. 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 June 30, 2017

Net Revenues	$	21,465,896	$	62,757,405	$	84,223,301

Cost of revenues
Cost of revenues		11,668,233		47,777,111		59,445,344
Network expenses		409,744		1,850,822		2,260,566
Depreciation of property and equipment		489,964		224,665		714,629
Amortization of intangible assets		11,532		443,870		455,402
Total cost of revenues		12,579,473		50,296,468		62,875,941
Gross Profit		8,886,423		12,460,937		21,347,360

Expenses:
Sales and marketing						7,447,225
Technical operations and development						1,798,097
General and administrative						3,286,610
Depreciation of property and equipment						164,693
Amortization of intangible assets						1,608,489
Loss (gain) on currency forward contracts						(26,776	)
Income from operations						7,069,022
Other income (expenses), net						(744,548	)
Income before provision for income taxes					$	6,324,474

	Network Access		Domain Name Services		Consolidated Totals
Three months ended June 30, 2016

Net Revenues	$	18,769,534	$	28,434,379	$	47,203,913

Cost of revenues
Cost of revenues		9,851,936		19,940,172		29,792,108
Network expenses		219,797		1,185,029		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		10,294,647		21,264,739		31,559,386
Gross Profit		8,474,887		7,169,640		15,644,527

Expenses:
Sales and marketing						5,230,118
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 (gain) on currency forward contracts						(8,711	)
Income from operations						6,140,127
Other income (expenses), net						8,292
Income before provision for income taxes					$	6,148,419


	Network Access		Domain Name Services		Consolidated Totals
Six months ended June 30, 2017

Net Revenues	$	40,566,760	$	113,224,603	$	153,791,363

Cost of revenues
Cost of revenues		22,078,630		86,677,426		108,756,056
Network expenses		951,706		3,652,056		4,603,762
Depreciation of property and equipment		916,042		388,934		1,304,976
Amortization of intangible assets		23,064		812,500		835,564
Total cost of revenues		23,969,442		91,530,916		115,500,358
Gross Profit		16,597,318		21,693,687		38,291,005

Expenses:
Sales and marketing						14,666,547
Technical operations and development						3,492,238
General and administrative						6,743,953
Depreciation of property and equipment						331,010
Amortization of intangible assets						2,989,298
Loss (gain) on currency forward contracts						(61,201	)
Income from operations						10,129,160
Other income (expenses), net						(1,483,644	)
Income before provision for income taxes					$	8,645,516

	Network Access		Domain Name Services		Consolidated Totals
Six months ended June 30, 2016

Net Revenues	$	35,767,372	$	56,182,631	$	91,950,003

Cost of revenues
Cost of revenues		18,797,214		39,801,613		58,598,827
Network expenses		434,323		2,203,434		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		19,651,663		42,305,658		61,957,321
Gross Profit		16,115,709		13,876,973		29,992,682

Expenses:
Sales and marketing						9,695,174
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 (gain) on currency forward contracts						(119,468	)
Income from operations						12,401,446
Other income (expenses), net						90,941
Income before provision for income taxes					$	12,492,387

(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,
	2017		2016		2017		2016

Network Access Services:
Mobile Services	$	20,378,589	$	17,805,476	$	38,341,457	$	33,912,901
Other Services		1,087,307		964,058		2,225,303		1,854,471
Total Network Access Services		21,465,896		18,769,534		40,566,760		35,767,372

Domain Services:
Wholesale
Domain Services		48,550,092		21,665,990		87,641,907		42,923,645
Value Added Services		5,575,940		2,308,070		9,632,752		4,607,110
Total Wholesale		54,126,032		23,974,060		97,274,659		47,530,755

Retail		7,662,919		3,575,529		14,064,622		7,026,424
Portfolio		968,454		884,790		1,885,322		1,625,452
Total Domain Services		62,757,405		28,434,379		113,224,603		56,182,631

	$	84,223,301	$	47,203,913	$	153,791,363	$	91,950,003

During the

three

and

six

months ended

June 30, 2017

and

2016,

customer accounted for more than

10%

of total revenue. As at

June 30, 2017

and

December 31, 2016,

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 June 30,				Six months ended June 30,
	2017		2016		2017		2016

Network Access Services:
Mobile Services	$	10,701,805	$	9,380,533	$	20,268,965	$	17,938,968
Other Services		966,428		471,403		1,809,665		858,246
Total Network Access Services		11,668,233		9,851,936		22,078,630		18,797,214

Domain Services:
Wholesale
Domain Services		42,449,592		17,638,074		76,912,519		35,280,658
Value Added Services		594,479		459,001		1,152,419		938,453
Total Wholesale		43,044,071		18,097,075		78,064,938		36,219,111

Retail		4,547,794		1,662,350		8,165,197		3,240,793
Portfolio		185,246		180,747		447,291		341,709
Total Domain Services		47,777,111		19,940,172		86,677,426		39,801,613

Network Expenses:
Network, other costs		2,260,566		1,404,826		4,603,762		2,637,757
Network, depreciation and amortization costs		1,170,031		362,452		2,140,540		720,737
		3,430,597		1,767,278		6,744,302		3,358,494

	$	62,875,941	$	31,559,386	$	115,500,358	$	61,957,321

(d)

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

	June 30, 2017		December 31, 2016

Canada	$	1,048,911	$	1,010,427
United States		19,326,557		12,398,961
Germany		30,474		41,050
	$	20,405,942	$	13,450,438

(e)

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

	June 30, 2017		December 31, 2016

Canada	$	5,384,192	$	5,850,596
United States		41,678,000		633,798
Germany		222,430		325,090
	$	47,284,622	$	6,809,484

(f)

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

	June 30, 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

Six months ended June 30, 2017	$	164,145	$	2,582	$	-	$	166,727
Year ended December 31, 2016	$	122,095	$	42,050	$	-	$	164,145