10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to          

Commission file number 1-32600

TUCOWS INC.

(Exact Name of Registrant as Specified in Its Charter)

Pennsylvania	23-2707366
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

96 Mowat Avenue,

Toronto, Ontario M6K 3M1, Canada

(Address of Principal Executive Offices) (Zip Code)

(416) 535-0123

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T §232.405 of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
(Do not check if a smaller reporting company)
	Emerging Growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  Yes ☐ No ☒

As of November 6, 2017 there were 10,577,549 outstanding shares of common stock, no par value, of the registrant.

1

TUCOWS INC.

Form 10-Q Quarterly Report

INDEX

PART I FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016	3
	Consolidated Statements of Operations and Comprehensive Income (unaudited) for the three and nine months ended September 30, 2017 and 2016	4
	Consolidated Statements of Cash Flows (unaudited) for the three and nine months ended September, 2017 and 2016	5
	Notes to Consolidated Financial Statements (unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	47
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	49
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 4.	Mine Safety Disclosures	49
Item 6.	Exhibits	50
Signatures		51

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

Tucows®, EPAG®, Hover®, OpenSRS®, Platypus®, Ting®, eNom®, Roam®, Roam Mobility®, Bulkregister® and YummyNames® are registered trademarks of Tucows Inc. or its subsidiaries. Other service marks, trademarks and trade names of Tucows Inc. or its subsidiaries may be used in this Quarterly Report on Form 10-Q (this “Quarterly Report”). All other service marks, trademarks and trade names referred to in this Quarterly Report are the property of their respective owners. Solely for convenience, any trademarks referred to in this Quarterly Report may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we or the owner of such trademark, as applicable, will not assert, to the fullest extent under applicable law, our or its rights, or the right of the applicable licensor, to these trademarks.

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PART I.

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Tucows Inc.

Consolidated Balance Sheets

(Dollar amounts in U.S. dollars)

(unaudited)

	September 30,		December 31,
	2017		2016
Assets
Current assets:
Cash and cash equivalents	$	12,547,059	$	15,105,075
Accounts receivable, net of allowance for doubtful accounts of $167,886 as of September 30, 2017 and $164,145 as of December 31, 2016		13,726,565		10,925,622
Inventory		2,949,172		1,210,789
Prepaid expenses and deposits		14,712,889		6,250,555
Derivative instrument asset, current portion (note 5)		559,663		172,888
Prepaid domain name registry and ancillary services fees, current portion		106,672,400		49,396,737
Income taxes recoverable		780,185		220,451
Total current assets		151,947,933		83,282,117
Prepaid domain name registry and ancillary services fees, long-term portion		23,791,150		10,993,156
Property and equipment		22,232,870		13,450,438
Deferred tax asset		-		5,708,725
Intangible assets (note 6)		60,562,113		19,973,793
Goodwill (note 6)		87,486,243		21,005,143
Total assets	$	346,020,309	$	154,413,372
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	5,946,691	$	4,786,645
Accrued liabilities		8,681,752		7,098,905
Customer deposits		15,303,523		5,418,622
Deferred rent, current portion		20,947		20,854
Loan payable, current portion (note 7)		18,289,853		2,233,110
Deferred revenue, current portion		131,971,919		62,795,079
Accreditation fees payable, current portion		1,201,477		528,027
Income taxes payable		1,239,754		1,548,121
Total current liabilities		182,655,916		84,429,363
Deferred revenue, long-term portion		31,219,144		15,053,977
Accreditation fees payable, long-term portion		299,909		115,084
Deferred rent, long-term portion		129,656		124,202
Loan payable, long-term portion (note 7)		63,137,229		8,015,698
Deferred gain		558,220		944,680
Deferred tax liability		18,198,544		4,827,192
Redeemable non-controlling interest (note 4 (a))		1,123,738		3,086,090
Stockholders' equity (note 12)
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding		-		-
Common stock - no par value, 250,000,000 shares authorized; 10,577,549 shares issued and outstanding as of September 30, 2017 and 10,461,574 shares issued and outstanding as of December 31, 2016		15,284,633		14,460,500
Additional paid-in capital		1,602,181		2,857,921
Retained earnings		31,489,104		20,399,511
Accumulated other comprehensive income		322,035		99,154
Total stockholders' equity		48,697,953		37,817,086
Total liabilities and stockholders' equity	$	346,020,309	$	154,413,372
Commitments and contingencies (note 11)

See accompanying notes to unaudited consolidated financial statements

3

Tucows Inc.

Consolidated Statements of Operations and Comprehensive Income

(Dollar amounts in U.S. dollars)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Net revenues (note 10)	$	85,008,484		$	49,064,327		$	238,799,847		$	141,014,329
Cost of revenues (note 10)
Cost of revenues		61,066,761			30,846,668			169,822,817			89,445,493
Network expenses		2,460,696			1,287,620			7,064,458			3,925,377
Depreciation of property and equipment		823,441			278,746			2,128,417			976,419
Amortization of intangible assets (note 6)		499,032			13,421			1,334,596			36,485
Total cost of revenues		64,849,930			32,426,455			180,350,288			94,383,774
Gross profit		20,158,554			16,637,872			58,449,559			46,630,555
Expenses:
Sales and marketing		7,578,414			5,479,445			22,244,961			15,174,619
Technical operations and development		1,910,147			1,270,107			5,402,385			3,445,118
General and administrative		2,852,345			2,166,217			9,596,298			7,497,752
Depreciation of property and equipment		154,638			178,687			485,648			328,877
Amortization of intangible assets (note 6)		1,745,923			279,126			4,735,221			613,041
Impairment of indefinite life intangible assets (note 6)		1,500			2,866			1,500			27,745
Loss (gain) on currency forward contracts (note 5)		(54,075	)		22,475			(115,276	)		(96,993	)
Total expenses		14,188,892			9,398,923			42,350,737			26,990,159
Income from operations		5,969,662			7,238,949			16,098,822			19,640,396
Other income (expense):
Interest expense, net		(864,482	)		(135,168	)		(2,702,504	)		(301,868	)
Other income, net		157,453			130,147			511,831			387,787
Total other income (expense)		(707,029	)		(5,021	)		(2,190,673	)		85,919
Income before provision for income taxes		5,262,633			7,233,928			13,908,149			19,726,315
Provision for income taxes (note 8)		1,823,367			2,492,649			2,780,908			6,476,012
Net income before redeemable non-controlling interest		3,439,266			4,741,279			11,127,241			13,250,303
Redeemable non-controlling interest (note 4 (a))		(68,635	)		(254,101	)		(311,693	)		(698,583	)
Net income attributable to redeemable non-controlling interest		68,635			254,101			311,693			698,583
Net income for the period		3,439,266			4,741,279			11,127,241			13,250,303
Other comprehensive income (loss), net of tax
Unrealized income (loss) on hedging activities (note 5)		309,445			(58,821	)		638,442			516,406
Net amount reclassified to earnings (note 5)		(317,516	)		131,912			(415,561	)		546,836
Other comprehensive income (loss) net of tax of $(4,591) and $41,580 for the three months ended September 30, 2017 and September 30, 2016, and $126,791 and $585,943 for the nine months ended September 30, 2017 and September 30, 2016 (note 5)		(8,071	)		73,091			222,881			1,063,242
Comprehensive income for the period	$	3,431,195		$	4,814,370		$	11,350,122		$	14,313,545
Basic earnings per common share (note 9)	$	0.33		$	0.45		$	1.06		$	1.26
Shares used in computing basic earnings per common share (note 9)		10,564,311			10,432,763			10,522,841			10,549,056
Diluted earnings per common share (note 9)	$	0.32		$	0.45		$	1.03		$	1.23
Shares used in computing diluted earnings per common share (note 9)		10,785,342			10,619,005			10,785,050			10,736,775

See accompanying notes to unaudited consolidated financial statements

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Tucows Inc.

Consolidated Statements of Cash Flows

(Dollar amounts in U.S. dollars)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Cash provided by:				(restated - note 3)						(restated - note 3)
Operating activities:
Net income for the period	$	3,439,266		$	4,741,279		$	11,127,241		$	13,250,303
Items not involving cash:
Depreciation of property and equipment		978,079			457,433			2,614,065			1,305,296
Loss on write off of property and equipment		8,157			-			16,951			-
Amortization of debt discount and issuance costs		56,559			8,298			203,871			8,298
Amortization of intangible assets		2,244,955			292,547			6,069,817			649,526
Impairment of indefinite life intangible asset		1,500			2,866			1,500			27,745
Deferred income taxes		(1,445,241	)		926,733			(3,010,795	)		1,630,076
Excess tax benefits on share-based compensation expense		(443,718	)		268,565			(2,614,804	)		714,764
Amortization of deferred rent		63			13,783			5,547			30,447
Loss on disposal of domain names		7,896			4,760			24,661			25,581
Other income		(128,820	)		(128,820	)		(386,460	)		(386,460	)
Loss (gain) on change in the fair value of forward contracts		1,053			(20,114	)		(37,103	)		(292,133	)
Stock-based compensation		202,902			195,439			833,987			585,854
Change in non-cash operating working capital:
Accounts receivable		533,900			(1,623,719	)		(330,070	)		(4,435,250	)
Inventory		(642,738	)		(217,741	)		(1,738,383	)		(598,658	)
Prepaid expenses and deposits		201,757			419,939			(2,169,319	)		(939,935	)
Prepaid domain name registry and ancillary services fees		3,083,506			(1,271,948	)		570,338			(5,170,911	)
Income taxes recoverable		2,225,254			363,244			1,815,420			1,553,524
Accounts payable		(643,327	)		681,303			(4,681,314	)		(1,993	)
Accrued liabilities		981,046			(581,495	)		994,402			(1,429,069	)
Customer deposits		(1,904,666	)		(943,579	)		1,163,305			90,970
Deferred revenue		(1,424,673	)		1,666,291			7,543,013			6,772,663
Accreditation fees payable		(50,302	)		14,059			(199,832	)		51,215
Net cash provided by operating activities		7,282,408			5,269,123			17,816,038			13,441,853
Financing activities:
Proceeds received on exercise of stock options		68,065			48,376			172,903			107,672
Payment of tax obligations resulting from net exercise of stock options		(116,956	)		(76,537	)		(1,438,497	)		(318,770	)
Repurchase of common stock		-			-			-			(7,180,257	)
Proceeds received on loan payable		-			10,989,583			86,998,000			16,989,583
Repayment of loan payable		(4,572,640	)		(9,062,500	)		(15,403,380	)		(9,500,000	)
Payment of loan payable costs		(16,463	)		(383,463	)		(620,217	)		(516,963	)
Net cash provided by (used in) financing activities		(4,637,994	)		1,515,459			69,708,809			(418,735	)
Investing activities:
Additions to property and equipment		(2,859,036	)		(2,091,368	)		(9,461,105	)		(3,923,105	)
Acquisition of a portion of the minority interest in Ting Virginia, LLC (note 4(a))		-			-			(2,000,000	)		-
Acquisition of Enom Incorporated, net of cash (note 4(b))		-			-			(76,237,460	)		-
Acquisition of intangible assets		(2,384,298	)		(74,400	)		(2,384,298	)		(6,324,970	)
Net cash used in investing activities		(5,243,334	)		(2,165,768	)		(90,082,863	)		(10,248,075	)
Increase (decrease) in cash and cash equivalents		(2,598,920	)		4,618,814			(2,558,016	)		2,775,043
Cash and cash equivalents, beginning of period		15,145,979			5,879,482			15,105,075			7,723,253
Cash and cash equivalents, end of period	$	12,547,059		$	10,498,296		$	12,547,059		$	10,498,296
Supplemental cash flow information:
Interest paid	$	869,749		$	93,560		$	2,717,378		$	260,506
Income taxes paid, net	$	1,307,727		$	927,826		$	6,313,308		$	2,507,699
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for	$	186,418		$	89,860		$	186,418		$	89,860

See accompanying notes to unaudited consolidated financial statements 

5

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization of the Company:

Tucows Inc., a Pennsylvania corporation (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions), together with our consolidated subsidiaries, is a provider of Network Access Services and Domain Services.  Our Network Access Services includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services, with mobile and high-speed Internet operating primarily under our Ting and Roam brands.  Our Domain services include wholesale and retail domain name registration services, value added services and portfolio services derived through our OpenSRS, eNom, Hover and YummyNames brands.

Our principal executive office is located in Toronto, Ontario and we have other offices in Germany and the United States. Our common stock is listed on NASDAQ under the symbol “TCX” and on the Toronto Stock Exchange under the symbol “TC”.

On January 20, 2017, the Company completed the purchase of all of the issued and outstanding capital stock of eNom, Incorporated (“eNom”) from Rightside Group. Ltd, a domain name registrar business. See note 4(b) for further information.

2. Basis of presentation:

The accompanying unaudited interim consolidated balance sheets, and the related consolidated statements of operations and comprehensive income and cash flows reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the financial position of Tucows and its subsidiaries as at September 30, 2017 and the results of operations and cash flows for the interim periods ended September 30, 2017 and 2016. The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for future periods.

The accompanying unaudited interim consolidated financial statements have been prepared by Tucows in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the Company's annual audited consolidated financial statements and accompanying notes have been condensed or omitted. These interim consolidated financial statements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2016 included in Tucows' 2016 Annual Report on Form 10-K filed with the SEC on March 8, 2017. There have been no material changes to our significant accounting policies and estimates during the nine months ended September 30, 2017 as compared to the significant accounting policies and estimates described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, except for the adoption of Accounting Standard Update No. 2016-09, Stock Compensation (Topic 718). See note 3 for more information.

3. Recent accounting pronouncements:

Recent Accounting Pronouncements Adopted

On January 1, 2017, the Company adopted Accounting Standards Updates ("ASU") No. 2016-05, Derivatives and Hedging (Topic 815) and ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments. The adoption of these updates did not have a significant impact on the consolidated financial statements.

6

In January 2017, the Company adopted Accounting Standards Update (“ASU”) No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-01”), which simplifies the current two-step test to determine the amount, if any, of goodwill impairment. This update removes the second step of the quantitative test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The update will be applied to the Company's goodwill impairment evaluation for the year ended December 31, 2017.

On January 1, 2017, the Company also adopted ASU No. 2016-09, Stock Compensation (Topic 718), which simplifies the presentation of several aspects of the accounting for employee share-based payment transactions. The areas for simplification include the income tax consequences, accounting for forfeitures, and classification on the statement of cash flows. The impacts of the adoption of ASU 2016-09 on our consolidated financial statements are as follows:

● Accounting for Income Taxes – the standard requires that all excess tax benefits and tax deficiencies related to employee share-based payments are recognized through income tax expense on a prospective basis, which resulted in the recognition of $0.4 million and $2.6 million in excess tax benefits as a reduction of tax expense related to employee share-based payments during the three and nine months ended September 30, 2017, respectively;

● Cash Flow Classification – as a result of the new standard, all excess tax benefits related to employee share based payments which have been historically shown as a financing activity, should now be presented as an operating activity along with other income tax cash flows. Additionally, the standard requires that cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. The Company elected to apply both changes on a retrospective basis such that the comparative period is presented on a consistent basis as the current presentation; and

● Forfeitures – the standard allows for an entity-wide accounting policy election to either estimate the number of awards that are not expected to vest because the requisite service period will not be rendered, or to account for forfeitures as they occur. Prior to the adoption of 2016-09 the Company estimated forfeitures for the purpose of accounting for stock-based compensation. Beginning in the quarter ending March 31, 2017, the Company utilized the election to account for forfeitures as incurred. In accordance with the provisions of the new standard, the change has been adopted on a modified retrospective basis; however, the cumulative adjustment to opening retained earnings was immaterial.  

Recent Accounting Pronouncements Not Yet Adopted

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), which clarified the definition of a business with objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The amendment update provides a screen to determine when a series of integrated activities is not a business. If the screen is not met, it first requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and second removes the evaluation of whether a market participant could replace the missing elements. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017. The Company is currently in the process of evaluating the impact that the adoption of ASU 2017-01 will have on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP.  The new standard provides a single principles-based, five-step model to be applied to all contracts with customers, which steps are to (1) identify the contract(s) with the customer, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contracts and (5) recognize revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. The new standard will be effective for the Company for the interim and annual reporting periods beginning after December 15, 2017 (January 1, 2018 for the Company). Companies can transition to the standards either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of evaluating the impact of transition methods. Based on continuing analysis, we do not believe adoption of the updated standard will have a material impact as the Company’s mobile and fixed internet services are on month to month contracts with minimal device subsidization and our wholesale and retail domain registration services recognize revenue over the term of the services provided.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12”), which better aligns an entity’s risk management activities and financial reporting for hedging relationship through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results.  The new standard expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and hedged item in the financial statements.  This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. The Company is currently in the process of evaluating the impact that the adoption of ASU 2017-12 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU 2016-02 requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018 (January 1, 2019 for the Company). The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company will adopt this guidance in the first quarter of fiscal 2019 and is in the process of evaluating the impact of the adoption of ASU 2016-02 will have on its consolidated financial statements.

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4. Acquisitions:

(a) Blue Ridge Websoft

On February 27, 2015, Ting Fiber, Inc., one of the Company’s wholly owned subsidiaries, acquired a 70% ownership interest in the newly formed Ting Virginia, LLC and its subsidiaries, Blue Ridge Websoft, LLC (doing business as Blue Ridge Internet Works), Fiber Roads, LLC and Navigator Network Services, LLC (the "BRI Group") for consideration of approximately $3.5 million. Ting Virginia, LLC was an independent Internet service provider in Charlottesville, Virginia, doing business primarily as Blue Ridge Internet Works.  

On February 1, 2017, under the terms of a call option in the agreement, Ting Fiber, Inc. acquired an additional 20% interest in Ting Virginia, LLC from the selling shareholders (the “Minority Shareholders”) for consideration of $2.0 million. The Company recorded the $2.0 million payment as a reduction in the carrying value of Redeemable non-controlling interest.  Following the exercise of the call option, the Minority Shareholders chose not to exercise their right to put their remaining 10% interest in Ting Virginia, LLC to Ting Fiber, Inc. The Minority Shareholders still retain the right, on the fourth anniversary of the closing date (February 27, 2019), to exercise their put option under which Ting Fiber, Inc. would be obligated to purchase their remaining interest for $120,000 per percentage point of the additional equity interest acquired.  The Company has determined that the put option is embedded within the non-controlling interest shares that are subject to the put options. The redemption feature requires classification of the Minority Shareholders’ Interest in the Consolidated Balance Sheets outside of equity under the caption “Redeemable non-controlling interest”. As at September 30, 2017, the value of the Redeemable non-controlling interest is $1.1 million and is being accreted to the redemption value of $1.2 million through February 27, 2019. 

(b) eNom, Incorporated

On January 20, 2017, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with its indirect wholly owned subsidiary, Tucows (Emerald), LLC, Rightside Group, Ltd., and Rightside Operating Co., pursuant to which Tucows (Emerald), LLC purchased from Rightside Operating Co. all of the issued and outstanding capital stock of eNom, Incorporated, a domain name registrar business. The acquisition provides Tucows additional scale and efficiency opportunities across its domain registrar operations. The purchase price was $77.8 million, which represented the agreed upon purchase of $83.5 million less an amount of $5.7 million related to the working capital deficiency assessment on acquisition. The purchase price and the majority of the related acquisition costs were financed through borrowings under Facility D of the 2017 Amended Credit Facility agreement (note 7).

On June 13, 2017, the Company entered into a First Amendment to Stock Purchase Agreement (the “Amendment”) by and among the Company, Tucows (Emerald), LLC, Rightside Group, Ltd. And Rightside Operating Co., to amend certain provisions in the Purchase Agreement. Pursuant to the Amendment, the definition of “Escrow Triggering Event” was revised to remove a change in control of the Company and the definition of “Minimum Cash Amount” was revised to mean $5.35 million from June 13, 2017 until the end of April 20, 2018, and zero thereafter.

The Company has prepared a preliminary purchase price allocation of the assets acquired and the liabilities assumed of eNom based on management’s best estimates of fair value. The final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumed liabilities. The preliminary purchase price allocation is pending the finalization of the fair value of taxation-related balances and for potential adjustments to assets and liabilities. We expect to finalize this determination on or before December 31, 2017.

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The following table shows the preliminary allocation of the purchase price for eNom to the acquired identifiable assets and liabilities assumed:

Goodwill	$	66,481,100
Cash		1,594,217
Brand		12,400,000
Developed technology		3,900,000
Customer relationships		28,000,000
Prepaid domain registry fees		70,643,994
Other assets		10,170,789
Total assets		193,190,100
Deferred Revenue		(77,798,994	)
Deferred Tax Liabilities		(21,893,346	)
Other liabilities		(15,666,083	)
Total liabilities		(115,358,423	)
Preliminary consideration paid	$	77,831,677

As required by ASC 805, Business Combinations, the Company has recorded deferred revenue at fair value at the acquisition date, which was determined by estimating the costs associated with customer support services and prepaid domain name registration fees to fulfill the contractual obligations over the remaining life of the contract at the acquisition date plus a normal profit margin.

The goodwill related to this acquisition is primarily attributable to synergies expected to arise from the acquisition and is not tax deductible for tax purposes.

In connection with this acquisition, the Company incurred total acquisition related costs of $0.8 million of which $0.3 million is included in General & Administrative expenses in the Consolidated Statements of Operations for the nine months ended September 30, 2017.

The following table presents selected unaudited pro forma information for the Company assuming the acquisition of eNom had occurred as of January 1, 2016. This pro forma information does not purport to represent what the Company’s actual results would have been if the acquisition had occurred as of the date indicated or what results would be for any future periods.

	Unaudited		Unaudited
	Three months ended Sep 30,		Nine months ended Sep 30,
	2016		2017		2016
Net revenues	$	86,303,327	$	243,262,069	$	252,531,557
Net income		1,760,528		10,755,068		2,776,074
Basic earnings per common share		0.17		1.03		0.27
Diluted earnings per common share	$	0.17	$	1.00	$	0.27

5. Derivative instruments and hedging activities:

Foreign currency forward contracts

In October 2012, the Company entered into a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, rent, Canadian taxes and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. As part of its risk management strategy, the Company uses derivative instruments to hedge a portion of the foreign exchange risk associated with these costs. The Company does not use forward contracts for trading or speculative purposes. These forward contracts typically mature between one and eighteen months.

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The Company has designated certain of these transactions as cash flow hedges of forecasted transactions. For certain contracts, as the critical terms of the hedging instrument and the entire hedged forecasted transaction are the same in accordance with ASC Topic 815, the Company has been able to conclude that changes in fair value and cash flows attributable to the risk of being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, unrealized gains or losses on the effective portion of these contracts have been included within other comprehensive income. The fair value of the contracts, as of September 30, 2017, is recorded as derivative instrument assets and derivative instrument liabilities.

As of September 30, 2017, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $6.9 million, of which $6.2 million were designated as hedges (December 31, 2016 - $26.6 million of which $24.0 million were designated as hedges).

As of September 30, 2017, we had the following outstanding forward exchange contracts to trade U.S. dollars in exchange for Canadian dollars: 

Maturity date	Notional amount of U.S. dollars		Weighted average exchange rate of U.S. dollars		Fair value
October - December 2017		6,859,570		1.3478		559,663
	$	6,859,570		1.3478	$	559,663

Fair value of derivative instruments and effect of derivative instruments on financial performance

The effect of these derivative instruments on our consolidated financial statements were as follows (amounts presented do not include any income tax effects).

Fair value of derivative instruments in the consolidated balance sheets

		As of September 30, 2017		As of December 31, 2016
Derivatives	Balance Sheet Location	Fair Value Asset (Liability)		Fair Value Asset (Liability)
Foreign currency forward contracts designated as cash flow hedges	Derivative instruments	$	505,232	$	155,560
Foreign currency forward contracts not designated as cash flow hedges	Derivative instruments	$	54,431	$	17,823
Total foreign currency forward contracts	Derivative instruments	$	559,663	$	172,888

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Movement in Accumulated Other Comprehensive Income ("AOCI") balance for the three months ended September 30, 2017:

	Gains and losses on cash flow hedges			Tax impact			Total AOCI
Opening AOCI balance – June 30, 2017	$	517,894		$	(187,788	)	$	330,106
Other comprehensive income (loss) before reclassifications		485,480			(176,035	)		309,445
Amount reclassified from accumulated other comprehensive income		(498,142	)		180,626			(317,516	)
Other comprehensive income (loss) for the three months ended September 30, 2017		(12,662	)		4,591			(8,071	)
Ending AOCI balance – September 30, 2017	$	505,232		$	(183,197	)	$	322,035

Movement in Accumulated Other Comprehensive Income ("AOCI") balance for the nine months ended September 30, 2017:

	Gains and losses on cash flow hedges			Tax impact			Total AOCI
Opening AOCI balance – December 31, 2016	$	155,560		$	(56,406	)	$	99,154
Other comprehensive income (loss) before reclassifications		1,001,634			(363,192	)		638,442
Amount reclassified from accumulated other comprehensive income		(651,962	)		236,401			(415,561	)
Other comprehensive income (loss) for the nine months ended September 30, 2017		349,672			(126,791	)		222,881
Ending AOCI balance – September 30, 2017	$	505,232		$	(183,197	)	$	322,035

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Effects of derivative instruments on income and other comprehensive income (OCI) for the three months ended September 30, 2017 and September 30, 2016 are as follows:

Derivatives in Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion)			Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income, (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)
				Operating expenses	$	432,021		Operating expenses	$	—
Foreign currency forward contracts for the three months ended September 30, 2017	$	(8,071	)	Cost of revenues	$	66,121		Cost of revenues		—
				Operating expenses	$	(156,743	)	Operating expenses	$	—
Foreign currency forward contracts for the three months ended September 30, 2016	$	73,091		Cost of revenues	$	(50,210	)	Cost of revenues		—

Effects of derivative instruments on income and other comprehensive income (OCI) for the nine months ended September 30, 2017 and September 30, 2016 are as follows:

Derivatives in Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion)		Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income, (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)
			Operating expenses	$	560,971		Operating expenses	$	—
Foreign currency forward contracts for the nine months ended September 30, 2017	$	222,881	Cost of revenues	$	90,991		Cost of revenues		—
			Operating expenses	$	(617,572	)	Operating expenses	$	(47,242	)
Foreign currency forward contracts for the nine months ended September 30, 2016	$	1,063,242	Cost of revenues	$	(193,102	)	Cost of revenues		—

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In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company has recorded a gain of $55,128 upon settlement and a loss of $1,053 for the change in fair value of outstanding contracts for the three months ended September 30, 2017, in the consolidated statement of operations and comprehensive income. The Company has recorded a loss of $39,401 upon settlement and a gain of $20,113 for the change in fair value of the foreign currency forward contracts not designated as hedges for the three months ended September 30, 2016, in the consolidated statement of operations and comprehensive income.

The Company has recorded a gain of $78,173 upon settlement and a gain of $37,103 for the change in fair value of outstanding contracts for the nine months ended September 30, 2017, in the consolidated statement of operations and comprehensive income. The Company has recorded a loss of $0.1 million upon settlement and a gain of $0.3 million for the change in fair value of the foreign currency forward contracts not designated as hedges for the nine months ended September 30, 2016, in the consolidated statement of operations and comprehensive income.

6. Goodwill and Other Intangible Assets:

Goodwill

Goodwill represents the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired and liabilities assumed in our acquisitions.

The Company's Goodwill balance is $87.5 million as of September 30, 2017, up $66.5 million from December 31, 2016, as a result of the acquisition of eNom (note 4(b)). The Company's goodwill relates 98% ($85.4 million) to its Domain Services operating segment and 2% ($2.1 million) to its Network Access Services operating segment.

Goodwill is not amortized, but is subject to an impairment evaluation annually, or more frequently if impairment indicators are present.

Other Intangible Assets:

Intangible assets consist of network rights, brand, customer relationships, surname domain names and our portfolio of domain names. As reflected in the table below, these balances are being amortized on a straight-line basis over the estimated useful life of the intangible assets, except for the surname domain names and direct navigation domain names, which have been determined to have an indefinite life and which are evaluated at least annually for impairment.

With regard to indefinite life intangible assets, as part of our normal renewal process we assessed that certain domain names that were acquired in the June 2006 acquisition of Mailbank.com Inc. and that were up for renewal should not be renewed. For the three and nine months ended September 30, 2017, domain names with a book value of $1,500 were not renewed, respectively, as compared to domain names with a book value of $2,866 and $27,745 were not renewed for the three and nine months ended September 30, 2016, respectively. 

On January 20, 2017, the Company acquired eNom, a wholesale and retail domain registrar.  The Company acquired the assets and liabilities of eNom including wholesale and retail brands, proprietary technology and the existing customer relationships. The Company has accounted for these on a fair value basis and each intangible asset is being amortized over the estimated useful life.  The amortization for the brands, technology and customer relationships are 7, 2 and 7 years, respectively. See note 4(b) for further details. 

On September 19, 2017, the Company acquired the consumer related assets of Otono, Networks Inc. for consideration of $2.3 million and assumed working capital liabilities of $1.4 million. The intangible assets acquired relate to customer relationships and are being amortized on a straight line basis over a period of 7 years.

A summary of acquired intangible assets for the three months ended September 30, 2017 is as follows:

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			4 - 7 years			2 years			15 years
Balances June 30, 2017	$	11,291,003		$	1,856,542		$	11,693,810		$	31,919,024		$	3,087,500		$	584,288		$	60,432,167
Acquisition of consumer related assets of Otono Networks, Inc.		-			-			-			2,294,111			-			-			2,294,111
Acquisition of customer relationships		-			-			-			90,187			-			-			90,187
Additions to/(disposals from) domain portfolio, net		(1,623	)		(7,774	)		-			-			-			-			(9,397	)
Amortization expense		-			-			(450,510	)		(1,295,413	)		(487,500	)		(11,532	)		(2,244,955	)
Balances September 30, 2017	$	11,289,380		$	1,848,768		$	11,243,300		$	33,007,909		$	2,600,000		$	572,756		$	60,562,113

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A summary of acquired intangible assets for the nine months ended September 30, 2017 is as follows:

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			4 - 7 years			2 years			15 years
Balances December 31, 2016	$	11,295,221		$	1,869,088		$	5,210		$	6,198,811		$	-		$	605,463		$	19,973,793
Reclassifications		-			-			43,620			(45,509	)		-			1,889			-
Acquisition of Enom (note 4(b))		-			-			12,400,000			28,000,000			3,900,000			-			44,300,000
Acquisition of consumer related assets of Otono Networks, Inc.		-			-			-			2,294,111			-			-			2,294,111
Acquisition of customer relationships		-			-			-			90,187			-			-			90,187
Additions to/(disposals from) domain portfolio, net		(5,841	)		(20,320	)		-			-			-			-			(26,161	)
Amortization expense		-			-			(1,205,530	)		(3,529,691	)		(1,300,000	)		(34,596	)		(6,069,817	)
Balances September 30, 2017	$	11,289,380		$	1,848,768		$	11,243,300		$	33,007,909		$	2,600,000		$	572,756		$	60,562,113

The following table shows the estimated amortization expense in future periods, assuming no further additions to acquired intangible assets are made:

	Year ending December 31,
Remainder of 2017	$	2,168,927
2018		9,166,244
2019		7,255,196
2020		7,092,696
2021		7,092,696
Thereafter		14,648,206
Total	$	47,423,965

As of September 30, 2017, the accumulated amortization for the definite life intangible assets was $13.0 million.

7. Loan payable:

2017 Amended Credit Facility

On January 20, 2017, the Company entered into an amended and restated secured Credit Agreement (the “2017 Amended Credit Agreement”) with Bank of Montreal (“BMO” or the “Administrative Agent”), Royal Bank of Canada and Bank of Nova Scotia (collectively with “Lenders”) under which the Company increased its access to funds to an aggregate of $140 million. This amendment and restatement to the Company’s 2016 Credit Facility (defined below), among other things, reduced the existing Tucows non-revolving facility (such existing non-revolving facility, together with other existing facilities, the “Existing Facilities”) from $40.0 million to $35.5 million, and established a new non-revolving credit facility of $84.5 million(the “Facility D”). The Company immediately drew down $84.5 million under Facility D to fund the acquisition of eNom (note 4(b)). As used herein, the “2016 Credit Facility” refers to the credit facility established under the Company’s secured credit agreement (the “2016 Credit Agreement”) among the Company, BMO and the Lenders, dated as of August 18, 2016.

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In connection with the 2017 Amended Credit Agreement, the Company incurred $0.6 million of fees paid to lenders and debt issuance costs, which have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the credit facility agreement.

The obligations of the Company under the 2017 Amended Credit Facility are secured by a first priority lien on substantially all of the personal property and assets of the Company.

The 2017 Amended Credit Facility has a four-year term. Under the 2017 Amended Credit Facility, the Company has access to an aggregate of up to $140 million in funds that are available as follows:

● a $5 million revolving credit facility (“Facility A”);

● a $15 million revolving reducing term facility (“Facility B”);

● a $35.5 million non-revolving facility (“Facility C”); and

● a $84.5 million non-revolving facility (“Facility D”).

Borrowings under the 2017 Amended Credit Facility accrue interest and standby fees at variable rates based on borrowing elections by the Company and the Company’s Total Funded Debt to EBITDA as described below. The purpose of Facility A is for general working capital and general corporate requirements, while Facility B and Facility C support share repurchases, acquisitions and capital expenditures associated with the Company’s Fiber to the Home program (“FTTH”). Facility D was provided and used for the acquisition of eNom.

The repayment terms for Facility A require monthly interest payments with any final principal payment becoming due upon maturity of the 2017 Amended Credit Facility. Under the repayment terms for Facility B, at December 31st of each year, balances drawn during the year that remain outstanding will become payable on a quarterly basis commencing the first quarter of the following year, for the period of amortization based on the purpose of the draw. For Facilities C and D, each draw will become payable beginning the first full quarter post initial draw for the period of amortization based on the purpose of the draw. The amortization periods for Facilities B, C and D are based on the purposes of the draws as follows: draws for share repurchases are repaid over four years, draws for acquisitions over five years and draws for FTTH capital expenditures over seven years. The 2017 Amended Credit Facility also includes a mechanism that is triggered based on the Company’s Total Funded Debt to EBITDA calculation at the end of each fiscal year. If Total Funded Debt to EBITDA exceeds 2.25:1 at December 31 of each year during the term, the Company is obligated to make a repayment of 50% of Excess Cash Flow as defined under the agreement.

The 2017 Amended Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The 2017 Amended Credit Facility requires that the Company to comply with the following financial covenants at all times, which are to be calculated on a rolling four quarter basis: (i) maximum Total Funded Debt to EBITDA Ratio of 3.00:1 until September 30, 2017, 2.50:1 until September 30, 2018 and 2.25:1 thereafter; and (ii) minimum Fixed Charge Coverage Ratio of 1.20:1. Further, the Company’s maximum annual Capital Expenditures cannot exceed $32.8 million per year, which limit will be reviewed on an annual basis. In addition, funded share repurchases are not to exceed $20 million, or up to $40 million so long as the total loans related to share repurchases do not exceed 1.5 times of trailing twelve months EBITDA. As at and for the period ending September 30, 2017, the Company was in compliance with these covenants.

On June 6, 2017, the Company entered into the First Amendment to First Amended and Restated Credit Agreement (the “First Amendment”) with BMO and the Lenders. Among other things, the First Amendment (i) increases the amount available for borrowing under “Facility C,” a committed, non-revolving credit facility by $502,500, which was the portion of Facility D which was not used by the Company to fund its acquisition of eNom, Incorporated and was cancelled in accordance with the Credit Agreement, (ii) allows the Company to maintain bank accounts with Commonwealth Bank of Australia, subject to certain restrictions, (iii) provides for an extension of time for the Company to transfer its bank accounts from Silicon Valley Bank, and (iv) amends the definition of “EBITDA” to provide for an add-back in respect of certain liabilities.

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Borrowings under the 2017 Amended Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to EBITDA ratio and the availment type as follows:

	If Total Funded Debt to EBITDA is:
Availment type or fee	Less than 1.00			Greater than or equal to 1.00 and less than 2.00			Greater than or equal to 2.00 and less than 2.25			Greater than or equal to 2.25
Canadian dollar borrowings based on Bankers’ Acceptance or U.S. dollar borrowings based on LIBOR (Margin)		2.00	%		2.25	%		2.75	%		3.25	%
Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowings based on Base Rate (Margin)		0.75	%		1.00	%		1.50	%		2.00	%
Standby fees		0.40	%		0.45	%		0.55	%		0.65	%

The following table summarizes the Company’s borrowings under the 2017 Amended Credit Facility as at September 30, 2017:

	September 30, 2017			December 31, 2016
Facility B	$	-		$	6,000,000
Facility C		6,277,902			4,731,306
Facility D		76,048,200			-
Less: unamortized debt discount and issuance costs		(899,020	)		(482,498	)
Total loan payable		81,427,082			10,248,808
Less: loan payable, current portion		18,289,853			2,233,110
Loan payable, long-term portion	$	63,137,229		$	8,015,698

The following table summarizes our scheduled principal repayments as of September 30, 2017:

Principal repayments
Remainder of 2017	$	4,572,463
2018		18,289,853
2019		18,289,853
2020		18,103,004
2021		17,542,457
Thereafter		5,528,472
	$	82,326,102

Other Credit Facilities

Prior to the Company entering into the 2016 Credit Facility, the Company had credit agreements (collectively the “Amended Credit Facility”) with BMO that were amended on November 19, 2012, and which provided it with access to two revolving demand loan facilities (the “2012 Demand Loan Facilities”), a treasury risk management facility, an operating demand loan and a credit card facility. In connection with the 2016 Credit Facility, the Company repaid its outstanding indebtedness of the 2012 Demand Loan Facilities. With the settlement of the outstanding indebtedness, the 2012 Demand Loan Facilities and the operating demand loan were simultaneously terminated and the outstanding balances were fully repaid through advances on the 2016 Credit Facility. The Company continues to have access to the treasury risk management facility and credit card facility.

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The treasury risk management facility under the Amended Credit Facility provides for a $3.5 million settlement risk line to assist the Company with hedging Canadian dollar exposure through foreign exchange forward contracts and/or currency options. Under the terms of the Amended Credit Facility, the Company may enter into such agreements at market rates with terms not to exceed 18 months. As of September 30, 2017, the Company held contracts in the amount of $6.9 million to trade U.S. dollars in exchange for Canadian dollars (note 5).

During the third quarter of 2017, the Company entered into a corporate credit card program with the Bank of Nova with credit limits of $1.0 million for US Dollar credit cards and CDN$0.5 million for Canadian Dollar credit cards.

8. Income taxes

For the three months ended September 30, 2017, we recorded an income tax expense of $1.8 million on income before income taxes of $5.3 million, using an estimated effective tax rate for the fiscal year ending December 31, 2017 (“Fiscal 2017”) adjusted for certain minimum state taxes as well as the inclusion of a $0.4 million tax recovery related to the adoption of ASU 2016-09, which requires all excess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense on a prospective basis. Comparatively, for the three months ended September 30, 2016, the Company recorded a provision for income taxes of $2.5 million on income before taxes of $7.2 million, using an estimated effective tax rate for the 2016 fiscal year.

For the nine months ended September 30, 2017, we recorded an income tax expense of $2.8 million on income before income taxes of $13.9 million, using an estimated effective tax rate for Fiscal 2017 adjusted for certain minimum state taxes as well as the inclusion of a $2.6 million tax recovery related to the adoption of ASU 2016-09, which requires all excess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense on a prospective basis. Comparatively, for the nine months ended September 30, 2016, the Company recorded a provision for income taxes of $6.5 million on income before taxes of $19.7 million, using an estimated effective tax rate for the 2016 fiscal year.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. The Company considers projected future taxable income, uncertainties related to the industry in which we operate, and tax planning strategies in making this assessment.

On January 20, 2017, the Company acquired eNom and as part of the acquisition, the Company assumed $21.9 million of deferred tax liabilities (note 4 (b)). 

The Company follows the provisions of FASB ASC Topic 740, Income Taxes to account for income tax exposures. The application of this interpretation requires a two-step process that separates recognition of uncertain tax benefits from measurement thereof.

The Company had nil gross unrecognized tax benefit as of September 30, 2017 and approximately $0.1 million as of December 31, 2016. During the nine months ended September 30, 2017, the Company settled the outstanding tax matter relating to prior Pennsylvania state franchise taxes under the state’s tax amnesty program.

The Company recognizes accrued interest and penalties related to income taxes in income tax expense. The Company did not have significant interest and penalties accrued at September 30, 2017 and December 31, 2016, respectively.

9. Basic and diluted earnings per common share:

Basic earnings per common share has been calculated by dividing net income for the period by the weighted average number of common shares outstanding during each period. Diluted earnings per share has been calculated by dividing net income for the period by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In computing diluted earnings per share, the treasury stock method is used to determine the number of shares assumed to be purchased from the conversion of common share equivalents or the proceeds of option exercises.

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The following table is a summary of the basic and diluted earnings per common share:

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Numerator for basic and diluted earnings per common share:
Net income for the period	$	3,439,266	$	4,741,279	$	11,127,241	$	13,250,303
Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding		10,564,311		10,432,763		10,522,841		10,549,056
Effect of outstanding stock options		221,031		186,242		262,209		187,719
Diluted weighted average number of shares outstanding		10,785,342		10,619,005		10,785,050		10,736,775
Basic earnings per common share	$	0.33	$	0.45	$	1.06	$	1.26
Diluted earnings per common share	$	0.32	$	0.45	$	1.03	$	1.23

For the three months ended September 30, 2017, outstanding options to purchase 345,200 common shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares (three months ended September 30, 2016 – 76,750).

For the nine months ended September 30, 2017, outstanding options to purchase 349,700 common shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares (nine months ended September 30, 2016 – 95,950).

During the three and nine months ended September 30, 2017, no common shares were repurchased and cancelled under the terms of our stock repurchase program announced in March 2017.

During the three months ended September 30, 2016, no common shares were repurchased and for the nine months ended September 30, 2016, 308,416 common shares were repurchased and cancelled under the terms of our stock repurchase program announced in February 2016.

The computation of earnings per share and diluted earnings per share for the three and nine months ended September 30, 2017 and 2016 include reductions in the number of shares outstanding due to these repurchases.

10. 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 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 10-K for the fiscal year ended December 31, 2016.

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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 September 30, 2017
Net Revenues	$	22,993,034	$	62,015,450	$	85,008,484
Cost of revenues
Cost of revenues		13,310,922		47,755,839		61,066,761
Network expenses		446,126		2,014,570		2,460,696
Depreciation of property and equipment		578,257		245,184		823,441
Amortization of intangible assets		11,532		487,500		499,032
Total cost of revenues		14,346,837		50,503,093		64,849,930
Gross Profit		8,646,197		11,512,357		20,158,554
Expenses:
Sales and marketing						7,578,414
Technical operations and development						1,910,147
General and administrative						2,852,345
Depreciation of property and equipment						154,638
Amortization of intangible assets						1,745,923
Impairment of indefinite life intangible assets						1,500
Loss (gain) on currency forward contracts						(54,075	)
Income from operations						5,969,662
Other income (expenses), net						(707,029	)
Income before provision for income taxes					$	5,262,633

	Network Access		Domain Name Services		Consolidated Totals
Three months ended September 30, 2016
Net Revenues	$	19,253,063	$	29,811,264	$	49,064,327
Cost of revenues
Cost of revenues		9,589,183		21,257,485		30,846,668
Network expenses		507,128		780,492		1,287,620
Depreciation of property and equipment		258,042		20,704		278,746
Amortization of intangible assets		13,421		-		13,421
Total cost of revenues		10,367,774		22,058,681		32,426,455
Gross Profit		8,885,289		7,752,583		16,637,872
Expenses:
Sales and marketing						5,479,445
Technical operations and development						1,270,107
General and administrative						2,166,217
Depreciation of property and equipment						178,687
Amortization of intangible assets						279,126
Impairment of indefinite life intangible assets						2,866
Loss (gain) on currency forward contracts						22,475
Income from operations						7,238,949
Other income (expenses), net						(5,021	)
Income before provision for income taxes					$	7,233,928

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	Network Access		Domain Name Services		Consolidated Totals
Nine months ended September 30, 2017
Net Revenues	$	63,559,792	$	175,240,055	$	238,799,847
Cost of revenues
Cost of revenues		35,389,553		134,433,264		169,822,817
Network expenses		1,397,832		5,666,626		7,064,458
Depreciation of property and equipment		1,494,299		634,118		2,128,417
Amortization of intangible assets		34,596		1,300,000		1,334,596
Total cost of revenues		38,316,280		142,034,008		180,350,288
Gross Profit		25,243,512		33,206,047		58,449,559
Expenses:
Sales and marketing						22,244,961
Technical operations and development						5,402,385
General and administrative						9,596,298
Depreciation of property and equipment						485,648
Amortization of intangible assets						4,735,221
Impairment of indefinite life intangible assets						1,500
Loss (gain) on currency forward contracts						(115,276	)
Income from operations						16,098,822
Other income (expenses), net						(2,190,673	)
Income before provision for income taxes					$	13,908,149

	Network Access		Domain Name Services		Consolidated Totals
Nine months ended September 30, 2016
Net Revenues	$	55,020,436	$	85,993,893	$	141,014,329
Cost of revenues
Cost of revenues		28,386,395		61,059,098		89,445,493
Network expenses		941,451		2,983,926		3,925,377
Depreciation of property and equipment		655,104		321,315		976,419
Amortization of intangible assets		36,485		-		36,485
Total cost of revenues		30,019,435		64,364,339		94,383,774
Gross Profit		25,001,001		21,629,554		46,630,555
Expenses:
Sales and marketing						15,174,619
Technical operations and development						3,445,118
General and administrative						7,497,752
Depreciation of property and equipment						328,877
Amortization of intangible assets						613,041
Impairment of indefinite life intangible assets						27,745
Loss (gain) on currency forward contracts						(96,993	)
Income from operations						19,640,396
Other income (expenses), net						85,919
Income before provision for income taxes					$	19,726,315

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

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Network Access Services:
Mobile Services	$	21,748,809	$	18,374,906	$	60,090,266	$	52,287,808
Other Services		1,244,225		878,157		3,469,526		2,732,628
Total Network Access Services		22,993,034		19,253,063		63,559,792		55,020,436
Domain Services:
Wholesale
Domain Services		47,769,779		22,955,731		135,411,688		65,879,375
Value Added Services		4,401,704		2,226,977		14,034,456		6,834,086
Total Wholesale		52,171,483		25,182,708		149,446,144		72,713,461
Retail		8,872,984		3,721,032		22,937,606		10,747,456
Portfolio		970,983		907,524		2,856,305		2,532,976
Total Domain Services		62,015,450		29,811,264		175,240,055		85,993,893
	$	85,008,484	$	49,064,327	$	238,799,847	$	141,014,329

During the three and nine months ended September 30, 2017 and 2016, no customer accounted for more than 10% of total revenue. As at September 30, 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 September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Network Access Services:
Mobile Services	$	12,365,383	$	9,087,274	$	32,634,348	$	27,026,242
Other Services		945,539		501,909		2,755,205		1,360,153
Total Network Access Services		13,310,922		9,589,183		35,389,553		28,386,395
Domain Services:
Wholesale
Domain Services		42,294,131		18,934,555		119,206,649		54,215,215
Value Added Services		671,291		463,369		1,823,711		1,401,821
Total Wholesale		42,965,422		19,397,924		121,030,360		55,617,036
Retail		4,610,745		1,727,867		12,775,941		4,968,659
Portfolio		179,672		131,694		626,963		473,403
Total Domain Services		47,755,839		21,257,485		134,433,264		61,059,098
Network Expenses:
Network, other costs		2,460,696		1,287,620		7,064,458		3,925,377
Network, depreciation and amortization costs		1,322,473		292,167		3,463,013		1,012,904
		3,783,169		1,579,787		10,527,471		4,938,281
	$	64,849,930	$	32,426,455	$	180,350,288	$	94,383,774

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

	September 30, 2017		December 31, 2016
Canada	$	1,169,409	$	1,010,427
United States		21,036,074		12,398,961
Germany		27,387		41,050
	$	22,232,870	$	13,450,438

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

	September 30, 2017		December 31, 2016
Canada	$	7,522,264	$	5,850,596
United States		39,730,601		633,798
Germany		171,100		325,090
	$	47,423,965	$	6,809,484

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

	September 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
Nine months ended September 30, 2017	$	164,145	$	3,741	$	-	$	167,886
Year ended December 31, 2016	$	122,095	$	42,050	$	-	$	164,145

11. Commitments and contingencies:

The Company is involved in various legal claims and lawsuits in connection with its ordinary business operations. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions or claims outstanding or pending as of September 30, 2017 cannot be predicted with certainty, management does not believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company's financial position.

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12. Stockholders’ Equity:

The following unaudited table summarizes stockholders' equity transactions for the three-month period ended September 30, 2017: 

												Accumulated
						Additional			Retained			other			Total
				Common stock		paid in			earnings			comprehensive			stockholders'
	Number			Amount		capital			(deficit)			income (loss)			equity
Balances, June 30, 2017		10,552,401		$	15,125,326	$	1,607,476		$	28,062,438		$	330,106		$	45,125,346
Exercise of stock options		30,051			159,307		(91,241	)		-			-			68,066
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration		(4,903	)				(116,956	)		-			-			(116,956	)
Stock-based compensation (note 13)		-			-		202,902			-			-			202,902
Net income		-			-		-			3,439,266			-			3,439,266
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.		-			-		-			(12,600	)		-			(12,600	)
Other comprehensive income (loss)		-			-		-			-			(8,071	)		(8,071	)
Balances, September 30, 2017		10,577,549		$	15,284,633	$	1,602,181		$	31,489,104		$	322,035		$	48,697,953

The following unaudited table summarizes stockholders' equity transactions for the nine-month period ended September 30, 2017: 

												Accumulated
						Additional			Retained			other		Total
				Common stock		paid in			earnings			comprehensive		stockholders'
	Number			Amount		capital			(deficit)			income (loss)		equity
Balances, December 31, 2016		10,461,574		$	14,460,500	$	2,857,921		$	20,399,511		$	99,154	$	37,817,086
Exercise of stock options		165,673			824,133		(651,230	)		-			-		172,903
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration		(49,698	)		-		(1,438,497	)		-			-		(1,438,497	)
Stock-based compensation (note 13)		-			-		833,987			-			-		833,987
Net income		-			-		-			11,127,241			-		11,127,241
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.		-			-		-			(37,648	)		-		(37,648	)
Other comprehensive income (loss)		-			-		-			-			222,881		222,881
Balances, September 30, 2017		10,577,549		$	15,284,633	$	1,602,181		$	31,489,104		$	322,035	$	48,697,953

On March 1, 2017, the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on March 1, 2017 and will terminate on or before February 28, 2018. During the three and nine months ended September 30, 2017, the Company did not repurchase any shares under this program.

On February 9, 2016, the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 10, 2016 and terminated on February 9, 2017. The Company repurchased 308,416 shares under this program for the nine months ended September 30, 2016 for a total of $7.2 million.

On February 11, 2015, the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to $20 million of its common stock in the open market. Purchases were made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 16, 2015 and terminated on February 9, 2016. The Company did not repurchase any shares under this program during the nine months ended September 30, 2016.

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13. Share-based payments

(a)    Stock options

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, consistent with the guidance on stock compensation. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatility of the Company's common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of our common shares at the date of grant.

Details of stock option transactions for the three months ended September 30, 2017 and September 30, 2016 are as follows:

	Three months ended September 30,					Three months ended September 30,
	2017					2016
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		363,608		$	16.79		502,590		$	11.30
Granted		327,150			55.49		18,750			27.53
Exercised		(30,051	)		6.67		(31,065	)		38.00
Forfeited		(1,050	)		51.87		-			-
Expired		-			-		-			-
Outstanding, end of period		659,657			36.39		490,275			12.39
Options exercisable, end of period		223,043		$	14.30		306,553		$	9.16

Details of stock option transactions for the nine months ended September 30, 2017 and September 30, 2016 are as follows:

	Nine months ended September 30,					Nine months ended September 30,
	2017					2016
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		474,501		$	12.67		513,366		$	9.24
Granted		360,025			54.13		81,750			22.66
Exercised		(165,673	)		7.79		(94,602	)		3.75
Forfeited		(9,196	)		22.08		(9,489	)		17.23
Expired		-			-		(750	)		3.76
Outstanding, end of period		659,657			36.39		490,275			12.39
Options exercisable, end of period		223,043		$	14.30		306,553		$	9.16

As of September 30, 2017, the exercise prices, weighted average remaining contractual life and intrinsic values of outstanding options were as follows:

			Options outstanding								Options exercisable
Exercise price			Number outstanding		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value		Number exercisable		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value
$ 2.92	-	$ 8.92		96,644	$	6.72		1.9	$	5,008,805		96,644	$	6.72		1.9	$	5,008,805
$10.16	-	$19.95		122,938		16.29		3.7		5,195,152		76,399		15.99		3.5		3,251,248
$21.10	-	$27.53		81,000		23.65		4.4		2,826,893		45,000		25.39		3.7		1,492,313
$35.25	-	$37.35		14,375		35.89		5.7		325,750		5,000		35.25		6.2		116,500
$43.15	-	$47.00		18,500		44.19		6.3		265,650		-		-		-		-
$53.55	-	$55.65		326,200		55.49		6.7		998,480		-		-		-		-
				659,657	$	36.39		5.1	$	14,620,730		223,043	$	14.30		2.9	$	9,868,866

Total unrecognized compensation cost relating to unvested stock options at September 30, 2017 was approximately $7.0 million and is expected to be recognized over a weighted average period of 3.1 years.

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The Company recorded stock-based compensation of $0.2 million and $0.8 million for the three and nine months ended September 30, 2017 and $0.2 million and $0.6 million for the three and nine months ended September 30, 2016, respectively.

The Company has not capitalized any stock-based compensation expense as part of the cost of an asset.

14. Fair value measurement

ASC Topic 820, “Fair Value Measurements and Disclosures” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides a summary of the fair values of the Company's derivative instrument assets and liabilities measured at fair value on a recurring basis at September 30, 2017:

	September 30, 2017
	Fair Value Measurement Using						Assets (Liabilities)
	Level 1		Level 2		Level 3		at Fair value
Derivative instrument asset	$	-	$	559,663	$	-	$	559,663

The following table provides a summary of the fair values of the Company's derivative instrument assets measured at fair value on a recurring basis as at December 31, 2016:

	December 31, 2016
	Fair Value Measurement Using						Assets (Liabilities)
	Level 1		Level 2		Level 3		at Fair value
Derivative instrument asset	$	-	$	172,888	$	-	$	172,888

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accreditation fees payable, customer deposits, loan payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of the instruments.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains, in addition to historical information, forward-looking statements by us with regard to our expectations as to financial results and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect” and “intend,” and other similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among other things, the competition we expect to encounter as our business develops and competes in a broader range of Internet services, our expectation regarding the acquisition of eNom, the Company's foreign currency requirements, specifically for the Canadian dollar; Ting mobile and fixed Internet access subscriber growth and retention rates; our belief regarding the underlying platform for our domain services, our expectation regarding the trend of sales of domain names and advertising; our belief that, by increasing the number of services we offer, we will be able to generate higher revenues; the revenue that our parked page vendor relationships may generate in the future; our expectation regarding litigation; the potential impact of current and pending claims on our business; our valuations of certain deferred tax assets; our expectation to collect our outstanding receivables, net of our allowance for doubtful accounts; our expectation regarding fluctuations in certain expense and cost categories; our expectations regarding our unrecognized tax; our expectations regarding cash from operations to fund our business; the impact of cancellations of or amendments to market development fund programs under which we receive funds, our expectation regarding our ability to manage realized gains/losses from foreign currency contracts; and general business conditions and economic uncertainty. These statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Many factors affect our ability to achieve our objectives and to successfully develop and commercialize our services including:

• Changes in the nature of key strategic relationships with our Mobile Virtual Network Operator ("MVNO") partners;

• The effects of vigorous competition on a highly penetrated mobile telephony market, including the impact of competition on the price we are able to charge subscribers for services and devices and on the geographic areas served by our MVNO partner wireless networks;

• Our ability to manage any potential increase in subscriber churn or bad debt expense;

• Our ability to continue to generate sufficient working capital to meet our operating requirements;

• Our ability to maintain a good working relationship with our vendors and customers;

• The ability of vendors to continue to supply our needs;

• Actions by our competitors;

• Our ability to attract and retain qualified personnel in our business;

• Our ability to effectively manage our business;

• The effects of any material impairment of our goodwill or other indefinite-lived intangible assets;

• Our ability to obtain and maintain approvals from regulatory authorities on regulatory issues;

• Our ability to invest in the build-out of fiber networks into selected towns and cities to provide Internet access services to residential and commercial customers while maintaining the development and sales of our established services;

• Our ability to effectively integrate acquisitions, including the acquisition of eNom in January 2017;

• Our ability to service our debt, including interest payments and scheduled principal repayments;

• Pending or new litigation; and

• Factors set forth herein under the caption “Item 1A Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

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This list of factors that may affect our future performance and financial and competitive position and also the accuracy of forward-looking statements is illustrative, but it is by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-looking statements included in this document are based on information available to us as of the date of this document, and we assume no obligation to update these cautionary statements or any forward-looking statements except to the extent of any obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or the Securities Act of 1933, as amended. These statements are not guarantees of future performance.

We qualify all the forward-looking statements contained in this Quarterly Report on Form 10-Q by the foregoing cautionary statements.

OVERVIEW

Our mission is to provide simple useful services that help people unlock the power of the Internet. We accomplish this by reducing the complexity our customers’ experience as they access the Internet (at home or on the go) or Internet services such as domain name registration, email, mobile telephony services and other Internet services. We are organized and managed based on two segments, Network Access Services and Domain Services, which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate.

Our principal place of business is located in Canada. Our Network Access Services segment primarily derives revenue from the sale of retail mobile phones, telephony services and high-speed Internet access to individuals and small businesses, and our Domain Services segment derives revenue from three distinct service offerings – Wholesale, Retail and Portfolio. To assist us in forecasting growth and to help us monitor the effectiveness of our operational strategies, our management regularly reviews revenue and cost of revenues for each of our segments in order to gain more depth and understanding of the key business metrics driving our business.

On January 20, 2017, we completed the acquisition of eNom, a domain registrar business. For more information on this acquisition, see note 4(b) to the unaudited interim financial statements included in this report.

For the three months ended September 30, 2017 and September 30, 2016, we reported revenue of $85.0 million and $49.1 million, respectively. 

For the nine months ended September 30, 2017 and September 30, 2016, we reported revenue of $238.8 million and $141.0 million, respectively. 

Network Access Services

Network Access Services includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services.

Our mobile services are primarily distributed through the Ting website and to a lesser extent certain third-party retail stores and on-line retailers. We generate revenues from the sale of retail telephony services, mobile phone hardware and related accessories (“Ting Mobile”) to individuals and small businesses through the Ting website. Ting Mobile’s primary focus is providing simple and easy to use services, including simple value pricing, in particular for multi-line accounts, and superior customer care. On September 19, 2017, the Company acquired the consumer related assets of Otono, Networks Inc. The consumer assets relate to the mobile roaming and instant activation eSIM business under the Roam Mobility, Zipsim and Always Online Wireless brands. The acquired portfolio operates as a MVNO on the same nationwide GSM network as Ting Mobile and distributes through third-party retail stores and product branded websites.

The Company also derives revenue from the sale of fixed high-speed Internet access (“Ting Internet”) in select towns including Holly Springs, North Carolina, Westminster, Maryland; and Charlottesville, Virginia. Our primary sales channel of Ting Internet is through the Ting website. The primary focus of Ting Internet is to provide reliable Gigabit Internet services to consumer and business customers. We also derive revenue from providing Internet hosting and network consulting services to business customers in Central Virginia through our acquisition of a 70% share in Ting Virginia, LLC on February 27, 2015, which was increased to a 90% interest in February, 2017.  

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Revenues from Ting Mobile and Ting Internet are generated in the United States and are provided on a monthly basis with no fixed contract term.

As of September 30, 2017, Ting managed mobile telephony services for approximately 171,000 subscribers and had approximately 281,000 devices under management. For a discussion of the subscribers and devices under management and how they impacted our financial results, see the Net Revenue discussion below.

Domain Services

Domain Services include wholesale and retail domain name registration services, value added services and portfolio services derived through our OpenSRS, eNom and YummyNames brands We earn revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses; and by making our 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.

Our primary distribution channel is a global network of approximately 39,000 resellers that operate in over 150 countries and who typically provide their customers, the end-users of Internet-based services, with solutions for establishing and maintaining an online presence. The increase in our reseller network during the year from 13,000 resellers resulted from our acquisition of eNom in January 2017. Our primary focus is serving the needs of this network of resellers by providing the broadest portfolio of gTLD and ccTLD options and related services, a white-label platform that facilitates the provisioning and management of domain names, a powerful Application Program Interface (API), easy-to-use interfaces, comprehensive management and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to their customers. We provide “second tier” support to our resellers by email, chat and phone in the event resellers experience issues or problems with our services. In addition, our Network Operating Center proactively monitors all services and network infrastructure to address deficiencies before customer services are impacted.

We believe that the underlying platforms for our services are among the most mature, reliable and functional reseller-oriented provisioning and management platforms in our industry, and we continue to refine, evolve and improve these services for both resellers and end-users. Our business model is characterized primarily by non-refundable, up-front payments, which lead to recurring revenue and positive operating cash flow.

Wholesale, primarily branded as OpenSRS and eNom, derives revenue from its Domain Service and from providing Value-Added Services. The OpenSRS and eNom Domain Services manage 28 million domain names under the Tucows and eNom ICANN registrar accreditations and for other registrars under their own accreditations. Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, publishing tools and other value-added services. All of these services are made available to end-users through a network of 39,000 web hosts, Internet service providers (“ISPs”), and other resellers around the world. In addition, we also derive revenue by monetizing domain names which are near the end of their lifecycle through advertising revenue or auction sale.

Retail, primarily the Hover and eNom portfolio of websites, including eNom, eNom Central and Bulkregister, derive revenues from the sale of domain name registration and email services to individuals and small businesses. Retail also includes our Personal Names Service – based on over 36,000 surname domains – that allows roughly two-thirds of Americans to purchase an email address based on their last name.

Portfolio generates revenue by offering names in our domain portfolio for resale through a number of distribution channels, and our reseller network. We also generate advertising revenue from our portfolio.

KEY BUSINESS METRICS

We regularly review a number of business metrics, including the following key metrics, to assist us in evaluating our business, measure the performance of our business model, identify trends impacting our business, determine resource allocations, manage our operational cash flow, formulate financial projections and make strategic business decisions. The following are key business metrics:

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Adjusted EBITDA

Tucows reports all financial information in accordance with United States generally accepted accounting principles (GAAP). Along with this information, to assist financial statement users in an assessment of our historical performance, we typically disclose and discuss a non-GAAP financial measure, adjusted EBITDA, on investor conference calls and related events that exclude certain non-cash and other charges as we believe that the non-GAAP information enhances investors' overall understanding of our financial performance. For additional information regarding adjusted EBITDA, see “—Results of Operations for the Three and Nine Months Ended September 30, 2017 as Compared to the Three and Nine Months Ended September 30, 2016 — Adjusted EBITDA.”

Network Access Services

	September 30,
		2017 (1)	2016 (1)
Ting mobile subscribers under management		171,000	147,000
Ting mobile devices under management		281,000	235,000

(1) For a discussion of these period to period changes in subscribers and devices under management and how they impacted our financial results, see the Net Revenue discussion below.

Domain Services

Total new, renewed and transferred-in domain name registrations:

	Three months ended September 30,				Nine months ended September 30,
	2017 (1)		2016 (1)		2017 (1)		2016 (1)
	(in 000's)				(in 000's)
Total new, renewed and transferred-in domain name registrations		4,864		2,466		14,612		7,491

(1) For a discussion of these period to period changes in the domain names provisioned and how they impacted our financial results, see the Net Revenues discussion below.

Domain names under management:

	September 30,
	2017 (1)		2016 (1)
	(in 000's)
Domain names under management:
Registered using Registrar Accreditation belonging to the Tucows Group		22,708		11,398
Registered using Registrar Accreditations belonging to Resellers		5,597		3,384
Total domain names under management		28,305		14,782

(1) For a discussion of these period to period changes in domain names under management and how they impacted our financial results, see the Net Revenue discussion below.

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OPPORTUNITIES, CHALLENGES AND RISKS

As a MVNO our Ting service is reliant on our Mobile Network Operators ("MNOs") providing competitive networks. Our MNOs each continue to invest in network expansion and modernization to improve their competitive positions. Deployment of new and sophisticated technology on a very large-scale entails risks. Should they fail to implement, maintain and expand their network capacity and coverage, adapt to future changes in technologies and continued access to and deployment of adequate spectrum successfully, our ability to provide wireless services to our subscribers, to retain and attract subscribers and to maintain and grow our subscriber revenues could be adversely affected, which would negatively impact our operating margins.

Ting has also enjoyed rapid growth in its first five years of operation. During this growth phase, we have been able to continue to grow gross customer additions and maintain a consistent churn rate, which has allowed us to maintain net new customer additions despite the impact of churn on a fast-growing customer base. We expect price competition to grow more intense in the industry which could result in increased customer churn or reductions of customer acquisition rates either of which could result in slower growth rates or in certain cases, negatively affect our ability to maintain growth.

The communications industry continues to compete on the basis of network reach and performance, types of services and devices offered, and price.

The increased competition in the market for Internet services in recent years, which we expect will continue to intensify in the short and long term, poses a material risk for us. As new registrars are introduced, existing competitors expand service offerings and competitors offer price discounts to gain market share, we face pricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructure and our ability to provide proactive and attentive customer service to aggressively compete to attract new customers and to maintain existing customers.

Substantially all of our Domain Services revenue is derived from domain name registrations and related value-added services from wholesale and retail customers using our provisioning and management platforms. The market for wholesale registrar services is both price sensitive and competitive and is evolving with the introduction of new gTLDs (generic top-level domains), particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We have a relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base.  We will continue to maintain separate accreditations, branding and support for OpenSRS and eNom and our growth will depend on our ability to continue to attract and retain customers for both brands by maintaining strong domain name registration and value-added service renewal rates and to grow our customer relationships through refining, evolving and improving our provisioning platforms and customer service for both resellers and end-users. In addition, we also generate revenue through pay-per-click advertising and the sale of names from our portfolio of domain names and through the domain expiry streams. The revenue associated with domain sales and advertising has recently experienced flat to declining trends due to the uncertainty around the implementation of ICANN’s New gTLD Program, lower traffic and declining advertising yields in the marketplace, which we expect to continue.

From time-to-time certain of our vendors provide us with market development funds to expand or maintain the market position for their services. Any decision by these vendors to cancel or amend these programs for any reason may result in payments in future periods not being commensurate with what we have achieved during past periods.

Sales of domain names from our domain portfolio has a negative impact on our advertising revenue as these names are no longer available for advertising purposes. In addition, the timing of larger domain name portfolio sales is unpredictable and may lead to significant quarterly and annual fluctuations in our Portfolio revenue.

Our revenue is primarily realized in U.S. dollars and a major portion of our operating expenses are paid in Canadian dollars. Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar may have a material effect on our business, financial condition and results from operations. In particular, we may be adversely affected by a significant weakening of the U.S. dollar against the Canadian dollar on a quarterly and an annual basis. Our policy with respect to foreign currency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreign currency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We may not always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by the contracts may be less advantageous than the market rate upon settlement.

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Net Revenues

Network Access Services

Mobile

We derive revenue from Ting's sale of retail mobile phones and services and provide customers with access to our provisioning and management tools to enable them, via the ting.com website, to purchase retail mobile phones and services nationally. Revenues are generated in the United States with a fixed access line charge per device and variable charges based on actual voice, data and text usage. Services are provided on a monthly basis with no fixed contract term.

Other Services

Other services derive revenues from providing fixed high-speed internet access to individuals and small businesses in select U.S. cities including Holly Springs, Westminster, Maryland and Charlottesville, Virginia along with Internet hosting and network consulting services to customers in Charlottesville, Virginia. Ting provides customers with access to our provisioning and management tools to enable them, via the ting.com website, to purchase our fixed Internet access services. Revenues are generated from fixed monthly access charges with a primary focus on the 1 GB unlimited data usage package. Services are provided on a monthly basis with no fixed contract term.

Domain Services

Wholesale - OpenSRS Domain Service

Historically, our wholesale OpenSRS Domain Service has constituted the largest portion of our business and encompasses all of our services as an accredited registrar related to the registration, renewal, transfer and management of domain names. In addition, this service fuels other revenue categories as it often is the initial service for which a reseller will engage us, enabling us to follow on with other services and allowing us to add to our portfolio by purchasing names registered through us upon their expiration. With the acquisition of eNom and its 25,000 reseller network, domain services will continue to be the largest portion of our business and will further fuel our ability sell add-on services.

We receive revenues for each domain registration or other Internet service processed through our system by Service Providers. Our domain service revenue is principally comprised of registration fees charged to resellers in connection with new, renewed and transferred domain name registrations. The registration fee provides our resellers with access to our provisioning and management tools to enable them to register and administer domain names and access to additional services like WHOIS privacy and DNS (Domain Name System) services, enhanced domain name suggestion tools and access to our premium domain names. We earn fees in connection with each new, renewed and transferred-in registration and from providing provisioning services to resellers and registrars on a monthly basis. Domain registrations are generally purchased for terms of one to ten years, with a majority having a one-year term. Payments for the full term of all services, or billed revenue, are received at the time of activation of service and where appropriate are recorded as deferred revenue and are recognized as earned ratably over the term of provision of service. This accounting treatment reasonably approximates a recognition pattern that corresponds with the provision of the services during the quarters and the years.

Wholesale – Value-Added Services

We derive revenue from our hosted email service through our global distribution network. Our hosted email service is offered on a per account, per month basis, and provides resellers with a reliable, scalable “white label” hosted email solution that can be customized to their branding and business model requirements. The hosted email service also includes spam and virus filtering on all accounts. End-users can access the hosted email service via a full-featured, multi-language web interface or through traditional desktop email clients, such as Microsoft Outlook or Apple Mail, using IMAP or POP/SMTP.

We also derive revenue from other Value-Added Services primarily from provisioning SSL certificates. In addition, we derive revenue from the bulk sale of domain names and advertising from the OpenSRS and eNom domain expiry stream.

In addition, we provide billing, provisioning and customer care software solutions to ISPs through our Platypus billing software.

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Retail

We derive revenues from Hover and eNom’s retail properties through the sale of retail domain name registration and email services to individuals and small businesses.

Portfolio

We derive revenue from our portfolio of domain names by displaying advertising on the domains and by making them available for sale or lease. When a user types one of these domain names into a web browser, they are presented with dynamically generated links that are pay-per-click advertising. Every time a user clicks on one of these links, it generates revenue for us through our partnership with third-parties who provide syndicated pay-per-click advertising (“parked page vendors”).

Our parked page vendor relationships may not continue to generate levels of revenue commensurate with what we have achieved during past periods. Our ability to generate online advertising revenue from parked page vendors depends on their advertising networks' assessment of the quality and performance characteristics of Internet traffic resulting from online advertisements rendered on their websites. We have no control over any of these quality assessments. Parked page vendors may from time to time change their existing, or establish new, methodologies and metrics for valuing the quality of Internet traffic and delivering pay-per-click advertisements. Any changes in these methodologies, metrics and advertising technology platforms could decrease the amount of revenue that we generate from online advertisements. In addition, parked page vendors may at any time change the nature of the service or suspend the service that they provide to online advertisers. These types of changes or suspensions would adversely impact our ability to generate revenue from pay-per-click advertising.

Portfolio names are sold through our premium domain name service, auctions or in negotiated sales. The size of our domain name portfolio varies over time, as we acquire and sell domains on a regular basis to maximize the overall value and revenue generation potential of our portfolio. In evaluating names for sale, we consider the potential foregone revenue from pay-per-click advertising, as well as other factors. The name will be offered for sale if, based on our evaluation, the name is deemed non-essential to our business and management believes that deriving proceeds from the sale is strategically more beneficial to the Company.

Portfolio names that have been acquired from third-parties or through acquisition are included as intangible assets with indefinite lives on our consolidated balance sheet.

Critical Accounting Policies

Preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. There have been no material changes to the critical accounting policies and estimates as previously disclosed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2016, except for the adoption of Accounting Standard Update No. 2016-05 Derivatives and Hedging (Topic 815), ASU 2015-16 Simplifying the Accounting for Measurement-Period Adjustments, ASU No. 2017-04 Intangibles – Goodwill and Other (Topic 350), and ASU No. 2016-09 Stock Compensation (Topic 718). For further information on our critical accounting policies and estimates, see Note 3 to the consolidated financial statements appearing in Part I, Item 1 in this Quarterly Report on Form 10-Q.

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RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2017 AS COMPARED TO THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016

NET REVENUES

The following table presents our net revenues, by revenue source:

	Three months ended September 30,					Nine months ended September 30,
	2017			2016		2017			2016
Network Access Services:
Mobile Services	$	21,748,809		$	18,374,906	$	60,090,266		$	52,287,808
Other Services		1,244,225			878,157		3,469,526			2,732,628
Total Network Access Services		22,993,034			19,253,063		63,559,792			55,020,436
Domain Services:
Wholesale
Domain Services		47,769,779			22,955,731		135,411,688			65,879,375
Value Added Services		4,401,704			2,226,977		14,034,456			6,834,086
Total Wholesale		52,171,483			25,182,708		149,446,144			72,713,461
Retail		8,872,984			3,721,032		22,937,606			10,747,456
Portfolio		970,983			907,524		2,856,305			2,532,976
Total Domain Services		62,015,450			29,811,264		175,240,055			85,993,893
	$	85,008,484		$	49,064,327	$	238,799,847		$	141,014,329
Increase over prior period	$	35,944,157				$	97,785,518
Increase - percentage		73	%				69	%

The following table presents our revenues, by revenue source, as a percentage of total revenues:

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Network Access Services:
Mobile Services		26	%		37	%		25	%		37	%
Other Services		1	%		2	%		1	%		2	%
Total Network Access Services		27	%		39	%		26	%		39	%
Domain Services:
Wholesale
Domain Services		57	%		46	%		57	%		46	%
Value Added Services		5	%		5	%		6	%		5	%
Total Wholesale		62	%		51	%		63	%		51	%
Retail		10	%		8	%		10	%		8	%
Portfolio		1	%		2	%		1	%		2	%
Total Domain Services		73	%		61	%		74	%		61	%
		100	%		100	%		100	%		100	%

Total net revenues for the three months ended September 30, 2017 increased by $36.0 million or 73% to $85.0 million when compared to the three months ended September 30, 2016.  The increase was largely due to the acquisition of eNom, and to a lesser extent the growth in the Ting mobile subscriber base.

Total net revenues for the nine months ended September 30, 2017 increased by $97.8 million or 69% to $238.8 million when compared to the nine months ended September 30, 2016. The increase was largely due to the acquisition of eNom, and to a lesser extent the growth in the Ting mobile subscriber base.

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Deferred revenue increased to $163.2 million at September 30, 2017 from $77.8 million at December 31, 2016. The increase was largely due to the acquisition of eNom.

No customer accounted for more than 10% of total revenue during the three and nine months ended September 30, 2017 and 2016. As at September 30, 2017 and December 31, 2016, no customer accounted for more than 10% of accounts receivable. Significant management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On an ongoing basis, we assess the ability of our customers to make required payments. Based on this assessment, we expect the carrying amount of our outstanding receivables, net of allowance for doubtful accounts, to be fully collected.

Network Access Services

Net revenues from Ting mobile phone equipment and services for the three months ended September 30, 2017 increased by $3.4 million or 18% to $21.7 million as compared to the three months ended September 30, 2016. This increase primarily reflects the impact the larger Ting subscriber base is having on Ting mobile service revenue which grew by $2.5 million to $18.7 million as compared to the three months ended September 30, 2016. Revenues from the sale of mobile hardware and related accessories increased by $0.9 million to $3.0 million for the three months ended September 30, 2017. This increase was due to increased mix of higher priced devices attributed to the increased sales of new Apple mobile devices under the direct supply agreement signed in the second quarter of 2017.   

Net revenues from Ting mobile phone equipment and services for the nine months ended September 30, 2017 increased by $7.8 million or 15% to $60.1 million as compared to the nine months ended September 30, 2016. This increase primarily reflects the impact the larger Ting subscriber base is having on Ting mobile service revenue which grew by $6.9 million to $53.4 million as compared to the nine months ended September 30, 2016. Services revenues and related gross margins were impacted by the issuance of $35 service credits to each RingPlus customer (see discussion below). Revenues from the sale of mobile hardware and related accessories grew by $0.9 million to $6.7 million for the nine months ended September 30, 2017.

 High speed Internet access, Internet hosting and network consulting services generated $1.2 million in revenue during the three months ended September 30, 2017, up $0.4 million from the three months ended September 30, 2016. Growth in High speed Internet access revenues was as a result of the increased Ting Internet footprint in Charlottesville, VA, Westminster, MD and Holly Springs, NC. Increased access revenues were partially offset by ongoing declines in legacy revenues from hosting and network consulting services.  

High speed Internet access, Internet hosting and network consulting services generated $3.5 million in revenue during the nine months ended September 30, 2017, up $0.7 million from the nine months ended September 30, 2016. Growth in High speed Internet access revenues was as a result of the increased Ting Internet footprint in Charlottesville, VA and Westminster, MD and launch of services in Holly Springs, NC. Increased access revenues were partially offset by ongoing declines in legacy revenues from hosting and network consulting services.

As of September 30, 2017, Ting mobile had 171,000 accounts and 281,000 mobile devices under its management compared to 147,000 subscribers and 235,000 devices under management as of September 30, 2016. When compared to December 31, 2016 accounts and mobile devices increased by 20,000 and 36,000 respectively. Included in this increase are a net 6,000 accounts and 8,000 mobile devices that still remain as of September 30, 2017 that initially migrated from RingPlus, a non-related MVNO, when it shut down operations in February. As part of our agreement with RingPlus, we undertook to offer a $35 service credit to each RingPlus customer who activated their account on the Ting platform. RingPlus’s business model included a substantial number of users on free plans. It is highly likely that many of these customers will use those credits and then immediately port out to another service. Accordingly, we saw higher than normal churn in the quarter ended September 30, 2017 and we expect that churn in the quarter ended December 31, 2017 will continue to be substantially higher than normal which may negatively impact our total accounts and mobile devices under management.    

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Wholesale

During the three months ended September 30, 2017, wholesale domain services revenue increased by $24.8 million or 108% to $47.8 million when compared to the three months ended September 30, 2016.   During the nine months ended September 30, 2017, wholesale domain services revenue increased by $69.5 million or 106% to $135.4 million when compared to the nine months ended September 30, 2016.   These increases were primarily due to the acquisition of eNom on January 20, 2017 and to a lesser extent the acquisition of the international reseller channel of Melbourne IT on April 1, 2016.  Our gross margins were negatively impacted by amortizing into revenue, deferred revenue that was recorded at fair value at the acquisition date which was approximately 10% lower than the historical cost basis of eNom.

During the three months ended September 30, 2017, the number of transactions from all new, renewed and transferred-in domain name registrations that we processed increased by 2.4 million to 4.9 million when compared to the three months ended September 30, 2016.   During the nine months ended September 30, 2017, the number of transactions from all new, renewed and transferred-in domain name registrations that we processed increased by 7.1 million to 14.6 million when compared to the nine months ended September 30, 2016.   These increases were primarily due to the acquisition of eNom on January 20, 2017 and to a lesser extent the acquisition of the international reseller channel of Melbourne IT on April 1, 2016.  

Domain services revenue and transaction volumes continue to be impacted by the ongoing migration of a few large customers, which have either been acquired by competitors or have become ICANN accredited registrars. These customers have been and will continue to move their domain management and domain transaction processing to their own accreditations and in-house systems. We expect that the number of new, renewed and transferred-in domain name registrations will continue to be impacted by future consolidation and decisions that large volume customers make with regard to acquiring their own accreditations. While we anticipate that the number of new, renewed and transferred-in domain name registrations will continue to incrementally increase as a result of new customers and the expansion in the number of new gTLDs in the long term, we expect the volatility of the above factors to affect the growth in the number of domain names that we manage.

As of September 30, 2017, total domains that we manage under our own accreditations increased by 11.3 million to 22.7 million when compared September 30, 2016. Including domains that we manage on behalf of other accredited registrars, total domains under management increased by 13.5 million to 28.3 million when compared to September 30, 2016. These increases were due to the acquisition eNom on January 20, 2017.

During the three months ended September 30, 2017, value added services revenue increased by $2.2 million to $4.4 million when compared to the three months ended September 30, 2016.  This increase was due to the acquisition of eNom on January 20, 2017.  During the nine months ended September 30, 2017, value added services revenue increased by $7.2 million to $14.0 million when compared to the nine months ended September 30, 2016.  Our gross margins were negatively impacted by amortizing into revenue, deferred revenue that was recorded at fair value at the acquisition date which was approximately 10% lower than the historical basis of eNom.  

Retail

Net revenues from Retail for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, increased by $5.2 million, or 138%, to $8.9 million.  Net revenues from Retail for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, increased by $12.2 million, or 113%, to $22.9 million. These increases were largely due to the acquisition of eNom and to a lesser extent due to the success that our retail marketing initiatives and improved websites are having on our ability to attract new customers and retain existing ones.  Our revenues and gross margins were negatively impacted by amortizing into revenue, deferred revenue that was recorded at fair value at the acquisition date which was approximately 10% lower than the historical basis of eNom.

Portfolio

Net revenues from Portfolio for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, increased by $0.1 million to $1.0 million.

Net revenues from Portfolio for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, increased by $0.3 million to $2.9 million.

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COST OF REVENUES

Network Access Services

Mobile

Cost of revenues for mobile services includes the costs of provisioning mobile services (primarily our customers' voice, messaging, data usage provided by our MNOs), the costs of providing mobile phone hardware (the cost of mobile phone devices and SIM cards sold to our customers, order fulfillment related expenses, and inventory write-downs).

Other Services

Cost of revenues for Other services includes the costs for provisioning high speed Internet access (network access fees, software licenses), the costs of providing hardware (the cost of network routers sold to our customers, order fulfillment related expenses, and inventory write-downs) and any direct costs incurred in providing web hosting and IT consulting services.

Domains

Wholesale

Domain Services

Cost of revenues for domain registrations represents the amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are initially recorded as prepaid domain registry fees. This accounting treatment reasonably approximates a recognition pattern that corresponds with the provision of the services during the period. Market development funds that do not meet the criteria for revenue recognition under ASC 605-50 “Customer Payments and Incentives”, are reflected as cost of goods sold and are recognized as earned.

Value-Added Services

Costs of revenues for Value-Added Services include licensing and royalty costs related to the provisioning of certain components related to hosted email, fees paid to third-party service providers, primarily for trust certificates and for printing services in connection with Platypus. Fees payable for trust certificates are amortized on a basis consistent with the provision of service, generally one year, while email hosting fees and monthly printing fees are included in cost of revenues in the month they are incurred.

Retail

Costs of revenues for our provision and management of Internet services through our retail site, Hover.com, include the amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely ratably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domain is registered, and are recorded as prepaid domain registry fees.

Portfolio

Costs of revenues for our Portfolio represent the amortization of registry fees for domains added to our portfolio over the renewal period, which is generally one year, the value attributed under intangible assets to any domain name sold and any impairment charges that may arise from our assessment of our domain name intangible assets. As the total names in our portfolio continue to grow, this cost will become a more significant component of our cost of revenues. Payments for domain registrations are payable for the full term of service at the time of activation of service and are recorded as prepaid domain registry fees and are expensed ratably over the renewal term.

Costs of revenues for our larger ad-supported content site include the fees paid to third-party service providers, primarily for digital certificates sold through our content sites and content license fees.

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Network expenses

Network expenses include personnel and related expenses, depreciation and amortization, communication costs, equipment maintenance, stock-based compensation and employee and related costs directly associated with the management and maintenance of our network. Communication costs include bandwidth, co-location and provisioning costs we incur to support the supply of all our services.

The following table presents our cost of revenues, by revenue source:

	Three months ended September 30,					Nine months ended September 30,
	2017			2016		2017			2016
Network Access Services:
Mobile Services	$	12,365,383		$	9,087,274	$	32,634,348		$	27,026,242
Other Services		945,539			501,909		2,755,205			1,360,153
Total Network Access Services		13,310,922			9,589,183		35,389,553			28,386,395
Domain Services:
Wholesale
Domain Services		42,294,131			18,934,555		119,206,649			54,215,215
Value Added Services		671,291			463,369		1,823,711			1,401,821
Total Wholesale		42,965,422			19,397,924		121,030,360			55,617,036
Retail		4,610,745			1,727,867		12,775,941			4,968,659
Portfolio		179,672			131,694		626,963			473,403
Total Domain Services		47,755,839			21,257,485		134,433,264			61,059,098
Network Expenses:
Network, other costs		2,460,696			1,287,620		7,064,458			3,925,377
Network, depreciation and amortization costs		1,322,473			292,167		3,463,013			1,012,904
		3,783,169			1,579,787		10,527,471			4,938,281
	$	64,849,930		$	32,426,455	$	180,350,288		$	94,383,774
Increase over prior period	$	32,423,475				$	85,966,514
Increase - percentage		100	%				91	%

The following table presents our cost of revenues, as a percentage of total of cost of revenues:

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Network Access Services:
Mobile Services		19	%		29	%		18	%		29	%
Other Services		1	%		2	%		2	%		1	%
Total Network Access Services		20	%		31	%		20	%		30	%
Domain Services:
Wholesale
Domain Services		66	%		59	%		66	%		59	%
Value Added Services		1	%		1	%		1	%		0	%
Total Wholesale		67	%		60	%		67	%		59	%
Retail		7	%		5	%		7	%		5	%
Portfolio		0	%		0	%		0	%		1	%
Total Domain Services		74	%		65	%		74	%		65	%
Network Expenses:
Network, other costs		4	%		3	%		4	%		4	%
Network, depreciation and amortization costs		2	%		1	%		2	%		1	%
		6	%		4	%		6	%		5	%
		100	%		100	%		100	%		100	%

Total cost of revenues for the three months ended September 30, 2017, increased by $32.4 million, or 100%, to $64.8 million when compared to the three months ended September 30, 2016. Total cost of revenues for the nine months ended September 30, 2017 increased by $86.0 million, or 91%, to $180.4 million when compared to the nine months ended September 30, 2016. These increases primarily resulted from the acquisition of eNom on January 20, 2017, acquisition of the international reseller channel of Melbourne IT on April 1, 2016 and the impact Ting’s larger subscriber base has on network access service costs.

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Prepaid domain registration and other Internet services fees as of September 30, 2017 increased to $130.5 million from $60.4 million as of December 31, 2016, primarily due to the acquisition of eNom.

Network Access Services

Cost of revenues from Ting mobile phone equipment and services for the three months ended September 30, 2017, as compared to the three months ended September 30, 2016, increased by $3.3 million or 36% to $12.4 million. This increase primarily reflects the impact the larger subscriber base had on Ting mobile service cost of revenue which grew by $2.2 million to $9.2 million as compared to the three months ended September 30, 2016.   Mobile hardware and related accessories costs increased by $1.1 million compared to the three months ended September 30, 2016, to $3.2 million.  This increase was due to increased mix of higher cost devices attributed to the increased sales of new Apple mobile devices under the direct supply agreement signed in the second quarter of 2017.  

In addition, during the three months ended September 30, 2017, we incurred costs of $0.9 million in provisioning high speed Internet access, Internet hosting and network consulting services as compared to $0.5 million during the three months ended September 30, 2016. The increase in costs was primarily due primarily to the expansion of the Ting Fiber foot print and increasing subscriber base.

Cost of revenues from Ting mobile phone equipment and services for the nine months ended September 30, 2017, as compared to the nine months ended September 30, 2016, increased by $5.6 million or 21% to $32.6 million. This increase primarily reflects the impact the larger subscriber base had on Ting mobile service cost of revenue which grew by $4.0 million to $25.4 million as compared to the nine months ended September 30, 2016. Mobile hardware and related accessories costs increased by $1.6 million compared to the nine months ended September 30, 2016, to $7.2 million. This increase was due to increased mix of higher cost devices attributed to the increased sales of new Apple mobile devices under the direct supply agreement signed in the second quarter of 2017.   

In addition, during the nine months ended September 30, 2017, we incurred costs of $2.8 million in provisioning high speed Internet access, Internet hosting and network consulting services as compared to $1.4 million during the nine months ended September 30, 2016. The increase in costs was primarily due primarily to the expansion of the Ting Fiber foot print and increasing subscriber base.

Wholesale

Costs for Wholesale and Value-Added Services for the three months ended September 30, 2017 increased by $23.6 million, or 121%, to $43.0 million when compared to the three months ended September 30, 2016.  For the nine months ended September 30, 2017, costs for Wholesale and Value-Added Services increased year over year by $65.4 million to $121.0 million.  These increases were due to the acquisition of eNom on January 20, 2017 and to a lesser extent acquisition of the international reseller channel of Melbourne IT on April 1, 2016.

Retail

Costs for Retail for the three months ended September 30, 2017 increased by $2.9 million, to $4.6 million when compared to the three months ended September 30, 2016. Costs for Retail for the nine months ended September 30, 2017 increased by $7.8 million, to $12.8 million when compared to the nine months ended September 30, 2016. These increases resulted primarily from the acquisition of eNom on January 20, 2017 and to a lesser extent the increased cost of additional volume in Hover services.

Portfolio

Costs for Portfolio for the three months ended September 30, 2017 were relatively flat compared to the same period last year and increased by $0.2 million to $0.6 million, when compared to the nine months ended September 30, 2016.

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Network Expenses

Network costs for the three months ended September 30, 2017 increased by $2.2 million to $3.8 million when compared to the three months ended September 30, 2016. Costs for Network Access Services for the nine months ended September 30, 2017 increased by $5.6 million, to $10.5 million when compared to the nine months ended September 30, 2016. The increase is primarily due to the acquisition of eNom on January 20, 2017, including acquired developed platform technology.

SALES AND MARKETING

Sales and marketing expenses consist primarily of personnel costs. These costs include commissions and related expenses of our sales, product management, public relations, call center, support and marketing personnel. Other sales and marketing non-personnel expenses include customer acquisition costs, advertising and other promotional costs.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Sales and marketing	$	7,578,414		$	5,479,445		$	22,244,961		$	15,174,619
Increase over prior period	$	2,098,969					$	7,070,342
Increase - percentage		38	%					47	%
Percentage of net revenues		9	%		11	%		9	%		11	%

Sales and marketing expenses for the three months ended September 30, 2017 increased by $2.1 million, or 38%, to $7.6 million when compared to the three months ended September 30, 2016. This increase related primarily to an increase of $1.9 million in workforce, stock-based compensation and travel related costs due partly to the increased eNom workforce as well as workforce increases to support network access related growth.  Marketing and other costs increased $0.2 million largely to support and acquire Ting mobile and fixed Internet access subscribers. 

                Sales and marketing expenses for the nine months ended September 30, 2017 increased by $7.1 million, or 47%, to $22.2 million when compared to the nine months ended September 30, 2016. This increase related primarily to an increase of $2.2 million in marketing spend largely to support and acquire Ting mobile and fixed Internet access subscribers, as well as increased workforce, stock-based compensation and travel related expenses of $4.7 million due partly to the increased eNom workforce as well as workforce increases to support network access related growth.  In addition, expenses also increased due to a $0.2 million reversal of a 2015 bonus accrual during the nine months ended September 30, 2016. 

TECHNICAL OPERATIONS AND DEVELOPMENT

Technical operations and development expenses consist primarily of personnel costs and related expenses required to support the development of new or enhanced service offerings and the maintenance and upgrading of existing infrastructure. This includes expenses incurred in the research, design and development of technology that we use to register domain names, network access services, email, retail, domain portfolio and other Internet services, as well as to distribute our digital content services. All technical operations and development costs are expensed as incurred.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Technical operations and development	$	1,910,147		$	1,270,107		$	5,402,385		$	3,445,118
Increase over prior period	$	640,040					$	1,957,267
Increase - percentage		50	%					57	%
Percentage of net revenues		2	%		3	%		2	%		2	%

Technical operations and development expenses for the three months ended September 30, 2017 increased by $0.6 million, or 50%, to $1.9 million when compared to the three months ended September 30, 2016.  The increase in costs relate primarily to increased salaries and benefits associated with the eNom technical operations and development workforce that were included as of January 20, 2017.

Technical operations and development expenses for the nine months ended September 30, 2017 increased by $2.0 million, or 57%, to $5.4 million when compared to the nine months ended September 30, 2016.  The increase in costs relate primarily to increased salaries and benefits associated with the eNom technical operations and development workforce that were included as of January 20, 2017.

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GENERAL AND ADMINISTRATIVE

General and administrative expenses consist primarily of compensation and related costs for managerial and administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general corporate expenses.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
General and administrative	$	2,852,345		$	2,166,217		$	9,596,298		$	7,497,752
Increase over prior period	$	686,128					$	2,098,546
Increase - percentage		32	%					28	%
Percentage of net revenues		3	%		4	%		4	%		5	%

General and administrative expenses for the three months ended September 30, 2017 increased by $0.7 million, or 47%, to $2.9 million when compared to the three months ended September 30, 2016.  This increase is primarily related to an increase in facility and transitional services largely related to the inclusion of eNom operations in Kirkland, Washington of $0.3 million.  In addition, credit card processing fees related to growth of network access services increased $0.3 million and professional fees increased $0.2 million.  Workforce related expenses increased due to a $0.3 million reversal of a 2015 bonus accrual during the three months ended September 30, 2016.  Offsetting this, during the three months ended September 30, 2017, we experienced gains of $0.4 million on foreign exchange revaluation of our foreign denominated monetary assets and liabilities compared to a neutral impact for the three months ended September 30, 2016.

General and administrative expenses for the nine months ended September 30, 2017 increased by $2.1 million, or 28%, to $9.6 million when compared to the nine months ended September 30, 2016. This increase is primarily related to an increase in facility and transitional services primarily related to the inclusion of eNom operations in Kirkland, Washington of $0.9 million.  Workforce costs were also up $0.4 million primarily due to a $0.5 million reversal of a 2015 bonus accrual during the nine months ended September 30, 2016.   In addition, professional fees, travel, third-party consulting, credit card processing fees, and stock-based compensation increasing by $1.4 million, primarily related to the eNom acquisition and to support the growth of network access services when compared to the nine months ended September 30, 2016.   These increases were offset by an improvement of $0.6 million in gains on foreign exchange revaluation of our foreign denominated monetary assets and liabilities for the nine months ended September 30, 2017 as compared the same period last year.

DEPRECIATION OF PROPERTY AND EQUIPMENT

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Depreciation of property and equipment	$	154,638		$	178,687		$	485,648		$	328,877
Decrease over prior period	$	(24,049	)				$	156,771
Decrease - percentage		(13	%)					48	%
Percentage of net revenues		0	%		0	%		0	%		0	%

Depreciation costs are relatively flat at $0.2 million for the three months ended September 30, 2017, and increased $0.2 million for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 due to higher investments in property and equipment in 2017.

AMORTIZATION OF INTANGIBLE ASSETS

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Amortization of intangible assets	$	1,745,923		$	279,126		$	4,735,221		$	613,041
Increase over prior period	$	1,466,797					$	4,122,180
Increase - percentage		525	%					672	%
Percentage of net revenues		2	%		1	%		2	%		0	%

Amortization of intangible assets for the three and nine months ended September 30, 2017 increased $1.5 and $4.1 million, respectively, due to the impact of the acquisition of eNom. In the acquisition, the Company acquired intangible assets related to brand and customer relationships totaling $40.4 million.

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IMPAIRMENT OF INDEFINITE LIFE INTANGIBLE ASSETS

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Impairment of indefinite life intangible assets	$	1,500		$	2,866		$	1,500		$	27,745
Decrease over prior period	$	(1,366	)				$	(26,245	)
Decrease - percentage		(48	%)					(95	%)
Percentage of net revenues		0	%		0	%		0	%		0	%

As part of our normal renewal process during the three and nine months ended September 30, 2017 we assessed whether certain domain names acquired in the September 2006 acquisition of Mailbank.com Inc. should be renewed or be allowed to expire. Accordingly, domain names with a book value of $1,500 were written off and recorded as an impairment of indefinite life intangible assets during the three and nine months ended September 30, 2017. During the three and nine months ended September 30, 2016, domain names with a book value of $2,886 and $27,745 respectively, were written off and recorded as an impairment of indefinite life intangible assets.

LOSS (GAIN) ON CURRENCY FORWARD CONTRACTS

Although our functional currency is the U.S. dollar, a major portion of our fixed expenses are incurred in Canadian dollars. Our goal with regard to foreign currency exposure is, to the extent possible, to achieve operational cost certainty, manage financial exposure to certain foreign exchange fluctuations and to neutralize some of the impact of foreign currency exchange movements. Accordingly, we enter into foreign exchange contracts to mitigate the exchange rate risk on portions of our Canadian dollar exposure.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Loss (gain) on currency forward contracts	$	(54,075	)	$	22,475		$	(115,276	)	$	(96,993	)
Decrease over prior period	$	(76,550	)				$	(18,283	)
Decrease - percentage		(341	%)					19	%
Percentage of net revenues		0	%		0	%		0	%		0	%

As of September 30, 2017, we have entered into certain forward exchange contracts that do not comply with the requirements of hedge accounting to meet a portion of our future Canadian dollar requirements through December 2017. The impact of the fair value adjustment on outstanding contracts resulted in an unrealized net loss of $1,053 for the three months ended September 30, 2017 compared to an unrealized net gain of less than $0.1 million for the three months ended September 30, 2016. In addition, the impact of the fair value adjustment on matured contracts resulted in a realized gain upon settlement of currency forward contracts of $0.1 million for the three months ended September 30, 2017 and a realized loss of than $42,589 million for the three months ended September 30, 2016.

The impact of the fair value adjustment on outstanding contracts for the nine months ended September 30, 2017 was a net gain of less than $37,103, compared to a net gain of $0.3 million for the nine months ended September 30, 2016. In addition, the impact of the fair value adjustment on outstanding contracts was increased by a realized gain upon settlement of currency forward contracts of less than $0.1 million for the nine months ended September 30, 2017, compared to a net loss of $0.2 million during the nine months ended September 30, 2016.

At September 30, 2017, our balance sheet reflects a net derivative instrument asset of $0.6 million as a result of our existing foreign exchange contracts.

OTHER INCOME AND EXPENSES

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Other income (expense), net	$	(707,029	)	$	(5,021	)	$	(2,190,673	)	$	85,919
Increase over prior period	$	(702,008	)				$	(2,276,592	)
Increase - percentage		13,981	%					(2,650	%)
Percentage of net revenues		(1	%)		(0	%)		(1	%)		0	%

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Other expense during the three months ended September 30, 2017 was $0.7 million and $2.2 million for the nine months ended September 30, 2017, as compared to Other expense of $5,021 and Other income of $0.1 million for the three and nine months ended September 30, 2016. Other expense consists primarily of the interest we incur in connection with our 2017 Amended Credit Facility (as discussed below), which was partially offset by income from the amortization of a $1.5 million Joint Marketing Agreement commencing in November 2015. The increase in Other expense for the three and nine months ended September 30, 2017 is due to interest expense increase of $0.7 million and $2.4 million, respectively, related to the net increase in our loan balances related to the acquisition of eNom and funding for expenditures associated with the Company’s Fiber to the Home program.

INCOME TAXES

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Provision for income taxes	$	1,823,367		$	2,492,649		$	2,780,908		$	6,476,012
Decrease in provision over prior period	$	(669,282	)				$	(3,695,104	)
Decrease - percentage		(27	)%					(57	)%
Effective tax rate		34.6	%		34.5	%		20.0	%		32.8	%

For the three months ended September 30, 2017, we recorded an income tax expense of $1.8 million on income before income taxes of $5.3 million, using an estimated effective tax rate for Fiscal 2017 adjusted for certain minimum state taxes as well as the inclusion of a $0.4 million tax recovery related to the adoption of ASU 2016-09, which requires all excess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense on a prospective basis. Comparatively, for the three months ended September 30, 2016, we recorded a provision for income taxes of $2.5 million on income before taxes of $7.2 million, using an estimated effective tax rate for the 2016 fiscal year.

For the nine months ended September 30, 2017, we recorded an income tax expense of $2.8 million on income before income taxes of $13.9 million, using an estimated effective tax rate for Fiscal 2017 adjusted for certain minimum state taxes as well as the inclusion of a $2.6 million tax recovery related to the adoption of ASU 2016-09, which requires all excess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense on a prospective basis. Comparatively, for the nine months ended September 30, 2016, we recorded a provision for income taxes of $6.5 million on income before taxes of $19.7 million, using an estimated effective tax rate for the 2016 fiscal year.

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. We consider projected future taxable income, uncertainties related to the industry in which we operate, and tax planning strategies in making this assessment.

We follow the provisions of FASB ASC Topic 740, Income Taxes to account for income tax exposures. The application of this interpretation requires a two-step process that separates recognition of uncertain tax benefits from measurement thereof.

We recognize accrued interest and penalties related to income taxes in income tax expense. We did not have significant interest and penalties accrued at September 30, 2017 and December 31, 2016, respectively.

ADJUSTED EBITDA

We believe that the provision of this supplemental non-GAAP measure allows investors to evaluate the operational and financial performance of our core business using similar evaluation measures to those used by management. We use adjusted EBITDA to measure our performance and prepare our budgets. Since adjusted EBITDA is a non-GAAP financial performance measure, our calculation of adjusted EBITDA may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Because adjusted EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a liquidity measure. See the Consolidated Statements of Cash Flows included in the attached financial statements. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies and/or analysts and may differ from period to period. We endeavor to compensate for these limitations by providing the relevant disclosure of the items excluded in the calculation of adjusted EBITDA to net income based on U.S. GAAP, which should be considered when evaluating the Company's results. Tucows strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

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Our adjusted EBITDA definition excludes depreciation, amortization of intangible assets, income tax provision, interest expense, interest income, stock-based compensation, asset impairment, gains and losses from unrealized foreign currency transactions and infrequently occurring items. Gains and losses from unrealized foreign currency transactions removes the unrealized effect of the change in the mark-to-market values on outstanding unhedged foreign currency contracts, as well as the unrealized effect from the translation of monetary accounts denominated in non-U.S. dollars to U.S. dollars.

The following table reconciles net income to adjusted EBITDA (dollars in thousands):

Reconciliation of Net income to Adjusted EBITDA

(In Thousands of US Dollars)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2017 (unaudited)			2016 (unaudited)			2017 (unaudited)			2016 (unaudited)
Net income for the period	$	3,439		$	4,741		$	11,127		$	13,250
Depreciation of property and equipment		978			457			2,614			1,305
Amortization of intangible assets		2,245			293			6,070			650
Impairment of intangible assets		2			3			2			28
Interest expense, net		864			135			2,703			302
Provision for income taxes		1,823			2,493			2,781			6,476
Stock-based compensation		203			195			834			586
Unrealized loss (gain) on change in fair value of forward contracts		1			(20	)		(37	)		(292	)
Unrealized loss (gain) on foreign exchange revaluation of foreign denominated monetary assets and liabilities		(426	)		278			(760	)		493
Acquisition and other costs¹		239			-			748			-
Adjusted EBITDA	$	9,368		$	8,575		$	26,082		$	22,798

¹Acquisition and other costs represents transaction-related expenses, transitional expenses, such as duplicative post-acquisition expenses, related to our acquisition of eNom in January 2017.   Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

Adjusted EBITDA increased to $9.4 million in the three months ended September 30, 2017 from $8.6 million in the three months ended September 30, 2016. The increase in adjusted EBITDA from period to period was primarily driven by the acquisition of eNom on January 20, 2017 and growth in domain services.

Adjusted EBITDA increased to $26.0 million in the nine months ended September 30, 2017 from $22.8 million in the nine months ended September 30, 2016. The increase in adjusted EBITDA from period to period was primarily driven by the acquisition of eNom on January 20, 2017, growth in domain services and Ting Mobile offset by the continued investment in the Company’s Fiber to the Home program.

OTHER COMPREHENSIVE INCOME (LOSS)

To mitigate the impact of the change in fair value of our foreign exchange contracts on our financial results, in October 2012 we began applying hedge accounting for the majority of the contracts we need to meet our Canadian dollar requirements on a prospective basis.

The impact of the fair value adjustment on outstanding hedged contracts for the three months ended September 30, 2017 was a net gain in other comprehensive income of $0.3 million. The impact of the fair value adjustment on outstanding hedged contracts for the three months ended September 30, 2016 was a net loss in other comprehensive income of $0.1 million. The impact of the fair value adjustment on outstanding hedged contracts for the nine months ended September 30, 2017 was a gain of $0.6 million compared to a net gain of $0.5 million for the nine months ended September 30, 2016.

The net amount reclassified to earnings during the three months ended September 30, 2017 was a gain of $0.3 million compared to a loss of $0.1 million during the three months ended September 30, 2016.  The net amount reclassified to earnings during the nine months ended September 30, 2017 was a gain of $0.4 million compared to a loss of $0.5 million during the nine months ended September 30, 2016.

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Other comprehensive income (loss)	$	(8,071	)	$	73,091		$	222,881		$	1,063,242
Decrease over prior period	$	(81,162	)				$	(840,361	)
Decrease - percentage		(111	%)					(79	%)
Percentage of net revenues		(0	%)		0	%		0	%		1	%

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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2017, our cash and cash equivalents balance declined to $12.5 million when compared to December 31, 2016. Our principal uses of cash were the acquisition of eNom for $76.2 million, net of cash acquired, $15.4 million in loan repayments, acquisition of the mobile consumer assets of Otono, Networks Inc for $2.3 million, $2.0 million for the additional 20% interest in Ting Virginia, LLC, $1.4 million of tax payment associated with stock option exercises and continued investment in property and equipment of $9.5 million.   These uses of liquidity were offset by proceeds from advances of $86.4 million, net of financing costs, from our 2017 Amended Credit Facility (defined below) to fund the acquisition of eNom and to fund Fiber to the Home program (“FTTH”) and cash provided by operating activities for the nine months ended September 30, 2017 of $17.8 million.

2017 Amended Credit Facility

On January 20, 2017, the Company entered into an amended and restated secured Credit Agreement (the “2017 Amended Credit Agreement”) with Bank of Montreal (“BMO” or the “Administrative Agent”), Royal Bank of Canada and Bank of Nova Scotia (collectively with “Lenders”) under which the Company increased its access to funds to an aggregate of $140 million. This amendment and restatement to the Company’s 2016 Credit Facility (defined below), among other things, reduced the existing Tucows non-revolving facility (such existing non-revolving facility, together with other existing facilities, the “Existing Facilities”) from $40.0 million to $35.5 million, and established a new non-revolving credit facility of $84.5 million(the “Facility D”). The Company immediately drew down $84.5 million under Facility D to fund the acquisition of eNom in accordance with the terms and conditions of the Purchase Agreement (as defined below) and associated costs. As used herein, the “2016 Credit Facility” refers to the credit facility established under the Company’s secured credit agreement (the “2016 Credit Agreement”) among the Company, BMO and the Lenders, dated as of August 18, 2016.

Borrowings under the 2017 Amended Credit Facility accrue interest and standby fees at variable rates based on borrowing elections by the Company and the Company’s Total Funded Debt to EBITDA as described below. The purpose of Facility A is for general working capital and general corporate requirements, while Facility B and Facility C support share repurchases, acquisitions and capital expenditures associated with the Company’s FTTH program. Facility D is solely for the acquisition of eNom.

The repayment terms for Facility A require monthly interest payments with any final principal payment becoming due upon maturity of the 2017 Amended Credit Facility. Under the repayment terms for Facility B, at December 31st of each year, balances drawn during the year that remain outstanding will become payable on a quarterly basis commencing the first quarter of the following year, for the period of amortization based on the purpose of the draw. For Facilities C and D, each draw will become payable beginning the first full quarter post initial draw for the period of amortization based on the purpose of the draw. The amortization periods for Facilities B, C and D are based on the purposes of the draws as follows: draws for share repurchases are repaid over four years, draws for acquisitions over five years and draws for FFTH capital expenditures over seven years. The 2017 Amended Credit Facility includes a mechanism that is triggered based on the Company’s Total Funded Debt to EBITDA calculation at the end of each fiscal year. If Total Funded Debt to EBITDA exceeds 2.25:1 at December 31 of each year during the term, the Company is obligated to make a repayment of 50% of Excess Cash Flow as defined under the agreement.

The 2017 Amended Credit Facility contains customary events of default and affirmative and negative covenants and restrictions, including certain financial maintenance covenants such as a maximum total funded debt to EBITDA ratio and a minimum fixed charge ratio. As of September 30, 2017, we were in compliance with all our covenants.

On June 6, 2017, the Company entered into the First Amendment to First Amended and Restated Credit Agreement (the “First Amendment”) with BMO and the Lenders. Among other things, the First Amendment (i) increases the amount available for borrowing under “Facility C,” a committed, non-revolving credit facility by $502,500, which was the portion of Facility D which was not used by the Company to fund its acquisition of eNom, Incorporated and was cancelled in accordance with the Credit Agreement, (ii) allows the Company to maintain bank accounts with Commonwealth Bank of Australia, subject to certain restrictions, (iii) provides for an extension of time for the Company to transfer its bank accounts from Silicon Valley Bank, and (iv) amends the definition of “EBITDA” to provide for an add-back in respect of certain liabilities.

44

Other Credit Facilities

Prior to the Company entering into the 2016 Credit Facility, the Company had credit agreements (collectively the “Amended Credit Facility”) with BMO that were amended on November 19, 2012, and which provided it with access to two revolving demand loan facilities (the “2012 Demand Loan Facilities”), a treasury risk management facility, an operating demand loan and a credit card facility. In connection with the 2016 Credit Facility, the Company repaid its outstanding indebtedness of the 2012 Demand Loan Facilities. With the settlement of the outstanding indebtedness, the 2012 Demand Loan Facilities and the operating demand loan were simultaneously terminated and the outstanding balances were fully repaid through advances on the 2016 Credit Facility. The Company continues to have access to the treasury risk management facility and credit card facility.

The treasury risk management facility under the Amended Credit Facility provides for a $3.5 million settlement risk line to assist the Company with hedging Canadian dollar exposure through foreign exchange forward contracts and/or currency options. Under the terms of the Amended Credit Facility, the Company may enter into such agreements at market rates with terms not to exceed 18 months. As of September 30, 2017, the Company held contracts in the amount of $6.9 million to trade U.S. dollars in exchange for Canadian dollars.

During the third quarter of 2017, the Company entered into a corporate credit card program with the Bank of Nova with credit limits of $1.0 million for US Dollar credit cards and CDN$0.5 million for Canadian Dollar credit cards.

Cash Flow from Operating Activities

Net cash provided by operating activities during the nine months ended September 30, 2017 was $17.8 million, as compared to $13.4 million during the nine months ended September 30, 2016

Net income, after adjusting for non-cash charges, during the nine months ended September 30, 2017 was $14.8 million. Net income included non-cash charges and recoveries of $3.7 million such as depreciation, amortization, stock-based compensation, excess tax benefits on stock-based compensation, unrealized gains on currency forward contracts, other income, and an expense for deferred tax. In addition, changes in our working capital provided $3.0 million.  Positive contributions of $12.1 million from movements in deferred revenue, domain registry fees, customer deposits, accrued liabilities, and income taxes recoverable were offset by $9.1 million utilized in changes from accounts receivable, inventory, accounts payable, prepaid expenses, and accreditation fees payable.

Cash Flow from Financing Activities

Net cash inflows from financing activities during the nine months ended September 30, 2017 totaled $69.7 million as compared to cash outflows of $0.4 million during the nine months ended September 30, 2016. Net cash inflows of $87.0 million resulting from draws on the 2017 Amended Credit Facility to fund the acquisition of eNom and to fund FTTH capital expenditures. These cash inflows were partially offset by outflows of $15.4 million of principal repayments relating to our 2017 Credit Amended Credit Facility, $1.3 million outflow from the net impact of exercise of stock options and $0.6 million of debt issuance costs.

Cash Flow from Investing Activities

Investing activities during the nine months ended September 30, 2017 used net cash of $90.1 million as compared to using $10.2 million during the nine months ended September 30, 2016.

On January 20, 2017, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with its indirect wholly owned subsidiary, Tucows (Emerald), LLC, Rightside Group, Ltd., and Rightside Operating Co., pursuant to which Tucows (Emerald), LLC purchased from Rightside Operating Co. all of the issued and outstanding capital stock of eNom Incorporated, a domain name registrar business. The purchase price was $76.2 million, net of cash of $1.6 million and purchase price adjustments of $5.7 million relating primarily to a working capital deficit. In connection with this acquisition, the Company incurred acquisition related expenditures of $0.8 million. The purchase price and the majority of the related acquisition costs were financed through borrowings under Facility D of the 2017 Amended Credit Facility agreement. On June 13, 2017, the parties entered into an amendment to the Purchase Agreement. For additional details, see note 4(b) to the interim unaudited financial statements included in this report.

45

On February 1, 2017, the Company acquired an additional 20% interest in Ting Virginia, LLC. for a consideration of $2.0 million. The consideration was funded through cash flow from operations. For additional details, see note 4(a) to the interim unaudited financial statements included in this report.

On July 26, 2017, the Company purchased customer relationships related to shared hosting and domain services for $0.1 million.

On September 19, 2017, the Company acquired the consumer related assets of Otono, Networks Inc. for consideration of $2.3 million and assumed working capital liabilities of $1.4 million.  The intangible assets acquired relate to customer relationships and are being amortized on a straight-line basis over a period of 7 years.

In addition, the Company invested $9.5 million in property and equipment, primarily to support the continued expansion of our fiber footprint.

Based on our operations, we believe that our cash flow from operations will be adequate to meet our anticipated requirements for working capital, capital expenditures and our loan repayments for at least the next 12 months.

We may choose to raise additional funds or seek other financing arrangements to facilitate more rapid expansion, develop new or enhance existing products or services, respond to competitive pressures or acquire or invest in complementary businesses, technologies, services or products.

There are currently no material understandings, commitments or agreements regarding the acquisition of other businesses.

Off-Balance Sheet Arrangements

As of September 30, 2017, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Contractual Obligations

In our Annual Report on Form 10-K for the year ended December 31, 2016, we disclosed our contractual obligations.

As of September 30, 2017, there have been no other material changes to those contractual obligations outside the ordinary course of business, except for the Company entering into a credit agreement to establish the 2017 Amended Credit Facility which replaced the 2016 Credit Facility. For more information, see note 7 to the interim unaudited financial statements included in this report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We develop products in Canada and sell these services in North America and Europe. Our sales are primarily made in U.S. dollars, while a major portion of expenses are incurred in Canadian dollars. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. Our interest income is sensitive to changes in the general level of Canadian and U.S. interest rates, particularly since the majority of our investments are in short-term instruments. Based on the nature of our short-term investments, we have concluded that there is no material interest rate risk exposure as of September 30, 2017. We are also subject to market risk exposure related to changes in interest rates under our 2017 Amended Credit Facility and Amended Credit Facility. We do not expect that any changes in interest rates will be material; however, fluctuations in interest rates are beyond our control. We will continue to monitor and assess the risks associated with interest expense exposure and may take additional actions in the future to mitigate these risks.

Although our functional currency is the U.S. dollar, a substantial portion of our fixed expenses are incurred in Canadian dollars. Our policy with respect to foreign currency exposure is to manage financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some of the impact of foreign currency exchange movements. Exchange rates are, however, subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact of exchange rate fluctuations on our business, results of operations and financial condition. Accordingly, we have entered into foreign exchange contracts to mitigate the exchange rate risk on portions of our Canadian dollar exposure.

46

At September 30, 2017, we had the following outstanding forward exchange contracts to trade U.S. dollars in exchange for Canadian dollars:

Maturity date	Notional amount of U.S. dollars		Weighted average exchange rate of U.S. dollars		Fair value
October - December 2017		6,859,570		1.3478		559,663
	$	6,859,570		1.3478	$	559,663

As of September 30, 2017, we had $6.9 million of outstanding foreign exchange forward contracts which will convert to CDN $9.2 million. Of these contracts, $6.2 million met the requirements for hedge accounting (December 31, 2016 - $26.6 million of which $24.0 million were designated as hedges).

We have performed a sensitivity analysis model for foreign exchange exposure over the nine months ended September 30, 2017. The analysis used a modeling technique that compares the U.S. dollar equivalent of all expenses incurred in Canadian dollars, at the actual exchange rate, to a hypothetical 10% adverse movement in the foreign currency exchange rates against the U.S. dollar, with all other variables held constant. Foreign currency exchange rates used were based on the market rates in effect during the nine months ended September 30, 2017. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rates would result in a decrease in net income for the nine months ended September 30, 2017 of approximately $0.7 million. There can be no assurances that the above projected exchange rate decrease will materialize. Fluctuations of exchange rates are beyond our control. We will continue to monitor and assess the risk associated with these exposures and may take additional actions in the future to hedge or mitigate these risks.

Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash equivalents, marketable securities, foreign exchange contracts and accounts receivable. Our cash, cash equivalents and short-term investments are in high-quality securities placed with major banks and financial institutions whom we have evaluated as highly creditworthy, and commercial paper. With respect to accounts receivable, we perform ongoing evaluations of our customers, generally granting uncollateralized credit terms to our customers, and maintaining an allowance for doubtful accounts based on historical experience and our expectation of future losses.

Item 4. Controls and Procedures

(a)    Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, performed an evaluation of our disclosure controls and procedures as required by Rule 13a-15(e) and 15d-15(e) under the Exchange Act. The evaluation was performed to determine whether our disclosure controls and procedures as of the end of the period covered by this report have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation as of September 30, 2017, management has concluded that our disclosure controls and procedures were effective.  Management’s assessment of disclosure controls and procedures excluded consideration of eNom’s internal control over financial reporting.  eNom was acquired during the first quarter of 2017, and the exclusion is consistent with guidance provided by the SEC staff that an assessment of a recently acquired business may be omitted from management’s report on internal control over financial reporting for up to one year from the date of acquisition, subject to specified conditions.  eNom’s total assets were approximately $205 million as September 30, 2017; its revenues during the nine months ended September 30, 2017 were approximately $81.3 million.

47

(b)    Changes in Internal Control over Financial Reporting

During the nine months ended September 30, 2017, there have not been any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As a result of our acquisition of eNom, we are in the process of evaluating eNom’s internal controls to determine the extent to which modifications to eNom’s internal controls would be appropriate.

48

PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in various investigations, claims and lawsuits arising in the normal conduct of our business, none of which, individually or in the aggregate, in our opinion, will materially harm our business. We cannot assure that we will prevail in any litigation. Regardless of the outcome, any litigation may require us to incur significant litigation expense and may result in significant diversion of our attention.

Item 1A. Risk Factors

In addition to the risk factor and other information set forth in this Quarterly Report, you should also carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, all of which could materially affect our business, financial condition or operating results and should be considered before making an investment decision regarding our securities. The risks described in this Quarterly Report and in our Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 1, 2017, the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on March 1, 2017 and will terminate on or before February 28, 2018.  The Company has not repurchased any shares under this program during the nine months ended September 30, 2017.

Item 4. Mine Safety Disclosures

Not applicable.

49

Item 6. Exhibits

(a) Exhibits.

Exhibit No.	Description
3.1.1	Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows' Current Report on Form 8-K, as filed with the SEC on November 29, 2007).
3.1.2	Articles of Amendment to Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows' Current Report on Form 8-K, as filed with the SEC on January 3, 2014).
3.2	Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows' Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 29, 2007).
3.3	Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.3 filed with Tucows’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as filed with the SEC on August 14, 2012).
31.1	Chief Executive Officer's Rule 13a-14(a)/15d-14(a) Certification *
31.2	Chief Financial Officer's Rule 13a-14(a)/15d-14(a) Certification *
32.1	Chief Executive Officer's Section 1350 Certification †
32.2	Chief Financial Officer's Section 1350 Certification †
101.INS	XBRL Instance *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation *
101.DEF	XBRL Taxonomy Extension Definition *
101.LAB	XBRL Taxonomy Extension Labels *
101.PRE	XBRL Taxonomy Extension Presentation *

* Filed herewith.

† Furnished herewith.

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 9, 2017	TUCOWS INC.
	By:	/s/ Elliot Noss
		Elliot Noss
		President and Chief Executive Officer
	By:	/s/ Davinder Singh
		Davinder Singh Chief Financial Officer
		(Principal Financial and Accounting Officer)

51

EXHIBIT INDEX

Exhibit No.	Description
3.1.1	Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows' Current Report on Form 8-K, as filed with the SEC on November 29, 2007).
3.1.2	Articles of Amendment to Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows' Current Report on Form 8-K, as filed with the SEC on January 3, 2014).
3.2	Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows' Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the SEC on March 29, 2007).
3.3	Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.3 filed with Tucows’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, as filed with the SEC on August 14, 2012).
31.1	Chief Executive Officer's Rule 13a-14(a)/15d-14(a) Certification *
31.2	Chief Financial Officer's Rule 13a-14(a)/15d-14(a) Certification *
32.1	Chief Executive Officer's Section 1350 Certification †
32.2	Chief Financial Officer's Section 1350 Certification †
101.INS	XBRL Instance *
101.SCH	XBRL Taxonomy Extension Schema *
101.CAL	XBRL Taxonomy Extension Calculation *
101.DEF	XBRL Taxonomy Extension Definition *
101.LAB	XBRL Taxonomy Extension Labels *
101.PRE	XBRL Taxonomy Extension Presentation *

* Filed herewith.

† Furnished herewith.

52

EX-31.1

Exhibit 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Elliot Noss, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Tucows Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date November 9, 2017	/s/ Elliot Noss
	Elliot Noss
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Davinder Singh, certify that: 

1.	I have reviewed this Quarterly Report on Form 10-Q of Tucows Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date November 9, 2017	/s/ Davinder Singh
	Davinder Singh
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Tucows Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Elliot Noss, President and Chief Executive Officer of the Company, hereby certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2017	/s/ Elliot Noss
	Elliot Noss
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Tucows Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Davinder Singh, Chief Financial Officer of the Company, hereby certify, to my knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(3) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(4) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2017	/s/ Davinder Singh
	Davinder Singh
	Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 06, 2017
Document Information [Line Items]
Entity Registrant Name	TUCOWS INC /PA/
Entity Central Index Key	0000909494
Trading Symbol	tcx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		10,577,549
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 12,547,059	$ 15,105,075
Accounts receivable, net of allowance for doubtful accounts of $167,886 as of September 30, 2017 and $164,145 as of December 31, 2016	13,726,565	10,925,622
Inventory	2,949,172	1,210,789
Prepaid expenses and deposits	14,712,889	6,250,555
Derivative instrument asset, current portion (note 5)	559,663	172,888
Prepaid domain name registry and ancillary services fees, current portion	106,672,400	49,396,737
Income taxes recoverable	780,185	220,451
Total current assets	151,947,933	83,282,117
Prepaid domain name registry and ancillary services fees, long-term portion	23,791,150	10,993,156
Property and equipment	22,232,870	13,450,438
Deferred tax asset		5,708,725
Intangible assets (note 6)	60,562,113	19,973,793
Goodwill (note 6)	87,486,243	21,005,143
Total assets	346,020,309	154,413,372
Current liabilities:
Accounts payable	5,946,691	4,786,645
Accrued liabilities	8,681,752	7,098,905
Customer deposits	15,303,523	5,418,622
Deferred rent, current portion	20,947	20,854
Loan payable, current portion (note 7)	18,289,853	2,233,110
Deferred revenue, current portion	131,971,919	62,795,079
Accreditation fees payable, current portion	1,201,477	528,027
Income taxes payable	1,239,754	1,548,121
Total current liabilities	182,655,916	84,429,363
Deferred revenue, long-term portion	31,219,144	15,053,977
Accreditation fees payable, long-term portion	299,909	115,084
Deferred rent, long-term portion	129,656	124,202
Loan payable, long-term portion (note 7)	63,137,229	8,015,698
Deferred gain	558,220	944,680
Deferred tax liability	18,198,544	4,827,192
Redeemable non-controlling interest (note 4 (a))	1,123,738	3,086,090
Stockholders' equity (note 12)
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding	0	0
Common stock - no par value, 250,000,000 shares authorized; 10,577,549 shares issued and outstanding as of September 30, 2017 and 10,461,574 shares issued and outstanding as of December 31, 2016	15,284,633	14,460,500
Additional paid-in capital	1,602,181	2,857,921
Retained earnings	31,489,104	20,399,511
Accumulated other comprehensive income	322,035	99,154
Total stockholders' equity	48,697,953	37,817,086
Total liabilities and stockholders' equity	346,020,309	154,413,372
Commitments and contingencies (note 11)

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ / shares in Thousands	Sep. 30, 2017	Dec. 31, 2016
Accounts receivable, allowance for doubtful accounts	$ 167,886	$ 164,145
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (in shares)	1,250,000	1,250,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	10,577,549	10,461,574
Common stock, shares outstanding (in shares)	10,577,549	10,461,574

XML

Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net revenues (note 10)	$ 85,008,484	$ 49,064,327	$ 238,799,847	$ 141,014,329
Cost of revenues (note 10)
Cost of revenues	61,066,761	30,846,668	169,822,817	89,445,493
Network expenses	2,460,696	1,287,620	7,064,458	3,925,377
Depreciation of property and equipment	823,441	278,746	2,128,417	976,419
Amortization of intangible assets (note 6)	499,032	13,421	1,334,596	36,485
Total cost of revenues	64,849,930	32,426,455	180,350,288	94,383,774
Gross profit	20,158,554	16,637,872	58,449,559	46,630,555
Expenses:
Sales and marketing	7,578,414	5,479,445	22,244,961	15,174,619
Technical operations and development	1,910,147	1,270,107	5,402,385	3,445,118
General and administrative	2,852,345	2,166,217	9,596,298	7,497,752
Depreciation of property and equipment	154,638	178,687	485,648	328,877
Amortization of intangible assets (note 6)	1,745,923	279,126	4,735,221	613,041
Impairment of indefinite life intangible assets (note 6)	1,500	2,866	1,500	27,745
Loss (gain) on currency forward contracts (note 5)	(54,075)	22,475	(115,276)	(96,993)
Total expenses	14,188,892	9,398,923	42,350,737	26,990,159
Income from operations	5,969,662	7,238,949	16,098,822	19,640,396
Other income (expense):
Interest expense, net	(864,482)	(135,168)	(2,702,504)	(301,868)
Other income, net	157,453	130,147	511,831	387,787
Total other income (expense)	(707,029)	(5,021)	(2,190,673)	85,919
Income before provision for income taxes	5,262,633	7,233,928	13,908,149	19,726,315
Provision for income taxes (note 8)	1,823,367	2,492,649	2,780,908	6,476,012
Net income before redeemable non-controlling interest	3,439,266	4,741,279	11,127,241	13,250,303
Redeemable non-controlling interest (note 4 (a))	(68,635)	(254,101)	(311,693)	(698,583)
Net income attributable to redeemable non-controlling interest	68,635	254,101	311,693	698,583
Net income for the period	3,439,266	4,741,279	11,127,241	13,250,303
Other comprehensive income (loss), net of tax
Unrealized income (loss) on hedging activities (note 5)	309,445	(58,821)	638,442	516,406
Net amount reclassified to earnings (note 5)	(317,516)	131,912	(415,561)	546,836
Other comprehensive income (loss) net of tax of $(4,591) and $41,580 for the three months ended September 30, 2017 and September 30, 2016, and $126,791 and $585,943 for the nine months ended September 30, 2017 and September 30, 2016 (note 5)	(8,071)	73,091	222,881	1,063,242
Comprehensive income for the period	$ 3,431,195	$ 4,814,370	$ 11,350,122	$ 14,313,545
Basic earnings per common share (note 9) (in dollars per share)	$ 0.33	$ 0.45	$ 1.06	$ 1.26
Shares used in computing basic earnings per common share (note 9) (in shares)	10,564,311	10,432,763	10,522,841	10,549,056
Diluted earnings per common share (note 9) (in dollars per share)	$ 0.32	$ 0.45	$ 1.03	$ 1.23
Shares used in computing diluted earnings per common share (note 9) (in shares)	10,785,342	10,619,005	10,785,050	10,736,775

XML

Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parentheticals) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Other comprehensive income (loss), tax	$ (4,591)	$ 41,580	$ 126,791	$ 585,943

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Operating activities:
Net income for the period	$ 3,439,266	$ 4,741,279	$ 11,127,241	$ 13,250,303
Items not involving cash:
Depreciation of property and equipment	978,079	457,433	2,614,065	1,305,296
Loss on write off of property and equipment	8,157		16,951
Amortization of debt discount and issuance costs	56,559	8,298	203,871	8,298
Amortization of intangible assets	2,244,955	292,547	6,069,817	649,526
Impairment of indefinite life intangible asset	1,500	2,866	1,500	27,745
Deferred income taxes	(1,445,241)	926,733	(3,010,795)	1,630,076
Excess tax benefits on share-based compensation expense	(443,718)	268,565	(2,614,804)	714,764
Amortization of deferred rent	63	13,783	5,547	30,447
Loss on disposal of domain names	7,896	4,760	24,661	25,581
Other income	(128,820)	(128,820)	(386,460)	(386,460)
Loss (gain) on change in the fair value of forward contracts	1,053	(20,114)	(37,103)	(292,133)
Stock-based compensation	202,902	195,439	833,987	585,854
Change in non-cash operating working capital:
Accounts receivable	533,900	(1,623,719)	(330,070)	(4,435,250)
Inventory	(642,738)	(217,741)	(1,738,383)	(598,658)
Prepaid expenses and deposits	201,757	419,939	(2,169,319)	(939,935)
Prepaid domain name registry and ancillary services fees	3,083,506	(1,271,948)	570,338	(5,170,911)
Income taxes recoverable	2,225,254	363,244	1,815,420	1,553,524
Accounts payable	(643,327)	681,303	(4,681,314)	(1,993)
Accrued liabilities	981,046	(581,495)	994,402	(1,429,069)
Customer deposits	(1,904,666)	(943,579)	1,163,305	90,970
Deferred revenue	(1,424,673)	1,666,291	7,543,013	6,772,663
Accreditation fees payable	(50,302)	14,059	(199,832)	51,215
Net cash provided by operating activities	7,282,408	5,269,123	17,816,038	13,441,853
Financing activities:
Proceeds received on exercise of stock options	68,065	48,376	172,903	107,672
Payment of tax obligations resulting from net exercise of stock options	(116,956)	(76,537)	(1,438,497)	(318,770)
Repurchase of common stock				(7,180,257)
Proceeds received on loan payable		10,989,583	86,998,000	16,989,583
Repayment of loan payable	(4,572,640)	(9,062,500)	(15,403,380)	(9,500,000)
Payment of loan payable costs	(16,463)	(383,463)	(620,217)	(516,963)
Net cash provided by (used in) financing activities	(4,637,994)	1,515,459	69,708,809	(418,735)
Investing activities:
Additions to property and equipment	(2,859,036)	(2,091,368)	(9,461,105)	(3,923,105)
Acquisition of a portion of the minority interest in Ting Virginia, LLC (note 4(a))			(2,000,000)
Acquisition of Enom Incorporated, net of cash (note 4(b))			(76,237,460)
Acquisition of intangible assets	(2,384,298)	(74,400)	(2,384,298)	(6,324,970)
Net cash used in investing activities	(5,243,334)	(2,165,768)	(90,082,863)	(10,248,075)
Increase (decrease) in cash and cash equivalents	(2,598,920)	4,618,814	(2,558,016)	2,775,043
Cash and cash equivalents, beginning of period	15,145,979	5,879,482	15,105,075	7,723,253
Cash and cash equivalents, end of period	12,547,059	10,498,296	12,547,059	10,498,296
Supplemental cash flow information:
Interest paid	869,749	93,560	2,717,378	260,506
Income taxes paid, net	1,307,727	927,826	6,313,308	2,507,699
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for	$ 186,418	$ 89,860	$ 186,418	$ 89,860

XML

Note 1 - Organization of the Company

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1.

Organization of the Company:

Tucows

 Inc., a Pennsylvania corporation (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions), together with our consolidated subsidiaries, is a provider of Network Access Services and Domain Services.  Our Network Access Services includes mobile, fixed high-speed Internet access services, Internet hosting and network consulting services, with mobile and high-speed Internet operating primarily under our Ting and Roam brands.  Our Domain services include wholesale and retail domain name registration services, value added services and portfolio services derived through our OpenSRS, eNom, Hover and YummyNames brands.

Our principal executive office is located in Toronto, Ontario

and we have other offices in Germany and the United States. Our common stock is listed on NASDAQ under the symbol “TCX” and on the Toronto Stock Exchange under the symbol “TC”.

On

January 20, 2017,

the Company

completed the purchase of all of the issued and outstanding capital stock of eNom, Incorporated (“eNom”) from Rightside Group. Ltd, a domain name registrar business. See note

4

(b) for further information.

XML

Note 2 - Basis of Presentation

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Basis of Accounting [Text Block]

2.

Basis of presentation:

The accompanying unaudited interim consolidated balance sheets, and the related consolidated statements of operations and comprehensive income and cash flows reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the financial position of Tucows and

its subsidiaries as at

September 30, 2017

and the results of operations and cash flows for the interim periods ended

September 

30,

2017

and

2016.

The results of operations presented in this Quarterly Report on Form 

10

-Q are

not

necessarily indicative of the results of operations that

may

be expected for future periods.

The accompanying unaudited interim consolidated financial statements have been prepared by Tucows in accordance with the rules

 and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the Company's annual audited consolidated financial statements and accompanying notes have been condensed or omitted. These interim consolidated financial statements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended

December 31, 2016

included in Tucows'

2016

Annual Report on Form 

10

-K filed with the SEC on

March 

8,

2017.

There have been

no

material changes to our significant accounting policies and estimates during the

nine

months ended

September 30, 2017

as compared to the significant accounting policies and estimates described in our Annual Report on Form 

10

-K for the fiscal year ended

December 

31,

2016,

except for the adoption of Accounting Standard Update

No.

2016

-

09,

Stock Compensation (Topic

718

).

See note

3

for more information.

XML

Note 3 - Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

3.

Recent accounting pronouncements:

Recent Accounting Pronouncements Adopted

On

January 1,

201

7,

the Company adopted Accounting Standards Updates ("ASU") 

No.

2016

-

05,

 

Derivatives and Hedging (Topic

815

) and ASU

2015

-

16,

Simplifying the Accounting for Measurement-Period Adjustments.

The adoption of these updates did

not

have a significant impact on the consolidated financial statements.

In

January 2017,

the Company adopted Accounting Standards Update (“ASU”)

No.

2017

-

04,

Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

(“ASU

2017

-

01”

), which simplifies the current

two

-step test to determine the amount, if any, of goodwill impairment. This update removes the

second

step of the quantitative test. An entity will apply a

one

-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying over its fair value,

not

to exceed the total amount of goodwill allocated to the reporting unit. The update will be applied to the Company's goodwill impairment evaluation for the year ended

December 31, 2017.

On

January 1, 2017,

the Company also adopted ASU

No.

2016

-

09,

Stock Compensation (Topic

718

)

, which simplifies the presentation of several aspects of the accounting for employee share-based payment transactions. The areas for simplification include the income tax consequences, accounting for forfeitures, and classification on the statement of cash flows. The impacts of the adoption of ASU

2016

-

09

on our consolidated financial statements are as follows:

● Accounting for Income Taxes – the standard requires that all excess tax benefits and tax deficiencies related to employee share-based payments are recognized through income tax expense on a prospective basis, which resulted in the recognition of $0.4 million and $2.6 million in excess tax benefits as a reduction of tax expense related to employee share-based payments during the three and nine months ended September 30, 2017, respectively;

● Cash Flow Classification – as a result of the new standard, all excess tax benefits related to employee share based payments which have been historically shown as a financing activity, should now be presented as an operating activity along with other income tax cash flows. Additionally, the standard requires that cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. The Company elected to apply both changes on a retrospective basis such that the comparative period is presented on a consistent basis as the current presentation; and

● Forfeitures – the standard allows for an entity-wide accounting policy election to either estimate the number of awards that are not expected to vest because the requisite service period will not be rendered, or to account for forfeitures as they occur. Prior to the adoption of 2016 - 09 the Company estimated forfeitures for the purpose of accounting for stock-based compensation. Beginning in the quarter ending March 31, 2017, the Company utilized the election to account for forfeitures as incurred. In accordance with the provisions of the new standard, the change has been adopted on a modified retrospective basis; however, the cumulative adjustment to opening retained earnings was immaterial.  

Recent Accounting Pronouncements

Not

Yet Adopted

In

January 2017,

the FASB issued ASU

No.

2017

-

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business

("ASU

2017

-

01"

), which clarified the definition of a business with objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The amendment update provides a screen to determine when a series of integrated activities is

not

a business. If the screen is

not

met, it

first

requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and

second

removes the evaluation of whether a market participant could replace the missing elements. This ASU is effective for annual and interim reporting periods beginning after

December 15, 2017.

The Company is currently in the process of evaluating the impact that the adoption of ASU

2017

-

01

will have on its consolidated financial statements.

In

May 2014,

the

 FASB issued ASU

No.

2014

-

09,

 Revenue from Contracts with Customers (Topic

606

) ("ASU

2014

-

09"

), which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP.  The new standard provides a single principles-based,

five

-step model to be applied to all contracts with customers, which steps are to (

1

) identify the contract(s) with the customer, (

2

) identify the performance obligations in the contracts, (

3

) determine the transaction price, (

4

) allocate the transaction price to the performance obligations in the contracts and (

5

) recognize revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. The new standard will be effective for the Company for the interim and annual reporting periods beginning after

December 

15,

 

2017

(

January 

1,

 

2018

for the Company). Companies can transition to the standards either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of evaluating the impact of transition methods. Based on continuing analysis, we do

not

believe adoption of the updated standard will have a material impact as the Company’s mobile and fixed internet services are on month to month contracts with minimal device subsidization and our wholesale and retail domain registration services recognize revenue over the term of the services provided.

In

August 2017,

the FASB issued ASU

No.

2017

-

12,

Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging Activities

("ASU

2017

-

12”

), which better aligns an entity’s risk management activities and financial reporting for hedging relationship through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results.  The new standard expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and hedged item in the financial statements.  This ASU is effective for annual and interim reporting periods beginning after

December 15, 2018.

The Company is currently in the process of evaluating the impact that the adoption of ASU

2017

-

12

will have on its consolidated financial statements.

In

February 2016,

th

e FASB issued ASU

No.

2016

-

02,

 

Leases (Topic

842

)

. The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU

2016

-

02

requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after

December 15, 2018 (

January 1, 2019

for the Company). The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company will adopt this guidance in the

first

quarter of fiscal

2019

and is in the process of evaluating the impact of the adoption of ASU

2016

-

02

will have on its consolidated financial statements.

XML

Note 4 - Acquisitions

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

4

. Acquisitions:

(a) Blue Ridge Websoft

On

February 27, 2015,

Ting Fiber, Inc.,

one

of the Company

’s wholly owned subsidiaries, acquired a

70%

ownership interest in the newly formed Ting Virginia, LLC and its subsidiaries, Blue Ridge Websoft, LLC (doing business as Blue Ridge Internet Works), Fiber Roads, LLC and Navigator Network Services, LLC (the "BRI Group") for consideration of approximately

$3.5

million. Ting Virginia, LLC was an independent Internet service provider in Charlottesville, Virginia, doing business primarily as Blue Ridge Internet Works.  

On

February 1, 2017,

under the terms of a call option in the agreement, Ting Fiber, Inc. acquired an additional

20%

interest in Ting Virginia, LLC from the selling shareholders (the “

Minority Shareholders”) for consideration of

$2.0

million. The Company recorded the

$2.0

million payment as a reduction in the carrying value of Redeemable non-controlling interest.  Following the exercise of the call option, the Minority Shareholders chose

not

to exercise their right to put their remaining

10%

interest in Ting Virginia, LLC to Ting Fiber, Inc. The Minority Shareholders still retain the right, on the

fourth

anniversary of the closing date (

February 27, 2019),

to exercise their put option under which Ting Fiber, Inc. would be obligated to purchase their remaining interest for

$120,000

per percentage point of the additional equity interest acquired.  The Company has determined that the put option is embedded within the non-controlling interest shares that are subject to the put options. The redemption feature requires classification of the Minority Shareholders’ Interest in the Consolidated Balance Sheets outside of equity under the caption “Redeemable non-controlling interest”. As at

September 30, 2017,

the value of the Redeemable non-controlling interest is

$1.1

million and is being accreted to the redemption value of

$1.2

million through

February 27, 2019. 

(b) eN om, Incorporated

On

January 20, 2017,

the Company entered into a Stock Purchase Agreement

(the “Purchase Agreement”) with its indirect wholly owned subsidiary, Tucows (Emerald), LLC, Rightside Group, Ltd., and Rightside Operating Co., pursuant to which Tucows (Emerald), LLC purchased from Rightside Operating Co. all of the issued and outstanding capital stock of eNom, Incorporated, a domain name registrar business. The acquisition provides Tucows additional scale and efficiency opportunities across its domain registrar operations. The purchase price was

$77.8

million, which represented the agreed upon purchase of

$83.5

million less an amount of

$5.7

million related to the working capital deficiency assessment on acquisition. The purchase price and the majority of the related acquisition costs were financed through borrowings under Facility D of the

2017

Amended Credit Facility agreement (note

7

).

On

June 13, 2017,

the Company entered into a First Amendment to Stock Purchase Agreement (the “Amendment”) by and among the Company, Tucows (Emerald), LLC, Ri

ghtside Group, Ltd. And Rightside Operating Co., to amend certain provisions in the Purchase Agreement. Pursuant to the Amendment, the definition of “Escrow Triggering Event” was revised to remove a change in control of the Company and the definition of “Minimum Cash Amount” was revised to mean

$5.35

million from

June 13, 2017

until the end of

April 20, 2018,

and

zero

thereafter.

The Company has prepared a preliminary purchase price allocation of the assets acquired and the liabilities assumed of eNom based on management

’s best estimates of fair value. The final purchase price allocation

may

vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumed liabilities.

 The preliminary purchase price allocation is pending the finalization of the fair value of taxation-related balances and for potential adjustments to assets and liabilities. We expect to finalize this determination on or before

December 31, 2017.

The following table shows the preliminary allocation of the purchase price for eNom

to the acquired identifiable assets and liabilities assumed:

Goodwill	$	66,481,100
Cash		1,594,217
Brand		12,400,000
Developed technology		3,900,000
Customer relationships		28,000,000
Prepaid domain registry fees		70,643,994
Other assets		10,170,789
Total assets		193,190,100
Deferred Revenue		(77,798,994	)
Deferred Tax Liabilities		(21,893,346	)
Other liabilities		(15,666,083	)
Total liabilities		(115,358,423	)
Preliminary consideration paid	$	77,831,677

As required by ASC

805,

Business Combinations, the Company has recorded deferred revenue at fair value at the acquisition date, which was determined by estimating the costs associated with customer support services and prepaid domain name registration fees to fulfill the contractual obligations over the remaining life of the contract at the acquisition date plus a normal profit margin.

The good

will related to this acquisition is primarily attributable to synergies expected to arise from the acquisition and is

not

tax deductible for tax purposes.

In connection with this acquisition, the C

ompany incurred total acquisition related costs of

$0.8

million of which

$0.3

million is

included in General & Administrative expenses in the Consolidated Statements of Operations for the

nine

months ended

September 30, 2017.

The following table presents selected unaudited pro forma information for the Company assuming the acquisition of eNom had occurred as of

January 1, 2016.

This pro forma information does

not

purport to represent what the Company

’s actual results would have been if the acquisition had occurred as of the date indicated or what results would be for any future periods.

	Unaudited		Unaudited
	Three months ended Sep 30,		Nine months ended Sep 30,
	2016		2017		2016
Net revenues	$	86,303,327	$	243,262,069	$	252,531,557
Net income		1,760,528		10,755,068		2,776,074
Basic earnings per common share		0.17		1.03		0.27
Diluted earnings per common share	$	0.17	$	1.00	$	0.27

XML

Note 5 - Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

5

. Derivative instruments and hedging activities:

Foreign currency forward contracts

In

October 2012,

the Company entered into a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, rent

, Canadian taxes and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. As part of its risk management strategy, the Company uses derivative instruments to hedge a portion of the foreign exchange risk associated with these costs. The Company does

not

use forward contracts for trading or speculative purposes. These forward contracts typically mature between

one

and

eighteen

months.

The Company has designated certain of these transactions as cash flow hedges of forecasted transactions. For certain contracts, as the critical terms of the hedging instrument and the entire hedged forecasted transaction are the same in accordance with ASC Topic

815,

the Company has been able to conclude that changes in fair value and cash flows attributable to the risk of being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, unrealized gains or losses on the effective portion of these contracts have been included within other comprehensive income. The fair value

of the contracts, as of

September 30, 2017,

is recorded as derivative instrument assets and derivative instrument liabilities.

As of

September 30, 2017,

the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was

$6.9

 million, of which

$6.2

 million were designated as hedges (

December 31, 2016 -

$26.6

 million of which

$24.0

 million were designated as hedges).

As of

 

September 30, 2017,

we had the following outstanding forward exchange contracts to trade U.S. dollars in exchange for Canadian dollars: 

Maturity date	Notional amount of U.S. dollars		Weighted average exchange rate of U.S. dollars		Fair value
October - December 2017		6,859,570		1.3478		559,663
	$	6,859,570		1.3478	$	559,663

Fair value of derivative instruments and

effect of derivative instruments on financial performance

The effect of these derivative instruments on our consolidated financial stat

ements were as follows (amounts presented do

not

include any income tax effects).

Fair value of derivative instruments in the consolidated balance sheets

		As of September 30 , 2017		As of December 31, 2016
Derivatives	Balance Sheet Location	Fair Value Asset (Liability)		Fair Value Asset (Liability)
Foreign currency forward contracts designated as cash flow hedges	Derivative instruments	$	505,232	$	155,560
Foreign currency forward contracts not designated as cash flow hedges	Derivative instruments	$	54,431	$	17,823
Total foreign currency forward contracts	Derivative instruments	$	559,663	$	172,888

Movement in

Accumulated Other Comprehensive Income ("AOCI") balance for the

three

months

ended

September

30,

2017

:

	Gains and losses on cash flow hedges			Tax impact			Total AOCI
Opening AOCI balance – June 30, 2017	$	517,894		$	(187,788	)	$	330,106
Other comprehensive income (loss) before reclassifications		485,480			(176,035	)		309,445
Amount reclassified from accumulated other comprehensive income		(498,142	)		180,626			(317,516	)
Other comprehensive income (loss) for the three months ended September 30, 2017		(12,662	)		4,591			(8,071	)
Ending AOCI balance – September 30, 2017	$	505,232		$	(183,197	)	$	322,035

Movement in Accumulated Other Comprehensive Income ("AOCI") balance for the

nine

months ended

September 

30

,

2017:

	Gains and losses on cash flow hedges			Tax impact			Total AOCI
Opening AOCI balance – December 31, 2016	$	155,560		$	(56,406	)	$	99,154
Other comprehensive income (loss) before reclassifications		1,001,634			(363,192	)		638,442
Amount reclassified from accumulated other comprehensive income		(651,962	)		236,401			(415,561	)
Other comprehensive income (loss) for the nine months ended September 30, 2017		349,672			(126,791	)		222,881
Ending AOCI balance – September 30, 2017	$	505,232		$	(183,197	)	$	322,035

Effects of derivative

instruments on income and other comprehensive income (OCI) for the

three

months ended

September

30,

2017

and

September

30,

2016

are as follows:

Derivatives in Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion)			Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income, (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)
				Operating expenses	$	432,021		Operating expenses	$	—
Foreign currency forward contracts for the three months ended September 30, 2017	$	(8,071	)	Cost of revenues	$	66,121		Cost of revenues		—
				Operating expenses	$	(156,743	)	Operating expenses	$	—
Foreign currency forward contracts for the three months ended September 30, 2016	$	73,091		Cost of revenues	$	(50,210	)	Cost of revenues		—

Effects of derivative instruments on income and other comprehensive income (OCI) for the

nine

months

ended

September

30,

2017

and

September

30,

2016

are as follows:

Derivatives in Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion)		Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income, (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)
			Operating expenses	$	560,971		Operating expenses	$	—
Foreign currency forward contracts for the nine months ended September 30, 2017	$	222,881	Cost of revenues	$	90,991		Cost of revenues		—
			Operating expenses	$	(617,572	)	Operating expenses	$	(47,242	)
Foreign currency forward contracts for the nine months ended September 30, 2016	$	1,063,242	Cost of revenues	$	(193,102	)	Cost of revenues		—

In addition to the above, for those foreign currency forward contracts

not

designated as hedges, the Company has recorded a gain of

$55,128

upon settlement and a loss of

$1,053

for the change in fair value of outstanding contracts for the

three

months end

ed

September 30, 2017,

in the consolidated statement of operations and comprehensive income. The Company has recorded a loss of

$39,401

upon settlement and a gain of

$20,113

for the change in fair value of the foreign currency forward contracts

not

designated as hedges for the

three

months ended

September 30, 2016,

in the consolidated statement of operations and comprehensive income.

The Company has recorded a gain of

$78,173

upon settlement and a gain of

$37,103

 for the change in fair value of outstanding contracts for the

nine

months ended

September 30, 2017,

in the consolidated statement of operations and comprehensive income. The Company has recorded a loss of

$0.1

million upon settlement and a gain of

$0.3

million for the change in fair value of the foreign currency forward contracts

not

designated as hedges for the

nine

months ended

September 30, 2016,

in the consolidated statement of operations and comprehensive income.

XML

Note 6 - Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

6

. Goodwill and Other Intangible Assets:

Goodwill

Goodwill represents the excess of the purchase price over the fair value of tangible

and identifiable intangible assets acquired and liabilities assumed in our acquisitions.

The

Company's Goodwill balance is

$87.5

million as of

September 30, 2017,

up

$66.5

million from

December 31, 2016,

as a result of the acquisition of eNom (note

4

(b)). The Company's goodwill relates

98%

(

$85.4

million) to its Domain Services operating segment and

2%

(

$2.1

million) to its Network Access Services operating segment.

Goodwill is

not

amortized, but is subject to an impairment

evaluation annually, or more frequently if impairment indicators are present.

Other Intangible Assets:

Intangible assets consist of network rights, brand, customer relationships, surname domain names and our portfolio of domain names. As reflected in the table below, these balances are being amortized on a straight-line basis over the estimated useful life

of the intangible assets, except for the surname domain names and direct navigation domain names, which have been determined to have an indefinite life and which are evaluated at least annually for impairment.

With regard to indefinite life intangible assets, as part of our normal renewal process we assessed that certain domain names that were acquired in the

June 2006

acquisition of Mailbank.com Inc. and that were up for renewal should

not

be renewed. For the

three

and

nine

months ended

September 30, 2017,

domain names with a book value of

$

1,500

were

not

renewed, respectively, as compared to domain names with a book value of

$2,866

and

$27,745

were

not

renewed for the

three

and

nine

months ended

September 30, 2016,

respectively. 

On

January 20, 2017,

the Company acquired eNom, a wholesale and retail domain registrar.

  The Company acquired the assets and liabilities of eNom including wholesale and retail brands, proprietary technology and the existing customer relationships. The Company has accounted for these on a fair value basis and each intangible asset is being amortized over the estimated useful life.  The amortization for the brands, technology and customer relationships are

7,

2

and

7

years, respectively. See note

4

(b) for further details. 

On

September 19, 2017,

the Company acquired the consumer related assets of Otono, Networks Inc. for consideration of

$2.3

million and assumed working capital liabilities of

$1.4

million. The intangible assets acquired relate to cust

omer relationships and are being amortized on a straight line basis over a period of

7

years.

A

summary of acquired intangible assets for the

three

months ended

September 30, 2017

is as follows:

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			4 - 7 years			2 years			15 years
Balances June 30, 2017	$	11,291,003		$	1,856,542		$	11,693,810		$	31,919,024		$	3,087,500		$	584,288		$	60,432,167
Acquisition of consumer related assets of Otono Networks, Inc.		-			-			-			2,294,111			-			-			2,294,111
Acquisition of customer relationships		-			-			-			90,187			-			-			90,187
Additions to/(disposals from) domain portfolio, net		(1,623	)		(7,774	)		-			-			-			-			(9,397	)
Amortization expense		-			-			(450,510	)		(1,295,413	)		(487,500	)		(11,532	)		(2,244,955	)
Balances September 30, 2017	$	11,289,380		$	1,848,768		$	11,243,300		$	33,007,909		$	2,600,000		$	572,756		$	60,562,113

A

summary of acquired intangible assets for the

nine

months ended

September 30, 2017

is as follows:

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			4 - 7 years			2 years			15 years
Balances December 31, 2016	$	11,295,221		$	1,869,088		$	5,210		$	6,198,811		$	-		$	605,463		$	19,973,793
Reclassifications		-			-			43,620			(45,509	)		-			1,889			-
Acquisition of Enom (note 4(b))		-			-			12,400,000			28,000,000			3,900,000			-			44,300,000
Acquisition of consumer related assets of Otono Networks, Inc.		-			-			-			2,294,111			-			-			2,294,111
Acquisition of customer relationships		-			-			-			90,187			-			-			90,187
Additions to/(disposals from) domain portfolio, net		(5,841	)		(20,320	)		-			-			-			-			(26,161	)
Amortization expense		-			-			(1,205,530	)		(3,529,691	)		(1,300,000	)		(34,596	)		(6,069,817	)
Balances September 30, 2017	$	11,289,380		$	1,848,768		$	11,243,300		$	33,007,909		$	2,600,000		$	572,756		$	60,562,113

The following table shows the estimated amortization expense

in future periods, assuming

no

further additions to acquired intangible assets are made:

	Year ending December 31,
Remainder of 2017	$	2,168,927
2018		9,166,244
2019		7,255,196
2020		7,092,696
2021		7,092,696
Thereafter		14,648,206
Total	$	47,423,965

As of

September 30, 2017,

the accumulated amortization for the definite life intangible assets was

$13.0

 million.

XML

Note 7 - Loan Payable

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

7

. Loan payable:

2017

Amended Credit Facility

On

January 20, 2017,

the Company entered into an amended

and restated secured Credit Agreement (the

“2017

Amended Credit Agreement”) with Bank of Montreal (“BMO” or the “Administrative Agent”), Royal Bank of Canada and Bank of Nova Scotia (collectively with “Lenders”) under which the Company increased its access to funds to an aggregate of

$140

million. This amendment and restatement to the Company’s

2016

Credit Facility (defined below), among other things, reduced the existing Tucows non-revolving facility (such existing non-revolving facility, together with other existing facilities, the “Existing Facilities”) from

$40.0

million to

$35.5

million, and established a new non-revolving credit facility of

$84.5

million

(the “Facility D”). The Company immediately drew down

$84.5

million under Facility D to fund the acquisition of eNom (note

4

(b)). As used herein, the

“2016

Credit Facility” refers to the credit facility

established under the Company’s secured credit agreement (the

“2016

Credit Agreement”) among the Company, BMO and the Lenders, dated as of

August 18, 2016.

In connection with the

2017

Amended Credit Agreement, the

Company incurred

$0.6

million of fees paid to lenders and debt issuance costs, which have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the credit facility agreement.

The obligation

s of the Company under the

2017

Amended Credit Facility are secured by a

first

priority lien on substantially all of the personal property and assets of the Company.

The

2017

Amended

Credit Facility has a

four

-year term. Under the

2017

Amended Credit Facility, the Company has access to an aggregate of up to

$140

million in funds that are available as follows:

● a $5 million revolving credit facility (“Facility A”);

● a $15 million revolving reducing t erm facility (“Facility B”);

● a $ 35.5 million non-revolving facility (“Facility C”); and

● a $ 84.5 million non-revolving facility (“Facility D”).

Borrowings under the

201

7

Amended Credit Facility accrue interest and standby fees at variable rates based on borrowing elections by the Company and the Company’s Total Funded Debt to EBITDA as described below. The purpose of Facility A is for general working capital and general corporate requirements, while Facility B and Facility C support share repurchases, acquisitions and capital expenditures associated with the Company’s Fiber to the Home program (“FTTH”). Facility D was provided and used for the acquisition of eNom.

The repayment terms for Facility A

require monthly interest payments with any final principal payment becoming due upon maturity of the

2017

Amended Credit Facility. Under the repayment terms for Facility B, at

December

31st

 of each year, balances drawn during the year that remain outstanding will become payable on a quarterly basis commencing the

first

quarter of the following year, for the period of amortization based on the purpose of the draw. For Facilities C and D, each draw will become payable beginning the

first

full quarter post initial draw for the period of amortization based on the purpose of the draw. The amortization periods for Facilities B, C and D are based on the purposes of the draws as follows: draws for share repurchases are repaid over

four

years, draws for acquisitions over

five

years and draws for FTTH capital expenditures over

seven

years. The

2017

Amended Credit Facility also includes a mechanism that is triggered based on the Company’s Total Funded Debt to EBITDA calculation at the end of each fiscal year. If Total Funded Debt to EBITDA exceeds

2.25:1

at

December 31

of each year during the term, the Company is obligated to make a repayment of

50%

of Excess Cash Flow as defined under the agreement.

The

2017

Amended Credit Facility contains customary representations and warranties, affirmative and negative

covenants, and events of default. The

2017

Amended Credit Facility requires that the Company to comply with the following financial covenants at all times, which are to be calculated on a rolling

four

quarter basis: (i) maximum Total Funded Debt to EBITDA Ratio of

3.00:1

until

September 30, 2017,

2.50:1

until

September 30, 2018

and

2.25:1

thereafter; and (ii) minimum Fixed Charge Coverage Ratio of

1.20:1.

Further, the Company’s maximum annual Capital Expenditures cannot exceed

$32.8

million per year, which limit will be reviewed on an annual basis. In addition, funded share repurchases are

not

to exceed

$20

million, or up to

$40

million so long as the total loans related to share repurchases do

not

exceed

1.5

times of trailing

twelve

months EBITDA. As at and for the period ending

September 30, 2017,

the Company was in compliance with these covenants.

On

June 6, 2017,

the Company entered into the First Amendment to First Amended and Restated Credit Agreement (the “First Amendment”) with BMO and the Lenders. Among other things, the First Amendment (i) increases the amount available for borrowing under “Facility C,” a committed, non-revolving credit facility by

$502,500,

which was the portion of Facility D which was

not

used by the Company to fund its acquisition of eNom, Incorporated and was cancelled in accordance with the Credit Agreement, (ii) allows the Company to maintain bank accounts with Commonwealth Bank of Australia, subject to certain restrictions, (iii) provides for an extension of time for the Company to transfer its bank accounts from Silicon Valley Bank, and (iv) amends the definition of “EBITDA” to provide for an add-back in respect of certain liabilities.

Borrowings under the

2017

Amended

Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to EBITDA ratio and the availment type as follows:

	If Total Funded Debt to EBITDA is:
Availment type or fee	Less than 1.00			Greater than or equal to 1.00 and less than 2.00			Greater than or equal to 2.00 and less than 2.25			Greater than or equal to 2.25
Canadian dollar borrowings based on Bankers ’ Acceptance or U.S. dollar borrowings based on LIBOR (Margin)		2.00	%		2.25	%		2.75	%		3.25	%
Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowings based on Base Rate (Margin)		0.75	%		1.00	%		1.50	%		2.00	%
Standby fees		0.40	%		0.45	%		0.55	%		0.65	%

The following table summarizes the Company

’s borrowings under the

2017

Amended Credit Facility as at

September 30, 2017:

	September 30, 2017			December 31, 2016
Facility B	$	-		$	6,000,000
Facility C		6,277,902			4,731,306
Facility D		76,048,200			-
Less: unamortized debt discount and issuance costs		(899,020	)		(482,498	)
Total loan payable		81,427,082			10,248,808
Less: loan payable, current portion		18,289,853			2,233,110
Loan payable, long-term portion	$	63,137,229		$	8,015,698

The following table summarizes our

 scheduled principal repayments as of

September 30, 2017:

Principal repayments
Remainder of 2017	$	4,572,463
2018		18,289,853
2019		18,289,853
2020		18,103,004
2021		17,542,457
Thereafter		5,528,472
	$	82,326,102

Other Credit Facilities

Prior to the Company entering into the

2016

Credit Facility, the Company had credit agreements (collectively the “Amended Credit Facility”) with BMO that were amended on

November 19, 2012,

and which provided it with access to

two

revolving demand loan facilities (the

“2012

Demand Loan Facilities”), a treasury risk management facility, an operating demand loan and a credit card facility. In connection with the

2016

Credit Facility, the Company repaid its outstanding indebtedness of the

2012

Demand Loan Facilities. With the settlement of the outstanding indebtedness, the

2012

Demand Loan Facilities and the operating demand loan were simultaneously terminated and the outstanding balances were fully repaid through advances on the

2016

Credit Facility. The Company continues to have access to the treasury risk management facility and credit card facility.

The treasury risk management facility under the Amended Credit Facility provides for a

$3.5

million settlement risk line to assist the Company with hedging Canadian dollar exposure through foreign exchange forward contracts and/or currency options. Under the terms of the Amended Credit Facility, the Company

may

enter into such agreements at market rates with terms

not

to exceed

18

 months. As of

September 30, 2017,

the Company held contracts in the amount of

$6.9

 million to trade U.S. dollars in exchange for Canadian dollars (note

5

).

During the

third

quarter of

2017,

the Company entered into a corporate credit card program with the Bank of Nova with credit limits of

$1.0

million for US Dollar credit cards and

CDN$0.5

million for Canadian Dollar credit cards.

XML

Note 8 - Income Taxes

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

8

. Income taxes

For the

three

months ended

September 30, 2017,

we recorded an income tax expense of

$1.8

million on income before income taxes of

$5.3

million, using an estimated effective tax rate for the fiscal year ending

December 31, 2017 (

“Fiscal

2017”

) adjusted for certain minimum state taxes as well as the inclusion of a

$0.4

million tax recovery related to the adoption of ASU

2016

-

09,

which requires all excess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense on a prospective basis

. Comparatively, for the

three

months ended

September 30, 2016,

the Company recorded a provision for income taxes of

$2.5

million on income before taxes of

$7.2

million, using an estimated effective tax rate for the

2016

fiscal year.

For the

nine

months en

ded

September 30, 2017,

we recorded an income tax expense of

$2.8

million on income before income taxes of

$13.9

million, using an estimated effective tax rate for Fiscal

2017

adjusted for certain minimum state taxes as well as the inclusion of a

$2.6

million tax recovery related to the adoption of ASU

2016

-

09,

which requires all excess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense on a prospective basis

. Comparatively, for the

nine

months ended

September 30, 2016,

the Company recorded a provision for income taxes of

$6.5

million on income before taxes of

$19.7

million, using an estimated effective tax rate for the

2016

fiscal year.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. The Company considers projected future taxable income, uncertainties related to the industry in which we operate, and tax planning strategies in making this assessment.

On

January 20, 2017,

the Company acquired eNom

and as part of the acquisition, the Company assumed

$21.9

million of deferred tax liabilities (note

4

(b)). 

The Company follows the provisions of FASB ASC Topic

740,

Income Taxes to account for income tax exposures. The application of this interpretation requires a

two

-step process that separates recognition of uncertain tax benefits from measurement thereof.

The Company

had

nil

gross unrecognized tax benefit as of

September 30, 2017

and approximately

$0.1

million as of

December 31, 2016.

During the

nine

months ended

September 30, 2017,

the Company settled the outstanding tax matter relating to prior Pennsylvania state franchise taxes under the state’s tax amnesty program.

The Company recognizes accrued interest and penalties related to income taxes in income tax expense. The Company

did

not

have significant interest and penalties accrued at

September 30, 2017

and

December 31, 2016,

respectively.

XML

Note 9 - Basic and Diluted Earnings Per Common Share

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

9

. Basic and diluted earnings per common share:

Basic earnings per common share has been calculated by dividing net income for the period by the weighted average number of common shares outstanding during each period. Diluted earnings per share has been calculated by dividing net income for the period by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In computing diluted earnings per share, the treasury stock method is used to determine the number of shares assumed to be purchased from the conversion of common share equivalents or the proceeds of option exercises.

The following table is a summary of the basic and diluted earnings per common share:

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Numerator for basic and diluted earnings per common share:
Net income for the period	$	3,439,266	$	4,741,279	$	11,127,241	$	13,250,303
Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding		10,564,311		10,432,763		10,522,841		10,549,056
Effect of outstanding stock options		221,031		186,242		262,209		187,719
Diluted weighted average number of shares outstanding		10,785,342		10,619,005		10,785,050		10,736,775
Basic earnings per common share	$	0.33	$	0.45	$	1.06	$	1.26
Diluted earnings per common share	$	0.32	$	0.45	$	1.03	$	1.23

For

the

three

months ended

September 30, 2017,

outstanding options to purchase

345,200

common shares were

not

included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares (

three

months ended

September 30, 2016 –

76,750

).

For the

nine

months ended

September 30, 2017,

outstanding options to purchase

349,700

common shares were

not

included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares

(

nine

months ended

September 30, 2016 –

95,950

).

During

the

three

and

nine

months ended

September 30, 2017,

no

common shares were repurchased and cancelled under the terms of our stock repurchase program announced in

March 2017.

During the

three

months ended

September 30, 2016,

no

common shares were repurchased and for the

nine

months ended

September 30, 2016,

308,416

common shares were repurchased and cancelled under the terms of our stock repurchase program announced in

February

 

2016.

The computation of earnings per share and diluted earnings per share for the

three

and

nine

months ended

September 30, 2017

and

2016

include reductions in the number of shares outstanding due to these repurchases.

XML

Note 10 - Segment Reporting

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

1

0

. 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 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 

10

-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 September 30, 2017
Net Revenues	$	22,993,034	$	62,015,450	$	85,008,484
Cost of revenues
Cost of revenues		13,310,922		47,755,839		61,066,761
Network expenses		446,126		2,014,570		2,460,696
Depreciation of property and equipment		578,257		245,184		823,441
Amortization of intangible assets		11,532		487,500		499,032
Total cost of revenues		14,346,837		50,503,093		64,849,930
Gross Profit		8,646,197		11,512,357		20,158,554
Expenses:
Sales and marketing						7,578,414
Technical operations and development						1,910,147
General and administrative						2,852,345
Depreciation of property and equipment						154,638
Amortization of intangible assets						1,745,923
Impairment of indefinite life intangible assets						1,500
Loss (gain) on currency forward contracts						(54,075	)
Income from operations						5,969,662
Other income (expenses), net						(707,029	)
Income before provision for income taxes					$	5,262,633

	Network Access		Domain Name Services		Consolidated Totals
Three months ended September 30, 2016
Net Revenues	$	19,253,063	$	29,811,264	$	49,064,327
Cost of revenues
Cost of revenues		9,589,183		21,257,485		30,846,668
Network expenses		507,128		780,492		1,287,620
Depreciation of property and equipment		258,042		20,704		278,746
Amortization of intangible assets		13,421		-		13,421
Total cost of revenues		10,367,774		22,058,681		32,426,455
Gross Profit		8,885,289		7,752,583		16,637,872
Expenses:
Sales and marketing						5,479,445
Technical operations and development						1,270,107
General and administrative						2,166,217
Depreciation of property and equipment						178,687
Amortization of intangible assets						279,126
Impairment of indefinite life intangible assets						2,866
Loss (gain) on currency forward contracts						22,475
Income from operations						7,238,949
Other income (expenses), net						(5,021	)
Income before provision for income taxes					$	7,233,928

	Network Access		Domain Name Services		Consolidated Totals
Nine months ended September 30, 2017
Net Revenues	$	63,559,792	$	175,240,055	$	238,799,847
Cost of revenues
Cost of revenues		35,389,553		134,433,264		169,822,817
Network expenses		1,397,832		5,666,626		7,064,458
Depreciation of property and equipment		1,494,299		634,118		2,128,417
Amortization of intangible assets		34,596		1,300,000		1,334,596
Total cost of revenues		38,316,280		142,034,008		180,350,288
Gross Profit		25,243,512		33,206,047		58,449,559
Expenses:
Sales and marketing						22,244,961
Technical operations and development						5,402,385
General and administrative						9,596,298
Depreciation of property and equipment						485,648
Amortization of intangible assets						4,735,221
Impairment of indefinite life intangible assets						1,500
Loss (gain) on currency forward contracts						(115,276	)
Income from operations						16,098,822
Other income (expenses), net						(2,190,673	)
Income before provision for income taxes					$	13,908,149

	Network Access		Domain Name Services		Consolidated Totals
Nine months ended September 30, 2016
Net Revenues	$	55,020,436	$	85,993,893	$	141,014,329
Cost of revenues
Cost of revenues		28,386,395		61,059,098		89,445,493
Network expenses		941,451		2,983,926		3,925,377
Depreciation of property and equipment		655,104		321,315		976,419
Amortization of intangible assets		36,485		-		36,485
Total cost of revenues		30,019,435		64,364,339		94,383,774
Gross Profit		25,001,001		21,629,554		46,630,555
Expenses:
Sales and marketing						15,174,619
Technical operations and development						3,445,118
General and administrative						7,497,752
Depreciation of property and equipment						328,877
Amortization of intangible assets						613,041
Impairment of indefinite life intangible assets						27,745
Loss (gain) on currency forward contracts						(96,993	)
Income from operations						19,640,396
Other income (expenses), net						85,919
Income before provision for income taxes					$	19,726,315

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

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Network Access Services:
Mobile Services	$	21,748,809	$	18,374,906	$	60,090,266	$	52,287,808
Other Services		1,244,225		878,157		3,469,526		2,732,628
Total Network Access Services		22,993,034		19,253,063		63,559,792		55,020,436
Domain Services:
Wholesale
Domain Services		47,769,779		22,955,731		135,411,688		65,879,375
Value Added Services		4,401,704		2,226,977		14,034,456		6,834,086
Total Wholesale		52,171,483		25,182,708		149,446,144		72,713,461
Retail		8,872,984		3,721,032		22,937,606		10,747,456
Portfolio		970,983		907,524		2,856,305		2,532,976
Total Domain Services		62,015,450		29,811,264		175,240,055		85,993,893
	$	85,008,484	$	49,064,327	$	238,799,847	$	141,014,329

During the

three

and

nine

months ended

September 30, 2017

and

2016,

no

customer accounted for more than

10%

of total revenue. As at

September 30, 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 September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Network Access Services:
Mobile Services	$	12,365,383	$	9,087,274	$	32,634,348	$	27,026,242
Other Services		945,539		501,909		2,755,205		1,360,153
Total Network Access Services		13,310,922		9,589,183		35,389,553		28,386,395
Domain Services:
Wholesale
Domain Services		42,294,131		18,934,555		119,206,649		54,215,215
Value Added Services		671,291		463,369		1,823,711		1,401,821
Total Wholesale		42,965,422		19,397,924		121,030,360		55,617,036
Retail		4,610,745		1,727,867		12,775,941		4,968,659
Portfolio		179,672		131,694		626,963		473,403
Total Domain Services		47,755,839		21,257,485		134,433,264		61,059,098
Network Expenses:
Network, other costs		2,460,696		1,287,620		7,064,458		3,925,377
Network, depreciation and amortization costs		1,322,473		292,167		3,463,013		1,012,904
		3,783,169		1,579,787		10,527,471		4,938,281
	$	64,849,930	$	32,426,455	$	180,350,288	$	94,383,774

(d)

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

	September 30, 2017		December 31, 2016
Canada	$	1,169,409	$	1,010,427
United States		21,036,074		12,398,961
Germany		27,387		41,050
	$	22,232,870	$	13,450,438

(e)

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

	September 30, 2017		December 31, 2016
Canada	$	7,522,264	$	5,850,596
United States		39,730,601		633,798
Germany		171,100		325,090
	$	47,423,965	$	6,809,484

(f)

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

	September 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
Nine months ended September 30, 2017	$	164,145	$	3,741	$	-	$	167,886
Year ended December 31, 2016	$	122,095	$	42,050	$	-	$	164,145

XML

Note 11 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

1

1

. Commitments and contingencies:

The Company is involved in various legal claims and lawsuits in connection with its ordinary business operations. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions or claims outstanding or pending as of

September 30, 2017

cannot be predicted with certainty, management does

not

believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company's financial position.

XML

Note 12 - Stockholders' Equity

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

1

2

. Stockholders’ Equity:

The fo

llowing unaudited table summarizes stockholders' equity transactions for the

three

-month period ended

September 30, 2017: 

												Accumulated
						Additional			Retained			other			Total
				Common stock		paid in			earnings			comprehensive			stockholders'
	Number			Amount		capital			(deficit)			income (loss)			equity
Balances, June 30, 2017		10,552,401		$	15,125,326	$	1,607,476		$	28,062,438		$	330,106		$	45,125,346
Exercise of stock options		30,051			159,307		(91,241	)		-			-			68,066
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration		(4,903	)				(116,956	)		-			-			(116,956	)
Stock-based compensation (note 13)		-			-		202,902			-			-			202,902
Net income		-			-		-			3,439,266			-			3,439,266
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.		-			-		-			(12,600	)		-			(12,600	)
Other comprehensive income (loss)		-			-		-			-			(8,071	)		(8,071	)
Balances, September 30, 2017		10,577,549		$	15,284,633	$	1,602,181		$	31,489,104		$	322,035		$	48,697,953

The following unaudited table summarizes stockholders' equity transactions for the

nine

-month period ended

September 30, 2017: 

												Accumulated
						Additional			Retained			other		Total
				Common stock		paid in			earnings			comprehensive		stockholders'
	Number			Amount		capital			(deficit)			income (loss)		equity
Balances, December 31, 2016		10,461,574		$	14,460,500	$	2,857,921		$	20,399,511		$	99,154	$	37,817,086
Exercise of stock options		165,673			824,133		(651,230	)		-			-		172,903
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration		(49,698	)		-		(1,438,497	)		-			-		(1,438,497	)
Stock-based compensation (note 13)		-			-		833,987			-			-		833,987
Net income		-			-		-			11,127,241			-		11,127,241
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.		-			-		-			(37,648	)		-		(37,648	)
Other comprehensive income (loss)		-			-		-			-			222,881		222,881
Balances, September 30, 2017		10,577,549		$	15,284,633	$	1,602,181		$	31,489,104		$	322,035	$	48,697,953

On

March 1,

 

2017,

the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to

$40

million of its common stock in the open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on

March 1, 

2017

and will terminate on or before

February 28, 2018.

During the

three

and

nine

months ended

September 30, 2017,

the Company did

not

repurchase any shares under this program.

On

February 

9,

 

2016,

the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to

$40

million of its common stock in the open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on

February 

10,

 

2016

and terminated on

February 9, 2017.

The Company repurchased

308,416

shares under this program for the

nine

months ended

September 30, 2016

for a total of

$7.2

million.

On

February 11, 2015,

the Company announced that its Board of Directors had approved a stock buyback program to repurchase up to

$20

million of its common stock in the open market. Purchases were made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commen

ced on

February 

16,

 

2015

and terminated on

February 9, 2016.

The Company did

not

repurchase any shares under this program during the

nine

months ended

September 30, 2016.

XML

Note 13 - Share-based Payments

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

1

3

. Share-based payments

(a)

    Stock options

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, consistent with the guidance on stock compensation. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatility of the Company's common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of our common shares at the date of grant.

Details of stock option transactions for

the

three

months ended

September 30, 2017

and

September 30, 2016

are as follows:

	Three months ended September 30,					Three months ended September 30,
	2017					2016
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		363,608		$	16.79		502,590		$	11.30
Granted		327,150			55.49		18,750			27.53
Exercised		(30,051	)		6.67		(31,065	)		38.00
Forfeited		(1,050	)		51.87		-			-
Expired		-			-		-			-
Outstanding, end of period		659,657			36.39		490,275			12.39
Options exercisable, end of period		223,043		$	14.30		306,553		$	9.16

Details of stock option transactions for the

nine

months ended

September 30, 2017

and

September 30, 2016

are as follows:

	Nine months ended September 30,					Nine months ended September 30,
	2017					2016
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		474,501		$	12.67		513,366		$	9.24
Granted		360,025			54.13		81,750			22.66
Exercised		(165,673	)		7.79		(94,602	)		3.75
Forfeited		(9,196	)		22.08		(9,489	)		17.23
Expired		-			-		(750	)		3.76
Outstanding, end of period		659,657			36.39		490,275			12.39
Options exercisable, end of period		223,043		$	14.30		306,553		$	9.16

As of

September 30, 2017,

the exercise prices, weighted average remaining contractual life and intrinsic values of outstanding options were as follows:

			Options outstanding								Options exercisable
Exercise price			Number outstanding		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value		Number exercisable		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value
$ 2.92	-	$ 8.92		96,644	$	6.72		1.9	$	5,008,805		96,644	$	6.72		1.9	$	5,008,805
$10.16	-	$19.95		122,938		16.29		3.7		5,195,152		76,399		15.99		3.5		3,251,248
$21.10	-	$27.53		81,000		23.65		4.4		2,826,893		45,000		25.39		3.7		1,492,313
$35.25	-	$37.35		14,375		35.89		5.7		325,750		5,000		35.25		6.2		116,500
$43.15	-	$47.00		18,500		44.19		6.3		265,650		-		-		-		-
$53.55	-	$55.65		326,200		55.49		6.7		998,480		-		-		-		-
				659,657	$	36.39		5.1	$	14,620,730		223,043	$	14.30		2.9	$	9,868,866

Total unrecognized compensation

cost relating to unvested stock options at

September 30, 2017

was approximately

$7.0

 million and is expected to be recognized over a weighted average period of

3.1

years.

The Company recorded stock-based

compensation of

$0.2

million and

$0.8

million for the

three

and

nine

months ended

September 30, 2017

and 

$0.2

million and

$0.6

million for the

three

and

nine

months ended

September 30, 2016,

respectively.

The Company has

not

capitalized any stock-based compensation expense as part of the cost of an asset.

XML

Note 14 - Fair Value Measurement

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

1

4

. Fair value measurement

ASC Topic

820,

“

Fair Value Measurements and Disclosures”

establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into

three

broad levels. Level

1

inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level

2

inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level

3

inputs are unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following table provides a

summary of the fair values of the Company's derivative instrument assets and liabilities measured at fair value on a recurring basis at

September 30, 2017:

	September 30, 2017
	Fair Value Measurement Using						Assets (Liabilities)
	Level 1		Level 2		Level 3		at Fair value
Derivative instrument asset	$	-	$	559,663	$	-	$	559,663

The following table provides a

summary of the fair values of the Company's derivative instrument assets measured at fair value on a recurring basis as at

December 31, 2016:

	December 31, 2016
	Fair Value Measurement Using						Assets (Liabilities)
	Level 1		Level 2		Level 3		at Fair value
Derivative instrument asset	$	-	$	172,888	$	-	$	172,888

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accreditation fees payable, customer deposits, loan payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of the instruments.

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements Adopted

On

January 1,

201

7,

the Company adopted Accounting Standards Updates ("ASU") 

No.

2016

-

05,

 

Derivatives and Hedging (Topic

815

) and ASU

2015

-

16,

Simplifying the Accounting for Measurement-Period Adjustments.

The adoption of these updates did

not

have a significant impact on the consolidated financial statements.

In

January 2017,

the Company adopted Accounting Standards Update (“ASU”)

No.

2017

-

04,

Intangibles – Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

(“ASU

2017

-

01”

), which simplifies the current

two

-step test to determine the amount, if any, of goodwill impairment. This update removes the

second

step of the quantitative test. An entity will apply a

one

-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying over its fair value,

not

to exceed the total amount of goodwill allocated to the reporting unit. The update will be applied to the Company's goodwill impairment evaluation for the year ended

December 31, 2017.

On

January 1, 2017,

the Company also adopted ASU

No.

2016

-

09,

Stock Compensation (Topic

718

)

, which simplifies the presentation of several aspects of the accounting for employee share-based payment transactions. The areas for simplification include the income tax consequences, accounting for forfeitures, and classification on the statement of cash flows. The impacts of the adoption of ASU

2016

-

09

on our consolidated financial statements are as follows:

● Accounting for Income Taxes – the standard requires that all excess tax benefits and tax deficiencies related to employee share-based payments are recognized through income tax expense on a prospective basis, which resulted in the recognition of $0.4 million and $2.6 million in excess tax benefits as a reduction of tax expense related to employee share-based payments during the three and nine months ended September 30, 2017, respectively;

● Cash Flow Classification – as a result of the new standard, all excess tax benefits related to employee share based payments which have been historically shown as a financing activity, should now be presented as an operating activity along with other income tax cash flows. Additionally, the standard requires that cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. The Company elected to apply both changes on a retrospective basis such that the comparative period is presented on a consistent basis as the current presentation; and

● Forfeitures – the standard allows for an entity-wide accounting policy election to either estimate the number of awards that are not expected to vest because the requisite service period will not be rendered, or to account for forfeitures as they occur. Prior to the adoption of 2016 - 09 the Company estimated forfeitures for the purpose of accounting for stock-based compensation. Beginning in the quarter ending March 31, 2017, the Company utilized the election to account for forfeitures as incurred. In accordance with the provisions of the new standard, the change has been adopted on a modified retrospective basis; however, the cumulative adjustment to opening retained earnings was immaterial.  

Recent Accounting Pronouncements

Not

Yet Adopted

In

January 2017,

the FASB issued ASU

No.

2017

-

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business

("ASU

2017

-

01"

), which clarified the definition of a business with objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. The amendment update provides a screen to determine when a series of integrated activities is

not

a business. If the screen is

not

met, it

first

requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and

second

removes the evaluation of whether a market participant could replace the missing elements. This ASU is effective for annual and interim reporting periods beginning after

December 15, 2017.

The Company is currently in the process of evaluating the impact that the adoption of ASU

2017

-

01

will have on its consolidated financial statements.

In

May 2014,

the

 FASB issued ASU

No.

2014

-

09,

 Revenue from Contracts with Customers (Topic

606

) ("ASU

2014

-

09"

), which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP.  The new standard provides a single principles-based,

five

-step model to be applied to all contracts with customers, which steps are to (

1

) identify the contract(s) with the customer, (

2

) identify the performance obligations in the contracts, (

3

) determine the transaction price, (

4

) allocate the transaction price to the performance obligations in the contracts and (

5

) recognize revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. The new standard will be effective for the Company for the interim and annual reporting periods beginning after

December 

15,

 

2017

(

January 

1,

 

2018

for the Company). Companies can transition to the standards either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of evaluating the impact of transition methods. Based on continuing analysis, we do

not

believe adoption of the updated standard will have a material impact as the Company’s mobile and fixed internet services are on month to month contracts with minimal device subsidization and our wholesale and retail domain registration services recognize revenue over the term of the services provided.

In

August 2017,

the FASB issued ASU

No.

2017

-

12,

Derivatives and Hedging (Topic

815

): Targeted Improvements to Accounting for Hedging Activities

("ASU

2017

-

12”

), which better aligns an entity’s risk management activities and financial reporting for hedging relationship through changes to both the designation and measurement guidance for qualifying hedging relationships and presentation of hedge results.  The new standard expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and hedged item in the financial statements.  This ASU is effective for annual and interim reporting periods beginning after

December 15, 2018.

The Company is currently in the process of evaluating the impact that the adoption of ASU

2017

-

12

will have on its consolidated financial statements.

In

February 2016,

th

e FASB issued ASU

No.

2016

-

02,

 

Leases (Topic

842

)

. The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. ASU

2016

-

02

requires the recognition on the balance sheet of a lease liability to make lease payments by lessees and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance will also require significant additional disclosure about the amount, timing and uncertainty of cash flows from leases. The new guidance is effective for annual and interim reporting periods beginning after

December 15, 2018 (

January 1, 2019

for the Company). The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company will adopt this guidance in the

first

quarter of fiscal

2019

and is in the process of evaluating the impact of the adoption of ASU

2016

-

02

will have on its consolidated financial statements.

XML

Note 4 - Acquisitions (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Goodwill	$	66,481,100
Cash		1,594,217
Brand		12,400,000
Developed technology		3,900,000
Customer relationships		28,000,000
Prepaid domain registry fees		70,643,994
Other assets		10,170,789
Total assets		193,190,100
Deferred Revenue		(77,798,994	)
Deferred Tax Liabilities		(21,893,346	)
Other liabilities		(15,666,083	)
Total liabilities		(115,358,423	)
Preliminary consideration paid	$	77,831,677

Business Acquisition, Pro Forma Information [Table Text Block]

	Unaudited		Unaudited
	Three months ended Sep 30,		Nine months ended Sep 30,
	2016		2017		2016
Net revenues	$	86,303,327	$	243,262,069	$	252,531,557
Net income		1,760,528		10,755,068		2,776,074
Basic earnings per common share		0.17		1.03		0.27
Diluted earnings per common share	$	0.17	$	1.00	$	0.27

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Note 5 - Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Derivative Instruments [Table Text Block]

Maturity date	Notional amount of U.S. dollars		Weighted average exchange rate of U.S. dollars		Fair value
October - December 2017		6,859,570		1.3478		559,663
	$	6,859,570		1.3478	$	559,663

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

		As of September 30 , 2017		As of December 31, 2016
Derivatives	Balance Sheet Location	Fair Value Asset (Liability)		Fair Value Asset (Liability)
Foreign currency forward contracts designated as cash flow hedges	Derivative instruments	$	505,232	$	155,560
Foreign currency forward contracts not designated as cash flow hedges	Derivative instruments	$	54,431	$	17,823
Total foreign currency forward contracts	Derivative instruments	$	559,663	$	172,888

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Gains and losses on cash flow hedges			Tax impact			Total AOCI
Opening AOCI balance – June 30, 2017	$	517,894		$	(187,788	)	$	330,106
Other comprehensive income (loss) before reclassifications		485,480			(176,035	)		309,445
Amount reclassified from accumulated other comprehensive income		(498,142	)		180,626			(317,516	)
Other comprehensive income (loss) for the three months ended September 30, 2017		(12,662	)		4,591			(8,071	)
Ending AOCI balance – September 30, 2017	$	505,232		$	(183,197	)	$	322,035

	Gains and losses on cash flow hedges			Tax impact			Total AOCI
Opening AOCI balance – December 31, 2016	$	155,560		$	(56,406	)	$	99,154
Other comprehensive income (loss) before reclassifications		1,001,634			(363,192	)		638,442
Amount reclassified from accumulated other comprehensive income		(651,962	)		236,401			(415,561	)
Other comprehensive income (loss) for the nine months ended September 30, 2017		349,672			(126,791	)		222,881
Ending AOCI balance – September 30, 2017	$	505,232		$	(183,197	)	$	322,035

Derivative Instruments, Gain (Loss) [Table Text Block]

Derivatives in Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion)			Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income, (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)
				Operating expenses	$	432,021		Operating expenses	$	—
Foreign currency forward contracts for the three months ended September 30, 2017	$	(8,071	)	Cost of revenues	$	66,121		Cost of revenues		—
				Operating expenses	$	(156,743	)	Operating expenses	$	—
Foreign currency forward contracts for the three months ended September 30, 2016	$	73,091		Cost of revenues	$	(50,210	)	Cost of revenues		—

Derivatives in Cash Flow Hedging Relationship	Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative (Effective Portion)		Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income, (Effective Portion)			Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing)
			Operating expenses	$	560,971		Operating expenses	$	—
Foreign currency forward contracts for the nine months ended September 30, 2017	$	222,881	Cost of revenues	$	90,991		Cost of revenues		—
			Operating expenses	$	(617,572	)	Operating expenses	$	(47,242	)
Foreign currency forward contracts for the nine months ended September 30, 2016	$	1,063,242	Cost of revenues	$	(193,102	)	Cost of revenues		—

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Note 6 - Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Intangible Assets and Goodwill [Table Text Block]

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			4 - 7 years			2 years			15 years
Balances June 30, 2017	$	11,291,003		$	1,856,542		$	11,693,810		$	31,919,024		$	3,087,500		$	584,288		$	60,432,167
Acquisition of consumer related assets of Otono Networks, Inc.		-			-			-			2,294,111			-			-			2,294,111
Acquisition of customer relationships		-			-			-			90,187			-			-			90,187
Additions to/(disposals from) domain portfolio, net		(1,623	)		(7,774	)		-			-			-			-			(9,397	)
Amortization expense		-			-			(450,510	)		(1,295,413	)		(487,500	)		(11,532	)		(2,244,955	)
Balances September 30, 2017	$	11,289,380		$	1,848,768		$	11,243,300		$	33,007,909		$	2,600,000		$	572,756		$	60,562,113

	Surname domain names			Direct navigation domain names			Brand			Customer relationships			Technology			Network rights			Total
Amortization period	indefinite life			indefinite life			7 years			4 - 7 years			2 years			15 years
Balances December 31, 2016	$	11,295,221		$	1,869,088		$	5,210		$	6,198,811		$	-		$	605,463		$	19,973,793
Reclassifications		-			-			43,620			(45,509	)		-			1,889			-
Acquisition of Enom (note 4(b))		-			-			12,400,000			28,000,000			3,900,000			-			44,300,000
Acquisition of consumer related assets of Otono Networks, Inc.		-			-			-			2,294,111			-			-			2,294,111
Acquisition of customer relationships		-			-			-			90,187			-			-			90,187
Additions to/(disposals from) domain portfolio, net		(5,841	)		(20,320	)		-			-			-			-			(26,161	)
Amortization expense		-			-			(1,205,530	)		(3,529,691	)		(1,300,000	)		(34,596	)		(6,069,817	)
Balances September 30, 2017	$	11,289,380		$	1,848,768		$	11,243,300		$	33,007,909		$	2,600,000		$	572,756		$	60,562,113

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

	Year ending December 31,
Remainder of 2017	$	2,168,927
2018		9,166,244
2019		7,255,196
2020		7,092,696
2021		7,092,696
Thereafter		14,648,206
Total	$	47,423,965

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Note 7 - Loan Payable (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Standby Fees Based on Total Funded Debt to EBITDA Ratio [Table Text Block]

	If Total Funded Debt to EBITDA is:
Availment type or fee	Less than 1.00			Greater than or equal to 1.00 and less than 2.00			Greater than or equal to 2.00 and less than 2.25			Greater than or equal to 2.25
Canadian dollar borrowings based on Bankers ’ Acceptance or U.S. dollar borrowings based on LIBOR (Margin)		2.00	%		2.25	%		2.75	%		3.25	%
Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowings based on Base Rate (Margin)		0.75	%		1.00	%		1.50	%		2.00	%
Standby fees		0.40	%		0.45	%		0.55	%		0.65	%

Schedule of Debt [Table Text Block]

	September 30, 2017			December 31, 2016
Facility B	$	-		$	6,000,000
Facility C		6,277,902			4,731,306
Facility D		76,048,200			-
Less: unamortized debt discount and issuance costs		(899,020	)		(482,498	)
Total loan payable		81,427,082			10,248,808
Less: loan payable, current portion		18,289,853			2,233,110
Loan payable, long-term portion	$	63,137,229		$	8,015,698

Schedule of Maturities of Long-term Debt [Table Text Block]

Principal repayments
Remainder of 2017	$	4,572,463
2018		18,289,853
2019		18,289,853
2020		18,103,004
2021		17,542,457
Thereafter		5,528,472
	$	82,326,102

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Note 9 - Basic and Diluted Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Numerator for basic and diluted earnings per common share:
Net income for the period	$	3,439,266	$	4,741,279	$	11,127,241	$	13,250,303
Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding		10,564,311		10,432,763		10,522,841		10,549,056
Effect of outstanding stock options		221,031		186,242		262,209		187,719
Diluted weighted average number of shares outstanding		10,785,342		10,619,005		10,785,050		10,736,775
Basic earnings per common share	$	0.33	$	0.45	$	1.06	$	1.26
Diluted earnings per common share	$	0.32	$	0.45	$	1.03	$	1.23

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Note 10 - Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Condensed Income Statement [Table Text Block]

	Network Access		Domain Name Services		Consolidated Totals
Three months ended September 30, 2017
Net Revenues	$	22,993,034	$	62,015,450	$	85,008,484
Cost of revenues
Cost of revenues		13,310,922		47,755,839		61,066,761
Network expenses		446,126		2,014,570		2,460,696
Depreciation of property and equipment		578,257		245,184		823,441
Amortization of intangible assets		11,532		487,500		499,032
Total cost of revenues		14,346,837		50,503,093		64,849,930
Gross Profit		8,646,197		11,512,357		20,158,554
Expenses:
Sales and marketing						7,578,414
Technical operations and development						1,910,147
General and administrative						2,852,345
Depreciation of property and equipment						154,638
Amortization of intangible assets						1,745,923
Impairment of indefinite life intangible assets						1,500
Loss (gain) on currency forward contracts						(54,075	)
Income from operations						5,969,662
Other income (expenses), net						(707,029	)
Income before provision for income taxes					$	5,262,633

	Network Access		Domain Name Services		Consolidated Totals
Three months ended September 30, 2016
Net Revenues	$	19,253,063	$	29,811,264	$	49,064,327
Cost of revenues
Cost of revenues		9,589,183		21,257,485		30,846,668
Network expenses		507,128		780,492		1,287,620
Depreciation of property and equipment		258,042		20,704		278,746
Amortization of intangible assets		13,421		-		13,421
Total cost of revenues		10,367,774		22,058,681		32,426,455
Gross Profit		8,885,289		7,752,583		16,637,872
Expenses:
Sales and marketing						5,479,445
Technical operations and development						1,270,107
General and administrative						2,166,217
Depreciation of property and equipment						178,687
Amortization of intangible assets						279,126
Impairment of indefinite life intangible assets						2,866
Loss (gain) on currency forward contracts						22,475
Income from operations						7,238,949
Other income (expenses), net						(5,021	)
Income before provision for income taxes					$	7,233,928

	Network Access		Domain Name Services		Consolidated Totals
Nine months ended September 30, 2017
Net Revenues	$	63,559,792	$	175,240,055	$	238,799,847
Cost of revenues
Cost of revenues		35,389,553		134,433,264		169,822,817
Network expenses		1,397,832		5,666,626		7,064,458
Depreciation of property and equipment		1,494,299		634,118		2,128,417
Amortization of intangible assets		34,596		1,300,000		1,334,596
Total cost of revenues		38,316,280		142,034,008		180,350,288
Gross Profit		25,243,512		33,206,047		58,449,559
Expenses:
Sales and marketing						22,244,961
Technical operations and development						5,402,385
General and administrative						9,596,298
Depreciation of property and equipment						485,648
Amortization of intangible assets						4,735,221
Impairment of indefinite life intangible assets						1,500
Loss (gain) on currency forward contracts						(115,276	)
Income from operations						16,098,822
Other income (expenses), net						(2,190,673	)
Income before provision for income taxes					$	13,908,149

	Network Access		Domain Name Services		Consolidated Totals
Nine months ended September 30, 2016
Net Revenues	$	55,020,436	$	85,993,893	$	141,014,329
Cost of revenues
Cost of revenues		28,386,395		61,059,098		89,445,493
Network expenses		941,451		2,983,926		3,925,377
Depreciation of property and equipment		655,104		321,315		976,419
Amortization of intangible assets		36,485		-		36,485
Total cost of revenues		30,019,435		64,364,339		94,383,774
Gross Profit		25,001,001		21,629,554		46,630,555
Expenses:
Sales and marketing						15,174,619
Technical operations and development						3,445,118
General and administrative						7,497,752
Depreciation of property and equipment						328,877
Amortization of intangible assets						613,041
Impairment of indefinite life intangible assets						27,745
Loss (gain) on currency forward contracts						(96,993	)
Income from operations						19,640,396
Other income (expenses), net						85,919
Income before provision for income taxes					$	19,726,315

Schedule of Operating Income by Revenue Stream [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Network Access Services:
Mobile Services	$	21,748,809	$	18,374,906	$	60,090,266	$	52,287,808
Other Services		1,244,225		878,157		3,469,526		2,732,628
Total Network Access Services		22,993,034		19,253,063		63,559,792		55,020,436
Domain Services:
Wholesale
Domain Services		47,769,779		22,955,731		135,411,688		65,879,375
Value Added Services		4,401,704		2,226,977		14,034,456		6,834,086
Total Wholesale		52,171,483		25,182,708		149,446,144		72,713,461
Retail		8,872,984		3,721,032		22,937,606		10,747,456
Portfolio		970,983		907,524		2,856,305		2,532,976
Total Domain Services		62,015,450		29,811,264		175,240,055		85,993,893
	$	85,008,484	$	49,064,327	$	238,799,847	$	141,014,329

Schedule of Cost of Revenues by Revenue Stream [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Network Access Services:
Mobile Services	$	12,365,383	$	9,087,274	$	32,634,348	$	27,026,242
Other Services		945,539		501,909		2,755,205		1,360,153
Total Network Access Services		13,310,922		9,589,183		35,389,553		28,386,395
Domain Services:
Wholesale
Domain Services		42,294,131		18,934,555		119,206,649		54,215,215
Value Added Services		671,291		463,369		1,823,711		1,401,821
Total Wholesale		42,965,422		19,397,924		121,030,360		55,617,036
Retail		4,610,745		1,727,867		12,775,941		4,968,659
Portfolio		179,672		131,694		626,963		473,403
Total Domain Services		47,755,839		21,257,485		134,433,264		61,059,098
Network Expenses:
Network, other costs		2,460,696		1,287,620		7,064,458		3,925,377
Network, depreciation and amortization costs		1,322,473		292,167		3,463,013		1,012,904
		3,783,169		1,579,787		10,527,471		4,938,281
	$	64,849,930	$	32,426,455	$	180,350,288	$	94,383,774

Schedule of Property Plant and Equipment by Geographic Region [Table Text Block]

	September 30, 2017		December 31, 2016
Canada	$	1,169,409	$	1,010,427
United States		21,036,074		12,398,961
Germany		27,387		41,050
	$	22,232,870	$	13,450,438

Schedule of Acquired Intangible Assets by Major Class [Table Text Block]

	September 30, 2017		December 31, 2016
Canada	$	7,522,264	$	5,850,596
United States		39,730,601		633,798
Germany		171,100		325,090
	$	47,423,965	$	6,809,484

Schedule of Deferred Tax Asset Net By Geographic Region [Table Text Block]

	September 30, 2017		December 31, 2016
Canada	$	-	$	5,708,725
	$	-	$	5,708,725

Allowance for Credit Losses on Financing Receivables [Table Text Block]

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
Nine months ended September 30, 2017	$	164,145	$	3,741	$	-	$	167,886
Year ended December 31, 2016	$	122,095	$	42,050	$	-	$	164,145

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Note 12 - Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Stockholders Equity [Table Text Block]

												Accumulated
						Additional			Retained			other			Total
				Common stock		paid in			earnings			comprehensive			stockholders'
	Number			Amount		capital			(deficit)			income (loss)			equity
Balances, June 30, 2017		10,552,401		$	15,125,326	$	1,607,476		$	28,062,438		$	330,106		$	45,125,346
Exercise of stock options		30,051			159,307		(91,241	)		-			-			68,066
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration		(4,903	)				(116,956	)		-			-			(116,956	)
Stock-based compensation (note 13)		-			-		202,902			-			-			202,902
Net income		-			-		-			3,439,266			-			3,439,266
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.		-			-		-			(12,600	)		-			(12,600	)
Other comprehensive income (loss)		-			-		-			-			(8,071	)		(8,071	)
Balances, September 30, 2017		10,577,549		$	15,284,633	$	1,602,181		$	31,489,104		$	322,035		$	48,697,953

												Accumulated
						Additional			Retained			other		Total
				Common stock		paid in			earnings			comprehensive		stockholders'
	Number			Amount		capital			(deficit)			income (loss)		equity
Balances, December 31, 2016		10,461,574		$	14,460,500	$	2,857,921		$	20,399,511		$	99,154	$	37,817,086
Exercise of stock options		165,673			824,133		(651,230	)		-			-		172,903
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration		(49,698	)		-		(1,438,497	)		-			-		(1,438,497	)
Stock-based compensation (note 13)		-			-		833,987			-			-		833,987
Net income		-			-		-			11,127,241			-		11,127,241
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.		-			-		-			(37,648	)		-		(37,648	)
Other comprehensive income (loss)		-			-		-			-			222,881		222,881
Balances, September 30, 2017		10,577,549		$	15,284,633	$	1,602,181		$	31,489,104		$	322,035	$	48,697,953

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Note 13 - Share-based Payments (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Share-based Compensation, Stock Options, Activity [Table Text Block]

	Three months ended September 30,					Three months ended September 30,
	2017					2016
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		363,608		$	16.79		502,590		$	11.30
Granted		327,150			55.49		18,750			27.53
Exercised		(30,051	)		6.67		(31,065	)		38.00
Forfeited		(1,050	)		51.87		-			-
Expired		-			-		-			-
Outstanding, end of period		659,657			36.39		490,275			12.39
Options exercisable, end of period		223,043		$	14.30		306,553		$	9.16

	Nine months ended September 30,					Nine months ended September 30,
	2017					2016
	Number of shares			Weighted average exercise price per share		Number of shares			Weighted average exercise price per share
Outstanding, beginning of period		474,501		$	12.67		513,366		$	9.24
Granted		360,025			54.13		81,750			22.66
Exercised		(165,673	)		7.79		(94,602	)		3.75
Forfeited		(9,196	)		22.08		(9,489	)		17.23
Expired		-			-		(750	)		3.76
Outstanding, end of period		659,657			36.39		490,275			12.39
Options exercisable, end of period		223,043		$	14.30		306,553		$	9.16

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

			Options outstanding								Options exercisable
Exercise price			Number outstanding		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value		Number exercisable		Weighted average exercise price per share		Weighted average remaining contractual life (years)		Aggregate intrinsic value
$ 2.92	-	$ 8.92		96,644	$	6.72		1.9	$	5,008,805		96,644	$	6.72		1.9	$	5,008,805
$10.16	-	$19.95		122,938		16.29		3.7		5,195,152		76,399		15.99		3.5		3,251,248
$21.10	-	$27.53		81,000		23.65		4.4		2,826,893		45,000		25.39		3.7		1,492,313
$35.25	-	$37.35		14,375		35.89		5.7		325,750		5,000		35.25		6.2		116,500
$43.15	-	$47.00		18,500		44.19		6.3		265,650		-		-		-		-
$53.55	-	$55.65		326,200		55.49		6.7		998,480		-		-		-		-
				659,657	$	36.39		5.1	$	14,620,730		223,043	$	14.30		2.9	$	9,868,866

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Note 14 - Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

	September 30, 2017
	Fair Value Measurement Using						Assets (Liabilities)
	Level 1		Level 2		Level 3		at Fair value
Derivative instrument asset	$	-	$	559,663	$	-	$	559,663

	December 31, 2016
	Fair Value Measurement Using						Assets (Liabilities)
	Level 1		Level 2		Level 3		at Fair value
Derivative instrument asset	$	-	$	172,888	$	-	$	172,888

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Note 3 - Recent Accounting Pronouncements (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Tax Expense (Benefit)	$ 1,823,367	$ 2,492,649	$ 2,780,908	$ 6,476,012
Accounting Standards Update 2016-09 [Member]
Income Tax Expense (Benefit)	$ (400,000)		$ (2,600,000)

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Note 4 - Acquisitions (Details Textual) - USD ($)					10 Months Ended
	Apr. 21, 2018	Feb. 01, 2017	Jan. 20, 2017	Feb. 27, 2015	Apr. 20, 2018	Sep. 30, 2017	Dec. 31, 2016
Redeemable Noncontrolling Interest, Equity, Carrying Amount						$ 1,123,738	$ 3,086,090
Redeemable Noncontrolling Interest, Equity, Redemption Value						1,200,000
Ting Virginia LLC [Member]
Business Acquisition, Percentage of Voting Interests Acquired		20.00%		70.00%
Business Combination, Consideration Transferred		$ 2,000,000		$ 3,500,000
Ting Virginia LLC [Member] | Exercisable by the Minority Shareholders [Member]
Business Combination, Interest Subject to Call Option, Not Exercised in Period		10.00%
Ting Virginia LLC [Member] | Exercisable by the Minority Shareholders [Member] | Exercisable on Fourth Anniversary of Business Combination [Member]
Business Combination, Consideration to be Transfered Upon Exercise of Options Per Percentage Point		$ 120,000
eNom, Incorporated [Member]
Business Combination, Consideration Transferred			$ 77,831,677
Payments to Acquire Businesses, Gross			83,500,000
Business Combination, Consideration Transferred, Estimated Price Adjusments			5,700,000
Business Acquisition, Transaction Costs			$ 800,000
eNom, Incorporated [Member] | General and Administrative Expense [Member]
Business Acquisition, Transaction Costs						$ 300,000
eNom, Incorporated [Member] | Scenario, Forecast [Member]
Business Combination, Minimum Cash Amount	$ 0				$ 5,350,000

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Note 4 - Acquisitions - Preliminary Purchase Consideration (Details) - USD ($)	Jan. 20, 2017	Sep. 30, 2017	Dec. 31, 2016
Goodwill		$ 87,486,243	$ 21,005,143
eNom, Incorporated [Member]
Goodwill	$ 66,481,100
Cash	1,594,217
Prepaid domain registry fees	70,643,994
Other assets	10,170,789
Total assets	193,190,100
Deferred Revenue	(77,798,994)
Deferred Tax Liabilities	(21,893,346)
Other liabilities	(15,666,083)
Total liabilities	(115,358,423)
Preliminary consideration paid	77,831,677
eNom, Incorporated [Member] | Brand [Member]
Finite-Lived Intangibles	12,400,000
eNom, Incorporated [Member] | Technology-Based Intangible Assets [Member]
Finite-Lived Intangibles	3,900,000
eNom, Incorporated [Member] | Customer Relationships [Member]
Finite-Lived Intangibles	$ 28,000,000

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Note 4 - Acquisitions - Pro Forma Information (Details) - eNom, Incorporated [Member] - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net revenues	$ 86,303,327	$ 243,262,069	$ 252,531,557
Net income	$ 1,760,528	$ 10,755,068	$ 2,776,074
Basic earnings per common share (in dollars per share)	$ 0.17	$ 1.03	$ 0.27
Diluted earnings per common share (in dollars per share)	$ 0.17	$ 1	$ 0.27

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Note 5 - Derivative Instruments and Hedging Activities (Details Textual) - Forward Contracts [Member] - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Derivative, Notional Amount	$ 6,900,000		$ 6,900,000		$ 26,600,000
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	55,128	$ (39,401)	78,173	$ (100,000)
Designated as Hedging Instrument [Member]
Derivative, Notional Amount	6,200,000		6,200,000		$ 24,000,000
Not Designated as Hedging Instrument [Member]
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments	$ (1,053)	$ 20,113	$ 37,103	$ 300,000

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Note 5 - Derivative Instruments and Hedging Activities - Foreign Currency Forward Contracts (Details)	Sep. 30, 2017 USD ($)
Foreign Exchange Forward 1 [Member]
Notional amount of U.S. dollars	$ 6,859,570
Weighted average exchange rate of U.S. dollars	1.3478
Fair value	$ 559,663
Foreign Exchange Forward 2 [Member]
Notional amount of U.S. dollars	$ 6,859,570
Weighted average exchange rate of U.S. dollars	1.3478
Fair value	$ 559,663

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Note 5 - Derivative Instruments and Hedging Activities - Fair Value of Derivative Instruments in the Consolidated Balance Sheets (Details) - Derivative Instruments [Member] - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Foreign currency forward contracts	$ 559,663	$ 172,888
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member]
Foreign currency forward contracts	505,232	155,560
Not Designated as Hedging Instrument [Member]
Foreign currency forward contracts	$ 54,431	$ 17,823

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Note 5 - Derivative Instruments and Hedging Activities - Movement in AOCI Balance (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
AOCI balance, Gains and losses on cash flow hedges	$ 517,894		$ 155,560
AOCI balance, Tax impact	(187,788)		(56,406)
AOCI balance	330,106		99,154
Other comprehensive income (loss) before reclassifications, Gains and losses on cash flow hedges	485,480		1,001,634
Other comprehensive income (loss) before reclassifications, Tax impact	(176,035)		(363,192)
Other comprehensive income (loss) before reclassifications	309,445	$ (58,821)	638,442	$ 516,406
Amount reclassified from accumulated other comprehensive income, Gains and losses on cash flow hedges	(498,142)		(651,962)
Amount reclassified from accumulated other comprehensive income, Tax impact	180,626		236,401
Amount reclassified from accumulated other comprehensive income	(317,516)	$ 131,912	(415,561)	$ 546,836
Other comprehensive income (loss), Gains and losses on cash flow hedges	(12,662)		349,672
Other comprehensive income (loss), Tax impact	4,591		(126,791)
Other comprehensive income (loss)	(8,071)		222,881
AOCI balance, Gains and losses on cash flow hedges	505,232		505,232
AOCI balance, Tax impact	(183,197)		(183,197)
AOCI balance	$ 322,035		$ 322,035

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Note 5 - Derivative Instruments and Hedging Activities - Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Operating Expense [Member]
Amount of Gain or (Loss) Recognized in OCI, Net of Tax, on Derivative (Effective Portion)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	432,021	(156,743)	560,971	(617,572)
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)				(47,242)
Cost of Sales [Member]
Amount of Gain or (Loss) Recognized in OCI, Net of Tax, on Derivative (Effective Portion)	(8,071)	73,091	222,881	1,063,242
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	66,121	(50,210)	90,991	(193,102)
Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)

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Note 6 - Goodwill and Other Intangible Assets (Details Textual) - USD ($)			3 Months Ended		9 Months Ended
	Sep. 19, 2017	Jan. 20, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Goodwill			$ 87,486,243		$ 87,486,243		$ 21,005,143
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)			1,500	$ 2,866	1,500	$ 27,745
Finite-lived Intangible Assets Acquired			90,187		90,187
Finite-Lived Intangible Assets, Accumulated Amortization			13,000,000		13,000,000
Brand [Member]
Finite-lived Intangible Assets Acquired
Technology-Based Intangible Assets [Member]
Finite-lived Intangible Assets Acquired
Customer Relationships [Member]
Finite-lived Intangible Assets Acquired			90,187		90,187
Domain Name Services [Member]
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)			1,500	2,866	1,500	27,745
Domain Services Operating Segment [Member]
Goodwill			$ 85,400,000		$ 85,400,000
Goodwill Percentage Related to Operating Segments			98.00%		98.00%
Network Access Services [Member]
Goodwill			$ 2,100,000		$ 2,100,000
Goodwill Percentage Related to Operating Segments			2.00%		2.00%
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill)
eNom, Incorporated [Member]
Goodwill		$ 66,481,100
Goodwill, Acquired During Period					66,500,000
Finite-lived Intangible Assets Acquired					44,300,000
eNom, Incorporated [Member] | Brand [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 years
Finite-lived Intangible Assets Acquired					12,400,000
eNom, Incorporated [Member] | Technology-Based Intangible Assets [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		2 years
Finite-lived Intangible Assets Acquired					3,900,000
eNom, Incorporated [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life		7 years
Finite-lived Intangible Assets Acquired					28,000,000
Otono, Networks Inc. [Member]
Finite-lived Intangible Assets Acquired			2,294,111		2,294,111
Business Acquisition, Working Capital Liabilities Assumed	$ 1,400,000
Otono, Networks Inc. [Member] | Brand [Member]
Finite-lived Intangible Assets Acquired
Otono, Networks Inc. [Member] | Technology-Based Intangible Assets [Member]
Finite-lived Intangible Assets Acquired
Otono, Networks Inc. [Member] | Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	7 years
Finite-lived Intangible Assets Acquired	$ 2,300,000		$ 2,294,111		$ 2,294,111

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Note 6 - Goodwill and Other Intangible Assets - Acquired Intangible Assets by Major Class (Details) - USD ($)		3 Months Ended		9 Months Ended
	Sep. 19, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Balances		$ 60,432,167		$ 19,973,793
Acquisition , Finite-lived		90,187		90,187
Additions to/(disposals from) domain portfolio, net		(7,896)	$ (4,760)	(24,661)	$ (25,581)
Amortization expense		(2,244,955)	$ (292,547)	(6,069,817)	$ (649,526)
Balances		60,562,113		60,562,113
Reclassifications
Otono, Networks Inc. [Member]
Acquisition , Finite-lived		2,294,111		2,294,111
eNom, Incorporated [Member]
Acquisition , Finite-lived				44,300,000
Brand [Member]
Balances		11,693,810		5,210
Acquisition , Finite-lived
Additions to/(disposals from) domain portfolio, net
Amortization expense		(450,510)		(1,205,530)
Balances		11,243,300		11,243,300
Reclassifications				43,620
Brand [Member] | Otono, Networks Inc. [Member]
Acquisition , Finite-lived
Brand [Member] | eNom, Incorporated [Member]
Acquisition , Finite-lived				12,400,000
Customer Relationships [Member]
Balances		31,919,024		6,198,811
Acquisition , Finite-lived		90,187		90,187
Additions to/(disposals from) domain portfolio, net
Amortization expense		(1,295,413)		(3,529,691)
Balances		33,007,909		33,007,909
Reclassifications				(45,509)
Customer Relationships [Member] | Otono, Networks Inc. [Member]
Acquisition , Finite-lived	$ 2,300,000	2,294,111		2,294,111
Customer Relationships [Member] | eNom, Incorporated [Member]
Acquisition , Finite-lived				28,000,000
Technology-Based Intangible Assets [Member]
Balances		3,087,500
Acquisition , Finite-lived
Additions to/(disposals from) domain portfolio, net
Amortization expense		(487,500)		(1,300,000)
Balances		2,600,000		2,600,000
Reclassifications
Technology-Based Intangible Assets [Member] | Otono, Networks Inc. [Member]
Acquisition , Finite-lived
Technology-Based Intangible Assets [Member] | eNom, Incorporated [Member]
Acquisition , Finite-lived				3,900,000
Network Rights [Member]
Balances		584,288		605,463
Acquisition , Finite-lived
Additions to/(disposals from) domain portfolio, net
Amortization expense		(11,532)		(34,596)
Balances		572,756		572,756
Reclassifications				1,889
Network Rights [Member] | Otono, Networks Inc. [Member]
Acquisition , Finite-lived
Network Rights [Member] | eNom, Incorporated [Member]
Acquisition , Finite-lived
Surname Domain Names [Member]
Balances		11,291,003		11,295,221
Acquisition , Indefinite-lived
Additions to/(disposals from) domain portfolio, net		(1,623)		(5,841)
Amortization expense
Balances		11,289,380		11,289,380
Reclassifications
Surname Domain Names [Member] | Otono, Networks Inc. [Member]
Acquisition , Indefinite-lived
Acquisition , Finite-lived
Surname Domain Names [Member] | eNom, Incorporated [Member]
Acquisition , Indefinite-lived
Direct Navigation Domain Names [Member]
Balances		1,856,542		1,869,088
Acquisition , Indefinite-lived
Additions to/(disposals from) domain portfolio, net		(7,774)		(20,320)
Amortization expense
Balances		1,848,768		1,848,768
Reclassifications
Direct Navigation Domain Names [Member] | Otono, Networks Inc. [Member]
Acquisition , Indefinite-lived
Acquisition , Finite-lived
Direct Navigation Domain Names [Member] | eNom, Incorporated [Member]
Acquisition , Indefinite-lived

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Note 6 - Goodwill and Other Intangible Assets - Estimated Future Amortization Expense of Intangible Assets (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Remainder of 2017	$ 2,168,927
2018	9,166,244
2019	7,255,196
2020	7,092,696
2021	7,092,696
Thereafter	14,648,206
Total	$ 47,423,965	$ 6,809,484

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Note 7 - Loan Payable (Details Textual) CAD in Millions		3 Months Ended		4 Months Ended	9 Months Ended
	Jan. 20, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Oct. 01, 2018	Sep. 30, 2018	Sep. 30, 2017 CAD	Jan. 19, 2017 USD ($)
Payments of Financing Costs	$ 600,000	$ 16,463	$ 383,463		$ 620,217	$ 516,963
Foreign Exchange Risk [Member]
Line of Credit Facility, Maximum Borrowing Capacity		3,500,000		$ 3,500,000	$ 3,500,000
Line of Credit Facility Covenant Period					1 year 180 days
Derivative Asset, Fair Value, Gross Asset		$ 6,900,000		$ 6,900,000	$ 6,900,000
Bank of Montreal and Royal Bank of Canada [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 140,000,000
Debt Instrument, Term	4 years
Maximum Total Funded Debt to EBITDA Ratio	2.25	3		3	3				3
Repayment Obligation, Percentage of Excess Cash Flow	50.00%
Minimum Fixed Charge Coverage Ratio		1.2		1.2	1.2				1.2
Maximum Annual Capital Expenditures Requirement					$ 32,800,000
Line of Credit Facility, Maximum Funded Share Repurchases Ceiling					$ 20,000,000
Maximum Ratio of Funded Share Repurchases to 12 Months Trailing EDITDA		1.5		1.5	1.5				1.5
Bank of Montreal and Royal Bank of Canada [Member] | Scenario, Forecast [Member]
Maximum Total Funded Debt to EBITDA Ratio							2.25	2.5
Bank of Montreal and Royal Bank of Canada [Member] | Total Loans Do Not Exceed 1.5 Times of Trailing 12 Months EBITDA [Member]
Line of Credit Facility, Maximum Funded Share Repurchases Ceiling					$ 40,000,000
Bank of Montreal and Royal Bank of Canada [Member] | Non-revolving Facility C [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 35,500,000									$ 40,000,000
Line of Credit Facility, Increase in Maximum Borrowing Capacity				$ 502,500
Bank of Montreal and Royal Bank of Canada [Member] | Non-revolving Facility D [Member]
Line of Credit Facility, Maximum Borrowing Capacity	84,500,000
Long-term Line of Credit	84,500,000
Bank of Montreal and Royal Bank of Canada [Member] | Revolving Credit Facility A [Member]
Line of Credit Facility, Maximum Borrowing Capacity	5,000,000
Bank of Montreal and Royal Bank of Canada [Member] | Revolving Reducing Term Facility B [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000,000
Bank of Montreal and Royal Bank of Canada [Member] | Credit Facility B and C [Member] | Draws for Share Repurchases [Member]
Debt Instrument, Term	4 years
Bank of Montreal and Royal Bank of Canada [Member] | Credit Facility B and C [Member] | Draws for Acquisitions [Member]
Debt Instrument, Term	5 years
Bank of Montreal and Royal Bank of Canada [Member] | Credit Facility B and C [Member] | Draws for FFTH Capital Expenditures [Member]
Debt Instrument, Term	7 years
Bank of Nova [member] | Corporate Credit Card Program [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 1,000,000		$ 1,000,000	$ 1,000,000				CAD 0.5

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Note 7 - Loan Payable - Schedule of Standby Fees Based on Total Funded Debt to EBITDA Ratio (Details)	9 Months Ended
	Sep. 30, 2017
Debt to EBITDA is Less Than 1 [Member]
Standby fees	0.40%
Debt to EBITDA is Greater Than or Equal to 1 and Less Than 2 [Member]
Standby fees	0.45%
Debt to EBITDA is Greater Than or Equal to 2 and Less Than 2.25 [Member]
Standby fees	0.55%
Debt to EBITDA is Greater Than or Equal to 2.25 [Member]
Standby fees	0.65%
Bank of Montreal and Royal Bank of Canada [Member] | London Interbank Offered Rate (LIBOR) [Member] | Debt to EBITDA is Less Than 1 [Member]
Basis Spread on Variable Rate	2.00%
Bank of Montreal and Royal Bank of Canada [Member] | London Interbank Offered Rate (LIBOR) [Member] | Debt to EBITDA is Greater Than or Equal to 1 and Less Than 2 [Member]
Basis Spread on Variable Rate	2.25%
Bank of Montreal and Royal Bank of Canada [Member] | London Interbank Offered Rate (LIBOR) [Member] | Debt to EBITDA is Greater Than or Equal to 2 and Less Than 2.25 [Member]
Basis Spread on Variable Rate	2.75%
Bank of Montreal and Royal Bank of Canada [Member] | London Interbank Offered Rate (LIBOR) [Member] | Debt to EBITDA is Greater Than or Equal to 2.25 [Member]
Basis Spread on Variable Rate	3.25%
Bank of Montreal and Royal Bank of Canada [Member] | Base Rate [Member] | Debt to EBITDA is Less Than 1 [Member]
Basis Spread on Variable Rate	0.75%
Bank of Montreal and Royal Bank of Canada [Member] | Base Rate [Member] | Debt to EBITDA is Greater Than or Equal to 1 and Less Than 2 [Member]
Basis Spread on Variable Rate	1.00%
Bank of Montreal and Royal Bank of Canada [Member] | Base Rate [Member] | Debt to EBITDA is Greater Than or Equal to 2 and Less Than 2.25 [Member]
Basis Spread on Variable Rate	1.50%
Bank of Montreal and Royal Bank of Canada [Member] | Base Rate [Member] | Debt to EBITDA is Greater Than or Equal to 2.25 [Member]
Basis Spread on Variable Rate	2.00%

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Note 7 - Loan Payable - Schedule of Loans Payable (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Loans payable	$ 81,427,082	$ 10,248,808
Less: unamortized debt discount and issuance costs	(899,020)	(482,498)
Less: loan payable, current portion	18,289,853	2,233,110
Loan payable, long-term portion	63,137,229	8,015,698
Revolving Reducing Term Facility B [Member]
Loans payable		6,000,000
Non-revolving Facility C [Member]
Loans payable	6,277,902	4,731,306
Non-revolving Facility D [Member]
Loans payable	$ 76,048,200

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Note 7 - Loan Payable - Principal Repayments (Details)	Sep. 30, 2017 USD ($)
Remainder of 2017	$ 4,572,463
2018	18,289,853
2019	18,289,853
2020	18,103,004
2021	17,542,457
Thereafter	5,528,472
	$ 82,326,102

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Note 8 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Jan. 20, 2017	Dec. 31, 2016
Income Tax Expense (Benefit)	$ 1,823,367	$ 2,492,649	$ 2,780,908	$ 6,476,012
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	5,300,000	$ 7,200,000	13,900,000	$ 19,700,000
Unrecognized Tax Benefits	0		0			$ 100,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued	0		0			$ 0
eNom, Incorporated [Member]
Deferred Tax Liabilities, Net					$ 21,900,000
Accounting Standards Update 2016-09 [Member]
Income Tax Expense (Benefit)	$ (400,000)		$ (2,600,000)

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Note 9 - Basic and Diluted Earnings Per Common Share (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	$ 5,300,000	$ 7,200,000	$ 13,900,000	$ 19,700,000
Stock Repurchase [Member]
Stock Repurchased and Retired During Period, Shares	0	0	0	308,416
Employee Stock Option [Member]
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	$ 345,200		$ 349,700
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	76,750		95,950

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Note 9 - Basic and Diluted Earnings Per Common Share - Summary of Basic and Diluted Earnings Per Common Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016
Net income for the period	$ 3,439,266	$ 4,741,279	$ 11,127,241	$ 11,127,241	$ 13,250,303
Basic weighted average number of common shares outstanding (in shares)	10,564,311	10,432,763	10,522,841		10,549,056
Effect of outstanding stock options (in shares)	221,031	186,242	262,209		187,719
Diluted weighted average number of shares outstanding (in shares)	10,785,342	10,619,005	10,785,050		10,736,775
Basic earnings per common share (in dollars per share)	$ 0.33	$ 0.45	$ 1.06		$ 1.26
Diluted earnings per common share (in dollars per share)	$ 0.32	$ 0.45	$ 1.03		$ 1.23

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Note 10 - Segment Reporting (Details Textual)	9 Months Ended
	Sep. 30, 2017
Number of Operating Segments	2

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Note 10 - Segment Reporting - Information by Operating Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net Revenues	$ 85,008,484	$ 49,064,327	$ 238,799,847	$ 141,014,329
Cost of revenues	61,066,761	30,846,668	169,822,817	89,445,493
Network expenses	2,460,696	1,287,620	7,064,458	3,925,377
Depreciation of property and equipment	823,441	278,746	2,128,417	976,419
Amortization of intangible assets	499,032	13,421	1,334,596	36,485
Total cost of revenues	64,849,930	32,426,455	180,350,288	94,383,774
Gross Profit	20,158,554	16,637,872	58,449,559	46,630,555
Sales and marketing	7,578,414	5,479,445	22,244,961	15,174,619
Technical operations and development	1,910,147	1,270,107	5,402,385	3,445,118
General and administrative	2,852,345	2,166,217	9,596,298	7,497,752
Depreciation of property and equipment	154,638	178,687	485,648	328,877
Amortization of intangible assets	1,745,923	279,126	4,735,221	613,041
Impairment of indefinite life intangible asset	1,500	2,866	1,500	27,745
Loss (gain) on currency forward contracts	(54,075)	22,475	(115,276)	(96,993)
Income from operations	5,969,662	7,238,949	16,098,822	19,640,396
Other income (expenses), net	(707,029)	(5,021)	(2,190,673)	85,919
Income before provision for income taxes	5,262,633	7,233,928	13,908,149	19,726,315
Network Access Services [Member]
Net Revenues	22,993,034	19,253,063	63,559,792	55,020,436
Cost of revenues	13,310,922	9,589,183	35,389,553	28,386,395
Network expenses	446,126	507,128	1,397,832	941,451
Depreciation of property and equipment	578,257	258,042	1,494,299	655,104
Amortization of intangible assets	11,532	13,421	34,596	36,485
Total cost of revenues	14,346,837	10,367,774	38,316,280	30,019,435
Gross Profit	8,646,197	8,885,289	25,243,512	25,001,001
Sales and marketing
Technical operations and development
General and administrative
Depreciation of property and equipment
Amortization of intangible assets
Impairment of indefinite life intangible asset
Loss (gain) on currency forward contracts
Income from operations
Other income (expenses), net
Income before provision for income taxes
Domain Name Services [Member]
Net Revenues	62,015,450	29,811,264	175,240,055	85,993,893
Cost of revenues	47,755,839	21,257,485	134,433,264	61,059,098
Network expenses	2,014,570	780,492	5,666,626	2,983,926
Depreciation of property and equipment	245,184	20,704	634,118	321,315
Amortization of intangible assets	487,500		1,300,000
Total cost of revenues	50,503,093	22,058,681	142,034,008	64,364,339
Gross Profit	11,512,357	7,752,583	33,206,047	21,629,554
Sales and marketing
Technical operations and development
General and administrative
Depreciation of property and equipment
Amortization of intangible assets
Impairment of indefinite life intangible asset
Loss (gain) on currency forward contracts
Income from operations
Other income (expenses), net
Income before provision for income taxes

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Note 10 - Segment Reporting - Summary of Revenue and Cost of Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net revenues	$ 85,008,484	$ 49,064,327	$ 238,799,847	$ 141,014,329
Network Access Services [Member]
Net revenues	22,993,034	19,253,063	63,559,792	55,020,436
Network Access Services [Member] | Mobile Services [Member]
Net revenues	21,748,809	18,374,906	60,090,266	52,287,808
Network Access Services [Member] | Other Services [Member]
Net revenues	1,244,225	878,157	3,469,526	2,732,628
Domain Name Services [Member]
Net revenues	62,015,450	29,811,264	175,240,055	85,993,893
Domain Name Services [Member] | Wholesale [Member]
Net revenues	52,171,483	25,182,708	149,446,144	72,713,461
Domain Name Services [Member] | Wholesale [Member] | Domain Services [Member]
Net revenues	47,769,779	22,955,731	135,411,688	65,879,375
Domain Name Services [Member] | Wholesale [Member] | Value Added Services [Member]
Net revenues	4,401,704	2,226,977	14,034,456	6,834,086
Domain Name Services [Member] | Retail Services [Member]
Net revenues	8,872,984	3,721,032	22,937,606	10,747,456
Domain Name Services [Member] | Portfolio [Member]
Net revenues	$ 970,983	$ 907,524	$ 2,856,305	$ 2,532,976

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Note 10 - Segment Reporting - Summary of Cost of Revenues from Each Significant Revenue Stream (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Cost of revenues	$ 61,066,761	$ 30,846,668	$ 169,822,817	$ 89,445,493
Network, other costs	2,460,696	1,287,620	7,064,458	3,925,377
Amortization of intangible assets	499,032	13,421	1,334,596	36,485
Total cost of revenues	64,849,930	32,426,455	180,350,288	94,383,774
Network Expenses [Member]
Network, other costs	2,460,696	1,287,620	7,064,458	3,925,377
Amortization of intangible assets	1,322,473	292,167	3,463,013	1,012,904
Network Expenses	3,783,169	1,579,787	10,527,471	4,938,281
Network Access Services [Member]
Cost of revenues	13,310,922	9,589,183	35,389,553	28,386,395
Network, other costs	446,126	507,128	1,397,832	941,451
Amortization of intangible assets	11,532	13,421	34,596	36,485
Total cost of revenues	14,346,837	10,367,774	38,316,280	30,019,435
Network Access Services [Member] | Mobile Services [Member]
Cost of revenues	12,365,383	9,087,274	32,634,348	27,026,242
Network Access Services [Member] | Other Services [Member]
Cost of revenues	945,539	501,909	2,755,205	1,360,153
Domain Name Services [Member]
Cost of revenues	47,755,839	21,257,485	134,433,264	61,059,098
Network, other costs	2,014,570	780,492	5,666,626	2,983,926
Amortization of intangible assets	487,500		1,300,000
Total cost of revenues	50,503,093	22,058,681	142,034,008	64,364,339
Domain Name Services [Member] | Wholesale [Member]
Cost of revenues	42,965,422	19,397,924	121,030,360	55,617,036
Domain Name Services [Member] | Retail Services [Member]
Cost of revenues	4,610,745	1,727,867	12,775,941	4,968,659
Domain Name Services [Member] | Portfolio [Member]
Cost of revenues	179,672	131,694	626,963	473,403
Domain Name Services [Member] | Domain Services [Member] | Wholesale [Member]
Cost of revenues	42,294,131	18,934,555	119,206,649	54,215,215
Domain Name Services [Member] | Value Added Services [Member] | Wholesale [Member]
Cost of revenues	$ 671,291	$ 463,369	$ 1,823,711	$ 1,401,821

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Note 10 - Segment Reporting - Summary of Property and Equipment by Geographic Region (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Property and equipment	$ 22,232,870	$ 13,450,438
CANADA
Property and equipment	1,169,409	1,010,427
UNITED STATES
Property and equipment	21,036,074	12,398,961
GERMANY
Property and equipment	$ 27,387	$ 41,050

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Note 10 - Segment Reporting - Summary of Amortizable Intangible Assets by Geographic Region (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Amortizable intangible assets	$ 47,423,965	$ 6,809,484
CANADA
Amortizable intangible assets	7,522,264	5,850,596
UNITED STATES
Amortizable intangible assets	39,730,601	633,798
GERMANY
Amortizable intangible assets	$ 171,100	$ 325,090

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Note 10 - Segment Reporting - Summary of Deferred Tax Asset, Net of Valuation Allowance (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Deferred tax assets		$ 5,708,725
CANADA
Deferred tax assets		$ 5,708,725

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Note 10 - Segment Reporting - Summary of Valuation and Qualifying Accounts (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Balance at beginning of period	$ 164,145	$ 122,095
Charged to (recovered) costs and expenses	3,741	42,050
Balance at end of period	$ 167,886	$ 164,145

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Note 12 - Stockholders' Equity (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Mar. 01, 2017	Feb. 09, 2016	Feb. 11, 2015
Stock Buyback Program 2017 [Member]
Stock Repurchase Program, Authorized Amount				$ 40.0
Stock Repurchased and Retired During Period, Shares	0	0
Stock Buyback Program 2016 [Member]
Stock Repurchase Program, Authorized Amount					$ 40.0
Stock Repurchased and Retired During Period, Shares			308,416
Stock Repurchased and Retired During Period, Value			$ 7.2
Stock Buyback Program 2015 [Member]
Stock Repurchase Program, Authorized Amount						$ 20.0
Stock Repurchased and Retired During Period, Shares			0

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Note 12 - Stockholders' Equity - Stockholders' Equity Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016
Balances	$ 45,125,346		$ 37,817,086	$ 37,817,086
Exercise of stock options (in shares)	30,051	31,065		165,673	94,602
Exercise of stock options	$ 68,066		172,903
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration	(116,956)		(1,438,497)
Stock-based compensation (note 13)	202,902		833,987
Net income for the period	3,439,266	$ 4,741,279	11,127,241	$ 11,127,241	$ 13,250,303
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.	(12,600)		(37,648)
Other comprehensive income (loss)	(8,071)	$ 73,091	222,881	222,881	$ 1,063,242
Balances	$ 48,697,953		$ 48,697,953	$ 48,697,953
Common Stock [Member]
Balances (in shares)	10,552,401		10,461,574
Balances	$ 15,125,326		$ 14,460,500
Exercise of stock options (in shares)	30,051		165,673
Exercise of stock options	$ 159,307		$ 824,133
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration (in shares)	(4,903)		(49,698)
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration
Stock-based compensation (note 13)
Net income for the period
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.
Other comprehensive income (loss)
Balances (in shares)	10,577,549		10,577,549	10,577,549
Balances	$ 15,284,633		$ 15,284,633	$ 15,284,633
Additional Paid-in Capital [Member]
Balances	1,607,476		2,857,921
Exercise of stock options	(91,241)		(651,230)
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration	(116,956)		(1,438,497)
Stock-based compensation (note 13)	202,902		833,987
Net income for the period
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.
Other comprehensive income (loss)
Balances	1,602,181		1,602,181	1,602,181
Retained Earnings [Member]
Balances	28,062,438		20,399,511
Exercise of stock options
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration
Stock-based compensation (note 13)
Net income for the period	3,439,266		11,127,241
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.	(12,600)		(37,648)
Other comprehensive income (loss)
Balances	31,489,104		31,489,104	31,489,104
AOCI Attributable to Parent [Member]
Balances	330,106		99,154
Exercise of stock options
Shares deducted from exercise of stock options for payment of witholding taxes and exercise consideration
Stock-based compensation (note 13)
Net income for the period
Accretion of redeemable non-controlling interest in Ting Virginia, LLC.
Other comprehensive income (loss)	(8,071)		222,881
Balances	$ 322,035		$ 322,035	$ 322,035

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Note 13 - Share-based Payments (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 7,000		$ 7,000
Allocated Share-based Compensation Expense	$ 200	$ 200	800	$ 600
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount			$ 0
Employee Stock Option [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition			3 years 36 days

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Note 13 - Share-based Payments - Stock Option Transactions (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2017 $ / shares shares	Sep. 30, 2016 $ / shares shares	Sep. 30, 2017 $ / shares shares	Sep. 30, 2016 $ / shares shares
Outstanding, Number of shares (in shares) | shares	363,608	502,590	474,501	513,366
Outstanding, Weighted average exercise price per share (in dollars per share) | $ / shares	$ 16.79	$ 11.30	$ 12.67	$ 9.24
Granted, Number of shares (in shares) | shares	327,150	18,750	360,025	81,750
Granted, Weighted average exercise price per share (in dollars per share) | $ / shares	$ 55.49	$ 27.53	$ 54.13	$ 22.66
Exercised, Number of shares (in shares) | shares	(30,051)	(31,065)	(165,673)	(94,602)
Exercised, Weighted average exercise price per share (in dollars per share) | $ / shares	$ 6.67	$ 38	$ 7.79	$ 3.75
Forfeited, Number of shares (in shares) | shares	(1,050)		(9,196)	(9,489)
Forfeited, Weighted average exercise price per share (in dollars per share) | $ / shares	$ 51.87		$ 22.08	$ 17.23
Expired, Number of shares (in shares) | shares				(750)
Expired, Weighted average exercise price per share (in dollars per share) | $ / shares				$ 3.76
Outstanding, Number of shares (in shares) | shares	659,657	490,275	659,657	490,275
Outstanding, Weighted average exercise price per share (in dollars per share) | $ / shares	$ 36.39	$ 12.39	$ 36.39	$ 12.39
Options exercisable, Number of shares (in shares) | shares	223,043	306,553	223,043	306,553
Options exercisable, Weighted average exercise price per share (in dollars per share) | $ / shares	$ 14.30	$ 9.16	$ 14.30	$ 9.16

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Note 13 - Share-based Payments - Summary of Exercise Prices, Weighted Average Remaining Contractual Life and Intrinsic Values of Outstanding Options (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares
Number outstanding (in shares) | shares	659,657
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 36.39
Weighted average remaining contractual life, options outstanding (Year)	5 years 36 days
Aggregate intrinsic value, options outstanding | $	$ 14,620,730
Number exercisable (in shares) | shares	223,043
Weighted average exercise price per share, options exercisable (in dollars per share)	$ 14.30
Weighted average remaining contractual life, options exercisable (Year)	2 years 328 days
Aggregate intrinsic value, options exercisable | $	$ 9,868,866
Exercise Price Range 01 [Member]
Exercise price - lower (in dollars per share)	$ 2.92
Exercise price - higher (in dollars per share)	$ 8.92
Number outstanding (in shares) | shares	96,644
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 6.72
Weighted average remaining contractual life, options outstanding (Year)	1 year 328 days
Aggregate intrinsic value, options outstanding | $	$ 5,008,805
Number exercisable (in shares) | shares	96,644
Weighted average exercise price per share, options exercisable (in dollars per share)	$ 6.72
Weighted average remaining contractual life, options exercisable (Year)	1 year 328 days
Aggregate intrinsic value, options exercisable | $	$ 5,008,805
Exercise Price Range 02 [Member]
Exercise price - lower (in dollars per share)	$ 10.16
Exercise price - higher (in dollars per share)	$ 19.95
Number outstanding (in shares) | shares	122,938
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 16.29
Weighted average remaining contractual life, options outstanding (Year)	3 years 255 days
Aggregate intrinsic value, options outstanding | $	$ 5,195,152
Number exercisable (in shares) | shares	76,399
Weighted average exercise price per share, options exercisable (in dollars per share)	$ 15.99
Weighted average remaining contractual life, options exercisable (Year)	3 years 182 days
Aggregate intrinsic value, options exercisable | $	$ 3,251,248
Exercise Price Range 03 [Member]
Exercise price - lower (in dollars per share)	$ 21.10
Exercise price - higher (in dollars per share)	$ 27.53
Number outstanding (in shares) | shares	81,000
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 23.65
Weighted average remaining contractual life, options outstanding (Year)	4 years 146 days
Aggregate intrinsic value, options outstanding | $	$ 2,826,893
Number exercisable (in shares) | shares	45,000
Weighted average exercise price per share, options exercisable (in dollars per share)	$ 25.39
Weighted average remaining contractual life, options exercisable (Year)	3 years 255 days
Aggregate intrinsic value, options exercisable | $	$ 1,492,313
Exercise Price Range 04 [Member]
Exercise price - lower (in dollars per share)	$ 35.25
Exercise price - higher (in dollars per share)	$ 37.35
Number outstanding (in shares) | shares	14,375
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 35.89
Weighted average remaining contractual life, options outstanding (Year)	5 years 255 days
Aggregate intrinsic value, options outstanding | $	$ 325,750
Number exercisable (in shares) | shares	5,000
Weighted average exercise price per share, options exercisable (in dollars per share)	$ 35.25
Weighted average remaining contractual life, options exercisable (Year)	6 years 73 days
Aggregate intrinsic value, options exercisable | $	$ 116,500
Exercise Price Range 05 [Member]
Exercise price - lower (in dollars per share)	$ 43.15
Exercise price - higher (in dollars per share)	$ 47
Number outstanding (in shares) | shares	18,500
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 44.19
Weighted average remaining contractual life, options outstanding (Year)	6 years 109 days
Aggregate intrinsic value, options outstanding | $	$ 265,650
Number exercisable (in shares) | shares
Weighted average exercise price per share, options exercisable (in dollars per share)
Weighted average remaining contractual life, options exercisable (Year)
Aggregate intrinsic value, options exercisable | $
Exercise Price Range 06 [Member]
Exercise price - lower (in dollars per share)
Exercise price - higher (in dollars per share)	$ 55.65
Number outstanding (in shares) | shares	326,200
Weighted average exercise price per share, options outstanding (in dollars per share)	$ 55.49
Weighted average remaining contractual life, options outstanding (Year)	6 years 255 days
Aggregate intrinsic value, options outstanding | $	$ 998,480
Number exercisable (in shares) | shares
Weighted average exercise price per share, options exercisable (in dollars per share)
Weighted average remaining contractual life, options exercisable (Year)
Aggregate intrinsic value, options exercisable | $

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Note 14 - Fair Value Measurement - Summary of the Fair Values of the Company's Derivative Instrument Liabilities (Details) - Fair Value, Measurements, Recurring [Member] - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Derivative instrument asset	$ 559,663	$ 172,888
Fair Value, Inputs, Level 1 [Member]
Derivative instrument asset
Fair Value, Inputs, Level 2 [Member]
Derivative instrument asset	559,663	172,888
Fair Value, Inputs, Level 3 [Member]
Derivative instrument asset