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Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
COMPANY INFORMATION
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SANDVINE HOLDINGS UK LIMITED
CONTENTS
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SANDVINE HOLDINGS UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their strategic report for the year ended 31 December 2024
The Company is a holding and intellectual property entity within a wider group that provides application and network intelligence solutions helping service providers deliver optimised experiences to consumers and enterprises. The group’s customers use Sandvine’s cloud-based solutions to analyse, optimise and magnetise application experiences using contextual machine-learning insights and real-time actions. Solutions and pre-packaged use cases are sold to 5G, mobile, fixed, cable, satellite, interconnect and hub service providers, democratic governments and enterprises, through direct sales and an established partner program across the Americas, Asia Pacific and Europe, Middle East & Africa. The Company owns certain intellectual property and earns license income from fellow group undertakings.
As at 31 December 2024, the Company is owned within the Procera II LP structure, an exempted limited partnership registered in the Cayman Islands and managed by New Procera GP Company.
Our revenues and business may be adversely affected if we do not effectively compete in the markets in which we operate. Certain current indirect competitors are substantially larger than we are and have significantly greater financial, sales and marketing, technical, manufacturing and other resources. Competitors embedded solutions are used for basic use cases as they have limited signature portfolios which cannot fully analyse the data traversing the network, and this lack of solution breadth gives Sandvine significant advantage.
Our revenues and business will be harmed if we do not keep pace with changes with advances in technology. We will continue to invest in the development of our technology in order to keep pace with rapid changes in applications, changing network requirements, and with our competitors' efforts to advance their technology. Sales of our products to large telecommunication service providers can involve a lengthy sales cycle, which may impact the timing of our revenues and result in us expending significant resources without making any sales. Our products are highly technical and any undetected software or hardware errors in our products could have a material adverse effect on our operating results. If we are unable to successfully protect the intellectual property embodied in our technology, our business could be materially adversely affected. Any failure or inability to obtain patents with claims of a scope necessary to cover our technology or the invalidation of our patents may weaken our competitive position and may adversely affect our revenues. In February 2024, certain Sandvine entities were placed on the U.S. BIS Entity List, with limited emergency relief granted in March; all Sandvine entities were removed from the U.S. BIS Entity List on 23 October 2024. As part of this removal, the group committed to exit certain non-democratic jurisdictions or jurisdictions where the threat to digital rights was deemed to be too high by 31 December 2025, which is expected to reduce consolidated revenues. The Sandvine group’s liquidity and financing risks remain relevant. In 2024 the group executed a lender-led legal reorganization and debt restructuring and, in November 2024, commenced in-court restructuring proceedings. As at 31 December 2024, the consolidated financial statements disclosed material uncertainty related to going concern. These matters may constrain access to intra-group funding and increase counterparty risk with fellow group undertakings on which the Company depends. Management have analysed the cash flow, credit risk, and interest risks and the expected liquidity in 2024 is deemed to be sufficient to support the business from these risks.
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SANDVINE HOLDINGS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Procera II LP group (operating as “Sandvine”)
The group is evaluated on a consolidated basis at Procera II LP, which is seen as a single operating segment. In 2024, operations were affected by export-control actions inflicted by being added to the U.S. BIS Entity List on 27 February 2024 and subsequently removed on 23 October 2024. On 28 June 2024, the group’s ownership was transferred to certain of their previously secured lenders through a legal reorganization and debt restructuring transaction. In August 2024, the Company reduced operating expenses to align with the anticipated revenue size of the Company going forward. On 2 October 2024, certain Sandvine group entities’ entered into a Restructuring Support Agreement with >97% of secured lenders; on 23 October 2024, all Sandvine entities were removed from the U.S. BIS Entity List, with a commitment to exit certain non-democratic jurisdictions (or jurisdictions where the threat to digital rights was deemed to be too high) by 31 December 2025, which is expected to materially reduce consolidated revenue. In November 2024, in-court restructuring proceedings commenced under Canada’s federal insolvency legislation, the Companies’ Creditors Arrangement Act (the “CCAA”), with parallel Chapter 15 recognition proceedings commenced in the U.S.; the FY24 consolidated financial statements disclose material uncertainty regarding going concern as at 31 December 2024. With the above noted and with the Company’s actions to exit certain jurisdictions, total consolidated sales declined to $132.7 million (2023: $198.6 million), with lower activity particularly in EAA and APAC; U.S. sales were fairly flat year-on-year. In the course of the proceedings, the Canadian court approved, and the U.S. court recognized, a sale process for the Company. The sale process was ultimately successful and subsequent to year-end, the courts approved of the stalking-horse transaction and the transactions contemplated therein and, on 3 March 2025, the restructuring transactions closed. The restructuring transactions included, among others, a going-concern sale of operating assets to certain newly formed entities, known as the AppLogic Network entities. In connection with the restructuring, these entities also secured $130 million in exit loan financing. Company Sandvine Holdings UK Limited is an intermediate holding/intellectual-property entity within the group and, as at 31 December 2024, is owned within the Procera II LP (Cayman) structure, and managed by New Procera GP Company. The Company’s FY24 results primarily reflect license income from fellow group undertakings and administrative costs, including amortization of intangible assets and intra-group financing costs. The Company’s cash flows remain dependent on group funding arrangements; these may be influenced by the group restructuring and the CCAA process noted above. Going concern These financial statements have not been prepared on a going concern basis. The directors have considered the Company’s financial position, the wider Group restructuring and the uncertainty surrounding future operations following events during and after the reporting period.
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SANDVINE HOLDINGS UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
As described elsewhere in this report, the Group completed a lender led legal reorganization and debt restructuring on 28 June 2024, entered into a restructuring support agreement with its lenders in October 2024, and subsequently commenced in court restructuring proceedings under the Canadian Companies’ Creditors Arrangement Act ("CCAA") with recognition under Chapter 15 in the United States in November 2024. Court approvals were granted in early 2025 and the restructuring transactions closed on 3 March 2025, resulting in the sale of operating assets into newly formed entities branded as AppLogic Networks, conversion of a substantial portion of Group debt to equity, and establishment of an exit term loan facility.
Following these developments, the directors have determined that the Company’s future operations and funding are dependent on the outcomes of the wider Group restructuring and the intentions of the new ownership structure. At the date of approval of these financial statements, the directors have concluded that there is no realistic alternative but to cease to trade the Company in its current form once transitional activities are completed. As a result, the Company’s financial statements have been prepared on a other than going concern basis. Accordingly, assets and liabilities have been measured at their recoverable amounts or settlement values, and adjustments have been made where appropriate to reflect the fact that the Company will not continue trading as a going concern. These financial statements do not include any provision for the future costs of winding down or potential realization losses beyond those identified as at the balance sheet date.
The directors have acted in a way they considered, in good faith, to be the most likely to promote the success of the Company for the benefit of its stakeholders. Section 172 requires the Directors to have regard. Amongst other matters to the:
a) Likely consequences of any decisions in the long-term b) Interests of the Company's employees c) Need to foster the Company's business relationships with suppliers, customers: and others d) Impact of the Company's operations on the community and the environment e) Desirability of the Company maintaining a reputation for high standards of business conduct, and f) Need to act fairly as between members of the Company Similar too many large organizations much of the group strategy is set at a corporate level. The Company delegates authority for the day-to-day management to the Company executives. Management are responsible for overseeing the execution of the group strategy and adhering to polices set by the group. Senior executives hold meetings with the regional management team regularly to ensure feedback from employees, customers and our supplier base are heard and reported back in a timely manner.
This report was approved by the board and signed on its behalf.
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SANDVINE HOLDINGS UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to $96,530,974 (2023 - loss $9,924,562).
Dividends of $nil were paid during the year (2023:$nil).
The directors who served during the year were:
Subsequent to the balance sheet date, on 3 March 2025 M T Sullivan was appointed as a director of the Company.
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SANDVINE HOLDINGS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The Sandvine group has maintained a robust Environmental Management System that has resulted in it being ISO 14001:2015 certified. The Group continues to evolve its policies and practices to ensure that the environment is protected by eliminating waste and reducing the impact on pollution. The Environmental Policy of the Sandvine group helps guide management, employees, partners, and other parties in making environmentally responsible decisions and managing environmental risks.
Some steps Sandvine has taken internally to minimize its impact on the planet include:
∙Reinforcing its commitment by evolving its Environmental Management System and maintaining its ISO 14001:2015 certification.
∙Energy conservation through lab vitalisation and manufacturing efficiency improvements.
∙Creating virtual products that empower customers to select sustainable hardware options, as well as reuse existing infrastructure (reduction of e-waste).
∙Reduce plastic and electronic waste with more effective recycling practices.
∙Implement policies and internal education efforts on energy conservation, such as reminders to always power off screens and lights when not in use, and to follow automobile "idle-free" practices to help reduce greenhouse gas emissions.
∙Company-sponsored employee participation as volunteers in community clean-up days.
The Company is exempt from specific disclosures over energy usage as its consumption is below 40,000kw.
In 2024, the Sandvine group implemented a lender-led legal reorganization and debt restructuring effective 28 June 2024. As part of these transactions, the Sandvine group’s secured lenders became the owners of the ultimate parent undertaking and the previous second-lien facility was terminated with its outstanding balance exchanged in part for additional first-lien term loans. The first-lien term loans were modified to a fixed interest rate of 2.00% per annum with a three-year maturity, and the revolving credit facility expired on 28 June 2024. On 2 October 2024, certain of the Sandvine group entities entered into a restructuring support agreement with more than 97% of secured lenders and put in place a super-senior credit facility that provided $20.0 million of new money (net of a $5.0 million commitment premium), $30.0 million of delayed-draw availability, and rolled up $75.0 million of existing first-lien loans. By 31 December 2024, $20.0 million of the delayed-draw had been drawn.
On 23 October 2024, all Sandvine entities were removed from the U.S. BIS Entity List. As part of this removal, the Sandvine group’s committed to exit certain non-democratic jurisdictions by 31 December 2025; this transition is expected to materially reduce revenue at the consolidated level and may affect the Company’s intra-group licensing arrangements and cash flows. On 7 November 2024, the Sandvine group’s, through certain affiliates, commenced in-court restructuring proceedings under the Canadian Companies’ Creditors Arrangement Act ("CCAA"), together with a companion recognition proceeding under Chapter 15 in the United States, to implement the restructuring contemplated by the restructuring support agreement.
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SANDVINE HOLDINGS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Post balance sheet events
On 30 January 2025, the Ontario Superior Court of Justice approved the stalking-horse sale and related transactions, with U.S. Chapter 15 recognition granted on 24 February 2025. The restructuring closed on 3 March 2025. The transactions included the sale of certain operating assets to newly formed entities branded AppLogic Networks and the implementation of transition services arrangements for certain legacy entities. In connection with the closing, approximately $341.5 million of existing indebtedness was converted into equity interests in AppLogic Networks and a $130.7 million exit term-loan facility was established with a five-year maturity and an interest rate of SOFR + 1.00% together with a 500 bps PIK option for the first 18 months (thereafter SOFR + 6.00%). The directors will continue to monitor the implications of these developments for the Company and its going concern assessment.
The directors are required to pay regard to foster the Sandvine group’s business relationships with suppliers, customers and others. All of the revenue is derived from services provided to companies within the group. However, the group has a number of contracts with external customers. Account managers in the group are responsible for maintaining those relationships. The majority of business operations are conducted by our own employees within the group and a significant proportion of services are supplied on a cost share basis with the wider group. As such the key relationships with suppliers are maintained by one of the group companies.
As permitted by Section 414c(11) of the Companies Act 2006, the Directors have elected to disclose information required to be in the Directors' report by Schedule 7 of the 'Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008', in the Strategic report.
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SANDVINE HOLDINGS UK LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The auditor, Nortons Assurance Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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SANDVINE HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SANDVINE HOLDINGS UK LIMITED
We have audited the financial statements of Sandvine Holdings UK Limited (the 'Company') for the year ended 31 December 2024, which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to Note 2.4 to the financial statements which explains that the directors intend to liquidate the Company and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in Note 2.4.
Our opinion is not modified in respect of this matter.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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SANDVINE HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SANDVINE HOLDINGS UK LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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SANDVINE HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SANDVINE HOLDINGS UK LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The objectives of our audit, in respect to fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. Our approach was as follows:
∙We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant frameworks which are directly relevant to specific assertions in the financial statements are those that relate to the reporting framework including the Companies Act 2006 and the relevant tax compliance regulations in the UK.
∙We understood how the Company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures.
∙We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by discussing with management to understand where it considered there was a susceptibility to fraud. We considered the controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements were free from fraud and error.
∙Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations identified in the paragraphs above. Our procedures involved journal entry testing, with a focus on journals indicating large or unusual transactions based on our understanding of the business, enquiries of Company management and focused testing. In addition, we completed procedures to conclude on the compliance of the disclosures in the Annual Report and Accounts with the requirements of the relevant accounting standards and UK legislation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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SANDVINE HOLDINGS UK LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SANDVINE HOLDINGS UK LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountant and Statutory Auditor
Second Floor
NOW Building
Thames Valley Park
Berkshire
RG6 1RB
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SANDVINE HOLDINGS UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
REGISTERED NUMBER: 10533653
BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 16 to 30 form part of these financial statements.
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SANDVINE HOLDINGS UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Sandvine Holdings UK Limited (the Company) is a company incorporated in the United Kingdom under the Companies Act. The Company is a private company limited by shares and is registered in England and Wales. The Company's registered office is 12 New Fetter Lane, London, United Kingdom, EC4A 1JP.
The principal activity of the Company is to be a holding company to a group of companies that provides Network Intelligence solutions to network operators.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Sandvine L.P. as at 31 December 2023 and these financial statements may be obtained from Sandvine Corp., 408 Albert St., Waterloo, Ontario, Canada.
The financial statements contain information about Sandvine Holdings UK Limited as an individual company and do not contain consolidated financial information as the parent of a group. The Company is exempt under Section 401 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its ultimate parent, Procera II LP (Formerly Sandvine LP).
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The directors have assessed the Company’s financial position, the broader restructuring of the Sandvine group, and the uncertainty regarding the Company’s future operations and funding. During the year ended 31 December 2024, the group implemented a lender-led legal reorganisation and debt restructuring effective 28 June 2024, resulting in the secured lenders assuming ownership of the ultimate parent entity and modification of the group’s term-loan facilities. On 2 October 2024, the group entered into a restructuring support agreement with more than 97% of its secured lenders and arranged a new super-senior credit facility. On 23 October 2024, all Sandvine entities were removed from the U.S. BIS Entity List, accompanied by a commitment to exit certain non-democratic jurisdictions by 31 December 2025. On 7 November 2024, the Company and certain affiliated entities commenced proceedings under the Canadian Companies’ Creditors Arrangement Act (CCAA), with companion recognition under Chapter 15 of the U.S. Bankruptcy Code, to implement the restructuring contemplated by the restructuring support agreement. Court approvals were granted in early 2025, and the restructuring closed on 3 March 2025, including the sale of operating assets to newly formed entities branded AppLogic Networks, the conversion of approximately $341.5 million of debt to equity, and the establishment of a $130.7 million exit term-loan facility with a five-year maturity. Following these developments, the directors concluded that it is no longer appropriate to prepare the Company’s financial statements on a going concern basis. The Company’s ongoing activities are limited to transitional and administrative functions, and it is expected that the Company will ultimately be wound down once these are complete. Accordingly, the financial statements have been prepared on a other than going concern basis. Assets and liabilities have been measured at their expected recoverable or settlement amounts. No provision has been made for future trading losses or for costs that may arise on winding up beyond those recognised as at the balance sheet date.
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
In accordance with FRS 102 Section 27 (Impairment of Assets), the directors have conducted an impairment review of the carrying value of the Company's investments based on the financial position of the entities and adjustments have been made based on this review. The directors believe that the carrying values of investments are appropriate.
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Analysis of turnover by country of destination:
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Profit and loss account
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
During 2024, Jefferies Finance LLC and Barings Finance LLC had their fixed and floating charges over the assets of the Company terminated. Acquiom Agency Services LLC initiated fixed and floating charges over the assets of the Company pursuant to a debenture, share pledge agreement, and a collateral agreement, which agreements are part of the collateral package in respect of the broader entity group.
On March 3, 2025, a restructuring transaction took place for the broader entity group which removed the Company from the collateral package. As at December 31, 2024, the group had $438.6M of borrowings. The revolving credit facility expired on June 28, 2024 and was not extended. On 30 January 2025, the Ontario Superior Court of Justice approved the Stalking Horse Agreement and related transactions, as well as an order approving the enhanced powers of the court-appointed monitor following closing. On 24 February 2025, the United States Bankruptcy Court for the Northern District of Texas (Dallas Division) entered an order recognising and giving effect within the United States to the Canadian court orders approving the Stalking Horse Agreement and the enhanced monitor powers. On 3 March 2025, the restructuring transactions contemplated by the Stalking Horse Agreement were completed. These transactions included the sale of certain operating assets of Sandvine to newly formed entities branded as AppLogic Networks, primarily based in the United States, and the transfer of most Sandvine entities outside the United States and Canada into the AppLogic Networks structure. Certain of the newly formed AppLogic Networks entities, including its ultimate parent, were organised as limited liability companies incorporated in the United States. The restructuring also provided for transition services arrangements between certain legacy entities remaining in the CCAA process and the newly formed AppLogic Networks group, to ensure continuity of service delivery until the legacy entities are either wound up or otherwise discharged under applicable law. The restructuring transactions resulted in approximately US$341.5 million of existing indebtedness being converted into equity interests in AppLogic Networks, and AppLogic Networks being capitalised with US$130.7 million of term debt (the “Exit Term Loan Facility”). The Exit Term Loan Facility has a five-year maturity and carries an interest rate of SOFR + 1.00% plus a 500 basis point payment-in-kind option for the first 18 months, after which the rate increases to SOFR + 6.00%. Initial interest payments are semi-annual, transitioning to quarterly thereafter. The facility is secured over the assets of AppLogic Networks' U.S. and Canadian entities and contains no financial covenants. As part of the wider group restructuring completed on 3 March 2025, certain intercompany balances owed to Sandvine Holdings UK Limited were contractually released through formal deeds executed between related parties. In particular, the loan note of US $113 million due from the Company to Sandvine Corporation (later to Sandvine OP UK Ltd) was fully discharged under a Deed of Release dated 2 March 2025. The transactions represent non-adjusting post-balance-sheet events, and the directors have determined that no adjustment is required to the carrying amounts as at 31 December 2024.
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SANDVINE HOLDINGS UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
20.Post balance sheet events (continued)
The directors continue to assess the implications of these events for the Company and its future operations. No adjustments have been made in these financial statements as a result of the above events, as they occurred after the balance sheet date.
The previous immediate parent Sandvine LP (Cayman) was dissolved on November 14, 2024.
As at December 31, 2024, the immediate and ultimate parent of the Company is
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