Tucows 2015 Annual Report Download - page 214

16. Commitments and contingencies:
(a) The Company has several non-cancelable lease and purchase obligations primarily for general office
facilities, service contracts for mobile telephone services and equipment that expire over the next ten years. Future
minimum payments under these agreements are as follows:
Contractual Obligations for the year ending
December 31,
Contractual
Lease
Obligations
Purchase
Obligations
Total
Obligations
2016 $ 973,000 $ 9,279,000 $ 10,252,000
2017 989,000 12,713,000 13,702,000
2018 1,020,000 443,000 1,463,000
2019 1,003,000 — 1,003,000
2020 991,000 — 991,000
Thereafter 1,188,000 — 1,188,000
$ 6,164,000 $ 22,435,000 $ 28,599,000
Rental expense under operating lease agreements was $1.0 million, $0.9 million and $0.8 million for the years
ended December 31, 2015 2014 and 2013, respectively.
(b) On February 9, 2015 Ting Fiber, Inc.(“TING”) entered into a lease and network operation agreement
with the City of Westminster, Maryland (the ”City”) relating to the deployment of a new fiber network throughout the
Westminster area (“WFN”).
Under the agreement, the City will finance, construct, and maintain the WFN which will be leased to TING for a
period of ten years. The network will be constructed in phases, the scope and timing of which shall be determined by the
City, in cooperation with TING.
Under the terms of the agreement, TING may be required to advance funds to the City in the event of a quarterly
shortfall between the City’s revenue from leasing the network to TING and the City’s debt service requirements relating to
financing of the network. TING is responsible for shortfalls between $50,000 and $150,000 per quarter. As at December
31, 2015 financing for the construction of the WFN has not yet been arranged and an estimate cannot be made of the
maximum potential amount of future payments under the agreement.
(c) In the normal course of its operations, the Company becomes involved in various legal claims and
lawsuits. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions
outstanding or pending as of December 31, 2015 cannot be predicted with certainty, it is the opinion of management that
their resolution will not have a material adverse effect on the Company’s financial position.
17. Subsequent events:
On February 9, 2016, the Company announced that its Board of Directors has approved a stock buyback program
to repurchase up to $40 million of its common stock in the open market. Purchases will be made exclusively through the
facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 10, 2016 and will
terminate on or before February 9, 2017.
All shares purchased by Tucows under the stock buyback program will be retired and returned to treasury.
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