. 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:

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.

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 and 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 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 significant accounting policies and estimates for the segments as described in our Annual Report on Form

-K for the fiscal year ended

December

31,

2016.

Information by

operating segments, which is regularly reported to the chief operating decision maker is as follows:

	Network Access		Domain Name Services		Consolidated Totals
Three months ended March 31, 2017

Net Revenues	$	19,100,862	$	50,467,200	$	69,568,062

Cost of revenues
Cost of revenues		10,410,397		38,900,315		49,310,712
Network expenses		541,963		1,801,233		2,343,196
Depreciation of property and equipment		426,078		164,269		590,347
Amortization of intangible assets		11,532		368,630		380,162
Total cost of revenues		11,389,970		41,234,447		52,624,417
Gross Profit		7,710,892		9,232,753		16,943,645

Expenses:
Sales and marketing						7,219,322
Technical operations and development						1,694,141
General and administrative						3,457,343
Depreciation of property and equipment						166,317
Amortization of intangible assets						1,380,809
Impairment of indefinite life intangible assets						-
Gain on currency forward contracts						(34,425	)
Income from operations						3,060,138
Other income (expenses), net						(739,096	)
Income before provision for income taxes					$	2,321,042

	Network Access		Domain Name Services		Consolidated Totals
Three months ended March 31, 2016

Net Revenues	$	16,997,839	$	27,748,250	$	44,746,089

Cost of revenues
Cost of revenues		8,945,276		19,861,441		28,806,717
Network expenses		214,524		1,018,407		1,232,931
Depreciation of property and equipment		185,680		161,073		346,753
Amortization of intangible assets		11,532		-		11,532
Total cost of revenues		9,357,012		21,040,921		30,397,933
Gross Profit		7,640,827		6,707,329		14,348,156

Expenses:
Sales and marketing						4,465,056
Technical operations and development						1,176,360
General and administrative						2,404,927
Depreciation of property and equipment						73,268
Amortization of intangible assets						56,997
Impairment of indefinite life intangible assets						20,985
Gain on currency forward contracts						(110,757	)
Income from operations						6,261,320
Other income (expenses), net						82,648
Income before provision for income taxes					$	6,343,968

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

	Three months ended March 31,
	2017		2016

Network Access Services:
Mobile Services	$	17,962,868	$	16,107,426
Other Services		1,137,994		890,413
Total Network Access Services		19,100,862		16,997,839

Domain Services:
Wholesale
Domain Services		39,091,817		21,257,654
Value Added Services		4,056,812		2,299,039
Total Wholesale		43,148,629		23,556,693

Retail		6,401,703		3,450,895
Portfolio		916,868		740,662
Total Domain Services		50,467,200		27,748,250

	$	69,568,062	$	44,746,089

During the

three

months ended

March

31,

2017

and

2016,

no customer accounted for more than

10%

of total revenue. As at

March

31,

2017

and

December

31,

2016,

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 March 31,
	2017		2016

Network Access Services:
Mobile Services	$	9,567,160	$	8,558,435
Other Services		843,237		386,841
Total Network Access Services		10,410,397		8,945,276

Domain Services:
Wholesale
Domain Services		34,462,927		17,642,586
Value Added Services		557,941		479,451
Total Wholesale		35,020,868		18,122,037

Retail		3,617,402		1,578,442
Portfolio		262,045		160,962
Total Domain Services		38,900,315		19,861,441

Network Expenses:
Network, other costs		2,343,196		1,232,931
Network, depreciation and amortization costs		970,509		358,285
		3,313,705		1,591,216

	$	52,624,417	$	30,397,933

(d)

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

	March 31, 2017		December 31, 2016

Canada	$	1,095,863	$	1,010,427
United States		17,271,569		12,398,961
Germany		36,007		41,050
	$	18,403,439	$	13,450,438

(e)

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

	March 31, 2017		December 31, 2016

Canada	$	5,617,394	$	5,850,596
United States		43,457,359		633,798
Germany		273,760		325,090
	$	49,348,513	$	6,809,484

(f)

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

	March 31, 2017		December 31, 2016

Canada	$	-	$	5,708,725
	$	-	$	5,708,725

(g)

Valuation and qualifying accounts:

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

Three months ended March 31, 2017	$	164,145	$	590	$	-	$	164,735
Year ended December 31, 2016	$	122,095	$	42,050	$	-	$	164,145