August 29, 2024 – Vancouver, Canada – Turnium Technology Group Inc. (TSX.V: TTGI) (FSE: E48) (“Turnium” or “the Company”), an industry leader in cloud-native software-defined wide area networking solutions (SD-WAN), is pleased to announce its financial results for Fiscal Q3 2024. All financial information is provided in Canadian dollars unless otherwise indicated.
The Consolidated Financial Statements and Management Discussion and Analysis (“MD&A”) for the second quarter ended June 30, 2024, are available on the Company’s SEDAR profile at www.sedar.com.
Ralph Garcea, Chair of Turnium commentated. “With the closing of the Claratti acquisition, we have embarked on our next phase of growth. We have effectively doubled in size, and with Doug’s leadership we believe we can continue growing as we expand our product portfolio and partner channel globally.”
Doug Childress, CEO of Turnium stated, “In the third quarter of fiscal 2023, the Turnium team maintained a sharp focus on expense management, cost optimization, and strategic growth. We are thrilled to announce the acquisition of Claratti, which significantly strengthens our global customer base. This acquisition enables us to expand our reach, offering new, bundled products and services to a broader audience and across new geographies. To echo the Chair, our business has effectively doubled in size, we are technically even more advanced and we see substantial cross-selling opportunities ahead. We are confident in our abilities and believe we can generate $11-$14 million in revenue for fiscal 2025.”
Fiscal Third Quarter 2024 Highlights:
- Revenue in the third quarter was $1.35 million, compared to $1.47 million in the third quarter of 2023;
- Gross Margin in the third quarter was $0.84 million, compared to $0.90 million in the third quarter of 2023;
- Total Expenses in the third quarter decreased to $1.36 million, compared to $1.51 million in the third quarter of 2023;
- Net Loss in the third quarter was ($0.37) million, compared to ($0.74) million in the third quarter of 2023;
- Adjusted EBITDA(1) in the third quarter was ($0.20) million, compared to ($0.30) million in the third quarter of 2023;
- Number of Common Shares Outstanding (basic) at the end of the third quarter 2024 was 107,968,303.
Fiscal Quarter Financial Highlights:
The Company’s key financial results for the three months ended June 30, 2024, are as follows:
| Canadian Dollars |
Q3 F2024 - For the three months ended June 30, 2024 |
Q2 F2024 - For the three months ended March 31, 2024 |
Q1 F2024 - For the three months ended December 31, 2023 |
Q4 F2023 - For the three months ended September 30, 2023 |
|---|---|---|---|---|
| Total revenue | 1,357,317 | 1,367,623 | 1,284,210 | 1,257,622 |
| Gross margin | 849,670 | 990,252 | 890,182 | 871,459 |
| Total Expenses | 1,363,395 | 1,365,759 | 1,495,940 | 2,217,763 |
| Net comprehensive income (loss) | (378,989) | (403,245) | (624,842) | (1,662,592) |
| Weighted average number of common shares outstanding | 107,968,303 | 104,605,243 | 104,605,243 | 90,370,451 |
| Basic and diluted loss per common share | (0.00) | (0.00) | (0.01) | (0.02) |
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 Third Quarter:
August 22, 2024 — Turnium announces closing of the acquisition of Claratti Pty Ltd (formerly, Claratti Limited) and also announces completion of its concurrent upsized non-brokered private placement of 11,139,303 units at a price of CAD $0.07 per unit for aggregate proceeds of approximately CAD$780,000. Number of Common Shares Outstanding (basic) following the Claratti acquisition and closing of the concurrent financing is 163,962,446. (LINK)
Effective the closing date of the acquisition, Derek Spratt and Peter Smyrniotis resigned as directors of the board, and Doug Childress and Craig Pentland were appointed to the board. “On behalf of the board, I would like to thank Derek and Peter for the energy, guidance and contributions they have made since we went public,” said Ralph Garcea, Chairman of the Board.
Highlights During the Fiscal Third Quarter:
June 24, 2024 — Turnium announces agreement with I Made It Inc. to provide business consulting and public relations services to the Company. (LINK)
June 10, 2024 — Turnium announces partnership with Mumbai-based 247 Networks Pvt. Ltd. to boost their business in India. First two wins include a 15,000-agent contact center and a 100-site warehouse network. (LINK)
May 30, 2024 — Turnium announces it has entered into a definitive share purchase agreement with Claratti Limited (which will convert to Claratti Pty Ltd on 28 June 2024) ACN 642 169 337 (“Claratti”) and each of the securityholders of Claratti in connection with the proposed acquisition of 100% of the issued and outstanding ordinary shares in the capital of Claratti, which will result in Claratti becoming a wholly-owned subsidiary of Turnium. (LINK)
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 (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 nine months ended June 30, 2024 and 2023:
| Canadian Dollars | 9 Months ended June 30, 2024 | 9 months ended June 30, 2023 | 3 Months ended June 30, 2024 | 3 months ended June 30, 2023 |
|---|---|---|---|---|
| Loss before tax | (1,407,076) | (2,346,018) | (378,989) | (745,223) |
| Amortization | 42,865 | 46,288 | 14,288 | 15,648 |
| Amortization of right-of-use assets | 119,957 | 109,425 | 38,133 | 36,474 |
| Share-based compensation | 622,744 | 770,737 | 145,881 | 245,539 |
| Gain/Loss on change in FV of derivative | (5,676) | (223,974) | (8) | 66,065 |
| Loss on debt settlement | (128,371) | - | (155,376) | - |
| Government Grant | (32,056) | - | - | - |
| Foreign exchange gain (loss) | (57,028) | (69,768) | (23,162) | (17,528) |
| Interest and accretion expense | 135,217 | 326,906 | 43,810 | 100,870 |
| SRED refund | - | (152,575) | - | - |
| M&A related one-time transaction costs | 223,410 | - | 114,454 | - |
| Adjusted EBITDA | (486,014) | (1,538,979) | (200,969) | (298,155) |
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.ttgi.io 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. Some of these risks are described under the “Caution on Forward-Looking Information” section and “Risk Factors” section of the MD&A. 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. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.