdown or protracted budget impasse could materially and adversely affect our regulatory compliance, financing options and capabilities, and overall financial condition.
Changes in Internet infrastructure, adoption, and navigation practices could impact our business.
1 unchanged sentence
Any fundamental shift in Internet usage, governance, or navigation could materially impact our business, financial condition, and growth prospects.
−Removed: Ting Internet:
−Removed: The adoption of fiber-optic Internet may be impacted by factors such as consumer reluctance to switch providers, network performance limitations, or the rise of alternative wireless technologies that provide competitive speeds without fixed infrastructure.
−Removed: Any of these could slow fiber adoption, limiting our growth.
Tucows Domains:
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Any major shift in Internet infrastructure, governance, or navigation practices could reduce demand for our services and negatively affect our long-term financial performance.
−Removed: Investments in new businesses and technologies, as well as divestitures, carry inherent risks that may impact our operations and financial performance.
−Removed: We continually invest in new businesses, services, and technologies and divest non-core assets, but these strategies may not generate the anticipated benefits and could disrupt ongoing operations.
−Removed: If we fail to integrate acquisitions effectively, realize expected synergies, or achieve target returns, our financial condition and ability to meet obligations could be negatively affected.
−Removed: We may continue to acquire companies, assets, or technologies to expand services, enhance infrastructure, or address competitive pressures.
−Removed: These transactions carry risks, including:
−Removed: Management distraction from core operations,
−Removed: Integration challenges with acquired businesses,
−Removed: Significant acquisition costs and potential liabilities,
−Removed: Loss of key employees,
−Removed: Unanticipated regulatory changes, and
−Removed: Failure to generate expected financial returns.
−Removed: For example, under the EchoStar Purchase Agreement, we receive a 10-year payment based on transferred subscriber margins.
−Removed: If subscriber churn exceeds expectations or if EchoStar’s pricing strategies or cost structures reduce profitability, our anticipated income stream may fall short, impacting financial results.
−Removed: Additionally, we may be unable to identify or complete future acquisitions on favorable terms, and market perception of acquisitions could negatively affect our stock price.
−Removed: There is no assurance that our investments will be successful, and failure to realize anticipated benefits could adversely impact our financial condition and operating results.
The Company's success depends on our ability to adapt to technological advancements and evolving industry trends.
22 unchanged sentences
This enhances the risk that we may not successfully implement brand enhancement efforts in the future.
−Removed: Additionally, as part of the EchoStar Purchase Agreement executed in the year ending December 31, 2020 ("Fiscal 2020"), the Company granted EchoStar the right to use the name "Ting" and its associated domain name over a 24-month period, after which EchoStar had an option to purchase the brand from the Company.
−Removed: EchoStar has formally refused their option to purchase the Ting brand, however the right to use the name "Ting" by EchoStar was subsequently extended by the Company and now runs month to month.
−Removed: Any actions taken by EchoStar as part of the transactions contemplated by the EchoStar Purchase Agreement may impact the Ting brand's reputation.
−Removed: These actions could range from poor service quality, bad customer experience, privacy concerns, data breaches, and other events that could negatively impact the Ting brand permanently.
−Removed: The Ting brand could then carry negative connotation with consumers and impact our ability to continue to grow our Fiber Internet business under the Ting brand.
−Removed: If any of these events occur, our operational performance and financial results, in particular those of our Fiber Internet business may be adversely affected.
−Removed: The Company’s success depends on the continued service and availability of key personnel
−Removed: Much of the Company’s future success depends on the continued availability and service of key personnel, including its Chief Executive Officer, executive team and other highly skilled employees.
−Removed: Experienced personnel in the technology industry are in high demand and competition for their talents is intense.
−Removed: We may not be able to retain our key employees or replace them when necessary.
+Added: Our ability to successfully execute on the strategic process for Ting is critical to addressing its liquidity needs, and failure to do so on a timely basis could have a material adverse effect on the business.
+Added: Given Ting’s ongoing capital requirements, we have commenced a process to review strategic alternatives for the Ting business.
+Added: This process is intended to address Ting’s liquidity needs and long-term sustainability and may include a range of potential outcomes, such as a sale, recapitalization, restructuring, partnership, or other strategic transaction.
+Added: There can be no assurance that the process to review strategic alternatives will result in any transaction or outcome, that any transaction pursued will be completed on acceptable terms, or that it will be completed on a timeline sufficient to address Ting’s liquidity needs, or will fully discharge Ting’s obligations.
+Added: The availability, timing, and terms of any strategic transaction will depend on numerous factors, including market conditions, investor interest, Ting’s operating performance, and broader economic and industry conditions, which are outside of our control.
+Added: If the process does not result in a successful transaction, or if it is delayed or abandoned, Ting may be required to pursue other measures to address its liquidity needs, including more significant reductions in operating expenses, deferral or abandonment of strategic initiatives, raising capital on unfavorable terms, or pursuing restructuring, bankruptcy or insolvency alternatives.
+Added: Any such actions could materially and adversely affect Ting’s business, financial condition, and results of operations and could result in a loss of some or all of our investment in Ting.
+Added: In addition, this process may divert management’s attention, create uncertainty among employees, customers, suppliers, and investors, create and increase volatility in the trading price of our securities.
+Added: Litigation, including securities class action litigation, or other regulatory actions and investigations often follows certain significant business transactions, such as the announcement of any strategic transaction, or the announcement of negative events.
+Added: We may be exposed to such litigation even if no wrongdoing occurred.
+Added: Litigation is usually expensive and also diverts management’s attention.
+Added: These effects could persist regardless of whether a transaction is ultimately completed and could have a material adverse effect on our consolidated business, financial condition, and results of operations.
+Added: Ting’s ability to continue as a going concern depends on significant changes to its operations or additional sources of liquidity.
+Added: Ting has incurred recurring operating losses and negative cash flows and has historically relied on external financing, including redeemable preferred units and term notes, to fund its operations.
+Added: Based on current forecasts, Ting’s existing cash resources are expected to be insufficient to fund operations and meet its financial obligations beyond the second quarter of the year ending December 31, 2026 ("Fiscal 2026"), under a business-as-usual scenario.
+Added: The Return Breach related to the Series A Preferred Units, as well as current market conditions, may significantly impact Ting’s ability to raise any additional financing at acceptable rates, or at all.
+Added: Further details on the Return Breach are described in "Note 13.
+Added: Redeemable Preferred Units" of the Notes to the Consolidated Financial Statements.
+Added: Management has initiated a process to review strategic alternatives, as detailed in the above risk factor, and is addressing Ting’s liquidity needs by reducing operating costs and restructuring operations.
+Added: Ting’s ability to continue as a going concern is dependent, in part, on the success of this strategic review process.
+Added: However, there can be no assurance that these plans will be successfully implemented on a timely basis, or at all, or that they will generate sufficient liquidity to enable Ting to continue operations.
+Added: If Ting is unable to execute these plans or obtain additional funding when needed, it may be required to significantly curtail operations, pursue financing on unfavorable terms, or seek protection under bankruptcy or insolvency laws.
+Added: Any such outcomes could materially and adversely affect our consolidated results of operations and the value of our investment in Ting, which could in turn affect the price of our common stock, our relationship with third parties with whom we do business and our ability to raise additional capital.
+Added: If the Company is required to wind down or substantially reduce operations at Ting, it may incur costs, which could adversely affect the Company’s financial condition and results of operations.
+Added: If Ting’s strategic review process does not result in a transaction or other outcome that addresses Ting’s liquidity needs and long-term sustainability, the Company may determine that it is necessary to wind down, restructure, or more substantially reduce operations at Ting.
+Added: Any such actions could require the Company to provide financial and operational support to facilitate an orderly transition and could result in significant costs being incurred.
+Added: In connection with a wind-down or significant reduction in operations, Ting may incur costs related to employee severance, retention and termination benefits, contract termination or exit costs, professional and advisory fees and other restructuring-related expenses.
+Added: As the ultimate parent and shared service provider to Ting for certain business functions, the Company may incur costs primarily related to employee severance and termination benefits, contract termination or exit costs, and professional service and advisory fees associated with services provided at the corporate level.
+Added: In addition, the Company may incur costs to settle certain obligations under commercial agreements, leases, vendor contracts and other commitments of Ting where it has acted as guarantor to those agreements.
+Added: Any such costs incurred at the Company level could reduce liquidity available at the Company and limit its ability to deploy capital to other businesses or strategic initiatives.
RISKS RELATED TO OUR OPERATIONS AND INFRASTRUCTURE
2 unchanged sentences
Any system failure, service interruption, or infrastructure damage—whether within our own facilities or those of our third-party partners—could result in service disruptions, loss of revenue, reputational harm, and financial liabilities.
−Removed: Ting Internet relies on our Fiber Network, as well as third-party Partner Network Providers in certain markets.
+Added: Ting Internet relies on our Fiber Network, as well as third-party-owned networks, including municipal and private ("Partner Network Providers") in certain markets.
Damage to network facilities, failure to maintain government authorizations, or non-compliance with regulations by these third parties could disrupt our service and result in financial losses.
6 unchanged sentences
System failures due to natural disasters, cyberattacks, sabotage, or financial instability of data center operators could cause prolonged service outages, negatively affecting our brands, revenue, and profitability.
−Removed: Some of our businesses rely on Network Operators.
−Removed: Failure by a Network Operator to obtain the proper licenses, approvals and or permits from regulatory authorities would cause us to be unable to successfully operate those businesses .
−Removed: The FCC licenses currently held by our Network Operators and their third-party affiliates to provide wireless services are subject to renewal and revocation.
−Removed: There is no guarantee that their wireless or network licenses will be renewed.
−Removed: The FCC requires all licensee to meet certain requirements, including so-called “build-out” requirements, to retain their licenses.
−Removed: Their failure to comply with certain FCC requirements in a given license area could result in the revocation of their license for that geographic area.
−Removed: This could impact our ability to scale operations, meet customer demand, and achieve projected revenue growth.
−Removed: Additionally, increased regulatory requirements could lead to higher compliance costs and extended buildout timelines.
We are subject to minimum purchase commitments with some partner network providers and mobile network operators.
−Removed: In certain Ting markets, we operate on third-party-owned internet networks, including municipal and private ("Partner Network Providers"), rather than building our own infrastructure.
+Added: In certain Ting markets, we operate on third-party-owned internet networks, including Partner Network Providers, rather than building our own infrastructure.
We pay fees based on minimum purchase commitments, which often increase as network construction expands and new serviceable addresses become available.
1 unchanged sentence
Additionally, under our Ting Mobile agreement, we have a "take or pay" minimum purchase commitment with our MNO supplier.
−Removed: We are committed to a minimum of $18.5 million in remaining payments through February 16, 2026.
−Removed: Due to the small size of our retained mobile subscriber base, we expect to incur penalties related to underutilization, with $1.3 million accrued as of December 31, 2024.
−Removed: If we fail to grow our mobile customer base or renegotiate these obligations, our cost of revenue may increase, negatively impacting financial results.
−Removed: To date, renegotiation efforts have been largely unsuccessful, with only partial deferrals of penalty escalation.
−Removed: The Company expects to incur penalties throughout the year ending December 31, 2025 ("Fiscal 2025") and thereafter until the contract is complete in early 2026.
−Removed: We are parties to agreements with other unrelated parties for certain business operations and to license third-party technologies.
−Removed: Any claims against these unrelated parties that we rely upon for business operations and/or licensed technology could result in the need to incur substantial costs to replace technology or services which could delay and increase the cost of product and service developments.
−Removed: Across all of our business segments, we have entered into agreements with third parties for licensing of certain technologies, the day-to-day execution of certain services, the development and maintenance of certain systems necessary for the operation of our businesses and for network equipment, handsets, devices and other equipment where appropriate.
−Removed: We expect our dependence on key suppliers to continue as more advanced technologies and services are developed.
−Removed: If we experience difficulties with regard to these arrangements or are unable to negotiate on commercially reasonable terms or at all with future vendors, it could result in additional expense, loss of customers and revenue, interruption of our services or a delay in the roll-out of new technology and services for our customers.
−Removed: The execution of our Ting restructuring plans, involves risks that could adversely affect our business operations, financial condition, and growth strategy;
−Removed: including risks related to implementation difficulties, operational disruptions, and financial impacts.
−Removed: To reflect the ongoing operational prioritizations of the Ting segment and to lower year-over-year operating expenses, we undertook the Ting workforce reductions on February 7, 2024 and October 30, 2024.
−Removed: The 2024 workforce reductions were aimed at streamlining the operations within our Ting segment and reducing capital expenditures.
−Removed: The successful execution of these plans was critical to our efforts to reduce costs, improve efficiency, and align our resources with strategic priorities.
−Removed: However, the implementation of the workforce reductions requires significant management attention and financial resources and is subject to a number of risks that could negatively impact our results of operations, including the following:
−Removed: Implementation difficulties and costs:
−Removed: The process of implementing the Capital Efficiency Plan may encounter unforeseen challenges, including delays and higher-than-anticipated expenses.
−Removed: These difficulties could hinder our ability to achieve the anticipated benefits of the Plan, such as cost savings and improved operational efficiencies.
−Removed: Operational Disruptions:
−Removed: Changes to our operational structure as part of the Capital Efficiency Plan, such as workforce reductions, may lead to temporary disruptions in our operations.
−Removed: These disruptions could adversely affect our ability to meet customer demands, maintain service quality, and achieve our growth objectives.
−Removed: Financial Impacts:
−Removed: The Capital Efficiency Plan has resulted in significant costs related to severance, asset write-downs, and other restructuring charges, which were incurred in the current fiscal period.
−Removed: While these expenditures were necessary to implement the plan and are expected to yield long-term financial benefits, they have negatively impacted our profitability in the short term.
−Removed: There is also a risk that the anticipated efficiencies and cost savings may take longer than expected to materialize or may not fully offset the upfront costs.
−Removed: Employee Morale and Retention:
−Removed: The Capital Efficiency Plan may impact employee morale and lead to challenges in retaining key personnel.
−Removed: Maintaining a motivated workforce is crucial to our ongoing success, and any negative effects on employee morale could adversely impact our business operations and financial performance.
−Removed: Market and Competitive Pressures:
−Removed: As we restructure our operations, there is a risk that competitors may take advantage of any perceived disruptions or weaknesses, potentially impacting our market position and competitive advantage.
−Removed: Reputational Harm:
−Removed: The public perception and reputation of our company could be adversely affected by the execution of significant restructuring plans like the Plan.
−Removed: Public, customer, and investor perceptions of our actions, especially in relation to workforce reductions, service changes, or other visible outcomes of the restructuring, could negatively influence our brand and reputation in the market.
−Removed: Impede Growth:
−Removed: The restructuring plans are expected to significantly reduce capital expenditures, which will in turn slow, and in some markets pause, the expansion of the Ting Internet footprint.
−Removed: The resulting reduction in capital spend will result in fewer additions to the Company's Owned Infrastructure Serviceable Addresses, which in turn could lead to fewer net additions to Internet Subscribers Under Management and revenue growth.
−Removed: Despite these challenges, we are committed to successfully implementing the Plan and believe that it is a necessary step towards achieving our long-term strategic goals.
−Removed: We are closely monitoring the progress of the restructuring activities and are prepared to take corrective actions as needed to mitigate these risks.
−Removed: However, investors should be aware that the factors described above, among others, could have an adverse impact on our overall financial condition and results of operations.
+Added: Due to the small size of our retained mobile subscriber base, we have incurred penalties related to underutilization from limited growth in the mobile subscriber base, with $3.9 million accrued as of December 31, 2025.
+Added: The Company incurred these penalties throughout the year ending December 31, 2025 ("Fiscal 2025") and thereafter until the initial term of the contract and contractual minimums was complete in January 2026.
+Added: The contract will automatically continue month-to-month thereafter, with no expected penalties in the month-to-month arrangement.
+Added: Should we continue to be bound by any minimum purchase commitments in excess of our customer-based usage, our cost of revenue may increase, negatively impacting financial results.
+Added: Slower-than-expected subscriber growth and ongoing operating losses could impair Ting’s ability to meet its financial and operational obligations and limit its access to additional financing.
+Added: Ting has incurred recurring operating losses and negative operating cash flows and continues to require substantial capital to fund its operations.
+Added: Ting’s ability to meet its financing commitments, including scheduled interest and principal payments under its term notes and obligations under its redeemable preferred units, depends in part on achieving subscriber growth and operating performance.
+Added: Ting’s recent subscriber growth has been below internal forecasts, and there can be no assurance that subscriber growth will improve or meet expectations in future periods.
+Added: Lower-than-expected net additions to Ting’s subscriber base would reduce recurring revenue and cash flow, increase pressure on liquidity, and impair Ting’s ability to fund operations and service its debt.
+Added: In addition, Ting has a cost structure that includes significant fixed and semi-fixed expenses related to network operations, personnel, and customer support.
+Added: If Ting is unable to scale revenues sufficiently to absorb these costs, or if cost-reduction initiatives are delayed or less effective than anticipated, operating losses may increase, further constraining liquidity and limiting Ting’s financial flexibility.
+Added: These factors could materially and adversely affect Ting’s business, financial condition, and results of operations.
RISKS RELATED TO CYBERSECURITY, DATA PRIVACY, AND INTELLECTUAL PROPERTY
31 unchanged sentences
As the privacy laws and regulations around the world continue to evolve, these changes could adversely affect our business operations in similar ways.
−Removed: Disputes concerning the ownership or rights to use intellectual property and litigation involving other rights of third parties could be costly and time-consuming to litigate, may distract management from operating the business, and may result in us paying significant damage awards, losing significant rights and our ability to operate all or a portion of our business .
−Removed: We rely upon copyright, trade secret and trademark law, confidentiality and nondisclosure agreements, invention assignment agreements and work-for-hire agreements to protect our proprietary technology, all of which offer only limited protection.
−Removed: Due to the global nature of our web-based businesses and services, we cannot ensure that our efforts to protect our proprietary information will be adequate to protect against infringement and misappropriation by third parties, particularly in foreign countries where laws or law enforcement practices may not protect proprietary rights as fully as in the U.S.
−Removed: We have licensed, and may in the future license, some of our trademarks and other proprietary rights to others.
−Removed: Third parties may also reproduce or use our intellectual property rights without seeking a license and thus benefit from our technology without paying for it.
−Removed: Third parties could also independently develop technology, processes or other intellectual property that are similar to or superior to those used by us.
−Removed: Actions by licensees, misappropriation of the intellectual property rights or independent development by others of similar or superior technology might diminish the value of our proprietary rights or damage our reputation.
−Removed: The unauthorized reproduction or other misappropriation of our intellectual property rights, including copying the look, feel and functionality of our website could enable third parties to benefit from our technology without us receiving any compensation.
−Removed: The enforcement of our intellectual property rights may depend on our taking legal action against these infringing parties, and we cannot be sure that these actions will be successful.
−Removed: Defense of claims of infringement of intellectual property or other rights of third parties against us would require the resources of both our time and money.
−Removed: Third parties may assert claims of infringement of patents or other intellectual property rights against us concerning past, current or future technologies.
−Removed: Content obtained from third parties and distributed over the Internet by us may result in liability for defamation, negligence, intellectual property infringement, product or service liability and dissemination of computer viruses or other disruptive problems.
−Removed: We may also be subject to claims from third parties asserting trademark infringement, unfair competition and violation of publicity and privacy rights relating specifically to domains.
−Removed: As a domain name registrar, we regularly become involved in disputes over registration of domain names.
−Removed: These disputes are typically resolved through the UDRP, ICANN’s administrative process for domain name dispute resolution, or less frequently through litigation under the Anti Cyber Squatting Consumer Protection Act "ACPA", or under general theories of trademark infringement or dilution.
−Removed: The UDRP generally does not impose liability on registrars, and the ACPA provides that registrars may not be held liable for registering or maintaining a domain name absent a showing of bad faith intent to profit or reckless disregard of a court order by the registrars.
−Removed: However, we may face liability if we fail to comply in a timely manner with procedural requirements under these rules.
−Removed: In addition, these processes typically require at least limited involvement by us, and therefore increase our cost of doing business.
−Removed: The volume of domain name registration disputes may increase in the future as the overall number of registered domain names increases.
−Removed: We have substantial goodwill and other intangible assets, therefore to the extent that any intellectual property is deemed impaired we would be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill or intangible assets is determined.
−Removed: Any impairment charges or changes to the estimated amortization periods could have a material adverse effect on our financial results.
−Removed: Domain names are valuable assets, and cybersecurity risks could lead to their loss or misattribution of liability to us.
−Removed: Domain names are valuable and critical assets for businesses, serving as digital storefronts and key components of brand identity, customer engagement, and online commerce.
−Removed: As a domain registrar, we facilitate the registration, renewal, and management of domain names on behalf of customers.
−Removed: However, cyber threats such as phishing, social engineering, credential theft, and unauthorized account access create risks that could result in the loss, transfer, or hijacking of valuable domain names.
−Removed: In the event that we, our systems, or a customer’s account is compromised due to a cyberattack, the affected party may suffer significant reputational and financial harm.
−Removed: A lost or stolen domain name can lead to business disruption, loss of web traffic, loss of value, intellectual property disputes, and potential legal claims.
−Removed: Even if the security breach originates from a customer’s own systems, we may be blamed for failing to prevent the loss or unauthorized transfer of the domain, leading to liability exposure, regulatory scrutiny, or litigation.
−Removed: Despite implementing security measures such as multi-factor authentication, domain locking, and account monitoring, no system is immune to attack.
−Removed: Additionally, evolving cyber threats—particularly AI-driven fraud, deepfake impersonation, and credential stuffing—may increase the likelihood of domain-related security breaches.
−Removed: If we are held responsible for a domain name loss, whether through direct fault or perceived negligence, our reputation, financial position, and operations could be materially impacted.
+Added: Disputes involving intellectual property rights, domain name ownership, or cybersecurity incidents could be costly and adversely affect our business and results of operations.
+Added: We rely on intellectual property laws and contractual protections, including confidentiality and invention assignment agreements, to protect our proprietary technology and other intellectual property.
+Added: These protections provide only limited safeguards, particularly in foreign jurisdictions, and disputes or litigation involving intellectual property or other rights of third parties may be costly and time-consuming, divert management attention, and result in damages, loss of rights, or restrictions on our ability to operate our business.
+Added: As a domain name registrar, we are regularly involved in disputes relating to the registration, ownership, and use of domain names, including proceedings under ICANN’s Uniform Domain Name Dispute Resolution Policy or litigation under the Anti-Cybersquatting Consumer Protection Act.
+Added: While registrars are generally afforded certain protections, failure to comply with applicable requirements or court orders could result in liability and increased operating costs.
+Added: Domain names are valuable digital assets, and cyber threats such as phishing, credential theft, unauthorized account access, and other evolving attack methods create risks of domain loss, transfer, or hijacking.
+Added: If our systems or those of our customers are compromised, we may face reputational harm, legal claims, regulatory scrutiny, or litigation, even where the breach originates from a customer’s systems.
+Added: Despite implementing security measures, no system is immune to attack, and any impairment of intellectual property or related intangible assets could require us to record significant charges that could materially adversely affect our financial condition and results of operations.
RISKS RELATED TO FINANCIAL AND MACROECONOMIC CONDITIONS
−Removed: Our indebtedness could adversely affect our ability to raise additional capital to fund our operations, our ability to operate our business, execute our strategy divert our cash flow from operations for debt payments, and prevent us from meeting our debt obligations.
−Removed: The Company’s wholly owned subsidiary, Ting Fiber, LLC, as well as its wholly owned subsidiaries are financed by the 2023 and 2024 Term Notes (as defined in Note 8 – Notes Payable to the Company’s Consolidated Financial Statements) as well as the Unit Purchase Agreement (“UPA”) with Generate ( as defined in Note 13 – Redeemable Preferred Units to the Company’s Consolidated Financial Statements).
−Removed: On May 4, 2023 (the "Closing Date"), Tucows Inc.
−Removed: through its indirect and wholly owned subsidiaries, including Ting Fiber, LLC, entered into a definitive agreement relating to a securitized financing facility related to (i) $168,357,000 of its 5.95% Secured Fiber Revenue Notes, Series 2023-1, Class A-2, (ii) $23,289,000 of its 7.40% Secured Fiber Revenue Notes, Series 2023-1, Class B and (iii) $46,859,000 initial principal amount of 9.95% Secured Fiber Revenue Notes, Series 2023-1, Class (together, the “2023 Term Notes”).
−Removed: On the Closing Date, Ting Issuer LLC, a Delaware limited liability company (the “Issuer”), a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company issued the 2023 Term Notes.
−Removed: The net proceeds from the issuance of the 2023 Term Notes were $220.5 million, after deducting a debt discount of $11.2 million and issuing costs of $6.7 million.
−Removed: As of March 13, 2025, our outstanding 2023 Term Notes was $238.5 million.
−Removed: On August 20, 2024, Tucows Inc., through its indirect and wholly owned subsidiaries, including Ting Fiber, LLC, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitization transaction.
−Removed: On August 20, 2024, Ting Issuer LLC, the Issuer, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company, issued the 2024 Term Notes.
−Removed: The net proceeds from the issuance of the 2024 Term Notes were $61.0 million, after deducting issuance costs of $2.0 million.
−Removed: As of March 13, 2025, our outstanding 2024 Term Notes was $63 million.
−Removed: The 2023 Term Notes and 2024 Term Notes are secured by certain of the Ting Issuer LLC's, revenue-generating assets, consisting principally of fiber-network related agreements, fiber-network assets and customer contracts (collectively, the “Securitized Assets”) that are owned by certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as the Guarantors (collectively with the Issuer, the “Obligor”) under the Base Indenture, dated as of May 4, 2023 (the “Base Indenture”).
−Removed: The 2023 Term Notes and 2024 Term Notes are subject to a series of covenants, restrictions and other investor protections including (i) that the Issuer maintains specified reserve accounts to be used to make required payments in respect of the 2023 Term Notes and 2024 Term Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, (iii) certain indemnification payments, (iv) the guarantors comply with standard bankruptcy-remoteness covenants, including not guaranteeing or being liable for other affiliates debts or liabilities, and (v) covenants relating to recordkeeping, access to information, and similar matters.
−Removed: Our ability to remain in compliance with our operating restrictions, generate cash flow from operations to maintain reserve account, make principal, interest payments on our debt will depend on our future performance, which will be affected by a range of economic, competitive and business factors and changes in government monetary or fiscal policy.
−Removed: Failure to maintain compliance with operating restrictions of our credit facility could result in a default and could have a material adverse effect on our business and results of operation.
−Removed: As of March 13, 2025,Generate has purchased preferred units under the UPA for an aggregate amount equal to $91.5 million, with a further capital commitment of $108.5 million available to Ting Fiber, LLC through Milestone Fundings (Please see “Note 13– Redeemable preferred units” of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report)
−Removed: The terms of Ting Fiber, LLC'S amended and restated limited liability company agreement (the "LLC Agreement") with Generate prohibit Tucows from funding the operations or capital investments in Ting Fiber, LLC with funds generated by its subsidiaries outside of Ting Fiber, LLC's or its wholly owned subsidiaries (“Tucows businesses excluding Ting”).
−Removed: In order to continue the planned expansion of the Ting Internet footprint and fund future operating losses, we may need to access Milestone Fundings under the UPA, as well as engage in equity and further debt financing.
−Removed: Our ability to achieve the Milestones to access the additional funding under the UPA will depend on our future performance, which will be affected by a range of economic, competitive and business factors and changes in government monetary or fiscal policy.
−Removed: Our financing partner, Generate, may not grant permission for Ting Fiber, LLC to engage in further debt or equity financings.
−Removed: Failure to access the additional funding, could have a material adverse effect on our business.
−Removed: In addition, the terms of the LLC Agreement restrict distribution from Ting Fiber, LLC's net cash flow without Generate's consent.
−Removed: On September 22, 2023, the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc.
−Removed: and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers,” collectively with the Company, “Tucows”) and certain other subsidiaries of the Company, as guarantors, entered into a Credit Agreement (the “2023 Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto, to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amount not to exceed $240 million (the “2023 Credit Facility”).
−Removed: The Borrowers may request an increase to the 2023 Credit Facility through new commitments of up to $60 million if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the 2023 Credit Agreement) is less than 3.75:1.00.
−Removed: The 2023 Credit Facility expires on September 22, 2026, which is the third anniversary of the effective date of the 2023 Credit Facility.
−Removed: The 2023 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default.
−Removed: The 2023 Credit Agreement requires that the Company comply with certain customary non-financial covenants and restrictions.
−Removed: In addition, the Company has agreed to comply with the following financial covenants:
−Removed: (1) a leverage ratio by maintaining at all times a Total Funded Debt to Adjusted EBITDA Ratio of not more than (i) 4.50:1:00 at any time from and after the Closing Date to and including December 30, 2023; (ii) 4.25:1:00 from December 31, 2023 to and including March 30, 2024; (iii) 4.00:1.00 from March 31, 2024 to and including June 29, 2024; and (iv) 3.75:1.00 thereafter; and (2) an interest coverage ratio by maintaining as of the end of each rolling four financial quarter period, an Interest Coverage Ratio (as defined in the 2023 Credit Agreement) of not less than 3.00:1.00.
−Removed: Tucows businesses excluding Ting are financed by the Company’s 2023 Credit Facility.
−Removed: As of March 13, 2025, our outstanding debt under the 2023 Credit Facility was $195.4 million with remaining committed funds of $44.6 million.
−Removed: Absent sufficient cash flows from operations, Tucows businesses excluding Ting may need to engage in equity or debt financings to secure additional funds to meet our operating and capital needs.
−Removed: The covenants and restrictions on the 2023 Credit Facility may prevent the Tucows businesses excluding Ting from accessing the remaining committed funds if additional financing is required.
−Removed: In any situation where the Company is seeking such debt or equity financing, it may not be able to secure additional debt or equity financing on favorable terms, or at all, at the time when funding is needed.
−Removed: The Company does not currently have an effective “universal” shelf registration statement on Form S-3 on file with the SEC, which might delay the Company's ability to complete an equity financing.
−Removed: In addition, even though we may have sufficient cash flow, we may still elect to sell additional equity or debt securities or obtain credit facilities for other reasons.
−Removed: If we raise additional funds through further issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution in their percentage ownership of our company, and any new equity securities we issue could have rights, preferences and privileges senior to those of holders of our common stock.
−Removed: In addition, if we decide to raise funds through debt or convertible debt financings, we may be unable to meet our interest or principal payments.
−Removed: Our inability to generate sufficient cash flow from operations or obtain additional capital or alternative financing on acceptable terms could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Our debt agreements impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities across the Company.
−Removed: Breaching these agreements could have a materially adverse impact on the Company.
−Removed: The agreements governing our current 2023 Credit Facility impose significant operating and financial restrictions on Tucows businesses excluding Ting.
−Removed: These restrictions, subject in certain cases to customary baskets, exceptions, and incurrence-based ratio tests, may limit our subsidiaries' ability to engage in some transactions, including the following:
−Removed: incurring additional indebtedness and issuing stock;
−Removed: paying dividends, share repurchases or making other restricted payments or investments;
−Removed: selling assets, properties, or licenses that we have or in the future may procure, creating liens on assets;
−Removed: engaging in mergers, acquisitions, business combinations, or other transactions.
−Removed: The trailing twelve month debt to Adjusted EBITDA ratio was 3.26:1.00 as of December 31, 2024 for the Tucows businesses excluding Ting.
−Removed: Our covenants under the Company’s 2023 Credit Facility required us to maintain a debt to Adjusted EBITDA ratio of not more than 3.75:1.00.
−Removed: Our ability to remain in compliance with our operating restrictions, generate cash flow from operations to make principal, interest payments on our debt will depend on our future performance, which will be affected by a range of economic, competitive and business factors as well as changes in government monetary or fiscal policy.
−Removed: Failure to maintain compliance with the operating restrictions of the 2023 Credit Facility could result in default and could have a material adverse effect on our business.
−Removed: With respect to the UPA, Ting Fiber, LLC is obligated to redeem Generate's equity interests for an amount equal to the outstanding 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 closing of the transaction (the "Transaction Close"), upon certain conditions, including a material breach of any Tucows' credit agreement that is not cured, the failure to pay the preferred return in two consecutive quarters following the second anniversary of the Transaction Close, and the six year anniversary of the Transaction Close.
−Removed: These restrictions could limit our ability to react to changes in our operating environment or the economy.
−Removed: Triggering the make-whole provision could have a material adverse effect on our business.
−Removed: With respect to the 2023 and 2024 Term Notes are secured by certain of the Company’s revenue-generating assets, consisting principally the Securitized Assets that are owned by the Obligor under the Base Indenture.
−Removed: The 2023 and 2024 Term Notes are subject to a series of covenants, restrictions and other investor protections including (i) that the Issuer maintains specified reserve accounts to be used to make required payments in respect of the 2023 and 2024 Term Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, (iii) certain indemnification payments, (iv) the guarantors comply with standard bankruptcy-remoteness covenants, including not guaranteeing or being liable for other affiliates debts or liabilities, and (v) covenants relating to recordkeeping, access to information, and similar matters.
−Removed: Our ability to remain in compliance with our operating restrictions, generate cash flow from operations to maintain reserve account, make principal, interest payments on our debt will depend on our future performance, which will be affected by a range of economic, competitive and business factors as well as changes in government monetary or fiscal policy.
−Removed: Failure to maintain compliance with the operating restrictions of our credit facility could result in default and could have a material adverse effect on our business.
−Removed: Any future indebtedness that we incur may contain similar or more restrictive covenants.
−Removed: Any failure to comply with the restrictions of our debt agreements may result in an event of default under these agreements, which in turn may result in defaults or acceleration of obligations under these agreements and other agreements, giving our lenders the right to terminate any commitments they had made to provide us with further funds and to require us to repay all amounts then outstanding.
−Removed: Any of these events would have a material adverse effect on our business, financial condition, and operating results.
−Removed: Our preferred unit financing arrangement could impact our financial condition by diverting cash flow to debt payments and limiting our ability to operate effectively.
−Removed: It also imposes operational and financial milestones on our Ting segment, which could restrict access to additional funding.
−Removed: On August 8, 2022, Ting Fiber, LLC entered into the UPA with Generate under which Ting Fiber, LLC has committed to issue and sell $60 million of Series A Preferred Units at the Initial Funding, subject to customary closing conditions, and an additional aggregate of $140 million Series A Preferred Units if the Milestones are achieved over a three year period from the date of the Transaction Close.
−Removed: As of March 13, 2025, our outstanding preferred units purchased under the UPA was $91.5 million, with a further capital commitment of $108.5 million available to Ting LLC through Milestone Fundings.
−Removed: The Series A Preferred Units accrue a preferred return to the holder at a rate of 15% per annum, subject to adjustments based on the value of approved projects under the Equity Capital Contribution Agreement (the “ECC Agreement”).
−Removed: The preferred return on the Series A Preferred Units purchased under the Unit Purchase Agreement may be adjusted down to a floor of 13% or up to a ceiling of 17% per annum based on commitment and contribution amounts under the ECC Agreement.
−Removed: The preferred return accrues daily, and is compounded quarterly.
−Removed: The preferred return accrued during the first two years is not payable unless and until the Series A Preferred Units are redeemed.
−Removed: The preferred return accrued after the second anniversary of the Transaction Close is payable by the Company quarterly.
−Removed: If the Company should redeem the Series A Preferred Units prior to the fourth anniversary of the Transaction Close, the Company is required to pay a make-whole premium.
−Removed: On May 4, 2023, Ting Fiber, LLC executed the Ting Class C Notes - Redemption Agreement (the "Redemption Agreement") and the Ting Class C Notes – Side Letter (the "Side Letter Agreement") with Generate.
−Removed: Under the terms of the Redemption Agreement, Ting Fiber, LLC redeemed 5,173,067 Series A Preferred Units held by Generate at $6 per unit, totaling a redemption of $31 million.
−Removed: The terms of the redemption were modified by the Side Letter Agreement, which granted a 30% discount on the make-whole premium which amounted to $14.7 million for a total redemption price of $45.7 million inclusive of the make-whole premium.
−Removed: Terms of the Side Letter Agreement also preclude Ting Fiber, LLC from issuing additional Series A Preferred Units for 365 days from the closing of the Redemption Agreement during which time standby fees will be suspended.
−Removed: Our ability to achieve the Milestones to access the additional funding, as well as to generate cash flow from operations to make the payments in respect of the preferred return, will depend on our future performance, which will be affected by a range of economic, competitive and business factors as well as changes in government monetary or fiscal policy.
−Removed: The failure to access the additional funding or pay the preferred return, could have a material adverse effect on our business.
−Removed: In addition, the Company is obligated to redeem Generate's equity interests for an amount equal to the outstanding capital balance plus the unsatisfied preferred return (and pay a make-whole premium if the redemption occurs within the four years following the Transaction Close), upon certain conditions, including a material breach of any Tucows' credit agreement that is not cured, the failure to pay the preferred return in two consecutive quarters following the second anniversary of the Transaction Close, and the six year anniversary of the Transaction Close.
+Added: The assertion of a Return Breach under Ting’s Unit Purchase Agreement could, if Generate exercises its contractual rights, adversely affect Ting’s liquidity and capital structure.
+Added: Ting entered into a Series A Preferred Unit Purchase Agreement (the “Unit Purchase Agreement”) with Generate on August 8, 2022, and closed the transaction contemplated thereby on August 11, 2022.
+Added: As of December 31, 2025, the balance of the Series A Preferred Units was $137.3 million, excluding deferred financing costs.
+Added: As described in “Note 13.
+Added: Redeemable Preferred Units” of the Notes to the Consolidated Financial Statements, on December 1, 2025, Ting received written notice from Generate asserting that a Return Breach and a Trigger Event had occurred under the Unit Purchase Agreement based on Ting’s failure to pay the quarterly preferred return for two consecutive quarters.
+Added: Generate reserved its rights to pursue remedies available under the LLC Agreement and applicable law, including the ability to make Redemption Request.
+Added: The occurrence of the Return Breach and Trigger Event do not create an immediate liquidity requirement for Ting, unless Generate makes a Redemption Request.
+Added: If Ting did receive a Redemption Request from Generate, the redemption price of an estimated $204.9 million would become due under the Unit Purchase Agreement.
+Added: The redemption price under such a request includes the original issue price, any unsatisfied preferred return, as well as a make-whole premium.
+Added: To date, Generate has not exercised any of the remedies available to them or made a Redemption Request.
+Added: Management has engaged with Generate in proactive and collaborative discussions as part process to review strategic alternatives for Ting.
+Added: However, there can be no assurances that Generate will not exercise its remedies under the Unit Purchase Agreement.
+Added: Should Generate make any such request, Ting does not have sufficient cash or liquid assets to pay the redemption price.
+Added: In such circumstances, Ting may be required to pursue significant operational restructuring, seek additional financing on unfavorable terms, or pursue bankruptcy or insolvency alternatives, any of which could have a material adverse effect on Ting's business, financial condition, and results of operations.
+Added: The rights asserted by Generate in connection with the Return Breach relate solely to Ting Fiber, LLC and its subsidiaries.
+Added: Under the LLC Agreement, Generate’s remedies are limited to the equity interests and assets of Ting Fiber, LLC and its subsidiaries and do not extend to Tucows Inc.
+Added: or its other subsidiaries.
+Added: In addition, Generate’s rights are subordinate to the rights of secured noteholders under Ting’s asset-backed securitization facilities and do not affect the Company’s securitized debt structure or the collateral securing those facilities.
+Added: Our significant indebtedness and financing arrangements could adversely affect our ability to operate our business, pursue strategic initiatives, and meet our financial obligations.
+Added: We have significant indebtedness and financing obligations, including securitized debt, redeemable preferred units, and a revolving credit facility, which may limit our ability to raise additional capital, invest in our businesses, pursue strategic opportunities, or respond to changing market conditions.
+Added: A substantial portion of our cash flow may be required to service debt and preferred returns, reducing funds available for operations and growth initiatives.
+Added: Our debt and financing arrangements contain financial and operational covenants and restrictions, including limitations on additional indebtedness, distributions, asset sales, investments, and other transactions.
+Added: Our ability to comply with these covenants depends on our future operating performance and financial condition, which are subject to economic, competitive, and business factors beyond our control.
+Added: Failure to maintain compliance with these covenants could result in defaults, acceleration of obligations, restricted access to liquidity, increased borrowing costs, or the loss of access to committed financing.
+Added: The agreements governing our credit facility impose significant operating and financial restrictions on us and our subsidiaries.
+Added: These restrictions, subject in certain cases to customary baskets, exceptions, and ratio tests, may limit our subsidiaries’ ability to engage in certain transactions, including incurring additional indebtedness, issuing equity, paying dividends, repurchasing stock, making investments, selling assets, or engaging in mergers, acquisitions, or other strategic transactions.
+Added: As of December 31, 2025, our trailing twelve-month total debt to Adjusted EBITDA ratio for the businesses subject to the credit facility was 3.12:1.00, and our ability to remain in compliance with applicable financial covenants will depend on future operating performance and cash flows.
+Added: In addition, certain of our financing arrangements, including redeemable preferred unit financings at Ting Fiber, LLC, impose operational and financial milestones and restrictions that affect the timing and availability of additional funding.
+Added: Ting has historically relied on proceeds from redeemable preferred units and term notes to fund operations and network expansion, and its ability to access additional financing depends on generating sufficient cash flow and meeting other requirements and conditions.
+Added: There can be no assurance that these conditions will be achieved.
+Added: There can be no assurance that these milestones will be achieved.
+Added: In light of the Return Breach, it is unlikely that Ting will be able to secure additional financing on acceptable terms, or at all.
+Added: In any situation where we seek to obtain additional debt or equity financing, we may be unable to do so on favorable terms, or at all, when needed.
+Added: Future financing may be costly, impose additional restrictions, or result in dilution to existing stockholders.
+Added: If we are unable to generate sufficient cash flow from operations or obtain additional capital or alternative financing on acceptable terms, our business, financial condition, results of operations, and stockholder value could be materially and adversely affected.
The international nature of our businesses and operations expose us to additional risks that could harm our business, operating results, and growth strategy;
including risks related to taxation and foreign currencies fluctuations .
−Removed: As a Company with multinational operations.
−Removed: Expansion into international markets is a continued element of our growth strategy.
−Removed: Introducing and marketing our services internationally, developing direct and indirect international sales and support channels and managing foreign personnel and operations all require significant management attention and financial resources.
−Removed: We face a number of risks associated with expanding our businesses internationally that could negatively impact our results of operations, including the following:
−Removed: Foreign currency fluctuations and exchange rates:
−Removed: Our operating results are accordingly subject to fluctuations in foreign currency exchange rates, which could adversely affect our future operating results.
−Removed: We attempt to mitigate a portion of these risks through foreign currency hedging, based on our judgment of the appropriate trade-offs among risk, opportunity and expense.
−Removed: We generally use hedging programs to partially hedge our exposure to foreign currency exchange rate fluctuations for Canadian dollars, the currency in which we incur the majority of operating expenses.
−Removed: Although we regularly review our hedging program and make adjustments as necessary based on the judgment factors discussed above, our hedging activities may not offset more than a portion of the adverse financial impact resulting from unfavorable movement in foreign currency exchange rates, which could adversely affect our financial condition or results of operations.
−Removed: Potentially adverse tax consequences or an inability to realize tax benefits:
−Removed: Significant judgment is required in determining our provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis.
−Removed: While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be overturned by jurisdictional tax authorities, which may have a significant impact on our provision for income taxes.
−Removed: Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied, including the Tax Cuts and Job Act of 2017.
−Removed: In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies.
−Removed: or other foreign tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted.
−Removed: Management, communication and integration problems resulting from cultural differences and geographic dispersion.
−Removed: Compliance with foreign laws, accreditation and regulatory requirements in relation to provision of services, protection of intellectual property and third-party data in foreign jurisdictions.
−Removed: Competition from companies with international operations, including large international competitors and entrenched local companies.
−Removed: To the extent we choose to make acquisitions to enable our international expansion efforts, the identification of suitable acquisition targets in the markets into which we want to expand.
−Removed: Political and economic instability in some international markets.
−Removed: Sufficiently qualified labor pools in various international markets.
−Removed: We may not succeed in our efforts to continue to expand our international presence as a result of the factors described above or other factors that may have an adverse impact on our overall financial condition and results of operations.
−Removed: The Company’s
−Removed: subsidiary Ting will require additional financing in order to meet its future financial obligations.
−Removed: Ting incurred a net loss of $121.7 million and $119 million for the year ended December 31, 2024 and the year ended December 31, 2023, respectively.
−Removed: At December 31, 2024, Ting had $61.7 million in cash and cash equivalents, restricted cash and restricted cash equivalents, $1.2 million in accounts receivable, $1.2 million in accounts payable and $15.8 million in accrued liabilities.
−Removed: At December 31, 2024, Ting's long term liabilities included $287.6 million payable on the 2023 and 2024 Term Notes as well as $122.1 million on the Redeemable Preferred Units.
−Removed: Ting incurred an operating cash flow deficit of $49.9 million and $50.4 million for the year ended December 31, 2024 and the year ended December 31, 2023, respectively.
−Removed: Ting has scheduled interest payments of $39.9 million in the twelve months following December 31, 2024.
−Removed: Ting may not be able to meet its financial obligations over the twelve months following December 31, 2024 without additional financing.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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).
−Removed: 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.
+Added: We operate and conduct business in multiple countries, including Canada, and our international operations require significant management attention and financial resources.
+Added: Our results of operations may be affected by risks associated with operating across different jurisdictions, including foreign currency exposure, changes in tax laws, and compliance with varying legal and regulatory requirements.
+Added: We are also subject to foreign currency exposure.
+Added: A significant portion of our operating costs is denominated in Canadian dollars.
+Added: While we use foreign currency hedging instruments to mitigate a portion of our exposure, these hedging arrangements may not fully offset the impact of unfavorable currency movements.
+Added: In particular, a sharp appreciation of the Canadian dollar relative to the U.S.
+Added: dollar, increases in the cost of renewing hedging instruments, or limitations on the availability or effectiveness of such hedges could increase our operating costs and adversely affect our results of operations.
+Added: Taxation risks:
+Added: We are subject to income taxes and other taxes in multiple jurisdictions, and our effective tax rate and tax liabilities may be affected by changes in tax laws, regulations, treaties, or interpretations thereof, including the adoption of new U.S.
+Added: or international tax legislation.
+Added: In addition, increased scrutiny by tax authorities or changes in enforcement practices could result in additional tax liabilities, penalties, or interest, which could adversely affect our business, financial condition, or results of operations.
+Added: In addition, operating internationally exposes us to challenges related to managing geographically dispersed operations, complying with foreign laws and regulations (including data protection and privacy requirements), protecting intellectual property, competing with international and local competitors, accessing sufficiently qualified labor pools, and integrating acquisitions in foreign markets.
+Added: Any of these factors could limit our ability to successfully execute our growth strategy and could have a material adverse effect on our business, financial condition, or results of operations.
Rising inflation and interest rates may adversely affect our businesses, financial condition, and operating results.
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Our Ting segment is also exposed to inflation through its Fiber Network build and installation costs, and sustained levels of inflation increase the costs of related materials and contracted labor.
−Removed: We continue to assess ways to reduce costs, however there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the adverse economic conditions, and other unknown developments.
+Added: We continue to assess ways to reduce costs, however there can be no assurance as to the effectiveness of our efforts to mitigate any impact of adverse economic conditions, and other unknown developments.
We have substantial debt obligations, including credit facilities and term notes.
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Macroeconomic, geopolitical, and market conditions may adversely affect our business, financial condition, and operating results.
−Removed: Our financial performance is directly and indirectly impacted by global and regional economic conditions, which in turn are influenced by financial market volatility, inflation, interest rates, tariffs, trade disputes, credit availability, and overall consumer and business confidence.
+Added: There is inherent risk, based on the complex relationships among the U.S.
+Added: and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations.
+Added: Our financial performance is directly and indirectly impacted by global and regional economic conditions, which in turn are influenced by financial market volatility, inflation, fluctuating interest rates, tariffs, sanctions, trade disputes, barriers and restrictions, credit availability, and overall consumer and business confidence.
+Added: The current international trade and regulatory environment is subject to significant ongoing uncertainty.
+Added: Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns.
+Added: The ultimate impact of current or future tariffs and trade restrictions remains uncertain.
Economic uncertainty may result in reduced business investment, delayed spending decisions, or cost-cutting measures by customers, which could negatively impact demand for our domain services, internet infrastructure, and platform offerings.
Additionally, weak economic conditions may lead to reduced public-sector spending and shifts in government policies that affect telecommunications infrastructure and internet governance.
−Removed: Political instability, trade restrictions, and geopolitical conflicts—including the war in Ukraine, ongoing tensions in the Middle East, and the potential expansion of these conflicts—may disrupt supply chains, increase regulatory uncertainty, or impact global financial markets, leading to fluctuations in currency exchange rates, interest rate volatility, and potential restrictions on international business operations.
+Added: Political instability, trade restrictions, and geopolitical conflicts - including the war in Ukraine, ongoing tensions in the Middle East, increasing tensions in Central and South America, including recent U.S.
+Added: military operations in Venezuela and Iran, and the potential expansion of these conflicts - may disrupt supply chains, increase regulatory uncertainty, or impact global financial markets, leading to fluctuations in currency exchange rates, interest rate volatility, and potential restrictions on international business operations.
In particular, changes in trade policies, tariffs, and taxation laws could affect our cost structure, cross-border transactions, and market access.
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The FCC grants wireless licenses that are subject to renewal and revocation.
−Removed: If our Network Operator’s license is not renewed or if compliance requirements change, it could disrupt our service offerings.
+Added: If our Network Operator’s license is not renewed or if compliance requirements change, it could disrupt our Ting Mobile service offerings.
Additionally, various state regulations on billing practices, privacy, and consumer protection could increase compliance costs and make it more difficult to implement national sales and marketing programs.
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The adoption of new regulations, reinterpretation of existing laws, or removal of legal protections for internet services could hinder market growth, increase costs, or disrupt our operations, potentially impacting our financial condition and results of operations.
−Removed: We may be subject to unforeseen liabilities or unenforceable customer agreements, which could negatively impact our financial results.
−Removed: Our Domain Services business operates globally under standard customer agreements that outline the terms of our services and include provisions intended to limit our liability.
−Removed: These agreements are typically executed electronically or deemed accepted through continued use of our services.
−Removed: While this approach aligns with industry practices, courts in certain jurisdictions could challenge the validity or enforceability of these agreements, potentially exposing us to increased legal liability and compliance costs.
−Removed: Although we maintain general liability insurance, coverage may be insufficient or disputed, and claims may exceed policy limits.
−Removed: Additionally, while we seek indemnifications from technology and content providers, we cannot guarantee their accuracy or adequacy.
−Removed: If we are required to pay claims that are uninsured, underinsured, or not covered by indemnification, our financial condition and operating results could be materially affected.
−Removed: We are exposed to risks related to online payment fraud, chargebacks, and evolving payment technologies.
−Removed: Across all our business segments, we are exposed to risks associated with credit card transactions, chargebacks, and online payment fraud, regardless of whether services operate on a postpaid or prepaid basis.
−Removed: A significant portion of our revenue comes from online credit card transactions, where we assume liability for fraudulent and disputed charges under industry rules.
−Removed: If chargeback rates exceed established thresholds, we may face higher processing fees, penalties, or restrictions from payment networks, which could impact our ability to accept credit card payments.
−Removed: Additionally, in our postpaid businesses, including Tucows Corporate – Mobile Services, Ting and Wavelo, our ability to manage credit risk while acquiring profitable customers is critical.
−Removed: These segments have relatively short operating histories, and we may be unable to accurately predict customer defaults, fraud risks, or collection challenges.
−Removed: Factors such as regulatory changes, competitive pricing strategies, or consumer behavior shifts may further impact our ability to mitigate credit risk and maintain profitability.
−Removed: If fraud rates rise or credit losses exceed expectations, we may need to implement costly fraud prevention measures, enhance credit risk models, or absorb financial losses, all of which could negatively impact our margins, operational efficiency, and overall financial performance.
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our operating results and financial condition .
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Changes in ICA NN policies, fees, and oversight may impact our domain registration business.
−Removed: ICANN oversees the domain name registration system and imposes fees on domain registrar.
−Removed: They operate as a private sector, not-for-profit entity but faces ongoing public, governmental, and industry scrutiny regarding its governance, policies, and decision-making processes.
+Added: ICANN oversees the domain name registration system and imposes fees on domain registrars.
+Added: They operate as a private sector, not-for-profit entity but face ongoing public, governmental, and industry scrutiny regarding their governance, policies, and decision-making processes.
Regulatory bodies, including the U.S.
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Legal or regulatory actions against ICANN, which could impact its authority and introduce uncertainty into the domain name system.
−Removed: International regulatory bodies, such as the ITU or the EU, gaining greater influence over domain governance, potentially leading to new taxation, privacy, or competition regulations.
+Added: International regulatory bodies, such as the International Telecommunication Union or the European Union, gaining greater influence over domain governance, potentially leading to new taxation, privacy, or competition regulations.
If any of these events occur, they could disrupt the stability of the domain registration market, increase our compliance costs, or reduce our ability to operate efficiently, negatively affecting our wholesale and retail domain businesses.
−Removed: RISKS RELATED TO CAPITAL MARKETS AND STOCK VOLATILITY
−Removed: Our share price may be volatile, and investors may be unable to sell shares at a favorable price.
−Removed: The market price of our common stock has fluctuated and may continue to experience significant volatility, regardless of our financial performance.
−Removed: Investors may be unable to resell their shares at a desired price due to market conditions, reduced trading volume, or negative sentiment toward our stock.
−Removed: Several factors may contribute to this volatility, including:
−Removed: Actual or anticipated variations in our quarterly financial results;
−Removed: Service disruptions or outages that impact customer trust and operational performance;
−Removed: Seasonal fluctuations in demand for our services and those of our customers;
−Removed: Announcements of new technologies or competitive services in our industry;
−Removed: Market perceptions of our business strategy, growth initiatives, and execution;
−Removed: Stock performance of companies in our sector, particularly those considered comparable to us;
−Removed: Analyst ratings, short-seller activity, or media coverage of our company;
−Removed: Macroeconomic trends affecting the technology and internet sectors.
−Removed: The stock market, particularly for internet, technology, and telecom companies, has experienced periods of significant volatility.
−Removed: Broader market trends, economic conditions, or shifts in investor sentiment toward our industry may further impact our stock price, trading volume, and overall market valuation.
+Added: RISKS RELATED TO CAPITAL MARKETS
We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term shareholder value.
On February 12, 2026, our Board of Directors approved a stock repurchase program authorizing the Company to buy back up to $40 million of its common stock in the open market.
−Removed: The program commenced on February 14, 2025, and is expected to terminate on February 13, 2026.
+Added: The program commenced on February 13, 2026, and is expected to terminate on or before February 12, 2027.
While the Company has previously repurchased shares under similar programs, we are under no obligation to repurchase shares under this program, nor are we obligated to complete purchases up to the full authorized amount.
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If we are unable to reduce our carbon footprint or comply with future environmental regulations, we could face reputational risks and higher operational costs.
−Removed: Investor and regulatory expectations for ESG (Environmental, Social, and Governance) transparency may require additional disclosures and compliance efforts.
−Removed: Institutional investors, regulatory agencies, and industry stakeholders are increasingly focused on ESG performance and corporate sustainability disclosures.
−Removed: We may be required to implement new reporting frameworks, publish ESG-related data, or enhance corporate governance structures to meet investor expectations and regulatory requirements in the U.S., the U.K., Canada, and Europe.
−Removed: In addition, stakeholder expectations are not uniform, and both opponents and proponents of various ESG-related matters have increasingly resulted in a range of activism to advocate for their positions, including Anti-ESG positions.
−Removed: We could also be criticized by ESG detractors for the scope or nature of our ESG policies and practices.
−Removed: Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could impact our access to capital markets, investor sentiment, and corporate reputation.
Our business and financial performance could be adversely impacted by climate change, environmental disruptions, and other unforeseen disasters or crises.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.