Exhibit | ||||||||
99.1 | ||||||||
99.2 | ||||||||
99.3 |
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99.4 |
||||||||
99.5 |
Sangoma Technologies Corporation | |||||||||||
Date: February 5, 2025 |
By: | /s/ Larry Stock | |||||||||
Name: Larry Stock | |||||||||||
Title: Chief Financial Officer |
Condensed consolidated interim statements of financial position |
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Condensed consolidated interim statements of loss and comprehensive loss |
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Condensed consolidated interim statements of changes in shareholders’ equity |
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Condensed consolidated interim statements of cash flows |
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Notes to the condensed consolidated interim financial statements |
Sangoma Technologies Corporation | ||
Condensed consolidated interim statements of financial position | ||
As at December 31, 2024, and June 30, 2024 | ||
(Unaudited in thousands of US dollars, except per share data) |
December 31, | June 30, | |||||||||||||
Note | 2024 | 2024 | ||||||||||||
$ | $ | |||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | 4 | 17,065 | 16,231 | |||||||||||
Trade and other receivables | 4 | 14,011 | 18,596 | |||||||||||
Inventories | 6 | 13,117 | 14,768 | |||||||||||
Sales tax receivable | 530 | 485 | ||||||||||||
Income tax receivable | 484 | 956 | ||||||||||||
Contract assets | 1,330 | 1,479 | ||||||||||||
Derivative assets | 15 | 385 | 727 | |||||||||||
Other current assets | 3,059 | 3,867 | ||||||||||||
49,981 | 57,109 | |||||||||||||
Non-current assets | ||||||||||||||
Property and equipment | 7 | 7,119 | 8,394 | |||||||||||
Right-of-use assets | 8 | 8,868 | 10,164 | |||||||||||
Intangible assets | 9 | 107,731 | 124,128 | |||||||||||
Development costs | 10 | 7,813 | 7,810 | |||||||||||
Deferred income tax assets | 2,043 | 2,334 | ||||||||||||
Goodwill | 12 | 187,502 | 187,502 | |||||||||||
Contract assets | 2,090 | 2,418 | ||||||||||||
Derivative assets | 15 | 166 | 320 | |||||||||||
Other non-current assets | 369 | 466 | ||||||||||||
373,682 | 400,645 | |||||||||||||
Liabilities | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable and accrued liabilities | 4 | 19,125 | 21,450 | |||||||||||
Provisions | 13 | 405 | 405 | |||||||||||
Sales tax payable | 5,264 | 5,955 | ||||||||||||
Income tax payable | 145 | 115 | ||||||||||||
Operating facility and loans | 15 | 22,775 | 19,875 | |||||||||||
Contract liabilities | 16 | 8,346 | 9,582 | |||||||||||
Lease obligations on right-of-use assets | 8 | 2,277 | 2,722 | |||||||||||
58,337 | 60,104 | |||||||||||||
Long term liabilities | ||||||||||||||
Operating facility and loans | 15 | 37,600 | 57,950 | |||||||||||
Contract liabilities | 16 | 2,838 | 3,072 | |||||||||||
Non-current lease obligations on right-of-use assets | 8 | 7,672 | 8,562 | |||||||||||
Deferred income tax liabilities | 7,653 | 9,895 | ||||||||||||
Other non-current liabilities | 2,275 | 1,332 | ||||||||||||
116,375 | 140,915 | |||||||||||||
Shareholders’ equity | ||||||||||||||
Share capital | 382,380 | 380,986 | ||||||||||||
Contributed surplus | 20,425 | 20,053 | ||||||||||||
Accumulated other comprehensive income | 228 | 626 | ||||||||||||
Accumulated deficit | (145,726) | (141,935) | ||||||||||||
257,307 | 259,730 | |||||||||||||
373,682 | 400,645 |
Approved by the Board | ||||||||
(Signed) | Al Guarino | Director | ||||||
(Signed) | Allan Brett | Director | ||||||
Sangoma Technologies Corporation | ||
Condensed consolidated interim statements of loss and comprehensive loss | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Three month periods ended | Six month periods ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
Note | 2024 | 2023 | 2024 | 2023 | |||||||||||||
$ | $ | $ | $ | ||||||||||||||
Revenue | 19 | 59,113 | 62,276 | 119,263 | 125,304 | ||||||||||||
Cost of sales | 18,625 | 18,290 | 37,594 | 37,290 | |||||||||||||
Gross profit | 40,488 | 43,986 | 81,669 | 88,014 | |||||||||||||
Expenses | |||||||||||||||||
Sales and marketing | 12,599 | 14,652 | 25,155 | 31,169 | |||||||||||||
Research and development | 10 | 10,323 | 10,005 | 21,665 | 19,320 | ||||||||||||
General and administration | 10,175 | 11,518 | 20,135 | 22,326 | |||||||||||||
Amortization of intangible assets | 9 | 8,199 | 8,362 | 16,397 | 16,723 | ||||||||||||
Interest expense (net) | 4,15 |
1,105 | 1,795 | 2,483 | 3,457 | ||||||||||||
Restructuring and business integration costs | 242 | 1,335 | 242 | 1,491 | |||||||||||||
Loss on change in fair value of consideration payable | 14 | — | 202 | — | 202 | ||||||||||||
Loss before income tax | (2,155) | (3,883) | (4,408) | (6,674) | |||||||||||||
Provision for income taxes | |||||||||||||||||
Current | 11 | 883 | 279 | 1,374 | 664 | ||||||||||||
Deferred | 11 | (1,157) | (923) | (1,991) | (1,655) | ||||||||||||
Net loss | (1,881) | (3,239) | (3,791) | (5,683) | |||||||||||||
Other comprehensive loss |
|||||||||||||||||
Items to be reclassified to net loss |
|||||||||||||||||
Loss in fair value of interest rate swaps, net of tax | 11,15 |
(74) | (481) | (398) | (574) | ||||||||||||
Comprehensive loss | (1,955) | (3,720) | (4,189) | (6,257) | |||||||||||||
Loss per share |
|||||||||||||||||
Basic and diluted | 17(iii) |
$ | (0.06) | $ | (0.10) | $ | (0.11) | $ | (0.17) | ||||||||
Weighted average number of shares outstanding | |||||||||||||||||
Basic and diluted | 17(iii) |
33,419,116 | 33,154,121 | 33,478,400 | 33,246,940 | ||||||||||||
Sangoma Technologies Corporation | ||
Condensed consolidated interim statements of changes in shareholders' equity | ||
For the six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Note | Number of common shares | Share capital | Contributed surplus | Accumulated other comprehensive earnings | Retained earnings (accumulated deficit) | Total shareholders' equity | |||||||||||||||||
# | $ | $ | $ | $ | $ | ||||||||||||||||||
Balance, July 1, 2023 | 33,038,367 | 379,924 | 18,132 | 1,335 | (133,276) | 266,115 | |||||||||||||||||
Net loss | — | — | — | — | (5,683) | (5,683) | |||||||||||||||||
Change in fair value of interest rate swaps, net of tax | 15 | — | — | — | (574) | — | (574) | ||||||||||||||||
Common shares issued for RSU exercised | 17(i),17(ii) |
287,208 | 991 | (991) | — | — | — | ||||||||||||||||
Share-based compensation expense | 17(ii) |
— | — | 1,518 | — | — | 1,518 | ||||||||||||||||
Balance, December 31, 2023 |
33,325,575 | 380,915 | 18,659 | 761 | (138,959) | 261,376 | |||||||||||||||||
Balance, July 1, 2024 |
33,340,159 | 380,986 | 20,053 | 626 | (141,935) | 259,730 | |||||||||||||||||
Net loss | — | — | — | — | (3,791) | (3,791) | |||||||||||||||||
Change in fair value of interest rate swaps, net of tax | 15 |
— | — | — | (398) | — | (398) | ||||||||||||||||
Common shares issued for RSU exercised | 17(i),17(ii) |
252,375 | 1,394 | (1,394) | — | — | — | ||||||||||||||||
Share-based compensation expense | 17(ii) |
— | — | 1,766 | — | — | 1,766 | ||||||||||||||||
Balance, December 31, 2024 |
33,592,534 | 382,380 | 20,425 | 228 | (145,726) | 257,307 |
Sangoma Technologies Corporation | ||
Condensed consolidated interim statements of cash flows | ||
For the six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Six month periods ended | |||||||||||
December 31, | |||||||||||
Note | 2024 | 2023 | |||||||||
Operating activities | $ | $ | |||||||||
Net loss | (3,791) | (5,683) | |||||||||
Adjustments for: | |||||||||||
Depreciation of property and equipment | 7 | 2,091 | 2,123 | ||||||||
Depreciation of right-of-use assets | 8 | 1,331 | 1,490 | ||||||||
Amortization of intangible assets | 9 | 16,397 | 16,723 | ||||||||
Amortization of development costs | 10 | 2,946 | 2,030 | ||||||||
Income tax expense (recovery) | 11 | (617) | (991) | ||||||||
Income tax (paid) | (422) | (199) | |||||||||
Share-based compensation expense | 17(ii) |
1,766 | 1,518 | ||||||||
Unrealized foreign exchange loss (gain) | 17 | (35) | |||||||||
Accretion expense | 8 |
161 | 210 | ||||||||
Loss on disposal of property and equipment | 7 | 131 | 237 | ||||||||
Loss on change in fair value of consideration payable | 14 | — | 202 | ||||||||
Changes in working capital | |||||||||||
Trade and other receivables | 4,585 | 1,817 | |||||||||
Inventories | 1,651 | 846 | |||||||||
Sales tax receivable | (45) | 137 | |||||||||
Contract assets | 477 | 375 | |||||||||
Other assets | 905 | 1,278 | |||||||||
Sales tax payable | (691) | (366) | |||||||||
Accounts payable and accrued liabilities | (2,325) | (4,417) | |||||||||
Provisions | — | 252 | |||||||||
Other non current liabilities | 943 | 747 | |||||||||
Contract liabilities | (1,470) | (1,257) | |||||||||
Net cash provided by operating activities | 24,040 | 17,037 | |||||||||
Investing activities | |||||||||||
Purchase of property and equipment | 7 | (947) | (1,634) | ||||||||
Development costs | 10 | (3,295) | (3,397) | ||||||||
Net cash flows used in investing activities | (4,242) | (5,031) | |||||||||
Financing activities | |||||||||||
Repayments of operating facility and loan | 15 | (17,450) | (8,850) | ||||||||
Repayment of lease obligations on right-of-use assets | 8 | (1,514) | (1,654) | ||||||||
Payment of consideration payable | 14 | — | (2,096) | ||||||||
Net cash flows used in financing activities | (18,964) | (12,600) | |||||||||
Increase (Decrease) in cash and cash equivalents | 834 | (594) | |||||||||
Cash and cash equivalents, beginning of the period |
16,231 | 11,156 | |||||||||
Cash and cash equivalents, end of the period |
17,065 | 10,562 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
December 31, | June 30, | |||||||
2024 | 2024 | |||||||
$ | $ | |||||||
Cash at bank and on hand | 17,065 | 16,231 |
Three month periods ended | Six month periods ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
Note | 2024 | 2023 | 2024 | 2023 | |||||||||||||
$ | $ | $ | $ | ||||||||||||||
Interest expense | 15 | 1,027 | 1,693 | 2,322 | 3,247 | ||||||||||||
Accretion expense | 8 |
78 | 102 | 161 | 210 | ||||||||||||
Interest expense (net) | 1,105 | 1,795 | 2,483 | 3,457 |
December 31, | June 30, | |||||||||||||
2024 | 2024 | |||||||||||||
$ | $ | |||||||||||||
Trade receivables | 14,011 | 16,025 | ||||||||||||
Receivable related to working capital adjustment | — | 2,571 | ||||||||||||
Trade and other receivables | 14,011 | 18,596 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
December 31, | June 30, | |||||||
2024 | 2024 | |||||||
$ | $ | |||||||
Trade receivables aging: | ||||||||
0-30 days | 11,550 | 12,229 | ||||||
31-90 days | 1,775 | 2,995 | ||||||
Greater than 90 days | 1,766 | 2,170 | ||||||
15,091 | 17,394 | |||||||
Expected credit loss provision | (1,080) | (1,369) | ||||||
Net trade receivables | 14,011 | 16,025 |
December 31, | June 30, | |||||||
2024 | 2024 | |||||||
$ | $ | |||||||
Expected credit loss provision: | ||||||||
Expected credit loss provision, beginning balance | (1,369) | (1,566) | ||||||
Net change in expected credit loss provision during the period |
289 | 197 | ||||||
Expected credit loss provision, ending balance | (1,080) | (1,369) |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
within 12 months | 13-24 months | 25-36 months | >36 months | Total | |||||||||||||
$ | $ | $ | $ | $ | |||||||||||||
Accounts payable and accrued liabilities | 19,125 | — | — | — | 19,125 | ||||||||||||
Sales tax payable | 5,264 | — | — | — | 5,264 | ||||||||||||
Operating facility and loans | 22,775 | 20,600 | 14,038 | 2,962 | 60,375 | ||||||||||||
Lease obligations on right of use assets | 2,537 | 1,861 | 1,463 | 5,087 | 10,948 | ||||||||||||
Other non-current liabilities | — | — | — | 2,275 | 2,275 | ||||||||||||
49,701 | 22,461 | 15,501 | 10,324 | 97,987 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
December 31, | June 30, | |||||||
2024 | 2024 | |||||||
$ | $ | |||||||
Finished goods | 9,215 | 10,740 | ||||||
Components and parts | 5,630 | 5,537 | ||||||
14,845 | 16,277 | |||||||
Provision for obsolescence | (1,728) | (1,509) | ||||||
Net inventory carrying value | 13,117 | 14,768 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Office furniture | Stockroom | |||||||||||||||||||
and computer | Software | and production | Tradeshow | Leasehold | ||||||||||||||||
equipment | equipment | equipment | improvements | Total | ||||||||||||||||
Cost | $ | $ | $ | $ | $ | $ | ||||||||||||||
Balance at July 1, 2023 |
5,366 | 458 | 12,867 | 47 | 450 | 19,188 | ||||||||||||||
Additions | 660 | 42 | 3,368 | — | 60 | 4,130 | ||||||||||||||
Disposals | (52) | — | (579) | — | — | (631) | ||||||||||||||
Balance at June 30, 2024 |
5,974 | 500 | 15,656 | 47 | 510 | 22,687 | ||||||||||||||
Additions | 251 | — | 696 | — | — | 947 | ||||||||||||||
Disposals | (3) | — | (368) | — | — | (371) | ||||||||||||||
Balance at December 31, 2024 |
6,222 | 500 | 15,984 | 47 | 510 | 23,263 | ||||||||||||||
Accumulated depreciation | ||||||||||||||||||||
Balance at July 1, 2023 |
3,364 | 434 | 5,906 | 47 | 285 | 10,036 | ||||||||||||||
Depreciation expense | 815 | 22 | 3,539 | — | 119 | 4,495 | ||||||||||||||
Disposals | — | — | (238) | — | — | (238) | ||||||||||||||
Balance at June 30, 2024 |
4,179 | 456 | 9,207 | 47 | 404 | 14,293 | ||||||||||||||
Depreciation expense | 370 | 11 | 1,689 | — | 21 | 2,091 | ||||||||||||||
Disposals | — | — | (240) | — | — | (240) | ||||||||||||||
Balance at December 31, 2024 |
4,549 | 467 | 10,656 | 47 | 425 | 16,144 | ||||||||||||||
Net book value as at: | ||||||||||||||||||||
Balance at June 30, 2024 |
1,795 | 44 | 6,449 | — | 106 | 8,394 | ||||||||||||||
Balance at December 31, 2024 |
1,673 | 33 | 5,328 | — | 85 | 7,119 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Right-of-use assets | |||||
$ | |||||
Present value of leases | |||||
Balance as at July 1, 2023 |
22,182 | ||||
Additions | 814 | ||||
Terminations | (3,239) | ||||
Balance at June 30, 2024 |
19,757 | ||||
Additions | 93 | ||||
Terminations | (601) | ||||
Balance at December 31, 2024 |
19,249 | ||||
Accumulated depreciation and repayments | |||||
Balance as at July 1, 2023 |
9,030 | ||||
Depreciation expense | 2,870 | ||||
Terminations | (2,307) | ||||
Balance at June 30, 2024 |
9,593 | ||||
Depreciation expense | 1,331 | ||||
Terminations | (543) | ||||
Balance at December 31, 2024 |
10,381 | ||||
Net book value as at: | |||||
June 30, 2024 | 10,164 | ||||
December 31, 2024 | 8,868 |
Lease obligations | |||||
$ | |||||
Present value of leases | |||||
Balance as at July 1, 2023 |
14,331 | ||||
Additions | 814 | ||||
Repayments | (3,163) | ||||
Accretion expense | 394 | ||||
Terminations | (1,086) | ||||
Effects of movements on exchange rates | (6) | ||||
Balance at June 30, 2024 |
11,284 | ||||
Additions | 93 | ||||
Repayments | (1,514) | ||||
Accretion expense | 161 | ||||
Terminations | (68) | ||||
Effects of movements on exchange rates | (7) | ||||
Balance at December 31, 2024 |
9,949 | ||||
Lease Obligations - Current | 2,277 | ||||
Lease Obligations - Non-current | 7,672 | ||||
9,949 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Other | |||||||||||||||||
Purchased | Customer | purchased | |||||||||||||||
technology | relationships | Brand | intangibles | Total | |||||||||||||
$ | $ | $ | $ | $ | |||||||||||||
Cost | |||||||||||||||||
Balance at July 1, 2023 |
110,123 | 126,456 | 6,787 | 2,748 | 246,114 | ||||||||||||
Balance at June 30, 2024 |
110,123 | 126,456 | 6,787 | 2,748 | 246,114 | ||||||||||||
Balance at December 31, 2024 |
110,123 | 126,456 | 6,787 | 2,748 | 246,114 | ||||||||||||
Accumulated amortization | |||||||||||||||||
Balance at July 1, 2023 |
41,576 | 40,821 | 3,586 | 2,694 | 88,677 | ||||||||||||
Amortization expense | 17,683 | 14,948 | 624 | 54 | 33,309 | ||||||||||||
Balance at June 30, 2024 |
59,259 | 55,769 | 4,210 | 2,748 | 121,986 | ||||||||||||
Amortization expense | 8,692 | 7,397 | 308 | — | 16,397 | ||||||||||||
Balance at December 31, 2024 |
67,951 | 63,166 | 4,518 | 2,748 | 138,383 | ||||||||||||
Net book value as at: | |||||||||||||||||
Balance at June 30, 2024 |
50,864 | 70,687 | 2,577 | — | 124,128 | ||||||||||||
Balance at December 31, 2024 |
42,172 | 63,290 | 2,269 | — | 107,731 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Cost | $ | ||||
Balance at July 1, 2023 |
12,051 | ||||
Additions | 6,782 | ||||
Cost fully amortized | (309) | ||||
Investment tax credits | (822) | ||||
Balance at June 30, 2024 |
17,702 | ||||
Additions | 3,295 | ||||
Investment tax credits | (346) | ||||
Balance at December 31, 2024 |
20,651 | ||||
Accumulated amortization | |||||
Balance at July 1, 2023 |
(5,482) | ||||
Amortization | (4,480) | ||||
Cost fully amortized | 70 | ||||
Balance at June 30, 2024 |
(9,892) | ||||
Amortization | (2,946) | ||||
Balance at December 31, 2024 |
(12,838) |
December 31, | June 30, | |||||||
2024 | 2024 | |||||||
$ | $ | |||||||
Net capitalized development costs | 7,813 | 7,810 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Three month periods ended | Six month periods ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
Statutory income tax rate | 25.76% | 25.62% | 25.76% | 25.62% | ||||||||||
$ | $ | $ | $ | |||||||||||
Loss before income tax | (2,155) | (3,883) | (4,408) | (6,674) | ||||||||||
Expected income tax recovery | (554) | (994) | (1,135) | (1,709) | ||||||||||
Difference in foreign tax rates | 4 | 5 | 4 | 13 | ||||||||||
Share based compensation | 268 | 219 | 455 | 389 | ||||||||||
Other non deductible expenses | (33) | (32) | (57) | (62) | ||||||||||
Changes in estimates | — | (193) | 1 | 1 | ||||||||||
Scientific Research and Experimental Development (SR&ED) | 23 | 18 | 43 | 44 | ||||||||||
Gain on consideration payable | — | 51 | — | 51 | ||||||||||
Changes in tax benefits not recognized | 18 | 282 | 72 | 282 | ||||||||||
Income tax recovery | (274) | (644) | (617) | (991) | ||||||||||
The Company’s income tax expense is allocated as follows: | $ | $ | $ | $ | ||||||||||
Current tax expense | 883 | 279 | 1,374 | 664 | ||||||||||
Deferred income tax recovery | (1,157) | (923) | (1,991) | (1,655) | ||||||||||
Income tax recovery | (274) | (644) | (617) | (991) |
$ | ||||||||
Balance at July 1, 2023 |
187,502 | |||||||
Balance at June 30, 2024 |
187,502 | |||||||
Balance at December 31, 2024 |
187,502 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
$ | |||||
Balance at July 1, 2023 |
237 | ||||
Additional provision recognized | 168 | ||||
Balance at June 30, 2024 |
405 | ||||
Balance at December 31, 2024 |
405 |
$ | |||||
Opening balance, July 1, 2023 |
1,894 | ||||
Payments | (2,096) | ||||
Remeasurement during the period | 202 | ||||
Ending balance, June 30, 2024 |
— | ||||
Ending balance, December 31, 2024 |
— | ||||
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
$ | |||||
Opening balance, July 1, 2023 |
14,551 | ||||
Revenue deferred during the period |
38,500 | ||||
Deferred revenue recognized as revenue during the period |
(40,397) | ||||
Ending balance, June 30, 2024 |
12,654 | ||||
Revenue deferred during the period |
19,253 | ||||
Deferred revenue recognized as revenue during the period |
(20,723) | ||||
Ending balance, December 31, 2024 |
11,184 | ||||
Contract liabilities - Current | 8,346 | ||||
Contract liabilities - Non-current | 2,838 | ||||
11,184 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Three month periods ended | Six month periods ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
# | # | # | # | |||||||||||
Shares issued and outstanding: | ||||||||||||||
Outstanding, beginning of the period |
33,537,684 | 33,184,200 | 33,340,159 | 33,038,367 | ||||||||||
Shares issued upon exercise of RSUs | 54,850 | 141,375 | 252,375 | 287,208 | ||||||||||
Outstanding, end of the period |
33,592,534 | 33,325,575 | 33,592,534 | 33,325,575 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Number | Weighted | |||||||
of options | average price | |||||||
# | $ | |||||||
Balance, July 1, 2023 |
723,051 | 13.58 | ||||||
Forfeited | (199,181) | (10.40) | ||||||
Balance, December 31, 2023 |
523,870 | 14.79 | ||||||
Balance, July 1, 2024 |
462,346 | 15.21 | ||||||
Expired | (3,534) | (12.51) | ||||||
Forfeited | (29,701) | (16.63) | ||||||
Balance, December 31, 2024 |
429,111 | 15.13 |
December 31, | December 31, | |||||||||||||||||||
2024 | 2023 | |||||||||||||||||||
Number of | Weighted | Number of | Weighted | |||||||||||||||||
Number of | stock options | average | Number of | stock options | average | |||||||||||||||
stock options | outstanding and | remaining | stock options | outstanding | remaining | |||||||||||||||
Exercise price | outstanding | exercisable | contractual life | outstanding | and exercisable | contractual life | ||||||||||||||
$7.01 - $9.00 |
103,831 | 70,231 | 2.50 | 146,627 | 65,129 | 3.50 | ||||||||||||||
$9.01 - $12.00 |
74,975 | 69,225 | 0.42 | 85,526 | 61,597 | 1.42 | ||||||||||||||
$12.01 - $15.00 |
43,878 | 30,767 | 2.25 | 45,000 | 19,695 | 3.25 | ||||||||||||||
$15.01 - $18.00 |
115,565 | 102,406 | 1.50 | 133,010 | 84,482 | 2.50 | ||||||||||||||
$18.01 - $20.00 |
22,856 | 18,604 | 1.50 | 22,856 | 12,876 | 2.50 | ||||||||||||||
$20.01 - $27.00 |
68,006 | 64,069 | 1.11 | 90,851 | 63,682 | 2.11 | ||||||||||||||
429,111 | 355,302 | 1.57 | 523,870 | 307,461 | 2.60 |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
DSU | PSU | RSU | Total | |||||||||||
Awards outstanding July 1, 2023 |
66,391 | 130,000 | 130,000 | 326,391 | ||||||||||
Awards granted during the period |
105,695 | 379,800 | 772,700 | 1,258,195 | ||||||||||
Awards exercised during the period |
— | — | (287,208) | (287,208) | ||||||||||
Awards forfeited during the period |
— | (42,500) | (26,251) | (68,751) | ||||||||||
Awards outstanding December 31, 2023 |
172,086 | 467,300 | 589,241 | 1,228,627 | ||||||||||
Awards outstanding July 1, 2024 |
172,086 | 499,800 | 607,157 | 1,279,043 | ||||||||||
Awards granted during the period |
64,356 | 271,000 | 271,000 | 606,356 | ||||||||||
Awards exercised during the period |
— | — | (252,375) | (252,375) | ||||||||||
Awards forfeited during the period |
— | (52,500) | (25,623) | (78,123) | ||||||||||
Awards outstanding December 31, 2024 |
236,442 | 718,300 | 600,159 | 1,554,901 |
Six month periods ended |
||||||||
December 31 | ||||||||
2024 | 2023 | |||||||
Share price | $6.68 |
$3.44 | ||||||
Expected volatility | 64.00% | 64.00% | ||||||
Time to expiry | 2.76 years |
2.57 years | ||||||
Risk-free interest rate | 3.42% | 4.40% |
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Three month periods ended | Six month periods ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
Number of shares: | ||||||||||||||
Weighted average number of shares outstanding | 33,419,116 | 33,154,121 | 33,478,400 | 33,246,940 | ||||||||||
Weighted average number of shares used in basic and diluted earnings per share | 33,419,116 | 33,154,121 | 33,478,400 | 33,246,940 | ||||||||||
Net loss | $ | (1,881) | $ | (3,239) | $ | (3,791) | $ | (5,683) | ||||||
Loss per share | ||||||||||||||
Basic and diluted loss per share | $ | (0.06) | $ | (0.10) | $ | (0.11) | $ | (0.17) | ||||||
Six month periods ended | ||||||||
December 31, | ||||||||
2024 | 2023 | |||||||
DSU | 236,442 | 172,086 | ||||||
PSU | 718,300 | 467,300 | ||||||
RSU | 600,159 | 589,241 | ||||||
Stock options | 429,111 | 523,870 | ||||||
1,984,012 | 1,752,497 | |||||||
Sangoma Technologies Corporation | ||
Notes to the condensed consolidated interim financial statements | ||
For the three and six month periods ended December 31, 2024 and 2023 | ||
(Unaudited in thousands of US dollars, except per share data) |
Three month periods ended | Six month periods ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
$ | $ | $ | $ | |||||||||||
Products | 10,306 | 11,573 | 20,763 | 23,445 | ||||||||||
Services | 48,807 | 50,703 | 98,500 | 101,859 | ||||||||||
Total revenues | 59,113 | 62,276 | 119,263 | 125,304 |
Three month periods ended | Six month periods ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||
$ | $ | $ | $ | |||||||||||
USA | 55,670 | 58,010 | 112,423 | 116,703 | ||||||||||
Others | 3,443 | 4,266 | 6,840 | 8,601 | ||||||||||
Total revenues | 59,113 | 62,276 | 119,263 | 125,304 |
December 31, | June 30, | |||||||
2024 | 2024 | |||||||
$ | $ | |||||||
USA | 318,719 | 338,079 | ||||||
Others | 4,982 | 5,457 | ||||||
Total non-current assets | 323,701 | 343,536 |
Three month periods ended
December 31,
|
Six month periods ended
December 31,
|
|||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Revenue | 59,113 | 62,276 | (3,163) | (5)% | 119,263 | 125,304 | (6,041) | (5)% | ||||||||||||||||||
Cost of sales | 18,625 | 18,290 | 335 | 2% | 37,594 | 37,290 | 304 | 1% | ||||||||||||||||||
Gross profit | 40,488 | 43,986 | (3,498) | (8)% | 81,669 | 88,014 | (6,345) | (7)% | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Sales and marketing | 12,599 | 14,652 | (2,053) | (14)% | 25,155 | 31,169 | (6,014) | (19)% | ||||||||||||||||||
Research and development | 10,323 | 10,005 | 318 | 3% | 21,665 | 19,320 | 2,345 | 12% | ||||||||||||||||||
General and administration | 10,175 | 11,518 | (1,343) | (12)% | 20,135 | 22,326 | (2,191) | (10)% | ||||||||||||||||||
Amortization of intangible assets | 8,199 | 8,362 | (163) | (2)% | 16,397 | 16,723 | (326) | (2)% | ||||||||||||||||||
Interest expense (net) | 1,105 | 1,795 | (690) | (38)% | 2,483 | 3,457 | (974) | (28)% | ||||||||||||||||||
Restructuring and business integration costs | 242 | 1,335 | (1,093) | (82)% | 242 | 1,491 | (1,249) | (84)% | ||||||||||||||||||
Loss on change in fair value of consideration payable | — | 202 | (202) | (100)% | — | 202 | (202) | (100)% | ||||||||||||||||||
Loss before income tax | (2,155) | (3,883) | 1,728 | (45)% | (4,408) | (6,674) | 2,266 | (34)% | ||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||
Current | 883 | 279 | 604 | 216% | 1,374 | 664 | 710 | 107% | ||||||||||||||||||
Deferred | (1,157) | (923) | (234) | 25% | (1,991) | (1,655) | (336) | 20% | ||||||||||||||||||
Net loss | (1,881) | (3,239) | 1,358 | (42)% | (3,791) | (5,683) | 1,892 | (33)% | ||||||||||||||||||
Other comprehensive loss |
||||||||||||||||||||||||||
Items to be reclassified to net loss |
||||||||||||||||||||||||||
Change in fair value of interest rate swaps, net of tax |
(74) | (481) | 407 | (85)% | (398) | (574) | 176 | (31)% | ||||||||||||||||||
Comprehensive loss | (1,955) | (3,720) | 1,765 | (47)% | (4,189) | (6,257) | 2,068 | (33)% | ||||||||||||||||||
Loss per share |
||||||||||||||||||||||||||
Basic and diluted | $ | (0.06) | $ | (0.10) | $ | 0.04 | (40)% | $ | (0.11) | $ | (0.17) | $ | 0.06 | (35)% | ||||||||||||
Weighted average shares outstanding (thousands) | ||||||||||||||||||||||||||
Basic and diluted | 33,419 | 33,154 | 265 | 1% | 33,478 | 33,247 | 231 | 1% | ||||||||||||||||||
Three month periods ended December 31, |
Six month periods ended December 31, |
|||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Service revenues | 48,807 | 50,703 | (1,896) | (4)% | 98,500 | 101,859 | (3,359) | (3)% | ||||||||||||||||||
Percent of total revenues | 83% | 81% | 2.00% | 2% | 83% | 81% | 2% | 2% | ||||||||||||||||||
Product revenues | 10,306 | 11,573 | (1,267) | (11)% | 20,763 | 23,445 | (2,682) | (11)% | ||||||||||||||||||
Percent of total revenues | 17% | 19% | (2.00)% | (11)% | 17% | 19% | (2)% | (11)% | ||||||||||||||||||
Total revenues | 59,113 | 62,276 | (3,163) | (5)% | 119,263 | 125,304 | (6,041) | (5)% |
Three month periods ended
December 31,
|
Six month periods ended
December 31,
|
|||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Cost of sales | 18,625 | 18,290 | 335 | 2% | 37,594 | 37,290 | 304 | 1% | ||||||||||||||||||
Gross profit | 40,488 | 43,986 | (3,498) | (8)% | 81,669 | 88,014 | (6,345) | (7)% | ||||||||||||||||||
Gross margin | 68% | 71% | (3)% | (4)% | 68% | 70% | (2)% | (3)% |
Three month periods ended
December 31,
|
Six month periods ended
December 31,
|
|||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Sales and marketing | 12,599 | 14,652 | (2,053) | (14)% | 25,155 | 31,169 | (6,014) | (19)% | ||||||||||||||||||
Research and development | 10,323 | 10,005 | 318 | 3% | 21,665 | 19,320 | 2,345 | 12% | ||||||||||||||||||
General and administration | 10,175 | 11,518 | (1,343) | (12)% | 20,135 | 22,326 | (2,191) | (10)% | ||||||||||||||||||
Amortization of intangible assets | 8,199 | 8,362 | (163) | (2)% | 16,397 | 16,723 | (326) | (2)% | ||||||||||||||||||
Three month periods ended
December 31,
|
Six month periods ended
December 31,
|
|||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Interest expense (net) | 1,105 | 1,795 | (690) | (38)% | 2,483 | 3,457 | (974) | (28)% | ||||||||||||||||||
Restructuring and business integration costs | 242 | 1,335 | (1,093) | (82)% | 242 | 1,491 | (1,249) | (84)% | ||||||||||||||||||
Three month periods ended
December 31,
|
Six month periods ended
December 31,
|
|||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Net loss | (1,881) | (3,239) | 1,358 | (42)% | (3,791) | (5,683) | 1,892 | (33)% | ||||||||||||||||||
Tax expense (recovery) | (274) | (644) | 370 | (57)% | (617) | (991) | 374 | (38)% | ||||||||||||||||||
Interest expense (net) | 1,105 | 1,795 | (690) | (38)% | 2,483 | 3,457 | (974) | (28)% | ||||||||||||||||||
Share-based compensation | 1,038 | 856 | 182 | 21% | 1,766 | 1,518 | 248 | 16% | ||||||||||||||||||
Depreciation of property and equipment | 1,006 | 1,050 | (44) | (4)% | 2,091 | 2,123 | (32) | (2)% | ||||||||||||||||||
Depreciation of right-of-use assets | 653 | 731 | (78) | (11)% | 1,331 | 1,490 | (159) | (11)% | ||||||||||||||||||
Amortization of intangibles | 8,199 | 8,362 | (163) | (2)% | 16,397 | 16,723 | (326) | (2)% | ||||||||||||||||||
Restructuring and business integration costs | 242 | 1,335 | (1,093) | (82)% | 242 | 1,491 | (1,249) | (84)% | ||||||||||||||||||
Loss on change in fair value of consideration payable | — | 202 | (202) | (100)% | — | 202 | (202) | (100)% | ||||||||||||||||||
Adjusted EBITDA | 10,088 | 10,448 | (360) | (3)% | 19,902 | 20,330 | (428) | (2)% | ||||||||||||||||||
Percentage of revenue | 17% | 17% | 0.29% | 2% | 17% | 16% | 1% | 6% |
Third | Fourth | First | Second | Third | Fourth | First | Second | |||||||||||||||||||
quarter | quarter | quarter | quarter | quarter | quarter | quarter | quarter | |||||||||||||||||||
2023 | 2023 | 2024 | 2024 | 2024 | 2024 | 2025 | 2025 | |||||||||||||||||||
Revenue | $ | 62,764 | $ | 63,680 | $ | 63,028 | $ | 62,276 | $ | 61,046 | $ | 60,934 | $ | 60,150 | $ | 59,113 | ||||||||||
Gross Profit | $ | 44,424 | $ | 42,241 | $ | 44,028 | $ | 43,986 | $ | 43,000 | $ | 41,807 | $ | 41,181 | $ | 40,488 | ||||||||||
Operating Expenses1 |
$ | 43,368 | $ | 43,708 | $ | 45,001 | $ | 44,537 | $ | 42,745 | $ | 41,600 | $ | 42,056 | $ | 41,296 | ||||||||||
Net loss | $ | (685) | $ | (23,630) | $ | (2,444) | $ | (3,239) | $ | (1,268) | $ | (1,708) | $ | (1,910) | $ | (1,881) | ||||||||||
Net loss per share | ||||||||||||||||||||||||||
Basic and diluted basis | $ | (0.02) | $ | (0.72) | $ | (0.07) | $ | (0.10) | $ | (0.04) | $ | (0.05) | $ | (0.06) | $ | (0.06) | ||||||||||
Adjusted EBITDA | $ | 12,243 | $ | 10,860 | $ | 9,882 | $ | 10,448 | $ | 11,155 | $ | 11,110 | $ | 9,814 | $ | 10,088 | ||||||||||
AEBITDA % Revenue | 19.51 | % | 17.05 | % | 15.68 | % | 16.78 | % | 18.27 | % | 18.23 | % | 16.32 | % | 17.07 | % | ||||||||||
change % | (2.45) | % | (1.38) | % | 1.10 | % | 1.50 | % | (0.04) | % | (1.92) | % | 0.75 | % |
$ | |||||
Opening balance, July 1, 2023 |
14,551 | ||||
Revenue deferred during the period |
38,500 | ||||
Deferred revenue recognized as revenue during the period |
(40,397) | ||||
Ending balance, June 30, 2024 |
12,654 | ||||
Revenue deferred during the period |
19,253 | ||||
Deferred revenue recognized as revenue during the period |
(20,723) | ||||
Ending balance, December 31, 2024 |
11,184 | ||||
Contract liabilities - Current | 8,346 | ||||
Contract liabilities - Non-current | 2,838 | ||||
11,184 |
within 12 months | 13-24 months | 25-36 months | >37 months | Total | |||||||||||||
$ | $ | $ | $ | $ | |||||||||||||
Accounts payable and accrued liabilities | 19,125 | — | — | — | 19,125 | ||||||||||||
Sales tax payable | 5,264 | — | — | — | 5,264 | ||||||||||||
Operating facility and loans | 22,775 | 20,600 | 14,038 | 2,962 | 60,375 | ||||||||||||
Lease obligations on right of use assets | 2,537 | 1,861 | 1,463 | 5,087 | 10,948 | ||||||||||||
Other non-current liabilities | — | — | — | 2,275 | 2,275 | ||||||||||||
49,701 | 22,461 | 15,501 | 10,324 | 97,987 |
Unaudited in US $000 | Three month periods ended December 31, |
Six month periods ended December 31, |
||||||||||||||||||||||||
2024 | 2023 | Change | Change | 2024 | 2023 | Change | Change | |||||||||||||||||||
$ | $ | $ | % | $ | $ | $ | % | |||||||||||||||||||
Net loss | (1,881) | (3,239) | 1,358 | (41.9)% | (3,791) | (5,683) | 1,892 | (33.3)% | ||||||||||||||||||
Tax expense (recovery) | (274) | (644) | 370 | (57.5)% | (617) | (991) | 374 | (37.7)% | ||||||||||||||||||
Interest expense (net) | 1,105 | 1,795 | (690) | (38.4)% | 2,483 | 3,457 | (974) | (28.2)% | ||||||||||||||||||
Share-based compensation | 1,038 | 856 | 182 | 21.3% | 1,766 | 1,518 | 248 | 16.3% | ||||||||||||||||||
Depreciation of property and equipment | 1,006 | 1,050 | (44) | (4.2)% | 2,091 | 2,123 | (32) | (1.5)% | ||||||||||||||||||
Depreciation of right-of-use assets | 653 | 731 | (78) | (10.7)% | 1,331 | 1,490 | (159) | (10.7)% | ||||||||||||||||||
Amortization of intangibles | 8,199 | 8,362 | (163) | (1.9)% | 16,397 | 16,723 | (326) | (1.9)% | ||||||||||||||||||
Restructuring and business integration costs | 242 | 1,335 | (1,093) | (81.9)% | 242 | 1,491 | (1,249) | (83.8)% | ||||||||||||||||||
Loss on change in fair value of consideration payable | — | 202 | (202) | (100.0)% | — | 202 | (202) | (100.0)% | ||||||||||||||||||
Adjusted EBITDA | 10,088 | 10,448 | (360) | (3.4)% | 19,902 | 20,330 | (428) | (2.1)% | ||||||||||||||||||
Percentage of revenue | 17.1% | 16.8% | 0.3% | 1.7% | 16.7% | 16.2% | 1.0% | 6.2% |
/s/ Larry Stock | ||
Chief Financial Officer |