Turnium well positioned to achieve cashflow positive goal in fiscal 2024
May 29, 2024 – Vancouver, Canada – Turnium Technology Group Inc. (TSX.V: TTGI) (FSE: E48) (“Turnium” or “the Company”), an industry leader in cloud native SD-WAN, focused on improving application performance for enterprises with safe and secure multi-site connectivity without the burden of expensive dedicated bandwidth and hardware, announces its financial results for Fiscal Q2 2024. All financial information is provided in Canadian dollars unless otherwise indicated.
Ralph Garcea, Chairman of Turnium commented, “I am pleased to report that Turnium is well positioned to meet its goal of being cashflow positive in fiscal 2024. We continue to expand our business organically by adding new global channel partners and increasing our monthly recurring revenue (MRR). Complementing our organic growth efforts with accretive acquisitions has also taken a high priority; and we continue to progress in our efforts on the M&A front, especially with respect to our anticipated entry into a Definitive Agreement with respect to the acquisition of Claratti Limited. In addition, the Turnium team negotiated and settled numerous shares-for-debt transactions, preserving capital and more importantly cleaning up our balance sheet of legacy account payables.”
The Consolidated Financial Statements and Management Discussion and Analysis (“MD&A”) for the second fiscal quarter ended March 31, 2024, are available on the Company’s SEDAR profile at www.sedar.com.
Fiscal Second Quarter 2024 Highlights:
- Revenue increased to $1.37M, up 7.0% compared to $1.28M QoQ and up 15.1% compared to $1.19M YoY;
- Gross Margin increased to $0.99M, compared to $0.89M QoQ and $0.88M YoY;
- Total Expenses decreased to $1.37M, compared to $1.50M QoQ and $2.08M YoY;
- Net Loss decreased to ($0.40M), compared to ($0.62M) QoQ and ($1.20M) YoY;
- Adjusted EBITDA(1) decreased to ($0.04M), compared to ($0.35M) QoQ and ($0.98M) YoY;
- Number of Common Shares Outstanding (basic) at the end of the second quarter 2024 were 104,605,243. Current shares outstanding, as of May 29, 2024 are 112,823,143.
Fiscal Quarter Financial Highlights:
The Company’s key financial results for the three months ended March 31, 2024, are as follows:
| Canadian Dollars |
Q2 F2024 - For the three months ended March 31, 2023 |
Q1 F2024 - For the three months ended December 31, 2023 |
Q4 F2023 - For the three months ended September 30, 2023 |
Q3 F2023 - For the three months ended June 30, 2023 |
|---|---|---|---|---|
| Total revenue | 1,367,623 | 1,284,210 | 1,257,622 | 1,476,342 |
| Gross margin | 990,252 | 890,182 | 873,459 | 916,845 |
| Total Expenses | 1,365,759 | 1,495,940 | 2,217,763 | 1,512,661 |
| Net comprehensive income (loss) | (403,245) | (624,842) | (1,662,592) | (745,223) |
| Weighted average number of common shares outstanding | 104,605,243 | 104,605,243 | 90,370,451 | 68,935,614 |
| Basic and diluted loss per common share | (0.00) | (0.01) | (0.02) | (0.01) |
Special Notes:
It is anticipated that revenues and expenses may vary, perhaps materially, from quarter to quarter due to several factors, including changes in product mix, costs related to planned increase in market share, global expansion costs and ongoing corporate development initiatives. Although revenues may fluctuate from quarter to quarter, and such fluctuations may be material, management expects that revenues will increase year over year.
There are no known trends or seasonal impacts on the Company’s business although seasonal trends may develop as the Company grows.
Subsequent Highlights to the Fiscal Second Quarter:
May 17, 2024 — Turnium completes shares for debt transaction, settling outstanding debt to Manning Elliott LLP, by issuing 2,982,190 common shares at a deemed price of C$0.079 per Common Share. The Common Shares to be issued pursuant to the Shares-for-Debt Transaction are subject to a hold period of four (4) months and one (1) day from the date of issuance. (LINK)
May 08, 2024 — Turnium provides update regarding shares for debt transaction, announcing further to its news release dated March 6, 2024, the Company has amended its previously announced shares for debt transaction such that the Company will settle outstanding debt in the amounts of approximately C$345,500.00 (vs. C$600,000 previously announced) owing to certain directors and arm’s-length creditors of the Company, by issuing up to 4,935,710 common shares in the capital of the Company (vs. 8,567,857 shares previously announced) at a deemed price of C$0.07 per Common Share, to the creditors. The Board of Directors has determined that it is in the best interests of the Company to settle the outstanding Debt by the issuance of Common Shares in order to preserve the Company’s cash for ongoing operations. (LINK)
(1) Non-IFRS Financial Measures – Adjusted EBITDA
This MD&A references adjusted EBITDA, which is a non-IFRS financial measure. Adjusted EBITDA is not a recognized measure under IFRS, has no standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to adjusted EBITDA presented by other companies. Rather, it is provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, adjusted EBITDA should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
We use non-IFRS financial measures to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors, and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. There are certain limitations related to the use of non-IFRS financial measures versus their nearest IFRS equivalents. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on any non-IFRS financial measure and view it in conjunction with the most comparable IFRS financial measures. In evaluating non-IFRS financial measures, you should be aware that in the future we will continue to incur expenses similar to those adjusted in non-IFRS financial measures.
Adjusted EBITDA is a non-IFRS financial measure that we calculate as net income (loss) before tax excluding depreciation and amortization expense, share based expense, gain/loss on change on fair value of derivatives, loss on debt settlement, government grants, foreign exchange gain/loss, interest and accretion and SRED refund. Adjusted EBITDA is used by management to understand and evaluate the performance and trends of the Company’s operations. The following table shows a reconciliation of adjusted EBITDA to net income (loss) before tax, the most comparable IFRS financial measure, for the three and six months ended March 31, 2024 and 2023:
| Canadian Dollars | 6 Months ended March 31, 2024 | 6 Months ended March 31, 2023 | 3 Months ended March 31, 2024 | 3 Months ended March 31, 2023 |
|---|---|---|---|---|
| Loss before tax | (1,028,087) | (1,600,795) | (403,245) | (1,201,843) |
| Amortization | 28,578 | 30,640 | 14,288 | 14,264 |
| Amortization of right-of-use assets | 81,824 | 72,951 | 37,686 | 36,475 |
| Share-based compensation | 476,863 | 525,198 | 281,333 | 173,813 |
| Gain/Loss on change in FV of derivative | (5,668) | (290,039) | (73) | (82,615) |
| Loss on debt settlement | 27,005 | - | - | - |
| Government Grant | (32,056) | - | - | - |
| Foreign exchange gain (loss) | (33,867) | (52,240) | (18,605) | (25,399) |
| Interest and accretion expense | 91,407 | 226,036 | 46,418 | 107,072 |
| SRED refund | - | (152,575) | - | - |
| Adjusted EBITDA | (394,002) | (1,240,824) | (42,198) | (978,233) |
About Turnium Technology Group, Inc.
We make internet connections more secure and reliable for businesses. Our proprietary software-defined wide area networking (SD-WAN) platform is used to deliver highly reliable and secure connections using standard internet, wireless, or low-earth orbit satellite services for maintaining uninterrupted internet connectivity. Compared to other options, our SD-WAN solution is easier to manage, more flexible and faster to deploy, and more cost-effective than virtual private network (VPN) solutions or the services offered by traditional telecommunication carriers.
Turnium delivers its SD-WAN solution as a white label, disaggregated software platform that OEM channel partners host, manage, brand, and price. Turnium is also available to Resellers as a Turnium-branded managed service. Turnium SD-WAN is sold through a channel partner program designed for Communications Service Providers, Internet and Managed Service Providers, System Integrators, and Value-Added Resellers.
For more information, contact sales@ttgi.io, visit www.turnium.com, or follow us on Twitter @turnium.
About SD-WAN
SD-WAN is revolutionizing the networking and telecommunications industry by abstracting secure, high-speed networking and network control from underlying physical circuits. SD-WAN frees enterprises, small and medium businesses, cloud and managed services providers from the business and cost constraints imposed by traditional telecommunications companies.
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Turnium Contact:
Investor Relations: Bill Mitoulas, email: investor.relations@ttgi.io, telephone: +1 416-479-9547
Media inquiries, please email media@ttgi.io
Sales inquiries, please email sales@ttgi.io
CAUTIONARY NOTES
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain acts, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, as the case may be, to be materially different from those expressed or implied by such forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the Company may terminate and not proceed with the Agreement, or that the Agreement and associated transactions will not be successfully completed for any reason (including failure to obtain the required acceptance from the TSX Venture Exchange). The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.