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Note 9 - Segment Reporting | 9 Months Ended
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Sep. 30, 2014
Segment Reporting [Abstract] |
Segment Reporting Disclosure [Text Block] | 9. SEGMENT REPORTING: (a) We are organized and managed based on two segments, which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The two segments are Domain Services and Network Access Services and are described as follows:
| 1. | Domain Services – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses; and by making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada.
| 2. | Network Access Services - This segment derives revenue from the sale of retail mobile phones and services to individuals and small businesses through the Ting website. Revenues are generated in the United States.
The Chief Executive Officer is the chief operating decision maker and regularly reviews the operations and performance by segment. The chief operating decision maker reviews gross margin as a key measure of performance for each segment and to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and development expenses, general and administrative expenses, depreciation of property and equipment, loss on disposition of property and equipment, amortization of intangibles, loss (gain) on currency forward contracts, other income (expense), and provision for income taxes, are organized along functional lines and are not included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the chief operating decision maker. Information by reportable segments, which is regularly reported to the chief operating decision maker is as follows:
Three months ended September 30, 2014 |  | Domain Name Services |  |  | Network Access Services |  |  | Consolidated Totals |
Net Revenues |  | $ | 29,125,494 |  |  | $ | 9,748,689 |  |  | $ | 38,874,183 |
Cost of Revenues |  |  | 20,191,680 |  |  |  | 5,794,195 |  |  |  | 25,985,875 |
Gross Profit before network expenses |  |  | 8,933,814 |  |  |  | 3,954,494 |  |  |  | 12,888,308 |
Network expenses |  |  |  |  |  |  |  |  |  |  | 1,311,534 |
Gross Profit |  |  |  |  |  |  |  |  |  |  | 11,576,774 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  |  |  |  |  |  |  |  |  | 3,593,486 |
Technical operations and development |  |  |  |  |  |  |  |  |  |  | 1,041,136 |
General and administrative |  |  |  |  |  |  |  |  |  |  | 2,639,868 |
Depreciation of property and equipment |  |  |  |  |  |  |  |  |  |  | 58,685 |
Amortization of intangibles |  |  |  |  |  |  |  |  |  |  | 107,230 |
Loss on currency forward contracts |  |  |  |  |  |  |  |  |  |  | 237,985 |
Income from operations |  |  |  |  |  |  |  |  |  |  | 3,898,384 |
Other expenses, net |  |  |  |  |  |  |  |  |  |  | 63,498 |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 3,834,886 |
Nine months ended September 30, 2014 |  | Domain Name Services |  |  | Network Access Services |  |  | Consolidated Totals |
Net Revenues |  | $ | 84,143,913 |  |  | $ | 24,720,665 |  |  | $ | 108,864,578 |
Cost of Revenues |  |  | 59,922,918 |  |  |  | 15,115,600 |  |  |  | 75,038,518 |
Gross Profit before network expenses |  |  | 24,220,995 |  |  |  | 9,605,065 |  |  |  | 33,826,060 |
Network expenses |  |  |  |  |  |  |  |  |  |  | 3,956,812 |
Gross Profit |  |  |  |  |  |  |  |  |  |  | 29,869,248 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  |  |  |  |  |  |  |  |  | 11,377,701 |
Technical operations and development |  |  |  |  |  |  |  |  |  |  | 3,238,566 |
General and administrative |  |  |  |  |  |  |  |  |  |  | 6,293,987 |
Depreciation of property and equipment |  |  |  |  |  |  |  |  |  |  | 167,527 |
Amortization of intangibles |  |  |  |  |  |  |  |  |  |  | 545,290 |
Write-off / impairment of indefinite life intangible assets |  |  |  |  |  |  |  |  |  |  | 577,145 |
Loss on currency forward contracts |  |  |  |  |  |  |  |  |  |  | 885,901 |
Income from operations |  |  |  |  |  |  |  |  |  |  | 6,783,131 |
Other expenses, net |  |  |  |  |  |  |  |  |  |  | 206,679 |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 6,576,452 |
Three months ended September 30, 2013 |  | Domain Name Services |  |  | Network Access Services |  |  | Consolidated Totals |
Net Revenues |  | $ | 30,918,611 |  |  | $ | 4,718,474 |  |  | $ | 35,637,085 |
Cost of Revenues |  |  | 20,671,990 |  |  |  | 3,596,971 |  |  |  | 24,268,961 |
Gross Profit before network expenses |  |  | 10,246,621 |  |  |  | 1,121,503 |  |  |  | 11,368,124 |
Network expenses |  |  |  |  |  |  |  |  |  |  | 1,368,703 |
Gross Profit |  |  |  |  |  |  |  |  |  |  | 9,999,421 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  |  |  |  |  |  |  |  |  | 2,998,419 |
Technical operations and development |  |  |  |  |  |  |  |  |  |  | 1,215,327 |
General and administrative |  |  |  |  |  |  |  |  |  |  | 1,869,668 |
Depreciation of property and equipment |  |  |  |  |  |  |  |  |  |  | 52,972 |
Amortization of intangibles |  |  |  |  |  |  |  |  |  |  | 219,030 |
Loss on currency forward contracts |  |  |  |  |  |  |  |  |  |  | (28,068 | )
Income from operations |  |  |  |  |  |  |  |  |  |  | 3,672,073 |
Other expenses, net |  |  |  |  |  |  |  |  |  |  | 78,966 |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 3,593,107 |
Nine months ended September 30, 2013 |  | Domain Name Services |  |  | Network Access Services |  |  | Consolidated Totals |
Net Revenues |  | $ | 85,994,751 |  |  | $ | 10,800,713 |  |  | $ | 96,795,464 |
Cost of Revenues |  |  | 60,707,782 |  |  |  | 8,646,584 |  |  |  | 69,354,366 |
Gross Profit before network expenses |  |  | 25,286,969 |  |  |  | 2,154,129 |  |  |  | 27,441,098 |
Network expenses |  |  |  |  |  |  |  |  |  |  | 4,252,972 |
Gross Profit |  |  |  |  |  |  |  |  |  |  | 23,188,126 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  |  |  |  |  |  |  |  |  | 8,792,091 |
Technical operations and development |  |  |  |  |  |  |  |  |  |  | 3,097,294 |
General and administrative |  |  |  |  |  |  |  |  |  |  | 5,266,997 |
Depreciation of property and equipment |  |  |  |  |  |  |  |  |  |  | 158,833 |
Amortization of intangibles |  |  |  |  |  |  |  |  |  |  | 657,090 |
Loss on currency forward contracts |  |  |  |  |  |  |  |  |  |  | 353,209 |
Income from operations |  |  |  |  |  |  |  |  |  |  | 4,862,612 |
Other expenses, net |  |  |  |  |  |  |  |  |  |  | 271,756 |
Income before provision for income taxes |  |  |  |  |  |  |  |  |  | $ | 4,590,856 |
(b) The following is a summary of the Company’s revenue earned from each significant revenue stream:
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
Domain Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wholesale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domain Services |  | $ | 21,880,181 |  |  | $ | 22,002,858 |  |  | $ | 65,032,221 |  |  | $ | 65,698,859 |
Value Added Services |  |  | 2,350,195 |  |  |  | 2,606,151 |  |  |  | 7,349,527 |  |  |  | 7,854,268 |
Total Wholesale |  |  | 24,230,376 |  |  |  | 24,609,009 |  |  |  | 72,381,748 |  |  |  | 73,553,127 |
Retail |  |  | 2,687,478 |  |  |  | 2,142,446 |  |  |  | 7,612,079 |  |  |  | 6,062,244 |
Portfolio |  |  | 2,207,640 |  |  |  | 4,167,155 |  |  |  | 4,150,086 |  |  |  | 6,379,380 |
Total Domain Services |  |  | 29,125,494 |  |  |  | 30,918,610 |  |  |  | 84,143,913 |  |  |  | 85,994,751 |
Network Access Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ting |  |  | 9,748,689 |  |  |  | 4,718,475 |  |  |  | 24,720,665 |  |  |  | 10,800,713 |
Total Network Access Services |  |  | 9,748,689 |  |  |  | 4,718,475 |  |  |  | 24,720,665 |  |  |  | 10,800,713 |
|  | $ | 38,874,183 |  |  | $ | 35,637,085 |  |  | $ | 108,864,578 |  |  | $ | 96,795,464 |
During the three and nine months ended September 30, 2014 and 2013, no customer accounted for more than 10% of total revenue. As at September 30, 2014 and 2013, no customer accounted for more than 10% of accounts receivable. (c) The following is a summary of the Company’s cost of revenues from each significant revenue stream:
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
Domain Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Wholesale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domain Services |  | $ | 18,229,841 |  |  | $ | 18,580,828 |  |  | $ | 54,274,382 |  |  | $ | 55,519,797 |
Value Added Services |  |  | 575,813 |  |  |  | 484,619 |  |  |  | 1,679,546 |  |  |  | 1,567,113 |
Total Wholesale |  |  | 18,805,654 |  |  |  | 19,065,447 |  |  |  | 55,953,928 |  |  |  | 57,086,910 |
Retail |  |  | 1,196,875 |  |  |  | 946,113 |  |  |  | 3,322,950 |  |  |  | 2,530,036 |
Portfolio |  |  | 189,151 |  |  |  | 660,430 |  |  |  | 646,040 |  |  |  | 1,090,836 |
Total Domain Services |  |  | 20,191,680 |  |  |  | 20,671,990 |  |  |  | 59,922,918 |  |  |  | 60,707,782 |
Network Access Services: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ting |  |  | 5,794,195 |  |  |  | 3,596,971 |  |  |  | 15,115,600 |  |  |  | 8,646,584 |
Total Network Access Services |  |  | 5,794,195 |  |  |  | 3,596,971 |  |  |  | 15,115,600 |  |  |  | 8,646,584 |
Network Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Network, other costs |  |  | 1,139,515 |  |  |  | 1,192,450 |  |  |  | 3,427,856 |  |  |  | 3,716,471 |
Network, depreciation and amortization costs |  |  | 172,019 |  |  |  | 176,253 |  |  |  | 528,956 |  |  |  | 536,501 |
Total Network Expenses |  |  | 1,311,534 |  |  |  | 1,368,703 |  |  |  | 3,956,812 |  |  |  | 4,252,972 |
|  | $ | 27,297,409 |  |  | $ | 25,637,664 |  |  | $ | 78,995,330 |  |  | $ | 73,607,338 |
(d) The following is a summary of the Company’s property and equipment by geographic region:
|  | September 30, 2014 |  |  | December 31, 2013 |
Canada |  | $ | 1,190,337 |  |  | $ | 1,292,425 |
United States |  |  | 438,511 |  |  |  | 453,223 |
Germany |  |  | 113,457 |  |  |  | 12,188 |
|  | $ | 1,742,305 |  |  | $ | 1,757,836 |
(e) The following is a summary of the Company’s amortizable intangible assets by geographic region:
|  | September 30, 2014 |  |  | December 31, 2013 |
Canada |  | $ | − |  |  | $ | 271,300 |
Germany |  |  | 787,060 |  |  |  | 1,061,050 |
|  | $ | 787,060 |  |  | $ | 1,332,350 |
(f) The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region:
|  | September 30, 2014 |  |  | December 31, 2013 |
Canada |  | $ | 7,444,724 |  |  | $ | 6,451,563 |
|  | $ | 7,444,724 |  |  | $ | 6,451,563 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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