. 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, billing solutions to individuals and small businesses primarily through the Ting website. Revenues are generated in the U.S.

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 U.S.

The Chief Executive Officer (the “CEO”) is the chief operating decision maker and regularly reviews the operations and performance by segment. The CEO reviews gross profit as (a) key measure of performance for each segment and (b) 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, gain on currency forward contracts and other expense net 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 CEO. The Company follows the same accounting policies for the segments as those described in Notes

and

to these consolidated financial statements.

Information by operating segments (with the exception of disaggregated revenue, which is contained in Note

), which is regularly reported to the CEO is as follows:

	Network Access Services		Domain Services		Consolidated Totals
Three months ended March 31, 2018

Net Revenues	$	23,608,225	$	72,187,466	$	95,795,691

Cost of revenues
Cost of revenues		12,206,518		56,765,702		68,972,220
Network expenses		490,215		2,083,872		2,574,087
Depreciation of property and equipment		833,060		298,083		1,131,143
Amortization of intangible assets		11,532		487,500		499,032
Total cost of revenues		13,541,325		59,635,157		73,176,482
Gross Profit		10,066,900		12,552,309		22,619,209

Expenses:
Sales and marketing						8,364,787
Technical operations and development						2,094,689
General and administrative						4,531,412
Depreciation of property and equipment						101,072
Amortization of intangible assets						1,831,730
Loss (gain) on currency forward contracts						(3,093	)
Income from operations						5,698,612
Other income (expenses), net						(772,002	)
Income before provision for income taxes					$	4,926,610

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

Net Revenues	$	19,249,785	$	50,318,277	$	69,568,062

Cost of revenues
Cost of revenues		10,392,416		38,918,296		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		11,371,989		41,252,428		52,624,417
Gross Profit		7,877,796		9,065,849		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
Loss (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

(b)

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

	March 31, 2018		December 31, 2017

Canada	$	1,555,813	$	1,176,371
United States		27,107,392		23,417,435
Germany		25,557		26,492
	$	28,688,762	$	24,620,298

(c)

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

	March 31, 2018		December 31, 2017

Canada	$	7,414,822	$	7,748,940
United States		35,839,260		37,783,202
Germany		68,440		119,770
	$	43,322,522	$	45,651,912

(d)

Valuation and qualifying accounts:

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

Three months ended March 31, 2018	$	168,409	$	1,011	$	-	$	169,420
Year ended December 31, 2017	$	164,145	$	4,264	$	-	$	168,409