. Segment reporting:

(a) We are organized and managed based on

two

operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate and are described as follows:

Network Access Services

- This segment derives revenue from the sale of mobile phones, telephony services, high speed Internet access, billing solutions to individuals and small businesses primarily through the Ting website. Revenues are generated in the U.S.

Domain Services

– This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses; and by making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada and the U.S.

The Chief Executive Officer (the “CEO”) is the chief operating decision maker and regularly reviews the operations and performance by segment. The CEO reviews gross profit as (a) a key measure of performance for each segment and (b) to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and development expenses, general and administrative expenses, depreciation of property and equipment, amortization of intangibles assets, impairment of indefinite life intangible assets, gain on currency forward contracts and other expense net are organized along functional lines and are

not

included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are

not

reviewed at the segment level by the CEO. The Company follows the same accounting policies for the segments as those described in Notes

– Basis of presentation,

– Recent accounting pronouncements, and

- Revenue.

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

- Revenue), which is regularly reported to the CEO is as follows (Dollar amounts in thousands of U.S. dollars):

Three months ended March 31, 2019	Network Access Services		Domain Services		Consolidated Totals
Net Revenues	$	23,252	$	55,701	$	78,953

Cost of revenues
Cost of revenues		11,812		40,120		51,932
Network expenses		521		1,874		2,395
Depreciation of property and equipment		1,454		347		1,801
Amortization of intangible assets		11		163		174
Total cost of revenues		13,798		42,504		56,302
Gross Profit		9,454		13,197		22,651

Expenses:
Sales and marketing						8,741
Technical operations and development						2,523
General and administrative						4,448
Depreciation of property and equipment						124
Amortization of intangible assets						1,866
Loss (gain) on currency forward contracts						(79	)
Income from operations						5,028
Other income (expenses), net						(972	)
Income before provisions for income taxes					$	4,056

Three months ended March 31, 2018	Network Access Services		Domain Services		Consolidated Totals
Net Revenues	$	23,608	$	72,187	$	95,795

Cost of revenues
Cost of revenues		12,207		56,765		68,972
Network expenses		490		2,084		2,574
Depreciation of property and equipment		833		298		1,131
Amortization of intangible assets		11		488		499
Total cost of revenues		13,541		59,635		73,176
Gross Profit		10,067		12,552		22,619

Expenses:
Sales and marketing						8,365
Technical operations and development						2,095
General and administrative						4,530
Depreciation of property and equipment						101
Amortization of intangible assets						1,832
Loss (gain) on currency forward contracts						(3	)
Income from operations						5,699
Other income (expenses), net						(772	)
Income before provisions for income taxes					$	4,927

(b)

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

Dollar amounts in thousands of U.S. dollars

	March 31, 2019		December 31, 2018
Canada	$	2,009	$	1,393
United States		53,422		46,631
Germany		55		41
	$	55,486	$	48,065

(c)

The following is a summary of the Company’s amortizable intangible assets by geographic region (Dollar amounts in thousands of U.S. dollars):

	March 31, 2019		December 31, 2018
Canada	$	6,218	$	6,553
United States		43,356		30,421
	$	49,574	$	36,974

(d)

Valuation and qualifying accounts (Dollar amounts in thousands of U.S. dollars):

Allowance for doubtful accounts excluding provision for credit notes	Balance at beginning of period		Charged to costs and expenses			Write-offs during period		Balance at end of period
Three months ended March 31, 2019	$	132	$	(1	)	$	-	$	131
Year ended December 31, 2018	$	168	$	(36	)	$	-	$	132