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Note 17 - Segment Reporting
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
1
7
. Segment Reporting:
 
 
(a)
  We are organized and managed based on
two
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 Services - This segment derives revenue from the sale of mobile phones, telephony services high speed Internet access, Internet hosting and consulting services to individuals and small businesses primarily through the Ting website. Revenues are generated in the United States.
 
 
2
.     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 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. The Company follows the same accounting policies for the segments as those described in note
2
to these consolidated financial statements.
 
 
Information by reportable segments, which is regularly reported to the chief operating decision maker is
as follows:
 
   
Network
Access Services
    
Domain Name
Services
    
Consolidated
Totals
  
Years ended December 31, 2016
                        
                         
Net Revenues
   $
73,778,951
     $
116,039,981
     $
189,818,932
  
                         
Cost of revenues
                        
Cost of revenues
    
37,939,683
      
82,247,279
      
120,186,962
  
Network expenses
    
1,398,899
      
3,811,601
      
5,210,500
  
Depreciation of property and equipment
    
977,395
      
342,424
      
1,319,819
  
Amortization of intangible assets
    
48,017
      
-
      
48,017
  
Total cost of revenues
    
40,363,994
      
86,401,304
      
126,765,298
  
Gross Profit
    
33,414,957
      
29,638,677
      
63,053,634
  
                         
Expenses:
                        
Sales and marketing
    
 
      
 
      
20,754,752
  
Technical operations and development
    
 
      
 
      
4,494,819
  
General and administrative
    
 
      
 
      
11,404,793
  
Depreciation of property and equipment
    
 
      
 
      
503,864
  
Amortization of intangible assets
    
 
      
 
      
905,157
  
Impairment of indefinite life intangible assets
    
 
      
 
      
42,673
  
Loss on currency forward contracts
    
 
      
 
      
(98,977
 )
Income from operations
    
 
      
 
      
25,046,553
  
Other income (expenses), net
    
 
      
 
      
66,371
  
Income before provision for income taxes
    
 
      
 
     $
25,112,924
  
 
   
Network
Access
    
Domain Name
Services
    
Consolidated
Totals
  
Year ended December 31, 2015
                        
                         
Net Revenues
   $
60,974,265
     $
110,712,514
     $
171,686,779
  
                         
Cost of revenues
                        
Cost of revenues
    
34,133,569
      
78,847,116
      
112,980,685
  
Network expenses
    
698,960
      
4,765,817
      
5,464,777
  
Depreciation of property and equipment
    
447,644
      
697,344
      
1,144,988
  
Amortization of intangible assets
    
38,520
      
-
      
38,520
  
Total cost of revenues
    
35,318,693
      
84,310,277
      
119,628,970
  
Gross Profit
    
25,655,572
      
26,402,237
      
52,057,809
  
                         
Expenses:
                        
Sales and marketing
    
 
      
 
      
17,394,376
  
Technical operations and development
    
 
      
 
      
4,502,845
  
General and administrative
    
 
      
 
      
10,661,949
  
Depreciation of property and equipment
    
 
      
 
      
259,307
  
Amortization of intangible assets
    
 
      
 
      
224,206
  
Impairment of indefinite life intangible assets
    
 
      
 
      
206,116
  
Loss on currency forward contracts
    
 
      
 
      
792,900
  
Income from operations
    
 
      
 
      
18,016,110
  
Other income (expenses), net
    
 
      
 
      
(73,153
 )
Income before provision for income taxes
    
 
      
 
     $
17,942,957
  
 
   
Network
Access
    
Domain Name Services
    
Consolidated
Totals
  
Year ended December 31, 2014
                        
                         
Net Revenues
   $
34,783,563
     $
111,725,147
     $
146,508,710
  
                         
Cost of revenues
                        
Cost of revenues
    
21,870,780
      
79,990,222
      
101,861,002
  
Network expenses
    
-
      
4,554,635
      
4,554,635
  
Depreciation of property and equipment
    
-
      
699,670
      
699,670
  
Amortization of intangible assets
    
-
      
-
      
-
  
Total cost of revenues
    
21,870,780
      
85,244,527
      
107,115,307
  
Gross Profit
    
12,912,783
      
26,480,620
      
39,393,403
  
                         
Expenses:
                        
Sales and marketing
    
 
      
 
      
14,235,668
  
Technical operations and development
    
 
      
 
      
4,305,715
  
General and administrative
    
 
      
 
      
9,459,008
  
Depreciation of property and equipment
    
 
      
 
      
226,432
  
Amortization of intangible assets
    
 
      
 
      
596,620
  
Impairment of indefinite life intangible assets
    
 
      
 
      
577,145
  
Loss on currency forward contracts
    
 
      
 
      
357,760
  
Income from operations
    
 
      
 
      
9,635,055
  
Other income (expenses), net
    
 
      
 
      
(206,730
 )
Income before provision for income taxes
    
 
      
 
     $
9,428,325
  
 
(b)
           The following is a summary of the Company’s revenue earned from each significant revenue stream:
 
   
Year ended December 31,
  
   
2016
    
2015
    
2014
  
                         
Network Access Services:
                        
Mobile Services
   $
70,127,294
     $
57,685,554
     $
34,783,563
  
Other Services
    
3,651,657
      
3,288,711
      
-
  
Total Network Access Services
    
73,778,951
      
60,974,265
      
34,783,563
  
                         
Domain Services:
                        
Wholesale
                        
Domain Services
    
89,009,546
      
84,934,519
      
86,585,994
  
Value Added Services
    
9,169,721
      
9,298,978
      
9,654,734
  
Total Wholesale
    
98,179,267
      
94,233,497
      
96,240,728
  
                         
Retail
    
14,629,949
      
12,637,498
      
10,417,746
  
Portfolio
    
3,230,765
      
3,841,519
      
5,066,673
  
Total Domain Services
    
116,039,981
      
110,712,514
      
111,725,147
  
                         
    $
189,818,932
     $
171,686,779
     $
146,508,710
  
 
During t
he years ended
December
 
31,
2016,
2015
and
2014,
no customer accounted for more than
10%
of total revenue. As at
December
 
31,
2016,
2015
and
2014
no customers 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:
 
   
Year ended December 31,
  
   
2016
    
2015
    
2014
  
                         
Network Access Services:
                        
Mobile Services
   $
35,914,882
     $
32,615,416
     $
21,870,780
  
Other Services
    
2,024,801
      
1,518,153
      
-
  
Total Network Access Services
    
37,939,683
      
34,133,569
      
21,870,780
  
                         
Domain Services:
                        
Wholesale
                        
Domain Services
    
72,947,730
      
70,633,267
      
72,353,061
  
Value Added Services
    
1,918,165
      
2,023,341
      
2,211,085
  
Total Wholesale
    
74,865,895
      
72,656,608
      
74,564,146
  
                         
Retail
    
6,765,237
      
5,494,550
      
4,539,439
  
Portfolio
    
616,147
      
695,958
      
886,637
  
Total Domain Services
    
82,247,279
      
78,847,116
      
79,990,222
  
                         
Network Expenses:
                        
Network, other costs
    
5,210,500
      
5,464,777
      
4,554,635
  
Network, depreciation and amortization costs
    
1,367,836
      
1,183,508
      
699,670
  
     
6,578,336
      
6,648,285
      
5,254,305
  
                         
    $
126,765,298
     $
119,628,970
     $
107,115,307
  
 
 
(d)
           The following is a summary of the Company’s property and equipment by geographic region:
 
   
December 31, 2016
    
December 31, 2015
  
                 
Canada
   $
1,010,427
     $
1,225,236
  
United States
    
12,398,961
      
5,847,666
  
Germany
    
41,050
      
53,774
  
    $
13,450,438
     $
7,126,676
  
 
 
(e)           The following is a summary of the Company’s amortizable intangible assets by geographic region:
 
   
December 31, 2016
    
December 31, 2015
  
                 
Canada
   $
5,850,596
     $
-
  
United States
    
633,798
      
702,594
  
Germany
    
325,090
      
530,410
  
    $
6,809,484
     $
1,233,004
  
 
 
(f)           The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region:
 
   
December 31, 2016
    
December 31, 2015
  
                 
Canada
   $
5,708,725
     $
7,621,092
  
    $
5,708,725
     $
7,621,092
  
 
 
(g)
           Valuation and qualifying accounts:
 
 
Allowance for doubtful accounts exclusding provision for credit notes
  
Balance at beginning
of period
    
Charged to
(recovered) costs and
expenses
    
Write-offs
during period
    
Balance at
end of period
  
                                 
Year ended December 31, 2016
   $
122,095
     $
42,050
     $
-
     $
164,145
  
Year ended December 31, 2015
   $
125,766
     $
(3,671
 )   $
-
     $
122,095