Tucows 2015 Annual Report Download - page 91

Year ended December 31,
2015 2014
Technical operations and development $ 4,502,845 $ 4,305,715
Increase over prior period $ 197,130
Increase - percentage 5%
Percentage of net revenues 3% 3%
Technical operations and development expenses for Fiscal 2015 increased by $0.2 million, or 5%, to $4.5 million
when compared to Fiscal 2014. This increase resulted primarily from our exceeding our adjusted EBITDA target set for
Fiscal 2015 under our overachievement bonus program and accruing a provision of $0.1 million due to this higher
performance attainment.
We expect technical operations and development expenses for Fiscal 2016, in absolute dollars, to increase slightly
when compared to Fiscal 2015.
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation and related costs for managerial and
administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general
corporate expenses.
Year ended December 31,
2015 2014
General and administrative $ 10,661,949 $ 9,459,008
Increase over prior period $ 1,202,941
Increase - percentage 13%
Percentage of net revenues 6% 6%
General and administrative expenses for Fiscal 2015 increased by $1.2 million, or 13%, to $10.7 million as
compared to Fiscal 2014. This increase was primarily the result of $0.8 million in increased credit card processing fees and
bad debts, largely related to the growth in network access services, increased workforce costs of $0.7 million, primarily the
result of our exceeding our adjusted EBITDA target set for Fiscal 2015 under our overachievement bonus program and
accruing a provision of $0.6 million due to this higher performance attainment and $0.4 million in increased public listing
costs, supply and facility expenses as compared to Fiscal 2014. These increases were partially offset by a decrease of $0.8
million in professional fees and stock based compensation. The decrease in professional fees resulted largely from
additional SOX compliance work that we undertook for the first time in Fiscal 2014 as well as pre-acquisition due
diligence and other costs of $0.2 million that related to a potential acquisition during Fiscal 2014 that was abandoned once
we determined that its completion was not probable. The decrease in stock based compensation expense of $0.1 million
was primarily as a result of our decision to implement a minimum vesting requirement to formulaic option grants to our
non-employee directors under our 2006 Equity Compensation Plan. In addition, during Fiscal 2015, we realized a gain on
foreign exchange of $3.0 million compared to a gain of $1.3 million during Fiscal 2014. These gains in turn were offset by
our incurring a loss on foreign exchange revaluation of our foreign denominated assets and liabilities of $3.3 million
during Fiscal 2015 compared to a loss of $1.6 million during Fiscal 2014.
We expect general and administrative expenses for Fiscal 2016, in absolute dollars, to increase when compared to
Fiscal 2015 largely to support the growth of our business.
DEPRECIATION OF PROPERTY AND EQUIPMENT
Property and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets.
Year ended December 31,
2015 2014
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