10. Segment reporting:

(a) We are organized and managed based on three operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate and are described as follows:

1. Network Access - Mobile Services - This segment derives revenue from the sale of mobile phones and telephony services to individuals and small businesses through the Ting website. Revenues are generated in the United States.

2. Network Access - Other Services - This segment derives revenue from the provisioning of high speed Internet access, Internet hosting and consulting services. Revenues are generated in the United States.

3. 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.

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 profit 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, amortization of intangibles assets, impairment of indefinite life intangible assets, 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:

	Network Access (1)				Domain Name Services		Consolidated Totals
Three months ended June 30, 2016	Mobile Services		Other Services

Net Revenues	$	18,026,420		972,123		28,467,838	$	47,466,381

Cost of revenues
Cost of revenues		9,380,533		528,957		19,940,171		29,849,661
Network expenses		35,999		183,799		1,185,028		1,404,826
Depreciation of property and equipment		-		211,382		139,538		350,920
Amortization of intangible assets		-		11,532		-		11,532
Total cost of revenues		9,416,532		935,670		21,264,737		31,616,939
Gross Profit		8,609,888		36,453		7,203,101		15,849,442

Expenses:
Sales and marketing								5,435,033
Technical operations and development								998,651
General and administrative								2,926,608
Depreciation of property and equipment								76,922
Amortization of intangible assets								276,918
Impairment of indefinite life intangible assets								3,894
Loss on currency forward contracts								(8,711	)
Income from operations								6,140,127
Other income (expensees), net								8,292
Income before provision for income taxes							$	6,148,419

(1)	Network access includes Mobile Services and Other Services. Other Services includes the provisioning of high speed Internet access, Internet hosting and network consulting services.

	Network Access (1)				Domain Name Services		Consolidated Totals
Three months ended June 30, 2015	Mobile Services		Other Services

Net Revenues	$	14,351,903		1,066,066		27,471,251	$	42,889,220

Cost of revenues
Cost of revenues		7,996,331		502,306		19,752,035		28,250,672
Network expenses		26,265		199,077		1,269,496		1,494,838
Depreciation of property and equipment		-		104,921		175,008		279,929
Amortization of intangible assets		-		11,532		-		11,532
Total cost of revenues		8,022,596		817,836		21,196,539		30,036,971
Gross Profit		6,329,307		248,230		6,274,712		12,852,249

Expenses:
Sales and marketing								4,847,963
Technical operations and development								1,189,276
General and administrative								2,750,466
Depreciation of property and equipment								62,022
Amortization of intangible assets								56,997
Impairment of indefinite life intangible assets								37,805
Loss on currency forward contracts								25,227
Income from operations								3,882,493
Other income (expensees), net								(57,402	)
Income before provision for income taxes							$	3,825,091

(1)	Network access includes Mobile Services and Other Services. Other Services includes the provisioning of high speed Internet access, Internet hosting and network consulting services.

	Network Access (1)				Domain Name Services		Consolidated Totals
Six months ended June 30, 2016	Mobile Services		Other Services

Net Revenues	$	34,970,490		1,867,185		56,239,119	$	93,076,794

Cost of revenues
Cost of revenues		17,938,968		959,554		39,801,612		58,700,134
Network expenses		73,150		361,172		2,203,435		2,637,757
Depreciation of property and equipment		-		397,062		300,611		697,673
Amortization of intangible assets		-		23,064		-		23,064
Total cost of revenues		18,012,118		1,740,852		42,305,658		62,058,628
Gross Profit		16,958,372		126,333		13,933,461		31,018,166

Expenses:
Sales and marketing								10,720,657
Technical operations and development								2,175,011
General and administrative								5,331,535
Depreciation of property and equipment								150,190
Amortization of intangible assets								333,915
Impairment of indefinite life intangible assets								24,879
Loss on currency forward contracts								(119,468	)
Income from operations								12,401,447
Other income (expensees), net								90,940
Income before provision for income taxes							$	12,492,387

(1)	Network access includes Mobile Services and Other Services. Other Services includes the provisioning of high speed Internet access, Internet hosting and network consulting services.

	Network Access (1)				Domain Name Services		Consolidated Totals
Six months ended June 30, 2015	Mobile Services		Other Services

Net Revenues	$	26,911,135		1,433,848		55,012,070	$	83,357,053

Cost of revenues
Cost of revenues		15,126,180		717,614		39,228,252		55,072,046
Network expenses		38,168		260,590		2,418,176		2,716,934
Depreciation of property and equipment		-		133,811		345,760		479,571
Amortization of intangible assets		-		15,456		-		15,456
Total cost of revenues		15,164,348		1,127,471		41,992,188		58,284,007
Gross Profit		11,746,787		306,377		13,019,882		25,073,046

Expenses:
Sales and marketing								8,647,138
Technical operations and development								2,303,471
General and administrative								5,218,488
Depreciation of property and equipment								121,284
Amortization of intangible assets								110,212
Impairment of indefinite life intangible assets								50,298
Loss on currency forward contracts								329,251
Income from operations								8,292,904
Other income (expensees), net								(82,177	)
Income before provision for income taxes							$	8,210,727

(1)	Network access includes Mobile Services and Other Services. Other Services includes the provisioning of high speed Internet access, Internet hosting and network consulting services.

(b) The following is a summary of the Company’s revenue earned from each significant revenue stream:

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015

Network Access Services:
Mobile Services	$	18,026,420	$	14,351,903	$	34,970,490	$	26,911,135
Other Services		972,123		1,066,066		1,867,185		1,433,848
Total Network Access Services		18,998,543		15,417,969		36,837,675		28,344,983

Domain Services:
Wholesale
Domain Services		21,698,720		21,286,863		42,969,585		42,461,994
Value Added Services		2,309,621		2,355,837		4,612,054		4,597,835
Total Wholesale		24,008,341		23,642,700		47,581,639		47,059,829

Retail		3,556,140		3,009,465		6,970,772		5,885,193
Portfolio		903,357		819,086		1,686,708		2,067,048
Total Domain Services		28,467,838		27,471,251		56,239,119		55,012,070

	$	47,466,381	$	42,889,220	$	93,076,794	$	83,357,053

During the three and six months ended June 30, 2016 and 2015, no customer accounted for more than 10% of total revenue. As at June 30, 2016, no customer accounted for more than 10% of accounts receivable and two customers accounted for 21% accounts receivable as at June 30, 2015.

	Three months ended June 30,				Six months ended June 30,
	2016		2015		2016		2015

Network Access Services:
Mobile Services	$	9,380,533	$	7,996,331	$	17,938,968	$	15,126,180
Other Services		528,957		502,306		959,554		717,614
Total Network Access Services		9,909,490		8,498,637		18,898,522		15,843,794

Domain Services:
Wholesale
Domain Services		17,645,470		17,744,966		35,288,241		35,291,293
Value Added Services		451,604		501,518		930,986		1,037,650
Total Wholesale		18,097,074		18,246,484		36,219,227		36,328,943

Retail		1,639,755		1,322,620		3,218,081		2,543,120
Portfolio		203,342		182,931		364,304		356,189
Total Domain Services		19,940,171		19,752,035		39,801,612		39,228,252

Network Expenses:
Network, other costs		1,404,826		1,494,838		2,637,757		2,716,934
Network, depreciation and amortization costs		362,452		291,461		720,737		495,027
		1,767,278		1,786,299		3,358,494		3,211,961

	$	31,616,939	$	30,036,971	$	62,058,628	$	58,284,007

(d) The following is a summary of the Company’s property and equipment by geographic region:

	June 30 , 2016		December 31, 2015


Canada	$	1,017,649	$	1,225,236
United States		6,809,041		5,847,666
Germany		113,294		53,774
	$	7,939,984	$	7,126,676

(e) The following is a summary of the Company’s amortizable intangible assets by geographic region:

	June 30, 2016		December 31, 2015


Canada	$	6,030,650	$	-
United States		668,195		702,594
Germany		427,750		530,410
	$	7,126,595	$	1,233,004

(f) The following is a summary of the Company’s deferred tax asset by geographic region:

	June 30, 2016		December 31, 2015


Canada	$	6,339,848	$	7,621,092
	$	6,339,848	$	7,621,092

(g) Valuation and qualifying accounts:

Allowance for doubtful accounts	Balance at beginning of period		Charged to (recovered) costs and expenses			Write-offs during period		Balance at end of period

Six months ended June 30, 2016	$	122,095	$	25,698		$	-	$	147,793
Year ended December 31, 2015	$	125,766	$	(3,671	)	$	-	$	122,095