Trilogy International Partners Inc. Reports Second Quarter 2023 Results

BELLEVUE, WA / ACCESSWIRE / August 10, 2023 / Trilogy International Partners Inc. ("TIP Inc." or the "Company") (TSXV:TRL.H), today announced its financial and operating results for the second quarter of 2023.

Second Quarter 2023 Highlights

• Received approximately $22 million New Zealand dollars ("NZD") from the escrow established in connection with the sale of our New Zealand subsidiary in May 2022.
• Cash and cash equivalents totaled $30.3 million as of June 30, 2023.
• Subsequent to June 30, 2023, the Company completed the second distribution to shareholders in a total of $27.5 million Canadian dollars ("C$"), equivalent to approximately $21 million.
• Following the distribution, the Company had a remaining cash balance of approximately $9 million as of July 31, 2023.
• Corporate operating costs were approximately $1.4 million in the second quarter of 2023, which represented a decrease of 59% compared to $3.5 million (excluding $10.0 million of nonrecurring costs) in the second quarter of 2022.
• The Company expects corporate costs to continue to decline in the second half of 2023, as the Company manages reporting costs through May 2028, when the indemnification period related to the sale of the New Zealand subsidiary ends.

About Trilogy International Partners Inc.

TIP Inc. formerly owned wireless and fixed broadband telecommunications subsidiaries in New Zealand and Bolivia.

In December 2021, a subsidiary of the Company entered into a Purchase Agreement to sell its 73.2% indirect equity interest in its New Zealand subsidiary, Two Degrees Mobile Limited, to Voyage Digital (NZ) Limited ("Voyage Digital") at an implied enterprise value of $1.7 billion NZD, inclusive of lease liabilities (the "2degrees Sale"). In March 2022, subsidiaries of the Company entered into an agreement to transfer their aggregate 71.5% indirect equity interest in their Bolivia subsidiary, Empresa de Telecomunicaciones NuevaTel (PCS de Bolivia), S.A., to Balesia Technologies, Inc. for a nominal purchase price (the "NuevaTel Transaction"). During the second quarter of 2022, the Company completed the sale of its operations in New Zealand and Bolivia, which represented substantially all of the operating activity of the business.

Unless otherwise stated, the financial information provided herein is for TIP Inc. as of June 30, 2023.

TIP Inc.'s head office is located at 155 108^th Avenue NE, Suite 400, Bellevue, Washington, 98004 USA. TIP Inc.'s common shares (the "Common Shares") trade on the NEX board of the TSX Venture Exchange under the ticker TRL.H.

For more information, visit www.trilogy-international.com.

About this press release

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This press release contains information about our business and performance for the three and six months ended June 30, 2023, as well as forward-looking information and assumptions. See "About Forward-Looking Information" for more information. This discussion should be read together with supplementary information filed on the date hereof under TIP Inc.'s profile on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

The financial information included in this press release was prepared in accordance with U.S. generally accepted accounting principles.

All dollar amounts are in U.S. dollars ("USD") unless otherwise stated. In New Zealand, the Company generated revenues and incurred costs in 2022 in NZD. Fluctuations in the value of the NZD relative to the USD increased or decreased the Company's overall revenue and profitability as stated in USD, which is the Company's reporting currency. The average exchange rate for the three and six months ended June 30, 2022 was 0.66 and 0.67, respectively, for the NZD, expressed in USD.

Amounts for subtotals and totals included in the financial statements in this press release may not sum or calculate using the numbers as they appear in the financial statements due to rounding. Differences between amounts set forth in the following tables and corresponding amounts in the Company's Condensed Consolidated Financial Statements and related notes for the period ended June 30, 2023 are a result of rounding.

The information presented herein is current as of August 10, 2023 and was approved by the Board of Directors of TIP Inc. (the "Board").

Additional information relating to TIP Inc., including our financial statements and Management's Discussion and Analysis for the three and six months ended June 30, 2023 and for the year ended December 31, 2022, our Annual Report on Form 10-K for the year ended December 31, 2022, and other filings with Canadian securities commissions and the U.S. Securities and Exchange Commission, is available on TIP Inc.'s website (www.trilogy-international.com) in the investor relations section and under TIP Inc.'s profile on SEDAR (www.sedar.com) and EDGAR (www.sec.gov).

Managing our Liquidity and Financial Resources

As of June 30, 2023, the Company had $30.3 million in cash and cash equivalents. The $30.3 million in cash and cash equivalents includes C$7.3 million for distributions and ongoing costs denominated in that currency. As of December 31, 2022, the Company had $25.1 million in cash and cash equivalents.

During the second quarter of 2023, the Company received $22.3 million NZD ($13.7 million) from the proceeds of the 2degrees Sale that were held in escrow. This amount includes $0.6 million NZD of interest accrued on the escrowed amount and changes in the NZD to USD foreign currency exchange rates between funding and settlement of the forward exchange contracts. See Note 6 - Derivative Financial Instruments to our Condensed Consolidated Financial Statements for additional information regarding the forward exchange contracts. Approximately $18 thousand NZD ($11 thousand) was paid to Voyage Digital for certain agreed-upon purchase price adjustments, which was deducted from the escrowed proceeds and reduced the gain on the 2degrees Sale. As of June 30, 2023, approximately $0.3 million NZD ($0.2 million) remained outstanding in escrow. Subsequent to June 30, 2023, these remaining proceeds were released to the Company.

In July 2023, the Company completed a return of capital distribution to shareholders pursuant to the plan of liquidation that was adopted by the Board on June 10, 2022. The return of capital distribution was C$0.31 per Common Share, representing an aggregate amount of approximately C$27.5 million (approximately $20.8 million). The ultimate liquidation of the Company will be subject to a shareholder vote and the satisfaction of certain other legal requirements.

Following this distribution, the Company had approximately $9 million of cash at July 31, 2023 as a reserve for the payment of expenses for continued financial reporting and other compliance obligations through May 2028, when its remaining indemnification obligations related to the 2degrees Sale are scheduled to expire, after which time the Company expects to distribute any remaining assets to shareholders and dissolve. The cash reserve will also be utilized for the payment of indemnification claims, if any, that may arise from the transaction but are not funded by the warranty insurance policy purchased in connection with the 2degrees Sale.

The Company expects that it will be required to comply with Canadian and U.S. public company reporting obligations through the six-year indemnification period following the closing of the 2degrees Sale. During the period in which the Company continues to report publicly, we will be responsible for maintaining appropriate processes and controls around financial reporting. However, given the significantly reduced risk profile of the Company following the 2degrees Sale and the NuevaTel Transaction, we have reduced our cost structure, with a significant portion of the workforce having ceased employment with the Company in September 2022, and we have retained only a limited number of resources to ensure compliance with ongoing regulatory and audit requirements. The Company has also negotiated with service providers to ensure a significant reduction in costs going forward. It is also the Company's expectation that following the escrow release and subsequent distribution in 2023, the Company will endeavor to further adjust its cost structure.

Supplementary Information

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

Condensed Consolidated Balance Sheets